Evrim - oh dear

I was surprised that we got a PR from Evrim, I was expecting that they would wait until the new year to publish results, like our chums at GGI (link)!.

But they did publish the initial results, and they were....

not very special

how can we put this....not quite what the market was expecting...

ouch!

We could amuse ourselves with the fact that the results weren't anything special (I'll be updating a LF model over the weekend). We have a narrow zone of moderate gold mineralization at surface with a interesting (from a scientific point of view) copper zone at depth.

Oh dear

However, I'll turn your attention to this PR (link). This is where Evrim recieved ~$7.2M from Newmont, and it also tells us that they have to spend 80% (~$5.8M) of that to advance Cuale.

Will we see a massive amount of drilling at Cuale or a series of conversations to free up these funds to be spent elsewhere?

Welcome to exploration folks!

Silver Viper - forked tongue stuck in your mouth?

Hello Silver Viper minerals, how did the drilling go at Clemente?

You mobilized rigs back in October 2017 (link), started the 2000m program a couple of weeks later (link), and since then absolutely nothing, nada, zilch.

ohhh, sorry, my mistake, you've dropped the property (link), were the results that bad? Pro-tip - you probably want to include that PR on the website.

I wonder if we'll see the same with the drilling at La Virginia? You've told us that you have mobilized the rigs (link) a couple of weeks ago, and so we should be having a "drilling has started" PR sometime next week...or are they already turning?.

BTW, if you do get something interesting, please don't repeat your mistake with Orex Minerals and forget to raise money when the share price was high....

Bitch raising money at $0.08

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

Maple Syrup....

mmmMMMMMMmmmmm

uh.....uh....uh.....again...again....mooooree....come on, don't stop...oh....oh...YES... YES...YES...uuuuhhhhh...uuuhhh...ohhhhh...aaaarrghhh

I just love spreading maple syrup on my toast, smearing it to cover all corners so that with every bite I get that sweet golden taste between my lips.

but the other thing that is great to smear are gold assays....

it only took the gold from one Junior Exploco PR to kill this woman....

Maple gold recently reported some excellent results from Douay (link), but again we see that the BS-is strong with this one....

Wow, massive gold zones....

thick intercepts.....

Here is a leapfrog view on the holes in this PR (link), I'm hoping to have time to compile more data from it...


Here are the back calculated grades, removing the impact of the high-grade intervals.

aaaaand now they're gone

As we can see that most of the gold is found in a narrow high-grade zone and the majority (a small 137.2m) grades a lot less than 1 g/t Au.....

and here it is visually....

lots of nothing...

So all the gold disappears,  imagine what would happen if a handsome, chiseled, well-groomed newsletter writer had expressed some concerns with these results.......

Pretium - an exercise for you

This is just a quick response to a comment by Tom. I originally created this Leapfrog viewer file for a previous post on Brucejack, focusing on a small area of the mine that I have put into Leapfrog.

Original post here - link

Download the Leapfrog viewer file from here (link)

The key slides are:

Slide 2 - The PR grades (i.e. the smeared grades) - nice juicy think gold intercepts

Gold fecking everywhere!

Slide 5 - Split grades (i.e. high-grade intervals removed and background grades back calculated) - now more of a needle in a haystack gold hits.

Oh no, its all gone!

Your job is to join the pink bits. Have fun!

Evrim - a more detailed view

So I've compiled the data from the Cuale trenches, the Leapfrog viewer file is here (link)

left = trenches colored by number; right = trench Au assays

I've drawn on a guesstimate >1 g/t Au contour. We can see that this zone has approximate dimensions of 250m x 125m.

Why don't we focus on the very high-grade part of trench 4

Welcome to the nugget effect!

We can see that the ultra-high grade assays in trench 4 aren't repeated in the corresponding/adjacent samples in Trench 1. We can also see that they are less than 5m apart and that ultra-high grade zone is very small (6m x 6m).

We can also see that there are only 4-5 samples containing >30 g/t Au, and in the last post we saw the dramatic effect they had on the overall average grade for Trench 4. If this was drilling data, we would expect a top cut to been applied (here is a great presentation on cutting/capping high-grade samples - link)

Here is a semi-log graph of the assays - basically we're looking at how many samples (y-axis is frequency) occur within a certain assay range.

