Stepout hole BR-2-18

The scope of this exercise is limited to the volume of rock between barn-burner holes BR-1-17 and BR-2-18.  It is important to note that the following estimate is intended to capture just the tonnage and value created by the step out hole BR-2-18. The volume of rock represents just a fraction of the total mineralized area and the actual resource estimate 1H19 is likely to far exceed the estimates rendered below.


TONNAGE

Per the drill announcement, BR-2-18 was drilled 80m down dip and 50m down plunge from hole BR-1-17.

See excerpt from the announcement below:



BR-1-17 was drilled at -90° dip angle so the 64m intercept should be close to true vertical thickness. However, BR-2-18 was drilled at a -60° dip angle. To calculate true vertical thickness we can use basic function 64m * COS (60) = 32m. The blended average is 48m.

Therefore we assume dimensions as follows:

- 50m strike
- 80m lateral width
- 48m vertical thickness

As for density, I use the weighted average of sphalerite (3.6t/m^3) and barite (4.4t/m^3) which give me a specific gravity of 4t/m^3.

Tonnage is calculated as follows:

50m strike * 80m lateral width * 48m vertical thickness * density of 4t/m^3 = 768,000 tonnes


GRADE

You can see in the long-section below that grade continuity is excellent for at least 150m from BR-7-17 to BR-2-18.



However, for this exercise, we only care about how many tonnes and the value added therein as a result of this stepout hole.

BR-1-17: 8.5% Zn, 5.1% Pb, 374g/t Ag, 2.3g/t Au, 1.0% Cu
BR-2-18: 10.5% Zn, 7.7% Pb, 537g/t Ag, 4.4g/t Au, 0.9% Cu

Weighted average: 9.2% Zn, 6% Pb, 428g/t Ag, 3.0g/t Au, 1% Cu


POTENTIAL REVENUES

Input assumptions:







Throw it all in the blender and I get the following revenue per tonne mined for each of the three saleable concentrates:

- Zn Concentrate = US$175.14 per mined tonne
- Pb Concentrate = US$221.44 per mined tonne
- Cu Concentrate = US$109.93 per mined tonne

Total revenue per mined tonne = $506.51 per mined tonne

If we multiply by tonnage = $506.51 * 768,000t = $389M