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The equity market is now very much within a global village environ- ment, with various exchanges acting as agencies for the big casino. In this predicament, mining companies, who provide the most extensive, but relevant risk assessment information, will be best placed for favoured treatment by potential international investors: But what risk assessment information in summary form can be provided to support a resource/reserve statement? Even more importantly, does "objective" data exist, whose trends will support a resource/reserve state- ment? A prime need of the informed mining investor is to determine whether or not the resource/reserve statement is believable? But more importantly will it be realised? While the implications within the text of the majority of reports on resource/reserves suggests that the estimates are conservative, the record indicates that very few estimates are. In fact, to date, reports claiming to be conservative in respect of the overall grade estimate at a specfic cutoff have not reflected the realised grade at the stated cutoff; it has been more common for the realised grade to be lower than implied by the resource/reserve statement. Further, it is not uncommon for penalty elements to be understated and these components are rarely incorporated within resource/reserve statements.

Jan 1, 1988

By Lawrence Devon Smith

"The concept of risk is well established in the mining industry. It is acknowledged when estimates of reserves are expressed as proven or probable, when mining and metallurgical recoveries are applied to the ore, and when contingencies are added to costs. However, it is difficult to provide a quantitative assessment of risk. The significant sources of risk in a mineral project and how these are addressed in project evaluations are discussed. The discount rate is examined as a fundamental means of reflecting risk in discounted cash flow evaluations. Current industry practice is discussed, and a methodology for the analysis of risk levels is proposed that assesses the constituent components of the discount rate: real interest, mineral project risks, and country risk.IntroductionThis paper examines the components of the discounted cash flow discount rate and proposes a method of estimating project-specific discount rates. The motivation for this work comes from experience of project evaluations in which owners and purchasers had agreed on virtually every aspect of the evaluation except how much the project was worth. Agreement was reached on reserves, grad~, recovery, capital costs, operating costs, taxes, and, by combining these components, even on the fmal cash flow values. The only difference in opinion concerned the discount rate to be used in the calculation of the net present value. Depending on the life of the project, such differences of opinion can cause a variation of more than 50% in the value placed on a project! This is illustrated in Figure 1."

Jan 1, 2003

By Christopher R. Lattanzi

"Discounted cash flow analysis provides a means of relating the magnitude of expected future cash profits to the magnitude of the initial cash investment required to purchase an asset or to develop it for commercial production. The objectives of discounted cash flow analysis are to determine:.. The net present value of a stream of expected future cash revenues and expenditures... The rate of return which the expected future cash flows will yield on a given level of initial cash investment.In the case of mineral properties, discounted cash flow analysis is generally accepted as the preferred method of valuation, whenever sufficient data are available to permit its reasoned application. Sufficient data are required to support estimation of all of the individual elements of cash revenue and cash expenditure which will be associated with the development and operation of the property, up to the end of its estimated life. It is the accuracy of these input estimates which determines the validity of the resulting determinations of profitability and rate of return on invested capital.In undertaking any discounted cash flow analysis, it is important to recognize certain fundamental attributes of the mining industty:.. The basis of any mineral development is the existence of an ore reserve... Costs are determined by the number of tonnes mined and processed, while revenues are determined by the number of pounds or ounces of metal produced. The two are related by the recovered grade of the ore... Profit is typically more sensitive to changes in revenue than it is to changes in cost... Commodity price is a principal determinant of revenue, but it is also the factor with which is associated the greatest level of financial risk.In the end, of all of the factors which must be considered in the discounted cash flow valuation of a mineral property, the most significant are the reliability of the reserve estimate, particularly with respect to recovered grade, the price at which the product is to be sold, and the risk of not maintaining the projected level of price."

