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| Send Page To a Friend | Tuesday May 20, 2008 |
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NovaWest Resources Inc. (TSX.V-NVE) ( This new major development may have come sooner. However, the advent of a protracted recession in the mining business in recent years seriously curtailed exploration activity in this region. But that’s about to change – dramatically. With a revitalized market in metal prices, most exploration companies are now cashed-up again and are back with a vengeance. And few areas in the world are likely to be the focus of so much greatly-anticipated drilling activity this spring and summer as the Raglan Belt. The mining camp’s key landholders, including two major mining companies, are expected to commit up to Cdn. $50 million towards a number of ambitious drill programs. When the drills start turning, it will be music to the ears of NovaWest Chairman, Patrick O’Brien. He has waited a very long time to see his dreams come to fruition. In fact, it was as far back as 1995 that O’Brien first saw the potential for “company-making” discoveries in the largely-overlooked, 285-kilometre-long by 90-kilometres-wide Raglan Belt. At the time, while most other mining juniors were chasing the end of the rainbow in more exotic and fashionable overseas locations, NovaWest quietly amassed an enviable land package in the Raglan region. When many mining juniors later threw down their tools to wade into the Dot Com debacle, O’Brien steadfastly kept acquiring more land and more mineral databases. All the while, he kept his company busy identifying the most prospective areas for drilling into pay dirt. Now NovaWest is ready to “light up the area,” as O’Brien puts it with a broad grin, by embarking upon an aggressive Cdn. $4.3 million drill program that will focus on at least 100 key targets spread across the Raglan Belt’s three mineralized trends. With two drill rigs committed to this pivotal project, NovaWest expects to break the earth as early as the first week of May. Accordingly, SmallCapMedia believes that the odds are very much in NovaWest’s favour. But before we get ahead of ourselves, let’s put matters in a better perspective by looking at how NovaWest’s story has evolved in recent years. The wisdom behind the company’s decision to stake much of its now-envied land package became apparent in late 2002 when Canadian Royalties Inc. made a significant high-grade nickel-copper discovery that subsequently sparked a major regional staking rush. Having amassed the third or fourth largest land position in the region, NovaWest now has holdings that are strategically located between two region’s two most important players, namely the major mining companies Falconbridge Ltd. in the east and Anglo American Exploration ( While size matters, location matters more. The properties incorporate all three of the belt’s known mineralized ultramafic horizons. And most significantly, NovaWest and a relatively new joint venture partner are the only landholders within a long mineralized corridor where Falconbridge has discovered more than a dozen deposits, all along strike (in a row). Strategically, NovaWest and its partner boast outright ownership of the Thunder Property. This property is surrounded by Falconbridge land holdings on all sides – and along strike with nearly all of Falconbridge’s discoveries. In fact, Falconbridge dominates the landscape over a 25-kilometre-long mineralized “corridor of hope” along the Raglan Belt’s “North Trend.” And for good reason, too. The savvy major mining company has so far found all of its 14 or so regional discoveries (except its twin Delta deposits) along this east-to-west mineralized trend. In particular, the Thunder claims are in close proximity to Falconbridge’s large Not surprisingly, NovaWest feels the Thunder Property has excellent potential for the discovery of economic massive sulphide nickel-copper-Platinum Group Metals (PGM) deposits. And this property is expected to be a high-priority when NovaWest embarks upon an ambitious drill program this spring, which includes at least 15 high-priority drill targets on the Thunder claims. Further west, another key block in NovaWest’s jointly held land package, “The Delta East and West properties”, completely enclose Falconbridge’s two adjacent, high-grade Delta deposits. Meanwhile, the second largest block of the partnership’s extensive acreage sits adjacent to the joint ventured holdings of Anglo American and Knight Resources. This is where the South African mining powerhouse and its junior partner will also be drilling in earnest this summer. All told, the key players in the Raglan Belt are expected to drill hundreds of holes in this rich mineral belt in the quest for more polymetallic discoveries, with the prospect of particularly high grade PGM values to sweeten the pot. This represents a very good balance of risk and reward. It is especially the case when considering the fact that the Raglan Belt is said to be very similar to the Thompson nickel-copper-PGM Belt in dimensional length, width and geology. The Thompson Belt has produced an amazing 32 deposits, and contains 800 million tonnes of mineralization. To date, the Raglan Belt Mining Camp has undergone far less exploration and development and has already yielded over a dozen deposits and two mines, totaling perhaps 50 to 60 million tonnes to date. According to NovaWest, however, the most significant selling point of the Raglan Belt Mining Camp -- when compared to both the epic Voisey’s Bay nickel discovery and the Thompson Belt -- lies in the occurrence