Cornish Metals agrees sale of Nickel King Property

Cornish Metals announced on Monday that it has entered into a binding letter of intent with Northera Resources for the sale of its 100% interest in the Nickel King and Opescal Lake properties, collectively known as the Nickel King Property.

The AIM-traded firm said the agreement valued the transaction at up to CAD 8m (£4.59m).

Under the deal, Northera would initially pay Cornish Metals a non-refundable cash amount of CAD 0.1m within five days of signing.

Within 95 days, Cornish Metals would transfer the legal and beneficial title to the mining leases and mineral claims comprising the Nickel King Property to Northera, which would then make an additional non-refundable cash payment of CAD 0.9m.

The parties would finalise a definitive agreement within 60 days following the signing of the initial agreement.

On completion of Northera's go-public transaction, resulting in a listing on the TSX Venture Exchange or another stock exchange, Northera would issue common shares to Cornish Metals valued at CAD 7m.

The board said the Nickel King property, located in the Northwest Territories, 135 kilometres northeast of Stony Rapids, Saskatchewan, hosted a significant nickel-copper-cobalt (Ni-Cu-Co) deposit.

It said the deposit is situated within two arcuate stacked norite sills with mineralisation traced over around 2,600 metres.

An NI 43-101 compliant geological resource model indicated 11.1 million tonnes grading at 0.40% nickel, 0.10% copper and 0.018% cobalt, containing 44,500 tonnes of nickel, 10,600 tonnes of copper, and 2,200 tonnes of cobalt.

The inferred resource totalled 33.1 million tonnes grading at 0.36% nickel, 0.09% copper and 0.017% cobalt, containing 119,300 tonnes of nickel, 29,000 tonnes of copper, and 5,600 tonnes of cobalt, according to the Nickel King technical report dated 2 June 2010.

Cornish Metals said the Nickel King Property had a book value of nil, with the sale aligning with its strategic focus to advance its UK assets.

“The sale of Nickel King aligns with Cornish Metals' objective to focus its efforts on advancing its 100% owned and fully permitted South Crofty tin project, in the UK, towards a construction decision,” said interim chief executive officer and director Ken Armstrong.

“Cornish Metals will retain exposure to any future exploration success at Nickel King, as Northera works to recommence exploration activities at the Nickel King Property which comprises approximately 4,000 hectares in mining leases and mineral claims in Canada's Northwest Territories.”

At 1323 BST, shares in Cornish Metals were up 5.85% at 6.88p.

Reporting by Josh White for Sharecast.com.