NioGold Mining Corp. TSX.V –
NOX
Richard (Rick) Mills
Ahead of the Herd
As a general rule, the
most successful man in life is the man who has the best information
NioGold Mining Corp. TSX.V -
NOX is breathing new life into former mines and searching for the next one along
the Golden Highway.
One
of the areas in Canada that investors should have on their radar screen is the 2,800-2,600 million
year old
Abitibi Greenstone Belt – one of the world’s largest Archean
(one of the four principal eons of Earth history) greenstone belts. Trending in
an east-west direction the
Abitibi extends for over 650 kilometers and is 150 km wide - running from west
of Timmins, Ont., to Chibougamau, Que.
The Abitibi Greenstone Belt
(the minerals in the
metamorphic rocks that make up greenstone belts are green in color) has proven
up more than 170 million ounces of gold and is one of the most prolific gold
producing areas in the world. In 2006 there were over 40 gold deposits in the
world with more than 10 million ounces of gold, five
of them – Hollinger-McIntyre, Kirkland Lake, Dome, Kerr Addison and Horne Mines
- are in the Abitibi. Also located in the Abitibi are the world famous Campbell
Red Lake – Goldcorp and Hemlo Mines.
The two largest mining
camps in the Abitibi are Timmins and Kirkland Lake. Between them they account
for almost 100 million of those 170 million ounces of gold.
In the late 19th century prospectors
found gold in what is now the city of Timmins. In the early twentieth century three
large gold mines were found in the Timmins camp - Dome, Hollinger, and MacIntyre.
The Timmins discoveries
started a huge exploration rush to explore nearby Kirkland Lake. Seven gold
mines were found and these mines established Kirkland Lake as a major mining
center.
There are many other large
gold camps in the Abitibi Greenstone Belt:
·
Cadillac
·
Malartic
·
Virginatown
·
Rouyn-Noranda
·
Val-D'Or
Gold
Since
the 1930s the Cadillac, Malartic, and Val d’Or (French
for - “valley of gold”) camps have produced upwards of 45 million ounces of
gold, and are presently home to seven producing gold mines, and one major mine
development project.
NioGold Mining Corp. TSX.V –
NOX has consolidated a large 125 square kilometer land package in the heart of
the Malartic and Val-d’Or gold mining camps.
NioGold’s Malartic
- Val-d’Or project is located in proximity to the towns of Val-d’Or and Malartic. Covering 125 km², the Malatric-Val
d’Or project is divided into eight properties: the Marban
Block (Aurizon JV), the Malatric
Hygrade, the Malatric H,
the Camflo West, Val-d’Or, Héva
and Siscoe East.
The
Malartic - Val-d’Or project is located in close
proximity to three currently producing mines - Agnico-Eagle’s Laronde, Lapa and Goldex Mines - and close to several active advanced
exploration and mine development projects such as Kiena,
Midway and Lac Herbin.
NioGolds Marban
Block is adjacent to Osisko Mining’s Canadian Malartic project, one of Canada’s
largest developing gold projects having close to nine million ounces of gold.
Work
has been focused on the Marban Block property. This
property is the result of NioGold’s consolidation of
four contiguous properties in the Malartic mining
camp - Norlartic, First Canadian, Marban,
and Gold Hawk. The Marban Block contains 3 past
producing gold mines and three other distinct gold deposits - the former Norlartic, Kierens and Marban mines and the North-North, North and Gold Hawk
Zones.
There
is a NI 43-101 compliant resource estimate of Indicated resources of 598,000
ounces gold in addition to Inferred resources of 361,000 ounces gold for the Marban Block:
·
The
gold resources are defined along a three kilometer segment of a regional gold
mineralized fault zone
·
Known
deposits are reasonably close to the surface and can be accessed by a ramp
·
The
access provided by the old mines drifts and adits
means a much lower cost and shorter timeline to production startup
·
To
date NioGold’s Marban Block
Project has been drilled to a maximum depth of 500 meters. Most major deposits
on this belt have been mined at 1,000 meters or more
·
NOX’s
current deposits are open at depth
·
NioGold’s has an existing
resource of 960,000 oz’s gold across all categories. This resource includes
open pit as well as underground resources and both have very good potential to
expand at depth and near surface - joint venture (JV) partner Aurizon plans on funding 200,000 meters of drilling over
the next 3 years
Marban has an indicated
resource of 181,000 ozs of gold and an inferred
resource of 114,000 ozs of gold. The Marban gold system has traced over 1.4 kilometers,
there is substantial lower grade gold mineralization within the upper 250 meters
of the gold system at Marban. With today’s higher
gold prices this area needs to be reevaluated. Historic drilling data has also indicated
that the geologic features that were the foundation for the Marban
Mine are also present in areas around the mine.
Kierens has an indicated
resource of 101,000 ounces of gold and an inferred resource of 99,000 ounces of
gold.
