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DCF Valuations are very important to individuals and companies involved in the mining industry. Such valuations are critical to investment decisions in relation to new and existing projects. In particular they provide fundamental information to shareholders in the event of a capital raising or takeover and to financiers supporting mining companies and projects. Also, DCF Valuations are often used to support asset carrying values in the financial statements of mining companies. This paper presents a Chartered Accountant's (CA's) perspective on the main issues to be considered in preparing, analysing and relying upon DCF methods in mineral valuations and provides some practical examples relating to key issues. The paper makes the important point that DCF methods involve making assumptions about future events and circumstances that inherently contain uncertainty which results in a valuation prepared on a DCF basis providing a range of values that are not perfect or accurate. In order that DCF valuations provide meaningful information the underlying methodology used and assumptions made must be consistent, sound and well supported. Credibility of those involved in preparing mineral valuations is vital and this paper supports the adoption of sound practices by all concerned.

Jan 1, 1994

By P Wood

Loy Yang Power (LYP) owns and operates a 2160 MW brown coal fired, base load power station in the Latrobe Valley, Victoria, Australia (Loy Yang A). It also owns and operates a brown coal mine that supplies fuel to its own power station and a nearby 1000 MW power station owned by International Power (LoyYang B). The mine supplies 32 Mt of coal per annum from an open pit, which is currently about 4 km long by 2 km wide and 180 m deep. LYP has 500 employees and a substantial amount of work is also carried out by contractors and consultants. GHD Pty Ltd(GHD) has been contracted to provide mine planning and earth sciences expertise. GHD is an international professional services company that operates globally in many market sectors including mining, industry and the environment. The company has major offices in Melbourne and also within the Latrobe Valley. This paper sets out the experiences that GHD and LYP have gained in establishing a unique alliance arrangement for GHD to provide a range of mine planning, earth science, dam surveillance and environmental services to LYP. The underlying philosophy of the alliance is to closely align the objectives of the two companies such that GHDÆs recompense for service delivery is proportional to the benefit achieved by LYPÆs business. Quality of service, whole of life costs and risk management are important aspects and are reflected in key performance indicators against which GHDÆs performance is measured. Currently GHD provide 20 000 hours of labour to LYP per annum, which are delivered by up to 120 staff who possess the required diversity of skills. The paper explains how the contract was initially let as a conventional service agreement and explains why the contract was transformed into an alliance. It then illustrates the operation of the alliance with reference to the 2006 work program. The paper concludes with thoughts on how the arrangement can be further developed for the future to the benefit of both parties.

Jan 1, 2006

Many aspects of best practice resource evaluation do not create value, but poor practice can certainly destroy value. Generally companies prefer to present how their good practice adds value and for this reason few publications exist on examples of how poor practice can destroy value. However in big and small companies there are many previous and current examples of poor practice destroying value. The incremental expenditure required to move from poor practice towards best practice can be looked upon as insurance against destroying shareholder value. Examples of how poor practice in geology has destroyed value are presented as well as the improvement model used by BHP Billiton to add value and insure against destroying value.

Jan 1, 2002

Optimum selection of explosives by means of monitoring explosive performance can lead to increased profitability through the control of fragmentation, a reduction in hangingwall and footwall damage and overall drill and blast costs. Studies conducted at the Mount Lyell Mining and Railway Company underground copper mine evaluated in situ the performance of four explosive types. Measurements included monitoring the levels of induced shock energy and the attenuation thereof with distance. The velocity of detonation (VOD) of these explosives was also measured using in-hole techniques. Assessment of these results, together with a knowledge of the rock mass strength, facilitated the selection of an explosive that was best suited to the given rock mass conditions.

Jan 1, 1995

Diversity; what a wonderful topic. Diversity; the condition or quality of being diverse, different, varied to the point that the very word diversity means different things to different people. As one example of diversity the American Science Magazine (April, 1994) contained a light-hearted interview with Dr Noitall who was pushing his case for diversity.

Jan 1, 1996

By D O. Hayba

Metal-rich slurries discharged from excess-enthalpy geothermal wells at Kawerau (NZ) indicate that an efficient ore precipitation mechanism operates in some feedzones. In our conceptual model, which takes into account the relative permeabilities of liquid and gas phases in boiling fluids, a metal-precipitating liquid phase is effectively immobilised along boiling fronts, leading to the formation of highly concentrated ore. Chemical equilibrium and heat/mass transport modelling demonstrate the general applicability of this conceptual model to hydrothermal eruption environments.

