Sunday, December 23, 2018

SolGold - the beast gets bigger.....

DISCLOSURE - I've sold my Solgold shares as I regard the story at Alpala as being complete. I don't see an upside to the stock in the short-term and I'm not convinced that the deposit is big enough, at current metal prices, for a major to take them out and develop it.

So, SolGold put out an updated resource statement for Alpala (link).

On the surface a massive jump on the previous numbers.

The Contained Gold number should be Moz not Mt
Please note that a lower cut-off was used for the 2018 resources - 0.2% CuEq vs 0.3% CuEq in 2017.

So what? They have nearly 3Bt of resources at overall grades that, even if it was at surface, would be regarded as being marginal.

When you strip out the high-grade (>0.9% CuEq) core, hat you have left is crap:
  • 2530Mt @ 0.28% Cu and 0.13 g/t Au or 0.37% CuEq
At those grades, even it was forming a nice green hill, it isn't good enough, and wouldn't be unless Cu was >$4/lb.

Let us look at the high-grade zone

I used the 0.9% CuEq values in the table, so they have:

  • Indicated - 400Mt @ 0.9% Cu, 0.93 g/t Au or 1.49% CuEq
  • Inferred - 20Mt @ 0.72% Cu, 0.52 g/t Au or 1.05% CuEq

Here it is

best areas start at ~750m depths

You can see that the bulk of the high-grade resources are in the central zone, which has been extensively drilled, and doesn't seem to have much expansion potential.

The Alpala Southeast zone appears to be defined by a couple of drill-holes, and is open in several directions, but it doesn't look to be very big.

We see the same with Alpala NW and Trivinio, but man is it deep.

The project that I was hoping to see some results from Aguinaga was a bust, and basically used the latest resource update as an opportunity to take my (small) profits and walk away, as for me, this is where the project doesn't quite make it. I've annotated a nice summary chart from Macquarie's nice summary on various block caving proposed projects (link), and we see:

I hope that Newcrest come in and take them out (link), but with the grumblings from Ecuador regarding their permitting issues (link), for me the story is over, especially as they'll need to raise more funds for their, in my opinion, extremely expensive exploration programs.

Tuesday, December 18, 2018

GT Gold - more holes in the (North) Saddle

We've had a new PR from GT Gold (link). Some interesting results, but the market didn't like them.


Good News

  • The >0.5% CuEq mineralization appears to come to surface (hole TTD108)
The Bad News
  • High-grade mineralization restricted to a specific zone (the Stock-work zone)
  • This zone appears to be discontinuous (i.e. it doesn't seem to join up well between drill-holes), and the best zone is deep
Overall, I don't see, from the data presented, much evidence that the North Saddle zone will grow into something huge. The best mineralization appears to be inconsistent, with the best intercepts at depth.

In More detail....

In my last post I was partially correct about a preferred 'trend' in the mineralization. In fact, on the sections provided in this PR we can see that virtually all of the good mineralization is found in a specific 'unit' - what is labelled as the intense stockwork zone.

I've highlighted on the sections that accompanied the PR.

You can clearly see why hole TTD098 missed. It was drilled parallel to the stockworks just clipped it. Imaging if this hole had been drilled a degree steeper, it would have hit >300m @ >1% CuEq. The market would have liked that.

From the sections I've tried to model this zone in 3D (file here - link).

We can see that the stockwork zone is:
  • Narrow (~max thickenss 250m)
  • inconsistent (forms separate, probably discrete zones)
  • Steeply dipping to the SW
Unfortunately, for me, I can't see how the Stockwork zone is going to get much bigger.

  • On section 5620 (the most northwesterly section) the zone is very narrow and runs along the fault.
  • On section 5830 (the most southeasterly section), the stockwork zone again is very small and deep
  • Only on section 5740 do we get 2 zones
    • upper narrow zone (hole TTD106 and 108 - approx 100m wide) that continues to surface
    • lower deep zone (TTD093) that starts at 400-450m depth, that is ~200m wide
We have to remember these section are ~160m apart, which makes that stockwork zone quite small.

