Raymond J. Goldie, Ph.D.
Independent Analyst and Director
Talk Abstract:
A Net Smelter Return (NSR) is the net revenue generated by a block of mineralization, less offsite costs. Three procedures for computation of the NSRs of Ni-Cu-PGE sulphide mineralization are in common use: values calculated by accountants; mine-specific estimates, constructed by mine operators, and “soft estimates”.
Soft estimates of NSRs are useful in representing assays of samples taken during exploration. Their computation is based on statistical analyses of ore grades, metallurgical properties and smelting and refining terms of operating Ni-Cu-PGE mines.
There are three reasons why exploration geologists should express assays of samples as soft estimates of NSRs: (i) representing each assay as a single number facilitates their graphical representation, such as on contour maps; (ii) the computation of soft estimates may reveal that, as is common in mineralization that is rich in PGE, the mineralization contains substances or has mineralogical issues that could lead to a smelter penalizing or even rejecting a potential mine’s products; (iii) presentation of assays as single numbers not only facilitates their comprehension by investors, but should also reduce the chances that readers of company press releases apply invalid rules-of-thumb to them, resulting in poor investor relations and expensive misunderstandings.
Speaker Bio:
Dr. Goldie holds a Ph.D. in geology from Queen’s University, and has, for most of his career, been a mining analyst, which he now practices as an independent consultant. In his first job in this role, he tried to reverse-engineer Pine Point Mines Ltd.’s income statements, starting with the top line, Revenues. But the revenues that the company reported were consistently less than 50% of his estimates. Then a kindly accountant pointed out that those top line numbers are not gross revenues, they are Net Smelter Returns, or NSRs. After some years of figuring out how to calculate NSRs, his fellow-member of the TGDG Executive Committee, Patricia Sheahan, helped him to publish a paper on NSRs in “Ore Deposit Models”, a textbook of the Geological Association of Canada. Since then, he has continually kept that paper up to date, and it is the basis for his presentation to the TGDG in November 2024.
Raymond Goldie | LinkedIn
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