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Tropical Gold Geochemistry ... | Gold Fineness ... | Supergene Enrichment ... | Oxidized Ore ... |
Review #5 ...
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lateritized gossans
oxidized ore
oxidation of epithermal gold deposits
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Bre-X Fraud
(See Summary for main points)
In 1993, a mineral exploration company based in Calgary, called Bre-X, began
promoting their Busang gold project in Borneo, Indonesia. In July 1995 the
Northern Miner ran an article that Bre-X had proven reserves of 2.4 million ounces
(Moz) of gold in the ground at Busang. Shortly thereafter, a Kilborn engineering
report stated that Busang contained 70 Moz of gold. The vice president of
exploration for Bre-X, geologist John Felderhof, was heard boasting at PDAC in
1996 that they had the world's largest gold deposit with well over 100 Moz of gold
(Goold and Willis (1997)). By May 1996 the stock price for Bre-X had risen to an
incredible $285 (Canadian dollars). In February of 1997, Freeport-McMoRan, one
of the world's largest producers of copper and gold and holding company of the
giant Grasberg Cu-Au porphyry mine, also in Indonesia, outbid other suitors,
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including Placer Dome and Barrick, to do a deal with Bre-X to acquire Busang. Prior
to Freeport's due diligence evaluation of the Busang site, the chief geologist for
Bre-X, Michael de Guzman, fell from a helicopter. A body was recovered in the
jungle over time, but it was mostly eaten by wild pigs and not recognizable.
Freeport drilled twin holes and collected duplicate samples. Investigation of the
gold grains in the original samples showed large, rounded and abraded grains with
silver rims that were found only in the coarse reject samples assayed by Bre-X,
whereas the new drill core samples contained little gold and it was fine-grained.
Freeport knew they were looking at sample tampering leading to false assay
results at Busang.
Shortly thereafter, Strathcona Mineral Services presented an
independent report documenting the Busang fraud: the drill core
samples had been carefully and systematically salted with alluvial
gold grains to produce the amazing gold assay results that provided
the basis for the resource calculations. The Bre-X stock price fell
rapidly with this news. At its peak, Bre-X was worth six billion dollars.
By the end of March, 1997, in the stock market crash that followed
the news of the fraud, investors lost an astounding 3 billion dollars.
Following the Bre-X scandal of 1997, confidence in gold exploration at tropical
latitudes dropped around the globe; exploration funds dried up and research on
gold behaviour in tropically weathered gold deposits lost its glitter. It would take
close to a decade to bounce back again.
To protect the Canadian investor from future similar fraud, the Canadian Institute
of Mining (CIM) has created the National Instrument (NI) 43-101, which outlines
the standards required for disclosure (such as Company news releases and
announcements of resource calculations) of mineral projects. The instrument also
requires that a qualified person (QP) sign off on the information. The QP should be
a reputable professional geoscientist or engineer who has knowledge of the
mineral property concerned and who has a minimum of 5 years' experience in the
mineral commodity and is qualified to make the statements in the report.
With the resurgence in tropical gold exploration, driven by high gold price and a
multitude of recent primary gold discoveries in the tropics (as noted in Primary
Gold Discoveries in the Tropics: Table 1), the exploration geologist today is facing
a generational knowledge gap with regard to the tropical geochemistry of gold.
Most of what is in the literature today dates to at least twenty years ago and there
has been a lack of common terminology amongst these researchers. As well, a
number of unnecessary new terms and categories have been proposed.
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The revival of tropical gold geochemistry should start with common ground.
Figures of laterite regolith profiles used in gold dispersion
studies of lateritized primary gold deposits should include,
whenever possible, the entire regolith, from the weathering
front at depth to the surface soils, and contain the following.
clearly differentiate each of the individual regolith
horizons present, including the overlying A and B soil
horizons
position of water table (if possible, determine position during wet and dry
season)
position of weathering front (oxidation front) at depth
location of test samples (pore water, soil or regolith) plotted along the
regolith profile
pH conditions (if possible)
use scale bars to indicate thicknesses of zones
Sometimes the researcher has to be resourceful and creative to be able to sample
from as many of the regolith horizons as possible in one project area. This could be
achieved through pitting, sampling roadcuts, open pit bench exposures and mine
adits, and drill core to be able to thoroughly sample along a regolith that may
reach one hundred meters or more in thickness. Drill core data can be useful for
determining depth of oxidation (weathering front), but for the upper horizons, drill
core is often unreliable, as core loss is common in the clay rich horizons of the
laterite regolith.
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In the upper soil horizons, gold complexes are formed in the A soil horizon and
leached by percolating meteoric waters to accumulate in the lower B soil horizon.
The gold is released; either dissociated or desorbed from the organic complexes in
the reducing environments characteristic of the lower B soil horizon. This makes
the B soil horizon the ideal sampling medium in soil surveys.
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Mechanical dispersion
(See Summary for main points)
Wide dispersion halos of gold at surface are first and foremost the result of the
deep, chemical, lateritic weathering processes that take place in the saprolite,
mottled zone, laterite, and soils.
Exposure of lateritized gold deposits to nature's elements of wind, water and
gravity results in the further lateral and vertical dispersion of gold particles at the
Earth's surface. For example, with the heavy rains characteristic of tropical
latitudes, gold grains may be dispersed across the surface by sheet wash, collecting
in pockets and potentially forming placer deposits. Resistant gold in quartz vein
fragments settle through the upper soil horizons below into the laterite and enter
the stone line.
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Tropical Gold Geochemistry ... | Gold Fineness ... | Supergene Enrichment ... | Oxidized Ore ... |
Review #5 ...
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Figure 1: The story of Bre-X should never be forgotten as its effects are still felt today. Investors remain
wary of gold projects in Indonesia and elsewhere in tropical jungles. Young geologists entering the field
today are not familiar with tropical gold geochemistry due to a lack of research funding following this
deceit (Bre-X book: Goold and Willis (1997)).
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Figure 2: Idealized regolith profile indicating (hypothetical) location of samples collected; note the
difference in regolith thickness over the quartzite and the shale and that the weathering front has a
different contact depending on rock type: straight over quartzite and wavy over the shale (source: D.
Voormeij)
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Figure 3: Gold dispersion of weathered primary gold system in the laterite regolith of Af climate
(source: D. Voormeij)
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Figure 4: In this cross section of the Posse gold deposit in the tropical savanna "cerrado" of Brazil, the
regolith profile on the right shows the stone line is a semicontinuous horizon 0.5 to 1 m thick, above the
ferruginous zone. It is comprised of ferruginized quartz fragments, scattered pisoliths and rare iron
crust fragments, all set in a goethitic-kaolinitic clay matrix (Porto and Hale (1995)).
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Figure 5: Schematic representation of lateritic lowering over time, resulting in a regolith profile that
contains lateritized quartz vein fragments, gold particles, pisoliths, and duricrust fragments (Porto and
Hale (1995))
Note: large tables may be truncated by this print process, if this happens then use your browser Print
Preview and Shrink-to-Fit to print these tables individually from the table window
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