Ann: Cobalt and Gold Drilling Re-Starts at Sara Alicia, page-25

The most exciting news from a mining exploration stock is a high-grade drilling result. But what constitutes a good assay? It varies from situation to situation and commodity to commodity. Listed below is some rule of thumb information on interpreting drill results for investors.​

The first thing investors must under-stand is that high-grade mineralization is relative to the depth of the intersection and relative to the size of the intersection. Today’s mining technology allows mining on a vast scale, with large open pits and huge 200-tonne mining trucks capable of processing large volumes of ore at a low cost. This is possible, provided the zone is near surface and the ore zone is large enough to be mined in bulk. Open pits are generally less than 300 metres deep and are several hundred metres in diameter.​

Two questions to ask are:​

• Is the zone less than 300 metres deep?​

• Is the drill intercept over 100 metres thick?​

If both of these questions can be answered ‘yes’, then the threshold for what constitutes ‘high-grade’ will be dramatically lower. As a rule of thumb, open pit mining can process ore for $10 per tonne and, where the ore grade is more than double that at $20 per tonne, results would be economic. Consider that 1% of a metric tonne is 22 pounds. Then, for a commodity worth about $1 per pound such as zinc, 1% zinc worth $22 per tonne becomes interesting. Grades triple that, worth $66 per tonne when less than 300 metres deep and more than 100 metres thick, would be considered high-grade.​

Using the same dollar figures for mining, but considering other commodities, here are some high-grade intercepts for other commodities and a few recent examples....​

GOLD: It is usually reported in grams per tonne (or g/t), although sometimes, in the US, it is in oz/ton. A gram of gold is worth about $25 [article dated March 2017, Au price has increased since then the spot price is now $42, pre ounce is $13130] , so 2 grams or better would be viewed as high-grade for bulk tonnage mining. One hundred metres of good grade is again good criteria for thickness.​

As a spectacular example, Aurelian Resources announced intercepts of 216 metres grading 12.8 grams gold/tonne from its Fruta Del Norte deposit in Ecuador, now owned by Lundin Gold. This result is truly exceptional in terms of grade and thickness, and propelled the stock from $2 to over $22 in 2006. However, this extreme grade and thickness only comes along once every 10 years or so.​

http://www.mining.com/web/making-the-grade-understanding-exploration-results/​

So we have close to the surface gold....wide enough and with the lower costs in Mexico improving the feasibility...

In the recent video Tony said the aggregate of Au/Co (on that 26 metre hit I think) for Sara Alicia was equivalent to a pure gold grade of 120g/t!​

Yes. This is equivalent to 3,85 oz of gold per tonne. Impressive!

I'm excited about the next drill results...can't wait!