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16 SEG NEWSLETTER No 118 • JULY 2019

Mine Planning and the Crucial Role of Geology


Ed Holloway,† Quantified Strategies, 40 Isles Road, Indooroopilly, Queensland 4068, Australia, and
Scott Cowie,† PanAust Limited, 15 James Street, Fortitude Valley, Queensland 4006, Australia

Editor’s note: The Geology and Mining series, edited by Dan Wood and Jeffrey Hedenquist, is designed to introduce early-career professionals
and students to a variety of topics in mineral exploration, development, and mining, in order to provide insight into the many ways in which
geoscientists contribute to the mineral industry.

Introduction necessary stage in the planning process


Abstract leads to mining uncertainty and can
Mine planning is the process that deter- High-quality mine planning is key to ultimately lead to less than optimal
mines the way in which an ore deposit will extracting maximum value from an ore project or operational decisions. Cap-
be mined over the life of a mining oper- deposit. The process by which a mine is turing the right data at the right time
ation. It necessarily draws on everything designed and scheduled (i.e., planned) during the strategic development of a
that planning engineers believe will deter- requires that a combination of appro-
mine the ultimate success of the proposed
mining project is essential to maximize
priate technical standards, guidelines, the value of the mining asset.
mine and uses as its foundation all of the and procedures be used to ensure all
geology-related data on the deposit. It is Geologic properties are unchanged
mining-related interactions are incorpo- by the passage of time1. However, the
both a strategic and a tactical process that
rated accurately and effectively. For this way engineers apply mine planning
first considers a longer-term horizon based
on strategic considerations, followed by
to occur each member of the planning processes within a project constantly
more detailed shorter-term planning pro- team (geologist, metallurgist, mining evolves as an increasing amount of
cesses, in this order; the latter are the result engineer, etc.) must understand what information becomes available, tech-
of tactical considerations. is required and when it is required. The nology advances within the mining
This structured process may also be quality of output from the planning industry, and new skill sets are intro-
referred to as integrated mine planning, process will be significantly influenced duced to support development of new
and it is driven by a broader corporate strat- by the quality of the information avail- approaches to mine planning. This arti-
egy or set of objectives. As such, it is much able at each stage and by the sequence
more than the mining engineering section cle highlights some of the key aspects of
in which the information is assessed. integrated mine planning, including the
of the mine development process. It has to The planning process will be affected
include inputs from all related disciplines, data required, typical processes that are
adversely if relevant information is used, and how inherent mining uncer-
by combining all of the measured proper-
missing, not of the required standard, tainty is addressed to deliver robust
ties of the deposit with mining-associated
parameters. This results in the planning or assessed at an incorrect point in the mine plans that will deliver desired
process incorporating a significant number process. business outcomes.
of interrelated parameters. If these param- Integrated mine planning typically
eters are not used diligently and accurately commences once a mineral resource
or are not well aligned, or if the underlying estimate is established. This follows What Is Mine Planning and
data are deficient in either quantity or the exploration phase of the project in Its Purpose?
quality, the project or operation is unlikely which a deposit is identified. The plan-
to achieve its potential, by virtue of failures Mine planning considers and incor-
ning processes evolve during the study
in the planning process. porates all the measurable parameters
phases (scoping, prefeasibility, and feasi-
Best-practice integrated planning collected plus the knowledge of their
bility; Carlson, 2019) before the project
incorporates relevant inputs from all min- interrelationships, which is provided
is, hopefully, developed and production
ing-related fields: geology, geotechnical, to the mine planning team by the
geochemical, hydrogeological, hydrology,
commences. The study phases progress
various mining-related professionals.
mining operations, minerals processing, from lower levels to higher levels of con-
Mine planning is the process that has
marketing of product, waste management, fidence and detail, and they necessarily
the greatest impact on the way an ore
tailings, environmental, social science, involve specialists from a wide range of
deposit is developed into a mining
mine closure, etc. It includes all interfaces technical disciplines. To clarify termi-
operation. In this paper, we use termi-
in the business-value driver model, from nology, a mine development is typically
exploration drill holes to the mine closure nology for planning to mine a metallic
called a project prior to beginning opera-
plan. The planning process cannot be ore deposit by open pit. However, the
tion. Additional geologic data is (gen-
completed successfully by mining engineers processes described are equally applica-
erally) collected during all study phases
working in isolation from professionals ble to planning for mining other com-
and well into the life of the operation.
in other key disciplines. Because geology modities using other mining methods.
Geologic teams during exploration,
provides the foundation on which the This paper refers to the Australasian
mine plan is built, the quality and accuracy
project work, and mining operations
Joint Ore Reserves Committee (JORC)
of the geologic data provided to plan- play a critical role in this process. Cru-
Code; there may be some differences in
ning teams by exploration geoscientists is cially, early-stage geologic uncertainty
application where other codes (Carlson,
crucial. has the potential to significantly affect
2019) are used.
future business decisions. Geologic pro-
grams (such as drilling programs) must During the planning process, all

Corresponding authors: e-mails, the factors that can be influenced by
Ed.Holloway@quantifiedstrategies.com.au, always be designed with due consider-
scott.cowie@panaust.com.au ation for all aspects of mine planning. 1
Mining engineering time, as opposed to
doi:10.5382/Geo-and-Mining-04 The failure to obtain correct data at the geologic time.
No 118 • JULY 2019 SEG NEWSLETTER 17

