invent

Carlos Espejel introduce

Mine Planning
Engineer
C.Espejel@crcore.org.au
Strategic Mine Planning
www.crcore.org.au
 GRADE ENGINEERING STUDY FRAMEWORK
• Measure & quantify the Grade Engineering® responses of the orebody
1. Characterisation • Conducted through combination of physical testing & data analytics

2. Geometallurgy & • Understand geological controls on Grade Engineering® responses

Spatial Analysis • Spatially map responses defining Grade Engineering® domains

3. Process Design & • Define Grade Engineering® “circuit”, equipment design & specifications
Simulation • Quantify process simulation responses across mining value chain

4. Strategic Mine • Develop strategic mine plan incorporating Grade Engineering®

Planning • Define impact on equipment, layout, material movement, mine development

• Quantify the economic impact utilising Scenario Analysis

5. Project Evaluation • Define implementation options and viability

• Technical validation at production scale of Grade Engineering® technology

6. Pilot/Production Trials • Detailed testing, validation, reconciliation process

CRC ORE 2
 MINE PLANNING STAGES AND INDIVIDUAL TARGETS

Strategic Strategic Tactic

Long Term Mine Planning Medium Term Mine Planning Short Term Mine Planning

5 to 100 Years 1 to 5 Years Weekly, monthly up to 1 Year

Project Overall Net Present Refines the LTMP Tries to achieve LTMP Targets
Value (NPV) Follows the LTMP TPH to Mill
Internal Rate of Return (IRR) NPV is the target Head Grades to Mill
Metal Production (Commitment) Cost Reduction
Life of Mine (Years?) Annual Cash Flow

CRC ORE 3
 STRATEGIC LONG TERM MINE PLANNING (LTMP)

The Main Target of LTMP is to achieve the economic and strategic targets of the Company / Shareholders

Net Present Value (NPV)

Internal Rate of Return (IRR)
Metal Production (Commitment)
Life of Mine (Years?)

One of the Main Targets of LTMP is to convert Ore Resources into Ore Reserves

“An ‘Ore Reserve’ is the economically mineable part of a

Measured and/or Indicated Mineral Resource.” JORC 2014

CRC ORE 4
 STRATEGIC MINE PLANNING: STRATEGIC
Importance of Strategic Mine Planning? Incorporates and plans at a global level.

1. Model and optimise the Mine Plan accounting current and future metal prices.

2. Calculate the annual cut-off grades for the life of the mine for all processes.

3. Model and find optimum timing and size for secondary processes (leaching).

4. Model and select the optimum time for plant expansions, maintenance and close of mine.

5. Model and Optimise multiple scenarios with different Plant Sizes and Metal prices.

6. Maximises NPV and estimates; optimum time, resource region and quantity/size of new
technology application to a specific project.
 STRATEGIC MINE PLANNING COMMON ACTIVITIES
Resource Evaluation and Economic Block Model

1. Mining Method Selection

2. Cost Modelling and Equipment Selection

3. Resource Evaluation
Final Pit Economic
4. Definition of Reserves and Final Pit Optimisation Sequence

5. Definition of Economic Sequence

6. Phase Design (Ramps and Operability)

7. Production Schedule and NPV Optimisation Production Schedule Optimisation

7.1 LOM Cut-off Grades Optimisation

CRC ORE 6
 STRATEGIC MINE PLANNING + GE ACTIVITIES

Strategic Long Term Mine Planning +

1. Cost Modelling including GE.

2. Estimation of economically exploitable resources through GE.

3. Definition of new Reserves and Final Pit through GE.

4. Phase Design (Ramps and Operability) incorporating GE.

5. Production Schedule and NPV Optimisation through GE.

5.1 Find optimum GE plant size and operating mode.

5.2 LOM Cut-off grades optimisation through GE.

CRC ORE 7
 STRATEGIC MINE PLANNING: GE OPTIMISATION STEPS
Grade Engineering Techniques

Sensor
P r e fe re Different based
n t ia l Sensor Coarse
i al
g r a de
blasting
based stream gr avity
d e port m bulk s eparat
ent for gr ade sorting
b y s iz e sorting i on
by size

1 2 3 4 5 Project Strategic Targets (NPV)

GE Cost Model

GE Resource Evaluation GE Final Pit Optimization Push Back Opt/Dsg GE Production Schedule
Optimization

