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The average of the original smaller resource volume cant change obvs. But if then, outside of that original resource volume the assays are less than that original average then the average of the new larger volume has to be less does it not ?
Another simplified example regarding the average copper grade throughout a resource.
Where a resource of, for example 500mt, and 0.4% of that 500mt is estimated to be the amount of copper contained.
By lowering the economic cut off from 0.3 down to 0.15 at which substantially more of the lower grades are evident in comparison to higher grades, the average grade percent of copper within the whole ore body does not reduce proportionately.
So being at an average of 0.4 doesn’t reduce down to an average 0.3 because a load of assays have come in at 0.2. It’s all about the extra quantity of recoverable copper that keeps up the average grade which is the percentage of copper within the whole ore body.
My god it’s hard to explain but once you get your head around it ….bingo!
The average is a constant across the whole deposit, soon to be an upgraded resource for rc
The cut off is determined by processing costs and commodity prices. Hence a range is given in financial modelling that reflects these changes.
All ore within the pit will be processed, where an economic cut off is determined the plant is modified to accept above these minimum grades, ( to put it simply) what’s left below the cut off grade are in the tailings.
Just by increasing the cut off value by half eg. from 0.3 down to 0.15 it does not necessarily mean that just a double increase in the amount of recoverable copper as there will generally be considerably more copper at lower grades within the ore body, so potentially the recoverable copper at these lower grades could increase by much more than two or three times the tonnage as opposed to a higher cut off.
I think this is where some confusion lies from the perception that 2mt is not achievable from the results from phase 1 and 2
The first open pit technical presentation is also good.... overlays phase 1 drilling with historic holes and give a great scale of Racecourse alongside Ascot (which they hadn't yet found.... only surmised it's existance.
https://youtu.be/AEIwR_0S7SE
We could do with another one of these presentations to wet the appetite.
Sometimes it's good to look back at the original study....
The Conceptual Study concluded that the Racecourse deposit contains significant low-grade tonnes of copper and gold which may be economically recoverable at copper sale prices above US$4/lb. Optimal believe that the economic recovery and processing of ore with low grades between 0.1 - 0.2% Cu is pivotal for the economic viability of the Racecourse project, with the sensitivity analysis showing that for each 0.05% drop in cut-off grade the NPV drops by as much as AU$341 million. Overall, Optimal believe that taking account of the project's large size and relatively low grade, conditions should support the efficient and productive mining of the deposit. Optimisation of the processing plant capacity, capital cost, metallurgical recoveries and operating cost will improve the economic viability, and further opportunities exist to:
- Increase the size of the current Inferred Resource which will be critical to project viability;
- Analyse lower production rates, such as 12 or 15mpta;
- Evaluate further phase 1 and 2 pit designs; and
- Optimise dump development and the rehabilitation schedule.
Thanks for the info. All clear to me now!
· The samples were representative of the anticipated average copper grade of the deposit, ranging from 0.33-0.48% Cu, with minor silver (1.1g/t to 3.3g/t) and trace gold (0.007g/t to 0.04g/t), other than the more gold-rich Ascot sample which assayed 0.30g/t Au
I've re-read it, it says anticipated average copper grade. Is that the same as we anticipated a model last year?
zero, the cut-off is the point where it costs more to mine and process a ton of ore than the financial return on that ton.
Zero, the cut off is the percentage of copper in the rock that is economic to recover. So when they reach rock at a grade of less than .15..... it gets pilled up and not processed.
As you say it will be an economical cut off which will be dictated by the copper price used and the capex of the site overall.
Taking into account the cost of delivery to the smelter etc
I'm not well versed in the technicalities of mineral exploration/mining. But am able to understand when something is explained to me. Would anyone be kind enough to say, in a very few words, what this much discussed 'cut off' is? I can almost imagine, but I'm not fully there yet. Many thanks in advance.
That theory would then fit with my first assumption as to using a lower tonnage to then have a higher average grade of between .33 and .48
I'd agree with that.
Obviously I'm struggling to understand. The last study was based on 71mt at .44.
But if you use a lower cut off, you can economically remove more ore and therefore more copper but this doesn't increase the overall grade of the resource.
Surly if you lower the cut off and can process more ore, you increase the tonnage and lower the overall grade?
Sorry, I'll rephrase! Did they have overall average grade for each one?
Good points, they did have multiple on the last one. They showed multiple cut offs but did they show overall average grade? I can't remember.
I thought they would have several models based on different cut offs and different combinations of areas.
In theory that would be the best thing to do and not hard to achieve with modern computer programmes
I thought they would have multiple cut off options for the model?
I read the rns and thought the same as others..... how can the whole deposit sit in that range of coppper eq when most of the lengths are short of those numbers.
I come to the conclusion that maybe they are modeling the conceptual open pit on a lower tonnage but with a higher average grade?
But then why would you not include everything that's economical to mine?
Is it for the wow factor?
What's more attractive? A 1MT at .5% or 2mt at .25%
AND BEFORE PEOPLE COME OUT AND SAY 'ITS NOT AS SIMPLE AS THAT' I KNOW!!
It's for illustrative purposes only!
Howezap,
I didn't mean to imply the met work was associated with only the initial 71MT as clearly the RNS says that samples have been taken form different areas of the proposed pit. My suggestion was merely for the richer grades within the entire pit.
Cygnus,
You could well be right, although my rationale is that the met test work is to go toward financial evaluation for a new conceptual pit study for Racecourse. Not the old pit study based on the currently inferred 71mt
It would not be representative for the deposit if samples were only taken from the currently inferred part of the resource I would have seriously thought.
Also they use the term deposit, which would mean the whole of racecourse. If they were just referring to the 71mt part only they would have used the term resource, as a deposit as I’m sure you already know is that a resource exists within a both discovered and undiscovered deposit.
Sorry not meant to sound anal lol
Howezap,
I agree the wording suggests exactly what you infer but I have frequently thought that the assay results as they have become available are a little below what I was hoping for. To my mind, that was compensated for by the size of the deposit. But then a representative grade to use for the metallurgy work would have been lower than that used according to the RNS.
Possibly, metallurgy work uses the richer grades as these will produce the majority of the minable Cu and the RNS has been poorly worded. I don't know but it would be useful if anybody knew more. I have a friend's son with a degree in geology and is now doing a PHd on porphyries. I could ask him as he has been keeping an eye on XTR from an academic point of view. It may take a day or two to get an answer....
Hi Cygnus thank you for the numbers, it’s certainly reassuring as there is plenty of wiggle room to be further conservative in the ranges.
Jeremy Reid stated in ascot webinar at the very end that the deposit would need to show about 400-450mt to yield 2mt cu at 0.44%cu average. There is certainly no reason to doubt his perception.
As for this latest estimate for anticipated grades it is clearly for the deposit and not for just the higher grade part.
>>Four master composite samples of quartered drill core were prepared, based upon a geographic location within the Racecourse and Ascot deposits, namely Racecourse Central, Racecourse North-West, Racecourse South-East and Ascot
· The samples were representative of the anticipated average copper grade of the deposit, ranging from 0.33-0.48% Cu, with………….<<<
Hi Fos,
"What is the assumption at the extreme lower end .33"?
I can't answer that. Due to the vagaries of the data with grades waxing and weaning over the resource I have simply made the assumption that the mean grade is .4% which I have said, I think is a tad too high. If that is true then it is likely that we will undershoot the 2MT mark although Footrot is likely to bring us above that figure - and Andy4444 said earlier this morning.
Hi CY
What is the assumption at the extreme lower end .33?
F100