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By Richard L. Bullock, Bruce Kennedy

Vince Lombardi once said, "Practice doesn't make perfect, perfect practice makes perfect." When it comes to building a mine that will operate at the optimum level for the set of geologic conditions from which it was developed, Lombardi's remark might be paraphrased to describe the problem: planning won't guarantee the best possible mine operation unless it is the best possible mine planning. Any sacrifice in the best possible mine planning introduces the risk that the end results may not reach the optimum mine operation desired. This section addresses many of the factors to be considered in the initial phase of mine planning. These factors have the determining influence on the mining method, the size of the operation, the size of the mine openings, the mine productivity, the mine cost, and, eventually, the economic parameters used to determine whether or not the mineral reserve even should be developed. A little-known fact, even within the metal-mining community, is that room-and-pillar mining accounts for most of the underground mining in the united States. According to a 1973 study on noncoal mining (Anon., 1974), more than 76% of the producing mines [of over 1089 t/d (1200 stpd) capacity] produced approximately 70 000 000 t (77,000,000 st) or 60% of the nation's underground tonnage of material by room-and-pillar mining. That same year, 96.8% of the nation's under- ground coal mines produced 262 950 000 t (289,911,000 st) of coal extracted from room-and-pillar mines (Anon., 1976). Thus, nearly 333 000 000 t (367,000,000 st) of the United States' raw material is produced from mines using some form of the room-and-pillar mining system. Because approximately 90% of all mining in the United States is done by some variation of room-and- pillar mining, it is appropriate to give special emphasis to the effects of the various elements of mine planning on room-and-pillar mining. The relationship of these elements to other mining methods will become apparent as the elements are described in later sections herein. TECHNICAL INFORMATION NEEDED FOR PRELIMINARY MINE PLANNING Assuming that the reserve to be mined has been delineated with diamond-drill holes, the items listed in the following paragraphs need to be established with respect to mine planning for the mineralized material. Geologic and Mineralogic Information The geologic and mineralogic information needed includes the following: 1) The size (length, width, and thickness) of the areas to be mined within the overall area to be considered, including multiple areas, zones, or seams. 2) The dip or plunge of each mineralized zone, area, or seam, noting the maximum depth to be mined. 3) The continuity or discontinuity within each of the mineralized zones. 4) Any swelling or narrowing of each mineralized zone. 5) The sharpness between the grades of mineralized zones within the material considered economically minable. 6) The sharpness between the ore and waste cutoff, including whether this cutoff can be determined by observation or must be determined by assay or some special tool; whether this cutoff also serves as a natural parting resulting in little or no dilution, or whether the break between ore and waste must be induced entirely by the mining method; and whether or not the mineralized zone beyond (above or below) the existing cutoff represents submarginal economic value that may be- come economical at a later time. *7) The distribution of various valuable minerals making up each of the minable areas. 8) The distribution of the various deleterious minerals that may be harmful in processing the valuable mineral. 9) Whether or not the identified valuable minerals are interlocked with other fine-grained mineral or waste material. 10) The presence of alteration zones in both the mineralized and the waste zones. Structural Information (Physical and Chemical) The needed structural information includes the following: * 1 ) The depth of cover. 2) A detailed description of the cover including: the type of cover; * the structural features in relation to the mineralized zone; * the structural features in relation to the proposed mine development; and * the presence of and information about water, gas, or oil that may be encountered. 3) The structure of the host rock (back, floor, hanging wall, footwall, etc.), including: * the type of rock; * the approximate strength or range of strengths; * any noted weakening structures; * any noted zones of inherent high stress; noted zones of alteration; the porosity and permeability; * the presence of any swelling- clay or shale interbedding; the rock quality designation (RQD) throughout the various zones in and around all of the mineralized area to be mined out; the temperature of the zones proposed for mining; and the acid generating nature of the host rock. 4) The structure of the mineralized material, including all of the factors in item 3 plus: * the tendency of the mineral to change character after being broken, i.e., oxidizing, degenerating to all fines, recompacting into a solid mass, becoming fluid, etc.; * the siliceous content of the ore; the fibrous content of the ore; and the acid generating nature of the ore. Economic Information The needed economic information includes: *1) The tons of the mineral reserve at various

Jan 1, 1982

By Shawn T. Sorrell

Phillips Coal Company (PCC) submitted the first surface mine permit application under the Office of Surface &lining approved regulatory program of the State of Louisiana. This application for the Oxbow Lignite Surface Mine which is located approximately 64 kilometers (40 miles) southeast of Shreveport, Louisiana was submitted in March 1981. The State of Louisiana Office of Conservation, Surface Mining Division, assigned this application number LSM-1, indicating it is the first one submitted in Louisiana history. The permit area for the Oxbow Mine encompasses 6,251 hectares (15,627 acres). Of this total permit area, 5,862 hectares (14,656 acres) were classified by soil type as prime farmland by the U.S. Soil Conservation Service (SCS). Prime farmland acreage in the permit area became a major central issue in our early planning stages and throughout the permitting process of the Oxbow Mine, due to the magnitude of acreage involved.

