Magma exercises Beaver option

THE BOURSE WHISPERER: Perth-based Magma Metals has exercised its option to purchase the Beaver Lake claim, located within its Thunder Bay North platinum-palladium-copper-nickel project in Ontario, Canada.

The Beaver Lake claim covers an underground mineral resource as well as a newly defined eastern extension to the underground mineralisation the company had announced in August.

It is also part of the area which is currently being subjected to a step-out drilling program.

The claim had been subject to a five-year option agreement which was due to expire the day of Magma’s announcement.

Magma has exercised that option and as a consequence has now acquired 100 per cent ownership of the claim for a consideration of one million Canadian dollars in cash and 200,000 shares in the company issued to the vendors.

Magma now holds 100% of the area encompassing the entire Current Lake Intrusive Complex.

This is subject to a 3% net smelter return royalty, one third of which can be acquired at any time for C$1 million.

“Exercising the Beaver Lake option secures 100 per cent ownership of the underground resource and its potential extensions for about 800 metres to the east and is an important step in the development of this project,” Magma Metals managing director Dr Keith Watkins said in the company’s announcement to the Australian Securities Exchange.

Magma has previously established Mineral Resources at the Thunder Bay North project, from drilling it carried out completed prior to May 2010.

The Resources are made up of:

Open Pit Indicated Resource:

–    8.46 million tonnes at 2.13 grams per tonne platinum equivalents (1.04 grams per tonne platinum, 0.98 grams per tonne palladium, 0.25 per cent copper and 0.18% nickel) containing 580,000 ounces platinum equivalent metal.

Underground Indicated Resource:

–    1.03 million tonnes at 3.48 grams per tonne platinum equivalents (1.63 grams per tonne platinum, 1.51 grams per tonne palladium, 0.39 per cent copper and 0.24 per cent nickel) containing 115,000 ounces platinum equivalent metal; and

Underground Inferred Resource:

–    0.21 million tonnes at 3.00 grams per tonne platinum equivalents (1.40 grams per tonne platinum, 1.29 grams per tonne palladium, 0.34 per cent copper and 0.23 per cent nickel) containing 20,000 ounces platinum equivalent metal.

Magma Metals said its strategy from now on will be to work on enhancing the project’s economics by:

–    Growing the resource base through step-out drilling;

–    Including the underground resources in a proposed mine plan; and

–    Simplifying the mineral processing flow sheet.