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When does a mineral resource become a mineral reserve (43 replies and 2 comments)

Bob Mathias
8 years ago
Bob Mathias 8 years ago

This article has an interesting perspective on mineral resources and reserves. Thought that someone may be interested in this. Under what circumstances does a mineral become a mineral reserve? When does a mineral resource become a mineral reserve?

http://magazine.cim.org/en/2015/October/columns/Mineral-Resources-and-Reserves.aspx

I remind all that "geologic confidence" are SUBJECTIVE and one man's "indicated" may be another man's "measured". We're still fooling ourselves using terms like "sufficiently drilled out" and so forth. What qualifies as "sufficient", for instance? Variable from deposit to deposit. Question is can an investor read a 43-101 and trust it to be real? What methods were applied to arrive at the "inferred, indicated, measured"? what geostatistical method was used to make the estimate? Does that geostatistical method work for relatively small numbers of drill holes? That particular type of deposit? Lot more to this than meets the eye and that the average investor may have knowledge of.

(unknown)
8 years ago
(unknown) 8 years ago

Mineral resources and reserves estimation by geologist and the miners are different, ultimately mine-abilty matters. We had a big debate with miners on some of the uranium deposits.
One more dimension to the variability of estimation in uranium is it's disequilibrium

It does seems to me that your miners and geologists ought to be talking to one another and estimates revised as new data is added. What is waste in an estimate may not be waste "in the pit" or geologist with a grade control geologist observing and directing mining operations. Hence, my questions of the meaning of "what is sufficiently drilled out"? And, how subjective was the estimate to begin with. Obviously, one cannot drill every inch of the ore body nor are geostatistical estimates always accurate especially if they are not properly geologically constrained. Sometimes it is impossible to determine all constraining variables. Material balance and reconciliation of geologic estimates, actual head grade going into the mill and actual recoveries is an age old problem that we are getting better at, but not entirely.

Victor Bergman
8 years ago
Victor Bergman 8 years ago

A recently completed a high-level study looking at the factors behind the recent decline in the Reserve & Resources of some of the major gold mining companies. In the process I came across a really great set of (public) data on AngloGold Ashanti - titled "Mineral Resource and Ore Reserve Report" (which you can download from their website). Each year they generate a very comprehensive set of notes on their individual mines and projects. It also includes a table which details the factors behind the change in the reported Reserves & Resources. Over the last 5 years their MI&I Resources didn’t change much (from 227 Moz at the start of 2010 to 231 Moz as at the end of 2014) but “under the hood” lots of things happened. They discovered 48 Moz of gold, but depleted their resource base by 29 Moz (through mining of 21 Moz of gold); they also acquired 4 Moz from other companies and divested 11 Moz to others. The rise in gold price created 14 Moz of extra resources (through using lower cut-off grades) but rising costs took 12 Moz away. Other factors, including changes in modelling assumptions and scope of work (such as shift from open pit to underground) reduced the Resource figure by 4 Moz.

These numbers on an annual basis for each operation. It would be an interested study for an Honours Student to unpick and analyse the variability of the data at the mine site level.

A really interesting statistic is implied conversion rate for Reserves and Resources into metal. Over the 11 year period (2004 to 2014) AngloGold Ashanti produced 54 Moz of gold but, in the process, they depleted 64 Moz of Reserves and 75 Moz of Resources. In other words, on average they were only able to convert (54/64=) 84% of the P&P Reserves and (54/75 =) 72% of the reported MI&I Resources into gold bars for sale. The implied loss factor of (100/84 =) 19% for Reserves and (100/72 =) 39% for Resources is a lot higher than the headline metallurgical loss factor of 8-12% through a conventional mill. This suggests that other factors are at play (such as economics which leads to large parts of the orebody not being mined). Given that so much of our resource base will never be mined, this suggests that out future available of metal is much “tighter” than you think – with obvious implications on the future commodity price

A couple of questions for the readers –
* What’s your experience on the reserve and resource conversion rates at your operations? Ie are AGA’s numbers representative of the industry?

