Re: Whittled Resource - PRB New Estimate
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Solid foundations. New horizons.
Message: Whittled Resource
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Mark,
It's good to have some comments from Jenning and RBC (below). Just wondering if you have received any explanation from PRB IR.
I have quite a few questions that need to be clarified by PRB, below are a few observations/comments, some of them has been posted on SH, attached below for info.
Agreed with you that being too conservative may give the shorter an chance to pound on the stock. At least Dave should have come out with some kind of explanation for what is presnted in the latest estimate with the reasons clearly stated. Not dropping a surprise like this. Better still he should have warned people ahead of time about about what he's planning to do (more conservative model for the pit, high cut off grade for the HGZ...and the reasons are so and so, with an expection of upside, so many additional ounces, and improvement on the POG). Dave could also cite the resource and grades at Goldex which are lower than what Borden Gold UG has. May be he still want to fly below radar? But, why?
goldhunter
-----------posted on SH----------------------
PRB, New resource estimates
This came as a surprise. There are some remarks about re-distribution and more conservative parameters used in the new open-pit model (see below). But Dave should explain this more fully. May be there are reasons for this, but the psychological effect in not good.
"It should be noted that, in addition to the re-distribution of ounces from previous pit-constrained models to the new underground constrained resource, the parameters chosen for this updated pit-constrained resource are more conservative than parameters used in previous updates. This results in a more robust overall mineral resource with a focus on higher-grade material at the expense of lower-grade open pit material. Consequently, the pit-constrained resource now contains fewer ounces."
I would wait for a more detailed explanation from the company. Here are a few initial observation.
- The new open-pit model (shown in the NR) appears to leave out a good chunk of deposit, but not sure if was the cause for the missing 2 Moz.
- The grades (for the HGZ are excellent, but do you need to high the grades that high for an economical UG operation? Reference, AEM/Goldex 2Moz @1.96 gpt and making money.
- If the aim is to get similar grade as Goldex then the resource could be significantly more than 2.03 for the UG portion. Play with the 3D interactive model to have some feel.
- Anyone know what " resource was based on 224,000 drilled metres and 168,000 assay metre" means???
- Did they include all the results in the 600 m extension (from 2000SE to 2600SE)?
- It's obvious that Dave wanted to play up the UG potential and down play the open-pit (for whatever reasons, land claim negotiation?). Also, the estimate for the UG has a gap in the wedge area which is also subject to negotiation.
- This may be just a coincidence but this latest estimate for the UG portion seems to fit John Kaiser's remarks (Gold Rpt, 13 May 2014).
We will have to wait for more explanations from Dave.
goldhunter
"It should be noted that, in addition to the re-distribution of ounces from previous pit-constrained models to the new underground constrained resource, the parameters chosen for this updated pit-constrained resource are more conservative than parameters used in previous updates. This results in a more robust overall mineral resource with a focus on higher-grade material at the expense of lower-grade open pit material. Consequently, the pit-constrained resource now contains fewer ounces."
I would wait for a more detailed explanation from the company. Here are a few initial observation.
- The new open-pit model (shown in the NR) appears to leave out a good chunk of deposit, but not sure if was the cause for the missing 2 Moz.
- The grades (for the HGZ are excellent, but do you need to high the grades that high for an economical UG operation? Reference, AEM/Goldex 2Moz @1.96 gpt and making money.
- If the aim is to get similar grade as Goldex then the resource could be significantly more than 2.03 for the UG portion. Play with the 3D interactive model to have some feel.
- Anyone know what " resource was based on 224,000 drilled metres and 168,000 assay metre" means???
- Did they include all the results in the 600 m extension (from 2000SE to 2600SE)?
- It's obvious that Dave wanted to play up the UG potential and down play the open-pit (for whatever reasons, land claim negotiation?). Also, the estimate for the UG has a gap in the wedge area which is also subject to negotiation.
- This may be just a coincidence but this latest estimate for the UG portion seems to fit John Kaiser's remarks (Gold Rpt, 13 May 2014).
We will have to wait for more explanations from Dave.
goldhunter
Read more at http://www.stockhouse.com/companies/bullboard/v.prb/probe-mines-limited#5WBfwzKcF5AI6UIB.99
-----------comments by Jennings and RBC form Mark's post-------------
"Not included in this resource estimate: - we estimate that approximately 3 million ounces of gold grading approximately 0.9 g/t has been excluded from within the new pit shell. The gold is still present but the Company has not been able to draw the pit shell down far enough for it to be included. This "missing resource" remains an additional source of upside and will ultimately depend on gold prices for it to be mined profitably." comment by Jennings
"Probe management estimates that
~700–800Koz have been re-distributed from the previous resource's
open-pit category (which was 4.3MMoz at 1.02g/t M&I+I using a 0.5g/
t cut-off) to the new resource's underground category." RBC
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