Volume 10, No. 4 (October 2001) - Published July 11, 2003

PAPERS

Gold Deposits, Exploration Realities, and the Unsustainability of Very Large Gold Producers
H.R. Bullis

Abstract — This paper discusses what appears to be a flaw in the current belief, widely held within the gold mining industry and investment community, that the creation of ever-larger gold mining companies is desirable for mining companies and investors alike. The basis of the flaw is in the underlying assumption that very large gold producers can discover or acquire new gold deposits of the size necessary to replace extracted reserves on a year-on-year basis over the intermediate to long term (i.e., five to ten years and longer). As it will be noted in this paper, deposits of the size required to replace annual production of very large gold producers (VLGPs) are relatively few in number. Although discoveries of new gold deposits continue to be made, they are predominantly in the 0.5 to 2.0 million ounce range. Data represented here suggest that, although gold production from individual VLGPs continues to increase, the change is due to merging or acquiring other companies or projects with similar reserve life profiles. Therefore, the reserve life profiles of VLGPs have remained flat or have decreased. The paper will note recent changes in the industry and the remarkable increase in gold production reported by individual mining companies over the past several years. It will provide an overview of the geographical and geological distribution of known gold deposits and the range of deposit sizes. Finally, the paper will discuss the challenges that face large gold producers in replenishing their reserves that are being depleted at an ever-increasing rate. Unless otherwise stated, all production and reserve data have been taken from company documents in the public domain or publicly available information.
© 2003 Canadian Institute of Mining, Metallurgy and Petroleum. All rights reserved.

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Quality Assurance/Quality Control (QA/QC) for Resource Estimation at Inco Technical Services Limited
Christopher R. Davis, J. Michael Anderson, Olivier Tavchandjian and Lawrence B. Cochrane

Abstract — Resource modelling is a complex process involving different specialists with relevant experience using a multi-disciplinary approach and the best available technology and reviews by independent auditors. The reliability of the final resource estimate is highly dependent on the quality control exercised at each stage of the process. At each step in the resource modelling process it is necessary to define the specific objectives, the methodology proposed to achieve those objectives and to establish a set of checks and validation tools to assess the effectiveness of the proposed methodology. Designation of responsibility and authority for meeting these objectives must also be clearly identified. External audits must also be incorporated to review and validate the implementation of new procedures. Resource modelling is the basis for any economic appraisal of a mining project and includes a number of steps from data acquisition and validation to resource reporting, classification, and risk analysis.
© 2003 Canadian Institute of Mining, Metallurgy and Petroleum. All rights reserved.

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The Calculation and Use of Sulfide Metal Contents in the Study of Magmatic Ore Deposits: A Methodological Analysis
Andrew Kerr

Abstract — The base-metal and PGE contents of samples from magmatic sulfide mineralization are commonly correlated with their sulfide contents, indicating that the metal contents of bulk sulfides remain approximately constant within a given prospect or part thereof. Calculated sulfide metal contents provide valuable information in mineral exploration and research, but there are few formal descriptions and analyses of the procedures. Sulfide metal contents are best calculated using an assumed value (35.7% S) for a typical pyrrhotite-chalcopyrite-pentlandite mixture, and there appears to be little advantage in accounting for sulfide species separately. Regression of metal data against sulfur is probably the most rigorous approach, but is not always practical. Above 10% S, calculations are very robust, but lower sulfide contents generally demand at least some correction for non-sulfide-hosted metals. Such corrections can become significant below 5% S, and/or in olivine-rich samples. They are best accomplished by mass-balance calculations, using concentration data from unmineralized host rocks. Significant uncertainties are introduced by analytical errors for sulfur, base-metals, and PGE, which are commonly measured from separate sample aliquots. These combined errors in sulfide metal contents generally exceed ±10%, but expand further at low S contents. In general, treatment of data from samples containing <2.5% S must be approached with caution, especially for PGE, for which the exact host minerals may not be known. Application of the method in simple grade-potential assessment is straightforward, but research studies involving sulfide-poor samples are inherently more complex. Under-correction or over-correction of data for non-sulfide-hosted metals can lead to false negative or positive correlations between sulfide metal contents and sulfide content. As the latter may itself be linked to geological parameters, such as depth within an intrusive body, undue significance could be ascribed to such trends. There are also valid geological reasons for such correlations, and such data require careful assessment to separate true and artificial variations. Propagated analytical uncertainties increase significantly in sulfide-poor samples, and must also be borne in mind whenever data from different localities or units are compared and contrasted.
© 2003 Canadian Institute of Mining, Metallurgy and Petroleum. All rights reserved.

