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By L R. Sousa, M He

Rock burst is common in deep underground excavations and is characterised by a violent ejection of block rocks from excavation walls. It is critical to understand the phenomenon of rock burst and particularly the failure mechanism. Laboratory experiments are one of the ways. For that purpose, a rock burst laboratory test system was developed at the State Key Laboratory for Geomechanics and Deep Underground Engineering at the China University of Mining and Technology, Beijing. A true triaxial test system, designated the Deep Underground Rock Burst Analogue Test Machine, was developed, which can transfer a stress state from three-direction-compression on six surfaces to the compression on five surfaces with one set free. The rock burst experimental system comprises an acquisition of acoustic emission signals, a high-speed recording in order to accurately record the kinetic characteristics of rock fragments ejected during a rock burst event and the possibility of infrared thermography showing the surface temperature of the samples. In this paper, analyses of typical results from rock burst tests are presented with a description of the obtained results. The mechanisms of rock burst are illustrated, and a rock burst classification is proposed based on these laboratory tests. For the control of rock burst, the constant resistance, large deformation (CRLD) bolt or anchor is presented for accommodating the large displacement of surrounding rock masses and absorbing the impact of the sudden release of rock burst while outputting a constant resistant force in response to the external load. The CRLD bolt or anchor has had practical applications in underground mines. Finally, in situ tests performed in a tunnel at Qingshui coalmine, China, are analysed in detail.CITATION:He, M and Sousa, L R, 2014. Experiments on rock burst and its control, in Proceedings AusRock 2014: Third Australasian Ground Control in Mining Conference , pp 19–32 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 5, 2014

By J Coombes

Within the mining industry there is a growing trend of placing inexperienced technical people into positions of responsibility beyond their readiness. Their responsibilities often include providing the fundamental basis for decision-making: the resource model or even the daily grade control estimates. Whilst software continues to make the processes more accessible, the thinking and rationale for selecting parameters still requires control rather than auto-piloting. Operators run these systems in virtual isolation, and have limited immediate access to experts. Beyond the stress of the professional burden are the increased risks to the mining operations and overall project success.While many experienced experts recall being thrown in the deep end, the relative isolation from experts coupled with the gravity of professional burden before readiness, is less familiar. Many recall in intimate detail the experts who gave them direction, assisted them along the way and even helped them claw out of inadvertent mistakes. Experienced professionals all have a responsibility to enable capability across the generations, to ease the burden and to mitigate the risks.This paper provides an outline of how mentoring as an on-the-job professional development process can be structured to more fully enable success of a mentoring program. Three examples complement the principles presented.CITATION:Coombes, J, 2012. Structuring meaningful mentoring, in Proceedings International Mine Management 2012, pp 15-22 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 20, 2012

By Jensen B, Ofori P, He Y, White E, Stanmore B, Brien M, O&apos

As part of a large AMIRA project, an on-line moisture meter was installed at two mine sites in Central Queensland. This project investigated the factors which control the moisture content of coarse (>0.5 mm) coal from the centrifuges used in conventional coal preparation plants. It was placed immediately after the first centrifuge to isolate the factors pertaining to one machine and its feed.The meter was found to be accurate and precise when compared with manual and mechanical sampling methods. The Grubbs estimator technique indicated that its precision is better than 0.3 per cent at the 95 per cent confidence limit.It has been identified that:1. the variability of the measured moisture contents of coarse coal can be described by normal distributions. Standard deviations of about 0.6 per cent are common; and2. the treatment of the coarse coal on the drain and rinse screens immediately prior to the centrifuge can affect the final moisture content.

