Application of economic parameters and cutoffs during and after pit optimization

Baird, B. K. ; Satchwell, P.C.
Organization: Society for Mining, Metallurgy & Exploration
Pages: 8
Publication Date: Jan 1, 2002
The application of cutoffs during and after pit optimization is examined for a lower-grade multimetallic copper deposit. Pit optimization requires calculation of the net revenue associated with each mining block. The calculation incorporates parameters such as metal prices, grades and expected recoveries, mining and processing costs, smelting and refining charges, and penalty element and royalty charges. Sensitivity analysis during pit optimization reveals which parameters have significant effects on the total contained resource tonnage and total contained nondiscounted revenue in the optimized pit. The cumulative effects of changing several of the more-significant parameters are investigated The application of a copper cutoff grade to a block inside the optimized pit could result in the less-than-optimal extraction of the resource. A block with a copper grade below the applied cutoff could be economic due to the presence of other metals. Conversely, a higher-copper-grade block may be subeconomic. Also discussed are the merits of applying a copper-grade cutoff, an "equivalent-grade" cutoff and a dollar-per-ton cutoff to blocks inside the optimum nit.
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