Is it time for Care and Maintenance?, page-20

Mineral reserves and ore reserves[edit]

Mineral reserves are resources known to be economically feasible for extraction. Reserves are either Probable Reserves or Proved Reserves.
A Probable Ore Reserve is the part of indicated, and in some circumstances, measured mineral resources that can be mined in an economically viable fashion. It includes diluting material and allowances for losses which may occur when the material is mined. A Probable Ore Reserve has a lower level of confidence than a Proved Ore Reserve but is of sufficient quality to serve as the basis for decision on the development of deposit.
A Proved Ore Reserve is the part of Measured resources that can be mined in an economically viable fashion. It includes diluting materials and allowances for losses which occur when the material is mined.
A Proved Ore Reserve represents the highest confidence category of reserve estimate. The style of mineralization or other factors could mean that Proved Ore Reserves are not achievable in some deposits.
Generally the conversion of resources into reserves requires the application of various modifying factors, including:

• mining and geological factors, such as knowledge of the geology of the deposit sufficient that it is predictable and verifiable; extraction and mine plans based on ore models; quantification of geotechnical risk—basically, managing the geological faults, joints, and ground fractures so the mine does not collapse; and consideration of technical risk—essentially, statistical and variography to ensure the ore is sampled properly:
• metallurgical factors, including scrutiny of assay data to ensure accuracy of the information supplied by the laboratory—required because ore reserves are bankable. Essentially, once a deposit is elevated to reserve status, it is an economic entity and an asset upon which loans and equity can be drawn—generally to pay for its extraction at (hopefully) a profit;
• economic factors;
• environmental factors;
• marketing factors;
• legal factors;
• political factors;and
• social factors^[3]

A whole bunch of subjective issues in that lot but none more so than "economic factors" & "marketing factors", surprising how few investors question Mgt assumptions and just gulp down the KoolAid, probably not even understanding how a cheap JORC can be dressed up for the party.