Indicated ResourceEdit
Indicated resource is a formal classification used in mineral exploration and mining to describe a portion of a deposit whose size, grade, and geometry can be estimated with reasonable confidence based on geological evidence and sampling. It represents a middle ground between the highest level of confidence, typically labeled as measured resources, and the lower confidence category known as inferred resources. The designation reflects a balance between data density, geological understanding, and practical expectations for planning and decision-making within the mining industry. For readers, it is helpful to see it as the point at which a project can move from preliminary curiosity toward concrete planning, while still acknowledging that further work is needed before any economic decision is final.
An indicated resource sits within a broader framework of mineral resource classification that also includes Measured resource and Inferred resource as commonly used in major reporting standards such as NI 43-101 and the JORC Code. The concept is applied to the total collection of ore bodies that may supply a project over time. The key distinction is confidence: with an indicated resource, geologists and engineers have enough information to estimate quantity, grade, and continuity with reasonable certainty, but not to the same degree as a measured resource. This difference matters for how a project is evaluated and financed, as indicated resources can support more advanced mine planning and feasibility analyses than inferred resources, yet they still carry more uncertainty than measured resources.
Definition and scope
A deposit or portion thereof is classified as an Indicated resource when the data density (number and quality of drill holes, assay results, and geological mapping) supports estimating grade and geometry with confidence that is sufficient to guide mine design decisions. This is usually based on a combination of direct sampling and geological modeling, integrated with prior data, and subjected to the judgment of qualified professionals. The concept of an indicated resource is a practical construct that helps translate exploration findings into potential development steps, such as detailed mine planning and production scheduling.
The classification sits alongside other resource types, particularly Measured resource and Inferred resource, and it is explicitly distinct from an Ore reserve. While indicated resources can be a crucial input for pre-feasibility and feasibility studies, they are not themselves an ore reserve until economic and legal conditions are satisfied and a decision is made to proceed with extraction. In many reporting regimes, a qualified or competent person must endorse the estimate, providing a level of accountability and professional oversight that investors rely on.
The data underpinning an indicated resource must meet established QA/QC standards (quality assurance/quality control) and be traceable to a credible sampling program. This ensures that the resource estimate is not a guess but a reasoned projection grounded in evidence. Readers and stakeholders should understand that the designation is contingent on ongoing data collection and can be revised as more information becomes available. See Quality assurance and Quality control for related concepts.
Data, methods, and risk management
The estimation of an indicated resource relies on geological models that interpret drill results, trenching, geological mapping, and other evidence. The precision of the estimate improves with data density, such that a higher proportion of a deposit may be promoted from inferred to indicated as exploration continues and drilling expands. See Geological modeling for a broader discussion of how these models are built and tested.
Resource estimation typically involves multiple steps: data collection, block modeling, grade interpolation, and a confidence assessment conducted by a Qualified person or Competent person. The reporting framework requires clear documentation of assumptions, data quality, and the criteria used to classify the resource. The existence of an indicated resource is not a claim of economic viability; it is a statement about geological confidence that supports further study, including potential economic analyses and scheduling.
Economic and regulatory context matters. Indicated resources are often used to inform early-phase Feasibility study work and to develop mine plans that consider cut-off grades, processing methods, and capital costs. However, the eventual classification as an Ore reserve depends on a positive economic assessment under a given price scenario and regulatory approvals. See Feasibility study and Ore reserve for related concepts.
Economic and policy implications
From a market-oriented perspective, indicated resources provide a transparent, auditable basis for investment and project planning. They help investors assess risk, allocate capital efficiently, and understand the prospective trajectory of a mining project under different commodity price scenarios. In jurisdictions with strong disclosure regimes, these estimates are scrutinized by regulators and independent reviewers, promoting trust in the project’s development path. See Capital markets and Mining governance for related themes.
Critics argue that resource classifications, including indicated resources, must avoid overstating certainty, especially given volatile commodity prices, changing costs, and environmental or social hurdles. Proponents of market-based governance contend that well-defined standards compel companies to disclose data and to base plans on demonstrable evidence, thereby reducing information asymmetry and protecting investors. The balance between cautious estimation and timely development is a perennial debate in mining policy, with many observers emphasizing the importance of robust data, professional oversight, and clear contingencies.
Controversies and debates are often framed around how much optimism to embed in initial estimates, how much emphasis to place on future price assumptions, and how to align technical reporting with broader social and environmental expectations. Proponents argue that the resource estimation framework—with its tiered classifications—offers a disciplined path from exploration to development while allowing room for data-driven revision. Critics may advocate for more conservative assumptions or greater incorporation of environmental and Indigenous considerations early in the planning process. See discussions related to Environmental impact of mining and Indigenous rights for connected debates.
Controversies and debates
The core controversy centers on how much confidence is embedded in the indicated resource category and how that confidence translates into economic decisions. Supporters stress that an indicated resource provides a justified basis for advancing to Feasibility study and for detailed mine planning, with professional oversight ensuring that the estimates reflect actual data quality. Critics worry that price volatility and optimistic scenarios can inflate expectations and mislead stakeholders if the underlying data do not sufficiently support the projected outcomes. See Economic geology for foundational concepts about how geology informs resource estimates.
Another axis of debate concerns regulatory and governance models. In market-based systems, private enterprise bears the cost of exploration and development, while regulators require accurate disclosures and independent review. This approach aligns with property-rights and rule-of-law traditions, emphasizing accountability and risk management. Critics of lighter-touch regimes may argue that environmental, social, and cultural costs deserve greater weight earlier in the process; defenders counter that clear standards and professional sign-off help prevent overreach and promote efficient, responsible development. See Mining law and Regulation of mining for related discussions.
The left-leaning critique often focuses on externalities—environmental harm, labor rights, and Indigenous sovereignty—that resource estimates alone cannot capture. Proponents of the indicated resource framework respond that existing standards require disclosure of risks, contingencies, and economic assumptions, while also acknowledging that ESG considerations are increasingly integrated into project evaluation. The ongoing tension reflects broader questions about how best to balance energy security, economic growth, and responsible stewardship of land and communities. See ESG in mining and Indigenous rights for further context.
See also