Noront Resources

Hi All,

I was surprised to see the latest NR talking about financing. I should not say completely surprised as we know that exploration companies always have a need for cash to continue exploration.

But it is the timing of the flow through private placement that I find interesting. Or to the point, opportunistic.

I had mixed emotions when I read the NR. First I was glad to see it limited to just a 20% dilution. But then shocked to see the strike price. Then the five stages of loss kicked in - denial, anger, bargaining, depression, and acceptance. All in about 30 minutes.

In my opinion, this is a robbery that didn't necessarily have to be.

Unlike past PPs which were discounted severely, the strike prices for those were only at most a ~50% discount of what the maximum historical share price had been. In December 2006, we saw a PP for 30 million shares and 15 million warrants at .50 cents and .75 respectively. This was at a time when Noront has 60M shares outstanding but also at a time when the share price had risen from .18 cents to a high of $1.07 and an average for a few weeks of .75 cents. While .50 cents was considered a robbery back then, it was a much needed one in that Noront had no cash to take Windfall to the next level.

It should be noted that at that time, Noront issued options to all staff at .75 cents, 50% higher than the PP price.

In February 2008, Noront announced a PP for 6.5 million share with an equal warrant at $4 and $5 respectively. This raised 52 million of which we still have $25 million of those dollars sitting in the bank. I believe at the time of the announcement, Noront was trading in the sub $4 for the entire month of January. Interesting how the price falls just before a PP, isn't it? But at least the strike price was higher than the previous month's average. Much higher looking at the chart.

The recent announcement is nothing more than an opportunistic play designed by people who have been on the job a total of two weeks. That is ten business days. The AGM was only two weeks ago folks.

To issue this private placement at this time is irresponsible. But understandable. It allows those with the biggest stake in the Noront game to average down to levels that many of us have likely averaged down to over the past few months. All of the big players who bought those shares at $4 and $5 will likely be the same ones that participate at $.80 cents. My take on this is while I do not like it and while I believe it is a gift, it is a gift to those who at least put up something in the past to get us closer to where we are today in terms of drill results, finding DE2, the chrome, and the JVs.

What I do not agree with is what I believe to be the sheer display of incompetance of the current co-CEOs.

Two weeks on the job and they decide to strike a PP at a price that is just off our our 52 week low. The volumes lately have been low. The market crashed. Yet we still have 25 million in the bank which can keep us going for 1 to 2 years according to the wording on the release. Why the need for an additional 20M now? What is the immediate need for the additional 20M at this time, a time when the share price is as low as it has been in over a year?

There is only one answer. Greed.

This has less to do with raising needed capital and more to do with the strike price for the new directors and co-CEOs who have been on the job ten days.

2.4 million shares split across eight people, most of whom were part of the coup. A strike price of .80 cents in order to motivate them to get the price up to a point it was at a week or so ago? Talk about a stretch target. I hope they don't sprain a pinky signing those papers they get paid to sign.

Again, I am not as frustrated as to the PP. The timing sucks but it is still $$ in the bank that has to be used for drilling. The options are what are the embarrasing joke for the new crew.

Upset? There is only one way to get revenge. That is to buy up the cheapies that are trading under .80 cents. If hell cannot burn hot enough for those whose sin is unbridled greed, then we can at least own some shares cheaper than what they will be paying. At .60 cents as I write, the deals are still out there for now. It is the retailers only way to get even. How do I know?

Even when the PP took place at .50 cents in 2006, a lot of the old school Notters bought up the shares that traded for under .40 cents in 2007. An amazing profit for those who sold in the later months following those prices. A return to higher prices will follow as those in charge and with the big $$ will want to sell those shares at a high profit to the next group of investors, small or large interested in the next big thing.

The only way to get even today is to buy some shares over the next few days or weeks at less than .80 cents. Or hold and wait it out. At the end of the day there is very little we can do to turn the tide. We could win another board proxy with enough retail votes assuming we still have the numbers but how eventually one of these resolutions will pass, at whatever number they decide.

Acceptance is not agreeing with their actions. It is living with our own decisions. To hold, buy more, or like my friend, sell everything and get out of the gong show completely.

Still a shareholder,

M1.