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Gold/Mining/Energy : WillP Speaks on Winspear -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (9)	2/17/1999 12:19:00 AM
From: Tomato	Read Replies (1) \| Respond to of 177

author: WillP -- Date:1999-02-16 20:32:50 Subject: Tonnage Nice to see 'jspec' get the jump on this one. A good read, and it provides a good guess on the potential 'spool-up' of operations. I have no arguments on his figures whatsoever. Here are some additional thoughts: TONNAGE: Tonight's discussion concerns tonnage. Tonnage as in mineable ore. If you want kimberlite tonnage in general…look no father than Kensington (KRT) in Saskatchewan. Now they got tonnage. No diamonds to speak of…but kimberlite coming out their ears. Now Ekati has tonnage. They also have grade and quality in sufficient proportions to make it worthwhile. Diavik has less tonnage, but higher value. And the 'spear, you ask? OK…let's talk tonnage as it concerns Winspear. First off…they already have sufficient tonnage, as demonstrated by the MRDI scoping study. In addition to that are a number of important thresholds, based on varying scenarios: #1. Open pit - NW peninsula, plus underground mining. This is as per the MRDI option two. Ten year mine life, 1000 tonnes per day. This scenario requires 3,500,000 tonnes. Chances of achieving it? With 1.4 million tonnes proven, one needs to find an additional 2.1 million tonnes. That's two additional grid boxes and a wee bit on the map included in the January 26 1999 press release. I will humbly suggest that K12 and J12 will fulfill that need with a probability of 95%. #2. Open pit - North shore, plus underground mining. This is a new county heard from. Ask yourself this. With no indicator train, a gazillion other more worthwhile targets, and a short season, why would Winspear even consider poking holes in the north shore? Why indeed. Forget the NW peninsula…the north shore in theory could host a much larger open pit, and subsequent underground operation. For now, consider it the equal of the NW peninsula. That is…it appears quite certain that a land based tonnage of 1 million tonnes exists now, primarily in the grid squares L12, L13, and M12. There is the possibility of expanding that to an undetermined, but large degree. Subsequent drilling could add tonnage in L11 as well. Based on only three holes…the probability of this happening is lower at this time. I would suggest there is a 75% chance of establishing an additional 3,500,000 tonnes in this area. The three north shore drill intersections returned thicknesses of 2.8, 2.6, and 2.1 metres. The latter hole had an additional intersection some 20 metres lower. Interesting. #3. Underground - NE arm. Drill results appear to suggest that J20 and environs contain one million tonnes, with a suitable probability that J19, and J18, plus K 20 and K21 are providers of suitable thickness of kimberlite. This may well provide a third simultaneous 1000 tonne per day underground operation. Chances of sufficient ore being present…3,500,000 tonnes…45%. The eight holes drilled in this area are not suitably documented to indicate a higher probability. My concerns are that the dyke thickness may be shallower than elsewhere based on weight of kimberlite undergoing CF, and that the macro counts in this area, based on only 80 kg…are significantly lower than elsewhere. #4. Underground - SE shore. Drill results indicate G18, F18, H19, I19, and I20 contain hits. There are also a few misses here that may define the edge of the dyke. There is a reasonable probability that this area also contains a 10 year supply of ore, for one 1000 tpd access. Chances? About 75%. Thickness appears in excess of 2 metres, and diamond counts are good, based on 60 kg. #5. Additional ore. Well…as intimated in the 'battleship' post…there are tons (pardon the pun) of grid squares in the middle of the lake not included in the above. Most of these would increase the tonnage, and hence the rate of mining should one or more of these areas prove unsuitable. The probability of the grid squares containing mineable ore ranges from 90 to 50%. I have not been my usual conservative self at this stage in assessing the probabilities in points 1-4. This is because of the hidden ace of point 5. So…there is a mine here, based solely on tonnage. How complex a mine depends on the success of this years…and next…drilling programs. I am more than 95% sure of one 1000 tpd operation being possible, and 90% sure of two. There is an 70% chance of three, and about a 50% chance of four simultaneous 1000 tonne operations here. Tonnage is frequently touted as Winspear's downfall…but erroneously so. They've already substantiated enough for one operation, given the prospects of a reasonable rate of return. Reasonable rate of return…and the grade is good. And so…on to QUALITY. Till next time…happy trading. WillP