cudeco(cdu) trading - representations, page-296

Hi dossa

Thanks for the response, I will certainly say that the statements were only aimed at that chapter, I realise that it is part of a bigger piece of work and would not imply that my criticisms expand outside of that chapter.

It urked me with what I would consider using generalisations against a specific case and implying a lack of robust professionalism. I would disagree with the "codes are not the answer" position as they are there to enforce best practice and transparent due diligence in the application of appropriate practices required in compiling something as complex as a JORC resource estimation. This is all aimed at reducing error and increasing confidence. Certainly where data is problematic or not of sufficient density then it would be open to interpretation resulting in problems in confidence limits. Remember these are estimations but attempt to be as reflective of the actual in the ground mineralisation as they can be and are totally dependent on good data.

To make sure I was not missing something I went back to the ASX release of 25 May 2011 in which the updated resource estimate was attached. There are certainly some points presented in that update that should be reiterated.

Company statement:

"An Updated Resource Estimate was released in August 2010, based on 268,000m of drilling data, approximately 32,000m less than originally planned. It became apparent that certain areas of the resource were not adequately defined and that these areas did not support a sufficiently robust interpretive geological model for use in resource estimation purposes.

The current Updated Resource Estimate is based on more than 305,000m of drilling data and over 292,000m of assayed intervals, which approximates the originally planned drill programme and provides sufficient information to support a robust geological model throughout all mineralised areas of interest."

So the company supports the robust model.

From the content of the resource estimate memo supplied

Validation
"Block models were validated by visual and statistical
comparison of drill hole and block grades and through
grade - tonnage analysis."



Discussion and Reccomendations
"RC drilling under reporting native copper content: Copper assay results from twin or nearby diamond drill holes have generally shown a slightly higher grade than the neighbouring RC drill hole.

This is particularly evident in the oxide zone. MA suspects that the prevalence of native copper through much of the oxide profile including down into primary mineralised zones, has caused the R C drilling to under report copper grades due to the malleable nature of the native copper mineralisation, i.e. hammer tool is smearing the native copper which is too malleable to be returned up the hole by the circulation air flow."

Totally reasonable but the thing that sticks in mind is the "slightly higher grade" comment.


Of greater interest is the comments in the Table that contains the checklist.

Drilling Technique
"Current practise is to use DDH only in mineralised zones"

Drill Sample Recovery
"DDH - Analysis of recovery results vs grade indicates no significant trend occurs indicating bias of grades due to diminished recovery and / or wetness of samples.

RC - A possible loss of native copper in the weathered potion of the mineralised zone has been identified and could result in an underestimation of the copper grade when based on RC drill data, in certain circumstances.
This could not be reliably quantified and no correction to the data or estimates has been made."


Verification of sampling and assaying
"Results between twinned RC and diamond holes are in approximate agreement, when taken into consideration with the natural variation associated with breccia - hosted ore
bodies, identified coarse mineralisation, and subsequent
weathering overprinting."


Data spacing and distribution
"Drilling has been completed on nominal local grid north - south sections , commencing at 100m spacing and then closing to 50m and 25m for resource estimation. Local drilling in complex near - surface areas is further closed in 12.5m."


Orientation of data in relation to geological structure
"Scissor Drilling,(drilling from both north and south), as well as vertical drilling, has been used in key mineralised zones at La s Minerale and Rocklands South, to achieve unbiased sampling of possible structures, mineralised zones and weathering horizons.

Horizontal layers of supergene enrichment occur at shallow depths in Las Minerale and Rocklands South and a vertical drill program has been drilled at right angles to address this layering and to provide bulk samples for metallurgical test work."


QA/QC
"A limited check assay program carried out in 2007 on 497 samples suggests that Cu may be understated by approximately 5%.

There is a need to complete the check assay program for Co and also to undertake a check assay program for Cu. No certified matrix - matched standards have been used for Cu and the in - house Co standards used have very high Co concentrations that are not representative of the bulk of the mineralised samples."


These are select and I would reccomend that if people are interested then the full release be read. I pulled out the ones as they directly adressed issues with managing "lost copper" or "under reporting" issues.

So from the above we can se there appears to be a slight under reporting of native copper from RC when compaired to twined diamond. The diamond results are found to be robust. There may be some under reporting that requires a correct check assay and standard program (5%). The drilling and sample density was considered unbiased and also designed to account for the supergene native copper. The model was visually checked against drilling results as a part of the validation process.

Of course there is a lot more information in there to digest.

Looks like a valid application of well understood modeling methods that also qualifies any limitations. It is a bit hard to see where the missing bits or underestimation (to the levels being proposed) are able to be supported.

I can see that the model should be able to report different ore types and that info would be good to see. Also I note that there are M&I resources in the Rainden deposit that do not appear to be part of any mine plan.


So dossa I am certainly interested in informed discussion on this but do struggle with the validity of some of the things being said. Questioning is good and only provides for a more robust debate.

Thanks for also posting a long response and as I have said - I do like these ore bodies as a geo and my interest is in understanding the facts rather than the speculation. Unfortunately there are some questions that could be resolved if the right info was made available but it seems they are not the priority.

Just as I see it.

Cheers



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