|
      
|
 |
 |
Projects Overview
Sudbury Properties
Broken Hammer Project
Xstrata Nickel JV
Impala Parkin JV
Lonmin Plc JV
North Range Project
Miocene Metals Investment
Duluth Metals Investment
Project Photos   |
Investment in Duluth Metals Limited - Antofagasta and Duluth Metals form a partnership to develop Nokomis On January 14, 2010 Duluth Metals announced a binding heads of agreement with Antofagasta plc (LSE: ANTO.GB) on a joint venture development of the Nokomis Project in northeast Minnesota. The joint venture provides the execution and financing capabilities required to aggressively advance this copper-nickel-PGM (platinum, palladium and gold) development project to production. The Joint Venture Terms: • Duluth will contribute the Nokomis Project and approximately 5,000 acres in the Duluth Complex for a 60% interest in the joint venture, with Antofagasta to acquire an initial 40% interest; • Antofagasta holds the option to acquire an additional 25% of Nokomis from Duluth at an exercise price calculated on a pro rata share of 1.0x Net Asset Value, which will be determined by the Bankable Feasibility Study; The Funding and Financing Commitments include: • Antofagasta will provide US $130 million in direct funding to the project for its 40% interest in the joint venture; • Following expenditure of the US $130 million, but prior to the exercise of the 25% Option, Antofagasta will disproportionately fund 65% of the joint venture expenditures and Duluth will fund 35%; • Antofagasta has also committed to provide up to US $55.7 million in additional funding to the joint venture for potential overage expenses and other purposes, and will provide financing to Duluth of up to US $30 million to finance its share; • Antofagasta will complete a private placement of Duluth shares for approximately US $11.5 million; • Total funding and financing commitments to the joint venture and Duluth are up to US $227 million; • Antofagasta has committed to arrange project financing for the large capital cost financing requirements of the project. Wallbridge Mining Increases Shareholding in Duluth Metals Limited On January 28, 2010, Wallbridge Mining announced that through the exercise of existing participation rights, it completed the purchase of 7,456,420 shares of Duluth Metals. The purchase was financed under a bridge financing and the subsequent sale of 5,172,500 of Wallbridge's existing Duluth shares to institutional investors, which generated sufficient funds to effect the purchase. As a result of these transactions, Wallbridge has increased its holdings in Duluth Metals by about 23% from 10,000,001 shares to 12,283,921 shares, representing approximately 12.9% of the issued and outstanding shares of Duluth Metals. History of Duluth Spin-out In October 2006, our strategy to deliver the value inherent in our Minnesota property to both Wallbridge and individual Wallbridge shareholders reached an important milestone when Duluth Metals Limited ("DML") began trading on the Toronto Stock Exchange (Trading Symbol "DM").The spin-out of Duluth Metals has turned our Maturi Extension Property from a nonperforming asset into the core asset of a well financed, fully functional company with a current market capitalization of about $50 million, of which Wallbridge owns 22%.At the time of the spin-out Wallbridge shareholders owned an additional 26% of DML through conversion of their Special Warrants they had received as a dividend. Late in 2005, management decided to spin-out the Company's Minnesota Property into a new company, called Duluth Metals Limited (Duluth Metals or DML), whose focus would be exploration and development of the property. As part of the spin-out transaction Wallbridge shareholders of record as at November 15, 2005 received a Special Warrant dividend of 1 Special Warrant for every four shares of Wallbridge held.These Special Warrants converted to free trading shares of DML upon completion of its IPO in October 2006.In addition, for its part in the transaction Wallbridge received 10 million shares of Duluth. As a result, upon completion of the DML's IPO in October 2006,Wallbridge owned about 22% of the then issued stock in DML with Wallbridge shareholders owning a further 11,848,466 shares representing another 26% of DML. DML is now a well financed, fully functional public company managed by a select group of dedicated professionals with extensive combined experience in copper and nickel exploration, development and mining, and business management and finance. The Nokomis Deposit Duluth Metals principal asset is the Nokomis Deposit situated