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By Jones J. P, Arriagada J, Scherpenisse C. R

A recently-developed model is used as a tool to optimise the design of blasts used to create final walls in large open pit mines. The use of this tool has allowed present blasting practice and proposed designs to be evaluated to predict the likely extent of rock damage behind the final wall. The evaluation of the damage is dependent on the predominant local geology. Modelling of damage using the software allows the potential zones of rock damage to be evaluated under the following criteria: I . the extent of new fractures formed in the intact rock mass; and 2. the distance to which dilation and extension of existing discontinuities and pre-existing fractures will likely occur. The computer model has been used to examine present blasting practice and to estimate the damage induced by final and intermediate rows of blastholes. The results of current practices are presented in a visual form that allows simple comparisons to be made for any proposed changes in design. To confirm the predictions of the modelling, physical measurements are being undertaken at selected mines to quantify damage behind blast patterns, and experimental programs are underway to measure near-field vibration, or shock, levels. The computer modelling software is being used to qualify and improve the design of final rock slopes in large surface mining excavations, and to provide site engineers with well-defined design criteria for consistency in design. The model is seen to be just one of many tools which are being used in large open cut mining operations to gain an improved understanding of blasting and blast control.

Jan 1, 1995

By Whitworth N, Anderson P

New plant has been commissioned to treat off-gases from the Fluo-solids Reactor in the Copper Smelter. The new section of plant was built onto an operating system and commissioned with minimum disruption to production. Under construction is a 270 m tall stack for Lead Smelter gases. Additional items for the Lead Smelter will include a new gas cooler, a central baghouse to replace Sinter Plant wet gas scrubbers, a new exhaust fan on the main baghouse, and ducting of drossing gases to the main baghouse. Emphasis is given to discussing improvements the new plant has made to working conditions, the general environment and increased production capability. Total expenditure in the two smelters is in the order of $25 million.

Jan 1, 1978

By Lorenzen L, Van Der P F

It is the aim of this paper to review recent research in understanding the role of cyanide in the elution of gold. Under conditions of severe pre-treatment (high temperatures and levels of cyanide), the dynamics of elution are determined mainly by the adsorption equilibrium and the flow conditions in the column. When conditions are less favourable for desorption, transport phenomena are rate controlling. The most important sub-processes of elution are the changes in cyanide, potassium and gold concentrations, as well as the change in passivation of the carbon surface. Mathematical models to simulate the various sub-processes are described briefly.The presence of an irreversibly adsorbed species such as AuCN on the carbon is determined mainly by the pH, temperature and the type of carbon. Cyanide in the pre-treatment step will convert the AuCN to reversibly adsorbed Au(CN)2. Competition between cyanide and Au(CN)z for adsorption sites will enhance the elution of gold, but plays a minor role at elevated temperatures. The most important effect of cyanide is its reaction with the functional groups on the carbon to passivate the surface for the adsorption of anionic metal cyanides and thereby promote the elution of gold. This passivation, caused by the degradation of cyanide, is strongly temperature dependent. Free cyanide in the elution step of an AARL elution is of lesser importance than the cyanide in the pre-treatment step. Elution without cyanide is possible only after cold acid washing, and has been proven on plant scale.

Jan 1, 1992

By B Broad

"Establishing ventilation in the early stages of a new mine is an essential step to achieve scheduled outcomes that ultimately drive the financial success of an operation. If the primary ventilation is not in place in time to support a contractorÆs work output, then the ore delivery is likely to be severely impacted. Options to increase ventilation in order to address shortfalls are limited. This in turn can lead to reduced revenue generation at a time when a mine is at its highest capital outlay. This can have implications for any company, but even more for an explorer moving to producer. The ventilation put in place to cover the start-up period is also unlikely to cover any extended or increased load required to meet schedule delays.The following paper examines two issues in relation to ventilation with a focus on small to medium projects where the company is establishing a mine using a mining contractor. The issues being: potential impacts on the contract and tender process when using a mining contractor key mine design considerations, such as æcrunch timeÆ, as they interact with ventilation achieving a successful ramp up.A recommendation is made for higher levels of detail around secondary ventilation leading up to the primary fan installation. The information should be included as part of the tendering process and preliminary project execution planning. Understanding the æcrunch timeÆ concept can lead to strategies, as well as back up plans, to minimise any negative impact.By understanding key risks around primary ventilation establishment for a new mine, detailed design work can be completed where it is needed most. Value is added by reducing uncertainty and a payback with better contract terms and a more robust ramp up plan. This will improve the economic return for the company and reduce the risk.CITATION:Broad, B, 2013. Contract considerations and other critical ventilation aspects in achieving a new mine ramp up, in Proceedings The Australian Mine Ventilation Conference, pp 207-214 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Jul 1, 2013

