Recent news from Novo Resources (NVO.V) has put their stock as well as partner Artemis Resources (ARV.AX and ARTTF.US) under pressure. Creating a gift of an opportunity for investors positioning themselves in the early days of the joint venture between Novo and Artemis to explore the Purdy’s Reward gold project. The big gold nuggets in those conglomerate beds haven’t gone anywhere and they are just getting started at exploration.
The news that freaked a bunch of investors out was that the large diameter drilling wasn't working at collecting material to assay. To me, this really was a non-event, but nonetheless it caused a healthy correction for Novo, as well as Artemis and other juniors involved in the Australian Gold Rush at Purdy’s Reward. Since I started covering this emerging story in the past few months, I’ve stated on several occasions that this project is going to be all about bulk sampling to get a representative grade.
The first mini-bulk sample they did, came back with an incredible grade of around 2 ounces p/t, right at surface. Right away the arm waving took off, and the one that got the most attention was Novo because they had a lot of the down dip ground from where the conglomerate beds daylight over by Purdy’s Reward.
News that the large diameter drills won’t work, and bulk sampling will be the focus is great news to me. It will put all the focus on where the conglomerate beds come to surface and where they sub crop with a thin amount of cover.
Needing to focus on bulk sampling gives my website sponsor Artemis some distinct advantages over competitors in the area. One of those is that they are refurbishing an old plant that basically needed rewiring and new instruments as it had been idle for nearly a decade. They have started the process of turning the plant back on, plus adding a gold recovery circuit to the plant, which you guessed it, will be perfect for processing bulk samples.
Another big advantage that the news has for Artemis is that this will put a lot more importance on ground that has outcropping and sub cropping conglomerate beds. Not so much the down dip conglomerate, especially where it gets far away from the outcropping area. With all the ground that Novo has, and what Artemis has of the outcropping region, the horse race just got a lot closer.
A couple weeks ago, I hosted the Exploration Revival conference in Vancouver, John Kaiser was a keynote speaker and he explained how he values juniors. He actually has formatted his method on his website for members, so they can run the numbers themselves and then compare an Artemis to a Novo. As I was watching his presentation, I was impressed with just how undervalued Artemis is compared to Novo, it doesn’t look like they are in a close horserace, it looks like Novo is 20 lengths out in front.
Since the conference, the news about the challenges with the large diameter drilling that emphasized how important bulk sampling and ground with outcropping conglomerate beds are. It has also made the horserace between Novo and Artemis much closer, Novo is still way out ahead, but Artemis is looking primed to start catching up.
I don’t make these points to say Novo is overvalued, actually I think they are real cheap because they have a large amount of the outcropping area. What I am saying is, for those that want to own Novo, this dip has created a great buying opportunity. But, for those that believe in this play, and like to look at deep discounts, my website sponsor Artemis is making a strong case for investors to take a look at what they have in the area.
I’ve done my homework on the Pilbara region, and I’m convinced this is the most important gold exploration project in my career, and I’ve seen some serious ones during the past 25 years I’ve been in the mining business.
Part of my homework was to map the entire Pilbara basin for where the outcrop and sub crop should be. I’m not ready to put that out to the public, but I have showed one person, Ed Mead from Artemis. A few days prior to the Exploration Revival conference, there was another mining conference in Vancouver that I had a chance to chat with Ed Mead and David Lenigas. They had a big bag of the gold nuggets from Purdy’s Reward, for a guy who is bullish on gold exploration, it was pretty impressive to see.
During that conference, I had a chance to pull Ed Mead to the side, take out my iPhone and pull up Google Earth, then focus in on Purdy’s Reward and where they are trenching at the outcrop. I then showed him where I think the outcrop of the conglomerate bed is and should be for the Pilbara. I didn’t have to ask him if I had it pinned down, I could see it in his eyes and the smile on his face.
After the news came out, I realized how important that mapping of the outcropping conglomerate bed is, as it gives me the blueprint for where exploration will be going in the future. It also emphasized to me how much of that key ground my website sponsor Artemis has in the Pilbara. Not just at Purdy’s Reward, but on plenty of their other ground throughout the Pilbara basin.
