Tuesday, December 20, 2016

Alexco - some BS drilling

Wow, Alexco, some amazing results from Bermingham (link)

  • 11.1m @ 6,477 g/t Ag
  • 16.95m @ 4,375 g/t Ag
  • 24.98m @ 835 g/t Ag
Those results should give you some nice reading to help to the silver bugs to battle the purple-headed yogurt slinger, or date Rosie Palm and her five sisters.

Hey, wait a sec, those intercepts are a bit wide for a district well-known for narrow vein silver mineralization. Lets look at the true widths.
  • 11.1m 3.98m @ 6,477 g/t Ag
  • 16.95m 7.16m @ 4,375 g/t Ag
  • 24.98m 6.89m @ 835 g/t Ag
Darn, that's a bit of a diet, what the heck has happened here? I mean, there have been 1 or 2 holes (OK, 176) drilled into Bermingham. To the 3-D machine (link)!
Red spots = DH data from the Dec 06 release, black = early drilling
Let us filter out the old crap and just look at the new data, We can see that most the holes go from left to right (direction), but why are those in the middle doing int the opposite direction, parallel to the veins? Seasonal variation?

green lines = hole traces, grey solids = modeled veins.
It is a bit easier to see on some sections

No BS drill-holes (red = Bermingham veins, cyan = Bear vein, Blue = Aho vein)
See that the drill holes intersect the vein at an almost perpendicular (90 degrees) angle.

Here is a section with those 'special' holes

These very high grade holes have orientated to drilled straight down the middle of the Bermingham and bear veins. We can also see that adjacent holes, did hit some good grades, but are much narrower. 

Alexco have known since 2011 that the veins all dip to the southeast, so why were these holes (approx. 950m) in the opposite direction to all previous holes? 

I'm guessing that Alexco couldn't wait until April 1st to pull such a good wheeze on their share-holders or maybe it was a generous Christmas gift to give them a nice festive cheer with some obscenely high-grade intercepts that do absolutely nothing to the deposit, they don't increase the tonnage as they have just been drilled through areas that have already been drilled before.

This is BS, Alexco, why waste everyone's time and your money with these joke drill-holes?

Friday, December 16, 2016

Defiance Silver - San Acacio project

San Acacio is one of those projects that keep floating around and like one of those irritating dumps you have at your girlfriend's house that keeps bobbing up to surface to rear its ugly head.


Just avoid it.

  • Defiance can't afford the property
  • They can't raise funds to explore the property properly (just some token drilling in 2014/15)
  • The resources are small (15Moz Ag) and low grade (182 g/t Ag).
However, I can't find anything except a summary assay table for the 2014 and 2015 drilling results, so here is a message for Defiance:

FFS, forget the YouTube channel, we're not interested in seeing old dudes pointing to churches or expansive panoramas of Rick Tschauder, what we want are some (any!) maps, like:
  • A surface geology map - simple ones with big red lines saying "vein here"
  • A map (or two) of where your holes are located
  • Some geology sections - the Silver Standard sections are now nearly 20 years old
Even the most retarded junior exploco can give us a fecking map, so why can't you?

Technical stuff

Let us look at how the project has evolved over the years:
  • Silver Standard (1996) Inferred Resources - 2.5Mt @ 182.4 g/t Ag = 14.5Moz Ag
  • Defiance Silver (2015) Inferred Resources - 2.9Mt @ 181.9 g/t Ag = 16.9Moz Ag
Not much for nearly 2 decades of work for a 'high-grade' deposit located in a world-class silver district!

I've ignored the 'gold' credit as it is essentially nothing and will be lost either in processing or to the smelter.

I was surprised amused to read several PRs telling us how Defiance have been 'great' at reducing the property payments (2014 (link) and 2016 (link)). by pushing them all (almost $6M) back to 2018. I hope nothing happens to silver prices that could make it difficult to raise funds...

I've broken the technical part into 2 sections

1. The Rocky Bit

I've brought the Silver Standard data (DH, trench and UG samples) into 3D (link) to see if there is anything interesting, but as Defiance have kindly included absolutely nothing of any geological value in their press releases (not even a gaudy vein photo). so I can't tell you anything about the drilling from 2014 and 2015 except that a couple of holes hit some intersecting grades and the rest were crap.

