Stockwatch news - Big InvestmentAREAS TO INCREASE EQUITY IN MUSTANG MINERALS
Western Areas NL will increase its equity in Canadian nickel company Mustang Minerals Corp. to 19.9 per cent, subject to completion of a $6.5-million financing by Mustang in Canada. Western Areas' participation in the current financing is expected to result in a placement of 17.6 million Mustang shares to Western Areas at 10 cents per share for a total $1.76-million. This should result in Western Areas holding approximately 30.76 million shares in Mustang. Western Areas currently holds 13.14 million shares in Mustang.
The majority of funds planned to be raised by Mustang is intended to be used to complete the Makwa open-pit nickel/copper/PGM mine feasibility study and purchase a one-million-tonne-per-year base metals concentrate plant in Canada. The purchase of the plant and its relocation to the mine site should result in a significant saving in capital expenditure and time to bring Makwa into production. The feasibility study for the planned open-pit mine at Makwa is already in progress and is targeted for completion in the September quarter of 2011.
Western Areas will provide Mustang with technical support to help bring the Makwa project into production. This follows a technical review of the project by Western Areas staff and consultants in September, 2010. Western Areas director of operations Daniel Lougher will join Western Areas managing director Julian Hanna on the Mustang board. Mining consultant Tim Peters has been appointed project manager for the Makwa project.
Western Areas considers Makwa has excellent potential to become a low-cost and profitable mining operation with exploration and production upside. In addition to the Makwa and nearby Mayville nickel/copper/PGM (platinum group metals) deposits, Mustang controls a high-quality exploration portfolio in Manitoba and Ontario. Western Areas already has a joint venture with Mustang in the East Bull Lake intrusive complex located west of Sudbury, Ont.
Managing director Mr. Hanna said: "Western Areas' increased ownership and technical support of Mustang flags our intention to increase Western Areas' activities in Canada through participation in mining and exploration projects. We are also planning to step up drilling activity at the East Bull Lake joint venture in 2011 to test a number of areas with known nickel, copper and PGM mineralization associated with electromagnetic conductors."
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