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By D. Beneteau

Plotting sets of data collected over time using a frequency-magnitude distribution is common with both earthquake and mining seismology. A Time-Between-Events (TBE) analysis technique simply makes use of the inter-event times and b-values (slopes of the best fit lines on the frequency-magnitude charts) from the same set of data. Four distinct patterns in TBE versus Event Magnitude have been found which suggest whether there are constant seismic sources causing populations of data, or if the smaller and larger events, within the population represent varying seismic sources. Different rates of events, identified as TBE-rates in this study, may suggest whether the events are blast induced, or not. This study was done using actual seismic datasets from hardrock mines in Canada and Australia. This was to verify the applicability of the method to multiple mining environments and to determine the practicality and implications of this methodology to enhance the interpretation of seismic source mechanisms The results of the TBE technique and other proven techniques are combined into a Seismic Mechanism Assessment Worksheet. This is a tool that allows operators to compare trends within seismic datasets with assessments of in-situ rock conditions. The goal is to enhance the understanding of rockmass failure mechanisms.

Nov 1, 2011

By Desmond M. Connor

"The State of the EnvironmentRecent data from a State of the Environment report prepared in January 1991 and released in April (see references) , indicates that the physical and biological environment across Canada is deteriorating in some important ways. For example: • emissions and atmospheric levels of CO2 are rising at a rate more than 50% of the U.S. increase; global temperature continues to rise, especially during the last decade;• while S02 emissions have been falling since 1984, NOz has declined only slightly since that time; N02 in Canada rose 43% during 1970-87, compared with a 7% rise in the U.S.;• municipal discharges of phosphorus and BOD (biochemical oxygen demand) to fresh water have been rising steadily since 1983);• pulp and paper mill discharges to fresh and Pacific coastal waters have been rising, 1970-87;• migratory game bird populations (Prairie Mallard, Northern Pintail) have been declining for the last 20 years;• total per capita energy use continues to climb.The State of the PublicSimilarly, data from recent public opinion surveys shows that public concerns about the environment are either rising, or are remaining at a high level despite the competing claims of the economy and political events for attention.For example, Professor Reginald Bibby's national survey this year shows that Canadians rank our top three issues as theeconomy, the environment and government incompetence.An Angus Reid survey commissioned by the Mining Association of Canada and other mining organizations in 1989 showsthat, despite general support for its economic benefits:• 67% of the general public perceive the mining industry to be a major source of pollution and environmental contamination;• 68% believe that a new mine should not be developed if it will disturb local wildlife;• 52% would prohibit a new mine if it required a road through a national park;• 49% would disallow mine development if it took as much land as an average farm in an agricultural area or if it limited sports fishing in a local lake."

Jan 1, 1991

By B. R. McEwen, A. N. Samis, J. H. Gray

"The Quebrada Blanca Copper Mine is an open pit copper project located at 4200 m elevation in the Chilean Andes. The deposit is a world-class supergene enriched porphyry with a mining reserve of 89 Mt of 1.3% copper. The supergene zone will produce 6.3 Mt of ore per year for more than 15 years to produce 75 000 t of cathode copper per year.This paper will review the project geology the computer model ling of the deposit, the mine planning process and the property production scheduling. With copper production .fixed by the onsite electrowinning capacity, the planning and scheduling aspects to optimize the project NPV will be discussed. Some of the logistics, equipment. personnel and process difficulties of operating a mine at 42()() m elevation will also be described. IntroductionProject DescriptionThe Quebrada Blanca Copper Mine is an open pit copper project located in the northern part of the Chilean Andes. The project is based on the supergene enriched portion of a porphyry deposit which has a mining reserve of 89 million tonnes at 1.3070 copper. Below the enrichment blanket, the protore represents a further resource.All ore will be leached, the higher grade material will be crushed and stacked for thin layer heap leaching, and the lower grade and oxide material will be dump leached as run-of-mine material. Solvent extraction and electrowinning will be used to produce 75 000 tonnes of cathode copper per year. Power will be supplied by a 40 MW on-site diesel generating plant with the waste heat being used for process heating. The leaching operation will operate in excess of 15 years and may be followed by open pit mining and conventional ore concentration of the underlying primary sulphide mineralization.Because of the dry location water will be piped 37 km from a ground water source at the Salar de Michincha. Water requirements will be approximately 1.5 million m3/year. The operation will eventually employ approximately 550 people on a 7-day-on, 7-day-off rotation with two twelve-hour shifts per day with an on-site camp. Busing will be provided to the port city of Iquique."

