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By A Chandra, P Guj

Only a few complex real options can be valued using closed-form equations, such as the Black and Scholes formula, because these algorithms are restrictive and prevent the construction of practical project evaluation models. Although a binomial lattice method paired with the ærisk-neutral probabilityÆ provides an easier and flexible modelling of exploration and mining projects, it has limitations when projects are complex, long-lived and influenced by the interplay of various market and private uncertainties. In order to overcome these limitations, modern decision tree software using dynamic programming capability can be used for real option valuations. This is a powerful computational tool in which the impact of various sources of uncertainties can be differentiated, so that the optimal decision path can be explicitly displayed visually. There has been significant academic controversy surrounding whether different real option (RO) valuation methods would lead to different real option values (ROV). This paper, using a realistic copper mining example, demonstrates that as long as the same degree of subjectivity and consistency are used in different real option valuation methods, they yield the same result. This conclusion is valid irrespective of whether the cash flow volatility generated by various sources of uncertainties is handled in an aggregated or in an explicit and differentiated manner. This paper compares two choices for an investor either to æbuy now and developÆ a project or to enter into a ætwo-year option to purchaseÆ after the proponents have developed it. It also shows how significantly different net after-tax operating cash flows may be generated by these different choices on the same underlying asset represented by the project. This is due to the difference in the amount and timing of the relevant capital investments affecting the depreciation and amortisation charges and as a consequence, the income tax paid. CITATION:Guj, P and Chandra, A, 2012. Real option valuation of mineral exploration/mining projects using decision trees - Differentiating market risk from private risk, in Proceedings Project Evaluation 2012 , pp 177-188 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 24, 2012

By Wilson A. F

The use of stable isotopic measurements as a technique for elucidating the origin and history of the water in hydrothermal fluids is relatively new. Recent studies have emphasized the importance of meteoric water in the formation of many hydrothermal ore deposits including many epithermal gold-base metal deposits which occur in faulted volcanic terrane. Other vein-type gold ores are be- lieved to have formed from fluids of magmatic or metamorphic origin and exhibit characteri stic 6180 values. These values also give information regarding temperatures and the degree of equilibrium. Preliminary oxygen data for some important gold deposits of eastern Australia are evaluated in the con- text of styles of mineralization.

Jan 1, 1980

By M A. Etheridge

The evolution of economic precious metal and copper-gold deposits in high-level igneous terranes is dependent on very efficient fluid focussing. This is most readily achieved by contemporaneous deformation, igneous intrusion and hydrothermal activity. Mineralisation in these environments generally occurs in fault and fault-vein arrays developed in the cover sedimentary and volcanics sequences above older regional scale fault systems. Such reactivated fault systems are particularly prone to developing tile complex fracture arrays, extreme local dilation and dramatic increases in permeability that are necessary to efficiently focus hydrothermal fluid and produce large mineral deposits. The arc systems of tilePacific rim are typically structurally and tectonically complex. At any given period in the evolution of an arc system, it may be dominated by extensional, compressional or strike-slip deformation. Indeed, it is common for the tectonic environment to change repeatedly through the development of a single arc segment. As a result, structures formed in one tectonic environment are commonly complexly reactivated in quite different environments later in arc evolution. These complexly reactivated structures have greater potential to localise extreme fracturing, dilation and fluid flux than primary structures. Application of this knowledge to practical exploration requires an understanding of the primary geometry of the controlling fault systems, the fault movements during reactivation, intrusion and mineralisation, and the consequent location and geometry of dilational sites. Simple 2D lineament analysis and targeting on lineament intersections does not suffice. Chemical processes that results from structurally focussed fluid flow may also contribute to permeability enhancement and further enhance fluid flux. Two main types of chemical feedback are important. The first involves selective dissolution of minerals during alteration and tile consequent production of increased porosity and permeability. The second occurs where alteration changes the mechanical properties of tile rock mass, especially where it leads to a greater propensity for fracture (eg by silification). In near-surface environments (< ~1 km), geomorphic processes complement fault systems in focussing fluid flow to develop sub-horizontal bodies of mineralisation, such as the giant Ladolam gold deposit (>42 million ounces of gold).   Along with classification schemes which stress crustal level, host rocks and alteration assemblages, the styles of high level 'epithermal' and reated deposits must also be considered in respect of their controlling co-active fault structures. Such structural understanding, combined with understanding of tile chemical processes involved (eg host rock reactivity), provides a major tool for exploration particularly in terrains obscured by deep weathering. Geological interpretation based on integration of field mapping with magnetic, radiometric and other remotely sensed imagery provides a powerful complementary tool to the traditional geochemical and geophysical targeting techniques. Timely and effective geological input is capable of reducing exploration risk and providing a more cost-effective basis for drilling and development. Examples of deposits associated with fault reactivation in extensional, compressional and strike-slip settings within arc systems are discussed in this context.

