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By N. K. Singo, J. D. Kramers

The reprocessing of tailings resources to extract gold on an industrial scale has become common practice. While these projects are common in the Witwatersrand basin, similar low-technology processes are not operational in smaller goldfields. This study explores the possibility of reclaiming the tailings dump of the Louis Moore Mine in the Giyani Greenstone Belt, investigates potential hazards to communities in the vicinity, and identifies mitigation strategies. Auger samples were taken from the Louis Moore tailings at depths of up to 5 m. Aqua regia leach analyses show Au concentrations of up to 1 g/t. Inferred estimations based on ordinary kriging (OK) and inverse distance weighted (IDW) methods put the residual Au resource in the Louis Moore tailings dump at 0.20 t. Reworking the tailings is viable, although a potential environmental risk exists in the form of elevated arsenic concentrations. Further exploration is required to determine the mineralogical associations of Au and As. Tailings reworking would assist in raising funds for mine rehabilitation. The secondary tailings could potentially be repurposed, which would provide employment and facilitate community development, as well as deliver environmental benefits.

Jul 1, 2021

By R. T. Jones

Base metals and platinum group metals can be collected in metallic alloy form, via a wide variety of smelting processes. The recovery, or degree of collection, of the valuable metals is a function of the extent of reduction in the furnace, which, in turn, is indicated by the fraction of iron present in the feed materials that report to the alloy. An equation has been developed that relates the recovery of various metals (such as Ni, Co, Cr, and PGMs) to the recovery of Fe. This recovery equation (for each metal) is characterized by a single parameter (K?) that can either be empirically fitted to the data, or expressed in terms of the equilibrium constant and the ratios of the activity coefficients involved. Data from a number of varied DC arc furnace campaigns are presented to illustrate this behaviour.

Jan 1, 2009

By A. M. Neale

Kriel Colliery has experienced some sub-standard blast results on the overburden. Blast results are considered poor when the fragmentation is too big, back break into the new highwall, capping is experienced and/or excess overburden material is thrown into the void. Poor blasting leads to lower productivity, equipment breakdowns, and poor drilling and blasting results on the adjacent blast, contamination of coal or loss of coal. A simulation was developed in Microsoft Excel to model blasting results while changing various parameters. From the simulation results, it could be seen that a change of blast design could be beneficial. As an example, smaller drilling patterns were simulated (10 m x10 m to 8 m x8 m, and 8 m x8 m to 7 m x7 m in Pit 5 and Pit 6 respectively) in combination with changes in explosives (P700 emulsion vs. ANFO) and drill bit diameter (311 mm vs. 251 mm). The results show that each of the options has a specific scenario that will be most beneficial to the mine. These results are quite specific and subject to variable inputs. The purpose of the example is to demonstrate how the simulation can be used as a tool to asses blast design variations.

Jan 1, 2010

By T. Celik, B. Genc, C. Musingwini

"Mine planning software continues to be an important factor when it comes to the development of the South African mining industry. To contribute to this development, a new methodology to define and measure mine planning software utilization in the South African coal mining sector within an evolving data-set framework was developed. An initial data-set showing the mine planning software providers, their corresponding software solutions, as well as the software capabilities and information on the number of licences was collected and compiled in 2012 in an online database for software utilized in the South African mining industry. Details of the database development and implementation were published in the Journal of the Southern African Institute of Mining and Metallurgy in 2013. In 2014 the data-set was updated with additional and new information.In this paper, using the 2012 and 2014 time-stamps, a methodology for estimating the software utilization is developed. In this methodology, three variables: commodity, functionality, and time factor are used to define and measure the software utilization in order to ultimately inform decision making strategies for software utilization. Utilization in the coal sector was measured according to six different functionalities, namely Geological Data Management, Geological Modelling and Resource Estimation, Design and Layout, Scheduling, Financial Valuation and Optimization. The methodology is useful for stakeholders reviewing existing software combinations or intending to purchase new software in the near future and wanting to estimate the comparative attractiveness of a certain software package. These stakeholders include mining companies, consulting companies, educational institutions, and software providers. The work presented in this paper is part of a PhD research study in the School of Mining Engineering at the University of the Witwatersrand."

