What Is an Assay?

An assay can test a metal or ore sample to determine its ingredients and quality. The term assay is also used in the environmental, chemical, and pharmaceutical sectors. Metals used to meet delivery terms of futures contracts in the 澳洲幸运5官方开奖结果体彩网:commodities market are assayed to ensure they meet the quality and purity requirements mandated by the exchange.

Metals Testing

Assays quantitatively determine the amount of metal in a particular sample and are generally perfor𝓡med ꩲby wet or dry methods. 

• Fire Assay: The most common technique for analyzing 澳洲幸运5官方开奖结果体彩网:precious metals developed before the 15th century. It is used to determine gold and silver within a sample. Mining companies, analytical laboratories, universities, and geochemical exploration companies depend on this technique to produce accurate results. In this method, the sample is mixed with a flux such as borax or silica and heated to the point where impurities in the metal fuse with the flux, leaving the purified metal as a residue.
• Wet Chemistry: Wet chemistry lab techniques include colorimetry, gravimetry, and titrimetry, which may filter, distill, or dissolve samples to extract metals. Chemical analysis is the conventional method of element analysis using laboratory beakers and flasks to manipulate a sample to identify a single element. When refining for gold, a gold-bearing scrap is dissolved. The gold solution is then filtered and a reducing chemical is added to selectively change the gold chloride into solid gold particles and leave the other metal chlorides unchanged and in the solution.
• Instrumental Analysis: Energy-dispersive X-ray fluorescence (ED-XRF) and optical emission spectrometry (OES) are non-destructive and non-invasive analytical methods for solid, liquid, and powdered samples. Both provide detection limits at low levels and can measure concentrations of multiple metals.
  

What Assays Tell Investors

The information gleaned from assays can impact financial markets❀ in various ways. A mining company whose late🔯st assay indicates large quantities of high-grade ore may see its stock price escalate. Medical assays showing the likely development of a new drug therapy or vaccine can be equally positive on the stock price of a pharmaceutical company.

Assay results provide an early indication of the potential value of a mineral or ore body, and therefore they are closely monitored by investors in mining companies. An exceptional assay result can trigger a sudden sharp rally in a company's stock that holds the mineral rights.

In medicine, an assay may determine the presence of a particular substance and its concentration. An "immunoassay" may be conducted on a vaccine, to determine its effectiveness or potency in preventing illness. Medicine uses assays to assess exposure to viruses like AIDS, detect certain sexually transmitted diseases, and work with thyroid hormones.

Metals Futures Market

Futures market rules will set specifications for acceptable or "deliverable" precious metals that meet the exchange's rules for delivery. Precious metals are traded in bars. The primary markets for precious metals are in London and the CME Group's markets in the United States.CME rules state that precious metals can be delivered "directly from an approved assayer with the assay certificates." The CME provides a list of approval assayers for its members and persons trading on the Exchange.

Bars acceptable for delivery range in size from as much as 1,000 troy ounces for some silver bars to 100 troy ounces. Some bars are measured in kilograms and taels, a Chinese unit of measure for precious metals. Traders who take direct ownership of precious metals, instead of receiving warehouse certificates indicating that the bars owned by that individual are held at that warehouse, must secure transportation, and insurance.

Futures exchanges typically specify the metal's quality for delivery in the contract market rules for that metal. For example, the CME Group, which lists gold futures on its trading platform, requires a minimum fineness of 995, or 995 parts per thousand, for delivery in the COMEX gold futures. For platinum, the minimum fineness is 99.95%.

Assay Example

Assay results can move prices for mining and exploration companies. The movement results from the potential for future produꦆct demand and earnings growth or a reduction in the same from poor assay results.

In 2020, Thor Mining, an Australian mining company, saw its stock price rise after it reported that high-grade gold sediments had been found at its Pilbara Goldfield Ragged Range project in Western Australia.

Some of the gold was graded higher than two grams per tonne. Further testing showed four distinct clusters of consistently high-grade gold. Its stock price also rose following the confirmation of the discovery of high-grade tungsten at another project.

The Bottom Line

An assay tests a substance to determine its ingredients and quality. The technique is used in the precious metals, environmental, chemical, and pharmaceutical sectors. Typical methods include fire assay, wet chemistry, and instrumental analysis.