Jan 1, 1995

By J Benn, V Kuznetsov, G Timms, A Spain

Earthen covers are now widely used in the mining industry to control the generation rate and/or release rate of low quality drainage from piles of sulfidic minewastes. Covers are usually designed to reduce the water infiltration rate and in some cases may also reduce the oxygen flux to the underlying sulfides. Engineered covers have only been used since the 1980s, however, and there is very little field data on their performance in the longer term. This lack of information has implications for the degree of confidence that can be placed on the predictions of the environmental impacts of sulfidic minewastes, for the acceptance of close-out criteria by regulatory authorities and for the financial liability of the mining industry. Covers were placed on sulfidic waste rock dumps at the abandoned Rum Jungle uranium mine during 1984 - 1985. These covers were designed to reduce the water infiltration to less than five per cent of incident rainfall by both water shedding and storage-release mechanisms. Regular monitoring by the Australian Nuclear Science and Technology Organisation (ANSTO) demonstrated that the covers performed better than the design criterion for around ten years, but infiltration rates have subsequently increased. There is a 66 per cent probability that the infiltration rate now exceeds five per cent of incident rainfall. The cover on the largest pile, WhiteÆs heap, was sampled in pits dug at eight locations. Sampling was carried out at the end of the monsoonal wet season and again at the end of the ædryÆ season. This, together with laboratory testing, enabled cover performance to be assessed against five criteria: design, construction, cover material characteristics, physico-chemical characteristics and biological characteristics. We are of the opinion that the design of the cover was suitable to achieve the objectives of stability, water shedding, storage-release, and provision of a substrate for vegetation growth. Over most of the surface of the heap, the construction of the covers, drains and erosion prevention structures was in accordance with design specifications. However, several small and localised bare patches on the upper surface of WhiteÆs heap coincide with a reduced cover thickness, which is likely to have been due to poor construction in those patches. The construction of covers on minewastes is dependent on an adequate source of material meeting design specifications. From our limited examination, it appears that there was shortage of material for each of the three zones û a lower impervious clay layer, the moisture storage-release layer and the upper erosion-resistant layer for vegetative growth. An indication of this was that the upper layers in some areas were observed to be thinner than specified. We are of the opinion that this shortage of suitable material has been responsible for some of the changes observed ten years after emplacement. Physical and geotechnical testing indicated that the cover materials no longer meet the original specifications. In particular, the permeability at the 8 locations was found to be greater than specified, by up to several orders of magnitude. The higher permeability may explain the higher observed rainfall infiltration and moisture content of the waste rock. This increased permeability appears to be due to a combination of biological and physical processes û galleries formed by termites and ants and an extensive system of shrinkage/desiccation cracks formed by the development of a polygonal blocky structure involving the entire lower clay layer. The desiccation cracks may fill with coarser illuviated materials and form a conduit through which roots access the underlying waste rock. Measurements were made of oxygen flux into the heap as cover layers were excavated in the pits. They indicated that the full cover currently reduces the oxygen flux to 20 - 23 per cent of that into bare waste and that this reduction seems to be proportional to the cover thickness. It was also found that the oxygen flux into the cover is about four times higher at the end of the dry season than at the end of the wet season and that the difference is due primarily to the difference in moisture content of the cover. Recommendations are made for the design and construction of covers.

Jan 1, 2003

By A Black, A de Jo, J Cavanagh, J Harding

Acidic and metal-rich waters have been discharging from Sullivan Mine, West Coast, New Zealand since the closure of the mine during the early- 1990s. This has resulted in a decrease in pH from a background of 4.5 to 2.8 and an increase in metallic elements in nearby Rapid Stream. In addition to the chemical effects on Rapid Stream, a study of freshwater macro-invertebrates revealed the absence of most biota downstream from the discharge. An attempt is being made to use the Sullivan Mine as a case study of problem and remediation analysis.

Jan 1, 2003

By Q Yang

This paper describes the design and construction of three 7.2 m span access ramp-tunnels to the three level underground car park of the newly redeveloped Top Ryde City Shopping Centre in northern Sydney. The tunnels were to be excavated without significant impact on the overlying Devlin Street, one of the busiest arterial roads in the Sydney metropolitan area and a major link in the Sydney road network. The interpretation of the geological conditions indicated that the tunnels would be driven in a formation of heavily jointed, extremely weathered to fresh Triassic Ashfield shale with some structural features such as dyke, fault and shear zones identified in the available boreholes logs. Both empirical and numerical methods were used to design the tunnels and to predict the ground surface settlements. The design solution, which was influenced by the relatively small scale nature of the work and the current demands on the tunnel construction market, included presupport, initial support and permanent steel fibre reinforced shotcrete (SFRS) lining. The interactions of the driven portals with cut and cover sections and the proposed deep excavation of the new shopping centre were considered at the design development stage and in the construction phase to ensure the safety of the live road. The tunnels have been successfully constructed and are now operational.

