While a resource estimate gives some idea of the amount of mineralized material in the ground, it does not imply anything specific about the practical question of mining the deposit. A reserve estimate, on the other hand, refines the resource estimate by placing economic constraints on the size and grade of the material that is brought into the calculation.
The cutoff grade is the grade below which the rock is assumed to be uneconomic to mine. This grade will vary according to such factors as mining costs, metallurgical recoveries, and possible credits from associated minerals that can be recovered as byproducts. In a reserve calculation, any parts of the mineralized zone that have grades lower than the cutoff are not counted into the estimate.
If a mining professional is calculating a reserve estimate for a possible under ground mine, it will be essential to include only the mineralized zones that are wide enough to mine. Small zones of waste between and along the sides of mineralized zones will be included in the estimate as dilutive material.
If the estimate is being made for an open-pit mine, a pit must be designed to show the limits of the mineralization, plus the waste rock that must be removed. The stripping ratio is the mass of waste rock that must be removed to mine a unit mass of ore — for example, if a 20 orebody is mined from a pit with a total of 80 million tonnes of rock, the 60 million tonnes of waste give the pit a stripping ratio of 3 to 1.
It is now common to make several reserve calculations, each one based on a different cutoff grade and showing different mine or pit designs. The company can then choose from a number of different possibilities when it develops a final feasibility study on the project.
Like resource estimates, reserve estimates are labeled to show how reliable they are — proven, probable and possible. Only proven and probable reserves are considered in a feasibility study.