Planning Ore Extraction Planning Ore Extraction Sequences in Open Pit MinesSequences in Open Pit Mines

©2012 Dr. B. C. Paul©2012 Dr. B. C. Paul

Note – These slides contain screen shots from the program MineSight Note – These slides contain screen shots from the program MineSight developed by Mintec. Credit for the program is given to its developers. Also developed by Mintec. Credit for the program is given to its developers. Also

note that these slides have been based on earlier work by the author and may note that these slides have been based on earlier work by the author and may have content similar to training classes conducted by Mintec.have content similar to training classes conducted by Mintec.

Maximizing ReturnsMaximizing Returns

• NPV is usually increased by bringing NPV is usually increased by bringing more early earnings and delaying more early earnings and delaying expensesexpenses• Sequencing pits for high grade ore with Sequencing pits for high grade ore with

lower stripping ratios tends to do thislower stripping ratios tends to do this• We Need A Method of Finding the Best We Need A Method of Finding the Best

Grade Ore to Mine FirstGrade Ore to Mine First

How to Make That HappenHow to Make That Happen

• Method #1 - We try to Fake Out the Learch Method #1 - We try to Fake Out the Learch Grossman RoutineGrossman Routine• Lerch Grossman will Find the Juiciest set of ore Lerch Grossman will Find the Juiciest set of ore

blocks that keeps producing more valueblocks that keeps producing more value• Obviously this must mean that it either finds the Obviously this must mean that it either finds the

maximum metal pit or the most lucrative oremaximum metal pit or the most lucrative ore• Because not all ore is equally easy to process it is possible Because not all ore is equally easy to process it is possible

that a set other than maximum metal will be selectedthat a set other than maximum metal will be selected

• We Need to Get Learch Grossman to Pick the Best We Need to Get Learch Grossman to Pick the Best of the Bestof the Best

To Do This We Perform What I To Do This We Perform What I Call A Price FakeCall A Price Fake• We tell the computer we have a dismal We tell the computer we have a dismal

market and then ask it to find the market and then ask it to find the ultimate pitultimate pit• Under unfavorable economics only the Under unfavorable economics only the

better grade ore will get included in the “fake better grade ore will get included in the “fake ultimate pit”ultimate pit”

• Learch Grossman however has picked us Learch Grossman however has picked us the set of blocks that yields maximum value the set of blocks that yields maximum value per ton which is just what we wanted.per ton which is just what we wanted.

We Will Gradually Raise Our We Will Gradually Raise Our Fake Price As We Do Multiple Fake Price As We Do Multiple RunsRuns

• Each Run will start with the previous pit in placeEach Run will start with the previous pit in place• Each Run will have the real final pit surface as a Each Run will have the real final pit surface as a

limiting surfacelimiting surface• The result will be a series of nested pits that go The result will be a series of nested pits that go

from the best ore to ore of progressively lower from the best ore to ore of progressively lower gradegrade• We have just tricked Learch Grossman into telling us We have just tricked Learch Grossman into telling us

how to optimize our NPV by sequencing our mininghow to optimize our NPV by sequencing our mining

Terms in Open Pit BenchesTerms in Open Pit Benches

Over-allSlope

Catch Bench

Berm

Crest Toe

Toe toCrest Slope

Final Pits Slopes allowBenches to be wide enough toCatch rocks and accommodateA berm. (This is often less thanThan 10 meters).

Geometry of a Working BenchGeometry of a Working Bench

Shovel

Truck Width

Back-up

Truck

TruckTurningradius

Berm width

ShovelLength

A bench big enoughTo accommodateEquipment working isMuch wider than oneOnly intended to catchRolling rocks.

Impact of a Working BenchImpact of a Working Bench

Over-allSlope

The over-all slope of the pit is drasticallyReduced if one must accommodate wideWorking benches.

The Pit Slope ProblemThe Pit Slope Problem

• Our Ultimate Pit Was Calculated at Our Final Our Ultimate Pit Was Calculated at Our Final Pit SlopePit Slope• A final pit slope has benches wide enough to catch A final pit slope has benches wide enough to catch

falling rock and allow for a road to get equipment falling rock and allow for a road to get equipment out.out.

