We’ve all done it: sending a “please see attached” email without an attachment, mistakenly replying to a message about a person to that person, or uploading a draft for publishing instead of a final, cleaned version. But when you’re a gold mining company and you uploaded a filing without removing first the hilariously damaging document comments, you might see your equity fall.
Goldshore Resources (TSXV: GSHR) recently restated their NI 43-101 technical report for the mineral resource estimate for the Moss Gold and East Coldstream deposits. The report was prepared by CSA Global Consultants Canada.
But the attention wasn’t focused on the results of the report. When the company uploaded the filing to SEDAR, they forgot to remove the comments section they noted in revising the document, providing everyone a deeper insight on how the consultants and the mining firm have looked into the technical report.
It is noteworthy that the firm’s stock fell as much as 14% on the day following the faulty SEDAR filing.
For the first few pages, the comments seem harmless and what one would expect: people asking people to review the information and double check on the terminologies.
One would also see how the consultants of CSA Global communicate amongst themselves at the comments section in preparing for the technical report. In one instance, Senior Geologist Niti Gupta asked Global Partner and Principal Geologist, and a peer reviewer for the report, Neal Reynolds, if the line “Several pages are missing including the terms of the NSR” is needed in the document. Reynolds is named as one of the qualified persons for the report.
Reynolds responded by telling Gupta to ask Goldshore or fellow consultant Paul Teniere, adding “figure it out.”
Lake or Gold?
Seemingly, there’s inconsistency in the name of the project. In one instance, the consultants were talking about removing the “Lake” in a map of the property, with Reynolds asking Gupta to request from Goldshore a drafted figure of the site.
Observations from nowhere
At one point, while discussing the mineralization of the Moss Gold Deposit, Reynolds told Gupta that he cannot sign on it as he has not validated the information, asking the latter to revert to a previous version or ask fellow consultant at ERM, David Kaeter, to approve. CSA Global is a part of ERM Group.
“Where do this observations come from? Might make sense to cite those sources clearly. Never seen tellurides mentioned anywhere before, but I suspected them to be present from the whole-rock geochem data. I also haven’t seen the Bourassa report,” Kaeter replied.
CSA Global Manager – Resources (UK), and one of the qualified persons for the report, Matthew Field, then pondered: “presumably from Goldshore?”
It also seems that there are references in the document, like the Bourassa report, that the consultants aren’t aware of.
“This is our report”
Reynolds also appear not too happy with the inputs from Goldshore, commenting that they make the report “long winded.”
“Holy moly this is long winded!!! We are not, or should not, just accept Goldshore text, this is our report and we need to edit it to be summary at an appropriate level. I cannot do this at this late stage, it should already have been done. I think we should delete and replace with the previous report version,” Reynolds commented, tagging Gupta and fellow consultant and qualified person for the report, CSA Global Partner – Americas, Principal Mining Engineer Nigel Fung.
Apparently, a NI 43-101 is an advertisement
In the same vein, Reynolds demanded another part that’s “way too long winded… [to] be edited down to the key points and tables.”
“A Ni 43-101 is a SUMMARY report, it is also an advertisement for us as individuals and a company,” Reynolds added.
Do they know each other?
At one point, Reynolds assumed that Field is also a qualified person for the report on East Coldstream, but the latter corrected him, saying he hasn’t done any work on the deposit.
“No, I have done nothing on East Coldstream, this is news to me! I asked this question some time ago and never received and answer, so assumed Samer was going to be the QP,” commented Field.
At one point, commenting on the report’s claim that past drilling data have been validated by qualified persons, Field corrected it by saying he hasn’t.
“The assay file we received contains a total of 155, 874 samples whose combined length is 181,771.32 m, of these 53,832 samples are from recent MMD holes totaling 51,040.15m – very different to the number quoted here previously,” Field clarified.
It also appears that there are parts of the report that have not gone through observations and checking, alarming mainly Reynolds.
Goldshore forced poor geological modelling
Perhaps the most damaging comment appears in relation to a figure showing an example cross section that shows the validation view plot for gold. Reynolds commented that the block model orientation looked weird and asked if there are different orientations.
Field then replied that it is “the result of some high-grade samples being left in the LG zone and then being interpolated by the LG variography and search ellipses.”
He added that this “harks back to the inadequacy of the HG modelling process forced on [them] by the client.”
“The geological model is poor – how many more times do I need to say this!! This is one of the main reasons why this resource remains Inferred,” wrote Field.
While this Goldshore report proved to be a masterclass on double checking your files before uploading, it cuts a deeper commentary on the work “independent” consultants do for mining firms. When you have report writers who believe their output is an advertisement (and seemingly aren’t too familiar with each other’s roles) and a company who forces an inadequate tool (which the consultant did not raise in their report), it begs the question on how much these technical reports can really be trusted moving forward.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.