Over a week ago on the Friday just before the trading halt, I...

Over a week ago on the Friday just before the trading halt, I had a good talk with Managing Director Rob Bills. He said that the interpretation of the combined Helitem and IP (inversed polarisation) geophysics data had been tweaked to such a degree they felt confident it is now pin point accurate. Previous drilling had been close to the strongest Helitem targets but not completely accurate. The Helitem can identify potential mineralised targets including high grade copper but not specifically gold. It can however pick up the pyrite (iron pyrite or fools gold, the iron sulphide FeS2) which contains the gold. Towards the end of last year I was considering getting rid of the shares but decided to hold on in hope. Then the company announced that Helitem was going to be used. Like some others on this forum I started to think Emmerson may have turned the corner in potentially finding easier targets at depth, something that happened decades ago when magnetics were used to discover many high grade deposits in the Tennant Creek area. The classical ironstone of Tennant Creek, magnetite or haematite, contained most of these Au, Cu and Bi rich deposits, which were trapped and concentrated as super heated brine made its way upwards through the previously formed ironstone. The magnetics could only identify the ironstone magnetite, not whether it had mineralisation. In fact only one in 20 or 30 ironstone formations at Tennant Creek are mineralised. Later on gravity surveys were used to discover the non-magnetic ironstone haematite. Now what’s promising is that Helitem has been proven to discover mineralised targets outside the classic ironstone type. The difficult thing at Tennant creek is that some of the targets are very deep, usually high grade and small so with the use of previous geophysics you could go down 400 metres and miss a mineralised section by just 20m and not know it. It gets very costly to drill that deep so in the last couple of years Emmerson along with Ivanhoe were putting down some deep drills but not too many if unsuccessful early on. Emmerson holds exploration rights to most of the Tennant creek area so they had many areas still to cover with the money provided by Ivanhoe.

Just before the trading halt Rob said he was disappointed with the current share price given the recent positive high grade copper results and the potential of Helitem, however suggested the suppressed price may have been largely attributed to what was happening on world markets, particularly the Greek crisis. He said there was lots of potential in the Gecko area because high grade copper and bismuth had been found but not significant amounts of gold which would be expected deeper down. That’s all changed now though.

Warrego, the largest system in the Tennant creek area to date and not far from Gecko to the west, had the copper discovered first in the upper levels of the system and later on the gold at greater depths. The Warrego mine went on to produce 1.3 million ounces of gold, 91500 tonnes of copper and 12 tonnes of bismuth from 4.75 million tonnes of ore grading 8 g/t Au, 2% Cu and 0.3% Bi. Rob said the Gecko system may extend further to the east into Helitem block No.5 (see Figure 1 of Sept 2011 Quarterly Report) which is the Bishop Creek area. This block is largely untouched as far as exploration goes and if it is an extension to Gecko could potentially make it a bigger system than Warrego.
Over the next week or two in the lead up to the next lot of drill results I would definitely expect the share price to test the 30 cent mark but where it goes to from there in the short term is anyone’s guess. I know one thing for sure the long term is looking pretty good.