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Saturday, January 20, 2018

El Cobre - easy exploration

The hardest thing in exploration is finding mineralization, once you've found it, that is the hard part done and all you have to do is keep drilling to find how big it is, by drilling a little further away from the "discovery hole" with each drill-hole.

However, there is the another approach. Once you've found the mineralization, just keep drilling the same area time and time again. I'm going to call this the "Poliquin" method after the stunning drilling program at El Cobre.

Let's look at the drilling over time....


Jan 2017

Some great results....
Efficient planning, lots of holes from the same platform
from the same areas they were drilling in 2016

May 2017

More great results....
Not much different....
In exactly the same place. maybe they should move the rig?

July, 2017

Seasonal variation, drilling from south to north. Why didn't I think of that!



August, 2017

Yawn, different month, same shit

heck, can you fit any more hole in there

But look, that section looks virginal.
Like Stormy Daniels...
I'm guessing it would have been hard to get all the drill-holes on it.


September, 2017


At fecking last, a hole drilled 45m away from another on!!!!!



A massive 45m...

Keep it easy, drill the same stuff twice

So all we are missing are the holes that will be drilled from East to West and from West to East, like this....

Yellow -  Hilary and Trinity drilling; Cyan - Wold cup disappointment and Michaelmas drilling
I wonder if I have ruined Almadex's 2018 El Cobre drill program?

Other targets

Why break a winning formula, Almadex is doing the same elsewhere - here is El Porvenir.




Hey, they hit some stuff between other holes with stuff in them. Amazing!

and Raya Tembrillo

It's almost art, the beautiful symmetry


It is so nice that Almadex are minimizing the surface impact from drilling by carefully recycling their drill-pads. Personally, I'm going to vote for them in the "most holes from a single platform" award category at the PDAC this year, and as a show of solidarity,  I'm going to show my support by using less toilet paper to wipe my arse.



Why is this a problem? Almadex can keep pumping out great press releases every month, but like the boy who cried wolf, they'll eventually have to do a resource calculation that will show that El Cobre is a Wonderbra project, where lots and lots of well-(metal) endowed drill-holes will produce a resource that is a lot smaller than expected.

Wednesday, January 17, 2018

SolGold - A resource Review

DISCLOSURE: I own shares in SolGold.

A few days late, but we got the initial resource calculations for Alpala (link), in summary:



So we should see the report released around mid-February. I'm sorry I haven't posted an article sooner, I've been rebuilding the drill-hole database and being a bit I'm lazy.

You can get the model from here (link).

Back in November I put on this blog a 'guesstimate' resource outline, which is below:



Compared to the office resources, I can say is:



Yup, I was terrible! This level of incompetence is normally only seen in British politics, and as I can't accept that I'm truly incompetent (just partially, when among friends), I wanted to see why I was so shite (excluding the obvious disabilities).

Resource review

Go to the end of this section to see numbers and the like.

For the basis of my incorrect November guesstimate I didn't use a bias when making the grade shells in Leapfrog.  I simply told it to look equally all directions (by 200m) equally when joining the data from adjacent drill-hole together. for a range of 200m. I though that this was reasonable, but totally wrong!

Fortunately, I can use my stoat-like intelligence and use the plan maps and sections provided and show that there is a strong trend both the geology and mineralization.

Alpala Trends - Plan view



Alpala Trends - Sections



You can see that the highest grades are related to the certain rock types (D10, QD10 and QD15), these units are generally quite thin, but appear to be quite continuous along strike.

So, I've used this info to update the model, and for the geologists among you, I got:



For the range (highlighted), I measured the distance (radius) from the drill-holes to the inferred resource limit outlines, and doubled it to get the base range.


You plug those numbers into leapfrog and you get:



That's more like it! Now, I'm not a resource geologist, but is a 300m base range reasonable for a porphyry deposit?

For reference:

  • Vizcachitas (Los Andes): base range = 400m
  • Constancia = 100-300m (depending on the direction)
  • Rio Grade (Regulus) = 120m

So, it looks to be quite generous, you get the impression that SolGold wanted a billions tonnes of resource come hell or high water.

Comments and observations

Why don't we look at the data in a bit more detail.

The mineralization is deep, the high-grade core starts at ~800m depth and it is surrounded by a large low-grade halo with several small, isolated high-grade zones, which are often defined by a single hole.

left = TAG CuEq grade shells; right = SolGold grade shells; white polygons = >1% CuEq grade shells


















So, off the bat, if it is ever mined, it will be from underground, but is it good enough? Let's plot Alpala's resources on Macquarie's ore value chart.


