The Importance of Reliable Ore Reserve Estimates for Development and Financing of Hellyer

The grade (or value) to volume relationship which constitutes a target orebody is used to show that the concentration of diamonds in an economic deposit may be as low as O.Olg/t. Diamond valuations from an Indonesian deposit demonstrate that the largest 5% of the diamonds in the deposit contributed 25% of the mass of diamonds recovered and 70% of the value from the ore. The need to consider the large stone content and the probability of recovery is used to estimate that the sampling density is required to be as high as 4-10,000ppm for a VLC deposit. This is compared with an acceptable sampling density for a bauxite deposit of 700ppb. A case history of the discovery of a diamond bearing paleo-channel in the Ellendale field in Western Australia illustrates that the sampling task becomes impractical. It requires an excavation in excess of 300,000 bcm of material to prove a 5M hem ore reserve. The conclusion is reached that setting up a small scale mining operation is an appropriate method of proving such an ore reserve and that the Code of Reporting should allow a category of "Mineable Resource" to cover such a situation.