Thread by @gold_squeeze

//THREAD// Can’t wrap your head around news statements like this? Me neither, all those numbers that read like code language. On top of this when I think something is a good drill result the stock won’t move or would even lose some percent. (1/27)

https://twitter.com/JrMiningNetwork/status/1524708636672634880

So that’s why I learned myself how to read those that come out on @JrMiningNetwork. In this thread, I will explain how I read these statements and the main things I look for. Let’s start. (2/27)

First I look at what kind of drill program it is. There are two types of drill programs. Infill drilling and step-out drilling. In Infill drilling the company drills in an area that’s already been drilled in. (3/27)

With step-out drilling the company drills outside of the area that already has been drilled in before. With infill drilling, the goal is to confirm the previous drill results and give a higher certainty of the already found resources in the area. (4/27)

With step-out drilling, the goal is to find gold or silver outside of the already proven area and thus expand the total amount of area.

Both are important, infill drilling gives more certainty on a company’s way to becoming a mine. (5/27)

While step out drilling expands the area where there’s gold and silver in the ground and thus makes the resource bigger. Stocks tend to move more on successful step-out drilling programs. (6/27)

After this, it’s important to look at the numbers included in the news result. Here’s where it gets tricky. A lot of companies write down the numbers in such a way that they look really attractive. Here I have to give all my credit to @DonDurrett. (7/27)

Don made an excellent youtube video about interpreting drill results. Also, check out the rest of his videos on his channel that have a lot of valuable information on gold and silver mining. (8/27)
youtube.com/c/DonDurrett

Back to the actual numbers, because how do I read these? There are a couple of main things that are important, and also some things that could change your view of the results. We will talk about all of these. But first the numbers, there are two things that I look for. (9/27)

One is the grade of the drill hole and two is the length of the drill hole. You will often see companies putting out very high grades, but then it says over 0.2 meters for example. (10/27)

Which is of course a short distance and would not be a significant enough length to prove that there’s enough gold or silver in the ground. So what is a good hole and what is not? (11/27)

In his youtube video @DonDurett, made an easy system for us to identify good and bad drill holes. He has two systems, one for gold and one for silver. For gold, the rules are like this. (12/27)

If the grams per tonne x the length of the drill hole is under 50 it’s not a good hole, however, if that equation is between 50 and 100 it’s a good hole, between 100 – 200 very good, and between 200-500 excellent and everything above 500 is JACKPOT. (13/27)

So in the real world how would this look, let’s take this drill news of one of the stocks we own @goldshore - $GSHR.V. Let’s take a look at this title. They drilled 128.3 meters at 1.1 grams per tonne. 128.3 m x 1.1 g/t = 141. (14/27)

This would be a really good drill hole of @GoldShoreRes $GSHR.V according to Don’s system. They also found an additional zone (step-out drilling) that returned 16 meters at 5.31 grams per tonne. This would give a total number of 85 (16m x 5.31 g/t = 85). (15/27)

Which is also a good drill hole (especially for step-out drilling). So that’s how easy it is to calculate a drill hole for gold, Length x GPT. For silver, it’s a bit different. There’s more silver on the planet, but it’s also cheaper. (16/27)

So you would have to mine a lot more of it to be profitable. But the same principles apply for silver as for gold it’s just different numbers. (17/27)

The numbers Don came up with are like this. Under 500 = Not good, between 500 and 1.000 = good, between 1.000 and 2.000 = really good, between 2.000 and 5.000 = excellent, above 5.000 = JACKPOT. (18/27)

So let’s do a calculation for one of the drill news results of another stock I own @AbraSilver $ABRA.V. In this news statement, you see 294 of AgEq, which means silver equivalent. (19/27)

This means that there are other metals involved as well (this is often the case in silver deposits, because of geology reasons). If we would use Don’s calculations this would give a result of 294 grams per tonne x 67,5 meters = 19.845. This would mean JACKPOT. (20/27)

So now you have a basic system for interpreting the drill results of gold and silver mining companies. There are however some other things to consider as well. I will briefly talk about these, but won’t go in-depth, because that’s not the focus of this thread. (21/27)

But other things to consider are the depth of the drill hole, near-surface is better because it will cost less to mine the gold or silver. The deeper it is the more it will cost. (22/27)

Another important thing, that I learned because of a really smart guy in #mintwit @traderpamplona is what kind of deposit it is. I don’t know enough about this to tell you which deposits are best. (23/27)

But it comes down to that there are several different types of deposits, meaning how the earth is put together. What kind of rocks/sand it is. And some of them are better suited for mining than others. (24/27)

So a company can put out good drill results, but if the deposit is not suited for mining it will still be a bad case. Maybe some of the smart guys in #mintwit can elaborate more on what types of deposits are good and bad? @Comm_Invest, @contrarian8888, @TaviCosta (25/27)

@Comm_Invest @contrarian8888 @TaviCosta So this is my process for interpreting drill results. To sum it up: infill or step-out drilling, length x GPT, distance to the surface, and what type of deposit is it. If you think this was useful please like and retweet, if you have something to add, please comment (26/27)

@Comm_Invest @contrarian8888 @TaviCosta I always want to learn and think we should put out as much knowledge as possible so that we can learn together and get better at this. This would benefit everyone in the end. (27/27)