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By C Simpson, J Market

The process of sampling blasthole cones utilising personnel to manually shovel material into sample bags is a long-standing industry accepted process. However, this method has several drawbacks, including the safety issues around having personnel performing manual sampling in a harsh environment and the variability involved in getting a human to repeatedly get a ‘shovel full of dirt’, and make it always representative. Geophysical blasthole sampling, or utilising a Downhole Assaying Tool (DHAT) has been tested and has now begun implementation at many iron ore sites throughout the Pilbara region, Western Australia. This method uses a geophysical tool to capture data within blastholes, and together with a semi-autonomous logging platform to minimise risks around manual handling, delivers a multielement proxy-assay which can be utilised by the mine geology team to accurately domain the orebodies. Logistically, the combination of a specially designed tool and semi-autonomous truck are the way forward for a safer and more data-robust blasthole sampling practice. The method utilises a neutrongenerating geophysical tool and linked elemental spectroscopy sensor, which measures the response of the material surrounding an open hole. This delivers results at submetre intervals. These results are then utilised, similar to blasthole sample results, to map out areas within the blast pattern that are ‘ore’, ‘waste’, or ‘other suitable grade’. This paper outlines a project that has been in ‘proof of concept’ at selected Fortescue sites over the last few years with testing of these tools carried out on reverse circulation (RC), diamond drill and blastholes. The method is now being implemented at operational hematite mine sites. Fundamentally, the method adds more than enough value to justify its implementation. The aim is that these learnings will enable the greater industry to adapt, implement and improve their mining practices. Ultimately, the outcome will be greater value in mining for the industry by having a larger volume of good quality data to make reliable decisions on material movements, minimising ore-loss and dilution, and maximising the value of our current and future orebodies.

Nov 8, 2021

By G Fahey, S Rose

"Mining geology as a defined profession is only about 100 years old. The successful modern mine geologist needs to be a multidisciplinarian, but also needs to maintain a focus on the key outputs of the role. The technical skills needed in the role have increased as mining methods move to increasingly mechanised techniques. As well as being the guardian of the orebody and ensuring minimal dilution to expected ore grades, the mine geologist should be competent in the 12-point mine geology process. The mine geology process should include:a statement of purpose (a ‘mission statement’)geological mapping/logging system that supports consistent and regular geological data collection, storage, and interpretationsampling system that can produce representative samples and fits in with the mining scheduleassay database with relevant controls to ensure only ‘clean’ data is loadedsimple quality assurance / quality control (QA/QC) system for samples and assays, with a response process to react to out of specification resultsconsistent method of exporting, visualising, processing and interpreting assay data to create mining blocksdevelopment sign-off system so that all development and stoping is controlledproduction tracking system to monitoring and reporting what ore and waste volumes have been moved from the face, to any intermediate stockpiles, the run-of-mine (ROM) pad and into the crusherreporting system for daily, weekly and monthly reporting of tonnes and gradesdocumentation so that the grade control system has simple, but effective descriptions of how it works, who has responsibilities, and authorities, and be easily maintainedreconciliation system to compare resource and reserve to grade control and to mined and milledtraining system so that the geology team can quickly become competent.In this paper, the authors discuss the requirements of each point, and comment on common shortfalls observed by them over several years’ experience on producing mines worldwide.CITATION:Rose, S and Fahey, G, 2014. Modern mining geology, in Proceedings Ninth International Mining Geology Conference 2014 , pp 461–466 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Aug 18, 2014

CONTENTSThe significance of values givenINTRODUCTIONTHE ORE1. DATA SECURED FROM THE MILLING PLANT AS OPERATING BETWEEN 1938 AND 1942(a) Mill Recoveries(b) Mill Flow Sheet(c) Scheelite-Garnet Association(d) Detailed Examination of Mill Performance during 1942Crushing UnitsCoarse Rolls DischargeFine Rolls DischargeFeed to Huntington MillsFinal Ground ProductProduction of -200-mesh Scheelite SlimeSummary of Information on Crushing and Grinding Circuit(e) Detailed Examination of Mill Performance During 1942Concentrating UnitsLocation and Nature of Scheelite LossesSize Distribution of Scheelite LossesDistributor Spigot ProductsSummary of Information on Concentration Circuit(f) Detailed Examination of Mill Performance During 1942 Gravity Plant Feed2. EXAMINATION OF MINE SAMPLES TAKEN DURING 1942(a) Introduction(b) Nature of the Ore(c) Sampling of Mill Feed(d) Testing Technique(e) Minus 1/8-inch Ores-Naturally Broken Fractions(f) Recoveries from Plus 1/8-inch Fractions-Crushed to Minus 1/8-lnch(g) Probable Recoveries Obtainable from Weathered Ores140 Contour120 Contour90 Contour(h) Examination of an Ore Sample from the 90-foot Adit(i) Run-of-Mine Ore(j) Evidence of Maximum Sizes of Scheelfte Present in Run-of- Mine Ore(k) Summary of Information on Liberation and Recovery from the Ores as Mined in 1942 and from the Mill Samples