The San Acacio project covers a big chunk of the Veta Grande (Big Vein) vein, one of the principal veins in the Zacatecas Mining District (historic production estimate >900Moz Ag and >9Moz Au).

white spots = drill-holes and tranches; red lines = veins
I've drawn on various veins and you can see that the majority of the drilling has focused on the NW corner of the property and only on the Veta Grande vein. A few holes were drilled to the SE, but they were crap (<50 g/t Ag).

We can plot a long section of the drilling data:

I've included some buffers around the historic drilling to show where there is not data - this is a useful tool for me to see where I can drill to get some decent results quickly

This is what we see:

  • Silver is restricted to a narrow, near surface zone and:
  • Deeper drilling below historic workings hit minor mineralization
  • Drilling along strike to the southeast didn't hit anything
  • The splay veins (Veta B and C) are small and low grade
So where are Defiance going to define more silver resources?
  • Does the silver zone have a dip to the SE and that the drilling in this area didn't go deep enough?
  • Are the other veins that cross the property any good? Some basic sampling/trenching would answer this.

2. The Money Bit

I normally calculate a quick $/tonne value for a project's resources to see how they compare against operating mines in the same country. This allows me to quickly see if the grades are good enough to support a profitable operation.

For this section I'm making the following assumptions:
  • Silver recoveries will be 76% (San Acacio 2014 technical report)
  • No credits from other metals (all the gold will be lost during processing or treatment)
  • Mining costs will be~$80/tonne (at a hypothetical 1000 tpd), based on costs from:
    • San Jose mine (2000 tpd) = $85.76/tonne (2015)
    • Bolanitos Mine (1500 tpd) = $71.97/tonne (2015)
    • Guanacevi Mine (1200 tpd) = $88.04/tonne
So how do the numbers stack up?

To calculate the value we do this:

(resource grade/31.1) x recovery % = recoverable silver grade in ounces/tonne
  • ((181.9/31.1) x 0.76) = 4.44oz/t (recoverable silver grade)
Ore value = recoverable silver grade x $17.5 (a average silver price)
  • 4.44 x 17.5 = $77.8/tonne 
So, if the mine was operating now, it would be losing a bit of money, but this estimate doesn't include Capex, development costs, sustaining capital etc.

From this you can do 2 things:
  1. Calculate a break even grade for a project - calculate a grade where ore value = mining costs
    • $80/$17.5 = 4.57 oz/t
    • 4.57 * 31.1 = 142.2 g/t Ag (the break even grade at US$17.5/oz silver)
  2. Or calculate a break even silver price for a project
    • 80/4.44 = $18.01/oz
So at last month;s silver prices (thanks Janet), San Acacio would have been break-even at best.

Putting everything together, San Acacio has:
  • A small low grade resource
  • Low-moderate exploration upside
  • A company with limited ability to raise funds
  • Large property payment (~$6m) due in next 24 months
I can't see where Defiance can add significant resources, to get it to ~50M oz Ag, which will make it attractive to companies like Endeavour Silver or Santa Cruz that have recently acquired projects in the district.

If you want to invest in a junior silver exploration company. there are others that are better than Defiance.

Orex - Sandra Silver recoveries

Today we received the long awaited metallurgical results from Sandra Escobar and it a nutshell, they are worse than crap they are abysmal.

What does Orex's president, Gary Cope, have to say "While the preliminary metallurgical results are not idea for the Boleras Main Zone, the comparisons between Sandra Escobar geology and that of the neighboring La Pitarrilla project are encouraging"

So how bad is it?

Single word - Extremely, but let us be a bit more scientific. Here are the preliminary results:

The deposit has an average grade of 106 g/t Ag
They've given us some nice charts to show us visually how crap the recovery is. I've added a couple of notes to show you the recovery for average grade ore.

wow, that is pathetic
So at the average grade of the deposit less than 20% of the silver can be recovered.

Basically it means for every tonne they mine only 19 grams gets recovered and just 87 grams goes to make the richest silver tailings in Mexico.

Or, they can only recover 6.7Moz of the 33.3Moz Ag resource they've defined.


But, I hear you telling me, they get some decent recoveries for the high grade ore!!!

But they have no high grade ore..

