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By S Juras

The terms measured resources and proven reserves denote the highest level of estimation confidence in all of the major classification schemes. But what do they really bring to today’s project or mine with respect to production planning and expectations? Initial reserve declaration does not need measured resources, just indicated resources. Economic viability of a project is assessed on total reserves with nary a bonus for the amount of proven reserves. Production plans are based on grade and tonnage goals that may only coincidently correspond to proven reserves. So are the measured and proven categories still relevant? Historically, and almost exclusively in underground mines, companies only allowed mining in areas of proven reserves. Some companies still follow that philosophy. But many others will mine a mixture of probable and proven reserves without hesitation. Also what of the undeveloped project in a new district – what is to be made of their declared measured resources and proven reserves? Measured resources are commonly set either by some type of proximity to data scheme or a matter of ‘feel’ based on the qualified person’s experience. The parameters for reserve conversion focus on the project as a whole and then a portion becomes classified as proven reserves almost solely based on whether the resource category is measured. So should the mining industry continue to use these categories of resource and reserve classification? This paper will present arguments about making these categories once again more relevant. A more disciplined usage of these categories may re-introduce their relevancy in public disclosures of resources and reserves. As well a more consistent usage in operations may lead to increased confidence in managing production targets and costs.

Aug 22, 2011

By Holmes RJ, Sowerby BD, Watt JS

Major improvements have taken place in mineral and coal processing in the last decade. The development of nuclear on-line sensors that continuously analyse the material being processed has led to better control of metalliferous mineral processing and increased recovery of valuable minerals. The recent development of on-line techniques for analysis of coal is expected to be of similar Importance. Australian developments in on-line nuclear gauges are reviewed. These include systems for in-stream analysis of mineral slurries with comments on plant operating experience; on-line determination of ash in coal using low energy Y-ray transmission and pair production techniques; in-stream determination of solids weight fraction and ash content of coal in slurries with variable voidage; and on-line determination of moisture in coal, iron in high grade iron ores and sulphur in lead sinter.

Jan 1, 1986

By J M. Galvin

The traditional engineering approach to assessing stability is based on comparing resisting force (capacity) to driving force (demand), or strength to working stress. In underground coal geomechanics, considerable effort has been expended on quantifying the strength of rock structures. However, this has not been matched by advances in determining the load acting on these structures, reflecting a reluctance by some to embrace numerical modelling to assess load magnitudes and distributions. Numerical modelling is a valuable aid as loading environments are a function of both the stiffness of the mine workings and the stiffness of the superincumbent strata and are statically indeterminate in most cases.This paper defines stiffness, which is often confused with elastic modulus. It shows that, effectively, stiffness encapsulates geology, depth of mining, panel width, pillar width and mining height. Therefore, these factors are variables that need to be taken into account when determining stress magnitudes and distributions about mine workings. A range of examples are presented that illustrate the significance of the stiffness of the superincumbent strata on surface subsidence; the magnitude and distribution of pillar and abutment load; and aspects of bord and pillar mining, pillar extraction and longwall mining. These examples provide bases for identifying the limitations of some empirical approaches to mine design, identifying how to compensate for some of these in design processes; and emphasising the need to make greater use of numerical modelling in understanding and quantifying loading environments in underground coal mining.CITATION:Galvin, J M, 2014. The significance of superincumbent strata stiffness and its impacts on coalmine design, in Proceedings AusRock 2014: Third Australasian Ground Control in Mining Conference , pp 3–16 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 5, 2014

