Senior Mine Design Project: Black Gold #7 Mine · · 2005-06-06Senior Mine Design Project: Black Gold #7 Mine ... Finalize Approved Mine Plan 3 Surface Facilities Design, Bid,

Senior Mine Design Project:Senior Mine Design Project:Black Gold #7 MineBlack Gold #7 Mine

Joseph ZirkleJoseph ZirkleMine Design Final Report Fall 2004 Mine Design Final Report Fall 2004

Presented for Seminar 25Presented for Seminar 25thth February 2005February 2005

Presented by: Joseph Zirkle

Outline:Outline:Location of the projectLocation of the projectProject ExplorationProject Exploration

Reserves and QualityReserves and QualityOverlying StructuresOverlying StructuresProject ScheduleProject ScheduleProject Mine PlanProject Mine Plan

Timing ForecastTiming ForecastTransportation & MarketingTransportation & MarketingEquipmentEquipmentPersonnelPersonnelEconomics Economics –– Cost AnalysisCost AnalysisConclusionConclusion


Location:Location:Located 5 miles NW of Star City Located 5 miles NW of Star City

Pittsburgh #8 Coal Seam Pittsburgh #8 Coal Seam 38,514 Acres38,514 Acres

533 Million in533 Million in--seam tons of coalseam tons of coalData collected based on 51 core drill holesData collected based on 51 core drill holesAverage seam thickness = 7.5 ftAverage seam thickness = 7.5 ftOverburden thickness = 300 to 1,200 ft. Overburden thickness = 300 to 1,200 ft.

Mostly consisting of Mostly consisting of limestoneslimestones and and shalesshales


Min

Proje

Bla

Draw

Appr

ZTra

Approximate Limit Pittsburgh seam

Railways

Interstate Highways

Barge Waterways

State Lines

County Lines

Power PlantsLedgend

Zorro Mining Co.

B

FIRST ENERGY CORP.

KAMMERAMERICAN ELECTRIC POWER CO.

MITCHELL AMERICAN ELECTRIC POWER CO.

PLEASANTSALLEGHENY POWER

WILLOW ISLANDALLEGHENY POWER

Ohio River

Ohi

o R

iver

ngahela

Cheat Lake

Preston Co.Marion Co.

Harrison Co.

Wetzel Co.

Doddridge Co.

Tyler Co.

Monongalia Co.

Taylor Co.

Barbour Co. Tucker Co.

Pleasants Co.

Washington o.

Monroe Co.

Marshall Co.

Green Co.

Feyette Co.

ALBRIGALLEG

FT. MARTINALLEGHENY POWER

RIVESVILLEALLEGHENY POWER

HARRISONALLEGHENY POWER

HATFIELDS FERRYALLEGHENY POWER

Location:Location:


Project Exploration Data Origin:Project Exploration Data Origin:DrillholeDrillhole data acquired from Consol Energy.data acquired from Consol Energy.

DrillholeDrillhole data dating from the 1970data dating from the 1970’’s to the s to the present. present.

ArkwrightArkwright #1#1BlacksvilleBlacksville #1, and #2#1, and #2Federal #2Federal #2Humphrey #7Humphrey #7PersglovePersglove #15#15Osage #3Osage #3


More Exploration More Exploration Total of 51 drill holes are in close proximity with Total of 51 drill holes are in close proximity with the propertythe property31 drill holes within the property31 drill holes within the propertyNot all drill holes had quality dataNot all drill holes had quality data

Reserve Classification Area (ft2) Acreage PercentageMeasured 208,629,433 4,789 12.43%Indicated 1,141,776,162 26,212 68.05%Inferred 327,532,818 7,519 19.52%

Total 1,677,938,413 38,520 100.00%


E 483 - Reserve Mapping

Date

k Gold #7 Mine

By4/10/04oseph Zirkle

ved By

Zorro Mining Company

burgh Coal Thickness Uncertainty

D t

LEGENDReserve Classification

Measured0 - 14 Mile

Indicated14 - 34 Mile

Inferred3

4 - 3 Miles

12.4%

68.1%

19.5%

More Exploration (All Holes)More Exploration (All Holes)


More Exploration (With Quality)More Exploration (With Quality)


Reserves and QualityReserves and QualityCoal quality is lab tested on a DRY basis Coal quality is lab tested on a DRY basis (average values)(average values)

7.5 % Ash7.5 % Ash2.37 % Sulfur2.37 % Sulfur13,000 BTU per pound13,000 BTU per pound

More drilling will be necessary to analyze the More drilling will be necessary to analyze the project area with greater accuracy.project area with greater accuracy.


