The Novoriche Get More Data
Novo released an update this last week that contained some barn burning data that remains a mystery to all of the latecomers to the Novo saga. I can assure my readers with great confidence that it shocked Quinton Hennigh because it shocked me.
I should comment on the overall press release because it is a prime example of the finest reporting of a gold exploration program I have ever read. Most press releases in the mining arena are designed to confuse the reader rather than to inform.
Quinton understood how the gold got into the Witwatersrand 24 years ago while he was still a candidate for his Doctor’s degree. His theory held that if the Vits Basin contained a lot of gold, any similar age basin might be a good candidate for a Vits analog. He seems to have gotten that part wrong because every bit of data that emerges suggests that the Pilbara Basin is better. Maybe a whole lot better.
When Artemis Resources announced in February that they had found gold in conglomerates at Purdy’s Reward, Quinton realized that this was an entirely new form of gold, not at all similar to the Vits except that it’s in conglomerates.
You see, Artemis realized that local prospectors had been mining gold nuggets at Purdy’s that they had found with metal detectors. While Artemis wants the world to believe it was their people who found and understood the gold, actually it was a Novo geo who was on a temporary job with Artemis who made the connection.
The common description of the nuggets is that they resemble watermelon seeds. And anyone who knows the Vits knows that the gold there is mostly located in a narrow 30 cm band of rich conglomerate, often found in conjunction with a carbon leader. But Vits gold is tiny, only an average of 120 microns in size. For certain, there is no watermelon seed gold in South Africa at all.
Quinton began to stake every piece of ground in the Pilbara that looked promising back in February since at that point only he understood the significance of the find. I find it very funny that Artemis is now claiming that they were the ones to discover the gold and only they understood the importance.
If that is so, why did they do a deal with Novo in late May where Novo could earn in 50% of a 1,536 square km land package owned by Artemis for the conglomerate hosted gold for only a $2 million investment in exploration? Artemis had no idea of what the value of the project was until Quinton released assay results in August.
As soon as Novo announced that assay result in August the “binding memorandum of agreement to farm-in and joint venture gold rights with Artemis Resources” became a lot less binding. It seems that in Aussieland a binding agreement between two mining companies is only binding until one makes a find. Then you start all over with entirely new terms.
A joint venture is a relationship just like a marriage. For Artemis to break a “binding” agreement three months after it was first signed was like a husband hiring a hooker on his honeymoon. It tends to set the stage for an interesting relationship down the road. What I found the most interesting was the number of guys on HotCopper who thought stiffing your partner at the very first opportunity is just a great way of doing business.
Maybe all the geniuses at HotCopper should pick up their phones and call around Perth to see just how highly valued and trusted Artemis is. That way they wouldn’t need to pee on me and could find out the good news for themselves.
Back to the latest press release from Novo and it is brilliant. Quinton knew for certain that many of the other geos in the industry would pooh-pooh his theory because in geology it’s always safer to say a project is a piece of crap than to climb out on a limb and think about what they might have. You can never be wrong in geology by mocking finds by anyone else. It’s the NIH issue times one hundred.
Quinton is using the strictest and most stringent sampling techniques. As I said back in September, “This is an unconventional deposit. It has to be explored and tested in an unconventional way.”
If the observers of the 2nd Pilbara Gold Rush will pay attention for a moment, none of the many companies including Artemis, De Grey and all the rest eager to jump aboard the Novo freight train have actually released any assay results.
Artemis, De Grey and others have proudly announced the discovery of gold in conglomerates but that information has been around for nearly 130 years. It’s not the presence of gold that is meaningful, it’s the grade. But no one else has the technical team that Novo has. Quinton may not have all the answers but he understands the questions far better than anyone else. The rest of the crowd should be sucking up to him and asking him how to test.
What has been learned at Purdy’s is important and even though we clearly understand the only reason Novo is there at all is because it is permitted, it will not be the highest-grade material in this new gold rush. Novo is drilling there because they can, not because Artemis is such a well-run company and great partner.
For all the verbiage from HotCopper, CEO.ca and Stockhouse and hoards of newsletter writers eager to join the fray, there is little real substance. Everyone with a keyboard seems to think they are the smartest guys around even though the quality of the thinking and ethics of the writers leaves something to be desired. The mere fact of owning a stock means neither that it is well run or even worth owning.
