Block Valuation at Antamina Mine

Harry Parker & Kim Kirkland Mintec Seminar April 2007

 Antamina- Probably largest Polymetalic Mine in the World. Skarn hosted Cu-Zn-Mo-Ag deposit Deposit defined by 16 rock-types with varying mill throughput rates that can range from 50 ktpd to 100 ktpd. Nine major ore-types are demarcated and campaigned through concentrator with nominal annual capacity of 30 Mtpy The mine and processing facilities consist of an open pit, concentrator, slurry pipeline and port facility 2005 payable metals production included 361,000 t of copper, 156,000 t of zinc, 6,720 t of moly, 409 t of lead, and 9.80 million oz silver

Background
Since 1998 Feasibility Study of the Antamina Mine, block economics and ore typing have been based on Net Smelter Return (NSR). Blocks have been valued using Value.for which was written by MRDI/AMEC in 2000. Minor revisions have been made over the years. In May 2005, CMA and AMEC develop new system for ore typing and block valuation for use in long-range mine planning. In November 2005, Antamina asked AMEC to design and implement these features, as well as other enhancements to the Ore Control system.

Flowchart for options 1, 2, and 4

Advances in Block Valuation

Introduction of subtypes for each oretype to reflect constraints on arsenic, molybdenum, oxides, etc. Use of a complex series of metallurgical equations to partition tonnage and grade of 7 payable and penalty metals amongst five concentrate products. Use of ore value per concentrator hour as the main valuation metric. This enhances the value of materials such as M1 (copper-only, low bismuth) that can be processed at a greater rate, and penalizes the value of materials such as M4A (copper-zinc, high bismuth) that must be processed at a slower rate.

A. Components of Mill and G&A Fixed Costs

Area Mill General Other Fixed Group Maintenance. Total M$/yr 23.1 57.8 25.3 106.2

B. Allocation of Fixed Costs, Example for Caf Endoskarn

Oretype t/d M1 M2 M2A M3 M4 M4A M5 M6 MP 99500 93900 79800 84500 75100 70400 70400 65700 51600 Throughput kt/hr 4.15 3.91 3.33 3.52 3.13 2.93 2.93 2.74 2.15 Mt/yr 36.3 34.3 29.1 30.8 27.4 25.7 25.7 24.0 18.8 Fixed Cost $/t Milled Incremental to M1 2.92 3.10 3.65 3.44 3.87 4.13 4.13 4.43 5.64 0.00 0.17 0.72 0.52 0.95 1.21 1.21 1.50 2.71

C. Calculation of "Breakeven" NSR ($/t)

Oretype Fixed Mill Other Total Required NSR ($/t)

G&A $/t
M1 M2 M2A M3 M4 M4A M5 M6 -2.92 -3.10 -3.65 -3.44 -3.87 -4.13 -4.13 -4.43

Costs
-5.00 -5.00 -5.00 -5.00 -5.00 -5.00 -5.00 -5.00

Costs
-7.92 -8.10 -8.65 -8.44 -8.87 -9.13 -9.13 -9.43

Incremental to M1
7.92 8.10 8.65 8.44 8.87 9.13 9.13 9.43 0.00 0.17 0.72 0.52 0.95 1.21 1.21 1.50

MP

-5.64

-5.00

-10.64

10.64

2.71

D. Calculation of Net Value/Concentrator Hour Oretype NSR $/t Fixed Mill Other Net Value kt/hr Net Value Net Value Rel. to M1

G&A $/t

Costs

$/t

k$/hr

$/t

k$/hr

M1 M2 M2A M3 M4 M4A M5 M6 MP

20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00

-2.92 -3.10 -3.65 -3.44 -3.87 -4.13 -4.13 -4.43 -5.64

-5.00 -5.00 -5.00 -5.00 -5.00 -5.00 -5.00 -5.00 -5.00

12.08 11.90 11.35 11.56 11.13 10.87 10.87 10.57 9.36

4.15 3.91 3.33 3.52 3.13 2.93 2.93 2.74 2.15

50.06 46.56 37.75 40.69 34.81 31.88 31.88 28.94 20.13

100% 99% 94% 96% 92% 90% 90% 88% 78%

100% 93% 75% 81% 70% 64% 64% 58% 40%

E. Calculation of NSR Required to Produce Net Value of $14,000/Concentrator Hour Oretype Value/hr k$/hr M1 M2 M2A M3 M4 M4A M5 M6 MP 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 Throughput kt/hr 4.15 3.91 3.33 3.52 3.13 2.93 2.93 2.74 2.15 Net Value $/t 3.38 3.58 4.21 3.98 4.47 4.77 4.77 5.11 6.51 Fixed Mill G&A $/t 2.92 3.10 3.65 3.44 3.87 4.13 4.13 4.43 5.64 Other Costs 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Required NSR $/t 11.30 11.68 12.86 12.42 13.35 13.91 13.91 14.54 17.15 Rel. to M1 100% 103% 114% 110% 118% 123% 123% 129% 152%

