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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, grad~, recovery, capital costs, operating costs, taxes, and, by combining these components, even on the fmal 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 1."

Jan 1, 2003

By Christopher R. Lattanzi

"Discounted cash flow analysis provides a means of relating the magnitude of expected future cash profits to the magnitude of the initial cash investment required to purchase an asset or to develop it for commercial production. The objectives of discounted cash flow analysis are to determine:.. The net present value of a stream of expected future cash revenues and expenditures... The rate of return which the expected future cash flows will yield on a given level of initial cash investment.In the case of mineral properties, discounted cash flow analysis is generally accepted as the preferred method of valuation, whenever sufficient data are available to permit its reasoned application. Sufficient data are required to support estimation of all of the individual elements of cash revenue and cash expenditure which will be associated with the development and operation of the property, up to the end of its estimated life. It is the accuracy of these input estimates which determines the validity of the resulting determinations of profitability and rate of return on invested capital.In undertaking any discounted cash flow analysis, it is important to recognize certain fundamental attributes of the mining industty:.. The basis of any mineral development is the existence of an ore reserve... Costs are determined by the number of tonnes mined and processed, while revenues are determined by the number of pounds or ounces of metal produced. The two are related by the recovered grade of the ore... Profit is typically more sensitive to changes in revenue than it is to changes in cost... Commodity price is a principal determinant of revenue, but it is also the factor with which is associated the greatest level of financial risk.In the end, of all of the factors which must be considered in the discounted cash flow valuation of a mineral property, the most significant are the reliability of the reserve estimate, particularly with respect to recovered grade, the price at which the product is to be sold, and the risk of not maintaining the projected level of price."

Jan 1, 2003

By Lawrence Devon Smith

"This paper examines the impact of the various assumptions that go into an economic evaluation, and shows how these can be combined to show an exciting result that may not really exist. An example of an embellished case (the kind that one frequently sees when projects are being promoted) is developed and the cumulative impact is analysed to show the actual project underneath. The paper also points out some areas to watch for overly optimistic assumptions such as prices, inflation, and debt. The concept of a ""bare bones"" base case is proposed (constant metal prices, constant dollars, no inflation, no debt, no interest, on a project basis, after tax) as a common reference point.As well, 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.INTRODUCTIONOften, the first time that all of the technical and economic data for a mineral project comes together in one place is when the economic evaluation is developed. This typically happens when work on the project has progressed to a sufficient level of detail that the effort to produce a year-by-year cash flow is justified, usually at the pre-feasibility or feasibility study stage. The data involved will include:• production; tonnes waste and ore mined, ore grade, mining recovery, metallurgical recovery, metal sold• revenue; metal price, smelting & refining charges, marketing costs• operating Costs; mining, milling, administration, fees, royalties• capital Costs; exploration, development, construction, indirect costs (engineering, management), contingencies, start-up, inventories, working capital, replacement and sustaining capital, closure costs• taxes and royalties• exclusions; depreciation (this is not a cash item), sunk costs (only costs going forward)."

Jan 1, 2003

By L. D. Smith

"This paper examines the impact of the various assumptions that go into an economic evaluation, and shows how these can be combined to show an exciting result that may not really exist. An example of an embellished case (the kind that one frequently sees when projects are being promoted) is developed and the cumulative impact is analyzed to show the actual project underneath. The paper also points out some areas to watch for overly optimistic assumptions such as prices, inflation, and debt. The concept of a “bare bones” base case is proposed (constant metal prices, constant dollars, no inflation, no debt, no interest, on a project basis, after tax) as a common reference point.As well, the discount rate is examined as one of the 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."

