LETTERS TO THE EDITOR (April 06, 1992)

Regarding the article “Meikle may signal end to easy’ Nevada finds” (T.N.M., Feb. 24/92) by David Scott, I find it disturbing that your newspaper propagates the common misconception that Nevada is “picked over” for opportunities. It is obvious that your sensationalist headline was derived from a comment made by Robert Smith, president of American Barrick Resources. Given Smith’s reputation, I can only assume that he was either misquoted or is receiving bad information.

A study recently completed by us analyzes 116 recent U.S. gold discoveries for evidence that the “easy” discoveries have all been made. We looked at the character of discovery drill holes, the depths to the top of the ore zones, the ore zone interval and grade, the grade-thickness value and the waste-to-ore ratio for reserves used when making the production decision. On the basis of these scientific data, there is no evidence that the orebodies being discovered today are of any lesser quality than those of the past. In fact, many of the deeper sulphide orebodies contain substantially higher grades and tonnages than their oxide counterparts.

The increasing frequency of deep sulphide discoveries should not be confused with the mistaken belief that all shallow oxide deposits have been found. Anyone familiar with epithermal gold models knows that oxide ores are derived from sulphide precursors, so the existence of these sulphide deposits below the water table is obvious.

The error in most corporate thinking stems from a lack of understanding about the exploration business. As shown from annual surveys conducted by the Society of Economic Geologists, the amount of exploration spending in the U.S. has dropped by more than 50% in the past decade.

Furthermore, a comparison of discovery dates and gold prices indicates that there is a close correlation between high gold prices and increased numbers of discoveries. This relationship is also a function of exploration funding levels.

The most alarming aspect of your article is the continual reminder that corporate executives often believe these common misconceptions and are guiding their corporate decision-making on this basis. Then again, I know a lot of geologists who believe it’s “easy” to build a successful company when you have an orebody as rich as the one Barrick owns.

Douglas Silver

Balfour Holdings — Littleton, Colo.