SBM 8.99% $2.53 st barbara limited

Atlantic Gold background info that you might find interesting

  1. 228 Posts.
    lightbulb Created with Sketch. 6

    Some info that helps explain the low strip ratio at Touquoy,much lower than the feasibility study showed.

    Atlantic Gold do grade drillingon 5 metre spacing for the entire deposit so they have as much information aspossible about the deposit and grades etc to help with mining decisions andthis systematic approach is a very large part of their success and no doubthelped with the realisation that a lot of the material that they thought waswaste is actually ore and explains why the strip ratio of waste to ore hasdeclined dramatically from 2.3 to 1 down to an incredible .63 to 1. The companyhas also been able to lower the grade cutoff down to .3g/t and subsequently asignificant increase in reserves at Touquoy. This also augurs well for theother deposits Cochrane Hill and 15 Mile Stream in the future as they aresimilar to Touquoy in composition and when the company mines those depositsthey will be using the same thorough processes as being used at Touquoy so ifthere is a similar situation they will be able to establish potential ore fromwaste more readily.

    What helped convince the financiers to fund Touquoy anddetail on risk management and grade drilling process.

    The reason AGB managed to securefunding was because they were able to convince the financiers that theirmodelling was 1st class and their risk management approach unique to theCanadian market and got the deal over the line. Gwen Preston from ResourceMaven has written an excellent plain english report about Atlantic Gold that Irecommend anyone with an interest in this company get hold of as it answers somany questions related to risk mitigation etc. gwen's email [email protected] and what follows is her description re risk managementprocesses being used by AGB that put the financiers minds at rest and helpedallow the deal to happen. Costs are what stand out on paper. On site andspending time with Dean, Belanger, and the team, what also really stands out isthe focus on managing risk. Mining is a risky endeavor. In general we drill holesinto a deposit on 25-metre centres and use that information to estimate what anentire body of mineralization looks like and contains. That means a lot ofassumptions – and a lot of room for error. The answer is not necessarily todrill more, especially for structurally straightforward deposits like the onesat Moose River. What Atlantic is doing to address the resource risk is to goagainst the Canadian grain and use a resource estimation methodology not commonin this country – but well used elsewhere. Most resource estimates in Canadause linear estimates and capped high grades. In very basic terms, the idea isto chunk out the deposit into blocks and to use drill data from within eachblock to estimate its average grade. The Atlantic team sees two problems withthis approach: the blocks are influenced by the intercepts, which creates aself-fulfilling prophecy in that the deposit appears more consistent than itperhaps is, and anomalous high grades are capped in a pretty arbitrary manner,which is necessary to limit their influence on the overall grade but whichrenders the model less accurate. Atlantic’s answer is to use a differentmodeling process called multiple indicator kriging (MIK). I will not go intohow it works here, but in short it addresses the issues inherent in linearestimates by processing the data statistically, rather than physically. It isin fact rather odd that MIK is not used much in Canada. It’s not because ofscience; it’s simply a cultural thing. In Australia MIK is widely used andthere are a heck of a lot more open pit gold mines in Aus than in Canada. I ama novice when it comes to resource estimation methodology, but I thoughtAtlantic’s approach worth noting. We spent over an hour during the visit in atechnical presentation about the decision to use MIK and I came away certainthat, in the very least, Atlantic is putting a lot of thought into how to bestprocess data. That is significant in a world where resource estimate failureshave created major disappointments of late. The follow-on of that presentationhad Belanger tell us about Atlantic’s approach to grade control, which iseasier to understand and very cool. 6 In most open pit mines, miners decidewhat rock to send to the mill and what to send to the waste pile by assayingsamples from the blast holes. In other words: the holes that are drilled sothat the explosives can be inserted into the face create a pile of chips,called cuttings, and samples are taken from that pile to decide whether aparticular blast load is ore or waste. There are two key problems with that.First, the samples are often not representative; sample collection is poor andprone to contamination. Second, blast holes are drilled a few days or sometimesonly a few hours before face is blasted. Mine assay labs are under intensepressure to test the material and return results very quickly. Sometimes theturnaround just can’t happen in time, so in the absence of data a geologistmakes the ore-waste decision based on what he or she sees in the rock. That isnearly impossible. A mine grading 1.5 g/t gold has 1.5 parts per million gold.Yes, sometimes alteration makes it clear what rock types carry the gold andsometimes ore-bearing structures are visually obvious, but a lot of the time itis impossible to visually distinguish rock carrying 1.5 parts per million goldfrom that which does not. Atlantic does not want to end up in that situation.So it is taking a completely different approach. The company has a drilldedicated to pummeling its reserves with holes on a 5- by 10-metre grid. Theprocess gathers enough data to create a mine plan and better define n ore-wasteboundaries months in advance of mining. The first set of grade control holes godeep enough to plan the first four benches of the open pit, which is somethinglike six months of mining. I saw the cross sections, one for each 5-metresection across the parts of Touquay that are completed, and the level of detailis just great. Atlantic will use that data to determine exactly how to mine.The mine plan, including GPS-defined dig lines for the excavators, will beuploaded into digital tracking systems in all of the mining equipment so thatall miners know exactly what to do with each bit of rock. As an added bonus,the process allows Atlantic to check its resource model on a panel-by-panelbasis. At the moment results are reconciling within about 5%, which is great;if the reconciliation was not good Atlantic would know now, rather than in ayear when it’s trying to commission its operation and things aren’t working.All of that – the resource model process and the grade control approach – it’sa lot of technical information. I wanted to include it because Atlantic’sdecision to put time and money into these decisions and processes really struckme. This is a team that is using its extensive collective experience to createa mine plan with the best possible odds of success. Risk – it’s part of mining,but it can be mitigated.

