Introduction to

Estimation and Reporting of

Ore Reserves

Adi Maryono References and sources:

VP exploration J Resources, Pat Stephenson AMC Consultant
GFC IAGI, CPI MGEI, M-AusIMM, M-AIG, F-SEG Wawan Riswanto J Resources
Geology UGM, Jogjakarta, 18 May 2018 Bosta Pratama Cube Consulting
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 Resources
Inferred Resources

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 Resources
Indicated Resources

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 Resources
Measured Resources

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 Reserves

• You’ve caught your fish

• But can you eat it?

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 Outline of Presentation

 What is a Ore Reserve?

 Procedure and Parameters of Reserve Estimation

 An Example of Reserve Estimation

 Pit Design and Mine Planning

 Economic evaluations
 Reporting systems (the KCMI and JORC Codes)

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 Project pipeline
Exploration Feasibility Study Construction Operations
 Mine
Regional Exploration Detailed Exploration
 Mine construction operations
 Reserves delineated
 Resource
 Feasibility studies and
 Discovery of the delineated Amdal
 Identification of deposits  Scoping study
targets/anomalies  Pre-FS

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 Human being need

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 Definition of Resources
Resources
Mineral Resource is a concentration or occurrence of solid material of economic
interest in or on the Earth’s crust in such form, grade or quality and quantity that
there are reasonable prospects for eventual economic extraction. The
location, quantity, grade or quality, continuity and other geological characteristics
of a Mineral Resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling.

Resource Ore Model:

• Quantity
• Au grade
• Au Recovery
• Ag grade • Metallurgical
• Ag Recovery Information • Cutoff Grade
• Density • Mining method • Cost Model
• Ore Type (Ox, Tr, DT) • Equipment Option
• Ore Classification
(MII)
• Model dimension
• MII Distribution
• Topography

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 Definition of Reserves
Reserves & Resources 
Reserves
Definitions

A Mineral Reserve is the economically mineable part of a Measured

and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or
extracted and is defined by appropriate level of study at Pre-Feasibility,
Feasibility, or equivalent, that includes the application of Modifying
Factors. Such studies demonstrate that, at the time of reporting, extraction
could reasonably be justified.

The simplest definition of an Ore Reserve is the tonnes and grade that are
expected to be delivered to the mill or treatment plant.

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 Definition of Reserves
Reserves
• Reserves are categorized as either Proven or Probable based on the
geological confidence and the Modifying Factors (costs, recovery,
S&ER, etc.)

• Measured Resources can become either Proven or Probable Reserves

• For example, Newmont do not declare Proven Reserves at
greenfields sites until after 1 year of production history. So even
though the Geological Confidence may be at Measured, we classify
the Reserves as Probable.
• We could also choose to move Measured Resources into the
Probable category because of uncertainty around mining costs,
process recoveries, permitting or other Modifying Factors

• Indicated Resources can only become Probable Reserves, unless

downgraded by one or more Modifying Factors

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 Definition of Reserves
Cadangan (Reserve)
Material terukur (measured) dan terkira (indicated) di atas COG ekonomis yang berada di
dalam Pit Cadangan (Reserve Pit)

Sumberdaya (Resource)
Kosentrasi atau keterdapatan material padat yang mempunyai nilai ekonomis pada atau di
dalam kerak bumi dimana kadar dan kuantitas mempunyai prospek yang reasonable untuk
ditambang kedepannya.
Material terukur, terkira, dan terduga (inferred) di atas COG ekonomis yang berada di dalam
kerucut Sumberdaya (Resource Cone).
Non Reserve Mineralization (NRM)
NRM = Sumberdaya - Cadangan

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 Definition of Reserves

Resources to Reserves

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 Reserve flowchart
Reserve (step to state Reserve)
Reserve Estimate (Tonnes, grade, contained by pit by ore class by ore type at define cog)

Reserve Mine Plan (Mine Scheduling, LOM Plan)

Reserve Economic (Prices, Opex, Capex, Financial component, IRR, NPV)

Reserve Sensitivity (Prices, Mining Cost, Process Cost, Recovery, etc)

Competent Person (Competent Person based on regulation, Statement of Competent Person)

Reserve Report/Document (Report/Document, including detail reserve estimating, reserve risk

assessment, table 1, etc)

Reserve Review (Internal and or External as required)

