Tomato,
Author: WillP -- Date:1999-02-16 09:07:47
Subject: Assessing The Spear's Chances
Over the next few days I hope to pull together information
that my best guess on assessing Winspear's chance of mining
Snap Lake is based on:
There are four main areas, grade, tonnage, value per carat,
and capital cost. The latter includes methods of mining, and
such.
I may, at the end, include a fifth...a mirthful look at some of
the more outrageous attempts to discredit Winspear's
project.
There's enough solid reasons to have a reasonable doubt,
and those voices have been heard here, occasionally.
'Reality Check' and 'The Doctor' are two that come to mind.
I suggest you weigh their comments carefully.
A true 'bear' will also find occasional reasons to greet my
words.
And so...on to "GRADE".
All the best, may your longs go up and your shorts...aww
never mind. :-)
WillP
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Reply
Author: WillP -- Date:1999-02-16 09:16:27
Subject: GRADE
GRADE: The matter of ore grade is one of prime
importance, but is usually overlooked in the
Winspearian scheme of things. Certainly the bottom
line is value per tonne, but this is composed of two
completely independent components…grade and
quality. You can have one without the other.
What are the extremes? Based on a commercial
recovery cutoff, the Argyle mine in Australia has had a
sustained grade of 6.0 carats per tonne. The lower
limit would of course be 0.0 carats for a barren pipe,
or my back yard. The lowest published grade for a
commercially operating mine is 0.04 carats per tonne.
(No, I didn't slip an extra zero in there.)
What do you need to be viable at Snap Lake? That's
not a reasonable question. The bottom line is of
course ore value. We could operate backwards
however to come up with a ballpark guess. Assume
very roughly that the total of all operating costs plus
the capital cost recovery is $125 US per tonne, and
further assume a per carat value of $150 per carat.
Clearly, you will need a grade of 0.83 carats per
tonne. One would also have to throw in a percentage
of waste rock…let's go with 17%. That leaves us
requiring a minimum grade of 1.00 carats per tonne.
Now there are numbers in here…I just pulled them
out of the air, lest you think I'm leaking knowledge
known only to Pokhilenko, Turner, and the Masonic
Order of Freemasons.
What are the chances of the overall grade being in
excess of one carat per tonne? Good question. Glad
you asked that. There were two mini bulk samples
taken, of 100 tonnes each, roughly. The first one was
somewhat disappointing, returning a grade of 0.86
carats per tonne. The second was far more
successful, and returned a value of 1.47 carats per
tonne. The overall grade from just under 200 tonnes
of rock was 1.14 carats per tonne. Those are the
facts, and those facts are rock solid. Based on this
data solely, one might compute there is roughly a 75%
percent chance of the actual grade being greater than
1.00 carats per tonne. This wouldn't be terribly wise,
but it's a start. It gives the 'bears' a bit of ammo, at
least. Much more ammunition comes from Winspear
itself. In their January 15, 1999 release, they
admonish the reader, "Although this mini-bulk sample
is regarded as too small to accurately predict either
value or grade for the kimberlite comprising the NW
dyke…".
Anything else that should be considered? Why, yes.
Of course. Winspear also stated on a few occasions
that results "..may reflect, in part, excess
contamination of the Pit 1 sample by footwall rocks
during the sampling process". How much
contamination? In part? Well, 10 percent might be a
reasonable uneducated guess. Much more, and there
should have been a good inkling they had a problem.
If any contamination was limited to 10%, the pit one
grade would climb to 0.96 carats per tonne. This
might tend one to increase the probability from 75%
to 90%.
In similar fashion to the pit one mini-bulk sample, the
caustic fusion results from that area were significantly
lower. This lower rate was isolated to the pit one
environs. That is, the remainder of the NW dyke
displayed similar diamond counts to pit two. The
caustic fusion results tell a clear and interesting tale, to
me at least.
Lost amidst the analysis of micro and mini-macro
diamond counts, was the fact that the CF results
yielded larger stones. The three largest were 0.75,
0.69, and 0.47 carats. The processing of the two 250
kg samples from the pits yielded largest stones as
well, at 0.23, 0.21, and 0.13 carats. Note that only
the three largest were reported in each case.
Interesting? Yes. I'll leave it as an exercise to the
reader to determine the answer to this question: "Of
all the caustic fusion results released over the years
from the NWT, and from other Canadian
"plays"…how many have yielded three stones over
0.40 carats in a sample of 2,000 kg or less?" It's an
interesting answer. HINT: None is an incorrect
answer.
Personally, I raise the probability of the grade
exceeding 1.0 carat per tonne to something in excess
of 95%, and raise my 50% expectation from 1.14 to
something under but approaching 1.5 carats per
tonne. Increasing the efficiency of the plant might
recover an extra significant chunk of diamonds at the
smallest recoverable range…those from 0.015 to
0.05 carats, say. This would balloon the grade figures
above, but without compensating cash benefit. It's
best to ignore that possibility for the purpose of this
discussion.
So we are in the mining business then? Well, no.
There are many other things to be considered, and I
hope to address them all over the next few days.
Grade is an integral component of the bottom line,
and I'm close to Ivory sure that grade will not be a
problem. It does have a realistic and significant
chance to be a pleasant surprise.
SUMMARY: Of the four primary areas of concern,
grade is probably the most rock-solid. If you will
allow me that pun, of course. This opinion is probably
shared even by most skeptics, as grade is the least
challenged part of the Winspear 'dream'.
Personally…I peg the probability of the grade
adequacy at 95%. I feel it's a bit higher, but 95% is
the best I give anything. I like pleasant surprises.
At this point…especially if you've read my ramblings
under "Grade and Caustic Fusion" above…we can
safely lay to rest the debate of grade. Until, of course,
new results arrive.
Then we begin anew.
Next….TONNAGE.
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