Mi

neVal
uat
ionandEconomi
cs

Cont
ent
s
Uni
t1ScopeofMi
neVal
uat
ion 6

Obj
ectofmi
nev
aluat
ion 6

Gener
ati
ngNewPr
oject
sandPr
ospect
s 7

SomeWay
sofGener
ati
ngNewExpl
orat
ionI
deas 8

ACheck-
ListofNegat
iveAssumpt
ions 9

St
agesi
nPr
ospectExpl
orat
ion 9

Maxi
mizi
ngSuccessi
nExpl
orat
ionPr
ogr
ammes 11

PROSPECTI
NGMETHODS 13

Magnet
icSur
vey
s 16

Gr
avi
tySur
vey
s 19

Radi
omet
ri
cSur
vey
s 20

El
ect
romagnet
ic(
EM)Sur
vey
s 20

El
ect
ri
cal
Sur
vey
s 21

Hy
bri
dEl
ect
ri
cal
andMagnet
icSur
vey
s 22

Soi
lSampl
i
ng 26

Heav
yMi
ner
alConcent
rat
e(HMC)Sampl
i
ng 26

Uni
t2Sampl
i
ng 29

Sampl
i
ng 29

Pur
poseofsampl
i
ng 29

Theor
yofsampl
i
ng 30

Met
hodsofsampl
i
ng 30

Gener
alsampl
i
ngpr
ocedur
e 31

Qual
i
tyCont
rol 32

Sour
cesofsampl
i
nger
ror
s 32

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nes–Nat
ionalDi
plomaModul
e Page1
 Mi
neVal
uat
ionandEconomi
cs

Sampl
i
ngofOut
crops 32

OpenPi
tSampl
i
ng 33

Gol
dMi
neAssay
ingPr
ocedur
eForUnder
groundSampl
es 33

Bul
kreduct
ionofmi
nesampl
es 33

Sampl
i
ngCoal
Mine 34

Sampl
i
ngaCopperMi
ne 34

Sampl
i
ngaChr
omemi
ne 35

St
opesampl
i
ng 35

Uni
t3MassandMi
ner
alCont
ent 36

Uni
t4:
Mini
ngPayLi
mit
s 38

PayLi
mitPar
amet
ers 38

UNI
T5:
ORERESERVESANDRESOURCES 43

Resour
cecl
assi
fi
cat
ion 43

Reser
vecl
assi
fi
cat
ion 43

Reser
ves/
Resour
ceest
imat
ion 43

Or
eReser
ves 44

Ev
aluat
ingExpl
orat
ionPr
oper
ti
es 46

Or
eReser
veVal
uat
ionFact
ors 47

Uni
tSi
xGr
ade 48

Under
groundExpl
orat
ionEnt
ri
es 48

Gr
adecont
rol 52

Cont
rol
ofSt
opeWi
dths 53

Way
sofGr
adeCont
rol 54

Uni
t6:
Val
uat
ionofCopper
,Gol
d,Lead,
Sil
ver
,Ti
n,andZi
ncLodeMi
nes. 55

DETERMI
NATI
ONOFAVERAGEMETALCONTENTSOFTHEORE. 56

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page2
 Mi
neVal
uat
ionandEconomi
cs

Val
uat
ionofChr
omeMi
nes 62

Uni
t7:
Val
uat
ionOfCoal
Mines 66

TYPESOFCOALMI
NING 66

Sur
faceCoal
Mines 66

Under
groundMi
ning 67

Val
uat
ionofCoal
Deposi
ts 67

Det
ermi
nat
ionoft
heAmountofCoal
inPl
ace 69

Coal
Qual
i
ty 74

HwangeCoal
Mini
ng 78

OpencastMi
ning 80

Benchcont
rol
andqual
i
tycont
rol 81

I
npi
tsampl
i
ng] 81

HwangePowerCoal
andHwangeCoki
ngCoal
qual
i
tycont
rol 83

UsesofCoal 85

Uni
t8:
Cust
om Smel
ti
ng 86

Economi
csoft
inpr
ocessi
ng 90

Economi
csofcopperpr
ocessi
ng 92

Economi
cef
fi
ciency 94

Uni
t9:
Expl
orat
ionDr
il
li
ng 97

Bor
ehol
epl
an 97

Dr
il
li
ngpr
ocedur
es 97

Maj
or(
true)andMi
nor(
appar
ent
)Di
ps 98

Uni
t1:
OreReser
vesandFeasi
bil
i
tySt
udi
es 105

Basi
cDat
aRequi
red 108

Gener
al 108

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nes–Nat
ionalDi
plomaModul
e Page3
 Mi
neVal
uat
ionandEconomi
cs

Ther
oleoff
easi
bil
i
tyst
udi
esi
nval
uecr
eat
ion 113

Ful
lfeasi
bil
i
tyst
udy 115

Uni
t2:
MineFi
nanci
ng 117

St
ocksandBonds 117

DebtorEqui
tyFi
nanci
ng 117

Ty
pesofShar
es 118

For
mat
ionofCompani
es 119

Par
tner
shi
ps 119

Pr
ivat
eBusi
nessCor
por
ati
on 120

Sol
eTr
ader 120

Theor
yofDemand 121

Quant
it
ydemand(
Qd) 121

Det
ermi
nant
sofDemand 121

LawOfDemand 121

El
ast
ici
tyofDemand(
EOD) 122

Suppl
y 123

Quant
it
ySuppl
i
edQs 123

Det
ermi
nant
sofSuppl
y 123

Uni
t3:
TimeVal
ueofMoney 124

Compoundi
ng 124

FUTUREVALUEWHENRATESOFI
NTERESTCHANGE. 125

Pay
backPer
iod 125

UseofPay
backPer
iod 126

CompoundI
nter
estandAnnui
tyPr
obl
ems 131

Uni
t4:
Financi
alAccount
ing 141

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nes–Nat
ionalDi
plomaModul
e Page4
 Mi
neVal
uat
ionandEconomi
cs

I
ncomeSt
atement 141

LessMi
ningt
axes 142

Exampl
esofFi
nanci
alSt
atement
s 142

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page5
 Mi
neVal
uat
ionandEconomi
cs

Uni
t1ScopeofMi
neVal
uat
ion

Objectofmi neval uati

on
Theobj ectofmi nev al
uati
onist heassessmenti ndet ai
lofal lfact
orswhi chdeci de
whet heritispossi bleornottoobtai
naf airandattr
acti
veret ur
noncapi tali
nv est
edina
mining vent ur
e.Theel ementofr i
ski susuallygreaterthant hatincurr
ed i nother
businessent erprisesduet otheuncertai
ntiesofmineraldepositi
onandt hehazardsof
faul
ted gr ound,f ire,gasesand wat erunderground,so t hatthe rewar d should be
accor di
nglygr eater.Certai
ncalamit
iesmaybei nsuredagai nst
,butt hecostofcov er
beyondcer t
ainlimi t
sbecomespr ohi
biti
ve.

Minev aluati
onist heref
orepri
maril
yconcernedwi t
hther evenueearni
ngpot ent
ialofa
propositi
on which dependson t hepr i
ce obt ai
ned forthepr oduct,offsetagainst
concomi tantexpendit
ure.Thepri
ceisusuall
yfixedbythesuppl yofanddemandf orthe
mineralont hewor l
dmar ket
s,suchastheLondonMet alExchange,oritisdependenton
specialcontract
sdr awnupbetweent hesuppl
ierandbuy er
.

Thefact
orswhi
chdeter
minewhet
heranor
ebodycanbewor
kedpr
ofi
tabl
ymaybe
summari
zedasf
oll
ows:

1.Theav
ail
abi
l
ityofcapi
tal
tof
inancei
tsexpl
orat
ionandexpl
oit
ati
on.

2.Thequal
i
tyandquant
it
yoft
hemi
ner
alcont
entoft
heor
ebody
.

3.Thel
i
kel
ypr
iceoft
hemi
ner
alpr
oductandf
utur
etr
ends.

4.Themodeofoccurrenceofthemi ner
ali
ntheor
ebodyandi
tsconf
ormat
ion
whi
chaf
fect
sexpl
orationandwor
kingcost
s.

5.Themet
all
urgi
cal
processesofbenef
ici
ati
onandt
reat
mentr
equi
red.

6.Thegeogr aphi
cal l
ocation oftheorebodyinrel
ati
on to ai
r,road and r
ail
transport
,seaportf
acil
i
ties,elect
ri
cpower
(ZESA)
,suppl
ies,r
epairandtoother
facil
it
ies

7.Theav ail
abili
tyandcostoflabour
,skil
ledandunski
l
led,andtheef
fectofany
rest
ri
ctiv
el egisl
ati
on,
orofl
abourunrest
,onmini
ngoperat
ions

8.Thecli
mati
ccondit
ions,par
ti
cular
lyi
nregar
dtoadequat
ewatersuppl
y,surf
ace
orundergr
ound.Also t
heef f
ectofcli
mateont hehealt
hand happinessof
worker
s.

9.Occupati
onalhealt
h hazards pecul
iarto cer
tai
n mi
ner
als and any speci
al
i
ndustr
iall
egi
slat
ionaf
fect
ingoperati
ons.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page6
 Mi
neVal
uat
ionandEconomi
cs

10.
Leaseconsider
ati
on,r
oyal
tyandt
axat
ionpay
ment
stot
hest
ateandr
oyal
ti
est
o
otherpar
ti
es

11.
Inf
ormation aboutadj acentpropert
ies i
ncl
udi
ng those which hav
e ceased
operati
ons.Thisinf
ormat ioni
susuall
yavail
abl
efrom thedepart
mentofmining
engineer
ingattheMinistryofMines.

Gener at ingNewPr oject sandPr ospect s

Gener at ingnew pr ospect si st hecr iti
calf i
rstst agei nt heexpl orat i
onpr ocessandi s
knownaspr ospect i
ng.Tr adi ti
onal ly,pr ospect i
ng wast hesear ch f orsi mpl ev i
sual
sur f
acei ndicat ionsofmi ner alizat ion.Nowaday st her angeofsur facei ndicat ionst hat
can be r ecogni zed byt heexpl orat ionisti sexpanded byt he useofsophi sticated
geophy si calandgeochemi calt echni ques.Howev er,t heski l
lsandabi l
i
tiesi nv olvedi n
successf ulpr ospect i
ngar ecommont oal ltechniques.Theyi nv olveact i
vity,obser v ation,
knowl edge, insi ght , oppor tuni sm, per sist ence, lat
er althi nkingandl uck.
Adescr iptionoft radi tionalpr ospect ingski ll
swi llther ef oreser v etoi ll
ust ratet hesekey
attri
but esofsuccess.
Dur i
ngt heni net eent hcent ur y
,i npl acesl ikeAust r
aliaorNor t
hAmer ica,i twasst il
l
possi blet ost umbl eonaki l
omet res- l
ongpr omi nentr idgeofsecondar yl eadandzi nc
mi neral s,oradi str ictwher eubi qui tousgr eensecondar ycoppermi neralsi ndi cat edt he
hugepor phy rysy st em beneat h.Ev enasl at
east hesecondhal foft het went iethcent ury,
promi nentandext ensi vemi neral izedout cr opwer est i
llbei ngi dent i
f i
edi nt hemor e
remot epar tsoft hewor ld.Di scov er i
essuchasRedDogi nAl aska( KelleyandJenni ngs,
2004; Koehl erandTi kkanen, 1991) , Por ger ai nPapua
NewGui nea( Handl eyandHenr y, 1990)andEr tsber gi nWestI rian( VanLeeuwen, 1994) ,
belongt ot hiser a.Few pl acesar el ef tint hewor l
dt odaywhi chof f
ersuchr eadi ly
i
dent i
fiedpr i
zes.Fort hatr eason,expl orationi sincr easi ngl yf ocusedont hesear chf or
orebodi est hathav eei thersubt leout cr opornoout cropatal l.
Inspi teoft his,exper ienceshowst hatsi mpl epr ospect ingmet hodscanst illf i
ndor e
bodi es.Goodexampl esoft hisar et he1964di scov eryoft heWestAust ral iani ckel
sulphidedeposi tsatKambal da( Gresham,1991) ;t he1982di scov eryoft hemassi v e
Ladol am Gol dDeposi tofLi hirIsl and,PapuaNewGui nea( Moy l
eetal .
,1990) ,the1993
discov er yoft heout cr oppi nggossanswhi chov erlayt her ichVoi seyBayCu/ Ni /Co
massi vesul phi deor ebodyi nLabr ador ,Canada( Ker randRy an,2000) ,thedi scov eryi n
1996oft hemassi v eOy uTol goi Cu/ Aupor phy ryin
Mongol ia( Per elloetal .,2001)andt hedi scov eryoft hel argeSukar igolddeposi tint he
east erndeser tofEgy pt2( Hel myetal .,2004) .
Ifrecentmi ner aldi scov eriesar eexami ned, i
tseemst hatsuccesshascomef rom t hree
mai nf act or s:
1.Theexpl orersear chedwher enoonehadsear chedbef or e.Thi smaybebecause
historicalorpol i
ticaloppor tuni ty made an ar ea accessi blet hatpr ev iousl y was

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 Mi
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uat
ionandEconomi
cs

i
naccessi ble.Howev er
,v eryof tent her easonf ort hedi scov erywassi mpl yt hatnoone
hadpr ev i
ousl ythoughtt ol ooki nt hatpar ti
cularpl ace.
2.Theexpl or eri dent if
iedandt est edsubt leornon- ty picali ndi cat ionsofmi ner ali
zati
on
thathadpr ev i
ousl ybeenov erlooked,ei therbecauset heywer ev erysmal lor ,mor e
usual l
y ,becauseher ecogni zedassi gni f
icantsomef eat uret hatpr eviousobser vershad
seenbutdi smi ssedasuni mpor tant .AsDi ckSilli
toe3hasr ecent l
ywr itten( Si l
li
toe, 2004
Car efulscr utinyofbedr ockout crops, someper hapsonl ymet er sacr oss, isakeypar tof
successf ulexpl or at i
on—becausei tmayr ev ealthesubt ledi stalsi gnat ur esofconceal ed
mi neral i
sat ion.Recentexper i
enceshows,howev er,thatsuchdet ai
ledt r
av er sing,even
oft hemosthi ghl yexpl oredt er ranes,byexper iencedpr act iti
oner scanal sopi npoint
par t
lyout cr oppi ngdeposi tswhi chhav esi mpl ygoneundi scov er edbecauset hesubt le
sur f
aceexpr essi onsar ebot hi nv isiblef rom t heai randonsat elli
tei mager y.Theof t
quot ednot i
ont hatal lwhol l
yorpar tl
yexposeddeposi t
shav ebeenf oundi nt hewor ld’s
mat urebel t
si s, tomymi nd,amy th.
3.I nar easofknownmi ner al
isat i
on( “
brownf ield”expl or ation) ,t heexpl or erempl oyed
step-outhol est ol ocatenon- out cr oppi ng( “bli
nd”)mi ner alisat i
on
belowcov er.Thi st ypeofexpl or ationcanonl ybesuccessf ul wher egeol ogi cal
knowl edgegai nedf r
om t heest abl ishedmi nesandpr ospect sgi v est heexpl or er
conf i
dencet oembar konext ensi v e( andexpensi v e)dr il
lingpr ogr amsi nar eas
thatlackout standi ngsur facei ndi cat ions.Exampl esofsuccessesf rom t hist ype
ofexpl orat i
onar et hedi scov erybyNewcr estatCadi a, NSW, Aust ral i
aoft he
Ridgewaypor phy ryCu/ Audeposi tbel ow450m ofov er l
y ingsedi ment( Hol iday
etal .
,1999)andt he2009di scov eryofMer li
nCu/ Mo/ Aupr ospectbyI vanhoe
Aust raliaLt d. 4
Oneoft hemosti mpor tanti ngredi ent sofpr ospect i
ngsuccesshasbeenl ateral
thinking.Byt hisi smeantt heabi l
ityt o:
•seef ami liarr ocksi nnewcont ext s
•quest ional lassumpt ions( butespeci all
yone’ sown5)andaccept edwi sdom
•beal ertf orsmal l anomal i
esoraber rations
•knowwhent of ol lowahunch6( si ncesomeoft heabov eat t
ribut esar easmuch
subconsci ousasconsci ous) .

SomeWay sofGener at
ingNewExpl or
at i
onI deas
Newideasmaycome“ outoftheblue”
, butmor eoftenaretheresul
tofcert
ain
well
-r
ecognizedsi
tuati
onsthatt
heexpl orat
ionistisabletocombi nefr
uit
ful
lywit
h
knowledgethatt
heyalreadyhav
e.Itpay shimt obeal ertf
orthesesit
uati
onssoas
t
otakeadvantageoftheopportuniti
est hattheyoffer
.Herearesomeoft hem:

Scenario1:Newknowl edgeofthegeol ogyorgeophy si

csofanar eabecomes
avail
ablefrom newmappi ng(eithery ourownorGeol ogicalSurveymaps) .
Combi nedwi t
hy ourownunder standingofmi neral
i
zati
on, thenewmappi ng
i
ndicatesthepossi bi
li
tyofdi
fferentst yl
esofmi ner
ali
zationbeingpr esentor
dif
ferentplacestolook.
Scenario2:Elsewhereinadistrictthaty ouareex pl
ori
ng, adiscoveryismade
whichcanbeusedasanewandmor erelevantmodel formi ner
alizati
onthan
theonet hatyouhav ebeenusing.
Scenario3:Av isi
ttootherminingcamps, may beevenont heot hersideof

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e Page8
 Mi
neVal
uat
ionandEconomi
cs

thewor ld,providesnewi nsi

ghtintoyourexplorati
onpr oper
ty.Thef or
mal
descri
pt ionofanor ebodyi ntheli
teratur
ei snosubst i
tutef
orseeingi tf
or
yourself–par t
icul
arl
yifthereisanoppor tuni
tytoseet hediscoveryoutcrop.
Scenar i
o4:Newl ydevelopedexplorati
ontechnologiesand/ormet hodologies
makei tpossi bletoexploreeff
ecti
v el
yinanar eawher eearl
ierprospecti
ng
methodswer eunsuccessful.
Scenar i
o5:Pol iti
calchangesmakeav ail
ableforexplorat
ionandmi ningapar t
ofthewor ldthatprevi
ouslyhadnotbeensubj ectt
omoder nmet hodsof
exploration.

ACheck- ListofNegat i
veAssumpt ions
Soonerorl aterinmostexpl orationpr ogr ammesonanar ea, animpassei sreached
i
nt heabi l
ityt ogener atenewexpl orationi deas.Att hispoint,iti
sal way seasyt o
thi
nkofmanygoodr easonswhyt heef fortshoul dbeabandoned.Howev er,before
thi
sdeci sioni smade, i
tiswor t
hwhi let ocr i
ticall
ycheckt hroughal i
stoft hebeliefs
thatarehel daboutt hear ea.Onex ami nat i
on, thesebel i
efsmi ghtturnoutt obemer e
assumpt ions, andt heassumpt ionsmi ghtbewr ong.Toassi stinthispr ocess,her ei
s
acheck- l
istoff i
v enegat i
veassumpt ionscommonl ymadebyexpl orationistsabout
theprospect ivi
tyofanar ea.
•Thear eai snotpr ospect i
vebecausei tisunder l
ainbyr ockt ypeX.
Comment :Howdoy ouknow?Thegeol ogical mapy ouareusi ngmi ghtbewr ong
orinsuffi
ci entlydet ailed.Inanycase, ifrockt ypeXi snotpr ospectivef ory ourtarget
commodi ty ,perhapsi tisprospect i
vef orsomeot hercommodi t
y.
•Thear eahasal readybeenexhaust i
vel yexpl ored.
Comment :Anar eaorpr ospectcanal mostnev erbeexhaust i
velytested.Ear li
er
explor
ers gav e up because t heyr an outofi deas,t i
me ormoney .The bestany
explor
ationi st
canev erhopet odoi stoexhaust i
velyt estsomei deaormodel thattheyhav e
aboutmi ner alizationusi ngt hebestt ool satt heirdisposal att hatti
me.Gener atea
newmodel ,dev elopanewt ool orsimpl yfindnewaccesst or i
skcapi tal,andt he
areamayt urnoutt obeunder -
expl or ed.

•Allprospectiv
er ocksint heareaar epegged( staked)bycompet i
tors.
Comment :Whenwast hel astcheckmadeont heexisti
ngt enement spl an?Hav e
allt
heoppor tunit
iesforjointventureoracqui siti
onbeenexpl ored?Ify ouhav eideas
aboutthegr oundwhi cht heexisti
ngt enementhol derdoesnot ,
theny ouar ei
nav ery
goodposi ti
ont onegotiateaf avourableent ry.7
•Noexi sti
ngor e-
bodymodel fi
tsthear ea.
Comment :Mineraldeposi t
smaybel ongt obr oadclasses, buteachonei suni que:
detai
ledmodel sar eusual l
yformulatedaf t
eranor ebodyi sf ound.Bewar eoflooking
toocloselyforthelastor ebody ,r
athert hant henext .
•Thepr ospectivebelti
sexcl udedf r
om expl orationbyr easonofcompet ingland
useclaims( envir
onment al,nati
vet i
tl
e, etc.
).
Comment :Thisonei stougher ;
inther egulat oryclimateofmanycount ries
today,thechancesar ev eryhighthatbel iefsint hisareaar enotmer eassumpt i
ons.
Howev er,withreason,commonsenseandpr epar ednesstocompr omi se, pati
ence

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e Page9
 Mi
neVal
uat
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cs

andnegot
iat
ioncanof
tenachi
evemuch.

Stagesi nPr ospectExpl oration

Onceapr ospecthasbeeni dentifi
ed, andt heri
ghttoexpl oreitacqui red, assessing
i
tinv olvesadv ancingt hroughapr ogr essiveseri
esofdef inableexpl orationst ages.
Posi ti
ver esul tsi nanyst agewi llleadt oadv ancetot henextst ageandanescal ati
on
oft heexpl or ationef fort.Negativer esultsmeant hatt heprospectwi l
l bedi scarded,
soldorj ointv ent uredtoanot herpar t
y ,orsimplyputonhol dunt i
ltheacqui si
tionof
fr
eshi nformat ion/ideas/ t
echnol ogyl eadst oit
sbeingr eacti
vat ed.
Althought hegr eatv arietyofpossi blepr ospecttypesmeant hatt herewi ll
besomedi fferencesi ntheexpl orationpr ocessforindivi
dual cases, prospect
expl orat
ionwi l
l generallygot hr
ought hestagesli
stedbel ow.
Tar getGener ation
Thisi ncludesal lexplorati
onont hepr ospectunder takenpriortot hedr i
l
lingofhol es
dir
ect lytar getedonpot entialore.Theai m oftheexpl or
ati
oni st odefinesucht ar
gets.
The pr ocedur escar r
ied outi nt hisstage coul dincl ude some oral lofthe
followi ng:

•arev i
ewofal lavai
labl einfor mat i
onont heprospect,
suchasgovernmentgeol
ogi
cal
mappi ngandgeophy sical survey s,theresul
tsofprevi
ousexpl
orat
ionand
theknownoccur r
enceofmi nerals;
•prel
imi narygeol
ogical interpretationsofairphotogr
aphsandremotesensed
i
mager y
;
•regi
onal anddetail
edgeol ogical mapping;
•detail
edr ock-
chipandsoi lsampl ingforgeochemistr
y;
•regi
onal anddetail
edgeophy sicalsurveys;
•shall
owpat t
erndri
llingf orr egolit
horbedr ockgeochemist
ry;
•dri
ll
ingai medatincr easinggeol ogicalknowledge.

TargetDr il
li
ng
Thisst ageisaimedatachi evingani ntersectionofor e,orpot entialore.Thet est
ing
wil
l usuall
ybebymeansofcar eful
lyt arget eddiamondorr otary-percussiondr i
ll
holes,butmor erarelytrenching, pitt
ing, sinkingashaf tordr i
vinganadi tmaybe
empl oyed.Thisisprobabl ythemostcr iticalstageofexpl orationsince, depending
onitsr esul
ts,deci
sionsi nvolvinghi ghcost sandpot entialcost shav etobemade.
Ifadeci si
onismadet hatapot ential orebodyhasbeenl ocated, t
hecost sofexpl or
ati
on
wil
l thendramat i
call
yescal ate, oft
enatt heexpenseofot herpr ospects.Ifiti
s
decidedt owr i
teaprospectof faf t
ert hisst age,ther
ei salway st hepossi bi
li
tythatan
orebodyhasbeenmi ssed.

Resour ceEval uationDril

li
ng
Thisst ageprov i
desanswer stoeconomicquestionsrelati
ngt
ot hegrade,tonnesand
mi ning/metall
urgicalcharacter
ist
icsofthepotenti
alorebody.Agoodunder st
andi
ng
oft henat ur
eoft hemi nerali
zat
ionshouldal
readyhav ebeenachieved–t hat
under standi
ngwaspr obabl yabigfact
orintheconfidenceneededt omov etothi
s
stage.Pr ovi
dingt hedatat oanswertheeconomi cquestionsr
equiresdetai
ledpatt
ern

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dri
ll
ingandsampl ing.Becauset hi
scanbesuchanexpensi
veandt i
me- consuming
process,thi
sdri
ll
i
ngwi l
loftenbecarri
edoutint
wosub-st
ageswi t
hami nordeci
sion
pointinbetween:ani nit
ialevaluat
iondri
ll
i
ngandalat
erdefi
nit
iondri
ll
ingstage.
Evaluati
onanddef init
iondr i
ll
ingprovi
dethedet
ail
andconfi
dencelevelsrequi
red
toproceedt ot
hef inalfeasibi
lit
ystudy.

Feasibi
lit
yStudy
This,
thef i
nalstageint
heprocess,i
sadesk-topdue-di
li
gencestudythatassesses
al
lfactors–geol ogi
cal
,mini
ng,envi
ronmental
,pol
iti
cal,
economic–r el
evantto
thedecisi
ontomine.Withver
ylargeproj
ects,t
hecostsinvol
vedinevaluati
onar
e

sucht hatapr eli

minaryfeasibi
li
tyst
udyisoftencarri
edoutduringthepreceding
resourceev aluati
onstage.Thepr el
imi
naryfeasibi
li
tyst
udywi l
lidenti
fywhether
thecost si
nv olvedinexplorati
onareappropr
iatetotheret
urnsthatcanbeexpect ed,
aswel lasident i
fythenatureofthedatathatmustbeacqui r
edi nordertobr
ingthe
projecttothef i
nalfeasi
bili
tystage.

Maxi mi zingSuccessi nExpl orationPr ogrammes

Obv iousl ynotal l prospect st hatar egener atedwi ll makei tt hr ought oami ne.Most
willbedi scar dedatt het ar getgener ationort argetdr il
li
ngst ages.Oft hesmal lnumber s
thatsur vivet oev aluat i
ondr ill
i
ng, onl yaf ewwi llreachf easi bi l
ityst age, and
event heymayf ailatt hisl asthur dle.Thet otalnumberofpr ospect sthathav et o
bei nit i
al l
ygener atedi nor dert opr ov i
deonenewmi nedi scov erywi llvar yaccor di ng
tomanyf actor s( someoft hesear edi scussedbel ow)butwi ll gener al
lybea
l
ar genumber .Somei deaofwhati si nvolvedi nl ocat i
nganor ebodycanbegai ned
byconsi deringapr ospectwast ageorexpl orationcur ve( Fig.1. 1) .Thisi sagr aph
onwhi cht henumberofpr ospect si nanygi venexpl orationpl ay( thev er ticalaxi s)
i
spl ot tedagai nstt heexpl orationst ager eachedoragai nstt i
me, whi chi st hesame
thing( thehor i
zont al axis).Thel ar genumberofpr ospect si ni tiallygener at eddecl ine
throught heexpl orationst agesi nanexponent i
al manneri ndi cat edbyt hepr ospect
wast agecur ve.OnFi g.1. 1, thecur vel abelledAr epr esent sasuccessf ul expl orat ion
playr esul ti
ngi nanor ebodydi scov ery.Thecur vel abell
edCr epr esent sanot her
successf ulexpl orat i
onpl ay ,butint hiscase, althoughf ewerpr ospect swer eini t
ial l
y
gener at ed, t
hesl opeoft hel inei smuchl esst hanf orplayA.I tcanbededucedt hat
thepr ospect sgener at edf orpl ayCmusthav ebeengener allyofhi gherqual ityt han
thepr ospect sofpl ayAbecauseahi gherper cent ageoft hem sur vivedt hei nitial
expl or at i
onst ages.Thel ineBi samor et ypical pr ospectwast agecur ve: thatofa
fail
edexpl orationpl ay .
Itshoul dbecl earf rom Fi g.1. 1thatt her ear eonl yt woway st ot ur nanunsuccessf ul
expl or at i
onpr ogr ammei nt oasuccessf ulone; theexpl orat ionpr ogr amme
eitherhast ogetbi gger( i.e.increaset hest art i
ngnumberofpr ospect sgener ated)
ort heexpl orat i
oni sthast ogetsmar ter( i
.e.decr easet her at eofpr ospectwast age
andhencet hesl opeoft heexpl orat ioncur v e).Ther eisofcour seat hi
r dway : toget
l
ucki er .
Get tingbi ggerdoesnotnecessar ilymeanhi r
ingmor eexpl or ationi stsandspendi ng
moneyataf ast err ate.Pr ospect sar egener atedov ert i
me, sot hei njunct iont oget
biggercanal sor eadas“ getbi ggerand/ orhangi nt herel onger ”.Ther ei s, howev er,

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usuall
yalimittothenumberofwor t
hwhileprospectswhi chcanbegeneratedin
anygivenexplorati
onprogr
amme.Thel imitsarenotalway s(orevennormall
y)i
n
theideasoranomal i
esthatcanbegeneratedbyt heexplorat
ioni
st,butmoreoft
en
aretobefoundi ntheconfi
denceoftheexplorati
onistorofthosewhopayt hebill
s.
Thisfact
orisof t
enrefer
redtoas“proj
ectfati
gue”.Anothercommonl i
miti
ngfactor
i
stheav ail
abil
i
tyofgroundf
orexplorati
on.Intheindustry
,examplesarelegi
onof

groupswhoexpl oredanar eaandf ail

edt ofi
ndt heorebodysubsequent l
ylocated
there by someone el se,because,i n spi
te ofgood i deas and good expl or
at i
on
programmes,
theear l
iergroupssimpl ygav eupt oosoon.Judgi ngwhet hertoper sist
withanunsuccessf ulexplorati
onpr ogrammeort ocutone’ slossesandt r
ysome
otherpr ovi
ncecanbet hemostdi ffi
cultdeci
sionanexpl orati
onistev erhastomake.
Helpingt heexplorati
onisttogetsmar ter,
atleastasfarast hegeol ogicalfi
eld
aspect sofexplorati
onar econcer ned, i
stheaim ofthisbook.Thesmar texplorat
ionist
willgeneratethebestqual i
typrospect sandtestthem inthemostef fici
ent
andcost -
eff
ectivemanner .Att hesamet i
me, shewillmaintai
nabal ancebet ween
gener at
ionandt esti
ngsoast omai ntainacontinuousflowofdi rectedactivi
tyleading
toor ediscovery.Theachi evementofagoodr oll
overrateofpr ospect si
sasi gn
ofaheal t
hyexplorati
onpr ogramme.

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DifferentTy pesofExpl or ationSt rategy

Theexpl orationcur v epr ov idesaconv enientwayofi llustrat i
nganot heraspectof
thepr esentdayexpl or at ionpr ocess.Somer egional explor at i
onmet hodsi nv ol
ve
widespr eadsy stemat iccol lect ionofgeophy si cal orgeochemi cal measur ement sand
typi
cal lyr esul tint hepr oduct ionofl argenumber sofanomal i
es.Thi si sanempi ri
cal
explor ationst yle.Gener al l
yl ittlewi l
lbeknownaboutanyoft heseanomal iesot her
thant hef actoft hei rexi st ence, butanyoneanomal ycoul dr ef l
ectanor ebodyand
mustber egar dedasapr ospectt obef ollowedupwi t
hapr elimi nar yassessment–
usual lyaf i
eldv isit.Rel at i
v elyf ewanomal ieswi llsur vivet hei ni t
ialassessmentpr ocess.
Theexpl orationcur v ef orapr ogr ammet hatmakesuseofempi rical prospect
gener at i
onwi ll ther ef orehav eav eryst eepsl opeandl ooksomet hi
ngl i
ket heupper
curv e( A)ofFi g.1. 1.
Theopposi tet ypeofpr ospectgener ationi nv olvesappl yingt het heor iesofor eforming
processest ot heknowngeol ogyandmi ner al i
zat ionofar egi on, soas
topr edi ctwher eor emi ghtbef ound.Thi si saconcept ual expl orationappr oach.
Concept ual expl or ationwi ll gener all
yl eadt oonl yasmal l numberofpr ospect s
beingdef i
ned.Thesear emuchmor el i
kel yt obe“ qual it
y”pr ospect s, inthesense
thatt hechancesar ehi ghert hatanyoneoft hesepr ospect swi l
lcont ainanor ebody
compar edt opr ospect sgener at edbyempi rical met hods.Anexpl orat i
onpl aybased
onconcept ual tar getgener ationwi l
lhav ear elativ el
yf latexpl orationcur veandwi ll
tendt or esembl et hel owerl ine( curveC)onFi g.1. 1.
Empi rical andconcept ual gener ationandt ar get i
ngar et woendmember sofa
spect rum ofexpl or ationt echni ques, andf ewact ual explor ationpr ogr ammeswoul d
bechar act er i
zedaspur elyoneort heot her .Concept ual gener at i
onandt arget i
ng
tendst opl ayamaj orr ol ewher et herear ehi ghl ev el
sofr egi onal geol ogical knowledge
andt hest y
leofmi ner al izat ionsoughti sr elat ivelywel lunder stood.Such
condi tionsusual l
yappl yi nest abl i
shedandwel l-
knownmi ni ngcampssuchas( for
exampl e)t heKambal daar eai nt heEast ernGol df i
eldsofWest ernAust r
alia, t
he
Nor andacampi nt heCanadi anAbi t
ibi Prov inceort heBushv eldr egionofSout h
Afri
ca.Empi ri
cal techni quest endt opl ayagr eat err olei ngr eenf i
eld8expl or ati
on
progr ammes, wher et hel ev elsofr egional geol ogi cal knowl edgear emuchl owerand
appl i
cabl emi ner alisat ionmodel sl esswel l def ined.
Mostexpl or ationpr ogr ammesempl oyel ement sofbot hconcept ual andempi ri
cal
appr oachesandt hei rexpl or ationcur vesl i
esomewher ebet weent het woend
membercur vesshownonFi g.1. 1.

PROSPECTI NGMETHODS
Gener alDi scussion
Inprospect ivear
easwher eout cr
opi spoor,ort
hathav ebeensubjecttointense
mineral sear chov eralongper iodoft i
me(generall
yknownas“ mat ure”explor
ati
on
areas),theexpl orationisti
ncreasinglyhastomakeuseofgeophy sicaland
geochemi cal methodsi nor dertoextendthesearchintoareasofshal l
owcov er
i
naccessi bl et o mor et raditi
onalpr ospecti
ng.Some of t hese geophy si
caland
geochemi cal
met hodsal soall
owf orrapidregionalappr
aisalofareaswhereground
accessmaybedi ffi
cult–f orexampl erai
n-f
orestter
rainorThir
dWor l
dcount r
ies

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withpoori nfrast ructur e.

Geophy si
cal andgeochemi cal techni quest ypical
lymeasur eobj ect ivechar acteri
sti
cs
thatarepossessedbyal lr
ockst osomedegr eeandr esul tint hecol l
ect ionof
l
argeamount sofgeogr aphi callyrefer enceddi git
al dat a.Expl orat ioni stsunder take
twodi fferentki ndsofsur vey :thoset hatar eai medatdef iningr egi onal geol ogyand
thoset hatai mt odi rect lylocat eor e.I nsomecasest her ei sanov er lapbet weent hese
twot ypes.
Thef i
rstt ypeofsur v eyi samappi ngoft hear ealdistribut i
onofapar ticular
rockorsoi lchar act erist i
c–i tcoul dbe, forexampl e,pat ternsofel ect romagnet i
c
refl
ectance, magnet i
csuscept ibili
ty,r ockconduct ivit
yorel ementconcent rati
ons/
rati
osi nrockssoi l
sordr ainagesedi ment s.Thesemeasur ement sneednot
haveanyi mmedi ateordi rectr elevancet ot heor ebodysought .Thedat ai sused
i
nconj unct ionwi t hbedr ockorr egol i
thmapspr oducedbyt hegeol ogi stf r
om di rect
surfaceobser v ationsi nor dert opr oduceani nter
pr etat i
onoft hr ee- dimensi onal geology
.
Geologi cal model sar et henusedt opr edictwher eor emi ghtbef oundandso
guidesubsequentsear ch.Thi squal itat i
vepr ocessofgeol ogi cal int erpr etationisbest
carri
edoutasat eam ef fortbet weent hespeci ali
stgeophy sicistorgeochemi stwho
underst andst henat ureandl imitationsoft hedat asetandi tspr esent ation, anda
geologistwhowoul dnor mallypossesst hebestknowl edgeoft hegeol ogyoft he
areaandt hepot ential sty l
esandscal esofgeol ogical andmi ner alizat i
onpr ocesses
thatmi ghthav eoper atedwi thini t
.Ofcour sebot har easofski llandknowl edge
mightbecombi nedi nt heoneper son, butt hisisrare.
Themosti mpor tantst epi nt hegeol ogi calinterpretationofsuchsur vey s( after
thetechni cal jobsofensur i
ngqual ityofdat aorpur el
ynumer i
cal anal yseshav e

beenunder taken)i spr esent ationoft hedat ainaf ormt hatf acili
tatest heirqualitati
ve
i
nterpr etati
on.Thi sst epnor mal lyt urnst hedi gitaldat ai ntoageol ogist-fr
iendly
analogf orm.Techni quesf orpr oduci ng2Dand3Danal ogmaps, sectionsandf or m
surfacesf r
om densear ray sofdi gitaldat aaredescr ibedi nt henextchapt er.
Thesecondt ypeofgeophy sical /geochemi cal sur veyi sai medatmeasur i
ng
unusual orat ypical featur esofr ockst hatdi rectlyr eflect, andhav ecl osespat ial
rel
ationshi pst o, economi cmi ner ali
zat ion.Si nceor ebodi esar einmostcasessmal l
rel
ativet ot heear th’
scr ust , suchsur vey shav etobebasedondet ai
led, cl
ose- spaced
measur ement sandar egener allyex pensi ve.Or e-target i
ngsur veyswoul dnor mal l
y
beunder takenaf terapr ospect ,oratl eastapr ospect ivebel toflimitedar ea, hasbeen
defi
ned.Thecr it
ical stepi nanal ysingt her esultsofor e-
t arget i
ngsur v eysi stosel ect
thosemeasur ement sthatcanbeconsi deredas“ anomal ous” .Thesel ectedanomal i
es
arethenanal ysedt odet er mi net hepr obabl enat ure, size, posi t
ionandshapeoft he
causat ivebodyasapr eludet oaf ollow- updet ail
edexpl or ationpr ogr amme, usual ly
dri
ll
ing.
Defining“ anomal ous”isnev ereasy .If,forexampl e,al ev elof20ppb( parts
perbillion)gol di nageochemi cal soil sur veyissel ect edasacut -offnumbert o
defi
neanomal ism, i
twoul dbehar dt oar guet hatt her eissomesi gnificantdifference
betweent hatassayandoneof19ppbwhi chf allsout sidet hecut -offline.Andi f
19isanomal ous, thenwhatabout18?Andsoon.Thesamepr obl em appl iesinthe
analysisofal lnumer ical dat aset soft hi stype.Norcanonesi mpl yranknumber s
accordi ngt osi ze–bi ggeri nt hiscasei snotnecessar il
ybet ter.Amoment ’
sr efl
ection

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shoul dconv i
ncet hatasmal l
numbermayr eflectav er ylar gesour ceremot ef rom the
sampl e/ measur ingpoi nt, wher easal argenumbermayhav ecomef rom ar elatively
smal l sour cecl oset ot hesampl epoi nt .Andnear nesst ot hesampl epointi sonly
oneofmanyf actor sthatmi ghtenhanceordet ractf rom t hev al ueofapar ticular
measur ement .
Real dat aset st hatpr ov ideanadequat esampl i
ngoft heenv ironmentsel dom
possessshar pnat ural cut -offs:theyt ypical lyhav eacont inuousor“ f
uzzy”di stri
bution.
Thesci enceoff uzzyl ogi cdescr ibessuchsy stems–ev er ythi
ngi st ruetoa
degreeandbl ackandwhi t earemer elyspeci al casesi nacont inuousscal eofgr ey .
Fuzzyl ogi cist hewayhumanbr ainswor k,buti si ncompat iblewi tht heeither/or
bivalentl ogi coft hecomput er.Fort hisr eason, pr esent -daycomput erscannotbe
progr ammedt osel ectal l signifi
cantanomal ousnumber sf rom adat aset :onlya
humanexper tcanat temptt hatwi thanyhopeofsuccess.Ther ol
eofcomput er
processi ngofgeochemi cal andgeophy si cal datai st opr esenti ti
nsuchawayas
facil
itatest hehumanj udgementpr ocess.
Thispr obl em ofdef ininganomal ousv aluescanof tenbepar t
lyov ercomeby
l
ooki ng f ornat uralgr oupi ngs and pat terns wi thint he dat a setand maki ng the
reasonabl e
assumpt iont hatsuchgr oupi ngsr eflectt heoper ationoff undament algeol ogical
factor s,includi ngmi ner alizationpr ocesses.Somet imest henat uralbreaksl ikethis
areappar entbysi mplyey eballi
ngapr i
nt-outoft her awdat a.Mor esubt l
ecut -
offsin
thedat aorbr eaksi nthei rtrendsar eof tendef inabl ebygr aphi cal meansorbyst ati
sti
cal
analy sis.Manycommer ci all
yav ail
abl esof twar epr ogr amsar eav ai l
ablewhi ch

canhi ghl i
ghtt hesef eat ur es.Thesepr ogr amsar epower fulandusef ul t
oolsthat
nowaday sf or m anessent ialpartofmostanal ysesofgeophy si cal andgeochemi cal
survey s.
Inspiteofsuchnat urallyoccur ri
ngpat t
er ns,ifadat asetr epresent sanadequat e
sampl ingofanar ea, thenanyr ealisti
cf i
rst-stageanal ysi
swi llal mostal way sdivide
i
tintot hr eebasi cgr oups.
Inthef irstgr oup–al mosti nvari
abl ythel argestone–ar et hosemeasur ement s
thataredef init
elynotanomal ous.Thesear eknownasbackgr oundv aluesandt hey
canbesaf elyignor ed, atl eastasf arast her esul tsoft hatsur v eyar econcer ned.I n
the second gr oup – pr obablya r athersmal lone,i fi texi sts atal l– ar et hose
measur ement s
thataresodi ff
er entf rom t hebackgr oundt hatt heycannotbei gnor ed
anddemandt obeexpl ai nedi nsomeway .Suchnumber swi l
l gener allybeconf i
dent l
y
l
abel l
edasanomal ous.Thet hirdgr oupisawi delydef i
nedcat egor yt hatcan
begi vent hedi stinct ly“ fuzzy ”label of“possi bles” .Itcompr i
sesal lther emaining
measur ement sthatdonotf i
tintot hefir
stt wocat egor i
es.Theyar et hosenumber s
thataresl ight l
yabov e, oratt heupperl imi tof,backgr oundv aluesbutcoul dber eadil
y
explainedbynon- mi ner alizingpr ocesses.Theycoul d,howev er ,equal lywellbe
subtleexpr essionsofor e.Si ncet herewi llprobabl ybei nsufficientt imeandmoney
toexhaust ivelytestal loft hemeasur ement soft hist hi
rd“ possi bl es”gr oup,adeci si
on
onwhi chonest of ollowupmustbemadebasedonknowl edgegai nedf r
om
outsideoft hatpar ti
cul arsur vey.Thi smayber esul t
sf rom ot hert ypesofgeophy si
cal
orgeochemi cal sur veyorknowl edgeoft hegeol ogyandmi neral izationoft he

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area.Thei nputofanexper i
encedexpl or ati
oni sti sr equi redatt hispoi ntandno
softwar epr ogr am canmaket hedeci sionf orher .
Thisi sthemai nr easonwhynoexpl or ationt echni queshoul dbeconduct edi n
i
sol ati
on.Themostpower fulexpl or ationpr ogr ammei snor mal lytheonet hatcombi nes
datagat her edf rom sev eral differentappr opr iat egeol ogi cal,geophy si caland
geochemi cal sur vey s.Ult
imat ely,onceal l
pr ocessi ngandpr esent ationst epshav e
beenper for med, t
hekeyt oi nter pret i
ngt her esul tsofgeophy sical andgeochemi cal
surv eysisanunder standingoft hegeol ogyandor e-for mi ngpr ocessesoft hear ea.
Combi ningdi f ferentt ypesofmapdat acanbeaccompl ishedbyov erlay i
ngsamescal e
mapsonal ightt ablebutt hisi sacl umsypr ocesswhi chi smuchmor eeasi l
y
doneoncomput erusi ngdi git
al dat aset sandGeogr aphi cal Inf ormat ionSy stem
softwar e( GI S–descr i
bedmor ef ul l
yi nt henextchapt er).
Thischapt erpr esent sabr iefdescr i
pt i
onoft her olet hatt hemostcommonl y
usedgeophy sical andgeochemi cal sur v eyspl ayi nmi ner al expl oration.Adet ail
ed
descr i
pt i
on ofal lt he geophy si caland geochemi calt echni ques av ai l
ablet ot he
explor ati
oni st
l
ieswel lbey ondt hescopeoft hisbook.Mor eov er, sincet heset echni ques
tendt obet echnol ogy -
dri
v en, oper at i
onal det ailscanchanger apidly, andanysuch
descr i
pt i
onwoul dv erysoonbecomeoutofdat e.Formor edet ailont het heor yand
fi
eldi mpl ement ationoft heset echni ques, t
her eaderi sr ef erredt ot her efer ences
giveni nAppendi xF.Howev er,agener al over viewoft henat ur eofgeophy sical
andgeochemi cal expl or
ationwi l
l serv et oill
ust ratehowabal anced, integr ated
mul ti-
discipl inar yappr oacht omi ner alexpl or at ioncanpr oducesuccessf ul results.

Magnet icSur veys

Thei nst r umentusedf ormagnet i
csur vey siscal l
edamagnet omet er.Magnet omet ers
recorddi sturbancesi ntheear t
h’ smagnet icfieldcausedbymagnet icallysuscept ible
rocks.Si nceal lrocksar emagnet icall
ysuscept i
bletosomedegr ee, amapof
magnet icv ariati
onatsur face(cal ledaTot alMagnet i
cI ntensityorTMImap)can
provideani mageofl ithologydi st ribution–ani maget hatt osomeext entr ef
lects
thethr ee- di
mensi onal distri
butionofr ocksandi snotaf fectedbyt hi nsuper f
icial
cover.Magnet i
cmapsar esogener al
l
yusef ul totheexpl orationistt hatt heyar eeasi ly
themostwi delyusedgeophy sical t
echni que, bothasani nvaluableai dinr egional
mappi ngandf orthedi rectl ocationoft hoseor ebodi est hathav eadi stinctmagnet i
c
signatur e.
Regional magnet icmapsar eusual l
ypr oducedbyf ly
ingt hemagnet omet erata
l
owl ev el inregul arpar all
el passesov ert hegr ound.Ai rcraftposi ti
oni ngi snowaday s
control ledbyaDGPSsy st em (Sect .2.1.7).Dat aar erecor deddi gitallyandpr esent ed
asacont ourorpi xelmap( Sect.10. 3)
.Fl yingatl owerlev elsanddecr easing
theflight li
nespaci ngincr easest hesensi tivi
tyoft hesur vey .Verydet ailedsur v ey
s,
compar abl eint heirresol utiontogr oundmagnet icsurvey s,canbecar ri
edoutby
l
ow- fl
y inghel icopt er.
Inground- magnet icsur vey i
ng,thesensorheadoft hemagnet omet ercanbe
mount edont opofapol et okeepi tclearofanynear -
sur f
acemagnet i
c“ noise” .
Theoper atorusual l
ytakescl ose- spacedr eadi ngsalongaser iesoft raver sesacr oss
thesur veyar ea.Themagnet i
cr eadi ngsandst ati
oncoor dinatesmayber ecor ded
i
nanot ebookbutt odayar emor el ikelyt obest oredintoanel ectroni cmemor y

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bui l
tintot hei nstr
ument .Moder ninst r
ument scanbel inkedt oaDGPSsot hatmap
coor dinat esar eautomat i
cal l
yr ecor dedagai nstt hemagnet icreadi ng.Regul arrepeat
readi ngsataf i
xedbasest at i
onpr ov i
dedat at ocor r
ectfordi ur naldr i
ft(wi thmoder n
sy stemst hisst epi sdoneaut omat i
callywhent ime- coordinat eddat afrom af ixed
basest ationmagnet omet erandamobi l
emagnet omet erar edownl oadedi ntoaf i
eld
comput eratt heendofeachday ).
Pr ocessi ngofaer omagnet i
cs, af t
eredi ti
ng, correction,andl ev elli
nggener all
y
consi stsofanumberofcommonenhancementandpr esent ationt echni quescar r
ied
outonTot al Magnet i
cI ntensi tydat a.Comput erprocessi ngt or emov eanycomponent s
ofr egional magnet i
cgr adienti sani mpor tantcor r
ect i
onf orr egional surv ey s
butcangener all
ybei gnoredi ndet ailedlocal sur veys.
Iftheear th’smagnet icf i
eldwer eev erywher enor mal t
ot hesur face,thesy mmet ry
ofmagnet icanomal i
eswoul dr efl
ectonl yt hesy mmet ryoft hecausat i
v ebody .
Asy mmet ri
cal bodywoul dpr oduceasy mmet ricalanomal ylocat eddi rect l
yov er
i
t .Howev er ,themagnet icf iel
di sonl ynormal totheear t
h’ssur f aceatt hemagnet ic
pol es,andl iesati ncr
easi ngl ylowerangl est ot hesur f
acewi t
hdi st
ancef rom
thepol es, andatt heequat orispar all
el t
ot hesur face.Thi smeanst hatmagnet ic
anomal iesar eall,tosomedegr ee, asy mmet ric.Thi sproducesanomal i
esconsi sti
ng
ofaN–Sor ientedpai redmagnet i
cl owandhi gh.Int henor thernhemi spher e,
thel owl iest othenor thoft hehi gh, inthesout hernhemi spher et heopposi teholds
true.Theasy mmet r
ybecomesmor epr onouncedt henear ert ot heequat ort hesur vey

i
sconduct ed.Asar esultoft his, magnet icsur vey sconduct edi nl ow- l
atitudear eas
canbeal mostmeani nglessunl essanappr opr i
at emat hemat ical correctioni sappl i
ed
tothedat a.Thecor r
ectionpr ocessconv ertsanomal iest otheappear ancet hatt hey
woul dhav eiflocatedatamagnet icpol e–t hepr ocessi shenceknownas“ corr ect i
on
tothepol e”.
Othert ransf ormat i
onst hatar enor mal l
ycar r
iedouti ncludecal cul at
ionofv er t
ical
derivati
v es,andupwar dcont i
nuat ion.Fi rstandsecondder ivat i
v esar eusedt o
enhance hi gh f requencysi gnal s and hel pr esolve cl oselyspaced t rends and t he
l
ocat ions
offaul t
sandshar pdomai nmar gins.Upwar dcont i
nuation, whi chsuppr esses
thehi ghf requencyf eatures,maybeofv aluei nr ecognizi ngbr oaddomai nswi th
diff
erentbackgr oundmagnet ici ntensi ty
.
Imagepr ocessi ngconsi stsofassi gningsunangl esandcol our s, andcombi ning
themagnet i
ci mageswi thothert ypesofdat a.Sunangl esar ecommonl yar r
ivedat
bytrialander rortoenhancepar ti
cul aror i
ent ationswi thpar ticul artrendswi thin
i
ndividual i
mages.Col ourallocat ioni scommonl ydonebyassi gningl imitsf or
eachcol ouront hebasi sofhi stogr am pl otsorl ookupt ablesofmagnet i
cint ensi ties
ofexpect edr ockt ypesi nthesur veyar ea.I nsomecases, greyscal eimagesmay
bemor eusef ulthancol our ,par ti
cul arlyforv ertical deri
v ati
vepl ots.Combi nat i
on
plotsofgr avityandmagnet icdat acommonl yuset hetechni queofov erl
ayinga
greyscal ev erticalder i
vativemagnet icplotov eracol ouredi mageoft hegr av i
ty.
Anot hercommonl yusedcombi nat ionisofdet ailedTMImagnet iccont oursov er lain
onabackdr opoft heTMIcol our edi magewi thoutsuni lluminat ion.Speci al
purposei magesmi ghtcombi nemagnet ici mageswi thgeochemi cal data,orwi th
dril
ltracesandcol larshigh-light edf orsi gnificantassay s.

