Quick guides to the evaluation of orebodies

"Annual mining revenue can be computed by formulae relating metal prices, smelting schedules, concentrate grade and recovery to known ore grade and an assessment of core samples. Operating costs at different daily tonnages are related to orebody shape, mining method, milling process and general plant services. Capital costs are related to sizing of mining equipment, mine development, plant-site topography, climate and accessibility, plant services and personnel housing. IntroductionA crude guide to the average 1978 cost of mine projects is shown in Figure 1, but the costs of many mine projects have differed widely from the graphed average costs of $800,000 T0.6 for underground mine/mill projects and $400,000 T 0.6 for low-grade open-pit mine/mill projects.High mine project costs and high operating costs are characteristic of open-pit mines with high stripping ratios, underground mines with thin orebodies, mills with complex metallurgy, and projects located in isolated regions with severe climate, mountainous topography, and lacking access to existing roads, towns and electric power. When none of these adverse conditions prevailed, the mine project cost was typically much less than the graphed average cost. Virtually all the conditions likely to cause high capital and operating costs are known from knowledge of the local topography, climate or accessibility, or can be assessed by tests on core samples, as soon as the orebody has been outlined by drilling .A more accurate estimate of over-all project capital cost and operating cost can be made from a summation of items of cost after judging the effect of specific local conditions on each item of capital and operating cost. This paper offers guides in judging the effect of local conditions on the sizing and 1978 cost of specific items of capital cost and operating cost and operating cost of mine projects. When the specific items of capital cost and operating cost are totaled and measured against expected net revenue and taxes over the life of the mine using the net-present-value or discount-cash-flow methods, the result should show whether the mine project development is clearly feasible, doubtfully feasible or clearly uneconomic. If the development of the mine project is clearly feasible, or probably feasible, a detailed feasibility study by experienced consulting engineers should be commissioned before any financial commitments are made; but if project development appears to be uneconomic, the time and cost of a detailed feasibility study is not warranted."