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By W. J. S. Craigen, G. E. Wittur

"In the context of today's continuously changing world, there are many factors which must be considered when attempting to assess the ability of Canada's primary copper producers to remain competitive in the face of increasing competition in world markets. In this paper, we have attempted to document those factors that will have the greatest impact on the future viability of Canada's copper industry, and to suggest possible strategies to fully utilize whatever inherent advantages Canada may have to enhance its competitive position. Technological factors related to the efficiency of precious and by-product metals recovery, energy type and utilization efficiency, production and sale of sulphur by-products, and control of 502 emissions are given high priority in this evaluation of Canada's future needs to remain competitive. Particular emphasis is placed on assessing the relative viability of hydrometallurgical versus pyrometallurgical processes for copper; to address uniquely Canadian conditions and problems. Due consideration is also given to the economic incentives required to allow Canada's copper producers to compete under anticipated world market conditions and to facilitate the continued development of Canada's copper resources. IntroductionWhen we try to assess the viability or competitiveness of any industry the bottom line is still usually, ""Can we produce a pound of product cheaper than the competition?"" Canada's copper industry is certainly no exception. However, as with most resource-based industries dependent upon exports, there are many factors which have a significant effect on the cost components which make up the total cost of producing and selling a pound of copper. It is desirable therefore to have as clear a picture as possible of the cost components, the major factors affecting them, and how they compare with the competition, particularly the third-world copper producers.In this paper we have attempted to provide a brief outlook for world copper markets and a brief overview of Canada's competitive position. We have also attempted to document those factors which will have the greatest impact on future production costs, and have suggested possible initiatives to utilize inherent Canadian advantages to enhance our competitive position. Special emphasis has been placed on technological initiatives designed to make full use of these ""advantages"", to develop superior beneficiation and extraction! refining technologies. Major factors considered in the present study are:"

Jan 1, 1986

By K. L. Boyd

"Can the increasing tonnages of ore and waste mined today be accommodated simply by using bigger and better crushers? This paper reviews the latest primary crushing and large cone crusher designs. It highlights how—in addition to using the larger crushers now available—maximizing the utilization percentages in each stage of the rock size reduction circuit will assist in meeting the larger production requirements of existing and new mining operations. Its goal is to help consultants and operators select the optimal equipment and custom-designed items in material handling from the mine to the mill, maximizing operating hours per year.RÉSUMÉ Le recours à des concasseurs plus grands et plus performants suffit-il à gérer l’augmentation du tonnage du minerai et des déchets que l’on extrait de nos jours ? Cet article examine les tous derniers modèles de concassage primaire et de grands concasseurs à cône. Il montre que, pour satisfaire aux exigences de production plus conséquente des exploitations minières existantes et nouvelles, il est important d’optimiser les taux d’utilisation à chacune des étapes du circuit de réduction de la taille des roches, en plus d’utiliser les concasseurs plus grands actuellement disponibles. L’objectif de cet article est d’aider les sociétés d’experts-conseils et les exploitants à sélectionner le meilleur équipement ainsi que des articles fabriqués sur mesure pour la manutention de la mine au concentrateur, en optimisant les heures d’exploitation par année.INTRODUCTIONAre larger crushers the answer to meeting the demands of existing or new mining projects for increased tonnage? Boyd (2002) predicted that larger crushers for primary and fine crushing would be beneficial and contribute to the further development of mineral processing. Larger crushers for primary and fine crushing applications have since become available.The rock size reduction process from the mine to the selected milling process facility has not changed since a person first broke a rock to get at the interesting mineralization within. The rock size reduction process circuit from the mine to the mill can be summarized in four stages:• stage 1: mining (rock breakage and fragmentation);• stage 2: prescreening (scalping);• stage 3: primary crushing; and• stage 4: fine crushing (secondary, tertiary, and quaternary).Plant throughput and ore delivery schedule will form the basis for flowsheet design and equipment selection. Once the project design criteria and the mine plan have been established, the circuit’s utilization percentage (percentage of hours when the circuit is being utilized) can be optimized for each of the four stages. The mining and process departments play a key role in the selection of the final comminution circuit, and both departments should be familiar with and contribute to the design of the circuit."

