re dnl vs aum

This copied from TP4........Process...

The copper was actually a little higher grade than I was anticipating at 1.6%, however the gold was a little lower than I expected.

Given the relatively marginal value of the gold per tonne anyway, the increase in copper grade only improves some of my earlier figures.

As it stands, forgetting the Co we still have an in-ground copper/gold value per tonne approaching AUD$185 at current Cu prices.

This is robust in anyone’s language!

To get things in perspective, today’s “disappointing” (lol) downgrade actually confirms an in-ground resource value of…25,000,000 x AUD$185/t =

AUD$6,625,000,000 ($6.62 billion)

Not a bad consolation prize if you ask me?

lol...and not everyone missed the three additional holes by the way...and we have at least 6 more similar results due any day!

Anyway, now that we have more concrete figures, I thought I might see what I could come up with as a conservative high side value model?

I find the following quote of interest and a possible signal to the market...

"The company did not stop drilling during the ASX halt period."

Up to the 9th July, the company had drilled 29 RC holes at Las Minerale (DORC 78-106)...assuming 3 holes per day (quote from McCrae), we can assume that since then, a further 24 holes may have been drilled.

At three holes per 50m grid line, we can assume they have already extended the "target resource" up to an additional 400m since hole DORC 106...(two shallow, one deep hole per grid line)

lol...seems the messages keep coming...I guess you just have to look for them!

Now...given we have the assay results for at least 6 holes due (DORC 101-106)...all of which are described as "intersecting 60-100m zones of visible sulphide mineralisation", one can possibly assume we already have an additional 100m to add the the current JORC resource of 25,000,000 tonnes @ 2.04% Cu eq.

That’s an additional 4,100,000 tonnes in just 6 holes! (AUD$758m value)

Now add the 24 holes possibly drilled since the 9th...and assuming similar results, we have yet another 400m of strike...or 16,650,000 tonnes @ 2.04% Cu. (AUD$3b value)

So...all up today, we could already be looking at an upgrade of the JORC inferred resource to 25m + 4m + 16.6m = 45,000,000 tonnes @ 2.04% Cu eq.

New in ground value…45,000,000 tonnes x AUD$185 = AUD$8,325,000,000

So…lets look a little further down the track?

In as little as 4 weeks, AUM will have a deep drilling diamond rig on site, with which they intend to deep drill the double oxide resource, but I suspect they may also decide to drill a much deeper rear hole at the back of each of the Las Minerale grid lines.

Back to this in a minute…

Once the Las Minerale strike has been extended to at least 1km, they intend to return to the rear hole in each 3 hole grid line for a much deeper (350-400m) drill...each single drill hole has the capacity to significantly extend the zone of mineralisation at depth...with 1km of strike, just 20 holes could potentially increase existing JORC resources by 150% (ie from 250-375m depth)

Result = 45,000,000 tonnes x 150% = 67,500,000 tonnes 2.04% Cu eq. (AUD$12.5b value)

Now for the interesting bit...back the diamond holes.

Assuming they keep hitting mineralisation with the above mention deeper RC drilling, I suspect they will decide to “rear-guard” these hole further with yet another step-out hole, but this time using an ultra-deep diamond rig..but perhaps only every second grid?

The significance here is that once again assuming 1km of strike, just 10 holes (every second grid)...and of course, assuming similar results to those already obtained, AUM could well double the existing resource.

Again...result = 67,500,000 tonnes x 2 = 135,000,000 tonnes 2.04% Cu eq.

This roughly equates to...1,350m (strike) x 600m (depth) x 45m (width) x 3.7 (sg) = 135,000,000 tonnes

Certainly not beyond the realms of probabilities given what AUM have turned up so far?

Now before people complain about a lack of data...yes I have made certain assumptions, such as grade and a strike continuation about 350m beyond that currently tested....all of which however, seem like more than reasonable assumptions given results to date.

Perhaps the biggest unknown however is the depth of the mineralisation...but as McCrae has suggested, this sort of shear zone geology typically hosts a continuation of mineralisation at depth.

Pretty good so far…and we haven't even covered the Double Oxide resource yet, which in itself is about to be deep drilled, which, as is the case with Las Minerale, holds the potential to result in a near doubling of the existing JORC resource outline.

Lets not forget the Rocklands group resource to add to any final totals.

Adding these two to the potential Las Minerale resource, and we are seriously approaching a 150,000,000 tonne 2.04% Cu eq. resource

Applying the earlier mentioned in-situ value per tonne (AUD$185) for the Cu alone, we get the following in ground value… 150,000,000 x $185 =

27,750,000,000…yes almost 28 billion!

lol...but that's not all...you also get a set of steak knives in the form of repeat structures across the shear zone.

In CRA’s original report, they describe the shear zone as traceable over 2,000m of strike, with at least 5 subordinate shears over a width of 500m…they go on to state the shears appear to have a combined length of 6,000m.

Now…according to AUM, the shear zone has been delineated up to 1.4km in width…almost 3 times that suggested by CRA.

Simple extrapolation suggests a possible combined shear length now of over 14km!

Perhaps this is the real blue sky for this project?

Anyway…I reckon its a no-brainer…I also view forced downgrade from 50m tonnes to 25m tonnes inferred resource due to what is effectively a “technicality” as nothing more than corporate semantics.

The ASX was correct by the letter of the law…but all they managed to do was deliver AUM into the hands of the corporate big-weights and out of the hands of many “battlers”

Anyway…perhaps time to move on from here, what ever our personal opinions?

As I read it, we have effectively been given the inside info on this stock…no less than from the director himself, who has all but told us what can be…and what more than likely is ahead of us!

Quote…”In addition to the inferred resource at Las Minerale, an exploration target at Las Minerale between 40 and 50 million tonnes at approximately the same grade is continuing to be tested…”

Lol…straight from the horses mouth…add 40-50 million tonnes to the current 25 million tonne inferred resource and we get up to 75,000,000 tonnes @ 2.04% Cu eq. (AUD$13.9b)…that’s just Las Minerale!

END......