Indicator Minerals Inc.

Indicator Minerals Inc.

June 02, 2006 14:54 ET

Indicator Minerals Options Darby Project for $14 Million Spending Commitment

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 2, 2006) - Indicator Minerals Inc. (TSX VENTURE:IME) announced today that it has entered into an agreement with Teck Cominco Limited whereby Teck Cominco is required to spend $14 million over four years to earn a 51% interest in the diamond rights on Indicator's 80%-owned Darby Property in Nunavut Territory.

Under the terms of the agreement, a joint venture will be formed upon completion of the $14 million commitment with the following terms:

- While Teck Cominco owns at least a 51% interest in the Darby Project, it will be obliged to carry Indicator's remaining 29% share of exploration expenses through to mine production on a project loan basis. Indicator will be required to repay the loan only in the event of cash flow from the Project.

- Teck Cominco will propose a minimum program of $2.5 million per year to advance the Project.

- Indicator will have the right to purchase Teck Cominco's interest, under certain circumstances, if Teck Cominco elects not to develop a mine.

"We are delighted to have Teck Cominco as our partner on the Darby Project," says Bruce Counts, President and CEO of Indicator. "Teck Cominco has the technical and financial capability to advance the program quickly. The level of Teck Cominco's spending commitment demonstrates its belief in the Project's technical merits. In addition, this agreement will allow Indicator to focus its capital on exploring its other projects."

Indicator will operate Darby on behalf of Teck Cominco under a service contract that is renewable annually. The Darby Project includes the diamond rights on more than 400,000 acres of mineral claims and prospecting permits. The property is located approximately 120 km southwest of the hamlet of Kugaaruk in Nunavut Territory. Results from the work conducted to date include the recovery of kimberlite indicator minerals with diamond inclusion chemistry, three distinct kimberlite float trains and more than 30 airborne geophysical targets including the 27.7 acre Iceberg anomaly.

Indicator Minerals Inc. is a Canadian exploration company focused on the discovery of economic diamond deposits. Founded in 2004, the company has assembled one of the most qualified technical teams in worldwide diamond exploration. Indicator is exploring more than six million acres of targeted ground in the Canadian arctic and has two key projects in the Franklin District of Nunavut: Darby and Barrow.

Indicator's management has quickly positioned the company to be a sophisticated player in both Canadian and international diamond exploration by forming strategic partnerships, acquiring highly prospective properties and conducting systematic and efficient exploration programs. Indicator represents an outstanding opportunity for investment in the junior market.

On behalf of the Board

Indicator Minerals Inc.

Bruce Counts, P.Geoph., President & CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Indicator Minerals Inc.
    Bruce Counts
    President & CEO
    1-877-331-4605 or (604) 331-4605
    (604) 331-4654 (FAX)