How many drillholes do I need to
upgrade my Inferred Mineral Resource?
Andrew Fowler, Kathy Zunica
AMC Consultants Pty Ltd
Summary
The aim of an in-fill drilling programme is to
gain more detailed information so as to
convert lower-confidence Inferred Mineral
Resources to the higher-confidence
categories of Indicated and Measured
(grouped together in this paper as “higher
resource categories”). This upgrade in
resource category is necessary to convert a
resource to an Ore/Mineral Reserve.
Generally, an in-fill drilling programme
increases the proportion of higher resource
categories relative to Inferred. Ideally, this
is done using the fewest drillholes possible.
Can we, however, quantify this relationship
between drillhole number and conversion to
higher resource categories? This could help
to develop a benchmark that companies
could use to determine how many drillholes
would be required to upgrade a desired
proportion of their Inferred Mineral
Resource.
Through an analysis of 50 case studies, this
paper aims to see if this relationship can be
quantified. In doing so, it is hoped that we
can also assist companies to answer other
pertinent questions, including:
 Does the drilling programme meet our
Resource upgrade expectations?
 Are factors such as the commodity type
or a change in the Competent Person
/Qualified Person (CP/QP) influencing
whether in-fill drilling programmes are
achieving the desired outcome?
 What are our expectations of the change
in grade when we change the proportion
of higher resource categories relative to
Inferred?
The 50 case studies analysed were
selected from the AMC Consultants Pty Ltd
(AMC) project database and publically
available information. They include precious
metal, base metal and bulk commodity
projects from the last ten years, reported in
accordance with the Australasian JORC
1
Code and the Canadian NI 43-101
2
requirements.
For each case study, two consecutive
Mineral Resource reports are compared. .
The percentage increase in the number of
drillholes between the two reports is then
plotted against the proportional increase in
units of contained metal and/or tonnage in
the higher resource categories relative to
the Inferred Mineral Resource category.
The resulting statistics act as proxies for
drillhole spacing and resource category
upgrade, and allow comparison across
different projects and commodity groups.
The outcomes of the comparisons vary, but
there is a pattern. Some in-fill drilling
programmes, for example, result in
substantial conversion to higher resource
categories. Others result in little change.
Despite this variance, the data displays a
consistent pattern when grouped into
different populations. This suggests a
general relationship between increased
drillhole density and conversion from
Inferred to higher resource categories.
The authors hope that the results and
discussion presented here will elicit further
questions and discussion that will ultimately
improve and optimize in-fill drilling
programmes.
Introduction
Comparing mining operations by cost and
productivity metrics is common in the
mining industry and is referred to as
benchmarking. Benchmarking can be
defined as measuring an organization’s
policies, products, programmes, and
strategies, and comparing these with
1
Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves, 2012 Edition, prepared by the Joint Ore Reserves Committee
of the Australasian Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia.
2
The CIM Definition Standards on Mineral Resources and Reserves (CIM
Definition Standards) establish definitions and guidance on the definitions for
mineral resources, mineral reserves, and mining studies used in Canada. The
Mineral Resource, Mineral Reserve, and Mining Study definitions are
incorporated, by reference, into National Instrument 43-101 – Standards of
Disclosure for Mineral Projects (NI 43-101).
standard measurements or the
measurements of the company’s peers.
(BusinessDictionary.com, 2014).
AMC has undertaken benchmarking studies
of mining operations for more than 20
years. As a result, it has built a substantial
database of open-pit and underground
data, with the aim of identifying and
quantifying improvement opportunities for
its clients. (Berry, 2014; Scholz, 2014).
In benchmarking studies, geological
functions have not generally received the
same scrutiny as mining functions. This is
mainly due to the difficulty of establishing
appropriate metrics for geological functions
that allow comparison across mine sites
(Berry, 2014). Nevertheless, there are
examples where a number of projects or
operations have been compared and where
implications for geological data capture
have been assessed (Berry & McCarthy,
2006).
This study applies AMC’s benchmarking
methodology to compare 50 mineral
projects and establish a relationship
between in-fill drilling programmes and
conversion of Mineral Resources from
Inferred to higher Resource categories.
Method
Table 1 below is an example of the method
used in this study, applied to publically-
available information on the Juanicipio
Silver Project in Mexico. It compares two
consecutive Mineral Resource reports (from
2012 and 2014). The proportions are
calculated on the basis of contained metal.
Table 1 – Example of applied method
2012 estimate 2014 estimate
Tonnag Ag Tonnag Ag
e (Mt) (g/t) e (g/t)
(Mt)
Inferred 4.3 513 5.1 372
Indicated 5.7 702 10.1 511
Indicated
0.64 0.73
proportion
proportion
+0.09
change
Drillhole
222 262
number
Increase in
18%
drilling
Indicated proportion = Indicated proportion of total in
units of contained metal. Mt = million tonnes, Ag =
Silver, g/t = grams per tonne
The method and calculations used in the
study are detailed below:
1. Projects were found in the AMC project
database or online that met the following
criteria:
a. Two consecutive Mineral Resource
reports were available that
documented:
i. Mineral Resource tonnage and
grade by Mineral Resource
category at the same cut-off grade.
ii. Number of drillholes that informed
each Mineral Resource estimation.
b. The two reports showed a change in
the Mineral Resource by category.
2. Project information, tonnage, grade,
number of drillholes, and reasons for the
change in the Mineral Resource were
recorded by the authors in a database.
3. Percentage change in drillholes was
calculated as:
Where:
DHcurr = Number of drillholes in the most
recent Mineral Resource report
DHprev = Number of drillholes in the
previous Mineral Resource report
4. Measured + Indicated Mineral Resource
proportion change was calculated as:
Where:
MIcurr = Measured + Indicated contained
metal as a percentage of total contained
metal in the most recent Mineral
Resource report
MIprev = Measured + Indicated contained
metal as a percentage of total contained
metal in the previous Mineral Resource
report
MIcurr calculated as:
 The case studies were selected from
AMC’s in-house project database and from
publically available NI 43-101 Technical
Reports. The earliest case study is from
Where: 2002, although the majority of studies are
MTcurr = Measured Mineral Resource from the last three years (2012–2014).
tonnage in the most recent Mineral
Resource report The projects represented in the case
MGcurr = Measured Mineral Resource studies are located in twenty-one countries
grade in the most recent Mineral across six continents (see Figure 1 below).
Resource report Figure 1 – Case Studies by Country
ITcurr = Indicated Mineral Resource
tonnage in the most recent Mineral
Resource report
IGcurr = Indicated Mineral Resource
grade in the most recent Mineral
Resource report
TTcurr = Measure + Indicated Mineral
Resource tonnage in the most recent
Mineral Resource report
TGcurr = Measured + Indicated Mineral
In Figure 2, the case studies are grouped
Resource grade in the most recent
into commodity types.
Mineral Resource report
Figure 2 – Case Studies by Commodity
Similarly, MIprev was calculated as: Group