Jan 1, 1995

BHP Steel International's Newcastle blast. furnaces have operated since their caimissioning on cake based on local low rank coals. In the early 1960's Newcastle coke was believed to be the weakest in the world. Newcastle coke now supports a blast furnace operation with a productivity of 2.1 t/d.rn IV, a fuel rate of 490 kg/t and a coke rate of 415 kg/t. This coke is nuudv from blonds of lcxni and southern Sydney basin coals with blend Ro nex in the range 0.94 - 1.01. Blast furnace performance in periods of differing coal blends is conjured. The relationship between coal aril coke quality indices and blast. fin-mice perforrnarcc.e is discussed as well as the relevance of conventional coke tests. New BHP coke tests are referred to.

Jan 1, 1987

By Thomas L, Archibald N

The use of oxygen in the Mount Percy cyanidation circuit was investigated, with the aim of improving recovery. Preliminary batch and plant testwork justified a plant trial, and it was demonstrated that the use of oxygen reduced gold leachable from plant tailings by 12 per cent, and was economically viable. Oxygen is now in permanent use. Other benefits of oxygen in leaching were not proven. There were no savings on compressed air costs and no measurable reduction in cyanide consumption, although HCN levels in the atmosphere above the tanks declined. The possibility exists that more efficient use of compressed air for tank aeration could have achieved similar recovery gains.

Jan 1, 1992

Mathematical modelling of continuous rotary vacuum filtration has been limited by the wide range of variables and the absence of connecting equations linking the variables. The filter type and size, mechanical design and predicted performance are generally determined by laboratory leaf tests on representative samples of slurry, or plant samples from an operating filter. A model has been developed which includes the major process variables such as slurry feed rate and concentration, cake thickness, wash water and air flow rates, to predict the filter production throughput, cake moisture and residual solubles. Where possible the model incorporates well established equations relating form filtration, washing and drying rates of the filter cake. Where an equation has not been formulated, standard curve fitting programs have been used to establish an algorithm. The theoretical equations and the derived algorithms are defined in the text. A major feature of the model is that operators, metallurgists, process, mechanical and instrumentation engineers become more aware of the interaction of process variables, the principles of the equipment design and its limitations when operating at peak performance. The model has specific application in the alumina industry where a high moisture content of the filter cake can increase chemical losses and energy costs, and in the coal industry where overseas companies are insisting on lower export coal moistures.

Jan 1, 1989

By B Huls, B E. Smith, I Brake, M Yu

A brief outline of some of the pioneering events in the development of flotation technology, which originated in Broken Hill at the start of the 1900s, is presented. The development of the original Potter-Delprat process, the introduction of oils to generate froth flotation and the achievement of selective flotation processing are described, all focussed on solving challenges with the Broken Hill Pb-Ag-Zn ores. Some recent initiatives in flotation at BHP Billiton operations are also outlined, covering coal, copper, lead-silver-zinc and diamonds. Some views are offered on the characteristics of innovation in flotation and on possible trends into the future.

Jan 1, 2005

An integrated computer system (the Short Term Mine Management System) has recently been developed by B.H.P. Steel Long Products Division in Whyalla, South Australia for use in their open pit iron ore mines.The system incorporates blast design, comprehensive blasthole data handling, grade coilrol, stockpile scheduling and management and reconciliation within a single, user friendly computer package. The blast design system allows the blasting engineer to design the layout of holes for a production blast using geological information projected from the bench above to aid in appropriate blasthole positioniog in particular rock types. The grade control system allows mining blocks to be designed and evaluated from blasthole information using interactive graphics processes. The handling, storage and reporting of blasthole survey, assay and geological logging data forms an integral part of this system. Stockpiles can be constructed from a number of mining blocks to reach a specified target grade using the stockpile management system. Although not yet integrated, the reconciliation system will reconcile stockpiles back to mining blocks and to the geological model.

Jan 1, 1990

By Moore J

Gunpowder Copper Ltd is using in-situ leaching to extract copper from the Mammoth sulphide ore deposit in north-west Queensland. To increase metal recovery, ore is fragmented using conventional underground longhole drilling and blasting techniques. Although the upper levels of the orebody had previously been mined by open cut and underground methods, significant reserves of copper existed around old workings. To safely and economically recover this resource, a decision was made to fire the remaining pillars in the upper part of the mine by a single 1.37 million tonne mass blast in February 1992.This paper records the planning, design, and implementation of the Mammoth mass blast. Geological and geotechnical aspects are summarised, to explain the reasons for such a large blast. Drilling, charging and blast initiation are discussed in detail, to show how standard equipment and products were applied to a unique task.

