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By Alan C. Noble

Ore reserve estimation is a multi- disciplinary process involving not only tonnage and grade estimation (resource estimation), but also consideration of technical and legal aspects such as mining the deposit, beneficiating the ores, and selling the product. This paper provides a background to under- standing resource estimation including geologic modelling, manual estimation methods, conventional computer methods. and geostatistical methods. Mine planning, metallurgical studies, legal/environmental, and marketing considerations are also discussed as they relate to estimating ore reserves.

Jan 1, 1991

By S N CARRAS

Ore reserve estimation is a procedure involving data collection, data storage and judgement and assumptions about geology mining and metallurgy. Calculations are based on these assumptions and an economic analysis on projected cash flows is carried out. Ore reserve estimation must therefore be subjective and will always depend on the extent to which the assumptions used in arriving at the estimate are correct. This paper is an attempt to summarise the many aspects that can contribute to ore reserve problems and to offer some suggestions on how to minimise these problems. For further details on specific concepts readers are referred to the detailed descriptions in the referenced papers.

Jan 1, 1992

By Mark Laffoon

Gold Fields Operating Co.-Chimney Creek has conducted numerous ore reserve modeling studies In order to optimize the estimates of the gold grades and tonnage distributions. Improved models continue to be produced for the major pits which Increase confidence levels required by Gold Fields management and provide the basis for more accurate long and intermediate term mine planning. Various kriging and non-kriging estimation techniques are used at Gold Fields -Chimney Creek Mine. This paper reviews the modeling histories and, current procedures used to construct these models with particular emphasis on the North Pit deposit.

Jan 1, 1991

By M. M. Oosterveld

"In South West Africa diamonds are mined from ancient beach deposits by the Consolidated Diamond Mines of South West Africa, Limited.To improve the control of mining production, a computer is used for the calculation of statistically more accurate and homogeneous ore blocks. Geological and sampling information has been digitized and stored on magnetic files.The figures derived for each block entail the calculation of the diamond size frequency distribution, the diamond density distribution and the ore reserve by using the density distribution.The diamond size frequency distribution is used for estimating the revenue in an ore block.A description is given of how a linear programming system can be used for production planning."

Jan 1, 2014

Computer-based block modelling of orebodies is now used at Renison Tin mine for the estimation of ore reserves. It is considered that this has resulted in improved reserve estimation for complex 'stratafault' orebodies. The results for all orebody types are more easily understood by the mine planning section and provide greater scheduling capability than those from the previous manual isoline reserve estimation method. A structural overview of the deposit can be gained by combining geological block models for the various orebodies. It is anticipated that upon completion of block modelling for all the orebodies the time spent on the annual ore reserve estimate will be significantly reduced.

Jan 1, 1990

By D. E. Ranta, Neil D. O’Donnell, Thad B. Ostrowski

Ore reserve estimation at the Syncrude Canada Ltd. open-pit oil sands mine in Northern Alberta has evolved since the project's inception. Early techniques followed a conventional petroleum reservoir analysis format, with relatively widely spaced drill holes and semiquantitative grade data. Experience has developed a more standard mining approach, including classification of geological materials by both lithology and sedimentary origin, timely and multi-purpose drill holes, precise analytical data, empirical recovery factors, a computerized geological data base, and an orebody block model. Future efforts will involve enhancement of existing techniques, use of geostatistical algorithms, quantification of confidence limits, and improved control of the ore model by geological parameters.

Jan 1, 1992

By Neil D. Donnell, O&apos

Ore reserve estimation at the Syncrude Canada Ltd. open-pit oil sands mine in Northern Alberta has evolved since the project's inception. Early techniques followed a conventional petroleum reservoir analysis format, with relatively widely-spaced drill holes and semiquantitative grade data. Experience has developed a more standard mining approach, including classification of geological materials by both lithology and sedimentary origin, timely and multi-purpose drill holes, precise analytical data, empirical recovery factors, a computerized geological data base, and an ore body block model. Future efforts will involve enhancement of existing techniques, use of geostatistical algorithms, quantification of confidence limits, and improved control of the ore model by geological parameters.

