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By Lawrence Devon Smith

"The concept of risk is well established in the mining industry. It is acknowledged when estimates of reserves are expressed as proven or probable, when mining and metallurgical recoveries are applied to the ore, and when contingencies are added to costs. However, it is difficult to provide a quantitative assessment of risk. The significant sources of risk in a mineral project and how these are addressed in project evaluations are discussed. The discount rate is examined as a fundamental means of reflecting risk in discounted cash flow evaluations. Current industry practice is discussed, and a methodology for the analysis of risk levels is proposed that assesses the constituent components of the discount rate: real interest, mineral project risks, and country risk.IntroductionThis paper examines the components of the discounted cash flow discount rate and proposes a method of estimating project-specific discount rates. The motivation for this work comes from experience of project evaluations in which owners and purchasers had agreed on virtually every aspect of the evaluation except how much the project was worth. Agreement was reached on reserves, grad~, recovery, capital costs, operating costs, taxes, and, by combining these components, even on the fmal cash flow values. The only difference in opinion concerned the discount rate to be used in the calculation of the net present value. Depending on the life of the project, such differences of opinion can cause a variation of more than 50% in the value placed on a project! This is illustrated in Figure 1."

Jan 1, 2003

By Christopher R. Lattanzi

"Discounted cash flow analysis provides a means of relating the magnitude of expected future cash profits to the magnitude of the initial cash investment required to purchase an asset or to develop it for commercial production. The objectives of discounted cash flow analysis are to determine:.. The net present value of a stream of expected future cash revenues and expenditures... The rate of return which the expected future cash flows will yield on a given level of initial cash investment.In the case of mineral properties, discounted cash flow analysis is generally accepted as the preferred method of valuation, whenever sufficient data are available to permit its reasoned application. Sufficient data are required to support estimation of all of the individual elements of cash revenue and cash expenditure which will be associated with the development and operation of the property, up to the end of its estimated life. It is the accuracy of these input estimates which determines the validity of the resulting determinations of profitability and rate of return on invested capital.In undertaking any discounted cash flow analysis, it is important to recognize certain fundamental attributes of the mining industty:.. The basis of any mineral development is the existence of an ore reserve... Costs are determined by the number of tonnes mined and processed, while revenues are determined by the number of pounds or ounces of metal produced. The two are related by the recovered grade of the ore... Profit is typically more sensitive to changes in revenue than it is to changes in cost... Commodity price is a principal determinant of revenue, but it is also the factor with which is associated the greatest level of financial risk.In the end, of all of the factors which must be considered in the discounted cash flow valuation of a mineral property, the most significant are the reliability of the reserve estimate, particularly with respect to recovered grade, the price at which the product is to be sold, and the risk of not maintaining the projected level of price."

Jan 1, 2003

By John Stubbs

Sub-Surface Shaft excavation Mine development Headframes Surface Production facilities Product storage and loading Tailings area Infrastructure Discovery Lodge Utilities Operations complex Port Marine loading Rail unloading and storage

May 1, 2013

By Kentwell D. J, Cusak C. J, Harvey-Kelly F. E L, M D. Goodz

The Morning Star Gold Mine presents an example of a prolific operation with considerable historical records, mine workings, drill hole logs and countless plans from greater than 20 adjacent mines which have now been consolidated to form the current project. Implementation of 3D computer modelling in the planning stages has provided an additional tool to integrate and refine geological models as a guide to some exploration strategies. It has allowed for a re- interpretation of the host rock units, dimensional constraints, new exploration extensions and provisional resource modelling. The initial consideration of this project was to integrate 135 years of mining history into a single database. Each historic mining area had an unrelated mine grid, often established parallel to the long axis of their main stopes; some were based on magnetic or true north. Survey plans were in chain, imperial or metric units. Through the manipulation and rotation of old grids, previously unrelated mine workings began to form continuous mineralised zones, with unmined portions still remaining in between the existing development. Furthermore the current drillhole database of >433 holes showed numerous confirmatory intersections of new mineralisation. A series of tiered tables were created within a relational database to derive guidelines for assessing data to attribute a Mineral Prospectivity Value [MPV] based on key indicators of mineralisation. Indicator logging now forms the basis of geological descriptions.

