Noront Resources

At the very least this is a report and a stabin the back by our friends Genuity.

Sp is tannking. There is trouble in paradise. Infighting over control. When Dick said "go it alone" I think he angered manny of the players including Genuity, the 3 money lenders,JPM and more because IMHO if you go it alone these others are left out! Does that make sense?

Now read this:

See last page for disclosure and share classification information.
Noront Resources Ltd.
NOT-V: $1.15
October 7, 2008
Michael Gray, P.Geo. – 604.694.6961
TARGET: UNDER REVIEW
RECOMMENDATION: UNDER REVIEW
RISK RATING: SPECULATIVE
michael.gray@genuitycm.com
Colin Garner, BASc – 604.694.6964
colin.garner@genuitycm.com
AT12 target - Requires deep, strong EM targets to be documented
(all figures in C$, unless noted) Price (10/06/2008)$1.15Shares O/S (mm)129.5Shares F/D (mm)138.8Market cap F/D ($mm)$159.6Market value ($mm)$141.510-day Ave Daily Vol (K)330.0Debt ($mm)$0.0Cash ($mm)$42.0FD cash ($mm)$65.012-mo Burn-rate ($mm)$30.0Shareholders 5%Mgmt~9.7% Pinetree Cap~9% Sprott Asset MgmtPresident & CEORichard Nemis COOJohn HarveyCFOKevin Feeney NOT-V$0$2$4$6$8OctDecFebAprJunAugOct... (
C$)200 MA50 MA
Company profile
Noront Resources (NOT-V) is a Canadian-based and precious metal exploration company focused on Northern Ontario and Quebec, Canada. Its key asset is its relatively new Ni-Cu-PGM Eagle One discovery on the Double Eagle project, James Bay lowlands, Ontario. The discovery is attractive, as it represents a rare high-grade nickel-copper-platinum-palladium discovery in an area that is under-explored.
Investment thesis
• Noront continues to have limited success drilling its AT12 Ni-Cu-PGE target on its 100%-owned Double Eagle project, Northern Ontario, Canada – The latest drill results indicate a mineralized “conduit” system that is now 150m long, up to 46m in apparent thickness to a vertical depth of 200m. Disseminated to “intermittent” semi-massive sulphide intervals have been documented locally to date. However, the geological setting is similar to the ultra high grade Eagle One deposit - with a peridotite unit hosting sulphide mineralization and bounded by granodiorite – therefore, permissive.
• Results required – At an expenditure rate of $4 million/month, Noront needs to drill effective holes based on strong EM conductors and deliver results. Of nine holes drilled into the AT12 target to date, the best intersection is 1.41% Ni, 0.29% Cu, 0.16 g/t Pt, and 0.77 g/t Pd over 9.8m in Hole 2G02 (semi-massive sulphide bands). This being said, drilling to depth as underpinned by a super conductor would represent a prime target and major catalyst to create value despite the very tough market conditions. On this basis, we would like to see increased disclosure by NOT as to conductor strength and quality.
• Go-forward catalysts – In the near term, drilling south of the Eagle One Ni-Cu-PGE deposit will clearly be the major catalyst for NOT shares. Ongoing drilling to depth as at AT12 and Eagle Two will be important if linked to quality EM targets. Documentation of the size, grade, and metallurgy of the Blackbird One and Two chromite deposits is in progress.
• We have placed NOT UNDER REVIEW, as our blue-sky driven valuation is out of step with the current and expected market conditions for Junior mineral exploration companies over the next 12 months. Valuation will rely more on assets of potential retained value, including the Eagle One Ni-Cu-PGE deposit and the Blackbird chromite discoveries. NOT is Speculative and only suitable for risk-tolerant investors.
Genuity Capital Markets www.genuitycm.com
416.603.6000 2
Background
Event
On October 6, 2008, near the market close, Noront reported results for five drill holes (four visuals and one hole with assays) that tested its AT12 Ni-Cu-PGE target on its 100%-owned Double Eagle project, Northern Ontario, Canada.
Key results
The AT12 target is located 9.5 kilometres to the NE of the Eagle One discovery. Of the five holes reported, the following results are important in our view:
• Visual results – Two holes returned intersections of 43.0 and 46.7 metres of mineralized peridotite “conduit rock.” Mineralization consisted of “disseminated with intermittent massive to semi-massive bands Fe, Cu, and Ni” (we note that both holes were drilled from the same set-up at -65 and -60 degrees, respectively). True thicknesses are not established yet, but suggest a significant magmatic sulphide-bearing system is present. Visual documentation of the AT12 mineralized system is now 150m along strike by up to a 200m vertical depth and approximately 46m thick.