Jan 1, 2003

By Lawrence Devon Smith

"This paper examines the impact of the various assumptions that go into an economic evaluation, and shows how these can be combined to show an exciting result that may not really exist. An example of an embellished case (the kind that one frequently sees when projects are being promoted) is developed and the cumulative impact is analysed to show the actual project underneath. The paper also points out some areas to watch for overly optimistic assumptions such as prices, inflation, and debt. The concept of a ""bare bones"" base case is proposed (constant metal prices, constant dollars, no inflation, no debt, no interest, on a project basis, after tax) as a common reference point.As well, the discount rate is examined as a fundamental means of reflecting risk in discounted cash flow evaluations. Current industry practice is discussed, and a methodology for the analysis of risk levels is proposed that assesses the constituent components of the discount rate: real interest, mineral project risks, and country risk.INTRODUCTIONOften, the first time that all of the technical and economic data for a mineral project comes together in one place is when the economic evaluation is developed. This typically happens when work on the project has progressed to a sufficient level of detail that the effort to produce a year-by-year cash flow is justified, usually at the pre-feasibility or feasibility study stage. The data involved will include:• production; tonnes waste and ore mined, ore grade, mining recovery, metallurgical recovery, metal sold• revenue; metal price, smelting & refining charges, marketing costs• operating Costs; mining, milling, administration, fees, royalties• capital Costs; exploration, development, construction, indirect costs (engineering, management), contingencies, start-up, inventories, working capital, replacement and sustaining capital, closure costs• taxes and royalties• exclusions; depreciation (this is not a cash item), sunk costs (only costs going forward)."

Jan 1, 2003

By Kentwell D. J, Cusak C. J, Harvey-Kelly F. E L, M D. Goodz

The Morning Star Gold Mine presents an example of a prolific operation with considerable historical records, mine workings, drill hole logs and countless plans from greater than 20 adjacent mines which have now been consolidated to form the current project. Implementation of 3D computer modelling in the planning stages has provided an additional tool to integrate and refine geological models as a guide to some exploration strategies. It has allowed for a re- interpretation of the host rock units, dimensional constraints, new exploration extensions and provisional resource modelling. The initial consideration of this project was to integrate 135 years of mining history into a single database. Each historic mining area had an unrelated mine grid, often established parallel to the long axis of their main stopes; some were based on magnetic or true north. Survey plans were in chain, imperial or metric units. Through the manipulation and rotation of old grids, previously unrelated mine workings began to form continuous mineralised zones, with unmined portions still remaining in between the existing development. Furthermore the current drillhole database of >433 holes showed numerous confirmatory intersections of new mineralisation. A series of tiered tables were created within a relational database to derive guidelines for assessing data to attribute a Mineral Prospectivity Value [MPV] based on key indicators of mineralisation. Indicator logging now forms the basis of geological descriptions.

Jan 1, 1997

Since 1955 Gaspe Mines has produced 144 million tonnes of ore, averaging 0.87% Cu, mined from two open pits and underground workings. In 1994, four exploration drill holes discovered a buried porphyry/skarn Cu-Mo deposit at depths of between 1000 m and 1700 m below the top of Porphyry Mountain. The mineralization and alteration associated with the Porphyry mountain quartz monzonite does not outcrop. A total of 19,500 m of drilling in 12 drill holes has outlined 200 million tonnes grading 0.73% Cu and 0.08% Mo. Mineralization occurs as veins and disseminations of chalcopyrite and molybdenite. Drilling and feasibility studies continue.

Jan 1, 1998

By E. J. Berentsen

The Turquoise Ridge gold deposit is located near the Getchell Mine, 72 km (42 miles) northeast of Winnemucca, Nevada. The deposit is owned by First Miss Gold Inc. The host rocks consist of Ordovician and Cambrian age shales and limestones. They have been crosscut by the northeast-trending Turquoise Ridge shear zone and northwest-trending shear zones. Gold mineralization occurs at depths from 427 m (1 400 ft.) to 671 m (2 200 ft.), along the intersection of these structures. Large tonnage, flat-lying deposits occur where folded, favorable beds are intersected by the faults. The carbonate within the beds has been replaced with silica, pyrite and arsenic sulfides.

