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By Daniel T. Brian, O&apos

Exploration targets and results in the mining industry are commonly summarized in terms of tonnage and grade. Business appraisals require, as additional information, the expected profit or loss implied by the physical summay. The early incorporation of knowledge gained through financial analysis computations can provide a means for economically resolving many common exploration and development problems. Examples of such applications from the activities of exploration planning, reconnaissance, land acquisition, and development planning are presented. While prospecting for mineral deposits, geologists are frequently asked what they hope to find or have found. The response is usually descriptive, such as "50 million tons of 1% copper," and the economic implications are deferred until a capital investment decision is required. At that time, a financial analysis integrating the four analysis components is completed. These components are: 1) Tonnage and Average grade above cutoff grade 2) Capital and operating costs 3) Product value 4) Appropriate profit or loss accounting Close examination of these components reveals that there is no intrinsic reason for avoiding financial analyses at earlier stages in exploration, as long as the uncertainty of the estimate is realized. Tonnage and average grades are commonly estimated at early stages in exploration. For this component, the appropriate cutoff is the major uncertainty. Capital and operating costs are difficult to estimate before detailed quantitative information is available, but estimates useful for the types of applications pertinent to earlier exploration stages are possible. Product value estimates may or may not be difficult, depending on the pricing structure of the particular commodity. A simplified accounting procedure usually may be adopted without introducing any significant loss of validity. This paper describe some of the financial analysis applications which are pertinent during mineral exploration and deposit development. These applications lend additional insight during exploration planning, land acquisition, physical exploration, and development. The examples are oriented toward a hypothetical management investment policy which is based on a single criterion, a minimum 15% discounted cash flow rate of return. In reality, managements use multiple criteria. This simplification is convenient for purposes of presentation and does not invalidate the examples. Computers are useful, but not a requirement, for the applications described. The use of computers provides the results on a more timely basis at costs lower than equivalent manual computations. UNDERLYING PRINCIPLES AND ANALYSIS METHODS Data estimates are subject to uncertainty. The analyst may choose to assess this uncertainty by using one of two principles. Each principle has some advantages. The principle most commonly employed is "assumed certainty." Each financial analysis is based on one set of selected data, which may represent the average estimates, minimum expected conditions, etc. The critical data is identified by making successive calculations, varying the values used. Such studies, called sensitivity analyses, isolate the economic effect of various uncertainties, and guide the allocation of future efforts toward improving the overall accuracy of the analysis. A second principle, "assumed risk," examines the interactive effect of the current uncertainties by qualitatively assigning probability distributions to each data element. These probability distributions indicate the currently appraised chance that a given numerical value will prove to be true. The corresponding procedure, risk analysis, consists of processing many individual financial analyses, each analysis being based on randomly selected numerical values from the probabilistic distributions. The result is a numerical presentation of the uncertainty, but care must be exercised in the interpretation of results. The advantage of this procedure is the direct measurement of economic uncertainty caused by the interaction of uncertain estimates. Kennecott Copper Corp. has developed computer systems for accomplishing sensitivity and risk analyses.

Jan 1, 1970

By M. E. Rossi, J. E. Camacho

"Geostatistical conditional simulations are becoming increasingly popular as tools that provide models of uncertainty at different stages of a mining project. They have been used as grade control tools in daily operations to assess the uncertainty of mineable reserves at the project’s feasibility stage, and to assess mineralization potential in certain settings. Other applications include assessment of recoverable reserves, resource and reserve classification, and drill hole spacing optimization studies. All large-scale applications of conditional simulations intend to benefit from the correct (or accurate) characterization of uncertainty, adequately describing the variability observed from the data and its effect on the final objective.The objective of this paper is to compare the ad-hoc uncertainty model provided by a traditional classification scheme with the probability intervals resulting from a conditional simulation model. It is argued that the uncertainty model derived from the use of classification schemes is of little practical use to the mining company or operation. The paper emphasizes differences in uncertainty based on the size of the mining unit considered, the extraction method, and local geological differences. Most importantly, it discusses confidence intervals for these mining units, as compared to the relative precision envisioned by a typical classification scheme.The application described in this paper is taken from a medium-sized Cu open pit and underground mine in northern Chile, and demonstrates the impact of several variables on the resulting conditional simulation models. It also compares a more traditional resource classification scheme applied, and the wide difference in local confidence intervals for each mining unit."

