And for some reason it has refused to attach the pdf file that it said was uploaded.
So I will cut and paste it instead. Blythefan's original post in black, my comments in red:
Anyone investing in Thundelarra has to convince themselves the following are false:
1) The tenure at Red Bore is significantly greater than approximately 2,000m x 1,000m
Fatuous comment. The mining lease is 2km x 1km. Fact. No-one can “convince themselves” otherwise.
2) THX has not drilled sporadically for nearly 10 years to no appreciable success
Referring to THX exploration in general? Or specifically RB? I don’t know of a universally accepted definition of “success” so any rebuttal to this statement is going to be open to further debate. Brief summary below of material THX share price rises since listing, linked to news events, from preceding low price to the high reached:
16Jan02 $0.40 to $1.09 23Apr02 PGE drilling at Eileen Bore
20Jun03 $0.16 to $0.57 03Dec03 Copernicus Cu/Ni and East Kimberley Ni JV
14Jun06 $0.15 to $0.50 25Oct06 Copernicus Cu/Ni; Edison PGE; Spinifex, Ngalia U
to $0.75 16May07 Copernicus build
20Nov08 $0.06 to $0.16 22Jul09 First Thunderball U3O8 results
to $0.78 14Oct09 Thunderball 20.3% U3O8; BHP bids for UMC
01Feb10 $0.36 to $1.03 06Aug10 Red Bore massive sulphides (4m at 17.8% Cu)
26Jun13 $0.02 to $0.36 15Jul14 Red Bore massive sulphides #2 (7m at 28% Cu)
Of course no-one can pick the exact low and exact high, but this shows that there have been plenty of trading opportunities to make an excellent return from THX.
“No appreciable success”? Apart from the trading opportunities, some examples of what current exec members have achieved over the years. THX spun out UKD that became UMC (same board mainly) that discovered the Railway iron ore deposit and was taken over by BHP at $1.30. The Thunderball uranium discovery delivered some of the highest uranium grades ever seen in Aust. The Copernicus deposit was found, JV’d and turned into a Ni/Cu mine. Red Bore has delivered some great results but remains unexplained. Chairman Phil Crabb discovered, helped to develop, and monetised the Yilgarn Star gold mine (2.5Moz). He floated Great Central with the ground that became Plutonic mine (5+Moz) after Gutnick took it over.
Overall, not a bad track record. Sure there are better ones out there. But most listed explorers over the past 10-15 years would love to be able to list such achievements.
2 a) The lack of success now is due to the ack of mental capacity and experience of the Board but somehow the board and geologists remain capable of finding mineralisation
Nasty. Unprofessional. And frankly not worthy of a purportedly “balanced” poster with a reputation for objective commentary.
2 b) There remains, on the tenure, somewhere that a commercial body of mineralisation of any kind can be winkled in between all the drill holes that have been drilled
Not an entirely unreasonable observation IF the mineralisation had come to surface. It doesn’t at DeGrussa. It doesn’t at Monty. DeGrussa discovery was from about 100m downhole. Monty discovery was from 411m downhole. THX has drilled 113 RC and 21 DD holes at Red Bore. About half were focused on what is now called Gossan in a 20m x 20m grid in 2010-2012. 56 of the 134 holes (42%) are less than 100m vertical. A further 49 (37%) ended between 100m and 200m vertical. Only 8 have been drilled deep enough (400m vertical) to have reached the Monty discovery depth. Only 29 THX drill holes have tested below 200m vertical depth. So Yes, Absolutely, there is abundant space “that a commercial body of mineralisation of any kind can be winkled in”.
My comments in my previous post should obviously be read in conjunction with this.
Tony Lofthouse
2 c) That the old rubric of "it's just below us" is not the ONLY excuse
I don’t really know how to respond to that. Mainly because I’m not sure I even understand exactly what it means. I suspect that the response to 2b) above addresses it at least partly. If you’ve explored to 200m and nothing explains the near surface mineralisation satisfactorily, isn’t it logical to explore deeper? Or should you just walk away and say that the exploration results from the top 200m unequivocally represent all deeper geology, notwithstanding that that geology (and any mineralisation) is folded, faulted, remobilised, (basically tectonised), and generally subvertical in attitude (ie turned on its side, twisted, rotated, dismembered, and essentially nothing close to its geometry when originally formed)?
