Full Metal Minerals Ltd. (TSX VENTURE: FMM) ("Full Metal") is
pleased to announce that it has entered into an Option agreement
with Antofagasta Minerals S.A. ("Antofagasta Minerals") to explore
the Pyramid Copper-Gold-Molybdenum porphyry project, located in
southwest Alaska. An initial 2,000 meter core drilling program is
underway.
Antofagasta Minerals can earn an initial 51% Interest ("First
Option") by incurring US$6,000,000 in Expenditures during the first
four years (US$1,500,000 first year) and pay Full Metal US$200,000
in cash (US$50,000 at the end of the first year). Antofagasta
Minerals can then earn an additional 14% Interest for a total
aggregate of 65% Interest ("Second Option") by preparing and
delivering at its sole cost, a Scoping Study costing a minimum of
US$4,000,000 in expenditure. Antofagasta Minerals can then earn an
additional 15% Interest for a total aggregate of 80% Interest by
funding at its sole cost ("Third Option") a Feasibility Study on
the Project.
The 37,296 hectare Pyramid Porphyry Project lies along the
southern margin of the Alaska Peninsula approximately eight
kilometers from tidewater. It was discovered in 1974 by the
Aleut-Quintana-Duval Joint Venture, who drilled 19 shallow holes in
late 1975 (1,695 meters total), identifying a resource of 125
million tons of copper mineralization grading 0.403% copper and
0.025% molybdenum in a near-surface zone consisting largely of
chalcocite-enriched rock. This resource is historical in nature,
was completed prior to 2001 and NI 43-101 and should therefore not
be relied upon. Gold content was not an exploration target in the
initial exploration effort. More recent exploration by Battle
Mountain Gold in the late 1980's identified associated gold values
that have improved the potential of Pyramid. Recent work completed
by former Joint Venture partner Metallica Resources significantly
advanced the geologic understanding of the porphyry system at
Pyramid.
The 2010 exploration program will consist of a 2,000 meter core
drilling program, comprising five or six deep drill holes,
targeting the potassic core of the porphyry system. Drilling in the
1970's avoided the potassic core, with the majority of drill holes
less than 100 meters in length (maximum 168 meters). Full Metal
Minerals welcomes Antofagasta Minerals' expertise in porphyry
systems, as their technical team is world-renowned for their
understanding of exploration and mining these types of deposits,
primarily in Chile.
Aleut Agreement
On June 30, 2010, Full Metal amended the Exploration Agreement
with Option to Lease to acquire 100% interest in mineral rights
covering the Pyramid Project, with the Aleut Corporation signed on
January 5, 2007. The Aleut Corporation is an Alaska Regional Native
Corporation. The revised terms, which are set out in a new
agreement, extends the original term length of the Exploration
Agreement to December 31, 2016. Over the period, Full Metal will
make cash payments totaling US$285,000 ($35,000 first year) over
seven years, as well as annual Materials Payments of $20,000 per
year. Additionally, Full Metal will incur annual exploration
expenditures totaling US$4,500,000 ($300,000 first year).
At any time prior to December 31st, 2016, Full Metal may enter
into a Mining Lease with the Aleut Corporation. Upon entry into the
Mining Lease, Full Metal will make annual Advanced Royalty payments
escalating from $25,000 in the first year, to $400,000 on the 16th
anniversary and subsequent years. In the event of Full Metal
delivering a Feasibility Study, Full Metal will transfer 500,000 of
its own common shares to the Aleut Corporation, subject to approval
from the TSX Venture Exchange. Upon commencement of Commercial
Production, Full Metal will pay a Net Smelter Returns Royalty to
the Aleut Corporation of 2.5% for all commodities except for gold
and other precious metals. For Gold and other precious metals, Full
Metal will pay a Net Smelter Return royalty according to the
following schedule:
Price of Gold Production Royalty
------------------------------------------------------------
$300.00 or less 2.00% of Net Smelter Returns
$300.01 to $400.00 3.00% of Net Smelter Returns
$400.01 to $500.00 4.00% of Net Smelter Returns
$500.01 and above 5.00% of Net Smelter Returns
Shumagin Letter Agreement
On June 7, 2010, Full Metal and Shumagin Corporation, an Alaska
Native Village Corporation, signed a letter outlining Terms of
Agreement for a Mining Exploration Agreement and Option to Lease
between the Companies. The letter outlining Terms includes annual
cash payments totaling US$210,000 through December 31, 2016
(US$20,000 first year). The Shumagin Corporation and Full Metal
will endeavor to complete a comprehensive agreement by the fall of
2010.
