Transforming Resources Into Reserves – Opportunities and Risks

Mark Berry

Principal Geologist
AMC Consultants Pty Ltd
Level 12, 179 North Quay, Brisbane, Qld 4000
Telephone: 61 7 3230 9028
Email: mberry@amcconsultants.com.au

Abstract

Successful exploration is often measured by defining new mineral resources and this is a fantastic achievement for all companies. However a successful mining venture depends on the effective conversion of a Mineral Resource into an Ore Reserve.

Statistics continue to show that many new mining operations do not perform to feasibility study expectations, experiencing technical problems including lower than planned development and production rates, ore tonnage and/or grade/quality deficiencies, geotechnical/stability problems, unplanned dilution, reduced metallurgical performance and unbudgeted capital/operating costs.

Many problems can be traced back to inadequate assessment of the factors used in transforming the Mineral Resource into an Ore Reserve. Of these problems, the majority can be directly attributed to inadequate understanding or application of geological inputs.

There are also opportunities to be gained through rigorous estimation of Ore Reserves. An ultra conservative approach to estimating Ore Reserves can result in incorrect decisions being made when planning the scale of mining and/or processing facilities, denying the project additional profit.

Throughout this process of transforming resources into reserves, the input of the geologist is vital.