Jan 1, 2017

By Amauri Garcia, Rodrigo Valenzuela Reyes, Noé Cheung, José Eduardo Spinelli, Leonardo Fernandes Gomes, Rafael Kakitani

"The present research work deals with directional solidification (DS) of both Al-15wt.%Si and Al-15wt.%Si-1.5wt.%Mg alloys and further characterization of the related microstructures. The growth of refined primary Si and refined eutectic is well-known as positive in order to improve mechanical properties of the Al-Si based alloys. Alloying is also an effective method to strengthen the Al-Si based alloys, in which Mg is considered an important alloying element. However, lack of investigation regarding the effects of Mg on microstructure of these alloys is noted. So, in the present research work emphasis is given on both dendritic and eutectic growth being affected by solidification kinetics (V-growth rate and G-thermal gradient) during transient directional solidification. Experimental evolutions of microstructural spacing of both alloys have been determined which becomes possible to understand the effects of Mg coupled with the effects of growth rate on the final microstructural arrangements. A direct comparison of the tensile mechanical properties obtained for the alloys is also performed. It is shown by these correlations that the addition of Mg generally improves the tensile mechanical resistance with a minor decrease in ductility. Furthermore, the Scheil solidification path of the ternary Al-Si-Mg alloy was determined using the computational thermodynamics software Thermo-Calc, resulting in the following sequence of precipitation: Liquid-Si-a (Al)+Si- a(Al)+Si+Mg2Si. This sequence is compared with the experimental microstructure findings.INTRODUCTION Al-Si alloys containing from 4wt.% to 22wt.% Si comprise more than 90% of all Al-based castings. Parts manufactured with these alloys have a wide range of industrial applications due to their excellent castability, crack resistance, good corrosion resistance, good weldability, low density and high strength (Bray, 1976; Zolotorevsky, 2007; Reyes, 2017). Hypereutectic Al-Si alloys are widely used and researched in the automotive and aerospace sectors due to the low coefficient of thermal expansion, resistance at high temperatures, good wear resistance and high strength (Reyes, 2017; Tebib, 2013). Above the equilibrium eutectic composition (~12.5wt.%Si) the amount of primary Si particles becomes significant (Lasa, 2003). In the place of conventional hypoeutectic Al–Si, there is growing interest in hypereutectic Al–Si alloys as a candidate material for the high-quality engines because a higher volume fraction of silicon may bring about superior properties (Matsuura, 2003)"

Jan 1, 2017

By Will Callupe Arzapalo

The success of the minimization of blast induced-damage at Barrick?s Pierina Mine in Peru is the result of an effective working relationship between Mine Operations and the Geotechnical Services Department. A detailed design criteria manual is used to match the blast plan to the site?s varying rock types and slope designs. The Geotechnical Services Department has further developed a comprehensive pre- and post-blast checklist that is critical to the drilling and blasting process as it pertains to wall stability. Wall control blasts are evaluated with quality assurance field checks, vibration monitoring and frequency control, video assisted performance quantification and post excavation face profiling. These detailed observations are compiled and summarized in a blast performance evaluation that is considered to be an ?Industry Best Practice?. The information and detail provided by each performance summary allows accurate blast analysis and effective design refinement.

May 1, 2006

By L. Price, R. Hortie

Movement of ore and waste from the Hilton Mines pit is accomplished by truck haulage. With the aim of reducing costs, a study of truck fleet replacement was initiated. The study included on-site short-term tests and longer-term rental purchase agreements for haulage trucks. The operation and maintenance characteristics of different trucks, along with projected haulage conditions, were used to prepare cash flows, from which the most advantageous trucks were selected. The results of the study and implementation of the recommendations gave a cost saving greater than had been estimated. The study also indicated areas where improvements could be made, and resulted in much more attention being paid to road conditions, the training of operators and mechanics, and the development of a practical preventative maintenance scheme.

Jan 1, 1971

CORPORATE SOCIAL RESPONSIBILITY CSR is about how companies manage the business processes to produce an overall positive impact on society. - Indentured work, sexual slavery, fair trade, organic growing, business ethics, environmental issues, ?Right to know -Right to decide?, AIDS activism, civil society - Balancing stakeholder issues - Government responses Who are the bad guys? Where are the threats?