Jan 1, 2002

By John Stubbs

Sub-Surface Shaft excavation Mine development Headframes Surface Production facilities Product storage and loading Tailings area Infrastructure Discovery Lodge Utilities Operations complex Port Marine loading Rail unloading and storage

May 1, 2013

By Jon A. Carlson, W. Scott Williams

The EKATI"" Diamond Mine commenced operation in October 1998. It is operated by BHP Diamonds Inc., which is a part of the Non-Ferrous and Industrial Materials Division of BHP Minerals, a business unit of BHP Company Ltd. of Melbourne, Australia. The EKATI"" Diamond Mine is a joint venture of BHP Diamonds Inc. (51%), Dia Met Minerals Ltd. (29%), Charles E. Fipke (10%) and Dr. Stewart L. Blusson (10%). In December 1993, an office was opened in Yellowknife, Northwest Territories specifically for the then Northwest Territories Diamonds Project (EKATI"" Diamond Mine) development. EKATI"" Diamond Mine is located 300 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle in the Northwest Territories of Canada (Figure 1 ). The site is located in a remote tundra area of continuous permafrost, north of the tree line, which is part of the Canadian Shield. Wekweti (Snare Lake), a Dogrib community approximately 180 kilometres southwest of the project, is the closest neighbour. The mining area and facilities lie within the 10 960 hectares land leases held by the joint venture. The total claim block (core zone and buffer zone joint ventures) covers 344 000 hectares. To date, more than one hundred kimberlite pipes have been identified within the claims. Five of these provide the basis for the present mine plan. Total capital investment in the project is over C$700 million. At full production employment will be about 600, including employees and long-term contractors, with over 33% being Aboriginal from the Northwest Territories.

Jan 1, 2001

By Rob Penczak

Éléonore Presentation Overview ? Location & Infrastructure Éléonore Property Regional Geological Setting Discovery & Exploration History Geological Setting of Deposit Types Roberto Au Deposit Lac Ell Cu-Au-Ag Occurrences Synergies & Strategic Alliances

May 1, 2006

By Kris Inwood

"In 1879, when the Dominion government initiated its controversial program of industrial promotion, iron smelting in Canada was limited to one company producing coke iron on the mainland of Nova Scotia and three small charcoal blast furnaces in Quebec. There was no steel production. By the eve of the First World War, iron and steel were being produced in very large quantities, the companies active in 1879 had disappeared and new centres of integrated iron and rolled steel production at Hamilton, Sydney and Sault Ste. Marie had come to resemble the industry as we know it today. The most dramatic change was that at Sydney, Nova Scotia, where in the early 1900s, two steelmaking companies established works. The Sydney developments have been explained as the result of resource discovery and technical change. W.J. Donald, in his authoritative account of the Canadian iron and steel industry, observes:(1) ""The most rapid growth of the Canadian iron and steel industry has occurred since 1897 ... The remarkable growth has been caused largely by the new conditions of the industry. The discovery and use of Newfoundland ores, together with the availability of Cape Breton coal, has made the Nova Scotia industry not only possible but profitable .... It is a safe conclusion that the Canadian industry would not have been an important one, had it not been for the discovery of the Michipicoten and especially the Wabana (Newfoundland) ores:' Donald also argues that metallurgical progress had been necessary to render the ores valuable. ""Newfoundland ores ... contain a considerable amount of phosphorus, and were made available for steel-making by recent inventions:' The purpose of this paper is to re-examine Donald's story. It will be argued that the origin of steel-making at Sydney is somewhat more complicated than Donald has indicated. The difficulty with Newfoundland ore extended beyond its phosphorus content and a resolution required more than the basic open hearth furnace identified by Donald. Moreover metallurgical change was only one of several developments necessary to induce industrial investment at Sydney. Surprisingly, however, the discovery of iron ore in the late nineteenth century does not appear to be part of the explanation."

