News Lifted From Hot Copper
From today's Australian newspaper (28/11). 'The euphoria surrounding the Pilbara gold nugget rush has turned to panic and stocks across the sector tanked yesterday in the wake of unsettling exploration results from leader Novo Resources. 'Canadian-listed Novo, whose biggest shareholders include famed prospector Mark Creasy, on Friday night revealed attempts to drill the conglomerate deposits at its Purdy's Well with a specialist drill rig had proved "disappointing". 'Shares in Novo had surged over recent months as it began unearthing large amounts of gold nuggets from the conglomerate rocks at the surface of its landholdings in the Pilbara, sparking a rush of about two dozen ASX-listed companies to the region. 'Novo and others have hypothesised that the watermelon seed-shaped nuggets in the Pillbara are analogous to the famous Witwaterstrand gold basin in South Africa, the world's most prolific source of the yellow metal. 'The theory has met with scepticism from many corners of the Australian gold mining industry and there have long been doubts about the ability of the various conglomerate players to ever drill out the deposits, given the wild variability in grade. 'Novo had hoped the modified rig would generate enough samples to help build a better understanding of the scale and richness of the conglomerate rocks at the centre of the frenzy. '"Upon careful review of sample consistency, integrity and recovery, Novo has decided it is uncomfortable with the product and its use as bulk sample material for grade estimation" Novo said in a statement. 'The news sparked a bloodbath among the numerous local stocks active in the Pilbara conglomerate space. 'The likes of DeGrey Mining, Kairos Minerals, Impact Minerals and Marindi Metals all fell by 20 per cent or more and Artemis Resources, the biggest of the ASX-listed plays and a joint venture partner of Novo slipped 19.7 per cent. 'Novo itself fell 18 per cent on Friday night to $C8.40. 'Artemis executive director Ed Mead said he was bemused by the panic in the market, given there had long been an expectation that accurately drilling the conglomerate deposits would be complicated. '"All they've said is the large diameter rig that was selected, basically with the terrain is not proving to be as good as was hoped" Mr Mead said. '"It just means they're going to look around for other equipment". 'Mr. Med said Artemis was weighing up the use of trenching or exploration shafts over its exploration ground in the expectation it should be more effective than drilling. '"We've always thought if you're going to do anything, probably trenching and sinking shafts is the best thing you can do" he said 'He said Rio Tinto had sunk exploration shafts into its Argyle diamond deposit as a means of getting a better handle on grade and mineralisation, and a similar approach could also be effective for the Pilbara gold plays'