Week 6/7(no presentations next week due to SME)

COAL

Finalizing the Plan

• Proof has been shown that the losses resulting from Mining #5 seam are greater than the value of the recoverable coal it contains

• Proof has also been offered that #7 is far enough away from #6 that #7 coal is not sterilized by mining more profitable #6 first

The Order for #6 and #3• The board of directors consulted with two international authorities on

rock mechanics– Longwalling #3 coal will produce cracks in any coal seam within 50*thickness

of longwalled coal• Take your contour map of the #3 coal

– For areas you indicated intent to mine multiply the coal thickness contours by 50• This is your required innerburden map

• Create a contour map of the innerburden between the #6 and #3 coal (your #5 coal with its roof, coal, and floor are now additional innerburden since you elected to write-off the #5)

• Compare the two contour maps – what areas of #6 coal are within the 50 times limit– (I’m guessing not very much)

Economics/ vs Rock Mechanics and Convenience

• The Met coal is worth more than the #6 and delaying the met coal will hurt NPV badly– Starting met coal mining soon would be a valuable

move if it can be done technically• Longwalling is more disruptive of seams above

and will impact up to 50 times seam thickness– If you were room and pillaring #3 there would be

little doubt of adequate innerburden• But room and pillar would sacrifice recovery and increase

costs.

Evaluate

• Look at the area of #6 that is within 50 times the thickness of the #3 coal below– Can you time you mining sequence to be out of

those areas before you had to longwall?– Look for a sequence based solution that will allow

you to start mining #3 coal about 5 years after mining in #6 starts

If the #6 impacted area is too large to sequence around

• What is the value of the #3 coal mined by longwall?– (Sales Price – Cost to Mine)*minable tons

• What is the value of the #3 coal mined by room and pillar?• How Much Do You loose if you go to room and pillar?• Now take the value of #3 coal by longwall * P/F for 38

years and 15% interest– How much do you loose by delaying mining until after #6 is

totally mined out?• Which of the two losses is less?• Now Build your #6 #3 sequence plan

Plan Your Timing

• Time out your #6 coal mining with a timing and development map for the life of mine– With that timing map generate the tons of coal

plant feed (with out of seam dilution) each year• Will there be any changes in coal quality with time?

– Develop a schedule of Royalties Paid each year– Select your face equipment and build a manning

table for your face crew• Time out your #3 coal mining

Look at Your Coal Prep

• You now have a schedule of coal feed– (you already have a table for estimating your waste output

from the feed)• You selected a prep plant location in the middle of

your property– Part of the rationale was you would not be mining channels

under that area – but #6 and #7 have no channels and you centered right over the thickest #7 coal

• Check the location of your coal waste piles– Then develop a year by year development plan showing

where the waste you are making is going.

Begin Writing a Big Part of Your Report

• You will be turning in a partial report before spring break.– Suggested outline found in the coal people area of

the web site.• Submit first drafts of 3 sections by Friday (Feb.

22)• Have a draft of 2/3rds of report sections

outlined so far by Friday (Mar. 1)

DIAMOND

Your Production Strategy is now in place

• Get parameters for constraints– What are reasonable sustainable slopes for clay?– How will you build the haul roads in your pit?

• What kinds of rolling resistances will you face?• What kinds of coefficients of friction will you have?

• Think about your schedules– Do the pits and processing need to run the same schedule?

• What about the surface and underground?

– Do you want a 5 day a week schedule or a 7?– How many shifts per day do you want to run?

• Multiple shifts per day tend to better utilize capital expenditures• But they can also trigger costs

– An indoor processing plant may not care much about day or night– But haul trucks and loaders will need an electric light infrastructure to run after dark.

Several weather related problems are also a bigger issue at night.

Weather Impacts

• The Hecla Wyoming weather station is just south of your location– Laramie has 26 rainy days per year

• Consider the impact of snow and snow drifts on your haul roads and vehicle travel times

• Consider the impact of daylight hours• Will freeze thaw impact your roads in pit stability in the

winter?• If you do not keep workers on site they will have to drive high

mountain roads – potentially in bad weather– Happy Jack road could face frequent closings from storms or drifting

snow.

Plan a Schedule

• How many work days and shifts do you plan for your open pit each month?

• How many work days and shifts do you plan for your underground each month?

• How many work days and shifts do you plan for your processing– Your last presentation seemed to do multiple shifts for mining out

in the dark and cold- but for the plant that could easily run multiple shifts you seem to run only 1. (Explaining why might be interesting)

• Will you have workers housed on site at all (obviously you will for some of your security)

Build Your Map• Put your roads on the map and get specific information about grades

and surfaces into FPC.– Get your mileage– For the type of roads you build estimate the cost of all the roads that you will

build and include them on the map.• Assume your road cost will be increased 50% to provide snow management if you

intend to run in the winter

• Pick road maintenance equipment– For every 2.5 miles of road assume you need 1 road grader and two D8 size

dozers– For every 6 miles of road assume you need a water truck– If you are running in the winter what will you need for snow plows (you may

also have to keep Happy Jack Road open)– Estimate the capital cost and annual operating cost for your road support

equipment.

