Taking Stock of "Sluice Fundamentals"When it comes to the Novo story, I made some “fundamental decisions” years ago on what really matters most with this investment. I do not share the issues that seem to fester with some investors. And I will explain why in this post.
Let’s begin with a key point which is captured in the following SS statement:
“There remain some "big picture" issues that seem to me to be far from settled though. Most importantly, the 'narrative' or 'story' about the great gold precipitation event which captured the imaginations of most of us so strongly (which some still seem to believe is a given with regard to the Pilbara conglomerates). Aside from the 'halo' effect, there has been no other indication of any fine-grained gold to speak of at Karratha, a la the Witwatersrand.
Discussion about that has pretty well dropped off the radar (with the exception of virtually every single podcast and presentation that QH makes), despite my repeated attempts to recessitate it... crickets. Some simply refuse to question that narrative, and others, apparently, would rather not.”
For me, I had arrived at the conclusion a long while back that the above is actually irrelevant to the story. To deny the existence of a discovery because it cannot be proven on how it was created, does not take away from its actual existence.
This story is fundamentally about the current gold bearing surface conglomerates and their erosion over the millennia. Back on Oct 12, 2017, Novo Stock was trading around to $8 CAN, but I already began suspect that there were some “issues” that would send the markets into convulsions. These “issues” involved the very subject of the SS statement above.
https://stockhouse.com/companies/bullboard?symbol=v.nvo&postid=26807717 The post was read by over 2300 people. No comments came back. The post actually concludes with the statement:
“So, total grade may be similar within a reef as per the Precipitation Theory, but the form of actual gold content may not. There are likely varying degrees of Fine Gold particulate in the reefs, all at the expense of the original Nugget source prior to the final conglomerate matrix formation.
And this may the reason why we may experience “wild” and varying data results from the ore analysis. It could get extremely interesting.”
And it did get very interesting from that point on. Despite trying to understand the differences between the SA and WA craton, it became apparent as the months and years rolled by that it actually was a secondary consideration. It was really tangential.
The Precipitation Theory is only part of the story. The Great Gold Deposition Event that took place between 2.9 and 2.6 Billion yrs. ago was a theory that attempts to explain who gold came out of solution from a high acidic shallow sea in conjunction with the initial stages of photosynthetic life. The first whiffs of oxygen that triggered the Great Gold Depositional Event out of seawater by microbial mats starting at around 3.0-2.9 Ga thus initiating the crustal gold cycle.
https://www.geologyforinvestors.com/wp-content/uploads/Gold-Form.jpg 
However, what is more central to the Novo story is the gold endowment within the surface conglomerates themselves. And when these conglomerates actually formed, containing varying degrees of eroded material. I view each conglomerate layer essentially as a “sedimentary story frozen in time within a volcanic matrix”. And these conglomerates may have not all formed at the same time within the span of the Great Gold Deposition Event. They will have different consistencies and will hold varying degrees of eroded material within their matrices.
The Pilbara is a basin story. A gold mineralized basin story. And this gold may have found its way into conglomerates at different times and stages, during and after the Great Gold Deposition Event. And if so, there would be varying degrees of eroded gold within them as well. The fine gold being the most eroded. In fact, the absence of fine gold reveals more about the state of preservation of some these ancient Pilbara rocks. I expect to find more it in the eroded Egina gravels than anywhere else.
One month after posting the “Wits-2 Gold Deposit: How Problematic is it to Define” in 2017, I follow it up with another opinion post that adds more complexity to the Pilbara Basin gold story. It does not discount the Precipitation Theory or The Great Gold Deposition Event. It simply addresses my thoughts that trying to understand the sources of the gold bearing rock in the Pilbara basin will likely be much more complex than just the Precipitation Theory explanation.
https://stockhouse.com/companies/bullboard?symbol=v.nvo&postid=26964176 But in the end, I really don’t believe all of this matters. Because all of these theories and speculations only try to explain an origin to the gold. The gathered data to date points to a conclusion that the basin is endowed with a minable grade of surface gold, and that is all you really need to know to move forward. This is why you “hear crickets“ from the market and investors with regards to the theories of origin – it’s because these theories are secondary to the real task at hand, which is to mine at a profit the gold that is clearly visible for everyone to see.
That is why last year I posted what I believe is the best way to look at the “fundamentals” behind this enigmatic gold story: The Concrete Nature of Paradox and Paradigms. A quirky “mock discussion” post that attempted to make the point that the only fundamentals that matter pertain to the gold which is present in certain volume of hosting rock type (the conglomerate layer). Find that rock type, and move to extract the gold within it. The path may not be 100% clear on how it got there, but it did. Both for Karratha and Egina (where the conglomerate was eroded away).
https://stockhouse.com/companies/bullboard?symbol=v.nvo&postid=29650132 And now we have a mill to process this discovered gold. It’s Mill-Her Time. And that’s exactly what Novo is going to do. Regardless of what happened 3 billion years ago (and in between).
Those are the Fundamentals to me.
Tx