How to Read an NI 43-101 Report

What NI 43-101 is and why it exists

NI 43-101 (National Instrument 43-101) is the Canadian regulatory standard for the public disclosure of scientific and technical information about mineral projects. It governs how companies listed on the TSX, TSX Venture Exchange, and CSE talk about mineral resources, reserves, and economic studies — what they must disclose, who must sign off, and how the numbers must be calculated.

NI 43-101 came into force in 2001 in direct response to the Bre-X scandal. In 1997, Bre-X Minerals collapsed after its much-hyped Busang gold deposit in Indonesia turned out to be a salting fraud — the drill core had been doctored with shavings of placer gold. Investors lost about $6 billion. Canadian regulators spent the next four years building a standard that would make a Bre-X-scale fraud structurally harder to commit, and the result is the document any junior-mining investor today still has to wrestle with.

The core idea is simple: every public statement about a mineral resource must be backed by a written technical report, prepared or supervised by a credentialed Qualified Person who puts their professional license on the line, and filed with the regulator where any investor can read it. The reports follow a strict template of 27 numbered items so that data is comparable across companies and projects.

NI 43-101 is the most widely-recognised mineral reporting standard in the world. Comparable standards exist elsewhere — the JORC Code in Australia, the SAMREC Code in South Africa, and the SK-1300 standard for US-listed issuers — and all four are broadly aligned through the CRIRSCO international standards body. If you can read an NI 43-101, you can read any of them.

The 27-item structure

Every NI 43-101 technical report follows the same numbered table of contents. Here is the full list with a one-line note on what each item contains and how much attention it deserves from a typical investor.

The investment-relevant signal is concentrated in Items 1, 14, 15, 16, 19, 22, and 25. A disciplined reader can extract a first-pass investment view from any NI 43-101 in 20 to 30 minutes by working through that list in order.

The five sections that actually matter

Item 1 — Summary

Item 1 is a 5- to 15-page executive summary written by the Qualified Person. It compresses the entire 300-page document into the key conclusions: headline resource numbers, headline economics, and the QP's overall view of the project.

Read this first. Always. Even before opening the press release the company put out about the report. Two reasons. First, the summary is written by the QP, not by the IR team — the tone is generally more measured than the marketing materials. Second, if there is a material difference between what the press release says and what the summary says, you want to spot it early. That gap is almost always informative.

Item 14 — Mineral Resource Estimate

The resource table is the heart of the report. It will look something like this:

Three things to extract before moving on:

1. The category mix. In the table above, the deposit is 52% Inferred by ounces. That is a meaningfully less proven resource than one that is 52% Measured + Indicated. (See Resource categories below.)
2. The cut-off grade. Always disclosed beneath the table. A 0.5 g/t cut-off produces dramatically more tonnes than a 1.0 g/t cut-off. Check that the cut-off used is realistic for the proposed mining method (open-pit cut-offs are lower than underground).
3. The effective date. The resource is a snapshot. If the report is two years old and there has been infill drilling since, the actual resource may have grown or shrunk meaningfully.

Item 15 — Mineral Reserve Estimate

Reserves only exist if the project has progressed to a PFS or DFS. If you are reading a resource-stage or PEA report, this section will say "not applicable" — that is normal. If reserves are present, they represent the portion of the Indicated + Measured Resource that an economic study has shown can be profitably mined. Reserves are categorised as Probable (derived from Indicated) or Proven (derived from Measured).

The ratio of Reserves to Resources is informative. A high conversion ratio (say, 80%+) suggests a robust deposit. A low ratio means a meaningful portion of the resource was deemed uneconomic even at the report's assumed metal prices.

Item 16 — Mining Methods

The mining method drives both capital and operating cost. The four things to extract:

• Open-pit vs underground. Open-pit is generally cheaper per tonne, but requires shallower mineralization and tolerates lower grades. Underground costs 2–4x more per tonne and demands higher grade to be economic.
• Strip ratio (open-pit only). The number of tonnes of waste rock that must be moved to access one tonne of ore. Strip ratios over 5:1 start to hurt economics; over 10:1 is a red flag unless grades are exceptional.
• Mining rate. Tonnes per day or tonnes per year. Bigger is more capital but more output.
• Mine life. How many years of mining at the planned rate. Short mine lives (under 7 years) often produce weak economics regardless of grade.

