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Thursday, November 14, 2019

Garibaldi - Feeder

Wow, Garibaldi lots of drill results from Nickel Mountain (link).

Note: I'm going to using NiEq% grades using a ratio of 3.2% Cu = 1% Ni. 
I haven't included any of the other metals as the PGEs, Au and Ag don't always appear to be associated with the massive sulfide intervals and as I don;t know their recoveries, I don't know if an economic amount of the metals will be recovered and paid for by any smelter.

To no surprise, all of the holes are drilled in the same 300m x 200m area that we've all come to love

I added the scale bar
You can get a 3D model from here (link)

Results

Drilling has focused in 3 main areas

  1. NW Zone - Holes EL-19-55 to 61
  2. Discovery Zone - Holes EL-19-51 to 53
  3. Deep Feeder zone - Hole EL-19-54

NW Zone

Seven holes were drilled into this zone to see if the massive sulfides in the NW zone link up with the sulfides mapped at surface in the NE Zone. 


You'll see that the surface sulfides are found at the contact between the E&L Intrusion (purple) and the Hazelton Sediments (light green), 


On the section that the holes generally hit a narrow massive sulfide zone with a small (up to 15m core length) zone of disseminated (<1% NiEq) mineralization above it. Holes 55 and 56 didn't hit any massive sulfides, and suggests that the system is dying to depth in this direction.

Discovery/NE Zones

For the discovery zone I'll write about 2 areas - Upper and Lower sulfide zones


Lower zone = main Discovery massive sulfide zone
Upper zone = small sulfide zone found ~25m above the main zone

Lower Zone

Here is a long section through the lower/main Discovery zone, I've clipped out the spurious information
We an see that hole 54 was a ~20m step-out from the massive sulfides hit in hole 53, and hit nearly 5m of massive sulfides grading 6.5% NiEq.

What is also interesting is that holes 17-12, 18-37 may not have been drilled deep enough to intersect this zone. Maybe there is a (small) chance that Garibaldi could re-enter these holes and drill them an additional 50m to check.

Here is a plan map of the Lower Sulfide zone. It is a busy figure



The known sulfide mineralization i about 130m x 30m and if it is 8m thick, we get:
  • 130 x 30 x 8 x 4.5 = 140,000 tonnes of material
Still very small, to get a 1Mt deposit, at similar thicknesses we need a footprint of
  • 1,000,000 / 4.5 = 220,000 cubic meters
  • 220,000 / 8 = 27,780 m2
  • or a zone that is 30m wide and 930m long (or a strike length that is 7 times longer than the current footprint.
It is small! 

Upper Zone

Drill-hole 51 hit a narrow zone of massive sulfide mineralization ~25m above the Discovery zone. It seems to line up with other massive sulfide occurrences in early drilling.


However, drill-hole 18-24 didn't hit anything on the up-dip continuation of this zone, so suggests that it is a small, localized sulfide body.

Deep Feeder

Hole 54 plunged the depths of Nickel Mountain.

It got a 10m zone of <1% NiEq, but nothing special. This hole was drilled to follow-up on the small zone hit in hole 17-01 (they are ~10m apart). Personally, I think that rather than being a feeder zone, what we may be seeing is the effect of s chunk of Hazelton Group sediments in the Nickel Mountain Gabbros that, due to a change in local chemistry, has led to the local precipitation of sulfides from the gabbros.

We can see on the section accompanying the press release (link) that there is a close spatial relationship between the Hazelton group and mineralization.


However, most of these points are rhetorical, to me, I can't see the evidence from the drilling that supports a big Ni sulfide system at Nickel Mountain.

I did an update to the Officially Bad Resources, make of them as you want




Monday, November 4, 2019

Pretium - coming back to Brucejack

I've ignored Brucejack for ages, but why don't we return to an old favorite.

Since I last put out a post we've had 3 quarters of production and a new resource calculation.

Reserves and Resources

Why don't we compare the Reserves and resources for Valley of the Kings (VoK)*.

Original Dec 2013 resources




Updated April 2019 resources



*the West Zone resources hasn't been updated and isn't the current focus for production.

There are some slight differences

Tonnage



Reserves stayed about the same, M&I resources dropped by 10%, which is isn't much when you see that they mined >1.5Mt of ore (to end of 2018) since the 2013 Feasibility Study. However, we do see a big drop in inferred resources.

Headgrade


This is where things get slightly less polite.



We see a moderate drop in head grade for the Reserves, a slight decrease for M&I resources, but a big drop in inferred grades.

We can't say this is due to Pretium mining high-grade ore in 2018 as the average head-grade for 2017 and 2018 was only 10.1 g/t Au.

Contained Gold

These changes in tonnes and grade have had a big impact on the contained gold.


Even is we take into account that the mine produced ~0.5M oz in 2017 and 2018, that is a massive decrease in resources, they have lost nearly a quarter of the contained gold at Valley of the Kings.

The question is - is the deposit intrinsically hard to model accurately (yes) or was the 2013 model overly optimistic (yes) and didn't fully understand the control and distribution of the gold.

2019 Production

This is easy, production to date is below expectations, even Pretium cut their 2019 outlook from 390K-420K oz Au down to 340K-350K (40K-80K or ~20%), which caused a nice share price collapse.

So why don't we have a look at the wreckage...

Here is the April 2019 LOM grades by year...
We're still in 2019!
Tetratech tell us that Pretium will be mining ore that is 10.6 g/t Au in 2019

Pretium actually mined.....8.9 g/t Au


But they did get better, cranking the grade from 8.7 g/t Au in Q1 to 9.1 g/t Au in Q3.

Awesome job!! Just 1.7 g/t or 16% below expectations.

From their pessimistic production outlook (slashing production by ~60Koz), we can have a go at estimating the Q4 numbers.

We can calculate the planned Q4 production

  • Est. Annual production - 340-350Koz or 345,000 (taking the mid-point)
  • 2019 production to date = 258,168 oz
  • Q4 production = 345,000 - 258,168 = 86,832 oz

We can try and calculate the average head-grade

Assumptions

  1. Mill throughput = 3600 tpd (still ramping up to 3800 tpd)
  2. Recoveries 97%

Tonnes milled = 3600 x 90 = 324,000 tonnes (assuming 2 days of shutdown)
Ounces produced = 86,832 x 1.03 = 89,437 (removing the 3% loss in the mill)

Q4 average head-grade = (89,437 x 31.1)/324,000 = 8.6 g/t Au

Even if Pretium hit the upper end of the estimated production, the grade only increases to 9.1 g/t Au.

The mine is very productive and highly profitable, but it is still under performing, by 10-15%, its new and improved feasibility study, that dropped the grades significantly. What is interesting for me is that since commercial production began, the mine head-grade has sat stubbornly around 9 g/t Au. Is this the 'real' grade of the deposit?

One observation I had in an earlier post was that I was concerned that as the mill was expanded, we would see a drop in head grade.



There is a trend suggesting that, but I think it is a bit too early to tell.

I know this post is a bit negative, but the mine has consistently failed to meet expectations, I know that I will receive a lot of posts saying that the share price is up, but the rise in gold to US$1500/ounce has helped to mask some issues with the mine.



It is still a fantastic mine, and I'm sure that once the issues are resolved, or at least understood, an if gold price keeps creeping up, I would expect a major company to look very hard at buying Pretium.