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By S. J. Baumgartner

The ferromanganese industry is under pressure to deal with the slag arising from the production of ferromanganese, which is discarded in landfills or slag heaps. This material poses an environmental and health risk to surrounding ecosystems and communities, and disposal costs are increasing. Ferromanganese slag contains an appreciable amount of residual manganese metal, which can be exploited. Previous work has shown that the slag can be leached fully, while rejecting the silica to a residue. The methods that were investigated to recover manganese from the leach solution included hydroxide precipitation to upgrade the leach solution followed by manganese carbonate precipitation to produce a pure manganese carbonate product or a manganese carbonate furnace feed material, which would be recycled to increase manganese recoveries in the production of ferromanganese. In addition, electrowinning of electrolytic manganese dioxide from the leach solution was studied. The methods were compared in terms of selectivity, costs, and product quality. Co-recovery of the leach residue, which is a potential cement additive, is discussed. Among the methods investigated to upgrade the pregnant leach solution, hydroxide precipitation utilizing ammonia to adjust the pH appears to be the most effective in removing major impurities such as iron, aluminium, and silica to less than 1 ppm. The manganese carbonate and impure manganese carbonate furnace feed products met quality specifications. However, although the production of these materials was technically viable, the large amounts of base reagent that were required to raise the pH, and the associated high operating costs, rendered the process uneconomic. An optimization study was therefore carried out with the primary objective to determine the ideal acid amount to be utilized in the waterstarved digestion stage, thereby decreasing acid and base consumption while optimizing the quality of the pregnant leach solution, and producing a leach residue that contained <1% Mn. The outcome was an economically viable process. Additional benefits included an increase in the manganese content of the impure manganese carbonate furnace feed material, and a substantial reduction in the dilution of the pregnant leach solution, thereby maintaining high manganese concentrations that rendered the solution viable for electrowinning of electrolytic manganese dioxide, the production of which yielded a current efficiency of 74%.

Jan 1, 2014

Written contribution by J.F. Curtist The paper is an interesting exercise in the application of mathematics to a theoretical situation presumed to oc¬cur underground. However, some of the assumptions on which the calculations are based are unlikely to occur in any actual mining situation. Assumptions made in the paper Objections to these assumptions are noted seriatim. (1) `it is assumed that any loading-rate effect will be small and can be ignored&apos; (p. 3). A loading rate of the order of 50 kN-12 per cent of the maximum load-is customary to prevent the props being dislodged by the blast. (2) `it is unlikely that all the props will be installed with their full stroke available, but for the purpose of this analysis, it is assumed that this is the case&apos; (p. 3). A more reasonable assumption would be that, with the most careful selection of prop length and the most rigid control of stope width, the available stroke length would on average be reduced by the order of 70 mm on installation-20 per cent of full stroke. (3) `each support unit supports a block of 3,3 m2 bound¬ed by vertical fractures with zero cohesion that are parallel and at right-angles to the stope face respec¬tively&apos; (p. 5). Joughin and Jager have shown this to be an unwar¬ranted assumption in respect of the positioning, the direction, and the dip of the fractures present in a stope in rockburst conditions. If, as assumed, there was `zero cohesion&apos; between such blocks, the removal of a hydraulic prop in row 3 supporting such a block would ensure that it fell out before a profile prop could be installed in the same position. (4) `the height of each of these blocks is 3,0 m, the volume of each block is 9,9M3, the mass of each block is 27 225 kg&apos; (p. 5). The concept of individual props being affected by dis¬crete blocks of known and uniform dimensions of relatively low ground velocities (less than or equal to 2,16 m/s) acting in line with the axis of the prop is one that lends itself to neat mathematical calcula¬tions. It does not, however, bear much similarity to the actual conditions that are exposed underground in excavations where rockbursts occur. Ortlepp and co-workers concluded that `the impulse of the shockwave can cause the displacement of the