Item 22 — Economic Analysis

This is where the QP translates everything into dollars. The headline numbers are:

• NPV (Net Present Value, usually NPV_5%): the present value of projected free cash flows, discounted at 5%. A positive NPV means the project is theoretically profitable at the assumed metal price; a NPV many multiples of the company's market cap is what makes a deposit interesting.
• IRR (Internal Rate of Return): the discount rate at which NPV = 0. Gold projects generally need an IRR above 20% pre-tax to attract financing.
• Payback period: years until cumulative cash flow turns positive after start of production. Sub-4 years is strong.
• AISC (All-In Sustaining Cost): the total cost per ounce produced including sustaining capital. AISC well under the current gold price gives margin for downturns. AISC near or above current price means a marginal project.
• Initial CAPEX: the upfront capital required to build the mine. For a junior miner with $30M market cap, a $400M CAPEX project will require massive dilution or a take-out by a larger company.

Item 25 — Interpretation and Conclusions

This is the QP's honest assessment. In good reports it is where weaknesses are flagged — geological uncertainties, metallurgical risks, infrastructure gaps, permitting hurdles. In weak reports it is a bland summary that adds nothing. The quality of Item 25 is a tell about the quality of the entire report.

Resource categories: Inferred, Indicated, Measured

The three categories represent increasing confidence based on drill-hole density. NI 43-101 (and the CIM Definition Standards it adopts) defines them as follows.

Three things investors routinely get wrong about these categories:

1. Inferred is not "almost Indicated." The drill-spacing gap between the two is large. Industry studies of conversion rates show that a meaningful fraction of Inferred ounces never convert even after years of infill drilling — sometimes 30% or more is reclassified downward or removed entirely.
2. Inferred + Indicated + Measured does NOT mean "total resource." Inferred is always reported separately. The proper "global resource" figure is the sum, but headline numbers should always be split out. Press releases that bury the Inferred portion into a single big number are doing marketing, not disclosure.
3. Resources are not Reserves. This is the single most common misunderstanding in junior mining. A resource is a geological estimate of how much metal is in the ground. A reserve is the portion of the resource that an economic study has shown can be profitably mined. Many resource-stage juniors have impressive resource numbers and zero reserves. The conversion from one to the other is where projects go to die.

For a deeper-dive on the three categories — typical drill spacings, conversion failure rates, why PEAs can use Inferred but PFS/DFS cannot, and how to read a category-mixed resource table — see our companion piece: Inferred vs Indicated vs Measured Resources →

For the definitions of these and other terms in isolation, see our Mining Glossary — particularly the entries for Indicated Resource, Inferred Resource, and Mineral Reserve.

Reserves vs Resources — the distinction that matters

If you take one thing away from this guide, take this: a Resource is geology; a Reserve is economics.

A resource estimate says: based on our drilling, we believe X million tonnes of rock at Y grade exists in this location. That is a geological claim. It says nothing about whether the metal can be extracted at a profit. A reserve estimate says: based on our economic study, X million tonnes of rock at Y grade can be profitably mined and processed at our assumed metal prices and cost base. That is an engineering and financial claim.

The conversion is constrained by NI 43-101 in two directions. You can only convert Indicated Resources to Probable Reserves, and Measured Resources to Proven Reserves — Inferred Resources cannot be converted at all. And you can only declare reserves after a PFS or DFS economic study has been completed. PEAs do not produce reserves.

Practical implication: if a junior miner has only a resource estimate and no reserves, the company is fundamentally still betting that the deposit can be economically mined. The geological case is being made; the economic case is not yet proven. That is normal for the stage — most TSXV exploration companies operate this way for years — but it should change how you think about valuation.

PEA vs PFS vs DFS — the economic study hierarchy

NI 43-101 defines three levels of economic study. Each is more rigorous, more expensive, and more bankable than the one before.

The implication for valuation: a junior with a PEA is several years and tens of millions of dollars away from being financeable. A junior with a DFS is one step from construction. The market prices these stages very differently, and rightly so.

One specific NI 43-101 quirk worth knowing: PEAs are allowed to include Inferred Resources, but only with a clear disclaimer that "there is no certainty that the preliminary economic assessment will be realised." If you see that exact disclaimer language quoted in marketing materials, that is the law forcing the company to remind you that the economic case rests partly on geology that has not yet been proven out.

