Assay

AAA

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.

RELATED TERMS
  1. Precious Metals

    A classification of metals that are considered to be rare and/or ...
  2. Basis Grade

    The minimum accepted standard that a deliverable commodity must ...
  3. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  4. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  5. Vault Receipt

    A document frequently used as a delivery instrument to indicate ...
  6. Underlying

    1. In derivatives, the security that must be delivered when a ...
Related Articles
  1. Commodity Prices And Currency Movements
    Forex Education

    Commodity Prices And Currency Movements

  2. Using Technical Analysis In The Gold ...
    Investing

    Using Technical Analysis In The Gold ...

  3. Strike Gold With Junior Mining
    Economics

    Strike Gold With Junior Mining

  4. Futures Fundamentals
    Insurance

    Futures Fundamentals

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center