Reserves and Resources

1. Ore Reserve Estimation & Classification

How to approach a mining project?

or simply: Project Evaluation

•Reserves strategy?, a dynamic concept of ore

reserves.
•Improved method to measure reserves?
krig…what?
•How to measure and control ore reserves?,
blocks?
•Best profits?, optimizing cutoff grades to
maximize discounted present values (NPV)
Dr. Antonio Nieto - Penn State

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 Alternate representation of ore
deposits

Massive deposit Vein deposit

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Basic Breakeven Cutoff Grade Concept:

How to estimate if one ton of rock is ore or waste

value per ton = cost per ton

(ton x grade) x price = (ton x cost)

(ton x grade) x price - sales cost = (ton x cost)

[(ton x grade) x price - sales cost] x recovery = (ton x cost)

[(t x g) x P - s] x y = (t x c)

g = c / ((P – s) * y)

g = c + @ / ((P – s) * y)
Dr. Antonio Nieto - Penn State

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 Possible open pit limits in a massive ore deposit

High Cutoff Grade = C

Low Cutoff Grade = A

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Dynamic approach to open-pit limits in a massive ore deposit:

“the onion concept”

Dr. Antonio Nieto - Penn State

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 Basic Breakeven Cutoff Grade Concept:
How to estimate if one ton of rock is ore or waste

value per ton = cost per ton

(ton x grade) x price = (ton x cost)

(ton x grade) x price - sales cost = (ton x cost)

[(ton x grade) x price - sales cost] x recovery = (ton x cost)

[(t x g) x P - s] x y = (t x c)

g = c / ((P – s) * y)

g = c + @ / ((P – s) * y)
Dr. Antonio Nieto - Penn State

Basic Breakeven Cutoff Grade Concept:

How to estimate if one ton of rock is ore or waste

value per ton = cost per ton

(ton x grade) x price = (ton x cost)

(ton x grade) x price - sales cost = (ton x cost)

[(ton x grade) x price - sales cost] x recovery = (ton x cost)

[(t x g) x P - s] x y = (t x c)

g = c / ((P – s) * y)

Dr. Antonio Nieto - Penn State

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 Breakeven Cutoff Grade
g = c / ((P – s) * y)
1. Milling breakeven cutoff grade
gm= c / ((P – s) * y)

1. Ultimate breakeven cutoff grade

gc= (c + m) / ((P – s) * y)
c = processing cost
m = mining cost
P = price
s = sales cost
y = recovery
Dr. Antonio Nieto - Penn State

The cyclic ore reserve problem

• Reserves to determine the optimum mine size
• Mine size (reserves) affects productions costs as economies
of scale are enjoyed with larger production rates
• Level of production costs determines what material can
be mined at a profit and thus determine the quantity of
reserves.
Select mining
rate
(based on size)
Compute ore Determine
reserves operating costs

Calculate
cut-off grade
Dr. Antonio Nieto - Penn State

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 Alternative classification SME 1999a

Demonstrated
Identified

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Alternative classification from USGS 1980

Degree of certainty: EXPLORATON
Feasibility of economic recovery:

Proven Reserves
ENGINEERING

Probable Reserves Resources

Resources

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 Alternative classification from USGS 1980
Feasibility of economic recovery: Degree of certainty: EXPLORATON

Reserves
ENGINEERING

Resources

Resources

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Reserve definition

Reserves. – That part of Demonstrated Resources which could be

economically extracted or produced at the time of determination. Reserves
include only recoverable materials

Note:
Reserves include only recoverable materials; thus, terms such as "extractable
reserves" and "recoverable reserves" are redundant and are not a part of this
Dr. Antonio Nieto - Penn State
classification system.

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 Resource/Reserve definitions

Identified Resources. - Resources whose location, grade, quality, and

quantity are known or estimated from specific geologic evidence.
Identified resources include economic, marginally economic, and
subeconomic components. To reflect varying degrees of geologic
certainty, these economic divisions can be subdivided into

Resource/Reserve definitions

Identified Resources. –

Demonstrated. - A term for the sum of measured plus indicated.

Measured. - Quantity is computed from dimensions revealed in
outcrops, trenches, workings, or drill holes; grade and(or) quality are
computed from the results of detailed sampling. The sites for
inspection, sampling, and measurement are spaced so closely and
the geologic character is so well defined that size, shape, depth,
and mineral content of the resource are well established.
Indicated. - Quantity and grade are computed from information
similar to that used for measured resources, but the sites for
inspection, sampling, and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance,
although lower than that for measured resources, is high enough to
assume continuity between points of observation.

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 Resource/Reserve definitions

Identified Resources. –

Inferred. -Estimates are based on an assumed continuity

beyond measured and (or) indicated resources, for which
there is geologic evidence. Inferred resources may or may not
be supported by samples or measurements.

Resource/Reserve definitions

Reserve Base. - That part of an identified resource that meets specified

minimum physical and chemical criteria related to current mining and
production practices, including those for grade, quality, thickness, and
depth.
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 Ore Reserve Parameters
Ore reserve estimates contain important
parameters:
1. Tonnage determination
2. Grade determination
3. Engineering
All require:
• Assay information
• Plans and sections
• Dilution control
• Tonnage factor
English = (ft3/ton)
Metric= Specific Gravity (tons/m3)
• Cut-off grade to be used
• Mineral Recovery
Dr. Antonio Nieto - Penn State

Dr. Antonio Nieto - Penn State

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Dr. Antonio Nieto - Penn State

Dr. Antonio Nieto - Penn State

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Tonnage factor vs. Specific Gravity
• Specific Gravity of Fe

5 ton/m3 x 1 m3 = 5 ton Fe

• Tonnage Factor of Pb

9 ft3/ ton / 1 ft3 = 9 ton Pb

Dr. Antonio Nieto - Penn State

Dr. Antonio Nieto - Penn State

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 Dilution
An extremely important difference between
in-situ reserves and ore reserves is dilution.
Dilution is the mixing of waste material with
ore during the mining process
Example:

In situ tons : 9500 ton

In situ grade (Ag): 7.7 oz/ton
Avg. grade of waste (Ag): 2.9 oz/ton
Dilution: 20%
Total tons recovered: 9500ton (1.2) = 11,400ton
= 9500ton (7.7 oz/ton) + 1900ton (2.9 oz/ton)
11,400ton
= 78660 oz / 11,400ton
Dr. Antonio Nieto - Penn State
Mill-head grade: = 6.9 oz/ton (Ag)

Minimum mining width 3ft

50ft
2ft
1ft
Dr. Antonio Nieto - Penn State 100ft

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 Ore Reserve Estimation

1. Traditional Methods
• Mining Block
• Polygons
• Triangles
• Section (area of influence)

2. Statistical Methods (used with block

modeling)
• Inverse distance
• Geostatistics
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Ore Reserve Estimates

Calculation by Mining Block

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 Ore Reserve Estimates
Calculation by Polygons

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Dr. Antonio Nieto - Penn State

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Dr. Antonio Nieto - Penn State

Dr. Antonio Nieto - Penn State

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