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Asui t
eofi magesi st ypical l
ypr oducedbyabur eauordonei n-house, anda
sy stemat ici nter pr etat i
oncompl et edusi ngasel ect ionoft heav ailabl eimageswhi ch
wor ksbestt ohi ghl i
ghtt heknowngeol ogyormi ner al isat i
on.I nter pr etati
onsmaybe
donewi thequal successon- scr een, orv i
al ightt abl eandsubsequent lycapt ur edasa
digi talfile.1
Basi cint er pret at ioni nv ol vesdef i
ni ngdomai nswi thsi mi larmagnet i
cbackgr ound
andst ruct ur e,def iningl i
near lyext ensi v edi scor dantf eat urest hatar elikelyt obe
faul ts,anddef ini ngt rendl ineswi thint hedi ff erentdomai ns.Aqui ckear l
ypassmay
bewor thdoi ngt oi dent ifydi scr et ehi ghi ntensi tymagnet icf eat ur es, bot hhi ghsand
l
ows, andanyswar msofmagnet i
cdy kes.I ti snotuncommonf orl at eplugsand
dy kest ohav er emnantmagnet ism associ atedwi thr ev er sal ofpol arity.Ataboutt hi
s
stage, mor esubt lef eat ur escant henbet hef ocusofi nv est igat ion, gener al l
yusi ng
exi stinggeol ogymapst ohel pdef i
net heor i
gi noft hemagnet i
cf eat ures, andany
i
nt er est i
ngdepar t uresf rom expect edst ruct ur eandgeol ogy .
Mostmagnet ict ext urei st her esul tofdi ff
er encesi nt heabundanceofmagnet it
e.
Thusamagnet ici nter pr etat i
onwi l
lbecl osel yr el at edt ogeol ogydef inedbyot her
par amet ers, butcanbemar kedl ydi ffer enti nsomeaspect s.Py rrhot it
ecanbean
i
mpor tantmagnet icsour cei nsomeuni tssuchasbl ack( car bonaceous)sl atesand
highergr ademet amor phi cr ocks.Ser pent ini zedul tramaf icr ocksar est rongl ymagnet ic
duet ot hepr esenceoff inemagnet i
te, butmet amor phosedul tramaf i
cmay
hav eonl yal owmagnet i
csuscept ibili
ty .Oxi di zedgr ani teshav est rongmagnet ic
i
nt ensi ty ,wher easmor er educedv ar i
ant sar emagnet ical lyqui et .Uni t
sofi nt ermedi ate
cal cal kal inev ol cani cor igincanbemar kedl ymagnet i
c, andsi mi larly
sedi ment sder iv edf rom t hem.Cont acti nt rusi veaur eol esmaybemagnet ic, par t
icularly
aroundoxi dizedgr anites.Regol i
t huni tswi thconcent rat ionsofmaghemi te,2
par ticular lychannel swi thpi sol i
t i
cmaghemi tegr av els, mayshowadi st i
nct iv emagnet i
c
response.Al ter at ionassoci atedwi thhy drot her mal flui dspr ov idesanenhanced
magnet i
cr esponsei nsomecases, andr educesi ti not her s.Regi onal met asomat i
c
enhancementanddepl etionofmagnet i
cr esponsei schar act erist i
cofsomear eas.
Compar ison ofmagnet i
cs and mapped geol ogy of ten gi ves good gui delines f or
proj ect i
ng
geol ogyi ntocov er edar easusi ngmagnet ics.Suscept ibilitymeasur ement s
from cor eandRCchi psi nmi ner alizedar easar eof teni nf ormat iveandhel pf ul.
Directsear chf ormagnet i
ct ar get sr el at edt omi ner alizat ioni sani mpor t
antexpl oration
techni que, par ticul arl
yi nt hosepr ov inceswi thi r
onor econcent rat ionsi n
BandedI ronFor mat ions, IOCGmi ner al izat ionst yles, str ongl yoxi di zedpor phy ry
copperi nt rusi ves, magnet iteskar ns, orpy rrhot ite-bear ingmassi vesul phi des.I nsuch
cases, promi si
nganomal iesar egener allyi dent i
f i
edf rom hi ghqual itylowl ev el
aer omagnet i
cs, andf ollowedupbygr oundmagnet omet ert rav er sesandmagnet ic
model li
ngt odef ineadr il
l target .Magnet icshav ebeenusedt odef inesubt l
eexpl oration
target ssuchasheav ymi ner alconcent r ationsi npal aeo- st randl ines, faultl i
nes
throughr egol i
thwhi chappeart ohav econt rol ledf av our abl eopal distribut i
on, and
pot ent ial ironor eandgol dor ebodi esi npal aeo- dr ainagewi thmaghemi ti
cgr av el
s.
Exampl esofor ebodi est hathav ebeenf oundl ar gel yasar esul toft heirmagnet ic
responsear el egi on, butper hapst hebestr ecentexampl esar et heAust ralianI OCG3
deposi tssuchasOl ympi cDam ( Reev eetal .
, 1990) ,Pr omi nentHi ll (
Bel per ioetal .,

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2007)andEr nestHenr y( Ry an, 1998) .Inanot herexampl e, t

heBr oken- Hil
l t
ype,
stratifor m, sediment -hostedZn/ Pd/Agdeposi tofCanni ngt onwasal sof oundast he
resultofdr i
lltestinganai rmagnet icanomal y( causedbyassoci atedpy rrhoti
te)in
anar eaoft hicky oungercov er( Waltersetal .
, 2002) .
Inar easwher eexpl orationi sconduct edforor ebodi esbel owcov erunits,fi
rst
passest imat esoft hedept ht omagnet icbasementcanbemadef rom aer omagnet i
c
datausi nganumberofdi ff erenttechni ques.TheNaudy 4t echniquei sacommonl y
usedmet hod.
Combi ningaer omagnet ici nterpretationwi thst udyofr egi onalgrav i
tyandr adiomet r
ic
data( Sect s.9. 3and9. 4)maypr oducef ur
thergai nsint hei nterpretati
on
2Maghemi tei soft heunder l
yingrocks.I npar ticular,differentgr anit
esui tesmayhav e
disti
nct ive
radiomet ricr atios.
Indev elopedcount r i
es,regi onal ,r
elativelysmal l
-scalemagnet icmapsar eusual l
y
fl
ownbyt hegov ernmentandar eavai l
ableindi gi t
al f
orm orst andar dmap- sheet
format( ascont oursorpi xel s)from gov er
nmentsur veyagenci es.Suchmapsmaynot
bev er ydet ai
ledbutgener allydopr ov ideacompr ehensiv er egi
onal over v
iew.Lar ge
explor at iongr oupswi lloftencont ractt oflythei rownaer omagnet i
csur veysov er
theirt enement sati ncreasi ngl ydetailedscal es.I nsomeest abl
ishedmi ningcamps,
geophy sical sur veycompani eshav ef l
ownl argear easofdet ai
ledmagnet icimager y
onaspecul at i
vebasi s,andt heyof fert hesedat a( orsub- setsoft hem)f orpur chase
bymi ner al explor ers.

GravitySur vey s
Grav i
tysur vey smeasur elat eral changesi nt hedensi tyofsubsur facer ocks.The
i
nst r
umentused, cal ledagr avimet er,isinef fectanext remel ysensi t
ivewei ghing
machi ne.Bywei ghi ngast andar dmassataser iesofsur facest ations, thegrav imet er
detect smi nut echangesi ngr av i
t ycausedbycr ustal densi t
ydi ffer ences.Mapsof
gravityv ariationcanhencebeusedt omapsubsur facedi stribut ionofr ocksand
structur es,incl udi ngt heanomal ousdensi tydi st ri
but i
onst hatmi ghtbeassoci ated
withconceal edor e.
Topr ov ideusabl edat a,rawgr avitymeasur ement sneedt obecor rect ed.Thef irst
correct i
on( forshor t-
t erm dr iftint hei nst rument )i
spr ovidedbyr egul arreadingof
abasest ationi nmucht hesamemannerasamagnet i
csur v ey .Thesecondcor recti
on
compensat esf ort hebr oadscal ev ar i
ationsi nt heear th’
sgr av i
tat ional fi
eld–
thi
scor rectioni sonl ysi gni fi
canti nr egional sur veys.Thet hirdcor rection,much
themosti mpor tantone, cor rectsf ordi ff
er encesi ngr avit
ycausedbyv ari
ati
oni n
theel ev ati
onoft hesur veyst ationabov eadat um, usual lyseal ev el.Tomaket his
correct i
on, st ationsneedt obel ev elledwi thgr eatpr ecision–i nt hecaseofav ery
broadr egional sur v eyt oatl eastonemet re; int hecaseofadet ai l
edsur veyaimedat
dir
ector elocat ion, tocor r
espondi ngl ygr eat eraccur acies, downt ocent i
met r
escal e.
Thecost sinv olv edi nt hev er yaccur at esur v eyingnecessar yf oral ti
tudecor rection
has, unt ilr
ecent ly, gener all
yr est ri
ct edt heuseofgr av i
tysur v ey si nmi neral
explor ationt ol ow- densi ty, broad- scal e, r
egi onal cov erage.Howev er ,diff
erential
GPS( DGPS)sur v ey i
ngnowal l
owsr api dandr elati
v elycheapl ev ellingofst ations
andhasmadedet ailedgr av i
tysur vey scompar ablei ncostt ot hatofgr ound-magnet ic

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surveys.
Agoodexampl eoft hesuccessfuluseofagr avi
tysur veyasanaidinorediscov ery
i
st helocat
ionoft hehigh-gradeHishi
kariepithermal golddeposi
tofJapan
(I
zawaetal .,
1990) .Here,
adet ai
ledgravi
tysur veywasusedt odefi
neabur ied
minerali
zedstructureinanar eaofknownmi neral
ization.Thekeytothesuccessf ul
useoft hetechniqueinthi
scasewast hehi ghdegr eeofunderstandi
ngoft he
l
ocal geol
ogyandmi neral
izati
on,whichwasusedi nt hedesignandinter
pretati
on
ofthesurvey.Grav i
tysurv
ey s(al
ongwi t
hr egionalaeromagnet i
cdata)al
sopl ayed

asignifi
cantpar tint hedi scoveryofthegiantdeeplybur i
edOlympicDam (Rutter
andEsdal e,1985)andPr omi nentHil
l(Bel
perioetal.,2007)IOCGdepositsofSout h
Australi
a.
Model l
ingoft hegr av i
tyresponsef ortheli
kelyrangeofsi ze,
depth,andSG
oftargetsi sanimpor t
antr eali
tycheckbeforethet echniqueisusedfordi
rect
exploration.InsomeAust ral
ianregoli
thsetti
ngs,undefinedgeomet ri
esofvar
iable
densitymat er
iali
nt her egoli
thcanpr oduceambi guousgr avi
tyresul
tsandspur i
ous
anomal ies.

Radi omet r i
cSur vey s
Thesesur v ey smeasur et henat ural radi at i
onemi tt
edbyr ocksatsur f
ace.Thedat a
are col l
ect ed and pr esent ed i n a si mi l
ar way t o magnet i
c dat a.Radi omet ri
c
measur ement s
areof t
encar riedoutf r om al ow- flyi
ngai r craftatthesamet imeasai r
magnet icsur veys.Radi omet ri
cmeasur ement scanal sobet akenwi thland- based
i
nst rument st hatcanbeusedatgr oundst at i
onsorl ower eddowndr i
l
l holes.The
i
nst rumentusedi scal ledaspect romet er .
Themostabundantnat urall
yoccur ringr adi oacti
veel ementi nt hecr usti st he
pot assium i sot ope 40K,l argel yi ncor porated i ntot he cr ystalst ruct ure of t he
rockf ormi ng
mi neral or thocl ase.Ofl esseri mpor tanceasasour ceofr adiationi s
thor i
um ( foundi nmonazi te,anaccessor ymi neralofsomegr ani teandpegmat i
te
bodi es).Ther adi oacti
v emi ner alnor mal lysoughtbyexpl orers–ur anium –i sseldom
abundant ,butatl owconcent rationscanchar act
erizepar ti
cularr ockssuchas
highlyf ract ionat edgr ani tesorsomebl ackshal esequences.Spect romet er spr ovide
select ablechannel ssot hatr adiat i
onder iv edf r
om t hesedi f
fer entsour cescanbe
distingui shed.Si ncemostnat ural radi ationcomesf rom pot assi um, mapsoft otal
radiationcountpr ovi
deav er yef fectiv ewayofmappi ngt hedi stribut i
onofal kali
c
i
gneousr ockandofsedi ment s( suchasar kose)der ivedf r
om t heser ocks.Monazi te
weat her sf rom bedr ock t of orm ar esistant heav y det ritalmi ner alt hat often
accumul ates
i
nwat ercour sesorst randl i
nes.Fort hi sr eason, thesef eaturesof t
enst andout
ont het hor i
um channel ofr adi omet r i
cmaps.Mapspr esent i
ngr at i
osofr adi omet ric
measur ement smadei ndi fferentchannel s, suchasU/ ThandK/ Ucanbev eryusef ul
fordi scrimi nat ingdi f
fer entr ockt ypes.Di fferentgrani tesui t
esmayhav edi stincti
ve
radiomet ricr at i
os.Radi omet ri
ci mageshav enodept hpenet rationanddependon
signal sfr om sur facemat erials,sot heycanbepar ti
cul arlyusef ul i
naddi ngv alueto
regol i
thmaps.

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Elect romagnet ic(EM)Sur vey s

Elect romagnet i
csur vey sai mt omeasur et heconduct ivityofr ocks, eitherbymaki ng
useofnat ural l
yoccur ringel ect romagnet icf ieldsi nthecr ust ,orbyappl yi
ngan
ext ernalel ect romagnet i
cf ield( thepr imar yf ield)andi nduci ngacur rentt of l
ow in
conduct i
v er ocksbel ow.Passi nganal ternat i
ngcur rentt hr oughawi reorcoi l,whi ch
i
sei therl aidoutal ongt hegr oundormount edi nanai rcraf tflyi
ngov erhead, prov ides
thepr i
mar yf ield.Thecur renti nducedi nconduct iverockspr oducesasecondar y
fi
el d.Int erferenceef fect sbet weent hepr imar yandsecondar yf ieldspr ov i
deameans
ofl ocat ingt heconduct iver ockbody .
Sincemanymassi vemet al sulphi deor ebodi esar esigni ficant l
yconduct i
v e,EM
techni quesar emost lyusedasdi rector e- tar getingt ool sint hesear chf ort histy peof
deposi t.
EM sy stemswor kbestf oror ebodi eswi thin0–200m oft hesur face.Al though,
theor et i
cal l
y ,largerpr i
mar yf ieldsandmor ewi del yspacedel ect rodescangi vemuch
deeperpenet rati
on, t
hepr obl emsofi nt erpr et i
ngt heresul t
sofEM sur vey sgoup
exponent iall
ywi thincr easi ngdept hofpenet ration.
Gr oundbasedEM t echni quesar er elat ivelyexpensi v
epr ocedur est hatar eappl icabl e
todef iningdr il
ltargetsf orspeci ficmi ner alizat ionst yleswi thinest ablished
prospect sorhi ghlypr ospect ivebel ts.EM sy stemsar eav ai l
ablewhi chcanbeused
downdr i
llhol est omeasur et heef f
ect sofcur r
ent sflowi ngbet weent hehol eandt he
groundsur faceorbet weenadj acenthol es.Ai rbor nesy st emshav ebeenusedbot h
fordi rector el ocationandf orregi onal geol ogi cal mappi ngpur poses.
Pr oblemsi ni nterpretingEM sur vey sar isebecausemanyhostr ockst omi neralization
cangi v easi mi l
argeophy sical responset ot hemi neralizationi tsel f
.
Wat er-fi
lledf aul tli
nes, gr aphi ti
cshal esandmagnet i
te-richzonesal lcangi vespur i
ous
conduct i
v i
tyanomal i
es.Deepweat her i
ngorsal tygr oundwat ercanmakeEM
sur vey sei therunwor kabl eoratl eastv er ydi fficulttoi nter pret.Fort hisr eason, EM
sur vey shav ehadmostsuccessi nlocat ingor eint hosepar t
soft hewor ldwher e
fresh, unoxi dizedr ocksoccurcl oset ot hesur face.Thesecondi tionsoccur ,
forexampl e,
i
nt her ecent lyglaciatedar easofNor thAmer i
ca, norther nEur opeandRussi a.
Not abl esuccesseswher eai rborneEM t echni queshav epl ay edamaj orr oleindi scovery
i
ncl udet hemassi v
esul phi dedeposi t sofKi ddCr eeki nCanada( Bleekerand
Hest er,1999)andCr andoni ntheUni tedSt ates( LambeandRowe, 1987) .

ElectricalSurveys
Electricalsurveysareal lgr oundbased.I ntheirsimplestform, theyputanel ectri
c
currentdi r
ectlyi
nt othegr oundandmeasur e, bymeansofar r
ay sofr eceiver
s,the
resistanceoft her ockst hroughwhi cht hecur r
entpasses.Suchsur veysar etherefor
e
oftencal l
edr esi
stivit
ysur veys.Currentisnormal l
yconduct edt hrought hegr ound
byt hemov ementofchar gedi onsinpor efl
uids.Met al
li
csul phides, whichcanconduct
electri
ccur rentelectronically,canoftenbedet ect
edaszonesofanomal ously
l
owr esistance.
IPisaspeci alty
peofel ect ri
calsurveythatutili
zestheelectrochemi cal(galv
anic)
effectscausedbyacur r
entpassi ngthroughdi sseminatedmet alsulphides.Thecur rent
createsanel ect
ro-chemi cal chargeont heboundar i
esoft hesul phidegr ai
ns

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wher et hef l
owofcur r entchangesf rom i oni ct oel ect r onic( andv icev er sa).Suchr ocks
aresai dt obechar geabl e.Whent hepr i
mar ycur renti sswi tchedof f,thedecay
oft hissecondar yv oltagecanbedet ect ed, andsopr ov idesameasur ementoft he
sizeandposi tionoft hechar geabl ebody .Inducedpol arizationi sv irtual lytheonl y
geophy sical met hodt hati scapabl eofdi rect l
ydet ect ingconceal ed, dissemi nat ed
sulphi desi nt hegr ound.Af termagnet i
csur v
ey s, thei nducedpol arizat ion( IP)t echni que
i
soneoft heol destgeophy sical met hodst obeusedi nmi ner al expl or ation
witht hef i
r stpat entappl icat i
on( byt heFr enchmanConr adSchl umber ger )bei ng
fi
ledi n1912( Mat hewsandZonge, 2003) .
InIPsur v ey s, resul tsar enor mal lypr esent edi nt hef orm ofpseudo- sect ions.
Such “ sect ions” ar e mer ely a conv enient way of r epr esent ing t he el ectri
cal
measur ement s
andt hecont our edshapesoft hedat aont hem r eflectmeasur ementgeomet ry5
rathert hant hegeomet r
yoft hecausat i
v ebody .Such“ sect ions”cannotber eadi l
y
equat ed wi thar ealgeol ogi calsect ionand need t o bei nter pr etedbyaspeci ali
st
geophy sici st.
Howev er ,t heuseofmoder ni nv ersionmodel l
ingsof twar e(seef ollowi ng
sect i
on)wi llhopef ullymakeI Ppseudo- sect i
onsat hi ngoft hepast .Anexampl eof
thesuccessf ul useofanI Psur veyi si nt hedi scov er yoft hebl ind, sedi ment -host ed,
l
ead/ zincsul phi deGor tdrur ndeposi tofI reland( HitzmanandLar ge, 1986) .The
SanNi col asVMSdeposi ti nMexi cowasal sodi scov er edasar esul tofanI Psur v
ey
(Johnsonetal .
, 2000) .
Electr i
cal sur vey sr equi reagener atorcapabl eofdel iver i
ngahi ghv ol t
ageand
electrodespl aceddi rect l
yi ntot hegr oundt ot ransmi tt hei nputcur r ent .Ar r
ay s
ofr ecei v ersl ai dal ongt hegr oundmeasur er esi stivityorchar geabi lity.Thesur v eys
arer elat ivel yexpensi veandl abouri ntensi vet echni ques.Theyar et her ef ore
usedasdi rector e-tar get ingt ool sinest abl ishedpr ospect swher et hepr esenceof
dissemi nat edmet al li
csul phideor eissuspect ed.
Probl emsi nusi ngel ect rical sur vey scanbecausedbyt heshor t-circui tingef fect s
ont hei nputcur rentt hatcanbecausedbysal tynear -
sur facegr oundwat erindeepl y
weat her edt er rain.Pr obl emsi ni nt erpretat i
onr esul tf r
om t hef actt hatmanyzones
withinr ocks, ot hert hanbodi esofmassi veordi ssemi nat edsul phi des, hav el ow
electrical resi st anceorar echar geabl e.
Electr i
cal met hods, aswi thel ect romagnet icmet hods, wor kbesti nt heupperf ew
hundr edmet resoft hesur facei nar easwher er ecentupl iftander osi on, orglaci ation,
haspr oducedf reshunweat her edr ocksr elativel ycl oset ot hesur f
ace.

Hy br
idElectricalandMagnet i
cSur veys
Theset echniquesputanel ectr
iccurrent( t
heprimarycurr
ent)direct
lyintothe
groundv iaapai rofburi
edelectrodesinmucht hesamemannerasf oraconv enti
onal
el
ectricalsurvey.Howev er,
rat
hert hanmeasur i
ngt heret
urnvoltagewi thanotherset
ofgroundel ectrodes,amagnet omet erisemploy edtomeasur ethemagnet i
cfiel
dsthat
areinducedbyt heprimaryandsecondar ycur
rents.Thi
screatesmuchf aster
andcheapersur veylogi
sti
csthanconv enti
onalEM orIP,si
ncet hereturnsignalcan
bemeasur edatadi stance.Thev ariat
ionsint heinducedmagnet i
cf i
eldscanbe
measur ed

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andanal ysedi nbot hspaceandt ime.Thet echniquei scapabl eofpr oduci ng

magnet i
c, resist i
v i
tyandchar geabi l
itydat ainonesur veyoper ation.Thet echni ques
are al so capabl e ofmeasur ing r eturn signalsi n ar eas wher e conduct i
v e sur
face
ov erbur den
prev ent sgr ound- cont actsur v ey sf r
om obt ainingmeani ngfulinf ormat ion.
Placi ngt hepr i
mar ycur rentel ectrodesal ongt hest ri
keofanypost ulat edmi nerali
sat
ion
channel st hecur rental ongt heconduct ivebodyandsoi ncreasest hemagnet ic
signal .
Wi tht heMMR/ MI Pt echni que( Howl andRose, 1984) ,themagnet i
cf ield
i
nducedbyt hepr imar ycur r
enti susedt omeasur et heMagnet omet ricResi stivi
ty
(MMR)oft hegr oundt hroughwhi cht hecur r
enthaspassed.Thesecondar ymagnet i
c
fi
el dt hati si nducedbygal vani cef fectsont hecont act sofchar geabl emat er i
al
(i
.e.di ssemi nat edsul phi des)i susedt ocal culatetheMagnet icI nducedPol arisati
on
(MI P)oft her etur ncur rentpat h.Ther esultsareusual l
ypr esent edascont ouror
pixel pl answhi chcanbei nter pret edlikeageol ogical mapt oal lowdeduct i
onsast o
theshapeandsi zeandpossi bl ecausat i
onofanyanomal ousbodi es.
TheSubAudi o6Magnet icst echni queorSAM ( Cattachetal .,1993)i sanev olution/
dev elopmentofMMR/ MI Pt hatmakesuseofmoder nsophi st i
cat edel ectronic
equi pmentandcomput ingpowert oincreaset her apidi t
yoff iel dsur v eyingand
thedef i
ni t
ionandr esol utionoft her esults.SAM sur vey sofferv eryhi ghdef init
ion
measur ement sbyt heusear api dsampl i
ngt otalfi
eldmagnet omet er( capabl e
of200r eadi ngspersecond)t hatacqui ressub- met ermeasur ement swhi l
econt i
nuously
traver singei theronf oot , byv ehi cleorev enhel i
copt er.Thepr oduct s( wi t
h
unpr onounceabl e,jaw- cr acki ngacr ony ms)ofasi ngl eSAM sur v eycani nclude:
total fieldhi ghdef i
ni ti
onmagnet ics( TFHDM) ,
total fi
eldmagnet omet ricresistivi
ty
(TFMMR) ,total fieldmagnet omet r i
cinducedpol arisation( TFMI P)andt otal fi
eld
electr omagnet ics( TFEM) .TheTFMMRdet ectsv ari
at i
onsi nt hest rikedi rection
oft het ransmi tterel ect rodessocanbeauni quelyef f
icientmapperoft hemor e
conduct iver egionsoft hesubsur facesuchaspal eochannel sorzonesofdeeper
weat her ing.Theser esponsesmaymaskt hemor esubt lesignal sf rom conduct ive
bedr ockl ithologi esormet alli
cor es.

Str
eam Sedi mentSampl ing
Activesedi ment sint hechannel sofst reamsandr iver
scancont ainlowl evelsofmet al
s
derivedf rom weat her i
ngofmi nerali
zedr ockswi t
hintheupst ream catchment .
Thissimpl efactist hebasi sforst r
eam sedi mentsampl ing–oneoft hemostwi del
y
usedmet hodsinregi onal geochemi cal prospect i
ng.Thet echniquehaspl ayeda
maj orpar tinthedi scov eryofmanyor ebodi es,agoodexampl ebeingthedi scovery
ofthePangunapor phy rycopper /
golddeposi tonBougainv i
ll
eI sl
and,Papua
NewGui nea(BaumerandFr aser,1975) .Fort hetechniquet owor kwithmaxi mum
eff
ect i
veness, ideallythef oll
owingcondi ti
onsshoul dbemet :
•Thear eashoul dbeoneofact i
veer osionwi thaninci
seddr ainagepat tern.
•Thei deal sampl epoi nti sonapr imar ydr ainagewithar elati
velysmal lupstream
catchment .Evenv er ylargeanomal iesar er apidl
ydilut
edi nsecondar yort erti
ary
str
eams.
•Onl ytheact ivesedi mentont hest r
eam bedshoul dbesampl ed.Bankmat erial
maybel ocall
yderiv edandnotr epresent ativeofthewhol ecat chment .

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•Int heabsenceofanor ientationsur veyt odef inet heideal sampl esi zefraction,
thesi ltfract i
onoft hestream sedi ment( usual l
yspeci fiedas–80mesh8)shoul d
becol l
ect ed.I nfastfl
owingst reamsal argev olumeofsedi mentmayhav et obe
sievedi nor dertocollectasampl eofsui tablewei ghtf orassay( atleast50gbut
prefer ably100gi sneeded).Sievingt her eforehast obedoneatsi teandisbest
donebywashi ngagr absampl ethr ought hemeshoft hesi eve.Themostr ugged
andbestsi ev esforfi
eldusear emadeofst ai
nlessst eel wi thstainlesssteel mesh
(Fig.9. 1g).Si evedsampl esareusual l
yst oredinsmal lKr af tpaperenv el
opeswi th
sealabl ef old-overtops(Fig.9.2c, d) .
•Asmuchdet ai
laspossibleaboutt hesampl esiteshoul dber ecor ded.Asami nimum
thiswi llincludet hefoll
owingi nformat ion: str
eam wi dthandf low, natureof
thecoar sef l
oatandnat ureofanyout croppr esent .Thi si nformat i
onwi l
lbei nvaluabl
e
whent heassayr esult
sar elateranal ysedandpot ential anomal ousv al
ues
select edf orf oll
ow-up.
•Fol l
ow- upofanomal ieswillusual lytaket hef orm ofst ream sedi mentsampl ing
upst ream, alongt heanomal ousdr ainage, t
odef i
net hepoi ntofent ryof
theanomal ousmet altothest ream sedi ment .Furtherdef initi
onoft hesour cecan
thenbecar r i
edoutbymeansofsoi lsampl ingont hesl opesabov et heanomal ous
drainage

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Soi lSampl ing

Thi st echni quer eliesont hef actt hatmet alsder ivedf rom t heweat heringofsub
croppi ngor eof tenf orm awi de, nearsur facedi sper si onhal oar oundoradj acent
to, thedeposi t.Wi tht heabi li
tyofchemi cal anal ysist odet ectv er ylowel ement
abundance, ar egul arlyspacedsampl i
nggr idcant husl ocat et hesur face“ foot print”
oft heor ebody .Si gnif i
cantanomal iesmaybeoft het ar getmet al orofel ement st hat
areknownt obeassoci at edwi tht hest y l
eofmi ner al i
zat ionsought .Asar el
at i
vel
y
expensi vet echni que, soi lsampl ingi st y
pi cal l
yempl oy edi nt he
det ai ledexpl orat ionofpr ospect ivemi ner al belt
sorest abl i
shedpr ospect s,wher ei tis
usedt odef inespeci fict arget sf orf ol l
ow- updr i
lltest i
ng.Agoodr ecentexampl eof
thesuccessf ul useoft hemet hodi st hedi scov eryoft heCent ur ysedi ment -host ed
zincdeposi tint heMountI saDi strictofQueensl and, Aust ral i
a( Br oadbentand
Wal tho, 1998) .
Thesampl ecol lect edf orassayi susual lyt hef i
nesi l
tyorcl ay eysur facemat erial
thatr esul tsf rom weat her i
ngoft heunder lyingbedr ockandmaycont ainsmal l
fragment s ofbedr ock.A coar se si eve( –10 mesh)maybe necessar yt or emov e
ov er lar ge
fragment sbef or et akingt hesampl e.Thesampl ei snor mal lyt akenf rom just
bel owt heor gani c-richsur facegr ass- root sl ayer.Asmal lpickormat t
ocki sused
fort hi sj ob–t he“ pelicanpi ck”( Fi g.9. 1d)–i sideal asi tal lowst hesampl et obe
col l
ect edwi thoutst oopi ngandsl ideasi lyint oasampl ebagwi thmi nimum handl i
ng.
Insomear eas( suchasr ainf orest )ahandauger( Fig.9. 1a)maybeneededt o
obt ai nt hesampl e.Sampl esar enor mal lyst oredi ncal i
cobagswi thdr aw- stri
ngt ops
(Fig.9. 2a) .
Notal l soi l
sar ei nsi tur esidual accumul at i
onsofweat her edbedr ock.Theymay ,
forexampl e, hav ebeent r
anspor tedf orsomedi stancel ater all
yf rom t heirsour ce
byt heact ionofgr av i
ty, windorr ain.Thesoi l
smaybepar tofal andscapewi tha
l
onghi st oryofev olution.Thathi stor ymi ghthav ei nv olv edv ariabl ewat ertabl esand
cy clesofchemi cal enr ichmentanddepl etion.Toadequat elyi nt erprett her esultsofa
soi lsur v eyi tist her ef oreessent ial tohav eanunder st andi ngoft her egolith9ofwhi ch
theyar eapar t.Regol ithscanhav el ongandcompl exev olut ionar yhistoriesandneed
tobegeol ogi cal lymappedandi nt erpret edpr iortopl anni ngasoi lgeochemi st r
y
sur v ey , i
nor dert odef inet hosear eassui tabl efort hist ypeofsampl i
ng.
Ingol dex plor ation, veryl owconcent rationsoft hemet al i
nsoi l sampl escan
bedet ermi nedbyempl oyingt heBul kLeachExt ractabl eGol d–orBLEG–assay
techni que.I nt hismet hod, alar gesampl e( 2–5kg)ofsi l
tsi zedmat erialisdi gest ed
forsev eral day si nasodi um cy ani desol ut i
ont oext ractal l cont ainedgol d.The
sol ut ioni sthenassay edf orgol d.Becauseal lthegol df rom al ar gesampl esi zei s
ext ract ed, itispossi blet oobt ainanassayf ortheor iginal sampl eatt hepar tsper
tri
llionl ev el (ppt ).

HeavyMineralConcentr
ate(HMC)Sampl i
ng
Panni
ngstream sediment
stoextractanyheavymineralcomponentisanancient
,
butst
il
lver
yr el
evantandeff
ect
ive,geochemical
prospectingtechni
que.Theheavy
miner
alconcentrat
e(HMC)canbeexami nedatthecoll
ectionsit
etoident
if
yand

quant
if
yit
smi
ner
alcont
ent(
e.g.numberofgr
ainsofgol
d).I
frequi
red,
theconcent
rat
e

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cant henbecol lect edi nt oaKr aftpapersampl eenv el opef orsubsequent

assay .Posi tiver esul tsf rom on- siteexami nat i
oncanbei mmedi at elyf oll
owedup
wi thupst r eam sampl ingunt i
l thesour ceoft heanomal yi slocat ed.
Panni ngr ef erst ot hepr ocesswher ebyasampl eofal luvial orcol luv ial mat eri
al
i
sagi tat edi nwat eri nor dert osepar atemi neralsbyt hei rspeci ficgr av it
y.Todot his
abr oadshal lowdi shorpanwi thadar k- colour edmat tesur f acei sused.Panni ng
dishesr angef rom 30t o40cm di amet er.Thebestonesf ort hepur posesoft he
mi ner al expl or erar e30cm pansmadef rom dar kgr eenpl ast icast hesear el i
ght ,
easi lypor tabl eandal lowbot hgol dgr ainsandt hegener allydar kercol oursofot her
heav ymi ner alst obeeasi l
yobser ved.Moder ndesi gns( Fi g.9. 1f )comewi thr idges
(calledr iffles)moul dedal ongonesi deoft hedi sht ohel pt rapt heheav yconcent rate.
Ski l
l i
npr oduci ngapannedconcent rat esampl eisav eryusef ul onef oran
expl or at ioni stt oacqui re.Her ei sabr iefdescr iptionofhowi ti sdone:
1.Toal argeext ent ,successi npanni ngaheav ymi ner al concent ratecomesi nt he
i
ni ti
al stepofcol lect i
ngt hebestpossi bl einitialsampl ef r om t hest ream bed.
Theai mi st omakeuseoft henat ur al poweroff lowi ngwat ert osepar ateheav y
mi ner al sandconcent rat et hem atpar ticularpl acesi nitsbed.A2–10kgsampl e
(dependi ngont hesi zeoft hedi sh)ofgr av elandsi lti scol l
ect edf rom anat ural
trapi nt hest ream bed–y oumayhav et odi gt ogett hissampl eanduset hepoi nt
ofy ourhammert opr izeoutmat erial trappedi ncr acksandcr ev i
cesofbedr ock.
Tr apsar et heupst ream si deofnat ural rockbar sacr osst hest ream bed, mat erial
from t hebot tom ofsmal lpothol esi nr ockyst r
eam bedsor , gener ally, t
hebot tom
por tionofanygr av el lay eragai nstt hest ream bedr ock.Excl udef rom t hesampl e
anyor gani cmat erial oranyst onesmor et han2–3cm acr oss.I ncl udeanycl ayor
siltthatmi ghtcomewi t ht hesampl eandbi ndt hegr avel/ sandt oget her–t hiswi ll
ber emov edi nt hesubsequentwashi ngpr ocess.
2.Thesampl ei sagi t
at edwi thwat eri nt hepanni ngdi shusi ngal ter nat ingsi de-tosi de
shaki ngandswi rl
ingmot ions.I nthei ni ti
al stagesy oumayhav et ogent l
y
agi tatet hesampl ewi thy ourf inger st owashof fcl ayandf i
nesi ltandf r
eeup
thev isibl egr ai nsofr ockandmi ner al .Ifdonet hor oughl yt heagi tationensur es
thatt heheav iermi ner al gr ainswi thint hesampl eset tl
et ot hebot tom oft hedi sh.
Ast hepr ocesspr oceeds, largerst ones, coar segr av el andt hel essheav yfract i
on
oft hewashdi r tf rom t het opoft hesampl ei spr ogr essi v elydi scar ded.Af tera
numberofcy cl esofal t ernat eagi tat ionanddi scar di ng, thesampl ei sr educedt oa
smal l amountofheav ymi ner al concent rateaccompani edbysomer esidual sand
i
nt hebot tom oft hedi sh.Agent l
eswi rlingmot i
onusi ngcl eanwat eri st hen
empl oy edt ogr adual lywi nnowt hisr emai ningf ract ionunt ilonl yt heheav ymi ner als
arel ef tasaV- shaped“ tail”runni ngar oundt hebaseoft hepan.Theheav i
est
mi ner al swi l
l lieatt hepoi ntoft hev ee.Thi ssampl ecanbeexami nedwi t
hahand
l
enst oseehowmanycol our sofgol dorot herheav ymi ner al ar epr esent .
Awr i
tt endescr ipt i
onsuchast hisofhowt opanaheav ymi ner al sampl eisof
l
imi tedv al uecompar edt oact uallyobser vi
nganexper tpanneratwor k.Failing

thi
s,someexcell
entvideosofpanni
ngtechni
quescanbef oundont heint
ernet(
just
search“
goldpanning”onYou-Tube)
.
Alt
houghcounti
ngt henumberofgrai
nsofapar t
icul
arheavymineralcangive
animmediatequantit
ati
veresul
tfr
om heavymineral
panning,i
tismor ecommon

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i
nmi neralexpl orat
ionfortheentir
eheav ymi
neral concentrat
esampl e(usual
l
y
accompani edbyasmal lamountofquartzsand)tobecol l
ectedforchemicalassay
.
Heavymi ner alsamplingiswidelyemployedtolocat enati
veelementssuch
asgoldgr ains,10plati
num, di
amondsandheav yresistantmineralgr
ainssuchas
magnet i
te,zi r
conium,i l
menit
e,r uti
l
e monazi te and cassi t
eri
te. Heavy miner
al
i
dentif
ication
i
sawi delyusedt echniqueinthesearchfort
hei ndicatormineral
sof
ki
mber li
tepi pes.

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Uni
t2Sampl
ing
Sampling
Sampli
ngisapr ocessofobt
aini
ngasmallrepresent
ati
vepartofawholerockmasst
o
repr
esentthewhole.Thesampleist
akenforanalysi
sofassayval
ues,
mi neral
compositi
on,t
extureorafi
eldspeci
men.

Economicminer
aldeposit
saresampledtoascert
aint
hegradeofminer
als,
whi
chis
someti
mes
deci
siv
eforthecommer ci
alev
aluati
onofadeposit
.Thi
sisachi
evedbytaki
ngsampl
es
fr
om
mineopeni
ngs,bor
eholesandnat ur
alexposur
es.

Ther esul t
sofsampl ingfurnishthenecessaryinformat i
onfordetermini
ngthemean
thi
cknessof
mi ner albodi esandt heav eragecontentoftheusef ulconsti
tuenttherei
n;t
heyhel
p
studyt he
techni cal andt echnologi
cal propert
iesofusefulminer al
s,deli
neatetheminer
albodi
es,
det ermi ne
cor relationofi ndivi
dualconst i
tuent
sandel ementsi ntheore,establi
shthepr
ior
it
yin
mi ningt he
mi ner als,theirlossesanddi lut
ionduringexpl
oitati
on.

Sampl ingmaybechemi cal,mineral

ogi cal, t
echni cal andt echnological.
1.Chemi cal: Samplesar et akenfordet er miningt hecont entofusef ulandsecondar y
component s.
2.Mi neralogi cal:I
tisdonet oascert
aint hemi ner al andpet rographi
cal composi t
ionof
themi ner al.Ithelpstoest abli
shtheor i
gi noft hedeposi t,thedependencesgov erning
grade
vari
at i
onsandal sot oplant heoredressi ngandbenef i
ciati
on.
3.Techni cal :Sampl esar etakentost udyt hetechni calproperti
esoft her awmat erial
,
which
doesnotr equiremet al
lurgicalorchemi cal t
reatment .Thusi nt hecaseofbui ldi
ngst one,
i
tis
thei
rbear i
ngcapaci ty,
int hecaseofasbest os–t hel ength,str
engthandf l
exibi
li
tyof
fi
bres;
mica–t hesi ze;sandandgr avel–gr ainsi zedi stribution,etc.
4.Technol ogical:Sampl esar ecoll
ectedf orthest udyoft hetechnologicalproperti
esof
theraw
mat eri
al i
nt hecour seofi t
sbenef i
ciationandpr ocessi ng.Inthecaseofcoal s,for
exampl e,
apartfrom t heirbenefi
ciationproperties, i
tisnecessar yt oestabli
sht hei
rbriquett
ing
and

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uat
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cs

cokingqual it
iesandt hey i
eldofl
iquidproducts.
Besidest heseabov e-
ment i
onedtypesofsampl i
ngs,ther
eexistgeophysi
calsampli
ng,
which
enableonet odef i
nethephy si
calproperti
esofr ocksandoreswi t
houtcoll
ecti
ngactual
sampl es;
andi nthecaseofr adioacti
veandsomeot heror es,
todeter
mi nethemetalcontent
ther
ein.
Thepr ocessofsampl ingfall
sint
osev eralstages:
1.Takingofsampl es,
2.Theirpr ocessing,
3.Labor atorystudiesofthesampl e(assaying),and
4.Anal y
sisoft helabor at
oryfi
ndi
ngs.

Purposeofsampl i
ng
Inordertoascer
tainwhetheranor ebodyi slikelytoprovetobeawor kableproposit
ion,
i
tisfir
stnecessarytoascertai
nitssizeandv aluebyexposi ngsmal lport
ionsoforefor
samplingbymeansofpi tt
ing,tr
enching,bori
ngormi ni
ng.Assayv aluesthusobt ai
ned
arecombi nedwit
hmor phologi
calinfor
mat i
onobt ai
nedfrom mapsandsur veystoarriv
e
atanov erall
est
imateofthepay ableandunpay ablemineralreser
vesi ntheorebody.

Theoryofsampl ing
Samplingistheprocessofestimatingthemi ner
alcontentandotherphy sicaland
chemicalcharact
erist
icsofamassofr ockbyav er
agingthecharacter
isticsinanumber
ofmuchsmal l
erporti
onsderivedfrom thi
smass.Themi ner
alcontentandot her
char
act er
ist
icsofthesmallerport
ionsar eobtai
nedbyassay i
ngthem i ndividual
l
y.

Sampl esshouldbeequal i
nmassandbet akenatequaldistancesfr
om oneanot herin
ordertobet r
ulyrepresent
ativ
eoft hei
rparentbody;i
.e.t
heirzonesofinfl
uencemustbe
equal.Iti
snoteasyt otakesampl esfr
om wi t
hinanorebodyand, unlessdi
amond
dri
ll
ingisresort
edt o,samplesar eusuall
ytakenfrom aroundt heper
imeterofblocksof
ore,parti
cul
arl
yint hecaseoft abularbodi
es, asi
sthepr act
isewithmostgold,plati
num,
chrome, ant
inomyandamosi teasbest osdeposit
swithinZimbabwe
`
Met hodsofsampl ing

Thef ol
lowingmet hodsar egener all
yused: pointorspot ,faceorl ump, channelortr
ench,
dri
llor
shothole,chipandbul ksampl ing.
1.Channel sampl ing:agroov ei scutacrossthest r
ikeoft her ockf ormationorore
body /
reefusi ngadi amondsaw- cut
ter.Achisel i
st henusedt ochi pouttherock
mat eri
alinbet weent hegr oove.Thesampl esar ecol l
ectedatst andar dsample
l
engt hasgov ernedbyt hemi nest andard(classical geostatist
icsor
geological).
Thissampl ingmet hodismostpr eferredf orevaluationandmi neral
reserves/resourcesest i
mat ionst ochi
psampl i
ngbecausei smor eeffecti
veand
i
saudi table.
2.Chi psampl i
ng: thi
ssampl ingi sdonebyahammerandachi sel.Nogr ooveiscut,

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cs

i
ti ssuper fi
cial.Thi si smai nl yusedwer equi ckr esul t
sar eneedede. g.ingui ding
dev elopment sandqui ckgr adeev al uat ions.
3.Gr absampl i
ng: brokenmucksampl esar ecol l
ectedbyshov el orhandatcer tain
ti
mei nter vals,orsampl ingi nter vals, orr andoml ysoast ogett hei ndi cationof
themi ner alval ueoft her espect i
v egr ound.Thi smet hodi sappl iedonst ockpiles,
trammi ng, drawpoi nt s, hoi sts, trucksandconv ey ors.Gr absampl i
ngi sof tendone
forgr adecont rol pur poses.
4.Cor esampl i
ng: thesear esampl esobt ainedf rom di amonddr illi
ng.Thesampl eis
measur edal ongt hecor er unandi sspl itornotspl i
t(dependi ngonQAQC
standar dsandpur pose)bef or ebei ngsentt oassayl abor atory .Cor esampl esar e
cruci al forexpl orationandev aluat ionexer cisesandar er eli
abl e.
5.Sludgesampl ing: sl udgeorpul pf rom j ackhammerdr il
l
ingi scol l
ect eddur ing
drill
ingatknownsampl ei nter v alsast hehol edeepens.Thepul pisassay edand
resul tsar eusedt or oughl yi ndi cat e/ delineat et heor ebodyl i
mi t
sonst opes.
Theser esul tsar enotusedf ormi ner al reser ves/ r
esour cesest imat ionduet ohigh
possi bl econt ami nat i
onl ev els-notr eliabl e.
6.Bul ksampl ing: largequant itiest hannor mal arecol lectedf oranal y ses, mai nlyfor
met allurgical inv est i
gat ionorev aluat i
on( e.g.inal l
uv i
al deposi t
swer emi ner al
distribut ionar er andom) .Bul ksampl ingi sanessent ialpar tofexpl or ati
onand
ev aluat i
onofor es.Lar gesampl esar er equi r
edt ocheckt heaccur acyoft hedril
l
sampl esandt oobt aint heneededi nf or mat i
onont hecr ushingandgr i
nding
char act er i
sticsoft heor easwel l asf orusei ndet ail
edandl arge- scal e
met allurgical test s.I nnat ural ores, bul ksampl esgi v einf ormat ionr egardi ngthe
nat ureandquant i
tiesofv ar i
oussi zedor epr oduct st hatcanbeshi pped
7.Poi ntorSpotSampl ingconsi stsoft akinganumberofequal por t
ionsofa
mi ner al atpoi nt sdi st r
ibut edi nar egul argr i
dov erawor kf aceorami neral
exposur e.Sampl ingmaybedonef rom api leoft hemi nedmi neral andf r om mi ne
car s.Thesesampl esar e, int hemai n, dest inedf orchemi calassay ing.The
numberofpoi ntsmaki ngupani ndi vidual sampl edependsupont heuni for mityof
mi ner alisation.

8.FaceorLumpSampl ing:Thi
smet hodofsampl etaki
ngmayber efer
redtot he
groupofpointsampl i
ng.Onetothreelumpsofr ockaregatheredi nthefaceor
takenfr
om apileofbr okenmineralwi
ththepurposeofdetermi ningt hemineral
,
andsometimes, al
sot hechemicalcompositi
on.Facesampl i
ngi sav erysimple,
quickandcheappr ocedure,
butthetakingsampleisoftendonesubj ecti
vel
yand

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forthisreasontheaccur
acyofthemethodisr
atherl
ow.Thistypeofsampli
ngis
empl oyedinlumpwisemetal
lometer
icsur
veyi
ng.Lar
gepiecesareoccasi
onall
y
coll
ectedf ort
hepurposeofdeter
mini
ngthephysi
calpr
operti
esofthemineral
.

Act
ivi
ty:
Discussadv
ant
agesanddi
sadv
ant
agesofeachmet
hodabov
e?

Gener
alsampl
ingpr
ocedur
e

Equi
pment
Basemap/sur veypl
anwit
hpegs,pan,
cli
nor
ule,
chisel
,diamondsawcutt
er(ifchannel
sampling),
4lbhammer,
samplebags,t
icket
s,st
ri
ngs,crayon,
pai
ntandbrush,canvas
bag,notebook,
penandpenci
l

Pr
otecti
vecl
othi
ng
Over
all
/worksui
t,goggl
es,
glov
es,
har
dhat
,gumboot
s,capl
ampbel
t

Gener
alpr ocedur e
 Hav ingi dent ifiedt hear eat obesampl edonpl anintheof fi
ce, gatherthe
necessar yequi pmentandPPE.I nformt heMi nerinchar geoft hesect i
onwhen
yougeti ntot hesect ionofy ouri ntenti
on.Thi sisdonesot hatt heareai smade
safeandr esour cesmadeav ailablef orsampl ingtopr oceede. g.compr essedair
/
wat er.
 I nspectt hear eat omakesur et hewor kplacei ssafe,badhangi ngsarebar red
downwi t
hhel pofmi ni
ngof fi
cial (
ifany )
 I dent i
f ythear eat obesampl edusi ngt hereferencepegs
 Mar koutt hesampl ingposi tionandsampl elengt hsusingt hecr ayonnot i
ngthe
stri
keoft heshear /reef .Sampl esar etakenatr ight-
angletot hest ri
ke
 Cutt hegr ov esandchi poutt hef ragment swi thachi sel
 Bagt hesampl esandt ickett hem
 Sket cht hesampl edar eaandr ecor dtheticketnumber s
 Secur elytiet hesampl ebagsandputi ntot hecanv asbagandt ransporttothe
l
abor ator y
 Fi l
lthesampl er egisterindupl icateandsubmi ttogetherwithsampl esatt he
l
abor ator yandkeeponef orrecor ds

Qualit
yCont r
ol
I
nor dertocontrolt
hequal ityoftheassayr esul
tssever
alpract
icesar
edonewhi
ch
i
ncludebutnotl i
mitedtot hef oll
owi
ng:
 I ncl
udeassay ingblanksont hebat ches
 St andardsampl es,thel owandhighgr adesamplesatknowninter
val
s
 Repeat s
 Checkassay ing
 St ati
sti
calDat aanalysesandr ecommendat i
ons
 Cor eSampl esplitt
ing
 Sampl i
ngstandar dpr ocedur
eenf orcementandsupervi
sion

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 Tr
aini
ng

Afterassayi
ngthevaluesarepl
ott
edont heassayl
evel
planontheirright
ful
posit
ions
onspace.Hencex, y
,zofthesamplemustbeknown.Iti
st hi
sassayinformati
on
togetherwit
hgeologymodel t
hatareusedfororer
eservesest
imationsand,mine
planningandscheduli
ng.

