The discussion over the validity of our resources has been going on for four years.
I have watched this chat room discussion with some interest, including BH!’s very incomplete “investigation” and have been motivated to reply by your comment that JORC Inferred Resources may or may not exist.
This is simply an incorrect statement. The JORC Code is very specific – unless there are reasonable prospects for economic extraction, mineralisation CANNOT be classified as a JORC resource.
I extract below from paragraphs 19 and 20 of the Code.
“19. A ‘Mineral Resource’ is a concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Portions of a deposit that do not have reasonable prospects for eventual economic extraction must not be included in a Mineral Resource. If the judgement as to ‘eventual economic extraction’ relies on untested practices or assumptions, this is a material matter which must be disclosed in a public report.
The term ‘reasonable prospects for eventual economic extraction’ implies a judgement (albeit preliminary) by the Competent Person in respect of the technical and economic factors likely to influence the prospect of economic extraction, including the approximate mining parameters. In other words, a Mineral Resource is not an inventory of all mineralisation drilled or sampled, regardless of cut-off grade, likely mining dimensions, location or continuity. It is a realistic inventory of mineralisation which, under assumed and justifiable technical and economic conditions, might, in whole or in part, become economically extractable.”
And in Paragraph 20:
“20. An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource. The Inferred category is intended to cover situations where a mineral concentration or occurrence has been identified and limited measurements and sampling completed, but where the data are insufficient to allow the geological and/or grade continuity to be confidently interpreted. Commonly, it would be reasonable to expect that the majority of Inferred Mineral Resources would upgrade to Indicated Mineral Resources with continued exploration. However, due to the uncertainty of Inferred Mineral Resources, it should not be assumed that such upgrading will always occur.
Confidence in the estimate of Inferred Mineral Resources is usually not sufficient to allow the results of the application of technical and economic parameters to be used for detailed planning. For this reason, there is no direct link from an Inferred Resource to any category of Ore Reserves (see Figure 1). Caution should be exercised if this category is considered in technical and economic studies.”
Citigold went to considerable lengths to publish two very extensive reports, one on the Inferred Mineral Resources (100 pages), and one (64 pages) on the Probable Ore Reserves. I don’t know of any other company which has given as much detail as we have in our resource and reserve reporting. The reports have been on our web site under "Technical Reports" for four years.
Please read them, in full.
Resource and reserve estimation is not an exact science (which is why the Code emphasizes “estimation” and not “calculation”) and is subject to personal experience. What is applicable in one type of gold deposit may not necessarily be applicable to Charters Towers.
The methodology was reviewed by four mining professionals from Snowdens and Coffey Mining, as reported in our September 2008 Quarterly Activities Report. They found the methodology to be reasonable.
As the Competent Person who signs off the public reports, I would be happy to answer any questions you may have. My direct line is Brisbane 07 3834 0004
I am an employee of Citigold, and a shareholder.
Chris Towsey Chief Operating Officer Citigold Corporation Limited
CTO Price at posting:
17.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)