|January 31, 2007|
Crowflight -- Xstrata Nickel Amend The Terms Of Thompson Nickel Belt Agreements, Sign Offtake Agreement For Treatment Of Bucko Deposit Concentrate
CROWFLIGHT MINERALS INC. (Crowflight, the Company) (TSX Venture Exchange: CML) is pleased to announce that the Company, having substantially fulfilled its earn-in commitments which would have permitted it to have earned an initial 50% interest in the Bucko Lake Nickel Deposit under the terms of an Agreement between Crowflight and Falconbridge Limited, dated March 2006 (refer to press release dated April 6, 2006), has under the terms of recently signed amended Agreements with Xstrata Nickel, the right to: (1) earn a 100% interest in mining lease ML-031 which contains the Bucko Lake Nickel Deposit and a 5.5 kilometre area surrounding the Bucko Deposit; and (2) earn a 100% interest in all of approximately 400 square kilometres of advanced-stage exploration ground previously the subject of the separate Thompson Nickel Belt (TNB) South and TNB North Agreements (refer to Figure 1 - Location Map). In a related transaction, the Company has agreed to a definitive offtake agreement to sell its Bucko Lake Nickel Deposit concentrates to Xstrata Nickel for the duration of the mine life, currently anticipated to be approximately six years.
Thomas Atkins, President and CEO of Crowflight commented on the Company's announcements stating: "Following extensive discussions, the terms of the amended agreements provide attractive win-win opportunities for both companies. Crowflight is pleased to have an offtake agreement for the treatment of the Bucko Lake nickel concentrates at what we are confident are competitive terms. The ability to earn a 100% interest in the Bucko Deposit mining lease, sooner than had existed under the previous agreement, allows Crowflight to more effectively secure capital to develop the Bucko Nickel Deposit as promptly as possible and in so doing provide nickel concentrate feed to Xstrata. Revisions to terms of the exploration properties gives Crowflight and Xstrata Nickel excellent exposure to new discoveries which have the potential to supplement production at Bucko, support another new operation similar in size to Bucko, or in the event of a large-scale discovery, provide Xstrata with the leverage to discovery of the size it seeks while permitting both companies to share in this large-scale upside potential."
Shaun Usmar, Chief Financial Officer of Xstrata Nickel added: "Xstrata is impressed by the dedication and professionalism of the Crowflight team as they've independently advanced the development of the Bucko Deposit and the manner in which they have collaborated with their counterparts at Xstrata Nickel in progressing the Thompson Nickel Belt regional exploration programs. It's a result of this performance and commitment that we're pleased to offer these amendments to Crowflight and to enter into the offtake agreement for the purchase of the Bucko Lake nickel concentrate. We wish Crowflight success going forward in their endeavors in the Thompson Belt and we look forward to the continuation of our productive relationship."
Right to Earn a 100% Interest in the Bucko Lake Nickel Deposit
Under the terms of the jointly signed Bucko Lake Deposit Lease Transfer Agreement, Crowflight has the right to earn a 100% interest in the Bucko Lake Nickel Deposit Mining Lease, ML-031 following its having completed its expenditure commitments and having completed a Bankable Feasibility Study of a technical standard acceptable to a bank in the context of financing such a project's development. On the exercise of its rights Crowflight is to issue 2,000,000 shares to Xstrata Nickel, subject to regulatory approval. The issuance of these share were a condition dating back to the original and amended versions of the Agreement governing the Bucko Deposit and Mining Lease.
Crowflight's 100% interest in ML-031 is subject to an Back-in Right whereby should Crowflight outline a Threshold Deposit - a new Deposit (outside of the currently known Bucko Resources) exceeding 200,000,000 pounds of nickel in Measured and Indicated Resources - Xstrata Nickel has the right to Back-in for a 50% interest and to become the operator of the new Threshold Deposit by paying to Crowflight an amount equal to the aggregate of all direct expenditures which were incurred by Crowflight in carrying out Mining Operations on the Bucko Lake Lease outside of the Bucko Resource Block prior to the date of exercise of the Back-in Right. The Bucko Lake Deposit currently contains Measured and Indicated Resources of approximately 110,000,000 pounds of nickel (refer to press release dated December 7, 2006).
