Computer-based Resource Estimation
In Accordance With The 1999 JORC Code
By John Duke1 & Pat Hanna2
John Duke1 is Principal Geologist – Metals,
Patrick Hanna2 is a Senior Geologist – Coal,
both with ECS International Pty Ltd.
Patrick Hanna is also a member of the JORC
Committee.
ECS International Pty Ltd is an Australian-owned
software and consulting company. ECSI specialises in
geology and mine planning for all types of mineral
commodities. ECSI can be contacted via email at
jhd@ecsi.com.au or fax on +61 2 48 613 902.
ABSTRACT
Following the Busang fiasco, more detailed
guidelines were appended to the latest revision
of the JORC Code released in September 1999.
Although the definitions and terminology
essentially remained unchanged, the additional
information in the guidelines has highlighted a
number of issues for consideration by geologists
undertaking computer-based resource
estimations.
The three main issues are:
• Data Integrity - details such as drilling and
logging techniques, sampling procedures,
assay tests, site visits, data recording and
aggregation methods need to be considered.
• Geological Interpretation – is the Competent
Person applying the appropriate software
interpretation to the deposit in accordance
with the regional setting. Are the correct
computer-based tools being applied and are
they producing the desired result (without
compromise) to the satisfaction of the
Competent Person?
• Modelling Technique – the importance of the
relevant experience of the Competent Person
not only in regard to the geology, but also
with respect to the modelling algorithms and
resource calculation methods of the computer
software system involved.
At the end of the day, it is essential that the
Competent Person undertake a reality check on
the resource estimation itself. They should also
check that the borehole spacing is in accordance
with the level of continuity for each critical
parameter (such as structure, grade, impurities,
etc) for which the resources are categorised.
INTRODUCTION
It has long been accepted practice amongst mine
geologists to provide 'conservative' resource
estimates. It is easier, the geologist argues, to accept
that some ore was missed in the estimate than to
admit to mine management and the mining engineers
that the estimate 'over stated' the resource. The mine
geologist does not usually have to wait very long
before mining reveals what is actually in the ground.
Additionally, the accumulated knowledge of the
existing mineralisation provides a solid basis for the
predictive resource model on which the estimate is
made.
On an exploration project however, the exploration
geologist is often prone to provide a more 'optimistic'
resource estimate. There is usually a long lead-time
to development and hence to any reconciliation of the
resource to mine production. Consequently the
knowledge base for the resource model is very
limited and grows only by further exploration.
Whether the resource estimate is conservative or
optimistic, either way it is not necessarily the 'best'
estimate based on the available data and geological
understanding. According to the JORC Code, what
investors and mine management need are resource
estimates which are as accurate as possible so they
can realistically assess the geological 'risk' of the
project.
For many years now the resource geologist, whether
attached to an existing mine or assigned to an
exploration project, will carry out resource estimation
using specialised 'resource modelling' software. This
implies that the resource geologist not only works to
understand the deposit but can use the appropriate
software methods to model it accurately. Applying
the appropriate methods involves both having access
to those methods in the available software and being
able to use them to generate a realistic and accurate
model.
DATA INTEGRITY
The 1999 JORC Code provides us with guidelines
(refer to Table 1 of the JORC Code) which are
recognised as industry standard procedures for
resource estimators. The first 9 points are concerned
with the integrity of the geological data, such as,
logging, sampling, assaying and data location.
There are two important criteria to consider whilst
developing a geological database for resource
estimation, Materiality, and Transparency. It is
essential that the geologist remains focussed on these
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 Computer-based Resource Estimation In Accordance With The 1999 JORC Code
criteria when designing and compiling a geological
database.
Geologists should recognise the fact that the database
will evolve with a project as it develops from
exploration to development through to the mining
stage. At all stages it is important that the investors,
project managers and the mine planners are aware of
the impact of geology on the viability of mining the
resource.
For these reasons it is essential that geologists know
why data was collected, which data is relevant to the
project and the reliability of the information.
When compiling the database, geologists should
ensure adequate data validation has been conducted.
It is the authors’ opinion that geologist should not
only sign-off on a Resource Statement, but that they
should be prepared to sign-off on the database itself
and that this should become a standard practice for
the industry.
Today’s geologists need to fully understand how data
can be manipulated with the software system they are
using to store the data. A database should be all
encompassing, integrating all types of information
including lithology, analytical data, downhole
geophysical logs, geotechnical logs, hydrogeological
data, gas data, etc. Every piece of geological
information that has an impact on the project should
be retrievable from the database to be placed on
appropriate plans or cross-sections, even if it is not
related to a borehole (Figure 1).
Comments such as micro-faulting, H2S odour emitted
from borehole, and lost water circulation in borehole
(possible breccia/fractured zone), should be stored in
an appropriate form in the database.
Figure 1. Comments on a conceptual mine plan
highlighting geological hazards to mine planners
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It is also important that the database agrees entirely
with the final geological model. Some systems use an
extract summary file of the database to generate a
model. Often, a geologist may edit the extract file to
update the model, but neglect to update the database
with the same edits. This is regarded as poor practice,
as it often complicates an independent audit of the
resources. The best method to check the integrity of
the database is to plot the data onto sections and
plans of the final model (Figure 2).
The database should well documented, as it will
inevitably be scrutinised by external auditors. The
documentation should note, among other things, the
extent of validation, assumptions, any shortcomings
of the data, verification of laboratory results and
listings of the data, such as the borehole names,
stratigraphic sequence, etc.
Ultimately, the database will be the basis for which
the geologist will communicate:
• The level of confidence an investor can “bank
on” from the Resource estimate reported.
• Relevant information to the mine planners who
will determine a reserve estimate based on the
geological conditions.
Figure 2. Validation of borehole data against the
geological model is critical, and needs graphical
capability in software systems
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 Computer-based Resource Estimation In Accordance With The 1999 JORC Code

