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Sunday, June 24, 2018

Nuggety Gold deposits

As we are drawing to the end of Q2 (or H1) for 2018 and we are all looking forward to Pretium's Q2 production figures from Brucejack, I've decided to do some edumacation.

Here is a nice article on evaluating high-nugget effect gold deposits like Brucejack, Pilbara etc. It is packed full of geo-porn (too explicit to reproduce here), so open the Kleenex, get something to lubricate your parts and have a gander.

Here is the link


16 comments:

  1. AG I take high exception to your use of MY word 'edumacation'. I have patented it and you may not use it without my express consent. As you know, you are preparing for the release of RIO2's next presentation, which YOU will review for the EDUMACATION on how .4 gm/ton oxides works for heap leach.

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    1. Hmmmm. Edumertainment seems to be nada taken at the moment. You may use this IF you patent yer discovery first. (Appears Uber hi-Grade, I wouldn't Sprott hesitate if I were you)

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  2. Anyone think anyone else will bid for Arizona Mining?? Teck?? Glencore?? Rio?? Thoughts?

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    1. probably not, the premium is high and the project, even though it is large, is unlikely to be developed

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    2. Rio appear to be divesting/de-risking their metal portfolio with the investigation of selling their interest in Grasberg which is a much better deposit than Taylor.

      Teck would be interesting, however, I'm not sure how well Trail will handle Taylor concentrates as at the moment one of the reasons they are operating the loss-making Pend Oreille mine in Washinton state is that they can blend its concentrates with the Red Dog's.

      Glencore, my guess is that they are probably still working down their debt pile and probably can't afford to get involved in a bidding war and for that price they could buy a bigger chunk of Antamina which is a much bigger, better and more profitable mine that already is in production.

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  3. Nothing new in the article that isn't already known about Pretium, except perhaps details of how structure (or lack of structure) impacts on the resource estimate. Pretium seems to be doing what they need to do in order to get a better handle on reserve grade. My only concern is the plan to increase tonnage before the revised reserve estimate is known. I know...they haven't said they're doing a new reserve estimate. But it seems to me that they will have to do one unless their reconciliation comes into line.

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    1. it is a lead in, partially to explain to non-technical people that accurately modelling high-grade gold deposits is hard, requires a lot of drilling, mapping and sampling, and even with all of that work, on a short timescale (months) there will be wide production swings (highlighted by table 4), particularly when mining the lower quality resources (particularly inferred). I'll draw your eye to the text below "table 4" heading on page 16 (or 674).

      However, Brucejack has reserves, so surely the variability will be less than +/-15%, if they had done their initial estimations correct;y?

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    2. Yes, I agree with the article pretty much totally and have seen the signs in Pretium's 43-101 that they fit thie category. Those wide production swings by the way are evident in almost any deposit when trying to reconcile monthly. In my career I saw few that were +-10% on a monthly basis.

      In my wiew they were optimistic with their initial reserves, particularly on grade. I don't think they'll be close to +- 15% on ounces on an annual basis.

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    3. Edited to add that while I agree with the article I found most of it to be boiler plate stuff. ie: more drilling, better geological contrrol, etc.

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    4. Unfortunately, collecting more data is the best way to go, and for many mines this can be the most obvious problem, especially the lack of mapping and recognition of post-mineral structures and rock units (Rubicon comes to mind).

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    5. I know several of the former Rubicon BOD members. They are good experienced mining people who should have known better.

      There are a few things that I look for in a resource estimate. One of them is the probability plot, which should approximate a straight line. If not then there are probably several distinct populations. I also look at the CoV. If it's above 2 I would predict problems with reconciliation. A histogram of the assay values is also extremely useful. The composite size is important. Anyone talking about SMU's or MIK are placed in my "uh oh" file. The Aussies are particularly enamoured with MIK but every deposit I've seen that used MIK has over estimated grade. It pays to know the geologist or geostat who did the estimate. Some are real clowns. I have an internal ranking of consultants doing technical reports. Believe it or not, a firm may have excellent people in one office (say Vancouver) but have mediocre people in another office. (Say Perth) For me the mine "make it or break it" issue is most often the resource estimate, not capital cost or operating cost or geotech or any other significant factor. It pays to know the people who do good estimates and those who don't.

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  4. I see Pretium is looking for a mill superintendent. One wonders if this is a new position or if someone is no longer with them.

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    1. I'm guessing someone decided to spend more time with their family. Can't wait for the production figures to be released!

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    2. the Q2 figures came out, they've managed to reach expectation! Now, can they keep it up?

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