Resource World Magazine

MIN I NG Reserves versus Resources by Kathrine Moore Every once in a while the media will put out a story about how we are depleting the Earth's resources. Calculated guesses are made about how many years it will take for oil or mineral reserves to be used up. Readers, and sometimes even the writers of these articles, understand this to mean that there is a calculable date by which the Earth will simply run out of natural resources. This is often a misunderstanding brought about by confusing two terms: resources and reserves. In the resource sector, these two terms have very different meanings. Simply put, resources are undefined mineral occurrences that are yet to be fully explored, measured or exploited. The amount of resources the Earth holds is simply, unknown. There are areas of the world that are unexplored or underexplored. Areas with little or no infrastructure and challenging terrain tend to be underexplored and could potentially host rich mineral deposits. As well, the Earth's resources are constantly being replenished. Black Smokers, found on the ocean floor, are named for the sooty material (super-heated water with very high concentrations of dissolved minerals) they eject from of their chimney-like structures. When the hot water meets the cold water, the dissolved minerals precipitate out and settle onto the rock around them: sulfur, copper, zinc, gold, and iron. Nautilus Minerals Inc. is one company planning to exploit these constantly forming deposits. Another thing to consider, if an exploration company discovers minerals on its property, it does not mean that it would be economical to extract them. The cost of extracting those minerals may be more than they are worth. That does not mean they won't be worth going after someday. For mining to be profitable, the concentration of a desired mineral must be unusually high. The demand for the mineral must be high enough to support a mineral price that will, once sold, pay for its extraction and leave a profit. But even if a mining company has a few great drill results and a pretty good idea that there is an economical deposit in the ground, it still remains just a resource. For a company to get the financing it needs to go after the minerals in the ground, it needs to turn resources into reserves. Mineral reserves are valuable; mineral resources are potentially valuable. To turn a resource into a reserve requires a mining company to carry out some very specific measurements based on NI 43 101 standards which use the CIM Definition Standards. A mine will eventually deplete its reserves as will an oil well. So when you hear that oil or mineral reserves will be eventually YUKON Local resources. Global reach. Come see us: � Mineral Exploration Roundup 2013 in Vancouver, British Columbia January 28 to 31, 2013 � PDAC 2013 International Convention, Trade Show & Investors Exchange in Toronto, Ontario March 3 to 6, 2013 MiningYukon.com 58 www.resourceworld.com RW 300cmyk.indd EMR minerals 7.375x4.7 1 Government D E C E M B E R 2 0 1 2 / J11/30/12 R Y 2 0AM A N U A 7:54:28 1 3

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