Definition of 'Assay'
The process of analyzing a physical sample to determine its composition. In financial markets, the term assay usually refers to the chemical analysis of a mineral or ore sample to ascertain its content of precious metals or minerals, such as gold, copper, or uranium. These samples are obtained from drill holes made in a mineral or ore body, or property that is being evaluated for its metal or mineral content by a resource exploration or production company.
Investopedia explains 'Assay'
Since assay results provide an early indication of the potential value of a mineral or ore body, they are closely monitored by investors in junior resource companies, which are typically small-capitalization stocks. An exceptional assay result can trigger a substantial rally in the stock of a company that holds the mineral rights over the property. Conversely, poor assay results may lead to a significant decline in a stock that has run up on speculation about promising results.
In the futures markets, metals that are used to meet delivery requirements of futures contracts must be assayed to ensure that they meet the stringent quality and purity requirements mandated by the commodity futures exchange.