    Resource Expansion possibilities

    Atlantic Gold have beensignificantly expanding resources and have the exploration knowledge tounderstand the Meguma terrane geology and realise its full potential in timeusing the models they have developed from actually mining Touquoy so they havesignificant inside knowledge that nobody else has which will be put to good useto find the likely 10's of millions of ozs that sit undiscovered in the MegumaTerrane underneath all that glacial till.

    For those not aware the MegumaTerrane is 90% covered in glacial till (gravel) and this 90% has not beenexplored, the 10% that has been explored in the Meguma is because that is howmuch that has outcrops that the olden day miners could see so they mined wherethey found quartz with gold in it. Based on known resources in the Meguma whichcan be found by adding up resources from various companies with currentholdings from the 10% of the Meguma that has been explored you come up with thevacinity of 4-5 million ozs of known reserves and past production. theremaining 90% which until now has been virtually unexplored could potentiallycontain in excess of 40 Million ozs and that is the real prize. Atlantic Gold'sWally Bucknell found 11 Million ounces during the 80's and 90's with Plutonicin Western Australia and Western Australia has been extensively explored unlikethe Meguma and if the Meguma was in Western Australia it would of been swisscheesed decades ago. I think Wally Bucknell wants to end his career with a bangand put the Meguma on the map in terms of being a world significant goldresource area and AGB has the modern technology and skills to systematicallyunlock the gold riddles of the Meguma.

watchlist Created with Sketch. Add SBM (ASX) to my watchlist
(20min delay)
Mkt cap ! $1.768B
Open High Low Value Volume
$2.69 $2.70 $2.52 $37.65M 14.59M

Buyers (Bids)

No. Vol. Price($)
1 4131 $2.53

Sellers (Offers)

Price($) Vol. No.
$2.54 22162 1
View Market Depth
Last trade - 16.10pm 18/10/2019 (20 minute delay) ?
-0.250 ( 7.97 %)
Open High Low Volume
$2.69 $2.69 $2.52 3343498
Last updated 15.59pm 18/10/2019 (live) ?
SBM (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.