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Colossus Minerals Inc COLUF

Colossus Minerals Inc is a Canada-based exploration stage company. Principally, it is engaged in the acquisition, exploration, and development of mineral properties. The company's project includes Serra Pelada which is situated in the mineral prolific Carajas region near the towns of Curionopolis and Parauapebas, Para state, northern Brazil.


GREY:COLUF - Post by User

Bullboard Posts
Post by Dave4444on Apr 10, 2013 7:15pm
363 Views
Post# 21239251

Nugget effect - basically look at it this

Nugget effect - basically look at it this

 

way.  Suppose you have two underground areas.  Each one averages 5 ounces per ton.  One area is uniform and so no matter where you drill, a ton of drill core will contain 5 ounces of gold.  The other area has the same amount of gold per ton on average, but is not uniform, some areas have 30 grams per ton, some have 5 grams per ton and some have no gold at all.

If you drill one hole into the uniform area, that one hole will give a result of 5 grams per ton no matter where you drill it.  So just one hole gives an accurate representation of the entire deposit.

Now drill one hole into the non-uniform deposit, it could indicate that the deposit has 30 grams per ton or zero grams per ton and neither would be an accurate desciption of the actual grade.  You overcome this problem the same way they do political polls, namely you sample the deposit with multiple holes and the large the sample, ie: the more drill holes, the more accurate the view of the deposit.  The many samples eliminate the problem created by the nugget effect.  This is why you do not buy gold explorers based on one lucky drill hole.

Now if you have a deposit like CSI which has been drilled like Swiss cheese, you end up with a very accurate unbderstanding of the actual grade and in fact if you cut the grade or put an upper limit on the assays, chances are the bulk sample is going to come in at a better grade than anticipated.  With CSI, we will just have to wait and see, but thousands of miners toiled away for years showing that the gold was not just in a lucky spot.

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