Jan 1, 1982

By P. Otto, G. Borm, Th. Dickmann, F. Amberg, R. Giese

Based on many years experience, the well approved Tunnel Seismic Prediction System (TSP) has been substantially enhanced for online geological prognosis in underground construction. The method provides high resolution seismic images of the rock mass ahead of a tunnel face via an array of standard anchor rods. These contain3D-geophones and can routinely be installed during the excavation process. A further outstanding feature of the system is the newly developed high frequency repetitive seismic source which can easily be fixed at a tunnel boring machine. A user-friendly software package enables online data acquisition, processing, 3D-visualization, and interpretation.

Jan 1, 2001

By W. E. Falck, A. Usubiaga, J. Spangenberg, P. Schepelmann, S. Šolar, D. Wittmer, F. Blanchard

The extraction and processing of mineral resources may be accompanied by environmental impacts. In spite of technological advancements, the enormous increase in production volumes within the last decades has induced sizeable environmental impacts along the life-cycle of products. Beside environmental impacts, social issues associated with mining need to be considered to ensure the social acceptability of mining activities. The project EO-MINERS aims at deploying Earth Observation (EO) tools to inform best practices in mining and to thus assist the global mineral resources industries in their transition to sustainable development. In order to facilitate the handling of complex sets of information requirements from a wide variety of stakeholders, a set of indicators was developed that will inform the process of EO tool and services development. The project strives to enable stakeholders outside the industry to meaningfully participate in decision-finding processes on mining-related issues by developing and providing EO products and services that fit the information requirements. The project has identified a wide range of such information requirements by stakeholders that could be potentially provided by EO tools. The applicability of the EO tools on the local level is tested on three mining sites.

Jan 1, 2011

By M. K. Gangal, E. D. Dainty

CANMET/MRL has been contributing to an industry/government program to assess the quality of air in mines, and improve the working environment for Canadian miners. The ultimate aim of this program is to recommend a sampling methodology and appropriate concentration limits for both the soot (diesel particulate matter - DPM) generated by diesel equipment, and respirable combustible dust (RCD) as measured underground. The program was conceived by the Canadian Adhoc Diesel Committee, which consists of representatives from seven major Canadian mining companies, three provincial inspectorates, one union representative, two manufacturers of diesel equipment, and CANMET, a Federal Canadian research agency. This paper describes the modification and laboratory confirmation of an existing methodology for the sampling and analysis of DPM/RCD, including: sampling problems, filter selection, filter efficiency, DPM size distribution, the approximate performance of fractionating devices, and it reports the results of current ambient measurements of exposure levels in Canadian underground mines. Because of the concern about the health impact of DPM/RCD on mine workers, North American agencies are in the process of establishing limits for these aerosols. So far, the Province of British Columbia is the only jurisdiction in North America to legislate the maximum exposure level of RCD in its underground mines, i.e. 1.5 mg/m3 interim level recommended by the Adhoc Diesel Committee. It has also recommended the use of the CANMET/ADHOC RCD sampling protocol.

Jan 1, 1993

By John E. Young

United States Steel Corporation's Winifrede Mine is operated by Lynch District in the mountainous region of Eastern Kentucky. This region is characterized by narrow mountain ridges and precipitous slows which present both an opportunity and challenge in the design and selection of coal handling facilities for the movement of coal from the section belts to the railroad cars. The narrow finger ridges precluded use of underground haulage and, thereby, presented the opportunity to use high capacity equipment on the outside bench. The precipitous mountain slopes, steepest at the Winifrede seam horizon, presented a challenge to select a solution for lowering the coal approximately 1000 feet from the seam level to the valley floor railroad load-out point. It was evident from the start of planning that these two factors predominated; namely, rail haulage and coal lowering, and solutions to these would determine the final design of the Winifrede Mine coal handling facilities.

