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NioGold Progresses Towards 1 Million Ounces Gold

By ERic Pratt
Feb, 23rd

As 2009 comes whimpering in on broken economic legs and a cancer-riddled circulatory system, there are cures for savaged investors who have wounds in need of much more than licking. Emerging gold companies like NioGold (TSX.V:NOX) have been so beaten up in share price, the market overlooks the fact that companies with solid gold projects will be primary beneficiaries of the anticipated 2009 resumption of the gold bull market.

As the U.S. Treasury and Federal Reserve print money with abandon and as the only answer available to theworsening U.S. economic devastation, there is only one place for the price of gold to head, and that is straight north.

And “north” is exactly where NioGold’s portfolio of advanced exploration projects are.

The Malartic Gold Camp and the Abitibi District

Probably Canada’s second most famous mining district after Red Lake, Ontario, the Abitibi gold district has so far yielded over 25 million ounces of gold.

Within the Abitibi district the Malartic camp has itself produced over 9 million ounces, and there are many millions more to be mined. NioGold has united the ground containing 4 past-producing gold mines into a 68 square kilometer land package that creates the opportunity to systematically explore the underlying geophysical stratigraphy that controls mineral deposition throughout the belt, and develop an efficient strategy to approach the massive land position as a potential major new mine.

In 2007, Mine Development Associates calculated a NI 43-101-compliant mineral resource for the Kierens and Norlartic deposits. The two nearby ore bodies contain an estimated 340,000 ounces of gold, based on a largely inferred resource of 3.94 million tonnes, averaging 2.7 grams of gold per tonne. This resource remains open at depth. Historic resource calculations exist for the North deposit, and for the Gold Hawk and North-North deposits.

During the 2008 exploration season, NioGold drilled 67 holes for a total of 24,718 metres, 98% of which was concentrated in and around the historic Marban Mine. These are drill results which have not been incorporated into the 2007 43-101 report. According to a recent report by Objective Capital:

“Niogold has now completed 90 holes into its Marban project since late in 2006 and assays indicate the mineralised zone at Marban is significantly larger than previously believed. At least ten easterly-striking, moderately-dipping mineralised zones are present within an area measuring 1,200 metres long and 350 metres wide, including three newly-recognised features to the north of, and above, the Marban mine.

The latest assays continue to support our base-case valuation for the Marban project and Niogold, albeit within these currently pessimistic times. Also supporting our valuation is Niogold's intention to continue exploration in 2009, commencing with a drill programme in the first quarter designed to test the eastern and vertical extents of the Marban gold system. The work is expected to lead to a formal resource estimate later this year.”

The high grade encounters over smaller widths within longer intercepts of lower grade mineralization is consistent with the geology of the largest producing mines in the area. Although the widths are generally narrow, the abundant access provided by the previous mines drifts and adits means a much lower cost and shorter timeline to production startup.

Since 2006, NioGold has completed over 45,000 meters of drilling on the Marban property, spending a total of $7 million on exploration. NIoGold’s goal for 2009 is the establishment of a N.I. 43-101 resource of at least 1 million ounces of gold.

Camflo West Property

NioGold’s portfolio of advanced exploration targets includes the Camflo West property which lies immediately northwest of the Marban Block. The Camflo mine, two kilometers to the southeast of the Marban Block, produced 1.9 million ounces of gold during its productive years. A historic non-43-101 compliant resource calculation estimates 23,000 ounces still present in the Audet zone.

Minor exploration of the Camflo property continues to turn up promising grades, though a more thorough drill program will be required to significantly expand or establish any 43-101 compliant resource. So Camflo is more or less an ace up the exploration sleeve for NioGold.

Summary

NioGold Mining currently has 61.6 million shares outstanding. In addition, the company has 3.6 million share purchase options outstanding, with exercise prices ranging between C$0.28 and C$0.47 and averaging C$0.345. A total of 1.75 million agent’s compensation warrants are outstanding, exercisable at C$0.45 and 11.0 million share purchase warrants exercisable at C$0.70 are outstanding. 

If fully exercised, the options and warrants would bring NioGold’s share total to 78.0 million shares and would provide the company with $9.75m in cash.

The shares of NioGold Mining are widely held, with no one shareholder controlling a ten-percent interest in the company. Mr Iverson is the largest shareholder amongst the company’s directors, with a holding of 337,000 shares, or 0.5 percent. Combined, directors and officers of NioGold hold less than one percent of the outstanding shares.

Visit NioGold online at http://www.niogold.com