Jan 1, 1944

By B Murphy, S O’Connell, J L. Heath

In the 1989 best-seller The 7 Habits of Highly Effective People, the author, Stephen Covey, highlights the importance of maintaining not only ‘production’, but also, ‘production capacity’. When operating a modern flotation concentrator, production is often measured in terms of concentrate tonnage, tonnes milled and plant utilisation. There are very few metrics that focus directly on flotation equipment condition in relation to performance, which is analogous to Covey’s production capacity principal. It is evident on many mine sites that flotation equipment condition is not monitored on a proactive basis and that the prevailing culture is to wait for a failure, before addressing an issue.This paper discusses examples of how poor equipment condition can lead to production loss through poor metallurgical performance. Actual examples are given where these problems have occurred in operating plants. An outline is provided on how metallurgical and maintenance departments can work together to protect production capacity and gain more from existing equipment.CITATION:Murphy, B, O’Connell, S and Heath, J L, 2014. Maximising value through maintaining your flotation equipment, in Proceedings 12th AusIMM Mill Operators’ Conference 2014 , pp 71–76 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 1, 2014

The Beginnings of Mineral Processing Research in Canada - A Short Account

Sep 13, 2010

This paper examines some of the important aspects of mineral taxation policies and practices, with reference to the mining tax regimes of selected Pacific Rim countries (see Tables 1 and 2). The following subjects are addressed:what is æmineral taxationÆ?, basis for mineral taxation, types of mineral taxes, objectives of the mineral taxation regime, best practices, and mineral royalties. Many countries, in some cases with the encouragement and assistance of international funding agencies, are actively assessing the international competitiveness of their mining tax regimes with a view to attracting investment. However, these countries recognise that the mining tax regime is not the only consideration that is taken into account by prospective investors. The countryÆs geological prospectivity, physical infrastructure, labour force, political risk, and regulatory system are also important factors in the investment decision making process. Although it is probably true that an attractive mining tax regime will not necessarily attract mineral investment, there is a real possibility that an unattractive regime can drive away investment. For example, Hugo Dummett, general manager for discovery at BHP, hinted recently that BHP could cease exploration in Russia in the absence of positive tax changes. Dummett is reported as saying that if taxes æend up being as onerous as they are now, we really have to rethink why we are hereÆ (Mining Journal, London, November 27, 1998).

Jan 1, 1999

In considering the preparation of any paper concerning bearing metals, one feels a certain amount of diffidence in venturing into a field which has been capably explored at great length and in great detail during recent years. Many excellent articles have appeared in technical literature, dealing with the general theory of bearings and of bearing metals, the properties of white metals of the tin-base and lead-base types, and of the recently developed lead-bronzes.The justification for this further excursion into the field lies in the fact that it treats a branch of the bearing metal family which has so far received very little attention, and that of a somewhat sketchy nature, in published papers.The author's object is to give some outline of the history, development, present status and possibilities of the cadmium-base bearing metal alloys, particularly those in which copper is the main alloying element.GENERAL CONSIDERATIONS.It is desirable that attention should first of all be given to the general theory, constitution, and necessary attributes of bearing metals, in order that some of the problems met with during the development work may be better appreciated.Despite some evidence to the contrary, it is fairly generally maintained that an alloy for bearing metal use should be of a heterogeneous nature. It should consist of particles of a hard constituent uniformly distributed through a softer matrix.The basic idea is that the hard constituent should actually bear the load and resist wear, while the matrix imparts the necessary ductility and allows the bearing to align itself on the shaft in service.