M1 KOVPHR vs Old NSR

300

250

200

KOVPHR

150

100

50

0 0 10 20 30 40 Old NSR 50 60 70 80

M4A KOVPHR vs Old NSR

200 180 160 140

KOVPHR

120 100 80 60 40 20 0 0 10 20 30 40 50 Old NSR 60 70 80 90 100

Design Criteria
A feature of MineSight is its ability to link user-written Fortran subroutines. This permits the user to read from and write to the MineSight Project Database. Calculation speed was an essential design requirement. AMEC has prepared an approximately 9500 line MineSight user-subroutine module b612v14.for A single program that uses a modified main program to access the same set of subroutines to determine ore typing and make valuation calculations for four main options.

Functions of the User Subroutine

Ore and waste typing Partitioning of tonnage and grade to concentrates Valuation of blast holes, Ore Control blocks, Ore Control polygons, and resource model blocks

Option 1: BLKVAL
Block Valuation or BLKVAL, is the First Pass Valuation and assignment of optimal Metallurgical ore type MTYMS MTYMS is displayed to the computer screen to construct ore polygon diglines Calculates all 9 possible ore value per hour OVPHR(9) variables and various other parameters for the metallurgical ore type Invoked with IOP21=1 in the user runfile

Option 2: PROUTE
Polygon Valuation or PROUTE, is the Second Pass Valuation for Ore Control which takes the nominated as routed ore type MTYFS for a group of blocks, and calculates concentrate tonnage and grades Calculates applicable penalties and credits This option is necessary since Ore Control polygons often contain a minority of blocks that are included within an ore cut that have suboptimal routing Invoked with IOP21=2 in the user runfile

4193 Bench Showing MTYMS in Ore Polygons

4193 Bench Showing MTYFS (as routed)

Option 3: Blastholes
Blasthole option is for processing of blasthole assays Grades and calculated values are extracted from, and stored back to AcQuire via ASCII files Stored values are ore/waste types and OVPHR(9) Invoked with IOP21=3 in the user runfile

Option 4: Resource Model

Resource model option is for processing of 20 x 20 x 15 resource block models. No user interface, run only at command line Assumes SMU block selectivity; thus blocks are assigned a metallurgical ore type, MTYMS. No need for two steps Calculates a unique list of ore concentrate tonnages and grades for the five possible concentrate products. Calculates ore/waste values used for long-term mine planning Invoked with IOP21=4 in the user runfile

Arsenic Penalty Map

Moly Credit Bismuth Penalty

Input Files
Ore and Waste Typing File OWTYPE01.CSV Metallurgical Parameters CONTAB04.CSV Economic Parameters ECONLT01.CSV Drive File to specify run mode option Standard MineSight Runfile

Input Files
OWTYPE01.CSV

Ore Typing Parameter File

CONTAB04.CSV

Metallurgical Parameter File

Economic Parameter File

ECONLT01.CSV

Drive Files
Run Modes Levels of Debug Output Input and Output Files Names
Drive File Bt32_1k.csv

System Development (1)

Parallel development: MineSight Fortran User Subroutine (Kim Kirkland) Other upgrades to ore-control system (Kim Kirkland) Stand Alone Fortran Program (Harry Parker) Spreadsheet Checker (Paul Gomez, Arndt Brettschneider) Except for main driver subroutine, all subroutines in MineSight User Subroutine same as in Stand Alone Program Parallel development enabled checks of modules as developed in controlled environment

System Development (2)

May 2005 block valuation used as foundation Detailed specification from July to November 2005 Detailed interaction with Finance, Concentrator during November 2005, February 2006 Test Version produced March 2006; precision problems in MineSight Further tests and training in April and May 2006 Final Installation May 30, 2006 Documentation July - Sept 2006

System Checking
14 versions of program using 39 testbeds Special dataset Master.dat built by Kim Kirkland and Paul Gomez to exercise all ore-types and metallurgical options 440,000 Ore Control block data set built from nearly all blocks mined to end 2005. All 4 options checked Inserted small errors in input files to check error messages generated Spreadsheet duplicates ore-typing, metallurgical equations, block valuation

Whats Next ?
Valuation on a block-by-block basis can be a shortcoming. Individual blocks do not fairly represent campaign feed grades Metallurgical recovery equations need a lot of work. Process costs per ore type need to be better understood. Rock recognition data from Aquila could greatly improve forecasts of mill throughput Introduce iron as player in copper concentrate grade and recovery