St George vs the Dragon, page-8

As requested by Interested onlooker, my thoughts regarding St George’s other project areas:

GOLD:

Bristol – the company is planning 5 holes along a NNW trending structure that is coincident with the interpreted boundary between the local mafics and granite. This is a good geological setting, and the structure has yielded highly anomalous gold to >2.5g/t Au in the overlying regolith, indicating a potential vein system source at depth. I rate this particular prospect quite highly, however, investors need to watch out in terms of results in these sorts of systems. A lot depends on the consistency/payability of the structure, the plunge of the lodes and, of course, the role of nugget effect if there is coarse gold in the system. Beyond that, the prospect has the potential for a nice 1-2Moz system similar to most camps in the Eastern Goldfields. Gold Bunny scores this target: 7.8/10

DDD010 Target – this is a nice conceptual target of gold hosted by a highly sulphidated unit that is clearly being picked up by EM. The EM plate is not small, it appears to have a strike of about 700m, and the single previous hole confirmed gold with a 2m @ 1.42g/t Au structure. It’s an interesting target, and St George are giving themselves a good opportunity to test the conductor properly with four holes. In terms of grade, anything could happen on this type of target. Gold Bunny scores this target: 8/10

Ascalon – As promoted by SGQ, the deflection in the main rift axis of the Minigwal belt, combined with local structural complexity and broad local Au and Cu anomalism elevates this particular target to high priority in my book. The local geology, structure, known mineral occurrences and overall concept all align to present a rare opportunity to test a top tier target for a large bulk-mineable gold target. However, to achieve such a result I would prefer to see at least one of the holes being at least 600m rather than a whole heap of first pass holes at 240m – this shows lack of real courage when there is potentially a company maker to be delivered. Gold Bunny scores this target: 9.2/10, Gold Bunny scores the proposed drill hole depths: 6/10 – one or two substantially deeper holes would impress me more. On one hand the company comes across as an aggressive explorer, on the other hand, I see a lot of conservatism in the drill plans.

Cambridge North – There may be some potential here, but it doesn’t look particularly sexy for me. Just need to get out and drill the EM plates and hope there is gold there. There isn’t enough geological information given to really understand the context of the targets. Gold Bunny scores this target: 4.5/10

Athena, Atlas, Oxford – I could be wrong, but these all appear to be local prospects associated with the Ascalon/Minigwal rift axis. There really isn’t enough information for me to comment or speculate. There was a period a couple of months ago that the company decided to ‘announce’ new prospects/targets. They should really just concentrate on promoting the best ones, and then making an effort to test them properly. Not trying to be critical, as some of these (Oxford) are part of the confidence in the current Ascalon story.

GOLD / NICKEL:

Desert Dragon Central, Desert Dragon and Cambridge – I still like this area, I don’t know why, just gut feeling. Not sure what the plans are to get back there and keep plodding around, but I think both the Au and Ni potential are good, and there is good volume of greenstone locally to feed the systems. Gold Bunny feels that perhaps some deep IP could help clarify mineralisation if useful given the potentially conductive overburden. I think persistence may pay off here. Gold Bunny scores this target: 8/10

Windsor – Worth a couple more holes to test the very tantalising conductor, nice local story but not a company maker. Gold Bunny scores this target: 5.5/10

Windsor North – I like the shear size of the combined mag and Ni-Cu geochemical target, definitely worthy of more drilling. Gold Bunny scores this target: 7.5/10


NICKEL:

Mt Alexander – World class project in the making. Excellent potential for growth both in the short term and long term. Gold Bunny scores this target: 9.5/10

Hawaii – Gold Bunny is not interested, sorry 2/10



Overall, I think the real potential for St George to secure it’s position at the base of this ever-imminent decade-scale resources boom is to:

• Persist with haste at Mount Alexander – this project will continue to get better and the new targets currently being drilled, to me, may be the catalyst for the company to project up past the >$250M market cap range very quickly – I hope they are both mentally prepared for what happens if that takes effect, and that they can handle the change in the corporate needs and expectations that go with it
• Get out to Ascalon asap, concurrent with this drilling, and don’t be afraid to drill a couple of deeper holes. If they are looking for something like a Gruyere, they need broad low-moderate grade intersections to excite the market, and they won’t achieve that with all 240m holes. In the very least I hope that they leave for the provision of extending some of the holes significantly, but it’s always better to plan the hole so the intercept is x metres below the ground or down dip/plungs
• Quickly get in and snap that Windsor EM target. It may be a dud, but it may also be a nice small high grade pod of something. Or it could be steeply plunging and get bigger deeper down. Not priority, but lets not keep the story hanging – either test it or move on quickly
• Bristol – get straight to it following from the Ascalon drilling as planned, as well as DDD010
• I think more energy should be spent (or perhaps even just communicated) with respect to Desert Dragon, Cambridge, Windsor North –these are all good targets, but they need refinement – maybe more detailed geophysics

If the company does succeed in the near term at Mount Alexander, I don’t think they should lose the momentum and move the rig to Ascalon. They should get a second rig to Ascalon as soon as we have confirmation of the significance of Mt Alexander.

I feel the company is sitting on two or three ‘company makers’ and it’s only a matter of time before one comes off so long as they continue to test the targets aggressively.

In the very short term, if John is presenting in Sydney on Wednesday next week, I would envisage that he would probably want to get the next lot of news out on Monday or Tuesday. Perhaps a TH this afternoon or tomorrow morning leading up to an early announcement next week, right in time for the Resources Round Up.

Cheers