The lowest confidence resource category — estimated from limited drilling and geological inference.
A mineral resource for which quantity and grade are estimated based on limited geological evidence and sampling. Inferred resources have the lowest level of geological confidence and should not be converted to mineral reserves. Further exploration is required to upgrade to indicated or measured categories.
Inferred material is where the option value in an explorer sits, and also where most of the disappointment comes from. It is real enough to justify more drilling and not solid enough to build a mine plan on.
Under NI 43-101, inferred resources cannot be included in the economic analysis of a feasibility study, and only in a limited way in a PEA. When a company upgrades inferred material to indicated, expect the tonnage to shrink and the grade to move — often downward.
Treating inferred ounces as equivalent to indicated or measured ounces when comparing companies on an enterprise-value-per-ounce basis. It flatters exactly the companies that deserve it least.