Downloaded from http://sp.lyellcollection.

org/ at Orta Dogu Teknik Universitesi on May 19, 2016

Geostatistical ore reserve estimation: a case study in a disseminated

nickel deposit

P. A. D O W D
Department o f Mining and Mineral Engineering, University o f Leeds, Leeds L S 2 9JT, U K

Abstract: This paper describes the geostatistical evaluation of a disseminated nickel orebody
which contains remnants of high grade vein mineralization. The problems of dealing with
high grade outliers are discussed together with the difficulties of modelling the semi-
variograms. Methods for the validation of the variogram models are presented prior to their
use in a geometrically and geologically controlled kriging procedure to estimate recoverable
blocked ore reserves.

The purpose of this paper is to present a case
history example from a disseminated nickel de-
posit which demonstrates simple ways of dealing
with: (a) selectivity; (b) reconciliation of geo-
statistical estimates and geological estimates; (c)
high grade outliers.
The large block V can be subdivided into 16
small blocks v. The mean grade of the large
block is 1.10% and the grades of the constituent
small blocks are shown in Fig. 1. The results of
applying various cut-off grades to the large and
the small blocks are shown in Table 1.

Table 1. Results of applying cut-offs to large and small

Selectivity blocks in Fig. 1
At the planning stage of mine evaluation, data
are generally available on a relatively large grid Mean grade Proportion above
but reserve estimates are required on a signifi- above cut-off grade cut-off grade
cantly smaller scale. For example, the average
Cut-off Small Large Small Large
drilling grid in a nickel orebody may be 30 m
grade blocks block blocks block
(between sections) x 15 m (on sections). Average
grades can be estimated for 30 m x 15 m x 5 m 0.90 1.10 1.10 100% 100%
(bench height) blocks to provide an in situ re- 1.00 1.16 1.10 75% 100%
serve estimate. However, if the minimum blast- 1.15 1.25 0.00 44% 0%
ing width (mining selection) in the orebody is
5 m, then recovery will be on the basis of the
estimated grades of 5 m x 5 m x 5 m blocks. Cut-
Reconciliation of different estimates
off grades must not be applied to the original in
situ estimates unless they are adjusted to take The problem of selectivity is also one of the
into account the size of the units on which major reasons for differences between geostatis-
selection above the cut-off grade will be made. tical and geological reserve estimates. A typical
The problem is illustrated by the simple example geological, or cross-sectional, method of ore
shown in Fig. I. reserve estimation is illustrated in Fig. 2.
On a given cross-section, the geologist identi-
fies a grade anomaly in a drillhole intersection; if
0.90 0.95 1.00 0.90 the length of the intersection with this anomaly is
greater than the minimum mining (or blasting)
width, the zone is projected half-way to the next
0.90 1.00 1.05 1.10
drillhole on the same cross-section. This pro-
cedure is repeated between the cross-sections.
1.05 1.35 1.25 1.20 The geologist has implicitly included selectivity
(on the basis of the minimum mining or blasting
1.15 1.20 1.30 1.30 width) in the ore reserve estimation. Any geo-
L
statistical estimate must first be adjusted to the
same level of selectivity before any legitimate
Fig. 1. Large block subdivided into 16 smaller comparison can be made with such a geological
blocks. estimate.

