THE COMPANY REPORTS
United Reef grants JV option to Ursa Major
2008-05-13 09:22 ET - News Release
Also News Release (C-UMJ) Ursa Major Minerals Inc
Mr. Michael Coulter of United Reef reports
UNITED REEF SIGNS FORMAL AGREEMENT FOR NICKEL OFFSETS OPTION WITH URSA MAJOR MINERALS
United Reef Ltd. has entered into a formal option and joint venture agreement with Ursa Major Minerals Inc., whereby United Reef has granted Ursa Major an option to earn a 70-per-cent interest in United Reef's wholly owned Nickel Offsets property, located on the Foy offset of the Sudbury basin. The transaction follows the letter of intent entered into in March with Ursa Major (see news issued in Stockwatch dated March 6, 2008).
United Reef has granted Ursa Major an option to earn a 70-per-cent interest in the Nickel Offsets property, whereby Ursa Major will make exploration expenditures on the property totalling $1.25-million over a period of three years commencing March 28, 2008, the effective date of the agreement, and make total cash payments of $75,000 to United Reef. Ursa Major will be required to make a minimum expenditure of $250,000 during the first year of the option. The rate of expenditures during the second and third years of the option will be at the election of Ursa Major with the right to accelerate their expenditures during the option period.
Ursa Major has advised United Reef that they are finalizing plans for an initial exploration program on the property this summer. The program is expected to consist of bore hole electromagnetic testing and follow-up drilling in selected areas, particularly down plunge from previously mined ore shoots.
Upon Ursa Major incurring $1.25-million in exploration expenditures and making payments totalling $75,000, the parties will form a joint venture for the further exploration and development of the property with Ursa Major having a 70-per-cent interest and becoming the operator, and United Reef having a 30-per-cent interest. Thereafter the parties will finance their respective pro rata interest in the joint venture for approved programs and expenditures. Once a joint venture is formed, United Reef may elect to finance its 30-per-cent interest in the joint venture or convert its interest to a 2-per-cent net smelter royalty and allow Ursa Major to vest a 100-per-cent interest in the property. Should United Reef elect to convert its interest to a net smelter royalty, Ursa Major has the right thereafter to purchase 1 per cent of the royalty from United Reef for consideration of $1-million at any time. In the event that Ursa Major fails to make the cash payments and incur $1.25-million of expenditures on or before the third anniversary of the agreement, its option will terminate and the property will revert to United Reef.
Nickel Offsets property
The Nickel Offsets property is located approximately 40 kilometres northwest of Sudbury, and consists of 12 contiguous patented mining claims and five unpatented mining claims covering 884 acres in Foy township, Ontario. The property straddles a 2.25-kilometre strike length of the Foy offset dike, the largest known radial offset dike emanating from the Sudbury igneous complex. The property hosts the only portion of the Foy offset dike that has had commercial ore production from the past-producing Nickel Offsets (Ross) mine, which produced 208,551 tons of nickel and copper ore between 1943 and 1957, with reported recoveries of 4.56 million pounds of nickel and 3.32 million pounds of copper. Sulphide mineralization in the Foy offset dike occurs as pods, lenses and veins of massive and semi-massive sulphide minerals, mainly pyrrhotite, pentlandite and chalcopyrite in localized areas.
We seek Safe Harbor.