Jan 1, 1991

By S. Dey, C. Bhar, S. K. Mandal

Loading and hauling of ore and waste are the key operations of an opencast coal mine and entail a high operational cost. The productivity of a mine can be increased by reducing the cycle time of loading equipment as well as utilizing dumpers optimally. In this paper we discuss the impact of rock type, bucket fill factor, rock fragmentation, the height of the cut, and angle of swing of the bucket on shovel performance. A time study is conducted on shovels in an opencast coal mine with experimental blasts of rocks to assess the impact of different factors on the performance of the shovel. Based on the data, the authors applied multiple regression (MR) and artificial neural network (ANN) techniques to develop different models for the prediction of the shovel cycle time. Developed models are validated by comparing the predicted data with actual field data. With the help of the best model, the plausible fleet size is determined in order to utilize the shovel and dumper optimally and to improve the performance of shovel–dumper operation.

Oct 1, 2022

By K. Duffy, W. Valery, L. Pyle, P. Holtham

A conceptual scoping study was conducted to investigate pre-concentration options for upgrading ore from an Ag-Pb-Zn deposit. The low grade of the ore would result in only modest economic returns, given current market conditions. Several pre-concentration options were considered. These included: selective mining, crushing and pre-screening (following either standard or high intensity selective blasting), bulk ore sorting, particle sorting, jigging, dense medium separation, or combinations of these approaches. Flowsheets were developed for each option, and the upgrade performance was modelled using Limn to determine mass balances and stream tables. Due to the limited availability of test work data, the models were based not only on what test data was available but also on case study data found in the literature. The Bazin technique was used to derive assay by size data for different streams following crushing. Equipment lists and preliminary layouts were established based on the stream tables, and capital and operating costs were estimated for each flowsheet. This information was used to carry out a preliminary economic evaluation using net present value and sensitivity analysis. In this case, the most economically attractive process was found to be particle sorting; although further benefits may be realised by combining with bulk sorting. This paper describes the methodology used and the key findings of the study. Keywords: Pre-concentration, pre-screening, ore sorting, jigging, Ag-Pb-Zn, particle sorting, bulk ore sorting

Jan 1, 2020

By A. L. Hinde, P. J. D. Lloyd, A. R. Atkins, J. G. MacKay

The control of milling circuits by A. R. ATKINS, M.Se. (Elee. Eng.) (Visitor), A. L. HINDE, S.Se., Ph.D. (London) (Visitor), P. J. D. LLOYD, S.Se. (Chem. Eng.), Ph.D. (Cape) (Fellow) and J. G. MACKA Y, S.Se. (Chem. Eng.) (Visitor). The general behaviour of mills is described in an attempt to find a control philosophy that will permit milling circuits to produce a constant particle size. Although the experimental work has been confined to a single section of the milling circuit of one mine, it is felt that the findings are applicable to other milling circuits.

Jan 6, 1974

By M. Le Roux, Q. P. Campbell, M. Fofana

The determination of densimetric information to predict coal washabilities is an important step in characterising the feed material, as well as the performance of operating plants. However, traditional methods like float-and-sink analysis are hazardous and time-consuming. This is especially true for finer particle size ranges, where very long settling times are required in a medium. De Beers Technologies recently developed a density analyser, known as the RhoVol, for use on diamondiferous kimberlite. Operating over size ranges from 25 mm down to 3 mm, it can determine the mass, volume, density, size and shape of all the particles in a given population and is thus able to provide information about the densimetric distribution on a single particle basis. A study was carried out to compare uncalibrated and calibrated RhoVol results to densimetric and size data obtained using traditional zinc chloride float-sink procedures, for three different coal samples in the size range 3 mm to 8 mm. The results indicate that the RhoVol can be used to provide simple, rapid and safe size-by-washability information for coal, provided proper pre-calibration is done, mainly to account for the effects of particle porosity in the density determination. Keywords: Coal washability determination, RhoVol, densimetric curve

