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By M Aros, L Reilly

Iron ore is normally sold in bulk at certain specifications. These include iron grade and specific contaminant grades, typically silica, alumina, phosphorous and sulfur. These target grades are normally agreed between the mining company (producer) and the steelmaking company (customer).This study presents an alternative to traditional cut-off grade calculation, using linear programming that maximises the total ore inventories within a predefined mining envelope while meeting the specified targets. Providing a feasible mining sequence that maintains the target grade is not covered in this study.The method was applied to Fortescue’s operations. The complexity arising from differing ore quality within each mining horizon, variable yields and upgrades and the need to control iron and contaminant grades provided a good opportunity to test an alternative method of ore selection. The new method significantly reduced the time spent in cut-off selection and sensitivity analysis, and provided an optimised solution.CITATION:Aros, M and Reilly, L, 2014. Ore selection optimisation for an iron ore deposit using linear programming, in Proceedings Orebody Modelling and Strategic Mine Planning Symposium 2014, pp 345–350 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 24, 2014

By P Sha

"An EXTENDED ABSTRACT is available for download. A full-length paper was not prepared for this presentation. The Elaine Dorothy Cu-Au (REE-U) skarn deposit in the Mt Isa Inlier, Queensland, Australia is characterised by extensive metamorphic calc-silicate hornfels long before hydrothermal skarn and complicated deformation history. The deposit is hosted by the Corella Formation (1780–1740 Ma) and exhibits two phases of skarn formation in the study area – banded fine-grained diopsidic hornfels (Phase 1) and coarse-grain pyroxene skarn (Phase 2). Phase 1 skarn is predeformation and is interpreted to have been caused by the 1743–1734 Ma Burstall Magmatic Suites, whereas the coarse-grained pyroxene skarn (Phase 2 skarn) postdates the deformation and peak metamorphism events. Phase 2 skarn consists of prograde pyroxene, less garnet and titanite, retrograde epidote, REE-allanite, amphibole, biotite, and later sulfides, carbonate, quartz, anhydrite and chlorite. It hosts most of the copper mineralisation, with the REE elements occurring mostly in allanite. Titanite coexisting with allanite and Cu-Fe sulfides in Phase 2 skarn has been dated by laser ablation inductively coupled plasma mass spectrometry (LA-ICP-MS) at 1524 ± 9 Ma (207Pb/206Pb). The ages are similar to Williams-Naraku Batholiths, which outcrop approximately 40 km to the east in the Eastern Fold Belt. In Elaine Dorothy, the isotopic compositions for calcite cluster around 12.2‰ d18O and -3.7‰ d13C. It probably resulted from a mixing processes between marine sourced carbon-oxygen (ca 20‰ d18O and -0.5‰ d13C) and other distinct geochemical reservoirs, eg magmatic C-O. These features indicate that Phase 2 skarn and Cu-Au (REE-U) mineralisation may be related to unexposed intrusions at deeper levels.CITATION:Sha, P, Spandler, C and Chang, Z, 2015. Elaine Dorothy Cu-Au (REE-U) skarn deposit, in Proceedings PACRIM 2015 Congress, pp 445–450 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 18, 2015

The title of this paper suggests rather a comprehensive survey of the industry, but since it is not possible to do justice to this in a short paper, and, as the bulk of the Australian trade consists of buttwelded tube, the author proposes to deal only with this type.The buttweld process has been praetised for many years and, as the methods of manufacture are not widely known, a brief history of its development may be of interest. Few good reference books in the English language are available, and this reticence may possibly have retarded advancement in manufacture.The earliest method of making ferrous tubes consisted of bending a thin plate or strip to form a "skelp." The "skelp" was then raised to a welding heat and hammerwelded on an internal mandrel on a smith's anvil. Necessity, however, soon produced mechanical methods of making tubes, and, in 1812, an Englishman named Osborn patented machinery for "welding and making barrels of fire-arms and other cylindrical articles." The apparatus was arranged as shown in Fig. 1.The skelp was raised to a welding heat and placed in the swage block "A." A mandrel was then inserted and the tube lapwelded by the action of the tilt hammer.Various modifications of this apparatus quickly followed, to keep pace with the rapidly growing demand and the exigencies of war. These tubes were essentially of short length and mainly used for gun barrels. The advent of coal gas for lighting (patented by Murdoch) created a demand for small tubes of longer length, and necessity, as usual, produced a solution. In 1824 Jas. Russell, from *Works Manager, Stewarts & Lloyds (Australia) Pty. Ltd.

