…or how i learned to stop worrying and love uncertainty
DESCRIPTION
THE ROY HILL APPROACH, SOME PROBLEMS WITH SAMPLING…. …or How I Learned to Stop Worrying and Love Uncertainty. Greg Almond, Geology Manager RHIO. Sampling. Sampling is the solution to a Problem… - PowerPoint PPT PresentationTRANSCRIPT
Roy Hill Project Development Plan – 2.0 Executive Summary
…or How I Learned to Stop Worrying and Love Uncertainty.
THE ROY HILL APPROACH,SOME PROBLEMS WITH SAMPLING…
Greg Almond, Geology Manager RHIO
• This Presentation is intended to provide attendees with information regarding the Roy Hill Project (RH) in the Pilbara, West Australia. It is not, and does not purport to be, all-inclusive nor does it contain all the information that a third party may require to evaluate the Roy Hill Project.
• The information contained in this Presentation has been collated from third party sources. RH and Hancock Prospecting Pty Ltd Group (HPPL) have prepared this Presentation in good faith relying on such information and has not undertaken steps or enquiries to independently verify the accuracy, reasonableness or completeness of the information.
• HPPL and its related bodies corporate do not assume any responsibility whatsoever to any recipient of this Presentation for loss or damage of any kind arising as a result of the use of, or reliance on, the information in this Presentation for any purpose.
• No representation or warranty is given as to, and the recipient must not rely on, any information, statement or opinion contained in this Presentation, or its accuracy, reasonableness or completeness.
• This presentation may contain certain projections, forecasts and forward looking statements (Projections) which may or may not prove to be correct. These Projections are speculative and actual future results may vary from the Projections.
• The recipient may not disclose the information in this Presentation to any other party without the prior written consent of HPPL.
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Important Notice
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Sampling is the solution to a Problem…
…as in a Scientific Problem, meaning a subject of study that is not known, but with the application of an experiment, can be understood.
Sampling
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Sampling is the cause of a Problem…
Sampling is the solution to this problem, but potentially also the cause of other problems.
Incorrect sample can cost time, money, even lives if you were involved in Bre-X and had a unfortunate helicopter ride…
Recent problem? No.Ask these guys:
Sampling
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Sampling – a problem
Georgius Agricola:“A careful owner, before buying shares, should visit the mine and carefully examine the nature of the vein, as it is very important that he be on his guard, to avoid being the victim of dishonest sellers of shares seeking to defraud him”
Mark Twain:“A gold mine is a hole in the ground with a liar standing next to it”
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Assuming we’ve evolved beyond outright criminality…The remaining problems are generally well known:
Do waste piles have ore? Does my ore stockpile contain waste? Is the plant processing waste?Do these errors arise from poor mining practice? – often yes…Do these problems arise from poor sampling? – also often yes…Is the viability of the mine in question?Are the shareholders happy? Could they be happier?
Sampling – a problem
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How do we solve the problem?We experiment.
Generally by taking a series of measurements at points (drill-holes), and collecting a sample from these measurements to represent the lot.
From Wikipedia - “sampling is concerned with the selection of a subset of individuals from within a statistical population to estimate characteristics of the whole population”
Solution
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How do we solve the problem?To define the population (the lot):We take what we hope is a representative set of samples, that are accurate and precise,and represent the ore body.
The Key? That the sample(s) are representative.
Solution
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What do we do at Roy Hill?First – where are we?
Second - what do we have?2.3Bt > 50% Fe total Resource, with more than 1.2Bt > 55% Fe
750Mt > 55% Reserve(with more potential)
Location and Resource
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Surface Geology of the Hamersley Basin
Geology – Regional Structure
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RH Mineralisation
Geology – Structure
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Geology – Drilling and evaluation
RH Deposit – extensively drilled and well-understood
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Geology – Drilling
RH Deposit Drilling ProcessFairly industry-standard process:• Initial exploration drilling, first pass geostats.• Continued infill drilling; reduction of spacing and
review of geostats• Sample submission and dispatch• Assay and reporting• Modeling of the results – the “solution” to the problem
“What's in the ground?”.
How do we ensure the process works, and the result is accurate?
Drilling Process QA/QC
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Geology – How do we monitor?
In Brief:• Industry Standard QA/QC – independent and audited• Twin Holes – RC vs. RC, RC vs. Diamond.• Standards, Rig duplicates, Umpire labs.
• Plus ongoing current and future improvement:
Drilling Process QA/QC – future improvements
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Geology – How do we monitor?
Drilling Process QA/QC – future improvements
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Geology – How do we monitor?
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Geology – Drilling
RH Deposit Drilling ProcessUnderstand the Process:• Set up contracts appropriately• Talk to your drillers• Measure QA/QC• Encourage understanding of the process
• MOST IMPORTANT: Measure, and make sure you understand the material!
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Geology – Drilling
RH Deposit Drilling Process
Understand the Material:Less of an issue with many parts of a bulk commodity like Iron Ore…
What other parts of the geology of the deposit can cause issues?
But?
