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pit. which encloses the small pit, and the process continues until a final

pit is reached. A mining sequence is obtained from a series of nested

pits. Figure 2 shows, in two dimensions. one possible series of nested pits

composed of 6 pits. Two possible mining sequences, Sequence A and

Sequence B, each formed by the nested pits shown in Figure 2, are given

in Table 1. Neither of these two sequences includes Pit 6 which is

assumed to contain low grade ore. Therefore, including Pit 6 in the mining

sequence would generate an economically inferior plan since the cost of

mining Pit 6 would be higher than the revenue it would generate.

3. A NEW METHOD

methods has been developed in the Department of Mining Engineering at

the Southern Illinois University. Through this method, the optimum mining

sequence, ore and waste productions, ultimate pit limits and mine life

can be simultaneously obtained. The optimum milling cutoff grade can also

be determined by a systematic search using the developed method.

The model consists of three major phases.

In the first phase, a block

model is formed based on the surface

boundaries of the deposit.

A

bounding algorithm is then applied to this block model to form the largest

feasible pit so that the computation of the second phase can be started

with a pit rather than a prismatic block model (Wang and Sevim, 1993).

In the second phase, a spectrum of milling cutoff grades is considered,

and for each cutoff grade a series of nested pits are generated inside the

largest feasible pit. These pits are generated in such a way that each

pit in the series contain the highest amount of metal among all possible

pits of the same size , and that the increment from one pit to the next

is uniform. The pits in the series become best pushback candidates in a

period. This method of pit generation uses the metal content reported for

each block rather than the misleading dollar value.

Hence, it avoids

making any assumptions on the production rate. In the third phase , all

possible sequences of pushback are formed with the generated pits, and

these sequences are economically evaluated using the NPV method. A

search is then conducted among all sequences to find the best sequence for

the given milling cutoff grade. The process is repeated for every cutoff

grade in the spectrum. The best sequences for all cutoff grades are then

compared to find the final best sequence. Once the final best sequence is

obtained, the cutoff grade, ore and waste production rates, ultimate pit

limits, and mine life emerge as a natural consequence of the evaluation.

The above described process

network shown in Figure 4. It

cutoff grade in the spectrum,

being the inner-most and the

is assumed that, for one of the milling

5 maximum-metal pits were generated; Pl

smallest, and P5 the outer-most and the

pts are uniform throughout the series and equivalent to the smallest

possible production rate that the engineer envisions. The network indicates

that one may decide to mine any size pit in the first year. For example, if

P5 is mined in the first year, the end of mine life will be reached in one

year. On the other hand, if Pl is mined in the first year, P2, or P3, or P4,

or P5 may be reached in the second year by a pushback from P l. The

other connections in the network can be explained the same way. Each

path , formed by pit sequences, starting at time O and ending in one of

the pits in any year constitutes a feasible production plan. The net cash

flow for each pushback along a path is calculated and discounted back to

time O to obtain the NPV of the path.

The optimum path

be 0-Pl-P3-P4 as

in

Figure

4 is assumed

to

indicated by the thick line. The implication of this path is that the

optimum mine life is three years and the optimum UPL are defined by P4.

The optimum mining sequence reveals that Pl should be mined in the first

year, and that P3 should be reached by a pushback from Pl in the second

year, and finally P4 representing the ultimate pit should be reached in the

third year by a pushback from P3. lt is noted that, P5 is not selected as

the ultimate pit since mining the pushback from P4 to P5 would have

lowered the NPV of the project. The optimum production rates of ore and

waste are also obtained simultaneously since the ore and waste contents

of each pushback are known for the selected cutoff grade.

As seen in this simplified example, no mplicit assumption on production

rate was made to assign dollar values to the blocks, no mining or milling

production ratos were targeted, and the UPL are not determined

independent of the mining sequence.

4. GENERATION OF NESTED MAXIMUM-METAL PITS

The nested pits generated in this model are the best candidates for

mine sequencing because they are maximum-metal pits. A maximum-metal

pit , composed of M blocks, is the pit that contains more metal than any

other pit of the same size. The idea of generating maximum-metal pits stems

from the objective of maximizing the NPV of the project which can only

be possible if the pits scheduled to be mined contain the highest possible

metal. The algorithm is based on the idea that, finding the maximummetal pit of M blocks, out of a total of M + N blocks, is equivalent to

eliminating the N blocks that contains the least-metal quantity, provided

that the geometric constraints of the pit are maintained.

Before the

process starts, the top and bottom levels of each block column in the

block model are defined. The algorithm considers the first block column

and starts building downward cones from the bottom up as shown in

Figure 5 on a 2-dimensional block model. Each time, the upper block of the

column becomes the apex of the next larger downward cone. A downward

cone template is used for this purpose. The reason to consider a cone is

that, the shape of the pit can be approximated by an upward cone at all

times due to the fact that as mining progresses downward from the

surface the walls of the pit must be below certain angle for safe operation.

