# Geologists discussion thread!



## jman2007 (19 January 2008)

To all you Geo's lurking amongst ASF,

I thought we might be able to pool some of our knowledge together and basically discuss our ideas and experiences in the industry? This could include (but not exclusively) Exploration Geo's, Mine Geo's and Resource Modellers.  I think it could be really ineteresting, as we could learn a lot from each other as well!

You could start by stating what sector you work in and a general description geographically of where you work (optional of course).  Obviously specific company details and confidential reports would be *strictly* out of bounds.

It might help other ASF members who can get somewhat bamboozled by the technical mumbo-jumbo and who might want some help interpreting company information too.... hell, half the time even I have trouble understanding what they mean!

Cheers
jman


----------



## Spaghetti (19 January 2008)

Can non-geo's ask questions?


----------



## jman2007 (19 January 2008)

Mate, absolutely anyone who is interested is welcome to jump on board!

I thought this generalised diagram of the various JORC categories and their relationships would be a good start.  This classifications sets out the basic framework for reporting tonnage and grade estimates to reflect varying levels of geological confidence and different levels of technical and economic evaluation.

Exploration Results in the early stages of exploration are generally insufficient to allow any type of Mineral Resource estimate to be made, hence they are excluded from the geen box.

Mineral Resources can mainly be worked out by a geologist, however, Ore Reserves which are a modified subset of Indicated and Measured Resources require consideration of numerous social, economic and many other factors....the so-called "modifying factors".

The code allows for a direct 2-way relationship between Indicated Mineral Resources and Probable Ore Reserves, and between Measured Mineral Resources and Proven Ore Reserves, reflecting the similar level of geological understanding required for each category.

Interestingly, the  code allows for a conversion between Measured Mineral Resources and Probable Ore Reserves, reflecting a level of uncertainty in some of the modifying factors, but not a drop in the level of geological understanding. A Probable Ore Reserve can be upgraded to a Proven Ore Reserve once the uncertainties surrounding the modifying factors are removed.

Application of the Proven Ore Reserve category reflects the highest level of confidence possible, and under no circumstances can a Indicated Mineral Resource be directly converted to a Proven Ore Reserve.  Ore Reserve estimates must never be combined with Mineral Resource estimates to report a single combined figure.

For a full explanation, visit the JORC website, you can download the JORC code there.

Cheers
jman

Source: The JORC Code, 2004 edition


----------



## Spaghetti (20 January 2008)

Well you may have answered one of my questions without me asking it. I was wondering if there was anyway to form a rough estimate of resource size from drill results announced. I can see some benefit only in assessing grades but even then it seems to be open to manipulation or on how a company "markets" these results. Sometimes wonder if they are of any real value to the market especially in gold. Iron Ore results seem to give a clearer picture.

On gold mining I have come to the following conclusions by way of google geology lol so would appreciate feedback on whether I may need to upgrade my research tools!

Epithermal deposits - exposed = very good

Banded Iron Formations = good

Refractory ore = very expensive to mine

Quartz vein = hard to define resource (as discussed on gold thread)


Thanks, appreciate it.


----------



## jman2007 (20 January 2008)

Spaghetti,

The JORC code is very clear when it comes to the reporting of Exploration results.  Probably the key here is distinguishing discussion of Exploration results in terms of target size and type versus its misrepresentation as a Mineral Resource or an Ore Reserve.  You cannot use the terms Resource(s) or Reserves(s) in this context. 

"Any statement referring to potential quantity and grade of the target must be expressed as ranges and must include (1) a detailed explanation of the basis for the statement, and (2) a proximate statement that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource" (JORC Code 2004).

What troubles me more is that you never really know what proportion of a Mineral Resource may be refractory in nature (Au deposits).  I don't know if there are any restrictions or guidelines in terms of this type of reporting. I guess potentially a company good market it's deposit knowing that perhaps 40% of it is refractory. Refractory ore is bad news, it basically means that the gold is locked up in a lattice of sulfides, such as pyrite, and that conventional cyanide leaching is insufficient to liberate economic quantities of gold within normal residence times (Damn, a metallurgist would be great to have on this thread!...).  

You can either use some kind of bio-leaching in which the "bugs" use the sulfides as "food" and liberate the gold or use a roaster like KCGM use outside Kalgoorlie for refractory Superpit ore.  This basically bakes the ore up to 1000 deg celcius, driving off the carbon and sulfides.  It would be prohibitively expensive to haul ore by road to a roaster, so most companies don't bother.  I don't think you can build any more roasters now either.

Well certainly the BIF is one of the key targeting criteia we use when coming up with exploration targets, in conjunction with many other tools such as pathfinder geochem, soil geochem anomalies etc. Because the BIF is so erosion resistant it can sometimes be mapped over large areas.  There is a clear distinction between Au mineralization associated with sulfidization and silicified BIF and structurally controlled (a shear zone or a fold for example) sheared mafic volcanic rocks for example.  

Structurally controlled Au can occur within almost any rock type, and is not bound by lithology (rock type), look at the Golden Mile Dolerite in Kalgoorlie compared to the conglomerate-hosted gold at Wiluna for example.... completely different rock types, yet both world-class systems! Granites for example, are generally (but not always) not as prospective for gold mineralization in most cases. A good hypothetical target could also include the intersection of a shear zone with a BIF.

Don't know much about epizonal gold deposits, have to get back to you on that.  I mainly have experience in Archean Orogenic (means a period of mountain building) lode gold deposits, which is generally structurally controlled mineralization that can occur in any rock type.

Hope this helps
jman


----------



## Sean K (20 January 2008)

Great thread, thanks jman.


----------



## Spaghetti (20 January 2008)

Brilliant, thank you, such a great contribution. I almost understand it..which is great, wasn't long ago I would not have understood any of it.

I may give you a break before any more questions lol

cheers

Google geo aka spag


----------



## Timmy (20 January 2008)

kennas said:


> Great thread, thanks jman.




Yes - great thread - learning heaps (lot more to go).


----------



## jman2007 (21 January 2008)

Eeek!!...

Er, slight error on my part folks, I referred to the "Wiluna Conglomerate" which is incorrect, it is actually the "Wallaby Conglomerate" I was thinking of (Mental rap over the knuckles...ouch!).

Thanks for the kind words of encouragement people, much appreciated. Have to fly up to NE Goldfields tomorrow to log diamond core, so might struggle to access ASF this week! 

Hey think of me when you're sipping your after-work beers down by the waterfront while I'm swatting flies in 45 deg...

Over and out
jman


----------



## Wysiwyg (21 January 2008)

jman2007 said:


> Eeek!!...
> 
> Er, slight error on my part folks, I referred to the "Wiluna Conglomerate" which is incorrect, it is actually the "Wallaby Conglomerate" I was thinking of (Mental rap over the knuckles...ouch!).Over and out
> jman




lol   "A Freudian slip is like saying one thing, but meaning your mother."


----------



## derty (21 January 2008)

Lurking Geo here.

Currently employed in the exploration sector, focussing on nickel sulphide exploration. With a junior atm, have worked with majors in Ni and Au exploration and Ni production. 

One thing I have noticed, especially with respect to the plethora of juniors all fighting to get their piece of news to the market, is the standards of reporting. Some of what is reported sounds impressive, though when you have a working knowledge of the industry it is obvious that many things can be simply overstated or worse, grossly misrepresented. It is interesting how many exciting new projects or discoveries are reported on once or twice and are never covered again.

You need to read ASX releases with a very critical eye.

You need to look for the materiality of statements, that is, are grandiose statements backed up by hard physical evidence, or do a few surface grab samples constitute one of Australia's newest big discoveries? 

Also transparency is an issue. Does the report contain sufficent information? is it clear and unambiguous? is it misleading?  there are a lot of terms that sound great but have no significance wrt to JORC, such as hypothetical resources, insitu value, probable resources ...  

It is hard to know what is a significant result, especially when you are unfamiliar with the exploration methods and commodities involved. It was very interesting watching the frenzy associated with uranium recently, every one was rushing to spin-off their potential U assets into new floats and ASX releases were thick and fast. The word around was if you have any historic U exploration results or access to a scintilometer, generate an anomaly and release it.  My knowledge of U exploration is and was very limited and I didn't really know what was significant or not, though companies values would leap on announcement as everyone fought to get a piece of the U action. 

Something I am really interested in is coal, oil and gas exploration and production. Though, it is also something that I have no working knowledge of and thus the significance of most terms and values wrt intersections are meaningless to me. Are there any coal-oil or gas geos out there that can give a quick rundown on significant exploration indicators?


----------



## doctorj (21 January 2008)

Fantastic thread - I can't wait to see how it develops.  

http://www.glossary.oilfield.slb.com/default.cfm is a great resource to look up oil & gas terms.


----------



## Bushman (21 January 2008)

derty said:


> Lurking Geo here.
> 
> Currently employed in the exploration sector, focussing on nickel sulphide exploration. With a junior atm, have worked with majors in Ni and Au exploration and Ni production.




Derty - I have a question for a nickel man/lady if you don't mind. How can I find out about the viability of nickel laterite deposits? I have often read that nickel sulphides are cost effective to mine but nickel laterite deposits are prohobitively expensive and thus not worth the risk. As with every rule of thumb, there will obviously be exceptions. So the geo question is what should you look for in laterite deposists or should they be shunned as a fools dream?

I am not sure how questions like this rate on the 'investment advice' scale so I guess a reference to a web site or a journal on the subject would be the most appropriate. As always, any info provided will be treated under the auspices of DYOR and IMO. Mods?


----------



## doctorj (21 January 2008)

Bushman, I think that's a fair question, but I suspect the question relates into the process of recovering the metal as opposed to geology.  I'm sure they'll be able to help somewhat...


----------



## jtb (21 January 2008)

jman2007 said:


> Hey think of me when you're sipping your after-work beers down by the waterfront while I'm swatting flies in 45 deg...
> 
> Over and out
> jman




Roger that Jman.

Shouldn't that be sitting in the air-conditioning in the 'cruiser with your Engel listening to an ipod though?

Don't let any of those smelly drillers do unspeakable things in your sample bucket .............

As the hatchetman said- great idea for a thread, look forward to it.

Whatyousee - loved the freudian slip thing  I'm going to use that


----------



## MS+Tradesim (21 January 2008)

Bushman said:


> I have often read that nickel sulphides are cost effective to mine but nickel laterite deposits are prohobitively expensive and thus not worth the risk.