For example: In the chart below, the highest bar tells us that 38 samples returned assays between 1.5 and 2 g/t Au.

We seem to have 2 populations of samples, one centered ~1.5 g/t Au (red dashed curve) and a second at 0.1 g/t Au (blue dashed line).

So, we can see that we have very few (only 4) above 30 g/t Au, so maybe a 30 g/t top-cut could have been applied. If we do so, this is the impact:

• Trench 4 now returns 106.2m @ 3.74 g/t Au - still good, but a >70% hair-cut

What else can we see? Look at the orientation of the trenches. They have 2 main directions:

1. Trench 1 - NE-SW orientation
2. Trenches 2, 3, and 4 - NW-SE orientation

Why did Evrim choose those orientations? Are there any clues?

streams = blue dashed lines

Have a look at the streams.

red and blue dashed lines = possible structural trends

Are there any other clues? Here is the Mexican Geological Survey's (SGM) map of the area (link). We can see that Cuale is in the La Gloria district.

Have a look at the San Juan Prospect (which I think is within the Evrim mineral concessions). The SGM have mapped an almost vertical NW-SE (125 strike) trending vein, and in the accompanying geological report (link - in Spanish), we also have a photo

vein - brown thingy next to the dude, probably a geologist as he is incredibly brave and handsome

I'm not saying that the mineralization at Cuale (Cerro la Gloria on the SGM map) is exactly the same as in the adjacent San Juan mine, but it gives us some additional information to make a basic, but useful interpretation from the data.

Now we can see that trenches 2, 3 and 4 are highly likely to have been excavated along some structures.

If you want to have some more fun, you can do some indicator kriging back of the envelope calculations to have a high quality resource calculation guess at contained gold.

• Dimensions > 1 g/t Zone = 200m x 120m x 100m (depth extent)
• Specific gravity - 2.8 tonnes/m3
• Average grade = 1.5 g/t Au

Tonnage = 200 x 120 x 100 x 3 ~ 7.2Mt

Contained gold = 7,200,000 x (1.5/31.1) ~ 350Koz Au

These numbers are complete BS, but can be an interesting guide to potential size. Fingers crossed that they get massive thick intercepts of >1 g/t Au!

Pretium - everything is great

Good news, Pretium at the BMO Conference is telling us that everything is great (link), no need to worry. Production at Brucejack is swell, and everything is going to be super-good after the mill expansion. For fun, they are looking for the source porphyry, because, why not.

We also got the Brucejack ramp up production figures, you know, the ones where grade and ounces produced went down. We actually get to see the 'official' head-grades, and they were worse than Otto calculated (link).

Tonnes up, production down - Pretium going for the win!

They also included a nice long section of the Brucejack block model, which was interesting.



The reserves aren't nice and consistent, there are distinct area of high and low mineralization, but there is an awful lot of the Proven Reserve blocks that are green and yellow (i.e. 5-10 g/t Au).

This isn't uncommon, but if Pretium want to maintain consistent production level, they'll need to be very good at balancing the production from high and low grade areas (mine scheduling), and for me, the erratic nature of the mineralization is the reason why Pretium gave such a huge range for the H1, 2018 production. They just can't quite nail down the grades.

TL:DR version - it is going to be hard to consistently maintain a head-grade at 14.5 g/t Au.

I apologize for the next section, it contains a very naughty word. If you are sensitive, please go here (link)

It would have been interesting to have seen a a slide on reconciliation to see why they had missed their targets, was it due to:

• Poor reconciliation - mined graded not equaling reserve grade
• Slow development - unable to access proposed 2017 production areas and forced to mine peripheral, low grade zones.

We all know it is grade reconciliation, hence the reason they are doing a new grade control program and drilling the stopes on 5-7m centers. However, the slide that concerned me the most was this one (slide 17)

According to Paths, Pretium are retards, and are actually using the Reserve figures in their own technical reports (who the feck does that?!?), and are projecting that after the mill is expanded, the 2019 production will be:

• ~580,000 oz Au per year 
• A head grade at the Reserve Grade - 14.5 g/t Au*
• AISC @ ~$570/ounce

*if you plug the numbers into excel you get a recoverable grade of 13.2 g/t Au or a recovery rate of 91%

So, to do this, all they need to do is solve the grade control issues, improve mine scheduling, improve recovery, and increase the underground development. Nice and easy.