Jan 1, 2004

By A B. Christie, R L. Brathwaite, A Swain

This study provides quantitative data on vein distributions within seven selected epithermal systems, four deposits hosted predominantly in rhyolitic rocks: Ohui, Wharekirauponga, Neavesville and Komata, and three major deposits mainly hosted in andesite: Martha Hill, Golden Cross and Karangahake. The technique of fractal analysis was used to help quantify vein distribution patterns. The fractal dimensions (D) obtained are related to the number of veins per metre, the degree of vein clustering, and vein thickness. An increase in any of these tends to increase the fractal dimension.   It is the relative relationship of these parameters that is important for the characterisation of vein distributions, and the comparison of different deposits. Within the same systems, the rhyolites are characterised by lower vein thickness and vein density, but have a higher degree of vein clustering compared to the andesites. Sections that are deeper and more centrally located within the epithermal system and/or close to major structures tend to have a greater degree of vein clustering, higher average vein thickness and density, and higher thickness to density ratios. This depth control is most pronounced in epithermal gold-silver systems because they have formed at shallow crustal levels where physico-chemical conditions change drastically both vertically and laterally. In addition to lithological and structural control at vein scale, deposit scale structure is of great importance in the deposition of economic mineralisation. Large open vein structures capable of sustaining high fluxes of hydrothermal fluid, favourable for the formation of large, high-grade gold deposits, are best developed in andesite sequences.

Jan 1, 1995

By Marc C. Bétournay

Over the last four years, an international initiative, championed by Vehicle Projects LLC, the Fuelcell Propulsion Institute and Natural Resources Canada, has been active in carrying out research projects to prove out the concept of applying fuelcell technology to underground mining vehicles. These have been carried out by a consortium consisting of mining companies, equipment manufacturers, technology developers, national laboratories and consultants, with the participation of Canadian and U.S. mine regulatory agencies. This clean technology, which produces only water and electricity, would allow several advantages to be obtained, in the health area (by eliminating diesel emissions and reducing noise generation), in lowering production costs (such as reducing ventilation required) and lowering green house gas emissions. This article outlines the results obtained in several key areas, such as the operation of fuelcells in underground conditions, risk issues related to underground and surface operation of hydrogen vehicles and hydrogen production and delivery systems, and the design and mining performance of the world?s first hydrogen mining vehicle, a mine production locomotive. The work to date on the fuelcell loader, designing the power plant and power transmission systems, operational requirements, and operating cost reductions, is also presented. There is also an evaluation of the overall mining applications and advantages this technology can bring to underground mining, including the facilitation of automation and tele-remote operation.

May 1, 2003

By B. Genc

After the explosion at Middelbult Colliery, South Africa in May1993, which claimed 53 lives, the South African Coal Mining Industry and the Safety In Mines Research Advisory Committee (SIMRAC) united forces to establish a surface facility to develop and test on-board flame suppression systems for continuous miners and roadheaders. The first test that was conducted in this newly constructed test tunnel at the Kloppersbos Research Facility, CSIR was in July 1995.Since then 70 tests have been conducted using the facility and have focused on on-board active ignition suppression systems for continuous miners (CM) and road heading (RH) machines to enhance the safety of South African mine workers in collieries. These suppression systems are mounted on the CM or RH machine and detect the occurrence of an ignition by means of light-sensitive sensors. The electronic signal from the sensor triggers the suppression system, creating a flame-suppression curtain, containing and extinguishing the flame in the immediate vicinity of the ignition. Forty-three tests have been conducted with an active on-board suppression system present inside the test tunnel. Since flame propagation speed is an extremely important parameter, the CSIR-Miningtek made the results of the test programme available for re-analysis. Flame speed depended on whether a machine was present in the heading or not, the geometry of the heading and the volume and composition of the explosive mixture of gas. Flame speeds of up to 190 m/s were recorded. However, the active suppression systems were almost always successful in containing flame propagation.