In this algorithm, a downward cone is used because we are starting from

the bottom and trying to exclude those blocks with low grades, rather

than starting from the top and including high grade blocks. It is noted,

however, that downward cone still keeps the safe slope as the pit

progresses downward. The average ore grade of each cone is calculated

and the cone is saved in an array where all the cones are ranked in

ascending order of their average ore grade. Downward cone building along

a column ends when the number of blocks in the last built cone exceeds

the predefined N incremental blocks. Then, the algorithm moves to the

next column and continues in building additional cones. The process is

repeated until ali the columns are evaluated. At the end of a round of

evaluation, the union of (k) cones containing the predefined N incremental

blocks and having the lowest possible average ore grade is excluded from

the pit block model. Let us assume that the block model shown in

Figure 5 contains M + N blocks and that the union of the cones that are

arbitrarily marked as Cone 5 and Cone 11 contains the N blocks with the

lowest average grade. When these cones are excluded from the block

model, the remaining is a pit of M blocks with maximum metal content.

All other pits of M blocks contain lesser metal. In Figure 5, the M + N

block maximum-metal pit

is shown by the dashed lines, whereas the M block maximum-metal pit

is shown by the thick solid lines,

After each round of evaluation, the bottom blocks of each column are

updated and a new round starts for finding the next smaller maximum-metal

pit. The series of pits obtained through the pit-generation algorithm is then

used to form sequences as portrayed in Figure 4. The details of the

algorithm were published elsewhere (Wang and Sevim, 1995).

The above pit-generating algorithm is heuristic, and, as such, it does

not guarantee the truly maximum-met.al pits. The parameterization

technique, which is essentially the Lagrangian multiplier technique, may be

used to obtain the truly

maximum-metal pits

( Coleou,

1989).

Parameterization

transforms a constrained optimization problem to

an

unconstrained one.

In maximum-metal

pit

generation

using

parameterization, the grade of each block in the block model is reduced

by an amount equal to , and the unconstrained problem is solved using

a method such as the maximum closure in graph theory or maximum flow

in network theory. The size of the maximum-met.al pit increases as the

value of ,decreases. The outcome is a series of truly maximum-metal pits.

However, the series gencrated by parameterization technique may have a

A gap is a large size difference between two

adjacent pits of the series, and it may occur more than once in the

series. Gaps are inherent in the Lagrangian multiplier technique (Everett,

1963). If these pits were used to devise a production schedule, the gaps

would inflict serious problems. In general, a series of pits with gaps of H

blocks cannot be used in devising a mining sequence if the targeted

production per period is smaller than H blocks. Besides the gap, the

series generated by the parameterization method may not have a uniform

number of incremental blocks between adjacent pits in the series. The

uniformity is essential in devising a production schedule that does not

fluctuate significantly during the life of the mine.

Using an actual ore deposit, it is demonstrated that the above described

heuristic algorithm generates not only nested maximum-metal pits that are

equivalent to those generated by the parameterization method, but also,

the pits are uniformly incremented without any gaps in the series (Wang

and Sevim, 1995). It is, however, necessary to conduct a few more

comparative analyses before making the above statement with a certain

degree of confidence.

5. A DYNAMIC PROGRAMMING BASED SEARCH ALGORITHM

The search for the optimum path in the above network can be viewed as

a sequential decision making problem which can be conveniently formulated

by using the dynamic programming (DP) technique. In this formulation, the

stages can be defined by the years and the states by the pits. An important

requirement in DP formulation, however , is the satisfaction of the state

property which dictates that the value of an are must be calculated

independent of the decisions made in the previous ares. The value of an

are in the above network is the Net Cash Flow (NCF) generated by

mining the pushback from one pit. to the next. An are represents the

activities in mining a pushback. It is unfortunate that the capital investment at

an are is dependent upon the capital investment that has already been

committed in previous years, and capital investment is directly related to

production decision.

For example, referring to the network of Figure 4,

Jet. us assume that the pushback from P4 to P5 requires 4 units of mining

equipment, and that pushbacks from P3 to P4 and from P2 to P4 require

2 and 3 units of equipment, respectively. lf P4 were reached from P2, then

only one unit of equipment would be acquired in Are 4-5. On the other

hand, if P4 were reached from P3, then two units would be acquired in

Are 4-5. It is clear that the capital cost in Are 4-5 is dependent on the

investment that have already Leen made in previous stages.

