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CIM Definition Standards - Canadian Institute of Mining's Most Common Terms Explained

This page displays a selection of the most common definitions of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), i.e. the CIM definition standards.

Mineral resource and mineral reserve estimates and resulting technical reports must be prepared by or under the direction of a Qualified Person.

What Is a Qualified Person

An individual who is an engineer or geoscientist with at least five years experience in mineral exploration, mine development or operation, or mineral project assessment. This individual is a member or licensee in good standing of a professional association and has to have relevant experience of the subject matter of the mineral project and the technical report.

In order to convert a mineral resource into a mineral reserve, a preliminary feasibility study has to be completed.

What Is a Preliminary Feasibility Study

A comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method has been established (underground or open pit) and an effective method of mineral processing has been determined, and includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, economic, social, and environmental factors and the evaluation of other relevant factors which are sufficient for a Qualified Person to determine if all or part of the Mineral Resource may be classified as a Mineral Reserve.

The relationship between the mineral resource and mineral reserve categories are displayed in the following figure:

Mineral Resources vs. Mineral Reserves

Mineral Resources vs. Mineral Reserves

What Is a Mineral Resource

A concentration of minerals in or on the Earth’s crust that 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.

A mineral resource can be subdivided into inferred, indicated and measured categories. An inferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource but an indicated mineral resource has a lower level of confidence than a measured mineral resource.

Inferred Mineral Resource

A reasonable assumption of quantity and grade on the basis of geological evidence and limited sampling.

Inferred mineral resources must be excluded from estimates forming the basis of feasibility or other economic studies.

Indicated Mineral Resource

An estimate of quantity and grade which 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.

An indicated mineral resource estimate is of sufficient quality to support a preliminary feasibility study which can serve as the basis for major development decisions.

Measured Mineral Resource

Mineralization may be classified as a measured mineral resource by the qualified person when the nature, quality, quantity and distribution of data are such that the quantity and grade of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability.

Mineral reserves are those parts of mineral resources which result in an estimated quantity and grade which is the basis of an economically viable project after taking all relevant factors into account. Thus, the main difference between a mineral resource and a mineral reserve is that a mineral resource is based on geological interpretation and a mineral reserve is analysed further taking the mining operation into account.

Mineral Reserve

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.

Mineral reserves can be subdivided into probable mineral reserves and proven mineral reserves.

Probable Mineral Reserve

The economically mineable part of an indicated mineral resource demonstrated by at least a preliminary feasibility study. A probable mineral reserve has a lower level of confidence than a proven mineral reserve.

Proven Mineral Reserve

The economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study.

Application of the proven mineral reserve category implies that the qualified person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report.

To find all the CIM Definition Standards please click on the link provided.

 

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Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for investors passionate about investing in undervalued stocks. Through UndervaluedEquity.com, he shares his experience and knowledge and will soon reveal his personal stock portfolio.


 
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