Sourcesofsamplingerr
ors
1.Contaminati
on-ei
therduringsampli
ng,transpor
tat
ionorassay
ing.
2.Fati
gue
3.Humaner ror
4.Laborat
ory-mixupormachi necali
brati
on
5.Biastowardsoft
ermat er
ialduri
ngchippi
ngorf i
nemateri
alduri
nggrabsampl
i
ng
6.Salt
ing

Err
orsinsamplingmisleadjudgementoft heinf
ormati
onenduser ,
thegeologi
st,and
hencetheenti
remanagement( mining/expl
orat
ion)
.Hencequali
tycont
rolandqualit
y
anal
ysesmeasur esshouldbecr af
ted, i
mplementedandenforcedtoguar
dagai nst
makingcatast
rophicdecisi
ons.

Sampl i
ngofOut crops
Onemet hodofsampl ingi stocutgr oovesatri
ghtanglestothestri
keacrossthe
exposedst rat
aonsur f ace,segregat i
ngsampl esaccordi
ngtot hecont
rastin
appearanceoft hest rat i
fi
edmi nerals.I
flar
gersamplesarerequir
ed, ori
ftheoutcr
op
i
spar ti
allyorcompl et
el ycov er
ed, t
renchingwill
benecessary,theover
burdenoftopsoi
l
beingputononesi de.I nextensivear easwherethenatureofthegroundandsoilare
sui
t abl
eandi fexpendit ureiswar r
ant ed,amechanicaltr
enchermaybeempl oyedto
scoopbul ksampl es.

OpenPitSampl i
ng
Thesampl i
ngofopencastwor ki
ngsvari
esaccordingt
othenatur
eofthemineral
,the
confor
mat i
onofthedeposi
tandt hemini
ngpr ogramme.Usual
l
ynewor ebodi
esoft his
kindwil
lhavebeenfull
ydri
l
ledbydeeppr ospectbore–hol
esandfor
eseeabler
eser ves
thusdel
imitedbefor
edomesticsampli
ngst ar
ts.

Sampli
ngthefloorofawor kingopenpiti
snotpopul
arbecauseofdebr isly
ingonitbut
shoul
dthemet hodbeused, groovesortr
enchesatr
egulari
nterval
smaybeexcav ated
i
nonedirect
ionatrightangles,acr
ossthebandsori
fnobandi ngisapparentalongthe
l
engthandbreadthinasquar epatter
n.I
ftheoutl
ayonconti
nuoust renchesisnot
j
usti
fi
edsamplescoul dbetakenf r
om pit
satthecor
nersonlyofasquar egridpatt
ern.

Alsoasarul
e,i
tisnoteasyorsafetoattempttosampletheside-
wal l
sofanopenpit,
anddomesti
csampl i
ngforgradepurposesisof
tentheref
orecarr
iedoutbycatchi
ng
thechi
psandsludgefrom bl
asti
ngbore-hol
esdri
ll
edaroundtheperipher
yofthepit
.

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cs

Thetaki
ngofgr
absampl
esfrom t
hebr
okenorel
y i
ngont
heor
ebody
,onconv
eyorbel
ts
orf
rom car
sandrai
l
wayt
rucksiscommonpract
ise.

I
nrecentyearssampli
nghasbeenfaci
li
tatedbytheuseofel ectr
oni
cinst
rumentswhi
ch
measuret
heconcent r
ati
onofcer
tai
nmi neral
satthepitface,orint
heassayoff
icei
n
t
heplaceoflabour
iousandmoreexpensiveassayprocedures.

GoldMi neAssay i
ngPr ocedur eForUndergr
oundSampl es
Bulkreductionofmi nesampl es
Justast hesamplet akenf r
om theexposedor eshoul
dber epr
esent ati
veoftheparent
orebody ,soshouldther educedmassoft hesampl epulp,r
equir
edbyt heassay
er,
be
repr
esent at
iveoftheor i
ginalsample.Themassandpar t
icl
esizeoft hesamplepul
p
mustbei npr opor
tiontot hemassandpar ti
clesizeoftheori
ginalsampl e.

Assay
ingpr
ocedur
e

Theor ef
rom under
groundi
sfedt oasmallj
awcrusherandr
educedtoacert
ainsi
ze.
Thesampl ei
sthendivi
dedtoreducetheamountandfedtoapul
veri
zerwher
eitis
reducedto100%lesstha74μ.

A25gsampl
eispl
acedi
naf
ir
ecl
aycr
uci
bleand80-
90goff
luxi
nthef
oll
owi
ng
pr
opor
ti
onsi
sadded:

Li
thar
ge(
PbO) 30%

Sodi
um car
bonat
e(Na2CO3) 45%

Bor
ax(
Na2B4O7) 25%

Mai
zeMeal
(C) 2g

Thecrucibl
eisplacedinar everber
atoryfur
naceat1100˚C.I
tisthenpouredintomoul
d
andcooled.Theleadbeadi sremov edandhammer edintoacubeandpl acedinacupel
i
nthemuf f
lef
urnace.After+/-30mi nutest
hecupelisremoved.TheAu/ Agbeadis
weighedandthemassr ecorded.

Thev
alueof25gsampl
ewi
thacupel
l
edbeadofXmgi
sdet
ermi
nedasf
oll
ows:

1met
ri
ctonne = 1000000mg

Val
ueofsampl
e = 1000000 * X mg
25 1000
= 40*Xg/t

Thegol
dval
uecannowbedet
ermi
nedbysubt
ract
ing10%oft
hemassassi
l
ver

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e Page35
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uat
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cs

Sampl ingCoalMi ne
Under groundsamplingpractiseincoal minesislessstandardisedt hanthatofgold
mines.I tmayv ar
yascondi t
ionsdi f
ferfrom minetomi ne,atgr eensidecoll
i
eryofApex
Mines, sampl i
ngsaremadeabout65m apar t,arubbersheetispl acedont hefloort
o
catcht hefragmentsthatdrop.Thechi pperstart
ssampl ingfrom t hefl
oorupwar ds,
the
whol emi ni
ngheightbeingtreatedasonesampl e.Sampl i
ngdi shesar e20cm inwidtht
o
mat cht hewidthofgroove.Sampl esareplacedin25kgbags.

Sampl ingaCopperMi ne
Or efi
ssur esandbr ecciasar eusuall
ysuffi
cientl
ymassivetobesampl edv i
suall
y.I
n
visualsampl i
ngt helengthoft hecoppermi neralsi
smeasur edprogressivelyal
ong
offsetli
nes1. 5m apar tatright
-anglestothestri
keover2m distances.Thisisdoneby
suitabl
ymodi f
iedcal l
i
per s.Thesampl ercar
r i
esavaluat
ionscalewhi chgi v
esthevalues
fordiff
er entt
y pesofcoppersul phi
desaswel lasforcombinati
onsoft hesesulphi
des.
Af t
erdoi nga2m st retchofsampl i
ngthecalli
perpoi
ntsareplacedont hescaleandthe
valuesr eadoffdirectl
y .

Thev
alueoft
heor
efr
om v
isual
orcal
l
ipersampl
i
ngi
sbasi
cal
l
y:

a*b*c*100 =%Cu
(
a+b)+(A-a)B

Wher
e

a=t
otal
cent
imet
resofcoppersul
phi
demeasur
ed

b=densi
tyoft
hecoppersul
phi
deencount
ered

c=per
cent
agecoppercont
ainedi
nthesul
phi
de

A=di
stanceov
erwhi
chsampl
i
ngwasdone

B=densi
tyoft
hehostr
ock

Thisfor
muladoesnothol
dforal
ltypesofdeposits.Asi
tstandsiti
smoresuit
edt o
deposit
sinvei
nsandwouldi
fusedonbr ecci
asdepositstendtogiv
einfl
atedv
alues.
Thevaluesanddensi
ti
esoft
hesulphideoresfoundinAfr
icaareasfol
lows

Coppersul
phi
de Val
ue%Cu Densi
ty

Chal
copy
rit
e 34.
4 4.
1–4.
3

Bor
nit
e 55.
0 4.
9–5.
4

Chal
coci
te 79.
8 5.
5–5.
8

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uat
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cs

I
nter
nalandblocksamplingi
sdonebymeansofdiamonddril
l
ingandsludgedril
l
ing.
Thefor
merisnormallyusedwher
elonghol
esarerequi
redtoprobeneworebodies,
wher
eassludgedri
ll
ingisusef
ult
odefi
netheext
remiti
esandvaluesofpart
ial
l
yopened
uporebodi
es.

Sampl i
ngaChr omemi ne
Thei niti
alsampl i
ngisusual l
ydonebybor e-hol
esdr i
ll
i
ngandsubsequentanal y sisof
cores.Wher epossi ble,thesamplingofseamsexposedi npr ospecttrenches,tunnels
andadi t
si salsounder taken.Forthi
sinfor
mation,theeconomi cseam wi dthandv al
ue
decided.Ther eafterbecauseoft hegeneral
consist
encyofgr ade,v er
ylit
tl
er outine
under groundsampl i
ngisdone.Endpr oductsamplingishowev er,carri
edoutjudi ci
ously
bytaki ngregularsampl esdailyf
rom theend–pr oductafterithasbeenl oadedont o
l
orriesori nt
or ail
wayt r
ucks.

Stopesampl i
ng
Beforethesamplingganggoesunderground,cl
earandconci
sei
nstruct
ionsmustbe
givenregar
dingthelocal
it
yofthestopefacewhichhastobesampled.Apencilt
raci
ng
shouldbemadeont he1:200stopepl
anwhi chshowsall
numberedsurveypegsinthe
vi
cinit
yandwhi chporti
onofthefaceistobesampled.

Thegeneral
samplingprocedurehasalr
eadybeenout li
ned.I
nstopesampl ingthe
l
ocati
onofthefir
stsecti
ont obesampledisdeterminedbymeasuringhal fthe
sampli
ngint
ervalf
rom thetopofthestopeface,whichmustbelocatedfrom a
numberedpeg,or,
ift
hisisnotpossibl
e,fr
om anotherestabl
i
shedpositi
onsuchast he
toporbot
tom ofaraisewinzeconnecti
oninthedrive.

Uni
t3MassandMi
ner
alCont
ent

Thedensit
yofthegol
dbear i
ngr eefsofZimbabwev ar
yfrom 2,
6to2,
8t/m3.Ther
eefs
andcountr
yrockaref
air
lyhomogenousandt heirandthei
rdensi
ti
esdependmainl
yon
thepropor
ti
onofquar
tzi
te,sulphide,shal
eandlavainthem,andonthedepthbel
ow
surf
ace.

For
mul
aef
ort
onnageandcont
entofgol
dor
e

Vol m3)
ume( =ar nm2xwi
eai dthi
ncm
100

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page37
 Mi
neVal
uat
ionandEconomi
cs

01m2xcm
=0.

Met
ri
ctonnes(
t) =v
olumexdensi
ty

01m2xcm xρ
=0.

Gol
dcont
ent
(g) =met
ri
ctonsxv
aluei
ng/
t
2
=0.
01m xcm xρxg/
t

amsperm2
Gr =ρxcm.g/t
100t
=densi
tyxcent
imet
er–gr
amspert
onnedi
vi
dedby100

Exampl
e1

Ablockof30cl aimsisunderlainbyagol dreefdippingat40degreesfrom t

he
hor
izont
alandi tisest
imatedt hatthestopingwidthwi l
lbe100cm.assumingthatt
he
l
ossduet ofaultsanddykeswi llbe30percentandt hatwastesort
ingwil
lamountto
10%,cal
culatethemet r
ictonnageav ai
lableformi l
l
ing.Assumedensityofrocki
s
3 2
2,
70t/m .(
1cl ai
m =5948,14m )

Met
hod

Hor
izont
alar
ea 14m2
=30x5948,

I
ncl
i
nedar
ea 14xsecant40˚m2
=30x5948,

Vol
umeoni
ncl
i
ne =178444x1, 100m3
305x100/

Densi
tyofr
eefi
s2,
70t
/m3

Tot
alor
eincl
aims =232869x2,
70t

=628746t

But30%i
slostduet
ofaul
tsanddy
kes

Tonnageav
ail
abl
eforst
opi
ng =70/
100x628746

=440122t

Less10%sor
ted = 44012

Tonnageav
ail
abl
eformi
l
li
ng =396110t

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page38
 Mi
neVal
uat
ionandEconomi
cs

Exampl
e2

Onami newhere10%oft herockbr okenissor t

edunderground,pl
animeterreadings
gaveanar eaonthemi neplanof2786, 4cm2.Thescal eoftheplanis1in1000.Two
reef
swi thanaveragedipof33˚,ar
et obewor kedinthi
spor t
ionofthemine, oneatan
averagestopewidthof100cm andt heot herat105cm.calculatet
hetotaltonnage
avai
lablefort
rammi ngundergr
ound, afteral
lowingforalossof25%duet ofault
ingand
3
payabil
ity
.Acceptdensit
y2,70t
/m

Met
hod

Hor
izont
alar
ea e2xr
=scal ngcm2
eadi

I
ncl
i
nedar
ea e2xr
=scal eadi pcm2
ngxsecantofdi

=1000x1000x2786,
4x1,
192

100x100

=332140m2

Assumi
ngdensi
ty2,
70t
/m3

Tonnage =332140xwi
dth/
100x2.
70t

1str
eef =332140x100/
100x2.
70t =
896780

2ndr
eef =332140x105/
100x2.
70t=941610

Tot
alf
orbot
hreef
s =1838390

Less25%l
ossduet
ofaul
ti
ngandunpay
abi
l
ity =459600

1378790

Less10%under
groundsor
ti
ng =137880

Tonnageav
ail
abl
efort
rammi
ngunder
ground =1240910

Uni
t4:Mi
ningPayLi
mit
s
Thepayl i
mitofanor ei sthemi ni
mum v al
ueatwhi chitcanbemi nedandt r
eated
wit
houtprofitorlossi.e.whenr evenueobt ai
nedfrom aspeci fi
cmineral product
balancesexpenditur
ei ncurredinmi ni
ngandt reat
ingtheor e,and,
possibl yalsoin
tr
ansporti
ngt hemar ketableproducttot hedeli
ver
ypoi nt.I
tisusedtocl assifytheor
e
ei
theraspay ableorunpay ableforinstancewhenest imat i
ngorereser
v es, orwhena

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page39
 Mi
neVal
uat
ionandEconomi
cs

stopef acemustbest art

edorstoppedtomai ntai
nthemi negr
ade.Orwhendeci di
ng
whet herornotdev elopmentorothersourcesoforeshouldbesentt otheplantfor
tr
eatment .Thepaylimitisal
sousedtocl assi
fyli
neall
ythepayabi
lit
yofdevelopment
sampl ings.Whenanewmi neisabouttobeopenedupani ni
ti
al,f
lotat
ionpaylimiti
s
calculatedtoascertainthepayabi
li
tyoftheproposit
ionasawhol e.

PayLimitParameters
Inordertocal
culat
ethestopi
ngpaylimi
t,assumpt
ionsmustbemadeaboutcondi
ti
ons
expectedtoprev
aildur
ingapart
icul
arper
iodandappropr
iat
epar
ameter
schosen.

Payl
i
mitpar
amet
ersar
easf
oll
ows:

1.Rev
enuer
ecei
vedf
rom sal
esofmi
ner
alpr
oduct
.

2.Wor
kingcost
s.

3.Ext
ract
ion

4.Mi
necal
lfact
or

5.Wast
esor
ti
ng

6.Dev
elopment
,recl
amat
ionandot
hersour
cesofor
esentt
opl
ant

7.Tonnagedi
scr
epancy–shor
tageorexcess

Ont hecredi
tsideoft herevenue–costbal ance,wastesortingwhichmakesr oom at
theplantformor egrade–or e,
andt headdi ti
onalmineralproductgainedfrom an
excessandf r
om cheap, brokent onnagesuchasdev el
opmentandot hersourcesofore,
permitofloweringpaylimit.Ont hedebitsidelossesintheext r
acti
onprocessr ef
lect
ed
bythemi necallfact
orbeingbel ow100%, andbyshor t
fallmustbepai dforby
i
ncreasingthepayl i
mi t
.

Exampl
e

Calcul
atethepayli
mi tofat
inor
eofwhi ch91%i sr
ecover
edbyconcent r
ati
onmet hods.
Thisconcentr
atesassays57%ti
nwhi chissoldtoTsumebsmel t
ers.Thepay mentfor
ti
nisat$8500pert onneof87.
5%oft hecont
ainedtini
ntheconcentr
ate.Treat
ment
costs$80pertonneofconcentr
ate.Mineworkingcost
s$15pertonnemi ned.MCF90%.

Sol
uti
on

Let1t
onneoft
in(
Sn)ber
ecov
ered,
thent
hequant
it
yofor
emi
nedwi
l
lhav
econt
ained
.
I
frecov
eryi
s91%MCFi
s90%=1.
2210tofSnor
e.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page40
 Mi
neVal
uat
ionandEconomi
cs

Wei
ghtofconcent
rat
econt
aini
ng1t
onneofSn= =1.
7544tofconcent
rat
e.
Revenuer eali
sedfrom 1tofSn,
Costsaccr ued
Let t onnesofor ebetreat
ed.
Miningcost s
Frei
ght 25*1.7544=43.
86
Treatment 80*
1.7544=140.35
Total =184,
21+
Atpay l
imitrevenueisequaltocosts.

1,
2210tofSnf
rom 483,
55tofor
e.
x

Pay

Revenuer
ecei
vedf
rom sal
esofmi
ner
alpr
oduct

Revenueisthemai nit
em onthecredi
tsideofthepayli
mitcalcul
ati
on.Thepri
ceofthe
productiscontr
oll
edbywor l
dmar ket
s,orti
isonacostpluspr of
itbasi
s,ori
ssubj
ectto
st
atutorycontr
ol.Cert
aindeducti
onssuchasreali
zat
ioncharges,penal
ti
esfor
i
mpur i
ti
eset c,
willr
educerevenue.

Wor
kingCost
s

Workingcostsarethemaindebiti
nthepayl
imi tbal
ance.Becauseofeverchangi
ng
economicconditi
onsiti
sdif
fi
cultt
opredi
ctfuturecostsandthev al
uat
orrel
iesonthe
secret
ari
al,
stat
isti
cal
,engi
neer
ingandfi
nancialdepart
mentsf orgui
dance.

Ext
ract
ion

I
tissomet imesrefer
redt
oast heper centagerecover
y ,
itisapr ocessi
ngeff
ici
ency
f
actorwhi chisshownasaper centageoft hemineralproductr ecoveredcomparedto
i
tstotalcontenti
noresentforprocessing.Thustheshor tfal
lfrom a100%f act
or
i
ndicatesthepercent
agelossofpr oductduringtr
eatment .Inter msofagoldminethis
l
ossisr ef
lectedi
ng/tval
uesofr esidues.

Mi
necal
lfact
or(
M.C.
F)

Minecal
lfact
orisasampli
ngcum miningeff
ici
encyfactor.Itcomparest
hetotal
quant
it
yofrecover
edandunrecover
edmi ner
alproductafterprocessi
ngwit
hthe
amountesti
matedtobetheoresampledinsit
ubef or
emi ning.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page41
 Mi
neVal
uat
ionandEconomi
cs

M.
C.F= Mi
ner
alAccountedf
or x 100%
Mi
ner
alcal
ledfor

Miner
alaccount
edfori
salsoexpr
essedastherecov
eredmi
ner
al+t
her
esi
dues
Resi
duesaresomet
imesrefer
redt
oast het
ail
i
ngs.

MCFgivestheindi
cat
ionofhowef
fect
ivemi
ningandrecoverysyst
emsare,i
tshows
howeff
ici
entthesampli
ngsyst
ems,gr
adecontr
ol,
transpor
tati
on,sur
veyandrecov
ery
syst
emsare.

AMinecal
lfact
orof100%i
sideal
,butwhi
chisver
yanomal
ousandunaccept
abl
eMCF
mustbei
nvesti
gat
ed.Someoftheareast
ochecki
ncl
ude:

 samplingstandar dsandpr ocedures

 minerall
ossint ransitduringt r
ammi ngandhoi
sti
ng
 minerall
ossincr evices
 surv
eypr oceduresont hest opes
 avai
labil
i
tyofst ockpiles,ondr awpoint
s“ ar
ewemi l
l
ingwhatweareint
endi
ngt
o”.
 Recoveryandr eductionpr ocedures
 Securi
tyatthepl ant,thef
tofamal gam andatv
ari
ousmill
i
ngstages

Quest
ion

ZamsunGol
dmi
ner
ecor
dedt
hef
oll
owi
ngi
nfor
mat
ionatt
heendofJanuar
y2010.

Tonnesmi
l
led 36000

Sur
facesor
ti
ng 10%@ 0.
7g/
t

Under
groundsor
ti
ng 5%@ nov
alue

Dev
elopmentr
ock 2000t@ 4.
2g/
t

Pl
antext
ract
ion 90%

Recov
ery 280kgofgol
d

Sampl
ersst
ori
ngv
alue 8.
0g/
t

Cal
cul
atet
heM.
C.F

Wast
eSor
ti
ng

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page42
 Mi
neVal
uat
ionandEconomi
cs

Theef
fectofsor
ti
ngoutwast
eist
oincr
ease

i
. Theav
eragev
alue

i
i
. Theamountofproductr
ecover
edasmoreor
ecanbepr ocessedini
tsst
eadby
thesamepl
ant,i
.e.t
hepayli
mitisl
ower
edbythesor
ti
ngofwast e.

Devel
opment
,recl
amat
ionandot
hersour
cesofor
esentt
opl
ant

Addit
ional or
et opl
antfr
om reefdevel
opment
, whi
chisalr
eadypaidfor
,andother
cheapsour cesofore(whicheff
ectual
l
yhavelowerpayli
mitsthanthest
opingpayli
mit
)
al
lcontributethei
rmodestquotaoftheminer
al pr
oductonthecredi
tsi
deinthepay
l
imitcalculati
on.

Tonnagedi
scr
epancy
:shor
tfal
lorexcess

Thetonnagediscr
epancyisthedif
ferencebet weenthesurveyor’
sesti
mateoforesent
tothesurf
acesorti
ngplantandthereductionoffi
cer’
sestimate.I
fthesur
veyors
esti
matebymeasur ementislesst
hant hatmeasur edattheplantbymassmeteror
othermeans,t
hisisref
err
edt oasashor t
fallandifgreat
ertheextrat
onnageisref
err
ed
toasexcess.

Exampl
e

Amedium si
zegol
dmi
nehoi
sti
ng8000tofst
opi
ngor
efr
om P.
M.Ratanav
eragegr
ade
of6.
2g/t
.

St
opesor
ti
ngatnov
alueamount
edt
o 6%

Dev
elopmentr
ockt
othemi
l
l 1200t@ 3.
50g/
t

Recl
amat
ionr
ockt
othemi
l
l 800t@2.
80g/
t

Sur
facesor
ti
ngwas7%atgr
adeof 0.
65g/
t

Tonnesi
nmi
l
lbi
non31December 200t
@ 6.
1g/
t

Tonnesi
nmi
l
lbi
n30Januar
y2011 300t@ cur
rentmont
hval
ue

MCF 92%

Mi
l
lef
fi
ciency 92%

Wor
kingcost
s $350pert
onnemi
l
led

Gol
dpr
ice $1100

Cal
cul
atet
het
onnagemi
l
ledandv
alueandt
hewor
kingpr
ofi
t/
loss.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page43
 Mi
neVal
uat
ionandEconomi
cs

I
nthemont
hofFebr
uar
y2011,
stopi
ngt
onnagebr
okenwas8100t@ 6.
00g/
t.

Recl
amat
ionanddev
elopmentpr
oduced1500t
@ 3.
00g/
t.

Sor
ti
ngpercentatbot
hunder
groundandsur
facer
emai
nedt
hesame.I
gnor
eanybi
n
di
ff
erencesatmonthend.

MCFincreasedt
o94%andMi
l
lef
fi
ciency@ 92%.Wor
kingcostwasest
imat
edt
ori
set
o
$375pertonnemil
l
ed.

Cal
cul
atet
heef
fectoft
hosechangesont
heFebr
uar
ypr
ofi
t/
losses.

Sol
uti
on

Value
I
t em Tonnes (g/
t) Content(g)
St opeor e(PMR) 8000 6.
2 49600
St opesor t6% 480    
Tonnesexst ope 7520 6.
5957447 49600
Dev elopment 1200 3.
5 4200
Recl amat i
on 800 2.
8 2240
Hoi sted 9520 5.
8865546 56040
Sur f acesort7% 666.
4 0.
65 433.
16
I
nmi l
lbin 200 6.
1 1220
tot al 9053.
6 6.
276712 56826.84
l
essMi l
lbinend 300 6.
276712 1883.013608
mi lledGCF 8753.
6 6.
276712 54943.82639
MCF   92%  
GAF     50548.32028
Resi dues      
Recov er
y   92% 46504.45466

$ 1,
804,
405.
Rev
enue   38.
800705 65

$ 350.
0 $ 3,063,
760.
cost
s 8753.
6 0 00
$(1,259,
354.
pr
ofi
ts     35)

Value
I
tem Tonnes (g/t
) Cont
ent(g)
Stopeore(PMR) 8100 6 48600
Stopesort6% 486    
Tonnesexstope 7614 6.3829787 48600

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page44
 Mi
neVal
uat
ionandEconomi
cs

Development&
Reclamat i
on 1500 3 4500
Hoisted 9114 5.
8262014 53100
Surfacesort7% 637.
98 0.
65 414.
687
I
nmi l
lbin     0
tot
al 8476.
02 6.
215808 52685.
313
l
essMi l
lbinend      
mil
ledGCF 8476.
02 6.
215808 52685.
313
MCF   94%  
GAF     49524.
19422
Residues      
Recov er
y   92% 45562.25868

$ 38.
8 $ 1,
767,
847.
Rev
enue   0 78

$ 350.
0 $ 2,966,
607.
cost
s 8476.
02 0 00
$(1,198,
759.
pr
ofi
ts     22)

UNI
T5:ORERESERVESANDRESOURCES
Oreresourceisdefi
nedasnatur
all
yoccurr
ingsoli
d,l
i
quidorgasi
noront heEart
h’s
crustwhichcanbeusefulorval
uabl
e.Orereserv
eisthatpar
toft
hemeasur edor
i
ndicatedresourcewhi
chiseconomical
l
yv i
ableatpr
esentti
meunderconditi
ons
real
ist
ical
lyassumedatthatt
ime.

Thecl assi
fi
cationofbot hthereservesandr esour cesisdet erminedbyl ev
elof
confidenceinthedat aathand, knowledgeandgeol ogicaldata.Whenlookingat
reservesthemodi fyi
ngf actor
sar econsider edi nthecl assi
ficati
onprocess.The
modi fyi
ngfactorsincl
ude; commodi typrice, statelaws, marketconditi
ons,cost,soci
al,
env i
ronmental,metall
urgical,
geographical ,
pol it
ical,et
c.Condi ti
onschangei nanyofthe
modi fyi
ngfactorsmayl eadt odowngr adi ngorupgr adingoft hereservetoresourceor
vicev er
sa,orchangei nmat eri
alcontentofr esource/ r
eserve( e.
g.changeincommodi ty
priceorpay l
i
mi t)

Or
edepositi
stheconcent
rat
ionofminer
alsatagivenl
ocat
ionandr
ecov
erabl
eata
pr
ofi
taf
terconsi
der
ingvar
iousfact
orsasli
stedabove.

Resour
ceclassi
fi
cati
on
 I
nfer
red:nodri
ll
ingordevel
opmenthasbeendone.Ageol
ogi
calmodeli
susedt o
i
nfer
/predictt
heexist
enceofanorebody
.Formodelswit
hver
ti
calcont
inui
ty,
an

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page45
 Mi
neVal
uat
ionandEconomi
cs

i
nf err
edbl ockcanbesai dtoexi stbelowadr il
l i
ndicat
edblock
 Indicated:dril
lhol esorsampl i
ngpoi ntsarewidelyspaced,butindi
cateexistence
ofmi ner al
izati
on.Cont inuit
yoft hemi neral
izati
onbet weenthesampl i
ngpointsis
notascer t
ained
 Measur ed:suffi
cientsampl ingandgeol ogi
cal datahasbeenacquiredandt he3D
exposur eoft her esourcehasbeendonebydev el
opment sandorelimit
sar e
def i
nedwi thconf idence.Highl evelofgeologicalknowledge,butmodifyi
ng
factorsar enoty etconsi dered.

Reser
vecl assi
f i
cat i
on
 Prov en:beingmi nedorreadyforminingatprofi
t.
3Dexposurebydevel
opments
hasbeendone.Modi fy
ingfactorshavebeenconsideredandnomateri
alchange
isexpect edont hisbl
ock.Highestconfidencel
evel.
 Probable: highconfi
dencelevel,butl
owert hanproved.Maybedueto
insuffi
cientdr i
ll
i
ngasperr eport
ingstandardorl
aggingdevel
opment.

Reser ves/Resour ceestimat i

on
Itisacal culationmeantt oquantifythemi ner alreserve/resourceasaccur ateas
possibl e.I
tisf rom thereserveandr esour cebaseest imat i
onf r
om whi cht helifeofmi ne
i
sdet er mined.Ther econcil
iati
onsandshor ttolongt erm product i
onpl ansar ederived
from reserveest i
mat i
ons.
Theor ereserv edocumenti sbankabl e,meani ngi tcanbeusedascol lateralf
orseeki ng
debent ures,loansandl uri
ngshar eholders,hencet heimpor tanceisat tachedt oquality
control andqual i
tyanalysesinacqui r
ingdat a,storageandgeol ogi
st’
scompet encein
reportingtheor ereserves.Reportingstandar dshav ebeensetbyv ar
iouspr ofessional
i
nst i
tutionst ot hi
sef f
ect,i
nor dertoal i
gnr epor ti
ngofr eserveswi t
hf i
nanci aland
i
nv estmentet hics,e.g.SAMREC, JORCCode, etc.

OreReser ves
Gener alHi storicall
y,mi ner al proper ti
eswer esimpl ycl assifi
edint ot hreer eserve
categories: Pr oven,Pr obabl eandPossi bl
e.I n1980, theUSBM andUSGSj ointl
y
i
ntroducedanexpandedsy stem t hatsepar atedt hegeol ogicalanal ysis(resour ce
determi nation)f rom thesubsequentmi neabl eanal ysis(reservedet erminat i
on).I n1989,
theAIMM ofAust r
aliaexpandeddef i
niti
onsandi nt
roducedt heconceptt hatar eserve
analysisshoul dbecar r
iedoutundert hedi recti
onofandcer ti
fi
edbyan“ expert,”whoi s
aqual if
iedpr ofessional .Sincet hatt i
me, mor ewor khasbeenaccompl i
shedt of urt
her
refi
net hecl assi f
icationsy stem.Mostr ecent ly,
t heCanadi angov ernmentpubl ished
“Standar dsf orDi sclosur e”( Nat i
onal Instrument43- 101)t hatprov idesfur ther
i
nterpret ati
on.Unf ortunat ely, t
herei snoty etani nternational st
andar dthatdef i
nest he
termsused, letaloneacommoncodef orthedet er
mi nationoft hesepar at ecat egori
es
ofcertaint y.Thegoodnewsi st hatanef fortisunder wayt oseti nternational standar ds
thatwi l
l satisfythesecur itiescommi ssionsoft hest ockexchangest hatpr ovidet he
greatmaj orityofequi tyf inanci ngf orthewor ld’
smi ningi ndustry( Johannesbur g,
London, NewYor k,Sy dney ,andTor onto).

Thesenewst
andar
dsar
emor
erest
ri
cti
ve(
mor
econser
vat
ive)t
hant
het
radi
ti
onal

Zi
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neVal
uat
ionandEconomi
cs

standards.
Inthemeant i
me, maj ormi ningcompani es( whoof t
enf i
nancenewpr ojectsinternal
ly
withoutresort
ingtot heequi tymar kets)dev elopedtheirownsy stems.Thesear e
generall
ysimilartothemai nstream standar ds.Onesi gnif
icantexceptionist hat
normal l
yaqual i
fi
edt eam ofpr ofessional sisresponsiblefordeterminingandcer ti
fyi
ng
orereservesratherthanani ndivi
dual
“Expert,
”“Accredi
tedSeni orAppr ai
ser,”or“ Quali
fi
edPer son.”Theprofessi onalteam
conceptappear swisert hant heindividual conceptpromot edbyt hepubl i
shed
guideli
nesandst andar ds,sincef ew,ifany ,i
ndivi
dualsar eexpertinfourdi sci
pli
nes
(geologi
calint
erpretation,stati
sticalanalysis,miningmet hods,andmi ner aleconomi cs)
.

Defi
nit
ions
Thefoll
owingareunoff
ici
aldef
ini
ti
onsi
ntendedt
omeettheexpectati
onsofa
handbook.Theyaregener
all
yrepr
esent
ati
veofcurr
enti
ndust
rystandards.

Adiscoveredminer
ali
zat
ionzonewi
l
lunder
got
hreephasesofi
dent
if
icat
ionbef
orei
tis
r
eadyf ormini
ng.

ADeposi ti
sami ner
ali
zedzonethati
sexami nedtotheextentt
hatthemi neral
consti
tuent
sareidenti
fi
ed.Theexaminationmayrevealsomegeologicalconti
nui
tyand
approxi
mat egr
ade(tenor)
,butt
herei
si nsuff
ici
enti
nfor
mat i
ontoclassitasaResource.

AResour cei
sami neral
izedzonethati
ssampledandstudiedtot heextentthata
credibleesti
mateoftonnageandgr adecanbemade.Thisest i
mat eissuff
icient
ly
definit
ivetodiv
ideiti
ntothreel
evelsofcer
tai
nty
:Measured,Indicated,
andI nfer
red.

AMeasuredResour ceisthehighestorderandimpli
esthatthemeasurementsaremade
i
nthreedimensionsatinter
val
scl oseenoughtobeusedasabasi sfordetai
l
edmi ne
pl
anning,
aswoul dbet hecaseforstopedev el
opmenti
nanoper at
ingmine.Inthe
i
nstanceofanewpr oj
ectbei
ngcont emplated,
iti
stypi
calthatt
her
ewi l
lbeli
ttl
eorno
measuredresources.

AnIndi
catedResour
ceisonet
hatt
heesti
mat
eoftonnageandgr
adei
str
ust
wor
thyt
o
theext
entthati
tmayserv
easabasisf
ormaj
orexpendi
tur
es.

AnI nf
er redResour ceisapot enti
alresour cethatisassumedt oexi st,
byreasonof
l
ogical extrapolationorinter
pol ati
on.
AReser veisthepor ti
onofami neralresour cethatmaybeext ractedatapr of
it
.Whi l
ea
resourcei sbasedupongeol ogicalint
erpr etat
ion,areservehasbeenanal yzedfurt
herto
takeact ual miningi nt
oaccount .Amor epr ecisedefi
nit
ionis,“
Thatpar tofamineral
resourcet hathasbeenanal yticall
ydemonst r
atedtojusti
fymining,taki
ngintoaccount,
atthetimeofdet erminati
on, mining,met all
urgical
,marketing,
legal,envi
ronmental
,
social
,economi candot herappl i
cablecondi ti
ons.”(Ext
ractedfrom theJohannesburg
StockExchangel i
st i
ngrequirement s:Miner alCompanies)

Zi
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 Mi
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cs

AReser
vemaybedi
vi
dedi
ntot
wocat
egor
iesofcer
tai
nty
:Pr
ovenandPr
obabl
e.

Tabl
ebel
ow:
Cat
egor
iesofCer
tai
nty

Cat
egor
y Mi
ner
alResour
ce Mi
ner
alReser
ve
1 Measur
ed Pr
oven 2P
(
Prov
en+Probabl
e)
2 I
ndi
cat
ed Pr
obabl
e
3 I
nfer
red

AProvenReserveisderi
vedonl
yf rom ameasuredresource.Thi
scat
egoryisgeneral
l
y
l
imi
tedtoami ningzonebeingminedoronethatisalreadyprepar
edformini
ng,to
i
ncl
udepreproducti
onstopedevelopment.Ty
picall
y,f
ormostnewmi ningproj
ects,
t
her
ewi l
lbelit
tl
eornopr ovenr
eser v
es.

APr obabl
eReserveisthatpartofanIndicat
edResourcesubjectedtothescruti
ny
requir
edofaDet ai
ledFeasi
bili
tyStudyandtherebymaybef oundtojusti
fyt
he
expendit
urerequir
edformining.I
naf ormaleconomicanaly
sis,onlypr
obableand
provenreser
vesar eemployed.Thesum ofthesetwocategoriesmayber ef
erredtoas
“2P.”

APossi bleReserveisanobsol etecategor

ysi ncebycur r
entst
andar dsitmaynotbe
usedi nanyf or
mal economicanal ysi
s.Whenr eporti
ngonami ner alproper
ty,apotenti
al
orpossi bl
ezoneofmi neral
i
zationbestremainsidentif
iedasanI nferredResource.For
purposesofapr el
i
mi narystudy,a“possi
blereserve”maybecal culatedtoperform an
analysisonlywhendesi redtojusti
fyaddit
ionalexplor
ationwork.

Eval uat ingExpl orati

onPr opert i
es
Proper tieswi t
hf ullydev elopedor er eserv esareev aluatedforpot ent i
alasapr ofitable
mini ngent erprisebyf ormal procedur es.Fr equently,properti
esar er equir
edtobe
eval uat ed( forsal e,jointvent ures,orot hert r
ansact i
ons)wi thonlydr i
l
l i
ndi
catedor
i
nf erredr eser ves.Inmanycases, thev aluedependsonl yuponexpl orati
ondat athati s
favour abl etoanant i
cipateddi scov ery
basedonhy pot hetical i
nterpretati
onofgeol ogy.Somet i
mes, untouchedexpl oration
proper ti
esar ev aluabl esimpl ybecauset heyoccuri naf ashionablear ea,suchasneara
recentspect aculardi scover y.I
fex plorationexpendi turesar eincurredont hepr oper t
y,
expensesnotr esul ti
ngi ncondemnat i
onenhancepr oper t
yv alue.Ifnoi ndi
cati
onof
miner al resour ceisi dent i
fiedandt hepr opertyisidle,thevaluemustbel imi
tedt ono
mor et hanhal foft hespentcost s.Whenr esult
sar eposi t
ive,explorationisongoi ng,and
wor kt odat ehasbeencompl etedwi thdi l
igenceand
efficiency ,100%oft hef undsal readyexpendedcanbeaddedt othepr opert
yv alue.

Adi
ff
erentappr
oachwasor
igi
nal
l
ydev
elopedt
oassi
stwi
thpr
oper
ti
essubmi
tt
edf
or

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 Mi
neVal
uat
ionandEconomi
cs

approv albytheTorontoStockExchange.Themet hodassumest hatapropertyi

sf i
rst
acquiredbyst aki
ngclaims, t
hecostofwhi chisknown.Thef ir
stcostismul t
ipli
edby
weighedf actorsforit
emsofv alue(suchasr egi
onalgeology,proxi
mi t
ytoinf
rastructur
e,
geologicaldataqualit
y,executive
i
ntegrityorfiel
dmanagerr eput ati
on)toobt ai
nvaluat
ion.Otherapproachesexistto
eval
uat emi neralpr
operti
es,includi
ngsomanydol lar
sperounceof“ goldi
nthegr ound,”
butthesemet hodsarenol ongerpopul ar
.

Liabil
iti
esmustbesubt r
actedf rom theposi
ti
vevaluesofanexplorati
onpr operty.For
exampl e,thepurchaserorpar tnermaybecomer esponsiblef
orthecostofcl ean-upand
restorati
oni ft
hepropertyislaterabandoned.Li
abil
iti
esarenotnormal l
ysignif
icantfor
agr eenfieldplay,
butiftheproper t
yisenvir
onment al
lysensi
ti
ve;subjectt
onat i
vel and
clai
ms; orcont ai
nsold
dumps, t
aili
ngs,orminewor kings,i
tisprudentt
oassesst heli
abil
iti
es.

Esti
mat ingOr eReser ves
Esti
mat ioni ncludesdet er
mi ni
ngtons, grade,anddegr eeofcer t
ainty(pr
ovenor
probable).TonsResour cetonnagei sobtainedbymul tipl
yi
ngor ev olumebyitsdensit
y.
Forexampl e,1,000cubi cmet er
sofor ewithanSGof3. 0wei ghs3,000met r
ictons
(t
onnes) .Thev olumei scomput edf r
om or eoutl
inesandt heSGdet ermi
nedbywei ghing
asampl ei nai randsuspendedi nwat er.Thecalculat
ionofv olumei snotcomplicat
ed
andmaybedet ermi nedwithconfidence,
provi
dedt heor eout li
nesareaccur ate.Unfort
unately
,lessattenti
oni sgi
ventot he
accuracyofspeci f
icgravit
y.Sourcesoft hef i
gure(
s)pr ovi
dedshoul dbequest i
oned.

Awr ongv al
uei sobt ainedf rom sl
urryanal y
siscarri
edouti namet all
urgi
caltesti
ng
l
aboratory.Ther easoni st hatoreispor ousandwhenf inel
yground; t
hedensi t
yof
i
ndividualparti
clesisappr oximatel
y20%hi gherthant hedensityofabl ockofor e.I
na
Reservecalculation,resour cetonsare“ reduced”toaccountf orthef actthatnotallt
he
orewi l
lbemi ned.Conv ersely,r
esourcet onsare“ i
ncreased”toaccountf ordiluti
onwith
waster ockinacont actor ebodyorwi thlow-grademat eri
ali
nacut -offorebody.
Nineteendiff
erentcont ri
but i
ngfactorsar econsideredi nacompr ehensiveestimateof
theamountofdi luti
on

Or
eReser
veVal
uat
ionFact
ors

BlockFactor
Blockfactoristheratioexpr
essedasaper centage,whicht hespecif
icmi neralcontent
oftheorebr okenfrom orereserveblocksasi ndi
catedbyt hecur r
entsampl ingresult
s
bearstothecont entofthisoreascomput edf rom theblockestimates.Thisf act
oris
basedent i
relyonsampl i
nginformation,whi chmayr ef
ertoasi ngleblockwhi chhas
beenwor kedt oagr oupofblockswor kedinami ningarea,onasi nglereefhor i
zonoron
al
l hor
izonsdur i
ngapar ti
cularperi
od.Thel ongert heperiodort hegreaterthenumber
ofblockswor ked,thesteadi
ertheblockf act or.

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BlockFact
or=Mi ner
alcontentoforebrokenfrom bl
ockbasedoncur
rentsampl
i
ngx
100
Miner
alcontentoforebrokenfrom bl
ockbasedonbl
ockesti
mates
Theblockfact
ormayal sobeexpressedasf oll
ows

Bl
ockFact
or=Avesampli
ngcm.g/
tval
ueoforebrokenfrom blocksx100
Av
ecm. g/
tval
ueofor
ebrokenf
rom blocksaccordingtobl
ockest
imat
es

Bl
ockCal
lFact
or

Thebl ockcal lfactorisdef inedast herat i

oexpr essedasaper centage,whicht hetot
al
specificmi neralcont entoft heor ebr okenf r
om t heor ereservebl ocksasindicatedby
thecur rentsampl ingr esultsadjust edbyt hemi necal lfactorbear stothecont entofthi
s
oreascomput edf rom t heblockest i
mat es
Blockcal lfactor=Mi neralCont entofor ebrokenf rom blocksbasedoncont entxMCF
x100
Mi neralcont entofor ebrokenf r
om blocksbasedonbl ock
esti
mat es
=Bl ockFact orxMi neCallFact orx100%
Itcannor mal lybeassumedt hatt hemi necall factorwi l
lapplyt othemi neralcontentof
orebr okenf rom theor ereservebl ocks.Ther efor e:
MineCal lFact or=Mi neralCont entaccount edf orfrom orebl ocks
wor ked(Recov ery+Resi due)
Mi neralCont entofor ebl ockswor kedbasedoncur rentsampl i
ng

Uni
tSi
xGr
ade
Propergradedet
erminationf oranorebodyisdiff
icultandti
meconsuming.“The
ari
thmeti
cmeani sav eryinadequateaxiom.Insteadofaddi ngupaseri
esof
observat
ionsandthendiv i
dingthesum byt hetotalnumberofobserv
ati
ons,equal
supposit
ionswouldhaveequal consi
derat
ioniftheest i
matesweremult
ipl
iedtoget
her
i
nsteadofadded.Mot herNat ureisnottr
oubledbydi ffi
cul
ti
esofanal
ysi
s,norshoul
d

Zi
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ionalDi
plomaModul
e Page50
 Mi
neVal
uat
ionandEconomi
cs

we.
”Lor
dKey
nes

Elementarycomponent s(obser v
ations)consistoforebodysampl egr adesandl ocati
on.
Inhardrockf ormati
ons, t
heset ypicall
yconsistofassayr esult
sfrom diamonddr i
ll
cutt
ings(sludge),spl
itdri
llcore,andchannel samples.Somet i
mest hesear e
augment edbybul ksampl eassay sorcut t
ingsf r
om inclinedpercussiondr il
li
ngintothe
wall
sofexpl orati
onheadi ngs.Fort hesampl eassaygr adet obecor rect,t
heymustbe
coll
ectedproperlyandpr otectedf r
om contami nati
on( orsalti
ng)intransit.Exceptfora
majormi ni
ngcompanywi thin-houseexper ti
se,arecogni zedindependentl aborat
ory
shouldperformt heassay s.Thebest -r
ecognizedlabor atoryavail
ableshoul dbeselected
toperform peri
odiccheckassay s.Forforeignprojects,allassays,oratleastcheck
assays,shouldbeper formeddomest i
cal
ly.

Note
Problemsmayar i
sewhenshi ppi
ngsampl ebagst ot hehomecount ryunlesst heyare
doublet agged( onemaybet ornoffbybaggagehandl er s)andcl earl
yl abel
led,“Pure
miner alrocksampl es”t oav oiddetai nmenti ncust oms.Oncesampl esar etaken, or
e
reservesar edividedintoblocksofconv enientsize.Agr adef oreachbl ocki s
determi nedf rom sampl esi
nandneart hebl ock.Eachsampl eassayusedf ortheblock
gradedet erminat i
onisassi gnedawei ght .Thesum oft hewei ght sisone( or100%) .
Wei ghtsar edependentont hedegr eeofv ari
ationbet weent hesampl esempl oyed;
grader esol ut
ioni sdeter mi
nedbyt heappl i
cati
onofst atist
ical anal y
sist othev ar
iati
ons.
Ageost aticaltool,“Vari
ogram, ”i
sty picallyusedtor epr esentt hev ar
ianceofsampl es
withrespectt othedi stancesepar at ingt hem.Thebl ockgr adei sdet erminedby
summi ngt hepr oduct sobtainedf rom mul ti
plyi
ngeachsampl egr adebyi tsassigned
weight .

Blocksnotmeet i
ngt hecut-offgradeareremov edf r
om ther eservetoncalculat
ion.The
cut-
offgradeistradi
tional
lythebr eakevenpoi
nt( nei
therprofitnorloss).Recentl
y,cut-
offgradeischosent oensur ealowcostpr oductcompar edwi t
ht hecostincurr
edat
compet i
ngmi nesaroundt hewor ld.Whenthemi nei
si nproduction,thecut-
offgrade
maybel oweredaf t
ert hepre-pr
oduct i
oncapit
al costisreti
red.Cut -
offgrademaybe
rai
sedorl oweredatanyt i
medur i
ngmi neli
fedependi ngonpr evaili
ngmet alpri
ces.

Under gr
oundExpl orat
ionEnt ri
es
Thenat ureandci rcumst anceoft het ypicalhar
dr ockoredepositissucht hatthe
explorat
ionprogr am maynotpr oper lybecompl etedwithoutincludingexpl or
ationwork
fr
om anunder groundent ry.Thisconcer nsopenpi tpr
ojectswher earepr esentati
vebul
k
sampl eisrequired(TwinBut t
es,Ty rone, Br
enda,Endako, Marcopper ,
Palabor a,
Escondida);and
especiall
ypertainst ounder gr
ounddeposi t
s.Numer ousinstanceshav eoccur redwhere
undergroundmi nesdev elopedwi thoutsuchapr ogram,encounter edsignifi
cant
problemsduet ounf or
eseenci rcumst ances.

Thosemi
nessuccessful
l
ybroughti
ntoproduct
ionwit
houtanexpl
orat
ionent
ryt
ypical
l
y
i
nvolv
edor
ebodiesclear
lydef
inedf
rom surf
acedri
ll
i
ngbecauseofthenatur
eofthe

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mineral
izati
onand/ortheproxi
mi tyofv erysimilardeposit
salr
eadymined.Eventhese
ci
rcumst ancesarenotfool
proof.Forexampl e,t
heRandf ontei
nmine(wheretheoreis
excepti
onallyuni
for
m andcont i
nuous)encount eredanunexpectedbarr
enareathat
i
nterr
uptedt heorethr
oughoutahor izontallengthofov er8,
000feetal
ongthereef.

I
ndustrystandardsandgoodengi neeringpr
acti
cenormal
lyrequi
rethatahardrock
miningprojectbeginwit
hanunder groundexpl
orat
ionpr
ogram beforepr
oceedingwit
ha
defi
nit
ive(bankable)f
easibi
l
ityst
udy .
‘
Belowgr oundonlycant heminer‘shakehandswit
htheore.
’ Ar
noldHoffman,1947

Li
stedbelowar ethespeci f
icreasonsf
orcompl
eti
nganunder
groundexpl
orat
ion
progr
am.
•Confi
rm existi
ngor ereserves
•Defi
netheor ebody
•Obtai
ngeot echnicaldata
•Obtai
nabul ksampl e
•Testminingmet hods
•Measuregroundwat erfl
ows
•Furt
herexplorati
on

Conf i
rm Existi
ngOr eReserves
Surfacedr i
l
lingper mitsmeasurementoft heorereser vesfr
om onl ytwodi mensi ons.
Hence, noneoft heundergroundmineraldepositcanbeof f
ici
allyclassifi
edas“ proven.”
Three-dimensional measurementmaybeonl yundertakenfrom under groundt oconf irm
continui
tyofor eout li
nesbetweendril
lholes.“Wheni tcomest omeasur i
ngor er eserves
accurately,
thekeyi sapropermixofsampl i
ngtheory( st
ati
stics)andgeol ogy.
Geost at
icalmet hodsdependheav il
yonl argesampl enumber sandext ensi veclose-
spacedsampl ing,incl
udingheavi
l
ydr i
ll
inglocalareast oestimat eminingsel ectivi
ty.
Extensivedr i
ll
i
ngmaynotbeeconomi cal i
nasmal l
or ebody.Ev eninal argeor ebody,
goingunder groundmayul ti
matel
ybet heonl ywaytodet erminehowwel l
theor ecanbef oll
owed.”GaryRaymond, CanadianMi ningJour nal,
August ,1985

DefinetheOr ebody
Mostsur facedr i
lli
ngr equiressubst antialdistancetor eacht heunder groundor e
deposits.Thedi stanceandl engthofdr illstr
ingrequi r
edcanr esulti
nconsi derablehol
e
deviati
on.Thedev iati
onscanbedet ermi nedandconsi dered, butthemeasur ementis
notalway saccur ate.Inaccuracycanr esultinadi stortedi nterpret
ation( whetherby
comput erormanual means)oft heact ual oreconfigurations, outl
ines, conti
nuit
y,faul
t
l
ines,andgr adedi stri
bution.Formi ningengi neerstosel ectt heappr opr i
atemining
met hodstoper mi tthesaf eandeconomi cal extr
actionoft hel ar
gestpossi bl
e
percentageofi dent i
fi
edr eserves,reli
abl eanddef init
ivei nformat i
onongr adesand
widthsisrequired.Thi srequi r
ementcanonl ybemetbygoi ngunder ground.