Jan 1, 1992

Epicentres of recent shallow earthquakes in the region (3-12¦S, 126-150`E) were plotted to identify the various plate boundaries in the region, in particular the southernmost one marking the northern edge of the Australian plate. New and published fault plane solutions were examined to determine the style of faulting and state of stress along the Australian plate boundary. From east to west the boundary is first a subduction zone along the Solomon Islands, then a spreading centre across the Solomon Sea, a zone of compression and left lateral strike slip along the Papua Peninsula, almost pure thrusting across the centre of New Guinea and lastly left lateral strike silo through Irian Taya to the outer Banda Arc. The principal stress is very consistent, trending NW to NNW in a near horizontal plane, from the triple junction of the Pacific, Solomon Sea and Australian plates in the east to the Banda Sea in the west. Only along southern Solomon Sea plate margin which is a divergent boundary, is the stress different in type and direction.

Jan 1, 1987

By Flann R. C

A small modification to current industrial practice should lead to better nickel powders for use in alloying, electroplating, and powder metallurgy. Nickel powder compacts sold for alloying are not always suitable for electroplating applications, since some presently used commercial powders will expand on sintering. Further, such nickel powders are unsuitable for use in the production of powder metal parts, because of expansion during heating of the near-net-shape preforms. Research in these laboratories has enabled the elimination of expansion, and led to techniques for the production of compacts suitable, in particular, for commercial use in both alloying and electroplating. The techniques include: powder pretreatment, cold pressing and sintering, hot pressing, and hot pressing and sintering. In this way compacts are readily prepared with densities of at least 93 per cent of solid nickel, and these, when used as anodes in Watts general purpose and bright baths, give both cathode current and plating efficiencies of 90-98 per cent.

Jan 1, 1979

By Hall T. P, Taylor R. N

Fluid flow in a 1:14 scale water model of the shaft and settler of the Kalgoorlie Nickel flash smelter has been investigated by flow visualisation and numerical modelling. Detailed flow fields through the reaction shaft, settling chamber and uptake are presented for flow rates up to 800 Vm and a number of burner configurations. The predicted flow fields were compared with experimental data obtained from streak photographs and video recordings. The effects of cessation of flow through individual burners and changes in shaft dimensions were also Investigated.

Jan 1, 1992

By C Tukel

Copper sulfate is traditionally used to activate various types of sulfide minerals. The list of users includes Falconbridge Sudbury operations, where copper sulfate solution is added to the pyrrhotite/pentlandite middlings at the scavenging stage. Results from some batch tests reported in the literature suggested that copper activation is helpful for the improvement of pentlandite recovery, especially in the difficult to float fine particle range. Any improvement in pentlandite recovery is important since it is the main nickel bearing sulfide mineral. The impact of copper sulfate for this function has been investigated. Since the focus of current investigation was the flotation behaviour of minerals at the scavenger stage, rougher flotation was kept as constant as possible at two different weight recoveries, namely 13.2 per cent and 15.5 per cent that is relevant to industrial practice. Samples taken during batch testing were extracted using DETA and flotation products from selected tests were analysed to determine the recovery by size behaviour in relation to the use of copper sulfate. Results provide significant evidence that the addition of copper sulfate to these middlings does not yield greater nickel recovery, either on an overall or specific particle size basis. It is concluded that copper sulfate is wasted in the process and that self activation behaviour of the ore at a slightly reduced pH is sufficiently significant to maintain the scavenger recovery of pyrrhotite and pentlandite at desirable levels. Results obtained from limited circuit trials have shown supporting evidence for this conclusion.

Jan 1, 2005

By H Beucher

The uranium grade in roll front deposits is the result of successive processes that can be summarised in two steps. First a sedimentary phase, which gives the deposit support, then an oxidation-reduction phenomenon, which leads to the uranium deposit itself. In order to simulate such a deposit, it is important to mimic these different phases. The final aim of such a study is to localise the uranium itself and to reproduce the internal heterogeneity of the orebody in order to simulate the recovery process. The idea in this paper is not to reproduce a genetic approach but to consider the final image of the deposit. Three approaches are proposed. The first one consists of simulating the facies of the sedimentary deposit. The second approach reproduces the distribution of facies resulting from oxidation phenomenon (reduced or oxidised facies). The third approach consists of simulating the mineralisation at the interface of reduced and oxidised areas using the definition of a new data set determined by the grade values. At the end of each approach, the uranium grade could be simulated facies by facies according to the corresponding distribution characteristics. The plurigaussian method dedicated to random set simulations is well-suited for the facies simulations of deposits resulting from several sedimentary processes whether correlated or not. In this paper, the benefit of this method is demonstrated in an actual case study.