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Geology – Production
RH Deposit - Planned Production processAgain, fairly industry-standard:• Ongoing RC GC drilling for life of mine.• Limited use of blast-hole sampling to delineate block
boundaries.• Continued use of drill monitoring system for both types of
drilling.• Limited Stockpile sampling.• Continual on-stream sampling at the OPF.
Again, how do we ensure the process works, and the result is accurate? Measure! Both the numbers, and their errors
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Measure and Understand Error
“You cant know what you don’t measure
From this stern chap:Lord Kelvin.
“To measure is to know.""If you can not measure it, you can not improve it."
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Measure and Understand Error
However, the assumption that because something is measured it is understood is obviously incorrect.• Need to understand uncertainty, error and risk.• Need to quantify it as far as possible for the benefit of
managers and other stakeholders.
As the good Lord said - “The more you understand what is wrong with a figure, the more valuable that figure becomes”
Need to accept what you don’t know, and seek strategies to allow for this – either from more work on the problem or acknowledgement of errors.
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Measure and Understand Error
How do we communicate this?
• Uncertainty: lack of knowledge - normally as standard deviation.
• Error: where the measurement differs from the expected value.
• Risk: the potential that an activity will lead to a loss.
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Measure and Understand Error
Geologists often deal with this.Example:
Size of Mining Block 1,000 x 400m Drill to 25 by 25m patternArea 400,000m2 Area covered per drill hole 625m2
Thickness 15m Number of holes in block 640
Volume 6,000,000m3 Number of samples 9600
SG 2.6 Assume 4kg per sample
Tonnage 15,600,000t Tonnage of sample 38.4t
Sample represents: 0.000246%
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Understand and Communicate Risk
Why do we need to communicate this?
Because the ore, the resource is the most valuable asset of the company.
We need to make sure our systems are as complete and thorough as possible, that all involved are trained in their use, and that all staff engaged in the task consistently (and without constant supervision) do the right thing.
Simple, eh?
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How do we control these errors?
Understand and Communicate Risk
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How do we control these issues?And why do we need to?And what should we worry about?
?
Understand and Communicate Risk
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Measure and Communicate Risk
What else should we be talking about?
Ore is important…
…but there is more to the ore than grade, and often the high risks – the things that will shut the mine – are a result of these.All too often, Geologists focus on the grade, and all the other factors, commercial, physical etc don’t enter their thinking. So the discipline with the best understanding of how their data can affect other parts of the project don’t share their knowledge…
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Measure and Understand Error
From the AusIMM Field Geologist Manual:“…many commercial factors determine whether a mineral occurrence constitutes ore. These include demand …, price…, the size and location of the deposit, cost of treatment, losses incurred in mining and upgrading the material to a saleable product, and the presence of undesirable impurities”
Add to these commercial factors all the other factors, such as Metallurgical data, geotechnical information, groundwater… These can be more important to the success of a project than grade.
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Measure and Understand Error
This data is almost always more subjective than assays, less amenable to statistical checking, poorly understood and potentially more problem than issues with grade.
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Measure and Understand Error
This data is almost always more subjective than assays, less amenable to statistical checking, poorly understood and potentially more problem than issues with grade.
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Brave New World?
Make sure Geologists are in charge of everything!“…many commercial factors determine whether a mineral occurrence constitutes ore. These include demand …, price…, the size and location of the deposit, cost of treatment, losses incurred in mining and upgrading the material to a saleable product, and the presence of undesirable impurities”
Add to these commercial factors all the other factors, such as Metallurgical data, geotechnical information, groundwater… These can be more important to the success of a project than grade.
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How to improve?How do we: • Understand the Errors and Risks, • Quantify these, • And explain our position and drive change?
Reconciliation.
Understand and Drive Improvement
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For this to be successful, you need: • Regular and well documented systems, • Data (or very good assumptions) for each part of your
process – and to the sensible limits of the system• Good training and people, • Management support – perhaps the most important.
This is how you drive the process
Understand and Drive Improvement
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Measure and Understand Error
As I said earlier:
As the good Lord said - “The more you understand what is wrong with a figure, the more valuable that figure becomes”
Need to accept what you don’t know, and seek strategies to allow for this – either from more work on the problem or acknowledgement of errors.
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Don’t get sidetracked!• Don’t focus on a single point to the exclusion of the wider
process.• Don’t be dictated by what is easy – but do need to be
realistic and have wide support.
Remember the role of a mining geologist (or indeed any mining professional) is to always provide the best ore to the plant – with “best” being relative to many other concerns.
Help management see it as an improvement opportunity…
Understand and Drive Improvement
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Help management see it as an improvement opportunity…
…but be realistic.Maintain the discipline to see sampling and the attendant issues as Problems, to be solved with the application of time, money and knowledge (in varying ratios).
Understand and Drive Improvement
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Final Thoughts;
Sampling of a lot is the most effective (cost, time etc) way to understand a wider population – but is not perfect.
What you don’t know is worse than knowing you are wrong. Knowing the issue will let you solve it.
Use whatever language you need to get the point across – learn to speak accountant if you have to!
Understand and Drive Improvement
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That’s all folks.
Questions?
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Thank You