Jan 1, 1985

By Neil Schofield

"The Pine Creek gold mineralization is associated with saddle reefs and quartz and quartz sulphide veining within the Enterprise Anticline. The anticlinal structure is complex and the mineralization was considered prior to development to be dominantly strata controlled. Gold grades vary up to 160 gin 1.5 m core samples with coefficients of variation in excess of three.The estimation of ore reserves for such a deposit must account for both the geological complexity and the extreme variability of gold grade.This paper describes the structural and variogram analysis of the gold grades and demonstrates the importance of incorporating the geological model in such an analysis. Variogram interpretation is greatly improved and greater insights into the finer geological structure areprovided. Part 2ofthis work presents the application of multigaussian kriging to reserve estimation for deposits with highly variable grade and which consequently demand highly selective mining operations. IntroductionThe Enterprise Gold Mine is situated some 220 km southeast of Darwin in Australia's tropical north. Gold is believed to have been discovered there in 1869 during the construction of the overland telegraph line.From 1894to 1915, some 75 000 ounces of gold were produced from 121 000 tonnes mined mainly by Chinese leaseholders. From 1906 to 1915, government-sponsored drilling led to the sinking of the Enterprise Shaft to 79 m and several drives were developed. Mining ceased because of war.Since late 1980, Goldfields Exploration Pty. Ltd. had explored on several mining tenements near Pine Creek under joint venture with the title holders, Enterprise Mines NL. This work culminated in the development of the current mine which opened on October 29, 1985.Feasibility studies to determine the economic viability of mining were based on ore reserves generated by project geologists using a sectional polygonal approach tuned to the interpreted geological control of the mineralization.The study motivating this two-part paper covers are-estimation of the recoverable reserve s using the geostatistical approach of multigaussian kriging developed at Stanford University, (Verly, 1984)."

Jan 1, 1988

By Neil Schofield

"The estimation of recoverable ore reserves for feasibility in precious metal deposits such as Pine Creek must account not only f or the extreme variability of the ore grade but also for the complexity of the geology. Compatible models f or both must be adopted. Further, very selective mining demands reserve estimates be based on small selection units whose individual grades cannot be estimated reliably from the exploration drilling data.Multigaussian kriging is one method based on a multivariate normal model for estimating recoverable reserves under such conditions. In this paper, a non-mathematical description of the multigaussian model is presented together with its application to the Pine Creek Gold Deposit. The results, when compared to the first year of production, are encouraging for the model but not without surprises.Together, Part 1 and Part 2 of this study combine a detailed and geologically conditioned variogram analysis with an appropriate estimation method for a highly variable low-grade gold deposit. This and other studies of gold deposits familiar to the author show convincingly both that while the appropriate geostatistical skills and techniques are necessary to tackle the question of reserves, equally important but often discounted is the need for an appropriate and compatible geological model. IntroductionThe Pine Creek gold mineralization is associated with saddle reefs, and quartz and quartz- sulphide veining within the Enterprise Anti cline. The anticlinal structure is complex and, prior to mining, the mineralization was considered to be mainly strata controlled. Grades vary up to 160 grams in l .5rn core samples with coefficients of variation in excess of three.The estimation of the recoverable reserves for such a depo sit must account for both the geological complexity and the extreme variability of the gold grade.Part 1 of this work presented the geological model for the deposit and summary statistics 0 f the gold data. A detailed structural and variogram analysis considered both gold grades and the normal score (or gaussian transform) of these gold grades for different composite sizes."

Jan 1, 1988

Gold mineralization like other low concentration high value commodities has gained the notoriety of being difficult to sample. This adversely affects the confidence that can be placed in resource estimates and ore reserves. As an example, it is not uncommon to find differences of the order of 30% between duplicates of a single sample sent to two different commercial laborartories. Two halves of drill core generally show marked differences in grade. Again differences of 50% are not uncommon in halved core. In the context of this type of "error" within the base data used for the resource estimate, many of the subtleties of computation methods and expert judgement of resource categories, are almost a case of shutting the gate after the horse has bolted. Managers, financiers and consultants must question the quality of the base data upon which resource estimates are made. They must insist that standard and duplicate samples are used to measure the accuracy and precision of commercial analytical laboratories, that sampling practices have been checked for possible bias and give tolerable repeatability. Further they must ensure there can be a realistic confidence in the estimates by correctly using these measures of data quality to quantify risk.

Jan 1, 1990

The auriferous Carbon Leader reef which is the subject of this study can be subdivided into two types of sedimentological units, each with its characteristic spatial variability. For the longwall mining method applied at Western Deep Levels gold mine, subdivision of the orebody improves the estimation of the actual error variance, but not the grade estimates themselves. This can only be achieved by choosing oreblocks of a size and shape that are maximal parallel to the longwall and minimal at right angles to it, within the limits of mining restrictions. While simple kriging is the only method that gives unbiased results, the difference between untransformed and logtransformed kriging is negligible.