Jan 1, 1970

By Donald K. Sparling, C. Edwin Baker

The White Mesa uranium/vanadium mill is six miles south of Blanding, UT, on the Colorado Plateau, which has historically spawned more than 200 uranium mines. As uranium prices approached an all-time high during the mill planning period, Energy Fuels Nuclear Inc. anticipated the reopening of many of these mines, whose low grade ore suddenly looked economic. The company located the White Mesa mill close to these mines, to minimize hauling distances to the mill and give vendors added incentive to reopen or expand mine operations. A receptive local community, a relatively unencumbered trip through the regulatory maze, and some mill circuit innovations all helped to make the White Mesa mill a well functioning reality. From a strategic standpoint, and to begin ore stockpiling as early as possible, Energy Fuels constructed two ore buying stations and began receiving ore in early 1977. The buying stations were located at Hanksville and at what is now the Blanding mill site. Ore receipts at Hanksville did not materialize as anticipated and the facility has since been closed. The Blanding ore buying station is now an integral part of the milling operation. All ores, whether company, vendor, or for toll milling, are received at the Blanding station. The Blanding site was central to the plateau mines, and was well received by area residents, who encouraged the introduction of industry to the area. Residents viewed mill construc¬tion as an economic blessing and were prepared to accept the associated im¬pacts. Energy Fuels hired as many local people as possible for mill opera¬tions.

Jan 4, 1981

By Edward Donovan, Bryan Knott, R. E. Melley, O&apos

South Bulga Colliery, located near Singleton in the Hunter Valley region of Australia, began longwall production in late 1994. The mining conditions there are conducive to high productivity with good roof conditions and a shallow seam with production areas located close to the portal. When the longwall was commissioned, the low capacity and availability of the conveyor system greatly curtailed the mine's productivity. A number of changes were made to the conveyor system culminating in a drive change out to improve the system. Using South Bulga as a case study, this paper aims to demonstrate the absolute necessity of a reliable, high performance conveyor system for the viability of a mine, and some of the factors that are needed to ensure a conveyor system performs as intended. These factors include a thorough understanding of the individual components and how they influence and interact with each other; a system design that is tolerant of variations in component performance and the necessity of robust and reliable communications and PLC programming.

Jan 1, 1996

By Paul Javor

Optimization of a process is achieved by selecting, 'from all the known options, the most beneficial method of obtaining a product. It is rare that the optimum process is arrived at by conventional methods, because of the great amount of time required for developing and comparing all the options. On the other hand, it is now possible, by means of an optimization program based on special mathematical formulas involving an algorithm and implemented by a computer, to plot the optimum process realizing considerable savings and in a reasonably short time. The flow sheet arrived at in accordance with the optimization program described in this paper investigates and develops all the possible options and, with the aid of the computer, makes it possible to select the most economical ore beneficiation process. The options in an ore beneficiation process are all the possible trajectories that can be traced through the particle sizes to which the ore is reducible in the extraction of its valuable minerals. Although an ore can have a wide range of composition and several valuable minerals that can be extracted, this paper is concerned with the special case in which only one mineral is extracted from the ore and in which the maximum allowable percentage of impurities in the end product is defined.

Jan 1, 1971

By James P. Connell

The Berkeley Pit of The Anaconda Company is located on the southeast slope of the Butte Hill, the legendary "Richest Hill on Earth," and is one of the largest pit operations in the world completely dependent on truck haulage. Through October 31, 1968, the Berkeley stripping and mining operations have moved more than 442,589,000 tons of material. Present scheduled production is at the rate of 260,000 tons per day, with a record quantity of 306,900 tons having been hauled on September 23, 1968. Although the Berkeley Pit has been in production only a little more than ten years, it has been the proving ground for many of the presently used large trucks. Beginning with the original R. G. LeTourneau 75-ton electric truck in 1960, Unit Rig 85- and 100-ton electric drives, Haulpak 65- and 105-ton electric drives, and Caterpillar 100-ton electric drives have all been tested under production conditions. In addition, engine development has kept pace with both 1000-hp diesel and 1100-hp gas turbine engines now under test. As the size of the Berkeley operation has grown, the truck fleet has changed in size and appearance in order to maintain economic mining costs. The original fleet consisted of forty-three 36-ton trucks with conventional mechanical drives. The present fleet is made up of eighty-nine trucks: nineteen 85-ton Unit Rig electrics with 700-hp diesel engines; sixty-nine 100-ton Unit Rig electrics with either 700- or 1000-hp diesel engines; and one 100-ton Unit Rig electric with an 1100-hp gas turbine engine.

