Mineral Reserve

A mineral reserve is the part of a resource that a study has shown can be mined at a profit under stated assumptions.

Definition

The economically mineable portion of a measured or indicated mineral resource, demonstrated by at least a preliminary feasibility study. Mineral reserves include consideration of mining, metallurgical, economic, marketing, legal, and environmental factors.

Why it matters

Reserves are the closest thing in mining disclosure to a commercial commitment. Declaring one means a qualified person has applied real costs, real recoveries and a stated metal price and concluded the material pays for its own extraction. Very few juniors ever get there.

In practice

Reserves come in two categories, proven and probable, derived from measured and indicated resources respectively. The metal price assumption sits in the technical report and is worth finding — a reserve declared at $2,400 gold behaves differently at $1,700.

Where people go wrong

Reserves are always smaller than the resource they come from, sometimes dramatically. A company quoting only its resource may be doing so because the reserve is unflattering or does not exist.

See also

  • Mineral Resource A concentration of material of economic interest in or on the Earth's crust in such form, grade, and quantity
  • Proven Reserve The economically mineable portion of a measured mineral resource, representing the highest level of confidence
  • Probable Reserve The economically mineable portion of an indicated and, in some cases, a measured mineral resource. Probable re
  • Feasibility Study A comprehensive technical and economic study of a mineral project used to demonstrate whether the project is e

More resource reporting terms