Novo to focus on trenching at Purdy’s Reward, conglomerate explorers' shares tumble

JOHANNESBURG (miningweekly.com) – TSX-V-listed Novo Resources is shifting its focus to trenching as a way of collecting bulk samples at the Purdy’s Reward gold joint venture (JV) project, in the Pilbara, after large diameter drilling failed to deliver a consistent, quality sample.

Novo, which announced the news late on Friday, said that contractor Foraco International had experimented with various drill bit diameter sizes and various sampling techniques, but that the company was not comfortable to use the samples for grade estimation.

“While disappointing, Novo is reviewing other potential options for collecting bulk samples from drilling,” the Canadian firm stated.

Novo said it had accelerated trenching and bulk sampling activities at the project and that it would provide a comprehensive overview of trenching activities by mid-December.

“Given the nuggety nature of gold mineralisation at Karratha, Novo considers bulk sampling the best practical means of evaluating grade and potential viability of the deposit,” the company stated.

JV partner Artemis Resources has been granted a 20 000 t bulk sample extraction permit for Purdy’s Reward, which executive chairperson David Lenigas said on Monday was “potentially very important” for the companies to determine the actual recovered grades of the nugget gold-bearing conglomerate.

Novo and Artemis are now working together on plans to use the permit to undertake systematic bulk sampling for grade purposes. Novo said that it intended to collect bulk material from multiple sites and positions in the conglomerate package at Purdy’s Reward to provide the best understanding of the gold system.

Novo has seen a sharp increase in its market capitalisation since excitement over conglomerate gold in the Pilbara started building in mid-2017, with shares rocketing from about C$0.85 a share in June to C$8.55 apiece on October 10. However, Friday's statement punished the stock, which dropped 18% to C$5.45 a share.

Artemis’ also tumbled on Monday, falling by 20% to A$0.27 a share on the ASX.

The news from Novo impacted on the share prices of other Pilbara conglomerate explorers, including Venturex Resources, Marindi Minerals and Impact Minerals, which also plunged on the Australian bourse.

At the weekend, Surbiton Associates director Dr Sandra Close urged investors to exercise caution, highlighting the risks involved in exploration.

More than 25 publically-listed companies are currently exploring for gold in the Pilbara, all searching for gold that occurs in conglomerates. The theory is that rocks of a similar type and age occur in the Witwatersrand basin, which has produced more than two-billion ounces of gold.

PLANT UPGRADE TO ASSESS GRADES
Meanwhile, Artemis reported that it had started plant upgrade works at its Radio Hill plant, west of Purdy’s Reward.

“The actual grades of all these conglomerate gold plays in the Pilbara is the ‘big question’ on people’s lips right now, and it is therefore imperative that we get this plant operational as soon as practicable to accurately assess gold grades and recoveries,” Lenigas said in a statement.

Engineers have arrived at the Radio Hill nickel/copper/cobalt plant at the weekend and have committed to have the plant fully operational by the end of June next year.

“Apart from being refurbished and upgraded to initially treat about 500 000 t/y of our Carlow Castle cobalt/copper/gold material, we will also be adding a new 500 000 t/y fully integrated gravity gold circuit that will allow us to exploit our numerous gold projects, including conglomerate gold, within the Karratha area. We also plan to immediately relocate our mobile 100 t/y Nickol River gravity gold plant to Radio Hill, hence allowing us to bulk sample conglomerate gold for grade verification purposes, prior to the main plant being ready,” he said.

The Radio Hill mine and plant were closed in 2008 as a result of the slump in base metal prices and have been kept under care and maintenance.