Jan 1, 1995

Companies involved in the mining industry are exposed to risks, referred to as corporate risks, as part of the business process. Directors and management should be aware of these risks and make appropriate business decisions to address each risk. If business risks are not addressed on a timely basis the consequences are likely to be serious and will adversely impact the ultimate success of the business.The key corporate risks are:Poor cash flow and treasury management. ò Incompetent or unmotivated staff.ò Poor product quality.ò Accounting systems that do not provide meaningful and timely information.ò Computer system deficiencies. ò Ineffective credit screening.ò Assets not adequately protected.ò New ventures undertaken that are either inappropriate or not adequately researched.Exposures to corporate risk should be dealt with by Directors and management by systematically identifying major risk areas and implementing appropriate internal and management controls to deal with such risk areas. Proper management controls and procedures include the setting of overall corporate objectives and policy, monitoring adherence to such policy, establishing early warning systems to highlight problem areas and maintaining security over assets.

Jan 1, 1990

By R J. In, C Moore, P J. Moffitt, T Hansen

Telfer Gold Mine combines a world-class gold and copper resource and longevity of operation as a major gold and copper producer. Telfer Gold Mine has undergone a series of transformations since mining commenced as a high-grade narrow-vein oxide open pit operation in 1977. In 1986, the open pit operation converted from a narrow-vein, high-grade operation, to a low-grade high-volume oxide mining operation utilising dump leach processing technology. Mechanised underground mining of the high-grade narrow-veins commenced in 1990. Total recovered gold production between 1977 to 1999 has totalled 5.7 million ounces. The Telfer Extension Project consists of two pre-feasibility studies, the Surface Extension Project (SEP) and the I-Series Project (ISP). The combined studies represent one of the more significant resource evaluations undertaken in the gold industry in recent times. Geological activities for the SEP pre-feasibility study have included the drill definition of a large low-grade resource within an area of 25 km2 . The surface drilling program has completed 15 000 metres of HQ3 diamond drilling and over 30 000 metres of RC between last quarter of 1998 and late-1999. The ISP pre-feasibility study is currently evaluating the resource potential of both a high-grade low-volume and a lower grade bulk mining scenario, 800 m to 1200 m below the surface of Main Dome. 15 000 metres of underground diamond drilling have been completed between last quarter of 1998 and August 1999 as part of this study. Systems and cultures have been developed to maximise safety, monitor the quality assurance/quality control (QA/QC) on all aspects of the operation, and minimise impact on the environment. All data are stored in database systems, specifically designed for Telfer operations. 3D geostatistical resource estimation using ordinary kriging has been carried out for over 220 geological domains within the 25 km3 of mineralised system. Non-linear geostatistical techniques are being investigated as part of the pre-feasibility study.

Jan 1, 2000

By R Harding, T Hunt

For the past 120 years, Portland cement manufacture has been undertaken on the shores of the Whangarei Harbour in northern New Zealand. Through a serendipitous conjunction of geo-chemistry, the argillaceous marl found on Limestone Island in the harbour and Tikorangi Hill provides a perfect mix of the various elements required for strong and durable cement. Golden Bay Cement, and its predecessors, have been the guardians and managers of the use of these minerals. As the demands of the concrete industry have increased, so have the needs of the manufacturing process. Careful mapping of the resource at both Portland and Wilsonville Quarries has been undertaken. This has allowed the Company to change the Quarry operation from a purely volume basis to one of selection and blending of constituent minerals. Within the manufacturing process, change has also been introduced. Analytical techniques, using x-ray fluorescence spectrometry, microscopy and the application of modem data collation, has allowed fine tuning of the process. The Company now produces an increasing diverse range of products for both the domestic New Zealand market and exports to various South Pacific countries. This paper discusses the processing of limestone and æcement rockÆ into cement clinker, an intermediate synthetic mineral ground into cement. It examines control and blending regimes, and some methods used in determining process efficiency. An important technique ærediscoveredÆ has been the application of microscopy to clinker.  Examination of the major silicate minerals enables interpretation of the kiln processing and feedback to process operators. It also enables a prediction of indicated performance when ground into cement. Examples this paper give an insight into the use of minerals from Northland in some of the more important construction projects in modem New Zealand.

