Week 2 of Sr Design 2013. Diamond People Begin Building your Geologic Model – Right now your data...
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Week 2 of Sr Design 2013
Week 2 of Sr Design 2013. Diamond People Begin Building your Geologic Model – Right now your data limits you to assuming that each pipe is a single grade
Diamond People Begin Building your Geologic Model Right now
your data limits you to assuming that each pipe is a single grade
of material over a specific depth interval Estimate the Gross Value
Per Ton of Ore In many cases you have a bort diamond value per
caret and a caret per ton value multiplied this will provide a
value per ton for bort diamonds You can do a similar calculation
for industrial stones For your large industrial diamonds you
reported up to $200 per caret but actual prices can be between
industrial stones and $200 per caret pick a reasonable value
remembering that $200 per caret is an ideal peak price You still
need to get prices to use ballas and carbondo
Slide 3
Continue Your Grade Calculation Look at your gem stones Your
price data is by gem size and quality Use 70% of cut price for the
value of rough stones Remember cut stones are only 40% to about 75%
the size of rough stones (good cuts often discard 40% of rough
stone only discarding 25% is likely a fairly poor cut) Thus a 1
caret rough stone will likely only produce a 0.6 caret cut stone If
stones of 1 to 1.5 caret size are worth $5000 per caret And stones
of 0.5 to 0.99 carets are worth $1000 per caret Your one caret
rough cut down to 0.6 caret size is valued at $1000 per caret not
$5,000 per caret The 0.4 carets of waste rough can almost certainly
be sold for bort.
Slide 4
Another Omission in Your Data You have colored diamonds in some
places but right now you have no price data for colored diamond gem
stones You need to get values to proceed with your
calculations.
Slide 5
The Problem of Lack of Grade Some of your drill holes
encountered some number of large and rare stones but no grade per
ton was given The size of these stones relative to drill hole
volume was considered to great to make a grade estimate The problem
is called nugget effect the chance that you did or did not hit
something big The random chance range is bigger than the predicted
grade you cant statistically quantify anything You can guess there
may be some very high values but you would need to mine bulk
samples to know what Dont include value per ton for a few isolated
large stones but note that very rich stones may be present.
Slide 6
Document How You Got Your Estimated Value Per ton Show the full
estimating calculation Now assign values per ton. Assuming an
entire pipe between say 500 and 750 feet depth is made of $10,000
per ton ground how many tons of ore do you have? Create estimates
of your ore tonnage by value Create an initial geologic model of
your ore deposit.
Slide 7
Continue Development of Your Background Information You
indicated you would get water from Cheyennes reservoirs How much
would you pay per unit for water at Cheyenne prices? You indicated
you had 120,000 people within 30 minutes of the mine and none of
them have mining training What will it likely cost you to train a
miner? What is that based on? What will you likely pay? Your
engineers and managers will likely have to be imported what
salaries will you likely have to offer? What is that based on?
Slide 8
Begin Writing Sections Your Final Report Write section on value
of diamond and garnet Indicate whether your research indicates
likely upward or downward movement of prices Indicate the values
you are going to assume in your economic analysis Write the section
on workforce available in the area and what you expect to have to
pay, train, or import workers Write the section on water supply and
the likely cost of water. These sections will likely range in size
from about a page to maybe as much as 3 to 5 pages for diamond and
garnet values
Slide 9
Planning Your Mine Concept What Mining Methods Would You
Consider Using on this Deposit? What kind of recovery would each
method achieve What kind of dilution would each method have What
kind of cost per ton does each method have Consider the tonnage of
ore you have available Are any of the methods not practical for
that size deposit?
Slide 10
Consider Limitations on Mining Method Diamond Mining often
considers Block Caving Are your estimated rock strengths and RQDs
conducive to block caving? Diamond Mining Often considers Open Pit
Open pit depth is usually limited by economics As you go deeper the
stripping ratio increases If I dig a 500 ft deep pit about what
will my stripping ratio be? If I go to 1000 ft what is my
incremental stripping ratio? If I go to 1500 ft (still common for
open pit) What if I go all 3500 ft down to the know pipe bottoms?