Jan 1, 1934

By W Stange, N Hanson

An important aspect of the project evaluation process is the achievement of a clear and quantitative understanding of the primary drivers influencing project value and risk. A business scenario-based approach is required to ensure that the project meets value and risk hurdles over the short, medium and longer term. Adopting an optimising approach can aid significantly in the development of a project concept into a business that is optimal and sustainable in the longer term. Through the application of case studies, based on work performed with various mining organisations during the last five years, this paper will demonstrate how project value and robustness can be optimised. Experience has demonstrated that applying this approach results in significant value improvements and risk reduction û primarily by application of a rigorous, fact-based analysis and optimisation process that rapidly increases management team understanding and insight of key driver of value and risk.

Jan 1, 2007

By E J. Cowan

Efficiency demands that mine geologists devote the most time to tasks where they can have the biggest effect on production. One of the most time-consuming tasks is geological interpretation of the orebody and turning this into a block model for the planning engineers.The current best practice for mines that require a geologically constrained resource model involves capturing the interpretation of geologists as three-dimensional (3D) wireframes. However, there is significant overhead in the production of valid wireframes from sectional and plan interpretations. This overhead consists of the mundane tasks of digitising polylines, then building 3D wireframes and validating them. While software can simplify this task, the current process is not the best use of a geologist’s time. Under time pressure exerted by planning engineers and the time required for modelling from polylines, geologists are forced to roll-up the presence of other elements or impurities into the interpretation and encode them in the polylines, even though it is often desirable to consider these other factors separately.While it might seem unlikely that mine geologists can produce constrained geological models without the intermediary of wireframes, the technology to accomplish this is getting closer.In this paper, the results of a trial at the Savage River magnetite mine, which is owned and operated by Grange Resources Ltd, are reported. The trial was for a ‘direct-to-block’ implicit geological modelling method. The focus was on creating a geological attributed block model from drill hole geological log data; resource estimates were not determined. The categories modelled were air, waste, low-grade ore, medium-grade ore, and high-grade ore. The block model outputs either resulted in a proportional block model (categories expressed as percentages within equivolumetric blocks) or a sub-blocked model (parent block and one sub-block), which is the preferred block model output at the Savage River mine. When compared to the traditional best practice modelling method, which takes 43 work days, the wireframe-free modelling method took only 26 hours from initial modelling, using both exploration and grade control data. An update using appended drill hole data is achievable within one day. These results represent time savings of more than one order of magnitude compared to the traditional workflow, and, as such, these figures merit serious consideration for the use of the direct-to-block modelling approach at other operations.With these time savings, geological and estimation models can be kept updated constantly; geologists will not need to set aside two months for quarterly or half-yearly modelling of the drill hole data for resource review. Such dramatic time savings will allow for the better use of highly skilled geologists, who are in short supply in the current market, and will also impact directly on downstream mining engineering workflows.

Aug 22, 2011

By S Coward, S Jackson, S Moayer, J E. Vann

The variability and uncertainty of mineralisation, coupled with subsequent uncertainty in mining and processing, is often paid scant regard or overlooked during the evaluation of mining projects. In many instances, when the project transitions to the operational phase, the reality of feed or product variability and the consequences of unquantified uncertainties throughout the value chain become obvious. The outcome is the familiar picture of frequent ramp-up underperformance and failure to deliver on planned targets and objectives.Both mine and exploration geologists are expected to generate mineral deposit models that are based on an integration of diverse sources of data. These multifaceted deposit models already play a pivotal role in the design, development and optimisation of mining project value, and the trend to a fully digitally engineered future means that this importance is increasing. It is therefore vitally important that tools be made available to the geologist (as well as mining engineers and metallurgists) that enable them to characterise and assess variability and uncertainty via appropriate deposit models and thus articulate their impact on potential project configurations and decisions. Scenario-based project evaluation (SBPE) provides a framework for full and proper analysis of the downstream impacts of inherent deposit variability and uncertainty on project performance.SBPE has been developed by the authors over several years and aims to propagate geological uncertainty and variability through the mining value chain. The outcomes of SBPE can be tested against future external scenarios capturing financial, economic and socio-political factors that also drive project performance. Stochastic representations of the orebody (via conditional simulation (see Chilès and Delfiner, 1999)) that explicitly incorporate variability and represent uncertainty are propagated through the value chain on a block-by-block basis (ie on a much more granular basis than traditional project evaluation approaches).Conventionally, metallurgical processes are modelled with deterministic equations (eg regression models) based on limited data. The SBPE approach allows for the modelling of process performance uncertainty using geometallurgical sampling fully. Multiple outcomes of SBPE are passed through financial modelling, which can also incorporate stochastic components, thus allowing full quantification of the risks and opportunities of a set of project alternatives. The value of the SBPE system is that once a base case has been established, multiple engineered alternatives coupled with external scenarios are easily evaluated and compared in terms of incremental value.A new case study of SBPE is presented that shows how, by analysis of the various aspects of variability and uncertainty, project managers are able to focus on the areas that have the greatest ability to reduce risk and/or add significant value. This can lead to sufficient flexibility being built into operations that allow operators to cope with the real orebody delivered to the plant.CITATION:Jackson, S, Vann, J E, Coward, S and Moayer, S, 2014. Scenario-based project evaluation – full mineral value chain stochastic simulation to evaluate development and operational alternatives, in Proceedings Ninth International Mining Geology Conference 2014 , pp 21–32 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 18, 2014

