Almadex - annual return

I've received some comments on a post I wrote back in Jan 2017 on El Cobre (link). I haven't been following them but I was intrigued on why Newcrest were so interested (link). What has changed since my last post?

We've had some reasonable intercepts (link, link and link) over last year, so I thought, time to do an update as this project is ripe for an initial resource estimate. So here is my officially bad guesstimate:

Some gold, not much copper

So using a >0.4 g/t Au and >0.15% Cu cut-offs we get:

• ~92Mt @ 0.68 g/t Au and 0.25% Cu or 1.08 g/t AuEq (or 0.68% CuEq).
• or 2.03Moz Au and 160Kt Cu

Despite its name, El Cobre is in reality a gold deposit, but with ~2Moz @ ~0.7 g/t Au, is it good enough, especially when we have several, much larger deposits at a similar grade that are still sitting in the ground?

I want to look at the summary assay data in more detail, focusing on: 

1. Current mineralization
2. Expansion potential
3. Potential problems

I'm ignoring any socio-political issues and just looking at the summary assay data. As always, you can download the Leapfrog viewer file from here (link).

Current Mineralization and exploration potential

Here is a plan map showing the 4 areas that have been drilled by Almadex.

Plan Map

Here are a couple of pseudo-long sections (looking Northwest)

Gold

Copper

You can clearly see that the highest grade and thickest (i.e. the 'best') intercepts are from Norte, with a bit of copper at Villa Rica/Raya Tembrillo and some bits 'n' bobs in the other areas.

An interesting observation, when we compare the known targets against the soil geochemistry.

Au - left; Cu - right

We can see that the best area drilled at El Cobre, the Norte Zone has a minimal associated geochem anomalies, just a single line (Line 75800 - page 37 in the technical report), with some robust Au, Cu and Mo anomalies. I would love to see a regional map of soil Mo data as there could be a few other targets that could be interesting but where the Cu in the soils has been leached away.

Norte Zone

The Norte zone has received the bulk of the drilling and given the best results so far.

Au - far left = plan map with section lines, center = section A-A'; right = Section B-B'

Cu - far left = plan map with section lines, center = section A-A'; right = Section B-B'

We can see that Norte has been well drilled, the Au-Cu mineralization is well defined, with some >1 g/t Au zones in the core of the deposit and grading out into a lower grade (>0.25 g/t) halo. The mineralization is well drilled with most continuation to the mineralization closed off. However, the Au in hole EC-17-026 is still open to surface and to depth and would represent a good area to put a couple of holes as this could expand the 'resources' by up to 25%.

El Porvenir

Another regional target that has seen limited drilling. The standout hole has been DDH-04CB1 (drilled in 2004) that intersected 298m @ 0.38 g/t Au and 0.16% Cu.

Au - far left = plan map with section lines, Center = section A-A' - Au; right = Section A-A' - Cu

 The follow-up drilling isn't as special, intersecting several thick low-grade (<0.25% Cu) copper mineralization with a few narrow higher grade Cu-Au zones (dykes?). There may be some potential to the SW (left), but overall the grades are low and for gold discontinuous.

Villa Rica/Raya Tembrillo

We've only had a few holes drilled into Villa Rica, so it is hard to have a definitive opinion.

Au - far left = plan map with section lines, Center = section A-A' - Au; right = Section A-A' - Cu

Form the drilling so far, we can see that Villa Rica is more copper rich, with thick low grade intercepts (<0.25% Cu) with higher grade Cu and Au mineralization restricted to narrow zones - better mineralized dykes or breccias? It was also interesting to see high-grade copper at/close to surface - are we seeing some supergene enrichment?

I feel that the drilling to date shows that the potential at Villa Rica is limited. The geochem data shows a large target, but this may be an erosion anomaly (i.e. copper weathering down-slope towards the streams to the east and south).

Encinal

This is the area where Almadex hit a high-grade gold vein in hole EC-16-008.

Top left = plan map; top right - section A-A' - Au; bottom right = section A-A' - Cu

Again, we see generally thin, scattered intercepts, but hole EC-17-025 did intersect a thick zone of low grade (<0.25%) copper mineralization that could be peripheral to a larger system to the East (right).

Potential Problems

The most obvious problem could be the metallurgy. I haven't seen any mention in in the technical report about any basic met-work. It would be nice to know the distribution and style of mineralization (e.g. is the gold all in sulfides, or is there a thick oxide zone etc..) as this could have a big impact on the processing (dump leach vs milling) and recoveries. If you're interesting here is a link to a decent paper on the subject (link).

