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By P. J. Williams, A. R. Foster

Petrographic studies, assay records, and laser ablation-inductively coupled plasma-mass spectrometer (LA-ICP-MS) analyses of major sulfides suggest nearly all of the gold at the Ernest Henry Cu-Au deposit occurs in the form of native gold or electrum (95-65 wt.% Au); sylvanite and dissolved gold in cobaltite, chalcopyrite, and pyrite make only minor contributions. LA-ICP-MS analyses of the gold contents of chalcopyrite gave from 8 to 139 ppb (mean = 56 ppb), more than an order of magnitude lower than those experimentally determined in chalcopyrite in equilibrium with native gold at the estimated mineralization temperatures (350°-450°C). Gold content is more variable in pyrite (1-400 ppb, mean = 77 ppb) and highest in narrow growth zones of a subordinate type of complexly zoned pyrite wherein it is associated with elevated As, Ag, Sn, Sb, Te, and Bi. Deposition of gold-electrum was closely associated with, but preceded some of the chalcopyrite deposition, as indicated by microtextures and lower bulk Au:Cu ratios in late-stage chalcopyrite-rich veins. Gold grains have maximum dimensions from <1 to 50 micrometers, and are heterogeneously distributed with most occurring in microscale clusters. Fifty-five out of 76 grains recorded in polished sections are in contact with both chalcopyrite and pyrite, and many of the rest are in sites where such a relationship could exist in the third dimension. The dominant textural sites are intergrowths with chalcopyrite in microveinlets cutting pyrite, and on faces of pyrite grains in contact with chalcopyrite. Scanning electron microscopy, electron microprobe analysis, and proton induced X-ray emission studies show that pyrite associated with gold includes complexly zoned, weakly zoned, arsenian, and arsenic-poor types. The textures are compatible with the possibility that most gold was deposited electrochemically as native metal on pyrite surfaces. The textural distribution of gold has important metallurgical implications given that the ore processing circuits at Ernest Henry and most other sulfide copper mines are designed to exclude pyrite (and arsenic) from concentrates.

Jan 1, 2007

By Donald Strickland, Peter Kresin, Dave Hall

"Have your parents or grandparents ever tried to share with you their wisdom and you ignored it because it did not relate to you‘? I have been ignorant and inevitably grew older and wished I had listened. The result: learning the hard way. As British Astronomer Fred Hoyle once said. “It is the true nature of mankind to learn from mistakes not from example.“ Hopefully we will continue to learn from the examples shared by our fellow mineral processors in these conference proceedings. It is the intent of this paper to share wisdom from the Musselwhite Mine that you may apply to your own operation.This paper is divided into three sections:1. Feasibility3. Operation3 . DesignKey points of the Feasibility and Design stages are summarized. followed by an analysis of actual operating statistics. An attempt is made to relate these statistics back to the feasibility and design with emphasis on areas of success and those with potential for improvement."

Jan 1, 1999

By Trevor Harris, Martin Harris

"This paper evaluates the effect of grind size on the flotation performance of a platinum ore from the UG2 reef of the Bushveld Igneous Complex, in South Africa. The study was conducted on the Mintek Flotation Pilot Plant Facility, located in Johannesburg, and represented a thorough evaluation of the application of the flotation modelling methodology developed jointly by the University of Cape Town and the Julius Kruttschnitt Mineral Research Centre at the University of Queensland through the AMIRA P9 Project. A simulation model of the pilot plant data was successfully implemented, providing a set of circuit modelling parameters that appeared to be both consistent and well correlated to measurable characteristics of the ore and the pilot circuit operating conditions. The findings indicate that the methodology that was used could well provide a useful framework for developing optimisation criteria for industrial flotation circuits in combination with appropriate feed grind size and regrind size targets.INTRODUCTIONIt has long been recognised that the size distribution of an ore is one of the most important factors in the determination of the performance of a flotation process. It therefore follows that the optimisation of a flotation plant cannot be considered without due recognition of the interdependence of this process with the process of comminution. There are numerous qualitative guidelines for the selection of an optimum grind target for a particular operation. Mineralogical analysis can readily provide information on liberation as a function of grind, and the desirable particle size range for optimum mineral flotation is well established in both theory and practice (see for example Trahar, 198 1). For some operations, meeting these two criteria simultaneously is relatively simple. For the majority of operations, such mineralogically “easy” deposits, if they ever existed, have long been exhausted, and the optimum grind represents a highly complex compromise between liberation and overgrinding of both desirable minerals and gangue. This is particularly true for circuits that include regrind stages, where both primary and secondary (and sometime even tertiary) grind targets must be specified. As has been pointed out in a recent paper by Bazin and Hodouin (2001), there is little or no information in the literature to assist plant engineers in the selection of optimum grind targets for complex ore deposits, so current practice is primarily based on rules-of-thumb and experience. This problem is further compounded by the fact that once grind targets have been selected for a particular operation, the assessment and adjustment of these targets based on plant surveys is extremely difficult, time consuming and expensive, and is often not attempted unless the plant significantly underperforms relative to expectation. It is therefore clear that the development of a practical quantitative approach to this problem is a high priority for flotation research and development studies."

