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By S La Brooy, C Fountain

Throughout its history the mining industry has focused on the highest-grade deposits sited in the most convenient locations. The burgeoning global population and higher standards of living not only increase the demand for mineral products but also make it harder to mine and process them. The future will include the development of lower-grade, more complex orebodies, and orebodies in difficult locations. The industry will be expected to provide for humanityÆs needs while reducing its environmental footprint and maintaining profitability. This paper reviews some of the likely adaptations in mineral processing that will occur over the next 20 years. The challenges inherent in adapting to lower grade and more complex materials might be exacerbated by such factors as the availability of water and low-cost energy. In underground mining, higher energy costs are likely to foster further developments in underground preconcentration, especially for ores that can be upgraded at relatively coarse sizes. The adoption of underground crushing could also render material amenable to semi-dry preconcentration options such as might be achieved by the rotary classifier developed by CSIRO and being commercialised by RCR Tomlinson, or more modern versions of the hand-sorting of ore that use sensors based on colour or other suitable rock properties. The cement industry and some gold roasters have used the alternative of dry grinding and classification, which might also have a part to play in dry processing. There is also likely to be increased interest in options such as in situ leaching that further minimise the surface disturbance. Underground operations will have to balance the energy savings from reducing the amount of material brought to the surface and reduced surface disturbance against the practical limitations of installing and maintaining processing equipment underground. On the other hand, surface disturbance and energy issues in open cut operations will be balanced by potentially lower mining costs and higher overall recovery from the deposit.

Jan 1, 2008

By G Lane, S La Brooy

A century ago, new mines were often accompanied by smelters. In Australia, smelters were built at the Daydream mine near Broken Hill, at Kuridala and Mount Elliott near Mount Isa, Broken Hill, Mount Lyell, Mount Morgan, Mount Isa, and more recently at Tennant Creek, Kalgoorlie and Olympic Dam. Now the big miners eschew site-based processing in favour of shipping concentrate to smelters in Europe and Asia. As Chip Goodyear was in the process of vacating his leadership role at BHP Billiton, he was quoted as saying that BHP should concentrate on mining ore and leave æto others the skill set of processing that materialÆ. Yet there are times when on-site processing clearly makes sense. Few companies ship gold ore or concentrate to China for gold extraction. New smelters are being built in Zambia. Solvent-extraction and electrowinning plants frequently produce copper from oxide ores and concentrates while pressure leaching is increasingly being considered for copper sulfide ores. Some argue that on-site processing is best because the waste products can be returned to the ground from whence they came, avoiding potentially large disposal costs in more-populated areas. Copper treatment and refining charges will not remain at $45 per tonne and 4.5 cents per pound forever. This paper examines when it makes sense to use on-site pyro- or hydrometallurgical processes in todayÆs environment and comments on how current trends might alter the balance in future.

Jan 1, 2008

By A P. Wibowo

Indonesia holds a significant role in the utilisation of coal resources in the world. Although the number of Indonesian coal resources and reserves do not fall into the world’s top ten, according to 2009 statistics, Indonesia is the seventh largest producer of coal with a production of 256 Mt. More than 80 per cent of this amount is sold in the export market, making Indonesia the world’s second largest coal exporter. Most of the exported coal from Indonesia is used to fulfil the needs of the Pacific market, such as Japan, Taiwan, China, among others. It is also possible to reach the Atlantic market.Along with Indonesia’s development program, until 2025 the Indonesian government has adopted a National Energy Policy that aims to reduce the role of petroleum in electricity generation and replacing it with coal. As a follow-up of the policy, since 2009 PT PLN, the state electricity company has built steam power plants throughout Indonesia as an implementation of the first stage of the Electrical Acceleration Project with a capacity of 10 000 MW. Moving forward, in 2011 PT PLN will also build the second stage of the project with a capacity of 10 000 MW. As a result of the program, the domestic need for coal is expected to increase as much as 44.8 Mt.With the increase in domestic need and decrease in the number of reserves, the Indonesian government has adopted policies to secure the domestic coal supply. A policy that may potentially be adopted by the government is the limiting of coal production, seeing the high rate of increase in Indonesian coal production. The adoption of such a policy will change the distribution map of coal in the Pacific market. Thus, this paper will evaluate the change of coal distribution patterns in the Pacific market along with the increase in Indonesian domestic needs and Indonesian adoption of policies regarding the securing of coal supplies.

