Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Columbus Gold (CVE:CGT) shares fell Monday after the company released a revised resource estimate for its Montagne d’Or gold deposit in French Guiana.
The news disappointed investors, who dumped the Vancouver-based junior’s stock.
Shares in the company finished the day at 48 cents, down about 8%, after plunging to a low of 45 cents in heavy volumes during late afternoon trading.
Columbus Gold commissioned the update for the deposit after saying in May that it suspected the initial resource estimate was materially overstated in terms of both grade and contained ounces.
The company said at the time that the initial estimate, compiled by Coffey Mining in 2012, was found to contain “issues with respect to certain estimation methods” related to the inferred gold resource.
The initial report used a cut-off grade of 0.3 grams per tonne yielding a total 5.37 million ounces of gold.
The revised estimate, also prepared by Coffey Mining, shows a smaller inferred gold resource of 4.31 million inferred ounces of gold at a cut-off grade of 0.4 grams per tonne.
Comments
Sergo Cusiani
WHEN TALKING ABOUT
GOLD, PEOPLE LIE.
Reserve estimation report attracts money (as a bait for bank loan or investment). More reserves in the report means much money as an investment.
Some estimation
reports, one of which I have on hand, indicate cut-off grade of 0% (zero %) as
one of several scenarios, which means all the rock in the pit, including dirt, could be considered ore. In this scenario, What do I need a site geologist for?
Some business
officials with political ties are happy of being swindled. Until all of a sudden they unexpectedly find
they run out of ore.
And they do not disdain to use as an excuse something similar to culmination of stupidity as above mentioned “issues with respect to certain estimation methods”!