Estimation of Ore Reserves

The tonnage of ore reserves is estimated from maps and sections that show the limits of ore and the average grade of the workings that have been sampled. (The methods of averaging a series of samples are described in Chapter 2.)

Cut-off Grade and Ore Limits. In order to outline the ore, one must draw a dividing line between ore and waste. Just where to draw this line can be one of the most difficult problems in ore estimation. In the first place, it demands a correct decision as to the cut-of grade, i.e., lowest grade that will meet costs, yet the over-all cost as shown on the books is not necessarily the proper one to use for this purpose. Let us say that the expense of production consists partly of fixed expense amounting to $1500 a day in overhead, maintenance, etc., regardless of the tonnage mined, and partly of variable expense amounting to $3.50 for each ton mined. Clearly the addition of any marginal ore which yields better than $3.50 will add to the profits so long as the fixed expense remains unaffected. However, there is rarely 9a any justification for deliberately diluting good ore with waste or for the not uncommon practice of keeping a high-grade stope in reserve to use as a "sweetener." If the distribution of the ore is such that all the high-grade ore can be mined out first and at once, the present value is decidedly higher than if a steady average grade is maintained by mining high- and low-grade ore together.10 To say this, however, is not to commend the practice known as "picking the eyes (or eye-teeth) out of the mine." If the rich spots can be mined selectively only at a relatively high cost per ton, and if their removal increases the subsequent cost of mining the remaining low-grade ore, the selective procedure is poor economy in the long run.

Furthermore, the cost varies with the rate of production. There are properties in which only a modest tonnage of ore would be calculable if the cut-off were placed at 5% copper, but five times as much ore could be estimated if the cut-off were at 3% and a huge reserve could be shown with the cut-off at 1%. So, in these cases, what is ore and what is not depends on the cost, but the cost, in turn depends on the scale of production; the scale of production depends on the amount of ore, and the amount of ore depends on the cost. The only way out of the circle is to calculate the reserves using alternative cut-off grades and to prepare a corresponding series of calculations of present value.

Establishing the ore limit is simple if the vein has well-defined walls and the oreshoots have abrupt boundaries. But in many mines the values decline gradually or irregularly from the vein into the walls on both sides or from the oreshoot into barren vein-matter at the ends, top, or bottom. If so, it is not always correct to draw the dividing line at the last assay which shows minable grade. Swanson has shown from a consideration of frequencies that a block of low-grade but minable ore is likely to contain a large, and sometimes predominating, proportion of individual assays which are below the grade-limit. A series of sam¬ples, all of them within a minable shoot, may start (at the limit of the shoot) with a high value but it is more likely to start with a low one. Therefore, to draw the limit closely around all the high samples would give a tonnage that is too low and an average that is too high. If the limits of ore are recognizable from geological observation, this may show where to place the dividing line. Otherwise the proportion of low-grade assays within the body must serve as a guide.

When the ore-outline is based partly or wholly on the results of diamond drilling, it must be drawn with due regard to the structure. If a series of holes all indicate ore at the same stratigraphic horizon, it is reasonable to assume that the ore forms a continuous layer (A, Figure 145). The same is true if the intersections line up well, especially if the line is parallel to vein-walls or banding visible in the core. But if the ore is in different stratigraphic horizons in different holes (C), and particularly if it is missing in one or more holes, the conclusion is that it occurs in disconnected lenses. Similarly it is dangerous to correlate intersections which do not lie on a straight line or regular curve (D).