ORE RESERVES ATWOODLAWN MINE

Ore Reserves at Woodlawn Mine, NSW

D J FITZGERALD 1 & R P SINGER 2

1. INTRODUCTION proceeding towards a public float. Denehurst's initial interest in

Woodlawn was in the extensive tailings resource (estimated at 6
This paper discusses recent ore reserve methodology at the million tonnes) from which it was planned to set up a retreatrnent
Woodlawn base metal Mine in New South Wales. The ownership operation and produce metal on site. Denehurst acquired the
of the Mine changed hands in 1987 and a number of revisions to Mine and was listed on the Stock Exchange in August 1987. On
ore reserve practice were instigated by the new operators. While taking over the mine it was determined to continue the operation
the overall modeling and calculation procedure remained of the underground mine while further evaluation of the tatlmgs
essentially unaltered, the modifications and revised assumptions project took place. Based on CRA's reserve at that time a mine
significantly increased the ore reserve. While general ore reserve life of 3 to 4 years for an underground operation was anticipated.
procedures are discussed in this paper, it is the impact of these The sale of the mine coincided with the exhaustion of the open
changed assumptions on the reserves which is our main focus. pit reserves and the reduction of mill throughput to ~50,000
2. EVOLUTION OF OPERATION tonnes per annum. Helped by dramatic improvements m base
metal prices the mine has returned good profits over the last two
The Woodlawn base metal Mine is located 10km west of Tarago years.
in southern NSW. Tarago is 34 km south of the regional centre of
Goulburn (Figure 1). The mineralization was discovered in the
..---------------,
late 1960's by St. Joe Australia Pty Lld following a regional soil
geochemical survey (Malone et al, 1975). Detailed exploration up
to 1978 had demonstrated an open pit insitu resource of complex
ore of 6.3 million tonnes at 1.7% Cu, 5.5% Pb, 14.4% Zn and
89ppm Ag and 3.7 million tonnes of stockwork copper ore
averaging 1.9% Cu.
Woodlawn Mine commenced operations in 1978 as an open pit
mine processing in excess of 900,000 tpa of complex and copper
ore. It was operated initially as a Joint Venture between St. Joe
Minerals, Phelps Dodge and New Broken Hill Consolidated, a
subsidiary of CRA Ltd. At the peak of open pit mining, the
consortium employed 550 people. By 1987 when the open pit
operation was wound down, a total of 8 Mt of ore and 60 Mt of
waste had been mined. Due to the high capital cost in setting up
the mine, a high strip ratio, poor metallurgy and depressed metal
prices, the mine operated unprofitably for most of this period.
With the withdrawal of the other Joint Venture partners, CRA
acquired total control of the Project in 1984 at which time the go
ahead for a feasibility study to look at extending mining
undergrdund was given. This study took approximately two
years to complete. A decline was driven to allow detailed
underground drilling to improve the database for ore reserve
estimation and significant stoping took place to test ground
conditions and provide bulk samples for metallurgical testwork.
Around $10 million was expended on the feasibility study. At the
completion of the study, the mine was at a stage where it could FIG. 1.- Woodlawn Mine Location Map
continue as a fully operational underground mine. The work
force at this time was 230 with consequent greater operational
efficiencies. 3. GEOLOGY A D MI ERALISATIO
By November 1986, although the underground feasibility study The Woodlawn orebody occurs within a sequence of Middle to
had been positive, CRA determined it wished to sell the operation Late Silurian pyroclastics, volcanogenic sediments and
and an active search for a buyer was begun. This purchase carbonaceous shales intruded by diabase sills. Detailed
opportunity coincided with the development of Denehurst descriptions of the geology are provided by Malone et al (1975)
Limited, a technology oriented mining company which was and McKay & Hazeldene (1987). The mineralization is
I Principal, Desmond Fitzgerald & Associates, 30 Wells Street, interpreted to have formed from the precipitation on the sea floor
Brighton Vie. of sulphides from metalliferou fluids associated with
2 Manager Geology for Denehurst Limited , 961 Gl::nhuntly Road, contemporaneous felsic volcanism. This fluid deposition appears
Caulfield South Vie.