Jan 1, 2006

By Burman B. C

This paper describes studies into two particular aspects of the Lochiel deposit which formed part of feasibility level geot2chnical and hydrogeological investigations for proposed open cut mine development. The two aspects were depressurisation of thick beds of silt located through the profile and the determination of characteristics and origins of soil structure and their effect on pit stability. The studies were very detailed and multi disciplinary and highlight the integration of geology, geotechnics, hydrogeology and mining that is required for mine development studies. It is considered that as more marginal deposits are developed throughout the world the demands for efficient economic mining together with in- creasing scales of operation will require simi- lar types of studies. As such the studies pre- sented herein are likely to be a forerunner to a,emerging trend for development of open pit mines in difficult ground and water conditions.

Jan 1, 1986

Filter aids are currently used in many industries to increase filtrate clarity and filtration rates. In other industries filtration could be improved if accept- able filter aids could be obtained cheaply. The present paper describes a simple thermal process for making filter aids from coal, outlines the effects of coal properties and major operating variables, and discusses the properties of satisfactory products. Several possible variations in reactor design have been used experimentally, involving fluidized beds of carbon or inert material, reaction of the particles while entrained in air, and a combination of entrainment and fluidization. The limits imposed on product yields by the composition of the parent coal are considered in relation to a range of Australian coals and one New Zealand coal; and the effects of temperature, residence time, and reactant flow rates have been studied in relation to product yields and characteristics.

Jan 1, 1969

This paper examines the latest advances in mine drive and motor systems. In the last decade, the drive technology employed for large mine winders has migrated from the traditional dc technology to ac motors with cyclo convertor drives. Recent advances in pulse width modulation (PWM) drives have resulted in these being applied to large winder drives. While having many advantages for the winder system, the PWM drive must be carefully designed to ensure long-term reliable operation. When combined with induction motor technology, the PWM drive presents the ideal solution for winder drives. This paper examines the factors in choosing a suitable PWM drive for a winder installation. Factors under consideration include: winder duty cycle, drive rating restrictions, choice of power semiconductor device, cooling, and low speed operation.The cage induction motor is the motor of choice for large winder drives and has a number of advantages over the synchronous motor. The induction motor is ideally suited to integrated winder applications where the motor is built inside the friction drum, as installed at WMCÆs Olympic Dam site. The challenges of integrating the induction motor into the friction drum will be detailed, including: assembly, ventilation, air gap adjustment, and position sensors.

Jan 1, 2005

By P Bonniwell

As a part of the Newcrest, Telfer Expansion Project, a consortium of Australian, Canadian and South African Mining Contractors in joint venture have been contracted to develop the hoisting shaft. The parties namely; Byrnecut Mining Pty Ltd, Murray and Roberts RUC and Thyssen Mining Construction of Canada Ltd have combined their individual expertise to excavate the shaft. There is a particular emphasis on the use of proven shaft sinking techniques from North America and in particular integrating electric hydraulic drilling equipment and personnel from the Canadian Mining industry. The Telfer hoist shaft when completed will have a finished diameter of 7.1 metres and extend to a depth of 1170 metres below the collar. The shaft will be fully concrete lined and will later be equipped for hoisting ore from the Telfer deeps at a rate of five million tonnes per annum. The shaft when completed will be the largest shaft ever completed in Australia on a volumetric basis. This paper will examine the technical aspects of the shaft sink, as well as exploring the integration of personnel and equipment from the frozen prairies of Saskatchewan, Canada into an operation in the Great Sandy Desert of Western Australia. What are the spin-off benefits for the development of other shafts within Australia?

Jan 1, 2005

My forebears migrated to South Australia in the 1830s, 1840s and 1850s. All of them were literate but, because they moved about South Australia looking for work, family papers have become scat- tered and I am left with a few fragments. Some years ago I was intrigued to find among my fath- er's books a frontispiece in an old Anglican Book of Lessons. As can be seen Joseph, a mining smith, was also a Freemason. Thus my interest was aroused. I know some- thing of modern day mining communities in South Australia and wondered what they were like 100 or more years ago.

Jan 1, 1987

By A T. Owen, F A. Benn, J D. Swift, D M. Labbett, A F. Grabsch

The AMIRA P266 æImproving Thickener TechnologyÆ series of projects has sought to provide a firm scientific basis for feedwell and thickener design, a requirement as pressures on water usage in the minerals industry increase. While advanced computational fluid dynamics modelling of feedwell processes has generated the most obvious and successful applications to improving the performance of operating units, such outcomes have drawn heavily on parallel studies into flocculation fundamentals. Central to this has been the development of a linear pipe reactor system that allows the kinetics of flocculated aggregate growth and rupture to be measured for thickener feeds under turbulent pipe flow conditions. This ensures much greater control of the intensity and duration of applied shear than is possible with conventional flocculation test procedures, offering insights into flocculation processes that would be otherwise hidden in time-averaged measurements.

Jan 1, 2009