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Gold mineralization like other low concentration high value commodities has gained the notoriety of being difficult to sample. This adversely affects the confidence that can be placed in resource estimates and ore reserves. As an example, it is not uncommon to find differences of the order of 30% between duplicates of a single sample sent to two different commercial laborartories. Two halves of drill core generally show marked differences in grade. Again differences of 50% are not uncommon in halved core. In the context of this type of "error" within the base data used for the resource estimate, many of the subtleties of computation methods and expert judgement of resource categories, are almost a case of shutting the gate after the horse has bolted. Managers, financiers and consultants must question the quality of the base data upon which resource estimates are made. They must insist that standard and duplicate samples are used to measure the accuracy and precision of commercial analytical laboratories, that sampling practices have been checked for possible bias and give tolerable repeatability. Further they must ensure there can be a realistic confidence in the estimates by correctly using these measures of data quality to quantify risk.

Jan 1, 1990

By G. F. Weaton

1.1 The purpose of this paper is to show the way by which estimates are made of the tonnage and grade of iron ore and taconite reserves of Minnesota. 1.2 The procedures include those of estimating the open pit reserves of: (a) Natural iron ore, and (b) Taconite 1.3 The methods of estimation which will be discussed are primarily based on the information from exploring iron ore deposits. They consider the geology of the deposit as well as the contained mineral of potential value. 2.0 Some geologic, engineering, and economic principles. 2.1 Ore 2.11 "In the broad economic sense, and from a legal standpoint as well, ore is mineralized rock, which under appropriate conditions of time, space, technology, economics, and politics, can be mined, processed, and made to yield a saleable metal , or other mineral products at a profit."(Parks, 1957) Stated differently, metallic ore is rock material from which presently known methods of beneficiation, a merchantable concentrate, suitable for use in the manufacture of metals at a profit, can be produced. Crude ores as low as 0.38% metal, as in the case of copper and even lower in the case of the precious metals.

Jan 1, 1985

Western Mining Corporation has grown from a small gold exploration and mining company, funded by large established mining companies, into a large multi-commodity and multi-national mining company with shareholders who no longer have the same understanding of mining as the founders. Ore reserve calculation methods and reporting procedures have gradually changed throughout the group during this growth. These changes have been led by the newer mines, in particular the Kambalda nickel mines, where the need for more global, less conservative reserves were required to justify capital and forward sales contracts and to inform shareholders of the true worth of their company. This change in attitude to reserves has flowed back to the gold mines and has allowed a better informed management and investing public to plan for the future. Management of the calculation of reserves remains the responsibility of individual mining operations, but a corporate reporting and management structure exists through the office of the Director of Exploration and divisional chief geologists who strive to maintain standards of calculation and reporting. Specialist ore reserve geologists are starting to justify their place in the organisation, particularly at the larger operations. Reporting to the new AusIMM Standards is fully supported, although the amount of supplementary information requested will need to be considered carefully because of the large number of factors that make up even the simplest reserve.

Jan 1, 1990

By Gooday PE, Brech GE

Ore reserve categories used by Pancontinental Mining fall into one of three fundamental groupings: Geological In Situ Reserves Mining Reserves Production Estimates The first of these describes the total reserve within stated parameters without implication as to its mineability. The second is that part of the Geological In Situ Reserve which is considered mineable under a specific mining plan. The third is the Mining Reserve adjusted with appropriate dilution and recovery factors and thus represents the best estimate of the tonnage and grade of production. This practical three category system mirrors the standard steps traditionally taken in ore reserve estimation and readily conveys the basis of the estimates. An important, but secondary classification can be added to qualify the level of confidence in these estimates using the terms: Proved (or Measured) Probable (or Indicated) Possible (or Inferred) These terms can be applied to any of the fundamental groupings, but it is generally implicit that the level of detail required to produce meaningful Mining Reserves or Production Estimates would require the basic Geological Reserve to be at a Proved or at least Probable level of confidence. The application of these classification systems by Pancontinental is illustrated by reference to the Paddington Gold Project. The methods of calculation are described including the use of geostatistics. Reconciliations of actual production with predictions from reserves are carried out monthly and annually. To date there has been an excellent correlation with Production Estimates, based on both manual and geostatistical calculations.

Jan 1, 1987

By C. Mosoane

ERPM was formed in 1893 and as a result of its age, a large volume of data exists in a paper-based format and it was decided to electronically capture data in one of two critical mining areas?namely at Far East Vertical (FEV) Shaft Area (Lower Areas) and Hercules Shaft Area (Upper Areas). The life of mine is dependent on tonnage and grade from these areas. Geostatistical evaluation of the gold reserves has been applied on an ad hoc basis in the Hercules Shaft Area and on a continuous basis in the FEV area. This is the first evaluation using geostatistics that was performed on the Upper Areas. This paper is based on the premise that regardless of cut-off grades, geostatistical estimation (kriging) estimates and locates reserves better than ?traditional? methods e.g. polygonal method, inverse squared distance method and it endeavours to estimate and locate the high grade reserves in the Main Reef Leader of Upper Areas.

