Initiating Coverage - Rockstone Research

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Initiating Coverage
Equitas Resources Corp.
April 20, 2015
Vale Vale!
Ex-Vale‘s Principal Geologist and
Chief Geophysicist on the Case to Answer
The Multi-Billion-Dollar-Question:
“vale!” spanish as for english “okay!” or “alright!” or “whoo hoo!”
By Stephan Bogner (Dipl. Kfm., FH)
The German version of this research report can be read here as a PDF.
www.rockstone-research.com
Initiating Coverage
April 20, 2015
F
rom today’s perspective, Voisey’s Bay wasn’t really a
great nickel discovery, but still one of the world’s biggest.
• 22 years ago, Robert Friedland’s Diamond Fields Resources Inc. stumbled onto nickel while looking for diamonds in Canada’s remote north.
• Only 3 years later, in 1996, Friedland sold his lucky strike,
the Voisey’s Bay Nickel Deposit, for 4.3 billion USD to Inco.
• Prior to being purchased by CVRD (now Vale) in 2006,
Inco was the world’s second largest producer of nickel.
• In 2005, the Voisey’s Bay open-pit and concentrator
started production. Vale is currently completing an engineering study for an underground mine to be constructed between 2016-2019 extending mine life to 2035.
Now one could think that some more nickel deposits were
discovered around Voisey’s Bay; as being the case with
all other major nickel mining districts in the world (Sudbury, Norilsk, Thompson, Raglan). However, this is not
the case. The multi-billion-dollar-question is why. Truly
great answers are provided by Vale’s former Principal
Geologist, Everett Makela, and Kyler Hardy from Equitas
Resources Corp., in 2 interviews included in this report.
Bottom-line:
• 20 years ago, explorers needed a good portion of
luck to make a discovery as exploration technologies
were, at most, only able to scan a few metres below
surface; i.e. only deposits with surface expression or
association were detected.
• Soon after Voisey‘s Bay‘s discovery, it became clear
that the deposit is gigantic and that an entire mining
district may evolve as these types of deposits typically
occur in clusters. Hence, an aggressive staking rush began in the region putting the most prospective areas
into checkerboard-style ownerships widely dispersed
and wildly fought after – which made effective regional, large-scale exploration unfeasible.
• Makela was on the Inco team which conducted initial due diligence prior to the multi-billion-dollar-acquisition of the Voisey’s Bay Deposit. He retired in 2012
as Vale’s Principal Geologist North-America working
“alongside some of the leading experts in nickel exploration and benefited greatly from access to the resources of leading global nickel companies”, as he put it.
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• In February 2015, Makela became Vice President of
Exploration with Equitas Resources Corp., probably
because “Garland was ... the most prospective area
outside of the Vale mine property”, he said.
• In September 2014, Equitas acquired 100% of the
Garland Property from DG Resource Management Ltd.
(Jody Dahrouge), Zimtu Capital Corp., and Ridge Resources Ltd. for around 8 million shares, 80,000 CAD in
cash, whereas DG Resource Management was granted
a 2% Gross Overriding Royalty (GORR) – it was basically them who finally, after 22 years, succeeded in the
extraordinary feat of consolidating the large Garland
land package (25,000 ha) under one single ownership.
• Small parts of the Garland Property were explored by
10 separate companies, primarily between 1995-1999.
At that time, individual claim blocks were relatively small
with multiple owners, which was not conducive to a regional exploration strategy that allowed for the systematic
exploration of the area. Exploration methods focused on
out-dated frequency-domain airborne electromagnetic
(“EM”) surveys over isolated areas, and which have very
shallow depth penetration capabilities (maximum 75
metres). To date, only 1 short hole was drilled in the very
northern part of the wide-stretched Garland Property.
• Today, next generation exploration technologies,
such as VTEM, can see an order of magnitude deeper,
up to 750 metres.
• In February 2015, Equitas started a VTEM survey over
the entire Garland Property, which was completed
on March 26.
• On April 16, after initial inspection and interpretation
of the VTEM data, Equitas announced to have successfully identified “four distinct areas of anomalous conductivity prospective for nickel-copper sulphide mineralization“. On top of that, the latest press release
revealed another prominent endorsement:
“The VTEM data is being further interpreted and refined
by Geophysicist Alan King of Geoscience North. Alan is a
recognized expert in electromagnetic exploration methods and previously served as the Chief Geophysicist for
Vale’s global exploration operations. He has worked as
a geophysicist in exploration and resource development
globally since 1976. Equitas will report the detailed target characteristics when final geophysical interpretations have been integrated into the exploration model.”
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April 20, 2015
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Considering Equitas’ market capitalization of 3.5 million
CAD, hand in hand with its tight share structure and freefloat (35 million shares issued), I anticipate a relatively
strong appreciation during the upcoming weeks and
months, especially in the weeks prior to the start of a drilling campaign; as the VTEM apparently identified 4 highly prospective drill targets on Garland (see map below).
“I am pleased to be technical lead in the Equitas
search for Canada’s next major nickel deposit.”
(Everett Makela, VP Exploration of Equitas Resources Corp.,
in a recent interview)
“Voisey’s Bay is a world-class nickel deposit, but it is
not the largest or richest example of its type; based
on its contained nickel metal, it is probably the seventh largest in the world. However, it is probably the
only place in today’s world where high-grade nickel
sulphide ores are known to sit close to deep-water
access… Large, high-grade nickel deposits are rare,
because they are difficult exploration targets. The
large exploration expenditures in Labrador in the
post-Voisey’s Bay years have still only scratched
the surface of a remote and poorly explored region.”
(A. Kerr in “Voisey’s Bay and the Nickel Potential of
Labrador: A Summary for the Nonspecialist”)
Above chart (15 min. delayed): http://scharts.co/1HzJOfn
Below: The recently discovered 4 anomalies have been
compiled into a map (source):
Initiating Coverage
April 20, 2015
I NTE RV IE W wi t h P ro fe ssion a l Ge ol og i st
EVERETT MAKELA
Mr. Everett Makela serves
as Equitas’ VP of Exploration bringing over 30
years of exploration experience to the team.
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provided a strong background in world-class mineralized systems, and in the business of building mines.
Exploration has taken me Canada-wide, and my international experience includes projects in USA, Mexico,
Greenland, South Africa and Brazil.
I am pleased to be technical lead in the Equitas search
for Canada’s next major nickel deposit.
During a career with Inco
and Vale, Everett held
roles of increasing responsibility in settings
ranging from grassroot
evaluations to near-mine
resource definition.
Why so little advanced-stage exploration in the region of a discovery the magnitude of Voisey’s?
The knowledge and expertise gained while working
with a global leader in nickel production has prepared
him well for the role of technical lead in the Equitas
quest for Canada’s next nickel mine. He excels at target
generation, design and implementation of exploration
programs, and the creation of joint venture and alliance opportunities. Everett holds an Honours Bachelor
of Science in Geology from Laurentian University, and
is a member of APGO, PEGNL, PDAC, and SEG.
