Ann: RIU Explorers Conference Presentation, page-46

Okay, so I've been having a chat to a good friend of mine from the mining industry and offer this as a plausible explanation for the ‘missing’ drill holes.

Let’s say I want to drill 100 holes. Because I'm an organised professional economic geologist, I mark them out on a map before I start drilling: 10 lines of 10 holes each and I number each proposed hole from #1 to number #100.

I start drilling, starting at hole number one. I drill the first four holes but because of something I turn up in those holes ( I strike what appears to an educated eye dolerite, a fault, or a lack of anything etc.), I decide to skip holes 5,6 and 7 and drill the last three in that line; 8, 9 and 10. When I report, holes 5,6 and 7 are missing as those holes were not drilled. This is not to say I won’t drill them later, it’s just at the time, I made the decision not to drill them. Once the time comes to JORC up a resource and I close in my drill pattern, I will possibly drill those holes in any event. The fact is I have drawn up a plan prior to drilling and plotted and numbered my holes.

Things are looking pretty good so I get in another rig to help speed up drilling. Maybe I plot out more holes but how will intervals be recorded in each hole and distinguish between working rigs? I assign each rig a series of numbers to keep things in order for the assay lab, as they like that. Rig one uses numbers 1-20,000 when bagging 1m intervals and rig two uses 20,001-40,000 for theirs. The bags are returned and palleted each night according to their numbers; team one adds theirs to pallet one, team two to pallet two … keeping the bags in order for the lab.

Now rig one drills seven holes in line four before moving up to the next line. Rig two moves in to complete the missing holes … and use their assigned numbers to record samples.

Now the transport and supplies arrive for the week and team one has a full pallet that makes its way back to Perth on, or via, the weekly transport. Team two doesn’t have a full pallet (or there is not room for it on the truck) and so the samples don’t find their way back at the same time. As an experienced economic geologist I don’t report all the holes in the line until I have the full picture … unless one result comes back with 201 g/t. Now I am in possession of market sensitive information so I must report that as a responsible director.

As things hot up and I’m drilling four or five holes a day, samples start piling up. The lab is taking 3-4 weeks to return results and I’m sending samples in quicker than they are being returned. Surprisingly, I’m not the only exploration company in WA sending assays to the same lab.
As things get busier and I’m making more decisions in the field based on what I see coming up, I decide to skip more holes.

As a professional economic geologist who believes I may have found a major discovery, I have no intention of misleading the market by not reporting ‘no significant intercepts’ . I have reported minor intercepts in all holes I have drilled so far and reported them as such. My main focus is on understanding the geology so I can drill in the areas that will give the best value for shareholders. My main focus is the job at hand and not short term monetary gains … what a refreshing change for a junior WA mining company!

With regards to Thursdays and Fridays action.
Say I’m a largish holder who is looking to increase my holding and I realise the lab is overloaded with samples awaiting testing. I log in on Thursday morning and see there is only ~50,000 shares on the bid side between .58 and 48c. I could sell 50,000 of my holding to drop the price to a level where I could top up. If I’m lucky, I could even trip a few stop losses on the way down that may help strike some panic amongst other holders. I could maybe then put a big roadblock on the sell side and encourage other sellers to ‘go around me’ filling my waiting orders. In any event, I can now buy more shares for a cheaper price as some new sellers may appear at lower levels to lock in some profit or limit their loss. I’m in for the long haul because I realise the potential of this project … short term price drops are not an issue for me.

Because I’m smart, my holdings are in a company, so I only pay 30% tax at most. As I am also a creative accountant, I allocate my most expensive purchases as the ones I’ve sold and perhaps can even claim a capital gain loss! Now this is a win win situation for me. I also know why the price has dropped so am not concerned and sleep easy at night (except maybe for getting a call from the director asking why I was selling!)

Now i have no mining experience, just some time in the market. My job is far removed from mining or gold. My opinion may be worth exactly what you paid for it ...

GLTAH
Perdy