"ADVANCE planning of mining methods, from the first development openings to stope layout and pillar recovery, has long been accepted as a normal method of operating a mine. Recently, mine managers have become increasingly aware that advance planning of cost and accounting controls can also be considered a normal method of operation. The use of such controls is wide-spread in manufacturing industries. In mining, the gold mines of South Africa have pioneered, with marked success, in this field and have been closely associated with most of the research and field work in accounting control. Canadian mine managers are also beginning to realize the advantages of using planned costs. The control procedures which subsequently have been introduced at various mines have come to be known by such names as ""Responsibility Costing"" or Budgetary Control"".Budgetary control, the term used in this paper, is based on the concept of decentralized authority with centralized control. ;The control is achieved by measuring results against yardsticks which are in the form of budgets or standards. Bud-gets are made for the future activities of each possible operation as planned by the department head, and attention is directed to variations from this plan. Furthermore, the control process charges to each operation only those costs which are incurred directly for that operation, and which can be controlled by the person in charge. Thus, budgetary control relates results to the officials responsible for those results. Expenditures are analyzed according to the organizational structure of the mine and the people who run it, and not according to production processes."
"In early 2014, Pan American Silver Corp. commenced a project to construct a second shaft at its La Colorada underground mine located in Zacatecas State in Mexico. This was the first new shaft development project undertaken by Pan American Silver in the history of the company. The existing mine workings permitted the use of a raise bore for the excavation of the shaft opening, utilizing directional drilling in poor ground conditions to advance the pilot hole. This was an interesting project with many challenges and successes, and numerous lessons learned. The project was successfully completed in 2016, with the shaft operating at full mine production capacity within weeks. INTRODUCTION The La Colorada Mine has a long history dating from at least the 1920’s. The mine is located in the northern portion of Zacatecas State in Mexico in the Chalchihuites area, an approximate two hour drive south from the city of Durango. Pan American Silver acquired the La Colorada mining concessions in 1998, with mine production at that time consisting of only a few hundred tonnes per day. Over the course of the following 15 years, with the addition of an oxide processing plant and some expansions to the sulphide processing plant and site infrastructure, production was eventually increased to a maximum of 1,250 tonnes per day, all of it generated from conventional cut-and-fill stopes in the underground mine. An existing shaft was used to hoist the ore to surface, and over the years Pan American Silver had deepened the shaft and had changed out some of the hoisting plant. However, there were historic workings in close proximity to the shaft that made it unsuitable for personnel transport, and shaft maintenance was becoming difficult. The shaft was increasingly considered as a risk to the long term production continuity, and also to further deepening of the mine. In addition, expanding the capacity of this old shaft was not possible. Drilling of the La Colorada mineralization at depth commenced in 2010, with very good exploration success. As a result, by the end of 2013, the mine reserves had grown to a total of 6.5 million tonnes of high grade ore (388 g/t Ag, 0.36 g/t Au, 2.4 % Zn, and 1.3% Pb). Furthermore there were more (and higher grade) sulphide reserves than oxide reserves at depth. Following the completion of an internal study in 2013 with assistance from one of the international shaft contractors, a decision was made to increase the production from the mine with the construction of a new shaft and a new sulphide processing plant, a project with a calculated payback of 2.2 years."
Budgetary Control of Mining Operations