First Graphite Corp TSXV:FGR announced an option with Zimtu Capital Corp TSXV: ZC and one of its prospecting partners to earn a 100% interest in the Henry Graphite Property in northeast Saskatchewan. Under the agreement, First Graphite will pay Zimtu and its prospecting partner each $38,750 on signing, $38,750 and 350,000 shares on TSXV acceptance, 150,000 shares six months after TSXV acceptance, 250,000 shares 12 months after TSXV acceptance and 250,000 shares 24 months after TSXV acceptance. The vendors will collectively retain a 2% NSR.
The Henry Property consists of six mineral claims covering approximately 22,853 hectares and is situated within metamorphic rocks of a sedimentary origin, which is an ideal setting for the development of scarce, large-flake, high-purity graphite deposits. During base metal exploration in 1974 by Hudson Bay Exploration and Development, drilling intersected graphitic gneisses in several holes despite efforts to avoid graphite. Graphite is described in the historic, non-43-101 drill logs over intervals of up to 30 metres. The property is 20 kilometres from the Deep Bay Graphite Project, which hosts an historic non-43-101 resource of 1.8 million tons grading 10.32% carbon to a depth of 60 metres. Highways 102 and 905 run through the Henry Property.
We’re very confident that we’re going to be able to bring at least a discovery to the market here, and our goal will be to advance that to a resource estimate as quickly as possible—Andrew Mugridge
First Graphite also announced a non-brokered private placement of up to 3.5 million units at $0.40 per unit for proceeds of up to $1.4 million. Each unit will consist of one common share and one-half non-transferable warrant. Each full warrant will allow the purchase of one additional share at $0.50, exercisable for 18 months after closing. Proceeds will be used for payments under the option agreement, exploration of the property and general corporate purposes.
First Graphite also announced the appointment of Vince Sorace as President/CEO/Director. Kyle Stevenson resigned as interim CEO and will remain a director. Andrew Mugridge resigned as President and will remain VP of Corporate Development. Brian Morrison resigned as a director.
VP of Corporate Development Andrew Mugridge tells ResourceClips.com, “What really drew us to the Henry Project was the close-ology to the Deep Bay Graphite Project, a privately held mine [currently in development], and also Deep Bay East, which I believe is Strike Graphite’s TSXV:SRK flagship project. Henry had work done on it in the 1950s, 1970s and 1980s. There were 20 holes drilled on it historically. At the time, they were looking for base metals, and the 20 holes were picked to actually avoid graphite at all costs. But they found 30 metres of obvious graphite content. At that point they decided to cease work on the area.
“We considered the project from every aspect,” he says. “Infrastructure—we’ve got two major highways and a railroad that are either running through our project or within 10 kilometres. We’re approximately 120 kilometres north of La Ronge. We’re within eight kilometres of the western border of the Deep Bay Mine, approximately 20 kilometres from the Deep Bay East Project.
“We also announced a $1.4-million financing in conjunction with the Henry acquisition,” Mugridge adds. “Our Phase I plan, which we’re hopefully beginning in 30 to 60 days, will include a VTEM survey that will fly the entire project to update the airborne mag that was done back in the 1950s and again in the 1970s. That will be simultaneous with, or closely followed with, getting a team on the ground, doing a metallurgical program, obviously ground sampling and mapping, which hopefully will provide us with a significant number of drill targets. We’d do an exploratory drill program in Phase II, which we’re hoping to start in the middle of 3Q 2012. That would be up to a 3,000-metre program.
“We’re very confident that we are going to have drill targets,” he emphasizes. “Everybody that we’ve spoken to on our geological advisory team has been suggesting that we’re in a very similar geological environment to both the Deep Bay projects. Deep Bay West has [a non-43-101 estimate] showing 1.8 million tons of 10.32% carbon with [test results showing] greater than 95% carbon content in all their flake sizes. So we’re very confident that we’re going to be able to bring at least a discovery to the market here, and our goal will be to advance that to a resource estimate as quickly as possible.”
First Graphite Corp
VP of Corporate Development
Zimtu Capital Corp
by Greg Klein
Disclaimer: First Graphite Corp and Zimtu Capital Corp are clients of OnPage Media and the principals of OnPage Media may hold shares in those companies.