Week #4 Sr. Design

1. Week #4 Sr. Design

2. Diamond

3. Week 3 Tasks Not Completed Completely • It is known that pipe one will be mined by open pit to a depth of 1000 ft over about a 40 year time period • Analysis of markets suggests that the pace will be within market limits for industrial and clear stones • But- examination of drill results shows that only yellow gem diamonds are produced during the top 500 ft. • The market for clear diamonds does not guarantee an equal size market for yellow diamonds • Get a handle on the market for yellow diamonds and then gage the rate of development of the top 500 feet of open pit • (Your idea about the industrial diamonds being adsorbed is accepted as true)

4. More Market Refinement Needed • The market size of 350,000 carets for pink and red diamonds is accepted. • Presumably purple diamonds with a pink hue also fall in that limit. • The largest stones in the top 500 feet of pipe 3 are Champaign diamonds • No market limits have been determined here (you may have suggested that brown and champaign diamonds are about the same thing in which case you do have data) • There are pink diamonds in this interval • There are blue diamonds in this interval and no market limits have been determined • There are black diamonds in this interval and no market limits have been determined • If you target this ground will champaign black or blue diamonds control your production rate? • Would you want to store champaign, black or blue diamonds to maximize your pink diamonds • The top 500 feet of pipe 3 is highly degraded – especially the top 250 feet – putting in underground structures into loose clay could be interesting for a lot of mining methods • You could open pit here also but that might stop you from going after deeper richer underground reserves – at least in the near term

5. Another Consideration • Below 1000 feet you encounter your red diamond ground • This ground will be underground mined most likely but it is by far your most valuable ground. • Do you want to start meeting your pink and red stone market by going for this first – even though you have some nice pink stones you can just dig out of loose clay? • Bear in mind that as red stones in the total jewel pool (the total of all diamonds past and present set in jewelry) begin to approach the number of pink stones that red diamond prices could start to converge toward pink prices

6. Market Constraint Summary • For the Ground you will or may encounter first it is the market for • Yellow diamonds that controls your open pit at first • If you work upper levels of pipe 3 first you will have black, blue, and Champaign stones none of which you have a market size for • The only number you have for early production is your Pink Red Purple stone market is about 350,000 carets per year.

7. Open Pit Planning • Once you have your yellow diamond market figured • Start developing stage pits for a few years at a time • Use these stage pits to determine the tons of ore and waste that you are mining • (Remember – last week you were given geologic slope constraints) • When you know the ore and waste tonnage consider what size production equipment to use • Also consider the weather – how many months per year do you want to try a Wyoming high country open pit?

8. Refine Your Open Pit Plans • Select your main surface mining equipment and size up roads and benches for it. • Get open pit mine plans through 5 stages showing roads and benches going down to 250 feet through your loose degraded yellow ground.

9. The Dilemma of the Colored Pipe • One of your biggest challenges (once you know your market size) is knowing what to target first. • Try this • Get a rough cost for one ton of open pit ore mining • Get a rough cost for one ton of sublevel cave or undercut mining • Get a rough cost of one ton of diamond ore processing • You already have a value per ton for 1-250 ft, 250ft to 500 ft, 500 ft to 1000 ft, and 1000 ft to 1250 ft. • Get an after process and mining cost profit per ton for each ground level • Top 250 ft open pit target • 250 to 500 ft can only target this first with sublevel or undercut and fill • 500 to 1000 ft can only target this first with sublevel or undercut • 1000 to 1250 ft – there is so much ground above that if you start here you will almost be forced to undercut and fill

10. Continuing your ground targeting • You now have a profit per ton for each of 4 ore zones • Now look at how many tons of each zone you could mine before being stopped by a market constraint • For each of the 4 zones multiply minable tonnage by profit per ton if you mine • Which zone gives you the highest starting profit per year? • Is the difference a token margin of a few dollars or cents or a decisive huge gap? • If it is a huge gap you just identified which of your 4 zones you should target first • Start building your mine plan to go after it

11. My Guess • I think the exercise will tell you to go directly after the red diamond zone • In order to not sterilize or scramble ground above you will likely have to start planning undercut and fill • I suspect at only 350,000 carets a year will make your underground mine rather small • If something like my guess proves true this weak size your shafts and plan some exploration drifts into your ore body at different levels. (You’ll be backfilling cement anyway) • We’ll get you feedback on your exploratory drifts that may also double for mining (after all your drilling program probably netted a bigger profit than a lot of diamond mines get in a year)

