Applying Risk Analysis To Assess Economic Viability Of Underground Mining At The Golden Sunlight Mine

Risk can generally be defined as the possibility or chance of a loss corresponding to uncertainty. Analysis is the process for examining the components and relationships of a complex system in order to determine the impacts of its variables. Risk analysis is therefore a course of action taken to analyze multiple variables of a system that is subject to speculative outcome. When risk analysis is applied to mine development, it becomes the means for assessing and measuring those parameters that contribute to economic viability. Mining can be a risky business. It is composed of an assortment of factors that contribute to its financial outcome. Of these factors, the most consequential output is the net present value (NPV). Applying risk analysis in mine development can identify those factors having the most significant impacts and applying limits to those impacts. Mathematical computer modeling using Monte Carlo techniques is available and can be customized to suit specific mine development ventures. Essentially, those parameters that are not fixed values can have input variability. Rationally deduced engineering estimates should be the basis for determining the initial values applied as inputs in the models. Risk analysis therefore provides the user a means to identify, rationalize and assess the risks in mine development in an informed, calculated, and unbiased format for making economic decisions.