The Pretium gold resource controversy in context and a letter from the frontline – by Lawrence Williams (Mineweb.com – October 25, 2013)

http://www.mineweb.com/

The disagreement between two respected engineering companies over the Pretium resource in BC, Canada has generated much controversy but should not detract from a still exciting project.

LONDON (MINEWEB) – The Canadian resource sector has been abuzz with people taking sides on the Pretium controversy over the Brucejack resource estimation and whether Strathcona, or Snowden, both highly respected engineering companies, are correct in their different handling of samples and results.

Personally, as a mining engineer by background, I suspect with a deposit of this type with a very large number of ultra-high grade gold intersections in its Valley of the Kings section, within a much lower grade more disseminated orebody, that neither will accurately represent ultimate mining grade terms and, if, and when, a mine is developed at Brucejack, selective mining methods could enable the orebody to be mined to a far higher grade than the bulk sampling would suggest, should economics suggest that is the most profitable long term route for shareholders.

Do I have an interest in Pretium? From a technical point of view perhaps yes – it looks to be one of the most exciting recent gold discoveries in Canada. From a personal financial point of view, No. I do not hold stock in Pretium, or in any other mining company for that matter. Here in the UK it is considered a conflict of interest to write about anything one has a financial stake in.

Is Pretium paying me to write this? Categorically no.

Do I know any of the people involved. Yes. I do know Pretium CEO Bob Quartermain and consider him to be one of the straightest arrows in the whole mining community, as any of North America’s senior mining executives will probably confirm.

The problem here is how do you assess a resource which has seen a consistent slew of ultra high grade, but relatively narrow, gold intersections – some of which run to kilograms per tonne – in amongst a huge low grade gold bearing matrix?

I have seen some of the cores – the gold is definitely there. Indeed, in some of the initial cores on the project the amount of visible gold was so high that some of the geologists thought it couldn’t be for real – until it was assayed. And, since then, have continued to pull many more equally high grade, and even better, intersections as well.

As I understand it, under standard Canadian resource assessment practice, much of these high grades should be discarded as being anomalous – but, in Pretium’s almost unique case, they have been shown to be consistent – and without taking them fully into account, any overall resource assessment, and subsequent mining reserve, would be horrendously weighted downwards – indeed Strathcona’s position was that their results were insufficiently positive to enable a mining reserve to be calculated.

Now, there is plenty of low grade material at Brucejack – millions of tonnes of it – but without the ultra-high grades being taken into full account it would probably be virtually impossible to present an economic case for development in the current climate. In this case, lead consultant Snowden’s position is thus that Strathcona’s sampling methodology was not appropriate for the type of deposit which led to the latter’s resignation – and a very public spat.

With the higher grades included – and with the prospect of perhaps being able to mine to higher grades still than even the higher Snowden assessment, which takes in a much bigger mined bulk sample rather than a smaller section of it and that could miss some of the high grades altogether, the case for development takes on a very different picture.

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