Mar 8, 2011

By D Connelly

Magnetite orebodies generally means mining lower grade iron ores, crushing and grinding with significant energy costs in processing and the capital costs being significantly higher than for direct shipping ores (DSO). Overseas, the mining and processing of magnetite ores has a long history of production due to the lack of DSO deposits. This raises the question as to why the new magnetite projects have been so problematic and also whether there is a future for the long list of potential magnetite projects in Australia.The quality of the magnetite concentrate product is superior to most DSO products and the magnetite contains energy benefits when converted to hematite in sintering or pelletising. The industry’s hopes for new projects have been dashed and questions are being raised as to the financial viability of such projects.A comparison of Grange Resources Savage River, Arrium’s Project Magnet, the Sino Iron Project and Gindalbie’s Karara Iron Project is used to understand the differences between the projects and why some are more successful than others.CITATION:Connelly, D, 2015. What is the future for magnetite projects in Australia and why have some of the new projects been so problematic?, in Proceedings Iron Ore 2015, pp 107–114 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By A D. Wulfse, C M. D Barton

Underground fractured aquifers in the Ernest Henry deposit are to a large extent controlled by deposit scale brittle structures. The underground mine has been subdivided into nine water zones based on hydrogeological characteristics, including conductivity and connectivity, within the mining areas bound by these structures. The nine water zones and the hydrological characteristics of the associated structures are utilised for risk assessing mine development and for targeting diamond drilling dewatering activities. Wireline and conventional underground diamond drilling techniques have been used throughout the network of underground aquifers with the aim of dewatering areas within the mining footprint. These dewatering drilling campaigns have historically been highly successful at lowering aquifer water levels throughout the underground workings. As part of recent mine expansion activities, diamond drilling has intersected high pressure (>507 psi), high temperature (>50°C) and high flow water (>3 L/sec) in as yet unconstrained underground aquifers. Groundwater is typically conducted through rubble and clay rich faults, further hampering progression of drilling. Drilling through fractured aquifers at depth presents both mine planning as well as safety challenges. Recent drill holes have been delayed or abandoned when aquifers hosting this high pressure, high flow water have been intersected, risking mine planning deadlines. Recent technological innovation developed to control groundwater outflows from the diamond drill hole whilst drilling has been trialled at the Ernest Henry Mine. This case study focuses on the utilisation of alternative drill methodologies to allow the current drilling campaign to continue without delay, whilst also improving safety conditions encountered on the drill site.

Mar 22, 2022

By K Fiedler, A Newell, P D. Munro

Test work is the foundation upon which the success of projects and subsequent operations is laid, reflected in Professor Arthur Taggart’s pithy observation: ‘Make your mistakes on the small scale and your profits on the larger scale’. Indeed, Professor AllanTrench has succinctly noted that ‘Get the metallurgical characteristics wrong and you don’t have a project’.With deposits becoming lower grade, more structurally and mineralogically complex, final products requiring lower levels of impurities and tailings management demanding more attention, test work now assumes even greater significance in the acceptance and successful execution of a project. This paper is the first in a series aiming to stimulate thought on the metallurgical test work process by getting back to the fundamental basics through exploring and providing some guidelines for the metallurgical testing world, noting preferred practices as well as precautions and mitigations. This covers the key characteristics of metallurgical test work programs, including what needs to be done, sample selection, quality control and associated drivers, and most importantly, selecting, assessing and managing test work facilities. CITATION:Newell, A, Munro, P D and Fiedler, K, 2018. Metallurgical test work – between a rock and a hard place, in Proceedings 14th AusIMM Mill Operators' Conference 2018, pp 15–32 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 29, 2018

By H Park, L Wang

Froth flotation is one of the most widely used beneficiation processes for fine and ultrafine coals and minerals. Maintaining optimal metallurgical performance in industrial flotation operation is still a challenging task owing to the lack of an effective tool to diagnose the flotation performance in realtime. For this purpose, a number of flotation performance monitoring systems with different working principles have been developed to provide instant feedback for process control and optimisation. In this paper, for the first time, five different flotation performance monitoring systems were systematically compared through an on-site trial in a coking coal flotation plant in Queensland, Australia. The monitoring systems were used to measure (i) gas holdup, (ii) overflowing froth velocity, (iii) overflowing froth height, (iv) air recovery and (v) drag force exerted by overflowing froth, in an industrial flotation column and the outputs of these systems were collected simultaneously at a wide range of operating conditions. For each monitoring system, the best regression model describing the correlation between the system output and the flotation performance was selected from various regression models (eg linear, quadratic, power-law and logarithmic) using the Akaike information criterion (AIC). A comparison of the coefficient of determination (R2 ), residual sum of squares (RSS) and measuring accuracy at 95 per cent confidence level of the best regression models of these monitoring systems suggested that the drag sensor outperformed the other systems at a wide range of flotation operating conditions. The superior performance of the drag sensor was attributed to its distinctive design that enabled intimate sensing of variation of the overflowing froth properties. Furthermore, the drag sensor had the ability to monitor feed ash content variation when the other operation variables were set almost constant.