Jan 1, 1997

By John M. Arnold

Several years ago it became apparent to some of our people that; there was developing a very definite need for largee coal reserves in the West to satisfy- the need for fuel for the furnaces of electric generating plants with the rapid development of, the West, of both population and industry, it was impossible for hydro-electrics plants to keep up with the ever increasing demand for electricity. In 1960, Mr. E. R. Phelps, then associated with the engineering department of Peabody Coal Company, began a search for and development of coal deposits in the very remote northeast section of Arizona near the village of Kayenta. Travel to this section of the country was not easy even at this late date, and it was an eight hour drive from Farmington, New Mexico to Kayenta, Arizona, a distance of some 130 miles. The trip was over roads that even' a-horse and wagon had trouble negotiating and a four wheel drive vehicle was about the only type of transportation that could satisfactorily traverse these roads, as testify many badly beaten sedans and coupes that tried it. Since that time a very excellent road has been constructed from Shiprock; New Mexico to Cameron, Arizona where it junctions with another excellent road that runs north to Page, Arizona and the Lake. Powell area and south to Flagstaff, Arizona on highway 66. Kayenta is a small village nestled at the foot of the Black Mesa near its northeast extremities. The coal deposits of interest were on the surface of the mesa. This location presented another problem, as the only trail to the top of the mesa was intended for walking, horseback, or a brave soul In a horse and wagon. Once again the four wheel drive vehicle was about the only answer. To reach the coal deposits you must climb the mesa, which is vertical ascent of some 1,500 feet, and then proceed southward into the bowl of the mesa with an ensuing descent of some 1,000 feet, finally coming to an elevation of 6,500 feet, at which elevation the coal outcrops become apparent.

Jan 1, 1969

The Gosowong epithermal quartz-adularia vein, in the Halmahera magmatic arc, is a new discovery in an area of primary tropical rain forest with no history of gold mining or mineralization. The newly recognized mineral district also contains a number of other epithermal vein systems, two centres of porphyry Cu-Au mineralization, and a number of argillic and advanced argillic alteration zones that may be related to underlying mineralization. Gosowong was discovered and tested through the application of basic exploration techniques including drainage sampling, soil sampling, trenching, magnetics, IP, and diamond drilling. Lapse time from the initial reconnaissance discovery of a stream sediment anomaly to the release of inferred resource estimates of approximately 1.0m ounces was just over 3 years.

Jan 1, 1997

By Jon A. Carlson, W. Scott Williams

The EKATI"" Diamond Mine commenced operation in October 1998. It is operated by BHP Diamonds Inc., which is a part of the Non-Ferrous and Industrial Materials Division of BHP Minerals, a business unit of BHP Company Ltd. of Melbourne, Australia. The EKATI"" Diamond Mine is a joint venture of BHP Diamonds Inc. (51%), Dia Met Minerals Ltd. (29%), Charles E. Fipke (10%) and Dr. Stewart L. Blusson (10%). In December 1993, an office was opened in Yellowknife, Northwest Territories specifically for the then Northwest Territories Diamonds Project (EKATI"" Diamond Mine) development. EKATI"" Diamond Mine is located 300 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle in the Northwest Territories of Canada (Figure 1 ). The site is located in a remote tundra area of continuous permafrost, north of the tree line, which is part of the Canadian Shield. Wekweti (Snare Lake), a Dogrib community approximately 180 kilometres southwest of the project, is the closest neighbour. The mining area and facilities lie within the 10 960 hectares land leases held by the joint venture. The total claim block (core zone and buffer zone joint ventures) covers 344 000 hectares. To date, more than one hundred kimberlite pipes have been identified within the claims. Five of these provide the basis for the present mine plan. Total capital investment in the project is over C$700 million. At full production employment will be about 600, including employees and long-term contractors, with over 33% being Aboriginal from the Northwest Territories.

