Mineral Deposit Evaluation

Mineral Deposit Evaluation

A practical approach

Alwyn E. Annels Department of Geology , University of Wales, Cardiff

CHAPMAN & HALL

London . New York Tokyo Melbourne Madras

UK USA JAPAN A USTRALIA INDIA

Chapman & Hall, 2-6 Boundary Row, London SEl 8HN Van Nostrand Reinhold, 115 5th Avenue, New York NY10003 Chapman & HallJapan, Thomson PublishingJapan, Hirakawacho Nemoto Building, 7F, 1-7-11 Hirakawa-cho, Chiyoda-ku, Tokyo 102 Chapman & Hall Australia, Thomas Nelson Australia, 102 Dodds Street, South Melbourne, Victoria 3205 Chapman & Hall India, R. Seshadri, 32 Second Main Road, CIT East, Madras 600 035 First edition 1991

1991 A.E. Annels Softcover reprint of the hardcover 1st edition 1991 Typeset in 10/12pt Bembo by Acorn Bookwork, Salisbury
ISBN 978-94-011-9716-8 ISBN 978-94-011-9714-4 (eBook) DOI 10.1007/978-94-011-9714-4

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the UK Copyright Designs and Patents Act, 1988, this publication may not be reproduced, stored, or transmitted, in any form or by any means, without the prior permission in writing of the publishers, or in the case of reprographic reproduction only in accordance with the terms of the licences issued by the Copyright Licensing Agency in the UK, or in accordance with the terms oflicences issued by the appropriate Reproduction Rights Organization outside the UK. Enquiries concerning reproduction outside the terms stated here should be sent to the publishers at the UK address printed on this page. The publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions that may be made.

British Library Cataloguing in Publication Data

Annels, Alwyn E. Mineral deposit evaluation: A practical approach. I. Title 553
ISBN 978-94-011-9716-8

Library ofCongress Cataloging-in-Publication Data

Annels, Alwyn E. Mineral deposit evaluation: a practical approach/Alwyn E. Annels. -1st ed. p. cm. Includes bibliographical references and index.
ISBN 978-94-011-9716-8

1. Mine valuation. TN272.A56 1991 622' .1-dc20

I. Title.

90-2454 CIP

To my wife Anita For her patience and tolerance during the writing oj this book.

Contents

PREFACE ACKNOWLEDGEMENTS 1 REPRESENTATION OF MINE DATA Introduction 1.1 Mine nomenclature 1.2 Subdivision of orebodies 1.3 Mine sections 1.4 Mine plans 1.5 Vertical longitudinal projections 1.6 Structure contour plans 1.7 Connolly diagrams 1.8 Dip contour maps 1.9 1.10 Structural unrolling - Palinspastic maps 1.11 2D and 3D block models 1.12 3D orebody projections 1.13 Histograms and cumulative frequency plots 1.14 Rose diagrams 1.15 Stereographic projections 1.16 Computer software

page

Xl XIV

1 1 1 4 6 9 14 17 21 22 24 27 27 28 28 29 29

MINE SAMPLING 2.1 2.2 2.3 2.4 Introduction Characterization of mineral deposits for sampling purposes Grade elevation Possible locations for underground sampling

43 43 44 47 47

Contents
2.5 2.6
2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 Channel sampling Chip sampling Grab sampling Percussion/blast-hole sampling Diamond drill sampling Prospect sampling Continuous sampling for open-pit operations Sampling of unconsolidated surficial deposits The application of copper-sensitive paints Grade analysis by fluorescence and spectrometric techniques Sampling theory Bulk sampling of gold ores

52
54

56
57 58 70 72 75 81 82 85

2.15 2.16
3

93 96 96 96 118
125 134 140 141 144 144 151 158

ORE-RESERVES BY 'CLASSICAL METHODS' 3.1 3.2 Introduction Classification of reserves and resources Determination of potentially economic intersections Mine/deposit reserves Statistical estimators of grade Ore-reserves by panel/section methods (underground operations) are reserves by triangulation are reserves by polygons are reserves by block matrices Contour methods Inverse distance weighting methods (IDW) Orebody modelling using IDW methods USBM/USGS Classification of Resources and Reserves APE a Classification of Reserves AIMM/ AMIC Classification of Resources and Reserves Coal Resources and Reserves Ore reserve calculation - worked example Program listing for SGORE