By T Purvis, J Calverd, A-K Greve

The Ernest Henry Mining (EHM) underground mine is situated adjacent to the Great Artesian Basin in North Queensland and within a fracture zone. Underground development commenced in February 2008 and has extended to approximately 1000 vertical metres below the surface.Groundwater has been encountered in numerous locations throughout the mine, predominantly on the eastern side of the orebody and often related to fault structures. Most of the groundwater encountered has been managed with conventional pumping systems; however, on occasions large water inflows have been encountered, which have had a significant impact on the planned development of the mine. Some of the intersections encountered had the potential to compromise the mine from a combination of high temperature (over 45°C), high pressure (3500 kPa) and high flows (50–100 L/s).This paper describes three case studies where significant water inflows were encountered and then controlled by the injection of cementitious grout into the rock mass. The case studies are the 1650 mid-shaft heading, the 1325 shaft access decline and the 1625 to 1475 fresh air rise (FAR) raise bore. Each case study includes a brief description of the event that occurred and the grouting equipment and techniques developed to enable mining to continue.The paper also describes the development of a hydrogeological map of the mine, the probe-hole regime used for high-risk headings and the required processes and systems to inject both cementitious grouts and polyurethane resin into the rock mass.CITATION:Purvis, T, Calverd, J and Greve, A-K, 2014. Management of high-pressure groundwater in underground development at Ernest Henry Mine, in Proceedings 12th AusIMM Underground Operators’ Conference 2014 , pp 217–226 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Mar 24, 2014

The South American mining community leads the world in recognition and adoption of the latest grinding mill relining technologies. Clearly this region has recognised the benefits of improved relining performance as a defence against the Global Economic Crisis. Five of the six RUSSELL TWIN 8 Mill Relining Systems, ordered to date, are either operating or being manufactured for South American mine sites. The sixth is for Sino IronÆs Cape Preston Project in Western Australia. This paradigm shift, towards very short relining times, aims at displacing mill relining activities from the critical path of concentrator maintenance shutdown schedules. The first uses of the RUSSELL TWIN 8 Mill Relining System have seen some of the highest semi-autogenous grinding (SAG) mill new liner placement rates ever observed by Russell Mineral Equipment (RME), as would be expected with two, independent Machines working simultaneously in the one mill. The liner replacement rate, averaged over the whole reline is good (27 per cent improvement over single Machine System in the same mill) but short of full potential. This modest result can be attributed to reline crews unfamiliarity with RUSSELL TWIN 8 System operation. This paper compares a sample of conventional (single machine) RME Mill Relining System performance data with one ædouble headÆ mill liner handler by others. Early performance of EscondidaÆs new RUSSELL TWIN 8 System performance is then compared with recent single machine data from Escondida, immediately prior to RUSSELL TWIN 8 commissioning. RME and Escondida look to constantly improving RUSSELL TWIN 8 System performance as full operational familiarity is achieved. The preparation of this paper revealed a need to develop a global industry standard for mill relining data collection. A web based platform to develop data collection templates is also discussed in Appendix 1.

