Abstract
Resource models provided to mine planners often have features that produce unintended effects in the mine planning and Reserves estimation processes, making them unfit for these purposes. Two of the most concerning are the specification of Resource categories on a block-by-block basis, and the deletion of geological confidence information (i.e., Measured, Indicated, or Inferred categories) for low-grade blocks by reclassifying them as “unclassified” or “waste.”
Block-by-block Resource categories are typically based on mathematical confidence measures from the grade estimation process. Reporting Codes definitions indicate that Resource category depends on the geological confidence of continuity of grade between sample points. Mathematical modelling artefacts may be useful supporting information, but categorizing Resources requires geological experience and expertise. Zones of each category should span multiple drillholes and samples, with relatively smooth boundaries, not consist of a patchwork of spots around or between sample points.
Spotty Resource models lead to underground stopes or open pit blasts comprising model blocks of multiple Resource categories, making Reserve categorization of practical mining units problematic. Granularity is the critical issue. Model blocks are useful, but artificial, constructs, typically much smaller than practical mining units. Confidence, and hence Resource categories, should not be attributed to volumes smaller than the minimum practical mining volumes.
For mine planning, Resource categories in block models should be indicators of geological confidence only. Planning determines what material is included in the economically viable plan. Low-grade material with Measured or Indicated confidence should be included in the Reserve, but cannot be if irrevocably reclassified as “Not-Resource” by applying high-level RPEEE considerations before planning is done. Detailed modifying factors supporting Reserve definition should supersede less-rigorous pre-planning assessments for final Resource classification and reporting.
Conceptual and practical issues with how cut-off grades are derived and applied create additional concerns for both Resource and Reserve estimation. Industry-standard break-even cut-offs may significantly over-estimate the value material at the calculated cut-off grade. Underground, they are virtually guaranteed to not deliver common corporate value maximization goals.
Consideration of these and other issues indicates that, rather than the typical current linear siloed approach, an integrated collaborative interdisciplinary process for Resource and Reserve estimation is needed to achieve geological and mine planning best practice. This in turn suggests that Resource and Reserve estimation cannot be squeezed into a short timeframe within the typical corporate annual planning cycle, but should sit outside that cycle as a continuous process. Publicly reported Resources and Reserves should be simply a snapshot of the status of the processes on the reporting date.