Pilbara gold rush: Mining company Novo blasts junior gold companies
THE chairman of Canadian miner Novo has blasted the growing number of junior gold companies making millions “riding on the coat-tails” of his company’s search for gold in the Pilbara.
Describing the sky-rocketing share prices of numerous ASX juniors as “nuts”, Dr Quinton Hennigh told
The Sunday Times the Australian-listed miners were making the most of “highly speculative” talk without actually doing anything.
“So many of them don’t know what they’re talking about, frankly,” he said from the Pilbara where he had just led a tour of “smart people” — analysts, bankers, investors and geologists — around the company’s tenement south of Karratha.
“It does get silly,” he said, adding that there was no guarantee of another massive Witwatersrand-type deposit that had been constantly referred to when people discussed the Pilbara gold story.
Dr Hennigh said it could take months or “maybe even years” before Novo — which is in a joint venture with Artemis Resources — knew exactly how much gold the operation was dealing with.
While he was “confident there’s something there” he said there were so many factors and complexities to take into consideration before Novo could make any major announcements about the size of any big deposits that may or may not be under their Purdy’s Reward lease.
He admitted that Canadian mining — in particular the gold exploration industry — had taken a reputational belting after the Bre-X scandal of the 1990s which still “taints the industry”.
Bre-X was a group of Calgary-based junior gold miners exploring for gold in Indonesia when their penny stock soared on news of a major strike in Borneo, reaching a high of almost $300 and valuing the company at more than $6 billion.
The stock eventually collapsed when it was discovered the drilling samples sent for analysis had been tampered with, sending countless mum and dad investors and institutional investors to the wall.
Novo has completed digging seven trenches at Purdy’s and has begun an eighth in a bid to get as much done before the cyclone season.
A Hartley’s research note sent to
The Sunday Times on Friday shows signs of promise but also cautions potential investors about getting ahead of themselves. It was written by an analyst who joined Dr Hennigh’s tour on Thursday.
“We are satisfied that gold is present,” it reads.
“The volume is still to be quantified and will be challenging to do so ... a very large endowment would appear to be in the realms of possibility, but only drilling, bulk sampling and good old science will tell.”
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