Ring of Fire in James Bay Lowlands – by Edgar J. Lavoie (June 2008)

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. This article is from the June, 2008 issue.

For an extensive list of articles on this mineral discovery, please go to: Ontario’s Ring of Fire Mineral Discovery

The man with a dream sits on a wooden bench 190 kilometers north of the Albany River and 240 kilometers west of James Bay.

Neil Novak, P. Geo., is wearing two hats today, the real one of which reads Spider Resources Inc., and the other is the shirt he is wearing, which spells out Noront Resources Ltd.  Novak is President and C.E.O. of Spider (SPQ:TSX-V) as well as Vice President/Exploration of Noront (NOT:TSX-V).

The kitchen tent is not a quiet place this morning.  The two cooks clatter about.  Men bundled up against the minus 17 degrees C. stomp in and out.  They relish the respite from a stiff wind out of the northwest.  They stomp around on the wooden floor in insulated rubber boots as they grab a coffee or sit down for a sandwich.

A Cessna Grand Caravan, courtesy of Billiken Management Services Inc., has just shuttled the writer and the photographer Jim Guillemette from Nakina airport – the end of the paved road – to an ice strip on McFauld’s Lake in the subarctic.

About a dozen and a half tents squatting on the frozen muskeg constitute the Billiken Base Camp.  A few times a day a Caravan and occasionally a Hawker Siddeley 748 drops off another payload of supplies and equipment to run the camp and to sustain crews farther afield.

Two Astar 350 F2X helicopters ferry supplies to the Billiken Drill Camp 17 kilometres to the west on the Double Eagle Property of Noront Resources.  The pilots also shuttle between drill rigs, including Noront’s three rigs, working in splendid isolation in a flat landscape of snow and swamp and stunted trees.  No one walks far here, except the claim stakers and the line cutters, and they too are scattered around the landscape and serviced by helicopters.

Neil Novak has abandoned his Toronto office for a few days in the James Bay Lowlands.  After Noront struck promising nickel-copper massive sulphide in its first two drill holes late last August, a staking rush ensued.  A small-scale claims map (issued by Intierra Mapping) shows a large horseshoe, open to the west, the different colours representing the junior miners active in the area known as McFauld’s Lake.  The lake itself, on the map, is a tiny clump on southeast side of the horseshoe that has been dubbed the Ring of Fire.  The dominant colour on the ring is orange, representing the land position of Noront Resources Ltd.

 Billiken Management is providing several services, including geological services.  One geologist, Howard Lahti, is devoted to property of Spider Resources Inc., and two, Russell Crosby and Carl Archibald, are based in the Billiken Drill Camp, also known as the Noront Camp or the Eagle One Camp.  Mike Kilbourne, project manager as well as professional geologist, oversees all of Billiken’s activities for its clients at McFauld’s Lake.

Novak says, “From both companies, Spider and Noront, I’m here to get updated with the current drilling results. 

Both companies are drilling on their respective projects.”

He flew in yesterday from Thunder Bay and is leaving tomorrow afternoon. The throbbing of a helicopter landing only 30 metres away threatens to drown out conversation.  A helicopter takes off or lands every half hour or so.

Novak continues: “When I leave I do an update for the market by creating a press release for both companies.”

Noront’s most recent press release on McFauld’s Lake Area, February 25, 2008, announced the discovery of a second nickel-copper massive sulphide occurrence, two kilometres southwest of the Eagle One deposit.  It has been christened Eagle Two.  Novak explains that the companies he represents like to have an executive actually visit the field to verify what is happening before they release new information.  Noront is also drill testing several other high-priority geophysical targets.

Novak discloses his long association with this roadless area of Northern Ontario, dating back to the early ‘90s.  After the De Beers Canada Inc. diamond discovery at its Victor Project between McFauld’s Lake and the fly-in community of Attawapiskat on James Bay, Novak began an association with Spider Resources to explore for diamond-bearing kimberlites from 1992 to 1997.  In 1995, he joined the board of Spider.  The exploration history is complicated, but in 2002, Spider, in joint ventures with KWG Resources Inc. (KWG:TSX-V) and De Beers, drilled a geophysical anomaly near McFauld’s Lake, encountering volcanogenic massive sulphide (VMS) containing copper and zinc.  After the announcement in November, 2002, the area’s first claim staking rush ensued.  Novak had joined Noront’s board in early 2002.

 Then came Noront’s Eagle One discovery last August, magmatic massive sulphide (MMS) containing nickel-copper and precious metals.  It was a very exciting discovery, and sparked the second staking rush.

Novak says Noront’s staking is ongoing as it infills and extends its holdings.  Noront has entered into joint ventures with other juniors.  “Noront would like to have every one of those properties here,” he says.   As he points to the map, his eyes gleam.

With regard to the nearest First Nation communities, Webequie and Marten Falls, many kilometers away, Novak says, “We’ve got very good rapport with both communities.”  Winter roads link both communities to the outside for a few months each year, and Novak would like to see the roads extended to the Double Eagle Project area.  With regard to providing other services, “We try to get them involved in all aspects of exploration,” he says.

Noront is in process of outlining a base and precious metal resource at Eagle One.  Novak describes the splendid results on hole 27, announced on January 28.  Over 35.6 metres, hole NOT-07-27 produced assays of 7.91 per cent nickel, 3.45 per cent copper, 1.66 grams per tonne (g/t) platinum, 12.97 g/t palladium, 3.87 g/t gold, and 9.27 g/t silver.  With such grades, Novak says, the rock would likely not require concentration on site before being shipped out.

Novak resumes, choosing his words carefully, “If there was a million tonnes of that grade of rock out there, and we don’t have an official number – it could very well be much more than that – at that grade a million tonnes is worth in the order of $2.5 billion.”

Asked what Noront hopes to find, Novak laughs,  “Hundreds of millions of tonnes . . . I hope!”  But he is realistic.  “Something in the eight-to-10-million-tonne range, it would really make sense up here.  At those grades that would be a phenomenal deposit, world class.”

 Examining the public record, one finds that in the fall of 2007, Noront’s stock traded at record highs, closing at $6.66 on October 25.  Earlier in the year closures were as low as 38 cents.  Spider, at one point closing at three cents, closed at $0.18 on October 23.

Novak remarks on Noront’s recent financing, for he feels the company is prepared.

“The burn rate right now in Noront is just under $2 million a month up here in our current program.”  That includes an airborne geophysical survey that has been running since the fall.

Looking to the future, Novak says, “The majors would like to come in here and make this a mining camp.  That’s their style.”  He adds:  “We’re listening to everybody, and we’re talking to all the majors.  And we didn’t go to them, they came to us.”

 Novak puts on his other hat now.  The president of Spider Resources is quick to point out the VMS occurrences and diamond kimberlites that Spider has identified, which are now more interesting. “If Noront has a mine,” he says, “ that means the logistics of the area have been overcome.”  Then, as for the development of Spider’s properties, “The economics start making real sense.”

 At one point, John Harvey, P.Eng., Executive vice president of Noront, enters the kitchen tent.  He has been to McFauld’s three times in six months.  He explains that the Toronto office gets the logs of drill core online, but, he says, “We have to look at the real stuff once in a while.”  Then he volunteers: “We hope to announce Eagle Three next.”

 So, for Neil Novak, Noront Resources is one of the keys.  He speaks of finding Eagle Three, then Eagle Four, then . . .  A geologist pulls him away, wants him to look at some interesting new core.  The interview ends.

 On May 26, 2008, the price of Noront stock closed at $4.54, and that of Spider at $0.075. Dreamers imagine that they have only one way to go, and that’s up.  Way up