Jan 1, 2020

By E. C. de Beer

"SynopsisA number of important areas in nuclear fuel cycle, at both the front end and back end, offer ideal opportunities for the application of non-destructive evaluation techniques. These techniques do not only provide opportunities for non-invasive testing of e.g. irradiated materials, but also play an important role in the development of new materials in the nuclear sector. The advantage of penetrating radiation used as probe in the investigation and testing of nuclear materials makes X-ray and neutron radiography (2D) and tomography (3D) suitable for various applications in the total nuclear fuel cycle. The unique and different interaction modes of the two radiation probes with materials provide several opportunities. Their complementary nature and non-destructive character makes them most suitable for nuclear material analyses, analytical method development, and the evaluation of the performance of existing nuclear material compositions. This article gives an overview of the X-ray and neutron radiography/tomography applications in the field of nuclear material testing, and highlights a few of the success stories. Several selected areas of application in the nuclear fuel cycle are discussed to illustrate the complementary nature of these techniques as applied to nuclear materials.IntroductionDuring the development of new materials for the nuclear industry, materials testing and characterization are of the outmost importance to maintain safety standards and reliability. No compromise on safety in the workplace in any area within the total nuclear fuel cycle can be tolerated, and therefore most in-situ material characterization and testing is conducted by certified and qualified personnel schooled in destructive and non-destructive testing (DT and NDT) methods. Certification and qualification in NDT can be obtained through many training centres in South Africa in accordance with European, American, and other international standards (SGS, n.d.; SAIW, n.d.; African NTD Centre, n.d.)."

Jan 1, 2015

By K. C. Sole, M. E. Mitshiabo

Although surfactants have proven to increase metal extraction by improving solution flow in porous media, these reagents have not been widely adopted in heap leaching operations because of potential incompatibilities with downstream processes that are subject to surface properties. The BASF leaching aid, LixTRA 118, was previously found to have no significant effect on post-leach operations. This study evaluated its performance in ores of different particle size distributions and the impact on acid consumption and metal recovery. Column leach studies, carried out on a copper oxide ore and mixed oxide–sulfide ore, showed that the effect of LixTRA 118 was more pronounced in ores with wider particle size distributions than in those with more uniformly sized particles. Solution percolation rates increased by up to 18% in the presence of leaching aid, and increased copper recovery and acid consumption. Improved wetting facilitated the kinetics of acid diffusion at macroand micropore level. There was no significant effect on iron recovery

Jan 1, 2023

By F. Roelofse, D. Grobler, and M. Purchase, C. Gauert, E. Kotze

Scandium is an important industrial metal for which demand is projected to increase in the future. Although many Sc deposits are secondary, Sc is scavenged by clinopyroxene during fractional crystallization of primary, mafic-ultramafic magmas. Sc may thus occur in sub-economic concentrations in mafic-ultramafic intrusions. In this work, we present new data on the concentration of Sc in the Bushveld Complex (BC) of South Africa. The eastern and western limbs of the BC are considered to be largely pristine, primary magmatic deposits, whereas the northern limb shows evidence of largescale, localized crustal contamination. Samples from the primary magmatic cumulates of the eastern limb, from the mineralized Flatreef of the northern limb, and from the crustal-contaminated Footwall Assimilation Zone (FAZ) of the Flatreef were analysed for Sc. Despite the FAZ containing abundant clinopyroxene, interpreted to have recrystallized from the original cumulates in the presence of melted sedimentary rocks, no significant differences are seen in the concentration of Sc compared to other cumulate rocks of the BC containing less-abundant clinopyroxene. The concentration of Sc in the analysed samples is mainly controlled by mineralogy, with anorthosites, chromitites, and harzburgites containing under 20 ppm, and norites and pyroxenites containing 20–40 ppm. The parapyroxenites of the FAZ are less enriched in Sc than expected, suggesting that Sc may have been lost during alteration and recrystallization.

