Thank you, that makes sense, although I am surprised it is so casual when money is involved. From the report and the few posts on the drilling that actually make sense, the issue is attributed to the gold grain size and the type of ground, and seems to be treated as an obvious outcome rather than a surprise. Was the gold grain concentration known, should this have been anticipated or planned better? Is there any poor management here or just bad luck? I have actually made similar mistakes with sea ice salinity cores, but we mitigated the errors by modifying our sampling regime because we processed cores in 24 hours. The only consequence was I used a time consuming and complicated salinity measurement instrument to get 0.01 accuracy when the sample variance was already 0.1 and could have been measured on the spot with a digital meter!
I have never seen resource results quite this before in 10 years of investing in gold companies, so really not sure what to make of the risk. Maybe it is because they just recognise from the drilling it is not possible to accurately estimate resources, but in this case EXU felt pressured...
I am tired with many posts repeating the same mantra and blame with RMS, so if you don't like the offer then just forget it, and don't treat every post here as a challenge from RMS holders. EXU has gotten a lot of exposure now, especially to the holders of RMS and ALK. Instead of insulting and criticizing then please find time to actually treat us as prospective investors and answer our questions or provide some actual analysis as to why you rate EXU a buy. Please.
Can anyone (please someone who actually understands and knows) tell me is the resource modelled using fractal statistics now as for natural processes or is it still a classical distribution?
From what I have made sense of in previous posts, the underestimate of grade is not in the statistical sampling, but the loss of grainy gold in the measurement process. This results in (likely possibility) of RC drilling showing lower grades, got that. However there was also a lack of statistical significance for obtaining the overall resource grade, which seems to me to also indicate undersampling, that is the spatial variation of the gold was not consistent, for example adjacent samples not always correlating higher together than those spatially separated. Can a geophysicist or engineer with direct work experience in such measurements comment if the spatial distribution of heavier grain gold is likely to be consistent (varying slowly across the deposit), or also patches and discontinuities? Such that some RC cores would intercept the gold but not measure it accurately and others would miss the grains and just get the smoother distribution of ore and very fine grains?
So we have the RC drilling as providing a lowest case scenario grade , although barely significant statistically. Both EXU and RMS would easily have seen the issues with the drill results without needing the resource definition report, obviously. RMS concluded it is just as they expected with their initial offer. EXU are still intendinging to do more drilling. Many opinions here are that drilling is not going to be worth getting a better defined grade and reserve, but EXU said they will use the 8M for resource definition and exploration and the BFS. I see the Mace is also open still, so that is more drilling, and presumably also for the mine plan. Were there other deposits as well to increase the resource? That seems to be a lot of money to keep drilling with if they are already confident they have enough gold for a bankable feasibility study and financing. So what sort of results are we likely to see over the next 6 months before they present a detailed proposal?
I understand sonic drilling but I thought the issue was not gold loss in the drilling but in the actual gold measurement process. Someone a way back said there was a more accurate way to do the assay that would not loose gold present in the sample when measuring. No one has really followed up on that but is that reasonable, and if so then surely EXU could have changed their measurement process after the first few cores, since they poster said it cost less than re-drilling... I think ...
So those who are rating EXU a buy now, what results do you expect in the next 6 months that will drive the share price up to make todays price seem so good? From posts above, further drilling will only confirm what is already known and not provide the certainty of a bigger resource or even initial reserve. The market was not impressed with this so I do not see more of the same pushing up the share price. The extent does not seem to be such an issue, only the grade so no push there... Are there some more promising leads to be explored for new ore bodies?
Finally, for the 4th time can anyone else present some consideration of financing... As an investor here you must be concerned with how and when the financing for the plant occurs, since all who reject the RMS proposal consider trucking the ore to be uneconomical. If a share capital raising, then when and at what price do you hope for, and what net dilution including ALK and options etc. Is a loan possible without a better resource definition and initial reserves? What loan and interest and what quarterly repayments? Then what are the repayments per oz recovered. I managed to do this quickly for you in another post and it was trashed but no alternative presented? I am open and interested in any such analysis from those who have followed EXU longer than I.