Jan 1, 1969

By E. J. Duggan

In the course of the grinding experiments conducted at Climax over the past twenty years one interesting phenomenon was discovered. This was that balls made of certain types of steel grind more ore than some others. The most significant variation was found in the results secured with a hard alloyed forged bail compared with the forged carbon ball supplied by most ball manufacturers These findings were confirmed in many repeated controlled tests. The value of these tests depends on the methods used, the facilities available and the care with which the investigations were conducted. These are described in the following. This testing has largely been done in eight 91 x 81 low discharge ball mills in closed circuit with 7811 duplex screw classifiers. The mills run at 20 RPM on a feed approximately minus 3/8 inch. The ore is ground through 28 - 35 mesh in one stage. Each mill and auxiliary classifier is in a separate, parallel grinding and flotation section The, ore to each: section is the same in every particular and is fed to each mill bin from a common conveyor tripper. The ore from the bin to the ball mill is weighed on a conveyor scale. The power input to each mill motor is determined with a watt hour meter which measures the power to the mill motor only. Both the scales and meters are checked periodically by standard methods and have been found to give consistent readings. Automatic samplers are employed on each section to obtain accurate measurement of the size reduction. A size analysis of the classifier overflow is made each shift and a composite size analysis is obtained from a weighted average of the various shift analyses. The mills are driven by 450 horsepower synchronous motors so that there is no speed variation and shell liner age is kept as nearly the same as possible in mills under test. The same set of operators is assigned to a mill under test as to the control mill. In all other particulars such as ball load, mill density, liner design, etc., the mills are operated in precisely the same manner. This is an ideal arrangement for plant testing. From observations of ball mill performance over the past twenty years, it is the opinion of the operating staff that variations of as little as one to two percent in mill capacities may be determined if sufficient operating hours are devoted, to a test. Relations between mill capacities, fineness of grinds and power consumptions have been established with a high degree of accuracy. In Table I are given the figures for one test. These show that while the grind with the hard ball was slightly coarser, the tons ground per hour was 5.4 percent greater with the soft ball, and 6.1 percent greater on the basis of minus 100 mesh produced. The power consumed per ton with the hard ball was 4.4 percent greater on a tons per hour basis. The soft ball was inferior in wearing qualities and steel consumption per ton of ore was 24 percent greater with it. In this test the mills were charged with the two different balls for a period of three months to allow the ball loads to come to equilibrium. In Table II are given the specifications of the two balls. The difference in grinding rates may be accounted for by the nature of the ball surfaces. The surfaces of the soft balls after being worn a while are rougher to the touch. Enlarged photographs of the worn-in surfaces of hard and soft balls are shown in Figure I. These show the presence of scratches or skid marks on the hard ball surface which indicates less nipping effect. The Climax ore pulp has a pH of 6.0 and is in a dispersed state. The viscosity is low compared with most ores especially those that are conditioned with lime. This would lower the tendency of the pulp to adhere to the balls with a lower grinding efficiency as a result. It was also thought that the relative rates of wear from surface to center might affect the make-up of an equilibrium ball charge. This probably has little effect on capacity as shown by the size analyses of the two ball charges in Table III. This hypothesis was subsequently investigated by the use of rationed charges. The rationed charge did not overcome the advantage in

Jan 1, 1958

By Jeffrey P. Carstens

INTRODUCTION Thermally induced fracture of rock is one of the oldest rock breakage techniques known to man. Primitive underground miners used fires to heat and crack rocks as early as the third century B.C. (Ref. 1). History aside, however, present-day tunneling and mining interests are reconsidering the use of modern heating units for rock fracture for some very good reasons. One of the most important advantages of many heating techniques is the lack of direct contact between the heating device and the rock. This means a lower wear rate relative to mechanical cutters, and no large reactant force to be supplied by the tunneling machine. In addition to avoiding physical contact, some heating systems (e.g., electron-beam guns and lasers) can deliver energy to a rock face much more intensely than can be conveniently handled mechanically. Thus, heating power densities of the order of lob to 107 watts/in.2 and greater can be achieved with high-power lasers. These high power levels allow much higher instantaneous penetration rates than can be achieved by mechanical cutting. Another advantage that accrues to some thermal techniques, such as, for example, surface spalling, is that the thermal fracture process works particularly well in certain rock types (e.g., granite) that are particularly hard to cut mechanically. Other methods, involving high power density, are able to cut any rock type, and are relatively

