resource estimation zones 1 & 2

Resource Estimation Zones 1 & 2

Summary

Zone 1 - based on drill data to 27 Mar 09* - 107.6 Mlb
Zone 1 - based on drill data to 27 Apr 09 - 117.9 Mlb
Zone 1 - based on drill data to 28 May 09 - 127.8 Mlb
Zone 2 - based on drill data to 28 May 09 - 103.6 Mlb**

*Drill data to 27 Mar 09 is very close to the actual data used to determine the initial Zone 1 resource estimate. This was reported by EXT as 108.3 Mlb at a cutoff of 100 ppm (NI 43-101 and JORC compliant).

**Due to gaps in data, this estimate is almost certainly on the low side.

Method

Resource estimation was carried out using a program called ILWIS (v 3.6). Drill data was interpolated using a moving average operation. The moving average operation is a point interpolation which requires a point map as input and returns a raster map as output. The values for the output pixels are the weighted averages of input point values. Weighted averaging is the calculation of the sum of the products of weights and point values, divided by the sum of weights.

The weight factors for the input points are calculated by a user-specified weight function. There are two methods: inverse distance and linear decrease. Both methods ensure that points which are close to an output pixel obtain large weights and that points which are farther away from an output pixel obtain small weights. Values of points which are close to an output pixel are thus of greater importance to output pixel value than the values of points which are farther away.

By specifying a limiting distance, you can determine the distance from any output pixel that points will be taken into account for the calculation a value for that output pixel; for each output pixel, only the values of the points which fall within the limiting distance to this output pixel will be used. Values of points that are farther away from an output pixel than the specified limiting distance, obtain weight zero by the weight calculation, and these values will thus not be used in the output pixel value calculation. This speeds up the calculation and prevents artifacts.

Several methods were trialled using the 27 Apr 09 data set for Zone 1 (see next section for the reason why this data set was chosen). This included both weight factor methods (inverse and linear decrease), different weight factors (0.5, 1 and 2), different limiting distances (up to 300m), and different pixel sizes (1x1 m and 5 x 5 m). Other interpolation methods were trialled, including Moving Surface (Plane), Moving Surface (2nd degree linear) and an attempt at Ordinary Kriging.

As a result of all these trials, the best method was determined to be Moving Average with a linear decrease (factor 1) and a limiting distance of 150 m, with a pixel size of 5 x 5 m (smaller pixel sizes made little difference and greatly increased processing time).

Ordinary Kriging (OK) is a more sophisticated form of averaging often used for resource estimation by professional geologists. Instead of just using a linear or a inverse decrease for the weight function, more complex weight functions can be used. These functions are determined by statistical analysis of the data set. This analysis requires rather sophisticated interpretation of the data set, and relies on the (geological) experience of the user. The simpler nature of my techniques did not seem to justify the use of OK, and I am not nearly qualified enough to make appropriate interpretations of the data set when determining the weight functions.

I considered it safer to use a simpler interpolation method that did not rely on interpretation. This also was better suited to the areas of the zones where less data was available.

After interpolation was carried out, the resulting raster map was converted to a point map. Pixels containing very small amounts (less than 1 lb of uranium per square metre) were discarded. These were mostly pixels on the outer edge of the resource and were probably an effect of the interpolation software than an actual picture of the resource. The pixels were then totalled to arrive at a resource estimate.


Data Set

All drill data released by EXT was used in the resource estimate. Corrections were made to radiometric data in accordance with the formula given in the NI 43-101 report paragraph 17.3.1. The specific gravity (SG) is the same as that assumed by the NI 43-101 report. Corrections were made to account for drill angle (usually 60 degrees for most data).

An attempt was made to recreate the data set used when the initial resource was released in the NI 43-101 report. If I had such a data set, I could compare my own method of estimation with the known value of the JORC estimate of 108.3 Mlb. The NI 43-101 report made an estimate based upon 11 diamond and 174 RC drill holes (paragraph 17). Using drill data to 27 Mar 09, 154 drill holes are found of which 12 are diamond. It's not quite right but is the closest match.

The diagram below is a map from the NI report (page 33) showing all the drill holes used to determine the resource. Overlaid on top of this is a set of diamond shapes which show all the drill data released from EXT up to 27 Mar 09. The diagram shows that there is a close correlation between the 27 Mar 09 data set and the NI report.




Resource Estimation

The resource estimate for Zone 1 using data up to 27 Mar 09 came in at 107.6 Mlb, remarkably close to the NI 43-101 report of 108.3 Mlb. This validates the method described above to estimate the resource.

The resource estimate for Zone 1 increased to 117.9 Mlb based on further drill data released to 27 Apr 09, and increased again to 127.8 Mlb using data released to 28 May 09. This is consistent with the drill hole data released, which shows deeper and higher grade results as more drilling is carried out. This also consistent with some broker estimates that have come out, presumably using similar methods to estimate the resource size.

The Zone 2 estimate based on drill data to 28 May 09 is 103.6 Mlb. This is probably subject to further revision upwards as there are still many holes in Zone 2 that need to be filled in by drilling. The method uses a limiting distance of 150 m, and some drill holes are in lines 400m apart. The interpolation method assumes zero for areas outside of 150 m from any data point, which is probably (certainly?) incorrect. So this initial estimate for Zone 2 is almost certainly on the low side, and may be significantly off.