Post Break Week 3

1. Post Break Week 3

2. Metal Miners • This weeks presentation is much improved over last weeks, however, critical design problems remain including • Floating roads • Excessively long conveyor paths • And roads that are suppose to move at the same time they carry haul trucks moving the material from cutting the road • The design also has problems with uneven feed rates to the mill over the mine life

3. Correcting the Problems • You now have pits that are basically in the right place and have the right slope • Try and smooth out the mill feed • What is the average mill feed if the mine is going to go for 40 years? • Rather than call your pits year 3, 6, 9, 12, 15, 20, 25, 30, 35, and 40 – if your mill fed is at the average rate your pits might actually be at time 4, 7.2, 10.1 etc • Identify the correct point in time that you are actually looking at (no don’t try to redesign to get exactly 3, 6, 9, 12 etc).

4. Look at Your Pits • Particularly at first the rough surface topography makes for a lot of discontinuous benches and roads. • If you tried to exit the pit at one of the low elevation points where would you run the road? • For some of the higher benches maybe what you need is a road down to the exit point • Can you find exit points in your pit that would be relatively undisturbed by later mining (such as the north area of the pit that is inactive after about 20 years) • Until you start pushing to the west? In later years a lot of your pit development is downward. • When you push down try to leave your shallower pit undisturbed including the roads • Instead of cutting later pits into the original topography, cut and merge them into the previously mined topography and make your roads join up • This will help avoid the problem of demolishing roads that you are trying to use • It will also tend to stabilize the points at which traffic exits the mine.

5. Conveyor Routes • Conveyor costs are heavily impacted by the length of the conveyor. Making a conveyor that could go up at 20% follow a road that goes up at 10% makes little economic sense. • Add in a separate conveyor route that puts the in pit crusher in a practical place and gets out of the pit without unnecessary length

6. Show Your Upgraded Work • Pick distinct colors for your roads. • Conveyor routes should be one color • Active in pit roads should be one color • Inactive in pit roads should be one color • On the Surface roads to the dump, mill, and leach should be different colors • How do you color a road? • Remember – especially for surface roads you create a road center line and then attach cut or fill templates along the line.

7. Trick You used these templates along the polyline for cuts or Fills that you put into geometry objects Then you merged those surfaces with the topo surface to Create a topo surface with the cut or fill. What if a create a geometry object for just the flat road Surface and gave the geometry object the color I chose For the road. What if I took that same original polyline for the road Center that I attached the cut and fill templates to and Now attached this template to it? Oh Ho! – Now I have a distinctly colored flat road surface Geometry object – don’t I.

8. Use 2D Cross Sections to Show Your Design Pits follow Your Guide Pits • Make a set of north south or east west vertical grid sets • Attach the grid set to the viewer • Go into 2 Dimensions so I see a slice through the landscape • With only the guide pit and the design pit for year 3, 6 or what ever turned on I can look at multiple cross sections to show they follow each other.

9. Reserve Checking • Rather than use MSOPIT to check reserves use MSreserve Under MineSight Help is a menu item for Msreserve help that will teach you how to Use the routines to calculate your reserves

10. Your Objective is to Show Your Design Pits Contain Basically the Same Resources as Your Theoretical Pits • Breakdown your reserves by ore type (oxide, sulfide, mixed) • Report your grade in units of dollars per ton • This will require that you have run MSOPIT and saved dollar per ton block values back into the block model • Report your high and low grades and a reasonable breakdown of grades inbetween • (a distribution of ore grades not just an average) • This will be useful information when you prepare to run VALP

11. Get the Borrow Pit for Road Cut and Fill Right • Changes to the pit will potentially change surface roads (you have to color the surface roads anyway) • Examine the entire area that will be disturbed by the ultimate pit • Are there any areas you can get enough borrow waste? • If yes design a borrow pit in those areas • If no design the initial borrow point and include your stock-piles in the disturbed terrain views.

