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Monday, October 31, 2016

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?