Open Pit Mine - Planning and Design-3rd Edition

Open Pit Mine - Planning and Design-3rd Edition

(Parte 4 de 7)

(e) Maintenance facilities Location

9. Tailings pond area (a) Location of pipeline length and discharge elevations (b) Enclosing features

Natural Dams or dikes Lakes (c) Pond overflow

Effect of water pollution on downstream users Possibility for reclaiming water

(d) Tailings dust

Its effect on the area

10. Roads (a) Obtain area road maps

(b) Additional road information

Widths Surfacing Maximum load limits Seasonal load limits Seasonal access Other limits or restrictions Maintained by county, state, etc.

(c) Access roads to be constructed by company (factors considered)

Distance Profile Cut and fill Bridges, culverts Terrain and soil conditions

10 Open pit initie planning and design: Fundamentals

1. Power (a) Availability

Kilovolts Distance

Rates and length of contract (b) Power lines to site

Who builds Who maintains Right-of-way requirements

(c) Substation location (d) Possibility of power generation at or near site 12. Smelting (a) Availability (b) Method of shipping concentrate (c) Rates (d) If company on site smelting - effect of smelter gases (e) Concentrate freight rates (f) Railroads and dock facility

13. Land ownership (a) Present owners (b) Present usage (c) Price of land (d) Types of options, leases and royalties expected 14. Government (a) Political climate

Favorable or unfavorable to mining Past reactions in the area to mining

(b) Special mining laws (c) Local mining restrictions

15. Economic climate (a) Principal industries (b) Availability of labor and normal work schedules (c) Wage scales (d) Tax structure (e) Availability of goods and services Housing

Stores Recreation Medical facilities and unusual local disease Hospital Schools

(f) Material costs and/or availability

Fuel oil Concrete Gravel

Borrow material for dams

Mine planning 1

(g) Purchasing Duties

16. Waste dump location (a) Haul distance (b) Haul profile (c) Amenable to future leaching operation 17. Accessibility of principal town to outside (a) Methods of transportation available (b) Reliability of transportation available (c) Communications

18. Methods of obtaining information (a) Past records (i.e. government sources) (b) Maintain measuring and recording devices (c) Collect samples (d) Field observations and measurements (e) Field surveys (f) Make preliminary plant layouts

(g) Check courthouse records for land information (h) Check local laws and ordinances for applicable legislation (i) Personal inquiries and observation on economic and political climates (j) Maps (k) Make cost inquiries (1) Make material availability inquiries (m) Make utility availability inquiries


In preparing this section the authors have drawn heavily on material originally presented in papers by Lee (1984) and Taylor (1977). The permission by the authors and their publisher, The Northwest Mining Association, to include this material is gratefully acknowledged.

The planning phase commonly involves three stages of study (Lee, 1984).

Stage 1: Conceptual study

A conceptual (or preliminary valuation) study represents the transformation of a project idea into a broad investment proposition, by using comparative methods of scope definition and cost estimating techniques to identify a potential investment opportunity. Capital and operating costs are usually approximate ratio estimates using historical data. It is intended primarily to highlight the principal investment aspects of a possible mining proposition. The preparation of such a study is normally the work of one or two engineers. The findings are reported as a preliminary valuation.

Stage 2: Preliminary orpre-feasibility study A preliminary study is an intermediate-level exercise, normally not suitable for an investment decision. It has the objectives of determining whether the project concept justifies a detailed

12 Open pit initie planning and design: Fundamentals analysis by a feasibility study, and whether any aspects of the project are critical to its viability and necessitate in-depth investigation through functional or support studies.

A preliminary study should be viewed as an intermediate stage between a relatively inexpensive conceptual study and a relatively expensive feasibility study. Some are done by a two or three man team who have access to consultants in various fields others may be multi-group efforts.

Stage 3: Feasibility study The feasibility study provides a definitive technical, environmental and commercial base for an investment decision. It uses iterative processes to optimize all critical elements of the project. It identifies the production capacity, technology, investment and production costs, sales revenues, and return on investment. Normally it defines the scope of work unequivocally, and serves as a base-line document for advancement of the project through subsequent phases. These latter two stages will now be described in more detail.