3.3
3.4 3.5 3.6 3.7 3.8

103

3.9
3.10 3.11

3.12

Appendix 3.1 Appendix 3.2 Appendix 3.3 Appendix 3.4 Appendix 3.5 Appendix 3.6 4

160
163 164

165 168 171

175 175 175 178

GEOSTATISTICAL ORE-RESERVE ESTIMATION 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 Introduction The application of geostatistics The theory of regionalized variables Regularization and ore body subdivision Production of the semi-variogram Semi-variogram models Semi-variogram phenomena in the spherical scheme Model fitting in the spherical scheme
V111

182
184 187

193 196

Contents
4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 ID regularization (spherical scheme) Block reserve estimates by kriging Global reserve evaluation by kriging Grade-tonnage curve Kriging variances and ore-reserve classification Extension variances in the spherical scheme Volume-variance relationship Indicator kriging (IK) Determination of confidence limits for log-transformed data Worked example - de Wijsian scheme Mathematical basis of point kriging Mathematical basis of block kriging Extension variance graphs and tables for the spherical scheme 202 204 206 210 211 212 218 221 225 226 228 229 232

Appendix 4.1 Appendix 4.2 Appendix 4.3 Appendix 4.4 Appendix 4.5 5

DESIGN AND EVALUATION OF OPEN-PIT OPERATIONS 5.1 5.2 5.3 5.4 Introduction Design of open-pit operations Evaluation of open-pit operations Economic optimization of pit designs

246 246 246 277 292

FINANCING AND FINANCIAL EVALUATION OF MINING PROJECTS E.G. Hellewell 6.1 6.2 6.3 6.4 6.5 Introduction Financial aspects unique to mining projects Capitalization of mining projects Financial model of a mining project Financial evaluation techniques

306 306 307 308 311 314 323 323 323 342 351 351 351 356 361

GRADE CONTROL 7.1 7.2 7.3 Introduction Open-pit operations Underground operations

ORE-EV ALUA TION CASE HISTORIES 8.1 8.2 8.3 8.4 Introduction Case history - White Pine Copper Mine, Michigan, USA Case history - Evaluation of the J-M Pt-Pd Reef, Stillwater, Montana Case history - East Ore Zone, Teck-Corona Gold Mine, Hemlo Canada
IX

Contents
8.5 8.6 8.7 8.8 8.9 8.10 Case history - opencast coal mining in South Wales (R. MacCallumBritish Coal) Case history - Boulby Potash Mine, Cleveland, UK Case history - exploration and evaluation of a glacial sand and gravel deposit (P. Brewer and P. Morse - Tarmac Roadstone, Northwest Limited) Case history - limestone aggregates - The Tytherington Limestone Quarries, ARC Ltd Cement - Cement Quality Limestones at Los Cedros, Venezuela (Blue Circle Industries PLC) Case history - Navan Zn-Pb Mine, Eire (Tara Mines Ltd) 364 380 394 399 412 420 433

INDEX

Preface

Although aspects of mineral deposit evaluation are covered in such texts as McKinstry (1948), Peters (1978), Reedman (1979) and Barnes (1980), no widely available in-depth treatment of the subject has been presented. It is thus the intention of the present book to produce a text which is suitable for both undergraduate and postgraduate students of mining geology and mining engineering and which, at the same time, is of use to those already following a professional career in the mining industry. An attempt has been made to present the material in such a way as to be intelligible to the average geologist, or engineer, who is perhaps daunted by the more mathematical approach to the subject of orereserves found in more specialist books and papers. Although most of the theory in this book is written using metric units, individual case histories are described using the units employed at each mine at the time of writing. The following chapters will thus examine the role of the mining geologist in the sampling of mineral deposits and in the calculation of mineral inventories and mineable reserves by both 'classical' and geostatistical methods. The techniques available for this purpose will be examined and actual case-history examples of their use presented. It is essential that the geologist in the mining industry has a full understanding of the