From Annels, A. E. (ed.), 1992, Case Histories and Methods in Mineral Resource Evaluation 243
Geological Society Special Publication No. 63, pp. 243-255.
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016
244
.el
4.1
~.~
Nil
Fig. 2. Geological (cross-sectional) reserve esti-
mation.
Recoverable reserves
Recoverable reserve estimates can be obtained
by two different approaches.
(1) Direct methods. These estimate distri-
butions directly from the data values using
methods such as Disjunctive Kriging, Prob-
ability Kriging, Multigaussian Kriging.
(2) Indirect methods. These start with a con-
ventional block grade model and apply correc-
tions to obtain recoverable reserve estimates on
the basis of any specified mining unit.
Each of these methods can be global or local.
The techniques used in this case history are
indirect.
Dealing with outliers
A simple method, which has found wide accep-
tance in the evaluation of gold orebodies, is to
define high grade samples by a threshold value
and estimate high and low grade proportions
P.A. DOWD
separately. The estimated grade of a block is
then found by combining the high and low grade
estimates in the estimated proportion of their
occurrence for the block.
Application to a nickel deposit
The deposit
This case history is based on a disseminated
nickel deposit which contains erratic occurrences
of high grade, massive ore. The high grade
mineralization appears to be associated with
adjacent veins which form separate orebodies
and it can be broadly differentiated from the
disseminated mineralization by applying a cut-
off grade of 3.7% Ni; it cannot be differentiated
in any physical or structural manner. This cut-
off grade was initially set at a level equal to the
lowest grade in the vein orebodies but this selec-
tion was later confirmed as it coincides with the
appearance of a separate population on a log-
probability plot. The grade of the disseminated
ore increases in the vicinity of massive ore to give
a 'halo' effect around the high grade zones.
For confidentiality the deposit is not identified
by name and all grade values have been scaled.
Sample data and stat&tics
The data available for this study were samples
from diamond drilling on 30 m east-west cross-
sections. Holes were drilled from the surface at
inclinations of between 50~ and 40~ A
number of holes were also drilled at significant
angles to the section lines, in the general strike
direction of the orebody, and in some areas holes
were drilled at shallow angles from development
inclines and working faces. Samples were split
into irregular lengths and assayed for nickel.
As most of the samples were close to 2 m in
length they were composited to this length, thus
avoiding having to 'split' the raw data. The
composite size could have been a bench height
(or equivalent length for non-vertical holes),
however, at this stage of evaluation, the 2 m
composite size gave complete flexibility in estab-
lishing recoverable reserves for a variety of
bench heights and mining options.
The cumulative log-probability plot of the
grades of 2 m composited samples is shown in
Fig. 3. It is possible to fit two straight lines to the
data points possibly indicating the presence of
two populations distinguished by a threshold
value between 3.0% and 4.0% nickel. This is
compatible with the value of 3.7% used at the
mine site to distinguish (approximately) between
disseminated and massive ore. It should also be
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016

GEOSTATISTICAL ORE RESERVE ESTIMATION 245

0.01

5 o

10

20 "
o

30 -

40 -

50 -

60 -

70 -

80 -

95 -
o

90 -

98 -

99 - o o

99.99
! I J J J IliJ I I ! I Jl ill I I. J p n jal
0.1 1.0 10.0 100

Fig. 3. Cumulative log-probability plot of grades of 2 m composites.

said that, with the exception of the first three or

four points, it is possible to fit a single straight Table 2. Statistics of nickel grades of 2 m composites
line through all points in Fig. 3 thus indicating a
single population! Statistics of the grades of the All Grades
2 m composites are summarized in Table 2. samples < 3.7%
From the statistics in Table 2 it can be seen
that the high grade samples (massive ore) have Total number of composites 2127 1931
an effect out of all proportion to their numbers, Mean grade 2.55% 1.80%
especially on grade variability. These high grade Median grade 1.80% 1.75%
samples should thus be treated separately for Variance 1.84(%) 2 0.32(%) 2
geological and statistical reasons.
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016

246 P . A . DOWD

5.07. m DZRECTZON : 50. BEAFICH ~ : +/- 15.

m
n m nun
n n n
4. tt i nUnmnn n
m mmm m! 9 m
m ill

Hi iiii mm II
3.5P.
Nil
Nil Ill

2.94.
NIl

2.35.
III

NI
Nil
1.76.
am

t. t7.

.00 . . . . . . . I'------r--- . . . . T .......... 1 . . . . . . I. . . . . . . r- . . . . . . -I- ...... --v ........... r---"-'-~

0 9 18 27 36 45 54 83 72 8t 90
DZSTANCE (L.AG)
DOk'NHOLE VARZOeflAM FOR ALL NICKEL VALUE8 (DZSBF.J4ZNATED AND MASSIVE) 214 COHPOSZTE

Fig. 4. Downhole variogram for all nickel values (disseminated and massive) 2 m composite.