By Anievas JB, Sevillano AC

This paper describes the acquisition, exploration, development, initial operation and subsequent financing of the Bulawan mine by means of a listing on the Toronto Stock Exchange of a subsidiary of the parent company, Philex Mining Corporation.Located on the island of Negros in the Philippines the property is unique on at least two counts: it is a disseminated gold deposit that occurs in a region of predominantly porphyry copper mineralisation; and it is a gold deposit that is mined by a bulk method of extraction (front and block cave) instead of the normal selective mining methods.

Jan 1, 1997

By Blackwood R. L, Crichton G. P

In recent years, the value to Australia of the introduction of a system of resource rent taxation on the mining industry has been frequently debated. The forms that this rate of return based tax could take, and the impli- cations on government revenue and mining com- pany profitability have been discussed at some length. Further, the selective application of this taxation scheme to certain mining industry sectors has received considerable attention. This study takes the form of a survey of the taxation history of one significant Australian mining venture, the Mount Lyell Mining and Railway Company. The conditions faced by this company during its history are used as a base for the imposition of rent taxation schemes. Comparisons are drawn between the historical taxation liability of the company and that which would have been incurred if a resource rent form of taxation had been in existence. From the results of the study, it can be concluded that while the company can be con- sidered to have been a successful enterprise during most of its history, it has not achieved a level of profitability which would warrant the collection of any form of excess profits Tax.

Jan 1, 1979

By J Coombes

The JORC Code lists the three core principles of Transparency, Materiality and Competency as fundamental to how mineral estimates are publicly reported. But where the principles of Transparency and Materiality can be considered conscious choices underlying decisions at the point of disclosure, Competency is a self-declared position statement based on one’s confidence to defend a technical position (as well as the functional pre-requisites of institute membership and a minimum of five years relevant experience).Developing competency in the mining industry is an ad hoc process, generally left to the individual to chart through a process of osmosis from personal work experiences that lead to a sufficient level of confidence. Companies that actually present professional development programs leading to reporting competency are rare. And even once a person has followed a program, there is no specific outline of what constitutes technical competence.No doubt, there are persons signing off on mineral statements who would benefit from developing and/or updating their technical skills (they may not even be aware of unmastered skills). Equally, there are technical practitioners who are sufficiently competent, but lack the confidence to step up and publicly report their estimates. Confidence in one’s own abilities plays a significant role in deciding when one is ready for the responsibility of submitting mineral estimates for public consumption. In addition, a person’s organisational support, such as the availability of suitable peers and professional development programs, and opportunities to learn from a variety of technical projects contribute to developing relevant experience. Increased exposure in both technical breadth and depth enhance confidence in one’s ability and competence.The mining industry provides numerous opportunities through direct and indirect means to develop the competency underpinning a stable reporting code. This paper examines a theoretical framework and associated processes that could be used to examine how the mining industry, companies and individuals collaborate to develop this vague principle of competency. This paper seeks to initiate research with the express purpose of enabling more effective and efficient development of reporting competency in our industry.

Aug 22, 2011

SOME notes on the works of the Electrolytic Refining and Smelting Company of Australia will no doubt be of interest to members of the Institute, more especially as much of the work is new to Australasia. As many of the members who may read this paper have not been in a position to visit works of this kind, and are consequently not thoroughly acquainted with all the operations carried on, the author has taken the liberty, in some cases, to enter into explanation which would otherwise be unnecessary. The works are situated at Port Kembla (New South Wales), about fifty miles south of Sydney, and are approachable both by rail and water. The Government has recently built a low-level jetty upwards of five hundred feet long, and intends installing at an early date an electrically operated portable crane to facilitate the handling of material to and from the boats. This will mean: a considerable reduction in the length of time that boats are laid up at the jetty. There are also under construction two breakwaters, which, when complete, will materially assist shipping operation...