technical and management personnel ore mining tailings dam failures in investment is preferable to alternative
are applied to the one aspect of the Brazil) and mining-related activities nonmining investments. Planning pro-
deposit that cannot be changed—its continues to evolve, with society’s cesses continue to evolve, to improve
geology. Fundamental outputs of the image of the global mining industry confidence in the quality of the out-
planning process are mine designs, becoming increasingly important. put, and to identify the maximum
schedules for the movement (min- Indeed, this aspect ultimately has the potential value from each deposit. To
ing) of related material (ore and waste potential to prevent mine development, help achieve this, high-level planning
rock), and then the associated equip- if this image fails to meet society’s processes are divided into strategic pro-
ment, labor, and cost-based models. expectations. cesses and tactical processes. Strategic
Mine planning is a process and not As a result, the level of effort and planning is the “what,” whereas tactical
an output; referring to a mine plan expenditure applied to mine waste planning is the “how.”
can be ambiguous, since the outputs management, for example, has Strategy can be defined as “a plan of
are designs and schedules. However, a increased significantly over recent action designed to achieve a long-term
mine plan can refer to a report, includ- decades; this includes not only tail- or overall aim” according to the Oxford
ing all component details, designs, ings disposal and containment but English Dictionary (https://en.oxford
schedules, etc. The level of detail also waste-rock storage, particularly dictionaries.com/definition/strategy).
required in mine planning outputs will where waste rock is acid producing and On the other hand, “tactics are those
depend on factors such as the study has potential to negatively affect the actions that are taken to support a
phase or the operational time frame, environment (Trout and Reid, 2018). business strategy” (Hubbard et al., 2008,
i.e., a feasibility study will have more At the same time, the increasing costs p. 237). Succinctly put, tactical mine
detail than a scoping study, and a (per unit of production) of mining planning is focused on executing the
three-month plan will have more detail operations are often driven by falling mining strategy established by strategic
than the overarching life-of-mine plan grades of the commodity being mined. mine planning. Tactical planning neces-
for an operation. Additionally, remote greenfield projects sarily incorporates and requires a greater
Good practice requires consider- also have costs related to installation of level of detail and accuracy than does
ation of a range of scenarios during the almost all of the infrastructure required strategic planning.
planning process to provide a deeper to support the mine. Many of the more
understanding, quantify business accessible and generally favorable (shal- Strategic mine planning
opportunities and alternatives, and low, simple metallurgy) deposits have Compared to tactical planning, stra-
assist in understanding the sensitivity already been discovered and developed tegic planning is differentiated by
of a proposed operation to changes into mines, leaving a profile of ever the analysis of a far greater range of
in one or more of the inputs (e.g., ore more economically and physically scenarios. One of the fundamental
grade, commodity prices, discount challenging deposits for possible future outputs of strategic planning analyses
rate—which is related to risk, etc.). For development (Fig. 1). is understanding the value available
an integrated mine planning process These changes to development to be delivered, based on the options
to be efficient and effective, it must opportunity translate into an increas- selected, while also considering
consider all the interdependencies that ingly challenging environment potential variability
to page 18 . . .
influence the business value model. for demonstrating that a mining in parameters. As an
This spans an extremely broad spec-
trum, from exploration drilling to the
mine closure plan. Mining profession-
als who are responsible for developing
mine planning systems (models)—
which necessarily incorporate param-
eters derived from other technical
disciplines—have the responsibility
to ensure that all parameters are used
accurately and comply with the design
and strategic intent.
Integrated mine planning has
evolved through improvements in
computer hardware and software,
with computing becoming increas-
ingly important because of the need
to address and offset the challenges of
exploiting lower-grade, higher-cost,
and deeper ore deposits (Valenta et al.,
2019). Mine development and operating
costs continue to increase to meet the
demands of establishing and maintain-
FIGURE 1. The Frieda River project is a greenfield mine development located in northwest Papua
ing a social license to operate. The level New Guinea and is one of the largest undeveloped copper-gold deposits in the world. The project
of social and environmental awareness lies in steep terrain with high rainfall and no available infrastructure (photograph of the Frieda River
of mining incidents (e.g., recent iron base camp, 2016).
18 SEG NEWSLETTER No 118 • JULY 2019

. . . from page 17 Mine Planning and the Crucial Role of Geology (continued)

example, this variability could include and payback period, should be consid- rock that will be mined as waste, as they
levels of equipment and plant through- ered to more accurately inform decision have direct environmental implications:
put capacity as a function of a variable making.
1. Sulfide minerals, such as pyrite, in
commodity price environment. One important output of a strategic
waste rock that will be mined and
Strategic planning necessarily planning process is conversion of an
stored onsite have the potential to
changes with the level of study con- appropriate proportion of the estimated
produce sulfuric acid when oxidized.
ducted. It is good practice to regularly mineral resources (determined by explo-
2. Carbonate minerals, such as calcite,
conduct strategic planning programs of ration drilling) into ore reserves. An ore
in waste rock will neutralize acid
work; however, the purpose varies. To reserve is the economically mineable
produced by oxidation of sulfide
illustrate, a project in a scoping phase part of a mineral resource (Joint Ore
minerals in the rock; depending on
may compare open-pit to underground Reserves Committee, 2012; Carlson,
the relative quantities of sulfide and
mining methods, whereas an operat- 2019).
carbonate, the acid produced may be
ing mine may need to confirm cutoff To achieve these outcomes, activi-
countered by the carbonate.
grades, mining and processing rates, ties common to all strategic planning
and stage designs. processes for an open-pit mine devel- Another example of a geologic attri-
The purpose of strategic planning is opment include, but are not limited to, bute of waste rock that can significantly
to establish and define those strategies the following: affect an open-pit operation is rock
that best achieve the company’s objec- density (specific gravity). If the opera-
1. Estimation of the mineral resource
tives and, therefore, provide a basis for tion requires a large amount of waste
and economic block modeling
more detailed tactical planning. Strat- rock to be removed, then this will form
2. Pit optimization for the final pit and
egies could include divesting, or not a significant proportion of the mining
staging pits (the latter sequentially
acquiring or developing, an asset, if it operating cost. This overall cost will be
developed as the deposit is mined)
does not meet the strategic objectives or determined by the total tonnage, so an
3. Schedule optimization, generally
requirements of the company that owns error in determining waste-rock density
economic-based sequencing, of
the asset. will directly translate into an error in
mining of the deposit (subject to any
The strategic objectives of a company operating cost and, more significantly,
appropriate constraints)
and, therefore, its strategic planning will require additional waste-rock move-
4. Valuation of the outcome
processes, will almost always be defined ment capacity. Clearly, if the waste rock
5. Scenario analysis
partly by a financial metric to which it cannot be removed in time, ore sup-
must be aligned. To this metric, other The above activities require, for even ply to the ore processing plant will be
objectives will be appended. Financial the simplest of mining assets, teams of affected. Therefore, accurate waste-rock
objectives are able to be efficiently specialists from technical and financial density measurements are critical to the
described as objective functions for use backgrounds collaborating effectively business of mining. Similarly, the den-
in optimization processes and associated and understanding the interrelation- sity of potentially economic mineralized
algorithms. Since an objective function ships between disciplines. The geol- rock is critical, as this will determine
is expressed in mathematical terms, ogy of the deposit is fundamental to the total metal mass, which affects the
it can be maximized or minimized in this process, given that it provides all accuracy of the estimated production
associated algorithms. intrinsic, direct deposit-related data for revenue.
One of the most widely used finan- the project or mining operation. The
cial metrics for strategic planning is strategic planning process must there- Tactical mine planning
net present value (NPV). NPV is the fore include data well beyond that of Tactical mine planning adds the detail
difference between cash outflows and base geology. The now well-established required to implement the strategic
cash inflows over a period of time (with need to incorporate environmental plan. As such, the associated designs
cash outflows being development and management scenarios (such as the and schedules that are produced include
operating costs and inflows being reve- designs of mine waste storage facilities) significantly greater levels of detail;
nue received from the sale of the mine in strategic planning illustrates the however, they do not cover the same
product), after applying a discount rate. range of geologic data that has to be range of scenarios or variations in
When NPV is expressed as an objective captured by geologic teams (starting inputs. There is always overlap between
function, the process will solve to max- relatively early in the exploration pro- strategic planning and tactical planning,
imize the result. Internal rate of return cess, upon discovery of an ore deposit) and there is also typically an iterative
(IRR) is an associated metric, being the and made accessible to other technical process between the two.
discount rate at which the NPV is zero. disciplines. It is not simply a matter of To provide a simple example, strate-
There are numerous shortcomings and focusing on the collection of geologic gic-level schedules may be constrained
limitations inherent in both metrics; data to support the revenue-generating by the total amount of material that
however, because of the simplicity and attributes of a deposit (i.e., the grade of can be moved within a year, whereas a
transparency of the underlying calcula- the mass of contained mineralized rock) tactical plan will include the detail of
tions, these remain as two of the most if the deposit is to become a successful scheduling each individual load unit by
widely used financial metrics within the (economic) operating mine. mining location, ultimately down to an
mining industry. Ultimately, a number To provide an example, there are individual operating shift.
of metrics, including all-in sustaining two types of quantitative geologic data Due to the increased level of detail
cost, undiscounted post-tax cash flow, that need to be collected when logging required in a tactical planning process,
No 118 • JULY 2019 SEG NEWSLETTER 19