By X Yu, Y Shen

The iron ore products should be assessed in terms of in-furnace behaviour and overall furnace performance, their operation should also be optimised under industry-scale blast furnace (BF) conditions, in order to be sustainable and competitive, especially in the context of decarbonisation efforts in ironmaking. While lab and pilot-scale experiments can provide useful kinetics, they are expensive and risky and cannot replicate industry-scale blast furnace conditions for proper assessment and optimisation. In this paper, we review our recent progress at Shen Lab of UNSW in using state-of-the-art Computational Fluid Dynamics (CFD) models to assess iron ore products and examine the effects of their operations on BF behaviour in basic terms, including in-furnace phenomena (flow field, temperature field, species distribution fields etc) and overall BF performance (coke rate, reduction efficiency and top gas temperature etc). We have developed state-of-the-edge CFD models for different purposes, ranging from the static-state BF model featuring unique layered burden structures for offline assessment and optimisation knowledge building-up for iron ore products, to the transient-state BF model for online assessment and optimisation of iron ore productions by describing the transient behaviours of iron ore productions under industry-scale conditions. First, we have studied several iron ore products including the iron ore products used in the present BFs and emerging iron ore products like carbon composite briquette and iron-coke. Second, several iron ore operations are studied including optimisation of conventional burden operations like oxygen enrichment, batch weight tuning and new operations like coke central charging and hydrogen injection in BFs. Third, some time-sensitive operations are also investigated including the use of wet burden materials and the drop in blast temperature on BF performance. These CFD models offer cost-effective research tools for understanding the effect of iron ore products on BF performance and serve as a reliable marketing tool for existing and emerging iron ore products under a wide range of BF conditions.

Sep 18, 2023

By G Barla

In Europe, a major interest in the infrastructure and tunnelling fields is in the new crossings of Alps in the form of base tunnels, which are important components of the high-speed (for passengers)/high-capacity (for freight) Trans European railway corridors. These tunnels cross the mountain belt at the elevation of the main cities and basins located all around the Alps and are longer (up to 57 km) and deeper (up to 2500 m) than all tunnels constructed in the centuries before. The excavation of the first Alpine railway and road traffi c tunnels could in general be carried out successfully by conventional excavation methods. With the great lengths of the new base tunnels, mechanised excavation by using tunnel boring machines (TBMs) is imperative as it contributes significantly to savings in construction time and costs. Questions are however posed on the adoption of such a systematic tunnel construction method given the severe ground conditions which are some time anticipated along the tunnel alignment, with possible major geological hazards such as water inflow in heterogeneous fractured or karstifi ed rock masses, stress-induced tensile failure of hard rocks, and plastic shear failure and squeezing of weak rocks, etc. This lecture is to briefly review the current state-of-the-art in the understanding and modelling of two such critical hazards as spalling/bursting and squeezing ground behaviour. With the present interest in the design of mechanised tunnelling with TBMs in such conditions, the complex interaction between the rock mass, the tunnel machine and its system components, and the tunnel support is studied in detail by numerical modelling. The research and development efforts presently underway with the intention to provide the designer with a novel three-dimensional (3D) simulator of mechanised tunnel excavation are presented. Case examples are discussed with reference to the Lyon-Turin Base Tunnel design.

Mar 8, 2011

By M Barley, C A. RosiFre, L Lobato

The Carajßs iron ore deposits contain approximately 17.5 billion tons of ore with >64 per cent Fe and occur in the eastern part of the Amazonas Craton. They are hosted by jaspilitic banded iron-formation (BIF) of the Carajßs Formation which, together with metavolcanic rocks, comprise the ~2.75Ga Grpo Parß Group of the Itacai·nas Supergroup in the ~1000 km long, E-W trending Carajßs Synclinorium. The Carajas Formation comprises discontinuous layers and lenses of partly dolomitised BIF (17 - 43 per cent Fe and 35 - 61 per cent SiO2) and lenses of high-grade iron ore, cut by mafic sills and dykes. The high-grade iron ores occur as large tabular bodies of friable (soft) hematite with smaller lenses of hard (compact) hematite. The hard hematite ores typically occur at the contact with the underlying volcanic rocks and are surrounded by an aureole of hydrothermal carbonate alteration. BIF that has been overprinted by dolomite and magnetite crystallisation has recently been discovered at depth in the N4E Mine. With increasing amounts of carbonate, the original lamination (microbanding) and other fine primary structures in the BIF have been progressively obliterated resulting in alternating carbonate and iron oxide mesobands. The friable hematite ore that is characteristic of the Carajßs deposits results from ongoing weathering and leaching of the carbonates from this type of altered BIF. The hard hematite ores probably result from more extensive early oxidation. The association of both carbonate-altered and jaspilitic BIF with the N4 Mine is similar to that observed at the Mount Tom Price deposit in Western Australia, where carbonate-altered BIF occurs below massive hematite ore with a jaspilitic halo developed above the orebody. This indicates that as at Mount Tom Price, hydrothermal carbonate alteration and associated loss of silica from BIF may be an important step in the formation of these giant hematite deposits.

