First Point Minerals Corporation announced that Cliffs Natural Resources Exploration Canada Inc an affiliate of Cliffs Natural Resources Inc has committed to completing a preliminary economic assessment or scoping level study, on the Decar nickel iron alloy project in central British Columbia.
By agreeing to complete a National Instrument 43-101 compliant preliminary economic assessment or scoping study within 18 months, Cliffs is deemed to have earned 51% interest in the Decar property under the amended option agreement. Cliffs has increased its exploration and development budget for the Decar project to approximately USD 7 million in 2011 and is in the process of hiring an engineering consultant group to conduct the scoping study.
Mr Peter Bradshaw president of First Point said that "Under the original option agreement, if Cliffs had determined to exercise the second option to acquire an additional 9% interest in the Decar property, Cliffs would not have been required to complete a scoping study until early 2015. The amended option agreement greatly shortens that timeframe. While Cliffs now has 18 months to deliver the scoping study we are hopeful that Cliffs will have the study completed in about a year's time."
Cliffs is fast tracking the exploration and development at Decar by greatly expanding and accelerating this year's drilling campaign with the addition of a third and fourth drill rig. The objectives of the 2011 drill program are to define an inferred resource estimate of the Baptiste mineralized zone and provide data for the scoping study.
With four rigs now drilling at Decar, the primary objective of the 2011 campaign is to drill off the Baptiste zone at 200 meter centers over a targeted 2,500 by 700 meter area. The holes are oriented to intersect the long axis of the Baptiste mineralization and most will be drilled to a 300 metre downhole length at a 50 degree angle, representing a vertical depth of 230 meters.
A total of 47 holes are proposed for the Baptiste zone, where seven widely spaced holes were drilled in 2010. Fourteen of the holes have been completed to date with assay results pending. A single, deeper hole was recently completed in the central part of Baptiste to test the extent of mineralization to a depth of 600 meters downhole. Results are pending.
Drilling at Decar may also test three distinct outlying targets Sidney, Van and Target B. Four holes are planned for Sidney where two drill holes completed last year intersected nickel in alloy mineralization to a downhole depth of 398 meters. Last year's drilling at Sidney demonstrated nickel in alloy grades comparable to that of Baptiste. Sidney is located on a ridge top 3 kilometres north of Baptiste and at 600 meter higher elevation.
Two holes are also planned for the Van target located 6.2 kilometres north of Baptiste and one hole has already been completed into Target B situated 4.6 kilometres north northwest from Baptiste with assay results pending. This year's drill program is expected to continue until mid to late October weather permitting.
Having earned 51% interest in the Decar property under the amended option agreement, Cliffs now has the right to increase its property ownership (i) to 60% by completing a preliminary economic assessment within 18 months, (ii) to 65% by completing a prefeasibility study and (iii) ultimately to 75% by completing a bankable feasibility study. Should Cliffs earn a 75% interest in Decar, First Point would hold the remaining 25% participating interest plus a 1% net smelter return royalty interest.
First Point is accelerating its investor relations program and has retained the services of Renmark Financial Communications Inc to assist the Company with these activities. In consideration of the services to be provided, First Point has agreed to a minimum four-month contract to pay a monthly retainer of USD 7,000 starting September 1st 2011. Renmark Financial Communications does not have any interest, directly or indirectly, in First Point or its securities or any right or intent to acquire such an interest.