Jan 1, 2002

By E. Pribonic

Failure of a mine material hoist can cause injuries, fatalities and significant infrastructure damage, along with an associated loss of production. Principal causes of hoist accidents are overwind and underwind. Past and present means of arresting hoisting equipment are marginally effective and utilize destructive systems that are not reusable following an arrest. The use of permanent magnet eddy current arrestor technology is proposed; the history and fundamental science of the technology are presented, followed by real world examples and calculations of performance for failsafe, friction-free, instantly reusable eddy current arrestors as applied to stopping a 30-ton ore skip traveling at 16 metres per second. A comparison of existing arrestor types with the eddy current arrestor is included and limitations of the ECA are also discussed.

Jan 1, 2008

By C. Pelley, S. Kelebek, T. Katsabanis, B. Nanthakumar

"As part of a larger investigation on generation of fines from mining activities and their effect on downstream operations, ore samples from Onaping area stockpiles of Falconbridge Ltd were studied. Batch flotation tests were conducted on the stockpile samples and fresh ore samples to explore the effect of stockpiling on grade-recovery performance. Head grade and particle size distribution of the samples from stockpiles were adjusted so that the samples compared are similar to each other. In additional tests, fresh ore samples were blended with stockpile samples at various percentages, representing 27.4, 50.2 and 81.5% of stockpile samples.The samples from stockpiles produced inferior nickel grade-recovery curves compared to fresh ore. The poorer grade-recovery performance was attributable to two factors. First, a significant dilution effect was observed due to the nearly complete flotation of pyrrhotite. Secondly, while pyrrhotite from stockpiled ore became highly floatable, the same stockpiling conditions caused nickel losses that were attributable to non-floatability of some pentlandite.In the case of blending, there was generally insignificant difference in the nickel grade-recovery between fresh and blended samples when the blending cases involved 27.4 and 50.2% stockpile samples. However, an increase in pyrrhotite recovery was observed for both blending cases. At 81.5% blending case, degraded grade-recovery was significant primarily due to the nearly complete flotation of pyrrhotite. There was a small, but noticeable amount of nickel loss for this case. However, for lower ratios of blending this loss was negligible.The increase in pyrrhotite recovery was partly attributed to its activation by Cu and Ni ions. Formation of a significant amount of elemental sulphur was also apparent from analysis of stockpiled samples. It can be concluded that pyrrhotite is mildly oxidized under stockpiling conditions while part of the pentlandite undergoes a more severe oxidation."

Jan 1, 2006

By K. Gie Tan, Frank Wright

"Misty Mountain Gold Limited (MGL - TSE VSE, MGLCF - NASDAQ) of Vancouver, owns the Harmony Gold Project located in the Queen Charlotte Islands of British Columbia. The deposit contains a mineable reserve of 2.3 million ounces of gold, at a 1.2 g/t cut-off and an average grade of 2.1 1 g/t Au.Discovered in 1970 and frequently investigated by previous owners, full-scale production has not yet occurred because of the complex metallurgy of the deposit. Recent process studies that were completed in six months at Process Research Associates Ltd. (PRA) of Vancouver resulted in significant improvements to the project viability. The work involved detailed mineral processing studies aimed at achieving a marketable concentrate. An option for bio-oxidation and cyanidation to allow on-site dor6 production was also investigated.The main findings at PRA followed the front-end recovery of finely divided free gold (Au) by gravity concentration. Approximately 20% of Au reported to less than 0.2% of the mass, resulting in a grade exceeding 500g/t Au. The resulting gravity tailing provided a uniform feed for flotation evaluation. The optimization of this step allowed for a reasonable primary grind size of 80% passing (&) 50pm. Efficient slime’s rejection was made possible by flotation at a reduced pulp density, and pre-oxidized sulphides were reactivated with Na,S. The regrinding of the bulk flotation concentrate followed by up to five stages of cleaning resulted in a combined gravity + flotation product of 50g/t Au with 82% recovery in less than 4% of the feed mass.Further studies indicated that the flotation concentrate was amenable also to tank bio-oxidation. At 65% sulphide oxidation the gold recovery improved from less than 70% to 90% by cyanide extraction using CIL (carbon in leach). This compares to less than 45% gold recovery from whole-ore cyanidation in several previous studies. Heap leaching may also be considered for lower grade material. PRA’s methodical approach and consistent results dispelled the uncertainty about predicting the material behavior for the Harmony Property."