Obtai
nGeotechnical
Data
Ordi
nari
l
y,geotechni
cal
/r
ockmechani
csdat
acanbeobt
ainedf
rom t
hedr
il
lcor
eand

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l
ogsgat hereddur i
ngsur facedr i
lling; howev er,ear l
ydr il
l
ingi softencompl etedt o
i
dent i
fyor eandmi ner alizati
ongr adest oconf irmt hegener alproj
ectdi rect i
onand/ or
“sel
l”t heproject.Ty pical l
y,l
ittl
eornoconsi derationi sgiv entogeot echni cal proper ties,
someofwhi chcanonl ybemeasur edaccur atelyfrom f reshlyextractedcor e.Cor ethat
couldpr ov i
degeot echni cal dataof teni sconsumedf orassayandbencht est ing
purposesori skeptf orv eri
ficati
onpur poses.Somer equiredgeot echnical infor mat i
on
(measur ingthedi r
ect i
onandmagni t
udeoft hegr oundst ressregime)canonl ybe
compl etedunder ground.Anunder groundexpl orationdev el
opmentpr ogram shoul d
provider eli
ablev aluesf orgr oundst r
essaswel lasunconf i
nedcompr essi vest rengt h
(UCS) ,modul usofel asticit
y( E),SG, wor ki
ndex( Wi ),i
nternal angleoff r
iction( φ),and
bulkdensi tyoft hebr okenor e.Toget herwi thv aluesf orr ockqual i
tydesi gnat ion( RQD) ,
j
ointindi ces(J),andst ressr educt ionf actor( SRF)obt ai
nedf r
om pr operdr illcorel ogs,
thi
sdat adescribest heengi neeringpr oper t
iesofr ockst obedev eloped, suppor ted, buil
t
against ,andmi ned.Ther esulti
ngar r
ayofgeot echni calcr it
eri
aisessent i
al forsound
under groundmi nedesi gn.

ObtainaBul kSampl e
Forpr opermetallur
gicaltesting,l
argesizedsampl esarerequired(muchl argert
hancan
beobt ainedfr
om dr i
llcore).Onlyfrom undergr
oundcanr epresentati
veoresampl esbe
obtainedinthequant iti
esrequi r
ed.Bul
ksampl esar eespeciall
yimpor tantwhenbench
test
ing( ondri
llcore)indicatesacompl exmet al
lurgyrequiri
ngsignifi
canttesti
ngand
analysistoobtainahi ghper centageofmi ner
alrecoveryinthepr ocessplants(i
.e.mi
ll
,
smelter,andrefinery
).

I
nadditi
on,bul
ksamplingenablesadvancedeter
minati
onofwhet herprev
enti
ve
measuresaredesi
redtoreducedetri
mentaloxi
dati
onofwall
r ockand/orbrokenor
e
r
esult
ingfr
om anundesirabl
emi ner
alcomponentsuchaspyrrhoti
te.Thebulksampl
e
wi
llal
soenablefur
therconfi
rmationoforedi
stri
but
ionandgrades.

TestMi ni
ngMet hods
Conv ent i
onalpracticerequir
esexcav ati
ngteststopesunder groundtoobtai
nthebulk
sampl esdescr ibedabov e.Examiningthesel ar
gersizedopeni ngsi
svaluabl
ein
evaluat i
ngmi ningmet hodsf ort
heor ebody.Groundr ei
nforcementrequir
edtomai nt
ain
thestr uctur
alintegrit
yoftheexcav ati
ons( r
ockbolts,screen,etc.
)canbemoni t
oredfor
l
ong- term stabil
ity
.Ther esultsmaybel aterappli
edt oestabli
shsafegroundsupport
cri
teriaandst andar dsforundergroundoper ati
ons.

MeasureGr oundWaterFlows
Themet hodsusedtopredictwat
erinfl
owsundergroundfrom surfacedril
lholes(packer
test
s)areinadequat
efortheaccuratemeasurementsrequir
edt odeterminethe
undergr
oundpumpi nganddewateringrequi
rement
sofahar drockmi ne.Onlybygoi ng
undergr
oundcant herequir
ementsforgrout
inganddewat er
ingber el
iablydeter
mi nedin
advance

Fur
therExplor
ati
on
Anundergroundexpl
orat
ionpr
ogr
am i
sty
pical
l
ydesi
gnedt
ouncov
eraddi
ti
onal
ore

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uat
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cs

ext
ensi
onsandsat
ell
i
tezonesofmi
ner
ali
zat
iont
hatmayhav
ebeenmi
ssedbysur
face
dri
l
li
ng.

Met
hods:

1.Poly
gonal esti
mati
on:
2.Secti
onalareaesti
mati
on:
3.I
nversedistancesquar
ed:
4.Ordi
narykriggi
ng:

Polygonal esti
mat ion:basedont heconceptt hatthev al
ueofmat eri
alatanunknown
l
ocat ioni sequal tothev al
ueoft hesampl elocatedclosestt othelocati
on.Maxi mum
radi
ususedasi nfl
uenceofsampl e.
Char acteristi
csoft hePol y
gonal Method:Thepol ygonal met hodoforereserve
esti
mat ionhasbeeni nusesi ncetheearly1900s( Popof f,1966),andissti
llusedby
somecompani es,especiall
ywhenmanual lyprepari
ngor ereserv
eest i
mates.
Thepol y gonal met hodisuniqueamongt heest i
matorsdi scussedinthissection,
becauset hepol ygonsdr awnar oundeachdr il
lholedef i
nebot hthevolumeofor eandit
s
grade.Thi saspectoft hepolygonalmet hodmeanst hati tcanbeusedbot ht oestimat
e
gradesandt oestimatet heboundaryoft hemi neraldeposi t
.Asanest i
mat orofthe
boundar yofadeposi t
,thepolygonisunbi asedandgi vesshar pboundar i
esratherthan
thesmoot hgradat i
onalboundar i
esaninterpolati
onmet hodsuchasi nversedi st
ance
met hodwoul dgi ve.

Di
agr
am abov
e:Pol
ygonal
met
hod

Sect
ional
areaest
imat
ion:
basedondef
ini
ngt
hear
eaandl
engt
hwei
ght
edgr
adef
or

Zi
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neVal
uat
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cs

speci
fi
ccrosssect
ion\
lev
elpl
an.Thear
eai
spr
oject
edhal
fwayt
othenextsect
ionof
miner
ali
sati
on.

Inversedi stancesquar ed( D2)

I
Char act eristi
csofDi stanceWei ght i
ngMet hod
Distancewei ghtingi nt erpolationmet hodshav ebeenwi delyusedbyt hemi ni
ngindustry,
especi allyf orore-bodymodel lingofopenpi tmi nes.Wher east hedistanceweighting
i
nt erpolator slargelyr eplacedt het raditi
onalmet hodsofest i
mat i
oni nthelate1960st he
distancewei ghtingi nt erpolatorsar enowbei ngr apidl
yreplacedbyt hegeost ati
sti
cal
techniqueofkr iging.
 usedwher et her ei si
nsuf f
icientdatat oachi evevariograms.
 i tisani mpr ov ementonpol ygonal met hod
 wei ghingoft hesur r
oundi ngsampl esi scal cul
atedbasedont heinverseoft heir
distancet ot hebl ockcont rolID,rai
sedt oaspeci f
icpower ,normallytwo
 wei ghtingf act or stheref oregi vegreaterimpor tancet othesampl esclosestt o
thebl ockcent roid.

Or
dinar
ykrigging;
 wi delyacceptedmet hodf orachiev
ingthebestpossi
bleesti
mat e
 t hemet hodassignswei ghtssucht hatt
heyref
lectt
hespatialv
ariabi
l
ityoft
he
gradest hemselves.
 Appl iescompl exgeostati
sticstoestimat
ethereserv
es/resources

Di
agr
am
 Fastandaccur at
emet hodofestimati
onisachi
evedbyuseofcomputersof
tware
applicat
ionsnamelyVulcan,Sur
pac,Datamine,
ArcVi
ew,etc
 softwaresareusedformi neandorebodymodel l
i
nginaddi
ti
ontotheabove
li
sted,wealsohaveAut oCAD,stopeCAD,Di
dger,MapI
nfoet
cwhicharemainly
for2Dand3Dmodel l
ing.

Tonnageest
imat
ion

1ton=1000kg
Tonnage=v ol
umexSg
Volume=areaxheight
Sgisthespeci
ficgr
avi
ty

Gr
adeest
imat
ion

Av
eragegr
ade=

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e Page55
 Mi
neVal
uat
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cs

Gr adecontrol
Itisthemanagementofmi neral r
eservesandresourcestoenablesust ai
nabi
li
tyand
viabil
it
yoft heminingoperat
ion.Itinv
olvesquali
tycontrol
measur esfortheoreand
wast eblasti
ngandmov ement,anddev el
opmentandst opesmoni tor
ing.Gradecontr
ol
startsfr
om planningandschedul i
ngandt akenallt
hewayf rom dir
ectingdevel
opment
andst opingtotheplantheadgr ade.

Dilutionis‘thenumberoneenemy ’hencei sav oidedasmuchaspossi bl

e
Underst ablecondi t
ionsandgoodmanagementami neshoul dsettledownandachi eve
asat i
sfactorybal ancebet weent hetonnage‘ mix ’
,qual i
tyandamountofor ethatcanbe
produced, hoi stedandt r
anspor t
ed,andt heamountt hatcanbet r
eatedef f
ici
entl
yatt he
plant .Miningcondi t
ionsdonotr emai nst aticforlong, howev er,andal lf
actor
saffect i
ng
ami ne’scur rentandf uturegradeofor emi nedr equiresur vei
ll
ance.Whennecessar ythe
dev elopmentpr ogrammemustbeadj ust
ed.
Oneoft heai msofgr adecont rolistoensur ethatasmuchaspossi bleofthepay able
por t
ionoft heor ebodyi smi nedanddel i
veredt ot het reatmentplant.Theamountl eft
behi ndinsi tu, orasbr okenor eandf inesi nwor kings, shouldbemi nimal andthe
amountofwast er ockmi nedandl ossesofmi neralint ransi
ttothepl antshouldalsobe
keptt oairreduci blemi nimum.

ControlofStopeWi dths
Instopi
ngi ti
sunav oidablethatacertai
namountofwast ei sbroken.Someoft his
wasteisi ncl
udedbet weenr eefbandsbutsomei sminedbey ondt hemar ginsoftheore
body.Gradeest imatesal l
owf oracert
ainamountcausedbycar el
essmi ning,orfrom
unknownsour ces.Wast ewidthsshownonsampl ingrecordsarescr ut
inizedr egular
ly
andinstructi
onsmar kedthereonforanyacti
onthathast obetaken.
Manygol dmi nesmai nt
ainast opi
ngwidthbonusincenti
vesystem todi scour agethe
miningofunnecessar ywaste.

Exampl e
Ofeffectofr educingst
opewidthi
nagoldmine
Considert hefoll
owingthr
eecases
Case1 Case2 Case3
Stopewi dth 120cm 118cm 118cm
m2 74.0 74.0 75.3
Conditions Normal Tmi l
leddecr
eased Tmi l
ledmaintai
ned
m2constant m2increased
t g/t g t g/t g t g/t g
Stopi
ng 239.8 15.0 235.8 15.3 239.8 15.3
3597.0 3597.0 3660.2
Development 18. 8 6. 0 112.
8 18.
8 6. 0 18.
8 6. 0
112.8 112.8
Othersour ces 32. 9 32.
9 32.
9
Short
f all 21.2 21.
2 21.
2
Hoist
ed 312.7 308.7 312.7

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 Mi
neVal
uat
ionandEconomi
cs

3709.
8 3709.8 3773.0
Sor
ted 77.
6 0.5 76.6 0. 5 77.
6 0. 5
38.
8 38.3 38.
8
Mi
l
led 235.
1 15.
61 232.1 15.82 235.1 15.88
3671.
0 3671.5 3734.2
Saving:3t@ Gainingrade15.88
USD10/t=USD30. 00 –15. 61=0.27g/t
for236tmill
ed.Gain for
235tmi l
ledGain
i
nrev enuefrom
i
ngr ade=15.82–
63.
2gl escostof
15.61 mining1.3m2
=0.
21g/
t

Thereducti
onof2cm inthestopewidthincase2couldresulti
nasavi
ngof3t
equiv
alentt
oUSD30. 00ifcostofmil
li
ngisUSD10/t.
Incase3mor egoldisobtai
nedfrom theaddi
ti
onalm2mi nedtomaint
aint
onnagel
ost
bythe2cm reduct
ioninstopewidth;t
hegradebenef
itsaccordi
ngl
ybutthi
smustbe
off
setbythecostofmi ni
ngtheextram2

WaysofGr adeCont rol

1. Gr absampl ingatt rammi nglevels,hoi standconv eyorbelt
sandst ockpi l
es
2. Managementofst ockpi les(blendingandt heconsumpt ion/depl
etionr at
e)
3. Pl anti
ngofwasher si nwast emat erialtotrackwast egoingi nt
othepl ant.
4. Moni t
ort hedev elopment sandgui dei ntoore
5. Moni t
orsl ypingsonst opesandbenches.
4. Moni t
oringdr il
li
ngi .e.wholel engthsandi nclinati
onst oavoidoverbr eaks,
i
nsuffici
ent breakinganddi l
ut i
on.
7. Consi derrockmechani csandgeol ogicalstructuresinyourplanni
nge. g.ef
fects
offaultstogr adeandsaf ety
.
8. Dr awpoi ntcont rol
9. Sor t
ing( normal l
ysmal lscaleoper at i
onsorwher eor eandwast ear edisti
nct)
.
10. Lev elcont rolsforopenpi t

Dil
uti
oncanbeestimatedusing:
 stopi
ngareas
 tonnages
 width(st
ope/development)
i
.e.br
okentonnageorareaorwidthver
susor
ebodysi
zeasper
cent
age.

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 Mi
neVal
uat
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cs

Uni
t6:Val
uat
ionofCopper
,Gol
d,Lead,
Sil
ver
,Ti
n,and
Zi
ncLodeMines.
DETERMINATI
ON OF AVERAGE METAL CONTENT;SAMPLI NG,ASSAY PLANS,
CALCULATI
ONS OF AVERAGES,PERCENTAGE OF ERRORS I
N ESTI
MATE FROM
SAMPLING.

Thefoll
owingdiscussi
onisli
mitedtoinsitudepositsofcopper
,gold,l
ead,si
l
ver,t
in,
andzinc.Thev al
uati
onofall
uvi
aldeposits,i
ron,
coal,andotherminesiseachaspecial
sci
encet oitselfandcannotbeadequat el
ydiscussedincommonwi t
ht hetypeof
deposit
sment i
onedabove.
Thevalueofamet almineoft
heor derunderdiscussi
ondependsupon:—

a.Thepr
ofitt
hatmaybewonf rom or
eexposed;
b.Thepr
ospecti
vepr of
itt
obeder i
vedfr
om extensi
onoftheor
ebeyondexposur
es;
c.Theef
fectofahigherorlowerpri
ceofmetal(excepti
ngol
dmines)
;
d.Theef
fi
ciencyofthemanagementdur i
ngreali
zati
on.

Thef i
rstmaybet er
medt heposi t
iv ev alue,andcanbeappr oxi
mat elydet ermi
nedby
sampl i
ng ort est-
tr
eatmentr uns.The second and t he third may be t ermed the
specul ati
vev alues,andar el
argel yamat terofjudgmentbasedongeol ogi calev
idence
andt heindust ri
aloutlook.Thef ourthi saquest ionofdev elopment ,equi pment,and
engi neeri
ngmet hodadapt edtot hepr ospect soft heenter
prise,togetherwi t
hcapable
execut iv
econt rolofthesewor ks.
Itshoul dbest atedattheoutsett hati tisut ter
lyimpossi
bletoaccur atel
yv alueanymi ne,
owi ngt othemanyspecul at
ivef actorsi nv olv
ed.Thebestt hatcanbedonei stostate
thatt hev al
uel iesbetweencer t
ainlimi ts,andt hatvari
ousst agesabov et hemi nimum
givenr epresentv ar
iousdegreesofr isk.Fur ther,i
twouldbebutst atingtruismst othose

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 Mi
neVal
uat
ionandEconomi
cs

engagedi nv aluingmi nest or epeatt hat ,becauseoft hel imi tedl ifeofev er ymi ne,
valuat i
onofsuchi nvestment scannotbebasedupont hepr i
nci pleofsi mpl ei nter est ;
nort hatanyi nv est menti sj ust i
fiedwi thoutaconsi der ationoft hemanagementt oensue.
Yett heignor anceoft heseessent i
alsissopr ev alentamongt hepubl i
ct hatt heywar rant
repet iti
ononev eryav ail
ableoccasi on.
To suchanext enti st her ealizationofpr ofitsi ndicated f rom t heot herf act ors
dependentupon t he subsequentmanagementoft he ent erpr i
se t hatt he aut hor
consi dersar eview ofunder gr oundengi neer ingandadmi ni strat i
onf rom aneconomi c
poi ntofv iew anessent ialt o anyessayupont hesubj ect .Whi let hemet allur gical
treat mentofor esi sanessent i
alf actori nmi neeconomi cs,i ti sconsi der edt hata
det aileddi scussi onoft hemy riadofpr ocessesunderhy pothet i
ccondi ti
onswoul dl ead
too f araf ield.Ther ef
oret he di scussi on i sl argel yl i
mi ted t o under gr ound and
admi nistrativemat ters.
Thev aluat ionofmi nesar isesnotonl yf rom t heirchangeofowner shi p,butf rom t he
necessi tyi nsoundadmi nistrat ionf oraknowl edgeofsomeoft hef undament alsof
valuat ion, suchasor er eser v
esandav er agev alues, thatmanager ialandf i
nanci alpol icy
maybegui dedar ight.Alsowi tht hegr owt hofcor por ateowner shipt her ei sademand
from owner sandst ockhol der sf orper iodi ci nfor mat ionast ot hei ntrinsi ccondi tionof
thei rproper ties.
Thegr owt hofabodyofspecul atorsandi nv est or sinmi ni ngst ocksandsecur ities
who desi repr of essi onalgui dancewhi ch cannotbebased upon f i
rst -
hand dat ai s
creat ingf urt herdemandont heengi neer .Opi nionsi nthesecasesmustbef or medon
casualv isitsorsecond- handi nf ormat i
on, andaknowl edgeofmenandt hingsgener ally.
Despi tethef eelingofsomeengi neerst hatt hel atterempl oy menti snotpr oper l
ybased
prof essional l
y ,
itisanex pandi ngphaseofengi neer s' wor k,andmustbet akenser iousl y.
Althoughi tl ackssat isf
act oryf oundat i
onf oraccur at ejudgment ,yett heengi neercan,
andshoul d, givehi sexper iencet oitwhent hecal lcomes, outofi nterestt ot hei ndust ry
asawhol e.Notonl ycanhei nameasur epr ot ectt hel amb,byi nsi stenceonno
i
nv est mentwi t
houtt hepr ovisi onofpr oper lyor gani zeddat aandsoundadmi nist rat ion
forhi sclient ,buthecandomucht odi rectt hei ndust ryf rom gambl ingi ntoi ndust rial
l
ines.
Anexami nationoft hef act orswhi char iseont hev al
uat i
onofmi nesi nv olv esawi de
range ofsubj ect s.Forpur posesoft hisdi scussi on t heymaybedi vided i nt ot he
followi ngheads: —

1.Determinati
onofAv erageMet alContentsoftheOre.
2.Determinati
onofQuant it
iesofOr e.
3.Prospecti
veValue.
4.RecoverablePercentageofGr ossValue.
5.Pri
ceofMet al
s.
6.CostofPr oducti
on.
7.Redempt i
onorAmor ti
zati
onofCapi talandI
nterest
.
8.Valuati
onofMi neswi t
houtOr einSight.
9.GeneralConductofExami nat
ionandRepor t
s.

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DETERMI NATI ONOFAVERAGEMETALCONTENTSOFTHEORE.

Thr eemeansofdet er mi nat ionoft heav eragemet alcont entofst andi ngor ear ein
use—Pr ev iousYi eld, Test -treat mentRuns, andSampl ing.
Prev iousYi eld. —Ther ear ecer taint ypesofor ewher et hepr ev iousy ieldf rom known
spacebecomest heessent ialbasi sofdet er minat i
onofquant ityandmet alcont entsof
orest andi ngandoft hef utur epr obabi l
ities.Wher emet al soccurl i
kepl umsi napuddi ng,
sampl ingbecomesdi f
ficultandunr el i
abl e,andwher eexper iencehaspr ov edasor tof
regul ar i
tyofr ecur r
enceoft hesepl ums, dependencemustnecessar i
lybepl acedonpast
recor ds,f ori ft hei rr eli
abi li
t yist obequest ioned,r esor tmustbehadt oext ensi v et est-
treat mentr uns.TheLakeSuper i
orcoppermi nesandt heMi ssour ileadandzi ncmi nes
areoft hist y peofdeposi t
.Ont heot hersor t sofdeposi tst hepr ev iousy ieldi sof tenput
forwar dasofi mpor t
antbear i
ngont hev alueoft heor est andi ng, butsuchy i
el d,unl ess
tcanbeaut
i hent icallyconnect edwi t
hbl ocksofor er emai ni ng,i snotnecessar il
ya
criterionoft hei rcont ent s.Excepti nt hecasesment i
oned,andasacheckonot her
met hodsofdet er mi nat i
on, ithasl ittl
epl acei nf i
nal concl usi ons.
TestPar cel s.—Tr eat mentonaconsi der abl escal eofsuf fici entlyr egul at edpar cels,
althought heor et ical l
yt hei dealmet hod, i
s, howev er, notof tenwi thint her eal m oft hings
pract ical.I n exami nat i
on on behal fofi nt ending pur chaser s,t het ime,expense,or
oppor tuni tyt of r audar eusual l
ypr ohi bitiv e,ev enwher et hepl antandf aci l
itiesf orsuch
wor kexi st .Ev eni ncaseswher et heengi neeri nmanagementofpr oduci ngmi nesi s
desi rousofdet er mi ningt hev alueofst andi ngor e,wi tht heexcept ionofdeposi tsoft he
typement ionedabov e, itisor dinar ilydonebyact ualsampl i
ng, becausesepar atemi ning
andt r eatmentoft estl ot si sgener al l
yi nconv eni entandexpensi ve.Asar esul t,the
det ermi nat ionoft hev alueofst andi ngor ei s,int hegr eatmaj orityofcases,doneby
sampl ingandassay ing.
Sampl ing. —Thewhol et heor yofsampl i
ngi sbasedont hedi stribut ionofmet al
s
throught heor e-bodywi t
hmor eorl essr egular i
ty,sot hati fsmal lpor t i
ons,t hati s
sampl es,bet akenf rom asuf fici
entnumberofpoi nt s,t hei rav er agewi l
lr epr esentf airly
closel yt heuni tv alueoft heor e.I ft heor ei soft heext r
emet ypeofi rregul armet al
distribut ionment i
onedunder" prev iousy i
el d, "thensampl inghasnopl ace.
Howf requent lysampl esmustbet aken,t hemanneroft aki ngt hem,andt hequant ity
thatconst i
tut esaf airsampl e,ar emat terst hatv arywi theachmi ne.Somuchdepends
upont hepr operper formanceoft hist askt hati ti si nf actt hemostcr iticalf eat ureof
mi neexami nat i
on.Tensampl espr oper lyt akenar emor ev aluabl et hanf iv ehundr ed
slov enl yones, likegr absampl es, forsuchanumberofbadoneswoul dofasur etyl ead
towhol l
ywr ongconcl usi ons.Gi venagoodsampl ingandapr operassaypl an,t he
valuat ionofami nei st wo- thirdsaccompl ished.I tshoul dbeani nf l
exi blepr inci plein
exami nat ions f orpur chase t hatev erysampl e mustbe t aken undert he per sonal
super visionoft heexami ningengi neerorhi strust edassi stant s.Asi def rom t hrowi ng
opent hedoor st of r
aud,t heav eragewor kmanwi llnotcar r
youtt hewor ki napr oper
manner ,unl essunderconst antsuper vision,becauseofhi sl ackofappr eci at i
onoft he
i
ssuesi nv olv ed.Sampl ingi shar d,uncongeni al,manuall abor .I tr equi resadealof
consci ent iousnesst ot akeenoughsampl esandt ot aket hem t hor oughl y .Theengi neer
doesnotexi stwho,uponcompl et ionoft hi st ask,consi der st hathehasgott oomany ,
andmostwi sht hatt heyhadt akenmor e.

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Theaccur acyofsampl ingasamet hodofdet er mini ngt hev al ueofst andi ngor ei sa
fact oroft henumberofsampl est aken.Theav er age,f orexampl e,ofsepar at esampl es
from eachsquar ei nchwoul dbemor eaccur atet hant hosef rom eachal ternat esquar e
i
nch.Howev er,t heaccumul at edknowl edgeandexper i
enceast ot hedi st ribut i
onof
met alst hr oughor ehasdet er mi nedappr oximat elyt hemanneroft aki ngsuchsampl es,
andt hel eastnumberwhi chwi llst i
llbyt hel awofav eragessecur eadegr eeofaccur acy
commensur at ewi tht heot herf actor sofest i
mat ion.
Asmet al sar edi st ribut edt hr oughor e- bodi esoff i
ssur eor i
gi nwi thmostr egul arit
yon
l
inespar al l
elt ot hest ri
keanddi p, anequalpor tionofor ef r
om ev er ypoi ntal ongcr oss-
sect ionsatr ightangl est ot hest rikewi llrepr esentf ai rlywel ltheav er agev aluesf ora
cer tain di st ance al ong t he st r
ike ei thersi de oft hese cr oss- sect ions.I n massi v e
deposi ts,sampl esect i
onsar et akeni nal ldi rections.Thei nter val satwhi chsampl e
sect ionsmustbecuti sobv i
ousl ydependentupont hegener alchar act eroft hedeposi t.
Ifthev aluesar ewel ldist ribut ed, al ongeri nter valmaybeempl oy edt hani nonesubj ect
tomar kedf luct uat ions.Asagener alr ule,fivef eeti st hedi stancemostaccept ed.Thi s,
i
ncasesofr egul ardi stribut ionofv alues, maybest retchedt ot enf eet , ori nr ev er semay
bedi mi nishedt ot woort hr eef eet .
Thewi dt hofor ewhi chmaybei ncludedf oronesampl eisdependentnotonl yupon
thewi dt hoft hedeposi t
,butal souponi t
schar act er.Wher et heor ei swi dert hant he
necessar yst opi ngwi dth,t hesampl eshoul dber egul at edsoast oshow t hepossi bl e
l
ocusofv alues.Themet al cont ent smaybe, andof tenar e,par ticul ar l
yi ndeposi tsoft he
i
mpr egnat ionorr epl acementt ype,gr eat eral ongsomest r
eaki nt heor e-body ,andt hi s
differ encemaybesuchast omakei tdesi rablet ost opeonl yapor ti
onoft het ot al
thickness.Fordeposi tsnar rowert hant henecessar yst opingwi dt ht hef ullbr eadt hof
oreshoul dbei ncl udedi nonesampl e,becauseusual lyt hewhol eoft hedeposi twi l
l
requi ret obebr oken.
Inor dert hatapay abl esect ionmaynotpossi blybedi lutedwi thmat er i
alunnecessar y
tomi ne, ift hedeposi tisov erf ourf eetandunderei ghtf eet,thedi st anceacr osst hev ein
orl odei susual lydi v i
dedi ntot wosampl es.I fst i
llwider ,eachi sconf inedt oaspanof
aboutf ourf eet ,notonl yf ort her easongi venabov e,butbecauset hemor enumer ous
thesampl es,t hegr eat ert heaccur acy .Thus,i nadeposi ttwent yf eetwi dei tmaybe
takenasagoodgui det hatat estsect ionacr osst heor e- bodyshoul dbedi videdi ntof iv e
par ts.
Ast ot hephy si caldet ailsofsampl et aking,ev er yengi neerhashi sownmet hodsand
saf eguar dsagai nstf raudander ror .Inal argeor gani zat ionofwhi cht hewr iterhadf or
somey ear st hedi rect ion,andwher esampl ingofmi neswasconst ant lyinpr ogr esson
anext ensi v escal e,notonl yi ncont empl ationofpur chase,butwher ei twasal so
sy stemat ical lyconduct edi noper at ingmi nesf orwor kingdat a,headopt edt heabov e
gener al l
inesandr equi redt hef oll
owi ngdet ails.
Af reshf aceofor ei sf i
r stbr okenandt henat renchcutaboutf ivei ncheswi deand
twoi nchesdeep.Thi st renchi scutwi thahammerandmoi l,or ,wher ecompr essedai r
i
sav ailabl eandt her ockhar d,asmal lair-dr i
lloft hehammert y pei sused.Thespoi l
from t het renchf or mst hesampl e,andi tisbr okendownuponal ar gecanv ascl ot h.
Af terwar dsi ti scr ushedsot hatal lpi eceswi llpassahal f-i
nchscr een,mi xedand
quar tered,t husr educi ngt hewei ghtt ohal f.Whet heri ti sagai ncr ushedandquar ter ed

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dependsuponwhatt hecondi ti
onsar east oassay ing.I fconv eni entt oassayof fi
ce,as
onagoi ngmi ne,t hewhol eoft hecr ushi ngandquar teri
ngwor kcanbedoneatt hat
office,wher et her ear eusual lysui tabl emechani calappl i
ances.I ft hesampl esmustbe
takenal ongdi stance,t hebul kf ort ranspor tcanber educedbyf inerbr eaki ngand
repeat edquar tering, unt ilt
her er emai nonl yaf ewounces.
Pr ecaut i
onsagai nstFr aud. —Muchhasbeenwr i
ttenaboutt hepr ecaut ionst obe
takenagai nstf raudi ncasesofv aluat ionsf orpur chase.Thebestsaf eguar dsar ean
alertey eandast rongr ightar m.Howev er ,cer tainsmal ldet ai l
shel p.Al argel eat herbag,
arranged t ol ockaf tert heor derofa mai lsack,i nt o whi ch sampl escan beput
under gr oundandwhi chi snev erunf ast enedexceptbyr esponsi bl emen,notonl yai ds
secur itybutr eli
ev est hemi nd.Af ewsampl esofcount ryr ockf or m agoodcheck,and
notesast ot hepr obabl ev alueoft heor e, from i nspect ionwhensampl ing, ar eusef ul.A
greathel pi nexami nat ioni st ohav et heassay soranal y sesdonecoi nci dent allywi tht he
sampl ing.A doubtcan t hen al way sbeset tl
ed byr esampl i
ng atonce,and much
knowl edgecanbegai nedwhi chmayr eliev esoexhaust i
v eapr ogr am asmi ghtbe
necessar ywer er esul tsnotknownunt ilaf terl eav i
ngt hemi ne.
AssayofSampl es. —Twoassay s,orast hecasemaybe,anal yses,ar eusual lymade
ofev er ysampl eandt heirav er aget aken.I nt hecaseofer r
at icdi f ferencesat hird
deter mi nat i
oni snecessar y.
AssayPl ans. —Anassaypl ani sapl anoft hewor kings, wi tht hel ocat ion, assayv alue,
andwi dthoft hesampl eent ereduponi t.I nami newi thanar row v einoror e-body ,a
l
ongi t
udi nalsect ioni ssuf fici
entbasef orsuchent r
ies, butwi thagr eat erwi dtht hanone
sampl espani tisdesi r
abl et omakepr elimi nar ypl ansofsepar at el ev els,wi nzes,et c.
,
andt oav eraget hev al ueoft hewhol epay abl ewi dthsonsuchpl ansbef or eent r yupona
l
ongi t
udi nalsect i
on.Suchal ongi t udi nalsect ionwi l
l,t hrought hei ndi cat eddi st r
ibut i
on
ofv al
ues,show t heshapeoft heor e-body —ast epnecessar yi nest imat ingquant iti
es
and oft he mostf undament ali mpor tance i n est imat ing t he pr obabi lit
ies ofor e
extensi onbey ondt her angeoft heopeni ngs.Thef inalassaypl anshoul dshow t he
aver agev alueoft hesev eralbl ocksofor e, andi ti sf rom t heseav er agest hatest imat es
ofquant i
tiesmustbemadeup.
Page 8 C alcul ationsofAv er ages. —Thef irstst epi nar ri
v ingatav er agev aluesi st o
reduceer rat i
chi ghassay st ot hegener alt enorofot heradj acentsampl es.Thi spoi nt
hasbeendi sput edatsomel engt h,mor eof tenbypr omot erst hanbyengi neer s,butt he
cust om i sv erygener allyandr ight l
yadopt ed.Er rat i
cal lyhi ghsampl esmayi ndicat e
presenceofunduemet al i
nt heassayat tri
but ablet ounconsci oussal ting, fori ft hev alue
beconf i
nedt oaf ew l ar gepar ticl est heymayf i
ndt hei rwayt hr oughal lthequar ter i
ng
i
nt ot heassay .Ort hesampl emayact ual l
yi ndicat er ichspot sofor e;buti nanyev ent
exper iencet eachest hatnodependencecanbeputuponr egul arr ecur renceofsuch
abnor mal lyr ichspot s.Aswi l
lbedi scussedunderper cent ageofer rori nsampl ing,
sampl esusual l
yi ndi cat ehi ghert hant het ruev al ue,ev enwher eer r aticassay shav e
beenel imi nat ed.Ther ear ecasesofpr of it
abl emi neswher et hev al ueswer eal linspot s,
andanassaypl anwoul dshow80%oft heassay sni l
,y etthesepocket swer esor ichas
togi v
ev al uet ot hewhol e.Pocketmi nes,asst at edbef or e,ar ebey ondv aluat i
onby
sampl ing,andasi def rom t hepr ev iousy ieldr ecour semustbehadt oact ualt reatment
runsonev er yblockofor esepar at ely.

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Af terr educt ionofer raticassay s,apr eli

mi nar yst udyoft her unsofv alueorshapesof
the or e-bodi es i s necessar y bef ore any cal cul ati
on of av erages.A pr eli
mi nar y
delineat ionoft heboundar i
esoft hepay ablear easont heassaypl anwi l
lindicatet he
sect i
onsoft hemi newhi char eunpay abl e,andf rom whi cht hereforesampl escanbe
ri
ght lyexcl udedi nar rivi
ngatanav erageoft hepay ableor e( Fig.1) .Inagener alway ,
onlyt heor ewhi chmustbemi nedneedbei ncludedi nav eraging.
Thecal culationoft heav erageassayv alueofst andi ngor ef rom sampl esisonewhi ch
seemst or equi resomest atementofel ement al
s.Al thoughi tmayseem pr i
mi ti
ve, i
tcan
donohar mt or ecal lthati fadumpoft wot onsofor eassay i
ngt went youncespert on
beaddedt oadumpoff ivet onsav er agingoneouncepert on,ther esulthasnotan
aver ageassayoft went y-oneouncesdi videdbyt henumberofdumps.Li kewiseone
sampl eov erawi dthoft wof eet,assay ingt went youncespert on,ifav eragedwi th
anot hersampl eov erawi dthoff i
vef eet,assay ingoneounce,i snomor et went y-one
ouncesdi videdbyt wosampl est hani nt hecaseoft het wodumps.I fcommonsense
wer enotsuf ficientdemonst rationoft his,itcanbeshownal gebr aically
.Wer esampl es
equi distantf rom eachot her ,andwer et heyofequalwi dth,t heav eragev aluewoul dbe
thesi mpl ear i
thmet icalmeanoft heassay s.Butt hi si sseldom t hecase.Thenumberof
i
nst ances,notonl yi npr act i
cebutal soi nt echnicall i
teratur e,wher ethef undament al
distinctionbet weenanar ithmet icalandageomet r i
cal meani sl ostsightofi samazi ng.
Toar r i
veatt heav eragev alueofsampl es, iti
snecessar y,inef f
ect, t
or educet hem t o
theact ualquant i
tyoft hemet alandv olumeofor er epresent edbyeach.Themet hodof
calcul ationt her eforei sonewhi chgi vesev erysampl eani mpor t
ancedependi ngupon
themet alcont entoft hev olumeofor ei trepr esent s.
Thev olumeofor eapper tainingtoanygi vensampl ecanbeconsi deredasapr i
smoi d,
thedi mensi onsofwhi chmaybest atedasf ol l
ows: —
W=Wi dt
hinfeetofor esampl ed.
  L=Lengthinfeetofor erepr
esentedbythesample.
D=Depthintothebl ocktowhi chval
uesareassumedt
openet
rat
e.
Wemayalsolet
:—
C=Thenumberofcubi cf
eetpertonofore.
 
V=Assayv al
ueoft hesampl e.
Then WLD/C=tonnageoft hepr i
smoid.
[*]
V 
WLD/C=totalmetalcontents.
[
Foot
note*:Str
ict
ly,t
hepri
smoi
dalf
ormulashoul
dbeused,buti
tcompl
i
cat
est
hest
udyundul
y,andf
or
pr
act
ical
purposestheabov
emaybetakenasthevol
ume.
]
Theav er
agev alueofanumberofsampl esi
sthetotalmet
alcont
entsoftheir
respect
ivepr
ismoids,divi
dedbyt
hetot
alt
onnageoft
hesepri
smoi
ds.I
fweletW,
W1, V,
V1etc.,
repr
esentdiff
erentsampl
es,
wehave:
—

V(
WLD/ C)+V1(
W1L1D1/
C)+V2(W2L2D2/ C)
=av
eragev
alue.
WLD/C+W1L1D1/
C+W2L2D2/
CPage10
Thi
smayber
educedt
o:—

VWLD)+(
( V1W1L1D1)+(
V2W2L2D2,
),et
c.

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WLD)+(
( W1L1D1)+(
W2L2D2)
,et
c.
Asamat t
eroffact,sampl esactual
lyrepr
esentt heval
ueoftheoutershel
lofthe
blockoforeonly,andthecontinuit
yofthesamev aluesthr
oughthebl
ockisageologi
cal
assumpt i
on.From theout ershell
,allthev al
uescan bet akento penet
rat
eequal
distancesintot
hebl ock,andt her
eforeD,D1,D2 maybeconsideredasequalandthe
equat i
onbecomes:—

VWL)+(
( V1W1L1)+(
V2W2L2)
,et
c.

WL)+(
( W1L1)+(
W2L2)
,et
c.
Thelengt
hofthepri
smoi dbaseLf oranygivensamplewillbeadi
stanceequal toone
-hal
fthesum ofthedistancest ot hetwoadj acentsamples.Asamat terofpract
ice,
samplesareusuall
ytakenatregul arinter
v al
s,andthel
engthsL,L1,L2 becomingthus
equalcaninsuchcasebeeliminated,andt heequati
onbecomes:—

VW)+(
( V1W1)+(
V2W2)
,et
c.

W +W1+W2,
etc.
Thename" assayfoot
"or"footval
ue"hasbeengi v
ent otherel
atonVW,t
i hatis,the
assayval
uemul ti
pli
edbyt hewidthsampled.
[*]I
tisbyt hismethodthatal
lsampl es
mustbeav er
aged.Thesamer el
ati
onobviousl
ycanbeev olvedbyusi
nganinchinstead
ofafoot,
andinnarrowveinstheassayi
nchisgeneral
lyused.
[
Footnot
e* :Aner
rorwi
l
lbefoundinthi
smet
hodunl
esst
het
woendsampl
esbehal
ved,
buti
nal
ongr
un
ofsamplesthi
smaybedisr
egar
ded.]
Wher et hepay ablecr oss-sectioni sdi vi
dedi ntomor et hanonesampl e,t hedifferent
sampl esi nt hesect ionmustbeav eragedbyt heabov ef or mula, bef orebeingcombi ned
wi tht headj acent sect i
on.Wher et hewi dthsampl edi snar rowert hant henecessar y
stopi ngwi dth,andwher ethewast ecannotbebr okensepar ately, thesampl ev al
uemust
bedi l
ut edt oast opi ngwi dth.Todi l
ut enarrowsampl est oast opi ngwi dth,abl ankv alue
ov ert heext r
awi dt hwhi chitisnecessar ytoincludemustbeav er agedwi tht hesampl e
from t heor eont heabov ef ormul a.Casesar i
sewher e,al t
houghacer tainwi dthof
wast e mustbe br oken wi tht he or e,i tsubsequent l
ycan be par ti
all
ysor t
ed out .
Pract icallynot hingbutexper i
enceont hedeposi tit
selfwi l
ldet er minehowf arthiswi ll
restor et hev alueoft heor etot heav erageoft hepay ableseam.I nanyev ent,nosor ti
ng
canel imi nateallsuchwast e;andi tisnecessar ytocal culatet hev alueont hebreaki ng
wi dth, andt hendeductf rom thegr osst onnaget obebr okenaper centagef rom sor ti
ng.
Ther ei sal way sanal l
owancet obemadei nsor ti
ngf oral ossofgoodor ewi tht he
discar ds.
Per cent ageofEr rorinEst imat esf rom Sampl i
ng. —Itmustber emember edt hatt he
whol et heor yofest imat i
onbysampl i
ngi sfoundeduponcer tainassumpt i
onsast o
ev ennessofcont i
nui tyandt ransitioni nv al
ueandv ol ume.I ti sbutabasi sf oran
est i
mat e,andanest i
mat eisnotast atementoff act.Itcannott her eforebet oofor cibl
y
repeat edt hatanest imat eisinher entlybutanappr oximat ion,takewhatcar eonemayi n
i
tsf oundi ng.Whi l
ei tispossi blet or ef
inemat hemat icalcal cul ationofav er
agest o

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almostanyni cet y,bey ondcer tainessent i

al sitaddsnot hingt oaccur acyandi sof ten
misl eadi ng.
Iti sdesi rabl et oconsi derwher eer rorsar emostl i
kelyt ocr eepi n,assumi ngt hatal l
fundament aldat aar ebot haccur at elyt akenandconsi der ed.Sampl ingofor einsi tuin
gener alhasat endencyt ogi vehi gherav eragev aluet hant heact ualr educt ionoft heor e
willshow.Ont hreeWestAust r
aliangol dmi nes, inrecor dscov eringaper iodofov ert wo
year s,wher esampl i
ngwasmostexhaust i
v easadai l
yr égimeoft hemi nes,t hev alues
i
ndi cat edbysampl i
ngwer e12% hi ghert hant hemi l
ly ieldpl ust hecont ent soft he
residues.Ont heWi twat ersrandgol dmi nes,t heact ualext ract ablev aluei sgener ally
consi der edt obeabout78t o80% oft heav er ageshownbysampl ing,whi l
et hemi l
l
extract ionsar eonav er ageabout90t o92% oft heheadv alue comi ngt ot hemi ll
.In
otherwor ds, ther eisaconst antdi scr epancyofabout10t o12%bet weent heest imat ed
valueasi ndi cat edbymi nesampl es,andt heact ualv alueasshownbyy ieldpl ust he
residues.AtBr okenHi ll,ont hreel eadmi nes,t hey i
eldi sabout12%l esst hansampl i
ng
woul di ndi cat e.Thi sconst ancyofer rori nonedi rectionhasnotbeensogener ally
acknowl edgedaswoul dbedesi rabl e,andi tmustbeal lowedf ori ncal cul atingf inal
resul ts.Thecausesoft heexagger ationseem t obe: —
First ,inabi li
tyt ost opeami net osuchf i
nel i
mitationsofwi dt h,orexcl usionof
unpay abl epat ches, aswoul dappearpr acticablewhensampl ing, thati sbyt hei ncl usion
whenmi ningofacer tai namountofbar renr ock.Ev eni ndeposi tsofaboutnor mal
stopi ngwi dth,i ti si mpossi bl etopr ev entt hebr eakingofacer tainamountofwast e,
eveni ftheor eoccur rencei sr egul arlyconf inedbywal l
s.
Ift hemi nebeoft hei mpr egnat iont ype, suchast hoseatGol dfield, orKal goor li
e, wi t
h
valuesl i
kepl umsi napuddi ng, andt hest opest hemsel v
esdi r
ect edmor ebyassay st han
byanyphy sical differencesi ntheor e, t
hedi screpancybecomesv erymuchi ncreased.I n
mineswher et her angeofv aluesi snar rowert hant henor malst opi ngwi dt h,somewal l
rockmustbebr oken.Al t
houghi ti scust omar yt oal low f ort hisi ncal cul atingt he
aver agev aluef rom sampl es,t heal l
owancesel dom seemsenough.I nmi neswher et he
orei sbr okenont ot het opofst opesf ill
edwi thwast e,t hereissomel ossunder ground
throughmi xtur ewi t hthef i
ll
ing.
Second, themet alcont entofor es, especi all
ywheni nt hef orm ofsul phides, isusual ly
mor ef ri
abl et hant hemat r
ix,andi nact ualbr eaki ngofsampl esanunduepr opor tionof
fri
abl emat erial usual lycr eepsi n.Thi sist ruemor ei nlead, copper ,andzi nc, thani ngol d
ores.Onsev er algol dmi nes,howev er ,testsonaccumul atedsampl esf ort heirsul phide
percent ageshowedadi stinct l
ygr eat err atiothant het enoroft heor ei tsel fint hemi ll
.
Ast hegol di susual lyassoci atedwi t ht hesul phi des, thesampl esshowedhi gherv alues
thant hemi l
l.
Ingener al,someconsi der ablef act orofsaf et ymustbeal lowedaf terar ri
v ingat
calcul atedav er ageofsampl es,—how muchi ti sdi ff
icultt osay ,but ,inanyev ent ,not
l
esst han10%.

Valuat
ionofChr
omeMi
nes
Example

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ionalDi
plomaModul
e Page65
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neVal
uat
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cs

Assayresul
tsfr
om aproducingChromeoremi
neobt
ainedf
rom sampl
est
akenf
rom
var
iousrai
lwaytr
ucksarerecordedbel
ow

Rat
edCapaci
ty(
t) %Cr
2O3 %FeO

39 44.
10 12.
65

39 45.
35 12.
90

19 44.
85 13.
50

19 44.
85 13.
20

39 47.
15 12.
90

42 45.
30 12.
85

40 44.
55 13.
00

19 44.
75 12.
70

18 46.
10 13.
15

19 44.
80 13.
15

(
a)Cal
cul
atet
heav
eragev
alueCr
2O3andFeOcont
ent

(
b)Usi
ngthefor
mula(0.
8802xCr2O3)
/FeOandt
heper
cent
agev
aluescal
cul
ate
Cr:
Fer
ati
ooftheconsignment
.

(
c)Usi
ngt
heformul
aCr=Cr2O3x0..
682andt
hepercentageval
ue,
cal
cul
atet
otal
chr
omi
um cont
entoft
heconsi
gnmenttot
henearesttone.

(
d)Usi
ngthefor
mulaFe=FeOx0.7773andt
heper
centagev
alue,
cal
cul
atet
het
otal
i
roncont
entoft
heconsi
gnmenttot
henear
estt
onne.

(
e)Check(
b)byr
esul
tsobt
ainedi
n(c)and(
d)

(
f)Howar
ethef
act
ors0.
8802;
0.6842;
and0,
7773obt
ained

Sol
uti
on

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page66
 Mi
neVal
uat
ionandEconomi
cs

Capaci
ty(
t) %Cr
2O3 %FeO Tx%Cr
2O3 Tx%FeO

39 44.
10 12.
65 1719.
90 493.
35

39 45.
35 12.
90 1768.
65 503.
10

19 44.
85 13.
50 852.
15 256.
50

19 44.
85 13.
20 852.
15 250.
80

39 47.
15 12.
90 1838.
85 503.
10

42 45.
30 12.
85 1902.
60 539.
70

40 44.
.55 13.
00 1782.
00 520.
00

19 44.
75 12.
70 850.
25 241.
30

18 46.
10 13.
15 829.
8 236.
70

19 44.
80 13.
15 851.
20 249.
85

293 45.
21 12.
95 13247.
55 3794.
40

(
a) %Cr 2O3=1 3247. 55/ 293=45. 21%
%FeO=3794. 4/ 293=12. 95%
(
b)Cr:
Fe=( 0.8802x45. 21) /12. 95=3. 07:
1
(
c)Crcont ent=0. 6842x0. 4521x293=90. 63tCr
(
d)Fecont ent=0. 7773x0. 1295x293=29. 49tFe
(
e)ThereforeCr  
:
Fe=90. 63/ 29. 49=3. 07 
:1
(
f)Atomicwei ghtCr =52Fe=56O=16
Atomicwei ghtofCr 2/ Atomi cweightofCr 2O3
=104/ 152=0. 6842
Atomicwei ghtofFe/ Atomi cweightofFeO
=56/72=0. 7778
(Atomicwei ghtofCr 2/ Atomi cweightofCr 2O3)x
(Atomicwei ghtofFeO/ At omi cweightofFe)
=0.6842/ 0.7778=0. 8802

Quest
ion
a)Thebrokenrockfr
om adr i
ve2,5m highby2,3m wi
dehasanav
eragegol
dval
ueof5,
0g/
t.
Thereefi
nthedriv
ei s29cm t
ruewi dthf
ull
yexposedonbot
hsidewal
l
sanddi
ppi
ngat
o
23.Calcul
atethereefval
ue.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page67
 Mi
neVal
uat
ionandEconomi
cs

Whenpr
oduct
ioncommences,ami
ningwi
dthof90cm i
smai
ntai
ned.Cal
cul
ate
t
hegol
dstopi
ngval
ue.