Commodity Group

Where: 28% 12%

MTprev = Measured Mineral Resource
tonnage in the previous Mineral
Resource report
40%
MGrev = Measured Mineral Resource 20%
grade in the previous Mineral Resource
report
ITprev = Indicated Mineral Resource
tonnage in the previous Mineral Bulk Commodity
Resource report Base Metal
IGprev = Indicated Mineral Resource Precious Metal - Epithermal/Porphyry
Precious Metal - Shear/Breccia
grade in the previous Mineral Resource
report
TTprev = Measure + Indicated Mineral Table 2 lists the number of case studies by
Resource tonnage in the previous deposit type.
Mineral Resource report
Table 2 – Case Studies by Deposit Type
TGprev = Measured + Indicated Mineral
Resource grade in the previous Mineral Deposit Type Commodity Group Number
Resource report Base Metal/PM
Shear/Breccia hosted (Shear/Breccia) 1/12
5. Various charts were plotted from the Porphyry Base Metal/PM 7/3
resulting output. Epithermal PM (Epithermal) 7
Skarn Base Metal 3

Case studies Iron Formation BC 4

Carlin-type gold PM (Shear/Breccia) 2
 Stratiform Copper Base Metal 2 1. An optimal population where upgrade
Ultramafic Ni-Cu sulphide Base Metal 2 to higher Mineral Resource
Iron Oxide Copper Gold Base Metal 1
categories is positively correlated
Mineral sand: Zircon with increased drilling. The optimal
Titanium BC 1 group is defined as those projects
Nickel Laterite Base Metal 1 where greater proportion increase is
Pegmatite Lithium Base Metal 1 achieved with the least amount of
Phosphate: upwelling type BC 1 drilling.
Sedimentary Lead-Zinc- 2. A sub-optimal population, where
Silver Base Metal 1
there is generally a positive
VMS Base Metal 1
correlation between upgrade to
Note: VMS = Volcanogenic Massive Sulphide, BC =
higher Mineral Resource categories
Bulk Commodity, PM = Precious Metal
with increased drilling. The sub-
optimal group is offset from the
The relationship between in-fill drilling
and resource upgrade optimal group because it shows that
significantly more drilling was
To investigate the relationship between in- required to achieve similar proportion
fill drilling and resource upgrade, changes.
proportional change in higher resource
3. Extensional drilling population
categories is plotted against percentage
increase in drilling in Figure 3. Each point showing negative proportional
represents one of the 50 case studies or change. This population will not be
projects evaluated. considered further in this study,
because the projects in this
The dashed line in the figure divides the population do not contain a
positive–proportion change projects from significant in-fill drilling component.
the negative–proportion change projects. 4. No significant in-fill drilling
Positive proportion change means the
population, where significant upgrade
higher resource categories have increased
at the expense of the Inferred Mineral to higher Mineral Resource
Resource. Conversely, negative proportion categories has occurred with little or
change means the Inferred Mineral no change in drilling. This population
Resource has increased at the expense of will not be included in the analysis,
the higher resource categories. because the projects in this
It is important to note that most drilling population do not contain a
programmes actually include a combination significant in-fill drilling component.
of in-fill and extensional drilling. However, in However, the proposed reasons for
a normal situation, only the in-fill drilling will the upgrade are presented below.
lead to conversion to higher Resource
categories. Conversely, purely extensional Figure 3 – Proportion change (metal) versus
drilling often adds to the Inferred Mineral percentage change in drillholes
Resource and not the Measured or
Indicated Mineral Resource. Therefore, the
authors interpret that the positive
proportional change projects are dominated
by in-fill drilling, while the negative
proportional change projects are dominated
by extensional drilling. This is a
simplification of reality, but it aids
interpretation of the plots.

