The Application of Linear and NonûLinear Programming as a Strategic Decision Making Tool at Newmont's Jundee Operation

The Jundee gold mining operation is located in the Western Australian Yandal Greenstone belt. Jundee is a mature operation encompassing multiple and complex underground ore resources, dwindling open pit reserves, large surface stockpiles, small satellite resources and two near-mine but stand alone process plants. The imminent completion of continuous open pit mining and the associated drop-off in total mill feed precipitated a review of the strategic mine plan and development of options that would optimise the exploitation of the remaining mineral resources and the utilisation of the existing plant and infrastructure.An initial review of the strategic decisions to be made, available options as well as the quantity, complexity and co-dependency of the strategic variables quickly led to the conclusion that an Operations Research style modelling approach would be appropriate. An 'off-the-shelf' program engine by the name of WHATSBEST! (LINDO Systems Inc.) was chosen on the basis of price, reputation and ease of use. The model was formulated with the unknown variables (being the ore mining rates) expressed as a proportion of the maximum achievable ore mining rate from each source. Costs were defined as variable or fixed, with this definition being a key aspect of the modelling process. The critical application of the model was in determining the optimal extraction rate of ore, the destination (ie Jundee or Nimary mill) and the sequence of extraction of each ore source that maximized the cash flow of the operation. The program was designed to be able to quickly derive an optimal result from the many variables, replacing the previous laborious iterative process of arriving at an acceptable answer by means of several large and static spreadsheet models. This paper presents the process of selection, formulation, application and scope of operation of the turn-key linear and non-linear program strategic model now used as part of the Jundee Operation strategic decision making process.