Jan 1, 2000

By Paolo Toscano, Dave Hall

"This paper discusses the project history, process design and layout of the Rainy River Gold Project mill. The circuit consists of a 55 x 83 primary crusher, 15 MW SAG mill and 15 MW ball mill. Both mills are twin pinion with LSS and VFD drives. A pebble crusher is located in the process plant with bypass and stockpile options. Gravity concentration followed by 30 hours of leach residence, carousel CIP, carbon recovery, cyanide destruction and tails disposal in a 1,428 hectare tailings management area (TMA).The Rainy River Gold Project is located approximately 65 km northwest of Fort Frances in north western Ontario. The project is scheduled to be commissioned and reach commercial production in mid-2017. Expected cost is $US877M and is comprised of an open pit mine, process plant, tailings management area and supporting infrastructure. The process plant is designed to produce gold/silver Dore’ bars.The project has been developed on the following timeline:• 1967 – First exploration• 1994 – 17 zone discovered• 2004 – 433 Zone discovered• 2005 – Rainy River Resources Ltd. purchases property • 2006 - ODM zone discovered• 2007 - Cap Zone discovered• 2008 - First NI-43-101 Resource completed• 2012 - PEA completed & Intrepid Zone discovered• 2013 - New Gold acquires Rainy River Resources• 2014 - Updated feasibility study completed & Environmental Assessment report submitted• 2015 - Detailed Engineering >95% complete, EA approved and construction commencesThe property is accessed by provincial highway 600 and is within 17 km of 230 kV power line and railway sidings. Key project criteria are summarized as follows:"

Jan 1, 2016

By Robert C. Stanley

The prominence of her mineral resources makes Canada a most fitting place in which to hold the Second Empire Mining and Metallurgical Congress, since in all probability the Dominion has more diversified mineral wealth than any other part of the British Empire. This paper is concerned with nickel, an important factor of Canada&apos;s mineral production. The richness and quantity of her nickel ores have made Canada the world&apos;s most important source of supply of the metal. Its history and diversified uses are, therefore, particularly interesting at this meeting. Early History Probably the first use of nickel by man was in the fashioning of implements, and later swords, from nickel-bearing meteorites, masses of metal that have fallen from time to time at many points on the earth&apos;s surface and which consist normally of iron carrying substantial amounts of nickel. Meteorites were perhaps the first metal known to man. The falling star, sought out with fear overborne by curiosity, was found to be a better stone than the earth-given, truly a boon from the gods. Archaeologists tell us there is good evidence that the ancient oriental peoples learned at an early date to make these stones into useful implements. The invincible blades of the great warriors of old, in China, Persia, and in northern Europe, were Heaven-sent, a fable which sounds significant of meteoric iron. Probably some of the ancient swords of Khorassan and of Damascus were of meteoric nickel-bearing iron.

Jan 1, 1927

By S. Dessureault, J. Porter, M. Woodhall

Information and communication technology (ICT) is seen as a key source of future productivity improvements in mines. The information technology infrastructure (ITI) necessary to achieve these productivity improvements will come in the form of data integrated from multiple source systems throughout the mining value chain. Two pure approaches are available: supplier-controlled or operations controlled data structures; each strategy has its own advantages and disadvantages. Case studies involving the South African mining industry are used to demonstrate the advantages of using hybrid-controlled data structures. Depending on the level of operational control, new skills are also necessary to be learnt by mining professionals including: information engineering; creating consistent and quality data; and process improvement techniques that use the integrated data for improving the operation.

