9.3 Resource assessment, mining & environmental context

Resources vs. Reserves: The McKelvey Box

A crucial distinction in economic geology separates a resource from a reserve. A resource is the total concentration of a commodity in the crust in a form that might eventually be extracted, whether or not it is currently profitable or even discovered. A reserve is the portion of a resource that has been identified and can be extracted profitably under present economic and technological conditions. The key rule is that all reserves are resources, but not all resources are reserves.

The McKelvey box, developed by the U.S. Geological Survey, organizes these categories on a two-axis diagram:

• The horizontal axis represents geologic certainty, decreasing from left (identified and measured) to right (undiscovered, inferred, or speculative).
• The vertical axis represents economic feasibility, decreasing from top (economic) to bottom (marginally economic and subeconomic).

Reserves occupy the upper-left corner—material that is both geologically identified and economically recoverable. Moving to the right increases geologic uncertainty (measured, then indicated, then inferred, then hypothetical and speculative); moving downward decreases profitability. Because rising prices or improved technology can shift subeconomic material upward into the reserve box—and falling prices push it back out—reserve figures change over time even without any new discovery. This is why a mine's reported reserves can grow or shrink from year to year.

Resource Assessment Methods

Estimating the size and grade of a deposit relies on a staged program:

• Exploration and sampling — geologic mapping, geochemical soil and stream surveys, geophysical methods (magnetics, gravity, seismic, and electrical), and remote sensing to locate targets.
• Drilling — core and cuttings define the three-dimensional shape and grade of the body, and assays quantify metal content.
• Tonnage and grade calculation — tonnage is estimated from deposit volume multiplied by rock density, and multiplying tonnage by grade yields the contained metal.
• Classification — measured, indicated, and inferred categories reflect increasing spacing between data points, and public reporting codes such as JORC and NI 43-101 standardize how confidence is disclosed.

Grade estimation between drill holes uses geostatistics, most commonly kriging, which weights nearby samples by their spatial correlation to interpolate values across the block model. The economics of any project also hinge on metallurgical recovery—the fraction of contained metal that processing actually captures—and on dilution, the waste rock unavoidably mined with the ore, both of which reduce the effective grade delivered to the mill below the in-situ figure.

Mining Methods

The choice of mining method depends mainly on the depth, geometry, and grade of the deposit and the strength of the surrounding rock.

Surface mining is used for shallow, large deposits: open-pit benches spiral downward into disseminated ore, strip mining peels back overburden to reach flat-lying coal, and quarrying extracts stone. Underground mining reaches deeper or higher-grade, more localized bodies through shafts and tunnels; it is costlier and more hazardous but disturbs far less surface area. The stripping ratio—the volume of waste that must be removed per unit of ore—governs surface-mine economics, and a deposit is mined underground once that ratio becomes too high.

Environmental Context

Mineral and energy extraction carry significant environmental consequences that a licensed geologist must anticipate and mitigate:

• Acid mine drainage (AMD) is the most widespread problem. When sulfide minerals—especially pyrite (FeS2)—are exposed to oxygen and water during mining, they oxidize to produce sulfuric acid plus dissolved iron. The resulting low-pH, metal-laden runoff mobilizes toxic metals, stains streams orange with iron hydroxide, and devastates aquatic ecosystems. AMD can persist for decades after a mine closes.
• Groundwater impacts — pumping to keep pits and shafts dry lowers the water table, and leachate from tailings and waste rock can contaminate aquifers with acid, metals, or process chemicals such as the cyanide used in gold heap leaching.
• Tailings and waste rock — enormous volumes of finely ground waste stored behind tailings dams pose failure and long-term contamination risks.
• Surface disturbance — erosion, sedimentation, habitat loss, dust, and subsidence over abandoned underground workings that can crack foundations and disrupt drainage at the surface.
• Air and legacy impacts — dust and, at some sites, mercury or arsenic from historic processing linger long after closure, so characterizing pre-existing contamination is part of responsible assessment.
• Reclamation is the legally required restoration of mined land: regrading to stable contours, replacing topsoil, revegetating, and managing water quality. In the United States, the Surface Mining Control and Reclamation Act (SMCRA, 1977) governs coal-mine reclamation. Preventing AMD—by minimizing sulfide exposure, capping wastes, and neutralizing runoff with limestone—is central to modern practice.

For a practicing geologist, integrating resource assessment with these environmental controls—baseline groundwater monitoring, waste characterization, and closure planning—is essential to responsible and legally compliant resource development.