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Mining Explained Glossary Mining 101 Mining Finance Guide

Mining Explained Glossary Mining 101 Mining Finance Guide



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Published by: Renata on Feb 05, 2009
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Mining Explained
THE total number of mines in the world is huge. However, the exact figure depends on how a mineis defined. If small-scale mines are excluded (of which there are 8,300 in China alone) and onlyindustrial-scale operations are counted, there are some 2,500 metal-producing mines.The average life of these mines varies dramatically a gold mine averages some eight yearswhereas a copper mine can soldier on for close to 30 years. In South Africa there are severaldiamond mines that have produced for 50 years, and are expected to produce for another 50years.No reliable figures exist for industrial minerals and aggregate quarries. However, in the US, thereare some 100 metal mines, 900 mines and quarries producing industrial minerals, and 3,320quarries are producing crushed rock.Assuming that there is a similar relationship elsewhere, there would be some 25,000 mines in theworld producing industrial minerals, and almost 100,000 quarries producing aggregates forconstruction purposes.The existence of mineable deposits and their frequency and abundance in nature, correspondsclosely with the chemical composition of the earth's crust.Silver, for instance, occurs in nature 19 times as frequently as gold. If we imagine a pyramid withhigh grade at the apex and low grade at the base, then we can easily see that as we lower thegrade that is economic to mine, the available reserve tonnages goes up.We should not be surprised to find the world is awash in low-grade copper deposits that alsoinclude small amounts of gold and silver.The fact is that mineable mineral deposits are few and far between, and still fewer people willbring a deposit into profitable production. The chances of bringing a raw prospect into productionhave been estimated at 1 in 5,000-10,000. Some deposits eluded recognition for several decades,despite intermittent exploration of the same showings by several companies and, in many cases,claims were allowed to lapse.There are many instances in which prospectors have revived old prospects and induced companiesto drill just one more time before a discovery was made.Resource development in the 20th century has been marked by the growth of large-scale miningand technological development that enabled the use of economies of scale.Back in 1887 the development of the cyanide process made possible the mining and recovery of lower-grade gold-bearing ores and caused South Africa to overtake the US as the world's leadinggold-producing nation.Over the next 100 years, technology permitted low-gold grade ores to be mined ever morecheaply. Indeed, the rise in metals consumption during the past hundred years was been littleshort of awesome.Most dramatically, the mined output of bauxite (the raw material for alumina, and hence the newmetal aluminium) soared from barely 100,000 t/y (tonnes per year) in 1900 to over 125 Mt/y(million tonnes per year) by the end of the 20th century.The rate of copper mined between 1900 and 1999 grew from around 0.5 Mt/y to 12 Mt/y. The risein precious metals output has also been noteworthy, with gold production, for example, risingduring the 100-year period from 400 t/y (12.9 Moz) to 2,500 t/y (80.4 Moz).The total volume of ore produced globally is almost 17,000 Mt, excluding sand and gravel. Metalsaccount for barely one quarter of this amount, while crushed rock (mainly limestone) is by far thedominating commodity (by volume), accounting for some 7,000 Mt/y (40% of the total).
This is not to suggest that we are running out of metals just yet. Already-identified ore reserves,as a multiple of recent annual production rates, represent almost 200 years for bauxite, 30 yearsfor copper and 20 years for gold.Few mining companies have the financial resources to delineate ore reserves too far into thefuture. Potash Corp of Saskatchewan is an exception, its mine reserves (at current productionrates) are sufficient for 200 years; as close to an annuity for shareholders as it is possible to get.As a result, most of the world's store of metals and minerals remain undiscovered. Moreover, as(or rather, when) the world's reserves of a particular commodity become depleted, the price willinevitably rise (unless there is a readily available substitute). This, in turn, will make lower-gradeore economic, boosting the available reserves.Complicating the issue of scarcity is to what extent the extracted metal or mineral is actuallyconsumed. With modern technology (and the increased value of the raw material) we are able torecover commodities that have already been used.This recycling is of increasing importance in the supply/demand balance of many metals.Mined metals and minerals (excluding oil and gas) have an annual value of some US$350 billion,split, roughly equally, between coal, metals and aggregates/industrial minerals.
Mining GlossaryAdit
- an almost horizontal entrance to a mine.
a compound of two or more metals.
deposit of sedimentary material laid down in river beds, lakes, flood plains or at thebase of mountain slopes.
a chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained.
Assay map
plan view of an area indicating assay values and locations of all samples taken on theproperty.
Assessment work
the amount of work specified under mining law that must be performed eachyear in order to retain legal control of mining claims.
waste material used to fill the void created by mining.
Back sample
rock samples collected from an excavated area for the purpose of determininggrade.
Base metal
this is, strictly, the oxide form of any metal but is commonly referred to as being thenon-precious metals that are traded on the London Metal Exchange.
Call factor
the fraction of an ore reserve that is successfully mined.
the unit of weight for gemstones (one carat weighs 200 mg).
Carlin type deposit
very fine grain gold. The Carlin Trend is situated in northeastern Nevada andconsists of a 60km northwest/southeast line of major gold deposits.
- carbon-in-leach process which integrates leaching and carbon-in-pulp into a single unitprocess operation.
a geological term used to describe the line or plane along which two different rock
formations meet.
- a condition in which distant delivery prices exceed spot prices, often due to the costsof storing and insuring the underlying commodity. The opposite situation is called backwardation.
Cut-off grade
The grade below which mineralisation is not included in the assessment of oreresources/reserves.
a method using a weak cyanide solution by which gold or silver grains are extractedfrom ore.
a body of rock containing a concentration of minerals.
Development drilling
drilling to establish accurate estimates of mineral reserves.
the necessary mining of waste rock, along with ore. Measured as the ratio of waste rockto the total amount of rock mined.
a horizontal underground development that follows along the length of a rock formation asopposed to a crosscut, which crosses the rock formation.
- a geologic feature that follows a zigzag fault pattern.
- engineering, procurement and construction.
- engineering, procurement and construction management.
Feasibility study
an economic study assessing whether a mineral deposit can be minedprofitably.
a dark, basic, coarse-grained igneous rock.
- clandestine prospector or miner.
- mine, claim or prospect.
Gross value
the theoretical value of ore determined by applying the assessed grade of metal(s)in the ore by the relevant current market price.
High grade
rich ore.
Induced polarisation
- a geophysical method and developed for ore exploration.
JORC code
widely accepted standard for reporting mineral resources and ore reserves establishedby the Australasian Joint Ore Reserves Committee.
Kimberlite pipe
an orebody shaped like a flute or pipe which can contain diamonds.
Laterite ore
ore occurring in the form of soil residue containing secondary oxides of metal, oftenassociated with nickel.
a chemical process for the extraction of valuable minerals from ore.
a mineral deposit in solid rock.
a mining method (common on South African gold mines and European coal mines)involving straight, and narrow, working faces.
Measured resource
a resource whose size and grade have been estimated from sampling at

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