Nov 22, 2011

By Fickera M. A, Marshall S, Burgeese F. L, Burgees J, Estrina H

A new high intensity flotation process FASTFLOT was deployed to recover residual zinc from the zinc circuit tailings at Pasminco Mining's Concentrator, Broken Hill. Performance of the FASTFLOT process is discussed with respect to various size fractions. Results suggest that the process has an affinity not only for fine particles but also for +200 ¦m particles which the conventional flotation cells failed to recover. Various strategies for FASTFLOT deployment are also discussed.

Jan 1, 1995

By B Robertson

Over the 40 years that the author has been engaged in the Australian underground coal mining industry, there has been a continuous improvement in safety performance as the sector has grown in size and productivity. The underground environment hosts many hazards with significant risk profiles that are kept in check by effective health and safety management systems that have evolved largely following major underground disasters. Observations are made on the changes observed for specific aspects of the underground coal sector, with particular reference to ventilation issues, and predications are made as to the needs of the future.CITATION:Robertson, B, 2013. Past achievements and future challenges in the underground coal sector, in Proceedings The Australian Mine Ventilation Conference , pp 27-32 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 1, 2013

By T Roesch, M Neurohr, S Stratton

"Dwindling commodity prices are forcing today’s mining operations to increase output. Sometimes the solution is to upgrade the existing infrastructure; however, in most cases it has to be achieved with the same or reduced workforce and with the same equipment capacity through improved process efficiency and higher uptime.Measure, Manage and Improveis the mantra for this years’ Mill Operators’ Conference and while this in most cases relates to the above process efficiency, Siemens has set its focus on the availability and uptime aspect since unscheduled downtime is one of the biggest threats to any grinding operation. Pinion misalignments, resonance, unbalance and bearing and gear meshing faults in geared trains, as well as long-term changes in the condition of the mechanical components or structures and auxiliary systems in gearless systems are the main reasons for unscheduled downtimes in today’s mill drive trains. Our paper outlines the efforts that have gone into adapting conventional condition monitoring methods in conventional, pinion driven mill drive trains as well as gearless systems to capture the gradual deterioration of wearing parts or structural changes in the drive train not only on fixed speed application but also on variable speed applications with multiple operating points. The paper further explores the use of condition monitoring systems as a tool to assess spare thermal motor capacity to potentially push equipment beyond its nameplate rating, along with the process that was followed to correlate measured frequency spectra and envelopes to ambient and load data to understand the kinematics of the drive train.Citation:Neurohr, M, Stratton, S and Roesch, T, 2016. Advancements in Condition Monitoring on Mill Drive Trains for Proactive Maintenance and Early Fault Detection Purposes, in Proceedings 13th AusIMM Mill Operators’ Conference 2016, pp 263–272 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Oct 10, 2016

By D Kent

The introduction of digital technologies into the underground mining industry, in both coal and hard rock mining, has enabled many high bandwidth applications to be adopted by mines.Digital networks based on 802.11 b/g/n open Wi-Fi standards allow for many applications to be run over a single communication backbone. One important application has been tracking personnel and equipment via RFID tags. This tracking application has in turn formed the basis of a Proximity Detection System (PDS) or Collision Avoidance Systems (CAS). The paper discusses the growth in digital technology as the communication backbone in underground mines which has allowed the ‘convergence of technologies’ that has been occurring in the general business world to be available to underground mine operators. Then the paper will focus on the use of the technology in the increasingly important are of risk control around mobile plant underground. The specific use of digital devices for proximity detection, in both hard rock and coal mines, to provide a system that can deliver an additional level of control to the risks associated with people-vehicle interactions underground is discussed. The initial implementation of PDS in the hard rock mining environment is based on two zones of detection, required for large and relatively high speed vehicles. Information will include:•the principles of the underlying technology,•installation learnings and effectiveness, and•change management methodology and issues.The most recent development to integrate Mine Site Technologies (MST) PDS with Frederick Mining Controls’ HazardAvert® System to extend the overall Proximity System’s functionality in hard rock mines and for use in coal mines is overviewed.

Mar 21, 2011

Around no subject of technical )uterest have prejudice and wrong-thinking in the past so wrapped a web of obscurity as that of the corrosion of metals.It is a matter which has primarily concerned the engineer, but the paucity of his training in chemistry and electrochemistry has been the stumbling block to a better understanding of its mechanism.Now that the more important conditions controlling corrosion have been scientifically.established, it can be seen that, with the exception of but a few of the minor points, the electrochemical laws enunciated by Faraday, Helmholtz; Nernst, and others, are sufficient to include all the facts of the process.The word corrosion (derived from the Latin rodere-to gnaw) is so often wrongly applied that a definition at this stage would be useful. As now understood, it means the dispersion and waste of the useful solid metal by conversion into a useless compound which mayor may not be retained on or near the metal remaining.Commonly the presence of these compounds is regarded as evidence of corrosion, but the converse is not necessarily true; the lack of visible corrosion products on a clean surface of metal is no criterion of the absence of this change. It may be difficult to prove that the erosion of such a surface has been caused by chemical and not by mechanical effects alone.