• A bench 10 to 15 meters wide will usually catch A bench 10 to 15 meters wide will usually catch falling rockfalling rock

• But that may be just barely enough for a truck to drive But that may be just barely enough for a truck to drive forward if the bed drags the highwall and the tire runs forward if the bed drags the highwall and the tire runs over the bermover the berm

• No room for maneuvering the truck for production.No room for maneuvering the truck for production.• A Final Pit Slope cannot account for equipment in A Final Pit Slope cannot account for equipment in

operation.operation.

Price-Faking A Learch-Grossman Price-Faking A Learch-Grossman is Easy, But at What Slope?is Easy, But at What Slope?• A Final Pit Slope Can be 50-65A Final Pit Slope Can be 50-65oo

(Depending on rock mechanics slope stability)(Depending on rock mechanics slope stability)

• A working Pit with all working benches A working Pit with all working benches would likely have an over-all slope would likely have an over-all slope under 20under 20°°

• How do we reconcile this?How do we reconcile this?

Usual Open Pit PracticeUsual Open Pit Practice

• A less than 20° slope would cause the pit’s stripping A less than 20° slope would cause the pit’s stripping ratio to be very high – making the mining method ratio to be very high – making the mining method economically infeasible for a lot of oreeconomically infeasible for a lot of ore

• Why does every bench have to be a working bench?Why does every bench have to be a working bench?• Usually it doesn’t have to beUsually it doesn’t have to be• Mines have enough working benches to allow ore blending Mines have enough working benches to allow ore blending

and to keep shovels enough apart to keep them from and to keep shovels enough apart to keep them from “tripping over each other”“tripping over each other”

• Many open pits will have only 2 to 4 large shovelsMany open pits will have only 2 to 4 large shovels• This suggests only about 3 to 6 working benchesThis suggests only about 3 to 6 working benches• (One for each shovel and then some extra working places)(One for each shovel and then some extra working places)• If you can keep ore mixed well for the mill it requires less costly If you can keep ore mixed well for the mill it requires less costly

road work if all the shovels work on one benchroad work if all the shovels work on one bench

Reconciling Factor 1Reconciling Factor 1

• Not all Benches have to be working Not all Benches have to be working widthwidth• This will often allow over-all slopes over This will often allow over-all slopes over

30°30°

• (Your very first initial pit probably does (Your very first initial pit probably does not have very many benches so it may not have very many benches so it may really have a very low slope with almost really have a very low slope with almost every bench being a working bench)every bench being a working bench)

The Direction of Pit AdvanceThe Direction of Pit Advance

• If our 23If our 23rdrd bench is a working bench does it bench is a working bench does it have to be working width around the entire have to be working width around the entire pit?pit?• NoNo• A pit is 360° around – 2 to 4 shovels can’t move in A pit is 360° around – 2 to 4 shovels can’t move in

all those directionsall those directions• Digging out ore also digs out roadways – you don’t Digging out ore also digs out roadways – you don’t

want to be disrupting your roads everywhere at want to be disrupting your roads everywhere at the same timethe same time

• (Ok – you do if this is a conspiracy to make your short (Ok – you do if this is a conspiracy to make your short term mine planning engineers have a nervous break-term mine planning engineers have a nervous break-down)down)

The Push-Back RealityThe Push-Back Reality

• Mines may focus mining on only one side of Mines may focus mining on only one side of the pitthe pit

• Starting at the top the widen benches in this Starting at the top the widen benches in this direction as the minedirection as the mine

• At the end of “Pushing Back” the side of the At the end of “Pushing Back” the side of the pit in that direction they re-steepen the slopes pit in that direction they re-steepen the slopes to keep move the advantages of a low to keep move the advantages of a low stripping ratio forward in time and make the stripping ratio forward in time and make the pit more economic.pit more economic.

