Lonmin has announced that it will be proceeding with its exploration program following some encouraging results from a study of the Union Bay area in Canada.

The platinum outfit, which is the third largest of its kind in the world, says it believes the resource has the potential to host "significant accumulations of platinum group metal mineralization".

Lonmin will fund the $1.2 million project which is the culmination of a joint venture agreement with Pacific North West Capital and Freegold Ventures.

Harry Barr, president of Pacific North West Capital, commented: "This additional $1.2 million exploration budget from Lonmin reinforces the potential importance of the Union Bay platinum discovery."

"The results from last year were encouraging and this year's program is aimed at following up on last year's discoveries and delineating new areas for additional exploration," he added.

Exploration will commence following further detailed geological mapping and sampling, with a drill program scheduled for mid June.