Glossary

Mining and Mining Investment Terms

Acid mine drainage – Acidic run-off water from mine waste dumps and må

Adit – An opening driven horizontally into the side of a mountain or hill to provide access to a mineral deposit.

Aeromagnetic survey – A geophysical survey using a magnetometer aboard, or towed behind, an aircraft.

Alteration – Chemical changes in minerals occurring after a mineral is formed; typical of the reaction between mineralizing fluids and host rocks, and of the surface weathering of rocks. Common types (and their characteristic minerals) include albitization (sodium feldspar), argillization (clays), chloritization (chlorite), potassic alteration (potassium feldspar and biotite), propylitization (epidote), sericitization (white mica), and silicification (quartz).

Amorphous – A term applied to rocks or minerals that possess no definite crystal structure or form, such as amorphous carbon and obsidian.

Anomaly – Any departure from the norm which may indicate the presence of mineralization in the underlying bedrock.

Assay - A chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained.

Assessment work – The amount of work, specified by mining law, that must be performed each year in order retain legal control of mining claims.

Backwardation – A situation when the cash or spot price of a metal stands at a premium over the price of the metal for delivery at a forward date.

Balance sheet - A formal statement of the financial position of a company on a particular day, normally presented to shareholders once a year.

Base metal – Any non-precious metal (e.g. copper, lead, zinc, nickel, etc.).

Bench testing – Early laboratory-scale metallurgical testing to determine whether metal can be extracted from a mineralized sample.

Board lot – Normally, one hundred shares…sometimes 500 shares of a ‘penny’ stock.

Bond – An agreement to pay a certain amount of interest over a given period of time, and to repay the loan on its maturity. Assets are pledged as security.

Breccia – A rock in which angular fragments are surrounded by a mass of finer-grained material. Breccias may form by explosive volcanic action, by structural deformation (a “fault breccia”), by intrusive action (where the intrusive rock incorporates fragments of country rock), or by hydrothermal processes (where wall rock fragments are incorporated by vein material).

Bulk sample – A large sample of mineralized rock, frequently hundreds of tonnes, selected in such a manner as to be representative of the potential ore body being sampled. Used to determine metallurgical characteristics.

Bullion – Metal formed into bars or ingots.

Capitalization – A financial term used to describe the value financial markets put on a company. Determined by multiplying the number of outstanding shares of a company by the current stock price.

Carat – The standard unit of mass used for diamonds and other precious stones, equal to 0.2 gram. (The karat is a unit of concentration.)

Cash flow – The net of the inflow and outflow of cash during an accounting period. Does not account for depreciation or book-keeping write-offs which do not involve an actual cash outlay.

Chalcopyrite – A sulphide mineral of copper and iron; the most common ore mineral of copper.

Channel sample – A sample composed of pieces of vein or mineral deposit that have been cut out of a small trench or channel, usually about 10 cm wide and 2 cm deep.

Claim – A portion of land held either by a prospector or a mining company. In Canada, the common size is 1,320 ft. (about 400m) square, or 40 acres (about 16 ha).

Common stock – Shares in a company which have full voting rights which the holders use to control the company in common with each other. There is no fixed or assured dividend as with preferred shares, which have first claim on the distribution of a company’s earnings or assets.

Core - The long cylindrical piece of rock, about an inch in diameter, brought to surface by diamond drilling.

Crosscut - A horizontal opening driven from a shaft and (or near) right angles to the strike of a vein or other orebody.

Cutoff grade – A grade below which samples are not included in a resource or reserve.

Debenture – An indebtedness backed only by the general of the issuer and unsecured by a lien on any specific asset.

Debt financing – Method of raising capital whereby companies borrow money from a lending institution.

Deposit – A body of rock containing valuable minerals; usage generally restricted to zones of mineralization whose size has been wholly or partly determined through sampling.

Depreciation – The periodic, systematic charging to expense of plant assets reflecting the decline in economic potential of the assets.

