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By Zichenko ZA, Volkov SV, Shaluhina LM, Emelyanov AF

A method of selective gold recovery from black sands has been elaborated which is based on the liquid phase low temperature chlorination of materials. A liquid agent mixture of sulphur monochloride S2C12 and sulphur dichloride SC12 is used. This method ensures the gold extraction either in the state of AuC13.SC14 complex salt solution or as metal. The kinetics and main physico-chemical parameters of the process (eg density, solid: liquid ratio, temperature) have been investigated. The materials investigated were quartz-insipid ride samples with low sulphur and high iron (up to 70 per cent Fe2O3) contents. Gold recovery is 96 - 99 per cent at temperatures not exceeding 100¦C. Most of the associated minerals remain in the cake. To obtain metallic gold, the resulting solution of the AuC13.SC14 salt after leaching is reduced by hydrazine with subsequent annealing. The elaborated method is remarkable for small energy expenditures owing to low process temperature and a high gold dissolution rate. The solution of sulphur chlorides and other reagents are used in closed cycle.

Jan 1, 1993

By R Castroviejo, E Pirard, L PTrez-Barnuevo

Process mineralogy provides the mineralogical information required by geometallurgists to address the inherent variation of geological data. The successful beneficiation of ores mostly depends on the ability of mineral processing to be efficiently adapted to the ore characteristics, liberation being one of the most relevant mineralogical parameters. The liberation characteristics of ores are intimately related to mineral texture. Therefore, the characterisation of liberation necessarily requires the identification and quantification of those textural features with a major bearing on mineral liberation. From this point of view, grain size, bonding between mineral grains and intergrowth types are considered the most influential textural attributes. While the quantification of grain size is a usual output of automated current technologies, information about grain boundaries and intergrowth types is usually descriptive and difficult to quantify to be included in the geometallurgical model.Aiming at the systematic and quantitative analysis of the intergrowth type within mineral particles, a new methodology based on digital image analysis has been developed. In this work, the ability of this methodology to achieve a more complete characterisation of liberation is explored by the analysis of chalcopyrite in the rougher concentrate of the Kansanshi copper-gold mine (Zambia). Results obtained show that the method provides valuable textural information to achieve a better understanding of mineral behaviour during concentration processes. The potential of this method is enhanced by the fact that it provides data unavailable using current technologies. This opens up new perspectives to the quantitative analysis of mineral processing performance based on textural attributes.CITATION:PTrez-Barnuevo, L, Castroviejo, R and Pirard, E, 2013. New perspectives on quantitative textural analysis, in Proceedings The Second AusIMM International Geometallurgy Conference (GeoMet) 2013 , pp 191-198 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 29, 2013

By Stevak D, Plesingerova B, Ellias K, Tkacova K

This paper presents information on the processing of minerals by decrepitation that can be an integral part of their mineral dressing. In the case of carbonates, processing by decrepitation is a special operation that has its objective as concentration of the oxide. Selective fragmentation of magnesite brought about by decrepitation uses pseudomorphosis which was observed at thermal decomposition of carbonates. By decrepitation of magnesite high-grade MgO concentrates were obtained with MgO contents above 80 per cent. With the sideritic ores a very important phenomenon was observed consisting in the removal of quartz in the fragmented fine-grained product which favourably affect pelletisation of the fines. The selective concentration of the MgO product brought about by thermal decomposition of dolomite accompanied with decrepitation was negligible.

Jan 1, 1993

By van der Walt TJ, van Deventer JSJ, Reuter MA

Owing to their complexity, many metallurgical processes are difficult to model fundamentally, and as a result more attention has been focused on the use of artificial intelligence techniques to simulate these processes. In this paper recent advances in the use of neural nets to model processes not amenable to conventional methods are discussed. These include the application of a new modelling methodology based on the use of neural nets for the dynamic simulation of metallurgical processes, the use of conventional techniques in conjunction with neural nets to simulate gravity separation circuits, as well as the detection of gross errors in variable measurements by means of a neural net representation of the relation between measurement and constraint residuals.

