What's another $825 billion?

As we near the inauguration at the end of this month, a wave of change is certainly coming to the United States of America. Unprecedented levels of debt is one thing, but it seems like they are at least taking the bulls by the horn. 

All this bodes quite well for gold, regardless of what the short term market may think.

Reflecting back on the last little while, the Commodity Exchange disparity still exists - no default happened on the fateful December 29, 2008 as so many experts have called it. 

CNBC discusses this back in October. This is another lesson in taking external opinions with a grain of salt. While the price disparity still exists - it occurs with another commodity that most people buy far more often - oil. 

At the local gas station in Canada we are seeing $0.85+ a liter, all the while crude is trading at a historic low of $35/barrel (or about $0.35/liter)...anything glaringly obvious here? If you thought the local gold shop running out of bullion and selling an ounce for $850 or about $50 above the trading price - it's less than 10% premium. Not quite so bad now is it?

Crude prices fall below $35 for the first time this year on weak economic data

NEW YORK (AP) -- Oil prices tumbled below $35 a barrel Thursday as new employment claims rose and government reports show that unused gas and oil inventories continue to build.

Light, sweet crude for February delivery fell $2.35 to $34.93 a barrel Thursday on the New York Mercantile Exchange. At one point prices fell to $34.65.

Prices have fallen 27 percent in just a week and may hit new five year lows, analysts said.

"It was very predictable that January was going to be ugly, but I'm not sure if anyone thought it would be this ugly," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

Kloza said trucking companies have seen an huge drop in business as orders dry up, just one example of how demand for energy has fallen away.

OPEC lowered its energy demand forecast for 2009, with investors already shrugging off production cuts of 4.2 million barrels a day by member countries. The Organization of Petroleum Exporting Countries said in its January report that it expects world demand for crude will fall 180,000 barrels per day in 2009, compared with the previous year.

In other news, Democrats unveiled the next round of stimulus package - to be honest it seems more tailored to the public so let's hope that will bring some confidence back into the equity markets - I see tax rate cuts, individual benefits, and no mysterious bailout for toy arrow companies... I'll keep my fingers crossed.

WASHINGTON (AP) -- House Democrats are circulating an $825 billion economic stimulus measure that emphasizes health care, education and highway construction as well as tax cuts for individuals and businesses.

A summary of the measure shows spending totaling roughly $550 billion and tax cuts of $275 billion, although the totals are expected to shift considerably as Congress works on the bill.

Democratic leaders plan to unveil the legislation later today. The Associated Press obtained a copy in advance.

Democratic leaders have pledged to have a bill ready for President-elect Barack Obama to sign by mid-February.

The US Dollar Collapse

The long-held assumption that US assets - particularly government bonds - are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter.

Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.

The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.

Writing on his blog , Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."

He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.

Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."

He said investors would, rightly, suspect that the US would have to generate major inflation to whittle away its debt and this dollar collapse means that the US has less leeway for major spending plans than politicians realise.

Happy New Years! Is 2009 going to be a year of recovery?

The first few trading days of 2009 is commencing in hours, can it follow up the decent rebound of the last few days of 2008?

WASHINGTON (Reuters) - The U.S. economy slipped into recession in December 2007, the nation's business cycle arbiter declared on Monday, and the downturn could be the worst since World War Two.

The National Bureau of Economic Research said its business cycle dating committee members met by conference call on Friday and concluded that the economic expansion that started in November 2001 had ended. The previous period of economic expansion, which ended in 2001, lasted 10 years.

The current recession, which many economists expect to persist through the middle of next year, is already the third-longest since the Great Depression, behind only the 16-month slumps of the mid-1970s and early 1980s.

"I think that we've got a ways to go, that this is going to be probably a deep and long recession," Jeffrey Frankel, a Harvard University economist who sits on the NBER's committee, told CNBC television. "It could be the worst post-War recession. We don't know yet."

The NBER does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a decline in economic activity, spread across the economy and lasting more than a few months.

I have my doubts, and rightfully so. According to US, recession has been in effect for about 12 months so far. Here are some factual numbers from NBER (The National Bureau of Economic Research ) again.

Not counting the Great Depression of 1929, we're essentially half way through this mess. The next longest recession is 24 months! Slight optimism yet, worst case scenario we have another 11 months and a bit of overall market deteriorations to go.

Best case scenario, things correct in 4 months in time for April and rosy markets again. Given the US economic figures of late though, it's difficult to imagine that.

