Table Of ContentMineral Resource
and
Ore Reserve Estimation —
The AusIMM Guide to Good Practice
Monograph 23
Edited by A C Edwards, MAusIMM, CPGeo
Published by
THE AUSTRALASIAN INSTITUTE OF MINING AND METALLURGY
Level 3, 15-31 Pelham Street, Carlton Victoria Australia 3053
i
© The Australasian Institute of Mining and Metallurgy 2001
The Institute is not responsible as a body for the facts and opinions advanced in any of its publications.
ISBN 1 875776 80 X
Desktop published by:
Penelope Griffiths and Angie Spry for The Australasian Institute of Mining and Metallurgy
Printed by:
New Generation
12 Barkly Street
Brunswick East Vic 3057
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Steering Committee
The following acted as Steering Committee Members or their Alternates,
or were co-opted as Chapter Leaders throughout the four year
development of Monograph 23.
G R Appleyard (Chairman)
J T Baldwin
A C Edwards (Editor)
J F Gilfillan
I M Glacken
I W Levy
D H Mackenzie
G Northcote
J E Rickus
L I Rozman
C L Smith
D V Snowden
P R Stephenson
P T Stoker
R F West
G I Wilson (Co-ordinator)
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List of Reviewers
The assistance of the following people in reviewing papers for this
monograph is gratefully acknowledged.
J T Baldwin H M Parker
S N Border J R Perkins
R W Corkery B M Phillips
C J Davey P J Ravenscroft
P J Forrestal S J Roden
I M Glacken J M Rose
D R Guibal L I Rozman
R J Gunthorpe C L Smith
M C Hancock C L Stegman
F E Kaesehagen P H Stitt
I W Levy D S Tyrwhitt
P J Lewis J E Vann
M G Lines A E Waltho
E J Malone N Weatherstone
P L McCarthy R F West
W McIntosh I Williams
P Nahan G I Wilson
P G Onley W J Wood
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Sponsorship
This monograph was made possible by the provision of loans from the companies and
Branches of The AusIMM listed below. The Australasian Institute of Mining and Metallurgy
sincerely appreciates their support.
Acacia Resources Limited
Adelaide Branch, The AusIMM
Central Victoria Branch, The AusIMM
Cobar Branch, The AusIMM
Delta Gold Limited
Homestake Gold of Australia Limited
Kalgoorlie Branch, The AusIMM
Melbourne Branch, The AusIMM
MIM Holdings Limited
Newcrest Mining Limited
Normandy Mining Ltd
North Limited
North Queensland Branch, The AusIMM
North West Queensland Branch, The AusIMM
Nuigini Mining Limited
Placer Dome Asia Pacific Limited
Sydney Branch, The AusIMM
Western Metals Limited
Western Tasmania Branch, The AusIMM
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Foreword
The estimation of a reliable Mineral Resource and thence Ore Reserve is arguably the most critical area to
the success of a mining development. There is ample evidence to suggest that project failure is often related
to poor estimation practice.
Estimation of a Mineral Resource is the starting point to successful mine development. A reliable estimate
combines good quality and relevant data, competent geological interpretation and a methodology for
producing from that data and interpretation, a reliable representation of the mineralised deposit, its geome-
try, its grade distribution, its metallurgical variability and its density.
Estimation of an Ore Reserve requires the input of mining engineers, metallurgists, mineral economists and
geologists. Political, legal, environmental and social factors also need to be properly assessed before devel-
opment of an apparently economic deposit proceeds.
The complete process of resource and reserve estimation is an iterative one in which all of these aspects
should be considered in the planning stages and throughout the process. There are many areas in which
things can go wrong and the consequences of error can be financially, legally and socially disastrous.
Monograph 23 represents the first attempt by The AusIMM to compile a series of papers that address all
aspects of current good practice in Mineral Resource and Ore Reserve estimation. It is the culmination of an
initiative that commenced in 1996 in recognition of the need for a guide to complement the JORC Code
which governs the reporting of these estimates in Australia.
In selecting papers for the monograph, the Steering Committee has addressed the totality of the process.
Papers have been selected for their illustration, often by case histories, of good and sensible practices and
sometimes of examples learnt.
In keeping with the spirit of the JORC Code, the monograph is not intended to be prescriptive. Mineral
deposits are unique and to prescribe procedures that must be followed in resource and reserve estimation
could be seen as absolving mining professionals from their responsibilities to identify those aspects of a
particular deposit that are critical for its viable exploitation. Additionally it not possible in one volume to
provide examples of good practice for all commodities and/or all orebody types.
The volume consists of 79 papers grouped into chapters which deal with specific aspects of the estimation
process. Although many have been published previously, all authors were invited to update their papers prior
to re-submitting them. The papers have been selected by the Steering Committee, whose members or
co-opted members have contributed the overview papers for each chapter.
Users of the monograph will include estimation practitioners and users of the estimate in management, the
financial services sector and elsewhere. Its use will assist the former to produce estimates made more
reliable by consideration of all of the relevant issues illustrated and provide the latter with a better apprecia-
tion for the content of and approach to a reliable estimate and for the risks inherent in the process.
