[PPT] - Deposit Evaluation Techniques OCTOBER 09 Insert your Company Logo PowerPoint Presentation

SLIDE 1

OCTOBER 09

Deposit Evaluation Techniques

Keith Whitchurch, Pt SMG Consultants

SLIDE 2

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OCTOBER 09

What questions are being asked?

What sort of deposits is it?
Simple
Complex
Single seam
Multi seam obvious base
Multi seam no obvious base

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OCTOBER 09

What questions are being asked?

How big is the reserve?
How should it be mined?
What order should it be mined in?
HOW DO I MAKE THE MOST MONEY?

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OCTOBER 09

Deposit Evaluation Techniques

Strip Ratio
Cash Margin Ranking
Lerch Grossman Pit Optimiser
Next Generation Technologies

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OCTOBER 09

Simple Example Deposit

OB Depth 30m Coal Thickness 5m Coal Ash 2% Coal Density 1.30 T/bcm Coal Energy 5600Kcal OB Depth 60m Coal Thickness 5m Coal Ash 2% Coal Density 1.30 T/bcm Coal Energy 5600kcal OB Depth 30m Coal Thickness 5m Coal Ash 15% Coal Density 1.40 T/bcm Coal Energy 4600kcal

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OCTOBER 09

Strip Ratio

OB Depth 30m Coal Thickness 5m Coal Ash 2% Coal Density 1.30 T/bcm Strip Ratio = 30/(5*1.30) = 4.6bcm/t OB Depth 60m Coal Thickness 5m Coal Ash 2% Coal Density 1.30 T/bcm Strip Ratio = 60/(5*1.30) = 9.2bcm/t OB Depth 30m Coal Thickness 5m Coal Ash 15% Coal Density 1.35 T/bcm Strip Ratio = 30/(5*1.40) = 4.3bcm/t

 

 ) _ * _ ( _ _ Density Coal Volume Coal Volume Overburden Ratio Strip

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OCTOBER 09

Strip Ratio

Easy but very simplistic
No Account of Coal Quality
No account of costs
No Account of Revenue
Complex in multi Seam Steep Dip
Difficult to account for Pit Batters

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OCTOBER 09

Cash Margin Ranking

Cash Margin = Revenue - Costs
Accounts for complexity of variables (e.g.

additional trucks with depth; variations in quality)

In our example
Sale Value for 5600 kcal coal = $US16
Sale Value for 4600 kcal Coal = $US10
Waste Mining Cost $1.50/bcm
Coal Mining including overheads $2.50/t

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OCTOBER 09

Simple Example Deposit

OB Depth 30m Coal Thickness 5m Coal Ash 2% Coal Density 1.30 T/bcm Coal Energy 5600Kcal Sale Value = 5*1.30*16 = $104 Costs = 30 *1.50 + 5*1.30*2.50 = $61.25 Cash Margin = 104 – 61.25 = $42.75 OB Depth 60m Coal Thickness 5m Coal Ash 2% Coal Density 1.30 T/bcm Coal Energy 5600kcal Sale Value = 5*1.30*16 = $104 Costs = 60 *1.50 + 5*1.30*2.50 = $106.25 Cash Margin = 104 – 106.25 = -$2.25 OB Depth 30m Coal Thickness 5m Coal Ash 10% Coal Density 1.40 T/bcm Coal Energy 4600kcal Sale Value = 5*1.30*10 = $65 Costs = 30 *1.50 + 5*1.30*2.50 = $61.25 Cash Margin = 65 – 61.25 = $3.75

  

   Cost Mining Waste Cost Mining Coal ice Sale Coal Density Coal Volume Coal in M Cash _ _ _ _ Pr _ _ * _ * _ arg _

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OCTOBER 09

Cash Margin Ranking

Cash Margin = Revenue - Costs
Accounts for
Complexity of variables
Variations in quality
Variations in Costs
What about complex analysis (base for

multi-seam? ; limit of highwalls in steep dip?)

