Papers - Theory and Interpretation - The Appraisal of Ore Expectancies (Mining Tech., Jan. 1947, T.P. 2090)

Quantitative appraisal of the chances of finding various tonnages and grades of ore clarifies any exploratory development proposal. Ways are discussed of appraising chances in conformance with probability principles, and graphs are suggested to show tonnages, grades and the corresponding judged expectancies. Introduction When exploratory development of a mineral deposit is contemplated, three interrelated questions normally must be answered before a sound decision can be reached. How much will the program cost? How much will the anticipated ore add to the immediate value of the mine? And what is the chance of developing this ore? To justify development, the deposit should present a favorable disparity between the three factors, cost, chance and return. If, for example, there is a 50-50 chance of success, the ore that is sought should have an immediate worth (after deducting all subsequent charges that it must bear) of more than twice the cost of the development. Likewise, if the chance of finding the ore is but one in five, that ore should enhance the immediate value of the mine by more than five times the cost of developing it- With sound economic and operating assumptions, the cost of exploratory development and a present value of anticipated ore may be estimated within reasonable limits. Less general attention has been given to appraising ore chances in comparable terms. The exploratory experience of the mining industry is broad enough that knowledge, vision and judgment may be combined to yield more tangible evaluations of Ore expectancy than are now customary' A way of making such appraisals is suggested herein. The mathematics of probabilities cannot be applied directly to the search for ore. By coupling applicable principles of probability, however, with pertinent experience gained in mineral exploration, an estimate often can be made of the chance of finding a certain tonnage and grade of Ore in a specific location. Such estimated, or judged, expectancies for the several blocks of ground in a deposit may be combined in a simple chart to show the relationship of the various exploratory possibilities and the potential magnitude of the deposit' An engineer or geologist may find that the quantitative thinking required for an appraisal of this type is an aid in clarifying and coordinating his views and recommendations. For a person wishing to understand these views, an ore-expectancy