The 50 projects fall into four populations, as

annotated in Figure 3:
Note:
A = Dominant effect is in-fill drilling method, and confidence in the
B = Dominant effect is extensional drilling
Mineral Resource estimate. Very few
Optimal and sub-optimal populations additional drillholes were completed
The optimal population exhibits a similar between estimates.
linear trend to the sub-optimal population.
However, significantly more drilling was
required to achieve the same proportion The correlation between in-fill drilling
changes in the sub-optimal population. and resource upgrade for the optimal
and sub-optimal populations
The authors analyzed the resource reports The aim of the paper is to investigate how
and propose the following reasons to in-fill drilling programmes affect the upgrade
account for the sub-optimal population: of Mineral Resources, with the ultimate aim
1. The in-fill drilling programme did not of establishing a benchmark for how many
intersect sufficient mineralization drillholes are required to upgrade a desired
above cut-off and/or did not target proportion of the Mineral Resource from
areas that would increase the Inferred to higher resource categories.
confidence in the Mineral Resource.
2. The initial estimation method and/or The optimal and sub-optimal populations
interpretation was inappropriate. The both exhibit a positive correlation between
additional information changed the increased drilling and resource upgrade
understanding of the deposit. The (Figure 4). Trend lines fitted to each
change in understanding meant that population give correlation coefficients of
more drillholes were required to 0.54 for the optimal population and 0.77 for
increase the confidence in the the sub-optimal population, respectively.
deposit. The steeper slope of the optimal population
suggests that fewer drillholes are resulting
No significant in-fill drilling population in a higher proportion change relative to the
This population represents projects where
sub-optimal population. The authors
there was very little additional drilling
between estimates, but there was consider that these are meaningful
significant upgrading to the higher resource correlations that further studies will help to
categories for other reasons. refine and improve. The results are
elaborated upon further in the discussion
The authors have analyzed the resource section of this paper.
reports and propose the following reasons
for the significant upgrading: Figure 4 – Proportion change (metal)
1. The initial estimate was based only versus percentage change in drillholes: in-
on historical data, but then a limited fill drilling projects only
drilling programme verified historical
data, resulting in large portions of the
resource being upgraded from
Inferred to Indicated.
2. The initial estimate was based only
on historical data, but then an
additional validation work improved
confidence in the historical data,
resulting in large portions of the
resource being upgraded from
Inferred to Indicated. No additional
drilling occurred between estimates.
3. A change in Competent Person
(CP)/Qualified Person (QP) led to
considerable changes in the
geological interpretation, estimation
Commodity type, Resource size and
change of CP/QP
The relationship between in-fill drilling and
resource upgrade is investigated further by
plotting the case studies by commodity
groups (Figure 5), resource size groups
(Figure 6), and if the CP/QP changed
between estimates (Figure 7). The results
are interpreted in the discussion section of
this paper.
Figure 5 – Proportion change (metal)
versus percentage change in drillholes
grouped by commodity type
Figure 6 – Proportion change (metal)
versus percentage change in drillholes
grouped by total Resource size
Figure 7 – Proportion change (metal)
versus percentage change in drillholes
grouped by total change in CP/QP
Relationship between resource upgrade
and grade
The effect on grade when the resource is
upgraded from Inferred to higher resource
categories is investigated by plotting
positive and negative grade change against
resource proportional change. The grade
changes are calculated as percentages.
The resource proportional changes are
calculated as changes in tonnes rather than
metal, as in the examples above. The
results are grouped by comodity type
(Figure 8) and are interpreted in the
discussion section.
Figure 8 – Proportion change (tonnes)
versus grade change: grouped by
commodity type
Discussion
Drilling programmes with a significant in-fill
component, display a positive linear
correlation between percentage increase in