GEOLOGICAL INTERPRETATION the geophysical “signature” of the seam can be

Geological interpretation is a fundamental part of the accurately recognised.
resource estimation process. In computer-based In the case of a complex gold vein deposit (see
resource estimation the geologist's understanding of Figure 5), the data used to carry out the geological
the structure and grade continuity of the resource are interpretation is derived from a variety of sources –
translated as defined zones or 'domains' with their surface costean sampling, underground stope channel
unique geometric shape. In the case of a single coal sampling, reverse circulation borehole sampling data
seam deposit for example, interpretation might
involve defining the floor and thickness of the seam
(domain) and a boundary to limit its extent either at
subcrop or at depth. Software would often need to be
able to handle faulting and seam thickness
complexities such as washouts and seam splits.

Figure 4. Downhole geophysical data is often used to

define splitting and coalescing coal seams.
and diamond borehole sampling data. Because
overall data density is often sparse, all available data
is used in the interpretation and the grade estimation
even though there are differences in sample size and
technique.

Costean
data

Figure 3. Accommodating seam splitting in a single

seam interpretation by splitting seam A in DH2 into 3
seam splits with a complex father-son relationship.
Nature of Data Used
Geological interpretation for mineral resource
estimation is always based on both the available data
and the geologist's knowledge of the deposit. The
nature of the relevant data used for the interpretation Drillhole
often dictates how the geologist conducts the data –
Channel DDH &
interpretation and what assumptions are derived
sample RC
about the geology. For example, in the single seam
data
deposit shown in Figure 3, coal intercepts might be
either visually logged by the geologist from drill core Vein
or, interpreted seam intercepts from downhole lodes
geophysical logs in “open holes” (see Figure 4). It is inside
assumed that enough cored holes have been logged envelope
and compared to geophysical logging data such that

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 Computer-based Resource Estimation In Accordance With The 1999 JORC Code

Figure 5. Section through a complex gold vein
deposit showing the hangingwall and footwall
surfaces derived from vein ’envelope’ intercepts
interpreted from a variety of exploration data.
Alternative Interpretations
It is sometimes useful to compare alternative
interpretations, especially in an effort to arrive at the
best resource estimate. In the gold vein example both
a 3D block model vein ‘envelope’ and a 2D gridded
high-grade vein interpretation were compared. The
3D approach, whilst easier to define, caused
problems of “smearing” high-grade and low-grade
gold estimations. The definition and correlation of
2D high-grade veins (see figure 5) to generate a vein
model resulted in a much more accurate and useful
model for mine planning than the block model
derived from the envelope interpretation.
Figure 6. Alternative geological interpretations of a
sedimentary uranium deposit affect the grade
continuity in the resource model.
Using Geology to Control Estimation
The use of geology in guiding and controlling
mineral resource estimation is particularly relevant to
folded and faulted deposits. For example, in
modelling a steeply dipping gently folded base metal
lode (see Figure 7) use was made of transformed
blocks (a proprietary method called Z-Grid Control –
see Cram and Duke 1992) to control grade estimation
within the fold.

