Estimating the potential size of a deposit is essential to figuring out whether or not a company/property/deposit may be worth investing in. But as jrichm99 stated there is a tremendous difference between putting the assays and lengths into a spread sheet and cranking out a ball park estimate and the degree of work necessary to get a reserve vs a resource vs an estimate. As long as you understand that you are ball parking the numbers it is useful. The danger starts when people start to believe their own estimates are reserves.
We are in the infancy of this deposit in terms of the work that has been completed. less than 3 months of drilling on what will take a couple of years to get to the point of deciding if it will be a mine. I'm very optimistic about the potential but we have a long way to go.

Here is a list of some of the things that will need to be done from a geological perspective. They all take time and it will probably be about a year of all out work before we get to a formal resource estimate.

1. Deep drilling --- Is there a significant sulfide body under the oxides or not. The sulphides and the oxides are almost like having two deposits in one. The oxides get crushed (possibly gravity separated) and then heap leached to recover the gold and silver. We don't even know if the Pb & Zn could be recovered through secondary possessing. The sulphides require a mill with floatation circuits so if they are there but not in sufficient amounts they won't be justification for the construction of a mill with floatation circuits. So deep drilling is KEY to a large mine

2. Delineation drilling to define the size of the deposit --- Right now we are only drilling in the richer inner zone. Great for positive news releases but we have touched maybe 25% of the known surface area.

3. Reconnaissance work/drilling on the property -- It easy to get focused on what we know but it’s equally important to know if there are other deposits on the property. Aside from additional 'ore' you want to know where to build your surface infrastructure to optimize recovery of everything on the property. You can't truck low grade material very far before you run into costs exceeding the value of the material.

4. Infill drilling --- For a geologist this is boring stuff since you hope to see the same as in the adjacent holes. The purpose is to get sufficient reliability between adjacent drill holes so that you can claim a level of confidence in knowing what is between drill holes. The more variation in assay between holes the higher the density of drill holes needed. This is where the geostatistics start to come into play.

5 Metallurgical work --- What is the specific gravity of the types of 'ore'. At Goldcorp’s Penasquito the oxides are 2.4 g/cc and the sulphides 2.6 g/cc. That means a cubic meter of sulphides has 10% more metal for any given assay than a cubic meter of oxide. --- They also will conduct tests to determine the potential recovery of metals (how brittle the rock is, how coarse is the gold, is the minerals encapsulated and hard to recover, are there trace elements that affect recovery such as copper or mercury, what percentages are recovered under what treatment conditions)

6. Bulk sample and test process --- test all your metallurgical work on a large sample to see if there is rum to improve it.

7. Take everything above and you are now in a position to compile a resources estimate that has enough reliability to expect that it will eventually translate into a reserve calculation. At that point it starts to convert from an exploration play to a development project.

So back of envelope esitmates are great for 'ball parking numbers' but a long way from a resource estimate which in itself is a big way from a reserve estimate.

... Been There