Statements required from the management team.
Bachelor Lake:- Such a statement should be to the point in respect of Bachelor – has the management team been able to negotiate a gold loan at par with the Alexis terms. Bachelor does not have issues with low grade or infrastructure permitting, however, any gold loan may have to factor in a compensation cost in relation to a potential claim regarding the 2009 mine fatalities. If the uncertainty issue is resolved then the sooner a gold loan is negotiated, the sooner the company will be in a position to make a contribution to its operating costs, rather than have to rely on PP’s t the horizon.
Barry: Careful reading of the 43-101 report makes interesting reading regarding an argument between SGS QP’s (Yann Camus & Claude Duplessis) and Metanor’s Andre Tremblay. The relevant issues are covered in the following section of the 43-101 (my underlining):-
Source: SGS Metanor 43-101 dated 4 November 2010.
16.2. Resource Model 2 – Final for public disclosure
16.2.1. Introduction and context of the second model
A more inclusive model of low grade material has been generated from the same drill hole database as model 1.
The first model (model 1) was built in an attempt to meet the geological model provided by the geologist of Metanor. Even with the recombination of zone, low grade material was still not included into the ore zones. Moreover in the new 2010 Barry project concept which calls for a high tonnage low grade with a concentrator on site. It was considered not realistic to have relatively thin zones at 45 degrees angles on five meters benches to be adequate to reflect the resource that would come out of the deposit. The model 2 approach, estimate resources within the mineralized area in an open way with important dilution, however inclusive of all assayed material around the block to estimate.
It is also important to mention important misunderstanding between SGS QP’s (Yann Camus & Claude Duplessis) and Metanor geologist (André Tremblay) about the estimation of resources with a block model versus a traditional sectional model. It was found that the biggest argument was on section 630 where SGS was accused to have less amount of ounces than Metanor’s sectional model, it turn out to be the block model being cut by the latest topography, while the sectional model was not hence not matching Metanor total gold amount on that particular section. This was also affected by the fact block estimation used composites with a search ellipsoid creating higher internal dilution than a sharp section model connecting relatively thin high grade zone.
It appears that locations where Metanor’s calculations showed significantly higher ounces in the drill campaign, were excluded by SGS, since the open cast mining extraction would require a dilution below cut off to extract. Therefore, Metanor should report whether early drilling in the present 25,000 campaign will be targeted in a way to add disproportionately to the 43-101 ounces.
Also in the SGS recommendations, advice was …..
Source: SGS Metanor 43-101 dated 4 November 2010.
18 INTERPRETATION AND CONCLUSIONS
“…….. It is critical for the success of the coming development of the Barry project to have a continuous and well established database system and geological mapping program to be integrated into a GIS…….”
Therefore, it is hoped that a Corebox project model, alluded to by Ron Perry [source: Jay Taylor interview in 2010], could be made available to investors on the web site. In this way, the spatial configuration of reserves will be apparent to non professionals.
