Think the Pilbara gold story is over? Here’s 100m reasons you’re wrong
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The loud rumble of last year’s Pilbara gold nugget rush may have died down in 2018, but the story has a long way to go says De Grey Mining’s technical director Andrew Beckwith.
De Grey and more than 20 other Pilbara gold explorers are raising about $100 million just for grassroots exploration following a series of nuggety gold finds in the region.
“I think what we’ve seen is the euphoria and the excitement of all these gold nugget finds probably overheated for what was really happening — but it has allowed companies to raise money,” Mr Beckwith told Stockhead.
“There will be a roller coaster ride as those leaps in new information become available — and they will be leaps,” Mr Beckwith said.
“I think the biggest leap that I can see coming sooner than later is the first company to put out a JORC resource.”
JORC refers to the mining industry’s official code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
“I think if any company can define an economic deposit, it just opens up the whole of the Pilbara again,” Mr Beckwith said.
Strong 12-month gains
So far this year, Pilbara gold stocks have undoubtedly lost steam.
Only six of 20 Pilbara gold stocks monitored by Stockhead (see table below) are ahead since January.
Hardey has lost 62 per cent this year. Southern Hemisphere is down 45 per cent. DGO and Artemis have each declined 30 per cent.
But viewed over a 12-month period most of the stocks are still way ahead.
About 13 of the 20 are trading at a premium compared to this time last year.
Taruga Gold is up an impressive 366 per cent. De Grey has put on 146 per cent while Viking Mines, Tando Resources, Coziron Resources and DGO Gold are all ahead at least 120 per cent.
Bellwether stock Artemis Resources — which kicked off the gold nugget rush with Canadian partner Novo Resources mid last year — is up 80 per cent.
|ASX Code||Name||3-month price change (Jan-Mar)||12-month price change||Price Mar 21 (12pm AEDT)||Market Cap|
|TNO||TANDO RESOURCES (*listed Nov 2017)||0.918367346939||1.35||0.47||14335259|
|SPX||SPECTRUM RARE EARTHS||0.181818181818||0.444444444444||0.013||7754701.5|
|DEG||DE GREY MINING||0.0322580645161||1.46153846154||0.16||46339364|
|CHN||CHALICE GOLD MINES||-0.0810810810811||-0.0285714285714||0.17||45711800|
|WWI||WEST WITS MINING||-0.125||-0.222222222222||0.021||15792649|
|SUH||SOUTHERN HEMISPHERE MINING||-0.453846153846||0.577777777778||0.071||6044665.5|
What’s the Pilbara gold potential?
Conglomerate gold grades have the potential to be as high as 60 grams per tonne (g/t), according to Mr Beckwith.
Anything over 5 g/t is considered high grade.
“These things have the potential to change companies… You only need a small, high-grade deposit,” Mr Beckwith said.
“It doesn’t need to be 10 million ounces like everybody is probably hoping for. At a few hundred thousand ounces at a 10-gram ore-body that has a significant impact.
“We’re talking hundreds of millions of dollars to a junior that might be trying to build a plant like us.”
Earlier this week, De Grey told investors it had found more gold nuggets at its Pilbara project.
De Grey has three advanced conglomerate gold targets it is exploring within its landholding, where it has already defined a resource of 1.2 million ounces.
Novo, meanwhile, is somewhat relieved the hype about Pilbara gold has died down.
“I’m actually a bit glad the limelight has gone off,” general manager exploration and geology Kas De Luca told attendees at Informa’s Pilbara Conglomerate Gold Conference in Perth.
“It’s not quite as hot as it was in October last year. It gives us time now to try and get our grounding a bit more into the science rather than just exploration by metal detector.
“In the last six months it has been a huge learning curve. Thankfully we’re well cashed up, so we can actually do some of this work, which is really expensive for a junior.”