Jan 1, 1932

By R R. Lovel, G J. Sparrow

Currently there are large reserves of good quality iron ore near to existing infrastructure that are not being developed because the phosphorous levels are above acceptable market specifications. Since the high phosphorous content is considered to be mainly associated with the goethite fractions of the ore, attempts were made to leach the phosphorous from the ore after a heat treatment to dehydroxylate the goethite. Heating the ore and leaching with 40 g/L NaOH lowered the phosphorous levels from 0.145 wt per cent P to 0.075 wt per cent P or lower, but a heating temperature over 800¦C was required to achieve this reduction in phosphorous levels. However, when sodium hydroxide was added to the iron ore before the heat treatment, similar phosphorous removal was achieved with a heating temperature of 300 - 350¦C. It was considered that dehydroxylation of the goethite in the presence of the hydroxide makes the phosphorous available for removal with a water leach. As well, 50 per cent of the silica and 60 per cent of the alumina in the ore were also removed in the leach, but some sodium remained in the leach product. Further work is required to remove the residual sodium to produce a marketable product.

Jan 1, 2009

By R M. Tosdal

The Manantial Espejo district (Argentina) hosts a low-sulfidation epithermal Ag (-Au) deposit with a proven and probable reserve of 38 Moz Ag and 0.55 Moz Au. The district lies along the southern rim of the Deseado Massif in the Middle to Late Jurassic Chon Aike Province, a large bimodal igneous province dominated by silicic volcanic rocks that were formed during the initial extension leading to the opening of the South Atlantic Ocean. The district stratigraphy consists of 162 to 161 Ma old rhyodacitic to rhyolitic volcaniclastic rocks of the Chon Aike and La Matilde Formations, followed by 160 to 157 Ma old andesites and dacites of the informally called intermediate formation. The main stage of normal faulting post-dates the volcanic activity and coincides with the formation of the precious metal veins that were dated by 40Ar/39Ar on hydrothermal adularia with ages between 152.8 ¦ 0.8 Ma and 156.6 ¦ 0.8 Ma. Economically important hydrothermal veins show characteristic features of a low-sulfidation epithermal deposit with crustiform and colloform banding, bladed calcite replaced by quartz and abundant adularia. In the Maria Vein, the major orebody of the district, six hydrothermal stages are identified, but only stages one and four contributed metal. Lead isotope ratios in hydrothermal sulfides show a close relationship to ratios in feldspars from the district Chon Aike Formation, suggesting a common source for the Pb and possibly the precious metals in both the magmatic and hydrothermal products, or that the Pb in the hydrothermal veins was derived from the volcanic rocks. An EXTENDED ABSTRACT is available for download. A full-length paper was not prepared for this presentation.

Jan 1, 2008

By G Harbort, D Zoetbrood

"The Phu Kham copper-gold operation in the Laos People’s Democratic Republic (PDR) is owned and operated by Phu Bia Mining Limited. PanAust Limited holds a 90 per cent interest in Phu Bia Mining Limited, with the remaining ten per cent held by the Laos PDR Government.The original 12 Mt/a copper-gold concentrator at Phu Kham commenced production in April 2008. An incremental improvement program resulted in a number of circuit changes being incorporated by 2011, including conversion of conditioning tanks to flotation cells and the installation of a Jameson Cell cleaner scalper. In 2012 the Phu Kham Upgrade Project was commissioned to increase throughput to 18 Mt/a. In April, 2013 the Phu Kham Increased Recovery Project was commissioned to maximise performance by debottlenecking the plant IsaMill™ regrind and cleaning capacity.With the variable mineralogy of Phu Kham ore, control of the c concentrate regrind circuit is essential in terms of achieving effective liberation to maintain concentrator performance. On a routine basis laboratory regrind signature plot data is compared with daily surveys of the operational IsaMills™. More extensive surveys are also conducted to determine size distribution on a mineralogical basis and the effect of fine regrinding on pulp electrochemistry and flotation performance. This paper provides a review of the operating performance of the Phu Kham IsaMills™ with regard to power draw, feed and product size distribution, feed per cent solids, mineralogy and pulp electrochemistry. Operating performance is compared with the IsaMill™ signature plot test for predicting performance.Citation:Harbort, G, Zoetbrood, D and McNab, B, 2016. Operating Performance of the Phu Kham IsaMill™, in Proceedings 13th AusIMM Mill Operators’ Conference 2016, pp 39–50 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Oct 10, 2016

