Hermosa - Evening Gown

Bulk density.

Exploration is like making love to a beautiful woman. Lots of effort and generally unsuccessful (a jealous look towards southern Peru), and then we quickly move from one to another with high hopes that with 'this one' you'll be successful.

So your porphyries are BBW who can cook, clean and look after you for a long time. High grade gold deposits are amazing, but it is all over to soon. So where does the Beautiful Taylor fit in, is she as flabulous as we are told (remember - like partners, junior companies will never admit that they've got an ugly one....)

To find if you project is any good we (as me are scientists) need to measure her figure (tonnes) and how pretty she is (the grade). To do this you need an incredibly handsome, intelligent, probably bearded exploration geologist to go out there, erect his drill on her and prick her many times.

So in this sense is the beautiful Taylor flabulous or a bit anorexic?
In exploration we're funny, we spend lots of time and money working out how pretty she is (semivariables, geostats, kriging, ID2, 3, 4, 5.....99), 'cus we get to play with spiffy computer programs, use hard to understand words (to sound smarter), because we think it sounds sexy and impress all the girls at the PDAC.

However, to calculate her tonnage it is a bit more boring - it is volume (girth) x bulk density (or specific gravity). The girth comes from all of our hard pricking. The bulk density info generally comes from weighing pieces of core (if you're kinky you can cover them in wax) in water and air and comparing their weights. This is cheap (a few hundred bucks for a decent scale) so you can DIY with checks done by a professional lab to make sure that everything is kosher. Here is a more complete description (link)

Some companies take the holistic approach and take bulk density measurements from everything (e.g. Mag Silver at Cinco de Mayo - they collected >16000 SG measurements, but only 585 were used in the inferred resource calculation).

We've all been reading about all the deep penetration happening at Taylor, but, as I am a sad bastard, I was a little bit concerned that for a >100Mt deposit (including 31 Mt of Indicated resources), AZ had only taken 30 bulk density measurements, they decided it was more fun to use excel!



They tell us their fancy formula is accurate (+/-10% of the measured values, so only so +/- 11 Mt). I have issues with this, as we know that Taylor homogeneous deposit, they have bits that are:

• Sulfide ore - The Pb and Zn are in sulfides (galena and sphalerite) - the calculated bulk density will probably be OK for this zone (even though the calculation ignore pyrite).
• Oxide ore - Pb and Zn will be in oxides and carbonates which have a lower SG than sulfide minerals. Oxidized rock could also have a lot of cavities as soluble minerals will have been removed.
• Mixed Ore - this will be a mixture of oxide and sulfide minerals and its SG will vary by how much of each type is present.

I wanted to see if this calculated SG method was standard practice for manto/CRD deposits, so I checked other deposits to see what SG values they used and how they calculated them:

• La Encantada - SG = 2.5 tonnes per cubic meter (t/m3)
• Platosa (285 measurements) = 3.2 t/m3 (8.3% Pb, 9.88% Zn) - M&I resources
• Ayawilca (106 measurements) - 3.6 t/m3 (5.8% Zn, 0.2% Pb) - inferred resources -Zinc Zone
• Cinco de Mayo (585 measurements) - 3.47 t/m3 (2.9% Pb, 6.47% Zn) - inferred resources
• Accha (50 samples) - 2.5 t/m3 (8.48% Zn, 0.89% Pb) - Indicated resources (Oxide)
• Sierra Mojada (5335 samples) - modeled (i.e. the created a model from the thousands of SG measurement they took)

We can see that the SG varies considerably, with oxide deposits with lower SGs (Accha and Encantada), and sulfide deposits with high SGs. You can also see that none used a calculated SG value, they all took lots of measurements so that they could accurately determine the SG to use in the resource calculations.

Why is this important? Lets work backwards - Hermosa state that the average SG for Hermosa is 3.43 tonnes per cubic meter, and depending on the Lead and Zinc grade this value will vary (so they are using a modeled SG value). 

Source: Oct 2016 Technical report

They have 113.89 million tonnes of resources, so:

• 113.89/3.43 = 33.2 million cubic meters of ore:
• 33.2 x 3.2 (Platosa SG) = 106.2 Mt of resources - you lose 7Mt of ore
• 33.2 x 3.6 (Ayawilca SG) = 119 Mt of resources - you gain 5 Mt of ore

You change the SG value by a little bit and you can make huge changes in the amount of ore you have, and this is where I have an issue. The formula that they are using assumes:

• All the Lead and Zinc is in Galena and sphalerite (sulfide minerals)
• they won't be in the oxide and transitional ore zones as lead and zinc oxides and carbonates have a lower density and oxide ore can be quite vuggy (have a lot of spaces - i.e. areas with no density)
• Why have't they included pyrite in the calculation? Its heavy, 5 t/m3.

AZ have spent massive amounts of money on drilling 1+km deep drill-holes (they are paying $262/meter), but didn't want to spend a few hundred bucks (and a technician) to take systematic density measurements throughout the deposit. What we got instead is a semi-accurate excel formula (the author of the technical report even outlines those flaws).

It looks like AZ has taken the lazy, cheapo option

again..