Jan 1, 1935

By D Brown, Z Tabor

Projects must be flexible to account for the rapid development of new technologies and changing stakeholder expectations. Coupled with calls for bleeding-edge solutions, customers, shareholders, and regulators demand robust, safe products and systems-of-systems. Developing and integrating these solutions is becoming increasingly complex and maintaining the flexibility required to ‘pivot’ to effective solutions can be a serious challenge. The necessary flexibility is fundamental to the Agile ethos, and this family of methodologies therefore offers a potential solution to this challenge (Beedle et al, 2001). These have traditionally been delivered with systems engineering applied through a Waterfall methodology. Agile Systems Engineering combines both approaches and presents a means to achieve these goals without compromising flexibility, quality or safety. A robust methodology for the application of Agile Systems Engineering is required to enhance practical outcomes and reduce risk for real-world mining projects.

Sep 1, 2024

Major Francis Hamilton Buchanan coined the term `laterite' (Latin; brick-rock) in 1807 for the red earths used for building blocks in southern India. Although these earths were actually weathered basalts, the term is now applied to weathering profiles developed upon a wide range of bedrocks. The Ni-laterites are a special class within the broad laterite family.

Jan 1, 1996

A forecast of energy demand in the non-commu- nist world to the year 1990 is presented with com- ments on the expected effectiveness of conservation efforts in achieving more efficient utilization of energy. A forecast of energy supply for the same period is presented showing the contribution of oil, gas, hydropower, coal, and nuclear fuels, with brief comments on the factors constraining the rate of growth of non-oil energy supplies. The role of `synthetic fuels', i.e. liquid or gaseous fuels produced from coal, oil shale, and tar sands, is reviewed with brief discussion of factors affecting the development of this industry. In somewhat greater details, the growth of demand for oil by geographic regions is analyzed. Particular attention is directed to the source of the oil supplies which will be required. The anticipated rate of discovery of new oil reserves is discussed with comments on lead times required in the development of new discoveries in hostile environments such as the Arctic and deep oceans. The continuing importance of oil supplied from countries which are members of the Organization of Petroleum Exporting Countries (OPEC) is illustrated. Oil will continue to be the marginal ('balancing') source of world energy supply throughout the forecast period and although it now appears that oil supplies will be sufficient to balance the energy equation during the 1980s, little flexi- bility will exist to cope with unexpected growth in demand or slippage in supply. Prudent energy re- source management will require major efforts to stimulate conservation and also to stimulate the rapid development of conventional and new forms of energy supplies and changes in energy consump- tion patterns to utilize the new supplies. Because of the long lead times and the massive capital require- ments involved, governmental policies are needed soon which will stimulate conservation and which will encourage businesses to move rapidly to assure the energy supplies the world will require in the 1990s.

Jan 1, 1978

By A Stasi, B Brice

Water is a limited and precious resource in Australia. Because of the increasing demand for water from all sectors of the economy and the variability in supply, efficient management of water resources is of vital importance. The national water reform agenda has provided a strong impetus to all states and territories to progressively move towards more efficient and sustainable water management. The Queensland Water Act 2000 is the legislative framework for providing water for the environment and for planning for the security of supply to water users. The comprehensive water planning process prescribed in the Act results in new tradeable water allocations that are separate from land. These water allocations are well specified and can be traded on a permanent or temporary basis. Trading of water allows it to move to its highest value use, thereby encouraging the most efficient distribution of this limited resource. In addition to transferring ownership of water allocations, it is also possible to change the attributes of the allocation, such as the location from which water may be taken. Changes to water allocations are subject to approval from the resource manager. Pre-testing allows for certain changes to be approved very quickly, making the trading process more streamlined and cost effective. Temporary trades, or seasonal water assignments, currently account for the majority of water trades in Queensland. However, permanent trading activity is expanding steadily as old water entitlements are converted to tradeable water allocations and as the market matures. The permanent trading market provides significant opportunities to the mining sector. It allows mining companies to buy water allocations at market prices without compromising environmental outcomes or causing third party impacts.