Jan 1, 2009

By R Sinclair, D Landwehr, I Hunter

"The Syama Gold Mine, located in southern Mali, was established in 1990 by Broken Hill Propriety Limited (BHP). The operation began treating oxide, and in 1994 it transitioned to processing hard and refractory ore based on ‘whole-of-ore’ roasting. In 1996, BHP was succeeded by Randgold Resources and the operation ran until 2001, when it was placed into care and maintenance.The Syama ore is classified as a double refractory ore with pyrite occluding the fine grained gold present in the ore and high levels of organic carbon presenting a challenge in terms of preg-robbing behaviour. The ore is extremely competent and this combination of metallurgical features was the main source of metallurgical problems encountered by the previous owners.Resolute Mining Limited (RML) acquired the Syama project in 2004. Following a feasibility study and the development of a revised processing flow sheet the plant was recommissioned in 2008 using a combination of old and new equipment. The revised flow sheet enabled primary sulfide ore to be treated by flotation and roasting of the concentrate to produce a calcine suitable for conventional carbon-in-leach (CIL) processing.Commissioning and ramp up of the plant was a troubled process, with monthly gold production being as low as 3000 oz in 2010. Poor availability of equipment and lower-than-forecast recoveries were the primary contributors.During the last five years, RML has utilised a systematic approach to improve production, focusing on mechanical reliability, metallurgical recovery and process bottlenecks. Modifications to the circuit have been as a result of both innovation and the application of technological improvements. Improvements have been made to the flotation, roasting and CIL circuits and RML has introduced a deslime circuit to treat flotation concentrate, in addition to the very successful commissioning of a new 1 Mt/a oxide circuit in December 2014. These changes have resulted in gold production increasing to more than 20 000 oz per month in 2015.This paper presents the processes, change implementation and outcomes of the modifications made to the sulfide circuit to address the availability and recovery problems.Apart from the expansion of an existing, world-class deposit and discovery of new resources, future improvements on the path to a class-leading gold mine include the continued reduction of the unit cash cost, increase in overall sulfide circuit gold recovery, increased throughput through continued innovation and consistency in the plant’s operation.Citation:Sinclair, R, Hunter, I and Landwehr, D, 2016. Syama Gold Mine - the Journey towards a Class-leading Gold Mine, in Proceedings 13th AusIMM Mill Operators’ Conference 2016, pp 213–224 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Oct 10, 2016

By Menne D. M, Ladyman R

Camel Creek Mine operated by Lynch Mining Pty Ltd is located 65 km west of inghain and 160 kin north west of Townsville in North Queensland. (Figure 1). The Camel Creek gold mineralisation was discovered in mid-1987 in an area previously known for its tin workings. Mining commenced in January 1989 after an oxide reserve of 1.2 million tonnes @ 2.1 g/t gold had been delineated. The first gold pour was in May 1989. The mine developed into a medium sized open cut operation, with full site facilities. The initial mining rate was 500 000 tpa utilising run-of-mine (ROM) heap leaching to recover the gold. By the end of 1990 the wider orehodies were mined and efforts were focused on the narrow orebodies, of width typically less than three metres. Smaller earth moving equipment was employed to selectively mine the narrow orehodies leading to a decrease in the mining rate to 200 000 tpa. The Red Gold deposit (80 000 tonnes « 3.0 g/t to 18 in vertical) was mined in mid-1990 and ore was hauled approximately 8 kin to the Camel Creek heap leach operation. The ore was hauled in a dedicated campaign after being stockpiled. The cost of dedicated ore haulage ensured that only the more exceptional of the remote orebodies could be mined in this manner. The Golden Cup orebody, some 20 km from Camel Creek, was too distant to permit ore haulage. However, this prospect contained sufficient gold (initially 90 000 tonnes @ 3.0 g/t) to warrant the installation of a small mobile adsorption facility. Construction of the second heap leach operation commenced in late-1990. Gold production commenced in early April 1991. Mining of several smaller orebodies remote to the second heap leach facility has been undertaken and further mining is planned. This paper outlines heap leaching practice at Camel Creek Mine and summarises the success of the Golden Cup heap leach.

Jan 1, 1994

The mining of remnant coal reserves at the Liddell Open Cut is subject to a number of risks. These risks are of both a technical and financial nature. Liddell Open Cut is principally a conventional truck and shovel/loader operation, supplemented by a highwall coal augering operation. There are significant areas of divergence from more conventional operations including working in close proximity to a major dam, working up dip from an operating underground mine, and working through areas where there has previously been underground extraction. In addition the site has major long-term rehabilitation requirements. This paper, rather than concentrating on specific detail of areas of risk, presents the spectrum of geological, design, operational and post-mining risks that accrue to the various areas of activity in this open cut operation. The balance of this paper then provides an outline of the strategies employed by Liddell Coal to manage their potential impact.

Jan 1, 1994

By Ahmed M, Leung L

A program of microseismic noise monitor ing for gas outbursts, in conjunction with other mining engineering measurements and observations, is being undertaken at Leichhardt colliery in Queensland. Headings are developed at present by shotfiring. The equipment being used in this study includes piezoelectric accelerometer assemblies to detect microseismic noise which is then transmitted to a surface base station by cable. Data are recorded on an analogue magnetic tape recorder and are also analysed on-line using a commercially-available acoustic emission pulse analyser. It is proposed to re-interpret recorded data using various modes of analysis and to interface a desktop computer to the existing system to permit continuous monitoring on the mine site. No outbursts have been recorded or analysed and only a limited number of develop- ment shots, and the resultant microseismic activity, have been recorded to date.