CRC ORE 8
 GRADE ENGINEERING: COST MODELLING
Initial Investment
Variable
Capital Costs (CAPEX) • Hauling ($/t)
Sustaining • Loading ($/t)
• Drill & Blast ($/t)
• Rehandling ($/t)
Mining • Ancillary ($/t)
COST MODEL

Processing Fixed Costs ($/hr)

Operational Costs
(OPEX) Variable
Admin
• Mill ($/t)
• Leaching ($/t)
Grade Eng.
Variable
Selling • Screening ($/hr)
• Diff Blast ($/hr)
Market Costs • Sensor BS ($/hr)
Refining • Rehandling ($/hr)
CRC ORE 9
 COST MODELLING EXAMPLE: CAPEX & OPEX

MINZONE
PARAMETER UNITS TOTAL
SEC PRI
Mining
Ore to Mill Mining Cost CmineMILL $/t 2.63 2.68 2.65

tonnes mined Ore to LCH Mining Cost CmineLCH $/t 2.87 3.11 2.96
Ore to GE Mining Cost CmineGE $/t 2.82 2.99 2.87
Waste to Dump Mining Cost CmineWST $/t 2.87 3.11 2.96
Ore to Stocks Mining Cost CmineSTK $/t 2.90 2.95 2.92
Ore Rehandling Variable Cost CmineREH $/t 1.80 1.80 1.80
Mining Cost Cmine $/t 2.71 2.85 2.76
Dump Leaching Leaching Cost CromLCH $/t 1.45 0.00 1.45
tonnes leached SXEW Cost CSXEW $/lb 0.25 0.00 0.25
Dump Leaching Cost Clch $/t 2.12 0.00 2.12
Milling Mill Throughput Rate TPHMILL t/href 3,523 2,437 3,026
tonnes milled Mill Availability AvMILL % 93.0% 93.0% 93.0%
Mill Operating Hours HropMILL 496,775 418,992 915,767
Milling Variable Cost CmillVAR $/t 3.50 3.50 3.50
Milling Fixed Cost CmillFIX $/hr 18,330 18,330 18,330
G&A Fixed Cost CgaFIX $/hr 8,000 8,000 8,000
Millling Cost Cmill $/t 13.51 14.31 13.80

CRC ORE 10
 COST MODELLING EXAMPLE: SELLING COSTS
MINZONE
PARAMETER UNITS TOTAL
SEC PRI
Cu Concentrate Concentrate Cu Grade ConCu % 33.4% 33.8% 33.5%
Selling Concentrate As Grade ConAs ppm 1,839 1,261 1,634
Concentrate Ag Grade ConAg g/t 51 50 51
Cu Concentrate Tonnage TconCu dmt 22,515 12,315 34,830
Transport & Port Cost CtrcCu $/wmt 26.0 26.0 26.0
Ocean Freigth Cost CofcCu $/wmt 54.0 54.0 54.0
Insurance Cost CinsCu 0.63 0.64 0.64
Umpire, Surveying, Asseying CusaCu $/dmt 0.35 0.35 0.35
As Penalty PenAs $/dmt 0.00 0.00 0.00
Concentrate Humidity HumCu % 9.0% 9.0% 9.0%
Concentrate Losses LossCu % 0.5% 0.5% 0.5%
Cu Payable Factor PFCu % 96.6% 96.6% 96.6%
Cu Smelter Charge TCCu $/dmt 105.0 105.0 105.0
Cu Refining Charge RCCu $/lb 0.105 0.105 0.105
Sales Cu Price PCu $/lb 2.87 2.87 2.87
Cu Price Particip. Factor PPCu $/lb 0.00 0.00 0.00
Cu Conc. Selling Cost SellConCu $/lb 0.46 0.46 0.46
Cu Cathode Transport & Port Cost CTRP $/lb 0.023 0.000 0.023
Selling Ocean Freigth Cost COFR $/lb 0.027 0.000 0.027
AAA Cathode Quality Premium QPCu $/lb 0.000 0.000 0.000
Sales Cu Price PCu $/lb 2.87 2.87 2.87
CRC ORE 11 Cu Cathode Selling Cost SellCuH $/lb 0.05 0.00 0.05
 COST MODELLING EXAMPLE: GE CAPEX & OPEX
Description Unit Unit Cost
Screening – Grade by Size Cost $/t. processed -0.31
Undersize Material Cost $/t. processed 0.03
Oversize Material Cost $/t. processed -0.60
Differential Blasting Cost $/t. processed -0.10