Sep 1, 2022

By J. Guerrero, O. Pavez, N. Toro, A. Nazer

In the 19th century, mining in northern Chile was of great economic importance. Today, the ruinsof the copper smelters and abundant fragments of refractory bricks from their furnaces remain. Therefractory materials have not been previously studied. the origin, physical and chemical properties, and compressive strength of 10 different samples of historical refractory bricks collected on-site were investigated. The characterization results showed that the bricks are silico-aluminous, unlike the magnesium-chromium bricks used by current foundries. It was determined that 90% of them were produced in the UK and 10% were manufactured in Chile. The phases present are mullite, quartz, cristobalite, and tridymite, and the chemical composition corresponds mainly to SiO2. The compressive strength of the historical bricks is similart to those currently used,. These results may contribute to the knowledge of the 19th century mining and metallurgical historical heritage of Chile and the UK.

Jul 5, 2023

By D. Paktunc, S. P. du Preez, J. P. Beukes, P. G. van Zyl, A. Jordaan

"The chromium (Cr) content of stainless steel originates from recycled scrap and/or ferrochrome (FeCr), which is produced mainly by the carbothermic reduction of chromite ore. The oxidative sintered pellet production process is one of the most widely applied FeCr processes. The supplier of this technology specifies that recycling of chromite-containing dust collected from the pellet sintering off-gas and fines screened out from the sintered pellets (collectively referred to as pre-oxidized chromite fines) should be limited to a maximum of 4 wt% of the total pellet composition. However, the results presented in this paper suggest that recycling of such fines up to a limit of 32 wt% of the total pellet composition may improve the compressive and abrasion strengths of the cured pellet. In addition, electron microprobe and quantitative X-ray diffraction (XRD) analyses demonstrate that chromite grains present in the pre-oxidized chromite fines consist, at least partially, of crystalline phases/compounds that will improve the metallurgical efficiency and specific electricity consumption (i.e. MWh/ton FeCr produced) of the smelting process. Introduction Stainless steel is a vital modern-day alloy that is well-known for its corrosion resistance, which is mainly due to the inclusion of chromium (Cr) (ICDA, 2013). Stainless steel is mostly produced from recycled scrap and ferrochrome (FeCr), a relatively crude alloy of Cr and iron (Fe). FeCr is predominantly produced by the carbothermic reduction of chromite, a mineral belonging to the spinel group characterized by the unit formula [(Mg,Fe2+)(Al,Cr,Fe3+)2O4] (Haggerty, 1991; Paktunc and Cabri, 1995; Tathavakar, Antony, and Jha, 2005). Although Cr can occur in 82 different minerals, chromite is the only source of new Cr units that can be exploited in commercial volumes (Motzer and Engineers, 2004). Approximately 95% of mined chromite is used in the production of various FeCr grades, of which high-carbon and charge grade FeCr are the most common (ICDA, 2013)."

Feb 1, 2019

By L. Stamenov, A. Grigoryan, M. Nolte, E. Ayvazov, K. Evtiminova

Dundee Precious Metals Inc. (DPM) owns and operates the Ada Tepe gold mine and processing facility (previously referred to as the Krumovgrad Gold Project) located in south-western Bulgaria. The Ada Tepe mine became the first green filed project in past 40 year in Balkans and one of the few in Europe when it was commissioned during the first half of 2019. The plant produces a high-grade gold silicate concentrate generated through its comminution circuit and staged floatation reactors (SFR’s) while depositing its tailings in a state-of-the-art Integrated Mine Waste Facility (IMWF). This paper presents the successful commissioning, ramp-up and optimization of the Ada Tepe processing plant and how the various challenges, including that of an inexperienced front-line workforce, were overcome. More specifically addressing how the implemented modern processing technologies and the operational readiness program, supported the people and process to achieve the design parameters safely and consistently. Keywords: Commissioning, Optimization, Innovation, Gold mine, Digital mine

