Gold resources and reserves: reading a KCMI or JORC report

A gold project is priced on one number: how much gold is in the ground, and how sure anyone can be about it. Reporting codes exist so that number means the same thing in every report. Indonesia has the KCMI code and Australasia has JORC. Both follow one international template, so their categories match.

The risk in a gold deal often sits in the gap between what a seller calls a deposit and what a code would let anyone call a resource. Reading the category correctly comes before any talk of price.

From samples to reserves

Exploration results are the raw evidence: outcrop samples, drill hole assays, geochemistry and geophysical surveys. A report at this stage can’t put a tonnage or an average grade on the mineralisation. The one exception is an exploration target. It has to be stated as a range of tonnes and a range of grade, it has to say the figures are conceptual and it can’t use the words resource or reserve.

A mineral resource is gold sampled closely enough to estimate, with reasonable prospects for eventual economic extraction. It isn’t every gram the drill hit. The KCMI code says that for most gold deposits “eventual” normally means 10 to 15 years, and often less.

A mineral reserve is the part of a resource that can be mined economically once the modifying factors are applied: mining, processing, metallurgy, infrastructure, economics, marketing, legal, environmental, social and government factors. Reserves come in two categories, probable and proved (some reports say proven), and they need at least a pre-feasibility study behind them.

Category	What it rests on	What it can support
Inferred resource	Limited sampling; continuity implied but not verified	More drilling. It can’t become a reserve until drilling upgrades it
Indicated resource	Enough data to assume continuity between samples	Mine planning and a probable reserve
Measured resource	Detailed data that confirms continuity	Detailed mine planning and a proved or probable reserve
Probable reserve	An indicated (sometimes measured) resource, with some uncertainty in the modifying factors	A decision to develop the deposit
Proved reserve	A measured resource, with high confidence in the modifying factors	The highest confidence the codes allow

Indonesia’s code and its competent persons

The KCMI code (Kode KCMI) is compiled by a joint committee of the Indonesian Association of Geologists (IAGI) and the Indonesian Association of Mining Professionals (PERHAPI). The first edition came out in September 2011. The 2017 edition took effect on 1 November 2017 and became mandatory on 1 November 2019. Indonesia joined the Committee for Mineral Reserves International Reporting Standards (CRIRSCO), which keeps the shared template, in October 2017.

Every figure in a code report has to rest on documentation that a Competent Person Indonesia (CPI) prepared or supervised and then signed. A CPI is registered with IAGI or PERHAPI, or belongs to a professional body the committee recognises, and that body can suspend or expel them. The code asks for at least 5 years of experience relevant to the type of deposit and to the work being done. Its own example says that estimating alluvial gold reserves probably needs at least 5 years with alluvial gold, because of how gold behaves in river sediment and the low grades involved (see alluvial gold).

A code report names its CPI, says whether that person works for the company and carries their written consent. The energy ministry leans on the same profession. A 2018 ministerial decree made a competent person’s validation of the reserve balance one of the conditions for approving a licence holder’s work plan and budget (Rencana Kerja dan Anggaran Biaya, RKAB).

How KCMI relates to JORC

Most of the KCMI code was adopted from the 2004 edition of JORC and later brought into line with the CRIRSCO template of 2013. The definitions and categories match, so a JORC report on an Indonesian project reads the same way. The 2012 edition of JORC was still the one in use in 2026. A revised JORC code went out for public comment in 2024 and was still being finalised in August 2026, so check which edition a report follows.

One trap is the report written for the government. An exploration report filed with the ministry may list all the mineralisation found, including material with no reasonable prospect of being mined. The KCMI code says figures like these don’t qualify as resources or reserves. A resource figure lifted from a statutory report and one from a code report can be very different numbers.

Red flags in a gold report

The committee behind the KCMI code has cited the Busang gold fraud in Kalimantan as a lesson. Most weak reports are less dramatic, and they share a few signs:

• No named competent person, no written consent, or a competent person whose experience is in another kind of deposit.
• Tonnes and grades with no resource category, or a “potential” tonnage with no report behind it.
• Headline grades from a handful of grab samples, rock chips or panned concentrates. The code calls isolated assays and selected surface samples, reported without context, unacceptable.
• A reserve with no pre-feasibility or feasibility study, or one that counts inferred material.
• An old estimate built on a gold price, costs or a cut-off grade that no longer hold.
• Drill holes too far apart for the category claimed, or a resource stretched well beyond the last hole.

Before you rely on a number

Ask for the full report with its Table 1, the code’s checklist of how samples were taken, assayed and checked. A summary or a slide deck can’t be tested.

Check the competent person’s registration with IAGI or PERHAPI yourself, and ask whether they visited the site.

Ask for the quality control data: the standards, blanks, duplicates and external laboratory checks that Table 1 covers. A report that can’t show them hasn’t earned its category.

Have your own competent person review the estimate, with a site visit and, where the stakes justify it, a few twinned holes. Check that the resource sits inside a valid licence area, as set out in buying into a gold mining licence. If the deal pays in stages, as an earn-in or joint venture often does, tie each payment to a category reached in a code report.