On May 9, 2007, the Company announced that it had exercised its option to acquire the rights to the Valozoro nickel property in Madagascar and now owns 100% of these exploration rights.The company has renewd the current exploration lease which are valid until May 2015. The Valozoro nickel deposit is located 60 kilometres north of the town of Fianarantsoa in south central Madagascar and is reported in the Catalogue des Principaux Gites Mineraux de Madagascar (Catalogue of Principal Mineral Deposits of Madagascar). During 1956 and 1957, UGINE completed an extensive prospecting program and reported an estimated resource of 3.7 million tons of lateritic ore (derived from an altered peridotite host) grading 1.75% nickel containing 65,000 tonnes of contained nickel metal. This is a historical resource estimate and a Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves under National Instrument 43-101 (NI 43-101). The Issuer is not treating the historical estimate as current mineral resources or mineral reserves as defined in sections 1.2 and 1.3 of NI 43-101.
DFI completed a reconnaissance level sampling pass over the Valozoro lateritic nickel deposit with results from the program confirming the presence of a high grade nickel deposit (the results of this program were announced in a news release dated March 4, 2004). The reconnaissance pass of sampling collected 1 meter chip and channel samples through the lateritic profile by re-visiting 18 of the more than 454 pits excavated on the property by UGINE. In addition road cuts and hillside exposures of mineralization were sampled and 170 of the pits were mapped and logged for depth.
Pit sampling was restricted to pits with a maximum depth of 8 metres (m) due to equipment constraints, while mapping shows that some pits reach a depth of 17.5 m. The shallow depth of sampling meant that results are mainly from the upper 6.6 m of lower grade boulder dominated material. Sampling returned grades between 0.61% and 1.77% nickel over thicknesses of 4 to 6 m in 10 of the 18 pits sampled in this upper horizon. Where sampling reached the serpentinised lower part of the deposit a dramatic improvement of grade was seen with values ranging between 3.5% nickel over 2m to 5.9% nickel over 1m in three pits.Grab and chip samples collected over the deposit in road cuts and slump exposures of the aterite horizon returned Ni values as high as 8.56% nickel from the argillaceous serpentine of the exposed lower horizon.
Crushing, milling and geochemical analysis of the DFI samples was carried out by Anglo American Research Laboratories (Pty) Ltd., Johannesburg, South Africa. The samples were processed using the ICPME46A method.
The Company completed a second channel sampling program of over 400 of the existing prospecting pits with samples being taken at half metre intervals to determine the actual contained value of the orebody in both terms of nickel and secondary products such as cobalt. In excess of 8 000 channel samples were taken during this program. The sampling work was completed in early October 2007, and the samples were analysed by ALS Chemex laboratories in South Africa. An Ultra GPR (Ground Penetrating Radar) survey was carried out over the deposit by a Canadian company Goundradar in 2008 to map the sapprolite/harzburgite interface. A total of 29 continuous line profiles covering 50.7 hectares were completed. The survey indicated that the pits excavated by UGINE had not fully penetrated the sapprolitic horizon, and that substantial material lay beneath the current level investigated by the pit sampling program.
The company is currently maintaining the Valozoro property pending market and technology developments.