Tuesday, 15 May 2007

Big Day For Pure Nickel & The Howard Group

The Howard Group's new relationship with Pure Nickel (NIC - TSX V / OTCBB-PNCKF) got off to a rousing start today with a major announcement from the Company that it signed a Letter of Intent with Xstrata Nickel to acquire ten high potential properties in Canada.

In the words of Management, "This agreement with Xstrata Nickel, in a single transaction, elevates Pure Nickel to one of North America’s largest nickel exploration companies."
Anyone following nickel prices and what has been happening with the stock prices of mining companies focused on finding the much sought after metal should be taking note of this development. In short, it vaults Pure Nickel into a most enviable position in the exploration game.

This agreement will substantially grow NIC's existing portfolio of two other projects in Canada and one in Alaska. Pure Nickel has paid Xstrata $2.5 million with the signing of the LOI and another $12.75 million plus 4.0 million warrants to purchase NIC stock at $2 per share at the closing date expected around July 9th.

A major point to keep in one's mind is that NIC has committed $8 million to work and drilling programs on its current properties for 2007 and it already has the capital today.

We put several questions to Jay Jaski who is CEO & Chairman of Pure Nickel:

Q: Why did Xstrata sell its properties?

A: First of all that is probably a question better posed to Xstrata. That said, it is our understanding that Xstrata’s strategy is to focus on production. This divestiture is strategically aligned with the previous transaction that saw Blackstone Ventures acquire Xstrata’s Scandinavian exploration properties.

Obviously Xstrata’s decision to sell its North American exploration properties is good for Pure Nickel. Our strategy is to pursue an aggressive growth agenda through the expansion of exploration and development assets. Acquiring the Xstrata properties fits very nicely with our strategy.

Not only have we acquired some outstanding properties, we have also benefited by adding some former Xstrata personnel such as Mark Shore who is our captive geophysicist and geologist.

Q: What was the bidding process?

A: Fifteen Company’s signed a Confidentiality Agreement. Eight companies put in competitive bids. Three companies were short-listed and Pure Nickel won.

Q: Why did Pure Nickel choose to bid on the property profile?

A: As mentioned previously, Pure Nickel is committed to a growth agenda. Pure Nickel has selectively assembled and acquired select nickel exploration properties over the last year. The property selection process has been led by our Chief Exploration Officer, Dr. Larry Hulbert. We have rejected a great many properties because they fell below the high bar we had set for grade, location, geology, and terms. We believe that our existing property package meets our requirements for probability of discovery.

The acquisition of the Xstrata package of properties complements our existing properties extremely well and establishes Pure Nickel as the pre-eminent nickel exploration company in North America. Today’s initiative was born from a very well established relationship with Xstrata Nickel by way of our joint venture with them at Fox River. As a result of our relationship and our positive financial position, we were able to put together a screening process to review the merits of each property and submit a winning bid in a very competitive situation.

By way of background, when we started the company May 18th, 2006 Nickel was at $7 dollars a pound and Inco and Falconbridge were not yet taken over. Rio Narcia, and Lionore were still operating companies. There is a genuine shortage of premier nickel properties worldwide.


The Company has very specific business objectives being 1) the acquisition of high grade - high potential projects 2) prove up considerable nickel reserves through drill programs and 3) sell the company!

This is definitely a company and a story one should track closely. We are very pleased to be working with Pure Nickel. Go to the company's web site at http://www.purenickel.com/.

To read the news release click here. Pure Nickel's closing price on Monday, May 14th was $1.23. At the time of this writing following a brief trading halt to release the Xstrata news the stock hit a high of $1.60 and seemed to be settling in the $1.40 range while the market digested the news.

To see the long list of accomplishments in the Company's short history click here.

(Editor's note: The Howard Group, members of The Howard Group and the associated Insight Limited Partnership are investors in Pure Nickel.)