Mine Planning and Design

Lecture 2:
Geological background, Reporting Standards

MINING ENGINEERING DEPARTMENT – MINE PLANNING AND DESIGN

2023
 Lecture Outcomes
• Know the current reporting standards in the mining industry
• Understand what is meant by resources and reserves
• Understand the regulations underlying the reporting of
geological resources and reserves
• Understand the stages of exploration
 Reporting Standards
• Main reporting standards (Members of the CRIRSCO -
http://www.crirsco.com/national.asp)
• JORC code – Australia
• The CIM Definition Standards for Mineral Resources and Reserves (2014) – Canada
• NI 43-101 – Canada (More detailed)
• Pan-European Reserves & Resources Reporting Committee – Europe
• SAMREC Code – South Africa
• The SME Guide for Reporting Exploration Results, Mineral Resources and Mineral
Reserves (The 2017 SME Guide) – USA
Valuation standards
• SAMVAL – South Africa
• VALMIN – Australia
• CIMVAL - Canada
 Definitions
Exploration results
• Data and information generated from activities designed to locate economic deposits and to establish
the size, composition, shape and grade of these deposits.
• Exploration methods include geological, geochemical, and geophysical surveys, drill holes, trial pits
and surface and underground openings.

Mineral Resource
• A concentration or occurrence of solid material of economic interest in or on the Earth’s crust in
such form, grade (or quality) and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade, geological characteristics and continuity of a
Mineral Resource are known, estimated or interpreted from specific geological evidence and
knowledge.
• Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred,
Indicated and Measured categories
 Mineral resource classes
Inferred Mineral Resource
• That part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis
of limited geological evidence and sampling. Geological evidence is sufficient to imply but not
verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes.
• Must not be converted to an ore reserve, it is reasonably expected that the majority of Inferred
mineral resources could be upgraded to Indicated with continued exploration.
Indicated Mineral Resource
• That part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical
characteristics are estimated with sufficient confidence to allow the application of Modifying Factors to
support mine planning and evaluation of the economic viability of the deposit.
• Geological evidence is derived from detailed and reliable exploration, sampling and testing and is
sufficient to assume geological and grade (or quality) continuity between points of observation where
data samples are gathered.
• May only be converted to a probable ore reserve
 Mineral resource classes
Measured Mineral Resource
• That part of a Mineral Resource for which quantity, grade (or quality), densities,
shape, physical characteristics are estimated with confidence sufficient to allow the
application of Modifying Factors to support detailed mine planning and final
evaluation of the economic viability of the deposit.
• Geological evidence is derived from detailed and reliable exploration, sampling and
testing and is sufficient to confirm geological and grade (or quality) continuity
between points of observation where data samples are gathered.
• May be converted to a Proved Ore Reserve or under certain circumstances to a
Probable Ore Reserve.
 Ore Reserve
• The economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses,
which may occur when the material is mined or extracted and is defined
by studies at Pre-Feasibility or Feasibility level as appropriate that
include the application of Modifying Factors. Such studies demonstrate
that, at the time of reporting, extraction could reasonably be justified.
• Reference point for definition of reserves is usually the point where the
ore is delivered to the processing plant.
 Ore Reserve Clases
Modifying factors can be
Probable Ore Reserve Proved Ore Reserve
classified into:
• The economically • The economically • mining,
mineable part of an mineable part of a • metallurgical,
Indicated, and in some Measured Mineral • economic,
circumstances, a Resource. A proved ore
• marketing,
Measured Mineral reserve implies a high
Resource. degree of confidence in • legal,
• The confidence in the the modifying factors. • environmental, social
modifying factors and governmental
applying to a probable
reserve is lower than
that to a proved ore
reserve
Overview of resource and reserve classification
 Exploration Stages:
Reconnaissance/grassroots exploration
For identifying the existence of initial drilling targets and potential mineralization on a
regional scale.
Preparations at this stage include:
• Literature survey,
• Obtaining a general area map (shows transportation routes etc)
• Acquisition of geophysical data and geological maps, if available,
• Synthesis of all available data and concepts, and
• Obtaining permission (reconnaissance license/permit [RP]) from the state/ provincial/territorial
government.
Activities at this stage include:
• Remote sensing, airborne and ground geophysical survey, regional geological overview, map
checking/mapping on 1:250,000 and 1:50,000 scales, geochemical survey by chip/grab sampling of rocks
and weathered profiles, broad geomorphology and drainage, pitting, and trenching to expose mineralized
zones at ideal locations, and limited scouting/reverse circulation/diamond drilling to identify the possible
existence/extent of mineralization.
 Exploration Stages:
large area prospecting
▪ Systematic process of searching promising mineral targets identified during
reconnaissance.
▪ Requires acquisition of a prospecting license (PL) from the state/ provincial/
territorial government.
Activities include
• mapping on a 1:50,000 to1:25,000 scale,
• linking maps with a Universal Transversal Mercator (UTM),
• analysis of history of mining, if it exists,
• ground geophysics, geochemical orientation survey,
• pitting/ trenching, reverse circulation and diamond drilling up to a 100 to1000 m wide
section
• borehole /geophysical logging, and baseline environmental studies.
Estimates of quantities are inferred, based on the interpretation of geological,
geophysical, and geochemical results.
 Exploration Stages:
General exploration
Initial delineation of an identified deposit.
• Mapping on a 1:25,000, 1:5000, or larger scale for narrowing down the drill interval along the strike(100 to 400 m)
and depth (50 to100 m),
• Detailed sampling and analysis of valuable minerals and deleterious commodities
• Quality assurance/quality control,
• Borehole geophysical survey
• Bulk sampling for laboratory and bench-scale beneficiation tests,
• Collection of environmental baseline parameters.
• The objective is to establish the major geological features of a deposit, giving a reasonable indication of continuity,
and providing an estimate of size with high precision, shape, structure, and grade