Push-Backs and Pit SlopesPush-Backs and Pit Slopes

• Because push-backs open wider Because push-backs open wider benches from the top down and then benches from the top down and then steepen over-all slopes at the end of a steepen over-all slopes at the end of a push-backpush-back• We may be able to take snap shots of We may be able to take snap shots of

where the mine will be at the end of each where the mine will be at the end of each push-backpush-back

• Those pit slopes at the end of a push-back Those pit slopes at the end of a push-back may have about the final pit slopemay have about the final pit slope

A Potential SolutionA Potential Solution

• If we phase our mine advance in “Push If we phase our mine advance in “Push Backs” we may have about final slopes at the Backs” we may have about final slopes at the end of each pushbackend of each pushback• Design your mining phases using a final pit slopeDesign your mining phases using a final pit slope

• (There may be cases where push-back (There may be cases where push-back stages in a particular direction are not stages in a particular direction are not practical)practical)• Your very first pit when you start the mine Your very first pit when you start the mine

probably will need all working benches in all probably will need all working benches in all directionsdirections

A Side Effect of the Push-Back A Side Effect of the Push-Back SolutionSolution• Relying on Push-Backs allowed us to look at Relying on Push-Backs allowed us to look at

our pit at final slope at the end of each phaseour pit at final slope at the end of each phase• But it also meant that the distance we “Pushed But it also meant that the distance we “Pushed

Back” had to be big enough to accommodate our Back” had to be big enough to accommodate our working slopes during the mining that we don’t working slopes during the mining that we don’t see.see.

• Thus – to work a Push-Back must advance Thus – to work a Push-Back must advance the mine a minimum distance in a given the mine a minimum distance in a given direction.direction.

So How Far Would That Distance So How Far Would That Distance Be?Be?• Suppose we have 10 meter wide catch benches.Suppose we have 10 meter wide catch benches.• Next we layout the size of our trucks and shovels and Next we layout the size of our trucks and shovels and

the amount of room they need to turn and manuver.the amount of room they need to turn and manuver.• Suppose from this we find a working bench needs to be 100 Suppose from this we find a working bench needs to be 100

meters widemeters wide

• Then we find out that for ore blending reasons we Then we find out that for ore blending reasons we should have working benches on 3 levelsshould have working benches on 3 levels• To widen from 10 to 100 meters takes 90 meters extraTo widen from 10 to 100 meters takes 90 meters extra• We need this 90 meters extra 3 timesWe need this 90 meters extra 3 times• 3X90 = 270 meters – our push back must be 270 meters3X90 = 270 meters – our push back must be 270 meters

Well – After that Philosophy Well – After that Philosophy Lesson We Are Ready to Get Lesson We Are Ready to Get Back to Price-Faking Our Learch-Back to Price-Faking Our Learch-GrossmanGrossman• Which Panels of Our MSOPIT program Which Panels of Our MSOPIT program

will we change with “Fake Prices”will we change with “Fake Prices”

Of Course the Economics PanelOf Course the Economics Panel

We Would Have to Change We Would Have to Change Where We Stored Our ResultWhere We Stored Our Result

We Would Probably Change Our We Would Probably Change Our Output Report TitlesOutput Report Titles

Lets Think About What We Are Lets Think About What We Are About Ready to doAbout Ready to do• We will pick 3 panels where we will We will pick 3 panels where we will

change numberschange numbers• We will fill out new numbers for say 12 We will fill out new numbers for say 12

price sets one at a timeprice sets one at a time• We will run our MSOPIT about 12 timesWe will run our MSOPIT about 12 times

• Sitting there and watching for resultsSitting there and watching for results

• Does This Sound Fun!Does This Sound Fun!

I Didn’t Think So – Lets Try I Didn’t Think So – Lets Try Another WayAnother Way

We Will Get the ComputerTo do our repetitive runsUsing something called aMulti-Run

Start MineSight Compass

Pick the Options Tab

Under Multi-Run pick new

Then click on the open folderIcon.

A Set Of Procedures to Run A Set Of Procedures to Run Automatically is Called A PackageAutomatically is Called A Package

Your set of responsesIs called responses

We need to give bothA nameOk – so much for myNaming creativity

Next we need toIdentify procedures toRun

Put your curser in theProcedures box.

If You’ve Had Way to Much Time on Your If You’ve Had Way to Much Time on Your Hands you have the Procedure Name Hands you have the Procedure Name Memorized.Memorized.

If not position the multi-run window soYou can also see the compassProcedures list

Then click on the compass procedure

And it appears in the multi-runWindow.

Now Click On Set-UpNow Click On Set-Up

We Will Assume You Already We Will Assume You Already Have Basic Input Because You Have Basic Input Because You Already Got Your Open PitAlready Got Your Open Pit

The trick of a multi-run is to enter variable names with incrementable numbersPreceded by a question mark (note the ? Is different than the $ used in Excel)When the multi-run operates the variable will be changed according to a list.