Jan 1, 1999

By Kri Inwood

"IntroductionIn 1879, when the Dominion government initiated its controversial program of industrial promotion, iron smelting in Canada was limited to one company producing coke iron on the mainland of Nov a Scotia and three small charcoal blast furnaces in Quebec. There was no steel production. By the eve of the first great war, iron and steel were being produced in very large quantities, the companies active in 1879 had disappeared and new centres of integrated iron and rolled steel production at Hamilton, Sydney and Sault Ste. Marie had come to resemble the industry as we know it today.The most dramatic change was that at Sydney, Nova Scotia, where in the early 1900s, two steelmaking companies established works. The Sydney developments have been explained as the result of resource discovery and technical change. W.J. Donald, in his authoritative account of the Canadian iron and steel industry, observes:""The most rapid growth of the Canadian iron and steel industry has occured since 1897... The remarkable growth has been caused largely by the new conditions of the industry. The discovery and use of Newfoundland ores, together with the availability of Cape Breton coal, has made the Nova Scotia industry not only possible but profitable ... It is a safe conclusion that the Canadian industry would not have been an important one, had it not been for the discovery of the Michipicoten and especially the Wabana (Newfoundland) ores""Donald also argues that metallurgical progress had been necessary to render the ores valuable,""Newfoundland ores ... contain a considerable amount of phosphorus, and were made available for steel-making by recent inventions.""The purpose of this paper is to re-examine Donald's story. It will be argued that the origin of steel -making at Sydney is somewhat more complicated than Donald has indicated. The difficulty with Newfoundland ore extended beyond its phosphorus content and a resolution required more than the basic open hearth furnace identified by Donald. Moreover metallurgical change was only one of several developments necessary to induce industrial investment at Sydney. Surprisingly, however, the discovery of iron ore in the late nineteenth century does not appear to be part of the explanation."

Jan 1, 1983

By Maurice Séguin

The primary aim of all ground geophysical work has been, of course, to locate orebodies. As with any geo-physical method, its success depends on a proper mastering of the types of surveys and equipment used and their application to the physical properties associated with the orebodies. The Schefferville deposits are iron ores subjected to enrichment by the process of leaching. Although some ore types are porous and low in demiity, most of the ore zones have had a net increase in density brought about by enrichment. In the course of their formation, the magnetic characteristics of the rocks have usually changed, as much of the magnetite was altered to relatively non-magnetic iron oxides and hydrous iron oxides. Ali drift-covered areas underlain with iron-formation are potential ore-producing areas. From these first two physical proper-ties and a determination of the thickness of the over-burden, a combined gravity-magnetic-seismic and/or resistivity survey allows for the detection and sorting out of iron-formation and potential ore zones from the country rocks. If the iron-formation possessed relatively uniform physical and chemical properties, the problem of locating areas underlain with ore, using geophysical methods, would be greatly simplified. Unfortunately, the iron-formation is a complex assemblage of rock types, each having different physical and chemical characteristics. In spite of this, qualitative and semi-quantitative correlation between the results of the surveys and the geology and structure of the area could be established. In addition, a semi-quantitative to quantitative correlation of the values of the residual gravity anomalies with the specific gravity, the iron content, the porosity factor, the dimensions of the under-lying orebodies and the values of the ground magnetic intensity above a reference lithologie unit, with the per cent weight Fe304 recovery and the susceptibility, led to the discovery of a direct-shipping iron ore deposit in the Schefferville mining district of Canada.

Jan 1, 1968

By D. A. MacFadyen, J. J. Brummer, C. C. Pegg

"The first record of a kimberlite found in Canada (1946) was the identification of thin dykes intersected while drilling for gold in Michaud Township, Ontario.Sampling of the Munro Esker (1964) in the Kirkland Lake area, Ontario, by the Geological Survey of Canada identified the occurrence of detrital grains of pyrope garnets along a length of 35 km of the 113 km tested. A search for the source of the garnets resulted in the identification (1968) of a narrow subsurface kimberlite dyke in the Upper Canada Mine. This discovery resulted in a staking rush. Unfortunately, subsequent work did not identify the source of the kimberlite indicator minerals.During 1978 the Ontario Geological Survey started a multi-discipline study of 29 townships (2560 krn2) in the Kirkland Lake area, to encourage exploration for gold, base metals, and kimberlites. Back-hoe sampling (1979 to 1982), where the overburden was thin, and reverse circulation drilling, in areas of thicker drift, yielded samples of the till. These were analyzed for several elements and a mineralogical identification of the heavy minerals was completed. Pyrope and chrome diopside grains were identified.Studies of the Pleistocene geology indicated only the most recent direction (167 degrees) of ice advance (Matheson) and the associated deposits, out of a possible three advances known to occur in the general region straddling the Ontario-Quebec boundary, is present in the immediate area of Kirkland Lake. Contouring the distribution of pyrope grains (1990) showed a concentration centered over an area of 616 km2 extending down-ice from Gauthier Township. This included a smaller area containing chrome diopside grains. Kimberlite boulders were identified (1981) in gravel pits on the Munro and Misema River Eskers located within this anomalous area. The next step would be to use the airborne geophysical data to locate the kimberlite pipes which yielded the indicator minerals and boulders. The source area is likely to be in the northern half of the Ontario Geological Survey study area."

