A junior miner's story lives or dies inside its NI 43-101 technical report. Here's how the Canadian disclosure standard is structured, what the Qualified Person sign-off means, and the resource-and-cost details investors often scrutinize before the promotion gets ahead of the geology.
National Instrument 43-101 is the Canadian rule that governs how mining companies disclose scientific and technical information about mineral projects. It exists because the sector has a long history of promotional geology, and it forces claims into a standard, auditable form. When a company publishes a resource estimate, a metallurgical result, or an economic study, NI 43-101 dictates the definitions it must use, who is allowed to sign off on it, and what supporting detail has to be filed. The full technical report is a public document filed on SEDAR+; the news release is a summary of it. A disciplined reader treats the headline number as a claim and the filed report as the evidence.
The instrument is paired with the CIM Definition Standards, maintained by the Canadian Institute of Mining, Metallurgy and Petroleum. CIM supplies the categories — Inferred, Indicated, Measured resources; Probable and Proven reserves — while NI 43-101 supplies the disclosure obligations around them. Understanding the two together is what separates reading a mining report from reading a marketing brochure.
Every technical report is authored by, or prepared under the supervision of, one or more Qualified Persons (QPs). A QP is an engineer or geoscientist with a relevant professional designation (for example P.Geo. or P.Eng.), at least five years of experience relevant to the specific deposit type and task, and membership in a recognized professional body. The QP takes personal, career-risk responsibility for the disclosure.
Read the byline critically. Is the QP independent of the company, or an employee or insider? Independence is required for certain filings, and its absence around a promotional estimate is worth noting. Does the QP's stated expertise actually match the work — a geologist signing a resource model is normal; the same person signing off on the metallurgy and the mine plan is a stretch. A report that leans on one generalist across every discipline is weaker than one where a metallurgist owns recovery and a mining engineer owns the pit design.
Resources are graded by geological confidence, not by size or value. Inferred is the lowest confidence — grade and continuity are inferred from limited, widely spaced sampling; the geologist reasonably expects mineralization but cannot demonstrate its continuity. Indicated is supported by drilling close enough to assume continuity with confidence sufficient for mine planning. Measured is the highest — sampling dense enough that grade and tonnage are known with high confidence.
The single most important rule for a retail reader: Inferred resources cannot be converted into reserves, and cannot be used in the economics of a Pre-Feasibility or Feasibility Study. They may only appear in a Preliminary Economic Assessment, and even there they must be disclosed as inferred with the caution that they are too speculative to have economic considerations applied. A project whose "ounces" are overwhelmingly inferred has a resource on paper, not a demonstrated business.
Resources describe rock in the ground. Reserves are the economically mineable part of a Measured or Indicated resource, demonstrated by at least a Pre-Feasibility Study that accounts for mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental factors (the "modifying factors"). Probable reserves derive from Indicated resources; Proven reserves derive from Measured. Inferred material can never be a reserve.
This is where promotional decks blur the language. A company may headline a large "resource" while burying the fact that little or none of it is a reserve. No reserve means no study has demonstrated it can be mined at a profit under the assumptions used. The reserve line is the difference between "there is metal here" and "there is a mine here."
Economic studies come in three escalating levels of rigour. A Preliminary Economic Assessment (PEA), also called a scoping study, is conceptual — it may include inferred resources and carries wide cost accuracy and heavy contingency. A Pre-Feasibility Study (PFS) is the first level at which reserves may be declared; it uses only reserves for economics and tightens the engineering. A Feasibility Study (FS), often called a bankable or definitive feasibility study, is the most detailed, with the narrowest cost tolerance and the lowest contingency — the level lenders expect before financing construction.
| Stage | Resource categories allowed in economics | Typical cost accuracy | Typical contingency | What it's for |
|---|---|---|---|---|
| PEA / scoping | Inferred + Indicated + Measured | ±35–50% | ~15–30%+ | First conceptual economic look |
| Pre-Feasibility (PFS) | Reserves only (Probable + Proven) | ±20–25% | ~15% | Declare reserves; show viability |
| Feasibility (FS/DFS) | Reserves only | ±10–15% | ~10% | Bankable basis for build decision |
The escalating accuracy is the point: a PEA showing a stunning net present value can legitimately be built on inferred ounces and ±40% costs, and studies routinely re-price as they advance and the assumptions harden. A large valuation gap between a PEA and a later PFS on the same project is common and is information, not necessarily wrongdoing.
