ACA Howe calculated block grade and thickness using an arithmetic method.

For
each block, each sample grade was cut to 57.0 g/tonne. Each cut grade was then
multiplied by the vein thickness. Those values were summed and divided by the
arithmetic average thickness to give the average cut grade. Another block grade
was calculated by calculating the natural logarithm of each thickness-weighted
grade. Those values were summed and the anti-log of the sum was calculated.
That value was divided by the arithmetic average thickness to give the log
average cut grade. The estimated block grade was finally calculated by
averaging the average cut grade and the log average cut grade. ACA Howe
adopted such a complicated procedure for estimating the grade because from past
experience, the average cut grade overestimated the block grades while the log
average cut grade underestimated the block grades.
The overall undiluted kriging resources (Section 5.2) were compared with ACA
Howes undiluted resources (Table 5-3). Comparing them generally, the average
grade for the block kriging resource was 14.85 g/tonne - 2.5 g/tonne higher than
ACA Howes arithmetic average grade of 12.34 g/tonne. The average thickness
was essentially equal for both estimates at 1.86 metres and 1.84 metres for the
block kriging and arithmetic methods, respectively. The arithmetic method
estimated that the grade and, to a lesser extent, the thickness were lower.
A more detailed comparison was also carried out on selected blocks. No cut-off
grade was used for the comparison. The blocks that were included were those for
which the same samples were used in each method. In all, 50 of the 62 blocks
were compared. In the blocks that were compared, ACA Howes arithmetic
method estimated that the resources were larger by 6,400 tonnes. However, the
arithmetic method estimated much less gold in the resource. Block kriging
estimated that there were 1.2 million more grams of gold in the blocks that were
compared. Assuming a gold price of $US 300 per troy ounce ($CA 14.10 per
gram), 1.2 million grams of gold is worth $CA 17 million.