Effect of outliers
proportion of massive ore in any composite by
Usually the effect of outliers on variograms is to an indicator. The estimated grade of block V i is:
give a very erratic curve which is difficult to
interpret. In extreme cases, the variogram ap- z*(V,) = {1 - p*(Vi)}.z*~(V,) + p*(Vi).Z*h(Vi)
pears to depict only random variation. In this (1)
case, erratic, random variograms were obtained
for general calculations in three dimensions for where:
strike-plunge and cross dip variograms. How- z*~(Vi) is the estimated grade of disseminated
ever, in some cases when calculation is restricted ore in block V i
to downhole directions, the outliers smooth the Z*h(Vi) is the estimated grade of massive ore in
downhole variograms and indicate a longer block V i
range than that shown on variograms calculated p*(Vi) is the estimated proportion of massive
with the outliers excluded. Figures 4 and 5 show ore in block V i.
the downhole variograms for a direction of
50~ with the outliers included and excluded This estimation requires the calculation and
(i.e. only values less than 3.7% Ni) respectively; modelling of variograms for the disseminated
the difference is caused by 62 high grade samples ore (i.e. all composites with grades less than
out of a total of 874 used in the calculations. 3.7% Ni), for the massive ore (all composites
with grades greater than or equal to 3.7%) and
Estimation method
for the indicator variable defined by:

The approach taken in this study was to quantify 0 if z(x) < 3.7%
the characteristics of the disseminated ore and i(x) =
the massive ore separately and then to define the 1 otherwise.
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016

GEOSTATISTICAL ORE RESERVE ESTIMATION 247

XtO-t
3.58., mm DZRECTZON : 50. SEARCH NteLE : + / - t5.

> 3.2t~

i + 2.85~

mm
m
mm
9

E
mm
m
mm

m
m
2.49 i
mm
i RMN M
E ~ m m M
2. t4j
I I mm m m llmm
ml l l
I I
I I I

1 iiii
I . 42 i mill

t .07.

.7t.

.36.

.00.
0 9 tB 27 36 45 54 63 72 8t 90
DZSTN~.,E (LAG)
DOklNHOLE VARZOSRAHS NZCKEL < 3.71; 214 COHPOSZTF..D 9AMPLES

Fig. 5. Downhole variograms nickel < 3.7% 2 m composited samples.

The estimated proportion (p*) is obtained by inclination 60~ appears to reach an initial sill of
kriging the block proportion from the surround- 0.170(%) 2 at around 8 m and there is possibly a
ing indicator data values. second structure with a sill of approximately
0.220(%) 2 and a range of about 38 m. Two
structures also appear on the vertical variogram,
Variograms a fact which is confirmed by the results of the
Variograms were calculated by two separate three-dimensional conical search calculation in
methods: downhole and three-dimensional coni- the vertical direction. The variogram for the
cal search. Downhole variograms are used to inclination 50~ (Fig. 5) has a range of 30 m
quantify the general cross dip variability whilst to 4 0 m with possibly an initial shorter range
the three-dimensional conical search technique is structure. Nugget variances in all directions are
used to quantify variability along strike and approximately 0.05(%) 2. Because of the average
down dip. hole length, the validity of the downhole vario-
grams varies over distances of 50m to 80m
(variogram calculation is restricted to a maxi-
D i s s e m i n a t e d ore
mum lag interval of half the length ofeach hole).
Downhole variograms, for inclinations of 90 ~ The different sill values for different directions
(vertical), 60~ and 40~ and more or less indicate either the presence of a proportional
parallel to sections, are shown in Fig. 6. In effect or some type of zonal anisotropy.
addition, the downhole variogram for 50~ is The three-dimensional conical search method
shown in Fig. 5. was used to calculate var]ograms for various
The downhole variogram for inclination 40~ azimuths (from N60~ to N60~ and various
reaches a sill value of approximately 0.290(%) 2 angles of plunge (30~ to 30~ Variogram
at around 12m. The downhole variogram for values for the first 20 m become less erratic as the
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016

248 P . A . DOWD

XiO-I
4.56.. m DIRECTION : 90. SEARCH ANGLE : 15.
o DIRECTION : -60. SEARCH ANGLE : +/- 5.
DIRECTION : -40. SEARCH ANGLE : +/- 5.
4. lIJ

a. 65.1 9 9

a. lgJ 41, 0 4~ 0 9
4)
0 4)
0 0 <~ 0 4~
;!.74J 4) am
4)
0 II II II
ill II II
! 0
a. aaJ 0
o ,, 8
II II 0 0 0
9 IE n II O
II ~ 0 0 O
.sa.I II 0
0 o " i o
II o 9
o o limb
o
t.a7J

