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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Mining companies calculate annual production by connecting a mine schedule to a processing schedule: tonnes of material, grade, metallurgical recovery and, when sales are reported, contractual payability. A reserve is not simply the mineral inventory divided by mine life. It is the economically mineable portion of a Measured or Indicated Resource after a technically achievable mine plan and all relevant modifying factors have been applied.
The first control is the reporting reference point. A number may describe run-of-mine material, ore delivered to a plant, plant feed, concentrate, doré, cathode or payable metal. Those are different quantities, so a production figure is meaningful only when its basis, moisture convention, grade, recovery, cut-off assumptions and reporting code are identified.
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Start by defining exactly what is being measured
“Annual production” can refer to several points in the material flow. The same operation may report ore mined, ore hauled to a stockpile, ore fed to a mill, concentrate produced and payable metal credited by a smelter. They should not be treated as interchangeable.
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| Reporting point | What the quantity represents | Why it matters |
|---|---|---|
| Run-of-mine (ROM) material | Material excavated from the mine before plant processing, often including ore and material that will be sorted or stockpiled. | Useful for mining capacity, but it does not equal plant feed or saleable metal. |
| Ore sent to the plant | Ore delivered from the mine or stockpile to the processing facility. | Often the reference point used for an Ore Reserve statement under JORC, which requires the reference point to be stated. |
| Plant feed | Material actually entering a particular processing circuit. | Can differ from mine output when stockpiles, blending, bypasses or plant constraints change the schedule. |
| Concentrate, doré or cathode | A processed product containing the target metal, before commercial deductions. | Product tonnes and contained metal are different measures; a concentrate also contains gangue and other elements. |
| Payable metal | The quantity recognized for sale after contractual payability and specified deductions. | It is the closest of these measures to sales revenue, but it is not the same as recovered metal. |
JORC Code 2012 requires public reports to identify the reserve reference point. A statement that says “1.2 million tonnes produced” without saying whether that is wet ore, dry plant feed, concentrate or payable metal is incomplete.
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Build the annual mine and plant schedules
The annual schedule is the bridge between a geological model and a production result. CIM guidance calls for a schedule showing, by year, ore tonnes, ore grades, product recovery, waste tonnes and grades, plus stockpile feed tonnes and grades. Mine and plant schedules should be separated when stockpiling or other constraints mean the material mined in a year is not the material processed in that year. The guidance is available in the CIM estimation guidance.
Inputs normally carried by year
- Mining movement: ore, waste, dilution and any planned mining losses.
- Ore quality: tonnes and head grade for each relevant ore type or domain.
- Stockpiles: opening balance, additions, withdrawals, grades and closing balance.
- Processing: plant feed, throughput limits, recovery assumptions and product streams.
- Commercial terms: concentrate or doré payability, treatment and refining charges, transport, penalties and royalties where they affect the economic model.
- Timing: ramp-up, shutdowns, maintenance, expansions and mine-life sequencing.
Keeping mine output and plant feed in separate columns prevents a common error: dividing a mine’s annual mined tonnes by a plant recovery that was calculated on a different feed mix.
Calculate contained metal from tonnes and grade
Contained metal is the theoretical quantity of a commodity in the scheduled ore before processing losses. In a consistent unit system:
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contained metal = ore tonnes × head grade
For a grade stated as a percentage, divide by 100 before multiplying. For a grade in grams per tonne, multiply by tonnes to obtain grams and then convert to kilograms or troy ounces as required. Keep the moisture basis consistent: a wet-tonnage feed and a dry-tonnage grade cannot be multiplied without first applying the moisture correction.
Illustrative copper calculation
Consider a schedule containing 1,000,000 dry tonnes at 1.50% copper:
| Step | Calculation | Result |
|---|---|---|
| Contained copper | 1,000,000 × 0.015 |
15,000 tonnes |
| Recovered copper at 88% recovery | 15,000 × 0.88 |
13,200 tonnes |
| Payable copper at 96% payability | 13,200 × 0.96 |
12,672 tonnes before other deductions |
This is an arithmetic illustration, not a reported mine result. It shows why “contained,” “recovered” and “payable” metal must be labelled separately.
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Apply metallurgical recovery
Recovery measures the share of contained metal successfully extracted by processing. The U.S. Securities and Exchange Commission’s S-K 1300 glossary defines recovery as “that portion (usually expressed as a percentage) of the metal contained in mineralized material that is successfully extracted by processing” (SEC definition).