Overlying Structures:Overlying Structures:No No majormajor cities overlay the mine property.cities overlay the mine property.The largest population centers are in West The largest population centers are in West Virginia:Virginia:

CassvilleCassvilleNew HillNew HillPentressPentress

Most surface structuresMost surface structures owned by farmers owned by farmers and landowners who are sparsely located and landowners who are sparsely located throughout the property.throughout the property.


Overlying Structures:Overlying Structures:Cemeteries = 44Water tanks within property boundary = 4Churches = 11Schools = 5Natural Gas Wells = 275275Crude Oil Wells = 290

50 Percent of these wells are to be plugged


Overlying Structures: Gas & Oil WellsOverlying Structures: Gas & Oil Wells

E 484 - Final Reportck Gold #7 Mine

Zorro Mining Company

e Location Map: Cemetaries, Churches, ools, and Water Tanks

Legend:Cemetaries Churches Schools Water Tanks

Natural Gas Wells Crude Oil Wells


Project ScheduleProject Schedule

Months Duration Fi

rst H

alf

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

rD

ecem

ber

Janu

ary

Febr

uary

Mar

ch

Apr

ilM

ayJu

neJu

lyA

ugus

tS

epte

mbe

rO

ctob

erN

ovem

ber

Dec

embe

rJa

nuar

yFe

brua

ryM

arch

A

pril

May

June

Sec

ond

Hal

f

Firs

t Hal

f

Sec

ond

Hal

f

Firs

t Hal

f

Sd

Hlf

Aquire Mine Property XHire Planning Staff and Moving Costs 3Hire Salary Mine Management and Moving Costs 7Hire Hourly Mine Worker 12Project Feasibility Study & Development Cost EstimateCost Estimate for Equipment and Construction 3

Detailed Review of existing Geologic Data 3Plan Exploration Program - drilling permits 2Drill and Analyze Coal, Methane, Roof & Floor 4New Reserve Study 3

Reclamation Bonds and Monitoring Wells XPerfect Title to surface land, water and mineral 6Prepare Permit applications for New UG Mine 9Permit Approval by Agencies 12

Layout Preliminary Mine Plan 3Generate Production and Quality Scenarios 3 + 3Finalize Approved Mine Plan 3

Surface Facilities Design, Bid, Construct 9-12 DesignPlant Facilities Design, Bid, Construct 18-25Overland Belt and Loadout, Bid, Construct 27-30 Land Acquisition DesignShaft 12-18Slope Excacation 24-36Bleeder Shafts 8

Exploration

Land, Environmental & Permitting

Construction

Mine Planning

Bars = Timing and Duration of ActivityArrows = Relationship Between Activities

Year 4 Year 5Year 3

Table 13.1: Mine Project Schedule2005 2006 2007 2008 2009

Mining and Construction Management

Activity

Year 1 Year 2Color = Important Activity or Critical Path to Project Completion


Project ScheduleProject ScheduleSurface Facilities Design, Bid, Construct 9-12 DesignPlant Facilities Design, Bid, Construct 18-25Overland Belt and Loadout, Bid, Construct 27-30 Land Acquisition DesignShaft 12-18Slope Excacation 24-36Bleeder Shafts 8

Order Fan, Rock Dust, Mine Conveyor, ect. 2Order & Build Substation and Water Well 7Order & Rec. Mine and Section Equipment 5Order & Rec. Longwall Equipment 15-DecInstall Longwall 2