Jan 1, 2006

By Servant S

In the mine of this study, cemented hydraulic backfill is placed under the form of a slurry at a percentage of solid by weight varying from 50 to 65 per cent. This slurry settles and cures in the stope. During this process an important amount of water must be drained from the scope. Field observations in the case studied here show that the geometry of the drains system has a significant impact on the drainage of the stopes. The mode of filling produces a backfill showing an evident stratification typical of a sedimentation process. In situ observations on this material show that this stratification translates into a very strong heterogeneity in the physical properties of the cemented backfill. This heterogeneity should affect the hydraulic conductivity of the backfill in the scope. In order to study this aspect, finite element simulations were performed. This paper presents the results of these simulations, where the impact of this stratification on hydraulic conductivity is related to the performance of the backfill drainage system for various geometry. This preliminary study is aimed at providing a better understanding of the role of the drains in the dewatering process of the backfilled stope in the case of this Mine.

Jan 1, 1998

The Sons of Gwalia Mine in Western Australia is situated about 140 miles north from Kalgoorlie in arid country, where supplies of fresh water are difficult to obtain.Mine salt water is used throughout the treatment plant, whilst fresh water for domestic, boiler, and power purposes is pumped from a number of shallow outlying wells. The waters from all wells are constant in character, although they vary in the quantities of salts contained.An average sample of mixed waters gave the following analysis (Gr. per gal.):Sodium chloride 70.82Magnesium chloride 33.03Calcium chloride 26.98Calcium carbonate .. 11.57Calcium sulphate 22.71Iron oxide and alumina 2.10Silica and insoluble 4.58When this water is used in the boilers in its natural state it is scale-forming and intensely corrosive.

Jan 1, 1927

By P Gomez, R Baumgartner, G Escobar

"The Cerro Corona mine consists of a Cu-Au porphyry deposit located in the Andes of northern Peru. The deposit comprises a typical Cu-Au multiphase porphyry mineralisation that has been overprinted by an epithermal event. This has generated a complex pattern of argillic alteration facies, which was accompanied by a locally structural-controlled Au-Cu mineralisation with the presence of gold and limited Cu sulfides and sulfosalts. These features, along with the porphyry-style mineralisation, produced a multifaceted occurrence of gold.Since the beginning of operations at Cerro Corona in 2008 there has been a continuous improvement of the geological and mineralogical knowledge. All mineralogical studies have mainly focused on host rock types and, to a lesser extent, alteration minerals, but little work has been done on the mineralisation itself. As a consequence, limited mineralogical information was available for use in the process optimisation initiatives.In the last two years, a series of mineralogical characterisation studies were undertaken with two main goals. First, to gain an understanding of the mineralisation genesis and second, to obtain a detailed characterisation of copper and gold minerals to support ongoing process optimisation. The first goal was achieved by conventional optical microscopy while the second required electronic microscopy and other microanalyses due to the necessity of quantifying several minerals of interest for the processing.The results were used to refine pre-existing geometallurgical domains, explain copper and gold losses in the flotation process and to some extent, improve copper and gold recoveries. The mineralogical characterisation is an ongoing work. Mineralogy provides the basis for any optimisation exercise since it looks in detail at the material to be treated and therefore, should be part of all geometallurgical programs.CITATION:Baumgartner, R, Gomez, P and Escobar, G, 2016. Comprehensive Mineralogical Characterisation at the Cerro Corona Cu-Au Porphyry Mine – the Fundamental Key for Geometallurgical Applications, in Proceedings The Third AusIMM International Geometallurgy Conference (GeoMet) 2016, pp 221–230 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Jun 15, 2016

