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outnaboutnak

"currently Mineable Grade"

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I'm looking for some opinions and ideas on the topic of a placer reserves described as "of currently mineable grade". The year that was written was 1975 and gold closed at $139 and averaged $160 over the course. Any ideas on what kind of dollars per yard that might be. The ground is easily mineable, pretty remote, low stripping costs, no permafrost. Etc. I'd take any ideas or guess'. Thanks.

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outnaboutnak,

 

It's a good question that frequently pops up. :)

 

The two questions that would be the natural follow-up questions are;

 

1. What was "the mining plan" then?

 

2. How do you convert the costs and revenues to todays costs and revenues?

 

 

- Geowizard  

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Thanks Geo. The last operation in the area was dozer/sluice and dragline / washing plant at $35 gold. It's remote with very large airstrip and winter land accessibility. I'm crunching numbers at this point and coming up with a plan of my own like you say. I have more information that may help my question at home that I could share. Thanks again.

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Is this property you are looking at buying, or already own?

It makes a big difference. You cannot assume "currently mineable" means some particular grade as you have no idea what assumptions went into that estimate, what data on grade and yardage was available, etc. If I were evaluating a property, I would consider that statement as meaningless without actual information to back it up. Who knows what that person assumed in considering it as mineable - maybe they assumed it could be hydraulically mined for 10 cents a yard, or draglined for 15 cents a yard.  Who knows! That's why I would consider such a statement as having no value at all.

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Thanks Chris, yes I have the property.  Probable reserves are estimated at $13 and $75 at todays price from two different sources. Possible reserves are whats "currently mineable grade" so its safe to assume the value of those are lower than the probable reserves numbers.   I understand there is no limit to the variables in a question like this, I just thought that someone might ballpark an opinion on the statement. 

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outnaboutnak,

 

Without definition of the deposit, it is impossible to give an opinion on mineability. The grade you have in, on, or around the deposit has to be "measured" or fall in the realm of "indicated" in order to be called a "proven" or "probable" reserve.

 

 

- Geowizard  

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"currently mineable grade";

 

The Canadian Institute of Mining has come under challenge by the global mining community.

 

South African, Indonesian and other members of the global community want to use variations in the terminology of and/or definition of what is a "resource" or "reserve". A committee has been formed to provide input from the "global" mining industry.

 

Was the person that said the deposit was of "currently mineable grade" qualified to make that statement?

 

Another question is "modifying factors".

 

 

- Geowizard

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Hi Guys,

 

Sorry about the lack of input lately. I've been in the bush for a while and am currently working at a Gold Mine out in the Desert. We go over a lot of these types of scenarios every day so I thought I would throw in a suggestion or two. It's serious Business for us as it is for every Mine, particularly given that we just produced 52,000 Ounces for December. Any slight miscalculation at these levels means a fairly large difference at the end of the day. Grade is King ! Accurate Sampling is critical.     

 

" Currently Mineable Grade " ? Good question and a very important one. Chris's response on 30th. December more or less sums it up - without knowing how the Property was Sampled, apart from perhaps being a general guide only, all other assumptions, estimates or wishful thinking is unfortunately irrelevant. Previous work on the Property is a good sign. At some point it may well have made the then owners a Profit.

 

If I owned this Property for example, I would be less concerned about " Dollars per Yard in 1975 " and more concerned about the actual Grade of the ground measured in " Grams per Cubic Yard ". Whilst the Gold Price will always fluctuate, as will the cost of the numerous inputs, the Grade of your property will be a constant. At any given time, a certain part or parts of the property could swing between profitable ground and unprofitable ground. Hence we all use a " Ballpark " number to base decisions on. i.e. A Cut-Off Grade which will usually be based on the prevailing Gold Price.

 

It sounds like you have a number of advantages on your side like a Low Stripping Ratio and Thawed Ground. These things for example could in fact help reduce your Cut-Off Grade. I have been Drilling my Ground with a 9" Auger. It's ALL Frozen. That's a real Ball-breaker and will no doubt add extra cost to any Operation. I've got 3 Grades - Low ( Trace ), Marginal ( Gold is present but is not quite good enough, although it could be Pay at say $1,800.00 / Ounce if I lowered my Cut-Off ) or Pay. I don't really see in " Dollars per Cubic Yard ". Either it's Pay or it's not and the price that separates the two is quite a wide variation so there is very little confusion caused by fluctuations in the price of Gold. Decisions are cut and dry. The Grade of the ground is the same now as it was in 1899, irrespective of the price of Gold and the cost of all the variables mentioned above.

 

Interestingly, I am surprised to find after extensive Sampling over the past couple of years that the Cut-Off Grade used by the old timers in my area, with Hydraulic Operations at least, is not that far off being the same as what I would consider my Cut-Off Grade now, 100 + years later, namely - 0.4 gms / CuYrd. or put more simply, 1 Ounce per 100 Cubic Yards of Pay.    

 

It sounds like a relatively straight-forward Property to Sample in which case, as you would no doubt be aware, the priority would be to do your own Sampling, irrespective of anything which may or may not have been written about the ground. In answer to the actual question in your original Post above, I would make the humble " guesstimate " that the ground being mined surely would have had to have been running at least at 0.3 gm / CuYrd. based on the volume of dirt the Dragline would have been moving, however, if input costs were relatively high then their Cut-Off may have been much higher at say 0.5 gm / CuYrd. Only your own accurate Sampling will tell otherwise.

 

Using a 0.4.gm / CuYrd average for example, combined with a Low Stripping Ratio in Thawed Ground, I would say that's profitable down to at least $1,000.00 / Ounce Gold. Below that price, you may have to re-think your Numbers. I would love to have that ground, provided of course there exists sufficient Yardage to support a decent Operation. Good luck.

 

Steve62.                    

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