Hi guys well, March is rapidly approaching and undoubtedly so is the actual JORC resource for Ngualla. This is my sixth iteration of a resource estimate/prediction/(guess??) or whatever you want to call it and will be the last for a while. This post includes a summary review of the latest data drill hole and my final expected JORC prediction. I will make another post sometime soon about my inferred geology of the project and what I consider to be some unrealised blue sky.
*Disclaimer REMEMBER: this is my estimate only and does not reflect any official number. I’m doing this in my own time and do not have formal training in resource estimation. It’s also particularly important to note that I don’t have much geological information or the full compliment of drill hole assays which are actually assay composites of every 2m interval. Instead I’m forced to work with very broad composites which sometimes even represent the entire hole! That said we do know the composites have been calculated with a lower cut-off of 1% REO (refer to announcement foot notes) which does give me some sense of confidence over the validity of the estimates especially for those calculated with lower cut offs ie. 1.5% 2.0%. Do not make investment decisions based on this work.
For those less familar with Ngualla and my drill hole modelling the following picture provides a basic overview of the prospects. Note that the most recent announcements don't seem to reference the north east alluvial area although I have retained for consistency with previous work.
*Latest DH Results The results provided by PEK over the last month have mainly related to the Northern Zone (NZN) which appears to include significant niobium and tantalum grades along with generally lower grade total rare earths compared to the Southern Rare Earth Zone (SREZ). As noted in the various announcements the NZN has proportionally higher heavy rare earths compared to other areas. I think its a little funny PEK management have bothered to mention this, I think its probably in response to other companies gaining share price traction by releasing similar announcements about higher heavy rare earth proportions. The fact of the matter is that the NZN has lower total rare earths than the SREZ, subsequently I believe there is probably little variation in actual amounts of contained individual heavy elements (there is just less light rare earths). There are a couple of new intercepts for the SREZ and these extend the area of reasonable spatial control of assays.
Modelled Areas
*The Southern Rare Earth Zone As I’ve previously discussed in earlier posts, the SREZ is Ngualla’s most important prospect. The significant depths and superior grades encountered in this area are the backbone of Ngualla’s value. The image below shows a map view of the drill hole assay results for the SREZ. In the past I have used all the assay results to make resource models, in this version I’ve been more conservative and restricted the estimate to areas with greatest drill hole concentration (area shaded blue in the below image). Of course this reduces the potential size of the resource but I think it is probably a better reflection of a JORC compliant data distribution. Don’t worry the blue area is still 850m wide!
The image below is of the modelled drill hole assays within the area of highest drill hole concentration. The base of the model is constrained by the extent of drill holes and any volumes with greater that 1.5 kriging error variance have been cropped (basically this means we are left with a high model reliability).
The following set of images display the models for various grade cut-offs within the region of high drill hole reliability. Because of the inherent limitations to the composite assay data I am using, modelling becomes unreliable higher than the 3% cut off. I believe the 1.0-3% cut off models will turn out the be reasonably accurate predictions for the SREZ JORC calculations.
No Cut-Off
1% Cut-Off
1.5% Cut-Off
2.0% Cut-Off
2.5% Cut-Off
3.0% Cut-Off
3.5% Cut-Off
4.0% Cut-Off
*South West Alluvial Zone As there is no additional drill hole data for the South West Alluvial Zone and I haven’t reviewed the previous estimate for this area. Refer to those previous posts for details.
*Northern Zone The two fences of holes across the Northern Zone do not provide enough information to make a wide reaching estimate for the area. What we do know for sure is that the rare earth grade is generally less than the SREZ or even the SWAZ. With this in mind there is a known increased occurrence of niobium and tantalum which may be economically significant. I will be speaking about the Northern Zones REO potential in my next thread sometime later in the week.
Final JORC Prediction The data table below outlines my final prediction for the preliminary JORC estimate. Interestingly despite reducing the size of the SREZ estimate area the total resource is only reduced marginally.
*Deposit Comparison I've recompiled data on the most significant REO deposits from around the world with grades higher than about 1%.
The first graph below shows all the data I could find including the Chinese Bayan Obo, Brazilian Seis Lagos and the Mabounie deposit in Gabon (Africa). It is important to state that I don't necessairly believe the quoted numbers for Seis Lagos and Mabounie. They seem to be based on estimates using ratios of Nb to REO and as we have seen at Ngualla this doesnt always work reliably.
The second graph excludes the three larger deposits which makes the other deposits easier to compare.
Deposit size versus grade. Size of circles proportional to total contained rare earth elements. Including larger deposits.
Deposit size versus grade. Size of circles proportional to total contained rare earth elements. Excluding larger deposits.
Well guys thats it for the moment. Nothing much else to say other than it will be nice to see an actual JORC and hopefully more interest from some larger global players.
Dont forget to thumb up and spread the word!
Cheers!
PEK Price at posting:
48.5¢ Sentiment: Buy Disclosure: Held
(20min delay)