Right to Earn a 100% Interest in the Thompson Nickel Belt Exploration Properties
Under the terms of a jointly signed Exploration Agreement, Crowflight has the right to earn a 100% interest in both the Thompson Nickel Belt (TNB) North and TNB South Exploration Properties comprising the second largest land position held by a company in the TNB and of which includes approximately 440 square kilometres of advanced-stage exploration ground. Crowflight will earn an initial 35% interest upon its expenditure of $7.2 million in exploration activities on the combined TNB Exploration Properties (TNB North and/or TNB South at Crowflight's discretion) no later than December 31, 2009 and will earn a 100% interest upon its expenditure of a further $6.0 million in exploration activities on the combined TNB Exploration Properties no later than December 31, 2013.
Crowflight's 100% interest in the Exploration Properties is subject to a Back-in Right whereby should Crowflight outline a Threshold Deposit or Deposits, each of which exceed 500,000,000 pounds of nickel in Measured and Indicated Resources, Xstrata Nickel has the right to Back-in for a 50% interest and become the operator of the Threshold Deposit or Deposits by incurring Expenditures on the Property in an amount equal to two times the aggregate of all Expenditures which were incurred by Crowflight in carrying out Mining Operations on the Property prior to the Back-in provided that if Xstrata Nickel exercises more than one Back-in Right, then in calculating the required Back-in Expenditures for each subsequent Back-in Right Expenditures relating to any previously exercised Back-in Right are excluded from such Expenditure calculation.
Definitive Offtake Agreement
Based on the results of a feasibility study concluded in December 2005 (refer to press release dated December 16, 2005), the Bucko Lake Nickel Deposit has the potential to produce on average approximately 35,000 tonnes of nickel in concentrates annually with annual contained equivalent of 12.5 million pounds of nickel. Crowflight has entered into a life of mine contract with Xstrata Nickel for the purchase of 100 percent of the nickel concentrate over the current approximate 6 year life of the mine, once in production. Terms of the definitive offtake agreement are a Schedule to the Bucko Lake Deposit Lease Transfer Agreement.
Crowflight -- Canada's Next Nickel Producer
Crowflight Minerals Inc. is a Canadian junior mining exploration and development company listed on the TSX Venture Exchange. The company is focused on nickel, copper and Platinum Group Mineral ("PGM") projects in the Thompson Nickel Belt ("TNB") and Sudbury Basin. The company currently owns and/or has under option approximately 600 square kilometres of exploration and development properties in Manitoba and Ontario.
In Manitoba, these properties include: (1) the Bucko Lake Nickel Deposit; (2) an earn-in option with Xstrata Nickel on five highly prospective properties (Bucko/Bowden, Resting Lake, Rock Island Lake, Halfway Lake and Gonlin Lake) on the TNB South Project located within 30 kilometres of the Bucko Deposit; (3) six additional properties (Burntwood River, Birchtree South, Birchtree North, Airport, Moak Lake and Strong Lake) located 100 kilometres to the north on the TNB North Project; and (4) a 100% interest in the Clarke Lake property comprising approximately 100 square kilometres of recently staked ground south and adjacent to the TNB South Project Area.
In the Sudbury Basin, these properties include: (1) the 100% owned AER Kidd Project adjacent to Inco's Totten Deposit (10.1 million tonnes grading 1.5% nickel, 2.0% copper and 4.8 g/t PGM's); (2) the 100% owned Peter's Roost Property, being explored under a joint venture agreement with Wallbridge Mining Co. Ltd.; and (3) the Airport Property (a 50/50 joint venture with Millstream Mines Ltd.) located 4 kilometres south, and on-strike, with Falconbridge's Nickel Rim South Deposit (13.2 million tonnes grading 1.7% nickel, 3.5% copper and 4.1 g/t PGM's).
Further information is available on the Company's web site at www.crowflight.com.
Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements. The Company cautions investors that the projections for increases to the Indicated Resources are based on Inferred Resources. There is no certainty that these projections will be added to the Indicated Resources or that they will be economically viable.
For further information please contact:
Thomas Atkins or Bruce Korhonen
President and CEO Ascenta Capital
Tel: (416) 861 - 5900 Fax: (416) 861 - 8165 Tel: (604) 684 - 4743 ext 230
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