Jan 1, 2001

By Kris Inwood

"In 1879, when the Dominion government initiated its controversial program of industrial promotion, iron smelting in Canada was limited to one company producing coke iron on the mainland of Nova Scotia and three small charcoal blast furnaces in Quebec. There was no steel production. By the eve of the First World War, iron and steel were being produced in very large quantities, the companies active in 1879 had disappeared and new centres of integrated iron and rolled steel production at Hamilton, Sydney and Sault Ste. Marie had come to resemble the industry as we know it today. The most dramatic change was that at Sydney, Nova Scotia, where in the early 1900s, two steelmaking companies established works. The Sydney developments have been explained as the result of resource discovery and technical change. W.J. Donald, in his authoritative account of the Canadian iron and steel industry, observes:(1) ""The most rapid growth of the Canadian iron and steel industry has occurred since 1897 ... The remarkable growth has been caused largely by the new conditions of the industry. The discovery and use of Newfoundland ores, together with the availability of Cape Breton coal, has made the Nova Scotia industry not only possible but profitable .... It is a safe conclusion that the Canadian industry would not have been an important one, had it not been for the discovery of the Michipicoten and especially the Wabana (Newfoundland) ores:' Donald also argues that metallurgical progress had been necessary to render the ores valuable. ""Newfoundland ores ... contain a considerable amount of phosphorus, and were made available for steel-making by recent inventions:' The purpose of this paper is to re-examine Donald's story. It will be argued that the origin of steel-making at Sydney is somewhat more complicated than Donald has indicated. The difficulty with Newfoundland ore extended beyond its phosphorus content and a resolution required more than the basic open hearth furnace identified by Donald. Moreover metallurgical change was only one of several developments necessary to induce industrial investment at Sydney. Surprisingly, however, the discovery of iron ore in the late nineteenth century does not appear to be part of the explanation."

Jan 1, 1999

By Yongjun Xian

The release of fluid inclusions has a strong potential for the unintentional activation of pyrite during flotation. The present study aims to characterize fluid inclusions in a natural pure pyrite. The results indicate that a certain amount of fluid inclusions exist in the pyrite. The fluid inclusions assume a variety of shapes, including long strips, oval shapes and irregular shapes, with sizes that range from a few microns to dozens of microns. From the EDS results of hollow positions that resulted from the fracture of the fluid inclusions on the pyrite surface, certain amounts of Al, Cr, C, O, Ag and Cu were clearly detected; these elements were not detected in FeS2 pyrite itself. The contents of the inclusions were released into solution when the sample was subjected to a grinding process. Under experimental conditions of 2 g of pyrite cleaned in 40 mL of pure deionized water under an inert atmosphere, the concentrations of Cu, Fe, Cl- and SO4 2- released from the inclusions reached concentrations of 3.29 × 10-6, 32.52 × 10-6, 51.57 × 10-6 and 75.90 × 10-6 mol/L, respectively. These values are significantly greater than those from the experimental nonoxidative and oxidative dissolution of the pyrite. The fluid inclusions of pyrite were, therefore, concluded to represent the dominant sources of Cu, Fe, Cl- and SO4 2- in the aqueous solution. The present investigation provides a new understanding of the source of the unavoidable metal ions in the pulp and may benefit understanding of the flotation theory and environmental geochemistry.

By A. A. R. Gomes, X. Leca

Strong disagreement is registered by A.A. Rocha Gomes with Leca's account of the discovery published in Trans. IMM B, vol.99, 1990, p.B139-B152, which he contends minimises the role of the Portuguese state organisation Servico de Fomento Mineriro (SFM); the author, in response, once again thanks all SFM staff but reiterates his conclusion that Neves-Corvo was discovered through an amalgamation of exploration results and interpretations from different sub-disciplines and geoscientists

