The Thermal Fragmentation process uses powerful burners, powered by diesel fuel and compressed air, to fragment hard rock. A small (125 mm) pilot hole can be enlarged to just over 1 m in ~8 minutes, making it ideal for targeting gold-bearing quartz veins, resulting in dramatically less dilution, increased productivity, lower costs, increased safety, and less impact on environment.

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Fig 1. (above - left) Thermal Fragmentation Dragon unit with inset of burner.

(above - right) Click to view videos; 1) in operation, & 2) 2D animation of uses.  

Fig 2. (left) Thermal Fragmentation technology is precise and surgical, extracting only the vein with minimal dilution. Above is seen a cross section of thermally fragmented rock, and sample of fragmented mineralized ore (rocks ranging from 0 to 13 mm in size). Typically the hardest rock will fragment first -- precious metals are found in quartz vein, which is harder than surrounding waste. When the process is started it makes an oval hole and essentially searches the quartz before the waste -- the operator can both see and hear when quartz is being extracted vs. waste.

NIP.V's current market capitalization is ~$14 million Canadian (~138M shares outstanding X ~10 cents (~190M fully diluted, with majority of warrants proximal 12 cents)). Its market cap is miniscule relative to the potential and the current share price presents an opportunity for shareholders to reap large returns as recent vetting of NIP.V's technology have yielded highly favorable results -- we expect Thermal Fragmentation to be formally adopted via strategic agreement by at least one, likely more, major miner(s) this 2017. NIP.V has exceptional risk-reward characteristics; Mining MarketWatch Journal sees a sizeable assent in share price near-term. Intellectual property fee revenue potential alone has the possibility for significant share price revaluation; NIP.V is apt to respond in multiples near-term as the inherent value and accomplishments are appreciated by the market.

Nippon Dragon Resources currently has Thermal Fragmentation units ('Dragons') in the field and distributors in Canada, Japan, South Africa, USA, and Australia. Its business model is based on intellectual property (IP) fees and rental, however expected upcoming long-term large contracts will likely be strictly IP fees for using the process with clients buying their own equipment. NIP.V is positioned to charge upwards of ~US$25,000/month per unit in IP fees, a deal for the client whose savings compared to old technology would be many multiples. The cost of using a dragon to extract 1 tonne of ore would be a fraction (e.g. drop to under $100/t), enabling the converting of marginal or non-profitable mining to efficient mining.

Monthly income is projected to increase exponentially:

NIP.V is making the rounds of select miners and having its Thermal Fragmentation technology tested/demoed. Mining MarketWatch Journal encountered, in passing, a few engineers of some majors that attended Thermal Fragmentation testing at their mine site in North America recently, the reviews of the technology were spectacular, and the names of the majors these engineers work for would impress you. You will not hear of the names of these companies doing the vetting because NIP.V is prohibited from talking about any of them as they insist on non-disclosure agreements. The precision (within 2 cm) with which NIP.V's technology can extract makes it particularly advantageous for mineralized corridors under 2 meters -- over 80% of known precious metals resources available in the world are in mineralized structures under 2 meters. Anecdotally, Mining MarketWatch Journal notes that last year the COO of a major South African miner said in its quarterly review of production that it was experimenting with Thermal Fragmentation, they didn't mention Nippon Dragon Resources, but we know there is no other company in the world that makes Thermal Fragmentation -- he also said the testing was going well. Interesting enough, NIP.V still has a dragon unit in operation in South Africa. Some of the mines in South Africa have ridiculously high grades of gold (e.g. >100 g/t), the drawback is the veins are narrow underground, however ideal for NIP.V's thermal fragmentation. In such a scenario possible efficiencies may result in several hundreds of thousands of dollars per year per unit in the field -- this will have a major positive impact on their bottom-line. Not only would the South African mine benefit from improved economics, the actual miners themselves would benefit from increased safety, and new jobs in next-generation technology that will increase minelife. Independent mining equipment analysts have estimated that when adoption accelerates there could be demand for 5,000 - 10,000 Dragon units globally. Cost savings are too lucrative to ignore and mining MarketWatch Journal believes a major contract/strategic agreement is imminent, requiring numerous dragon units, each generating IP fees for NIP.V. This will create a tailwind for further steepening of the adoption curve and the share price of NIP.V.

Nippon is currently contract mining in Arizona:

Nippon entered into a gold production agreement with Au Consolidated inc., an Arizona Company. In Q4-2016 Nippon began Thermal Fragmentation operations on selected high grade narrow surface veins at Au Consolidated Inc.’s property located in Cochise County, near Willcox in the State of Arizona, U.S.A. To date, in excess of 480 six-inch holes were drilled all on the same mineralized structure, and thermal fragmentation operations have begun.

Nippon is using its own equipment and has also moved its portable 75 TPD mill onto the property, set-up is expected to be complete soon. In the interim material is being stockpiled. This mill was originally purchased new by NIP.V in 2008 for its Rockmec 1 gold project, it has a replacement value of ~$5 million. The mill has the capacity of one Dragon unit; one dragon unit has the capacity of ~100TPD (important to note is that precision of Thermal Fragmentation technology can often reduce dilution by up to 5 times, making the 75TPD mill the equivalent of 375TPD).

Nippon has a partnership agreement on this Arizona project to produce 3,000 oz of gold. Recovered gold ounces on the first 2,000 oz will be shared on an 80/20 ratio. Nippon will be entitled to 80% of the gold ounces whereas Au Consolidated Inc. will be entitled to 20% of the gold ounces produced. 1,000 ounces of gold recovered will be shared based on a ratio of 60/40. Once gold production reaches the initial target of 3,000 ounces as stipulated in the agreement, a long-term agreement or sale of the thermal fragmentation unit(s) and Nippon’s treatment plant can be negotiated between the parties.

Funding for activities was secured by Nippon via a Forward Gold Purchase Agreement with European buyers. Nippon sold 1200 units at $900.00 per unit, each unit representing one (1) gold ounce. The company intends to complete delivery of the gold ounces to the buyers ~14 months following on site mobilization. Nippon will also take the opportunity to showcase its technology to mining companies that have demonstrated a keen interest in implementing the technology within their own operations.

Fig. 5 (above) - Entrance portal to NIP.V's Rockmec 1 mine, inset photo of example of many high-grade veins. The mine is located  35 kilometres west of the town of Rouyn-Noranda and has excellent infrastructure.

Fig. 6 (above) - Dilution – Conventional vs. Thermal (vein)