Pre-Feasibility Study Cost Estimation Resources

1. Pre-Feasibility Study Cost Estimation Resources ©2002 Dr. Bradley C. Paul

2. Pre-Feasibility Study • Order of Magnitude Estimates Determined which things would be considered • Pre-Feasibility Study Determines whether there is enough promise to justify the effort required to move forward • Feasibility Study (generally 10-30% +/-) • Next Moves to Project Approval (5-10%)

3. Pre-Feasibility Study • Pre-Feasibility Study • Requires that you have a concept for what going to build • Break project down into areas and tasks • Outby Haulage • Ventilation • Mine Workings • Costs of Components Done Separately • Need to include everything

4. Methods of Getting Pre-Feasibility Cost Data • Clear List of What is Included to make sure all components are included • Begin to Find Manuals Available • EPRI Coal Mine Cost Model (about 1981) • Bureau of Mines Cost Estimating System (1984) • SERPA Cost Program (current) • Western Mine Cost Service

5. Typical Cost Manual Approaches • Factored Cost Estimates • Use Curves that are a function of some over-all characteristic • Example US Bureau of Mines Cost Estimating System • Itemized Cost Estimates • Specify cubic yards of concrete • Apply a cost per cubic yard • Used by EPRI and Serpa

6. Strengths and Weaknesses • Factored Cost Estimation Approach • Requires a lesser degree of engineering detail be worked out to run • all costs linked to a specific generally known parameter • Lets get closer to answer with less work • Itemized Cost Estimates • Structure is same as Feasibility Estimate • allows more transparent transition to Feasibility study estimates

7. General Comments on Major Cost Estimation Resources • EPRI - Coal Mine Cost Model • Most cost model resources are for hard rock and industrial minerals - this one is coal • Model covers coal mining costs but is weak in ancillary facilities and some capital costs • Example - No capital cost capability for shaft or slope • Model linked to a computer program that has not been updated • 1981 software in the 21rst century looses a lot

8. More EPRI Comments • 1980 and 1981 cost base • needs significant inflation indexing • will see later that knowing how much to index with what is important • doesn’t show which indices to use on what • Productivity Sensitive • crews and advances done with simulations current in 1980 • coal mine productivity has increased about 250% • are some productivity indices from BLS but not a common updating procedure

9. SERPA • A Hardrock Package • A comprehensive mine cost package that has been maintained to fairly current status with costs • is private so seeing exactly what is in the package is not really possible • fairly current still means the driving routines run in DOS • cryptic key sequences and IO problems • suspect that costs are updated but engineering assumptions in code may not be

10. SERPA • Has a lot of defaults built in • Has relatively simple categories of mine needs • May almost be able to run at at the fairly precise order of magnitude estimate stage • most manuals really can’t help you till get to prefeasibility • Ability to add details and replace defaults gives system power that extends up into pre-feasibility • weaknesses in showing details of output probably make use in feasibility stage really questionable

11. Western Mine Cost Service • Collection of cost models and typical item prices • comes as articles over time • makes comprehensive approach at any one time questionable • may have to inflation index different parts of mine cost separately • very vulnerable to holes in needed costing • Hardrock manual that has some coal mining equipment items in it • can use on coal but comprehensive approach problem

12. Western Mine Cost Service • Place where manual shines • identify a critical cost area and you want to get down to itemizing equipment or features and need costs • great alternative to fishing for vendors that will give you prices before your really shopping for equipment • event is likely to occur as Pre-feasibility study moves into true feasibility study • Manual caters all the way from Order of Magnitude to Feasibility but is comprehensive nowhere

13. US Bureau of Mines Cost Estimating System • Prob the most comprehensive high precision pre-feasibility manual ever written • No holes - covers everything • Too much detail and work to function in Order of Magnitude Estimation • Factored cost estimate approach is not compatible with itemized detail needed in critical areas of Feasibility Study • Manual is clearly hardrock • not good for quarry’s either

14. Status of BM CES • Mid 90s Congress killed Bureau of Mines • manual has been without caretaker • lots spin off people went to Western Mine Cost and Serpa came from BofM • Had beautiful spreadsheet program that ran manuals rapidly • was designed for Lotus 123 • not updated to latest spreadsheets and some macros don’t work

15. Status of BM CES cont • Had automatic cost indexing but that’s not been maintained • fortunately same index structure was picked up by Western Mine Cost which has been maintained • getting recent indexing into spreadsheet model is an on your own • can do it manually as you will see