Mineral Resources vs. Reserves
From Geological Confidence to a Mine Plan
The difference between "it's there" and "we can actually mine it."
- A mineral resource estimates a deposit with reasonable prospects for eventual economic extraction.
- A mineral reserve is the part supported as economically mineable after technical and other factors are assessed.
- Inferred, indicated and measured describe increasing geological confidence in resources.
- Probable and proven are reserve categories. Inferred resources cannot be converted directly into reserves.
- Always read the estimate’s date, assumptions and whether resources include or exclude reserves.
Two Different Questions
A resource asks what the company has reasonable grounds to believe is in the ground. A reserve asks how much of that material can be included in an economically justified mining plan.
The distinction is similar to having a well-supported inventory of ingredients versus a costed plan for producing and selling a meal. Knowing the ingredients are there is essential. It does not settle every question about the finished business.
The Resource Confidence Ladder
These are reporting classifications, not promises that a mine will be built. A company may report different parts of the same deposit in different categories.
What Turns a Resource Into a Reserve?
Reserve estimates use pre-feasibility or feasibility work and assess factors such as mining losses, processing, costs, infrastructure, environmental matters and legal or social conditions. Reserves are classified as probable or proven. The CIM Definition Standards set out these Canadian reporting distinctions.
In practice, the team must design a mine that works with the actual deposit. Rock may be left behind for technical reasons; additional lower-grade material may enter the mined ore. Recovery and operating assumptions also influence the outcome.
Do Not Count the Same Metal Twice
A company may state its resources inclusive of reserves, or exclusive of reserves. “Inclusive” means the reserve material is already contained within the resource estimate.
Adding the two together would double-count it.
For example, if a hypothetical company reports 2 million resource ounces inclusive of 800,000 reserve ounces, the headline is not 2.8 million ounces. Read the table notes before doing arithmetic.
Estimates Can Change
More drilling can improve confidence or reveal that the original geological interpretation was too optimistic. Changes in metal prices, costs, design or recovery assumptions can also affect what is reported. An older estimate should be read alongside the latest technical report and company updates.
The useful habit is to keep geological evidence and demonstrated economics separate in your notes. A bigger resource may be encouraging; the next question is how much can support a workable mine.
Next section · 03 Development & Economics
PEA, PFS & Feasibility Studies
How a project is de-risked on paper before any dirt actually moves.
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