I'm certain that hole TTD109 will get something great (probably 400m @ >0.75 g/t Au and 0.5% Cu starting from 700m depth), but so what. All it will be doing is confirming what was hit in hole TTD093, it won't tell us anything new, we already know that they have some moderate mineralization at depth. To be special and make this project, hole 109 need to get something special.

Monday, December 10, 2018

And now for something completely different....

I should have read the PR properly!

A rehash!

A massive shock, BHP released some exploration results....

This either means two things
  1. They're fecked and desperate for Eric Sprott's cash
  2. They've found something huge and they want to show-off
There wasn't much to go on from the PR, just some assays ...

obviously hole AD-23 included an intercept of 1m of 180% Cu...

Why don't we compare this against the discovery hole for a small deposit called Olympic Dam.

Source: Geology for Investors (link)
Here is the data in Leapfrog (link).

First thing, it is quite deep...

1.2km depth, I wonder if they'll have more water to pump than Platosa?

Friday, December 7, 2018

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...


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!

Saturday, December 1, 2018

GT Gold - update

The market hasn't been impressed with the recent results from Saddle North.


and nor was I, but I've updated the Leapfrog model with the new data (link) so you can see everything in 3D.

The new drilling was disappointing. It appears to severely restrict the size of the high-grade (>1% CuEq) zone to an area that is ~500m long by 150-250m wide.

Quite small
The silver lining is, we don't how deep it goes, but....


The good stuff starts at around 250m depth, and the stuff above is quite poor, generally less than 0.25% CuEq, which isn't something you want to be mining and 1000+ meter holes are expensive to drill.

Hole 102 is easy to explain, it cut the periphery of the system and got a bit of copper and gold, and helps define the NW limits to the system.

However, Hole 98 was disappointing, it was planned to go through the guts of the system below hole 85 and hit not much at all, just a narrow deep zone of decent mineralization surrounded by low grade. We could explain it as clipping the SE edge of the system, but that is an impressive drop in grades over such a short distance, especially as there doesn't appear to be a fault or change in rock type.

Could it be that there is a preferred orientation to the mineralization?

There is some evidence in the core photos to support this, but I have to admit, the photos aren't very sexy.

I also did a woeful calculation of doom (TM) to see potentially how much metal the system could contain.

If it was closer to surface, I think bigger companies would be having a look, but at depth, at those grades, probably just going to be ignored.

My observations for the pending holes are:

  • 106 - I'm going to guess that it will hit a 200-300m wide zone of low grade <0.5% CuEq).
  • 107 - this is probably drilling the pyrite halo and will hit grades that are a bit less that 98 (<0.25% CuEq).
  • 108 - similar to 106, hit some low-grade and not much else
  • 109 - this may be aiming for the deep zone hit by holes 62 and 93. I'll have a stab that it will hit a >1% CuEq zone from ~550m to ~950m (similar to hole 85) as it is an infill hole.
  • 110 - hit grades middling grades - probably a zone of >0.5% CuEq from 500m depth (lower grade than hit in hole 93) as you move away from the core of the system.
Maybe GT Gold will be lucky and find another couple more porphyries, but my overall feeling is that we've seen the best from Saddle North.

Thursday, November 29, 2018

Endeavour Silver - Number crunching

A nice simple tidbit for silver bugs

Endeavour Silver Market Cap = $240M

El Cubo acquisition costs = $250M (link)

It's a hell of a mine...

Or as Bad Crooke put it:

Monday, November 26, 2018

First Majestic - Reserves, who needs them

When I was younger and infinitely more intelligent (as I thought), I had a high regard for First Majestic Silver. As I’ve got older, fatter, stupider and lazier, I had ignored them for ages until they ‘rescued’ San Dimas from Primero’s incompetence.