Development CM 1CM 2CM 3CM 4CM 5CM 6LW 1LW 2

Unit Production CM 1CM 2CM 3CM 4CM 5CM 6LW 1LW 2

Target Annual Production

Mine Development

Construction

101,583100,555

00

0000

0

256,291247,056 367,090

198,811

00

07,208,005

201,9610

197,1150

7,847,172

62,699185,685

0188,112

0000 0

205,821 205,755 205,

259,177191,154

00

295,321 393,653

0

367,399,192,

00

6,9460

8,371,618 8,111202,138 436,496 904,119 8,798,645


Project ScheduleProject ScheduleDevelopment begins when the main Development begins when the main shaft is completed. shaft is completed. Four CM Sections Initially Operating to Four CM Sections Initially Operating to Develop Mains and Develop Mains and GateroadsGateroads (2007(2007--2013)2013)One LW Initially (2010One LW Initially (2010--2015)2015)Addition of two CM sections in 2014 to Addition of two CM sections in 2014 to develop develop gateroadsgateroads ahead of second LW.ahead of second LW.Addition of second LW in 2016Addition of second LW in 2016


Project Mine PlanProject Mine Plan

1S-6E

1S-7E1S-8E

1S-9E

1S-10E

1S-11E

1S-12E

1N-14E

1N-16E

1N-18E

1N-20E1N-15W

1N-17W

ny

Map Key:Longwall Panels

Old Mine Workings

1N-19W

1N-21W

1N-23W

1N-25W

1N-27W

1N-29W

1N-31W

1N-33W

1N-35W

1N-37W

1N-39W

1S-1W1S-2W

1S-3W1S-4W

1S-5W

1W-41E

1W-40E

2S-78E

2S-77E

2S-76E

2S-74E

2S-72E

2S-70E

2N-42E

2N-44E

2N-46E

2N-48E

2N-50E

2N-52E

2N-54E

2N-56E

2N-58E

2N-60E

2N-62E

2N-64E

2N-66E

2S-75W

2S-73W

2S-71W

2S-69W

2N-68W

2N-43W

2N-45W

2N-47W

2N-49W

2N-51W

2N-53W

2N-55W

2N-57W

2N-59W

2N-61W

2N-63W

2N-65W

2N-67W

1N-24E

1N-26E

1N-28E

1N-30E

1N-32E

1N-34E

1N-22E

1N-36E

1N-38E

1S-6E

1S-7E1S-8E

1S-9E

1S-10E

1S-11E

1S-12E

1N-13E

1N-14E

1N-16E

1N-18E

1N-20E1N-15W

1N-17W

1N-19W

1N-21W

1N-23W

1N-25W

1N-27W

1N-29W

1N-31W

1N-33W

1N-35W

1N-37W

1N-39W

1W-41E

1W-40E

2N-42E

2N-44E

2N-46E

2N-48E

2N-50E

2N-52E

2N-54E

2N-56E

2N-58E

2N-60E

2N-62E

2N-64E

2N-66E

2N-68W

2N-43W

2N-45W

2N-47W

2N-49W

2N-51W

2N-53W

2N-55W

2N-57W

2N-59W

2N-61W

2N-63W

2N-65W

2N-67W

1N-34E

1N-24E

1N-26E

1N-28E

1N-30E

1N-32E

1N-22E

1N-36E

1N-38E2

Nor

th M

ain

2 So

uthM

ain

West Submain

1 N

orth

Mai

n

1 So

uth

Mai

n


Project Mine PlanProject Mine PlanGateroadGateroad Pillar DesignPillar Design

ALPS (Analysis of ALPS (Analysis of LongwallLongwall Pillar Stability)Pillar Stability)Developed by Chris MarkDeveloped by Chris MarkBased on Based on BieniawskiBieniawski pillar strength equation

Pillar DimensionsYield / Abutment Three-Entry System

Yield Pillar: 66 ft. x 140 ft. Centers Abutment Pillar: 150 ft. x 280 ft. Centers

NOTE: Dimensions are IncorrectUsed Max Depth vs. Average Depth! (sorry)


Project Mine PlanProject Mine Plan

50' x 124'50' x 124'

134' x 264'

Yield Pillar

Abutment Pillar

Figure 7.1: Gateroad Pillar Dimensions


Project Mine Plan Project Mine Plan –– Mains Pillars Mains Pillars ARMPS (Analysis of Room and Pillar Stability)ARMPS (Analysis of Room and Pillar Stability)