May 1, 2010

By Raymond S. Suglo

Increasing depths of mining coupled with the mechanization of most underground mining operations have led to growing complexities in the mine environments with the production of large amounts of gaseous and particulate contaminants. Over 100,000 lives have been lost due methane gas and dust explosions in coal mine workings in both the US and Canada since 1900 when the methane concentrations exceeded stipulated levels in some workings. There is therefore the need to constantly assess and evaluate the performance of the existing mine ventilation systems to maintain safe and acceptable mine environmental conditions in workings to meet the requirements of federal, state or provincial laws. This paper uses the results of continuous monitoring of methane concentrations conducted in selected development headings in coal mines in North America to assess the effectiveness of existing auxiliary ventilation systems in the control of methane gas concentrations in the headings. The results show that the average quantities of fresh air required to dilute, disperse and remove methane concentrations within set levels of one minute varied from 5.43 m3/s in Heading #11 (Condition 2) to 27.97 m3/s in Heading #10 (Condition 1) and this represented about 12 to 26% of the quantities required to dilute methane concentrations to safe levels within one minute under Condition 1 and 32 to 139% under Condition 2. The average dilution times in the headings studied were less than 8 minutes. The forcing efficiencies of the auxiliary systems in the headings studied ranged from poor to excellent implying that the auxiliary ventilation systems were capable of controlling the methane concentrations below statutory levels but may not be able to cope with large and unusual methane concentrations in the headings. This study is important to prevent methane gas and coal dust explosions in coal mines and thus avoid any loss of lives and property.

May 1, 2001

By Roorda H. J, R. R. Saddington, Curlook W

THE copper-nickel sulfide ore deposits of the International Nickel Company of Canada, Limited contain the minerals pyrrhotite, pentlandite, and chalcopyrite. In the extraction of the nickel, copper, and iron, much of the processing involves oxidation of the metals as well as sulfur. Roasting plays a predominant role at several stages in the operations which prepare the constituent metals for refining. Copper, nickel and iron concentrates of various grades, ranging from low-grade nickeliferous pyrrhotite to high-grade nickel sulfide, must be partially or completely oxidized. Figure 1 shows the main points at which roasting is conducted at INCO. Roasting experience at INCO dates back to the time when lump ore was partially roasted in heaps. It has progressed through single hearth roasters, sinter machines, multiple-hearth roasters, flash roasters, and more recently has centered on the development and utilization of fluid bed roasters. The primitive, slow, and inefficient method of heap

Jan 1, 1961

"The most widely used method for predicting the onset of continuous caving is Laubscher’s caving chart. A detailed examination of this method was undertaken which concluded that it had limitations which may impact on results, particularly when dealing with stronger rock masses that are outside current experience. These limitations relate to inadequate guidelines for adjustment factors to rock mass rating (RMR), concerns about the position on the chart of critical case history data, undocumented changes to the method and an inadequate number of data points to be confident of stability boundaries.A review was undertaken on the application and reliability of a numerical method of assessing cavability. The review highlighted a number of issues, which at this stage, make numerical continuum methods problematic for predicting cavability. This is in particular reference to sensitivity to input parameters that are difficult to determine accurately and mesh dependency.An extended version of the Mathews method for open stope design was developed as an alternative method of predicting the onset of continuous caving. A number of caving case histories were collected and analyzed and a caving boundary delineated statistically on the Mathews stability graph. The definition of the caving boundary was aided by the existence of a large and wide-ranging stability database from non-caving mines. A caving rate model was extrapolated from the extended Mathews stability graph but could only be partially validated due to a lack of reliable data."

Jan 1, 2003

By L. R. Bower

"This paper describes a highly versatile variable speed unit with a torque multiplication feature as a direct replacement for a fluid coupling .The unit is comprised of a modulating clutch with torque converter and lock-up options.The UCD does not start or stop the motor. This is carried out in the normal manner.The UCD continually monitors and rapidly regulates the output speed to the requirement of a set point demand from input signals or a pre-set program with full manual override.The pre-set program can include start and stop ramps, top speed and minimum speed regulation and also mid-speed set point with security for man-riding, etc. Speed variation is from zero to 100% on a constant duty basis.The input signals can be from any source, e.g. belt weigher. load profile bunker probes, mine monitoring system, etc.The UCD when fitted with a torque converter has a torque multiplication feature which automatically provides a starting torque up to two and a half times greater than the full load torque without exceeding the normal motor power levels.IntroductionIt is common practice in the mining industry to drive conveyors, whether they be belt or chain, through a transmission system incorporating a fluid coupling between the driving motor and gear-box .However, there are drawbacks and in an effort to attain a better degree of drive and control, two-speed motors - inverters cycle- converters - hydrostatic drives, etc ., have been introduced."