Summary

Overall, outside of the Norte zone, most of the economic Au-Cu mineralization appears to be restricted to narrow scattered intercepts. There may be potential to the east in Encinal, but nothing that is indicative of a large, well mineralized porphyry system.

For me, I can't see where the project could be expanded to >5Moz Au that could lead to development, and the regional targets don't appear to offer any upside.

Almadex - El Cobre

We got some more drill results from El Cobre last week, and I've decided to use this project as the first to do an officially crap (tm) TAG resource guesstimate.

Summary

• Small and low grade
• ~101Ktonnes copper @ 0.19% Cu
• ~640Koz gold @ 0.43 g/t Au

Let us quickly compare the market caps of a few favorite copper-gold exploration companies:

• Almadex = CND$70.7M
• Cordoba = CND$48.92
• Regulus resources = CND$75.58

Regulus and Cordoba have decent project projects with resources:

• Alacran = 53.5 Mt at 0.7% Cu and 0.37 g/t Au
• Anta Kori = 290Mt @ 0.48% Cu and 0.36 g/t Au

The assays from the drilling at El Cobre just show that they have a few moderately wide, average grade zones surrounded by low grade dirt. I thought that I was missing something. So I brought everything into Leapfrog Geo to see how much gold and copper there is.

WARNING

These numbers could cause shock, amazement and cardiac arrest. Please sit down, breathe slowly before calling your broker...



Well, that is deeply unimpressive, but not unexpected.

In general the 'massive' intercepts were nothing special. So here is the latest 3D model (including holes 16 and 17) and the spiffy spreadsheet from here (link), so you can play with the numbers and call me a retard.

So,  Almadex is expensive, Regulus is cheap.

Background rubbish

This is a global 'resource' from all three mineralized areas (Norte, Porvenir and Encinal zones), and I used the 'split assay' data which back calculated the residual grade (i.e. outside of the narrower high grade intervals), to try an give a more accurate value.



Grades are also composited over 5m intervals.

Gold

Copper

I used the following attributes to calculate the resources. the important one for non-technical people is the base range (circled) - 200 - which basically means that Leapfrog Geo uses a 200m search radius to connect the grade shells, which, for a porphyry system, is a good approximation for inferred resources.

I also used a specific gravity of 2.7 tonnes/m3.

If you want the complete LF Geo project - flip me an e-mail (theangrygeologist@gmail.com) and I sent it to you.

El Cobre - pure green!!

El Cobre, I was put onto this project by some chums in the UK, as they are getting massive erections over this project, hoping that the Poliquin's can work their magic again and make everyone rich.

The El Cobre project was spun out of Almaden Minerals as it was a bit overshadowed by Ixtaca. They've released some drill-results recently (here and here), which are either:

• Crap and deep or
• Deep and crap
• There is evidence of massive grade smearing from short, high-grade inconsistent type veins
• All the obvious targets have been drilled and hit nothing decent.

I'm also confused why Almadex are advertising this project as a 'new' discovery in their current presentation? El Cobre has been explored on and off since 1995 and 'new' project don't often have 35 holes (~7,000 m) drilled into several targets around the property.

Historic holes = yellow points; 2016 drilling = red points

We know that in the past there were different metal prices which can turn one exploration company's junk into another's treasure...

nothing special here.

Wow, those are the best of the bunch? So basically 23 out of 35 holes hit anything that graded >0.1 g/t Au or >0/1% Cu. So 12 (about a third) hit nothing at all.

Overall, those intercepts are rubbish - 0.1% copper and ~0.2 g/t Au aren't very special! That's a green skid-mark, not a gold-rich copper porphyry deposit.

Did Kermit wipe his ass (and his gold-plated cock ring) on the drill-core?

This is what Blackadder thinks....

We'll ignore the old data and focus on the recent results.

They look pretty decent, abut when we sweep away the PR BS and look at the data in 3D we can quickly see that the thick moderate grade intervals dissolve away into a series of high-grade (relatively speaking), narrow zones surrounded by low grade crap.

PR data

Some decent, thick intercepts

 Split apart assays

a bit different.....

The last hole reported, EC-16-013 is returning consistently lower grade than holes 010 and 012 and it really shows that this 'new' zone isn't very big and doesn't really have any potential to grow.

WTF! Where did all the grade go? However, I'm saving the best for last, drill-hole EC-16-008

ohh, you can't see the high grade zone? Let me zoom in a bit for you....

yup, 1.5m @ 109.5 g/t Au

When you split out the narrow higher grade zones the background grades fall through the floor, and it become obvious that all you have is a few high grade structures surrounded by low grade rubbish.

You can find a series of 3D views here (link), I've also included the geochemistry and geophysics for fun.