With that said, all this points to higher resources prices. Good things come to those who wait. Happy New Years, may we all look forward to a much more prosperous 2009. Thanks for reading and visit often!

The National Bureau of Economic Research — the widely acknowledged arbiter of recessions — announced today that a recession began in December 2007. That means the downturn is now a year old, and no one thinks it’s on the verge of ending.

Here are the longest recessions of the last century:

1929-33: 43 months 1910-12: 24 months 1913-14: 23 months 1920-21: 18 months 1973-75: 16 months 1980-81: 16 months

Economists have been forecasting that the current recession will likely end sometime in the spring (which is, presumably, when some of the new stimulus money will start to be spent). If they’re right, this recession will be roughly as long as the 1973-75 recession and the 1980-81 recession, both of which were 16 months. To find a longer one than that, you have to go back to the Depression.

Remember, too, that forecasters have been far too optimistic over the past year. At some point, that will change. But for now, the best bet seems to be that this recession will last for more than 16 months.

Counting down to last trading days... NG.to, MAI, TNR, GG

Another week of exciting developments and trading leading up the final days of trading in an otherwise turmoil-filled 2008. 

NovaGold is surrounded with rumors of a buyout. Since dipping to its lows of $0.60, NG.to made a surprisingly rebound last Friday and yesterday with a 60-70% gain per day. Currently it's up another 20% to $2.20. Rumors of spinout of Alaskan property Rock Creek to major is storming news sites and getting investors a run for their money. 

Brien Lundin must be liking this pick, calling it a buy at $0.60 last few weeks. Can't say much for his other selections of late...

Lundin says buy NovaGold

2008-12-02 23:05 ET - In the News

Brien Lundin, in the November, 2008, edition of the Gold Newsletter, says buy NovaGold Resources Inc., recently $2.45. Mr. Lundin said buy NovaGold six times between May, 2001, and December, 2007, at prices ranging from 64 cents to $15.97. Assuming a $1,000 investment for each of the six buys, the $6,000 investment is now worth $5,198. The newsletter editor says chief executive officer Rick Van Nieuwenhuyse has not lost confidence in NovaGold's strategic plan. Mr. Lundin also says Mr. Van Nieuwenhuyse is more resolute than ever that he is on the right track. The company is ramping up to produce 100,000 ounces of metal yearly from its Rock Creek gold mine in Alaska. Rock Creek is a conventional open-pit mining operation that is run year-round. The gold producer has also "delivered excellent results in support of company plans to produce a feasibility study and start permitting in early 2009." Drill highlights include 130 metres of 3.58 g/t gold. As for Galore Creek, the goldbug says he will wait until the end of the year to see how the company plans to develop the project. The stock market guru still believes NovaGold is a company worth buying for the long term.

What's great about this?

Well for one thing, it shows how vialble this area of the world is for large scale deposit and production. And remember TNR Gold Corp? It has 50% joint venture at Shotgun project with NovaGold, not to mention a giant early stage property at the footsteps of the mammoth Pebble project that BHP Billiton owned before - Iliamna property... I think many majors would consider the project if only the credit markets were not so shaky right now. 

Honestly, for $0.05 a share for TNR these days, it's not too much to risk - and a tremendous amount to gain.

A reminder as well seeing as it's December - Minera Andes should be delivering an update on Los Azules 11.2 billion pounds of copper very soon with their scoping study. I personally can't wait to see their cost per pound of production and more! Minera Andes is trading at $0.50 - down almost 1/5 from their $2.50+ stock price earlier in 2008 - but yet they are making money and with an updated inferred resource with a large elephant copper deposit - featured by Canaccord.

Let's hope the rate cut today by US gives more optimism and will wake the public up to the inflation that is coming late 2009. Auto bailout or not, no amount of low-quality and horrid resale value Ford and Chryslers will move the economy - $15 billion won't even be enough at the rate the factories are burning through cash. it has been said that for each car Ford sells, $3000+/car in legacy costs is added on.

$3000. 

Of union fees, dues, benefits, and pensions.

If GoldCorp (GG.to) ran a terrible business and it lost money quarter after quarter - does the government come and say "Oh that's not good!" and give them billions to burn through because they are paying their contractors $300/hour???

Things like this makes me see why people get really upset and throw shoes at Presidents.

Reserves? Types and categories

Speaking of 43-101 resources, this is usually when a junior mining company jump from a lofty dream of finding precious metals or anything worthwhile in the ground - to something tangible... or as some goldbugs like to refer to it as - pounds in the ground.

