Grassy Mountain: RESOURCES
Several computer
and hand generated models have been constructed
to estimate the geologic resource. An
open pit feasibility was completed by Kilborn
in 1990 which incorporated previous PAH resource
modelling. In 1990 using a 0.020 opt Au
cutoff, PAH calculated a measured and indicated
resource of 17.2 million tons at a grade of
0.061 opt Au for a total of 1.05 million ounces.
Contained silver totalled 2,610,000 ounces.
The database utilized for this study consisted
of 180 drill holes in the main deposit area.
The drilling is predominantly vertical and angle
reverse circulation rotary drill holes with
some core holes. The drilling was contracted
by Eklund Drilling of Carlin, Nevada.
Assaying of the drill holes was performed by
Chemex Labs in Boise, Idaho. Chemex Labs
also performed check assays on all of the holes
on 100 foot intervals. PAH reported that
the check assays performed by Chemex demonstrated
good correlation to the original assays.
In addition to the check assay work done by
Chemex, triplicated check assays were also performed
by Hunter Mining Labs in Reno, Nevada and by
Cone Geochemical Labs in Denver, Colorado.
Atlas prepared an electronic data base from
the drill hole data. PAH did not check
the drill hole database against the original
assay certificates to verify the accuracy of
data entry since the assays were transferred
electronically from Chemex Labs and Atlas had
conducted extensive verification. Various
spot checks on the database was performed by
PAH which did not identify significant outliers
or data entry errors.
As part of the re-evaluation of the deposit by PAH in 1997, a revised geological resource calculation was completed. Using a 0.020 opt lower cutoff, and high-grade cut to 0.30 opt, PAH calculated a measured and indicated geologic resource of 17,376,000 tons grading 0.052 opt Au for total contained gold of 901,785 ounces. Total contained silver was 2,608,137 ounces. As a test of the sensitivity of the resource model to the capped grade, PAH examined the impact of removing the 0.30 ounce gold per ton cap from the open-pit resource model and determined that removing the cap would add approximately 150,000 ounces to the resource estimate.
In the same 1997 study, PAH completed an underground mining evaluation at US$350 to US$400 gold using a 0.10 opt cut off and high-grade cut to 1.5 opt which identified a measured and indicated underground geological resource of 949,125 tons grading 0.342 opt Au that would be amenable to open stope mining and a further 565,502 tonnes grading 0.217 opt Au that could be recovered through drift and fill mining method.
In 2006, Seabridge completed a program to re-examine the economic potential for both the open pit and underground development scenarios at Grassy Mountain. The initial phase of the program involved remodeling of both the open-pit and underground resources incorporating a re-interpretation of geology and ore controls and data from the 39 drill holes not included in the original block model. A 43-101 compliant resource estimation was subsequently prepared by Resource Modeling Inc. which confirmed an indicated resource of 18.7 million tonnes grading 1.54 grams per tonne of gold (924,000 ounces) and an inferred resource of 1.7 million tonnes grading 1.10 grams per tonne (61,000 ounces) assuming a US$600 gold price and a cut-off grade of 0.55 grams per tonne. These results were released on May 1, 2007.
Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Mr. Threlkeld considers that the historical resource estimate of 17.2 million tonnes at a grade of 0.061 opt Au for a total of 1.05 million ounces of gold prepared by PAH in 1990 disclosed above is relevant. Mr. Threlkeld considers the estimate to be reliable, particularly in light of the reputation of the firm that prepared it. Mr. Threlkeld has confirmed that the definitions of “measured resource”, “indicated resource” and “inferred resource” used by PAH when calculating the resources are materially identical to the definitions of those terms in NI 43-101.