Jan 1, 1996

By J D. Goldsworthy

The McPhee Creek bedded iron deposit is a recent discovery made by Giralia Resources NL (Giralia) in the northern Pilbara of Western Australia. The deposit lies 30 km north of the town of Nullagine along the southeastern margin of the East Pilbara Granite-Greenstone Terrane (EPGGT).The McPhee Creek area is located in the Kelly Greenstone Belt in the southeastern part of the EPGGT. The Archaean aged greenstone belt consists of volcanic and sedimentary sequences including the Warrawoona Group and the Gorge Creek Group. The McPhee Creek iron ore deposit lies within banded iron formation (BIF) rocks of the Gorge Creek Group. The structure of the McPhee Creek area is dominated by a northeast trending, upright synform (Sandy Creek Syncline) and associated folding that is truncated by northeast trending faults in the east. Iron ore mineralisation is predominantly stratabound and follows the dip of the bedding – however, in some areas, particularly in the southwest of the deposit, mapped steep to moderate dips of bedding planes are at odds with underlying fl at mineralised zones in drill sections. Zones within the deposit that contain substantial thickness of iron ore correspond to areas of complex folding suggesting structural control and iron enrichment in fold hinges. Petrographic analyses confirm mineralisation is goethite dominant and the deposit is strongly supergene enriched.Giralia initially identified iron ore potential in the McPhee Creek area through the presence of a small known channel iron deposit (CID) mesa. Giralia began exploration in 2008 by re-drilling a portion of the CID (subsequently named Crescent Moon) and reported a small low-grade Inferred Mineral Resource. Target generation in the wider area utilising Geological Society of Western Australia maps and Ikonos satellite images identifi ed strongly ferruginous outcrops associated with major structures along an 8 km long range located 2.5 km to the west north-west of the Crescent Moon CID deposit. In late July 2008, a total of 62 rock chip samples were collected during a helicopter supported sampling program conducted at McPhee Creek. Samples taken from haematite-goethite enriched BIF and canga zones outcropping intermittently over the 8 km length of the western and central areas of the prominent range assayed up to 63 per cent Fe. These zones represent the discovery outcrops and surface expression of the McPhee Creek main range iron ore deposit.Follow up sampling, geological mapping, bulldozing of access tracks and ramps and reverse circulation (RC) drilling commenced in September 2009. A maiden Inferred Mineral Resource was announced by Giralia to the Australasian Securities Exchange (ASX) on 15 December 2009.The current Indicated and Inferred Mineral Resource at December 2010 stands at 260 Mt grading 56.2 per cent Fe, 0.12 per cent P, 6.7 per cent SiO2, 2.3 per cent Al2O3 and 9.5 per cent LOI at a 50 per cent Fe cut-off. McPhee Creek is one of the largest iron deposits found in Archaean BIF in the northern Pilbara.

Jul 11, 2011

By Kris Inwood

"In 1879, when the Dominion government initiated its controversial program of industrial promotion, iron smelting in Canada was limited to one company producing coke iron on the mainland of Nova Scotia and three small charcoal blast furnaces in Quebec. There was no steel production. By the eve of the First World War, iron and steel were being produced in very large quantities, the companies active in 1879 had disappeared and new centres of integrated iron and rolled steel production at Hamilton, Sydney and Sault Ste. Marie had come to resemble the industry as we know it today. The most dramatic change was that at Sydney, Nova Scotia, where in the early 1900s, two steelmaking companies established works. The Sydney developments have been explained as the result of resource discovery and technical change. W.J. Donald, in his authoritative account of the Canadian iron and steel industry, observes:(1) ""The most rapid growth of the Canadian iron and steel industry has occurred since 1897 ... The remarkable growth has been caused largely by the new conditions of the industry. The discovery and use of Newfoundland ores, together with the availability of Cape Breton coal, has made the Nova Scotia industry not only possible but profitable .... It is a safe conclusion that the Canadian industry would not have been an important one, had it not been for the discovery of the Michipicoten and especially the Wabana (Newfoundland) ores:' Donald also argues that metallurgical progress had been necessary to render the ores valuable. ""Newfoundland ores ... contain a considerable amount of phosphorus, and were made available for steel-making by recent inventions:' The purpose of this paper is to re-examine Donald's story. It will be argued that the origin of steel-making at Sydney is somewhat more complicated than Donald has indicated. The difficulty with Newfoundland ore extended beyond its phosphorus content and a resolution required more than the basic open hearth furnace identified by Donald. Moreover metallurgical change was only one of several developments necessary to induce industrial investment at Sydney. Surprisingly, however, the discovery of iron ore in the late nineteenth century does not appear to be part of the explanation."