Ore Reserves Estimates Melbourne March 1990 125

 DJ FITZGERALD and R P SINGER

to have taken place on an unconformity within a submerged
graben (McKay & Hazeldene, 1987).
The near surface mineralization mined in the open pit consisted
of a single massive zone of complex ore (containing massive
pyrite with variable sphalerite, galena and chalcopyrite) and an
associated zone of footwall copper ore (comprising massive and
stockwork chalcopyrite and pyrite). At depth however, the
orebody comprises a number of discrete lenses. Three major
lenses are currently being exploited by the underground mine and
these are depicted in Figures 2, 3 and 4. The mineralisation
mined in the pit continues down plunge and is known as Lens
lC. A pair of sub parallel lenses occur approximately 250 metres
to the north-west of Lens lC. These lenses are referred to as
Zone B with the smaller (Lens 2B) being approximately 60-70
metres in the hanging wall of Lens lB. All reserves prior to
1989 were contained within these three lenses. Additional
lenses occur in the hanging wall of Zone B including Lens 3A
which was added to the reserves in 1989. Other intersections of
massive sulphides have been obtained in the hanging wall of
Lens 2B but are not yet sufficiently drilled to enable inclusion in
reserves or resources. The three main ore lenses (ie. IB, lC and
2B) appear to be separated by a number of major shears and it is
con idered that these are the remnants of a single sulphide zone
(McKay & Davies, 1989/90; BouffIer 1989).
Extensive hydrothermal alteration accompanies the
mineralisation though its distribution is patchy (Petersen &
Lambert, 1979). Alteration types include Mg-rich chlorite-talc,
pervasive silicification and chloritization and sericitization. The
abundant talc and chlorite development in places coupled with
the average 45° dip of the orebodies makes for very difficult
ground conditions.

2100RL. sur race l''ill

I
I
I
"---1--1-- --nn-f;;;:::'C
I
I
2600

2500

rls,n,s
2400 _

r.str'fts

~------- -- ------
Inferred
r'souret - - + t - - -

2200

~ I"'hn,d irt.

1..!.Q.L-
~ Hlln dl,lIne

--- ExlStong d.nt.pr.. nt

z z z z z
0 0 0 0 0

2000 ;: ~ ~
0
:. ~

FiG. 2. - Woodlawn Mine Longitudinal Section (looking West)

126 Melbourne March 1990 Ore Reserve Estimates

 ORE RESERVES AT WOODLAWN MINE

4. ORE RESERVE PROCEDURES 1986/1987
A major part of the 1986 Feasibility Study was the complete
recalculation of the underground ore reserves at Woodlawn. As
the previous database was limited to widely spaced surface holes,
earlier estimates had been of the resource potential only. The
assumptions used in this reserve estimate are summarized in the
following sections.
4.1 DATA COLLECTION PROCEDURES
4.1.1 Drilling
Sampling of. the orebody was carried out by diamond drilling
from both the surface and underground openings. Most surface
intersections were obtained with NQ core while underground
intersections were with BQ or TT46 size core. Drilling was on
nominal 20m sections with toe spacings of 20-25 metres. Drill
spacing is considerably wider in the deeper parts of the orebody
where underground workings were absent. All drill hole collars
were surveyed and tied into the Woodlawn Mine grid and regular
surveys were taken using a single shot downhole camera.
4.1.2 Sampling
All mineralized core was sawn with half core being sampled.
Sampling was in nominal one metre intervals though samples
were broken at obvious mineralogical boundaries where
appropriate.
4.1.3 Core Logging
Core recovery was estimated for each sampled interval as a
percentage of the total interval. Detailed core logging includes

/"-7

~R;'
~RL~
\ //

1/V
/// /
outline
Iv

I
/
v//
2700 /~
//":
complex
~

~ -~
oreX ./;:/

~
/
/
// g copper
ore
I //
2600 ~/
V

2500 / Lens le

2400
~
t==J

)!
II
///
I f Ore mined in open pit

2300 /I Surfore outline

of ore reserves

.' : .... ....

.,','
: Surf ore outline of
inferred resources

~ Mined areas

2200 .. 92S0N
..

""00 ""
0 ""
0 ""
0 ""
0 ""00 w
0
0.., 0 ..,
0 0
~
'".., .., ..,
r- .., C>"" 0
"" ""

FIG. 3. - Representative Cross Section at 9250N showing lens Ic and its open pit equivalent

Ore Reserves Estimates Melbourne March 1990 127

 DJ FI1ZGERALD and R P SL\fGER

2800RL

2700

lens 3

2600 . .:(:::?
, /
:-.;.,

lOO;! rr
2500 /
tt:
2400 1/r?
IVy
lb Cx

2300 ......
r
.... ~ lens lb Cu
/f/ Sur/ore outline
of ore reserves

...::.... 5urfore

-
::>:' outline of
2200 I : inferred resources

Mined uus
jf
9500N
:.: .....
2100

w w w w w w w
0 0 0 0 0 0 0
~
.,
0
N
OD
....
0
OD
0
~
0
.,'" ..,
0
.,
0
.,....
OD

