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Basic Mining Sector Questions

Discussion in 'Commodities' started by Tiberium, May 23, 2007.

  1. Tiberium

    Tiberium

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    Hi all...;)

    I'm a new bloke in this forum, 28yrs old and I came from overseas but now I live and work in Sydney. I have been in the stock market for almost a year now. I have failed many times previously. However since I found this great forum, now I'm really willing to learn many things, especially in relation to mining stocks from so many great investors in this forum.

    I have a heap of questions to ask but I think I should start with how to read and to understand the following sample of announcement that I picked randomly from one of the mining stocks, "AUZ".

    "Australian Mines announced that recent resource definition underground drilling at the company's 100% owned Blair nickel mine near Kalgoorlie, has resulted in significant nickel intersections on E03C and C01C shoots.

    C01C Shoot:
    Two diamond holes drilled below the current workings have returned the
    following high grade down hole intercepts:
    • AMUG 223 :4m @ 10.60 % Ni from 375m RL
    • AMUG 252:5.9m @ 4.30% Ni from 350m RL"


    I do not understand with the line that says: AMUG 223 :4m @ 10.60 % Ni from 375m RL.

    What do 4m, 10.60% and 375m RL really tell us?
    How much lb is this 10.60%?
    AMUG 223 and AMUG 252 are two different holes?
    Considering 1lb is US$22.50 today, is this company going to make a large amount of revenue from this project in the near future?

    Your answer to these questions is greatly appreciated.:)

    Thank you,
    Tiberium
     
  2. hongwong

    hongwong

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    you have to read the whole doco on this.

    Basically there are three stage to minning

    1) exploring
    2) drilling
    3) extracting

    Most minning companies that are in the explore stage and trying to make out that they are in the drilling extracting stage.

    They are doing drilling sample to determine the ore contain.

    To me this would mean

    4m @ 10.60 % Ni from 375m RL.

    4 meter with of ore at 10.6% nickel contain from a 375 meter area sample.

    Sounds like alot of waste and slag.

    Best thing i did was to drive up to benigo and shout some minners some beers. They told me alot about minning.

    Good luck.
     
  3. Tiberium

    Tiberium

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    Thank you so much HongWong for the answer and suggestion. I know that it's been a month that I haven't come back to my own thread and to thank you for your input. I have been busy with my job and trying hard to study mining from "mining valuation" handbook by Dr Victor Rudenno. It's not easy to fully understand this book but I will try my best so perhaps in the short future I could also give reliable inputs of research into this forum.:)
     
  4. Gordon

    Gordon

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    Just a correction here 375m RL - RL stands for "reduced level" generally the mine surveyors will pick a spot and for their local plans this will be 0,0,0 (x,y,z generally somewhere on ground level) so basically the drillers have hit a 4m long section of 10.6% ore 375m down.
     
  5. Tiberium

    Tiberium

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    In relation to term of JORC, according to me, it means the time when listed companies are required to publish their reserves. However, I'm still confused with how ASF members can identify several companies that are going to have their JORC in near future, while there are hundreds of mining companies listed in ASX. I believe time prior to JORC is crucial to decide whether we should buy the stock. If the result of ore reserve is same or over the previous estimation, the sp could increase significantly. Your help will be greatly appreciated.
    Regards,
    Tiberium
     
  6. Markcoinoz

    Markcoinoz

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    Hi Tiberium,

    Better late than never in answering your question.

    You may need to have a read of the JORC Code to understand a companies process of JORC obligations.

    It can also help you in comparing the value of one company to another in the same sector according to time and M/C value.

    http://www.jorc.org/main.php

    I am not aware of any subscription whereby stocks can be scanned according to
    upcoming JORC. The best way IMO is to do a scan for resource companies gaining volume and momentum. Then check out their announcements.

    Cheers markcoinoz:)
     
  7. jman2007

    jman2007

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    Dunno if you are still with us mate,

    But anyway, have a look under the "Geologists discussion thread" here on ASF for a breakdown of the JORC Code. It explains what the difference is between a Resource and a Reserve, and Indicated and Measured.

    Ore Reserves represent the highest level of geological confidence that is achievable (Proven being higher than Probable) for an ore deposit. Also, many, many other factors are taken into account, such as economic, social, environmental etc in leading up to an Ore Reserve calculation, including Pre-Feasibility, Definitive Feasibility studies requiring 10's of millions of dollars expenditure.

    The road leading to an Ore Reserve is long and winding, and as such, many sp's will reflect the increased confidence and likely economic benefits that the Ore Reserve calculations have provided, ie. they may already be trading at a premium.

    jman
     
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