If they don't manage this, at 3,800 tonnes per day each 1 g/t decrease in head-grade means a drop in production by 44,000 ounces, or $57M decrease in revenues. That is a lot of money, especially if you want to do this:

Alacran - Sting of the Scorpion

PDAC season is in full flow, and lots of companies are pushing out press releases to telling us that they are great, everything is going super-well and please don't ignore us and sell our stock as we have no real news.

One of my favorite pig in lipstick press releases was from Cordoba Minerals (link), not only announcing an updated resource for Alacran, but telling us that theyz got cobalt az well, m8.

Fuk uz Forst Cobalt

We'll ignore that and look at the resources.

Original, Jan 2017 resources

hard to read, but resources calculated at $1300/oz Au and $2.50/lb Cu

New and improved resources:

@ $1400/oz Au and $3.15/lb Cu

I liked the interesting metal prices used, Cordoba was a little generous with the gold price, but why don't we do some maths and see how the project has grown with another successful year of exploration.

I mean, look at that, they increased resources by ~27%. That deserves a good hug and a nice pat on the back, we'll ignore the fact that as the tonnes have increased, those nasty little copper and gold atoms have been efficient with their New Year resolutions. Those pricks have been on a diet!

and given the deposit a stunningly unimpressive negative increase in contained metals.

• Copper 
• Grades dropped by 22%
• contained metal stayed essentially the same
• Gold
• Grades dropped by 32%
• contained gold dropped by 15% or 94,000 ounces

So, basically you've made Alacran worse. Well done!

SolGold Update

DISCLOSURE: I own shares in Sol Gold, and before you ask, I'm irritated that they did a financing at GBP0.25p.

Well we are moving into the home straight, we've been promised a maiden resource by the end of the year (link), so it was nice to get some more drill results to have a look at. You can download my 3D model here (link) and open it in Leapfrog Viewer.

Obviously, we are all waiting for the initial resource calculation that was promised by the end of the year. We've only got a couple of weeks before the Christmas party and tax sell-off season starts, so it will be interesting to see if SolGold can deliver.

Summary

• Infill holes, duplicating and extending to depth known mineralization
• Is hole CSD-17-028 hinting at a core of a system just to the south (currently being explored by hole 030)?
• Hole CSD-17-026-D1
• Similar grades to adjacent hole CSD-14-009
• high-grade lower zone (from 1150m) looks to be quite consistent
• upper zone looks to be quite narrow, and may link up with the high-grade zone in hole 14
• Hole CSD-17-028 - drilled between holes 021 and 022, similar grades and thicknesses

Geology Drivel

Even though these results are groundbreaking, just extending and exploring known zones, they do appear to show that in there could be more than one grade center at Alpala. I also hate that they don't highlight where the holes are located.



I not going to say that there are 2 porphyry centers (I haven't seen the drill-core or any interpretative geological plans for the project), so I've done some doodling on the map that accompanied the PR.

WARNING: Geology doodles by an insane, de-bearded geologist

So I'm quite excited about holes 30 and 30-D1. If they come back with some decent intercepts my stupid idea  alternate interpretation could be correct, it could have a nice positive effect on an undated resource calculation in 2018, as these holes won't have been completed by the time the initial 43-101 resource is published in the next few weeks.

If we look at the holes individually, and again, I only have the data in the press release to work with, so it is incomplete and a best guess.

Hole CSD-17-026-D1

We can see that hole 026-D1 hit a decent zone of material grading >0.7% Au and >0.45 Cu. My feeling on why the Au zone appears thicker is a effect on how the data has been reported, and we would see a >1g/t zone from 1400m to 1550m but it wasn't split out in the PR.

Hole CSD-17-028

Hole CSD-17-028 was drilled between holes CSD-16-021 and 022, so I'm assuming that it was an infill hole to provide more confidence in these intercepts. It returned very similar results to hole 021.