Yellow star = global resources; Magenta = high-grade core
Only the high-grade mineralization is good enough for an underground mine, the rest is crap.

I want to see if there is any upside, but virtually all of the holes passed through mineralization and stopped in barren rock on the other side.

At the edges of the deposit, drilling only cut a couple of narrow, inconsistent high-grade zones. So the upside appears to be limited.

These resources are a start, a good foundation, but I was disappointed that SolGold insisted in calculating as large a resource as possible when it was obvious that the vast majority would be uneconomic.

I'm also disappointed that they are going to drill a metric-fuck-tonne of holes at Alpala this year. I think the story at Alpala is done, the upside seems to be small, with no obvious areas to  expand the high-grade zones.

We've seen press releases on some fecking rock samples from other prospects, but where are any announcements on planned drill programs for some of the other targets, if they could find a second deposit, close to surface at the same grades as the Alpala global resource (>0.5% Cu), then someone will look very closely at acquiring SolGold.










Tuesday, December 26, 2017

Nickel Mountain - data redux

Fortunately Garibaldi haven't released any data from the remaining 4 holes (EL-17-10 to 13), so I was bored and compiled some of the old data for fun (excluding trenches).

Here is an updated Leapfrog Viewer file (link) with the Garibaldi and historic drilling data.

I've also brought in the historic surface geology maps, the referencing is a bit off as the old maps are in imperial units, but they are close enough to match.

Here is the Garibaldi Figure 1 - Plan Geological map, that isn't on the website, but was sent to me.

Yellow line = trace of hole EL-17-14
I'm not disclosing any non-public information, as the map that GGI are using is just a digitized version of the scanned, hand-drawn 1965 geology map.



And both, GGI map superimposed on the 1965 map

Snap!

So, have Garibaldi done any surface mapping or just geophysics and drilling?

A rhetorical question...

A quick section

Drilling below red b;obs = Exploration Success!!
We can see that all GGI have done is:

  1. Drilled below the historic holes to check for the continuation of Ni-Cu mineralization
  2. Drilled a few holes into the other sulfide zones mapped in 1965.
So, nothing clever here, and I'm surprised that in reality, such little work has been done outside of EM (again, we don't have any usable amps from this program) and drilling.

anyway, I look forward to receiving the results from holes 10-13, these results are a couple of weeks overdue. It only took GGI 19 days to get the results for hole 14, so I'm guessing that hole 10 would have been completed a month earlier.





Monday, December 18, 2017

Regulus - Antakori update

Just a quick update, a couple of weeks ago some additional assays were released by Regulus from Antakori (link).

Summary


  • Drilling restricted to the edge of the property
    • Focus on HS-epithermal system by Coimolache - drilling to extend pit resources
    • It is going to be interesting to see some drilling in 2018 designed by Regulus
  • Arsenic restricted to the Intermediate Volcanics and the HS-epithermal mineralization.
    • Minimal As in Skarn zone.
  • Thick, but relatively low-grade Cu mineralization hit by hole 17-161 extends the limits of the Skarn mineralization by 400m to the SE, but the elevated Zn and decreasing Cu indicates that it was drilled near the edge of the system.
I've brought in the new data into 3D and run it through Corebox's Drill Hole Interval calculator, and built a 3D model, that you can download it from here (link - note: it is 63MB in size). I want to see how the Cu, As and As are related.

DISCLOSURE: I have used the assay information from Table 2 as it includes assays for Ag, Zn and As. Its intervals are slightly different to Table 1, from where the press release headline was is referencing, so there will be slight differences.

Geology

We can see that all the 2017 drill-holes have come from around the SW margin of Regulus' concessions. When we overlay this information onto a satellite image we can clearly see that the drilling by Coimolache is focused on drilling the extensions of the High-Sulfidation (HS) epithermal mineralization that they are currently mining.

Black = 2017 Drill-holes
Results are focused along the SW margin of the Antakori concessions, it looks like Coimolache are focusing on drilling the extensions of mineralization currently being mined.

Here are a series of sections from the latest results.

Section - L1050NW - Drill-hole AK-17-003 and 003A

Copper




We can see that the highest copper grades (>0.25%) appear to be found at the contact between the HS-epithermal (in the Light-green Upper Volcanics) and the skarn mineralization (in the Light Blue limestones), and are the discrete >0.25% Cu zones restricted to the narrow, intrusive dykes (pink and red units)?

Gold



It appears that all the gold mineralization is found in the upper HS-epithermal zone. Minimal gold appears to be found in the intrusive rocks).