Jan 1, 2002

By A C. Robertson

World urban expansion puts constraints on the available land surface area of our major cities both for accommodating people as well as providing infrastructure and services whilst at the same time attempting to preserve the remaining natural environment. Whilst consideration is often given to underground planning for private and public transport infrastructure, the author is of the opinion that the current lack of underground planning of our cities that are suitable for underground development will have major long implications when finally the need for underground space planning is critical and ultimately recognised. This paper identifies the need for our city planners to integrate surface planning and underground planning as a ‘total planning solution’ where the city plan incorporates the elements of underground space planning as identified in this paper. Investigations by the author reveal that there are very few cities in the world that actually incorporate underground space planning in their city plans. The author uses the City of Brisbane as a case study for the potential introduction of underground space planning as part of the city plan. Despite efforts by the author to include the planning concept of underground commercial development in the latest Brisbane City Plan 2014 as well as four underground space workshops in Brisbane over the past 20 year through the Australasian Tunnelling Society (ATS), underground space planning for the City of Brisbane, apart from infrastructure projects, is not considered of significance to the City of Brisbane.CITATION:Robertson, A C, 2014. Commercial underground space – planned development for the future, in Proceedings 15th Australasian Tunnelling Conference 2014 , pp 513–518 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 17, 2014

The mining industry has expanded significantly in the Pacific Region over the past two decades through a mix of new developments and brownfields expansions of existing operations. Despite this overall success there are also a number of well publicised examples of less than successful minerals ventures. These problem developments highlight the fact that success cannot be taken for granted and that rigorous planning and attention to detail is essential. The dominant growth has come through expansion of existing businesses, notably alumina, iron ore and coal, achieved through both efficiency gains on existing plant and step change capacity additions such as new mines and/or expanded processing plant. This expansion has largely been linked to increased market opportunities. The major issues are the quality and extent of the host resource, achieving the market targets, and the efficiency of the expansion effort. There can be also a range of site specific issues which need to be addressed. The development of new greenfields operations is often more complex as it can bring a wide range of new issues. Depending on the nature of the development, and the companies involved, these can extend from initial financing through to obtaining a market position. Incorporating major new technology and/or establishing infrastructure and attracting staff to remote locations can also add significant challenges. This paper outlines many of the critical factors which need to be considered prior to proceeding with major expansions or greenfields developments. These will be linked to a number of developments in the region over the past decade.

