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Gold/Mining/Energy : Zentek Ltd - ZEN -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (5413)	12/5/2013 10:38:54 AM
From: hoov	9 Recommendations Recommended By adidabs aknahow bellab cbs12311 copperknob and 4 more members Read Replies (1) \| Respond to of 22703

Phil, the actual assumptions will not be revealed until we see the full-text Technical Report filed to SEDAR. That's just the way things work. I did have an email dialogue with the company, seeking further information for public release, and here is the reply. From: Larry Hoover Sent: Tuesday, December 03, 2013 12:51 PM To: 'Peter Wood'; 'Aubrey Eveleigh' Subject: Whittle Optimization versus total resources Importance: High Gentlemen, I have run into so much ignorance about the assumptions inherent in the Whittle Optimized resource that ZEN released yesterday, that I’d like to propose that the company put out a news release with the “raw” resource numbers, as comparators. As there is significant mineralization outside of the Whittle pit confines, I’m sure that the total resource numbers would be significantly higher than those published yesterday. I’ve seen many companies publish both their total resource data, and the Whittle-restricted resource data, for side-by-side comparison. I’m sure that RPA has the total resource numbers readily available, and considering that ZEN is still within the 45 day window for finalization of the Technical Report, I would think that a news release providing the total resources would not be out of line with respect to 43-101. It would also allow the company to provide some background into the significance of Whittle Optimization, when applied in this instance. I know how important these Whittle numbers are, but I would bet you that 99% of the world has no idea. Maybe this is another teachable moment. Kind regards, Larry Reply: Hi Larry, Here are some comments from RPA on the pit shell that may be helpful… CIM Definition Standards require that Mineral Resources have “reasonable prospects for economic extraction.” For open pit resources, a key limitation is that strip ratios remain reasonable – that the potential value of the resources is sufficient to pay for the mining of the waste that must also be extracted. The best way to evaluate this is to run a pit optimization – a computer evaluation of costs vs. potential revenue from each resource block. Cost inputs (mining and processing costs, pit slopes) and revenue inputs (process recovery, product price) are entered. The output is a pit shell, showing the limits of economic extraction (for the inputs used). For resource estimation, the inputs may not be known with a great degree of precision, as test work and cost estimation may be at a very preliminary stage. Although this pit optimization procedure is used in engineering studies (PEA, PFS, or FS), more work is required beforehand to refine the inputs, and afterward, to design an operational pit with ramps, benches, etc. In the case of Zenyatta’s Albany Project, no engineering studies have been completed. The pit shell on display on Zenyatta’s website should not be considered a mining plan, but merely a maximum limit on depth for open pit mining. The graphite resource is estimated to be high-value material, which supports mining of large quantities of waste. RPA considers that all mineralization (above the cut-off grade) contained within the pit shell has demonstrated “reasonable prospects of economic extraction”. Future work may include a trade-off between open pit and underground mining. The expectation would be that the highest-strip portion of the open pit resource (i.e., the resources at the bottom of the pit shell) would be found to more profitably mined by underground methods, and the open pit portion would become smaller – to the net benefit of the Project. Additional underground potential is indicated by the portion of the resource block model that continues below the pit shell, and by the fact that the deposit is open at depth. Hope this helps explain the rationale for the preliminary pit shell that was used in the Whittle Optimized resource which was reported in Monday’s news release. Best regards, Peter