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A variety of environmental financial assurance instruments are in use across the globe. This paper reviews some of the more common forms currently used in New Zealand, Canada, USA and Australia. In order to be effective, the form of assurance instrument selected needs to be aligned with a countryÆs specific environmental objectives, geography and political climates and also allow for a healthy investment climate. Industry and Government both have a strong interest in ensuring financial assurance criteria meet these objectives.   Recently Golder Associates have been involved in financial assurance assessments for various mining and quarrying companies across the South Island. Multiple stakeholders and regulatory agencies can make the setting of effective and fair financial assurance criteria a complex exercise for both regulatory agencies and industry.  The author relates experience gained in assessing financial assurance under current New Zealand legislation (RMA, 1991), effectively dealing with issues such as ôdouble bondingö and overviews potential approaches to dealing with transitional issues for historic and existing operating mine sites.

Jan 1, 2006

By C. M. Jones

Cyprus Sierrita Corp. has developed a training program that has led to several significant improvements in safety performance and productivity. Truck productivity has increased 6% as measured by truck cycle times. Increased skill levels and awareness on the part of the mine's operators are due to the new training effort. Costs associated with productivity training have been about $185,300. This includes program development and execution costs, as well as lost productivity during the training itself. These costs are offset by $1.9 million in savings attributable to the increased skill levels of technicians due to the training effort. Cyprus Sierrita is a subsidiary of Cyprus Amax of Englewood, CO. The company operates a copper and molybdenum mining and processing facility south of Tucson, AZ, near the town of Green Valley. The Cyprus Sierrita operation produces about 109 kt/a (240 million lbs/ year) of copper, 11.3 kt/a (25 million lbs/year) of molybdenum, 31.1 t/a (1 million oz/year) of silver and 1.8 t/a (4,000 lbs/year) of rhenium. The opera¬tion employs 770 people at the site. About 200 of these employees work in the mine operations. Mining at Sierrita uses standard open-pit techniques. Crews of 43 people rotate on 12-hour shifts. Hourly technicians are nonunion and do not use rigid job classifications to define pay. Rather, the system is designed to pay employees for what they are able to do. Administering this effort requires that training opportunities are provided to those people who desire them. Successful training opportunities al¬low people to gain skills. The more skills an employee can demonstrate, the higher his or her "tech level." A technician's pay is commensurate with his or her tech level. Much of Sierrita's training in past years concentrated on building basic

Jan 1, 1998

By C. M. Jones

The training program developed at Sierrita over the last twelve months has led to several significant improvements in both safety performance and productivity. Our most easily quantified results have been in truck productivity, where we have also experienced a 6% decrease in truck cycle times. We feel this is due to increased skill levels and awareness on the part of our operators due to our new training effort. The cycle time improvement has resulted in an increase in Truck productivity of 6%. Costs associated with productivity training have been $160,300. This includes program development and execution costs, as well as lost productivity during the training itself. These costs are offset by $1,400,000 in savings directly attributable to the increased skill levels of our technicians due to our training effort. As such, this represents a solid, high return investment at Sierrita.

