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By Donald W. Gentry

This section deals with one of the most fascinating aspects of mining the evaluation of mine investment opportunities. Be-fore proceeding further, it is important to clarify the meaning of some fundamental terms used frequently in the text. 6.0.1.1 Mine Valuation vs. Evaluation The words "valuation" and "evaluation" in a mining context are often used interchangeably. However, for the purposes of this section, a distinction is made between the two terms in accordance with commonly accepted practice. The word valuation in a mining project context has the rather narrow meaning of placing a dollar or other currency value on the worth of the project as a whole. In other words, the value of a mining project refers to a measure of the desirability of ownership of that property. As such, the major item of interest is, "what is the mine worth?," or `what is the value of the mine?" The value of a mining project may actually be determined in the marketplace at any specific point in time, or it may be estimated by one of several methods. The topic of mine valuation is discussed in more detail in Chapter 6.1. The word evaluation in a mining project context connotes the broader meaning of determining the numerical values of all

Jan 1, 2008

By H. C. W. Bosman

"Over the past five years, contributions from geologists and mining engineers were instrumental in the successful development of MEPS. It is a system of FORTRAN programs specifically designed to be used by mining personnel to solve geological and mining problems. MEPS is a flexible keyword-driven system. Extensive error editing procedures significantly reduce the time required to proceed from problem recognition to solution. Possibly the most attractive feature of MEPS is that computer solutions may be guided or selectively modified to obtain desired solutions. Some highlights of MEPS are:1. Vocabulary that is familiar to mining people.2. Geological data storage and retrieval.3. Statistical analysis and variograms.4. Contour maps of assays and geological horizons.5. Trend surface analysis with residual evaluation.6. Ore reserve calculations.7. Open-pit mine design.8. Marginal profitability calculations on pit walls.9. Production scheduling.10. Vertical cross-section plots indicating pit outlines, ore grade contours and selected geological horizons."

Jan 1, 1973

By Thomas J. Neil, O&apos

Most analysts find that progress has been evolutionary in any technologic field. To be sure, a few discrete breakthroughs can usually be identified, but viewed in its entirety, the curve of technologic progress over time tends to be relatively smooth with few discontinuities. Even in those cases where a major scientific discovery is achieved, the rate of technologic progress is limited by the often surprisingly slow rate of commercializing the concept into usable products. Whereas discovery and invention tend to be discrete events, technical innovation is often a painfully slow process. In spite of overall gradual change, technologic progress in most fields, when viewed in retrospect, tends to reveal certain relatively homogeneous periods where little change is evident, separated by episodes of accelerated progress. Thus, open-pit mining over the past century has changed from predominately train haulage to truck haulage and is now experiencing a major increase in belt haulage. Ore reserve estimation is another field that fits the same pattern, and the history of mine evaluation lends itself to a similar analysis. Evaluating mine investment opportunities is a fascinating aspect of mining. The unique set of risks inherent to every mining project is particularly intriguing. Geologic risks are most obvious, since faulty ore grade and tonnage estimates are among the leading causes of mine failures. Wide swine's in mineral commodity prices are usually cited as another major risk in mining. Because any ore deposit is a finite resource and the miner has limited discretion in selecting a mining sequence, mines are generally at the mercy of notoriously fickle commodity markets. There is a tendency for many mine investment analysts to feel that mineral market uncertainties are unprecedented in severity. Of course, prices in other markets rise and fall also-in some cases as precipitously as with minerals. However, two other mining characteristics tend to compound this marketing risk. First, the preproduction development period for a new mine is characteristically long. Under extremely favorable conditions, a significant mine may be developed in as little as two years, but the norm is four to six years or more. Second, mining is among the most capital intensive industries, consistently ranking near the top among all industrial sectors in assets per employee, and near the bottom in annual sales dollars per dollar of assets. Thus, mine investors typically have large sums invested for a long time before the outcome of the venture is determined by notoriously unpredictable markets. This is not a business for the faint of heart, and the importance of sound investment decision making is obvious. The high risk and technical complexity of mining operations have combined to require greater attention to financial evaluation by mining engineers than by most engineers in other specialties. Nearly all early mining engineering textbooks dealt with problems in mine valuation in a detailed manner; and, today, the sophistication of capital investment analysis is high in the mineral industries. Traditional Mine Valuation Methods Although some evaluation process has no doubt accompanied nearly every mine development throughout history, a formalized quantitative approach first emerged in the last half of the 19th century with the establishment of academic programs in mining engineering. The philosophy and approach to mine valuation that evolved at this time were, with periodic minor refinements, considered the standard for nearly a century. Only after 1960 did major changes begin to occur. The traditional approach to mine valuation reflected the investment community's historic attitudes toward risk. Mines were generally considered too risky for debt financing, and virtually every new mine was financed from internally generated funds or new equity subscriptions. The investment evaluation methods that evolved focused on mining's higher risk relative to other

