The question for investors now is BUY, SELL or HOLD? A few days ago, I decided to hold and in fact bought a few more on Friday. The following are some reasons for the decision and comments are always welcome.
GEOLOGY & GEOPHYSICS
Firstly, I'm not a geologist. The sum total of any knowledge was gained from two elective course credits (one by correspondence and summer school) over 35 years ago from Queen's University. I know absolutely nothing about most of the subjects which have recently been discussed and argued on this thread.
However, the geology that has concerned me is the batholith or pluton to the southeast of NWI's discovery zone. No one has talked about it but it's presence was indicated when NWI updated their website (click properties, click Lac Rocher, click magnetic targets - airborne EM.) The bottom photo is Airborne 1 and shows a magnetically barren area to the southeast with Lac Rocher as the the northern edge above which there is some magnetic expression. A friend in Quebec City who has a geology background and knows the area well, confirmed that government maps including map 32K09 from MRN clearly show a batholith. It is called Massif de Nipukatasi and is described as post tectonic - it formed after the surrounding rock. Looking at NWI's Airborne 1, it appeared their prospect was not beside but on rather on top of it. How could this be? It's like finding a rose growing through freshly-laid concrete. Mines are commonly found around a batholith such as Raglan but not on top.
In the last few weeks, I've heard several possible answers. My friend in Quebec City has a theory that the mafic or ultramafics are remnants of older rock that were "grabbed" by the molten granitic batholith as it worked its way upwards to the surface. He says many remnants exist to the east and by remnant he is talking of an area a kilometer or more in size. This remnant idea has bothered me because the implications might not be good for depth. Not necessarily so, he says, because the remnants to the east have a sharp dip and if NWI's discovery is on a remnant, there could still be good depth involved.
There are several other possible answers such as the batholith having a "mushroom" shape if viewed sectionally, the granitic trunk being narrower than the surface area. The list goes on.
It should also be remembered that Monopros investigated NWI's bulls-eye magnetic anamolies looking for kimberlite pipes. They would have known the overall geology and if they thought pipes were a possibility, that would indicate they thought depth was also a possibility.
Geophysics have also been a question mark but after watching the debate on this thread and a few other tips, I can live with the situation. The top of the rich section obtained in hole 99-1 is at 100 metres vertical depth or over 300 feet down. Both plunge and dip appear to be steep and run under swampy ground with a stream over top. Accepting geo in denver's numbers, the deposit could easily be too deep to register. 1King has mentioned enough possibilities without being critical of his peers to indicate a sizeable deposit could have been missed with geophysical instruments.
No one is saying, "it can't be." We know what they've found and there is sufficient reason to think there could be more.
The Company and Management
I don't personally know management. However, like several others on this thread, I attended NWI's Toronto meeting and had a chance to observe and talk with them. The impression was favourable and in many ways they reminded me of others I've known in the business.
Over the years, I've noticed there appear to be several types of junior mining companies. One type, like NWI, takes on a property based upon a mineralized "showing", good geology, etc and will work the property doing exploratory surveys, trenching, and drilling, etc in an effort to discover an orebody. Management will have a direct financial interest - their own money is involved.
Then there is another type of junior miner. They tend to go for location bets and you'll see their properties located in all the currently appropriate places. Management often will have little of their own money involved but usually they have a large number of unexercised options outstanding. From an investor/speculators viewpoint, you can't necessarily say which type is best but you better know the difference. With the first type, you can risk taking the bet alongside management - with the other, management is not making a bet so you're best to sell into their hype... every time.
In NWI's case, I'm making a bet along with management. The latest OSC insider report shows H.D. Hume sold 226,000 shares to hold 2.3 million while R.R. Galipeau sold 158,000 to hold 496,243 shares. I can live with that and it makes sense. Considering that insiders fully subscribed to last year's rights offering versus only 51% of general shareholders, they can afford to take a profit without affecting their controlling position. Point is, when drilling begins, they'll have their own money on the line just like me. Hate to be small about it but that makes me feel more comfortable.
Watching these guys at their Toronto show I almost envied them. I suspect they were excited but they were also having fun. It may sound corny but I doubt if money is the prime motivator for Hume and a few of the others. They obviously like what they are doing; the pursuit, the chase, and the wheeling and dealing - yet they are getting on in years. The chap selling a Freedom 55 lifestyle on television would be heartsick, but I suspect most people in the room felt as I did.
At this point, the company has done everything they said they would. The road access is complete, a camp established, and drills are on site. It's "last call" for investors for this stage of the project. BUY, SELL, OR HOLD? I'm not betting the farm but the toolshed could definitely go. Somehow, I don't think it will.
Anyway, good luck to all.
Bob |
