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By Rodney Allen

Background: Development of the Project ?European GEODE collaboration 1999: considers possible projects, including a VMS project, to continue after GEODE ?GEODE-CODES-Canada collaboration 1999: Questionaire, database ?Workshop at CODES 2000: project theme and strategy selected ?GEORANGE (Sweden-EU) 2001 supports development of Global VMS Project: interest from 12 nations ?Skellefte VMS Project set up as Sweden?s component of Global VMS, 2002; other projects in Spain, Canada collaborate ?Low metal prices ---> little funding from mining industry 2001-2003, change in strategy ?IGCP/UNESCO support 2004: enlargement to over 20 nations

Apr 1, 2005

By A. R. Trusiak, C. Bazin, D. Hodouin

"The On-Stream Analyzer has proven, and is still proving to be, an extremely valuable tool for the control of flotation circuits. This paper examines the possibility of going further in the utilization of the analyzer results by using a real-time material balance program to calculate the mass flow rates within the streams of a circuit for process control, analysis and optimization as well as for the detection of sensor malfunction. The material balance algorithm improves measurements and give good estimates of unmeasured variables during normal operating conditions. The potential and limitations of the method are illustrated using results of an application to the Line 3 flotation circuit of Brunswick Mining and Smelting, New Brunswick.IntroductionThe On-Stream Analyzer (OSA) has gained, over the last two decades, the status of key instrument for the control of flotation plants. The OSA is currently used in almost every sulphide flotation plant and its application in oxide mineral flotation plants isincreasing. Commercial OSAs include a sampling system that collectssamples from various streams of a circuit and exposes thesamples to an X-ray beam. The sample then generates X-ray pulsesthat are converted into assays using multilinear regression programs(Leroux and Franklin, 1994). The estimated assays arepassed to the flotation operators via operator consoles, or to controlloops of various degrees of complexity (McKee, 1991), whichmanipulate reagent addition, aeration rate or froth thickness toensure an adequate operation of the plant. Although this applicationrapidly pays for the purchase of the OSA, one should ask:""Could we get more from the OSA?"""

Jan 1, 1995

By J. W. Reynolds

"The use of approved fire-resistant hydraulic fluids in equipment operating underground was made mandatory in British Columbia by amendment to the Provincial Mines Regulation Act effective January 1, 1975. This paper covers the action taken to achieve this, in the largest underground metal mine in British Columbia. Some evaluation of costs and effects based on experience to date is included.BackgroundAn amendment to the Mines Regulation Act of the Province of British Columbia was passed in July 1974 as follow s: "" Rule 111 (b) Hydraulic Fluids. After the first day of January 1975, all hydraulic fluids used in equipment operating underground shall be of a fire-resistant type accept able to the chief inspector.""Unquestionably, its intent was justified as a safety improvement measure. The list of fires in mines involving machinery where hydraulic fluid was a factor in the fires is long and sobering. In British Columbia, in a 22-month period from 1972 to 1974, there were six fires in metal mines resulting in extensive equipment damage and injury to four workmen. Nevertheless, no provision was made for research or development of systems modifications compatible with conditions encountered in B.C. and, as late as June 1977, the Mining Association of British Columbia continued to argue that fire suppression systems should be considered sufficient until a universal suitable hydraulic fluid could be developed. The sole concession was to issue permits for continued use of mineral oil in equipment bought prior to 1975 in order to allow producing operations to continue. The burden of developing the necessary technology was laid on the industry.The Sullivan Mine at Kimberley, the largest and longest established underground mine in the province, and Cominco's most important source of ore s for its smelter at Trail, B.C., was at the outset of a conversion from conventional to trackless mechanized mining methods in pillar recovery operation s. Introduction of fire-resistant hydraulic fluid s had to be done in a period of change, in many instances on equipment for which no data existed, and called for research which had to be done while retraining the work force.The introductory phase is complete. All equipment is on FRF, the requirements of Rule 111(b) are being satisfied, and a number of research and development programs continue."