Jan 1, 2003

The South Junction deposit of St Barbara Mines Limited was discovered in 1989 by the geologists of Ross Atkins Mining.The deposit occurs in the lower part of the Gabanintha Formation of the Lukes Creek Group in the Mt Magnet -Meekatharra greenstone belt. Country rock is predominantly talc-chlorite schist. Gold mineralisation is associated with north-south shear zones, quartz-carbonate-fuchsite alteration of the ultramafic rocks and in particular close to deeply weathered quartz-albite porphyry. For a detailed description of the geology of the South Junction Deposit see Fiala (1992).

Jan 1, 1993

Ore Reserves estimation for the two producing copper orebodies at Isa Mine, Mount Isa, Queensland is discussed. The principal estimation techniques used and discussed are first, a computer based inverse power distance weighted assay meshing technique, and second, a manual arithmetic averaging technique. The principles involved in these techniques are compared, and their areas of application indicated. A general comparison of the estimation of reserves with eventual production is presented.

Jan 1, 1979

The orebodies at Kambalda are complexly faulted, folded and intruded. It is realized that the ore reserve calculations will be wrong and steps are taken to minimise the errors. The calculations are a combination of computer data handling and manual input. Initially Geological Ore Reserves are calculated and then production data and experience are used to produce a Planned Mining Reserve. At all stages maximum professional judgement is incorporated. The basis of the calculation is the polygonal method of area estimation, and production reconciliations together with the style of data available indicate that it is a most suitable technique. It is also a tech- nique that is easily communicated to all levels from operators to management.

Jan 1, 1979

By LESTER W. STRAUSS

FOR fifteen months after the other dominions of the British Empire and the entire so-called sterling 11loc loosed the shackles that bound the111 to the gold standard, South Africa, giant among gold-producing nations, remained stubbornly attached to gold at the traditional ratio of 85 shillings in currency to one ounce of gold. But eventually even South Africa had to heed the dictates of trade and the obvious interests of its great gold-mining industry. In December, 1932, South Africa's currency severed its golden bonds. Today the South African pound is 011 a par wit11 the British pound.

Jan 1, 1935

By Armine F. Banfield

The Purpose of the Paper It is fitting that the first paper of a session on the Financial Aspects of Mining should be on the basic data upon which any financial discussion of a mining project must be based. The history of a mining project starts with exploration in an area considered geologically favorable for mineralization and culminates in the discovery of a body of valuable mineral material commonly known as a mineral deposit. Subsequently more detailed exploration establishes the approximate size, shape, tonnage and average grade of the deposit by surface and/or underground drilling, -surface trenching and/or underground workings. Some preliminary metallurgical testing and other studies, as required, are made at this time. Development work is then carried out to provide representative samples for determining flowsheet and metallurgical balances, preparing the deposit for production and establishing more firmly the grade and mining characteristics of the deposit. A feasibility study is then made of the engineering aspects of the project including the estimation of operating coats, the capital required to place the deposit into production, profit and return on investment. A valuation of the deposit

Jan 1, 1972

By Hugh K. Taylor

"With some justification, people have long complained about the indefinition of ore reserves. Perhaps they were led to expect too much; from former and easier definition practices in the once common underground mines with exposed and available assets, where the obsolete term 'ore in sight' was at least partly literal. But such mines have become rarer, and their underground development less affordable. For most projects, valuations and its definitions have thus been advanced from actual to prospective mines, leaving a very wide gulf between 'what is there' and 'what may happen to it'. This brings the double challenges of reduced geological and technical assurance and the protraction of economic uncertainties.This paper avoids the popular field of regional resources, being confined to what may possibly be mined within single or closely grouped deposits. For these, many estimates of tonnage and grade must be made, defined and declared long before assessment of feasibility; and the uncertainties of the latter make it an unsound base for defining the earlier quantities. Despite the best of intentions, implied or inferred promises may proveimpossible to honour.A simpler framework of definitions is suggested, to some extent reverting to an earlier dependence on supporting work rather than on opinions of economic assurance or future events that are more properly the functions of production and cash flow schedules."

Jan 1, 1994

By Owen Owens, W. P. Armstrong

Abstract- The process of arriving at the size and grade of: (a) a newly-discovered body of mineralization, (b) a potential ore resource, (c) an orebody proposed for mining, or (d) the ore reserves in a mine, requires fundamental geological, and geometrical determinations as well as physical and chemical analyses. This paper outlines geological and geometrical features considered critical, in the authors' experience, in realistic reserve determination. These are discussed under the headings "The Four Cs". They include the Character, type or nature of the mineralization; the Continuity of various types of mineralization in the deposit; various key concerns in the Calculation besides the mathematics; and the Classification section which refers to basic considerations in classifying a mineral estimate. It is suggested that the responsibility for the calculation of a Resource or Reserve should be that of a geologist experienced in the ore type under review. Further, it should be the responsibility of the board of directors of the company owning the deposit to ensure that a sufficiently experienced person is chosen to carry out the process.

