www.geovic.net

Cobalt and nickel are two commodities which are currently trading at record high prices.

Combine that fact with the world�s largest primary cobalt deposit which just happens to be the most easily and economically mineable cobalt/nickel project on the planet - and you�ve got yourself an easy double for investors with Geovic Mining as they gear up for production in 2009.

In fact, Geovic is positioned to become the world�s largest producer of cobalt going forward with their projects in Cameroon.

About Cameroon

Cameroon is one of those countries most people couldn�t identify on the map and that�s because nothing bad ever happens there to warrant our attention. Located in West Africa, the country is politically and economically stable. They are also receptive to foreign investment. Aside from this cobalt deal, Exxon Mobil built a 3.5 billion-dollar pipeline in Cameroon which is a testament to the confidence in the government and the stability of the country.

The Properties

Geovic has a 60% interest in a 1,631 square km property that encompasses seven deposits.

The first one in development is called the Nkamouna. Its surface area is quite small, encompassing about 10 square kms. However, its internal rate of return (IRR) is quite big.

A prefeasibility and 43-101 study were done on the Nkamouna project which showed the property could produce with an IRR of 78%. That was based on a three year average price for the metals. It has proven and probable reserves of 53 million tonnes at an ore grade of .24% cobalt and .72% nickel. This deposit is 35 meters thick and is only 15 meters deep.

The payback on the Nkamouna mine alone is only 1.2 years and would be producing 4,000 tonnes per year of cobalt. The net present value using a 10% discount and after tax would be US $317 million for Geovic�s 60% share. With the stock price at $2.90, the fully diluted market cap is $250 million. The mine life of Nkamouna is estimated to be 21 years.

The capital cost on this project is the lowest in the industry at $129 million. One of the reasons for this is that all the deposits occur near surface so extraction is easy. Thus, operating costs are only 42 cents per pound, pre-tax and including nickel credits. Using three years of nickel prices in the model, nickel will be providing about 20% of the revenues.

Pre-Feasibility Numbers

� Internal Rate of Return - 78% - 3-year average metal prices

� Payback - 1.2 Years - produce 4,000 tonnes per year cobalt

� NPV 10% Discount - $317M US - this is Geovic�s after tax share)

� Capex - $129M - An Industry Low

� Operating Expenses - $0.42 Cobalt - pre-tax and net of nickel credits

� Current Mine Life -21 years - 1st of seven deposits

� Projected Cash Flow per Year - $US100M (100%)

The final feasibility and permits are expected to be completed by mid 2007.

Immediately north of the Nkamouna deposit is the Mada deposit which has a 43-101 inferred resource of 145 million tons with a grade of .21% cobalt and .48% nickel. This area has not been fully drilled in strike length or to depth. Geovic�s management believe they could triple the resource on this deposit.

In addition there are five other deposits, so this project will be around for a long time � beyond anyone�s lifetime!

The unique characteristics of the cobalt make this project a world class deposit:

The cobalt mineralization in Cameroon is higher grade then any other laterite cobalt deposit in the world. The cobalt itself has large grains which are unusual. Given the unique structure of the cobalt and the ease of mining it, the ore is upgraded by a factor of 3 by using low cost concentration methods which triples the rate of return for the company and the net present value.

This is what makes this project such a good investment and that�s why the economic performance of these deposits will be so strong.

Because of the simplicity of this project and given the low capital costs, production can be doubled on the first project at 8,000 tonnes of cobalt for less then $60 million.

The open pit will be less then 16 meters deep and is easily dug out with front end loaders and bulldozers.

After processing the course concentrate on site, the end product would be pure enough to send directly to a battery manufacturer or other industrial user.

The Supply and Demand of Cobalt

The supply side of cobalt is extremely tight right now. All the production now mined is immediately bought up in the market which has left inventories empty. Not surprisingly, the price of cobalt has recently doubled to $30.

