Glossary
Mining and finance terms used across the site.
A
- All-in sustaining cost (AISC)
- A mine's full cost to keep producing one unit of metal, including operating costs, sustaining capital, royalties and corporate overheads. The usual measure for comparing mines.
- Assay
- A laboratory test that measures how much metal a rock or core sample contains.
B
- Bankable feasibility study
- A feasibility study detailed and independent enough for lenders to base a project loan on it. Not a formal category in the reporting codes; lenders decide what is bankable.
- Block model
- A 3D computer model that divides a deposit into blocks, each with an estimated grade, density and confidence category. Resource estimates are built from it.
- Burn rate
- How fast a company spends its cash, usually per month or per year. Cash divided by burn rate gives the runway before it must raise again.
C
- Capex
- Capital expenditure: money spent to build or extend a mine, such as the plant, equipment and infrastructure, as opposed to the cost of running it.
- Carried interest
- A share of a project whose costs are paid by the other partners, usually up to a milestone such as a feasibility study or a build decision.
- Collar
- The point on the surface where a drill hole starts.
- Contained metal
- The amount of metal in a resource before mining and processing losses, usually tonnes multiplied by grade. It is not what a project can actually sell.
- Cut-off grade
- The minimum grade used to decide which material counts as mineralized. Changing it changes how an intercept is reported.
D
- Deposit type
- A family of ore deposits that formed in a similar way, such as porphyry copper or orogenic gold. The type shapes a deposit's likely size, grade, shape and mining method.
- Diamond drilling
- Drilling with a diamond-tipped bit that cuts a solid cylinder of rock (core). Slower and dearer than RC drilling, but it shows the rock's structure.
- Dilution
- Two different things. In finance, the fall in an existing shareholder's percentage ownership when new shares are issued. In mining, waste rock mixed in with ore during extraction.
- Discount rate
- The yearly rate used to reduce future cash to a value today. A higher rate reflects more risk or a higher required return.
E
- Earn-in
- An agreement where a partner earns an ownership interest in a project by spending a set amount on it over a set period.
- Enterprise value (EV)
- A company's market value plus its debt minus its cash: the value the market places on its projects and business, excluding money in the bank.
- Environmental impact assessment (EIA)
- A formal study of a project's effects on the environment and communities, reviewed by the government before it approves the mine.
- Exploration licence
- A time-limited right to explore an area for minerals, usually with work or spending commitments. It does not by itself give the right to mine.
F
- Free, prior and informed consent (FPIC)
- The principle that Indigenous peoples should be able to give or withhold consent to projects on their lands, freely, in advance and with full information.
- FS (feasibility study)
- The detailed engineering and economic study used to decide whether to build a mine, accurate to about ±10–15%. Also called a definitive feasibility study (DFS).
G
- Geochemistry
- In exploration, analysing soil, stream sediment or rock samples for metals to find areas with unusual concentrations worth following up.
- Geophysics
- Measuring physical properties of the ground, such as magnetism, density or electrical conductivity, to see what lies beneath the surface.
- Government royalty
- A payment to the state for the minerals extracted, set by law as a share of revenue, of profit or per tonne. It is a tax, not a financing.
- Government take
- Everything the state receives from a mine (royalties, income tax, other levies and any state equity stake) as a share of the project's total cash flow.
- Grade
- The concentration of metal in rock. Gold is usually quoted in grams per tonne (g/t); base metals in percent.
- Grade-tonnage curve
- A table or chart showing how a deposit's tonnes and average grade change with the cut-off grade. Raising the cut-off gives fewer tonnes at a higher grade.
- Gram-metres
- Intercept length multiplied by grade (for example 42 m at 2.31 g/t is about 97 gram-metres). A quick way to compare intercepts of different lengths.
H
- Historical estimate
- A resource estimate made before, or outside, a modern reporting code. It can be disclosed with warnings but cannot be treated as a current resource.
I
- Impact benefit agreement (IBA)
- A contract between a mining company and an Indigenous group or community setting out jobs, contracts, payments and environmental commitments in return for support.
- In-situ value
- Contained metal multiplied by the metal price. It ignores grade, recovery, costs and the odds of a mine being built, so it says almost nothing about what a deposit is worth.
- Inferred resource
- The least certain resource category. There is enough evidence to imply, but not confirm, continuity of the mineralization. It cannot be converted directly into a reserve.
- Intercept
- The section of a drill hole that crosses mineralization, reported as a length at an average grade.
- Internal rate of return (IRR)
- The discount rate at which a project's net present value is exactly zero: in effect, the project's yearly return on the money invested.
J
- Joint venture
- A project owned by two or more partners who share its costs and output in proportion to their interests.
- Junior explorer
- A small company, usually listed, that raises money to explore for mineral deposits and does not yet produce metal.