the time required and the associated To expand on this statement, there is 3. Geophysical signatures—magnetic,
level of effort is significantly greater no point to increase the geologic con- electromagnetic, induced polariza-
than for the equivalent strategic fidence in the known size and average tion, seismic, etc.
planning process. With respect to the grade of a mineral deposit that (based 4. Deposit geology—lithology, min-
interrelationship between geology and on recoverable metal content) cannot eralogy, alteration zones, fresh and
planning, tactical planning is again a pay for the infrastructure required to weathered rock domains, faults,
subset of strategic planning, and the access and mine the deposit, let alone structures, in situ densities, and
same geologic data or, potentially, a recover the metal from the mineral- assays for possible head grades
subset of the data will be required. ized rock. Feedback to the exploration and a wide range of elements that
Given the increase in the level of team in an evolving situation such as may affect the value of the deposit,
planning detail, these data also have to this (i.e., early in the discovery pro- positively (byproducts) or negatively
be reviewed in more detail, since any cess) should be, for example, that the (penalty elements such as As, F, etc.)
omissions or inaccuracies in the data deposit needs to be at least twice the 5. Geometallurgy—geometallurgi-
will cause a more acute effect. currently anticipated size or grade to be cal weathering profiles, sufficient
viable, i.e., requiring step-out drilling metallurgical test work to inform
and/or defining higher-grade portions grade-recovery relationships by
What Geologic and Other Data geometallurgical domain, hardness
of the deposit. This will ensure that
Are Used? further exploration drilling programs parameters, recovery data for delete-
If the required deposit data are not are designed and targeted toward an rious elements
available as a successive planning stage aligned business objective—there is no 6. Geochemistry—ore, waste rock, and
is started, either the accuracy and con- point in defining the limits of a mineral tailings geochemical data (including
fidence of the output will be reduced, deposit that an early mining assessment nonacid-generating or net acid-pro-
or there will be time delays and cost has conclusively determined will not ducing potential and acid-neutral-
increases to allow the required data be economic to mine. The strategy and izing capacity, plus sulfur, carbon,
to be obtained. Therefore, it is essen- tactics used in exploration are covered metals)
tial that data collection programs are in more detail in Wood and Hedenquist 7. Geotechnical—geotechnical domains,
planned and designed to allow the time (2019). major faults, structures, fractures,
and budget to acquire the required data It is not only the spatial range of data hardness, acoustic televiewer data,
prior to advancing to the subsequent that is important but also the range of geothermal gradient data, rock stress
planning stage. attributes considered. If the only pur- data, and pore pressure
When encountered, some data gaps pose of an exploration drilling program 8. Hydrogeology—water table lev-
can be filled relatively quickly, whereas is to understand the geology and associ- els (packer testing, vibrating wire
other gaps require significant time and ated metal grade(s) of part of a mineral piezometers)
expense to resolve. Issues relating to the deposit, then all other parameters can
The resource-based data set that is
accuracy of the data can have the same be ignored without any real detriment.
collected must support the requirements
impact. For example, if an error or a bias Conversely, if the purpose is to either
of other technical disciplines, as well
is identified in the majority of chemical develop or expand a mining operation,
as support likely future requirements
analyses, the time and cost involved in the requirement for data collection is
as much as possible. The expectations
remediation will be significant. Another significantly expanded, and the purpose from stakeholders, including govern-
example is when insufficient rock of the exploration drilling program has ments, shareholders, local communities,
density data are collected during the to support this. It is generally far better international communities, and others
exploration drilling program (when it to capture more rather than less data at continues to increase. As a consequence,
would be a minor incremental cost to every opportunity when investigating as much as possible the data sourced
the drilling program to collect the data). the economic potential of mineralized today should be able to support these
If this occurs and a separate program is rock. future requirements, including plausibly
required to acquire the data, then sig- Such data that are determined by the anticipated changes.
nificant delays will be experienced and geology can include the following:
additional costs incurred for selecting Other data
the samples for density measurements, 1. Regional geology—regional geologic
maps and historic exploration data The data sets required from other disci-
transporting the samples from the core
held by regulators plines can include the following:
shed to an appropriate laboratory, and
incorporating the additional density 2. Local geology—lithology, miner- 1. Economic parameters—for-
results into the block model. alogy, alteration zones, domains, ward-looking metal prices, discount
faults, structures, geologic losses (in rates, depreciation schedules, taxa-
Geologic data coal exploration), representative in tion regimes, etc.
The level of knowledge available for mine situ density, weathering profiles, and 2. Mining parameters—bench height,
planning evolves from the first econom- assays for possible mining head grade productivity rates, haul distances,
ically significant result obtained from (i.e., the metal content expressed per geotechnical parameters, etc.
exploration drilling to the point of mine unit of ore that will be delivered to 3. Process and metallurgical
closure. Critically, exploration geoscien- a process plant), and a wide suite of ­parameters—grade-recov-
tists need to provide as much data of the trace elements (particularly useful ery-throughput relationships,
type required as possible for a mineral for machine learning and predictive ­primary wash data
deposit to be developed into a mine. algorithms) (for coal), etc. to page 20 . . .
20 SEG NEWSLETTER No 118 • JULY 2019

. . . from page 19 Mine Planning and the Crucial Role of Geology (continued)