Jan 1, 2016

Electricity supply constraints in SA are increasingly challenging mines to operate more energy efficiently without reducing production output. Mining compressed air systems are well known to be operated inefficiently and are also a major power consumer. Two available and proven technologies can be applied on new and existing mines to replace or and optimise available compressed air facilities and achieve meaningful reductions in electrical power consumption; ? Hydro powered drilling and mining is significantly more energy efficient than compressed air and provides drilling rates that are twice as fast. ? Stope drilling systems using compressed-air or water drills allow further energy savings. The technologies are discussed and a broad strategy to selectively apply these them together is presented.

Jan 1, 2008

By G. R. Lane, A. Vermeulen, S. van de Venter, S. Bhoowanpursadh

Over the past two years Anglo Platinum made use of the specialist skills of Cyest Corporation to develop a Mine Optimization Tool (MOT) to enhance the current suite of in house mine planning tools and processes. The application was built in a multidimensional modelling environment developed by Cyest called CarbonL. This has allowed complex modelling that is transparent to the business users and therefore is not prone to the ?black box? approach that generally exists with these types of complex tools. The purpose of the MOT is to have an integrated software tool that can schedule production activities by half level for a shaft complex, while at the same time integrating the economics concomitant with that schedule. The tool allows the user to configure all activities relevant to the selected mining method, define the mine design parameters and geological parameters, define scheduling rules and then schedule all activities. This allows the user to test various production strategies and schedules very quickly and easily in terms of shaft value, costs and revenue profiles, labour complement and production ramp up so as to determine the option that best fits the overall strategy. This allows assessments of multiple scenarios in a relatively short period of time, after which only the best option is taken forward for graphic design and scheduling. This paper discusses briefly the rationale behind the Mine Optimisation Tool and the underlying workings of the modules that comprise the tool. It also covers the life cycle of this tool from the original prototype through to the final Mine Optimisation Tool software and discusses the positioning of the final tool.

Jan 1, 2007

The estimation of the spatial variation of the b-value of the Gutenberg- Richter relationship is important for both the general interpretation of the mechanism of rock mass response and seismic hazard assessment. The interpretation of b-value as a parameter of rock mass response is discussed in this paper. The methods applied to evaluate the spatial variation of b-value and the algorithm for obtaining the magnitude of completeness and b-value for subsets of data are presented with some verification analyses. The algorithms presented enable the automation of a spatial evaluation of b-value.

Jan 1, 2014

By V. C. Kelessidis

The interaction between rock and drill bit during drilling has been modeled for many years, but a complete understanding of the phenomena occurring has yet to materialize. Successful models will allow the prediction of rate of penetration in a given environment and optimal selection of drill bit and drilling parameters, thus minimizing exploration costs. In most rock-drilling models the value of the unconfined compressive strength of the rock (UCS) is used in the predictive equations, within the concept of specific energy, and the value of UCS is the percentage of the value of the stress applied on the drilling bit in order for the bit to advance. While the exact percentage depends on the model used and it is not known with certainty, good knowledge of UCS is nevertheless required before any decent prediction can be made on rate of penetration. Determination of UCS, normally done via destructive testing, requires not only the availability of sound rock core samples but also expensive testing and significant time for the test, which frequently are not available for routine drillability predictions. Hence, a multitude of methods and techniques has been proposed for estimating UCS from various indirect and/or non-destructive measurements, or combination of measurements with neural networks, such as point load index, block punch index, unit weight, and apparent porosity, water absorption by weight, sonic velocity, and Schmidt hardness. The many proposed approaches are critically reviewed and the results are compared, and what becomes apparent is that after many years, not only in mining but also in oil-well drilling, accurate indirect determination of UCS is still an elusive goal. An equation to predict UCS from sonic velocity data is suggested based on several data sets reported in the literature. Use of the specific energy equation with UCS or sonic data and utilization of drilling data allows an estimation of the efficiency of energy transfer from the bit to the rock and of the friction coefficient. Analysis of data reported in the literature, both from laboratory and field studies, has shown that this approach is sound and enables the determination of energy transfer efficiencies and friction coefficients, which for the cases studied range between 15 and 30% and 0.15 and 0.30 respectively. Thus, the suggested data analysis approach allows drillers to focus on inefficiencies and optimize drilling practices in future campaigns. Keywords Rock drillability, unconfined compressive strength, prediction.