Jan 1, 1980

By A. McLean, D. K. A Donyina, R. S. Segsworth

"Various aspects of processing ferro-manganese fines generated during the crushing of standard ferro-manganese have been studied in laboratory-scaleplasma furnaces. These laboratory furnaces are based on the use of conventional graphite electrodes rather than water-cooled non-consumable torch devices. The reactor system has separate, distinct zones for pre-healing, melting and smelting. This unique feature assists in the removal of undesirable elements from the molten alloy. Ferro-manganese alloys containing over 82% manganese, 0.004% sulphur, less than 0.01% silicon, 0.006% nitrogen, 0.001% oxygen and 0.0006% hydrogen have been produced from the offgrade ferro-manganese fines.IntroductionThe major application of manganese is as an alloying additive to numerous metals such as steel, aluminum, copper and magnesium. Manganese is mainly consumed in the ferrous industry in the form of ferro-manganese and silicon-manganese, or in its pure state as electrolytic manganese when certain impurities inherent in the manufacture of ferro-manganese and silicon-manganese alloys must be avoided. Before being sold on the market, ferro-manganese is crushed and during this process alloy fines are generated. Due to the nature of the casting process, the fines produced are contaminated with silica sand. In addition, due to segregation effect s, the pho sphorus content of the alloy fines is higher than that found in the bulk of the material produced. Because of the smaller particle size and the higher impurity content, there is only a limited market available for the alloy fines. For this reason, there has been increasing attention directed toward the development of processes for recycling fines through the conventional smelting furnaces. The fines may be charged to the furnace either directly or after agglomeration. The detrimental effects of charging the fines directly include:(1) decrease in gas permeability, causing irregular gas flow;(2) increase in the amount of dust produced;(3) packing and bridging; and(4) intensive reactions due to sudden flow in hot zones."

Jan 1, 1982

By R. W. Lawrence, A. Bruynesteyn

"Pre-oxidation of refractory pyritic concentrates by biological leaching to enhance the recovery of gold and silver in cyan ideation has been investigated. The results of laboratory tests on three concentrates are presented. In all cases substantial increases in precious metal recoveries were obtained following the pre-treatment. For one concentrate, gold recovery of 81% was achieved following an 87% oxidation of pyrite, compared with 24% recovery by direct cyanidation of non-oxidized concentrate. Gold and silver recoveries from the other concentrates were increased from the range 60-78% to over 90% and from 80-86% to over 98% respectively. Operating parameters are discussed and methods of maintaining high oxidation rates are evaluated. Methods of employing this pre-oxidation technique in commercial practice are described.IntroductionMany of the gold and silver deposits now being developed contain precious metals finely disseminated in sulphide minerals such as pyrite. These ore s often present considerable resistance to metal recovery. The ease with which gold may be extracted is usually related to grain size and its manner of distribution within the host mineral. In many cases, a significant percentage of the gold may occur in submicroscopic form, or in solid solution with pyrite, so that even very fine grinding fail s to liberate the metal for recovery by cyanide leaching. Such ores are often termed refractory. Even in cases where liberation by fine grinding is practicable, high cyanide and lime consumption may be experienced due to the presence of specific sulphide minerals, and poor metal recovery may result.Pre-oxidation methods for refractory ore s and concentrates are commonly used to improve precious metal recoveries. Roasting, for example, as a pre-treatment to cyanidation, removes harmful constituents by oxidation or volatilization, and liberates gold from pyrite. In some cases, however, this method of pre-oxidation can result in poorer metal recovery, particularly of silver, due to fusion and the formation of clinker, and the formation of compounds which consume cyanide in the subsequent metal recovery stage. Difficulties in compliance with environmental pollution regulations may also be encountered."

Jan 1, 1983

"In the first half of 1990, Cambior earned $1104 million, or $0.37 per share, on revenues of$66.4 million. The company's strong cash position, attained late in 1989 and in the beginning of1990 through the exercise of warrants, put working capital at $83.8 million as of June 30, 1990. Long-term debt was reduced by over $10 million during the weak gold market, leaving the company with a debt to equity ratio of only 0.03. Production for the six first months of 1990 was 107 720 oz. Au, an increaseof24% over the corresponding period in 1989.Financial Profile/Results and Corporate Financial StrategiesTotal revenue for the 1989 fiscal year was $116,883,000 compared to $109,848,000 for 1988. The 1989 results achieved despite a lower average gold price, resulted from a higher level of commercial gold production and a 115% increase in investment income over 1988. Investment income rose to $3,568,000 in 1989 due to higher levels of cash assets.Cambior's mine operating costs increased 19% to $68,561,000 in 1989 from $57,472,000 in 1988. This increase resulted from rising operating costs at the Doyon Mine ($250/oz to $274/oz) due to the shift from open pit to underground operations, as well as from the start -up of three new mines with relatively higher costs. These costs have reached a stable level that should be maintained for the next few years.In 1989, net exploration expenses were $6,838,000, down 31070 from 1988, partially due to the Canadian tax reforms introduced since 1987. Depreciation and depletion grew by $1,432,000 in 1989, reflecting a higher volume of commercial production from the Pierre Beauchemin, Lucien C. Beliveau and Chimo mines.Net earnings for 1989 amounted to $17,661,000 or $0.73 per share compared to $17,438,000 or $0.74 per share in 1988.Cambior has an exceptionally liquid and strong balance sheet. As at December 31, 1989, net working capital stood at $85.6 million, with a total assets base of $338.6 million. With a long-term debt (including gold loans) of $21.5 million and shareholders' equity of $277.2 million, Cambior has a debt to equity ratio of 8%. All but about $100,000 of long-term debt is in the form of gold loans.The total market value for Cambior's stock as at September 10, 1990, stands at $420million, based on recent stock market prices. Cambior's stock and warrants are traded on the Montreal and Toronto Stock Exchange."

