OPINION/GARRY HAWTHORN — Assaying unravelled

Although I have not examined a questionable gold deposit since the late 1980s, I am concerned that the problem has not gone away.

A few weeks ago, I received a review of six so-called desert sand gold deposits. The report states that “the world of conventional geologists, mining engineers and gold share analysts have yet to recognize a new type of gold and platinum industry developing.”

The paper reports that the owners of these properties have developed gold recovery processes that are not used throughout the industry but that have returned gold grades of up to 1 oz. per ton — much higher than was returned by “conventional assaying.” The report favorably reviews Naxos Resources, which has since ceased trading on the Alberta Stock Exchange, and International Precious Metals, which has a market capitalization of more than of US$150 million.

Currently, the Nevada gold deposit of Delgratia Mining, listed on the National Association of Securities Dealers Automated Quotation (NASDAQ), is under scrutiny because of an apparently overstated gold grade. Although the final outcome is uncertain, it is now known that the tests were performed by an unlicensed assayer who was once convicted of fraud. The company has a market capitalization of more than US$110 million.

>From a shareholder’s perspective, the largest apparent blunder of late is the Bre-X Minerals situation in which billions of dollars are in limbo because of poor sampling, poor data manipulation, salting or, improbably, poor assaying.

These recent events reflect badly on the Toronto, Alberta, Vancouver and New York stock exchanges, and could have been avoided by increased knowledge and an elevated level of professionalism.

Although the assayer is important in the determination of sample grades, one should not lose sight of his real objective, which is only to determine the “correct” grade of a typical 2-to-4-kg sample.

In the bigger picture, a deposit saturation drilled at 50-ft. centres and 5-ft. intervals will identify a mineralized block of about 1,000 tonnes. If 8 kg of core are split, 4 kg should arrive at the assay office. After crushing the entire sample to, typically, minus 6-inch mesh, a nominal 250-gram sample will be riffle-split and pulverized to produce an assay pulp. A single 1-ton fire assay will consume about 30 grams of this sample.

>From the perspective of the assayer, as little as 0.75% of the sample (30 grams of 4 kg) may be consumed. From the perspective of the explorationist, only 0.000003% of the sample (30 grams of 1,000 tonnes) may be consumed.

Viewed from that vantage point, the correct assay for a sample is less important in relation to the grade of the material that is still in the ground.

As a mineral processing engineer, I am occasionally asked to review sampling and assaying procedures. To do so, I obtain a nominal 2-kg sample from the deposit, crush it to about minus 6-inch mesh, riffle-split four nominal 250-gram pulps, pulverize them individually, and fire-assay each one in quadruplicate. While this method is admittedly not a significant statistical population, it represents a sufficient number of assay determinations from which useful knowledge can be obtained.

Although the use of more expensive metallics assaying or cyanide leaching as an assay technique is frequently endorsed and may well be justified for specific deposits, one should not be stampeded into adopting these more costly methods without undertaking a small-scale test to determine whether the increased expenditure will produce improved results.

In many cases, fire assaying is preferable, but assays using other methods should be done periodically in order to define numerically the statistical uncertainty of the data.

I suggest we not dwell on the frequently impossible task of determining the “correct” assay grade for a specific sample but, rather, pay attention to the task of establishing the confidence level for the deposit as a whole. From a regulatory perspective, this is a less easily understood concept than the current practice, but it is the only one that is technically valid.

— The author is a professional engineer.