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Gold/Mining/Energy : Winspear Resources - Eric Charters Only! -- Ignore unavailable to you. Want to Upgrade?

To: Rick Hawke who wrote (91)	6/20/1999 10:17:00 AM
From: E. Charters	Read Replies (2) \| Respond to of 99

The size of the bulk sample accords to the size of the mine. It also accords to the variability of the ore material. Here the ore material is very variable. It cannot* be tested by drilling as only a bulk sample will overcome the rarity of economic indicators i.e. diamonds of value. And the deposit will vary from place to place. But it is prohibitive to test the whole deposit by bulk sampling, but it is instructive to point out that that is what the South Africans used to do with their underground deposits which varied vertically over large areas. They used to do continual 10,000 ton bulk tests! Of course the tests themsleves in those situations had some economics. One kind of indicator does test economics and is sufficiently not-rare that it may tell economics by drilling and would possibly provide a good correlator that would save them money. It has been tested to a degree. I am not consulting for the company and will not give them any clues that will save them money or make their mine. In this case you are either trusted as a consultant or you aren't. Knowing is not enough. I am not trusted so they will never know from me. Too bad. The value of the ground that will make a mine is due the number of tons they can generate of this value. Due to the above problem they will not be able to debt finance because no one is going yo take anyone's word without proof that this grade over tons problem has been solved. Even 6,000 ton samples in one location, although they may augur well for the mining do not a feasibility make. While Echo Bay will drill 1500 holes in a 15 million ton open pit gold situation to determine its grade (overkill), I cannot see the sampling done here as being sufficient yet. Sufficient for investor interest, perhaps, but not for an investment bank. What average grade or value do they need? Who knows? Who knows what grade/value is pervasive throughout? That is the province of a feasibility study. It is well known that small diamonds are not on the average a good correlator with large stones. The suggested correlator has to be tested in that way too. It would be a breakthrough if it did show a method of drill testing. In the end, to a degree it will be an experimental mine because of the uncertainty of cut-off. This is a problem, admittedly, that much energy has been expended on in many mines; they are no the first to share this problem. Many nuggety gold mines are fraught with these problems. Right now we do not know if it is even mineable down dip. Ground problems have not been addressed. I would think they need a ramp to depth to solve that one at least. This is not an easy one. Many things have been said about its probable size and hinted at. These things have not been established in any economic or probable sense. The down dip continuity/grade/mineability is suspect in my opinion. EC<:-}