• Surface Mining

    Surface mining involves the extraction of mineral commodity on the earth’s surface and in the open air.

  • Reserve Estimations

    A mineral deposit/deposit is zone that has concentration of minerals of economic interest.

  • Stripping Ratio

    Stripping ratio simply refers to the amount of waste handled in order to recover certain amount of ore.

Friday, 19 January 2018

GUIDELINE TO ASSESSING JORC COMPLIANCE REPORT (ORE RESERVE AND MINERAL RESOURCES) - ESTIMATION AND REPORTING OF ORE RESERVE

(Adapted from The JORC Code 2012 Edition, Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Reserve; download JORC Code Template)



The Joint Ore Reserve Committee (JORC) in their description of reporting exploration results recommend these generic assessment criteria that investors can use to determine the integrity of a JORC Compliance report.
There are four key areas highlighted in the assessment criteria that investors should observe. These are:

  1. Sampling Technique and data
  2. Reporting of Exploration Data
  3. Estimation and reporting of Mineral Resources
  4. Estimation and reporting of Ore Reserve

4. Estimation and reporting of Ore Reserve


  • Mineral Resource estimate for conversion to Ore Reserves
Details of the basis in which mineral resources were converted to ore reserve must be noted first and foremost.

  • Site visits
Similarly note comment on any site visits undertaken by the Competent Person and the outcome of those visits.

  • Study status
It is vital to note the studies undertaken and to what level that enabled the conversion of mineral resources to ore reserve. Any code that requires further studies must be indicated together what has been extensively studied to the pre-feasibility stage. These should be accompanied by mine plan that technical and economically viable.

  • Cut-off parameters
The basis of the cut-off grade(s) or quality parameters applied enabling the conversion must be noted.

  • Mining factors or assumptions
This is a key area in the assessment. The reports must be able to note the assumptions used either by application of appropriate factors of through the optimisation and preliminary mine design. Those assumptions should be justified as to why, how and to what degree.
Mining factor, dillution, optimum pit geometry, equipment selection, general infrastructural requirements and recovery factors should be all noted together with a sensitivity analysis possible scenarios.
Note also the geotechnical parameters used to define the optimum pit limits including the pit slopes, stope sizes and how it dictates the overall mine plan/design in turn its implication on the ore reserve. Any key assumptions made here must be noted.

  • Metallurgical factors or assumptions
Note also the key assumptions made on selecting the metallurgical processes including but not limited to the mill recovery, head grade, technology, mineralogy, process flow, plant layout and tailing, and recovery methods. In addition any pilot projects/test works undertaken to establish the aforementioned assumptions and it practicability, applicability and appropriateness. 

  • Environmental
The status of studies of potential environmental impacts of the mining and processing operation and and possible environmental management strategies.

  • Infrastructure
Noted established infrastructures within the permitted land tenure, and availability of development area, water, power, roads, transports etc and how these can be accessed with ease.

  • Costs
Note the imminent cost associating with above discussed aspects together with appropriate capital and operational cost estimates, how they were derived and any possible fees and payment due as a result of mine development and mining (eg. compensations, royalties, levy etc)

  • Revenue Factors
At to the end, it a business and its all about profit. The report should on a balanced manner note the revenue generation assumptions made and the basis as to why and how they were derived. This includes but not limited to the, head grade, recovery, commodity price, exchange rates, transportation mining and processing costs and net smelter return. The derivation of assumptions made of metal price(s), for the principal metals, minerals and by-products.

  • Market Assessment
It is vital to note the marketing aspect of the comodity including current supply and demand, possible future outlook of the market. 
  • Economic
Note the economic variables  used in the economic analysis necessary to produce the Net Present Value (NPV) and the source and confidence level of these economic inputs including estimated inflation, discount rate, etc. The economic analysis should always be accompanied by a sensitivity analysis accounting for both worse and best case scenario.

  • Social
Note any social obligations with key stakeholders of the project.

  • Other
Other noted should include possible impacts, risk assessment, safety management plans, legal and political environment, any existing agreements in place, unresolved issues. Such are necessary to avoid undue inconvenience (if) and create general awareness of the operational environment and inherent obligations. In addition, the competent person feels should indicate any issue that may unreasonably interfere with the progress of the operation. 

  • Classification and Audits or reviews
Importantly note the basis for the classification of the Ore Reserves into varying economic confidence categories and the basis of classification. Note any audits or reviews of Ore Reserve estimates.

  • Discussion of relative accuracy/ confidence
The relative accuracy and confidence level in the Ore Reserve estimate should be discussed by the competent person. the determination and procedures used and the ore reserve estimation methods used whether statistical (geostatistics), geometrical methods. Note compositing and sampling density used to derive the classification. If computer software were used, details of the software should be provided together with input parameters. 
In all the level of accuracy and the confidence in the classification should be stated by competent person and any modifying factors that may have a material impact on Ore Reserve viability should be acknowledged.