Jan 1, 1980

By A B. Richards

Effective control of blast vibration and flyrock requires that significant factors be identified and quantified, that the blast be designed to ensure both blasting efficiency and compliance with applicable limits, and that the blast design be effectively implemented by field personnel. Significant factors contributing to ground vibration and airblast are: charge mass; distance and direction relative to the blast; drilling design: burden, spacing; stemming height and material type; hole diameter and depth; and initiation sequence and direction.In addition, airblast may be strongly influenced by shielding and meteorological conditions. Ground vibration is also influenced by the transmission characteristics of the ground and soil. Flyrock throw is determined by charge mass, burden, stemming height, blasthole diameter and depth. The contribution of each of the factors has been quantified and models developed to enable the environmental outcomes of blast design to be predicted. Environmental blast design is necessary to ensure compliance with regulatory limits and the implementation of æsafeÆ exclusion zones for flyrock clearance. This paper discusses the models used for environmental blast design and demonstrates the often significant effects that lapse during implementation of the design can have on predicted outcomes. In practice, drillers and shotfirers are sometimes confronted with situations that require modifications to the blast design to cope with the real site situation. Methods are presented that may be used by drillers and shotfirers to evaluate the effect of these modifications, the tolerances that must be reached during their work practice and checking procedures, and the consequences of their actions.

Jan 1, 2004

By C J. Moran

All mines face water management challenges. Adopting leading practice water management strategies can help reduce both operational and strategic risks. While many of the water issues faced by underground mines are the same as other operations, underground mining presents some unique water management challenges. In this paper we review trends in underground mining, water use and associated water issues. We then compile a structured set of strategic and operational risks that are pertinent to underground operations. The causes, threats, opportunities and measures for controlling or mitigating the risks are summarised. The risk compilation could provide an addendum for underground operations to the Australian governments leading practice water management handbook.

Mar 21, 2011

By D H. Bell

Slab-buckle failures in coal sequences involve thin slab deformation in strata dipping parallel to the footwall, and are a consequence of both unloading and the weak nature of the thinly bedded rock mass. Methods of modelling and predicting such occurrences include: +        a conceptual model using a base friction table, +        a mathematical model using the Euler solution for column and beam bending (after Goodman, 1980), and +        computer analysis techniques such as UDEC (Universal Distinct Element Code after Cundall and Hart, 1993).   Slab-buckle failures have the potential to seriously disrupt production because of their volume and rapidity, and to endanger both equipment and personnel working on the pit floor.   In July 2004 a large slab-buckle failure occurred overnight after a new batter and bench had been formed at the Malvern Hills Opencast Mine in inland Canterbury. This involved the entire length of the pit (85m along strike) when a 2m thick intact slab with a total volume of ~3500m3 translated down dip 6.2m on the base of a thin coal seam to form a pronounced buckle at the toe. The coal measures consist of finely laminated mudrocks with multiple coal seams of varying thickness dipping ~45¦ to the southeast, and the opencast mine had been designed with footwall batters formed parallel to bedding with a vertical bench separation of 15m.   Back analysis of the Malvern Hills failure was necessary to investigate the controls on footwall instability, and for future mine design. An engineering geological model was created and samples of the slab material and failure surface were collected and tested to establish the required parameters for use in the Euler solution for column and beam bending. Back analysis using the Euler solution provided unrealistic results that overestimated the overall length of a stable slope by more than 10 times.   No further large scale slab-buckle failures have developed at the mine site, in part because of the slow rate of coal extraction, but precautionary drainage of the footwall slopes has been undertaken to improve overall batter stability. The location of the slab-buckle failure on a critically positioned pre-sheared thin coal seam with full hydrostatic head is considered the most probable cause of the July 2004 failure, rather than inherent instability of the generic bench and batter arrangement adopted. The use of a precedent-based engineering geology approach to future mine design is considered the most appropriate solution in the circumstances.