The bottom line is, the Pilbara Gold Rush is just getting started. I see a thick conglomerate bed, with excellent distribution of nuggets that means there is realistic potential for many discoveries of multiple million-ounce gold mines. Just like since day 1, of covering this play, it has been about bulk sampling and I’m glad to see everybody is getting on the same page. I really like that my website sponsor Artemis is closing the gap when it comes to key assets and ground in the area.
Not long after I started following this project, I started calling it the Wits 2.wow play, the reason for the wow part is because I think it has the realistic potential of being bigger than Wits 1.0. The main reasons are, the conglomerate bed seems to be a lot thicker at Pilbara, so far it also looks like there is less of a dip, and Pilbara is all about course gold nuggets, while at Wits 1.0 it was fine grained gold.
One of my early concerns about the project was about the distribution of those nuggets. This conglomerate bed is similar to a gently dipping diamond kimberlite dike, and in those the diamonds can settle to the bottom of the sheet. I was worried about the same thing happening with these conglomerate beds, but when I saw pictures coming from trenches they were digging, with the hits of gold from metal detectors on the walls of the trench, my concerns turned to confidence.
It looks like the gold nuggets are not confined to the bottom of the conglomerate bed at Purdy’s Reward, and that there is great potential for wide distribution of large gold nuggets from top to bottom of the conglomerate beds. If that is the case, and it is over much of the area that daylights or is under shallow cover, they won’t need to go very far down dip to have a lot of bonanza grade gold that is very profitable to mine.
Another topic that I asked Ed Mead about was my curiosity concerning the up-dip potential, where there is another large area covered by Artemis ground that few are talking about at the moment. I will leave that for a future post. Let’s just say, there is potential up there that not a lot of investors that are bullish on the area are paying much attention to…yet.
I’ve heard a fair amount of bellyaching from the audience following the project about this taking a month or two longer to get assay results. This Purdy’s Reward project and surrounding area of outcropping conglomerate are much more important than if it takes a little longer to get the early results. I would much rather have representative numbers that take a little longer than rushed questionable numbers.
This is nothing more than a little speedbump down a road paved with gold. Xmas has come early for the bulls on this area, especially for those that like getting in at cheaper valuations for both Novo and Artemis.
That’s all for now,
Allan Barry Laboucan
Allan Barry Reports
Alset Energy (ION.V)
Advance Gold (AAX.V)
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.
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Website Sponsor Messages
Alset Minerals (ION.V)
Focused on lithium with their key projects in Mexico, looking for low-cost exploration, development and production potential. Visit their website at www.alsetminerals.com to do your homework.
Advance Gold (AAX.V)
Focused on exploration for silver on its well-located Tabasquena silver project, a shadow of a headframe project near an important silver mine, Milagros and the Colonel large tonnage gold mine. Visit their website at www.advancegold.ca to do your homework.
Artemis Resources (ARV.AX and ARTTF.US)
Well positioned with an enviable amount of key ground in the Pilbara region, in the middle of the hunt for the Wits 2.wow gold discovery. Visit their website at www.artemisresources.com.au to do your homework.
Premier Gold Mines (PG.T)
Gold focused, with an enviable portfolio of projects from exploration to mining in Ontario, Nevada and Mexico. Visit their website at www.premiergoldmines.com to do your homework.
Sirios Resources (SOI.V)
Gold focused, drilling high-grade gold target at Cheechoo project in Quebec, located next door to Goldcorp’s Eleanore gold mine. Visit their website at www.sirios.com/en/ to do your homework.
Tudor Gold (TUD.V)
Gold exploration with a strong portfolio of projects in heart of the Golden Triangle of BC, founded by Walter Storm of Osisko fame. Visit their website at www.tudor-gold.com to do your homework.
Wolfden Resources (WLF.V)
Base metals focused, with a discovery of high-grade nickel-copper near Snow Lake, Manitoba and recently added an impressive base metals project in the state of Maine. Visit their website at www.wolfdenresources.com to do your homework.