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EX: CSE    germany-flag-icon-32 604.681.0221

Explorex Announces Signing of an Amended Letter of Intent to Acquire 100% of Development Stage Co-Ni-Cu Deposit in Finland

  • 2018

Vancouver, B.C. – Nov 15, 2018 – Explorex Resources Inc. (the “Company” or “Explorex”) (CSE:EX, Frankfurt:1XE, US:EXPXF) is very pleased to announce that it has executed an Amended Letter of Intent with three private Finnish companies (Alandra Oy, Kiviralli Oy and Tetra Ekberg Oy) to acquire the development stage Hautalampi project (“Hautalampi” or “Project”) within the renowned Outokumpu Mining Camp of eastern Finland owned by Vulcan Hautalampi Oy (a.k.a. FinnCobalt)(the “Vendor”).

Hautalampi is a cobalt enriched nickel-copper sulphide deposit that was a focus of pre-production development in the mid 1980’s and extensive engineering supporting a feasibility study in 20091.  Given the advanced stage aspect of the deposit, the established infrastructure and nearby mine development and mine operation services, Explorex believes the Project can be fast tracked to become a preferred supplier to the rechargeable battery manufacturing sector should the technical feasibility and economic viability be established.  The amended agreement is based on, but substantially different, than the general terms as outlined in a news release dated March 22, 2018.

Key Project Highlights

  • A feasibility study1 was completed in 2009 by a previous operator;
  • Significant pre-production development completed consisting of an 850 metre decline, 1,250 metres of additional underground development and a ventilation raise;
  • Key permits allowing for re-opening of underground workings have been granted;
  • The deposit occurs at a shallow depth of less than 150m below surface;
  • Existing historical Co-Ni-Cu mineral resources and reserves estimates2 defined by 21 kilometres of drilling;
  • Significant exploration potential extending beyond historical mineral resources2; and
  • Project is located in a mature mining district with personnel, plant and processing options locally available.

Gary Schellenberg, CEO stated: “Our exhaustive due diligence has confirmed to us that Hautalampi provides an excellent opportunity to be fast tracked to the development stage should the technical feasibility and economic viability be established. Guided by our work, we have re-written the terms of the LOI to reflect a more standard earn in agreement to acquire 100% and have developed a comprehensive work plan including the preparation of a current resource estimate and revision of the economic assessment under present-day commodity prices and opportune market conditions”.

Key Corporate Transaction Aspects

  • Extensive diligence is completed, Explorex will now focus on work that will lead to an updated feasibility study;
  • Platform for Growth – the Project will facilitate Explorex’s business plan to leapfrog to a development stage company in combination with a diverse range of global cobalt exploration projects; and
  • Overnight Entrant – the Project sets Explorex on a rapid path to become an emerging entrant in the rechargeable battery supply chain.

Key Hautalampi Deposit Attributes

The Hautalampi deposit was the focus of development in the mid-1980’s by Outokumpu Oy during which 2.1 km of underground development was completed, including an 850m decline and initial stope development to access the deposit and extract a 10,000-tonne bulk sample.  However, declining commodity prices at that time curtailed advancement to full production.

Note 1: In 2009, a feasibility study (“Feasibility Study”) was completed by Finn Nickel Oy, a previous owner and operator.  The objective was to advance the project to production, but once again, work stopped due to falling metal prices.  Of special significance, the Feasibility Study was based on the conventional smelting route, which inherently favors the recovery of Nickel over the Cobalt.  A major pursuit of the proposed work program is to perform metallurgical studies on the Ni-Co concentrate to determine the optimal processing path to capitalize on greater cobalt recoveries and the production of a premium product (e.g. nickel and cobalt sulphate).

Note 2: The Feasibility Study outlined an historic mineral resource at Hautalampi.  Explorex cautions the reader that a qualified person has not done sufficient work to treat these historical estimates as current mineral resources under National Instrument 43-101, the Company has not verified these historical resources and these historic resource estimates should not be regarded as consistent with current standards.  The Company includes these historical estimates for information purposes only as they represent material historical data, which have previously been publicly disclosed.  The historical mineral resources are summarized in the following table:

The exploration potential along trend towards the NE from Hautalampi is considered high.  Multiple drill intersections have identified several distinct mineralized zones at different levels along a prospective 2,500 m corridor.  The main Hautalampi deposit was the primary focus of the historic drilling and additional drilling will be required to properly define a mineral resource to NI 43-101 standards within this corridor.  The geological setting and mineralization of these target zones are similar to the Hautalampi deposit.

Additional work including, drilling, metallurgical test work, re-assaying and QC/QA will be required to upgrade the historical resource to current NI 43-101 reporting standards.  The Vendor has recently completed an 8-hole drill program to undertake additional metallurgical work.  The assay results from this drilling campaign will be reported once received and verified.

The Project comprises a 283.5 hectare mining concession, including surface rights, with an environmental and water discharge permit in full force and effect.  The permits allow for the dewatering of the mine workings and rehabilitation of the access to the deposit.

