Impact of Competent Persons' judgements in Mineral Resources classification

Uncertainty with regard to estimated grades and tonnages of a mineral deposit demands risk assessment in order to build investor confidence and attract the interest of other stakeholders in the success of a project. Uncertainties associated with Mineral Resource estimates can lead to unreliable production schedules and unpredictable cash flows. However, the techniques used in the mining industry to determine these uncertainties are inconsistent, because the important decisions taken in the process are solely dependent on the responsible Competent Person (CP), without limitations. This leads to disparities between different CPs' results, using data-sets from the same drill-holes. The various standard codes for public disclosure provide guidelines and recommendations for the classification of Mineral Resources and Reserves but do not provide details on, for example, the amount of geological and geostatistical information needed to qualify for each category of Resources and Reserves. The parameters used to generate the classification categories are subjectively assumed by the responsible CP. In this paper we investigate the impacts of different CPs' judgements on resource classification, using the same data-sets. The results underpin the need for the mining industry to develop a uniform Mineral Resources and Reserves classification framework that can minimize or avoid significant discrepancies that lead to potential misleading public disclosures.