The reality is that, after 20 years of exploration by
scores of companies combing the surface, the remaining prospective environments are buried.
Makela retired from Vale as Principal Geologist North
America in 2012. He is Director of the private consulting firm EFMX Consulting Ltd.
The following interview was conducted by Greg Klein
from ResourceClips.com on March 25, 2015.
Please inform us of your professional background
and how it fits with Equitas Resources and its Garland
Nickel Project.
My career began in 1981, as a geological assistant with
Inco Limited. I retired at the end of 2012 as Principal
Geologist, North America for Vale S.A. I have worked
alongside some of the leading experts in nickel exploration, and benefited greatly from access to the resources of leading global nickel companies. My experience spans the gamut from target generation through
to resource definition.
I was part of the Inco team that completed initial due
diligence at Voisey’s Bay in early 1995, and spent a considerable amount of time between 1995 and 2008 devoted to finding another Voisey’s style deposit. Years
of focus on the Sudbury and Voisey’s Bay camps have
When considering the clusters of deposits located in
major nickel camps such as Sudbury, Norils’k, Thompson and Raglan, the likelihood of discovering more
Voisey’s Bay-type deposits in the region is high.
In the case of the Garland project, that is most likely
under younger cover rocks. Voisey’s Bay itself was exposed by a fortunate erosional history. It takes a strong
commitment to advance the next stage. Commitment
to exploring the deeper sub-surface requires insight
into critical elements of the mineralizing process, and
employment of state-of-the-art geophysical methods.
How did the land package comprising Garland come
to be assembled?
The team at Dahrouge Geological Consulting Ltd. identified the Voisey’s Bay area as a top priority for discovery of Canada’s next major nickel mine. Recognizing
that the remaining prospective target areas were most
likely buried, and after extensive compilation, Garland
was selected and a property package assembled to
capture the most prospective area outside of the Vale
mine property.
What’s the major advantage of controlling a large
property package such as this?
Acquiring the Garland property has allowed Equitas to
deploy state-of-the-art geophysics to provide the next
new window of exploration, on a regional scale, into the
best target area outside of Vale’s Voisey’s Bay mine property. Casting a wide net always results in better fishing.
What were the results of exploration by previous operators?
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Previous operators, including Inco and Vale, conducted airborne geophysical surveys, geological mapping
and prospecting, limited ground geophysical surveys,
and one short diamond drill hole. Numerous clues that
a Voisey’s Bay type process may have been active at
Garland were identified. However, Voisey’s style mineralization has yet to be discovered.
Does Garland share similarities with Voisey’s?
Aside from having the same favourable address, along
an Archean-Proterozoic boundary, Garland and Voisey’s
share a remarkable number of geological signatures.
Both are at the intersection of a regional scale eastwest corridor of faults with a northeast trending brittle
event. Magnetic signatures and interpreted structural
deformation are very similar. Garland area has breccia
events with evidence of high temperature assimilation
of sulphur-source country rocks, akin to processes at
Voisey’s Bay. An island exposure in the bay between the
properties exhibits angular fragments of Voisey’s Bay
troctolite, indicating an extension of the Voisey’s Bay
intrusion towards Garland. Finally, regional and property scale mapping have indicated the intrusive history
and emplacement depths at Garland to be very similar
to Voisey’s, capped by flat-lying younger cover rocks.
What are the next steps?
Interpretation of the recently acquired Geotech
VTEM+ airborne survey data is ongoing. Integration of
the new data into the exploration model will allow the
design of ground follow-up programs to be completed
during the summer 2015 field season. Results from
this work will guide exploration drilling.
What advantages will Equitas gain from newer geophysical technology?
Previous airborne electromagnetic surveys at Garland evaluated for conductivity to a maximum depth
of about 75m. The VTEM+ system will provide Equitas
with a view of the next window of exploration, to a
calculated maximum of up to 750m for the detection
of large, highly conductive nickel sulphide deposits.
Is there anything you’d like to add?
I am pleased to say that I’m very impressed with the
Equitas team, and our shared commitment to forging ahead towards discovery during these challenging
times.
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I N T E RV I E W w i th P re s i d e nt K YLER H AR DY
Mr. Kyler Hardy serves as
President and Director of
Equitas. Hardy is a seasoned and successful entrepreneur who has been
involved in mineral exploration and the mining
industry for >14 years.
During his career, he has
gained a wealth of experience internationally as
well as across Canada. He
is a founder and former
CEO of a large geosciences and logistics management business which specialized in the exploration
and development of projects in remote areas. Hardy
is experienced in project generation, exploration management, logistics, raising capital, corporate development and developing alliances and strategic partnerships.
The following interview was conducted by Björn Junker
from Goldinvest.de on March 30, 2015.
Equitas acquired the Garland nickel project in September 2014. What made you focus on Nickel?
I have been following nickel and platinum group metals for several years. In many countries where nickel
is produced (Indonesia, South Africa, Russia, Philippines), there are geopolitical risks. For example, the
price of nickel reached in May 2014, a two-year, high,
since Indonesia exports of non-processed nickel ban –
which removed 20 to 30% of the previous bid by the
market.
Although the problem has now been settled after an
interruption of supply, it shows that these countries
may not be the best place to do business with. These
unstable and risky regions, which provide a large part
of the world’s nickel supply, open up the possibility
of supply disruptions and price increases. The structural problems in these areas cannot and will not be
solved overnight, and it can take years to resolve existing problems, as is the case for example in Mongolia
in relation to the huge copper and gold project Oyu
Tolgoi. There, the government’s interference delayed
the project by more than three years.
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April 20, 2015
While the issue was settled after a disruption in supply,
these are not necessarily the best places to do business and a significant quantity of our supply for these
commodity groups comes from these regions.
These unstable or risky regions which generally supply
a great deal of the global supply of nickel open up the
chance for supply disruption and price appreciation.
The structural problems in these areas such as that
described above will not be fixed overnight and it can
take years to resolve such issues as for example has
been the case in Mongolia over the large copper/gold
Oyu Tolgoi deposit where government interference
has delayed the project for over 3 years.
Additionally many of the long life nickel assets in the
western world are getting deeper to mine from and
with depletion of ore their sustainability cycle is diminishing. With very little attention on these commodities
over the last few cycles there has been minimal resource replacement and project advancement. In my
opinion, has nickel on the basis of these and other factors a good chance of a significant price increase in the
coming years.
It is a long-term, structural supply deficit forecast for
nickel as nickel projects were commissioned during
previous peaks and very few new projects were developed to replace them. In 2001 there were twelve
nickel projects with a capacity of more than 500,000
tons and were ready to go into production. 2014, there
were five nickel projects with around 200,000 tons,
were ready for production.