Jan 1, 1986

By Wm. Snow, J. R. Wallace, E. P. Duchemin

"GeneralA NOT INCONSIDERABLE proportion of the Canadian economy is dependent on the coal mining industry. This is particularly true of the eastern portion of Canada and especially so of the ( authors') province of Nova Scotia. Much has been said about the trying economic straits of the coal industry in Nova Scotia ( 1), faced, as it is, with difficult mining problems, with considerable distance from large markets, and with •competition from other (and usually foreign) fuels. It is of particular interest, at this time, therefore, to discuss one of the larger outlets for coal -that of the production of metallurgical coke.Scope of PaperWhile the title of this paper indicates that it deals with Metallurgical Coke in Canada, the authors beg leave to treat the Canadian industry very briefly and to deal specifically with coal, •coke, and smelting problems with which they are familiar, namely, the operation of the Dominion Steel and Coal Corporation in the Sydney, N.S., area. No mention is made of metallurgical coke for use in the •many foundries in Canada or in the non-ferrons metallurgical industries.Coal and Coke StatisticsA few statistics of the total output of .Canadian coal, production of metallurgical coke, and similar figures for the Dosco holdings (Sydney area only) are shown in Table I."

Jan 1, 1955

By S. Leong

This paper reports on research examining disclosures from mining companies regarding their water usage in the Macquarie and Lachlan catchment areas, both parts of the Murray-Darling Basin in New South Wales, Australia. The objective of the research was to assess whether this disclosure is sufficient to allow communities to determine whether mining companies are complying with mining conditions of consent and abiding by the requirements of their water licencing agreements. These requirements are then compared to the water reporting requirements of the Global Reporting Initiative (GRI) and the Water Accounting Framework for the Minerals Industry (WAFMI). Communities are concerned about whether the mining industry?s use of water will have impacts on their livelihoods and lifestyle and thus require information concerning the quantity of water that will be extracted, how much water will be left for other stakeholders and whether the mining will affect water quality. This is an archival study. It has involved examining relevant publically available information released by mining companies and government regulators and determining if this is sufficient to meet the needs of the local communities. Additionally, it has involved looking at information indirectly provided by mining companies, via the use of intermediaries. Further, information availability concerning basic water accounting and regulatory breeches and whether such information is available at the mine site level has been considered. It is found that while NSW legislation places very little reporting requirements on mining companies, the development consent conditions for new projects and extensions to existing projects are quite significant and should be sufficient to meet the needs of local catchment residents though such information is not always easily accessible for the layperson.

Aug 1, 2013

By G. Scott Zimmer

Mine planning at Cassiar consists of an annual cycle of projection, control, evaluation and revision following completion of annual diamond drilling during the summer months . The inherent difficulty in evaluating fibre grade and distribution, combined with a high-wall phase or push-back mining system, requires continuous modification to designs and schedules based on a cumulative evaluation of equipment performance and prediction versus production. To expedite the planning sequence, a mini-computer system has been introduced which allows emphasis to be placed on optimizing designs, exempting personnel from manual calculations and tabulations.

Jan 1, 1978

By Aleksandar D. Bugarski

Despite extensive research efforts conducted in the past decades, occupational health risks associated with exposure to nano and ultrafine aerosols emitted by diesel power equipment are still not completely understood. The complexity of physical and chemical properties of diesel aerosols, constantly changing with the implementation of advanced diesel emissions control technologies, make this task rather challenging. The objective of this paper is to identify and characterize nanometer and ultrafine aerosols emitted by diesel engines in the underground environment and evaluate the effects of selected contemporary control technologies on physical properties, chemical composition, and in-vitro toxicology of diesel aerosols. The physical and chemical properties of the nanometer and ultrafine diesel aerosols are to be characterized through a test series in the NIOSH Lake Lynn Laboratory experimental mine. The crucial part of the study has been development of a facility that allows researchers to generate field results with precision and accuracy characteristics of a laboratory environment. The knowledge obtained from this study should strengthen our understanding of the health implications related to exposure to diesel particulate matter and aid in assessing the potential of various control technologies for reducing this exposure.

May 1, 2007

By D. G. F. Hedley, F. Grant

"In 1958, the Ontario Department of Mines appointed a committee to study the accident situation and mining methods used in the uranium mines in the E1liot Lake district. This committee reviewed the existing knowledge on mine design, pillar support and roof spans and came to the conclusion that scientific knowledge had not yet reached the stage of producing rational design procedures which would reduce the dependence on trial-and-error methods. Since that time, the Mining Research Centre has made numerous stress measurements in two mines to define the pre-mining and pillar stresses. A comprehensive series of tests has been done in the laboratory to measure the compressive strength of the rock; a geological survey of the region has been made to evaluate tectonic stresses; and a survey was done on mining conditions with regard to stable and unstable pillar configurations. This information has been used to evaluate pillar design as effected by pillar width and height, depth below surface, extraction and pre-mining stress fields. The resultant design of pillar widths and corresponding extraction as the depth increased is in line with past and present experience in these mines. The information available on roof stability is still insufficient to design stable stope spans with the same degree of confidence; experience and trial-and-error methods are still required."

