First Point Minerals Corp.

First Point Minerals Corp.

May 04, 2011 12:36 ET

First Point Minerals Confirms First Year Exercise of Warrants by Cliffs and 20 Other Shareholders

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 4, 2011) - First Point Minerals Corp. (TSX VENTURE:FPX) ("First Point" or the "Company") is pleased to announce that twenty-one shareholders, including Cliffs Natural Resources Exploration Inc., an affiliate of Cliffs Natural Resources Inc. (NYSE:CLF)(Paris:CLF) ("Cliffs"), have exercised a total of 3,494,900 warrants for aggregate proceeds of $2,271,685. Cliffs exercised 1,125,000 First Point warrants generating $731,250 in proceeds for the Company.

"We are very pleased with the confidence and strong support that Cliffs and other shareholders are showing in First Point and our portfolio of nickel-iron alloy projects by the exercise of the warrants after only one year," said Peter Bradshaw, President and CEO of First Point.

The warrants exercised were issued in April 2010 in conjunction with a non-brokered private placement financing that grossed $7.5 million for First Point. As announced earlier, the 15 million unit offering at $0.50 per unit consisted of one common share and one-half of a non-transferable share purchase warrant. Each whole warrant entitled the warrant-holder to purchase one common share at a price of $0.65 per share through April 26, 2011, and thereafter, until the warrants expire on April 26, 2012, at a price of $0.80 per share.

The proceeds from the exercise of the warrants will be used for the exploration and development of the Company's 100% owned portfolio of nickel-iron alloy properties and for general working capital requirements. The Company recently approved a $2 million campaign to explore for "naturally occurring stainless steel" nickel-iron alloy targets internationally in 2011.

First Point now has approximately $9.3 million in cash, with 90,423,618 shares outstanding, or 102,618,518 shares on a fully diluted basis. If the 12,194,900 options and warrants outstanding were to be exercised today, it would generate proceeds of approximately $7.1 million for the Company.

The Decar nickel-iron alloy project is being advanced under an option/joint venture agreement with Cliffs that was signed in November 2009. By spending US$4.5 million on exploration and development over a period of four years, Cliffs can earn an initial 51% interest in the Decar project.

Once Cliffs has earned its initial 51% interest, it will then have the right to increase its property ownership (i) to 60% by completing a preliminary economic analysis, (ii) to 65% by completing a prefeasibility study, and (iii) ultimately to 75% by completing a bankable feasibility study. Should Cliffs earn a 75% interest in Decar, First Point would hold the remaining 25% participating interest, plus a 1% net smelter return royalty interest.

The target at the Decar property is a near-surface, bulk-tonnage, open pittable nickel deposit on a mining scale equivalent to that of the large open pit copper porphyry mines operating in British Columbia. The nickel mineralization at Decar is a "naturally occurring stainless steel" nickel-iron alloy that contains no sulphides. Since there are no sulphides, the nickel-iron concentrate may be sold directly to a steel mill without the need for smelting, or refining, and its inherent costs. The absence of sulphides will also result in a much lower environmental impact and associated mitigated costs due to no acid rock drainage issues.

Cliffs spent approximately US$1.4 million at Decar in 2010 on airborne and ground geophysics, surface sampling and the drilling of nine widely-spaced holes, including seven holes into the Baptiste target and two holes into the Sidney target. Spaced over a distance of 1,600 metres at Baptiste, the drilling confirmed the outcropping nickel-iron alloy mineralization extends to a depth of at least 300 metres and is uniformly distributed from top to bottom of each hole, while in the mineralized zones. The grade in all nine holes averaged 0.126% nickel in alloy for the mineralized zones. Each of the nine holes bottomed in mineralization.

In November 2010, Cliffs committed a further US$500,000 to fund metallurgical test work on fresh samples collected from the drill core and other evaluation activities. The metallurgical test work is investigating the potential to recover the nickel-iron alloy mineralization using only grinding and a combination of low-cost magnetic separation and gravity recovery methods.

As previously announced in the news release of March 21, 2011, the metallurgical test work is ongoing but based on positive results from the preliminary test work to date, Cliffs approved a minimum 4,000-metre drill program for 2011 that will begin to evaluate the bulk-tonnage size potential of the Baptiste and Sidney targets. In addition, several new highly prospective nickel alloy targets will be tested. Results of the metallurgical test work are expected by early summer. Additional drilling will be guided by the results of these tests and the summer drilling campaign.

Dr. Peter Bradshaw, P. Eng., First Point's Qualified Person under NI43-101, has reviewed and approved the technical content of this news release.

About First Point

First Point Minerals Corp. is a Canadian base and precious metal exploration company. For more information, please view the Company's website at

On behalf of First Point Minerals Corp.

Peter Bradshaw, Ph.D., P. Eng., President

Forward-Looking Statements

Certain of the statements made and information contained herein is considered "forward-looking information" within the meaning of applicable Canadian securities laws. These statements address future events and conditions and so involve inherent risks and uncertainties, as disclosed in the Company's periodic filings with Canadian securities regulators. Actual results could differ from those currently projected. The Company does not assume the obligation to update any forward-looking statement.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Contact Information