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Tuesday, June 16, 2020

Havieron, Greatland Gold

I apologize for the delay, basically I've been lazy and catching up with some personal projects during the 'ronavirus crisis.

Sticking with the Patterson Range, I've manage to compile the drilling data for Greatland's Haverion project, currently being drilled by Newcrest with 9 rigs.

An updated Leapfrog viewer file can be got from here (link)*, so you can have a look at the data in 3D.

At first pass, the data suggests that Greatland/Newcrest have found a good deposit, but we want to dig a little deeper to see:

  1. Size and grade potential
  2. Possible issues and questions
  3. Regional upside

Geology

Feel free to ignore this section, it is dull.

Here is a long section of the deposit, showing the Au and Cu distribution



We can see that the mineralization is a long-way down. We have ~400m of post-mineral Permian cover rocks (young rocks for WA).

We can see that the highest copper grades are found at the contact with the Permian rocks (maybe some localized supergene enrichment?) whereas with gold you do get some high-grade (>2.5 g/t Au) throughout the deposit.

We can also see that the Au-Cu mineralization is restricted to a breccia with some high grade narrow intercepts related to sulphide veins, this appears to be similar to what is seen at Telfer, just with a big difference.

Figure from GSDRPT 97 by Govt of WA


At Telfer they had stratabound quartz-sulphide reefs, it would be interesting to see if the high-grade crescent sulphide zone is actually one of these stratabound zones or formed through the deformation of the breccia into the crescent shape shown on the plan map below?

It is a very busy map

From the plan map and mineral distribution we can see the core area, where we have thick intervals of high-grade mineralization and 2 narrow limbs of high-grade intercepts continuing to the NW. Core area, probably at the nose of fold/deformation zone, with 2 narrow, but high-grade (>1% Cu) limbs striking to the NW.

G&T

We've had lots of holes drilled into Havieron, at least 60 holes so far, so I'm expecting that we should see an initial resource estimate some time this year, so taking the available data, this is what I've come up with:




You can see that at Haverion there is a bit of copper, but essentially it is a gold project, depending on the cut-off grades used, I think 100Mt @ 1 g/t Au and 0.5% Cu is a good start. Is it a bit small to develop on its own, maybe, but it is only ~50km from Telfer that the ore could be transported to the Telfer mill for processing which would minimize CAPEX.

Potential Problems

Looking through the data, one thing that I saw was a lot of grade smearing, especially in the drill-hols that intersected mineralization peripheral to the Crescent zone.



The right-hand section is going through the core of the Crescent zone and left hand section is from the NW continuation of the breccia zone, with hole HAD066 reporting the PR banner intercept of 82.1m @ 2.4 g/t Au.

In the core of the Crescent zone, I'm less concerned and the UHG veins/zones are generally wide and often surrounded by breccias grading > 1g/t Au, but the biog issue I see, and one that to me, limits the size potential at Haverion is the continuation of wide zones of economic mineralization outside of the core Crescent zone, and drill-hole HAD-066 summarizes it quite well:

  • HAD066 - 82.1m @ 2.4 g/t Au inc.
    • 0.2 @ 59 g/t Au
    • 1.5m @ 86 g/t Au
If we remove those narrow high-grade zones the grade of the surrounding breccias decrease from 2.4 g/t Au down to just 0.7 g/t Au, a 70% decrease. This suddenly changes HAD066 from intersecting a wide-zone of economic mineralization to just a couple of narrow high-grade hits in a sea of low-grade waste.

It appears to indicate that the breccias do continue to the NW, but they don't appear to be economic, and to me, limits the size potential of Haverion. It still appears to be a decent size, the mineralization appears to be open to depth (but will require very deep drilling).

Regional Exploration

Virtually all of the exploration to date has focused on Haverion but there do appear to be other interesting targets in the area that look interesting


The Haverion body is a nice magnetic high, and we can see several other similar features on the regional magnetic data shown in Greatland's presentation.

For me, Kraken looks very interesting. It has a similar magnetic anomaly to Havieron, , whereas London and Blackbeard appear, to me, to be picking out a folded magnetic unit with the metaseds of the Paterson Range rock package.

Summary

It is great discovery by Greatland Gold, there are potentially excellent synergies with Telfer, that, in my opinion, make this deposit an excellent take-over target for Newcrest. I'll be following the drill results closely and I would like to see a few holes stated to be drilled in the other targets to see if there are other breccia bodes in the area.

*thank you to Tumshie, I had accidentally made the 1-2.5 g/t Au grade shell invisible.

