The "how to" of cost estimating CostMine shares the building blocks

Shortcut methods are commonly employed for estimating mining costs for prefeasibility studies. Most of these methods, however, are suitable for earliest stage studies or for internal discussion purposes only. The experts at InfoMine?s CostMine division recommend that any cost estimate completed for purposes of significant decisionmaking or for compliance with Canada?s NI 43-101 requirements be completed using a determinative itemized method. The same basic principles apply for an early stage, intermediate stage, or advanced stage estimate. The only difference is in the level of detail and effort employed. ? Based on the results of a completed resource estimate, an itemized cost estimate begins with development of a conceptual mine plan. Using a surface mine as an example, four elements are crucial no matter what level of study is initiated. Basic geometry of the ore deposit and waste material, with a determination of the expected ratio of waste to ore, a reasonable pit slope angle, possibly requiring the completion of geotechnical studies to predict the waste-to-ore ratio with certainty. ? Determination of the assumed ore and waste production rates. ? Locations of all ore stockpiles and waste dumps. ? Segmental haulage distances and gradients for ore and waste.