Jan 1, 2011

By C. Birch

"A mineral resource royalty is payment to the holder of mineral rights for the utilization of the mineral resource. In South Africa, this payment is made to the State as holder of the mineral rights (The Mineral and Petroleum Resources Royalty Act of 2008). The principle purpose of this research paper is to identify if the State is benefitting from the mineral resource royalty by considering its impact on seven individual Witwatersrand gold mines.For this study, a simple financial optimiser model was created in Microsoft Excel that links the ore flow, block listing and the cash flow (excluding or including the cost of the mineral resource royalty). Mixed integer linear programing (the Excel Solver function) is utilised to optimise either profit or NPV (at 9% and 12%) by adjusting the cut-off grade.The impact on each of the seven mines mine was different but overall R7.9 billion is estimated to be paid in mineral resource royalty over their expected remaining lives. Due to the cost of the mineral resource royalty and increasing the cut-off grades, the total revenue decreases by R10 billion. A significant portion of this lost revenue would have been paid to the State in the forms of other taxation including company income tax which decreases by R2.8 billion. It is recommended that an industry wide investigation be conducted to determine if the resource royalty is adding to the State’s revenue, or destroying value including premature job losses. IntroductionTaxation of mining companies has become a very topical subject in the context of the postapartheid South African economy. There have been increasing calls for equitable re-distribution of mineral asset wealth for the benefit of all South African citizens and not just to an elite few. As part of the Mineral and Petroleum Resources Development Act (MRDPA) of 2002, the Mineral and Petroleum Resources Royalty Act of 2008 was introduced and came into effect in 2010 (South African Revenue Services, 2008). A mineral royalty is payment to the holder of mineral rights for the utilization of the mineral resource. In the case where the holder of the mineral right is the State, then this payment is made to the State (Cawood, 1999). Studies on the potential impact of the mineral resource royalty on the minerals industry have been conducted during the formulation of the Act and subesquently. These include Cawood and Macfarlane (2003), who suggested a cap of no more than 3% (Cawood and Macfarlane, 2003), as well as Cawood (2011), who predicted rising cut-off grades and thus reducing mineral reserves. In 2013, Grobler completed a Masters in the Faculty of Economic and Management Sciences at the University of Pretoria and concluded that the impact of the mineral resource royalty on the economy is positive. She stated that the royalty has caused operating expenses to increase, but this does not appear to be significant. Furthermore, she stated that the royalty has not affected the way the mining industry operates (Grobler, 2014)."

Jan 1, 2016

"In mechanized mining, poor equipment efficiency (availability, utilization, productivity, and quality) can endanger the success of the operation. This case study will show how an initiative to improve equipment performance developed into a comprehensive turnaround plan for the mine that placed it in the forefront of performance achievement.As part of a company-wide review process, poor overall equipment effectiveness (OEE) was identified as a major reason for the mine not achieving its targets. A project to improve the OEE identified eight improvement areas (elements) that contributed significantly to the poor performances. Measurement metrics were determined for these elements, followed by determination of baseline and target (improved) key performance indicators (KPIs). Cost savings associated with the improved efficiencies were calculated and tracked throughout the project. The mine team determined the specific actions required to achieve the target KPI in each element. These were individually developed and managed like mini-projectswith allocated responsibilities for delivery. The paper will indicate how this OEE improvement initiative triggered an improvement in almost all sections of the mine. Soon after launch, the initiative gathered momentum as the KPIs starting to improve. A visible tracking system exists at the mine and each employee can see the improvements and feel the success. The original eight elements were extended by five more, and the mini-projects grew as participants saw the success of the initiative.This paper concludes that through management and worker involvement, visible measurement and controls, and carefully chosen improvement elements, the mine was turned around. It is now achieving and exceeding its targets, and employee relations and motivation as well as safety have improved considerably. All of these achievements are reflected in the bottom line."

Jan 1, 2016

By A. Fredriksson, R. Christiansson, I. Staub

A theoretical model based on DFN models and 2D DEM numerical modelling has been developed for evaluating the rock mass mechanical properties. The description of the methodology is non-site related and can be applied in any site for this type of characterisation. The methodology was developed in the frame of the Site Investigation programmes for a Deep Repository for spent fuel in Sweden, and validated on sets of data coming from the Äspö Hard Rock Laboratory. Un modèle théorique base sur des modèles probabilistiques de réseaux de fractures et sur un modèle numérique DEM 2D a été développé dans le but de déterminer les propriétés mécaniques de la masse rocheuse. La méthodologie développée peut être appliquée à tout type de site pour ce genre de caractérisation. Le modèle a été élaboré dans le cadre des programmes de recherche d’un site d’enfouissement des déchets nucléaires en Suède, et validé par une application au laboratoire de recherche souterrain à Äspö. Ausgehend von DFN-Modellen und 2D DEM numerischen Modellierungen wurde ein theoretisches Modell für die Auswertung von mechanischen Eigenschaften von Fels entwickelt. Die Methodikbeschreibung ist nicht standortspecifisch sondern kan überall für diesen Typ von Standordkarakteriserung angewendet werden. Die Methodik wurde in Schweden im Rahmen der Standortuntersuchungsprogramme für die Endlagerung von verbrauchten Brennelementen entwickelt und ist mit Hilfe von Daten des Äspö Hard Rock Laboratory validiert worden