I Will of Course Vary Which Pit My I Will of Course Vary Which Pit My Incremental Pit Surface is Stored in.Incremental Pit Surface is Stored in.

I’ll Leave Audit Options Blank When I’ll Leave Audit Options Blank When I Will Automatically Run Multiple I Will Automatically Run Multiple TimesTimes

I Will Not Save Fake Price I Will Not Save Fake Price Results into the Block ModelResults into the Block Model

But I will save each outputReport separately under aDifferent number.

An Unusual ExitAn Unusual Exit

After entering neededNeeded information and variableCharacters in the procedurePanel

Click File

Then click Save and ExitMulti-Run Setup

You Are Taken Directly to a Panel You Are Taken Directly to a Panel Where Your Enter Your Variable Where Your Enter Your Variable ValuesValues

My ?01 and ?03Are fake copperPrices

My ?02 is the fakeMolybdenum Price

?04 tells me whichPit surface to sendThe result to

?05 is the name ofThe report extension

Enter the Values for My First RunEnter the Values for My First Run

After smelting and refining charges copper bring 25 cents a pound and electrowonCopper brings 35 cents. Moly in concentrate is 75 cents a pound. I will load my fakeSmall pit into shell 27 and use an F1 for my report extensionNow Click Add value for my next run

After Entering the Values for 12 After Entering the Values for 12 Runs I Return to ProceduresRuns I Return to Procedures

I Designate 12 runs and Enter My I Designate 12 runs and Enter My CommentComment

In this case I onlyNeeded oneProcedure, butMulti-runs can beUsed for sequencesOf differentProcedures.

I Will Next Save My Package and I Will Next Save My Package and ResponsesResponses

This allows me to use the same sequence to do something in the same way each timeOr to come back and selectively edit for changes without having to redo from scratch.

I Click Run and the Multi-Run I Click Run and the Multi-Run StartsStarts

This may take aWhile so now ICan go take aBreak insteadOf tediouslyRe-running thingsAgain and again.

Looking at Our Price Sensitivity Looking at Our Price Sensitivity PitsPits

Observation – Our Price Fake Method did indeed get us stage pits

The Push-Backs Don’t Look Very The Push-Backs Don’t Look Very PracticalPractical

360 M

Initial Pit Might Work(except finish slope is too steep)

120 M130 M

Remembering that a practical push-back distance is 90 to 270 metersDepending on the number of active levels it appears that most slicesAre too thin to be push-backs

And That is One Heck of a GapAnd That is One Heck of a Gap

In fact the tendency of price-fake pits to make huge jumps is called “The Gap”.It is a common problem (and mathematically a feature of Learch-GrossmanWhich defines solutions only at certain points)

The GapThe Gap

• Large jumps are impractical to schedule as a Large jumps are impractical to schedule as a push-backpush-back

• Learch-Grossman infact solves an altered Learch-Grossman infact solves an altered problem that only has solutions periodically problem that only has solutions periodically defineddefined• Thus you may raise the price and nothing happens Thus you may raise the price and nothing happens

till the pit jumps.till the pit jumps.

• Lets try a floating cone and put smaller price Lets try a floating cone and put smaller price changes in the range where the jump occurs.changes in the range where the jump occurs.

Check for Our Price Jump PointCheck for Our Price Jump Point

45¢/lb Cu

50¢/lb Cu

65¢/lb Cu

Looks like we jumped between 50 and 65 cents

Well That Wasn’t What I Hoped Well That Wasn’t What I Hoped ForFor

Initial Pit has 21° Slope

50¢55¢

58¢

62¢

65¢ 110 M

70M

We could mine the 50 cent pit top down, and 58 to 65 cents make a practical oneActive bench push-back

Here is Another TryHere is Another Try

65¢

58¢45¢

57¢

OH GIVE ME A BREAK – that gap is ridiculous

Some Realities About Price Fake Some Realities About Price Fake GapsGaps

45¢

57¢57.3¢

65¢

We still have our gap. In a long term planning environment we have widelySpaced drill holes. Our grade estimation variances or the market fluctuations fromA butterfly in Nepal stretching its wings are larger than our gap. The ability to getPrice fakes to completely define our mining sequence is an illusion.

