Step 1 - Develop a Conceptual Mine Plan

Session Headings:
Develop a Conceptual Mine Plan

Develop a Conceptual Mine Plan (See Summary for main points) A conceptual mine plan must be developed to provide the basic information listed below. The plan can be prepared to any level of detail desired or possible, but the cost estimate cannot proceed until the following essential items have been determined or at least assumed.

Basic geometry of ore deposit and waste material: the estimate does not require a detailed pit plan, but a waste to ore ratio must be determined or assumed, and an approximate center of mass for ore and waste should be determined as starting points for material haulage. Mill or stockpile location: the mill or stockpile location is necessary in order to identify the destination point for ore haulage. Waste dump location: the waste dump location is necessary to identify the destination point for waste haulage. Haul route for ore: a proposed haul route to the mill or stockpile site should be plotted on a topographic map. Haul route for waste: a proposed haul route to the waste dump should be plotted on a topographic map.

Some analysts balk at providing even this much detail, but a credible estimate cannot be prepared, even at the most rudimentary level, without first determining or assuming the above details. If you dont have at least a rough idea of the location and geometry of your ore body, or where you are going to dump your ore and waste, you probably arent ready to begin an estimate of costs. Example step 1: A pit cross-section should be prepared based on whatever information is available regarding the geometry of the ore body. This may only be based on limited drilling or projection of outcrop information, or it may be based on detailed mine planning including pit optimization analysis. For starters, a pit wall slope of 45 may be assumed. The objective here is to gain an idea of pit depth in order to determine pit haul road distance. It is

assumed that an actual resource estimate has been completed at an appropriate level of detail prior to this point. Consideration should be given to preproduction stripping requirements as well. As a minimum, a preproduction starter pit is required, the size of which is dictated by the depth to the top of the ore body, and the size of the working area required to begin ore production. The significance of the starter pit to the evaluator is that it represents work that must be accomplished and costs that must be incurred before production begins. Hence, its cost must be covered by initial mine financing rather than through operating revenue. The starter pit is sometimes ignored in preliminary analyses, because from a total cost perspective, it makes little difference whether the material is moved before the start of production or during the mine operating phase. It is mainly through the financial analysis, especially discounted cash flow analysis, that the timing of this waste production becomes significant. A generalized layout plan should be plotted on a topo map, showing the location of the pit, the waste dump area, and the ore stockpile or mill location (Figure 3, above left). The objective for making this plot for our purposes is mainly to determine haulage distances and gradients.

More detailed analyses As mine planning progresses, more and more details become available to support the cost estimate. Slope stability studies may be completed to better define the pit slope angle. Pit plans may be better defined using pit optimization and planning procedures as outlined in Hustralid and Kuchta (2006). Waste dump and mill site locations may be designated with greater certainty through site characterization studies, and haul roads may be designed to the extent of actual centerline surveys. An appropriately scaled cost estimate utilizes all significant design details available at the time the estimate is completed. Less detailed analyses

A credible estimate cannot be prepared, even at the most rudimentary level, without first determining or assuming the above details. If you dont have at least a rough idea of the location and geometry of your ore body, or where you are going to dump your ore and waste, you probably arent ready to begin an estimate of costs. The credibility of the estimate is greatly influenced by the level of effort put into determining these mining parameters. When working at the most preliminary level, the significance of the starter pit is minimized and can be ignored in some cases, provided its volume is included in the overall operating stripping ratio, in which case its cost is covered by the mine operating costs, rather than capital costs.