In all actuality the first question one might ask is how did a NI 43-101 Geologic Report come into being?
The answer is one of simplicity. You see in the 20th century when Gold mining became a real industry in the world and people were buying shares of stock in Gold Mines and purchasing gold as a hedge against inflation there was not really a way to tell if a mine really had any in-ground assets or not. In Canada there are three major stock exchanges and the question of “ What Is This Mine’s Value” kept popping up at the exchanges.
So the stock exchanges of Canada put their heads together and developed a set of rules that would come to be know as the Standard For Mine Evaluation or as we know it today a National Instrument 43-101 Geologic Report. This report will establish a Proven Reserve and A Probable Reserve. This Proven Reserve then become the real time value of a Gold and Silver Mine. Now, not just anyone can compile one of these NI 43-101’s as they are called in the industry. The rules state that in order to compile and evaluate a mines worth a person has to meet a certain standard of Knowledge first in the mining industry, then they have to be what is known as a Qualified person and this can mean a Geologist who belongs to an association such as exists here in the United States or has worked on mines and evaluation of mines in many countries and has experience in the evaluation of Gold Mines.
A 43-101 Report will be accomplished in one of three phases. Phase one is where a Geologist takes grab samples from various parts of a Placer Mine or A Hard Rock Mine and a Chain Of Custody is created where by the Geologist has the samples in his possession until he delivers them to an Assay Lab where they sign a receipt that they have received them from the Geologist. In a phase one report there is no drilling of the ores.
In a Phase 2 NI 43-101 Geologic Report there is a certain amount of core drilling that must go on and this is usually done in a vein or Hard Rock Mine rather than in a Placer or Alluvial Mine. The drilling is on a spacing that intersects some but not all of the ore body and the entire core sample is analyzed and assayed and an average of the Gold Content is used to determine the Proven and Probable Reserves of that mine.
The last or Phase III NI 43-101 Geologic Report is the highest standard that a mine can obtain because it involves the core drilling of the entire ore body of a mine in order to determine how much Noble Metal exists in the entire mine or ore body. These studies are massive because the core samples are assayed by a certified assay lab every 5 feet of the core drilling and this gives the Geologist the information to develop a 3D profile of the ore body and where the values lies within the mines geology. A Geologist will compile all of the date and assayed values from these drillings and they will plainly show a true value of all of the Noble Metals that is held with the ore body of a mine and then a Proven Reserve and a Probable Reserve will be drawn from all of this data that has been collected from the massive core drillings of that mine.