Mineral Resource Classi ‘Spotted Dog’! ation — It’s Time to Shoot the P R Stephenson’, A Allman”, D P Carville’, P T Stoker’, P Mokos®, J Tyrrell® and T Burrows’ ABSTRACT Cusifeton of sine escree exe sone ofthe mes pont responibliies of the Compatat Penon. In recent seu, casihcaion css have tows driven more bythe detailed hock by block ates bene by the now widely pied gcsatsial stinaon meds and [es by a general geolgial overview. This is screnigly eesuing io ‘spe do op ia which locks of nerd Resources or clas ter separate Hacks of Mesured sade Iniated Resour, ot {dividual dil holes are sound by seal of Measured a dete Rescue Hooke Not only ae sich ouput potetally misleading, since ‘they ignore fundamentals sch a etait of poly and maeaation bethee dl ols aad the gece ate of rescue esimstin, ey fc ao catse ssn oben for engineers undetaking eine desis Su imaing ee eves parcel) for undepvound mines ‘Coeptet Pesos fo ei estes st ep in ind the pepe of thar work, aid should we ther expeence anf Jadgemeat Io eid ce ‘uch out speed dog lait, poiding ares comoenue ‘ith he eel of seloical and resource estimation conlisoce. Fe tha pir awe wesere Competent Pesons must understand the resource Staton ‘and clasiicaion proces and suk! queston saree ‘Susifieatns tt ae not coon with the Teel of pelo and ‘esc sian codes INTRODUCTION AMC Consultants Py Lud (AMC) has become increasingly oncemed in recent years with mineral esource classification practices that Tack both common sense geologically and cause Significant difculies during mine design and conversion to ore reserves, particulary” for underground mines. This paper hts been prepared by a group of AMC geologists and mining engineers and itis hoped thatthe issues highlighted and real amples provided will encourage a more senible approach t0 ‘source classification and make life easier forall concerned. MINERAL RESOURCE CLASSIFICATION — ‘A GEOLOGICAL PERSPECTIVE Introduction. ‘The Auswalasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code’) allows 1. Principal Geologist, AMC Consutants Py Lad, Level 19, 114 Willa Stet, Melbourne Vie 3000 2 Senioe Mining Enpiner. AMC Constants hy Lu, Level 8, 138, Wek Tenace Beene Qld 408, 3. Principal Geologist, AMC Constants Pry Lid 9 Havelock St, 4. Pincipal Goolgis, AMC Comsutints Py Lid, Level 8135 Wek Terace Besbane Qld 400, 5. Principal Mining Engager, AMC Consans Pry Lu, Level 19, 114 Willan Stet, Melbourne ic 3000 6. ‘Senior Resource Geologist, AMC Consultants Pry Lid, 9 Havelock Sst, Wet Pen WA cS, 17. Snios Resource Geologist, AMC Constants Pry Lu, 114 Willy Stes Melbourne Vi 300 ih intmatens Ming Geotgy Conterence for classification of mineral resource estimates into Infere, Indicated and Measured Resource categories basen increasing seological confidence in the estimate (JORC, 2008). The JORC Code is deliberately not prescrip as to how that confidence is ‘stermined and relies on the experience. and competence. of Competent Persons to judge, firstly (if necessary, in conjunction with others) that part of a resource estimate for which there are Feasonable prospects for eventual economic extraction and, secondly, the level of confidence that can be attributed to the estimate. In underaking these functions its very important that seologisis appreciate why they are required to classify the finer resource estimates andthe use to which their work wil be put Just as importantly ore reserve Competent Persoas must take the time to understand the resource estimation and slassifiction process, and 10 communicate to geologists their feeds in terms of output On a related topic, it is still (unfortunately) reasonably common practice for geologists rather than mining engineers to ‘ign off as Competent Persons om ore reserve estimates. Tis fs fn historical basis, as resourceeserve estimation was often seen asa single integrated process and the responsibility of geologists. However, the conversion from mineral resources to ofe reserves involves mainly mining-related decisions; in fact, its often the ‘output from the preparation of a mine pln. It should only be lunderiaken by those with the requited qualifications "and fxperience, particularly given the serious responsibilities attached 10 acting. as Competent Persons (see for example, Philips, 2000). The authors encourage geologists to. think carefully before they sign off as Competent Persons for ore reserve