How to Evaluate Drill Results: Reading an Assay Release Without Being Sold To

Summary box

• A headline intercept has three numbers — width, grade, and depth — and all three can be presented to flatter.
• NI 43-101 section 3.3 requires the disclosure to state true widths "to the extent known", to report higher-grade intervals within lower-grade intersections, and to name the laboratory.
• Downhole width is not true width. If the hole cuts the zone obliquely, the reported interval overstates the real thickness, sometimes by a factor of two or more.
• Grade × thickness (gram-metres, or percent-metres) is the fastest way to compare intercepts of different lengths. It is a normalisation tool, not a valuation.
• The absence of a required disclosure is itself information. Regulators mandate these items precisely because omitting them is how results get oversold.

What the law actually requires

Canada's National Instrument 43-101 sets a floor for what a company must publish when it discloses exploration results on a material property. Section 3.3(2) requires the written disclosure to include:

"(a) the location and type of the samples; (b) the location, azimuth, and dip of the drill holes and the depth of the sample intervals; (c) a summary of the relevant analytical values, widths, and to the extent known, the true widths of the mineralized zone; (d) the results of any significantly higher grade intervals within a lower grade intersection; (e) any drilling, sampling, recovery, or other factors that could materially affect the accuracy or reliability of the data...; and (f) a summary description of the type of analytical or testing procedures utilized, sample size, the name and location of each analytical or testing laboratory used, and any relationship of the laboratory to the issuer."

Section 3.3(1) separately requires a summary of the quality assurance and quality control measures applied. Section 3.1 requires the company to name the Qualified Person who prepared or approved the disclosure, and section 3.2 requires a statement of whether a QP verified the underlying sampling, analytical and test data, how, and any limitations on that verification.

Read that list again as a checklist. Every item is a place where a release can be silent.

Reading the headline

A typical headline looks like this:

MTX-24-118 returned 42.0 m grading 3.10 g/t Au from 165 m, including 6.0 m at 14.2 g/t Au.

Four things are being asserted, and each has a follow-up question.

42.0 m. Is that downhole length or true width? These are different numbers and the difference is geometric, not editorial. If a hole intersects a steeply dipping vein at a shallow angle, the drilled length can be several times the actual thickness of the zone. NI 43-101 requires true width "to the extent known" — if the release does not give it, the company either does not know the orientation yet, which is legitimate early on, or has chosen not to say.

3.10 g/t Au. Over what cut-off? An intercept is a composite of individual sample intervals, and the way you choose where the interval starts and stops determines the reported grade. A 42-metre interval at 3.10 g/t that contains 6 metres at 14.2 g/t implies the remaining 36 metres average roughly 1.25 g/t. That is a different deposit from 42 metres of uniform 3.1 g/t material.

from 165 m. Depth drives cost. A 3 g/t intercept at 60 metres may be open-pittable; the same intercept at 600 metres needs underground economics, a much higher grade, and a lot more capital.

including 6.0 m at 14.2 g/t. Mandated by section 3.3(2)(d), so its presence is compliance, not generosity. What matters is the ratio: how much of the contained metal in the headline interval comes from the narrow high-grade core.

Do the arithmetic yourself

Two calculations take thirty seconds and change how the release reads.

1. Grade × thickness. Multiply grade by interval length to get gram-metres (for precious metals) or percent-metres (for base metals).

• 42.0 m × 3.10 g/t = 130 gram-metres
• 6.0 m × 14.2 g/t = 85 gram-metres

So 65% of the contained metal in that 42-metre interval sits in 14% of its length. The wide intercept is largely a narrow high-grade structure with a low-grade halo. That is not bad — many economic deposits look exactly like this — but it is a fundamentally different geometry from a broad, evenly mineralised zone, and it will be mined differently.

Grade × thickness lets you rank intercepts of different lengths on one scale. It does not account for depth, true width, metallurgy, or continuity between holes, so it is a screening tool only.

2. Back out the low-grade remainder.

• Total: 42.0 m × 3.10 = 130.2 g·m
• High-grade core: 6.0 m × 14.2 = 85.2 g·m
• Remainder: (130.2 − 85.2) ÷ (42.0 − 6.0) = 1.25 g/t over 36 m

Now ask whether 1.25 g/t clears a plausible cut-off grade for the mining method implied by the depth. Often it does not, which means the real intercept is the 6 metres, not the 42.