The estimates are in the Indicated and Inferred categories. The activity ends
with preparation of broad order of economic or prefeasibility or scoping
studies.
 Exploration Stages:
detailed exploration
▪ Conducted before the start of the mining phase or mine development
▪ Involves:
• Three dimensional delineation to outline firm contacts of the orebody,
• Rock quality designation (RQD) for mine stability
• Preparation of samples for pilot plant metallurgical test work.
• Mapping at 1:5000 and 1:1000 scales
• Close space diamond drilling (100 by 50, 50 by 50 m),
• Borehole geophysics,
• A trial pit in case of surface mining,
• A subsurface entry with mine development at one or more levels in case of underground mining.
▪ The sample data are adequate for conducting three dimensional geostatistical orebody modeling
employing inhouse or commercial software.
▪ A bankable feasibility study report is prepared
▪ A mining lease (ML) is obtained at this stage for the purpose of undertaking mining operations
▪ The permissible area under the ML will be negligible and may be 1/100th of the reconnaissance area.
 Exploration Stages:
ongoing exploration
• Diamond drilling is a continuous process throughout the entire life of the mine
to supplement the reserve of depleted ore.
• Conducted by underground diamond drilling to enhance reserve down-dip
• As a rule of thump: The aim of the mine geologist is to replace 1 tonne of
depleted ore with 2 tonnes of new reserve at the end of each year
Typical Exploration Scheme
 Decision Making:
Exploration Expenditure
Justifying grassroots exploration
• Key question: If this exploration is successful, what is the best deposit that can be
expected?
• Evaluation is based on an assumed/ hypothetical orebody described in terms of
tonnage, grades, depth, and physical location.
• Economic analysis, based on the hypothetical deposit may take only a few hours to a
few days of work.
• Sensitivity/Scenario analysis useful at this stage to ascertain if the best
assumed/hypothetical deposit indicates viability.
Prove the viability of a project before SPENDING money
 Decision Making:
Exploration Expenditure
Justifying ongoing exploration – Two objectives:
▪ Finding more reserves
▪ Understanding existing reserves to ensure greater confidence and reliability of
estimates
Additional reserves
▪ usually translate into easily quantifiable additional value in a straightforward way
• higher potential production rates,
• efficiencies due to larger equipment,
• fixed costs spread over larger outputs
Reliably understood reserves
▪ Not necessarily worth more than reserves that are understood to a lesser degree
▪ Value realized in the form of risk based gains which are difficult to quantify
• Typical sources of risk: degree of faulting, folding, and ore quality changes