CanAlaska Uranium Ltd. [CVV-TSXV; CVVUF-OTCQB; DH7N-Frankfurt] said Wednesday February 26 that it has signed a letter of intent with Fjordland Exploration Inc. [FEX-TSXV; FEXXF-OTC] that gives Fjordland the right to earn up to an 80% stake in CanAlaska’s 100%-owned North Thompson Nickel Project in Manitoba.
News of the deal sent Fjordland shares up 62.5% or $0.025 to 6.5 cents. The shares are trading in a 52-week range of $0.03 and 10 cents.
Backed by High Power Exploration (HPX), a private company headed by billionaire mine financier Robert Friedland, Fjordland has been exploring a geological structure known as the Pants Lake intrusion in Labrador.
It is located 80 km south of the Voisey’s Bay intrusion which hosts the legendary nickel mine of the same name. The Voisey’s Bay mine was discovered by a prospecting company hired in 1993 by another Friedland company, Diamond Fields Resources.
CanAlaska is a uranium exploration company with a large land position in Saskatchewan’s Athabasca Basin. Its flagship property is the West McArthur Project, which lies on the eastern side of the Athabasca Basin, adjacent to Cameco Corp.’s [CCO-TSX; CCJ-NYSE] McArthur River Mine.
The Thompson Nickel Belt hosts over 18 nickel deposits and is thought to have produced over 5 billion pounds of nickel since 1959. The North Thompson Project covers 18,685 hectares and is located approximately 25 km from the city of Thompson, Manitoba It consists of the Strong, Hunter and North Manibridge claims.
The project covers most of the northern extension of the Thompson Nickel Belt, and hosts the same geological and structural environment as the nearby Tier-1 Thompson Mine, which is owned and operated by Brazilian mining giant Vale SA [VALE-NYSE], but has seen essentially no exploration drillings since 2005.
Canalaska said the project contains a series of high-grade nickel drill intersections from historical work that warrant follow-up with modern geophysics and drilling.
The Mel deposit, with an Indicated plus Inferred Resource of 5.3 million tonnes, grading 0.87% nickel, occurs 3 km east of the Hunter claims and the structure hosting the Mel deposit extends onto the project.
“Management is very pleased that Fjordland and their financing partners have been able to confirm the targets identified by the CanAlaska team,” said CanAlaska President Peter Dasler. “In addition, the application of their evaluation techniques has identified further targets at depth and along the trends of existing targets,” he said. “We are looking forward to working with Fjordland to advance exploration on the Hunter and Strong properties.”
Under the agreement, Fjordland can earn up to an 80% interest in the project by undertaking work and payments in three defined earn-in phases. Fjordland can earn an additional 49% interest by paying $25,000 in cash and issuing one million shares to CanAlaska. It must also spend $1.5 million on exploration within 18 months of the TSX Venture Exchange approval date.
Fjordland can earn an additional 21% stake in the project by paying a further $50,000 in cash, issuing a further 1.5 million shares and spending an additional $2.5 million on exploration within 24 months of committing to the Stage 2 option.
Fjordland can earn another 10% stake by paying a further $75,000 in cash and issuing an additional six million common shares. It must also spend $5 million on exploration within 24 months of committing to the stage three option.
On Wednesday, CanAlaska shares eased 2.6% or 19 cents to 18.5 cents. The shares are currently trading in a 52-week range of 12 cents and 32 cents.