Jan 11, 1982

By Thomas O’Neil

Part 2 of this article continues with a discussion of features that distinguish contemporary investment analysis in mining from earlier methods. Part 1 traced the evolution of evaluation methodology from the traditional and discounted cash flow methods to the present. Quantitative investment models of the past 20 years played an important role in mine evaluation, but a new integrated approach to mine investment decision-making is now developing because of growing economic, technical, and political uncertainties. One of those uncertainties -inflation-was discussed in Part 1. Increased Risk At a time when mineral production technology and analytical evaluation tools have never been more sophisticated, it may seem anomalous to claim that mining ventures are riskier. Whereas technical risk has, indeed, been notably reduced, business risk the chance of a major loss due to market factors-has increased. This has been caused by two factors: the rapidly rising capital requirements of new projects and increasingly unpredictable future economic conditions. These difficulties are compounded by the long lead times of large, new mining projects. Rising Capital Requirements A $100 million investment is no longer considered to be a large mining project in most cases. For a large metal mining project, the total cost of the concentrator alone can exceed $100 million. Amoco Minerals' Thompson Creek molybdenum mine being developed in Idaho will cost over $350 million, for a relatively modest sized (23-kt/d or 25,000-stpd) ore operation with no extraordinary features. For a major grass roots copper operation producing blis¬ter or refined copper, the capital requirements are billions of dollars, not millions. Project costs are higher for two reasons. One, the projects themselves are larger; and two, the capital cost per unit of production is rising rapidly. Projects are larger because lower grade ores, yielding smaller margins, must be mined in greater volume-particularly in view of the high fixed costs of modern technology. When analysts contemplate any capital project, an important consideration is the minimum economic size of the facility. This is the smallest size that can be built and still be competitive on a total unit production cost basis. In the conventional copper smelting business, for example, a production rate of at least 91 kt/a (100,000 stpy) of blister copper is about the absolute minimum for reducing unit fixed costs to competitive levels. Clearly, many variables affect the minimum economic size of a mining facility, but with few exceptions that size continues to grow. Unit capital costs of new mining projects also are continuing to rise. The accompanying table shows that the capital costs in primary copper production have risen faster than the cost of living. Of particular note is the capital charge of over $1.70/kg (77411b) required for a new, fully integrated facility in 1981. Thus, the mid-1982 copper price would not even cover the cost of capital for a new copper producing complex without considering the direct operating costs for such a facility. The breath-taking costs of new mining projects are caused by factors such as increasingly complex technology, the rising social costs of creating attractive living and working conditions for employ¬ees, and the expenditures re¬quired for environmental protec¬tion. For whatever reasons, how¬ever, unit capital costs in mining continue to exhibit staggering growth rates. Future Economic Conditions Risk is not only a function of the size of the potential loss-an im¬portant measure of which is the capital intensity of mining dis¬cussed above-but also of the like¬lihood of incurring the loss. It is here that the ever increasing lead times of mining projects and the glaring limitations of economic forecasting are so important. In comparison to nearly all other in¬vestments, mining has more capi¬tal at stake for a longer period of time before commercial uncer¬tainty is resolved by distant eco¬nomic conditions that are subject to high forecasting errors. A sobering example of the pre¬ceding points occurred with the Lakeshore copper mine in south¬ern Arizona that Hecla Mining Co. undertook to finance and manage in 1969. The project was a joint venture of Hecla and the El Paso Natural Gas Co. and included two mines-one producing oxide ore and a second in the sulfide zone¬and a complex processing facility producing both electrowon cop¬per cathodes and copper precipi¬tates. The project originally was

