WSR gets into the ‘ring of fire’

WSR Gold (WSR-V, WSROF-O) is helping Noront Resources (NOT-V, NOSOF-O) implement its plans to explore near its Double Eagle project, in northern Ontario.

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

Under the deal, WSR will issue 400,000 common shares to Noront, spend $5 million over three years on exploration — $1.5 million in the first year — and pay $400,000 in cash 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, 60,000 to 70,000 hectares, so we’ll start piecing some of that off,” says Noront president and CEO Richard Nemis. “We tried to get a deal that would be the basis of other deals. We want to maintain operator status and don’t want to give up any more than fifty per cent. We want to be in a position to roll it over to a major company.”

Noront grabbed investors’ attention in September when it announced results from its first hole at Double Eagle, which cut 36 metres assaying 1.53% copper, 1.84% nickel, 1.04 grams platinum per tonne and 2.87 grams palladium starting from 56 metres below surface.

That hole lies directly south of the claims joint ventured to WSR. 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 wasn’t for a shift in thinking.

“I was there for two to three 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, data collected previously has to be reinterpreted, and Noront is flying some 5,600 km of airborne surveys toward that end.

While still early stage, Noront’s work was strong enough to catch the attention of WSR president and CEO John Tait.

“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 named Tri-Eagle to distinguish it from Double Eagle. 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 of $1.25 million per month.

In Toronto on the news, Noront shares were off nearly 6% at $5.58 on 3.4 million shares, while WSR fell just over 5% to 52 on roughly 1 million shares traded.