Though market watchers don�t expect these heady prices to last, demand will stay strong for years to come.

In my mind, the biggest reason for this revolves around our favorite mode of transportation, the car.

Today the world produces 60 million cars and light trucks per year. In 25 years that will number will grow to over 90 million.

Now with oil and gas prices at much higher levels and with air pollution creating health concerns in major cities around the world, the auto industry and governments alike are pushing toward hybrid vehicles.

With global warming becoming such a HUGE disaster in the making as well, I can see this transition occurring very quickly over the coming years.

Cobalt is a key ingredient needed to make the batteries in hybrid cars.

When you consider today�s already tight cobalt market, there won�t be enough supply to handle those projected demands except Geovic has deposits which could double, triple or quadruple production very quickly going forward.

Cameroon and Geovic could very well become the world�s �swing producer� of cobalt in the same way that Saudi Arabia turns on the oil taps when global supplies get tight.

Cobalt is also used in the construction of jet engines, batteries for cell phones, laptops and other battery devices.

Last year the market for cobalt was 55,000 tonnes and this demand is expected to increase to about 95,000 tonnes over the next decade according to the number crunchers who are not projecting the rapid production rise of hybrid cars.

Management

Jack Sherborne � Chairman and CEO � 36 years executive management experience in energy and mineral industry with Unocal.

William Buckovic � President � 32 years of mineral exploration experienced. 20 international laterite nickel cobalt deposits for Unocal and others.

David Beling � Executive VP and C00 � 42 years engineering, management and executive experience having financed, developed, and operated international mines.

Gary Morris � Sr. Vice President � 32 years mineral exploration, land, resource and environment management with Unocal and Western Nuclear.

Greg Hill � CFO � 30 years experience in mineral, energy, and technology finance and strategic planning.

Conclusion

Given projected first year cash flow of $100 Million for the project, I would say those are bonanza type figures. However we are just talking about the first project that has a mine life of 21 years. There are six more deposits just waiting in the wings.

The rest of the district has potential of 1 billion resource tonnes, though not 43-101 compliant numbers, the upside is potentially very blue sky while the downside risk is manageable.

Currently the Net Present Value of Geovic�s share of production are $317 million using a 10% discount. With the price at $2.90, the market cap is $250 million on 86 million shares � leaving 78 cents in valuation. The kicker is that the Nkamouna mine alone can easily double production � and hence it�s NPV � for only US$60 million. Plus there�s ample potential with the other six deposits. Going forward I would expect a big increase in Geovic�s reserve numbers which will also increase the NPV.

Geovic is the type of stock you can buy now while it�s cheap and ride up in the years ahead as the cash flow and production start to build.

Accumulate

This is a great long term buy growth play that you could pass on to your Grandchildren.

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Post from: Gold News from Gold Editor

James Winston: Geovic Mining A World Class Cobalt-Nickel Play

Incorporated as Northern Orion Resources Ltd. In 1986, the company proceeded to change its name to Northern Orion Explorations Ltd. later in the same year. On June 16, 2003, the company underwent a 10 for 1 share consolidation and the company's name was changed to Northern Orion Resources Inc. (NNO). NNO has several wholly-owned subsidiaries; namely, Northern Orion Holdings SA, Northern Orion Argentina Holdings SA, and Minera Mantua Inc. The company presently has two principal mining properties located in Argentina.

The company's primary project is its 12.5% interest in the Bajo de la Alumbrera gold/copper mine (Alumbrera) located in the Catamarca Province of Argentina. In addition, NNO owns 100% of the Agua Rica copper project located approximately 34 km east of the Alumbrera mine in the same Argentinean province.

In April 2003, NNO entered into a purchase agreement with Rio Algom Ltd., a wholly-owned subsidiary of BHP Billiton (BHP), to acquire a 12.5% interest in the Alumbrera mine in Argentina. This acquisition was finalized in late June 2003 for a purchase price of US$90 million. Rio Algom agreed to defer payment of up to US$30 million until May 2005, with US$25 million of the deferred amount bearing interest at the London Inter-Bank Offer Rate (LIBOR) plus 2%, and the balance bearing interest at LIBOR plus 5%.