drilling and proportional increase in higher
resource categories. This positive linear
correlation was observed in two populations
— the optimal and sub-optimal.
The authors propose that projects in the
sub-optimal population relate to instances
where:
1. The CP/QP was not adequately
consulted during the planning phase to
avoid redundancy in the drilling
programme.
2. The initial geological interpretation of
the project was simplistic and
subsequent drilling revealed
complexity that reduced, rather than
increased, geological confidence.
3. There were managerial, contractual,
regulatory or other requirements to
complete drillholes that were not
specifically related to resource
upgrading.
An optimal in-fill drilling programme will
upgrade the resource using the fewest
drillholes, targeting locations that will define
mineralization and increase confidence in
the grade and geological continuity.
CPs and QPs should design drilling
programmes that lie within the optimal
population. For example, if a company
wishes to have a proportion change of 0.2,
the company should increase drilling by
25%. In contrast, achieving a proportion
change of 0.2 would require a 110%
increase in drilling in the sub-optimal
population.
Figures 5–7 in this paper attempt to
quantify whether commodity type, resource
size, or CP/QP influences can explain the
optimal and sub-optimal populations.
Firstly, there appears to be no obvious
relationship between commodity type and
whether the project sits in the optimal
population or sub-optimal population.
However, there is one trend that warrants
further investigation – the fact that the
majority of base metal projects lie in the
optimal population.
Regarding resource size, the majority of
projects with less than 20 Mt in total Mineral
Resource lie within the optimal population.
A possible reason for this could be that
when there is a smaller area that requires
in-fill drilling, design of the programme is
relatively straightforward. Again, further
investigation is required. Regarding change
of the CP/QP, there seem to be no obvious
trends.
Figure 8 explores how the grade changes
with the in-fill drilling programme and
whether this is impacted by commodity
type. The mean percentage grade change
is negative across all commodity types,.
This suggests that earlier interpretations
based on fewer drillholes assumed
continuity that subsequent drilling
disproved. This is possibly a reflection of
human nature, as we tend to be optimistic
in our geological interpretation at the early
stage of a project.
Another trend observed in Figure 8is the
large variation in grade changes for the
precious metal projects relative to the bulk
commodities. This is expected considering
that precious metal deposits are naturally
more variable than bulk commodities. What
was unexpected by the authors, however,
was the trend towards more negative-mean
grade changes as the variability of the
deposit increases. An interesting question
that is raised by this is: if the grade is
expected to decrease with in-fill drilling,
should this not affect how we classify the
Mineral Resources in the first place?
Further investigation is required to better
understand how the grade is impacted with
in-fill drilling and the increasing confidence
in the Mineral Resource.
The authors consider that there is further
opportunity to expand on the results
presented in this paper. In particular,
through acquiring and analyzing more case
studies, there is opportunity to confirm the
optimal population and whether the optimal
population versus the sub-optimal
population is a real phenomenon. This
might allow the establishment of a
benchmark for CP/QPs to aspire to.
Conclusion
The study results and discussion are
presented to assist CP/QPs that are
planning drill programmes and managers
that approve drilling budgets. It is hoped
that the results will prompt CP/QPs and
managers to ask if the proposed drill
programme will meet the resource upgrade
objectives. Where the proposed drill
programme is not expected to produce the
resource upgrade predicted by the optimal
population, it might be pertinent to consider
if there is redundancy in the drilling
programme.
Further research will build upon what is
considered in this paper and will help
exploration geologists, CP/QPs and budget
managers to achieve their drilling
programme objectives while minimizing
expenditure. Practical tools that optimize
the drilling programme so that it does not
fall into the sub-optimal population should
be the focus of future work.

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