Jan 1, 2007

By C Hoffmann

Given that each year, 30–40 per cent of mining industry deaths are attributable to failures of vehicle interaction controls (EMESRT, 2023), the mining industry is now armed with a growing body of knowledge from EMESRT (Earth Moving Equipment Safety Round Table) and ICMM (International Council on Mining and Metals) global vehicle interaction initiatives over the past years, that enables mining companies, OEM’s and technology providers to work together to develop and implement more effective controls and drive the adoption of capable solutions. Leveraging 20 years of experience as a global technology provider of Proximity Detection System (PDS) and Collision Avoidance System (CAS) solutions for surface mining operations, Wabtec Digital Mine Technology shares key insights for ensuring the effective selection, implementation and integration of these technologies into existing mine site controls and mining operations for effectively reducing vehicle interaction risk enabling mines to drive towards ‘zero-harm’ objectives. Topics covered include: alignment with industry best practice for controlling vehicle interaction risk by EMESRT and ICMM, importance of the maturity of EMESRT levels 1–7 vehicle interaction (VI) control framework, managing expectations that PDS/CAS is a ‘silver bullet’, alignment with industry functional – performance – technical requirements, proximity detection versus collision avoidance, sensor performance and fusion and limitations, rules engine intelligence critical to mitigating nuisance alarms during normal operations, system health monitoring and reporting, human factors engineering and operator acceptance, implementation strategy, installation standards and quality control, change management program, training programs, reporting and data analytics with actionable insights and maintenance strategies. Insights will also be provided on the challenges moving from EMESRT levels 7 (operator awareness) and 8 (advisory controls) to level 9 (intervention controls) as it’s a journey not an out-of-box solution, the growing demand for coexistence of CAS and Autonomous Haulage Solutions (AHS), functional safety approach, value added systems integration and the applicability of new emerging technologies.

Apr 16, 2024

By J Seccatore, F Golin, E Munaretti, M Cardu, J C. Koppe, J Bettencourt

Contour blasting is commonly performed by employing linear charges decoupled from the boreholes. This method is common in surface and underground excavations, either for civil or mining purposes. To achieve the best results in terms of rock breakage and respect of the excavation profile, blasting theory suggests that charges should be inserted coaxial to the holes to grant uniform distribution of the explosive energy, therefore obtaining a uniform radius of damage. Nonetheless, due to readiness of operations or lack of availability of specific products on the market, non-coaxial charges are often employed in blasting practice. Non-coaxial charging methods include the employ of high-power detonating cord (40 to 100 g/m), low-power detonating cord connecting small-diameter cartridges (commonly 10 g/m detonating cord priming 1” cartridges) or string loading (a thin layer of bulk emulsion pumped with controlled flow and controlled extraction of the injecting rod). This research focuses on evaluating the effects of the first two charging methods on the quality of final walls in open pit and underground operations. Different drilling geometries and charging configurations were applied to both quarrying and tunnelling blasts. The half-cast factor, the overbreak and the underbreak were evaluated as control indicators. Rock quality designation and rock mass rating were used to classify the rock mass. The research was aimed to push contour blasts to their limits, observing for which geometry and charge configuration the blast lost its design threshold with respect to the final wall for every given rock mass. Results show the operational limits of non-coaxial charges encountered in the rock masses object of this study. In good-quality rock, smooth blasting with decoupled linear charge of 40 g/m can be extended to a spacing S = 22Øf with little or no detectable drawbacks in terms of final wall quality, in contrast with theoretical formulae for the determination of the radius of damage. On the other hand, when the rock is poor, any quality of the final wall is hardly achieved at all, in spite of any care in the details of execution of smooth blasting. It is concluded that any design criterion and theoretical approach modelling the effects of contour blasting cannot ignore the features of the rock mass.CITATION:Seccatore, J, Golin, F, Cardu, M, Munaretti, E, Bettencourt, J and Koppe, J C, 2015. Evaluating the effects of non-coaxial charges for contour blasting, in Proceedings 11th International Symposium on Rock Fragmentation by Blasting, pp 267–278 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 24, 2015

By A J. Burchell

The introduction reviews the tunnelling carried out in Singapore since the early 1980s. Between 1983 and 1990, Phases 1 and 2 of the mass rapid transit system were constructed. These included some 20 km of bored and cut and cover tunnels together with 18 underground stations. Some particular points of interest in this massive project are briefly commented upon. Reference is also made to other underground or underwater schemes undertaken during this period such as the proposed large caverns project and the submerged tunnel to Pulau Seraya. A description of the subsurface works, now under construction in Singapore, follows. This includes an all underground North-East railway line 20 km long with 16 stations. At a budget of US$ 3 billion, this is a major civil engineering undertaking. Another project is the extension of the railway to Changi Airport which involves 3.5 km of twin tube tunnelling together with a major underground station which is fully integrated into the airport terminals. An on-going program of further major railway extensions over the next 10 to 15 years is in place and an outline is given of some of the most important underground sectors. Other proposed projects such as the underground roads system and the deep level sewers are briefly described. Together they demonstrate the very significant volume of underground construction scheduled for the next century in Singapore.

