Nugget effect
I haven’t posted in a long while, but am still very positive regarding GBB. That’s why over the past year I’ve tripled my position. The recent deal with IMG basically means we can start drilling again without having to worry much about possible dilution. I don’t doubt that once the drilling commences, our SP will head north fast.
This post is actually intended to remind everyone of the very important nugget effect on our property, because I feel that this fact has strangely been forgotten somewhat, even to a point where I’m not sure if new investors even know that it’s there.
Basically the nugget effect is responsible for the fact that the actual milled grade on our property (and on many places along the Abitibi Greenstone Belt) is significantly higher than our drilled grades. This is due to there being clustered particulate gold that has a low chance of being intersected by the small diameter of a drill core, especially NQ drill cores. Larger diameter RC drills will intersect more of this free material, but as far as I know we haven't used those yet. Aside from the particulate gold, if there are veins that run parallel (or sub-parallel) to our drill cores, instead of at a larger angle, they will also hardly ever get detected.
The best way to detect the nugget effect is not by RC drilling though, but by bulk sampling. In 1993 the previous owner of Granada did a small bulk sample and came up with a nugget effect of 65% (0.061 oz/ton drilled became 0.101 oz/ton milled). This can be read in the 1994 A.C.A. Howe Report, of which I’ve put some relevant excerpts below.
In 2007 we did a bulk sample as well (30,000 tonnes) and came up with a milled grade of 1.62 g/t milled, which also contained a nugget effect. Frank Basa said: “In a deposit of this nature the mill grade often significantly exceeds the assay grades, due in part to the presence of particulate gold that has a low statistical probability of being intersected in the very small area sampled by NQ drilling.”
(Side note: previously, some people on Stockhouse have posted that our 2007 bulk sample had a 100% nugget effect, because 0.8 g/t became 1.62 g/t. I have yet to see where that 0.8 number came from though. If someone can point me towards it I will be grateful. All I can find is the following sentence from a 2008 news release about that bulk sample: “calculated recovered gold grade of mill feed of 1.62 grams/tonnes is 20.0% above average mill head grade of 1.35 grams/tonnes due to free gold content.”)
All in all I think it’s not unreasonable to assume there is a great chance we have a nugget effect on our deposit somewhere in the 20% to 30% range. If this is true, this should increase our profits by much more than 30%. I think that when we start using IMG's mill, we might be in for a very nice surprise.
Excerpts from the 1994 A.C.A. Howe Report:
"This is due in part to the presence of particulate gold which has a low statistical probability of being intersected in the very small area sampled by a drill core, though is invariably collected in the mining process; in addition, gold may also be contained within veins which extend from the principal structures in an orientation sub-parallel to the direction of drilling. This gold will also be present in the mined material, though will only rarely be intersected in the exploration drilling. There is thus clear precedent to suggest that the peripheral lower grade material at Granada may attain economic grades in mining. This additional material cannot be assessed from the current open pit but will require testing from underground; should it prove to upgrade then a large part of the deeper reserve could be extracted by bulk underground methods."
[…]
"If the upgrading factor can be proven valid in the course of the next operating phase the grade will obviously increase considerably, and while it is unlikely that a blanket increase could be applied to the zone it is probably that the majority of lower grade intersections within the reserve would be upgraded in mining."
[…]
"The small bulk sampling exercise conducted in 1993 extracted material from the outcrop of the structure where diamond drilling suggested an average grade of 0.061 ounces gold per ton, while the mill returned a head grade of 0.101 ounces gold per ton after allowance for dilution, indicating that appreciable upgrading occurred, probably due to the presence of free gold."
65% or not, another part of the report reads as follows: "Previous recoveries on processing typical run of mine material (115,623 tonnes) show that an improvement of approximately 30% from sampled grades occurs due to the erratic nature of mineralization."