REPORT TO SHAREHOLDERS
MINFOCUS EXPLORATION CORP.
2012 ANNUAL MEETING OF SHAREHOLDERS
AUGUST 22nd 2012
By the President, Dr. Gerald Harper
It is a great pleasure to provide this report on the activities of Minfocus Exploration Corp. since January 2012 when it became a publicly listed company. In that eight month time frame the company has launched most of the work programs recommended in the technical reports accompanying the listing documents and announced results on an ongoing basis. Positive results have been gained at the Nipigon Reefs property and the Chief Peter property. Work programs are pending on the suite of northern properties comprising, Weese – Luella Lakes, Witchwood River and Sim Lake until we have concluded the appropriate meetings and protocols with the First Nations in whose traditional areas these properties are located.
By April of 2012 the Greek national economic crisis had moved from rumour to reality and several other and larger European Union countries were confirmed as having similar problems. In the ensuing months this triggered a series of multi-day stock market plunges accompanied by flights of investors to perceived safe haven currencies and investments. Country after country, including Asian tigers reported quarterly national growth figures that were below previous forecasts adding to the gloomy climate for investors. As a result equity markets for junior mineral exploration companies dried up and trading volumes dropped to next to nothing.
In spite of this background, governments, unions and political agitators around the world demanded a bigger share of the revenue pie from natural resources exploitation (e.g. Australia, Bolivia, Indonesia Mongolia, Venezuela and Zimbabwe). Most recently this resulted in 44 or more miners killed in South Africa and an aggravation of the production disruptions that have plagued the major platinum group elements producers for the last several years. The short term result has been supply disruptions, accompanied by a dramatic price jump, that have eliminated any surplus that had been predicted at the start of the year. The longer term effect will be to raise the cut-off grade of the major production sources and thereby create a supply shortage unless there is an accompanying significant permanent price increase.
Our decision to focus our exploration activities on PGE targets in stable regions such as Canada has been justified as the risks associated with exploration and development of mines in countries like South Africa and Zimbabwe become more evident in failed production targets.
Since April 2012, Minfocus has been able to make multiple announcements with very encouraging results on both the Nipigon Reefs project and the Chief Peter project, on which various work programs have been ongoing since the summer of 2011. Both have returned anomalous to “ore” grade PGE values from surface trenching and channel sampling. In addition, drilling at the Nipigon Reefs project has further developed our model of a large layered ultramafic/mafic intrusive system with multiple mineralized layers of at least 2-5 metres in thickness with grades of more than 0.5 g/tonne PGE’s. Some of the results, worth special mention, at Nipigon Reefs suggest the surface mineralization may dip gently to depth, which could provide potential for open pit mining, which would be a significant new discovery in the development of our model of Nipigon Reefs.
The Nipigon Reefs project is only 75 kms north of Thunder Bay, sandwiched between the producing Lac des Iles palladium mine to the northwest and the developing Current Lake platinum deposit to the south. Of interest to Minfocus shareholders as an indicator of interest in the PGE potential of the region, in July 2012, after a five month process, Australian nickel producer Panoramic Resources Ltd made a successful takeover of Magma Metals Ltd., the then owner of the Current Lake deposit. Platinum was discovered at Nipigon Reefs in 1998 by a prospector who dug multiple pits exposing weathered ultramafic rocks. Subsequently several companies took options on the property and pursued the platinum and palladium values and demonstrated multiple layers of PGE mineralization (with an approximately 1:1 ratio of Pt:Pd) suggestive of a mineralised layered complex similar to the South African Bushveld Complex, which hosts the largest PGE resource in the world. Over the past 14 years more than 100 diamond drill holes and shorter overburden holes have been drilled in the area, confirming the geology as being favourable ultramafic and mafic rocks and making numerous PGE intersections. While 45 of those holes have been drilled within an area 1.1 x 1.6 kilometres, the balance is spread over the full area of the magnetic anomaly which is several tens of kilometres across.
