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HudBay buys into Ottawa junior miner

The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.

The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.

Jonathon Naylor Editor HudBay Minerals plans to buy into a junior miner in a deal that will help fund exploration on two Ontario mineral prospects. The HBMS parent has entered into a subscription agreement with Northern Shield Resources to purchase 11.3 million units for a total cost of $2,486,000. Each unit consists of one common share and one half of one common share purchase warrant. The transaction is subject to customary closing conditions, including final approval of the TSX Venture Exchange. The Ottawa-based Northern Shield will use the influx of cash to, among other things, cover exploration expenses at its Wabassi and Storm properties. 'The investment by HudBay in Northern Shield is a very strong endorsement of the significant results attained to date from the Wabassi and Storm properties and the prospectivity thereof,' Ian Bliss, president and CEO of Northern Shield, said in a news release. Bliss said four of six targets identified by an airborne survey at the properties have turned out to be VMS (volcanogenic massive sulfide) occurrences. 'That's a very high success ratio and we look forward to getting back to drilling and testing the other targets,' he said. Both the Wabassi and Storm properties are in northwestern Ontario, which has become a hotbed of mineral exploration. Wabassi is being probed for reef-hosted platinum group elements and massive sulphide nickel-copper-platinum group element deposits as well as copper-zinc-silver-gold volcanogenic massive sulphides. The Storm property, which consists of six different claims, represents an extension of Northern Shield's land holdings in the Wabassi area. Upon completion of the deal, HudBay will own 9.9 per cent of the issued and outstanding common shares of Northern Shield on a non-diluted basis, and 14.2 per cent of the shares assuming full exercise of the warrants. Each whole warrant is exercisable for one common share at a price of 40 cents per common share for a period of two years after the closing of the deal. Concurrent with the closing of HudBay's subscription, Northern Shield expects to raise an additional $450,000 as part of a larger non-brokered private placement. On its website, Northern Shield describes its goal as creating 'a successful mineral exploration company through technical excellence and efficient management, where success is measured by the identification and development of high-quality mineral exploration projects, which may ultimately be optioned, sold or developed for maximum return on investment.' No stock exchange, securities commission or other regulatory authority has approved any of the above information.

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