Upcoming MRE

[Bamps21]

This is a complicated procedure and I will try and explain it a little.

The graphics show the NSR shells coloured depending on grades.
The plan shows the NSR shells / cubes

[Bamps21]

[Bamps21]

These NSR shells in the crescent are 20x20x20 and each shell has a cut off , for the sulphides that’s $95 , cemented breccia $80 and crackle breccia $50.
An NSR is a royalty payment of 2-5% pt and $95 is very high.
Cadia is about $22
Red Chris $16

In the crescent each shell is then broken down into 4m cubes, this is where indicated probable and proven reserves are estimated.
Without infill drilling that would be impossible.

If you look on that graphic you can see the size of the shells between the SE crescent and the Eastern Breccia behind on the left.
Much larger shells so only inferred resources here as difficult to estimate.

On the plan you can see black outlines of the PFS MRE.
These are what they call hard boundaries of the shells between sulphides , cemented and crackle.
Also hard boundaries are formed for gold, copper and bismuth.
It’s complicated.

[Bamps21]

The proved and probable reserves are included within the resource figures so we can forget that for a minute except for the 86% conversion factor.
If you look in the table for the SE crescent resource you will see 2.8moz, then if you look at the reserves you see 2.4moz.
So that is the 86% of the resources turned into reserves figures for the SE crescent only.

[Bamps21]

Resource classification ie indicated and inferred has a weighted 45m within the SE crescent shells.
This is the average spacing between drills.
The inferred areas have 75m spacings.
There is also a regression factor
>0.6
Complicated statistical value on a X and Y graph with a rising line.
I believe it shows the comparison of the metres from the drills to shell boundaries but I’m guessing

[Bamps21]

What can we expect?
The hard boundaries will have expanded from the PFS MRE but not from the latest one
This means the SE crescent figures won’t change much from the 2.8moz
What will change is in the Northern Corridor, this has had a lot of drilling since Dec 21.
As has the Eastern Breccia, link zone and SE Deeps.
Shaun did mention in March that NCM had not been working on it since November so I think overall we will be looking at 10mozeq.
I hope it’s more but it’s very complicated not knowing the drill spacings.
I hope it’s not less but knowing NCM it might be

[Bamps21]

These green blocks in the Eastern breccia are the estimated shells/cubes which are a minimum distance away from the drill intercepts which can be seen on those 4 sketches.
These 4 are at different levels.
Due to the consistency of the grades they can estimate more easily at a distance from the intercepts.
Will only normally be inferred at these drill spacings

[ManFromUruguay]

Many thanks Bamps for your considered analysis.

This is clearly a very eagerly anticipated update and it will be interesting to say the least the breakdown and the grand total so far

Would love it to be double figures of course but I am not setting my expectations above high 8's knowing how conservative Newcrest apply these things

[The Doors]

These green blocks in the Eastern breccia are the estimated shells/cubes which are a minimum distance away from the drill intercepts which can be seen on those 4 sketches.
These 4 are at different levels.
Due to the consistency of the grades they can estimate more easily at a distance from the intercepts.
Will only normally be inferred at these drill spacings

Really appreciate the analysis and delving to bring this to our notice - thank yoy

[Bamps21]

The MRE process is complex I’m going to try to explain it from scratch.
To start with an explorer finds a anomaly then puts one drill into it and sends the drill core for assay. In the meantime downhole surveys are carried out.
The assays are good and they can estimate the ore body with information from the surveys.
To estimate it the ore body is divided into 75m cubes or NSR shells which have economic values .
75m is probably the maximum distance that estimation can be used , so if the ore body is open they may drill again 150m away so that the 75m cubes can be joined up from each drill

This sketch shows 3 or 4 intercepts with cubes maximum distance from each cube. The arrow shows an intercept.
The cubes around the intercept can be estimated fairly accurately, those green ones can’t be their more guesstimates.

From the assays we know the grades.
Weak grades in our example would have an uneconomic cut off value of 0.1g/t so everything below that is ignored.
A cut off of 0.1 doesn’t need infill drilling between our 2 drill holes, the spacings are sufficient to gain a reasonable estimate of ore for an MRE.
Eg Carrapateena mine is a bulk mine now their spacings were greater than 150m between drills so they lowered the cut off below 0.1 to gain estimates so bulk caving could be planned.

Going on to the SE crescent we have drilled are 2 holes and assays are showing greater than 3g/t so the 75m cubes estimation doesn’t provide an accurate estimation.
We are now talking about inserting 20m cubes and then down to 10m cubes depending on the grade strength and complexity of the ore.
Our 2 drills need to be 40m apart or even 20m apart.
So we have a cut off value of >3g/t nothing below that counts and 10m cubes with NSR values within each cube of $95 per ton.
To estimate these 10m cubes they are further split down into 4m cubes for an accurate estimate or a reserve estimate.
Cut offs
0.1 = inferred resource with 75m cubes
3 g/t = mineral resource with a 20m cube
3g/t = Ore reserve with 10m cubes

Our original 2 holes at 150m apart would now have drills every 20m apart.
That is infill drilling

[Bamps21]

Purple = 3g/t
Rest is 1g/t

[Bamps21]

Here we have 2 graphics showing cut offs
The Red shows greater than 3 g/t
The blue is greater than 0.5g/t

[Bamps21]

3g/t cut off in purple other 1g/t
Blue dotted line is 0.5g/t
0.1 would be twice as big

[Bamps21]

[Bamps21]

The crescent in the centre has tiny cubes probably the 4m ones
On the left is the Estern breccia in the bottom bit, you can see the large cubes so that’s inferred
Above is the Northern breccias they are small cubes at the top going down into larger cubes.
It’s this area they were infilling last year to make cubes smaller. It’s this area that will increase the MRE.

[Redirons]

Fantastic explanations as ever Bamps - thank you.
Now we wait and hope NCM/NEM get on and issue the revised MRE and DFS/DTM before year end hopefully!!