Lonmin Canada Inc. and Lonmin Plc will spend $11 million over four years in a joint venture agreement with Sudbury-based Wallbridge Mining Company Limited.
In exchange, Lonmin can earn up to a 50 per cent interest in Wallbridge’s four Parkin Properties located North of Sudbury.
The deal was announced Wednesday.
“Our business plan … focuses on acquiring value-accretive near-term production opportunities, as well as advancing our exploration properties, including our Parkin Properties, through joint venture partnerships,” Marz Kord, president and CEO of Wallbridge, said in a release.
“I am pleased that we have not only advanced our discussions regarding some external assets, but have now amended the (North Range Joint Venture agreement) with Lonmin to include our Parkin Properties. This plan provides the company with sustainable cash flow, while maintaining active exploration for large-scale discovery upside in the Sudbury camp.
“Our recent option agreement with Implats to purchase their portion of the project, the positive results of the drilling program in the first quarter of this year, and the recent mechanical stripping attracted a number of potential joint venture partners for our Parkin Properties and ultimately resulted in securing this agreement with Lonmin.”
The Parkin Properties are being explored for high-grade polymetallic nickel, copper, and platinum group metals (PGMs) over a 9.5 km strike length of the Parkin Offset dyke. The properties include the former Milnet Mine, the high-grade Milnet 1500 Zone, and the Parkin Resource.
The first exploration program on the Parkin Properties will include expenditures of $2 million and is scheduled to start Oct. 1, the beginning of Lonmin’s fiscal year. The program will include drilling to test the potential extension of the near-surface resource and the extent of higher grade PGM zones within the mineral envelope.
Wallbridge said its Parkin Properties is typical of that hosted by quartz diorite offset dykes in the Sudbury mining camp and may be similar to Vale’s North and South Mines hosted by the Copper Cliff Offset dyke; Vale’s Totten deposit under development in the Worthington Offset Dyke; and KGHM International Ltd.’s recent discovery on its Victoria project, also hosted in the Worthington Offset dyke.
Wallbridge said it is working to become a mid-tier mining company with sustainable revenue through acquisition, discovery, development and production of metals. This will be achieved by building on our current assets and the strengths and capabilities demonstrated by our recent successes in developing and operating our Broken Hammer open pit, as well as our ongoing partner-funded exploration joint ventures, and the value generated within our spin-out companies.
In Sudbury, Wallbridge is currently producing copper and platinum group metals at its open-pit Broken Hammer operation. It also has active partner-funded exploration underway for nickel, copper, and PGMs on its Parkin Properties and other North Range Joint Venture and Sudbury Camp Joint Venture properties.
Outside of Sudbury, Wallbridge has exposure to active exploration for copper and gold in Jamaica and British Columbia through its 18% ownership of Carube Copper Corp.
Wallbridge said its growth strategy is to focus on valuable natural growth and near-term production opportunities (internal or external) while maintaining active exploration for large-scale discovery upside.