Sequencing Mining Operations with MineSight®

1. Sequencing Mining Operations with MineSight® ©2007 Dr. B. C. Paul {Note – The Name MineSight® and the Program described are property of Mintec Inc – Tucson, Arizona}

2. Maximizing Returns • NPV is usually increased by bringing more early earnings and delaying expenses • Sequencing pits for high grade ore with lower stripping ratios tends to do this • We Need A Method of Finding the Best Grade Ore to Mine First

3. How to Make That Happen • We try to Fake Out the Lerch Grossman Routine • Lerch Grossman will Find the Juiciest set of ore blocks that keeps producing more value • Obviously this must mean that it either finds the maximum metal pit or the most lucrative ore • Because not all ore is equally easy to process it is possible that a set other than maximum metal will be selected • We Need to Get Lerch Grossman to Pick the Best of the Best

4. To Do This We Perform What I Call A Price Fake • We tell the computer we have a dismal market and then ask it to find the ultimate pit • Under unfavorable economics only the better grade ore will get included in the “fake ultimate pit” • Lerch Grossman however has picked us the set of blocks that yields maximum value per ton which is just what we wanted.

5. We Will Gradually Raise Our Fake Price As We Do Multiple Runs • Each Run will start with the previous pit in place • Each Run will have the real final pit surface as a limiting surface • The result will be a series of nested pits that go from the best ore to ore of progressively lower grade • We have just tricked Lerch Grossman into telling us how to optimize our NPV by sequencing our mining

6. The Pit Slope Problem • Our Ultimate Pit Was Calculated at Our Final Pit Slope • Our Stage Pits will have to maintain a working slope • We accomplish this by telling Lerch Grossman to mine at our working slope, but then we tell it that it must never cut blocks beyond our ultimate pit.

7. MSOPIT Search Option #1 Start MSOPIT.

8. We Will Consider Only Screens for MSOPIT unique to our use My first cut will start with no Pit but will limit things to The area of the ultimate pit. (Note that Pit 1 is the Ultimate pit generated in An earlier step).

9. We Manipulate Our Product Price to Try to Guide the Program to Pick smaller pits with the maximum pay metal I varied copper and Moly in proportion to Each other setting copper At 50 cents in concentrate Instead of $1.05. (only the highest grade Material will be able to Pay off so it should dig Up the richest ore first)

10. Processing and Mining Costs are Held Constant well Metal price is artificially deflated Leach copper was Set at 60 cents We should understand That because our prices Are fake our block values Will be wrong. The function Of this procedure is just To pick off the richest pits This is the Leach Ore Screen

11. I Needn’t worry about Waste Since Recovery is zero.

12. I’m Going to Need a More Limiting Working Slope Note that while I allow 57 degrees for my Final slope I am only Allowing 42 degrees for Active working areas.

13. Again Select the Base Option

14. Specify the Pit to Store the Output In and Any Limiting Pit Surface I am going to put my first pit In Pit 2 I am going to limit the pit To be within Pit 1 (ie it cannot Go out of the ultimate pit)

15. Order the Program to Run the Procedure

16. Turning On and Looking We See A Small Initial Pit

17. We Can Also Milk Some Data Out of the Output Report on the Run It appears to have taken About 102,000 blocks 102,000*6000*1.308*1.9= About 1.5 billion tons It tells us about ore and waste Blocks but we don’t pay any Attention to that because the Price is messed up so the Processing decisions are Jibberish.

18. We Now Make A Second Run With a Little Higher Prices (Resulting in a bigger pit) This time we start our Run with Pit #2 (our initial pit) already Present.

19. I Will Beef Up My Cu and Moly Prices In my case I improved Cu to 60 cents in Concentrate and to Keep moly in proportion I went to 2.29 I will of course do similar things to my leach material screen.

20. I Will Again Use a Base Strategy and Lerch Grossman

21. My Result Will Go In Pit 3 with Pit 1 (My Ultimate Pit) Still Being a Limiting Surface

22. As You Can See I Moved Up Another Increment In Pit Size Ok – I did a few things to get this display I turned off Pit 2, turned on Pit 3 and then On Pit 3’s cut-offs option I went to properties And picked blue as a global color In fact the report indicates we mined an Additional 1.4 billion tons of material

23. Now I’ll Bump Up My Prices and Run Again Set Cu at 0.7 and Mo At 2.67 Instruct it to send the result to pit 4 And use Pit 1 as a limiting surface I’ll start with Pit 3

24. Turning On Pit #4 We Prepare to Do My Color Trick Select the Gray Area (it will turn blue) Then hit properties

25. Click on Global Color

26. Pick a Cool Color and then OK Your Way Out of Things

27. There Is My Pretty Color Effect The report assures me I have an additional 1.2 billion tons of material

28. We Run It Again With the Prices Set at $0.8 Cu and $3.05 Mo Note that Some areas are Now reaching to The final pit slope The report tells Me I took another 1.1 billion tons

29. I Bet You Knew I Was Going to Do it Again with $0.90 Cu and $3.43 Mo 815 Million Ton taken Out in this phase

30. We’ll Do One More Step to The Ultimate Pit with Cu at $1.00 Cu and $3.81 Mo An Additional 685 million tons was taken

31. And So We Can See Our Pit Advance Starting With the Richest Ore First

32. Until the Pit Is Complete

33. We Can Get Resource Reports On Our Sequence We’ll start at Pit 0 (ie the undisturbed Surface)

34. We’ll Set the Panes to Read the Actual Projected Metal Prices Note I have Cu set At $1.05 and Mo At $4.00 (or what ever you Projected as the most Likely price) Now when I tell the computer to check the resource in a pit it will give it the true value and processing Assignments.

35. We’ll Set It to Calculate Resources for Pit 2 Then We’ll Launch the Run

36. We’ll Get A Report on What It Did with the Material It Cut From Pit 2 Mill Ore Is 1.273 billion tons at 0.69 Cu and 0.082 Mo Leach Ore is 8.2 million tons at 0.27 Cu Waste is 8.7 million tons

37. We Can Put Our Figures in a Spread Sheet

38. Next We’ll Do It For Pit 3 Do Resources for Pit 3 Start with Pit 2

39. And So On Through the Ore Body

40. What We Know • Resources • About 900 Million tons Millable ore • About 200 Million tons to Leach

41. It is Also Possible to Get MSOPT to Calculate Resources Between Pits Directly Instead of defining the starting surface To be the ground surface – define it To be the previous pit In this case I am defining it to be my First small pit – stored in Pit 2 (my undisturbed surface is Pit 0) (my ultimate pit is in Pit 1) (my pits from Pit 2 to Pit 7 get progressively Larger)

42. Calculate the Resources for the Next Pit Using the Design Strategy Screen Note – I put it into resource Calculation mode I ask it to do the reserves for My second smallest pit (remember pit 2 is my Smallest and pit 3 is next)

43. I Order a Run

44. I Get a Report of Results This phase will send 163.5 million Tons of ore to the concentrator And 22 million tons to leaching It will take me about 5 to 5.5 years at around 32 million tons/year

45. We Did Lerch Grossman Price Fake Manually to Get A Sequence • Can get the program to run a price-fake sequence automatically Bring Up MineSight ® Compass With the economic planner Menu.

46. Pick the Options Tab Note that Multi-Run is An option Select New for a New Multi-Run Now tell it to open the File to start the Dialog.