TORONTO (miningweekly.com) – Exploration company Northern Shield Resources on Tuesday said it has signed a binding letter agreement with private firm Greenland Gold Resources for the option to earn a 50% interest in the Ikertoq nickel project, in west Greenland, subject to certain conditions.

To earn half of the interest, Northern Shield would be required to incur €1-million within a year of signing the definitive option and joint venture (JV) agreement and a further €1.75-million of exploration expenditures on the project within three years.

The first year's exploration must include a minimum of 1 250 m of diamond drilling.

The plan was that as soon as Northern Shield had earned a 50% interest, the project would be explored by the two companies under a 50:50 JV. Northern Shield would be the operator of the project.

Northern Shield said the 120 km² Ikertoq nickel project included at least one known ultramafic intrusion where sampling by Greenland Gold in 2010 and 2011 identified high-grade nickel mineralisation on surface. Fourteen of 160 samples collected from this intrusion assayed greater than 1% nickel, with a high of 5.2% nickel.

The average grade of these fourteen mineralised samples was 2.5% nickel, 0.3% copper and 0.1% cobalt.

The TSX-V-listed company pointed out the nickel tenor (nickel content in 100% sulphide) of the same samples averaged 19%. The intrusion is exposed on surface over an area of about 2 km².

The property is strategically located 60 km from the international airport in Greenland and 8 km from a deep-water fjord.

"The geological location of this target is very significant. Greenland and Canada were once joined together and for years mining companies have been searching in Greenland for the continuation of Quebec's Raglan Nickel Belt and the structure that hosts the Voisey's Bay nickel deposit. We believe the Ikertoq property covers what could be the continuation of the prolific Raglan Nickel Belt,” said Northern Shield president and CEO Ian Bliss, who conducted mineral exploration in Greenland for eight years before founding Northern Shield.