Jan 1, 1993

Ore textures in Australian BIF-derived ores are quite complex and have formed the basis for ore genesis models, which includes hypogene upgrading or supergene upgrading then regional metamorphism for the microplaty hematite ores and supergene upgrading for the martite-goethite ores. Despite a high level of ore texture knowledge, little is known about the spatial distribution of ore textures within deposits or their relationship to downstream processing. This paper describes a new iron ore texture classification system to better understand the vertical textural zonation characteristics of Australian BIF-derived deposits, the interpreted role of recent supergene upgrading processes on modifying primary ore textures and their implications for downstream mineral processing. The iron ore textural classification scheme presented uses textural groupings defined on the basis of similarities in mineralogy, ore texture, porosity, mineral associations and hardness. The scheme is non-genetic and has been successfully applied to deposits in the Pilbara, Yilgarn and Gawler cratons. The main ore texture groups include dense martite/hematite, microplaty hematite, microplaty hematite-goethite, martite-goethite, goethite-martite and goethite-rich. Each group can be further subdivided into physically hard to softer subcategories. The ore textural groups can be divided into those interpreted to be associated with primary replacement of BIF and secondary textures resulting from more recent modification by near-surface hydration or dehydration processes. A schematic vertical section through BIF-derived deposits consists (from surface) of detritals underlain by a carapace, both of which may have been eroded, followed by a hydrated zone with replacement of primary ore martite and microplaty hematite by vitreous goethite. The hydrated zone is underlain by 0.2 - 6 m thick zones of intense dehydration and textural infilling of porosity with hematite and hydrohematite. Immediately below the dehydration zone is a strong zone of leaching, where more porous and friable ore textures occur, followed underneath by a gradational contact with primary ore. Secondary supergene processes can impact on beneficiation with hydration and leaching resulting in more difficult density separations at the concentrator stage due to reductions in density differences between ore and gangue and loss of heavy media into pores. Supergene modification of primary BIF-derived ore textures can substantially change lump metallurgical properties, with hydration and dehydration favourably increasing lump yield but reducing resistance to thermal shock whilst leaching will give the opposing outcome. The lump properties of ore textural groups appear to be relatively consistent within and between the iron ore deposits examined.

Jan 1, 2002

By J J. Cilliers, K Hadler

Air is fundamental to flotation; not only is it required to collect the valuable particles, but it also controls the froth stability and consequently the separation performance for a given feed. Froth stability can be described and quantified in numerous ways, which are subtly different. Air recovery is one such measure of froth stability which accounts for both the stability of the bubbles and the mobility of the froth. The benefit of using air recovery as a measure of froth stability is that it exhibits a peak as air flow rate is increased, and this corresponds to the air rate at which the optimal separation performance is obtained. As such, it provides a single target value for optimising air flowrate for a given set of feed conditions. Use of air recovery, however, has one potential drawback: accurate measurement of the inlet air flow rate to a flotation cell is required. This can be problematic for operations, particularly where calibration of air flow rate is carried out infrequently or where there is no air flow rate measurement, such as for many self-aerated flotation cells. To this end, we present an alternative method for determining the peak in air recovery (PAR) air rate.We introduce a simplified method for determining the PAR air rate using trends in froth velocity and overflowing froth height, both of which are readily measured using existing froth image analysis systems. We will show, using industrial data, the application of this simple technique to find the optimal air flowrate for flotation cells. We will also discuss other alternative techniques for air rate optimisation that have the potential to improve separation performance using existing technology.CITATION:Hadler, K and Cilliers, J J, 2018. How to find the optimum air rate for flotation cells, in Proceedings 14th AusIMM Mill Operators' Conference 2018, pp 377–384 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 29, 2018

By A McGann, P J. Coghill, D Miljak

"It is widely accepted that bulk ore sorting could provide a step change in processing of low-grade ores. For this to be achieved a rapid, accurate bulk sensor of grade is required as well as sufficient natural variation of grade in the ore stream. CSIRO trialled a magnetic resonance (MR) sensor capable of measuring chalcopyrite, and by inference total copper grade, on the 1300 t/h Ridgeway portal conveyor. The gauge produced an unprecedented set of data down to a 1 t scale for months at a time. This paper analyses the measured variation and compares it to a simple model derived from the bore core data and mixing within the block cave mine.The model of the small-scale (<1000 t) variation is developed using fractal methods which have successfully been used in the past for copper porphyry deposits showing a power law or near power law distribution of copper grade and vein sizes. These fractal distributions have two features highly favourable for segregating ore, a large proportion of low-grade pods and the large-scale spatial clustering of grade. We show the presence of fractal ordering in bore core data at short range in the Cadia Ridgeway porphyry deposit and measure its persistence in the crushed rock produced by the Ridgeway block cave mine over one month. The model is then extended to demonstrate the effect of varying head grade, mixing and pod (or diversion) weight on bulk sorting efficiency.CITATION:Coghill, P J, Miljak, D, McGann, A, 2016. Modelling Grade Variation in Crushed Ore at Cadia Ridgeway and Its Potential Consequences for Bulk Ore Sorting, in Proceedings The Third AusIMM International Geometallurgy Conference (GeoMet) 2016, pp 77–88 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Jun 15, 2016

