Mineral reserves under price uncertainty

National reporting organizations and regulatory bodies for the minerals and mining sector are requiring publicly reported Ore-Reserve estimates to take account of uncertainties. Whilst methodologies that account for physical uncertainty appear relatively well developed, methodologies which can take account of economic uncertainty appear much less so. To counter this shortfall, we present an efficient and general methodology which can quantify the effect of price uncertainty within reserve estimates, providing both the expected reserve size and the associated distribution (box whisker plot). This statistical information can be used by interested parties to understand precisely where the reserve risks lie, which we highlight in a worked example.

► Mining regulators are requiring reserve estimates to take account of uncertainty. ► There is a shortfall in reserve estimate methodologies for economic uncertainty. ► We present a novel methodology that can take account of price uncertainty. ► This methodology calculates the expected reserve size and spread of risk. ► The method could be applied to a general range of mining operations.