TORONTO, ONTARIO--(Marketwire - Jan. 31, 2008) - Victory Nickel Inc. ("Victory Nickel" or the "Company") (TSX:NI) (www.victorynickel.ca) today announced that it has signed an option agreement with Xstrata Nickel, ("Xstrata"), a business unit of Xstrata Canada Corporation, to acquire a 100% interest in five mineral claims located adjacent to Victory Nickel's existing Minago property package.
Prior to the option, Victory Nickel held approximately 15,068 hectares of ground at Minago, incorporating the Nose Deposit, which is the area containing the entire current resource, and the North Limb, a zone of mineralization with a known strike length of 1.5 kilometres located to the north of the Nose Deposit. The option agreement with Xstrata adds five mineral claims ("the Properties") totalling 691 hectares covering the extension of the North Limb to the north.
Past drilling by previous operators on the Properties optioned from Xstrata returned significant nickel mineralization. On Claim BRY 21, significant intercepts include:
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Drill Hole From (m) To (m) Width (m) Ni% Cu%
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MN95-89 129.7 130.7 1.0 0.87 0.12
MN95-89 135.7 136.8 1.1 0.96 0.37
MN96-128 122.4 126.0 3.6 1.88 0.12
MN96-128 123.49 124.56 1.07 3.59 0.11
MN96-141 97.86 118.0 20.14 0.61 0.01
MN96-142 122.85 128.0 5.15 1.44 0.14
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Significant results on Claim JAA5 include:
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Drill Hole From (m) To (m) Width (m) Ni% Cu%
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MXB-71-86 175.96 176.33 0.37 0.84 0.22
MXB-71-86 188.67 192.94 4.27 1.2 0.06
MXB-71-86 188.67 201.01 12.34 0.86 0.05
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All intervals reported in this news release are core
lengths, not true widths. Paul Jones, VP Exploration,
acts as Victory Nickel's Qualified Person under National
Instrument 43-101 and has reviewed the contents of this
press release. Drill holes designated as MN were drilled
in 1995 and 1996 by Falconbridge Limited.,
the predecessor to Xstrata Nickel; holes designated as
MXB were drilled in 1971 by Amax Exploration, Inc.
"Victory Nickel currently has three drills turning at Minago to test for additional higher grade mineralization at depth in the Nose Deposit as well as to explore the North Limb," said Brian Robertson, President. "The addition of these claims adds highly prospective exploration ground which we intend to test with this drill campaign and protects our current land position. Furthermore it offers us more flexibility in planning and development of the Minago mine which is now underway as part of the definitive feasibility study on the open pit portion of the deposit."
Under terms of the agreement, Victory Nickel will acquire a 100% interest in the Properties through:
- A one-time cash payment of $150,000 upon signing; and,
- Incurring $500,000 of expenditures before September 30, 2008.
Once acquired, Victory Nickel's 100% interest in the Properties will be subject to a net smelter return ("NSR") royalty interest retained by Xstrata, as follows:
- In respect of nickel:
-- A 2% NSR royalty when the LME three-month nickel price is equal to or greater than US$13,227.24 per tonne in that quarter; and,
-- A 1% NSR royalty when the LME three-month nickel price is less than US$13,227.74 per tonne in that