If this story pans out how good will it be for Noranda?
canoe.com
For Monday, March 15, 1999
Miners wait for Lac Rocher results
Nuinsco discovery could herald turnaround in sector
By KEITH DAMSELL
The Financial Post
The hopes of the mining sector rest on the small shoulders of
Nuinsco Resources Ltd. this week.
Over the next three days, the exploration junior will be the centre
of attention at the annual convention of the Prospectors and
Developers Association of Canada in Toronto, the world's largest
gathering of junior exploration and mining companies, that opened
yesterday.
Nuinsco's promising nickel discovery at Lac Rocher in northern
Quebec has got the industry dreaming of what was unthinkable
only a few months ago: a return of investment capital to the
moribund junior mining sector.
Nothing will do more to win back investors than a major discovery
in Canada's own backyard, said Douglas Hume, president of
Nuinsco, yesterday. "What's really needed to rejuvenate the
industry are a couple of good, honest Canadian resource plays."
Lac Rocher drilling resumed last Friday and new results are
imminent, he said.
When the much-anticipated assays are released, more than a few
fingers will be crossed for luck.
"If we bomb out, everybody bombs out," said Paul Pitman,
Nuinsco's geologist. "The great area play will be dead."
But most observers do not expect that to happen. "Nuinsco will
be the buzz of Toronto," said John Kaiser, publisher of investment
newsletter Kaiser Bottom-Fishing Report. Thanks to Nuinsco,
Quebec's Lac Rocher region is shaping up to be "one of the best
area play set-ups I've ever seen," Mr. Kaiser said. "This is a perfect
market for speculators to come in and start buying."
It was a very different story a year ago. The junior market was still
nursing a hangover from the Bre-X Minerals Ltd. debacle in 1997,
Asia was in an economic mess, and metal prices were heading
south.
"It was doom and gloom," said Guy Laberge, a mining investor at
the convention yesterday. "Everybody was just burned out."
Everything changed on Jan. 21 when Nuinsco released partial drill
results. The year's first drill hole from Lac Rocher intersected 37
metres of massive sulphides grading 2.47% nickel. One 3.2 metre
section graded an impressive 10.8% nickel. The results were the
best nickel assays the market had seen since Diamond Fields
Resources Inc.'s drill results from Voisey's Bay five years ago. The
spectacular Labrador find was sold to Inco Ltd. for $4.3-billion in
1996.
Nuinsco seized the moment and quickly raised $10-million for
further exploration. Shares of the Toronto junior climbed rapidly,
peaking at $3.26 last month. The stock was up 12c to close at $2.62
on Friday. Only three months ago, shares could have been bought
for as little as 22c.
The find sparked a claim staking rush in northern Quebec. With
dreams of duplicating Nuinsco's success, more than 40 juniors
have snapped up exploration rights to property across Lac Rocher.
"Every third or fourth booth here has some connection to Lac
Rocher," said Dave Brook, spokesman for Donner Minerals Ltd.,
surveying the crowded PDAC convention floor.
Donner itself has been caught up in the hype, signing two Lac
Rocher exploration deals with majors Noranda Inc. and
Falconbridge Ltd.
"Everybody has jumped in on this," said Mr. Brook. "Everybody's
looking for something to believe in. It's been a tough haul for the
last couple of years."
The enthusiasm seems to be infectious. Nickel and gold prices
have firmed in recent trading and last week, U.S. gold giant
Homestake Mining Co. agreed to cough up $300-million in stock for
Vancouver's Argentina Gold Corp. |