Tools We Have For Getting A Tools We Have For Getting A Real Push-Back PlanReal Push-Back Plan• We could always use the price shells and We could always use the price shells and

then try to use our own guesses about then try to use our own guesses about pushback direction to design pushbacks with pushback direction to design pushbacks with the Pit Expansion Toolthe Pit Expansion Tool• We will ultimately have to do this but we can get We will ultimately have to do this but we can get

more guidancemore guidance

• We could run that Floating Cone with We could run that Floating Cone with geometric and price constraints to get so geometric and price constraints to get so realistic push-back shells before we use the realistic push-back shells before we use the pit expansion tool.pit expansion tool.

Enter the Multi-Pit OptionEnter the Multi-Pit Option

It’s a single radio button on the Design Strategy Panel.

As We Would Guess – We Now As We Would Guess – We Now Have to Fill Out an Extra Have to Fill Out an Extra Geometric Constraints PanelGeometric Constraints Panel

Practical ConstraintsPractical Constraints

It wants to know about yourProduction rate andPushback requirements

It wants to know either ourYearly ore mining or totalOre mining capacity(ie – how much materialCan you move in a year)Note – it is in Ktons –Units of 1,000 tons

If you are really foggyAbout your mining capacityAt this point – relax, thisOnly becomes critical if youApply a discount rate in theOre selection.In my opinion this is a bad practice anyway

Here is an important constraintHere is an important constraint

We can impose a minimumTonnage or number ofBlocks in a push back(this would eliminate someOf those paper thin 10Foot push-backs that couldOnly be mined by theSeven Dwarfs from SnowWhite)

We can also controlPush-back width (sort of)

What Does Sort of Control Push-What Does Sort of Control Push-Back Width Mean?Back Width Mean?• The control is not directThe control is not direct• What you actually control is how many new benches What you actually control is how many new benches

the pit can go down in a push-backthe pit can go down in a push-back• Of course this is useful of itself because sometimes a Price-Of course this is useful of itself because sometimes a Price-

Fake only routine will try to open 15 new benches in a year. Fake only routine will try to open 15 new benches in a year. Most operators would find that very hard to do.Most operators would find that very hard to do.

• The indirect effect is that as one goes down they The indirect effect is that as one goes down they usually have to push back at a certain slope – thus a usually have to push back at a certain slope – thus a push down usually also implies a push-over distance.push down usually also implies a push-over distance.

• Remember this control works best along with Remember this control works best along with imposing a tonnage that must be mined in a push-imposing a tonnage that must be mined in a push-back.back.

You Have a Direct Control on You Have a Direct Control on Which Pit Shells will get Which Pit Shells will get information and how many information and how many phases will be planned.phases will be planned.

This identifies the pit shell Numbers to get the Information.

You Can Control Pit Expansion You Can Control Pit Expansion DirectionDirection

As a practical matterPushing back a pit in allDirections at once isDifficult – what would beHappening to all thoseRoads that carry material.

Note that here I can controlWhich parts of the blockModel are consideredIn a push-back step.

Many times you can look at Many times you can look at Economic Shells and Decide Which Economic Shells and Decide Which Way to Push.Way to Push.

Start

Push back 1

Push back 2

Push back 3

Push back 4

Push back 5

Then down toThe bottom.

Multi-Pit is not the only way to Multi-Pit is not the only way to control expansion directioncontrol expansion direction

The first panel ofMSOPIT allowsMe to considerOnly part of theBlocks in myBlock model

The thing uniqueAbout Multi-PitIs I can controlThis while at theSame timeImposing oreTonnage and pushBack distanceRequirements.

The Last Part of the Multi-Pit The Last Part of the Multi-Pit Control PanelControl Panel

Some of theseJust restate wasteMining costs and oreDensities found inOther parts of theRun (they can beOver-ridden here forSome fine tuningTricks)

Sometimes You Want to Impose Sometimes You Want to Impose that no rock outside the “Ultimate that no rock outside the “Ultimate Pit” will be considered.Pit” will be considered.

You can set theUltimate pit asA surface whereNo block outsideWill be consideredAs ore to mine.

