question over a definition

Serious question to anyone with mining knowledge. Does anyone know the difference between a deposit that is "Measured, Indicated and Inferred" and one that is just "Measured and Indicated"??? If their is little or no difference between the two definitions then the following is food for thought.

I read with interest Xstrata's comments today about "approaches" (note the use of the plural)that they have received to sell their 70% holding in a Cu/Au mine called El Morro located in South America. The figure quoted was $700Mil (I assume that is USD not AUD). Their website states that the measured and indicated resource of Cu is 489Mil tons grading at 0.59% along with 0.52 grams per ton Au The same website states that the Tampakan figures are for a resource that is "Measured, Indicated and Inferred" of 2.2Bil tons grading at 0.6% as well as 0.2 grams per ton of AU.

The higher Gold content for El Morro will obviously make their production costs cheaper (no idea what they are at El Morro) but in the scheme of things if Cu stays at or above current levels it almost becomes secondary what their cost of production is - refer back to previous posts to see the impact on the bottom line that production costs have.

Therefore, if (and I stress "If") these negotiations proceed at these sorts of figures it puts a very different slant on what their holding in Tampakan is really worth. If (very very roughly) a 350Mil ton resource is worth US700Mil (Xstrata only own 70% of the project) that equates to $2 per ton then arguably IRN's share of a 2.2Bil ton resource should be worth USD1.54Bil (AUD1.83Bil) or AUD4.65 per IRN share!!!!!!!!!!!!!!!!!!

The actual numbers and valuation will no doubt differ wildly but given that 2 out of 4 input variables (Cu price and cost of funds) are the same for both projects you would imagine that the economics are reasonably similar. Maybe the costs of setting up the mine are less at EL Morro than for Tampakan (given the size differnces) and maybe their production costs are close to zero when their gold credits are taken into consideration.

But still -------------------------- Could anyone afford to pay $1.28 for an asset that, based on the above figures, is worth considerably more.

Worth some more research time in my book.