* Do you know of any other companies that publish a reconciliation report like that published by AngloGold Ashanti?
I would be keen to get a broader sense of conversion / depletion rates for other companies and commodities

Maya Rothman
8 years ago
Maya Rothman 8 years ago

Good article, only comment to contribute to the original article is based on the assumption that many executive teams actually understand the fundamentals of quality of resources and what is required to determine economic viability. If they do not understand the fundamentals as knowledge is not in their skill base they rely on competent and experienced professionals (geologists, engineers and metallurgists) to inform them. Unfortunately in the endless appetite to reduce costs and increase margins on marginal mines the downsizing process of the competent teams in terms of numbers and experience ultimately removes this support. Result is that internal expertise is eroded and quality reporting and advice removed. Before long some companies realize the support has gone and the top Executives don’t even know what they don’t know. Result are the issues you point out in the second part of your article. Ask yourself which departments are running the show?

(unknown)
8 years ago
(unknown) 8 years ago

A more relevant example of reliance on other's work would be in a series of reports that summarize or copy the scientific and technical data and information in the mineral resource database, as first disclosed in the initial resource estimate report, and carry that forwards all the way through to a mining study report used as a basis for a production decision. Instead of remaining static, the level of data verification often requires enhancement as its associated risk-factor increases.

Under Canadian Securities Law, when there is a technical reporting requirement, the company is responsible for selecting appropriate qualified persons, who should be prepared to assume responsibility for the disclosure in their delivered report, and Consent to its use and filing by their client or employer. This is explained in part 5.1(1) of the Companion Policy to NI 43-101.

To answer the question "When is a Mineral Resource not a Resource" with a honest answer, which is.... "when in-place mineral resources become a derivative traded futures commodity contract."

(unknown)
8 years ago
(unknown) 8 years ago

The simple answer of when a Mineral Resource not a Resource is when the Mineral Resource is not Economic based on detailed geological exploration work, particularly core drilling work includes metallurgical studies and the related infra-structures such as high-cost production road through protected forest with complex high-cost Government Permits.

Helena Russell
8 years ago
Helena Russell 8 years ago

But, I thought that more applies to proven reserves.....i.e., economically extractable. Resources may or may not be economic depending on current metals price, but maybe with a price change. Resources should be of sufficient grade and volume as to be mineable under some given set of circumstances. If one restricts oneself to the term "economic" then a lot of resources would be ignored that shouldn't be. A better question is given a volume of identified resources what portion of that resource currently economically mineable at current prices. You can't just throw out the rest of the resource due to current price. Answer "not so simple".

(unknown)
8 years ago
(unknown) 8 years ago

Yes, depends on Economical Proven Reserves, Metallurgical Studies, International or local metal prices, Infrastructures, Government Permits, Forestry Claims and Local and International Politics play the important roll. You cannot mine in countries with Forestry claims complex and political problems because the results is you will loose everything.

(unknown)
8 years ago

Resource does not necessarily need to be a Reserve.

(unknown)
8 years ago
(unknown) 8 years ago

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. (CIM Definition Standards for Mineral Resources and Mineral Reserves - 2014)

"Reasonable prospects for eventual economic extraction" is a really important concept. A dramatic drop in price, increase in mining cost, or change in local legislation can have a big impact on that reasonableness. A really important question, which requires careful exercise of professional judgment, is to determine at what point those conditions no longer exist, and a resource should no longer be reported publicly.

That is why many technical reports report a resource at a series of cut off grades.

Sometimes conditions change. Montana banned use of cyanide for extraction of gold from mineralization mined by open pit methods. There are occurrences of mineralization that at one time were reported as resources, that are no longer reported publicly. The mineralization is still there, but unless there is a change in technology or legislation, "reasonable prospects for economic extraction" don't exist.