Jan 1, 1997

By Clay Haynes, Tim Pearia, Robert Robinson, Judy Cochran

A 1.89 km-long, 4.5 m-I.D. tunnel was successfully constructed through saturated hard clay, and highly abrasive dense sand and gravel, with groundwater heads ranging from 10 to 20 m. In order to address these conditions, a Lovat earth pressure balance TBM was used, with soil conditioning by foam, water and various polymers. Support was provided by a single-pass segmented concrete lining. Groundwater inflows of 400to 1,600 lpm at times created challenges for changing cutting tools. Surface settlements were generally less than measurement thresholds, except under very low cover at startup. This project provides a pivotal case study of the successful application of EPBM technology in saturated, abrasive glacial soils and the successful application of soil conditioners.

Jan 1, 2003

By S. Hearn, S. Boskovic, A. Smethurst

"The digestion of minerals in strong acids or at elevated temperatures can result in the release of large amounts of silicic acid which can polymerize in solution to form colloidal silica and gels. Colloidal silica can cause a number of problems including interfering with flocculation, initiating crud formation in solvent extraction (SX), decreasing SX extraction kinetics and increasing SX phase disengagement times. Huntsman’s POLYSIL® polyether coagulants have a “lock and key” relationship with the surface of colloidal silica to help lower the concentration of these particles in solution, improve process efficiency and reduce reagent losses by minimizing crud formation. This paper investigates some of the issues caused by colloidal silica in hydrometallurgy processes and illustrates how the use of POLYSIL® coagulants has helped to improve process outcomes. INTRODUCTION Coagulation differs from flocculation in a number of ways. Coagulants are relatively small molecules that modify the surfaces of fine particles, weakening repulsive forces between them and allowing particles to stick together, while flocculants are generally molecules that are large enough to bridge the boundary layers between the particles. With flocculation, addition rate and mixing all make a difference to the flocs formed. Coagulation, on the other hand, is an equilibrium process. With coagulation it is only necessary to achieve good mixing, and coagulates will form as Brownian motion pushes the particles into each other. In real systems, this process is complete within seconds. Huntsman’s POLYSIL® polyether based coagulants have a strong affinity with the surface of colloidal silica formed by the polymerization of silicic acid. While silica found in minerals has a low aqueous solubility, large amounts of silica as silicic acid can be released as these minerals are digested in strong acids at elevated temperatures. The solubility of free silicic acid is about 150 ppm under pH conditions typical in acid leach environments (1), so the bulk of the silica will polymerize in solution to form colloidal silica. Colloidal silica can pass through a hydrometallurgy process without affecting any of the operations. However, it can cause a number of problems. These include gelling in a leach, interfering with flocculation or crystallization, initiating crud formation (2,3,4), decreasing extraction kinetics and increasing phase disengagement times (5,6) in solvent extraction. In these cases, coagulating the silica with POLYSIL® coagulants can reduce or eliminate the problem by enabling these particles to be flocculated and removed from the solution."

Jan 1, 2015

In the present study, we have investigated the conditions for the formation of bubble clusters and the effect of well-defined agitation on the stability of clusters. A specially designed cell was used in which bubble clusters could be formed at the surface of a porous block in a fluidized bed of relatively coarse hydrophobic silica particles. The clusters then rose through a flow field of known turbulent characteristics. The size of the clusters before and after passing through the turbulent zone were measured using a high speed camera. The influence of shear rate on the deformation of the bubble clusters was investigated. The results showed that the Kolmogarov microscale was much smaller than the maximum cluster size, suggesting that the breakage of the clusters was mainly due to interaction with clusters in the inertial convection sub-range.

