TORONTO, June 27, 2012 /CNW/ - Pure Nickel Inc. (TSX: NIC) today released its operating highlights and financial results for the
three- and six-month periods ended May 31, 2012.
MAN Alaska Property
During the second quarter, Pure Nickel completed the final planning for
its MAN Alaska property, along with its exploration partner, Itochu
Corporation which has agreed to fund exploration expenditures totalling
US$4.9 million. Exploration commenced in late May, with mapping, soil
geochemistry and IP surveys. The drill started turning on June 20, 2012
and a total of 2,600 meters is expected to be completed by the end of
the program. This year is the fifth year that Itochu has funded
exploration: to date it has expended US$17 million and earned a 30%
interest. The agreement with Itochu allows for them to earn up to 75%
interest by incurring US$40 million of exploration expenditures by
2013. Jon Findlay, Ph.D., P.Geo is the designated Qualified Person for
Tower, Manitoba Property
Pure Nickel's option partner on the Tower property in central Manitoba,
Rockcliff Resources Inc. announced on May 23, 2012 a near-surface drill
discovery of a new copper zone at the Tower Property. Termed the T-2
Copper Zone, it is located at the very south edge of a recently
identified +500m long untested DPEM geophysical anomaly. Discovery
hole (TP12-025) intersected 4 metres grading 2.44% copper, 0.7 g/t
gold, 18.2 g/t silver, 0.3% zinc starting at 161 meters down the hole
including 2 metres grading 3.3% copper, 0.8 g/t gold, 24.6g/t silver,
0.4% zinc. Ken Lapierre, P.Geo., of Rockcliff Resources Inc., is the
designated Qualified Persons for this project.
Salt Chuck, Alaska Property
The permitting process for the Salt Chuck property is in its last stages
and plans for a late summer or fall exploration program are being
readied. Located on Prince of Wales Island in the Alaskan Panhandle,
the property consists of 146 contiguous federal lode mining claims. The
Salt Chuck mine produced approximately 300,000 metric tonnes of ore,
reported by US government summaries (1948) to be 0.95 % copper, 1.96
g/t palladium, 1.12 g/t gold and 5.29 g/t silver. The mine was the
largest producer of palladium in the United States during its era of
production. Jon Findlay, D.Sc., P.Geo is the designated Qualified
Person for this project.
Milford Copper property
In November 2011, Pure Nickel signed an agreement with CS Mining, LLC
and Skye Mineral Partners, LLC (jointly referred to as "CS Mining")
with respect to its Milford, Utah, copper property. Under the
agreement, Pure Nickel received a payment of US$1.0 million ($1.0
million) at that time, and was to also receive a payment of US$1.0
million in May 2012 and a payment of US$1.5 million ($1.5 million) in
November 2012. In addition, Pure Nickel will receive a 1% net smelter
royalty capped at US$8.0 million ($8.0 million).
On June 4, 2012, Pure Nickel announced it agreed with CS Mining to amend
the settlement agreement. CS Mining paid US$0.5 million ($0.5 million)
towards the payment that was due in May 2012 and will place the balance
of $0.5 million in escrow with an independent third party, First
American Title Insurance Company. The escrowed funds will be released
to Pure Nickel once a disputed net profits interest, discussed below,
In the agreement signed with CS Mining in November 2011, Pure Nickel had
provided CS Mining with certain indemnities regarding title to the
properties that its subsidiary, Nevada Star Resource Corp. (U.S.) had
previously controlled. The indemnity specifically addressed a 12% net
profits interest that was purportedly owned by among others, former
officers and directors of Nevada Star.
On April 25, 2012 Pure Nickel and its subsidiary filed a complaint in
United States District Court, District of Utah, Central Division
against Robert Angrisano, Monty D. Moore, Scott Nicholson and Monty L.
Moore. Monty D. Moore and Robert Angrisano were former officers and
directors of Nevada Star and former directors of Pure Nickel. The
A court determination that the net profits interest is invalid and
unenforceable due to, among other things, breach of fiduciary duties.
A court determination that the net profits interest is unenforceable
because it is specific to the mining activities of Nevada Star and it
is not tied to the mining claims.
Compensation to Pure Nickel for damages due to the pursuit of the
invalid and unenforceable net profits interest and interference in the
business relationship between us and CS Mining.
Compensation to Pure Nickel for the costs and damages of other title
Results for three- and six-month periods ended May 31, 2012
Pure Nickel reported that its net loss was in line with expectations:
$485,000 ($0.01 per share) for the three months ended May 31, 2011,
compared to a net loss of $526,000 ($0.01 per share) for three months
ended May 31, 2011, and a net loss of $967,000 ($0.01 per share) for
the six months ended May 31, 2012, compared with a net loss of $887,000
($0.01 per share) in the prior year. For further information please
refer to Pure Nickel's unaudited condensed interim consolidated
financial statements and the accompanying management's discussion and
analysis on the company's website at www.purenickel.com, on SEDAR at www.sedar.com. (All dollar amounts herein are in Canadian funds unless otherwise
About Pure Nickel Inc.
Pure Nickel is a mineral exploration company with a diverse collection
of nickel, copper and platinum group element exploration projects in
North America. The Company is currently active at its flagship MAN
property, which is fully funded under an option agreement with Itochu
Corporation of Tokyo, Japan. The Company will also undertake an initial
drill program on its 100% owned Salt Chuck property in the coming
months, and will embark on a re-assay program at its William Lake
project in the Thompson Nickel Belt. In addition, the Company is
actively pursuing other, non-nickel, properties in North America and
Some of the statements contained herein may be forward-looking
statements which involve known and unknown risks and uncertainties.
Without limitation, statements regarding potential mineralization and
resources, exploration results, expectations, plans, and objectives of
Pure Nickel are forward-looking statements that involve various risks.
The following are important factors that could cause Pure Nickel's
actual results to differ materially from those expressed or implied by
such forward-looking statements: changes in the market price of mineral
commodities, general market conditions, risks inherent in mineral
exploration, risks associated with development, construction and mining
operations, the uncertainty of future exploration activities and cash
flows, and the uncertainty of access to additional capital. Actual
results and future events may differ materially from those anticipated
in forward-looking statements. Pure Nickel undertakes no obligation to
update forward-looking statements if circumstances or management's
estimates or opinions should change. The reader is cautioned not to
place undue reliance on any forward-looking statements.
The TSX Exchange does not accept responsibility for the adequacy or
accuracy of this release.