Fig. 1: Schematic diagram illustrating the relationship between ore reserves, mineral resources, and the true extent of mineralisation within a hypothetical mineral deposit system.

Darker colours indicate increased geological confidence and probability of economic extraction. Circles indicate drillholes used for exploration and subsequent resource and reserve estimation, giving an indication of the confidence of the data used to delineate different parts of the mineralised system. Note that resources and reserves only make up a small part of the true extent of mineralisation; the latter may well be known as a result of field mapping, geological and geochemical sampling, geophysical imaging, and some drilling, but cannot be reported because the geological confidence in the continuity of the mineralisation and associated economic prospects may not be sufficient to meet the criteria needed for resource or reserve reporting. Exploitation of known reserves would be followed by conversion of resources to reserves and the delineation of more resources from the surrounding poorly delineated mineralisation, extending the initially stated life of mine and causing resources and reserves to remain static or potentially grow coincident with production. There are many examples of the above—such as Olympic Dam, Antamina, Ertsberg-Grasberg, Escondida, Kalgoorlie, Highland Valley, and the Sudbury Basin, amongst many others²⁰.