How TO REDUCE CAPITAL AND OPERATING COSTS AT HEAP LEACHING PROJECTS

Good morning ladies and gentlemen. I would like to thank Hans von Michaelis for inviting me here today to talk to you on the subject of "How to Reduce Capital and Operating Costs at Heap Leaching Projects". The comments I have to offer are based on my experiences in gold heap leaching by Newmont Gold Company in Nevada, by Newcrest in Western Australia (formerly Newmont Australia), by Minera Yanacocha in Peru, by Penmont in Mexico, by Z­Mont in Uzbekistan, by the Hochschild Group in Peru and expe­riences in copper heap leaching by Magma Copper Company in Arizona and as a consultant on several other smaller projects worldwide. These comments are a mixture of technology, ideology, philos­ophy, strategy, logic and opinions and might be looked at by many of you as "one man's view". I like to look at them as "a view from the bridge". Let me add that it doesn't bother me that you may not agree with my comments and that I would be interested in your comments or criticisms at the end of this presentation. I don't intend to discuss the details of the mineralogical and metallurgical test work. I will assume, for this talk, that the test work has been conducted very carefully and that the ore in ques­tion has been determined to be heap or dump leachable. Let's begin with a couple of don'ts! ! First, "don't build the mill until you have a mine". This might sound to many of you as fundamental but believe me it continues to happen. The minable reserves should be well known and established as being economical to mine and leach. NPVs, ROis and IRRs are fine if you can be sure of the gold price you use in your calculations. The best method is to carefully estimate the capital cost and, most importantly, the operating cost per ounce of gold recovered which should include the repayment of the borrowed capital and the interest thereon. For example, if the operating cost under these conditions is $200 per ounce, you have a project. If it is $400 per ounce, walk away f om it. Incidentally, the same prin­ciple can be applied to projects involving other metals such as silver, copper, lead, zinc, etc. The second don't is - "don't be sheep". Don't climb on the bandwagon with respect to design and operation because every­one else does it a certain way. Keep an open mind, be versatile, look for change, look for every possible innovation for reducing capital and operating costs. Beware of those who will tell you "we tried that it won't work" or "it's too expensive" or "that's a crazy idea" , <' ''what do you know about mining - you are a metallurgist aren't you" or "what do you know about metallurgy - you are a miner aren't you" or "only geologists can handle this issue". Be careful about pigeon-holing people according to their basic degree and experience. In these days of low metal prices, we need to consider everybody's ideas, as crazy as some of them might seem.