TORONTO, ONTARIO--(Marketwire - Nov. 9, 2007) - Victory Nickel Inc. ("Victory Nickel" or the "Company")(TSX:NI)(www.victorynickel.ca) today announced financial results for the three-month and nine-month periods ended September 30, 2007. Achievements during and subsequent to the third quarter include:
- Obtaining further positive drill results from the 100% owned Minago sulphide nickel project on the Thompson Nickel Belt in northern Manitoba, including 64.65 metres grading 0.94% nickel and 35.44 metres grading 1.14% nickel.
- Receiving a universally positive response from First Nations and other local stakeholders in the vicinity of the Minago Project for its plans to develop the Minago Mine efficiently and in a socially and environmentally sound manner.
- Making significant progress on all aspects of the Minago sulphide nickel project open pit definitive feasibility study, including metallurgy, frac sand and hydrogeology.
- Completing a 12-hole, 1,500 metre drill program at the 100%-owned high-grade Lac Rocher sulphide nickel project in northern Quebec to test for extensions to the nickel sulphide mineralization and to provide metallurgical samples for a Preliminary Economic Evaluation of the near-term production and cash generation potential of the project.
- Entering into a Memorandum of Understanding ("MOU") with the Waswanipi Cree First Nation ("WCFN") whereby the parties have agreed to work together to support and expedite an underground exploration and bulk sampling program at Lac Rocher in a way that respects the collective interests of Victory Nickel, the WCFN and other stakeholders.
- Receiving drill results grading up to 9.5% nickel over 2.29 metres within a larger intercept of 45.92 metres grading 1.42% nickel at Lac Rocher.
- Continuing to evaluate the acquisition of producing and near-production nickel assets to enhance Victory Nickel's production profile.
"Victory Nickel has an exceptionally attractive sulphide nickel resource inventory and production profile in the Minago, Mel and Lac Rocher projects, all of which we continue to advance toward production," said Brian Robertson, President. "During the third quarter we made excellent progress, particularly at Minago, advancing the open pit feasibility study, and at Lac Rocher, with respect to expediting the 50,000 tonne underground exploration and bulk sampling program. We are also continuing to identify and evaluate attractive nickel assets at varying stages of development that, in combination with our current projects, offer the potential to create a dominant Canadian mid-tier nickel producer."
Victory Nickel is an exploration and development-stage mineral resource company engaged in the acquisition, exploration and development of nickel projects in Canada. As a development stage enterprise, none of Victory Nickel's exploration or development projects have commenced commercial production and accordingly the Company does not yet have revenue.
For the three-month period ended September 30, 2007, the Company had a net loss of $387,000, or $0.00 per share. For the period from inception, February 1, 2007 to September 30, 2007, the Company had a net loss of $1,893,000, or $0.01 per share. The losses for the periods include non-cash stock compensation of $103,000 and $1,113,000, respectively.
At September 30, 2007, the Company had working capital of $14,526,000, including cash and cash equivalents and cash for exploration expenditures totaling $14,940,000. Cash equivalents include bank-guaranteed investment certificates and bank discount notes. The Company does not own any asset-backed commercial paper. The Company has a corporate policy of investing its available cash in cash-equivalents comprising Canadian government instruments and certificates of deposit or other direct obligations of major banks.
During the three-month period ended September 30, 2007, the Company used $182,000 in operating activities. Financing activities generated $116,000 during the third quarter, and investing activities used cash of $535,000. $2,324,000 was invested in exploration and development activities offset by $1,789,000 realized on the sale of marketable securities. The Company is in the process of completing a definitive feasibility study for the Minago project and spent $1,466,000 during the quarter on consulting engineering and other costs related thereto. The balance of the exploration and development costs related primarily to approximately $504,000 spent during the third quarter on the Lac Rocher project, including drilling costs and environmental assessment costs associated with the evaluation of the near-term production potential of the project. The Company also made exploration advances to CVRD Inco Limited (CVRD) of $280,000 during the quarter.
For the period from inception, February 1, 2007 to September 30, 2007, the Company used cash in operating activities of $574,000, which included a net decrease in non-cash working capital balances of $99,000.
Full financial statements and management's discussion and analysis will be posted on the Company's website and at www.sedar.com.
Completion of the definitive feasibility study on the open pit portion of the deposit by Wardrop Engineering remains a focus for the Company. Wardrop is moving ahead rapidly with all aspects of the definitive feasibility study, and the Company is very pleased with progress made to date. All drilling necessary for the study, including resource, metallurgical, geotechnical and hydrogeological, is complete, and metallurgical testing, frac sand testing, permitting and community relations activities are ongoing and moving ahead as expected. Due to additional metallurgical testwork, completion of the definitive feasibility study on the open pit portion of the Minago deposit is scheduled for October 2008.
