When is a resource not a resource? To answer this, we must look at a poorly defined aspect in the industry: the QP’s consideration for reasonable prospects for
eventual economic extraction.
Under JORC Code definitions, “A ‘Mineral Resource’ is a concentration or occurrence of 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.” While these terms are defined under CRIRSCO, the basis for the definition of what is ‘reasonable’ and what is ‘eventual’ remains relatively subjective and at the discretion of the QP.
Examples of these differences include the requirements and reporting for remnants, pillars, or low-grade mineralisation under JORC and SAMREC, which are
not defined under CIM or S-K 1300. As another example, CIM guidelines include
the requirement for ‘reasonable’ to be via demonstration of the spatial continuity of the mineralisation. At a minimum, these constraints should be addressed by creating constraining volumes, using costs and assumptions for operating mines or conceptual scenarios for new projects. In all cases, input parameters and methods
should be documented.
The second consideration is the time scale. A notable change in the reporting codes under S-K 1300 is that the terminology excludes the term ‘eventual’. The SEC requires the assessment of the Mineral Resources to be demonstrated at the time of reporting. This could impact many assumptions being used to define key assumptions such as potential markets, price, or recovery technologies. The assumption of the time period should be disclosed within any technical report summary.
These issues were raised in a due diligence SRK completed in 2021. The client company had significant portions of polymetallic resources which on paper demonstrated a long future to the life of mine. Upon review, the ‘Mineral Resource’ was an inventory of all material remaining, and did not consider the impact of previous mining or the requirements to achieve the required minimum stope size. This reduced the available material by over 50%. This highlights that the one consistency across all the reporting codes is that the Mineral Resource is not simply an inventory of all mineralisation.
