Golden Hope Mines

Mnsr. Glorieux did a good job of describing the significance of yesterday's news release.

I'd like to focus on a few passages from it.

"Gold occurs in quartz-filled breccias in diorite. The breccias vary in width from several metres to approximately 50 metres, some have been traced several hundred metres along strike and intersected by diamond drilling to 300m below surface. Mineralized breccias have been intersected by diamond drilling in an area 600 metres wide and about 1000 metres long. The mineralization remains open along strike to the northeast and to the southwest. The width of the belt favourable for development of additional parallel structures is not yet established.

Diamond drill cores give good geological data, but their small size (approximately 5kg/metre) severely limits their ability to provide robust grade estimators for the breccia zones. Assays of diamond drill cores from the Bellechasse-Timmins zones tend to underestimate the true gold concentration. This is illustrated by comparison of assays of drill cores taken a short distance below surface with assays of bulk samples blasted from immediately overlying trenches. Consequently, for exploration purposes, quartz-bearing zones that show values greater than approximately 100ppb are considered mineralized and warrant further attention....

Visible gold has been observed in five drill holes, a great encouragement in a deposit having only about 15% to 20% of the contained gold present in grains large enough to be seen with the naked eye."

When I was at the project a week or so ago, I'd say fully half of what we talked about, Jim Tilslely and I, was the underestimation of the true gold grade via the sampling provided by diamond drilling. We all want to know the true grade so that a 43-101 compliant resource estimate can be produced. Grade (grams/tonne) times tonnage gives you grams of gold in the ground, which we convert to troy ounces (31.10348 grams per troy ounce). The tonnage part is pretty straight forward. One cubic metre of the brecciated quartz/diorite has a mass of about 2.8 tonnes. You figure out the volume, and the tonnage is readily found. Not so with the grade.

The statistics are somewhat boring, perhaps even arcane, but an accurate grade estimate relies on this assumption: "An adequate gold sample is one large enough to include an expected average of 10 signficant concentrations of gold and that, properly processed, provides robust grade estimators." The problem is getting a large enough sample to meet that statistical assumption. The quartz is chaotically distributed in the diorite; sometimes there's quite a bit, and right beside that, not so much. And the gold is chaotically distributed in the quartz. With no more than 20% of the gold particles being large enough to be seen with the naked eye, we can comfortably say that most of the gold is in microscopic particles. We only know it's there after the assays come back. But what are the chances that you got one or more gold particles in the tiny assay sample that went into the furnace? It's not very likely at all, in fact, even though there might be particles of gold present in the piece of core being sampled. But the core is not sufficiently large to adequately sample the breccia zone it was taken from. A metre of core gives you about 5 kg of this particular rock. But going back to the quotation earlier in this paragraph, Tilsley estimates the sample size required to accurately estimate the true grade of the gold ranges from 476 kg for the highest quartz/gold-bearing structures, to about 6900 kg for the least. (Crude calculations suggest that you'd need drill core about 20" across, and you'd have to pulp all of it, to get an adequate sample of the best zones....the lower grades would require samples of nearly 3 cubic metres, just to accurately establish the grade.) Because the gold is erratic, you're more likely to find where it isn't, than where it is, if your sample is too small. You get far too many zero assays (false negatives, due to sampling error), and every zero has to be averaged in with the ones returning gold. The true grade is underestimated because of the zeroes coming back.

If you have ounce/tonne gold, the fire assay sample would have contained 1 mg (1/1000 of a gram) of gold. 2 gram/tonne gold would average .064 mg per assay. I'm not even sure you could see .064 mg of gold with the naked eye.

Sorry for the brain barrage. A Barrick or a Newmont is going to know all about the nugget effect, the underestimate of grade in a particle gold deposit. But if you put out a 43-101 resource estimate at 2 grams/tonne, you'll be labelled with that forevermore.

So, instead of grade, tonnage is the way to drive the SP. You put it out there that your grade is underestimated, and you show them how much volume you've got. At a cut-off grade of 0.5 grams/tonne (from the bulk sampling programs), and using a density of 2.8 tonnes/cubic metre, Timmins 1 alone gives 11,326 tonnes per vertical metre. At an average bulk sample grade of 2.99 grams/tonne, you get 1089 ounces of gold per metre. But we know that's lower than the true amount. So why bother? (Why'd I bother? <grin>)

So, we push the tonnage angle. Length times width times depth. It's getting longer. It's getting wider. Deeper, not so much. But deep enough.

One of the plans for this summer is to attempt to create a sub-surface map of the diorite. Kind of like a topographic map, showing the hills and valleys in the diorite beneath the surface, using drill core intercepts and mapping software. Hopefully, that will produce an image that not only guides further exploration work, but it also might reveal whether or not these fingers of diorite merge at depth. That would be very good news.

Lar