Arsenic



Here we see As is restricted to the upper HS-epithermal zone with minimal As in the Skarn.

Section - L200NW - Drill-hole DHSF17-161 and AK_17_004 (results pending)

Copper

Again, Cu is restricted to the Skarn (limestones). It is generally low grade, around 0.1 to 0.25% Cu, but there are a couple of narrow, high-grade (>1%) zones that appear to be associated with either the old breccias or narrow Young Felsic units. In the NE, several short holes have intersected narrow Cu-Au mineralization associated with narrow, massive sulfide veins.

Gold

Minimal gold was intersected by hole 17-161, this hole didn't intersect HS-style mineralization within the AK concessions. It will be interesting to see how much HS-mineralization will be hit by hole  AK_17_004.

Arsenic


Again, minimal As is found within the skarn units.


So you can see that the Cu grades are gradually decreasing to the SE, and the elevated zinc assays seems to indicate that hole 17_161 was drilled into the peripheral part of the large Antakori skarn system, suggesting that the high-grade core is probably located to the NW.





Wednesday, December 13, 2017

Timok - the Lower zone

Some updates to correct for some inaccuracies, and to update the resource table to include additional information.

And now for something completely different...

I wasn't expecting the Spanish Inquisition over Nickel Mountain.


Back to reality, Nevsun have been releasing some great results from the Lower Timok Zone (link), we can see on the accompanying plan maps and sections that this zone is large, but deep.

Figure 1 - The Plan Map

You can clearly see the footprint of the Lower Zone, with approximate dimensions of 1.5km wide by ~1km. To the south, we can see the smaller, but very high-grade Upper Zone.

Figure 2: The Section....
So we can see that the Lower zone extends from 800m to ~2000m below surface. I've added some annotations.

Figure 3: The horse chestnut---hurrah!

We can see that there is potential to extend the known mineralization to depth, and maybe to the West, where no deep drilling appear to have has occurred beneath the Upper Zone.

However, I commented in previous posts that one of the problems at Alpala was its depth. The initial drilling didn't appear to outline a resource that was sufficiently large or high grade to support the development of a stand alone, large-scale, underground operation. Do we have the same issues at Lower Timok?

I've compiled as much data that I can find for Lower Timok, and I've also included the recent (2016-17) drilling from the high-grade Upper Zone as well, just to allow you to compare their location, depths and relative sizes.

You can download the 3D viewer file from here (link).

The first step was to evaluate the size and grade for the Lower Zone. I created a series of grade shells for Au, Cu and CuEq (I used Nevsun's CuEq calculation 1g/t = 0.7% Cu). These are all included in the Leapfrog viewer file as well as all the sections from the December 4th PR.

Disclosure:

  • I haven't factored in any recoveries for Au and Cu when calculating the CuEq values
  • I have not been able to find any assays for holes TC150073 and TC160073B
    • These holes go through the center of the Lower Zone, and therefore my Bad Estimates (TM) are likely to be slightly low. I'll keep looking for this data,and when I find it, i'll update the model.

Here are the assumptions I used to create the grade shells in Leapfrog Geo:
  • Base range = 400m - the holes are widely spaced (they may even be too wide to determine an initial inferred resource)
  • Interpolant = Spheroidal
  • Drift = None
  • Specific Gravity = 2.7 (assuming the rocks are granitic in composition with minor sulfides)
  • I applied a filter so that the Upper Zone drill-holes would not be used to create the various grade shells.
Here is an updated "officially bad estimates" (TM) for the Lower Zone:


Just a couple of observations:
  • There appears to be a lot of contained metal at Lower Timok, 
    • the majority is too low grade for an underground operation and should be considered as 'mathematical' resources.
  • The overall gold content is low
    • Will the concentrates contain payable amounts of gold?
At the bottom of each table I've given a tonnage and grade at various cut-off limits. I'm going to use a 1% CuEq in the following section.

If we compare my 'resource' CuEq grades and plot them against the Macquarie Reseach report on large-scale underground porphyry projects.


Red dashed line = average grade for Lower Timok (using a 1% CuEq cut-off) = 1.28% CuEq
Blue star = cut-off value for a underground block cave operation for a brownfield operation
Green star = cut-off value for a greenfield block cave operation


Lower Timok grade vs other Block cave operations/development projects 
We can see that Lower Timok isn't quite good as a stand alone greenfield development project, but as it is adjacent to Upper Timok, with a quite robust PEA, we can considered Lower Timok to be a brownfield project, and now we see that it is high enough grade to pass the Brownfield hurdle grade.