Jan 1, 1987

By D. E. Ranta, George F. Weaton

Estimating the Iron Ore reserves of Minnesota are directly related to both the geology of the deposit and the Scandinavian heritage of its people. The flat lying deposits, when properly prospected, make estimating easy and accurate across wide areas of the Mesabi Range. It also makes taxation simple on the unmined reserves. The reserves are their heritage and all the people should benefit, not just the owners. Heritage also dictates that newly discovered ores were there before discovery, hence, subject to the omitted property tax and liable for six years back taxes.

Jan 1, 1992

By G. F. Weaton

1.1 The purpose of this paper is to show the way by which estimates are made of the tonnage and grade of iron ore and taconite reserves of Minnesota. 1.2 The procedures include those of estimating the open pit reserves of: (a) Natural iron ore, and (b) Taconite 1.3 The methods of estimation which will be discussed are primarily based on the information from exploring iron ore deposits. They consider the geology of the deposit as well as the contained mineral of potential value. 2.0 Some geologic, engineering, and economic principles. 2.1 Ore 2.11 "In the broad economic sense, and from a legal standpoint as well, ore is mineralized rock, which under appropriate conditions of time, space, technology, economics, and politics, can be mined, processed, and made to yield a saleable metal , or other mineral products at a profit."(Parks, 1957) Stated differently, metallic ore is rock material from which presently known methods of beneficiation, a merchantable concentrate, suitable for use in the manufacture of metals at a profit, can be produced. Crude ores as low as 0.38% metal, as in the case of copper and even lower in the case of the precious metals.

Jan 1, 1985

By Jean Michel Marino, Jean-Pierre Slama

"The computer methods used by the French Commissariat a l'Energie Atomique, which are applicable to any type of ore deposits, are:(i) Ore reserve estimation. The data are either the core analyses or gamma leggings. To determine the spatial distribution of the ore, three different methods of interpolation are used. Two of these are based on the least-squares theory and the third one is an application of the regionalized variable theory. The interpretations of the orebody by the geologists are introduced in the computer program as often as possible.(ii) Optimal open pit design. From the spatial distribution of ore, the three-dimensional outlines of the optimal pit are determined by a geometrical algorithm which allows different slopes varying with the azimuth.Finally, the optimization of annual successive plans arc discussed."

Jan 1, 2014

Western Mining Corporation has grown from a small gold exploration and mining company, funded by large established mining companies, into a large multi-commodity and multi-national mining company with shareholders who no longer have the same understanding of mining as the founders. Ore reserve calculation methods and reporting procedures have gradually changed throughout the group during this growth. These changes have been led by the newer mines, in particular the Kambalda nickel mines, where the need for more global, less conservative reserves were required to justify capital and forward sales contracts and to inform shareholders of the true worth of their company. This change in attitude to reserves has flowed back to the gold mines and has allowed a better informed management and investing public to plan for the future. Management of the calculation of reserves remains the responsibility of individual mining operations, but a corporate reporting and management structure exists through the office of the Director of Exploration and divisional chief geologists who strive to maintain standards of calculation and reporting. Specialist ore reserve geologists are starting to justify their place in the organisation, particularly at the larger operations. Reporting to the new AusIMM Standards is fully supported, although the amount of supplementary information requested will need to be considered carefully because of the large number of factors that make up even the simplest reserve.

Jan 1, 1990

In recent years stricter requirements imposed variously by the Companies Acts, auditors and the Stock Exchanges have resulted in annual financial statements of mining companies becoming more detailed, informative and useful. Standards of reporting on ore reserves have not kept pace with the improvements in financial information disclosure, despite the fact that ore reserves are usually the most important asset of a mining company. The ore reserve reporting practices of fifteen leading Australian mining companies are analysed against important specific criteria. In terms of detailed and meaningful disclosure, there is scope for major improve- ments in annual ore reserve reporting Practices.