Jan 1, 1998

By John L. Halls

INTRODUCTION In this section, it is assumed that the reader is an engineer with sufficient training in underground mining work, preferably with budgetary control, to understand the mining methods outlined in other sections of this handbook. The mining-method descriptions are not repeated herein; only sufficient information is provided to enable the reader to comprehend the development of the costs presented. All costs are in 1977 US dollars, except where explicitly stated otherwise. CAPITAL INVESTMENT The capital investment in the underground mining portion of any mining property includes the following: 1) The development of original access involving adits, shafts, declines, etc. It includes the necessary equipment for transporting men, materials, and rock. 2) The purchase of mine equipment including loaders, underground haulage equipment, fans, pumps, electrical distribution, surface facilities associated with the underground mine, etc. 3) Sufficient preproduction mine development to assure steadily increasing production after startup. De- pending upon the mining method used, the preproduction development should provide a supply of three months to one year of ore that is developed and is ready to be stoped. Underground development also includes excavations other than shaft stations, loading pockets, sumps, etc., which usually are associated with the means of access and are excavated by the contractor. These excavations could include a crusher cavern, an ore- storage pocket, and underground workshops that may or may not be included by the shaft-sinking contractor. Portions of these could be delayed until after production begins, but it is preferable to complete them during the development phase, so there is no interference with the production buildup. 4) The staff and labor costs for all phases from inception through final production. 5) The provision of mine-surface equipment and facilities strictly applicable to the underground portion of the operation. The required facilities include a changehouse with a lamp room, a first-aid station, compressors, an electrical substation, workshops, a ware- house, water pipelines to the concentrator, water storage tanks, explosive storage, etc. A concrete-batch plant, a sand-fill plant, and boilers for heating may be required. 6) Other direct and indirect costs. 7) Engineering, design, and procurement costs. 8) Contingency allocations. 9) Contractor's fees, startup costs, and owner's costs. Original Access As part of a study for the US Bureau of Mines, Dravo Corp. conducted an extensive literature research survey covering underground operations in the United States between 1963 and 1973. Table 1 is compiled from the section of that study pertaining to the types of access to underground mines. Table 1 does not include distances attributable to the deepening of existing shafts, nor does it include shafts bored by raise drills or downhole machines that need existing underground workings for the disposal of the cuttings. During the period under review in the report ( 1963 through 1973). concrete-lined circular vertical shafts were the predominant means of providing the first access to a new underground mine; these shafts accounted for 80% of the original access in terms of the number of accesses completed, and 75% in terms of the total verti- cal linear distances. The inside diameters of the conventional circular shafts ranged from 3.7 to 7.0 m (12 to 23 ft). Most (72% ) of these conventional shafts were for production,

Jan 1, 1982

By D. Drymonitis, G. Gialoglou

"Placer gold mineralizations have been observed in the north-eastern parts of Greece. Some of them have been at first evaluated to be of special interest so, exploration campaigns have been designed and carried out. Among the other exploration techniques applied on the sites of interest, drilling was the one to give the detailed information and data for the evaluation of the deposits. Having collected the data from trenching and two consecutive drilling campaigns, they were processed geostatistically to estimate the ore reserves and therefore the economic interest of the deposits. The latter was done by using exploitability indices, which would give a rough idea whether the deposits were economically feasible. A small number of such deposits have been spotted in the area and have been explored and evaluated as above. The present paper deals with the most important of them, giving all the process followed and the results derived from the exploration carried out."

Jan 1, 2005

By Xu C

This paper describes the structure and operation of an interacth.. computer program for mineral industry financial analysis and production planning. It includes comprehensive risk analysis with correlated variables and optimal production scheduling using Lane's balancing cut-off grades and the general dynamic programming approach.

Jan 1, 1995

By Sarah R. Hindle

Carbon capture and storage has jumped to the forefront of climate change mitigation efforts for its capacity to sequester large amounts of carbon. Mineral carbonation is one prominent option, mimicking and accelerating the natural weathering process of certain silicate minerals. This has the ability to produce stable carbonate minerals that can store carbon on geologic time scales with little to no risk of leakage. Commercialization of this process is ideally suited for integration into the proposed mining operations at the Turnagain Nickel site in Northern BC. This is due to the abundant supply of suitable ultramafic feedstock material, as well as the economic benefit of sharing costs while reducing net emissions and bringing value to otherwise valueless and costly waste rock. While studies have shown this process to be technologically viable on a laboratory scale, assessing the economic and financial viability of such a process on an industrial scale is necessary. An evaluation of the financial feasibility of integrating mineral carbonation into the mining cycle at Turnagain under a proposed cap-and-trade system is presented.

May 1, 2010

By Hugh Douglas

This paper discusses the financial health of the U.S. mining industry and its ability to meet the future raw material requirements of this country in the context of resource independence. The title of this paper begs several questions, and three will be raised here. The answers to them will form the basis for discussion. The three questions are: What does one mean by resource independence. How is the U.S. mining industry defined. How is financial health measured.