12. Another Guess • The top 250 ft of pipe 3 can be hit with open pit even while you mine the red zone • This zone has champaign and blue diamonds • If your pink diamonds from this zone have to go into storage will the champaign and blue diamonds pay enough to justify starting an open pit right away? (my guess – yes) • An open pit in loose clay can be started while shafts are still being sunk to the red zone • Scrapers can almost pull up clay and degraded yellow ground without even stripping country rock • How much easy ground can you get right away? • If you can and it is economic plan a first year of open pit operations just using scraper type equipment

13. Coal

14. A Big Challenge • Your block model has gone nuts and is producing use-less projections. • Consider this back-up technique (I’m not a Carlson expert but I have seen other groups try some of these things) • For your stream channels you used human judgment to layout where the channels went (and in my opinion did a very reasonable job of it) • Take each coal seam individually – plot the thickness of coal from each available drill-hole (remembering where you believe you have local washout channel affects) • Use human judgment to contour the coal thickness

15. Continuing Your Response • Contour the coal thickness for #2, #5, and #6 coal • Now do similar contouring for innerburden thickness between your seams and for the thickness of the Dykersburgh shale • Are there places where you really need drill holes because you really had no way to interpolate by judgment? • Provide a list of places if you have them – indicate what uncertainty issue you are trying to resolve with each hole.

16. Making Carlson’s Block Models Blow a Gasket • The default interpolation techniques in Carlson assume features extend equally in all directions (isotropic) • Long linear features will drive the routine nuts • The routines try to assume continuity • Instant elevation shifts across long linear features (such as a fault) will mess up the interpolation • Drill holes need some consistency in what rock layers are named • Layer #5 in hole 1 should be layer #5 in hole 20 • The program will go nuts if it cannot build a consistent stratigraphy from the drill holes

17. How Might You Beat a Carlson Limitation? • Consider building separate models on each side of a fault (don’t do an isotropic interpolation across a fault) • Build a tight network of fake drill holes • Previous teams dealt with dikes by placing a ring of fake drill holes around their dike feature in the baked zone and then a second ring of fake drill holes outside the baked zone • The drill holes cause Carlson to put the line between baked and unbaked between the inner and outer hole ring and to follow the long linear feature. • Obviously I can do the same thing to trace a stream channel and prevent Carlson from interpolating stream data that is flowing in only one direction in all directions (isotropic interpolation) • Add a few fake drill holes to get Carlson to build your contours into the block model • There may be a way to get Carlson to build a block model off of contours but I don’t know how to do it.

18. Moving Forward from the Model • Identify areas where your proposed layout will not work because the coal is too thin or blocks too isolated • Look at your innerburden thickness • Identify what your criteria are for suspecting seam interaction • What kind of interaction do you expect? • What areas are subject to this interaction? • What can you do to manage interaction? • Stack barrier pillars? • Stack all pillars? • Mine upper or lower seam first? • Mine both seams roughly together? • Allocate extra money for roof control? • Declare yourself screwed and identify some areas as not multi-seam minable?

19. More Area Checking • Look for areas where the Dykersburgh shale is under 2.5 ft thick. Past experience indicates this type of roof will not stay up with roof bolts • What is your ground control plan in these areas.

20. Executive Decisions • Assume that MSHA will allow you to “bolt as needed” in the #6 coal roof – provided you have a regular budget for frequent roof inspections (assume this means a full time mine inspector who does nothing but check #6 roof) • Alternatively your 5 ft pattern of 1.5 foot bolts will be oked. • Your 1.5 floor factors of safety were derived under low angles of friction and wet floor conditions. Assume your 1.5 safety factors are ok.

21. Recheck Your Layout • With all your minable/unminable areas considered make sure your mine layout is still working • Recheck for your 3 million clean tons for 40 year goal • If you are short – check for underground in the #7 • You already showed it could not carry the stripping ratio for a surface mine • It is low chlorine but lower BTU – advantages and disadvantages about cancel but #6 coal which is nothing special and just a bit low on BTU is minable by room and pillar.

