Hi 2Luke A$1,600 gold price for a Reserve today is ok. It means...

Hi 2Luke
A$1,600 gold price for a Reserve today is ok. It means the projected profits from the Reserve will be met if the gold is sold at 1,600, so if they are selling at a gold price of A$1,700 then profits will be an extra A$100 per ounce. So if they were making say A$300/ounce and then sell and get an extra 100/ounce then profits will be 33% higher than projected!! Happy days for all.

The 3D block model for the grade and tonnes estimate is comprised of lots of little blocks, in this case 5m x 5m x 2.5m. This is usually X x Y x Z or east x north x depth (thickness). They should have chosen the SMU based on what they think they can dig out with the digger(excavator) they intend to use. Also, the 5x5x2.5 is 62.5 cubic metres, which might be about the size of the truck they will use, others will have different opinions on this, but let's go simple. So for oxide ore the SMU will have a mass of about 130 tonnes, ie a truckload.

Mining dilution they are quoting is 5%, so they believe that when they dig the SMU, they will add 5% of waste (dilution) to the ore . So maybe for the SMU quoted above, they will add about 6.5 tonnes of waste, often at zero grade. Now 5% is low and suggests an oxide (no blasting) ore type or a very wide fresh rock ore, things get jumbled up when you blast fresh rock and dilution increases (although engineers try to minimise blasting dilution).
As an aside, they need to remember that the dilution added, 6.5 tonnes, has come out of the pit in the same truck as the ore, so it will be milled at a full cost for crushing and grinding, it is costing more now to treat the truck of ore. This has been accounted for in the Reserve process, so profits increase if dilution is less and profits decrease if dilution increases.

The 94% looks to refer to mining recovery, ie for the SMU discussed above they believe they will get 94% of the tonnes for that ore block. So this means that the remaining 6% probably goes to the waste dump.
You can never mine all of your ore, and the mining team of geologists and engineers and the earth moving contractor all work to minimise dilution and maximise recovery. The key to a mine meeting expectations is to use realistic numbers in the Reserve process that are achievable in the real world. It's easy and fatal to the project to massage numbers in an excel spreadsheet to make a profit and then not be able to do it on the ground.

Hope that helps