Wonder if you are thinking of the same company I am? Anyways, not a geo but I agree with Doctorj...I think that's a metallurgical question. Would be great to get one here. Many thanks for this thread.


----------



## derty (21 January 2008)

Yes, a question best posed to a metallurgist, but I can lay some ground work. Being a sulphide explorer I spend most of my time trying to avoid the confusion that lateritic enrichment of nickel creates in the regolith (the stuff between fresh air and fresh rock) when targeting sulphides. 

Basically during the weathering of ultramafic rock nickel can be concentrated in various parts of the weathering profile and in various minerals. The nickel to be enriched is originally contained within the mineral olivine and does not have a sulphide origin. 

Nickel laterites come in 3 varieties.
1. Hydrous silicate laterites - Ni is contained in Mg-Ni silicates such as garnierite, hosted in the lower part of the weathering profile. Forms in well-drained tropical areas, generally higher grade (1.8-2.5% Ni). e.g Goro deposit in New Caledonia.
2. Clay silicate laterites - Ni is hosted mainly within smectitic clays and is hosted within the lower-saprolite (middle of weathering profile). Common in Australia, lower grade (1-1.5% Ni) e.g. Murrin Murrin, Bulong.
3. Oxide laterites - Ni is mainly hosted within goethite (Fe oxyhydroxide) in the upper saprolite (upper part of the weathering profile). Common in Australia, lower grade (ave 1.2% Ni) though grade can be significantly improved by screen removal of free silica (benification). e.g. Cawse, Ravensthorpe.

In Australia, a deposit usually has both clay silicate and oxide laterite, though one will usually dominate.

Costs for setting up processing facilities for Ni-laterites are huge (billions $) and the processing plants are largely ore-type dependant. The lead time from resource definition to commissioning a plant are 5-10 years and someone with very deep pockets needs to be involved. 

The appearance of heap leach technologies can provide a faster route to production for the smectite-type ores. The costs involved in setting these up appear to be in the order of 100's of millions and not billions. HRR's Jump Up Dam project is an example of this in the pipeline. 

As for what makes a prospective laterite play? It is a complicated question. Those with smectite ores can pursue the relatively cheaper heap leach options. Either way a very large amount of finance is involved. The processing requires large volumes of water and acid so sources for these must be acquired. While it sounds like laterite ores are huge continuous homogeneous blankets, they often have high localised variability of grades and ore types that can complicate mining and processing. 

I'm sure a metallurgist will be able to make this more clear as I have at best a poor understanding of the details of the extraction processes involved.


----------



## Bushman (21 January 2008)

Thanks for the detailed reply Derty. Very informative. It sounds like the capex for a laterite deposit is prohibitive after all.


----------



## jman2007 (21 January 2008)

derty said:


> Lurking Geo here.
> 
> Currently employed in the exploration sector, focussing on nickel sulphide exploration. With a junior atm, have worked with majors in Ni and Au exploration and Ni production.




Hey Derty,

Great to have you contributing to the thread, you also raised some really good points re interpretation of Exploration results as well.

Mate the Goldfields flies are still out in force, I'm sure I recognised some of the same little buggers from last time! :

jman


----------



## Spaghetti (21 January 2008)

Derty..or anyone who knows!

Looking at a map atm prospective for nickel. It shows a legend and the area surrounding drill target is described as ultrabasic. Is this the same as ultramafic? However the drill target area is described as pyroxenite. sort of an outcropping I guess....so could this be suphide sort of nickel? Or could this also be laterite. Once again I ask forgiveness if totally ignorant question.

And once again can say how much appreciate all this. Going forward in this market I think we will need a far better understanding of what we are buying than we have had in the past.

Cheers


----------



## derty (22 January 2008)

Ultrabasic is the same as ultramafic, just an older terminology, though it is still used occasionally. Ultramafic rocks are igneous rocks characterised by low silica (usually <45%) and high magnesium (>18%). The term ultramafic is a garbage bin term that covers a variety of rocks that fit the above parameters. 

Ultramafic rocks are originally composed of varying percentages of olivine and pyroxene, commonly chromite and sometimes plagioclase (feldspar), plus numerous other accessory minerals.  Olivine is MgO rich and by comparison pyroxene is MgO poor so olivine rich rocks are higher MgO and are considered more ultramafic. 
common rock types are:
Dunite: olivine rich (minor to no pyroxene) - very high MgO
Peridotite: olivine+pyroxene - generally high to mod MgO
Pyroxenite: pyroxene dominant - low MgO.

Ultramafic rocks form as either intrusive bodies crystallising at depth (often forming layered mafic-ultramafic intrusives) or as volcanic rocks that erupt and solidify at the surface (komatiites). 

Nickel sulphides can be associated with volcanic or intrusive styles: 
The volcanic type (Komatiite) comprise the high grade Kambalda style nickel deposits (Long, Miitel, Cosmos) and low grade disseminated Mt Keith style (there is some evidence now that at least some of these are high level intrusives). They are characterised by being hosted by high MgO rocks.
The intrusive associated deposits are hosted in what is called differentiated ultramafic or mafic-ultramafic dykes where the minerals segregate by various processes producing layers of different rocks. Usually with the higher MgO varieties at the base. Nickel is usually found near the base of these deposits. The rocks will have a range of MgO. Deposits include Radio Hill, Carr Boyd, Sally Malay. Voisey's Bay and the West Musgrave Nebo and Babel are also associated with differentiated mafic intrusives. These intrusives can also contain PGE mineralisation as well as chromite layers and are oftem much more copper rich than their komatiite counterparts.

Ok now that I have laid a bit of ground work, onto your question Spaghetti:
From the information you have provided it is hard to make a judgement. If the exploration is for komatiite hosted Ni then drilling into low MgO pyroxenite is probably not a good sign. Though, if they are exploring a differentiated dyke it may not be a negative. It also depends on the scale of the plan, they may be showing a large area and have a schematic drill collar placed on it. It also depends on what their target criteria. It may be conceptual, they may be following up on surface geochem or have a geophysical target or existing drilling. Lateritic nickel usually forms from high MgO rocks that have high corresponding Ni, it is unlikely they would be targeting a pyroxenite for Ni-laterite.

Hopefully that may shed a bit of light on the subject for you.

Hi jman, was a good idea to get the thread going, I will help out where I can.
The flies sure are friendly, I would like to shake the hand of the man who had the brainstorm to mix sunscreen and insect repellent together.


----------



## jtb (22 January 2008)

doctorj said:


> http://www.glossary.oilfield.slb.com/default.cfm is a great resource to look up oil & gas terms.




Stumbled across this awhile ago and leads in all sorts of interesting directions.
Good to see my tax dollars going somewhere.

Link is to nickel as all the talk of ultra-mafics got me a bit excited 

http://www.minerals.org.au/education/secondary/secondary_resources/factsheets/nickel


----------



## jman2007 (23 January 2008)

Hi Derty

Would have posted this question yesterday, but I was too busy chain-smoking about 35 packets of cigarettes and resisiting the urge to drink the pain away after watching the market eat itself alive.

You my friend, being the resident ASF laterite guru might be able to help me out here. 

It seems to me that "laterite" is a term often used and abused by numerous Geo's. To top it off, almost as many researchers seem to have studied laterite profiles as have offered classification schemes!...

The original definition of laterite came from Buchanan (1807) who described a softish regolith material cut in Kerala India, to make building bricks.  Ollier and Rajagura (1989) describe this material as typical vesiscular mottled saprolite, hard enough to maintain shape while being cut from the ground with an axe.

The original 'laterite' of Kerala seems to occur in a deeply weathered profile.  But these days, most Geo's seem to use the term 'laterite' to refer to the Fe-oxide cemeted cap of a weathered profile, which it is clearly not if the material from Kerala is indicative of what laterite actually is....

So what's your take on this?

In terms of your nickel sulfide exploration work, do you differentiate between laterite and ferricrete? (According to Taylor and Eggleton, ferricrete is defined as near-surface masses of regolith cemented by Fe-oxides and oxyhydroxides).  Most of the Geo's I work with would generally reserve the term 'laterite' for the Fe-oxide cemented cap of a weathered profile, which to my mind, is incorrect useage. This isn't to say you can't have 'laterite' profiles cemented by ferricrete!   I'm a bit of a lone ranger sticking up for the good ol' ferricrete Derty, appreciate your thoughts on this subject.

Regards
jman


----------



## jman2007 (23 January 2008)

jtb said:


> Roger that Jman.
> 
> Shouldn't that be sitting in the air-conditioning in the 'cruiser with your Engel listening to an ipod though?
> 
> ...




Aaaah!...

Ya dirty bugger!... That was a knife straight through my heart!

Funny you should mention the dirty drillers to me, one lot managed to slip a slice of beetroot into my sieve sample once, which I dutifully sieved and thought I had stumbled on a new and exciting form of mineralisation (for about 3 nannoseconds)..much to their amusement 

jman


----------



## derty (23 January 2008)

Laterite guru, hehe, probably the first and last time i will be called that.

I may disappoint you somewhat here jman. The terminology for much of the regolith, especially the upper part is a dogs breakfast. The term laterite as coined by Buchanan referred to a soft ferruginous material that could be cut by knife or axe that hardened into bricks when dried. The original laterite would be called mottled zone these days from what i have read. As you said, today the term laterite is generally referred  to the material that has been indurated by iron oxides and oxyhydroxides, usually in the upper parts of the profile.  

Lateritisation as a process for me involves the cementing of weathered or transported material with Fe-oxides. I try to avoid the term laterite in regolith descriptions, though if I do use it it is always in reference to the insitu or weathered material. Analogous with the duricrust or ferrugenous upper saprolite/pedolith. 
I use ferricrete to describe Fe-cemented transported material, usually Fe-cemented pisolitic or nodular ironstone gravels. Typical of the resistive bands you see at the top of some hills or breakaways as a result of topographic inversion.

I primarily used to use Cliff Ollier's and Louisa Lawrance's definitions of the regolith zones for field mapping and logging. Though these days I try to adhere as close as I can to the CRC LEME terminologies as I believe there needs to be some polarising of the terms used in industry and CRC are the leaders in the field atm and I have no real problem with their models. 