China, responsible for the increase in metal prices
over the past decade, nickel introduces and it is one of
the metals in which the land is offered the least selfsufficient. Any renewed economic growth would lead
to an increased demand for a country’s largest nickel
consumer is already the world. In addition, there are
speculations that China’s stockpile which were 25 million tons in 2013, quickly reduced. In addition, for example, the “Global Nickel Market Outlook Report” for
2015-2020 provides a good consumption growth for
the nickel market. It is assumed that the annual consumption of nickel in the various industries that use
the metal will rise from 2015 to 2020 by about 11%
(source).
Why Equitas has chosen specifically for the Garland
project? Why is this project in your view particularly
interesting?
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In 1993 Robert Friedland’s company Diamond Fields
Resources Ltd. discovered one of the richest nickel
deposits in the world (which is less than 30 km NW
from Equitas’ Garland Project with a similar geological
signature). This drove a staking rush in the mid 1990’s
triggered by drill results that confirmed this significant
nickel-copper-cobalt discovery at the Voisey‘s Bay. This
led to claims being distributed in small lots therefore
many areas were not systematically fully explored.
Our staking partner put nearly two years of research
into the Nain plutonic suite (the geological region of
the central coastal Labrador region) and the Labrador
Trough looking for opportunities that were never sufficiently followed up on after Friedland’s massive discovery or were completely overlooked during the previous
exploration booms. We also looked at the opportunity
to apply newer technologies such as the VTEM airborne survey and how this could change the opportunities available to the company since this new technology could investigate deeper geological structures than
they were able to during the Voisey’s Bay discovery.
After that extensive data evaluation we singled-out
that the Garland project was the highest priority target. We have consolidated a 25,050 ha land package
in the area, which as it turns out is one of the largest claim groups assembled to date by one operator.
Voisey’s Bay owned by Vale is the obvious glaring target
that we would like to find a sequel to. As far as a piece
of real estate goes Garland is in the logical place to locate a similar type deposit as the Voisey’s Bay deposit.
The open-pit mine in Voisey’s Bay has also now received
approval from the provincial government to operate
underground which has extended the life of the mine
to 2035. The mine in Labrador is an important player
in the nickel production. In 2012 the Voisey’s Bay produced 30 per cent of the total Canadian entire nickel
output. With the Sudbury district having 50+ deposits,
Manitoba Thompson district having 5+ deposits it indicates to us that nickel deposits tend to come in clusters.
Do you already have historic information on the project? What does that tell you about the project?
The project area has seen very little in terms of detailed mapping. The latest wave of exploration on the
property was completed by INCO Ltd., the precursor to
Vale Canada Ltd., between 2005 and 2008. They were
targeting the similar exploration concept that we are,
where this group or rocks shares similar bedrock and
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April 20, 2015
magnetic features as the Voisey’s Bay region. The company completed airborne gravity surveys, ground EM
surveys and one drill hole. Although the project has
only one historic drill hole, it demonstrated that the
property holds tremendous potential. The drill core recovered a sequence of variably textured gabbro-norites
with trace amounts of very fine-grained disseminated
sulphides locally. These relatively rare rocks are the
similar to the host rocks at the Voisey’s Bay mine.
Equitas has now completed an airborne VTEM survey
over the Garland property. What information will you
achieve; the previous owners were not able to?
Previous surveys in the area were done using an older
EM style airborne survey which was only able to penetrate approx. 60-75 m into the earth. These studies
excluded some east-west-trending structures from,
but were unable to reach an adequate depth to demonstrate the possibility of a much larger target or system. The VTEM system we use, penetrates to a depth
of more than 600 meters - at extremely high resolution. This will give us a clear view on what types and
sizes of ore bodies which lie beneath the surface and
hopefully represent some relationships that could not
be detected in previous studies.
Everett Makela, Equitas’ VP of Exploration, played a
leading role in regional evaluation targeting the entire
central coast region of Labrador, Nain Plutonic Suite
during his time at Inco and Vale. Vale terminated exploration in the area in 2008 right before the VTEM
method was readily available and field-proven. Everett
believes employing the VTEM technology will provide
a new, deeper insight and thus additional exploration
information that is critical to define new high quality
drill targets.
What will you do with the information gathered from
the VTEM, what will be your next steps?
The information gained from the VTEM survey will
very much dictate our next steps. Upon completion of
the survey our geophysicist will begin interpretations
and drill target picking. If all goes well we should be
able to target our Phase 1 drilling campaign off of the
results to test our highest priority targets. Ideally drilling could begin as early as mid-July 2015.
The Garland Project is located far north – will you be
on the look-out for another project, so you will be
able to work year-round? Will that also be a nickel
project?
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The Garland project is a fly-in/fly-out operation. Nearby infrastructure due to the development of Vale’s
Voisey Bay operations greatly reduces down the line
expenses if there is a discovery for Equitas. Due to the
weather conditions in the Voisey’s Bay area we should
be able to do ground work 6-7 months of the year.
We are dedicated to searching for the next major nickel
deposit and we are also dedicated to trying to increase
shareholder value. We know in these tough market
conditions the one mistake some exploration companies make is to cease their developments in hopes for
the ‘turnaround’. We believe the ‘turn around’ will be
created by ‘Voisey’s Bay-like’ discoveries. We plan to be
very active in our developments year round so acquiring
an additional nickel project or two is a secondary priority for Equitas. We are therefore looking in two Canadian jurisdictions as well as a South American country.
The intention is to set the Company up so we can create year round news flow and diversify our risk profile.
Regarding our project evaluations we have a very
strong team with significant nickel experience examining every aspect of the projects that are coming across
our desks. We have the advantage of a slow and depressed resource market on our side and are being
very selective about projects that we pursue.
Why, in your personal opinion, is Equitas Resources
may currently be at an interesting point for investors
in the Company’s development?
Equitas is to a large extent in the hands of management, insiders and some commodity funds. Our Independent Director Quang Jie Wang is Head of Overseas
Exploration for Zijin Mining Group Co. Ltd. which is the
largest resource company in China. They recently invested C$81 Million into Pretium Resources Inc. (TSX:
PVG) to put its Brucejack gold Project in British Columbia into production and on March 23, 2015 they
invested C$105 Million into Ivanhoe Mines Ltd. (TSX:
IVN), run by Robert Friedland. Through one of its wholly owned subsidiaries, Yield Gold Resources, Zijin Mining is a current shareholder in Equitas.
We have succeeded so far, every goal we have set ourselves, and to achieve. With the imminent completion
of the VTEM survey and the chance of a major discovery in an area with the largest producing nickel mine
in Canada, shareholders have the opportunity to in a
prospective exploration company that has the potential for a high grade nickel discovery.