12. Coal Miners – Market and Water Numbers and Constraints • Senior management believes spot market prices will take a tumble (like they did in the early 1990’s) • Expected spot prices will fall by 20% from the expected $46/ton to $37/ton • In response you need to have at least 70% of the mines steam coal tonnage on contract

13. Spot Markets • The spot market will take as low as 9,500 BTU/lb and up to 18% ash and 5% sulfur but with the following penalties • Transportation • Buyers assume ownership of coal at docks on the Ohio and Mississippi rivers (Mnt Vernon Indiana is probably your closest) • Any costs to get the coal to the docks comes out of your sales price • BTU penalty coal sales price is a linear function of BTU content from 12,000 BTU per lb • Coal that is 10% short of 12,000 BTU/lb (10,800 BTU/lb) will be short 10% on price ($33.30/ton) • Similarly coal over 12,000 BTU per lb will get a premium • Sulfur Penalty 10 cents per ton for every 0.1 lbs/MMBTU over 0.2 lbs/MMBTU • Ash Penalty $1/ton for percentage over 9%, also a $1/ton bonus for percentage under 9%

14. Golden Goat Sales People Have Hustled for Contracts • Industrial Boilers around Terra Haute • Will buy 1,500,000 tons/year of coal on 10 year contract renewable for 3 or 5 year terms • Will pay $67/ton (but you cover the transportation cost) • Specs • Less than 1.5% sulfur • Less than 0.2% chlorine • 75% of coal over 1/4th inch • Ash less than 10%

15. More Contracts • Hutsonville Power Plant • Will buy 1,200,000 tons per year – 20 year contract with 5 year renewal terms there-after • Will pay $44/ton – but you cover shipping to power plant • Specs • Ash < 7% • Sulfur < 4.5% • BTU >= 10,700 BTU/lb

16. More Contracts • Newton Power Plant • Will Buy 2,000,000 tons/year 5 year contract renewable in 5 year terms • Pay $46/ton but you pay shipping to power plant • Specs • Ash <8% • Sulfur <2.5% • BTU >= 10,100 BTU/lb • Bonus of $2/ton if chlorine under 0.4%

17. Another Contract • TVA will buy up to 7,000,000 tons per year 7 year contract renewable in 3 year terms there-after • Will pay $45/ton for coal at the Ohio River docks (you pay shipping to get it to docks) • Specs • Ash <13% • BTU >= 10,500 BTU/lb • Chlorine < 0.2%

18. Another Contract • St. Petersburgh power station in Indiana will buy 2,500,000 tons/year on a renewable 5 year contract • They will pay $47/ton for coal delivered to the power plant (ie you pay shipping) • Specs • Ash <6% • Sulfur <4% • BTU/lb >= 11,700

19. Another Contract • Shipping Coal to Foreign Markets – will buy 2,500,000 tons of coal 5 year renewable contract • Price $47/ton for coal at the docks on the Ohio or Mississippi River (you pay shipping to get it there) • Specs • Sulfur < 2.3% • BTU > 11,500

20. Water Flows • General coal mine faces in #7 and #5 and #2 coal seams • 5 gpm per hundred feet of entry • Plus water used on equipment • General coal mine faces in #6 coal seam • Dry except for water used on equipment • Areas within 50 ft of fault line • 2 gpm per foot of entry in the affected area • Special areas in #5 • Areas with sandstone channel roof • 100 gpm per foot per entry way into affected area • Potential for water pockets that flow at 60,000 gpm for limited time • Areas within 100 ft of fault line • An additional 20 gpm per foot of entry into affected areas • Special areas in #2 • Areas with sandstone channel roof • 10 gpm per foot per entry way into affected area • Areas within 100 ft of fault line • An additional 10 gpm per foot of entry into affected areas

21. Comment • Hopefully these water inflows will enable you to specify you water handling equipment • Contracts and parameters should give coal preparation plants concrete margins to shoot for • Since your coal seams show significant variations in sulfur particularly you cannot just work with average sulfur content of seams without regard to where you are mining in a given year • On washability data you can assume washability is proportional to local sulfur or ash concentration • Ie- if a 1.5 cut will reject 40% of the sulfur from 3.5% sulfur it will also reject 40% of sulfur from 0.9% sulfur areas.