While we wait for the NI43-101 conversion to Australian JORC, I thought what is important is to try and calculate approximately how large this potential increase in JORC may be from the existing drilling that was completed by Buffalo/Madison Minerals over a 10 year period.
The current Canadian 2million NI43-101 resource which was measured at $300/per ounce gold price is expected to produce a higher gold resource since the gold price IDC will be using will be between $950-1000/per ounce. As per Mr Promnitz presentation in July.
This will effectively allow the gold grade to be reduced from the current 2.4grams of gold down to 1gram of gold and the cut off to be reduced from 1gram/gold to 0.2grams of gold at the current high gold prices.
The question has been how high can this JORC increase go?
Many gold miners have or are in the process of increasing their JORC gold resources based on this same principle.
I have been able to find another small miner that has increased their gold resource using the same methodology and has explained it in a chart.
Central Asia Resources. You can view their announcement in the link below:
www.centralasia.com.au/_content/documents/338.pdf
Now if you look at the chart above, I have added the gold grade and cut off as per IndoCHine's numbers to see where our gold resource can go.
The gold grade of 2.4grams per tonne chart position(1) @ 1gram cut off falls, due to the higher gold price where previously uneconomic gold is not economically profitable to be mined. This moves to chart position (2).
Where the gold grade falls to 1gram/tonne and the gold cut off grade falls to 0.2grams/tonne.
Now look at the massive increase in the total tonnage of dirt. This alone would allow the Gold JORC Resource to increase significantly in size.
It is all about elasticities!
The gold grade only falls from 2.4grams to 1grams or 58% decrease in the grade of gold, whereas the total tonnage increases from 1tonne to 4 tonnes a 300% increase!
:)
Cheers Nectar
IDC Price at posting:
16.3¢ Sentiment: LT Buy Disclosure: Held