So I guess I probably line up with most of the other geo's you work with


----------



## jman2007 (24 January 2008)

derty said:


> Laterite guru, hehe, probably the first and last time i will be called that.
> 
> I may disappoint you somewhat here jman. The terminology for much of the regolith, especially the upper part is a dogs breakfast. The term laterite as coined by Buchanan referred to a soft ferruginous material that could be cut by knife or axe that hardened into bricks when dried. The original laterite would be called mottled zone these days from what i have read. As you said, today the term laterite is generally referred  to the material that has been indurated by iron oxides and oxyhydroxides, usually in the upper parts of the profile.
> 
> ...




Thanks for the info derty,

Agree that the CRC LEME chaps/chapettes are probably the only ones who really know what they are talking about, a few of the senior exploration Geo's here are of the same opinion.  I guess if you use the original Buchanan definition the mottled zone and even the saprolite zone could be referred to as part of the 'laterite profile'... obviously current useage is not compatible with this model however.

Interesting to hear your useage of the ferricrete term, I would generally reserve this term for relative or absolute accumulation of Fe-oxides or oxyhydroxides in the duricrust.  "Relative" being the removal of other solutes in the cap leaving a relative accumulation of these minerals, and "absolute" meaning the transport via water of these components from point A to B eg. slope wash down slope to a topographic low, or transport in groundwater....arguably this could be interpreted as "transported" ferricrete as well since the cementing minerals are sourced from another location!

The guys here are pretty big on identifying the base of tranpsorted material in the profile, and we use the term "transported laterite" for this, sometimes it is clear we are drilling through a paleochannel we we intersect stransported sands and gravels etc. but I still find it pretty tough picking transported material in the top 1-15m sometimes....

jman


----------



## daggs (30 January 2008)

Great thread idea jman. Good to see someone in the industry willing to share info and help us mug traders. 

I was reviewing some anns from a stock I own (PEN) and was hoping you could shed some light on the nature of this ore type. From reading previous posts I'm thinking this is refractory ore?

DDHQ010 intersected 40.5 meters from 9.5 meters (down-hole depth) of
0.85g/t Au, including 2.5m of 4.48g/t Au from 43m within a zone of quartzpyrite-
carbonate veining. Deeper intervals of similar grade mineralisation
were intersected between 52-59.5m and 77.5-91m. Individual assays
range up to 9.14 g/t Au and variability of repeated assays indicate that
coarse gold may occur in some intervals.

The ann also referred to this as epithermal quartz veining.

Any help would be greatly appreciated


----------



## RichKid (30 January 2008)

Excellent thread jman!! Keep it going. Thanks to everyone who's contributing their time and knowledge and also to those showing an interest in learning more. This is one area that I know little of. It's very encouraging to see the topics being discussed in the typically helpful ASF spirit.

<edit> It's important to make sure that this thread doesn't turn into a 'co anncts' thread where jnr mine anncts are discussed at the expense of theory and practice- the stock specific threads are probably best for the former. Illustrative examples of course are another story but it's important to strike a workable balance.

RichKid
moderator


----------



## derty (30 January 2008)

Just quickly, I had a look at the announcement and they have assayed using fire assay which gives you a total gold value (i.e. both refractory and non-refractory gold). So from this you cannot make a call if there is any refractory gold. To determine refractory vs non-refractory analysis needs to be cyanide leach with the residue analysed with fire assay. The assay value for the cyanide leach will tell you non-refractory gold and the fire assay residue will tell you the refractory component.


----------



## daggs (30 January 2008)

Thanks derty,
 I was under the impression that the presence of pyrite indicated refractory ore, but it's obviously more complicated than that
 So would it be correct to say that these results aren't worth much at this stage, especially as the grades are fairly low? Metallurgical testing would be needed to determine feasability before more exploration?
Hope you don't mind my stupid questions, just trying to gain a basic understanding.

Rich Kid - This is an old ann and just trying to put some theory into practice


----------



## jman2007 (30 January 2008)

Ta Derty,

I was thinking along similar lines, again a metallurgist would be great to have on board. I don't see how you could look at an ore sample and determine whether it is capable of being free-milled (non-refractory) or not.  If the gold is hosted in the pyrite, and the pyrite is disseminated, not granular, then perhaps most of the gold (>92-93%) could be recovered with conventional leaching.  But ultimately, the recovery testing process you proposed would be the only way to definitively answer the question

jman


----------



## derty (30 January 2008)

In reply to your previous regolith post jman (apologies for the delay, have been in Esperance for the long weekend), I used the topographic inversion exposures of ferricrete as an example. When I see massive iron accumulation in transported material, often lake sediments I also call that ferricrete too.

I sympathise with your guys looking for the Recent/Tertiary - Archaean boundary. At times it can be a trying experience, especially when the distance between what you are comfortable calling transported and Archaean is 10m or so. I have logged over 120km of aircore through most parts of Lake Cowan and quite a bit on Lake Lefroy. The southern palaeodrainages are often reducing below 20 or so metres and it makes the spotting of the boundary quite a bit easier. However up north it is my understanding that the drainages are usually oxdised and where you have an oxidised overprint over the unconformity it will make the task of locating it all the more difficult. You end up feeling a bit like Sherlock Holmes, looking for little shreds of evidence that will allow you to make a call one way or another.

***********

Now on a different track, I just wanted to mention a useful way to look at interpreting intersections. Quite often you will see an intersection reported as XXm @ YYg/t including AAm @ BBg/t, where BB is quite a large number. This usually means that the remainder of the intersection is quite poor. 
What you can do is convert the intersection into gram metres and that will allow you to easily work out the metal distribution for the remainder of the intersection. 

I will use the PEN intersection from daggs as an example. The intersection is 40.5 meters from 9.5 meters (down-hole depth) of 0.85g/t Au, including 2.5m of 4.48g/t Au from 43m. 

First you need to convert both intersections to gram metres, this is easily done by multiplying the interval thickness by the grade e.g.

40.5m at 0.85g/t = 40.5 x 0.85 = 34.4 gram.metres Au
2.5m at 4.48g/t = 2.5x 4.48 = 11.2 gram.metres Au

Then to work out how much the remainder of the intersection contains you subtract the intersection widths and the gram.metre intersections and divide the gram.metres by the intersection e.g.

40.5m - 2.5m = 38m
34.4 g.m - 11.2 g.m = 23.2 g.m
then 23.2 g.m / 38m = 0.61g/t Au

So the remainder of the intersection contains 38m at 0.61g/t Au. 

If you look around you will find some excellent examples of this where the remaining metal in the intersection is pathetic. This can me done for any commodity. If the metal is presented as % the resultant calculation is metre percent. Have fun you will be amazed at some of the huge intersections some companies will present all carried by one small high grade intersection.


----------



## dj_420 (30 January 2008)

derty said:


> Now on a different track, I just wanted to mention a useful way to look at interpreting intersections. Quite often you will see an intersection reported as XXm @ YYg/t including AAm @ BBg/t, where BB is quite a large number. This usually means that the remainder of the intersection is quite poor.
> What you can do is convert the intersection into gram metres and that will allow you to easily work out the metal distribution for the remainder of the intersection.
> 
> I will use the PEN intersection from daggs as an example. The intersection is 40.5 meters from 9.5 meters (down-hole depth) of 0.85g/t Au, including 2.5m of 4.48g/t Au from 43m.
> ...




Great bit of information there. So many companies must use higher grade intersections to boost the average grade along the strike. Crazy!!!

Anyway I am starting my science degree majoring in geology in about 2 weeks. So this is a great thread to start me of on.


----------



## jman2007 (30 January 2008)

*Controls on Gold Endowement: Shear Zone Comparison*

This might be interesting for all you gold bugs out there, I stumbled across this little review a few days ago. This work is relatively recent, but may in fact *revolutionize* the way in which companies conduct their exploration programmes.

(*Cough* I'll try not sound like I'm speaking Polish here)

The guts of this 'new' theory is that the key to gold deposition is that a *variety* of rock types are required at the depositional site.  This will lead to local changes in *competency contrast* which basically means different rocks in this local area will react differently when a stress is applied to them.  Some might flow like a toffee, while others might fail by brittle fracture. 

This is all looking very nice for gold minerlisation now, because this competency contrast will lead to *strain incompatibility*. Some large competent blocks within the shear zone will be rotated according to the orientation of the stress field and will actually *focus* the gold bearing fluids as these deep-sourced fluids try to find a way around these blocks, utilising more permeable pathways.  Additionally, the variety of rock types can also lead to *chemical gradients* in which the gold may become saturated in solution and start precipitating out.  

Also bear in mind that there are also many structures within shear zones that may "trap" the mineralization, ie. it has no-where else to go, such as antiformal fold closures (fold looks like a rainbow).  Compare this to synclinal forms which have little/no ability to trap gold (fold looks like an upside down rainbow).

*In the case of the Golden Mile, many of these ideas in the model can be bourne out by observation. A particular low permeability group of rocks called the Black Flag sequence are thought to have acted as low permeability seals for rising fluids, and deflected the fluids toward the higher permeability Boulder-Lefroy Shear zone! The ultimate regional fluid focussing mechanism!!*

Apparently, after combining all of these factors, the reseachers concluded that it was most likely that the Pressure/Temperature conditions required for ideal Au minerlisation  corresponded to *greenschist facies* metamorphism (erm...well this will be a particular pressure and temperture regime where a certain group of minerals will be 'formed').  

If we imagine that we ramp up the pressure and temperature and go into a higher metamorphic grade (amphibolite facies), this will be bad news. Basically the host rocks will all become 'similar' to each other, leading to vast areas of monotonous geology, with little competency contrast and therefore little or no ability to focus fluid flow.  This is because fluids will be pretty much dispersed throught the system so mineralisation cannot take place.

Bear in mind that this model seems to work well for large areas of the Archean Yilgarn Craton, (around Kal and beyond), but there are many other deposit types around the world of younger age, such as placer deposits, Carlin-Style deposits and SEDEX deposits to name a few, which will undoubtedly have their own tailor-made models, and that this model may not necessarily be applicable in other geolical settings.

Hope this was some help
jman

References:

Controls on Gold Endowement: Shear Zone Comparison.  Ch. 2.6: Weinberg, R.F., Groves, D.I., Hodkiewizc, P., van der Borgh, P., Hydrothermal Systems, Giant Ore Deposits, Yilgarn Atlas Volume III UWA Gold Module, Part I, AMIRA Project P511


----------



## Birdster (30 January 2008)

First, I think it's great that these geos take time to answer questions to help us fellow ASFs.

I have a (2) question about Airbourne EMs. 