By R R. Lovel

In this paper, life cycle assessment methodology has been used to assess the variations in water use associated with different metal production and processing routes and provide insights into the value derived from water usage in the minerals sector. Using water consumption data derived from the literature it has been shown that the æcradle-to-gateÆ water consumption (or embodied water) for production of the various metals considered in the study ranged from 2.9 m3/t for steel up to 252 087 m3/t for gold. The results largely reflect the grade of the initial ore used to produce each metal, and can be approximated by the following equation:W = 167.7 G - 0.9039 where: W = embodied water (m3/t refined metal) G = grade of ore used to produce metal (per cent metal) The study showed that indirect water consumption in the metal production life cycle, in particular that due to electricity generation, can make a significant contribution to the embodied water value, eg aluminium production. When expressed in terms of m3/t ore, the results for all metals considered indicated that the embodied water is roughly, on average, three times the water consumption of the mining and concentration stage. It was also shown that the economic value per m3 of water consumed for the minerals industry exceeds that for the agricultural and industrial sectors, supporting the view that allocating water resources to the minerals industry has a strong underlying economic basis. Water reforms currently taking place in Australia aim to address issues such as competition for water access, reduced security of supply and increase in cost. Consequently the minerals industry, along with others, can be expected to come under increasing pressure to reduce fresh or raw water use and to integrate water use across sectors. While water recycling is an obvious candidate to help reduce water consumption in the minerals industry, issues such as water quality, among others, will influence the extent to which this can be achieved. In addition, wastewater volumes can be minimised using techniques such as pinch analysis to establish and use the minimum water requirement for the process. The use of dry or near-dry processing technologies, for which the demand for water is small or zero, may be a more radical solution to the water consumption problem; however, it is possible that the introduction of dry processing would bring with it a new set of problems, including dust.

Jan 1, 2006

By B Mohanty, D Zwaan

Systematic near-field vibration monitoring of stope blasts was carried out in a large, deep underground mine. A total of 31 production blasts were studied in order to investigate the effectiveness of existing blast designs. This involved the vertical retreat mining method, which requires drilling a raise bore or blasting a slot raise (typically 1.22 m in diameter) using large diameter boreholes (165 mm). The diagnostic technique employed multistation near-field monitoring of blasts with high-g (100 g) and high-frequency (>10 kHz) triaxial accelerometers. The amplitude of the vibrations is correlated with the strain energy transmitted from each explosive deck. The results showed that more than 30 per cent of the explosive decks contributed little energy to the rock breakage process in these blasts, and an equal number contributed only inadequately. These findings are indicative of serious blast malfunctions. The problems can be traced to inadequate deck blast design and possibly to drill hole deviation. The various causes for such malfunctions are discussed and remedial measures suggested.CITATION:Mohanty, B and Zwaan, D, 2015. Assessment of underground production blast designs and blasting performance, in Proceedings 11th International Symposium on Rock Fragmentation by Blasting, pp 607–616 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 24, 2015

By A V. Ozsever

The selectivity in flotation columns involving the separation of particles of varying degrees of floatability is based on differential flotation rates in the collection zone, reflux action between the froth and collection zones, and differential detachment rates in the froth zone. Using well known theoretical models describing the separation process and experimental data, froth zone and overall flotation recovery values were quantified for particles in an anthracite coal that have a wide range of floatability potential. For highly floatable particles, froth recovery had a very minimal impact on overall recovery while the recovery of weakly floatable material was decreased substantially by reductions in froth recovery values. In addition, under carrying-capacity limiting conditions, selectivity was enhanced by the preferential detachment of the weakly floatable material. Based on this concept, highly floatable material was added directly into the froth zone when treating the anthracite coal. The enriched froth phase reduced the product ash content of the anthracite product by five absolute percentage points while maintaining a constant recovery value.

