Mining Analyst

Garibaldi Resources is drilling a nickel copper magmatic sulfide system at its Nickel Mountain project in the Golden Triangle of British Columbia. I've discussed it in a recent blog post. My position has been that so far they haven't drilled any new areas not already known from exploration conducted between the 1960's and 1990. Yes, they have intercepted massive sulfides over significant intervals that exceed the results of historic drilling. This could be for various reasons including poor drilling with lots of core loss in the historical programs. More likely, they have encountered the thicker sequence of mineralization within the historic zones.

Excelsior Mining is developing the Gunnison copper project in Arizona. It is an In-Situ-Recovery (ISR) project and many people including a significant portion of the industry itself are not familiar, or at least not comfortable, with it. ISR involves drilling wells and injecting a dilute acid to dissolve copper from fractured rocks. The pregnant solution is then recovered and standard solvent extraction and electrowinning is used to produce a copper cathode (sheets of nearly-pure copper that are sold directly to manufacturers and therefore no refining is required). Lack of familiarity by the market is usually an opportunity for astute and fearless investors, and it is the case here.

In a video titled "Grade is King" , a newsletter writer posts an interview excerpt with Dr. Peter Lightfoot, a pre-emintent geologist in the field of Ni-Cu-PMG magmatic sulfide deposits and consultant to Garibaldi Resources. Garibaldi has recently drilled several intercepts of massive sulfide nickel-copper mineralization at Nickel Mountain in the Golden Triangle of British Columbia. Dr. Lightfoot is duly excited about tenors and grades and expresses his expectation that exploration success will make Nickel Mountain an economic deposit.

This morning Novo has issued a news release to update the exploration at the Purdy's Reward joint venture with Artemis. As revealed and discussed in the geological compendium blog entry I posted several days ago (and which I kept updating with historical commentary), the conglomerate-hosted gold in the Pilbara probably doesn't have a separate fine fraction that would make it easy to explore or provide a good grade estimation for development and mining purposes. A fine fraction would be more disseminated than the nuggety high grade gold they have found so far by metal detector and trenching. Fine gold would therefore be an attractive feature to what is otherwise an extremely skewed hit-and-miss type gold deposit (typical of placers worldwide). Alas, electron microscope work has revealed fine gold to be: halos of particles within a few millimeters of much coarser gold nuggets. Novo believes such fine-grained gold was remobilized and re-precipitated following burial and lithif...

Novo Resources and its supporters are claiming that the Pilbara conglomerates in Western Australia may host the largest gold deposit in the world, even bigger than the Witswatersrand. As a result, a new gold rush is taking place that is every bit as fervent, if not desperate, as the 1849 California Gold Rush. The "17ers" might end up being badly disappointed, however, just like many of the 49ers were. The reason is simple. Geology 101. The following is an assemblage of points being made by an alleged geologist " Blythefan " (who supposedly lives and works in Western Australia) on the Australian bulletin board "Hotcopper". I am only including selected and relevant quotes and quips. My own comments are appended at the end of each paragraph or section. While everything stated here is highly speculative theorizing, it's enough to give major pause. This post will continue to be updated as long as relevant geological points are being raised in this particul...

In the past 3 months, we've had not one, not two, not three, but at least four supposedly world-class discoveries by junior exploration. What are the odds any of these, or more than one, actually works out, and what are the implications for the rest of the junior exploration market? The odds are not good. Even questionable "world-class" discoveries are exceedingly rare and many of them are made by the mining companies themselves (not explorers). Junior explorers do make such discoveries sometimes but even more rarely. Think Voisey's Bay, Pierina, Ekati, Fruta del Norte, Cerro Negro, Brucejack, etc. Out of those not every one is even world class although each has achieved valuation in the billion dollar range along the way.

Pure Gold owns the Madsen underground mine in the Red Lake mining camp near Goldcorp's world-class Red Lake and Campbell mining complex. The planned production profile and grade compares favorable to recently-acquired operating gold mines and advanced projects in Canada (Island Gold, Lamaque, Timmins, Seabee, Macassa, Casa Berardi). Purchase price and subsequent market valuation reveal these underground Canadian gold mining projects tend to trade at a premium to asset value. Well at least at some point in their development or operating lifetime. Pure Gold currently trades at substantial discount to NPV. That will change.