******* have you read this?

"...The run was sparked by a Marathon statement issued to the ASX headlined: "World Class Uranium REE Polymetallic Ore System. Mt Gee Deposit JORC Compliant Resource Uranium. 33,200 tonnes U3O8."

To the non-resource reader, that headline probably reads like a Kremlin code. The key word was uranium. Right now investors will flock to buy shares in any company that has found anything that glows in the dark. REE means rare earth elements, in this case a couple of rarely seen items on the periodic table of elements called lanthanum and cerium.

Mt Gee and the neighbouring MtPainter are hills in the Flinders Ranges in South Australia that have been known for some half a century to possess deposits of low-grade radioactive elements. JORC is the Joint Ore Reserve Committee, which lays down a strict standard for the definition of mineral resources and reserves. Saying a resource is JORC compliant gives the estimate a seal of authenticity.

The excitement about Marathon may have been further fuelled by an interview in Adelaide's The Advertiser of August 3 in which Marathon's chief executive, John Santich, was quoted as saying: "It's a magnificent ore body and something South Australia should be proud of."

Marathon's ASX statement of August 2 made no reference to any recent drilling. The ASX statement said Marathon had been studying the archival database of drill results built up decades ago on Mt Gee by Exoil and CRA.

It also said it had just got around to digitising the results from a deep drill hole sunk by Goldstream - another former owner - at Mt Gee back in 2002. From these bits of data, Marathon built a computer model in conjunction with the University of Mining and Metallurgy in Poland. From that model, they worked out they had a uranium resource.

As far as Pierpont is concerned, this is pioneering technology. Your correspondent has never before heard of a JORC resource being established purely by computer.

Marathon has obviously scored a great breakthrough, which will be welcomed by future generations of geology students. Instead of having to stumble about hot scrub while chipping away at bits of rock - or toiling in the heat of a rotary air blast drill on a sweaty hillside - geologists can sit in an air-conditioned office and fiddle with a computer model.

Theoretically, Pierpont concedes it could be possible to establish a resource purely by computer from old drill results providing they were well enough defined and close enough together. But your correspondent has never previously seen it done.

Meanwhile, we have a situation where three previous owners - Exoil, CRA and Goldstream - did all the exploration but never bothered making a resource estimate. Instead, the resource estimate has been made by a company that hasn't done any of the relevant exploration.

Indeed, Pierpont is not sure Marathon has done any exploration at all because Doug Sprigg, who owns Arkaroola Station (which covers Mt Gee), says the Marathon chaps haven't been conducting any exploration up there recently.

Dr John confirmed this. He said that as a result of the Exoil and CRA drilling, there were 53 kilometres of drill core, some of which had been beautifully documented. If you like, Marathon had the drilling done for them. The resource estimate was based on drill rigs - it just wasn't their drill rigs.

For the benefit of readers who are innocent of geological mystique, Pierpont should explain there is a world of difference between a resource and a reserve. A resource is a mass of mineralised rock. Depending on how closely it has been assayed, it may be described as measured, indicated or merely inferred. It becomes a reserve only if it is rich enough to be mined economically.

There are plenty of resources around Australia that will never become reserves because they're too low grade, too far from markets, too difficult to treat metallurgically or any one of a host of other reasons.

Mt Gee looks like it will remain a resource for at least the rest of Pierpont's lifetime. The ASX statement said the 33,200 tonnes was an inferred resource (which is the lowest level of confidence a geologist can express) containing 24,800 tonnes averaging 730 parts per million (0.073 per cent) uranium oxide and 8400 tonnes averaging 300 to 500 parts per million (0.03 to 0.05 per cent). These are low grades, which would need to be improved by at least one decimal place before Pierpont could get very excited.

Dr John conceded that 730 ppm wasn't that exciting by itself, but said the study now gave Marathon the incentive to go out hunting for higher-grade deposits within the system. "When you have a big deposit, it is something to be optimistic about," he said. "Turning it into a mine is another matter."

Going back a little further in history, it was only on July 8 that 2million vendor and 1.5million seed-capitalist shares in Marathon came out of escrow. That looked like great good luck for the holders, but Dr John said shareholders who were close to the company had not been selling in the recent flurry.

As the chaps at the ASX haven't queried Marathon on its statement, Pierpont presumes they have accepted resources by computer modelling as a precedent, which other companies can now follow, and the ASX is as relaxed as if it were flying on Connie with Pierpont."

Full article at:
http://afr.com/articles/2005/08/11/1123353445720.html