Jan 1, 1993

Errors in ore reserve estimation can occur during drilling and sampling, sample preparation and analysis, geological logging and modelling, database construction, statistical or geostatistical evaluation, selection of economic parameters, selection of ore reserve method and assessment of mining constraints. Core sample recovery can be a major source of error, and it is proposed that the modelling of grade, metal accumulation and thickness should be accompanied by the modelling of core recovery (or core loss) so that for each ore block a weighted block recovery factor is obtained. This gives a good indicator of the reliability of a reserve estimate. It is suggested that a resource reliability rating (RRR) system be established to quantify what is meant by geological assurance and to combine this with an estimate of the precision of estimation as gained by geostatistical analysis. Proven and probable minable reserves would be those with an RRR better than 50% and a precision of estimation better than 20%

Dec 1, 1996

By H. K. Taylor

Ore reserves are inadequately defined. Geological reconnaissance and pre-feasibility mining work generate a broad range of valid tonnage estimates, many published for the benefit of various interests, who may view all figures as reserves. This work reviews the regular estimation of tonnages, grades and relevant factors for single deposits. A consistent framework of definition is suggested which, by conforming to the known structures of feasibility studies and long-range plans, avoids the pitfalls of over-categorisation and of unrealistic promises. Applications are based on North American experience but are intended for general use

Sep 1, 1991

By William C. Peters

The frustration encountered by exploration crews in connection with land acquisition could be graphed to show a correlation with the natural law that everything tends to become more so. Figure I shows a rather common, situation. The combinations of ingredients are almost limitless and the resulting brew is often poisonous to an exploration man. A single step, that of taking a series of deep soil samples is often delayed until some sense can be made from "floating" unpatented claims which are obscure in orientation as well as position, placer claims overlapping lode claims, location posts with empty Prince Albert cans, and claims with no apparent assessment work for ten years. Add to this some patented claims with¬out monuments, a state or federal withdrawal area which may or may not invalidate pre-existing claims, a loosely defined tunnel site, and some ranchers who understandably resent the separation of surface rights from mineral rights. The picture is familiar to exploration men. One approach to such problems is to ignore them until someone voices an objection -- but then an even more chaotic situation is likely to develop. Another practice is to stake new claims to cover all ground that is "open" at first glance and then find out if there are conflicts so that the new claims can be adjusted accordingly.

Jan 1, 1970

By J E. Everett

A block model of the orebody is used to plan a mine. The first requirement is to identify ore to be extracted, discarding waste, so as to meet target grade, generally in multiple analytes. Commonly, cut-off values are set for each analyte, so as to distinguish ore from waste. It will be shown that, if more than one analyte is important, this procedure is wasteful of ore and a composite cut-off function is preferable.A second requirement is to sequence the ore extraction so that the variability in ore grade is controlled: failure to do so will result either in low-quality ore being marketed, or excessive re-handling being required to blend the ore to reduce the grade variability.A third requirement is that the extraction sequence should be such as to control the amount of equipment movement required, enhancing the equipment productivity.The overall objective, to optimise the Net Present Value (NPV) of the mined ore, is simply stated but complex in realisation, since so many factors, such as target grade, grade variability, equipment choice, equipment movement, and downstream blending all have alternatives which can be traded off against each other, and all of which contribute to the costs and benefits making up the total NPV.There exist commercial packages for ore selection and mine planning. However, they are often of a ‘black box’ nature, and users are sometimes not fully aware of the criteria being applied. In particular, the treatment of quality as a multidimensional vector may be problematic. The purpose of this paper is to discuss some of the issues involved and to suggest an alternative set of approaches, which should complement existing commercial treatments.The discussion will be illustrated specifically by reference to the mining of iron ore, but the issues are relevant to a wide variety of mining situations

Sep 5, 2011

By M Aros, L Reilly

Iron ore is normally sold in bulk at certain specifications. These include iron grade and specific contaminant grades, typically silica, alumina, phosphorous and sulfur. These target grades are normally agreed between the mining company (producer) and the steelmaking company (customer).This study presents an alternative to traditional cut-off grade calculation, using linear programming that maximises the total ore inventories within a predefined mining envelope while meeting the specified targets. Providing a feasible mining sequence that maintains the target grade is not covered in this study.The method was applied to Fortescue’s operations. The complexity arising from differing ore quality within each mining horizon, variable yields and upgrades and the need to control iron and contaminant grades provided a good opportunity to test an alternative method of ore selection. The new method significantly reduced the time spent in cut-off selection and sensitivity analysis, and provided an optimised solution.CITATION:Aros, M and Reilly, L, 2014. Ore selection optimisation for an iron ore deposit using linear programming, in Proceedings Orebody Modelling and Strategic Mine Planning Symposium 2014, pp 345–350 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 24, 2014