Jan 1, 1999

By P J. Howard, P Darvall, J H. Mainwaring

In less than a year, Atlas Iron’s Corunna Downs Project has moved from a new discovery to a substantial resource of high quality in an underexplored greenstone belt. Located approximately 170 km south-east of Port Hedland and 40 km south-west of Marble Bar, in the Pilbara Region of Western Australia, Atlas Iron Ltd (Atlas) has conducted extensive exploration work at Split Rock, Razorback, Runway and Shark Gully, consisting of geophysical surveying, field mapping, 464 reverse circulation and 16 diamond drill holes resulting in a current resource of 51 Mt at 57.3 per cent Fe (Atlas, 2014b).The Corunna Downs Project is interpreted to be hosted within the Cleaverville Formation of the Archaean Gorge Creek Group. Within the project area these rocks outcrop as subvertically dipping banded iron-formations (BIFs) and jaspilites, cherts, minor shales and meta-sediments forming a north–south trending plateau.Primary hematite-martite iron mineralisation is overprinted in the near surface environment by supergene goethite, and frequently capped with a thin laterite cover. The strongest enrichment areas have been discovered within topographic lows, proximal to fault zones, which coincide with a geophysical anolmaly. These characteristics were targeted, and the subsequent areas mapped in greater detail, allowing for efficient resource definition.Although first explored for iron in the late 1960s, it wasn’t until Atlas’ acquisition of the project in October 2012, that major strides were made to defining an economic resource. At present, Corunna Downs is Atlas’ best greenfields exploration discovery, both in terms of the potential scale of the resource and its blending capacity.The Corunna Downs prospect is emerging as a major new iron ore province in the Pilbara and includes 80 km of potential host stratigraphy. Corunna Downs sits strategically between Atlas’ Mt Webber and McPhee Creek tenements, and can play an important part in Atlas’ growth strategy as iron ore market conditions become more volatile and challenging.CITATION:Mainwaring, J H, Howard, P J and Darvall, P, 2015. Discovery of the Corunna Downs deposits, in Proceedings Iron Ore 2015, pp 305–312 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By T. Koulomzine, R P. Jaeggin

The claims now held by Mount Wright Iron Mines Co. Limited were acquired by staking in 1956, 1957 and 1958, i.e., some time after the major deposits of the Quebec Cartier Mining and Normanvi!le Mining Co. (formerly Quebec Cobalt & Exploration Ltd.) were already discovered and partly outlined. The choice of the location of the Mount Wright hold-ings was governed simply by the -availability of ground still open to staking and by its proximity to properties held by major iron companies. Mount Wright Iron Mines had no previous knowledge of the geology and no aeromagnetic results were available to it to guide the choice of areas to be staked. In order to explore the newly ac-quired claims it was decided to make a grid of widely spaced magnetic profiles on the ground rather than use aeromagnetics. This afforded the possibility of making some geological observations simultaneously with the geophysical measurements.

Jan 1, 1961

By Norman Disley, David B. Counter, Lionel Hebert

Misfires in underground and surface production blasts can be costly. Costs can arise from loss of resource, production interruptions, having to redrill or otherwise refire the blast (a hazardous process at best), due to added secondary blasting or breakage, and/or from increased LHD maintenance costs attributable to poor fragmentation.

Jan 1, 1996

By Norman Disley, David B. Counter, Lionel Hebert

Misfires in underground and surface production blasts can be costly. Costs can arise from loss of resource, production interruptions, having to redrill or otherwise refire the blast (a hazardous process at best), due to added secondary blasting or breakage, and/or from increased LHD maintenance costs attributable to poor fragmentation.