1. What is the turn around time from the actual recording of data to reading a report of the data?

2. Is the data accurate alone, or enhanced by dilling results?

Thanks in an advance for any feedback!


----------



## jman2007 (30 January 2008)

Birdster said:


> First, I think it's great that these geos take time to answer questions to help us fellow ASFs.
> 
> I have a (2) question about Airbourne EMs.
> 
> ...




Hi Birdster,

Not sure about the tat for EM surveys these days, there are specialist geophysical companies who usually do this kind of work, but it could be anywhere from 5-6 weeks I imagine b4 the data is collected, analyzed and worked into a draft report for the mining company.

I guess in terms of accuracy, it depends on the grid resolution that the data is based upon. For example, a 50m by 50m grid pattern will not be defined as a 20m by 20m pattern.  The low res pass is good for regional targeting on a broad scale however, as it can sometimes pick out regional structures such as shear zones and define the geology in a general sense.  The other factor would probably be the rock types, as it can sometimes be very hard to distinguish between two relatively similar density materials that exist in close proximity to each other, as they can give a very similar 'signal', such as a sediment and a granite for example.  

Another common problem is surface scattering of the EM data by tertiary transported regolith material, which can essentially 'swamp' the signal of the underlying basement rocks. The image has a distinctive fuzzy look, and can almost be impossible to interpret.

Hope this helps

(Derty probably knows a lot more about this actually )

jman


----------



## jman2007 (30 January 2008)

RichKid said:


> Excellent thread jman!! Keep it going. Thanks to everyone who's contributing their time and knowledge and also to those showing an interest in learning more. This is one area that I know little of. It's very encouraging to see the topics being discussed in the typically helpful ASF spirit.
> 
> <edit> It's important to make sure that this thread doesn't turn into a 'co anncts' thread where jnr mine anncts are discussed at the expense of theory and practice- the stock specific threads are probably best for the former. Illustrative examples of course are another story but it's important to strike a workable balance.
> 
> ...




Cheers for the heads up RichKid,

Yeah people seem to be enjoying the thread so far which is really great.  It's a bit of a 2-man crusade at the moment though , hopefully we can get some more geo's onboard and start expanding our knowledge base too.

I think we'll try to keep things fairly general and use hypothetical examples where possible, and I agree, the best place to discuss and pick apart specific company info released to the market should be the relevant company thread itself.

Cheers
jman


----------



## derty (31 January 2008)

i'll put in my  too: As jman said the time to get the report back will depend on a lot of things. 4 to 8 weeks for a report and modelled data is likely, though the geophysicist should be able to supply a draft summary of any main anomalies within a week or two. It will depend on the density of the data collected, the size of the survey and how busy the geophysicist is. 

Now Birdster you said it was airborne EM, which is an ElectroMagnetic technique that looks for conductive bodies in the upper part of the crust. It is a really nifty technique. The are two main components used for the survey. A transmitter coil/loop (TX) and a receiver coil/loop (RX). With airborne EM the TX is usually a wire loop strung between the tips of the wing, the nose and the tail and the RX (called a bird) is towed on a cable behind the plane. 
How it works is; a current is passed through the TX which creates a magnetic field, the magnetic field penetrates into the earth and induces a secondary current in any conductive bodies it intersects (the materials that usually conduct in the crust are salt, graphite and sulphides). The TX current is then switched off and now the magnetic field that is produced by the current in the buried conductor induces a current in the RX. The RX will measure the strength of the magnetic field and how fast that field decays. Better conductors will decay slower. (that is the basics of EM, surface and down hole EM all use the same principle). The survey produces a whole heap of squiggly lines that the geophysicist interprets, a bit like very scientific tea leaf reading :

Now when you ask is the data accurate, I assume that you mean can you look at it and tell what is down there? 
What the data tells you once the geophysicist has modelled it is that there is a conductive body, you will also usually know it's depth, size, orientation and conductiveness.  You will not know what is causing it. In nickel exploration the majority of identified conductors are sulphide bearing graphitic shales (and if they were worth money I would be a rich man) and at them moment there isn't a way I know of to tell these from bona fide nickel sulphides unless there is some surface expression such as a gossan. The only way to really tell is to drill a hole a have a look.

Airborne Em has pro's and con's over surface techniques. 
cons
 - Because the RX is mobile it will not see the vary late time conductive bodies.
 - As the magnetic field attenuates rapidly away from the source the field will not penetrate to the depth a suface EM survey will. Some surface techniques are claimed to penetrate up to 500m down, though usually 150m-250m is the norm. Airborne will be around 150m ish and can be much less dependant on several factors, and may not even be able to penetrate past the weathering to detect the fresh sulphides.
- The weathered part of the rock often contains saline waters, these are weakly conductive and is called the conductive overburden. The currents in the conductive overburden will rapidly attenuate the TX mag field and will often render airborne surveys useless. In Western Australia the ground waters south of Menzies are typically saline and those north relatively fresh. As such  the usefulness of airborne EM south of Menzies is limited.
Pros
- fast and covers very large areas quickly
- per hour it is MUCH more expensive though for line kilometre of survey it is usually cheaper than surface EM
- survey does not have accessibility issues that surface techniques will due to terrain and vegetation e.t.c.

Airborne EM is great when used in the right conditions and a very expensive waste of time when not. Anomalies are usually followed up with surface EM to better define the conductor before drilling. Surveys can be flown by aeroplane or helicopter.


----------



## Birdster (31 January 2008)

Thanks Jman and derty. Very well explained. 

FYI, I asked is because EXM is conducting the Airborne Em. (ann'd 16/1) They have had ann Positive drill reports previously with neg. results 

But thats the whole Stock Market in a nut shell ATM


----------



## Bushman (23 June 2008)

Hey geo's - I see this thread has fallen silent for awhile which is a pity as much was learnt via the excellent contributors. 

I have a coal question which may or may not belong on this thread but anyway -here goes. What does it mean when a coal deposit has a high ash content? Is this an issue for a thermal coal deposit. I know that it is not great for coking coal. 

Would appreciate anyone's feedback on this. 

Cheers
B'man


----------



## prawn_86 (23 June 2008)

Only just came across this thread (i was overseas when the bulk of the postings were done), great stuff!

Lots of big shiny words, which i have no idea what they mean


----------



## dj_420 (23 June 2008)

Bushman said:


> Hey geo's - I see this thread has fallen silent for awhile which is a pity as much was learnt via the excellent contributors.
> 
> I have a coal question which may or may not belong on this thread but anyway -here goes. What does it mean when a coal deposit has a high ash content? Is this an issue for a thermal coal deposit. I know that it is not great for coking coal.
> 
> ...




Although I am only early in my degree I will try to answer this question from what I have learnt.

Coal is identified by two main things, rank and quality.

Rank is decided by carbon and volatiles, ranking for different coals can be identified as:

Type                     Carbon          Volatiles
Wood                    45%             55%
Peat                      55%             45%
Lignite                   65%             35%
Sub bituminous coal  75%             25%
Bituminous coal        85%             15%
Anthracite               95%             5%

So from here peat is lowest rank and antracite is the highest rank according to carbon content.

However coal is then determined by quality, this is identified by ash and sulpher content. 

Ash content is created by the materials (aluminum and silicon) that the original trees did not use and store in the dead wood inside the tree, this content is then transferred to the coal when it is formed. The ash is simply materials the tree did not use.

Coal quality can then be divided into high, medium and low. 

High quality coal: <10% Ash     <1% Sulpher
Medium quality coal: <30% Ash    <3% Sulpher
Low quality coal: >30% Ash    >3% Sulpher

So you can have different ranks of coals that have different quality.

Sub bituminous coal can is used primarily for thermal coal and are used for electricity production.

Bituminous coal can be used for coking coal depending on carbon content and the volatility content, coking coal is used in the production of steel and iron.

Anthracite is rarer and is used for domestic and industry and is known as smokeless coal.

So in a nutshell you really want low ash content as it determines the quality of the type of coal you are talking about. I think this gives a bit of a summary, if anyone has any further info to add please feel free. I might add that the quality and rank will help to determine the saleability of the coal and may indeed affect feasibility for particular coal deposits.

Hence the difference in price for thermal coal and coking coal. Much of the coal in eastern Australia is low rank and low quality but is suitable for electricity production.


----------



## dj_420 (23 June 2008)

I forgot to put in there that the carbon content is a way of measuring energy content. The higher the carbon content the higher the energy that can be extracted from the coal.


----------



## jman2007 (23 June 2008)

That's a pretty good summary dj,

I have to admit I had to scratch around for a bit and dust of some of my old textbooks etc before I could answer this effectively!  It's good to see this thread being revitailsed again though.

I saw a page on Wikipedia that basically describes the ash content of a coal as anything non-combustible eg. aluminium and silicon compunds, that are left behind after oxygen, hydrogen, sulfur and water have been burned off. So in essence, I think both our definitions are saying a similar thing, in a different way.

Basically, you should be able to determine the ash content by burning a known mass of coal, and then weigh the residue and convert this to a % ash content.

This passage was interesting as well:

"The behaviour of a coal's ash residue at high temperature is a critical factor in selecting coals for steam power generation. Most furnaces are designed to remove ash as a powdery residue. Coal which has ash that fuses into a hard glassy slag known as _clinker_ is usually unsatisfactory in furnaces as it requires cleaning."

http://en.wikipedia.org/wiki/Coal_assay#Ash

Cheers 

jman


----------



## Bushman (23 June 2008)

Thanks guys- perfect. 

So if I have interpreted this correctly, the higher the ash content, the lower the carbon content, and the less efficiently the coal will generate heat when it burns (or something along those lines). 

So for high volume, lower energt type uses (ie electricity generation where you produce steam at boiling point of 100 degree), you can medium ash content thermal coal. Then for uses where you need very high heat transfer (ie steel production), you need high carbon-content coking coal. 

Reason I asked is that REY have a massive +1 billion tonne potential thermal coal deposit but it has medium ash content. So it is fair to surmise it will not be suitable to steel making but should be ok for electricity generation (in Canning basin so will be shipped to India). 

Thanks again guys. 

PS: yep this thread is great esp for us 'try hard' weekend geologists!!


----------



## jman2007 (23 June 2008)

Hi Bushman,



Bushman said:


> Thanks guys- perfect.
> 
> So if I have interpreted this correctly, the higher the ash content, the lower the carbon content, and the less efficiently the coal will generate heat when it burns (or something along those lines).