However, what peaked my interest wasn’t San Dimas, that should make money unless you are truly incompetent, it was the disconnection between what they mine at the various operations and the published reserve grades at their various mines.

It is something that I had berated Pretium for at Brucejack, but First Majestic, with 6 operating mines (excluding San Dimas as it is new), you would expect that with many years of operation experience that they would be fairly good operators, and excluding a blip or two, be within 10% of the reserve grades on average.

For the charts below I’m using:

  • Compiled production figures for 2016, 17, and 18 (to date) from FM’s MD&A’s
  • Reserve grades from the Form 40-F. and from the First Majestic Website (link).
Let us start with the good:

Santa Elena

The stand-out mine, since the start of 2016 they have mining higher grades than reserves, which are skewed by a bit of very low grade oxide material.

A mine that works.....

However, we can see in 2018 they either got into an expected high-grade area or are high-grading the shit out of the deposit to keep themselves cash flow positive with sub-$15/oz silver prices. Will this screw them in a few years?

San Martin

One of their oldest and smallest operation producing ~2Moz Ag per annum.

A mine that almost works, goddammit!!!

But consistently within 10% of the reserve grades...

La Encantada

and now the wheels start to wobble.

Will they recover in 2018/19?

It has generally been ok, but the wheels fell of the wagon this year, with mine grades plunging by an ounce. It will be interesting if they can get the mine back on track.

La Guitarra

Their smallest and generally worse mine.

A general decline...
Always been crap, but a nice spike at the end to show that they were in panic-mode to keep the mine operating.

Del Toro

Del Toro, more like La Vaca Muerta.

Funny how they keep dropping the reserve grades every year, yet the mine keep churning away at ~150 g/t Ag. 

La Parrilla

The original mine, probably getting long in the tooth, probably best to take it out back and shoot it in the head.

Wow, what a piece of shit

It look like at their mines, and in particular Del Toro and La Parrilla, that First Majestic have a fundamental problems with the resource calculations. I could understand missing but a little bit (plus or minus 10%), but to consistently not make the grade at virtually all of your mines consistently over the last 2.75 years takes a special type of company. Christ, if you got any worse, you'll be Coeur....

When you looked a bit closer, you actually see that it isn't First Majestic rescuing San Dimas, it is San Dimas that will rescue First Majestic. Santa Elena is saving them at the moment, but with the high-grading going on, will the mine be fucked in a few years?

Saturday, November 3, 2018

Garibaldi - more results

Obviously, I was wrong with my final comment on my last post on Garibaldi:

They hit some intervals of massive sulfide mineralization in hole 23 and 24, but again, with the maps provided, we can see that they are just 2 more holes drilled into the same area as before.

I've highlighted the collars in Magenta and the holes traces with a thick black line, and drawn a cross section through the massive sulfide intervals intersected by both holes. You can get the 3D viewer file from here (link)

In summary both holes were designed to explore for the Northern (Hole 23) and Southerm (Hole 24) continuation of the Central/Discovery Zone.

I apologize, this is a busy slide.

Hole 18-23 intersected a zone of low grade mineralization at ~125m depth, just below where you would expect the northern extension of the Main Zone to be (this hole is only 25m north of hole EL-17-14).

However, I'm intrigued by the massive sulfides at at massive sulfide zone at ~72m depth. It seems to line up with the massive sulfides hit in hole 41 and the surface outcrop of the Crevasse zone. To me, it looks like the Crevasse and NW zones maybe the same and connect down-dip into the Central/Discovery zone.

Still forming small pods
Hole 18-24, this was drilled ~15m south from hole EL-18-16 and hit massive sulfides at ~187m depth. It appears that the massive sulfide mineralization has been off-set (dropped down to the south) by a fault between these 2 holes. The good news is, it could mean that the massive sulfide zone is open to the south beyond hole 24. However, it isn't open in all directions as drill-hole EL-17-13 passed just 12m to the east and didn't hit anything. We see the same to the west (holes 18-15 and 17) where drilling has hit nothing of note.

