# How to understand mining reports?



## ns944jp (24 January 2008)

Hi all! :bonkoes anyone know any good book or website to learn how to undersstand mining report? Recenlty lost profit by not knowing how to read it... Thank you!


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## ROE (24 January 2008)

*Re: How to understand mining report?*



ns944jp said:


> Hi all! :bonkoes anyone know any good book or website to learn how to undersstand mining report? Recenlty lost profit by not knowing how to read it... Thank you!




All report are the same, the content maybe different because different business use different term and association for cost. That where you got to understand the business to understand the report.

No point wondering through the report if you don't understand how the business make and spend money.

I take a stab in the dark because I don't own any mining stocks. 

But capital expenditure is something to look at because mining is capital intensive business. Free cash flow from operation (ie money collect selling from the resource minus what money required to get that resource out of the ground and sell it)

Exploration cost etc...

There are lot of books on how to read a financial report, maybe read one of those and adapt it to your mining report.


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## anon (24 January 2008)

ns944jp said:


> Hi all! :bonkoes anyone know any good book or website to learn how to undersstand mining report? Recenlty lost profit by not knowing how to read it... Thank you!





I did a google search for  "mining reports"  and got a good result. Here's one -

"Reading mining company reports - Australian Securities Exchange".

You will probably get a better selection if you search for  "mining reports australia".

anon


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## doctorj (24 January 2008)

I'd say it's a tough ask to look for one book as it can take in a lot of different disciplines (geology, engineering, accounting, metallurgy etc).  It's the kind of thing you understand because you're in the industry or if you've been around long enough to ask enough questions to understand it a little at a time.

There are a lot of Geos, snr mgrs of mining companies and experienced resource stock junkies here at ASF that can help you.


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## bvbfan (24 January 2008)

Two good books

Wayne Lonergan - The Valuation of Mining Assets (I have not read but hear good things)

Other is the

Victor Rudenno - The Mining Valuation Handbook which is pretty good but I have the old edition so the new one might be more up to date.

The first one is on google books so have a read there to see if you like the style.

2nd one might be but not looked


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## doctorj (24 January 2008)

bvbfan said:


> Victor Rudenno - The Mining Valuation Handbook



A big +1 to this.  It's lived on my desk for months and really changed the way I look at mining companies. It's probably more appropriate to assessing an explorer getting close to a development decision, but its got something in it for companies at all stages.

*plug*it's also available in the ASF bookstore


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## ns944jp (24 January 2008)

Thank you all !!  I'll check them out!:iagree:


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## skip9 (11 February 2010)

*Understanding Mining Reports*

Guys, Would like to understand and learn a bit more about reports that are put out by mining companies such as there progress updates etc.

Obviously if i can understand what is being said in updates and reports then it would go along way to understand and get myself in good positions for possible buys.

Does anybody have any good sheets or know of any websites to help explain?
Thanks.


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## Ozymandias (11 February 2010)

*Re: Understanding Mining Reports*

Ditto for oil and gas companies. I've found a few glossaries kicking around, but nothing with depth.


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## skip9 (11 February 2010)

Not exactly info on how to read reports but came across this article that i thought would be worth sharing..

http://www.globalspeculator.com.au/documents/MiningcompanyFundamentals101.pdf


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## doctorj (11 February 2010)

Perhaps the best way to do it is to paste some passages from releases your unsure of in this thread and people can discuss them.


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## skip9 (12 February 2010)

Wise Idea Doc.

This is one example from a Otto Energy [ASX:OEL] Drilling update.

"...advises that the Kumluk‐1 exploration well reached a total depth of 550 metres (m). *After logging of this well, net pay of a total of 9m over three intervals was interpreted*. These results are in line with pre‐drill estimates. This continues the 100% exploration drill success that Otto has experienced in our Edirne licence area."

I am understanding that there Kumluk-1 Project has been tested to 550m in depth and there results were in accordance with there expectations. Although i do not understand the bolded writing.

Also this is from a Beacon Minerals Report [ASX:BCN].

"...Significant results from the assays received include:

 14m @ 45.32 g/t Au 
 6m@ 6.16g/t Au 
 2m@ 5.39g/t Au

This high grade intercept of 14m @ 45.32 g/t Au in BRC 135 appears to be an extension of the mineralisation intersected from BRC116, which was drilled in the previous campaign to the west of the Halleys East zone, and returned a result of 12m @ 11.23 g/t Au."

Mainly what i don't understand is all the figures in regards to testing results.