Read on: 



Wednesday, 17 January 2018

GUIDELINE TO ASSESSING JORC COMPLIANCE REPORT (ORE RESERVE AND MINERAL RESOURCES) - ESTIMATION AND REPORTING OF MINERAL RESOURCES

(Adapted from The JORC Code 2012 Edition, Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Reserve; download JORC Code Template)

The Joint Ore Reserve Committee (JORC) in their description of reporting exploration results recommend these generic assessment criteria that investors can use to determine the integrity of a JORC Compliance report.
There are four key areas highlighted in the assessment criteria that investors should observe. These are:

  1. Sampling Technique and data
  2. Reporting of Exploration Data
  3. Estimation and reporting of Mineral Resources
  4. Estimation and reporting of Ore Reserve

3. Estimation and reporting of Mineral Resources


  • Database integrity
It is important to note the integrity of the data presented and the necessary measures taken to ensure that data has not been corrupted. For instance handling errors, keying errors, and any error between collection and usage. In addition data validation procedures should be known.


  • Site visits
Competent person can not only/blindly prepare technical report of such nature only through the information fed. It is vital that site visits are undertaken by the competent person and the outcome of those visits highlighted. If none then its should be justified with credible evidence.


  • Geological interpretation
The technical report should indicate the level of geological confidence/uncertainty in the interpretation of deposit. It is also practical to state any assumptions made and given such shortfalls indicate clearly the limitations as to how and why and how they correlate to the nature of the data used.


  • Dimensions
The extent of the mineral resource must be explicitly defined on plan and cross sections detailing general outline of the orebody together with upper and lower limits.


  • Estimation and Modelling Techniques
This area boils down to the estimation and modelling technique. The nature and appropriateness and practicability of the estimation technique(s) applied and key assumptions applied. This includes but not limited the treatment of outliers (extreme grade values), mean values, and extent parameter and interpolation parameters. If modelling has been done using computer softwares, it is necessary to note the software product and input parameters. The model and estimate should capture mining production forecast and related and balanced scenario analysis. 


  • Moisture
It may be necessary to note the natural moisture content of the orebody and the methods in which it was determined.


  • Cut-off Parameters
An important aspect to note is the basis on which cut off grades and how quality parameters has been adopted. They should be reasonable and current.


  • Mining Factor or Assumptions
It is important to note the assumptions made regarding possible mining methods, pit layouts and where necessary indicate possible mining dilution.


  • Metallurgical factor of Assumptions

It is necessary to note assumptions regarding metallurgical amenability, for instance, plant layout, process flows, tailing and recovery.



  • Environmental Factors or Assumptions
Environmental management is always a challenge in mining and it is important to note assumptions made regarding possible waste and process residue disposal options. From mining and processing (above) mine tailing product may be known and such waste management programs/proposals should be noted.


  • Bulk density
Note the bulk density of the materials to be mine. It is important to note as to whether these values has been assumed or determined. The basis of assumption is provided (if assumed) or the method and procedure used to determine the bulk density is to be outlined. It is always practical to note the bulk density used (whether assumed/determined).


  • Classification
The main exercise of this step is the classification of the mineral resources into their different categories depending on the geological confidence level and the reliability of the classification.


  • Audits or Reviews
Note audits and reviews done on the Mineral Resource estimates.


  • Discussion of relative Accuracy/confidence
It is appropriate to include a statement declaring the relative accuracy of the classification. This adds confidence to the mineral resources and at the same time making key notes on assumptions, procedures, the manner in which data was obtained, analysed, compiled, presented and interpreted.

Read on: 

Tuesday, 16 January 2018

GUIDELINE TO ASSESSING JORC COMPLIANCE REPORT (ORE RESERVE AND MINERAL RESOURCES) - REPORTING OF EXPLORATION DATA

(Adapted from The JORC Code 2012 Edition, Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Reserve; download JORC Code Template)

In the previous post on "INVESTORS GUIDELINE TO ASSESSING JORC COMPLIANCE REPORT (ORE RESERVE AND MINERAL RESOURCES) - SAMPLING TECHNIQUE AND DATA", the key focus on assessment was on the nature and quality of sampling program adapted. 

The second key criteria in assessing JORC compliance technical reports of ore reserve and mineral resource is the exploration data itself. 

2. Reporting of Exploration Data

  • Mineral tenement and land tenure status

It is important to note the mineral tenement and inherent land tenure status. This includes but not limited to the type of tenement, reference name/number, location and ownership. One should also note any agreements or material issues that are/may be in place with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.


  • Geology and Exploration done by other parties

There should be geological detailed description of the deposit type, geological setting and type of mineralisation. Other prospecting and exploration work/appraisal done by other parties shall also be acknowledged.