.9tJ

.46-1

.0oJ
o ~ la ls ~4 ~0 ~m ,~a ~a ~4 ~o
DISTANCE (LAB)
DOk'NHOLE VARZO~I:IAHS FOR 11; N I C K E L CONTENT OF 2M COI4POSITED SAMPLES

Fig. 6. Downhole variograms for % nickel content of 2 m composited samples.

azimuth moves to the east, but this is partly a
consequence of the number of pairs of values
used in the calculations. The variogram which
has the longest range is that for the azimuth
N30~ and a plunge of 0 ~ (Fig. 7). This vario-
gram appears to reach an initial sill of approxi-
mately 0.125(%) 2 at around 12 m to 14 m before
slowly increasing to a second sill at approxi-
mately 0.225(%) 2 at a lag distance of around
80 m. A nested spherical model fits this experi-
mental variogram reasonably well (see Fig. 7).
The first structure of this model is very similar to
that which appears on the vertical downhole
variogram in Fig. 6 and to the shape of the
downhole variograms for inclinations 40~ and
60~ in the same figure.
The three-dimensional conical search method
was used to calculate variograms in the general
down dip direction of the orebody and these are
interpreted in conjunction with the downhole
variograms for similar directions. Variograms
for dips of 50~ and 90 ~ are shown in Figs 8 and
9. As the dip increases from 50 ~ to 90 ~ the
variograms increasingly reveal a second struc-
ture until, in the vertical direction, two distinct
levels of variability can be seen: the first with a
sill of 0.165(%) 2 to 0.185(%) 2 and the second
with a sill of 0.290(%) 2. The first structure also
appears on the downhole variograms; the second
structure is not apparent on all downhole
variograms because these variograms cannot be
calculated over sufficiently long distances. The
variogram for the vertical direction shows all
the levels of variation found for the downhole
variograms: a nugget variance of approximately
0.050(%) 2, a sill value of the second structure
equal to the sill value for the downhole inclina-
tion of 40~ (cf. Fig. 6) and a sill value for the
first structure approximating that found for all
other downhole inclinations (cf. Figs 5 and 6).
The variograms in Figs 8 and 9 indicate the
presence of some form of zonal anisotropy and
the vertical direction appears to be such that it
intersects the zones in such a way as to reveal
most clearly all the zonal structures. The vario-
gram displaying the longest range and the weak-
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016

GEOSTATISTICAL ORE RESERVE ESTIMATION 249

XlO-'l
:3.44_ m STRIKE 30 PLUNGE 0 CON]ZCAL SEARCH 5

> 3.09

a 2.:,5~ NI

ilk
2.4i.
M
" --r" JK
am ==,.,
_ m
HE

M M M
a. os.
M ~ M M M
=.....~=__- = == = m
t .72. ~MM M- l M

t 37~
M
M MMMM
m
M M

~. 0 3 - / --
"
M--
.
MM

69. CUmaENT 1400Et.

PARANETIUI
CO- O. OOO0000
C - 0.0600000
34. A - 8.
C - O.ll50000
A " lO0.

.00 9 " ' ' 9 "-'--~" - - - - "--'-'r- . . . . . "1 ~ " - - '

o ia ~4 ~6 4o 80 ~a 04 98 los Jao
DISTANCE (LAG)

STRIKE-PLUNGE VARIOGRAkl CALCULATED BY THREE-DINENSTONAL CONICAL SEARCH

Fig. 7. Strike-plunge variogram calculated by three-dimensional conical search.