Jan 1, 1972

By D. P. Tripathy

A supply chain encompasses all the activities associated with the flow and transformation of goods from the raw materials stage(extraction), through to the end user. Supply chain management (SCM) is the integration of these activities through improved supply chain relationship, to achieve a sustainable competitive advantage and it rests on its ability to provide the right goods and services when and where needed. The supply chain is the vital component of any company?s value chain which links the operating processes to its supplier and customer. The globalization of business promises to offer new and unique challenges for the supply chain competencies of most firms. Challenges will also increase in the environmental aspects of supply chain often referred to as ?Green Issues?. The supply chain of mining industry comprises of the flow of material and information from the mine site, to processing and loading for transport, to the customer. However, due to recent changing environmental requirements affecting mining and mineral processing operations, increasing attention is given to developing environmental management (EM) strategies for the mineral supply chain. This paper focuses on: ? Environmental factors leading to the development of an extended environmental supply chain, ? Additional challenges presented by the extension, ? Performance measures appropriate for the extended supply chain, ? Developing a general procedure towards achieving and maintaining the green supply chain.

May 1, 2006

By G. Auld

"A simple method is presented whereby the additional quantity and static pressure necessary to compensate for ventilation duct leakage may be estimated using the circular reference functions of modern spreadsheets. Favourable comparisons have been made to the National Coal Board (United Kingdom) design charts and to a case study analysis. IntroductionIn mining, most ducted systems are applied to the development of access tunnels, and most of these systems leak to some extent. When the ventilation duct fails to deliver the required quantity of air to the work place, there is a significant contribution to the development costs, either directly or indirectly.Directly — More air and more pressure are required to compensate for the leakage, more capital development (ventilation shafts, parallel drives) are required because ventilation systems cannot push the fresh air far enough, and longer re-entry times to ensure toxic blast fumes to be diluted.Indirectly — There is a reduction in productivity because of the inclement atmospheric conditions, and/or closure of development ends because of unacceptable atmospheric conditions at the working place. This has been exacerbated over the last few decades because of the increased use of diesel equipment of ever increasing power, and the more stringent Occupational Health and Safety requirements demanding more air flow per kilowatt of diesel power.The leakage from a duct must, therefore, be reliably estimated in order to assess the effectiveness and construction of the system; assess the effectiveness of the maintenance or repair of the duct; appreciate the cost of the leakage, and therefore apply effective maintenance and installation procedures; and engineer safer, healthier and more cost-effective ventilation systems."

Jan 1, 2002

By G. B. Hudson

Previous papers (1, 2) pertaining to the treatment of uranium-bearing ores were concerned with the flotation of the radioactive minerals. In this investigation, the application of flotation to the removal of acid-consuming minerals from uranium ores was considered. Two pitchblende-bearing ores, which, because of the presence if dolomite were abnormally high acid consumers, were studied. In both in-stances commercial reagents of widely varying fatty acid composition proved satisfactory as flotation col-lectors, particularly at a pH of 10.5, for the carbonate minerals. From an economic viewpoint, however, Neo-Fat 42-12 was favoured. A mixture of sodium tripolyphosphate and citric acid was an effective depressant for the pitchblende in the ores. The tailings remaining after the removal of the dolomite by flotation contained, in one case, 88.5 per cent of the uranium in the original sample, and, in the other, 93.8 per cent. Analyses conducted on these tailings and on the original ores showed that

