Here's my previous post, which I tried to make a 'public' post but it didn't seem to let me change that (past the time limit on edit function?)...

In light of the fact that this latest news release (which some peeps interpreted as 'non-news worthy') re-iterated an important aspect of what the 43-101 implies. I thought I would repost this (below) to have a few people comment on it, or repost it elsewhere.

The most recent 'news release' took the effort to highlight only one tiny bit of info, that provides great insight into the profitability of this deposit. Remember, they can't spell this out for you at this level of technical report... They aren't allowed to say "So this means that...." because their hands are tied by the guidelines of "simply presenting the numbers".

Usually, in a mineral deposit, if you move the economic cutoff 3 times higher, you would get a much greater drop-off in the resource size. But because of the incredibly high gross margins that will be produced by extracting ore that nets you ($8500-1000=)$7500/25 tons of ore ($300/ton or roughly 1/4 oz Au equivalent ie, bonanza grade ore value in an open pit scenario), it really doesn't matter if the cutoff grade is 1% or even 2% (implying a lower revenue number - not that a lower revenue number is implied. They simply went to the trouble to show that even if the rev number was smaller, it doesn't make the deposit 'uneconomic'.), the deposit would still be incredibly profitable to mine. And the mine life would only be shortened by 5%, so it would drop from say 20 years to 19.5 years. 20 years at 70,000 tons per year product at $8500 (and then they would build the underground mine after that).

In the post below, i tried to indicate that the 43-101 did not even count all the graphite that they would expect to find in that whittle pit shell. RPA counted only the graphite that was above the cutoff numbers that they posted (they did post .4% cutoff numbers too), of course. They didn't help you read anything into those numbers. But the numbers are there. Had they also included .2% and .1% cutoff numbers, those would have been very telling towards the 'cost of removing waste rock', but based on the limited drilling and no downhole images and data, they would have been stretching their necks out a bit far to try to guesstimate those bigger numbers (read: there's probably lots of .1-.4% graphite in the rock surrounding the pipe images in those 43-101 diagrams). And that 'low grade ore' is not important until you consider that it may show up in pockets, veins, schists, streaks, etc. that will (have a higher average grade than what can be reported after only a narrow intercept) also be able to be sent to the mill, profitably. Thereby reducing the cost of removing said 'waste'.

So in the table you can see that moving the cutoff from .6% to .4% increases the (initial) RE numbers by 15,000 tons. Can you imagine if they drop it down to .2% or .1% and the resource increases by another 15,000 or 30,000 tons? So below the .6% cutoff (outside of those pipe images in the diagram) there may be 50,000 tons of graphite? So let's say they can only extract 60% of that. 30,000 tons at $8500/ton is $250M. That pays for the removal of about 85 million tons of surrounding rock ($3/ton waste cost). Not including any of the high grade material found in the pipes.

Another noteworthy comparison...copper mining currently happens on deposits or old tailing piles with ore as low as .2%/ton ore. Costs to produce at that low grade level can still be less than $1/pound, so it's still 'economic' to do so. So if Albany graphite sells for $4/lb (Roth), any waste rock that even remotely falls into this .1%-.2%/ton grade range should be profitable to put through a mill.

So in the PEA, don't be surprised if they show a mine plan that includes a double circuit mill process, one set up for (extracting 90% of) high grade (the pipes) and one set up for lower grade (surrounding rock deemed 'worthy' as well as waste feed (that would still contain .4% Cg) leaving the high grade mill). Of course, they may be able to optimize this with one mill, but I'm going to guess that a double circuit process will be recommended. The high revenue per ton sale price (whatever that is) will mean that getting every last imaginable ton of product will be well worth it.

So while the reported numbers in the 43-101 are important, the numbers that did not make it into that report may also be 'the size of an entire copper mine'. Those implied 'by-production' graphite 'credits' will greatly lower the costs of the mine and impact the bottomline NPV numbers.

Read between the lines.

Originally posted here as a response to Rapid Robert after the Sedar report...

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name=Zenyatta-Ventures-Ltd&subject=Re border=\"0\"> verburden-not-waste&pid=95581

Rapid robert: Sure good to hear how excited everyone is with this report being published on sedar. I just want to remind everyone that this over burden some are concerned about is not necessarily waste. I have read that this area is low and very wet at times. I have never been there to check it out but do believe it to be true. If they did not have this overburden covering the graphite to build up the surrounding area, they would have to buy it. So I see it as being useful.