  • Drill hole Information

A summary tabulation of exploration results of key drill hole information including but not limited to the coordinates (location), reduced level (RL) of drill collars, drill dip and azimuth, depth of drill holes and depth of interception. Any exclusions (if) should be noted and justified on the basis that the information is not material.


  • Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated in the technical report including assumptions used for metal equivalent values.


  • Relationship between mineralisation widths and intercept lengths

It is necessary to note the mineralisation widths and intercept lengths. These relationships are particularly important in the reporting of Exploration Results as it clearly correlated to the nature/size and shape of the deposit. Note also if the ore geometry is known with respect to the extent of mineralisation.


  • Diagrams

It is important to illustrate with appropriate  maps and sections drawn to scale.These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views indicating intercepts and possible ore geometry.


  • Balanced reporting

The reporting of results should be balanced to avoid confusion, hence both high and low grade should be reported as such may be necessary for blending and compositing.


  • Other substantive exploration data

Other meaningful and material exploration data should be reported including but not limited to: geological observations; geophysical survey results; geochemical survey results; bulk samples; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.


  • Further work

It is vital and practical that further work on appraisal of the exploration data is reported highlighting areas of possible expansion including the nature and scale of work.


Monday, 15 January 2018

GUIDELINES TO ASSESSING JORC COMPLIANCE REPORT (ORE RESERVE AND MINERAL RESOURCES) - SAMPLING TECHNIQUE AND DATA

(Adapted from The JORC Code 2012 Edition, Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Reserve; download JORC Code Template)

The Joint Ore Reserve Committee (JORC) in their description of reporting exploration results recommend these generic assessment criteria that investors can use to determine the integrity of a JORC Compliance report.

There are four key areas highlighted in the assessment criteria that investors should observe. These are:
  1. Sampling Technique and data
  2. Reporting of Exploration Data
  3. Estimation and reporting of Mineral Resources
  4. Estimation and reporting of Ore Reserve


1. Sampling Technique and data

  • Sampling technique
The sampling methods used must be explicitly defined with detials of sampling procedure including equipment/tools used.  Certian industry standards and varying sampling methods may be inherited however the emphasis is on the nature and quality of the sampling techniques employed and measures taken to ensure sample representivity

  • Drilling Techniques  & Drill Sample Recovery
In addition to sampling techniques, the  drill type used and details may be necessary. This includes but not limited to core recovery, handling, biaseness and measures used to optimise representativity of samples.

  • Logging
The report should indicate whether core and chip samples have been geologically and geotechnically logged, the qualitative/quantitative nature of the logs and the total length and percentage intersection.


  • Sub-sampling technique and sample preparation
It is necessary to note if core, whether cut or sawn and whether quarter, half or all core taken. For all sample types, note the nature, quality and appropriateness of the sample preparation technique. The quality control procedures adopted should also be noted for all sub-sampling stages to maximise representivity of samples. It is equally necessary to note measures taken to ensure that the sampling is representative of the in-situ materials collected, including for instance results for field duplicate/second-half sampling.


  • Quality of assay data and laboratory test
Note the quality of assay data and laboratory tests, the nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.


  • Verification of Sampling and assaying
It is important to note the verification of significant intersections by either independent or alternative company personnel. Assess documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols and discussion on any adjustment to assay data.


  • Location of data points
Note the location, accuracy and quality of surveys used to locate drill holes, trenches, mine workings and other locations used in Mineral Resource estimation and the survey grid and geodetic reference.


  • Data spacing and distribution
Note the data spacing for reporting of Exploration Results as to whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied and whether sample compositing has been applied. The spacing used should be able to compliment the confidence level established.


  • Orientation of Data in relation to geological structures
It is vital to note the orientation of data in relation to geological structure and whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known.


  • Sample security, Audits and Reviews
It is necessary to note the measures taken to ensure sample security and the results of any audits or reviews of sampling techniques and data.

___________________
Read on: 

Tuesday, 5 December 2017

ORE RESERVE ESTIMATION – WORKED EXAMPLE

As requested by some good readers of this blog for numerical examples of ore reserve estimation methods. These examples were put together to broaden the scope of classical (geometrical) methods presented in Classical Methods of Ore Reserve Estimation.

Keeping in mind that the main objective of ore reserve estimation is to as accurately as possible define the extent (size) and value (grade) of a mineral deposit. The two primary concerns confronted are summarized as:
1. Extent (Size) Determination and
2. Value Determination

Value and extent of a mineral deposit can be estimated using classical methods or geostatistical methods. The simple yet accurate ore reserve estimation technique used is classical methods. Classical methods employ simple geometric function and rules that are easily applied to simple uncomplicated orebodies.

In the following example, we will be working through the classical methods in determining the tonnage and grade of the Minetechpg Copper Deposit.