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 Key aspects
Cut-off Grade

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 Reserve parameters and flowchart
Resource Ore Model:
• Au grade
• Au Recovery
• Ag grade
Economic Parameters:
• Ag Recovery
• Au/Ag Prices
• Density
• Royalty
• Ore Type (Ox, Tr, DT)
• Refining and
• Ore Classification
Shipping
(MII)
• Discount Rate
• Model dimension
• Production Rate

Operating Costs:
• Mining
• Processing
• G&A
• Incremental Haulage

Capital Expense:
• Equipment
• Facilities-
Infrastructure
• Closure Geotechnical
Parameters:
• Bench Face Angel
Mining Operation: • IRA
• Mining Recovery • Bench height
• Mining Dilution • Berm width
• Topography • Ramp width
• Ramp gradient

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 Reserve parameters

Item 2007

Cu $/lb 1.75 / 2.00

Metal Prices 575 / 625
Au $/oz
(Reserve / Resource)
Ag $/oz 11.00 / 13.00

Cu 96.5%

Smelting Recoveries Au 97.0%

Ag 90.0%

TC/RC $0.2878/lb /
Cu
(Reserve/Resources) $0.3187/lb
Freight $ dmt $22

Au $6.00 /oz
Refining
Ag $0.30 /oz

Model Indeks Dollar dan Harga Logam

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 Reserve parameters

Biaya
Item 2007($/dmt)
Base Mining 1.34

G&A + MEWS 0.18

Mining Cost CAPEX 0.15

Reclamation /
0.03
Closure
Total 1.69
Incremental Bench Truck Haulage 0.0216
Process 2.64

ROM to Process G&A + MEWS 0.56

Cost CAPEX 0.15
Total 3.35

Stockpile to Process Stockpile Reclaim 5.32

Cost Total 5.32

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 Reserve parameters and flowchart

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 Reserve/pit optimization

Economic Value per Block 2

0 0 0 0 0 0 0 0
0 -10 0 0 8 -10 0 -10
0 -10 0 0 31 34 49 39
4
-10 -10 8 23 0 15 0 -10 -10 -20 -2 23 44 49 49 29
-10 -10 0 15 0 -10 -10 -10 -20 -40 -12 36 44 39 39 19
-10 -10 23 0 0 0 -10 -10 -30 -60 -9 29 44 39 19 -1

1 3
0 0 0 0 0 0 0 0
0 -10 0 0 8 -10 0 -10
-10 -20 8 23 8 5 0 -20
-20 -30 8 38 8 -5 -10 -30
-30 -40 31 38 8 -5 -20 -40

0 -10 0 0 8 -10 0 -10

Untuk yg ada angka 1,2,3,4 itu step‐step 
-10
-10
-10
-10
8
0
23
15
0
0
15 0 -10
-10 -10 -10
Value = $ 34 000 saja dengan simulasi pergerakan
-10 -10 23 0 0 0 -10 -10 mengikuti panah. Yang ada angka 1 itu
kumulative secara vertical value dari blok, 
0 -10 0 0 8 -10 0 -10 kemudian yang nomor 2‐3 itu mengikuti
-10
-10
-10
-10
8
0
23
15
0
0
15 0 -10
-10 -10 -10
Value = $ 39 000 panah‐panahnya, jadi valuenya kombinasi
-10 -10 23 0 0 0 -10 -10
vertical dan slopenya. Yang nomor 4 itu
lebih simple dari value original blok saja.
0 -10 0 0 8 -10 0 -10
-10 -10 8 23 0 15 0 -10 Value = $ 49 000 Cone
-10 -10 0 15 0 -10 -10 -10
-10 -10 23 0 0 0 -10 -10 optimization
Lerchs Grossmann (LG) cone for reserve optimization
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 An Example of Reserve Estimation

Resources Block Model with Original Surface

Grade Au

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 An Example of Reserve Estimation

Grade Au

Pit-shell from Pit Optimization

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 An Example of Reserve Estimation

Pit-shell Selection

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 An Example of Reserve Estimation

A’

A
Grade Au

Pit Design Generation

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 An Example of Reserve Estimation

LONG SECTION A – A’
A’

A
Grade Au

Pit Design Generation

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Sumberdaya & Cadangan
Reserve cone Reserve (pit) Resource
Cu (US$/lb) 1.75 1.75 2.00
Au (US$/oz) 575 575 625
Ag (US$/oz) 11.00 11.00 13.00
Calculation :
Measured (Proven) 〇 〇 〇
Indicated (Probable) 〇 〇 〇
Inferred × × 〇
Cone MII MII MII
Ramp × 〇 × Reserve
Reserve Pit Cone