However it isn't quite as simple as that. If we look at the recently released PEA from the Upper zone (link), and we are told:

  • Initial Capex ~$US615M
  • Mine Life ~15 yeears
  • Mining rate ~8,900 tonnes per day
  • NAV = $1.5B
If we compare this to Stage 1 for Wafi-Golpu project (link), which I think could be a good analogue to the hypothetical costs to develop Lower Timok.


You can see that I've highlighted some important values.

  • Initial Capex = US$2.6B
  • Ore mined and milled = 149Mt (approximately similar to Lower Timok)
  • Mine life = 28 years or approximately 15,000 tonnes per day
  • First ore milled = project development time line = 60 months or 5 years
  • Steady-state production = time taken to reach full capacity = 90 months or 7.5 years

So, if Nevsun were looking to develop the and mine the Lower Zone, it will require significant additional CAPEX, larger milling and surface facilities (tailings and waste dumps) than proposed for the Upper Zone mine. This means that Lower Zone is a half-greenfield half-brownfield project - I'll call it an Olive Project, and that Nevsun have a couple of options:

  1. Mine the Upper Zone, make lots of money and 'keep' the lower zone on their books as a large resource, but don't develop it.
  2. Mine the Upper Zone, and after 5 years start the permitting and development of the Lower Zone, and slowly increase the size of the surface facilities (Mill, tailings, waste dumps etc.), and bring the Lower Zone into production towards the end of mining the Upper Zone.

This is my hypothetical scenario for Lower Timok

  • Initial Capex = US$1.5B (the topography is significantly easier around Timok so less earth moving, and assuming that they will use and expand on the Upper Timok surface facilities)
  • Ore mined and milled = 200Mt
  • Mining rate = ~15,000 tonnes per day
    • Need to expand surface milling facilities by 5000-6000 tonnes per day
    • Expand the flotation circuits
      • I don't know how feasible this is, but it is something that Nevsun may need to consider to include as part of the development of the Upper Timok project, especially permits for expansion of tailings facilities as these may taken several years to obtain.
  • Development period = 3-5 years
  • Time taken to reach full capacity = 5-7 years (including development period).
    • The idea is that the project would need to be developed while the Upper Zone is being mined and then Nevsun can extend the infrastructure from the Upper Zone development into the Lower Zone.
At the moment, there aren't a huge number of drill-holes into Lower Timok, and the drill hole density is still quite low (approx. 300-400m between drill-holes), but the initial data shows a robust porphyry system, that is open in a number of directions.

The initial (i.e. very bad) review suggests that it could support a medium-sized underground operation, but its development is dependent on the economics of the Upper Zone and how Nevsun/Freeport decide to develop the Lower Zone.

Will Nevsun just focus on the Upper Zone or will they factor in the development of the Lower Zone into their future decisions for the project? 

For investors, the upside could be, that if the Lower zones becomes significantly larger (e.g.>500Mt at similar CuEq grades), would Freeport step in and take out Nevsun to consolidate their ownership of a large porphyry Cu-Au deposit not owned by a major mining company?








Saturday, December 9, 2017

Garibaldi - Mighty Massive Sulfides - The Return

We got the results from hole EL-17-14 today (link).

Summary:


  • Hole EL-17-14 assays are high-grade, but drilled down the guts of the Discovery Zone
  • Drilling still restricted to a 50m wide section, so 3D orientation of massive sulfide zones are hard to determine accurately.
  • However, the drilling to date indicates that the massive sulfide bodies are quite small, but most ore open in several directions suggesting potential to add, albeit limited, tonnages.

Pro-trick for Garibaldi - if you are going to put a table in your press release, don't include a sub-interval that is lower grade, it just shows that you are smearing a very high grade zone over the thickest interval possible.



It is also obvious that this intercept is not close to true widths as suggested below the table, but it shows that Garibaldi thought that the Discovery Zone was parallel to the upper sulfide zone intersected by holes EL-17-04 and 09 and dipping approximately to the NW.

this is their own interpretation from all of the data
This means that hole EL-17-14 was orientated to drill down the guts of the Discovery zone to try and get as long an intercept as possible, so here is my very simple interpretation, based on the intercepts in holes EL-17-14 and EL-17-09.

10.63m is almost 16.75 meters?
It looks like the Discovery zone is ~10-11m thick, based on the >2% Ni assays and reported massive sulfide mineralization.. This is significantly less than the 16.75m than Garibaldi are suggesting in the notes beneath the assay table.

I've brought the data from hole EL-17-14 into Leapfrog and created a new model (link), I've also done some officially bad mineralized material calculations (TM) to get an idea of the size and potential at Nickel Mountain, to see how GGI can justify a ~CND320m market cap.