Jan 1, 1996

By Andre Panteleyev, Charels S. Ney, John M. Anderson

"Sam Goosly prospect, 22 miles southeast of Houston, B.C., was discovered in 1967 through geochemical reconnaissance. Soil sampling interpreted with respect to an east-to-west ice movement led to drilling targets.Mineralization is in a window of rocks thought to be Hazelton Group surrounded by Tertiary volcanic rocks and intruded by two stocks separated by about one mile. A westerly quartz monzonite stock is dated 61.1 m.y. and an easterly gabbro-monzonite complex is dated 52.5 m.y. The Tertiary volcanics are trachyandesites shown by the B.C. Department of Mines and Petroleum Resources to be in part extrusive equivalents of the gabbro, and they overlie Hazelton rocks uncomformably. Copper-molybdenum mineralization is sparsely developed in the westerly stock. Silver-copper mineralization forms an elongate west-dipping slab between the stocks in Hazelton rocks, which are continuously pyritized. The gabbro stock is not mineralized, but some dikes related to it are slightly so. Tertiary rocks are pyritized, but are not known to carry copper-silver mineralization. Hazelton rocks are divided into a lower conglomerate, an intermediate pyroclastic unit and an upper mainly sedimentary unit. They form a west-facing homocline. Coppersilver mineralization resides in the pyroclastic unit, mainly in a massive dust tuff through which are lenticular units of lapilli tuff. Well-mineralized rock is typically a breccia of light fragments in a dark chlorite-sulphide matrix. Sulphides are pyrite, chakopyrite and locally pyrrhotite, with very minor tetrahedrite, s phalerite and other sulphosalts. Rock alteration is predominantly a pervasive pyrite-sericite type, with widespread tourmaline, scorzalite, gypsum, ankerite and traces of fluorite. The most evident control of the copper-silver mineralization is the gross parallelism, over a strike length of 1.5 miles, to Hazelton strata, particularly a massive dust .tuff unit. In detail, mineralization crosscuts bedding and there is no appreciable banding within sulphides . A strictly syngenetic origin is untenable, but some initial concentration in a volcanogenic environment with subsequent modification by thermal processes seems likely."

Jan 1, 1972

The Tom's Gully gold mine is located 90km ESE from Darwin, in the Northern Territory of Australia. The orebody is the auriferous portion of a large sulphide rich quartz reef, hosted in the Wildman Siltstone Formation of the Early Proterozoic Pine Creek Inlier, at the NH extremity of the Mount Bundey granite-syenite intrusion. It was discovered by Carpentaria Exploration Company Pty Ltd on November 17th, 1986, using stream sediment geochemistry.The reef is 800m long at surface, strikes E-H and dips approximately 300 to the south, becoming progressively less steep. Only the eastern half of the reef is auriferous, with gold grades averaging 9 g/t plus anomalous silver, base metals and arsenic.The enclosing siltstone is a dark grey banded carbonaceous and pyritic metapelite, showing areenschist regional metamorphism and thermal effects from the adjacent pluton. Local folding plunging gently SW is cut by a south dipping fault, probably a thrust, in which the reef was later formed at about the time of the granitic intrusion. The main sulphides in the reef are pyrite and arsenopyrite, with gold occurring as microscopic particles in...

Jan 1, 1990

By Greg Yuriy

This paper discusses research carried out by the Laurentian University Mining Automation Laboratory (LUMAL) in the field of discrete-event simulation of mine equipment systems and reliability assessment of these machinery using genetic algorithms. The AutoMod simulation package, from Brooks-PRI Automation Inc., is used in this research. It is a 3-D discrete-event simulation/animation software tool for creating realistic depictions of manufacturing and materials handling systems. Discrete-event simulation involves modeling of real-life systems based on variables and events which occur or change at distinct points in time. In our case, a two level, multi-drift sublevel stoping model was created in AutoMod for the simulation of the equipment fleet employed in the development cycle (drilling, explosives loading, blasting, materials hauling, ground support) of a typical underground mine in the nickel mining region of Sudbury in Ontario, Canada. The equipment primarily considered in the simulation is Load-Haul-Dump (LHD) vehicles (scooptrams), drills, explosives-loaders and roof bolters. The purpose of the simulation study is to assess the impact of equipment failures to mine?s production throughput. In more detail, using Mean Time Between Failures (MTBF) data of scooptrams derived from a reliability assessment model based on genetic algorithms, LHD failures are incorporated into the simulation model. These failures cause production interruptions to the development cycle and consequently loss of hauling capacity. This paper will indicate the significance of equipment failures to a mine?s production and suggest a methodology based on the combination of discrete-event simulation and a predictive reliability assessment model using genetic algorithms for the study and analysis of mine equipment systems.

