AI-GEOSTATS: What are appropriate measures of reliability for Mineral Resource and Ore Reserve estimates?

[Bill Shaw]

Greetings   You may be aware that in Australia the Joint Ore Reserve Committee (JORC) has 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 ensure Public Reports best inform investors. It thus appears important that similarly classified estimates have similar “reliability” even if such reliability can only be broadly generalised, rather than quantified. �         AGAINST - The JORC Code is not currently prescriptive and relies on the Competent Person making decisions about many issues including Transparency, Materiality and Competence (all defined 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 estimated. This may make the Code more prescriptive if such errors are only provided by certain estimation methods.   Either way, if the JORC Code discusses this issue it must 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.   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.   Regards,   Bill Shaw [EMAIL PROTECTED]