Mining operations in the Obuasi mine of AngloGold Ashanti Limited began in 1897 using mainly gravity concentration and amalgamation to recover the gold from predominantly high-grade quartz ores. The mine is primarily an underground operation, although some surface mining still takes place. Ore is currently processed by two main treatment plants: the Sulfide Treatment Plant (STP) for underground ore and the tailings treatment plant for tailings reclamation operations. STP was commissioned in February 1994 to treat 180 000 t/m of double refractory gold ore and it hosted the then world's largest commercial scale bacterial oxidation plant which uses Gencor's BIOX« technology. Gold is recovered by gravity and flotation, with the regrinding of the sulfide concentrate before bio-oxidation to liberate locked gold in sulfi de minerals. The BIOX« product is leached using the carbon in leach (CIL) process. Gravity gold recovery is a major component of STP operations and its contribution to overall plant recovery is about ten to 13 per cent. Gravity recovery has undergone series of technological upgrading, since the very first circuit which consisted of a Knelson concentrator and a Gemeni shaking table which was incorporated into the milling circuit at the start of the plant. Presently, each of the gravity circuits which consists of Knelson concentrator(s), cyclones and Gekko InLine Reactors (ILR), are located at the Milling and BIOX« circuits. More recently a new gravity recovery facility comprising of four 48 inch Knelson concentrators and cluster of ten inch cyclones have been incorporated at the tail of the flotation circuit. An additional ILR will be commissioned in 2010 to treat the concentrate generated from the new Semi Autogenous Mill #2 (SAG 2) Knelson: concentrator tower under construction. Since the inception of STP, significant gravity recoverable gold has been recovered via Knelson concentrators and the employed circuits have seen a number of modifications and upgrades, motivated by ore mineralogical changes and recovery concerns. The pioneering adoption of the ILR technology in 2001 and 2003 was a critical factor in enhancing the improved recovery benefit of the gravity circuits. Therefore the objective of this paper is to highlight the mine's experience in the gravity recoverable gold process with emphasis on plant modifications and gravity equipment upgrade. Operational challenges and the contribution of gravity gold to overall plant recovery are also discussed.

Aug 1, 2010

By Bush P. R, Hale M, Dixon C. J, Wheatley M. R

Barium anomalies in drainage sediments can act as indicators of barite mineralization and path- finders for lead-zinc mineralization. Their detection in an arid climate has been investigated in two areas of Saudi Arabia. At Rabigh, 150 km north of Jeddah, barium anomalies found in wadi sediments reflect barite veins which occupy Tertiary faults in Precambrian metavolcanics and granodiorite. In the Wadi ad Dawasir area, 650 km east of Jeddah, the sediments of wadis draining the Jabal Tuwayq escarpment have been found to contain anomalous concentrations of barium derived from diagenetic barite in the Sudair formation siltstones and shales. Barium dispersion in these wadis is predominantly clastic. Near to the source rocks, barium occurs in relatively coarse grains of barite. Owing to the three well-developed cleavages of barite, its crystals readily break into cleavage flakes during fluvial transport in flash floods; as a result, the longest anomalous dispersion trains are found in the 250 to 600 um fraction. Wadi sediments finer than 250 um have relatively constant and low barium contents, being dominantly composed of windblown sand.