‘Mass Pull’ to Undersize Grade by Size ($/t) Differential Blasting ($/t)

20% 0.784 0.884
30% 0.721 0.821
40% 0.658 0.758
50% 0.595 0.695
60% 0.532 0.632
70% 0.469 0.569
80% 0.406 0.506

GE Plant (Ktpd) GE Plant (Ktpa) Installed CAPEX

55 20,000 $ 183,137
68 25,000 $ 195,990
82 30,000 $ 209,477
96 35,000 $ 213,427
110 40,000 $ 220,769
123 45,000 $ 227,455

CRC ORE 12
 GE RESOURCE EVALUATION: ECONOMIC BLOCK MODELLING

GE
E

G
E

G GE GE
E

G
E
GE

Geological Parameters GE Economic Variables

Metallurgical Parameters
GE Geometallurgical Attributes:
• Grade Variability
• Separation Properties per GE Technique
CRC ORE 13
• Ranking Responses
• Pre-C Operating Costs
• Unit Value per Block $/t
• Optimum Economic Destination
• Optimum GE tech and operating mode
• MCAF, PCAF
 GE RESOURCE EVALUATION: BLOCK VALUE & DESTINATION

Calculating the Maximum $/t per block and Economic Destination.

CU @ 0.5
Conventional Direct feed:
• Mill - $/t
• Leach - $/t
• Waste - $/t HG - MILL

Direct feed to Grade Engineering

• Grade by Size (GS) - $/t
• Differential Blasting (DB) - $/t
• Sensor Based Sorting (SBS) - $/t
LG - LEACH
GE - SBS
Direct feed V.S Grade Engineering Feed
• Mill - $/t
• Sensor Based Sorting (SBS) - $/t
CRC ORE 14
 GE RESOURCE EVALUATION: RANKING RESPONSE & MASS PULL
Selects Highest Economic Value: $/t

0.95
0.80

CU @ 0.5 0.70
0.60

0.35
0.39
20% @ 0.95 + 80% @ 0.39 = 0.5 0.28
0.30
30% @ 0.80 + 70% @ 0.35 = 0.5

50% @ 0.70 + 50% @ 0.30 = 0.5

70% @ 0.60 + 30% @ 0.28 = 0.5

CRC ORE 15
 GE RESOURCE EVALUATION: BLOCK VALUE & DESTINATION
Mine Best Economic Destination

GE Economic Optimum
Combination Process Plant

CU @ 0.5

Leaching Pads

GE Technique
Stock
Pile
HG Stream

Grade
Engineering Plant Waste Dump

LG Stream

CRC ORE 16
 GE RESOURCE EVALUATION: CUT-OFF GRADE

Ken Lane Value and Cut-Off Grade Equations

ℎ
𝑉𝑚 = 𝑃 − 𝑘 𝑥𝑦ḡ − 𝑥ℎ − 𝑚 −
(𝑓+𝐹) 𝑪𝑶𝑮𝒎 =
𝑀 𝑃−𝐾 𝑦
(𝑓 + 𝐹)𝑥 (𝑓 + 𝐹)
𝑉ℎ = 𝑃 − 𝑘 𝑥𝑦ḡ − 𝑥ℎ − 𝑚 − (ℎ + )
𝐻 𝑪𝑶𝑮𝒉 = 𝐻
𝑃−𝑘 𝑦
(𝑓 + 𝐹)𝑥𝑦ḡ
𝑉𝑘 = 𝑃 − 𝑘 𝑥𝑦ḡ − 𝑥ℎ − 𝑚 − ℎ
𝐾 𝑪𝑶𝑮𝒌 =
(𝑓 + 𝐹)
𝑃−𝑘− 𝑦
𝐾

CRC ORE 17
 GE RESOURCE EVALUATION: VALUE CURVES & COG
VALUE CURVES AND CUT-OFF GRADES FOR GRADE ENGINEERING
15

SEC MILL SEC LCH MAX GXZ MAX DB WASTE

10

MILL

GE DB
PROFIT [$/T]

GE GS
0
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80
LEACH

-5

-10
CU GRADE [%]

