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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Andrew~ who wrote (2624)	9/12/2013 6:55:20 PM
From: Goose94	Read Replies (1) \| Respond to of 202736

Metal Augmentor on North American Nickel (NAN-V) - Sept 11, 2013 North American Nickel (NAN) is drilling what appears to be a typical magmatic sulfide Ni-Cu-Co-PGM(?) deposit at its Maniitsoq project in Greenland. These deposits are present in differentiated magmas meaning that the sulfides essentially settle out of the magma and sink to the bottom or base to form zones enriched in base metals and sometimes platinum group elements as well. Of course the “bottom” can be oriented in various directions and angles due to c0incident or post-mineralization processes. And what might appear to be the “bottom” might actually be just a splay off the main chamber. But it often seems to be the case that the closer to the “bottom” that you are, the higher the sulfide content and the wider the sulfide zones tend to be. The question at Imiak Hill, where NAN has now successfully followed a magma conduit to a depth of almost 200 meters, then becomes: Is this the beast itself or just the tail? The answer to that question will probably have to wait for at least one more drill program (next year after the snow melts). But here are some things to note in the meanwhile. First, we were reminded during a recent discussion with management that institutional funds and other pedigreed buyers will not touch a stock until assay results confirm the visual core examination. In this case, that means the buying in NAN so far has been limited to retail and other sundry investors and not the “big guns”. It also means that there could be an interesting opportunity to pick up shares now before the assays are announced with the relative certitude that those assays will be very impressive (3+% nickel over 10+ meters). The reason for the high level of confidence is that the differentiated magmas at the Maniitsoq project appear to have a single primary source and therefore the nickel to sulfide content appears to be quite consistent despite various grades. In addition, the predominant nickel sulfide host at Maniitsoq is the mineral pentlandite, which tends to have a narrow variation range between iron and nickel (in comparison to pyrrhotite). Together this results in a strong correlation between sulfide content and nickel grade. Second, we consider the above-mentiond potential that the sulfides at Maniitsoq may have originated from a singular magma. Besides the implications for consistency in nickel tenor, such a scenario would support the perspective of NAN management that Maniitsoq could eventually turn out to be a nickel sulfide district perhaps on the scale of the Sudbury basin. Notable at Maniitsoq is the widespread occurrence of the intrusive norite (a belt of these rocks extends for tens of kilometers along the likely rim of a meteor impact crater, as at Sudbury). Norite is also associated with magmatic nickel sulfide deposits of the Bushveld igneous complex in South Africa and Stillwater in Montana though in these instances the sulfide deposits are PGM-rich. The point though is that norite is the right type of rock and increasing sulfides in a conduit form is the right type of setting for a major nickel deposit. Third, management has decidedly lower expectations in the near term for Maniitsoq than the imminent discovery of deposits on a Sudbury scale. Instead, the current goal is to define 10 million tonnes of sulfides (from several deposits within the camp) with economic grades that would support a medium size, high grade nickel-copper-cobalt-PGM(?) mine. A central processing plant would likely be fed form several deposits including Imiak Hill, Spotty Hill and potential other discoveries. The 10 million tonne target is conceptual of course and there are no guarantees that such quantity of mineralized material will be discovered. So far the size of the Imiak Hill sulfide zones combined would suggest on the order of 1 million tonnes assuming continuity to a depth of ~300 meters. Less is known about Spotty Hill but we can perhaps safely assume that it has the potential to be similar in size if not larger than Imiak Hill. So there is plenty of work left to achieve the 10 million tonnes conceptual target but there is probably also a very long way to go before drill targets are exhausted. Fourth, we should consider that the presence of massive sulfides in a pipe/conduit structure that extends to depth is an encouraging sign. Major nickel sulfide deposits form near the base of a magma chamber or system by gravitational accumulation. Dykes, conduits and other “plumbing” structures associated with the emplacement and pulsing of magma can become traps for these sulfide fractions as well. These sulfide-bearing structures are sometimes connected to a basal area containing large accumulations of sulfides or the structures themselves may become dilated along their plunge whereby they can then host a large ore deposit. The Nova deposit of Sirius Resources in the Fraser Range of Western Australia is an example of a nearly vertical conduit that apparently dilates at depth to form a large basal structure. Although the main Nova ore body is less than 400 meters from surface the discovery was made by vectoring along an EM conductor until the sulfide-bearing conduit and subsequently the basal structure were discovered. Fifth, we should take note of the conduit-to-basal model (seen not only at Voisey’s Bay, Sirius’ Nova deposit but elsewhere as well) insofar as a vertical ore body alignment tends to transform into a sub-horizontal orientation as the system approaches its highest size and grade potential (proximal to or within the basal structure). To wit, the latest drill hole visual announced for Imiak Hill doesn’t appear to have a detectable change in vertical orientation and therefore we are likely not yet close to approaching a basal structure assuming one does exist. Moreover, there exists a decent likelihood that a change in orientation may actually result in a number of drill hole misses until the structural orientation of any potential basal structure is determined (perhaps by means of borehole geophysics whereby an instrument is inserted into the drill hole to take measurements). If and when such a scenario appears (i.e., the conduit starts to flatten out and/or drill holes start to miss more than hit), we will want to revisit the idea of a conduit-to-basal model because the market could misinterpret the situation and thereby provide us with an opportunity to further our speculative and/or investment thesis.