After a study of this gold industry for the last 10 years (more intensely than earlier 20) one key factor that has become more obvious is location. Mother Earth laid down gold along sequences called trends. These are the best guide to indicate to you that an exploration program has potential.
Along these trends the faults zig zag, they are not straight and it is these zags that form physical traps. They are called dilational jogs and the TI / Lake Cowan sequence is on one of these and part of the BLF - if you are not across this one by now look it up, do some DD and look at the projects from Bardoc to the north down to Noresman in the south.
This alone could make somebody as knowledgeable as Dean get excited, and you are all right he is not able to gush - it looks good is the best he can say at this stage. He knows the structure and geo-chem signals from work to the north in the past. The iron is there and this is the chemical trap required to hold the gold in that physical trap.
Now we are getting results and they indicate the system is large - around 7-8km of strike in two anomalies. The salt environment absorbs gold right off the surface of the hard rock beneath the mud in the lake and disperses it a little creating the results Dean is currently looking for in the aircore. The results indicate the system is gold charged.
Think of this like a tree, the trunk is the BLF and branches formed by cracks (sub-faults) in the rock splay off this main structure. These break up into smaller cracks and so on. The quarts veins on the island are more than likely part of the anomaly adjacent to the island - they are the outer branches and contain gold levels up to 2 ounces per tonne.
Early indications are that both anomalies are gold charged. The grades in a gold system usually increase at depth, the surface indicators long mined by the old timers. Two gold systems on this fault, now proven by aircore to be gold charged... tested at surface with the above grades - 7km of strike...
Once the size of the anomaly is defined by the rest of the aircore results we will be able to better estimate the scale of this significant discovery - WHICH IS IN THE VERY EARLY STAGES. Diamond drilling will start to tell us what we have here.
Dean is excited for good reason. His discoveries to the north in salt lakes were not giving up strong indications like this one is at this stage.
Therefore it is highly possible that this is either fully exposed just under the lake and or higher grade than to the north where he found 500k oz and partnered in finding 1M oz deposits on this fault in a near identical terrain. I cannot say identical - the earth does not work like that however you could not get more similar without being right on top of the St Ives system to the north where they found nearly 500T of gold. That is 15M ounces or 465,000,000 grams - 465T of gold worth $24B at today's price.
When the investment community realizes what this is and gains some confidence the interest will be great. Proof is needed for yours truely as yet as well however. Is the system 1M deep? or 10M or does the depth run to 3km? Does it pinch off 10M down or widen? Is the grade continuous?
A few things we can be sure of. The system is NOT buried deep or the salt could not extract those readings. Therefore the strip ratio will be very low. The system is large - as an anomaly only it is as long as the super pit but will it yield the massive tonnage at the grade? The metal signatures have them excited. I have posted on these already. All the indications are STRONG. Tap tap tap, like Pinto waiting impatiently and certainly loaded back into Madam Lash.
One comment on the rises and being out. The rise (I believe is due from the long term chart) could happen over 5 months or longer. 15c is not out of the question in the right conditions based on previous runs that have seen the SP triple.
The fundamentals however show another story. FML has been discounted for CRE, which halted a larger rise in early 2011 IMO. Currently there is no value for TI, Nepean or CRE whatsoever, only a negative valuation on FML operational value due to CRE!
FML operations alone are on fire sale because of the stage of development (now largely complete) of their assets and balance sheet constraint, reduced cash in the bank. Turn FML around and the SP can be 8-10c quickly. Just show rising production with higher grade and increasing cash. Turn CRE around - from perceived dog to neutral - and this increases potential SP to other estimates I have seen at 15c and above.
Add a gold rally and change in sentiment to gold stocks in general and you can start to look north. I await to see if or when all or any of this can come to pass.
Any speculation on the other cards, in the hand of FML, can propel this one much higher so I am calling this a long term buy no matter what the SP path has been during the foundation phase of this company over recent years. My respect to the Board and staff for their work - we all deserve a big win in 2012 that is for sure.
Cheers, CW DYOR&DD
FML Price at posting:
5.3¢ Sentiment: LT Buy Disclosure: Held
(20min delay)