A second phase exploration program was recently completed at the Mexican Hat property in Cochise Cty., Ariz. The property is owned 60% by Placer U.S., a unit of Placer Dome (TSE), and 40% by Oneida Resources (VSE). Based on the results of the program, Oneida has calculated (from cross sections) a preliminary reserve estimate of 7.7 million tons grading 0.034 oz. gold per ton.
Oneida noted that Placer calculated two reserve figures; 6.9 million tons grading 0.035 oz., using polygons and 5.8 million tons grading 0.027 oz., using kreiging. Polygons and kreiging are two different mathematical methods of calculating reserves based on drill results.
Bill Threlkeld, Placer’s regional exploration manager, emphasized that no grade had been calculated for the polygonal method and that the tonnage calculation was carried out only as a check on the kreiging tonnage. He noted because of the nature of the deposit, a grade calculation using a polygonal method would not be statistically reliable.
He also stressed that any reserve calculation was preliminary as it is based on exploration drilling, not development drilling.
An “order of magnitude” study done by Placer U.S. during the second-phase drilling program indicated that the break-even grade is about 0.035 oz. based on a US$410 gold price and a stripping ratio of about 5-to-1.
Threlkeld said Placer’s next step will be to concentrate on locating high-grade feeder zones in the deposit. Although he does not believe the feeders are very large, he expects the zones to grade in the order of 0.25 oz. based on the company’s drilling experience to date.
He indicated that Placer now has a very good geological data base on the deposit which will be used to target specific areas to drill for feeder zones.
Oneida President Albert Applegath said his company plans to conduct an independent evaluation of the Mexican Hat deposit. He noted that Oneida was concerned at the low grade and the high stripping ratio used by Placer in its assessment.
He said the deposit was closer to being a viable deposit than indicated by the Placer study.
Be the first to comment on "U.S.REPORT Reserves calculated for Mexican Hat"