I had a friend look at KGL in 2013, so the below note is a...

I had a friend look at KGL in 2013, so the below note is a little old, but still worth the read:

The attached is a presentation relating to Jervois from September this year. No doubt you would have been aware of the drilling programme of 20,000 metres commenced in September. As far as the future of Jervois is concerned I think they might have their work cut out to get it to profitable mining stage where they can build infrastructure such as the rail link to the existing Alice springs – Darwin line. Currently their studies show inferred and indicated resources of 13.5 Mt @ 1.3% copper and 25.8 g/t silver and 69,000 ounces of gold spread over the four currently separated sites Marshall Reward (~8Mt), Bellbird (~3.8Mt) , Green Parrot (~.53Mt) and Bellbird North (~.15Mt) spread over about a 12 kilometre strike length and from two seemingly distinct ore types they plan to concentrate on site and then ship. I note that one of the elements in the processing is removal of bismuth so this might be an issue not much is known about publicly.

The main issues with the progress of Jervois since its discovery in about 1930 seem to have been the narrow linear nature of the vertical ore zones and probably discontinuities in them along strike, complex mineralogy and different ore types, and relatively limited grade and tonnes in each of the sections. However the mineralisation and or prospective host rocks are outcropping and strung out over about 12 kilometres of the syncline rim where the deposits occur. There seems to have been a very large amount of drilling of which we only have the highlights and the results of the Hellman & Schofield resource estimates which are only in the inferred and indicated category reflecting I believe the difficulty correlating the intersections. The sixty four dollar questions must be whether much greater tonnages of ore can be located and whether the grade of those tonnes can be such as to lift the overall grade into the >2% copper and hopefully more towards 3 - 4%.

The encouraging thing is that there are some high grade intersections. However they do not seem to be extensive enough to raise the overall copper grade and a closer look at the long sections of Marshall Reward and Bellbird shows most of Bellbird and half of Marshall Reward to be below 1% copper requiring heavy reliance on the higher grade intersections. Both the Marshall Reward and the Bellbird longitudinal sections show that good amounts of the strike length and down plunge have been sampled by drilling and presumably on available data these are the best sections. At Marshall Reward it is 1.2 kilometres of strike and 500 metres depth and at Bellbird 800 metres strike and 400 metres depth. A proportion of the proposed drilling is to be used to test the down plunge extensions of these zones so the expectation must be that this will obviously increase the tonnes but with higher grades.

Competition in the copper business is fierce from huge porphyry systems (~1,000Mt @ 1% copper equivalent) and very large massive sulphides like Mt Isa which has roughly 100Mt measured in the 2 – 4% copper range and 50Mt proven of similar grade with infrastructure largely amortised and a smelter on site. In terms of smaller copper the Degrussa Sandfire deposit quotes measured indicated and inferred resources of 13.5 Mt @ 4.7% copper and 1.9g/t gold and proven and probable ore reserves 11 Mt @ 4% copper and 1.5 g/t gold. So Degrussa is a good yardstick for Jervois with its 13.5Mt @ 1.3% copper in the inferred and indicated category but in four separate zones.

While this is my understanding of the competition in terms of copper mining exploration and the exploration ‘market’ is another matter and I would personally tend to place Jervois very much in the exploration category so hopefully a good proportion of the 20,000 metres will be aimed at new targets with potentially higher grades and with more tonnes.

These few paragraphs are the best way I can summarise my few days of digging through all I can find in the time about Jervois and it is just my personal take on it without doing a proper in depth study which is probably not required or possible without all the detailed data.