Jan 1, 2009

By Sandeep Kumar Jeripotula, Govinda Raj Mandela, Aruna Manglapady

Dozer operators are frequently exposed to whole-body vibration (WBV) during the execution of their work. Occupational exposure to WBV in Indian surface coal mines was evaluated by measuring vibration intensity and duration of exposure. A triaxial accelerometer was placed on the operator seat surface for taking the readings. Based on frequency-weighted root mean square acceleration equivalent to 8-hr shift duration, i.e., (A(8)) all dozer operators have exceeded an Exposure Action Value (EAV) of 0.5 m/s2 , and 90% of dozers did not exceed Exposure Limit Value (ELV) of 1.15 m/s2 . Based on Vibration Dose Value (VDV (8)), all dozer operators have exceeded Exposure Limit Value (EAV) of 9.1 m/s1.75, but no dozer operators have exceeded Exposure Limit Value (ELV) of 21 m/s1.75. Further, an epidemiological study was performed for identifying the extent of musculoskeletal disorders (MSDs) among dozer operators. For the detailed study, 42 dozer operators and 22 controls were selected from 2 surface coal mines. The control group was not exposed to WBV. It was seen from the cross-sectional study that pain in the lower back was predominantly higher (83.33%) in the exposed group when compared with the control group (31.81%). Likewise, pain in the neck (47.61%), shoulder (42.85%), knees (42.85%), and ankle (11.90%) was higher in the exposed group than that of the control group (22.71%, 0%, 45.45%, and 4.54%). A significant observation among the exposed group was that there was degradation in the quality of life. The outcome of the study would assist in monitoring and mitigation of machinery-induced vibration diseases (MIVD) in India and generally applicable to most of the mechanized mines as well. However, comprehensive studies are still needed to enunciate the magnitude extent.

By Hazal Melis Aytac, Lana Alagha, Fardis Nakhaei

Gallium (Ga) and Germanium (Ge) are essential strategic elements that are extensively used as semiconductors in many technological fields. Owing to their essential uses and supply disruption, Ga and Ge are deemed critical by the U.S. They are typically found as substitutions or inclusions in zinc minerals. However, their distributions within zinc minerals are not well understood. To address this, trace element and mineralogy analyses of representative samples obtained from an old high-zinc-grade tailing were performed using various qualitative and quantitative techniques. These techniques included Inductively Coupled Plasma Mass Spectrometry (ICP-MS), Tescan Integrated Mineralogical Analysis (TIMA) with Scanning Electron Microscopy (SEM) and X-ray Diffraction (XRD). Moreover, bench-scale froth flotation tests were conducted to enrich zinc minerals, the major hosts of Ga and Ge, using PAX as a collector, Na2S as a sulfidizer, Pb(NO3)2 as an activator, and MIBC as a frother. Comprehensive characterization analyses of the flotation products showed significant enrichment of Zn, Ga and Ge in the flotation concentrates.

Feb 1, 2025

By L. J. Prosser, A. T. Iannacchione

Unfortunately from 1991 through 1995, 44 miners were fatally injured in the stone industry. Of these 12 occurred at underground mines from a total work force of less than 2,000 miners. Nine of these 12 miners were fatally injured in falls of roof or rib. A safer environment for the miners can be achieved by evaluating the nature of the hazardous ground and by developing more efficient and effective ground control strategies. Roof and rib conditions in the underground stone industry were observed and assessed at 33 mines in Illinois, Indiana, Kentucky, Maryland, Missouri, Pennsylvania, and West Virginia [(Figure 1)]. Hazard assessment indicated that those ground failures occurring under moderate to substantial overburden (> 30 m [l00 ft]) were caused by stress concentrations and geologic structures. Ground failures near the surface are caused by solution (water) processes. Selection of the mining horizon and mine layout decisions tremendously influence ground stability.

Feb 24, 1997

By Alan R. Johnson

Because of the competitive nature of the iron ore pelletizing industry, commodities required for the production of pellets are continually being scrutinized to minimize their usage and offset rapidly escalating costs. In the Tilden pellet plant, the usage of one commodity, bentonite, has been reduced from over twenty-four pounds per long ton of pellets to as low as eight pounds per long ton. The evolution of bentonite usage from plant start-up to the present time is described.

Jan 1, 1984

By Alfred Jr. Petrick

Modelling of cash flows and calculation of net present value of rate of return over the expected life of a mine/processing unit continues to be the accepted basis for mineral investment decision-making. The computer and spreadsheet programs have greatly improved ability to perform sensitivity and risk analysis, hence our ability to deal with key analytical problems. These problems of cash flow analysis result from the necessity of forecasting an uncertain and risky future. Cash flow models begin with the critical assumption of a "design basis", then integrate all of the variables relevant to the investment decision including forecasts of price, cost, taxation, financial conditions, and company strategy. Alternate "scenarios" portray possible future outcome of the investment decision. The potential for straying from reality is enormous. The computer has eliminated the time consuming hand calculations from the cash flow analysis, but the analyst still struggles with the risk of trying to predict "how the project will really turn out".

Jan 1, 1991