An Introduction to

Underground Mining

On the Rocks, December 6, 2012

Ron Stewart
Introduction

Challenge Mine economics - and therefore

investment success - is a derivative
of geology, engineering, metallurgy,
management markets and
management,
jurisdiction.

Our Intent An introduction to underground

mining - an overview of mining
methods, selection criteria and
what to consider when you are
reading a technical report or
visiting a mine

Source: www.gedc.com

December 6, 2012 2
Underground Vs. Open Pit

Underground Vs. Open Pit

Deposits Relatively small, high grade Relatively large, low grade

or Deep with sub-vertical ore zone or Shallow, with sub-horizontal ore
zone

Geology Structurally controlled veins and Lithology controlled stockworks,

stockworks
breccias disseminated zones.

Resources / Reserves Generally difficult or not cost Generally cost effective to establish
effective to p
prove up
p large
g resources / 10 to 15 y
year resource / reserve life
reserves

Productivity 500 to 8,000 tonnes per day 5,000 to 100,000 tonnes per day

Environmental Generally easier to permit, limited Large footprint from pit, waste
footprint. Relatively cheap to reclaim dumps and tailings, relatively
expensive to reclaim

Mine Life To >100 years 10 to 25 years, rarely longer

December 6, 2012 3
 Underground Vs. Open Pit Mining

In 2011, only 117 gold mines reported >100,000 oz of gold production

31% or 11.5
11 5 million ounces from 42 underground mines

100,000 to 250,000 to 500,000 to

>1,000,000 oz/a Totals
250,000 oz/a 500,000 oz/a 1,000,000 oz/a
No. Ounces No. Ounces No. Ounces No. Ounces No. Ounces
Undergound 27 4,105,528 10 2,868,291 4 3,408,803 1 1,100,000 42 11,482,622
Open Pit 42 6,710,672 19 6,349,474 10 6,820,255 4 6,179,000 75 26,059,401

15%
7.3 M oz
10.2 M oz
9.2 M oz 33%
10 8 M oz
10.8 31%
38%
62% 69% 67% 85%

Source: Metals Economics

December 6, 2012 4
 Glossary of Underground Terms
Adit Horizontal mine entrance
Back The ceiling in an underground tunnel
Brow Overhead rock at an Adit or Drawpoint
Crosscut A horizontal drive through an ore body
Drawpoint Point at which ore is extracted from a stope

Drift A horizontal drive p

parallel to or along
g an ore
body
Grizzly A screen or grate above a loading pocket or
ore pass to catch oversized rocks
Jumbo A mobile drill used in driving tunnels
Loading Pocket Rock storage compartment
Manway A dedicated underground opening for
personnel
Ore pass A vertical or inclined tunnel for ore
transport
Raise bore A large drill used for vertical or inclined
tunnel drilling
Round A single blast in a drift or crosscut
Scoop Tram (LHD) Underground loader (Load - Haul - Dump)
Skip Shaft bucket for hoisting rock

December 6, 2012 5
Mine Method Selection Criteria

…is
is based on:

Geometry Depth, shape, thickness, dip, plunge

Rock Quality Ore zone and host rock competency (structures, stress,
stability)

Ore Variability Ore uniformity

uniformity, continuity
continuity, grade distribution

Economics Ore recovery, ore value & mine recovery (losses),

productivity, equipment selection, capital & operating costs,
ore value
value, safety

December 6, 2012 6
Geological & Mechanical Selection Criteria
of Mining Methods

December 6, 2012 7
Underground Stoping Methods

Room and Pillar Flat to Shallow dip, competent ground conditions

Longwall Flat to shallow dip, narrow seam ore body

Longhole or Medium to Steep dip, competent ground conditions and

Sublevel generally regular ore
ore-waste
waste boundaries

Shrinkage Medium to steep dip, variable ground conditions and variable

ore-waste boundaries. (Delay in delivering ore)

Cut and Fill Medium to steep dip, variable ground conditions and variable
ore-waste boundaries provides maximum selectivity.

Block Cave Steep dip, massive ore body. Limited to no selectivity.