Jan 12, 1982

By John D. Gardner

This paper describes a process which finds the maximum worth of a mineral deposit. The procedure requires two phases. The first uses a microcomputer evaluation model to find the optimum design input, with minimum attention giving to actual mining constraints that might exist. The second phase runs the first-phase design parameters through a direct simulation model on a mainframe computer. In phase one, financial, economic, and geotechnical data are entered; and an idealized list of design parameters is output. The list includes optimum values for cutoff grade, mine life, mine size, paytons, paygrade, and payvalue. In addition, the model generates pro forma operating and cash flow statements and it indicates the maximum net present value (NPV) possible for the deposit along with the probability of that oc¬curring. The initial results imply perfect mining conditions. In phase two, when actual mining selectivity, sequence, and other practical design considerations are related in a direct simulation model to the optimum criteria found above, the maximum NPV invariably decreases. However, if it is still satisfactory (NPV greater than or equal to zero) then the maximum worth/ optimum design have probably been found in the first iteration. If, on the other hand, NPV is now unsatisfactory, then design compromises must be made and simulated, and the results rerun through the evaluation model. If several iterations fail to yield a positive NPV then the deposit is most likely unfeasible t for the forecast economic conditions used in phase one.

Jan 1, 1986

The word "mine" means different things to different people. To a professional in the mining industry, it may mean trucks and shovels, overburden dumps, headframes, mill buildings, and the other conventional nuts and bolts that constitute an operating mine. To an environmental- ist it may mean bulldozed trees and tailings dams. To a mining engineer who has spent a significant proportion of his career in mine and prospect evaluation, it can mean a hole in the ground with a liar at the top. The liar in this case is frequently not so through design but through ignorance. The purpose of this paper is to contribute in a small way to en- lightening that ignorance. In doing so, it will foster more effective deployment of the pool of risk capital available to the industry.

Jan 1, 1982

By Scott G. Giltner, Alex Schwenk

An iron operation sought to extend the life of the mine by conducting a major pit pushback in an area close to several public structures and the neighboring town. The result of the pushback would make millions of tonnes of ore available for mining allowing many additional years of taconite mining. This paper discusses the initial development blasts conducted for the pit pushback. For the development blasts, it was determined that no fly rock should leave the mine site and that the blast vibrations should be as low as possible, but specifically under 19 mm/s (0.75 in/s) at a nearby sewage treatment plant. One issue complicating the blast design was the variation in hole depth within any given blast. For the initial sinking shot, the hole depths varied from 6.4 m (21 ft) to 12.5 m (41 ft). In the subsequent blasts the hole depths within each blast could vary up to 5.8 m (19 ft). Various tools were employed to design the blasts to ensure there was no fly rock and that the blast vibrations were as low as possible. UAV surveys of the blast areas were conducted to provide a 3-D representation of the free faces and bench surface. The 3-D point cloud produced from this was used to measure the shape of the free faces. Once the shape of the free faces was quantified, it was possible to establish proper placement of the crest holes and develop a custom explosive load for each blast hole. In addition, signature hole analysis was performed for each blast to determine the optimum delay time that balanced the need for minimal vibration, prevent fly rock, and a well fragmented muck pile. Electronic detonators were applied to achieve the necessary control of the blast that balances these three concerns. The results of the seven blasts conducted to date provided the desired results. The peak vibration level at the sewage treatment plant for the seven blasts was 10 mm/s (0.40 in/s). The only fly rock occurred when there was a miscommunication in the blast design resulting in under burdened holes on the front row. To date, the mine has been able to safely expand the pit into an area that will add many years to the mine life. The muck piles have been well fragmented with reports from the shovel that they have all dug well.