(unknown)
8 years ago

Bill, I think you miss the point in "eventual". Currently there is no mature market for a number of minerals ie Thorium, Rubidium, Scandium etc, however with the way current technology is going these minerals will quite possibly be in high demand within 10-20 years time. Given that it now takes around ten years to develop a mine (Australia) I would argue that anybody sitting on a deposit of said minerals could quite reasonably define them as a Resource.

Paul Morrow
8 years ago
Paul Morrow 8 years ago

When it is not economical to exploit it. It is no more a resource but a reserve ....in the future it may become a resource again if it can be extracted economically ......it is all about making profit when exploited. Economically mineable mineral reserve= mineral resource and non economically mineable mineral reserve is yet to be called mineral resource. Simply and straightforward. The 3D solid model of the deposit will be converted to a 3D geologic block model and later be converted to 3D Economic Block model by mine planning engineers with economic block values in it. It is now ready to be used for optimization process; NPV maximization. After all the economic calculations, it the deposit can't be exploited economically, it is then considered to be a mare reserve. No need to mine it.

Maya Rothman
8 years ago
Maya Rothman 8 years ago

It comes down to what do "eventual" and "reasonable" mean. In the case of low grade gold mineralization in a jurisdiction that outlaws the use of cyanide extraction, I think it's pretty clear cut. The companies that own those occurrences obviously agree, because they aren't publicly reporting resources from those deposits anymore.

In other cases, such as the minerals that you are mentioning, perhaps "reasonable prospects for eventual economic extraction" do exist. If the Qualified Person, or Competent Person, asserts it is reasonable, and others who have expertise in the same area would agree, then it's reasonable.

It easily can take much more than 10 years from the time a resource is first declared to when a project gets to pre-feasibility stage, so "eventual" can have a long timeline. The test of "reasonable prospects for eventual economic extraction" still needs to be addressed, even if the timelines are long. With longer timelines there should be more flexibility in price and other economic assumptions.

Bob Mathias
8 years ago
Bob Mathias 8 years ago

Scandium is a great example, there are relevant reports filed publicly on SEDAR. There are economic analyses that rely on forward-assuming models for demand and pricing, based on markets that never existed before and don't now. The Scandium economic models speak to the CIM definition requirement for "reasonable prospects of eventual economic extraction". Because a market is not yet developed, there is significant additional risk in relying on the results of the economic analysis, the analysis is preliminary, and the additional risk factors should be disclosed.
A "resource" might not be a resource it its proponent cant explain how the base-case cut-off confers "reasonable prospects of eventual economic extraction". It could be questionable if there are other fundamental omissions in following best estimation practices as applied by reputable peer estimators (e.g. CIM Best Practice Guidelines of November 23, 2003), if its underlying database lacks QAQC or is inadequately verified, or if the its assumptions, parameters, or methods are out-of-date or not reasonable.

(unknown)
8 years ago
(unknown) 8 years ago

A resource, remain resource, only in the countries which do not have means to investigate - to be passed toward at reserve category; most African countries. The SAMRAC Code [South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves] appears relevant here, defines resources in line with other international codes and resource definitions, and is recognized as an acceptable code by most of the others.

Bob Mathias
8 years ago
Bob Mathias 8 years ago

I think you might want to review the meaning of resource and reserve - a reserve stems from a resource not the other way around. As you say it is simple but it never ceases to amaze me how common this mistake is...

Measured resource -> Proven Reserve or Probable Reserve
Indicated Resource -> Probable Reserve or Not Reserve
Inferred Resource -> can not be classified as Reserve

Most reporting codes around the world use this scheme yet it seems every year I have to explain this to the auditors! The hurdles are not strict as they must apply to vastly different deposit types, no two of which are the same - this is why the CP/QP is the one responsible for making the determination in what category to place the mineralization. It can not be made rigid - much to every engineer/lawyer/accountants disgust!

