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Noront discovery highlights record year

March 1, 2008
by Norm Tollinsky
In: News with 0 Comments

A lot of people in the mineral exploration business spend decades raising money, acquiring properties and funding exploration programs with nothing of any significance to show for it.

After a career of close to 35 years in the business, Richard Nemis, president of Noront Resources, was still in search of the motherlode in 2002 when De Beers Canada and two joint venture partners reported some interesting drill results in Ontario’s Far North.

Intrigued, Nemis spent the next four years acquiring a land package and negotiating option agreements to fund exploration. Today, Toronto-based Noront Resources is the talk of Bay Street and Nemis’s phone won’t stop ringing.

In a year of record exploration expenditures in Ontario, it’s Noront Resources’ Double Eagle project in the province’s James Bay Lowlands that tops the list of exciting discoveries.

Drill programs

Thousands of claims encompassing hundreds of thousands of hectares have been staked, 20 junior mining companies are carrying out exploration in the region and a number of drill programs are under way, said Brian Atkinson, the Ontario Geological Survey’s resident geologist for the Timmins District.

High grades of nickel, copper and platinum group metals have sent Noront’s stock through the roof and attracted the attention of industry giants.

The original hole drilled in 2002 at McFauld’s Lake, 560 km (348 miles) northwest of Timmins, intersected volcanogenic massive sulfide (VMS) mineralization with copper values of 6 to 7%.

 “I hadn’t seen anything quite as good in a long time,” said Nemis.  “The area had never seen much drilling or exploration because there are no outcrops – it’s all bog, so I decided to go in and get some ground.

 “We staked as much as we could with the limited funds we had at the time.”

Noront Resources negotiated several option agreements with other junior mining companies to fund exploration over the next few years, but the results were disappointing.

Targets were identified using airborne geophysical studies, however, the focus was on geophysical signatures for VMS deposits, not for signatures that would represent a magmatic type environment.

Nemis was intrigued by some “very, very unusual geophysics” on a couple claims that were tied up in litigation. “It looked spectacular,” he said. “It just begged for a diamond drill.”

When ownership of the claims was resolved, Noront Resources swooped in to buy them and proceeded to drill the anomaly.

Discovery hole

“That was hole number one, the discovery hole,” said Nemis.

Assay results showed average grades of 1.1% nickel, .9% copper, .7g/t platinum and 2.1g/t palladium over a length of 71.5 metres.

Noront Resources’ stock went from pennies to $1.25 in late 2006, then shot up to $4 in September 2007 when the results from hole number five showed average grades of 5.9% nickel, 3.1% copper, 2.9g/t platinum and 9.8 g/t palladium, as well as gold, silver and rhodium over a length of 68.2 metres.

The company now has 65,000 hectares of claims staked, three drills turning and consistent results from 29 holes.

 “We know we have a deposit, but we don’t know how big it is,” said Nemis. “Another six holes and we’ll give it to engineering to work up a 43-101 resource.”

All of the drilling to date has been to depths of 240 to 250 metres, with mineralization encountered in some holes as close as seven metres from surface.

Comparisons with Voisey’s Bay, a nickel deposit discovered in northern Labrador and purchased by Inco in 1996 for $4.3 billion are tempting.

“The difference with this thing is the grade,” said Nemis. “If you just had platinum and palladium at these grades, you’d have a mine. With the grades of copper, you’d have a copper mine. With the grades of nickel, you’d have a nickel mine. Voisey’s Bay has no platinum or palladium.”

Nemis has his strategy all mapped out. Financial advisors have been retained and up to a 10 per cent stake of the company may be sold “for a very large sum of money” to help develop the area play.

The zone of interest forms a big arc dubbed the Ring of Fire. The magmatic deposits are inside the ring and the VMS deposits are on the outside. The Eagle One occurrence is responsible for all of the buzz, but there are numerous other targets and Nemis hopes to see Eagle two, three, four and five as exploration continues. The project as a whole has been named the Double Eagle.

Joint ventures with other exploration companies are being negotiated to accelerate exploration activity.

 “That’s what the area needs: a lot of money spent on it.”

At some point, the area play will be packaged and sold to one of the giants in the industry, possibly Vale Inco or Xstrata.

“The key for us is to maximize the price that’s paid, so the shareholders get their due. That’s what I’m here for, to make sure the shareholders are taken care of. I don’t want to sell it cheap. I want the biggest bang for the buck.

This is the plan. When we’ve developed it to a stage that’s intriguing to a major company, they’ll be there.”

The isolated location of the deposit and the swampy terrain may be the biggest obstacle to overcome.

Road access

“With a gold operation or a diamond operation, you can fly your product out, but with a base metal producer, you pretty well need a permanent road or rail link to get your concentrate out,” said Mark Smyk, the OGS’s acting regional manager for northwestern Ontario. “That puts a whole new wrinkle in your economics, so it’s tough. What will likely happen is that exploration will continue until they get to a point where they pretty well know what they have and then they’ll have to crunch the numbers.”

Smyk estimates that the nearest permanent road is 150 to 200 kilometres away. A winter road to Webique, a First Nation community approximately 90 kilometres from McFauld’s Lake, offers another possibility, but global warming and the uncertainty of ice conditions make this a risky alternative.

Coming to an agreement with the First Nation communities in the area could also be challenging, but Nemis is confident that something can be worked out.

 “We can work with the Native groups,” he said. “I know we can. I’ve met with them several times now. They’re not unwilling to work out a deal.”

Smyk concurs. Webique, in particular, has been “very receptive” to opportunities related to the mining industry, he said. Members of the community have participated in prospecting courses and found employment with the junior mining companies active in the area. Businesses in the community are benefiting from the activity, too.

 “They’ve really embraced what’s happening there,” said Smyk.

http://norontresources.com

“I just had to keep drilling. Just like the little pink bunny. It’s persistence. I always thought I’d hit the motherlode. ”
 -Richard Nemis, president and CEO, Noront Resources

 

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