El Nino (ELN) is a gold and base metals exploration company currently focused on one gold project in the Great Northern Peninsula of Newfoundland and one development project in New Brunswick which is under an option-sale agreement with Puma Exploration.
The Murray Brook Project is the largest NI43-101 compliant mineral resources in the Bathurst Mining Camp. Murray Brook is a joint venture project owned 32.5% by ELN and 67.5% by Votorantim Metals Canada (VMC), the Canadian subsidiary of Votorantim (2nd largest mineral resource company in Brazil, with business interests in more than 20 countries). VMC is the Project Operator.
To date, ELN has invested approximately $3.5 million in exploration expenditures since 2010. In 2011, ELN and VMC spent $2.1 million on exploration and completed 10,000 metres of drilling. Drill results formed the basis of the first NI43-101 compliant mineral resource estimation for the Murray Brook deposit, which was announced on February 28, 2012. The exploration and development program for 2012 consisted of an additional 18,500 meters of drilling on the Murray Brook deposit, metallurgical studies of drill core material from the deposit, and exploration on the adjacent Camel Back property, which is included in the Murray Brook Joint Venture. VMC and ELN released a positive Preliminary Economic Assessment (PEA or Scoping Study) in June 2013. The PEA was prepared by P&E Mining Consultants Inc., a leading independent consulting firm based in Brampton, Ontario. The results (see Table 1 below) demonstrate the potential technical and economic viability of establishing a new open pit mine and mill complex on the Murray Brook property.
Table 1 -- Murray Brook After-Tax Financial Results Summary
The financial summary is based on a mill throughput of 6000 tonnes of ore per day (or 2Mt/year) and a Life of Mine of 9.5 years.
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Model Mining Portfolio:
Compounding the Recovery
Murray Brook NI
Preliminary Economic Assessment July 2013
Murray Brook Metallurgical
The PEA is based on an updated NI 43-101 Mineral Resource Estimation (see Table
Table 2 - Murray Brook In-Pit Mineral Resource Estimate at C$21/T NSR Cut-Off -- Effective June 4, 2013
* Murray Brook's 2013 PEA is preliminary in nature and its mineable tonnage includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary assessment will be realized. Mineral Resources that are not mineral reserves do not have demonstrated economic viability.
The mineral resource estimation incorporates metal price, foreign exchange and NSR calculation as follows:
3-year trailing average metal prices (US$) as of January 31, 2013: Copper $3.68/lb, Lead $1/lb, Zinc $0.95/lb, Gold $1500/oz, Silver $29/oz.
Exchange Rate (US$/C$): 1.00
NSR = (Cu% x 38.54 + Pb% x9.13 + Zn% x 15.81 + Ag g/t x 0.44 + Au g/t x 0.0) -- 11.43
Option-Sale Agreement with Puma Exploration
The Company decided to sell, by way of option, the Company's Minority Interest, in our Joint Venture, with Votorantim Metals Canada Inc., more specifically our interest in the Murray Brook Polymetallic Project.
By mutual agreement on May 10, 2017 El Niņo Ventures Inc. and Puma Exploration Inc. ("Puma") agreed to modify the original payment terms of their asset purchase agreement. Thus, the initial payment to El Niņo was modified to a cash payment of an aggregate of $300,000, which includes a non-refundable deposit, the issuance of five (5) million Puma shares at the deemed value of seven cents, and the issuance of two (2) million share purchase warrants. The warrants issued are exercisable until May 4, 2020 at a price of $0.07 in year one, $0.08 in year two and $0.10 in year three. In the spring of 2018 Puma assigned part of its interest to Trevali Mining Corporation and Trevali, Puma and El Nino Ventures modified its agreement to allow Trevali to earn 75% of the Murry Brook Project.
In April 2019 the company received notice from Puma that Trevali had exited the initial agreement.
Puma and the company agreed to an additional amendment whereby Puma would issue one (1) million of its shares to the company to extend the final payment of one (1) million dollars to June 30, 2019.
Subject to this payment being made, El Niņo will have received a total value of $3.1 million dollars plus the one million share payment in June 2019 for the sale of its 32.14% interest in the Murray Brook Project.
El Niņo will also receive a laddered Net Smelter Return on Production (NSR), starting at 0.50%, at a Zinc price of US$1.04/lb. and increasing, in increments of 0.25%, to a maximum of 1.75% above US$1.50/lb. Zn, in relation to 32.14% of the production from the Murray Brook Property, which includes the Mining Lease and the Camel Back Claims, for the life of the Murray Brook Deposit and any new discovery made on the total project. As of May 29th, 2019 the price of zinc was $1.22 per pound.
In the event that PUMA does not make the final payment to ELN in regards to the asset purchase agreement, El Nino will receive its interest back in good standing and will retain its full interest in the Murray Brook Project.
In the first quarter of 2018 ELN announced the acquisition of three gold projects in the Great Northern Peninsula of Newfoundland (Figure 1). The claims were staked to follow up on the new Gunner Cove gold discovery of White Metal Resources.
El Nino's three gold projects were situated around the city of St. Anthony and northward (Figure 2 above), covering approximately 22 kilometers of favorable geology, similar to that being encountered on the Gunners Cove Project to the east and north of the company's three gold projects.
In the Summer/Fall of 2018, exploration programs were launched to investigate all three of the projects. Based on the results achieved at the end of the exploration, management decided to reduce its footprint in Newfoundland from three projects to one and retain the NP Gold Project.
Management of ELN are following the exploration results of White Metal Resources, Benton Resources, and Metals Creek Resources and in this newly discovered Newfoundland gold district.
ELN's technical team is currently considering a detailed exploration plan for its Newfoundland project and further details will be forthcoming.
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