Jan 1, 1994

By John E. Udd

"Mining research at CANMET is delivered by the Mining Research Laboratories Division (MRL), with facilities in Sydney, Nova Scotia; Bells Comers, Elliot Lake, and Sudbury, Ontario; and Val d'Or, Quebec. This paper gives an overview of the work of the Division as of early 1993. An addendum, at the end of this paper, describes the organizational changes that will take place in April 1994. IntroductionCANMET, the acronym for the Canada Centre for Mineral and Energy Technology, is the name by which the organization founded in 1907 as the federal Mines Branch is presently known. The name was changed in 1974, in order to give recognition to the importance of both minerals and energy technologies in the activities of the Branch. Further reorganizations have taken place since 1987. As a result of these, CANMET has assumed the status of a Sector (equivalent to the Geological Survey of Canada) and has been organized into four branches.The organization as a whole functions in an environment of semi-matrix management. Some of the ""line"" Divisions report to Directors-General for the appropriate branches while other, larger divisions, report directly to the Assistant Deputy Minister.The second dimension of the organizational matrix is composed of a number of ""staff' divisions which report to the DirectorGeneral for Policy and Planning. Each of these Divisions performs a function which is common to all of the ""line"" divisions. For example, the Research Projects Office is responsible for monitoring the range of research activities of CANMET and for recommending allocations of funds for both research contracts and operating budgets. The Library and Documentation Services Division is responsible for CANMET publications and information services. Likewise, the Engineering and Technical Services Division provides support through, among other services, the construction of specialized laboratory equipment."

Jan 1, 1994

By D. R. Hatton

To obtain sufficient material on which to perform copper-molybdenum separation testwork a variability set of drill hole reject samples amounting to several tons was put together to include the different ore types proportions expected in the copper circuit. The samples were treated in a copper circuit pilot plant and enough mass of bulk concentrate was recovered to conduct copper moly separation tests in the laboratory. Tests consisted of stage flotation reactor (SFR) rougher pilot plant tests, conventional laboratory rougher, cleaner and 4 stage open circuit cleaner tests. The mineralogical liberation analysis of the feed and concentrate was used to model the effect of liberation on the grade-recovery relationship of the different samples. Mineral kinetic parameters for the various samples were determined by calibration to the test data. The copper concentrate results as simulated from previous studies on the same deposit were used to simulate the variability in head grade and throughput expected for the feed to the copper molybdenum separation circuit for each of the first 10 years of production. This variation in feed was then simulated through the separation circuit to obtain optimised molybdenum grade recovery curves to forecast the circuit production for each of the first 10 years. INTRODUCTION Incorporating Geometallurgy into the design for a copper molybdenum separation is especially challenging due to the low mass of final concentrate typically produced during testwork. This is due to the low molybdenum head grades and high overall molybdenum upgrading expected. With molybdenum head grades of around 300 ppm, 1 tonne of copper circuit feed is expected to produce around 300 g of molybdenum concentrate in the plant. In the laboratory however, this may end up only resulting in a few grams. Obtaining sufficient mass for laboratory testing therefore requires starting with a large initial sample and careful testwork planning to maximise the utilisation of this mass. A testwork program was designed to investigate the effect of ore variability on the copper molybdenum separation circuit (here after referred to as the molybdenum circuit). Composite samples were selected to represent the various ore types, copper content, moly content, pyrite content and clay contents expected in the copper circuit feed. These samples were run through a bulk copper pilot plant to create the feed for the molybdenum testwork. The molybdenum testwork consisted of rougher kinetic flotation tests, rougher cleaner kinetic tests, rougher cleaner kinetic tests with regrind, stage flotation reactor (SFR) pilot plant tests, open circuit cleaner tests. These tests were used to calibrate the ore kinetics in the IGS-FLEET model for simulation of the molybdenum circuit performance.

