Proven and Probable Mineral Reserves - Defined | Mining University

Proven and Probable Mineral Reserves - Defined

I was working with one of our accountants the other day when he asked me a funny question.  He said that he'd already received the schedule for the Proven and Probable (P&P) reserves but was wondering if we were going to do a schedule with Measured and Indicated (M&I) resources?

"Well no," I told him. "By the time we've run the Lerchs-Grossman algorithm on the data, designed the pits and scheduled the results all the M&I material in the schedule will have been converted to P&P."

This kind of miscommunication happens all the time.  Not just between mine engineers and accountants but between mine engineers and geologists.  Sometimes, it even happens between two professional mine engineers.

To help with this confusion I started looking online for some definition of P&P vs M&I material.  This proved to be surprisingly hard to find.  I expected to find specific definitions in Canada's National Instrument (NI) 43-101 but was surprised to find this was not the case.  In fact, I had a hard time finding the 43-101 document in the first place.  The listing for NI 43-101 is maintained by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM).  Their web page was so confusing that I still cannot find a way to navigate there through links on their site.  I finally found the actual link on Wikipedia.  Please find below the links to both NI 43-101 and the CIM website.

NI 43-101
Canadian Institute of Mining, Metallurgy and Petroleum (CIM)

Now that I finally found the document for NI 43-101 I was terribly distressed to discover that the definitions for P&P and M&I were not included with the document.  These definitions were included by reference to the CIM definition standards.  Here is the link:

CIM DEFINITION STANDARDS - For Mineral Resources and Mineral Reserves

The other place I thought to look was on the JORC website.  This is the Australasian equivalent of NI 43-101. The JORC website looks like it is 100 years old and designed by a third grader but it was much easier to navigate than the CIM website.  The JORC code includes the definitions right in the code, not by reference to another document.  I did notice that the JORC definition and the NI 43-101 definitions were suspiciously similar.  It seems that the mining industry has taken the concept of a global economy to heart.  The JORC and JORC Code can be found at the links below:

JORC
JORC Code

The majority of the world uses Canada's NI 43-101 or the JORC code as the defining guidelines for mineral deposit reporting.  They are much more robust than the American guidelines.  There are specific guidelines in the SEC code but in my search today I found this document from the Bureau of Mines and the US Geological Survey published in 1980.  The circular is five pages long and is about what most standards looked like before Bre-X came along.

USBM/USGS Principles of a Resource/Reserve Classification for Minerals

By the way, here are the definitions of Proven and Probable reserves from the CIM definition standards:

Probable Mineral Reserve
 A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated and, in
some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility Study.   This Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that demonstrate, at the time of
reporting, that economic extraction can be justified.

Proven Mineral Reserve
 A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral
Resource demonstrated by at least a Preliminary Feasibility Study. This Study must
include adequate information on mining, processing, metallurgical, economic, and other
relevant factors that demonstrate, at the time of reporting,  that economic extraction is
justified.  


18 comments:

  1. What would be the cost for feasibility study for the the resources to move from Probable to proven?

    ReplyDelete
    Replies
    1. This comment has been removed by a blog administrator.

      Delete
    2. This comment has been removed by a blog administrator.

      Delete
    3. This comment has been removed by a blog administrator.

      Delete
    4. This comment has been removed by a blog administrator.

      Delete
  2. Great post, I just started looking the same definition. Thanks a lot.

    ReplyDelete
    Replies
    1. This comment has been removed by a blog administrator.

      Delete
  3. Thanks for sharing the great article. The writing style you followed is good enough to touch the heart of the reader. I greatly appreciate your talent to come up with an excellent blog post like this. Keep writing; expect many more articles from you!

    cheap essay writing service

    ReplyDelete
  4. It really provides mineral and mining knowledge to everyone. Also the author shared many links on the corresponding topics. Book Review Writing Services

    ReplyDelete
    Replies
    1. Milen,
      I can't believe that you are promoting cheating at our nations schools and universities. Shame on you for taking the low road to advertise your despicable services.
      Tony

      Delete
  5. This comment has been removed by a blog administrator.

    ReplyDelete
  6. This comment has been removed by a blog administrator.

    ReplyDelete
  7. This comment has been removed by a blog administrator.

    ReplyDelete
  8. This comment has been removed by a blog administrator.

    ReplyDelete
  9. This comment has been removed by a blog administrator.

    ReplyDelete
  10. This comment has been removed by a blog administrator.

    ReplyDelete
  11. This comment has been removed by a blog administrator.

    ReplyDelete
  12. This comment has been removed by a blog administrator.

    ReplyDelete