SVH Tracker - September 25, 2017: Novo pulls off Karratha Live
Novo Resources Corp managed to pull off a live feed from Karratha that got piped into Quinton Hennigh's presentation at the Denver Gold Forum on Monday September 25, 2017. Given the talk was only 15 minutes it was a bit never-wracking watching the time slip away as Luke Meter wove his metal detector over all the pink circles marking hidden gold nuggets. It got worse when two workers started their jackhammers which seemed to have a hard time breaking up the rock of the conglomerate bed. Once the rock had been broken up began the next ordeal which was smacking open the rock to reveal the gold nugget the metal detector beeped was inside. During my site visit last August I filmed Quinton working up a sweat as he bashed rocks to reveal the nuggets, which certainly did not happen as brilliantly as it did in that July 12 video. So I had reason to fear a bust within the narrow time frame.
The first nugget to pop out was a flattened water-melon seed type but that did not please Luke because he wanted to reveal a nugget embedded in the rock. Then a bit of panic began to set in as they jack-hammered away at a piece of rock that bleeped quite loudly. The other worker rushed in front of the camera with a small nugget embedded in rock while the first worker dug frantically through the broken rock pile, touching each piece to the detector before tossing it. Time was running out. Next up was John Kaiser's big winner from 2016: Arizona Mining Inc and its Hermosa-Taylor project.
With a shout the first worker leapt from his rock pile with a just in time 3/4 ounce prize in his hand.
What was missing was a clear sequence of a rock being cracked open to reveal a nugget. With enough time every single one of those purple circled spots would have yielded a gold nugget. I replayed the final nugget "discovery" several times but could not rule out that it appeared like a magic sleight of hand. This is unfortunate because if this were a fraud it would have been much easier to jackhammer "open" a pre-broken slab with an embedded nugget.
What will have impressed the audience at the Denver Gold Forum was Quinton's willingness to risk the clock running out without any gold nugget revealing itself, though the clumsy efforts of the workers to deliver the goods may yet raise questions. This phenomenon in Karratha has way too many participants to be a functional conspiracy. One reason the Bre-X fraud was able to carry on as far as it did was because access to the exploration site was strictly controlled by certain management people with a sharp eye for competent geologists. And nobody ever saw any gold.
While Karratha Live was quite a marketing stunt which pleased the market, what I saw in the new presentation given in Colorado Springs interested me a lot more because based on my own site visit I have no doubt that there are a lot of nuggets naturally associated with the conglomerate beds in a region that goes well beyond the Comet Well and Purdy's Reward claims. In SVH Tracker September 22, 2017 I focused on the tonnage potential of the Purdy's Reward claim shared 50:50 between Novo and Artemis Resources Ltd. For the first time Novo has provided sections of the rock types looking southwest.
The first section focuses on the portion covered mainly by the Comet Well-Purdy's Reward claim package which straddles the conglomerate bed where it daylights. The cartoon makes it clear that the conglomerate bed sits on the older basement rocks while on top of it sits the volcanic Mount Roe Basalt, which itself is overlain by the sedimentary Hardey Formation. The younger volcanic Kylena Basalt overlies the Hardey Formation. What this means for other juniors in the region is that if you have Mount Roe Basalt or the younger Hardey or Kylena rocks exposed at surface, you are probably sitting on a region wide conglomerate bed that hosts gold nuggets at Purdy's Reward. This is evident in the 94 million shares Kairos traded on Monday out of its 694 million fully diluted.
The second section starts to reveal the scale of Novo's 100% exploration license applications covering over 7,000 sq km. The government has started to approve these claims. The vertical dimension has been exaggerated 10 times (note that the vertical scale depicting 500 m is the same length as the horizontal scale depicting 5 km) which makes the dip look steeper than it actually is. What this section shows is that the conglomerate bed on the Purdy's Reward and Comet Well claims extends downdip only 1 km or so before running onto the 100% owned Novo ground. In this cartoon the conglomerate bed is about 500 m deep at a point over 10 km southeast of the Comet Well-Purdy's Reward boundary. To visualize the tonnage footprint consider that each sq km hosts about 2.6 million tonnes per metre of thickness. If this conglomerate bed existed underneath all 7,000 sq km of Novo's 100% owned ground, a 1 metre thickness of this vast "sheet" would represent 18 billion tonnes of rock, or nearly 40 billion tonnes if the bed averages two metres thick. Start plugging in an underground mineable gold grade such as 10 g/t and you come up with some really stupid numbers. Obviously it will not be so simple and if the grade drops below a certain level it is all just a scientific curiousity. I walk you through these numbers just to give you a sense of the scale of Wits 2.0 as opposed to the "local freak show" at Purdy's Reward.
Do we have reason to be optimistic that these gold bearing conglomerate beds could be so laterally extensive? In 1984 CRA Exploration (now part of Rio Tinto) acquired 12 exploration licenses about 50 km south of Purdy's Reward and drilled a 2,269.95 m deep stratigraphic hole in December 1984 which bottomed in basement greenstone rocks which start at a depth of 2,133.43 metres (Source: Final Report on Exploration Completed within the Mingar Project Area - 1987). The goal was to assess the potential for paleoplacer gold or uranium mineralization. This is not the first time the Hamersley Basin is being explored for Witwatersrand style reefs. While the entire core hole was logged, only certain sections were assayed. The most promising was a pyritic quartz-pebble conglomerate at a depth of 1,756 metres which yielded two assays of 10.67 g/t gold and 11.7 g/t gold over a half metre interval. This formation, equivalent to the Hardey Formation which was already known for its spotty gold content, transitions into a 51 metre thick "basalt breccia" at 2,082.25 which has a sharp contact with the greenstone basement rocks at a depth of 2,133.43 metres.
CRA is unsure about the nature of this material which it describes as a "very coarse basaltic breccia to extremely immature basaltic conglomerate" which it thinks may have been reworked Mount Roe Basalt. It rules out a basement greenstone origin. Basaltic clasts sometimes exceeding 30 cm are supported by an extremely fine grained matrix with "limited laminar bedding", something that requires anoxic conditions. CRA never assayed any of this 51 m sequence at the base of the Hamersley Basin, conglomerate beds that look suspiciously like the beds that daylight at Purdy's Reward. Quinton Hennigh has confirmed the location of the CRA hole and it is within the 100% Novo claim application. CRA concluded the "potential for significant paleoplacer Au/U mineralisation is considered negligible" and dropped the tenements in 1985. CRA was looking for Wits 2.0 but it may have been too focused on what Wits 1.0 looks like. It will be quite some time before anybody spends money drilling to a depth of 2,000 m when Novo can start where the bed daylights at Purdy's Reward and march down-dip for 50 km.