Jan 1, 1910

By G Nicholas, S Coward, J Vann, R Wolff, S Jackson, S Moayer, A Bye

"A new approach to mineral project evaluation is described called Scenario-Based Project Evaluation (SBPE). SBPE incorporates well established æscenario planningÆ and æscenario thinkingÆ approaches, which are used extensively in other industries,?most notably the?petroleum industry. While most scenario planning is qualitative and non-probabilistic, the approach described here includes both quantitative and qualitative aspects. SBPE is complementary to optimisation approaches and allows mining firms to build and operate projects that are more robust in the face of adverse changes as well as proactively respond and exploit the upside offered by a realistic assessment of variability. The approach has potential to improve project performance and decrease operational risk. It also has important applications for currently operating mines.Conventional evaluation of metalliferous mineral deposits uses estimates of metal grades and deleterious attributes in singular æorebody modelsÆ, usually 3D block models, which fail to capture two critical aspects that underpin the realised value of mining projects: the inherent uncertainty of the estimated attributes the spatial variability of attributes, at the scale of mining selection, which impact on downstream processing steps and fundamentally drive realised value. While singular models are appropriate for estimating block averages, conditional simulation (CS) models of the relevant attributes are needed to represent uncertainty and capture spatial variability. Any attributes that can be either built into CS models and/or modelled in the envisaged mining/processing steps, can be evaluated fully through to highly ægranularÆ (ie detailed and un-smoothed) cash flows. A complete view of SBPE relies on selected strategies being tested against plausible æscenariosÆ of factors external to the project and thus outside management control. æExternalitiesÆ captured in such scenarios include market prices, costs and taxes. Via SBPE, project managers may demonstrate that there is material value in preserving or purchasing options that provide future flexibility to respond to the changing externalities or changes in orebody performance. Such flexibility generally comes at a cost but is very difficult to value. It is argued that full value chain evaluation using SBPE can help to value these options for a mining company. A case study for a gold mine is presented.CITATION:Vann, J, Jackson, S, Bye, A, Coward, S, Moayer, S, Nicholas, G and Wolff, R, 2012. Scenario thinking - A powerful tool for strategic planning and evaluation of mining projects and operations, in Proceedings Project Evaluation 2012, pp 5-14 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

May 24, 2012

THE object of the present paper is to give a brief description of the metallurgical process followed by the Grand Junction Co, and the results obtained therefrom. All figures quoted are from the actual working of the plant over a period of six months from January to June, 1910. The short ton of 2000 lb. is used by the company. Its gold is valued at 84s. per oz. fine, silver at 2s. per oz. fine. The ore consists essentially of a gangue of quartz and calcite, with 8 to 10%sulphide-pyrite, sphalerite, galena, chalcopyrite, and traces of arsenic and antimony. The colmtry-rock is a highlyaltered dacite. Small stringers of highly-mineralized ore penetrate the footwall of some of the lodes, forming a valuable stockwerk up to 3 ft. in thickness. In stoping, this is mined with the well defined lode, thus bringing into the mill at times a considerable quantity of hard country-rock. The gold exists in an exceedingly fine state of division, consequently rendering it necessary to grind very fine to obtain a satisfactory extraction.

Jan 1, 1912

By M Gasparon, J Harris, T Baumgartl, D J. Williams, M Edraki, P A. Kirsch, D Rowe

