1% copper in the porphyry would be great if it came to surface, but it doesn't; it starts at 380m vertical depth in this hole.
Given that, an underground mining grade might be necessary to make it economic.
Having a narrow overlying gold-mineralised breccia pipe that extends down to it from surface does not really help much.
If you look at the prospect on Google Earth, the breccia pipe 8 on which Hole-1 is located is about 50m across, and sits on the slope of a steep mountainside.
Pipe 8 itself is too small to economically mine as an open pit, and much too small and low grade to make any money by mining it underground on the way down to the underlying porphyry. It probably contains about 6,000 tons of ore/400oz of gold equivalent per vertical metre, at grades that are well below the economic cutoff for underground mining.
For the porphyry to be of economic interest it must therefore have either a) a grade that justifies the cost of underground mining, ie. plus 5 g/t gold equivalent, or b) such a huge tonnage at lower grade that you can justify the cost of drilling and blasting off the 380 metres thickness of overlying rock and similarly cutting back the overhanging mountainside to the immediate east..
The company has noted that, laterally, there is an adjacent valley that has cut down to within 100m vertical depth to the top of the porphyry. But we do not know whether this valley actually overlies the lateral extensions of the porphyry and could be used to access it in an open pit. Besides which, it is a steep mountain valley that drains a considerable area, and looks as though it carries a large amount of seasonal runoff (Mining 1.01: Never start your mine in the bottom of a river valley, not unless you wish to drown your workforce and equipment at a later date, which I have seen done.)
In the opposite direction from the valley, upslope towards breccia pipes 10 and 11, the ground rises steeply. If the porphyry extends laterally in this direction (as is hypothesised to, and very likely does), the stripping ratio increases rapidly: you would have to remove a large, rugged mountain spur to get a it.
For my part then, I would like to see a grade of 2-3% copper equivalent (or 5 g/t gold equivalent) over large intervals in the Hole-1 porphyry interval that is form 380m to 600m (220m in total).
I'd be very interested to hear any other mining contributers' thoughts on these factors, eg. CrimsonCarp, if you have a moment.
For any conspiracy theorists or paranoiacs: I am not being intentionally negative here or trying to talk the stock down. I am simply examining the physical reality of what has been found so far, in terms of the fundamental mining considerations: tons, grade, stripping ratio, engineering feasibility, etc., and at 380m depth you certainly need higher grades, even if you do have huge tonnage. Bear in mind that this is not flat old Western Australia. There is half a mountain sitting on top of this one.
(This discussion is simply for interest's sake. I am not a financial adviser and this is not inteded as any sort of financial advice).
ICG Price at posting:
10.0¢ Sentiment: None Disclosure: Held
