Tonnage
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Welcome to the McFaulds Lake HUB on AGORACOM
Discuss the various junior resource companies within the McFaulds Lake Area
Message: Time like these
I've seen some fine-past examples of case-optimistic Noront tonnage projections, and believe it is important to examine all realms of possibility when considering DE1. According to Richard Nemis as per D12 (Thank you kindly), DE1 has been recently noted as 1 to 10 Million Tonnes and although I would consider ‘some estimates’ are likely more probable than others, this alone suggests that what is possible is not yet out of the question.
Yesterday’s discussion brought to mind a Genuity report I’ve read from January 10 "PRECEDING" Jan 28 results ('Noront Resources Ltd.: Highest Grade Hole to Date Encountered at Eagle One'). I will post some excerpts from this in the event they may add substance to the figures which are being tossed around. However, do keep in mind this is pre Jan 28 and I am certain Genuity has increased their base tonnage and grade estimations since then (unfortunately, I haven’t been able to find a more recent report as detailed as this one).
“Early geometry suggests a 2-3Mt size deposit thus far – Based on plots of the drill holes as disclosed via information in the company news releases, we see the variably mineralized, steeply dipping host intrusive body as having a down plunge strike length of ~200m, a dip length of 60 to 225m (to depth), and thicknesses ranging from <10 to 100m. Our preliminary estimate is 2.4mm tonnes with an average grade of approximately 2% Ni, 1% Cu, 1 g/t Pt, and 4 g/t Pd (assays for 10 holes are pending). The nickel sulphide mineralization appears to be open to some extent to the south and potentially open locally to depth.”
“…using the gross metal value and geological estimation approach along with other methods and assumptions below and in Exhibit 13. We use long-term metal price assumptions of US$2.00/lb Cu, US$8.00/lb Ni, US$1,500/oz Pt, US$400/oz Pd, US$900/oz gold, and US$16.00/oz Ag (all US$).”
“We plotted the Eagle One drill holes and used the section approach to arrive at our estimation of 2.4Mt at average grades of approximately 2% Ni, 1% Cu, 1 g/t Pt, and 4 g/t Pd (maximum influence +/- 25m along strike). We used a specific gravity of 5.0 for massive sulphide mineralization and 3.0 for all other mineralization types. This equates to a US$496/t gross metal value and an in situ gross metal value of our estimated 2.4Mt size of the Eagle One deposit of US$1.19 billion using our long-term metal price assumptions. We use 7% of this in situ gross metal value as our rule-of-thumb rough estimate of the Eagle One deposit value of ~US$83 million for the current size of Eagle One.”
“We appreciate the early nature of the Eagle One discovery and that it is difficult to arrive at a valuation given the dynamic exploration stage the project is at where one drill hole could have significant implications to valuation. As shown in Exhibit 13, for our conservative, base, and optimistic cases, we have used 7% of gross metal in situ value for the potential resource we have estimated (as discussed above). For the base and optimistic cases, we add 1.6Mt and 5.6Mt of upside potential for these respective cases and use higher gross metal values that would involve more massive sulphide mineralization ($960/t and $1440/t –essentially double and triple the grades for our modeled 2.4Mt at Eagle One).”
The Jan 10, 08 conservative-case market valuation for 'DE1 Alone' by Genuity was $83.3M, the base-case valuation was $107.5M, and the optimistic-case valuation was $564.5M.
These figures should be helpful to anyone who would seek to replicate Genuity’s estimations with additional subsequent data. Of note, the share price did seem drawn toward the $5.50 mark October to December which seems to promote that price initially approaches an analyst blue sky estimate and will then drift toward the minimum of that range if not provided with further catalysts.
At the present time, I believe there are more important things to worry about than DE1 tonnage, and tonnage of DE1 is not what is holding the share price above $5. If Richard Nemis thought the 43-101 was advantageous to our current position it would be here. For the time being, I really feel that unless a 43-101 contained more than 7MT at respectable grade, it would certainly be detrimental to the Market Capitalization and share price.
Sure there is blue sky, but it is also blue sky that is holding us up. Stay optimistic but remain objective.
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