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

To: Andrew who wrote (6271)	6/24/1998 10:29:00 PM
From: Walt	Read Replies (1) \| Respond to of 26850

Your questions are alot trickier then you may think but I'll try to have a go at answering some of it. ORE ore is defined as rock which can be mined at a profit. If I go out to the bush and find some rock which runs 32 grams or 1 oz per ton it sounds great, particularly when as you say some companies can mine a few grams to the ton. However if I only have one ton of rock in the showing/deposit then that is only one ounce of gold worth $400. I could dig the rock up, crush it recover most of the gold and sell it but it would probably cost more then it is worth to do so. If I had a hundred tons, or a thousand tons then I might be able to do it and make a few bucks but it would be a one shot small highgrade removal involving runing the ore through someone elses mill. If I had a million tons then I would probable be able to build a small gold mine which would run for a few years and make some money. To have a mine you have to have enough ore to pay for the cost of setting up a mine and its recovery plant. So if the mine set up is going to cost say $50 million dollars then I need $50 million worth of ore. If I have less its not economic, if I have more then it is. So the question is: does WSP have enough kimberlite in the dyke to afford to build and operate a mine at a profit. MINES Alot of drilling has to be done to define the dyke. When that is done and they have a good model of what they are dealing with geologists and engineers will figure out how best to mine it, exactly how many tons are there, how much will it cost to mine and process them and how much will they make. This is called a feasability study because it determines weither or not a mine if feasable. There are alot of factors which go into this and the cost between operations can vary considerable. Lets say you have two identical deposits in two different locals, the labour costs, taxes, fuel costs etc etc could vary so one deposit is mineable and the other is not. As to your last questions. Think of a coal seam aproximately 10 feet thick. It dips at anywhere from ten to thirty degrees. It comes to surface. In a way that is what this dyke is like. Now just put a few feet of overburden on top of where it surfaces. To get at the coal or kimberlite you have to remove the overburden/soil and you have to remove the cap rock which sits on top and gets thicker as you go deeper or down dip. How much rock can you afford to remove in order to get at the coal. Ten feet, fifty feet etc. The feasablity study will tell you. As for mining underground you blast out the ore and haul it up to surface and to your crushing and processsing plant. If the dyke/fissure were at a steep angle you have gravity working for you. You dig a tunnel down go into the ore underground then mine above you so gravity fills up your ore cars. If it is flat enough you blast into it and with a loader fill up your cars. However if it is too steep to drive down and too flat for Gravity to work then its going to cost you more to mine. Also you have a soft rock sandwiched between hard rock, that is good because you have well defined ore and a solid roof but you still have a roof of rock over your head. If you took all the ore or dyke out, sooner or latter the roof would fall in on you so you have to leave in or put in supports. Mines do this by leaving pillars and/or backfilling with waste the rooms that have excavated. This costs more and means you may be leaving some ore behind so you need more ore to make it a mine. There are alot of different type of mines which use various types of mining methods. So what WSP has is darned interesting and with the grades found I have little doubt that at some point someone will mine some of it but weither or not it can become a full blown mine depends on the tonnage found and exactly how it sits. With the drilling done to date WSP has an idea of what they are dealing with but needs to do more drilling to properly define this resource or deposit. Hope this hasnt bored everyone but what seems like quite simple questions can actually be darned difficult. regards Walt