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The First Drill Program
In February 2004, drilling began at the South Bay
Nickel property to test for extensions to the surface mineralization discovered
in a road cut and a number of geophysical and geochemical targets located within
the 2 square km grid area, at the centre or our 300 square km property. The
2,717 metre diamond drill program finished in April 2004. This first drill
program did not locate an extension of the discovery mineralization found in the
road cut. The drilling did confirm the presence of ultramafic intrusive rocks
and also a unique chemical sedimentary rock unit known as Sulphide Iron
Formation. This type of chemical sedimentary rock is a fundamental requirement
for the formation of large nickel sulphide ore bodies.
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Subsequent Studies
In September, 2004 the Company hired Dr. Walter
Peredery, a leading expert in Nickel exploration, to visit the property and
conduct a technical review of the South Bay, Manitoba nickel project. Dr.
Perederys’ investigation was focused on resolving issues pertaining to the
geological environment of the mineralized zone, the nature of the high-grade
occurrence and the drill results from the spring 2004 program. He was also asked
to provide strategic advice to the company as it continues its search for
economic accumulations of nickel mineralization at South Bay. Dr. Perederys’
property visit included examination of drill core and surface outcrop. Dr.
Peredery is an internationally recognized expert in Nickel exploration with over
40 years of experience including 32 years of active exploration with INCO Ltd.,
the worlds largest nickel producer.
Upon completion of his property examination and follow-up petrologic microscope
and geochemical studies, Dr. Peredery recommended an exploration strategy
including a comprehensive geological-structural mapping of the project area to
be followed by ground and airborne geophysical surveys, if warranted by the
results.
In November, 2005, the Company received the report on the structural geology
mapping study undertaken by Robert K. Springer, PhD; P.Geo The study summarizes
the rock units that host the nickel mineralization and the structural events
evident in the rock including episodes of folding, faulting and shearing. Dr
Springer concluded that the mineralization is hosted in a sedimentary sequence.
In August 2006, company President John Roozendaal, and Vice President of
Exploration Dr. George Gale, accompanied Dr Springer to the property to review
his findings.
In April 2007 the Company contracted a VTEM survey of the claims. Several
previously unknown conductors were identified. These will be subjected to
follow-up exploration in 2008.
The Future
VMS Ventures Inc. plans to undertake further
geochemistry surveys to establish future drill targets. The company will also
consider joint venture partners for the South Bay project.
Value Proposition
Minimum target: a 5 million tonne deposit, grading 2% Nickel equivalent.
Using this target as a model for calculating the Gross Metal Value of a deposit
in the ground,
2%
nickel represents approximately 40 pounds of nickel per tonne.
40 lbs of nickel multiplied by a price for a pound of nickel of $22.00 US
totals a
value of $880.00 US per tonne.
5 million tonnes of rock grading 2% nickel would have a Gross Metal Value of
approximately
$4.4
billion US in contained metal.
Comparable Mine: Lynn Lake Ni-Cu Mines produced over 20 million tonnes averaging
1% Ni.
The
mine life was over 20 years.
Disclaimer: This value will,
obviously, be discounted significantly, as it represents the value of
metal
prior to all the costs associated with mining, but we provide it to give
readers some context;
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