Read Report - Nuinsco Resources Limited

14
2005 ANNUAL REPORT
In 2004, the loss in the fourth quarter was in
large part due to the loss on the sale of the Rainy
River property at less than book value. The
profit in the first quarter of 2004 was due to the
recognition of tax benefits from the renunciation
of the 2004 flow-through share expenses.
BERTA
COPPER-GOLD
PROPERTY
EXPLORATION AND
DEVELOPMENT ACTIVITIES
An active exploration program continued during
2005 when a total of $3.0 million was incurred
on exploration activities, compared to $3.1
million in 2004. The largest programs in 2005
were on the Diabase Peninsula uranium property
where $0.9 million was spent toward the $1.0
million expenditure required to earn 50% of the
project; on the Minago project, where $0.7
million was spent on drilling and metallurgical
test work in preparation for a scoping study;
and on the Berta property in Turkey where the
Company completed $0.5 million of geological
work, the required expenditure to earn its 50%
interest in the project. Pursuant to the joint
venture agreement, Falconbridge has elected
to participate in the project and will contribute
prorata on future expenditures. Complete details
of the mineral properties can be reviewed in the
2005 Annual Report.
Mel Property Nuinsco has spent a total of
$3.9 million to the end of 2005 on this project.
To earn a 100% interest in the project, the
Company was required to spend a total of
$6.0 million by February 28, 2006. Inco Limited
(“Inco”) has the right to earn back a 51% interest
in the project. The Company did not meet its
required expenditure by February 28, 2006 due
to the absence of a proposed program from
its joint venture partner which would allow
Nuinsco to meet its required expenditure level.
As a result, in 2005 the Company took a writedown
of the total amount spent on this
property. The Company is in discussions with
Inco to reach an agreement which will allow
the joint venture to go forward. In the absence
of such an agreement at this time, the writedown
was required. The Mel property consists
of two components: the Mel Claims
encompassing 14,700 ha and the Mel Lease
of 750 ha.
Diamond drilling conducted on the Mel
property in the winter 2005 program was
located on the Mel Claims; six, widely spaced,
drill holes, totalling 2,507 metres (8,223 feet),
were completed. With the completion of the
2005 drilling, “high priority” UTEM geophysical
targets previously defined by Inco have now
been tested. All 2005 drill holes intersected
sulphide and graphite mineralization, explaining
the UTEM target on which each hole was
collared. Only the first hole collared (DDH
112801) intersected weakly anomalous nickel
mineralization – in the 0.12-0.13% range over
several feet in approximately 70% sulphide.
On the Mel Lease, a single borehole EM survey
was conducted on a drill hole located
approximately 600 metres (2,000 feet) north
of the Mel Deposit and completed in 2004.
The survey produced a positive result,
interpreted to be nickeliferous sulphide
mineralization on the trend of the Mel Deposit.
Also on the lease, overburden drilling highlighted
the poor geotechnical characteristics
of the clays overlying the Mel Deposit.
MANAGEMENT’S DISCUSSION & ANALYSIS