TORONTO (CP) -- "The Lucky Jack project is one of the largest, high-grade, undeveloped molybdenum deposits in the world, with a historical mineral resource in excess of 700 million pounds of molybdenum," said Kevin Loughrey, CEO of Thompson Creek.
Under the deal with U.S. Energy Corp., Thompson Creek Metals Co. USA will pay $500,000 upon signing and will pay $1 million annually for six years beginning Jan. 1.
Thompson Creek will be the project manager will direct additional funds towards the assessment, environmental permitting, exploration and development of the property.
It can earn 15% of the Lucky Jack project by spending $15 million on the project.
To earn 50%, Thomson Creek must spend $50 million by July 31, 2018. Once it owns a 50%stake, Thomson Creek can form a joint venture with U.S. Energy or raise its interest up to 75 per cent by incurring an additional $350 million in project expenditures, for a total $400 million in expenditures and payments.
Thompson Creek owns the Thompson Creek open-pit molybdenum mine and mill in Idaho, a metallurgical roasting facility in Langeloth, Penn., and a 75% share of the Endako open-pit mine, mill and roasting facility in northern British Columbia.
It is also developing the Davidson Deposit, a high-grade underground molybdenum project near Smithers, B.C.
(c) The Canadian Press 2008