RE: nugget effectCan anyone check this out and compare the two . There is a bigdifference in SP.
I'll start with the difference in share price. Golden Hope has engaged a very robust stock promotion team in the ResourceX group (https://www.stockhouse.com/tools/?page=%2FFinancialTools%2Fsn_newsreleases.asp%3Fsymbol%3DV.GNH%26newsid%3D7785560), who are clearly motivated by the share options they received as compensation to promote the company and who agree to work for only one company in a sector at a time. They've basically promoted this stock to their newsletter holders and its probably the first time anyone has heard of them.
OX also has suffered from trying to explain the nugget effect in the past. The following is sourced from various NI43-101's that OX has completed in the past.
A major hurdle for Orex has been to evaluate the gold content of themineralized belts. The gold distribution is subject to a severe “nuggeteffect” with a strong segregation component. In the case of Goldboro,gold appears as large nuggets, fine disseminations within or borderingarsenopyrite crystals and fine gold grains associated with carbonaceousmaterial. This particular distribution of gold grains may explain thefact that regular assaying methods (A.A.; F.A; metallics) yield lowergold values than a metallurgical balance from mill-tests.
Historically, the severe “nugget effect” produced by the extremevariability in gold size and distribution within the Goldboromineralized belts forced companies to implement a number of sampling andgrade determination programs. The nugget effect is so extreme thatcollecting and processing samples of a size adequate enough to overcomethe nugget effect is problematic using conventional analytical methods.The programs have resulted in a wide variety of sample types tested byseveral different processing protocols on the initial and sub-splitsample sizes. Sample types have included:
- surface and underground grab samples,
- surface and underground drill core samples,
- drill sludge samples,
- drill core composite samples,
- underground chip samples,
- underground muck samples, and
- underground bulk samples.
The results from these tests clearly demonstrated that undersizedinitial samples and/or improper sub-split sizes for the crush and/orgrind sizes could produce imprecise determinations of grade.
Placer Dome worked with Orex in 1995 and assisted as they hadencountered similar sampling problems in the past. Placer sampled thestock pile of ore recovered in 1988-89 in a very methodical way. Theytook samples of four types of rock: Greywacke, Slate, Quartz Vein andVein. They discarded any samples with visible gold. The results wereextremely encouraging showing 1g/t in Greywacke, 2.82g/t in Slate, 16.15g/t in Quartz Vein and 36.37 g/t in veins.
In general by 2000 the company had concluded that, on average the grade determined by using conventional techniques had to be multipled by 1.6 to come to the true grade when compared to a mill test.
Since 2004 all of the new drilling has been using a protocol designed by Alex Horvath (who was one of the independant geologists that produced a NI43-101 resource estimate in 2004) to counteract this effect.
Elements of this protocol include:
- Using a larger bore (HQ) size for the DD holes
- Not relying soley on standard Fire Assay and Atomic Absorbtion (AA) assaying techniques but also using metallurgic testing/screening whenever visible gold is found in a sample (which has generally significantly increased the g/t compared to when AA is used on the same sample)
In 2006 the first NI43-101 was produced using the new methodology which resulted in a significant resource increase on a very small area of the property.
As a result, since 2006 the company has been resampling the entire property using this new methodology, and no longer limiting itself to small areas. This is also why the 96 holes had to be rejected from the model - because they were not sampled in many intervals, and as a result were not suitable for inclusion in the new scientific model. Scientifically Orex have now proven to independent geological experts (InnovExplo) that they have a mechanism that accurately predicts the gold content.
In the 2009 NI43-101 they have also shown that using two different models of the geology: domains of high gold and low gold, versus the traditional model of "belts" of gold yielded the same gold resource results.
As a result, I believe the company now has the scientific ammunition to back up its NI43-101 resource claims in the face of detailed scientific scrutiny.
It should be pointed out that conducting Metalurgic Screening takes much more time than a fire assay technique. This is why getting results back takes so much more time.