Thanks for the tag;
So the result they got was positive in terms of grade and it's distance away which makes the extension possible. The question is really about whether the grade are economical in between.
If not you end up with little satellite deposits which doesn't do much to for economic extraction. Note the 3 yellow drill sites returned under 300ppm. If there is just a small area around that red hit which is good grades it doesn't really do much to bolster the resource size. Abx would almost need everything in this image hit 600-700ppm, it all be ionic and probably thicker intercepts to counteract the overburden.
View attachment 3693608I'll put this into context in terms of just how much extension you'd need to have a economically large enough deposit.
Look at the scale in the bottom right hand corner. Lets just be outrageous and suggest that everything in the image ABX will hit TREO.
Using that, you're looking at a 3500m x 3500m space. Now assume 2m's thickness and multiple by specific gravity of the host rock = 68mT @ best case 550ppm.
1) There is slim to zero chance the full image will yield 2m's mineralisation across the tenement. This is indicated by the "too shallow" hits which IMO delineate the non extension of the clay mineralisation.
2) The 68mT assumes that all portions of the entire image are ionic. Also unlikely, they have performed water soluble tests and proven a small portion of recovery. For context a true ionic clay can concentrate to around 900,000ppm in a salt solution. Post #:
56059877 explains this more.
3) 2m's of mineralisation with 5-6m's of overburden will mean significant of mined/t to processed tonnes.
4) The grade if the resource extends probably will be lower than inside the current red zonation.
5) If they drill into the source rock or bedrock, its very likely to be not ionic.
6) If all the stars aligned, and you ended up with 60mT odd at that grade, feed rate or 10mT p/a it's toast in 6-7 years.
My recommendation would be for holders to research some of the economical ionic clay projects globally and do some benchmarking in terms of grade, resource size, strip, recoveries etc. Tantalus, Makuutu, Serra Verde, Aclara (previously biolantanidos) are a start and there is information regarding there viability in formalised studies.
Economical viability is the culmination of many factors, but if you get a flavour of where you need to be to begin with it can help people to understand just what sort of grades, thickness, overburden, total resource etc etc begins to look viable.
I am obviously biased in the sense that I do own an ionic clay project.
And here's some unbiased factual commentary for a quick comparison.
-It's strip ratio (waste tonnes/processed tonnes is .76. this will be around 4.
-Grade is 820ppm. this will be around 500-600 (Just my estimate on current hits.
-Resource size proven to 315mT with exploration target of 500-750mT. This IMHO will be around 10-20mT un proven thus far.
-Confirmed as ionic across the 315mT. This has no tangible evidence (yet) of being ionic.
With all those factors considered, even at todays REO pricing, with the basket it has - yes it's profitable but it's less profitable than indicated in it's SS. I guess my point there is that, ABX is a fair way off that project and if the economics were even a little different there it would be a break even project.
Appreciating that does sounds fairly doom and gloom - but being transparent that if I find a viable ionic clay project i'll invest - no questions asked.
For me to change my tune on ABX i'd need to see;
1) Proof it's ionic. Just do the met testing with sodium chloride or ammonium sulphate and let us know the recoveries and to what concentration was achieved.
2) Significant, wide spread, thicker hit outside current resource model.
The hit they got in 187 is good. They need about 50 more of those outside the red boundary and a composite sample from them (and inside the red boundary) proving it's ionic.
That may mean you end up with 20mT of ionic clay which might be enough to run a small scale 2-3mtpa for 10Y or so. Noting this would produce roughly 700T p/a of a REO concentrate.
So just to re-iterate, it's obviously better that they found something as opposed to not finding anything - It will just take a fair bit more before you see fairly bullish opinions from me. If i turn bullish enough i'll probably be an investor.
SF2TH
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