Jan 1, 2019

By K. V. Konigsmann

"Concentrate dewatering operations have a significant influence on the economics of base metal beneficiation. The expenditures f or energy and labour per tonne of product are high. The relatively low efficiencies of standard techniques present inducements for process modifications. Development efforts at several Noranda concentrators led to process changes which improved productivity, namely, agitated pulp storage in large vessels, process automation and pressure filtration.IntroductionA program was initiated in 1968 with the aim of improving utilization of manpower and equipment in dewatering operations. The following considerations motivated us in this effort: Firstly, filters and dryers had traditionally been operated continuously and in step with grinding and flotation circuits. The demand for labour and equipment operating time was fixed and was not determined by the rate of concentrate production.Secondly, dewatering equipment had usually been designed to handle the concentrate tonnages which were produced when mill feed grades were high; therefore the equipment operated at less than capacity when treating ores of average metal content. The first goal was the separation of the flotation process from concentrate dewatering by development of a practical storage system for concentrate pulps . A second objective was the gradual introduction of dependable automatic controls. The steep increase in energy costs after 1973 added urgency to the search for dewatering processes which were highly energy efficient."

Jan 1, 1984

By R. Flood

"Oil has been discovered off Newfoundland in a number of locations on the Grand Banks, the most notable and exciting being in 1979 when Hibernia was discovered. This discovery has brought new challenges to the province as well as to all of Canada. During the seven years"" since its discovery, both industry and governments have attempted to define its parameters and to find the most efficient and economical way to develop the field.A number of studies have been completed during the interval and in 1985, Mobil Canada Ltd. and partners stated that they would prefer to develop the field by using a concrete Gravity-Based Structure (GBS). IntroductionHibernia is located in an environmental climate much more severe than that of any previously developed oil field. The wind and wave conditions are similar to those of the North Sea, but unlike the North Sea, any structure on the Grand Banks would have to contend with ice floes and icebergs. Decisions had to be made on whether fixed structures could be put in place that would withstand the pressures of the ice and the impact of an iceberg, or whether structures that could be removed when such impacts were imminent would be used.Early studies in 1981, determined that it was possible to build a concrete Gravity-Based Structure which could withstand the impact of the largest icebergs that are anticipated to float in that area of the banks.Additional studies increased the knowledge of icebergs: their patterns and size, and verified the original conclusions that Concrete Gravity-Based platforms would provide a practical solution."

Jan 1, 1988

By J. H. Gray

"IntroductionIn 1980, Fording Coal Limited started conceptual planning studies which led to major changes in the long-range mining plan at their Fording River Operations. These new plans have been completed and are now in operation.To assist personnel in a timely completion of this major revision to the long-range plan, existing in-house drill hole data base and scheduling systems were used and a computerized Mine Modelling and Planning System was purchased. With these tools, plan s were developed which led to completion of initial access to the peak of Eagle Mountain and the start of mining operations in March 1983. As mining area s open up and new geo logical data is obtained, detailed plan s are being extended and revised.With the geology and mine plan s on line, this work can now be done with less effort and plans ca n be adapted to provide flexibility in mining operations. Changes in market conditions can be accommodated by moving mining operations into different seams for different coal types. The computer systems are used to revise pit designs and schedules accordingly."

