On October 20, 2010, the Company completed the acquisition of the Fox properties. The Company acquired a 75% interest in the Dunlop property and a 100% interest in the Fox River property on execution of a formal definitive purchase agreement. The terms of this purchase include:
• a cash payment of $50,000;
• the issuance of 1,262,500 common shares;
• staking mineral claims over all of the former Dunlop property; and,
• a minimum $250,000 exploration program by April 15, 2010.
If a bankable feasibility defines a deposit containing inferred, measured and indicated Mineral Resources, inclusive of Mineral Resources modified to produce proven and probable Mineral Reserves, in accordance with NI 43-101, totaling at least the equivalent value of a 20 million tonne deposit at 1% nickel equivalent, the Vendor may give notice within 90 days of receiving such study to form a 50 / 50 Joint Venture by funding the implementation costs of the study until such time as such costs equal 150% of Auriga Gold's total expenditures at the time of delivery of such notice, and by arranging project financing costs. The Vendor may elect to become operator. Thereafter, the parties shall incur the balance of the expenditures pro-rata to their interests.
The Fox River property is subject to NSR according to the following schedule: 2% NSR when the LME spot price for Ni ≥ $12.00 / lb. for the applicable period; 1.5% NSR when Ni < $12.00 / lb. and ≥ $6.00 / lb.; and, 1% NSR when Ni < $6.00 / lb. The Vendor retains a first right and option to purchase all or any portion of concentrates or mineral products produced from the Fox River properties applicable to each 12 month period of commercial operation, to be set forth in a separate off-take agreement.
On the Dunlop property, a former property owner holds the remaining 25% interest as well as a 1.5% NSR, of which 0.5% can be purchased for $500,000.
The Fox properties are located east of Gillam, in northern Manitoba. The properties comprised of staked claims and mineral exploration licenses with an area of 58,000 ha covering the Fox River belt which is considered to be an extension of the Thompson nickel belt. The properties were acquired with a substantial geological and geophysical exploration database and contain a number of drill targets associated with platinum group metal and base metal showings.
On July 13, 2010, the Company filed a NI 43-101 compliant technical report on the Fox properties that qualified a further exploration program on the property.
During the year-ended March 31, 2011, the Company completed a preliminary diamond drill program on the Fox properties and has identified further platinum group metal and base metal drill targets. The Company continued drilling during the three months ended March 31, 2012.