4. Sales and marketing of product(s)— to be made by personnel with suitable risk to the project or operation if the
costs for freight, treatment and knowledge from appropriate sections of data are not collected. As an example, if
refining charges, penalty levels the business. Expenditure to collect data arsenic was detected in drilling assays,
(maximum concentrations and dele- in the early stages of a project is usually but subsequent metallurgical test work
terious elements) and charges, etc. the most cost efficient. on this topic was inadequate during
5. Survey data—accurate topography the study phases, there may be a cost
data (photogrammetry data will pro- to the business. The amount of arsenic
vide top of vegetation, which may
Accuracy, Risk, and Uncertainty in the concentrate may increase during
not coincide with the topography) It is impossible to remove all sources of the concentration process to a level
for mine and potential waste storage risk and uncertainty when planning for, that incurs significant penalties from
facilities, watercourses, villages, developing, or operating a mine. Incor- smelters; this penalty can far outweigh
infrastructure, etc. porating risk and uncertainty into the the cost of appropriate metallurgical test
6. Environmental baseline data planning framework allows decisions work in the early stages of assessment.
7. Archaeological situation to be based on the potential effects
8. Social considerations of numerous sources of variability. In
9. Tailings parameters—density, practice, the effects can be complex,
Open-Pit Mine Planning Process
geochemical properties, and other and their mitigation may be difficult Anything that will be incorporated in
material properties to achieve and challenging to interpret the planning process must be able to be
10. Operating costs—mine, process, gen- and distill into a set of informed strate- assigned either to a period in time or as
eral and administrative, and other gic decisions. Risk and uncertainty anal- a function (either directly or indirectly)
related costs yses provide valuable understanding to of a field in the geologic model. By this
11. Capital costs—initial direct and the likely outcomes for a mining project statement alone it is clear that the geo-
indirect costs, together with a con- or operation and are used to guide the logic model underpins all mine plan-
tingency risk assessment and other design of risk management programs. ning. All planning decisions should be
sustaining or expansion capital costs Decisions made under uncertainty or based on the attributes of the deposit.
12. Risk register—material risks identi- based on analyses incorporating the Planning outputs can be varied; the
fied with effective controls identified potential impacts of variability often deposit cannot.
vary significantly when compared to a Given the scale of even the simplest
It is too late to identify omissions single base-case scenario that provides integrated mine planning problems, it
when the data that have been collected limited understanding of the potential is presently not feasible to completely
and collated are being compiled and impacts of that uncertainty on value. solve these using brute computational
incorporated into a planning process. On this topic, geologic profession- force. For this reason, integrated mine
Issues in the underlying data clearly als and geostatisticians have through planning processes are typically subdi-
have the potential to materially affect time developed a suite of skills and vided into discrete subproblems, which
the quality of and confidence in the techniques to interpolate and extrapo- can be solved in reasonable time frames,
outputs. This is addressed in the JORC late sparse data to construct a geologic using commonly available computa-
Code (Joint Ore Reserves Committee, model. As an example, “if a copper tional resources. An iterative approach
2012) for the conversion of a mineral porphyry deposit is drilled on 100 m by is required and applied.
resource to an ore reserve, as discussed 100 m centres, with half being used for An overview of a planning process
by Carlson (2019). assays, this would result in 0.00007% for an open-pit mining operation is
The data are used to develop appro- of the deposit having been sampled” included in Figure 2, with the shaded
priate modifying factors to convert mea- (Vann, 2007, p. 7). From this extremely blocks denoting those tasks that are
sured and indicated mineral resources to small amount of data, the stated either directly or indirectly affected by
proven and probable ore reserves. The expectation may be that the contained the quantity and quality of geologic
quantity and quality of the data deter- metal is accurate to ±5%, a common data available for planning purposes.
mine the level of confidence in strategic expectation in operating mines. The An integrated planning pro-
mine planning outputs and significantly way that these data are then used in a cess should consist of the following
affect the ability to convert mineral planning and decision-making sense subprocesses:
resources to ore reserves. often implies that planning teams and
Expenditure on data collection and management expect it to be absolutely 1. Compile corporate, price,
the associated timing of this collection accurate with a 0% variation—clearly an and marketing parameters
remain business decisions; justifications impossibility. 2. Develop a geologic model
for expenditure are better developed Reducing potential variability comes 3. Develop a geotechnical model (or
by multidisciplinary teams but not to at a cost. Such costs can manifest in geotechnical parameters)
the detriment of further exploration to many forms, such as requirements for 4. Develop metallurgical or process
discover extensions to a known deposit additional drilling or metallurgical test models (or parameters)
or new deposits. Obtaining data of suffi- work, reduced upside value due to price 5. Compile cost parameters
cient quality at the right time increases hedging, etc. At times, the additional 6. Develop and execute a pit optimiza-
the likelihood of advancing the project expenditure of improving the data tion model
and, more importantly, of commercial on which decisions are based is trivial 7. Develop detailed mine or stage
success. Decisions of this nature need compared to the potential for residual designs
No 118 • JULY 2019 SEG NEWSLETTER 21

NPV is comparatively simple to


calculate and incorporates favorable
Drill hole Metallurgical
Database Test work attributes such as a perspective of time,
risk, and value into a single figure.
NPV is also able to (in theory) be used
to compare different scenarios for the
Metallurgical
Geological Block
Geometallurgical
Performance same project and for different projects.
Model (or
Model
representation)
Parameters Likely because of these reasons, NPV
remains the most widely used financial
metric. As such, it is also widely used
as the basis for the objective function
in planning processes and should be
Mining
External
Operating Cost
Geotechnical Design included in business justifications.
Parameters Parameters
Profile

Pit optimization
Pit optimization is generally one of
Pit Optimization the first planning-based subprocesses,
(LG, pseudoflow, because it informs subsequent subpro-
DBS, other)
cesses. Pit optimization produces pit
shells as outputs. Each pit shell quan-
tifies an incremental value according
to the revenue factor relative to the
input commodity price. This results in
Financial Detailed Mine pit shells that graduate from smaller,
Assessment Designs
higher-margin shells through to larger,
lower-margin shells (Fig. 3). These
outputs therefore identify the areas of
Schedule highest value for a potential open-pit
Financial Optimization mining operation.
Assessment (DP, LP, MILP,
GA, other) Pit shells lack any design detail such
as ramps, benches, berms, etc. They do
consider high-level geotechnical param-
Corporate
Detailed Detailed eters, however, such as an overall pit
Financial slope angle that includes an assumption
Cost Models Schedules
Model
relating to the incorporation of ramps
for removing ore and waste rock from
Detailed the pit.
Metallurgical
Performance Model Once generated, pit shells are then
used as the basis for the ultimate (or
final) pit design and (the intermediate)
FIGURE 2. Typical strategic planning process overview.
staging pit designs (Fig. 4). The ultimate
pit refers to the final pit to be con-
sidered for mining—the contour that
would represent the mine at closure.
8. Develop and run schedule optimiza- in further detail; the sequence follows A pit shell, typically referred to as the
tion models the order of the planning process. ultimate pit shell, will be selected as the
9. Develop detailed schedules basis of this final pit design. Equally, the
10. Develop detailed models outlining Financial metrics
staging shells are used as a basis for the
equipment requirements, labor Before any potential mine can become a design of mine stage designs. Design
numbers, consumables, costs, etc. mine, it must be a business, i.e., profit- stages are used to bring ore (value) for-
11. Load the results of these subpro- able. The corollary of this is that it must ward, and push waste (expenses) back in
cesses into the corporate financial be assessed using financial metrics. time, where possible. This results in an
model The NPV financial metric has a range increase in NPV.
of recognized shortcomings that are The process of pit optimization
Many of these steps will be iterated beyond the scope of this paper but are requires the following key inputs as a
individually or in groups. In doing well understood and remain as topics of minimum:
this it is common for multiple ongoing discussion and research (Samis
scenarios to be considered and com- et al., 2005; Taheri et al., 2009; Espinoza 1. Geologic model
pared for a wide range of these sub- and Morris, 2013; Espinoza and Rojo, 2. Geotechnical parameters pre-
processes and as a function of the 2017; Lilford et al., 2018; and many sented in the form of mine design
associated inputs. others). NPV is, nevertheless, well recog- parameters
The remainder of this section nized and conceptually well understood 3. Metallurgical or pro-
analyzes a number of these subprocesses by industry stakeholders. cess parameters to page 22 . ..
22 SEG NEWSLETTER No 118 • JULY 2019

