Patagonia Gold Plc

August 03, 2005 11:25 ET

Landore Resources Limited - West Graham Property Option Agreement

LONDON, ENGLAND--(CCNMatthews - Aug. 03, 2005) - Landore Resources Canada Inc., a fully owned subsidiary of Landore Resources Limited, has entered into an option / joint venture agreement with First Nickel Inc. (TSX-FNI) for that company to acquire a 70% interest in Landore's West Graham property adjoining the east zone of the Lockerby nickel mine near Sudbury, Ontario.

The West Graham property comprises one full patent Lot 12 in the township of Graham for a total area of approximately 130 hectares owned outright (land and mining rights) and is strategically located on the southern edge of the Sudbury Intrusive Complex, only 2 kilometres east of the Lockerby nickel mine and 10 kilometres west of the Creighton mine.

The agreement provides for First Nickel to make cash payments to Landore of $150,000 and carry out exploration and development expenditures of $6 million over a four-year period. Should First Nickel fully exercise the option, Landore shall decide whether it wishes to participate to the extent of its 30% working interest in the development of the property, failing which, First Nickel shall have the right to increase its interest to 85% by completing a bankable feasibility study within two years thereafter. The completion of the transaction is subject to the execution of a definitive agreement and regulatory approvals.

Extract from First Nickel's press release 3rd August

The 130-hectare Landore property extends for approximately 1.3 kilometres into the footwall south of the Lockerby East portion of First Nickel's Lockerby Mine property. Given the copper-depleted nature of the known contact-style ores and the presence of extensive Sudbury Breccia in the footwall, there is significant potential for high grade copper-PGE deposits in the footwall to the Lockerby East ore system.

The Landore property also contains the historic Conwest deposit. This contact-related deposit was estimated in the 1960's to have a mineral inventory of 4.3 million tons at 0.52% Ni and 0.33% Cu. This resource should be considered non-compliant with National Instrument 43-101. The centre of the deposit lies at approximately 250 metres vertical depth. Of particular interest to First Nickel are indicated areas of much higher grade within the Conwest deposit - for example, 2.35% Ni, 0.35% Cu over 15.5 feet in hole WG-27 and 2.32% Ni, 0.77% Cu over 7.7 feet in hole WG-9, etc. Platinum-palladium-cobalt values are unknown. This deposit is approximately 500 metres above First Nickel's Lockerby East deposit, along the same ore system, suggesting that there is considerable potential to find additional contact-related mineralization along this trend.

First Nickel plans to mount an aggressive exploration campaign on the Landore property commencing immediately. This will include deep-penetration Induced Polarization surveys from surface, detailed mapping of the distribution of Sudbury Breccia on the property and a thorough review of past drilling on the Conwest deposit to attempt to delineate areas of higher grade which may be accessible by a ramp from surface. First Nickel is also currently laying out plans for a major underground drilling program at Lockerby East to increase confidence levels in the existing resource base and to explore for more resources in the vicinity. In view of the Landore acquisition, a number of these underground holes will be continued south to explore for footwall deposits.

ENDS

Contact Information

  • Landore Resources Limited
    Bill Humphries / Richard Prickett
    07734 681262 / 07775 651421
    or
    Strand Partners Limited
    Simon Raggett
    020 7409 3494