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MINERAL RESERVES AND RESOURCES




By commercial value, mineral reserves are divided into three groups:

  • Balance reserves – mineral reserves within an area of subsurface resources, for which it was proved, that, at the time of geological-economic evaluation in accordance with technical-economic calculations and/or data of financial reporting, profitability ratio for products of a mining enterprise (estimated and/or real) was sufficient for cost-effective mining of minerals in that area of subsurface resources;
  • Conditionally balance reserves – mineral reserves, which cost-effectiveness of mining and utilization cannot be definitely determined at the time of evaluation, as well as mineral reserves, which meet requirements to the balance reserves, but cannot be utilized at the time of evaluation for various reasons;
  • Beyond balance reserves - mineral reserves within an area of subsurface resources, for which it was proved, that, at the time of geological-economic evaluation in accordance with technical-economic calculations and/or data of financial reporting, profitability ratio for products (mineral raw material) of a mining enterprise (estimated and/or real) was not sufficient for cost-effective mining of minerals in that area of subsurface resources.
Among the balance reserves, minable and subsidized reserves are singled out by mining and utilization conditions:
  • Minable reserves – profitability of production activity of a mining enterprise (works), which is being designed, is determined by the State Commission on Mineral Reserves and exceeds the refinancing rate of the National Bank on condition of rational use of technical means and technologies, as well as adherence to subsurface and environmental protection requirements;
  • Subsidized reserves – cost-effectiveness of minerals mining and utilization by a mining enterprise (works), which is being designed, is determined by the State Commission on Mineral Reserves and is possible only on condition of awarding tax privileges, subsidies, grants and other kinds of support to a user of subsurface resources at the expense of the state or local budgets.
By degree of geological study, mineral reserves are subdivided into two groups: explored and preliminarily explored reserves.
       Explored reserves represent scope of minerals, which tonnage, grade, processing characteristics, geological, mining, hydrogeological and other conditions of occurrence were studied with comprehension enough for development of construction designs for minerals mining and processing facilities. Major parameters of explored reserves, which condition engineering solutions for minerals mining and processing, as well as environmental protection, shall be determined based on data of direct measurements or investigations, carried out within mineral bodies on the ground of a dense grid, with the limited extrapolation substantiated by data of geological, geophysical, geochemical and other investigations. Explored mineral reserves make basis for design works and development of a mineral deposit (accumulation). State expert examination of materials of geological-economic studies of mineral reserves evaluated before 2005* is a compulsory procedure. Repeated state expert examination and mineral reserves evaluation at deposits shall be carried out every five years of a subsurface resources area exploitation.
       Preliminarily explored reserves represent volume of minerals, which tonnage, grade, processing characteristics, geological, mining, hydrogeological and other conditions of occurrence were studied with comprehension enough to determine commercial value of the deposit. Major parameters of preliminarily explored reserves, which govern selection of minerals mining and processing methods, shall be estimated mostly basing on extrapolation of direct measurements/studies data obtained within the deposit boundaries on the ground of a sparse or irregular grid. Extrapolation shall be substantiated by analogy with the explored deposit (accumulation), as well as data on geological, geophysical, geochemical and other investigations of subsurface.
       Preliminarily explored reserves make basis for grounding of further exploration or pilot-commercial mining of a deposit (accumulation).
       By degree of geologic certainty and reliability, mineral resources are subdivided into two groups: prospective and prognosticated.
       Prospective resources represent scope of minerals quantitatively estimated based on data of geological, geophysical, geochemical and other investigations of plots within productive areas hosting already known mineral deposits of a certain geological-commercial type. Prospective resources implicate possibility of finding new mineral deposits (accumulations) of the same geological-commercial type, which existence is grounded by positive evaluation of mineral occurrences, geophysical, geochemical and other anomalies, which nature and promisingness were proved. Quantitative estimations of mineral deposits (accumulations) parameters shall be determined based on interpretation of geological, geophysical, geochemical and other data or statistical analogy. Prospective resources provide the basis for geological-economic evaluation of advisability to carry out prospecting and prospecting-exploration works.
       Prognosticated resources represent scope of minerals, which implicate potentiality of hosting deposits of a certain geological-commercial type, the implications being based on positive stratigraphic, lithological, tectonic, mineragenic, paleogeographic and other conditions, identified within the boundaries of promising areas, where commercial deposits were not discovered yet. Quantitative estimation of prognosticated resources shall be performed based on expected parameters by analogy with productive areas, where mineral deposits of the same geological-commercial type were discovered. Prognosticated resources of minerals provide the basis for grounding of regional and prognostication-geological works.
       Mineral reserves and resources, characterized by certain levels of commercial value, as well as stages of technical-economic and geological studying, are subdivided into classes marked with international ternary digital code in accordance with table below.