Resources

I've hidden this at the bottom of the post. I'm not 100% (or even 50%) confident in my officially bad resource guesswork for Alpala, but I wanted to include the table to see what numbers I come up with to see how SolGold will get to their:



I regard this statement as a BS, the recent drilling didn't do much to their resources, and I don't know why they are mentioning that they want to define a billion tonnes at 0.9% CuEq at a 0.3% CuEq cutoff. That puts it firmly in the uneconomic category for an underground block-cave.

So according to Macquarie, for a 0.9% CuEq block cave to give an IRR of 15%, it will need to have Cu at >US$3.5/lb and Au >$1750/oz.

Personally, I'll be looking at the size and continuity of the >1% CuEq cutoff resources.



So, I'm not sure that they'll get to their billion tonnes, but I'm convinced that my model is under reporting the narrow-high-grade zones.

Sol Gold Update - dark clouds on the horizon?

DISCLOSURE: I own shares in Sol Gold.

Sorry, I've been a bit snowed under with work, here is a quick update with the new drill holes released by Sol Gold a couple of weeks ago (link) and last week (link).

I've also done a complete rebuild of the model to make sure that it matches SolGold's maps as accurately as possible.

Summary

1. Lots of grade smearing in latest PR
• Hole 023R-D1 - 254m @ 1.16% Cu and 1.93 g/t Au, surrounded by material grading less than 1% CuEq
• Hole 024-D1R - 512.9m @ 0.53% CuEq, in reality is 160.8m @ 1.19% CuEq surrounded by materail grading less than 0.5% CuEq
2. High-grade (>1% CuEq) mineralization restricted to very narrow zones - SolGold even tell us that these zones are 2-4 times narrower than the reported intervals
3. Bulk of the rock at Alpala grades <1%CuEq, which is probably uneconomic to mine
4. I haven't updated my calculations as I don't have sufficient data quality (due to grade smearing) to produce an accurate number.

Background 

Just a quick summary on how the model was created and how the data was extracted, I know this is probably repeating a lot of what you already know, but it is important as it shows how results can be skewed.

All data is from the public domain (i.e. SolGold Press releases and presentations).

This means that I have to estimate hole locations (I georeference the plan maps), direction and dips. They are moderately accurate, but not perfect. there is a lot of guess work to make the hole line up as closely as possible.

The assay data comes from the Press releases, and I run it through Corebox's excellent Drill Hole Interval Calculator tool (link) to back calculate the residual grade of the rocks that surround the high-grade intervals. This is done to see how much of the grade is in that narrow high-grade zone, and if the surrounding rocks actually contain enough metals to be mined.

You can download the latest 3D viewer file from here (link), but you'll need to download the latest Leapfrog Viewer program to be able to open it.

When you look at the press releases for the Apala drilling you need to be thinking the following:

1. How are the results being presented in the best way possible
2. How will the deposit be mined

To be logical, let us start with point 2 - how are they going to get the crap out of the ground?

Here is a section through Alpala.

Decent mineralization starts at ~700m below surface, so if it gets mined, they will be doing it from underground. If used several images from a report written by Macquarie Research on Block caving (link).

Large scale underground mines have several 'unique characteristics'

• They require a higher CAPEX than a similar sized open pit operation
• Have higher operating costs
• They take longer to develop and ramp up to full production
• 5 years of underground development
• 5-7 years to ramp up periods

As a result, they are much more sensitive to changes in metal prices and Capex. However, they can have better returns on invested capital compared to open pits.

However, Alpala is an exploration stage project, we don;t need to get bogged down by all that engineering crap. However, their repot had this figure.

Think of this as a reference diagram, plot on where Alpala should sit along the red lines.

Which line do you choose? Well, look at the assay tables in any of the press releases and you see how SolGold have calculated their CuEq grades



So, draw a line on it for US$1300/oz for Gold and $3/lb for copper, and then a horizontal line back to the Y-axis (CuEq%) to see what grade Macquarie think you need for a viable underground block-cave greenfield project like Alpala.

Here is my version:



So ~1.5% CuEq for Alpala to be a standalone, viable project.

Point 1: The results 

Why don't we now look at the assay table from the latest PR, reporting the mineralized intervals from holes 023R-D1 and 024-D1R.