Jan 1, 2004

By P. L. Richard

An open pit a mine can be thought of as a business unit, with capital, operating and maintenance costs that exceed those of many large business enterprises. Truck-and-shovel operations have an inherent ?looseness? to them, unlike manufacturing or processing operations where production components are tightly coupled (through conveyors, material flow in pipes, assembly lines, and so on). Effective monitoring and control of truck-and-shovel operations requires a combination of both information systems and performance management. Production monitoring systems can impact operations at three levels: minute-by-minute decisions during the shift, procedures, and policies. The technology of production monitoring ranges from real-time data collection to manual entry of time card data into a computer. Time card information is too coarse to effectively manage a multi-million dollar fleet of mobile equipment, so a higher level of production monitoring is required. People issues affect whether the implementation will be a success or a disappointment. Considerations that affect the people issues are discussed, including common obstacles, and key success factors. A balanced scorecard approach must be used, since uni-dimensional measures of performance like tons produced give no indication of whether the production was achieved at the expense of another factor.

May 1, 2004

By P. L. Richard

An open pit a mine can be thought of as a business unit, with capital, operating and maintenance costs that exceed those of many large business enterprises. Truck-and-shovel operations have an inherent “looseness” to them, unlike manufacturing or processing operations where production components are tightly coupled (through conveyors, material flow in pipes, assembly lines, and so on). Effective monitoring and control of truck-and-shovel operations requires a combination of both information systems and performance management. Production monitoring systems can impact operations at three levels: minute-byminute decisions during the shift, procedures, and policies. The technology of production monitoring ranges from real-time data collection to manual entry of time card data into a computer. Time card information is too coarse to effectively manage a multi-million dollar fleet of mobile equipment, so a higher level of production monitoring is required. People issues affect whether the implementation will be a success or a disappointment. Considerations that affect the people issues are discussed, including common obstacles, and key success factors. A balanced scorecard approach must be used, since uni-dimensional measures of performance like tons produced give no indication of whether the production was achieved at the expense of another factor.

Jan 1, 2004

By Frank G. Wickert

One key to maintaining successful mining operations in today?s global economy is in having the ability to access real-time machine operating data ([1] G. Brown, B. Ebacher, W. Koellner,2000)([2] Brochure of Siemens E&A, Order Number 141000-1). With recent and ongoing advances in mining equipment systems it is imperative that mine managers have full knowledge of the status of their equipment at any given point in time. This knowledge is critical to ensuring that the productivity of each and every machine is maximized. Knowledge of machine status is only the first step, however, in controlling and optimizing a piece of mining equipment. Computer based diagnostic systems, traditionally offered on mining equipment, have provided a link for collecting data and trouble-shooting problems as they occur. One problem existed, though, that those systems stopped short of providing full drive systems access. A maintenance technician could see the data but to make critical adjustments or make repairs the technician needed to be on the machine. In extreme cases the machine would be down until OEM assistance could reach the mine site. The key then to reducing down-time and maximizing machine productivity was creating a system that could not only monitor drive systems but also provide remote access to those systems. Essentially a link needed to be created through which a technician could gain drive access remotely then make adjustments or repairs without being on the piece of equipment. This paper will introduce AccessDirectTM, a new remote diagnostic system for Bucyrus mining shovels and draglines. AccessDirectTM combines all three important elements of remote diagnostics: ? Vital Signs and Production Monitoring (SiRAS-M) ? Automatic analysis (SiRAS-A) of faults, and tracking of trends for preventive and reliability centered maintenance , and ? Fast, direct Intervention (SiRAS ? I) for troubleshooting support, repairs, and system optimization.

May 1, 2002

By S. McCalpine, W. Muir, P. J. Downey

"Golden Bear Operating Company Ltd. (GBOC) was a joint venture between Chevron Minerals Ltd. and North American Metals Corp. that was formed for the development of the Golden Bear Project. The mine is located at Muddy Lake, Western British Columbia, approximately 80 km northwest of Telegraph Creek and 135 km west of Dease Lake (see Figure 1). Road access to the mine was developed by Golden Bear and consists of a radio controlled 155 km gravel road originating at highway 114.A feasibility study was completed in 1987 and project approval was finalized in 1988 with Golden Bear issuing a ""Request For Proposal"" for detailed engineering in May 1988. Golden Bear also commenced negotiating with vendors at this time for the supply of the two principal process equipment packages: the dry grinding and classification system and the whole ore roaster package.Process plant engineering and plant construction was completed in October 1989 with plant startup commencing in November 1989. Two months into the commissioning phase it became apparent that the plant, as designed, would not achieve the anticipated production targets.Kilborn Engineering Pacific were subsequently contracted by GBOC to review and modify the plant design, assist the operating personnel with plant commissioning and startup and provide operator training.This Paper describes some of the problems encountered during the startup and the plant modifications incorporated to achieve design parameters."