Add caption
Here are my assumptions:

  • Search distance = 50 m, 
  • Specific Gravity - I've used an increasing value based on grade, using densities from Sudbury as a base (Note - SGs at the Eagle deposit average 4.44 t/m3)
    • >0.5% Ni = 3 t/m3
    • >1% Ni = 3.5 t/m3
    • >2% Ni = 4 t/m3
  • There is no specific orientation on mineralization - as all drilling to date is restricted to 50m wide plane.
If we compare Nickel Mountain, with the best-est-ist grades in the wurld, to the Eagle Deposit.
Eagle, Dec 2016 Reserves (Lundin Mining)
Eagle was acquired by Lundin Mining in 2013 for US$325M (link) or CND$416 (at current exchange rates), which is only CND$100m more than Garibaldi's current market cap.

Why? There are only 14 holes drilled at Nickel Mountain, no resources, and the massive sulfides appear to be narrow, and inconsistent. Before you hurl abuse at me, just take a step back and ask yourself - what does GGI have to warrant such a high valuation?

I also can't see the upside potential, and I don't like that GGI have been very poor at releasing quality data for the project (you could think there is a reason for this). We still have no plan maps, no geophysical sections, no presentations etc. This isn't something you would expect from professionals running a professional company.

Simply put - Nickel Mountain, Es Mundus Excrementi!

Boring Geology Bit


I've also included some scenes showing my interpretation of the various sulfide zones and their orientations that I can determine from the limited data available. I've split it into 4 separate zones, as I was intrigued by this statement.


Here are the various massive sulfide zones, I've decided to label them, as Garibaldi can't.



Using the data provided, I've created a series of estimated trends for each zone.


To create these trends I lined up the various massive sulfide/high-grade zones in 3D. It was fortunate that Garibaldi don't label these zones on their cross section or in the drill intercept tables.

I apologize to any non-technical readers, the following section is going to be full of geo-wank. I've included some features on the sections through each zone:
  1. Colors - the Zn grade shells on the section line
  2. Black line = 25m distance contour from each drill-hole
  3. Grey line = 50m distance contour
The distance contours show me where drilling has and hasn't occurred and is useful to identify areas that have and have not been drilled.

Discovery Zone

This is the zone that Garibaldi have been getting erections over, discovered by hole 09, but only recognized 5 holes later.

This zone appears to be almost horizontal, intersected by holes EL-17-02, 04, 09 and 14, but only holes 09 and 14 hit significant sulfides and mineralization.


We can see that hole 09 and 14 are just 20m apart, and the entire zone is only 60m wide, and closed off to the NW by hole EL-17-02 and to the SE by hole EL-17-04. However, it is undrilled to the NE and SW. For me it will be interesting to see if holes 10-13 explore this zone.

Upper Discovery Zone

This zone was defined by holes EL-17-04 and 09. It dips, relatively steeply to the west and is quite narrow (2-5m). 

biggus dickus
Drill-hole EL-17-02 has closed off this zone to the northwest. Hole EL-17-14, 100m to the east, and EL-17-01 ~50m to the west didn't hit anything, again suggesting this zone is quite small, but with expansion potential.

Northwest

This zone has been well drilled, it sits above the Historic Zone and appears to be steeply dipping to the SE.

Note: this section is orientated with north to the right.

So this zone is closed off to the south (left) with the drilling intercepting narrow >1% Ni zones. However, it is open to the North (right), with hole EL-17-08 intersecting ~6m of massive sulfide mineralization, so again, there is potential to expand this zone with additional drilling.

Historic

This is where exploration occurred in the 1960s. It has been well drilled by Garibaldi. To date 6 holes have drilled through this zone, but only 2, EL-17-03 and 07, have returned decent grades. It is closed off to the west by holes EL-17-05 and 06 that were unmineralized. To the north by hole EL-17-08 (unmineralized), and to the west by hole EL-17-01 that cut disseminated mineralization.

However, there is minor potential for this zone to continue to the NE, but the drilling by Garibaldi show that it is very small


So, all I can see is that the sulfides are small, have very variable thicknesses and grades over very short distances, but each zone is open in 1 or more directions. It will be interesting to see where holes 10-13 are located (I'm surprised that they were not able to release the assays from these holes as they were all drilled before hole 14 - could there be a reason - i.e. they are shite), if they are in the same Section, then, for me it just means that even Garibaldi knows that they are small and focusing on this small zone as it is the only area with evidence for massive sulfide mineralization.