Jan 21, 2025

By Scott G. Britton

Mine exploitation is a broad subject whose focus is the technical skills or efforts needed for the extraction of mineral from a known ore body. Mine exploitation can be considered the very core of the mining engineering discipline. It begins at the conclusion of the exploration and development stages of mining and ends when the ore body is exhausted and the mine (or mines)closes and is reclaimed. Section 8 on mine exploitation is comprised of seven chapters: (1) classification of mining methods, (2) mine surveying and mapping, 3) systems engineering, (4) computer methods, (5) labor relations and training, (6) management and administration, and (7) mine closure, sealing, and abandonment. Each chapter focuses its efforts towards providing detailed and useful information for the engineer on basic mine exploitation principles. The information can be applied to a broad range of mining problems without regard to mineral type or mining method.

Jan 1, 2008

By D. F. Cater

The Macassa Mine is a mature mine with a 61 year history of continuous production. The majority of past production has been derived from a zone called the '04 Break (Main Break). Recent underground mine exploration has been successful in locating several neighbouring ninera1ized zones. This paper will characterize the spatial location, geometry and mineralogical properties of these secondary zones. Future plans for underground mine exploration to follow-up on these target zones will be outlined.

Jan 1, 1995

By John T. Ryan

DEFINITE improvement in its accident fatality rate in the coal-mining industry was recorded during 1941, based on preliminary figures for the period from January through October. Total production during this ten-month period was approximately 91 percent of the total production in all of 1940. The ten-month accident rate for both bituminous and anthracite mining in 1941 was 2.15 killed per million tons of coal mined, compared with a rate of 2.66 for the full year of 1940. The bituminous rate decreased from 2.55 in 1940 to 1.99 in ten months of 1941, and the anthracite rate from 3.62 to 3.53 in similar periods. The decrease is more apparent for the bituminous branch of the industry, as the high figure in 1940 was due to seven major disasters which brought death to 276 men. The same number of major explosions during ten months of 1941 caused only 64 lives to be lost. The severity of the explosions has been lower this year but a definite need still exists for reduction in this type of accident.

Jan 1, 1942

By G. Huang, S. Vytla

Computational fluid dynamics (CFD) is a continually developing numerical technique by which complex fluid flow problems can be solved on computers. To be able to transfer CFD expertise to analyze and design a face-ventilation system, a comprehensive validation study of current CFD tools against mining-related benchmark experiments is required. In the last four years, such studies, funded by National In¬stitute for Occupational Safety and Health (NIOSH) under Grant #R01 CCR415822, were conducted in the Department of Mining Engineering at the University of Kentucky. A wide array of ventilation schemes and mining configurations were considered. Recently, an additional study was performed in cooperation with the NIOSH Pittsburgh Research Laboratory. This study was dedicated to the methane behavior in the empty (containing no equipment) face area with a blowing curtain and a 10. 7-m (35-ft) setback. In this paper, the authors present and discuss the computer-simulation data and compare them with data collected during the laboratory studies at the NIOSH lab.

By E G. Thomas

"This paper details the many improvements possible in narrow vein mining from the use of treated mining/milling waste as mine fill. Such fill can be: treated mill tailing, cemented or uncemented; development muck, treated or untreated, cemented or uncemented; andsome combination of these materials, or surface sands/gravels. Treatments involved may be both physical (optimisation of particle size gradings) and chemical (neutralision of potentially harmful milling chemicals).Potential benefits include a reduction in: back stress; vein closure; alternate ground support requirements; mining dilution; potential for surface subsidence; and extent of surface disposal of mining/milling waste, resulting in reduced environmental impact. Considering the usually small production tonnages involved, preparation and placement of a highly applicable fill material can be economically accommodated.Emphasis is placed on steeply dipping orebodies being mined overhand, although practice in the much less steeply dipping RSA gold/platinum-type orebody is also considered.CITATION:Thomas, E G, 2012. Mine fill in thin vein mining, in Proceedings Narrow Vein Mining 2012 , pp 215-218 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 26, 2012