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## Bushman (12 February 2010)

"...Significant results from the assays received include:

 14m @ 45.32 g/t Au 
 6m@ 6.16g/t Au 
 2m@ 5.39g/t Au

This high grade intercept of 14m @ 45.32 g/t Au in BRC 135 appears to be an extension of the mineralisation intersected from BRC116, which was drilled in the previous campaign to the west of the Halleys East zone, and returned a result of 12m @ 11.23 g/t Au."


I'll give the goldie a go but with the disclaimer that I am not a geologist or mining engineer. H/e I have read many a report over the year's and have a basic understanding. 

In terms of the results, say the '14m @ 45.32 g/t Au', the 14m is the depth at which the mineralistion was found and the 45.32 g/t shows the grade of the mineralisation (in this case there are 45.32 grams of gold per tonne of ore). 

Things to look for: 
1. Depth, with at surface being the cheapest to mine and deep underground being the most expensive to mine; 
2. Grade, with high grade obviously being better then low grade. However, if you have a low grade deposit that is extensive and close to the surface, this could be more economic than a high grade deposit deep underground in terms of mining cost. 
3. Also one drill hit does not make an economic deposit. Thus you need your deposit to be spread over a larger zone. Look for terms like 'open to a particular side' or 'open at depth' as this suggests the deposit could be enlarged via further drilling. 

The other thing to be cognisant of is the mining process - however I have no particular expertise in this and tend to stick to explorers. 

This is a start. There will be much more technically competent posters on here.


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## happytown (12 February 2010)

skip

the BCN results come from the recent qtrly rep which also contains a more detailed break-down of the drill results in attachment 3 (page 7)

14m @ 45.32 g/t Au, means

a 14m intersection of Au mineralisation in the hole with an average Au mineralisation of 45.32 g/t Au per metre, 

if you look at page 7 you will see the intersection begins @ 86m downhole, so the intersection is from 86m to 100m downhole and each metre contains an average of 45.32 g/t Au (as assayed in the lab)

note the 45.32 g/t Au is averaged, the 14m intersection includes 6m @ 102.66 g/t Au


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## skip9 (12 February 2010)

Bushman & Happytown, Thanks both for the reply, i am coming to get around to understanding it. Its all in time i assume. 

In terms of "45.32 g/t Au", what would be considered a significant amount and what would be about average of g per tonne?


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## Bushman (12 February 2010)

skip9 said:


> Bushman & Happytown, Thanks both for the reply, i am coming to get around to understanding it. Its all in time i assume.
> 
> In terms of "45.32 g/t Au", what would be considered a significant amount and what would be about average of g per tonne?




45.32 g/t is a bonzer hit. Most will be in the 1 to 10 g/t mark.


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## derty (12 February 2010)

Have a wander through this thread, it may help clear up a few things for you.
https://www.aussiestockforums.com/forums/showthread.php?t=9561


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## doctorj (13 February 2010)

Just a note of caution - please try to keep this about the announcement and try to avoid anything that could be interpretted as a buy/sell recommendation.


skip9 said:


> This is one example from a Otto Energy [ASX:OEL] Drilling update.
> "...advises that the Kumluk‐1 exploration well reached a total depth of 550 metres (m). After logging of this well, net pay of a total of 9m over three intervals was interpreted. These results are in line with pre‐drill estimates. This continues the 100% exploration drill success that Otto has experienced in our Edirne licence area."
> I am understanding that there Kumluk-1 Project has been tested to 550m in depth and there results were in accordance with there expectations. Although i do not understand the bolded writing.



Logging is the process they use to evaluate the well. There are a number of methods that range from looking at the junk that comes out of the well testing the electrical properties of the rock on the side of the well bore. What it means is that they identified a total of 9 metres of the well bore that intersected what they believe to be producable hydrocarbons and those 9m occurred in 3 distinct intersections.


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## vimuttirasa (14 April 2010)

Bushman said:


> 45.32 g/t is a bonzer hit. Most will be in the 1 to 10 g/t mark.