Jan 1, 2004

By J Berg, M Hahn, R Winkel

Imaging sensor systems designed for the mining and minerals industry incorporate different physical measurement technologies that can be used to detect the machine environment, such as laser, ultrasonic/sonar, video and RF-sensors. The underlying physical measurement principles cannot be employed in most applications near the face without regular maintenance due to the harsh environmental conditions like dust, dirt or moisture. However, that is the area, where imaging sensors are most valuable to the machine operator. In the domain of 2D radar sensors these have been either restricted by the angular coverage area or by limited adaptability of signal processing algorithms. The unique full digital solid state design will establish a generation step in mining applications.In order to fill this gap of terrain imaging sensors, the Institute for Mining and Metallurgy Machinery (IMR) of the RWTH Aachen University, in cooperation with the radar company indurad, developed an imaging sensor based on radar technology employing the digital beam forming (DBF) concept. Through multiple transmitting and receiving antennas the sensor delivers high accuracy range and angular information. Using adaptive digital signal processing with multiple imaging algorithms and target detection routines, data of the surrounding environment can be used to enable automation functions in mining.A comprehensive range of radar scans in different environments have been evaluated and benchmarked by using laser scanners. Accuracy measurements in range and angular direction have shown minimal differences. Experimental measurements have been performed at slopes, on conveyor belts and hot cement clinker silos. The experimental system uses a frequency modulated continuous wave (FMCW) front-end combined with a processing unit for signal analysis and target detection.

Sep 26, 2011

By D Drinkwater

In 2009, Peter Munro and Peter Tilyard examined the “human capital” in the mineral processing sector in a paper entitled Back to the Future (Munro and Tilyard, 2009). One of their major concerns was a general decline in technical skills and process knowledge, exacerbated by lack of appreciation of the impact this can have on process plant performance and, ultimately, profitability or sustainability of the industry. There are many reasons for this decline, not least of which are the work schedules of today’s metallurgists which have a very different balance between technical and non-technical responsibility than those in the past. However, a shift towards a more technical focus has potential to deliver a range of benefits for industry at large and for the individuals in it This paper discusses some options for development of core metallurgical and process engineering skills that can be used by graduates, employers and training providers.Key skills are identified and mapped against available opportunities for development, such as existing graduate programs, on-the job training and external courses. The authors also review a number of past and present high-quality graduate development programs, including the graduate development program in place at Mount Isa Mines in the 1980s and the Anglo Platinum Graduate Development Program (AGDP) currently operating in South Africa.

Aug 8, 2011

By D A. Sketchley

The Merlin Zone, a 2008 high-grade Mo-Re discovery, is a part of the Mount Dore Deposit in the Eastern Succession of the Mount Isa Inlier in Queensland, Australia. Hosted by carbonaceous metapelites and phyllites, the Merlin mineralisation comprises molybdenite veins, breccia infillings, stylolitic fracture fillings, and disseminations. Because rhenium is geochemically similar to molybdenum and commonly associated with it, global production of rhenium has been mostly a by-product of molybdenum refining. The high-grade rhenium in the Merlin Zone is an exciting discovery that is expected to become a direct source of rhenium. At the time of discovery, quality assurance (QA) procedures for rhenium were not in place at the Merlin Zone; therefore, they needed to be developed.The Merlin Zone was discovered using reverse circulation drilling, which led to concerns about molybdenite loss due to poor sample recovery. The twinning of the discovery hole with diamond core demonstrated a two-fold increase in molybdenum grade over several tens of metres. Consequently, the resources of the Merlin Zone were defined using assays from diamond drill core.Early analytical work, which was initially done only for molybdenum, comprised geochemical analysis with an aqua regia digestion, which have poor precision and can be biased low. Although initial testing for rhenium used similar procedures to those for molybdenum, a scarcity of commercial rhenium reference materials led to a validation process using neutron activation analyses and different digestions. This resulted in introduction of four-acid digestion assays, development of matrix-matched reference materials, and improvements to the quality of molybdenum and rhenium assays for reporting resources. Coarse and pulp duplicates were used to check for sampling bias and to ensure that levels of precision were adequate for the style of mineralisation and analytical methods. In addition, the direct and consistent geochemical correlation between molybdenum and rhenium provided another method for checking analyses.

