As you know, their new price target with the new the developments is $2.00.

This is devired as followed:

"Therefore, we have increased our conceptual DCF8% model to capture a portion of this upside – underground mine/direct shipping scenario – for an operating 0.6x NAV of $220 million or $1.33/share (was $110 million or $0.69/share). We also ascribe $0.50/share for the Blackbird chromite deposits based on comparative analysis and $0.10/share for adjusted cash. We continue to recommend NOT as a BUY with an upgraded target of $2.00."

Disclaimer: I am by no means a Financial guru - I have no idea what DCF8% means nor am I able to ascertain what Noront's NAV is. (I guess I could spend some time scrutinizing their balance sheet for their assets and liabilities but...Nah)

I am also going to make a bunch of assumptions here and offer a very simplistic view of how one (other than Genuity) might value Noront shares. (again very rudimentary here)

Genuity has valued Eagle one at $1.33 per share assuming that Noront's two new mineralized zones will have +5 meters of massive mineralization but less than 25 metres. We already know that Noront has already presented it is likely that E1 will be tripled in size. We know when the NI 43-101 on E1 was released, the in-situ value in CDN$ was approx. $2.2Bn. Nickel prices then were higher than they are now but again valuation was based on a trailing average of 5 years worth of Nickel prices. Therefore, as much as Nickel prices have come off their highs, these current lower prices will shave maybe 16.5% off the in-situ valuation. I could not find the actual price per nickel used in the 43-101 valuation but lets ASSUME that on average the price of nickel was $17.00 each year. Over the last 2 years nickel has been what on average - $10? Therefore, $17+$17+$17+$10+10 = $71.00/5 = $14.20. ($14.20/$17.00 = 83.5%)

So, E1 today instead of being worth $2.2Bn is only worth $1.84Bn. Again, ASSUMING that as per Noront's expectation E1 has tripled in size, todays Gross Metal Value of E1 is $5.52Bn. (ASSUMING the same grades of course) $5.52Bn/165Mn shares outstanding F/D is $33.45/share. Obviously Genuity is only valuing our shares at 3.97% of in-situ value ($1.33/$33.45)

Let's talk Chromite. Genuity has assigned a value of $0.50 per share for Noront's BB deposits. Nobody can definitively assign a value for the Chromite because there is no resource estimate. (come on Q3) Another disclosure by Misly1, I am far from a Geo. Here is another assumption that I will make - Going to be consrevative here and guess that we will only have 1/5 the Chromite resource that FWR will have. It has been said that FWR will have 40Bn worth of Chromite so Noront for the purpose of my post will have $8.0Bn Chromite.

Genuity stated a $0.10 per share cash component but I am going to discount this completely and say zero. (Let alone all other vast land holdings, targets etc, etc)

Here's where I'm going with this.

We all have kept hearing that more additional high grade nickel is a must to make this whole district viable. The tripling of E1 will make this happen. This will open up the true value of all discoveries as a cumulative. I as an investor will not be valuing my holdings in Noront the same way that Genuity has.

Here's why Genuity is opportunistic. Their target price of $2.00 probably sounds pretty appealling to many who have recently bought or have been holding for some time - under water. Genuity says $2.00 is a good target price, could be right? WRONG.

When news comes out and if you subscribe to Genuity's $2.00 valuation and sell, I am sure they would thank you for your $2.00 shares because even then, Genuity will never be able to get $2.00 agian. (let alone you getting them back at $2.00).

Looking forward to a great week.

Milsy1

Note: $5.52Bn + $8.0Bn / 165Mn shares F/D = $82.42 per share. (assign your own buy-out percentage)