Maya Rothman
8 years ago
Maya Rothman 8 years ago

like in Nickel Laterite Deposit Drilling Exploration we used Inferred Resource Estimates for 200m x 200m gridding, Indicated Resource Estimates for 100m x 100m gridding and Measured Resource Estimates for 50m x 50m gridding and for grade control we used 25m x 25m gridding and sometimes 12.5m x 12.5m gridding to determine the high-grade Saprolite Nickel Ore Pockets.

Maya Rothman
8 years ago
Maya Rothman 8 years ago

Everyone, thank you all for your contributions to this article when is a mineral resource not a resource? You are all correct. This difficult question has been answered in the simplest term by Cameron Clark @ magazine.cim.org. We are all geologists, earth scientists and or mineral economists parallel to almost the same school of thoughts globally flipping the same text books for reference (s) to express our opinions in some different manners relating to the same ideal not to proof that you know more than the other. But it is important to know that some of us are from the theoretical point of view and while the others are from the practical point of view. More importantly, to know that conventional wisdom sometimes fail in some of our geological applications or methodologies and we need to take on our own human wisdom to complete the tasks properly and at the end of the day, the results are what matter in the context. So the theory explains the practical while the practical interprets the theory.

I think in my own opinion, the concluding answers to this question is placed on magazine.cim.org.
I actually appreciate all of you scientists' contributions to this article which are meaningful to the earth science works in the explorations and mining of mineral resources globally but different in applications depending on the personnel (manning), technologies, region, geology and deposit types that has over the years influenced the subject resource and reserve.

Everyone (earth scientists, government and civil societies) has a leading role to play in establishing this concept properly to the letter!

(unknown)
8 years ago
(unknown) 8 years ago

Everyone, thank you all for your contributions to this article when is a mineral resource not a resource? You are all correct. This difficult question has been answered in the simplest term by Cameron Clark @ magazine.cim.org. We are all geologists, earth scientists and or mineral economists parallel to almost the same school of thoughts globally flipping the same text books for reference (s) to express our opinions in some different manners relating to the same ideal not to proof that you know more than the other. But it is important to know that some of us are from the theoretical point of view and while the others are from the practical point of view. More importantly, to know that conventional wisdom sometimes fail in some of our geological applications or methodologies and we need to take on our own human wisdom to complete the tasks properly and at the end of the day, the results are what matter in the context. So the theory explains the practical while the practical interprets the theory.

I think in my own opinion, the concluding answers to this question is placed on magazine.cim.org.
I actually appreciate all of you scientists' contributions to this article which are meaningful to the earth science works in the explorations and mining of mineral resources globally but different in applications depending on the personnel (manning), technologies, region, geology and deposit types that has over the years influenced the subject resource and reserve.

Everyone (earth scientists, government and civil societies) has a leading role to play in establishing this concept properly to the letter!

(unknown)
8 years ago
(unknown) 8 years ago

Nobody has pointed out why we need to define what a Resource is. There were and still are too many people/companies trying to con investors out of their cash. And it is not just in Resource reporting, AIM rules about full disclosure still leave a lot to be desired; Company Secretary s should be required to keep their investors appraised of all and any issues that may effect the Companies ability to produce as budgeted. For instance, the Philippines is currently entering an election year, Politicians who were for the last four years Pro-mining are now decidedly Anti-Mining ! especially towards foreign owned concerns. I have yet to see any Company include political RISK in their RNS. As several contributors to this discussion have pointed out definition of a Resource should take in the likelihood of actually being able to mine the deposit at some point in time.

