As a general rule, the most successful man in life is the man who has the best information
The adjoining Cadillac-Malartic-Val-d'Or gold camps have produced 45M oz gold with more than 50 previous producing mines and 7 currently operating mines.
NioGold Mining Corp. (TSX: V.NOX, Stock Forum) is an extremely compelling gold play, management has a well thought out plan for success and they are operating in the heart of one of the most prolific gold producing areas in the world – 170 million ounces of gold have been pulled out of the Abitibi gold belt.
NioGold has consolidated a large 120 km2 land package in the heart of the Cadillac, Malartic and Val-d’Or gold mining camps. The Cadillac, Marlartic and Val-D’or gold camp projects have area mine production of 45 million ounces of gold.
The contiguous Marban Block, Malartic Hygrade, Malartic H and Camflo West properties, collectively named the Malartic Block, cover a 13 km stretch of a major gold mineralised structural zone known as the Norbenite-Marbanite.
The Marban Block property encompasses six distinct gold deposits, namely the former Norlartic, Kierens (First Canadian) and Marban mines and the North-North, North and Gold Hawk Zones.
Since 2006 drilling (45,000 m) and historical data compilation on the Marban Block property has proven up Indicated resources of 598,000 ounces gold in addition to Inferred resources of 361,000 ounces gold.
The projects are located close to the full-service mining towns of Val-d’Or and Malartic. There is easy access to gold milling facilities, a provincial highway, railroad, power lines, telecommunication systems and an experienced labor force. Having all the necessary infrastructure and a trained skilled workforce nearby facilitates cost effective exploration and development.
Quebec is consistently ranked as one of the best places to explore for and develop a mine. Quebec supports its mining industry by maintaining a mining tax system designed to stimulate investment. A company operating in the province could receive up to 38% in tax credits for work performed in the field.
In July 2010, NioGold successfully negotiated an important partnership with Aurizon Mines Ltd. (TSX:ARZ) to further develop the Marban Block property gold resources. A three-year $20M drilling program (200,000 meters) on the Marban Block is currently underway with a $5.9M program approved for the first year.
Aurizon can earn a 50% interest in the Marban Block by spending $20 million over three years - $5 million must be spent in the first year. Aurizon also has to complete an updated resource estimate, and based on that resource estimate, make payments equal to $30 (or $40 if the price of gold is above US$1,560 per oz.) multiplied by half the number of gold oz. in the measured and indicated category, and a further $20 (or $30 if the price of gold is above US$1,560 per oz.) multiplied by half the number of gold oz. in the inferred category.
Aurizon can then earn an additional 10% interest by completing a feasibility study and a further 5% - for a total of 65% - by arranging financing to bring the project into production.
NioGold will be the operator during the initial earn-in period but Aurizon will become the operator after it earns its 50 percent of the project. The work program at Marban will be prioritized towards increasing the resources that can potentially be mined by open pit.
Michael Gustin, of Mine Development Associates in Reno, Nev., in December 2009, prepared a resource estimate on the Marban Block for NioGold. The report outlined indicated resources of 598,000 oz. gold and inferred resources of 361,000 oz. gold.
Gustin’s report divided Marban’s resources between open pit and underground. At a 0.5 gram gold cutoff grade open-pit indicated resources were 6 million tonnes grading 1.6 grams gold for 303,000 oz. contained gold, and inferred resources of 4.4 million tonnes at 1.3 grams gold for 179,000 oz. contained gold.
Underground resources used a 2.5-gram gold cutoff grade and were 2.1 million tonnes at 4.3 grams gold for 296,000 oz. contained gold in the indicated category, and 1.5 million tonnes grading 3.9 grams gold or 182,000 oz. gold in the inferred category.
Most major deposits on this belt have been mined to plus 1,000 meters. Niogold’s were mined at much shallower depths (maximum 500 meters) so the company believes there is a lot of blue sky potential on their properties for resource estimates to increase as drilling penetrates below the 500 meter level.
Conclusion
NioGold has consolidated a large land package in the heart of an established gold mining district (their landholdings are located along Highway 117, a stretch of road called the Golden Highway because it links a large number of current and historic gold mines, gold development projects and gold milling facilities) and has attracted the attention of a deep pocketed partner committed to building shareholder value, for both companies, through the drill bit.
Currently there are two drill turning on the Marban Block Joint Venture (JV) property, a third is scheduled to start very early in the new year. The two drills have been working since September 1st and are each drilling roughly 90 meters a day. The average hole depth is 300 meters and the first core went to the lab to assayed at the end of September.
NioGold has several very distinct advantages:
- Management – highly skilled, well known and respected industry veterans
- The Abitibi Greenstone belt is one of the world’s largest archean greenstone belts (over 270 kilometers long) and only 10 percent of it has been explored
- Infrastructure in the area is excellent
- They are operating in mining friendly Quebec
- NioGold has undeveloped gold zones and historic mines giving the company a chance to rapidly develop resources and adding bluesky exploration potential
There is a very large drill program, 50,000 – 60,000 meters, presently underway. I expect results to start flowing very soon and then continue for the foreseeable future.
NioGold and its Marban Block JV should be on every investors radar screen. Is it on yours?