Jan 1, 1999

By Porter I

Rock mass classification systems have emerged as a powerful tool which can be used for assessing ground conditions and determining support requirements in underground mines. They should not be used as a substitute for complete engineering design, but rather as a supplement to observational methods and analytical study. In general, the use of rock mass classification is attractive, but each classification system has various deficiencies. Use of any particular system should be made only with knowledge of that systems limitations. It is desirable to employ a number of systems and design methods which will allow for comparison and lead to a better understanding of the rock mass condition.The Rock Mass Quality system (Q-System), developed by the Norwegian Geotechnical Institute, and the Rock Mass Rating (RMR) System, Bieniawski, were designed primarily for civil engineering structures. Laubscher et al (1978) further developed the RMR-system specifically for rock mechanics engineering in the mining industry. A method of stope design, which introduces a stability factor for the rock mass and compares this with hydraulic radius, was developed by Mathews et al (1981). This paper reviews the above systems by applying them to stability assessment of crown pillars in two Australian metal mines and provides a critical analysis of the various approaches. In particular each system will be analysed to determine its suitability for use in crown pillar design. The most suitable system(s) will form the basis for future development in crown pillar stability analysis.

Jan 1, 1994

By H Peiming, W Sakurai, Y Matsuhisa, H Shimazaki, Y Fukahori

Oxygen and carbon isotope mapping of hydrothermally altered wall rocks was applied to the blind ore prospecting of skarn Pb-Zn deposits in the Kamioka mining district, centralJapan, where the wall rocks consist of heterogeneous rock units. The results (d18OSMOW of -1.1 to +17.3ë and d13CPDB of -5.0 to +4.8ë for limestones, and d18OSMOW of -0.8 to +12.5ë for silicate rocks) show isotope zonations of the wall rocks with depletions in heavy isotopes (18O and 13C) toward the centre of mineralization. The isotope zonations likely formed by interaction of migrating thermal waters with the wall rocks during the mineralisation. The heavy-isotope depleted zone, which indicates higher temperature or higher water-to-rock ratio of the system, occurs in the footwall of a fault, indicating that the fault played the role of main conduit of the ore-forming fluids. A heavy-isotope depleted zone was also found in an area, where significant mineralisation had yet to be identified. Recent drilling in this area has intercepted a zone with a grade of 16.0% Zn, 0.8% Pb, and 35g Ag per metric tonne at a depth of about 360 m.

Jan 1, 1995

The individual or company director who ignores his or her obligations under the Resource Management Act 1991 and under the proposed hazardous substances legislation, ignores them at their peril. Two recent cases in Canada and the United Kingdom concerning environmental offences under similar legislation illustrate the risks well.

Jan 1, 1993

The role of government and the community has changed significantly over the last two decades in relation to environment protection, particularly in the mining sector. Increased community expectations have moved well ahead of regulatory requirements, and there is now a much greater appreciation generally of the concepts of ecologically sustainable development and intergenerational equity, and the gap between current practice and practices which would be in harmony with these concepts. Besides providing a `safety net' through regulations to ensure that basic environmental performance standards are met, government is now working proactively with the mining industry to encourage higher levels of environmental performance. This paper describes some initiatives between the Commonwealth government and the industry designed to achieve these higher levels of environmental performance, through programs aimed at the paradigms of best practice environmental management and continual improvement.

Jan 1, 1997

If you are to be and remain competitive in the mining industry, it is vital that your company management systems are efficient. An integral part of today's competition in a ruthless market is to keep internal costs to a minimum. Integrating our core and parallel management systems is becoming an essential strategy to ensure efficiencies are maintained to the highest level, allowing the maximisation of profits, and to maintain that leadership status within our industry. The uniquely designed Integrated Management Process provides the path to develop, implement, and monitor an Integrated Management System in a simple but highly efficient and effective manner.

Jan 1, 1997

Inevitably the 'post-boom' era has changed the emphasis of many mining companies away from new project development and expansion to optimisation of existing operations. However, regardless of the project, high quality ore characterisation will remain of the utmost importance. In the case of new project development the need to understand the breakage characteristics will remain as important as it has always been. In optimisation projects, however, where it will be required to get the very best from existing comminution circuits, accurate geometallurgical modelling will take on an increasingly important role. However, these requirements, in both new development and optimisation projects, are likely to be at odds with budgets as these will be tight. Hence obtaining the best value for money will be essential. This paper discusses the elements that need to be satisfied for ore characterisation programs to be successful. Some of the issues covered will be: ore variability and sample selection, test precision, problems with the use of non-standard testing equipment, and the value of databases.

