RE:$RNX: Transcript of Eric Sprott while on Sprott Money todayApart from Sprott's remark about the poor quality of the news release which he already passed along to management. Two take away points from his chat are noted below. I would suggest that you listen to his chat directly to form your own opinion. RNX starts at around 13:00.
- Unusual ore body: ES was impressed with the high grades from very sucessful drilling. He does not like high grade cut-off, like what they did at Forsterville (CEO did not have a job after KL took over Newmarket...and Quinton H. was credited for the discovery of the Swan high-grade zone... he point his finger in the right direction to the drillers?). ES like the idea of spreading the high-grade results (say over 1000gpt) to neighbouring holes ( having 50 gpt grade). This would make quite a different to an ore body. If the infrastructure is already in place with a fixed operating cost, any increase in grade would be just "pure profit", i.e. would go straight down to the bottomline.
Depending on the rules analysts would have to follow when they put together an RE, an overly conservative application of the rules may not work out too well for "investors" like ES. He wants to see some potential of a higher RE, if grade is not cut off for conservative estimate. One way to do that is to provide a base case plus a sensitivity study for various higher grades, including the highest ones from the actual drill results. Of course, they can do in-fill drilling in critical areas to provide support for the data base. This would allow "better interpolation/extrapolation" to spread around the high grade results to neighbouring holes.
Hitting a high-grade intercept, even a "short ones" like hole WFN-029 (7.621 gpt over 0.27m), or hole WFN-063 (2210gpt over 0.85m) is not easy. NR of 22 Jan 2019 has a picture of hole 29 core with VG.
Imagine trying to hit King Henry with a drill bit (NQ?) at the end of some 100m pipe. If they are lucky enough to hit King Henry boulder smack right in the middle, the 4.7cm core they get back would be something like the one for hole 29 above for the WF. If they missed it by 0.5m they would get some lower grade. Recall that King Henry boulder weighs 95kg (containing 1404 ozAu, or 43.5kg...grade: 14779 oz/t or 458,000gpt). If King Henry is spread around in the the 60m3 living room the grade would be 43500 g/156 tonnes = 279 gpt which is a very good grade for mining coarse gold.
- Near the end at 14:14: ES said " I personally own a lot of it, and other than a little upset the way the news is given out. When I think about ore bodies, they don't know about who's running the company. Normall, the ore body works out,
regardless of human interaction with it". Some posters (SH and ceo.ca) interpreted this remark as ES's indication of his displeasure with Mark Selby. Perhaps, it's a warning shot across the bow to get the Captain's attention? But, you would need to listen to this last bit to come up with your verdict.
GH11
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pierreG01599501 wrote: I wrote the transcript of Eric Sprott while on Sprott Money News Weekly Wrap-up - 3.15.19:
«I like Royal Nickel, I like the potential for the deposit. I haven’t liked the quality of the
news releases to be brutally honest and I think I have expressed that back to them.
There has always been room for more information to actually know where we are
going here. I still have very large hopes that this ore body, which has some
tremendous high grades will prove to be unusual ore body. The drilling has been in my mind
very successful, keep finding high grade sections and one of the things I find with
high grade is typically the analysts cut what is called a high grade. They get value
grams and cut it to 50. Well the terrific thing about grams is spread it over the
other holes it can ever make a difference to the ore body. We saw that at
Fosterville where you didn’t have to cut it. I’m kind of hoping in the case
of Royal Nickel that you don’t need to cut it which would make for a much
more robust grade than what we’re looking at and we still need more drill
results. We need to prove more continuity of the pyrite section underneath
these structures. I believe that will be forthcoming. I personally own a
lot of it and other that being a little upset the way the news is given out.
When I think about ore bodies, they don’t know who’s running the company.
Normally the ore body works out. »
https://soundcloud.com/sprottmoney/sprott-money-news-weekly-wrap-up-31519