Geologists discussion thread!

GREENS said:

Still no takers?

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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

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

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.

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”.

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?

Cheers Greens

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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

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.


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

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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.

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

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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!

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

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.

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.

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.

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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...

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.

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

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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

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.

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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

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.

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

prawn_86 said:

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

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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

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.

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?

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.

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?

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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

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

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.