Right now Old Joe's back of envelope calculations are as good as anything any of us could crank out (unless there is a NOT lurker here). Personally I use excel but have been known to doodle!

There is an assumption that if it comes from a CAD/Modeling program it must be better. Sort of like if the report is typed the content magically gets better. That is not always the case. Its not the software but the information that the operator has access to that influences the value of the calculation. Information that you and I do not have access to.

For example:

1. The specific gravity of barren ultramafics is around 3 g/cc +/- 10%. The specific gravity of nickel rich (say 5% Ni) sulphur poor deposit can easily be in the 4 - 5 g/cc range. So not knowing the specific gravity alone can throw an estimate off by 30% to 50%.

2. Grade intervals. A significant factor in resources calculation is the consistency of grades within a hole and between holes. Without access to assay by assay results there is no way to calculate this. With only aggregate results being reported you can’t project the zone of influence around specific grades so a high grade zone may get over or under reported. So in essence you are estimating an estimate by using average values over a composite length.

3. Widths --- We know that drill holes most often intercept a deposit at an angle and we have to correct for that angle relative to the geometry of the deposit. If the drill hole stays straight (and they never do) and we hit a deposit that is flat in shape it’s a relatively easy job to estimate ‘true’ lengths of the intercept using trig. The challenge with this type of the deposit is that they can swell, contract and wander around a bit. Depending on where you hit them and the angle you hit them at you get an exaggerated width (shallow angle of intersection on a swell) or near true width (perpendicular to the zone). So you need to know the angle of intersection that you get from measuring the contacts of the deposit, and the angle of the drill hole that you get from surveying ‘down hole.’ I've seen holes go from 70 degrees to under 37 degrees over a couple of hundred meters not to mention that they can drift laterally as well. So, you use both of these to estimate the shape of the deposit and inferred width. If you don't correct for the geometry of the intercept accurately you over estimate the deposit size. You then extrapolate the width to the nearest drill hole. A lot can happen between drill holes at wide spacing hence the need for geostatistics and infill drilling.

4. Recoveries – Metallurgy determines how ore is processed and in turn determines potential recovery for the various elements. Depending on the value of the individual metals in the ore, the process will be optimized for some elements over others in order to maximize the value of the RECOVERABLE metals.

So at the end of the exercise you don’t get much more accuracy with the software approach then you do with the napkin UNLESS you have access to information which is only available to those that work for NOT. Me, I like the back of the 'napkin/envelope/memo' approach. I can do it wherever I am and whenever I feel like it.

As to Genuity, they are in the same boat as us with regard to access to individual assays, S.G., etc. So their estimate might employ better modeling then our envelope approach. They might be able to extrapolate from other deposits as to S.G. for various rock and grades in the area. They might be able estimate recoveries better based on access to databases of other mines. BUT they to are ‘guestimating’ the details to get their estimate. Its nice and glossy looking but not much more accuate then the rest of us can do.

We will see the company’s resource estimate in a couple of months. Until then, the envelope approach works just fine as long as you accept that it is, as one prospector I know put it, “a wild ass guess”, that may or may not be right. Lots of fun, no harm done, and easy to do.

…. Been There