Jan 1, 2002

By W. M. Deaton

The formation of gas hydrates in natural-gas pipe lines depends on temperature and pressure conditions in the lines as well as on the presence of condensed water. The operating pressure in a pipe line may be determined easily and usually is available from the records of operation, but the temperature seldom is known. In cooperation with the American Gas Association, the Bureau of Mines, in its investigation of gas hydrates, conducted a pipe-line-temperature survey and studied underground temperatures at depths at which pipe lines ordinarily are buried and the relationship of these temperatures to prevailing atmospheric conditions. A similar but mere limited study of this type was conducted by engineers of the Bureau of Mines a number of yours ago.4/ A summary of the earlier findings was included in a general report by the Bureau on the flew of natural gas through high-pressure transmission lines.5/ In the present study, data on temperature variations were obtained at several places widely separated geographically. This information should assist pipe-line engineers in designing and operating natural-gas pipe lines.

Jan 1, 1941

By R. N. Hambright

Gaseous and particulate exhaust emissions are characterized for a 1200 Bhp two-stroke cycle diesel, a 1000 Bhp four-stroke cycle pre-combustion chamber diesel, and a 900 Blip four-stroke cycle, direct injection diesel using steady-state modal testing and a versatile exhaust dilution-collection system. In addition, a 1.50 Bhp four-stroke cycle, pre-combustion chamber, turbocharged diesel was characterized for use in experimental water injection evaluations. Water injection downstream of the turbocharger compressor and upstream of the turbocharger exhaust turbine are evaluated for their particulate removal effectiveness on the small turbocharged diesel engine. The water droplets are inertially separated using cyclone separators designed for minimum pressure drop and outsize, lip to 50 percent of the total particulate mass generated was removed using a combination of both inlet and exhaust water injection techniques.

Jan 1, 1981

By I. Liebman

The Bureau of Mines conducted research to develop triggered barrier systems for protection against gas explosions that can occur in underground coal mines during the use of continuous miners. Several extinguishing agents were tested in barriers at a simulated mine face. Water, powered by pressurized nitrogen, was found to be efficient in stopping fully developed gas explosions, but it had little effect against the explosion during its incipient stage. Hybrid combinations of currently known extinguishants, however, were successful against incipient explosions. Three hybrids that were developed and tested consisted of Halon 1301, combined with either an aqueous foam solution, water, or a dry chemical powder. The three hybrids were found to be more efficient than any constituent alone. Results of the tests point to a synergism between the hybrid components, and indicate that the Halon aids in dispersing its constituent and also converts the aqueous foam solution into a stable fine foam and the water into fine drops.

Jan 1, 1978

By Martin Plante, Denis Hamel, Marie-Pier Bédard, Jeff McLaughlin

"The results and methodology for the optimisation of the zinc flotation circuit at the Matagami Mill using the 6-Sigma methodology are shown in detail while only the base line and final results are presented for the copper circuit. As a result of the six sigma project, the zinc concentrate grade was improved by 2% and the zinc recovery by 3%, with reduced dosage of reagents while the copper concentrate was improved by 2.4%. The process variation in the zinc concentrate grade and recovery was also reduced by over 50%. The main factors contributing to the project success were identified to be improvement in the plant measurement systems, an internal benchmarking exercise and statistically designed laboratory and in plant tests to guide the process improvement. The annual value to Noranda resulting from this project has been estimated at approximately $5 million.INTRODUCTIONThe Matagami concentrator started ore processing from the new Bell- Allard deposit in July 1999. Concentrator performance (grade and recovery of zinc and copper concentrates) was highly variable and work was ongoing to fix the sources of variation. In the mean time, Noranda embarked on its 6-Sigma initiative across the company. The 6-Sigma DMAIC (Define, Measure, Analyse, Improve, Control) methodology was used in the two flotation circuits to reduce variation and improve performance. The statistical 6-Sigma methodology moves towards identifying and controlling critical process operating variables (the X' s) to achieve customerspecified performance (the Y's). The goal of the methodology is to describe a process in a numerical equation known as the transfer function, given as Y = f (XI, X2, X3.. .), where Y could be concentrate grade or recovery and examples of X's are reagent dosage, particle size, etc. With the transfer function, optimal operating conditions and control tolerances are established for the key X's to ensure the desired Y performance is obtained.Each phase of the 6-Sigma methodology is explained below with examples from the Matagami project."