May 1, 2003

By Bill Dershowitz

Consider a deep gold orebody with grade of 4 g/t (0.11 oz/st). At the time of this writing, with gold prices at historic highs, it could be a good, but not great, prospect. But if it is a vein deposit, and those veins are 200 g/t (5.8 oz/st), it would be significantly more attractive if there was a way to produce directly from those veins, leaving the rest of the rock in place. [Figure 1 The red around each of the four injector wells shows areas of high pressure, where the lixiviant fluid is pumped into the rock mass, with orange and yellow indicating dissipated pressure. The black lines indicate some of the fracture pathways through which the lixiviant, with absorbed metal, flows toward the central recovery well where low pressure is indicated in blue. Lixiviant is pumped out through the recovery well. Image courtesy of Golder Associates.] There is a way to do this, in situ leach (ISL) or solution mining. It has been a viable commercial technology for more than five decades.

Jan 1, 2011

By S Rogers, D Stead, E Eberhardt

The last decade has seen a major increase in use of the discrete fracture network (DFN) approach applied to cave mining problems, often integrated within more complex geomechanical simulations. Because the value of the DFN model directly depends on the quality and quantity of available field data, there is the need to apply dedicated mapping procedures to collect sufficient structural data at the required engineering scale. This paper attempts to address several key questions about DFN modelling; for example: are current methods for fracture mapping suitable for DFN modelling? What are the critical parameters that we need to measure and what do we need to change in the current practice? Particularly at the earlier stages of a cave project, engineers may have to account for the lack of appropriate data, which manifests itself in the form of increased uncertainty and the difficulty to characterise variability in an objective manner using a limited set of data. DFN models could in principle be generated using limited data by assuming statistical distributions for the sampled parameters; however, engineers would need to be aware of the implications that such limited knowledge (and increased uncertainty) would have on stability analysis, fragmentation analysis and mine design. When used correctly, a DFN approach offers practitioners the opportunity to:maximise the use of fracture data collected from mapping of rock exposuresgenerate more realistic synthetic rock mass modelsprovide estimates of natural fragmentation that also account for rock mass variability.CITATION:Elmo, D, Eberhardt, E, Stead, D and Rogers, S, 2016. Discrete fracture network modelling – importance of accounting for data uncertainty and variability, in Proceedings Seventh International Conference and Exhibition on Mass Mining (MassMin 2016), pp 845–852 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 9, 2016

By J P. van Dijk, M Munro

Discrete vein modelling presents an innovative geology driven 3D modelling method for quantification of vein hosted mineral deposits, with far reaching potential for critical mineral supply and low impact resource extraction. By integrating key geological drivers with advanced discrete fracture network modelling, the DMX protocol (launched in 2019) converges to a more realistic representation of complex vein systems in three-dimensional space. The approach insights greater geologic reasoning in distributing mineral grades where vein boundaries are already defined. This presents a viable alternative to existing modelling and estimation methods and has important implications for mineral resource estimation and reporting. Further implications are discussed, where the enhanced understanding of complex orebody characteristics can potentially be used in optimising mining and mineral processing, supporting more sustainable and efficient mining practices.

Sep 1, 2024

By Javad Sattarvand, Amin Moniri-Morad

Predicting equipment failure behavior plays a critical role in providing a safe operation. Although various reliability evaluation methods are available for estimating failure behavior profiles, these approaches are based on mathematical formulation, leading to actual operation simplification and improper estimation of failure trends. This study proposes a discrete-event simulation (DES) approach to model fleet failure behavior. This approach can model the maintenance strategies in multi-component systems with minimum simplifications. In this regard, the first step was to collect a historical failure time dataset (e.g., the time between failures). Then, the DES model is established to predict the severity of failure events and design maintenance strategy considering actual operation circumstances. Afterward, the maintainability analysis was performed to estimate equipment downtime and availability. The achieved results showed that the system availability was about 85%. Also, the findings demonstrated that the DES could efficiently predict the equipment failure behavior using various stochastic events.

Jun 25, 2023