The basic calculation is:
recovered metal = contained metal × recovery fraction
A single life-of-mine percentage can hide important operating behaviour. Recovery may change with mineralogy, oxidation state, grade, liberation size, reagent regime, throughput and blending. A schedule may therefore use recovery by geological domain, grade bin, ore type or throughput range. The recovery assumption should be tied to the same feed basis as the tonnes and grade; a laboratory result for a narrow sample is not automatically a plant-wide annual recovery.
Recovery is not mining recovery
Metallurgical recovery describes what the plant extracts from the material it receives. Mining recovery describes how much of the designed ore can actually be excavated, while dilution describes unwanted waste or low-grade material that enters the ore stream. A reserve model can apply both mining assumptions and processing recovery, so an analyst should not use the plant recovery percentage as a proxy for extraction from the pit or stope.
Convert recovered metal to payable metal
Concentrate and doré sales often recognize less metal than the processing calculation recovers. A smelter or refinery contract may apply a payable percentage and deductions for treatment, refining, transport, penalties, moisture or impurities. CIM guidance lists these revenue-model inputs alongside recovered-metal schedules.
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payable metal = recovered metal × payable fraction
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The result can then be valued using the price assumption and reduced by treatment and refining charges, freight, royalties and other costs specified in the economic model. Payability is contract-specific; it should not be inferred from a generic industry percentage.
What reported production numbers look like in practice
Published figures demonstrate why the basis must accompany every number. Agnico Eagle’s 2025 Annual Information Form reported production from 2.8 million tonnes of ore of 344,555 ounces of gold, 671,148 ounces of silver, 8,446 tonnes of zinc and 2,431 tonnes of copper (2025 filing). These are product figures associated with a stated ore throughput, not a universal conversion factor for every mine.
The same filing gives recovery assumptions used in one reserve calculation: 94.6% for gold, 77.4% for silver, 83.8% for copper and 66.9% for zinc. They are assumptions for that calculation, not guarantees that every year or ore type will achieve those rates.
Wheaton Precious Metals reported 5,100 tonnes of molybdenum in 2025 versus 8,100 tonnes in 2024 and attributed the change to lower recovery (annual information form). The example illustrates that production can fall even when geological tonnes are available if the processing response changes.
Understand how resources become reserves
A Mineral Resource is a concentration or occurrence with reasonable prospects for eventual economic extraction. A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Resource after a pre-feasibility or feasibility study applies modifying factors. Under SEC S-K 1300 definitions, the modifying factors include mining, processing and metallurgy, infrastructure, economics, marketing, legal, environmental, social and governmental matters (SEC definitions).
| Classification | Meaning in an economic mine plan | Confidence and use |
|---|---|---|
| Inferred Resource | Material supported by limited geological evidence and sampling. | Too uncertain to convert to a reserve under S-K 1300 and cannot establish economic viability in that framework. |
| Indicated Resource | Material with enough geological confidence to support mine planning and economic evaluation. | Can support a Probable Reserve after modifying factors are applied. |
| Measured Resource | Material with the highest level of geological confidence in the resource categories. | Can support a Proven Reserve, or in some cases contribute to a Probable Reserve depending on the modifying factors and study. |
| Probable Reserve | Economically mineable material, generally derived from an Indicated Resource and in some cases a Measured Resource. | Lower confidence than Proven, but sufficient to demonstrate economic viability. |
| Proven Reserve | Economically mineable material derived from a Measured Resource. | Highest confidence in the geological and modifying-factor assumptions. |
The SEC-based definitions are reproduced in a company filing at this source. Categories express confidence; they are not forecasts of annual output.
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Why a reserve cannot be calculated by applying a percentage to a resource
JORC rejects the practice of taking a resource tonnage and multiplying it by a recovery or conversion factor without a mine design and mine plan. The proposed operation must be technically achievable and economically viable, with a schedule showing how material will be mined, processed and sold. JORC also says that processing recovery factors are important information and should be included in public reports. The requirements appear in the JORC Code 2012.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.“An ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource.”
Cut-off grade connects geology to economics
Cut-off grade is the threshold used to decide whether a block enters the economic estimate. In polymetallic or concentrate operations, the equivalent concept may be a net-smelter-return (NSR) cut-off value. Material above the threshold is not automatically profitable in isolation; it is material that meets the model’s stated assumptions after the relevant costs and recoveries are considered.
Typical cut-off inputs
- Commodity prices and exchange-rate assumptions.
- Mining, processing and general-and-administrative costs.
- Metallurgical recovery and concentrate or product payability.