Yes, that sounds like the correct conclusion to me.



Bushman said:


> So for high volume, lower energt type uses (ie electricity generation where you produce steam at boiling point of 100 degree), you can medium ash content thermal coal. Then for uses where you need very high heat transfer (ie steel production), you need high carbon-content coking coal.




Again, I would agree with that.



Bushman said:


> Reason I asked is that REY have a massive +1 billion tonne potential thermal coal deposit but it has medium ash content. So it is fair to surmise it will not be suitable to steel making but should be ok for electricity generation (in Canning basin so will be shipped to India).




This is a slightly trickier question, I know a Geo who worked in coal for a few years so I'll run it by him this week. Just want to make sure you get a proper informed answer. 

Cheers
jman


----------



## jtb (23 June 2008)

Bushman said:


> Thanks guys- perfect.
> 
> So if I have interpreted this correctly, the higher the ash content, the lower the carbon content, and the less efficiently the coal will generate heat when it burns (or something along those lines).
> 
> ...




Hey Bushman, yes ash content is important as its rubbish and has to be disposed of.
Us anthracite burners over here consider ash greater than 10% as crap coal but if you were to compare it too many brown coals (NSW/Vic) than thats as pure as the driven snow.
A significant proportion of ash (Silicates or sand being common, clay if brown coal) is also Iron products particularly iron pyrites (fools gold).

As a rule of thumb 1 tonne of coal will give 5 tons of steam or 2.5MW (in generation).

As to boiling at 100deg C thats only your kettle 

Boiling point is governed by pressure not temperature (atmospheric pressure being 101 kPaA) and generators usually make steam from at least  >12MPa. The site I'm on atm will be sub-critical @ 17.8MPa and places like Kogan Creek in Qld run critical @ >22MPa (critical being when water and steam exist in the same phase).   

Carbon content is all important in coal as the heat (energy) from combustion comes from the chemical reaction converting carbon to CO2.

Hence gas produces less CO2 than coal as its hydrocarbon is dominated by hydrogen not carbon.

Yes theres a lot of coal in the Canning also.

What are you studying btw DJ ?

We can never have enough rocklickers imo:


----------



## dj_420 (23 June 2008)

jtb said:


> Hey Bushman, yes ash content is important as its rubbish and has to be disposed of.
> Us anthracite burners over here consider ash greater than 10% as crap coal but if you were to compare it too many brown coals (NSW/Vic) than thats as pure as the driven snow.
> A significant proportion of ash (Silicates or sand being common, clay if brown coal) is also Iron products particularly iron pyrites (fools gold).
> 
> ...




Hey jtb

I am studying Distance Education at Macquarie Uni, go down to the Uni twice a semester for lab work. Its a lot of fun though, where do you work at?

Its a great thread this one, even better for someone who has only just started their degree and can get a lot of info from it.


----------



## derty (26 June 2008)

good to see the thread active again.

Rememberances from uni (should be pretty close to the mark).

From my understanding the main component of ash in coal is silt and sand that has either washed in with, or has been deposited as layers over and interbedded with the original organic matter. The more woody the original organic matter the more ashy it is too.

Sulphur in the coal is usually in the form of pyrite, as a result of the microbial reduction of sulphate and reaction with ferrous iron to produce iron sulphide. The origin of the sulphur can be a mixture of organic and inorganic sources. The Fe component will contribute to the ash as FeO when burnt though the S will be released as gas and not contribute to the ash content.

It is interesting to the amount of compaction that occurs to get the original organic matter into the form of coal. I cannot remember what the compaction is to get to the peat stage, though the thickness of coal may be as little as 10% as the original peat thickness. As the coal compacts water and volatiles are removed or squeezed out and the relative carbon content increases. If the end product is anthracite then the level of compaction is even greater. 

So if you have a 1m coal seam chances are that it was originally a bed of organic matter greater than 10m thick. No wonder it makes such a great form of energy.


----------



## Wysiwyg (26 June 2008)

Can anyone tell me how 1970`s and 80`s 2 dimensional seismic can estimate 2 billion barrels of oil in a 21 km by 21 km area?

It is okay if no one can, I understand the difficulty of making such an estimate.


----------



## jman2007 (27 June 2008)

Wysiwyg said:


> Can anyone tell me how 1970`s and 80`s 2 dimensional seismic can estimate 2 billion barrels of oil in a 21 km by 21 km area?
> 
> It is okay if no one can, I understand the difficulty of making such an estimate.




Cripes!...

Now that is a tough one for a land-lubber geo, I might have to pass on that one for now I'm afraid. Geophysics was never my favourite area 

jman


----------



## jman2007 (27 June 2008)

Bushman said:


> Reason I asked is that REY have a massive +1 billion tonne potential thermal coal deposit but it has medium ash content. So it is fair to surmise it will not be suitable to steel making but should be ok for electricity generation (in Canning basin so will be shipped to India).




Bushman,

If you look through some of REY's data, try and find out if they have done any preliminary testing on the coal.  Apparently, rather important parameter (among several others) will be the mositure content, which is also related to the volatile content and naturally the energy released during combustion.  Coal with a moisture content above 15% would be of questionable quality.

Almost all thermal power stations are set up to accept coal of a specific blend, ie. a particular moisture and ash content, or else the coal can wreak havoc with equipment such as the injectors in the plant. So in terms of marketing and selling the product, it may require blending with other coals to reach a certain "composition" before export.

So this is quite a different scenario compared to talking about coking coal used for making steel.

Hope this helps.
jman


----------



## Bushman (30 June 2008)

jman2007 said:


> Bushman,
> 
> If you look through some of REY's data, try and find out if they have done any preliminary testing on the coal.  Apparently, rather important parameter (among several others) will be the mositure content, which is also related to the volatile content and naturally the energy released during combustion.  Coal with a moisture content above 15% would be of questionable quality.
> 
> ...





Hey Jman; 

Thanks for the reply my man. Great info. 

I have done some further reading on coal and note that the mettalurgical coal has attained these properties due to it being placed under greater pressure over the ages, further compressing the original plant matter. So it seems the older the deposit, the more likely it is to be of the black gold variety. A bit like a good red it seems 

Cheers
Pete aka Bushman


----------



## jtb (30 June 2008)

dj_420 said:


> Hey jtb
> 
> I am studying Distance Education at Macquarie Uni, go down to the Uni twice a semester for lab work. Its a lot of fun though, where do you work at?




Hey DJ,

I'm presently on a site where Griffin Energy are building two 208MW coal fired boilers.




So is it geology that your studying?

J


----------



## dj_420 (30 June 2008)

jtb said:


> Hey DJ,
> 
> I'm presently on a site where Griffin Energy are building two 208MW coal fired boilers.
> 
> ...




Yeah studying Exploration Geology and Geophysics majors. Want a job with the big boys when I have finished the degree.

Nice pic by the way jtb!


----------



## jtb (30 June 2008)

dj_420 said:


> Yeah studying Exploration Geology and Geophysics majors. Want a job with the big boys when I have finished the degree.




Good on ya mate, glad to hear it.

You'll soon be able to blind us with the glory of severely altered, igneous, intrusives then

If you ever get the opportunity to go underground, I recommend you take it too.Super cool to walk around in fresh rock and look at the formations and structures, particularly if you've spent some time sieving surface samples that have been pounded to smithereens.
Absolutely awesome when you can see native mineralisation.

Sometimes your geo-pick will also accidentally smack itself repeatedly into a show and when you get home theres gold in your shaving kit too 

Keep us updated

J


----------



## gazelle (2 July 2008)

Thanks for the extensive input everyone , interesting topic . 
Could  someone please help me establish a fundamental framework so that I can work towards a realistic valuation of a mining stock . 
I can appreciate there are alot of variables and cross market considerations involved in such an estimation so I will outline some figures and general estimates in the hope of learning a few things . 
The Company is based in Australia  and all of their operations are based in Australia as well . The Company is GLM and they have several active areas of exploration on the go , but the main project of interest is the iron ore project in Eastern Victoria of all places . Gulf have approx 148M units in stock and 7M in cash at time of writing . The initial estimate for their iron ore project was for 50M + tonnes of iron ore but since then the estimate has been upgraded towards 75M - 100M tonnes of ore . Their recent announcement indicates that significant massiive hematite and mixed hematite and magentic were revealed with samples from several outcrops in the range of 50 - 60% iron . 
Geophysical interpretation of the data collected and modelled so far indicates massive magnetite at surface which supports the volumes ( or the tonnages that have been reported previously )  I believe they need to do more geophyisical mapping and modelling work but the initial estimates do look quite interesting . NITON Fe % measure 41.63 55.44 up to 62.57% . There was a recent brokerage presentation and a projection of 210.00 per tonne was put fwd as an approximate figure . The director said it is early days yet but the results to date indicate the potential for several large iron ore deposits . 210.00 per tonne seems like a fairly high price but I guess with the high grade ore its a bit different from ( Chinese steel mills  paying US$171/t on the spot market for India's low-grade iron ore. They pay US$136/t for domestic Chinese ore which is also of a low grade ) from an article on ore prices . 
From my understanding Gulf are positioned very close to port and supporting infrastructure and I would be interested to know who pays the freight cost and how much it would work out to per metric tonne , I have seen estimates between 40 - 70.00 per metric tonne which would bring the figure back to 140 - 160 but even then after assaciated costs they could still be looking at 75 - 100M tonnes at 140.00 ( 140M ) and this constitutes only one arm of their operations . Any advice would be appreciated .


----------



## jman2007 (4 July 2008)

gazelle said:


> Thanks for the extensive input everyone , interesting topic. Could  someone please help me establish a fundamental framework so that I can work towards a realistic valuation of a mining stock .
> I can appreciate there are alot of variables and cross market considerations involved in such an estimation so I will outline some figures and general estimates in the hope of learning a few things.




Hi gazelle,

Glad you've found the thread useful, I'm not totally convinced this is the best thread for discussing the pros and cons of GLM vs other prospective iron ore companies, and I know there are a large number of threads dealing with valuations for mining stocks, but I can perhaps point you in the right direction.

I've never actually heard of this crowd before (doesn't mean the stock can't/wont perform over the long term ), they seem to have their fingers into a bit of everything... iron ore, gold, copper, uranium...the list is pretty extensive.   I would start by doing a very fundamental analysis on GLM; what kind of background do the senior guys have, are they geologists with experience in finding/developing the types of targets they're aiming for?..or are they predominantly businessmen who thought getting into mining, and jumping on the iron ore bandwagon might be fun?  