FIG. 4. - Represemative cross section at 9500N showing lenses 1beu, 2b,3

lithology, structure and mineralization. This was routinely done
on all core and the data stored in the WOODLOG database. This
is used to interpret and to check computer assisted orebody
models.
4.1.4 Assaying
All assaying was undertaken on site at Woodlawn's own NATA
certified laboratory. Samples were jaw-crushed to less than 6mm,
roll-crushed to less than 1.5mm and quartered to obtain a 150
gram cut for pulverising. Part of the sample was acid digested to
determine coppe,r, lead, zinc, silver and gold by AAS. Another
portion was compressed for XRF analysis for Fe, Mg, Si, Al and
Ba. Good assay confidence was obtained through replicate
determinations made for every 30th sample. Any gold assay over
2 g/tonne was repeated by fire assay.
4.1.5 Specific Gravity
Specific gravities used up to the time of the feasibility study were
3.9 for complex ore and 2.9 for copper ore. These were based on
determinations over a number of years on material from the open
piL A total of 150 determinations of specific gravity on selected
core from the underground drilling programme were specifically
made for the study to check these values. Both complex and
copper ore were sampled and the means of the two populations of
4.1 and 2.7 were obtained. It was decided that for the purposes of
the feasibility study the historic values of 3.9 and 2.9 would be
retained.

128 Melbourne March 1990 Ore Reserve Estimates


4.2 MANUAL METHODS
During the initial phases of the underground feasibility study, a
manual method for estimating the position in space of the
surfaces for each lens was developed. This method formed the
basis for defining a volume and hence a tonnage, however it
proved tedious and time consuming as continuous changes were
being forced by more up to date data. The need for a more
interactive and responsive computerized method became
imperative if the timetable for the feasibility study was to be
adhered to.
4.3 DEVELOPMENT OF COMPUTERIZED ORE
RESERVES
From the beginning of the 1980's, Woodlawn Mines had been
active in all aspects of on site technical computing. In particular,
the geological database was computerized and supported by in
house developed interactive Basic and then Fortran programs
using a PDP-ll/40. The geological needs of the open pit
operation were well served by these tools. With the increased
demands on the geological staff during the initial phases of the
underground feasibility study, it became apparent that an upgrade
to a more modem and robust computing facility was required.
Des Fitzgerald and Associates (DFA) were retained to assist in
specifying an approach to meet the needs of the mine. In
particular, the need for interactive computer graphics and more
integrated tools was recognized. A microVax 11 was purchased
along with two high resolution interactive colour graphics
terminals (Seiko 'and Lexidata). The move to modeling of the
orebody required a more sophisticated level of computer software
and this was satisfied by the development of the SURFORE
orebody modeling system by DFA.
4.4 SURFORE - ORE RESERVES SOFTWARE
SURFORE was designed with the following main objectives:
a) To model the surfaces of underground ore bodies.
b) To compute tonnages and grade for an arbitrary grid of cells
within orebody models.
c) To simulate established manual methods.
d) To allow easy manual checking of any or all phases of the
process.
e) To use a systematic design approach to allow easy
modification and tailorjng.
f) To create a highly productive tool for the professional
geologist.
g) To minimise training requirements for new staff.
The system employs many computer aided engineering
techniques to provide an easy to use and productive environment.
The central program in the SURFORE system is menu driven
and it consists of three distinct parts or phases. The first phase
allows the user to nominate points on the footwall and