Commercial value Degree of technical/economic study Degree of geological study Class code
Balance reserves GEE-1 Explored reserves 111
  GEE-2 Explored reserves 121
  GEE-2 Preliminarily explored reserves 122
Conditionally balance GEE-1 Explored reserves 211
and beyond balance reserves GEE-2 Explored reserves 221
  GEE-2 Preliminarily explored reserves 222
Commercial value GEE-3 Preliminarily explored reserves 332
not determined GEE-3 Prospective resources 333
  GEE-3 Prognosticated resources 334


      Mineral reserves shall be calculated based on mineral deposits geological exploration or mining data, the mineral reserves of different classes being calculated separately in accordance with level of their commercial value, as well as level of technical-economic and geological studying.
       Calculation parameters and volumes of minerals shall be determined by direct counting based on sampling data, measurements and/or studies of mineral accumulations and host rocks. Mineral reserves shall be distinguished as to their commercial value in accordance with conditions for mineral reserves calculation, established for balance and beyond balance reserves based on consideration of various options of technical-economic calculations. Conditions for mineral reserves calculation shall be established taking into account rational utilization of all minerals and components in the amount recovered into ultimate marketable products of a mining enterprise.
       Reserves of all minerals, as well as prospective oil and gas resources shall be recorded in the State Balance of Mineral Reserves (“State Balance”). New deposits are included in the State Balance based on decisions of the State Commission on Mineral Reserves regarding tonnage, commercial value and level of knowledge about reserves and reliability of mineral resources. Record keeping of increase in mineral reserves found additionally during exploration or mining of deposits included in the State Balance shall be carried out based on performance balances of users of subsurface resources.
       Beyond balance reserves shall be calculated and recorded, if possibility of their mining and storing as by-products for utilization in future or conservation at the place of their occurrence for mining at a later date exists. During calculation of conditionally balance and beyond balance reserves, reasons of their classing with these groups shall be indicated (economic, technological, geological, mining, legal, environmental, etc.).
       At complex deposits, reserves of major, jointly occurring and accompanying minerals, as well as commercial components contained in them and mining wastes are subject to calculation and recording. Reserve calculation for jointly occurring and accompanying minerals, as well as commercial components contained in them shall be performed in accordance with the established procedure.
       Both total mineral reserves with commercial components contained in them (if they are available at place of occurrence) and balance reserves are subject to calculation and recording. Balance mineral reserves, which include losses and dilution in the course of mining and processing, shall be determined in accordance with an optimal system of the deposit mining based on consideration of various options of technical-economic calculations. Accompanying commercial components accumulated in salable products during minerals processing shall be calculated and recorded both by their availability subsurface and in products/recovered minerals. Total and balance reserves shall be calculated and recorded for oil, gas condensate, free and dissolved gas, as well as commercial components contained in them.
       Mineral resources are estimated comprehensively within the boundaries of promising areas to depths accessible with technologies, up-to-date or possible in the nearest future and applicable for mining deposits of the given kind of minerals. Requirements to tonnage and quality of minerals, as well as of commercial components contained in them, stipulated by conditions approved for known similar deposits (taking into account possible changing of these requirements in the nearest future) shall be taken into account during the estimation. Changes in parameters of conditions, used for quantitative estimation of mineral resources, shall have appropriate substantiations.
       Reserves shall be calculated and recorded and resources shall be estimated separately for each kind of minerals and fields of their industrial use.

*”Classification of Mineral Reserves and Resources of the State Fund of Subsurface Resources” with changes, introduced by the Resolution of the Cabinet of Ministers of Ukraine no. 264 of March 26, 2008.


 
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