Cut-off grade is the minimum grade at which a tonne of rock is worth mining and processing rather than treating as waste. It is not a geological fact — it is an economic choice, and it moves with metal price, costs and recovery. As a rough guide, cut-off grade ≈ processing-plus-overhead cost per tonne ÷ (metal price per gram × recovery).
Worked example: suppose processing and G&A cost $25/t, gold sells near $1,866/oz (about $60/g), and recovery is 90%. Then cut-off ≈ 25 / (60 × 0.90) = 0.46 g/t. Now imagine the gold price used falls: the denominator shrinks, the cut-off rises, and rock that was "ore" at 0.46 g/t becomes waste. Because tonnage and grade are reported above a chosen cut-off, a resource can appear to grow or shrink purely because the author changed the price assumption. Always check the metal price and cut-off behind any resource statement before comparing it to another.
Drill intercepts are quoted as "width at grade" — for example "20 m at 3.0 g/t Au." Multiply the two to get a gram-metre figure (here 20 × 3.0 = 60 g·m), a quick way to compare intercepts of different lengths and grades on one scale. But the gram-metre total hides how the metal is distributed, and that is where "grade-smearing" lives.
Consider two intercepts that both report 20 m at 3.0 g/t (both 60 g·m):
2 m at 28 g/t plus 18 m at ~0.24 g/t. The arithmetic is honest (≈60 g·m over 20 m ≈ 3.0 g/t), but the deposit is really a thin high-grade vein surrounded by near-waste. Mining it as a "20-metre zone" would dilute the head grade dramatically.To catch smearing, look for the assay interval table in the technical report and check whether the grade is even or driven by one or two samples. Two more checks: is the reported width the true width or just the down-hole core length (an angled hole through a steep zone overstates thickness), and does the company disclose a top-cut or capping to stop a single freak assay from inflating the average? A high headline grade that survives none of these tests is fragile.
Grade tells you the metal in the rock; recovery tells you how much of it you can actually extract and sell. A deposit at 1.0 g/t with 92% recovery is a different business from one at 1.0 g/t with 65% recovery.
Worked example: 10 million tonnes at 1.0 g/t contains about 321,500 oz of gold (10,000,000 g ÷ 31.1035). At 90% recovery that is roughly 289,000 payable oz; at 65% recovery only about 209,000 oz — an 80,000-ounce gap from the same rock. Low recovery is common in refractory ores (fine gold locked in sulphides, or carbonaceous "preg-robbing" material), which often need roasting, pressure oxidation or bio-oxidation — expensive circuits that raise both capital and operating cost. A report that quotes grade prominently but is vague on recovery and flowsheet is leaving out half the equation.
For open pits, watch the strip ratio — tonnes of waste moved per tonne of ore. A 5:1 strip means five tonnes of waste for every ore tonne; the waste still has to be drilled, blasted and hauled, so a high strip ratio inflates mining cost even when the grade looks attractive. Rising strip ratios in later pit phases are a normal reason later years of a mine plan look less profitable than the first.
AISC, a World Gold Council metric, adds sustaining capital, site and corporate G&A, and reclamation to cash operating costs, expressed per ounce. It approximates what it costs to keep an operating mine running at current output. The margin math is simple: metal price minus AISC. At an AISC of $1,400/oz and gold at $1,900/oz, the margin is $500/oz; if the gold price used were $1,500/oz, that margin compresses to $100/oz — the same operation, far thinner economics. High-cost projects have little cushion when prices soften.
Two cautions. AISC excludes growth and expansion capital and usually financing costs, so a low AISC can still sit on a project that cannot fund its own construction. And comparability across companies is imperfect: by-product credits (subtracting revenue from copper or silver to flatter the gold cost), and differing treatment of corporate overhead, mean two "AISC" figures are not always measuring the same thing. Read the definition footnote before comparing.
Economic studies report a net present value (NPV) and internal rate of return (IRR), and a good one includes a sensitivity table showing how NPV moves with metal price and discount rate. NPV discounts future cash flows to today; the discount rate reflects risk and the time value of money. Gold studies commonly present NPV at a 5% real after-tax rate, base-metal studies often at 8%; a higher rate lowers NPV, and it bites hardest on projects with long builds or back-loaded cash flows.