Aug 24, 2022

By R Jacobs, J Yeates

"The Stockman base metals project is situated in State Forest in the alpine area of East Gippsland, Victoria, adjacent to a National Park and within the headwaters of a major Ramsar-listed wetland catchment and the Murray-Darling River system. Site topography is steep, and elevated (650 m – 1200 m above sea level), and subject to circa 1 m annual rainfall, with occasional winter snowfall. The project consists of two volcanogenic massive sulfide (VMS) deposits to be mined by underground methods and treated in a 1.0 Mt/a central concentrator to produce copper and zinc concentrates for export over a ten year operational life. New resource projects are rare in Victoria. Recognising the sensitive setting, planning for the Stockman Project, which is now in the advanced permitting stage, has focused on balancing economic, environmental and social outcomes to ensure social licence to operate is secured and can be maintained. This has involved close attention to triple bottom line (TBL) risks and outcomes. Stockman has successfully gained State and Federal approvals via the Environmental Effects Statement process. The process of obtaining these approvals has required close attention to effective stakeholder involvement, and management of a lengthy and difficult approvals process, which is still to be finally concluded. This paper is a case study of the process of that permitting and the issues encountered to date. Key learnings from the experience have included: successful approvals require close attention to much more than just the project and its technical aspects and physical setting – effective stakeholder involvement and endorsement is critical the differing consultation requirements for local, regional and government stakeholders, to design and plan implementation of a project to meet TBL objectives, and to gain social licence to operate within the Victorian approvals process, the need for an effective lead government agency with policy authority dealing with material policy change requiring post-closure financial sureties estimating realistic permitting time and cost during the project evaluation phase. CITATION: Jacobs, R and Yeates, J, 2016. Stockman base metals project – sustainability, social licence to operate and permitting lessons learnt, in Proceedings Project Evaluation 2016, pp 98–110 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By R Crosbie, K C. Runge, E Tabosa, J K. McMaster

Flotation feed density is an operating parameter which is currently not well understood. Most models of flotation only incorporate its effect on particle residence time, but it is likely to have additional effects within both the pulp and froth phases of the machine. Test work was performed in MetsoÆs 3 m3 RCS test rig to investigate the effect of flotation feed density on metallurgical performance. The rig was operated at Rio TintoÆs Northparkes operation using flotation feed and scavenger tail. For each feed, tests were performed at different feed densities, and measurements were performed to estimate the pulp and froth recovery as well as other key flotation parameters (eg bubble size, turbulence and froth stability). Results of this test work have shown that the pulp density does affect key parameters of the flotation process in both the pulp and froth phases. Pulp phase kinetic rates decrease at high density and this is attributed to a reduction in the turbulence within the cell. Froth phase recovery, however, improves presumably because of a stabilising effect due to a greater loading of solids on bubble surfaces.There is a need for more research to be done to better understand these interactions so that metallurgists can determine the optimum flotation feed density to use at a particular operation, or within a section of a flotation circuit.CITATION:Runge, K C, Tabosa, E, Crosbie, R and McMaster, J K, 2012. Effect of flotation feed density on the operation of a flotation cell, in Proceedings 11th AusIMM Mill OperatorsÆ Conference, pp 171-178 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Oct 29, 2012

The green field discovery of a two million ounce high-grade refractory gold ore deposit in the Indonesian Province of Sulawesi Utara, led Newmont to utilise its proven technical expertise in dry grinding and whole ore roasting to develop a 2000 tonne per day, 160 000 ounce per year operation in this remote and picturesque location.Located at an elevation of 250 in above sea level and ten kilometres to a deep water natural harbour, the hard rock open pit mine, process plant and infrastructure facilities were built to budget at a capital cost of US$132 million. The plant was commissioned with oxide ore, with the first gold poured in March 1996 and with refractory ore in January 1997. The operation rapidly met its production targets because of extensive forward planning and training programs developed for the local workforce. The presence of steep topography, fertile coastal plains, high rainfall, high seismicity of this location led to the decision to dispose of neutralised tailings in deep water off the coast instead of impounding tailings in a dam. This paper describes the development of the project and the challenges in developing a gold operation in a remote location which lacked infrastructure, the steps taken to ensure a smooth commissioning, and the selection of the workforce to operate a technically sophisticated facility.