Jan 1, 1992

By D. A. MacFadyen, J. J. Brummer, C. C. Pegg

The early identification of a kimberlite dyke and the occurrence of pyrope garnet grains along a section of the Munro Esker north of Kirkland Lake encouraged the search for kimberlites. Subsequent exploration using data from aeromagnetic surveys completed for the Kirkland Lake Initiatives Program (KLIP) resulted in the discovery of five kimberlite diatremes in the area north of Kirkland Lake and another one to the south. These are only a portion of the cluster of pipes found so far that probably occur in the area. Recovery of the diamonds present in four of the pipes yielded 16 stones, the largest being 0.17 carats. Unfortunately evaluation of the pipes is a problem due to the cover of glacial drift, up to 92 m in thickness, which makes it difficult to obtain an adequate bulk sample. A study of their ages, mostly from drill hole samples, suggest that the kimberlite diatremes and other alkaline ultramafic rocks were emplaced along a northwesterly zone of rift structures. These alkaline ultramafic rocks cut across all earlier rock types and have ages ranging from 121 Ma to 173 Ma. The zone of deformation, along which these rocks occur, has been named the Lake Timiskaming Structural Zone (LTSZ), a modification of Lake Timiskaming Rift Valley (LTRV). Ultramafic intrusions which were emplaced along the LTSZ can be traced from the James Bay Lowlands in the northwest to past Belleville on the north shore of Lake Ontario in the southeast, a distance of about 1070 km. As the emplacement of these rock types become known more are certain to be found by drilling selected aeromagnetic anomalies. The project has demonstrated that aeromagnetic surveys can be used successfully to identify covered kimberlite targets.

Jan 1, 1992

By T. Koulomzine, R P. Jaeggin

The claims now held by Mount Wright Iron Mines Co. Limited were acquired by staking in 1956, 1957 and 1958, i.e., some time after the major deposits of the Quebec Cartier Mining and Normanvi!le Mining Co. (formerly Quebec Cobalt & Exploration Ltd.) were already discovered and partly outlined. The choice of the location of the Mount Wright hold-ings was governed simply by the -availability of ground still open to staking and by its proximity to properties held by major iron companies. Mount Wright Iron Mines had no previous knowledge of the geology and no aeromagnetic results were available to it to guide the choice of areas to be staked. In order to explore the newly ac-quired claims it was decided to make a grid of widely spaced magnetic profiles on the ground rather than use aeromagnetics. This afforded the possibility of making some geological observations simultaneously with the geophysical measurements.

