ALX Resources (TSXV: AL) has entered into an option agreement with Rio Tinto (NYSE: RIO; LSE: RIO) on its Falcon nickel project in northern Saskatchewan.
Under the deal, Rio Tinto may acquire up to an 80% interest in the project by spending $12 million on exploration over six years and by making cash payments to ALX totalling $125,000.
Due to a naming conflict with another Rio Tinto mineral exploration project located in the province of Saskatchewan, the companies changed the name of the Falcon Nickel project to the Firebird nickel project.
Helicopter-supported diamond drilling and ground geophysical programs were completed by ALX at Firebird in March.
Magmatic nickel-copper-cobalt mineralization was intersected in two of three holes drilled, with the best result being 24 metres grading 0.36% nickel in hole 20-002, including 11 metres of 0.55% nickel and 2 metres of 0.90% nickel (true widths unknown).
Rio Tinto is planning an airborne electromagnetic survey over the northern part of Firebird to meet its initial expenditure commitment. The airborne survey will cover 80 sq. km of the project that have never been surveyed with modern airborne methods.
At press time in Toronto, ALX's shares were trading at 7 ? within a 52-week trading range of 2 ? and 11 ?. The company has 121 million common shares outstanding for an $8.5-million market capitalization.
- This article first appeared in MINING.com.