Further to our hub leaders' analysis on the NR, I received an email from a retired geo friend of mine and I asked if I could share his take on this with the board, providing him anonimity, as he's not one for bullboards and getting involved with such things. Here's his thoughts:
The reaction of the market to the Press Release is not surprising based on the lack of important information given out. My take on the results released are that they simply indicate that they have found "some gold" and does little to indicate encouraging indications of potential worth while economic value. It was not a good press release. We will just have to be patient and wait for more information to be released. There do seem to be others with continued optimism and are buying as the "bleeding" seems to be stopping this morning in the $0.70 range. If I had more extra cash laying around I would consider buying more too.
Without providing information regarding the location of the drill sites with respect to the geophysical anomalies and more complete analysis results over the entire depth of the core from the drill holes it is impossible to get a sense of whether or not there might be economic quantities. It is a bit surprising that the press release only talks of 11 locations and 4375m of total cored hole. I think we were lead to believe they would had more drilling done by now. It is also disappointing that they only appear to have reported selected intervals in each hole with only the highest gold values (and quite a few of the values aren't bad). The question unanswered is --- are these all the samples of the core that have been analyzed to date or is it that the rest of the core is barren?
To determine if they really have significant indications of potential ore grade we would need to see systematic measurements over the length of each drill hole. The total intervals of rock with potential (ie something in the order of >0.3 to1 g/t for open pit and >1 to 2g/t for underground mining) would be needed. I am no mining expert and am not too sure if the cut off grades I have suggested are very accurate but I have seen numbers in this order being used in other recent mining company reports.
SLI is correctly reporting the results in ppm rather then in g/t to reflect that they do not want anyone to make the assumption the the value is representative of an actual size of a body of rock weighing one ton. Another way to look at it is: 1000ppb = 1ppm and theoretically = 1g/t (but only if the amount of gold in a sample, a few cubic inches in size, were actually to be present throughout the larger ton sized sample of rock ). To get a handle on getting good estimates of g/t values, large bulk samples from trenching, test shafts, etc are needed or closely spaced core sampling and detailed correlation of the core results to the geophysical mapping.
Patience.
