Cost Estimating Standards For International Reporting Of Ore Reserves: What Are They? What Should They Be?

Guidelines for publication of information defining the amount and grade of resource material available in a deposit are well established in Australasia?s JORC Guidelines, Canada?s National Instrument 43-101 and similar documents in South Africa, Peru, Chile and elsewhere (Table 1). These guidelines provide standards to apply regarding the geologic and geostatistical basis for describing the level of confidence to be assumed for an estimate of the amount and grade of material. All of them provide for a strict distinction between material that has been demonstrated to be economically mineable and that which has not, and all of them provide terms such as ?resource? or ?exploration information? to be applied to data regarding material that has not been demonstrated to be economically mineable. It is not until an economic study has been completed that we are allowed to apply the powerful terms ?reserves? and ?ore? to our deposit material. Indeed, the application of these eye-catching labels immediately tells the reader that an economic study has been completed by a qualified person, and that the results of the study were positive. While extensive guidelines are established for describing the level of confidence in published geologic data, and the nature of the economic study that should be accomplished before using the terms ?reserves? or ?ore?, surprisingly little guidance is provided regarding the process to use, and the level of detail to attain, for estimating capital and operating costs for the study. The intent of this paper is to lay the groundwork for development of suitable guidelines for the cost estimating process. While the codes do not provide specific instructions for the cost estimate, they do provide numerous hints and clues to help determine the level of detail expected and the type of procedure to apply in preparing the estimate. This paper will first review the various codes to gain an insight into the thinking of the drafters of the codes regarding their unstated expectations for the cost estimating process. Based on this review, a series of guidelines are proposed for this purpose.