Jun 13, 1905

In 1983, the GEMINO research project (Geothermal Metallogenesis Indian Ocean) was initiated in order to locate and evaluate sites of recent or fossil hydrothermal activity in the largely unexplored Indian Ocean. During GEMINO cruises 1 and 2 with R/V SONNE in 1983 and 1986, the Central Indian Ridge between 21°S and 24°S was the subject of detailed exploration, including SeaBeam and magnetic mapping, hydrocasts, sediment coring, TV-grab sampling, and camera/video tows. Although hydrothermal sulfide mineralization was not located, a hydrothermal component in the sediment composition, hydrothermally altered basalts, and maximum concentrations of 27.5 nmol/kg Mn and 45.6 nl/l CH4 were discovered (Plüger and Herzig 1986; Herzig and Plüger 1988a). Leg 1 of the GEMINO-3 cruise in 1987/88 identified a neovolcanic ridge in the rift valley of a 30 km segment at 22°55'S as a site of weak hydrothermal activity and photographed smectite-like precipitates on basalt talus and a chimney structure on top of a ridge-parallel fault scarp. Water temperature data and the distribution of Mn and CH4 were interpreted as indicative of diffuse, low-temperature hydrothermal activity (Herzig and Plüger 1988b).

Jan 1, 1989

By P J. Howard, P Darvall, J H. Mainwaring

In less than a year, Atlas Iron’s Corunna Downs Project has moved from a new discovery to a substantial resource of high quality in an underexplored greenstone belt. Located approximately 170 km south-east of Port Hedland and 40 km south-west of Marble Bar, in the Pilbara Region of Western Australia, Atlas Iron Ltd (Atlas) has conducted extensive exploration work at Split Rock, Razorback, Runway and Shark Gully, consisting of geophysical surveying, field mapping, 464 reverse circulation and 16 diamond drill holes resulting in a current resource of 51 Mt at 57.3 per cent Fe (Atlas, 2014b).The Corunna Downs Project is interpreted to be hosted within the Cleaverville Formation of the Archaean Gorge Creek Group. Within the project area these rocks outcrop as subvertically dipping banded iron-formations (BIFs) and jaspilites, cherts, minor shales and meta-sediments forming a north–south trending plateau.Primary hematite-martite iron mineralisation is overprinted in the near surface environment by supergene goethite, and frequently capped with a thin laterite cover. The strongest enrichment areas have been discovered within topographic lows, proximal to fault zones, which coincide with a geophysical anolmaly. These characteristics were targeted, and the subsequent areas mapped in greater detail, allowing for efficient resource definition.Although first explored for iron in the late 1960s, it wasn’t until Atlas’ acquisition of the project in October 2012, that major strides were made to defining an economic resource. At present, Corunna Downs is Atlas’ best greenfields exploration discovery, both in terms of the potential scale of the resource and its blending capacity.The Corunna Downs prospect is emerging as a major new iron ore province in the Pilbara and includes 80 km of potential host stratigraphy. Corunna Downs sits strategically between Atlas’ Mt Webber and McPhee Creek tenements, and can play an important part in Atlas’ growth strategy as iron ore market conditions become more volatile and challenging.CITATION:Mainwaring, J H, Howard, P J and Darvall, P, 2015. Discovery of the Corunna Downs deposits, in Proceedings Iron Ore 2015, pp 305–312 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By T. Koulomzine, R P. Jaeggin

The claims now held by Mount Wright Iron Mines Co. Limited were acquired by staking in 1956, 1957 and 1958, i.e., some time after the major deposits of the Quebec Cartier Mining and Normanvi!le Mining Co. (formerly Quebec Cobalt & Exploration Ltd.) were already discovered and partly outlined. The choice of the location of the Mount Wright hold-ings was governed simply by the -availability of ground still open to staking and by its proximity to properties held by major iron companies. Mount Wright Iron Mines had no previous knowledge of the geology and no aeromagnetic results were available to it to guide the choice of areas to be staked. In order to explore the newly ac-quired claims it was decided to make a grid of widely spaced magnetic profiles on the ground rather than use aeromagnetics. This afforded the possibility of making some geological observations simultaneously with the geophysical measurements.

