In order to be economic, you need both size and grade, as one by itself won't make money. Several companys are focusing on Mongolia because the geology supports both good grades and large tonnage deposits. The market's preference (fed by analysts) is that bigger is better. Therefor, generally analysts preface any review of a project with "it has to have 1 million contained ounces before we'll look at it."
Nature is capriceous and sometimes gives us 1 million ounces in 1 million tons of rock, but usually the bigger the reserve, the lower the average grade. Hence, the Eskay Creek grades of plus 1 ounce per ton are somewhat restricted, whereas the Fort Knox deposits of the world of 0.03 ounce per ton material is measured in 100's of millions of tons. This had led companys to preferentially explore, acquire, and develop large, low-grade reserves. These kinds of deposits are amenable to the rapid definition of ounces, whereas relatively few narrow high-grade mines ever had 1 million ounces of reserves on the books. This even includes some plus 10 million ounce producers.
The joke of the prospector, confused by the new focus to these bulk-minable, large low-grade deposits when their experience has always been on the narrow high-grade mine is "I've got a really big mine, I'm just not sure it's low enough grade to interest a Major Mining Company".
Good-luck
Dave |
