While on first appearances the exploration results from late...

While on first appearances the exploration results from late last year might seem modest, but I dont view it that way.

The market has little info to go by and its inevitable that whatever KAI find will be compared to Novos findings, which on close analysis, are not terribly encouraging, not necessarily because the conglomerate deposits they hold are poor, but rather because of the inept way Novo have gone about exploration, and the fact that they use "party tricks" in an effort to enhance the few results they have obtained. While the Canadian market is content to swallow it all, the Australian market sees Novos results for what they are, and hence discoveries made by KAI, DEG, are tarred with the same brush automatically.

Hennigh is depicted as some sort of God on the Canadian stock forums,  more or less on the say so of his good friend Ramper Bob. Outside the Pilbara he may have done some good work, but his work in the Pilbara has been less than sucessfull. Most people are familiar with the series off stuff ups demontrated over the last year or so. But prior to this he spent seven years working on coarse gold in conglomerate at Beatons Creek, and with an academic background heavily slanted towards Wits theory, we could have expected better results.

Having scanned over the Beatons Creek mineralisation report, I note a familiar pattern. Novo started drilling Beatons Creek in 2011, and the drilling results for the period 2011- 2017 could not be used in preparing resource estimates, the reason given were that in the period 2011-2016,  a "dust supressor was not used", and during drlling in 2017  the "air pressure was to high".  Without a more detailed explanation  it is difficult to say much more- can you help here @black Cat ?

The Beatons Creek deposit is younger than the Wits, which is interesting.  KAI reports finding at least 10 km of strike in the conglomerate above Mt Roe Basalt, (roughly 4 times the strike at Beatons, with much more to be investigated)  but is it in an equivalent strata to Beatons Creek? I note in the last ann there is no reference to Beatons Creek at all, only it is in equivalent strata to where nuggets were found previously. So I raise the possibility that it might not be.

We know KAIs tenements are over a 100km from Purdys/Comet Well,  and one thing to consider is the origin of the gold that ultimately ended up in the conglomerate in respective conglomerate...they both spewed for from underground at some early stage and were subject to similar remobilisation, processes unknown. But because of the physical seperation, there will be differences in the nature of the deposits, as we see with all other mineral deposits of the same type. So general characteristics may be similar, but thats about all that can be said.

The point Im making is that the market assumes they are the same at the present,  but the differences will be important. If Comet Well turns out to be a marginal deposit this does not mean KAIs conglomerate under Mt Roe basalt is. Head grade will be different when it comes to mining, and as Ive posted before at this early stage it looks like KAIs conglomerate may have advantages here due to the conglomerate thickness.

But the big advantage may be the conglomerate above Mt Roe Basalt. If it can be drilled and a resource defined then this might justify the establishment of a processing plant in situ, which processes both a defined resource above the Mt Roe, and a less well defined (because of the nugget effect) resource below. This avoids the dilema faced by Novo in justifying a plant where the resource can probably never be defined adequately. KAI has previously approached conglomerate as being supplimentary feedstock for a plant located to also process gold from the Mt York area 50 km away... this now looks like it could be a fall back position, or a temporary shorter term solution.

So I would expect KAI to prioritise exploration of conglomerate above Mt Roe Basalt in the forthcoming exploration season.

Untill sufficient work is done to show the clear differentation between KAIs and NOVOs conglomerate, then KAIs SP will be tied to Novos results so far. If the gold prices increases as some expect, the differences will be readily identified as interest and close scrutiny of junior explorers happens. In the meantime good results will build a background picture, but it will be difficult for KAI to get the recogition it deserves.