Jan 1, 1977

In constructing a financial model of a project significant effort is expended on capital and operating cost estimation, commodity price forecasts, and choice of discount rates while uncertainty in the primary input, the reserve, is often completely overlooked. The aim of this paper is to highlight the impact of uncertainty in the resource/reserve estimation process on the assessment of the financial performance of a project. Four qualitative processes have an impact on resource/reserve uncertainty. These stages are: 1.Ore definition 2.Geological interpretation 3.Resource estimation 4.Ore reserve estimation and mine planning. Each stage contains a number of tasks that may be considered as key performance activities (KPAs). Optimizing the manner in which these KPAs are completed can remove a great deal of uncertainty and error from the resource/reserve process. Examination of these KPAs within a company can also provide an insight to the quality of the information underlying the project. This will allow the company to identify any shortcomings in the data and to assess the resulting risks (Gilfillan, 1998). A hypothetical financial model based on a gold operation has been used to estimate the potential effect of resource/reserve uncertainty on revenue. Monte Carlo simulation has been employed to simulate a number of hypothetical scenarios: 1.a base case scenario which assumes no major errors or biases, but contains realistic margins for uncertainty that would exist in any project where work is being completed to the limit of best endeavours 2.a poor sampling scenario which assumes poor sampling practice and lack of understanding of sample preparation 3.a poor resource estimation scenario which assumes poor modelling and inappropriate choice of interpolation technique, and 4. a ?typical? scenario which represents a project where the majority of KPAs are not performed as best as they could be. The results show that realistic uncertainty ranges can generate changes in the estimate of potential revenue of plus or minus 30%.Therefore, it is important to allow for errors in these processes in any financial analysis or feasibility study. It is recommended that, when building a financial model, are view of relevant resource/reserve KPAs be carried out and appropriate ranges for uncertainty be applied to provide a range of potential outcomes. These outcomes can then be factored into the detailed cash flow analysis in order to ensure that technical uncertainty is built into financial decisions.

Jan 1, 1999

In-stope long hole drilling (face parallel drilling) is a new technology currently being applied to shallow dipping (

Jan 1, 2003

By S G. Gemell

"The financial model is an integral component of any project evaluation based on mineral resources, ore reserves and (at least internally) exploration targets. Given the unity of purpose for preparing financial models for project evaluation purposes, the diversity of both format and content of the finalised models is surprising. Many models are prepared by staff or consultants who are comfortable with a particular format that may be used for other purposes, such as budget preparation or financial reporting. It is natural in these situations that the practitioner will take these models and adapt them to the purpose. The end result may or may not succeed in providing a clear, accurate and sufficiently detailed view of the project’s economic viability.When preparing a model, the practitioner should be cognisant of the interpretation and review, or audit, process. The auditor may be a consultant or employee of a bank, potential equity provider or of the project sponsor itself. Depending upon the scale of the project and the level of participation of the entity that the auditor represents, the financial model will be interrogated more or less rigorously. In any event, the end user will require the model to permit easy change of inputs and will wish to confirm that such change is appropriately and thoroughly transmitted throughout.Accordingly, there are some ‘dos and don’ts’ that can be readily applied in the creation of the financial model that will greatly assist the end user, not just in the change of inputs, but also in reviewing the model’s integrity. The less time and effort required by an auditor in this regard is reflected directly in the cost of the review process.CITATION:Gemell, S G, 2016. Financial modelling with the auditor in mind, in Proceedings Project Evaluation 2016, pp 172–180 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By Jr. Winters

The United States continues to be the largest producer and consumer of copper in the world. Table 1 on the following page shows several production statistics for 1974, the most recent year which the non-communist world copper industry might consider a good year, and for 1976 and 1977. In 1974 an estimated 24 percent of the non-communist world's newly mined copper was mined in the United States, and. 87 to 89 percent of that was from the western porphyry coppers. In 1976 U. S. new mine production was down to 22 percent of the non-communist world's newly mined copper, and the percentage of U. S. new mine production supplied by the porphyry coppers had risen to 89 to 91 percent. In 1977 the statistics remained the same as in 1976. U. S. porphyry copper production represented about 65 percent of U. S. refined copper consumption in 1974, rose to 75 percent in 1976, and dropped back to 61 percent in 1977 as imports of foreign copper into the United States began to swell.