Massive sulfide zone could be up to ~30 horizontal length

We've had 32 holes drilled into this area (7 historic, 25 by Garibaldi) measuring 360m by 260m (from extreme extents of the drilling) and all they have hit is a couple of mall, high-grade pods.

  • Discovery zone is the largest and is approx. 150m x 75m by ~10m thick in the core
  • The NW/Crevasse zone appears to be 120m x 75m by ~1-3m thick (if they join together).
The market is disappointed with this as we've been told that:

and shown

That the area that they are drilling is the WORST of the 4 VTEM targets known about since Aug 2017 (that is the date of the map above), yet we still haven't see a single hole drilling into anomalies A, B, C or the "Q" anomaly.

We still are waiting to find out the location and results from the final 16 hole (25 to 40), do you think any will be drilling on any of the other targets?

Sunday, October 28, 2018

Garibaldi - fecked?


The height of a fridge, or Tom Cruise

That is the thickness of the New Central Zone (link) according to a nice clarification PR released last Thursday and still hasn't managed to make it to their website.

We got depths, thicknesses, and coordinates, but no map, or any trace of any news from any of the 18 drill-holes (hole 23-40) that must have been drilled between holes EL-18-22 (results released on the 24th Sept (link) and the new zone discovered by EL-18-41 (link)

However, they included some hole info for EL-18-41 so we can see where it is, and you can get the 3D viewer file from here (link)

Correction - I made a mistake in the original viewer file, I put the massive sulfide zone at the bottom of the lower disseminated zone not the upper one. The updated viewer file is here (link). Not much changes.

OMG!!!!!!!! To the shock of no-one, it's located where every other hole has been drilled.I'm guessing they used that cunning geologist trick "let's just turn the rig around and start drilling in the opposite direction"

I jest, the hole was drilled below a new zone of massive sulfide mineralization exposed by the retreating ice field (I've called it the Global Warming zone, and it is a much cooler name than "New Central Zone").

Here is a nice cross-section

You can see that hole 41 hit the massive sulfide almost vertically below the surface outcrop. If this is the case the true width could be a little as 0.5m. Another section

correct section below

The corrected section doesn't change much. The new zone is still narrow, but now 30m rather than 75m below surface, but not exactly open-pitable.

This is quite a busy section, but note:
  1. the massive sulfides in hole 41 are ~75m 30m below the surface outcrop of the Global Warming Zone
  2. Hole 41 appears to be also testing the NW continuation of the Main/Discovery Zone beyond hole EL-17-02, and hit nothing, not even a mention of disseminated mineralization (assuming that this zone is ~horizontal).
  3. In the surface map they talk about a MASU (MAssive SUlfide) bounders in moraine. If you look at the topography, you can see that the Massive Sulfide bounder zone is downhill from the Global Warming zone. This shows that this zone is the source of the bounders and it is unlikely to be anything huge beneath the ice in this area.
To reiterate a point, GGI were very quick at rushing out a PR based on visual observation of the core from hole 41, yet we've heard nothing, not even a mention of anything from holes 23 to 40, why? They are obviously a lot worse than hole 41 and must be shite.

Tuesday, October 23, 2018

Excellon - Platosa Resources

I have to admit, I don't like Platosa, I think it is crap. A deposit where too much money has been spent, it hasn't ever consistently been profitable, but people keep getting fixated on the grades and ignore everything else.

Excellon have trying to get Platosa to work for the best part of a decade. They've had problems with the unions, local communities, and water.

However, for me, the deposit's biggest Achilles heel is its size. Earlier this year we got the latest and greatest resources (link).

What is the correct word to describe them....

But unfortunately, with less boobs. Here they are....

Here are the resources from December 2014 (link).

Do you see how the M&I resource grades have plummeted from 2014 to 2018. I'm sure this is because the deposit has been mined very carefully and 3 1/2 years of very successful, profitable high-grade mining of a complicated deposit has taken its toll, but......