At first glance, everything looks awesome. Hundreds of meters of decent grade material. I mean EVERYTHING in hole 23R-D1 is ore, hole 024-D1R is less good....

However, there are some clues that not all is as rosy as being presented.

Why are they giving intervals at different cut-off grades?

To me, this mean that that they a narrow very high-grade zone surrounded by low grade crap.

Why don't we back-calculate the residual grade

Hole 023R-D1

They have decent stuff from 958m to 1212m, but the rest is crap.

Hole 024-D1R

Same story here, but then again, they drilled the same zone hit by hole 024

For these 2 holes, only a very small portion (36% for hole 023R-D1, and none of hole 024-D1R are good enough for an underground mine. Most of what they drilled in these 2 holes is mineralized waste.

They even tell us that the mineralization is narrow in the text below the table. it says: 

This means that SolGold's geologist believe that the true with of the intercepts are 2-4 times narrower than the interval length reported in the table, so:

• 745.1m @ 1.29% CuEq mean that the true width of mineralization is between 186.3 to 372.55m wide.

How does this compare to the rest of the drilling? Do we see similar narrow, very high-grade zones surrounded by mineralized waste?



Very hard to see on the plan map in the press release, but fortunately with the power of Photoshop, we can lighten this image. I've chucked on my interpretations for fun.



The most consistent mineralization is around holes

Here is a zoomed in part of holes 15, 16 and 23 which is where holes 29, 29D1 are all heading, but that zone only has a 200m x 150m horizontal extents. The rest of the high-grade is quite scattered and look to be dikes.

horizontal distance between the 2 lines = 35m

We can see the individual assays, they are a bit blurry as I've zoomed in really close, but you can see the individual assays and you can see how quickly the grade drops off around the high-grade samples.

Look at the plan map, how when you look closely, most of the >1% CuEq mineralization is restricted to narrow zones, that are hard to join together. there doesn't appear to be a solid, high-grade core, just a lot of narrow high-grade dykes surrounded by mineralization that would be marginal if exposed at surface, but at >500m depths, it will never be touched.

I'm a bit disappointed, and gut feel is that the actual resource will be significantly lower than what the market expects, as these high-grade zones aren't consistent and don;t appear to join up.

However, I invested in SolGold for the other targets, I knew that Alpala was deep and probably not good enough as a standalone deposit. I want to see them drill somewhere else.

If you want the full Leapfrog project - e-mail me at theangrygeologist@gmail.com and I'll upload it for you

Cardinal BS

Good news everyone, Cardinal Resources didn't drill a nasty, zone of continuous gold mineralization (link). How unfashionable is that!

ignore the gaps, they contain nothing important

Like a nerdy kid trying to be cool, they decided just to list the good stuff, they accidentally (I'm sure they weren't trying to deceive anyone) only reported just the narrow gold zones and then added them all together into a single, easy to digest table.

No BS here (link to the 3D model)

I like the fact that they didn't need to deceive anyone, but that they felt that they had to.

Cascabel - Latest Results

We got results from 2 more drill-holes from Alpala last week (link).

I've plugged the numbers in and this is what it has done to my officially bad (tm) contained metal calculations.

Copper

We have a 14% increase in tonnes and an equivalent increase in contained copper

Gold

Here we have a 10% increase in tonnes and 8% increase in contained gold, so a minor (1%) decrease in grade.

This is some very unfashionable results, normally companies like to drill huge amounts of low grade and amaze everyone with the total contained ounces of gold and tonnes of copper.

So where did these results come from?

Starting to look quite big

Hole 25 was drilled 200m to the SE of hole 19, and below historic hole 13-003 that terminated before it hit the main zone Cu-Au mineralization. It hit a 100m zone of high-grade mineralization from 772-872m but quickly passed into low-grade/marginal material.

It suggests that there could be better mineralization to the NE, maybe an additional hole could be drilled from same platform to the NE?



Hole 24 was disappointing, it was drilled 500m to the SE, and hit a narrow (~50m true width) interval grading 0.65 g/t Au and 0.63% Cu, surrounded by very low (<0.2% CuEq) grade mineralization. It looks like hole 24 just clipped the very edge of Alpala mineralization.



You can get the LF viewer file from here (link).