In order to finance the large Alumbrera purchase price, NNO raised total gross proceeds of approximately US$77.8 million from the sale of more than 810 million special warrants on a pre-share consolidation basis at a price of $0.13 per warrant. After giving effect to NNO's June 2003 share consolidation, each 10 special warrants entitle the holder to acquire one common share of the company and one-half of one common share purchase warrant. Each whole warrant will be exercisable to purchase one NNO common share at a price of $2.00 until May 29, 2008. A total of US$60.62 million of the proceeds from this private placement were used to finance the 12.5% Alumbrera acquisition.

Alumbrera is operated by Xstrata Plc. (formerly MIM Holdings Ltd.) of Australia. The mine produced 440 million pounds of copper and 759,360 ozs of gold during the year ended June 30, 2002, at a cash cost of US$0.21 per pound (net of gold credits). It is estimated that Alumbrera will produce an average of 430 million pounds of copper and 630,000 ozs of gold annually through 2010 at a projected cash cost of less than US$0.10 per pound of copper, placing the mine among the world's lowest cash cost copper producers. As of June 30, 2002, Alumbrera had proven and probable mineral reserves of 4.1 billion pounds of copper and 7.1 million ozs of gold. Over a minimum of 8 years, NNO's projected annual share of production is expected to average 55 million pounds of copper and 75,000 ozs of gold. With a low net cash cost per pound of copper produced, Alumbrera can remain highly profitable even if the price of copper significantly decreases.

The 3 months ended September 30, 2003, marked the company's first full quarter of operations at the Alumbrera mine. NNO's share of operating cash flow was $11.1 million on sales of approximately $21.7 million. The company's attributable share of production amounted to 13.3 million pounds of copper and 19,700 ozs of gold. The total cash cost (net of gold byproducts) was US$0.088 per pound of copper with average realized prices for copper and gold of US$0.79 per pound and US$362 per oz, respectively. Subsequent to the end of the third quarter, NNO was advised that its net cash distribution from Alumbrera during the period of June 1, 2003, to November 30, 2003, was close to US$7.5 million.

In February 2003, the company reached an agreement with BHP to acquire the remaining 72% interest in the Agua Rica project that NNO did not already own for a purchase price of US$12.6 million. This transaction with BHP was completed in May 2003. NNO paid US$3.6 million in cash with the remaining US$9 million deferred until June 2005 and secured by a pledge of interest in the Agua Rica project. In order to finance the initial payment, the company completed a non-brokered private placement of 4 million units at $1.00 per unit to raise gross proceeds of approximately $4 million. Each unit consisted of one common share and one non-transferable share purchase warrant.

To date, approximately 175 drill holes have been completed at Agua Rica. In addition, substantially all other field studies have been concluded for a bankable feasibility study, including bulk sampling, laboratory and pilot scale metallurgical testing, geotechnical design, water exploration, and pre-feasibility level engineering.

CONCLUSION

Management believes that the cash distributions from the Alumbrera mine will be sufficient to meet NNO's ongoing financial commitments. The 12.5% acquisition of Alumbrera immediately moved the company into the mid-tier ranks of copper producers. If the price of copper remains above the US$1.00 per pound mark and the average production cost of Alumbrera is maintained close to the projected US$0.10 per pound, the company will continue to realize phenomenal profit margins. It should be noted that the long-term economic viability of the mine is virtually guaranteed, even if the price of copper were to fall dramatically. Due to the exceptionally low operating costs, NNO should benefit from a substantial cash flow stream over the next decade. This cash could potentially be used to bring Agua Rica into production.

Post from: Gold News from Gold Editor

A Newsletter Focused on Growth Stocks with Value Mentions NNO