(unknown)
8 years ago
(unknown) 8 years ago

Here are a couple of Canadian sources for those who want to study-up on how securities rules and regulations and application of economic geology could impact your estimation of a mineral resource and selection of its base-case cut-off. Such aspects apply when you are tasked with estimating and delivering a resource, for which you would be prepared to assume responsibility and formally deliver to a securities issuer (a public company). This is a common scenario under which serious resource estimation occurs. Under these circumstances there is likely to be public disclosure of your estimate with your name attached, at which point a host of professional code of ethics and legal conditions kick in.

http://www.bcsc.bc.ca/For_Companies/Mining/

http://web.cim.org/standards/MenuPage.cfm?sections=177&menu=180

Victor Bergman
8 years ago
Victor Bergman 8 years ago

It is really important that geologists and engineers who are going to act at QP's (or Competent Persons --Australia) have the appropriate level of experience for the type of deposit they are working on, and understand their legal and moral responsibilities. Some posts deal with the legal and moral parts. The reporting codes also specify the amount of experience that the individuals should have. As professionals we need to understand these and take them seriously.

Maya Rothman
8 years ago
Maya Rothman 8 years ago

In a recent review of a company's geological model I was really surprised to see how little interaction there was between resource modelers and exploration geologists. The resource modelers linked the drill holes up as a tabular flat ore body, the geologists had interpreted the ore body as a set of steeply dipping veins. Without geology and drill hole assay results being considered as a single package the resource estimation is not valid. Cameron you highlighted in your article the potential impact of inexperienced but well intentioned people, this example really demonstrated it to me.

(unknown)
8 years ago
(unknown) 8 years ago

Common problem, I can't count how many times I have started to mine a resource and then find out that the original model was completely wrong. Most times it comes back to the exploration Geo not understanding the genesis, however I do know instances where it was the resource modeler misinterpreting the data. In the latter cases the exploration Geo's were usually very junior.

(unknown)
8 years ago
(unknown) 8 years ago

I had, at least 2 experiences of witnessing such models and contradictory results after exploration. Here in both cases, initial models were made by land surveyors with mine surveyors, both thoughless mechanical minds, I suppose.

(unknown)
8 years ago
(unknown) 8 years ago

Yes there are numerous examples of development and early production failures, having various causes. The following is a recent publicly disclosed example attracting debate and discussion in Canada. I have no opinion on it. The Company's news release cites geological model issues. Generically; its reasonable to think any early-stage modeling problem could impact reliability of the resource estimate, subsequent analysis of those resources, the effectiveness of a selected mining method, and give surprises with dilution and mine loss.

(unknown)
8 years ago
(unknown) 8 years ago

In stead of reciting, "When is a Mineral Resource not a Resource", I think a recitation of calling 'Estimation' as a mere estimation and all estimations are bound to have "Errors of the estimates" and also the "confidence level of the estimates", should be more realistic approximation of the truth. 

Traditionally, projects reduce "errors" or get "closer to the truth" by proceeding through milestones of pre-feasibility and feasibility studies (which convert a portion of the resources to mineral reserves). Reliability of the estimates should increase with each step. Production decisions without first establishing reserves typically have much higher risk of economic and technical failure.

(unknown)
8 years ago
(unknown) 8 years ago

Resource estimates need to be based on geology. It is geology that is being modeled, it's just that the part of geology being modeled is the concentration of particular metals. There are a lot of aspects of geology that need to be contemplated in building a proper resource model.

There have been cases where a portion of the drilling is parallel to vein sets or other ore controlling structures. Such holes often need to be discarded prior to beginning the resource estimate. There are many other important issues that need to be addressed before, or as part of the resource estimate.

It's not just an issue of a resource estimation person communicating with an exploration geologist. Management of resource modeling requires special skills, some of which are developed, not just in exploration, but also as a result of experience in mining of the type of deposit being considered. It needs to be managed properly, not compartmentalized.

Bob Mathias
8 years ago
Bob Mathias 8 years ago

Detailed geology, the exploration-drilling-sampling-assay practice, geo-statistics, engineering constraints, and economic considerations all need to be considered when deciding on the parameters, assumptions and methods for a mineral resource estimate. There seems to be agreement that proper management and effective teamwork improves reliability of an estimate. If a team member practices in a silo, risks increase.