Jan 1, 1992

"Increasing demand for timely and accurate information about flotation plant performance requires metal accountants to increase the scope and reporting frequency of plant production. This trend has brought in-process inventory estimation at the forefront of metal accounting issues. Such significant in-process inventories can be locked in diverse process equipment (bins, holding tanks, flotation cells, thickeners, pipeline, etc.) or in stockpiles (ore, concentrates, tailings, etc.). Practice has shown that boldly ignoring these in-process inventories or the errors associated with their estimation lead to unreliable metal balances thereby creating confusion in plant production planning and operational performance assessment. To this extent, the characteristics (physical bounds, spatial heterogeneity and residence time) as well as the available measurements (volume, density, humidity, mass, composition, etc.) of each unit/section found in a generic flotation plant are jointly reviewed with respect to the particular metal accounting issues they present. The daily and monthly metal accounting tasks are then reviewed together with possible methods for obtaining reliable inventory estimates including different procedures for end-of month reconciliation.INTRODUCTION Most of the cost reduction initiatives of the mining industry aim at improving capital efficiency and asset utilization. Among the possible paths through which these goals can be achieved are mine-to-metal optimization, real-time plantwide process control (Hodouin, 2011) and knowledge sharing databases (Bascur & Linares, 2006). However, the successful implementation and subsequent monitoring will ineluctably results in an increased demand for timely and accurate information. This more than often requires metal accountants to increase the scope and reporting frequency of plant metal production. A striking example of such scope expansion is the Minas-Rio iron ore project in Brazil (Anglo American, 2013) having a pipeline route of 525 km between the concentrator and the concentrate shipping area. Several other mining companies have also set an increased frequency for their key performance indicators thereby shrinking the metal accounting period from monthly to weekly and daily. Those concurrent trends have brought in-process inventory estimation at the forefront of metal accounting issues. Indeed, as illustrated in Figure 1, improving trading reactivity requires improvements in production planning which strongly impacts the requirements for reliable metallurgical accounting. Furthermore, practice has shown that boldly ignoring significant in-process inventories or the errors associated with their estimation can lead to unreliable metal balances. In other words, since metal balances are the cornerstones of metal accounting, some of the risks associated with important business decisions are linked to errors associated with in-process inventory measurements."

Jan 1, 2014

By Rees J. Llewellyn

High chromium white irons can be formulated to provide required combinations of abrasion and erosion wear resistance, toughness and capability to withstand corrosion attack. As a consequence, they are used widely in casting form throughout the mining/mineral processing industry, particularly as components for slurry pumps and also as mill and crusher liners, laminated wear plates in chutes and hoppers and in valves, nozzles and cyclones. Traditional cast chromium molybdenum and high chromium white irons for wear applications are covered in ASTM A532 Classes 11 and 111 and are also available as comparable proprietary alloys. They rely on heat-treated, hypoeutectic microstructures containing a high volume fraction of very hard eutectic/secondary metal carbides and martensite to provide extremely high wear resistance. The ability to increase the carbide volume fraction and hence achieve higher wear resistance, has been limited because of severe casting difficulties encountered when carbon and chromium contents are raised and hypereutectic alloys with structures also containing coarse acicular primary metal carbides are produced. The limitation has been overcome and cast hypereutectic chromium white iron pump components have established themselves in a wide variety of mineral processing service applications. Comparisons will be made between the microstructures and wear test performance data for the various alloy types and details will be provided of the service performance improvements that have been achieved through the use of hypereutectic chromium white irons.

