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Gold/Mining/Energy : Hornby Bay Exploration -- Ignore unavailable to you. Want to Upgrade?

To: Silver Bear who wrote (10)	8/24/1999 1:06:00 AM
From: E. Charters	Respond to of 34

Well it may be, like the Century deposit in Australia and there is all kinds of Zinc at depth below a vein in a VMS or SEDEX type deposit, that the fault vein is either a feeder zone to or a remobilization from, but that is a risk isn't it? It is not inconceivable that even if there is a pod at depth that it may be 1000's of feet down. We know that in Manitoba and at Kidd Creek there are VMS deposits buried in pods to 8,000 feet. And zinc will not yield to a conductivity probe. It may yield to a down hole geochem as Falconbridge used to find deposits on the Horne fault using Mercury as an indicator and it may yield to gravity which could show an orebody at depth. Ultimately a gravity study over the 15 kilometres of strike may show where the pod may be if it exists. Drilling down dip by "wildcat" may be productive but to cover the waterfront you would have to drill 3.6 million worth of holes to 1500 feet and you may still miss it by inches in some holes. A questions is how much of this zinc in fault system is there? Is there 15 kilometres or 60? If there is an extensive strike length of it, why not mine the strike? If there is 20 kliks of 10 to 15 feet of even 6.00 per cent zinc that releases at 150 mesh then it may be profitable. Let's say that there is 10 feet of 6.00 per cent zinc. Lets say it is good to 500 feet and there is 10 kliks of that. That is approx 16,400,000 tons of ore. That is $984,000,000 dollars in zinc. To Ramp to 500 feet would cost about 2 million all up. A Grinding plant with heavy media separators of 3,000 tons a day would cost about 12 million dollars. All mining equipment and a drift to the end of the ore would cost about 8 million tops. Tailings et all would be say 2 million. Cap cost would be about 24 million. Ore processing would be about 30 dollars per ton including mining, maximum, since there are no reagants to separate the ore and grinding is minimal. Perhaps spiral concentrators are all you need. This would indicate a possible profit for such an orebody of 482 million dollars minus the Capex. Present value of the ore with such costs would be 241 million approximately at perhaps 10% IRR. Mine life would be 16 years. It would be possible to contemplate an open pit mine of even lower grade ore down to 2 per cent as the only impurity in the rock is zinc, nothing else. There would be hordes of such material to 300 feet. Assaying the material is crucial. The standard 1/2 gram assay of the zinc by AA is not to be trusted for small quantities. One should do 10 gram titrations to determine the tenths of a percent accurately because for economics it becomes crucial. It may be possible that there could be up to 6,000 tons of low grade ore per linear foot in this deposit. That would be 200 million tons of 20 dollar material. The contained values sound shy in this type of ore but because of a lot of factors the cost may be less than 1/3 of the contained metal values. Open pit mining and concentration may be only a few dollars a ton here. EC<:-}