Mineral Reserves, Resources and Exploration Potential: How to Read Deposit Data

How to interpret and compare mineral reserves and resources.

Deposit Evaluation

Mineral Reserves, Resources and Exploration Potential: How to Read Deposit Data

A figure such as “10 million tonnes” tells you very little on its own about the level of confidence in a mineral deposit or its development potential. To interpret it correctly, you need to know what has been estimated, which classification system was used, the level of geological and economic confidence, and the date of the assessment.

Descriptions of mineral deposits may refer to reserves, resources, prospective resources, geological confidence categories, and numerical classification codes. These terms are not interchangeable. Particular care is required when working with Ukrainian geological documentation and international investment reporting. The Ukrainian Classification of Mineral Reserves and Resources of the State Subsoil Fund and reporting systems based on CRIRSCO use different classification structures. Similar terminology therefore does not imply automatic equivalence between categories.

1. Why Is Knowing the Quantity of Mineral Material Not Enough?

Suppose an asset description states that a deposit contains 10 million tonnes of mineral material. This figure alone is insufficient for a preliminary assessment. You need to determine:
  • whether the figure represents reserves or resources;
  • which category or class they belong to;
  • what geological work supports the estimate;
  • whether a geological and economic assessment has been completed;
  • which parameters and cut-off criteria were used in the estimate;
  • when the estimate was prepared or approved.
Two identical figures may represent assets with fundamentally different levels of confidence. In one case, the geological structure may have been investigated in detail through drilling and sampling. In another, the estimate may rely substantially on extrapolation or geological analogy.
Practical rule: never use a reserve or resource figure without also considering its category or class, the date of the estimate, and the document from which it was obtained.

2. What Do Reserves Mean Under the Ukrainian Classification?

The Ukrainian classification distinguishes reserves according to the degree of geological and techno-economic study. Explored reserves represent mineral material whose quantity, quality, technological properties, and geological conditions have been studied in sufficient detail to support the preparation of development plans for mining and mineral-processing facilities. Preliminarily explored reserves have been studied in less detail. The available information should be sufficient to determine the industrial significance of the deposit, but the level of detail is not equivalent to that of explored reserves. Geological confidence, however, is only one characteristic. The Ukrainian system also considers the degree of techno-economic study and the economic significance of reserves. Therefore, the term “reserves” alone does not indicate how ready a particular part of a deposit is for development.
What to verify: the geological confidence category, reserve class code, geological and economic assessment materials, and the document recording the results of the assessment.

3. What Are Prospective and Prognostic Resources?

Resources represent mineral potential with a different level of confidence compared with reserves. Prospective resources are estimated within productive areas where deposits of the relevant geological and industrial type are already known. Their assessment may be based on geological, geophysical, geochemical, and other investigations, as well as data interpretation and geological analogy. Prognostic resources describe the potential for deposits of a particular type to occur within prospective territories where commercial deposits may not yet have been discovered. Such estimates rely substantially on geological indications and analogy with known mineralised areas. Resource estimates can therefore be valuable for assessing the potential of a territory and planning further exploration, but they should not be added to confirmed reserves as if both represented the same level of confidence.
How to interpret: the more an estimate depends on prediction, extrapolation, and geological analogy, the greater the role of additional exploration in subsequent assessment.

4. What Are Balance Reserves?

Ukrainian geological documentation frequently uses the term “balance reserves”. The term has an economic meaning within the Ukrainian classification system. Balance reserves are reserves for which the economic efficiency of extraction was substantiated by techno-economic calculations or relevant operating indicators at the time of the geological and economic assessment. The key words are “at the time of the assessment.” Economic conditions can change. Product prices, energy costs, equipment, logistics, labour, and environmental expenditures may all be different today. Processing technologies may also have changed. The historical classification of reserves as balance reserves is therefore an important characteristic of a deposit, but it does not replace an up-to-date economic model of the project.
What to verify: the date of the geological and economic assessment, the applied cut-off criteria, the processing flowsheet, prices, and the main economic assumptions on which the assessment was based.

5. How Does the CRIRSCO Approach Differ?

International investment practice widely uses reporting standards aligned with CRIRSCO, including JORC, PERC, CIM and other national and regional reporting codes and standards. Under the CRIRSCO framework, Mineral Resources are classified according to increasing levels of geological knowledge and confidence as:
  • Inferred Mineral Resources;
  • Indicated Mineral Resources;
  • Measured Mineral Resources.
Mineral Reserves are classified as:
  • Probable Mineral Reserves;
  • Proved Mineral Reserves.
However, a Mineral Reserve is not simply a Mineral Resource supported by more drilling. Conversion from resources to reserves requires consideration of the Modifying Factors: mining, processing, metallurgical, economic, marketing, legal, environmental, social, and other factors that may affect the feasibility of economic extraction. This is why international reserve reporting links geological confidence with the practical feasibility of developing a mining project.
Important: a Mineral Resource under CRIRSCO terminology does not mean all known mineralisation. There

Leave a Reply

Your email address will not be published. Required fields are marked *