The

implication of this is that , there is not a single are connecting P4 to P5

as portrayed in Figure 4, but rather there are as many ares as the

paths reaching P4. In other words, there are 3 ares connecting P4 to P5

because there are 3 paths, namely, Paths 0145, 0245, and 0345, reaching

where the state is defined by a single parameter (the size or the ID of

the maximum-metal pit) will not be suitable. The information on capital

investment along each path must be made readily available to Are 4-5 so

that the capital investment at Are 4-5 can be figured out and that its NCF

can be calculated without visiting the previous ares of the path. The

application of DP can only be possible if this information is provided to Are

4-5. Otherwise, the search for the best path becomes an exhaustive

search, and in an actual case with billions of paths the problem becomes

unsolvable.

A successful DP application was made possible by a modified formulation

where the states of the network were defined by two variables; the first

one is the maximum-metal pit and the second one is the equipment

configuration. The equipment configuration is a record that contains the

number of equipment units and their ages. Along each path, all the

changes in equipment status such as purchasing new equipment, replacing

old equipment, and storing extra equipment are recorded in the equipment

configuration of that path and used at the beginning of each are for

determining the equipment requirement of that are.

lt is important to note that the equipment configuration of some of the

paths may be similar. We take advantage of the DP technique when these

similarities occur. To illustrate the DP based search algorithm, the encircled

section of Figure 4 is redrawn in Figure 6 whereby all the distinct paths are

shown. There are 19 distinct paths in this section; 3 paths in the first

stage, 6 in the second, and 10 in the third. The paths in the first stage

are composed of single ares, whereas those in the second and third

stages are composed of 2 and 3 ares, respectively. The equipment

configurations of only two paths reaching the third stage are shown in

this figure. It is assumed that to mine Pit. PI one unit of equipment will be

needed. Similarly, two units will be needed to mine P2, and three units to

mine P3, etc .. Hencc, Path 01 has one unit of equipment that will be one

year old when Pl is mined out (1(1)]. The NPV at that time is calculated

to be $-23.3. The next path is Path 013, and the pushback from Pl to

P3 requires 2 units of equipment. Since we already have one unit, which will

be two years old at the end of year 2 [1(2)), we need one more unit [1(1)].

The NPV at that time is $9.6. The next path is 0134 where only one

unit is needed to mine the pushback frorn P3 to P4. The unit bought in

the second period is then stored as one year old unit [l ( 1 )] , the other

unit will turn to three (1 (3)), and the NPV is

$24.4. When similar logic is followed for Path 0234, it can be found that

the ares connecting

P3 to P4 have the same equipment configuration. In other words, these

two ares, by ending up in the same pit and with the same equipment

configuration, generare an identical state. The NPV of Path 0234 is $27.6

and is higher than that of Path 0134, thus the next are should

be

extended from Path 0234 rather than Path 0134. This reasoning can be

observed from paths

02345 and 01345; both paths have the same are extension, Are 4-5. The

cash flow generated at this extension is the same for both paths since it

depends on the incremental material (waste and ore) to he mined in Are

4-5 and the equipment configuration at the beginning of the are. Therefore,

the DP logic will eliminate the economically inferior Path 0134 and carry

forward the inforrnation on the economically superior Path 0234. As seen

in this figure, there are two more identical states in Stage 3. Hence, the

nurnber of distinct states at Stage 3 decreases from

10 to 7. As a consequence of this

significantly reduces after

Stage 3.

After all the paths are evaluated, the algorithm compares the NPVs of the

paths and finds the highest NPV. The state with the highest NPV

determines the last pit along the path. Then, starting from this last pit,

thc algorithm traces back the ares that make up the path with the

optima! pit sequence. It is emphasized th at a NPV exists for every state

in the network, and that the NPV may decrease from one state to the

next along a path if mining activity at the are connecting those states does

not provide a positive incremental discounted NCF. The specifics of the DP

algorithm were published elsewhere (Sevim and Lei, 1994).

6. A CASE STUDY

A case study for a midsize actual gold deposit was conducted using the

developed model. The block model was composed of 43, 000 blocks of 50 x

100 x 40 feet. Four series of maximum-metal pits, corresponding to the

cutoff grades of 0.005, 0.025, 0.05 and 0.01 oz/ton, were generated. The

number of pits in the series were 57, 57, 55, and 50, respectively. The

NPVs of the best sequence corresponding to each cutoff grade are shown

in Figure 7. As seen in this figure, the sequence with the highest NPV was

found to be $39.36 and it corresponded to the cutoff grade of 0.025 oz/ton.

The optimum mining sequence was formed by pits 3-6-9-12-15-17-20-23-2629-32, indicating an optimum life of 11 years. Natur ally, the ultimate pit

limits were defined by the last pit in thc sequence, that is Pit 32. Mining

the pits larger than Pit 32 decreased the NPV of the project. The ore and

waste productions resulting from the optimum mining sequence are shown in

Figure 8.

by 57 pits would have required the evaluation of 1.28 x 1011

sequences. Such an evaluation would be computationally impossible. The

actual sequences evaluated and searched by the DP algorithm were

approximately 1O million.

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