Canadian firm acquires mineral exploration properties in western U.P.

A Canadian mineral exploration company has purchased the mineral exploration rights for a considerable swath of Michigan’s western Upper Peninsula.

A subsidiary of Longueuil, Quebec-based Highland Copper Co. Inc. (TSX-V: HI) acquired mineral rights for 447,842 acres of property from Kennecott Exploration Co. and Rio Tinto Nickel Co., according to a statement.

Both firms are subsidiaries of London-based Rio Tinto Group.

UPX Minerals Inc., a wholly owned subsidiary of Highland Copper, agreed to an $18 million deal, including $2 million at close and a $16 million zero-interest promissory note. UPX will pay down the note incrementally over six years. Highland is guaranteeing the repayment.

The properties span the area roughly from Marquette to L’Anse south to Crystal Falls with known gold, copper, iron and zinc deposits.

In the deal, UPX agreed to pay Rio Tinto Nickel Co. a 2 percent “smelter return royalty” on all mineral interests. Highland has the option to cut the royalty in half by paying $8 million. The option is exercisable at any time in the first 11 years after the closing, according to the statement.

The transaction included all of Rio Tinto Nickel’s financial, geological, geophysical, geochemical, environmental and other technical data for the properties.

Previously, Rio Tinto Nickel’s exploration efforts helped identify the high-grade nickel and copper deposit targeted by Eagle Mine in Big Bay, northwest of Marquette.

Highland said it had budgeted about $1.5 million to exploration efforts over the next 12 months. The company anticipates some drill testing may occur on the sites in 2018.

To date, Highland’s other explorations include its entirely-owned Copperwood Project located near the Porcupine Mountains. It’s also working to close a deal for the nearby White Pine Project and has an option to acquire a 65 percent interest in the Keweenaw Copper Project.

Highland in March completed a $30 million private placement for a feasibility study for the Copperwood project and to complete its acquisition of the White Pine Project, according to a May 16 securities filing.

“Although the Company’s focus remains the Copperwood project, we believe that our new exploration package is highly prospective given that, for many of the targeted commodities, the region has been under-explored,” Highland President and CEO Denis Miville-Deschênes said in a statement. “The acquired properties also represent a significant project pipeline for the future.”