Jan 1, 1986

By Nabeel Khan

Annual oil production from the Canadian Oil Sands in Northern Alberta has been rising for several decades, and more ore and overburden are excavated each year from an increasing number of open pit mines. Overburden meeting certain specifications will be used to dam tailings and fill open pits, but the remaining material must be stored in overburden storage structures (OBSS). Well-designed overburden storage structures are more stable and cost less in the short- and long-term. The purpose of this paper is to explore OBSS designs that will be stable yet economical in the short- and long-term. The geological background of the site is briefly discussed, including the effect of each of the main geologic layers (recently deposited till and muskeg, Clearwater Formation clay shales, McMurray Formation oil sands, and the Devonian limestone) on the slope stability of the OBSS. Cost is considered in the analysis when balancing between minimizing costs (steeper slopes) and acceptable factors of safety (flatter slopes), all the while considering the financial consequences of failure. Potential failure planes are identified and probabilistic analysis is conducted on the critical failure surface. The variations in the factor of safety caused by varying pore water pressure, friction angle, and cohesion, are plotted and discussed.

Jun 1, 2012

By Matej Petružálek, Václav Vavrycuk, Tomáš Svitek, Tomáš Lokajícek

The most common type of waves used for probing anisotropy of rocks in laboratory is the direct P wave. Information potential of the measured P-wave velocity, however, is limited. In rocks displaying weak triclinic anisotropy, the P-wave velocity depends just on 15 linear combinations of 21 elastic parameters, called the weak-anisotropy parameters. In strong triclinic anisotropy, the P-wave velocity depends on the whole set of 21 elastic parameters, but inversion for 6 of them is ill-conditioned and these parameters are retrieved with a low accuracy. Therefore, in order to retrieve the complete elastic tensor accurately, velocities of S waves must also be measured and inverted. For this purpose, we developed a lab facility which allows the P- and S-wave ultrasonic sounding of spherical rock samples in 132 directions distributes regularly over the sphere. The velocities are measured using a pair of P-wave sensors with the transmitter and receiver polarized along the radial direction and using two pairs of S-wave sensors with the transmitter and receiver polarized tangentially to the spherical sample in mutually perpendicular directions. We present an inversion method for elastic parameters describing general triclinic anisotropy. We demonstrate on synthetic tests that the inversion becomes more robust and stable if the S-wave velocities are included. This applies even to the case when the velocity of the S waves is measured in a limited number of directions and with a significantly lower accuracy than that of the P wave. Finally, we analyze velocities measured on a rock sample from the Outokumpu deep drill hole, Finland, including the error analysis for several levels of confining pressure.

Jan 1, 2015

By G. E. Viens, R. A. Campbell, G. N. Banks

A survey of the literature reveals wide differences in the procedures used in making iron ore pellets and in the properties of the pellets obtained. In this paper, the methods of production and the properties of pellets, as reported in the literature, are examined in an effort to determine what correlations exist between them. An attempt is also made to determine the levels of the properties of pellets which are considered acceptable and desirable in modern practice. M UCH has been written regarding the important changes which have been taking place recently in the iron ore industry. As the demand for ore has increased and the supply of direct-shipping ore has dwindled, tl1e problems associated with the utilization of lower grade ores ha\•e been intensely investigated and important advances in both beneficiation and agglomeration techniques have taken place. In particular, there has been a great deal of activity in connection with the pelletizing method of agglomeration. The superiority of pellets over raw ore has been demonstrated in blast furnace tests

Jan 1, 1962

By W. Beres

Many non-commercial operators are currently faced with the need to operate fleets of legacy gas turbine engines. How long such engines can be kept in service safely, without replacing a significant portion of their aging structural components, has become a growing concern to engine life-cycle managers, due to uncertainties in the remaining lives of critical components of these engines. This paper describes the application of the damage tolerance methodology to predict safe inspection intervals (SII) for critical components of gas turbine engines, using components of a turboprop engine for a transport aircraft as examples. High temperature components of this engine are made of advanced aerospace alloys. The methods of predicting three-dimensional fatigue crack growth at the critical location of turbine discs and spacers using both commercial and in-house developed algorithms are presented. Sensitivity analyses are performed to determine the effect of variations in material parameters on the predicted safe inspection intervals. In addition, spin rig tests performed for both turbine discs and spacers are described. Finally, crack growth rates predicted by numerical analyses are compared to those obtained from spin rig testing and the damage tolerance of the turbine components is assessed.

