24-MMP-A4 Mine Valuation and Mineral Resource Estimation · May 2018
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, 2018-May. 3 hours duration; closed book, with one handwritten 8.5×11 in. reference sheet (both sides) permitted; only an approved Sharp or Casio calculator allowed. Question 1 is compulsory (40 marks, parts 1.1–1.9); candidates then select THREE of the five optional Questions 2–6 (20 marks each) to complete the paper.
Reference texts: Isaaks & Srivastava, An Introduction to Applied Geostatistics (variogram modelling, kriging estimators); Hustrulid, Kuchta & Martin, Open Pit Mine Planning and Design (mine valuation, cut-off grade theory, incremental analysis); Gentry & O'Neil, Mine Investment Analysis (Canadian mining taxation, cash flow/risk, smelter contract terms, NSV/NSR); SME Mining Engineering Handbook, 3rd ed. (ore deposit models, mineral exploration/evaluation stages, equipment utilization); O'Hara, T.A., “Quick Guides to the Evaluation of Orebodies,” CIM Bulletin, Feb. 1980 (parametric capital-cost estimating); CIM Definition Standards for Mineral Resources and Mineral Reserves / National Instrument 43-101 (resource/reserve classification and reporting).
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.
The McKelvey diagram is a two-axis box classification: the HORIZONTAL axis is increasing geological confidence/assurance (Inferred → Indicated → Measured, driven by sample density and data quality), and the VERTICAL axis is increasing economic feasibility (Sub-economic → Marginally economic → Economic, driven by cost/price). Any occurrence can be placed in this grid by its position on BOTH axes independently — geological confidence says nothing by itself about economic viability, and vice versa.
Modern usage (CIM/NI 43-101) keeps this exact logic: a MINERAL RESERVE exists only in the top row (economically mineable, at Measured or Indicated confidence — termed Proven and Probable respectively), while a MINERAL RESOURCE can exist anywhere in the grid, including at Inferred confidence or in the marginal/sub-economic rows, because a resource is defined by reasonable prospects of eventual economic extraction, not by CURRENT proven economics. An Inferred occurrence, however economically attractive it might eventually prove, can never be classified a Reserve until its geological confidence is upgraded to at least Indicated.