Jan 1, 2003

By C. Yi, M. Onifade, B. Genc, S. Dineva, T. Zvarivadza, M. Khandelwal

Deep hardrock mines worldwide increasingly face rockbursts as mining depths increase. These events result from the accumulation and sudden release of stress, causing rockmass damage and posing major safety and operational challenges. This paper focuses on destress blasting as a critical strategy to mitigate rockburst hazards. Although limited practical experience exists in Swedish deep hardrock mines, international case studies demonstrate that, when well implemented, destress blasting redistributes peak stresses by promoting controlled fracturing around mining excavations. The success of such techniques is highly dependent on site-specific factors such as stress regime, rockmass brittleness, structural geology, and blast layout. Although destress blasting is especially effective in massive, brittle rock under high stress, typical conditions for strainburst prone environments, its design cannot rely solely on numerical models. Simulations can offer preliminary evaluation of stress redistribution trends and guide early design assessments but their current limitations, including sensitivity to input data and simplified fracture mechanics, mean they are best used as supplementary tools rather than final decision-makers. Field trials, supported by microseismic analysis and fracture mapping, remain essential for validation. The study critically synthesises international experiences and presents a structured framework for destress blasting design, offering practical and academic perspectives aligned with Swedish geological conditions to support safer and more efficient application in deep hardrock mines.

Jun 27, 2025

By K. Saito, Y. Miyauchi, T. Nishi, Y. Kizu

At Tokushima Plant of Nippon Denko Co., Ltd. high-carbon ferromanganese is produced by the electric furnace method using lump manganese ores and sintered manganese ores manufactured from fine manganese ores. However, the distribution of manganese ores is significantly uneven on earth, and their characteristics considerably vary by ore type. It is known from experience that the production of high-carbon ferromanganese by the electric furnace method depends greatly on material ores. Therefore, to maintain stable operation in the electric furnace-smelting field, it is important to identify the characteristics of each type of material ores in advance. Thus, we evaluated the high-temperature electric characteristics of manganese ores using the electrical conductivity measuring system developed by ourselves and provided the standards for determining ores and blending ratio necessary for stable operation of the electric furnace based on the evaluation results. This time we worked for optimisation of the high-temperature electric characteristics of sintered manganese ores through modification of the characteristics because the blending ratio of sintered manganese ores in the electric furnace is high. The electrical conductivity of sintered ores having various chemical components in a high-temperature region (up to 1 550°C) was measured using our electrical conductivity measuring system and high-temperature electric characteristics evaluating method reported at INFACON 9. As the result of the measurement, we revealed that the high-temperature electric characteristics of the sintered ores depend on their chemical contents and the sintered ores can be modified to those having excellent high-temperature electric characteristics by controlling their chemical contents, so that the resources can be effectively used.

Jan 1, 2004

By H. Dong

This paper presents a heat conduction model to determine the erosion profile of freeze linings in a ferronickel submerged arc furnace. Kirchhoff transformation was adopted to simplify the nonlinear equation governing heat conduction. The boundary element method (BEM) and Nelder-Mead simplex optimization method were employed to solve an inverse heat conduction problem. Erosion profiles could be obtained when calculated temperatures at sensor locations agreed well with measured temperatures. The model was validated by comparing the heat loss through the linings, which was calculated by BEM and integral operation after erosion profiles were obtained, with the value calculated from industrial data such as actual power consumption, tap-to-tap time, and ferronickel output. The optimal solution for the erosion profile could be acquired when the difference in heat losses calculated by these two methods is at a minimum.

