Mine Engineering Versus Corporate Objectives

The purpose of this paper is to translate a mining company's "Corporate Objectives" into usable and practical guidelines for long term mine design and production scheduling. These guidelines are required to ensure that both operating and development properties are designed and economically ranked on the same basis, and with the "current" Corporate Objectives in mind. Secondly, if both management and mining engineers have a better understanding of the cause and effect of corporate policies, then penalties and risks associated with various Corporate Objectives can be put into better perspective for management. Corporate Objectives, relative to usable guidelines for either short and/or long term mine planning, could be defined as one or more of the following four objectives: 1) Maximize the recovery of the economic portion of the defined geologic resources, and hence, maximize total non-discounted project cash flows and profits (most common approach in mine design), 2) Maximize the Net Present Value (NPV) of the after-tax cash flows from each existing or proposed project, either on an individual basis or in concert with other projects, including downstream processing facilities (primary method used to judge relative investment merit of a proposed development or operating concept), 3) Limit short and long term capital expenditures to a defined ceiling, 4) Maximize product output for the existing facilities in the short term, or conversely, keep commodity production at a constant level for a series of years.