Dust flux, Vostok ice core

Dust flux, Vostok ice core
Two dimensional phase space reconstruction of dust flux from the Vostok core over the period 186-4 ka using the time derivative method. Dust flux on the x-axis, rate of change is on the y-axis. From Gipp (2001).

Tuesday, November 23, 2010

Some thoughts on NI 43-101

In mining work, dishonesty can have obvious rewards. Some of the scandals that occurred in the fairly recent past—Bre-X, Golden Rule, have led to an increasingly onerous set of regulations on reporting.

Some standardization in the rules of reporting mineral exploration results is a welcome step and the agencies which initiated these steps should be congratulated for their attempt to bring clarity to the market.

Nevertheless, it is important that while bringing clarity we don't make the entire system opaque. One problem with the NI 43-101 setup is in the review of reports. Many of the reviewers do not have expertise in geology--in fact, they are lawyers and accountants, and they expect the document to read like a legal acounting document. This places a burden on the poor geologist writing the report, and favours instead larger geological consulting companies who have legal and accounting staff to vet reports prior to submission.

It is a truism that when the major players in an industry feel threatened by smaller upstarts, the most certain way to overcome such competition is through enacting industry standards.

Additionally, geology is not like most of the other "hard" sciences. There is, of necessity, a great deal of interpretation of observations. Simply reporting observations is only part of the science--the interpretation is the key area. Much of this interpretation follows from previous experience. Consequently, it is common for geologists to make a key interpretation about a project on the basis of previous experience. But this is not something that translates easily into an accounting or legal document.

Two geologists may make the same observations about a project and arrive at different conclusions. This is a reflection of the nature of geology, and is not something that is helped by needless quantification. 

The rules of reporting on mineral properties make it very difficult for a geologist to express certain reasoned opinions which have arisen from interpretations of observations in light of past experiences. This means that a great deal of the value that a geologist can bring to a property is no longer reportable, and the exploration progress on a property must be reduced to the reporting of a series of dry numbers. The flavour is lost.

Consider this--in 1897, the Ashanti Mine began production. It was financed by the issuance of shares, at 100 pounds apiece, on the London Stock Market. How was it promoted? The founders of the company simply reported that they had visited the site in Ghana, and that the valley was full of artisanal miners recovering gold from rich seams within the bedrock.

Early this year I wrote an NI 43-101 report on a property in Sierra Leone--a report which is still bouncing back and forth between myself, the company in question, and Canadian securities regulators. One of the earlier issues, since resolved, was my contention that the number and extent of artisanal mining operations on the property meant that it would be reasonable to assume some chance of successfully exploring the property for gold.

The securities regulators took exception to that conclusion. I had no specific numerical measurements of the gold recovered by the miners. There were no numbers to report. So the observation had to be withdrawn, or at least, very heavily discounted.

Were the Ashanti Mine property being explored for the first time today, it is highly doubtful that it could be brought into production. The actual structure of the gold shoots are like long, thing, curving cylinders that plunge steeply near the surface, and gradually level out at depth. The gold-bearing zones of the shoots are only a few m in diameter, but they are perhaps 3 km in length, and each one carries 2-4 million ounces of gold.

A cylinder is very difficult to find, let alone completely define, by drilling. The only way they could have been found and mined was the way it was done. Artisanal mining was observed at the surface, and so a proposal is made to start at the surface and mine down. No drilling, just start mining. But in today's environment, it would be impossible to raise the financing for such a venture (what are the numbers?), and it would be practically impossible to define a resource using the normally accepted methods (which are more suitable for bodies with a tabular geometry).



2 comments:

  1. Very informative. This sheds light on a "hunch" I had about these reports. The question now is whether one can reasonably gave some weight to a geologist's insight. Without that "opinion" we are left to draw conclusions from a limited data source. NI 43-101 was a noble concept. It just cannot be the be-all and end-all in reporting.

    ReplyDelete
  2. Very informative. This sheds light on a "hunch" I had about these reports. The question now is whether one can reasonably gave some weight to a geologist's insight. Without that "opinion" we are left to draw conclusions from a limited data source. NI 43-101 was a noble concept. It just cannot be the be-all and end-all in reporting.

    ReplyDelete