. . . from page 21 Mine Planning and the Crucial Role of Geology (continued)

pit optimization process. The cause(s)


of the effect(s) may include any one of
the attributes described in the geologic
model (e.g., head grade, lithological
boundaries, density, etc.). For example,
if a high-grade ore deposit has a portion
that is unfavorably offset by a fault,
significantly less metal may be available
for mining, thereby affecting the results
of a pit optimization and subsequent
planning processes.
Pit optimization outputs are also
often sensitive to geotechnical parame-
ters. Geology-based inputs to geotech-
FIGURE 3. Cross section illustrating nested pit shells as produced by a pit optimization process. nical domain models are critical for the
Also shown is the original topography (orange). geotechnical parameters to be accurately
incorporated.
Although the mathematics support-
ing the LG-based pit optimization
process are well understood, the out-
comes of applying the process have a
series of shortcomings, including the
following:
1. Limited ability to incorporate time
and, therefore, financial adjustments
(such as discounting) as required in
the production of financial metrics,
including NPV
2. Disconnect between the time-­
FIGURE 4. Cross section illustrating the relationship between designed stages and the shell upon adjusted cost of waste mining and
which the designs were based. Note the detailed stage designs in the light-blue lines have larger removal, generally at the start (top)
mining widths (as compared to the pit shells in Fig. 3) and include ramp designs. of a pit shell, relative to gaining
access to material that will generate
revenue at the bottom (end) of the
4. Inputs from finance, marketing, and LG algorithm and delivers the same
same shell
operations departments: price and results more rapidly.
3. Limited ability to incorporate
cost parameters LG and/or pseudoflow algorithms
blending of materials (this can be
5. Inputs from operations and logistics feature in the majority of general mine
particularly relevant for a range
departments: high-level constraints planning packages, and all produce
of deposit types that are typically
similar outcomes. The algorithm returns
affected by product qualities, such as
The pit optimization process will the highest value (smallest shell) at the
coal and iron ore deposits, and for
often be the first insight into the poten- center of the nested shells that graduate
those operations that are constrained
tial scale and profitability of a deposit. outward toward shells that are not com-
by an environmental metric, such
Prior to implementing this process, mercially viable. The shells are generally
as contained sulfur, or levels of dust
potential methods for estimating scale reported as a function of the associated
production)
or value are rudimentary. A pit opti- revenue factor which, as the name
4. Shell gapping, where such large gaps
mization will typically be determined implies, varies the revenue streams by a
exist between successive shells that
on a deposit for the first time during factor and reports the largest shell that
they do little to inform
a scoping study. A scoping study is an remains incrementally profitable at that
planning processes
order-of-magnitude investigation of revenue factor.
how a mineral deposit might be mined The ultimate pit will generally be There are a number of approaches to
and the ore processed (Carlson, 2019). selected based on a stated revenue fac- assist in overcoming these shortcom-
It is usually completed fairly early in tor. It is critical to verify the ultimate pit ings, but they generally remain funda-
the discovery and resource definition selection using schedule optimization, mental to the structure of optimization
process. since the optimal revenue factor will algorithms. However, despite these
Pit optimizations for open pit vary as a function of a number of the shortcomings, LG-based pit optimiza-
mines are frequently based on the input factors and is particularly influ- tions presently are the most widely used
Lerchs-Grossmann (Lerchs and Gross- enced by the deposit itself, vis-à-vis the for open-pit mine optimization prob-
man, 1965) (LG) algorithm, or a variant geologic model. lems, and they serve to provide valuable
of it. The pseudoflow algorithm (Hoch- The accuracy of the geologic model insight and input into the planning
baum, 2008) is a modern variant of the will materially affect the results of the processes.
No 118 • JULY 2019 SEG NEWSLETTER 23

