HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Message: Genuity

Genuity

posted on Apr 03, 2008 05:47AM

 

 

 

 

See last page for disclosure and share classification information

 

Noront Resources Ltd. 

NOT-V: $5.30 April 3, 2008 

TARGET: $7.00 

RECOMMENDATION: BUY 

RISK RATING: SPECULATIVE 

Michael Gray, MSc – 604.694.6961 

michael.gray@genuitycm.com 

 

Visual drill results for Double Eagle; Vale 

Inco stakes claims in belt (all figures in C$, unless noted) 

Price (4/2/2008) $5.30 

Total return to target 32.1% 

Shares O/S (mm) 125.4 

Shares F/D (mm) 136.8 

Market cap F/D ($mm) $724.8 

Market value ($mm) 631.3 

0.4 

Debt ($mm) $0.0 

Cash ($mm) $50.0 

FD cash ($mm) $76.3 

$24.0 

Shareholders 

President & CEO Richard Nemis 

Executive VP John Harvey 

VP Exploration Neil Novak 

~9% Sprott Asset Mgmt 

~9.7% Pinetree Cap 

5% Mgmt 

10-day Ave Daily Vol (mm) 

12-mo Burn-rate ($mm) 

NOT-V 

$0 

$2 

$4 

$6 

$8 

Dec Feb Apr Jun Aug Oct Dec 

ic 

 ( 

) 

200 MA 50 MA 

 

Company profile 

Noront Resources Ltd. (NOT-V) is a Canadian 

base and precious metal exploration company 

focused on Northern Ontario and Quebec, 

Canada. Its key asset is the new Ni-Cu-PGE Eagle 

One discovery on the Double Eagle project, 

James Bay Lowlands, Ontario. The discovery is 

attractive, as it represents a rare new nickel- 

copper-platinum-palladium discovery in an area 

that is underexplored.  

 

Highlights 

Double Eagle project update; Vale Inco stakes claims in 

belt – Visual results were reported for the Eagle Two discovery, 

the AT-3 target “Eagle Three”, and the AT-1 target. Vale Inco 

has staked claims in the greater “Ring of Fire” belt. 

Eagle Two results – 13 holes drilled. Seven have intersected 

sulphide mineralization and documented a 75m long zone. 

Chromitite has been intersected in three holes over up to a 

48.4m core length. Assays are pending. 

Eagle Three intersected – Stringer and disseminated 

sulphide mineralization has been intersected at the AT-3 target 

located two kilometres west of Eagle Two. It qualifies as 

another zone we call “Eagle Three” given the sulphide source 

documented. Assays are pending. 

Target AT-1 was a “miss” – This EM conductor failed to 

intersect sulphide mineralization in four holes. NOT’s 

management interprets the EM anomaly source to be at depth. 

Vale Inco joins the Ring of Fire staking fray – We note 

that Vale Inco has apparently staked a land position and 

become part of the “area play”. We are not surprised to see a 

senior nickel miner enter the belt via the staking route.  

Recent visual drill results, albeit without assays, support our 

view that NOT will document new “clusters” of nickel-copper 

bearing sulphide mineralization. We continue to recommend 

NOT as a BUY with a $7.00 target price based on our 12- 

month NAV. NOT is Speculative and suitable for risk-tolerant 

investors only. 

 

 

 

 

 

Genuity Capital Markets  www.genuitycm.com 

416.603.6000  2 

Background 

Events 

Yesterday, Noront Resources (NOT) provided an update on its Double Eagle 

project by reporting visual drill results for Eagle Two and targets AT-3 (Eagle 

Three) and AT-1. 

We also became aware that Vale Inco has staked claims in the greater Ring 

of Fire belt. 

Results 

We have summarized the visual drill results below in Exhibit 1.  

Exhibit 1: Synopsis of visual drill results from April 2, 2008 news release 

Zone / 

Target 

Purpose and 

# of drill holes Results Comments 

Eagle 2  13 holes to test a strong, 

short magnetic-EM target - 7 holes have intersected sulphide 

mineralization described as a“Shear 

Hosted Sulphide Zone” (SHSZ) 

- intersections include semi-massive to 

massive sulphide bands with 

pyrrhotite, pyrite “copper and nickel” 

sulphides 3m, 4.4m, 7m, 8m, 17.8m, 

20.6m, and 21m thick (not true 

thickness) 

- SHSZ has been documented as a 

shallow 30 degree NW dipping zone 

75m long by up to 21m thick “oval- 

shaped body” to a vertical depth of 

190m 

- 5 holes tested the strike potential of 

Eagle Two and were barren 

- Significantly, three holes intersected 

chromitite zones of 20m, 39.1m, and 

48.4m core lengths within “layered 

peridotite” at depth – below the SHSZ 

The sulphide mineralization is described 

as being associated with a fault breccia 

and hosted by a peridotite sill. We will 

especially be interested in the PGE 

assays for these zones along with the 

chromitite zones. All assays are pending. 

