Evaluating Three Dimensional Assay Results

How does one evaluate the assay numbers that come out of this work? It is important to realize that each assay consists of two important parts, the width and the grade.

The width gives the explorationist the best idea of the size of the deposit andby extrapolating widths of mineralized intersections from hole to hole vertically and horizontally, it is possible to calculate the volume of mineralized rock in the occurrence and hence its tonnage.

The grade is simply the proportion of rock that consists of payable material, i.e: recoverable metals of value such as Ni, Cu. Co. Because different ores contain different metals in different proportions, the layman can not always easily evaluate the significance of grades reported from drill holes from different areas. One way to do this is to estimate the value of a metric tonne of rock (for massive sulphides, this would be a cube of rock about 60 cm on a side) at the quoted grades and then compare it with values from other areas.

Grade and Width

Consider an intersection over some significant width reported to grade 2% Ni and 1% Cu. The amount of Ni present in a ton of this rock is easily calculated. One tonne contains 1000 kilograms (kg) and at 2% Ni, would contain 1000 x.02 =20 kg of Ni. Similarly, it contains 1000 x .01 = 10 kg of Cu. 1996 Ni and Cu prices were about $3.85/lb. and $1.30/lb., respectively ($US) (we use non-metric price unit measures because metal prices are typically quoted in $US/lb), so the value of a tonne of rock at these grades is (20*$3.85*2.204) + (10*$1.30*2.204) = approximately $200.

This is quite valuable rock. For comparison, a tonne of rock from the Buchans mines, some of the richest deposits of their kind in the world, at 1996 prices, would have been worth around $270, a tonne of ore from the Daniel's Harbour Zinc Mine around $85, and a tonne of ore from the Hope Brook gold mine around $60.

The Affect of Waste Rock and Mill Recovery

It is important to realize that grades reported in exploration drill holes are not necessarily those that can or will eventually be mined. In order to recover the ore, it might eventually be necessary to include a certain amount of country rock in the mining operation. The inclusion of waste rock in the mined product is called dilution and will inevitably mean a lower grade for the mine overall than for the sulphide body alone. For various reasons, not all of the metal can be recovered from the mined ore during milling and some percentage will be lost in the tailings. The percentage of metal that can be recovered in the mill is termed the recovery, and incorporation of this in the mining plan will further reduce the overall cash value of the deposit.

The Affect of Future Prices

A final point to emphasize in connection with the grades of the deposit is that the eventual value, and therefore profitability, of the deposit will be determined, not by today's prices, but by those in effect when the mine is operating, which may be anywhere from 5 to 20 years hence. Metal prices fluctuate on both short term and long term cycles with shifting demand and the state of the world economy.

Although relatively stronger at present, most metals have just come through a period of very low prices, principally as a result of the economic recession in the western economies. The decline in the price of Ni was more precipitous than others, mainly as a result of flooding of world markets with cheap Ni from the former Soviet Union following its collapse. To continue with our original example, the tonne of 2% Ni - 1% Cu ore that is worth about $180 today was only worth about $90 in late 1993, when Cu and Ni prices bottomed out at about $0.75/lb. and $1.90/lb. respectively. Of course, if prices continue their present upward trend, that tonne of ore could be worth considerably more than its present value when it is mined.

A few brief rules of thumb for evaluating the significance

of new massive sulphide discovery might be as follows:

massive sulphide deposits are small, difficult to find targets. For every large, high grade deposit, there are likely to be large numbers of small, lower grade deposits. Massive sulphides generally have higher grades than disseminated sulphides;

Airborne geophysical anomalies may indicate the presence of sulphides and are excellent targets for further exploration; but they may also result from other geological features; grab samples with interesting assays clearly indicate the presence of mineralization on the ground, but provide little indication of the potential size or overall grade of the occurrence; channel samples provide a good systematic sampling of mineralization at outcrop scale and an indication of the width of the mineralization as well diamond drill holes normally provide the first three-dimensional picture of an occurrence. assays of drill core provide vital grade and width information, both of which must be considered in evaluating the significance of a result. Grades provide good information on the relative value of the mineralized zone but are not necessarily the grades that will eventually be mined; estimates of the value of an orebody must include some estimate of the metal prices in the future.

http://earthsci.org/mineral/mindep/depfile/ma_sulp.htm