Jan 1, 1999

By B McFadzean, N P. Lima, D A. Deglon

The reverse flotation of Itabirite iron ore is typically performed after a desliming step in which most of the sub-10 µm particles are removed. This is done to limit processing problems such as poor flotation recovery of SiO2 due to slime coatings and increased slurry viscosities, unmanageable froths and increased losses of hematite particles due to entrainment. However, the rejection of ultrafine particles contributes to large losses in iron recovery and may contribute to the instability of tailings dams. The aim of this study is to decouple the effects of ultrafine particles in the pulp and froth phases to better understand the processing capabilities of the fines fraction. The flotation test work was performed in a special-purpose continuously operated laboratory flotation cell that has a deep froth section to simulate plant-scale froth conditions. Five conditions of fines addition were investigated at three different froth heights and a solids concentration of 50 per cent. The behaviour of the pulp and the froth were decoupled using froth stability and froth recovery tests. This showed that, even though there is an exponential increase in froth stability at increasing fines quantities, the performance of the pulp has the overriding effect on the overall SiO2 recovery. Pulp zone, froth zone and overall SiO2 recoveries showed that overall recoveries increased by about 3.6 per cent for every 1 per cent decrease in fines content. This meant a large increase of 20 per cent in SiO2 recovery when going from undeslimed to deslimed feed. This was driven largely by increases in the pulp zone recoveries, which were about 4 per cent for every 1 per cent decrease in fines content. The froth recoveries, on the other hand, decreased by between 0.75 per cent and 2.5 per cent for every 1 per cent decrease in fines content, depending on froth height. This paper explores further insights into iron ore flotation processing at different slimes concentrations.

Aug 24, 2022

With increasing depth of mining, geotech nical factors assume increasing importance in the design and operation of open pit coal mines. Dragline strip mines are particularly sensitive to stability conditions since the draoline is a relatively inflexible machine, particularly in relation to its limited dump- ing radius for overburden disposal. Geotechnical factors relevant to strip mine design include: 1. spoil pile stability 2. wall stability 3. floor stability 4. excavation characteristics 5. groundwater conditions A basic geotechnical investigation pro- gram for new mine feasibility studies is described. This includes: 1. terrain evaluation 2. geotechnical drilling and logging 3. geophysical logging 4. materials testing 5. seismic refraction traversing 6. groundwater studies Such a program will give an overall geotech- nical assessment of the site and highlight any areas which may require further, more detailed Investigations

Jan 1, 1981

By M Spleit

A long-term production schedule for the LabMag iron ore deposit in northern Quebec, Canada is derived using stochastic integer programming. The optimisation formulation maximises the schedule’s net present value while simultaneously managing the risk of deviations in production tonnages and qualities by considering stochastic simulations of the orebody instead of a single deterministic model. The formulation also smooths and minimises haul truck requirements and ensures that as mining progresses, space is created within the mined out pit for the return of waste material.CITATION:Spleit, M, 2014. Production schedule optimisation – meeting targets by hedging against geological risk while addressing environmental and equipment concerns, in Proceedings Orebody Modelling and Strategic Mine Planning Symposium 2014, pp 397–404 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 24, 2014

By E C. Holloway

"The financial valuation of mining assets has a number of fundamental differences to the valuation of many other asset groupings. One such difference is that typically, the greater proportion of both the cost and revenue sides of the cash flow are inherently governed by systemic market forces.As a result, the range of outcomes for the valuation of each mining asset is more unpredictable, with higher levels of risk and uncertainty. In contrast, the management function of many other non-mining businesses or industry groups can control at least a portion of the cash flow by maintaining the margin or controlling the sales price. The management teams of mining businesses and operations typically have limited options, and are thus price-takers for both costs and revenues. As mining is an inherently cyclical industry, large, long-life operations can exist through several price cycles, making valuation both subjective and challenging.The outcomes of both static- and stochastic-based valuations, as well as the internal probabilities of the associated cash flow statements, are significantly impacted when the correlations between the appropriate parameters are quantified, modelled and incorporated into the valuation framework. The appropriate parameters for correlation modelling primarily include those that are governed by systemic market forces. Applying this process results in a different risk profile for the asset by allowing the risks resulting from systemic market movements to be more accurately quantified and then objectively minimised. This process also reduces the level of residual uncertainty in the valuation outcome.This paper presents a valuation methodology to pragmatically incorporate this level of valuation sophistication and statistically quantify the associated increase in the level of confidence of the valuation outcomes reported.CITATION:Holloway, E C, 2016. Correlated valuation methodology, in Proceedings Project Evaluation 2016, pp 181–200 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016