🫵 The plot Conservative practices contribute to substantial economic inefficiencies in the mining sector. Industry-wide impairment losses exceeded $120 billion during the 2013/14 commodity downturn, with resource and reserve estimation issues identified as contributing factors in 17% of feasibility study failures. McKinsey estimates $100 billion in potential value optimization across mining feasibility studies, with resource classification standards identified as one element requiring improved rigor. 🫵 The dirty little secret Ore deposit valuation hinges on robust reserve estimation, yet prevailing mining standards conflate geological confidence with grade uncertainty, leading to conservative biases and undervaluation. Geostatisticians often downgrade resources by focusing on local grade variability, ignoring geological reliability established in Indicated Resource classifications resulting in reduced reserves, deterring investment despite solid deposit foundations. The evaluation and valuation of ore deposits too often undermined by the conflation of geological confidence with grade uncertainty. 🫵 The gatekeepers labyrinth The classification of mineral resources and reserves has long struggled with this in both resource management and deposit valuation. Current practices, under the CRIRSCO umbrella, geostatisticians override established geological assurances based solely on grade variability, resulting in unnecessary reductions in reported ore reserves. Decoupling these risks and employing statistical confidence intervals, mining can preserve reserve estimates, capture upside potential, and enhance valuation accuracy. 🫵 Clear precedent The petroleum industry's Proven-Probable-Possible framework (PRMS), assigns explicit confidence intervals to reserve estimates without abandoning sound geological interpretations. The framework addresses both mineral resource classification requirements and deposit valuation imperatives, recognizing that classification decisions directly influence market valuations, access to capital, and investment returns. Such an approach recognizes that resource classification decisions directly impact deposit valuations, making the conversion of Mineral Resources Reserves relevant to the valuation of Mineral deposits. Ignoring this risk conflation attracts opportunity costs and consequential economic harm to investors because undervaluation of projects of well-understood deposits that receive inappropriate classification due to statistical limitations rather than geological uncertainty can be significant. Downgrading resource categories invokes different valuation multiples in market assessments resulting in poor market valuations that impede access to capital and capital formation. The misallocation of Mineral Resources can trigger the requirement for severe impairments charges that qualified persons seem aloof to.