Developed by Chris MarkDeveloped by Chris MarkBased on Based on BieniawskiBieniawski pillar strength equationpillar strength equation

Pillar DimensionsPillar DimensionsNineNine--Entry System (4 Intake, 3 Exhaust, 2 Neutral)Entry System (4 Intake, 3 Exhaust, 2 Neutral)88 ft. x 266 ft. Centers 88 ft. x 266 ft. Centers Mains System width of 808 ft.Mains System width of 808 ft.Recovery Ratio of 23.1 %Recovery Ratio of 23.1 %NOTE: Dimensions are IncorrectNOTE: Dimensions are Incorrect

Used Max Depth vs. Average Depth! (sorry)Used Max Depth vs. Average Depth! (sorry)


Project Mine Plan Project Mine Plan -- Timing Timing ForcastForcast

2010

2017

2012

2023

2020

LW 2

LW 1

LW 1

LW 1


Transportation And MarketingTransportation And MarketingOverland Conveyor Belt Overland Conveyor Belt

Total of 8.6 MilesTotal of 8.6 MilesCosting $45.4 Million Costing $45.4 Million

ZMC will Purchase CONSOL Humphrey ZMC will Purchase CONSOL Humphrey LoadLoad--out Facilities out Facilities

$5 MM Renovation Costs$5 MM Renovation CostsFigure Based on PurchaseFigure Based on Purchaseof Alicia loading Doc ofof Alicia loading Doc of$3 MM + New Train Load$3 MM + New Train Load--outout


Transportation And MarketingTransportation And MarketingOverland Conveyor to LoadOverland Conveyor to Load--out out gives three methods of gives three methods of transportationtransportation

Conveyor north to Longview Power Conveyor north to Longview Power Station and Ft. Martin Station and Ft. Martin

2.8 additional Miles2.8 additional MilesTrainTrainBargeBarge


Transportation And MarketingTransportation And Marketing

Monongalia Co.

FT. MARTINALLEGHENY POWER

Morgantown

*LONGVIEW (Maidsville, WV) LONGVIEW POWER LLC.

Star CityOsage

Load-OutBelt

Slope Entrance

Zorro Mining Co.


Equipment Equipment -- LongwallLongwall

DBT PF 5 Model 48 TIB 3*1285 HP


EquipmentEquipment

Equipment Capital Cost =


Total Manpower RequirementsTotal Manpower Requirements486 Salary and Hourly Employees486 Salary and Hourly Employees

81 Salary81 Salary405 Hourly405 Hourly

Adding 10% Absenteeism Adding 10% Absenteeism 526 Salary and hourly Employees526 Salary and hourly Employees

Manpower Costs = $27.8 MM / YearManpower Costs = $27.8 MM / YearManpower Costs with 40% overtime = Manpower Costs with 40% overtime = $38.9MM / year$38.9MM / year



Table 15.4 (Cont.) Operating and Table 15.4 (Cont.) Operating and Cash Costs TableCash Costs Table


Economic SummaryEconomic Summary






Financial Summary:Financial Summary:

Figure 15.1: Financial Summary (Net Cash Flow)

$(150,000)$(100,000)$(50,000)

$-$50,000

$100,000$150,000$200,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20YEARS

Dolla

rs(0

00)

NET CASH FLOWDCF by Year (7%)


Financial Summary:Financial Summary:

Figure 15.2: Financial Summary (Cumulative Cash Flow)

$(400,000)$(200,000)

$-$200,000$400,000$600,000$800,000

$1,000,000$1,200,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21YEARS

Dolla

rs(0

00)

Cumulative Cash Flow


Conclusions:Conclusions:This project has evidence of being a This project has evidence of being a

profitable venture and should be profitable venture and should be further evaluated with infurther evaluated with in--depth depth feasibility study before beginning feasibility study before beginning any mining operationsany mining operations..


Thank you for your time. Thank you for your time. Any questions?Any questions?

Documents

Senior Mine Design Project: Black Gold #7 Mine · · 2005-06-06Senior Mine Design Project: Black Gold #7 Mine ... Finalize Approved Mine Plan 3 Surface Facilities Design, Bid,