Let's review the few categories - which generally increases in quality and accuracy, as more holes are drilled and a better idea of how the deposit is formed underground can be projected.

Reserves

Inferred: Usually only crude, high level ground survey or statistical "sampling" of the area has been performed. Not enough actual testing has been performed. "Gee, it kind of looks like that outcropping way over there has some gold in it too; it looks like it starts here and continues all the way." 

Indicated: Only a "few" drill core samples and assays of those cores may be completed and sufficient to calculate tonnage and grade. Inferred projection of the "goodies in the ground" at a measurable distance away from the drill holes is permissible with limitations. It is very expensive to drill every few feet, so you have to make reasonable assumptions about what is hidden between the drill holes; it may be a bonanza, it may be nothing. 

Measured: The thickness, grade (in grams of gold per ton of host rock), distribution and extent of the deposit is "fully" known, or at least with great statistical confidence. Where the ore starts and stops in every direction should be "known." Many, many drill holes and assays are completed and analyzed. Relative concentrations of gold ore to host rock and overburden are "known."

Reserves

The term "Reserve" is used only for mines that are actually producing or very near that point. Much more is known about the richness, depth and expanse of the ore body. Drilling is complete and assays have been verified. Reserves are classified as proven, probable or possible. 

Proven: The actual entire ore reserves are stated explicitly in terms of the mineable tons. The chemical and metallurgical properties of the mineralization are very well known and documented. The mining method is clearly identified and optimized. The estimate of the "mine life" before resources are exhausted is extrapolated. All of the supporting infrastructure, ancillary requirements and capital costs are identified and indexed to expected price and "net profit" per ounce. This is the most important category and should always be carefully analyzed when picking a potential stock for inclusion in your portfolio.Almost everything else is a "sales pitch." You've been warned.. 

Probable: Only the mineable ore grades and tonnage are stated. The vein thickness is known and the way the gold ore lies in the ground is also known fairly well. Where mineralization starts and stops is reasonably estimated. This is often estimated from following industry accepted and permissible "ethical" procedures after drill results. 
. 
Possible: This is a big estimate of how much gold might be here; it is sometimes referred to as "potential" How many of us know people that never lived up to their "potential" for one reason or another? Same thing here. It may be no more than some geo-pseudo-scientific guess based on little more than review of earth mapping satellite imagery or surface surveys. 

The ore can migrate from one category to another over time as the deposit is better measured and understood after more drilling and extraction is completed. Any given "zone of occurrence" can have only one classification at any given time. Lodes can turn out to be either richer or leaner than initially "guesstimated." It is NEVER an exact science, errors are inevitable. A simple decimal point higher or lower in any mathematical measurement can be the difference between profit and failure.

DOW-Gold Ratio, Tax Loss Selling, and CIBC Jeff Rubin Speaks!

My apologies for the lack of updates last few days. Needless to say this week the optimism on Wall street came to a screeching halt on Monday with a near 10% drop on DOW and major indexes. The 14% 4-day rally last week is only going to last so long.

CIBC's Jeff Rubin says gold will soar (along with oil and other key commodities) on BNN Monday evening.

$1.5 trillion US deficit = 11-12% GDP

"War Level deficits" - Vietnam and Korean War Level mortgaging the US future. He calls it future taxpayers generations afterwards might wonder why the government chose to mortgage.

He goes to advise possible monetization of these deficits (as they have in the past) - unlike Brazil and Argentina - people lend money in US$ Funds. 

"When US tries to finance these deficits - the US$ is going down." Instead of sending $1.5 trillion to public - might give it to Federal Reserves Board to spend, resulting in inflation forces = higher commodity prices, real estate, and goods. 

________________

The chart to the left is from an intelligent investor in Minera Andes. The chart tracks the volatility in the DOW to Gold index over time.

The index, as its name suggests, compares the DOW Index number to the value of gold at that certain point in time to achieve a ratio. As you can see in the last little while the ratio has been jumping all over - similar to the VIX^ index we discussed in previous entries. 

This environment is perfect for daytraders - difficult for value investors. Short term optics remain blurry - Warren Buffet's entry point 2 months ago could not have been worse - so far. In 3-5 years he might very well be correct as a value investor - but the short term challenges for any investors remain as the only clarity in this market. 