Jan 1, 2020

By O. Dahl, B. Musuku, N. Schreithofer

Recovery of fine pentlandite is proving to be a challenging task in the Kevitsa sequential flotation operations, with over 60% of the nickel losses reporting into the -25μm size fraction. Since commissioning, the Kevitsa process has undergone major changes to address throughput and flotation performance. Major changes were implemented in the configuration of the milling and flotation circuits as well as in the operating conditions and reagent regime. Some of these changes improved nickel flotation while others deteriorated flotation performance. Most of the changes have had a direct impact on nickel flotation. This paper reviews the systematic analysis, laboratory testing and salient changes done to the process with special focus on the impact on the fine pentlandite flotation. Keywords: Blending, Flotation, Chalcopyrite, Pentlandite, Fines

Jan 1, 2020

By M. Louarrat, G. Enaime, A. Yaacoubi, A. Baçaoui, J. Blin

"The purpose of this study is to prepare a new activated carbon from olive stones for use in gold recovery by carbon-in-leach (CIL) and carbon-inpulp (CIP). The preparation method chosen was physical activation using steam. The effect of four process parameters: the residence time for carbonization, the activation temperature, the residence time for activation, and steam flow, were studied by the mean of response surface method (RSM) in order to optimize the yield, iodine index, and attrition characteristics. These two last responses were used as primary indicators of gold recovery capacity and mechanical strength. The results obtained show that optimal activated carbon can be prepared under the following conditions: a carbonization time of 157 minutes, activation at 921°C for 53 minutes, and a water vapour flow of 0.18 mL/min. This optimum carbon has an iodine value greater than 1100 mg/g and an attrition index in the order of 0.74%. These values reflect the quality of the precursor (olive stones) as a raw material for the development of an effective new activated carbon for the gold mining industry. IntroductionActivated carbon is an effective adsorbent widely used in industry due to its high surface area, well-developed reproducible microporous structure, and high degree of surface reactivity and adsorption capacity. World consumption of activated carbon is steadily increasing. It is primarily used in industrial wastewater and gas treatment and also for silver and gold recovery from cyanide solutions (Syna and Valix, 2003; Soleimani and Kaghazchi, 2008; Buah and Williams, 2010; Eddy et al., 2011). However, activated carbon is expensive and it needs to be regenerated after each adsorption cycle. In order to decrease the cost of manufacturing activated carbon, low-cost forest and agricultural wastes are considered promising new materials. In recent years considerable research has been reported on activated carbon from agricultural wastes, such as olive stones (Yavu et al., 2010), acorn shells (Sahin and Saka, 2013), peanut shells (Wu, Guo, and Fu, 2013), grape seeds (Jimenez-Cordero, 2014), coconut shells (Yalcin and Arol, 2002; Gratuito, 2008), palm shells (Sumathi, 2009), cherry stones (Jaramilloa, Gomez-Serrano, and A´lvareza, 2009), macadamia nut shells (Eddy, 2011), apricot stones (Soleimani and Kaghazchi, 2008), and bagass (Syna and Valix, 2003)."

Mar 1, 2019

By F. T. Cawood, C. C. Birc

The South African mineral resource royalty system, initiated in 2010, employs a hybrid ad valorem approach tied to profitability ratios. This rate is then applied to the total revenue from mineral sales. In this article we explore how the profitability ratio in the mineral resource royalty formulae interacts with the gold tax formula as applied to South African gold mines, devising a strategy for cut-off grade optimization. The study focuses on nine narrow, tabular-reef (Witwatersrand) gold mines. The approach involves a mixed-integer cut-off grade optimizer utilizing Excel Solver, incorporating relevant royalty and income tax formulae. Different mineral resource royalty cost scenarios were examined. Ignoring these costs in the break-even analysis lowers the cut-off grade but slightly boosts profits compared to considering expected costs. The developed optimizer model, recognizing the profitability aspect of the mineral resource royalty and income tax formulae, yielded a 6% lower cut-off grade than the base case. This is significant for increasing mine life. While the profit differences are marginal (0.2% compared to the break-even base case), substantial improvements were noted: a 6% increase in stope tons above cut-off grade, and a 4% rise in total revenue. Enhanced resource utilization (3% extra gold kilograms) reduces necessary development and overall costs, allowing for a reduction in the cut-off grade and ultimately, more profit.

