I read the 15-Oct-98 Wall Street Journal (WSJ) article. I thought it was a "hatchet job", as Mark Heinzel, the author, did not interview anyone from either Diamond Fields or INCO who had estimated the reported mineral reserves or resources for the VB deposits. (FYI, Neither Mr. Gill nor Mr. Keats made any reserve calculations that I was aware of.)
Concerning the tonnage resource comment in the WSJ article, here's what's written:
1) "Indeed, exuberant Inco officials had estimated that Voisey's Bay contained 150 million tons of mineable ore."
Fact-1) this is utterly nonsense; as the terms: mineable ore; reserves; and, assumed resource; are never interchangeable when writing anything technical or even financial. INCO PR's of April-thru-Sept-1996 never called their estimates "mineable ore" -- they always clearly wrote "assumed reserves" or "assumed resource". (I did find an Oct-1996 Voisey's Bay "Special Edition" pamphlet by Allan Dickie, a Toronto freelance-writer/communication-consultant who did mistakenly write: "Later drilling results indicate ... a staggering 150 million tonnes of ore." Hopefully, Heinzel didn't use Mr. Dickie's pamphlet as his only source.
2) "I don't know how they could have come up with a figure like that, says Kerry Sparkes, a geologist with Diamond Fields at the time who continued to work for Inco at Voisey's Bay until a few months ago. We certainly had no tonnage calculations at that time to give us anything near the figure of 150 metric tons, Mr. Sparkes says. A metric ton is equal to 2,204.62 pounds."
Fact-2) Mr. Sparkes was never a Diamond Fields employee; he worked as a Project Manager/Geologist for, and was employed by Archean Resources Ltd. (e.g., Diamond Fields' on-site exploration-contractor). Mr. Sparkes did make simple "assumed-block" reserve/resource estimates for us, but to my knowledge, we never reported any of his reserve/resource numbers for any of our Press Releases. I was disappointed by Kerry's "WSJ-reported" comments, I also thought they were overly negative.
Here's a link from an interview earlier this year where Mr. Sparkes apparently suggests the 150-million-ton resource estimate IS valid:
stockscape.com
Sparkes also co-authored a scientific report with Naldrett, Keats and Moore (1996, Expl. Mining Geol., vol. 5, no.2, pp.169-179) and on page 171 wrote: "It is estimated that the Voisey's Bay project has the potential to contain a resource of 150 million tonnes grading 1.9% Ni, 1.1% Cu, and 0.08% Co (Toronto Financial Post, April 12, 1996.)" Sheesh, if any of the the authors didn't believe the number, why did they include this quote?? Their 1996 paper nowhere refutes the 150 million ton assumed resource number either.
It appears to me that Mr.Sparkes was either mis-quoted by the WSJ or by Stockscape (and was over-ruled by the 1996-paper's "senior" co-authors??). It is too bad, Mr. Heinzel did not attempt to interview actual DFR geologists like Rosie Moore (+15 years mineral exploration experience) or Dennis Dunn (+20 years exploration, nickel-mining, and environmental experience). I doubt the article would have been as negative.
[Actually some of the best DFR "mapped-volumetric" ore-reserve calculations, in my opinion, were made by DFR's Exploration-VP Michael McMurrough (+25 years experince in kimberlite and base-metal exploration)--I recollect they matched Teck-engineering's published Ovoid estimates very well. Mr. McMurrough (who would not move to Vancouver, BC from his home in Hope, Arkansas) resigned in Aug-95 and was replaced by Mr. Keats. I reported directly to McMurrough and later to Keats during my own employment with DFR.]
3) Concerning Borden Putnam's (of Robertson-Stephens, or RS) comment: "As I watched this thing unfold, I realized that whoever wins is really ultimately the loser."
Fact-3) Heinzel's WSJ article ends with this quote; and, Mr. Putnam is entitled to his opinion. Putnam is a very good epithermal-gold geologist, but to my knowledge he has minimal nickel-copper magmatic experience. Also he didn't make any of the initial VB RS-investments-decisions. Mr. Putnam was hired to replace Mr. Ed Flood, the RS-geologist-analyst who HAD recommended Robertson-Stephens acquire 14.69% of the Common Shares of DFR by January 17, 1995 (when Diamond Fields internally announced the Ovoid geophysical discovery.) The only RS-representative I ever met at Voisey's, Nain, Goose Bay, or Toronto was Mr. Flood; he left RS in early 1996 to be president of another mining company. Too bad the WSJ didn't try to track down Mr. Flood to get his opinion. I don't think Ed would have been as negative, either.
In conclusion, I think the WSJ article was more "sour grapes" than insightful.
Since Thursday's WSJ-article my INCO (N, NVB, and N-E) shares are up almost 25%. Could be, those Franco- and Euro-Nevada folks don't think Inco's VB "dream" is such a "loser".)
Regards,
Terry J. Crebs
formerly, Diamond Fields Resources, Inc.
P.S. I did smile at Heinzel's confirmation of the story that Friedland took off his shoe, whacked it on the table, and told INCO executives: "We could bury you!" during the DFR-VB negotiations. I'd heard the "rumor", but had never believed it. Heinzel claims an INCO-spokesman "confirmed" the shoe-whacking incident. I find the WSJ is very good at reporting innuendo; however, anything it writes even remotely technical is often pretty FU'ed. |
