Highland Copper Co. has acquired Kennecott Exploration Co. and Rio Tinto Nickel Co.’s (RTX) mineral properties covering approximately 447,842 acres in Michigan’s Upper Peninsula in the U.S. The UPX Properties were acquired by Highland’s wholly owned subsidiary, UPX Minerals Inc., on May 30. The consideration for the acquisition is $18 million. RTX has retained a 2% net smelter return royalty (the NSR) on all mineral interests. Highland has an option to buy-down half of the 2% NSR by paying $8 million to RTX.
In addition to the UPX Properties, the acquisition includes all financial, geological, geophysical, geochemical, environmental and other technical information related to the properties, including maps, geophysical and geochemical surveys, drill core, and other technical and operational information generated by RTX.
The acquisition of the UPX Properties establishes Highland as a dominant mining exploration and development company in the Upper Peninsula of Michigan and offers the opportunity to build a pipeline of projects that could be developed in the future. Since 2003, the UPX Properties have been subject to more than 69,500 line-miles of detailed airborne geophysical surveys as well as 147 diamond drill holes. Almost all of the RTX exploration effort was focused on Ni-Cu targets, and the program ultimately led to the discovery of the Eagle mine.
The land package covers the extension into Michigan of the Wawa-Abitibi geological Subprovince, which is part of the Superior Province of the Canadian Shield. The Superior Province is a geologically distinct Archean (>2.5 billion years old) province that stretches from Quebec through Ontario and into Minnesota and Michigan in the U.S., and is well-known for its mineral endowment.
Previous exploration work has identified the potential for several mineral deposit types on the UPX Properties, including nickel-copper massive sulphides in Mesoproterozoic rocks, orogenic gold in Archean greenstone belts and zinc-copper in Paleoproterozoic sediments. The Archean and Proterozoic rock assemblages are separated by the Great Lakes Tectonic zone, a large crustal boundary in the Marquette area that is 2.4 km wide.
Exploration work planned for the next 12 months includes compilation of all available data to better understand the potential of the various properties. The work program will also include field mapping and soil surveys along with ground geophysics. A reinterpretation of available geophysical data will also be carried out with emphasis on the understanding of the various geological environments. Budgeted expenditures for this exploration phase are approximately $1.5 million. Some targets may be ready for drill testing in 2018.
“Although the company’s focus remains the Copperwood project, we believe that our new exploration package is highly prospective given that, for many of the targeted commodities, the region has been under-explored,” said Denis Miville-Deschênes, president and CEO of Highland. “The acquired properties also represent a significant project pipeline for the future.”