1.4.2 The content of an inteimediate valuation report

The important sections of an intermediate valuation report (Taylor, 1977) are: - Aim;

- Technical concept;

- Findings;

- Ore tonnage and grade;

- Mining and production schedule;

- Capital cost estimate;

- Operating cost estimate;

- Revenue estimate;

- Taxes and financing;

- Cash flow tables.

The degree of detail depends on the quantity and quality of information. Table 1.1 outlines the contents of the different sections.

1.4.3 The content of the feasibility report

The essential functions of the feasibility report are given in Table 1.2.

Due to the great importance of this report it is necessary to include all detailed information that supports a general understanding and appraisal of the project or the reasons for selecting particular processes, equipment or courses of action. The contents of the feasibility report are outlined in Table 1.3.

The two important requirements for both valuation and feasibility reports are: 1. Reports must be easy to read, and their information must be easily accessible. 2. Parts of the reports need to be read and understood by non-technical people. According to Taylor (1977):

There is much merit in a layered or pyramid presentation in which the entire body of information is assembled and retained in three distinct layers.

Layer 1. Detailed background information neatly assembled in readable form and adequately indexed, but retained in the company's office for reference and not included in the feasibility report.

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Layer 2. Factual information about the project, precisely what is proposed to be done about it, and what the technical, physical and financial results are expected to be.

Layer 3. A comprehensive but reasonably short summary report, issued preferably as a separate volume.

The feasibility report itself then comprises only the second and third layers. While eveiything may legitimately be grouped into a single volume, the use of smaller separated volumes makes for easier reading and for more flexible forms of binding. Feasibility reports always need to be reviewed by experts in various specialities. The use of several smaller volumes makes this easier, and minimizes the total number of copies needed.

Table 1.1. The content of an intermediate valuation report (Taylor, 1977).

Aim: States briefly what knowledge is being sought about the property, and why, for guidance in exploration spending, for joint venture negotiations, for major feasibility study spending, etc. Sources of information are also conveniently listed.

Concept: Describes very briefly where the property is located, what is proposed or assumed to be done in the course of production, how this may be achieved, and what is to be done with the products.

Findings: Comprise a summary, preferably in sequential and mainly tabular forms, of the important figures and observations from all the remaining sections. This section may equally be termed Conclusions, though this tide invites a danger of straying into recommendations which should not be offered unless specially requested.

Any cautions or reservations the authors care to make should be incorporated in one of the first three sections. The general aim is that the non-technical or less-technical reader should be adequately informed about the property by the time he has read the end of Findings.

Ore tonnage and grade: Gives brief notes on geology and structure, if applicable, and on the drilling and sampling accomplished. Tonnages and grades, both geological and minable and possibly at various cut-off grades, are given in tabular form with an accompanying statement on their status and reliability.

Mining and production schedule: Tabulates the mining program (including preproduction work), the milling program, any expansions or capacity changes, the recoveries and product qualities (concentrate grades), and outputs of products.

Capital cost estimate: Tabulates the cost to bring the property to production from the time of writing including the costs of further exploration, research and studies. Any prereport costs, being sunk, may be noted separately.

An estimate of postproduction capital expenditures is also needed. This item, because it consists largely of imponderables, tends to be underestimated even in detailed feasibilities studies.

Operating cost estimate: Tabulates the cash costs of mining, milling, other treatment, ancillary services, administration, etc. Depreciation is not a cash cost, and is handled separately in cash flow calculations. Postmine treatment and realization costs are most conveniently regarded as deductions from revenues.

Revenue estimate: Records the metal or product prices used, states the realization terms and costs, and calculates the net smelter return or net price at the deemed point of disposal. The latter is usually taken to be the point at which the product leaves the mine's plant and is handed over to a common carrier. Application of these net prices to the outputs determined in the production schedule yields a schedule of annual revenues.

Financing and tax data: State what financing assumptions have been made, all equity, all debt or some specified mixture, together with the interest and repayment terms of loans. A statement on the tax regime specifies tax holidays (if any), depreciation and tax rates, (actual or assumed) and any special


14 Open pit mine planning and design: Fundamentals

Table 1.1. (Continued).

features. Many countries, particularly those with federal constitutions, impose multiple levels of taxation by various authorities, but a condensation or simplification of formulae may suffice for early studies without involving significant loss of accuracy.