est 'second structure' is for a dip of 50~ (cf.
Figs 5 and 8). A nested spherical model has been
fitted to the experimental variogram and is
shown in Fig. 8.
One possible interpretation of these vario-
grams is that the orebody consists of'payshoots'
which have an average dip of 50~ and an
average strike of N30~ The 'payshoots' are
indicated by the halo effect of the disseminated
ore around occurrences of the higher grade
massive ore. A simple illustration of these
'payshoots' is shown in Fig. 10.
When variograms are calculated perpendicu-
lar to these 'payshoots', i.e. downhole vario-
grams for holes inclined at 40~ maximum
variability is encountered, as indicated by a sill
of 0.290(%) 2 (cf. Fig. 6) and a short range of 8 m
to 12 m. When variograms are calculated within
payshoots, i.e. downhole variograms for an incli-
nation of 50~ minimum variability is encoun-
tered as indicated by the sill value of 0.200(%) 2
and the range of 30 m to 45 m on the variogram
in Fig. 5. Variograms in any other direction
should then display some of the characteristics
of variability between 'payshoots' and some
of the characteristics of variability between
'payshoots'. For example, the vertical variogram
shown in Fig. l0 cuts across the 'payshoots' at
an angle of 40 ~ and displays an initial structure
with a sill of 0.175(%) 2 and a range of 8 m to
12 m, followed by a second structure at around
34m with a sill of 0.290(%) 2. For small dis-
tances, the majority of the squared differences
are between samples in the same 'payshoot' and
thus, up to a distance of 24m to 30m, the
variogram displays the characteristics of the
average variability of the mineralization across
'payshoots' together with a small proportion of
the variability of the mineralization between
'payshoots'. However, beyond 30 m or so, more
of the squared differences tend to be between
samples from different "payshoots' which pro-
duces an extra level of variability as indicated by
the variogram in Fig. 9 for distances between
32 m and 44 m. Beyond 44 m to 48 m almost all
squared differences are between samples in dif-
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250 P . A . DOWD

XtO-t
4.06. I D I P D I R E C T I O N H D I P 5 0 CONICAL SEARCH 30

3.66.

i 3.a5, Ill

It
2.84. lie
tit
at Ii
2.44.
Iil Ii I I I II
= -

Ill ll
2.03. I
M II Elm

i .62. IIill

t . 22.

.8t.
p,tAU~wenu
CO - 0.0800000
C -, 0.0800000
A - 0.
I C - O,lSJOOO0
[A - 40.

.00.
0 1o ~o ~o ,;o ~o .... ~o +o 6o 4o Ioo
DISTANCE fLAG)
DOHN D I P VARZOGRAN FOR 2M COMPOSITES NICKEL < 3.7Z 3-D CONICAL SEARCH

Fig. 8. Down dip variogram for 2 m composites nickel < 3.7% 3-D conical search.

ferent 'payshoots' and, by oscillating about a
final sill o f 0.290(%) 2, the v a r i o g r a m indicates
that samples at these distances, in this direction,
are no longer correlated. This interpretation
would suggest that the average width of the
'payshoots' is a r o u n d 20 m to 25 m.
The m o d e l a d o p t e d (after m i n o r adjustment
of parameters by the back estimation m e t h o d )
for the disseminated ore is given in Table 3.
Table 3. Variogram model for disseminated ore
Co = 0.050(%) 2 at = 8 m (all directions)
C1 = 0.060(%) 2 a2 = 100 m (strike-plunge)
C 2 = 0.125(%) 2 = 45 m (down dip)
= 12 m (across dip)
directions and defining a third structure, with a
sill o f 0.200(%) 2 and a range of 12m, in the
cross dip direction. However, as there are no
significant differences in kriging results, the
simpler model specified in Table 3 was retained.
Indicator values
V a r i o g r a m s for indicator values show similar
structures to those seen on the variograms for
disseminated ore. The model parameters
a d o p t e d for the indicator variogram are tabu-
lated in Table 4.
Table 4. Variogram model for &dicator variable

CO = 0.060 aI = 6 m (all directions)

C 1 = 0.040 a2 = 45 m (strike-plunge)
A better fit to the experimental variograms C 2 = 0.025 = 25 m (down dip)
can be obtained by limiting the second structure = I0 m (across dip)
in Table 3 to the strike-plunge and d o w n dip
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GEOSTATISTICAL ORE RESERVE ESTIMATION 251

X50-t
4.t2. III VERTICAL DIRECTION CONICAL SEARCH 20

3.75.

3.30. I
HI Ill il Ill Ill
Ill HI nil INIII II IN
Ill Ht m Ell
2.89. I
Ii lull Ill liMm

2.47.

