Pancontinental acquires advanced nickel-cobalt-copper project in southern ontario electricity outage compensation


Pancontinental Gold Corporation announced that has entered into an option agreement effective April 25, 2018 with Hastings Highlands Resources Limited to earn up to 76% of the McBride Nickel-Cobalt-Copper Project, located in Limerick Township, 25 kilometres south of Bancroft, Ontario. If Hastings, a private company, chooses not to fund its share of the joint venture after 76% is earned, Pancon can fully fund the joint venture and increase its ownership to 90%.

The McBride Project, covering 880 hectares, contains Historical Resources of an estimated 5.1 million tons of near-surface nickel-cobalt-copper mineralization. It includes: the North Zone deposit, the South Zone deposit, and the South Extension prospect [Reno Pressacco, Micon International Limited, 2004, NI 43-101 Technical Report]. The Project was discovered in the 1960s and diamond drill tested with more than 90 holes by Macassa Gold Mines Limited and Long Lac Minerals Limited, which later acquired control of Macassa. In 1971, Long Lac produced the following Historical Resource estimate.

The foregoing Historical Resource estimates presented above were completed prior to the implementation of the NI 43-101 requirements; however, given the high quality of the historic work completed and the respective mining companies’ reputations and production history of the previous Project owners, Pancon believes the Historical Resource estimates to be both relevant and reliable. In addition, a Qualified Person has not completed sufficient work to classify these historic mineral resources as current mineral resources; and the Company is not treating the Historic Resources as current.

Mr Layton Croft President and CEO, Pancon stated that "Adding this advanced stage nickel-cobalt-copper Project to Pancon’s growing battery metals portfolio is a game changer. Given today’s prices and market outlooks for nickel, cobalt and copper compared to 1971 when Long Lac planned to mine these deposits, we believe there is exceptional exploration and development potential. Its prime location and excellent infrastructure will keep costs and project risk down. The Project development plan is to re-sample existing core, conduct infill and exploration drilling, verify and possibly increase known resources, and produce an updated NI 43-101-compliant Technical Report. Following that will be state-of-the-art airborne versatile time domain electromagnetic surveys and airborne gravity surveys, as well as soil geochemical surveys, in order to identify and drill new targets, followed by metallurgical testing on fresh drill core and the completion of a Preliminary Economic Assessment."

Pancon has the exclusive right to acquire up to a 76% interest in the McBride Project through three option stages. The first option, for an initial 26% interest, requires the Company: to pay USD 142,500 in cash plus applicable 2017 property taxes; to issue 500,000 Common Shares of the Company to Hastings; and to spend a minimum of USD 1.5 million on the Project within the first year of the option period. The second option, for an additional 25% interest and a total of 51% ownership, requires the Company: to make annual payments of USD 142,500 in cash plus applicable property taxes; and to spend at least USD 3 million on work essential to producing a Scoping Study, during the next four years. The third option, for an additional 25% interest and a total 76% ownership, requires the Company to: to make annual payments of USD 142,500 in cash plus applicable property taxes until the property is in production; and to complete a Feasibility Study by the end of the sixth year of the option period.

Once Pancon earns 76%, Pancon and Hastings will form a joint venture. If Hastings chooses not to fund its share of the joint venture, Pancon can fully fund the joint venture and increase its earned share to 90%, with Hastings retaining a 10% free-carried interest. When the Project becomes a producing mine, Pancon and Hastings will assume responsibility for paying the 16 mineral rights holders their respective share of 1.75% net smelter returns royalty payments. If Pancon’s ownership increases to 90%, Pancon will assume full responsibility for the NSR payments, noting that the 1.75% NSR can be reduced by 0.75%, to a 1% NSR, for a payment of USD 1 million.

Pancon and Hastings have formed a 4-person Project Management Committee, with two representatives from each company. Pancon has appointed Layton Croft, its President, CEO and Director, and David Mosher, the Company’s founding Director and member of its Technical Advisory Committee. Hastings has appointed its Chairman, Derek McBride, and its President, Angus Ross. The Management Committee will prepare and approve work programs and budgets, review quarterly progress reports, and monitor results during the option period. Decisions of the Management Committee will be made by majority vote, with Pancon having the casting vote.