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TH E N IC KE L P OTE NTIA L OF L A BR A D O R
Below is an excerpt of a governmental research paper
entitled “Voisey‘s Bay and the Nickel Potential of Labrador: A Summary for the Nonspecialits“ by A. Kerr from the
Newfoundland Department of Mines & Energy in 2003:
“The fact that over $250 million was spent in exploration of Labrador following the Voisey‘s Bay discovery
has led some to conclude that Labrador has been thoroughly investigates, but this is not the case. Although
this seems like a vast amount, it must be remembered
that the Voisey‘s Bay project itself accounts for about
half of this total, and most of this money was spent
within a few kilometres of Discovery Hill. Exploration
budgets elsewhere in Labrador typically allocated
about half the total spending to air support services,
notably helicopters; thus, the amount of money actually spent on the ground in exploration work is smaller than it first appears. Finally, many junior companies (some of which had existed for only a few months
previously) were attempting ambitious programs with
essentially no experience in either nickel exploration
or the hostile, remote environment of Labrador. Many
such programs were well-managed and systematic, but
the results of others cannot be considered conclusive
or exhaustive. In some areas, assessment reports were
never submitted to government, and the exploration
results cannot even be evaluated. The post-Voisey‘s
Bay exploration boom did not locate a second deposit
of comparable value, but it did result in the discovery of numerous new examples of magmatic sulphide
mineralization, many of which merit further attention.
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akin to the Ovoid, and suggest that any future discoveries around Voisey‘s Bay will be deeper, blind deposits, more akin to the Eastern Deeps. Deep-penetrating
AMT survey have also been conducted over much of
the immediate Voisey‘s Bay area, but the results of
these remain undisclosed. Recent results from deep
drilling in an area known as Ryan‘s Pond suggest that
a geological environment akin to the Eastern Deeps
may exist here, with interesting grades (the sulphide
metal contents here are up to 6% Ni). However, only
dispersed sulphide mineralization has been found to
date, and the great depth (>1400 m below surface) limits the practicality of detailed exploration from surface. Regions such as this will be more easily explored
following the establishment of underground mining.
The Voisey‘s Bay deposit is associated with a geological feature known as the Voisey‘s Bay Intrusion, which
is a body of igneous rock, i.e., a rock crystallized from a
magma that rose in the Earth‘s crust over a billion years
ago. The Voisey‘s Bay Intrusion is dominated by rocks
termed gabbro and troctolite, which themselves have
higher nickel contents than most other common rock
types. Moving farther afield, all areas known or suspected to be underlain by similar grabbroic or troctolitic rocks are prime exploration targets. At Voisey‘s Bay,
these locally occur beneath a thin screen of younger
granite, and do not form surface outcrops. The same
situation may exist immediately south of Voisey‘s Bay,
where existing mapping shows mostly granite and anorthosite. Inco has acquired the mineral rights to a large part of this area, and perhaps intends eventually to
test this hypothesis through geophysics and drilling.“
A well-known exploration proverb
states that “the best place to find
a new mine is next to door to an
old mine“. Although the Voisey‘s
Bay deposit is not yet a mine, this
area remains highly favourable
for future exploration. However,
five years of intense exploration
around the main deposits must
constrain our expectations. As
outlined above, large sulphide
deposits less than 400 m below
the surface should respond well
to EM surveys, and this area has
now been well covered by several such techniques. These results
appear to rule out the presence
of another near-surface ore-body
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CO M M ON GEOLOGIC TR A ITS O F
MA JOR NICK E L CA M P S
Below is from P.C. Lightwood‘s research (2007)
entitled “Advances in Ni-Cu-PGE Sulphide Deposit
Models and Implications for Exploration Technologies“:
“There are numerous studies that illustrate the common
characteristics of clusters of nickel sulphide ore bodies
that comprise deposits or groups of deposits within socalled ‘nickel camps’ or ‘significant clusters’. The world’s
eight most important camps: Norilsk (Russia), Sudbury
(Ontario), Voisey’s Bay (Labrador), Pechenga (Russia),
Thompson (Manitoba), Raglan (Quebec), Kambalda
and the Yilgarn Komatiites (Western Australia), Jinchuan (China), along with smaller deposits in China).
Sudbury, Ontario, Canada
Sudbury competes with Noril’sk as one of the two principal producers of nickel and for ranking as the world’s
largest nickel deposit. Sudbury is one of the largest mining camps, and some of the mines have been in near
continuous operation for over 100 years. The Sudbury
Igneous Complex (SIC) is a 1.85 Ga elliptical rock body
that is located on the boundary between the Superior
Craton and the Proterozoic Huronian Belt to the South.
The SIC is subdivided into a lower sequence of noritic rocks, a central sequence of gabbroic rocks, and an
upper sequence of granophyre (Naldrett and Hewins,
1984). The SIC is widely accepted to be the product
of a meteorite impact event (Grieve, 1994; Grieve et
al., 1991), and the process that gave rise to the ores
has now been reconciled with this genetic model
(Lightfoot et al., 1997a, b, 2001b; Keays and Lightfoot,
2004; Lightfoot and Farrow, 2002).
At Sudbury, there are a large number of deposits which
share features of one of these groups; thus ore deposit
models for the Sudbury nickel deposits are influenced by
the very specific and unique relationships that developed in response to a combination of meteorite-impact,
crustal melting, protracted differentiation of superheated sulphide saturated silicate magmas, gravitational
accumulation of the sulphides, and remobilization into
dilational structures in the footwall (Morrison et al.,
1994). Geological exploration models are supported by
deposit-scale surface and borehole geophysical surveys
that effectively image the strongly conductive sulphide
mineralisation in the absence of significant spurious
conductivity due to barren sulphides in the country
rock (Polzer, 2000; King, this volume; King et al., 2006).
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Voisey’s Bay, Labrador, Canada
The most significant recently discovered Ni sulphide deposit is at Voisey’s Bay, Labrador, Canada. The Voisey’s
Bay Intrusion consists of a series of 1.34 Ga olivine gabbros, troctolites, ferrogabbros, and ferrodiorites that
are within the anorthositic Nain Plutonic Suite. The
deposit is associated with a pair of small intrusive bodies termed the Eastern Deeps and the Western Intrusion that are linked by a conduit dyke. The intrusions
and the associated mineralisation are associated with
west-east oriented structures (Evans-Lamswood et al.,
2000) that cross-cut at right angles the broad boundary between the Proterozoic-aged Churchill paragneiss
to the west and the Archean Nain Orthogneiss to the
east (e.g., Lightfoot and Naldrett, 1999). Mineralisation
is spatially related to recrystallized inclusions of Churchill paragneiss (Li et al., 2000) that are of a very different source when compared to the immediately adjacent paragneiss. The Ovoid Deposit is located at what
is interpreted to be a dilation in the conduit dyke [an
alternate interpretation is that it is at the entry point
of the conduit into a now-eroded magma chamber
(Lightfoot and Naldrett, 1999)]; the Eastern Deeps Deposit is located at the entry point of the conduit into
the Eastern Deeps Chamber, and the location of the mineralisation is principally controlled by the injection of
massive sulphide and sulphideladen magma from depth
into the Eastern Deeps chamber (Lightfoot and Naldrett, 1999). Other deposits like the Reid Brook Zone are
associated with the same conduit, or with immediate
country rock structures (Lightfoot and Naldrett, 1999).