Jan 1, 1988

By H Allday

The mining industry’s attention has shifted over the last decade with the recovery from the downturn resulting in greater development of innovation and new work methods in a bid to remain competitive and deliver higher productivity. The emphasis on cost reduction to improve profit margins has primarily been the focus of the “work smarter” campaigns embraced within the industry. But is this strategy holistically the best-for-business, or does it place a ceiling on revenue opportunities and inhibit mining companies from truly maximising value? Businesses need to maintain a balance between active cost management and revenue generation often resulting in cost reduction strategies at site level. These strategies have merit, assessing areas of cost wastage across operations and creating space for opportunity. However, this potentially can create distractions from the goal of enabling growth and lead to the sacrifice of quality and delivery. Focusing too heavily on cost reductions without addressing revenue generation is an unprofitable lens to look through, and the relationships between cost, revenue, quality and profit margin can often be overlooked resulting in missed opportunity to maximise value. How these relationships are effectively employed by mining companies to reap the rewards from an overarching corporate perspective down to site level remains a fluid concept depending on the nature, operating market and strategy of the business. A common directive from businesses to their operations is to strive for greater profitability and productivity. The quantification of these requirements, and the nature of the cascading message delivered, impacts the methods employed by the operational team to meet the expectations of the business. Cascaded strategies, if not delivered with appropriate participation and buy-in can often be perceived to be knee-jerk and create frustration for operations who are squeezed to deliver on expectations by slashing site costs. This squeezing is not only felt by the mining operation but at the individual level and can result in increased team stresses. In some cases, this may also steer behaviours towards activities that result in corner cutting and an elevation of operational risk, potentially increasing associated incidents and injury. Driving down costs by any means can create an unhealthy tunnel vision where value is no-longer assessed for best-forbusiness results. By flipping the viewpoint to a value-based approach revenue opportunity may be realised and potentially exceeded, however this opportunity may be missed if value is over shadowed by a cost heavy focus. By analysing a selection of real operational cases (ranging from mining contractors through to in-house mining giants), it becomes apparent that practical revenue maximisation strategies are not only key to an increase in value and cash flow but to a stronger understanding of business drivers for sites and operators alike. In the cases evaluated additional revenue opportunities are foregone in favour of cost reduction strategies resulting in negative impacts on the associated operations and wider businesses. Alignment towards value generation is king. If strategies are not implemented focusing towards value and revenue maximisation, the opportunity loss experienced by mining operations could continue be great and the question should be posed; when the next up-turn hits will operations be ready to reap the rewards or still have a glass ceiling above their heads?

Mar 15, 2021

By M Johnson, M Horrigan

The scope of this report is to examine the aforementioned hypothesis by performing a detailed analytical comparison of a P&H electric rope shovel to an O&K diesel powered hydraulic excavator. In order to complement the integrity of the concluding results, two different size categories will be analysed in order to demonstrate that the findings can be extrapolated and applied to all the machinesÆ size classes. These two size classes are categorised by their bucket sizes and they are in the range of 43 - 58 cubic metres and 23 - 26 cubic metres. It should be noted that electric powered hydraulic excavators will not be considered in this report. In order to compare the electric and hydraulic types, the machine variants that will be analysed are commercial cost-effectiveness and operational flexibility. Although operational flexibility can be an ambiguous characteristic, a clear and thorough definition describing its exact meaning has been included. In order to simplify this study, all the data collected for this comparison have been for overburden removal, eliminating the variation that occurs with the movements of the shovel when selectively mining in the ore deposit. Thus, it ensures that all the data that is compared stems from a common origin for all the shovels. In other words the information will be compared when digging in the same material, loading into the same sized haul trucks, and when possible, with the same operators. Theoretical data received form the respective manufacturers, and actual data obtained from Mount Whaleback, was used for this comparison. This leads to the final comparison, where the operational flexibility and the cost-effectiveness are evaluated, with respect to their individual importance, ultimately influencing the final recommendation.

Jan 1, 2002

The Elura Orebody consists of a number of parallel, vertically oriented pipe-like structures of pyrite-sphalerite-galena mineralization located at the core of a structural dome. Concentric zoning of the mineralization into an outer Siliceous, intermediate Pyritic and inner Pyrrhotitic Zone has been previously recognized and is used in routine geologic modelling of the lead, zinc and silver grades.Statistical analysis of the metal grade distribution in the orebody has confirmed the importance of the mineralogical zones in the understanding of grade trends. The gradational nature of intra-zone boundaries, especially those related to the subjective definition of the Siliceous Zone, are apparent in the statistics.

