Discussion regarding reserve calculations
posted on
Nov 02, 2007 01:37PM
Drilling about to restart at La Fortuna, 1st resource calc being worked on
The following is a copy/paste of a posting I made on Stockhouse when another contributor was querying about resource calculations; it is the post I believe nodrog was commenting on in his last post.
The references made to the "report" within my post are regarding an analysts report that came out some time ago in coverage of GL. I hope this is of interest.
Good reading.
Salut
Leigh McBain
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I did actually post an estimate of what the resource size looks like for T11; only T11 can really be guesstimated at this time, because it is the only area with sufficient drill data to do so with. There is however insufficient drilling data for the company to publish or publicly support any estimate (because of 43-101 compliance requirements).The company has intentionally drilled enough to get a good idea of what T11 looks like, but also wanted/needed to drill a number of the other targets to prove mineralization and geological similarity; then using the geophysics report they can make a decent argument while negotiating that there is extended value beyond the T11 resource. The additional zones would of course be discounted in a any calculation, but there would still be attributed value.
I figure the current estimate for T11 would be in the 1.2 to 1.5 million oz. range, using the original 250-300 thousand oz. estimate (Ocean Equities) and figuring on an extension factor of about 5 times, given the recent data. This does not take into consideration the fact that the T11 zone appears to interconnect with; Amphitheater, Geochem and it also looks to be geologically related to G zone.
G zone is starting to look like it may be a second area similarly mineralized to T11, although more data is of course required to make that statement more compelling. For arguments sake, consider it to be similar and 1/2 the resource size (it may be much larger than that, I am being conservative) and you have another 3/4 of a million oz.; the geophysics suggest that there is an underlying structure below the very shallow vein system at CR and that it looks to be contiguous with G zone. So given this perspective, attribute a similar value to that area and you have another 3/4 of a million oz.
Looking at the above perspective we are sitting on 2.5 to 3.0 million oz. and there is no consideration for Geochem (and the trending in that direction from T11 is looking good), ML, Amphitheater (or it's underlying substructure), CB or the area SE of Amphitheater where apparently there have been some very nice surface samples.
The property appears to have a high probability of hosting in excess of 5 million oz. aggregating multiple zones. Based on the geophysical data the company has, it appears there is decent potential for a deeper underlying porphyry structure that would extend the overall potential far beyond that number. That is all educated guess work at the moment though, as we need drill results to go there.