Suggestions for Good Grade Capping Practices from Historical Literature

Extreme high grades often exert too much influence on surrounding block estimates, leading to a smearing of high grades that can cause overestimation of mineral resources. This concern underlies the decision to cap high grades, i.e., to lower the highest grades in a drill hole data set to some level deemed to be reasonable for producing reliable resource estimates. The choice of a capping level can, by itself, have a large influence on the analysis of the economic viability of a project. Despite this, it is often a choice that is made arbitrarily, guided more by art and tradition than by sound technical analysis. This paper makes suggestions for good capping practices, using methods and procedures that have been presented elsewhere, in the technical literature and in conference papers. The authors propose to use capping only if absolutely necessary, and review examples of cases where capping may not be necessary, or where capping does not make the estimates more reliable. It addresses two particular instances where capping is recommended: (1) where there is good reason to believe that estimation with uncapped grades will overstate the true underlying average grade, and (2) where there is potential for overly optimistic assessments of local block grades in the vicinity of some very high grade assays. The proposed capping practice is based on adjustments to only a very few high grade assays. The level of this capping can be assessed by bootstrapping and through analysis of the effect of extreme values on summary statistics like the average and the coefficient of variation. The paper recommends that good practice include an examination of the potential for local overestimation in higher grade areas.