Sample tampering cited as likely at Bumbat-West project

A year ago, after a site visit to the Bumbat and Bumbat-West gold projects in Mongolia, The Northern Miner reported that “possible tampering” might explain why Mongolia Gold Resources (MGR-V) was unable to duplicate previously reported high-grade results from the Bumbat-West discovery. Also noted at that time was the lack of quartz veining and mineralization in a trenched exposure of the discovery area.

Company officials criticized these comments as a rush to judgment, stating that “inadvertent contamination” at the Mongolian lab or a screw-up whereby the lab “swapped the samples with somebody else’s” were equally legitimate possible conclusions.

“All of the data is in the company’s possession, including reject materials from the analyses,” President Dave Webb reassured investors last summer.

“The company wishes to clearly understand what the discrepancies are and how they occurred, and to this end has contracted a well-experienced independent Canadian professional engineer to assist in this manner.”

In early March of 1997, Mongolia Gold reported the discovery of a large, well-defined gold-in-soil anomaly at Bumbat West, then known as the Naimgan zone. This regional exploration program coincided with efforts to develop the Bumbat mine as a small underground operation exploiting the 118 vein.

The mine has since failed to live up to expectations and was shut down at the end of 1997. The company’s 51% partner, local company Mongolyn Alt, is now attempting to sell its interest in the project.

The original sampling program at Bumbat-West was supervised by two geologists, Igor Tchajkov (a Russian-Canadian) and M. Enkhbold (a Mongolian), and employed three local students as samplers. The survey returned positive results from 228 of the 1,750 soil samples.

The gold concentrations averaged 4.25 grams gold per tonne, with the highest running 62.5 grams. The 100 highest gold values averaged 9.9 grams gold. The discovery area was described as 1,700 metres long and at least 200 metres wide, and open in all directions.

More samples, 500 metres to the northeast of the zone, returned what the company decribed as “abundant anomalous gold values [that] may indicate an extension of the zone in that direction.”

The news release emphasized that the samples were analyzed by two methods at a certified laboratory in British Columbia. It said both methods — an aqua-regia digestion followed by emission spectrometry, and an aqua-regia digestion followed by graphite-furnace absorption spectrometry — resulted in similar values.

Later, Mongolia Gold reported that it had taken a bulldozer with a ripper tooth and opened a single 200-metre-long trench in the discovery area. All the assays results were encouraging; four of nine graded more than 0.5 gram per tonne, and the richest contained 11.3 grams per tonne.

By May, the trenching program was complete and 3,850 samples — 750 of them rock, and the rest soil — had been prepared at the Mongolian government’s Central Geological Laboratory in Ulaanbaatar. The pulps were flown to Vancouver, B.C., for analysis at Acme Analytical, a reliable assayer.

By late June, partial results were in the company’s hands, and the news was not good. Virtually all of the analyses showed low gold contents, but the company decided to wait for the whole set of analyses to come back, and to examine the quality-control results, before releasing the news.

But Mongolia Gold kept a brave face on: it engaged a driller for a program on Bumbat West, to start “immediately.” The company also applied for, and was granted, an enlarged licence area “to provide for better coverage of the newly discovered Bumbat West Zone.”

July rolled around, and all the results were in. “With rare exception,” said a July 4 news release signed by David Webb, “all of the samples contained very low gold values.” A set of 60 samples had been sent to a second lab as a check: they “confirmed the overall low gold content” in the main body of samples.

The press release said it expected results from the drill program shortly.

It also said that sample rejects, the crushed sample left over from the first stage of the preparation process, are “being held for further examination.” This was not exactly correct.

While it was never announced in the press releases, the company had hired Westcoast Mineral Testing, a consulting firm led by mining engineer Gary Hawthorn, to investigate the mineralogy of the samples. At the same time that Webb was delivering an assurance that the sample rejects had been retained, Hawthorn was trying to find them.

A locked container in Ulaanbaatar, supposed to be the place where the rejects were stored, did not have them. Hawthorn looked elsewhere but ultimately had to settle for pulps that had been kept by Acme in Vancouver.

Webb had also told Hawthorn that written instructions on keeping rejects had been issued to the Central Geological Laboratory, but the company’s copy of the letter has never appeared.

Hawthorn’s first step was to have a second B.C. lab, CDN Resource Laboratory, run the pulps again. CDN confirmed Acme’s numbers. Hawthorn next examined the pulps by panning and microscopy, confirming that much of the gold in the pulps resembled gold from sands in the Zamaar Valley, a nearby river valley with an active placer-gold operation.

Hawthorn’s investigation then concentrated on the Bumbat West area. Repeat samples from the trench were found to contain little gold, but also carried much less black sand (a common, and tell-tale placer constituent) than had the earlier samples Hawthorn retrieved from Acme. Samples taken at the local placer workings by Enkhbold, the Mongolian geologist, yielded similar gold grains to the “discovery” pulps.

In coming to his conclusions, Hawthorn considered an earlier incident in which Enkhbold, suspicious of the results at Bumbat West, told both Tchajkov and another Mongolian geologist, Enkhbold’s superior at Mongolyn Alt, that the samplers had, out of laziness, collected “soil” samples at the Bumbat placer. Enkhbold also said he had later brought up the problem with Mongolia Gold’s chairman, Edward Kennedy, when Kennedy visited the site. Tchajkov disagreed with Enkhbold’s account, and one of the samplers also denied the allegation. Hawthorn considered it unlikely that rejects would then go missing if all that had happened was phony sampling.

The second possibility Hawthorn credited was that there was a systematic plan to replace original soil samples with material from the Bumbat and Zamaar Valley placer deposits. He said that in either event, there was no question that the Bumbat West samples contained placer gold.

The Bumbat mine also appears to have its problems. In January of this year the plant was shut down to replace the liners in the rod mill, at which time Mongolyn Alt gave notice that it intended to sell its 51% interest. The mine and mill are currently on care-and-maintenance.

Grade problems have plagued the mine; early prefeasibility work by Cominco Engineering Services estimated the grade at 13.9 grams per tonne, but at startup the mill feed ran about 5 grams. Curiously, Cominco also identified spotty and erratic grades — a problem it blamed on nugget effect. Cominco only recommended that Mongolia Gold install a portable plant to process a bulk sample.

Mongolia chose instead to go ahead with production at a daily rate of 300 tonnes, and began processing stockpiled muck from Bumbat’s 118 Vein in August 1997. The last available production figures from Bumbat show that between August 1997 and the shutdown at year-end, the mill had handled 18,000 tonnes of feed with an average head grade of 3.7 grams per tonne, pouring 915 oz. of gold and retaining a flotation concentrate with a further 340 oz. in inventory.

Dilution has been fingered as the cause of the low grades, which are 27% of the company’s pre-production estimate. The erratic grades noted by Cominco suggest substantial coarse gold is in the material; unusually erratic gold grades often result from coarse gold. Similarly, the high recovery reported from Bumbat’s gravity c
ircuit ly around 85% — suggests the presence of coarse, liberated gold in the feed.

Mongolia Gold’s cause has been taken up recently by newsletter writer and desert-dirt proponent Jay Taylor, who sees a target price of $2.20 for the 12 cents stock, and describes the project as “not only a pleasant surprise, but downright exciting.”