21:10:43 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Amarc Resources Ltd
Symbol AHR
Shares Issued 141,424,061
Close 2015-09-02 C$ 0.085
Market Cap C$ 12,021,045
Recent Sedar Documents

Amarc Resources options IKE to Thompson Creek

2015-09-03 08:40 ET - News Release

Mr. Robert Dickinson reports

AMARC AND THOMPSON CREEK PARTNER TO ADVANCE THE IKE COPPER PORPHYRY PROJECT

Amarc Resources Ltd. has entered into an agreement with Thompson Creek Metals Company Inc. pursuant to which Thompson Creek may acquire, through a staged investment process within the next five years, a 30-per-cent ownership interest in the IKE copper-molybdenum-silver porphyry deposit and the surrounding district, which hosts a number of prospective copper and/or molybdenum and/or gold deposit targets yet to be drilled (the IKE project or the project). Amarc management believes the IKE district has the potential to become an important mining camp. Under the terms of the agreement, Thompson Creek has an option, after acquiring its 30-per-cent interest, to acquire an additional 20-per-cent interest in the IKE project, subject to certain conditions, including the completion of a feasibility study.

Ron Thiessen, chief executive officer of Amarc: "We are pleased to welcome Thompson Creek, a company with a solid reputation in British Columbia and throughout North America as a stable, experienced and responsible mine operator and metals producer, to a project we believe will emerge as one of this country's most important new mineral developments. Amarc and Thompson Creek hold a common view of the potential of the IKE property, and a shared commitment to efficiently advance it in a manner that balances technical, environmental and social considerations."

Robert Dickinson, chairman of Amarc: "HDI companies have a long history of discovering and developing copper porphyry deposits in B.C. that have gone on to generate decades of wealth and opportunity for British Columbians. Thompson Creek's Mount Milligan mine northwest of Prince George, for example, is a copper-gold porphyry that our group drilled and discovered years ago. We're delighted that today, under Thompson Creek's committed leadership, it is generating high-value jobs and economic benefits for British Columbians, and we are excited to be joining forces with Thompson Creek at IKE, a property we believe has the potential to become a company maker in the years ahead."

Jacques Perron, president and chief executive officer of Thompson Creek: "We see the potential in the IKE project and are pleased to have the opportunity to team with Amarc to advance the project's development in the longer term. We believe this project has the potential to become highly significant and is an excellent opportunity for Thompson Creek to increase its presence in B.C., and to potentially develop another large-scale copper operation. We believe that the phased structure of the earn-in and the flexibility with which Thompson Creek may contribute capital to the project will allow us to participate in an exciting project in a measured and thoughtful way as we navigate the current metals market, as well as invest in future strategic growth. Through Amarc we look forward to working with the HDI team, which has an excellent track record of discovering and developing projects in B.C."

The agreement

Under the terms of the agreement, Thompson Creek can earn an initial 30-per-cent interest in the project under a stage 1 option by financing $15-million of expenditures on the property before Dec. 31, 2019, of which $3-million is committed for 2015. For each $5-million of project expenditures financed, Thompson Creek will incrementally earn a 10-per-cent ownership interest. Stage 1 option expenditures can be accelerated by Thompson Creek at its discretion. Amarc will remain as operator during the stage 1 earn-in period.

In the event that its stage 1 option is fully exercised, Thompson Creek will have a one-time right under a stage 2 option to elect to earn an additional 20-per-cent ownership interest in the project (for a total 50-per-cent ownership interest). To fulfill its obligations under the stage 2 option, Thompson Creek must commit within 120 days after exercising its stage 1 option in full, to finance and complete a feasibility study for the IKE project that could serve as the basis for a final decision by a financial institution to finance development of a mining project. This feasibility study must be completed within a two-year period, which can be extended to three years under certain circumstances. In addition, under the terms of the stage 2 option, Thompson Creek is required to meet all other expenditures necessary to maintain and advance the project. Operatorship will pass to Thompson Creek upon initiation of the stage 2 option period.

The agreement contemplates that the parties will form a joint venture to develop the IKE project once the earn-in period is completed, provided that Thompson Creek earns a minimum 10-per-cent interest. Amarc will remain operator of the project in the instance that Thompson Creek does not earn a 50-per-cent interest. Thompson Creek will continue as operator until it ceases sole financing after its acquisition of the initial 30-per-cent interest, and in the event that it earns a 50-per-cent interest following the stage 2 option period.

During both the stage 1 and stage 2 option periods, Amarc will retain a co-expenditure right whereby it can solely finance additional expenditures on the project. Thompson Creek may elect to pay its share of these additional expenditures upon completion of its stage 1 option and stage 2 option periods, failing which its ownership interest will be reduced. The maximum amount that Amarc can recover from Thompson Creek on completion of the stage 1 option period is capped at $6-million. The maximum amount that Amarc can recover from Thompson Creek on completion of the stage 2 option period is capped at $10-million.

The agreement is subject to a number of conditions precedent, including Amarc's receipt of all necessary third party and government consents and approvals. If the conditions are not satisfied by Amarc on or before Oct. 25, 2015, committed expenditures in the amount of $3-million must be repaid to Thompson Creek together with interest thereon at a rate of prime plus 5 per cent within two years from the date of the agreement.

The IKE project

Amarc has made a significant copper-molybdenum-silver porphyry discovery at its IKE project, located in south-central British Columbia in the heartland of the province's producing porphyry copper mines (see Amarc news release Nov. 24, 2014). Together with the surrounding district of additional prospective copper and/or molybdenum and/or gold porphyry targets yet to be drilled, Amarc management believes the IKE project has the potential to possess the grades and resource capabilities to develop into an important mining camp.

Amarc currently holds a permit issued by the B.C. government for a 50-hole drill program at IKE. Crews are to be mobilized to the field for the 2015 exploration season in the near term. Drill activities will focus on the IKE porphyry system to determine the known deposit's full resource potential as defined by Amarc's 2014 drill results and postdrilling geological, geochemical and geophysical surveys.

Like many major porphyry deposits, IKE formed in a very active, multistage hydrothermal system that was extensive and robust. The footprint of the hydrothermal system at IKE is over six square kilometres. The nine discovery holes (5,400 metres) drilled by Amarc in 2014 intersected long intervals of continuous chalcopyrite and molybdenite mineralization from surface and over a broad area, measuring 1,200 metres east-west by 600 metres north-south and to depths of approximately 500 metres. Mineralization at IKE remains open in all lateral directions and to depth.

At IKE, chalcopyrite and molybdenite mineralization appears to have been precipitated during at least three stages of hydrothermal activity. The mineralization occurs as fine to relatively coarse, mostly discrete grains, mainly as disseminations, and less commonly in fractures and veins. Multielement analyses returned consistently and unusually low concentrations of metallurgically or environmentally deleterious elements. These characteristics, and the generally low concentrations of pyrite at IKE, suggest excellent potential to produce clean, good-grade copper and molybdenum concentrates by standard flotation processing.

Amarc is committed to working collaboratively with governments and stakeholders to achieve the responsible development of its projects, while contributing to the sustainable development of the communities in which it works. Work programs are carefully planned to achieve high levels of environmental and social performance, including providing opportunities for employment, contracting and training for local people if desired. The company also continues to build positive relationships with regulators, supporting government's consultation duties to assist with timely and fair regulatory decision-making.

Mark Rebagliati, PEng, a qualified person as defined under National Instrument 43-101, has reviewed and approved the technical content of this release.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.