hangingwall surfaces of the orebody. Assay data from all
drillholes is displayed in histogram form at right angles to the
hole trace. Limits to the mineralization are nominated by the
geologist and referred to as control points. Pairs of
footwall/hangingwall points in true three-dimensional space are
thus created for each hole that intersects a lens. These points can
be viewed freely in any of the three standard orthogonal planes.
The points are stored in 'control point' files which are updated
every time a user exits from phase one.
Ore Reserves Estimates Melbourne March 1990
ORE RESERVES ATWOODLAWN MINE
The second phase allows the user to refine the model surface to
the desired shape by moving existing control points or by adding
new ones. Additional control points can be digitised from
mapped ore outlines ensuring the model is consistent with
observations made during mining and as more information
becomes available. Utilizing all information, surfaces for both
the hangingwall and the footwall are constructed by creating
best-fit triangles between essentially random points in space. The
triangulation algorithm was initially adapted from the work of
Akima (1978) but has recently been changed to one derived by
Watson (1981) which enables a common surface between
." touching lenses to be assured. These surfaces are manipulated by
the geologist for continuity or any other criteria felt appropriate
(e.g. faulting). The surface and contour diagrams are generated at
any time during the process quickly enough so that it is practical
to make many revisions and refinements to the interpretation.
The third phase allows the user to calculate block tonnages and
to allocate grades. Block tonnes and grade data from this phase
of the programme are stored in 'reserve' files.
SURFORE has a menu driven orebody plotting optipn used to
produce scale drawings of orebodies or reserve information. The
drawings can include control points, hole data, reserve blocks,
surface contours, etc as required. This is the basic tool to get
working drawings. One strength of the design of this option is the
abilitY to compose and preview the hard copy drafting on a
graphics screen. The displayed information can then be written to
a 'plot' file which can be spooled to a plotter or exported to a
drafting package such as AUTOCAD.
SURFORE has the capability to interrogate ore reserve models
and generate tonnes and grade reports. An option for allowing
mining cuts when calculating block tonnes is also available. The
calculated reserves data for a model is stored permanently on a
disc and can be interrogated by a variety of programs. The data is
designed to be easily imported into spreadsheets such as Lotus.
In a recent development SURFORE has been ported to
TECHBASE, a generalised mining package, making it more
accessable to the mining community at large.
4.5 GEOLOGICAL INTERPRETAnON
The initial interpretation of the lenses was made by preparing
cross-sections at intervals ranging from 35 to 60 metres showing
hole paths with symbolic rock types and mineralized limits.
Preliminary interpretations for continuity both on and between
sections for individual lenses were made. SURFORE was used to
project the same information onto an interactive graphics screen.
A more detailed interpretation based upon 20 metre sections was
then developed.
4.6 CUT OFF GRADE
Cut off grades were determined on the basis of Equivalent Zinc
Units (EZU) for complex ore and Equivalent Copper Units
(ECU) for copper ore. In practice only the EZU formula was
used as tlle great bulk of mineralisation was classified as complex
ore. These formulae were based on the relative pricing of the end
products and mill recovery factors operating at the time.
Initially the following formula was used:
EZU% = 1.3 x Cu% + 0.1 x Pb% + Zn% +.02 x Ag g/t
This was changed during the course of the study to:
EZU% = 1.6 x Cu% + 0.1 x Pb% + Zn% + Ag/55 g/t - 2.5%
129
 DJ FI1ZGERALD and R P SINGER