By far the most successful method of direct detection
of sulphide uses the resistive and conductive properties of magmatic sulphide ore bodies. Both barren and
nickeliferous sulphides are conductive and chargeable;
as are carbonaceous shales and graphite, so the application is complicated in belts with such country rocks
with geophysical properties that are too similar to the
exploration target. Disseminated sulphides typically
are unconnected, so although they can be targeted
using induced polarization methods, they are rarely
conductive. In contrast, massive sulphides are highly
conductive, and so a range of electromagnetic survey
methods has been developed to target mineralized systems by regional airborne geophysical surveying right
through to exploring extensions of ore bodies in existing mines using down-hole electromagnetic methods.
The success of these tools is well established (see King,
this volume), and it is unlikely that their position will
be usurped as key tools in the exploration toolbox.“
10
A simplified geological map of Labrador, showing the locations of the Voisey’s Bay Deposit and many other
examples of magmatic sulphide mineralization discovered during the exploration boom that followed
the Voisey’s Bay discovery. (Source)
Initiating Coverage
April 20, 2015
N ICK E L TR IV IA
• Discoverer: Axel Frederic Cronsted in 1751
• Symbol: Ni
• Atomic Number: 28
• Melting Point: 1,455°C
• Boiling Point: 2,913°C
• Mohs Hardness: 3.8
• Specific Density: 8.9 g/cm3
• Color: whitish-grayish
• Occurrence frequency in Earth Crust: 84 ppm
• More than 3,000 alloy variations exist with nickel
• Yet nickel is the most common trigger for human‘s
contact allergy (in Germany around 5 million people are
allergic against nickel; a reason why fewer metals are alloyed with nickel. In the US, every 4th kid below 5 years
suffers from a contact allergy).
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• Native nickel does not form on earth; except inside the earth‘s core or where a meteorite fell on earth
(which was the case in the Sudbury District). The highest
nickel grades (7-15% Ni) are hosted by iron meteorites.
• Nickel is resistant to corrosion, has high strength
over a wide temperature range, has a quite pleasing
appearance, whereas its suitability as an alloying
agent make it useful in a wide variety of applications.
• Stainless steel is the predominant use of nickel as
being the material of choice for consumer safety and
hygiene (e.g. household equipment, domestic appliances, equipment for the food industry, pharmaceutical production tools, surgical equipment). Stainless
steel is also extensively used in building and construction, transportation, and heavy industries such as
chemicals and petrochemicals.
Principal uses for primary nickel (approximate %):
1) Stainless steel (65%)
2) Nickel-based alloys (12%)
3) Electroplating (10%)
4) Casting and alloy steels (8%)
5) Rechargeable batteries (3%)
6) Coins (1%)
• The 1 and 2 Euro coins also contain
nickel. The ring of the 1 Euro coin is
made from nickel-brass, whereas
the middle part contains coppernickel, then nickel and then again
copper-nickel. The ring of the 2 Euro
coin is made of copper-nickel and the
middle part contains nickel-brass,
then nickel and again nickel-brass).
• The 5 Cent coin in the US is called
“Nickel“ as it contains nickel (besides
copper).
• Name: Originally “Niggel“,
since miners in Germany‘s
Saxony mistakenly thought
that the reddish nickel ore
mineral, nickeline, from
the Annaberg District was copper ore, however “by
hook or by crook“ and “bedeviled by ghosts“ it was
impossible to extract copper from it; hence the miners desperately calling it “niggel“ (colloquial for
“devil and other ghosts“) and “kupferniggel“.
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April 20, 2015
According to the publication “2012 Nickel Commodity Review“ by Natural Resources Canada (NRCan):
• Canada mined roughly 16 million t of ore containing
an estimated 218,564 t of nickel in 2012.
• 2 companies (Sherritt International Corp. and Vale
SA) produced a total of 152,500 t of refined nickel
from 3 refineries.
• Canada ranked 4th among world nickel producers
after China (519,200 t), Russia (256,000 t), and Japan
(169,000 t).
• Canada exported 80,756 t of nickel in matte to Norway and 39,347 t of smelted nickel oxide to the UK.
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1.) Sedimentary Nickel Deposits:
Nickel laterite (lateritic weathering of serpentine
rocks, so-called nickel-hydrosilicate deposits, where
nickel is associated primarily with olivine; roughly
35% of world supply from nickel laterites) – Examples:
Poland; Saxony (Germany); Orsk-Chalilowo (Ural,
Russia); Cuba; Philippines; Australia; New Caledonia
(discovered by geologist Garnier in 1863; the mineral
garnierite was named after him; a third of the island
is made up of serpentinized peridotites from which
hundreds of open-pits are mining some 35,000 tonnes nickel annually).
2.) Sulphidic Nickel-Copper Deposits (Magmatic Genesis):
Together with cobalt and PGM (“Platinum Group Metals“), whereas the ore occurs as inclusions (0.3-0.5%
nickel) and/or massive (1-2% nickel); oftentimes copper
occurs with similar grades. Ore minerals: Pyrrhotite,
chalkopyrite, pentlandite, cobaltite and PGM minerals.
Type A: Hydrothermal Nickel Deposits
(vein deposits of bismuth-cobalt-nickel-silver-uranium formation (silver near surface and cobalt-nickel
at depth) – Examples (historic): Germany (Annaberg,
Schneeberg, Marienberg, Erzgebirge, Saxony, Bohemia); Canada (Cobalt City, Ontario).
Type B: Liquidmagmatic Nickel Deposits
(nickel enrichment mainly in basic rocks; e.g. norite
and peridotite with pentlandite intergrowing with pyrhhotite) – Examples: Sudbury (Ontario, Canada; the
world‘s largest nickel district with significant amounts
of copper and platinum; reserves of around 1 billion
tonnes nickel producing roughly 120,000 tonnes nickel and 10 tonnes PGM annually); Norilsk (Siberia,
Russia; production of around 180,000 tonnes nickel
per year representing roughly 20% of world mining
supply); Stillwater (Montana, USA); Kambala Greenstone Belt (West-Australia); Bushveld Merensky Reef
(South-Africa); Chalilowo (Ural, Russia); Kola (Russia).
• Basically, there exist just 2 commercially significant
nickel deposit types: Silicate-type and sulphide-type
(latter has >50% of the world‘s reserves and around
75% of global mine supply).
• Economic grades for primary nickel deposits are typically >1% nickel; however highly depending on the size
and chemical composition of the deposit (thus metallurgy plays a more important role than grade).
Exploration for Magmatic/Sulphidic Nickel Deposits:
As the sulphide mineralization is mainly comprised
of pyrrhotite, pentlandite, and chalkopyrite, such deposits are highly conductive; thus electromagnetic
(EM) studies work effectively. The deposits oftentimes have an association with ultramafic rocks, which
produce strong magnetic anomalies and which can
be detected with regional magnetic studies. The
other massive sulphides show strong density contrasts, thus gravitation techniques can be employed
to identify those.