I've also noticed many of their releases are "share market" releases, meaning that they are designed to stimulate a disproprotionate level of interest compared to their content... a good example was the one on the 21/04 stating "Potential for 50 million tonnes of iron ore"...based on what?...some ground magnetics, chip samples and surface geological mapping... not on holes in the ground as far as I could see. 

Numbers based on "potential resources" can be very compelling, but in all honesty GLM will be a very long way from releasing a _resource_ for these targets, let alone progressing to production. That really is putting the cart before the horse at this stage imho. Follow this story though, once they start drilling this iron ore target, the market will have a much better idea of what to make of GLM. But a real speculator from what I can see so far...

Cheers
jman


----------



## GREENS (14 July 2008)

J-Man, derty, JTB or DJ, was just wondering if any of you geos would mind sharing your knowledge to help me answer some queries I have over nickel grades and in particular Kagara’s latest Lounge Lizard (nickel) resource release. 

They have stated that the resources includes approx 5.5m tonnes of ore grading 0.82% Ni and 263,000t grading 6.43% Ni, to give a total initial resources of 5.72m tonnes @ 1.08%. 

My question is this, considering Kagara opts to mine low cost resources would it be fair to suggest that investors should probably focus more on the massive sulphide section (i.e. 263,000t @ 6.43% = 16,900t contained nickel), and disregard the low grade section because this part of the resource will likely have considerably higher operating costs. That is they have included the low grade resource just to drive up their contained nickel resource and in turn attempted to make the announcement seem more impressive than it really is. Or is this lower grade resource still potentially valuable. Well I suppose that last question may depend on nickel prices? Any thoughts would be much appreciated. 

Also I’m not inferring that this is a bad announcement considering the resource is still open at depth and along strike, because the high grade section looks to potentially be one of the higher grade nickel sulphide mines going around if you take Western Areas NL presentation material to be accurate (pg 6 June 2008). 

Cheers in advance and keep up the good work, an excellent thread.


----------



## GREENS (29 July 2008)

Still no takers?


----------



## jman2007 (29 July 2008)

GREENS said:


> Still no takers?




Oh sorry Greens,

Your post just reminded me that I should have replied some time ago .

Do you know what the setting and depth of this resource is?.. as in an underground setting or a near-surface resource? The high-grade nickel sulfides have certainly helped bump up the overall grade. I guess the key question is at what grade the ore becomes uneconomic to extract. Has the company given any kind of indication as to a cutoff grade that they may apply to the resource?

I think Derty has experience in nickel.

Cheers
jman


----------



## GREENS (29 July 2008)

Jman your response is much appreciated and no probs for ignoring me over the past few weeks lol. When you give out information like you do, I’m sure I can wait my turn. Anyway here is the info I have gathered up. 

The resource is fairly deep underground at a depth ranging from approx 900m – 1300m and still open. The higher grade mineralisation seems to be towards the bottom of this range too.  

The resource is the down plunge extension of Western Areas flying fox ore bodies. Probably the main thing I am wondering is if the lower grade ore at such a great depth can be mined economically or whether one should just focus on the higher grade resource? However the lower grade intersections tend to be relatively thick which may help? 

This is what the company had to say in regards to the cut off grade. “The Lounge Lizard resource was calculated by cross sectioned polygonal estimation using a 0.40% Ni cut off grade on drill sections spaced 40 to 80 metres apart. Analytical results were from quarter core samples from 34 diamond drill holes”.  

 If it isn’t too much trouble would you mind explaining it in some plain English? I take that the cut off grade refers to the fact that any intersections which hit <0.40% nickel were not included in the resource? 

The company also stated on their website that the Lounge Lizard Nickel Project has the potential for delineation of both very high-grade massive sulphide nickel mineralisation and potentially, large tonnage disseminated mineralisation of around 1% nickel. Doesn’t the depth, width and final size of the deposit have to be taken into account first before this can be assessed? From my basic knowledge wouldn’t the deposit have to of considerable size to become a large tonnage underground mine? 

I’m a finance student and not a geologist so I’m kind of confused about all this now, so sorry for all the queries, as I looked further into it I was asking myself more and more questions which I could not answer.  

Thanks again. 

Cheers Greens


----------



## doogie_goes_off (29 July 2008)

Greens, 

IMHO the 0.4% cutoff grade looks to deep to be feasible, a 0.5% cutoff for near surface sulpide ore with a clean type of sulphide mineralogy (ie: no contaminants when treated) lets say at ~ 300m depth would always be valuable. Lets then look at mining widths, it pays to have 3m or so minimum for modern techniques although you can always mine lots of waste if the grades are >3% or so. 

It's just an opinion but there may be better potential due to infrastructure ie: already underground access from nearby deposits but not sure, most companies tell you "what you need to know" not what you actually need to make an accurate assesment of future potential.

Lower grade resources = higher risk due to lower margin. KZL always looked like a bit of a winner to me.


----------



## jman2007 (29 July 2008)

GREENS said:


> The resource is fairly deep underground at a depth ranging from approx 900m – 1300m and still open. The higher grade mineralisation seems to be towards the bottom of this range too.
> 
> This is what the company had to say in regards to the cut off grade. “The Lounge Lizard resource was calculated by cross sectioned polygonal estimation using a 0.40% Ni cut off grade on drill sections spaced 40 to 80 metres apart. Analytical results were from quarter core samples from 34 diamond drill holes”.
> 
> ...




Yeah that would be my interpretation of the cut off parameters Greens, they would have come up with some kind of hypothetical "mineralised envelope" for the ore by wire framing the drill hole data together, or something similar. Sorry I'm not really sure whether the 0.40% cut off figure is realistic at this depth. 40-80m hole spacing?... they'll probably have to infill these gaps at some stage. Are they drilling these from surface?... that's a lot of meters, DDH's usually cost about $180-200 per meter. I've never seen such ridiculous long names for hole id's...hole "LFPD25W2W1W1W2"...wtf??!!

I would however be paying close attention to the discussions between KZL and WSA re access and use of the decline in the adjoining WSA tenement. KZL seem to have adopted a bit of a lofty attitude in terms of assuming that they will have access rights if the decline has sufficient haulage capacity, and that they will merely need to reimburse WSA on a pro-rata basis. The decline is currently still at least 400m above Lounge Lizard.

Lounge Lizard would need to have some sort of Reserve status before WSA would become to the table, that is, proven economic viability, which it does not have at the moment. So that means KZL will in all likelihood be required to pump more DDHs into it to try and get some Reserves out of it, obviously requiring more capital. It will be interesting to see how a high-tonnage/low grade(?) Ni operation from Lounge Lizard could utilise the same decline that WSA will be using for their flying fox orebody, given that WSA will also be ramping up production, and mining the T1, T4 and T5 deposits! 

So potentially a bit of project risk here, I wonder if WSA are sitting there shaking their heads wondering how the heck they're going to schedule their ore haulage if Lounge Lizard starts up?

jman


----------



## GREENS (30 July 2008)

Cheers DGO and Jman, a really big help. 



doogie_goes_off said:


> Greens,
> 
> IMHO the 0.4% cutoff grade looks to deep to be feasible, a 0.5% cutoff for near surface sulpide ore with a clean type of sulphide mineralogy (ie: no contaminants when treated) lets say at ~ 300m depth would always be valuable. Lets then look at mining widths, it pays to have 3m or so minimum for modern techniques although you can always mine lots of waste if the grades are >3% or so.
> 
> ...




Sorry Doogie would you mind elaborating on this a little more. A lot of the low grade intersections range from around 7m up to around 65m in width. 

So what you are saying is that as the deposit deepens, the grade and width of the ore body must get increasingly larger for mining to be feasible?  That is the width can remain relatively thin but grades are high, grades are relatively low but mineralisation is thick or preferably mineralisation is thick and grades are high. Yeh that last point I think was important; lower grades = lower cost operations, holding everything else constant. 




jman2007 said:


> Are they drilling these from surface?... that's a lot of meters, DDH's usually cost about $180-200 per meter. I've never seen such ridiculous long names for hole id's...hole "LFPD25W2W1W1W2"...wtf??!!
> 
> I would however be paying close attention to the discussions between KZL and WSA re access and use of the decline in the adjoining WSA tenement.
> 
> ...




Ha, tell me about it, they must have be smoking something when making those names up for drill holes just to play with shareholders minds, quite funny really. When they release new dill results it’s nearly impossible to find where bouts they are on the diagram. They were saying they have contracted an extra rig to help with infill drilling and as far as I know they are drilling from the ground. Probably going to be an expensive program by the way you were going on in your above post? 

I have been paying very close attention to decline discussions between KZL and WSA. I agree that Kagara seems to be a bit overconfident in gaining open access to WSA’s decline. Isn’t WSA also building a shaft for further transport of ore to surface to increase output? So I couldn’t see how Kagara would be able to gain access for large haulage let alone small amounts of haulage?  But I think WSA may use this to its advantage in trying to pick up the lounge lizard asset on the cheap. 

But in the end I had assumed that it would probably be likely that KZL would sell this project to WSA or another miner at some future point in time if it meets its target of least 200,000 - 300,00t of contained nickel @ LL (as with the companies previous guidance). Considering the proven prospectively of the Forrestania Greenstone Belt for high grade nickel sulphide deposits, I wouldn’t be surprised if another suitor comes along. I think a lot of the majors will be keeping a close on KZL’s progress at LL and other regional targets, and if they have anywhere near the success of WSA’s exploration program thus far, they will jump at the chance to purchase high quality and potentially low cost nickel sulphide assets (As from what I’ve read this area seems to hold some of the highest grade nickel deposits in the world, please correct me if wrong). Of course if none of the majors wanted a piece of the action then LL would be sold off to WSA at a pretty hefty discount I would imagine. But most majors seem to be bullish on nickel. 

Thanks again, top job, keep it up!


----------



## derty (30 July 2008)

Hi Green, sorry for not noticing this earlier, have been flat out lately. I concur with most of what has been said by jman and doogie. It appears that KZL have quite a bit of work ahead and several ducks to get in a row before Lounge Lizard is a goer. 

It would be highly unlikely that the low grade Ni would be mined at that depth. When you are trucking ore from 1km+ underground grade is king and if there is decline space available for KZL I doubt there would be space for the volume of underground traffic required for a bulk mining operation. 