(just identify theShell that containsYour ultimate pit)

But Wouldn’t I Always Use My But Wouldn’t I Always Use My Ultimate Pit as a Limiting Surface?Ultimate Pit as a Limiting Surface?• Often an ultimate pit is designed using the Often an ultimate pit is designed using the

mineral prices and operating costs believed mineral prices and operating costs believed to be most likelyto be most likely

• If you let the multi-pit shells go out of If you let the multi-pit shells go out of boundaries later routines can look for boundaries later routines can look for conditions where you might get a little moreconditions where you might get a little more• If pits beyond the ultimate are not economically If pits beyond the ultimate are not economically

feasible this will show up that mining the last few feasible this will show up that mining the last few phases may not be economic.phases may not be economic.

Minimum and Maximum Factors Minimum and Maximum Factors Control How the Routine Control How the Routine Generates PitsGenerates Pits

The values are setBetween 0 and 1(unless you wantTo generate pitShells outside your“Base Case” UltimatePit).

Who ever put in theseFactors needed help1.5 is more than both1 and the point 0.4maximum

How Multi-Pit Avoids “the GAP” How Multi-Pit Avoids “the GAP” with even tiny price changeswith even tiny price changes• Lets say the minimum is 0.1Lets say the minimum is 0.1• Multi-Pit looks at each column of blocks Multi-Pit looks at each column of blocks

in the block model and designates the in the block model and designates the top 10% to be ore – all others are top 10% to be ore – all others are treated as wastetreated as waste

UltimatePit Line(no oreOutsideThisBoundary)

Ore blocks(actually the top10% of blocks)

Note that the Program has now Note that the Program has now made a clear incremental step in made a clear incremental step in what is the best rock and what is what is the best rock and what is lessless• The program then attempts to generate a pit The program then attempts to generate a pit

using only the top 10% for ore blocksusing only the top 10% for ore blocks• After generating a pit it checks to see if After generating a pit it checks to see if

tonnage and pushback size constraints have tonnage and pushback size constraints have been madebeen made• If yes it declares it found a pit phase advancement If yes it declares it found a pit phase advancement

and outputs the result.and outputs the result.

If Not?If Not?

• The program then takes the top 20% of The program then takes the top 20% of blocks as ore (it moves in 10% blocks as ore (it moves in 10% increments)increments)• It trys to generate a pitIt trys to generate a pit• It checks the pits against the constraintsIt checks the pits against the constraints• If it meets the constraints it reports the pit If it meets the constraints it reports the pit

as the next phaseas the next phase

• If not it tries the top 30% of blocks.If not it tries the top 30% of blocks.

So What Are Maximums More So What Are Maximums More Than 1?Than 1?• 1 is all the oreblocks that were 1 is all the oreblocks that were

considered ore in the base “ultimate pit considered ore in the base “ultimate pit case”case”

• 1.1 is the 10% of the blocks beyond that1.1 is the 10% of the blocks beyond that• These blocks have to have their earnings These blocks have to have their earnings

boosted by 10% to appear to be oreboosted by 10% to appear to be ore• 1.2 is for a 20% boost appearing to be 1.2 is for a 20% boost appearing to be

oreore

The Discount Rate BlankThe Discount Rate Blank

This allows you toImpose the timeValue of moneyOn your oreSequence planning

If I wanted a 15%Discount rate IWould input theNumber 15.

You Can Also Apply Discounting You Can Also Apply Discounting By Time from another panelBy Time from another panel

What is Discounting?What is Discounting?

• Using Engineering Economics Using Engineering Economics principles, money received later in time principles, money received later in time is work less than money earlier in timeis work less than money earlier in time• The discount rate is the percentage of The discount rate is the percentage of

value lost each yearvalue lost each year• MineSight will consider your mining MineSight will consider your mining

rates and when certain ore is likely to rates and when certain ore is likely to be mined and then lower the value of be mined and then lower the value of the block accordinglythe block accordingly

Why Would I Do ThisWhy Would I Do This

• Sometimes when you calculate an ultimate pit Sometimes when you calculate an ultimate pit or stage pits you want to tell people very or stage pits you want to tell people very quickly about what the Net Present Value of quickly about what the Net Present Value of the Pit isthe Pit is• If you use the direct value of ore you will tell If you use the direct value of ore you will tell

people how much money will ultimately be people how much money will ultimately be generatedgenerated

• Discounting lets you approximate NPV before you Discounting lets you approximate NPV before you have a more complete mine design and cut-off have a more complete mine design and cut-off grade optimization strategy.grade optimization strategy.

