I came across a link to this post from @Stranius on stockhouse today while on CEO. Never read any of his posts before but he is a well respected poster according to those who frequent Sh. His well thought-out dissertation hit home with me and I wholeheartedly share his assessment with regard to KAI and DEG being in the heart of, what may well turn out to be some of the best ground in the Pilbara.
2.5 stars User Actions December 06, 2018 - 04:18 PM 635 Reads Post# 29078679
Egina: A Closer Look
With the earlier post that provided a detailed look at some of Pacton’s previous Pilbara acquisitions (link) I’d like to focus more on Pacton’s acquisitions specifically around the Egina region.
Egina is an important region to focus on because by Novo’s own admission, had they known about Egina 18 months ago, they would have started there [instead of CW/PR in the Western Karratha region ] (link). Egina is on the same conglomerate system (basal conglomerates of the Foretescue group) as CW/PR. At Egina, Novo believes that Fortescue group conglomerates have been eroded over time releasing the previously trapped gold into an unconsolidated loose gravel. Novo’s Egina work program appears to be focused around granted mining leases M47/560 and M47/561 covering approximately 11.8 sq km which can be seen as two black squares on the following map (link):
Revealed quite prominently in the map above are the key Egina-centric players and the plentiful gold occurrences that have been identified in the region by Novo, De Grey, Kairos and Pacton. One doesn’t have to look very far to see a plethora of news releases from each of these players announcing gold discoveries on their near-Egina tenements. Here are just a few recent press releases:
Using the location of Novo’s Farno-McMahon granted mining lease M47/560 as a “conceptual” epicenter of Egina (which is also where the company’s Egina work program is currently centered), the map below provides a sense of line-of-sight distances to other features in the Egina region.
Here are some examples: The future site of De Grey’s proposed 1Mtpa (base case) processing plant is ~25km due NNW at Indee The distance to Kairos’ recently announced gold nugget discoveries at the Croydon project is between 20km and 30km in the direction of SSW (see Kairos press release above) Pacton’s gold nugget discoveries at Friendly Creek, Golden Palms and Hong Kong are between 7.5km and 20km in the direction of SSE (see Pacton’s press releases above)
The point here is that if you believe that Farno-McMahon mining lease is the Egina epicenter and if you believe that the gold-bearing system is at a minimum regional (not necessarily basin wide) then all these companies (Novo, DeGrey, Kairos and Pacton) are well positioned benefit from the grand unveiling (even if there are patches of richer ground and patches of barren ground in the mix).
Let’s turn our attention to another matter (which will lead us back to Egina). The illustration below shows the layout of the Fortescue Group (including Mt. Roe) throughout the Pilbara region and stretching from PR/CW area down to Beaton’s Creek and Nullagine some ~500 km apart. Based on the QH interview (link above), Egina is on the same conglomerate system (basal conglomerates of the Foretescue group) as CW/PR and this illustration shows that the same system may extend down further to Beaton’s Creek.
Now if we just focus on the dotted square above and superimpose the tenement packages owned by the various players we have the following map where the squares in the red circles show Novo’s mining leases M47/560 (upper right) and M47/561 (lower left) covering approximately 11.8 sq km and Pacton’s mining leases in the blue oval contain leases M47/354, M47/380, M47/373, M47/374 and M47/638 covering approximately 7.3 sq km. What is immediately apparent is that none of these mining leases are not on top of the existing Fortescue Group but rather beside it some distance, likely established historically to mine the gold in the eroded loose lag gravels. On this section of the map, the Mt Roe layer appears in purple.
On this map, Novo’s tenements show up with a BLUE outline, Kairos’ tenements show up with a GREEN outline and Pacton’s tenements show up with a RED outline.
To take this one step further, let’s remove the non-assigned tenement portions of the above map keeping only the tenements of the key players (Novo, Kairos and Pacton) and also preserving the key Fortescue Group layers to come up with this modified map:
Now if we take the above map and superimpose and scale it on top of the initial Egina regional map we create the following modified map. This map now contextualizes the scale of the remaining non-eroded basal conglomerates of the Fortescue group with the surrounding tenements.