Exampl
e
b)Usi
ngt
hei
nfor
mat
iongi
venont
het
abl
ebel
ow:

Met
resSampl
ed Met
respay
abl
e Channelwi
dth Reefwi
dth Reefval
ue
(m) (
m) (
cm) (cm) (g/
t)

75 38 51 25 62.
0

90 47 47 20 27.
0

80 56 53 18 46.
0

70 39 56 28 68.
5

55 45 49 27 63.
0

30 30 49 25 35.
5

45 32 60 30 37.
5

Cal
cul
ate:

(
i) Tot
almet
ressampl
ed

(
ii
) Tot
almet
respay
abl
e

(
ii
i) %Pay
abi
l
ity

(
iv) Av
eragechannel
widt
handgr
ade

Av
erager
eefwi
dthandgr
ade

Sol
uti
on
Sampled Metr
es Channelwi
dth Reefwi
dth Reefval
ue Mineral
metr
es pay
able (CW) (RW) (RV) mxcw mxRw content

(
m.cm (
m.c
(
m) (
m) (
cm) (
cm) (
g/t
) ) m) (
m.RW.
Rv)

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page68
 Mi
neVal
uat
ionandEconomi
cs

75 38 51 25 62.
0 1938 950 58900

90 47 47 20 27.
0 2209 940 25380

80 56 53 18 46.
0 2968 1008 46368

70 39 56 28 68.
5 2184 1092 74802

55 45 49 27 63.
0 2205 1215 76545

30 30 49 25 35.
5 1470 750 26625

45 32 60 30 37.
5 1920 960 36000

445 287       14894 6915 344620

Uni
t7:Val
uat
ionOfCoalMi
nes
TYPESOFCOALMI NI
NG   
  
Ther ati
onaleforsel
ect
ingamet hodformini
ngcoaldependsonsuchf act
orsas
topography,geometr
y of the coalseam,geol
ogy of t
he over
lyi
ng r
ocks and

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page69
 Mi
neVal
uat
ionandEconomi
cs

env ironment alr equi rement sorr est raints.Ov er ri

dingt hese,howev er,ar et heeconomi c
factor s.Theyi ncl ude:av ailabi l
ity, qual i
tyandcost soft her equi redwor kf orce( i
ncl uding
theav ai labil
ityoft rainedsuper v i
sor sandmanager s);adequacyofhousi ng, feedi ngand
recreat i
onalf acilitiesf ort hewor ker s( especi allywhent hemi nei sl ocat edatadi st ance
from al ocalcommuni t
y);av ailabilit
yoft henecessar yequi pmentandmachi neryandof
wor ker st r
ained t o oper atei t;av ailabilit
yand cost soft ranspor t
at i
on f orwor kers,
necessar ysuppl ies, andf orget tingt hecoalt ot heuserorpur chaser ;avai labili
tyandt he
costoft henecessar ycapi talt of inancet heoper ation( inl ocal currency );andt hemar ket
fort hepar ti
cul art y peofcoalt obeext r
act ed( i.e.,thepr iceatwhi chi tmaybesol d).A
maj orf act ori st hest ri
ppi ngr atio,t hati s,theamountofov erbur denmat erialt obe
remov edi npr opor tiont ot heamountofcoalt hatcanbeext racted;ast hisincr eases,
thecostofmi ni ngbecomesl essat tractive.Ani mpor t
antf act or,especi allyinsur face
mi ning,t hat,unf or tunat ely,i sof tenov erlookedi nt heequat ion,i st hecostofr est or i
ng
thet er rainandt heenv i
ronmentwhent hemi ningoper ationi scl oseddown.
 
Heal t handSaf ety
Anot hercr it
icalf act ori st hecostofpr otectingt heheal t
handsaf etyoft hemi ner s.
Unf or tunat ely,par ticularlyi n smal l-scale oper at i
ons,i nst ead ofbei ng wei ghed i n
deci ding whet herorhow t he coalshoul d be ext racted,t he necessar ypr ot ect i
ve
measur esar eof t eni gnor edorshor t-changed.
 
Act ual ly,al t
hought her ear eal way sunsuspect edhazar ds-theymaycomef rom t he
element sr athert hant hemi ni ngoper ati
ons- anymi ningoper ationcanbesaf epr ov i
ding
therei sacommi tmentf rom al l par t
iest oasaf eoper ation.
 
Sur faceCoalMi nes
Sur face mi ning ofcoali s per formed bya v arietyofmet hods dependi ng on t he
topogr aphy ,thear eai nwhi cht hemi ningi sbeingunder t
akenandenv ironment al fact ors.
Allmet hodsi nvol vet her emov alofov erbur denmat erialt oallowf ort heext r
act i
onoft he
coal .Whi l
egener al l
ysaf ert hanunder groundmi ning,sur faceoper ationsdohav esome
speci fichazar dst hatmustbeaddr essed.Pr omi nentamongt hesei st heuseofheav y
equi pmentwhi ch,i naddi tiont oacci dent s,mayi nv olveexposur et oexhaustf umes,
noiseandcont actwi thf uel ,lubr i
cant sandsol v ent s.Cl i
mat i
ccondi ti
ons, suchasheav y
rain,snow andi ce,poorv isibili
tyandexcessi v eheatorcol dmaycompoundt hese
hazar ds.Whenbl ast ingi sr equi r
edt obr eakupr ockf ormat ions,speci alpr ecaut ionsi n
thest or age, handl inganduseofexpl osivesar er equi r
ed.
 
Sur faceoper at i
onsr equi ret heuseofhugewast edumpst ost or eov erbur denpr oduct s.
Appr opr iatecont r olsmustbei mpl ement edt opr ev entdumpf ail
ur eandt opr otectt he
empl oy ees, thegener alpubl icandt heenv i
ronment .
 

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page70
 Mi
neVal
uat
ionandEconomi
cs

UndergroundMi ning
Thereisal soav arietyofmet hodsf orunder groundmi ni
ng.Theircommondenomi nator
i
st hecr eationoft unnel
sf rom thesur facet othecoalseam andt heuseofmachi nes
and/orexpl osiv
est oextractthecoal .Inaddi t
iontothehighfrequencyofaccidents-coal
mining r anks high on t he listofhazar dous workplaces wher everstati
sti
cs ar e
maintai
ned- t
hepot enti
alforamaj orincidentinvolvi
ngmul ti
plelossofl if
eisal way s
presentinunder groundoper ations.Twopr i
mar ycausesofsuchcat astr
ophesarecav e-
i
ns due t of ault
y engineer i
ng oft he tunnels and explosion and fir
e due tot he
accumul ationofmet haneand/ orf l
ammabl elevel
sofai r
bornecoal dust.
Wewi llstartbygivingabr i
efbackgr oundt ot hemaincolli
eryfoundi nZimbabwe

ValuationofCoalDeposi ts
HowMuchi sMyCoal Wor t
h?
Factorsar et hechar acteri
sticsofagi v
enar eat hathaveadirectef fectonthe
v al
ueofcoal inthatar eaanddet erminet hetimemi ni
ngisexpect edt o
commence
Var i
ablesar ei nformat ionthatconstant l
ychangesandhasadi r
ectef f
ectonthe
v al
ueofcoal .Thi sinformationmustber ecalculatedever
yy eartomai nt
ain
currency
-I
nor dertodet ermi nev alueofcoal onapr operty,t
her earemanyt hingst oconsider-7
Factorsand5v ari
abl es.
Factors
Mar ketI nterest
Mar ketMi ne-Abili
ty
Conf l
icts
Vol atili
ty
Env ironment al
Seam/ Pr i
meSeam
TFact or
○ Ev eryfactorhasscal e-20, 40,80( Somecan=0)
Var i
ables
Coal Pr i
ces
Roy altyRat es
Capi tal i
zationRat e
Di scountRat e
Cr it
eriaf orFact ors
Factors
Mar ketInterest
Densi tyofcoal rel
atedt r
ansactionswi thi
n5mi l
esofpr operty(sal
es,
leases, per mitapplicati
ons,prospecting,etc)

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page71
 Mi
neVal
uat
ionandEconomi
cs

Transacti
onsar eani ndicat orofi nter esti ncoal proper tiesso…mor etransacti
onsi nthe
areathehighert hev alueandar eoneoft hesi xfact orsi nt hecal cul
at i
onoft he
approximat etimeofmi ning
Mar ketMi ne-Abi li
ty
Densi tyofmi nes( hist oricandcur r
ent )wi thin5mi lesofpr operty
Sur face, Deep, Boom, Hi stor i
c,Cur rentMi nes( asdef i
nedi ntheRule)
Mininginthear eaal sohasani mpact .
Mor eminesi nt hear ea—mor ei nfrast ruct ureexi sts—l i
kel ihoodofmi ningincreases
Conf l
ict( Wel ls)
Densi tyofOi l andGaswel lsonpr oper ty
Themor eoi l/gaswel lsonapr oper ty, thel owert helikelihoodf ormi ning.
Volatil
ity
Themeasur eoft hecoal ’
sabi litytov apor ize
○ I gnition, bur nr ate, andener gyemi ssi on
○ Hi gherv olati
lity=i ncr easedv alue
○ Cr i
teriabasedonchar act eri
sticsofSt eam Coal
Forthepur posesofcoal v aluat i
onandassessment ,Vol atili
tylessthan17%=f actorof
80,>17%=f act orof0.
Environment al
Ref lectsenv ironment al rest ri
ctionsi nanar eat hataf f
ect smine-abil
i
tyand
coal value
Dat af rom av ar i
etyofsour cesEPA, DEP, WVGES, PTD
Pri
meSeam Assi gnment( BasedonCoal BedMappi ng)
“thickest ,pr ev iouslymi ned, stratigraphical ly-highestcoal bedint hearea,
wi thsuf ficientmi neabl et onst osust ainmi ningf ortwo( 2)years…”Notal l
proper ti
esgetapr i
meseam—y oumaynothav eacoal seam thatwill
suppor tmi ni ngoper ationsf or2y ears

TFactor
Reflectstheamountoft imet hatminingoperati
onsar
epr
oject
edt
o
commenceonagi v enpr operty
Values-20, 40,80(y ears)
Ther esultofcombinat i
onofal lotherfact
ors
(Tr
ans+Mi ne+Wel l+Volatil
it
y+Env i
ronment al
+Pr i
meSeam)/
3=T( Ti
me)
Factor
20–Pr oject edminingin20y r
s–Hi gherValues
40–mi ni
ngi n40yrs–LowerVal ues
80–mi ni
ngin80y rs–LowestVal ues
Var
iabl
es
AverageCoal Pri
ces

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page72
 Mi
neVal
uat
ionandEconomi
cs

Forwar dWei ght edAv erage–3Year

Metallurgical vs.St eam
DiscountRat e
Rateusedt ocal cul atepr esentv alueofacoal propert
ybasedonthetime
expectedbef or emi ningt akespl ace
Presentv alueoff ut ureincome( deter
mi nedbyT- Fact
or)
Capital
izat
ionRat e
Usedal ongwi t
hdi scountr ateindeterminingpr esentval
ueofcoal
properti
es
Threey earr unni ngav erage
Combi nesSaf eRat e, RiskRat e,Non-l
iquidit
yRat e,ManagementRate,and
subtractsI nflationRat e
FactorCrit
eria
Tobeev aluat edbi annual l
ybasedongeo- statisti
calanal
ysi
sofdata
Mar ketI nter est( Transactions)
Mar ketMi neabi l
ity(Mines)
UseConf li
ct( Wel l
s)
Env ironment al
Onceal li
nformationhasbeenassoci atedwi t
heachpar cel(percoalseam pr
esent)
,
val
uescanbedet er mined
CoalvaluesarebasedonanI NCOMEappr oach
Simpl
yput —basedonf ut urer oyal ti
es, discountedbycal culatedTimeFactor

Det
ermi
nat
ionoft
heAmountofCoali
nPl
ace

Oncet hedeci sionhasbeenmadet opr oceedwi thadet ail

edevaluationoft hecoal
deposi tsonapar ti
cul
art ractwi t
ht hepur poseofopeni ngasur facemi ne, adatabase
mustbegener atedatal ev elofdet ailsuffi
cienttochar acteri
zethecoal andov erburden.
Anumberofgeol ogi
calorgeophy si caltechniquescanbeusedt opr ovidedat a.I
nar eas
wher eabl anketofunconsol i
datedmat eri
al wasdeposi t
edont heer osionalupper
surfaceoft heunder lyi
ngbedr ock,sei smicref r
acti
on, seismicrefl
ect i
on, or
,insome
cases, gravitysur veyscanr evealtheconf igurati
onoft hebedrocksur face.Also,f aults
withv erti
cal displacement snosmal lerthan6. 1m (20f t),orunderideal conditi
ons4. 6
m( 15f t
),canbei denti
fi
edusi ngsei smi ctechniques( Daly,etal.
,1976) .Intheev entt hat
i
gneousi ntrusivesar epresent ,grav i
tyormagnet i
ct echniquescanbeusedt oassi stin
defi
nitionoft heigneous- sediment ar yboundar y.

Alloftheforegoi
ngt echniquescan,undercertaincondi t
ions, supplyusefuldat
atothe
coalexplorat
ioni
stbut ,
asgener alexpl
orati
ont ool
s,theyl ackt heresolvi
ngpowerfor
widespreadexplorati
oni nthecoalindustr
y.Thecar efull
ypl anneddr i
ll
ingprogr
am
remainsthepr i
mar yexplorat
iontechniqueint
hecoal indust r
yandpr ov i
desthebul
kof
therawdat afrom whichcoal andov er
burdencharacter i
zationmapsar emadeand
uponwhi chmi ni
ngdeci si
onsar ebased.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page73
 Mi
neVal
uat
ionandEconomi
cs

Attheleaset ractlevel,dril
li
ngi susedpr imaril
ytodef inear easoft hickcoal andt o
determinecoal qual i
ty.Thesedat aar ethenusedt ocal culatemeasur edr eserves.Dr i
l
l-
holedensi t
ynecessar yt opr over eservesv ari
eswi ththecompl exityoft hegeol ogyand
thedegreeofconsi stencyi ncoal bedthickness.Inar easofst r
uctural compl exityor
wherecoal bedthicknessi shi ghlyv ari
able,dri
ll
-holespaci ngmaybeascl oseasone
holeevery1. 6ha( 4acr es)(Rei ll
y,1968) .Conversely,i
ngeol ogi
callyundi sturbedar eas
wherecoal bedthicknessi sr elati
v el
yconst ant,
drillholesar esomet imesspaced0. 4km
(0.
25mi le)ormor eapar t.Local var i
ati
onsi ncoal-qualit
ypar amet ers( suchassul fur
content
)const i
tut
eanot herr easont oincreasedr i
lli
ngdensi tyi
fthosepar amet ersare
cri
ti
calindet erminingt hemar ketabili
tyofthecoal .Accur acyoft her eserv eest i
mat e
shouldbewi thi
n20%andt hedr i
ll
ingpr ogram shouldbegear edtopr oducef iguresat
thi
slevel ofaccuracy( Wi er,1976) .

Inplanni ngasur facemi ne,coringofal lt

heexpl oratoryhol espr obablywi llnotbe
required.Asuf fi
cientnumberofhol esshoul dbecor edt oal l
owt hegeol ogistto
determi nethedeposi ti
onal env i
ronmentoft hecoal andt herebyt omakedeci sionsfor
l
ocat i
onofaddi ti
onal testhol esandf ormi nepl anni ng.Dat afrom t hecor edhol eswi l
l
alsobeusef ulindet ermi ni
ngt het y
peofbl ast holeequi pmentandbi tsaswel lastypes
ofmi ningequi pmentt hatwi l
lbemostappr opr i
ate.Ot herwise,expl oratoryholescanbe
dril
l
edbyt helessexpensi v
eai r-
rotarymet hod.Whenacoal sampl ei sneededi na
parti
culararea, ar otaryholeisdr i
l
ledtoest ablisht heelev ati
onoft hecoal .Asecond
holeist henputdowni mmedi atelyadjacentt ot hef i
rst,sti
llusi
ngt her ot
arybi tbut
stoppingt hehol ejustabov etheposi ti
onoft hecoal bedasest ablishedbyt heprevious
hole.Thecor ebar relandbi ti
st hensubst i
tut edf orther otarybitandt hecoal bedi s
cored.

Syst
emati
csampleorcoredescri
pti
onsandrecor
dingofcoalthi
cknessesanddept
hs
ar
enecessar
ytoinsur
ereli
ablei
ntegr
ati
onofthedataontothevari
ousint
erpr
eti
ve
mapswhicharei
mportanttool
sintheeval
uat
ionprocess.

Allexpl oratoryhol esshoul dhav egeophy sical logsrunsoonaf terthedr il

li
ngi s
compl eted.Ef fectivegeophy sicalloggi ngcanr educet henumberofdr i
llholesr equired
toev aluat eapr opertybymaxi mi z
ingt hedat aobt ainedf r
om eachhol e.Geophy sical
l
ogsser veasacheckonwr i
ttenlogsandpr ov ideapr eci ser ecordofcoal depthand
thickness.Geophy si
cal l
ogsofcor edhol esal sopr ovideameansofi dent i
fying
l
ithologi esi nintervalswher et hecor eisl ostbycompar ingt heloggi ngt ools’response
todi ff
er entl i
thologiesinot hercor edint ervals.Thebasi cbor eholegeophy sical suit
e
(cali
br ateddensi ty,gamma, resisti
vit
y )canpr ov i
det hef ollowingdat a:(1)coal
thicknessanddept h;(2)l
ithologicdat a; (
3)deposi ti
onal data—nat ureofcont actsand
verticalst r
at i
graphi csequences; (4)hy drologicdat a—aqui fers,lostci r
culat i
onzones,
wat erlev els;(5)ident i
fi
cationofst r
uct uraldat aandst ratigraphicsequences; (6)
recogni tionandcor rel
ati
onofspeci ficcoal i
nt erval
si saugment edbyt heirindividual
signat ures; and( 7)recogni t
ionofsubt lemi ner alogicchanges, suchasal teration,that
aredi ffi
cultt odi scernfrom cut ti
ngs( modi f i
edf r
om Cr owder ,1986) .

Mor
esophi
sti
cat
edgeophy
sical
sur
vey
scanpr
ovi
demanymor
ety
pesofdat
asuchas

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page74
 Mi
neVal
uat
ionandEconomi
cs

thecoalqualityparametersofash, carbon,vol
ati
l
emat t
er,
heatcontent,
moi sture,
mineralmat t
er,andrank,atgreatercost.Crowder(1986)esti
matest hecostofabasic
geophysicall
oggi ngsui
teat10t o20%ofat ot
alrotar
ydril
l
ingbudgetwithmor e
sophi
sticatedloggingsuit
esincreasingt hecosttoasmuchas50%.Apar t
ialli
stof
geophysicaltoolsandtheirappl
icationtocoalexplorat
ionisgi
veninTable2. 6.2.

Oncet hedat aar eassembl ed,thev erybasict askofcor rect l

yidenti
fyi
ngandcor relating
thecoal bedst hroughoutt hear eaofinterestmustbeper formed.Ext racaremustbe
takeni nar easwher emul t
ipl
ecoal bedsofv aryingt hicknessar epresentinclose
stratigraphicpr oxi mitytoeachot her.Incorrectident i
ficationoft hebedscanr esultina
misl eadingev aluationofthepr operty,which,int urn,cancausesev ereproblemsi nt he
mini ng,pr eparat i
on, ormarketingaspect soft heoper ati
on.Geol ogi
stscommonl yuse
phy sicalchar act eri
sticsoftheov er
bur den,phy sicalandchemi calcharacteri
sticsoft he
coal bed, distinct i
vest r
ati
graphicmar kersorsequences, signaturesongeophy si
cal logs,
andanyot herper ti
nentdatat oassistinthecor r
ecti dentificati
onandcor r
elati
onoft he
coal beds.I nmor ecompl exareas,addi t
ional datamayhav etobeobt ainedincer tain
partsoft hetractbyt hedr i
ll
i
ngofmor ecloselyspacedhol esbef orecorrelat
ionscanbe
madewi thconf i
dence.

Whent hecoal bedst rat i

graphyhasbeenwor kedout ,i
tisusef ul toconst ructaseriesof
mapsusi ngdat aobt ainedf rom f i
eldinvestigations,dri
lli
ng, andl aboratorywor kthatwill
depictcoal andov er
bur dent hickness, ov er
burdent ocoal rati
o,andsi gnif
icantanalyt
ical
paramet ers.Thesemapsmaybepr epar edasaser iesofr egisteredmy laroverl
ayst o
all
owsi mul t
aneousv iewi ngofdi fferentcombi nati
onsofdat aort heymaybe
const r
uctedsepar at
ely .Ast ructurecont ourmapwi ththet argetcoal bedast hedatum
horizonisalsoanext remel yusef ulmet hodt odepi ctstructuralorst rati
graphicfeatures
thataffectthet opogr aphyoft hecoal bed.Al ternativel
y,theav ailabledat acanbe
enteredintoacomput erdat abaseandappr opr i
atesof twar eprogr amscanbeut il
ized
topor t
rayst r
atigraphic, mining,oreconomi ccondi ti
onsatdesi redscal es.

Coal andov erburdenthicknessmaps( termedisopachs)ar econst ructedbypl ott

ingthe
appropr i
atethicknessv aluesonabasemapandconst ructingcont ourli
nes( i
sopachs)
representi
ngr egularl
yincr easingordecreasi
ngt hi
cknessi ntervalsusi ngthepl ot
ted
valuesasgui desf orposi ti
oningthecontourli
nes.Anexampl eofacoal isopachmapi s
giveninFig.2.6.7.Similarisopachmapscanbeconst ructedshowi ngov er
burden
thi
ckness.I soplethmapscanbeconst ructedusingthesamepr incipleasthei sopach
maps, butsubst it
uti
ngv ari
ouscoal quali
typarametersfort het hicknessdat a(Fig.2.6.
8).
Thistypeofdat apresent ati
onwoul dhaveappl i
cat
ionwher erelativelysmallvar i
ati
ons
i
ncoal quali
tywoul dsigni f
icantl
yimpactthemar ketabi
lit
yoft hecoal .

Fi
gur
e2.
6.7.

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Fi
gur
e2.
6.8.

Usingt hesamecoal andov er

bur denthicknessdat a,linesrepr
esent
ingoverburdent o
coalr ati
osor“miningrati
os”(expressedas5: 1,10:1, etc.
)canbedrawn.Ar ati
oof5: 1
meanst hatthel
inerepresent
st heli
mi tatwhich0. 9t( 1ton)ofcoalcanbeext r
act edby
remov i
ngnotmor ethan3.8m3( 5cuy d)ofov erburden.Stri
ctl
yspeaki
ng,thi
sisnota
trueratiobecauseithasdimensi onsofov erburdenv olumeperunitweightofextracted
coal.Thei ncl
usi
onoft heseunitsgivesrisetoadi f
ferencebetweenrati
oscomput edin
Englishunitsandrati
oscomput edusingmet r
icunits.

Rati
osofthi
cknessvaluesalonecannotbeusedt odeducemi neeconomics.These
val
uesmustbeconv ertedtocubi
cmet ers(cubi
cy ards)ofoverbur
denpert onne(
ton)
ofcoalt
oprovi
dedat atotheanalysti
nuni t
sthatcanbemor ereadil
yequatedtomini
ng
cost
s.Theconversi
onf rom f
eet(
ormet ers)tocubicyards(orcubicmeters)pert
on(or
metri
cton)i
soutli
nedasf oll
owsfrom Wier(1976):

or

wher eOBisthethi
cknessofov erbur
den,Ci st hethicknessofthecoal,andSGi sthe
specifi
cgravi
tyofcoal.Becauseofthedif
f erencesint heuni
tsoft heEngli
shandmet ri
c
systems,rat
ioscal
culatedinthemetricsystem ar eabout0.8(0.842778)thatofthe
Englishsy
stem.Ifspecifi
cgravit
yisnotknown, buttherankofthecoal isknown,the
fol
lowingspecif
icgravi
tyvaluesarecommonl yused( Averi
tt
,1975) :

Rank Speci
fi
cgr
avi
ty

Ant
hraci
te 1.
47

Bi
tumi
nous 1.
32

Subbi
tumi
nous 1.
30

Li
gni
te 1.
29

I
tshoul
dbenoted,however,
thati
tisi
mportantt
ousecorr
ectspeci
fi
cgravi
tyv
alues
whenev
erpossi
blebecauseift
hecoalcont
ainsmuchmineral
mattert
hathasahigher

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speci
fi
cgravi
tythancoal
,i
twil
lskewt
heresul
tsbydecreasi
ngtherat
ioandi
ncr
easi
ng
cal
cul
atedtonnagesperuni
tar
eabyapossibl
ysi
gnif
icantamount.

Oncet heov erbur denli

neshavebeenest ablished,t hear eacant henbedi vi
dedi nto
mini
nguni tsaccor di
ngt otheminingpl anandr eser v
escanbecal culated.Thet erms
“measur ed,”“indicat
ed,”and“i
nferred”arecommonl yusedt odef i
ner eservecat egor i
es
wit
hmeasur edr eserv
eshav i
ngthehi ghestlev elofr eli
abil
it
yandi nferredr eservest he
l
owest .Thedi st ancebetweenpointsofmeasur ementdi sti
nguisht hedi fferentreli
abili
ty
cat
egor ies.Wood, etal.(
1983)uses0. 8,2.4, and9. 7km ( 0.
5,1.5, and6mi les)ast he
maximum di stancebet weenpointsofmeasur ementf ormeasur ed, i
ndi cated,and
i
nferredcoal ,respectivel
y.I
nmining, howev er,typicalexplorat
iondr i
ll
-holespaci ngis
suff
icientlycloset oclassi
fyal
lreservesasmeasur ed.

Thefir
streserv
edet ermi
nati
onisfort
otal
coali
npl
ace.Thebasi
ccalcul
ati
onsi
nmet
ri
c
andEngli
shuni t
s,andusingspeci
fi
cgravi
tyf
oragi
vencoalasdet
erminedint
he
l
aborator
y,areasfollows:

whereSGisspeci
fi
cgr
avi
ty,
Cist
hicknessofcoal
inmet
ers,
andAi
sar
eai
nsquar
e
meters.

I
nEngl
i
shuni
ts:

whereC,A,andSGaret
hesameter
msasinthemetri
cequat
ion,
and1359.
7isa
const
antrequi
redt
oest
abl
i
shthecorr
ectt
onnagef
actort
ousewitht
heEngl
ishuni
ts.

I
faver
agespecif
icgr
avi
tyv
aluesareused,
thefol
lowi
ngv
aluesar
efr
equent
lyusedas
t
onnagef
actorsinasi
mpli
fi
edform oft
heequati
on.

Rank Tonsofcoalperacr
eperf
toft
hickness

Ant
hraci
te 2000

Bi
tumi
nous 1800

Subbi
tumi
nous 1770

Li
gni
te 1750

I
nthecaseofbi
tumi
nouscoal
thecal
cul
ati
onwoul
dthenbeasf
oll
ows:

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Resourcef i
gurescalcul
atedfrom t
heprecedingequat i
onsar eesti
matesonl yandar e
notprecise,but,
wi t
hat hor
oughexplor
ationdr i
ll
ingprogram,shouldbeaccur ateto±
10%(Wi er,1976).Thisfi
guremustthenbeadj usteddownwar dt oaccountforlosses
i
ncurreddur i
ngexcav at
ing,handl
i
ng,processing,andtransport
ingthecoal.Anticipati
ng
themagni tudeoftheselossesisusual
lyaccompl i
shedbydrawingonpr evi
ousmi ning
exper
iencei nthearea,andinthecaseofpr ocessingorpreparati
onloss,byreviewing
washabilit
ystudies.I
nsomecases, cumul ati
velosscanappr oach50%oft het otalin
sit
ureser v
e.

CoalQual
it
y

Thedeterminati
onofcoalquali
tyisani nt
egr alpartofthecoal explorati
onpr ocess.I
tis
asimportantasanyoftheotherfactorsthatar eusedt odet er
minet hemi ningpotenti
al
ofagiventract
.Unli
kemanyoft heot herfactors,howev er,cer
taincoal qualit
y
parameterscanbechangedt omeetuserspeci fi
cationsbycoal cleaningtechnology
and/orbyblendi
ngwithothercoals.Thefollowingdi scussiontouchesont hemor e
commonl yusedtypesofanalyt
icaldatafrom thev iewpointofthei nf
or mationthey
conveytotheexplor
ati
oni
staboutt hesuitabili
tyofhi sproductforcer t
ainenduses.

Analyt
icalproceduresf ortestingcoal havebeenconti
nuouslyrefinedandupdat edf or
thepastsev er
al decadesbyASTM ( Amer i
canSoci
etyforTesting&Mat eri
als).Many
majorconsumer sandl argecoal -
miningcompaniesmai ntai
nwel l-
equippedl aboratori
es
toanalyzecoal.Theconsumerdoest histocheckthequalit
yoft hecoal hepur chases,
whereast heproducermustst ayabreastofthequali
tyofthepr oduct,
especi al
lyast he
mini
ngoper at
ionsadv ancei ntonewt erri
tory
.Anal
yti
calwor kissomet imescont racted
outtoindependentl aboratorieseit
hert orunthepr
imaryanal y
sesort oser v
easqual i
ty
contr
ol checksont hemi ningcompany ’
sorconsumer’sresult
s.

Theanalysesmostf requentlyperfor
medoncoal incl
udeproxi
mat eanalysi
s,cal
orif
ic
val
ue,andsul f
ur.Theproximat eanalysi
sconsistsofthedeter
mi nat
ionofmoi st
ure,
vol
ati
lemat ter
,fi
xedcarbon, andash.Ot herty
pesofanalysesfrequentl
yperformedon
coali
ncludeulti
mat eanalyses,thedeter
mi nat
ionoffreeswell
ingindex,and
deter
minationoftraceelementcont ent.

Moi sture:Moi stureoccursnat urall

yi ncoal bedsinanumberofdi ff
erentformsandhas
beendet er
mi nedbymanymet hods.Themostcommonmet hodi sthroughsome
procedur alvariantoft hemeasur ementofwei ghtlossuponheat i
ng.Thesepr ocedures
measur ethesur facemoi stureandt heinherentmoi sture,whi chi sthatmoi st
ure
cont ainedinthecapi l
l
arysy stem oft hecoal.Moi sturecont ainedi nthemol ecular
structureoft hemi ner
almat terpr esenti ncoal (
wat erofhy dr ati
on)isnotaccount edfor
byt histypeofdet erminati
on, nordoesi tincludethemoi sturel i
beratedbyt hether mal
decomposi ti
onofor ganicmat terint hecoal.Thewat erofhy drati
oniscommonl y
assi gnedav alueof8%oft heashv alueandt hewat erofdecomposi t
ionisnot
consi deredsignificantinmostappl i
cat i
ons.Foramor edet aileddiscussionofanal yt
ical
techni quesusedi nt hisandot heraspect sofcoal characterization,seeRees( 1966) .
Tot alor“as-r
ecei ved”moi sture, whichi sthev al
uef requent l
ygi venincoal analyses,i
sa

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cs

combinat ionofsur faceandi nherentmoi st ureandi susedf orcal

cul ati
ngot her
paramet erstotheas- r
ecei vedbasis.Tot al oras-receivedmoisturev aluesar ecrit
ical
becausecoal contractsar eoftenbasedonas- receivedcalori
fi
cv alues,usual ly
measur edi nBrit
isht hermal unit
sperpoundofcoal ,whichareobt ainedbyconv erti
ng
drycalorifi
cv al
uest oas- receivedcalorif
icv al
uesusi ngtotalmoist urecont ent.Because
ofthetonnagesi nvolvedi nmostcont racts, andt hefactthatmostcont ainpenal t
y
cl
ausesf orcoal t
hatdoesnotmeetspeci ficati
ons, evenasmal lerrorint hemoi sture
contentv alueusedt odet ermineas-receiv edcal ori
fi
cv al
uecanr esul ti
nsi gnifi
cant
fi
nancial l
osses.Moi sturecont ental
sopl ay sani mportantrol
einhandl i
ngand
processingcoal .Asl it
tleas0. 5%sur facemoi sturecancausecoal tostickinachut e.
Highermoi st
urecont ent salsocauseadecr easedcokey i
eldincokeov ens.

Volat
il
eMatter:Volat
il
emat termeasur ementsdonotr eflecttheactualamountofa
giv
ensubst
ancepr esentinacoal sampl ebutratherar
emeasur esofthermal
decomposi
ti
onpr oductsthatform duri
ngt heheatingofacoal sampleunderrigidl
y
speci
fi
edconditi
ons.Exampl esofvolatil
emat er
ialsdr
ivenof fintheheatingprocess
i
ncludewat
er,hydrogen,carbondioxide,carbonmonoxi de,hydrogensul f
ide,
chlori
ne,
tar
,ammonia,andav ari
etyoforganiccompounds.

Volatil
emat teri
sapar ameterusedi nsomecoal classi
fi
cati
onsy stems.I ti
sused
i
ndirectlyi
nt heASTM sy st
em fordisti
nguishingbet weencoalsofmedi um v ol
ati
le
bi
tumi nousandhi gherrank.Volati
lemattervaluespr ovi
deusefulinformat i
onin
mat chingspecifi
ccoal stoappr opri
atecombust ionequi pmentandar ealsoof
i
mpor t
anceinsel ecti
ngpr ocessesandcondi tionsf orthegasif
icationandl i
quefact
ion
ofcoal.Asagener al
rule,t
hebestmet al
lur
gical gradecokingcoalscont ainbetween15
and31%v olati
lemat terandarer ankedlow-tomedi um-vol
ati
l
ebi tuminousi nt
heASTM
system.

FixedCar bon:Fi
xedcar
bonisthecar bonthatremainsinthesampl eaft
er
determinati
onofthevol
ati
l
emat ter.Thenumer ical
valueoffixedcarbonisobt
ainedby
subtracti
ngthesum ofmoist
ure,ash, andvol
atil
ematterfrom 100.

Fixedcarbonv aluesareusedonadr y,miner

al-matter
-f
reebasi
sasboundari
esbet
ween
coalsrankedasmedi um- v
olat
il
ebit
uminousandhi gherint
heASTM syst
em.Because
theamountoff i
xedcar bonandashisanappr oxi
mat i
onoftheamountofcoke
produced,thefixedcarbonv al
ueisusedtoestimatecokeyiel
d.Iti
sal
sousedin
calcul
ati
ngt heef f
ici
enciesofcombusti
onequi pment.

Ash:Ashi sthenoncombust i
bleresiduethati sl
eftwhencoal isburned.Thisash
residueder ivesfrom twobasi csour ceswi thi
nthecoal bedincl
uding:(1)extr
aneous
detritalparti
clesofshal e,clay,etc.,andsecondar ymineralmateri
alsuchascal cit
e,
pyrite,andmar casite;
and( 2)inor ganicelementschemi call
yboundi ntheorganic
compoundsmaki ngupt hecoal .Thedet r
itusandsecondar ymineralsmakeupt hemost
significantpartoft heashcont ent.Itshouldbenot edthattheter
msashandmi neral
mat terar enotsy nonymous.Ash, asstatedpr ev
iousl
y,istheresi
duel eftaf
terburni
nga
quant ityofcoal i
nt hepr esenceofai r
.Theamountofmi ner
almatterpresentinacoal

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canbedeter
minedbyapoi ntcountperf
ormedonaspecial
l
ypr epar
edcoal sampl
e
usingapet
rogr
aphicmicroscope.Asimplermet
hodfordet
erminingmineralmatt
eri
f
theashandtot
alsulf
urvaluesareknownisbyusingt
heParrformulaasfoll
ows:

whereMM i sminer
al matt
er,
Ai spercent
ageofashinthesample,
andSi sthe
percentageoft
otalsul
furi
nthesampl e.ThePar
rfor
mul ai
sprobabl
yt hemethodmost
widelyusedint
heUni t
edStatesfordeter
mini
ngmineralmatt
ercontent.

Theamountofashcont ainedinacoal ,aswel last heash’scomposi tion, aff

ectt he
coal’sperfor manceandt hereforeitssuccessi nt hemar ketpl
ace.Ev eni nveryclean
coalst heashcont entmaybe2t o3%andashcont entsof10%ormor ear enot
uncommoni nmanypr oductivecoal beds.Car bonaceousmat er i
al i
nt hecoal bedt hat
containsexcessi veashi sf requentlytermedbone, bonecoal ,car bonaceousshal e,black
shale,rash, oranyofanumberofot herl ocall
yusedt erms.Thegr eatert heashcont ent
ofacoal bedt heloweri st heheatingv alueperuni twei ghtoft hecoal , sot hat,i
nhi gher
ashcoal ,mor ecoal i
srequi r
edt oproduceagi venamountofheatanddi sposal ofthe
ashr esidueal sobecomesapr oblem.Theashcont entofacoal usual l
ycanbel essened
by“ washing”t hecoal incoal preparationplants.Thi susual l
yent ailsgr indingthecoal to
aspeci fi
edsi ze,thensuspendi ngi tinal i
quidwi t
haspeci ficgr avityi
nt er mediate
betweent hatofcoal andt hemi neral mat t
ersot hatt hemi neral mat t
ert endst osinki n
thesol uti
onandt hecoal t
endst ofloat.Byr epeatingt hi
spr ocedur esev eralti
mes, a
signifi
cantpar toft hemi neralmattercont entcanber emov edf rom thecoal .

Ashv ar
iesgr eatl
yincomposi t
ion.I tmaycont ainv ar
y i
ngamount sofsi licaandal umina
deri
v edf rom detrit
al mi ner als;i
ronoxi desf rom si deri
te,
py rit
e, andmar casite;calcium
oxi
desandcar bonat esf rom sider ite;i
ronsul f
idef rom pyr i
teandmar casi t
e; and
magnesi um, sodium, pot assium, phosphor us,andawi der angeoft raceel ement s
(Ti
eman, 1973).Ashf usiont emper atur es,ameasur eoft het emper aturesatwhi chcoal
ashbegi nst odef orm, sof tens,andbecomesf luid,areimpor t
antcoal qualit
y
paramet er sthatdet ermi nehowt heashr esiduef rom agi v encoal willreactwheni tis
burned.Ashbegi nst odef orm att emper aturest hatrangef rom 950°t o1700° C(1750°t o
3100° F).Ashwi t
hf usiont emper at uresatt hel owerendoft hi
sspect rum i sdesi rablein
certainty pesoff ur
naceswher eashi sr emov edf rom thebot tom i nal iquidst at
ebuti s
undesi r
abl einstaticf uel bedf urnaceswher eremov aloft her esiduei sadi f
f i
cultand
costlypr ocess.Py ri
teandmar casi te(FeS2) ,sider i
te(FeCO3) ,
cal cit
e( CaCO3) ,andot her
carbonat emi neralsar ef requent lyr esponsi blef orlowf usiont emper atur esinash,
wher eashi ghsili
caoral umi nacont entsar eassoci atedwi thhi gherf usi ontemper atures.

Calori
fi
cValue:IntheASTM sy st
em, calori
fi
cval
ueisoneofthepri
maryrank-
defi
ning
parameter
sf orbit
uminous,subbi
tumi nous,andl
i
gnit
iccoal
s.Cal
ori
ficv
alueisusuall
y
repor
tedinBr i
ti
shther
mal unit
sperpound, orcal
ori
espergram,andcanbeeasil
y
convert
edfrom onesystem totheother .

Coal
usedf
orst
eam el
ect
ri
cgener
ati
oni
ssomet
imessol
dataf
ixedr
atepermi
l
li
on

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Bri
ti
sht hermal uni
tswithpenalt
iesf
orexcessashorsulfur(
Wier,
1976).Becausemany
contractsspecifycal
ori
ficval
ueonan“ as-
recei
ved”basi
sandmostanal y
ticalr
esul
ts
arereportedona“ dr
y”basi
s,dryval
uesmustbeconv ert
edto“as-
recei
ved”v al
uesby
meansoft hefoll
owingformula:

Theconver
sionformulacont
ainsper
centmoist
ureasat
erm,
sot
hei
mpor
tanceof
accur
atemoistur
ev al
uescannotbeover
stat
ed.

Sulfur:Sulfurpresent
snumer ouspr oblemsincoal uti
li
zati
on.Incombust i
on
applicati
onsi tcancausecorrosionint heboil
erorthebuildupofheav yfouli
nginthe
boil
ert ubes.Largeamount sofSO2ar ealsogenerateduponcombust i
onandmay
contributetoat mospheri
cpolluti
onunl essremovedbyl imestone-basedstack
scrubber s.Thesamepot enti
al cor
rosionandpol l
utionproblemsal soapplytothe
l
iquef act
ion,gasifi
cat
ion,andcokingpr ocesseswiththeaddi t
ionalconcernthat
unaccept ablyhighlev
elsofsulfurmi ghtbepassedal ongthrought hecoketotheiron
andst eel r
esulti
nginaninfer
iorproduct( Ward,1984).

Thr eecommonl yrecogni zedf ormsofsul f

uri ncoal ar esulfatesul fur ,py ri
ti
csul fur, and
organi csul fur.Oft hese, sulfatei st hel eastimpor tant .Infact ,sulf
at esul furcont ent sare
frequent lyont heor derof0.1%.Lar gesul fatev aluesar esomet i
mesi ndicativeofa
weat her edsampl e.Rel ativeamount sofpy ri
ticandor ganicsul furv ar ywi dely; i
nsome
coal st otal sulfurcont enti sal mostal l organicwher easi not hercoal si tisvir
t ual l
yal l
py ri
ti
c.I ti simpor tantt oanal y ti
cal lydist i
nguishbet weenor gani candpy ri
ticsul furi n
coal becauseatl eastsomeoft hepy riti
csul f
urcanber emov edbyspeci fi
cgr av ity
separ ationmet hods.Py riti
csul furoccur sinthemi ner al
spy riteandmar casiteand,
dependi ngont hepar ti
clesi zeoft hesemi neral sandt hesi zet owhi cht hecoal is
crushed, halformor eoft hissul furcanbeel i
mi nat ed.Thatpor t
ionoft hepy riti
csul fur
thatoccur si nfinel ydi ssemi natedf ormt hroughoutt hecoal cannotber emov edby
speci ficgr av it
ysepar ationmet hods.Theor gani csul furconst i
tuenti spar toft he
hy drocar bonst r uctur eoft hecoal andcannotber emov edbyconv ent ional coal cleani ng
technol ogy .Althoughpr omi singl abor atorytechni quesdesi gnedt or emov eor gani c
sul f
urar eunderi nv estigat i
on, nocommer ciall
yf easi bleprocesscur rent lyisav ailable.
Unt ilwashabi l
ityt est sar eper for medwhi chcanpr ov idespeci f
icdat a, Wi er(1976)
adv ocat est akingt hesum oft heor gani csulfurcont entandone- halft hepy ri
ticsul fur
cont entasapr el i
mi nar yi ndicatoroft hef i
nal total sulfurcont entoft hecl eanedcoal .
Gener ally,onl ycoal swi thl owsul f urcont entsar eusedf orst eam el ect ricgener at i
on.
Av eragesul furcont ent sofcoal sr eceiv edatU. S.powerpl ant sof50MW orgr eat er
gener atingcapaci tyf orthemont hsOct oberthr oughDecember1986r angedf rom 0. 16
to5. 6%.Theov erall averagesul furcont entofcoal receivedatt hesesamepl ant sdur i
ng
thesameper i
odwas1. 36%( U.S.Dept .ofEner gy ,1987) .Var iati
onsi nmaxi mum
allowabl esul furcont entsi ndi fferentar easar eduepr imarilyt odiffer encesi nl ocal
regul ationsandt ot hepr esenceofst ackscr ubber satsomef acili
ti
es.Thepr act iceof
blendi ngdi fferentcoal stoachi ev er equi r
edspeci ficat i
onsal lowst heuseofsome

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hi
ghersul
furcoal
sthatwoul
dnotot
her
wisebesui
tabl
eforst
eam-
elect
ri
cgener
ati
on.

Li
kewise,i
ncokepr oduct
ion,t
heuseofahighsul
furcoal
resul
tsi
nadecreaseinthe
amountofcoket hatcanbeproducedfr
om agi
venamountofcoal.Coalt
hatcannotbe
cl
eanedtoasul f
urcontentoflesst
han1.5%i
snotli
kelyt
obeused, ev
enasablend,for
cokeproduct
ion.

FreeSwel l
ingIndex:Anot hercommonl yperformedanal yt
icalproceduref orcoalisthe
det er
mi nat
ionoft hefr eeswel l
ingi ndex( FSI)
.TheFSIi sconsideredusef ul,al
thoughnot
def i
nit
ive,i
nev al
uat i
ngt hecoki ngpr oper ti
esofacoal .I
tisameasur eoft hev ol
ume
i
ncr easeofacoal wheni tisheat edunderspeci ficcondi ti
onsandi sreportedin
number sfr
om 0t o9,wi t
ht hehi gherv aluesconsider edsuper i
orfrom acoki ng
standpoi nt
.FSIv aluesgener all
yi ncreasewi thrankupt otheant hraci
terankbutv al
ues
withinagi venrankmayv arywidel y.Gener al
lyspeaki ng,coalswi t
hFSIv aluesof2or
l
esspr obablyarenotsui tableforcokepr oducti
onandv arioususer smayr equi
rehigher
mi nimum FSIv aluesfort heirspeci fi
cequi pmentt hanot hers.Othertestst hatareused
topr edictt
hecoki ngpot ent i
alofagi vencoal i
ncludet heAudi bert-Ar
nudi lat
omet er
,
Gieselerplastomet er,andGr ay-Kingcoket ype,butt heFSIi ssti
llthemostcommonl y
repor t
edpr ocedureofi tstype.

Ult
imateAnal ysis:Ul t
imat eanal ysisdetermi nest heper centagesoft hemaj or
consti
tuentelement sofcoal .Det erminationsofhy drogen, carbon, nit
rogen, oxygen,and
tot
alsulfurarerepor ted.Ty picall
y,ulti
mat eanal ysesar enotper formedonal lcoal
samplesbutonl yonar epresent ati
v enumberofsampl es.Dat afrom ulti
mat eanal yses
areusedpr i
ncipall
yf orr esear chpur posesandi ncer t
aincl assifi
cationsystems,
alt
hought herearecommer cialandi ndustrialapplicati
onsoft hedat a.Specifical
ly,
rat
iosofcar bon,hy drogen, andoxy genv aluesareusedt odet erminecoal rankandas
anaidindet erminingacoal ’ssui t
abili
tyforcokemanuf acture,gasifi
cati
on, or
l
iquefact
ion.Dataonoxy gencont entalsoar eusedi ncal culatingboilereff
iciencies.

Nit
r ogenpr esentinthecoal mayr eacttoform ammoni um compoundswhencoal is
carboni zedi nthecokingpr ocess.Thesecompoundscanbeext r
actedandmar ketedas
fer
tili
zerorf oruseint hemanuf actureofnit
ricacid.Ammoni um compoundsar ealso
for
medi nthegasi fi
cationandliquefacti
onpr ocesses.Thei rf
ormat i
on,howev er,
ut i
l
izes
someoft heav ail
ablehy dr
ogent hatwouldot herwisebeusedi ntheformati
onoft he
mor ev aluabl ehydrocarbonendpr oducts.Also,duringcoal combust i
on,ni
trogenf orms
oxideswhi chbecomeat mosphericpoll
utantswhenr eleased.Forthesereasons, l
ow
nit
rogencont ent
sar eusuallypreferr
edincoal (War d,1984).

Otherelementsf orwhichanalysesarecommonl ysoughtincludechlori

neand
phosphorus.Chlorinecontr
ibutestocorrosi
onandfouli
ngpr oblemsandpossi blyt
o
atmosphericpolluti
on.Aknowl edgeofthechlori
necontentisalsoessentiali
n
determini
ngot herparameters,i
ncludi
ngt ot
alsul
fur
.Phosphor us,whichisconcent
rated
pri
mar i
l
yint hemi neralmatt
er,isundesi
rablei
ncokingcoalsbecause, l
ikesulf
ur,i
tcan
contaminatethest eelendproduct.

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Tr aceElement s:Mostcoal scont ai

nawi der angeoft r
aceel ements, someofwhi ch
tendt oconcent r
ateintheor ganicf acti
onoft hecoal ,whileother
shav eani norgani c
aff i
nit
yandar econcentratedint hemi ner al mat ter.I
nsomecases, tr
aceel ementsui tes
aredi sti
ncti
veenought oser veasai dsinseam cor rel
ationorasi ndicator soft he
deposi ti
onalenvir
onment .Bor on,inparticul ar,i
smor est r
onglyassoci atedwi t
hcoal s
for medundermar i
neinfl
uences.Somet r aceel ement smayactascat alystsor
i
nhi bit
orsdur i
ngthecompl exr eactionsinv olvedi ncoal conversi
onandmaybe
transferredtotheendpr oduct soft hosepr ocesses.Tr aceel ement smayal sobe
releasedt otheenvir
onmentt hroughcombust ionort hrought heweat heringoft hecoal
ash.Notal l
oftheelement sreleasedi ntot heenv i
ronmentar eharmf ul but
concent rati
onsoftoxicelement ssuchasl ead, arseni
c, cadmium, ormer cur ymi ght
precludet heuseofcer t
aincoal sr i
chint hoseel ements.Al t
ernat
ively,othert race
element smaybeconsi deredaspot enti
al lymar ketabl
eby pr
oductsofcoal util
ization.

HwangeCoalMining
Under
groundMining
TheCompanyhasoperat
edat
otal
ofsi
x(6)under
groundmi
nesbef
orei
tscur
rentmi
ne
3-
Main.Theseare:
 

Yearsof
NameOfCompany Per
iod
Operati
on
     
 
  
No.1Coll
i
eryCirca 1901–1958 57
 
  
No.2Coll
i
ery 1927–1972 45
 
  
No.1NorthColl
i
ery 1969–1974 5
 
  
No.4Coll
i
ery 1974–1981 7
 
  
No.3Coll
i
ery 1953–1999 46
 
  
M-BlockMine 1998–2004 6
 
  
No.3Main 2005–todat
e  
     
 

Intheoldmi nes,pri
orto1998, Electr
o/hydrauli
carc-wal l
coal cutterswereusedt ocuta
slotint
othecoal face900mm f r
om thef l
oor.Blastholesar edril
ledabov eandbelow
thefreeface( slot)befor
echar gingtheholeswi th“permitted”(specialsafety)
explosi
ves.Thef aceisblastedtoliberat
ef r
agment edcoal .
Thecoal isthenl oadedbyl oad-haul-
dumpv ehi
cleswhi chdeposi tthecoal ontoa
hopperorf eederbr eakerwhichi nturncrushesandsi zest hecoal beforedischar
gingit
ontoaconv eyorbeltnetworktosur face.Thecoal isloadedandt ransport
edont oaface

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conv eyorwhi cht hent ransf erst hecoal vi

aasy stem ofgat eandt r
unkconv eyorstot he
i
nclineshaf t
,andt henf inallyupt ot hesur facecr ushingandscr eeningplant .
Under groundcoal mi nesar ecl assi fiedasf ierymi nesr equi ringspeci all
ydesi gned
el
ect ri
cal andbl ast ingsy stemst opr ev entt hepossi bil
ityofmet hanegasandcoal dust
explosions.Fi erymi nesar eoper at edunderspeci ficmi ni ngl aws.
TheNo. 3Col li
er ymi ningt echnol ogywassuper cededbyt henewcont i
nuousmi nerand
shut t
lecarassi stedsy st em.The  Cont inuousMi nerhasr eplacedt heneedf orblasting
asitusesat hree{ 3}met rewi der ot atingpi ckdr um t or ipt hrought hecoal face.
Themachi ne,whi chi scomput ercont roll
edandr emot el yoper ated, l
oadst hecutcoal
ontoachai nconv ey orwhi chr unst hr oughi tsbel l
yt odi schar gei nt
o 20t onneshut tle
cars.Theshut tlecar st hendeposi tt hecoal ontoaf eederbr eakerf orsizingbef ore
dischar gi
ngt hecoal ont ot heconv ey orsy stem.Theon- boar dcomput eront he
Cont i
nuousMi nercont rol sal lmachi neact ivit
ies,includi nggast est i
ng,dust
suppr essionandequi pmentmoni t oringsy stems.
Roofsuppor tint hemi nei sef fect edbyanel ectricram r oofbol terwhi l
esect ioncleaning
i
scar r
iedoutbyal oad- haul -dumpuni t.
 Thisi stheunder gr oundmi ni
ngsy stem f ornext
mi l
lennium par ticul arlybecausei ti sf lexibleandcanbeupgr adedassi t
uat ionsdemand.
NO. 3Mai nUnder gr oundPr oject
TheMi ll
ennium under gr oundmi ni ngsy st
em st i
llcontinuesatt henewNo. 3Mai n Project
.

