43-101 issues
NI 43-101 puts a fair amount of legal liability on the Qualified Person preparing a resource or reserve estimate.  The QP is to stand behind the accuracy of their work and take legal responsibility for it.
Every so often some new mining software comes along and I often wonder what are the risks in using it? Some examples of new mining software that I have heard about (but not personally used) nor have seen mentioned in any 43-101 studies are SimSched, the ThreeDify’s software packages, and Bentley.

Is the software doing everything correctly?

Given that as a QP I am legally responsible for my work, I am  bit apprehensive about how I can be assured the new software will provide reliable and accurate results for which I accept legal liability.  The last thing I would want to do is issue a public technical report which is found to be in error due to a software bug.
Irrespective of 43-101, if you are working at a mining operation the last thing you want to do is present management with an incorrect reserve, pit design, or production plan.
If you are a consultant, how agreeable will your client be when you tell him that his study was done using a novel software package and not one of the industry standard packages?
I recall working with a major mining company and there was a reluctance to adopt any new software that was unproven and not an industry standard.  The company had no issue with buying the software nor paying the annual maintenance fees for the license. the concern was the risk in using it.

What if you have a limited budget?

How do you feel about new software if you are a mining company or consultant with a limited budget?   The new software may be cheaper, may appear to be be great, and may be a technological improvement all at a lower cost.  However the software risk still remains.   There is no guarantee that all software output is correct simply because it comes from a computer.
As a QP, I suggest the onus is on the software developers to demonstrate that they can produce reliable and comparable results under all conditions.  They need to convince future users that their software is accurate.
Perhaps over time the new software will gain wider adoption.  We may see more 43-101 reports that use it and hence it will get more overall acceptance.
When developing a new market for new software is it a better to foster more consultant adoption or more mining company adoption?
Will mining companies use the software if their consultants are using it, or will consultants use it if more companies adopt it?  It’s an interesting discussion that new software vendors must deal with in trying to grow their market share.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
Share

2 thoughts on “New Mining Software and 43-101 Legal Issues

  1. Fred

    We are also faced with a plethora of “bigger and better” methodologies, all available at the touch of a button. Localized kriging, machine learning, implicit modeling, etc. While some are useful, a lot of these seem to be pushed by consulting firms advertising the next big thing. Nothing yet replaces time spent at the face, collecting data and making sure the basics are right, but more and more emphasis is being put on modeling in the office.

  2. Ken Kuchling Post author

    Good point Fred. Just because it is generated by a computer doesn’t mean its correct.

Leave a reply

required