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.
A mineral resource is a concentration of material of intrinsic economic interest, in such form, grade and quantity that there are reasonable prospects for eventual economic extraction — it is a geological/quantity estimate (subdivided Inferred, Indicated, Measured by increasing confidence) that need not yet be proven economically mineable. A mining reserve (properly the "Mineral Reserve" under NI 43-101) is the economically mineable part of a Measured or Indicated Mineral Resource, demonstrated by at least a Preliminary Feasibility Study that incorporates realistic mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental factors, and includes dilution and mining losses (subdivided Probable and Proven). In short: a resource is "what is geologically there with reasonable extraction prospects," a reserve is "what has been demonstrated, through a formal technical/economic study, can actually be mined at a profit under current conditions" — every reserve is a resource, but not every resource qualifies as a reserve, and Inferred Resources may never be converted directly to a Reserve without further drilling to upgrade confidence.