I Made A Nasty Remake About I Made A Nasty Remake About Discounting EarlierDiscounting Earlier• What’s the HarmWhat’s the Harm

• If you want a quick NPV estimate – nothingIf you want a quick NPV estimate – nothing• But if you are going to do a more detailed But if you are going to do a more detailed

design it will distort the resultsdesign it will distort the results• As I discount later mined ore I actually will cut-As I discount later mined ore I actually will cut-

back on ore I would strip to getback on ore I would strip to get• Ore 20 years in the future has little NPV impact Ore 20 years in the future has little NPV impact

today, but 20 years from now $50,000,000 today, but 20 years from now $50,000,000 dollars will be $50,000,000, I probably will not dollars will be $50,000,000, I probably will not just walk awayjust walk away

Putting Discounting into Blocks Putting Discounting into Blocks Leads to Double CountingLeads to Double Counting• After we get our pit stages we will try After we get our pit stages we will try

different mining rates and cut-off grades different mining rates and cut-off grades to see what produces the best NPVto see what produces the best NPV• If the blocks have NPV estimates built into If the blocks have NPV estimates built into

them on general assumptions it will them on general assumptions it will interfere with NPV accuracy when we interfere with NPV accuracy when we make more detailed assumptions.make more detailed assumptions.

Multi-Pit in MineSights most Multi-Pit in MineSights most Powerful Anti-Gap ToolPowerful Anti-Gap Tool

There are Other Choices

I Will Use the MultiV OptionI Will Use the MultiV OptionThe rest of the panelsAre set for ultimate pit.

I click the radio buttonFor MultiV instead ofBase.

For stage pits I’m alsoConsidering floatingCone as good enoughFor my approximation.

This Requires Me to Fill Out A This Requires Me to Fill Out A Special Panel to Control the Special Panel to Control the MultiVMultiV

Remember my file 13Has a number ofPit surfaces from 0 to50 available. I haveTo say which ones IWant to fill.

I’m Trying for 21 Steps to Go in I’m Trying for 21 Steps to Go in Pits 10 to 30Pits 10 to 30

The bench and blockRange allows us to limitHow much of the blockModel we run calculationsOn. (We’re not going toDo this. You would do itIf your block model Covered a large area andThe ore was only in oneArea).

The value factors need some explanation.

How MultiV WorksHow MultiV Works

• It calculates the value of each block at full metal pricesIt calculates the value of each block at full metal prices• Then it multiplies the value of each positive block by the Then it multiplies the value of each positive block by the

minimum factorminimum factor• It then will run a floating cone to pick the pit it will mineIt then will run a floating cone to pick the pit it will mine

• Next time around it increments the factor one even Next time around it increments the factor one even step up from the minimum value to the maximumstep up from the minimum value to the maximum• It remultiplies the value of each positive blockIt remultiplies the value of each positive block• It runs a floating cone to pick the next pit surfaceIt runs a floating cone to pick the next pit surface

• And so onAnd so on• Of course a prices really change which blocks are even Of course a prices really change which blocks are even

positive will changepositive will change• This is a different way of trying to pick the most valuable ore.This is a different way of trying to pick the most valuable ore.

I Will Let My Values Go From I Will Let My Values Go From Almost Nothing to Full ValueAlmost Nothing to Full Value

Lastly I will order the computer to make sure all my pits are nestedInside my Lerch Grossman ultimate pit (which I have stored in pitSurface 2).

Some Multi-V ObservationsSome Multi-V Observations

• Multi-V is really incrementing the value Multi-V is really incrementing the value of blocksof blocks• This is similar to what we did by stepping This is similar to what we did by stepping

through metal prices with a multi-run through metal prices with a multi-run (Of (Of course we know “the Gap” nailed us good when we did this)course we know “the Gap” nailed us good when we did this)

• Multi-V does not recomputed the value of Multi-V does not recomputed the value of blocks every timeblocks every time• Instead it multiplies an already computed value Instead it multiplies an already computed value

by a constantby a constant• It’s kind of a cheap version of a multi-runIt’s kind of a cheap version of a multi-run

The Other ChoicesThe Other Choices

• Multi-Z increments the depth of ore Multi-Z increments the depth of ore consideredconsidered

• Bottoms takes a series of “base strings” that Bottoms takes a series of “base strings” that you entered – projects pits up from them and you entered – projects pits up from them and then puts the pits in value orderthen puts the pits in value order• This can be useful if your orebody produces a This can be useful if your orebody produces a

bunch of little pits instead of one big onebunch of little pits instead of one big one• Resources is not a pit design tool at all – it Resources is not a pit design tool at all – it

just reports the ore content a value of an just reports the ore content a value of an already developed pit.already developed pit.