As you go deeper the haul distance to the surface increases About
what would the cost be of trucking a ton of rock out of a 500 ft
deep pit What would the cost be if it were 3500 ft deep? Are there
rock mechanics constraints that make a 3500 ft deep pit infeasible?
Are there land area constraints that make a 3500 ft deep pit
infeasible? Will the wind, snow, snow drifts, cold, or limited
hours of daylight make Open Pit infeasible Is the limitation year
round or only seasonal?
Slide 11
Mining Methods What other mining methods are practical? Open
Stoping Methods? Cut and Fill Methods? Shrinkage methods?
Kimberlite degrades and weathers badly How will this impact the
methods you are considering.
Slide 12
Consider Your Mining Rate If you mine your deposit in 10 years
what will your production rate be? What about 15 years? 20 years 25
years 33 years 40 years 50 years Are any of these rates
particularly favorable or unfavorable to the mining rates you are
considering Look at your road network for people, supplies, and
product Are any of the rates impractical for the geography What is
the size of the current market for your products Are any of your
production rates high enough to be a major part of the total market
If so will you end up with product you cannot sell? Will you alter
the price for which things sell from flooding the market?
Slide 13
Make a Draft Proposal How will you mine? What will be your mine
life? What will be your production rate?
Slide 14
COPPER
Slide 15
Build a Block Model Take the new file and get a block model
Estimate the amount and grade of ore in place Alteration 6 = oxide
what is the tonnage Alteration 5 = mixed oxide sulfide what is
tonnage Alteration 4 = Secondary enrichment zone sulfide Alteration
3 = mixed secondary and primary Alteration 2 = Primary sulfide
Alteration 1 = Primary sulfide refractory gold
Slide 16
Consider Your Mining Method What methods make sense for this
type of orebody About what would your mining rate be for 15 year
life 20 year life 25 year life 33 year life 40 year life 50 year
life Are any of these mining rates poor matches for the mining
method being considered?
Slide 17
Consider Your Mining Methods Propose a mining method and
justify why this method is preferable to others It is likely that
methods considered would include Open Pit and Block Caving What are
the relative costs and recoveries? Are there environmental
considerations that favor one method or the other?
Slide 18
Begin Developing Economics For your mining method of choice
begin detailing cost details Example Using Open Pit How would you
load and haul ore What equipment? What would it cost to buy? What
would it cost to operate? How would you blast What equipment would
you use? What would it cost to drill? What would you spend for
supplies and manpower to blast? What support services would you
require? What would they likely cost You will be trying to get a
solid handle on Ore Mining and Waste Mining Cost
Slide 19
Work on Processing and Costs Assume your mineral grain size is
fairly coarse and easily liberated and your grinding indexes are at
the lower end for typical copper ore Oxide ore has readily soluble
copper and gold. Silver is also in metalic or oxide forms How could
you process such an ore? What are the costs likely to be? You have
a secondary enrichment zone The copper is mostly chalcocite and
covellite The gold is metallic without without carbon The silver is
typical silver sulfides
Slide 20
More on Your Processing You have a zone that is 50% oxide and
50% secondary sulfide You have two primary sulfide zones The Copper
is 70% calcopyrite 30% Boronite #2 zone gold is metallic without
carbon, silver is sulfide #1 zone gold has extensive carbon, silver
is sulfide You have a 50% secondary, 50% primary transition zone
Gold is not encumbered by carbon Your goal is to determine the
processing method and costs You already are partially calibrated
for size
Slide 21
Follow Up Get price histories from 1975 to the present for
copper, gold, and silver Adjust old prices to current dollars using
inflation indexing Look at what drove past price swings Look at
current conditions Determine and justify 3 prices Most likely
reasonable price Low end scenario price High end scenario
price
Slide 22
More Follow Up Pick the two closest copper smelters If you were
going to ship concentrates to those smelters how would you do it?
Are the roads capable of handling the traffic you are proposing? Is
it practical to upgrade roads or extend new routes into the area?
If you had a copper concentrate at 30% copper what would the cost
per pound of contained copper be for shipping What would you likely
pay in smelter and refining charges per lb of copper to have your
copper refined? If you mined your ore body in 33 years what would
it cost to build a smelter and refinery sized for that
production?