It is recommended that these examples are read in line with the post on Classical Methods of Ore ReserveEstimation.

Example

Consider this regular drill pattern spaced 30m by 20m of High Grade at Minetechpg Copper Deposit. There are nine drill holes ranging from DDH 1 to DDH 9. Assuming the surface is flat and faults/discontinuities terminate the continuity of the deposit in which the drill holes define the boundary of the orebody, determine as accurately as possible the tonnage and grade of the deposit using Polygon, Triangular and Sectional Methods of Ore Reserve Estimation. Test indicate that the tonnage factor of ore is 2.15t/m3.
Figure 1: Drill Plan and conceptual outline of the minetechpg orebody (green).

Drill Sections:
Section A-A’
Section B-B’
Section C-C’

Drilling Data

Ore Thickness and Grade:
Drill Hole ID
Thickness (m)
Grade (%)
DDH1
20
10
DDH2
40
6
DDH3
18
7
DDH4
16
9
DDH5
45
5
DDH6
16
6
DDH7
15
5
DDH8
28
7
DDH9
10
8

Solution 

1. Using Polygon Method

Procedure in determining the extent
To determine the extent of the deposit, polygons are developed around each sampling point to establish the area of influence which extends half the distance (d/2) of the sampling distance (d) (distance between two sample points) and in an equidistant manner.

Proceed by determining the surface are of the polygon by using geometric functions of the resulting polygon. The volume is determined by multiplying the surface area with the average depth.
Tonnage is then determined by multiplying the volume with the tonnage factor (specific gravity).
Figure 2: Orebody divided into four polygons (P1, P2, P3 and P4 – yellow outline)

Important note: For ease of calculations, polygons were developed around four drill holes but in actual scenarios, polygon must be constructed using set procedures around each drill holes.

1. Area = Area of Resulting polygon
2. Volume = Area x Average depth of drill hole
3. Tonnage = Volume x tonnage factor

Procedure in Determining the Value
Value is dependent on the ore grade and therefore the average grades of the polygons are then used to establish the grades of each polygon. The average grade of the deposit is determined by taking the arithmetic average of all grades of the individual polygons.

Information is tabulated in the table below for ease of calculation and interpretation.
Polygon ID
Area(Length x Width) (m2)
Volume (Area x  Thickness) (m3)
Tonnage (2.15m3/t) (tonnes)
Grade (%)
P1
20m x 30 m = 600
600x30.25 = 18150
18150*2.5= 39023
(10+6+9+5)/4 = 7.5
P2
600
17850
38377.5
6
P3
600
15600
33540
6.5
P4
600
14850
31927.5
6.5
Total
2400
66450
142867.5 tons
6.625%

The global resource calculated for the Minetechpg copper deposit using polygon methods is 142867.5 tons (extent/size) ore at an average grade of 6.625% (value) Copper.

     2. Using the Triangular Method

Procedure in determining the extent
Triangular method is and extended approach of the polygon method. To determine the extent of the deposit, triangles are developed such that sampling points form the apices of the triangles. The volume and tonnage of the deposit is then determined using simple geometrical equations.  

1. Area = Area of Resulting Triange
2. Volume = Area x Average depth of the apice drillholes
3. Tonnage = Volume x tonnage factor

Figure 3: Deposit divided into different Triangles

Procedure in Determining the extent
Triangular method is and extended approach of the polygon method. To determine the extent of the deposit, triangles are developed such that sampling points form the apices of the triangles. The volume and tonnage of the deposit is then determined using simple geometrical equations.  


1. Area = Area of Resulting Triange
2. Volume = Area x Average depth of the apice drillholes
3. Tonnage = Volume x tonnage factor

Determining the Value
The average grade of the deposit is determined by taking the arithmetic average of all grades of the individual triangles.

Information is tabulated in the table below for ease of calculation and interpretation.
Triangle ID
Area(1/2 Base x Height) (m2)
Volume (Area x  Thickness)
Tonnage (2.15m3/t) (Tonnes)
Grade (%)
T1
20 X 30 X 0.5 = 300
35 X 300 = 10500
10500 X 2.15 = 22575
(10+6+5)/3 =7
T2
300
8100
17415
8
T3
300
10100
21715
5.666667
T4
300
7400
15910
6.333333
T5
300
8900
19135
7
T6
300
5900
12685
7
T7
300
7100
15265
6.333333
T8
300
8300
17845
6.666667
Total
2400
66300
142545 Tonnes
6.75%

The global resource calculated for the Minetechpg copper deposit using triangular method is 142,545 tons (extent/size) ore at an average grade of 6.75% (value) Copper.

In conclusion, the tonnage and grade determined using the two methods is approximately the same. Note that this resource is generic and categorized as opposed of mineral resources and ore reserve definition.

Numerical examples of Sectional Methods will be update in the next post.