KAT Exploration has entered into an option agreement with VALE, but not as yet into a JV.
If VALE exercises the option then at that stage we will have our JV with them, but this has not yet occurred. I think it is very achievable, but the first stage will be for VALE to explore Lucky and assess its potential. If that potential looks good then with luck they will sign a JV. Personally I believe that some basic exploration is already occuring on Lucky and I anticipate an announcement from Ken at some stage in the near future stating that VALE are going to drill at Lucky.
I have posted the above for clarity (and only for clarity, I am not wishing to argue or step on anyones' toes here). It is important to distinguish between the stage we are at - an option agreement - and the full blown JV stage. When the JV comes then we will all be very excited indeed!
Below is the press release about our relationship with VALE, which explains in more detail what I have just summarised above:
KAT Exploration Signs Three-Year Option Agreement Contract With Vale
MOUNT PEARL, NL--(Marketwire - June 11, 2010) - KAT Exploration Inc. (PINKSHEETS: KATX) ("KAT") is pleased to announce that it has signed an option agreement with Vale Exploration Canada Inc. ("VEC"), a wholly-owned subsidiary of Vale S.A. ("VALE"), on its North and South Lucky copper properties on the Bonavista peninsula in eastern Newfoundland. Under the terms of the agreement, VEC has committed to an initial C$20,000 cash payment on signing and may elect to make further cash payments totaling C$75,000 over the three-year option period, and may elect to incur a minimum of C$750,000 in exploration expenditures within the option period to earn an 80% interest in the Lucky properties.
Upon VEC's exercise of the option, a joint venture will be formed to further develop the properties, with each party contributing to further approved exploration programs as per their interest. VEC will be the operator of the exploration programs during the option period.
The Lucky properties are in a geological setting with the potential for sediment-hosted stratiform copper (SSC) deposits. The Lucky properties have the potential to produce low-grade, large tonnage copper deposits similar to those of the Zambia copper belt.
Ken Stead, President/CEO of KAT, states, "The very fact that a company of Vale's caliber has enough interest in the area and sees enough potential in the Lucky properties to warrant an option with KAT, leaves us very excited. We are very pleased to be exploring these copper properties with Vale and look forward to bringing them to their full potential."
The Lucky properties are located on the Bonavista Peninsula in eastern Newfoundland, and are accessible by well-maintained roads, allowing for exploration programs to be carried out fairly quickly and comfortably.
Copper mineralization is quite visible in an old pit near a gravel road with impressive malachite staining along with chalcocite strata bound within the more sandy beds of the sediments with assay results of 2.5% Cu in the more concentrated areas. The most recent discovery was on our North Lucky property where well-disseminated chalcopyrite was found in exposed outcrop approximately 10km north of the South Lucky property.
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