Fidou’s sharing Reserve estimation Mine Planning engineer

Reserve estimations

Reserves estimation of an open pit mine consists of determining tonnage and grade of the measured
and indicated portion of the economically exploitable. The ore reserve takes into account dilution
and ore loss that may occur during mining. Often, a resource estimate is performed during the
reserve estimate to determine the amount of inferred ore to convert to reserve.

We will define some important terms.

• Ore loss

The movement of ore in the stope is by blasting, face cleaning, gully scraping, and loading from
the orepass. These processes result in some ore not reaching the intended destination. Ore loss
refers to any unrecoverable economic ore left inside a stope (broken, in place as pillars, or not
properly blasted at the boundaries), or to any valuable ore not recovered by the mineral processing
system.

• Ore dilution

Ore dilution refers to the waste material (sterile material or material with small amounts of useful
content) that is not separated from the ore. Hence, it mixes and interferes with the ore, increasing
the mined tonnage that requires handling while decreasing its grade. It is a contamination of ore.
It is a mixture between waste and ore or a mixture of different grades of ore (for example mixture
of low grade and high grade). It is always expressed as a percentage:

𝑊𝑎𝑠𝑡𝑒 𝑡𝑜𝑛𝑠
𝑜𝑟𝑒 𝑑𝑖𝑙𝑢𝑡𝑖𝑜𝑛 = ∗ 100
𝑜𝑟𝑒 𝑝𝑙𝑢𝑠 𝑤𝑎𝑠𝑡𝑒 𝑡𝑜𝑛𝑠

Figure 1. Ore dilution categorization by Jang

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Fidou’s sharing Reserve estimation Mine Planning engineer

1. Inputs

To estimate the reserves, we need:

• Pit design
• Block model
• En of month faces (It is the topographic surface)

Pit Design

Block model

Figure 2. Surpac's interface

2. Different steps of reserve estimations

As part of our sharing, we will use the following conditions:

• Cut off

Oxide 0.3 g/t

Transition 0.4 g/t
Fresh 0.5 g/t

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• Attribute dopc_frac

It characterizes the attribute of proportion. We will use a block model with proportion.

2.1. Block model report

Here we will report the tonnage and the grade of ore by making a constraint on the model.

On Surpac

Block model Block model Report

Figure 2.1: Report naming

• dau: It is the attribute that characterizes the ore grade.

• sg: It is the attribute that characterizes the rock density.
• class: It is the attribute that characterizes the resource category (classification). For
example (measured, inferred, indicated.)
• Oxidn: It is the attribute that characterizes the oxidation i.e oxide, transition and fresh.

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• Constraint
Above Fidou_sharing_pit
Below surface topographic

• We have grouped the attributes in the part circled in red:

Grouping Attributes: You can group the results based on any attribute or Y, X, Z. If you are
grouping by more than one attribute, the order in which they are specified will have a influence
on the format of the report. In our example. dau= 0.3;0.4;0.5;999, the results will be displayed by
grade interval from 0.3 to 0.4; from 0.4 to 0.5 and from 0.5 to 999.

This will constrain the report to the material within the pit and below the topography.

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2.2. Finalization of the model block report

Figure 2.3: Block model report

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Fidou’s sharing Reserve estimation Mine Planning engineer

We color to highlight the gold taking into account the segregation made in surpac. The previous
figure illustrates well.

Reserve included only measured and indicated.

𝑅𝑒𝑠𝑒𝑟𝑣𝑒 = 𝑀𝑒𝑎𝑠𝑢𝑟𝑒𝑑 + 𝐼𝑛𝑑𝑖𝑐𝑎𝑡𝑒𝑑 = 𝑀𝐼

Ounce

𝑀𝑒𝑡𝑎𝑙 𝑡𝑜𝑛𝑛𝑎𝑔𝑒 ∗ 𝑔𝑟𝑎𝑑𝑒

𝑜𝑢𝑛𝑐𝑒 = = (𝑜𝑧)
31.103476 31.103476

• Measured

MEA Tonnes Dau OZ

OX 10,548 0.76 259
TR - -
FR - -
Total MI 10,548 0.76 259

• Indicated

IND Tonnes Dau OZ

OX 37,310 0.95 1,139
TR - -
FR - -
Total MI 37,310 0.95 1,139

The reserve for this pit is:

Sharing_Fidou Reserve
MI Reserve Tonnes Dau OZ
OX 47,858 0.91 1,398
TR - -
FR - -
Total MI 47,858 0.91 1,398

Often when estimating the reserve, the part of the ore that is inferred is determined. It guides the
corporation in making management decisions for the project.
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3. Cashflow

For the purpose of our project, we will consider the following data:

Note: These values have been taken arbitrarily just to illustrate our example.

Mining cost ($) 1.98

Processing cost ($) 20
Selling cost ($) 300
Revenue ($) 2000
Gold recovery (%) 90

𝐂𝐚𝐬𝐡𝐟𝐥𝐨𝐰 = 𝐑𝐞𝐯𝐞𝐧𝐮𝐞 − Selling cost - Processing cost- Mining cost

Mining cost= Total rock * Rate (1.98 $)

𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐢𝐧𝐠 𝐜𝐨𝐬𝐭 = 𝐎𝐫𝐞 ∗ 𝐫𝐚𝐭𝐞 (𝟐𝟎$)

Selling cost=Oz*gold recovery (90%) *rate (300$)

Revenue=Oz*gold recovery (90%) *rate (200$)

Totals Tonnes Dau OZ

Ore 47,858 0.98 1,504
WST 386,410
Total Rock 434,268
SR 8.1

• Mining cost ($) = 434,268*1.8= 820,766.52

• Processing cost ($) = 47,858.00*20= 957,160
• Selling cost ($) = 1,504.29*0.9*300= 406,157.016
• Revenue ($) = 1,504.29*0.9*2000= 2,707,713.44
• Cashflow ($) = 2,707,713.44-406,157.016-957,160-820,766.52=523,629.904

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