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Novo president asks for patience from Pilbara conglomerate gold skeptics


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Novo president asks for patience from Pilbara conglomerate gold skeptics

Novo Resources Corp. President Quinton Hennigh sympathizes with Australia's skeptics who doubt his company's Pilbara conglomerate gold potential, but he urged patience and suggested that those misgivings could be transformed within six months when he reveals the gold's geological source and when the critical bulk sampling will hopefully be underway.

He told reporters Aug. 8 at the Diggers & Dealers Mining Forum in Kalgoorlie, Western Australia, that while many in Australia are skeptical of the company's discovery, some analysts and geologists have been convinced by site visits. At the same time, Canadian financial services firm Red Cloud Klondike Strike Inc. remains the only group with an analyst providing coverage of the company.

While Australian analysts have expressed doubts about Novo's inability thus far to identify a resource at a defendable grade, Hennigh said the company is in discussions with the state mines department about reporting guidelines that could lead to publishing a mineralization report late this year. The company is also targeting large-scale bulk sampling by early 2019.

Hennigh acknowledged that "everybody wants to see instant grades," and said he sympathizes with analysts who support the company's efforts despite the lack of immediate results.

"We're trying to put our finger on particular strata that are generating the nuggets. Everybody is waiting [with] bated breath for the grades, but there's no way I can see putting a resource to this right now," Hennigh said. "We're exploring, and within the next six months we'll be able to talk about some other very, very interesting things. We'll have a lot of information that will put this discovery in context. The $64,000 question on the geology is, where does all the gold come from? We think we know where the source is. We'll let you know."

Hennigh agreed with Wayne Bramwell, the new CEO of Novo's partner Artemis Resources Ltd., who suggested that hyped up geological analogs with South Africa's Witwatersrand Basin had been a distraction. Hennigh said the Pilbara was unlike the Witwatersrand Basin in many respects, though there are some similarities.

However, Hennigh added that it was clear that the Pilbara system is huge and suggested that many skeptics had a preconceived notion of alluvial gold as nuggetty and of limited distribution — "like a river channel, meandering around, finding concentrations of gold here and there. This is not that type of system."

Hennigh said Novo has a solid team with experience in marine alluvial deposits whose systems are typically extensive, such as the diamond deposits off the Namibian coast that laterally cover hundreds of square kilometers, and the evidence of what has been observed in the Pilbara bears this out.

Hennigh noted that Novo's Karratha project has gold distributed along an 8-kilometer strike, but with a "massive stack" of conglomerates that makes it hard to determine exactly where the top and bottom of the gold-bearing section is in each case, it is much more challenging than Beatons Creek, where conglomerates are easy to discern.

He also pointed out that there are paleo-alluvial gold occurrences nuggets in conglomerate over a vast area in the Pilbara, and many companies have found them all along the northern edge of the Fortescue Basin, including Novo at Comet Well and Purdy's Reward, along with De Grey Mining Ltd. and Kairos Minerals Ltd. elsewhere in the region.

Novo also knows a lot of gold occurrences in the east Pilbara where it did some work earlier on, while Marindi Metals Ltd. is also starting to see finer-grade gold at its Bellary Dome project 150 kilometers south of the Novo's ground.

All of this indicates that the Pilbara has a large conglomerate gold system as a 200 million-year hiatus at the base of the Fortescue Basin has served to help concentrate gold in that geological environment.

"It's a testament to how laterally big these systems are," Hennigh said.