4.11 RESERVE STAGES

A 10% EZU was used as a cut off for the complex ore in cross A number of stages of reserves were calculated and reported in
section projection at the margin of the mineralization. the feasibility study. The original in situ reserve was adjusted to
Mineralization was considered economic at this grade after eliminate all ore of plan width less than 3 metres. This reserve
consideration of all mining and treatment costs. This cut off was was termed the "3M Reserve" and was essentially equivalent to a
however applied strictly in the modeling procedure independently mineable reserve. A second reserve was calculated and referred
of the proposed mining method. to as the "5M Reserve" which equates to a recoverable reserve.
4.7 REGULAR REVISION OF MODELS This was derived by eliminating all ore of plan width less than 5
; metres and assigning "cut factors" to each block based on the
D~ring the feasibility study, two hydraulic drills were operating projected mining recovery. The resulting layout of blocks was
and producing as much as 100 metres of core a day. This core inspected by the Mining Department which led to som~ bl?cks
was continuously being logged, split and assayed. A turn-around being restored to the reserve so that access could be mamtamed,
of less than two weeks from drilling to incorporation into an ore- whilst others were eliminated due to inaccessibility. A dilution
body model of the complete assay and survey data for a hole was factor of 5% on tonnes was then applied and the in situ grades
regularly achieved. This enabled a continuous re-assessment of were cut by 15% to arrive at a final recoverable reserve.
interpretations and revision of targets for drilling. Rapid
turn-around of data and interpretations proved to be a very 4.12 RESULTS
significant component of the strength of the SURFORE system. The calculation of the reserves was completed on schedule in mid
Data entry, reinterpretation of models and recalculation of 1986, despite severe time constraints, and auditing of the reserves
reserves following new drill data can be achieved typically within by Robertson Research took place in September 1986 (Cotton,
3 hours. 1986).
4.8 GRADE COMPOSITING Reserves reported in the Woodlawn Evaluation were as listed
in Table 1. No breakdown of these reserves was given with
A composite grade for the intercept of each drillhole in an Proven, Probable and Possible reserves being combined in a
orebody was calculated using the following rules. Individual single figure. This was done to facilitate comparison w~th an
sample intervals are length weighted and running totals for each earlier in situ resource estimate that had been the baSIS for
element's mass are maintained. Where there is core loss, it is preliminary assessment of the potential for an underground mine.
assumed that the material lost was of no economic significance The total "3M Reserve" figure of 4.3 million tonnes was reduced
and so the length contributions of Cu, Pb, Zn and Ag assays are to 3.4 million tonnes for the "5M Reserve". Following additional
proportionally cut by the percentage core loss (e.g. length x Cu% drilling completed after the conclusion of the evaluation study, an
x core loss %). The drill hole intercept grades for Cu, Pb, Zn, Ag,
Au, Fe, Mg, AI, Ba and Si are then calculated by dividing the
length contributions for each element by the total intercept length. TABLE 1
Recoveries were in general lowest in the talc rich shear zones and Woodlawn Mine Reserve Estimates 1986/87
it was felt that use of the more conservative grades calculated for
these areas by this method was prudent.
tonnes % Cu % Pb % Zn Ag g/t
4.9 RESERVE CALCULATIONS (millions)
Using SURFORE a two dimensional block grid of dimensions 20
1986 Evaluation
metres long by 5 metres high is superimposed over the long
Study
section trace of the ore-body outline. The width of the blocks is
September 1986
the orthogonal distance between corresponding positions on the
interpolated hangingwall and footwall surfaces. Grades were 5.7 14.3 115
"3M Reserves" 4.3 1.7
assigned into each block by the geologist by deciding on a
(Proven & Prob
combination of the nearest drillhole bulked intercept grades.
& Poss)
Investigations into the use of other block sizes (such as lOm x
5m) are currently taking place.
"5M Reserves" 3.4 no grade available
4.10 CLASSIFICATION
Updated "5M
The terminology used was consistent with the 1981 Aus I.M.M. Reserve"
recommendations current at the time of the Study (Joint January 1987
Committee, '1982). The rule for classifying ore reserve blocks
into Proven, Probable and Possible was based on the distance of Proved Reserves 1.02 1.47 4.50 11.31 91
the centroid of the block from a drillhole assay sample in the Probable 1.44 136 5.04 12.19 110
same lens. If this distance was less than 20 metres the block was
considered Proven. If the distance was greater than 20 metres but Proved and Probable
Reserves 2.46 1.41 4.82 11.82 102
less than 40 metres, then the block was classified as probable. If
the distance was greater than 40 metres then the block was
Possible "Reserv~s" 0.71 1.21 4.49 1.76 74
considered possible. The lens was interpreted to extend no more
than 80 metres from the nearest sample data. These rules could Total 3.17 1.37 4.75 1.81 96
however be overridden by the geologist.

