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A drilling assay shows what a sample contained; it does not prove that a deposit can be mined profitably. To judge a mining company’s announcement, first identify the reporting rules, then check where and how the samples were collected, how the reported intervals fit the geology, and what confidence category and assumptions support any resource estimate.
First identify the reporting framework
Disclosure rules vary by jurisdiction, so start by checking where the issuer is listed and which code or regulation governs the announcement. Similar terminology does not make the rules interchangeable.
- Australasia: JORC applies in its Australasian context and is incorporated into Australian and New Zealand exchange listing rules. The JORC publisher identifies the 2012 edition as the current edition and advises reporters to consider other jurisdictions’ rules where relevant.
- United States: U.S. registrants report under SEC Regulation S-K Subpart 1300. The SEC’s small-entity compliance guide describes requirements including a dated, signed technical report summary by qualified persons for material mineral resource or reserve disclosures.
- Canada: National Instrument 43-101 governs scientific and technical disclosure on material mineral projects. The British Columbia text of NI 43-101 requires disclosure to be prepared by or under the supervision of a qualified person and specifies Form 43-101F1 for technical reports required under the instrument.
Read the announcement alongside its technical report, note the report’s effective date, and check whether newer information has been filed. Requirements differ by regime, so do not assume a JORC report, Canadian technical report, and SEC filing use identical definitions or disclosure rules.
How to assess a drilling announcement
Begin with the evidence and its geological context, not the largest grade printed in a headline. A drill result is an exploration result: it records what particular samples returned, not the size or economic value of a mineable deposit.
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Place each reported interval on the map and section
Look for drill-hole collar locations, hole paths, geological sections, and the interpreted shape of the mineralized zone. Ask whether the result is a single isolated hit or part of a pattern supported by nearby holes. Check the interval’s orientation against the deposit: a length measured down a drill hole may not represent the true width of the mineralized zone. If true width is not stated, JORC calls for an appropriate qualification.
Be wary of selected highlights without the wider context. The JORC Code, 2012 Edition, states: “Reporting of selected information such as isolated assays, isolated drill holes, assays of panned concentrates or supergene enriched soils or surface samples, without placing them in perspective is unacceptable.” A high-grade interval is more informative when readers can see how it relates to all relevant drilling and the company’s geological interpretation.
Check sampling, assays, and interval calculations
Examine the technical details behind the number: sample type, collection and recovery, sample interval lengths, laboratory and analytical methods, and quality-control procedures. Find out how the company combined samples into reported intervals and whether grades are weighted averages. JORC requires results to show grades with sample intervals or explain weighted-average grades and how they were calculated.
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Recovery and repeatability matter because poor or uncertain recovery can affect how representative a sample is. Check for material limitations, such as uncertain recovery or unresolved data issues, rather than assuming a precise-looking assay removes uncertainty.
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Look for omitted results and explainable gaps
A company need not publish every assay, but JORC requires enough information about omissions to support a balanced judgement, including an explanation where relevant holes or intersections have been left out. Ask whether missing data could change the interpretation—for example, whether unreported holes lie between the highlighted intervals or test the edges of a zone.
Distinguish an exploration result from a resource
Do not treat exploration results as if they were a resource with a defined tonnage and average grade. An exploration target is also conceptual, not a resource estimate. Under JORC, it must be clearly described as uncertain, with the basis for the target, exploration completed, and proposed work explained.
What a Mineral Resource estimate means
Under the JORC Code, a Mineral Resource is a concentration or occurrence of material of economic interest whose location, quantity, grade, continuity, and other geological characteristics have been estimated from geological evidence and sampling. It must have reasonable prospects for eventual economic extraction. It is therefore not simply the sum of every mineralized interval drilled: the estimate needs geological support and an extraction context.
The JORC Code states: “A Mineral Resource cannot be estimated in the absence of sampling information.” When reviewing an estimate, look for the technical report’s account of the evidence behind it, including drill spacing, geological and grade continuity, density data, estimation methods, and cut-off assumptions. JORC calls for disclosure of uncertainties that may cause an estimate to be overstated or understated.
Inferred, Indicated, and Measured describe confidence
JORC divides Mineral Resources into three categories, in increasing order of geological confidence:
- Inferred: the lowest of the three confidence categories.
- Indicated: greater geological confidence than Inferred.
- Measured: the highest geological confidence of the three.
These labels describe confidence in geological knowledge and estimation; they are not grades for project quality, likelihood-of-success scores, or probabilities of profit. A large total dominated by Inferred material is not directly comparable to the same total supported by a greater share of higher-confidence categories.
Read the assumptions behind the estimate
A resource estimate depends on choices and assumptions, not just drill results. Examine the cut-off grade and the technical and economic support for it, along with any disclosed assumptions about prices, costs, recovery, or mining constraints. A cut-off determines what material is included in an estimate, so totals made using different cut-offs may not be comparable at face value.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How a Mineral Reserve differs
A Mineral Reserve is the economically mineable part of an appropriate Mineral Resource after applying modifying factors and completing the required level of study. Conversion can be affected by mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, and other factors. A resource is not automatically a reserve.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesIf a company reports both resources and reserves, check whether the resource total includes the reserve or is additional to it. JORC prohibits adding the two together into one combined figure; they are different statements about the project.
Compare projects on comparable evidence
Headline tonnes, ounces, or grades are not enough for a useful comparison. Check whether the figures are measured on a similar basis and assess the supporting evidence and assumptions:
- Framework and date: Identify the reporting regime, estimate’s effective date, and whether the issuer has since reported new information.
- Confidence mix: Compare quantities in each resource category instead of treating total ounces or tonnes as equivalent.
- Geological support: Review drill spacing, continuity, sampling and assay quality, and unresolved data issues.
- Estimate assumptions: Compare cut-off grades and disclosed price, cost, recovery, and mining assumptions where available.
- Study status: Keep exploration results, resource estimates, and reserves supported by the required technical and economic studies distinct.
- Resource and reserve relationship: Establish whether reported resource figures include reserves or are additional to them.
The Canadian Securities Administrators reported reviewing 86 technical reports in a review of mineral resource estimate disclosures. That figure describes the CSA’s review sample, not an error rate across mining reports or the industry as a whole. The CSA’s notice is available at its mineral resource estimate disclosure page; the page does not state the review year.
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