I felt this overnight exchange at SH's Aurcana board might be of interest to the shareholders who were wacked by AUNFF's latest PR....
RE:RE:Resource estimate nonsense
by mattbigham
December 12, 2013 - 10:48 PM
282 Reads | Post# 22001663
MM,
I am no geologist but the facts state AUN are facing what all operating mining companies encounter-delineation of economic ore as an integral part of the mining business.
They have changed their production targets due to conflicting resource models,trying to delineate the information and a new mine plan for Block II and III will take time.So,they are going in to Block I -the eastern end of Presidio first.Originally that was planned for years 4 and 5.
AUN just stated that the resource dilineation model that MDA conducted differs with that which has been done-twice-on Shafter.AUN are now: "In the meantime the Company is reviewing the methodologies used by MDA in the new modeling effort." They are wrapping their minds around the conflicting resource models.
This is the third resource model done by AUN,alone. That is DD +++ but is just normal operating procedure.Their original models are not consistent with what they have mined at Shafter so far.
If I understand what is happening ,now AUN are IMMEDIATELY going after the discoveries at Presidio that Kaczmarek is credited with to get Shafter production up and going.Originally,they were going to go to the east end of Presidio 4/5 years from now. They have decided that it is easier to rehabilitate the shafts/hoists and dewater east Presidio that is already extensively delineated,rather than set back production further with conflicting resource models that AUN outlined yesterday.
Essentially,AUN are switching gears and brought in the Chief Engineer that made the discoveries,did the work and has been on site at Presidio/Shafter a decade longer than AUN have owned the project.
As for ore grades,Shafter was mined for six decades with 15 opt grades.That is exceptional ore quality.
Gold Fields owned Shafter/Presidio for 15 years:
In 1977 Gold Fields Mining Company acquired and held the project until 1994, during which time over $20 million was spent on project development. Beginning in 1977 a systematic surface-drilling program of 262,400 feet in 891 drill holes resulted in the discovery of the eastern extension of the Presidio deposit, extending along strike for more than 5,000 feet from the lowest development work in the Presidio mine. Further development was halted due to the decline of the silver price at that time.
You will note that Mr. Kaczmarek was the Chief Engineer for Gold Fields and was the man in charge of Presidio /Shafter during this time.AUN are now using his historical work with Gold Fields and are going to mine the eastern extension HE DISCOVERED.AUN are going after ore that is already delineated:
While working for Gold Fields, Mr. Kaczmarek was the Chief Engineer at the Gold Fields Shafter Project, now owned by Aurcana. During that time, he was responsible for the construction and commissioning of the two existing 1,000 foot shafts and pre-development work at Shafter.
Rio Grande bought the project and performed seven more years of geological work.
Silver Standard then bought it and brought in the mill.
Four major mining companies have now owned Shafter/Presidio and every one of them has done a variety of extensive work on it.
MDA are stating that 'density estimates' overstated previous tonnage estimates. They will revise the resource count down.AUN brought in Kaczmarek three months ago so AUN knew what they had to do six-nine months ago. This is old news that we are being fed now.
They have long since changed their initial mine plan targets to expedite production grade ore.
AUN brought in the very best engineer,mine manager and directors to oversee the operation.
They are changing on the fly and going at it.Nothing will change except the initial Shafter resource count and the original mining plan.
At least that is what I understand going through the revised feasibility and NR's.Anybody wishing to correct me or add to what I see they are now doing is welcome to have a go.I have been going at this one post for over two hours now so time to get my day going.
I expect a lot of change and it is going to be coming at us fast so this is just the beginning.
Buckle up.
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RE:RE:RE:Resource estimate nonsense
by ak27
December 13, 2013 - 06:05 AM
188 Reads | Post# 22001969
Hi Matt, yesterday I contacted the company asking them to come up a statement clarifing the new resource update. They did not, but that does not matter because your post did the work and filled the vacuum. They should offer you a job, or at least, designate you as Aurcana spokesman Emeritus.
Yesterday was such an unnerving day and I only wished you could have posted earlier to calm the restive mood, including mine.
Let's try to connect some of yesterday's concern with your post::
1. Was Orion/ Red Kite aware of the MDA and its work on revised resources?
My take - either they were or were made aware after Aurcana brought Andrew in charge of Shafter;
2. The possibility of a second law suit in light of new resource study
I do not see that happening as Aurcana was entitled to rely on 43-101 report produced and certified independently from a third party geologists
3. Is Shafter operation going to be economically viable in light of the revised resource estimate?
I think there are going to be changes and likely downward revision of resourses then reserves then production, but that would be afar cry from Shafter shuting down. What I suspect meanwhile is that Aurcana will double production in La Negra in 2014 to compensate for the lower then expected productiion in Shafter.
4. Lennic at the helm? SAhafter has been a pain so far, but if Andrew manages to advance Shafter, then he will emerge as de facto leader and I do not think Lenic will have any issues with that. AK
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AK - Goldfields- Kaczmarek
by mattbigham
December 13, 2013 - 08:04 AM
195 Reads | Post# 22002110
Hi Ak,
I have been going over the initial 43-101 done on Shafter in 2008.
Gold Fields performed the greatest amount of drilling on Shafter and Mr. Kaczmarek was responsible for that program as Chief Engineer.
Blocks I and II had the tightest drill hole spacings of all the 5 distinct 'blocks' of resource.
It is the deepest drilling and has water issues but that is where they must go as that is where the most reliable drill data exists.
Block 3 is where AUN decided to put in their ramp but the historical drilling is at it's widest intervals there so the data is far more unreliable than Blocks 1 and 2.
GFMC delineated a resource of between 15-30 million oz of silver at various cutoff grades,if that helps us looking forward to January.
AK,I don't know the answers to your questions but it is logical that AUN have known for some time that they screwed up trying to go at Block 3 without an extensive set of drill data.
Instead of prolonging expeditious production it appears they made the decision to mine Blocks 1 and 2 some time ago and were probably sourcing the most qualified and appropriate 'team' to go with the new mine plan.
There is no better gologist or geological engineer qualified to interpret the Gold Fields drilling data than the man that was in charge of the project-one Mr. Kaczmarek.
It would appear to me that Orion/Red Kite were fully informed as I believe AUN has had this revised plan in place for the better part of 2013.
AUN really screwed up with that NR yesterday as it was poorly written/confusing and misleading to the point where investors were writing off Shafter,entirely.
It frightened investors and that was unfortunate and unnecessary.
Although it was just a case of not explaining themselves in layman's terms and qualifying that the miining plan has simply changed,AUN can't be seen to be incompetent or misleading the investing public as the trust factor regarding Lenic and Shafter has worn itself out.
http://www.stockhouse.com/companies/bullboard/v.aun/aurcana-corporation?postid=22002110 |