Jan 1, 1990

By S. R. McCutcheon

"The regional stratigraphy of the Lower Carboniferous Windsor Group in the Moncton Subbasin indicates that evaporites could be present in the Marysville Subbasin, part of what was formerly called the Central New Brunswick Platform. The Windsor Group consists of basement-fringing, algal build-ups (Gays River Formation), in places with intercalated siliciclastics (Parleeville), which are laterally equivalent to deeper-water, very thin to thinly bedded, euxinic limestone (Macumber). The Macumber is overlain by stratiform, nodular to mosaic anhydrite (Upperton) that is hosted by carbonate or calcareous siliciclastics. The sulphate also is equivalent, in part, to the algal buildups. Deep-water salts (Cassidy Lake) which overlie and in places are laterally equivalent to Upperton rocks have a basincentre distribution. The Windsor Group is overlain by shallow water evaporites and mudstones (Clover Hill) or by greenish grey mudstone (""transitional beds""). The paleogeographic distribution of these rocks provide important clues that help predict where deposits of salt and potash can occur.IntroductionCurrently there are three known potash deposits in southern New Brunswick (2, 3 and 4, in Fig. I). All three deposits occur in the Windsor Group of the Moncton Subbasin, but until recently their exact stratigraphic position within the group was not known.The Windsor Group is a cyclic sequence of carbonates, evaporites and red beds that is up to 1.0 km in thickness (Schenk 1969, p. 1038). It is Late Mississippian (Visean) in age and the type area is near Windsor, Nova Scotia. The group was named by Dawson (1873) but the rocks were described earlier by Hartt (1867). Dawson (ibid.) was the first to assign rocks in southern New Brunswick to the Windsor Group."

Jan 1, 1983

By PAUL L. DEAN

Industrial mineral deposits are widespread in Newfoundland and Labrador and a variety of commodities are produced. The province has the only pyrophyllite mine in Canada and also produces asbestos, gypsum, silica, barite, limestone, gemstones, cement and other structural materials. Large reserves of these and other industrial minerals are known and several deposits are likely future producers. Most producers are wellestablished and have large tonnages of ore reserves.

Jan 1, 1984

By Geoff Goodyear

UHNL Corporate Profile ? Providing Helicopter Services since 1963 ? A Newfoundland Company head-quartered in Goose Bay, Labrador ? Operations, while primarily Atlantic Canadian, extend across Canada, the Arctic, Greenland ? 16 aircraft, all single engine / VFR Typical Industry Mission Profiles & Work Environments ? Types of missions include: ? Air Taxi & Executive Transport ? Mineral Exploration ? Forest Fire Suppression ? Medivac ? Wildlife Management & Research ? High Angle Rescue and Ice Blasting ? External Load & Long Line ? Mountainous Terrain Operations ? Aerial Application ? Power line Patrols & Construction The Helicopter ? Essentially the same aerodynamic principals as fixed wing but with some mechanical variations on the theme

May 1, 2001

By Carl Edmunds

Talk Outline Deposit?s Vital Statistics and Economic Environment Regional Geologic Setting Deposit Geology UBC Research Search Model and Current Exploration Plans Kemess Operations Kemess South Mine Mining rate (2006) ?135,000 tonnes / day Mill throughput (2006) ?52,000 tonnes / day Average Annual Production ?300,000 oz gold and 75 million lbs copper ?Production until mid-2009 Kemess North > Open pit reserve 423.8 million tonnes @ 0.3 g/tgold and 0.18% copper > 4.1 million ounce gold reserve (127 tonnes) > 1.45 billion pound copper reserve (636,000 tonnes) > 0.75:1 Strip Ratio