Aug 8, 2024

By J. R. Bredell, J. Branehog, C. Coetzee, J. J. van Tonder

A nutating grinding mill, exemplified by the commercial HICOM mill, achieves efficient particle size reduction through the accelerated motion of the material charge within the nutating chamber. This design, characterised by high particle velocities and rapid charge circulation, offers a compact solution compared to tumbling mills. There have been concerns regarding the mechanical reliability of kinetic joints for certain specialised mining applications. Recognising the need to model internal forces in such systems, this study focuses on the uncoupled simulation using multibody dynamics and the discrete element method. The investigation employed a small-scale experimental test mill, referred to as the NuMILL, featuring a cylindrical chamber (140 mm internal diameter, 245 mm height, 6° nutation angle). Instrumented with an array of sensors, the NuMILL provided internal load data for validating the simulations. Experiments were conducted with an empty chamber or filled with charge material. Charge materials included coarse sand or steel pellets with a charge-to-chamber mass ratio of 0.25. The mill speed ranged between 100 to 700 RPM. Multibody dynamics modelled resultant inertial and frictional loads within 5%, while the discrete element method simulated the internal material contact loads with accuracies ranging from 1% to 19%. The combined simulation approach predicted the resultant forces in the critical kinetic joint within a 20% margin. Representing the charge using rigid lumped mass elements was also studied. The presented simulation techniques, validated against experimental data, offer a robust foundation for analysing larger systems, including the industrial-scale HICOM.

Mar 5, 2025

By P. Lenegan, R. Masethe, R. I. L. Ferreira

Underground mining in high rock-stress environments can induce unanticipated dynamic rockmass deformation, posing a serious risk to the workforce. Data collected by seismic networks are imperative for the design-as-you-mine process. Often an inappropriate assessment of the seismic hazard is done when unnecessary data are included in analytical techniques, particularly short-term time frames. Depending on the methodology or application of data analysis and interpretation, some of the information may not be relevant and even detract from the objective. By using the spatial event clusters associated with active workplaces to define the shape and size of the polygons for data selection for subsequent analysis, a problematic subjective component can be eliminated. The mining of tabular reefs in South Africa, be they gold- or platinum group metals, is very extensive, and underground workplaces are often widespread. Production stoppages are very costly, especially for marginal mines, so there is just cause not to evacuate an entire operation’s workforce following the occurrence of a large mining-induced seismic event. A rationale based on the damaging peak particle velocities (PPV) of the past seismicity can exclude the unaffected underground personnel and allow a quick orderly withdrawal where required. Micro-deformation may precede rockbursting, which can occur on-shift close to the workface. A mine-wide array of geophones suitable for the accurate location and analysis of seismicity may not be able to detect these higher-frequency emissions. Inexpensive but fit-for-purpose accelerometers, providing real-time, continuous measurement of acoustic rockmass deformation near the workplace, integrated through underground and surface communications networks, are shown to record ‘rock-talk’, clearly distinguishable from the instrument background noise, which can be in the order of hours leading up to an imminent damaging seismic event.