What a heap of crap, but it was nice to know that Orex waited for the results from the metallurgical studies before commiting more money to the project (link and link.

Ohh, they drilled an additional 3,000 meters and committed to drill another 4,000 more. Well I'm sure that Orex's shareholders will be very happy that you've spent another couple of million bucks on an uneconomic silver project.

The frustrating thing is - poor metallurgical recoveries are a common feature for many disseminated silver deposits.

Congratulations, I hope you have a plan B, especially as you didn't take an opportunity to raise money back when your share price was touching $1.40.

just a quick update, this is how Proactive Investors UK reported the data from Sandra
I guess it is how you phrase it...

Saturday, December 3, 2016

Las Chispas - You're only given a little spark of madness. You mustn't lose it.

Silver Crest have been releasing some interesting results from Las Chispas, we've been getting a steady stream of results from the 1st phase of drilling and underground sampling programs, which has propelled them to current market cap of ~90M and they have raised $10M recently (link) to fund future exploration programs.

For comparison - Regulus Resources, with Anta Kori (just containing 3.4Moz Au, 3 billion pounds of copper) have a market cap of 'only' $68M. So is Las Chispas any good?

The very short answer - no, not really


Everything that Silver Crest are telling us about Las Chispas is that:

  • Gold and silver found in a number of narrow (~1m wide) veins.
    • dilution will be an issue.
  • High grade (read economic) zones exist but are found as very small, discrete shoots.
    • hard to define significant resources
    • have the old workings sterilized large portions of the veins?
      • may be impossible (or at least very expensive) to remove residual blocks.

Exploration upside

  • Mapping, drilling and sampling has identified multiple high-grade, narrow gold-silver veins.
  • They have only been partially explored/exploited
  • There is an unexplored area to the NW of the Las Chispas Mine (series of shafts and dumps). I haven't found any info on this area in any of the reports/presentations or press releases.
I was going to say something clever about drill-holes LC16-05 and 08, as the grade and thickness of the Las Chispas vein appear to be getting thicker where the splay vein (unnamed vein) joins to eh main vein, but then I realized that that is where the majority of the historic workings are located. So it probably was good, but no is only useful for bats.

Question - Why appear to be assaying the entire length of each drill-hole, Why? Is it because the mineralization is hard to see and they HAVE to assay everything? This could be a major issue when they come to mining (or taking a 100,000 tonne bulk sample).

You can download the 3D model here (link) and I've also included a Google Earth file with the property boundary, veins, faults and the surface workings with the 3D model as well.

Note: to view the 3D model you'll have to download the latest Leapfrog Viewer - 4.7 from here (link)

Problem 1 - Narrow veins

Here are some photos of the Las Chispas veins. 

Varela Vein - narrow
Las Chispas Vein - narrow
William Tell vein - narrow. Can you mine the stock-work zone?

Why is this a problem:

You need a lot of drilling to define significant resources, and if I was looking to invest in a silver exploration company, I want to see that there is a potential to define >50Moz of AgEq resources.

For mining, thin veins means that there will be a lot of dilution, you can do a quick check to see how robust the grades are over a proper mining width - 1.25m for selective mining and 2.5m for mechanized mining.

I've also included my excel file as well so you can play around with the numbers.
You can see that when we apply these mining widths (and assuming that the country rock is unmineralized) that a large number of the reported samples fall below 300 g/t AgEq that is a convenient cut-off grade for small scale underground mining (or bulk sampling).

Problem 2 - small ore shoots

Here is a long section of the Las Chispas Vein.

Red lines - areas where samples grades >400 g/t AgEq. Note the first number is the strike length (the length of the line)
here's another from William Tell.

Add caption
We've been told that Silver Crest have the taken in excess of 5,000 samples from Las Chispas, that basically means that they are sampling everything. We are also told that they have results from 2055 samples, but only 301 (15%) gave assays of >150 g/t AgEq. That means on the sections, the ONLY areas of reasonable assays are those area underlined by a red line.

Challenge - join the red lines together to form the ore-shoots!