By B Abbasi

It is well known that most roof falls in coal mines typically occur at and around intersections. Room-and-pillar and longwall coal mining systems typically develop 3-way and 4-way intersections. This research develops an improved scientific understanding of stress distribution and associated instability behaviour around 3-way and 4-way coal mine intersections through 3-D numerical modelling and limited field observations. Numerical analyses were performed for an Illinois longwall coal mine to identify factors that influence intersection stability. The stability of immediate roof, floor strata, and coal ribs at and around intersections are considered with pre-mining regional horizontal stress. Non-linear failure analyses used the Hoek-Brown failure criterion for rock mass. Progressive failure zones in and around intersections were developed. For a typical 4-way intersection, pillar corners across the intersection fail first and lead to progressive failure of the immediate roof and floor layers. The mechanism of failure is similar for a 3-way intersection but the shape and extension of failed zones differ. For the 3-way intersection, the effect of off-set distance was analysed. It was found that minimum off-set distance of about 10 m (centre to centre distance between two 3-way intersections) was required to minimize interaction between two intersections. A simple instrumentation program monitor ground movements around intersections. These data were used to design the intersection geometry that is now being practiced by the mine. CITATION:Abbasi, B and Chugh, Y P, 2018. Instability analysis in three-way and four-way coal mine intersections, in Proceedings The Fourth Australasian Ground Control in Mining Conference (AusRock), pp 345–359 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 30, 2018

By J Tibbett, A Colebourn, B Hebblewhite, F Suorineni

The concept of Big Data refers to data sets that are so large, variable and/or complex that traditional data processing applications struggle to integrate the data for effective investigation, analysis and value generation. With advances in sensor technology and smarter equipment, the mining industry is experiencing Big Data, and in a different way to how the intelligence and marketing communities experience Big Data. Future mining will bring larger, more complicated and diverse data sets increasing the strain on traditional data integration and investigation techniques. Block caving is an important mining method for the extraction of massive, low-grade ore deposits due to its low operating cost and high production potential, given the right orebody geometry and ground conditions. This paper focuses on block caving due to its increasing popularity and importance in the future economic extraction of multiple commodities. The block cave mining system (BCMS) is a complex interrelation of factors, and due to the reliance on natural processes within the system, it is one of the least understood mining methods. Obtaining information on the factors within the BCMS generates large, complex data sets on various time scales. Each sensor network within the BCMS combines spatial and temporal information with tens to hundreds of recorded parameters. Data sets are quickly moving from multidimensional to n-dimensional. Optimisation of the BCMS is only possible through a holistic analysis approach, thus involving the integration of multiple, diverse, n-dimensional data sets (Big Data). This paper presents a current example BCMS Big Data situation involving 12 sources of information with differences in volume, data format and frequency of data generation. This suitability of virtual reality scientific visualisation (VRSV) as a solution to BCMS Big Data interpretation difficulties is then discussed. These 12 data sets can be effectively integrated using VRSV for intuitive and accelerated investigation of the BCMS. Potential future Big Data within the BCMS is presented involving 20 sources of information resulting from our increased need for monitoring and advancements in technology. Current methods of defining queries may not be suitable within these future complex, multidimensional data sets, and the potential of artificial intelligence algorithms within this system is discussed. These advancements in technology and machine learning lead to the requirement of live data acquisition and analysis. VRSV is identified as a suitable technology to satisfy the needs of real-time insight into the performance of these future caves for optimised management and reduced risk.CITATION:Tibbett, J, Suorineni, F, Hebblewhite, B and Colebourn, A, 2015. Virtual reality scientific visualisation – a solution for big data analysis of the block cave mining system, in Proceedings Third International Future Mining Conference, pp 109–116 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 4, 2015