Jan 1, 1963

By D. R. Lentz, J. A. Walker

"Abstract -The Flat Landing Brook Zn-Pb-Ag deposit of the Bathurst Mining Camp occurs within a narrow thrust-bound nappe containing felsic volcanic and volcaniclastic rocks of the Tetagouche Group. Within the host nappe, the Tetagouche Group is represented by the Nepisiguit Falls Formation and the overlying Flat Landing Brook Formation. The Nepisiguit Falls Formation is divided into two members: quartz- and quartz-feldspar-phyric volcaniclastic rocks ± minor lavas (Grand Falls member), and aphyric, fine-grained volcaniclastic rocks (Little Falls member). The Flat Landing Brook Formation consists of aphyric rhyolite flows and interbedded pyroclastic rocks. Several gabbroic intrusions occur in both the footwall and hanging-wall sequences. These gabbros locally cut out the mineralized horizon at shallow levels, and are considered to be feeders to tholeiitic basaltic flows (Forty Mile Brook member) of the Flat Landing Brook Formation. The Flat Landing Brook deposit has many of the characteristics typical of volcanogenic massive sulfide deposits occurring within the highly productive Nepisiguit Falls Formation in the eastern part of the Bathurst Mining Camp. Mineralization occurs within or at the top of the Grand Falls member and comprises four or more massive to semi-massive sulfide lenses that vary in thickness between 3 and 5 m. Massive lenses are laterally gradational to, or underlain by, zones of disseminated sulfides up to 38 m thick. The deposit contains an estimated resource of 1.7 Mt grading 4.9% Zn, 0.94% Pb, and 19.54 g/t Ag to a depth of approximately 150 m. From 150 to 300 m below surface, mineralization is low grade and mostly disseminated. However, below 300 m, ore-grade (>10% Pb+Zn) massive sulfide lenses have been intersected over mineable widths. Oxide facies iron formation overlies and (or) grades laterally into the sulfide lenses. The oxide facies has strong positive Eu anomalies and gently sloping rare earth element (REE) profiles suggesting that it was formed from relatively hot acidic fluids that had interacted with felsic volcanic rocks in the footwall. In contrast, the silicate facies iron formation that is more distal to sulfide accumulations has very weak positive Eu anomalies and gently sloping REE profiles, suggesting either cooler hydrothermal fluids or dilution of the hydrothermal component by detrital material. Hydrothermal alteration has affected most footwall rocks. Most notably, albite-destructive alteration has resulted in Na2O depletion, whereas mass addition of K2O is manifested in the formation of sericite (white mica). In more intensely altered quartz- and feldspar-phyric volcaniclastic rocks of the Grand Falls member, feldspar destruction is accompanied by chlorite alteration, producing quartz-phyric rocks similar to those in the footwall of many Bathurst Camp deposits."

Jan 1, 2006

By Sabry A. Sabour

Metal price is among the key variables in the open pit optimization and the economic evaluation process. The common approach to handle metal prices in open pit mine planning is to optimize the ultimate pit and the mining schedules using a fixed, flat metal price. In this respect, metal price is assumed to be known with certainty throughout the entire mine life, which in some cases can reach 80 years. Given the volatile nature of metal markets and the metal price cycles, the conventional pit optimization approach may generate sub-optimized mining plans, which results in either extra costs to mining projects or lost revenues, or both. Long-term operational decisions such as future pit expansions, beyond the currently optimized limits, cannot be handled using the pit optimization approach based on flat metal prices. There is a growing interest in the mining industry to model and manage such market uncertainty in the pit optimization as well as the project evaluations in order to maximize the value of mining operations. In this paper, the author will outline a practical approach to optimize the ultimate pit taking into account the volatility and variability of metal markets. The proposed approach uses a combination of the pit optimizer of the commercial MineSight package and a simulation-based economic modeling real options valuation approach employing the least-squares Monte Carlo algorithm. MineSight pit optimizer employs both the floating cone for initial optimization exercise and the standard Lerchs-Grossmann algorithm. In this paper, Lerchs-Grossmann option will be used to generate the pit shells. Real options valuation approach used in this study is based on generating multiple metal price scenarios. Metal price uncertainty is modeled using stochastic metal price models such as the geometric Brownian motion and the mean-reverting process. The mining operational scenarios corresponding to the simulated metal prices are then optimized using the least-square Monte Carlo approach. The objective is to maximize the discounted cash flow value of the project while incorporating the operating flexibility to revise the operating status of the open pit with time as new information becomes available. The focus of this work is on the practicality of the proposed uncertainty-based pit optimization approach and the difference it can make to the technical operational mining decisions. A case study of a hypothetical open pit poly-metallic mine is provided. The deposit contains copper, gold and silver grades. The run of mine ore is sent to the process plant that produces copper concentrate with copper as the main metal and gold and silver as the by-products. Four uncertain variables are considered here include copper, gold, silver prices and foreign exchange rate. Both copper price and exchange rate are modeled using the mean-reverting process while gold and silver prices are modeled using the geometric Brownian motion. The case study is performed using both the conventional flat price pit optimization approach and the proposed uncertainty-based one to compare results.

Aug 1, 2013