Friday, May 1, 2020

Winu - Exciting times in the Pilbara


As I'm still getting back into the swing of things, and I want to have a look at some of the recent discoveries being made in the Paterson Province in Western Australia.

If you want some background information on the geology and deposits of the area you can download an excellent summary on the geology and mineral deposits of that area (link) by the Geology Survey of Western Australia.

Compared to many areas of Australia, the Patterson Province is relatively unexplored. Its remoteness to the traditional gold belts and iron ore zones to the SW and W meant that semi-detailed exploration didn't really commenced in this area in the 1960s.

Early exploration in the 1970s and 1980s discovered 1 world-class deposit - Telfer Au-Cu mine (total production >10Moz Au) churning out >400Koz/year) and a couple of medium-sized copper deposits at Nifty (link) and Maroochydore (link).

So, it has been nice to read about a couple of the new, potentially large discoveries being made by Rio Tinto and Winu and Newcrest/Greatland Gold at Haverion.

We'll start with Winu, and I was surprised that Rio have been publishing a lot of exploration data from Winu (link and link), and so I've imported the data into Leapfrog to see what all the noise is about. You can get the Leapfrog model from here (link)

We have lots of impressive intercepts, including:
  • 741m @ 0.45% Cu, 0.52 g/t Au
  • 499m @ 0.4% Cu, 0.2 g/t Au
  • 439m @ 0.42% Cu, 0.32 g/t Au
  • 84m @ 0.62% Cu, 1.41 g/t Au



A nice high-grade core surrounded by lower grade mineralization. There appears to be some zonation, with an Au-rich core surrounded by more Cu dominant mineralization, with minor silver, but no-one cares about that.



We can also see that the mineralization is relatively shallow, ~100-150m depth, but with all deposits, it is important to get a sense of scale. We see so many projects that have great grades but all that quality is concentrated in a tiny package, here we don't have that problem!



Rio have drilled decent mineralization over a 2km strike length, that is impressive, we can even have stab and seeing how much Rio have found....

Pretty impressive, Rio appear to have found a large 500Mt, moderate grade ~0.5%CuEq Cu-Au deposit in the middle of nowhere. It is moderately deep (60-150m depth), there appears to be good potential to expand the mineralization to depth and along strike, so I will be see how this project evolves.

However, one big question to ask is - is this project big enough for Rio? I would expect that they would want something that is 2-3 times larger for development.

Next week - Havieron!

Some geology rubbish


In many other mineral districts companies have applied Zipf’s law to gauge their maturity - i.e. are there other deposits that have yet to be found.

A simple rule of thumb would be the 80:20 rule - 80% of the resources are found in just 20% of the deposits or 2-3 big deposits, a few medium-sized, and and loads of tiny ones.

Here are some examples from Davies el al (2018) - reference at bottom of post.

Yilgarn Au deposits

Some massive deposits, quickly dropping down
You can potentially use this plot to see if there are any gaps


Lets return to the Paterson Province



I've plotted on Telfer and Winu against a Zipf curve.

It is very interesting, if this area follows the Zipf curve, we can see that there could be a couple of 2-3Moz Au deposits and maybe 4-5 >1Moz Au deposits lurking around. Lets see how Haverion fits in.

It will also be interesting to see if someone will buy Telfer as Newcrest are open to offers (link)


References


Davies et al (2018) "Entering an immature exploration search space: Assessment of the potential
orogenic gold endowment of the Sandstone Greenstone Belt, Yilgarn Craton,
by application of Zipf’s law and comparison with the adjacent Agnew
Goldfield" in Ore Geology Reviews Volume 94, March 2018, Pages 326-350


Wednesday, April 1, 2020

Pretium - Brucejack production

So why should bad news be spread over a single post, we looked at the 'improved' resources, so now let us look at the mine production figures

Pretium have done an excellent job with the mill upgrade
 

It has been consistently producing 5-10% above nameplate capacity, and they ramped up throughput to 3800 tpd on schedule.

Recovery is still excellent:

However, we see that mined grade is still way off the original Feasibility Study, approximately half that calculated by Tetratech.

 Understandably, this has had a massive knock-on effect to the Au production.

We can see that it is way off, but why don't we plot on the latest reserve grades.


You can see now that the new reserve grades is very close to the actual mine grades. It will be interesting to see of they can keep at this level.

It will be interesting to see if Tetra Tech or Snowdon have any comments on why their 2013 and 2019 resource calculations were so different to mine production and latest resource estimates.

