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:
· 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.
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.
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
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.
If you're interested in learning more about the junior resource market please come and visit us at www.aheadoftheherd.com.
Membership is free, no credit card or personal information is asked for.
Richard is host of www.aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.
Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
Richard Mills does not own shares of NioGold Mining Corp. TSX.V - NOX
NioGold Mining Corp. TSX.V - NOX is an advertiser on Richard’s website www.aheadoftheherd.com.