Reporting Standards for Mineral Resources and Mineral Reserves Introduction

"Early efforts to develop formal reporting systems to quantify and classify mineral deposits date back over 100 years. (e.g. Hoover 1909: “Proved, Probable, Prospective Ore”). This was at first driven by mine operators’ need for reliable estimates of what their mines could produce. Disruption of transportation routes by world wars prompted western governments to recognize the need for assessments of strategic sources of metals and minerals that could support domestic industry during times of crisis. Categories were created to quantify mineral potential which were additional to those of mine reserves. Terms such as hypothetical and undiscovered resources entered the lexicon. Capital markets serving the mining industry were traumatized during the latter part of the 20th century by undisciplined and fraudulent disclosure by exploration companies of mineral deposit potential. Government securities regulators pressed for the development of credible reporting codes (e.g. SEC Industry Guide 7: 1981; JORC 1989; SAMREC 1994, CIM 2000). Representative organizations from the major western mining countries generally agreed that there should only be three categories of mineral resources (measured, indicated, and inferred) and two categories of mineral reserves (proven and probable). This was formalized in 1997 with the “Denver Accord”. Acceptance of the standard terminology may have been the easy part, because the challenge for the 21st century is to get general industry acceptance and agreement of the principles behind the definitions of each category. There has been noticeable movement towards this objective in the last few years. This is reflected in part in the updated reporting codes by JORC 2004, CIM 2005; SAMREC 2007; SME 2007; and PERC 2008, and the development of the CRIRSCO International Reporting Template 2007."