Jan 1, 1978

By David M. Koogler

If you are contemplating starting a small coal mining operation there is a good possi¬bility that you can not afford it. If you, have already started, you may be on the road to bankruptcy. If you are a small but well established operator you may be trading dollars, or even dissipating your capital, equipment and other assets. A bleak outlook? Yes! Meant to be discouraging? No! Just a reminder that, with todays costs of doing business, high interest rates, rapidly increasing costs and decreasing sales prices, a small businessman/miner had best watch closely or he will be mired in something worse than a soft bottom - namely a cash and credit shortage, and in too many instances In recent times, bankruptcy. We will not dwell on what happens once you are that far gone, though I could cite a good example. But, let us look at what should be done to avoid such a catastrophe.

Jan 1, 1981

By Warren M

Many Australian tunnelling and mining companies regularly investigate different methods or equipment in an attempt to keep ahead of their competition. Sometimes the result is a new approach or process which wins a tender or provides an advanced solution to a problem.The Australian Government has a policy of encouraging forward thinking among Australian companies and provides a range of incentives. One of these incentives is currently available retrospectively to 1985 - 86, and the registration process is relatively simple with only one form to be completed. Companies who investigate methods of raising productivity could be reimbursed for the costs of the investigation.

Jan 1, 1993

By M. Somppi, D. Weirmeir, Z. Yamak

"Milling operations commonly employ activated carbon to capture complexed gold from lixiviants in leaching processes. As the carbon moves through pipes, pumps, vessels, kilns and other processes in the gold leaching circuit, this consumable may experience losses by various mechanisms like attrition, breakage, and rupturing. Whenever possible, capturing the fine gold-bearing carbon portion of this stream could provide value to milling operations at low capital cost and manageable financial risk. Identifying, testing, and validating the successful payback of a low-tech flocculant system is described. However, the work more closely explores a Monte Carlo risk-based methodology for understanding the potential payback of this project at various confidence levels – an approach that many improvement projects can follow where some level of uncertainty exists.INTRODUCTION Gold milling operations commonly employ activated carbon to adsorb gold from solutions. Normal handling causes the carbon particles from this material to abrade, break, rupture to a size that becomes too small for further use in the process. Operations often concentrate on capturing the fine particles because gold is associated with the carbon and this metal content can be a valuable revenue stream for toll processing. However, the small particle sizes become difficult to separate from the process and can ultimately leave the facility in the waste stream. Hence, operations often place a great deal of care in capturing as much fine carbon as possible by a variety of methods including using screens, settling tanks, and chemical methods. Retrofitting a circuit to capture more carbon fines is common but can expose the operation to financial risk. Approaching this potential improvement by leveraging a Monte Carlo methodology can be effective in understanding the risk and the associated payback of a project at various confidence levels. This method provides a strong framework for capital go-no-go decisions and the structure to validate the potential project success before implementation."

Jan 1, 2019

By Barnett DW

Financial risk analysis provides the tools to examine the uncertainty of capital decisions in new mining ventures. This paper explores the methodology by which financial risks can be studied and quantified. The most commonly used risk evaluation methods, such as sensitivity analysis and discount rate adjustment, are presented as an introduction to a more comprehensive discussion of stochastic methods of discounted cash flow analysis using Monte Carlo sampling. The discussion is illustrated with examples of a stochastic discounted cash flow. The advantages of Monte Carlo sampling in risk analysis are discussed together with its problems, particularly those originating from the correlation amongst the variables that determine the economic output of a mining venture, and the difficulties created by insufficient data, imperfect knowledge and complexity. The paper also surveys the most commonly used software used in risk analysis.

