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Wednesday, January 16, 2019

Serengeti - Buffing the Banana

Someone asked me to look at Serengeti's Kerwanka project in BC.

You have to give credit, Serengeti's team have been hard at pounding the the bald-headed moose, cranking the shank, and feeling their way around Kerwanka.


However, the problem with dancing with the one-eyed driller is that once in a while you have to consulting with your silent partner to see if the project is good enough for a one gun salute.

So why don't we stop serenading Mrs. Palmer and her five daughters by letting go of the one-stringed guitar and have a look:


what a load of crap
Wow, the open pit resources are terrible and the the underground "resources" are just a Cu(m) stain.


So basically, they could define >10 billion tonnes at a similar grade and it would still be too shit to put into production.

For amusement, here is the Kerwanka underground resource plotted against the mighty proposed block cave operations

Well, someone has to come last...

So basically, all that hard work milking the moose, fly fishing and hoisting the petard still means that the project is crap. That's enough to make the the bald man cry


Tuesday, January 15, 2019

Pretium - another Brucejack fail

Joseph Ovsenek must be feeling a bit of a twat at the moment, not only did he tell us back in September that (link):

[Pretium quote]

They failed to do this (link) by falling 5% short of their lower guidance expectations, and just to top off the good news, we get a nice PR investigating the trading it is shares (link).

So how bad were the Q4 numbers?



Pretty shitty, there has been a consistent decline (but like my school grades) since the mine reached steady state production and the new grade control system came into place.

It is almost as if Pretium, by some coincidence managed to be mining some high-grade zones the same time. How fortunate.....

We can clearly see that only once (Q2), did production come close to the Feasibility Study number, and Q4 was a huge miss.




My bug concern, and I've mentioned this a few times, is what will happen to the grade once they ramp up to 3,800 tonnes per day?

If they manage to maintain the same average head grades (11.98 g/t Au) and recoveries (97%) that they achieved in 2018 (around 11.98 g/t Au) after the expansion we should expect quarterly production to be around:

  • (90 x 3800 x 11.98 x 97%) /31.1 = ~128,000 oz per quarter
Ironically, this is approximately what they would have been mining if they had managed to match the grade in the Feasibility Study. 


However, the common thing that happens when a mind finds itself with a hungry hungry mill, it that they chuck any old crap into it and the grade plummets.

I wonder what will happen here?



Sunday, December 23, 2018

SolGold - the beast gets bigger.....

DISCLOSURE - I've sold my Solgold shares as I regard the story at Alpala as being complete. I don't see an upside to the stock in the short-term and I'm not convinced that the deposit is big enough, at current metal prices, for a major to take them out and develop it.

So, SolGold put out an updated resource statement for Alpala (link).

On the surface a massive jump on the previous numbers.

The Contained Gold number should be Moz not Mt
Please note that a lower cut-off was used for the 2018 resources - 0.2% CuEq vs 0.3% CuEq in 2017.

So what? They have nearly 3Bt of resources at overall grades that, even if it was at surface, would be regarded as being marginal.


When you strip out the high-grade (>0.9% CuEq) core, hat you have left is crap:
  • 2530Mt @ 0.28% Cu and 0.13 g/t Au or 0.37% CuEq
At those grades, even it was forming a nice green hill, it isn't good enough, and wouldn't be unless Cu was >$4/lb.

Let us look at the high-grade zone

I used the 0.9% CuEq values in the table, so they have:

  • Indicated - 400Mt @ 0.9% Cu, 0.93 g/t Au or 1.49% CuEq
  • Inferred - 20Mt @ 0.72% Cu, 0.52 g/t Au or 1.05% CuEq

Here it is



best areas start at ~750m depths

You can see that the bulk of the high-grade resources are in the central zone, which has been extensively drilled, and doesn't seem to have much expansion potential.

The Alpala Southeast zone appears to be defined by a couple of drill-holes, and is open in several directions, but it doesn't look to be very big.

We see the same with Alpala NW and Trivinio, but man is it deep.

The project that I was hoping to see some results from Aguinaga was a bust, and basically used the latest resource update as an opportunity to take my (small) profits and walk away, as for me, this is where the project doesn't quite make it. I've annotated a nice summary chart from Macquarie's nice summary on various block caving proposed projects (link), and we see:



I hope that Newcrest come in and take them out (link), but with the grumblings from Ecuador regarding their permitting issues (link), for me the story is over, especially as they'll need to raise more funds for their, in my opinion, extremely expensive exploration programs.



Tuesday, December 18, 2018

GT Gold - more holes in the (North) Saddle

We've had a new PR from GT Gold (link). Some interesting results, but the market didn't like them.

Summary:

Good News

  • The >0.5% CuEq mineralization appears to come to surface (hole TTD108)
The Bad News
  • High-grade mineralization restricted to a specific zone (the Stock-work zone)
  • This zone appears to be discontinuous (i.e. it doesn't seem to join up well between drill-holes), and the best zone is deep
Overall, I don't see, from the data presented, much evidence that the North Saddle zone will grow into something huge. The best mineralization appears to be inconsistent, with the best intercepts at depth.

In More detail....

