o3 BLOG | Educational
Gold Assaying Process — What it Means for Investors
Gold Assay Process Explained
An assay is a chemical analysis that identifies the amount of metallic or mineral elements in a rock sample. Gold assaying is the process of determining the amount of gold in rock located within a mineral deposit. Rock samples are obtained through drilling and sent to a laboratory, where they will go under further examination to identify the presence of gold and other minerals. The findings from assays help gold exploration companies determine the quality and potential of a mineral deposit and assist in mapping out targets for future drill programs. When a mining company reports positive drill results, this is good news for investors as this increases the possibility of gold production for a specific area.
While there are many different methods of assaying, the fire assay method is the industry standard for assessing analytical gold element data from high-grade ores. Fire assaying dates back centuries and was the most common technique used by goldsmiths who sought to discover or make precious metals by heating base metals and minerals. Pyrometallurgical processes today use high-temperature electric lab furnaces to process precious metal ore samples, secondary scrap metals, and most platinum group metals. While complex and time-consuming, modern fire assaying is the most accurate way to assess low yield/concentration ores.
The Gold Assaying Process
- Preparation
- Fusion
- Separation of the slag from the button
- Cupellation
A fire assay begins with pulverizing rock samples into a fine powder. Sometimes samples undergo XRF (X-ray fluorescence) analysis to determine their elemental composition. Precision weighing samples and process controls (proofs) at each stage of the assaying process is critical in achieving the most accurate result possible. Reputable bullion assayers in North America adhere closely to the ASTM E1335-08(2017) for fire assay cupellation analysis.
Fluxing and Fusion
Assayers introduce a fluxing agent to the sample as well as a collector metal, such as lead or nickel. The mixture is then subjected to extreme heat (1150 –1450ºC) in a furnace to melt and fuse the sample. The gangue material separates from the collector material during the fusion process, leaving behind a “button” containing the gold. Due to its weight, the button settles at the bottom while the insoluble slag floats to the top.
When the button separates from the gangue, it is removed from the furnace to cool.
Cupellation
Next, assayers extract the gold from the button in a process called cupellation. Cupellation converts the collector (in this case, lead) to lead oxide, where it is absorbed by the porous cupel, leaving behind a gold bead or a “prill.” The prill’s gold content is determined by weighing (gravimetrically) or mixed with a parting solution to dissolve silver, leaving behind gold which assayers analyze further for purity.
Once gold assaying is complete, gold mining companies use the results to determine the grade and concentration of the deposit. Grades that use gold assay results from drill cores must be expressed in metal concentration over a certain length — e.g., g/t over m. While this provides a two-dimensional snapshot of a mineralized area, combining assay results from different locations in the deposit can help create a three-dimensional graph of a gold deposit’s tonnage and grade.
Canadian Assaying Laboratory Regulations
The Canadian Certified Reference Materials Project (CCRMP) is a NRCan program that ensures the reliability of measurements at mineral analysis labs in Canada and around the world by certifying reference materials.
What Gold Assaying Means for Investors
For investors, gold assay results and the grade of a gold deposit play a critical part in the financial analysis of a mining operation. All mining operations have costs, which vary significantly depending on various factors.
When calculating economic feasibility, exploration companies often compare two essential metrics: the average grade of a deposit (derived by a sampling and assaying program) and the cut-off grade.
The cut-off grade is the lowest material grade at which mining is economically viable. Calculating the cut-off grade requires a pre-feasibility study that accounts for all known and projected project expenditures. The cut-off grade is a dynamic figure that can change, often in response to a change in the metal’s market price. The greater the difference between the average and cut-off grades, the more profitable the mine.
Assaying for Gold Bullion
Investment-quality gold bullion requires assays to ensure bullion bars produced by a gold mint fulfil the necessary purity and content standards (>99.5% purity). Given that the price of gold per ounce is based on one (1) troy ounce of pure gold, the assay for 1 ounce coins must indicate the same purity level.
Assaying in Futures Markets
Assaying is not only important for gold stocks — it is an equally critical process in futures markets. Gold must meet the delivery requirements of futures contracts to verify they meet the futures exchange’s high quality and purity criteria. Physical delivery of metals contributes to price convergence between the futures and spot markets.
The mining process can last several years, translating into long-term returns for savvy investors. Positive drill results, combined with substantial financing, demonstrate a mining company’s ability to see a mining project from exploration to production. To learn more about investment opportunities, or to discuss how drill results affect your investment, contact our Investment Relations Team today!
Sources:
https://commodities.bureauveritas.com/metals-minerals/trade-services/fire-assay
https://www.investopedia.com/terms/a/assay.asp