By J E. Everett

Ore selection is generally a highly subjective task, with emphasis on producing product with a consistent target grade matching a perceived market requirement. A composite selection criterion ‘Comp’ (a linear function of the grade vector) can be used to maximise ore tonnage at a specified target grade (in Fe and contaminants) extractable from a block model. The blocks correspond to the selective mining units, with grades interpolated from diamond drill hole data. An iterative procedure has been developed to identify the coefficients and cut-off value for the composite function ‘Comp’, maximising potential ore tonnage at target grade.Commonly, target grade is predetermined by marketing; however, there is no guarantee that maximising ore tonnage at a specified target grade maximises the potential value of the mine. If the value of ore could be expressed as a linear function of the grade components, then these coefficients would be appropriate for the selection criterion ‘Comp’. The cut-off value for ‘Comp’ would correspond to the marginal cost of production; all blocks with a ‘Comp’ score above the cut-off would be classified as ore; and the cumulative grade of these ore blocks would be the average product grade over the life of the mine.Unfortunately, no such value function for iron ore is generally available. Methods for estimating the value function are discussed, using the spot price and sensitivities based either upon operational tolerances for Fe and the contaminants or upon published price differentials. This approach has been applied to an anonymous Pilbara deposit with about one million blocks averaging 1.1 kt. It is shown how the optimal target grade, cut-off grade and maximum tonnage can all be explored as a function of marginal cost and iron ore price. Alternatively, given marginal cost and an iron ore price, the effects of changing the tolerances (and therefore the relative costs of the contaminants) can also be explored.It is suggested this procedure can enable informed decision-making for an iron ore mine. Rather than setting final policy for the entire life-of-mine, the method enables target grades and tonnage estimates to be revised by re-computation as the mine life proceeds to recognise changes in market conditions and knowledge about the resource.It should be emphasised that this paper is concerned with ore selection rather than ore sequencing. Appropriate ore selection is a necessary but not sufficient condition for maximising value. Having identified the set of blocks that potentially maximise value, the sequence in which they are mined will present a trade-off between producing at constant grade and extracting high value ore early. The sequencing issue is not considered here. It is shown that optimum ore selection for an open pit mine is independent of any consideration of discount rates, although ore sequencing will depend upon the time value of money if the product grade is to vary across time.CITATION:Everett, J E, 2015. Ore selection to maximise value, in Proceedings Iron Ore 2015, pp 443–448 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By J V. Lawless

Two types of low sulphidation epithermal deposits that have different gangue mineralogies and ore shoot geometries are recognised. One has laterally near-continuous ore shoots over a significant vertical interval that consist of quartz, chalcedony, pyrite, minor base metal sulphides and adularia, with electrum. The other type of deposit has discrete near-vertical ore shoots of a lesser vertical extent, that consist of quartz, pyrite, base metal sulphides, sulphosalts, electrum and in their upper parts barite, which are enclosed in veins of earlier quartz. The gold mineralisation in both deposit types is considered to be a co-precipitate of pyrite, with that in the first type of deposit produced by prolonged boiling in an upflow of a hydrothermal system (Upflow Deposits); an example is Waihi in New Zealand. The other type is produced by mixing, a deep water primed for gold deposition by prior limited boiling, with an iron-bearing oxidised condensate of the steam released by the boiling, in an outflow of a hydrothermal system (Outflow Deposits); an example is Thames in New Zealand. Early recognition of these different types of deposits can be used to develop mineralisation models of predictive value on which to focus exploration drilling. Early recognition of an Upflow Deposit promotes an extensive program to delineate the extension of the main ore shoot. In contrast recognition of an Outflow Deposit requires a more intensive approach to find individual ore shoots which, although smaller than those found in Upflow Deposits, may be high-grade, particularly if there is earlier mineralisation present to act as a protore.

Jan 1, 1999

By M. M. Manamela

Paper written on project work carried out at the University of Pretoria in partial fulfilment of the requirements of the B Tech degree at the Tshwane University of Technology This work tested whether ore particle size affects the carbon-based pre-reduction of titaniferous magnetite. Pre-reduction is performed at a temperature of some 1100°C in a rotary kiln, in the Highveld Steel process. Laboratory isothermal reduction measurements were performed with ore-coal mixtures at this temperature, to test the effect of ore particle size. The results show that size does limit the degree of reduction for particles larger than 15 mm.

Jan 1, 2005