Jan 1, 1961

By D Howe

The Athena gold deposit was discovered in 2007 by Gold Fields Australia Ltd, at the St Ives Gold Mine, 35 km southeast of Kambalda, Western Australia. Gold anomalism was identified in sheared Paringa Basalt as a result of a regional scale aircore drilling program, in association with geophysics. In the 18 months following discovery, the deposit was intensely drilled and by June 2009, it was announced that the Athena deposit contained an ore reserve of 1.7 Mt @ 5.6 g/t for 316 koz. This was followed by a feasibility study, and as a result mine development commenced in November 2009.The Athena mineralisation is hosted in a discrete, north-south striking, steep to moderately dipping shear zone within the southwest dipping Paringa Basalt. Vein intensity has a strong correlation to grade and vein type varies from early thin quartz-albite-sulfide (pyrite and/or pyrrhotite) shear parallel veins to strong brecciation and irregular veining with quartz-albite-actinolite-biotite-pyrrhotite infill. The geology preproduction process developed at the Argo mine was refined and improved following a business improvement project. The aim of the process is to construct detailed geological interpretations prior to development allowing informed mining decisions to be made. The process delivers significant cost savings and revenue enhancements.The development of macroscopic classification scheme was critical to determine ore or waste in the early phases of mining. The Style of Deformation, Alteration and Veining (SAV) Code was the result, and has been enhanced as greater geological knowledge is gained over time.

Aug 22, 2011

Broken Hill South Limited's discovery of phosphate deposits in the northwest of Queensland in 1966 prompted intensive exploration which has proved phosphate rock in excess of 2,000 million tons at ten separate deposits. Systematic exploration for phosphate in Australia was initiated by the Company in 1964. Early in 1966, an investigation of oil wells in the Georgina Basin in the Northern Territory and Queensland revealed widespread anomalous phosphate in early Middle Cambrian Beetle Creek Formation and Thorntonia Lime- stone. Phosphorites recognised in oil wells in the southeastern part of the Basin, Queensland, led to the discovery of the Duchess deposits, Exploration of the Beetle Creek Formation since 1966 has disclosed nine other sizeable deposits north of Duchess around the eastern margin of the Basin. The Lady Annie and the adjoining Lady Jane deposits, by reason of their location, 160 miles south of the Gulf of Carpentaria, are expected to be the first to be brought into production. Beneficiation testing and engineering investigations commenced in 1967. Transport between the deposits and various port sites in the Gulf of Carpentaria has been extensively studied and a slurry pipeline as a means of transport to a deep water island port, is now being investigated.

Jan 1, 1971

Broken Hill South Limited's discovery of phosphate deposits in the northwest of Queensland in 1966 prompted intensive exploration which has proved phosphate rock in excess of 2,000 million tons at ten separate deposits.Systematic exploration for phosphate in Australia was initiated by the company in 1964. Early in 1966, an investigation of oil wells in the Georgina Basin in the Northern Territory and Queensland revealed widespread anomalous phosphate in early Middle Cambrian Beetle Creek Formation and Thorntonia Limestone. Phosphorites recognized in oil wells in the southeastern part of the Basin, Queensland, led to the discovery of the Duchess deposits. Exploration of the Beetle Creek Formation since 1966 has disclosed nine other sizeable deposits north of Duchess around the eastern margin of the Basin. The Lady Annie and the adjoining Lady Jane deposits, by reason of their location, 160 miles south of the Gulf of Carpentaria, are expected to be the first to be brought into production.Beneficiation testing and engineering investigations commenced in 1967. Transport between the deposits and various port sites in the Gulf of Carpentaria has been extensively studied and a slurry pipeline as a means of transport to a deep water island port, is now being investigated.