Jan 1, 2014

By B. Andresen, S. T. Johansen, H. Tveit, S. Grådahl, B. Ravary

The Norwegian ferroalloy industry has high ambitions regarding environmental standards. Basic research work has been performed to improve the fundamental understanding of ferroalloy processes and the environ-mental aspects. This paper will present work dealing with the understanding of formation and control of NOx, PAH and dioxins. During this work various techniques and methods have been applied, such as comprehensive industrial measurements, laboratory experiments, model development and application of Computational Fluid Dynamics (CFD). The main goal has been to reduce the environmental impact of ferroalloy plants, by means of improving the combustion processes done by introducing new charging routines and optimized furnace operations, instead of installing expensive gas treatment systems. The Norwegian obligations in accordance with the Gothenburg protocol are to reduce the NOx emissions by 30%, compared with the 1990 level within 2010. Measures developed in this work have resulted in 40-60%reduction in NOx emission, and major reductions in PAH and dioxins for ferrosilicon and silicon metal plants. This has been achieved by introducing semi continuous charging and improved furnace operations. Semi continuous charging and optimized furnace operations are shown to reduce the blowing activity (i.e. emission of large quantity of SiO over the charge by direct channelling from the crater zone). It also reduces variation in off-gas temperature and dust production. To understand the processes and to achieve our results we have used online equipment, with fast sample rates and response times, to measure the off-gas compositions and temperatures. Most of the measuring techniques used are based upon optical principles making use of the absorption- and emission spectrum of the gases. In addition a new prototype instrument is developed for continuous measurement of off-gas characteristics, total dust amount and off-gas temperature. The presented work is a result of a long term co-operation research and development teamwork, between the industry and the research community, and has improved both the process and reduced the emissions. The work has introduced new process design and operation standards, and has resulted in ferroalloy production with better environmental standards.

Jan 1, 2007

By J. D. Steenkamp

Southern Africa has a history rich in the pyrometallurgical processing of ores. Two of the alloys produced are high-carbon ferromanganese (74?83 per cent Mn) and silicomanganese (59?67 per cent Mn and 14?31 per cent Si). The largest land-based manganese ore deposit in the world is based in the Northern Cape Province of South Africa. In 2010, 6.3 Mt of ore from the deposit was exported, mainly to China, Norway, Japan, and India, and an estimated 1.1 Mt beneficiated locally to produce manganese ferroalloys. In southern Africa the producers of manganese ferroalloys are Metalloys and Assmang, and of silicomanganese Transalloys, Mogale Alloys, and Match Corporation. Submerged arc furnace technology is utilized in the production of high-carbon ferromanganese (HCFeMn) and silicomanganese, applying the discard slag practice in both instances. The carbon content of HCFeMn is reduced using converter technology and that of SiMn using the Perrin process. Ninety per cent of the world?s manganese ferroalloys production is consumed by the steel industry. The consumption (and production) of manganese ferroalloys therefore closely follows worldwide steel production. From 2001 to 2010, the doubling of the worldwide production of manganese ferroalloys can be attributed to an increase in production capacity in Asia and Oceania, with the largest increase in the production of SiMn. Manganese ferroalloys produced in Asia and Oceania are mainly for the local market, with North America, Europe, Russia, and Turkey the major markets for alloys from southern Africa. The major challenges faced by the southern African manganese ferroalloy producers are increasing electricity tariffs and productivity of labour, which require a concerted effort by all parties involved to achieve a satisfactory solution. Keywords manganese ferroalloys, ferromanganese, silicomanganese, southern Africa, South Africa, manganese ore, high-carbon ferromanganese, refined ferromanganese, refined silicomanganese.

Aug 1, 2013

By Dhananjaya Senapati, E. V. S. Uma Maheswar, C. R. Ray

Carbothermic process of Ferro Silicon production is primarily a slag-less process. However, slag formation is observed in the regular operation as experienced by almost all the Ferro Silicon Producers in different pro-portions. The problem of slagging in the furnaces may be due to: a)Variation in the input burden charge material quality b)Fluctuations in the Carbon balance and/or c)Fluctuations in the Electrode penetrations The problem will be more severe in nature with the increase of the size of the furnace. The operation performance of the furnace gets badly affected if the slag formed in the furnace is not removed from the bath in time and to the maximum extent possible. It is, therefore, very essential to know the characteristics of the slag formed in the Ferro Silicon Furnaces, besides eliminating the very cause of formation itself; and to find the routes of draining of the same from the furnace bath effectively. This paper envisages the effects of using the LIME STONE in the Ferro Silicon Burden in stabilizing the 48MVA Furnace for improved performance and better consistency. Quality fluctuations in the available Raw Materials are compared with that of the requirements for the Ferro Silicon production. The furnace operational data is compared for 12 months period each for the period corresponding to the before and after usage of lime stone in the burden and found encouraging results in the performance. Implications of use of Lime Stone in the burden on the quality of the output alloy are also studied.