Ohhh, the production grades have been nowhere near the resource grades. The started off great, and then went on holiday.

continued mediocrity

the 2018 numbers look ok for the base metals
a general decline
Stupid question time - why is there a 6577 tonne (11%) difference between the SRK and Excellon production tonnages for 2017 (57,165 vs 63,842 tonnes)?

But for me, these are the funniest statistics

Wow, 10m drill spacing to accurately define the resources. I remember teasing Pretium about tight drilling.

Here it is visually (just for the mine area)

I wonder if the difference between resource and mine grade is because drilling has removed so much material
and this:

Holy Feck, you've drilled >358km (same distance Flint, Michigan is from Toronto) of drilling to have defined a total of  ~1.2 million tonnes @ 682 g/t Ag, 6.2% Pb and 7.4%Zn?
  • 498,000 tonnes of resources @ 548 g/t Ag, 5.6 % Pb and 5.9 % Zn
  • 696,469 tonnes produced @ 779 g/t Ag, 6.7% Pb and 8.5% Zn

Or to put it another way. Excellon have mined and defined:
  • 1,194,469 tonnes grading 1287 g/t AgEq, or 49,458,316Moz AgEq
  • Drilled 358,070 meters
  • So this works out to a success rate of 138.12 oz AgEq per meter
If we compare that with Silvercrest's Las Chispas project we see:
  • Total drilling 83,230m
  • Total resources: 86,701,200 oz AgEq
  • Success rate = 1041.7oz AgEq per meter
I'm being crude as Las Chispas is all inferred resources, but this is the reason I think that Platosa is crap and why I have shares in Silvercrest. Platosa is too fecking hard.

Monday, October 22, 2018

GT Gold Corp - Back in the Saddle

That teaches me for not paying close attention to the market, a spectacular rise in GTT.V share price after some juicy porphyry hits at Saddle North.

Obviously, you can remind me of my terrible comment from my last post (link).

I suck..
So, we'll ignore the drilling at the Saddle deposit, the market doesn't care about these, and focus on the porphyry.

You can get a Leapfrog viewer file here (link) to look at it in 3D-goodness.

At the moment it is early days, we have the data from 3.5 holes (hole TTD062 stopped before hitting the guts of the porphyry), so it is hard to know the full scale of the mineralization (this is me covering my ass), but the IP data may give us a hint.

I'm ignoring the mag data as it doesn't really help us (there is a huge anomaly), but the IP data may give us a potential size of the porphyry system.

and a close up...

It looks like the copper mineralization is found in a 500m long by 200-300m wide zone. From the sections, this zone dips to the SW, and may also dip to the NW (based on the fact that the Western n changeability high associated with the pyrite halo is more subdued, suggesting that it is at greater depth).

I'm also intrigued by the fact that in none of the literature do GT Gold mention any bornite, just chalcopyrite and pyrite. At another small porphyry deposits in the area we see this:

Bornite in the middle like jam in a donut
The best grades are found in the core, which often a lot of bornite, as we see no mention of this, there is a good chance that they still haven't drilled it. My guess is that it will be found to the west of hole TTD092.

Circle marks the spot..

When I look at the Saddle North Plan map (link), I noticed that a couple of the drill-holes, TTD098 and TTD107, don't appear to be optimally located. They appear to be targeting the pyrite halo and may only hit erratic, low-grade intervals (<0.25% CuEq with narrow zones of ~0.5% CuEq).

However, I'll be very interested to see what hole TTD102 gets, this could hit the bornite core and could get some decent, thick intervals of high-grade (>1% CuEq) mineralization.

I'm also interested in hole TTD106, if this gets grades similar to TTD085 (100+m @ >0.3 g/t Au and >0.3% Cu), this would be very positive as when you look at the sections, you can see that the highest grade mineralization starts at ~400m depth.

Is this potentially too deep?