Geological Aspects of Feasibility Studies

INTRODUCTION During the normal course of a mining project, a feasibility study will be prepared that addresses all the aspects of the project including geology and mineral inventories, mining and geo- technical, metallurgical processing, infrastructure, environmental considerations and economic analyses. These studies are prepared for various reasons. Occasionally, a feasibility study will be prepared solely for use within a company as justification for development expenditures, however, these documents are frequently submitted outside the company either to raise funds from financial institutions or from public financing on one of the various securities exchanges. Mineral industry consultants are often called upon to participate in the preparation of feasibility studies or to conduct an independent audit and review of an internally prepared study. As the recoverable mineral resources form the foundation upon which the balance of a feasibility study is based, including the economic analysis of the project, the resource aspect of the study is examined very carefully by financial and securities organizations. The balance of this discussion is directed toward the various geological and resource estimation aspects of feasibility studies that experience has shown to be of particular importance. Much of this discussion will be directed toward open pit gold operations, although the principles are applicable to any type of deposit. 2.0 GEOLOGIC RESPONSIBILITIES IN FEASIBILITY STUDIES The principal geological effort in the preparation of a feasibility study is generally dedicated to the following areas: - Preparation of Geologic Reserve/Resource Estimates - Condemnation of Sites for Facilities, Access Roads, Leach Pads, Waste Dumps and Tailings Disposal - Collection of Geotechnical Data - Provision of Mineralogical and Petrological Data Pertinent to Metallurgical Processing - Selection of Appropriate Bulk Sampling Sites for Collection of Metallurgical Samples Each of these items will be addressed in detail in the following sections. 3.0 RESERVE/RESOURCE ESTIMATION An ore reserve estimate consists of the determination of a volume, or tonnage, and a grade for the deposit. There are numerous cases in the mining industry of projects that have experienced severe difficulties when operational ore grade, tonnage or metallurgical amenability have proven to be deficient compared to predicted estimates. An error in estimation of tonnage generally leads to more long term problems affecting mine life and production schedules. However, a significant error in the estimation of grade, particularly if mined grade is lower than anticipated, can have an immediate, and often disastrous, effect upon a project. The geologic preparation leading to an ore reserve estimate generally follows a logical sequence familiar to