Paramaters
Process Cost 3.35 $/dmt milled

Mining Unit Cost 1.69 $/dmt mined

Bench Incremental Cost 0.0216 $/dmt mined

Stockpile Cutoff 5.32 $/dmt milled

Geology Model Nov-07

Doller Index Model DIM07

Topo Act1207
Resource
Resource Cone
Discount Method 7% pada 5 bpy
Cone

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 Mine Planning and Scheduling

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 Mine Planning and Scheduling

• Increase Mining Value

• Blending, Project Schedule, Optimum Plan
• Fleets allocation

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 Mine Planning and Scheduling

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 Economic Evaluation

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 Economic Evaluation

Cut Off Grade

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 Economic Evaluation
Evaluasi Cutoff
Cutoff = Biaya Stock. ROM Process + Tambahan Biaya Stock.
Recovery Adjustment

Cutoff = ( $3.36 + $1.16 ) / 84.93%

Cutoff = $5.32 per dmt

Dimana:
Recovery Adjustment = $DIM setelah oksidasi
$DIM sebelum oksidasi

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 Economic Evaluation
DIM Grade Grade Grade Grade Grade Grade
(US$/ton) Cu (%) CuR (%) Au (g/t) AuR (g/t) Ag (g/t) AgR (g/t)
rev=3.0 0.1181 0.088 0.0327 0.0222 0.2768 0.1639
rev=3.1 0.1222 0.0914 0.0328 0.0223 0.2855 0.1766
rev=3.2 0.1255 0.0943 0.0335 0.0228 0.2856 0.1768
rev=3.3 0.129 0.0971 0.0348 0.0229 0.2868 0.1786
rev=3.35 0.1291 0.0974 0.036 0.0247 0.2975 0.1827
rev=3.4 0.1322 0.0997 0.0361 0.0248 0.2977 0.1831
rev=3.5 0.1373 0.1033 0.0362 0.0251 0.2997 0.1863
rev=3.6 0.1417 0.1065 0.0363 0.0258 0.3003 0.1866
rev=3.7 0.1437 0.1087 0.0392 0.027 0.3069 0.1883
rev=3.8 0.1479 0.1119 0.0393 0.0272 0.3074 0.1899
rev=3.9 0.1503 0.1141 0.0417 0.0289 0.3201 0.1984
rev=4.0
rev=4.1
0.154
0.1568
0.1166
0.1188
0.0436
0.0437
0.0304
0.0305
0.3219
0.3278
0.2016
0.2103
Distribusi Kadar Batas
rev=4.2 0.1615 0.1229 0.0438 0.0309 0.3295 0.2106
rev=4.3 0.1658 0.1262 0.0442 0.031 0.3343 0.2109
rev=4.4 0.1684 0.1278 0.0445 0.0338 0.3436 0.2181
rev=4.5 0.1718 0.1309 0.0446 0.0344 0.3437 0.2211
rev=4.6 0.1766 0.135 0.0452 0.0345 0.3439 0.2212
rev=4.7 0.1817 0.1387 0.0465 0.0346 0.3452 0.2213
rev=4.8 0.1847 0.1408 0.0488 0.0347 0.3457 0.2223
rev=4.9 0.1887 0.1439 0.05 0.035 0.3536 0.2267
rev=5.0 0.192 0.1466 0.051 0.0362 0.3539 0.2289
rev=5.1 0.1964 0.1505 0.0512 0.0363 0.3558 0.2326
rev=5.2 0.1988 0.1517 0.0532 0.0375 0.3655 0.2327
rev=5.3 0.1999 0.152 0.0533 0.0376 0.366 0.2328
rev=5.32 0.2036 0.1561 0.0534 0.0377 0.3662 0.2369
rev=5.4 0.2084 0.1589 0.0535 0.038 0.3712 0.2433
rev=5.5 0.2096 0.1613 0.0536 0.0393 0.3756 0.249
rev=5.6 0.2116 0.1643 0.0537 0.0398 0.3908 0.2623
rev=5.7 0.2198 0.1688 0.0538 0.0401 0.3924 0.2632
rev=5.8 0.222 0.1695 0.0587 0.0424 0.3933 0.2665
rev=5.9 0.224 0.1725 0.0588 0.0428 0.3948 0.267
rev=6.0 0.2252 0.1755 0.0589 0.0429 0.3996 0.2709