After a short presentation of the Division of Mining at the Royal Insti- tute of Technology, Stockholm, Sweden, the author presents some of-the fill research carried out at the Division. Literature surveys and testing methods and equipment are described. The use of flocculants' in hydraulic filling has been tested both in laboratory and in mines and the results are very promi- sing. Finally compressibility investi- gations and some finite element calcu- lations are presented.

Jan 1, 1973

By Samuel Dolbear

PUBLIC discussions of mine finance in the tech-nical press have been confined mainly to methods of providing funds for the development of pros-pects or other mining operations which have not reached the stage of productivity. The application of modern financing methods to mines which have behind them a successful record of net earnings has, for some reason, been given scant consideration by mine owners and managers. In a few conspicuous cases, such for example as the Anaconda Copper Mining Co., Chile Copper Co., and one or two others, industrial finance has been applied to mining operations on the scale and after the fashion of other operations. When extensions are needed re-course is usually had, however, to the sale of common stock, with the obvious disadvantage of diluting the holdings of every stockholder of record prior to such financing. In some cases, it has been sought to over-come this disadvantage by issuing stock purchase rights to shareholders of record. If the stockholder is in a position to acquire additional stock, he may then pre-serve his interest intact, otherwise he must suffer a dilution of his holding. If he purchases additional stock he is, from one point of view, paying more for his in-terest than he bargained for when he made his original purchase. In many cases development and equipment are paid for out of surplus or current earnings. It is sometimes most difficult to explain to a manager why he can afford to borrow money when funds are available from a sur-plus account. Nevertheless, industrial enterprises with adequate surplus accounts often finance new construc-tion by the issuance of bonds. Such a procedure enables the company to maintain its surplus intact, and to con-tinue the payment of dividends during a temporary period of unusual expenditures.

Jan 2, 1927

By R. R. Rollins

Conventional methods of controlling abandoned mine fires include: loading out, inundation, fire barriers, flushing, and surface sealing. This paper describes a proposed fire-control technique utilizing a new explosive fragmentation method. An impervious barrier is created by using explosive energy and strategic emplacement in boreholes drilled from the surface. Blast round design, average fragment size, and impermeability of the fragmentation barrier are discussed. This barrier, created by the blasted floor rock, could also be used to fill in the open space in abandoned mines for subsidence prevention or control.

Jan 1, 1989

By C. P. Lazzara, R. A. Franks, G. F. Friel, J. C. Edwards, J. J. Opferman

A series of four coal combustion experiments was conducted at the National Institute for Occupational Safety and Health's (NIOSH) Pittsburgh Research Laboratory (PRL) in the Safety Research Coal Mine (SRCM) to evaluate the response of fire sensors to a small 0.61 m square smoldering coal fire which transitions to flaming combustion in the presence of diesel emissions. An optical path smoke sensor alarmed earlier than a point type diffusion mode ionization smoke sensor which alarmed prior to a CO alert value of 5 PPM above ambient. The presence of steady state diesel emissions resulted in a decrease in the optical smoke sensor analog output voltage signal by less than 1.4 pct for the three coal fire experiments in which a diesel engine was operating, whereas the ionization smoke sensor output decreased between 10.8 and 26.7 pct after the initial surge of the diesel engine. A commercial diesel discriminating fire sensor did not alarm for a fire in the one experiment for which it was used. The results of the experiments demonstrated that an optical path smoke sensor might be used to detect a coal fire under the experimental conditions considered of starting a diesel engine followed by a slowly developing coal fire.