Many people have contributed to the monograph. The Steering Committee wished to acknowledge the many
authors and reviewers of papers. Particular acknowledgements are made to Rick West for his initial promo-
tion of the initiative and to staff of The AusIMM, Sally Forbes, Penelope Griffiths, Angie Spry and Miriam
Way, for their skilled and cheerful assistance and organisation over four years.
G R (Bob) Appleyard
Chairman of Steering Committee
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Contents
Chapter 1
An Overview and Outline G R Appleyard 3
Common Sense and Good Communication in P R Stephenson and 13
Mineral Resource and Ore Reserve Estimation J Vann
How to Develop a Project A M Laird 21
Chapter 2
The Resource Database P T Stoker and J F Gilfillan 31
Case History: Century Zinc — The Resource A Waltho 37
Database from Discovery to Feasibility
The Resource Database: Now and in the Future R W Lewis 43
Outokumpu — Base Metals Best Practice I Neuss 49
Measurement of Bulk Density for Resource I T Lipton 57
Estimation
The Most Common Error in Applying ‘Gy’s Formula’ D François-Bongarçon 67
in the Theory of Mineral Sampling, and the History and P Gy
of the Liberation Factor
Sampling and Analysis Protocols and their Role in S Roden and T Smith 73
Mineral Exploration and New Resource
Development
Keeping the Resource Database Honest P Hayes 79
Variography, a Tool for the Resource Geologist D Guibal 85
The Resource Database Audit J F Gilfillan 91
Cadia Hill: From Discovery to a Measured Resource C F Moorhead, 97
— A Case Study P B Dunham,
G J Eastwood and
J F Leckie
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Chapter 3
Geological Interpretation and Geological Modelling D H Mackenzie and 111
G I Wilson
Tonnes, Grade and Economics — The ZC Experience D H Mackenzie 119
1985-1988
Estimation of Reserves and Resources in Shear Zone J L Baxter and M G Yates 125
Hosted Gold Deposits
Union Reefs: A Project Assessment and Development K J Hellsten, D Wegman 135
Case History and D Giles
Open Pit Mapping Aspects of Grade Control: R Watchorn 143
Advantages and Techniques
Geological Interpretation for Resource Modelling J H Duke and P J Hanna 147
and Estimation
The Role of Geology and Exploration Within the F J Tullemans, P Agnew 157
Mining Cycle at the Osborne Mine, NW Queensland and P Voulgaris
Structural Block Modelling at BHP Iron Ore’s Mt T Johnson 169
Whaleback Mine
Chapter 4
Mineral Resource Estimation I M Glacken and 189
D V Snowden
Let the Orebody Speak S Carras 199
KCGM Fimiston Resource Estimation Practice H Arvidson 207
Evolution of Resource and Reserve Estimation C H Lutherborrow 215
Methods at Pasminco Broken Hill Mine Southern
Underground Operations
How Domain Envelopes Impact on the Resource C L Stegman 221
Estimate — Case Studies from the Cobar Gold Field,
NSW, Australia
Reserve Estimation at Kambalda Nickel Operations I M Glacken, 237
— from 1970 to 2000 B L Sommerville and
C G Arnold
Beyond Ordinary Kriging — An Overview of J Vann and D Guibal 249
Non-Linear Estimation
Reconciliation of the McKinnons Gold Deposit, S M Elliott, D V Snowden, 257
Cobar, New South Wales A Bywater, C A Standing
and A Ryba
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Geological Modelling and Geostatistical Resource P S Collings, 269
Estimation of the Hope North Deposit S Khosrowshahi and
P K Ness
Conditional Simulation for Resource S Khosrowshahi and 285
Characterisation and Grade Control — Principles W J Shaw
and Practice
Determining Optimal Drilling Densities for Near N A Schofield 293
Mine Resources
Why Feasibility Resource Estimates Under-Valued J A Pocock 299
the Peak Orebody
Mineral Sands — Some Aspects of Evaluation, G Lee 315
Resource Estimation and Reporting
Chapter 5
Non-Resource Inputs to Estimation of Ore Reserves G R Appleyard and 325
— The Modifying Factors C L Smith
Mining Dilution and Losses in Underground Mining P L McCarthy 333
Selecting a Mining Method for Metalliferous F E Kaesehagen 337
Orebodies
Assessment of Resources and Reserves in Low Rank E P Waghorne and 347
Coals B Heizmann
Market Focused Ore Reserves at Hamersley Iron R J Chapman and E Chow 355
Metallurgical Evaluation Leading to the P J Lewis 359
Determination of Ore Reserves
Lessons From Manufacturing — Selecting Ore to J D Pease, M F Young, 369
Optimise the Mining and Milling Process A Clark and G Tucker
The Assessment and Management of Coal Recovery A Scott 379
in Open Pit Mines
Evaluation of Mineral Resources and Ore Reserves S Border and B Butt 389
of Industrial Minerals — The Importance of Markets
The Impact of Environmental Issues on the Definition P J Dundon 395
of Ore Reserves
Sustainability Issues for Mineral Discoveries A Sharp-Paul 403
The Costs of Ignoring Public Ire and the Benefits of M A Cooper 407
Genuine Community Consultation
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