Round numbers
12,000,000 square meter x 1 gram gold per surface cubic meter = 12,000,000 grams gold or 387,096 ounces or $503,224,800.00 at $1300 per Troy ounce
15% of 12,000,000 grams= 1,800,000 grams or 58,064 ounces or $75,483,200
That is with a one gram average of a 1cubic meter of pay dirt which is also dependant on depth/cost of overburden.
It is quite probable that the pay layer is significantly better in that 15% limit of area to mine than one cubic meter pay layer which would account for the initial and continued increase of recovered gold to a consistent level of production. It is very possible that their pay layer is greater than one cubic meter and their Estimates of reserves are reasonable.
The only picture that tells it all is the one showing their sluice box. Its old school and also very inefficient.
even the best sluice box's today without a concentrator off the end of it loses up to 30% of their fine gold. Check out the efficient wash plants here. http://www.goldlands.com/
GYST assays from the geological report show from (simple even numbers) .5 to 1.5 grams per cubic meter. so for simplicity, lets say 1gram of gold per cubic meter over all in the pay layer. below is the geological report on the Gorilla from their website.
https://docs.google.com/file/d/0B4T1iRDs4VPKO...t?hl=en_US
Below is a link to a example performa for placer based on 1gram of gold per yard of pay material at 60yrds per hour and based on one shift per 24hrs for a season from the beginning of April to the end of October. From what I understand about Peru, their season of mining can potentially be year round
http://smresources.ca/PerformaApril1toOct31.pdf
The reference of "coarse gold" in the geo report indicates that the source of the gold is very local and good mineral veins will be in the immediate area (also as described in the geo report). However, they are focusing too much (partially from necessity from inefficient equipment) on the coarse gold and taking losses on the finer gold that is literally running off the end of their sluice box. In their condition as is, the only way (off the top of my head) they could possibly combat that is to build a cement pond catcher (mounted on skids) off the end of the sluice box and have a quarter inch screen set up to capture the fines into the cement pond while discarding the larger material into a tailing pile. The catcher pond can be panned out or assayed/metallurgical report and sent out as concentrate.
? Finding a bank to lend money on such a venture is near impossible (I should know). Banks only lend money to those who Don't Need It or mines that have a N43-101.
The other big problem they have is the overburden. In this case clay that has to be stripped away to get into the pay layer (looks like anywhere from 4-6 feet of it). An excavator will solve this, mind you, I would rather a D8 cat for stripping. In their place with limited resources a excavator for now is a good way to go until they get more working capital for good equipment.
Placer is one of the most difficult operations to get off the ground simply because of the start-up capital but moreover because of the N43-101 instrument introduced as a requirement to qualify on the larger and more credible markets than OTC but also as already mentioned on the lending practices.
An N43-101 is more suited to hard rock as it can give definite and consistent numbers of gold per ton in the vein whereas in placer, your reserves can vary widely as you can see in the geological report for the Gorilla project. Thusly, a N43-101 report is near impossible as you have to effectively mine the ground to know exactly what you have. It is a catch 22.
Check out the history of when and why the N43-101 instrument requirement came out. It was the result of a company in the 80's that drilled a bunch of dry holes in a foreign country only to salt the samples from gold filed from the dudes wedding band. It was literally the scam of the century.
In this case based on the inefficiency of GYST equipment, I can safely assume that they are not even skimming from the sluice box let alone perpetuating a market scam...they are just losing a fair bit of gold off the end of their sluice box. I would estimate at least 30% of their assays and up to 70% of the assays
in summary, the DO list priority for these guys
1) either drastically improve the efficiency of their wash plant or replace it with a more efficient model.
2) get their excavator
The DON'T list
1)Never exceed the capacity of your wash plant. Efficient miners get rich. Yardage miners go broke.
The sampling procedure was detailed on page 39 of the geo report for the Gorilla. What they did were test pits by hand to retrieve their samples. It looks like from the results that they did a fair number of hand test pits that were sent for assay. there is a pic of the test pits dug by hand. They used a iron rod to determine the depth of over burden. its a simple procedure really. they pound the iron rod into the ground and know how deep the clay is by the ease or difficulty of pounding the rod in. the rod will pass easily through clay and when it hits the gravel layer will bounce. Take your measurement and vohlah, you have your depth.
I can see why they are concentrating on Peru. For one the labor cost there is far less than say Canada or the States. The other advantage is that historic operations would laugh at 1gram per yard of material but as you can see from the performa example I provided that 1gram per yard is quite rich in this day and age.
What got me interested was on the website. They showed a blip of what they (GYST) are contributing to the local economy. Keep in mind this is the same country that world vision sponsors kids. They were donating school supplies etc for the local school. In a way, the mining is creating employment and a hand up rather than a hand out to the people.
