Agreement results in more production at mill

Canadian Arrow Mines, has just signed a definitive agreement with Xstrata Nickel in Falconbridge, ON for the custom processing of a single bulk sample of 20 to 30 kt of Kelex Nickel ore at the Strathcona Mill. Timing is tentatively planned for...

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Canadian Arrow Mines, has just signed a definitive agreement with Xstrata Nickel in Falconbridge, ON for the custom processing of a single bulk sample of 20 to 30 kt of Kelex Nickel ore at the Strathcona Mill. Timing is tentatively planned for Q1 2012. 

The agreement also includes provisions for the purchase of up to 7 kt of conforming nickel concentrates produced by an independent third-party contracted by Canadian Arrow in a separate and unrelated agreement to mill ore from its Kelex Nickel Mine located near Timmins.  The agreement with Xstrata Nickel terminates December 31, 2012.

Canadian Arrow President, Mr. Kim Tyler said, "We are extremely pleased to have concluded this critical step to resumed production at Kelex.  Metallurgical data gathered from the bulk sample under real processing conditions will add to the laboratory test work completed to date.  We are also greatly pleased to have the opportunity to supply an additional 7,000 tonnes of conforming nickel concentrate over the course of 2012 as well. Next steps include concluding financing and contract mining arrangements."

The Company plans to supply the bulk sample from the first phase high grade open pit production from the Kelex Central West pit that was exposed, but only superficially mined, before suspension of production due to falling nickel prices below US$5/lb in 2005.  Cash flow received from Phase 1 will finance the work required to evaluate an expansion into a second phase 216,000 tonne open pit and 260,000 tonne underground mining operation.  Cash flow from Phase 2 will finance the development of the Company's flagship Kenbridge nickel project.  Kenbridge contains 98M lbs of nickel and 52M lbs of copper within 7.1M tonnes grading 0.62% Ni and 0.33% Cu of NI 43-101 measured and indicated resource.

The Alexo and Kelex mines have historically produced 87,000 tonnes averaging 3.06% nickel from both underground and open pit mining.  An NI 43-101 Technical Report (April 2011) highlights an indicated resource of 9.92M lbs of nickel contained in 473,000 tonnes grading 0.96% Ni for the Kelex and Alexo projects. Exploration potential exists along strike and at depth on both zones.

Mineral resources that are not mineral reserves do not have demonstrated economic viability

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