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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?


To: Claude Cormier who wrote (68743)3/1/2010 10:17:17 PM
From: TrueScouse3 Recommendations  Read Replies (2) | Respond to of 78427
 
CC:

RE. Sacre Coeur (SCM,V)...

Not sure where to post any more about junior stocks to accumulate rather than trade in the short term, but this seems as good a place as any... :^)

SCM is now my second biggest holding after Chesapeake. People should do their own DD, but I really like what they're doing at the Million Mountain project in Guyana. There seems to be some misunderstanding about their focus, but as far as I'm concerned, this is a medium term play that has a good chance of building a major hard-rock gold deposit -- using cash from their alluvial discoveries to pay for all further hard rock exploration without much dilution. I really like this development model.

I had some reservations about what SCM had reported on the sampling of the alluvial prospects, so I emailed the company as follows...

<<I'm interested in clarifying just how the alluvial samples were taken in Zone 2? From the SCM website, it appears there were 83 samples from test pits roughly equally spaced on a 1,600 x 800 metre grid. There appears to be about 1 to 2 metres of overburden and then the alluvial gold zone below varies from about 0.8m to 5m in thickness. I understand that the overburden was first removed and then the test pit was dug with a backhoe. On the website it says: "A ten kilogram, vertical channel sample was then collected from the bottom of the zone to the top in each test pit."

My question is, how was this done in a controlled and systematic manner, given that each sample is the same 10kg in weight, yet the pits vary from 0.8m to 5.0m in depth? 10 kilos is a very small sample from a hole up to 5 metres deep dug by backhoe. So what were the guidelines for your staff for extracting a representative sample with equal weight of 10 kilos from each test pit, given the variation in depth of the pits?>>


I got the following back from Greg Sparks, the CEO, together with permission to distribute his response...

<<You ask a very important question... As you are probably aware, alluvial deposits are generally stratified in distinct zones of deposition, e.g. coarse gravels, sand & fine gravel, clean sand, sand with organics, clayey sand, etc. These strata represent different depositional environments present at the time they were laid down. For example, coarse gravel is typical of a high energy environment, i.e., fast flowing water which transports sand and finer sediments onward while dropping the heavier coarse gravel. Fine sand, silt and organics are the depositional products of lower energy environments, e.g. flood basins, the inner side of a river bend etc. Because of the different depositional environments characteristic of each alluvial strata, and because of the time difference in the erosional cycle represented by each distinct strata, the character and concentration of gold typically varies among all of the alluvial strata represented. Now to your question regarding our sampling practice. Because of the typical variation in gold character and content, each distinct stratum represented in the vertical cross section of a test pit is sampled in rough proportion to its relative thickness in the pit to make a combined sample of 10 kilos. We believe that by processing this composite sample (with each stratum represented in proportion to its thickness in the total sample column) we get a reasonable representation of the gravity recoverable gold for that pit. The contribution of each pit to the total is then weighted by the measured zone thickness.

While estimation of alluvial gold mineralization is fairly imprecise, I have found that the foregoing procedure yields good semi-quantitative results when properly done. More precise results are best obtained through test mining as we are currently undertaking. I hope this adequately answers your query.>>


I was pleasantly surprised to get such a detailed response -- and one which makes a lot of sense to me from an engineering perspective. This is clearly a serious operation. What is still unclear are the recovery grades they will get as they crank up the alluvial process -- but I think we'll get some detailed info on this over the next couple of months. But what *is* clear to me is that this is only one of about 8 or 9 alluvial zones that SCM has on the property, and they could crank up their cash flow several-fold by replicating this process. It would appear that the cash cost per ounce of alluvial gold is only about $150.

Meanwhile, the stock has sold off after the recent PR, and I wish I had some cash to buy more! SCM's management will be at the PDAC next week so I'm looking forward to discussing their plans in more detail.

As noted above, I have a holding in SCM and everyone should do their own due diligence.

Best regards,
Howy