Jan 1, 1961

By Andre Panteleyev, Charels S. Ney, John M. Anderson

"Sam Goosly prospect, 22 miles southeast of Houston, B.C., was discovered in 1967 through geochemical reconnaissance. Soil sampling interpreted with respect to an east-to-west ice movement led to drilling targets.Mineralization is in a window of rocks thought to be Hazelton Group surrounded by Tertiary volcanic rocks and intruded by two stocks separated by about one mile. A westerly quartz monzonite stock is dated 61.1 m.y. and an easterly gabbro-monzonite complex is dated 52.5 m.y. The Tertiary volcanics are trachyandesites shown by the B.C. Department of Mines and Petroleum Resources to be in part extrusive equivalents of the gabbro, and they overlie Hazelton rocks uncomformably. Copper-molybdenum mineralization is sparsely developed in the westerly stock. Silver-copper mineralization forms an elongate west-dipping slab between the stocks in Hazelton rocks, which are continuously pyritized. The gabbro stock is not mineralized, but some dikes related to it are slightly so. Tertiary rocks are pyritized, but are not known to carry copper-silver mineralization. Hazelton rocks are divided into a lower conglomerate, an intermediate pyroclastic unit and an upper mainly sedimentary unit. They form a west-facing homocline. Coppersilver mineralization resides in the pyroclastic unit, mainly in a massive dust tuff through which are lenticular units of lapilli tuff. Well-mineralized rock is typically a breccia of light fragments in a dark chlorite-sulphide matrix. Sulphides are pyrite, chakopyrite and locally pyrrhotite, with very minor tetrahedrite, s phalerite and other sulphosalts. Rock alteration is predominantly a pervasive pyrite-sericite type, with widespread tourmaline, scorzalite, gypsum, ankerite and traces of fluorite. The most evident control of the copper-silver mineralization is the gross parallelism, over a strike length of 1.5 miles, to Hazelton strata, particularly a massive dust .tuff unit. In detail, mineralization crosscuts bedding and there is no appreciable banding within sulphides . A strictly syngenetic origin is untenable, but some initial concentration in a volcanogenic environment with subsequent modification by thermal processes seems likely."

Jan 1, 1972

By A. Fakhimi

The effect of porosity on mechanical behavior of rock has been studied in the past using both experimental and numerical techniques. One important aspect of this study that has not received much attention is the role of void size and distribution on the mechanical behavior of rock. In this study, the CA2 computer program that is a hybrid discrete-finite element program for two-dimensional simulation of geomaterials is used. Numerical specimens with different macro-void sizes are loaded uniaxially. The Young?s modulus, Poisson?s ratio, uniaxial strength and crack initiation stress are studied. The numerical results are compared with the database of experimental tests on Plaster of Paris specimens containing Styrofoam spheres with different void sizes and porosities. It is shown that the macro void spatial distribution is partly responsible for the scatter of the experimental data. It is also shown that not-only the porosity but also the pore size can affect the deformability, crack initiation stress and rock strength.

May 1, 2009

By Ki-Bok Min, Bona Park

"In spite of the applications of DEM models to emulate the elastic modulus, Poisson’s ratio and strengths of isotropic rock in laboratory scale, extensions to anisotropic rock and larger engineering scale still have many challenges to overcome such as robust verification and validation against observed field case. In this study, a discrete element modeling was performed in order to represent a transversely isotropic rock such as shale, and the upscaled model was applied to foundation and borehole problems using PFC2D. The applicability of the upscaled rock mass model was verified by an analytical solution. The DEM modeling of stress redistribution induced by an applied surface line load compares well with Boussinesq’s isotropic solution and anisotropic solution given by Bray. The borehole model with a circular opening under biaxial stress was compared with both isotropic and anisotropic solutions resulting in good agreement. The abilities of DEM model to investigate the micromechanisms accounting for complex macroscopic behaviors and to predict the macroscopic behavior are discussed.The results demonstrate that DEM modeling has the potential to be applied to anisotropic rock mechanics problems on larger engineering scales such as wellbore stability problems especially in shale formations. Furthermore, the effect of anisotropy modeled through this study may be able to explain failure behavior of anisotropic rock encountered frequently in real cases.INTRODUCTIONAnisotropy is prevalent in various types of rocks, especially in shale that contain a set of parallel bedding planes. These weak planes in various forms are sources of large deformation and low shear strength and contribute significantly to the anisotropic behavior of rocks (Amadei, 1996; Cho et al., 2012; Kim et al., 2012). As elastic and strength behavior of anisotropic rock is substantially different from that of isotropic rock, proper consideration of anisotropy is of great importance. There is extensive of experimental evidence showing the anisotropy of shale. Niandou et al. (Niandou et al., 1997) analyzed the plastic deformation and failure mechanisms of Tournemire shale were highly dependent on the orientation of bedding planes. Cho et al. (Cho et al., 2012) presented various deformations and strengths of Boryeong shale obtained from laboratory experiments. Fjaer and Nes (Fjaer and Nes, 2013) performed uniaxial and triaxial compressive strength tests using Mancos shale, and they observed that the shear sliding along the planes of weakness before the occurrence of a major failure can reduce the strength of anisotropic rock. The recent research has demonstrated that the anisotropy of rock is an important consideration in rock engineering."

