Read Report - Nuinsco Resources Limited

4
2005 ANNUAL REPORT
ceo’s message to shareholders
MY FELLOW SHAREHOLDERS
In addition to proven exploration capability, one of
Nuinsco’s strengths is a wealth of expertise in mine
operations, development and finance. Our stated
goal has been to deploy this expertise by making
the transition to production while maintaining
significant exploration upside. I’m pleased to report
that, subsequent to year end, Nuinsco announced
an agreement with gold and copper producer
Campbell Resources Inc. that puts us on the fast
track to achieving this goal.
We expect all aspects of the deal with Campbell
will be in place by the third quarter, including an
Operating Management Agreement under which
Nuinsco will provide management services for the
operation of Campbell’s mines near Chibougamau,
Quebec. The deal is a significant step forward for
both Nuinsco and Campbell, and offers upside to
Nuinsco shareholders in a number of ways.
First, we can receive up to a 29% equity interest
in Campbell, which currently has two production
assets – the Joe Mann and Copper Rand mines.
Collectively, Joe Mann and Copper Rand produced
over 36,000 ounces of gold, almost 7.7 million
pounds of copper and more than 43,000 ounces
of silver in 2005, and we see very real potential
to increase production, cash flow and profitability
to add to the value of our shareholding.
With additional exploration and development,
we feel Joe Mann has a fairly long life ahead of it.
As for Copper Rand, Nuinsco will assist in further
developing the mine with the objective of doubling
production to an annualized rate of 350,000 tons
in 2007.
Second, we receive a 50% interest in Campbell’s
advanced Corner Bay copper deposit by obtaining
$4 million in financing. Corner Bay is a very robust
project that currently has measured and indicated
resources of 1.1 million tons grading 5.25% copper,
an additional inferred resource of 874,000 tons
at 6.6% copper, and the potential for more. Based
on studies done by Campbell, the upper part of
the Corner Bay deposit should take about a year
to bring to production at an estimated cost of
$9 million to $12 million.
Third, we're very excited about the exposure we
get to the Chibougamau mining camp, where
1.6 billion pounds of copper and 3.1 million ounces
of gold has been produced, and in which Campbell
is a dominant player.
Fourth, the Operating Management Agreement
will provide Nuinsco with a monthly revenue stream
to help advance exploration and development of
the projects in our pipeline.
I’m very pleased with what we have achieved, both
through our agreement with Campbell and with
respect to our other projects. As we move forward
in 2006, Nuinsco has:
• tremendous leadership both operationally and
at the Board level;
• a solid set of geographically diverse properties
ranging from grassroots exploration to near
production;
• a balance sheet that is the strongest it has been
in years;
• exposure to a variety of commodities and growth
throughout the cycle;
• an agreement in principal with Campbell that
exposes us to a prolific mining camp and could
make Nuinsco a producer in its own right at
Corner Bay during 2007; and,
• a very loyal shareholder base.
In summary, Nuinsco is excellently positioned to
profit from the strong metals cycle. Our exploration
properties – Diabase Peninsula (uranium), Minago
(nickel), and Berta (copper-gold) are progressing
extremely well, and our project pipeline is full with
properties such as Cameron Lake (gold), Elmalaan
(copper-zinc) and Mel (nickel). The Campbell
agreement puts the icing on the cake, and will
make 2006 and beyond a very exciting time for
Nuinsco and its shareholders.
W. Warren Holmes
Chief Executive Officer
CEO’S MESSAGE