Here is an annotated version of the Las Chispas Section

dark grey = areas mined historically
I've made it a bit easier to see where the historic mining was on the Las Chispas vein. It appears they mined some very small, erratic ore-shoots. Was this because:

  • The economic gold-silver mineralization is restricted to small, erratic shoots
  • They were focused on mining the highest grade areas (i.e. the high grade core)

Look where the 'good' samples that Silver Crest have taken have come from.

dark grey = mined areas, red bars = areas of good samples
It looks like all of the decent samples came from within (remnant blocks) or immediately adjacent to those historic stopes. Basically where there isn't a red line means that samples contained less than 150 g/t AgEq!

What is the problem with this? Well, it makes it hard to define nice big resource blocks. You can see the issue, to define a large amount of resources you need lots of thin veins (at Curraghinalt has at least 16 separate veins) to have a large resource.

Problem 3 - Is the mineralization is hard to see?

When I read the technical report I was stunned to see that Silver Crest submitted 4332 samples from the phase 1 drill program. They only drilled 6558.1m in 22 holes. That means that each sample assayed 1.5m of core, so it looks like they are sampling the entire drill-hole. For vein deposits this is overkill, why are they doing this? could it be:

  1. They are going to use the assay data to map out alteration and mineralization zonation?
  2. Checking to see if there is bulk tonnage disseminated halo around the veins
    • Normally you sample the entire length of 1 drill-hole see what you get and if there is no evidence for a disseminated halo you assay 5-10m either side of veins, faults, structures etc. 
  3. It is damn hard to see where the mineralization is - i.e. no obvious mineralized structures

Fortunately, we have a few photos of the gold-silver zones
this assayed 4.6 g/t Au and 621 g/t Ag
I can't see an obvious vein, do you? I'm guessing it is the lighter grey rocks.

A bit more veining, but nothing you would say is impressive -  this ran 2.4 g/t Au and 311 g/t Ag
wow, a 1 cm whopper
You can see that there is a bit of veining, but nothing that jumps out and rapes your eyeballs and screams this vein is going to give you a silver enema.

Now the silver lining

It is early days, the first phase of drilling got decent results on the 2 main veins, may have found a a decent grade block on the extension of the William Tell veins and also discovered a few more veins, splays with some decent gold and silver grades.

I also check the area on Google Earth to see what 'culture' you can see at surface.

There are a load of dumps and shafts to the NW of the Las Chispas and William Tell vein systems. When I check the technical report and all the info on the website I can't find anything mentioned about this area, but it hints that there are other vein systems that are still waiting for the Silver Crest geologists to get to them.

The results from Las Chispas have been interesting, but we are still early in its story, but I haven't seen anything that screams "big mineralized system with big potential". My feels for SC's market cap is that people are buying into the management team and hope that they can deliver another success. 

Wednesday, November 23, 2016

USA - The Mining Law of 1872

While I was putting together the data on the Lone Mountain Project, i noticed something quite interesting.

The short version

If you are a Canadian Company exploring in the US, please make sure you understand the quirky mining laws and protect your assets.

This is a complicated image
Black dots = Nevada Zinc's drill-holes
Green line = property boundary
Red lines = surface projection of the Zinc Oxide zone based on

  1. Projecting the intercepts to surface
  2. The Zinc soil anomaly image
  3. Surface prospects (cyan dots).
You will notice that to the bottom right of the image you can see the red lines starting to leave NZ's property. You also see the some to the SW of their drilling.

Let's zoom in.

and in 3D

You are probably thinking, what is that retarded geologist thinking. Well my friends, in this case I'm not the retarded one. It is actually a 'feature' in the General Mining Act of 1872 (link). Specifically the "Law of Apex" that gave extra lateral rights to owners of lode claims that gave the owners of the surface outcrop (the exact language is "the highest point of economic mineralization") of a vein (or mineralized body) wherever it led, even if its subsurface extension continued beneath other mining claims.

This means that is you owned the top of the mineralized zone, even with 1 concession, you owned the entire deposit. Here is an example, the Montanore project in Montana, a crap silver project in the US and therefore inevitably owned by Hecla Mining.

The entire(!) deposit (230Moz Ag and >200Mlbs Cu) is controlled by just TWO concessions (HR133 and 134 - covering just 40 acres).

This also means that the "Apex" can move over time (especially in poly-metallic deposits) as the prices for different metals go up and down.

