Question 21 of 29: NI 43-101 Terminology

Question 5.3: NI 43-101 Terminology (10 marks)

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.

Mineral inventory is the raw, unqualified estimate of in-situ mineral content BEFORE applying any economic, technical or legal "modifying factors" — NI 43-101 distinguishes it sharply from a reportable Resource or Reserve because it carries no assurance of economic viability and must never be presented to investors as if it were one.

Data verification is the Qualified Person's independent check of the drilling, sampling, assay and QA/QC data underlying an estimate (duplicate/check assays, database audit, site visit) — it exists because public disclosure integrity depends on the QP personally vouching for data they did not necessarily collect themselves.

Mineral resource is a concentration of material with REASONABLE PROSPECTS FOR EVENTUAL ECONOMIC EXTRACTION, supported by geoscientific evidence and estimated with a stated confidence (Measured/Indicated/Inferred) — a resource does NOT yet require a demonstrated mine plan.

Ore reserve is the economically MINEABLE portion of a Measured or Indicated Resource after applying modifying factors (mining method, dilution, recovery, costs, markets, legal/environmental/social/permitting factors) at least to a Pre-Feasibility Study level — it is the subset of resources actually planned to be mined.

Measured, Indicated and Inferred are progressively DECREASING confidence tiers, driven by data density/quality and geological continuity — Measured supports detailed mine planning, Indicated supports reserve conversion with appropriate modifying factors, and Inferred is too uncertain to convert directly to a reserve or to use in an economic study beyond preliminary assessment.

Qualified Person "QP" is a professional (engineer or geoscientist) registered with a recognized professional association, with at least five years of relevant experience, who takes personal professional responsibility for the technical content of a disclosure — the QP mechanism is what makes NI 43-101 disclosure legally accountable rather than merely promotional.

Technical report is the standardized NI 43-101 Form 43-101F1 document (prepared/supervised by a QP) that must support any material public disclosure of mineral resources/reserves or an economic study — it provides the auditable technical backup for the summary figures a company releases.

SEDAR (now SEDAR+) is Canada's electronic system for public company continuous-disclosure filings, where technical reports and other regulatory filings are lodged and made publicly searchable — it is the mechanism that makes NI 43-101 disclosure actually accessible and auditable by investors and regulators.

Producing issuer is a company already generating revenue from mineral production — NI 43-101 applies somewhat different (often less onerous) disclosure timing/thresholds to a producing issuer than to an exploration-stage company, reflecting its different risk profile.

"Independence" requires that a QP have NO beneficial interest (equity, options, contingent fee) in the property or issuer that could reasonably be seen to compromise their professional judgement, beyond a routine fee-for-service consulting relationship — independence (or explicit disclosure of its absence) is what gives a technical report its credibility to third-party readers such as lenders and public investors.