Jan 1, 1981

By Gooday PE, Brech GE

Ore reserve categories used by Pancontinental Mining fall into one of three fundamental groupings: Geological In Situ Reserves Mining Reserves Production Estimates The first of these describes the total reserve within stated parameters without implication as to its mineability. The second is that part of the Geological In Situ Reserve which is considered mineable under a specific mining plan. The third is the Mining Reserve adjusted with appropriate dilution and recovery factors and thus represents the best estimate of the tonnage and grade of production. This practical three category system mirrors the standard steps traditionally taken in ore reserve estimation and readily conveys the basis of the estimates. An important, but secondary classification can be added to qualify the level of confidence in these estimates using the terms: Proved (or Measured) Probable (or Indicated) Possible (or Inferred) These terms can be applied to any of the fundamental groupings, but it is generally implicit that the level of detail required to produce meaningful Mining Reserves or Production Estimates would require the basic Geological Reserve to be at a Proved or at least Probable level of confidence. The application of these classification systems by Pancontinental is illustrated by reference to the Paddington Gold Project. The methods of calculation are described including the use of geostatistics. Reconciliations of actual production with predictions from reserves are carried out monthly and annually. To date there has been an excellent correlation with Production Estimates, based on both manual and geostatistical calculations.

Jan 1, 1987

By C. Mosoane

ERPM was formed in 1893 and as a result of its age, a large volume of data exists in a paper-based format and it was decided to electronically capture data in one of two critical mining areas?namely at Far East Vertical (FEV) Shaft Area (Lower Areas) and Hercules Shaft Area (Upper Areas). The life of mine is dependent on tonnage and grade from these areas. Geostatistical evaluation of the gold reserves has been applied on an ad hoc basis in the Hercules Shaft Area and on a continuous basis in the FEV area. This is the first evaluation using geostatistics that was performed on the Upper Areas. This paper is based on the premise that regardless of cut-off grades, geostatistical estimation (kriging) estimates and locates reserves better than ?traditional? methods e.g. polygonal method, inverse squared distance method and it endeavours to estimate and locate the high grade reserves in the Main Reef Leader of Upper Areas.

Jan 1, 2003

By W. P. Armstrong, O. Owens

"The process of arriving at the size and grade of· (a) a newly discovered body of mineralization, (b) a potential ore resource, (c) an orebody proposed for mining, or (d) the ore reserves in a mine, requires fundamental geological, and geometrical determinations as well as physical and chemical analyses. This paper outlines geological and geometrical features considered critical, in the authors' experience, in realistic reserve determination. These are discussed under the headings ""The Four Cs"". They include the Character, type or nature of the mineralization; the Continuity of various types of mineralization in the deposit; various key concerns in the Calculation besides the mathematics; and the Classification section which refers to basic considerations in classifying a mineral estimate. It is suggested that the responsibility for the calculation of a Resource or Reserve should be that of a geologist experienced in the ore type under review. Further, it should be the responsibility of the board of directors of the company owning the deposit to ensure that a sufficiently experienced person is chosen to carry out the process. IntroductionThe key issue of ore reserves is that they are intended as, a clear-as- possible statement of metal in place in a mineable orebody. Precise, widely understood definitions help convey understanding of the figures, but accuracy requires careful geological input before the calculation is made and a definition is applied. Many recent new mining operations in Canada have experienced serious shortcomings between original ore reserve figures and what was mined. This suggests deficiencies in the actual tonnage and grade calculated in advance of production. The authors suspect that much of the problem is due to a less-than-adequate outline of the orebody before calculating reserves for production or alternatively, treatment of grade and thickness data without regard to an orebody outline. Careful consideration of mineralization and ore continuity is one of the most important aspects of ore geology. Ore reserve calculation should be more than a mathematical exercise."

Jan 1, 1994

By Owen Owens, W. P. Armstrong

The process of arriving at the size and grade of: (a) a newly-discovered body of mineralization, (b) a potential ore resource, (c) an orebody proposed for mining, or (d) the ore reserves in a mine, requires fundamental geological, and geometrical determinations as well as physical and chemical analyses. This paper outlines geological and geometrical features considered critical, in the authors' experience, in realistic reserve determination. These are discussed under the headings "The Four Cs". They include the Character, type or nature of the mineralization; the Continuity of various types of mineralization in the deposit; various key concerns in the Calculation besides the mathematics; and the Classification section which refers to basic considerations in classifying a mineral estimate. It is suggested that the responsibility for the calculation of a Resource or Reserve should be that of a geologist experienced in the ore type under review. Further, it should be the responsibility of the board of directors of the company owning the deposit to ensure that a sufficiently experienced person is chosen to carry out the process.

Jan 1, 1993