May 1, 2006

By P. Hansman

"Place Dome Canada's Detour Lake Mine is a low-grade gold producer located in northeastern Ontario. Production is targeted for 2850 tonnes of ore per day. As reserves and mining areas continued to be found below and far to the west of the shaft (Fig. 1), it became necessary to review and upgrade the materials handling facilities. This paper deals with the selection, design and construction of an underground crusher and conveyor system capable of handling up to 450 tonnes per hour from the lowest existing level in the mine.BackgroundThe Detour Lake mine site is accessed via secondary Highway 652 which runs northeast out of Cochrane, Ontario. The road consists of 200 Ian of hard top followed by 100 Ian of well maintained gravel to the mine site. A 1500 m airstrip is maintained at the mine site for emergency use. Prior to 1991, the workforce was flown to and from the mine site. Crews were now bused to the site from Timmins. Remnants of a winter road exist to the southeast which at one time ended in La Sarre, Quebec. This was the route used to haul bulk items during the construction period and early production years.A town site has not been established at the site for the current operations. Instead, a rotational scheme is being utilized whereby most personnel will work seven days on site followed by seven days off site. For some employees, however, the work week is termed as a four/three schedule where they work 42 hours between Monday at 10:00 a.m. and Thursday at 4:00 p.m. with the following three days off. All surface employees and maintenance employees underground work 12-hour shifts. All underground employees work a lOV2-hour shift. Supervisors work a similar schedule as their crews, however, other staff may overlap their rotation during the week.A five-compartment shaft was sunk in 1984 from surface to the 610 m elevation. Shaft stations were established at the 120 m, 260 m, 360 m, 460 m, and 560 m levels. The cage compartment consists of a single deck, 4O-man cage in balance with a counterweight. The cage hoist is an Ingersoll-Rand 10H and is regulated to travel at 4.1 m/s. Two 9 t skips operate in balance at a travel speed of 7.1 mls. The skip hoist is a 3.05 m drum Nordberg. Both hoists are automated to function without a hoistman during normal skipping and cage service runs."

Jan 1, 1995

By Robert B. Parsons

"On February 15, 1984 Finance Minister Lalonde presented to Parliament a budget heavily flavoured with the current consultative mood of the Government. Notably absent from the budget was the typically long list of tax changes of immediate effect. Instead, the bulk of the budget papers consisted of a wide variety of white papers on significant topics that would have a far reaching impact on the future of all Canadians.This month. Tax Notes examines the highlights of Mr. Lalonde's budget.IntroductionThe mining industry need not feel slighted in Finance Minister Lalonde's budget of February 15, 1984: the budget offered very little that would have an immediate impact of significance on any sector of the economy. Apart from some welcome announcements for the oil and gas industry to postpone the implementation of certain negative tax changes, the budget was surprisingly scant in terms of definitive tax proposals.While massive revisions in the rules relating to pensions, small businesses, commodity taxation and profit-sharing were brought forward, many of these proposals are set out in White Papers or other documents to be implemented into legislation only after further consultation. Canadians will accordingly have to wait for such promised benefits as increased RRSP and other pension contribution limits."

Jan 1, 1984

By Roger Lafrance

"This paper discusses various aspects affected by the use of large-diameter boreholes in underground mines. Topics covered consist of noxious fumes, vibrations, post-blast effects, various types of explosives, the cordine system in production blasts, the slider primer system and wall-control methods. In general, the paper is an overview of this important fact of underground mining.IntroductionWith economical factors leading the way, many reasons motivated drilling equipment companies to develop equipment that can drill holes up to eight inches in diameter and even larger for underground applications. One of these other reasons is the fact that many orebodies were considered marginal, given the high costs of conventional mining methods utilizing small diameter boreholes. With these criteria in mind, accelerated programs were put in motion to develop equipment that would reduce both-development and production costs in underground mines. Change s in any basic program often affect other areas down the line. This is particularly true with the ad vent of large-diameter boreholes underground.C-I-L Inc. is certainly no stranger to this phenomena. Whether production headings increase in size and tonnage or whether production increases due to lower costs, one fact remains unchanged and that is the fact that all development and production holes are loaded and blasted whether they be of small or large diameter. Due to this fact, C-I-L Inc., as a leading explosives manufacturer, initiated a program to examine blasting methods in use in surface work with the intent of revising these method s for underground applications. Research facilities were also oriented toward developing appropriate products. This was a task that was accepted with anticipation, with the result that many new blasting systems and methods were brought forward, thanks to the collective efforts of both the consumers and manufacturers."