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April 20, 2015
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Nickel monument
in Sudbury, Ontario
“The original mineral discovery at Voisey’s Bay was
made in late 1993 while conducting a regional exploration program by Archean Geological, under contract to Robert Friedland’s Diamond Fields Resources; the geologists noticed an outcrop at surface. The
property was claim-staked in early 1994 after surface samples returned high nickel and copper values.
Above: The Voisey’s Bay Mine and port facilities in nearby
Anaktalak Bay.
Below: The Long Harbour Processing Plant (LHPP) began
operations in 2014 (nickel concentrate from Voisey’s Bay is
shipped to LHPP to be processed into finished nickel and
associated copper and cobalt products):
Drilling commenced and grades were coming back
which encouraged investors and spectators that
the property could hold one of the highest graded
nickel ore bodies in the world. In August 1996, after
many negotiations and transactions, Inco Limited
purchased the Voisey’s Bay property from Diamond
Fields for $4.6 Billion. Approximately 420 diamond
drill holes were completed for a total of about
205,000m of drill cores by August of 1997.
The Voisey’s Bay Mine commenced production in
2005, with reported reserves of 17.2 million tonnes
of ore grading 2.38% Ni, 1.34% Cu and 0.11% Co
(2013 proven and probable reserves). Total resources have been estimated at well over 100 million
tonnes. In 2012, at the Voisey’s Bay Ovoid Mine in
Newfoundland and Labrador, Vale reported mining
2.35 Mt of ore containing 3.11% nickel (73,116 t),
1.94% copper (45,600 t), and 0.052% cobalt (1,221 t).
The Voisey’s Bay District is thought to be at its very early stage of exploration and development compared
to other world-class nickel and base metal districts,
such as Sudbury Ontario and Thompson Manitoba.
Therefore the region could hold excellent potential
for additional discoveries. Recent advances in modern geophysical exploration technologies add to
the potential for an economic discovery.“ (Source)
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April 20, 2015
BOA RD O F DIR EC TORS & M A NAGEME N T
Quang Jie Wang (Director)
Mr. Quang Jie Wang is a highly experienced geologist
with extensive experience in North America and internationally, managing a wide range of mineral and
exploration projects.
Mr. Wang is currently the Head of Overseas Exploration of Zijin Mining Group Ltd. and is Zijin‘s nominee to
serve on the Equitas Board of Directors. Zijin is a large-scale state-owned mining group, the largest gold
producer, the second largest copper producer, and an
important zinc, tungsten and iron ore producer and
refiner in Mainland China.
Zijin operates the Zijinshan Gold Mine, the largest
open pit gold mine in China along with 3 other gold
mines in production. As of the end of June 2014, Zijin‘s
total asset was $12 billion USD, representing a 12%
increase over the beginning of the year. In 2014, the
Group produced 5.1 million ounces of gold, representing a 46% growth over the same period last year.
The production included 138,462 tonnes of mined
copper (including 17,741 tonnes copper cathodes),
representing a 11% growth; 300,485 tonnes of zinc,
representing a 19% growth over the same period last
year; the production of which included 96,261 tonnes
of mined zinc, representing a 34% growth; 2.8 million
tonnes of iron concentrates, representing an increase
of 7% over the same period last year.
According to the company, Zijin has always been the
leader in terms of geological prospecting, low grade resource exploitation, and hydrometallurgy. It has been
approved to set up the National Key Laboratory, the
Post Doctoral Research Center, and National Technology Center, etc. Zijinshan Gold/Copper Mine is listed as
one of China’s first demonstration bases for comprehensive use of mineral resources and the Malipo Tungsten Mine is awarded as the National Example for Mineral Resources Consolidation by Ministry of Land and
Resources. Zijin Mining College, co-established by Zijin
and Fuzhou University, is also worth mentioning as it has
effectively filled the shortage of mining professionals.
Tim Fernback (Director)
Tim brings to Equitas over 20 years of experience in financing and managing public and private junior companies. Previously he oversaw a prominent British Columbia venture capital firm specializing in financing
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and consulting, and later ran the Investment Banking/
Corporate Finance Division for the Western Canadian based brokerage firm, Wolverton Securities Ltd.
Dave Hodge (Director)
Mr. Dave Hodge, President and Director of Zimtu Capital Corp. has an extensive background in business that
includes over 15 years of experience in the structuring,
financing, and management of private and publicly-traded companies. Mr. Hodge has been a director of mineral exploration companies since 1996, and served as
President and Director of Commerce Resources Corp.
from its initial public offering until recently, whereas
he still serves as CEO. Mr. Hodge also serves on other
boards, such as Western Potash Corp. and Lakeland
Resources Inc. Hodge‘s strengths lie in leadership and
imaginative direction. His success has been founded on
a belief in team building, consultation and strong leadership, as well as a willingness to incorporate expert
advice into a viable working enterprise and network.
Jay Roberge (Director)
Mr. Roberge has around 20 years of business and
public company experience, having served in several executive management and board positions with
various private and public companies. In these roles
he has provided management, strategic consulting,
M&A advisory and financing services to early stage
companies in the energy, resource and tech sectors.
Sean Kingsley
(Manager Corporate Communications)
Mr. Kingsley has been working in the mineral exploration industry for over 7 years. He’s worked on a variety of
different metals, minerals and energy since then. He’s
passionate about sharing the benefits of the mining industry to anyone that will listen. He sits as Vice-Chairman
of the Communications Committee at the Association of
Mineral Exploration BC. Established in 1912, AME BC is
the predominant voice of mineral exploration and development in British Columbia. He also hosts Vancouver,
Canada‘s leading mineral exploration and mining industry social networking event. Each month individuals interested or active within the industry meet in Vancouver,
Toronto, Montreal, Australia and Peru plus other areas.
Frances Petryshen (Corporate Secretary)
Ms. Frances Petryshen brings over 25 years of management experience with a specialization in corporate
compliance and governance for public, private and
not for profit organizations. She has been a Director
and Officer of several public and private companies.
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April 20, 2015
Most recently, Ms. Petryshen was Corporate Secretary for CanAlaska Uranium Ltd. (2007-2012), where she
oversaw the company‘s transition and growth from
the TSX Venture Exchange to the TSX main board.
Ms. Petryshen is an Accredited Director and a Fellow
with the Institute of Chartered Secretaries and Administrators („ICSA“), where she currently serves as
Director and Chair of the BC Branch and is also a Director for the Committee for Canada.
Jody Bellefleur (CFO)
Ms. Bellefleur has been the Chief Financial Officer of
Equitas since February 2014. She has also been the
CFO of Zimtu Capital Corp. since June 2013, and has
been with the Zimtu group since 2008.
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N I C K E L: T H E O U T P E R FO RM ER
Nickel was the best performing metal in 2014 finishing off the year with a +20% gain, whereas its price
rose strongly (+50%) within the first 5 months. Nickel
is Morgan Stanley’s top commodity pick for 2015; with
a price target of 19,842 USD/lb in 2015 (+58 from its
current price of 12,590 USD/lb):
“Persistent price support/driver is Indonesia’s
laterite export ban; price tension to return
during stainless steel-led seasonal uptick
in trade flows in 1Q15.”