Dilution (mining) – The necessary mining of waste rock along with ore in underground mining; the ratio of waste rock to the total amount of rock mined in a stope or mine, usually expressed as a percentage.

Dilution (of shares) – Diminution of share value through issuing shares or options to buy shares, which decreases the actual or imputed earnings per share.

Discounted cash flow – A technique for estimating the value and profitability of a project, based on the assumed revenue from production, capital and operating costs, and the potential return from a risk-free investment (the “discount rate”).

Drift – A horizontal underground opening that follows along the length of a vein or rock formation as opposed to a crosscut which crosses the formation.

EM survey – A geophysical survey method which measures the electromagnetic properties of rocks.

Epithermal deposit – A mineral deposit consisting of veins and replacement bodies, usually in volcanic or sedimentary rocks, containing precious metals or, more rarely, base metals.

Equity financing – The acquisition of funds by selling treasury shares.

Escrowed shares – Shares deposited in trust pending fulfillment of certain conditions, and not ordinarily available for trading until released.

Exploration – Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore.

Fault – A break in the Earth’s crust caused by tectonic forces which have moved the rock on one side with respect to the other.

Feasibility study – An economic study assessing whether a mineral deposit can be mined profitably, by estimating the capital and operating costs of a mine and the potential revenues from production.

Flotation – A milling process in which valuable mineral particles are induced to become attached to bubbles and float as others sink.

Flowsheet – An illustration showing the sequence of operations, step by step, by which ore is treated in a milling, concentration or smelting process.

Flow-through shares – Shares in an exploration company that allow the tax deduction or credits for mineral exploration to be passed from the company to the shareholder.

Fold – Any bending or wrinkling of rock strata.

Footwall – The rock on the underside of a vein or ore structure.

Fracture – A break in the rock, the opening of which allows mineral-bearing solutions to enter. A “cross-fracture” is a minor break extending at more-or-less right angles to the direction of the principal fractures.

Fully diluted (of shares or earnings) – Based on the maximum number of shares a company could have, including all shares that would be issued if convertible debt, rights, warrants and options were exercised.

Geochemistry – The study of the chemical properties of rocks.

Geology – The science concerned with the study of the rocks that compose the Earth.

Geophysical survey – A scientific method of prospecting that measures the physical properties of rock formations. Common properties investigated include magnetism, specific gravity, electrical conductivity and radioactivity.

Geophysics – The study of the physical properties of rocks and minerals.

Geothermal – Pertains to the heat of the Earth’s interior.

Gold loan – A form of debt financing whereby a potential gold producer borrows gold from a lending institution, sells the gold on the open market, uses the cash for mine development, then pays back the gold from actual mine production.

Grade – The concentration of metal or valuable mineral in a body of rock, usually expressed as a percentage or in grams per tonne or ounces per ton; also, the concentration of metal in a mill concentrate or matte.

Greenstone belt – An area underlain by metamorphosed volcanic and sedimentary rocks, usually in a continental shield.

Grey market – The market for securities that are not yet listed on an exchange or traded in a quotation system.

Gross value - The theoretical value of ore determined simply by applying the assay of metal or metals and the current market price. It must be used only with caution and severe qualification.

Heap leaching – A process whereby valuable metals, usually gold and silver, are leached from a heap, or pad, of crushed ore by leaching solutions percolating down through the heap and collected from a sloping, impermeable liner below the pad.

High grade – Rich ore. As a verb, it refers to selective mining of the best ore in a deposit.

Hydrometallurgy – The treatment of ore by wet processes, such as leaching, resulting in the solution of a metal and its subsequent recovery.

Hydrothermal – Relating to hot fluids circulating in the Earth’s crust.

Igneous rocks – Rocks formed by the solidification of molten material from far below the Earth’s surface.

Indicated resource – A resource whose size and grade have been estimated from sampling at places spaced closely enough that its continuity can be reasonably assumed.

Induced polarization – A method of ground geophysical surveying employing an electrical current to determine indications of mineralization.