Grade and Geological Continuity

The factors that affect grade and geological
continuity need to be understood and this
understanding carried through to both the geological
interpretation and modelling process. In modelling a
sedimentary uranium deposit it was found that
interpretation of lode intercepts based on ‘economic’ Cross Section
grades only, resulted in some problems with the Through Large Base
grade model. For example, as grades diminished at Metal Vein Type Lode
the margins of the deposit it was important to include
a lower grade intercept at the edge rather than a zero - Z-GRID BLOCK MODEL
thickness intercept. The lower grades at the margin of Orientation of
the lode prevented the higher grades from being search ellipsoid
extrapolated out to the margin as it did with the zero
thickness intercept (see figure 6). Figure 7: Block model of a folded, base metal vein-
type deposit. Transformed blocks are used to control
grade estimation within the fold - allowing for local
Geological Interpretation -
changes in orientation of the search ellipsoidal
Sedimentary Uranium Deposit

Interpretation 1.
ESTIMATION AND MODELLING TECHNIQUES

Zero thickness
As discussed in some detail in our earlier paper
Wedge
of high
intercept at (Duke and Hanna, 1997) geological interpretation
margin of
Interpretation 2.
grade deposit involves the geologist in using all relevant data to
define geological domains which differentiate the
various types of mineralisation in the deposit and
Sub-economic which stand up to the scrutiny of statistical and
High
grade grade intercept variogram analysis. The resource model is then built
extends at margin of
half way deposit by filling these domains with blocks and estimating
to low block grades in such a way as to accurately reflect the
grade
intercept geologist's understanding of spatial distribution
within each domain.

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 Computer-based Resource Estimation In Accordance With The 1999 JORC Code
It is important that block models are constrained by
the controlling geological elements of the deposit,
such as lode boundaries, structure and spatial
distribution of grades and other attributes. These
controls are incorporated into the computer model
using such tools as wireframes, triangulated and
gridded surfaces and grade estimation procedures
adapted to emulate grade distributions.
Choosing the Appropriate Estimation Technique
Having defined the geological domains during the
geological interpretation stage, choosing the
appropriate estimation techniques involves finding
ways of modelling the spatial distribution of grades
and other attributes within the domains.
Data Analysis Within Domains
A study of the spatial distribution of assay data that
lies within each domain usually increases the
geologist's understanding of the nature of
mineralisation and provides the basis for determining
grade estimation strategies. This study involves
examination of data spacing, and trends in values
displayed on sections, plans and in 3D, along with
statistical and variogram analysis.
Treatment of Extreme Grade Values
If extreme grade values exist within a single domain,
there is a danger that these values will cause undue
influence on local grade estimation. Strategies to
rectify this include cutting high grades, multiple
estimations using different search parameters for
different grade ranges and use of indicator kriging.
These extreme values are often due to smaller scale
structures such as mineralised stockwork veins,
which are discontinuous and impossible to domain
separately.
Interpolation Parameters
Grade interpolation methods include inverse distance
weighting and kriging. Kriging is a geostatistical
method of allocating optimal weights for local
estimation based on the variogram model. Grade
interpolation parameters include such parameters as
scan distance, sample/sector selection criteria and
anisotropic ratios and rotation. Anisotropic control is
particularly useful for modelling deformed deposits
(Figure 7). It is particularly important to use the
appropriate set of search strategies for each domain.
Maximum Scan Distance
Choosing the maximum scan distance for grade
estimation in any domain involves both geological
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and practical considerations. Practically, the
maximum scan distance should provide for sufficient
samples in each search ellipsoid in order to generate
a valid block grade in each block. Geologically, the
maximum scan distance is in the direction of greatest
grade continuity as determined by the geologist’s
knowledge of the data.
Block Size Vs Borehole Spacing
As a ‘rule of thumb’ blocks should be no smaller than
a quarter of the average data spacing in each
direction. Some grade estimation techniques, such as
indicator kriging, require larger block sizes. However
if regularised blocks are used in folded domains, such
as the complex gold vein shown in Figure 5, then the
blocks will need to be much smaller than one quarter
the average data spacing in order honour the folded
geometry of the lode.
Model Validation - The Reality Check
To validate the resource model there is no substitute
for comparing between the model and the relevant
borehole data plotted systematically on a full set of
plans and sections. It is particularly useful for this
checking to be carried out both by the Competent
Person who will sign off on the resource estimate and
a geologist who has good knowledge and geological
understanding of the deposit (if not the same person).
Check Estimates
A check estimate is carried out as a way of validating
the model on which the resource estimate is based. It
is important that the check estimate is carried out
using an entirely different method (often a more
manual method such as polygonal or sectional
method) so that it provides a valid basis for
comparison. In the case of the complex gold vein
deposit it proved to be very important that the 3D
block model of the vein envelope be checked against
the 2D vein model. In fact, it was the 2D vein model
that proved to be the most accurate and useful model.
Previous Estimates
Previous estimates must be used as a means of
checking and comparing any resource estimate.
Differences need to be explained satisfactorily which
maybe attributed to such factors as a revised
geological interpretation, additional data or
differences in modelling method.
Reconciliation and Mine Production Records
The real test of a resource model’s validity is how it
reconciles with what is actually mined. In practice
however it is often difficult to provide accurate
reconciliation data, as the first step is to compare the
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 Computer-based Resource Estimation In Accordance With The 1999 JORC Code
reserve estimate with production so as to eliminate
the differences between predicted and actual mining
losses and dilution.
RESOURCE REPORTING
In compiling a resource estimate, the JORC Code
specifies that the main governing principles are
transparency, materiality and competence. Computer
systems, when used correctly, will provide an
abundance of support material to assist the estimator
in classifying the resources into their appropriate
categories. Histogram and cross-correlation graphs,
variograms and confidence models, and area of
influence plots are usually quick and easy to produce
by computer-literate geologists today. As we know
with the interpretative nature of geology, it is easy to
produce enough statistical evidence to prove
whatever result we want.
However, as the JORC Code points out in Table 1, at
the end of the day, the geologist should at least
review the results to determine whether they
appropriately reflect the Competent Person(s)’ view
of the deposit. A reality check will assist the
Competent Person in determining whether they
believe their peers would agree with their
classification. This is the ultimate test of a resource
estimate, and has given rise to the international
acceptance of the JORC Code itself.
One change of the 1999 JORC Code was the addition
of the diagonal arrows in Figure 1 linking Measured
Resources to Probable Reserves. This has provided
the geologist with the ability to recommend to the
reserve estimator that although a resource is
considered as Measured, there may be other factors
that will influence the extraction of the resource thus
reducing the confidence of the reserve estimate.
General relationship between exploration results, Mineral
Resources and Ore Reserves
exploration results
MINERAL RESOURCES
Increasing Inferred
level of
geological
knowledge Indicated
and
confidence.
Measured
Consideration of mining, metallurgical, economic, marketing,
legal, environmental, social and governmental factors
(the "modifying factors").
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Figure 7 General relationship between exploration
results, Mineral resources and Ore Reserves in the
1999 JORC Code
One such example could be an underground coal
resource, which has been explored to the extent,
whereby further drilling would not alter the estimate
of tonnage or coal quality by more than say 10%.
Although this would be considered as a Measured
Resource in the coal industry, other factors, such as
roof or floor conditions, gas regime, etc, may require
further drilling data to confirm their effect on the
mining viability of the resource. Therefore the
geologist should ensure that their report reflects these
concerns that may lead the reserve estimator to
classify the reserves as Probable rather than Proved.
CONCLUSIONS
The old adage “Give six geologists one data set and
you will end up with seven different interpretations”
reflects the true nature of our profession. Today’s
sophisticated geological and mine planning software
systems are designed with great flexibility to be able
to produce those seven different interpretations.
In this day and age, therefore, it is essential that the
Competent Person should be experienced not only in
the geological interpretation of a deposit, but also in
the technology behind the software system used to
produce the resource model. This technology know-
how needs to cover two areas:
1. The methodology used to create an accurate
resource model including such tools as database
validation, geological control techniques and
extrapolation algorithms.
2. The methodology of estimation of resource
tonnage and associated grade.
Without this knowledge, it is quite likely that the
“computer” will produce the wrong result (garbage
in, garbage out).
More importantly, with or without this technology
ORE RESERVES know-how, it is essential that the Competent Person
conduct a reality check before publicly reporting any
Probable
resource estimate.
Proved
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 Computer-based Resource Estimation In Accordance With The 1999 JORC Code