Aug 22, 2011

By J A. Rowland

When executing a ventilation change the mine ventilation circuit is in a state of flux throughout the entire change period with discrete mine areas both under ventilated and/or over ventilated during the change process. Whilst routine risk reduction strategies such as removing electrical power and people from the mine are commonly deployed it is wise to complete the change in the shortest practical time frame. This not only minimises the chance of unacceptable concentrations of contaminants accumulating around the mine but reduces the impedance on production activities which are routinely suspended during these change periods. This paper firstly highlights the importance of the maintenance of an accurate ventilation model and discusses issues which should be considered to assist to maintain in it a suitable state of health. Further it provides some tips on how to monitor that your model is in an acceptable state of tune so that it can be confidently deployed in the change process. Finally, it details the sequential process how a finely tuned and accurate ventilation model can be utilised to carry out major ventilation changes according to appliance pressure adjustments only and without the need to constantly measure and check resultant branch flows throughout the whole change process. Also discussed are some simple practical tips which will help ensure that the ventilation change process will go according to the devised plan on the day and in the most appropriate order including checking the efficiency and accuracy of the change, after it is completed.

Oct 12, 2022

There are still vast areas of Australia in which either the hydrocarbon potential has already been indicated but from which no hydrocarbons have been produced or else are completely untested. Despite the lack of recent new oil discoveries, it is anticipated that initial gas discoveries in these areas will be followed by oil discoveries as has happened historically. General exploration activities are continually providing new information that is being input to update previous hydrocarbon assessments for Australia, and all indications are that future exploration efforts will discover a lot of gas, some small oil pools and there is a chance to prove a major new oil province. Because of this, it is anticipated that reserves growth will continue at the average historical rate of about 200 MMB/year until the year 2000. The most frequent scenario will be costly exploration resulting in small oil discoveries and high development costs. This, in the past, has resulted in low profitability for Australian oil exploration, but windfalls for the Australian government.

Jan 1, 1981

By J Palise

As cities become more populated and the need for tunnelling increases, we continue to dig deeper urban tunnels in more challenging ground conditions. At the same time our expectations for durability and long-term performance are increasing.It has become increasingly apparent in recent years that repairing water leaks in tunnels can be very costly and unplanned infiltration can cause undesirable outcomes for long-term maintenance costs, structural durability and environmental impacts. For this reason, tunnel constructors are investing more time and effort upfront into drainage and waterproofing systems.Tunnel membrane systems are becoming accepted as a necessary part of tunnel construction, however the knowledge surrounding selection of appropriate systems, design detailing and installation methods has not increased at the same rate. Currently Australia relies heavily on International Standards from Europe and the United States with no immediate program in place to establish our own locally relevant industry standards.This paper gives an overview of where the industry in Australasia is heading in terms of adopting relevant standards. Current basic waterproof detailing options for drained and undrained tunnels with success and failure of various methods are also addressed. Finally we look at the Brisbane Airport Link as a case study for how tunnel waterproofing contract methods, design and installation issues are being addressed in context with recent projects including the Epping to Chatswood Rail Link in Sydney, Auckland Northern Gateway Tunnel, Eastlink Tunnel in Melbourne and Sydney City West Cable Tunnel.This paper’s primary objective is to propose guidelines for how tunnel waterproofing could be implemented on large infrastructure projects in the future and to map a path for preparing and introducing a ready to use document for selecting appropriate tunnel membrane and drainage systems whilst implementing detailing methods which are appropriate for local conditions.

Mar 8, 2011

By M A. Noppé

"Investors and other stakeholders assessing the risk, opportunity and relative value associated with a resource project need to appreciate the project in its correct context. Errors, omissions, biased reporting or conflicting information in project reporting may lead to a misinterpretation of technical and financial results, resulting in biased estimates or assumptions on project value.This paper provides a simple ‘Resource Project Framework’ for presenting a project’s status that may be readily benchmarked against other similar projects and to illustrate the stages required to advance the project outcomes to higher levels of certainty. The framework draws on definitions and guidelines readily available in various resource industry reporting codes and public company reporting requirements.The framework assesses three key areas for placing a resource project in its correct relative context, namely:the project development stagethe confidence in the Exploration Results, Mineral Resources and/or Ore Reservesthe level of accuracy, precision and confidence in the technical and economic studies supporting the reported results or options for the project.The application of the Resource Project Framework is illustrated using two project examples, one from publicly reported company project releases and the other for two development projects.CITATION:Noppé, M A, 2016. A framework for presenting and benchmarking resource projects, in Proceedings Project Evaluation 2016, pp 260–274 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By K Williams, T Donohue, W Chen, T Roessler, A Katterfeld