OpencastMi ning
Opencastmi ningst artedonanex per i
ment albasisinthelate1960sbutr eall
y
establisheditselfin1972f ollowi ngt heKamandamaMi neDi saster,whenaqui ck
replacementsour ceofcoal wasur gentlyneededbyt heCompany .
Miningwasdonebyconv entional shov elandt r
uckmet hodsunt i
l 1983whenst r i
p
miningusi ngadr agl i
newasi ntroduced.Dur i
ngt hattime,theZESAPowerSt ationwas
commi ssionedatHwangeandHwangeCol li
erycommi ssionedtheOpencastExpansi on
Projecttomeett hei ncreaseddemand.
OpencastMi ningi nv olvest hecl ear ing,blasti
ngandr emov alonlandt hatcoverst he
coal seam whi chgener allyliesbet ween25and70met r
esbel owt hesur face.
PitLay out
Miningact ivi
ti
est akepl aceondi ffer entlevel
swi thinthemi ne,knownasmi ning
benches.
TheOpencastMi nel ay outdemandst hatthesesepar atebenchesar eal lmined
simul t
aneousl y.Ther ear ef ourv er ydi sti
nctmi ningact i
vi
tieswhicht akeplace:
 Su pplement arySt ri
ppi ngOv erburdenMi ning
 Ov erburdenSt r
ippi ngbyt heDr agl
ine
 Po werandCoki ngCoal mi ning
 Re habili
tationoft hemi nedoutar eas
TheSuppl ement ar ySt ri
ppi ng  mini ngoper ati
onist hestartofthemi ningsequence.The
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l
andi sf irstbushcl ear edbybul l
dozer ssot hatdr ill
ingandbl ast i
ngoper at ionscant ake
place.Al l theundul atingt er raini smi nedbyshov el andt r uckt ocr eat eal ev elwor king
bencht hatt hedr agl inecanoper ateef fi
cient lyf rom.I nal l,aboutat hirdoft het ot al
over bur deni smi nedbyt hismet hod.
Ov erbur deni sloadedbyBucy rusEr ieRopeShov elsi ntoCat erpill
ar50t onnehaul t
rucks.
Thismat erial istr anspor t
edanddumpedont ot heol ddr agl inespoi l
 dumpsv i
acr oss-pit
ramps.Thi smet hodol ogyi sal sot hef i
rstst agei nt her ehabi l
it
at i
onoft hemi nedout
areas.
Drill
ingandBl ast ing
 
Al lmat er i
al hast obedr illedandbl ast edi nor dert of ragmenti tsuf ficient lysot hat
mi ningcant akepl ace.Thi si st hekeyst epi nal lthephasesofef ficientOpencastmi ning.
Fleet sofdr il
ls, capabl eofdr ill
ingv arioussi zedhol es, rangi ngf rom 150- 311mm i n
diamet er ,ar eusedonal lthedi fferentbenches.
Themai nexpl osi v eusedi sANFO, whi chi smanuf actur edonsi teusi ngat arbasedby -
product ,f rom t hePr ocessi ngCokeWor ks,ast hef uel addi tive.Wat err esi stant
expl osiv esar eused, mai nlyi nt hecoal benches, i
nwetcondi ti
ons.
Dragl i
neSt ri
ppi ng
TheDr agl i
nebenchi smai nt ainedataconst ant  hei ghtof26met resabov et het opoft he
coal seam, whi chcombi nedwi thanopt i
mum st ripwi dt hof42met res, allowsf ort he
mostef ficientDr agl inest rippi ngoper ation.
TheBucy rusEr ie1570W Dr agl i
nest ripst heov erbur dendi rect l
yabov et hecoal seam i n
whati sknownasasi mpl esi de- cast i
ngoper at ion.Thi sov er burdeni sdumpedi nt ot he
adjacentempt yst ripwher et hecoal haspr ev iousl ybeenmi nedout .Int hiswayt hecoal
i
sexposedasanewst r
ipr eadyf ormi ning.
About10. 5mi lli
onbcmsofov er burdenar est rippedpery ear .
Thr owBl ast ing
Nor mal bl ast ingpr act iceont heDr agl inebenchi sdef i
nedas“ buf fert ype”bl asting
wher et heov erbur deni sf ragment edbutst ay si n- situ.
TheOpencasti nt roducedt hemi ningmet hodknownasThr owbl astingwi thBul ldozer
Pushov eri n1998.Her et heov er bur denmat er ial i
sdel iber atelycastbyexpl osiveener gy
i
nt ot headj acentempt yst rip, bef orebei ngpushedandl ev el edbygi antCat erpil
larD11
bulldozer .
Thismeanst hatt hedr agl inehast omov efarl essmat er ial inor dert oexposet hesame
amountofcoal ,whi chul t
imat elyr esul tsini ncr easedpr oduct ivit
yandl owermi ning
cost s.
Thiswi llal soassi stast heOpencastMi negr adual lymov es, aspl anned, int othedeeper
areasofov erbur deni nt heConcessi onar ea.
CoalMi ni ng
Thecoal seam i sexposedasasi ngl ebenchr angi ngi ndept hfrom 7- 12met r
es.Thi sis
splitandmi nedast wosepar atebenchescompr isi ngt heHPS( HwangePowerSt ation
Coal )andHCC( HwangeCoki ngCoal )
, Thedi st i
nct ionbet weent het wot y pesofcoal i
s
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cs

mai nlybasedonashqual i
tyanal
yses.
Accesst othecoalfacesismaintainedbyr ampst hr
oughthespoi
ldumps.Coalis
l
oadedbyBucy rusEri
eRopeShov elint
oCat erpil
lar91tonnesbot
tom dumpcoal
haulersandt r
ansport
edtot hecentrali
zedPr i
mar yTip,
wher et
hecoalisdumpedint
o
specificbi
nsdependantupont het y
peofcoal beingmined.
At otalof4.8-
5mill
iontonesofrawcoal i
smi nedpery earcompri
singof2.4mil
l
ion
tonesofHPScoal ,
thebalancebeingHCCcoal .

Benchcontrolandqual i
tycontrol
I
npitsampling]
 Thedr agli
necl earsasmuchov erburdenaspossiblewithoutdi
ggingupt hecoal
atthisstaget hequal i
tycontr
oll
ershoul dbesupervisi
ngthecleani
ngont opof
coal.
 Thedozert hendoest hef i
nalcl
eaningont hetopofcoal .
 Wagondr il
ltakentodr i
llsampleandt estholest
hisshallbecarri
edoutonev ery
halfpegf orallthecuts.Thesampl esar etakent
ot helab(samplestakenevery
0.5m whiledr i
ll
ing).Thelabwillt
ellushowmanymet ersofpowercoal and
cokingcoal wehav e.

CoalTr anspor tat i

on
Breaker sini
t i
all
ycr ushal lthecoal to- 150mm si z
edmat er i
albeforef eedingt hetwo
gradesofcoal ont osepar ateconv eyor s.
TheHCCcoal ist henscr eenedt oremov et he–6mm si zer angepr oduct, whichi s
divertedasabl endf eedtot heHPScoal ,bef or
ebeingst ockpi l
edinel evatedconcr et
e
bunker s.TheHPScoal isf urthercr ushedt oa–35mm si zedpr oductbef oreal sobeing
stockpiledint hebunker s
Coal isrecov eredf rom thebaseoft hebunker sbyapl oughi ngact i
onwhi chremov es
horizontalslices, thusbl endi ngt her awcoal pr
oduct,whi chi st
hent r
anspor tedby
over l
andconv ey ort oeithert heHwangePowerSt at
ionort heProcessi ngPl ant .
Rehabi li
tati
on
Thef inalstageofopencastmi ningi nvolv est herehabili
tationofmi nedoutar eas.The
suppl ement aryst rippingov erburdeni sl ev eledoverthedr agli
nespoi lheapsby
bulldozerstocr eat eacont our edf i
nal prof il
e.
Att hi
sst age, t
hel andi sconsi deredr eadyf orthef i
nalre-v eget
ationaspect soft hemine
reclamat i
onpr ocess.

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CoalPr ocessi ng
Coal from OpencastandUnder gr oundmi nesi sreceivedatNo. 2Pr ocessi ngPl antonto
ther awcoal stockpi le.Al ternat ivelycoal from t heOpencastcanal sober ecei ved
direct lyi ntot hepl ant .Coal fedi nt othepl antpassest hroughapr imar ycr usherwhi ch
reducest her awcoal pr oductt o- 150mm bef orescreening.
Twoset sofscr eens, thedr yandwetscr eens, producedr yandwashedgr adesf orsal
e.
Var i
ousgr adesnamel y : Rounds, Lar geCobbl es,Smal lCobbl es,Nut s, Peas,
Nut /Pea/ Duf far epr oducedf orsal ef rom t hesescr eens.Anyexcessl argeandsmal l
cobbl ef r
act ionsar ecr ushedi nt hesecondar yandt erti
arycr ushersi nacl osedci r
cuit
syst em wi tht hewetscr eens.
Handpi ckingofwast emat er i
al remov esl ar gelumpsofshal efrom t her oundsandl arge
cobbl ef r
act ions.
Anycoal notl oadedoutf rom t hescr eensi nt hesizer angef rom +0. 5mm t o- 50mm
goest ot her awcoki ngcoal stockpi lef orwashi ngint hecoki ngcoal plant.
Thecoki ngcoal plantconsi stsofNor waltbat hwasherand  densemedi um cy clones.
Thef eedt ot hesewashi nguni tsi sscr eenedat30mm meshsi zeandde- sli
medat0. 5
mm wi tht hel ar ge+30mm si zemat erialbei ngwashedi nt heNor wal tbat hwasher sand
smal ler- 30t o+0. 5mm si zedpr oducti nt hedensemedi acy clones.
Ami xt ur eoff inel ygr oundmagnet it
eandwat erisusedast hewashi ngmedi um.I nthe
Nor wal tbat hwashert hecoal fl
oat si nt hemedi um, whilsttheheav iershal esi nkst othe
bot t
om oft hev essel andi sr emov edbyawast ebucketel evatorsy stem.Bot hwast e
andcl eancoal ar ewashedondr ainandr insescr eenst or ecov erthemedi um f or
recy cling.Thewast ei st hendi schar gedont ot hewast edumpsandt hewashedcoal i
s
conv ey edt ot hecl eancoki ng coal stockpi le.
The- 30mm t o+0. 5mm si zecoal toget herwi t
hthemedi um, i
spumpedt ot hehi gh
grav itydensemedi um cy cloneswher et hef loatsandsi nksf ractionsar esepar ated.
Bot hf r act i
onsar edr ai nedandr i
nsedt or ecov erthemedi um.
Thesi nksf ract ionsi sdi scar dedt ot hewast edump, whilstthef l
oat sf ract i
onmaybe
collect edascl eancoki ngcoal .
Somer awcoki ngcoal isal sowashedi nt heBaum Ji gs,whi chusewat erandi nducedai r
pulsat ionst opr oducecl eancoki ngcoal .

HwangePowerCoalandHwangeCoki ngCoalqual
it
ycont r
ol
 Checkwi ththepl antoperat
orontheHPScoal ashlevel
sonthecoalbei
ngfed
i
ntothebunker s.
 Ifashlevelsfalloutsi
dethe20-30%specstheplantoperat
ort
oinfor
mt he
pr
oducti
onf oreman.
 Investi
gateandt akecorrecti
veacti
onwhendiffer
encesoccur
.
HPCandHCCspeci f
ications
HPC HCC

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cs

Ash 25% <=15%

Vol
ati
lemat
ter 25% 25%
Sul
phur 3,
5%
Cal
ori
fi
cval
ue 24,
75MJ/
Kg 30MJ/
Kg

CokeManuf acture
Tocapi tal
izeont heexcell
entcokingpr operti
esofHwangecoal ,t
heCol l
ieryhasbeen
makingcokesi nce1913.Thet echnologyusedf orcokemaki nghasgener al
lyfoll
owed
worldwidet r
ends, st
art
ingwithbeehi veov ens,foll
owedbyt heCopperr ecuperativ
e
ovens,leadingupt othemoder nOSCt winflueunder j
ettypeovens,ori
ginall
y
constructedin1971andsubsequent l
yrebuilti
n1987.Thecur r
entcokebat terycapacit
y
i
s18100t onnespermont h.
Themoder ncokeov enshav eanassoci atedby -pr
oductsplantwhichcleanst hecoke
ovengasoft ar,ammoni a,
benzol andnapht halene.Cleanedcokeov engaspr ovidesthe
fuelforthecokebat ter
yaswel lasf orsteam raisi
ngrequirementsforthepl ant.

GasPl ant
TheHwangecokeov engasusagepr ofi
l
ewas, upt o1995asf oll
ows:-
 Co keBat teryUnderf ir
ing50%
 Bo i
ler
s–St eam Rai sing25%
 F l
aredExcessGas35%
Wi t
hthecommi ssioni ngoft heZESAHwangePowerSt ationi n1983, thepossibili
tyof
routi
ngt heexcessf laredgast oZESAasamar ketabl
epr oductwasr ecognizedand
pursued.
OSCPr ocessingEngi neeringwer econtr
actedtodesign,bui l
dandcommi ssi
onagas
planttopipeexcesscokeov engasf r
om thecokeov ensdi rect l
ytothePowerSt ati
on.
Thisturnkeypr ojectwascommi ssi
onedinNov ember1995, savingZimbabwemi l
l
ions
ofdollarsinforeigncur rencysincet hisgasisav i
ablesubst itutefordieselfuelwhich
thePowerSt ati
onhadbeenusi ngf orboilerst
artupsandf l
amest abili
zati
on.Cur r
ent
annual gasrequi rement sar e +/-30000kNm3andar eproj ect edtoincreaseasot her
boil
ersar econv ertedt out il
i
zecokeov engas.
 

 
Services
Processi
ng
coalfrom OpencastandUndergroundminesisrecei
vedatNo.2Processi
ngPlantonto
therawcoal st
ockpil
e.Alter
nat
ivel
ycoalfr
om theOpencastcanal
sober ecei
ved
dir
ectlyi
ntotheplant.Coalf
edintothepl
antpassesthroughapr
imarycrusherwhich

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reducest her awcoal pr oductt o150mm bef or escr eening.

Twoset sofscr eens, thedr yandwetscr eens, producedr yandwashedgr adesf orsale.
Variousgr adesnamel y: Rounds, Lar geCobbl es, Smal lCobbl es, Nuts, Peas,
Nut/ Pea/ Duf far epr oducedf orsal ef rom t hesescr eens.Anyexcessl ar geandsmal l
cobbl ef r act i
onsar ecr ushedi nt hesecondar yandt erti
arycr usher si nacl osedci rcuit
system wi t hthewetscr eens.
Handpi cki ngofwast emat er i
al remov esl ar gel umpsofshal ef rom t her oundsandl arge
cobbl ef r act i
ons.
Anycoal notl oadedoutf rom t hescr eensi nt hesi zer angef rom +0. 5mm t o- 50mm
goest ot her awcoki ngcoal stockpi lef orwashi ngi nt hecoki ngcoal plant .
Thecoki ngcoal plantconsi stsofNor wal tbat hwasherand  densemedi um cy clones.
Thef eedt ot hesewashi nguni tsi sscr eenedat30mm meshsi zeandde- sl i
medat0. 5
mm wi tht hel arge+30mm si zemat er ialbei ngwashedi nt heNor wal tbat hwasher sand
smal ler- 30t o+0. 5mm si zedpr oducti nt hedensemedi acy cl ones.
Ami xtur eoff inelygr oundmagnet i
teandwat erisusedast hewashi ngmedi um.I nt he
Nor wal tbat hwashert hecoal floatsi nt hemedi um, whilsttheheav i
ershal esi nkst othe
bottom oft hev essel andi sr emov edbyawast ebucketel evat orsy stem.Bot hwast e
andcl eancoal arewashedondr ainandr insescr eenst or ecov erthemedi um f or
recycl i
ng.Thewast ei st hendi schar gedont ot hewast edumpsandt hewashedcoal i
s
conv ey edt ot hecl eancoki ng coal stockpi le.
The- 30mm t o+0. 5mm si zecoal toget herwi tht hemedi um, ispumpedt ot hehi gh
gravitydensemedi um cy cloneswher et hef loat sandsi nksf ract ionsar esepar ated.
Bothf ract ionsar edr ainedandr insedt or ecov erthemedi um.
Thesi nksf r
act i
onsi sdi scar dedt ot hewast edump, whilstthef l
oatsf ract ionmaybe
coll
ect edascl eancoki ngcoal .
Somer awcoki ngcoal isal sowashedi nt heBaum Ji gs,whi chusewat erandi nducedai r
pulsat ionst opr oducecl eancoki ngcoal .
CokeManuf acture
Tocapi talizeont heexcel lentcoki ngpr oper ti
esofHwangecoal ,theCol lieryhasbeen
maki ngcokesi nce1913.Thet echnol ogyusedf orcokemaki nghasgener allyfollowed
wor l
dwi det rends, startingwi thbeehi veov ens, followedbyt heCopperr ecuper at i
v e
ovens, leadi ngupt ot hemoder nOSCt wi nf lueunder j
etty peov ens, or i
gi nal l
y
const ruct edi n1971andsubsequent lyr ebui ltin1987.Thecur rentcokebat t
er ycapaci ty

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i
s18100t onnespermonth.
Themoderncokeov enshaveanassoci atedby -pr
oductspl
antwhi
chcleansthecoke
ovengasoftar,
ammoni a,benzolandnapht halene.Cl
eanedcokeovengasprovidest
he
fuel
fort
hecokebatteryaswel l
asf orsteam raisi
ngrequi
rement
sfortheplant
 

UsesofCoal

Accesstomodernener
gyser v
icesnotonlycont
ri
butestoeconomicgr
owthand
householdi
ncomesbutalsototheimprovedqual
ityofl
if
ethatcomeswit
hbetter
educati
onandhealt
hserv
ices.All
sourcesofenergywil
lbeneededtomeetf
uture
energydemand,i
ncl
udi
ngcoal.

Coalhasmanyi mportantuseswor l
dwide.Themostsi gni
fi
cantusesar einelect
ri
city
generati
on,st
eel pr
oduction,cementmanuf act ur
ingandasal i
quidfuel.Around5.9
bi
lli
ontonnesofhar dcoal wereusedwor ldwidelastyearand909mi ll
iontonnesof
browncoal.Since2000, globalcoalconsumpt i
onhasgr ownfasterthananyot herfuel
.
Thef i
velar
gestcoal users-China,USA, I
ndia,JapanandSouthAf ri
ca-accountf or82%
oftotalgl
obalcoaluse.

Di
ff
erentt
ypesofcoalhavediff
erentuses.St
eam coal-al
soknownasther
mal coal-i
s
mainl
yusedinpowergenerati
on.Cokingcoal-al
soknownasmet al
l
urgi
calcoal-i
s
mainl
yusedinsteel
producti
on.

Thebiggestmar ketforcoali
sAsia,whi chcurrentl
yaccount sf orover65%ofgl obal
coalconsumpt i
on;althoughChi
naisr esponsibleforasi gnif
icantproport
ionoft hi
s.
Manycount ri
esdonothav enat
uralener gyresourcessuf f
ici
entt ocovert
hei rener
gy
needs,andthereforeneedtoimportener gytohel pmeett heirrequir
ement s.Japan,
ChineseTaipeiandKor ea,f
orexample, importsignif
icantquant i
ti
esofsteam coal for
el
ectri
cit
ygenerationandcokingcoal forsteelproduction.

Otherimpor tantuser sofcoal incl

udeal umi narefineries,papermanufacturers, andt he
chemi calandphar maceuticalindustr
ies.Sev eralchemi calpr
oductscanbepr oduced
fr
om t heby -
pr oductsofcoal .Refi
nedcoal tarisusedi nthemanuf act
ureofchemi cals,
suchascr eosoteoi l
,naphthalene,phenol ,andbenzene.Ammoni agasr ecover edf rom
cokeov ensi susedt omanuf actureammoni asalt
s, nitr
icacidandagricul
tural ferti
li
sers.
Thousandsofdi ff
erentproduct shavecoal orcoal by-productsascomponent s: soap,
aspir
ins,solvent s,dyes,pl
ast i
csandf i
br es,suchasr ayonandny lon.Coalisal soan
essentiali
ngr edientintheproduct i
onofspeci ali
stpr oducts:

 Act
ivat
edcar
bon-usedi
nfi
l
ter
sforwat
erandai
rpur
if
icat
ionandi
nki
dney
di
aly
sismachi
nes.
 Car
bonf
ibr
e-anext
remel
yst
rongbutl
i
ghtwei
ghtr
einf
orcementmat
eri
alused

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i
nconst ruction,mountai
nbikesandt enni
sracket
s.
 Sil
iconmet al-usedtoproducesil
i
conesandsi l
anes,whi
charei
nturnusedt
o
makel ubricants,wat
errepell
ent
s,resins,
cosmeti
cs,hai
rshampoosand
toothpastes.

Uni
t8:Cust
om Smel
ti
ng
Concent rategr adeandr ecovery,usedsimultaneously, ar
et hemostwi delyaccepted
measur es
ofassessi ngmet al
lurgi
cal(noteconomi c)performance.Howev er,
therei saproblem i
n
quant i
tat i
vely
assessi ngt het echni calperf
ormanceofaconcent rati
onpr ocesswhenev ertheresult
s
oftwo
similartestr unsar ecompar ed.Ifbot ht
hegr adeandr ecoveryaregreaterforonecase
thant he
other,thent hechoi ceofprocessi ssimple,butiftheresultsofonet estshowahi gher
gradebuta
l
owerr ecov er ythant heother,thenthechoicei snol ongerobv i
ous.Ther ehavebeen
manyat tempt s
tocombi ner ecov eryandconcent rategr
adei ntoasi ngleindexdefi
ningt he
met all
ur gical eff
iciencyof
thesepar ation.Thesehav ebeenr evi
ewedbySchul z(1970) ,whoproposedt he
foll
owi ngdef ini
tion:

Supposethefeedmater
ial
,assayingf%met
al,separat
esi
ntoaconcentr
ateassay
ingc%
met al
,
andat ai
l
ingassayi
ngt%metal,andthatCi
sthef r
acti
onoft
hetot
alfeedweightt
hat
report
stothe
concentr
ate,
then:

i
.e.recoveryofval
uabl
emineralt
otheconcentr
ateisequaltometalrecover
y,assuming
thatallt
he
valuabl
emet ali
scontai
nedi
nt hesamemi ner
al.Theganguecontentoftheconcentr
ate
=100−( 100c/m)%,wher
em isthepercent
agemet alcont
entoft
hev aluabl
emineral
,

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Exampl e1.
1
At i
nconcent r
atortr
eatsafeedcontaini
ng1%t i
n,andt
hreepossi
blecombi
nati
onsof
concentrat
e
gradeandr ecoveryare:
Highgrade 63%t i
nat62%r ecov
ery
Medium grade 42%ti
nat72%r ecover
y
Lowgr ade 21%t i
nat78%r ecov
ery
Determinewhi chofthesecombinati
onsofgradeandrecover
yproducet
hehighest
separati
onef f
ici
ency.

Soluti
on
Assumi ngthatt
het i
nistotal
l
ycont ainedintheminer
alcassit
eri
te(
SnO2)
,which,when
pure,
contai
ns78. 6%ti
n,andsincemi neralrecover
y(Equat
ion1.2)i
s100×C×concent
rate
grade/feed
grade,fort
hehigh-gradeconcentrate:

Therefore,
thehighestsepar
ati
oneff
ici
encyi
sachievedbyt
heproducti
onofalow-
grade
(21%t i
n)concentr
ateathigh(78%)r
ecover
y.Al
thoughthev
alueofseparat
ion
effi
ciencycan

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neVal
uat
ionandEconomi
cs

beusefuli
ncomparingtheperformanceofdiff
erentoperat
ingcondi
ti
onsonselect
ivi
ty,
i
ttakesno
accountofeconomi
cf act
ors,and,aswil
lbecomeappar ent
, ahi
ghval
ueofseparat
ion
eff
ici
encydoesnotnecessari
l
yl eadtot
hemosteconomi cretur
n.

Sincet hepur poseofmi neral processingist oincreaset heeconomi cv al

ueoft heor e,
theimpor t
anceoft herecov ery-graderelationshi
pi sindet er
mi ningt hemosteconomi c
combi nationofr ecov er
yandgr adewhi chwi llpr
oducet hegr eat estfinancialret
urnper
tonneofor etreatedi nthepl ant.Thiswi l
ldependpr imar i
lyont hecur rentpriceoft he
valuablepr oduct,transport
at ioncost stot hesmel ter,refinery,orot herf urt
hertreatment
plant,andt hecostofsuchf urthertreatment ,thelatterbei ngv erydependentont he
gradeofconcent r
at esuppli
ed.Ahi ghgr adeconcent ratewi l
lincurl owersmel ti
ngcost s,
butt helowerr ecov erymeansl owerr eturnsoff i
nal product .Al owgr adeconcent rate
mayachi evegr eaterrecover yoft hevalues, butincurgr eatersmel ti
ngand
transpor t
ationcost sduet ot hei ncl
udedganguemi ner als.Alsoofi mpor tancear e
i
mpur i
tiesintheconcent r
atewhi chmaybepenal i
zedbyt hesmel t
er,althoughpr ecious
met alsmaypr oduceabonus.

Thenetretur
nfr
om t
hesmel
ter(
NSR)canbecal
cul
atedf
oranyr
ecov
ery
-gr
ade
combinat
ion
fr
om:

NSR=Pay mentforcontai
nedmet al−(
Smeltercharges+Tr
anspor tcosts)
Thisissummar i
sedinFigure1.10,
whichshowst hatthehighestvalueofNSRis
producedatan
opti
mum concentrategrade.I
tisessent
ial
thatthemi l
lachievesaconcentr
ategrade
whichisasclose

aspossibl
et ot
histar
getgr
ade.Al
thoughtheef f
ectofmov i
ngsl
ightl
yawayf r
om the
opti
mum may
onlybeoftheorderofafewpencepertonestreated,thi
scanamountt overylar
ge
fi
nanci
al
l
osses,part
icul
arl
yonhigh-
capaci
typl
antstreati
ngt housandsoftonnesperday.
Changesinmet al

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uat
ionandEconomi
cs

pri
ce,smelt
ert
erms, et
c.obviousl
yaffectt
heNSR–concent rat
egradecurve,andt
he
val
ueofthe
opti
mum concentr
ategrade.Forinst
ance,ifthemetalpr
icei
ncreases,
thenthe
opti
mum gradewil
l
belower,
all
owinghigherrecoveri
est
obeat t
ained(
Figur
e1.11).

Itisev i
dentthatt het ermsagr eedbet weent heconcent ratorandsmel terareof
par amounti mpor tancei ntheeconomi csofmi ningandmi ll
i
ngoper atons.Suchsmel
i ter
cont ract sareusual l
yf air
lycompl ex.Concent ratesar esoldundercont ractto“custom
smel ters”atpricesbasedonquot ationsonmet almar ketssuchast heLondonMet al
Exchange( LME) .Thesmel ter
, hav i
ngpr ocessedt heconcent rates, disposesoft he
fini
shedmet altot heconsumer s.Thepr opor t
ionoft he“ freemar ket”pr iceofthemet al
recei vedbyt hemi nei sdetermi nedbyt het ermsoft hecont ractnegot iatedbet ween
mi neandsmel ter,andt heset ermscanv ar
yconsi derably.Table1. 4summar i
sesa
typical low-gradesmel tercontractf orthepur chaseoft inconcent rates.Asi susual in
manycont racts,oneassayuni tisdeduct edf r
om t heconcent r
at eassayi nassessing
thev alueoft heconcent r
ates,andar seni cpresenti nt heconcent rateispenal ised.The
concent rateassayi sofpr imei mpor t
ancei ndet erminingt hev aluat i
on, andthev alueof
theassayi susual lyagr eedont her esultofi ndependentsampl ingandassay ing
per formedbyt hemi neandsmel ter.The

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assaysarecompar ed,
andifthedi
ff
erenceisnomor ethananagreedvalue,themean
ofthetwo
resul
tsmaybet akenastheagreedassay.I
nt hecaseofagreat
erdiff
erence,an
“umpire”sampl
eis
assayedatanindependentl
aborat
ory.Thi
sumpi reassaymaybeusedast heagr
eed
assay,orthemeanoft hi
sassayandthatofthepartywhichi
snearertotheumpire
assaymaybechosen.

Theuseofsmel tercontr
acts,andtheimport
anceoftheby -
productsandchanging
metalpr
ices,
canbeseenbybr i
efl
yexaminingtheeconomicsofprocessi
ngt wobasemet al
s–t in
andcopper–
whosefortuneshavefluct
uatedov ert
heyearsformarkedl
ydiffer
entreasons.

Economi csoft i
npr ocessing
Tinconstitut
esani nteresti
ngcasestudyinthevagar
iesofcommodit
ypricesandhow
theyi
mpact
onthemi neralindustryanditstechnol
ogi
es.Almostahalfofthewor
ld’
ssupplyoft
ini
n
themid-nineteenthcent ur
ywasmi nedinsouth-
westEngland,
butbytheendofthe

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neVal
uat
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cs

1870sBr i
tain’s
premi um posi ti
onwasl ost, witht heemer genceofMal aysiaast hel eadi ngpr oducerand
the
discov eryofr ichdeposi t
si nAust ralia.Byt heendoft hecent ury,onlyni nemi nesofany
consequencer emainedi nBr it
ain, wher e300hadf lourished30y earsear lier.From
alluv ial orsecondar ydeposi ts,princi pallyfrom Sout h-EastAsi a,comes80%ofmi nedt i
n.
Unl ikecopper , zi
ncandl ead, product ionoft inhasnotr i
sendr amat icallyov erthey ears
andhas
rarel yexceeded250, 000t /
y r.Ther eal priceoft inspentmostoft hef irst
hal foft het went iethcent uryi nar el ativelynar r
owbandbet weenUS$10andUS$15/ t
(1998$) , with
someexcur sions( Figur e1. 12; USGS, 2005) .Fr
om 1956i tspricewasr egul atedbya
ser iesof
i
nt er nat ional agreement sbet weenpr oducer sandconsumer sundert heauspi cesoft he
Inter nat ional
TinCounci l
(ITC) ,whi chmi r r
or edt hehi ghlysuccessf ul poli
cyofDeBeer si ncont r
oll
ing
the
gem di amondt rade.Pr i
cest abi l
itywassoughtt hroughsel l
ingf r
om t heI TC’ shuge
stockpi l
es
whent hepr icer oseandbuy ingi ntot hest ockpilewhent hepr i
cef el
l.
From t hemi d-1970s, howev er,thepr iceoft inwasdr ivenartifi
cial
lyhi gheratat i
meof
wor ldr ecessi on, expandi ngpr oduct ionandf al
li
ngconsumpt i
on, t
hel at terduemai nl
yt o
thei ncr easinguseofal umi nium, rathert hant i
n-pl
at edst eel,cans.ont ai ningov er70%
tin( i.e.ov er90%cassi teri
te)f rom al l
uv i
al ores,suchast hosewor kedi nSout h-East
Asi a.Suchconcent rat espr esentl ittlepr oblem i nsmel ti
ngandhencet reat mentchar ges
arer elat i
v el
yl ow.Pr oduct i
onofhi gh- gradeconcent ratesalsoi ncursr elat i
vel ylow
freightchar ges, whichi simpor tanti ft hesmel teri
sr emot e.

Fort heser easonsithasbeent raditi

onal inthepastf orhard-
rock,l
odet inconcentrators
topr oduce
high-gr adeconcent rates,
buthi ght inpr i
cesandt hedev elopmentofprof i
tablelow-
gradesmel ting
processeschangedt hepoli
cyofmanymi nestowar dstheproducti
onofl ower -
grade
concent rates.
Theadv antageoft hi
si st
hatt her ecov eryoftini
ntot heconcentrat
eisi ncreased,t
hus
i
ncr easi ng
smel terpay ments.Howev er,thet reatmentofl owgr adeconcentrat
espr oducesmuch
great erpr oblemsfort hesmel ter,andhencet hetreatmentchargesat“ l
ow- grade
smel ter s”ar enor
mal l
ymuchhi ghert hanthoseatt hehigh-gr
adesmel ters.Frei
ght
char gesar ealsocorrespondingl yhigher .
Supposet hatat i
nconcent r
atort reat safeedcont aining1%tin,andthatt hreepossible
combi nat i
ons
ofconcent rategr
adeandr ecov eryar e(asinExampl e1.1)
:
Highgr ade 63%t i
nat62%r ecovery
Medi um gr ade 42%t i
nat72%r ecovery
Lowgr ade 21%t i
nat78%r ecovery

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Assumingt
hattheconcent r
atesarefr
eeofarseni
c,andt hatt
hecostoft
ransportat
ion
tothesmel
teris£20/tofdryconcentr
ate,t
henthereturnoneachtonneoforetreat
ed
canbesimplycal
culated,
usingthelow-gr
adesmeltertermssetouti
nthecontractin
Table1.
4.

Forinstance, atagr adeof42%t i

nand72%r ecovery,theweightofconcentrat
e
producedf rom
1tofor eis17. 14kg( fr
om Exampl e1.1).Thesmel terpaymentf orti
ninthi
s
concent rateis
P×17. 14×( 42−1)/100.000wher eP=t inpr i
cein£/ t
Assumi ngat i
npr i
ceof£8500/ t,thenthenetsmel terpay mentis£59.73.
Thesmel tertreatmentchar gei
s£385×concent ratewei ght=£6.59,andthe
transportationcostis
£0.34.Thenetsmel terret
urnforthepr ocessingof1tofconcent r
atorf
eedisthus
£59.73−( 6.59+0.34)=£52.80.Ther ef
ore,althought heor econtai
ns,atfr
eemar ketpri
ce,
£85wor thoft i
npert onne,theminer eali
sesonl y62%oft heorev al
ueinpayment s
received.

Productionofal ower -gr

adeconcent rateincurshighersmel terandf rei
ghtchar ges,but
i
ncreases
thepaymentf orcont ai
nedmet al,duet othehigherr ecov ery.Similarcal cul
ationsshow
thatatagr adeof21%t i
nand78%r ecov ery,
thepay mentf ort i
nisi ncreasedt o£63.14,
butthet otaldeductionsalsoincreaset o£15.04, produci nganetsmel terreturnof
£48.10/tofor etreated.
Clearl
y,lower i
ngt heconcentrategr adet o21%t in,inor dertoi ncreaser ecov ery,
has
i
ncreased
thesepar ati
ngef fi
ciency(Example1. 1),buthasadv erselyaf f
ectedt heeconomi creturn
from t
he
smelter,theincreasedchar gesbei ngmor eimpor tantt hanthei ncreasei nrevenuefrom
themet al.
Incr
easingt hegr adet o63%t i
ncanobv iousl
yreducechar gesev enf urther,parti
cul
arlyi
f
the
concentratecanbesentt oahi gher -gradesmel t
erwi t
hl owert reatmentchar ges.

Assumi ngat reatmentchar geof£50/ tofconcent r

ate,andidenticalpayment sand
frei
ghtchar ges,
thepay mentf ormet alinsuchaconcent ratewoul dbeonl y£51. 86,butthechar gesare
reducedt o
£0.69/ t.TheNSRpert onneoforet r
eatedist hus£51. 17.Inthiscase, t
herefore,t
he
returnishi ghest
from thel ow-gradesmel t
ertreat
ingamedi umgr adeconcent rat
e.Thi ssit
uationmay
change,
howev er,i
fthemet alpri
cechangesmar kedly.Ifthetinpri
cef all
sandt het er
msoft he
smel ter
contract sremai nthesame, t
hent heminepr ofi
t swillsuf
ferduet other eductionin
pay ment s.Rarely

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mbabweSchoolofMi
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ionalDi
plomaModul
e Page97
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neVal
uat
ionandEconomi
cs

doesasmel t
ersharether
isksofchangi
ngmet al
pri
ce,
asitperfor
msaservicerol
e,
changesi n
smeltertermsbeingmademor eont hebasisofchangi
ngsmel t
ercost
srat
herthan
metal pr
ice.The
minedoes, however,r
eapthebenefi
tsofincreasi
ngmetal
price.

Atat inpri
ceof£6500/ t
,theNSRpert oneofor ef r
om thel ow- gradesmel t
ertreati
ngthe
42%t inconcent r
ateis£38. 75,whi
lether eturnf rom thehi gh-gr adesmel ter,t
reati
nga
63%Sn
concent r
ate,is£38. 96.Althoughthisisadi fferenceofonl y21/ tofor e,t
oasmal l500t
−1
d
ti
nconcent ratort hi
schangei npol
icyfrom r elati
v el
ylow-t ohi gh-gradeconcent r
ate,
together
withthesubsequentchangei nconcentratemar ket ,
woul dexpectt oi ncr
easet he
revenueby£0. 21×500×365=£38325perannum.Theconcent rat ormanagementmust
alway sbepr eparedt ochangei tspoli
cies,bot hmet all
urgi
cal andmar keti
ng,inthisway
i
fmaxi mum r eturnsaretobemade, althoughpr oduct i
onofar eli
abl egrade–recovery
rel
ationshipisof tendiff
icultduetothecompl exityofoper ati
onofl odetin
concent r
atorsandv ari
ationsinfeedchar acter i
stics.

Iti
s,ofcour se,necessarytodeductt hecostsofmi ningandpr ocessingf rom theNSRi n
order
todeducet hepr ofi
tachievedbyt hemi ne.Someoft hesecost swi l
lbei ndir
ect,suchas
salari
es,
admi nistrat
ion,researchanddev elopment ,medical andsaf et
y ,aswel lasdi r
ectcosts,
suchasoper at
ingandmai ntenance,suppli
esandener gy.Thebr eakdownofmi l
li
ng
costsv ariesenor mouslyfrom mi netomi ne,dependi ngv erymuchont hesizeand
compl exityoftheoper ati
ons.Mi neswi thverylar
geor ereservest endtohav everyhigh
throughput s,andsoal thought hecapitaloutl
ayishi gher,theoper ati
ngandl abourcosts
tendt obemuchl owerthant hoseonsmal l
erplants, suchast hoset reatinglodet i
nores.
Miningcost salsov ar
yenor mousl y
,andar everymuchhi gherf orunder groundt hanfor
open-pi toperati
ons.

Ifminingandmi ll
ingcostsof£40and£8r especti
vel
ypertonneofor earetypi
calof
underground
tinoperati
ons,thenitcanbeseenthatatat inpri
ceof£8500t hemi ne,pr
oducinga
concent r
ate
of42%t i
n,whichissoldtoalow-
gradesmel t
er,makesapr ofi
tof£52.80−48=£4. 80/t
ofore,
whichatat hroughputof500td−1correspondst oagrossannual pr
ofitof£867000.Iti
s
alsoclear
thatiftheti
npr i
cefall
sto£6500/t
,themi neloses£48-38.96=£9/04foreverytonneof
oretreated.
Thebr eakdownofr evenueandcostsatat inpri
ceof£8500/ tissummar i
sedinFigur
e
1.13.
Themi nepr of
itpertonneoforetr
eatedcanbesummar i
sedas:

Zi
mbabweSchoolofMi
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ionalDi
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e Page98
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neVal
uat
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cs

Cont ainedv al
ueofor e−( cost s+losses)=£( 85−( 40+8+23. 80+8. 40))=4.80/t
Since1tofor epr oduces0. 0072toft ininconcent r
ates, andt hef reemar ketv al
ueof
this
cont ainedmet ali
s£61. 20, thet ot aleffecti
v ecostofpr oduci ng1toft ini
nconcent r
ates
i
s£( 61.20−4. 80)/0.0072=£7833.
Thei mpor tanceofmet al l
ossesi nt ail
ingsi sshowncl earlyinFi gure1.13.Wi thoreof
relativel
y
highcont ainedv alue, ther ecov eryi softenmor eimpor tantt hant hecostofpr omot i
ng
thatr ecov ery.
Hencer elativelyhigh- costuni tpr ocessescanbej ust i
fiedifsi gnif
icantimpr ovement sin
recov eryar e
possi ble,andef f
or tstoi mpr over ecoveriesshoul dalway sbemade.Fori nstance,
supposet heconcent rat or,mai nt ainingaconcent rategr adeof42%t in,i
mpr ovesthe
recov eryby1%t o73%wi thnochangei nact ual operatingcost s.TheNSRwi l
lbe
£53. 53/ tandaf t
erdeduct i
ngmi ningandmi ll
ing
cost s,thepr of i
trealisedbyt hemi neis£5. 53/ tofor e.Since1tofor enowpr oduces
0.0073tof
ti
n, hav i
ngacont ainedv alueof£62. 05, thecostofpr oduci ng1toft ininconcent rat
esis
thereby
reducedt o£( 62.05−5. 53) /0.0073=£7742.

Economi csofcopperpr ocessing

Atypical smel
tercontr
actforcopperconcent ratesi
ssummar isedinTabl
e1.5.Asi nthe
case
ofthet i
nexampl e,
theprincipl
esil
lustratedcanbeappl iedtocurr
entpri
cesandcost s.
Considerapor phyr
ycoppermi net
reatinganor econtaining0.
6%Cut oproducea
concentrate
−1
containi
ng25%Cu, at85%r ecover
y .Thisisaconcentrateproducti
onof20.4kgt of
oretreated.
Therefore,atacopperpriceof£980/ t:

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page99
 Mi
neVal
uat
ionandEconomi
cs

Assumi ngaf reightcostof£20/ tofconcent rat

e, thet otal deductionsar e£( 0.61+0.56
+0. 41)=£1. 58, andtheNSRpert onneofor etreat edist hus£( 4.80−1.58) =£3. 22.
Asmi ning,millingandot hercostsmustbededuct edf r
om t hisfigure,i
tisappar entt
hat
only
thosemi neswi thverylowoper at i
ngcost scanhav eanyhopeofpr ofi
tingf rom suchlow
-gradeoper ations.
Assumi ngat ypi call
argeopen- pitmi ningcostof£1. 25/tofor e,ami ll
ingcostof£2/ t
and
i
ndi rectcost sof£2/ t,themi newi lll
ose£2. 03f orev erytonneofor etreated.The
breakdownofcost s
andr evenuei ssummar i
sedi nFigure1. 15.Aseacht onneofor epr oduces0. 0051tof
copper
i
nconcent rates, withaf reemar ketv alueof£5.00, thet otaleffecti
vepr oduct ioncost
s
are£( 5.00+2. 03)/0.0051=£1378/ tofcopperi nconcent r
at es.Howev er ,
ift heor e
cont ainsappr eci ableby products,theef fecti
vepr oduct ioncost sar ereduced.Assumi ng
theconcent r
at econt ains
−1 −1
25gt ofgoldand70gt ofsi
lver,thent hepay mentf orgol d,ataLMEpr iceof
£230/ troyoz
(1t r
oyoz=31. 1035g) ,

Zi
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ionalDi
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e Page100
 Mi
neVal
uat
ionandEconomi
cs

Thenetsmel terr
eturnisthusincreasedt o£6.99/tofore,andtheminemakesapr ofit
of£1. 74/tofor etreat
ed.Theef fect
ivecostofpr oduci
ng1tofcopperi sthusreduced
to£(5. 00−1. 74)/
0.0051=£639.22.
By-product sar et
husext r
emel yimportantintheeconomi csofcopperproducti
on,
parti
cul arl
y
forver ylow-gradeoperations.Inthi
sexampl e,42%oft hemi ne’
srev
enuei sfr
om gold,
copper
contri
but ing56%.Thi scompar eswi t
ht hecontri
buti
onst orevenuer
eali
sedat
Bougai nv i
ll
eCopper
Ltd(Sassos, 1983).

Economi ceffi
ciency
Exampl e
Calculatet
heeconomi cef
f i
ciencyofati
nconcent
rator
,tr
eati
nganoregradi
ng1%t in
producing
aconcent r
ategrading42%tinat72%r ecov
ery
,underthecondi
ti
onsofthesmelter
contractshown
i
nTabl e1.4.Thecostoftransportat
iontot
hesmelteri
s£20/tofconcent
rat
e.Assume
atinpr i
ce
of£8500/ t
.

Solut
ion
Itwasshowni nthesectionont inprocessi
ngt hatthisconcent
ratewouldreal
izeanet
smelterret
urn
of£52.80.Assumi ngperfectmill
ing,100%recov eryoftheti
nwoul dbeachiev
ed,i
ntoa
concentrat
egrading78.6%t in(i
.e.purecassi
teri
t e)
.
Thewei ghtofconcentr
atepr oducedf r
om 1tonneoff eed=12.72kg.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page101
 Mi
neVal
uat
ionandEconomi
cs

Ther efore, netsmel terr eturn=£( 83.90–4. 90–0. 25)=£78. 75,

andeconomi cef fi
ci ency=100×52. 80/ 78.75=67. 0%.
Inrecenty ear s,at tempt shav ebeenmadet oopt imi zetheper formanceofsome
concent r atorsby
contr oll
ingpl antcondi t
ionst oachi evemaxi mum economi cefficiency .
Adi l
emmaof tenf aci ngt hemet al
lurgistonacompl exflotationci rcuitproduci ngmor e
thanone
concent r ateis: howmuchcont ami nati
onofoneconcent ratebyt hemi ner alt
hatshoul d
repor ttot he
otherconcent rat ecanbet olerated?Fori nst ance, onapl antpr oduci ngsepar at ecopper
andzi ncconcent rat es, copperi sal way spr esenti nthezi ncconcent rate,asi szi ncint he
copperconcent rate.Met alsmi splacedi ntot hewr ongconcent rat
ear erarelypai dforby
thespeci alistsmel ter, andar esomet i
mespenal ised.Ther ei s,therefore, anopt imum
“degr eeofcont ami nat i
on”t hatcanbet olerated.Themosti mpor tantr eagentcont r
ol l
ing
thi
sf act orisof tent hedepr essant ,whi chi nhibitsf l
otati
onoft hezi ncmi nerals.Increase
i
nt headdi tionoft hi sr eagentnotonl ypr oducesacl eanercopperconcent rat
ebutal so
reducescopperr ecov eryintot hisconcent rate,asi talsohasal esserdepr essingef fect
ont hecoppermi ner als.Thedepr essedcoppermi neralsar el i
kelyt orepor ttot hezinc
concent r ate,sot headdi t
ionr ateofdepr essantneedst obecar efull
ymoni toredand
contr oll
edt opr oduceanopt imum compr omi se.Thi sshoul doccurwhent heeconomi c
effi
ciencyi smaxi mi sed.

Exampl
e1.
3
Thefol
l
owi
ngassaydat
awascol
l
ect
edf
rom acopper
–zi
ncconcent
rat
or:

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page102
 Mi
neVal
uat
ionandEconomi
cs

Massf l
owmeasur ementshowedt hat2.6%oft hefeedwei
ghtr
epor
tedt
othecopper
concent r
at e,and3.5%tothezincconcentrate.
Calculatet heoveral
leconomiceffi
ciencyunderthefoll
owi
ngsi
mpli
fi
edsmel
tert
erms:
Copper :
Copperpr i
ce :£1000/t
Smel t
erpay ment :90%ofCucont ent
Smel t
ert reatmentcharge :£30/tofconcentrate
Transpor tcost :£20/tofconcentr
ate
Zinc:
Zincpr i
ce :£400/t
Smel t
erpay ment :85%ofzi nccontent
Smel t
ert reatmentcharge :£100/tofconcentrate
Transpor tcost :£20/tofconcentr
ate

Solut
ion
1.AssumingPer f
ectmill
ing
(a)Copper
Assumingt hatal
lthecopperi
scontainedinthemi
neral
chalcopyri
te,
thenmaxi
mum
coppergradeis34.6%Cu( pur
echalcopyri
te)
.
IfCisweightofcopperconcentr
ateper1000kgoffeed,thenfor100%recov
eryof
copperint
ot hi
sconcentrat
e:

Therefore,
NSRf orcopperconcentr
ate=£5.28/
tofore.
(b)Zinc
Assumi ngthatal
lthezinciscont
ainedintheminer
alsphal
eri
te,
maximum zi
ncgradeis
67.1%( pur
esphalerit
e).I
fZisweightofzi
ncconcentrat
eper1000kgoff
eed,thenfor
100%r ecoveryofzincint
othi
sconcentrat
e:

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page103
 Mi
neVal
uat
ionandEconomi
cs

Therefor
e,NSRf orzincconcentrate=£3.
12/tofore.
TotalNSRf orper fectmil
li
ng=£( 5.28+3.12)
=£8.40/t
.
2.Actualmill
ing
Simil
arcalculationsgive:
Netcoppersmel terretur
n =£4.
46/ tofor
e
Netzincsmel terreturn =£1. 71/ tofor
e
Totalnetsmel terreturn =£6.17/ t
Therefor
e,over alleconomiceff
iciency
=100×6.17/8.
40=73.
5%.

Uni
t9:Expl
orat
ionDr
il
li
ng
Zimbabwehasami neralendowmentt hatisunequal ledinval ueanddi versit
ybyany
simi l
arregioni nthewor l
d.Thegeol ogicalsetti
ngoft hesemi neral deposits,andthe
associ atedmi ningmet hodsareof tenuni que,asar etheexpl orationanddr il
l
ing
met hodsusedt oprospectexisti
ngandpot enti
alorebodies.Thesedeposi tsplace
Zimbabweasoneoft hefastestgrowi ngpr oducersofmi neral commodi t
ies.Formany
year sthemi ningindustryinZimbabwehasbeeni nt hetopthr eef or ei
gnexchange
earner s.Theest abl
ishmentofal argescal emi necost sanav erageof$2- 4billi
on,i
t
i
nv olvesahi ghdegr eeofr i
skandconsi der
ableleadtimesbet weeni nvest
mentand
i
nitialdividends.Exploratoryboreholest odef i
nethegeol ogical structureandgr ade
distri
but i
onr educether i
skandal lowconf i
dencel evelstobepl aceduponi nvestment
decisions.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page104
 Mi
neVal
uat
ionandEconomi
cs

Boreholeplan
Eachbor eholeisengineeredpri
ort odri
ll
ing.Topography,li
thology,str
ati
graphy,depth
anddeviationconst r
aintseff
ectthechoiceofequi pment,bor ehol
esizes,casingpoint
s
andinholet oolsnecessarytoconf i
dentl
ycompl etetheproject.Theneedf ordefl
ecti
ons
togainaddi ti
onalreefint
ersect
ionsandt her equi
redseparationofthesefrom the
motherholecanhav eamaj oreffectuponov eral
lcostsandcompl et
ionti
mes.