The Qualified Person — who they are and why it matters

A Qualified Person (QP) under NI 43-101 must be:

• An engineer or geoscientist with at least 5 years of relevant experience in the type of project being reported on.
• A member in good standing of a recognised professional association: PEng or PGeo in Canada, AusIMM in Australia, SME in the US, GSL in the UK, and a list of others.
• Identified by name in the report, with their certifications, affiliations, and a signed Certificate of Qualified Person.

The QP signs the report and assumes personal professional liability for it. A QP found to have signed materially false technical work can lose their license — career-ending. That is what gives the NI 43-101 standard its teeth.

Independent vs internal QPs

NI 43-101 distinguishes between independent QPs (not employees of, or in a financial relationship with, the issuer) and internal QPs. Some report types — notably PEAs, PFS, and DFS on material properties — must use independent QPs. Many resource updates can use internal QPs. All else equal, independent QPs are a stronger signal of credibility because their professional reputation is not tied to the company.

Check the names. A QP with 30 years of experience at a major consultancy (SRK, AMC, RPA-Tetra Tech, Mining Plus, Wood, Knight Piésold) signing a report carries weight. A rarely-published name signing a contentious PEA at an unknown consultancy is worth a closer look.

10 red flags that signal a weak report

None of these is necessarily disqualifying on its own. Two or three together usually are.

Worked example: translating a real resource table

Here is the kind of resource table you will see in a real report, followed by a translation into what it actually tells you.

Translation, line by line:

• Total resource is 75% Inferred by ounces. (315,000 / (100,500 + 315,000) = 76%). This is an early-stage deposit. The economic case rests on confirming the Inferred portion with infill drilling.
• Grade is modest. Sub-1 g/t gold is on the low end for underground mining and middle-of-pack for open-pit. AuEq of 1.4 g/t Indicated is workable for open-pit if strip ratio is reasonable.
• AuEq calculation reveals an embedded assumption. The gold-equivalent figure uses $2,200/oz Au and $27/oz Ag. If those prices fall, the AuEq figure falls — and the effective cut-off rises, which can shrink the resource. Note that the cut-off (0.40 g/t AuEq) is applied AFTER the conversion, so prices flow through the entire estimate.
• Silver is a non-trivial contributor. The AuEq is roughly 50% higher than the Au grade alone, meaning silver adds about half the headline grade. If you assumed this was a pure gold deposit, you would be over-pricing it.
• Recovery assumptions need backing. 92% Au recovery is achievable for free-milling gold but optimistic for refractory ores. Check Item 13 for the metallurgical test work.

None of this means the project is bad. It means the headline resource number conceals five embedded assumptions, any one of which can move the economics meaningfully. This is what "reading" a resource table actually looks like.

Common mistakes retail investors make

• Treating the press release as the report. Press releases are written by IR teams to drive a stock reaction. The report is written by the QP to satisfy the regulator. Always go to the source.
• Comparing global resources across deposits. "5 million ounces vs 3 million ounces" means nothing without category mix, grade, mining method, and jurisdiction. A 3 Moz deposit at 5 g/t in Canada is worth more than a 5 Moz deposit at 0.6 g/t in a high-risk jurisdiction.
• Confusing PEA economics with bankable economics. PEAs are scoping studies with ±30% accuracy and can use Inferred Resources. The headline NPV of a PEA is an indication, not a forecast. Discount it accordingly.
• Ignoring effective dates. A two-year-old resource estimate may bear little resemblance to current geology after subsequent drilling. Check what has been published since.
• Assuming reserve = profit. Even Proven + Probable Reserves can become uneconomic if metal prices fall or costs rise. Reserves are a function of price assumptions; they shrink and grow with the market.

Tools to speed this up

Reading an NI 43-101 from scratch takes 20–30 minutes once you know what you are looking for. We built tools to make the process faster:

Where to find raw reports: SEDAR+ is the Canadian filing system; every NI 43-101 must be filed there. Most companies also link reports from their IR pages.

Frequently Asked Questions

Related guides

• The Complete Guide to Junior Gold Mining Companies →
• Critical Minerals Investment Guide →
• Mining Glossary — 60 essential terms →