Measured Mineral Resource

A Measured Mineral Resource represents the highest level of geological confidence in a mineral deposit before it is confirmed as economically mineable. Think of it as the most meticulously surveyed and best-understood portion of a potential mine. A geologist, known as a Competent Person or Qualified Person, has examined the deposit in such detail—typically through close-spaced Drilling, Trenching, and Sampling—that they are very certain about its size (tonnage), shape, and quality (grade). The geological and physical characteristics are known so well that the estimates are robust enough to support detailed mine planning and the final Feasibility Study. While it's still a “resource” and not yet a “reserve,” it's the closest you can get, providing a solid foundation for assessing a project's potential.

Imagine you're trying to figure out how many coins are in a massive, cloudy jar. That's the challenge Mining Companies face. They use a system to classify their confidence in what they've found. A Measured Mineral Resource is like being allowed to reach into the jar, pull out handfuls of coins from many different spots, count them, and weigh them. You're not 100% certain about every single coin, but you have an extremely high degree of confidence in your overall estimate. This classification isn't just a guess; it's a technical standard governed by strict international codes, such as the JORC Code in Australasia or Canada's NI 43-101. These codes ensure that when a company announces a Measured Resource, investors can trust that the data is based on rigorous geological work. The key takeaway is confidence. The risk that the mineral isn't there in the estimated quantity and quality is very low.

For an investor, understanding the journey from a geological find to a profitable mine is crucial. A Measured Resource is a critical milestone on that journey.

It's vital not to confuse a Mineral Resource with a Mineral Reserve. A resource is an estimate of the minerals in the ground. A reserve is the portion of that resource that is economically and technically viable to mine. Here's the ladder of increasing confidence:

• Mineral Resources (The concentration of minerals with reasonable prospects for eventual economic extraction)
  1. Inferred Mineral Resource: The lowest confidence level. It's an initial estimate based on limited geological evidence. “We think there's something here.”
  2. Indicated Mineral Resource: A higher level of confidence based on more detailed sampling. “We're pretty sure this is what's here.”
  3. Measured Mineral Resource: The highest level of resource confidence. “We are very confident in the quantity and grade of what's here.”
• Mineral Reserves (The economically mineable part of a resource)
  1. Probable Mineral Reserve: The economically mineable part of an Indicated Resource.
  2. Proven Mineral Reserve (or Proved Mineral Reserve): The economically mineable part of a Measured Resource.

To move from a Measured Mineral Resource to a Proven Mineral Reserve, a company must complete a comprehensive Feasibility Study. This study proves that extracting the minerals makes financial sense after considering all costs, commodity prices, mining technology, environmental regulations, and legal permits.

A Value Investing approach is built on understanding a business's true worth and buying it with a Margin of Safety. In mining, a company's core asset is its mineral deposit. The Measured Resource figure is one of the best tools for calculating that asset's value.

• Reduces Geological Risk: The biggest risk in early-stage mining exploration is that the minerals you hope for aren't actually there. A large Measured Resource almost completely eliminates this specific risk, allowing you to focus on the economic and operational risks instead.
• Foundation for Financial Models: Analysts use Measured Resource numbers to build more reliable financial models. With high-confidence data on tonnage and grade, you can more accurately forecast future production rates, revenues, and Cash Flow, which are the building blocks of a company's valuation.
• A Sign of Progress: A company successfully converting its resources into the Measured category is a major de-risking event and a sign of operational competence. It’s often a catalyst that can unlock significant value for shareholders as the project moves closer to production.

Think of a Measured Mineral Resource as the gold standard of geological knowledge about a deposit. It's not yet money in the bank—that's a Proven Mineral Reserve—but it's the firmest evidence you can get that a valuable asset exists deep in the earth. For savvy investors, it provides a clear signal that a project's geological risk has been minimized, creating a much more solid foundation for assessing the true value of a mining venture.