Dri
ll
ingprocedur
es
Thefoll
owingnotesar
eincludedt
oexpl
aint
ypi
cal
par
amet
ersandmet
hodsusedf
or
successf
ulproj
ectcomplet
ion

Est
abl
ishment

Themaj ori
tyoftheZimbabweangol dfi
eldsaresit
uatedi
nundulatingcount rysi
dewith
cooldrywintersandwar m wetsummer s.Si
tesar
egeneral
lyl
ocatedsot hatexcavat
ion
orbackfil
l
ingisrarel
ynecessarytoaccommodat etheri
g.Waterfordril
l
ingandt he
crew’sconsumpt i
onisdrawnf r
om well
sdr i
l
ledonsit
e.Thesehav etopr ovidesuff
ici
ent
waterfordri
ll
ingascircul
ati
onlossesarecommonandmustbepr otectedf rom
contaminati
onbydr i
ll
ingfl
uids.

Excav
ationsforri
gfoundati
ons,f
lui
dpit
sanddrai
nage;accessr
oads,f
enci
ngand
el
ectr
icali
nstal
lat
ionsareunder
takenbysub-
cont
ract
orstothedri
l
li
ngcompany’
s
speci
fi
cations

Dr
il
li
ngMet
hods

Borehol ediamet ersandcasi ngprogr ammesv ar

ywi t
hst r
at igraphy,anti
cipatedinhole
conditionsandl ocali
ty.Typicall
ypilotbor eholeswi l
lbedrilledusi ngpercussi onri
gst o
penet r
atet heweat heredzoneandbar r
enov erburden.per cussi ondril
li
ngi scheaperand
quickert handi amonddr i
l
ling.Thedi sadvantagesofper cussi onar ethatthecost stothe
cont r
actorr apidlyescalatewhenwat erbear ingfissuresar eintersected.Yieldsofov er
40000l /hrarenotuncommon.Per cussi onbor eholestendt odev i
atemor et handiamond
dri
ll
edbor ehole;reducingpenet rati
onr atestocont roldeviat i
onsoonbecomes
unat t
ractiveasdai lyrevenuedecr eases.I nsuchcasest heper cussionmet hodi s
replacedbydi amonddr i
ll
ing.

Major(tr
ue)andMinor(apparent
)Di
ps
Planes:
aplanemayber egardedasaper
fect
lyev
ensur
face,
whi
chmaybei
ncl
i
nedt
o
thehori
zontal
atanyangle.

A B

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page105
 Mi
neVal
uat
ionandEconomi
cs

C˚

D˚
D C

I
nt hef i
gureABCDr epresent sani nclinedplaneandEFCDr epresentsahor izontalpl
ane.
AandBar eont hesameel evati
ont hereforeABi st hestri
keofthepl ane.Supposean
i
ndef i
nitenumberofangl eswer emeasur edf rom thedirecti
onBDappr oachingthe
dir
ectionBC.I tisnotedthatBFi sconst antforallofthem andast hedistanceFD
decreases, sotheangledwoul di ncr easeunt ili
treachedamaxi mum, t
hatwoul dbe
whenFD=FCi .
e.whenFCi satrightangl est oFEorBCatr i
ghtangl estothest r
ikeof
theplane.Thi sangleisknownast hedi poft heplane,alsotruedip;maj ordipis
representedbyD˚i ncont radist
inct i
ont ot hemi nordip(d)ofwhicht hereisani nfi
nit
e
numbermeasur edbetweendi r
ectionofmaj ordipandst ri
ke.

Toprov
et hel
aunderf
ormulawhi
chst
atest
hant
anmi
nordi
p=t
anmaj
ordi
pxcosi
ne
angl
ebetweentheminorandmaj
ordi
ps.

Tand=t
anDcosC

LetD˚bet
hemaj
ordi
p=angl
eBCF=angl
eADE

Letd˚bet
heangl
eofmi
nordi
pint
hedi
rect
ionDF

Ther
efor
eangl
eBDF=d˚

LetC˚betheangl
ebetweendi
psont
hehor
izont
alpl
ane(
i.
e.t
hemeasur
edangl
eor
di
ffer
enceinbear
ings)

Ther
efor
eDFC=C˚

I
ntr
iangl
eBCFt
anD˚=BF/
CF

I
ntr
iangl
eDBFt
and˚=BF/
DF

I
ntr
iangl
eDFCcosC˚=CF/
DF

Ther
efor
etand˚=BF/
DF=BF/
CFxCF/
DF=t
anD˚
cosC˚

Not
ethi
sfor
mul
abecomest
and=t
anDsi
nH

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page106
 Mi
neVal
uat
ionandEconomi
cs

Wher
eHi
stheangl
ebet
weenmi
nordi
pandt
hest
ri
ke.

C+H=90˚

.
’
.C=90˚-H

CosC=Si
nH

I
. Whent
heboreisv
ert
ical
,i
tpresent
sli
ttl
eprobl
em, t
hetruewi
dthTwi
sequal
to
t
hebor
ehol
elengt
hcosinet
ruedipofreef(
seediagram I
)

Tw =BHcosD˚

I
I. Whent
hebor
eholei
sincl
i
nedi
naknowndi
rect
iont
hrought
her
eefdi
ppi
ngatD˚
(
seedi
agr
am I
I)

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page107
 Mi
neVal
uat
ionandEconomi
cs

ABCDi
sH.
W oft
her
eeforl
ode

EFGHi
sF.
W oft
her
eef

HGKLi
sit
spr
oject
iononpl
an

BHi
sthel
engt
hofbor
ehol
eint
ersect
ingt
her
eef

HKi
sit
spr
oject
iononpl
an

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page108
 Mi
neVal
uat
ionandEconomi
cs

Let D˚bet
het
ruedi
poft
her
eef

d˚bet
hemi
nordi
pint
hedi
rect
ionoft
hebor
ehol
e

C˚thehori
zont
alangl
ebet
weent
hismi
nordi
pdi
rect
ionandt
hemaj
ordi
p
di
recti
on

x˚t
hedef
lect
ionoft
hebor
ehol
efr
om t
hev
ert
ical

t
hepr
obl
em r
esol
vesi
tsel
finsol
vi
ngt
het
ri
angl
eBFH

Tw =BHcos(
d+x)
secdcosD

I
II
. Whenthedef
lect
ioni
sinadi
rect
ionagai
nstt
hedi
poft
her
eeft
hef
ormul
a
becomes

Tw =BHcos(
d-x)
secdcosD

Oral
ter
nat
ivel
y

Tr
ueWi
dth

Tw =BHcos(
d+ 
/-x)
CosD
cosd˚

wher
ex˚=dev
iat
ionf
rom v
ert
ical

Tw=t
ruewi
dth

(
d+x)=di
pindi
rect
ionoft
her
eefdi
p

(
d-x)=di
pagai
nstdi
rect
ionofr
eefdi
p

Exampl
e

i
. Stat
ethefor
mulaforobt
aini
ngminordi
pd˚gi
vent
hemaj
ordi
pD˚andt
he
hori
zont
alangl
ebetweenthem,
C˚.

i
i
. Thecosi
nef
ormul
atof
indt
het
ruewi
dthTw,
whenadef
lect
ionhast
akenpl
ace
byx˚
.

Threever
ti
calbor
eholesareputdowntoi
nter
sectareefknownt
obedi
ppi
ngat35˚ona
beari
ngof140˚(
zeroS).t
heinter
sect
edbor
eholesl
engthsare

Zi
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ionalDi
plomaModul
e Page109
 Mi
neVal
uat
ionandEconomi
cs

Number1 67cm

Number2 75cm

Number3 59cm

Av er
agi
ng6,70g/t
;7,
8g/t;and8.
2g/trespecti
vel
y.Onsurvey
ingthehol
esitwasfound
thatdef
lect
ionoftheholeshadtakenplaceineachcase.Number1borehol
edippedat
82˚onabear i
ng165˚,Number2adef lect
ionof8˚onabearing335˚andNumber3
dippedat80˚onabearingof310˚

Calcul
atet
hetruewi
dthoft
hei
nter
sect
ionsandcombi
net
hem t
ofi
ndt
heav
erage
widthandval
ue.

Sol
uti
on

i
. Tand˚=t
anD˚
cosC˚

i
i
. Tw =BHcos(
d+ 
/-x)
CosD
cosd˚

wher
ex˚=dev
iat
ionf
rom v
ert
ical

Tw=t
ruewi
dth

(
d+x)=di
pindi
rect
ionoft
her
eefdi
p

(
d-x)=di
pagai
nstdi
rect
ionofr
eefdi
p

Tand1=t
an35cos25

d1=32.
40˚

Tand2=t
an35cos15

d2=34.
07˚

Tand3=t
an35cos10

d3=34.
59˚

BH1 =67cos(
32.
40+8)sec32.
40cos35

=49.
50cm

Zi
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ionalDi
plomaModul
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 Mi
neVal
uat
ionandEconomi
cs

BH2 =75cos(
34.
07-8)sec34.
07cos35

=66.
59cm

BH3 =59cos(
34.
59-
10)sec34.
59cos35

=53.
40cm

49.
50cm @6.
7g/
t =231.
7

66.
59cm @7.
8g/
t =519.
5

53.
40cm @8.
2g/
t =437.
9

169.
5cm @7.
6g/
t =1289.
1

Av
erage=56cm@ 7.
6g/
t

Exampl
e

Twov ert
icalboreholesandonehor izontal
onear edri
ll
edfr
om ani
ndergroundchamber
tointersectaf ootwallr
eefassumedt obedippingat45˚onabear
ing300˚(zerosout
h).
Ther eefintersecti
onlengthsandv aluesareli
stedbel
ow.Combinetheindi
vidualt
rue
widthsandobt ainanav er
agevalue.

i
. Ver
ti
cal
,recov
eredl
engt
h120cm.hol
edi
ppedat82˚onabear
ing128˚
,val
ue
10.
80g/
t

i
i
. Hor
izont
alhol
e,r
ecov
eredl
engt
h103cm,
hor
izont
albear
ing110˚
,val
ue7.
80g/
t

i
i
i. Ver
ti
cal
,recov
eredl
engt
h87cm.def
lect
ion10˚onabear
ing280˚v
alue11.
00g/
t

Sol
uti
on

Tand1=t
an45cos8

d1=44.
70˚

Tand2=t
an45cos10

d2=44.
60˚

Tand3=t
an45cos20

d3=43.
20˚

Zi
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nes–Nat
ionalDi
plomaModul
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 Mi
neVal
uat
ionandEconomi
cs

BH1 =120cos(
44.
70-8)sec44.
70cos45

=95.
71cm

BH2 =103cos(
44.
60-90)sec44.
60cos45

=71.
82cm

BH3 =87cos(
43.
20+10)sec43.
20cos45

=50.
55cm

95.
71cm @10.
8g/
t=1033.
7

71.
82cm @7.
8g/
t =560.
2

50.
55cm @11.
0g/
t=556.
1

218.
1cm @9.
86g/
t=2150.
0

Av
erage=73cm@ 9.
86g/
t

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nes–Nat
ionalDi
plomaModul
e Page112
 Mi
neVal
uat
ionandEconomi
cs

Uni
t1:Or
eReser
vesandFeasi
bil
it
ySt
udi
es

Def
ini
ti
ons

Adiscoveredminer
ali
zat
ionzonewi
l
lunder
got
hreephasesofi
dent
if
icat
ionbef
orei
tis
r
eadyf ormini
ng.

ADeposi ti
sami ner
ali
zedzonethati
sexami nedtot
heextentt
hatthemineral
consti
tuent
sareidenti
fi
ed.Theexaminati
onmayr ev
ealsomegeologi
calconti
nui
tyand
approxi
mat egr
ade,butther
eisinsuf
fi
cienti
nfor
mationt
oclassitasaResource.

AResourceisami neral
i
zedzonet
hati
ssampl
edandstudiedtogi
veacredibl
e
esti
mateoftonnageandgrade.Ar
esour
cei
sdi
videdi
ntothreecat
egor
ies:Measur
ed,
Indi
cat
ed,andInfer
red.

MeasuredResour ceisthehighestorder;t
hemeasurementsaremadei nthr
ee
dimensionsati
nterval
scloseenought obeusedasabasisfordetai
ledmineplanni
ng,
aswouldbet hecasef orst
opedev elopmentinanoperat
ingmine.Inthei
nstanceofa
newprojectbei
ngcont emplated,i
tistypi
calt
hatther
ewillbel
it
tl
eornomeasur ed
resour
ces.

Indicat
edResourcei
sonet
hattheest
imateoftonnageandgr
adei
str
ust
wor
thyt
othe
extentthati
tmayser
veasabasisf
ormajorexpendit
ures.

Inf
erredResourceisapotent
ial
resour
cet
hati
sassumedt
oexi
st,
byr
easonofl
ogi
cal
extr
apolat
ionorint
erpol
ati
on.

AReser
v eisthepor
ti
onofami ner
alresourcethatmaybeext ract
edataprof
it
.Whilea
r
esour
cei sbasedupongeologi
cal
int
erpretat
ion,areserv
ehasbeenanalyzedfur
thert
o
t
akeactualmini
ngintoaccount
.Amor epreci
sedefinit
ioni “
s,Thatpar
t

Zi
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nes–Nat
ionalDi
plomaModul
e Page113
 Mi
neVal
uat
ionandEconomi
cs

ofami ner
alresourcethathasbeenanalyt
ical
lydemonstr
atedtojust
ifymini
ng,t
aki
ng
i
ntoaccount,atthetimeofdeterminat
ion,mini
ng,metal
l
urgical
,marketi
ng,l
egal
,
envi
ronmental,soci
al,economi
candot herappli
cabl
econdit
ions.
”

(Ext
ract
edfr
om theJohannesbur
gSt
ockExchangel
i
sti
ngr
equi
rement
s:Mi
ner
al
Companies,
Chapter12.
)

Ar
eser
vemaybedi
vi
dedi
ntot
wocat
egor
iesofcer
tai
nty
:Pr
ovenandPr
obabl
e.

ProvenReserveisder
ivedonlyf
rom ameasuredr
esource.Thi
scategoryi
sgeneral
l
y
l
imitedt
oami ningzonebeingminedoronethati
salr
eadyprepar
edf ormini
ng,
to
i
ncludeprepr
oducti
onst opedev
elopment
.

ProbableReserveisthatpartofanIndi
cat
edResourcesubjectedtothescruti
ny
requir
edofaDet ai
ledFeasibili
tySt
udyandtherebymaybef oundtojust
if
yt he
expendit
urerequir
edf ormining.I
naformaleconomicanal
ysis,onl
yprobableand
provenreser
vesar eemployed.

Feasibili
tyStudies
Afeasibili
tystudyisanev al
uat i
onofapr oposedpr ojecttodet erminewhetherandhow
i
tcanbemi nedeconomically.Detail
edFeasibil
i
tySt udiesextendt heeval
uationto
determinet hemaximum pr ofitormostsecurepr ofi
tt obeobt ainedandprov i
deablue
pri
ntfori mplementati
on.Threet ypesoffeasibi
li
tyst udiesaredescr i
bedi
nt hefoll
owi
ng
paragraphs; however,
theremai nderofthischapterismai nl
ydev otedtot
hepr epar
ati
on,
execution,andappr ai
saloftheDet ai
ledFeasibi
li
tySt udy .

Or
der
-of
-Magni
tude

Order
-of
-Magni t
udeFeasibi
li
tyStudiesconsti
tut
eanini
tialfi
nanci
alappraisalandare
of
tencarri
edoutbyasi ngleindi
vidual
.Tobeef f
ecti
ve,
thisstudyshouldincludean
el
ementarymi nepl
an.Order-of-
MagnitudeStudi
esmayev aluatewhethertoinit
iateor
pr
oceedfurtherwit
hanexpl orat
ionprojectt
hathasanindicatedmineralr
esour ce.

Pr
eli
minar
yFeasi
bil
it
y

Prel
i
mi nar
yFeasi
bil
i
tyor“
Pre-
feasi
bil
i
ty”St
udi
esar
ethesecondor
derandar
eusef
uli
n
thefol
l
owingcases.

 Duedi
li
gencewor
k
 Det
ermi
ningwhet
hert
opr
oceedwi
thaDet
ail
edFeasi
bil
i
tySt
udy

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page114
 Mi
neVal
uat
ionandEconomi
cs

 A“real
it
ycheck”ondet
ail
edest
imat
est
opi
npoi
ntar
easmer
it
ingf
urt
her
at
tenti
on

Det
ail
edFeasi
bil
it
y

Detail
edFeasibi
l
ityStudi
esarenor mall
ythehighestorderandmosti mportantbecause
theyaretheli
tmust estf
orproceedingwit
hapr oject
.Typical
ly
, Detai
l
edStudiesarethe
basisforcapi
talappropr
iat
ionandpr ov
idethebudgetf i
guresfortheproj
ect.

Feasi
bil
it
yst
udy–(
eval
uat
iont
odet
ermi
nei
fpr
ofi
tabl
emi
ningofdeposi
tispossi
ble)
,
i
nvolv
es:

1.O/R( grades&t onnage)

2.Calcul
ationofmet al tonnages
3.Esti
mat i
onorf orecastofmet alpr
ices
4.Determinationofli
feofmi ne
5.Preparationofpreli
mi naryproducti
onschedulethroughoutlif
eofmi ne
6.Scheduleofcapi t
al andoper ati
ngcoststogetherwit
hgr ossannualret
urnsover
l
ifeofmi ne
7.Preparationofnetpr esentcashf l
owcalculat
ionsforproject&test
inge.g.DCF
8.Compar isonofdifferentproject
s&st rat
egies

Aspect
soff
easi
bil
i
tyst
udi
es:

 Polit
ical
 Social
 Legal
 Geogr aphical
 Topogr aphical
Geogr aphical&t opographi
caltoi
nclude,t
opography,
gr oundcondi
ti
ons,
water
aspect s,weather&seasonal vari
ati
onse.g.1in100-yearfl
oods,1i
n1000-y
ear
fl
oods
 Slopest abili
ty
 Costofmi ning&st ri
pping
 Locationofwast edumps
 Tail
ingsdi sposal
 Impactoff ootpri
nt
 Dewat eringsy st
em
 Tail
ingsst abili
ty
 Surfacemi ningi nrai
nyseason,winterf
orcoldareas,
et c

Zi
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nes–Nat
ionalDi
plomaModul
e Page115
 Mi
neVal
uat
ionandEconomi
cs

Basi
cDat aRequired
General
Obvi
ouslythelocati
on,elevat
ion,cl
imati
cenv ir
onment,andlocal
infr
astr
uctur
eshould
beknown.Thel ocali
nfrastr
ucture,i
ncl
udingsuchitemsashousing,powerandwat er
avai
l
abil
it
y,communi cationsandt r
ansportat
ionsystems,l
abouravai
labi
li
tyandquali
ty,
i
simportantadvanceinformation.

Nat
ureoft
heOr
eBody

Oncethelocalsett
ingoftheorebodyhasbeenascert
ained,
itsgeneralnatur
eshould
bestudi
edtodet er
mi ne:
1)pl
acerdeposi
t,openorconfi
nedarea;2)ri
ppablewaste
and/orore;3)hardrockwasteand/oror
e;and4)geologi
calvs.mineableorebody
.

Geol
ogi
cal
vs.Mi
neabl
eOr
eBody

GeologicalOr eBody:Thegeol
ogicalorebodygeneral
l
yincludesallthebodyofmat er
ial
thatcontainsthevaluabl
emineraltobemined.Thegeologicalorebodymaycont ai
n
highandl owgr adeorezonesthatarenotphysi
cal
lyoreconomi cal
lymineabl
e,because
ofdepth,isolati
on,oramountofincl
udedorcoveri
ngwast e.

MineableOr eBody :Themineableorebodyisthatport

ionofthegeol
ogi
calorebody
thatcanbeext ract
edatapr of
it.Theli
mit
ationstothemineableor
ebodymaybe
stri
ppingrati
o,gradeofore,al
terat
ionofore,dept
h,excessi
vewater,
orenv
ironment
al
considerat
ions.

Atthebeginni
ngofanoper at
ion,themineabl
eorebodymaynotbecompletel
y
del
ineatedand,asoperat
ionspr oceed,moreofthegeol
ogi
calor
ebodybecomes
mineablebecauseofthelearningcurve,i
mprovedmethodsandequi
pment,
and
i
ncreasesinthepri
cesoft hemi neralpr
oductbei
ngmined.

Over
allchangesint
echnol
ogyandeconomi
csmayal
socauset
her
emov
alofor
efr
om
t
hemi neablecat
egory
.

OreReservesandWast etoOr eRati

os:I
nordertomakeameani ngfulf
easibi
li
tyst
udy
ofasit
e-speci
fi
cmi ni
ngoperation,
iti
snecessarytohaveasmuchdat aaspossi bl
e
concer
ningorereserv
esandt hewastetoorerati
o.Whi l
eorereser
vesareof t
enbased
onsurf
acet r
enchingandpit
ti
ngandatt i
mesi ndi
rectgeophysi
calsurv
eys,themost
commonexpl or
ationmethodsusuallyi
nvol
vecoredr i
l
li
ngorairholedri
ll
ing.

Zi
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nes–Nat
ionalDi
plomaModul
e Page116
 Mi
neVal
uat
ionandEconomi
cs

Asurf
aceminingoper
ati
onmaypr oduceanycombinat
ionofthefol
l
owingproducts:or
e,
st
ri
ppedwaste,i
ncl
udedwast
et hatoccursbet
weendisti
nctbodi
esofore,
lowgr ade
mater
ial
tobestockpi
l
edforf
uturetreat
mentortr
eatmentbyaseparat
epr ocess.

I
tis,ofcour
se,
necessar
ytoquant
if
ytheamount
sofeachmat
eri
alt
obemi
nedand
handled.

Selecti
onofMi ni
ngMet hods:Whi l
et hi
ssubjectisdiscussedi ngreaterdepth
elsewhereinthi
svolume, i
tisofcourseimpor t
antt oemphasi zethatthemi ni
ng
met hodsmustbedef i
nedbef oreafeasibi
li
tystudycanbeunder taken.Insomecases,
forexampleinmanypl aceroperati
ons,iti
sdiffi
culttoseparatemi ningfrom
concentrat
ion.Abucketli
nedr edge,cutt
erheaddredge, bucketwheel dredge,orsi
mple
dragli
neoperati
onusuallydredgesthemat eri
aldirect
lytothepr ocessingplant,
whichi
s
frequent
lyonboardthedr edgeorfloati
ngalongsideinthedr edgepond.

Stri
pping:St rippingi sdi scussedi nmor edetai
lelsewher ei nthisv olume.Mostor e
bodiesr equiret her emov alofawast ecov er
ingofv ariousdept h;frequent l
yt hestrippi
ng
operationinv olvesdi fferentmet hodsandequi pment .Manycoal andphosphat e
depositsar est ri
ppedbyal argedr aglineorshov el whichcast stheov er burdeni n
windrowst othesi deoft heexposedor e.Manyur anium deposi tsint heWest ,
parti
cularlyinWy omi ng,canbest r
ippedbyr i
pperandscr aper .Thegener al objecti
veof
stri
ppingi stoexposet heor ewi thmi nimum t r
anspor tofst ri
ppi ngmat eri
al,if
tr
anspor tati
oni sr equi red.Remov al canbeaccompl i
shedbyconv ey orsy stems, diesel,
di
esel-electricort rolleyt r
ucks, orev enscr apersatt i
mes.Pi tslurryingandpi peli
ne
systemscanbeusedwher econdi ti
onsar ef av
our able.Itisgener allyundesi rableto
crushandwetov er bur denmat erialbecauseoft heslimepr oblem.I nt heear lyday sof
Calif
orniapl acermi ning, hydraulicmet hodswer eempl oy edf orther emov alof
overburdenbutt her esultingslimepr oblem inri
verwat ersultimat elycl oseddownt hese
mines.

OreMi ning:Theexcavationofor
eanditstr
ansport
ationtoprocessi
ngplantfacil
it
ies
mayi nvolvequi
tediff
erentmethodsandequipmentthanthoseempl oyedinstr
ippi
ng.In
thefeasibil
it
ystudy
, t
heor emini
ngport
ionmaybeconsi der
edsepar at
elyift
heamount
ofstri
ppingisconsiderableandt
henatureofst
ri
ppingwastei squit
ediff
erentthanthe
ore.

Producti
onScheduli
ng:Theextenttowhichmi ningi splannedandschedul edwil
l
dependupontheenduseoft hefeasibi
li
tyst
udy .Ifthest udyisdestinedtoaidi
nthe
deci
siontoacceptorrej
ectaproperty,
aconcept ual pl
ancanbedev el
opedtoarr
iveat
quanti
ti
esoforeandwast eforcost
ingpurposes.Ont heot herhand, i
fthest
udywill
be
usedtoobtai
nfunding,det
ail
edplansshouldbepr epared.Forfeasibil
it
ystudi
es,t
his

Zi
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nes–Nat
ionalDi
plomaModul
e Page117
 Mi
neVal
uat
ionandEconomi
cs

mayinvolv
ecomput er
-assi
stedcalculati
onofor ereserv
esandcomputer-
prepar
ed
pl
ansandsectionsofthepitatvari
ousst agesinthelif
eofthesur
facemine.Computer
modell
ingmightbeusedt odeveloppr oduct
ionschedulesonayearl
ybasisfort
hefi
rst
fi
veyearsoft
hemi neandonaf i
ve-yearbasisther
eafter.

Feasi bilityStudyDoesNotMeanFeasi bl e
Ther eappear st obeami sconcept ionbysomei nt hei ndust ryaboutwhataf easibi l
ity
studyi sandt hest epsr equi redt ogener ateone.Yes, whensomeonesay sf easibilit
ywe
allknowwhatpeopl ear et alki ngabout ,butascompani est r
yt oexpedi tet hepr ocessof
bringi ngpr oject son- l
inet hesest epsar ebei ngski pped.Unf ortunat ely,ski ppingt hese
stepscanendupdel ay i
ngt hepr ojectandcost ing
mor emoney .Insomecasesi tal someanspr oject st hatshoul dhav ebeenel iminat ed
from consi der ationatanear lyphasear eev aluat edi ntoomuchdet ai lcost ing
compani estimeandmoney .Thi sar ti
clei smeantt opr ov ideasi mpl er emi nderofwhat
af easi bi l
ityst udyi s, ther ecommendedst epst ogett othe
feasi bilitystage, andt hepi tfallsofnotf ollowi ngal l thest eps.
Whati saFeasi bil
itySt udy ?
Letusst artatt hev erybegi nni ngwi t
ht hedef initionofaf easi bili
tyst udy .Af easibi l
it
y
studyi sanengi neer i
ngst udybasedont estwor kandengi neeringanal ysis, whi ch
present senough
i
nf or mat i
ont odet ermi newhet herornott hepr ojectshoul dbeadv ancedt ot hef inal
engi neer i
ngandconst ruct ionst age.
Thisi sa“ go/ no- go”deci sionpoi nt…t her ebyi mpl yingthatsomet i
mest heansweri sNO.
Unf or tunat ely, onceapr ojecti sadv ancedt ot hef easi bili
tyst udyst age, compani esof ten
hav ecommi ttedconsi der abl ecapi tal andpr of essi onal reput ationandt her eforeassume
theanswerwi l
l bet hatt hepr ojecti sf easibl e.
Bankabl eFeasi bil
itySt udy
Thepossi bil
ityt hatt heanswercoul dbet hatt hepr ojecti snotf easi bleisof ten
forgot ten.Of tent het er m“ bankabl e”pr oceedst het ermf easi bil
it
yst udy .Addi ngt hi
s
term si mpl ymeanst hatt hel ev el ofef fortt hathasbeeni ncor porat edi ntot hest udyi s
suf ficientf orout sidef i
nanci ng, prov idedt he
proj ecti sf easi ble.Ty pical l
y“ bankabl e”meansanov erallaccur acyl evel of+/ -15
per centont hef easi bili
tyst udy .A“ bankabl e”f easi bi l
it
yst udycanbecompar edt ot he
l
ev el ofef fortacompany
mi ghtexpendi fthepr oj ecti st obei nternal lyf inanced.Fori nternally-financedpr ojects,
compani eshav et hei rownr equi rement swhi chmayormaynotmeetanaccur acyl evel
of+/ -15per cent ,andi n
somecasesmayexceedt hisst andar d.Tosomei nt hei ndust r
y,theactof
commi ssioninga” bankabl e”f easi bili
tyst udywi thaconsul t
anthascomet omeant hat
thepr oj ectisf easi ble.Asar esul t,theyassumei ft heyaskf ora“ bankabl e”f easibi l
it
y
studyt heywi ll getast udy , whi chshowst hepr oj ecti sfeasi ble.Thus, somewher et he

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possi bilityt hatt heanswercoul dbe“ itisnotf easi ble”orcur rent lyuneconomi cget slost
andi snotpr esent edt ot hei nv estor ,conv eni ent lyf orget tingt hat“ bankabl e”descr ibes
onlyt hel ev el ofaccur acyoft heanal ysis…notnecessar i
lyt heout come.
Ther ei st hepot ent ialf oraf easi bi
lityst udyt oshowt hatt hepr ojectwoul dmakemoney ,
thusmeet ingt hedef i
nitionoff easiblesot hatar eser vecoul dbedecl ar ed; howev er,the
returnoni nv est mentcoul dbel owenought hatt hecompanywoul dnotwantt oadv ance
thepr oject .Essent iall
y ,int hi scaset hepr ojecti sf easibl ebuti snei thereconomi cally
attract i
v enorf inancabl e.Banksar eof tenmor ei nt erest edi ncashf lowdur i
ngt hel oan
repay mentper iodnotov er allpr ojecteconomi cs.Apr ojectmayappeareconomi cal l
y
feasi blet oacompanybutnotbest r
uct ur edorschedul edopt imal lyf orbankf inanci ngI n
ordert odecl arear eser veonanewpr oj ect ,theU. S.Secur it
iesandExchange
Commi ssi on( SEC)i sr equi ri
ngt hataf easi bi l
ityst udybecompl et edf ort hepr oj ectand
thatper mi ttingbei npr ocess.Hav i
ngbot hoft heser equi rement si npl acei mpl i
est hat
thecompanyi sgoi ngf or war dwi t
ht hepr oject .Thi shasi ncr easedt hei mpor tanceoft he
feasi bil
ityst udy ,thusi ncr easi ngt hepr essur et oski pst epsi nget tingt ot hef easi bili
ty
l
ev el.Thel i
kel ihoodofaf ailedbankabl ef easi bi l
ityst udy i
ncr easesi fpr elimi nar yst eps
toaf easi bilityst udyar enott aken.RecommendedSt epst oReacht heFeasi bi l
itySt udy
Stage
Aconcept ual study ,alsor ef erredt oasascopi ngst udy , i
st hef i
rstst udyt hatshoul dbe
compl et edonapr oj ect.Thi si st hepr elimi nar yev al uationofapr ojectandi sbasedon
assumpt i
onsandf act or s.Ther eshoul dbeasuf ficientl evel ofdr ill
ingandsampl ingt o
definear esour ce, simpl ef lowsheet , andmi ningmet hod.Pr oduct i
onschedul es, and
costest imat esar ebasedonl i
mi t
eddat aandt estwor kandasar esul trel ymor eon
exper i
enceandi ndust ryst andar ds.Ther efor e,t heaccur acyoft hesei nitial studi esi s
typical l
y+/ 35t o40per cent .Concept ual studi est y picallyi dent ifyt echni cal issuest hat
willrequi readdi tional exami nat ionort estwor k.Gener ally, t
heendr esul toft hest udyi s
adescr ipt i
onoft hegener al feat uresandpar amet ersoft hepr ojectandanor derof
magni tudeest imat eofcapi t
al andoper at ingcost s.Ast udyoft hi slev el i
sv alidt o
deter mi newhet herapr ojecti swor thpur sui ngf ur therbutt heeconomi cpar amet ersar e
notsuf ficientf orr eser vedef i
nit i
on.
Prelimi nar yf easi bi li
ty( pr ef easi bil
ity)st udi esar et hei nter medi atest epi nt hepr oject
evaluat ion.Att hisst aget her ei ssuf ficientdr il
lingandpr ocesst estwor kf orbasi c
engi neer ing.Ty pi cal l
y, theaccur acyoft hesepr oj ect sisi nt he+/ -25per centr ange.The
goal oft hesest udi esi st odet er minet hemi ningandmi lli
ngext ract ionmet hodsand
rates, thepr oductr ecov er ies, env ironment al andper mi tti
ngi ssues, andpr eli
mi nar y
capi talandoper at ingcostest imat es.Aspar toft hi spr ocessar easofconcer nt hatneed
furtherr esear chdur i
ngt hef easi bilit
yst ageshoul dbei dent ified.Thesear easof ten
i
ncl udegeot echni cal studi esf ormi ne, wast edumps, andt ailingsf aci li
tiesdesi gn,
met al l
ur gical test ingf orr ef iningest imat esofpr oductr ecov eries, andwast e
char act erizat ionst udi esi ncl udi ngaci dbaseaccount i
ng.Thei dent ificat ionofcr iti
cal
i
ssuesi skey ,ident ifyi
ngt hem att hisst agecanav oidcost lydel ay sdur ingt hef easi bil
ity
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stage.
Dependi ngupont hel ev el ofdet ail i
nt hesest udi es, andt hesecur itiesexchanget hati s
i
nv olv ed, r
eser vescani nsomecasesbedecl aredatt hispoi nt .Inessence, thef easi bili
ty
i
ssi mpl yar efinementoft hepr ef easi bi li
tyst udy ,whi chev olv edf r
om t heconcept ual
study .Keycomponent si nthef easi bilityst udyar et hemi nedesi gn, pr oduct ionschedul e,
adet ail
edpr ocessf l
owsheet ,pr oductr ecov eries, adet ailedpl antdesi gn, consi der at ion
oftheenv ironment alissues, det ai l
edcapi tal andoper atingcost sest i
mat es, andan
economi cmodel oft hepr oject .Gener al indust ryst andar dsar et hatt hel ev el ofef fort
willresul tinest imat esof+/ 15per cent .Thef i
nal st udypr ov idest hebasi sf ort he
decisi ononwhet herf ur t
herst udyi sr equi redorwhet hert hepr ojecti swor thpur sui ngor
whet hert oadv ancet hepr ojectt odesi gnandconst ruct ion.Att hispoi ntt her eshoul dbe
sufficienti nf ormat iont odecl arer eser v es, pr ov idedt hepr oj ecthasposi tiveeconomi cs.
Thei ncr easi ngl yst ri
ngentst epscr eat eaDar wi ni anpr ocessi npr ojectdev el opment .
Fewpr oj
ect ssur v iveev ent heconcept ual st udy .Pr ef easi bi li
tyst udi esgener allyonl y
produceposi tiver esul tsinsayhal foft hecases.Att hef easi bi l
ityl ev el,roughl y20%wi l
l
fail
,andoft hesemostf ailasar esul tofei therov er l
yopt imi st i
cassumpt i
onsorski pped
steps.Fort hisi ter ati
v epr ocesst obesuccessf ul ,concept ual andpr efeasi bi l
ityst udi es
mustuser easonabl eandr ational assumpt ions.
PitfallsofAv oidi ngSt eps
Basi callythemai npi tf allsresul tingf r om notf ol l
owi ngt hesest epsar epr ojectdel ay s
andcost s,incl udi ngl ostoppor tunitycost s.Exper iencehasshownt hatski ppi ngt he
prefeasi bilit
yst udydoesnotsav et imeandmoneybecausei ssuest hatshoul dhav e
beeni dent i
fiedear lyint hepr ocessar enot , creat i
ngdel ay swhi let hesei ssuesar e
anal yzedandaddr essed, whichr esul tsi ni ncr easedcost s.Del ay sar et ypi cal l
ycaused
byt heneedf oraddi t
ional expl or ationdr i
llingf orev er ythingf rom or ebodydef initi
on, to
geot echni cal studi es, tomet allurgical sampl i
ng.Manyt imesi ti st heneedf oraddi t
ional
sampl ing,incl udi ngbul ksampl es, formet al l
ur gical testingt hatdel ay st hepr ocess.Thi s
needappear st oev olvef r
om t hoser osecol or edgl assest hatl eadcompani est ot he
mor eopt imi st i
ci nt erpr etationoft her esul ts, ignor ingsubt let hingst hatpoi ntt oi tnot
beingsor osey .Asar esul tofdel ay s, thef easi bilityst udycost si ncr easemai nl yasa
resultofdoi ngwor kov eragai nbutal soj ustduet ot hef actt het imef orcompl etingt he
projecti sl onger .Wi t
houtapr ef easi bilityst udy , themor ecost l
yandt imeconsumi ng
fi
nal f easibilityst udymayf ocusonal essopt imum mi nedesi gnorpr ocesspl an.Ther e
aresomecaseswher et hepr ojecti snotf easi bl ebecauseaddi tional expl or ationdr ill
ing
i
sneededt obet terdef inet heor ebody .
Conduct ingascopi ngorpr ef easi bili
tyqui ckl yi dent i
fiessuchpr obl emsandf urtherwor k
ont hepr ojectcanbesuspendedunt iltheaddi tional expl or ationdr i
llingi scompl et ed
thussav ingt ime, ef f
or t,andexpense.Anaddi t
ional i
ssuei st hatonceacompanyst ates
theyar edoi ngaf easi bilit
yst udyt her ei spr essur et opur suet hef easi bi l
ityt ot heend,
eveni fatanear lyst aget her ei sev i
dencei ti snotwor thpur sui ng.Asar esul t
compani esspendt imeandmoneypur sui ngmul tipleopt ionsj ustt of indawayt omake
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thepr oj ectwor k.Insomecasest hi sef forti ncludesusi ngopt imi sticmet alpr i
ces, whi ch
mayshowt hepr ojectt obef easi blebutul timat elydoesnotwor kduet other est r
ict i
ve
appr oacht heexchangesar eusi ngonpr icesorl owerpr i
cesr equi r
edi nabankr ev iew.
Forexampl etheU. S.SECt endst or equi ret het hr ee- yearrollingav er agef orr eserv e
statement smor et hanf orecastorcur rentpr i
ces.Thi saddi t
ional effor tresultsinamor e
cost l
yst udynotonl ybecauset hef easi bil
ityst udyshoul dbest oppedbef orecompl etion
butal sot heef fortt of indawayt omakei twor k.
Perhapst hegr eat estpi t
fallist hel ostoppor tuni t
ycost sthatr esul tsf r
om compani es
pursui ngapr ojectf ort ool ong.Whenacompanygoesst r
aightt ot hef easibil
ityst age,
thechancest oel imi nat epr oject si nt heear lyst agesar elost.Asar esul tcompani es
focust i
meandef f
or tev aluat ingpr oject st hatar enotwor thcur rent l
ypur suingwhi ch
meanst hatt her ear er educedr esour cesav ail
abl et opur suemor ewor thwhi l
epr oject s,
thusl ostoppor tunities.
Concl usi onsandRecommendat i
ons
Af easi bili
tyst udyi sadet ailedst udyt odet ermi net heeconomi cv iabi l
ityofapr oject.
Thussomet i
mest heansweri sNO, thepr ojecti snotf easible.Addi ng“ bankabl e”t ot he
ti
tledoesnotguar ant eei tisf easi ble,butmer elydi ctatesal ev elofaccur acy.
Taket het i
met odoaconcept ual studyandapr ef easi bil
it
yst udysot hatapr ojectcan
best oppedi nt heear lyst agesorkeyi ssuescanbei dent i
fi
edsoaddi ti
onal wor k
i
ncl udingsampl i
ngcanbedone.I nsomecases, compani eshav eski ppedt he
preliminar ystudi esandgonest r
aightt othef easi bilitystudyst agebecauset heycoul d
getf i
nanci ngf oraf easi bili
tyst udybutnott heot herst udies.Fort hesei nstances, there
shoul dbepr ojectmi lestones, whi chef f
ect ivelyar et hecompl etionoft hesepr elimi nary
studiesaspar toft heov er allf easibili
t ystudy .
Skippingst epscandel aypr oj ectsandi ncr easecost s.Thesecostar enotonl yt heact ual
monet ar ycostbutal sot heoppor tuni tycostofnotal l
ocat i
ngr esour cest omor e
wor thwhi l
epr oject s.

Ther oleoff easibil

itystudiesi nval uecr eation
Akeyf eatur eofthef easibil
ityst udypr ocessi sthattheabili
tyofanownert oinfl
uence
theout comeofapr ojectisati tspeakwhent hefeasibi
li
tystudypr ocessisdefi
ning
whatt hepr oject
shouldandwi l
lbe–y etadequat epr ojectdef i
nit
ioncanbeachi evedinthestudy
processf oronl yasmal lfr
act i
onoft het otalproj
ectexpenditur e.
Duringt hest udypr ocess, alternativepr ojectconfigurat
ionscanbest udiedand
decisionsmadeonwhet herornott opr oceedwi thpr oj
ectdev elopment,andifso,what
theopt imum conf igurati
oni s.Howev er,onceadeci siontopr oceedismade, anddesign,
procurementandconst r
uctionef f
ortscommence, t
hereisli
ttleopportunit
ytoinfl
uence
theproj ectout come.Thi s
charact eristi
coft hepr ojectdev elopmentcy cl
easi ll
ustr
atedi nFigure1.

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Regar dlessofwher ethest udyphasesbegi nandendorhowmanyphasesar e

recogni sed, andev enr egar dl
essofwhet herast udyr ecommendspr oceedi ngtot he
nextst ageoft he
dev elopmentcy cl
eornot ,eachst udyphasecr eatesv al
uef ort hepr ojectowner .Thi s
valuecanar i
seei therdi rectly–byensur i
ngt hatv iableoppor tuniti
esar eident i
fiedand
dev eloped, andby
aidingi nthei dent i
ficationoft heopt i
mal configurationifapr ojectisdev eloped, or
i
ndi rectly–byhal tingorr edirect i
ngf urtheref fortonapr ojectt hatisei thert echnicall
y
i
nf easibleor
economi callyunv iablei nitspr oposedconf i
gurat i
on.
Italsof oll
owst hatonceadeci siont oproceedi smade, anddesi gn,procur ementand
const ructi
onef fortscommence, thereisl itt
leoppor tunityt ocr eatev aluenomat t
erhow
goodt hepr oject
execut ionis.Excel lencei npr ojectexecut ionisr equiredj usttomai ntaint hev alue
oppor tunitycr eatedf rom agoodf easi
bili
t ystudy ,andexcel lencei npr ojectoper ati
oni s
requi r
edt odel iver
thev alue.Apoor l
ydef inedpr ojectwi l
lnotdel iverthesameout comeasawel ldef i
ned
projectnomat t
erhowwel lexecut edandoper at ed.Littl
escopeexi stst oaddorcr eate
valuedur i
ng
projectexecut ion.Thi sisi l
lust ratedinFi gure2.Ther ei sacompel li
ngcasef ort he
feasibili
tyst udypr ocesst obeoft hehighestqual ity
.

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Fullfeasi bilit
yst udy
Theobj ectiveofaf ul lfeasi bili
tyst udyist or emov eallsignificantdoubtandt opr esent
rel
ev anti nf ormat ionaboutr eferencedmat erial.Af ullf
easi bil
itystudyshoul d
demonst rat ewi thinar easonabl econf i
dencet hatt heprojectcanbeconst r
uctedand
oper at edi nat echni cal lysoundand
economi cal l
yv iabl emanner .Thest udyshoul dsuppor tther aisingoff i
nancesf orthe
projectf r
om banksorot hersour ces, andpr ov i
deabasi sf ordet ail
eddesi gnsand
const ruct ion.Ty pical l
y ,af ullfeasi bil
i
tyst udyi sthebasi sf orcapi tal appropriati
onand
providest hebudgetf igur esf or
thepr oject .Capi tal andoper at i
ngcost sar eest imat edtoanaccur acyof10–15%,
i
ncludi ngr ealisticcont i
ngenci es, basedont hel ev elofengi neer i
ngcompl eted.
Thef ullfeasi bili
tyst udyshoul ddet er
mi ne:
 Or er eserv esasperst andar ddef init
ion( i.
e.SAMREC, JORC, etc.)
 Scal eoft hepr oject
 Const ructionbudgetandschedul efort hepr oject
 Costest i
mat ef oroper at
ingandcapi tal
 Cont i
ngency ; ther ear emanyappr oachest ot heinclusi onofacont ingency .The
cont ingencymaybeanest imat eofcost st hatwillarisesubsequentt othest udy
ori tmaybeahedgeagai nsti mpr operori ncompl eteest imat es
 Mar ketest imat es; themostsi gnificantv ar i
ableinaf easibi
litystudyi soften
commodi typr iceandcur rencyexchanger ate
 Cashf lowst udy ;anappr opr i
atedi scountr ateshoul dbeagr eedbyal lconcerned

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andusedtocalcul
atet
heNPV
 Riskandsensi
ti
vit
yanal
ysi
s;r
iskandsensi
ti
vi
tyanal
ysisar
ecommonl
yusedt
o
assesstheupsi
deanddownsidepot
enti
alofthepr
oject
.

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Uni
t2:Mi
neFi
nanci
ng
Fi
nancingrequiredfortheconstruct
ionandoper ati
onofmi ni
ngprojectsmaybe
provi
dedinter
nal l
y,butmostminingcompani esresort(atl
eastinpart)t
ojoi
ntventur
e
part
ners,i
ndependentf i
nanci
alinsti
tut
ions,
internati
onaldevel
opmentagencies,l
ocal
governments,and/ortheequit
ymar kettoprovidethecapitalt
heyrequir
e.

St
ocksandBonds

ShareCapital
Sharesmaybeconsi deredtobet ransferableuni
tsofowner ship,i
ssuedtothe
sharehol
dersofacompany .Capi
tal contri
butedbyshareholderscomesfrom t hesal
eof
sharesofstock.Inor
dert oappeal t
oal argenumberofi nvestors,
acorporati
onmay
i
ssuemor et hanoneclassofshares.
Authori
zedShar eCapitali
sthemaxi mum numberofshar est hatmaybeissuedt othe
sharehol
dersofthecompany .
IssueShareCapitali
stheact ual
numberofshar esalr
eadyi ssuedtoshareholders.

Bondspay abl
eareapopularform ofl
ong-
termf i
nancing.Bondspayabl
emaybe
securedbyspecif
icproper
tyormaybeunsecur ed.Anunsecuredbondi sref
err
edtoas
adebenture.
Debentures
Debenturesar
elong-t
ermloansusedasasour ceofcapi tal
.Companiescansellt
hem
tothepubli
c,l
ikeshar
es.Theyhaveaf i
xedret
ur ntotheinvest
or,
areinter
estbeari
ng
andhav etobepaidwhetherprof
it
saremadeornot .

DebtorEqui tyFinanci ng
DebtFi nanci ngi saf inancingmet hodi nvolvingani nterest-bear ingi nst rumentusual lya
l
oant hepay mentofwhi chi sonl yindirectl
yr elatedt othesal esandpr of i
tsoft he
ventur e.Ty pically,debtf i
nanci ng( al
socal ledasset -
basedf inanci ng)r equi rest hatsome
asset( suchascar , house, plant ,machi ne, orland)beusedascol lateral .Itrequi rest he
entrepr eneurt opay backt heamountoff undsbor rowedaswel l asaf eeexpr essedi n
termsoft hei nterestr ate.
Ifthef inanci ngi sshor t-
term( i
.e.lesst han1y r),t
hemoneyi susual lyusedt opr ovide
wor kingcapi taltof inancei nv ent ory,account sr eceivable, ortheoper at ionoft he
business.Thef undsar et ypicallyr epaidfrom t her esulti
ngsal esandpr ofitsdur ingt he
year.Long- term debt( l
astingmor et han1y r)isf r
equent lyusedt opur chasesomeasset
suchasapi eceofmachi ner y,l
and, orabui l
ding, withpar toft hev alueoft heasset
(usual l
y50- 80%oft het otal val
ue)bei ngusedascol l
ateral fort hel ong- ter ml oan.
Par t
icular ly,wheni nterestr atesar elow, debt( asopposedt oequi t y)financi ngal lows
theent repreneurt or etainal argerowner shippot ionint hev ent ur eandhav eagr eater
returnont heequi ty .Theent repr eneurneedst obcar eful thatt hedebti snotsol arge
thatregul ari nterestpay ment sbecomedi f
ficultifnoti mpossi blet omake, asi tuat i
on
thatmayi nhi bitgr owt handdev elopmentandpossi bleendi nbankr upt cy.

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EquityFinanci ngdoesnotr equi r

ecol l
ateralandof ferst hei nvest
orsomef orm of
owner shipposi ti
oni nt hev ent ure.Thei nvestorshar esint hepr ofi
tsofthev entur
e, as
wellasanydi sposi ti
onofi tsasset sonapr or at
abasi s.Keyf actorsfavori
ngt heuseof
onety peoff i
nanci ngov eranot hert ypear etheav ailabil
ityoff unds,t
heasset softhe
vent
ur e,andt hepr evaili
ngint erestr ates.
Usually,anent repr eneurmeet sf inanci all
yneedsbyempl oyingacombi nati
onofdebt
andequi tyfi
nanci ng.Thi sequi tyf undingpr ov i
dest hebasi sf ordebtfinancing,which
makesupt hecapi t
al str
uctur eoft hev enture.
TypesofShar es
Sharesmaybecl assi f
iedint odi f
fer enttypesofshar esi naccor dancet otheright
sand
pri
vi
legesat tachedt otheshar es.Thev ari
oust ypescat erf orthepreferencesof
i
nvestor sforinv est ment swi thdi f
fer entlevelsofrisk.

Ordi
naryShares
Theseshar
esar eheldbyor di
nar yshareholder swhoar et
heef fecti
v eownersofthe
company.Ordinar
yshar ehol
der shavether i
ghtt ovoteatgener almeet i
ngsofthe
companyandt her
eforecont r
ol thecompany .Theymayr eceivedividendsoutofcurr
ent
oraccumulat
edpr ofi
tsonlywhent hepreferencedi v
idendhasbeenpai d.Si
milarl
yon
thel
iqui
dat
ionorwi ndingupoft hecompany ,ordi
naryshareholdersmayonl yclai
m
whencredi
torsandt hepreferenceshareholder shavebeenset tled.

Pref
er enceShar es
Theseshar esar eownedbypr eferenceshareholdersandhav epref
erenti
alri
ghtsov er
ordi
nar yshareholders.Preferenceshar eholdersreceiveadi vi
dendbeforetheordinary
shareholdersnor mallyataf i
xedr at
eeachy ear.Ifthecompanyi sli
quidated,the
pref
erenceshar eholder susuallyreceivetheircapit
alinvestmentbeforeordinary
shareholders,subjecttotheor iginalter
msofi ssue.Pr ef
erential
sharehol
der sdonot
normal l
yhav evotingrightsunlesst heirdi
videndsf al
linarrears.

Deferr
edShar es
Thesety pesofshareshav
edef err
edt hei
rrightstoashareofprofi
tsandnetasset
son
l
iqui
dationoft hecompany,beyondthoseoft heor di
naryshar
es.Deferr
edshar
eholder
s
wil
lthereforeonlyr
ecei
vetheirdi
vidends,orcapitalpaymentonli
quidati
onoft
he
company ,
aftert
heclai
msoft heordinaryshareholdersar
emet .

