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.
National Instrument 43-101 (Standards of Disclosure for Mineral Projects) is the Canadian Securities Administrators' rule governing every public disclosure of scientific/technical mining information — resource and reserve estimates, exploration results, and economic studies — by a company listed on a Canadian stock exchange. It was adopted after the Bre-X fraud (1997, fabricated Indonesian gold assays) exposed how easily an unregulated technical disclosure regime could inflate an issuer's value on fabricated data, and its core mechanisms directly target that failure mode: (1) disclosure must be prepared or supervised, and approved, by a named QUALIFIED PERSON (QP) — a professional engineer or geoscientist registered with a recognized association and carrying relevant, verifiable experience, who is personally professionally accountable for the disclosure; (2) resource/reserve estimates must follow the CIM Definition Standards (the Canadian implementation of the McKelvey-derived measured/indicated/inferred and proven/probable categories); (3) an issuer must file a detailed TECHNICAL REPORT (43-101F1 form) supporting any material resource/reserve disclosure, including data verification, QA/QC procedures, and the estimation methodology used; and (4) all such filings are made publicly available and auditable through Canada's electronic filing system (formerly SEDAR, now SEDAR+). Equivalent regimes exist internationally under the same underlying logic (a qualified, accountable person; standardized definitions; public, auditable filing) — the JORC Code (Australasia), SAMREC (South Africa), PERC (Europe), and the CRIRSCO international template that harmonizes them.