In addition, the Company has completed airborne geophysics over the North Limb to identify exploration targets that are expected to be drilled this winter in this highly prospective area immediately to the north of the Minago deposit. Past drilling in the North Limb has returned results similar to those in the Minago deposit over a known strike length of approximately two kilometres, and this area could potentially be an extension of the Minago deposit.
For the balance of 2007 and into 2008, the Company expects to achieve the following milestones at Minago:
- Technical report on frac sand characteristics.
- Continue comprehensive metallurgical testing.
- Advance discussions concerning memorandums of understanding (MOUs) with First Nations groups regarding Minago mine development.
- Updated 43-101 resource estimate.
- Receive metallurgical test results.
- Evaluate equipment.
- Final frac sand feasibility study.
- North Limb drilling.
- Deep drilling of Nose deposit.
The Company is in the process of evaluating the potential to begin an underground exploration and bulk sampling program to evaluate ore continuity and provide further metallurgical evaluation in 2008. Roche Consulting Engineering is completing a Preliminary Economic Assessment of two phases of development. Phase I would encompass extracting a 50,000 tonne bulk sample grading approximately 4% nickel. It is expected that results of this bulk sample program will support Phase II mining of 400,000 tonnes grading 1.2% nickel. Metallurgical testing is underway, as is a revised resource estimate, and results of both are expected before year end.
For the balance of 2007 and into 2008, the Company expects to achieve the following milestones at Lac Rocher:
- Updated 43-101 resource estimate incorporating recent drill results.
- Receive metallurgical test results on high-grade mineralization from Xstrata Process Support.
- Receive metallurgical test results on disseminated mineralization from Corem.
- Receive Certificate of Exemption for underground exploration and 50,000 tonne bulk sampling program.
- Receive Certificate of Authorization (operating permit) to begin underground exploration and 50,000 tonne bulk sampling program.
- Receive final Preliminary Economic Assessment (scoping study) from Roche Consulting Engineering.
The Mel deposit has a National Instrument 43-101-compliant indicated resource of 4.3 million tonnes grading 0.88% nickel (approximately 83 million pounds in-situ nickel) and an additional inferred resource of 1.0 million tonnes grading 0.839% nickel (approximately 19 million pounds in-situ nickel). This near-surface resource, along with a stipulation in the option agreement that joint venture partner CVRD Inco Limited ("CVRD Inco") shall mill ore mined from the Mel deposit at cost plus 5% (provided that the product meets CVRD Inco specifications and that CVRD Inco has sufficient mill capacity), makes near-term nickel production from the Mel deposit a possibility that the Company is evaluating.
The Company is presently in discussion with CVRD Inco concerning next steps with respect to Mel development, and expects to have details of its program in place prior to year end.
About Victory Nickel
Victory Nickel Inc. is a Canadian company with over 660,000,000 pounds of in-situ nickel in National Instrument 43-101-compliant measured (154,000,000 pounds) and indicated (511,000,000 pounds) resources in three sulphide nickel projects: Minago and Mel on Manitoba's Thompson nickel belt, and the high-grade Lac Rocher deposit in northwestern Quebec, and an additional 530 million pounds of in-situ nickel in inferred resources. Created from the nickel assets of Nuinsco Resources Limited (TSX:NWI), Victory Nickel is well financed and focused on becoming a substantial nickel producer by developing its existing properties and evaluating opportunities to expand its nickel asset base.
FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking statements." All statements, other than statements of historical fact, that address activities, events or developments that Victory Nickel believes, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek," "anticipate," "believe," "plan," "estimate," "expect," and "intend" and statements that an event or result "may," "will," "can," "should," "could," or "might" occur or be achieved and other similar expressions. These forward-looking statements reflect the current expectations or beliefs of Victory Nickel based on information currently available to Victory Nickel. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of Victory Nickel to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Victory Nickel. Factors that could cause actual results or events to differ materially from current expectations include, among other things, failure to successfully complete financings, capital and other costs varying significantly from estimates, production rates varying from estimates, changes in world copper, nickel and/or gold markets, changes in equity markets, uncertainties relating to the availability and costs of financing needed in the future, equipment failure, unexpected geological conditions, imprecision in resource estimates, success of future development initiatives, competition, operating performance of facilities, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and approvals from government authorities, and other development and operating risks. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Victory Nickel disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Victory Nickel believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
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Victory Nickel Inc.