L
- Lassonde curve
- A conceptual chart of how a mining company's value tends to move from discovery through development to production, named after Pierre Lassonde.
- Life of mine
- How long a mine produces, set by its mineable tonnes and how fast they are processed. The whole project life also includes the build years before and the closure years after.
M
- Major miner
- A large mining company running a portfolio of big, long-life mines, often in several countries and commodities. Majors replace reserves partly by buying projects from smaller companies.
- Mid-tier miner
- A producing company with one to a handful of mines, larger than a junior and smaller than a major. Often an active buyer of mid-size projects.
- Mining licence
- The right to build and operate a mine over a defined area, usually granted after a feasibility study and environmental approval.
- Modifying factors
- The mining, processing, economic, legal, environmental, social and government factors applied to resources to convert them into reserves.
N
- Net present value (NPV)
- The value today of all a project's future cash flows, after subtracting its costs and discounting each year's cash for time and risk.
- NSR royalty
- A net smelter return royalty: a percentage of the revenue from metal sold, after limited deductions such as refining and transport, paid to the royalty holder.
- Nugget effect
- Erratic assay results caused by metal occurring as scattered coarse particles, common in gold. Neighbouring samples can show very different grades.
O
- Offtake agreement
- A contract under which a buyer, usually a smelter or trader, agrees to buy some or all of a mine's product.
- Ore
- Rock that contains enough metal to be mined and processed at a profit. Rock below the cut-off grade is waste.
P
- Payability
- The share of the metal in a concentrate that a smelter or refinery pays the miner for. Zinc is typically around 85%, copper around 96%, gold close to 100%.
- Payback period
- The time it takes for a mine's cash flow to repay its initial capital cost.
- PEA (preliminary economic assessment)
- An early study of whether a deposit could be mined profitably. Also called a scoping study. It may include Inferred resources and is not a basis for reserves.
- PFS (pre-feasibility study)
- A study that chooses the preferred way to mine and process a deposit and tests its economics, accurate to about ±25–30%. It is the first study that can declare reserves.
- Private placement
- A sale of new shares directly to selected investors rather than to the public. The most common way junior miners raise money.
- Project finance
- A loan to build a mine that is repaid from the mine's own cash flow and secured on the project, rather than on the owner company as a whole.
- Prospect generator
- A company that finds and stakes promising ground, then options or sells it to others to explore, keeping a royalty or a stake rather than spending its own money on drilling.
Q
- QA/QC
- Quality assurance and quality control: checks such as certified standards, blanks and duplicate samples inserted with drill samples to prove the assays are reliable.
- Qualified person
- The professional who takes responsibility for a resource or reserve estimate under a reporting code. Called a competent person under JORC and SAMREC.
R
- RC drilling
- Reverse circulation drilling: a hammer breaks the rock into chips that are blown up the inside of the drill pipe. Faster and cheaper than diamond drilling.
- Reclamation bond
- Money or a guarantee lodged with the government to cover the cost of closing and restoring a mine site if the owner cannot pay.
- Recovery
- The share of the metal in the ore that the processing plant captures. The rest is lost to tailings.
- Reporting code
- A set of rules, such as JORC or NI 43-101, that governs how companies publicly report exploration results, resources and reserves.
- Reserve
- The part of a resource that a study has shown can be mined economically under stated assumptions. It requires at least a pre-feasibility study.
- Resource
- A concentration of mineralization with reasonable prospects for eventual economic extraction, classified by confidence as Inferred, Indicated or Measured.
- Resource nationalism
- Government action to take a larger share of mineral wealth, through higher taxes, forced state stakes, export bans or expropriation.
- Retention licence
- A licence, available in some countries, that lets a company hold a defined deposit that is not yet economic, with lower work commitments than an exploration licence.
S
- Stability agreement
- A contract with the state that fixes a mine's tax and royalty terms for a set period, protecting it from later changes in the law.
- State free-carried interest
- A share of a mining project that the state receives without paying its part of the costs. Common in many mining codes.
- Stream
- A financing where an investor pays upfront for the right to buy a share of a mine's future metal output, usually at a fixed low price.
- Surface rights
- The right to use the land surface itself, separate from the right to the minerals. A company often needs access agreements with the landowner or community before it can work.
T
- Tolling
- Processing ore at someone else's plant for a fee, instead of building your own.
- Treatment charge
- The fee a smelter charges per tonne of concentrate to process it. With refining charges and penalties, it is part of the cost of sale.
- True width
- The real thickness of a mineralized zone, measured at right angles to it. It is usually less than the drilled length because holes cut the zone at an angle.
- Twin hole
- A new drill hole drilled close beside an old one to check whether the old hole's results can be trusted.
W
- Warrant
- A right to buy a company's shares at a set price before a set date. Juniors often issue warrants alongside shares when they raise money.