__________________________________________

On a more positive front, Tax Loss Selling seems to have subsided for a bit - perhaps the sellers were using their redemptions on a shopping spree on Black Friday? 

For those unfamiliar with the Tax Loss Selling rule here it is in a nutshell. Hopefully that means we will see a slight turnaround in markets in early 2009.

Since we're heading into December, the timing is right to look at a possible silver lining to those investing losses. 'Tis the season for tax-loss selling – when you sell equities that are losing money to claim the tax advantage that comes with capital losses.

Experts are expecting a huge amount of tax-loss selling this year because the conditions are perfect for it. Over all, share prices have plunged (as of yesterday, only 12 of the 241 stocks on the S&P/TSX composite have gained in 2008) and the markets have already seen big selloffs, particularly in September and October.

Losses are also coming after a few good years on the markets, which means that many investors have claimed capital gains over the past three years. According to tax expert and Globe and Mail columnist Tim Cestnick, the issue of capital gains is one of two crucial factors for investors in deciding whether to take advantage of tax-loss selling. (The other: “If you just don't like the investment any more.”) If you file for losses this year but have filed capital gains in the past three years, you can get a refund for some of the taxes you paid.

Great List of Useful Mining / Geological Glossary Terms

Airborne survey - A survey made from an aircraft to obtain photographs, or measure magnetic properties, radioactivity, etc.

Alloy - A compound of two or more metals.

Alluvium - Relatively recent deposits of sedimentary material laid down in river beds, flood plains, lakes, or at the base of mountain slopes. (adj. alluvial)

Anomaly - Any departure from the norm which may indicate the presence of mineralization in the underlying bedrock

Assay - A chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained.

Assay map - Plan view of an area indicating assay values and locations of all samples taken on the property.

Assessment work - The amount of work, specified by mining law, that must be performed each year in order to retain legal control of mining claims.

Basement rocks - The underlying or older rock mass. Often refers to rocks of Precambrian age which may be covered by younger rocks.

Base metal - Any non-precious metal (eg. copper, lead, zinc, nickel, etc.).

Basic rocks - Igneous rocks that are relatively low in silica and composed mostly of dark-colored miner

als.

Bear market - Term used to describe market conditions when share prices are declining.

Bedding - The arrangement of sedimentary rocks in layers.

Biotite - A platy magnesium-iron mica, common in igneous rocks.

Bulk sample - A large sample of mineralized rock, frequently hundreds of tonnes, selected in such a manner as to be representative of the potential orebody being sampled. Used to determine metallurgical characteristics.

Bullion - Metal formed into bars or ingots.

Bull market - Term used to describe financial market conditions when share prices are going up.

Byproduct - A secondary metal or mineral product recovered in the milling process.

Capitalization - A financial term used to describe the value financial markets put on a company. Determined by multiplying the number of outstanding shares of a company by the current stock price.

Cesium magnetometer - An geophysical instrument which measures magnetic field strength in terms of vertical gradient and total field.

Chalcocite - A sulphide mineral of copper common in the zone of secondary enrichment.

Chalcopyrite - A sulphide mineral of copper and iron; the most important ore mineral of copper.

Chip sample - A method of sampling a rock exposure whereby a regular series of small chips of rock is broken off along a line across the face.

Chromite - The chief ore mineral of chromium.

Claim - A portion of land held either by a prospector or a mining company. In Canada, the common size is 1,320 ft. (about 400 m) square, or 40 acres (about 16 ha).

Clay - A fine-grained material composed of hydrous aluminum silicates.

Complex ore - An ore containing a number of minerals of economic value. The term often implies that there are metallurgical difficulties in liberating and separating the valuable metals.

Concentrate - A fine, powdery product of the milling process containing a high percentage of valuable metal.

Core - The long cylindrical piece of rock, about an inch in diameter, brought to surface by diamond drilling.

Country rock - Loosely used to describe the general mass of rock adjacent to an orebody. Also known as the host rock.

Cyanidation - A method of extracting exposed gold or silver grains from crushed or ground ore by dissolving it in a weak cyanide solution. May be carried out in tanks inside a mill or in heaps of ore out of doors.

Cyanide - A chemical species containing carbon and nitrogen used to dissolve gold and silver from ore.

Development - Underground work carried out for the purpose of opening up a mineral deposit. Includes shaft sinking, crosscutting, drifting and raising, stripping/open pit mining.

Development drilling - drilling to establish accurate estimates of mineral reserves.