Ill
2.06. Ill ill

Jl
ill i l i III II
i . 65. lit IN i

i. 24.

962.

.45.

.00
0 JO 20 30 ~0 50 60 ~0 ~0 ~o ;oo
~ISTANCE (LA~)
VARIOGRAN FOR g NICKEL 2N COHPOSITES THREE-DIMENSIONAL CONICAL SEARCH

Fig. 9. Variogram for % nickel 2 m composites three-dimensional conical search.

Even when variogram calculation includes all

samples from both massive and disseminated
ore, the only direction in which there are suf-
ficient massive ore composites to produce any-
thing other than erratic fluctuations is a bearing
due west and an inclination of 50~ The vario-
gram in this direction is a very smooth spherical
model with a range of 35 m to 40 m as shown in
Fig. 4.
A variogram model for massive ore was con-
jectured on the basis of the interpretation given
to the variograms for disseminated ore and for
the indicator values. The ranges of the vario-
I-
grams for massive ore should be consistent with
those of the variograms for the indicators other-
wise the estimation method summarized in (1)
will yield inconsistent results (e.g. the indicator
Fig. 10. 'Payshoots'. estimate of a block may indicate a significant
proportion of massive ore whereas the massive
grade estimate may indicate the absence of
M a s s i v e ore
massive ore). The total sill was taken as being
There are insufficient high grade samples avail- approximately equal to the variance of the high
able to calculate variograms for the massive ore. grade values and the nugget effect was taken as
 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016

252 P.A. DOWD

the same as that found for the indicators. The (b) the variogram model for the indicator vari-
cross validation technique was then used, as able was validated independently of the
described below, to adjust these parameters until other models;
the best fit was found. These parameters are (c) the variogram model for massive ore,
listed in Table 5. together with the combined estimation
model, was validated using the estimation
method given in (1); the parameters of the
Table 5. Variogram model for massive ore
variogram for massive ore were adjusted
until the best fit was found.
C o = 7.8(%) 2 aI = 6 m (all directions)
C 1 = 4.8(%) 2 a2 = 45 m (strike-plunge) The validation was done by removing, in turn,
C 2 = 3.0(%) 2 = 25 m (down dip) each sample value and kriging its value from the
= l0 m (across dip) remaining data and using the specified vario-
gram model(s). This was repeated by removing
each sample value together with all data within a
specified ellipsoid centred around the sample
Validating the models
location. An example of the results is shown in
The models were validated by the back esti- Fig. 11.
mation method as follows:
In situ reserve estimates
(a) the variogram model for disseminated ore
was validated independently of the other The deposit was subdivided into 30m x 15 m
models; x 5 m blocks and the grade of each block was

AVERAGE VALUES OF ACTUAL GRADES F O R I N C R E M E N T S OF 0.5%

I N T H E E S T I M A T E D GRADES 3M OF DATA REMOVED 1~

o ~ AVERAGE VALUES

"o

~o

MEAN [ ACTUAL- ESTIMATE [ - 0.8996

127 MEAN (ACTUAL - ESTIMATE). - 0.00%
MEAN (ACTUAL ESTIMATE)" 1.12(%)2
547 LEAST SQUARES REGRESSION OF ACTUAL ON ESTIMATE :
ACTUAL - 0.28 + 0.91 X ESTIMATE
~ / ~ 95% CONFIDENCE INTERVAL FOR SLOPE : (0.85, 0.97)
31 58
CORRELATION COEFFICIENT : 0.5623

I i i l l l I ! i

1 2 3 4 5 6 7 O 9

E S T I M A T E D GRADE

Fig. I I. S u m m a r y o f m o d e l validation results.