Jan 1, 2015

By Chris Blain

"Abstract - Based upon an extensive database, this paper analyzes the record of modern mineral exploration success and establishes the 50-year trends in discovery. The record clearly shows that the overall discovery rate rose during the 1950s and 1960s, peaked in the 1980s, and fell during the 1980s and 1990s. By commodity and ore-type target, the pattern of discovery is not continuous. Typically, it is episodic as a series of waves with minor resurgence. The waves reflect the order of the so-called discovery booms, led by uranium, then nickel, and copper, polymetallic base metals and gold. With the possible exception of gold, the discovery booms appear to be independent of metal price, although favorable perceptions of the price outlook may well have initiated the boom or led resurgence. Although difficult to quantify, an emerging trend in modern discovery is the integration of several detection techniques into the search process. No doubt, this trend will continue as orebodies become more and more difficult to find. The record of the past two decades shows that greenfield discovery rates have progressively fallen even though the level of investment in exploration has risen to an all-time high. This trend reflects increasing discovery risk. Several factors are contributing to this trend. Perhaps the two most important are: (1) deteriorating economics as increasing real costs and decreasing real prices continue to raise the economic hurdles for minimum acceptable exploration targets, and (2) increasing exploration maturity in many search terrains, particularly those in the traditional regions of North America and Australasia. To succeed cost-effectively in this new environment of increasing discovery risk will require extraordinary creativity, innovation, and technical skill coupled with commercial discipline."

Jan 1, 2000

By Jim Robertson

Summary of Presentation ??What is the GARD Guide ??The Need for a GARD Guide ??Mining Industry?s Commitment to Solving ARD Problems ??The Ultimate Solution ?You ??The GARD Guide ?Scope ??The GARD Guide ?Structure ??Wiki Demonstration

May 1, 2009

By Pierre Beaudoin, Michel Bourassa, Robert Lanthier, Samir Chéfaï

"Mine Doyon, in collaboration with CRM's Process Control Division, improved the control strategy at the SAG mill I Ball mill grinding circuit. The project aimed at increasing operation stability and throughput. First, a needs analysis was achieved in order to define the control philosophy and to upgrade the process control equipments and instrumentation. The stabilizing control strategy has been developed and implemented successfully using single loop PID controllers. The monitoring feature as well as the rule based supervisory control strategy were implemented on 486PCs running Process Vision and COMDALE/C softwares. Main features of the control strategy are described in this paper while results are presented and discussed.RésuméLa Mine Doyon, en collaboration avec le service de contrôle des procédés du CRM, a optimisé la stratégie de contrôle au circuit de broyage. Les objectifs du projet étaient !'amélioration de la stabilité de !'ensemble de !'opération et la maximisation du tonnage usiné. Une analyse de besoins a été réalisée pour concevoir la philosophie de contrôle et déterminer les ajouts a apporter a I 'instrumentation et au systeme de contrôle. Une stratégie de contrôle à deux niveaux, integrant stabilisation et supervision, a été developpee et mise en opération. La regulation est réalisee par une combinaison de contrôleurs Moore de type PID. Le monitoring et la stratégie de contrôle a base de règles soot implantés sur des micro-ordinateurs de type PC/486 avec les logiciels ProcessVision et Comdale/C. Les principaux aspects de Ia stratégie de contrôle sont décrits dans cet article et les résultats obtenus soot présentés et discutés."