Jan 1, 1984

By H. Warren Newcomen, Dennis C. Martin

"This paper describes the investigation of a large, progressive slope failure on the southeast wall of the east pit at Highmont Mine, British Columbia Geotechnical investigation s consisted of geological and structural mapping, assessment of blasthole drilling records, review of rock core information, slope movement monitoring and back analysis of various possible failure modes. Climate records and mining history were also assessed to determine their relationship to slope movement.Analysis of movement monitoring records and geotechnical information indicates that the failure is deep seated. The upper portion of the failure surf ace occurs along clay filled discontinuities. The lower portion of the failure surf ace appears to occur through the highly altered rock mass. High groundwater pressures and mining at the toe of the slope are documented to have had a major influence on stability at various times during the failure. Stability analyses results are presented and possible remedial measures are discussed.IntroductionHighmont Mine is located near Logan Lake in the Highland Valley approximately 50 km southwest of Karnloops, British Columbia (Fig. I). Mining of the porphyry copper and molydenum ore bodies began in 1980. In May, 1983, when mining in the east pit had progressed to a depth of about 60 m (200 feet) , a failure (designated the Southeast Failure) began to develop in the southeast corner of the east pit. Subsequent mining to a depth of 110m (360 feet) was accompanied by frequent and substantial slope movements involving between 500000 and I 000 000 m3 of rock . The slope was monitored extensively to assess short-term movement trends for operational safety. Geological mapping, core logging and rock mechanics testing were used in conjunction with the long-term monitoring information to determine the failure mechanism, conduct stability analyses, assess the effects of instability on pit design and enable design and installation of remedial measures."

Jan 1, 1988

By T. Yalcin

"This paper describes a study carried out to determine the behaviour of Cu-Ni mill tailings during natural and flocculated sedimentations. Settling rates were examined under various conditions through standard laboratory batch settling tests. Flocculation was found to improve the sedimentation process significantly, but its effectiveness depended on several factors such as the pulp density of feed, the type and dosage of flocculating reagent, the pH of pulp, the intensity of mixing flocculant with tailings sand the use of stirring during compaction.It is shown that. for a sedimentation process taking place under given conditions, underflow pulp density (P) and sedimentation time (t) are related by the expression P = k.tn, where k and n are constants. A procedure is described for the use of this expression in thickener size estimations. IntroductionOften a considerable proportion of the mill feed is disposed as tailing, because the valuable mineral recovered usually forms a small fraction of the ore. Moreover, wet concentration processes result in liquid wastes that are several times more voluminous than the ore itself. Thus the handling and disposal of these wastes become an important cost item in most milling operations. The principal unit process employed in tailing disposal is solid-liquid separation which is traditionally carried out by gravity sedimentation in thickeners or tailing dams. Direct disposal of tailings into tailing dams is common practice where sufficiently large areas of land are available but it frequently becomes more economical or practical to densify the tailings in a thickener beforehand.Successful thickener operation depends essentially on correct thickener size which is in turn governed by the sedimentation characteristics of the tailings handled. Flocculation can aid the sedimentation process and bring about significant savings in thickener size, but its effective use requires a detailed study to identify the optimum conditions of application."

Jan 1, 1988

By C. A. Roloff

Demands for increased grinding production, lower-grade are and limited capital have resulted in ever larger grinding mills, some as large as 36ft (/1 m) in diameter and 12,000 hp (8,950 kw). The result is often f ewer machines per plant, with a greater dependence on each machine. To meet these reliability requirements, manufacturers of mills, drives, castings and other components have had to be innovative and creative in their design. Only by thorough review of past designs and practices and by model studies confirmed in field tests can the manufacturer have full confidence in the product. Because of the great interest in large mills, a short review of larger machines is presented. This discussion covers material feeding, bearings, the rotating element, drive trains and material discharge.