Direct block scheduling (DBS) is to an indicated or measured mineral parcel of material is equal to the total
another approach that can be used for resource category (in part or whole), cost of its mining and processing,
pit optimization, and in certain cases it as typically would be expected, it can including mining and storing waste
can produce useful results. Based on the then be expected that this same mate- rock; that is, the cost of producing the
original algorithms developed by Thys rial would be converted from a mineral revenue-generating material.
Johnson (Johnson, 1968), a number resource to an ore reserve. The pur- Optimized cutoff grade: Optimized cut-
of commercially available software pose of this is to identify high-priority off grade is a cutoff grade that has been
packages provide variants, all of which resource drilling targets. selected based on the application of a
attempt to reduce the sequential nature stated objective function (of the mining
of the planning processes. DBS is fun- Ore-waste differentiation operation).
damentally different from the LG-based The JORC Code (Joint Ore Reserves Fixed cutoff-grade profile: This is an
approaches in terms of both the algo- Committee, 2012, p. 36), as an exam- operating policy (of a mine) whereby
rithm and outputs. The DBS output is a ple, defines cutoff grade as “the lowest the cutoff grade used to guide the
schedule, albeit preliminary in nature, grade, or quality, of mineralised material operation remains fixed. As such it does
as opposed to LG-based nested shells, that qualifies as economically mineable not respond to changes in price of the
which do not produce a schedule. and available in a given deposit. It may commodity, operating costs, nature of
The DBS approach presents the also be defined on the basis of economic the waste produced, availability of alter-
potential to overcome a number of the evaluation, or on physical or chemical native ore sources, etc. Therefore, it has
LG-based shortcomings, such as the attributes that define an acceptable not been optimized.
incorporation of discount rates and product specification.” Variable cutoff-grade profile: This is
blending constraints and the preven- This definition is a reasonable start- an operating policy whereby the cutoff
tion of shell gapping. Such algorithms ing point for what is ultimately a com- grade is varied through time. A variable
continue to evolve and at times can be plex concept for which, at the next level cutoff grade will generally have been
more powerful than LG-based algo- of detail, one definition is not adequate. optimized as a function of the input
rithms, but there are limitations in the The purpose of the cutoff grade is to parameters and an objective function
types of inputs and levels of complexity quantify the quality of the material that (e.g., at the Ban Houayxai deposit;
that typically can be loaded into sched- should be sent to the waste-rock dump, Fig. 5).
uling algorithms. as opposed to a product stream of ore The concept of cutoff grade arguably
Regardless of whether an LG-based for processing and recovery of metals. commenced with mining itself, whereas
or a DBS approach has been used, there Some further definitions that are nec- the mathematics of how this should be
remains a significant amount of plan- essary to understand when differentiat- applied to the planning process were
ning work to be completed, including ing between ore and waste rock include first outlined in detail by Lane (Lane,
selecting the ultimate and staging pits. the following: 1964, 1988). Since then, innumerable
It is common for pit optimization Break-even cutoff grade: Break-even papers have been written analyzing
(and also mine design processes) to be cutoff grade is the grade at which the cutoff grade and its
to page 24 . . .
based on only measured and indi- revenue received from processing a application.
cated mineral resources as defined by
the JORC (or other) Code, since only
these two classes of mineral resource
are able to be converted to ore reserves
under the JORC Code. Any inferred
mineral resources that fall within the
pit optimization shells or stage designs
will typically be included in the sched-
uling subprocesses and potentially
be scheduled as mill feed. Because of
this, the pit optimization process is a
powerful tool to direct geologic drilling
programs that are intended to increase
the level of geologic confidence in an
inferred mineral resource. A typical
process would be to run a pit optimiza-
tion based on measured and indicated
resources only and select the ultimate
pit shell; this can then be compared to
the same revenue factor shell, includ-
ing material of lower geologic confi-
dence (i.e., inferred mineral resources).
The difference between the two shells
is therefore the material that has only
FIGURE 5. The complex geology at the Ban Houayxai gold-silver operation in Laos was captured
been excluded by the optimization due in the geologic model, which enabled optimization of the life-of-mine plan using a variable cutoff
to geologic confidence. Thus, if mate- grade to extract high-grade narrow veins on open-pit benches (photograph of the Ban Houayxai
rial is upgraded in geologic confidence open cut looking south, 2017).
24 SEG NEWSLETTER No 118 • JULY 2019

. . . from page 23 Mine Planning and the Crucial Role of Geology (continued)

To assist in providing a basis for use as the numerator an equation simi- less sensitive, often largely depending
understanding the concept, the formula lar to the following: on the grade profile. As an example, a
for break-even cutoff grade is as follows: large porphyry copper deposit may have
block value =
significant tonnages of material in sev-
break even grade (units/tonne) = (value of the block as ore) eral ranges of grade, so changes in the
cost ($/tonne) – (value of the block as waste). cutoff grade can affect large tonnages of
payable% ⋅ product price ($/unit) material. In contrast, a high-grade gold
The block value then has value per
⋅ recovery. deposit hosted in narrow quartz veins
tonne as its unit. Note that the value of
may be insensitive. Therefore, if the
the block as waste will mainly be a neg-
It should be stressed that a break- geologic model is updated or additional
ative value, serving to offset the mining
even cutoff grade should not be used geologic data become available, the
cost expense that is common between
in most planning applications. This analyses should be revisited and the
ore mining and waste mining.
will generally reduce the value of the process rerun fully to ensure all assump-
To allow any algorithm to optimize
business and increase the risk profile tions are updated. Updating only one
more efficiently, the block value is then
significantly. Further discussion of such element of the cutoff grade without
converted to a cash flow grade by incor-
risks can be found in Poniewierski and updating another element can result in
porating the primary system constraint
Hall (2016). One of the major issues a significant error in the calculation and
as the denominator. For example, for a
with using a break-even cutoff grade is result in uneconomic material being
metallic mine the constraint is often the
the effect that a small error in calcu- sent to the process plant or economic
semiautogenous grinding mill capac-
lation can have on the size of the ore material (ore) being sent to the waste-
ity (tonnes of material per hour), used
reserve. rock dump.
during the first stage of the ore grinding
There is no simple equivalent equa-
circuit. This results in the following Schedule optimization
tion to calculate an optimized cut-
equation used to calculate cash flow
off-grade profile to determine material For a schedule to have been optimized
grade:
destination, ore to mill or waste rock it will almost exclusively need to have
to dump. The central reason is that cash flow grade = been generated using an algorithm,
one of the key drivers of cutoff-grade (block value) with a range of algorithms and software
theory is the opportunity cost, which ⋅ (system capacity constraint)2. solutions used for this purpose. The
can only be considered as a function of following overview examines the impor-
alternative available ore sources within This formula results in a field with tance of schedule optimization and how
a given period. This is one of the main units of value/hour, which is the most this is integrated within a planning
reasons an optimized cutoff grade will efficient field to use mathematically for framework.
present as a profile that varies through optimization. The Oxford English Dictionary defines
time as material is mined. It can Cutoff-grade optimization can the verb to “optimize” as “to make the
therefore only be created as an output involve additional material quality best or most effective use of (a situation
of a schedule optimization algorithm elements, even when an efficient pri- or resource)” (https://en.oxford
with an appropriately defined objective mary metric such as a cash flow grade dictionaries.com/definition/optimize).
function. is used. This is referred to as a multi­ For a schedule to be optimized it
The variations in an optimized cut- dimensional policy. Examples include must be solved according to an objec-
off grade are thus strongly affected by the presence of a deleterious element tive function. Typical mathematical
the geologic model, for both the grade such as arsenic in a copper concentrate optimization approaches applied to
attributes and spatial accuracy. Each or a key differentiator in the cost of schedule optimization problems include
mining stage will typically be designed waste management, such as contained dynamic programming, linear program-
to access the next area of highest sulfur. In these instances, it may be ming, mixed-integer linear program-
value, with mine-stage designs aimed necessary to include additional dimen- ming, and genetic algorithms.
to achieve this access. As this mate- sion(s) to facilitate solutions in a As an individual schedule is opti-
rial becomes available to the mining schedule optimization model. The mized, the process is focused on
operation, an optimized cutoff grade inclusion of these additional fields as the sequencing of the rock material
will increase, and material that would dimensions in the cutoff-grade optimi- available, subject to the constraints
previously have been categorized as ore zation means that they become funda- and parameters for that scenario. The
may be reclassified and sent to waste mental to the differentiation between process does not dynamically vary
or stockpiled for possible processing in product and waste, as well as the constraints, the mine designs,
the future. to resultant cost profiles. Accuracy the underlying geology, or any of the
Assuming a financial metric has of the geologic inputs is once again of numerous other input parameters. How-
been selected as the objective function, paramount importance. ever, it does vary the timing, the areas
it is mathematically more efficient to The sensitivity of an operation to of the mine to be accessed, the cutoff
optimize the cutoff grade (or material changes in cutoff-grade (or material des- grade, the destinations to which each
destination, i.e., process plant versus tination) policy will vary significantly. parcel of material are sent, and, in some
waste dump) policy by using a calcu- Certain deposit types can be more or instances, the timing of certain capital
lated field, which is referred to as a decisions. To understand the impact of
cash flow grade (King, 1999). This will 2
($/tonne) ⋅ (tonne/hr) = ($/hr) factors that are not solved dynamically
No 118 • JULY 2019 SEG NEWSLETTER 25