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The Occurrence of High-grade Gold Pockets in Quartz Reefs at the Gwynfynydd Mine, Wales, United Kingdom: A Geological Explanation for the Nugget Effect
Ian M. Platten and Simon C. Dominy

Abstract — Gold-bearing quartz reefs commonly show extremely erratic and unpredictable grade variation, although gross geological continuity may be good. This type of variation is often described as being nuggety or having a high nugget effect and can be measured quantitatively using the semi-variogram. Understanding of geological features such as reef texture and structure will provide improved models for the interpretation of assay data, drill core descriptions, etc. In this paper, a case study from the quartz-hosted gold occurrences in the Gwynfynydd mine, United Kingdom, is described. The work provides a starting point for models of lateral variation and demonstrates the types of structural and textural features that may be sought to give clues to the prediction of gold distribution in similar deposits. Gold deposition at Gwynfynydd is primarily associated with the reef footwall. The host veins form a discrete group of structures that may have been emplaced early in the sequence of quartz veins forming the reef. This potentially exposes them to a maximum number of dissection events during repeat dilations of the lode. Gold was deposited in the local porosity at extreme concentrations, equivalent to kg/t grades, when the host fissure had become filled with a porous framework of crystalline quartz and sulfides. Distribution of porosity varied laterally along the vein as the result of the formation of clump-like growths of minerals from the vein walls. The growth style is relevant to the distribution of gold although it may not be relevant to the occurrence of gold in a particular vein. The preservation of pores with some connectivity late in the vein fill sequence may be important in permitting continued but slow fluid flows. This facilitates effective fluid reaction with wall rock-derived methane, thus changing the relative rates of gold and quartz deposition in favor of gold. The textural studies explain the first-order control of nugget distribution at Gwynfynydd but do not allow for prediction and optimization of the resource estimation process. This is principally because of the very low geological continuity and poor predictability of the high-grade pockets. Nonetheless, the work does provide a clear geological explanation for the erratic nature of the gold. It indicates textures and structures that can be used to determine geological continuity of the gold-bearing elements within the gross reef envelope.
© 2003 Canadian Institute of Mining, Metallurgy and Petroleum. All rights reserved.

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Extended Weights-of-Evidence Modelling for Predictive Mapping of Base Metal Deposit Potential in Aravalli Province, Western India
Alok Porwal, E.J.M. Carranza and M. Hale

Abstract — Approaches to mineral potential mapping based on weights of evidence generally use binary maps, whereas, real-world geospatial data are mostly multi-class in nature. The consequent reclassification of multi-class maps into binary maps is a simplification that might result in a loss of information. This paper describes results of using multi-class evidential maps in an extended weights-of-evidence model vis-à-vis results of using binary evidential maps in a simple-weights-of-evidence model. The study area in the south-central part of Aravalli province (western India) hosts a number of SEDEX-type base metal deposits in Proterozoic supracrustal rocks. Recognition criteria for base metal deposits were represented as both multi-class and binary evidential maps. The known mineral deposits were divided into two subsets, viz., the training and the validation subsets. The training subset was used to calculate, for the evidential maps, the weights, contrasts, and posterior probabilities and their variances. The distributions of expected frequencies of base metal deposits estimated from the posterior probabilities and the observed frequencies were compared using standard goodness-of-fit tests to verify conditional independence of the input evidential maps. The posterior probabilities from both the models were mapped and interpreted to classify the study area into zones favorable, permissive, and non-permissive for base metal deposit occurrence. As compared to the simple weights-of-evidence model, the extended weights-of-evidence model results in more robust and finely differentiated posterior probabilities in favorable and permissive zones and has a better prediction rate. The results also reveal that the statistical properties of the weights of evidence, the contrasts, and the posterior probabilities are not significantly degenerated by using multi-class evidential maps in weights-of-evidence modelling.
© 2003 Canadian Institute of Mining, Metallurgy and Petroleum. All rights reserved.

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