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Adjusting a Mine Cost

Service Model

A Note About MSOPIT Compatibility
• Mine Cost Service Expressed Mining
Costs as Costs Per tonne of Ore
• MSOPIT asks for Mining Costs per
tonne of what ever material you are
in the cell for
– Can require some interesting twists
– Example difference between 1:1 SR
mining a 2:1 SR mining is the cost of
waste mining

000 tonnes per day of ore at a 1:1 stripping ratio .An Example Model This is a 2001 edition for 20.

So Where Did it Come From? This is their assumed salaried staff This is their cost table with benefits Multiply number of people by their salary and divide by tonnage and you have it. .

Clerks. Supervisors. And accountants can do a lot of Work out of Fairbanks and fly in when Foremen. Secretaries I Needed (I’ll keep their staffing) Assume will be 2 weeks on 2 weeks off so I Need 2 sets. Geologists. their technicians and Personnel managers.So I Want to Adapt It – How? Start by working up your personn table I’m going to assume the manager And Superintendent are in Ruby (1 of each) I’m going to assume my Engineers. Security – this is a gold mine! I want at least 5 With 2 weeks off 2 weeks on 10. .

12 per tonne (up a notch from MCS at $0.31) .I’ll Go to My Handy Dandy Spreadsheet $1.

136.600.00 $ 99.853.03168 $ 327.800.71 50.40039 $ 97.00 $ 76.44894 $ 185.798.642.71 $41.00 $ 137.347.653.45 48.998.700.856.242.08 41.500.384.03 43.700.53 $57.22 $50.95 47.2058 $ 96.77663 $ 206.41 50.58 76.22 75.52 60.037.00 $ 147.313.337.53 29.00 $ 113.847.58 $58.47371 $ 161.056.94907 $ 143.28 $46.08 $52.00 $ 55.23499 $ 167.116.65149 $ 151.45 $56.28303 $ 122.800.600.200.00 $ 108.258.658.63913 $ 195.500.52 $51.450.Where Did You Get Those Salaries and Benefits? Mine Manager Superintendent Foreman Engineer Geologist Supervisor Technician Accountant Clerk Personnel Manager Secretary Purchasing Agent Direct Pay Cost $ 254.684.613.00 $ 54.08 39.616.00 Total Total Total Fringe Burden Annual Cost % Cost $73.750.700.95532 $ 150.95 $49.28 52.00 $ 93.00 $ 129.00 $ 100.336.03 $53.200.41 From my wages and benefits spreadsheet .08 $41.700.

– That means waste mining would incur none of these costs.Now What About MSOPIT Compatibility • Notice that I charged all salaried costs to the ore. REALLY!!!? • When a cost is not directly linked to something you can get lots of accounting arguments – I could go the easy way and charge all tonnes equally – I could argue that I will likely be a lot more fussy with geology and engineering around the ore grade control – You may have to decide • My rationale – since I mine ore and waste at the same time delineating differences and handling of one is vital to the other • I’m going equal division – 56 cents per tonne toward both ore and waste mining cost .

You Can Well Imagine I’m Going to Do Similar to Get My Labor Cost Rotary drills – 5 operators And 5 machines (obviously One shift for drilling) Shovel Operators 6 With 2 shovels – obviously They are doing 3 shifts Trucks 8 with 21 drivers (obviously assuming 1 dow And 3 shifts) 12 equipment items and 16 Operators. Most on 1 shift bit On 2nd .

Sizing Up My Crew • Suppose I need 3 sets of 13 trucks and 1 loader – 2 shifts 26 drivers – But 2 weeks on 2 weeks off 52 drivers – 12 Shovel operators by same logic • Suppose I need 6 drillers and 3 helpers on one shift – 2 sets implies 12 drillers and 6 helpers. .

