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ALX Resources Corp. options Electra Nickel Project near Thunder Bay

Nov 23, 2020

ALX Resources Corp. has executed a binding letter agreement for an option to purchase a 100% interest in the Electra Nickel Project  located in Shebandowan Greenstone Belt within the Thunder Bay South Mining District. Electra, formerly known as the Bateman Lake property, is prospective for nickel, copper and cobalt ("Ni-Cu-Co"), platinum group elements ("PGEs") and gold mineralization. 

Highlights of the Electra Nickel Project

  • Electra is located approximately 35 kilometres northwest of Thunder Bay, Ontario, Canada in a fertile exploration district well-linked to highways, roads and trails, and lies near a powerline and the Canadian National Railroad. 
  • The past-producing Shebandowan Mine, operated by Inco Ltd. from 1972 until 1998, is located approximately 35 kilometres to the northwest of Electra. Production consisted of 9.29 million tons grading 1.75% nickel, 0.88% copper, 0.063% cobalt and 1.83 grams/tonne PGEs.1
  • ALX considers Electra underexplored, especially in the past decade where little to no modern exploration has been carried out.
  • The presence of komatiitic ultramafic rocks with spinifex textures grading up to approximately 1.0% nickel in surface sampling is reminiscent of the mineralization styles found in the Kambalda District of Australia, and the Raglan district of Quebec.
  • Gold mineralization is present at Electra. In 1995, Hemlo Gold Mines Inc. ("Hemlo") mapped a gold-bearing system over a 700 metre strike length and sampled up to 82.5 grams/tonne gold on the northeast shore of Bateman Lake within a Timiniskaming conglomerate, which Hemlo stated could represent the distal expression of a larger gold-bearing system at depth.2
  • The Tower Stock Gold Project operated by White Metal Resources Corp. is located approximately five kilometres northeast of the gold showing found by Hemlo, and hosts an inferred resource estimated at 86,297 ounces of gold contained within 3,971,583 tonnes at an average grade of 0.68 grams/tonne (not compliant with National Instrument 43-101).3

Mineral Deposit Inventory, Ministry of Energy, Northern Development and Mines, #MDI52B09SE00003

Hemlo Gold Mines Inc., Assessment File #52A12SE0001, 1996

3 Independent Mineral Resource Estimation, Tower Mountain Gold Deposit, ValGold Resources Ltd.; Prepared by Caracle Creek International Consulting Inc. and Clark Exploration Consulting Inc., Effective February 9, 2006.

ALX believes that a modern airborne survey is the required first step at Electra to locate and define geophysical targets related to the many surface showings discovered by historical exploration, followed by ground-truthing of anomalies, the application of leading-edge geochemical surveys, and diamond drilling. 

To view maps of Electra click here

Details of the Acquisition

ALX has executed a binding letter agreement (the "Agreement") with a vendor group ("the Vendors") to earn up to a 100% interest in one hundred and four (104) units totaling 2,225.73 hectares (5,499.91 acres), in exchange for total payments of $135,000 cash, 1.1 million common shares of ALX, and $500,000 in exploration expenditures (the "Expenditures"), according to the following schedule:

  • A non-refundable $3,000 cash payment paid by ALX as a pre-option payment for an exclusive 45-day period during which ALX will conduct due diligence on the Project;
  • On the later of TSX Venture Exchange ("TSXV") approval and signing of a definitive agreement (such date becoming the "Anniversary Date"): $7,000 in cash and 300,000 common shares of ALX;
  • On or before 1st Anniversary Date: $15,000 in cash and 250,000 common shares of ALX, and $100,000 in Expenditures;
  • On or before 2nd Anniversary Date: $20,000 in cash and 200,000 common shares of ALX, and an additional $100,000 in Expenditures;
  • On or before 3rd Anniversary Date: $25,000 in cash and 150,000 common shares of ALX, and an additional $100,000 in Expenditures;
  • On or before 4th Anniversary Date: $30,000 in cash and 100,000 common shares of ALX, and an additional $100,000 in Expenditures;
  • On or before 5th Anniversary Date: $35,000 in cash and 100,000 common shares of ALX, and an additional $100,000 in Expenditures.

Electra is subject to a 2.5% net smelter returns royalty ("NSR") payable to the Vendors on the sale of valuable minerals from the Project. At any time, ALX shall have the right to purchase from the Vendors up to 1.5% of the NSR in 0.5% increments for $500,000 per 0.5% increment. 

ALX and the Vendors have agreed to settle the terms of a definitive agreement incorporating the terms and conditions of the Agreement on or before December 31, 2020. ALX's acquisition of a 100% interest in Electra is subject to (i) completion of a due diligence review of the Project, to its sole satisfaction, (ii) approval by the Board of Directors of ALX of the terms of a transaction for the Project, and (iii) acceptance of the definitive agreement by the TSXV.

About Electra

Electra lies within the western extension of the Abitibi-Wawa-Shebandowan subprovince of the Superior structural province of the Canadian Shield. The volcanic-sedimentary units of this belt are bounded to the south by granitic terrain, and to the north by the Quetico subprovince.

A major structural feature known as the Thunder Lake Fault striking northeast-southwest through Electra is traced through the property using airborne magnetic geophysics, and is interpreted as a lithospheric scale fault. This type of deep-seated structure is a requisite for the emplacement of mineralization from a magmatic source. 

Historical exploration at Electra since the 1960s consisted of prospecting, soil sampling, trenching and limited geophysical and drilling programs, intermittently searching for nickel and gold mineralization. A 1995 drilling program by Winslow Gold Corp. intersected multiple zones of Ni-Cu-Co and zinc mineralization, including 16.6 metres of 0.15% nickel. 

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