Jan 1, 1997

By Stewart R. D, Lawrence W, Youl M. J

The trend towards contracting by major coal mining companies such as BHP Coal and MIM Ltd is examined. Reasons why this trend is occurring are discussed and the concept of partnering is examined. Two case studies are given: the Mt Owen Mine in the Hunter Valley, NSW and the South Walker Creek Mine in the Bowen Basin, Queensland.

Jan 1, 1997

Thermo Fisher Scientific is the worldÆs leading supplier of analysers for laboratories and process industries. The companyÆs X-ray fluorescence (XRF)-based slurry immersion probes were originally developed by the acquired Amdel Instrumentation. These analysers have found limited application within wet beneficiation plants for measurement of iron. The recent trend of renewed efforts to maximise recovery from existing resources and lower costs has increased industry interest in online analysis. In the mid-1990s the company developed online analysers (the light element slurry analyser û LESA) for slurry applications using the prompt gamma neutron activation analysis (PGNAA) method. The company has successfully installed LESA for the direct measurement of lighter impurity elements in Brazilian plants using flotation for rejection of silica. A case study is presented. The PGNAA technique has the unique ability to provide elemental analysis of bulk materials on a conveyor belt. The company released its eighth generation cross belt Omni analyser using PGNAA in 2007. Results from a recent project with sinter are presented. The Niton range of hand-held XRF analysers is also supplied by Thermo Fisher Scientific. These handy devices are finding widespread use in the mining industry to provide quick and easy analyses in exploration settings. In contrast to PGNAA this is a surface technique. A prototype for light element analysis is being tested for iron ore.

Jan 1, 2007

By B Flynn, P Knights

Low-loaders or 'floats' for relocating equipment in surface mines are limited to a capacity of approximately 350 t. In the iron ore industry it is desirable to be able to rapidly relocate excavators in order to maintain production rates within appropriate quality limits. In addition, the ability to rapidly relocate heavy equipment raises the possibility of improving the quality of repairs by performing maintenance in controlled shop conditions. However, many iron ore operations operate hydraulic excavators in the 600 to 800 t range, with newly released excavator models exceeding 800 t. These excavators are too large to float using conventional technology. This paper examines the potential for using multi-bogie transporters to relocate large hydraulic excavators in surface mines. Recent innovations have seen the development of modular transporters which can be coupled together to achieve larger platform areas. When separated, and with their drive bogies neutralised, these units are able to be towed behind prime movers and relocated between mines via public roads. The potential cost savings for relocating a Terex RH170 excavator in an open pit coal mine are examined. In the first six months of 2008, the analysis showed the potential for a 38 per cent reduction in total travel time with a corresponding revenue increase of approximately $350 k. The paper recommends that a feasibility study be conducted into offering a heavy equipment relocation service within the Pilbara region.

Jan 1, 2009

By S Q. Liu, E Kozan

This paper proposes a new multiresource multistage scheduling problem for optimising the open pit drilling, blasting and excavating operations under equipment capacity constraints. The flow process is analysed based on the real-life data from an Australian iron ore mine site. The objective of the model is to maximise the throughput and minimise the total idle times of equipment at each stage. The following comprehensive mining attributes and constraints have been considered: types of equipment; operating capacities of equipment; ready times of equipment; speeds of equipment; block-sequence-dependent movement times of equipment; equipment-assignment-dependent operation times of blocks; distances between each pair of blocks; due windows of blocks; material properties of blocks; swell factors of blocks; and slope requirements of blocks. It is formulated by mixed integer programming and solved by ILOG-CPLEX optimiser. The proposed model is validated with extensive computational experiments to improve mine production efficiency at the operational level. The model also provides an intelligent decision support tool to account for the availability and usage of equipment units for drilling, blasting and excavating stages.CITATION:Kozan, E and Liu, S Q, 2014. An Open pit multistage mine production scheduling model for drilling, blasting and excavating operations, in Proceedings Orebody Modelling and Strategic Mine Planning Symposium 2014 , pp 329–334 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 24, 2014

By Swain H. D, Kay R. L

Assessment of mineral reserves in any ore- body hinges on both mineralisation characteris- tics and the economics of extraction. The mineral reserves statement depends on interpre- tation of diamond drill information by geolo- gists, determination of the production plan and operating costs by mining and metallurgical engineers and prediction of future income by economists. The techniques used to generate the mineral reserves statement for Bougainville Copper Limited in 1969 are described and the accuracy of predictions discussed. Preliminary results from a geostatistical reassessment are comp- ared with the ore zone model, blast hole data and concentrator reconciled production results.

