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RNC hits bonanza grades at Beta Hunt mine, gets call option on rest of SLM shares

4th April 2016

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – TSX-listed Royal Nickel Corporation (RNC) on Monday announced that it was evaluating options to process “bonanza grade” ores from the 'Hand of Faith’ (HOF) area of the Beta Hunt mine, a low-cost nickel and gold producer located in the prolific Kambalda mining district of Australia.

The company was mulling options, including processing, under its current gold toll milling agreement or, alternatively, was considering using a dedicated gravity plant to scalp off the higher-grade portion of the gold. The remaining material would be processed under its current gold toll milling arrangement.

RNC said it had mined about 100 t of high-grade visible coarse gold in a development drive at the Beta Hunt mine. The area was first delineated by a historical intersection in drill hole BE20-44 grading 455.9 g/t gold over 0.8 m, including 1 000 g/t gold over 0.3 m. Face sampling in the HOF drive had confirmed this intersection at a mining scale yielding 84 g/t gold over 3.3 m, including 390 g/t gold over 0.7 m.

"RNC acquired Beta Hunt with a focus on the remarkable gold exploration potential of a mine situated in one of the great gold camps – a potential that had been largely ignored because Beta Hunt operated primarily as a nickel mine for many decades. There is significant potential for multiple HOF-type areas," stated RNC president and CEO Mark Selby.

The compilation of historical drilling had highlighted multiple bonanza-grade intersections containing more than 311 g/t gold at multiple locations on the mine property, which underscored the potential for multiple HOF-style zones. These areas also carried high-grade ore over thicknesses in excess of the minimum mining width defined in the March 4 Beta Hunt mine preliminary economic assessment.

RNC advised that development had been completed at Beta Hunt to allow for ongoing mining from the HOF area.

The next development target required a final 20 m of development towards drill hole BE19-292, which had previously intersected 4.62 m grading 376.1 g/t gold, including 0.07 m of 23 760 g/t or 2.3% gold, which were even higher grades than the BE20-44 intersection from the HOF area. While there was no certainty that other areas would replicate the high-grade gold mineralisation found at the HOF area, RNC said it was “highly encouraged by its potential”.

CALL OPTION
Meanwhile, RNC, which currently owned 66% of Salt Lake Mining (SLM), which owned 100% of Beta Hunt, had also signed a shareholders agreement with shareholders who held the remaining 34% of SLM, giving RNC the right to acquire their SLM shares over the next six months, starting April 1.

RNC said it would seek shareholder approval for a related share issuance at an annual and special meeting expected to be held in May. Assuming the call option was exercised during the month of May, the applicable share exchange ratio would be 1.8775 RNC shares for each remaining SLM share, or a total of 24.32-million RNC shares issuable in exchange for the remaining 34% of SLM.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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