Jan 1, 2005

By A Woodley, N C. Kunz

A mine site water balance is important for communicating information to interested stakeholders, for reporting on water performance and for anticipating and mitigating water-related risks through water use/demand forecasting. Gaining accuracy over the water balance is therefore crucial for sites to achieve best practice water management and to maintain their social license to operate. For sites that are located in high rainfall environments the water received to storage dams through run-off can represent a large proportion of the overall inputs to site; inaccuracies in these flows can therefore lead to inaccuracies in the overall site water balance.Hydrological models that estimate run-off flows are often incorporated into simulation models used for water use/demand forecasting. The Australian Water Balance Model (AWBM) is one example that has been widely applied in the Australian context. However, the calibration of AWBM in a mining context can be challenging. Through a detailed case study, we outline an approach that was used to calibrate and validate AWBM at a mine site. Commencing with a data set of monitored dam levels, a mass balance approach was used to generate an observed run-off sequence. By incorporating a portion of this observed data set into the calibration routine, we achieved a closer fit between the observed versus simulated data set compared with the base case. We conclude by highlighting opportunities for future research to improve the calibration fit through improving the quality of the input data set. This will ultimately lead to better models for run-off prediction and thereby improve the accuracy of mine site water balances.CITATION:Kunz, N C and Woodley, A, 2013. Improving the accuracy of mine site water balances through improved estimation of run-off volumes, in Proceedings Water in Mining 2013 , pp 267-272 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 26, 2013

By J Rayo

Andean countries (Chile, Peru, Bolivia and Argentina) have 42 semi-autogenous mills (SAG) in operation and there are more than 30 projects in the pipeline that consider SAG mills. At the end of the next decade, the total amount of SAG mills in this area will likely be close to 100.There is a lot of reliable operational information collected by JRI Ingenieria Sociedad Anonima, the author’s engineering company, for more than 20 years and processed by statistical software, to be used as a reference for design basis of future projects or to improve operations by comparison. JRI Ingenieria Sociedad Anonima has reliable information related to the performance of more than 50 per cent of the Andean SAG plants.The paper presented considers a set of graphs that summarise the collected and verified SAG plants technical data. The figures will show key parameters as circuits and equipment data, energy consumption, technical availability, utilisation rates, throughput variability, pebble productions, steel consumption and others.The data is compared with typical design basis of several engineering companies and the main differences are analysed and/or commented on.CITATION:Rayo, J, 2014. Comparison of semi-autogenous mills operations in Andean countries, in Proceedings 12th AusIMM Mill Operators’ Conference 2014 , pp 283–296 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 1, 2014

By G J. A Dewar

The Australian Corporations Law generally requires Independent Expert Reports to be presented in support of capital raising or in defence of mergers and takeovers. The introduction of the VALMIN Code in 1995 (and its recent revision issued as the VALMIN Code, 1998) made Assessment and Valuation Reports in these circumstances much more comprehensible than before because of its key requirements for transparency and materiality. By forcing the Independent Valuer to provide an explanation of the reasoning behind the estimation of a particular resource asset, VALMIN allows the reader to clearly see any error or illogicality in the valuation methodology used and to seriously question or even reject the resulting value. Even though many elements of resource asset valuation practice are undeniably subjective, there must be some basis of objective rationality to it. Independent resource asset Valuers are the essential link between mineral explorers/miners on the one hand and brokers/analysts/fund managers/investors on the other. The minerals and financial industries both expect them to not use inappropriate or invalid valuation methods and illogical steps within these methods. This paper examines some of the less sensible ways in which some of the main techniques that Valuers commonly use to assess the fair market value of mineral properties have been applied in recent instances. The authors hope to discourage the adoption or perpetration of the æWhat-number-did-you-have-in-mind?' approach. It is MINVALÆs view that as many methods as possible should be used in any resource asset valuation. If any of the resulting estimates are in approximate agreement (particularly if they were derived using the less subjective of the available methods), ie if they cluster, they are probably more persuasive as being the Preferred Value of the asset than outlier values within the Valuation Range.

Jan 1, 1999

By B A. Webler, P Su, P C. Pistorius

Advanced high-strength steels (AHSS) typically have much higher aluminium concentrations (by an order of magnitude or more) than conventional low-carbon aluminium-killed steels. The resulting lower oxygen activity at the steel-slag interface changes the kinetics and thermodynamics of steelslag reactions. Previous work showed that the rapid transformation of alumina inclusions to spinel inclusions, and spinel to periclase, occurs because of the relatively high concentration of dissolved magnesium. In this paper, experimental results on nitrogen removal by ladle slag are compared with predictions based on the available thermodynamic databases. As in previous work, the kinetics was modelled by assuming mass transfer control, with steel or slag mass transfer limiting. The results show that significant removal of nitrogen by steel-slag reaction is possible.