But for all the coal in the Christmas stocking, there may well be a diamond or two in the clumps of carbon. There is a poster on CEO.CA who uses a name of HHorseman.
He has done some serious investigation into Novo Resources and come up with some information that is well worth reading. Since he did the work and doesn’t have a paid site, he asks for a $25 donation via PayPal.
I did the donation just to see if the work was as good as his logic about Novo. It was and I highly encourage my readers to go to this site and make the donation and read what he has to say. He is the only writer other than me to make a very important connection about Novo.
When I visit mining projects and I have visited between 400 and 500 over the last sixteen years, I always hope to get some idea of the dimensions of any possible deposit to get a handle on the potential. Certainly I understand Quinton’s theory. I heard it nine years ago, visited WA eight years ago and have written dozens of articles about Novo in the past five years.
I accept the precipitation theory. It is important because it gives you an idea of the potential. When Quinton read of the press release by Artemis back in February, he realized he had been working on the wrong side of the basin. Beaton’s Creek has an economic deposit but it’s not a Vits size. Karratha might be and Quinton staked all the down dip of the conglomerate he could before doing the deal on Purdy’s Reward and Comet Well.
I didn’t have any idea of what the grade might be when I visited in early August. I just knew there was a lot of gold. But I wanted to know dimensions. How long was the strike? What was the thickness of the conglomerate? How much of the conglomerate is mineralized? How far under the basalt cover did the mineralization extend? What is the grade?
We have one tiny sample announced in August of an average of 69 g/t gold. We know that it’s as close to a guess as you can possibly get. With nuggety gold, drilling is a guess and golly measurement. You will never know the true grade until you mine. But 69 g/t is good, very very good.
Quinton gave me a few nuggets to sample. At that point he and his team were guessing between 5-20 meters of thickness of conglomerate. All they could do was look at the outcrop and guess. And until they start drilling core and the large diameter RC through the basalt we won’t know anything about what is under cover.
Quinton’s people have tracked the surface strike of the outcrop at Purdy’s and Comet Well about 8 km. So we are guessing at the thickness. We are guessing at the down dip extension and we are guessing at the horizontal extent beyond 8 km.
We went back to Karratha and went to see the local gold buyer. I bought some gold from him that seems identical to that from Purdy’s/Comet Well. He said that it was 110 km from Purdy’s. Quinton later marked it out on a map for me and it turned out to be 125 km from Purdy’s. That gave me some idea of the potential strike.
Well, when they announced two weeks ago they had completed 12 core holes and measured the thickness at between 4 and 14 meters. When I wrote about their press release, I pointed out that gold doesn’t float and it’s natural that the richest gold be found in the lower part of the conglomerate.
The chat boards are filled with the opinions of instant experts who know nearly nothing and their biggest claim to fame is that their mummy got them a keyboard for Christmas. The vast majority made the instant assumption that if there is gold in conglomerate, it must all be mineralized. I have not heard a single rational discussion about how and why the conglomerate might be entirely mineralized. In other words, where would there be gold and how much?
We know that in the Vits, the rich, 15 g/t gold seam is only 30 cm thick. When I was looking at Purdy’s, I was trying to figure out where in the conglomerate sequence the gold was coming from and frankly I couldn’t. You could see conglomerate but you couldn’t figure out if you were looking at the top or the middle or the lower portion. It was a mystery and I know damn well it’s irrational to believe it was mineralized through and through.
If Purdy’s acts like the Vits, you would expect a narrow but rich section. If Purdy’s acts like a typical placer deposit, you might have a meter of pay at the very lower level right above bedrock. So of a 14-meter thick conglomerate sequence, you might have between a third of a meter to a whole meter of mineralization. I wondered for a long time just which it might most resemble.
Well, it doesn’t resemble either the Vits or a typical placer gravel bed. I quote from the press release, “Up to eight discrete conglomerate beds are evident. . .”
So if we are a pure Vits analog, we might have eight sequences of high-grade 30 cm mineralization and if we resemble a placer deposit, we might have one meter of mineralization repeated eight times. Now that’s interesting. No one has even discussed that on any of the chat boards, they are way too busy pissing on my parade.
I bought my first Novo shares at $.20 and I still own them. Novo has been my largest holding for over five years. They are advertisers and naturally I am biased. Do your own due diligence.