 Downloaded from http://sp.lyellcollection.org/ at Orta Dogu Teknik Universitesi on May 19, 2016
GEOSTATISTICAL ORE RESERVE ESTIMATION
estimated by the three stage procedure given
above. The results, for a cut-off grade of 1.0%
are shown in Table 6, together with those
obtained from the geological (cross-sectional)
estimation method.
As usual, the kriged estimates show more
tonnes at a lower grade but the amount of metal
estimated by the two methods is very similar.
The reason for this discrepancy is usually
ascribed to the effects of taking weighted moving
averages (kriging). However in this, and many
other cases, much of the discrepancy is due to
the fact that the cross-sectional method has
implicitly assumed selection on the basis of a
minimum horizontal blasting width of 5 m
whereas the geostatistical estimates are based
on selection units of 30 m x 15 m x 5 m. In other
words, Table 6 is not a valid comparison. To
obtain a valid comparison, the kriged estimates
must be adjusted to reflect the same degree of
selectivity as the geological estimates; this can be
done by a global correction.
Table 6. In situ ore reserves for a cut-off grade of 1.0%
Tonnes of
Method Tonnage Grade contained metal
Cross-sectional 6.2 m 3.03% 0.188 m
Geostatistical 7.8 m 2.29% 0.179 m
Global recoverable reserves
The in situ estimates can be corrected globally
for selectivity by applying the affine correction.
The histogram of the estimated grades of
30 m x 15 m x 5 m blocks is known. It is assumed
that the histogram of the estimated grades
of 5 m x 5 m x 5 m blocks has the same shape
as that of the larger blocks with the same mean
but a larger variance. Based on this assumption,
the histogram of the estimated grades of the
smaller blocks can be obtained by estimating
each block value (z') as follows:
z' = m + { D ( v / G ) / D ( V / G ) } ( z - m)
where:
D(v/G) is the standard deviation of the grades
of the 5 m x 5 m x 5 m blocks (v) in the
orebody (G)
D(V/G) is the standard deviation of the grades
of the 30m x 1 5 m x 5 m blocks (V) in
the orebody (G)
253
is the mean of the estimated grades of
the blocks V
denotes the estimated grade of a
30 m 15 m 5 m block
In effect, the estimated grades of the large
blocks have been adjusted so that they have the
same variance as the grades of the smaller
blocks.
This correction is applied only to the dissemi-
nated grade estimates as it is assumed that all
massive (high grade) ore will be detected and
mined. When the disseminated ore grade esti-
mates have been adjusted for selectivity, the high
grade estimates are added in the manner given in
( 1) above.
The values of D(V/G) and D(v/G) can be
estimated by using the standard geostatistical
formulae:
D2(V/G) = C O+ C - ~(V) = 0.0927(0/0) 2
D2(v/G) = C O+ C - ~(v) = 0.1653(%) 2
where ~(V) and ~(v) are the mean values of the
variograms inside the volumes V and v, respect-
ively, and Co + C is the sill value of the vario-
gram.
The kriged reserve estimates, globally adjusted
for selectivity on the basis of 5 m x 5 m x 5 m
blocks, are shown in Table 7.
Table 7. Reserve estimates for a cut-off grade of 1.0%
with geostatistical estimates globally adjusted for the
same degree o f selectivity as the cross-sectional esti-
mates
Tonnes of
Method Tonnage Grade contained metal
Cross-sectional 6.2 m 3.03% 0.188 m
Geostatistical 6.4 m 2.96% 0.189 m
L o c a l r e c o v e r a b l e reserves
Each large block V (the grade of which is esti-
mated as described above) is subdivided into
mining unit blocks v. The lognormal short-cut
method (David 1972) was then used to calculate
recoverable ore reserve estimates on the basis of
mining unit blocks (v) from the kriged grades of
the blocks V. It is assumed that all massive ore
( > 3.7% Ni) will be mined as it is well above any
realistic cut-off grade and is surrounded by high
grade disseminated ore. The lognormal short-cut
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254 v . A . DOWD
method was thus only applied to the dissemi-
nated ore estimate (m 1) of each block and the
massive ore was then added, in the manner given
in ( 1), to give a final recoverable reserve for each
individual 30 m x 15 m x 5 m block.
Lognormai short-cut
First, the local dispersion variance (or 2) of the
grades of blocks v within the larger block V is
calculated using Krige's relationship and the
kriging variance (Ok2) of each block V:
D2(v/V) = D2(v/G) - D2(V/G)
Ov2 = D2(v/V) + (~k 2 (2)
The following formulae are then used:
Tonnage:
T(z) = To.G { 1/s].ln(z/ml) + [s/2]}
Quantity of metal:
O(z) = To.ml.G{[1/s].ln(z/ml) - [s/2]}
Mean grade:
M(z) = Q(z)/T(z)
where:
To is the tonnage contained in the block V
m1 is the mean grade of the disseminated ore
in the block V (obtained from the initial
kriged estimates)
s2 is the dispersion variance of the logar-
ithms of the grades of the mining blocks:
s 2 = In(1 + [Ov2/ml 2)
G(u) is the cumulative gaussian frequency dis-
tribution.
Adapting the lognormal shortcut
The histogram of the estimated disseminated
block grades is shown in Fig. 12 together with a
best fit lognormal density curve. The variance
associated with the lognormal density in Fig. 12
is 0.0564(%) 2. The variance of the estimated
disseminated grades of the 30 m x 15 m x 5 m
blocks is 0.0427(%) 2. The discrepancy between
these two variances suggests that the dispersion
variance component, D2(v/V), of (2) above
should be corrected by a factor k to improve the
lognormal fit in the upper tail:
k = 0.0564/0.0427 = 1.32.
The use of the standard formulae for the
lognormal shortcut assumed that variability is
the same in all parts of the orebody. In fact, as
expected with a lognormai distribution, there is a
proportional effect present: variability increases
o.,
Fig. 12. Histogram of disseminated block grade esti-
mates and fitted lognormal density curve.
with mean grade. The proportional effect is
shown in Fig. 13 which is a plot of the standard
deviation against the mean of sample grades of
disseminated ore within moving neighbourhoods
of 60 m x 40 m x 20 m. The dispersion variance,
av 2 in (2) can be further localized by taking the
proportional effect into account as follows:
o 2 = f(ml).[k.D2(v/V) + Ok2]
where D2(v/V) and Ok2 are now, respectively, the
dispersion variance and the kriging variance
calculated for the variogram model in Table 3
scaled to a unit sill. f ( m l ) is an expression
quantifying the relationship between local mean
(ml, obtained by kriging) and local variance
(obtained by calculating the variance of kriged
block estimates within a 60 m x 40 m x 20 m
neighbourhood centred on the block for which
the local reserve estimate is being calculated).
The factor k could also be made local by
fitting different lognormal distributions in geo-
logically distinct zones of the orebody.
The total local recoverable reserves for a cut-
off grade of 1.0% are 6.3 m tonnes at 2.99%.
Although there is no significant difference
between these figures and those quoted in Table
7, the block estimates which make up these
figures can be used as local reserve estimates
whereas there is no equivalent of individual
block estimates from Table 7.
Conclusions
Care must be taken when attempting to reconcile
grade estimates obtained by different methods as
often the different methods assume different
levels of selectivity. Although the discrepancy
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GEOSTATISTICAL ORE RESERVE ESTIMATION 255

