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Mich Resources firms up Chrome-Puddy, Danby option

2023-02-01 01:30 ET - News Release

Mr. David Suda reports


Further to the news release dated Nov. 14, 2022, Mich Resources Ltd. has entered into a definitive agreement with Pavey Ark Minerals Inc. in connection with the acquisition of an option to purchase a 100-per-cent interest in Pavey's Chrome-Puddy property and Danby Triangle property. See the company's news release dated Nov. 14, 2022, for further details on the property. It is anticipated that the acquisition will close in the second quarter of 2023.

Terms of the acquisition

As consideration for a 100-per-cent interest in the property, the definitive agreement contemplates the following cash payments, share issuances and agreed-upon terms to be honoured by the company:

  1. A one-time cash payment to Pavey of $200,000 on signature of the definitive agreement;
  2. The issuance of five million Mich Resources shares to Pavey on closing;
  3. A 1.5-per-cent NSR (net smelter royalty) afforded to Pavey on closing;
  4. $150,000 to Pavey on each of the second, third and fourth anniversaries of closing;
  5. Share issuances valued at $250,000 on each of the second, third and fourth anniversaries of closing;
  6. Work program financing to advance the project as follows:
    1. Year one of $550,000 minimum;
    2. Years two and three of $700,000 per year minimum.

Completion of the acquisition remains subject to several conditions, including receipt of Canadian Securities Exchange approval, which has indicated the acquisition could constitute a fundamental change of the company as the company does not currently have any assets aside from cash, shareholder approval and the completion of a minimum $1-million in financing.

Chrome-Puddy property summary

As stated in the company's press release dated Nov. 14, 2022, Chrome-Puddy is located in the Thunder Bay mining division of Ontario, Canada, approximately 85 kilometres north of the Lac des Iles palladium mine, measures 1,450 hectares in size and covers over 90 per cent of the 6.5-kilometre strike length of the Chrome Puddy ultramafic intrusion within the region.

The property is composed of historically identified nickel (Ni), copper (Cu), cobalt (Co) and platinum group metal (PGM) sulphide targets that can be rapidly advanced to drill stage with drill permits pending. The property also has a bulk tonnage historical resource (non CIM (Canadian Institute of Mining, Metallurgy and Petroleum) compliant) with nickel-cobalt-iron oxide mineralization, and encompasses the past-producing high-grade Chrome Lake mine, the only chromium producer in Ontario to date.

Historical exploration highlights:

  • Grab samples analyzed by the Thunder Bay resident geologist office report values including 5.02 per cent copper, 2.1 per cent nickel, 0.42 gram per tonne gold, 1.5 g/t platinum and 3.75 g/t palladium (OGS open file report 6285);
  • Grab sample assays of serpentinite with magnetite veins by Pavey included 1.39 per cent Ni, 0.45 g/t Pt plus Pd and 0.65 g/t Au (Sutcliffe, 2014);
  • Multiple untested airborne Dighem, ground MaxMinEM and very low frequency/electromagnetic conductors remaining;
  • Nickel-rich magnetite zone with historical drill intersections included 48 m assaying 0.36 per cent Ni, 0.17 per cent Cu, 9.1 per cent recoverable iron (Fe) (Commerce Nickel Mines Ltd. annual report 1966);
  • Historical Puddy Lake resource of 30 million tons grading 0.27 per cent Ni, 7.2 per cent recoverable Fe and 0.02 Co to a depth of 400 feet (Commerce Nickel Mines annual report 1966).

A qualified person has not yet reviewed the Puddy Lake historical data, nor has there been sufficient work conducted to classify this historical estimate as a current mineral resource. The company is treating this estimate as a historical resource, and the reader is cautioned not to treat it, or any part of it, as a current mineral resource. There is insufficient information available to properly assess the data quality and estimation standards by which the estimates were categorized. The mineral resource estimate was calculated prior to the implementation of the standards set forth in National Instrument 43-101, Canadian Institute of Mining (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May, 2014), and CIM Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines (November, 2019). The historical resource summarized above has been included simply to demonstrate the mineral potential of the property. A thorough review of all historical data performed by a qualified person, along with additional exploration work to confirm results, would be required to produce a current mineral resource estimate for the Puddy Lake prospect.

Chrome-Puddy currently has an approved Ontario junior exploration program (OJEP) grant in the amount of $63,800 for 2022 exploration activities.

Following a successful closing of the proposed acquisition, the company anticipates moving the property forward through systematic exploration with the goal of defining a bulk-tonnage mineralized body.

Additional Pavey property

Also included in the terms of the definitive agreement is the transfer of a 100-per-cent interest in Pavey's Danby Triangle property. Danby is a 1,504-hectare magmatic sulphide Ni-Cu-PGM target located within the Thunder Bay mining district approximately 122 kilometres north of the city of Thunder Bay and within 40 kilometres of the Lac des Iles palladium mine. The additional property is composed of seven contiguous staked claims, covering a total of 94 claim units.

Rob L'Heureux, MSc, PGeol, of Apex Geoscience Ltd., has reviewed the news release, and assumes responsibility for scientific and technical disclosure contained herein.

In connection with the executing of the definitive agreement, trading in the shares of the company has been halted, and will remain halted until closing of the acquisition and the resulting issuer is approved for listing on the Canadian Securities Exchange. There is no guarantee that the acquisition will close or that the listing of the resulting issuer will be approved.

About Mich Resources Ltd.

The company's common shares are listed on the Canadian Securities Exchange (CSE) under the trading symbol MICH, and the company is reporting in British Columbia and Ontario. The company is principally engaged in the acquisition and exploration of mineral properties.

We seek Safe Harbor.

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