Hi Bushman or other qualified mining report reader - I just read a Tanami Gold (ASX:TAN) quarterly report FOR THE PERIOD ENDING
31 DECEMBER 2009, page 4, under "exploration": "South Zone is comprised of up to three high grade narrow quartz veins that commonly show substantial visible gold in drill core and mine exposures. *Exceptionally high grade intervals have been returned from diamond drilling including 0.3 metres grading 2,379g/t from CYUG1, 0.9 metres grading 1,517g/t from CYUG23, 0.4m grading 243g/t from CYUG13, 1.3 metres grading 209g/t from CYUG70 and 0.3m grading 87.9g/t from CYUG80* [see Figure 2]."


these figures seem damn impressive - can you explain why the stock hasn't gone through the roof - does this report also imply that these "gradings" are more expensive to mine? 

thanks


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## So_Cynical (14 April 2010)

vimuttirasa said:


> Hi Bushman or other qualified mining report reader - I just read a Tanami Gold (ASX:TAN) quarterly report FOR THE PERIOD ENDING
> 31 DECEMBER 2009, page 4, under "exploration": "South Zone is comprised of up to three high grade narrow quartz veins that commonly show substantial visible gold in drill core and mine exposures. *Exceptionally high grade intervals have been returned from diamond drilling including 0.3 metres grading 2,379g/t from CYUG1, 0.9 metres grading 1,517g/t from CYUG23, 0.4m grading 243g/t from CYUG13, 1.3 metres grading 209g/t from CYUG70 and 0.3m grading 87.9g/t from CYUG80* [see Figure 2]."
> 
> 
> ...




Tanami Gold's ASX code is TAM and this is the quarterly your referring to...and while the grade (2,379g/t) is super impressive its the interval that's not so impressive (0.3 metres) this is the sort of results you often get in "high grade narrow quartz veins" its expensive following these veins underground...as you can see from the same quarterly 

Quote "11,783 ounces of gold produced at a cash cost of *A$746 per ounce*"

http://www.tanami.com.au/images/2009_TAM December Quarterly Report.pdf


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## Wysiwyg (14 April 2010)

So_Cynical said:


> Tanami Gold's ASX code is TAM and this is the quarterly your referring to...and while the grade (2,379g/t) is super impressive its the interval that's not so impressive (0.3 metres) this is the sort of results you often get in "high grade narrow quartz veins" its expensive following these veins underground...as you can see from the same quarterly




Excellent explanation. 

Would this mean the diamond drill core contained 420.34 grams in a 30 cm length of core sample? 

Using 1000 g per kilogram and 1000 kg per tonne. = 1,000,000 g / 2379 g = 420 g.


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## Tatts (14 April 2010)

sorry this is a little off topic but still kinda relevent. What price is the gold sold at (by the miner). Is it like iron ore in that they will have a set price contract for a 3 month or yearly period? Or is it more short term than that?


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## vimuttirasa (14 April 2010)

Thanks for the help with interpreting this Tanami data.  all the best for your trading.


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## lazyfish (16 April 2010)

Wysiwyg said:


> Excellent explanation.
> 
> Would this mean the diamond drill core contained 420.34 grams in a 30 cm length of core sample?
> 
> Using 1000 g per kilogram and 1000 kg per tonne. = 1,000,000 g / 2379 g = 420 g.




No, a 30cm drill core is only about 1-2 kg at most. To have 420g in a 2kg core you need ~20% gold which is 200,000g/t.


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## Southern X (23 September 2010)

Stumbled across this thread a little while ago. In the interim I read about this book: "Hard Rock Miner's Handbook," by Jack de la Verne. It's downloadable, it's free, and it's good.

Looking forward to the Lonergan and Rudenno books; that link to the Global Speculator article is very helpful, and;  I'm about to explore the aforementioned geo thread.

I appreciate how old the prior posts are and wish none of you blew up like Lehman.

Thanks fellas!

SX


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## indeck (5 February 2011)

*understanding mining reports etc*

I recently started getting into small caps and i'm struggling to understand a number of details within the reports.  How do you know what a good % of a certain resource is?  Does anyone have some good sites on how to learn about various drilling methods, go over the process from drilling to mining including info about DFS's and the likes.  I want to get a better understanding of the whole process

thanks in advance


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## grandia3 (5 February 2011)

*Re: understanding mining reports etc*

I remember reading somewhere in Rio Tinto websites about these mining jargon

I'll see if I can find it

found it:
http://www.riotinto.com/documents/R...80_-_In_the_Opinion_of_a_Competent_Person.pdf


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## So_Cynical (5 February 2011)

*Re: understanding mining reports etc*

There is already a thread on this.

https://www.aussiestockforums.com/forums/showthread.php?t=9643


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## derty (6 February 2011)

*Re: understanding mining reports etc*



So_Cynical said:


> There is already a thread on this.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=9643



This could probably keep a few here going forever.


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