NFX Gold to earn 50% interest in James Bay assets
2007-07-16 16:42 ET - News Release
Mr. Thomas Larsen reports
NFX GOLD OPTIONS FOUR JAMES BAY DISTRICT PROPERTIES
NFX Gold Inc. has signed a letter of agreement with Eloro Resources Ltd. allowing NFX to earn a 50-per-cent interest in four of Eloro's wholly owned James Bay district properties in the La Grande volcano-sedimentary belt located north of Goldcorp Inc.'s Eleonore gold prospect area. The properties involved in the transaction are the Lemoyne North, Horseshoe, Taiga and Taiga West claim blocks.
Under the terms of the agreement, NFX has an option to earn a 50-per-cent interest in the properties by incurring $3-million on exploration-related expenditures on or before July 15, 2011, as follows:
* $500,000 on or before July 15, 2008;
* An additional $750,000 on or before July 15, 2009;
* An additional $750,000 on or before July 15, 2010;
* An additional $1-million on or before July 15, 2011.
The properties are currently encumbered with a 1-per-cent net smelter return royalty. The obligations of the existing royalty agreement will be assigned from Eloro to the joint venture, subject to the terms thereof.
Since there are common directors to each of the companies, the board of directors of each of Eloro and NFX struck an independent committee to review and assess the proposed transaction. In each case, the independent committee was composed of one independent director who is an experienced geologist. Each independent committee reviewed the proposed transaction and its underlying property and concluded that the proposed transaction was comparable to transactions between other mineral exploration companies relating to comparable properties. Each independent committee recommended to its respective board of directors that the proposed transaction be approved. The proposed transaction is subject to approval of the boards of directors and any necessary regulatory approvals.
The Lemoyne North and Horseshoe properties total 99.8 square kilometres and are now contiguous as a result of Eloro staking additional claims in the area in June, 2007. The Lemoyne North property straddles the northern border of the Poste Lemoyne property where Virginia Mines Inc. has outlined a 95,000-ounce-gold resource grading 14.5 grams per tonne Au, that included intersections of up to 43.09 g/t gold over 11.65 metres (source: Virginia Mines Inc. website). Recent work completed at the Lemoyne North property has identified felsic volcanic rocks with mineralization and alteration similar to the world-class gold deposits in the Doyon-Bousquet-LaRonde belt of the Abitibi. The work has identified target areas for immediate drilling in areas where the alteration is strongest, and where Eloro's 2006 shallow drilling intersected semi-massive sulphides anomalous in gold, silver and zinc. Historic grab sample assays at Lemoyne North (Virginia Gold Mines, 1996, Boreal Exploration, 1998), include grades up to 4.04 per cent copper, 21.22 g/t gold and 38 g/t silver.
The Taiga and Taiga West properties are composed of 161 claims, totalling 82.7 square kilometres. Both properties are also contiguous as a result of recent additional claim staking by Eloro. At Taiga, the property hosts grab samples with significant assays (Boreal Exploration, 1999) carrying up to 19.34 g/t gold, 2.13 per cent copper and 2.73 per cent zinc.
NFX corporate update
NFX also announces that further to news in Stockwatch May 15, 2007, and the subsequent due diligence process on the PG101 property located in Holloway and Marriot townships, Ontario, and other properties collectively owned by the Perron Group, it has elected not to proceed with the option and right of first refusal granted to the company by the Perron Group. The due diligence review determined that the historic data from the Kerr-Chesterville and PG101 properties did not enable a relatively rapid assessment of historic work and remaining exploration potential. Coupled with the fact that the terms of the option agreement required fairly rapid and significant expenditures to be fulfilled, the company has elected to not proceed with the option and first right of refusal.
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