Jan 1, 2009

Water is required as a key strategic resource in most mining and metallurgical processes and, in some countries, it has become a limiting supply for the development of mining activity. During the last years, mining industry efforts have been successfully focused on water use efficiency in the different processes. However, these efforts will not be sufficient to compensate for the growing demand of mining products and the decrease of ore grades. New efforts should be oriented to the search for alternative water supplies such as sea water, with or without desalinisation, or water harvesting. But to survive this growing pressure and to get a social licence to operate, the mining industry can also assume a proactive attitude and pursue a prominent role in water management at regional and local scale. This paper reviews some of these emerging issues, particularly in the context of the Chilean copper industry.

Jan 1, 2009

By Thomas E. G

In the economic evaluation of any Australian mining project, changes in taxation can significantly affect viability. Australian tax laws, particularly in the period since early 1973, have undergone many changes which have led to shifts in the profitability of mining companies. This paper examines the sensitivity of a selected, broadly based sample of Australian mining companies to the changes that have occurred, or are reasonably likely to occur, in taxation legislation. In the past, tax systems have been altered for a variety of reasons, such as 1. reduction'in the impact of inflation 2. neutralization of incidence between different sections of the economy 3. as an incentive to encourage expansion and growth in a particular industry or area, and 4. increase in the real "take" of government. In this paper, conventional rate of return analyses are applied in a study of how profitability is affected under various taxation systems.

Jan 1, 1977

It is no longer adequate when starting a new mine to simply select the best equipment. Today's competitive international commodity markets demand superior efficiency which requires systematic involvement of people in continual improvement of production and commercial processes. True Total Quality of Management (True TQM) principles provide an operating philosophy for maximising productivity and minimising unit costs of output. The presentation will show the practical and successful use of these principles. This paper will introduce the case study and provide background material on True TQM.

Jan 1, 1995

Before proceeding to the main portion of the above subject, a few remarks as to the general question of our mill slimes seem called for, and, with this in view, it is intended to briefly refer to the salient, points connected with their production, treatment and disposal at the mills.It is well known that, owing to the inticate mixture of the constituents of our sulphide ore, 'a very great deal of crushing and grinding is required to detach the particles of galena from the zinc blende and gangue of the ore, and it will be readily understood that, in this operation, a considerable amount of the material is converted into a slime which consists of minute, but ,(as can be see~ under a glass) well definied particles of all the constituents· 6f the ore arid combinations thereof, the relative proportions of which depend on the dual characteristics of hardness and abundance of the different constituents. An analysis of the slime shows the contents to be as follows :-Galena (PbS)Blende (Zn S)Pyrites (Fe Sll)Ferric Oxide (Fell Os)Ferrous Oxide (Fe 0) contained in garnetsOxide of Manganese (Mn 0) contained in rhodonite and garnets

Jan 1, 1903

By J Bean

Iluka Resources Ltd developed the Jacinth-Ambrosia Mine (Jacinth) in the Eucla Basin during 2009 and 2010. In this arid climate the operation relies on hyper-saline groundwater from a palaeochannel for process and potable water supplies. The water is hyper-saline, acidic and mildly reducing, with high ferrous iron concentrations. Ferrolysis commences on exposure of water to oxygen, resulting in increased acidity and the conversion of dissolved ferrous iron to insoluble ferrihydrite. The unstable groundwater forces a careful balance between interventions relating to maintaining pipeline efficiency, corrosion protection and processing aspects. Providing an oxidising environment at the head of the pipeline will result in the precipitation of akaganenite and goethite in the pipeline, which over time reduces pipeline efficiency. However, sending too much ferrous iron forward may reduce processing performance.The processing plant experiences changes in water chemistry in response to the variability of iron concentrations and pH within the pipeline, and the spatial and chemical variability of ore. As the main orebody at Jacinth contains little buffering capacity a source of carbonate in the overburden is carefully used to allow the cost-effective control of process water pH.This paper highlights the importance of understanding the chemistry of saline make-up water, ore, and overburden when designing water treatment facilities and heavy mineral processing facilities.

Oct 5, 2011