Jan 1, 1990

By P D. Munro

"This is a reprise of the paper ‘Back to the Future – Why Change Doesn’t Necessarily Mean Progress’ presented to the Tenth Mill Operators’ Conference in 2009. It was observed that the ‘boom and bust’ cycles of the industry, together with trends in tertiary education and the effects of fly-in fly-out (FIFO) operations raised serious questions about the sustainability of human capital in the mineral processing sector.In 2016 we find ourselves in a ‘bust’ after enjoying a decade of the longest commodity price ‘boom’ in a century. In the ‘boom’ did we:make any technological breakthroughs?put measures in place to improve our human capital, especially in the area of ‘professional formation’?The paper makes observations on the current performance of mineral processing engineers and the organisational milieu in which they operate. It questions whether mineral processing engineers are actually ‘adding value’ at some sites given their organisational and operational practices.Some technical trends are examined and what it might mean for mineral processing engineers.Given the above and demographic trends for mineral industry professionals, changes to the seemingly current laissez-faire model of professional development are proposed.Citation:Munro, P D, 2016. Back to the Future - Still on the Dark Side, in Proceedings 13th AusIMM Mill Operators’ Conference 2016, pp 341–348 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Oct 10, 2016

By C Dowding, C Aimone-Martin, P Abeel

This paper presents measurement and analysis of the dynamic response of a five-storey building to very high frequency excitation (>100 Hz) from blasting vibrations originating from a contiguous excavation of rock. Velocity response measurements in the rock and on the structure were employed to calculate the time-correlated dynamic displacement response of the building to blasting. Time-correlated structure response measurements are needed to advance the understanding of the response of urban structures to high-frequency excitation. Current regulations and understanding are based upon measurements of the response of one- to two-storey residential structures by 10 to 40 Hz excitation. The extension of these observations to taller structures when excited by high-frequency excitation needs to be investigated further.Measurements show that the amplification patterns at the ground level and top of the structure match or are lower than that observed by the US Bureau of Mines (Siskind et al, 1980) for the shorter residential structures. They decrease with increasing peak particle velocity. From the measurements, the global transverse shear strains found by differentiating ground floor and top displacements were calculated to be 12 µstrains. Time-correlated bottom and top of structure displacements show that building response may be more reflective of wave propagation up the structure than whole-structure inter-storey drift.In addition, a 3D model was used to compare computed displacements and strains to measured results. Modelled responses varied considerably, both in magnitude and location of the maximum strain. No conclusion can be made regarding the best 3D model to employ to simulate building response. More data such as motions measured at many points in the structure are needed. Maximum inter-storey transverse shear strains calculated with the model were found through the acceleration excitation and were less than 12 µstrains for 37 mm/s rock motion excitation. The inter-storey transverse shear strains calculated with rock displacement input were less than that found with the acceleration excitation.CITATION:Dowding, C, Aimone-Martin, C and Abeel, P, 2015. Measured and modelled response of a multistory, urban structure to high-frequency blasting excitation, in Proceedings 11th International Symposium on Rock Fragmentation by Blasting, pp 211–220 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 24, 2015

By Dodd SF

Valuation of mining companies and their underlying assets prepared by brokers' analysts are, by necessity, approximations. The reliability of the valuations is entirely proportional to the quality of available data, the reliability of forecasts and the nature of underlying commodity price assumptions. The latter is perhaps the greatest single cause of gross variations in company and asset earnings estimates and- valuations. Assumptions are often necessary regarding commodity price achievement based on commodity hedge positions. Public disclosure from listed companies provides a sound base from which to project earnings, cashflows and balance sheets. The uncommon disclosure of projected production and cost schedules often reduces the reliability of future estimates. The application of reserve and resource estimates is contentious with practitioners applying differing weightings to importance of resources in estimating mine lives (and therefore cashflow streams). Valuation methods applied in equity markets usually focus on relative value and the identification of pricing anomalies. The commonest ""rules of thumb"" applied in the valuation of mining companies (and therefore their underlying assets) is with the use of year specific price/earnings (P/E) and price/cashflow (P/CF) ratios, with low multiples suggesting undervalued assets, high multiples overvalued situations (but these rules can often be clouded by market expectations of underlying commodity price movements). Another simply applied valuation tool is to examine the examine the value placed on reserves and resources by the market. Inexpensive gold in the ground (expressed as $ of market capitalisation per ounce of reserves or resources) might indicate a buying opportunity, but the market does discount the value of gold in the ground prior to mine development and where development risk is perceived.