By J. C. Edwards

A series of four coal combustion experiments (I)' was conducted at the National Institute for Occupational Safety and Health, Pittsburgh Research Laboratory in the Safety Research Coal Mine to evaluate the response of optical and ionization smoke and CO sensors to a small 0.61 m square smoldering coal fire which transitions to flaming combustion in the presence of diesel emissions. With the increased utilization of diesel engines in underground coal mines, it is important to be able to discriminate fire products-of-combustion (POC) from diesel emissions. One proposed method to accomplish this is the deployment and interpretation of multiple sensors.

Jan 1, 2010

By John C. Edwards, Gene F. Friel, John J. Opferman, Robert A. Franks

A series of diesel fuel fire experiments were conducted in the Pittsburgh Research Center's Safety Research Coal Mine (SRCM) to determine products-of-combustion (POC) spread rates along a single entry under zero imposed airflow conditions. Six experiments with an average fire intensity of 330 kW and three experiments with an average fire intensity of 30 kW were conducted in a 1 80 m long entry which had an average 2 m height and 4 m width. POC spread rates were measured by the response time of diffusion type CO detectors, positioned at 30 m intervals, to CO concentrations 5 ppm above ambient. For the 330 kW fires, average POC spread rates of 0.22, 0.13, and 0.06 m/s were determined at 30.60, and 90 m distances from the fire. For the 30 kW fires these average spread rates were reduced to 0.08, 0.04, and 0.04 m/s. The measured maximum roof layer temperature 30 m from two of the 330 kW fire was 30 and 36"C, which is less than the 57°C alarm point of a typical mine thermal sensor. It was determined that smoke detectors can be more effective for mine fire detection than CO detectors. The experimentally determined POC spread rates can be used to provide guidance for specification of sensor spacing to improve early fire detection at zero or very low air flows.

By John C. Edwards, F. Friel, John J. Opferman, Robert A. Franks

A series of diesel fuel fire experiments were conducted in the Pittsburgh Research Center's Safety Research Coal Mine (SRCM) to determine products-of combustion (POC) spread rates along a single entry under zero imposed airflow conditions. Six experiments with an average fire intensity of 330 kW and three experiments with an average fire intensity of 30 kW were con- ducted in a 180 m long entry which had an average 2 m height and 4 m width. POC spread rates were measured by the response time of diffusion type CO detectors, positioned at 30 m intervals, to CO concentrations 5 ppm above ambient. For the 330 kW fires, average POC spread rates of 0.22, 0.1 3, and 0.06 m/s were determined at 30, 60, and 90 m distances from the fire. For the 30 kW fires these average spread rates were reduced to 0.08, 0.04, and 0.04 m/s. The measured maximum roof layer temperature 30 m from two of the 330 kW fire was 30 and 36"C, which is less than the 57°C alarm point of a typical mine thermal sensor. It was determined that smoke detectors can be more effective for mine fire detection than CO detectors. The experimentally determined POC spread rates can be used to provide guidance for specification of sensor spacing to improve early fire detection at zero or very low air flows.

Jan 1, 1997

By Hang Yang, Linneas W. Laage

A major concern of mine fires is the heat generated ventilation disturbances which can move products of combustion (POC) through unexpected passageways. Fire emergency planning requires simulation of the interaction of the fire and ventilation system to predict the state of the ventilation system and the subsequent distribution of temperatures and POC. Several computer models were developed by the U.S. Bureau of Mines (USBM) to perform this simulation. The most recent, MFIRE, simulates a mine's ventilation system and its response to altered ventilation parameters such as the development of new mine workings or changes in ventilation control structures, external influence such as varying outside temperatures, and internal influences such as fires. Extensive output allows quantitative analysis of the effects of the proposed alteration to the ventilation system. This paper describes recent USBM research to validate MFIRE's calculation of temperature distribution in an airway due to a mine fire, as temperatures are the most significant source of ventilation disturbances. Fire tests were conducted at the Waldo Mine near Magdalena, NM. From these experiments, temperature profiles were developed as functions of time and distance from the fire and compared with simulations from MFIRE.

Jan 1, 1995