Do You Know the Drill?
Breaking Down the Complexity of Drill Results
For anyone who isn’t a geologist, drill results can be a minefield. It’s like a secret code, with press releases shrouded in complex jargon and terms like grade, strike and reverse circulation drilling that in reality, very few people understand.
If you’re thinking of investing in precious metals, chances are you’ll want to stay clued up on how they’re performing. But fear not! We’re here to demystify gold drilling and help you to get your investments off to the best start.
First Thing’s First: What Are Drill Results?
In the world of precious metals, drill results are a fairly big deal. Precious metal mining companies, their shareholders, and investors will all rely on a drill results report to determine how much potential there is.
By analyzing a whole host of factors such as the drill depth, the number of drill holes, and the locations and intervals between them, we can understand how much mineral resource is available. This information is then used to impact a company’s share price, but it all depends on the type of drilling program.
An infill drill will confirm the presence of mineralization, whereas a step-out drill will expand the mineralization area and add to the already confirmed resource. Therefore, step-out drill results always have a much greater impact on share prices.
Lets decode some jargon.
So by now, you should be getting to know your step-out drills from your infills, but the precious metal mining language doesn’t stop there. In the glossary below, we’ve covered the key terms you need to know to get to grips with drill results and make your investments count.
Deposits
A deposit is a concentration of minerals that naturally exists beneath the earth’s surface. Examples of precious metal deposits include gold, silver, platinum, and palladium. These are the four most commonly mined precious metals.
Drill Maps and Drill Holes
A drill map shows investors the drill holes where mining companies have drilled into the ground to identify the resource present. As an investor, you should always look for patterns on a drill map.
If drill holes are few and far between, the deposit might not be as abundant as it seems. Ideally, you want to see plenty of drill holes covering a broad location, at regular intervals. For bonus points, find a shallow deposit, as it will require less time and money to recover the precious metals.
Grade, Grade, Grade
Some say investing in precious metals is all about the grade, but what does this mean? The grade indicates the extent of the mineralization and if it’s actually worth drilling. A high grade shows that there is great potential and the area is likely to have an abundance of resources, whereas a low grade is a very small amount.
To determine whether a deposit is worth drilling, look at the price of the mineral. A low-grade gold resource may still pay off if the price of gold is worth more than the expense of drilling - it’s all relative.
Resource Classification
Drill results classify resources into three categories: measured, indicated, and inferred. Any resource that is classified as ‘measured’ means there is a high degree of confidence that there are precious metals present, with ‘inferred’ being the lowest.
Bear in mind that every gold mining company will work to their own resource classification process, classifying deposits higher or lower depending on their internal systems.
Reverse Circulation Drilling
Still a relatively new technique within the gold drilling industry, reverse circulation drilling uses compressed air to create a shift in pressure, driving mineral pieces up to the surface for collection.
Strike!
The strike is the point where the miners struck gold! (Or silver, or iron, or phosphorous rock, or whatever you’re after…) Before the strike, there was only barren rock. This is where the mineralization begins.
Of course, the list of mining lingo is endless, but the help of our handy guide should boost your confidence when it comes to understanding drill reports and making smarter investments.
What is a Great Drill Result?
When reading drill results, knowing the jargon is only the first step. It also helps to know what you’re looking for, but don’t panic! We’ve got you covered.
As mentioned above, some analysts say it’s all about the grade, but the drill holes and their location are equally as important. A good approach is to never look at a drill report in a silo, always compare it to other results from the area. This helps you to note significant findings in the grade and depth.
When looking at the grade, what would be considered a positive result is relative to the type of mineral you’re looking at. In terms of gold drilling, 10 g/t (grams per tonne) would be a high-grade deposit, whereas anything below 1 g/t is considered low.
In conclusion, if you want to get beneath the surface of drill results, it all boils down to the grade and the surface area. You want a healthy balance of both to show that the mineral is of high quality, but also that there’s enough of it to be profitable.
Precious metal mining doesn’t have to be a mystery. We hope that this whistle stop tour of the precious metal mining world will help you to understand results and make smarter investments. By keeping clued up on the latest industry news and updates, you will soon become a super drill result analyst!