In my last post I was partially correct about a preferred 'trend' in the mineralization. In fact, on the sections provided in this PR we can see that virtually all of the good mineralization is found in a specific 'unit' - what is labelled as the intense stockwork zone.

I've highlighted on the sections that accompanied the PR.



You can clearly see why hole TTD098 missed. It was drilled parallel to the stockworks just clipped it. Imaging if this hole had been drilled a degree steeper, it would have hit >300m @ >1% CuEq. The market would have liked that.

From the sections I've tried to model this zone in 3D (file here - link).



We can see that the stockwork zone is:
  • Narrow (~max thickenss 250m)
  • inconsistent (forms separate, probably discrete zones)
  • Steeply dipping to the SW
Unfortunately, for me, I can't see how the Stockwork zone is going to get much bigger.

  • On section 5620 (the most northwesterly section) the zone is very narrow and runs along the fault.
  • On section 5830 (the most southeasterly section), the stockwork zone again is very small and deep
  • Only on section 5740 do we get 2 zones
    • upper narrow zone (hole TTD106 and 108 - approx 100m wide) that continues to surface
    • lower deep zone (TTD093) that starts at 400-450m depth, that is ~200m wide
We have to remember these section are ~160m apart, which makes that stockwork zone quite small.

I'm certain that hole TTD109 will get something great (probably 400m @ >0.75 g/t Au and 0.5% Cu starting from 700m depth), but so what. All it will be doing is confirming what was hit in hole TTD093, it won't tell us anything new, we already know that they have some moderate mineralization at depth. To be special and make this project, hole 109 need to get something special.


Monday, December 10, 2018

And now for something completely different....

I should have read the PR properly!

A rehash!

A massive shock, BHP released some exploration results....

This either means two things
  1. They're fecked and desperate for Eric Sprott's cash
  2. They've found something huge and they want to show-off
There wasn't much to go on from the PR, just some assays ...

obviously hole AD-23 included an intercept of 1m of 180% Cu...

Why don't we compare this against the discovery hole for a small deposit called Olympic Dam.

Source: Geology for Investors (link)
Here is the data in Leapfrog (link).

First thing, it is quite deep...

1.2km depth, I wonder if they'll have more water to pump than Platosa?


Friday, December 7, 2018

Evrim - oh dear

I was surprised that we got a PR from Evrim, I was expecting that they would wait until the new year to publish results, like our chums at GGI (link)!.

But they did publish the initial results, and they were....

not very special


how can we put this....not quite what the market was expecting...

ouch!


We could amuse ourselves with the fact that the results weren't anything special (I'll be updating a LF model over the weekend). We have a narrow zone of moderate gold mineralization at surface with a interesting (from a scientific point of view) copper zone at depth.

Oh dear
However, I'll turn your attention to this PR (link). This is where Evrim recieved ~$7.2M from Newmont, and it also tells us that they have to spend 80% (~$5.8M) of that to advance Cuale.

Will we see a massive amount of drilling at Cuale or a series of conversations to free up these funds to be spent elsewhere?

Welcome to exploration folks!

Saturday, December 1, 2018

GT Gold - update

The market hasn't been impressed with the recent results from Saddle North.

Geronimo...

and nor was I, but I've updated the Leapfrog model with the new data (link) so you can see everything in 3D.

The new drilling was disappointing. It appears to severely restrict the size of the high-grade (>1% CuEq) zone to an area that is ~500m long by 150-250m wide.

Quite small
The silver lining is, we don't how deep it goes, but....

deep..

The good stuff starts at around 250m depth, and the stuff above is quite poor, generally less than 0.25% CuEq, which isn't something you want to be mining and 1000+ meter holes are expensive to drill.

Hole 102 is easy to explain, it cut the periphery of the system and got a bit of copper and gold, and helps define the NW limits to the system.

However, Hole 98 was disappointing, it was planned to go through the guts of the system below hole 85 and hit not much at all, just a narrow deep zone of decent mineralization surrounded by low grade. We could explain it as clipping the SE edge of the system, but that is an impressive drop in grades over such a short distance, especially as there doesn't appear to be a fault or change in rock type.

Could it be that there is a preferred orientation to the mineralization?



There is some evidence in the core photos to support this, but I have to admit, the photos aren't very sexy.

grey....
I also did a woeful calculation of doom (TM) to see potentially how much metal the system could contain.




If it was closer to surface, I think bigger companies would be having a look, but at depth, at those grades, probably just going to be ignored.


My observations for the pending holes are:

  • 106 - I'm going to guess that it will hit a 200-300m wide zone of low grade <0.5% CuEq).
  • 107 - this is probably drilling the pyrite halo and will hit grades that are a bit less that 98 (<0.25% CuEq).
  • 108 - similar to 106, hit some low-grade and not much else
  • 109 - this may be aiming for the deep zone hit by holes 62 and 93. I'll have a stab that it will hit a >1% CuEq zone from ~550m to ~950m (similar to hole 85) as it is an infill hole.
  • 110 - hit grades middling grades - probably a zone of >0.5% CuEq from 500m depth (lower grade than hit in hole 93) as you move away from the core of the system.
Maybe GT Gold will be lucky and find another couple more porphyries, but my overall feeling is that we've seen the best from Saddle North.