Some General Scaling • Equipment does things like maintain roads and deliver supplies – I won’t always need water trucks but probably snow plows instead – Since my haul distances are over twice as big I need twice the people • 16 leads to 32 for my case 2 weeks off 2 on means 2 crews • 64 operators • Utility Operators – I’ll need a big light network because of all the dark hours – Double their crew 3 leads to 6 – 2 weeks on means 2 crews 12 people .

More Scaling • My equipment fleet is about double theirs – Double mechanics 17 leads to 34 – 2 crews leads to 68 • I won’t quite double the laborer support – Go with 100 .

88/tonne) .Spreadsheet My Manning Table Came out to a whopping $4.59/tonne (quite a switch up from $0.

– But what if costs are different? . • If all costs for mining ore and waste are the same I could divide by 2 – just like I did with indirect costs.Now I’m Back to Compatibility • I just charged everything to ore.

Suppose • My cost to haul to the gyratory crusher by the mill and dump in is $2. equipment operation and fuel – One approach is to pull out the part of the labor associated with trucking and two dozers – Some may want to try to split road maintenance crews too (since it is an indirect cost one could fight – I’ll split even) .27/tonne) • Of course these costs involve both labor.95/tonne (and $0.31 to load) – Also at the dump I have to employ 2 dozers to level and spread material (0.45/tonne (and $0.31 to load) – your FPC truck study should be able to deliver numbers • My distance to the dump is greater and a trip costs $2.

– The Cable Shovel Costs used in FPC need to be right for the operator and the cost of electricity . – Ie a driver cost $81.451.000 per year in the wage and benefit spreadsheet and works 1.610 hours the cost per hour in FPC should be $50.000 Pull out $370.Adjustments • • • • Pull out my truck operators $ • Warning – The labor cost per hour for a truck driver in FPC needs to be the same as the cost of the labor I removed.000 in wages and benefits – Divided by ore and waste tonnage $1.31/hr • You might be talking to Gage and Nick about this.000 for 4 dozer operators Pull out the Shovel Operators $1.000 Leaves $24.

56/tonne – Labor (part) $1.31/tonne loading – $5.56/tonne – Labor (part) $1.18/tonne • Waste – Salaried $0.45/tonne (there will be a cost to recover ore for processing but that will be a processing charge) – $0.86/tonne – Trucking $2.So Where Am I At So Far? • Ore – Salaried $0.86/tonne – Trucking $2.27/tonne – $5.95/tonne – Loading $0.95/tonne .31/tonne – Leveling and Spreading $0.

warehouses and offices I also have an extensive light system in my mine .23/tonne. t leaves Diesel Fuel and Electricity Obviously I won’t do diesel fuel for trucks Dylan knows the cost/kwh for electricity I have electricity for my shops.Now for Supply st of this stuff is right off of Kyles blasting supplies cost – Kyle said his non-labor b t was $2.

6 kwh/cubic yard of loose material – Given I know my loose volume of rock that will be easy • Pit Lights and Warehouses will require me to do a side plan and estimate – Don’t you hate it when extra work shows up – I’ll probably want to add 10% to my electric use for little things I missed .I may need to do some research • I could get the cable shovel electric from the rule of thumb – 0.

Diesel Fuel • Some rules of thumb – a big road grader can maintain about 4 to 6 miles of haul roads during a 40 hour work week • You could try itemizing dozers. trucks etc or you could take MCS numbers • For blasting agent trucks you could talk to Kyle • For water trucks you could probably assume that water trucks and snow-plows are alternates and needed in the same amount as the road graders • You can usually get fuel consumption from the manufacturer .

Sundries • I may want to just scale from the $0.22/tonne in the MCS model – Suppose the ratio for everything else was 3 times higher than the old cost model – I just make the sundries $0.66/tonne .

.Observations • Some parts of the cost estimate are clearly better than others • If there is an area where your numbers are rather flakey – How big a percentage of the cost does it appear to be? (1% maybe don’t mess with it) – 30% maybe you need to inform the instructor of the need to more closely study something out.