|Novo rose 8.5 percent to C$5.90 at 9:39 a.m. in Toronto, bringing its gain this year to 638 percent.|
Hennigh’s theory is that Karratha and the surrounding Pilbara region is a long-lost scrap of the Earth’s crust once conjoined to Witwatersrand — a massive underground belt of gold and other minerals in South Africa that’s supplied more than 2 billion ounces, or about one-third, of the yellow metal ever mined by man.
“Pieces of the Witwatersrand basin may sit in some unexpected places,” says Michiel de Kock, head of the University of Johannesburg’s geology department. Magnetic records found in rocks indicate Western Australia’s Pilbara and the Witwatersrand region might have been “nearest neighbors within a larger supercontinent.”
How the Witwatersrand became so rich in gold has long been debated among geologists. The most commonly accepted theory is that gold washed out of mountain ranges accumulated in a basin. But others have questioned that, saying there’s simply too much of it — erosion alone doesn’t explain the source of all that metal.
Hennigh began exploring the idea in 1993 for his doctoral dissertation at the Colorado School of Mines. His hypothesis was that the Witwatersrand was once covered by acidic seas that could dissolve gold. The emergence of photosynthetic life — blue-green algae spewing oxygen into the atmosphere — changed that chemistry, forcing gold to precipitate out of seawater.
That belief would influence how Hennigh looked for gold. Where others saw coarse sedimentary rocks of little interest, he saw potential: they might hide an ore-rich layer formed by a primordial seafloor.
Hennigh’s research funding was pulled by its sponsor, South African miner Gold Fields Ltd., and went unpublished. But he took his ideas in the mid-2000s to Newmont, where he refined his theory and began to consider the breakup of an ancient continent. Could deposits similar to Witwatersrand have drifted elsewhere?
“There are very, very few places where we have rocks that old: there’s a bit in Australia, a piece in South Africa, a piece in India and a piece in Brazil,” Hennigh says. “It’s very difficult to work in India, the piece in Brazil turned out to be too small to be of interest. By default, it was Australia that ended up being the main focus.”
Hennigh left Newmont, formed Novo, and teamed up to stake out acreage with legendary Australian prospector Mark Creasy, whose fortune began with a A$130 million ($103 million) payout in 1994 for two gold discoveries in Western Australia. Newmont snapped up a 36 percent stake in Novo in 2013 and remains the largest shareholder. Newmont declined to comment. Sprott, the second-biggest investor, wasn’t available for comment.
“I’ve always believed there’s a reasonable chance that we have an undiscovered Witwatersrand-style of gold in this part of the world,” Creasy, 72, said by phone from Perth. But for years, those lands were held by explorers looking for base metals and only became available again recently, he says. Furthermore, the belief that gold precipitated out of seawater would “alter, to a certain extent, where you’d go looking” — in coarse amalgamations of pebbles and boulders, known as conglomerates.