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A case study for a greenfield investment

Richard (Rick) Mills
0 Comments|October 29, 2012

Quality greenfield junior exploration plays like V.NAN should be on every resource investor’s radar screen.

There aren’t any nickel names left. Once Inco went, who do you invest in if you want nickel?


Fact - our reality is we’re living on a relatively small planet with a finite amount of reserves and a growing human population that wants an increase in their standard of living.


I think we would all agree that the planet's booming population and rising standards of living are going to put unprecedented demands on supply.


Here’s something else to think about - when was the last time you heard of a major mining company actually finding a deposit? Think about that for a few minutes.


Well it rarely happens - juniors, not majors, own the worlds future mines and juniors are the ones most adept at finding these future mines, that is their place on the food chain. They already own, and find more of, what the world’s larger mining companies need to replace reserves and grow their asset base.


But how does a junior find a quality project to acquire and how does an investor find that quality junior - the one with a project so good it sticks head and shoulders above the rest, the one that is screaming to have money spent on it, the one junior with the project so damn good you need to have a piece of it?


Well it boils down to people, the network of contacts you’ve built - people who trust you and are willing to work with you and of course a huge amount of due diligence.


Nickel Tenor – Ni concentration in 100% sulphides.


In nickel exploration you look for nickel tenor, which is a reflection of how much nickel you know is in the sulfides as a percentage of that sulfide. If you have nickel tenor of 6% and you have 50% sulfide in your deposit, you are going to have 3% nickel – you know the grade, you know the outcome if you hit sulfides and that outcome is usually fairly consistent.


Kryolitselskabet Øresund (A/S-KØ) *drilled 119 holes between 1965 and 1972, totaling 6,287 meters for an average hole depth of 53 meters. All but six of these holes were drilled with a portable *Winkie drill. Most of this  drilling tested exposed sulphide mineralization and shallow electromagnetic (EM) anomalies directly associated with exposed mineralization – this equates to about $3 million worth of drilling in today’s dollars.


*Fred Wink designed the Winkie drill in the mid 1970’s and it’s the core drilling rig of choice for drilling in remote locations such as high mountains, deserts, arctic tundra or dense jungles. The main reason for this is because the drill weighs only 180 pounds, has the capacity to drill 475 feet, and can be carried by pickup truck, mule, helicopter or two men into the most difficult terrain.


Most of the Kryolitselskabet Øresund core still exists and is being protected in dry space by the Danish government. Falconbridge and Cominco have both looked at the core and Falconbridge did a study on the nickel tenor in 2000.


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