Jan 1, 2007

By N. V. Moraka

In dealing with transformational aspects, the South African Constitution aspires for a balance between attempts to broadly represent the country’s demographics in the way in which organizations are structured and the need to maintain the necessary skills to ensure continual retention of skills for optimum and efficient organizational performance. Through the Mining Charter, government aimed to redress gender and racial imbalances in the mining industry as part of transforming the demographic representation of mining companies to include black people, women, and people living with disabilities in all job levels up to top management. While the Constitution calls for an appropriate balance between demographic representation and competency, this aspiration for mining poses challenges for companies due to the proficient and competent skills needed in this industry. To this end, the South African mining industry has been subjected to substantial criticism from government regarding the slow progress of transformation. The mining industry justifies its slow pace of transformation by pointing at inconsistent, varying legislation and definitions governing transformation, limited skills available from historically disadvantaged groups, and cautioning not to compromise the sustainability of mining companies by marginalizing white males and white youth with the objective of addressing racial imbalances. This lack of understanding between industry and the government has led to considerable confusion regarding the accountability of stakeholders in transforming the industry. This article presents the perspectives of ten mining executives on transformation in the South African mining industry. The theoretical description of transformation, as well as other mining stakeholders’ interpretations of transformation. is presented. Qualitative data from interviews with mining executives demonstrates their understanding of transformation through rich descriptions, interpretations, and implications in their contexts. The findings demonstrate that transformation in the mining industry is not simply about race and gender, but about cultural change, a change in mind-sets, embracing diversity, equalizing rights and opportunities, and attaining social justice. Moreover, transformation is clearly a gradual process. The article concludes with a recommendation for the definition of transformation to be corroborated with the views of mining executives and that of the Constitution of South Africa. This will create an overarching, simplified definition of transformation that can be accepted and interpreted by all stakeholders.

Jan 1, 2016

By C. Nexhip, S. Sun

Critical to understanding and controlling phase mixing and separation in metallurgical processes, is the development of reliable experimental techniques to measure interfacial properties of melt systems. A series of experiments has been carried out to determine the effect of oxygen potential on the surface tension of liquid copper. Using an electromagnetic levitation method, a surface tension-oxygen chemical potential adsorption isotherm was produced for the Cu-O system at T 1400 K. The surface tension results show good agreement with the literature values e.g. within 3 per cent for pure copper. The Belton `ideal' adsorption isotherm was applied, and the following equation derived to best fit the experimental data ? =1251-77.5 1n41+ (2.79x105 . pO1/2)](mN.m Using this equation, the surface tension of copper was calculated/predicted as a function of oxygen potential at 1400 K, and showed excellent agreement with the experimental values. This confirmed that the adsorption behaviour of oxygen in liquid copper is ideal. The saturation coverage of oxygen on the surface of liquid copper was determined to be T0 = 6.65 µmoles.m,-2 corresponding to an area per adsorbed oxygen atom of ao ? 25 Å2. These values agree well with those cited in the literature, and our experimental data cover a very wide range of oxygen potential (10-5 to 10-17 atm). Keywords: levitation melting, surface tension, Cu-O alloys, oxygen potential, adsorption isotherm, surface coverage.

Jan 1, 2004

By G. R. Lane

A large opencast gold mining company in Africa had just completed a feasibility study for an expansion of the operations. A traditional net present value project valuation methodology had been used that showed a very positive net present value (NPV). The project team had conducted a qualitative risk assessment that identified and logged all potential project risks and had subjectively incorporated 'risk' via the discount rate and other assumption contingencies around gold price expectations, operating parameters, etc. Management requested that an independent quantitative risk modelling approach be adopted to obtain a better understanding of the impact of risk on the overall project valuation and confidence level in the final valuation. A detailed project valuation model was configured in the Cyest Carbon Modelling Technology platform, and the stochastic modelling module used to perform the Monte Carlo simulations. Analysis of historical operational performance data relating to actual achievements versus planned and budget determined the historical variability of the underlying parameters as well as variance to budget. This was done at a detailed level for mining rates and costs, processing rate, costs and recovery, and other operational efficiency measures. External market assumptions relating to gold price, exchange rate, and inflation were modelled and the dependency between them modelled using a copula. This case study will demonstrate the approach taken to building and populating the quantitative risk model and the overall results of the Monte Carlo simulation. The final valuation demonstrated that the project had a 44 percent probability of an NPV less than zero i.e. a 44 percent chance of project finance loss.

Jan 1, 2013