within schedule optimization, scenario and scheduling purposes. This process stockpiles, waste dumps, etc. Detailed
analysis is used. also needs to consider any social or pit designs must consider not only
Schedule optimization generally environmental constraints significant at geotechnical design parameters but also
requires the development of relatively a strategic level (e.g., lease boundaries, whether major geologic structures will
complex modeling solutions. These heritage or cultural elements, noise pro- be undercut, which may affect ground
should accurately represent the inputs duction, levels of dust produced, etc.). stability. Designs must consider sec-
of the other disciplines, the effects of Schedule optimization is the critical ondary accesses (or secondary egresses)
strategic and management decisions, process that considers the geology, mine and how to maintain major ramp
and the impact of external factors such design, process and marketing, finan- functionality between stages or mining
as commodity price changes. Objective cial, risk/uncertainty, waste manage- areas and ensure that a consistent and
functions for schedule optimization ment, and time for any given strategic adequate ore supply can be maintained.
models typically are based on a financial scenario. This process then enables a It is this point that links mine and stage
metric, such as NPV. These will gener- valuation for each scenario to be devel- design back to schedule optimization,
ally, although not always, be on a real3, oped inclusive of an appropriate level of resulting in a significant effect on the
pretax basis. As such the schedule opti- supporting calculations. The outputs of product selection—or cutoff grade—
mization model should calculate the this process thereby provide results for profile and, therefore, the profitability
cash flow for all relevant inputs except sound strategic decision making, based of the scenario. It is common to iterate
for tax, depreciation, and amortization on the consideration of an appropriate numerous stage designs through the
(which typically are considered in the number of strategic options and sce- schedule optimization model to ensure
corporate financial model). nario analysis. As such, it is not uncom- that the designs result in an acceptable
A schedule optimization model mon for hundreds, if not thousands, of outcome (such as at the Phu Kham
should produce an outcome based on cases to be run in a schedule optimiza- deposit; Fig. 6).
the inputs, parameters, and constraints tion model, to enable selection of the From an ore-quality perspective, if
used to define the scenario. As such, preferred scenario. there are long periods of time with lim-
these factors are of fundamental impor- As an example, a schedule optimiza- ited access to quality ore as the stages
tance to the generation of accurate and tion model could be used to understand are mined, an optimized cutoff-grade
reliable results that can lead to sound the relationship between the processing profile will be forced to lower the cutoff
strategic decisions. Schedule optimi- rate, the mining rate, the bench turn- grade, thereby producing less or a low-
zation models that are inaccurate, are over constraint, and the (optimized) er-value product, which will generate
over- or underdetailed, or are based on cutoff grade for an operation. less revenue and lower the overall value
underlying data sets deficient in either Given that schedule optimization of the scenario. All other things being
quality or quantity will produce results models typically will be used to assess equal, this scenario will be expected
that may lead management teams strategic-level factors, they often will to also be higher risk. Such a scenario
to make poor strategic decisions. In have a granularity that will be rather may have access to a reduced number
extreme cases, this will lead to project ineffective at resolving detailed or tacti- of ore sources and be more exposed to
or mine operation failure. cal scenario variations. However, to be any adverse movements in costs (up) or
Schedule optimization is the first effective and efficient in rapidly cover- commodity prices (down).
time in the planning process that the ing an adequate range of strategic vari- Detailed design work often resides in
timing of activities, expenditures, and ables, this is preferred. Schedule periods tactical planning. There is an import-
access to each area that will be mined will often be annual, with inputs of ant feedback loop from detailed designs
are considered in detail. Given the entire benches within a stage. Such particularly to schedule optimization.
complexity involved in optimizing this models should include all the detail As the stage design process is focused
sequence and the destination of mate- and functionality necessary to provide on introducing the required design
rial, schedule optimization processes answers to the required questions and detail necessary to preferentially access
require a number of attributes, includ- no more. As with many other areas of areas of future higher-grade ore, the
ing spatial data. This process typically modeling, this results in more reliable, entire process must be focused on the
will use as an input either pit optimi- useful, and transparent models. location and associated value defined
zation shells or, more often, detailed by the geologic model. Variations in
stage designs. These are then queried Detailed mine design the geologic model thus have a direct
across the geologic model to report The process of developing detailed impact on the detailed design of the
the tonnes, grades, and other relevant designs is a simple concept, yet it mine stages.
attributes required for strategic planning remains a very time-consuming pro-
cess for engineers. Significant value lies Detailed schedules
3
The term “real,” as opposed to “nominal,”
expresses the value of something after in the quality of this work and in the Detailed schedules are a fundamental
making adjustments for various factors in capability of the teams involved, as this outcome of tactical planning processes.
creating a more accurate measure (Investo- work delivers the design basis required These schedules identify the material
pedia, https://www.investopedia.com/
terms/n/nominal.asp, accessed March 1,
to realize the value identified in the that will be mined from a location, the
2019). This can include factors such as strategic planning processes. destination to which it will be sent, and
inflation. In a mining valuation context, Detailed pit designs must incorpo- in what time period and by what equip-
real figures will exclude the effects of rate designed ramps, drainage berms, ment it will be mined.
inflation, whereas nominal figures will electrical cable accesses, access between The transition from a structured
include an adjustment for inflation to
support accurate depreciation and taxation stages, and an efficient haulage network schedule optimiza-
calculations. in order to provide access to crushers, tion output into a to page 26 . . .
26 SEG NEWSLETTER No 118 • JULY 2019

. . . from page 25 Mine Planning and the Crucial Role of Geology (continued)

Alford for their constructive reviews,


as well as Dan Wood and Jeff Heden-
quist for their feedback, guidance, and
advice on many fronts, including how
to improve the paper’s relevance to the
audience.