- Royalties, treatment and refining charges, freight and penalties.
- Sustaining capital and closure or reclamation obligations where included in the economic test.
- Mining method, dilution, mining recovery and practical plant constraints.
Changing any of these can move tonnes into or out of the reserve. Agnico Eagle’s 2025 filing ties reserve tables to stated price assumptions, recovery assumptions and mine-specific cut-off values; the filing reports the recovery percentages listed above (Agnico Eagle 2025 AIF). A reserve number without its cut-off and price basis cannot be compared fairly with one built on different assumptions.
Why annual production is not reserve tonnage divided by mine life
Reserve tonnage is constrained by what can be mined and processed economically, while annual production is constrained by the sequence and capacity of the selected mine plan. Early years may have pre-stripping, ramp-up or development; later years may draw lower-grade stockpiles. A mill expansion, maintenance shutdown, tailings capacity, water supply or blending requirement can change plant feed even when reserve tonnes remain unchanged.
For that reason, an annual schedule normally reports both mined tonnes and processed tonnes. A stockpile can make plant feed higher than current ore mining in one year and lower in another. Grade can also differ between the mine schedule and the plant schedule because the plant is blending material from several periods.
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A practical calculation workflow
- State the reference point. Label every figure as ROM, ore delivered, plant feed, concentrate, doré, cathode or payable metal. State whether tonnes are dry or wet.
- Lock the units. Convert percentages, grams per tonne, kilograms, tonnes and ounces before multiplying. Record the moisture basis and rounding convention.
- Prepare the mine schedule. For each year, list ore, waste, grades, dilution, mining recovery and stockpile movements.
- Prepare the plant schedule. Show feed tonnes and grades separately when stockpiles, blending or capacity make it different from mine output.
- Calculate contained metal. Multiply scheduled ore tonnes by head grade in consistent units.
- Apply recovery. Use the recovery assumption appropriate to each ore type, grade range or throughput condition.
- Apply commercial terms. Convert recovered metal to payable metal using contract payability, then account for treatment, refining, transport, penalties and royalties in the economic model.
- Test the reserve. Apply the cut-off, mine design, infrastructure, schedule, costs, prices and other modifying factors in a pre-feasibility or feasibility study.
- Document confidence. Identify whether the result is a Proven or Probable Reserve, the resource category supporting it, the reporting code and the competent or qualified person sign-off required in the jurisdiction.
How to compare two mine reports without mixing unlike numbers
Before comparing production or reserves, place these attributes side by side:
- Reporting reference point and product definition.
- Dry versus wet tonnes and the moisture adjustment.
- Ore mined versus ore processed or plant feed.
- Head grade, contained metal and recovered metal.
- Recovery basis: test work, historical plant performance or a domain/grade/throughput model.
- Payability, treatment and refining charges, transport and penalties.
- Cut-off grade or NSR value and the commodity-price assumptions.
- Reserve category, mine method, dilution and mining-recovery assumptions.
- Study level, jurisdictional reporting code and competent- or qualified-person sign-off.
A higher reported metal figure may simply reflect a different reference point or payability convention. A larger reserve may reflect a lower cut-off, a different price deck, a changed mine design or a reclassification rather than the discovery of new geological material.
Common interpretation errors and their fixes
Calling contained metal “production”
Contained metal is in the feed before processing losses. Fix the label and apply recovery before calling it recovered production.
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Using concentrate tonnes as metal tonnes
Concentrate includes valuable metal plus other constituents. Use the concentrate grade to calculate contained metal, then apply payability.
Applying one recovery percentage to every year
Recovery can vary with ore type, grade and throughput. Use the schedule’s domain, grade-bin or throughput assumptions where available.
Ignoring stockpiles
Stockpiles decouple mining and processing by year. Show opening stockpile, additions, withdrawals, grades and closing balance.
Comparing reserves without economic assumptions
Cut-off, price, cost, recovery and payability assumptions determine which blocks are economic. Compare those inputs before comparing reserve tonnes.
Treating an inferred resource as a reserve
Inferred material is too uncertain for reserve conversion under S-K 1300. Keep it separate from the economically demonstrated reserve.
The Bottom Line
Annual production is the scheduled flow from mine to plant to sale: tonnes multiplied by grade, reduced by processing recovery and, where applicable, by contractual payability. Reserves are the economically mineable part of Measured and/or Indicated Resources after a mine plan, cut-off assumptions and modifying factors demonstrate technical and economic viability. Always read the reference point, units, recovery basis and economic assumptions before comparing a mining number.
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