This is a playlist of videos from different creators that I’ve put together, and will keep on adding to, as I find it very important to understand what the company is communicating to you, both directly and indirectly.
It starts with 2 interviews that I did with dr. Quinton Hennigh, who’s been an exploration geologist for many more years than I have been on this planet.
In the first one we covered the theory of understanding drill results, and on the second one we covered a few examples of exploration stories that went wrong and what you should’ve known to predict them going wrong, even before they’d put out any feasibility studies.
Those 2 interviews are very boring, and even more so important. If you only have a few hours to invest, I suggest investing them in those interviews.
Further on, there are some other videos in here that go into the technical side of mining & exploration.
If you decide to ignore this course, although it is free and simply available on YouTube, at least take home this formula:
volume x density x grade x discount factor
The formula is rather simple.
1. You need to start by gaining an understanding of the form of the geological mass, such that you can calculate the volume of the rock.
2. Once you’ve calculated the volume of the mass, you’ll need to apply the density. The density can vary between the different types of ground, but most often we encounter values between 2.7 and 2.9. When you multiply the volume by the density, you’ll get a number in tonnes.
3. After you understand how much rock there is in the ground, you can apply grade to that. Be careful not to take the absolute highest grade that the company reports. Look at the graphs (often times colourful blocks; blue, green, yellow, etc) provided by the company and take a conservative average. When you multiply the number from step #2 to the grade, you will have an idea how many grams of gold and/or silver there are in the ground.
4. You could stop at step #3, theoretically, but dr. Hennigh suggests applying a discount factor, depending on the type of project. The more challenged the project is, the higher the discount factor. When you get a discount factor, you can multiply the expected grams of metal in the ground by what’s left after the discount factor (so, if the discount factor is 70%, you multiply by 30%), and that will give you a more conservative idea of what might be in the ground. I would highly suggest you watch the full interview, as we went through different examples and even over the risks of using this formula, some pitfalls and what are the best ways to apply the formula.
Open the playlist by clicking this link.