Jan 1, 2001

By Benedetto Corain

The production and dispersion of metal nanoclusters onto inorganic supports and amorphous carbon rest on well consolidated technologies belonging to the realm of industrial catalysis and of basic catalysis research (1). In spite of the existence of a variety of specific synthetic strategies, their very rationale relies on three main approaches i. e.: A: precursors of both the metal nanoparticles and of the relevant supports (or the support itself) are intimately mixed (even let to react) at ambient conditions and then thermo-reduced according to very controlled protocols (2); B: precursors of metal nanoclusters are let to be adsorbed onto suitable supports from the gas or liquid phase and subsequently thermally decomposed (3); C: metastable size-controlled metal nanoclusters are previously generated in a liquid medium and subsequently transferred onto pre-formed support particles (4). The production and dispersion of metal nanoclusters onto organic soluble supports is also a rather well documented academic praxis (5, 6, 7, 8) able to provide e.g. size-controlled Au0 nanoclusters of 4.4±1.7 nm (5). Our group started in 1997 developing (9) an innovative approach to the synthesis of metal nanoclusters dispersed inside insoluble, albeit accessible (see below) mechanically robust gel-type resins (10), which procedure was tested so far on palladium metal. Metal ions are previously dispersed upon ion-exchange inside of the polymer framework, followed by chemical reduction and by the aggregation of born metal atoms into nanoclusters, the size of which is templated (11, 12) by the three-dimensional intercommunicating meshes that build up the overall polymer framework (Figure 1).

Oct 1, 2003

By G. D. Andria

Contract J0275007 was to consist of a thorough two-phase statistical analysis of respirable coal mine dust data from USBM Contracts H0232061, H0232060, H0230029, H0230031, H0210050, and H0242013. Consequently, BCR cataloged and assembled relevant data items from these contracts and formulated procedures suitable for the evaluation. The selected procedure was a Multilinear Regression Analysis which related dust concentrations measured in the mine to other mine parameters. Under the first phase, a thorough analysis of the date from USBM Contract No. H0230029 was completed. Primary results from this analysis are as follows: (1) The five variables that significantly affect dust concentrations in the return behind the brattice are the spray system utilized; the distance from the face to the return brattice; the return airflow; the production rate; and the water consumption rate, in that order. These five variables describe about 85 percent of the total variation in the return dust concentration. (2) Results at the miner and jack-setter locations were somewhat less conclusive due to the fact that only 17 percent of the variation in dust at the miner could be resolved and only 48 percent of the variation at the jack-setter location could be explained. The decision of the sponsor was that these initial results revealed as much information as could be expected; thus, per instructions from the USBM, the second phase (analysis of the other five contracts) was abandoned.

Jan 1, 1978

By Louis Schaffer

This report characterizes several coal Dine mobile equipment operator populations with respect to age, mine experience, machine operator experience, and training. The information is used to demonstrate a method of normalizing the injury data collected by the Mining Enforcement and Safety Administration-Health and Safety Analysis Center.

