It is pretty common to read 43-101 format technical reports on Mineral resources for new deposits that include significant Measured mineral resources. In my opinion, this classification of resources is often not merited. Let’s review the CIM definition:
“A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.
Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation.”
Perhaps the right-brained geologists who wrote this definition should have hired a meeting facilitator to excise the ambiguous terms (bolded) from the definition. Are we feeling confident today? Is it reliable? Is our classification sufficient? Wonderful terms for a session with the therapist but hardly science.
Example: We have a virgin deposit under a few hundred meters of cover, tested with geophysics and drill holes of different types in several campaigns by several companies. We’ve never mined it, or actually put eyes on the material in place, but we have geological, geostatistical, metallurgical, mine, economic, waste characterization, geotechnical, hydrological, and marketing models that tell us with SUFFICIENT CONFIDENCE that we have this deposit figured out, and we even did conditional simulation to give us more CONFIDENCE and RELIABILITY. We, the qualified persons who likely never collected a single raw data point in the multi-year data acquisition process leading up to the studies, are feeling really CONFIDENT—Measured, in fact. Everyone’s feeling good!
I just read a 43-101 Technical report published in July of 2018 on a deposit which I have personally visited and that fits the example above and includes a significant portion of resources classified as Measured. Based on our dismal industry record of correctly modeling mines and resources, wouldn’t it be logical to reserve the terms Measured (and Proven, for reserves) to material that:
1. Has profitable mining, processing and marketing history;
2. Is proximal to existing openings;
3. Is known from sampling of more than one type, and includes bulk sampling as one type; and
4. Also complies with the current requirements for Mineral resources?
Ambiguous terms are not included in items 1-3, with one exception, noted in bold. Let’s be sure that a Qualified Person will be tempted, or coerced into bending the word ‘proximal’ to something that is not proximal at all.
The Russians are a bit better at this classification game, recognizing four categories of deposits by Complexity and within them Balanced (балансовые) reserves within subcategories of increasing levels of confidence (C2, C1, B, A) . You don’t just publish reserves; the State Committee of Reserve Estimates (GKZ) must approve them. The GKZ specifies the maximum sampling grid spacing allowed for each category, the method of computation of reserve blocks and construction of cross-sections, and many other factors. In terms of the grid spacing, it’s pretty hard to find a translation of them (my copy is dated 1999); the CRIRSCO Guidelines on Alignment of Russian minerals reporting standards neglects these details. But it’s such a key difference—do we really have to decide the appropriate drill spacing for each individual deposit? Why shouldn’t there be an agreed upon maximum grid spacing and exploration plan for each broad type?
Implementation of minimum objective standards, would have avoided more than a handful of reserve busts I can call to mind (e.g., Carr Fork, Bingham Canyon). For a “medium and large complexly structured” Russian gold vein, you might get away with 50 x 50m spacing for some of the reserve (actual guideline is 40 – 60 m spacing), but the GKZ’s “Methodical Manual for Application of Reserves Classification to Gold-Containing Deposits requires a significant percentage drilled out in detailed areas to no more than 25 x 25m spacing. What’s wrong with that, at least as a minimum? It sounds a lot like the “geostatistical cross” that the western geostatistician Andre Journel recommended to me as a good practice in the 1980’s. I respect this element of the Russian system, and the fact that the 1999 guidelines state: “Mining working is the primary method of detailed exploration…Ore body continuity and alteration character of their thickness and gold content along the strike and dip must be veined type and by concentrating the grid of cross drifts, blind drifts,underground horizontal holes along thick ore bodies of mineralized zones and stockwork types (forgive my English, just excerpting from the translation). The GKZ explicitly recognizes how essential it is to sample and touch a deposit both by drilling development, even for our “equivalent” of Indicated resource. Investors and their consultants used to have this mindset in the West way back when (e.g., the old term “ore in sight”), but we have 43-101 definitions now.
It appears to me that we’ve always had a confusing and ambiguous system of classification of resources and reserves in the western countries, and if that’s in doubt, just have a look at Chapter II of Herbert Hoover’s classic Principles of Mining (1909), or the free-for-all forum discussion in the back of T. A. Rickard’s The Sampling and Estimation of Ore in a Mine (1907; Hint: read about “promiscuous” ore and reductio ad absurdum problems). You have to feel something like pity for the credulous investor or analyst who tries to reduce the publicly disclosed resources and reserves of western mining companies to dollar value, because we have, by means of our committees and with time, reduced the definition to mean very little in objective terms.