Jan 1, 1995

By R. J. Rotzinger, K. W. Major

The Gibraltar Mine and Mill facility were commissioned in 1972 by Gibraltar Mines Ltd utilizing a flowsheet consisting of two stages of crushing followed by a rod mill / ball mill grinding circuit. During operations a number of opportunities were evaluated to expand the mill capacity; however, the economics of the day did not allow any of these projects to proceed. The mine continued to operate until late 1998 when it was shutdown and put on care and maintenance due to low commodity prices. Taseko Mines acquired Gibraltar in 1999 and in 2004, with the improvement in the metal markets, made the decision to restart operations. During the restart planning a number of opportunities for mill improvements and upgrades were identified and, after operations were successfully restarted, the decision was made to once again review expansion opportunities for Gibraltar. Taseko evaluated various expansion alternatives eventually deciding to install a SAG Mill, convert the existing rod mills to ball mills and distribute the SAG discharge to the resultant six 6 parallel ball mills. This paper discusses the design, implementation and commissioning of the SAG mill grinding circuit.

Jan 1, 2012

By Al Goodier

"This paper discusses the experience of Noranda Mines Limited, Matagami Division, with the vertical crater retreat (VCR) method in the mining of narrow-vein stopes. Although limited to only one stope, the viability of this method at the Radiore No.2 Mine has proven that further use of VCR in narrow-vein mining will be made.IntroductionThe Radiore No.2 property is located east of the Bell River in the southeast quadrant of Isle-Dieu Township, approximately 4.5 km east of the town of Matagami. The new James Bay Highway is 2.5 km north of the property and access to the mine is by a 2.5-km logging road.The property was staked by Radiore Uranium Mines in March 1961 and the sulphide body was first indicated by an E.M. survey. Diamond drilling commenced in the fall of 1961 and was completed by the end of 1962. As per an agreement in 1970, the claims were sold and assigned to Orchan Mines Limited. Subsequently, the property was transferred to Bell Allard Mines Limited, a wholly owned subsidiary of Orchan Mines. Early in 1979, Noranda Mines Limited acquired the property and it is now part of Noranda's Matagami Division.Geology and MineralizationThe deposit is in a band of volcanic rocks north of the Bell River complex. The lens of massive sulphides dips almost vertically and strikes almost east-west. The north contact is essentially sharp against andesite material; the south contact is less well defined, as the massive sulphides tend to grade into more disseminated material.The orebody varies from 5 to 20 feet in width, by 350 feet long and 200 feet in height. The overburden is composed of sand, gravel and clay, varying from 0 to 26 feet in depth. The ore reserves were 153,340 tons grading 1.97% copper and 1.01% zinc including 10% of dilution at zero grade."

Jan 1, 1982

By E. Laatio, W. McKay

"History of Tara Mines Ltd.Tara Exploration and Development Company Ltd. was formed in Canada by Irishmen in 1953. The discovery of an orebody approximately six miles from the historically famous Hill of Tara in County Meath was a wild dream . Nevertheless this dream became a reality. Tara Mines Ltd. was formed, and the mine developed some 35 miles northwest of the City of Dublin in the Irish Republic.Tara's original drilling program indicated a zinc-lead orebody of approximately 60 million tonnes grading at 10.1% Zn and 2.6% Pb. The terms of the mining lease stipulated that the Irish government would acquire 25% equity interest in the operation. The mine was thus owned 75% by Tara Exploration and Development Company Ltd. of which the principal shareholders were Noranda and Northgate, together with 25% being held by the Irish government. The mine was purchased in March 1986 by Outokumpu Oy, a Finnish mining and metallurgical company, and together with the 25% government stake are the current owners. Outokumpu Analysis on Tara Mines Ltd.Upon ownership Outokumpu carried out a comprehensive analysis on the operation and came to the following conclusions :1. Tara had a good orebody;2. Tara had a skilled, capable, stable workforce;3. Tara's concentrator and processing equipment was adequate to meet requirements;4. Tara's mobile equipment fleet was too old and too numerousin numbers; and5. Tara had too many employees, both staff and hourly paid .With ore reserves of approximately 50 million tonnes and at a planned extraction rate of 2.6 million tonnes it meant that the mine had a lifespan of approximately 20 years. To be a viable operation into the future, the mine had to become more efficient. Operating costs and manpower levels had to be dramatically reduced."