You would expect expect a company would be very careful and protect their primary asset, and imaging what would happen if someone went to Lone Mountain and put a few claims over the areas where the zinc mineralization outcrops up slope from Nevada Zinc's drill-hole (they would need to take a sample that contained 'economic' zinc values). They could legally claim that they own the entire deposit.

Nevada could be nice this time of the year.....

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.

Tuesday, November 1, 2016

Nevada Zinc - not all Zinc deposits are equal

My chum down south has been beating the drum recently about Tinka and their base metal project in Peru and showing us lots of lovely charts about how zinc prices have been shooting up. So, I took his advice and bought shares in Teck....

I can't see a difference.....
So I thought I would try and be clever and went looking for companies with zinc projects, and I stumbled on Nevada Zinc (link), they have been hitting some great zinc intercepts from their Lone Mountain project in Nevada.

I thought, at last I've found a decent project that no-one knows about, but a crap load of shares and wait for the retail investors to pile in and make me rich (ok, being realistic - slightly less poor).

I brought the drill-data into 3D (you can get the model from here).

look at those grades....

magnificent, thick, juicy zinc intercepts
Everything was looking good until I saw this in their presentation (slide 16) where it states: "Potential for sulfide mineralization at depth"

Crap, we have a zinc carbonate deposit. How many of those are operating around the world? I only know of one - the Skorpion Mine Namibia (link), that produces around 125Kt of zinc metal a year from a alluvial zinc deposit.

All other carbonate zinc deposits I know are hosted in limestone:
  • Accha and Yanque in Peru (Zincore Metals Inc (link))
  • Sierra Mojada in Mexico (Silver Bull Resources (link))
  • The tops of zinc deposits (e.g. Tsumeb, Broken Hill and the MVT deposits in the USA, UK and Ireland that were mined in the 18th century,
So they aren't common, but Skorpion is/was the 8th largest zinc mine in the world, that is good, no?

Skorpion is a bit different, most non-sulfide zinc mines are generally found in limestones, and you know what happens when you tip a load on acid on them, they fizz. Hypothetically you can leach the zinc minerals, but will have massive acid consumption.
Don't worry, Nevada zinc state that they can use dense media separation (DMS) to remove a lot of the waste and they they can leach the zinc, but that is the big issue, the real elephant in the room is the lead.

There is a bit of lead...
There isn't much, but lead carbonate, so what's the problem? Well lead carbonate is romantically called "white lead" and for the older readers it was used as a pigment in paint. Those of you who are or have renovated an old house, you know what a hemorrhoid it is to remove and dispose of the old paint.

This is what Wikipedia tells us:

It tended to cause lead poisoning, and its use has been banned in most countries...

So why is mining lead carbonate bad? Why don't we ask Magellen Metals what they think (link)?

Magellen (now called Rosslyn Hill Mining) operated the Wiluna Mine in Western Australia (link). A oxide lead-zinc deposit. Back in 2006 it was noticed that ~9000 birds died in the town of Esperance, that was discovered to be caused by lead poisoning. The source of the lead was the concentrate from the Wiluna mine that was using the port at Esperance to ship the concentrate overseas.

They also found that 10% (about 1400 people) have blood Pb levels above WHO levels. The concentrate contained lead carbonate which is absorbed much more easily that lead sulfide. The end result was that they had to pay AU$30M to clean up Esperance, and were very much under the microscope from the state government. the mine is currently closed.

So, Nevada Zinc have a carbonate zinc deposit in the USA, a country well know for being incredibly environmentally friendly. Imagine the fun you'll have with the EPA over:
  • Mining ore with lead carbonate - you gonna need good dust control
  • Transporting concentrate with lead carbonate in it
  • Having waste dumps on surface that may contain lead carbonate
    • they don't have any wind in Nevada?
I'm surprised they haven;t had a slap on the wrist for doing RC drilling, which looks like this...

Bit like a steam train, puffing all that dust over the desert. Imagine that dust contained something nasty.....

So in essence, not all zinc deposits are created equally, and if you see a company talking about their great oxide zinc depoist (e.g. Zincore, Silver Bull, Nevada Zinc), just ignore them and move on.

Darkstar - Don't give me any of that intelligent life crap, just give me something I can blow up?

Gold Standard have been releasing some decent new hits from North Dark Star over the last couple of months, and so I cajoled (thanks Rob) into revisiting the project to see where these holes were drilled and to see what is new.

