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Thursday, May 5, 2016

Lies, damn lies and metallurgical recoveries

We’ve all read a lot of press releases stating that a company has received metallurgical results showing great recoveries from their project.

Compare the grades of the metallurgical samples against the average grade of the deposit.
  • Typically: high grade material = higher recoveries.
  • Met samples are different (i.e. do not represent) from majority of the ore.

Companies will often just send high grade material for metallurgical testing, which will have different mineralisation styles, ore types and minerals causing it to have different metallurgical characteristics and recoveries when compared to the 'average ore' in a deposit

Example 1: Azure Minerals – Mesa de Plata Project, México.
Recently announced 70% recovery of silver by leaching from a disseminated silver deposit (link).
Diging into the PR we can see that they submitted 2 samples for testing:
  1. A master composite at 138 g/t Ag.
  2. A high grade composite: at 670 g/t Ag ( ~5 times more)

We can also see that the Master composite contains significant Arsenic (As). Will it go into the concentrate? This is important as many smelters will charge penalties on, or even not accept, concentrates containing significant amounts of arsenic.

Recoveries:
  • Master: Leaching = 50%, Flotation = 51-55%: 
  •  High grade: Leaching = 70%; Flotation = 67-72%
There is ~20% difference in recoveries between the high grade and master composites.
  • Using bad maths: 
    • Average deposit grade = 138 g/t Ag
    • Using 51-55% recovery - only 69-76 g/t Ag is recovered, the rest is lost.
    • @ $17/oz Ag the recoverable silver value at Mesa de Plata is $37.7-41.4/tonne 
Azure did finish the PR with a statement that they are looking to conduct additional metallurgical testing, this is a good clue as metallurgical testing costs money, so most (if not all) exploration companies will do 1 or 2 to make sure that the gold/silver/copper etc. can be recovered. If they have to do more work, it means that there are issues (i.e. the recoveries are crap).

But here are some questions:
  • At current metal prices, will Mesa de Plata the deposit be economic with these recoveries?
  • Does the Arsenic go into the Silver concentrates?
I like the fact that Azure have included an average grade composite, it shows that they are thinking about the possibility to develop of Mesa de Plata in the future and are conducting early metallurgical testing to make sure that the silver is recoverable rather than just focusing on drilling as big a resource as possible.


Example 2: Golden Mineral – El Quezar, Argentina
From their 43-101 on El Quevar, they have the following Resources.


A reasonable resources, but we can see that they have 2 different ore types (oxide and sulphide) and are looking to mine the deposit by open pit (bulk mining) and underground (selective) mining. They have conducted some metallurgical testing, and here is some info on the sample submitted:

All of the composite samples contain considerably more silver (300-650 g/t Ag) than the average grade of the deposit (140-150 g/t).

The recoveries look fine, flotation gives between 60-90% recovery and leaching a bit less, but it raises the following questions:
  • What is the recovery for average ore from El Quevar
  • How does recoveries differ from the oxide and sulphide mineralisation?
  • What is the transition zone from the oxide into to the sulphide resources?
    • is it a sharp or do you have a significant transitional zone where the metallurgy of the ore is more complicated (and recovery can be significantly lower)..
    • what is the recovery in this transitional zone?
 

When I see reports like these, it sometimes appears that companies go out of their way to specifically test high grade ore, that only represents a very small fraction of the deposit.
I can understand the desire to portray your project as being as good as possible, and I have no issues with companies testing high grade ore as it will be different from the majority of the ore in a deposit,  but why do many companies insist on ONLY testing high grade material?
If you don’t test the modal/average ore, you won’t know about any metallurgical/recovery issues that could impact >75% of the project’s resources.

I’ll ask you this question – how many mines announce that production was lower than expected due to poor metallurgical recoveries?

4 comments:

  1. I'm sure they test average ore, too, they just don't disclose it.

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    Replies
    1. It would be highly surprising for a junior company to have run additional testing without disclosing it. If the results were worst then the disclosed results, they could be liable for misrepresentation. If they were better, they would obviously have released them. Good blog AngryGeo, most economic geologists should read it to gain accelerated experience!

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    2. Metallurgical testing is expensive so most (if not all) junior companies will do the minimum that is required. All they want to know is - can we recover the metals from our ore using industry standard techniques.
      For me the kicker was the last paragraph of the press release which stated that they will be conducting further work to optimise recoveries. that basically means, the recovery is rubbish.

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  2. Great point on arsenic. That one flies right on by most sheeple. In one case a few years ago a now bankrupt (Fire River Gold - FAU.v) sent highly laced ore with arsenic to the refiner and got nailed for clean-up costs. That particular shipment likely cost faaaaar more than it was 'worth'. Dealing with high levels of As is expensive, thus the reason some refiners don't touch it at all. Promos will avoid that truth every time. (Great blog BTW, I guess we must Thank Otto Man at Inca Kola for the heads up) http://pennystockjournal.blogspot.ca/

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