To the extent that the previously trapped gold was evenly distributed throughout the Fortescue group in this area (likely a false assumption) and to the extent that the erosion has caused the gravels to be somewhat evenly distributed in the area surrounding the remaining un-eroded Fortescue layers, one could conclude that the companies most likely to find free gold in loose gravels are Novo, Pacton (Arrow, Friendly Creek, Golden Palms, Hong Kong) and Kairos (tenements E47/3522 and E47/3523).
Now adding back the concentric rings with Novo’s Farno-McMahon granted mining lease M47/560 as a “conceptual” epicenter of Egina, the map below once again provides a sense of distances to surrounding features.
For example, Novo’s M47/560 mining lease is ~5km due north of the remaining uneroded Fortescue basal layer. Some of Pacton’s mining leases appear to lie even further from the uneroded Fortescue structures (~10km away) than the Farno-McMahon mining lease and despite this appear to have numerous gold occurrences.
If the source of the gold in the Egina lag gravels is the previously eroded Fortescue basal layer, one would conclude that that Novo’s Farno McMahon mining lease location is not unique (not the epicenter of Egina gold system) but rather part of a broader dispersed system. This would support the notion that all companies with a presence in this area (Novo, DeGrey, Kairos and Pacton) or other areas near previously eroded basal Fortescue structures are equally well positioned to benefit from the BIG reveal.
Before capping off this post, allow me to redirect your attention to yet a different matter that will once again lead us back to Egina. As outlined above, Kairos recently released a press release update on its Croydon project (link).
We already established that the gold nuggets that were uncovered and announced in this press release are between 20km and 30km in the direction of SSW from Novo’s Farno-McMahon granted mining lease M47/560. Interestingly, the Kairos tenement is “so far” south of Egina that the press release doesn’t even mention the word “Egina”, yet despite this Kairos was able to find these:
This really begs the question, is there a Pilbara gold epicenter and if so what makes Egina’s Farno tenement special in this regard?
One thing is for certain, mother nature, at the time the gold was deposited throughout the Karratha region, knew of no boundaries. She wasn’t targeting CW/PR or Egina or Farno-McMahon’s mining lease. The bottom line is that the gold is there and the evidence is overwhelming. It is likely not continuous but rather patchy throughout vast regions. In no uncertain terms, the evidence supports that the notion that the gold is certainly there.
Ultimately the economic viability of all this real estate will lean more on a technology and mining process solution. The fate of the Egina prospect is hanging on the mining licenses, TOMRA process refinements being funded by NVO, and possibly access to local milling options.
But as soon as the processes are developed and the economics are confirmed, it will not be the "fortified" and pricey NVO that goes into play. It will be the dirt cheap other three (DEG, KAI, and PAC). And that's where a real smart speculative investor will be positioned.
Getting back to the Croydon project, below is a map of what was included in the press release. Once again we see the basal layers of the Fortescue group (Mt Roe) present in the north-west portion of these two tenements (E47/3522 and E47/3523) where the majority of the gold nuggets were found (note the 22km strike length over which gold was found).
If we remove the extraneous portions of the above tenement map and perform the same superimposing and scaling to place the Croydon map above onto the modified Fortescue group and tenement map with the Croydon tenements side-by-side, we get the map below. This shows, in remarkable detail that the Kairos exploration program was focused on existing Mt Roe / Fortescue structures and did not venture off too far to look for similar lag gravels that Novo was working on at Farno-McMahon.
I would not be surprised in the least if Kairos were to reveal similar eroded deposits of gold laced gravels as Egina in the general vicinity shown by the blue outline below.
PS. All images in this post are available at the following links: Link 1 Link 2 Link 3 Link 4 Link 5 Link 6 Link 7 Link 8 Link 9 Link 10 Link 11 Link 12
Thank you @Stranius for putting this piece together. Really drives home the point that this just may be what many here are convinced it is. It also may explain to a degree the high volume today on the otc. Let's see if we can get some weekly higher closes for the sisters and get this train rolling again.
DYODD
Hang in there longs
Cheers gang
DEG Price at posting:
12.0¢ Sentiment: Buy Disclosure: Held
(20min delay)
