Hi PuntersContinuity of resource basically refers to the...

Hi Punters

Continuity of resource basically refers to the consistency of the average grade through the defined resource.The defined resource is generally the size and shape of the ore body as occurs when one applies a minimum grade.

So for Perkoa You have a Proved and Probable JORC resource statement of

TOTAL MEASURED AND INDICATED MINERAL RESOURCE OF 6.72M tonnes GRADING 16.4% zinc and 35.4 grams per tonne SILVER (at 5% cut-off grade).Note it has been decided that the silver is not economic to extract from the concentarte,or this was the case the last I heard if memory serves.

Ive continually banged on about just how high this grade is Punters and to give you some kind of indication just how rich and continuous this ore body is have a look at some of the grades of the BEST zinc mines around the world.

I think you will find many of their AVERAGE grades arnt even as high as Perkoa's CUT OFF grade which really gives one a strong indication of just how good this ore body is.Admitedly these other projects have much larger quantities in their resource which is what makes then feasible.

And this is what gives the project its underlying strength in that for every tonne of ore mined you are pulling out arond 50-100% the ore than many other mines in DILUTED HEAD GRADE,not just the highest grade.

Now quite rightly Tastarga has pointed out previously we only have grades that are predominantly in the "indicated" category.

This pdf gives an excellent definition of just what rules the JORC code applies to a resource

http://www.jorc.org/pdf/inferred_resources_exposure_draft.pdf

Which states the relative confidence levels from lowest to highest are

1)Inferred

2)Indicated

3)Measured

These are generally defined via drill spacings as applied for the style and type of deposit that is being defined.

Now Perkoas drilling data,much of which was done by previous companies,can be categorised in the "indicated",or second category due to the predominantly 50m X 50m spacing.

Aim however did a second round of drilling for their BFS which:

*confirmed the grades of the previous data by similar spacing and "twinning",or copying of several of the previous holes

BUT also

*they did a small zone of 25m X 25m drilling to give a zone in the MEASURED category,the highest category.

I have previously referred to Tastargas comments(a while ago now) re the fact that the resource is predominantly in the "indicated" category,the importance of which reduces the confidence with which the resource should be treated,and fair enough in terms of the BASE honesty of the data.

BUT Snowdens in their treatment of the data have stated in their BFS definitions that it is "reasonable" to extrapolate this "measured" category through the majority of the resource due to the high grade VMS style deposit.This is a common thing to do with this style of deposit.

All this info is contained in this PERKOA ZINC RESOURCE STATEMENT

http://www.aimresources.com.au/pdfs/asx_ann_08sep_perkoa.pdf

Whatsmore due to this extrapolation technique Aim have been able to substantially reduce the costs apportioned in application to the BFS/second round of drilling which effectively reduces the debt incurred on exploration of the deposit,sometimes a number which can blow out disspropportionally with the OCF that will come from the project.

This info should allow some kind of insight into how one must research the drilling data and just how the analysis of that data is carried out by the consultants.Note that much of this nanlysis is done by sophisticated computer modelling(appropriate for the type of resource) in this day and age.

Off to watch the US open now Punters after a squiz at Wilfs post.

d.