RE:RE:RE:Taking Stock of "Sluice Fundamentals"Again, for the sake of context, my responses are
[emboldened in square brackets] TXRogers:
Like I said, I never denied "structured type" gold deposits in the Pilbara. I actually stated that type of deposit (similar to Blue Spec) in the second post:
"And finally the classic Ore Vein hosted high grade gold Deposits: The Pilbara is also featuring an ample amount of these rich vein deposits as well. "
[Yes, I got that, Tx, and I'm pleased we so readily concur on this important point] But my response was primarily focussed on your intial inquiry on what ever happened to the Precipitation Theory discussion - and pertaining to the conglomerate rock specifically.
[My view is that most investors in NVO are buying into the Precipitation Theory (PT) as the source of the conglomerate gold, and for me, even though I also buy into the PT, I remain open to the possibility that none, let alone all, of the conglomerate gold is there as a direct result of it. As you have pointed out, much can happen over the course of geological time, including subsequent subduction events. I would welcome any geological arguments eliminating such possibilities. Moreover, as I previously stated, identifying the most appropriate geological theories will help to better predict what we expect to find where and why, and they also will better determine the exploration methods that are brought to bear in so doing] Regarding the economics of the conglomerate mining vs the hosted gold: I never assumed it was all positive. In fact, I am clearly stating that it will be complex with varying results. Like any mining operation, there are always "cut offs".
[Here, again, I find ourselves in complete agreement] But that's exploration and building a mining business. If this was all a sure thing, Novo shares would be trading at over $1000 right now.
[Right now, I'm only willing to grant that Beaton's Creek comes anywhere close to being considered a "sure thing." And from that perspective, I, and many others, find NVO's current market capitalization pretty pricey, relatively speaking.] My question to you is actually more simple: Where do you draw the line on a Risk / Reward investment point for a junior explorer? Especially one that has grown the size of Novo and now owns a milling operation.
[I know this may come across as sacreligious to some, but I think the risk with NVO has actually increased with the acquisition of the mill, at least in the short to medium term.] I would think that if this kind of risk (as in Novo) in unacceptable, you would just stick to small or intermediate producers that already have a positive business.
[I don't think the risk is unacceptable, and that is why I've re-established a modest position at these current levels, but I anticipate lower prices to come, for reasons I've previously articulated.] It's a portfolio holding that holds serious merit. A most fascinating one, that far exceeds many of the conventional business models of it's peers.
[I agree that it is a most fascinating one, no argument there, otherwise I wouldn't be spending anywhere near the time I do closely monitoring and continually reassessing the risk/reward. I don't see it has currently holding serious merit relative to my other major investments, as I think that too many unknowns and uncertainties remain, theoretically (geological models), empirically (geostatistical sampling), and practically (operational startup issues), so I would disagree that it "far exceeds many of the conventional business models of it's peers." In fact, I have stated on a number of occasions that NVO would have more credibility in my mind had they remained focused on exploration, establishing areas within their vast holdings (cash burn otherwise) that can be economically mined at scale, and JV'd with experienced mining companies to do the actual mining. The fact that they have not taken such an approach can be interpreted in at least two very different ways: First, NVO seriously thinks it can become a major mining company; or secondly, they had no other choice because no mining companies are interested, most notably Kirkland Lake, which had earlier expressed exactly such interest.] Tx