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The Mineral Resource Risks

Minimizing risks in mineral resource projects requires thorough data collection, analysis, and quality control procedures. Estimates based on limited, widely spaced data can result in large errors and financial losses. Continuous review of databases and expert due diligence reviews are important parts of feasibility evaluations to identify potential problems before mining begins. However, some issues may still only appear once operations start. Therefore, good reconciliation practices are critical, with experienced analysis of results to identify causes and guide remedial actions and planning decisions. Poor reconciliations could stem from errors in resource estimates or inadequate grade control and mining practices.

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Gladys Condori
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49 views1 page

The Mineral Resource Risks

Minimizing risks in mineral resource projects requires thorough data collection, analysis, and quality control procedures. Estimates based on limited, widely spaced data can result in large errors and financial losses. Continuous review of databases and expert due diligence reviews are important parts of feasibility evaluations to identify potential problems before mining begins. However, some issues may still only appear once operations start. Therefore, good reconciliation practices are critical, with experienced analysis of results to identify causes and guide remedial actions and planning decisions. Poor reconciliations could stem from errors in resource estimates or inadequate grade control and mining practices.

Uploaded by

Gladys Condori
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© © All Rights Reserved
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The Mineral Resource

Source: AusiMM 23M


Minimising the risks
Fast tracking without taking the time to collect
and analyse all the necessary exploration and
engineering data . . . can lead to marginal
projects being committed to production with
the property owner exposed to financial risk.
(Trythall, 1991)
Resource and reserve estimates may be based on widely
spaced and limited information. Significant errors can result
from poor quality data, from the lack of real representivity by
these widely spaced sample points, from poor geological interpretation
and from inappropriate practices of estimation. The
room for error can be very large and the implications of such
errors financially disastrous.
The importance of quality data and good quality control has
already been discussed. Continual review and auditing of the
database through the process of estimation is good practice. In
particular, complete and expert due diligence review is a fundamental
and initial part of a good feasibility and evaluation
process (Gilfillan, 1997 and this volume).
Nonetheless, experience shows that even with quality due
diligence before and during feasibility, some problems will not
show up until the mine is in operation. It is at this stage that
good reconciliation procedures are critically important.
Thorough and experienced analysis of the results of such
reconciliations is necessary before drawing conclusions as to
their causes and to remedial action. Poor reconciliations may
not simply be a result of errors or misinterpretations in the
original resource estimation data and process but can also result
from poor grade control and thus from poor mining practice
(Schofield, 1998 and this volume). Bad interpretation of reconciliation
data can lead to incorrect planning decisions. Treatment
rate may be changed, new developments may be initiated
or deferred and additional capital may be incurred, sometimes
with the wisdom of hindsight, at cost to the operation.

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