Aug 21, 2024

By N Bezuidenhout

The performances of ten field-scale experimental final covers were evaluated over an eight-year period. The covers were evaluated as part of the rehabilitation of acid generating coarse coal reject dumps and opencast coalmines in the Northern KwaZulu Natal province in South Africa. The main purpose of the experimental covers was to restrict rainfall infiltration into acid generating coal discard. The mean average rainfall over the monitoring period was 839 mm with 84 per cent occurring between October and April. The average evaporation was 2100 mm. The site is described as a ædry siteÆ since the evaporation exceeds rainfall by a significant margin. Approximately 30 per cent of rainfall infiltrated the uncovered cells. Rainfall infiltration into the fine coal discard was reduced to 20 per cent and 15 per cent for a 300 mm and 500 mm cover respectively. Infiltration was reduced to ten and 12 per cent of rainfall for fine coal discard provided with a 1000 mm double soil cover and a compacted bottom layer. This relatively high infiltration was probably caused by moisture being entrapped in the bottom retentive layer, and not being released by evapotranspiration. The best performing cover comprised 1000 mm single soil with a compacted bottom layer and infiltration was reduced to four per cent of rainfall. Rainfall infiltration into sloped cells varied between seven per cent and 14 per cent of rainfall. The computer software, SoilCover, was used to predict infiltration and moisture content in the cover. Predictions of rainfall infiltration were accurate, but were less accurate for covers where the hydraulic properties of field compacted soils were not adequately characterised. Oxygen ingress was significantly reduced for cells provided with a 1000 mm cover. Oxygen concentrations were generally below one per cent, with the exception during exceptionally dry periods when the cover dried out, resulting in increased oxygen ingress. For other covers, and the uncovered cells, oxygen concentrations were close to atmospheric concentrations. During the eight-year monitoring period, acid breakthrough occurred in five of the cells, including three uncovered cells, one cell with a 300 mm cover and one sloped cell. In contrast, cells covered with 1000 mm, bottom compacted soils shows a marked improvement of leachate quality, indicating that sulfide oxidation processes have been slowed. There was a distinct relationship between oxygen ingress and leachate quality for all of the cells. No cover degradation was evident over the eight-year period, except for some erosion observed on a sloped cell. The results indicate that the onset of acid drainage can be delayed by perhaps hundreds of years and salinity loads can be reduced by more than 90 per cent, if coarse coal reject dumps in the KwaZulu-Natal provinces in South Africa are provided by an adequate cover system. These research outcomes can be extrapolated and applied to other dry site regions where similar materials are being considered.

Jan 1, 2003

Rather like the mythical "Economic Man" "an employer" in this context must necessarily be an abstraction, and the views possessed by such an abstraction, a composite of many views known to have been expressed. Not even the complex Conciliation and Arbitration legislation in this country provides any helpful specifications, except in one peculiar particular. The Australian Conciliation and Arbitration Act provides an almost totally tautological definition, except in that one oddity referred to above. It is this : "An employer means any employer in any industry, and includes any person who is usually an employer in an industry, and also includes a Club." No doubt there is some perfectly justifiable reason for such specific and unique particularity in an otherwise meaning- less definition. That need not trouble us in this exercise.

Jan 1, 1982

This paper presents a review of computer techniques for the automatic contouring of geological and geophysical data with output as interactive display on graph plotters or graphics terminals and passive display on automatic drafting tables. The advantages of the method of fitting a triangulated surface to randomly distributed data using an advancing front algorithm are described, as well as the technique for determining interpolated values for the production of contour line segments and a contour smoothing algorithm. This contouring method is employed by the Geological Survey of Queensland and is implemented as an interactive system. An alternative method ideally suited to randomly distributed data involves the use of piecewise parametric cubic splines. This method which is ideal for sharp variations in magnitude and areal extent typical of geophysical anomalies is discussed. The mathematics of surface interpolation using non-parametric splines and an explicit piecewise surface fitting technique are discussed. Curve tracing techniques which are suitable for automatic contouring are also presented and the inherent advantages of interactive contouring using on-line plotters and graphics terminals for previewing of displays are described.

