RE:Taking Stock of "Sluice Fundamentals"For the sake of context, I'll place my comments
[emboldened in square brackets] TXRogers 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 paragraph serves very well to highlight the nub of our differences but it will take a bit of unpacking. First, though, let me be clear, I am not denying the existence of gold in the Pilbara conglomerates. What is at issue is how much gold is there and how profitable it will be to mine. I don't view these points to be well-established as yet. Redflame has pointed out, rightly in my opinion, that it will take much more sampling than has been done to date to determine. Secondly, I will argue that one need not constrain oneself to sampling alone, but that a good geological model (as in more easily substantiated by the data) can more effectively guide that sampling by helping to predict the more potentially profitable areas to prioritize.] This story is fundamentally about the current gold bearing surface conglomerates and their erosion over the millennia.
[I agree, but we have to clarify what is meant by "current gold bearing surface conglomerates." It may be that any given tablespoon of those surface conglomerates contains anywhere from one atom of gold to a nugget that will fill the entire spoon. Moreover, the amount of gold in any given tablespoon will fall in some range of granularity, from fine to coarse. But all that is just to ask once again, how much gold is there and how profitable will it be to mine?] 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 [In reading your post from this link, it is clear that we are in agreement in this regard. I quote: "And key take away from the discussions in my opinion is that
“It appears that the distributions of Fine Gold and Nuggets are NOT the same everywhere”." (emphasis yours). You go on in that post to do yeoman's work in arguing for the "“Precipitation Theory” or the “Great Oxidation Event”, as the genesis of the gold deposit
." Note that I am not taking issue with this theory, particularly as articulated in Frimmel & Hennigh, 2015 https://link.springer.com/article/10.1007/s00126-014-0574-8, as I myself find it to make a whole lot of sense, and I remain as excited by and supportive of that theory today as the day I first became aware of it https://ceo.ca/nvo?628e6edf5c73, and as I was when I first heard the theories of the big bang and continental drift when I was a kid. I felt the same, that it just made very aesthetically intuitive sense to me, and it still does. I was not surprised to find evidence that bacteria can and do precipitate minerals from seawater https://ceo.ca/~roughingit?d70c3fb40e6f, even in modern times. Where we differ, somewhat, is in the interpretations and conclusions that you appear to have drawn from it.
The main interpretive difference is captured succinctly, if nonrigorously in a post of mine at ceo.ca addressed to @Dunite: "I'm not sure about the biogenetic processes involved with microbial mats, but I would doubt that they precipitate gold in bulk nugget form. Rather, my thinking, based on pure imagination, is that at best they would produce small grains that would then find themselves collecting within nooks and crannies, later to be pressed into nugget form via subsequent lava flows, in this case, specifically, the Mt Roe Basalt." https://ceo.ca/nvo?36c23af632eb
Given the great gold precipitation event, I'm not at all convinced that the deposition of coarse grained gold would be anything close to homogeneous. Not only were the oceans likely much more dynamic then than they are now, but the depositional media would have varied significantly along the shores due to alluvial activity. Gold particules that were fine-grained enough to remain in suspension in sea water would likely not be affected as much by the aforementioned dynamics, and therefore one might expect more homogeneous distributions.] The post was read by over 2300 people. No comments came back.
[That doesn't surprise me, sadly] 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.”
[Although I agree with this second concluding paragraph, based on the foregoing, I differ with regard to the first. I would expect total grade to vary (heterogeneity) significantly as a function of coarseness, and to be more similar (homogeneity) as a function of fineness. What has disturbed me most about the application of the theory to the Pilbara conglomerates, thus far, is the dirth of data regarding fine-grained gold (this may not be an issue the deeper one goes into the basin). All that aside, bottom line, the coarse-grained gold nuggets are likely not homogeneously distributed.]
And it did get very interesting from that point on.
[Interesting indeed, but also disappointing, due to the lack of fine-grained gold aside from the halo effect. This was a significant factor in the share price dropping from the all time highs, coupled with the unrepresentative grades first reported from Purdy's Reward.] 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.
[Not tangential at all, in my opinion, as the difference is that fine-grained gold has proven to be much more ubiquitous within the conglomerate layers in the SA craton, whereas it appears virtually absent in the WA craton, so far as we know.] The Precipitation Theory is only part of the story
[agreed]. The Great Gold Deposition Event that took place between 2.9 and 2.6 Billion yrs. ago was a theory that attempts to explain how 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.
[Possibly, but not necessarily due to the precipitation event. The gold here may actually be sourced in Archean hydrothermal activity, as per DeGrey's Hemi discovery.] 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 [Which serves well to indicate that we find ourselves increasingly in agreement, except when we come to our respective tentative conclusions.] But in the end, I really don’t believe all of this matters
[I think it matters greatly]. Because all of these theories and speculations only try to explain an origin to the gold
[true enough, no disagreement there]. 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
[Here I think is where we differ the most, Tx. Although there currently are some areas, like the Beaton's Creek prospect and Millennium's Nullagine (hydrothermal?) deposits, I do not think the gathered data to date is anywhere near sufficient to support the general claim that there are conglomerate deposits that can be economically mined at scale throughout the basin]. 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
[I disagree, because the geological theories will help to better predict what we expect to find where and why, and they also will determine the exploration methods that are brought to bear in so doing], which is to mine at a profit the gold that is clearly visible for everyone to see
[I agree with that, but a nugget here and a nugget there is not going to cut it, and anyone assuming that it is indicative of deposits that can be economically mined at scale is being overly optimistic, in my opinion]. 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 [A very entertaining post, which I also really enjoyed reading. I very much agree "The fossicking activity is now grown to an industrial scale potential" which I have referred to as "fossickering on steriods." Alas, due to restrictions on my time, I cannot engage this post in much detail here, except to note that I completely agree that attempts to pin down grade from a few bulk samples as accurately as possible both was and remains a waste of time, when quickly establishing a reasonable lower bounds for many more samples would suffice. I transmitted my concerns to Leo in this regard some time ago https://ceo.ca/nvo?0e8441860170. What I think I disagree with most about this post is that it appears to harbour what I think are some unsubstantiated assumptions regarding the economics of "mineralized continuity" throughout the basin (i.e., NVO's massive land holdings).] 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).
[I agree, although I would say it is put-up or shut-up time... Those are the Fundamentals to me.
] Tx
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