I thought it would be fun to play around with some numbers based off of the data from the recent news release and interview…

From the News Release:

  • A total of 162 gold nuggets with a total weight of 324 grams was recovered through systematic metal detecting of Novo’s first exploratory trench
  • Nuggets were found scattered along the entire length of the 579 m long, 3.65 m wide north-south oriented trench, but most were recovered from a 50 m long interval within a swale

From the Kereport interview:

  • Bulk samples might contain 50% or more gold when including the “finer grained” gold

Now lets try to paint a picture of what that could mean in terms of gold value and lateral foot print. The following slide is from the NR:

 

Egina-trench

Egina-trench.

 

As you can see in the slide above, the first bulk sample pretty much looks like a copy of the adjacent trench in terms of detectable nuggets. Thus, for simplicity sake, lets assume that ground heading to the main target doesn’t get better nor worse.

Recap of the known data:

324 grams of gold detectable gold was recovered from a trench measuring 579 x 3.65 m2 = 2113.4 m2.

Extrapolations:

Now lets bump it up 50% to account for the finer gold content. That would mean that there is 324 x 1.5 = 486 grams of gold in that trench.

Now lets extrapolate that 3.65m wide slice into a 500m wide trench instead, like so:

 

Egina-trench2

Egina-trench-Extrapolation.

This rectangle (“Trench 2”) measuring 579 x 500 m2 is made up of 137.0 copy-pasted slices of the original trench. Given that the swale looks to be broadening out, this might be conservative, but at the same time it is indeed a theoretical extrapolation so conservatism is justified.

Total extrapolated gold content for Trench 2 is thus: 486 * 136 =  66,582 grams of gold or 2,141 ounces.

2,141 ounces is worth about AUD$4.7 M assuming an aussie gold price of AUD$2,200/ounce.

Recap: A copy pasted extrapolation measuring 579 x 500 m2 of the known trench would contain gold worth around AUD$4.7 M.

A 579 x 500 m2 rectangle equates to a rectangle measuring 0.29 km2.

That would mean 1.0 square kilometer of the exact same gravel profile would contain a gold value of 1 / 0.29 * 4.7 =  AUD$16.2 M.

Thus, a 10km2 patch would theoretically contain gold worth AUD$162 M.

  • For context:

 

 

  • Zoomed in view of the Egina Project area:

 

 

… I added a 10km2 box in the slide above for further context.

Now there are still a lot of question marks left to be answered that would affect the gold content as well as margins:

  • Will the gold content improve as we head east from the Egina Mining lease where the swale(s) (main pay zone) broadens out?
  • Will Novo/Sumitomo mine everything or focus on the swale(s), thus lowering recovered gold amount but hikes up margins?
  • How much of the thousands of km2 of the Greater Terrace hosts mineralization similar to the first trench?
  • What will the costs be?
  • Will the pay zone get deeper out in the Greater Terrace and perhaps host more gold?
  • Is the Egina Mining Lease area better or worse than the average gravel profile?
  • What kind of footprint would we be allowed to mine?

To Sum Up

I wrote this article to put some context in regards to what the trench data could mean for the Egina Project and Novo’s vast land holdings outside of the Egina Project that are prospective for Egina type gravels. If the recent trench is a valid indicator of the average gold content across the immense terraces that covers thousands of km2, then the inferred value of Novo’s terrace ground could be… Very high.

We will know more in due time, but I think I understand why Novo/Sumitomo are seriously contemplating to go straight for full scale production and skip economic studies.

Now I’m patiently waiting for the bashers to proclaim that math is equal to pumping (It’s a trap!).

(Note: This is not investment advice and I am not a geologist. Always do your own due diligence. I own a lot of shares of Novo Resources which I have bought in the open market and am thus biased. Novo is a passive banner sponsor on my site. )

Best regards,

The Hedgeless Horseman

Follow me on twitter: https://twitter.com/Comm_Invest

Follow me on CEO.ca: https://ceo.ca/@hhorseman

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