Resources, Reserves and NI 43-101: How Lithium Is Measured Underground

Why "There's Lithium" Isn't Enough

That a salt flat contains lithium is just the starting point. The question an investor, a bank or a mining company asks is not whether the resource exists, but how much there is, with what degree of certainty, and at what cost it can be extracted. Without that precision, any figure is a promise without backing.

To prevent companies from overstating their potential —a recurring issue throughout mining history— the sector adopted international reporting standards. These frameworks require geological information to be classified by confidence level and demand that a qualified professional sign off on and back every published figure. In practice, they are the common language between geology and finance.

JORC, NI 43-101 and the CRIRSCO Codes

NI 43-101 is the Canadian standard, mandatory for companies listed on the Toronto exchanges (TSX and TSX-V), where much of the world's junior mining is financed. JORC is its Australian counterpart, tied to the Sydney exchange (ASX). Both belong to the family of codes aligned under CRIRSCO, alongside South Africa's SAMREC and others, allowing criteria to be comparable across jurisdictions.

The key difference of these standards is not only technical: they introduce legal accountability. An NI 43-101 report must be signed by a "Qualified Person" —a geologist or engineer with recognized experience and credentials— who is responsible for the methodology used. This turns the document into an auditable piece, not corporate marketing.

Inferred, Indicated and Measured: A Scale of Confidence

A mineral resource is a concentration of lithium whose extraction has reasonable prospects of being economic. It is subdivided according to how much we know about it. The inferred resource carries the lowest certainty: it is estimated from few drill holes and limited geological data, so it helps guide exploration but is not enough for final investment decisions.

The indicated resource relies on a denser sampling grid, allowing tonnage and grade to be estimated with reasonable confidence. The measured resource carries the highest confidence: the information is sufficient to confirm geological continuity and grades. As one moves up this scale, uncertainty decreases and the cost of obtaining the data rises, since it requires more drilling, pumping tests and laboratory analysis.

From Resource to Reserve: When Economics Comes In

Reserves are the portion of the resource shown to be extractable profitably under realistic conditions. Geology alone is not enough here: so-called modifying factors must be applied —lithium price, operating costs, metallurgical recovery, permits, infrastructure, environmental and social factors. Only indicated resources can become probable reserves, and measured ones become proven reserves.

This distinction is decisive. A project may announce a huge resource and still hold modest reserves if costs or recovery don't add up. That's why reading a technical report requires looking at both the total resource and the fraction effectively converted into reserves, along with the price assumptions used.

Why Investors Read These Numbers Before Committing Capital

Mining finance moves in stages, and each one is unlocked by a technical milestone. A PEA (preliminary economic assessment) based on inferred resources serves to attract early-stage risk capital. A prefeasibility or feasibility study, supported by indicated and measured resources and by reserves, is what enables bank financing and the construction decisions that mobilize hundreds of millions of dollars.

For the investor, classification works as a risk traffic light. A project dominated by inferred resources is an exploratory bet; one with proven reserves and a robust feasibility study is a quantifiable asset. That's why, before any capital round, the first thing audited is the quality and backing of these numbers.

Argentina's Puna Under the Standard's Lens

In the Argentine case, lithium is mainly hosted in brines from high-altitude salt flats in Catamarca, Salta and Jujuy. Measuring a brine resource has its particularities: it is not rock with a fixed grade, but a fluid with concentrations typically ranging from hundreds to more than a thousand milligrams per liter, requiring porosity tests, pumping tests and hydrogeological modeling to estimate how much lithium is actually recoverable.

Argentina, today the world's fifth-largest producer and with cost-competitive projects in the Puna, depends on these reports to attract international capital —even more so under the incentive framework in place since 2024. When evaluating a local project, it's worth reading the full NI 43-101 or JORC report: distinguishing resource from reserve, reviewing price assumptions and checking who signs as the Qualified Person. That reading, more than any press release, is what separates a solid opportunity from an expectation without substance.