Yes, as jman confirmed, the cut-off of 0.4% Ni refers to the lowest assay values that lie within the geologically continuous envelope used for the resource calculations. Interestingly, disseminated Ni mineralisation will almost certainly be hosted within high MgO ultramafic rock that will have a silicate Ni content of 0.2-0.3% Ni. This would mean that the sulphide or extractable Ni at the cut-off grade would be 0.2% at best. 

It is a resource calculation so you are really trying to just determine how much metal you have there. I am surprised that a polygonal estimate was used, it is generally the poorest of the estimation methods. I don't know why they just didn't do an interpolation using kriging or an inverse distance method. Nickel sulphides, especially massive sulphides, often pinch and swell over short distances and as such a 40-80m drill spacing would usually not be sufficient to give a robust estimate (you could miss some Ni orebodies at that spacing!). KZL have the luxury of having had WSA drill out several surfaces within the same system and as such KZL should have a good idea of the continuity of mineralisation in the system. 

Drilling to that depth would be terribly expensive and would probably average quite a bit more that $200/m. As such it wouldn't be cost effective to drill Lounge Lizard to a spacing to allow a reserve to be calculated fro the surface. You would just what to know with a certain degree of coonfidence that there is enough metal there to warrant the risk of getting down there to have a better look. Once the decline is down far enough they would most likely mine a drill drive across adjacent and above LL and drill a tighter spacing from underground.

The hole id of LFPD25W2W1W1W2 looks crazy but to cut the costs of drill testing very deep targets multiple holes are drilled off the one parent hole to allow multiple pierce points into the orebody. A common way of starting a daughter hole is to place a metal wedge right up in the parent hole. The wedge deviates the drill bit into the wall of the hole and starts a new (daughter hole). So the hole id of LFPD25W2W1W1W2 actually means the second wedge off the first wedge off the first wedge off the second wedge off LFPD25


----------



## GREENS (30 July 2008)

Many thanks derty, a very good post.  

Ha, so you’re telling me they actually had a reason for those long drill hole names and it wasn’t just to play with readers minds.

Thanks again. Absolutely fantastic work by all three of you, which has really helped clear up my queries.


----------



## Bushman (30 July 2008)

Does anyone have any experience with marine phosphate deposits? 

Does it mean that the deposit is contained within the rock of the sea bed and will need to be mined to be extracted or is it lying on top of the sea floor?  

I do not particularly want to invest in anyone proposing a dredging operation so I would be interested in the geology of such deposits.


----------



## prawn_86 (30 July 2008)

Bushman said:


> Does anyone have any experience with marine phosphate deposits?
> 
> Does it mean that the deposit is contained within the rock of the sea bed and will need to be mined to be extracted or is it lying on top of the sea floor?
> 
> I do not particularly want to invest in anyone proposing a dredging operation so I would be interested in the geology of such deposits.




i think i know the co you are talking about and i cant see why anyone would invest in marine phosphate instead of normal above ground.

Seems novelty factor to me...


----------



## doogie_goes_off (30 July 2008)

For simplicity I would stick with onshore producers. Low risk, nice returns at current prices and no start up cost. Anyway 15% P2O5 is a historical minimum grade target and now that seems to be very viable so as long as capex and opex are low ie close to port and existing road/rail then some of the juniors are likely to be in a good position to compete for markets with the massive demand - after all there are more than 6 billion of us to feed.


----------



## jman2007 (30 July 2008)

derty said:


> The hole id of LFPD25W2W1W1W2 looks crazy but to cut the costs of drill testing very deep targets multiple holes are drilled off the one parent hole to allow multiple pierce points into the orebody. A common way of starting a daughter hole is to place a metal wedge right up in the parent hole. The wedge deviates the drill bit into the wall of the hole and starts a new (daughter hole). So the hole id of LFPD25W2W1W1W2 actually means the second wedge off the first wedge off the first wedge off the second wedge off LFPD25




Well I never,

Just goes to show us exploration types don't get to drill many of these types of holes . You can learn something new every day! 

So a long way to go for LL really by the sounds of it, I agree, drilling from surface for Reserve definition almost certainly not an option at this stage. 

jman


----------



## prawn_86 (13 August 2008)

Hello to all our resident Geos,

My question is along the lines of tailing and extracting gold, uranium etc from them.

MLI is planning on doing that, here is an extract from a recent media report (not from the co itself):



> So what lies ahead? Mintails is about to start recovering gold, uranium and possibly sulphuric acid from tailings left by previous operations on its African properties. It has a large resource base and plenty of plant and equipment, thanks to the merger with Skeat Gold which meant it owns one of the largest fleets of trucks, cranes, bulldozers, construction and earthmoving equipment in Africa. The 100 per cent owned West Rand Gold and Uranium Operation (WERGO) is likely to commence production in January 2009, ahead of schedule, at an initial rate of 60,000 ounces of gold. Later on next year, production should increase to a rate of 150,000 ounces of gold with some uranium possibly thrown in too, although some complications that uranium production is likely to add to the circuit still have to be ironed out. A modest amount of gold is already being produced at Mogale, but the importance of this operation is simply that it provides useful proof of principle for the bigger project.




I guess my questions are:

How easy is it to extract the desired minerals?
Is this figure realistic?
What sort of costs does an operation like this use?
Are there any other 'producers' out there operating solely on tailings?

Any info would be appreciated

Thanks guys


----------



## derty (13 August 2008)

It certainly have been done before, a lot of the old tailings dumps in Kalgoorlie were reprocessed as were some in Norseman. The older processing techniques could not extract gold to the level we can today and as a result significant gold can be won from these old tails. Costs are quite cheap as there is no hard rock mining to do or crushing and grinding, you just dig the stuff up and disaggregate it if needed. 

This question is really best answered in detail by a metallurgist. The reason why the original gold was not won also has to be ascertained, was it merely due to the original technique having a low recovery or is there refractory gold there as well.


----------



## prawn_86 (13 August 2008)

Thanks Derty.

Know any metallurgists?

MLI have a 'proof of concept' plant at one of their operations which during the last quarter produced 4916oz of Au from 479000 tonnes. This equates to 97 tonnes throughput per ounce, but i know at their other project they are expecting 200 tonnes throughput per oz. Do these figures sound right? Or does every plant vary for this sort of stuff?

I will go back through their books and try to find costs, but they didnt explicity state what the cost per oz was unfortunately


----------



## jman2007 (14 August 2008)

prawn_86 said:


> Thanks Derty.
> 
> Know any metallurgists?
> 
> ...




Yep,

as derty mentioned, if the tailings are non-refractory then production costs are lowered as is it will be pretty much free-milling material. I've conducted a few grade control drilling programmes in old battery sand/tailings stockpiles. Apparently with some of the old stamping mills, it wasn't uncommon for a head to "crack", and basically spew gold out into the tailings, so sometimes a thin layer of high-grade is also associated with this material. 

4916oz from 47900t equates to a headgrade of around 3.15g/t, so quite acceptable. Plants can also afford to lower their cutoff grade if they have a larger throughput per annum as well, I think our cutoff grade at 1.5mtpa is about 0.85g/t, but for a 3mtpa mill, this could be lowered to say, 0.6g/t or so... sort've a metallurgical area though. And no, I don't know that many mets either! :

jman


----------



## Spaghetti (14 August 2008)

Well not sure if my question is geology or chemistry but will give it a try. Trying to sort out real hopefuls from the hype in iron ore sector. Hype just does not pay like it used to!

Was reading an article that said most iron ore in WA will never be mined due to high P% and that it is needed to be significantly less than 1%. Now I could understand "less than" but "significantly" isn't really helpful. Anyone know an actually level that is acceptable. Like .09% or .08%. Same article said same for sulpur yet sulpur levels not included on reserve tables.?

Also was reading a thread here regarding a stock that has high grade ore but was mentioned the high silica level would present problems. Again can anyone assist is acceptable levels of silica.

This article is a great read and leads you in the right direction except not very specific in terms of % for impurities.
http://www.doir.wa.gov.au/documents/GSWA_IronOreInWAPamphlet.pdf

Thanks in advance if anyone can assist.


----------



## prawn_86 (14 August 2008)

Cheers Jman,

MLIs ERGO plant is scheduled to come online this October and they are palling for phase 1 to put through 15mt of tailings per year, for an estimated recovery of 75000 oz.

Im not sure how you worked out the g/t, but does that figure seem acceptable? Their current tailings reserves are 300k oz measured and inferred at .55g/t and 1872k oz at .42oz.

These grades seem very low to me, but as you guys have said, there is no digging or mining to be done, so really its just how well they can process it. Am i on the right track with that comment?


----------



## jman2007 (14 August 2008)

prawn_86 said:


> Cheers Jman,
> 
> MLIs ERGO plant is scheduled to come online this October and they are palling for phase 1 to put through 15mt of tailings per year, for an estimated recovery of 75000 oz.
> 
> ...




Yep your absolutely right prawn, 

I screwed the calculation up. Should be around 0.32g/t....

The main costs involved here would probably be just the reagent costs incurred by the mill, and any potential haulage costs in getting the tailings to the ROM pad, which hopefully isn't more than a few km's.

jman


----------



## lazyfish (14 August 2008)

Hey guys,

I figured this would be the best place to ask this question, since I can't find any related info online. Is it possible for someone with mild asthma to work as a mining geologist or exploration geologist at all?

Thanks


----------



## derty (15 August 2008)

I cannot see why not lazyfish, the main irritants in the job would be dust or fumes. Due to Occ Health and Safety issues dust is usually suppressed while surface drilling or in open cut mines. In underground mines there may be some dust when bogging out recently fired headings or stopes, though the miners usually try and water down the dirt quite well before hand. While ventilation underground is usually adequate, diesel fumes can become quite noticeable in areas where there is a bit of activity and a geo will use quite a bit of spray paint underground with the airborne atomised paint being very irritating, even for a non-asthmatic. 

I'm sure there are many asthmatic geo's about and there are plenty of jobs within geology that would be as hazardous as a standard office job in a city.  An exploration geo would have the least exposure to dust other than air based drilling (RC, aircore or RAB). If you are at a rig creating a lot of dust you can move or better still as you are managing the drilling program  enforce that they use dust suppression (water based is the best) or improve the dust suppression they have.

At the end of the day it depends on what triggers the asthma.


