This stark announcement on the website of Barkerville Gold:
Vancouver, BC – Barkerville Gold Mines Ltd. (TSXV: BGM) (the “Company” or “Barkerville”) announced today that the British Columbia Securities Commission (the “BCSC”) has issued a cease trade order, effective August 14, 2012, disclosing that the Company filed a technical report August 13, 2012 that was not in the required form under National Instrument 43-101 Standards of Disclosure for Mineral Projects.
The Company is advised that the cease trade order will remain in place until the Company files a technical report acceptable to the BCSC and addresses all technical disclosure concerns. The Company is working diligently to address the BCSC’s concerns and will file a revised technical report for the BCSC to review as soon as possible
This news release has been prepared on behalf of the Board of Directors which takes full responsibility for its contents.
J. Frank Callaghan
President and CEO
A mere smattering of what is behind this story comes from the following sketchy report:
The Northern Miner called Garth Kirkham, chairman of the best practices committee at the Geological Society of Canadian Institute of Mining, Metallurgy, and Petroleum (CIM), who was not sparing in his opinion of the 43-101 that Barkerville Gold Mines (TSX-V:BGM) released on Monday night. He said:
The hundred thousand or so samples that George did not incorporate into the software show a grade of -1 in the database. That means a lack of information on the sample, which often happens because the field geologist did not send the core to be assayed because it was obviously not mineralized.
“It’s not just an error, it’s tantamount to selective reporting,” Kirkham continued. “You can’t just say all those -1s, all the stuff that we didn’t sample, actually is mineralized. If that’s the case then you best substantiate that. And he doesn’t.”
A longer more informative—yet still value–report is at this link. I states in part”
Late on August 13, the company released a technical report signed off by Peter T. George of Canmore, Alta. It noted that since the 1860s, lode gold exploration had resulted in the discovery of four significant producers in the Barkerville area, including the Aurum, Island Mountain, and Mosquito mines on Island Mountain, as well as the Cariboo Gold Quartz Mine. The latter is located to the southwest of the first three on Cow Mountain.
Commenting on Stockhouse, someone notes this about Peter T. George:
What info do we have on Mr. George? From what I’m reading he’s a respected geologist. So I ask myself why would a respected geologist, with 40 plus years experience, end his career badly by making up a fantastic, some are now saying impossible, resource estimate? It doesn’t make sense. We have reports that Brent Cook disagrees with Mr. George. So what? Mr. George has all the data on this project. I would appreciate anyone else’s thoughtful opinion.
Nobody provides an opinion.
I found this self-statement in a different NI 43-101 report by Peter T. George;
I, Peter T. George of Suite 1605, 250 Queens Quay West, Toronto, Ontario, Canada, M5J 2N2, hereby certify that:
1. I am a self-employed consulting geologist.
2. I am a graduate of Queen’s University, Kingston, Ontario with an Honours Bachelor of Science (1964) degree in geology and I completed two years of graduate study in geology at Queen’s University (1964-66).
3. I am a Fellow of the Society of Economic Geologists, a Fellow of the Geological Association of Canada and a Member of the Association of Professional Geologists of Ontario (Member #620).
4. I have worked as a geologist for 40 years, with continuous experience as a geologist in the mining industry. I have been directly involved in the preparation of reserve and resource estimates and preliminary assessments. In the past 5 years I have prepared reserve and resource estimates for San Gold Resources, Bissett, Manitoba, Property; Black Pearl Consolidated Minerals Inc., Tully Gold Property, Timmins, Ontario, and am currently retained to complete several other reserve and resource estimates.
5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.
The original new release of June 12 is innocent enough:
The Qualified Person used Amine software for 3D digital modeling in AutoCAD. Amine is fully integrated mining software (drill hole planning, drill hole logging, resource and reserve estimates, stope planning, lateral and vertical development planning, etc) developed by Noranda Limited and now marketed independently by a third-party, Flairbase, of Montreal, Quebec.
Based upon all of the available historic and current drilling and assay data and using cross-sections at 400 foot intervals along a strike length of 3200 feet, the Qualified Person interpreted the outline of the mineralized zone and the outline of pit walls based on a 55 degree slope. Subsequently, in plan-view the Qualified Person created resource and total pit outlines at 100-foot vertical intervals to a depth of 1,000 feet below surface.
For the purpose of estimation of the resource tonnage and grade, 3D solids of 100-foot hypothetical pit benches were created as well as a 3D solid of the total pit in order to determine the stripping ratio of pit waste tons to resource tons Probably 8 to 10 to 1 waste to ore.
For the purpose of initial resource estimation for an open pit, a block model was created with 25x25x25-foot blocks. To calculate the resource, a horizontal search ellipse area that has major and intermediate axes of 100 feet and a vertical minor axis of 50 feet was used and to be considered an “ore” block must have at least 1 drill hole intercept within the search volume otherwise the block was tagged as “waste”.
For estimation of a bulk mining resource, the Qualified Person is of the opinion that these estimation parameters are suitable to classify the resource as an Indicated Resource as defined in NI43-101. Areas where drilling is sparse are classified as waste.