Jan 12, 2025

By G. Kleyn

"Sub-standard practices and their adverse impact on safety performance remain a challenge in the South African gold mining industry. The purpose of this study was to investigate the root causes of sub-standard practices and the effect on safety performance in South African gold mines. The focus of the study was on the underground production operations at a gold mine in the Free State. The study consisted of three parts: a personal investigation into the causes of sub-standard practices at the mine, a comparison with the results of a cultural study performed at the West Wits mines, and a behavioural survey.The studies described in this article yielded similar results in terms of the key drivers behind sub-standard practices. It was found that substandard practices had a number of causes, and the origin lies within the habits, attitude, and behaviour of employees. Current methods of addressing sub-standard practices and improving safety performance were found to discourage employees from performing work safely and according to procedure. It was concluded that the lack of critical behavioural habits for the given work environment and job title could possibly be the primary reason for the occurrence of sub-standard practices. IntroductionSince the implementation of the Mine Health and Safety Act, 1996 (Act 29 of 1996) and the Mine Health and Safety Regulations, the South African mining industry has been striving to improve health and safety performance and has placed great emphasis on adherence to mine standards.The Act requires employers in the mining industry to report accidents, incidents, and dangerous situations to the Regional Principal Inspector of Mines in their area. The data provided by employers is captured and analysed by the South African Mines Reportable Accident Statistical System (SAMRASS) and made available for public viewing (Department of Mineral Resources, 2011).A review of the national mine-related accident statistics shows clearly that the South African gold mining industry has improved its safety performance markedly over the past decade, but is still facing major challenges (Figure 1). These include meeting the Mine Health and Safety Milestones (Department of Mineral Resources, 2011)."

Jan 1, 2016

By B. J. Coetzee, P. W. Sonnendecker

The quality control of a two-stage coal washing process involves several complex components that need to be modelled accurately, to enable autonomous control of the process. The first objective is to develop a method to track the material through the washing process, while ensuring accurate washing prediction models are used. This was achieved through a digital twin model of the Grootegeluk 1 coal processing plant. The model is the amalgamation of manipulating and combining of data-sets from the plant historian, geological wash tables, and mining dispatch servers. This information is then used to control and set the processing medium densities of all 15 modules on the plant, 10 modules in the primary wash and 5 modules in the secondary wash. This controller has been successfully implemented and controlled the plant for 10 days.

Aug 2, 2022

By C. Birch

"The purpose of this study was to establish the impact of discount rates on cut-off grades for narrow tabular gold deposits as characterized by the goldfields of the Witwatersrand Basin in South Africa. There are various methods available for determining the cut-off grade, from simple breakeven calculations to sophisticated software packages that consider a variety of inputs to optimize the cut-off grade. For this study a simple financial model was created in Microsoft Excel® that links the ore flow, block listing, and the cash flow. This allows the cut-off grade to be optimized considering how the cost of capital and chosen discount rate affect the cash flow.The discounted cash flow (DCF) and resultant net present value (NPV) are a widely used valuation method for production properties according to the South African Code for the Reporting of Mineral Asset Valuation (SAMVAL Code). The financial model in this study utilizes the Solver function, as well as simple Microsoft Excel spreadsheet formulae to optimize the NPV. Solver was chosen as it is a standard feature in Excel and thus no additional software costs are incurred beyond the basic Microsoft Office suite. For the purpose of this study, just narrow tabular gold deposits of the Witwatersrand Basin were considered. An example of a typical ore block listing, as well as the costing figures, was obtained from an operating gold mine. The results obtained from the study financial model were compared to the current cut-off grades obtained from the mine using their proprietary optimizer program, and were found to be comparable. The methodology utilized for this study thus appears valid.The cut-off grade was optimized considering the cash flow, which includes the variable mineral resource royalty tax, the variable gold income tax, as well as the discount rate. By comparing the resultant NPVs using discount rates of zero, 9%, and 12%, the impact of the discount rate on cut-off grades, resultant life of mine, and average mining grades (AMG) could be compared for the example ore block listing. The South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) does not require operations to state if a discount rate was considered in determining mineable reserves. Mining companies approach the question of applying discount rates in determining their cut-off grades, and thus mine planning strategy, in different ways. Due to the negative impact that optimizing purely on NPV has on the life of mine, some choose to optimize only on profit. Other companies have reverted to utilizing pay limits as their primary grade planning strategy. The calculated cut-off grade is then considered to be another planning indicator rather than a hard determination of mineable reserves."

Jan 1, 2016