Wits Basin Precious Minerals Inc. ("Wits Basin") and Hawk Precious Minerals Inc. ("Hawk") have entered into a farm out option agreement with MacDonald Mines Exploration Ltd. ("MacDonald") whereby MacDonald can earn a 55% interest (subject to a 2% royalty) in the McFaulds Lake Project in the James Bay Lowlands, Attawapiskat Region of northern Ontario currently held by Wits Basin and Hawk. Wits Basin holds a 70% stake and Hawk holds the remaining 30% stake of this McFaulds Lake Project option.
The McFaulds Lake Project consists of a block of five contiguous claims comprising of approximately 80 forty-acre units (3,200 acres) to the south and west of the original Spider Resources Inc. ("Spider/KWG") claim group. On February 19 and 23, 2004 and May 11, 2004, Spider/KWG (www.spiderresources.com) released the following drilling results: 13.8m of 5.5% copper including 4.63m of 10.4% copper, a second hole returned 15.0m of 4.06% copper including 3.31m of 9.98% copper and another hole included 8.0m of 6.49% copper, 3.45% zinc, 0.42 g/t gold and 15.5 g/t silver; and on November 8, 2004 they released drilling results of an 18.8m massive sulphide intersection that returned an overall grade of 8.02% copper.
This McFaulds Lake Project is contiguous to the MacDonald MacNugget Block currently being explored by MacDonald and on which airborne magnetometer and Geotem electromagnetic surveys have been completed. Early indications from the airborne geophysics have identified 4-6 priority kimberlite (diamond) targets and 6-8 priority volcanogenic massive sulphides ("VMS") base metal targets. On October 28, 2004, MacDonald (www.macdonaldmines.com) announced the discovery of an outcrop on the MacNugget Block during reconnaissance exploration, which contained elevated platinum group element concentrations.
The farm out option will require MacDonald to: (1) make cash payments of Cdn$10,000 on or before December 31, 2004, (2) issue 250,000 shares of its common stock on or before December 31, 2004 and (3) incur exploration expenditures of $225,000 which will include and be fully satisfied by conducting ground geophysics and completing one drill hole on or before December 31, 2004 and by conducting ground geophysics and completing two additional drill holes on or before May 1, 2005.
MacDonald trades on the Toronto Stock Exchange ("TSX") Venture Exchange (TSX.V:BMK). MacDonald's current exploration strategy is to seek out Noranda-type copper-zinc-silver-gold VMS targets. MacDonald will operate and manage the exploration program at McFaulds Lake.
The agreement is subject to the approval of the TSX and final ruling should be completed prior to the December 31, 2004 timelines.
About Wits Basin Precious Minerals Inc.
Wits Basin is a minerals exploration company currently holding interests in both gold and base metal exploration projects. In addition to the FSC Project, which is located in South Africa adjacent to the major goldfields discovered at the Witwatersrand Basin, Wits has exploration interests in the Holdsworth gold property near Wawa, the VMS base metals project in area of McFaulds Lake (both properties located in Ontario, Canada) and has entered into a letter of intent on the Bates-Hunter Gold Mine in Central City, Colorado. The Company does not claim to have any mineral reserves or resources on its properties.
Wits Basin's common stock trades on the Over-the-Counter Bulletin Board under the symbol "WITM." Wits Basin is headquartered in Minneapolis, MN with an office in Toronto, ON.
Forward-Looking Statements and Risk Factors
Certain statements contained in this press release that are forward-looking in nature are based on the current beliefs and assumptions of our management. When used in this press release, the words "may," "could," "should," "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," and similar expressions and their variants may be used to identify forward-looking statements. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes.
The exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves and mineral resources in connection with any of our projects and any estimates relating to possible reserves are subject to significant risks. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, assuming recoverable, may differ from the reserves and mineral resources already discovered and recovered by others in the same region of the planned areas of exploration.
The cost of exploration and exploitation can be extensive and there is no assurance that we will have the resources necessary or the financing available to pursue projects we currently hold interests in or to acquire interests in other mineral exploration projects that may become available. The risks are numerous and detailed information regarding these risks may be found in filings made by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and reports on Form 8-K.