RE: Pit Zone GoldGreat post Guy. Just a couple things to add. these are figures from August. I would figure in the following
A. Silver Price 29.00 current level 30-31 an ounce early 2011 expected (expect it to rise in 2011 to 40:1 (although others have it at 16:1 historically I calculate at 35:1 so I hedged it to 40:1). This doubles silver resource
B. Step outs have tripled resource
C. Silver demand and money to get more physical silver into the system has institutions tripping over themselves to back juniors
----------Original Message Posted 12/4/2010 6:21:11 PM----------
I'm not a geologist either (I'm a chemical engineer by training), but I tried to make an estimate using AGP's calculations, and the following assumptions for the gold component: an average gold grade of .40 g/t, a gold recovery of 80%, and a gold price of US$1,200/oz. See results below.
Let me know what you think,
Guy
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KTN - Promontorio's Pit Discovery Zone - Recoverable Metal Value Per Share
1) Promontorio's Pit Discovery Zone: NI 43-101 Resource Estimate (AGP Mining Consultants, August 18, 2010)
Metal recoveries and metal prices used by AGP:
- Ag: 82%, US$15/oz
- Pb: 85%, US$.97/lb
- Zn: 91%, US$.91/lb
Assumptions used in my own calculations to estimate the gold component:
- Average grade: .40 g/t Au
- Metal recovery: 80%
- Metal price: US$1,200/oz
A) Upper 200 m (Cutt-off: > US$12.50 RMV)
Indicated Mineral Resources
= 2.19 Mt @ 53.7 g/t Ag, .73% Pb, .87% Zn, .40 g/t Au
Contained Metal:
- Ag: (2.19 Mt) x (1,000,000 t/Mt) x (53.7 g/t) x (1/31.10 oz/g) = 3,781,446.95 oz ~ 3.8 Moz
- Pb: (2.19 Mt) x (1,000,000 t/Mt) x (.73/100) x (2,204.62 lb/t) = 35,245,259.94 lb ~ 35.2 Mlb
- Zn: (2.19 Mt) x (1,000,000 t/Mt) x (.87/100) x (2,204.62 lb/t) = 42,004,624.86 lb ~ 42.0 Mlb
- Au: (2.19 Mt) x (1,000,000 t/Mt) x (.40 g/t) x (1/31.10 oz/g) = 28,167.20 oz ~ .028 Moz
Recoverable Metal Value:
- Ag: (3,781,446.95 oz) x (82/100) x (US$15/oz) = US$46,511,797.49 ~ US$46.5 million
- Pb: (35,245,259.94 lb) x (85/100) x (US$.97/lb) = US$29,059,716.82 ~ US$29.1 million
- Zn: (42,004,624.86 lb) x (91/100) x (US$.91/lb) = US$34,784,029.85 ~ US$34.8 million
- Au: (28,167.20 oz) x (80/100) x (US$1,200/oz) = US$27,040,512 ~ US$27.0 million
Inferred Mineral Resources
= 0.23 Mt @ 58.9 g/t Ag, .85% Pb, .95% Zn, .40 g/t Au
Contained Metal:
- Ag: (0.23 Mt) x (1,000,000 t/Mt) x (58.9 g/t) x (1/31.10 oz/g) = 435,594.86 oz ~ .44 Moz
- Pb: (0.23 Mt) x (1,000,000 t/Mt) x (.85/100) x (2,204.62 lb/t) = 4,310,032.10 lb ~ 4.3 Mlb
- Zn: (0.23 Mt) x (1,000,000 t/Mt) x (.95/100) x (2,204.62 lb/t) = 4,817,094.70 lb ~ 4.8 Mlb
- Au: (0.23 Mt) x (1,000,000 t/Mt) x (.40 g/t) x (1/31.10 oz/g) = 2,958.20 oz ~ .003 Moz
Recoverable Metal Value:
- Ag: (435,594.86 oz) x (82/100) x (US$15/oz) = US$5,357,816.78 ~ US$5.4 million