Cut-Off 0.10 0.15 0.24 0.36 0.50 0.62

CRC ORE 18 Grades Cu% Cu% Cu% Cu% Cu% Cu%
 GE RESOURCE EVALUATION: ECONOMIC BLOCK MODEL

GE % ECONOMIC AMENABILITY OF THE DEPOSIT

GE GE GE GE
CU 0.7 CU 0.25 CU 0.13 MILL
CU 1.0 CU 0.20 WASTE
CU 0.10

GE GE GE
CU 1.7 CU
LEACH
0.27 MILL
CU 1.3 CU 0.27 WASTE
CU 0.15 LEACH
CU 0.25

CRC ORE 19
 GE RESOURCE EVALUATION: BEST BLOCK VALUE

CRC ORE 20
 GE RESOURCE EVALUATION: BEST BLOCK VALUE

CRC ORE 21
 GE RESOURCE EVALUATION: FINAL PIT OPTIMISATION

Grade Engineered Final Pit GE Economic Block Model

?
Grade Engineering
• GE Parameters
• Pre-C Independent
Processing Destination
Base Case • Pre-C $/t
• Pre-C Recoveries
• Ranking Responses

CRC ORE 22
 GE RESOURCE EVALUATION: FINAL PIT OPTIMISATION
BASE CASE - CONSTRAINED GRADE BY SIZE - CONSTRAINED DIFFERENTIAL BLASTING CONSTRAINED

1% Value, 2% Material Movements 4% Value, 5% Material Movements

BASE CASE - UNCONSTRAINED GRADE BY SIZE - UNCONSTRAINED DIFFERENTIAL BLASTING UNCONSTRAINED

73% Value, 340% Material Movement 2% Value, 3% Material Movements 4.5% Value, 6% Material Movements
Compared to BC Constrained. Compared to BC Unconstrained. Compared to BC Unconstrained.

CRC ORE 23
 GE RESOURCE EVALUATION: PUSHBACK SEQUENCING & DESIGN

?
Push Backs - Base Case Push Backs – Grade Engineering

CRC ORE 24
 PUSHBACK SEQUENCING & DESIGN: EXAMPLE
GRADE BY SIZE - CONSTRAINED DIFFERENTIAL BLASTING CONSTRAINED

1% Value, 2% Material Movements 4% Value, 5% Material Movements

CRC ORE 25
 PRODUCTION SCHEDULE AND NPV OPTIMISATION
ND Natural Deportment
DB Differential Blasting
SBS Sensor Based Sorting
160 1.5

140
140 1.3
120
120 1.1
100
100
Tonnes 0.9 Cu %
000 8080
0.7
6060 G G G
G
G G
G E G G G E G G E G 0.5
4040 G G E E G G E
E E E E E G E E
G E E E E E 0.3
2020 E

00 0.1
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

HG GE HG CASH FLOW GE CASH FLOW

CRC ORE 26
 GE PRODUCTION SCHEDULE OPTIMISATION – EXAMPLE MINE PLAN
GE Mine Plan
180 3.5

160
3.0
140
Direct Feed to Waste Waste to Dump
2.5
120 Ore to Stock
Ore to Leach from Stocks

Strip Ratio
100 2.0
Ore to Leach from Mine
Direct Feed to Dump Leach Ore to GE from Stocks
80 1.5
Ore to GE from Mine
60 Material to Grade Engineering Plant 1.0 Ore to Mill from Stocks
40 Ore to Mill from Mine

20 Direct Feed to Mill 0.5 Strip Ratio

0 0.0
2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037
Results:
 20% of Total Material Movement goes to GE Plant.
 14% of Mill Feed comes from Grade Engineering Plant.
CRC ORE 28
 GE PRODUCTION SCHEDULE OPTIMISATION: EXAMPLE MILL
Feed to Mill
70 1.0

60
Ore to Mill from Stocks 0.9

0.8

50
Material from Grade Engineering Plant
0.7

0.6

CuT Grade [%]

40
Mass [Mt]

0.5

30
0.4

20 0.3

Direct Feed to Mill 0.2

10
0.1

0 0.0

#N/A

#N/A

#N/A
2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037
Ore to Mill from Mine Ore to Mill from GE Ore to Mill from Stocks CuT Grade

Results:

 14% of Mill Feed comes from Grade Engineering Plant.