130 Melbourne March 1990 Ore Reserve Estimates


updated reserve calculation was made as at 1st January 1987. No
changes were made in the assumptions discussed earlier in this
paper and the models developed for the feasibility study were
essentially the same except for the refinement brought about by
the additional drilling. This reserve incorporated a breakdown
into Proven and Probable reserves and Possible "reserves" (see
Table 1). Recoverable reserves (Proven and Probable) at the
beginning of 1987 were estimated at 2.46 million tonnes with a
further 0.71 million tonnes classified as possible "reserves". With
the continuation of mining it is estimated that the remaining
Proven and Probable reserves at the time of the hand over of the
Mine to Denehurst were approximately 2.2 million tonnes or just
on four years mine life.
5. ORE RESERVE PROCEDURES 1988/1989
Following the acquisition of the Mine by Denehurst and after
some months operating experience, it was recognised by the end
of 1987 that the existing ore reserve had a number of deficiencies.
It was decided in the first half of 1988 to undertake a major
reassessment of the ore reserve procedures.
The main factors which necessitated this were:-
a) The dramatic increases in base metal prices in 1987/1988
rendering the original EZU cut off grade formula
inappropriate. Continued use of this formula meant the
elimination from the reserves of moderate to high grade
copper ore which had become economic.
<
b) Mining experience was indicating that significantly more
ore was being extracted from some areas than suggested by
the reserves. This was clearly the result of the chosen cut
off grade for the reserve (10% EZU) not reflecting mining
practice, which was, wherever possible, to mine to the
natural ore limits. Experience showed that for the mining
method at Woodlawn, mining to an arbitrary cut off grade
was not practical.
c) Adoption of the Aus I.M.M.'s Australasian Code for
Reporting ofIdentified Mineral Resources and Ore Reserves
(Joint Committee, 1988) meant that the Woodlawn reserve
methodology had to be reviewed to ensure that the
requirements of the Code were being met. This was
particularly so with regard to the classification into Proven
and Probable Reserves.
d) As underground access to more of the orebody became
available, further detailed exploration took place. This
meant considerably more information on the deeper
mineralization became available requiring reassessment of
reserves in these areas.
Durin~ the course of this review, many of the 1986 practices
were revised. The following discussion details these changes.
5.1 DATA COLLECTION PROCEDURES
The original data base remained unchanged with the exception of
the addition of some further drilling completed between January
1987 and June 1988. Drilling, sampling and core logging
techniques remained unchanged. Minor refinements to assaying
techniques had taken place in the intervening two years including
the introduction of a new combined crusher and splitter and the
replacement of AAS with Inductively Coupled Plasma (ICP)
analysis for some elements.
5.2 SPECIFIC GRAVITY
Ore Reserves Estimates Melbourne March 1990
ORE RESERVES AT WOODLAWN .MINE
Given the variability of sulphide content in the different ores at
Woodlawn, it was decided to review the use of average specific
gravities as outlined in Section 4.1.5. A programme of density
determinations on samples of core which were subsequently
assayed for Cu, Pb, Zn and Fe was carried out. A multiple
regression of the data revealed a very close correlation between
specific gravity and the Fe and Pb and, to a lesser extent, Zn
assays. The derived relationship was .
SG = 2.2118 + 0.0552 x Fe% + 0.0487 x Pb% + 0.0226 x Zn%
Use of this formula on the average grade of each lens produced
the following specific gravities for the complex ores:-
Lens lE 3.67
Lens 2B 3.98
Lens 1C 3.92
It was decided that the use of this formula was likely to provide
a better estimator than the use of average values and this formula
is now used routinely for tonnage estimation. It is proposed to
refine the formula as more data becomes available.
5.3 CUT OFF GRADE FORMULA
A critical examination of the effects of using a cut off grade
formula that composites two or more metals was undertaken. The
original bias in 1986 was towards the complex ore being
evaluated in Equivalent Zinc Units. Observations of material that
was less than 10% EZU suggested that considerable thicknesses
of mineralization were not included in the reserves. The most
obvious anomalies arose in copper rich portions of the complex
ore. For example in DDH U148 the 1986 reserve intersection was
269-279m (lOm) @ 2.46% Cu
5.23%Pb
14.38%Zn
56 ppmAg
The total observed mineralization was
261.7-279m (17.2m)@ 3.51 % Cu
3.07% Pb
8.81%Zn
40 ppmAg
This meant that the material left out of the 1986 reserve was
261.7-269m(7.2m)@ 4.95%Cu
0.11% Pb
1.16%Zn
17ppmAg
With significant increases in the prices of Cu and Zn from late
1987 and improved metal recoveries, weightings in the formula
had become outdated. In addition the breakeven cut off was too
high in terms of EZU due to the much higher prices.
The cut and fill mining practice adopted during the first year of
operation was to stope to a visible cut off or lithological
boundary. There was no attempt by on-site geological or mining
staff to mark up or to indicate the portions of the orebody that
complied with the 10% EZU criteria. It was considered
impractical to mine to an arbitrary cut off. This practice resulted
in significantly higher ore extractions in some areas than was
expected from the ore reserves. It also meant that the SURFORE
derived ore outlines were not able to be used reliably in mine
planning. It became clear that reserve practice in relation to the
use of the EZU cut off would have to be drastically changed.
131
 DJ FITZGERALD and RP SINGER
As a practical solution to this problem it was decided to
abandon the use of equivalence formulae for cut off
determination. In their place all ore was included which fell
within "natural" cut offs to more closely reflect the current
mining practice. In the few instances where a "natural" cut off
could not be recognised, assay cut offs of 5% Zn or 2% Cu were
used as these were considered to closely simulate the observable
limit of sulphides.
