Moriarty on Mining

gold, junior mining

Mining is the art and science of extracting minerals from the ground at a profit.

What I have observed in visiting hundreds of properties is that (1) the level of formal education is far higher than in any other field I am familiar and (2) most geos think that mining is the art and science of spending money. Rarely does the word profit get mentioned or exist and finally (3) most of the people in the mining business should have taken a semester off during their studies to work at a 7-11. It would do wonders for their overall education if they actually understood how to sell a quart of milk at a profit.

If the garimpeiro miners from Brazil or any other third world country were working at Purdy’s Reward in Western Australia run by Artemis Resources and Novo Resource (V.NVO), there would be a bunch of big holes in the ground. (read the whole thing)


In my interviews for I am always looking for the CEO’s view on how the company’s resources are going to be brought to market at a profit. The 43-101 Resource Estimate, followed by a PEA followed by a bankable feasibility study is the standard route and a good one for many projects. But it is a process not an end in itself.

Moriarty, further on in his piece brings up the case of Pretium (T.PVG) whose consultants he quotes as saying, “There are no valid gold mineral resources for the [Valley of the Kings] zone, and without mineral resources there can be no mineral reserves, and without mineral reserves there can be no basis for a feasibility study.” Bob points out that, as of today Pretium, is running a profitable mine in that very zone.

Bob would like Novo and Artemis to get on with mining rather than waiting for proof of a resource which may never come. While I think he is premature in that Quinton Henneigh is just learning how to assess the deposit at Purdy’s Reward, there is certainly a case to be made for digging up a good big bulk sample and running it through a mill. Fortunately, Artemis has a permit to do just that.

Moriarty is a huge believer in the Novo Pilbara play. It is very early days as yet and after a spectacular run the Novo shares have dropped back below $5.00. No results are expected before January and there is every chance those results will be ambiguous as to grade. It will take some time before even the tiny slice of the Pilbara Purdy’s Reward represents will be understood and even longer to determine how to mine it profitably. A source of huge frustration for the people who bought in at $7.50 sure that Novo would be twenty dollars by year end.

But Moriarty is right, mining is about extracting minerals at a profit.



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