Return of the Devil...Okay, since I started this thing, I thought I would summarize the feedback. Thus far, the issues identified are:
1. Too many projects and not enough focus on WL;
2. Too many shares when fully diluted;
3. The promotion issue – not enough organization and focus;
4. Market capitalization – concerns of NOT just being a 4- bagger as opposed to a 10-bagger or higher
5. The complex geology of WL;
6. Drilling progress: number of drills , and drill time;
7. Sector concerns – what would happen if another Bre-X story resulted in this bull market.
I would suggest that issues # 1 and 6 are similar expressions of a common theme, as are #s 2 and 4. Thus I will group them together below.
1 & 6 – I responded to Norgil’s concern about the number of projects NOT has ongoing by stating that NOT is prepared to farm out Mexico projects, is going to let Cadillac do the work on Burnt Hill, and did acknowledge that staffing shortages will prevent them from working many projects at once. In fact, Nemis emphasized that WL is their core project, and their current work program for WL seems to reinforce this. He also stated that had to use find a use for the $5million of the super flow-though funds, so they are forced to look for other projects because they cannot spend it on underground exploration at WL.
With regards to drilling time, Nemis mentioned during the SHS meeting that we could expect a total of 5 weeks per DDH - drilling (2 weeks) and lab analysis (3 weeks). The issues of drilling progress and the number of drills, although perhaps less than satisfactory, I suggest neither puts into jeopardy our fundamental interpretations of the potential of the WL project, nor calls into question the competence of Management.
2 & 4 – Market capitalization. This is an interesting point. What is the IPV of WL? It was suggested that NOT is only a 4-bagger before takeover, but I do find this figure quite conservative. What are your thoughts about the value per ounce of gold in the ground, and what are we anticipating in terms of a resource? < 1 million oz? 3 million oz? Or >10 million oz? I know this speculation at this juncture, but does anyone have an idea on what a reasonable resource range (minimum and maximum) could be given what we know to date? Nemis mentioned the closest mines were 50kms away. Does anyone know names of these mines or what they produced? Obviously what I am getting at here is what we could expect for an SP if NOT hits it big. Is it even possible that NOT could be worth $100/share, or could it only be worth no more than $10/share? Anyone care to speculate on a mine model, tonnage, grade, etc?
3 – Promotion. We probably would all agree that this issue is of concern and has been expressed to NOT management, particularly by MMN. Many of you have confidence that Nemis will sort this out, and my impressions from the meeting is that he recognizes the value of promotion and the necessity to improve NOT’s IR operations. If NOT finds a world class deposit at WL, this story will make itself known to the investing public, so in that case, even if NOT’s IR flops, in the final analysis, it probably will not matter a great deal. However, I suggest this issue is more of a concern if NOT finds only a small to medium size deposit at WL, but I do not think this issue alone can unravel NOT’s story.
5 – Complex Geology. This is an issue. Nemis stated outright in the meeting that it is a “problem”, and I suggest that this is our biggest potential pitfall. There are numerous ways of explaining in geological terms, why the geology at WL might be as discontinuous or complex as it is. One of which is that the original zone of mineralization was shattered (broken-up) by a later geological event. Another is that the mineralization at WL is secondary – there was earlier geological event that resulted in a highly fractured zone void of nay mineralization, but a subsequent event forced mineralized fluid into these fractures. The result, and this has been seen many times before, are very high grade intersections but no continuity. In other words, it is possible to have DDHs intersecting high grade mineralization, but yet lack or be unable to find a continuous mineable orebody. My father is a mining engineer and warns that this complexity is far less than ideal. He recounted similar stories when the ramp takes out all the mineralization, or when testing around a spectacular DDH proves unable to duplicate results.
6 – Sector Concerns. If something like Bre-X or any other sort of fraud were to happen again, probably all of our mining stocks would be hit hard, so this concern, although justified, is not specific to NOT.
Btw, I have worked on a drill rig in the Artic, and have also worked on exploration projects in Central Africa with active diamond drill programs. Diamond drilling is very time consuming and labour intensive operation. It can take hours to cut though 10 ft of rock, depending on the hardness of what the bit is spinning in, and if you happen to drill through a fracture, lose water pressure, and do not stop the drill in time, you can burn out the bit or actually ‘weld’ it to the rock. The former can involve many hours of labour to change the bit depending your depth (because you have to pull all of the rods), whereas the latter may require you to abandon the hole along with whatever number of drill rods that get left in the hole, depending on where the rods ‘break’ (which rods unscrew) when you put the drill and reverse and raise the drill head… Not fun.
At any rate, I appreciate your responses to my original post and hope that we can keep this dialogue open with further discussion. I plan to try and research the mining history and geology around WL, as I think this would be useful in further evaluating WL’s potential. If anyone has information on this, I would greatly appreciate receiving whatever you can give me.
Regards,
Bentonstocks