----------



## Whiskers (15 August 2008)

Iv'e got one for a geo. I've been noticing Magnesium Oxide (MgO) referred to often in relation to nickel resources.

Is the MgO troublesome in extracting the nickel and can the magnesium be seperated as a saleable product as well?


----------



## lazyfish (15 August 2008)

derty said:


> I cannot see why not lazyfish, the main irritants in the job would be dust or fumes. Due to Occ Health and Safety issues dust is usually suppressed while surface drilling or in open cut mines. In underground mines there may be some dust when bogging out recently fired headings or stopes, though the miners usually try and water down the dirt quite well before hand. While ventilation underground is usually adequate, diesel fumes can become quite noticeable in areas where there is a bit of activity and a geo will use quite a bit of spray paint underground with the airborne atomised paint being very irritating, even for a non-asthmatic.
> 
> I'm sure there are many asthmatic geo's about and there are plenty of jobs within geology that would be as hazardous as a standard office job in a city.  An exploration geo would have the least exposure to dust other than air based drilling (RC, aircore or RAB). If you are at a rig creating a lot of dust you can move or better still as you are managing the drilling program  enforce that they use dust suppression (water based is the best) or improve the dust suppression they have.
> 
> At the end of the day it depends on what triggers the asthma.




Thanks, that's really good to know


----------



## derty (15 August 2008)

Whiskers said:


> Iv'e got one for a geo. I've been noticing Magnesium Oxide (MgO) referred to often in relation to nickel resources.
> 
> Is the MgO troublesome in extracting the nickel and can the magnesium be seperated as a saleable product as well?



When MgO values are talked about with respect to nickel sulphides it is usually as smelters require a certain MgO:FeO ratio as high MgO concentrates cause problems within the smelter. The higher the MgO the higher the temperatures required to sufficiently melt the product which increases energy costs and can damage the furnace. 

Now a bit of background:
Nickel sulphides occur within komatiite, a very high MgO% ancient volcanic rock that erupted at temperatures in excess of 1600 degrees C. The first minerals to crystallise from the lava are olivine (MgSiO4) at 1600 C, giving you an indication as to what temperatures are needed to remelt the stuff. The original rocks have been altered in all that time and there is no olivine left now, it has been replaced by either serpentine (Mg silcate) or talc (Mg silicate)+magnesite(Mg carbonate). Either way the MgO is still there.

With the nickel sulphide ore types you have two end members. Massive Ni sulphides (eg Kambalda/Black Swan) where you have >80% sulphide and <20% silicate material and disseminated Ni sulphides where the sulphide content is often <5% with the remainder being high MgO silicate material (eg Mt Keith with MgO% often >50%). Typically the concentrates produced from disseminated sulphides will have a high MgO:FeO and those from massive sulphides will have a low MgO:FeO. 

The trick then is to blend your high MgO and low MgO concentrates. The low MgO:FeO concentrate from Kambalda is crucial to the BHP Kalgoorlie smelter to offset the Mt Keith and Leinster concentrates. The MgO can also be diluted by addition of silica or other barren sulphides.

As for using the Mg as a by product: The Mg% in analysis is typically quoted as an oxide i.e. MgO, though in actual fact it is present as a complex silicate and would not be economic to extract in comparison to MgCO3 (magnesite) which is the main source of Mg.


----------



## Whiskers (15 August 2008)

Thanks for that derty. 

I did find some highly technical stuff on the subject, but the language was way over my head to understand much out of it. 

You have explained it well in relatively simple language. Answered my query nicely, thanks again.


----------



## jman2007 (15 August 2008)

derty said:


> Now a bit of background:
> Nickel sulphides occur within komatiite, a very high MgO% ancient volcanic rock that erupted at temperatures in excess of 1600 degrees C. The first minerals to crystallise from the lava are olivine (MgSiO4) at 1600 C, giving you an indication as to what temperatures are needed to remelt the stuff. The original rocks have been altered in all that time and there is no olivine left now, it has been replaced by either serpentine (Mg silcate) or talc (Mg silicate)+magnesite(Mg carbonate). Either way the MgO is still there.




Great info here derty,

I am also learning a lot about nickel as well!

jman


----------



## jman2007 (15 August 2008)

Spaghetti said:


> Well not sure if my question is geology or chemistry but will give it a try. Trying to sort out real hopefuls from the hype in iron ore sector. Hype just does not pay like it used to!
> 
> Was reading an article that said most iron ore in WA will never be mined due to high P% and that it is needed to be significantly less than 1%. Now I could understand "less than" but "significantly" isn't really helpful. Anyone know an actually level that is acceptable. Like .09% or .08%. Same article said same for sulpur yet sulpur levels not included on reserve tables.?
> 
> ...




Hi Spag,

Anyone here got the lowdown on acceptable levels of impurities for bulk commodities like iron ore, so we answer Spaghetti's question?

The P-issue is an interesting one. I know AXO who are developing the Balla- Balla magnetite project are conducting metallurgical testwork on material in the hanging wall of the deposit for phosphate potential. But this does sound more like an adjacent body of potentially economic mineralisation, rather than an actual "impurity" in the magnetite itself.

So I wonder where the cutoff is between an "impurity" and an economically extractable by-product?

Will have a read of the link and get back to you.

jman


----------



## Spaghetti (20 August 2008)

Hi Jman

Though still confused have learned a little more. Have read sulphur is easily removed via benefication so would only be an issue for DSO, but then it would not be called DSO ! So I have no concern on sulphur based on the little I know.

Phosphorus as I understand, is difficult to separate so low content preferable to begin with. I did read a thesis type of report after google, on separation of phosphorus using flotation tank (sounding like base metals here) on low fe content magnetite ore but was in science speak and obviously research level, so like a few kilometres over my head. Would be good is they developed a way and we knew which deposits would then be a goer. Always handy to know these things  Seems any effective removal of phosphorus leads to high rate of fe loss as well.

You would never believe but after 5,000 google searches the only acceptable level of phosphorus impurity even mentioned came by way of a aussie stock forum post dating back to way back on YML thread,  comment from Kauri who suggested .08%. Why google when the answers are here all along 

Silica levels still stump me, seem to depend on whether ore is destined to be iron or steel end product. Also sintering may remove silica from fines or perhaps I have no idea what I am talking about. More than likely, all very interesting and complex though.


----------



## lazyfish (29 August 2008)

Hi guys,

Back for more questions. I have applied for a summer job with a mining company as a mining geologist (student). They operate open pit mines. They are sending me for a medical exam. Could anyone please tell me what this exam is all about?

Thanks in advance!


----------



## Spaghetti (30 August 2008)

Just an update of phosphorus levels of iron ore from Ferraus report 2007, nt sure if demand has changed acceptable levels or not over time or of processing techniques have improved.

http://www.abnnewswire.net/press/en/35200/FERRAUS-LIMITED.html



> Phosphorus content of the iron mineralisation is generally low-moderate (0.06-0.11%P), while limited areas with high phosphorus contents (>0.12%P) are seen associated with increased hydration and manganese. Penfold Limited, a marketing company and major FerrAus shareholder, has confirmed with Asian steel mills that iron ore products containing 0.08- 0.12%P are acceptable and remain in demand as blending feedstocks. The level of other contaminant elements (Al2O3, SiO2, Mn, S) were also confirmed as acceptable




So less than .08 for stand alone saleable product (dependant of course on other factors) and upto .12 for blending feedstock which I gather would attract a price penalty.


----------



## mrgroundwork (30 August 2008)

lazyfish said:


> Hi guys,
> 
> Back for more questions. I have applied for a summer job with a mining company as a mining geologist (student). They operate open pit mines. They are sending me for a medical exam. Could anyone please tell me what this exam is all about?
> 
> Thanks in advance!




same as any medical... a company doesnt want to invest significant amounts of money in your development if you have any sort of health issues preventing them from reaping returns on their investment...

the mining companies seem to be pretty hot on the drug screening as well... they dont want any cowboys out on the mine sites... hope youve been staying off the googs during your uni days


----------



## Bushman (24 February 2010)

Hey geologists - can anyone give me an explanation of what a 'strip ratio' is i.e. what is a high strip ratio and what is a low strip ratio? 

From my basic understanding of the term, there is a correlation between the strip ratio and the mining cost?


----------



## lazyfish (16 April 2010)

Bushman said:


> Hey geologists - can anyone give me an explanation of what a 'strip ratio' is i.e. what is a high strip ratio and what is a low strip ratio?
> 
> From my basic understanding of the term, there is a correlation between the strip ratio and the mining cost?




Strip ratio is the number of tonnes of waste that needs to be removed in order to extra one tonne of ore. For example superpit has a strip ratio somewhere between 6 and 7 meaning that every truckload of ore comes with 6-7 truckload of waste. I don't know what is a low strip ratio, it depends on the commodity and grade as well I guess.

Therefore there is a direct relationship between strip ratio and mining cost.


----------



## Pythagerous (28 April 2010)

G'day All

I have been following an Iron Ore company, and I am just wanting to learn a bit more about the drilling process and then defining the resource and converting into JORC.

I am particular interested to learn more about the different stages in the process, from drilling it out, to testing the drill samples, to converting it to JORC. I am also having trouble trying to understand where all the following terms come into it "Indicated", "Inferred" "Converting Resources to Reserves" etc.

Any basic information on the process for a simpleton like me, would be much appreciated.


----------



## derty (28 April 2010)

Pythagerous, if you check post #3 in this thread by jman it is a good introduction into JORC and the different resource and reserve classifications. 

Also have a look here for detailed JORC info: http://www.jorc.org/

This link gives a good run-through of generic exploration processes: http://en.wikipedia.org/wiki/Mineral_exploration

Also if you have a read of this thread from go-to-whoa you will answer quite a few of your questions and probably quite few unasked ones too


----------



## Bushman (2 July 2010)

Good description of the potential of VMS districts i.e. VMS deposits within the Bryah Basin (hosts SFR's DeGrussa).

'D. F. Sangster from the Geological Survey of Canada conducted a study on eight precedent VMS districts in Canada and Japan. His findings include ¹:The VMS districts studied contain between 4 and 20 deposits, with an average of 12 deposits. The average total base metal content per district is 5.4 million tonnes. In order of size, the largest deposit in each district contains, on average, 65% of the total metal and the second largest about 13%.'


----------



## Bushman (7 June 2013)

Bump ... as per my earlier post. Some good stuff on here. chrs


----------