Inferred resource – A resource whose size and grade have been estimated mainly or wholly from limited sampling data, assuming that the mineralized body is continuous based on geological evidence.

Initial public offering – The first sale of shares to the public, usually by subscription from a group of investment dealers.

Institutional investors – Pension funds and mutual funds, managing money for a large number of individual investors.

Kimberlite – A variety of peridotite, the most common host rock of diamonds.

Lamprophyre – An igneous rock, composed of dark minerals, that occurs in dykes; sometimes contains diamonds.

Laterite – A residual soil, usually found in tropical countries, out of which the silica has been leached. May form ore bodies of iron, nickel, cobalt, bauxite and manganese.

Leaching – A chemical process for the extraction of valuable minerals from ore; also, a natural process by which ground waters dissolve minerals, thus leaving the rock with a smaller proportion of some of the minerals than it contained originally.

Limit order – An order made by a client to a broker to buy or sell shares at a specified price or better.

Logging – The process of recording geological observations of drill core either on paper or on computer disk.

London Metals Exchange – A major bidding market for base metals, which operates daily in London.

Magnetic survey – A geophysical survey that measures the intensity of the Earth’s magnetic field.

Margin – Cash deposited with a broker as partial payment of the purchase price for any type of listed stock. The stock is held by the broker as security for the loan.

Massive sulphide – A body of rock made up of wholly or sulphide minerals, such as pyrite, pyrrhotite, or chalcopyrite; often proves to be an orebody. Also, a mineral deposit occurring in massive-sulphide form.

Measured resource – A resource whose size and grade have been estimated from sampling at places spaced closely enough that its continuity is essentially confirmed.

Mineral – A naturally occurring homogeneous substance having definite physical properties and chemical composition and, if formed under favourable conditions, a definite crystal form.

Net asset value – A corporation’s total assets, minus its total liabilities; also called “shareholder’s equity” or “book value”.

Net smelter return – The gross value of metal in an ore or concentrate, minus transportation, smelting and refining charges; a royalty based on a net smelter return value.

Option – An agreement to purchase a property reached between the property vendor and some other party who wishes to explore the property further.

Ore reserves – The calculated tonnage and grade of mineralization which can be extracted profitably; classified as probable and proven according to the level of confidence that can be placed in the data.

Outcrop – An exposure of rock or mineral deposits that can be seen on surface that is not covered by soil or water.

Over-the-counter market – The market in securities that are not traded on stock exchanges or through quotation systems.

Participating interest – A company’s interest in a mine, which entitles it to a certain percentage of profits in return for putting up an equal percentage of the capital cost of the project.

Periodic Chart of Elements – For those viewers not familiar with all of the elements’ symbols, the link below is a Periodic Chart:
http://www.webelements.com/

Placer – A deposit of sand and gravel containing valuable metals such as gold, tin or diamonds.

Raise – A vertical or inclined underground working that has been excavated from the bottom upward.

Recovery – The percentage of valuable metal in the ore that is recovered by metallurgical treatment.

Refractory ore – Ore that resists the action of chemical reagents in the normal treatment processes and which may require pressure leaching or other means to effect the full recovery of the valuable minerals.

Reserve – That part of a mineral resource that can be mined profitably.

Resource – The calculated amount of material in a mineral deposit, classified as measured, indicated, or inferred, based on the density of drill hole information used.

Royalty – An amount of money paid at regular intervals by the lessee or operator of a mining property to a lender or the owner of the ground. Generally based on a certain amount per tonne or a percentage of the total production or profits. Also, the fee paid for the right to use a patented process.

Solvent extraction-electrowinning (SX-EW) – A metallurgical technique, so far applied only to copper ores, in which metal is dissolved from the rock by organic solvents and recovered from solution by electrolysis.

Vein – A fissure, fault or crack in a rock filled by minerals that have travelled upwards from some deep source.

Zone – An area of distinct mineralization.