So what is going on here? Perhaps the best and most technical answer is at this link. I quote only a paragraph or two, of what seems like a strange affair.
Meanwhile geologist Brent Cook of the Exploration Insights newsletter, who was one of the few in the industry to publicly raise concerns over the initial resource estimate press release, has also found red flags in the actual report.
“What I’m seeing, what I think he’s doing, is essentially an unconstrained estimate,” Cook said. “Without constraining the high-grade, you’re kind of pushing the grade out into areas where either there is no data, or the data’s been ignored.”
Cook cautioned that he has yet to analyse the report in detail, choosing to wait for his weekly newsletter to provide more commentary on the matter, and generally taking a reserved tone.
“I’m not criticizing what he’s done yet, these are just red flags to me that need to be explained,” Cook said.
For Cook, those red flags include the fact that bench number 3950 in the report contains almost 50% of the overall resource, yet by applying the grade cap, about 70% of those ounces vanish. Just as startling, if the cap is applied to the total resource, 37% of the gold goes away.
“That is odd and suggests grade is being smeared all over the place, and I’m not exactly sure how that happens,” Cook said.
He also pointed to the sensitivity of that bench, which drops down to 895,000 oz. gold indicated and 837,000 oz. gold inferred once the resource is capped.
Overall, Cook said that, like Kirkham, he found the report was missing important details that made it tough to go back and reconstruct what’s been done.
So for now we must wait and see. But credit to those who acted and defended the integrity of the NI 43-101 process.
I may be out on a limb here, but I do not believe a geologist can act as QP for a reserve statement. Once a resource is taken to pit design stage it is up to an engineer to sign off. I don’t know if the 43-101 is simply a resource statement, or if it is a reserve statement. In any case I intend to find out and will report back.
OK, I downloaded the report and looked at it quickly. It is not a reserve statement, although it’s cleverly disguised to appear to be one. Some interesting points….it was done in Amine, which as I recall from my Falconbridge days was a mine planning software. I don’t recall if it was used by our geologists. More common for resourse estimation, particularly for BC is Gemcom, Surpac or Vulcan. The author used 1 foot composites, which I have not see used anywhere before. There are constant references to hypothetical pits, which would normally never be mentioned in a resource statement. I cannot find any statement that he visited the property, and this is a statement that I have seen in every single resource statement I have seen in my career. It maybe there, but I did not see it on my first go round.
Methinks there is less here than meets the eye.
Final comments….He DID visit the site. There are two earlier resource estimates, including one from 2000. Both estimates have far lower grades and tonnages. I can find no evidence that the resource model incorporated structures or domains. Search elipses were spherical, indicating no particular orientation for the mineralization. This is highly unusual, and is in conflict with search elipses used by Giroux in 2000. What it means is that the resourse estimate is simply a big fuzzy ball, with a few internal data points used to extrapolate grades at unknown points. I have seen this before, and am aware of significant grade problems when mining commenced.
I would not rank this very high in terms of the 43-101 reports I have seen.
This creates a dilemma for the Professional Associations. If it is ultimately found that poor technical practices were used that “harmed” the public, then would they have no choice but to remove his accreditation and hence no more 43-101 reports from this person? As well lawsuits could also arise (shareholders v company or company v consultant). People need to be careful when acting as QP’s and taking personal responsibility for resource estimates.
from what I understand Peter George has screwed up estimates before including one from San Gold. my sarcastic conclusion: an old dog who feels like he really knows what he is doing but has no clue
experience does not = capability
the mining industry has experienced an explosion of complexity and detail in the last 20 years for very good reasons including financial failures like Bre-X as well as mining failures and there are a lot of people involved that haven’t figured this out yet.
It would be useful to have his drill composites in excel format rather than PDF. I reviewed it visually but could not find very many composites with gold greater than 0.01 oz per ton. And few holes had more than 10 composites, suggesting to me that the gold “veins” are less than 10 feet wide.
He had no SG so he assumed one. He had no geotechnical pit slope advice so he assumed 55 degrees over 1,000 feet vertical. (That is a huge “stretch” in my experience. When I do Whittle runs I use 45 deg pit walls unless I have geotech recommendations.)
He has some strange logic about how increasing the cutoff doesn’t have any effect on tons or grade. Really???
He did spot checks on QA/QC. This is a gold deposit, not copper. I wonder if he ever heard of Bre Ex???
He appears to assume 100% recovery in his economic “analysis.” He admits there has been no metallurgical testing.
After calculating his “resource” he goes on to opine that the resource potential can be doubled by going another 1,000 ft deeper, and then extrapolates his 4,200 ft strike length to a trend distance of over 4 miles. There is nothing whatsoever to substantiate these claims, and I wonder why he didn’t extrapolate all the way round the earth’s circumference and all the way to the core? Isn’t this kind of writing part of the reason why we developed 43-101′s in the first place?
Based on the hype this property has received I can’t imagine how they ever thought they could get away with a report like this.
This story gets stranger and stranger! On their website BGM issued a news story on June 28/12. They referenced Geoex as the independant authors, but the indicated resource (tonnes and grade) in this announcement are different from the 43-101 that was posted on SEDAR. It is therefore no wonder that a cease trade order was issued.