My updated model can be found here (link) and I've also uploaded the drill-hole data as well (link).


TAG's officially bad BoTE (back of the envelope) resource calculation for North Dark Star is: 
  • 43.7Mt @ 0.78 g/t Au or
  • 1.1 Moz Au
Basically this is a small, moderate grade deposit which is similar to the others they have found around the project:
  1. Pinion - 1.7Moz Au (92 Mt @ 0.58 g/t Au
  2. Dark Star - 0.38Moz Au (23Mt @ 0.51 g/t Au)
Is there potential for Railroad to host a big gold deposit? It is possible, but the drilling is telling us that in reality, there are probably just a few small deposits like NDS scattered around.

Why don't we have a look at the recent drilling in a bit more detail. 

If you ignore holes 07 and 10, all they are hitting are narrow, low grade zones.
We can quickly see (heck they draw lines to them) where the good holes are located! They are all drilled into that nice yellowy-pink blob, and all the crap holes (narrow low grade zones or no mineralisation) are located around it, and all of their holes exploring the South Dark Star corridor found diddly squat!

Let's look at the sections - going from north to south

Section 4480200N

Hole DS16-01 - very disappointing
Hole DS15-10, 11 and 13 all hit zone high high grade mineralisation (again these 3 holes are only 40m apart) but as soon as we move away from the core zone, the grade disappears. Look at hole 16-01 - just a few narrow, low grade zones and it is only 30m from 150m @ 1.4 g/t Au! 

Section 4480080N

Same again, high grade (>1g/t Au) core that quickly dies out
DS16-08 hit a nice thick gold zone and this has continued down to hole DS16-24, but up-dip the story is totally different, hole DS16-21 drilled just 60m away hit precisely SFA.

Section 4479960N

Same again....
We see the same again, some great values in hole DS16-03B, but holes 17 and 23 again drilled 60m and 70m away respectively again hit a bit of grade (hole 27) or no grade (hole 23).

All of the drilling data is telling you that there is a small, high grade core 100m wide x 500m long) at North Dark Star and grades quickly drop off.

But it isn't all bad news, hole DS16-07 hit, what may be the continuation of the Main DS deposit to the NW or maybe just a small zone of mineralization wedged between 2 faults? 

Do these narrow zones come together at depth?
Some drilling to the west of these holes would answer that, but if there is any decent mineralization out there, it is going to be deep (greater than 200m depth).

So, if I'm correct-ish, GSV now have ~3 Moz of gold at a moderate grade (0.6-0.7 g/t Au), which is nothing special, so why do they have a market cap of ~US$500m?

They don't have anything special (ok, they have a good postcode and some rich neighbors), but not a project like Juanicipio that sell themselves. There is nothing in drill data that shouts "World Class Deposit"

However, what they have done is focused on drilling out and extending the known high grade zones. You will notice that they maximize the value of their drill data by:
  1. Always including a 'stellar' intercept in all their press releases.
  2. Never have release 'bad' results on their own. You'll see that GSV always include a decent intercept with poor results 
    • e.g. Oct 20th PR - data released from 12 holes, 6 (50%) contained no gold, and only 2 (DS16-07 and 10) had semi-decent results.
  3. Release news regularly to maintain momentum and interest in the company:
    • 10 PRs since August
    • 34 PRs in 2016 - one every 10 days
  4. Raise money when you can, not when you are desperate!
    • They already had a healthy cash position but they raised >$33m to have a "significant treasury for annual strategy and beyond"
It is a good strategy, and it has allowed them to raise a lot of cash, but will the market be disappointed when they do a resource calculation on North Dark Star and tell the market that it is a bit average?

Here is an example from North Bullion - the August 30th PR data

Great assays, but at 322m depth below surface, can you do anything with it?

Just some comments regarding the DH data.
  1. Elevation data was obtained from the USGS 10m DEM downloaded from Earth Explorer
  2. Collar locations were obtained from:
    • 43-101 reports (exact)
    • digitising them from the plan maps that accompany the press releases (within 20m)
  3. Downhole survey data was taken from the assay tables, they do not include deviation.
  4. Assay data was taken from the press releases and residual grades were back calculated using Core box's excellent drill interval calculator.