Norlartic has an indicated
resource of 316,000 ounces of gold and an inferred resource of 148,000 ounces
of gold.
A
good portion of the Norlartic / Kierens
resources are near surface mineralization potentially amenable to open pit
mining.
In
1989, Aur Resources estimated the North Zone had over
136,000 tonnes of resource grading 6.86g/t gold for
30,000 ounces of gold. The Gold Hawk Zone veins 1 and 2 had over 254,000 tonnes of resource grading 8.57g/t for 70,000 ounces of
gold and estimated the North-North Zone had over 754,000 tonnes
of resource grading 2.85g/t for 70,000 ounces of gold.
JV Deal
In
July 2010, NioGold successfully negotiated an
important partnership with Aurizon Mines Ltd. (TSX - ARZ)
to further develop the Marban Block property gold
resources. A three-year $20M drilling program (200,000 meters) on the Marban Block is currently underway with a $5.9M program
approved for the first year.
Aurizon must incur
expenditures of C$20 million over three years, of which C$5 million is a firm
commitment to be spent in the first year. Aurizon
must complete an updated NI 43-101 compliant mineral resource estimate, and
must make a resource payment equal to the sum of C$30 (or C$40 if the price of
gold is then above US$1,560) multiplied by 50% of the number of total gold
ounces in the Measured and Indicated resource categories plus C$20 (or C$30 if
the price of gold is then above US$1,560) multiplied by 50% of the number of
total gold ounces in the Inferred resource category.
Aurizon can then increase
their stake to 60% by delivering a feasibility study,
and by a further 5% (cumulative 65%) by arranging project financing for capital
expenditures estimated by the feasibility study to place the project into
commercial production.
NioGold will be the operator
during the initial earn-in period but Aurizon will
become the operator after it earns its 50% of the project. The work program at Marban will be prioritized towards increasing the resources
that can potentially be mined by open pit.
“NioGold has reached another milestone in the
development of the Malartic project by joining forces
with a proven and growing mine developer and explorer in the Abitibi. The partnership provides the capital and
technical support required to advance the Marban
Block property into potential mine development over the next three years. The $20 million expenditures will be mainly
directed to drilling in an effort to increase the resources, with first
priority given to the Marban deposit near surface
potential.” Rock Lefrancois, President of NioGold
The
Joint Venture deal between Niogold and Aurizon deal assures minimal dilution to NioGold for development of the Marban
block - they are fully carried to production. All the costs required in
delivering an independent feasibility study are paid for by Aurizon
and Aurizon also arranges the financing for NOX’s
cost of production.
When
you consider that the Marban block is only 10% of NioGolds holdings, Aurizons $20
million in expenditures, NioGold gets paid on a per
oz basis and ARZ is carrying NOX to production, it seems, to this author, to be
a very good deal for NioGold shareholders.
Management
NioGold has a very strong
management team that combines the; business and financial strengths of Mike
Iverson, the geological strengths of Vice-President Rock Lefrançois
and the advice in
strategic and corporate business development from Simon Ridgeway.
Michael A. Iverson, Chairman and CEO. Michael is president
and director (from March 1975) of Triple K Ventures Ltd. He has also served as
president and director of R.P.F. Custom Wood Fibre
Ltd. since 1985. In November 1997, Mr. Iverson joined Sasha Ventures Ltd., a
public company, serving as president and director. In addition to these
substantial positions, Mr. Iverson has been chairman, director and CEO of
Fortuna Silver Mines (from March 1998 to December 2004) and remains as a board member.
Michaels wide-ranging knowledge of exploration methods
applied to various styles of mineral deposits and his ability to develop
exploration concepts is a tremendous asset in advancing NioGold’s
diversified portfolio of projects.
Rock
LeFrancois, P.Geo.,President and COO. Rock is a professional geologist
who brings strong technical and management skills to NioGold.
Mr. Lefrançois has over 20 years of experience in the
search for and valuation of various types of precious and base metal deposits
across the North and Central American Cordilleras and the Abitibi Greenstone
Belt. During his career he has served as senior geologist for mid-tier mining
companies, notably Cambior and Aur Resources. His
local knowledge of the Val d’Or and Malartic mining
camps was an asset in acquiring key ground to build NioGold’s
land package in the area. After graduating from Concordia University in 1987
Rock worked for eight years exploring the southwest US and Mexico for gold and
porphyry copper deposits at, now IAMGOLD owned, Cambior. From there he took a
position with Aur Resources working on gold and
copper exploration in the Abitibi Greenstone Belt.
