Geological & Financial 1419 – 133A Street
Consulting Services Surrey BC V4A 6A2
Tel/Fax 604-541-9161
MARCH 2001
INVESTMENT COMMENT - UPDATE
HOW SWEET IT IS!
Starfield Resources (SRU- CDNX) has delineated over 32 million tonnes of mineral resources and receives recognition as a “favoured company at the Resource Definition” status from BMO – Nesbitt Burns.
We welcome BMO – Nesbitt Burns identification of this significantly undervalued opportunity which has almost tripled in gross in situ value to $5 billion from our first INVESTMENT COMMENT in October 1999. We remind investors who have been following this continuing positive developing mineral resource that drilling will recommence this month!
STARFIELD RESOURCES (SRU – CDNX)
Recap
Starfield Resources acquired the Ferguson Lake Nickel-Copper Prospect in Nunavut Territory, Canada in 1999, after it had been held by INCO (N - TSE) since they discovered it in the early 1950’s. Starfield has spent over $6 million directly on the property in exploration and further delineation of the mineral resource, increasing INCO’s calculated resource almost five fold to over 32 million tonnes.
Drilling of the geophysical anomalies associated with the 18 kilometre magnetic trending mineral hosting ultramafic unit continues its impressive success ratio (1:1 geophysical anomaly: sulphide mineralization). As well as delineating a further 800 metre strike length of the West Zone, part of the 2.2 kilometre geophysical anomaly identified in earlier 2000 geophysical surveying and in previous INVESTMENT COMMENTS, the company added another 3 million tonnes of higher grade resource to the 4.5 million tonnes previously reported. In total resources have been increased to 32.4 million tonnes grading 0.87% copper, 0.59% nickel and 1.26 grams per tonne Platinum Group Metals (PGM) with the high grade for the West zone at 7.23 million tonnes grading 1.08% copper 0.78% nickel and 1.95 grams per tonne PGM.
This resource includes 1.2 million ounces of palladium and platinum which represents approximately 20% of the annual consumption of palladium, a consumption that does not seem to be satisfied by current known reserves of the precious metal.
These higher grade resources enhance the viability of developing a mineral extraction operation by reducing the pay back time of capital and increasing the Net Present Value of the project. An initial scoping study conducted by GeoFin Inc. has indicated that the project warrants a detailed scoping and pre-feasibility report.
With a gross in situ mineral value of $5 billion Cdn. and a strong supportive territorial government, Starfield has attained recognition for its dogged pursuit of the Ferguson Lake Project. Of the five “non production” projects reported in BMO – Nesbitt Burns’ “Mining Exploration – Palladium and Platinum Prospecting Programs Proliferate” Report, Starfield’s project is the only one that is 100% owned by the company and showed its undervalued status, as the lowest Gross in situ value to market capitalization.
Even the BMO – Nesbitt Burns analyst acknowledged this anomaly by noting, “An obvious observation is that the market is placing a higher value on some of the more speculative situations that have provided generally mixed results to date, than it is on companies with more positive results or tangible resources.” This quote fits the Starfield’s Ferguson Lake project completely as it continues to report consistent positive results.
CURRENT RESULTS
Starfield completed its Year 2000 drilling program on an extremely high note with the last three drill holes ( FL00-65, FL00-66 and FL00-67) which cut the zone with the deepest intersections and significantly the highest grade intersections yet found on the property including 8.8 metres grading 0.68% copper, 0.96% nickel, 0.11% cobalt and 2.64 grams per tonne PGM; 7.8 metres grading 1.22% copper, 0.88% nickel, 0.1% cobalt and 2.48 grams per tonne PGM; and 11.84 metres grading 1.71% copper, 0.89% nickel, 0.1% cobalt and 2.48 grams per tonne PGM (selected zones from each hole).
The current estimate to 32.44 million tonnes has a gross value of over Cdn $5 billion for the copper nickel cobalt palladium and platinum resource (LME February 27 2001 prices). The higher grade resource (7.3 million tonnes in the West Zone and 1.3 million tonnes in the East Zone) has a value of over Cdn$ 195 per tonne.
Not only does the main mineralized zone remains open to increasing tonnage and grade along strike and to depth, but more importantly the higher grade zone that was being intersected at the end of last season’s drilling remains open to expansion in the upcoming drilling program.
Substantial optimism continues to be justified as the Ferguson Lake Project “stays the course” towards becoming a world class deposit. With drilling set to resume in the next month and the major brokerage firms taking an significant interest in the project, an opportunity in Starfield Resources for exposure to the base and precious (PGE) metal markets and the rewards of a “new discovery” is available. |
