Going gaga about confidence without limits

If truth be told I didn’t really miss the 2000 Millennium celebrations of the Canadian Institute of Mining, Metallurgy, and Petroleum (CIM) and the Prospectors & Developers Association of Canada (PDAC). For the masters of ceremonies didn’t pine for my paper on Applied Statistics and the Bre-X fraud. Most CIM and PDAC members play the kriging game and talk about confidence without limits. Most scientists on this planet work with real statistics and real confidence limits. I work mostly with 95% confidence intervals (95% CI) and 95% confidence ranges (95% CR) for metal contents and grades of mined ores, mineral concentrates, mineral reserves and mineral resources. The world’s mining industry blathers about confidence without limits for mineral reserves and mineral resources. Yet it did accept confidence intervals and ranges limits for mined ores and mineral concentrates. So what’s all that talk about confidence? It should be about risk! The risks between trading partners seem to matter a lot more than the risks mining investors run. That’s the real story behind Bre-X!

I thought all along the Ontario Securities Commission (OSC) would lose confidence in all the mumbo jumbo that replaced the 1998 Interim Report of the Mining Standards Task Force. For I couldn’t find a single scrap of sound statistics in National Instrument 43-101 Standards of Disclosure for Mineral Projects. Here’s what happened on September 10, 2004. “We, the Canadian Securities Administrators (CSA), are publishing for a 90-day review comment period the following documents…” How about that! Did the CSA really plan to repeal and replace that National Instrument rubbish? Did the CSA want real statistics in its standards? Some of its objectives were to “correct errors”, and to “generally make the Current Mining Rule more user-friendly and practical.” Correct errors? Did CSA’s mining experts finally figure out how many variances went missing? Were variances of weighted averages about to make a comeback? Did OSC’s Chief Mining Consultant figure out who lost what and when? I did find the answers but nobody gave a hoot. So I stayed in the trenches and watched CSA’s rulers rule.

Patricia Dillon, CIM Guidelines Coordinator, met with the CSA in Edmonton on May 11, 2004. The objective of this formal annual meeting was to clarify the source of various documents and guidance that underpins Reporting Standards and Guidelines. I like that kind of stuff! The CIM Standing Committee on Reserve Definitions consists of a team of eleven ore reserve practitioners. Normand Champigny, the coauthor of A Study on Kriging Small Blocks and a leading activist of sorts against oversmoothing, brought all of his insights to CIM’s reserve definitions team. Champigny didn’t grasp the additive property of the variances of metal contents for blocks of in situ ore when he spoke on behalf of “five anonymous ore reserve practitioners in Canada and abroad.” He did so in Geostatistics: A Tool that Works (The Northern Miner, May 18, 1992) in response to my Geostatistics or Voodoo Science (The Northern Miner, April 20, 1992). It did work all too well at Bre-X’s Busang property! I wonder whether or not any of Champigny’s anonymous buddies in 1992 served on Dillon’s definitions body in 2000.

CIM Council on December 11, 2005 adopted CIM Definition Standards for Mineral Resources and Mineral Reserves. The term confidence played a prominent role in statements such as the level of confidence, a lower level of confidence, a high level of confidence, a higher level of confidence, the highest degree of confidence, insufficient confidence, the level of geoscientific confidence, different levels of geological confidence, and confident interpretation. Such is the verbose burden of confidence without limits. What happened with confidence intervals and ranges in ore reserve estimation? Who repealed 95% CIs and 95% CR’s? Ten pages of mind numbing text with rambling nuggets such as reasonable assumptions, acting reasonable, conceptional estimates, order of magnitude estimates, reasonable prospects, reasonably assume the continuity of mineralization, and reasonably assumed but not verified. Was Dillon’s waffling squad really thinking?

It was easier to meet my Member of Parliament and talk about geostatistical data analysis of shellfish counts along a coastline than it was to meet Deborah McCombe during her trip to Vancouver and talk about real statistics. She granted me one hour of her time on January 22, 2005. We met at the office of the BC Securities Commission in the presence of Dr Gregory J Gosson, BCSC’s Chief Mining Advisor. I talked about the lost variance of the distance-weighted average, and why it should not have gone missing when the distance-weighted average was reborn as an honorific kriged estimate. I used Clark’s hypothetical uranium data to show how to test for spatial dependence in her sample space, and when the distance-weighted average converges on the arithmetic mean and its variance on the Central Limit Theorem. I also showed what happens when ore was inferred between Bre-X’s salted holes, and what happens when interpolation positions kriged holes between salted holes. There were no questions either during our meeting or thereafter.

BCSC’s former Chief Mining Advisor and OSC’s former Chief Mining Consultant present a $350 workshop at the University of Alberta Campus on Saturday, May 3, 2008. Nowadays, Deborah McCombe is the executive vice-president, Scott Wilson Mining Group, and Greg Gossan is the technical director of geology and geostatistics, AMEX Mining and Metals Consulting Group. They will talk about matters ranging from Setting the regulatory scene to Case studies of what went wrong. What Gossan and McCombe will not talk about is when Agterberg fumbled the variance of the distance-weighted average, and why it is too late to reunite them. For the name of the exploration game is to look forward with confidence without limits rather than take a step back to figure out what is really wrong with geostatistics. Geostatistical data analysis of shellfish counts in samples taken along a shoreline at 1-km intervals may kill the kriging game. The Harper Government may well agree that mineral reserves and mineral resources in annual reports and populations of shellfish along Canada’s shorelines should all be reported with unbiased confidence intervals and ranges.

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