NioGold is focusing on the Abitibi gold belt in Quebec
NioGold Mining acquired two key mineral projects in the prolific Abitibi gold
belt, just northwest of Val d’Or. The acquisitions, during 2005 and 2006,
preceded a major increase in the price of gold and other metals, putting
the company in a favourable position to capitalise on the run-up in gold.
NioGold’s other projects give it exposure to uranium and base metals. The
company’s team has experience with precious metals in the region.
The Marban Block is the company’s most advanced project
NioGold is actively drilling on its Marban Block project, which currently
supports a NI 43-101-compliant mineral resource of 342,000 ounces at the
adjacent Norlartic and Kierens deposits, based on an indicated and inferred
resource of 3.85 million tonnes, averaging 2.7 grams of gold per tonne. The
company has excellent potential to expand this resource at depth and along
strike, and it has several other deposits with significant mineral resource
potential. NioGold plans a major exploration programme on the project
this year. The Marban Block represents over eighty percent of our estimated
C$10.1m of total exploration assets.
The Camflo West property enhances NioGold’s position in the district
The company also holds a 100-percent interest in the Camflo West property,
which lies immediately northwest of the Marban Block. The property contains
several gold occurrences and one, the Audet zone, contains a modest historical
gold resource. NioGold plans an active drill programme on the property
this year.
NioGold also has early-stage projects in Quebec favourable for uranium and base metals
The company is planning a significant preliminary exploration programme on
its Pump Lake project, southeast of Val d’Or. NioGold believes the property
has geology comparable with the Olympic Dam-style iron oxide-copper-gold
class of mineral deposits, with potential for huge, polymetallic deposits.
Exploration risk remains high
Although NioGold has a modest mineral resource delineated on its key
project, successful development depends on further exploration success, and
a high proportion of the company’s valuation is locked up in this exploration
potential. Assessing fair value for Marban Block and NioGold is therefore
difficult and subjective. As with any exploration company, there is a significant
degree of risk associated with the potential investment rewards. Further
exploration may not delineate sufficient economic mineralisation to support
our base hypotheses.
Our core valuation of C$0.21 exceeds the current C$0.19 share price
We assess NioGold’s current value at C$0.21 per share, with significant
potential for appreciation with exploration success. Our optimistic scenario
yields a value of C$0.47 per share, highlighting the exploration potential of the
Marban Block. Continued development suggests valuations as high as C$0.93
per share, in the post-permitting environment. The company’s other prospects
offer further upside potential.
