542Re: AI-GEOSTATS: What are appropriate measures of reliability for Mineral Resource and Ore Reserve estimates?
- Feb 27, 2002Bill
I was not yet aware of the JORC call for submissions on this
subject. Thanks for the information.
See my responses in between the key paragraphs of your
I have published a considerable amount of material on
these subjects, and the following comments only scratch
the top of the subject. Some of that material, I could email
to you but the printed material would be more convincing.
So I need your address.
Good luck in this endavour
Marcel Vallée Eng., Geo.
Géoconseil Marcel Vallée Inc.
706 Routhier Ave
Sainte-Foy, Québec G1X 3J9
Tel: (1) 418 652 3497
Fax: (1) 418 652 9148
02-02-25 20:07:59, "Bill Shaw" <wshaw@...>
>ensure Public Reports best inform investors. It thus
> From: "Bill Shaw" <wshaw@...>
> To: <ai-geostats@...>
> Subject: AI-GEOSTATS: What are appropriate
> measures of reliability for Mineral Resource and Ore
> Reserve estimates?
> Date: Tue, 26 Feb 2002 09:07:59 +0800
> Organization:Golder Associates
> You may be aware that in Australia the Joint Ore Reserve
> Committee (JORC) s called for submissions regarding
> the next revision of the JORC Code. The current JORC
> Code effective September 1999) can be downloaded
> from www.jorc.org and the call for submissions is also on
> that site.
> I am involved in the teams looking at the definitions for
> Mineral Resources and for Ore Reserves.
> Frequently questions are raised about the expected
>reliability of estimates for Resources classified as
> Measured, Indicated or Inferred or for Ore Reserves
> classified as Proved or Probable. There are a number of
> arguments, both for and against, regarding attempting to
> quantify the accuracy (and precision?) of such estimates.
> The Joint Ore Reserve Committee is considering whether
> it may be timely to introduce some discussion into the
> Code regarding the pros and cons of such quantification
> of expectations.
> Not all such arguments for and against quantifying the
> reliability of estimates are technical, for example:
> · FOR - The primary purpose of the Code is to
appears important that similarly classified
estimates have similar ?reliability? even if such reliability
can only be broadly generalised, rather than quantified.
>prescriptive and relies on the Competent Person making
> · AGAINST - The JORC Code is not currently
decisions about many issues including
>Comment by MV: --------------------------------------------------------
Complete non-prescriptivity raises a basic issue. Can one
reasonably expect that results may be comparable
between two QPs or CPs or different projects under this
condition. My opinion is that objectives and some basic
requirements basic requirements should be formulated to
ensure a minimum amount of focussing on what is actually
required in a particular case, and still leave the QP / CP a
considerable of authonomy in the practice of his profession.
--------------- End of Comment ------------------------
> Transparency, Materiality and Competence (all defined----------------- Comment by MV ---------------------
> in the Code).
> Quantification of ?expected reliability? presumably
> requires estimates of tonnes and grades to be made
> using a method that would allow ?errors? to be also
> This may make the Code more prescriptive if such errors
> are only provided by certain estimation methods.
Non prescriptivity again! It this part of some sort of a mining
gospel or koran!
------------------End of Comment ---------------------
> Either way, if the JORC Code discusses this issue it must--------------Comment by MV -------------------------
> get it right. For example it is not very meaningful to
> suggest that Measured Resources are within +/- 10%? if
> such a statement can never be tested or demonstrated.
> Thus it has been suggested that confidence limits and
> parcel size must also be stated.
All solutions need not be complicated. In most cases it
helps to try and break down the problem first. After the
recent crop of revisions, we have an international
resource/reserve system but we still have the same
problems because, in my opinion, the people that mattered
wanted to have a SIMPLE and EASY TO APPLY and NON
PRESCRIPTIVE REPORTING system, not an inventory
What sort of objectives were present when juniors were, in
practice given the opportunity to make early ore reserve
announcements that are «economically mineable» on the
basis of «at least a preliminary feasibility study» (Canada)
or , in several jurisdictions like Australia, «appropriate
assessments that may include feasibility studies».
Feasibility studies that, under "generally accepted industry
practice" are required to launch a mining project, have
been swept under the rug and are not even defined in
recent definitions systems. Now an issuer (some are also
very efficient promoters) could announce an "economically
mineable reserve» that may never reach production!