Pretium - Getting back into the swing of things

Sorry I've been away for so long, I've been working on a large project that has taken up all of my free time.

I'm going to run through a few old projects, just to get up to speed

1st up, that old favorite, Pretium Resources, we've had a lot of good times at Brucejack

  • A resource update (link)
  • 2019 operations update (link)
  • CEO resigning (link)
Let us first look at the updated resources!

TLDR version

What a fucking disaster!

Long version

We'll start with the good news

Tonnage went up, apart from a small decrease in reserves!


That's it, everything else was a disaster!

Grade



A massive decrease, the latest resources are virtually half that in the original PEA

Almost exactly the same grade as the original resources calculated in 2013


Contained Gold

This has given a small, 3Moz decrease in contained gold










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.













Friday, October 25, 2019

Westhaven - Shovelnose

I've been wanting to compile the data for Westhaven's Shovelnose deposit for some time. They keep publishing decent grades and thicknesses (link, link and link), and I wanted to see how the data holds together.

Shovelnose is a good exploration story. Work commenced on the property in 2011. In 2016, drilling identified low-grade disseminated mineralization in silicified rhyolites in the Alpine and Tower zones. It was recognized that this could be the upper part of a high-grade epithermal system, which was discovered in 2018.

So, using the previous post on epithermal deposits as a guide, we'll look at the the data to see:
  1. Number of mineralized structures
  2. Size potential - vertical and horizontal extents of the mineralization

Mineralized structures




Westhaven tell us that they have 2 principal veins and maybe splay, but when you put the data in 3D, the picture becomes more complicated.

Red and orange = 2019 DH; green = 2018 DH

However, if you look at the silver, it appears to be restricted to the core of the mineralized structures.

Silver restricted to core of veins


From this I've created a series of veins. It is quite complicated, there are many ways that you can join the dots, but we can see 2 principal structures and several splays and parallel veins.

potentially multiple splay veins between principal structures

We can also see that the thickest and highest grades appear where one of the splays intersects the main vein.

Mineralization Extents

Vertical

Note: My elevations are based on the Government of Canada 50K topomaps (link), and will vary by a few meters from Westhaven's surveyed drill-holes and collars

We know that in LS-Epithermal deposits, the good grade mineralization is restricted to a quite a tight vertical range. In earlier presentations (link), they used to include this slide:

just a 100m extent..

According to their geologists, the decent Au mineralization is found over a ~100m vertical range, from 1250 to 1150, which isn't very special, but with the power of excel, I disagree with them:

Au



Please note - I've clipped the >50 g/t values to show a bit more detail for the <10 g/t Au area.

We can see that the majority of the >3 g/t Au samples fall between 950 and 1200m, and a higher grade (>5 g/t Au) core between 1000 and 1150m.

So we have a 250m apparent vertical extent to mineralization. Not bad

Ag



Please note - I've clipped the >300 g/t values to show a bit more detail for the <50 g/t Ag area.

We see a similar distribution for silver.

Horizontal

I've broken out the horizontal extents by the two principal veins. We want to the extent of the >3 g/t mineralization and if there are any high-grade (>5 g/t Au) zones that are can be extended or infilled (hot holes drive share-prices)

Main Vein



We can see that the majority of the >2.5 g/t samples fall within a specific area that appears to have a 500m horizontal extent and a 100-200m vertical extent.

We can see that the down-dip extension to mineralization appears to be open, but you can see how variable the grades are, we have several holes that hit minimal Au adjacent to hole SN18-25.

Secondary vein



On the second vein we see that the >2.5 g/t zone extends for at least 400m along strike and a 100-120m vertical extent. We can see that the zone appears to be open along strike, so there is good potential to extend this zone. We also see a consistent zone of >5 g/t Au mineralization (~150m x 120m) in the center of the vein.

Conclusions

So far Westhaven have discovered a decent epithernal system, with 2 principal veins with a couple of reasonable sized zones of mineralization. From the long sections we can see that the high-grade (>2.5 g/t Au) zones are well drilled (~50m drill-hole spacing), and the lateral extents appear to limited.

So, where do Westhaven go now? They could continue drilling the known areas and pumping out PRs with decent intercepts, but after a while they'll need to come up with a resource, and from my back of the envelope calculations the current drilling have defined around ~700Kt (assuming an average 2m vein width), which isn't enormous.

Therefore, it is nice to see that Westhaven are looking for new areas (link) to explore to build on their initial discoveries to see if they can find new veins and get the project big enough to attract interest from bigger companies.

You can get my 3D model from here (link)