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ionalDi
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 Mi
neVal
uat
ionandEconomi
cs

Divi
dends
Divi
dendsareadi str
ibut
ionofprofi
tsf
rom t
hecompanytot hesharehol
dersinthe
samer at
ioinwhichsharesar ehel
d.Theymayonlybepaidfrom prof
it
s,whichare
l
egallyavai
l
ablefordistr
ibut
ion.Thecompanyshoul
dbef i
nancial
lysoundandhav e
adequatecashtopayt hedivi
dends.Thedi
rect
orsofthecompanynor mall
yproposethe
div
idend,whichi
st henapprovedbyageneralmeeti
ngofshareholder
s.

FormationofCompani es
Threemostcommonf ormsofbusi nessenti
ti
esar esolepropr i
etor
ships,part
nerships
andcorpor at
ions.Asol epropri
etorisabusinessownedbyonei ndiv
idual,apartnershi
p
i
sabusi nessownedbyt woormor epeoplewhohav eagr eedtoactaspar t
nersanda
corpor
ationisabusi nessgr ant
edacer ti
fi
cateofincorporationorachar t
erbyt he
provi
ncialorfederalgovernmentandownedbyshar eholders.Ownershipof
corpor
at i
onsisev i
dencedbyshar esofcapit
alstock,whichmaybesol dbyonei nvestor
toanother.

Par
tner
shi
ps

Adv
ant
agesofPar t
nerships
1.I
tbri
ngstogethersuf f
icientcapitaltocar
ryonabusiness
2.I
tcombinesspeci alskil
lsofthesev eral
3.I
toff
ersfreedom andf lexibi
li
tyofact i
on
4.I
tmayresultinincomet axadv antagetothepar
tner
s.

Di
sadv
antagesofPar t
nershi
ps
1.Apartnershipmaybet er
minatedupondeathorwi t
hdrawal ofapartner
.
2.Eachpar t
nerisper
sonall
yresponsiblef
orpar
tnershi
pdebt s.
3.Thepar t
nershi
pisboundbyt heactsofanypart
nerasl ongast heseactsar
e
whent hescopeofnormal operat
ions.
4.Thepar t
nershi
pislesseff
ecti
vethanacorporati
onf orrai
singl
argeamountsof
capit
al.

Corporat
ions
Transf
erablesharesofst ockev i
denceowner shipinacor porati
on, andownersare
call
edshareholders.Corporateshareholdershav ecer tainbasicr i
ghts:
(a)Tov otefordi r
ectors(voti
ngr ightsgener all
yaregr antedonlyto
shareholdersofcommonst ock) .
(b)Toshar einincomebyr eceivingdi v
idends( distri
buti
onsofear ni
ngstothe
shareholders)declaredbyt heboar dofdi r
ectors.
(c)Toshar eint hedist
ributi
onofasset sifthecor porationisli
qui
dated.
(d)Tosubscr ibestoaddi t
ionalshar esofst ockwhent hecor por
ati
ondecides
toincreaset heamountofst ockout standing.

Adv
ant
ages
1.Theli
abi
li
tyofi
ndi
vi
dualshar
eholder
sfort
hedebt
sofacor
por
ati
oni
sli
mit
edt
o
theamountoft
hei
rinv
estment.

Zi
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nes–Nat
ionalDi
plomaModul
e Page127
 Mi
neVal
uat
ionandEconomi
cs

2.Largeamount sofcapi
talmaybegather
edbyissui
ngst
ockt
omanyi
nvest
ors.
3.Sharesaretransf
erabl
e.
4.Corporat
ionsareusuall
yrunbypr
ofessi
onal
s.

Di
sadv
antages
1.Acor porationisataxabl
eenti
tyandmaypayahi ghrateoftaxoni t
snetincome.
2.Cor porat
ionsar esubj
ectt
oaconsiderabl
edegreeofregul
ationanddiscl
osur eof
theirbusinessandf i
nanci
alaf
fai
rs.
3.Thesepar ati
onofownershi
pandmanagement( eff
ectiv
econt r
olofcorporat
e
affair
s)mayr esul
tinmanagementpracti
cest
hataredetri
ment al
toshareholders.

Pri
vateBusi nessCor porati
on
Thi
si sgovernedbyt hePr ivat
eBusinessCor porati
onActChapt er24:11.
Characteri
stics
 I tal
lowsoneormor epeopleassociatedf oralawfulpur poset oform apr iv
ate
businesscor poration.
 Thebusi nessi sasepar atelegalper sonapartf r
om i tsmember s.Thus,t he
member salsoenj oyl i
mitedli
abil
it
yint hattheywil
lnotbel i
ablefort hedebtsor
obli
gationoft hebusi ness.
 Member sar enotobl i
gedtocont r
ibutemoneyascapi taloft hebusi ness.Thei
r
contri
but i
onmaybei ntheform ofservicesorgoods.
 Themember sar eallowedtomanaget hebusinessasi t
sagent s.
 Onl ynat uralpersonscanbemember soft hePriv
ateBusi nessCorpor ati
on.
 Thepr ivatebusi nesscorporati
onissi mplet omanage.I tisnotr equiredtohold
anymeet i
ngsort oappointanyoffi
cerssuchasdi rectorsorsecretari
es.

SoleTrader
Thisisabusi nesscar r
iedoutbyani ndivi
dual onhi s/herownaccor d.
Advantages
 I ti
seasyt ostart
.
 I ti
snotr egister
ednorcont r
olledbystat utelaw.
 I tdoesnotneedagr eatcapi taloutl
ayt ost artoperat
ions.
 Ther eisnoneedl egallytot aket heint
er estsofout si
dersint
oconsiderat
ionwhen
runni
ngt hebusi ness.
 No meet ings arer equired t o be hel d nort he need to make any f ormal
appointment sofanyof fi
cialssuchasdi rectors,secr
etari
esoraudit
ors.
Disadvantages
 Nosepar atel
egal personalityexpertfrom i t
smember s.
 Theownerhasnol imitedl i
abili
ty.Theowner sproperl
ymaybesol dt omeett he
debtoft hebusiness.
 Thebusi nesscannotownpr opertysepar atefrom theproper
tyoftheowner .

Zi
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ionalDi
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e Page128
 Mi
neVal
uat
ionandEconomi
cs

 Thesoletradi
ngbusinessi
sriskytotheowner
.Hehasl esssecuri
tyagai
nst
fi
nanci
alr
uintohimself
.
 Thisbusi
ness,becauseofi
tsnatur
eisdif
fi
cul
ttoexpandasraisi
ngcapit
alis
di
ffi
cul
t.

Theor
yofDemand

Quanti
tydemand(Qd)
Quant
itydemandforanygoodistheamountoft
hegoodorservi
cethatbuyer
sar
e
wil
l
ingandabletopurchaseataspeci
fi
cpri
cedur
ingsspeci
fi
cperi
odoft i
me.

Det
erminantsofDemand
1.Qual i
ty
2.Pr i
ce
3.Technol ogicalchanges
4.Demogr aphicchanges
5.Nat ureofthegood( e.g.scarceresour
ces)
6.Degr eeofsubst it
utabili
ty
7.Consumeri ncome
8.Consumert ests/preferences
9.Expect ati
onsoft hefut ure
10.Actsofnatur e(e.
g.nat uraldi
saster
s,droughtet
c.)
11.Actsofthest ate
12.Seasons

LawOfDemand
I
tstatest
hatthereisaninver
ser
elat
ionshipbetween(Quant
it
ydemand)Qdandpr
icei.
e.
Qd1/ pr
ice
TheDemandCur v e
I
tisacurvethatdefi
nesthecomplet
er el
ati
onshipbet
weenQdandpri
ce,cet
eri
spari
bus
(al
lthi
ngsbeingequal)
.

P0

P1

Q1
Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page129
 Mi
neVal
uat
ionandEconomi
cs

Q0
Fi
g1TheDemandCur
ve

Reasonsfort
hisrel
ati
onship;
1.CommonSense
2.Dimini
shi
ngMar gi
nal Uti
li
ty(DMU)
- Theut i
li
tyisdimi
nishi
ngasmor eoftheproducti
sconsumed
(Ut
il
ityisthesati
sfact
iononedeser
vesfrom aparti
cul
argoodor
ser
vice,
- Ut i
ls-measur ementofsat
isf
acti
on)
.

3.TheIncomeEffect
- peopl
ecanbuymoreofacommodi t
yatalowpr
ice.
4.Substi
tut
ionEff
ect
- Peopl
etendt
ochoosecheaperal
ter
nat
ives

Shi
ft
sInTheDemandCur ve
Shi
ft
softheDemandCurveoccurduetochangesi
notherfact
orsofdemandot
herthan
ownpri
cee.g.i
fincomei
ncr
easesthedemandincr
easestoQ3butatthesamepri
ce
l
evel(
P1)

P1

P2

Q1 Q2 Q3

El
ast
ici
tyofDemand(EOD)
Ther
esponsi
venessofquant
it
ydemandedt
ochangesi
nownpr
ice.

EOD=%i nQd
%i nP
EODmeasur
esthesl
opeoft
hedemandcur
ve.Forexampl
e;
P=20 Qd=100
P=25 Qd=80

EOD=%i
nQd
%i
nP

Zi
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nes–Nat
ionalDi
plomaModul
e Page130
 Mi
neVal
uat
ionandEconomi
cs

%i
nQd=100–80x100=20%
100

%i nP=20–25x100=25%
20
Ther
efor
eEOD=0.
2/025=-
0.8

Thi
smeanst
hata1%i
ncr
easei
npr
icewi
l
lresul
tinaf
all
of0.
8%demand.

Suppl
y
Quanti
tySuppl
iedQs
I
stheamountofagoodsell
ersar
ewil
li
ngtoselli
nthesomeper
iodataspeci
fi
cpr
ice.
Qsdependonthepri
ceofagoodandot
herfact
ors;

Det
ermi
nant
sofSuppl
y

(
a)Price
(
b)Costofpr oduct i
on
(
c)Changei nt aste
(
d)Act soft hest at
e
(
e)Priceofr elatedgoods–pr i
cesmustber eviewedr el
ativetooneanot her,
whent hepr iceofxf al
lswhil
ethatofyr emai nsconstant, henwesayx
t
hasbecomer el
at i
vel
ycheaperwhi eyhasbecomer
l elati
velyexpensi
v eas
relati
v epr i
ceschange.Whatmat ter
sonsuppl ysi
dei sthesubst i
tut
abili
ty
i
npr oduct ion.Whenconsi deri
ngt heeffect
sofachangei nthepriceof
othergoodsont hesuppl
iesofapr oduct,weconsi derpricechangesof
thosegoods, whichcanbepr oducedwi ththeresourcesataf i
rm’s
disposal .
(
f)Expect ationsoft hefutur
e(intermsoft hepr i
ceorsuppl yinthefuture)
(
g)Producer s’ i
ncome( aminewithmor ecapitalwill
suppl ymor etothe
mar kett hanonewi thl
esscapital
.
(
h)Whet hercondi t
ions

Suppl
yCur
ve

P0

Q0

Zi
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nes–Nat
ionalDi
plomaModul
e Page131
 Mi
neVal
uat
ionandEconomi
cs

Thesuppl
ycur
vehasanupwar
dsl
ope.

SupplyElasti
cit
y
TheresponsivenessofQsduetochangesinpri
ce;El
ast
ici
tyOfSupply
EOS=%i nQs
%inP
themor eelast
icsuppl
yis,
theeasieri
tisf
orsel
ler
stoincr
easeoutputtot
ake
advantagesoftheincr
easeinpr
ice.
Uni
t3:Ti
meVal
ueofMoney
Compoundi ng
I
treferst
oat echni
queusedf orcalculati
ngthefuturevalueofapresentst
ream of
i
ncomee. g.youdeposit$1000inbankaccountt hatpays10%i nt
eresti
neachyear.
Howmuchwi ll
youhav eattheendoft heyear?
Thisquesti
onrequi
resust ocalcul
at ethefutur
ev al
ueof$1000compoundedannual ly
for1year
.Thefutur
ev alueforadollarcompoundedannual lyfornyearsi
sgivenby;
n
FV=PV(
1+i
)
Wher
e;
PV–Pr esentValue
i–i
nterestratefact
or
n–numberofy ears
FV=1,000( 1)1=$1,
1+0. 100

Q:Supposeyoudeposi
ted$15,000int
oanaccountthatpay
scompoundi
nter
estr
ateat
22%peryearpayabl
eonceay ear.Howmuchwilluhavein7year
s?
n
FV=PV(1+i
)
=15,
000(
1.22)7=$6,
0341

Di
scounti
ng
I
tisatechni
queusedf
orcal
cul
ati
ngt
hePr
esentVal
ueofaf
utur
est
ream ofneti
ncome.
I
tist
heopposit
eofcompoundi
ng.

PV= FV
n
(
1+i )

Q:Fi
ndthePresentValueof$170,
000whi
chistoberecei
vedatt
heendof8y
ear
swhen
t
heinter
estr
ateof22.67%/yri
scompoundedonceperyear
.

PV= FV
(
1+i )n
=170,000
(1+0.2267)8
=$33,154

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page132
 Mi
neVal
uat
ionandEconomi
cs

Semi
-Annualandot
hercompoundi
ng

PV= FV
(
1+im)nm
/

FV=PV(
1+i
/m)nm
Wher e
i=discountrate
m=numberofcompoundi ngper i
ods
Supposeani nvestmentof$100earnsint
erestatarateof10%compoundedannual l
y.
Sinceint
erestispaidev er
y6months,t
hismeanst hattheannual
interestrat
eisdiv
ided
by2butt wiceasmanycompoundi ngperiodsareusedbecauseinterestispaidt
wicea
year.
FV=PV( 1+i m)nm
/
=100( 1+0. 2)1x2
1/
=$110. 25

I
fcompoundi
ngisdoneonceay
ear
;
FV=100( 1)1=$110
1+0.

Theresult
sabov
eshowt
haty
ougetmor
emoney(
FV)f
orcompoundi
ngmor
ethan
onceay ear
.

Q:Youdeposit$10,
000int
oaninv
est
mentthatpromisesar
eturnof22.
24%/
yr.How
muchwill
youhav eatendof5y
earsi
fthei
nter
estiscompounded,
(
a)Semi-
annuall
y
(
b)Quart
erly

A:(
a)FV=PV( 1+i/m)nm
=10,
000(1+0. 2)2x5
2224/
=$28,
706.
67

(
b)FV=PV(1+0. 4)4x5
2224/
=$29,
511.
25

FUTUREVALUEWHENRATESOFI
NTERESTCHANGE.

FV=PVx(
1+i
1)x(
1+i
2)x(
1+i
3)x…x(
1+i
)
t.

Exampl
e:

Youinv
est$10,
000.Duringt
hefi
rstyearthei
nvestmentearned20%f
or
they
ear.Duri
ngthesecondyear
,youearnedonly4%f ort
hatyear
.How
muchisyourori
ginal
deposi
twort
hattheendoft hetwoyears?

FV=PVx(
1+i
1)x(
1+i
2)

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page133
 Mi
neVal
uat
ionandEconomi
cs

=$10,
000x(
1.20`
)x(
1.04)=$12,
480.

PaybackPer i
od
Thisist
henumberofy earsrequir
edt orecov
ertheInit
ialCashOutlay(I
CO)from t
he
proj
ectcashflowsi
.e.i
tisthebreakevenfortheproj
ect(proj
ectcashfl
owsareassumed
tooccurattheendofthey ear
,thecashflowatthebeginningoftheyearist
heICO).
Table1belowshowst heNetCashf l
owsandTabl e2t heCumul ati
veNetCashfl
ows
(CNCF)projectsAandBi nthefi
rstfouryear
s.

NetCashf
lows

Year A B

0 -
1000 -
1000

1 500 100

2 400 300

3 300 400

4 100 600

Tabl
e1

NetCashf
lows

Year A CNCF B CNCF

0 -
1000 -
1000 -
1000 -
1000

1 500 -
500 100 -
900

2 400 -
100 300 -
600

3 300 200 400 -

200

4 100 300 600 400

Tabl
e2.Cumul
ati
veNetCashf
lows(
CNCF)

Pay
backper
iodsf
ort
heabov
epr
oject
s

A=2+100(
–NCFbef
oreRecover
y)
300(
–NCFatf
ull
Recovery
)

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page134
 Mi
neVal
uat
ionandEconomi
cs

=2.
333y
ear
s

B=3+200
300
=3.333years
Supposingannui
ty,
thenpay
backi
sthecostoft
hepr
ojectdi
vi
dedbyannual
inf
lows.

UseofPay backPer i
od
1.I ti
susedt ocompar et hecompanypol icywi ththeprojectpay backe. g.ift he
companypol i
cyist hatweonl ygettopr ojectsof4y earsorl esst henpr ojectsA
andBwoul dbeaccept edbuti fthepol icyi sof3y ear
sorl esst henwer ejectB.
thuspay backper i
odi sacr udemeasur eofr isk,
thelongert hepay backper i
od,
theriski
erthepr oj
ect .
2.Weuset hepay backt or ankpr ojectsandwehav e;
(a)Mut ual
lyExcl usiv e
(b)Independent
IfAandBar emut ual lyexcl usi
ve,itmeanst hati
fweacceptpr ojectAwemust
rej
ectpr oj
ectB.ifAandBar eindependenti tmeanst hecashf l
owsofAar e
i
ndependentpr oject s,wer ankthepr oduct s.
TheDisadv antageofpay backper iodisthati tdoesnott akeintoaccountt hecostof
capit
alempl oyedi nt
hepr oject( i
tdoesnott akei ntoaccountt het i
mev alueofmoney ).
Supposet hecostofcapi tal is10%f orbot hpr ojects,wecancal culateadi scount ed
paybackt otakeintoaccountt hecostofcapi tal.

DiscountedPaybackMet hod(DPBM)
Thecashf l
owsarediscountedattherequi
redrat
eofret
urn.Cal
culat
ethenumberof
yearsrequi
redt
or ecoverthei
nit
iali
nvestmentfr
om t
hediscount
ednetcashf
lows
(DNCF)

Year NCFA PVIF DNCF CDCF

0 -
1000 1 -
1000 -
1000
1 500 0.
909091 454.5455 -
545.455
2 400 0.
826446 330.5785 -
214.876
3 300 0.
751315 225.3944 10.578
4 100 0.
683013 68.
3014 78.820
e3.Di
Tabl scount
edcashfl
owsf
orproj
ectA

NB
NCFA-NetCashfl
owsf orproj
ectA
PVIF–PresentValueInt
erestFact
or(PVI
F=1/( )n
1+i
DNCF–DiscountedNetCashf l
ows
CDCF–Cumul at
iveDiscountedNetCashf
lows

Fr
om t
het
abl
eabove;
Pay
backPer
iod=2+214.
876/
225.
3944=2.
95y
rs

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page135
 Mi
neVal
uat
ionandEconomi
cs

Year NCFB PVIF DNCF CDCF

0 -
1000 1 -
1000 -
1000
1 100 0.
909091 90.
9091 -
909.
091
2 300 0.
826446 247.9339 -
661.
137
3 400 0.
751315 300.5259 -
360.
637
4 600 0.
683013 409.5081 +49.
177

e4.Di
Tabl scount
edcashf
lowsf
orpr
ojectB

From t
het ableabov e;
Pay backPer iod=3+360. 632/ 409. 808=3. 88yr s
TheDisadv antagesoft heDPBM i st hat
(a)I tignor est hecashf lowaf terthepay backper i
odt herebydiscri
mi nating
againstl ong-term proj ect s.Forpr ojectAt hepay backper i
odi s2.95y ears
whi l
et hatofBi s3.88.Bi sal ong- t
erm proj ectbecauset hecashf l
owsar e
increasi ngov erti
mewhi leforAt hecashf lowsar edecr easingov ert i
me;
therefor ei tisashor t-ter m pr oject.
(b)Rel y
ingont hePBM j eopar dizest hestrategi cplanf orthebusinessby
takingashor t-t
ermv iew.
Thepaybackpr ovidesi nformationonhowl ongfundswi llbeupi nt heproject,therefore
theshort
ert hepr ojectt hegr eatert hel i
quidi t
yoft hepr ojectsincet hecashf l
ow
expect
edi nthedi stantf uturearer iski erthanwi t
hshor t-term cashf l
ows.Thepay backis
ameasur eofr isk.Howev erthisisnotapr opermeasur eofr isk.Thismeasur ement
musttakei ntoaccountt hemagni tudeandt imingofv ar i
at i
onbet weenact ualcashf lows
andtheex pect edcashf lowsandf ort hisweusest andar ddev i
ati
on( ).

NetPresentValueApproach
Thi
sisthedi f
fer
encebetweentheI
nit
ial
Cashoutl
ay(I
CO)andthepresentv
alueoft
he
i
nfl
owsdi scount
edatthecostofcapi
tali
.e.t
her
equi
redr
ateofret
urn.

NPV=DNCFTotal–I
CO

I
tfol
l
owst
hatf
orpr
ojectBNPVB=( 90.909+247.
9339+300.
5259+409.
8081)–1000
=$49.18
NPVA=$78.82

Ift
heNPVi sposi t
ivet heprojectshoul dbeacceptandi fnegativ
ethepr ojectshoul
dbe
rej
ect.Ifthet wopr ojectsar emut uallyexclusivethent heonewi thahi ghNPVshoul dbe
chosen.Ifpr ojectsAandBar emut uall
yinclusivewecanr ejectbot
hbutcannotaccept
both.Bothpr oj ect
sshoul dbeaccept ediftheyarei ndependentbecauset heyhavea
positi
v eNPV, butAmustbeaccept edandBr ejectediftheyar emut uall
yexclusi
ve.
RationalOfTheNPVMet hod
ANPVofzer osi gnif
iest hatthepr ojectcashflowsar eexact l
ysuffi
cienttopayt he
i
nvest edcapi t
al andt opr ovi
def ortheRequi redRat eofRet urn(RRR) .I
ftheNPVi s
positi
v ethent hecashf lowsgener allywillbemor et hant heRRR.Sincet hecostofdebit
i
sf i
xedt heext raaccr uessol elytotheshar eholders.Ifacompanyt akesazer oNPV

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page136
 Mi
neVal
uat
ionandEconomi
cs

proj
ect,
thentheposi
ti
onoftheshar
eholder
sremainsunchangedi.
e.thefi
rm gr
ows
l
argerbytheproj
ectbutt
hewealt
hofthesharehol
dersremainsunchanged.ANPVof
$78.
82increasest
hewealthoft
hesharehol
derby$78.82.

I
nternalRat
eOfRet urn(
IRR)
TheIRRisthediscountr
ate,
whi
chequatesthepr
esentv
alue
(PV)ofthecashfl
owsinthemut
ualcashfl
ows.

TheRat i
onalBehindIRR
Onceapr oj
ecthasgeneratedtherealI
RRe.g.at20%wehav ebeenabl
etopayof
fthe
costofboththedebtandequity,anysur
plusthatr
emainsmustaccr
uetothe
sharehol
dersonlybecausedebtholder
sgetaf i
xedrat
eofretur
nhencewemustaccept
proj
ectswhereIRR>RRR

I
RR=A+(
a/(
a+b)
)B–A
Wher
e:
A–alowerdiscountrate
B–ahigherdiscountrate
a–posi
ti
veNPVassoci atedwit
halowerdi
scountr
ateA
b–negati
veNPVassoci atedwi
thahi
gherdi
scountr
ateB

Asanexampl
e,f
orpr
ojectBat15%

Year NCFB PVIF DNCF CDCF

0 -
1000 1 -1000 -1000
1 100 0.8696 86.
957 -
913. 043
2 300 0.7561 226.843 -
686. 200
3 400 0.6575 263.006 -
423. 194
4 600 0.5718 343.052 -80.142

I
RR=0.1+( 49.18/(
49.
18+80. 14)
(0.
15–0.
1)
=11.
9%
Q:Gi
venthattheNPVofpr
ojectAat15%=-8.33whati
sthei
nter
nal
rat
eofr
etur
n?

I
RR=0. 1+( 78.82/(
78.82+8. 33)
)(0.
15–0. 1)
=0.1452
=14.52%
FortheRRRof10%t hepr oj
ectAwi l
lgener
ateasur
plusof4.
5%abov
etheRRR,
and
thusaccruestoshar
eholders.

Annulus
I
tisaseriesofequalpayment
smadeatfixedint
erv
alsf
oraspecifi
ednumberof
per
iodse.g.apromisetopay$1000/
yrf
or3y ear
sisa3yrannui
ty.Ther
ear
etwotypes

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page137
 Mi
neVal
uat
ionandEconomi
cs

ofannui
ti
es;
(
a)Annui
tyDue,ifpay
mentsar
emadeatt
hebegi
nni
ngoftheyearand
(
b)Ordi
naryAnnuit
ywher
epayment
saremadeatt
heendoftheyear.

TheFutur
eVal ueOfAnOrdinar
yAnnuity
Supposewedeposit$100attheendofeachyearf
or3year
sinasavi
ngsaccountt
hat
pays5%inter
estrat
eperannum, howmuchwillwehav
eattheendoft
he3y r
s?
Theprobl
em canbesetoutinatimeli
neasfoll
ows;

1 2 3

0 100 100 100

105

110.
25
315.
25

FV=[
100(
1.05)2+100(
1.05)1+100=315.
25

Fut
ureVal
ueI
nter
estFact
orAnnui
ty(
FVI
FA)

Thefutur
ev al
ueannuit
yof$1f oraperodofny
i earsatanint
erestrateofIi
sgivenby
n
FVIFA=( 1+i) –1
i
Thusfortheexampleabove;
FVIFA=( 05)3–1
1.
0.
05
=3.
1525
TheFutureValueOfAnAnnui tyDue
Ift
he$100pay mentshadbeenmadeatt hebegi
nningoftheyearthiswouldbean
annui
tydueandt hefut
urevaluecanbeshownbel ow
1 2 3

0 100 100 100

105

110.
25

115.
76
$331.01

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page138
 Mi
neVal
uat
ionandEconomi
cs

Thust
hef
utur
eval
ueoft
heannui
tyduewoul
dbe;

FV=[
100(1.
05)+100(
1.05)2+100(
1.05)3]
=$331.
01

Sincet hepaymentsoccurear l
ier
,moreint
eresti
salsopaidthustheFVofannui
tyduei
s
l
ar gerthanthatofanordinaryannuit
y.Togetthefut
urevalueofanannui
tydue,
we
compoundt heFVofanor di
naryannuit
ybyanextraoneper i
od.
Ther efore
FVofAnnui t
yDue=( AP)(FVIFA)(1+i)
=100(3.1525)(
1.05)
=$331.01
Wher e
AP–AnnualPayment

Q:Fi
ndt hefutureval
ueofanannuityof$12,
000,t
heamountsaredeposi
tedatt
he
begi
nningoft heyearfor6year
sandaninter
estr
ateof14%payabl
eattheendofeach
year
.
A:FV=( AP)(FVIFA)(
1+i )
=12,000x1. 14x8.535
=$116, 765.
90

FVIFACompoundi ngMor eThanOnceAYear

Wehav eseent hatwheni nterestrateiscompoundedmor ethanonceayear
,theFVof
$1wi ll
bef oundby
FV=PV( 1+i/m)nm
Similar
lythefut ur
ev alueofanannui tyof$1wheninterestrat
eiscompoundedmore
thanonceay earwi ll
bef oundby
FVIFA=PV( 1+im)nm –1
/
i
/m
Q:Findt hefuturev al
ueofanannui t
yof$3,000whichismadeatt heendofever
yyear
forthenext4y ears,whil
ei nterestrateis22%/y
r

A:FVI
FA=( 1+0. 22/4)4X4–1
0.
22/4
=24.6411
FV=(AP)(FVIFA)
=3,000X24. 64114
=$73,923.42

CompoundI
nter
estandAnnui
tyPr
obl
ems

1.Howmuchcanbei nvestednowat6.
25%f or5yearscompoundedto$600the
endofthatt
ime?
2.Whatisthei
nter
estpayabl
emonthl
yif$10,000isborr
owedat7.75%perannum

Zi
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nes–Nat
ionalDi
plomaModul
e Page139
 Mi
neVal
uat
ionandEconomi
cs

i
ftheint erestaddedmont hly?
3.Tohowmuchwoul d$100amountt oi n10yearsat6%perannum
(
i)I nter estaddedy earlyand
(ii
)I nterestaddedmont hl
y ?
4.Assumi ngt hatinterestoncapi tal i
s9%p. a.
,af l
eetofunder groundl ocomot iv
es
i
scost ing$15, 000ay eartomai nt ai
n.Wi lli
tbecheapert othem oper ati
ngf or
another5y earsort obuyanewf leetfor$50,000whi cht hesuppliershav e
guarant eedt omai nt ai
nf or$3, 000ay ear.Scrapv alueoft hef l
eet$2000( now)
5.Ami ningengi neerest imatest hatacer t
ainminewi l
lpayi tsfi
rstdividendof12%
onacapi tal of$2mi lli
onin5y ear st i
meandasi milardiv i
dendwi l
l bepai dfor
15years.Whati stheP. V.oft hesedi videndsallowingapur chaser13%perannum
onhisout layandr edeemi ngt hepur chasemoneyat6%.
6.Thepr esentv alueof$4, 000r ecei vedsomet i
mei nt hef utureis$654t odayusing
a10%i nterestr at
e.Howmanyy earsint hefuturewi l
lthemoneyber eceiv
ed?

PracticeQuizQuest
ions:PVandFVofaSingl
esum.
ReviewPr obl
ems
1.Howmuchmusty oudeposi
ttodayi
nabankaccountpay
ingi
nter
estcompounded
quarterl
y:

a.i
fyouwisht
ohave$10,
000attheendof3months,i
fthebankpays5.
0%APR?
Answer
:$9,
877
b.i
fyouwisht
ohave$50,
000attheendof24months,
ifthebankpay
s8.0%APR?
Answer
:$42,
675
c.i
fyouwisht
ohav
e$6,000attheendof12months,i
fthebankpays9.
0%APR?
Answer
:$5,
489

2.a.Whatr at
eofi nterest[
APR]ist hebankchar gingyouifyoubor
row$77, 650and
mustrepay
$80,000att heendof2quar ters,i
finterestiscompoundedquar ter
ly?
Answer:6.0%APR
b.Whatr ateofinterest[APR]i
st hebankchar gingyouifyouborr
ow$49, 000and
mustrepay
$50,
000att heendof3mont hs, i
finteresti
scompoundedmont hl
y?
Answer:8.0%APR

3.Howmuchmusty
oudeposi
ttodayi
nabankaccountpay
ingi
nter
estcompounded
mont
hly
:

a.i
fyouwi shtohave:
$10,000att
heendof1months,ift
hebankpays5.0%APR?
Answer:$9,959
b.i
fyouwi shtohave:£6,
000attheendof6months,i
fthebankpays9.0%APR?
Answer:£5,737
c.i
fyouwi shtohav
e:$12,000attheendof12months,i
fthebankpays6.0%APR?
Answer:$11,303
4.I
fint
erestiscompoundedquart
erl
y,howmuchwill
youhav ei
nabankaccount:

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page140
 Mi
neVal
uat
ionandEconomi
cs

a.ifyoudeposi
ttoday£8,
000attheendof3months,ift
hebankpays5.0%APR?
Answer:£8,
100
b.i
fyoudepositt
oday$10,000attheendof6months,i
fthebankpays9.0%APR?
Answer:$10,
455
c.i
fyoudepositt
oday¥80,
000att heendof12months,
ifthebankpays8.0%APR?
Answer:¥86,
595
d.i
fyoudepositt
oday$5,
000att heendof24months,i
fthebankpays5.0%APR?
Answer:$5,
522

5.I
fint
eresti
scompoundedmont
hly
,howmuchwi
l
lyouhav
einabankaccount
,

a.i
fyoudeposi
ttoday£8,
000att heendof3months,i
fthebankpays5.0%APR?
Answer
:£8,
100
b.i
fyoudeposi
ttoday$10,000attheendof6months,i
fthebankpays9.0%APR?
Answer
:$10,
459
c.i
fyoudeposi
ttoday¥80,000attheendof12months,i
fthebankpays8.0%APR?
Answer
:¥86,
640
d.i
fyoudeposi
ttoday£5,000attheendof24months,i
fthebankpays5.0%APR?
Answer
:£5,
525

6.Youbor
rowed$1,584andmustrepay$2,000i
nexact
ly4y
ear
sfr
om t
oday
.Int
erest
i
scompoundedannuall
y.
a.Whati
stheint
erestr
ate[
APR]oftheloan?

Answer6.
0%
b.Whateff
ect
iveannual
rat
e[EAR]ar
eyoupay
ing?
Answer6.
0%

7.Younowhav e$8,000inabankaccountinwhi chy oumadeonesingl

edeposi
t$8,
000
monthl
yof$148. 97exactl
y40yearsago.Interestiscompoundedmonthly.
a.Whatr ateofint
erest[
APR]isthebankpay i
ng?
Answer10.
0%
b.Whatef f
ecti
veannualr
ate[EAR]i sthebankpayi
ng?
Answer10.47%

Possi
blyNewPr
obl
ems.

8.Supposey oumakeani nv est

mentof$1, 000.Thisf
irstyearthei
nvest
mentr
etur
ns
12%,thesecondy eari
treturns6%, andthethi
rdyeari
nr et
urns8%.Howmuchwoul d
thi
sinvestmentbewor t
h, assumi ngnowi t
hdrawalsar
emade?
Answer :
1000*(1.
12)x( 1.
06)x(1.08)
=$1,282
9.Whyi s(1+i
)call
edani nterestfactor
?
Factori
ngtheexpr ession$10,000+10,000xi=10, 000x(1+i
)

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page141
 Mi
neVal
uat
ionandEconomi
cs

Thus(
1+i
)isani
nter
estf
act
or.

10.Supposey oumakeani nv
est
mentof$1,000.Thi
sfi
rsty
eartheinvestmentr
eturns
5%,thesecondyeari
tretur
nsi.Wri
teanexpressi
on,
usi
ngi,t
hatrepresent
sthefuture
val
ueoft hei
nvest
mentattheendoftwoyears.
Answer :
FV=1,000x(1.
05)x(1+i)

11.Aninvest
mentisworth$50,
000t
oday .Thisf
ir
sty
eart
heinv
estmentr
eturns9%,the
secondyeari
tretur
nsi.Writ
eanexpressionusi
ngit
hatr
epr
esent
stheori
ginalv
alueof
theinv
estment.
Answer:
PV=50,000÷[
(1.
09)x(1+i
)]

12.Supposey oumakeani nvest

mentof$A.Thi sfi
rsty
eart
hei
nvest
mentr
etur
ns10%,
thesecondyearitr
etur
ns16%, andt
het hi
rdyearinr
etur
ns2%.Howmuchwoul dt
his
i
nvestmentbewor t
h,assumingnowithdrawal
saremade?
Answer:
A*(1.
10)x(1.
16)x( 1.
02)

11.Supposeyoumakeaninvest
mentof$10,000.Thisfir
sty eart
heinvest
mentret
urns
15%, t
hesecondy
eari
tret
urns2%,andthethir
dy earinr
eturns10%.Howmuchwoul d
thi
sinvest
mentbewort
hattheendofthreeyears,assumingnowi thdr
awalsar
emade?
$12,903

12.Refert
otheabov
epr
obl
em.Whati
sthegeomet
ri
cav
erager
ateofr
etur
n?
8.
9%

Rev
iewPr
obl
ems

1.Supposeyouaret
ryi
ngtofindthepresentvalueoft wodif
ferentcashfl
ows.Oneis
$100twoperi
odsfr
om now, t
heothera$100f l
owt hreeperi
odsfrom now.Whichof
thef
oll
owi
ngis/ar
etrueaboutthediscountfactor
susedt ov al
uethecashfl
ows?

a.Thef
act
orfort
hefl
owthreeper
iodsawayi
sal
way
slesst
hant
hef
act
orf
ort
he
f
lowt
hati
srecei
vedtwoperi
odsfr
om now.

b.Thef
act
orfort
hefl
owthreeperi
odsawayisal
way
smor
ethant
hef
act
orf
ort
he
f
lowt
hati
srecei
vedtwoperi
odsfrom now.

c.Whet
heronef
act
ori
slar
gert
hant
heot
herwi
l
ldependont
hei
nter
estr
ate.

d.Si
ncethepay
mentsar
efort
hesameamount
,thef
act
orswi
l
lyi
eldpr
esentv
alues
t
hatar
ethesame.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page142
 Mi
neVal
uat
ionandEconomi
cs

e.Noneoft
heabov
est
atement
sar
etr
ue.

2. Whati
sthepresentval
ueofastr
eam of$2,
500semi
annual
pay
ment
srecei
vedat
t
heendofeachperiodfort
henext10year
s?TheAPRis6%.

a.37,
194

b.38,
310

c.35,
810

d.36,
885

3.Whatisthef
utur
evaluein10year
sof$1,
500pay ment
srecei
vedatt
heendofeach
y
earf
orthenext10years?Assumeanint
erestr
ateof8%.

a.$25,
260

b.$23,
470

c.$21,
730

d.$18,
395

e.$15,
000

4.Youaregi
ventheopti
onofrecei
ving$1,
000noworanannui
tyof$85permont
h
for12months.Whichoft
hef ol
l
owi ngi
scor
rect
?

a.Youcannotchoosebet
weent
het
wowi
thoutcomput
ingpr
esentv
alues.

b.Youcannotchoosebet
weent
het
wowi
thoutcomput
ingf
utur
eval
ues.

c.Youwi
l
lal
way
schooset
hel
umpsum pay
ment
.

d.Youwi
l
lal
way
schooset
heannui
ty.

e.Thechoi
cey
ouwoul
dmakewhencompar
ingt
hefut
urev
alueofeachwoul d
bet
hesameast
hechoi
cey
ouwouldmakewhencompar
ingpresentv
alues.

5. Youopenasav
ingsaccountt
hatpay
s4.
5%annual
l
y.Howmuchmusty
ou

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page143
 Mi
neVal
uat
ionandEconomi
cs

deposi
teachy
eari
nor
dert
ohav
e$50,
000f
ivey
ear
sfr
om now?

a.$8,
321

b.$9,
629

c.$8,
636

d.$9,
140

e.$6,
569

6.Youareconsider
inganinvestmentina6-y
earannui
ty.Attheendofeachyearfor
thenextsixy
earsyouwi l
lreceiv
ecashfl
owsof$90.Thei ni
ti
ali
nvestmenti
s
$414.30.Tothenearestpercent
,whatr
ateofret
urnareyouexpect
ingfr
om thi
s
inv
estment?(AnnualCompoundi ng)

a. 8%

b. 9%

c.12%

d.21%

e.10%

7. Youaresavi
ngupforadownpaymentonahouse.Youwi
ll
deposi
t$600a
monthfort
henext24monthsi
namoneymar ketf
und.Howmuchwi l
lyouhav
e
fory
ourdownpaymentin24monthsi
fthef
undearns10%APRcompounded
monthl
y?

a.$14,
480

b.$15,
870

c.$12,
930

d.$10,
560

e.$9,
890

8. Yourmortgagepay
menti
s$600permonth.Ther
eisexact
ly180payments
remai
ningonthemort
gage.Thei
nter
estrat
es8.0%,compoundedmonthl
y.

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page144
 Mi
neVal
uat
ionandEconomi
cs

Thefir
stpay
mentisdueinexact
lyonemont
h.Whati
sthebal
anceoft
hel
oan?
[
Balance=PVofremaini
ngpayments.
]

a.$62,
784

b.$77,
205

c.$63,
203

d.$82,
502

e.$85,
107

9. Yourmort
gagepay
menti
s$755permont
h.Iti
sa30-
yearmor
tgageat9.
0%
compoundedmont
hly
.Howmuchdidyouborr
ow?

a.$93,
800

b.$97,
200

c.$92,
500

d.$85,
100

e.$89,
400

Possi
blyNewPr
obl
ems.

10.Whati
sthev
alueoft
hef
oll
owi
ngsetofcashf
lowst
oday
? Thei
nter
estr
atei
s
8.5%.

YearCashFl
ow

0:-
$1,
000 1: $200 2: $400 3: $600 4: $800

a.$800

b.$571

Zi
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nes–Nat
ionalDi
plomaModul
e Page145
 Mi
neVal
uat
ionandEconomi
cs

c.$1072

d.$987

e.$520

11.Thepr
esentv
aluei
nter
estf
act
orofanannui
tyduef
or3y
ear
sat8%equal
s:
3
a.1/
(1.
08)

b.1/
(1.
24)
2
c.[
1+1/
(1.
08)+1/
(1.
08)]
2 3
d.[
1/(
1.08)+1/
(1.
08)+1/
(1.
08)]

e.Noneoft
heabov
e.

12. Whati
sthepresentv
alueof$2,
500semiannual
pay
ment
srecei
vedatt
he
begi
nni
ngofeachperi
odforthenext10y
ears?TheAPRi
s6%.

a.37,
194.
70

b.38,
309.
50

c.35,
809.
50

d.36,
884.
80

13.Yourmor t
gagepay
mentis$600permont h.Ther
eareexact
ly180pay
ment s
remaini
ngonthemort
gage.Theint
erestrat
es8.0%,compoundedmonthl
y.The
nextpaymenti
sdueimmediat
ely
.Whati sthebal
anceoft
heloan?[Hi
nt:Thi
sisan
annui
tydue.
]

a.$63,
203

b.$77,
205

c.$62,
784

d.$82,
502

e.$85,
107

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page146
 Mi
neVal
uat
ionandEconomi
cs

14.Yourmor t
gagepay
menti s$600permont h.Ther
eareexactl
y180payments
remaini
ngonthemortgage.Theint
erestrat
es8.0%,
compoundedmont hl
y.The
nextpaymenti
sduein15day s.Whatisthebal
anceoftheloan?[
Hint
:Assume30
dayspermonth.
]

a $62,
993

b $76,
949

c $62,
576

d $82,
228

e $84,
825

15.Thepresentv
aluei
nter
estf
act
orofanannual
ordi
nar
yannui
tyf
or3y
ear
sat8%
equals:
3
a.1/
(1.
08)

b.1/
(1.
24)
2
c.[
1+1/
(1.
08)+1/
(1.
08)]
2 3
d.[
1/(
1.08)+1/
(1.
08)+1/
(1.
08)]

e.Noneoft
heabov
e.

16.Thepresentv
aluei
nter
estf
act
orofasemi
annual
ordi
nar
yannui
tyf
or3y
ear
sat8%
equals:
2 3
a[
1/(
1.04)+1/
(1.
04)+1/
(1.
04)]
2 3 4 5 6
b.[
1/(
1.08)+1/
(1.
08)+1/
(1.
08)+1/
(1.
08)+1/
(1.
08)+1/
(1.
08)]
2 3+ 4 5 6
c.[
1/(
1.04)+1/
(1.
04)+1/
(1.
04) 1/
(1.
04)+1/
(1.
04)+1/
(1.
04)]
2 3
d.[
1/(
1.08)+1/
(1.
08)+1/
(1.
08)]

e.Noneoft
heabov
e.

17.Thef
utur
eval
uei
nter
estf
act
orofanor
dinar
yannui
tyf
or3y
ear
sat8%equal
s:

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page147
 Mi
neVal
uat
ionandEconomi
cs

3
a.(
1.08)

b.(
1.24)
2
c.[
1+(
1.08)+1.
08)]
2 3
d.[
(1.
08)+(
1.08)+(
1.08)]

e.Noneoft
heabov
e.

18. Supposeanannuit
ycost
s$40,
000andproducescashf
lowsof$10,
000ov
ereach
ofthefol
lowi
ngeighty
ears.Whati
sther
ateofret
urnontheannui
ty?

a.0%

b.10.
5%

c.18.
6%

d.25.
0%

e.50.
0%

Key
: 1.A 2.A 3.C 4.E 5.D 6.A 7.B 8.A 9.A 10.B

11.C 12.B 13.A 14.A 15.D 16.C 17.D 18.C

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page148
 Mi
neVal
uat
ionandEconomi
cs

Uni
t4:Fi
nanci
alAccount
ing

IncomeSt atementi saf inanci alst atementt hatshowst heamountofneti ncomeor

l
ossf oragi venaccount ingper iod.
Netl ossi sadecr easei nowner ’sequi tyr esul t
ingf rom unpr ofitabl eoper ati
ons.
NetI ncome=Rev enue–Expenses
Rev enuei sthepr iceofgoodssol dandser vicesr ender eddur ingagi v enper i
od.
Rev enuecomesi ntoexi stencewhent hegoodsar esoldorser v i
cesar er ender ed, even
thoughcashi snotcol l
ectedunt i
l somet imel ater.
Expensesar et hecostofgoodsandser v i
cesusedupi nthepr ocessofobt ai
ning
revenue.
Thei ncomest at ementf orat r
adi ngcompanyi sdi videdint ot hreesubsect i
ons;
(a)TheTr adingsect ion, wher et hegr osspr ofitiscal cul ated.
(b)Thepr of i
tandl osssect i
on, wher eexpensesandot heri ncomear e
deduct edoraddedr espect ivelyt ocal culatet henetpr ofitbef oret axation.
(c)Theappr oximat i
onsect i
on, wher et henetpr ofitisal locat edt odi vidends,
taxat i
on, orretainedr eserv es.
TheSt atementofOwner ’sEqui tysummar izeschangesi nowner ’
sequi tydur ingt he
account ingper i
od.I ncreasesi nowner ’sequi tyr esultfrom neti ncome, andf r
om
addi t
ional invest mentbyt heowner .
TheBal anceSheetsummar izest hepr oject edasset s,l
iabilit
ies, andnetwor t
hoft he
company .Itref lect st heposi ti
onoft hebusi nessatt heendoft hef irsty ear .
CashFl ow
Cashf l
owmaybedescr ibedi ngener alter msast hecashgener at edf rom oper at i
onsin
aspeci f
iedper iodoft ime( mont h, quarter ,ory ear )
.Forev aluat ionpur poses, itist henet
ofest imat edcashi nf l
owsandout flowsf oroper ations.Thecashf l
owdet ermi nat i
onfor
anev aluat ioncanbesi mpl erthanf oract ual on-goi ngoper ati
ons.I nt hecont extofa
financial evaluat ionf orami ne, cashf l
owmaybegener all
ydef inedbyt hef ollowi ng
comput ation.

Gr
ossRevenue

LessSel
li
ngandt
ranspor
tat
ioncost
s

=Netr
evenue

LessMi
neoper
ati
ngcost

=Gr
osspr
ofi
t

LessCapi
talcostal
lowance(
depr
eci
ati
on)

=I
ncomebef
oreexpl
orat
iondeduct
ions

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page149
 Mi
neVal
uat
ionandEconomi
cs

LessExpl
orat
ionanddevel
opmentdeduct
ions

=Deplet
ableincome
LessDeplet
ionall
owance

=Taxabl
eincome

LessMiningtaxes
LessCorporateincomet
axes

=Netpr
ofi
t

Pl
usCapi
talcostal
lowance(
depr
eci
ati
on)

Pl
usDepl
eti
onal
lowance

Pl
usExpl
orat
ionanddevel
opmentdeduct
ions

=CashFl
ow

Assets
Represent si
temst hatareownedorav ail
abl
etobeusedi nthev entur
eoperations.
Theser epresentev erythi
ngofv aluethati
sownedbyt hebusi ness.Asset
sare
categorizedascur rentorf i
xed.
CurrentAsset sincludecashandany thingel
sethatisexpect edt obeconvert
edi nt
o
cashorconsumedi ntheoperationofthebusinessdur i
ngtheper i
odof1yearorless.
Currentassetsar eof t
endomi nat edbyrecei
vablesormoneyt hatisowedt othenew
venturef r
om customer s.
FixedAsset saret hoset hataretangibl
eandwi l
l beusedoveral ongperi
odoft i
me.

Liabi
li
ti
es
Theseaccountsrepr
esenteveryt
hingowedtothecredit
ors.Someoftheseamount
s
maybeduewi t
hinayear(cur
rentli
abi
li
ti
es)
,andothersmaybel ong-
ter
m debt
s(l
ong-
termli
abil
i
ties)

ExamplesofFi
nanci
alStat
ements
Q5. 1f
rom t
hefol
l
owingtri
albal
anceofBWeb, ext
ract
edaft
eroneyear’
stradi
ng,
prepar
eatradi
ngandprofi
tandl
ossaccountandabalancesheetf
ortheyearended31
December2007

Tri
alBal
anceAsAt31
December2007

Debi
t Cr
edi
t

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page150
 Mi
neVal
uat
ionandEconomi
cs

$ $

Sal
es 18,
462

Pur
chases 14,
629

Sal
ari
es 2,
150

Mot
orExpenses 520

Rent 670

I
nsur
ance 111

Gener
alexpenses 105

Pr
emi
ses 1,
500

Mot
orVehi
cles 1,
200

Debt
ors 1,
950

Cr
edi
tor
s 1,
538

Cashatbank 1,
654

Cashi
nhand 40

Dr
awi
ngs 895

Capi
tal 5,
424

25,
424 25,
424

St
ockat31December2007was$2,
548

Answer
BWebb
Tr
adi
ng&Pr
ofi
t&LossAccountf
ort
heyearended31December2007

Sal
es $18,
462

Pur
chases $14,
629

LessCl
osi
ngSt
ock 2,
548  

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page151
 Mi
neVal
uat
ionandEconomi
cs

Costofgoodssol
d 12,
081

Gr
ossPr
ofi
t 6,
381

LessExpenses

Sal
ari
es 2,
150

Mot
orExpenses 520

Rent 670

I
nsur
ance 111

Gener
alexpenses 105 3,
556

NetPr
ofi
t $ 2,
825

BWebb
Bal
anceSheetAsAt31December2007
Fi
xedAsset
s

Pr
emi
ses
1,
500
Mot
ors 1,
200

2,
700

Cur
rentAsset
s

St
ock 2,
548

Debt
ors 1,
950

Bank 1,
654

Cash 40 6,
192

8,
892

Capi
tal

Bal
anceat1.
1.07 5,
424

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page152
 Mi
neVal
uat
ionandEconomi
cs

AddNetPr
ofi
t 2,
825

8,
249

LessDr
awi
ngs 895 7,
354

Cur
rentLi
abi
li
ti
es

Cr
edi
tor
s 1,
538

8,
892

Q5.2from t
hefol
l
owingtr
ialbal
anceofCWor t
h,ext
ract
edafteroneyear
’st
radi
ng,
pr
epareatradi
ngandprof
itandl
ossaccountandabalancesheetfort
heyearended31
December2007

Cr
edi
t
Debi
t
$ $

Sal
es 28,
794

Pur
chases 23,
803

Rent 854

Li
ght
ingandheat
ingexpenses 422

Sal
ari
esandwages 3,
164

I
nsur
ance 105

Bui
l
dings 50,
000

Fi
xtur
es 1,
000

Debt
ors 3,
166

Sundr
yExpenses 506

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page153
 Mi
neVal
uat
ionandEconomi
cs

Cr
edi
tor
s 1,
206

Cashatbank 3,
847

Dr
awi
ngs 2,
400

Mot
orVans 5,
500

Mot
orr
unni
ngexpenses 1,
133

Capi
tal 65,
900

95,
900 95,
900

Zi
mbabweSchoolofMi
nes–Nat
ionalDi
plomaModul
e Page154