Do you miners see it that way?

Absolutely. For hauling purposes, there was always going to be a permanent hauling road built between the future mine and the surrounding infrastructure. That road would need fill, so

when cost to remove overburden = cost to bring in road fill

and you can use the over burden for road construction materials instead of paying to ship them in? It may actually lower (and in the very least mitigates) the project cost. And turns the 'cost of overburden issue' (if anyone really tried to paint it as a negative) into a non-issue.

I like takenotes' blabber observation about this part:

TaKeNoTeS: RPA notes that there is additional mineralization in assays outside the mineralized wireframes in the West and East pipes well above the cut-off grade of 0.6% Cg. It is RPA’s opinion that the narrower thickness and lower grade of these intercepts together with intervening material that is below cut-off grade precludes the inclusion of the intercepts as Mineral Resources at this time.

So, all that extra rock that you see removed in that pitshell? Lots of it may have (as they haul it away to 'remove' it to 'get at the pipe') schists or 'vein' like patterns that are visually identifiable due to distinct coloration. You know, the odd few tons here, the few odd tons in a vein or mini pipe or 'lump' over there.

If that's the case even infrequently, it will GREATLY REDUCE THE COST OF REMOVING all the surrounding WASTE ROCK.

This would directly counter the 'added cost' affect that Chief infused into the debate regarding the distance between the east and west pipes.

For example: you remove 10,000 tons of waste rock at a cost of $3/ton. $30,000. In there somewhere is a small 100 ton pocket or vein of 1% graphite. Or think: every 100 truck loads out, they find one truck of 'black stuff', and send it to the mill instead. They get one ton of graphite from that 1% grade material (just think of the math if they find the occasional 2,3,4,5,6,7% 'black pay dirt') they net $7500 bucks 'value' out of it. Thereby reducing waste costs down 25%. or one out of every 400 truck loads, the find one truckload of 4% .

If they set the economic cutoff conservatively (and they did), then all the rock between pipes that doesn't meet that cutoff is assumed to be 'nonreportable' IN A 43-101. So it appears as 'zero'graphite' it the reporting (diagrams). In all likelihood, there will be streaks and pockets of graphite throughout that waste rock, in small quantities (25% cost reduction example above looks at .01% graphite throughout the waste rock - if the number is .04% (one tenth of the economic cutoff) then the waste rock is effectiveley removable at almost zero cost.

RPA stated ore cost at $4.50 and waste costs at $3, is the 33% reduction attributable to these differences? (Once again being conservative)? I don't believe RPA stretched the conversation in this direction. They 'precluded the inclusion of those intercepts in resource' numbers.

Spaces between the pipes has always been assumed - by many in this group - and it seemed by D's initial assessment on the date of the 43101 release, to be void of economic material. That's not going to be the case.

Let's call this oversight the 'zero graphite' issue. To prove that 'zero graphite' doesn't exist and that one shouldn't base project costs on a poor assumption of 'zero graphite', from news release):

In late 2013, Zenyatta contracted DGI Geoscience Inc. (DGI) to survey seven boreholes
(Z13-4F14, -4F16, -4F17, -4F18, -4F26, -4F27, and -4F34) with three probes: an Acoustic
Televiewer (ATV), a Focused Density probe, and a Full Waveform Sonic probe. Two of the
seven holes (Z13-4F18 and Z13-4F34) were also surveyed for magnetic susceptibility,
inductive conductivity, apparent resistivity, natural gamma, and fluid temperature. A total of
3,192 m was logged. Results were provided as strip logs and Wulff stereoplots and will be
incorporated into a Preliminary Economic Assessment (PEA). Density and rock quality
designation (RQD) data correlated well with Zenyatta’s drill logs.

These underground mapping techniques will support the idea of super low waste removal costs, because there will be 'secondary' graphite amongst that waste rock that is easy to locate and mine as well.

Zen's PEA (and all the possible bits of news coming out before that) will show the value proposition quite clearly: a low cost, high profit resource (investment).

Kind of like buying shares here at $2.