Technical reports
Sponsored Links
This presentation is the property of its rightful owner.
1 / 44

Technical Reports PowerPoint PPT Presentation


  • 88 Views
  • Uploaded on
  • Presentation posted in: General

FINEX ‘10 Exploration meets the City. Technical Reports. Who needs them?. An early miner. UGH !. The first technical report?. Las Medullas, Leon, Spain. Roman gold mine. Hydraulic mining. Las Medullas, Leon, Spain. Major alluvial gold mine Over 1km across 500 million m 3 extracted

Download Presentation

Technical Reports

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


FINEX ‘10 Exploration meets the City

Technical Reports

Who needs them?


An early miner

Finex '10 October 2010


UGH !

The first technical report?

Finex '10 October 2010


  • Las Medullas, Leon, Spain

Roman gold mine

Finex '10 October 2010


Hydraulic mining

Finex '10 October 2010


  • Las Medullas, Leon, Spain

  • Major alluvial gold mine

  • Over 1km across

  • 500 million m3 extracted

  • Grade 3 g/t

  • 60,000 workers (slaves)

  • 200,000 oz p.a.

Roman gold mine

Finex '10 October 2010


Mediaeval mining-Agricola 1555

Finex '10 October 2010


The Industrial Revolution

Finex '10 October 2010


  • Britain leads the world in mineral production

    • Iron ore

    • Coal

    • Copper

    • Tin

Britain 17th and 18th century

Finex '10 October 2010


  • Started in a coffee house in 1698

  • South Sea Bubble had grown and burst within 25 years

  • Adopted formal name in 1773

  • Formal membership introduced in 1801

  • First Rule Book introduced in 1812

The Stock Exchange, London

Finex '10 October 2010


London-global mining finance

Finex '10 October 2010


  • London capital backed:

    • Californian gold rush 1849

London-global mining finance

Finex '10 October 2010


  • London capital backed:

    • Klondike gold rush 1897

London-global mining finance

Finex '10 October 2010


  • London capital backed:

    • Californian gold rush 1849

    • Klondike gold rush 1897

    • Australian gold rushes

      • Victoria 1850’s

      • Kalgoorlie 1890’s

  • Kolar Gold Fields, India 1870’s

  • Witwatersrand, S.Africa gold 1880’s

London-global mining finance

Finex '10 October 2010


  • Prospectus issued 1887

  • £250,000 raised for 230,000 shares

  • Promotors took only 200 founder shares

  • But retained 3/15 (20%) of any profits

Gold Fields of South Africa Ltd

Finex '10 October 2010


  • The Company is formed for the purpose of acquiring and dealing with certain auriferous and other mineral properties, interests and rights in South Africa, and also for carrying on general exploration with a view to making further investments of a similar nature

  • £25,000 spent on purchases and options but “opportunities exceed capacity of private capital”

Where was the CPR?

Finex '10 October 2010


  • London capital backed:

    • Californian gold rush 1849

    • Klondike gold rush 1897

    • Australian gold rushes

      • Victoria 1850’s

      • Kalgoorlie 1890’s

  • Kolar Gold Fields, India 1870’s

  • Witwatersrand, S.Africa gold 1880’s

  • Malaysian tin from 1870’s

  • Nigerian tin mines from 1900’s

  • Zambian Copper Belt discovered 1928

London-global mining finance

Finex '10 October 2010


  • Special LSE Rules for mining companies

  • Exempt from 3 year trading record

  • Listing particulars must contain a Competent Person’s Report

  • Required to demonstrate proven reserves for at least 2 years operation

  • Aggregate value of proven and probable reserves must exceed 50% of the expected market capitalisation

