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By Donald R. Lessard

I. INTRODUCTION There is no question that the choice of an appropriate discount rate is a critical element in virtually all business decisions in extractive industries. The standard textbook approach relies on a single overall cost of capital for an entire firm, itself a weighted average of the firm's cost of debt and equity. But a single rate is appropriate only if the commercial risks and financing structures are similar for all projects under consideration. In extractive industries, appropriate discount rates are likely to vary greatly from project to project. Risks of projects differ markedly by mineral, by country in which the project is located, by stage in production, and by position in the project's life. Further, for a variety of institutional reasons, financing structures vary greatly in relation to these same variables and thus the discount rate appropriate to the entire investment and, in particular, to the sponsor's equity investment will vary even more markedly. Failure to select discount rates which reflect these differences can result in extremely distorted decisions. Our interest in this subject results from our ongoing research on alternative ownership and financing structures for large scale extractive ventures in less developed countries where risks to the various participants--the sponsors, the financiers, and the host government--vary dramatically with the different options. Given the magnitude of these differences, a single discount rate for all options is clearly inappropriate. However, there appear to be few guidelines for practicing managers to follow in setting appropriate rates. In this paper, we take a first step in this direction.

Jan 1, 1977

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 John Stubbs

Sub-Surface Shaft excavation Mine development Headframes Surface Production facilities Product storage and loading Tailings area Infrastructure Discovery Lodge Utilities Operations complex Port Marine loading Rail unloading and storage

May 1, 2013

By Sherwin F. Kelly

THAT gold ores occur in Georgia is a fact apparently not widely known outside of that state, yet in the last hundred years nearly $18,000,000 worth of gold has been mined there. The discovery of gold-hearing quartz was made in 1823 on the "Forty Acre Lot" (which now belongs to the Columbia Mining Co.), in McDuffie County, and about seven years later the first stamp mill on record was erected near there. In recent years Georgia's gold production has dwindled to an insignificant figure. However, with the increase in gold price, interest in this district has been revived, so an electrical geophysical survey was undertaken to aid in discovering new quartz veins, on a part of the Forty Acre Lot, the adjoining Hamilton mine, and the nearby Woodall property.

Jan 1, 1934

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

By ELIHU THOMSON

IN 1877, Professor Thomson delivered at the Franklin Institute, [Philadelphia, five lectures on electricity. The object of the lectures and the demonstrations, which were numerous and many of them original even to the employment of special apparatus constructed by the lecturer, was to show clearly that electricity, of whatever name, was the same., differing only in tension (as it was termed) and in the current flowing, or quantity (the old term), in steadiness or in wave-like character. In those days, the textbooks divided the subject into statical and dynamic electricity, with sub-divisions such as frictional electricity, voltaic electricity, magneto electricity, electromagnetism, thermo electricity, and animal electricity. The well-known Ruhmkorff coil,' or spark coil as it is now called (as when used for the ignition of automobiles), was employed to step, up a battery current to a high-tension discharge which would charge condensers, such as Leyden jars.

Jan 1, 1921

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

The Gosowong epithermal quartz-adularia vein, in the Halmahera magmatic arc, is a new discovery in an area of primary tropical rain forest with no history of gold mining or mineralization. The newly recognized mineral district also contains a number of other epithermal vein systems, two centres of porphyry Cu-Au mineralization, and a number of argillic and advanced argillic alteration zones that may be related to underlying mineralization. Gosowong was discovered and tested through the application of basic exploration techniques including drainage sampling, soil sampling, trenching, magnetics, IP, and diamond drilling. Lapse time from the initial reconnaissance discovery of a stream sediment anomaly to the release of inferred resource estimates of approximately 1.0m ounces was just over 3 years.

Jan 1, 1997

By Jon A. Carlson, W. Scott Williams

The EKATI"" Diamond Mine commenced operation in October 1998. It is operated by BHP Diamonds Inc., which is a part of the Non-Ferrous and Industrial Materials Division of BHP Minerals, a business unit of BHP Company Ltd. of Melbourne, Australia. The EKATI"" Diamond Mine is a joint venture of BHP Diamonds Inc. (51%), Dia Met Minerals Ltd. (29%), Charles E. Fipke (10%) and Dr. Stewart L. Blusson (10%). In December 1993, an office was opened in Yellowknife, Northwest Territories specifically for the then Northwest Territories Diamonds Project (EKATI"" Diamond Mine) development. EKATI"" Diamond Mine is located 300 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle in the Northwest Territories of Canada (Figure 1 ). The site is located in a remote tundra area of continuous permafrost, north of the tree line, which is part of the Canadian Shield. Wekweti (Snare Lake), a Dogrib community approximately 180 kilometres southwest of the project, is the closest neighbour. The mining area and facilities lie within the 10 960 hectares land leases held by the joint venture. The total claim block (core zone and buffer zone joint ventures) covers 344 000 hectares. To date, more than one hundred kimberlite pipes have been identified within the claims. Five of these provide the basis for the present mine plan. Total capital investment in the project is over C$700 million. At full production employment will be about 600, including employees and long-term contractors, with over 33% being Aboriginal from the Northwest Territories.