RISKGATE, an Australian Coal Association Research Program-funded (ACARP) initiative, has been designed to assist the Australian coal mining industry in improving minimum standards for safety performance, efficiency, operating practice and training. The online system is innovative in that it is built upon a foundation of industry expert knowledge gathered through action research workshops, which is further supported by a broad array of industry, academic and technical resources. In operation, RISKGATE offers a continuum for knowledge transfer and communication of current practice in risk identification, assessment and management in the coal mining industry. The primary mission of RISKGATE is to focus industry attention on prioritising control management as a way to achieve acceptable risk.A Coal Mine Tailings Dam Module has recently been added to the RISKGATE suite. The key risk, or initiating event, associated with coalmine tailings dams is catastrophic failure of the dam, leading to the release of tailings and water. This can occur due to geotechnical instability of the dam itself or of its foundation, overtopping and erosion of the dam, and piping failure of the dam itself or of its foundation. Coalmine tailings dams are also prone to seepage into the foundation and through the dam, particularly during operation when large volumes of water are discharged with the tailings. The most significant risk associated with seepage is the release of potentially contaminated water to the environment. Contamination can take the form of elevated salinity, acidity and dissolved metals. Run-off from coalmine tailings can cause erosion and can also potentially contain contaminants. Desiccation of the tailings surface can result in dust generation and dispersion.The paper presents the background and context of the RISKGATE project, the need for the addition of the RISKGATE Coal Mine Tailings Dam Module, and a description of the developed module, including the five initiating events considered, their causes and associated preventive controls, and their consequences and associated mitigating controls. This paper concludes with a discussion of the ways in which Australia’s coal mining companies are starting to apply the RISKGATE body of knowledge at their sites, which will flow onto the management of their tailings dams.CITATION:Williams, D J, Kirsch, P A, Gasparon, M, Baumgartl, T, Edraki, M, Rowe, D and Harris, J, ?2014. Application of RISKGATE to coal mine tailings dams, in Proceedings Life-of-Mine 2014 , pp 219–230 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 16, 2014

THE Australian States and New Zealand have for many years provided instruction in mining, metallurgy, geology, and their allied subjects through their Universities and Schools of Mines. Though such education has been provided at considerable expenditure, there is no legal recognition whatever given to the holders of degrees, diplomas, or certificates granted by the authorities controlling these educational institutions. Certain of the, Australian States and New Zealand require, however, that mine managers and other officials employed by the mining industry shall 'hold' certificates granted by their respective Mines Departments.The position at present is that each educational institution is practically a law unto itself, and therefore in many ways there is a want of uniformity amongst institutions all aiming at the same result the training of mining men. The object of this paper is, in the first place, to point out certain aspects of this want of uniformity, and thereby how disabilities accrue. Some points in connection with the granting of State certificates will also be...

Jan 1, 1915

By S S Solomons

In 1991 the uranium spot market price dropped to approximately US$7/Ib U308, a historical low in real terms and the short-term outlook for the industry in the next five years was grim. At this time the Ranger operation was producing uranium concentrate at its design capacity of approximately 3 000 tonnes/year. The loss of two major long-term contracts owing to price and reduced power utility demand due to excess inventories meant that the company could not match production to sales. Continuance at this production level would have resulted in a rapid buildup of product inventory and the tie-up of significant cash reserves. After analysing various options, an innovative operating strategy was devised such that production and sales were approximately balanced without a significant impact on the unit production cost or a long term effect on the plant or operation. A campaign mining/milling operation commenced and approximately 40 per cent of the workforce were retrenched. Multi-skilling of all employees was a critical aspect of ensuring a successful outcome. This paper examines the strategy and reports on the success of the operation two years after the restructuring exercise was effected in November 1991.

Jan 1, 1994

"Recognising that the mining industry is wedded to the break-even cut-off grade rather than a cut-off grade that optimises value, the author examines some perils and pitfalls in the use of break-even grades that lead to what the author calls ‘negatively geared ore reserves’.Negatively geared ore reserves occur when a portion of the ore reserves actually has a negative value and is effectively being subsidised by the more profitable portion of the ore reserves. This situation is generally difficult to detect with the level of information available to the public investor. The ore reserves can still be quite profitable in total, but now possess a level of risk that may not be appreciated.The risk profile (financial risk) of a negatively geared ore reserve is far greater than for a non-negatively geared ore reserve. Like a negatively geared investment property in a falling property market (for readers familiar with the Australian tax minimisation investment strategy), when the price of a commodity falls, a company that possesses a negatively geared ore reserve loses value at a magnified rate relative to a company that has a neutral or positively geared ore reserve. In the extreme case of a major commodity price reduction, as happened with the gold price in mid-2013, the negatively geared ore reserve can easily become negative value in total, not just in part.The negatively geared ore reserve is sometimes intentional – for instance in order to increase published ore reserve tonnages and meet the CEO’s key performance indicators – but is also often unintentional, resulting from various errors in the break-even calculation. Common errors in calculating a break-even grade include using fixed metallurgical recoveries, not including allowances for ideal laboratory versus real plant results, ignoring available operational data and using modal rather than mean parameter values in cost and performance calculations.This paper examines a common value distribution profile in many ore reserves and the effect of common break-even grade errors on this profile.CITATION:Poniewierski, J, 2016. Negatively geared ore reserves – a major peril of the break-even cut-off grade, in Proceedings Project Evaluation 2016, pp 236–247 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016