At the End of the Process We At the End of the Process We Will Have a Series of Practical Will Have a Series of Practical Push-BacksPush-Backs

Where Do I Go From Here?Where Do I Go From Here?

• I have two tools aheadI have two tools ahead• MSVALPMSVALP

• MSVALP lets me consider what mining rate will MSVALP lets me consider what mining rate will give me the best NPV or PVRgive me the best NPV or PVR

• It also lets me consider that I can improve my NPV It also lets me consider that I can improve my NPV and PVR by changing the cut-off grade with timeand PVR by changing the cut-off grade with time

• MineSight Strategic PlannerMineSight Strategic Planner• Calculates in detail where you will be pulling ore Calculates in detail where you will be pulling ore

from each year of operationfrom each year of operation

Completing a Long Term Mine Completing a Long Term Mine PlanPlan• By taking your stage pits and using MSVALP By taking your stage pits and using MSVALP

for general optimizationfor general optimization• And then using MSSP to get a detailed planAnd then using MSSP to get a detailed plan• You end up with a detailed year by year plan You end up with a detailed year by year plan

of where you will mine and what it will be of where you will mine and what it will be worth in the endworth in the end• This plan then becomes the basis for day to day This plan then becomes the basis for day to day

operating decisions when the mine is actually builtoperating decisions when the mine is actually built

Our Decision NowOur Decision Now

• When do we use the pit expansion tool When do we use the pit expansion tool and detail in our roads and benches for and detail in our roads and benches for these mining phases we created?these mining phases we created?

• We could do this before or after we run We could do this before or after we run MSVALPMSVALP• Since benches and roads alter slightly the Since benches and roads alter slightly the

exact ore we mine if we do it now we feed exact ore we mine if we do it now we feed more detail to MSVALPmore detail to MSVALP

Decision TimeDecision Time

• On the Other HandOn the Other Hand• MSVALP assumes we will mine each MSVALP assumes we will mine each

phase from the top downphase from the top down• If it finds it needs to prestrip ore to keep the If it finds it needs to prestrip ore to keep the

amount of equipment we need steady it will just amount of equipment we need steady it will just assume it can be done without figuring where assume it can be done without figuring where the material will come fromthe material will come from

• Since MSVALP is not really specific about Since MSVALP is not really specific about where the material it is mining comes from where the material it is mining comes from – being real specific about roads might not – being real specific about roads might not be important.be important.

Some Educators ObservationsSome Educators Observations

• If you are doing a Sr. Design Project you If you are doing a Sr. Design Project you have a teamhave a team• There is a lot of CAD work to put in roads and There is a lot of CAD work to put in roads and

benchesbenches• It is hard to have a lot of people working on different It is hard to have a lot of people working on different

phases at the same timephases at the same time• This can mean a bunch of team members sitting idle This can mean a bunch of team members sitting idle

while the benches are done and then everyone hurrying while the benches are done and then everyone hurrying to make up for it.to make up for it.

• MSVALP will also be used to consider different mining MSVALP will also be used to consider different mining ratesrates

• If one of those rate decisions changes your truck size that If one of those rate decisions changes your truck size that could change the road width and ruin a lot of work could change the road width and ruin a lot of work someone else has done.someone else has done.

SuggestionSuggestion

• Break up the teamBreak up the team• Send someone to work on phase bench Send someone to work on phase bench

and road designs (to be used later in and road designs (to be used later in MSSP)MSSP)

• Then have other team members use the Then have other team members use the rough phases you have now to run the rough phases you have now to run the mining rate and cut-off grade optimizations mining rate and cut-off grade optimizations of MSVALPof MSVALP

Assignment 1Assignment 1

• Using the File for Which You Did an Using the File for Which You Did an Open Pit design a minimum of 7 Open Pit design a minimum of 7 practical stage pitspractical stage pits• Your first should be a practical top down Your first should be a practical top down

initial pit.initial pit.