A Glossary of the most common mining terms

Published at May 4, 2018, in Investor 101

Having trouble understanding mining terminology? Here’s a comprehensive A-Z guide of mining terms you need to know if you are considering investing in the mining industry or are just curious about how mining works.

AC drilling: Air core drilling; Air blast drilling technique with limited coring capability.

Alluvial deposit: Clay or silt or gravel carried by rushing streams and deposited where the stream slows down.

Anomaly: Zone determined by exploration methods to be different from its surroundings.

Assay: Compositional analysis of an ore, metal, or alloy

Ball mill: Device used in grinding to reduce broken ore into powder.

Banded Iron Formation (BIF): Iron formation consisting of alternate silica-rich and iron-rich layers.

Bankable feasibility study (BFS): A BFS represents a base case for financiers. A positive BFS is one that satisfactorily provides all of the information necessary for a bank to determine that the project is viable.

Base metals: More common non-precious metals which include lead, copper, zinc, nickel.

Blast furnace: A reaction vessel in which mixed charges of oxide ores, fluxes and fuels are blown with a continuous blast of hot air and oxygen-enriched air for the chemical reduction of metals to their metallic state.

Brownfields: exploration which is conducted with close proximity to known ore deposits.

Bulk sample: A large sample of mineralized rock selected in such a manner as to be representative of the potential orebody being sampled. Used to determine metallurgical characteristics.

Bullion: Gold or silver in bars or ingots

Call option: An agreement that gives an investor the right (but not the obligation) to buy a stock at a specified price within a specific time period.

Carbon in leach (CIL) process: A recovery process in which a slurry of gold ore, carbon granules and cyanide are mixed together. The cyanide dissolves the gold content and the gold is absorbed on the carbon; the carbon is subsequently separated from the slurry for further gold removal.

Carbon in pulp (CIP) process: Similar to carbon-in-leach process, but initially the slurry is subjected to cyanide leaching in separate tanks followed by carbon-in-pulp. Carbon-in-leach is a simultaneous process.

CFR (Cost and freight): A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination. Under CFR, the seller does not have to get insurance against the risk of loss or damage to the goods during transit.

Coke: Solid residue remaining after certain types of coals are heated to a high temperature.

Coking coal (metallurgical coal): A grade of coal that meets the requirements for making coke. It must have a low ash and sulfur content and form a coke that is capable of supporting the charge of iron ore and limestone in a blast furnace.

Cut-Off Grade: A grade level below which the material is not “ore” and considered to be uneconomical to mine and process.

Definitive feasibility study (DFS): The most detailed form of feasibility study which determines definitively whether to proceed with a project.

Diamond drilling: Rotary drilling using diamond set or diamond impregnated bits, to produce a solid continuous core sample.

Down dip: Downward along a dip.

Drilling permit: The authorization to drill at a specified location.

Drilling: Boring a hole into prospective ground to recover cuttings indicative of rock types and grades of mineralization.

DSO (Direct shipping ore): High grade hematite is often referred to as DSO because it is mined and beneficiated using a relatively simple crushing and screening process before being exported for use in steel mills.

Enterprise value: Market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.

Environmental impact study: A written report that examines the effects proposed mining activities will have on the natural surroundings.

Epithermal deposit: A mineral deposit consisting of veins and replacement bodies, usually in volcanic or sedimentary rocks, containing precious metals.

EPS (Earnings per share): The portion of a company's profit allocated to each share.

EV/Resource oz: Mining valuation method. This is the amount you are paying in dollars per ounce of resource.

EV/Reserve oz: Mining valuation method. This is the amount you are paying in dollars per ounce of reserve.

Farm in: When a company acquires an interest in a block by taking over all or part of the financial commitment for drilling an exploration well.

Fault: a planar fracture or discontinuity in a volume of rock, across which there has been significant displacement along the fractures as a result of earth movement

Feasibility study: An evaluation of a proposed mining project to determine whether the mineral resource can be mined economically. There are four types of feasibility studies used in mining: scoping, preliminary feasibility (PFS), definitive feasibility (DFS) and bankable feasibility (BFS).