Agreement Summary

The Amended Letter of Intent (“LOI”) dated Nov 4, 2018, provides Explorex with staged option to earn a 100% interest over a 4-year period subject to completion of definitive transaction agreements (the “Transaction Agreement” or “TA”).  Key terms of the agreement are summarized below (all cash values are in US dollars):

In total consideration for the 100% acquisition of Hautalampi, the Company will deliver to the Vendor $1,990,003 in cash payments, $3,050,001 value in shares of the Company and perform US$3 million in exploration expenditures.

In addition to the above earn in schedule and upon earning 100%, Explorex will grant to the Vendor a 1.5% net metals royalty and upon declaring commercial production, will issue additional shares having a value of $1,500,000.

Since entering into the initial LOI, Explorex has completed an extensive due diligence involving technical, legal and economic aspects of the project and a financial review of the private Finnish company that owns Hautalampi. This review identified opportunities to expand the resources, refine metallurgical work that, if proven successful, could increase revenue by producing value add products directly consumed in the manufacturing of rechargeable batteries.

Upon completion of the definitive Transaction Agreements, Explorex’s priority will be to commence a drilling program this winter that will infill in areas where preliminary mine scheduling has been planned, follow up on several close in identified exploration targets with a focus on expanding the resource base and to collect additional material for metallurgical work, all required elements to update feasibility studies.

Project Background

The project is located 2 km SW of the town centre of Outokumpu, which is 45 km NW of the regional city of Joensuu, and 375 km NE of Helsinki in south eastern Finland. Infrastructure, labour supply and contractor availability in the immediate area is excellent due to extensive and nearby historic mining activity at both the Keretti poly-metallic mine and Vuonos copper mine. These historic mines gave rise to the Finnish stainless steel and mineral processing technology company, Outokumpu Oyj and Outotec Oyj. Year-round access is provided by a paved road running through the centre of the property, with a number of high voltage power lines present.

The Keretti mine, situated within the Project’s mining concession, operated from 1913 to 1989 and produced a total of 28.5 Mt grading 3.8% Cu, 0.24% Co, 0.12% Ni, 1.1% Zn, 8.9 ppm Ag and 0.8 ppm Au.  The Vuonos mine, located 6 km to the NNE from Keretti, operated from 1972 to 1986 and produced 5.5 Mt of ore grading 2.13% Cu, 1.32% Zn, 0.14% Co, 0.12% Ni and 10 ppm Ag. While these historic mining results have no impact on Hautalampi, they illustrate the extent of historic mining infrastructure in the immediate region.

Hautalampi is a hanging-wall Co-Ni-Cu rich mineralised horizon occurring 150 to 200 metres vertically above the historic Keretti mine.

Geological Setting/Mineralization

The Hautalampi deposit lies within a NE trending 2 km wide horizon of black schists and serpentinite bodies that defines the western margin of the “Outokumpu belt”.  Mineralisation occurs in tightly folded metamorphic rocks consisting of mainly quartz rocks with anthophyllite‐tremolite skarn bands and interlayers with variable amounts of chlorite. In some places the mineralised zone is also hosted by skarned dolomitic rocks. Minor diopside can occur with other skarn minerals.  Mineralisation mainly occurs as disseminations in bands due to metamorphosis.

Some drill holes indicate that in the NW parts, the mineralisation is cut by the present erosion surface. Mineralisation has a 10 ‐ 55° dip to the SE (averages 25‐30°).  The main part of the mineralisation is some 70‐120 m below surface and the deepest parts are 150 m below surface. Maximum thickness of the mineralization is up to 30 m.

Mining in Finland

Finland consistently ranks in the top three of the Fraser Institute’s top global mining investment survey and is highly ranked as an underexplored, stable jurisdiction.  Finland only opened its borders to foreign mining investment in the mid-1990s, prior to which all mining and exploration activities were conducted by state-controlled entities.  Finland stands out for its expanding mining sector within the EU where mining has generally declined over the years. With the EU becoming increasingly concerned about dependency on imports for key raw materials, Finland offers a potential pipeline of supply security.  In particular Finland, through strong support from the government agencies, is actively striving to assume a leading role in the European battery market.

The scientific and technical disclosure in this news release has been supervised and approved by J. Harrop P.Geo., a Qualified Person as that term is defined in NI 43-101.

About Explorex Resources Inc.

Explorex is an exploration company focusing on Cobalt and metals critical to rechargeable battery technology with the support of a strong strategic partner and end user.  Explorex has a developing portfolio of multi-stage projects including an LOI to acquire the Hautalampi Co-Cu-Ni deposit in Finland, is earning a 75% interest in the Kagoot Brook project in New Brunswick and has 100% interest in the early stage Handlebar Co-Cu-Ni Project northeast of Kamloops BC.


On behalf of the Board,

Gary Schellenberg,


For further information, please contact Gary Schellenberg, CEO or Mike Sieb, President at 604-681-0221 or Ron Birch at; phone 1-800-910-7711

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially and there are no assurances that the transaction described in this news release will close on the terms described or at all. Except as required pursuant to applicable securities laws, the Company will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by the Company. Readers are cautioned not to place undue reliance on forward looking statements.

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