This paper reviews recent advances in geophysical tools for mineral exploration. It does not restrict comments to methods which are usually applied in the tectonically active belt surrounding the Pacific Ocean, where geophysics has often been secondary to geological prospecting (eg visual recognition of surface alteration) and drainage geochemistry; but considers geophysical tools applied to a broader range of both deposits and terrains. For example, the subdued topography of much of Australia and Canada has lent itself to the development and extensive application of airborne methods. In Australia, deep weathering and transported cover have necessitated the use of geophysical methods to not only detect anomalies but also to map and understand basement geology. This same weathering has caused specific problems, particularly for electrical methods, but recent improvements in instrumentation, processing and visualisation have largely overcome them. A great deal of geophysical data is now being collected by government agencies, often from the air, and made readily available to explorers. In several Australian states it is free, often on line, and in almost all cases it is relatively cheap. These regional data sets are often augmented by more detailed local surveys in areas of interest. Although æanomaliesÆ are still important much more is being done with the high quality data which is now available The results are used for geological mapping, to test geological hypotheses, to construct detailed 3D geological models and, together with fluid flow modeling, to predict optimum locations for mineralisation.

Jan 1, 2004

By A Murphy

Mining plants and infrastructure, and the decisions made by their designers, can have large impacts on their environmental and social context, commonly referred to as the site or plant footprint. They can also be the source of constructive contributions to sustainable development when designers are enabled via the information, systems and tools to incorporate sustainability in engineering processes. A facility’s footprint and the project’s contribution to sustainability – economic, environmental and social aspects – are now key considerations in regulatory approval processes and are the fundamental drivers of support, or opposition, from the project’s stakeholders.Historically, plant and infrastructure designers have not been well integrated with the environmental and social professionals who are engaged to pursue regulatory approvals. Despite this, many objectives central to technical and process engineering have in fact contributed positively to a facility’s footprint and indeed its contribution to sustainable development. Examples of these objectives include increasing process and energy efficiency, and minimising the quantities of waste requiring disposal. With the framework of sustainability, mining plant and infrastructure designers are indeed at the forefront of incorporating sustainability into resource industry projects and are central to the process of obtaining regulatory approvals and ongoing stakeholder support. The process of incorporation starts with a shared understanding of sustainability and sustainable development, and continues with project processes that facilitate information and knowledge exchange throughout the project life cycle.CITATION:Murphy, A, 2014. Incorporating sustainability into mining plant and infrastructure design, in Proceedings Life-of-Mine 2014 , pp 637–646 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 16, 2014

Traditional in situ fan flow test methods under accepted standards require determinations to be made of both static pressures and total pressures during testing. This is to determine the resultant velocity pressures, which are vital in the accurate determination of the final fan airflow. These crucial velocity pressure (Vp) determinations are normally determined using simple manometric instrumentation such as an electronic manometer or an inclined liquid filled manometer. There is relatively little noise or fluctuation in the static pressure determinations and they can be quite easily and accurately recorded. There is almost always considerable fluctuation in the velocity pressure determinations though due to the highly turbulent and irregular velocity profile normally found in such in situ installations. This velocity turbulence means that the recording of such data is subject to random human error as the observer tries to average such fluctuations mentally during the observation period. Worse than this, and in the extreme, the recording of such velocity pressure data could actually easily be misreported if, for some reason, persons chose to do so.The author has devised a field method using highly accurate quartz crystal logging barometers to objectively record these velocity pressures. The method eliminates the ability to either mistakenly or intentionally misreport these crucial velocity pressures and is carried out in parallel with the recognised methodology, so result comparisons can be drawn. As such, a far greater level of confidence can be achieved in the final flow performance results than using the traditional more subjective method. Further to this it is difficult and almost impossible to refute the results using this ancillary substantiation method.The accurate determination of fan flows due to the impost of the carbon tax has taken on much more significance given the financial impacts in Australia at this time. The methodology detailed herein can be applied equally for both fan flow compliance testing and the verification of mine airflow data for greenhouse gas emission evaluations.The paper utilises the results of one 24-point pitot traverse to demonstrate the various findings. These include the very wide range of velocity pressures, which were logged at most of the measuring stations. It also illustrates how the method is utilised and compares the results derived from both this method and the more subjective traditional method along with the benefits of logging the velocity pressure results during the testing process.CITATION:Rowland, J A, 2013. Removing some subjectivity from traditional BS 848 and ISO 5802 in situ fan flow tests, in Proceedings The Australian Mine Ventilation Conference , pp 155-162 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 1, 2013