Monday, October 31, 2016

Sol Gold - porphyry demographics

Porphyries occur in distinct age ranges:

  1. Paleocene (~60 million years ago - we brreviate this to Ma) - e.g. Cerro Verde, Cuajone etc,
  2. Eocene-Oligocene (41-29Ma) - e.g. Chuquicamata, Escondida
  3. Miocene (20-7Ma) - e.g. El Teniente, La Granja, Junin.
Sometimes geology is cool, or more likely, I have no life.....
However, if you look at each group you can see that:
  1. Youngest deposits are better (bigger and contain more copper), that older deposits
  2. Ecuador is very under-represented - just 3 little blobs.
  3. The biggest deposits travel south for winter (the monsters are Chilean!)

So if Sol Gold went around their project and did a bit of age dating of their intrusive rocks at each prospect, could they find some that are a bit younger (think of it as looking for Halle Berrys rather than Jane Fondas - both attractive, but one is obviously better) that could be the BFD of porphyries in Ecuador?

Sandra - First Resources


err, umm, a bit shite...

The longer version

So today we got a PR with the long-awaited initial resource report from Sandra (link).

So we have 33.3 million ounces (inferred) grading 106 g/t Ag at a 45 g/t Ag cut-off. This compares well with the 26 million ounces at 84 g/t (indicated) that Azure defined at Mesa de Plata (link).

We can applaud Orex for discovering, drilling and defining an initial silver resource in less than a year, but, what's the plan now?

The drilling has pretty much defined all the silver at Boleras, there is a couple of areas where you can add a few tonnes, but nothing that suggests the deposit is going to be yuuuuuuuggee.

I was also disappointed that there were no measured or indicated resources. Orex have drilled the depoist on 50-60m centers, that should be enough for a disseminated deposit to have some "better than inferred" resources. However, the consultants thought differently and only has confidence to calculate inferred resources only. Why was that? We are told:

Two discrete domain types were modelled; D1 - disseminated silver mineralization in a horizontal rhyolite crystal tuff, and D2 - disseminated and stockwork veinlet hosted silver mineralization crosscutting the horizontal tuff horizon. D1 is of average grade material and includes a top capping of values at 225 g/t Ag. D2 is of higher grade material and includes a top capping of values at 1,500 g/t Ag.

That means:

  • D2 - high grade vertical zones with veins and stockworks
  • D1 - low grade horizontal disseminated zone

I'll try not to be too smug, but when you look at my crude grade shells, you can see that the high grade (orange color) mineralization appears to be restricted to discrete lenses.

little island of high grade...
I'm happy with the data, and I've uploaded my updated model (link and spreadsheet), and I got 9.4Mt @ 114 g/t Ag for 34.5 Moz silver. Not bad, especially as I am working with a summary of the data.

Back in May, my back of the envelope calculation was for Sandra to contain 44.4 Moz Ag (link), so more drilling isn't always a benefit. We have a good example where more drilling has led to a reduction in contained silver!

I'm going to be interested in the recoveries so that I can calculate the recoverable silver resources for Sandra, but for a guideline is you use:

  • 90% recovery = 30Moz recoverable silver
  • 75% recovery = 25Moz recoverable silver
  • 60% recovery = 20Moz recoverable silver

You can see suddenly how small the depoist become when you factor in recoveries!!

Good Luck with the rest of the exploration at Sandra, and maybe you'll find a gold zone like Loma Bonita?

The other big questions is - why the feck didn't you raise money at $1.20?

Thursday, October 27, 2016

Sandra - has a driller knocked you up?

Are you pregnant? Cuz you're late
  • 166 days - 5 and a half months since you awarded the contract for the 43-101 calculation (link)
  • 121 days - 4 months since you teased us in a PR about metallurgical studies (link)
I'm sure that there is nothing to worry about, let us check out REX.V!

ohh, nasty....
OK, a 50% drop since 50% since September. Nothing to panic about, I'm sure you did the same as your peers and took advantage of when you share price was high to raise some cash.

oh, you didn't, oh dear

Well I hope those metallurgical results are good, but just a quickie - will you get them before the New Year (and I don't mean the Chinese one)?

Here is a funny chart - here are the PR headline grades from the Sandra PRs

They've become a bit average of late, can you drill some more good stuff, please?