• Assays for Hole 2G02 – This hole returned 29.6 metres at 0.72% Ni, 0.18% Cu, 0.13 g/t Pt, and 0.57 g/t Pd (including 9.8m at 1.41% Ni, 0.29% Cu, 0.16 g/t Pt, and 0.77 g/t Pd). This mineralization is “smoke” and helps document the Ni-Cu-PGE system, but is relatively low grade overall for this region in our view. We are, however, encouraged by the elevated Pd content.
Impact – Negative
The latest drill results help to establish the size of the AT12 target, however, massive or net-type sulphide mineralization that we believe is required to deliver high grades has not been documented. This being said, we appreciate that a permissive geological setting, similar to Eagle One, is being tested. We will look for quality EM conductors at depth associated with AT12 vis-à-vis ground and borehole surveys to gauge exploration potential.
We would emphasize that at $4 million/month being spent by the company ($3 million on Double Eagle), NOT needs to be extremely effective and efficient using deep penetrating EM geophysical methods to develop quality targets.
Near-term catalysts
1. Exploration “expansion drilling” at Eagle One (current) – NOT is drilling south of its Eagle One Ni-Cu-PGE deposit in an attempt to expand the deposit and find new massive sulphide zones. Infill drilling will also be conducted within the inferred resource. Drilling has apparently been in progress since early- to mid-September with no visual results reported to date.
Genuity Capital Markets www.genuitycm.com
416.603.6000 3
2. Ongoing drilling at “Eagle Two” (AT2) and AT12 (ongoing) – Drilling will continue to test at depth for Ni-Cu-PGE massive sulphides. Drill targets associated with high quality EM conductors at depth will have high discovery potential (to date, NOT management has provided limited public information as to the quality of its EM targets).
3. Ongoing drilling and assay results at the Blackbird One and Two chromite deposits (ongoing) – NOT is sketching-in its two chromite discoveries that will eventually lead to an inferred resource estimation.
4. VTEM airborne survey results (pending) – We expect VTEM anomalies to be documented on Noront’s Double Eagle extensive property and for high priority targets to emerge. Disclosure on the strength of these conductors would assist the market in assessing the exploration potential for near surface Ni-Cu-PGE deposits.
We note that NOT has indicated assays are taking 6-8 weeks of turnaround time. This is very surprising, as in the spring the company had announced that it had a laboratory agreement to secure an assay turnaround time of about two weeks. We expect that with the exploration slowdown ahead, NOT should be able to secure a place closer to the front of the line for assays and report results to the market in a more timely manner.
Valuation and recommendation
We have placed NOT UNDER REVIEW, as our blue-sky driven valuation is out of step with the current and expected market conditions for Junior mineral exploration companies over the next 12 months. That said, we continue to focus on NOT’s Double Eagle project as a potential new high grade Ni-Cu-PGE belt. Valuation will rely more on assets of potential retained value, including the Eagle One Ni-Cu-PGE deposit and two Blackbird chromite discoveries. NOT is Speculative and suitable only for risk-tolerant investors.
Genuity Capital Markets www.genuitycm.com
416.603.6000 4
Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund,
Participating Organization of the Toronto Stock Exchange and Toronto Venture Exchange
Noront paid for some of the travel costs associated with an April 2008 site visit conducted by the analyst to the Double Eagle project, Ontario.
Analyst’s Certification
I, Michael Gray, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
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Stock Rating
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Risk Rating
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Share Classification
NV – non-voting shares RS – restricted voting shares SV – subordinate voting shares UN – units
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