Hi Dirtpoor,
Let me take a stab at explaining it. I'm sure a professional geologist will laugh at my attempt but here goes.
Firstly, there's no such thing as "Proven Potential." The phrase is a contradiction or oxymoron. What you refer to is proven reserves of which MLSM currently have none at this point according to Southampton's valuation shown on MLSM's web site.
Reserves are proven by drilling. Imagine a pound of butter concealed under a blanket. You think it's butter and you think you know the shape but you aren't sure. If you drill a series of holes through the blanket into the butter, you'll eventually prove it's butter and be able to outline the shape of the deposit. With enough holes, you'll be able to tell if it's one pound or a 1/2 pound bar, etc. In a nutshell, you have to learn the shape first - then you can calculate the volume and weight - which in mining is tonnage.
It's the same at MLSM's Potter property. In their case, there is a VMS deposit containing copper, zinc, silver and gold. This deposit would probably have been formed in a flat-lying bed on the ocean's floor over 2 billion years ago. Generally, any copper gold portion would be on the bottom with zinc silver deposits forming on top. Because venting can be intermittent and conditions change, sometimes there can be several layers involved with such deposits spread over different locations. Since forming, the earth's crust has heaved and fractured - the old ocean floor and it's layered deposits now resting almost vertical and facing north.
To prove ore, a series of holes must be drilled through those old beds or lenses. In some cases, these beds can be very uniform but in MLSM's case, they are not. Secondly, these beds or lenses are quite deep and in faulted ground so drilling enough holes to truly understand their shape and hence be able to calculate tonnage is expensive.
Past drill holes from Potter in plan and section are documented on their web site. Some are good, some not so good. Being inconsistent, no shape, volume or tonnage can be accurately determined. One of the hopes for this years program was that enough holes would be drilled to indicate shape from which tonnage and grade could be determined. Unfortunately, that no longer looks likely.
Lastly, if you read Southampton's valuation report, I think they put a figure of $6 - 8 million for the property. Check the number of shares outstanding, possible liabilities, etc, and you can arrive at a rough estimate of what a MLSM share might be worth. |