Minfocus drilled seven diamond drill holes in February and March, four being to considerable depth, to penetrate areas in the vicinity of the greatest concentration of prior holes and three in the periphery of the anomaly. All located favourable rocks and PGE mineralization. Of great significance is the extreme difficulty of identifying the fine grained disseminated PGE mineralisation which is not associated with enrichments of other sulphide minerals as a visual indicator. Consequently several stages of core assaying were required to locate the mineralized intervals as have been reported in a series of press releases. We have also incorporated all our data and the historic drill data into a software program that generated sections and plans of the rocks and mineralization. This showed several historic holes had not been assayed sufficiently and therefore a program of additional assaying of some of the historic holes core was undertaken. Finally we have contracted to undertake an accurate land survey of all the old drill holes collars to locate their lateral and vertical positions within a few centimetres. We will then be able to correct the computer drill holes geology model and determine whether we need to do even more additional sampling of old holes. We will also be able to assess what, if any, additional drilling or sampling is required before a resource estimate could be considered.
In the course of all this compilation, Minfocus relocated the surface mineralization and recognised that it is not the up-dip projection of any of the zones intersected in deeper drilling. Therefore we have more work to do to determine if that mineralization extends to depth and whether it dips at a shallow angle thereby providing potential for open pit mining. We have also initiated some preliminary metallurgical and mineralogical/petrographic studies to provide more enlightenment of the nature of the mineralization under the capable guidance of our Senior VP and metallurgist, Ken de Graaf, and our Director and mineralogist, Dr. Graham Wilson.
At Max Lake, located between Nipigon Reefs and the Lac des Iles Mine and transected by Highway 527, Minfocus has initiated a preliminary prospecting, geologic mapping and geochemical soil sampling program to assess the property potential. Initial work following up old assessment files work reports suggests that a gold enriched zone extends into the property.
Minfocus’ optioned Chief Peter property, west of the former Shebandowan nickel, copper PGE mine of Vale INCO, was subjected to mapping and outcrop channel sampling in the summer of 2011. The sampling of the Central Zone was successful in defining several multi-metre long intersections of copper, nickel, PGE mineralisation associated with strong sulphide enrichment in a gabbroic host rock. Examination of the West Zone in summer 2012 did not provide as much encouragement. Compilation of historic and new data from the Central Zone will allow us to plan for an initial drilling program in the coming winter once access to the area has frozen over.
Our First Nations advisor, Rebecca Darling, has worked very hard to develop a good relationship with the First Nations on whose traditional lands we are exploring. We have been able to announce positive progress with two of the First Nation groups to date. We are continuing to make progress with other First Nations groups related to Minfocus’ projects throughout NW Ontario. We are committed to best practice with respect to all of our activities.
I must also thank all of our Board of Directors for their hard work and advice as the company has developed its projects. Finally I must recognise our small, hardworking staff, who administer the company, provide the financial management and reporting, regulatory filings and administration.
Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
This report to shareholders includes certain forward-looking statements concerning the future performance of the Company’s business and operations as well as management’s objectives, strategies, beliefs and intentions. Forward-looking statements are often identifiable by the use of words such as “may”, “will”, “might”, “would”, “plan”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “scheduled”, “forecasts” and similar expressions or variations (including negative variations) of such words and phrases. Forward-looking statements are based on the current opinions and expectations of management, and are subject to a number of risks and uncertainties that may cause actual results, performance or achievements of the Company to be materially different from those currently anticipated by such statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, the possibility that future exploration results will not be consistent with the Company’s expectations, fluctuating commodity prices, delays in commencing the Company’s proposed drilling program, exploration costs varying significantly from estimates, the availability of financing, and other risks identified in the Company’s documents filed with the Canadian securities regulatory authorities at www.sedar.com. Any forward-looking statement speaks only of the date on which it is made, and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.
- Technical Report:
Report to Shareholders