May 1, 2004

By Christopher P. O?Connor

Stereolithography is a well known rapid prototyping technique in the manufacturing sector. Essentially it is a three dimensional printing process that produces plastic prototype parts from standard CAD files. At present, Canadian mining companies are not fully aware of the potential of Rapid Prototyping Techniques (RPTs) for their production and mine design systems. Mining engineers and geologists attempt to visualize and understand the characteristics and layouts of orebodies on computer models and in cases where it is decided to develop physical models, the process is time consuming based on simplified constructions. Rapid prototyping techniques (RPTs) such as stereolithography can facilitate engineers and geologists to quickly and with satisfactory accuracy to visualize sections of orebodies and evaluate alternative ore extraction techniques using 3D solid models. The research discussed in this paper is carried out by the Laurentian University Mining Automation Laboratory (LUMAL) in collaboration with the Department of Mines Research of Inco Limited and the Integrated Manufacturing Technologies Institute (IMTI) of the National Research Council of Canada. The main objective with this research is to evaluate the applicability of state-of-the-art RPTs (e.g. stereolithography) to underground hard rock mining systems. RPTs can play a significant role in accelerating the design and development process of mining systems.

May 1, 2002

By Ben Bradshaw

Context ? Community engagement has become an increasingly significant and challenging part of mineral exploration and mine development; indeed, opposition from communities proximate to a proposed mine site has been known to derail technologically- and financially-sound projects. ? These cases suggest that mining firms need to better understand how to engage constructively with local communities in the pursuit of their claims. ? While a range of publications exist promoting various community engagement strategies, these recommendations, when viewed as a whole, are disjointed and largely untested in real development contexts. Aims of Presentation 1. Synthesize industry, NGO, government and academic publications focused on community engagement best practice in order to highlight those practices that are most commonly recommended. 2. Review the (Canadian) mining industry?s experience with some of these strategies based on existing case material in order to identify the extent to which commonly prescribed strategies are used and validated in practice.

May 1, 2010

By M. W. Lewis, J. Werner

Fluctuating metal prices, declining head grade, and increased operational costs are forcing many open pit mining companies to look to their balance sheets for significant cost reductions in order to remain competitive. Maintenance continues to represent a significant proportion of the total operating costs in the mining industry. Compared with the other major cost components of the mining process, very little effort has gone into maintenance optimization. The potential payoff from maintenance optimization on the cash cost of the commodity is enormous. A large percentage of these costs are incurred in unscheduled maintenance events, which typically cause serious disruptions to the production process. These maintenance-induced production losses can be a significant contributor to the overall operating costs. A structured proactive maintenance approach using the latest advances in technology can achieve dramatic cost reductions and productivity improvements. Remote condition monitoring systems are becoming increasingly commonplace and have the potential to identify problems prior to failure. Detection of equipment degradation prior to failure will enable repairs to be scheduled thereby reducing costs and interruptions to production. Remote condition monitoring technology has evolved rapidly in recent years, with a host of new tools becoming available to assist mine operators in improving their maintenance operations. These tools have capabilities such as remote real-time vital signs and performance monitoring, alarm/event handling, trend analysis, and maintenance workflow management. When these monitoring tools are used in conjunction with a mine management system, the vital signs data can be integrated and associated with maintenance history, predictive maintenance data, operational information, and geographical information. This integrated approach to the management of vital maintenance data will help shift the mobile equipment maintenance paradigm from reactive to proactive. This paper will introduce a proactive approach to the management of the maintenance process and the tools required to facilitate this process.

Jan 1, 2005

By Andy Fortin, Jeet Basi, Simon Hille

Goldcorp’s Eleonore mine is situated in Ell Lake area in the northeastern part of the Opinaca reservoir in the James Bay region of Quebec. The design of the 7000 t/d process plant includes crushing, grinding, bulk sulphide flotation, separate concentrate and tails leaching and detoxification circuits and residue handling. Detoxified flotation tails are thickened and filtered. A portion of the filtered tails are blended with the thickened detoxified sulphide concentration for paste backfill. The remaining filtered tails are trucked to the waste management facility. This presentation will describe the challenges faced with the commissioning and subsequent ramp-up of the flotation tails filter plant and the successes achieved by the multi-discipline team at Eleonore.

Jan 1, 2016

By L. D. Smith

Net Present Value Impact of Discount Rate The Discounted Cash Flow (DCF) method of valuations is universally used and accepted. The main criticism of the method is that it does not recognize the value of projects long life projects. This can be seen in the preceding graph where the present value of cash flows in later years are small for discount rates over about 10%. This graph covers a project that has a 25 year operating life. It is clear from the low height of the NPV bars at 10% and 15% in the last years of the project that an additional 25 years would add almost no value to total project NPV. As an example of this effect, an colleague undertook the evaluation of a pulp and paper project. The plant could be justified, but it was not possible to justify planting the trees as they took too long to grow and so had not appreciable NPV. The plant had to purchase wood to feed the plant.

May 1, 2013