_ LEAST SQUARES REGRESSION :

standard deviation = 0.010 + 0.057 x mean o o

/ -
o o
o o o

o o o

o o
o o
o oo o oo o o o o o o

o o oo o o o o o
o ooO o
o o ooo o o o ~o o

o o oo o o o o
o o o Ooo o:~ ~176
..... oo~oo
,a~oo~ ~ o~
oo
o
oo o o o
Ooo o ~ o o o o o

o ~oOoO/~oo~o o o o
oo O ~ ~o o o

o o oO,o,
o O~oo~O OOoOO~
v o o o o ~o o o oo

S o o oo o
"o0; ~ o

I I I

MEAN
Fig. 13. Proportional effect.

between geostatistical block grade estimates and Some of the ideas relating to adapting the lognormal
conventional geological estimates is partly due shortcut method were first suggested by D. Francois-
to the effects of taking weighted moving aver- Bongarcon in a report made available to the author
ages in kriging it is often also due to a greater (private communication).
degree of selectivity being implicitly incorpor-
ated in the latter.
It is possible to use simple approximations,
together with a conventional block grade model,
to provide local recoverable reserve estimates. Reference
The major advantages of these indirect methods DAVID,M. 1972. Grade tonnage curve: use and misuse
over the more sophisticated direct methods are in ore reserve estimation. Transactions of the
ease of implementation and understanding Institution of Mining and Metallurgy, 81, 129-
together with the use of conventional block 132.
grade models.