idc annual report excellent work!, page-9

Hey Vlad

Yeah loved that company. Fingers crossed we get a decent TO offer.

The importance of building a gold resource of 1.9 million ounces using such a low $300 per ounce gold price is very significant.

When an explorer drills a resource it finds gold throughout the drilling area. What is important is whether the richness of the gold found or the amount of gold for every tonne of dirt is profitable to dig up, crush and process to pour into bullion.

In any exploration program, what is critical is finding enough of the mineral in a high enough grade to make it economically viable to mine. You could find 10 billion tonnes of iron ore at 8% iron, but the cost to mine, crush, extract and process it would exceed $170 spot price of iron ore. As this this ore is not viable to be mined.

As such, when the price of gold is $300 per ounce, you need a high grade gold vein or richness in the dirt to make it viable to dig up the dirt, crush it, truck it to a gold processing plant to be screened processed and poured into bullion.

But as the picture below shows, the higher the price of gold, the more of the dirt with lower grades of gold that wouldnt have been economically viable to dig more of the dirt to process the gold.

The picture below is taken from a gold research paper. Page 702. Here is the link.

http://adl.brs.gov.au/data/warehouse/pe_abare99000569/PR11747.pdf

What is shows is the following:

If you can picture the brown line is the high grade 1gram of gold per tonne gold vein. At $300 per ounce gold price, this is the only part of the dirt that is profitable to be mined.

Now if the gold price rises to $800 per ounce, more dirt, hence more gold can be profitably mined, the orange highlighted dirt.

Lastly if the price of gold hits $1650 per ounce, the a lot more dirt can be mined crushed and processed into more bullion! The larger yellow area.

In effect there was gold throughout the dirt in that area in the pic, but only when the price of gold rose to $1650 per ounce was it worth it for the gold company to dig it all up and process it. This means a significant increase in the amount of gold resource!

:)

I hope that helps Vlad.

Cheers Nectar