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Additional information

Additional	Information
Market:	TSX-V, OTCBB
Sector:	Gold Mining
Epic:	NOX
News:	Latest news
Web Site:	NioGold Mining
Other Articles:	27-07-201006-07-201001-06-2010

NioGold Joint Venture with Aurizon Set to Build on Potential at Marban

by Karl Loomes

Since acquiring its first initial claims in Quebec in 2004, NioGold (TSX: NOX, FSE: NG1) has seen rapid progression over the past six years, now holding three key properties, of which two NI 43-101 compliant resource estimates have been completed. Their near and medium term objectives are clear; to significantly increase the asset value through exploration, with the eventual aim of bringing on board a major partner for development. Just this month the company confirmed a joint venture with Aurizon Mines for the development of Nio’s the Marban Block property. With this intention of increasing asset value, and by implication, the value of the company itself, there is a lot of potential for positive newsflow over the course of their ongoing exploration program.

NioGold is a Canadian based gold exploration company, with extensive land holdings in Northern Quebec, adjacent to 8 currently producing gold mines. The company has a market capitalisation of C$18 million and no debt. Its key assets include the Malartic – Val-d’Or Project located along ‘Canada’s Golden Highway’, the Montviel Nb-REE property in the Northern Abitibi region of Quebec, and the early stage Pump Lake project, located near the Mt-Laurier uranium district. All told, this is a collective land holding of 115 square kilometres covering a 20km stretch of gold mineralised fault.

The Malartic - Val-d’Or project is located in the Malartic Gold District in western Quebec, Canada, midway between the towns of Val-d’Or and Malartic, in the southern portion of the Abitibi greenstone belt. The property is the result of NioGold’s consolidation of four contiguous properties in the Malartic mining camp (Norlartic, First Canadian, Marban, and Gold Hawk) collectively known as the Marban Block, and currently consists of 42 mining claims and 3 mining concessions that cover 10 square kilometres. Val-d’Or and Malartic are both fully servicing mining towns, and the projects are in close proximity to gold milling facilities, a provincial highway, railroad, power lines, telecommunication systems and an experienced labour force. The projects are also located in close proximity to three currently producing mines (Agnico-Eagle’s Laronde, Lapada and Goldex Mines) and adjoins one of Canada’s largest developing gold projects, Osisko Mining’s Canadian Malartic project, which has a defined 9.2 million ounces of gold.

The Marban Block property encompasses six distinct gold deposits, namely the former Norlartic, Kierens and Marban mines and the North-North, North and Gold Hawk Zones. Past production from the Norlartic, Kierens and Marban mines amounted to 600,000 ounces of gold. A NI 43-101 compliant resource estimate was carried out on these three properties, considering near surface mineralization (via a lower cut off grade) conducive to open pit mining for the Norlartic and Kierens mines, while considering deeper mineralisation (via a higher cut off grade) for the Marban mine.

At a cut off of 2.5 grams per tonne (g/t) of gold, the report showed an indicated resource estimate at Marban of 1.24 million tonnes, grading 4.55g/t gold for an indicated resource of 181,000 ounces of gold. In addition, the report showed an inferred resource at Marban of 868,000 tonnes grading 4.08g/t gold, for an inferred resource of 114,000 ounces of gold. Considering the lower cut off grade of 0.5g/t of gold, to tabulate for resources less the 200 metres below the surface, the report showed Kierens has an indicated resource of 1.44 million tonnes grading 2.19g/t gold (101,000 ounces of gold), while Norlartic has an indicated resource of 5.42 million tonnes grading 1.82g/t gold, for some 316,000 ounces of gold. The report also showed an inferred resource for Kierens of 1.78 million tonnes grading 1,73g/t (99,000 ounces of gold), and an inferred resource at Norlartic of 3.2 million tonnes grading 1.44g/t (148,000 ounces of gold).

In addition to the NI 43-101 resource estimates for Norlartic, Kierens and Marban, historical resources of 170,000 ounces of gold are defined in the North-North, North and Gold Hawk Zones, although this mineralisation has not yet been fully evaluated by NioGold. In 1989, Aur Resources estimated the North Zone had over 136,000 tonnes of resource grading 6.86g/t gold (30,000 ounces of gold), estimated the Gold Hawk Zone veins 1 and 2 had over 254,000 tonnes of resource grading 8.57g/t (70,000 ounces of gold) and estimated the North-North Zone had over 754,000 tonnes of resource grading 2.85g/t (70,000 ounces of gold).

The latest NI 43-101 compliant report concluded that the project has reached the level whereby the potential economic viability should be examined, and recommended a preliminary economic assessment of the open pit and underground potential. The report estimates the cost of this assessment to be around US$65,000 (C$67,450). With this in mind, the company plans an aggressive 100,000 metre drill program over the next two years, in order to expand the current resources and to test priority exploration targets over the land holdings. Nio also notes that most major deposits on this belt have been mined at 1,000 metres or more, and as their own deposits have so far only been mined to more shallow depths, believe there is a lot of blue sky potential at their properties for resource estimates to multiply, as drilling penetrates below 500 metres.

As previously highlighted, earlier this month Nio announced the signing of a definitive option and joint venture agreement with Aurizon Mines Ltd on the Marban Block property. Under the agreement, Aurizon can earn a 50% interest in the Marban Block, subject to underlying royalties, by complying with several conditions.

Aurizon must incurring expenditures of C$20 million over three years, of which C$5 million is a firm commitment to be spent in the first year. Aurizon must complete an updated NI 43-101 compliant mineral resource estimate, and must make a resource payment equal to the sum of C$30 (or C$40 if the price of gold is then above US$1,560) multiplied by 50% of the number of total gold ounces in the Measured and Indicated resource categories plus C$20 (or C$30 if the price of gold is then above US$1,560) multiplied by 50% of the number of total gold ounces in the Inferred resource category. Aurizon can then increase their stake to 60% by delivering a feasibility study, and by a further 5% (cumulative 65%) by arranging project financing for capital expenditures estimated by the feasibility study to place the project into commercial production.

NioGold will be operator during the initial earn in period and Aurizon will become operator after their initial 50% interest has been earned. Rock Lefrancois, President of NioGold, said “NioGold has reached another milestone in the development of the Malartic project by joining forces with a proven and growing mine developer and explorer in the Abitibi.  The partnership provides the capital and technical support required to advance the Marban Block property into potential mine development over the next three years.  The $20 million expenditures will be mainly directed to drilling in an effort to increase the resources, with first priority given to the Marban deposit near surface potential”.

Having secured this partner to build on and develop exploration at Marban, it is hoped the aggressive drilling program over the next two years will not only expand on current resource estimates, but in doing so add significant value to the project. If this can be achieved, Nio look set to continue their rapid progress and development into the future.

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