Wet sticky iron ore poses particular difficulties in every aspect of the material handling process. Material hang-ups in bins, pipes and chutes; carry-back and spillage due to insufficient belt cleaning; clogging of screens; malfunctioning of crushers as well as rat holing of gravity reclaimed stockpiles are all predominantly due to the inherent cohesion and adhesion characteristics of the wet, sticky ore (Roberts, 1993). Limited understanding and quantitative measures on the stickiness of such a material significantly lower the mining operation efficiency.This research aims to investigate the cohesion and adhesion characteristics of the wet, sticky ore on physical modelling, experimental techniques and numerical implementation. Initially, the suitable bridging mechanism that contributes to the cohesive and adhesive forces within the iron ore material was identified (Hering, Martin and Stohrer, 1989; Rumpf, 1958). A cohesion/adhesion energy density factor based contact model was then introduced to describe the stickiness of the material. Secondly, an experimental system was proposed to directly test the stickiness of the material. Such a system is able to obtain both the cohesive/adhesive shear force and tensile force of the material at a specific moisture content. Lastly, the implementation of the proposed cohesion/adhesion model into the discrete element modelling (DEM) software was also discussed. A cohesion/adhesion calibration for modelling wet sticky iron ore in DEM was then conducted to ensure the material modelled in the simulation is reflective of the reality.From the study, understanding of the cohesion/adhesion characteristics of the wet iron ore material is significantly enhanced. Experimental and numerical outcomes can be directly applied for better designing or optimising the material handling processes that involve wet sticky iron ore. Consequently, the mining operating costs can be greatly reduced.CITATION:Chen, W, Donohue, T, Williams, K, Katterfeld, A and Roessler, T, 2015. Modelling cohesion and adhesion of wet, sticky iron ores in discrete element modelling for material handling processes, in Proceedings Iron Ore 2015, pp 387–392 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By K J ROSENGREN

Underground rock mechanics was initiated as a formal discipline in Australia by early studies for underground structures for the Snowy Mountains Scheme in the 1950s. These techniques were quickly embraced by underground mining and there has been steady development to the present time. The paper reviews the status of current techniques for rock mechanics studies and discusses some important issues such as ground support, mine filling and caving. It concludes that a considerable degree of engineering judgement is still required for the practical application of rock mechanics to underground mine design.

Jan 1, 1992

By Cocks T

The 15-year long debate between the industry, Government and Aboriginal people about the rights and wrongs of Land Rights, the right of Aboriginal people to control development on their land and the relationship between the parties, has been long and often bitter. It has so far been a war of words and often the truth has been the first casualty. This paper looks at the debate and presents the perspective of Aboriginal people, as well as looking at how the industry and Aboriginal people can work together for everyone's benefit. It addresses such matters as: ò why Aboriginal people believe they have the right to control development on their land; ò the perception that Aboriginal people are anti-development; ò the perception that Aboriginal land is 'locked-up'; and ò how companies can negotiate with Aboriginal people.