- Pb: (4,310,032.10 lb) x (85/100) x (US$.97/lb) = US$3,553,621.47 ~ US$3.6 million
- Zn: (4,817,094.70 lb) x (91/100) x (US$.91/lb) = US$3,989,036.12 ~ US$4.0 million
- Au: (2,958.20 oz) x (80/100) x (US$1,200/oz) = US$2,839,872.00 ~ US$2.8 million
B) Below 200 m (Cutt-off: > $32.00 RMV)
Indicated Mineral Resources
= 3.03 Mt @ 52.0 g/t Ag, .96% Pb, 1.03% Zn, .40 g/t Au
Contained Metal:
- Ag: (3.03 Mt) x (1,000,000 t/Mt) x (52.0 g/t) x (1/31.10 oz/g) = 5,066,237.94 oz ~ 5.1 Moz
- Pb: (3.03 Mt) x (1,000,000 t/Mt) x (.96/100) x (2,204.62 lb/t) = 64,127,986.56 lb ~ 64.1 Mlb
- Zn: (3.03 Mt) x (1,000,000 t/Mt) x (1.03/100) x (2,204.62 lb/t) = 68,803,985.58 lb ~ 68.8 Mlb
- Au: (3.03 Mt) x (1,000,000 t/Mt) x (.40 g/t) x (1/31.10 oz/g) = 38,971.06 oz ~ .039 Moz
Recoverable Metal Value:
- Ag: (5,066,237.94) x (82/100) x (US$15/oz) = US$62,314,726.66 ~ US$62.3 million
- Pb: (64,127,986.56 lb) x (85/100) x (US$.97/lb) = US$52,873,524.92 ~ US$52.9 million
- Zn: (68,803,985.58 lb) x (91/100) x (US$.91/lb) = US$56,976,580.46 ~ US$57.0 million
- Au: (38,971.06 oz) x (80/100) x (US$1,200/oz) = US$37,412,217.60 ~ US$37.4 million
Inferred Mineral Resources
= 0.42 Mt @ 53.9 g/t Ag, .98% Pb, 1.03% Zn, .40 g/t Au
Contained Metal:
- Ag: (0.42 Mt) x (1,000,000 t/Mt) x (53.9 g/t) x (1/31.10 oz/g) = 727,909.97 oz ~ .73 Moz
- Pb: (0.42 Mt) x (1,000,000 t/Mt) x (.98/100) x (2,204.62 lb/t) = 9,074,215.92 lb ~ 9.1 Mlb
- Zn: (0.42 Mt) x (1,000,000 t/Mt) x (1.03/100) x (2,204.62 lb/t) = 9,537,186.12 lb ~ 9.5 Mlb
- Au: (0.42 Mt) x (1,000,000 t/Mt) x (.40 g/t) x (1/31.10 oz/g) = 5,401.93 oz ~ .005 Moz
Recoverable Metal Value:
- Ag: (727,909.97 oz) x (82/100) x (US$15/oz) = US$8,953,292.63 ~ US$9.0 million
- Pb: (9,074,215.92 lb) x (85/100) x (US$.97/lb) = US$7,481,691.03 ~ US$7.5 million
- Zn: (9,537,186.12 lb) x (91/100) x (US$.91/lb) = US$7,897,743.83 ~ US$7.9 million
- Au: (5,401.93 oz) x (80/100) x (US$1,200/oz) = US$5,185,852.80 ~ US$5.2 million
C) Total Resource
Contained Metal:
- Ag: 3.8 Moz + .44 Moz + 5.1 Moz + .73 Moz = 10.07 Moz
- Pb: 35.2 Mlb + 4.3 Mlb + 64.1 Mlb + 9.1 Mlb = 112.7 Mlb
- Zn: 42.0 Mlb + 4.8 Mlb + 68.8 Mlb + 9.5 Mlb = 125.1 Mlb
- Au: .028 Moz + .003 Moz + .039 Moz + .005 Moz = .075 Moz
Recoverable Metal Value:
- Ag: US$46.5 million + US$5.4 million + US$62.3 million + US$9.0 million = US$123.2 million
- Pb: US$29.1 million + US$3.6 million + US$52.9 million + US$7.5 million = US$93.1 million
- Zn: US$34.8 million + US$4.0 million + US$57.0 million + US$7.9 million = US$103.7 million
- Au: US$27.0 million + US$2.8 million + US$37.4 million + US$5.2 million = US$72.4 million
2) Promontorio's Pit Discovery Zone - Recoverable Metal Value Per Share
Per share outstanding: US$392.4 million / 37,276,600 = US$10.53 ~ CDN$10.57
Per share fully diluted: US$392.4 million / 46,577,100 = US$8.42 ~ CDN$8.45
Guy