BY JIM STEEL, B.SC.(GEOL) MBA P.GEO.

Welcome New Members!

MII welcomes new Member AwBC to our global investor group. ‘AwBC’ has been through several investment
cycles already and actively seeks shareholder value driven companies. He chose MII Partner Company MacMillan
Gold for that reason – any CEO who will buy a million shares at market prices is likely in it for the long haul. As
he notes ‘I’m not buying MacMillan Gold at 23c only to flip it at 46c!”
We also welcome new Member FbCA – an astute investor who sees things from a contrarian viewpoint and has
been especially successful with new MII Partner Company Minera Andes Inc. (MAI-V $0.32; MNEAF-Q US$0.19).
Welcome, Fb, it is great a classically-trained contrarian viewpoint to add to our global mining insights!

Chesbar Resources Inc. (CBI-T $0.27) Member Holdings 79,400 Capital Gain +55%
Chesbar announced the commencement of a new laterite drilling
program at the company’s Sechol project in Guatemala. Specifically, a
new lateritic zone called ‘El Segundo’ has been outlined by shallow auger
drilling. The news release (see http://www.chesbar.com) states that “the
hand auger was able to sample the limonite horizon to a depth of 10m
before becoming too difficult to continue.” In hand augering terms, 10m
is pretty darn good…Ten metres of 0.6%-0.8% nickel (unassayed as yet,
but what laterite nickel usually runs) in the context of Sechol suggests
another 10m of transition rock and saprolite development. The saprolite
is where the nickel is really found, with grades frequently greater than
2% nickel. The company plans to acquire a mechanized auger and drill
400 holes of 20m average each on a 200m by 200m grid to test the
saprolite the hand auger wasn’t able to reach.
Twenty metres of limonite/saprolite development is very special in lateritic nickel terrain terms. Please forgive the geospeak, but
remember that the presence of garnierite as the primary nickel ore mineral at Sechol and the underlying dunite rocks (that
became the laterites) bear significant similarities to nickel laterite development in New Caledonia.

Chesbar’s Sechol in New Caledonian Terms

This is what nickel laterite development in New Caledonia looks like1 . The
nickel ore is up to 6m below cover, which can be 10 to 15m thick2 . New
Caledonia ores are like a shallow cover over the island; neither thick or
deep. Garnierite is the primary ore mineral; although the source rocks are
slightly different from the aforementioned dunite. Current mined grades are
2.5% nickel, within the range of what we expect from Chesbar based on the
previously known El Inicio zone.
Unlike New Caledonian laterites which form a ‘blanket’ over the underlying
basement rocks, El Incio and El Segundo laterites form ‘pockets’, each of
which needs to be further defined with the mechanized drilling. The pink area
on the diagram above is a great example of a ‘pocket’.
The size of a pocket, and the contained raw nickel, will vary. Here’s a guide:
Using the tonnage calculation parameters in the news release, each 20m
laterite + saprolite hole found continuous over 50m by 50m generates just
over 1MM lbs of nickel. How much of that 1MM lbs is recoverable is not yet
known, as this is one of the studies being conducted by the consultant
metallurgists.
…/2
 On this note, your investment horizon is until the second week of May 2003, when two prestigious metallurgical conferences
are being held in Hong Kong and Perth, Australia. THEN, you can logically expect that this well kept nickel secret will be let
loose to the world. And with the prevalent position in global laterite discovery and mining not far from Perth in two large nickel
laterite mines, you can also expect knowledgeable people will be listening. Knowledgeable financial folk, that is, because Chesbar
Resources Inc. is no secret to the global nickel industry.

A Final Thought
While we can’t reproduce the property topographical map here, it stands to reason that more ‘pockets’ are waiting to be
found, and chances are the upcoming drilling will do it. Will it be ‘El Tercero’, ‘El Quarto’, and ‘El Quinto’? The current Sechol
measure and indicated resource is 40MM tonnes at 1.39% nickel and 0.08% cobalt. Foose et. al (1980)3 note the average
tonnage-grade figures for 64 nickel laterite districts around the world is 40MM tonnes of 1.41% nickel. Regretfully this paper is
out of print, because it means we could otherwise rank Chesbar and Sechol on a comparative global value scale based on
research published by the USGS and from that, start to infer likely economic potential.
Jim Steel B.Sc.(Geol) MBA P.Geo.
Cited Reference
1. Guilbert, J.M and C.F. Park, Jr. 1986. The Geology of Ore Deposits. W.H. Freeman & Co. NY USA; p784.
2. ibid. p785.
3. Foose, M.P., W.D. Menzie, D.A. Singer, and J.T. Hanley. 1980. The distribution and relationships of gread and tonnage
among some nickel deposits. USGS Prof. Pap. 1160, IN, ibid. p787
In Memoriam
Mining Insights Inc. would like to offer sincere condolences to the family of Chesbar director Terry Flanagan, who passed away
last week. Terry, with the late Jack Macadam, ran Muscocho Explorations Ltd. and the consulting company Flanagan McAdam
and Co. There was no better training in exploration and mine geology to be had than at Muscocho/FM & Co, nor any better
place to work. Thanks, Terry – we’ll miss you.

This analysis contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be
covered by the safe harbor created thereby. Such forward-looking statements include, without limitation, (i) statements regarding the potential of future
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2003 Mining Insights Inc. All rights reserved.