Geothermal: pertaining to the heat of the earth’s interior.

Hanging wall: The rock on the upper side of a vein or ore deposit.

Head grade: The average grade of ore delivered to the mill.

Indicated Resource: That part of a mineral resource for which tonnage, grade and mineral content can be estimated with a reasonable level of confidence.

Inferred Resource: That part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence.

Itabirite: A term widely used in Brazil to denote a banded iron formation containing between 20% and 64% Fe. Unlike the typical Australian magnetite, itabirite requires very little energy to liberate the iron, and therefore is significantly easier and cheaper to upgrade to a saleable product.

JORC code: Professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves.

Magnetic separation: A process in which a magnetically susceptible mineral is separated from waste by applying a strong magnetic field; ores of iron are commonly treated in this way.

Magnetic survey: Technique which measures variations in the earth’s magnetic field in order to define the distribution of values which may be indicative of different rock types.

Mill: A plant where ore is ground fine and undergoes physical or chemical treatment to extract the valuable metals.

Mill feed grade: The grade of material fed at the mill

Mineralized zone: An enriched zone of mineral deposits

Net smelter returns: the value received for a mineral after refining, less the cost of transporting the mineral to the refinery and the cost of refining.

NPV: Net present value: the sum of discounted positive and negative cashflows.

Open in all directions: Drilling has encountered mineralization as far as drilling has gone along strike and at depth.

Open pit: A mine that is entirely on surface.

Probable reserve: Can be mined in an economically viable fashion. Sufficient quality to be a basis for decision on further deposit development.

Proven Reserve: Can be mined in an economically viable fashion. A Proven Ore Reserve represents the highest confidence category of reserve estimate.

Put option: An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying stock at a specified price within a specified time

RC drilling: Reverse circulation drilling; RC drilling is similar to air core drilling, in that the drill cuttings are returned to surface inside the rods. RC drilling is slower and costlier but achieves better penetration than RAB or air core drilling.

Recovery: A term used in process metallurgy to indicate the proportion of valuable material obtained in the processing of an ore.

Refining: Extracting and purifying metals and minerals.

Reserves: are valuable, and legally, economically and technically feasible to extract. Reserves can be classified as proven or probable for miners. For oil and gas companies, reserves are proven, probable or possible.

Rock chip sampling: Collection of rock samples by breaking chips off a rock face for chemical analysis.

Scoping study: Initial financial appraisal of an indicated mineral resource.

Seismic survey: Exploration method in which strong low-frequency sound waves are generated on the surface or in the water to find subsurface rock structures that may contain hydrocarbons. 3-D Seismic means seismic data that is acquired and processed to yield a three-dimensional picture of the subsurface.

Shear zone: a zone of closely spaced, approximately parallel faults or dispersed displacements.

Strike: direction of the line formed by the intersection of a fault, bed, or other planar feature and a horizontal plane.

Strike length: Distance along strike.

Strip ratio: The ratio of tonnes removed as waste relative to the number of tonnes of ore removed from an open-pit mine. For example, a 3:1 stripping ratio means that mining one cubic metre of ore will require mining three cubic metres of waste rock.

Sulphide ore: Sulphide ores are generally found hundreds of metres below surface, and generally require underground mining infrastructure. The main benefit to sulphide ores is that they can be concentrated using a simple physical separation technique called flotation.

Tailings: The material that remains after all metals considered economic have been removed from ore during milling.

Tailings dam: Structure which holds back the storage of tailings

Tenement: ultimate result of an area selection process. A permit, claim, licence or lease that may be granted.

Vein: A fissure, fault or crack in a rock filled by minerals that have travelled upwards from some deep source.

Working interest: A working interest in an oil or gas property is one that is burdened with the cost of development and operation of the property, such as the responsibility to share expenses of drilling.

Winze: Inclined or vertical shaft or passage between levels in a mine.

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S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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