Conflation

“There is something (here, perception, ideas, theories) and a function of something (here, a price or reality, or something real). The conflation problem is to mistake one for the other, forgetting that there is a “function” and that such function has different properties.” – Nassim Taben, Antifragile

People often look at something and determine the value. They can be right or wrong and not know why. The physical characteristic of the subject can bear no resemblance to its function. I think this is a pretty powerful statement.  

The function of something can be completely different than the subject and inform the observer of what is relevant. In our context, the something is drill results. The function of something is the price action. Great results can lead to great price action or none at all. What does the price action tell us? Maybe the something isn’t that important. Maybe it’s a function of the jurisdiction, operator, the team (f(grade, team, jurisdiction)). If we look at comparatively positive results maybe we can learn something about the other variables in the equation. 

I’ve continued the analysis of 2018 exploration results, looking at average price returns after the release of significant drilling results. In the chart below you’ll see the price return in daily increments after the release of exploration results. 

I’ve sorted the data by the return two weeks after the information release. The range of results is quite large. Moosehead, Dixie Lake, Fenelon, Tatogga, and White Gold saw share price increases continue for quite a while after exploration results. Other properties not so much. So what distinguishes these properties from the rest? If there’s a steady stream of exploration results than this could propel the stock higher. Maybe it’s the the quality of release?

The chart above shows that there is a weak relationship between price returns and au grade*interval length. There are properties, however, that have great results with poor share performance… What separates Moosehead from Madsen? Tatogga from Copperstone? 

What was the function that resulted in Sokoman Iron Corp’s share price appreciation??? Could we have predicted it?

North American Intercepts – 2

I did some more digging into the drilling data. I wanted to create a more definitive list of prospects before I start to looking into more details.

First off, what do these charts show? They show drill results from properties located in North America. The drilling occurred in 2018 and the minimum interval width is 5 meters. Why 5 meters? While I’m sure that this will eliminate a lot of interesting data from some properties, I want to focus on robust results that are consistent over mineable intervals. Narrow vein mining is fine. Too complex for me though… Also, these are exploration/development properties. No producers.

The chart above shows all of the North American exploration results, grouped by property and coloured by gold grade * interval meters. If we whittle these down to grade meter levels > than 400 g/m than the image shrinks to:

Ok, this was helpful. Now we have some properties to look at. So what ones stand out? 

  • Railroad Pinion – Gold Standard Ventures Corp
  • Windfall Lake – Osisko
  • Madsen – Pure Gold
  • Cariboo – Barkerville
  • Kiena – West Dome
  • Cheechoo – Quebec Precious Metals Corp
  • Dixie Lake – Nemont and ???
  • Tatogga – GT Gold
  • Goldlund – First Mining

Some of these are familiar names, some not so much. This seems like a good list to start digging into. In my next post I’ll start investigating Railroad Pinion.

156 North American Gold Intercepts

First off, I’m not a geologist. I’m just interested in this domain.

I was wondering…

What was the most successful exploration program in 2018? What is the most interesting development project in North America (based on 2018 drilling results)?

Who knows? What do you think?

Projects with best intercepts:

  • Windfall Lake
  • Madsen
  • Fenelon
  • Kiena
  • Clarence Stream

Projects with a lot of good intercepts that weren’t mentioned:

  • Cariboo
  • Railroad-Pinion
  • Premier
  • Val-d’or East

I wonder who drilled the most? Should probably normalize for that.