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Insitu Reserve & Resource 2007 Reserve Pit (07v10) 2007 Resource Cone NRM Stockpile Reserve
Reserve figures
TOTAL RESERVES TOTAL RESOURCES
$575Au-$1.75Cu-$11.00Ag $625Au-$2.00Cu-$13.00Ag EOY2007

c/o 5.32 c/o 5.32 c/o 5.32

Proven / Measured
Ktonnes 267,496 273,377 5,882 267,496 273,377
Cu % 0.500 0.493 0.188 0.500 0.493
Au g/t 0.459 0.450 0.055 0.459 0.450
Ag g/t 1.339 1.317 0.335 1.339 1.317

Contained Cu, (Million pounds) 2,946 2,971 24 2,946 2,971

Contained Au, (K ounces) 3,947 3,957 10 3,947 3,957
Contained Ag, (K ounces) 11,515 11,578 63 11,515 11,578
Probable / Indicated
Ktonees 496,336 536,798 40,463 230,470 726,805 767,268
Cu % 0.400 0.384 0.189 0.358 0.387 0.376
Au g/t 0.286 0.268 0.050 0.123 0.234 0.225
Ag g/t 0.946 0.901 0.350 0.564 0.825 0.800

Contained Cu, (Million pounds) 4,376 4,544 169 1,818 6,194 6,363
Contained Au, (K ounces) 4,565 4,630 65 911 5,477 5,542
Contained Ag, (K ounces) 15,094 15,550 456 4,177 19,271 19,727
Proven & Probable / MI
Ktonnes 763,831 810,176 46,345 230,470 994,301 1,040,646
Cu % 0.435 0.421 0.190 0.358 0.417 0.407
Au g/t 0.347 0.330 0.049 0.123 0.295 0.284
Ag g/t 1.084 1.042 0.349 0.564 0.963 0.936

Contained Cu, (Million pounds) 7,322 7,515 193 1,818 9,140 9,333
Contained Au, (K ounces) 8,512 8,587 75 911 9,423 9,499
Contained Ag, (K ounces) 26,609 27,128 519 4,177 30,786 31,305
Inferred
Ktonnes 25,211 32,612 32,612 32,612
Cu % 0.260 0.244 0.244 0.244
Au g/t 0.069 0.063 0.063 0.063
Ag g/t 0.491 0.466 0.466 0.466

Contained Cu, (Million pounds) 145 175 175 175

Contained Au, (K ounces) 56 66 66 66
Contained Ag, (K ounces) 398 489 489 489
Total
Ktonnes 789,042 842,787 78,956 1,073,257
Cu % 0.429 0.414 0.212 0.402
Au g/t 0.338 0.319 0.055 0.277
Ag g/t 1.065 1.019 0.398 0.921

Contained Cu, (Million pounds) 7,467 7,690 368 9,509

Contained Au, (K ounces) 8,568 8,653 141 9,564
Contained Ag, (K ounces) 27,007 27,617 1,008 31,794

Total (Including Waste)

Ktonnes 2,034,707 2,034,707 -

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Sumberdaya - Cadangan = NRM (Non Reserve Mineralization)
 Reserve figures

Sejarah Cadangan dan NRM

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 Geotech Roles

Domain Geotek
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 Geotech Roles

75 RL

Phase 4

Phase 5

Phase 6

-90 RL
Rancangan Phase – Lebar Phase
Shadow = 100 meter
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 Geotech Roles

North-South Section

Original Topography

Surface EOY 2007

Ultimate Pit

Penampang Pit : Topo Asli vs Aktual vs Ultimate Pit

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 Geotech Roles

North-South Section

Phase 4

Phase 5

Ultimate Pit

Penampang : Rancangan Phase

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 KCMI Code

 First released, 2011, revised 2017
 By Kombers (A joint Committee of IAGI, Perhapi and 
representatives from IDX, GoI, etc)
 Mandatory reporting standard for companies reporting 
to IDX.
 Mandatory reporting standard for members of IAGI and 
Perhapi.
 Highly influential in developing domestic reporting 
standards.

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 Reporting Code
• KCMI ‐ Indonesia
• JORC Code ‐ Australasia
• CIM ‐ Canada
• SAMREC – South Africa Transparency Materiality
Jelas dan Tidak ambigu Semua informasi yang
• SME Guidelines – USA relevan dicantumkan
KCMI
• Chilean and Peruvian Codes Code

 Transparency: clear and unambiguous 
presentation of information. Competent
 Materiality: all the information reasonably  Dikerjakan oleh orang
required and expected. yang kompeten
 Competence: public reports based on 
work undertaken by Competent Person.

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 Terima Kasih

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