Happy Investing
12,000,000 square meter x 1 gram gold per surface cubic meter = 12,000,000 grams gold or 387,096 ounces or $503,224,800.00 at $1300 per Troy ounce
15% of 12,000,000 grams= 1,800,000 grams or 58,064 ounces or $75,483,200
That is with a one gram average of a 1cubic meter of pay dirt which is also dependant on depth/cost of overburden.
It is quite probable that the pay layer is significantly better in that 15% limit of area to mine than one cubic meter pay layer which would account for the initial and continued increase of recovered gold to a consistent level of production. It is very possible that their pay layer is greater than one cubic meter and their Estimates of reserves are reasonable.
The only picture that tells it all is the one showing their sluice box. Its old school and also very inefficient.
even the best sluice box's today without a concentrator off the end of it loses up to 30% of their fine gold. Check out the efficient wash plants here. http://www.goldlands.com/
GYST assays from the geological report show from (simple even numbers) .5 to 1.5 grams per cubic meter. so for simplicity, lets say 1gram of gold per cubic meter over all in the pay layer. below is the geological report on the Gorilla from their website.
https://docs.google.com/file/d/0B4T1iRDs4VPKO...t?hl=en_US
Below is a link to a example performa for placer based on 1gram of gold per yard of pay material at 60yrds per hour and based on one shift per 24hrs for a season from the beginning of April to the end of October. From what I understand about Peru, their season of mining can potentially be year round
http://smresources.ca/PerformaApril1toOct31.pdf
The reference of "coarse gold" in the geo report indicates that the source of the gold is very local and good mineral veins will be in the immediate area (also as described in the geo report). However, they are focusing too much (partially from necessity from inefficient equipment) on the coarse gold and taking losses on the finer gold that is literally running off the end of their sluice box. In their condition as is, the only way (off the top of my head) they could possibly combat that is to build a cement pond catcher (mounted on skids) off the end of the sluice box and have a quarter inch screen set up to capture the fines into the cement pond while discarding the larger material into a tailing pile. The catcher pond can be panned out or assayed/metallurgical report and sent out as concentrate.
? Finding a bank to lend money on such a venture is near impossible (I should know). Banks only lend money to those who Don't Need It or mines that have a N43-101.
The other big problem they have is the overburden. In this case clay that has to be stripped away to get into the pay layer (looks like anywhere from 4-6 feet of it). An excavator will solve this, mind you, I would rather a D8 cat for stripping. In their place with limited resources a excavator for now is a good way to go until they get more working capital for good equipment.
Placer is one of the most difficult operations to get off the ground simply because of the start-up capital but moreover because of the N43-101 instrument introduced as a requirement to qualify on the larger and more credible markets than OTC but also as already mentioned on the lending practices.
An N43-101 is more suited to hard rock as it can give definite and consistent numbers of gold per ton in the vein whereas in placer, your reserves can vary widely as you can see in the geological report for the Gorilla project. Thusly, a N43-101 report is near impossible as you have to effectively mine the ground to know exactly what you have. It is a catch 22.
Check out the history of when and why the N43-101 instrument requirement came out. It was the result of a company in the 80's that drilled a bunch of dry holes in a foreign country only to salt the samples from gold filed from the dudes wedding band. It was literally the scam of the century.
In this case based on the inefficiency of GYST equipment, I can safely assume that they are not even skimming from the sluice box let alone perpetuating a market scam...they are just losing a fair bit of gold off the end of their sluice box. I would estimate at least 30% of their assays and up to 70% of the assays
in summary, the DO list priority for these guys
1) either drastically improve the efficiency of their wash plant or replace it with a more efficient model.
2) get their excavator
The DON'T list
1)Never exceed the capacity of your wash plant. Efficient miners get rich. Yardage miners go broke.
The sampling procedure was detailed on page 39 of the geo report for the Gorilla. What they did were test pits by hand to retrieve their samples. It looks like from the results that they did a fair number of hand test pits that were sent for assay. there is a pic of the test pits dug by hand. They used a iron rod to determine the depth of over burden. its a simple procedure really. they pound the iron rod into the ground and know how deep the clay is by the ease or difficulty of pounding the rod in. the rod will pass easily through clay and when it hits the gravel layer will bounce. Take your measurement and vohlah, you have your depth.
I can see why they are concentrating on Peru. For one the labor cost there is far less than say Canada or the States. The other advantage is that historic operations would laugh at 1gram per yard of material but as you can see from the performa example I provided that 1gram per yard is quite rich in this day and age.
What got me interested was on the website. They showed a blip of what they (GYST) are contributing to the local economy. Keep in mind this is the same country that world vision sponsors kids. They were donating school supplies etc for the local school. In a way, the mining is creating employment and a hand up rather than a hand out to the people.
Happy Investing
