Fmx, reporting different cut off grades down to 0.2g/t is appropriate for Buccaneer (you will see higher 0.5g/t and 1g/t cut-off for reporting of OP assays and resource and 0.8g/t for Hyperion).
Each uses different cut-offs to suit the deposit.
OP is a high grade, narrow vein, high strip ratio system.
A higher strip ratio requires a higher cut-off.
Buccaneer is a much larger much lower strip ratio deposit more appropriate to bulk mining.
The higher grade material is surrounded by a lower grade halo. The lower grade material must be mined to access the higher grade material.
Once mined and out of the ground, the lower grade material becomes likely to be economic to process rather than treated as waste material.
So while the low grade material might not be economic to mine and process without the higher grade core, it still is likely to add value once out of the ground and therefore it is appropriate to report it as part of the resource.
You also need to keep in mind that the 0.2g/t cut-off produces an average grade of 0.65g/t.
You say "given using a more 'industry credible' 0.6gt cutoff drops their overall resource by almost million ounces. It will be interesting how they report this in the future"
From the resource statement on Buccaneer;
“However, in comparison to several other bulk tonnage deposits around the world (such as Kinross Gold Corporation's Fort Knox Mine in Alaska) the
use of an 0.2g/t cut-off is reasonable. The 0.4g/t cut-off infers a total resource of 2.257 million ounces of gold at a grade of 0.8g/t gold and represents an approximate 55% increase in overall ounces compared to the 2011 resource estimate and is comparable in head grades to bulk tonnage mines such as the Boddington Mine in Western Australia. The 0.6g/t cut-off resource estimation infers 1.566 million ounces of gold at an average grade of 1.1g/t gold and represents an approximate 50% increase in overall ounces compared to the 2011 resource and is comparable to many large scale bulk mining operations in Australia and around the world.
They also make it clear when referring to the lower grade cut-off that “Until a feasibility study is complete it is not possible to establish the economics of such a system.”
I see no deception here and nothing wrong with reporting down to 0.2g/t for an average 0.65g/t grade considering the size of the deposit and for reasons I mentioned above.
It also seems appropriate to report it at those cut-offs in an environment where the POG is near record highs and trending up long term.
That's not to say that I am predicting anything about the economics of Buccaneer at various cut-offs, but until the FS, the reporting appears appropriate.
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