The revision of the Paron Update is edifying.The ASX seems to...

The revision of the Paron Update is edifying.

The ASX seems to have required the company to remove the potential resources sizes that were in the first update. That is strictly correct because any such figures would be non-JORC compliant. Its interesting, but not unreasonable, that the directors were confident enough to include them in the first place.

I think their logic goes something like this.

1. The colluvial deposit, which comprises material eroded from the scarp over the centuries, can roughly be determined in size without drilling using observation and simple mathematics. The gradient of the fault and the occurence of the colluvial deposit in distance from the scarp will give a good indication of breadth and depth. If the colluvial grades are similar to the grades on the scarp, which they probably are, then you have a colluvial resource size. LAT say 50,000 to 100,000 ozs gold. That also means 218,000 to 436,000 ozs silver.

2. They said the downfaulted extension has potential for 400,000 ozs gold and 1,750,000 ozs silver. The ASX were not happy with that but I reckon its a pretty good guess.

The downfaulted extension just has to be there because there is no way the outcropping on the scarp, where the measured and indicated resource is, could have come about on its own. The faulting means that there is a corresponding deposit at depth. The 1) shallow depth of the colluvial deposit at the bottom of the scarp and 2) the top of the outcropping zone on the scarp being close to the top of the scarp, together mean that the down faulted extension will not be far from the surface, maybe only 30m deeper than the colluvial deposit, and will, therefore, be an economic resource. If the host rock for the measured resource and the down faulted extension are equally pervious then the grades and size at depth should be similar.

That all means Paron contains 1 million oz gold and 4.3 million oz silver at least. Rough net present value (NPV) would be $125 million. Compare that to the current market cap of $8 million!! And they are on their way to producing in about 24 months!!