The quoted text is from a 2010 tech report on AM Gold's Yukon gold property. It is a wide low grade bet. AM Gold got suspended from the TSXV recently over some controversy on third party reports put on their website, since removed.
The third party reports made some non 43-101 estimates of resources. This is a no-no. No telling when the TSXV will let the company out of the woodshed, but if and when they do it might be a spec play on summer gold.
A possible analog of this kind of grade (0.5 to 0.7 gms/tonne Au) which is commercial and operational with full milling is the Fort Knox Gold deposit in Alaska. It is a granite with a grade of 0.25 gms per tonne gold. Amazing they can make a profit at that grade, but they do.
If the entire 700 metres by a true width of 165 metres were uniformly mineralized to a depth of 300 metres, then the body might contain 700 X 165 X 300 X 3.28^3 / 12 = 101 million tonnes. At 0.5 gram grade the contained gold might be 1.64 million ounces.
They indicate here that the resource may go 5 times this depth. An open pit realistically would only access to a depth that was perhaps 2.5 times stripping ratio. The orebody is on a hill, so the stripping ratio may be moot, but depth may proceed to 689 metres. This could double my above estimated ounceage. It remains to be seen as to whether the body could be mined to this depth.
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"This report updates the Company’s inferred resource estimate on the Property of 24 million tonnes grading 0.7 grams gold per tonne first reported in June 2010 (Cole 2010). A 12-hole diamond drill program totalling over 4,100m was subsequently launched this summer to expand the size of this resource. Much of the contents of the initial reporting have been repeated in this document, with those areas requiring updating amended.
The Company has been active on the Property since 2002 and have completed five RC and/or diamond drill campaigns since that time. The bulk of the drilling was by diamond drilling with a total of 39 holes and 8,723 metres core now having been drilled.
An updated estimate of the Red Mountain Resource was completed in November 2010. The Inferred Resource has been revised and updated and is now estimated to total over 79 million tonnes grading 0.5 grams gold per tonne.
This translates to approximately 1.3 million troy ounces contained gold. Estimation method utilized was the constrained block model type. The resource estimate was performed commensurate with CIM definitions (2005). Cut-off employed was 0.2g/t Au and the specific gravity utilized 2.55g/cm3.
Gold mineralization is related to a porphyry intrusive body and where it is cut by a northwest trending fault zone, the Jethro Structure. The gold resource zone has a projected strike length of 700m, strikes 120°, and dips steeply southwest. True width averages 165m (range 130m – 190m). Gold mineralization is associated with broad zones of disseminated sulphide with higher grade mineralization being associated with areas with steeply dipping sheeted sulphide-bearing quartz vein zones as well as multi-generational quartz veining, sometimes stockworked. The gold mineralization is hosted in quartz monzonite porphyry intrusive rock and also in the encasing meta-sedimentary sandstone and quartzite rocks as well within the bounds of the Jethro Structure.
Twenty-four inclined drill holes with a cumulative total of 6,609m were utilized in the resource estimation. They have an average depth of 275m, with the deepest being 527m. Dips ranged between -50° and -80°. They are spread across 22 section lines spaced at 25m or 50m intervals. Core size ranges from HQ to NQ.
Resource was projected no more than 50m from the terminal section lines. In situations where drill holes collared and/or ended in mineralization above cut-off, the area of influence of a resource polygon was not extrapolated beyond 20m, except where supported by adjacent sections.
These types of deposits tend to have more vertical continuity than lateral. Mineralization has been verified to a depth of 980m elevation, or just a little shy of 500m below surface. The floor of the grade model was projected to an elevation of 1,200m under the original resource area, 1,300m elevation under the newer drilling to the southeast. The floor was lowered accordingly where deeper holes penetrated into mineralization at deeper depths.
Hole ICE10037 was drilled just north of the Resource and off the main Jethro Trend. Mineralization in the order of 233m grading 0.36g/t Au in porphyry intrusive rock was intersected. Hole ICE10037 possibly describes an entire new gold zone.
Further work is warranted and recommended. A budget to support a 10,000 m diamond drill program to further develop the resource, metallurgical testing, boundary surveying, a new shorter access road, as well as test other zones of interest on the Property is outlined to cost $5 million."
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