(Morgan Stanley; Global Metals Playbook 2015)
She is responsible for all aspects of the regulatory
financial reporting, including preparation of quarterly financial statements and management discussion
and analysis for all the companies in the Zimtu group.
Prior to joining Zimtu, she worked independently
as an accountant for various publicly listed mineral
exploration companies, and prior to that, as an accountant with a private manufacturing company. Ms.
Bellefleur is a CPA, CGA and a graduate of the University of British Columbia with a Bachelor of Commerce.
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April 20, 2015
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Picture above: Off-loading Sudbury nickel matte at Nikkelverk,
Norway (Source)
Glencore in its Investor Day presentation (12/2014):
“Nickel Market Transitioning to Deficit;
Balanced 2015 and Deficits Thereafter:
• Nickel demand growth conservatively projected at
c.4.5% p.a.
• Substantial deficits forecast over the outlook period.
• LME nickel price rallied to $21,200/t in May, up 52%
from the start of the year. Prices subsequently settled
in an $18,000-$20,000/t range, then declined rapidly
from Sep, along with commodities in general. Market
recently recovered most Sep/Oct losses.
• The increase in price was primarily driven by the
Indonesian ban on nickel ore exports and the anticipation of reduced nickel output.
• Yet, continuous increases in LME inventory, Chinese
metal exports, higher Philippine ore exports, macroeconomic downgrades and liquidity issues in China
have all impacted sentiment and nickel prices.
NPI Output Supported by High Grade Ore Stocks:
• Significant stockpiles of Indonesian high grade ore
(>1.8% Ni) were built in China prior to the export ban
(27Mt HG/MG ore).
• These stockpiles, blended with Philippine ore, have
supported continued high levels of Chinese nickel pig
iron (NPI) production in 2014 (c.480Kt Ni) albeit with
production decreasing Q on Q.
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• Estimated at over 20Mt at the start of the year,
stockpiles of high grade ore in China are currently
below 10Mt and trending towards critical levels.
• Philippine shipments will decrease in the coming
months due to the monsoon season. Shipments will
not pick back up materially until April when Surigao
area exports resume.
• HG stocks will be at critical levels by April 2015 and
seasonality will become a major factor going forward.
Philippine Ore Supplies Determine Chinese NPI Outlook:
• With the Indonesian ban on ore exports sustained
(also confirmed by recent Constitutional Court ruling), Chinese inventory of Indonesian high grade ore
will ultimately deplete and NPI production will depend on ore exports from the Philippines.
• 2014 Philippine exports to China are forecast at
c.52Mt wet ore and constitute LG >50%, MG >30%
with the balance HG. Lower average grade ores increase NPI production costs, all things being equal.
• No game changers elsewhere: New Caledonia may
supply 1-2Mtpa additional ore to market while Guatemala may supply up to 30kt Ni contained in higher
grade ore to European FeNi plants.
• Based on our projection of volume and composition of Philippine ore supply, China’s NPI production is
forecast to fall from 480kt Ni in 2014 to 400kt Ni in
20151 and 350-400kt Ni over the outlook period.
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April 20, 2015
Supply Outlook – Limited Growth Amid Ore Ban:
• Global nickel supply in 2014 is forecast to be relatively
unchanged on 2013 as decreased output from existing
producers and Chinese NPI is offset by increased production from new projects.
• Longer term, Chinese NPI production is forecast at
350-400kt vs. 510kt in 2013. However, increased supply
from new projects (all going well) should offset projected losses and overall supply growth is forecast at c.1%
p.a. to 2019.
• China’s NPI dependence on lower grade ore from the
Philippines will increase production costs.
• Ramp up performances highlight the need for a cautious outlook, with the majority of new projects delayed
due to technical, environmental, permitting and social
challenges.
• We assume limited growth in actual Indonesian NPI
output. While capacity will be built in a higher price
environment, the extent and pace of commissioning is
likely to be challenged for a variety of reasons.
• We forecast less than 100kt Ni in Indonesian NPI by 2019.
Demand Outlook – Solid Growth in Key Markets:
• “While the days of double-digit growth in China are
over, the greater size of the economy means lower
growth still translates into strong absolute demand…
It’s slower not lower.” (Julian Kettle, Wood Mackenzie)
• Primary nickel demand in stainless steel is projected
to increase c.5% in 2014, reflecting growth in China,
North America, Japan and India. Longer term, we forecast global nickel demand in stainless to increase at a
rate >4.5% p.a., predominantly driven by China (Global
CAGR 2008-2013: 9.6% p.a.).
• Activity in non-stainless applications is also robust with
nickel usage projected to increase >8% in 2014. Going
forward, non-stainless demand growth is forecast >4%
p.a., with strong contributions from China, US and India.
• Overall, we project solid nickel demand growth of
c.4.5% p.a. between 2014 and 2019 (CAGR 2008-2013:
7.1% p.a.).
• Put simply, we conservatively expect demand will increase by 75-100Kt Ni per year.
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April 20, 2015
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Expanding Deficits to Emerge:
• Assuming the Indonesian ban on ore exports is sustained, market deficits will emerge.
• Increased supply from new projects (all going well)
supports global production growth of c.1% p.a. to 2019.
• With nickel demand growth projected at a conservative c.4.5% p.a., the market is expected to transition
to deficit, with substantial deficits forecast from 2018.
• Long run nickel pricing will largely be determined by
the cost of bringing on marginal (low grade) limonite
ore processing capacity.
• We do not see any new low cost technologies that
will alter the outlook.“
TD Securities expects the start of a nickel supply deficit in 2015 with 12,000 tonnes. In 2016, the deficit
is anticipated to increase 9-fold to 104,000 tonnes nickel. TD Securities as per their latest research report
“2015/2016 Metals & Minerals Outlook“ (01/2015):
“Nickel — Supply Deficit Expected —
Global Nickel Market Deficits Emerge in H2/15:
As NPI [Nickel Pig Iron] production starts to contract
in China during 2015, the nickel market is expected to
move into deficit during the second half of the year.
Deficits are expected to increase into 2016. Global
nickel demand is forecast to expand year-over-year
by ~3% in each of 2015 and 2016, while refined production should contract ~1% in each year. Growing
deficits should lead to a reversal of the rapid expansion of visible nickel inventories that put downward
pressure on the nickel price in 2014.
We maintain our long-term price of US$10.00/lb
(starting in 2017): We expect that under-investment
in new global nickel production capacity (outside of
NPI production) that has been the result of a protracted period of low prices will result in much tighter nickel markets over the medium to longer term.“
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Morgan Stanley, in its Global Metals Playbook 2015, comments as follows on the positive outlook for the nickel price:
“Indonesia’s trade shock has yet to play out:
• Frustrating year revisited: We were all nickel bulls,
early 2014: its price was to jump on Indonesia’s ban of
Ni-bearing laterite exports, as China had no other ore options (the Philippines too small; other sources already engaged). Soon though, it became clear that there was adequate ore in the supply chain (pre-emptive stocking by
China, as with bauxite); the mid-year Qingdao port probe
prompted a release of previously unknown metal (i.e.
record-high LME inventories); China’s industrial activity
weakened anyway. Nickel’s price retreated on these drivers to below MCP; recovering a little by year’s end on speculation around monsoonal supply risk in the Philippines.
