Resources and reserves
Resources measure what is in the ground and how confidently. Reserves are the part that a study shows can be mined at a profit.
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A resource is what is in the ground. A reserve is the part of it that a study shows can be mined and sold at a profit.
What it is
Codes split estimates into two families. Resources describe what is in the ground and how confidently it is known. Reserves describe what can actually be mined and sold at a profit.
Resources
A is a concentration of material with reasonable prospects of eventually being mined. It comes in three categories, by confidence:
| Category | Confidence | Typical drill spacing | What it can be used for |
|---|---|---|---|
| Low: continuity assumed, not proven | About 80–200 m | Early studies (PEA) only; never reserves | |
| Indicated | Reasonable: continuity reasonably established | About 40–100 m | Can become Probable reserves |
| Measured | High: continuity confirmed | About 15–50 m | Can become Proven reserves |
Reserves
A is the part of Measured and Indicated resources that can be mined at a profit, after applying the : mining, processing, metallurgy, infrastructure, economics, marketing, legal, environmental, social and government factors.
| Category | Comes from |
|---|---|
| Probable reserve | Indicated resources, or Measured with some uncertainty in the modifying factors |
| Proven reserve | Measured resources |
Reserves need at least a pre-feasibility study. A preliminary economic assessment () cannot declare reserves, because it may use Inferred resources. See mining studies for how the three studies differ.
How conversion works
- Inferred → Indicated → Measured: by drilling more closely. Typically 50–80% of Inferred tonnes convert when infilled.
- Indicated → Probable, Measured → Proven: by a study applying the modifying factors. Typically 60–90% of the tonnes convert.
- Inferred → reserves: not possible directly.
Reserves also include dilution and mining losses, so reserve tonnes and grade differ from the resource they came from.
Inclusive or exclusive?
Some companies report resources inclusive of reserves: the reserves are part of the resource figure. Others report exclusive of reserves: the resource is what is left over. Adding the two when they are inclusive double-counts. Reports should say which.
Why it matters
Resources show potential; reserves show a business. The share of a resource that is Inferred, and how much of it is likely to convert to reserves, says more about a project's maturity than the total tonnes.
Ranges are indicative and vary by deposit and region. This is educational material, not investment advice.
Key terms
Next in this track
Reporting codes and the qualified personPublic mining companies must report resources and reserves under a recognised code, signed by a qualified person. This article explains the codes and what they guarantee.Related articles
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Educational material only. Nothing here is investment advice or an offer to buy or sell any security or mineral interest.