TODAY'S DISCOVERY, TOMORROW'S FUTURE

Creating shareholder wealth by advancing gold projects through the exploration and mine development cycle.

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Message: Re: exploration guy

Oct 09, 2010 09:09AM

The new Milestone results show continuing improvement, particularly with the gold grades averaging better than 1 g/t in 6 of 9 holes reported. However , I still think Milestone is a work in progress for the following reasons. If you take Brian's numbers in the press release for the deposit geometry you get 30 m width by 300 m depth by 2500 m length or about 22.5 million cubes. Using 2.7 tonnes\m3 you get 60.75 million tonnes, which is about one quarter of the tonnage numbers for the Hammond Reef deposit which is used for comparison by Kodiak( 260 million tonnes grading 0.8 g/t or about 6.7 milllion oz). If I use 1 g/t for an average grade then I get about 2 million oz for Milestone. But this is too optimistic in terms of geometry and grade so I have trouble coming up with a more realistic estimate above about 1 million oz. They need to do a metallurgical test to estimate what percentage of gold could be recovered form this type of rock and they need a scoping study to demonstrate some preliminary economic numbers. The Teck land they just optioned will need some exploration work followed by drilling so it's going to take a while and more money to develop Milestone. I like Milestone but don't think it will add share value in the near future. The big hurdle right now is the Magino deal. Once the deal closes and the revised resource estimate is released then we could get some share price action. They have to get the price above $ .50 this year because they clearly will need to raise money by year end. I recall that they also would like to get a scoping study or PEA done on the Magino deposit by year end. If the analysis looks good then we may be able to use a higher value on the $/oz number when estimating a share price.

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tau
Oct 10, 2010 07:24AM
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