Extensive development required

December 6, 2012 8
 Stope Design Criteria and Grade Control

Dilution and Ore Recovery Factors

Dilution Factor (%) Recovery Factor (%) Grade Control

Room and Pillar 5 - 15 90 Face mapping & sampling

L
Longwall
ll 5 - 25 85 F
Face mapping
i & sampling
li
Longhole or Sublevel 15 - 20 85 Development drift mapping
& sampling with definition
drilling

Shrinkage 10 90 Face mapping & sampling

Cut and Fill 5 - 10 85 Face mapping & sampling
Block Cave 15 95 Drilling Only

December 6, 2012 9
Design Vs. Actual Dilution & Ore Loss

Unplanned
p Dilution

Ore Loss

Planned Dilution

Ore Loss

Designed Stope

Actual Stope

December 6, 2012 10
Development Heading Dilution

Ore in Reserve
Block Model
Planned Dilution

Actual Drift

December 6, 2012 11
Underground Productivity Rates

Tonnes per man-shift

Normal High

Room and Pillar 30 - 50 50 - 70

Longwall 5 - 10 10 - 15
Longhole or Sublevel 15 - 30 30 - 40
Shrinkage 5 - 10 10 - 15

Cut and Fill 10 - 20 30 - 40

Block Cave 15 - 40 40 - 50

December 6, 2012 12
Mobile Underground Mining Equipment

Scoop Tram Haulage Truck

Two-Boom
B Jumbo
b Raise Bore

December 6, 2012 13
Block Cave Stoping

Sub-Level Caving

Production Rate >7,500 tpd

Mining Cost Per Tonne $8.00 to $15.00/tonne

Development Capital High development capital

Sustaining Capital $16,000/tonne of throughput

Cut-Off Grade Low

Oth C
Other Considerations
id ti Hi h upfront
High f t capital
it l costt
Massive or disseminated ore body
Rock must break and feed
Surface subsistence must be
allowed
ll d

Examples New Afton

Source: Techniques in Underground Mining, SME

December 6, 2012 14
Room and Pillar

Room and Pillar Mining

Production Rate 500 to 35,000 tpd

Mining Cost Per Tonne $10 - $30/tonne

Development Capital Low Development Capital

Cut-Off Grade Low

Other Considerations Flat or shallow dipping ore body

with limited thickness
Ground conditions - especially the
back must be competent

Examples No known gold examples, common in

coal and potash mining
Source: Techniques in Underground Mining, SME

December 6, 2012 15
 Longwall Stoping

Inclined Longwall stoping

Production Rate 500 to 5

5,000tpd
000tpd

Mining Cost Per Tonne $150/tonne

Development Capital High development capital

Cut-Off Grade High

Other Considerations Thin ore zones (bedded or tabular)

with regular and parallel ore
contacts
Variable ground conditions
supported by fill
In South Africa ore is mined by
jackleg, small rounds are blasted
and material is scraped down to
draw points

Examples Witwatersrand reef ore bodies

Source: Techniques in Underground Mining, SME

December 6, 2012 16
Longhole (Sublevel) Stoping
Sublevel Stoping

Production Rate 500 to 5,000 tpd

Mining Cost Per Tonne $40 to $150/tonne

Development Capital Modest

Cut Off Grade

Cut-Off Low

Other Considerations Most common method for high

productivity, low cost gold mining.
Ore bodies have vertical to steep
dip, can vary in width down to less
than 1.0m, but generally require
regular ore-waste contacts and
competent ground

Examples Young-Davidson, LaRonde, Kupol,

Jacobina, El Penon, Musselwhite,
p
Chelopech

Source: Techniques in Underground Mining, SME

December 6, 2012 17
Endeavour Silver: Bolañitos –
Longhole Mining Method

Longhole drilling up holes in a

stope. Note remote operation
of the drill improves safety

Mucking a stope remotely with

a scoop (LHD) at a draw-point

Source: Endeavour Silver (EDR-T, BUY Target C$11.00/sh)

December 6, 2012 18
Stoping at Björkdal Mine, Sweden

Note the narrow vein in the 2.5m wide stope with sill Cable bolted back shows
drift back drift highlighted at the base good dilution control

Source: Elgin Mining Inc, (ELG-T, NOT RATED)

