Replies to post #78704 on KAT Exploration Inc (KATX)

[Rick-UK]

Hi trawets. Your questions are excellent...

"With the filing of the 43-101 say results are good and we receive the JV with a mining company how do they make a determination of the number of tonnes to be mined in each particular year? This I guess leads to the question of how long will the value (of the minerals gold etc) be reflected in the pps of a mining company?"

I don't have the technical knowledge or experience to give very informed answers. Try asking our resident geologist Geo_Newfie - he's both knowledgeable and very generous with helping to explain matters to us non-experts.

My very little understanding is that proving up the reserves takes time and comes in several phases, with each previous phase "paying" for further phases. The first question is "Is there anything there at all and if so roughly how far might it extend, what is the quality like and are there any issues that need to be considered (eg are there quantities of arsenic that would need dealing with)?"

From that start point would come a whole load of new questions, such as "is the seam consistent at all depths?" or "does the seam extend any further in this direction?" etc, etc. These are only very rough approximations of real questions that no doubt a geologist would laugh at, but hopefully you get the idea. So they continue to add new phases of drilling (and other exploration technicaues to) until they feel comfortable that they know all there is to know about the prospect. Of course this process can take years - for example they are still doing it at Olympic Dam, which was discovered in the '70s. Hence the "bit by bit" approach - even the largest mining companies do not wait around to prove up everything before moving forwards to development and ultimately production. Exploration will continue for as long as it takes to find everything. It's as simple as that really. But this is not a worry to us, because we do not need to find everything straight away, we just need to find enough to produce an NI 43-101 compliant report that proves there is sufficient reserves to be of value. Then our share price should reflect that value. Then they explore and prove up more reserves and our share price goes up again, and so on and so on. Olympic Dam is a good example of this - it's been operating (and hugely profitable for shareholders) for decades, yet they still are exploring and proving up the reserves there. Of course handcamp is nowhere near the size of Olympic Dam, but the concept remains the same.

I hope the above helps