pierpont column on mt gee 24.8.2001

I have stumbled upon an old Pierpont column on Mt Gee which is 4 years old, which Im not sure too many people are aware of.

Notice any change in attitude of Mt Gee in the below column compared to his latest column on Mt Gee. He seemed to be more enthusuastic of Mt Gee 4 years ago.

He stated in 2001 column that Exoil rode into the sunset because of Australia's uranium policy, however in his column last month he was bagging Mt Gee saying it will always be a resource not a reserve.

Interested to hear peoples comments on the Mt Gee columns.

All I can say is there will be plenty of egg on peoples faces once drilling results come through fro Mt Gee and other Paralian prospects.

The more research I do on the Paralina announcements, the more I believe it has the potential to be Australia's largest undeveloped Uranium deposit. I have commented on previous posts on this thread why I believe this is so.

The resource of 33200 tonnes will be much greater at Mt Gee once drilling is condcted to deeper intervals.

Once Hoginkson (grades of up to 2.4%), Armchair, Streitberg, Painter and Radium Ridge are drilled also, Paralina will be home to a uranium resource that will be phenomenial.

Cheers

:: 24.08.01

Goldstream's 003 licensed to thrill

Last Monday, Goldstream announced a ``major platinum discovery'' with world-class potential on its Mibango project in Tanzania. They said a soil geochemical survey over 16 square kilometres had located highly anomalous platinum/palladium values in excess of 0.2 grams per tonne.

Bottle the geologist and Pierpont were onto their third Delamaine after a Croesus Club lunch when Bottle raised the issue of the day. He declared: ``I may have finally proved that the average investor has a higher IQ than a fish.''

This was a bad moment for Pierpont, because your correspondent could not decide whether his hearing had just failed or whether Bottle's brain - which for decades has been floating on a sea of alcohol - had finally sunk without trace.

``A fish has no memory,'' Bottle explained. ``By the time it has swum along the wall of a two-foot tank, it has forgotten what the other end looks like, so it swims back again. Therefore, fishes never get bored.''

Pierpont, seeing there was no point in staying sober for this conversation, ordered the steward to bring a whole bottle of Delamaine. A good move, because on draining a triple measure, your correspondent suddenly saw the thrust of Bottle's argument.

``Of course,'' Pierpont exclaimed. ``Investors have no memory either. Investors in One.Tel had forgotten all about Imagineering, for instance.''

``Correct,'' replied Bottle. ``But there are signs that investors are evolving into a higher species. It's just possible they have remembered about Goldstream.''

Last Monday, Goldstream announced a ``major platinum discovery'' with world-class potential on its Mibango project in Tanzania. They said a soil geochemical survey over 16 square kilometres had located highly anomalous platinum/palladium values in excess of 0.2 grams per tonne.

A soil sample of one part per 5million of combined platinum and palladium doesn't arouse Pierpont, but it had plainly excited the Goldstream chaps. The market was excited briefly, too, with Goldstream shares jumping from 44¢ the previous Friday to 50¢ on Monday. But by mid-week they had slid back to 45¢.

``This excites me anyway,'' said Bottle. ``Because it could indicate that investors can remember as far back as two years. Do you remember the Mt Gee discovery?''

Two years ago Goldstream shares started running. They jumped from 43¢ to 58¢ on Friday, August 5, 1999, so the ASX asked what was happening. A few days later, Goldstream said it had recently completed a drilling program at Mt Gee up on the right-hand edge of South Australia.

On August 11, it announced its assay results. Holes 002 and 003 had struck uranium oxide. The hottest intersection was in 003, which hit 1,578 parts per million of U3O8 between 144 and 198 metres.

Goldstream shares immediately shot to 82¢ and the company announced an option issue. Shareholders would receive one option for every four shares. The options would cost 10¢ and would convert into ordinary shares if the holders paid 20¢ each to Goldstream by October 1, 2001.

Pierpont would have thought the punters should have stampeded this issue, but there were a few laggards because when it closed there was still a shortfall of 3.7 million options. Nevertheless, the issue raised some $1.8 million a handy sum for Goldstream, which had spent $2.4million in the previous year and had just $2.7 million left in the kitty at the end of June 1999.

Punters who took these options have done fairly well. Their final exercise date is in just over a month and at Goldstream's current price around 45¢, they're well in the money.

Goldstream said the cash raised from the options would be spent on its exploration projects in Vanuatu, Tanzania ``and in particular its Mt Gee and Warrina projects in South Australia''.

Well, whatever was spent on the rest, not too much was spent on Mt Gee. Judging by Goldstream's quarterly reports, the company's exploration of Mt Gee over the next six months was conducted in historical records.

They looked up drilling results from Exoil NL on the same prospect back in 1970, which had found half a million tonnes containing low-grade uranium. ``Goldstream's current program has identified what appears to be a down-faulted more robust extension to this resource,'' the company said.

Oddly, Goldstream then lost interest in Mt Gee. For the next nine months, Goldstream did no fieldwork on Mt Gee, which barely rated a line in its quarterly reports. Early this year it did some theoretical modelling of the Mt Gee resource and in the last June quarter it did a gravity survey, but this hardly amounts to hot pursuit of an exciting prospect.

If it helps, Pierpont can offer Goldstream investors a little more insight into drill hole 003. It very nearly intersected two previous drill holes at Mt Gee, drilled years earlier by other companies that had abandoned the prospect.

Back in the early 1970s, Exoil drilled Mt Gee like a Cheshire cheese. It drilled 620 holes totalling 172,390 feet in the general area and, by Pierpont's count, 45 of them were within 300 metres of Goldstream's discovery intersection.

After its extensive drilling program, Exoil decided the Mt Gee deposit was the most promising in the area, with potential for 30 million tonnes at 1.8lb per tonne.

Having done that calculation, Exoil rode off into the sunset, quite possibly because it had become politically impossible to develop new uranium mines in Australia.

One of Exoil's better holes was MG101, which was sunk vertically and intersected its better grades of U3O8 directly beneath the spot where Goldstream's 003 hit its hot intersection. Goldstream's 003 started some 70 metres away from MG101 but was sunk at an inclination and direction that went straight towards it.

Indeed, 003 must have nearly hit the vertical hole left by MG101.

And that's not all. In 1989, CRA arrived at Mt Gee and did a drilling program there. CRA's most exciting hole was GE33, which struck uranium oxide at grades averaging 1,370 parts per million between 220 and 281 metres.

Bottle, using a serviette for paper and a swizzle stick as a straight edge, did a few rapid calculations.

``Not only did Goldstream's 003 go within a whisker of Exoil's MG101, but it must have passed within about 10 metres of CRA's GE33,'' he said.

``And the hot intersections of CRA and Goldstream are in exactly the same place.''

So, Goldstream's uranium deposit at Mt Gee had been comprehensively discovered some 10 years before Goldstream arrived there.

Indeed, if Goldstream had deliberately decided to punch a hole through an area of known mineralisation, it could hardly have sited 003 better. There must be one patch of the uranium deposit that has nearly been drilled hollow.

Pierpont doubts whether many of Goldstream's current punters would have remembered all that, however. Even the most gifted mullet can't remember three decades of drilling results.





Pierpont - 12.08.05

How to explore without digging



Marathon shares have also been exceedingly lively of late. Their low for the year was 15c in May, but they closed July at 40c, then went for a wild run. On August 2, they soared to 88c before closing at 79.5c. Over the next three days, they swung between 65c and 91.5c, and as Pierpont quills these words they are 73c.

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 Mt Painter 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 2 million vendor and 1.5 million 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.