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Gold/Mining/Energy : ORXX - Orex Gold Mines Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ga Bard who wrote (975)	8/27/1999 11:30:00 PM
From: Tim Hall	Read Replies (2) \| Respond to of 2392

Gary, "" Oh and the reserves might be 600,000 tons with an grade of .34 I believe and don;t even know what that means ... But Gene did apparently and he made reference to the FMC and fuel energy reports."" Reserves have different categories. These categories aren't gospel and you can probably find a number of theories about how to classify them. Basically, there are proven reserves and probable (indicated) reserves. Some use a third classification usually called something like potential resource. Proven reserves are like money in the bank. Probable are good indicators but you usually can't borrow money on them. Mr. Enyart never discloses exactly what his criteria are for these classifications. A good report would contain such a definition so that other professionals looking at the report would also know what he was talking about. Also, a report should contain a better summary. It should show each area and it should show how much is proven and how much is probable. Mr. Enyart kindof throws all of this together and it is difficult to understand how much is proven and how much is probably. His final figure of 509,000 is probable categor. The report is hard to interpret but it looks like there might be 5 to 20 thousand tons of proven ore with a grade between .25 and .35 oz per ton. Another problem I have with the report is that Mr. Enyart does not give an exact location of the properties. It is fairly common practice in these reports to use Range, Township, Section Number and Section quadrants to define localities. I also don't see any reference to any drill holes. He specifically talks about samples that were taken from existing underground workings. These are valid and legitimate samples and I might be wrong but I thought there was some mention of some of the reserves being drilled? Next step: Even if we assume that there are 600,000 tons of ore with a grade of .34 oz per ton, we need to know something about mining and milling costs. Mining costs for small vein type deposits can run from 50 to 75 dollars per ton. Since most of the information on Orex and Haber talk about using the Haber process as a secondary recovery system for placer deposits, I am going to assume that this quarz ore containing the gold will have to be ground very fine. This will liberate all of the gold so the Haber lixivant will be exposed to the fine gold particles in much the same way that it would be exposed to the fine gold in a placer deposit. This could cost along with normal material handling costs such as screening, dewatering tails, slurry pumping and tails disposal will cost another 10 to 15 dollars per ton. Given the current price of gold I don't see how they can make a profit on this deposit. This is the reason I want to see what the company says the reserves and the costs are. They should have this information since I assume they did a complete analysis of the property and the process before they bought it. TIm