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NI 43-101 Resource Estimates Explained

Inferred, indicated, measured, probable, proven. A plain-language guide to the resource and reserve categories used in every Canadian junior mining technical report.

Key takeaways
  • NI 43-101 is the Canadian disclosure standard for mineral projects, and it defines specific resource and reserve categories.
  • Resources (inferred, indicated, measured) describe what is in the ground; reserves (probable, proven) describe what is economically mineable.
  • Higher confidence categories require more drill data and more rigorous engineering.

What is NI 43-101?

National Instrument 43-101 is the disclosure standard adopted by Canadian provincial and territorial securities regulators for mineral projects. It governs what a reporting issuer can say about a mineral deposit and requires a Qualified Person to approve all technical disclosure.

Mineral resources vs mineral reserves

Mineral resources describe mineralized rock that may have reasonable prospects for eventual economic extraction. Mineral reserves are the portion of a measured or indicated resource that has been demonstrated to be economically mineable in a feasibility-level study. All reserves come from resources; not all resources become reserves.

The resource categories

Inferred resources are based on limited sampling and assumed continuity. Indicated resources are based on sampling close enough to confirm geological and grade continuity. Measured resources have the highest confidence and are based on detailed sampling, typically at close spacing.

The reserve categories

Probable reserves are the economically mineable part of indicated (and sometimes measured) resources. Proven reserves are the economically mineable part of measured resources, with the highest confidence.

Why category matters for investors

Resource category drives confidence and is reflected in mine planning. Banks financing a mine generally require reserves in the proven and probable categories. A resource with mostly inferred tonnes is a different investment proposition than one with mostly measured and indicated tonnes.

Resource and reserve hierarchy
Category What it is Confidence level
Inferred resource Limited drilling, geology-driven extrapolation Lowest
Indicated resource Drill density sufficient for continuity Medium
Measured resource Close-spaced drilling and sampling Highest among resources
Probable reserve Economically mineable indicated material Bank-financeable
Proven reserve Economically mineable measured material Highest

Frequently asked questions

Can inferred resources be used in a feasibility study?
No. Inferred resources cannot be the basis of a prefeasibility or feasibility study under NI 43-101. They can be used in a preliminary economic assessment (PEA), which is why a PEA economic outcome is not the same as a feasibility outcome.
How often do resources get updated?
Resource estimates are typically updated after material new drilling or significant changes in the cutoff grade or commodity price assumption. Producers usually update reserves annually.
Is a larger resource always better?
Not always. Size matters, but so does grade, depth, metallurgy, infrastructure, and jurisdiction. A small, high-grade deposit in a friendly jurisdiction with simple metallurgy can be more valuable than a larger lower-grade deposit with worse fundamentals.
Sources

Definitions follow National Instrument 43-101 and the CIM Definition Standards for Mineral Resources and Mineral Reserves.

Disclaimer. This article is published by Bellmare Capital for information and educational purposes only. It is not investment advice and is not a recommendation, offer, or solicitation to buy or sell any security. Bellmare Capital is not a registered investment advisor or dealer, and any companies mentioned are referenced for discussion only, not as an endorsement. The information comes from public filings and third-party sources believed reliable but is not guaranteed to be accurate or current, and any forward-looking views may differ materially from actual results. Investing carries risk, and small-cap and junior resource companies in particular are speculative and volatile, with possible loss of your entire investment, so do your own research and consult a licensed advisor before acting.