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Gold/Mining/Energy : Golden Eagle Int. (MYNG) -- Ignore unavailable to you. Want to Upgrade?

To: jbIII who wrote (7173)	7/2/1998 7:43:00 AM
From: Mike Gold	Read Replies (1) \| Respond to of 34075

Estimate of Open Pit Gold Production-Golden Eagle From previous 8-K and using Guido 1997 report, I came up with the following: Average grade of gold: 14 g/m^3 ( Guido expected this number to increase once better sampling was done on the oversized fraction.) " The mining contract is with Ingenieria de Servicios Profesionales, S.R.L.(ISP), an engineering and earth moving company located in La Paz, Bolivia. The contract calls for a 24-hour-per-day operation employing three 25-ton dump trucks, one 15-ton dump truck, one 950 Caterpillar front-end loader, one 930 Caterpillar-equivalent front-end loader, two 15-ton dump trucks on stand-by, and various compressors, generators and support equipment. ISP's equipment would be added to Golden Eagle's current rolling stock, which includes two D85 Komatsu bulldozers, one leased 950 Caterpillar-equivalent front-end loader, one 930 Caterpillar front-end loader, and two leased 6-ton dump trucks. ISP's calculations, because of the short haul distance, fixed the daily production of the entire operation at 8, 000 to 10,000 tons of head material per day." If we assume 80% recovery, 9,000 tons/day of ore processed, ore density of 1000 kg/m^3 we get: (.014 kg/m^3)(.8)9000(2000.453)*(1/1000)=91.3 Kg/day or 3221 ounces/day If we assume $100 an ounce profit=$322,140/day or about $110 Million profit per year with just initial production equipment. Not bad, Not bad. One comment I have-my guess is the problem the SEC has with the new report probably has something to do with the following from Guido's 1997 report. "8.1. The results are shown on the laboratory certificates, (See, Attachment 3, Lab Assay Results), and the 16 tables accompanying this report. (See, Attachment 2, Mineral Sampling Results.) Column 3 of those mineral sampling results shows the gold grades in grams per cubic meter, separated in groups for the different sectors of the claims under the Company's subsidiary's control. These values were calculated in the usual way--from pan concentrate grades and their weights--together with the weights of the field samples. A figure of 1.8 was used for the specific gravity of these field weights. The average gold grades for each sector vary from a minimum of approximately .100 g/m3 to approximately 6 g/m3, with an overall average of 1.499 g/m3. This grade is certainly good enough for massive types of mining, an open-pit techniques are highly recommended. 8.2. UP TO THIS POINT STANDARD METHODS WERE USED TO ESTABLISH THE GRADES RESULTING FROM THE SAMPLING PROGRAM. HOWERVER, A STRIKING FACT SHOWED UP IN THE SAMPLING: the batea (conical pan) fine tailings (the under-sized fraction) assayed with an average gold grade of 27.068 g/m3, meaning that this is by far the richest fraction in the Cangalli deposits. Obviously, from ancient times through to the present mining operations, this fraction has always been ignored and discarded. A similar phenomenon happens with the rock samples (the over-sized fraction) -- with an average assay of 5.657 grams per cubic meter -- of course also traditionally being discarded. From the over-sized fraction, or rock samples, I have calculated a conservative grade of 2.419 g/m3 for the pan gross tailings. The results from the assays of the over and under-sized fraction, plus those for the pan concentrates previously calculated, are combined for the total average gold grades shown on the tables' column 4 (See, Attachment 2, Mineral Sampling Results). These total results run from an approximate low of 10 g/m3 to a high of 19 g/m3 with an average of 14.049 g/m3, which is very high for these types of gold deposits. It is my opinion that this may even increase once better sampling can be carried out on the over-sized fraction. In formulating a mine plan for the near-term, the first thing that becomes apparent is that these deposits can and must be worked by open-pit mining methods. The recovery of the "microscopic" gold has to be accomplished by agitated vat cyanide leaching techniques. I believe that very significant and far-reaching discoveries will be made in the remainder of the Cangalli gold deposits specifically, and the balance of the Tipuani River Basin deposits in general, as a result of this concept." My guess is the SEC is worried about the nonstandard methods used by Guido in order to determine the assays. Using traditional methods you get an average fraction only 1.5 g/m3 which would make the deposit under a million ounces proven and probably not even economical to mine at this point.