Jan 1, 1979

By C Claassen, R Balusu

Computational fluid dynamics (CFD) models have been developed based upon field data collected from a longwall mine in New South Wales, Australia to study the behaviour of goaf gas flow in both active and sealed goaf areas. A base CFD model was built to represent the goaf situations when the active longwall retreats near the finish-off line. Results from the base model were calibrated and compared against field goaf gas monitoring data. The base model was then used to carry out parametric studies to investigate a number of operational scenarios and their impact on goaf gas behaviour. CFD modelling results indicate that the overall goaf gas flow pattern changes as the operating longwall retreats towards finish-off line. In all cases, oxygen penetration into the active goaf remains high, reaching 15 per cent or higher, even at some 800 m behind the longwall face.The modelling results also indicated that it would be difficult for early detection of an active goaf heating (on the maingate side) based upon CO readings in the return airflow, as the main stream of the gaseous product will be flowing into the sealed deep goafs in adjacent longwall (LW) panels. Monitoring points (such as tube bundles and bag sampling points) should be selected at deep seated seals along the active goaf so that abnormal CO or C2H6 readings can be picked up for early detection and location of potential heating spots; goaf inertisation can be better achieved by injecting inert gas such as nitrogen at deeper points (>200 m) behind the operating longwall; the injection of in-seam drainage methane into the goaf areas will only have a limited impact on goaf inertisation as much of the injected methane will migrate towards deep and higher parts of the goaf due to its buoyancy effect.

Sep 26, 2011

By I Minniakhmetov, J Ashford

Orebodies constitute naturally occurring, commonly highly variable concentrations of minerals in the earth’s crust formed through varying and highly unpredictable processes. Orebody knowledge is a core foundation of a mining company’s asset base underpinning all decisions about Mineral Resource and Ore Reserves, future production, development and ultimately the profitability and competitiveness of a mining enterprise. The decision to invest in a mineral project is usually based upon a techno-economic evaluation of the project and having clear approval pathways to gain local community support and address social and environmental impacts. The main objective of the techno-economic evaluation is to determine the optimum development sequence for the particular orebody in question and to estimate the economic viability of the project and the future return on investment to its stakeholders, balancing the inherent value of the mineral in the ground against the costs of development and market pricing. With the exception of market-driven commodity prices, virtually all revenue and cost estimates fundamentally stem from the understanding and subsequent modelling of the orebody. A reliable estimate of the ore deposit grade and other geological value-drivers is the foundation upon which the business case for future mine development and operation is intricately dependent. Orebody knowledge is, therefore, the fundamental driver of the mineral project cycle, influencing the progression of studies and consequently, the resource company’s ability to declare Exploration Results, Mineral Resources or Ore Reserves which govern the source and cost of funding available to the project. Drilling provides a ‘vector’ to the true nature of the orebody and effectively buys time to manage the technical risk associated with the orebody. Despite its perceived high cost, in both time and money terms, drilling is the only available technology for acquiring the necessary orebody knowledge to support technical and economic studies and to minimise orebody-driven cash flow uncertainty and volatility. However, like all costs, pressure to minimise drilling budgets is ubiquitous across the minerals industry. Paired with inappropriate key performance indicators, drilling is often regarded as a cost to be minimised, rather than an investment to be optimised. Furthermore, as future deposits get deeper and more complex, the collection of orebody knowledge is increasingly on the critical path for project development. The increasing cost of data collection pertaining to these deposits increases the temptation to minimise orebody knowledge gathering at the cost of long-term value as the reduction or postponement of drilling results in greater orebody knowledge risk at all stages of the value chain. Indeed the true cost of the decision to drill less is rarely known until the mine is in operation, well after the mine project evaluation team has moved on. This paper aims to promote orebody knowledge as the fundamental source of endogenous project financial risk and, consequently, its critical importance in project financial evaluation. Furthermore, the report documents experimental research into the development of an econometric model for valuing orebody knowledge. Using the density of drilling data as a proxy measure of orebody knowledge, the proposed approach integrates well-established stochastic grade modelling techniques with the mathematical mechanics of Decoupled Net Present Value (DNPV) which, combined with stochastic grade modelling (conditional simulation), lends itself to the financial International Mining Geology Conference 2022 | Brisbane, Australia and Online | 22–23 March 2022 3 assessment of orebody knowledge risk. Based on this approach, a metric is formulated, representing the minimum value of the orebody knowledge added by additional drilling

Mar 22, 2022