Scams and other impediments to credible mineral appraisal

"When performing a valuation of a mineral property, a developing mine or perhaps an ongoing operation, the appraiser is typically provided with a range of information prepared by the property owner. This information can include ownership records, geological interpretation, assay data, an estimate of the reserves or resources believed to be on site (tons and grade), mine plans, production forecasts, capital and operating cost projections, and so forth.The appraiser familiarizes himself with the data, analyzes the various reports and then prepares the appraisal. There is usually a site visit, and there may be some effort at comparison of the particular mineral deposit with others in the region or with those of similar depositional characteristics, but for the most part, the appraiser is relying on the corporate documents, tempered by his/her experience in the field. Time is usually of the essence, the cost for the assignment has been trimmed, and therefore independent verification of the various components comprising the underlying data base (legal review, redrilling portions of the deposit, collection of new samples, re-assaying, etc.) is unlikely in most situations.In the case of high-value commodities — gold, silver, diamonds, perhaps the platinum-group elements — there have been numerous examples of the property owners attempting to increase the value of their holdings by nefarious methods. Most of these involve salting the deposit in some fashion; i.e., introducing small amounts of the commodity into samples being sent to a laboratory for analysis so that the resultant assay shows a higher grade (Donaldson, 2002; Greeley, 2001; Lechler et al., 2008 and Meech, 2001). Other schemes to enhance the apparent worth of a property include the use of nonstandard assay procedures, incorrect handling or withholding of the underlying information, and false reporting."