3) The directors are not in it just for themselves by now
Again nasty. So if directors have no skin in the game, the conclusion is that they think their prospects are rubbish? And if they DO have skin in the game, then everything they announce is fabricated in order to deliver a share price rise for their own benefit and not for ordinary shareholders? A cynical view that chooses to ignore the fact that there have been no director sales in the past four and half years that I have been CEO, despite the fact that runs to $0.36 in July 2014 and to $0.17 in June 2015 should have precipitated a deluge of director sales if that contention had any merit. Needless to say, they didn’t and it doesn’t. Plus why would directors and staff have subscribed fully to the recent SPP if they thought the fundamentals didn’t have merit? All of us recognise that exploration is a risky game. We are seeking a result for ALL shareholders. And we happen to fall into that group.
4) I am not buying it for a nearology play
Of COURSE that is a criterion in any decision to invest – especially when the mineralisation model (VHMS) is typified by clusters of deposits that are generally not far from each other. The saying “explore in the shadow of the headframe” has its foundation in a long history of brownfields discoveries.
I think that's a hard ask.
The fact remains, the tenement is tiny, it's been drilled a bunch, the geophysical targets are not at all compelling (far from it, in fact), no geochemical map I've seen in my skimming of the ASX releases shows anything less than coincident (in the sense that it just happens to be a red blob).
DeGrussa wasn’t discovered by EM. The subsequent Conductor bodies were. Monty wasn’t seen by TLM’s DHEM. No other discoveries of commercial deposits have been made in the Bryah as a direct result of ground EM – and that includes the recently reported SQUID EM surveys. No other geophysical survey methods have been credited with any commercial discoveries in the region. Extract from p5 of THX QRSep2014: “Measurements carried out on core samples of the massive chalcopyrite from hole TRBDD09 revealed that the actual EM response for that rock is only about 10% of the theoretical response that might be expected from material grading 28% Cu (approximately 80% chalcopyrite). The probable reason is that the mineral grains are separated by “gangue” and so are not physically in contact with each other, inhibiting the rock’s ability to conduct an electrical current and so rendering DHEM surveys much less effective than in other circumstances.”
The tenement is not large. But it doesn’t need to be large to host a deposit, as long as it is in the right place. We still don’t know if it is or not for sure, but the argument that it is “too small to host a deposit” is totally false. The whole of the Kalgoorlie Golden Mile could fit within it. One of the world’s biggest VHMS deposits (Kidd Creek in Canada) extends from surface to over 3 kilometres deep and is still mining. The surface footprint of the original discovery zone at Kidd 55 was a couple of sulphidic felsic outcrops over a couple of hundred metres strike. An airborne EM survey in 1959 identified a target that was discounted as being due mainly to pyrite as that was what was observed in outcrop. The discovery hole wasn’t drilled until four and a half years later as a result of the persistence of a couple of Texas Gulf Sulphur geologists. Persistence is the key to discoveries. History shows that it’s rarely the first exploration pass that makes the discovery.
For instance, if you take the fact DeGrussa is a couple of 100m down strike out of the equation, would you invest in a 2km x 1km chunk of ground elsewhere in the basin? n an area with 20,000km^2 you have 5 VHMSs. The chances of this postage stamp holding a deposit is 1:10,000 before you drill a single hole.
Disingenuous. The reason that this “2km x 1km chunk of ground” has attraction over and above any similarly sized area in the basin is precisely BECAUSE:
1) it is close to the exisiting DeGrussa mineralisation; AND
2) high grade copper-gold-silver mineralisation occurs near surface.
I am aware of no other ironstone / ”gossan” found at surface in the basin that has delivered massive chalcopyrite at 28% copper with significant gold and silver credits. That sort of occurrence HAS to be explored properly and methodically, whether or not it leads to a primary deposit discovery.
