I found the presentation interesting. The hype surrounding...

I found the presentation interesting. The hype surrounding conglomerate gold is slowly being eroded away, and reality is getting through slowly to interested participants. This is my view on the conglomerate story as best I can explain it, we all view things differently so alternate views may be just as valid.

Bob Moriaty stated a year ago that Novos valuation was ridiculous. It was much higher than what was reasonable. But he pumped it like crazy. There are only two scenario trends that could follow this inflated SP, they are long term because of the effect of sentiment.

1) Exploration results over a period of time build up so that the amount of gold, its continuity, the grade to be actually fed into a mill etc are known and estimates can be made that trend towards justifing a high SP, leading to a situation where the SP is seen as "reasonable".

2) The SP drops towards what is "reasonable" given what is revealed during exploration.

What I find interesting is that 2) happened quickly to most of the Australian listed shares, in my view it has already happened to all of them except DEG and ARV, where 1) is occuring. The SP has been the 15-20c range, and given prior to the conglomerate story they were trading around 5-6 cents, but it is largely their conventional projects that are justifing the increased SP given meaningfull conglomerate exploration results have not been forthcoming.

Kai reached 2) long ago, and MZN has dropped even lower as sentiment works both ways, negative sentiment has sent the latter below 2).

Both Novo and Pacton are now following the 2) path, in Novos case 1) was expected, but is not forthcoming, and looks likely to move further towards 2) is accellerating as reality bites.

The fact that Novo are jumping straight onto the Pioneer/Farno ground shows they at this stage have largely "moose pasture" over their huge tenements, nothing nearly as good has been found in regional exploration.
Mining the of the ultra low grade stuff on the plains to make big bucks will have enormous challenges, and I certainly take Bob Moriatys rant on this stuff with a grain of salt. My view is its got to be marginal, otherwise Farno/Pioneer would have insisted on retaining some free carried share.

KAI with its underexplored but very promising targets would have to be a most desirable land package for any serious player, you can bet Novo would kill for it.