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Tuesday, May 2, 2017

Solgold - update

DISCLOSURE - I own shares in Sol Gold. I'll try to make this post unbiased, but I want everyone to buy lots of shares so that I can make some money!

We got some news a couple of weeks ago that gave us the final results for hole 21 and a PR today with some visual results from hole 23R, 24 and 25.

Hole 23 was drilled right through the middle of Alpala and will get some great results. Holes 24 and 25 were drilled to test the SE continuation of the Alpala system. They hit ever decreasing thicknesses of gradually lower grade mineralization, which is what you would expect as you move away from the core of the system.

Here are the updated official bad estimates

  • Copper increased to 1.9Mt
  • Gold increased to 4.95Moz 
Looking good, but we see that there is a smaller increase in high grade (>0.6% Cu and 0.5 g/t Au), which is the material that will be mined via and underground block-cave operation.

My prediction:

  • Hole 21 - 925m @ 0.5% Cu, including a 400m >0.6% Cu - hole only 100m from hole 16, which hit a lot of good stuff
  • Hole 23 - being drilled, target between holes 16 and 19, so I'll expect
    • 200m >1% Cu and 1 g/t Au (@ 1,000m depth), within a 1000m zone of 0.3-4% Cu and 0.2-0.4 g/t Au


Hole 21
  • 844m @ 0.73% Cu and 0.43 g/t Au
    • inc. 670m @ 0.82% Cu and 0.51 g/t Au
    • inc. 304m @ 0.99% Cu and 0.63 g/t Au
So, I was a bit-off, sort of like my high-school review - has talent, just needs to work harder.

Hole 23 

  • 573.2m of sulfides from 563.7m depth
    • at >1.4% volume percent chalcopyrite
    • or a guesstimate grade of 0.48% Cu
  • a higher grade zone from 979.2m to the current EOH at 1136.9m
    • at >2.9 vol-percet Chalcopyrite
    • or a guesstimate grade of 1% Cu
Hole 24 - 248m @ >1.1 volume percent chalcopyrite or 0.38% estimated copper

Hole 25 - 454.2m @ >1.5 volume percent chalcopyrite or 0.52% estimated copper

I calculated the guesstimate grades by taking the volume percent of chalcopyrite and multiplying it by the copper content of chalcopyrite

so 1.4 * 0.346 = 0.48% Cu

However, it is very hard to accurately measure the grade visually, so we can use these as guide to where copper is present or absent.

NOTE: I haven't used the estimated copper grade in the tonnage calculations.

Here is the updated leapfrog model (link)


It is hard to gauge the importance of hole 24 as it is still being drilled, but from the information we're given:

  • Hit a narrow low-grade copper zone 400m away from other mineralized drill-hole
  • 248m @ 1.1 volume percent chalcopyrite or 0.38% Cu from ~740m depth.
porphyry getting thinner to the right (SE)
We can also see that hole 25 (454m @ 0.52% Cu) is also a step down from the high-grades hit in hole 21 in the core of the system. This indicates that we are moving away from the high grade core into the lower grade periphery. 

This is normal in porphyry systems - you have the thickest, highest grade mineralization in the core of the system and lower grade at the edges.

Drill-hole 23 was drilled smack into the middle of the high-grade core, so this will get some decent mineralization, but won't have a huge impact on tonnes (see section below). I will expect it to hit good copper grades until around 1300m depth. I'm going to upgrade my guesstimate to:
  • high grade (>0.8% Cu) from 980m to 1350m
Hole 23 - drilled straight through the guts of Alpala.