Chapter 19

Finex '10 October 2010


  • Consolidated Gold Fields

  • Anglo American

  • Union Corporation

  • General Mining

  • Selection Trust

Reign of the Mining Finance House

Finex '10 October 2010


  • Local mining industries

  • Need for local capital

  • Listing of exploration companies allowed

  • Boom and bust in various commodities

  • Attracted unwary international investors

  • Little regulation of trading or reporting

  • Poseidon nickel boom

  • Led to tighter regulation in Australia

Canada and Australia

Finex '10 October 2010


  • Still unable to list exploration companies

  • Major changes in 1995

  • OFEX market set up

  • LSE established AIM

  • European market of choice for resources

  • Unique regulatory model

  • Relatively light & flexible

  • Regulated by Nominated Advisers

London’s response

Finex '10 October 2010


  • Suitability for listing

  • No minimum free float

  • Working capital

  • Independent Competent Persons Report

  • Ongoing reporting obligations

Requirements for mining listing on AIM

Finex '10 October 2010


  • Competent Persons Report

  • Exploration updates

  • Resource estimates

Technical reports vital

Finex '10 October 2010


  • Convergence in Australia, Canada, South Africa

  • US regulators much more restrictive

  • Russia-an acquired taste

  • China-not yet

Standards vary

Finex '10 October 2010


The Russian system

Finex '10 October 2010


  • VMS deposit

  • C1 +C2 “reserves”

  • 24.0Mt

  • 5.87% Zn (1.41Mt Zn)

  • 0.67% Pb (161,000t Pb)

  • 106 g/t Au (81.8M oz Ag)

  • 0.3 g/t Au (232,000 oz Au)

Russian reserves

Finex '10 October 2010


  • 9.7Mt

  • 8.94% Zn (865,000t Zn)

  • 3.58% Pb (346,000t Pb)

  • 161 g/t Ag (50.5M oz Ag)

  • 0.37 g/t Au (115,000 oz Au)

Western reserves

Finex '10 October 2010


Chinese system

Finex '10 October 2010


  • Volcanic hosted sulphide deposit

  • Measured, indicated and inferred resource (90% inferred)

  • Total resources 6.897Mt

  • 4.4% Zn (303,000t Zn)

  • 3.5% Pb (241,000t Pb)

  • 34g/t Ag (7.5M oz)

Australian resources

Finex '10 October 2010


  • Total mineral resources 25.253Mt

  • 3.08% Zn (778,000t)

  • 3.02% Pb (763,000t)

  • 51g/t Ag (41.4M oz)

  • 4.6% S (1.16Mt)

    Of which the “controlled intrinsic resource” is 4.5Mt (2.41% Zn, 3.57% Pb, 64g/t Ag) and the “inferred intrinsic resource is 20.7Mt (3.23% Zn, 3.57% Pb, 48g/t Ag)

Recalculation to Chinese standard

Finex '10 October 2010


  • An alluvial tin project

  • Periods of historic production

  • Massive historic database of drilling

  • CPR by reputable consultant

  • Measured and indicated resources

  • Upgrade to reserve status

  • Plant construction

  • Outcome?

An Australian lesson

Finex '10 October 2010


Impact of Bre-X

Finex '10 October 2010


  • Management experience

    • Is the in house “qualified person” qualified?

  • Track record

    • Do the directors know what they are doing?

    • Have they done it before

What to look out for

Finex '10 October 2010


  • Beware of silence after a run of news

What to look out for

Finex '10 October 2010


  • Independent oversight

    • Ensure the consultant really is competent

What to look out for

Finex '10 October 2010


  • Are the samples selective?

  • Is the cut off grade stated?

  • Are they true widths?

What to look out for

Finex '10 October 2010


  • Beware of gross, in the ground values

  • Metal equivalent

    • Base metal equivalent better than precious

    • In Australia includes an adjustment for recovery

    • In Canada it does not

  • Is reserve/resource terminology sloppy

What to look out for

Finex '10 October 2010


Conclusions

Finex '10 October 2010


  • Investors today are given more information than ever before

Conclusions

Finex '10 October 2010


  • Investors today are given more information than ever before

  • It takes knowledge, experience and effort to make the most of it

Conclusions

Finex '10 October 2010


  • Agricola put his finger on it-

    “Those who take an interest in … mining … should read studiously and consult expert mining people”

Conclusions

Finex '10 October 2010


  • Ask yourself-does it look too good to be true?

Lastly

Finex '10 October 2010


  • Mark Twain’s immortal words

Always bear in mind

Finex '10 October 2010


The definition of a mine is a hole in the ground that belongs to a liar!

Finex '10 October 2010


  • Login