Diamond - The hardest known mineral, composed of pure carbon; low-quality diamonds are used to make bits for diamond drilling in rock.

Diamond drill - A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections, two cm or more in diameter.

Disseminated ore - Ore carrying small particles of valuable minerals spread more or less uniformly through the host rock.

Drill - There are various types of drills for exploration such as a diamond drill (produces core) or reverse circulation drill (produces chips). Other types of drills are used in the mining process which do not produce a core, but are used to make circular holes in the rock which are filled with explosives.

Drill-indicated reserves - The size and quality of a potential orebody as suggested by widely spaced drillholes; more work is required before reserves can be classified as probable or proven.

Dyke - A long and relatively thin body of igneous rock that, while in the molten state, intruded a fissure in older rocks.

EM survey - A geophysical survey method which measures the electromagnetic properties of rocks.

Epithermal deposit - A mineral deposit consisting of veins and replacement bodies, usually in volcanic or sedimentary rocks, containing precious metals or, more rarely, base metals.

Exploration - Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore.

Fault - A break in the Earth's crust caused by tectonic forces which have moved the rock on one side with respect to the other.

Ferrous - Containing iron

Flow-through shares - Shares in an exploration company that allow the tax deduction or credits for mineral exploration to be passed to the investor.

Gabbro - A dark, coarse-grained igneous rock.

Geiger counter - An instrument used to measure the radioactivity that emanates from certain minerals by means of a Geiger-Mueller tube.

Geophysical survey - A scientific method of prospecting that measures the physical properties of rock formations. Common properties investigated include magnetism, specific gravity, electrical conductivity and radioactivity.

Geophysics - The use of geophysical techniques to search for mineral deposits. Common geophysical surveys include: magnetic, electromagnetic, induced polarization, resistivity and gravity

Geothermal - Pertains to the heat of the Earth's interior.

Grab sample - A sample from a rock outcrop that is assayed to determine if valuable elements are contained in the rock. A grab sample will not provide a representative picture of the value of a deposit, only an indication.

Grade - The value of a mineralized deposit. Precious metals are usually expressed as ounces per tonne or grams per tonne. Base metals and uranium are expressed as a percent. Diamond values are expressed as value/carat/hundred tonnes. 

Hematite - An oxide of iron, and one of that metal's most common ore minerals.

High grade - Rich ore. As a verb, it refers to selective mining of the best ore in a deposit.

Host rock - The rock surrounding an ore deposit.

Hydrometallurgy - The treatment of ore by wet processes, such as leaching, resulting in the solution of a metal and its subsequent recovery.

Hydrothermal - Relating to hot fluids circulating in the earth's crust.

Igneous rocks - Rocks formed by the solidification of molten material from far below the earth's surface.

Intermediate rock - An igneous rock containing 52% to 66% quartz.

Intrusive - A body of igneous rock formed by the consolidation of magma intruded into other rocks, in contrast to lavas, which are extruded upon the surface.

Mafic - Igneous rocks composed mostly of dark, iron- and magnesium-rich minerals.

Magma - The molten material deep in the Earth from which rocks are formed.

Magmatic segregation - An ore-forming process whereby valuable minerals are concentrated by settling out of a cooling magma.

Magnetite - Black, magnetic iron ore, an iron oxide.

Metallurgy - The study of extracting metals from their ores.

Metamorphic rocks - Rocks which have undergone a change in texture or composition as the result of heat and/or pressure. (ex. Sandstone becomes quartzite)

Minable reserves - Ore reserves that are known to be extractable using a given mining plan.

Mineral - A naturally occurring homogeneous substance having definite physical properties and chemical composition and, if formed under favorable conditions, a definite crystal form.

Open pit - A mine that is entirely on surface. Also referred to as open-cut or open-cast mine.

Orebody - A natural concentration of valuable material that can be extracted and sold at a profit.

Ore Reserves - The calculated tonnage and grade of mineralization which can be extracted profitably; classified as possible, 

probable and proven according to the level of confidence that can be placed in the data.

Outcrop - An exposure of rock or mineral deposit that can be seen on surface, that is, not covered by soil or water.

Overturned - Where the oldest sedimentary rock beds are lying on top of a younger beds.

Oxidation - A chemical reaction caused by exposure to oxygen that results in a change in the chemical composition of a mineral.

Pellet - A marble-sized ball of iron ore fused with clay for transportation and use in steelmaking.

Pentlandite - Nickel iron sulphide, the most common nickel ore.

