Curtain Rises in Greenland for Exploration and Mining InvestDear North American Nickel and VMS Followers,
Our most recent news release of October 23 pointed out the exceptional high grade intercept of 9.99m of 4.65% nickel at Imiak North with elevated PGMs at Spotty Hill. We are delighted with the 2013 drill results at our 100% owned Maniitsoq property in southwest Greenland and with our Imiak Hill Conduit Complex model that continues to return excellent results as it is drill-tested.
We wanted to share with you the following announcement as this is particularly relevant to North American Nickel while we plan for future success at Maniitsoq. On October 24, London Mining announced that it had been awarded an exclusive 30 year exploitation licence for its 100% owned Isua Project in Greenland. The Isua iron ore project is located 60km east of North American Nickel’s Maniitsoq project, and 110km from a proposed deep seawater port. The warmer climate of its location in the south-west corner of Greenland enables year round shipping. The full release can be found below.
Like Isua, Maniitsoq enjoys both the warmer climate and the year-round shipping that it brings as well as proximity to a potential deep water port.
We believe the awarding of this exploitation license to London Mining is a significant step for the development of the Isua iron ore project and should be viewed as a signal to the world by the government of Greenland that investment in mining is welcome and that viable projects will be given the green light to proceed to production.
We will continue to update you with all of our most recent drill and assay results at Maniitsoq in the weeks to come and will include developments relating to investment and the opening of the Greenland mining space.
Best regards,
Mark Fedikow Ph.D
President
North American Nickel
VMS owns ~23.9% of NAN
30 Year Exploitation Licence Awarded For the Isua Project In Greenland "London Mining is pleased to announce that it has been awarded an exclusive 30 year exploitation licence for its 100% owned Isua Project in Greenland (the "Exploitation Licence").
This licence is a significant step in the process of seeking partners for the development of Isua.
Based on a 2012 bankable feasibility study, the Isua Project is expected to produce 15Mdmt/a of premium quality iron pellet feed concentrate with low impurities and is based on a one billion tonne resource which could be shipped year round from a dedicated deep water port. Detailed Environmental and Social Impact Assessments to international standards have been completed and have been subject to public consultation as part of the permitting process.
Within the Exploitation Licence, London Mining has agreed to incorporate a royalty structure ("Royalty") with the Government of Greenland. The Royalty, based on sales, is payable if combined withholding tax and corporation taxes are less than the calculated Royalty in a particular year, such that the Government receives a minimum amount. The royalty is structured with escalating rates: with the first five years at 1%, years 6-10: 3%; years 11-15: 4%, rising to 5% after year 16. The lower rate in the earlier years recognises the need to protect the payback period for initial development investment once the mine is brought into production.
The new fiscal agreement will have no material adverse impact on the net present value of the project.
Graeme Hossie, Chief Executive Officer of London Mining said: "We are very pleased today to receive the exploitation licence for the Isua iron ore project after many years of exploration and development work. Isua is an important project for Greenland and its development will help deliver key objectives for Greenland of economic growth and diversification from sustainable mining activity. The Isua project represents the potential of a significant 15mtpa supply of very high quality iron ore concentrate to the global steel industry. Although new projects in iron ore currently do face funding challenges, we believe Isua's high quality product segment will become increasingly important to steelmakers to balance the growth in lower quality iron ore supply and the increasing importance of pellets in the evolving iron ore market. While London Mining's operational and capital allocation focus remains firmly on the recently announced expansion and mine life extension at its operating mine in Sierra Leone, the granting of the 30 year exploitation licence for Isua is an important validation of the extensive work to date and provides a solid basis for discussions with potential funders and partners required to move the project forward."