(unknown)
8 years ago
(unknown) 8 years ago

Establish whether they are economically viable reserves with this gain is set by the market and technology.
Now in this crisis we must look the other type of exploitation such as gems or semigemas this can give us to help improve the economic resources of the countries. Employers must look to other ways to recoup this.

JohnnyD
8 years ago
JohnnyD 8 years ago

I think that attention should be carry also on structures when building final model, as far as lithologicals models are many times build without any assumption on structural datas. Nevertheless, we know that structures can control the implementation of many mineral deposit like gold. Even in base metal deposit, following the structures can lead to find where the mineralised liquid has flow out and follow it, rather than focus only on lithological and reporting only on that base. We use to say "structure in the key".

(unknown)
8 years ago
(unknown) 8 years ago

I am surprised to learn from this discussion that resource modelling has been carried out by people who seem not to have been overly literate geologically or to have lacked geological familiarity with the ore zone in question. Does this represent a lack of communication between the geological and engineering disciplines?

(unknown)
8 years ago
(unknown) 8 years ago

It probably has more to do with incompetence on the side of the BOD and Senior Management or worse still a deliberate attempt by management to overvalue their resource. I know of a couple of instances where Senior Management got junior (easy to intimidate) geos to generate Reserves from a highly questionable data model.

(unknown)
8 years ago
(unknown) 8 years ago

There are two related but separate concepts here, 1) application of best geoscience and engineering practices for resource estimation, 2) following rules and regs. that require full, true, and plain disclosure about the merits of a mineral project. In Canada 1) is the CIM best practice guidelines and 2) is National Instrument NI 43-101 and Exchange disclosure rules where applicable.

(unknown)
8 years ago
(unknown) 8 years ago

Using geology is so old school you guys - its all statistical checks and GT curves these days, don't even need much experience, don't need to go to site or look at the rocks since the software programs do it all for you - didn't you get that memo? Geo's need not apply, its all in the realm of the mathematician now.

Zander Barcalow
8 years ago
Zander Barcalow 8 years ago

Given the computing power of the World we will very soon have every mineral deposit proven up, how long before they come up with a program that will mine it for us as well?

Jean Rasczak
8 years ago
Jean Rasczak 8 years ago

There is a third concept in that my experience in trying to the attract attention of your BC securities commission when the financial "pump and dump" bullies of Hasting Gulch were winning over a simple matter of their paying $16,8000 to cover the contract designated assessment work, by not even putting a single boot on the ground. It's was bad enough that CAF took an option to enter into a earn in joint venture to the TSX to raise $3.5 million through Merrill Lynch of Canada, before the dump, while excluding my "free trade" American geologist who as a student had assisted a Canadian geologist on the Alaska property, for not being National Instrument NI 43-101 and Exchange certified? 

(unknown)
8 years ago
(unknown) 8 years ago

I thought all the current research was around drilling a couple of holes, fracking it and pumping then sucking (and no I am not just talking CSG). No need to mine! Besdies, any mining that needs to be done is by robots which means bumbling Geo's are no longer allowed in the pits anyway, too much of a hassle to reset the system because some tool got too close to a piece of automated equipment. Surely there is enough information in the original drilling and from a few photos off the side of the pit to tell where the ore is? That and the info from the hyperspectral scanner on the automated drone which does the daily lidar survey scan. Get with the times people.

(unknown)
8 years ago
(unknown) 8 years ago

It seems to me that new grads, even new QP/CP professionals doing estimates generally make sincere effort to the best of their ability and take their codes of ethics very seriously. However they need well-rounded mentors having long, diverse practical experience in field and management. What could be more satisfying than developing youth and young men and women who are starting out in a difficult time.

Marshal Meru
8 years ago
Marshal Meru 8 years ago

A lot of these newcomers are not interested in learning or appreciating the vagaries of an orebody. After all the software evens everything out to a LOM average value.