Jan 1, 2015

By Jamie King

This paper describes the use of dynamic scheduling and discrete event control to provide coordinated control of multiple automated vehicles. In the past decade there have been significant advances in the field of robotics for underground mining. As this trend progresses toward a realization of a completely automated underground mine the need for a central control system, capable of providing coordination for multiple vehicles in a semistructured environment, becomes more evident. In the past year general research into multi-robot coordination has been applied to the underground mining scenario and demonstrated in a scaled model underground mine in a laboratory setting. This system shows significant potential to be adopted into a full-scale implementation for mine wide automation.

May 1, 2001

By T. Norvell, R. Gosine, S. O’Young

"This paper describes the use of dynamic scheduling and discrete event control to provide coordinated control of multiple automated vehicles. This work has been carried out within ongoing research into multi-robot coordination developed around the underground mining scenario. Demonstrations using scaled laboratory models of underground mines illustrate the potential for this technology for full-scale implementation for mine-wide automation. IntroductionIn the past decade, the mining industry has been improving the efficiency of underground mining operations. Robotics and automation have demonstrated the potential to further reduce costs. Tele-operation of underground vehicles from above ground and autonomous navigation have reduced travel delays and allowed for single operator control of multiple vehicles (Bloomquist and Hinton, 2001). Other recent projects include the automation of the digging process as well as the drilling and blasting operations. Infrastructureless guidance systems are also being developed (Bloomquist and Hinton, 2001).Mine-wide automation requires significant developments at two levels: (1) the development of mining robots capable of performing tasks either autonomously or semiautonomously; and (2) the development of methods for automating operations at a systems level. This paper focusses on the latter, and describes a general framework for the coordination of multiple mobile robots in an unstructured or semi-structured environment."

Jan 1, 2003

By Alessandro Navarra

Discrete event simulation provides a computational framework in which the use of smelting equipment can be analyzed and optimized, leading to the development of alternative modes of operation. Much of the complexity of copper and nickel smelters is centered on the converter aisle. These converters operate in parallel, produce batches, and set the tempo for the downstream operations. In practice, smelter staff schedule daily operations to coordinate the smelting furnaces and converters with downstream operations. Thus, a realistic simulation of smelter operations, over hundreds of days, should incorporate converter scheduling algorithms as presented in this paper.

Jan 1, 2014

By Kristopher John Shelswell

The work in this paper describes the theory, development and analysis of a computer model simulating a mine operation moving material using concurrent decline ramp truck haulage and skipping practices. This simulation was designed specifically to assess the performance of the truck haulage component and to expand on the scope and capabilities of traditional TKM fleet calculations. Haulage fleet simulation results were similar to TKM calculations for the lower to moderate production rate cases. However, comparisons of ramp-up and high production rate scenarios indicated that the simulation model was significantly more sensitive to operating practices and factors not accounted for by calculations derived when using a single TKM figure. Given the proper calibration of inputs and logic, the simulation model was additionally capable of providing information associated with general mine operations efficiency. Further benefits of the simulation model over a TKM approach included logistical assessments such as production schedule feasibility, productivity trade-off quantifications for proposed operating practices, and the validation of mine resource utilization scheduling. The simulation model was able to expand on traditional methods to approach planning and logistics by considering factors such as truck queuing, real-time traffic interactions, random events, and competition for resources on mine productivity.

May 1, 2013