Investors fret over southeast setback at Westhaven Ventures

In his latest Discovery Watch interview, John Kaiser who runs Kaiser Research Online sees some encouraging signs from recent developments the Nevada Exploration (NGE) South Grass Valley Project. Meanwhile, hopes of a clear path towards finding a large world-class resource at the Westhaven Ventures (WHN) Shovelnose project suffered a setback this week, even as the main story of a high-grade discovery remains intact.

Westhaven Ventures stock sold off on Monday after the company released the results of recent drilling that followed-up the company's big news discovery on October 17th of last year. Kaiser suggests there are two reasons for the market's negative reaction.

The first was there wasn't the very high grade, wide intervals that had been seen in holes 14 and 15 that got everyone very excited about this discovery.

Kaiser suggests this really isn't that big of a deal because, among other things, the holes drilled under 14 delivered the kind of grades one would expect for an underground vein type of mine.

The second thing that the market was not pleased with was that the hole drilled 100 metres to the southeast of hole 15, which was a fairly aggressive step out, only yielded very low-grade mineralization.

Click for larger (source Westhaven Ventures, INK Research)

Kaiser suggests this was obvious already in December when the company put out a visual description where it was clear that hole 19 had not hit much.

That killed the hope that they could very rapidly start just stepping to the southeast and banging off big intersections and everybody can do the math and sort of see the tonnage and ounces start to build and instead of this being a 1 to 2 million high-grade system, start going into the 5 to 10 million world-class category.

The company is now hoping this result just represents a local faulting that has lifted a short portion of the vein up, explains Kaiser. The company will go back this spring to further step-out to try and pick out the system again.

Meanwhile, as investors fret over hole 19, Kaiser suggests the market may be overlooking some good news when the drilling intersected a second parallel vein to the east of the main vein. They plan to go back with a small drill program to test the eastern parallel vein.

The key takeaways from the Westhaven Discovery Watch segment: expectation for instant gratification has been dashed. However, the project remains an exciting and decent discovery. The key hurdle now is to do a financing.

Kaiser also updates the Nevada Exploration program at its South Grass Valley project. He found the company's visual description of hole number 6 interesting. The hole is located in the northwest corner of the project:

They key phrase they threw in there was high levels of secondary pyrite, and it's the secondary pyrite that you want to see in these Carlin-type systems. So, these 230 metres they are looking at is probably the best visual we have seen come out of this

Kaiser notes the stock has only modestly reacted to the news and suggests the company won't get assays for this until next month. Nevertheless:

For the first time since they started this drill play in October, investors have reason to hold their breath that maybe we get some ore grade intersection which confirms that this isn't just a big giant hydrothermal system with modest pathfinder and gold background values, but actually has the sort of setting that allowed mineralization to get concentrated and build the sort of not just multi-million ounce, but tens of million ounces type of deposit.

The show kicks off with a colourful rebuttal to a recent critical Angry Geologist post on Serengeti Resources (SIR).

Disclosure: I hold shares in Westhaven Ventures