1:10,000 chance? At best this assertion is predicated on incorrect assumptions and at worst it is deliberately misleading. VMS deposits do NOT occur in nice, even spatial distributions. You can’t just say “basin = 20,000 sq km and tenement = 2 sq km therefore chance of deposit = 20,000/2 = 1 in 10,000”. Also the “5 VHMS” in the area is irrelevant to the argument. Except that they prove that the area IS prospective for VHMS. The logical starting point to that component of Blythefan’s argument is that before the first VHMS was discovered, the area held no potential for VHMS because none had been discovered. Akin to saying that gravity didn’t exist before Newton “discovered” it.
If you take the number of holes drilled to date into account, can you REALLY envisage the chances of an orebody existing within the tenement >100m from the drill holes? Remember, they have done DHEM, it sterilises the ground around the holes for 50m radius. Drill enough holes, your whole tenement is sterilised. Ask yourself if that's been achieved yet. If they sterilise half the tenement your chances, statistically weighted, are 1:200,000.
See the answer to 2b) above. And the comments about the measured EM response of the massive chalcopyrite in our drillcore. There are 29 holes that go deeper than 200m vertical. Just 8 that go deeper than the 400m depth at which Monty was discovered. Even if DHEM DID sterilise 50m radius around a hole (and that is questionable in this setting) do the maths. Call it 7,850 sqm per hole. So the 29 holes below 200m would theoretically have “sterilised’ 230,000 sqm at that depth. That’s just 11% of the tenement. And that assumes that none of these “areas of sterilisation” overlap (which of course they do, thus reducing the percentage coverage). On this basis at the 400m Monty discovery depth the maximum EM coverage is 3% of the tenement. And that assumes that each hole could be surveyed to full depth, which has not been the case due to blockages and hole collapses, which are common in this terrain.
In the areas not sterilised yet, can you fit a big enough volume of rock to make it a goer. Like, assume it's a Monty. Monty is 300m x 600m in footprint. Consider that in the context of THX's tenure and drilling.
Addressed in previous responses above.
Now, the board and its staff have, an investor hopes, the training, experience and skills neessary to conclude the above. Yet they raise money and continue drilling. And investors continue buying their shares.
Red Bore is not THX’s only exploration play. Some investors buy for the gold exposure at Garden Gully et al, which is part of the stated purpose for recent raisings. Some for the NT prospects. Diversification of our exploration targets is a deliberate strategy as exploration is a numbers game. The more prospects that you test (based of course on a sound geological rationale and models), the greater the likelihood of a discovery.
The textures in the drill chip in their last announcement are in my estimation, completely secondary. ie; this is some chalcopyrite that's come into the basalt or dolerite after formation. You can tell because they fill cracks between the silicate minerals. That discounts, entirely, a syngenetic origin for them. Because they fill cracks, the only explanation is hydrothermal (but its not green, it's black, so not very altered) or injected. It's in a thrust fault (allegedly) so you'd choose the last one.
One of a number of potentially valid interpretations. Additional input (petrography, mineralogy, geochemistry) will help determine if it’s the right one.
But the issue is whether one rock chip, in isolation, is enough to cause you to get excited. Consider that Red Bore has known gossans, massive sulphides that go nowhere, and so on. it's been drilled, and drilled again. And again. Do you think that this, the latest sniff, is the holy grail? or is it just more of the same?
Of course not. And I don’t recall seeing any assertion that it is? But it DOES support our view that the project is definitely not “dead”.
If it's been remobilised, has it come from the existing mineralisation, that is subeconomic, or from a new economic body that somehow has been missed for 10 years?
Easily done. Again look at the Kidd Creek example. Berry mapped sulphidic siliceous rocks at surface in 1941. In 1957 Texas Gulf Sulphur’s Miller started looking at the area in earnest. In 1958 he had mapped a sulphidic zone 300m long. It wasn’t drilled until 1963. One of the planet’s biggest VHMS base metal mines, left to sit there for 16 years since first evidence of sulphides were recorded and then for a further 4 and a half years before they finally drilled it with the discovery hole. So missed for 10 years? Absolutely possible.
I guess, if you want to take lotto punts, buy a lotto ticket.
Lotto = speculation. All exploration company investments are speculative too. That’s why it states it clearly in every prospectus. Any investor who does not recognise that exploration does NOT come with guarantees of success probably shouldn’t be investing in this sector.
Now, Shady vs ecat88.
Not my place to comment on RNI posts.
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