Jan 1, 1994

The Resource Management Act has been in force now for approximately ten months. This Act, and the Crown Minerals Act which accompanied it, have substantially changed the manner by which mining operations and other resource uses obtain access to resources and are subject to controls of their environmental effects. This paper briefly summarises the key elements of the regulatory provisions of the Resource Management Act. It identifies the types of resource consents required, and discusses these and procedural matters in relation to mining in Otago. It addresses the transitional provisions and highlights inconsistencies and difficulties in the implementation of these provisions. This paper identifies potential future developments in the planning and regulatory environment relating to mining in Otago.

Jan 1, 1992

By I Minniakhmetov, J Ashford

Orebodies constitute naturally occurring, commonly highly variable concentrations of minerals in the earth’s crust formed through varying and highly unpredictable processes. Orebody knowledge is a core foundation of a mining company’s asset base underpinning all decisions about Mineral Resource and Ore Reserves, future production, development and ultimately the profitability and competitiveness of a mining enterprise. The decision to invest in a mineral project is usually based upon a techno-economic evaluation of the project and having clear approval pathways to gain local community support and address social and environmental impacts. The main objective of the techno-economic evaluation is to determine the optimum development sequence for the particular orebody in question and to estimate the economic viability of the project and the future return on investment to its stakeholders, balancing the inherent value of the mineral in the ground against the costs of development and market pricing. With the exception of market-driven commodity prices, virtually all revenue and cost estimates fundamentally stem from the understanding and subsequent modelling of the orebody. A reliable estimate of the ore deposit grade and other geological value-drivers is the foundation upon which the business case for future mine development and operation is intricately dependent. Orebody knowledge is, therefore, the fundamental driver of the mineral project cycle, influencing the progression of studies and consequently, the resource company’s ability to declare Exploration Results, Mineral Resources or Ore Reserves which govern the source and cost of funding available to the project. Drilling provides a ‘vector’ to the true nature of the orebody and effectively buys time to manage the technical risk associated with the orebody. Despite its perceived high cost, in both time and money terms, drilling is the only available technology for acquiring the necessary orebody knowledge to support technical and economic studies and to minimise orebody-driven cash flow uncertainty and volatility. However, like all costs, pressure to minimise drilling budgets is ubiquitous across the minerals industry. Paired with inappropriate key performance indicators, drilling is often regarded as a cost to be minimised, rather than an investment to be optimised. Furthermore, as future deposits get deeper and more complex, the collection of orebody knowledge is increasingly on the critical path for project development. The increasing cost of data collection pertaining to these deposits increases the temptation to minimise orebody knowledge gathering at the cost of long-term value as the reduction or postponement of drilling results in greater orebody knowledge risk at all stages of the value chain. Indeed the true cost of the decision to drill less is rarely known until the mine is in operation, well after the mine project evaluation team has moved on. This paper aims to promote orebody knowledge as the fundamental source of endogenous project financial risk and, consequently, its critical importance in project financial evaluation. Furthermore, the report documents experimental research into the development of an econometric model for valuing orebody knowledge. Using the density of drilling data as a proxy measure of orebody knowledge, the proposed approach integrates well-established stochastic grade modelling techniques with the mathematical mechanics of Decoupled Net Present Value (DNPV) which, combined with stochastic grade modelling (conditional simulation), lends itself to the financial International Mining Geology Conference 2022 | Brisbane, Australia and Online | 22–23 March 2022 3 assessment of orebody knowledge risk. Based on this approach, a metric is formulated, representing the minimum value of the orebody knowledge added by additional drilling

Mar 22, 2022