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The Share Collective - Beta Testing Journal - August 9, 2017
This is the first of what will be a series of comments where I (John Kaiser - founder of the Share Collective) take the team of beta testers on a journey into The Share Collective. I currently have a list of about 120 beta testers who have expressed an interest in becoming a beta tester. Most of you have received a registration invite email while some of you have only received an introductory email and are still waiting for the registration invite from Elliott Caldwell, the beta test coordinator. If you have not registered yet, please do so soon.
The TSC team has been developing the system since I spent two weeks with them in Brisbane in August 2016 working through the concept. They have built a robust system based on the prototype I delivered which I still use to generate and present outcomes as part of Kaiser Research Online. KRO members can only look at my outcome visualizations which are part of my fee-based recommendation service. The innovation behind the Share Collective is to empower everybody to visualize outcomes and share them in a public space where they can be critiqued (and sometimes ridiculed) by other members. The idea is that a crowd of anonymous untrusted individuals operating in a collaborative and competitive environment that is omniscient will converge on the outcome that closely resembles what the qualified professionals eventually sign off on in the form of a 43-101 or JORC report well before that report is published. My Cambridge Visualizing Outcomes presentation explains this concept in greater detail. Alas, the junior and project I picked to demonstrate the concept crashed and burned the next day, though in a way it demonstrated the concept very well. Now we have a new discovery exploration story which is not vulnerable to sudden death results: Novo and its Wits 2.0 story in the Karratha region of Australia.
Although the TSC team has done an excellent job constructing the Share Collective, I am not happy with the interface. When I log on I literally do not know what to do next. What I want to do in the Share Collective are two basic things: 1) cultivate my garden, which is all the companies, projects, outcome visualizations and members I follow as well as stocks that I have "bought" for my portfolios, and, after crushing pests trying to infest my garden or coping with disasters and assuring everything is in order, 2) head out on the highway looking for adventure in the rest of the Share Collective eco-system. The TSC interface does not allow me to do this easily, and I have submitted my improvement recommendations to the IT team. I am asking my beta testers to email me all their complaints and suggestions so that I can expand my wish list and also have some muscle behind it.
Meanwhile, I want to point beta testers at a potentially very important new discovery that began to emerge in July which could fuel a massive exploration bull market for resource juniors and serve as a case study for the Share Collective. The star junior is TSXV listed Novo Resources Corp which has acquired about 1 million hectares on the northern margin of the Hamersley Basin in Western Australia. The Hamersley Basin is part of the Pilbara Craton which was at one time part of the Kaapvaal Craton which hosts the 2.6 billion ounce Witwatersrand Basin in South Africa. The similarity between the basins in terms of age and stratigraphy has driven past exploration for gold-bearing conglomerate reefs but with only limited success in the eastern margin of the Hamersley Basin. Novo's efforts in the Beatons Creek area ended up with a modest resource and scant evidence for meaningful down-dip potential.
However, recent gold nugget discoveries by prospectors with metal detectors at the northwestern margin of the basin near Karratha helped Novo's Quinton Hennigh realize that the prospective conglomerate horizon daylights in an area where it was assumed to be hopelessly covered by later rocks of the Hamersley Basin. The discovery of in situ gold nuggets in a very coarse non-pyritic conglomerate suggests that an entire reef which includes the near shore portion missing from the Witwatersrand reefs may have been preserved in the Hamersley Basin.
In contrast, the reef in the Beatons Creek area at the opposite end of the basin may be the down-dip distal remnant of what was once equivalent to Wits 1.0. The new discovery can be viewed as a "local freak show" which may yield 10-20 million gold ounces, or as Wits 2.0, the idea that such gold mineralization is laterally and downdip widespread as in the case of Wits 1.0. In both scenarios the audiences are dividing into a pessimistic camp which fears that the gold grade will prove marginal for commercial development for either scenario, and an optimistic camp hoping that the grades will prove similar to those in the South African reefs. The main problem is a severe nugget effect which means that assessing these gold bearing conglomerate systems will be a measurement challenge that could take a long time to resolve. The result will be an interim market bubble which fluctuates between the extremes of the "local freak show" and Wits 2.0 scenarios.
This represents an unusual opportunity for beta testers to utilize the Share Collective to visualize the various potential outcomes. John Kaiser as a founder of the Share Collective has adopted the member name "JohnKaiser" so that he can function as a "tour guide". When TSC goes commercial the JohnKaiser account will be "retired" in keeping with the principle that TSC members must remain anonymous and evolve their reputations from scratch within the Share Collective. If you managed to adopt a member name that reveals your actual name, please ask the TSC administrator to change it to something else! Keep in mind, the disclaimer is that all members who share anything are assumed to have a conflict of interest with the goal of influencing the market and the behavior of everybody else so that they can personally profit. That probably is not how you want to be perceived and treated in your real professional world.
A TSC beta tester called Sericite has been the first to post an outcome visualization for Novo's Comet Well project. Sericite's OV represents the pessimistic local freak show camp with a modest deposit of 10 million tonnes of 2.7 g/t gold open-pit mined at 3,149 tpd with an OpEx of $29.89/t and CapEx of $100 million which yields an NPV of USD $204 million at a 13.5% discount rate and an IRR of 60.5%. That is not bad, except that if this is all that Novo ever delivers, the target stock price is $1.29 thanks to an 80% net interest and 160 million fully diluted.
JohnKaiser has instead dreamed up the most positive tonnage scenario imaginable where a 2 metre thick horizon with a strike of 6.5 km and downdip extent of 2 km before the Comet Well boundary is reached represents 67,600,000 tonnes. He has chosen 5.0 g/t gold and a 15,000 tpd open pit mine scenario which yields an NPV of $3.5 billion at a 13% discount rate with an IRR of 401% that translates into a future stock price target of $21.79. JohnKaiser represents the optimistic local freak show scenario, not the Wits 2.0 scenario which envisions duplicating the optimistic local freak show many times over.
Beta testers are invited to follow Novo Resources Corp and its projects, in particular Comet Well where Sericite and JohnKaiser have already shared outcome visualizations. They should also follow ASX-listed Artemis Resources Ltd which is the second largest landholder in this region and which has optioned 50% of the conglomerate hosted gold mineralization to Novo for most of its holdings except a property called Mt OscarWits. Above all, in addition to posting comments beta testers should try their own hand at creating outcome visualizations and ultimately sharing them.
John Kaiser the newsletter writer issued a Good Relative Spec Value Buy at CAD $2.12 on July 24, 2017 for members of Kaiser Research Online. On August 9 he is heading to Australia to visit the Karratha project and intends to publish observations for his KRO subscribers as well as share them within the Share Collective. During this trip he will be checking in on the Novo "boom-towns" in his capacity as the tour guide JohnKaiser. If you have any questions about how to do things within the TSC, please send them using the email provided.
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