Thompson Nickel Belt Project

Location

The Project contains a series of high-grade nickel drill intersections from historical work that warrant follow-up with modern geophysics and drilling. There are also numerous untested targets. The area is approximately 25 kilometres from the city of Thompson, Manitoba, where there are existing Tier-1 mines and nickel processing facilities owned and operated by Vale.

The Thompson Nickel Belt is the fifth largest sulphide nickel belt in the world based on contained nickel endowment. The North Thompson Project covers much of the north and north-western extension of this belt.

The “Strong” Licence (MEL1067A), the “Hunter” Licence (MEL1118A), and “Hunter Claims” have a total combined area of 18,685 hectares. These licences and claims have seen virtually no exploration drilling since 2005. In 2007 VTEM airborne geophysical survey on the Hunter Claims provided a number of priority drill targets. These have never been drill tested. It is anticipated the first programs under this option agreement will focus on these high priority targets.

Ownership

On May 5, 2020, Fjordland announced that it has entered into a definitive option agreement with CanAlaska Uranium Ltd. to earn up to an 80% interest in CanAlaska’s 100%-owned North Thompson Nickel Project in Manitoba, Canada.

As summarized below the agreement grants to Fjordland the option, over a 6-year period, to incur on a graduated basis, exploration expenditures of $9 million, make cash property payments aggregating $150,000 and issue periodically up to 8.5 million common shares.

OPTION STAGE FEX
INTEREST
EARNED (%)
CASH
PAYMENT
($)
FEX SHARES
ISSUED
EXPLORATION
EXPENDITURE
($)
TIMELINE
(MONTHS)
On signing 25,000 1,000,000 Paid
Stage 1 49 1,500,000 24
Stage 2 21 50,000 1,500,000 2,500,000 24
Stage 3 10 75,000 6,000,000 5,000,000 24
Totals 80 150,000 8,500,000 9,000,000 72
Feasibility Bonus 10,000,000

The underlying Joint Venture Agreement which forms part of the Option Agreement defines Feasibility Study, Net Smelter Return Royalty and Advance Royalty Payment. Upon completion of each stage of exploration Fjordland may elect to proceed to the next stage or in the alternative continue by means of a Joint Venture. In the event that Fjordland has earned a minimum 70% project interest and a Feasibility Study yields a NPV8 exceeding $100 million Fjordland will then issue to CanAlaska, as a bonus, an additional 10 million common shares. Pursuant to the Joint Venture, the parties may contribute to ongoing exploration expenditures on a pro -rata basis or elect to dilute to a 10% interest in which event their interest will convert to a 2% NSR. In the event that CanAlaska is the party granted the 2% NSR they will be entitled to an Advance Royalty Payment upon commercial production. This payment will be equal to 2% of the capital cost and will be capped at $10 million.