One of the (many) things that an investor should use in...

  1. dk7
    18 Posts.
    One of the (many) things that an investor should use in evaluating a mineral deposit is this Drill Interval Calculator.

    A company is evaluating the mineral deposit by analyzing/assaying and combining INDIVIDUAL drill intersections. If these individual intervals are not good then it is obvious that the whole deposit is not good (grades, continuity, etc).

    On the other hand it is good to know if the co serves us lies in their news release but forget to tell you that the large drill intersection includes a small rich interval .

    They might be doing a smearing of the grades i.e. they intercept a small high grade interval but expand this grade over a larger low grade interval thus creating the appearance of the large interval having better grades (showing mineable widths & grades). But that one exists only on paper.

    If you run a calculator like that you'd look at the residual interval grade. If that one is low and uneconomic then you can be sure that a smearing of grades took place.

    E.g. The company reports 22m @ 1.15 g/t Au, 37 g/t Ag, and you go wow! But in the table you'd see that this includes a 4m interval @ 6 g/t Au, 125 g/t Ag. You run the calculator and you'd get that the residual interval of 18m grades only 0.07 g/t Au, 17.44 g/t Ag. Well, that's garbage/uneconomic so they have smeared the grades to make it look like there is a chance of a cheap bulk mining operation for their mineralization. Truth is that they would eventually mine the 4 m only and by using a mining method that would cost more than the bulk mining method so you should pass on this ... opportunity.

    I simplified everything but hopefully you got the message.
 
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