Seven tells

1. No true width, on a project with known geometry. Early holes into a new target legitimately lack orientation data. A company on its fortieth hole into a defined structure does not have that excuse.

2. Selective sampling language. Grab samples, chip samples and "select" or "high-grade" samples are, by definition, not representative of the zone. They are legitimate for reconnaissance and misleading as a headline. If a release leads with a grab sample assay, treat the number as a location marker, not a grade.

3. Missing or vague QA/QC. Section 3.3(1)(c) requires a summary of the quality assurance programme and quality control measures. "Standard QA/QC procedures were followed" is not a summary. You want to see certified reference materials, blanks, duplicates, and their insertion rates.

4. The laboratory relationship. Section 3.3(2)(f) requires the name and location of the lab and "any relationship of the laboratory to the issuer." A related-party lab is not automatically disqualifying, but it is disclosed for a reason.

5. No hole collar table or plan map. Without azimuth, dip and collar coordinates — all required by 3.3(2)(b) — you cannot tell whether the good holes are clustered in one small area or spread across the target.

6. Silence on the holes that failed. A release reporting five holes when the programme drilled twenty is reporting a 25% success rate as though it were 100%. Check the programme size in prior releases and count.

7. Assay caps not discussed. Very high individual assays are usually capped or top-cut in a resource estimate to prevent one sample dominating the model. A press release headline is uncapped. The grade that reaches the resource estimate is frequently lower than the grade that reached the headline.

Context that the release will not give you

A single intercept is close to meaningless in isolation. Three comparisons make it interpretable:

Against the deposit's own history. Is 3.10 g/t above or below the average grade of the existing resource? A "spectacular" hole that grades below the resource average is dilutive to the deposit, not accretive.

Against the cut-off grade in the last technical study. If the project's PEA used a 0.8 g/t cut-off for an open pit, a 1.25 g/t halo is ore. If it used 3.5 g/t for an underground operation, it is waste.

Against peers at the same stage and depth. Grade only means something relative to mining method and depth. Ten metres at 2 g/t from surface in a bulk-tonnage setting can be excellent; the same interval at 900 metres underground is not.

This is exactly the comparison that is tedious to do by hand and easy to do against a structured corpus.

A working checklist

Before you form a view on any assay release:

• [ ] True width stated, or absence explained
• [ ] Cut-off grade and compositing rules stated
• [ ] Grade × thickness calculated, and the high-grade core separated from the halo
• [ ] Depth from surface noted and mapped to a plausible mining method
• [ ] Hole collar table present: azimuth, dip, coordinates, total depth
• [ ] Number of holes reported versus number drilled
• [ ] QA/QC programme described with specifics
• [ ] Laboratory named, with its relationship to the issuer
• [ ] Qualified Person named, and data-verification statement present
• [ ] Sample type: core, RC, grab, chip — and whether it is representative
• [ ] Intercept compared to the existing resource grade and the last study's cut-off

How Mining Terminal handles drill data

Mining Terminal holds a structured corpus of drill intercepts extracted from source filings and exchange releases, with hole ID, from-depth, to-depth, interval, grade, commodity, and — where the filing discloses it — true width. Gram-metres is a generated field, computed from the disclosed grade and interval rather than entered by hand, so it cannot drift from its inputs.

Where a filing does not disclose true width, the field is empty. It is not back-solved from an assumed dip, because a modelled true width presented next to disclosed ones would be indistinguishable from a fact, and it is not one.

To screen intercepts across a commodity, a district, or a peer set, get in touch or ask Nara.

Sources

• National Instrument 43-101 Standards of Disclosure for Mineral Projects, Part 3 — Ontario Securities Commission
• NI 43-101 unofficial consolidation, effective 9 June 2023 — OSC PDF
• CIM Definition Standards for Mineral Resources and Mineral Reserves — BCSC-hosted copy

This article is educational and is not investment advice. Mining Terminal is a data platform, not a broker, dealer or investment adviser.