During the 1988 review, all existing holes were checked in the
data base and the previous ore reserve intersections reassessed.
Where the existing cut off points were considered inconsistent
with the new cut off criterion, they were replaced by new
footwall and hangingwall control points based on a natural cut
off. The revision of this practice had the obvious effect of
dramatically increasing the in situ ore reserves.
5.4 GRADE ASSIGNMENT
As noted in Section 4.9 assignment of grade to reserve blocks
prior to 1987 was made on the basis of the nearest drillhole
bulked intercept grade. This was considered to be a crude
estimator and as part of the 1988 review a missing value test was
run for all the lenses to determine the appropriateness of other
grade estimation techniques. A total of 27 variations on inverse
power rules and power transforms were trialed. This test
~onfirmed that the inverse distance squared weighting in three
dimensions with no power transform gave the best estimates of
grade at a known point. This weighting was subsequently
adopted.
5.5 RESERVE AND RESOURCE CLASSIFICATION
Considerable thought was given to the most appropriate method
for the categorisation of the various reserve and resource blocks
to ensure that it was realistic and that it satisfied the new Aus
I.M.M. Guidelines (Joint Committee, 1988). These guidelines
state simply that for resources to be considered as measured (or
reserves as Proven), sample data (in this case drilling) must be
closely enough spaced to confirm continuity.
Examination of the distribution of reserve blocks of the various
categories under the then existing rule (see Section 4.10)
suggested that in many areas material was classified as Proven
and Probable where continuity could not be assured. This was
particularly so with some of the deeper holes which were often
widely spaced from other holes. In an attempt to ensure that the
categorisation of the reserves and resources related more to the
density of drilling rather than to the distance to the nearest drill
hole, the rule for classifying an ore-block into measured and
indicated (or Proven and Probable) was changed. This had the
effect of creating larger, more continuous areas of one
classification rather than the more patchy distribution of blocks
under the old rule. It was also considered to better represent the
confidence levels and more particularly the likely continuity. The
new rule is as follows:-
If the centroid of a block is within 20 metres average
distance to the nearest 3 drillholes, then the block is classed
as measured (or Proven).
If the block, is greater than 20 metres and less than 40 metres
average distance to the nearest 4.drill holes, then the block is
considered indicated (or Probable).
All other blocks within the bounds of the interpretation are
considered as inferred resource.
132 Melbourne March 1990
The above was entirely empirical in its derivation and was
intended to provide an objective rule which could be applied by
the computer and yet simulate the classification that would have
been derived using the geologist's judgment. This relatively
minor technical change had a large impact on the revised reserves
and the implications of this are discussed in Section 7.
5.6 ORE RESERVE STAGES
The calculation of the final ore reserve takes place through a
number of distinct stages. After 12 months of mining experience
it was possible to more rigorously define these stages.
5.6.1 In Situ Resources
These resources represent the total global estimate of
mineralization contained within the nominated edge polygon
determined by the geologist. No application of minimum mining
thicknesses or allowance for ore already mined is made. The
resource is divided into measured, indicated and inferred
categories along the lines discussed in the previous section.
5.6.2 Mineable Reserves
Mineable ore is defined as those in situ resources which are
considered economically exploitable and are available for mining
after allowing for ore already extracted, minimum mining widths
and areas sterilized by mining or geological factors. All ore of
width less than 3 metres is excluded from the reserve. Ore along
strike from a mined area is treated as sterilised by the mining
method and is also eliminated. For marginal blocks or blocks
affected by pre- existing mining, a factor of between 0 and 1 is
assigned by the geology and mining staff to represent the
percentage of a block available for mining. Only measured or
indicated resources are considered in assessing mineable reserves
and these are classified as Proven and Probable reserves
respectively.
5.6.3 Recoverable Reserves
Recoverable reserves represent that tonnage of mineable reserves
which is estimated to be able to be recovered. All blocks in the
mineable reserve are assessed for their potential mining
recoveries after taking into account the mining method, pillar
locations, ground conditions, and geological structures.
Historical recovery factors are used in areas where previous
mining has taken place. In areas remote from mining,
conservative recovery factors ranging from 50% to 70% are used.
The calculation of the recoverable reserve is achieved by
applying the estimated recovery factor for each block to the
equivalent block tonnage in the mineable reserve. Inferred
resources are not adjusted for mining recovery.
5.6.4 Diluted Recoverable Reserves
An estimated dilution factor is applied to the total recoverable
reserve to arrive at the final diluted recoverable reserve. Based
on observations during the first year of operation, dilution has
been found to be highly variable. While it generally falls in the
range of 8-10% in individual stopes where ground conditions are
poor it may reach 20-30%. An average figure of 10% has been
accepted. Nil grade has been assumed for this material on the
assumption that most of the dilution derives from footwall or
hangingwall overbreak. In practice this material will carry some
grade. Allowance for dilution has the effect of increasing the
reserve tonnage and decreasing the reserve grade. It is these
diluted recoverable reserves which are quoted in releases to the
Australian Stock Exchange in line with the Aus LM.M.
guidelines. No dilution is applied to inferred resources.
Ore Reserve Estimates
 ORE RESERVES ATWOODLAWN MlNE