 Produced 121 CuKt, and 1 MoKt more of metal in concentrate than the Base Case.
 However, the GE MP produced 39 CuKt less in metal cathode.
CRC ORE 29
GE PRODUCTION SCHEDULE OPTIMISATION: EXAMPLE GE PLANT
GradeMaterial
Engineering Plant
Feed to Grade - Capacity:
Engineering Plant 35 Mtpa
40 1

0.9
35

0.8
30
0.7

0.61 Cu%
MIllion Tonnes

25
0.6

20 GE TO WASTE DUMP 0.5

0.37 Cu%
0.4
15

Dowgraded Material to Dump Leach GE TO DUMP LEACH 0.3

0.32 Cu%
10 GE FEED
0.2

5
GE TO MILL 0.1
0.19 Cu%
0
2016 2017 2018 2019 2020 2021
Upgraded Material to Mill
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
0

Total Ore to Mill from GE Total Ore to Dump Leach from GE Total Wast to Waste Dump from GE
Ore to Mill from GE CuT Grade (%) Ore to Mill from GE CuT Grade (%) Waste to Waste Dump from GE CuT Grade (%)

Results:Total Ore to GE CuT Grade (%)

 Feed Average Grade: 0.37 Cu%

 Upgraded to Mill at 0.61 Cu% - 29% of GE Material
 Marginal to Dump Leach at 0.32 Cu% - 48% of GE Material
 Downgraded to Waste Dump at 0.19 Cu% - 23% of GE Material
CRC ORE 30
 GE PRODUCTION SCHEDULE OPTIMISATION: MASS PULL PLAN (GS)
Grade Engineering GS - Mass Pull Schedule
20,000 0.90

18,000
Mass Pull 50% 0.80

16,000
0.70

14,000
Mass Pull 40% 0.60
12,000
0.50
10,000 Mass Pull 30%
0.40
8,000
0.30
6,000

4,000 Mass Pull 20% 0.20

2,000 0.10

- 0.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

Total GS_2 Total GS_3 Total GS_4

Total GS_5 Total Ore to GE CuT Grade (%) CuT Grade (%) at GS_2
CuT Grade (%) at GS_3 CuT Grade (%) at GS_4 CuT Grade (%) at GS_4

Comments:
 Grade by Size Only
 GS 20% Mass Pull is the Main Mass Pull Across the LOM
CRC ORE 31  Mass Pull Increases throughout the LOM
 Grade Engineering SS- Mass Pull Schedule
35,000 0.90

0.80
30,000

0.70
25,000 Mass Pull 50%
0.60

20,000 0.50

15,000 Mass Pull 40% 0.40

0.30
10,000
0.20

5,000
Mass Pull 30%
0.10

- 0.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

Total SS_2 Total SS_3 Total SS_4

Total SS_5 Total Ore to GE CuT Grade (%) CuT Grade (%) at SS_2
CuT Grade (%) at SS_3 CuT Grade (%) at SS_4 CuT Grade (%) at SS_5

Comments:
 Sensor Based Sorting Only
 GS 30% Mass Pull is the Main Mass Pull Across the LOM
CRC ORE 32  Mass Pull Increases throughout the LOM
 GE PRODUCTION SCHEDULE OPTIMISATION: NPV VS METAL PRICE

Base Case - NPV Sensitivity to Metal Prices

12,000 9% 10%
8%
10,000
6%
4% 3%
4%
8,000
2%
6,000 0%
9,880 10,182 -2%
4,000
6,801 7,042 -4%
-6%
2,000
2,174 2,362 -8%
0 -10%
2.30 2.87 3.25

BASE CASE DIFFERENTIAL BLASTING DELTA

 When Cu Prices Drop GE adds resilience to a Mining project.

CRC ORE 33
 STRATEGIC MINE PLANNING: CONCLUSIONS
 GE Full Mine Planning Optimisation aids to reach and improve Strategic Goals.
 NPV Improvement of 3% to 15% achieved through GE fully optimised mine plans
 Head Grade Improvement from 3% to 15%, per year and for LOM.
 Improvement in Metal in Cu concentrate
 Improvement in Metal in Mo concentrate
 Reduction in Metal in Cu cathode
 When Cu Prices Drop GE adds resilience to the project.

Grade Engineering Amenability

 Every Deposit is Different
 Every Deposit will have different heterogeneity, grade variability.
 Every Project will be amenable to different Grade Engineering Techniques and at
different scales.

CRC ORE 34
 invent

Carlos Espejel introduce

Mine Planning
Engineer
C.Espejel@crcore.org.au
Strategic Mine Planning
www.crcore.org.au