Jan 1, 1994

By P B. Hills

This paper discusses the computerisation of the drill hole database, some historical records and the creation of a three-dimensional model of the gold bearing structures for resource estimation and mine design at the Beaconsfield Gold Mine in northern Tasmania. The phase of the work reported here commenced in November 1997 and was completed in March 1998. The historical mining on the Tasmania Reef had reached a depth of 450 m below surface when work ceased in 1914. Production up to this time was 854 000 ounces gold. Recent activity has concentrated on testing depth extensions of the previously mined ore structure, to a depth of 1000 m below surface, and the establishment of an underground mining operation to exploit this resource. The lode structure at Beaconsfield is a typical mesothermal vein style deposit. Gold is contained within narrow quartz, carbonate and minor sulphide reefs or veins. Reef width is variable from a few centimetres to several metres with æsplitsÆ or bifurcations being common. The reef averages 2.7 m true width in the economic zones. The key feature of this style of mineralisation is that reef continuity can be confirmed by drilling to a high level of confidence, but the gold grades are somewhat more erratic in nature. The resource estimates were based entirely on drill data. The drill intercepts on the reef were coded for each split directly into a database and these allocations validated graphically. The distribution of grades and widths show an increasing gold grade with reef width for both the drill hole and historical data. The same histogram patterns, mixed populations and overall arithmetic average grade for the historical mine (at 21.52 g/t > 3 g/t Au) and new drill data (at 21.55 g/t > 3 g/t Au) would indicate that there has been no major change in the overall style or grade of the ore from the historically mined areas to the new resource. The reef, host geology, area of historical workings and resource zones at the Beaconsfield Mine were defined as a series of closed wireframes. The Tasmania Reef was modelled as five mutually exclusive wireframes, one each for the Main Reef, Footwall split, Second footwall split, Third footwall split and Hangingwall split. The data for this exercise was extracted directly from the drill hole database, stored in Microsoft Access format. The formation of the solids was largely automated with manual validation and refinements allowing for multiple runs using different interpolation methods and combinations of drill holes. A rotated 3D-block model in the plane of the Tasmania Reef was created to contain the grade model and allow for tonnage, grade and reef width estimates. An inverse distance squared (ID2) interpolation method was used with ranges of 25 m along strike and 125 m down plunge with blank areas infilled with 50 m by 250 m. Each reef split was filled separately using only drill intercepts from that split. The method was independently validated used MIK methods. Longitudinal sections have been prepared showing gold grade, reef width and width +grade. Estimates were also made for arsenic, sulphur and other minor elements. The long sections show three distinct mining zones. A method is presented for the conversion of the resources to reserves by the addition of mining parameters for minimum mining width, minimum pillar, cut-off grade and internal and external dilution. The selection is done on columns within the block model, and allows for all splits to be considered at once. Multiple runs can be made for varying combinations of parameters to test different mining methods and their impact on reserves, mine life and NPV.

Jan 1, 1999

By Dodd SF

Valuation of mining companies and their underlying assets prepared by brokers' analysts are, by necessity, approximations. The reliability of the valuations is entirely proportional to the quality of available data, the reliability of forecasts and the nature of underlying commodity price assumptions. The latter is perhaps the greatest single cause of gross variations in company and asset earnings estimates and- valuations. Assumptions are often necessary regarding commodity price achievement based on commodity hedge positions. Public disclosure from listed companies provides a sound base from which to project earnings, cashflows and balance sheets. The uncommon disclosure of projected production and cost schedules often reduces the reliability of future estimates. The application of reserve and resource estimates is contentious with practitioners applying differing weightings to importance of resources in estimating mine lives (and therefore cashflow streams). Valuation methods applied in equity markets usually focus on relative value and the identification of pricing anomalies. The commonest ""rules of thumb"" applied in the valuation of mining companies (and therefore their underlying assets) is with the use of year specific price/earnings (P/E) and price/cashflow (P/CF) ratios, with low multiples suggesting undervalued assets, high multiples overvalued situations (but these rules can often be clouded by market expectations of underlying commodity price movements). Another simply applied valuation tool is to examine the examine the value placed on reserves and resources by the market. Inexpensive gold in the ground (expressed as $ of market capitalisation per ounce of reserves or resources) might indicate a buying opportunity, but the market does discount the value of gold in the ground prior to mine development and where development risk is perceived.

Jan 1, 1994