22. Develop Your Layout • Pick what ever coal seam you figure will “set the pace” for mining in your seam interaction world. • Lay out your mains, submains and panels in detail • Do at least 5 years of timing maps • For other seams just make sure their rough layouts fit with the seam you designed in detail

23. Layout Your Coal Preparation Plant • Identify the type and capacity of your different units putting brand names and sizes on your major components • Make a first attempt to set up a software simulator to simulate and check material flows and performances through the plant • You need not finish or run it this week

24. Copper-Gold

25. Start to Refine Your Mine • You have an initial load and haulage fleet and cost estimate • You seem to be converging to a 30 year mine life • It looks like you will have about a 15 meter bench height which is compatible with your block model • Plan your drilling and blasting • What drill model will you use – what size hole? • What is your explosive going to be? • How will you load it? – what equipment do you need for that? • What manpower will you need on your blasting crew? • How much drilling and hole loading will you need to keep up with your target production rate? • What will the capital cost of your equipment be? • What life do you expect for your equipment? • What is your annual cost of ownership for your drilling equipment? • What is the cost of consumables (powder etc. for blasting)? • What is the operating cost of your equipment? • What is your labor cost each year? • Now you should be able to estimate your cost per ton for fragmentation

26. More Work on the Pit • Work on your pit slope • Right now you have estimated bench widths • Lay out your loading configuration on an active bench • Include turn radiuses for maneuvers • Include safety berms on benches • Consider traffic moving in and out of the loading area • How wide does an active bench need to be? • Consider your drilling equipment and blast size – how much will a blasting round fragment? How big an area do you need for this?

27. More Work on Pit Slopes • Benches not having equipment actively working on it need not be as wide • How wide does the bench need to be to bring equipment onto it and then make it an active bench again? • If you start push-backs from the surface how wide do your benches need to be to provide catch areas and berms

28. Continuing your Pit Slope Work • You guessed you would have 5 loaders – this probably means about 7 active areas on benches • For a pit with about 25 benches what does your geometry come to for an over-all pit slope? • Now compare this to your geologic constraints • Are there pit areas where rock type will limit your pit slopes more than your equipment and mining geometry • Assume the dip on the fracture pattern is to the east • How does this impact maximum dip by direction

29. A Little More Refinement • Set up slopes by azimuth and rock type • Rerun your ultimate pit with the refined slope constraints • Are there any dramatic differences in your tonnage?

30. Work on Your Mining Cost • Look at your pit • Where will you put the processing plant for your ore? • Where will you put your waste dumps? • Assume a 10% grade on your roads out of the pit to estimate the length of in pit roads • Add an estimated distance to get material to its destination • You did your initial FPC runs with a 2 mile one way trip • How close are you on your ore • How close are you for mining waste • Rerun FPC with your modified distances • What is your load and haul cost for ore? • What is your load and haul cost for waste? • Will ore be blasted differently than waste? • What is your blasting cost for ore? • What is your blasting cost for waste?

31. Start Working Up Your Mine Support Costs • Big shovels spill things • You will probably want a couple dozers and a big front end loader for spill clean up • What will your capital and operating cost be for this equipment (figure it will pretty much be running somewhere all the time – it won’t add to production because your FPC model assumed your infallible loaders would never spill anything) • Roads need maintenance • Estimate the number of miles of haul roads you will have • Add about 20% for some duplicate or alternate roads • Super trucks need very good road service • Assume every 2.5 miles of road needs one big road grader, and two medium size dozers • Assume every 6 miles of road needs a water truck • Figure the capital and operating cost for continual service of this equipment

32. More Mine Support Costs • Your mine will need surveyors • Estimate the number of surveyors and what their annual cost is • Assume benefits will add about 50% to the basic cost of their wages • What other support personnel will the pit need – Get their cost • You’ll have a mine manager • Probably shift supervisor • Some sort of foreman • How many engineers for planning and permitting? • Any truck dispatchers?

33. More Support Cost • Super trucks need expensive haul roads • What will it cost per mile to build a high grade gravel road with excellent sub-base • About how much new road will you add every year • Estimate this cost

34. Calibrate Your Mining Cost • About what is your stripping ratio? • Estimate your ore mining cost • Cost per year to load and haul ore • Cost per year to fragment ore • Cost per year to run support equipment (allocate a percentage according to how much of the material is ore) • Cost per year for support personnel (again % allocation) • Cost per year for new roads (again % allocation) • Get a total • Add a 10% contingency (water management for example has not been dealt with) • Divide by the tons of ore you are producing • How does this compare to your $3.25/ton? • Now do a similar cost for waste mining

35. More Cost/Ton Refinement • Your load and haul cost is a function of the haulage distance • Part of your haulage distance is a function of how deep things are in the pit • If the rock comes from the top bench of your pit your haul distance will be small • What would your cost per ton be if your load and haul cost were reduced in this fashion? • You probably already estimated your cost per ton as if all the ore came from the bottom bench • Take the difference in cost per ton from the bottom bench – cost per ton from the top bench • Divide this by the number of benches in your pit • You now have an estimate of your variable cost by bench

36. One More MSOPIT Run • Add Variable cost per bench to your MSOPIT run • Does this impact your ultimate pit? • What about your tonnage and mine life?

