Letter to the editor: Cote Lake’s gold resources – a clarification

In a Letter to the Editor two issues ago, I responded to an earlier cover story describing exploration progress at the Côté Lake, Ont., gold project of Trelawney Mining and Exploration. Côté Lake has an initial inferred resource of 4.2 million oz. gold. The Northern Miner‘s story noted that analysts are now projecting an 8 to 10 million oz. resource, and asked, “How big can it get?”

In my letter, I expressed my concerns about the current practice of averaging gold assays from narrow, high-grade intervals with the much lower grade values typical of broadly mineralized gold zones, such as Côté Lake, to maximize resource ounces. This practice introduces uncertainty in the resource figures, as I illustrated using published Côté Lake data, increasing the risk for the investing public upon whom our mineral exploration industry is so dependent.

I also referred to four periods when investor confidence was shaken due to lax oversight in overheated markets, severely impacting mineral exploration. Two of these periods were due to lax oversight within our own industry, one being the Bre-X period. The recent precipitous drop in Sino-Forest’s share price when its timber resources were questioned suggests that investor confidence may again be near the tipping point.

I was not comparing Trelawney to Bre-X or Sino-Forest, and I regret that this may not have been sufficiently clear to some readers. Trelawney’s Côté Lake project is located in Ontario, not offshore. It is readily accessible and open to inspection. Trelawney has responsibly released overall assay results and drill sections showing sample-to-sample assay variability. The company clearly has a large, low-grade mineralized zone with a “by-the-book” initial inferred resource, and is working hard to confirm and expand this resource.

Stu Averill, P. Geo., president

Overburden Drilling Management

Ottawa, Ont.