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It's rare that one encounters base metal and precious metal targets together on the same property. Laurion Mineral Exploration Inc.. (TSX-V: LME) (OTCQX: LMEFF) has this luxury, and prefers to use the term "multi-faceted" when describing its key exploration asset, the Sturgeon River property near Beardmore, Ontario. But when coupled with the company's current flagship Bell Mountain gold project in Nevada (targeted for production in 2013), Laurion's multi-faceted approach is embracing significant blue sky at its bargain basement share price of $0.075 (as of March 1, 2012).

Among junior intermediate gold producers over the past year, valuations given in terms of market cap per ounce dropped substantially from $200 to $148 (according to goldminerpulse.com). Still, taking that metric into consideration, the Bell Mountain project indicates a value of $15.4 million for Laurion, or the equivalent of $0.17 per share. When combining the value of the entire company, Fundamental Research pegged Laurion at a price of $0.30 per share. This conclusion is based on the attributable value for the Bell Mountain project, management, project ownership, and no debt and minimal value ascribed to their key development asset, the Sturgeon River. So at this stage, it's quite interesting the performance gap between valuation, gold bullion and share price heralds positive for long-term investors.

BELL MOUNTAIN, NEVADA - KEY DEVELOPMENT ASSET: 2013 PRODUCTION TARGET

Located 95km southeast of Reno, Nevada in the mining district, Bell Mountain has seen mining activities going back to 1914. Holding 2900 acres (995 hectares), Laurion acquired its flagship for $225k in cash and shares from Globex in 2010. The acquisition signified a pivotal point for the company, believing it has created some significant value from the property.. Contained within a volcanic hosted low sulphidation epithermal vein system, the Bell Mountain project is designed to generate cash flow to fund the key exploration asset at Sturgeon River.

Going forward, a preliminary economic assessment report is scheduled for completion around the end of Q1, beginning of Q2 of 2012. An environmental assessment permit application is in the works, already having completed the archaeological, biological, cultural baseline studies so far.

To date, the Company has completed 50,692 feet through 244 holes of reverse circulation drilling. Upon acquiring the property, Laurion was sitting on a resource of roughly 133,870 gold ounce equivalent. After completing a 56-hole drill program which involved twinning old holes, improving on the resource component by roughly 232%. Today the Bell Mountain project has a NI 43-101 Resource of 311,000 gold ounces, and some additional resource potential, making it essentially a small, albeit robust project.

STURGEON RIVER, ONTARIO - KEY EXPLORATION ASSET: MULTI-FACETED POTENTIAL

Laurion's key exploration asset provides the blue sky through which the company will develop with the cash flow anticipated from Bell Mountain. It is through the Sturgeon River project that the company will grow into its boots. If you just look at the gold range for this project, there would be enough there to define a very viable operation on its own. But add in the aspect of having other VMS minerals such as silver, zinc and copper and the Sturgeon River project lives up to its multi-faceted potential. The VMS target of 4-6 million tonnes postulated, with 3 gold-zinc-copper-silver zones with 6,000m strike length. Overall, the property has both underground and open pit potential, high grade gold in the quartz veins, low grade gold in the host rock and shear zones, as well as the multiple polymetallic zones to explore.

The property historically produced from 1936-1942, after the previous owners chased high grade lode gold style quartz veins hosted in the higher larger alter shear zones. At the time, gold was priced around $32/ounce, and the owners mining an average of 17g/t, diverting the lower grade material unmined or to waste ore pile. The mine produced 73,322 ounces of gold and 15,929 ounces of silver. Today's gold prices change the game on the property, making lower grades in the 1-1.5g/t range very viable. The Sturgeon River Mine hosts a 640m shaft; the company did some confirmation drilling below the old workings, resulting in the discovery of an additional 7 mineralized gold zones within the shear zones, associated with quartz veins.. Laurion has been actively sampling the host rock associated with the gold style quartz veins and have been very fortunate in identifying a far larger gold environment than what was mined before. There are about 120 quartz veins, and there also seems to be a key indicator in association with both gold and base metal mineralized zones.

There are two very definitive structural zones on the Sturgeon River. The first is with the northern Namewaminikan River and the southern strong sheer zone is south of the Sturgeon River mine. These shears run East-West-North and within these structures are zones which are very well mineralized with both base metal and gold.

But what needs to be tied together from an eagle eye view is the potential of not just the gold on the entire project. Laurion has defined three distinctive zones with a strike length each of 2000m trending east up to the North. Laurion has developed a target deposit that has a range of 6 million tons of 1.5-3 g/t of gold, 20-30 g/t silver, 2.5-3.5% zinc and 5.5% copper.

Laurion feels like there's a far bigger gold system in place, with about 400,000 tons at about 0.15 ounces/ton remaining in-situ in the historic shaft. About 700m north of the shaft are a number of parallel quartz vein systems called the Marge vein. In between that zone and the former Sturgeon River mine is another substantially large area called the Ahmik zone, where Soil Geochem identified soil samples that ranged between 3-30g/t. Laurion recently completed 4 holes of drilling in that area, and are awaiting assay results. Should they prove positive, the Company will be looking at quite a substantial gold environment.

THE BOTTOM LINE

Laurion Mineral Exploration is in the transition stage from explorer to producer. In fact, the company is essentially no longer an explorer, but is now a developer. Look for substantial news flow emanating from the Sturgeon River. Whether or not Fundamental Research's $0.30 per share target is yet to be seen, there is very limited amount of downside while there's still plenty of blue sky. Owning 100% of its projects and having no debt, there's definitely room for Laurion's management to make gains going forward.

G. Joel Chury
The Bottom Line Report

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