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MAN project optioned to Anglo Nevada Star lands exploration option with major partner on Alaska Range property; prospects for nickel, copper, PGEs Patricia Jones Petroleum News Contributing Writer
Nevada Star Resource Corp. said Dec. 11 that it has signed a letter of intent with a major mining partner on about half of its 269-square mile property on the south flank of the Alaska Range in central Alaska.
It’s the first option/joint venture partner for the MAN Project — a property that contains nickel, copper and PGE targets, all benefiting from recent increases in market prices.
Anglo American Exploration (Canada) Ltd., a wholly owned subsidiary of mining giant Anglo American plc, signed the letter of intent with Nevada Star and is in the process of completing a 45-day due diligence period before signing the final joint venture agreement.
“I’m reasonably confidant that they will go ahead,” said Gerry Carlson, former Nevada Star president and current board member, in a phone interview Dec. 16. “They’ll go in and give a really good start to the project. Certainly the demand has increased for those metals and prices are going up.”
Nevada Star’s interim President Robert Angrisano said in a Dec. 11 press release that the company chose to partner with Anglo American “due to their strength in implementing science and technology with exploration.
“This joint venture is a crucial next step in driving the project forward in a major way and signifies the culmination of seven years of exploration and discovery on the project,” he said.
Platinum prices have topped more than $800 an ounce in recent days. Nickel prices have also increased due to commodity shortages, according to the release describing the negotiated agreement. Option terms outlined The exploration agreement covers two areas of Nevada Star’s MAN Project — the Fish Lake and the Dunite Hill properties, which make up about 50 percent of the company’s property in central Alaska. The MAN Project is 164 miles southeast of Fairbanks and 248 miles northeast of Anchorage.
The property is accessed from the Denali Highway, near Paxson, Alaska. Remote road access skirts the south side of Dunite Hill, Carlson said, while the Fish Lake property is further north, requiring helicopter access for exploration crews.
Terms of the proposed agreement call for Anglo American to earn a 51 percent interest in the property by spending $12 million during a five-year earn-in period.
If Anglo American also completes a feasibility study at its expense, the company is entitled to an additional 19 percent, making the partnership a 70/30 split.
Anglo American can earn an additional 5 percent by arranging production financing for both parties. Summer work on property Nevada Star conducted some exploration work throughout the summer of 2003 at the MAN property, including drilling three holes at Fish Lake for a total of 565 feet. Grades up to 5.7 percent nickel, 5.7 percent copper and 3.4 grams per ton of palladium were encountered.
Surface sampling returned values of up to 1.8 grams per ton palladium and 1.3 percent nickel.
While results did not produce high-grade intercepts, Carlson said, drilling “indicated good PGEs.”
“It’s a large body of mineralization. The size potential is dramatic,” he added. Canwell trenching Nevada Star also conducted some backhoe trenching this summer on its Canwell property, part of the MAN Project, releasing results Dec. 2.
Metal concentrations measured along a “significant strike length” yielded as much as 1.6 grams per tonne platinum, 1.1 grams per tonne of palladium, 1.6 percent nickel and 0.5 percent copper in channel samples, the company said.
Soil sampling revealed a 3,000 by 500-foot anomalous zone at Canwell. Five additional soil anomalies, measuring 1,000 to 6,500 feet in length, were found on the Canwell and Rainy properties.
The work showed “good continuity of the zone,” Carlson told Petroleum News on Dec. 16. The company had planned to drill the Canwell property, but was hampered by weather and ground conditions, he said. “It’s not easy ground to drill.”
Other prospects in the MAN project include Rainy, Broxson, Summit Hill and Eureka. Spring claim-staking Nevada Star staked 80 square miles of mining claims in the area in early 2003, primarily the Fish Lake property, to add to the MAN project.
“Staking priorities were based on known mineral occurrences, favorable geology and a newly released aeromagnetic survey of the project area by the Alaska Division of Geological and Geophysical Surveys,” Carlson said in a May 8 news release.
The division, working with funding from the Bureau of Land Management, released airborne geophysical data in March for more than 600 square miles in the Denali Block area near Paxson. That, combined with a recent land transfer from the federal government to the state of Alaska, sparked mining interest in the area.
Earlier this year, Nevada Star announced plans to spend $1.5 million on the project in 2003. Some of the planned drilling could not be conducted due to weather delays for helicopter access, Carlson said.
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