NI 43-101 and JORC Resource Standards & Terms

Currently there are two internationally-recognized systems of standards and protocols regulating resources and reserves reporting, JORC and NI 43-101. They use the same resource and reserve categories (proven, probable, measured, indicated, inferred) and are in most cases interchangeable. NI 43-101 is a Canadian standard also used by many US companies, while JORC is an Australian standard also common in Europe. Here's a nice article on the subject.

Companies may not use the terms resources or reserves unless a qualified person (a specially-licensed geologist) has examined their drill and other sample data and certified that the body of minerals in question meets the certain requirements as to the feasibility of its economic recovery. The rules regulate sample size minimums, and define procedures to ensure that ore samples have not been tampered with prior to lab testing, as well as various other protocols. Company management must also personally certify that they believe the reported figures are accurate, which makes them liable for wilful or negligent misrepresentations.

It is important to understand the terms Resource and Reserve as they are used in the mining industry. The use of these terms is subject to very strict boundaries under securities laws.

Formal Definitions

Below is a summary from the Canadian CIM Definition Standards on Mineral Resources and Mineral Reserves. Source

A ‘Mineral Resource’

is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.

An ‘Inferred Mineral Resource’

is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

An ‘Indicated Mineral Resource’

is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

A ‘Measured Mineral Resource’

is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

A ‘Mineral Reserve’

is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

A ‘Probable Mineral Reserve’

is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

A ‘Proven Mineral Reserve’

is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.