Adjust Your Pit Maps

• There is question about how steep your pit slopes will stand– Make adjustments to your final and stage pits as

necessary.

Size Your Surface Equipment Fleets

• Pick your trucks and front end loaders and calculate your capital and operating cost per ton.– You will have different operating costs per ton in

different pits and to a lesser extent different parts or depths of pits.

– Have a plan for fleet size and operating hours and cost for each year you will be surface mining.

Plan Your Ancillary Facilities• Ancillary facilities are peripheral buildings

– Will you have a truck and loader repair shop?• Plan the building• Estimate the buildings cost (Means cost estimation system is good for civil type buildings)

– Will you have a parts warehouse? – Will it be a stand alone building or part of another?• Plan the building• Estimate the building cost

– Will you have a wash house for workers (given your earlier explanation of security your answer is almost surely “yes”)• Plan the building• Estimate the building cost

– Will you have an office building?• Plan the building• Estimate the building cost

– Will you have any kind of residence suites for either workers or security• Plan the building• Estimate the building cost

Your Security

• You planned extensive round the clock security– What type of facilities will that require?– After the European Diamond Heist how would your prevent an armed

raid on your complex? (you are out in the middle of nowhere)• What types of fences and sensors are you thinking of?• How will you maintain and operate that during harsh winter snow and wind

storms?

• You have had problems with equipment being attacked (probably radical environmental groups associated with the Autistic Artisan). How will you deal with equipment sabatouge?

• What are these security ideas going to cost to buy and operate?

Your Processing

• After taking a good hard look at your processing schedule– Lay out and select the equipment you will use for

processing (this should be specific unit to buy)• Your idea to process only 9 hours per day seams like you are

building a much bigger plant than might be needed

– Identify how you will recover (or if you will recover) garnets– Layout your processing building

• Estimate the cost of your processing building• Estimate the cost of the equipment it will contain• Estimate your processing cost per ton.

Processing Related

• How far will you go toward processing to finished stones at your processing plant?– If you are going to send your stones out for cutting

how are your going to send them out?– How will you maintain security for your

shipments?– You will likely ship by air- what airport?

Writing Your Report

• You will be turning in at least ½ of your report sections by Mar. 1 and a draft of all sections outlined by Friday before spring break.– See the Diamond area of the website for

suggested outline to date (is not all sections that will ultimately be included).

COPPER-GOLD

Update Your MSOPIT Runs

• Make Sure you include increased mining costs by bench.• You now have your mining costs figured out based on

specifics for your mine. Put those costs into the MSOPIT cost matrix.

• You should now know the cost of processing each type of ore and the recovery you will get for each mineral with each type of ore.

• You should now be able to include differential slopes by azimuth and rock type.

• Get this information in and rerun your Ultimate Pit.

Check the Life and Production Rate

• The changes you made might impact the amount of ore you can recover by ultimate pit

• Check the amount of recoverable ore• At your proposed production rate, what is the

life of your mine?• Is the match still realistic.

Begin Preparing Some Information for an Appendix

• Get screen shot showing how you implemented differential cost by bench.– Write an explanation and show by calculations how you got those differential costs.

• Get Screen shots showing the input you used for your mining and processing costs and recoveries– Write an explanation and show by calculations how you got those costs in the matrix.– These calculations should be clear and complete enough that no one has to redo any

calculations to know exactly how you got the numbers in the blanks• Get Screen shots showing how you input your differential slopes by azimuth

and rock types– Write an explanation and show by calculations how you got the values in the matrix.

• This appendix report is likely to be quite long (it will have a lot of screen shots and then calculations and explanations for where each value came from) and is due before spring break begins.

Calculate Push Back Size

• Indicate the production capacity or your ore and waste fleet.

• When you go from a final pit slope to having the number of working benches you need for production, how much extra width did you have to add– Show your calculations– These will tell you what your push-back distance

is.

Stage Your Open Pit

• MSOPIT has a variety of tools that can be used to plan out your pit expansion year by year.– Pick an appropriate combination of these tools

and show what your stage pits will be like every 3 years

– You do not yet need to use the pit expansion tool to add roads and benches.

Start Working Your Infrastructure

• At this point you pretty much know the size of your mining operation and what it will include

• Review the electric power line infrastructure in the area– Assume you will need about a 160 to 200 KV line– Where can you tap that kind of power?– Where will you run your power line?– How long will the line be?– What will it cost?– How long will it take to put it in?

More Infrastructure

• With your processes known you should know what you have to ship, how much of it you have, and where you will ship it.– What method will you use to ship?– Put together any rail or road ways you will need

• Where will they run?• How long will they be?• What will they cost?• How long will it take to build them?

– Make sure the road network will also handle whatever things you need for supplies and workers to get in.

More Infrastructure

• Where exactly is water available in your area?• How will you get that water to your

operation?– Route and size your water line (or lines if you are

getting more than one kind of water from more than one location)

– What will your water line cost to build– How long will it take to build.

Write Part of Your Report

• An outline and more details will follow