Oof - brutal market reaction to the three Marwari diamond drill holes that came back with lots of interesting alteration but some very skinny a low grade gold intercepts. Interesting to hear the explanation provided and the diamond drill core at least giving them some visual clues about the geology maybe not being in the orietation that they expected and not as predictable as anticipated. Their explanation of general NE-SW trend with more sinusoidal shaped high grade pods which plunge to the south sounds like a plausible possibility, but there is no denying the alteration envelope on at least one cross section is a steep dip to the east but the more localized distribution of high grade gold pods is more erratic and unpredictable than first postulated.
I think what we are seeing here is also partly the result of an illogical and unfortunate sequence of drill rigs arriving and exploration drilling not conducted in a logical manner. Take a look at this working cross section, and consider that the diamond rig turned up and they got the diamond core holes MWD001 and MWD003 completed (and extended beyond design depth) and cut and assayed before the lower risk and more useful RC hole MWRC001 which still has assays pending. Some commented on the good news that the diamond cores were being extended further as good news but others also asked about why there were no core photos to justify the extension of the diamond holes, obviously the diamond holes were in strong alteration and really interesting looking alteration zones and its difficult to justify stopping an exploration diamond core hole when you are seein such strong alteration but remember that gold is only proven once the core is cut and assayed at the lab so explorers can get sucked into extending holes that are in alteration and might be proximal to mineralisation but may never get there.
Now MWRC001 may look like a twin of the original discovery hole HWAC1472 but importantly its an RC hole drilled with a rig with more depth penetration than the original HWAC aircore holes so it won't give a lot of geological info but it would have given them some really useful grade information about several things. Firstly - whether the HWAC1472 intercept is a localized oxide zone of enrichment, and secondly how wide and what orientation the gold zone might be in fresh rock. All this should have been done
before drilling the deep diamond holes, which seemed to "shot for the moon" and failed to achieve and got a big market reaction today. A very expensive lesson for investors in drill sequencing and exploration drilling, but all is not lost as the company now have the drill core and can see the alteration zone and possibly even the specific mineralized veins/pods in diamond drill core, and so make some educated guesses about possible orientations of the hi grade Au pods. Hence the promise to alter the orientation of further drilling in the future. I will be interested to see which way they point the RC drill rig for that short post-Christmas RC program - announcement seems to indicate drilling towards 310 Azi so will be drilling towards the WNW.
This is a bit of baby and bathwater reaction today, and a pretty typical "exploration setback" that happens when the orientation of the high grade zones is unknown or there are doubts.
Drill in 2D on a few sections and plan view first, with RC which is cheap and fast and gives you quick answers about grade and thickness in 2D and then drill deeper diamond core holes if its deep and/or you need more geological info and then think about the 3rd dimension along strike again, with cheap and fast RC drilling first and then deeper diamond later on (if you need to). Its a tried and trusted rule of thumb for drilling concealed/blind gold deposits and the price for going too early on deep diamond drilling is demonstrated today. Go too early and too deep and failure or unexpected geological/grade variability and orientation can really punish you.
There is one thing that also stands out as a bit of an "exploration clanger" in that cross section above that I also missed earlier, have a look at the end of the early stage aircore drilling hole HWAC1472 and then imagine that hole hitting refusal and/or water, and them packing up the aircore rig and moving on the the next hole to start HWAC1473, now look what happened to the first two samples in HWAC1473 as far as assays go, and tell me that the cyclone/splitter was cleaned between drill holes....
Obviously this is a localized exploration setback and not the end of exploration in the area, I'm being a bit tough on these guys I know but its good to have some failures and setbacks to think about the geology and to learn from mistakes, and maybe to shake out a shares from few impatient or short-term traders. Like many here I got partially stopped out of my very much in profit position by the big drop today but still have more STK and some spare cash on hand and might even look to re-enter at some point. Seems like it will trade like a volatile exploration discover/despair story for the next few announcements depending on drill results. The other thing I have to consider is that this is not an Marwari story only, there are other areas with potential as well and surprises on the upside are almost as likely as on the downside when its early exploration drilling like this.