6. RESULTS OF ORE RESERVE REVISION The second major factor effecting significant change to the
reserves is of perhaps more fundamental significance. A
The results of the 1988 reserve recalculation are given in Table 2 relatively minor change to the categorization procedure such as
and they can be seen to differ markedly from those calculated in
was introduced at Woodlawn has the potential to make a
1986 and 1987 (fable 1). The increase in the reserves (ie. Proven
and Probable) to 3.15 million tonnes is despite the mining of significant change in the final reserves figure. The problem here
approximately 700,000 tonnes in the intervening period. The is that such categorization procedures cannot be standardised by
grade of this reserve was however significantly lower for Pb and the imposition of industry wide guidelines. They derive from the
Zn but higher for Cu - reflecting the abandonment of the EZU cut geologist's judgment and may be different for different orebodies
off formula. An additional complex inferred resource of 1.95 depending on the geology, orebody geometry and overall level of
million tonnes was also recognised along with a newly calculated understanding. At Woodlawn the changes were introduced after a
copper inferred resource of 0.88 million tonnes. Because of the significant period of mining had led to increased confidence in
dramatic increase in the reserve position Robertson Australia correlations between drillholes and projected continuity.
The experience at Woodlawn highlights another important
TABLE 2 feature of ore reserve estimation, namely the stage in the life of
Woodlawn Mine Reserves and Resource Estimates - June 1988 the mine at which the estimate is made. Perceptions are often
dramatically different at the pre-feasibility or feasibility stage of
tonnes %Cu a mine's development compared with those after a mine has been
%Pb %Zn Ag g/t.
(millions) operating for some time. This is not simply a result of the
increased level of understanding that comes with an operating
Proven 2.01 mine but may also be a function of the different economic
1.66 4.56 10.53 119
Probable 1.14 1.57 imperatives. At the feasibility study stage there is a natural
4.25 10.65 92
tendency for inbuilt conservatism in the resource assessment.
Total Proven and This is to ensure that the investment necessary to commence a
Probable Reserves 3.15 mine is not predicated on an ore reserve which later turns out to
1.63 4.46 10.59 109
be over optimistic. On the other hand if the mine is operating and
Inferred Resources the investment has been sunk the emphasis becomes one of
Complex 1.95 1.1 maximising the return from the available resource.
3.9 10.6 58
Copper 0.88 4.1 Mineralization which may have been ignored for earlier
1.2 3.7 26
assessments may be considered as economic once underground
Total Inferred development is in place. This is certainly the case at Woodlawn
Resource 2.83 where as part of the 1989 reserve update ore reserves were
2.1 3.1 8.4 48
included from Lens 3 which had not earlier been considered in
the reserves or resources despite the knowledge of potentially
were again asked to audit the changes in procedure. They
economic mineralization. Drilling is taking place on other lenses
concluded that the procedures used gave a "fair representation of
the material to be mined" and that "the categorization of the not currently in the reserves or resources and it is hoped that
reserves and resources conform to the Aus I.M.M. Guidelines" further reserves will be identified.
(Leahey, 1988). These revised reserves indicate a significantly The importance in ore reserve estimation of keeping
longer mine life than had been anticipated. assumptions under constant review cannot be overestimated.
Any change in a reserve estimate can have a large impact on the
7. CONCLUSIONS
perceptions of the mine or its controlling company to those
The main factors which have contributed to the increase in outside. In the case of Woodlawn the re-evaluation of the
reserves at Woodlawn are changed assumptions in the cut off reserves has changed the mine from one with a life of not much
grade criteria and in the categorization rules. Other alterations to more that three years at the time of Denehurst's acquisition to an
procedures such as modifications to the treatment of specific operation in 1989 with a projected six year life and with
gravities have had only a minor or neutral effect. While drilling additional resources which give the expectation of the Mine
carried out prior to the 1988 review resulted in the upgrading of continuing for some years beyond that.
some mineralization to reserves, the bulk of the change was due
to the two factors highlighted above. The orebody modeling 8. ACKNOWLEDGEMENTS
procedure or calculation techniques have not been altered and the
database is unchanged except for the addition of the drilling just The assistance and support of Dr w.J. McKay and R.H. Davies
referred to. who contributed to fundamental and helpful discussions of
The data presented in this paper serves to emphasize the SURFORE algorithms used in the underground feasibility study
is gratefully acknowledged. The dedicated team work of the staff
fundamental importance of assumptions such as these in the ore
at Woodlawn has been a very significant factor in the success of
reserve estimation process. It also demonstrates the need to keep
the mine operation today. The authors wish to record their thanks
these assumptions under constant review. The use of an EZU cut to Denehurst Limited for their support in the preparation of the
off grade formula, as originally applied at Woodlawn, does enable paper and permission to publish and to Dr w.J. McKay and MJ.
account to be taken of changes in price levels, recoveries and Bouffler who reviewed the manuscript and provided many
operating costs provided such reviews are regular and timely. The helpful comments.
relevance however of such a cut off in terms of practical
considerations needs to be kept in mind. At Woodlawn the 9. REFERENCES
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required to comply with such a cut off coupled with the fact that ACM Trans. on Mathematical Software Vol. 4, No 2.
mining was taking place to the obvious sulphide limits.

Ore Reserves Estimates Melbourne March 1990 133

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Ore Reserve Estimates