Tuesday, September 21, 2010

Some thoughts – 2P Reserves

We officially have 1.135M ounces in 2P Reserves for Lamaque, as an official 43-101 figure. I don`t know when Century will be in a position to revise that number. I am not in a position to know with any level of certainty if any changes will be material enough to make a difference.

Nevertheless, basic logic would suggest that we are mining with an unofficial 2P count that is above that total:


1) Bedard Dyke:

That 43-101 total only includes 21K ounces for Sigma West. The Sigma West area is essentially the same general area as the Bedard Dyke. It is not clear if any of those 21K SW ounces represent BD. There were only 3 BD drill holes at the time the last 43-101 report was generated. As such, BD was likely not represented much (if at all) in the 2P category of the last 43-101 report.

Century has advanced BD materially on the exploration front since the last 43-101 report. Century carried out a very successful exploration program that included 21 diamond drill holes. The company was not able to reach all of the targets from the surface, thus a number of drill targets still remain both within the dyke and beyond official dyke area. In addition, over the last month or two, Century has been performing definition/infill type drilling within the BD. As mentioned in my last post, I believe the primary reason for this drilling is to identify ore blocks in preparation for mining. Most likely (at least logic would suggest), a secondary benefit to the definition drilling should be additional infill data to support 2P reserve calculation for 43-101 purposes (at some point in the future).


2) Lamaque Flats:

Jul 6`10 NR: ``Of significance, during startup, approximately 30-35% of the milled tonnage was mined from outside the Company's underground resource base due to the continuation of vein systems or discovery of new mineralized areas as mining was in progress. The Company believes that additional "new" tonnage will continue to be mined within stope complexes that has never been placed, recorded or defined in the current resource base. ``

Based on actual performance of the stopes in this area, especially with significant continuation being realized with almost all of the stopes, an opportunity exist to add 43-101 ounces to both total Resources and 2P Reserves. I believe the company has been performing definition drilling in the Lamaque Flats for a number of months now. The drilling relates to advance work in order to better predict vein pinches and swells, to identify direction of the veins in advance and to gather other helpful info prior to mining particular stope areas.

However, similar to the BD definition drilling efforts, some of the infill drill data should be supportive of 43-101 calculation efforts. The data gathered during actually mining should provide fruitful info also. Hopefully they will have sufficient data to be able to add at least some of the 30-35% extra stope ounces to both the 2P Reserves and the Total Resource column of the 43-101 report (at some point in the future). Given that some of the stopes extend for long distances (2 km in the case of at least one stope), it may be difficult of Century to come up with the sufficient infill data far enough advance of mining (for 43-101 purposes). I guess we`ll have to wait and see what is possible.


3) North Wall:

There are 256,000 ounces of 2P Reserves and an additional 408,000 ounces book to Inferred for North Wall in the 43-101 report.

My guess is the North Wall might go through a similar drill definition exercise as the BD is currently going through – at least to better identify the ore blocks ahead of mining. Exploration possibilities increase once a decline access is in place and underground drifts are established to roam around within. Hopefully Century will take advantage of the situation to prove up the 408,000 Inferred ounces over the next couple of years or so.


4) Other mid-term opportunities (if required):

*Road Zone (near surface) – 251,000 ounces (94K in M&I, 147K Inferred), not currently built into the 3 year mining plan. Perhaps they can eventually drift over to mine those ounces from the Lamaque Flats (perhaps once they roll out the new mine plan, down the road at some point)

*Below Sigma Pit (1000 – 2000 ft from surface) – 715,000 ounces (430K in M&I, 285K Inferred). As noted in my previous post, the North Wall mineralization starts below pit level (or so I have read). The significance of this is that the North Wall decline could go to a relatively deep level. Given that it is starting at the pit bottom, it is logical to think it could eventually go to 1,000 – 2,000 ft level if necessary (relative to distance from the surface). I don`t remember how deep the pit is exactly. Let`s assume it is 600 ft down for strictly the purpose of this exercise. That would mean the North Wall decline only has to go down 1,400 ft to reach the 2,000 ft level. Of course, that all depends on the water situation in that particular area. My understanding is the Lamaque no. 2 decline goes down to the 2,000 ft level (not sure if part of it is in water though). Assuming water conditions are good in particular areas, one has to wonder if some of the 715,000 ounces (at the 1,000 – 2,000 ft level from the surface) is close enough to be reached via drifting from the North Wall decline. I guess we`ll see if they build something into the next mine plan (down the road).

*There are other promising near-surface areas also, such as the Cross Over Zone, but I will write about that another time.


Of note, detailed 43-101 figures used in this post can be found on pg iii to pg v of the latest Lamaque Technical Report.

3 comments:

Anonymous said...

I can see CMM producing one more 43-101 report to cover, in depth, all recent ounces both from drilling and table top studies. After that I suspect they will end up like Aurizon to the north - who produces an internally derived annual reserve and resource statement.

In other words, if CMM feels the need to market itself it might prepare a 43-101. Otherwise we'll have to settle for "gross" ounce assessments. Key for CMM will be like ARZ - keep enough drill work going to replace the ore mined and keep reserve/resource levels up to an 8 to 10 year level.

I do not see CMM doing a bunch of work to try to define most of the flats up front. Do just enough drilling to direct the development and stoping work. Save money for the cash needs that are a few years out - rehabilitation of the Sigma Shaft or some other 'lift.'

production05 said...

There are also some exciting high grade exploration opportunities in the North Wall area that are not yet reflected in the 43-101 resourse count.

These opportunities were discovered by the Vulcan team and revealed in a April 6, 2009 NR.

The 3 North Wall holes are located beyond the pit area. The holes step out as much as 300 ft from previous historical mining areas. It means that the step out holes could signify (new zones, representing) 300 ft (or more) of additional high grade and high thickness ore for each of the areas.

The 3 North Wall area holes:


1) depth from surface = 345 ft (only)

true thickness = 15.0 ft

grade = 30.2 g/t

geologic structure = shear

distance from existing workings = 300 ft


2) depth from surface = 1,704 ft

true thickness = 34.7 ft

grade = 22.0 g/t

geologic structure = dyke

distance from existing workings = 390 ft


3) depth from surface = 1,721 ft

true thickness = 5.6 ft

grade = 37.3 g/t

geologic structure = dyke

distance from existing workings = 90 ft


The one that is only down to 345 ft from the surface is not deep at all. They might be able to drill that area near-term (if they choose), after the development infrastructure is in place and North Wall mining has started up.

The other 2 areas are not all that deep either, especially if the North Wall decline goes down to a reasonable level.

You can read the April 6`09 NR for more details. It also identifies high grade opportunities in the Sigma West and Road Zone areas.

All of the new zones identified in the NR are low cost bulk mineable areas.

http://www.centurymining.com/i/News/462009-1.pdf

Wingfong said...

Hi Prod05
This is again another piece of exciting resource news. If U do not bring this up, I would have no way to know it and I am not sure whether those analysts know it either. Gold veins/Gold in the ground are exciting to note and ADDITIONAL Gold Veins/Gold in the ground must necessarily be one of the most important reasons why CMM should be valued more. Thanks and Cheers!