Jan 1, 1977

By A. Cabañas

"In this paper, geostatistical techniques are applied to forecast the annual copper price in the short and medium terms (from one to five years ahead). These techniques allow the incorporation of monthly and multivariate information in the analysis and provide more accurate results than traditional approaches, especially as far as the one-year forecast is concerned.A second advantage of geostatistics stems from its ability to assess the uncertainty associated with the unknown future prices, thanks to estimation variances or confidence intervals, depending on the technique used. Such an assessment has a crucial importance in decision-making, from both macroeconomic and microeconomic points of view. IntroductionThe copper price traded in the London Metal Exchange is a relevant parameter for defining macroeconomic policies of producing countries like Chile. It is also a key factor for the mining companies, since fluctuations in the sell price affect the expected financial flows. Due to the amount of money involved in decision-making, it is necessary to have accurate forecasts of the future copper prices and to quantify the uncertainty associated with such prices.This paper focuses on the annual copper price estimation in the short and medium terms, i.e., from one to five years into the future. Henceforth, the word “estimation” will be used as a synonym of “forecast,” according to the geostatistical jargon (Matheron, 1989).Two main approaches, based either on statistics or econometrics, are currently used to forecast commodity prices, but both of them are not very accurate when applied to copper. First, the main methods are briefly reviewed, then the geostatistical formalism will be presented. So far, the latter approach hardly has been used to estimate commodity prices, although it may reconcile both statistics and econometrics via (1) the use of a stochastic approach and (2) the handling of ancillary variables related to the copper market. Another advantage of geostatistical techniques is the ability not only to forecast the copper price, but also to measure the uncertainty associated with it."

Jan 1, 2004

By Mike Faure

Hercules cribs make use of timber loaded parallel and perpendicular to the grain. Maximum use is made of the orthotropic properties of timber resulting in crib- having superior strength, high initial stiffness and controlled post yield deformations. Blocks and timbers can be combined in many different ways resulting in thousands of different geometries. Each geometry has a specific combination of block on block, timber on timber and block on timber contact area which results in a unique performance. Each crib can be fingerprinted by defining four parameters relating to its load/deformation curve. If the geometry is known, the performance can be predicted with a high degree of accuracy. If the mine support requirements are known, the crib geometries can be designed which met theme requirements in the most cost effective manner Hercules cribs come closest to satisfying mine support requirements. Due to the flexibility of the concept and their superior strength, they can be employed in most mining situations to enhance safety, improve productivity, reduce working costs or improve profitability.

Jan 1, 1993

By Bradley V. Johnson, Robert J. Timko, Edward D. Thimons

Water-jet-assisted cutting involves the use of a mechanical cutting bit in combination with a high-pressure water jet directed just in front of the bit tip. Such a jet can offer benefits in terms of improved cutting, reduced dust and fines, and improved bit wear. The Bureau of Mines, through a contract with the British National Coal Board, has researched the use of water-jet-assisted cutting on roadheaders. After several engineering design problems were overcome, this program led to the successful underground testing of these roadheaders. Today, more than 60 water-jet-assisted roadheaders are in operation around the world and numerous others are on order. This paper details the evolution of these machines and the benefits to be gained by their use.

Jan 1, 1987

By T. M. Barczak

A primary objective of the Bureau of Mines geomechanics research program is to develop a better understanding of support behavior and interaction of supports with the strata so that supports can be more closely engineered to the geological conditions in which they are employed. Four longwall shield supports were instrumented with an eight-transducer instrumentation array to measure leg, canopy capsule, and compression lemniscate link forces from which resultant shield loading was determined. The instrumented supports were monitored over a 4-month period, producing over 75 shield cycles of resultant shield loading. Resultant loading is the true measure of support resistance, providing both roof-to-floor and face-to-waste support reactions as well as the location of the reaction on the shield canopy. Observed roof support reactions were analyzed, with particular emphasis on horizontal shield loading, since it is the least understood design parameter. Average, peak, and change in shield loading during the mining cycle are discussed. Correlations among data parameters are examined, as is the distribution of support loading at the headgate and midface. Conclusions are drawn as to the effectiveness of the shield support at this installation. Recommendations are made for further research needs.