December 6, 2012 19
Mining – Narrow Blasthole Stope

December 6, 2012 20
Cut and Fill
Non-captive Cut & Fill Stoping
Production Rate 200 to 2000 tpd

Mining Cost Per Tonne $100 to $200/tonne

Development Capital Modest

Cut-Off Grade High

Other Considerations Most common selective mining

method for high grade veins and
Source: Techniques in Underground Mining, SME
breccias with variable geometries
and or poor ground.
ground
Classic cut-and fill used jack-leg
mining in captive stopes
Now far more common for
mechanized cut and fill with small
jumbos and scoops

Examples Buckhorn, Rice Lake, Macassa, El

Cubo

Source: Endeavour Silver (EDR-T, BUY Target C$11.00/sh)

December 6, 2012 21
Cut-and-Fill Advance at Endeavour’s El Cubo Mine

And-Bx
Jumbo advance on wider veins
and access drifts. Increased
VEIN
productivity and reduced costs
And-Bx

ORE

Jackleg drilling on narrow and

irregular veins increases
selectivity reduces dilution –
selectivity,
but is slower and more labour
intensive

Source: Endeavour Silver (EDR-T, BUY Target C$11.00/sh)

December 6, 2012 22
Jackleg Miner In a Cut & Fill Stope

Source: San Gold Corporation (SGR-T, BUY Target C$1.80/sh)

December 6, 2012 23
Scaling a Heading In a Cut & Fill Stope

Source: San Gold Corporation (SGR-T, BUY Target C$1.80/sh)

December 6, 2012 24
Mining – Narrow Cut & Fill Stope

December 6, 2012 25
Shrinkage
Non-captive Cut & Fill Stoping

Production Rate 100 to 2,000 tpd

Mining Cost Per Tonne $125 to $200/tonne

Development Capital Relatively High Capital

Cut-Off Grade High

Other Considerations Steep dip and relatively competent

rock with regular ore - waste
b
boundaries
d Source: Techniques in Underground Mining, SME
Delayed ore mining as ore is used as
a platform for drilling

p
Examples Rarely
y used - Guanajuato
j ,
Francouer

Source: Endeavour Silver (EDR-T, BUY Target C$11.00/sh)

December 6, 2012 26
Mucking & Haulage

Scoop (LHD) Mucking a Stope

Ore transfer to a Haul Truck (in cases

where an ore pass system is used, scoops haul
ore to dump points underground)

Haul Truck to Surface (as a general rule

ore can be trucked as much as 300 to 400m
vertically)

Source: Endeavour Silver (EDR-T, BUY Target C$11.00/sh) December 6, 2012 27

Ore Handling and Ancillary Services
Air Cooling System at LaRonde
Main Ingress / Egress
• Shaft, cage & skip
• R
Ramp
Ore Handling Systems
• Ore passes, shoots
• C
Conveyance
Ground Control
• Bolting
• S
Screening
i Screening and Bolting at Lapa
• Shotcrete
Ventilation
• Fans
• Heating / Cooling
Water
• Collection
• Pumping
Source: Agnico-Eagle (AEM-T, BUY Target C$70.00/sh)
December 6, 2012 28
What We Look For When We Go Underground

1. Focus on employee safety, hazards or safety risks

2. Housekeeping specifically at shaft stations and work faces
3. General structural geology (faults, joints, slips, orientation and
frequency of structures)
4. Ground conditions (Areas screened, bolted and reinforced as
well as quantity of loose rock behind mesh)
5. State of ramp, haulage drifts – (how well maintained they are)
6. Water ingress (amount, collection, ponding)
7. Air quality (dust level, smoke, air temperature)
8
8. General state of the equipment and age
age, tire wear and cuts
9. Rock fragmentation – oversize in scoops, trucks or on grizzly
10. Mood and engagement of the workforce

December 6, 2012 29
An Introduction to Underground Mining

Remember tag-in before you go underground

T k your time
Take ti
Always make sure equipment operators can
see you.
Don’t shine your
D y light
g directly
y at others
Stay safe, sure footed and alert

Source: Colossus Minerals (CSI-T, BUY Target C$8.00/sh)

December 6, 2012 30