2015 and counting...., page-68

Volunteer1

Infill drilling works along the following lines.

Initial exploration drilling has established that ore exists in specific holes according to the assays from logged cores.
We have a broad are that contains ore that we know a certain amount about. In calculating a JORC with measured reserves, which is effectively aimed at ensuring a more reliable mineral deposit for the purposes of commercialising the ore body and commencing mining, companies need to do additional holes between the existing holes and sometimes depth extensions as well. The idea is that they firm up the likelihood that their estimates are accurate. That data is then used in decision making and in planning the production run of the mine.

Just for example, let's say the current spacing is currently 100 metres apart on the holes, AVB may go through and put down an additional 10 to 15 holes to utilise the allocated 2000 metres. They will only work within the outlines of the shell of the proposed mine. There are many indications that there is more copper outside the current design but that is all for the future. Right now they will be focussed on spending the money where it is most needed.

A geologist can tell an enormous amount about what is going on under ground by looking at the composition, grain size, effects of temperature on minerals during formation etc. That is why we currently have a JORC that is largely "indicated". Simon Mottram and co will be reasonably confident about what is down there. What this infill drilling does is mostly confirms what they have deduced. Assuming our geo team knows what they are doing there will be few surprises but they will get extra data (and I do think they know what they are doing).

Here is where the JORC numbers gets interesting though. Contrary to all the headless chickens fearing that we will end up with a lesser resource as a consequence of drilling, the odds are that we will actually end up with a larger JORC. The reason is simple. In calculating a JORC there is a fractional multiplier applied to the calculated area of ore. The more uncertain the results are the lower the multiplier is. I do not know the actual calculations used but I do understand the principles. If the raw ore body was calculated at say 500,000 tonnes you would then have to multiply that number by maybe 0.8 for measured resource, 0.6 for indicated and 0.4 for inferred. This means that the same resource would be stated initially at 200,000 tonnes if inferred, 300,000 tonnes if indicated and 400,000 tonnes if measured category. Hopefully that is clear. The moral of the story is that when they drill the additional holes they firm up their knowledge and get to state a figure that is more reliable. I expect we will get told at the AGM when to expect that data. I'll certainly be asking if it isn't volunteered.


PS It is possible that the numbers could go down but only if the composition of the ore body turns out to be fundamentally different to that already deduced by the geo team. If they drilled a hole between two existing holes of say 30 meters @ 2% each but came up with a much reduced result, that would be a problem. I add this for bit for clarity and transparency but do not believe for one moment it is what will happen.