(unknown)
8 years ago
(unknown) 8 years ago

So now, Geo just have to turn to mathematician, statistician or try to do farms. Since software can determine the Azimuth of holes, determine in which lithology and depth the hole ends, and after, build model and constraint it with structural and finally valid it after a Qa/Qc control. We could just say "qualified software" instead of "qualified person".

(unknown)
8 years ago
(unknown) 8 years ago

Alas with the loss of experience from this downturn (must into its 3rd year by now...) there will be few left with the knowledge to challenge these automated models (which is the very reason automation is becoming the thing) and not only will we see a continued decline in discovery rates (due to loss of experience and basic exploration knowledge) - we will see a lot more reports of "resource/reserve not performing to expectations". At that relates back to Cameron's question of "When is a resource not a resource?". It is not a resource if it fails to accurately model the in ground ore that companies make an investment on, I have noticed a large increase in stock market releases where references are made to resources not performing to expectations, resources having to be retracted due to being significantly in error or even companies saying how good their reconciliation is because it is 70% positive. All reasons to be concerned.

(unknown)
8 years ago
(unknown) 8 years ago

so complex that the "independent consul" (undocumentable) that drafted the contract that had verbiage I added from my Mining Lawyer father's boilerplate collection, also turned out to be in a BCC? arbitration, the Secretary Treasurer of a full blown TSX listing, [CAF].

The arbitration that to cost me S500 and three years to get a phoney phone hearing on trying to collect for the out of my pocket $16,800 State of Alaska requirement, or otherwise the claims would be abandoned ended with the QBB asking for a third of that amount up-front from me to pay his fee, and an additional $400? for a hearing room, with coffee service, to decide if my questioning a contract "drop dead" clause (to prevent legal default claim jumping) of a certified Assessment work Affidavit being presented one month before before the termination of the one year before the assessment and option year expired... by dumping... and stealing $3.5 million from a TSX sanctioned promotion. Sorry to be so gloomy!

(unknown)
8 years ago
(unknown) 8 years ago

finally, an answer by someone that understands Mining Law! It's too late not to engage, as I have already published the First Amendment protected "fact pattern" on my http://www.AlaskaMining.com... with regret as I really have had great association with BC juniors, and geologists, as Cominco when they were drilling the Kinsley Mountain jasperoids that may have been following up my simple field colorimetric testing which was the basis for staking ground that went from Exxon> Cominco > Alta Gold > bankruptcy > rescued after reverting to the BLM to take care of reclamation of the leach pad > by Pilot Gold working on the profitability of working with sodium thiosulfate recovery. I also am a friend of BC in that my AlaskaTravelMagazine.com identified the beauty of the AlCan "Brotherhood."

(unknown)
8 years ago
(unknown) 8 years ago

A PLUNGE in the gold resource at the Mt Boppy gold mine has forced junior producer Black Oak Minerals into administration...." and another one bites the dust. Whilst I am not implying the CP or estimator was necessarily at fault resource models should not "plunge..." and a 40% drop in ounces is a plunge. This was a resource that was not a resource... The company's statement says the resource was based on "detailed statistical and geostatistical investigations" yet infill drilling inside the pit still destroyed the resource. One assumes the statistical boxes were all ticked but perhaps the geological model was not well enough understood.

Zander Barcalow
8 years ago
Zander Barcalow 8 years ago

I think the author of the article pretty much hit most of the significant situations and conditions that cause resources to be misunderstood. The author has spent most of his career apparently dealing with resource calcs in all of their iterations and it shows.

I have spent the bulk of my career on the other side of the equation, mining those calculated resources.

It is stunning to realize how many senior mining executives in companies large and small have no background in the physical part of mineral industries.

Much of the money is made mining the stock markets via poorly justified mergers and acquisitions, and decades long exploration programs that while geologically successful, may never see production due to the realities of access, utilities or possible huge environmental issues. Alaska's Pebble project is one which comes to mind in the latter category.

As long as there are billions of dollars to be made in lies, cheating and misrepresentation, it is going to be done.

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