estimates and encourage mining engineers to accept responsibilty as Competent Persons for these estimates. Methods of mineral resource classification “Most resource estimation software packages produce values that can be used to indicate the reliably ofthe grade estimated into individual model ells, Sch values include: (the numberof data points used to estimate grade the numberof drill holes use to source daa for estimation; the estimation pas that succesfull informed the cel the kriging variance of the estimate; the slope of regression of the “tue™ block grade on the ‘estimated’ block grade (Vann, Jackson and Bestoli, 2003) and © the relative distance from a data point based on the range of a variogram, The values can change with different variogram parameters and other estimation inputs such as the search ellipse radi and orientation, the maximum or minimum number of data points for successful estimation, the degree of geological (or domain) Control on the estimate and the expansion tatio of consecutive estimation passes, These values are useful as an indication of the confidence in the grade estimate, but they are not an absolute measure of small-scale (block) reliability, and should not be teated as such 23 August 2008 1TEPHENSON ol “There are no absolute values tht are correct, andthe subvision ‘of the deposit into Blocks is only done as 4 gecmettic aid to resource estimation, not because th blocks themselves represent diserete geological units with separate, clearly distinguishable rade and reliability characteristics. The ataction of using such estimation values is that they are repeatable and the same entena can be applied 10 diferent estimates. However, while this i a legitimate use for such dat, i iS'only part of the story. I is very important that resource classification also takes into account broader aspects such as Confidence in the geological imerpretation and in the amount, “stibation and quality of data. Not fo dos fs an abrogation oF fone of the geologists’ key responsibilities and can lead to the fenratic “spotted dog” (aso sometimes refered 10 38 ‘striped Zebra classifications that are increasingly prevalent these ds. Use of certain cell attributes as a guide to resource classification should be seen only a5 @ step on the Way to Producing « more smoothed elasification that properly reflects the broader geological and data-related aspects. Examples of ‘spotted dog’ classifications ‘The following illustrations are based on real life examples, ‘modified wo prevent identification, while maintaining the essence ofthe issue In Figure 1, cach drill hole is surrounded by annul of Measured and indicated Resources, and for more distal hoes, Inferred Resources. In Figure 2, corridors of low kriging variance following ‘otherwise isolated drill holes. Kriging variance is one of the Fis 2 - Cross-section showing vatiations in kriging variance. Darwin, NT, 21-28 August 208 Gm ematona ring Gesigy ConerenceMINERAL RESOURCE CLASSIFICATION — IT'S TIME'TO SHOOT THE SPOTTED DOG’! Fig 3 - Cross-section showing lasication folowing él ho block parameters that are sometimes translated directly into resoure elssficatons Figure 3 is a pasticulanly interesting example of resource classification. In this case zones of Measured and Indicated Resourses surround and follow individual drill holes and tend almost a right angles tothe mineralisation-coneolling lithology. In addition much of the Measured Resources eur between the

{Ascend 17 July 206) Ptps, 2000. The ably of company dirs nd competent pesos for stcrceenevedaclone, a Proceedings The Codes Form 2 ‘OTIS (Mineral Indus Constants Associaton: Sydney) ih intmatens Ming Geotgy Conterence amin NT, 21 South Alcan Minul Resource Commitee (SAMREC), under the ‘Auipices of the Soulh Aca Intute of Mining and Metals, Match 2000. Sous Afsan Cae for Reporting of Mineral Resources ‘in Mine Resse Tie SAMREC Cote) [onlin], Ava toms ‘diipdfwusinn.cazafondessaneeeang> [Accesed: 17 aly aie United Stats Secures and Exchange Commission, undated: Desrsion ‘of propel by ster engaged orto be ensize in spicata poration, Indusy Gane 7 Vana, J Jackam, Sand Betok, 0, 2003. Quintiative eging ‘iphourboodsalysis forthe mining geologist A description of the mtd with worked case ctamples ia’ Proceedings Fk Inernational Mining Geolony Conference, pp 218-288. (The ‘Nitsa astute of Mining and Met: Melbourn) 23 August 2008 6