Jan 1, 1971

By Andre Panteleyev, Charels S. Ney, John M. Anderson

"Sam Goosly prospect, 22 miles southeast of Houston, B.C., was discovered in 1967 through geochemical reconnaissance. Soil sampling interpreted with respect to an east-to-west ice movement led to drilling targets.Mineralization is in a window of rocks thought to be Hazelton Group surrounded by Tertiary volcanic rocks and intruded by two stocks separated by about one mile. A westerly quartz monzonite stock is dated 61.1 m.y. and an easterly gabbro-monzonite complex is dated 52.5 m.y. The Tertiary volcanics are trachyandesites shown by the B.C. Department of Mines and Petroleum Resources to be in part extrusive equivalents of the gabbro, and they overlie Hazelton rocks uncomformably. Copper-molybdenum mineralization is sparsely developed in the westerly stock. Silver-copper mineralization forms an elongate west-dipping slab between the stocks in Hazelton rocks, which are continuously pyritized. The gabbro stock is not mineralized, but some dikes related to it are slightly so. Tertiary rocks are pyritized, but are not known to carry copper-silver mineralization. Hazelton rocks are divided into a lower conglomerate, an intermediate pyroclastic unit and an upper mainly sedimentary unit. They form a west-facing homocline. Coppersilver mineralization resides in the pyroclastic unit, mainly in a massive dust tuff through which are lenticular units of lapilli tuff. Well-mineralized rock is typically a breccia of light fragments in a dark chlorite-sulphide matrix. Sulphides are pyrite, chakopyrite and locally pyrrhotite, with very minor tetrahedrite, s phalerite and other sulphosalts. Rock alteration is predominantly a pervasive pyrite-sericite type, with widespread tourmaline, scorzalite, gypsum, ankerite and traces of fluorite. The most evident control of the copper-silver mineralization is the gross parallelism, over a strike length of 1.5 miles, to Hazelton strata, particularly a massive dust .tuff unit. In detail, mineralization crosscuts bedding and there is no appreciable banding within sulphides . A strictly syngenetic origin is untenable, but some initial concentration in a volcanogenic environment with subsequent modification by thermal processes seems likely."

Jan 1, 1972

The Tom's Gully gold mine is located 90km ESE from Darwin, in the Northern Territory of Australia. The orebody is the auriferous portion of a large sulphide rich quartz reef, hosted in the Wildman Siltstone Formation of the Early Proterozoic Pine Creek Inlier, at the NH extremity of the Mount Bundey granite-syenite intrusion. It was discovered by Carpentaria Exploration Company Pty Ltd on November 17th, 1986, using stream sediment geochemistry.The reef is 800m long at surface, strikes E-H and dips approximately 300 to the south, becoming progressively less steep. Only the eastern half of the reef is auriferous, with gold grades averaging 9 g/t plus anomalous silver, base metals and arsenic.The enclosing siltstone is a dark grey banded carbonaceous and pyritic metapelite, showing areenschist regional metamorphism and thermal effects from the adjacent pluton. Local folding plunging gently SW is cut by a south dipping fault, probably a thrust, in which the reef was later formed at about the time of the granitic intrusion. The main sulphides in the reef are pyrite and arsenopyrite, with gold occurring as microscopic particles in...

Jan 1, 1990

By Kristopher John Shelswell

The work in this paper describes the theory, development and analysis of a computer model simulating a mine operation moving material using concurrent decline ramp truck haulage and skipping practices. This simulation was designed specifically to assess the performance of the truck haulage component and to expand on the scope and capabilities of traditional TKM fleet calculations. Haulage fleet simulation results were similar to TKM calculations for the lower to moderate production rate cases. However, comparisons of ramp-up and high production rate scenarios indicated that the simulation model was significantly more sensitive to operating practices and factors not accounted for by calculations derived when using a single TKM figure. Given the proper calibration of inputs and logic, the simulation model was additionally capable of providing information associated with general mine operations efficiency. Further benefits of the simulation model over a TKM approach included logistical assessments such as production schedule feasibility, productivity trade-off quantifications for proposed operating practices, and the validation of mine resource utilization scheduling. The simulation model was able to expand on traditional methods to approach planning and logistics by considering factors such as truck queuing, real-time traffic interactions, random events, and competition for resources on mine productivity.

May 1, 2013

By Bill Dershowitz

Consider a deep gold orebody with grade of 4 g/t (0.11 oz/st). At the time of this writing, with gold prices at historic highs, it could be a good, but not great, prospect. But if it is a vein deposit, and those veins are 200 g/t (5.8 oz/st), it would be significantly more attractive if there was a way to produce directly from those veins, leaving the rest of the rock in place. [Figure 1 The red around each of the four injector wells shows areas of high pressure, where the lixiviant fluid is pumped into the rock mass, with orange and yellow indicating dissipated pressure. The black lines indicate some of the fracture pathways through which the lixiviant, with absorbed metal, flows toward the central recovery well where low pressure is indicated in blue. Lixiviant is pumped out through the recovery well. Image courtesy of Golder Associates.] There is a way to do this, in situ leach (ISL) or solution mining. It has been a viable commercial technology for more than five decades.

Jan 1, 2011