Cashflow schedules: Present (if information permits) one or more year-by-year projections of cash movements in and out of the project. These tabulations are very informative, particularly because their format is almost uniformly standardized. They may be compiled for the indicated life of the project or, in very early studies, for some arbitrary shorter period. Figures must also be totalled and summarized. Depending on company practice and instructions, investment indicators such as internal rate of return, debt payback time, or cash flow after payback may be displayed.

Table 1.2. The essential functions of the feasibility report (Taylor, 1977).

1. To provide a comprehensive framework of established and detailed facts concerning the mineral project.

2. To present an appropriate scheme of exploitation with designs and equipment lists taken to a degree of detail sufficient for accurate prediction of costs and results.

3. To indicate to the project's owners and other interested parties the likely profitability of investment in the project if equipped and operated as the report specifies.

4. To provide this information in a form intelligible to the owner and suitable for presentation to prospective partners or to sources of finance.

Table 1.3. The content of a feasibility study (Taylor, 1977).

General. - Topography, climate, population, access, services.

- Suitable sites for plant, dumps, towns, etc.

Geological (field): - Geological study of structure, mineralization and possibly of genesis.

- Sampling by drilling or tunnelling or both.

- Bulk sampling for checking and for metallurgical testing.

- Extent of leached or oxidized areas (frequently found to be underestimated).

- Assaying and recording of data, including check assaying, rock properties, strength and stability.

- Closer drilling of areas scheduled for the start of mining.

- Geophysics and indication of the likely ultimate limits of mineralization, including proof of non-mineralization of plan and dump areas. - Sources of water and of construction materials.

Geological and mining (office)'. - Checking, correcting and coding of data for computer input.

- Manual calculations of ore tonnages and grades.

- Assay compositing and statistical analysis.

- Computation of mineral inventory (geological reserves) and minable reserves, segregated as needed by orebody, by ore type, by elevation or bench, and by grade categories. - Computation of associated waste rock.

- Derivation of the economic factors used in the determination of minable reserves.

Mining: - Open pit layouts and plans.

- Determination of preproduction mining or development requirements.

- Estimation of waste rock dilution and ore losses.


Mine planning 15

Table 1.3. (Continued).

- Production and stripping schedules, in detail for the first few years but averaged thereafter, and specifying important changes in ore types if these occur. - Waste mining and waste disposal.

- Labor and equipment requirements and cost, and an appropriate replacement schedule for the major equipment.

Metallurgy (research): - Bench testing of samples from drill cores.

- Selection of type and stages of the extraction process.

- Small scale pilot plant testing of composited or bulk samples followed by larger scale pilot mill operation over a period of months should this work appear necessary.

- Specification of degree of processing, and nature and quality of products. - Provision of samples of the product.

- Estimating the effects of ore type or head grade variations upon recovery and product quality.

Metallurgy (design):

- The treatment concept in considerable detail, with flowsheets and calculation of quantities flowing. - Specification of recovery and of product grade.

- General siting and layout of plant with drawings if necessary.

Ancillary services and requirements: - Access, transport, power, water, fuel and communications.

- Workshops, offices, changehouse, laboratories, sundry buildings and equipment.

- Labor structure and strength.

- Housing and transport of employees.

- Other social requirements.

Capital cost estimation: - Develop the mine and plant concepts and make all necessary drawings.

- Calculate or estimate the equipment list and all important quantities (of excavation, concrete, building area and volume, pipework, etc.). - Determine a provisional construction schedule.

- Obtain quotes of the direct cost of items of machinery, establish the costs of materials and services, and of labor and installation.

- Determine the various and very substantial indirect costs, which include freight and taxes on equipment (may be included in directs), contractors' camps and overheads plus equipment rental, labor punitive and fringe costs, the owner's field office, supervision and travel, purchasing and design costs, licenses, fees, customs duties and sales taxes.

(Parte 4 de 7)