REFERENCES

Australasian Code for Reporting of Mineral Resources

and Ore Reserves (The JORC Code) September 1999

Cram, A.A. and Duke, J.H., 1992. "Geological Control in

Computer-Based Resource Estimation". SMEDG/AIG
Resource Evaluation Symposium, Sydney, 1992.

Duke, J.H., 1987. "Geological Modelling Techniques in

Mine Planning". Proceedings of the AusIMM Pacific Rim
Conference, 1987.

Duke, J.H. and Hanna, P.J. 1997 "Geological

Interpretation for Resource Estimation". Proceeding of
The Resource Database Towards 2000 AusIMM Seminar,
May 1997, Wollongong, NSW, Australia.

Guibal, D. 1997 "Variography, A Tool For The Resource

Geologist". Proceeding of The Resource Database
Towards 2000 AusIMM Seminar, May 1997, Wollongong,
NSW, Australia.

Hanna, P.J. and Cameron, J.L., 1997. "Computer

Database and Geological Modelling of Hunter Valley
Geology". Proceedings of the Thirty First Newcastle
Symposium on Advances in the Study of the Sydney Basin,
April 1997, Newcastle, NSW, Australia, pp 53-55.

Isaaks, E.H., and Srivastava, R.M., An Introduction To

Applied Geostatistics" Oxford University Press (New
York).

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