Bossu's Questions and ore reservesThe answer to "what do we do with that " is unfortunately , to assume . that several millions of unanticipated dollars will have to be allocated to legal defence because regardless of the legitimacy or otherwise of these class action suits, it will not be cheap to provide defence in courts of law.
And before anyone choses to post more irrelevant opinion consider this. The term "high grading" can have three totally separate meanings........both legally and geologically.
To suggerst that PVG has been chasing Cleopatra and similiar structures to provide a short term boost to mined grades is almost certainly false. In theory they might have done a little bit
of exploraraty drifting but tonnage generated would have been inconsequential and I would think easily be dismissed in a court of law.
Unfortunately the much publicized definition drilling and grade control exercizes could be charactrerized by a legal team as a form of high grading. PVG is almost certainly doing one of two things with this extra stope drilling..
OPtion A is defining areas of pre engineered stoping blocks which seem to be localized areas of waste and /or ver low grade.... say below 4-5 gram. By not blasting these areas , grade at the drawpoints is definitely improved and these non-economic tonnes remain underground. Everybody is happy , right???? Well only untill the revised ore reserves are published because the tonnes that remain definitely were in the last ore reserve figure and therefore represent both tonnes and ounces that are now effectively recognized as being non existent. It has been suggested by others on this board that it might be about 20% of stope tonnages that might be identified as sub economic. ..... say about 100,000 tonnes per 6 months.
Option B might identify entire stoping blocks which , with the extra drilling done . might now be defined as completely uneconomic. It wouldnt be too difficult for mine planners to completely drop these blocks from the mine plan. It could almost easily be justified in order to improve head grades in the short term. Depending on how aggressive the reserve geologists are. these tonnes and ounces could remain in the reserves........ altho the liklihood of ever accessing them in the future is very low.
So either way, when the new reserves are published. there could be dramatic loss of ounces. This new figure is supposedly being prodiuced before xmas. Remember even by PGG's own admission there was an incostincey of around 20% in Q4 produced ounces relative to reserve grade.
Multiple factors at lpay here. Q3 production at 14.5 gram plus would go someway to eliminating these concerns but grades of only 10-12 grams would be viewed very unfavourably.
Exploration sucess mighjt offset these lost ounces but I believe most of recent drilling has been infill/ definition drilling that is unlikely to provide significant ounces.