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OCTOBER 09

Lerch Grossman Pit Optimiser

Algorithm created in

the 1960s

Common in Metals
Used in Complex

Coal – Indonesia

KPC
Adaro

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OCTOBER 09

Optimisation Theory

Fill deposit with valued 3D blocks.
Costs vary with depth etc
Revenue varies with grade &

yield (recovery) etc

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OCTOBER 09

Optimisation Theory

Simple geology one seam Ore Topography

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OCTOBER 09

Optimisation Theory

Simple geology Ore Topography

Cost $3/block Revenue $20/block

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OCTOBER 09

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

$3
$3
$3
$3
$3
$3
$3
$3
$3

$17

Optimisation Theory

Waste mining cost = - $3 Block profit Air blocks

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OCTOBER 09

Optimisation Theory

Step 1: Sum the cells vertically

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

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OCTOBER 09

Optimisation Theory

Maximum value vertical pit Value = 14+11+8+5+2=$40

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

SLIDE 18

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OCTOBER 09

Optimisation Theory

Bigger pit has less value Value = 14+11+8+5+2-1=$39

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

SLIDE 19

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OCTOBER 09

Optimisation Theory

Smaller pit has less value Value = 14+11+8+5=$38

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

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OCTOBER 09

Optimisation Theory

But pit is not vertical it is inclined.

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

SLIDE 21

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

Assume a 45o slope Value is $-3+14+11-6-3=$13

SLIDE 22

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

Assume a 45o slope Value is $-3 +14 –3 =$8

SLIDE 23

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

Assume a 45o slope Value is $-3+14+11+8-9-6-3=$12

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

Optimum pit has maximum value

$12

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$13 $8

SLIDE 25

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$13 $8

Optimum pit has maximum value A smaller pit is less profitable A bigger pit is less profitable.

$12 $13 $8

SLIDE 26

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$13 $8

Optimum pit is maximum value pit

$12 $13 $8

SLIDE 27

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OCTOBER 09

Optimisation Theory

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$0 $0 $0 $0 $0 $0 $0 $0 $0

$3
$3
$3
$3
$3
$3
$3
$3
$3
$6
$6

$14

$6
$6
$6
$6
$6
$6
$9
$9

$11 $11

$9
$9
$9
$9
$9
$12 -$12

$8 $8 $8 -$12 -$12 -$12 -$12

$15 -$15

$5 $5 $5 $5 -$15 -$15 -$15

$18 -$18

$2 $2 $2 $2 $2 -$18 -$18

$21 -$21
$1
$1
$1
$1
$1
$1 -$21
$24 -$24
$4
$4
$4
$4
$4
$4
$4

$13 $8

Sale Price Strip Ratio

SLIDE 40

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OCTOBER 09

Sale price & pit size

Sale Price & pit Size

10,000,000

20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 $4 $6 $8 $10 $12 $14 $16 $18 $20 $22

Sale price

SLIDE 41

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OCTOBER 09

Sale Price & pit Size

10,000,000

20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 $4 $6 $8 $10 $12 $14 $16 $18 $20 $22

Sale price

$14

Understand geology

SLIDE 42

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OCTOBER 09

Sale Price & pit Size

10,000,000

20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 $4 $6 $8 $10 $12 $14 $16 $18 $20 $22

Sale price

$14 $16

Understand geology

SLIDE 43

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OCTOBER 09

Pit Optimiser Block Ranking

C 5 - C 6 - L 6 - U 7 - C 7 - C 8 - L 8 -

SLIDE 44

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OCTOBER 09

SLIDE 45

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OCTOBER 09

Shortcoming of LG Optimiser

Cannot consider Blending
Cannot consider Time
Cannot consider practicalities and effects of

spoil dumps

Next Generations Tools Exist to This problem

SLIDE 46

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OCTOBER 09

Summary

Manual Method

 Essential first step – Really don’t answer the questions

Strip ratio

 Simple , easy significant traps

Block Ranking

 Allows complex cost/revenue considerations – Difficult to handle complex geometry

Pit Optimisation

 Well proven tool for multi seam deposits – not a substitute but an aid for good engineering

SLIDE 47

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OCTOBER 09

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