Simon
Ridgeway, director. Simon is an accomplished mine developer with over 30 years
experience in the mining industry. During the 1990s, Mr. Ridgway led the
discovery and development of two gold deposits in Honduras and Guatemala, both
of which were subsequently sold and put into production by Glamis
Gold, now Goldcorp. Simon is a co-founder of the Gold Group, a stable of mining
and exploration companies having a head office in Vancouver, Canada. The
companies under his management include a full spectrum from grassroots
exploration through advanced-stage definition drilling to production. Since
2003, his group has raised over $300-million in the European and North American
capital markets.
There
are a number of important facts to understand about NioGold’s
projects:
·
NioGold has the largest land
holding (125 square kilometres) in the Malartic/Val d’Or mining camps. The landholding is located
along the Trans Canada Highway 117 - a stretch of pavement called the Golden
Highway as it links a large number of current and historic gold mines, gold
development projects and gold milling facilities. In total 45 million ounces of
gold has already been produced along this section of the highway and there are
known to be a further 15 million ounces of reserves.
·
The
contiguous Marban Block, Malartic
Hygrade, Malartic H and Camflo West properties, collectively named the Malartic Block are on a major gold mineralized structural
zone known as the Norbenite-Marbanite. To date NioGold Mining has only explored a small portion of their
20 kilometer piece of the Norbenite-Marbanite fault
zone
·
The
Camflo West Property covers a 7 kilometer stretch of
land that Niogold feels is under-explored plus
another 5 kilometer stretch of unexplored land adjacent to the past producing Camflo Mine. In 2006 NioGold
completed geophysical surveys and drilled eleven widely spaced holes testing
the sediment/volcanic contact. The drilling uncovered high level intrusives and significant alteration similar to those
associated with gold mineralization at the Malartic
camp
·
Northwest
of the Marban Block, Niogold
owns the Heva Property. The Heva
Property is on trend with the Marban Block
·
NOX
is in a proven and historic gold camp with existing excellent infrastructure -
full service towns, nearby access to road, rail, power, water,
telecommunications, gold milling facilities and an experienced labor force
·
The
properties are in Quebec and Quebec is consistently rated among the best places
in the world for mining investment by the Fraser Institute, an independent research
organization
·
NioGold receives up to 35%
in tax credits for work performed in the field, this allows the company to use
tax credits for refinancing with no dilution to the share structure
·
NioGold has attracted the
attention of a deep pocketed partner committed to building shareholder value,
for both companies, through the drill bit
·
NOX’s
100% owned Malartic block, which adjoins the Marban Block to the West, is on trend with Marban and is easily 3 to 4 times the size of Marban
·
Management
– highly skilled, well known and respected industry veterans
·
The
Marban Block is only 10% of NioGold’s
total holdings in the area
Conclusion
Because
NOX hasn’t given up all their exploration potential in the area they just might
be better positioned than others in this historic mining camp for the next
major discovery. Remember NOX only joint ventured 10% of their properties leaving
them enormous blue sky potential.
Niogolds last news release,
March 3rd 2011, shows managements level of
commitment to building shareholder value through exploration and the drill bit:
NIOGOLD COMMENCES
EXPLORATION DRILLING IN NEW SECTOR AT MALARTIC
NioGold Mining Corporation TSX.V – NIO has
begun site preparation for the mobilization of a drill rig to the southern
portion of the Company’s large Malartic Block
property, located 20 kilometers west of Val d’Or and directly adjacent to Osisko Mining Corp.’s Canadian Malartic
mine development project.
NioGold plans an initial 6,000 meters of exploration drilling to
investigate sedimentary formations on the north side of the famous Cadillac
fault in proximity to the Canadian Malartic and Barnat deposits and Jeffrey Zone being developed by Osisko. The Canadian Malartic
project presently boasts open pit reserves of 245.8 million tonnes
at an average grade of 1.13 g/t Au for 8.97 million contained gold ounces.
Canadian Malartic is now recognized as a porphyry-type
gold system hosted within diorite porphyry intrusions and altered sediments on
the south side of the Cadillac fault.
Despite the obvious
potential within the southern portion of the Malartic
Block property, no sustained exploration programs have been conducted over the
area in the past, in part due to the lack of rock exposure. NioGold
ranks this sector as a high priority target for a new discovery. The drilling
will test a combination of magnetic, electro-magnetic and induced polarisation geophysical anomalies and gold in-soil
anomalies.
NioGold is an exceptionally
well run company. By combining ambitious exploration plans on their 100%
owned Malartic Block property and back stopped by a carried 35%
interest in the joint ventured Marban Block NioGold seems to be well positioned to become a major
player in one of the world’s greatest mining camps.
Is
the NioGold Mining Corp. TSX.V - NOX joint venture with Aurizon and its 2011 exploration plans in the Abitibi Greenstone
Belt on
your radar screen?
If
not maybe it should be.
Richard
(Rick) Mills
rick@aheadoftheherd.com
www.aheadoftheherd.com
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Richard Mills does not own shares of NioGold Mining Corp. TSX.V - NOX
NioGold Mining Corp. TSX.V - NOX
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