Is this contributing to adequate information to the investors?
To more efficient mine project development?
- - - End of comment - - -
>- - - - - - Comment by MV - - - - - - - -
> We would appreciate your considered opinion on this
> specific issue: What are appropriate measures of
> reliability for Resource and Reserve estimates and
> how they are currently used by practitioners? I will
> undertake to collate submissions, to circulate these and >
> to prepare an overview for JORC. Please
> circulate this email to any colleagues that you believe
> are interested in this issue.
For now, I would start by saying that the present resource /
reserve systems, have been designed without taking into
accounts the fact that mineral resource and ore reserve
statements, are primarily INVENTORIES for work purposes
BEFORE they become REPORTING documents, despite
the fact that you've got to estimate it before you report it.
Neither the formulations nor the requirements for reporting
carry any objetive related nor quantitative requirement.
Here is an example how useful quantitative requirements
may be worked in with limited prescriptivity and without
More than 25 years ago, as Chief Geologist, Mines for the
SOQUEM group, I made minor adaptations to the then
current Canadian reserves definitions (proven, probable
possible) to use in our operating mines and advanced
projects. The chief geologist at the Louvem base metal
mine (his name is Réal Bourassa) had read the revised
text and was prepared for my next visit to Val d'Or..
"Marcel, your definitions are OK, but we have a problem:
they only provide two levels for delimined reserve (proven
and probable) , but we have four levels of information in the
mine with, in addition, the possible reserve level.
"In the proven category, we have drill proven ore on a 7.5 m
section spacing and we develop for long hole open stoping
or shrinkage stoping - undercut at the base overcut at the
summit, and raises, plus drilling at 12f ft in the ends of zones
to check projections. Our probable category is based on
two drill section spacings grids, 15m and 30 m. Would it be
possible to adapt "your definitions" to take all this into
account. We did!
For inventory purposes, we subdivided the proven and
probable levels to have four categories: «proven
developed », «proven drilled», «probable 1 and probable
2». These could be regrouped for reporting, but in such
cases, I insisted on supplying with each global category the
information regarding drilling grid size and the percentage/
and grade for each grid dimension. We rapidly found that
this system made the work of the geologist easier to
understand for mining engineers, mine supers, managers
and directors, as wall as easier to manage for the
Another of our operating mines, with much larger and
multiple zones, was a 50/50 joint venture. . The mine
geologist had more leeway, as the partner was the mine
operatior and, despite my advice, he decided that is was
not usefull to distinguish between the probable 1 and
probable 2 categories. After several years of exploring for
new zones on a 60 m spacing and a first filling next to
promising intersections at 30 m spacing, the area
manager refused to grant additional exploration /
delineation budgets in that sector, as he could not see from
the reserve statements any significant progress in the past
year or two. I was called in. This problem was solved fairly
easily by recompiling the last two or three reserve
statements with the probable sub-categories, to show the
progress in moving large tonnages from probable 2 to
probable 1. Being a reasonable person, he granted the
budgets required to carry on.
Whether with four or with only the two current information
levels, more information could be available to the investors,
other industry professionnals managers and mining
analysts that no resource/reserve information should be
published without giving a «comprehensive summary» (!) of
the sampling information network includind number of drill
holes and samples, and all grid spacings for each
category wit. Sorry, but somebody has to be prescriptive
sometime when information needs to be provided.
This does not mean to be inflexible or unadapted. One
question I have frequently been asked is: What is the
requirement for proven ore? My answer is objective based
««The sampling grid for proven ore required must be
adapted to the deposit size, mineralization grade and
distribution, and be adequate to support the engineering,
marketing and economic studies required for project
feasibility for a new project, for efficient mine extraction,
mineral processing/ metallurgy for specific mining and
processing methodsin an operating mine. »»
This somewhat prescriptive, but implementation certainly
requires professional experience and judgement as well as
In summary, it probably would not be worthwhile to revise
the JORC guidelines, if they are to be kept non-prescriptive
in the present fashion and if the people involved do not
introduce the essential concepts required.
These include i) a more adequate model of the
development and mining process is required, ii) both
global and phase objectives. From these objectives, can
be developed explicit but fairly high level requirements that
will help the QPs and CPs to carry out their professional
responsibilities more efficiently.
------- End of Response --------------------
> Bill Shaw
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