The letter outlining Terms includes an option to lease. At any
time prior to December 31, 2016, Full Metal may enter into a Lease
Agreement with Shumagin Corporation. Upon the Effective Date of the
Lease and then on or before each annual anniversary during the Term
of this Lease until there is Commercial Production, Full Metal
shall pay to Shumagin Corporation an annual rental equal to ten
percent (10%) of the Fair Market Value of the Lease Area. After
Commercial Production has commenced, Full Metal will pay Shumagin
Corporation an annual rental equal to ten percent (10%) of
Commercial Production Fair Market Value of the Lease Area.
TDX Agreement
On July 15, 2010, Full Metal and TDX Pyramid LLC, an affiliate
of an Alaska Native Village Corporation, signed an Exploration
Agreement with Option to Lease covering surface lands at the
Pyramid Property. This Agreement includes annual cash payments
totaling US$180,000 over seven years (US$15,000 first year). At any
time prior to December 31, 2016, Full Metal may enter into a Lease
Agreement with TDX Pyramid LLC. Upon the Effective Date of the
Lease and then on or before each annual anniversary during the Term
of this Lease until there is Commercial Production, Full Metal
shall pay to TDX Pyramid an annual rental equal to ten percent
(10%) of the Fair Market Value of the Lease Area. After Commercial
Production has commenced, Full Metal will pay TDX Pyramid an annual
rental equal to ten percent (10%) of Commercial Production Fair
Market Value of the Lease Area, provided, however, that in no event
shall the annual rental ever be less than US$75,000.
In all Agreements between The Aleut Corporation, TDX Pyramid
LLC, and Shumagin Corporation with Full Metal, there are various
provisions for hiring preferences and contracting preferences with
the Native Corporations, Native Corporations shareholders, and
Native Corporation owned Companies.
The 2010 exploration program at Pyramid is supervised by John T.
Galey, Jr, C.P.G., Consulting Geologist, and Robert McLeod, P.Geo.,
Vice-President Exploration of Full Metal Minerals. Both are
Qualified Persons as defined by NI 43-101. Drill cores will be cut
in half using a diamond saw, with one half placed in sealed bags,
and delivered to ALS-Chemex facilities in Fairbanks, Alaska. A
sample quality control/quality assurance program utilizing
standards and blanks, as well as third-party check labs will be
implemented. Contents of this release were prepared by and approved
for release by Mr. McLeod.
Full Metal is a generative exploration company with multiple
precious and base metal projects in Alaska and the Yukon. Work
during 2010 includes drilling programs at the 100%-owned Fortymile
zinc-silver-lead Property, underground development with Harmony
Gold at the Lucky Shot Property, as well as additional surface work
and drilling programs at several of Full Metal's Properties funded
by Joint Venture Partners.
Antofagasta Minerals is a wholly-owned subsidiary and the mining
division of Antofagasta plc ("Antofagasta") (ANTO.L). Antofagasta
plc has three business divisions: Mining, Transport and Water.
Antofagasta is one of the world's largest copper producers. Its
activities are mainly concentrated in Chile where it owns and
operates three copper mines with a total production of 442,500
thousand tonnes of copper and 7,800 tonnes of molybdenum in 2009.
Antofagasta has recently commissioned a brownfield expansion at its
Los Pelambres mine and a new mine development, Esperanza, is
expected to enter into production at the end of 2010. Together,
these are expected to increase group copper production to over
700,000 tonnes from 2011. A feasibility study is also in progress
at Antucoya in Northern Chile. In Pakistan, a feasibility study is
at its final stages at the Reko Diq joint venture. In the United
States, the group recently signed a joint venture agreement to
complete the exploration and begin a feasibility study for Nokomis,
a copper and nickel project located in Minnesota. Antofagasta also
has exploration programs in Africa, Europe and the Americas.
ON BEHALF OF THE BOARD OF DIRECTORS
Michael Williams, President and Director
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: Full Metal Minerals Ltd. Jeff Sundar Vice President,
Investor Relations 604-484-7855 604-484-7155 (FAX)
info@fullmetalminerals.com www.fullmetalminerals.com
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