So much for the Pilbara conglomerate gold rush.

The main protagonist, Canada’s Novo Resources, has lost $1 billion of its market value since peaking at $C8.40 a share in October last year.

Novo is now trading back at $C2.10 – a thumping loss of 75 per cent on its peak.

The value loss is a reminder of just how over-hyped the Pilbara conglomerates yarn became last year.

Last year’s video crosses to metal detectors finding watermelon seed sized nuggets, and suggestions the conglomerates were some kind of analogue to South Africa’s fabled Witwatersrand gold treasure, whipped up a frenzy in Novo and ASX-listed gold explorers with a Pilbara footprint.

But the story has gone cold, with Novo not able to rekindle interest in the story from its bulk-testing programs which, to date at least, have only produced indifferent results.

The story is not dead just yet.

Novo retains a big market capitalisation ($C346m) and it remains well-funded to continue with its sampling and exploration efforts.

But as the $1 billion collapse in its market value demonstrates, the day Novo turns the hype of the Pilbara conglomerates into viable mining proposition is a long way off, it at all.

Despite the loss of faith in the conglomerates story, interest in the region’s traditional shear-hosted gold potential is undergoing something of a renaissance.

The renaissance is due in part to the spill over effect of the Novo-led conglomerates bubble.

But the main reason is that a number of conventional Pilbara gold projects are fast approaching the critical mass required to become new stand-alone gold developments.

Calidus Resources

Garimpeiro’s interest today is in Calidus Resources (ASX:CAI) — trading around 3.2c — which looks to be on its way to becoming a gold producer from its Warrawoona gold project near Marble Bar in the East Pilbara.

Warrawoona is a historic gold field with first production recorded in 1897 but it has only been in recent times that its patchwork ownership has been consolidated under the Calidus banner.

Calidus reported a resource of 712,000 oz at 2.11 grams of gold a tone in December last year, and is due to announce a resource update early in the new year, with the market expecting something north of 1 million oz.

Last week the company reported some impressive high-grade results from drilling at the St George Shear and Klondyke East prospects.

Infill drilling at St George Shear, 150m north of the Klondyke Main resource, included best results of 6m at 7.61 g/t from 16m and 8m at 5.64g/t from 44m .

Best results from in-fill drilling at Klondyke East included 2m at 20.84g/t from 88m and 6m at 3.82g/t from 93m.

The company said the results clearly showed that the “project has considerable upside.’’

The resource update early next year will lead in to a preliminary feasibility study, likely to be completed by the middle of the year.’

Calidus has not said what sort of production it will assess in the PFS but something approaching 100,000 oz annually would not surprise.

Somewhat ironically, Calidus’ ability to set a cracking pace is partly due to the funding option secured in August by the sale of conglomerate gold rights over some of its Pilbara tenements to Canada’s Pacton Gold for $C3.5m in shares.

Calidus said the conglomerate rights were considered non-core, intimating that the Pacton shares could be tipped out over time as a source of funding for work at Warrawoona.

Further funding for Warrawoona came in October when cashed-up NSW gold producer and zirconium developer Alkane Resources became an 8.8% (undiluted) shareholder by taking up a $3.68 million Calidus share placement.