Jan 1, 1979

By S. P. Jekielek

"This paper describes the automation of a mine hoist ore loading pocket using a programmable controller. It provides an introduction to programmable control, and outlines the various modes and operating sequences of the loading pocket. A comparison is made with previous equipment to illustrate the increased flexibility, reliability and diagnostic functions that are gained.IntroductionLoading pockets have evolved from a couple of manually operated air cylinders to entirely automated systems. Early pockets were usually formed in rock, with loading and discharging regulated by air-operated gate s. Interlocks, added to this arrangement, prevented simultaneous operation of the gates and ensured proper hoist position . As the loading pocket advanced, it was recognized that gravity feed posed problems, often becoming plugged or letting water run through into the shaft. A belt conveyor was employed, eliminating the se problems and resulting in greater loading control. Weighing the combination of transistorized logic modules, replaced many relay systems. This elimination of moving parts and contacts increased reliability and reduced maintenance costs.As semiconductor technology progressed, there were major breakthroughs in miniaturization and reliability, and as a result the programmable controller was introduced. Programmable controllers first appeared in the automotive industry in the late 1960's. A system controller was required to replace the large relay panels in operation at that time. The use of digital integrated circuitry enabled these programmable controllers to automate processes with hundreds of inputs and outputs. Advances in electronics reduced production costs , making controllers for smaller application s viable . This development is on-going, each generation introducing controllers with greater capabilities for a wider variety of systems. equipment was the next step in loading pocket development, and dependance on much of the manual control was reduced . The complete system was first automated using relay panels. Solid- state devices were later introduced, and static control,"

Jan 1, 1980

By Robert B. Parsons

"In this period of improved metal prices and reported profits, valuable lessons should be recalled from the 1970s when a similar cycle lured the federal and provincial governments into thinking that they could grab bigger pieces of the pie without harming the minerals industry. It took years for the industry to recover from the damage inflicted by that unprecedented scramble for higher tax revenues. It is hoped that the current policy makers will have learned from the lessons of the seventies, and will realize that mining companies need to keep a reasonable share of profits realized during the good years in order to prepare for the inevitable downturn in the cycle.INTRODUCTION"", «. We have made clear to industry that super profits... will no longer be tolerated "".With that assertion, the Honourable David Barrett , Premier and Minister of Finance of the Province of British Columbia, announced the introduction of a new mining tax regime in his February 17, 1974 bud get papers . British Columbia producers would face a basic royalty and a royalty on so-called ""super profits"", resulting in some instances in tax rates exceeding 100070 of pre-tax profits.The ball started to roll. Mining tax changes knew no political or geo graphical boundary. On April 9, 1974, Ontario's Treasurer John White stated in his budget speech:""Increased demand by major industrialized countries has resulted in sharply higher metals prices and substantial wind fall gains for the mining industry in Ontario. With the prospective demand for minerals likely to sustain current price trends into the future, it is only fair that we secure for the people a higher return from our natural resources""."

Jan 1, 1989

By J. G. Conaway, P. G. Killeen

"Gamma-ray spectral logging, a useful technique for uranium exploration and evaluation, has generally been underutilized by the Canadian mining industry. Provided that the technique is properly applied, it is capable of yielding reliable quantitative information regarding the distribution of uranium and other radioelements along the borehole under most conditions.In practice. there are numerous factors which potentially can degrade the quality of the log and thus any quantitative interpretation based on it. Fortunately, the appropriate choice of logging equipment and technique can avoid many such problems, and corrections can be applied to the data to compensate for most of the others."

Jan 1, 1980

By Lawrence Devon Smith

"The concept of risk is well established in the mining industry. It is acknowledged when estimates of reserves are expressed as proven or probable, when mining and metallurgical recoveries are applied to the ore, and when contingencies are added to costs. However, it is difficult to provide a quantitative assessment of risk. The significant sources of risk in a mineral project and how these are addressed in project evaluations are discussed.The discount rate is examined as a fundamental means of reflecting risk in discounted cash flow evaluations. Current industry practice is discussed, and a methodology for the analysis of risk levels is proposed that assesses the constituent components of the discount rate: real interest, mineral project risks, and country risk.IntroductionThis paper examines the components of the discounted cash flow discount rate and proposes a method of estimating project-specific discount rates. The motivation for this work comes from experience of project evaluations in which owners and purchasers had agreed on virtually every aspect of the evaluation except how much the project was worth. Agreement was reached on reserves, grade, recovery, capital costs, operating costs, taxes, and, by combining these components, even on the final cash flow values. The only difference in opinion concerned the discount rate to be used in the calculation of the net present value. Depending on the life of the project, such differences of opinion can cause a variation of more than 50% in the value placed on a project! This is illustrated in Figure I."

Jan 1, 1995