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Uncertainty and Risk Analysis in Mineral Resources

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Project tasks


Project summary:

Quantitative mineral resources assessments are designed to provide government and industry decision-makers with information about undiscovered resources. By their nature, these assessments reflect a great deal of uncertainty and, possibly, risk. An important benefit of quantitative assessments is that the uncertainty is stated explicitly, which allows us to identify its sources and possibly reduce it and also risk. Among the possible sources of uncertainty in amounts of economic resources are: number of undiscovered deposits, possible locations of these deposits, possible grades and tonnages of the deposits, adverse effects of cover, chances of discovery, beneficiation opportunities, mining methods and costs, timing of investments and production, and prices of metals. In its most elemental form, risk can be considered the probability of failure. Uncertainty is different than risk in that it simply indicates not knowing the outcome (regardless of the possible loss).

Government agencies must deal with increasing demands for quantitative resource assessments, effects of cover and, at the same time, they face declining budgets. Government agencies and the mining exploration industry need to develop risk and value analysis, and probabilistic decision-making and exploration investment performance measures in order to significantly improve return-on-investment. This project can, if successful, significantly improve the allocation of research monies to activities that can best reduce uncertainties in assessments. In addition, it can make the exploration for minerals a more efficient process, thereby helping reduce costs of raw materials.

The Project objectives are:

  • Identify and quantify the major sources of uncertainty and risk in mineral resource assessments and exploration
  • Incorporate these factors in decision-making processes to reduce controllable risk
  • Continue the maintenance and updating of mineral deposit models
  • Develop advanced models and methods that can be used to reduce uncertainties and risks
  • Update and document the simulator used to combine grades, tonnages, number of deposits, and economic filters (MARK3)

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