WSR gets into the ring of fire

WSR Gold (WSR-V) is helping Noront Resources (NOT-V) implement its plan.

A few months after Noront announced eye-catching nickel, copper and platinum group metal (PGM) results from its Double Eagle project in northern Ontario it has entered into its first joint venture in the area.

The deal calls for WSR to issue 400,000 common shares to Noront, spend $5 million over three years on exploration — $1.5 million in first year and pay $400,000 cash to Noront within two years. If completed WSR will wind up with a 50% stake in the 15 claims that stretch over 44 sq. km, and will leave Noront as the operator.

We have an awful lot of land, 60 to 70,000 hectares, so well start piecing some of that off, the head of Noront, Richard Nemis, says. We tried to get a deal that would be the basis of other deals. We want to maintain operator status and dont want to give up any more than 50%. We want to be in position to roll it over to a major company.

Noront grabbed attention back in September when it announced a first hole intersect averaging 1.53 % copper, 1.84 % nickel, 1.04 grams per tonne platinum, 2.87 grams per tonne palladium over 36 meters between 56 and 92 meters.

The hole at Double Eagle lies directly south of where the claims joint ventured to WSR lay. Both claims sit within what is being dubbed the ring of fire — a large basin like structure in which mineralization seems to be occurring in clusters.

This could really be the next major resource area in Canada, Nemis says of the area.

But it’s an area whose full potential is only now being realized, and may not have been realized at all if it wasnt for a change in thinking.

I was there for 2 to 3 years, always looking for a VMS deposit, and I was looking for magnetic lows, everyone was looking for lows, Nemis says.

That first hole was based on a target registering a magnetic high, and now Nemis believes such highs hold the key to unlocking mineralization. Because of that, he says prior data has to be re-interpreted, and Noront is flying some 5,600 km of airborne surveys towards that end.

While still early days Noronts work was strong enough to catch WSRs president and chief executive John Taits attention.

When Noront made their hit, we got interested in the area, Tait says. We thought it looked pretty spectacular and we tried our hardest to wiggle our way in the door, and we made it in.

Tait says the property will likely be dubbed the Tri-Eagle project to distinguish it from Double Eagle. And while the claims are currently being flown, he anticipates getting drills into the ground early next year.

WSR has roughly $3 million in the bank, and is closing in on a private placement that will bring in another $2 million by issuing roughly 8 million shares.

Noront has $35 million in the bank and a burn rate $1.25 million per month.

In Toronto on Nov. 1, Noront shares were off close to 6% or 35 to $5.58 on 3.4 million shares, while WSR fell just over 5% or 3 to 52 on roughly 1 million shares traded.