37. Mineral Processing • According to your model you have about 825,000,000 tons of alteration #3 – much of it in your pit • This zone contains floatable sulfides • Copper • Chalcopyrite 35% • Bornite 15% (can get about 40% of copper by slow leach) • Chalcocite 25% (can get most of copper by slow leach) • Covelite 25% (can get most of copper by slow leach) • Gold 75% is free milling but 25% is encapsulated by pyrite • Silver • Part is in silver sulfides 44% Acanthite 31% in Argentite • 12.5% is in the copper minerals as a substitution • 12.5% is mixed in with the gold (gold in nature usually has silver in it)

38. Liberation Sizes • As size is reduced the free milling gold is liberated at about 250 microns – since gold is malleable free gold will retain about 250 micron size even when ore is ground down to 150 micron • The sulfide minerals (copper, silver, pyrite{which contains encapsulated gold}) liberate at 150 microns • These are much coarser liberation sizes than most porphyry copper deposits

39. Gangue Minerals • The predominant gangue minerals are quartz and feldspar • The porphyry has black specs of biotite and hornblende • There are veinlets of anhydrite and calcite

40. Things to Note • Ore type #3 cannot be mined to separate gold copper or silver fractions – the entire mined mass has the mineralization in it. • Ie if you are planning 87,000 tons per day for flotation and 5,000 tons per day for cyanide leaching you have a big problem.

41. How Might One Get the Gold • Gold is heavy – depending on purity 17 to 19 specific gravity • By contrast the gangue minerals are around 2.3 sg • Your sulfide minerals are around 4.2 to 5.8 sg • Gravity separation might get 75% of the gold that is free milling (it will miss the 25% encapsulated in pyrite) • Gold will dissolve in a cyanide solution • But cyanide might be consumed by other minerals in the mix • Cyanide leaching will not get the 25% gold encapsulated in pyrite • Questions to consider • Is there a gravity process that could be used before or after flotation to get the free milling gold? • If so should it be used before or after flotation? • Is cyanide leaching or gravity concentration cheaper for getting free milling gold? • How can you get the gold encapsulated in pyrite? • How expensive are these processes per ton treated? • How much gold would have to be encapsulated in pyrite in a ton of ore to make it “worth while” to go after it?

42. Thinking About Silver • Wi11 Acanthite and Argentite float? • If you float them do you want to do it before floating copper, after floating copper or with the copper minerals and then separate the silver out in the smelting or refining phase? • 12.5% of the silver is mixed with the gold (ie your gold is not pure gold) • This silver will go with the gold in a gravity concentration • Will this silver leach with the gold in cyanide? • When you electrowin the gold what happens to the silver? • 12.5% of the silver is in copper minerals and will end up in a copper flotation concentrate • How might that silver be recovered in downstream processes such as smelting and copper electrowinning?

43. Propose a Flow Sheet for This Ore • Obviously you will have a grinding step • What is the next step? • And the next? • What will your process get? (ie which minerals are recovered where) • What % recovery of those minerals do you expect to get? • If your process rate is around 80,000 to 90,000 tons per day about what will it cost?

44. Looking at Application • Can I use the process I developed for ore type 3 on ore type 2 and type 4? • The difference between type 1 ore and type 2 is in the gold • Type 1 ore has 50% of the gold encapsulated in pyrite • The 50% gold that is free milling has a lot of carbon with it • If you try cyanide leaching it the natural carbon will adsorb all the gold you leach • How could you treat the ore to stop the carbon from robbing the dissolved gold? • Could I do a gravity separation and get around the preg robbing carbon?

45. For This Week • Get a Sulfide ore flow sheet with real capacities • Get processing costs • Get recovery percentages • Look at what is needed in economic planner for cost and recovery inputs to make sure you are generating the “right” information. • Complete your previously assigned write-ups