Slide 23
Do It Right Where do people live in the area What do those
people do for a living in those places What is your plan for
getting a workforce? Check elevation and Climate to make sure that
Silver City weather data is a good surrogate for your mine site
Detail seasonal temperature, rain, and other weather ranges Do any
of your findings impact your mining method or plan? Provide a
concrete plan for where water would come from how it would get to
your site and what it would likely cost.
Slide 24
COAL
Slide 25
Initial Work Consider what you need to put together a geologic
model of your mine Remember to look at the new geophysical data If
you need additional drill hole data it would likely be for one or
more of the following Nail down displacement on the fault (a drill
hole on each side would likely work best. You might want to check
more than one place if you suspect that the displacement might not
be uniform) Trace the washout zones (you should look at where you
have found washout zones and guess at where things might go so
washout drilling is based on something) If you cant get a handle on
how coal is thinning or thickening or changing quality in an area
you might need drill holes.
Slide 26
Drill Work Thursday preferred Friday in class acceptable
Determine whether you need additional drilling and what the
drilling would be looking for. Identify where the drilling needs to
be and why You can have 8 drill holes if you can explain why if you
want more you must make the case.
Slide 27
For Presentation on Tuesday Build a computer based model of
your coal reserve The Model should address issues What do you
believe is the displacement on the fault Where do you believe the
washout channels go or exist (Remember that washout channels
represent streams they are usually continuous and do not appear and
disappear in various spots) How have you or how are you addressing
the uncertainty for these things.
Slide 28
From Your Model Show representations of the following The coal
thickness of the #7 seam Based on the elevation of the bottom of
the #7 coal which direction will water run if you open workings The
coal thickness of the #6 seam Based on the elevation of the bottom
of the #6 coal which direction will water run if you open workings
The coal thickness of the #5 seam Based on the elevation of the
bottom of the #5 coal which direction will water run if you open
workings The coal thickness of the #2 seam Based on the elevation
of the bottom of the #2 coal which direction will water run if you
open workings
Slide 29
Mine Planning Based on your model and allowing for coal losses
from washout channels or baking around intrusive dikes how many
tons of each coal do you believe you have now? Are you still
meeting your investors hopes for coal reserve size. Considering
depth, roof conditions, floor conditions, seam thickness, and
continuity of the coal bed what method would you suggest for mining
each coal seam? Explain why.
Slide 30
Begin Laying Out Minable Areas For each coal seam What areas
are unminable because the coal is too thin? What areas are
unminable because the coal has been cooked by intrusive dikes What
areas are unminable because you cannot find an economically
attractive way to control the roof What areas are unminable because
you cannot find an economically attractive way to control the floor
What areas are unminable because they represent pockets of coal
that are too small to be worth getting to This might be small areas
isolated from the rest of the reserve by a fault It might be a
small area isolated from the rest of the reserve by a washout
channel What areas are unminable because of the proximity to
geologic hazards Are there any areas that are unminable because of
another reason?
Slide 31
Estimate Recoverable Tonnage You now have minable areas and
known thicknesses for the coal in the minable areas. How many
minable tons of each coal do you have? Most mining methods achieve
less than 100% recovery of the minable in situ resource. What
percentage of the in situ resource do you believe you will get? Now
how many really mined tons do you have from each seam? Most mining
methods suffer from out of seam dilution. Based on your mining
methods how many tons of dilution rock do you expect to add? Now
applying reasonable preparation plant yields to your out of seam
diluted coal how many mined and washed tons of each coal seam do
you expect to get.
Slide 32
Get a Feel for Your Operation Scale You know the companys goals
for tons of coal reserve, production rate and mine life. You know
the surrounding market. You know how many clean tons of coal you
may produce. You know how many raw tons of diluted coal you will
mine. What will you target for your annual clean ton production
rate (by coal type) What will you target for your coal preparation
plant capacity?
Slide 33
What Type of Mine Access Do You Want? For production and supply
access what will you use? Slopes?, Drifts out of boxcuts?, Shafts?
Where would you put these openings to start out with? What
direction would you likely mine? Where would you put out mains and
submains?
Slide 34
Start Writing Report Sections Section on Mine property and
access to market What will transport to market cost? Coal Prices
You had a fairly good breakdown with expected price, boom price and
bust price Be sure to document your sources and how you reached
your conclusions