within approximately 3,000 acres of the Maturi Extension Properties. Duluth Metals has recieved a new NI 43-101 compliant Resource Estimate for the Nokomis Deposit which consists of 550 million tonnes of Indicated Resources grading 0.639% copper, 0.200% nickel, 0.660 grams per tonne TPM (TPM = Pt + Pd + Au) for a copper equivalent (CuEq) grade of 1.51%, plus an additional 274 million tonnes of Inferred Resources grading 0.632% copper, 0.207% nickel, 0.685 grams per tonne TPM for a CuEq grade of 1.53%. The drilling program has expanded multiple higher grade zones within the overall deposit particularly in three areas -- known as the Eastern, Central and Western Higher Grade Areas. These three Higher Grade Areas have a cumulative total of 92 million Indicated tonnes of 1.023 g/t TPM (1.80 CuEq% at a 1% CuEq cut-off grade) and 22 million Inferred tonnes of 1.005 g/t TPM (1.81 CuEq% at a 1% CuEq cut-off grade). Cumulatively, the Eastern, Central and Western Higher Grade Areas exhibit 55% higher TPM grades in the Indicated Resource category compared to the global Indicated Resource TPM grades, and 47% higher TPM grades in the Inferred Resource category compared to the global Inferred Resource TPM grades. In addition, there are three other higher grade areas that have been identified to date in the Nokomis Deposit, known as Areas A, B and C. The combined resource for these additional areas totals 48 million tonnes of 0.802 g/t TPM (1.75% CuEq at a 1.0% CuEq cutoff grade) and an additional 12 million tonnes of 0.972 g/t TPM (1.68% CuEq at a 1.0% CuEq cutoff grade). All of these higher grade areas are important for future mine planning and initial operations in order to enhance rapid payback of capital investment. As the 40,000 tonne per day operation featured in the NI 43-101 January 2009 Preliminary Assessment utilizes 14 million tonnes of feed per year, the higher grade areas need to be studied carefully during pre-feasibility in order to enhance and optimize cash flow in the initial years of operation. On November 25, 2008 Duluth Metals announced a new NI 43-101 Preliminary Assessment "PA" prepared by Scott Wilson Roscoe Postle Associates, confirming the potential of the Nokomis Deposit to support a 40,000 tonne per day "tpd" mining operation over a 22 year mine life. This proposed operation would mine 282 million tonnes, which is less than half the resource estimate published by Scott Wilson RPA on July 18, 2008. The new PA examined the economics of developing and mining the Nokomis Deposit at a rate of 40,000 tpd over a range of metal prices as low as $1.55/lb Cu; $4.90/lb Ni; $10.00/lb Co; $795/oz Pt; $295/oz Pd; $600/oz Au (Low Metal Price Case) and established the potential viability of the operation even at these low metal prices. Highlights from the three economic scenarios in the Scott Wilson RPA report are as follows: • Pre-tax Net Present Value of $672 Million at a 10% discount rate, and a pre-tax IRR of 16.2% at the Low Metal Price Case and $1.598 Billion at a 10% discount rate, and a pre-tax IRR of 23% at the Base Case prices. • Average annual pre-tax operating cash flow over life-of-mine "LOM" for the Low Metal Price Case of $283 Million and $434 Million per year for the Base Case, and $1.014 Billion per year for the Market Price Case. • Payback on a pre-production capital expenditure of $1.332 Billion, including contingency of $174 Million, in 4 years for the Base Case, 6 years for the Low Metal Price Case, and in 2 years based on the Market Price Case. • Revenue is derived 41% from copper, 39% from nickel, 1% from cobalt, and 19% from combined platinum, palladium, and gold. • Taking into account nickel and precious metal by-product credits, as a copper producer, cash operating costs are negative ($0.72) per lb Cu Base Case, ($0.09) per lb Cu Low Price Case and ($2.36) per lb Cu Market Price Case for each pound of copper produced. Alternately, as a nickel producer, with copper and precious metals considered as a by-product, cash operating costs are negative ($3.61) per lb Ni Base Case, ($2.15) per lb Ni Low Price Case and ($11.62) per lb Ni Market Price Case for each pound of nickel produced. The Nokomis Deposit is located about 19 km (12 miles) southeast of the town of Ely, in an area which has excellent infrastructure, including power, well-developed roads, railway networks, supplyequipment centers that support local operating iron ore mines, and a skilled mine and mining-related labour force located in the region. |
 Home | Corporate | Projects | Investors | News | QwikReport | Contact | Terms of Use and Disclaimer |
|