(Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long AU.V)
This morning Aurion Resources (AU.V, last $1.81) reported the initial batch of assay results (453 additional samples) from its 2017 sampling program at the Aamurusko gold prospect (view the maps and photos that go along with the press release here). The rocks continue to impress, with these additional results bringing the total number of reported samples to 632, with an average grade of just under 27 g/t gold. The grades of the angular quartz blocks sampled ranged from nil to 2,520 g/t (81 ounces per tonne) gold. The results suggest that this batch of samples carried a lower average grade than the last (though they did raise the bar in the highest-grade category), but that's really splitting hairs when you look at the remarkable amount of mineralized quartz block material that's being found at surface.
Aurion geologists are practically tripping over quartz vein blocks. Assays are still pending for hundreds of samples. It's hard to describe how rare that is... it's hard enough to find mineralized boulders in the field numbering in the dozens, but Aurion is finding them by the hundreds. I've asked people before, "What does a gold mine look like if you trip over it in a forest?". I think that it could look a lot like Aamurusko. Lots of mineralized material at surface, big angular quartz blocks that show little evidence of transport, and grades that suggest a strong mineralizing event (events?), all within a broader geological context that is highly favourable for the generation of a gold deposit, or deposits. Once additional geophysical surveys are completed to refine drill targets, the only thing to do is, well, drill... drill... drill.
Recently I had pointed out a map that showed sample locations for the summer program with the the hopes that the assays would confirm that Aurion has a veritable "field" of gold-bearing angular quartz boulders at Aamurusko and it would appear that my hopes have been realized. Aurion has now traced the Aamurusko "zone" over an area measuring 1.4 km long by 2.5 km wide and the prospect remains open to the southwest, west, and east with "several" discrete quartz vein block trends identified. Today's sample results should serve as a good reminder to investors of the fact that Aurion is in Gold Country and that the question is not "Is there a gold deposit here?", but rather, "How many deposits are there?" and "How big are they?".
The company states that field staff have been "indiscriminately" (i.e., randomly) sampling quartz vein material to avoid sampling bias/high-grading and, based on the company's summaries of grade-by-samples, I would argue that the results to date support that claim (they seem to reflect a log-normal distribution, which is often how natural populations can be characterized). Aurion is reporting an average sample grade of 27 g/t gold across 632 samples, and while the statistician in me knows that averages can be distorted by very high grade samples, the geologist in me feels that it's the sheer volume of mineralized material that is worthy of more attention. In some ways, the boulders could be viewed as a "sample of a bulk sample" of the top of a deposit that appears to be very, very, nearby.
I have to highlight that Aurion is still highly speculative at this stage. No matter how much you like an exploration target, it's the drill that has the final say in the end. However, in distinguishing between "wild ass" speculation and "informed" speculation, I'll borrow a little example from the gambling world. If you're playing blackjack and you're counting cards, that's what I would call "informed speculating". You recognize that you are playing a game of chance, but your knowledge of the deck can give you increased certainty of predicting any given outcome. A "wild ass" speculation is when a drunk guy staggers up to the table in the middle of a game, sits down, and puts down a $1000 chip on the next hand with no regard for whether or not the bet is "well-timed". I think that any "informed speculator" would be hard pressed to suggest that there is not going to be a gold discovery at Aamurusko when the drills turn, and that's at least half the battle in my eyes. Meanwhile, the geology suggests that the deposit could have serious size (and grade) potential. To continue with the blackjack analogy, I think Aurion investors are looking at a 5-6, the dealer is showing a 6, and the deck is heavy with tens. The question is not whether or not you take a card, it's whether or not you double down...