High grade vein or low grade bulk tonnage gold?

There are always exceptions, but a low grade bulk tonnage gold deposit is nearly always preferable to a narrow but higher grade deposit. That said, it can be difficult selling lower grades to shareholders during the early stages of exploration.

Narrow vein-style deposits were commonly mined by the old-timers because they produced high grade ore for minimum amount of digging. Examples are common to northeastern Tasmania and Victoria as well as Pacific rim countries including Papua New Guinea, New Zealand and Fiji. Gold-, silver-, copper-, lead- and zinz-bearing minerals commonly reside within quartz in sheet-like ‘veins’ formed in mineralised faults or breaks in the country rocks. Veins can be anything from a few centimetres up to several metres wide, with mineralisation often further concentrated into ore shoots (linear bodies within the vein of even greater thickness and/or grade).

Vein-style deposits can produce very high grade assay results, and visible gold is not uncommon. Spectacular early results mean they can be a favourite to report as an Exploration Result under the Joint Ore Reserve Committee (JORC) Code. However, (and isn’t there always a ‘but’…), initially promising results from vein-style deposits should be considered in context with other characteristics of this style of mineralisation.

Firstly, a good result can be difficult to duplicate. These deposits can be ‘nuggety’, that is, they can yield a high grade at one location and next to nothing only metres away. Put six holes into a vein deposit and you can almost guarantee an exciting Exploration Result. But, the nugget effect can make it very difficult to turn that Exploration Result into a JORC Code compliant Resource. This is because a Resource necessitates some degree of certainty to the continuity of the mineralisation, and this can be difficult to establish where grades vary widely over distances less than the spacing of the drilling.

Secondly, vein-style deposits are often of smaller tonnage (there’s nearly always a payoff between grade and tonnage with gold). Even where of high grade, the size of the deposit might not warrant the cost of the infrastructure necessary to process the ore. A deposit might produce a good Exploration Result, but it needs to be shown to be economic to mine before it will ever yield a JORC Reserve.

Thirdly, vein-style deposits can be technically difficult to mine. Vein mineralisation commonly forms in breaks or faults (a break across which there has been movement). Unless the fault has sealed then mining in broken ground might prove difficult. Even where sealed, a mineralised fault might juxtapose rocks of markedly varying character which can be similarly problematic for mining.

The above do not preclude an exploration success from a vein-style prospect, but they do make it more expensive to prove a Resource and/or Reserve, and subsequently realise profits from mining.

Bulk tonnage deposits, by contrast, tend to be of more consistent grade and occupy more homogeneous ground (porphyry-style deposits, for example). Unfortunately, these deposits also tend to yield far less inspiring grades in their early stages of exploration.

How easy would it be to discount a lower grade porphyry prospect in favour of spectacular grades and perhaps even visible gold in a vein?

Vein-style mineralisation can be economic. It can also be an indicator of associated porphyry-style deposits. However, care should be taken to look beyond early high grades and to make sensible decisions about whether vein-style mineralisation warrents the additional work required to produce a viable Reserve.

In summary, a high grade intersection is always good, but show me the Resource!

I was inspired to write this article after walking around the edge of the Waihi Goldmine open cut. Old workings and veins are visible in the pit walls. This is an example of a vein- (stockwork-) style of gold mineralisation. A stockwork comprises multiple smaller veins that can be bulk mined. This contrasts with many epithermal and mesothermal vein deposits which comprise only one large vein.