Manitou Gold is considering the creation of a spinoff nickel company based on some new discoveries at its Dubreuilville-area gold exploration project.
In what the Toronto-headquartered company calls a “strategic reorganization” of its assets in a news release, Manitou intends to form a publicly traded subsidiary, Western Nickel, to spin out nickel, cobalt and platinum group metals commodities.
Besides showing good potential for an economic gold deposit, Manitou said Goudeau has “broad, untested potential” to hold significant nickel value.
There’s a world shortage of battery-quality nickel needed for the electric vehicle sector and other clean technologies.
Manitou’s 366-square-kilometer Goudreau Project sits in the middle of established gold country, just east of Dubreuilville in northeastern Ontario. The company’s neighbors are Alamos Gold, with its expanding Island Gold Mine, and Argonaut Gold, which is carving out its Magino pit project.
But this summer, the company began reporting nickel intercepts during exploration drilling of an untested area called the Baltimore deformation zone, including a hit of 0.25 percent nickel over 48 meters in June.
Evidence of widespread nickel mineralization encouraged the company to stake more ground this year and strongly contemplate forming a nickel company to allow Manitou to focus solely on gold exploration.
The type of nickel-iron alloy mineralization the company said it’s seeing over a broad area is comparable to Canada Nickel’s Crawford Project, near Timmins, and the Dumont Project in Quebec.
Manitou has started a 1,000-meter follow-up drill program and anticipates making more announcements of discovering nickel-bearing rock.
There’s still some regulatory approvals to obtain but Manitou’s board of directors have given their go-ahead. The plan is for Manitou to retain up to 19.9 percent of the Western Nickel.
“The spin-out of Western Nickel by Manitou will be very positive for all shareholders of the company,” said company president-CEO Richard Murphy
. “Our shareholders will receive new shares of a pure nickel-cobalt-PGE company for no additional consideration, as well as a continued indirect interest in Western Nickel through the interest to be retained in the spun-out company by Manitou. As a result, they will benefit from the upside potential of both a gold-focused company, as well as a Ni-Co-PGE company – all within the 366 square km Goudreau project.”