Again, Greetings Kipper01 and thank you for your communication.I...

Again, Greetings Kipper01 and thank you for your communication.

I shall go straight into a reply to your questions first and then perhaps proceed later with the narrative between you and GrumpyMonkey.

In this case of drilling for Nickel and Copper sulphides the mineralisation of interest intersected is identified after it is laid down in the core trays, the geologist visually estimates what proportion of the sulphides comprise the interval containing the sulphides and records it on the log he is preparing. Experience serves within say a 20 to 25% accuracy at this stage. This doesn’t mean anything other than serving as an alert to having intersected the target and that the visual estimate of total sulphides in the interval is approximately (X), it is not a method for quantifying purposes.

In recent years electronic instruments have been developed and refined that can be used on-site in the field which can read and quantify the element %ge over an interval and obtain a reasonable estimate of the element sought. Initially, these readings were used as a means of obtaining a quantitative value of elements sought, but because such field readings had varying margin ranges to conventional laboratory assay techniques (such as fire assays for gold or chemical assays for say ferrous metals), they were not considered as an acceptable technique for ore resource (JORC) or as a bankable feasibility estimation document. And, whilst field instrumentation has improved significantly over the years, as far as I know they are still not accepted as a method for estimating ore resources for external commercial purposes.

Having said that, companies carry out significant testing for internal use purposes, to estimate the range of error between handheld field devices to estimate grade over an interval and laboratory assay methods and use the results as a yardstick which they can use in QAQC exercises to rely on field readings for almost instant reporting. (note: massive ore is alwaysmuch easier to read and estimate using field instrumentation, it is also lesstime-consuming)

The good thing with SGQ’s ore is that there is very little variation between the field hand instrumentation and the laboratory assay results and therefore we can rely on the accuracy of the field readings when reporting periodically. At the end of the day, however, chemical assays must be carried out for commercial documentation. So yes, you are correct in saying that the assays, however, they are derived, have to be reported over an interval and a grade reading of the element sought over that interval.

In reply to your second part of the question, my answer is as follows,

I am reasonably sure that all the intervals with mineralisation in the deep holes, have principally intersected disseminated and or blebby mineralisation with very small intervals in massive ore. Field testing using disseminated mineralisation, for the reasons explained above, can be very time consuming, I suspect therefore that for reporting expediency, the team reported a percentage visual estimate of total sulphides in the intervals which comprised nickel, copper, pyrrhotite and pyrite, they did, however, report on the thickness of ultramafic/mafic intrusives and the intercepts of the disseminated mineralisation within them.

Whilst they did not dwell on it in the report, and if I am not mistaken, I did detect a grading of the sulphides in the intersections, i.e. more quantity of sulphides towards the base of the intervals intersected than higher in the interval. (refer MAD 185 in the Sep.9 report). What I suspect we will ultimately see in time is that disseminated sulphides will contain the economic minerals throughout the Cathedrals wherever they are intersected, albeit they might be low in content – say an average of 0.5% to 2% Ni/Cu. - with blowouts of 3% to say 6% where massive sulphides are enveloped in the disseminated halos. So, let us hope we find a high proportion of disseminated sulphide pockets in the intrusives which envelop massive sulphides, as opposed to just finding disseminated and blebby sulphides in the system.

The team in the field want to move fast and at this stage, the focus would be placed more in having confirmed that the intersected sulphides in the deep holes comprise economic mineralisation and not just pyrite or pyrrhotite as with other parts in the Yilgarn, they would worry about grades later. And, with a strike length of at least 4 km. over Strickland to test, I would also be wetting my pants to get it moving.

Kip, I hope I have addressed your questions adequately, and if not, please don’t hesitate to write down your queries and post them because someone will reply. I am happy to address any questions that my experience limits allow me to share with you or the many posters and friends on Hot Copper, particularly with the SGQ family. I know that you and many others are respectful of the narratives on SGQ which makes it a pleasure to participate in.

I wish you and all the best with your SGQ investment.

Cheers, Kip,

Helmenesh.