Peak Oil and Peak Gold theories have been going on for many years
I found the following posts very interesting. What you should take in consideration, in relation with Tyhee, is the expected average gold grade for new mines and compare it with Tyhee robust grades.


Part I

http://europe.theoildrum.com/node/5989

Part II
http://europe.theoildrum.com/node/5995#more

Hubert

Tyhee has one drill running and expect 2 more to start shortly.

What can kind of news can we expect?

I would say that the first news to come would be related to metallurgical samples. I will explain later why these news are important to understand and how they can affect the operational side in the future.

Then should come updates on the PFS and DAR. I expect news from the drilling to start coming late in February (with the one already running) and more the first week of March with reports from the 3 drills. This should give us a better understanding of Clan Lake Zone potential. The fact that Tyhee has decided to put the 3 drills available on the Clan Lake Zone means that they are expecting very good news -geologists' fingers crossed!- from this zone. I will later post a map of the zone in order for you to better understand its importance.

Hubert

Some important members of Tyhee's board being away the PR I was expecting could be delayed until the last week of January.
Hubert

Since last week, the SP is retreating to a lower level. This is surprising, after the strong showing and the new -28.5cts- 52 weeks high. However I do believe that this is just a retest of the lows.
I have seen many times companies' share price trading at a lower level due to coming news...
I am going during the next few weeks to analyse Tyhee from a more technical view and try to add the information on a link available on the right side of the blog. If you have specific questions please post them on the comments and I would incorporate them in my analyse.

Today I would like to start with the difference between mineral resources and mineral reserves and where Tyhee stands on the issue.

Tyhee has announced 3 different types of mineral resources: Measured, Indicated and Inferred.
A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable. These assumptions must be presented explicitly in both public and private reports. The resource estimates have to conform to National Instrument 43-101 policies. They can be sub-divided in 3 levels. From the lowest to the highest they are:

The lowest level of resources is Inferred. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.

The middle level is Indicated. An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
The highest level is Measured. A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Resources are the first step before announcing Reserves. Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve. TYHEE has no reserves yet, just resources. Why is the above information important? Because it is the first step to understand Tyhee's potential value. There is NO specific way to convert resources to reserves. Please remember that only Ormsby and Nicholas Lake are included in the PA. The numbers used are as follows:

Measured: 437000. Indicated: 832000 M&I: 1269000 Inferred: 374000 M&I + I = 1 643 000oz

Tyhee' PA (08/2008) is based on a mine life of 7 years with 170 000oz/year (total of 1 190 000oz). If I decide to use the M&I numbers only (this is what NI43-101 is requesting!) I get a ratio of 1190000oz/1269000= 93.8%
The latest numbers available (12/2009) indicate the following:
Ormsby + Nicholas Lake: M&I: 1 509 000oz Inferred: 143000oz M&I + I = 1 652 000oz
We can see that the"better" resources (the ones closer to "reserves" are now higher, while the inferred has been reduced to 143K from 374K. If I use the same ratio used above (93.8%) I get a new total of 1509000oz X 93.8% = 1 414 000oz instead of 1 190 000oz (an increase of 224 000oz). Keeping the same numbers as the PA we now have a mine life time of 8 years and 4 months. By adding Clan Lake we add almost 2 years. So we now have a mine life of more than 10 years from 7 years 18 months ago! I would like to add that, based on the PA, the addition of 1 year to the mine life, and everything else being the same, the NPV -Net Present Value- of the project jump from $143 576 211 to $195 153 345!!!



Based on comments from the PA: "It is recognized that a 2,500 tpd rate shows improved economics, however the anticipated expansion of resources warrants consideration of the higher throughput.", it is my opinion that rather than extending the mine life Tyhee after increasing the resources will decide to increase again the tpd to 3500tpd in order to reduce the payback time. This will give the company the opportunity to faster get the financing for the plant and bargain for a lower rate.

I just want to remind you that I expect some news for next week.

Hubert

I would say for those of you who wanted to buy Tyhee on the cheap: "TOO LATE". It is breaking out and going to the next stop: 36cts.
I did expect this to happen but the strength of the move is really amazing. This is not a regular -slow- Canadian train...It is a French TGV or Japanese bullet.... AND the RSI is still under 70, meaning that we can expect the strength to continue until the end of next week.
When we reach the 36cts level I expect a pause. How long??? it all depends on Tyhee's board. I said before that I expect the board to release many positive PR culminating with PDAC in March...
So my call: PR coming between January 14 and 21...
Hubert

2 battles are going on:
1-Tyhee share price is fighting the 26cts level. The price is oscillating up and down from this first important level. The good news is that every time the price goes down to the 24.5/25cts more buyers are taking advantage of the weaker price and the SP goes back above 26cts. I expect the battle to be won shortly en route to the 36cts.

2-Gold and US dollar. Too early to say of course but it looks that what I have been predicting is happening: US dollar and POG are going up together OR at least the US dollar is stable and the POG is going up. This should continue until at least the end of March if not June. We can expect the price of commodities to go up and therefore the inflation to go up too. Bullish for gold!!

Hubert

Yesterday I wrote: "2010 has just started and it looks to me that we are going to enjoy a very positive, profitable year with Tyhee." and in the first day of the year Tyhee is up 22.7% and is at a new 52 weeks high at 27cts! Volume was more than 331000.
The added good news is that we get a breakout -26cts- and we can look for the next target 36cts. When we reach this level we go for the 60cts target.
I am convinced that Dave Webb and the board are going to play this momentum and release many PR starting in the middle of January and culminating just before PDAC in March. Be ready to be surprised!

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