West Lombok – Mencanggah
June 7, 2010
I sense a great deal of anticipatory buzz on the subject of Mencanggah, but so far, efforts have been restricted to surface work (rock chip and channel samples). Up to the end of August 2008, five major vein targets, including Tebu Serai, Bising, Telekut, Talat Talat and Gunayang were sampled and mapped as part of a data-acquisition program leading to an upcoming scout drilling program.
- Type of deposit: Epithermal vein and copper-gold porphyry formations.
- Size: Together, the Pelangan and Mencanggah prospects host a combined proven strike length of over 20 kilometres of mineralized epithermal breccias, with individual bodies ranging in thickness from 2 – 30 metres, strike length of 1,000 metres, and a vertical extent of greater than 300 metres.
- Valuation potential scenarios: Because it’s so early for any serious interpolation of data for either Pelangan or Mencanggah, I’ve ganged them together here in what my friend Stuart would call a complete WAG (wild-ass guess). You’ve been warned. I show ranges of five different variables, backing off significantly from the description of the two properties as provided by the Company (see Size, above). For simplification, I show only potential valuation for gold. It just gets too complicated and messy when I bring in the silver. I also don’t go near any suggested potential valuation for porphyry formation. Veins are much more predictable than porphyries. What you see at the surface in a porphyry could just be a lithocap, coming up empty at depth. What you see at the surface in epithermal veins are more likely to be consistent at depth, showing some pinch and swell variability. As for the variables, they are: length (5 km – 15 km); width (5 metres – 10 metres); depth (100 metres – 250 metres); grade (4 g/t – 8 g/t); and value for juniors’ gold ($60 – $100). Unfortunately (or maybe fortunately), I don’t show all combinations of these five variables. They would number 243 scenarios. As a totally speculative exercise, it’s already reaching out there as presented below. The range of possibilities are restricted in deposit size to: smallest of each (length/width/depth): medium of each; and longest of each. Crossed combinations are not studied here. You should be able to gather some sense of what the worst case scenario and best case scenario would be, if my general assumptions as to the ranges of these variables hold. Of interest, if one were to take the mid-point for each of the five variables (see red highlights in the table), the value of these two prospects would be $6.47 per share.
Length |
Width |
Depth |
Tonnes |
Au g/t |
Au oz. |
$/oz. |
$US |
$US/share |
$C/share |
5000 |
5 |
100 |
6,250,000 |
4 |
803,000 |
60 |
$48,180,000 |
$0.59 |
$0.62 |
10000 |
7.5 |
175 |
32,812,500 |
4 |
4,219,000 |
60 |
$253,140,000 |
$3.11 |
$3.23 |
15000 |
10 |
250 |
93,750,000 |
4 |
12,056,000 |
60 |
$723,360,000 |
$8.88 |
$9.24 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
6 |
1,205,000 |
60 |
$72,300,000 |
$0.89 |
$0.92 |
10000 |
7.5 |
175 |
32,812,500 |
6 |
6,329,000 |
60 |
$379,740,000 |
$4.66 |
$4.85 |
15000 |
10 |
250 |
93,750,000 |
6 |
18,084,000 |
60 |
$1,085,040,000 |
$13.33 |
$13.86 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
8 |
1,607,000 |
60 |
$96,420,000 |
$1.18 |
$1.23 |
10000 |
7.5 |
175 |
32,812,500 |
8 |
8,439,000 |
60 |
$506,340,000 |
$6.22 |
$6.47 |
15000 |
10 |
250 |
93,750,000 |
8 |
24,113,000 |
60 |
$1,446,780,000 |
$17.77 |
$18.48 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
4 |
803,000 |
80 |
$64,240,000 |
$0.79 |
$0.82 |
10000 |
7.5 |
175 |
32,812,500 |
4 |
4,219,000 |
80 |
$337,520,000 |
$4.15 |
$4.31 |
15000 |
10 |
250 |
93,750,000 |
4 |
12,056,000 |
80 |
$964,480,000 |
$11.85 |
$12.32 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
6 |
1,205,000 |
80 |
$96,400,000 |
$1.18 |
$1.23 |
10000 |
7.5 |
175 |
32,812,500 |
6 |
6,329,000 |
80 |
$506,320,000 |
$6.22 |
$6.47 |
15000 |
10 |
250 |
93,750,000 |
6 |
18,084,000 |
80 |
$1,446,720,000 |
$17.77 |
$18.48 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
8 |
1,607,000 |
80 |
$128,560,000 |
$1.58 |
$1.64 |
10000 |
7.5 |
175 |
32,812,500 |
8 |
8,439,000 |
80 |
$675,120,000 |
$8.29 |
$8.62 |
15000 |
10 |
250 |
93,750,000 |
8 |
24,113,000 |
80 |
$1,929,040,000 |
$23.69 |
$24.64 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
4 |
803,000 |
100 |
$80,300,000 |
$0.99 |
$1.03 |
10000 |
7.5 |
175 |
32,812,500 |
4 |
4,219,000 |
100 |
$421,900,000 |
$5.18 |
$5.39 |
15000 |
10 |
250 |
93,750,000 |
4 |
12,056,000 |
100 |
$1,205,600,000 |
$14.81 |
$15.40 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
6 |
1,205,000 |
100 |
$120,500,000 |
$1.48 |
$1.54 |
10000 |
7.5 |
175 |
32,812,500 |
6 |
6,329,000 |
100 |
$632,900,000 |
$7.77 |
$8.08 |
15000 |
10 |
250 |
93,750,000 |
6 |
18,084,000 |
100 |
$1,808,400,000 |
$22.21 |
$23.10 |
|
|
|
|
|
|
|
|
|
|
5000 |
5 |
100 |
6,250,000 |
8 |
1,607,000 |
100 |
$160,700,000 |
$1.97 |
$2.05 |
10000 |
7.5 |
175 |
32,812,500 |
8 |
8,439,000 |
100 |
$843,900,000 |
$10.37 |
$10.78 |
15000 |
10 |
250 |
93,750,000 |
8 |
24,113,000 |
100 |
$2,411,300,000 |
$29.62 |
$30.80 |
- Comparison properties: Too soon to say.
- Disposition options: Too soon to say.
- Current status/activities/obstacles: This prospect suggests a very exciting opportunity, but aside from surface work, much work is yet to be done. In 2010, once the West Lombok IUP is issued, plans include more than 2500 metres of Phase 1 drilling. While we wait for the new spatial plan to be announced and the IUP to be issued, the area has seen a great deal of itinerant mining. How the spatial plan and IUP will accommodate both small-scale near-surface mining (without contaminating the ground waters and local miners with mercury processing) and the pursuit of large-scale commercial mining remains to be seen. No Forestry issues.
- Maps:
- See Epithermal Veins (red) in Mencanggah on Google Earth (updated August 30, 2010).
- This map displays the entire 13 kilometre northwest trending corridor that comprises the three main prospects in West Lombok. I include it here to reflect the notion that this represents one big system. On a northwest bearing, the porphyry formations in the lower right (Selodong) give way to a mix of porphyries and epithermal vein systems in Mencanggah, then in turn to the epithermal veins of Pelangan in the northwest. The mass of red streaks pointing to the northwest represent Mencanggah’s epithermal veins.