Jan 1, 1987

By Axel Preusse

For the last 150 years, subsidence damage to the surface has been an unavoidable phenomenon associated with underground coal mining. In particular, the mechanization of mining methods in multiple seam mining and the concentration of mining activities in densely populated European metropolitan areas (e.g., Ruhr, Upper Silesian industrial region) have led to mining having a very strong influence on the earth?s surface. In both these regions, surface subsidence of more than 20m has been reported up to now in comparison to the original state. Underground coal mining in these regions strongly impairs all kinds of surface use, such as urban and industrial development, infrastructure (roads, waterways, and railways) and pipelines?without restricting the functionality of those objects to a greater extent. Demanding and, in some cases, globally unique engineering solutions have been developed and implemented for this purpose. The previously mentioned mining and industrial regions are still very strongly characterized by the (increasingly declining) coal industry and will remain dependent to a large extent and for an indefinite period on artificial drainage measures because subsidence that has already occurred is irreversible. This paper will primarily discuss the prediction of subsidence that is caused by intensive multiple seam mining and its influence on surface objects (e.g., underground pipelines). However, an approach for predicting ground uplifts due to rising mine water as a consequence of mine closures will also be described.

Jan 1, 2012

By J. A. McLennan

Nickel laterite deposits are typically formed from tropically weathered mafic-ultramafic complexes. The resulting nickel concentration is found within soil horizons and is mineable with regular dozer units. At the time of mining, digging elevations are needed at selective mining units (SMUs). Moreover, for mine planning, the costs due to dilution and lost ore require mining elevations to be specified. A conditional simulation approach is used to calculate ?optimum? SMU mining elevations. Multiple realizations of the ore base surface are simulated. For a single bottom surface realization, dilution and lost ore costs are calculated over the entire vertical extent of each SMU. The optimum mining elevation is the elevation where the lowest summed cost of ?accepting dilution? and ?wasting ore? occurs. The reported SMU dilution is the cost of mining the volume of waste located below the bottom surface and above the optimum mining elevation and the reported SMU lost ore is the cost of not mining the volume of ore above the bottom surface and below the optimum mining elevation. For all ore bottom surface realizations, optimum SMU mining elevations and their associated dilution and lost ore costs are calculated and compiled to represent production uncertainty.

Apr 1, 2005

By C. Musingwini, A. S. Nhleko

"Since the Global Financial Crisis (GFC) in mid-2008, capital has been more difficult to access. Mining projects must contend with projects from other industries for scarce capital. A decision to invest available capital in mineral projects requires that valuation be conducted to assess the expected return on the projects. The discounted cash flow (DCF) analysis is generally applied for the valuation of mining projects, whereby future cash flows are discounted to present value using an appropriate discount rate. The discount rate significantly affects the outcome of a valuation. Economic and finance theory provides tools to calculate discount rates. The discount rate must account for factors such as the risk and stage of development of the mineral project; hence the appropriate discount rate to utilize in a project is often a subject of debate.The discount rate is the weighted sum of the cost of debt and equity. There are several methods for determining the cost of equity. This study considers the commonly applied Capital Asset Pricing Model (CAPM) and Gordon’s Wealth Growth Model because of their simplicity and availability of parameters required to estimate the cost of equity. This study explores how differences in the cost of equity obtained by these two methods can be explained for a mining environment. Data for empirical analysis were collected from the I-Net Bridge, McGregor BFA, and Bloomberg databases. It was found that Gordon’s Wealth Growth Model provides better estimates of the cost of equity compared to the CAPM under depressed market conditions. Therefore, this research recommends that Gordon’s Wealth Growth Model be used to estimate the discount rates for mining projects during periods of depressed market conditions."

Jan 1, 2016

By C. Sun

In this study, numerical simulations of yield pillars employing the finite element method with time-dependent Drucker-Prager material model are conducted. The stress control mechanism of yield pillars on weak floor strata is studied. The development of pillar yield zone, the distribution of pillar stress and the development of failure zone in the weak floor strata are investigated. The study indicates that a properly selected yield pillar size may significantly reduce the peak stress induced in the weak floor strata and effectively control the development of failure zone in the floor.

Jan 1, 1999