Jan 1, 2001

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 Maurice Séguin

The primary aim of all ground geophysical work has been, of course, to locate orebodies. As with any geo-physical method, its success depends on a proper mastering of the types of surveys and equipment used and their application to the physical properties associated with the orebodies. The Schefferville deposits are iron ores subjected to enrichment by the process of leaching. Although some ore types are porous and low in demiity, most of the ore zones have had a net increase in density brought about by enrichment. In the course of their formation, the magnetic characteristics of the rocks have usually changed, as much of the magnetite was altered to relatively non-magnetic iron oxides and hydrous iron oxides. Ali drift-covered areas underlain with iron-formation are potential ore-producing areas. From these first two physical proper-ties and a determination of the thickness of the over-burden, a combined gravity-magnetic-seismic and/or resistivity survey allows for the detection and sorting out of iron-formation and potential ore zones from the country rocks. If the iron-formation possessed relatively uniform physical and chemical properties, the problem of locating areas underlain with ore, using geophysical methods, would be greatly simplified. Unfortunately, the iron-formation is a complex assemblage of rock types, each having different physical and chemical characteristics. In spite of this, qualitative and semi-quantitative correlation between the results of the surveys and the geology and structure of the area could be established. In addition, a semi-quantitative to quantitative correlation of the values of the residual gravity anomalies with the specific gravity, the iron content, the porosity factor, the dimensions of the under-lying orebodies and the values of the ground magnetic intensity above a reference lithologie unit, with the per cent weight Fe304 recovery and the susceptibility, led to the discovery of a direct-shipping iron ore deposit in the Schefferville mining district of Canada.

Jan 1, 1968

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 Larry F. Barrett

Anaconda exploration in the Rico mining, district from 1978 through early 1983 resulted in discovery and partial definition of the Silver Creek molybdenum deposit. Approximately 44 million tons of 0.31% Mo are drill-indicated, and projections suggest that the deposit exceeds 200 million tons. No source intrusion has been intersected by drilling, but its composition is suggested by silicic alkali-alaskite porphyry dikes of intramineral age observed at the surface and in drill holes. Age data and fluid inclusion studies indicate that the deposit was formed 5.2 ±2 m.y. ago and that more than 1,200 meters of cover has since been removed by erosion. Both emplacement of the hypothesized source intrusion, and the geometry of the molybdenum deposit, were influenced by three major intersecting faults. The most significant of these, the Last Chance fault, juxtaposes Precambrian quartzite and greenstone against Pennsylvanian clastic and calcareous sediments within the mineralized zone. Wallrock alteration associated with the deposit is characterized by potassic, phyllic, and propylitic zones in non-calcareous rocks, and garnet and anhydrite-diopside zones in the carbonates. All +0.2% Mo mineralization is within the potassic and garnet zones. Pre-mineral faults that intersect the deposit contain the only surficial molybdenum, tungsten, and fluorine anomalies. Pervasive dispersion haloes of the indicator elements were intersected at depth by drilling in the discovery phase of exploration, and are particularly well-developed in the hanging wall of the Last Chance fault.

Jan 1, 1985

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

By Qingwen Shi, Brijes Mishra

Laminated rock can delaminate and fail under certain stress states. Delamination-caused roof fall and cutter roof failure is a common failure mechanism in roadways in Pittsburgh coal seam due to the existence of laminated shale roof. Two-dimensional numerical models were developed at laboratory scale based on the bonded particle method in order to simulate the delamination with particle flow code. In these models, an assembly of bonded particles and parallel weak planes represents the laminated rock. This model calibrated the micro-parameters of the bonded particlematerial and weak planes with laboratory data. The mechanism of fracturing and delamination in a laminated specimen was investigated using unconfined and confined compression test and unsupported roof compression test. The numerical results show that, under a constant horizontal stress, delamination occurswhen the stress is much lower than its compressive strength. The confined compressive test indicates that delamination is restrained by applying confining stress since delamination-caused failure does not occur during any stage of the confined compressive test. Unsupported roof compression tests showed propagation of cutter roof failure with initiation of cracks and delamination at the intersections of the roof and ribs. An outer failed zone and inner failed zone form separately. The separated zones connect and form an opening in the roof. The presented numerical results provide additional insight into process of delamination.

Sep 14, 2020

By D Johansson, C Yi

Blasting techniques are widely used to fragment rock masses into smaller pieces. Numerical modelling is an efficient method employed by many researchers in the blasting field. It is difficult for a conventional continuum-based approach such as the finite element method (FEM) to model the rock fragmentation by blasting and the expansion work on the rock by explosive and its detonation products. In this paper, the particle blast method (PBM) was employed to model the behaviour of the detonation and a bonded particle model (BPM) was used to model the brittle material to be blasted. A mortar cylinder with a centrally placed hole for the explosive was modelled and the results were compared to the experimental data. The blast process from crack initiation to fragment formation was analysed. The influence of coupling ratio on fragmentation was also investigated.CITATION:Yi, C and Johansson, D, 2015. Discrete element modelling of blast fragmentation of a mortar cylinder, in Proceedings 11th International Symposium on Rock Fragmentation by Blasting, pp 793–798 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 24, 2015

By Sahin Furkan Sahiner, Onur Golbasi

Effective maintenance planning is vital for coal mining operations, where haul truck fleets directly determine production continuity. This study presents a discrete event simulation (DES) model for evaluating maintenance strategies under multiple failure modes and their interdependencies. The model integrates corrective, periodic preventive, and opportunistic maintenance, dynamically updating equipment lifetimes through probabilistic time-betweenfailure and time-to-repair distributions. Applied to a fivetruck coal haulage fleet over a one-year horizon, results show that periodic preventive maintenance delivers the highest availability (76%) under unconstrained conditions, slightly outperforming corrective-only maintenance (75%). Opportunistic and integrated approaches performed worse (68% and 69%), reflecting redundancy from overlapping interventions. These findings suggest that structured preventive programs provide the most reliable outcomes when costs and resources are not limiting. The DES framework serves as a baseline for future models incorporating cost, spare parts logistics, and workforce availability, supporting robust maintenance planning in coal mining operations.

Feb 22, 2026

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