A lot of people are focused on the cutbacks and layoffs by Vale, Xstrata, etc., in the mining of nickel. The news attributes this to the decline in the price of the metal from over $20/lb. to now under $5/lb.

But there is another factor that is not being discussed, and that is the cost to mine the resource. A big part of that cost is related to the grade of nickel being mined, and the inclusion or exclusion of valuable byproduct metals along with the nickel that is being mined.

If they were actively mining Eagle 1 right now, there would be no cutbacks of production. The reason is because the grades of nickel are very high, and the additional "byproduct" metals are also of high grade and great value (platinum, palladium, copper).

The ore they are mining out of Sudbury is substantially lower in value than what they could be mining at Noront's Eagle 1 project. What Noront presently lacks, and which we need to prove up, is SIZE.

In other words, our very high-grade deposits are attractive. But what is needed to justify the expense of mine development is a larger amount of total deposit of what we've already discovered. By finding another high-grade deposit like Eagle 1 (and also by expanding the size of Eagle 1 by the deeper drilling they are presently doing) we can achieve this objective.

Even in a bad economy, if a company can come up with a way of providing something society needs at a more attractive price, that company can make money and do well. Our management's stated goal is to drill high priority targets this winter. This is the best strategy for proving up sufficient-sized, high-grade ore bodies that would justify developing a mine that is more economical and profitable than what they have in Sudbury.