Pig iron - Crude iron from a blast furnace.

Pitchblende - An important uranium ore mineral. It is black in color, possesses a characteristic greasy lustre and is highly radioactive.

Placer - A deposit of sand and gravel containing valuable minerals such as gold, tin or diamonds.

Primary deposits - Valuable minerals deposited during the original period or periods of mineralization, as opposed to those deposited as a result of alteration or weathering.

Private placement - Sale of shares to individuals or corporations outside the normal market, at a negotiated price. Often used to raise capital for a junior exploration company.

Prospect - A mining property, the value of which has not been determined by exploration.

Prospectus - A document filed with the appropriate securities commission detailing the activities and financial condition of a company seeking funds from the public through the issuance of shares.

Pulp - Pulverized or ground ore in solution.

Qualified Person - A qualified person (QP) is defined in NI 43-101 as an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and the technical report; and is a member in good standing of a professional association.

Quartz - Common rock-forming mineral consisting of silicon and oxygen.

Quartzite - A metamorphic rock formed by the transformation of a sandstone by heat and pressure.

Radioactivity - The property of spontaneously emitting alpha, beta or gamma rays by the decay of the nuclei of atoms.

Reconnaissance - A preliminary survey of ground.

Recovery - The percentage of valuable metal in the ore that is recovered by metallurgical treatment.

Reserve - That part of a resource that can be mined at a profit under current or reasonably anticipated economic conditions which are specified. In addition to the information required for a resource estimate, the technical, operating, legal and financial factors must be considered in a reserve estimate.

Reserve (probable) - Part of a resource for which economic viability has been demonstrated at a confidence level which would justify a commitment to major expenditures.

Reserve (proven) - Portion of a resource for which technical and economic factors have been established at a high confidence level. The term is generally restricted to that part of a reserve which is being developed or mined, or for which there is a detailed mining plan.

Resource - The calculated amount of material in a mineral deposit, based on limited drill information.

Rock - Any natural combination of minerals; part of the earth's crust.

Run-of-mine - A term used loosely to describe ore of average grade

Sample - A small portion of rock or a mineral deposit taken so that the metal content can be determined by assaying.

Sampling - Selecting a fractional but representative part of a mineral deposit for analysis.

Scaling - The act of removing loose slabs of rock from the back and walls of an underground opening, usually done with a hand-held scaling bar or with a boom-mounted scaling hammer.

Scintillation counter - An instrument used to detect and measure radioactivity by detecting gamma rays; more sensitive than a geiger counter.

Secondary enrichment - Enrichment of a vein or mineral deposit by minerals that have been taken into solution from one part of the vein or adjacent rocks and redeposited in another.

Sedimentary rocks - Secondary rocks formed from material derived from other rocks and laid down under water. Examples are limestone, shale and sandstone.

Seismic prospecting - A geophysical method of prospecting, utilizing knowledge of the speed of reflected sound waves in rock.

Silica - Silicon dioxide. Quartz is a common example.

Siliceous - A rock containing an abundance of quartz.

Slag - The vitreous mass separated from the fused metals in the smelting process.

Staking - The measuring of an area of ground and marking with stakes or posts to establish and acquire mineral rights.

Stockpile - Broken ore heaped on surface, pending treatment or shipment.

Sulphide - A compound of sulphur and some other element.

Taconite - A highly abrasive iron ore.

Tailings - Material rejected from a mill after most of the recoverable valuable minerals have been extracted.

Tailings pond - A low-lying depression used to confine tailings from the mine operation, the prime function of which is to allow enough time for heavy metals to settle out or for cyanide to be destroyed before water is either recycled back into the mill operation or treated before discharge into the local watershed.

Talus - A heap of broken, coarse rock found at the base of a cliff or mountain.

Trend - The direction, in the horizontal plane, of a linear geological feature, such as an ore zone, measured from true north.

Uraninite - A uranium mineral with a high uranium oxide content. Frequently found in pegmatite dykes.

Uranium - A radioactive, silvery-white, metallic element.

Vein - A fissure, fault or crack in a rock filled by minerals that have travelled upwards from some deep source.

Volcanic rocks - Igneous rocks formed from magma that has flowed out or has been violently ejected from a volcano.

Wall rocks - Rock units on either side of an orebody. The hangingwall and footwall rocks of an orebody.

Zone - An area of distinct mineralization.

Zone of oxidation - The upper portion of an orebody that has been oxidized.