By I Sucholutsky, D M. First, D Mogilny, F Yusufali

Machine learning is creating value in all facets of the mining industry, from exploration to production. The authors provide an accessible, high-level introduction to artificial intelligence (AI), machine learning (ML), and deep learning (DL); the latter being widely recognised as one of the most powerful forms of ML. In particular, the authors will introduce deep learning models known as convolutional neural networks (CNNs), how they are applied, and the economic considerations necessary for determining when DL may be the right solution to de-risking complex block modelling problems. The authors present preliminary results from the mineral resource modelling study of the Jundee orogenic gold deposit, Yandal belt/gold province, Western Australia. The primary goal was to identify the direction and location of the narrow gold veins more accurately and demonstrate how non-linearly correlated elements are used as direct inputs to the resource model to assist with the target element’s grade prediction. This demonstrates that: (1) existing techniques for finding correlations between assayed elements do not adequately reflect the complex geology of the asset, (2) nonlinear correlations that are difficult to model as simple mathematical functions are representative of geological patterns in a deposit, and (3) non-linearly correlated assayed data, fed as inputs, increase the performance of the resource model as reconciled through blind tests. To conclude, the authors hypothesise that the patterns represented by the DL block models may be revealing the results of overprinting geological processes that generated mineral deposits. For example, the primary hydrothermal processes that deposited metals created depositional patterns that become particularly complex as a result of being overprinted, in part or in whole, by secondary physicochemical processes. This may explain why non-linear geochemical relationships have the capacity to generate more accurate block models of mineral deposits.

May 24, 2023

By F Saloojee, F K. Crundwell

Refractory ores need to be pretreated prior to cyanide leaching for acceptable gold recovery. Pressure oxidation is one method of rendering the ores more suitable for cyanidation. The focus of this work is optimisation of autoclave configuration for pressure oxidation. An autoclave for the pressure oxidation of a feed containing pyrite and arsenopyrite was modelled, using the population balance framework. The autoclave model takes into account feed particle size, reaction kinetics and retention time. Mass balance calculations were incorporated into Cycad Process« software. This allowed for the investigation of different circuit configurations. The base case model consists of a single autoclave. The feed was then doubled and additional autoclaves were added to provide the same residence time as the base case. Four different configurations for the additional equipment were simulated. These were parallel, series, series with inter-stage thickening and parallel-series circuits. The options are compared in terms of extraction and productivity. The parallel circuit behaves similarly to the base case. The series and series-parallel circuits have higher recoveries and productivities than the base case. The series circuit with inter-stage thickening provides the highest extraction and productivity. This is because the thickening reduces the slurry volume and increases the residence time of the solids in the downstream autoclave.CITATION:Saloojee, F and Crundwell, F K, 2013. Optimisation of circuits for gold pressure oxidation, in Proceedings World Gold 2013 , pp 181-188 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 26, 2013

Banks' focus in using cash flow methods can differ markedly from that of equity investors. This paper attempts to explain and describe bankers' approach by: ò outlining the fundamental difference between banks' and investors' risk / return profiles. ò describing lenders' consequent use of cash flow methods in mineral valuation. areas. explaining lenders' specific treatment of key risk Fundamental to understanding banks' appraisal of mineral projects is the appreciation that lenders have a basically different risk profile and outlook from those familiar to equity investors. Lenders do not normally participate in any project upside. The economics of lending dictate that banks can only accommodate a low probability of loan default and consequently banks' principal focus in mineral ""valuation"" is ensuring an acceptably comfortable probability of debt repayment. A simple conceptual explanation of lenders' risk / return position is outlined.

Jan 1, 1994

By Bell I. F

In 1985, ZC Mines (now Pasminco South) had been unprofitable for some years due to a combination of high operating costs, low metal prices, low head grade and an aging and inadequate mining infrastructure. However, the resource of metal in the ground was still of world class, even after some 80 years of mining. A major study, which was to be of two years duration, was therefore commenced to establish a practical and profitable long term mining strategy and to cost the infrastructure options needed for its support and thus form the justification for a capital expenditure program to take the mine profitably into the 21st century and its second century of operation. This paper discusses the rationale behind the methodology adopted and the nature of the results achieved in one aspect of the study - the determination of the mineable resource and the relationship between the head grade/quantity of the economically mineable resource and the variables of cut-off grade, cost structure, annual production rate and metal prices/exchange rates. The basis of the study was the designing of some 5000 scopes to mine out the entire resource for a range of cut- off grades and the assembly of the detailed physical data thus obtained in a stope-by-stope data base for financial and other analysis. Those scopes which were shown to be economically mineable were then scheduled for two optimum annual production/cut-off grade/metal price combinations to provide life-of-mine cost and value of production cash flows.

Jan 1, 1992