Two things to test. First, price leverage: how much does NPV swing for a given price move? Illustratively, if base-case NPV is $300M and it falls to roughly $150M when the price assumption drops 10–12%, the project is highly leveraged to price — attractive on the way up, exposed on the way down. Second, the base price itself: is it near recent spot, or well above it? An NPV built on an optimistic long-term price can look robust and still be fragile. Compare the study's price deck to the prevailing market before taking the headline NPV at face value.
A profitable-looking deposit that cannot be permitted, or sits in an unstable jurisdiction, is a different risk than the economics suggest. NI 43-101 requires disclosure of environmental, permitting, social and legal factors, but the depth varies. Look for the status of environmental assessment, water and tailings permits, and any Indigenous consultation or impact-benefit agreements — in Canada the duty to consult is a genuine timeline factor. A study that assumes rapid permitting in a jurisdiction where similar projects have taken many years is optimistic on schedule, and schedule feeds directly into the discount-rate math above.
Jurisdiction also drives cost, tax and expropriation risk. Independent surveys of mining-investment attractiveness (for example the Fraser Institute's annual rankings) are a useful reference for how policy and permitting stability vary between regions. The same orebody can be worth very different amounts depending on where it sits.
The United States modernized its own disclosure regime under Regulation S-K, subpart 1300, replacing the older Industry Guide 7 for fiscal years beginning on or after 1 January 2021. S-K 1300 is broadly aligned with NI 43-101 and the international CRIRSCO framework: it recognizes mineral resources (Inferred, Indicated, Measured) and reserves (Probable, Proven), and relies on a "qualified person" concept. Differences remain in the details of independence, filing form and the Technical Report Summary format, so a project cross-listed in both markets may present two documents with the same substance in slightly different packaging. For a reader, the mental model transfers: confidence categories, the reserve line, and study rigour work the same way under both.
It depends entirely on mining method and costs, so there is no universal number. Broadly, bulk-tonnage open-pit gold operations can work at roughly 0.5–1.5 g/t if tonnage, recovery and strip ratio cooperate, while narrow underground mines usually need several grams per tonne and often 4–10 g/t or more to justify the higher cost per tonne. Grade only means something alongside width, recovery, cut-off and location.
Both describe rock in the ground, but at different confidence levels. Indicated is supported by drilling dense enough to assume geological continuity for mine planning; Inferred rests on limited, widely spaced data where continuity is expected but not demonstrated. Indicated (and Measured) can be converted to reserves in a study; Inferred cannot.
No. A Preliminary Economic Assessment is a conceptual study that may include inferred resources and carries wide cost tolerances and heavy contingency. Lenders typically require a Feasibility Study — with reserves, tight cost accuracy and low contingency — before financing construction. A strong PEA is an early signal that a project merits more work, not a finished investment case.
Sustainability is about the margin between AISC and the metal price, not the AISC number alone. An operation earns a comfortable margin only when the prevailing price sits well above its all-in sustaining cost across a normal price cycle; a project whose AISC is close to the metal price has little cushion when prices soften. Remember AISC excludes expansion capital, so it does not, by itself, prove a project can fund its own build.
NI 43-101 governs disclosure for issuers filing in Canada; S-K 1300 governs SEC filings in the United States. The two are broadly aligned on resource and reserve categories and the qualified-person concept, so the reading skills transfer. A company listed in both markets may publish parallel documents in slightly different formats covering the same underlying work.
A gram-metre is grade multiplied by intercept width (for example 20 m at 3 g/t = 60 gram-metres). It puts intercepts of different lengths and grades on one comparable scale. Its limit is that it says nothing about how the metal is distributed within the interval, which is exactly why checking the underlying assay table for grade-smearing matters.
Quintarthai is an educational, deterministic equity-research platform covering US and Canadian markets, drawing on public filings (SEDAR+/EDGAR/SEDI) and licensed market data. For mining names, it organizes the reported figures a reader would otherwise dig out by hand — resource and reserve categories, study stage, cut-off and grade assumptions, cost and recovery inputs, and share-count history — so the numbers can be compared consistently across companies and over time. It surfaces the data described in this article as one input among many; it does not provide investment advice, recommendations or price targets, and every figure traces back to a public source you can verify yourself.
AEM.