Jan 1, 1989

By C. Chapman, P. Cowx

"INTRODUCTIONTetronics Research and Development Co. Limited has installed several plasma torches for steel heating in continuous caster tundishes. An extensive demonstration program on a 14 tonne tundish reported the following advantages of plasma heating.• close control of steel temperature to ± 5°C;• a reduction of the furnace tapping temperature of up to 20ºC, leading to savings in energy and refractories costs ;• improvement in steel quality, to produce a slab product with an equi-axed crystal structure and a reduced number of large sub-surface slag inclusions;• the virtual elimination of oxygen pickup in the tundish; and• the capability of making ferroalloy trim additions to the tundish to permit a change of steel grade during casting, greatly decreasing inventory costs.The Need for Tundish HeatingIn the continuous casting of steel, the function of the tundish is to transfer the molten metal between the ladle to one or more continuously fed casting moulds. Figure I shows a typical temperature profile of molten steel in the tundish over the first cast cycle. It is observed that a rapid drop in temperature occurs both at the start of the cast, due to the tundish refractories absorbing heat, and also during ladle changeover. In addition, as a result of thermal losses through the ladle sidewalls, there is a gradual decline in the bulk steel temperature over the entire heat cycle. Consequently, in normal tundish operation, it is necessary to cast with a high superheat (25°C to 30°C + above steel liquidus temperature) in order to prevent freeze-up of the strand. Problems of high temperature variation and the potential of the steel solidifying in the tundish are greater for small caster units of low thermal mass . A high steel superheat increases the steelmaking vessel process time and refractory wear and prevents the formation of a uniform equi-axed solidification structure in the cast steel, resulting in centre line segregation and porosity. The large drop in the casting temperature that occurs during unsteady state operation causes an increase in the number of sub-surface inclusions, reducing the value of the product. Accordingly, plasma heating may be employed to maintain the molten steel at an optimum temperature to produce a slab of consistent quality."

Jan 1, 1989

By Brian Hall

For some years, the mining industry has been consistently delivering returns below the market average. One of the causes is a disconnect between what is perceived to drive value creation by many industry analysts and senior corporate executives, and what actually drives the intrinsic value of mining operations. The perverse effect is that strategies that should increase value are perceived to have the potential to drive share prices down, and vice versa. This paper challenges common perceptions of what drives a mining company?s value. Anecdotal evidence suggests that the key drivers of value in the market, and hence in many boardrooms, are such things as increasing the reserves and production rate, and reducing unit operating cost. However, while the quoted reserves may satisfy ore reserves reporting code requirements to be economic, this does not imply that they are optimal. Often, a proportion of the quoted reserve reduces the potential value of the operation. Metal price increases, increased production rates, and operating cost reductions are all seen as conditions or actions that can improve value, and lead to cutoff grade reductions, thereby increasing ore reserves. However, modern cutoff theory and studies conducted by the author and his colleagues show clearly that, while breakeven cutoff grades will fall in these circumstances, optimum cutoffs may be much less volatile, and may even increase. Results from case studies indicate that value is maximised by right-sizing, not maximising, the production capacities, and by optimising the cutoff strategy. Values of many existing underground mining operations can be increased significantly by a substantial cutoff grade increase. Also, an increase in downside risk, and hence reduced returns, can occur using typical life-of-mine planning strategies if prices received are lower than predicted. Since this is often the case, low industry returns may be a direct result of typical strategic mine planning processes. Relatively simple cost-effective techniques are available to provide senior decision makers with information needed to assess the tradeoffs between their many conflicting corporate goals, and the balance between risk and reward. Often this information is not being generated at all. If it is, decisions affecting the value of the company are occurring by default at relatively low levels within the hierarchy, with senior executives apparently unaware of them or their potential impact. The paper concludes that without a re-evaluation of the way mining projects are valued, to demand proven value optimisation from mining plans by boards and mining analysts, the industry will continue to deliver below average returns.

May 1, 2003