Mine Evaluation-Design Optimization

This paper describes a process which finds the maximum worth of a mineral deposit. The procedure requires two phases. The first uses a microcomputer evaluation model to find the optimum design input, with minimum attention giving to actual mining constraints that might exist. The second phase runs the first-phase design parameters through a direct simulation model on a mainframe computer. In phase one, financial, economic, and geotechnical data are entered; and an idealized list of design parameters is output. The list includes optimum values for cutoff grade, mine life, mine size, paytons, paygrade, and payvalue. In addition, the model generates pro forma operating and cash flow statements and it indicates the maximum net present value (NPV) possible for the deposit along with the probability of that oc¬curring. The initial results imply perfect mining conditions. In phase two, when actual mining selectivity, sequence, and other practical design considerations are related in a direct simulation model to the optimum criteria found above, the maximum NPV invariably decreases. However, if it is still satisfactory (NPV greater than or equal to zero) then the maximum worth/ optimum design have probably been found in the first iteration. If, on the other hand, NPV is now unsatisfactory, then design compromises must be made and simulated, and the results rerun through the evaluation model. If several iterations fail to yield a positive NPV then the deposit is most likely unfeasible t for the forecast economic conditions used in phase one.