Updated: Mar 1, 2019
March 19, 1997, after the disappearance of Filipino Bre-X geologist Michael de Guzman, marked the beginning of the downfall of one of the largest scams in the history of mineral exploration.
Bre-X Minerals Ltd., a Calgary-based mineral exploration company, bought the Busang Gold Property in Borneo (southeast Asia) in March of 1993 and by October of 1995 announced that a significant gold deposit had been found estimated, by Kilborn Engineering (a division of SNC-Lavalin of Montreal), at 71,000,000 troy ounces (2,400 short tons or 2,200 tonnes) of gold. Independent testing, by Freeport-McMoRan who had won the bid to operate the mine, announced March 26, 1997 that their due diligence (twin-holes of Bre-X drilling) showed insignificant gold contents. By May 4, 1997 independent testing of the Bre-X samples showed that the ore had been salted with gold dust.
In response to the Bre-X scandal, on July 3, 1998 the Ontario Securities Commission submits the proposal for the National Instrument and Companion Policy (NI-43-101 - Standards of Disclosure), as a reformulation of National Policy Statement No. 2-A, to enhance the accuracy and integrity of public disclosure in the mining sector.
In 2007, a BC geologist was charged with nine criminal charges for knowingly inflating the drill results from Southwestern Resources Corp.'s Boka Gold Project in the Yunnan province, China. He admitted to altering assay certificates and faced five counts of fraud over $5,000 and two counts of fraud on the stock market. In 2008, the Hong Kong East China Non-Ferrous International Mineral Development Co bought the Boka Project for $9.4 million. In 2009, documentation was brought forward alleging "certain misrepresentations" related to the sale of the Boka Project.
Canada has, apparently, carried a long reputation as a haven for swindlers and stock promoters with the Vancouver Stock Exchange winning the label of "scam capital of the world" in 1989 by Forbes magazine. It has been over two decades since Bre-X and nearly three decades since being called out as a haven for scams ... are we heading for another downfall?
In 1990, geoscientists joined the professional engineers' association in BC to protect the public interest by setting and maintaining high academic, experience, and professional practice. Their discipline notices document incidences, by registered professionals, after their occurrence as well as persons implying they are professional geoscientists or engineers. How do we prevent these incidences from occurring? Maybe science and its promotion is the answer rather than promoting speculation.
Science is the study of the physical and natural world through observation and experimentation, whereas speculation is the formation of a theory without firm evidence where one hopes to gain something but there is the risk of losing.
Below are common examples of science versus speculation:
Large Geochemical Halo versus Open in All Directions
In the early stages of exploration on a project there is often little information in which to work with for promoting a potential deposit. Reconnaissance and early-stage programs should entail the collection of broadly-spaced stream sediment, talus fines, ridge-and-spur-soil and/or biogeochemical samples in order to give a generalized picture of the area. "Open in all directions" is a speculative statement and is often written without consideration for regionally mapped geology or geochemistry. "A large geochemical halo" is a scientific statement backed by the assay results from samples collected over a defined area.
Geochemical Quality Assurance/Quality Control
Geochemical Quality Assurance/Quality Control (QA/QC) is the measurement of the accuracy (how close to a measured value) and precision (repeatability of a measured value) of the data to provide adequate confidence in the data collection and resource estimation process. These measurements of quality are statistical analyses and, as such, require a minimum number of samples for meaningful results. Ideally, at least 20 to 50 of each type of quality assurance sample should be represented prior to determining the 'quality' of the data. Less than 20 and it's primarily speculation on the quality of the data. At small sample populations, reviewing the lab's internal QA/QC results for each batch would be more accurate since the lab is drawing from a larger pool of samples.
Grams Per Tonne versus Gold Equivalent
There has been a recent rash of news releases documenting results in gold equivalent values during the early stages of polymetallic mineral exploration. Gold equivalent is the calculation of the amount of gold (in the deposit) multiplied by the current gold price plus any secondary ore multiplied by it's own current price then divided by the current gold price. The result is an estimated monetary value for the deposit based on today's prices. Using a resource estimation calculation in the early stages of mineral exploration, 10 to 15 years prior to mine development, is speculation whereas documenting results using the lab's units (parts per million or grams per tonne) is science.
There is a lot of money involved in mineral exploration which tends towards the increased usage of speculation rather than science. We all need to remember that science should come first and leave the speculation to the financial risk assessors.
About the Author:
Diana has over 20 years of experience working in the mineral exploration industry searching for diamonds and metals in a range of roles: from heavy minerals lab technician to till sampler, rig geologist, project manager and business owner. Following a Master of Science degree in diamond indicator mineral geochemistry, Diana has conducted field work in BC, NWT, YT, ON (Canada) and in Greenland. She has also been involved, remotely through a BC-based office, on mineral exploration projects located in South America, Africa, Eurasia, and the Middle East. Diana finished a Ph.D. at UNBC in 2017 researching geochemical multivariate statistical analysis and interpretation. Currently, Diana is the owner of Takom Exploration Ltd., a small geological and environmental consulting firm focused on metal exploration in BC and the Yukon.