Jan 1, 1977

By C J. R Hart, J K. Mortensen

The distribution of mineral deposits within northwestern North America (Alaska, Yukon, and northern British Columbia) allows for an in-depth examination of the metallogenic patterns of a growing continental margin. A more complete understanding of the tectonic evolution of this part of the Pacific Rim, achieved over the last 15 to 20 years, now allows for the placement of ore systems into a well-defined plate tectonic framework. Ore deposits older than about 185 Ma represent hydrothermal systems that were active in the platform/shelf environment of ancestral North AmericaÆs miogeocline or hydrothermal systems developed in oceanic arcs and continental fragments more distal to the craton. These include important SEDEX, VMS, and pre-accretionary porphyry deposits. In contrast, most mineral deposits younger than about 185 Ma were formed within the growing Cordilleran orogen, as terranes were accreted to the continental margin during interactions between the North America and Pacific/Farallon/Kula plates. Such syn- to post-accretionary mineralised systems include many large lode gold and porphyry/skarn systems.

Jan 1, 1999

By A R. Sale

This paper highlights two aspects of the mineral sands industry in Australia: the development of the industry from approximately 1870 through to 1980, and the author’s experience in the industry from 1966 to date.The first real heavy mineral (HM) mining in Australia started in 1870 with the mining of heavy mineral slicks on the beaches along the east coast of Australia. The real potential of Australian heavy minerals was however only realised in the 1920s with the first production of a heavy mineral concentrate that was shipped to Canada for processing. Post WW 11 and the Korean War, Australia was the largest producer of mineral sands products in the world as well as a significant developer of associated separation equipment and technology. The number of producing companies in the east coast peaked at 33 in 1957, was reduced to ten by 1965, and subsequently further reduced to five in 1980 as a result of potential mining areas being declared National Parks or Conservation Reserves. Today there is one company, Unimin Australia Pty Ltd (formally Consolidated Rutile Ltd) operating on the east coast. In contrast there were three companies on the west coast in 1965, four companies in 1980, and four companies today (albeit not the same companies).There have been considerable ups and downs for the industry in Australia, however world wide it was renowned in the past as being an industry that attracted numerous interesting and innovative characters that played a major role in developing it into the vibrant industry that it is today. This, given the current climate, is predicted to continue into the future.The author has been continuously involved in the industry for over 45 years from 1966, initially as an electrician at Consolidated Rutile Ltd culminating in the role of General Manager/President of Iluka Resources Limited USA, prior to his retirement in 2009. His exposure has been world wide and has covered all aspects of the industry but in the main focused on project development and operational areas. During this time there have been significant technological advances, yet to some extent the basic principles have not changed at all. Some of the most noteworthy advances include the development of the Wright Spiral in 1977, the development of the Reading High Intensity Wet Magnet (WHIMS), the rare earth magnets, the CRL floating thickener and the improvement of analytical techniques. From a safety, health and environmental perspective there has been significant advances that the industry has much to be proud of. These include wetland restoration both in Australia and in the US, the restoration of farmland in Virginia and Capel, and the re-establishment of native species, for example at Eneabba and Richards Bay to name but a few.

Oct 5, 2011

By Dodd SF

Valuation of mining companies and their underlying assets prepared by brokers' analysts are, by necessity, approximations. The reliability of the valuations is entirely proportional to the quality of available data, the reliability of forecasts and the nature of underlying commodity price assumptions. The latter is perhaps the greatest single cause of gross variations in company and asset earnings estimates and- valuations. Assumptions are often necessary regarding commodity price achievement based on commodity hedge positions. Public disclosure from listed companies provides a sound base from which to project earnings, cashflows and balance sheets. The uncommon disclosure of projected production and cost schedules often reduces the reliability of future estimates. The application of reserve and resource estimates is contentious with practitioners applying differing weightings to importance of resources in estimating mine lives (and therefore cashflow streams). Valuation methods applied in equity markets usually focus on relative value and the identification of pricing anomalies. The commonest ""rules of thumb"" applied in the valuation of mining companies (and therefore their underlying assets) is with the use of year specific price/earnings (P/E) and price/cashflow (P/CF) ratios, with low multiples suggesting undervalued assets, high multiples overvalued situations (but these rules can often be clouded by market expectations of underlying commodity price movements). Another simply applied valuation tool is to examine the examine the value placed on reserves and resources by the market. Inexpensive gold in the ground (expressed as $ of market capitalisation per ounce of reserves or resources) might indicate a buying opportunity, but the market does discount the value of gold in the ground prior to mine development and where development risk is perceived.

Jan 1, 1994