• Shortfall’s real: We still believe that Indonesia’s
trade ban is a price driver for the metal: it just needs
more time to play out. China’s laterite inventories are
being run down, and the development of Indonesia’s
downstream processing capacity is proving far slower
than the general market probably expects.
• 1Q15 seasonal kick: In addition to a troubled supply
growth story, we also expect a seasonal lift in 1Q15’s
trade to support the metal’s price in 2015, making nickel
one of our top picks. Stainless steel output expands with
the rest of the industry in this quarter, typically led by
China, but with US support this year.
• Indonesia shortfall quantified: When Indonesia announced its plan to push for the development of domestic downstream ore processing capacity in 2009, nickelin-laterite exports (and some metal) represented 15%
of global supply (200-300ktpa). During 2009-14, China
boosted imports ahead of the trade ban, distorting
China’s apparent consumption data. With the ban in
place, what’s actually been done downstream? China’s
stainless steel giant, Tsingshan (via JV Sulawesi Mining
Investment) has developed capacity for up to 300ktpa
NPI, ramping from 2015; Cahaya Modern Metal Industry
began late 2013; Indoferro’s 8ktpa from 2012 – all delivering 15-40ktpa in 2015-18. Significant, but still not sufficient to replace Indonesia’s pre-ban and 300ktpa rate.
• First-use update: Global stainless steel dominates nickel demand (70% of primary metal demand), itself dominated by China (50% global demand; 50% of global
melt capacity too). We expect melt production to rise
5% YoY in 2015 (China’s up 12% YoY).“
Initiating Coverage
April 20, 2015
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Disclaimer and Information on Forward Looking Statements:
All statements in this report, other than statements of historical fact should be considered forward-looking statements. Much of this
report is comprised of statements of projection. Statements in this report that are forward looking include that nickel and base metal
prices are expected to rebound; that Equitas Resources Corp. or its partner(s) can and will start exploring; that exploration will discover a
mineable deposit; that the company can rais sufficient funds for exploration; that any of the mentioned resource estimates are valid or
economic. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in these forward-looking statements. Risks and uncertainties respecting mineral exploration
and mining companies are generally disclosed in the annual financial or other filing documents of Equitas Resources Corp. and similar
companies as filed with the relevant securities commissions, and should be reviewed by any reader of this report. In addition, with
respect to Equitas Resources Corp., a number of risks relate to any statement of projection or forward statements, including among
other risks: the receipt of all necessary approvals and permits; the ability to conclude a transaction to start or continue exploration; uncertainty of future nickel and base metal prices, capital expenditures and other costs; financings and additional capital requirements for
exploration, development, construction, and operating of a mine; the receipt in a timely fashion of further permitting for its legislative,
political, social or economic developments in the jurisdictions in which Equitas Resources Corp. carries on business; operating or technical difficulties in connection with mining or development activities; the ability to keep key employees, joint-venture partner(s), and
operations financed. There can be no assurance that such statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking
information. Rockstone and the author of this report do not undertake any obligation to update any statements made in this report.
Disclosure of Interest and Advisory Cautions:
Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Rockstone, its owners and the
author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an
online or printed report, including Rockstone’s report, especially if the investment involves a small, thinly-traded company that
isn’t well known. The author of this report is paid by Zimtu Capital Corp., a TSX Venture Exchange listed investment company. Part
of the author’s responsibilities at Zimtu is to research and report on companies in which Zimtu has an investment. So while the
author of this report is not paid directly by Equitas Resources Corp., the author’s employer Zimtu will benefit from appreciation
of Equitas Resources Corp.’s stock price. In addition, the author owns shares of Equitas Resources Corp. and would also benefit
from volume and price appreciation of its stock. In this case, Equitas Resources Corp. has one or more common directors with
Zimtu Capital Corp. Thus, conflicts of interests exist. The information provided herewithin should not be construed as a financial
analysis but rather as an advertisment. The author’s views and opinions regarding the companies featured in reports are his own
views and are based on information that he has researched independently and has received, which the author assumes to be
reliable. Rockstone and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of
this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned
in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.
Analyst Profile and Contact:
Stephan Bogner (Dipl. Kfm. FH)
Mining Analyst
Rockstone Research
8050 Zürich, Switzerland
+41-44-5862323
sb@rockstone-research.com
For more information and
sign-up for free newsletter,
please visit:
Stephan Bogner studied at the International School of Management
(Dortmund, Germany), the European Business School (London) and
the University of Queensland (Brisbane, Australia). Under supervision of Prof. Dr. Hans J. Bocker, Stephan completed his diploma thesis (“Gold In A Macroeconomic Context With Special Consideration
Of The Price Formation Process”) in 2002. A year later, he marketed and translated into German Ferdinand Lips‘ bestseller („Gold
Wars“). After working in Dubai for 5 years, he now lives in Zurich
and is the CEO of Elementum International AG specialized in dutyfree storage of gold and silver bullion in a high-security vaulting facility within the St. Gotthard Mountain Massif in central Switzerland.
23
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April 20, 2015
“Due to the nature of the beast, exploration for nickel sulphides is heavily reliant on geophysics, in particular electromagnetic methods. There are no large detectable multi-km alteration halos as present in porphyry, VMS and other
mineralized systems. Even weak one line AEM responses can be the signature of buried economic mineralization.
Careful consideration of all anomalies is a must. Garland is not really an “old” or mature property in terms of nickel
exploration, having been the intermittent focus of attention for some 20 years. For example, significant discoveries in
Sudbury using state-of-the-art geophysical methods continue to be made on properties first evaluated in the early 1900’s.
Previous work at Garland partially evaluated the near-surface, down to a maximum depth of about 75m for significant
conductivity. Past exploration includes one short drill hole completed in the very northern part of the property, to map the
geology. VTEM provides the next window, an order of magnitude deeper depth detection. This depth slice if you will is entirely consistent with our exploration model of Voisey’s style and age mineralization being covered by sheet-like intrusions of
the younger ferrodiorite event. This model is supported by the geology I have observed in the region and on the property.“
(Everett Makela, VP Exploration of Equitas Resources Corp.)
www.rockstone-research.de

Initiating Coverage - Rockstone Research

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Developing New Nickel Resources Voisey`s Bay Project

Minerals - Saskatchewan Mining Association

See back for a brief historical description of each location.

The Voisey`s Bay Project 2002

fox secures new nickel offtake agreement for sholl b2

The Portable DC Jackrabbitpack ll

Exploration Update - Windward Resources

Career`s with Voisey`s Bay Nickel Company Limited Commercial

Equitas Acquires Turnkey Gold Mine For Near