 

Drilling to depth is ongoing and directed 

at testing a peridotite-granodiorite 

contact that management believes is 

favourable (Eagle One setting). 

Eagle 3/AT-3 4 holes to test a 

moderately strong 1,000m 

long airborne anomaly – 

coincident ground 

magnetic-EM response 

- all four holes intersected minor to 5% 

stringer to disseminated sulphide 

mineralization (including chalcopyrite) 

in a steep north dipping peridotite sill 

- hole 1G10 - 71.1m of “minor 

sulphides” 

- hole 1G12 – 33m of “5% sulphides” 

- hole 1G14 – 9m of “1-2% sulphides” 

- hole 1G18 – 74m of “1-5% sulphides” 

Management interprets the sulphide 

intersections to have explained the EM 

anomaly associated with AT-3. 

 

We will look for PGE assays given the 

extensive disseminated mineralization. 

 

AT-1 4 holes to test a strong, 

short EM target near the 

west Fancamp (FNC-V: 

$2.10, Not Rated) property 

boundary 

- All holes encountered the peridotite.  

- None of the holes intersected sulphide 

mineralization that would explain the 

EM conductor. 

- drilled to a vertical depth of 150m 

Borehole EM will be conducted to test for 

off hole conductors 

 

Deeper detection EM ground surveys will 

be carried out to resolve this target 

Source: Noront news release, Genuity Capital Markets estimates 

 

 

 

 

 

Genuity Capital Markets  www.genuitycm.com 

416.603.6000  3 

Impact – Mixed – assays will be important 

It is positive that a third sulphide-bearing zone, “Eagle Three”, has been 

intersected. However, massive sulphides (potentially high-grade) have not 

been documented in this target. Platinum and palladium assays from Eagle 

Two and Eagle Three will determine how significant these new zones might 

be.  

Discussion 

 

We note that the April 2, 2008 news release is a departure from Noront’s 

past drill hole disclosure, where each drill hole was described in more detail. 

This detail included the geological units (and intervals) and mineralization 

(and intervals).  

 

Short -term catalysts 

1. Assays for Eagle Two and Eagle Three.  

2. Ongoing drilling of Eagle Two and Eagle Three with a third drill being 

brought in to test target AT-5 and other targets. 

3. Resource estimation of Eagle One. 

Recommendation 

Recent visual drill results, albeit without assays, support our view that NOT 

will continue to document new “clusters” of nickel-copper bearing sulphide 

mineralization on the Double Eagle Ni-Cu-PGE project.  

We continue to recommend NOT as a BUY with a $7.00 target price 

based on our 12-month NAV. NOT is Speculative and suitable for risk- 

tolerant investors only. 

 

 

 

 

 

Genuity Capital Markets  www.genuitycm.com 

416.603.6000  4 

Member of the Investment Dealers Association of Canada and the Canadian Investor Protection Fund 

Participating Organization of the Toronto Stock Exchange and Toronto Venture Exchange 

Analyst’s Certification 

I, Michael Gray, hereby certify that the views expressed in this report accurately reflect my personal views about the subject 

securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange 

for expressing the specific recommendations or views in this report. 

THE FIRM THAT PREPARED THIS REPORT MAY NOT BE SUBJECT TO U.S. RULES WITH REGARD TO THE 

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Out of 116 stocks in the Genuity Capital Markets coverage universe, the ratings distribution is as follows: BUY (59.5%), HOLD 

(37.1%), SELL (3.4%), Under Review (0.0%), Restricted (0.0%), Tender (0.0%). Distribution of ratings is updated the first of 

every month. 

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Genuity Capital Markets  www.genuitycm.com 

416.603.6000  5 

Share Classification 

NV – non-voting shares RS – restricted voting shares SV – subordinate voting shares UN – units 

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Genuity Capital Markets USA Corp. is a U.S. registered broker-dealer and subsidiary of Genuity Capital Markets. Genuity Capital 

Markets USA Corp. accepts responsibility for the contents of this research report, subject to the terms and limitations as set out 

above. U.S. residents seeking to effect a transaction in any security discussed herein should contact Genuity Capital Markets USA 

Corp. directly. 


Apr 03, 2008 05:51AM
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