of very high concentrations of PGMs in the Raglan ores, both historically and in more recent exploration results. Indeed, NovaWest estimates that Falconbridge may be getting a free ride on the cost on its nickel production, once the PGMs premium is taken into consideration. Such an assessment is more than idle speculation given the recent ascent in platinum prices to around US $900 an ounce. A report published by Falconbridge following some PGMs exploration work a number of years ago bears testament to the rich platinum potential of Raglan Belt where it says: “Our survey revealed the strong economic potential of Pt-Pd (platinum and palladium) on our property. It bears some strong similarities with the richest Pt-Pd ore zones of the Merensky Reef of the Bushveld Complex, Also, historical drilling results compiled by an exploration arm of the mining major, Cominco Ltd. (now Teck Cominco), tend to underscore this assertion. During the 1970s and in the immediate vicinity of NovaWest's land assemblage, Cominco intersected between 4.40% to 8.22 % nickel and 1.0% to 2.20% copper. But perhaps just as importantly, Cominco also carried out a few sporadic drill holes for platinum, as well, and came up with 2.8 g/tonne of platinum and 3.7 g/tonne of palladium across some 23.1 feet in one hole. Further support for PGMs potential in Raglan was revealed publicly in 1986 by a Quebec Ministry of Resources report which assayed up to 4.25 g/tonne of platinum and 14.17 g/tonne of palladium over a 500-metre-wide ultramafic sill. The main strategy of the NovaWest/Cascadia joint venture during the 2004 drill season is twofold. First, the partnership aims to establish that the mineralization of the NovaWest land assemblage is similar to that of the deposits in the Falconbridge core holdings, which include the Katiniq Mine. Secondly, NovaWest expects to prove that its key jointly held claims are at the centre of a consistently mineralized structure that connects the Anglo American properties in the west and the Falconbridge properties in the east. Early indications that both these scenarios may prove correct are promising. This is evidenced by the results from the 2003 exploration season. Specifically, detailed geological fieldwork performed on NovaWest’s holdings during the early summer consisted of the mapping and sampling of rock types known to host economic sulphide deposits. A modest 13-hole follow-up exploratory drill program intersected massive sulphide mineralization containing nickel, copper, platinum and palladium in three holes. Results from the three holes show platinum values as high as 1.06 g/tonne, with palladium values up to 9.84 g/tonne, copper values as high as 2.96% and nickel running to 2.28%. The grades encountered add weight to the belief that the NovaWest assemblage occupies the centre of a large, multifaceted massive sulphide camp. The basis of the 2003 program was to lay a foundation for the drill-intensive “big roll of the dice” that will eat up $4.3 million in exploration dollars in 2004. However, NovaWest has painstakingly compiled a compelling database of corroborative geological “indicators” to select its drill targets. SmallCapMedia would therefore be surprised if NovaWest comes up empty-handed this drill season. Meanwhile, O’Brien has shrewdly dispersed the company’s exploration risk by taking on a relatively new partner. As of early 2003, NovaWest’s sprawling land package has been joint ventured with Cascadia International Resources. Cascadia can earn up to a 50% interest in the Raglan claims by way of funding much of the exploration costs (for up to $12 million over three years) and by issuing NovaWest up to 1,500,000 Cascadia shares over three years. While the highly prospective Raglan project is NovaWest’s main priority, the company also possesses a varied portfolio of other second-tier projects. They include the wholly-owned 36,640-acre Nickel Royale prospect near NovaWest has also recently acquired 100% ownership in the Solarus Gold Project, which is located in the Thunder Bay Mining District of northwestern NovaWest also benefits from a diamondiferous kimberlite pipe in its portfolio, proven to host micro and macro gem-quality diamonds. The 100% owned Buck Pipe Project is located approximately 90 kilometres south of On the corporate front, NovaWest's management team has approximately 200 combined years of experience in exploration and financing mineral exploration throughout the world. At the helm of NovaWest (formerly International Homestead Resources) for over a decade is Chairman of the Board Patrick O'Brien. An adept entrepreneur and financier, he has considerable experience in the arena of venture capital, and has shown a strong commitment to the natural resources business for many years. His managerial talents are complimented by the geological acumen of Vice President of Exploration, Dennis Bordin, P. Eng. Mr. Bordin has 25 years of international experience in all aspects of the mining industry, from exploration to mine operations, including smelting and refining. A recent addition to the company as Chief Geologist and fellow Vice President is Dr. Burkhard Dressler. Dr. Dressler has more than 33 years of geological experience including 5 years with the Ministry of Natural Resources,
On a technical note, NovaWest has about 34.95 million shares outstanding (54.34 million fully diluted). SmallCapMedia is of the opinion that the company is presently undervalued considering that NovaWest is about to embark upon an aggressive Cdn. $4.3 million drill program in one of
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