24-MMP-A4 Mine Valuation and Mineral Resource Estimation · December 2014
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
EGBC National Exam — Mining and Mineral Processing Engineering, 09-Mmp-A4 Mine Valuation and Mineral Resource Estimation, 2014-Dec. 3 hours duration; one handwritten 8.5×11 in reference sheet permitted (not an open-book exam); only approved Sharp or Casio calculators allowed. Question 1 is compulsory (40 marks, parts 1.1–1.7); candidates then select FOUR of the six optional Questions 2–7 (15 marks each) to complete the paper.
Reference texts: Isaaks & Srivastava, An Introduction to Applied Geostatistics (variogram modelling, kriging estimators, volume–variance relations); Hustrulid, Kuchta & Martin, Open Pit Mine Planning and Design (mine valuation, NPV and cut-off grade methodology, mineable reserves); Gentry & O'Neil, Mine Investment Analysis (Canadian mining taxation, smelter/refining contract terms, net smelter return); SME Mining Engineering Handbook, 3rd ed. (mineral exploration/evaluation stages, ore reserve classification); CIM Best Practice Guidelines and NI 43-101 (Canadian Securities Administrators).
Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.
Measured, Indicated and Inferred. The three confidence sub-categories of a Mineral Resource, in descending order of geological certainty: Measured is estimated from closely spaced, verified data with high confidence in grade/tonnage continuity; Indicated from moderately spaced data giving a reasonable, but not the highest, level of confidence; Inferred from limited, widely spaced data implying geological continuity but with too much uncertainty to apply modifying (economic) factors reliably — Inferred Resources cannot be converted directly to a Reserve.
Mineral inventory. An informal, non-NI 43-101 term for the total in-situ tonnage and grade of a deposit as estimated, without regard to whether any of it meets the "reasonable prospects for economic extraction" test; NI 43-101 explicitly discourages disclosing a bare "mineral inventory" figure in place of a properly classified Mineral Resource, since it can mislead investors into treating unclassified tonnage as if it were resource-grade.
Mineral resource. A concentration of economic interest in such form and quantity that reasonable prospects exist for eventual economic extraction, classified Measured/Indicated/Inferred (see above) — a geological/quantity estimate, not yet a demonstrated economic reserve.
Mining Reserve. The economically mineable part of a Measured or Indicated Mineral Resource, demonstrated by at least a Preliminary Feasibility Study incorporating realistic modifying factors (mining, metallurgical, economic, marketing, legal, environmental, social, governmental), subdivided Probable and Proven.
Ore reserve. An older/informal synonym for "Mineral Reserve" used interchangeably in some (especially pre-2000s or non-Canadian, e.g. JORC-influenced) usage; modern NI 43-101 technical reports use "Mineral Reserve" as the defined term and generally avoid "ore reserve" to prevent ambiguity with the geological (rather than economic) sense of "ore."
Qualified Person ("QP"). An engineer or geoscientist with at least five years of relevant experience in the type of mineralization/deposit and activity being reported, who is a member in good standing of a recognized professional association (e.g. EGBC), and who takes personal, named responsibility for the technical content of a resource/reserve estimate or technical report — the individual accountability mechanism at the core of NI 43-101.
Data verification. The QP's documented process of confirming that the exploration data (sampling, assaying, surveying, database entry) underlying a resource/reserve estimate is reliable — including QA/QC review, check assays, and site visits — required to be disclosed in the technical report as its own dedicated item.
Technical report. The formal NI 43-101-compliant document (commonly following the "Form 43-101F1" template) that a Qualified Person prepares and files to support public disclosure of a resource/reserve estimate or significant new project development, covering geology, sampling/data verification, resource/reserve estimation methodology, and QP's opinion.
Producing issuer. A reporting issuer with at least one mineral property currently in commercial production; NI 43-101 relaxes certain disclosure/technical-report triggers for a producing issuer relative to an exploration-stage issuer, in recognition that its properties already carry an operating track record.
"Independence." A QP is "independent" of the issuer under NI 43-101 if they have no employment, ownership, or other relationship with the issuer or the property that could reasonably be seen to interfere with objective judgment; certain disclosures (e.g. an issuer's first resource estimate, or a preliminary economic assessment for some issuers) specifically require an independent QP rather than an internal company employee.
SEDAR. The System for Electronic Document Analysis and Retrieval, the Canadian Securities Administrators' electronic filing system through which every NI 43-101 technical report and other continuous-disclosure document must be filed and made publicly available (superseded operationally by SEDAR+ in 2023, after this exam's sitting).