Jan 1, 1994

By José Claro

El texto revisa el proceso de financiamiento de las inversiones en el mineral de hierro. Para ello, se evalúan las condiciones económicas para la producción del hierro, a través de tres términos: la primera, refiere los préstamos otorgados por los gobiernos de países desarrolllados y sus agencias financieras a los países en desarrollo para nuevas producciones mineras. El segundo término señala los préstamos de futuros compradores y el tercer término, están los bancos comerciales, cuyos préstamos agilizan su utilización en una producción minera. Paralelamente a estas condiciones, se desarrolla la modalidad más común de financiamiento, donde la misma empresa minera o sus accionistas intervienen en la capitalización de la empresa. Esta modalidad permite recuperar la inversión a través del pago de préstamos e intereses, en lugar de recibir las utilidades en forma de dividendos sujetos a impuestos. Como consecuencia de ello, el flujo financiero puede utilizarse para recuperar la inversión, afectando la estructura del precio del cobre ya que hace necesario que la venta del producto genere recursos financieros suficientes para cumplir los compromisos.

Nov 20, 1969

By José Claro

El presente texto señala algunos aspectos respecto al financiamiento de inversiones en la minería. Para ello, se revisa las condiciones adecuadas para la comercialización de su producto a través de tres premisas: La primera, refiere los préstamos otorgados por los gobiernos de países desarrollados y sus agencias financieras para nuevas producciones mineras; la segunda, considera los préstamos de futuros compradores como una fuente importante de financiamiento y la tercera, refiere a los bancos comerciales, cuyos préstamos permiten mayor agilidad en su utilización, aunque es cada vez más dificil encontrarlos a tipos de interés y plazos adecuados. Asimismo, otra modalidad frecuente en el caso de financiamiento, es que la misma empresa minera o sus accionistas intervengan en la capitalización de la nueva empresa minera a través de préstamos o cuasi capital, de forma que se recupere la inversión a través del pago de préstamos e intereses, en lugar de recibir las utilidades en forma de dividendos sujetos a impuestos.

Mar 1, 1971

By D. A. Karvonen

Although the economy in the Province of Saskatchewan has historically been agriculturally oriented, a major new source of wealth has been realized through natural resources such as petroleum and natural gas, coal and uranium and since the 1960's - potash. Potash or potassium chloride, in the form in which it is presently produced in Saskatchewan is used primarily as fertilizer, a source of potassium, one of three essential elements required for healthy plant growth with about 5 percent of production sold to the chemical industry for use in such products as soap and liquid detergent, glass and ceramics, textiles and some pharmaceuticals. Saskatchewan is estimated to have approximately 40 percent of known world potash reserves and its ten active mines account for some 25% of annual world production. The development of this resource was recognized to be important to the development of Saskathcewan. In an effort to guarantee a fair and lasting economic benefit to the Province of Saskatchewan the Potash Corporation of Saskatchewan (PCS) was created on February 4, 1975 through an Order-in-Council under the Crown Corporation's Act and later on April 1, 1976, the Potash Corporation Act provided for its continuation. PCS was given the mandate to acquire ownership of a significant portion of the potash mining capacity in Saskatchewan and to establish an organization capable of operating the facilities, marketing the product and conducting all of the other activities necessary for a successful corporation competing in the world potash industry.

Jan 1, 1983

By James H. Boettcher

In the second quarter of 1979, ASL Inc. inquired whether Crocker National Bank ("CNB") would provide $4 million in term loan financing to help ASL acquire the outstanding shares of the S&S Coal Company in West Virginia. ASL had, prior to approaching CNB, sought financing with the assistance of a financial advisor from a number of commercial banks without success. A summary of the initial terms requested by ASL is shown in Table I compared with the actual terms the transaction closed with. It is not difficult to note that the two sets of terms differ significantly. This is often the case when financing requests based on the expectations and vision of a mine developer are juxtaposed with more pragmatic requirements of a commercial bank. The "art" and fun of structuring financing plans for mining ventures (highly leveraged acquisitions or grass roots) comes in working with mine developers to arrive at a final financial structure that meets their objectives and constraints as well as those of the bank or other financial institution providing much of the financing. This article briefly describes the process we went through with ASL beginning with the terms they requested initially and ending with the ones on which the transaction was finally closed.

Jan 1, 1981