REFERENCES
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uncertainty in mining studies: SEG News-
letter, no. 117, p. 21–29.
Espinoza, D., and Morris, J.W.F., 2013,
Decoupled NPV: A simple, improved
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ments: Construction Management and
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Hochbaum, D.S., 2008, The pseudoflow algo-
FIGURE 6. The geologic model at the Phu Kham copper-gold operation in Laos has been devel- rithm: A new algorithm for the maximum
oped from exploration through to today. Eight operational stages are mined concurrently, the flow problem: Operations Research, http://
designs for which were based on pit optimizations (photograph of the Phu Kham open cut looking citeseerx.ist.psu.edu/viewdoc/download?-
south, 2017). doi=10.1.1.125.118&rep=rep1&type=pdf.
Hubbard, G., Rice, J., and Beamish, P.W.,
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analysis, action, Frenchs Forest, N.S.W.:
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schedule can be a challenging process. tors will be based directly or indirectly 237 p.
Deterministic schedules base decisions on the outputs of detailed schedules. Johnson, T., 1968, Optimum open pit mine
production scheduling: Berkeley, California,
on the current position and then look Detailed schedules will almost always be University of California Berkeley, 131 p.
to mine the most appropriate area that the basis for site operational budgets. Joint Ore Reserves Committee (JORC), 2012,
is available. Equipment-based con- Australasian code for reporting of explo-
straints typically schedule at the level ration results, mineral resources and ore
of individual load units, and detailed
Conclusion reserves (the JORC Code): www.jorc.org.
schedules must consider the availability Integrated mine planning processes and King, B., 1999, Cash flow grades—scheduling
rocks with different throughput character-
and use of each unit, as well as its relo- their associated models are necessarily
istics: Strategic Mine Planning Conference,
cation between mining areas, weather complex and iterative and require input Technological Resources Pty. Limited, Perth,
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factors. Detailed schedules may include plines. An integrated mine planning Lane, K., 1964, Choosing the optimum cutoff
tens or hundreds of individual units of process that is not based on the geologic grade: Golden, Colorado, Colorado School
equipment. data provided to engineers is substan- of Mines, p. 811–829.
Some of the outcomes of schedule dard and will not result in maximum ——1988, The economic definition of
ore: Australia, Comet Strategy Pty. Ltd.,
optimization can be difficult to transfer value for stakeholders. p. 57–61.
to detailed schedules. As an example, Consequently, the quantity and Lerchs, H., and Grossman, L., 1965, Opti-
variable cutoff-grade policies are not quality of geologic data provided is not mum design of open-pit mines: Joint
always easy to transfer. This is particu- only fundamental to mine planning but CORS and ORSA Conference, Montreal,
larly the case if a multidimension also of crucial importance to making May 27–29, 1964: The Canadian Mining
cutoff-grade optimization has been investment decisions in mining. and Metallurgical Bulletin, January 1965,
p. 17–24.
used. Ultimately, the quality of mining
Lilford, E., Maybee, B., and Packey, D.,
It is generally expected that the same investments and mining operations is 2018, Cost of capital and discount rates
input parameters will be used for an underpinned by close working relation- in cash flow valuations for resources
entire planning cycle, i.e., the block ships between multidisciplinary teams projects: Resources Policy, doi: 10.1016/j.
model used for the pit optimization and involved in the study programs and resourpol.2018.09.008.
schedule optimization will be the same planning cycles that establish the strate- Poniewierski, J., and Hall, B., 2016, Break-
one used to produce the next version gic direction for any mining operation. even is broken: Australasian Institute of
Mining and Metallurgy (AusIMM) Bulletin,
of the detailed schedule. At the level
June 2016, p. 68–71, www.ausimmbulletin.
of producing a detailed schedule, any
variations in the accuracy of the input
Acknowledgments com/feature/break-even-is-broken/.
Samis, M., Davis, G.A., Laughton, D., and
data sets can become acute and have The authors thank Julian Poniewierski, Poulin, R., 2005, Valuing uncertain asset
adverse effects on decision making. John Ashton, Tim Arnold, and Chris cash flows when there are no options: A
No 118 • JULY 2019 SEG NEWSLETTER 27

real options approach: Resources Policy, v.


30, no. 4, p. 285–298. Ed Holloway is a mining engineer with 20-plus years of expe-
Taheri, M., Irannajad, M., and Ataee-Pour, rience across a wide range of operational, planning, corporate,
M., 2009, Risk-adjusted discount rate and project roles. Ed has worked on some of the largest green-
estimation for evaluating mining projects: field and brownfield projects and operations in Australia, the
JASSA, no. 4, p. 36–42. Philippines, Papua New Guinea, Chile, Argentina, Peru, South
Trout, L., and Reid, D., 2018, PanAust Lim- Africa, Brazil, and Russia. He has significant experience in a
ited’s approach to mine waste and tailings
range of base metals as well as coal, gold, and iron ore. Ed cur-
stewardship: Mine Waste and Tailings
Stewardship Conference 2018, Australasian rently works as a consultant for Quantified Strategies focusing
Institute of Mining and Metallurgy (Aus- on larger and more challenging strategic planning problems.
IMM), Brisbane, 2018, Proceedings, p. 7–8.
Valenta, R.K., Kemp, D., Owen, J.R., Corder,
G.D., and Lèbre, É., 2019, Re-thinking com-
plex orebodies: Consequences for the future Scott Cowie is a mining engineer with over 15 years of expe-
world supply of copper: Journal of Cleaner
Production, v. 220, p. 816–826.
rience in open-pit and underground mine engineering, study
Vann, J., 2007, Applied geostatistics for min- management, and environmental permitting in corporate,
ing professionals: Quantitative Group, Ok operational, and consulting engineering roles. Scott is respon-
Tedi, Tabubil, Papua New Guinea, Internal sible for technical support and studies for PanAust’s mining
course presentation, p. 7–8. operations and projects. This includes progressing concepts to
Wood, D., and Hedenquist, J., 2019, Mineral feasibility studies, environmental impact assessments, life of
exploration: Discovering and defining ore
mine planning, operational improvement programs, tailings
deposits: SEG Newsletter, no. 116, p. 1,
11–22. 1 storage facility stewardship, and mine closure planning.

SEG Publication on Geology and Mining—Call for Papers:


Dan Wood and Jeffrey Hedenquist, editors

The aim of the series on Geology and Mining is to educate early career professionals and students
about applied economic geology, i.e., mining. Extra articles for the series are sought to complement the
invited papers on exploration, feasibility studies, mine planning, metallurgy, geotechnical studies, cav-
ing, ­narrow-body mining, and environmental and social implications. Case study articles are strongly
­encouraged, both positive and negative.

Please advise the series’s co-editors of the title of your proposed contribution and provide a 200-word out-
line by October 1, 2019, specifically indicating how the article will inform young geoscientists. Approved
proposals will have a deadline of March 31, 2020, for a review-ready manuscript (<7,000 words plus 30
references and a 250-word abstract, with eight figures).

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