RE: 43-101The report does seem to be conservative in the "Inferred Resource" estimate regarding quantity of recoverable gold:
1. Observable gold below a cutoff of .1 grams per lcm was systematically excluded from quantity calculation; and
2. Any "fine" gold (not physically observable) that may have existed was not even tested.
It would seem logical that in an open pit mining operation, all possible recoverable gold that was included in the bulk material extracted would attempted to be recovered, even if some portion, considered separately, would not be economic to mine solely on its own. In contrast, in a hard rock mining operation, effort and expense would/might not be expended to recover gold below the cutoff grade.
The report emphasized that this was an open pit operation:
"The Mkuvia project will be mined by open pit methods. This is standard operating procedures in alluvial mining due to the unconsolidated nature of the material rendering underground operations extremely dangerous if not impossible." (p. 67)
The Report shows that when figuring the estimated grade of the "Inferred Resource"," the volume of gold below .10 grams/lcm and above .05 grams/lcm was not even counted as "recoverable" even though it had been separated in the process.
"These calculations were undertaken separately for each type of deposit, I.e. Terrace and Recent Alluvial Deposits. The blocks were added together (excluding highlighted low grade volumes [table 8]), to give total resource volumes for Terrace and Recent alluvial deposits. (p. 82)
Table 8 shows the "excluded" volumes from the "inferred Resource" calculation to range between .05 grams/lcm and 1.0 grams/lcm.
https://a.imagehost.org/0875/DLKM_mkuvia_43-101_volumes_table_8.gif
The volumes of extracted material which had be through the separation process but which were not even considered in the "iinferred Resource" calculations amount to over 48% of the excavated Terrace Volumes and over 24% of the Recent Volumes. That's gravy.
Further, while the subject of microscopic gold raises a red flag to regulators and investors as being too speculative, the potential for such, has not been even attempted to be tested, as both Toby and RicherNow have suggested. Where no gold was observable, the bulk material did not even reach the separation process upon which the "Inferred Resource" was based. It may turn out to be nothing or not economic to extract, but the exclusion removes over 38% of the material that actually was dug up, and presumably would be so, in an open pit operation.
"Where only a trace amount of gold was seen it was not physically separated. This is estimated to be approximately 190 samples of the 498 taken. (p. 62)
Thus Laurence Stephenson makes his case well for the necessity of mining operations:
"It is recommended that the bulk testing and processing of a large sample in a mining scenario will the most conclusive demonstration of the resources economic potential. (p. 70)
fwiw
jmho
ICBW