advantages and disadvantages of each technique so that a judgement can be made as to their applicability to a particular deposit and the mining method proposed or used. Too often, a lack of this expertise results in the ore-reserve calculation being undertaken at head-office or, indeed, by the survey department on the mine, and being treated as a 'number crunching' or geometric exercise divorced from geology. It is essential that mine ore-reserves are calculated at the mine by those geologists who are most closely associated with the local geology and who are thus best able to influence and/or constrain the calculation. Where the reserves are determined by computerized techniques it is particularly important that they understand the algorithm used and not be kept in the dark as to exactly how each block of ground is valued. Geologists are not there to be merely keyboard operators for they must be in a position to assess whether the results being produced are meaningful and also be able to modify various user specifications to produce the desired result. Other fields in which mining geologists will play an important, if not dominant and essential role, are in (a) metallurgical test sampling, where they must ensure that the samples sent for analysis and pilot-plant testing are representative of the ore (plus expected dilution) to be mined in

Preface
different areas of the deposit; (b) in grade control, where they must ensure that mining is confined to the ore-zone and that dilution is kept within acceptable limits; (c) in the representation of mine geological and assay data, and (d) in the assessment of the economic viability of a deposit and proposed mining method during mine feasibility and design studies. During pre-production and production phases they will be heavily involved in assessing the economic impact of the hydrogeology of the mine catchment area and will thus be involved with aspects of mine and aquifer drainage. They will also be heavily involved with geotechnical surveys and rock mechanics and strata-control problems for these will have considerable influence on mine viability. Environmental impact studies and the location of plant sites, tailings dams, etc. will be an additional call on the expertise of the mining geologist. In order to face the demands outlined above, mining geologists need to have a high level of technical competence, especially in the fields of ore-deposit geology, computing and geostatistics and also need to possess a working knowledge of mining methods applicable to different types of orebody/mineral deposit. Over and above these technical attributes, a wide range of abilities are required which are listed below. (1) The ability to communicate with, and transmit ideas to, both professional and production personnel on the mine. (2) Although a strong educational base in geology and mining science is essential, they must have a good deal of of initiative and the ability to think logically. Having made an interpretation or decision on geological grounds, they must be able to assess how this will effect the day-to-day operation of the mine and whether the proposed course of action is feasible, practical and cost effective. (3) They must be decisive and not afraid of making mistakes. When these are made, however, it is essential that an assessment is made of what went wrong for future reference.
XlI

Too often geologists are criticized for 'sitting on the fence' and presenting alternative explanations or possibilities. Hard-nosed miners are not interested in philosophical analyses of the situation, but require clear guidance as to what their next move should be. New mine geologists face a particular dilemma for they may be asked to predict what is happening in areas to which there is no access or for which there is little or no geological information. Very often their understanding of the nature, origin and geological controls of the deposit are limited and they feel that they are being asked to 'crystal-ball gaze'. The longer they have worked on a particular mine the greater is the 'feeling' they have for it and the more likely it is that an educated guess will prove correct. There is no substitute for experience. (4) They must be able to balance the return against the cost of collecting data. For example, the maximum account of information must be gleaned from drilling programmes which should include not only grade and thickness data, but also information pertinent to the hydrogeology of the mine; geotechnical data which may assist in assessing the amount of ore dilution and whether ground control problems may occur; structural and lithological information which may help in the interpretation of the factors controlling mineralization; and finally, mineralogical data which may have relevance in the fields of ore genesis and mineral processing. (5) They must show a high degree of patience with mine personnel and with the operation itself for, although it may appear obvious what should be done to improve existing procedures, techniques, etc., they must accept that, by their very nature, mining operations are slow to react. A reasoned case should be presented to justify the changes proposed without being excessively forceful. Eventually, if the suggestions are practicable and involve a significant cost saving, they will be accepted and implemented. (6) They must learn to deal with miners, mine captains and mining engineers to gain their respect and confidence and to understand their

Preface
needslrequirements and the limitations placed on them by the mining method, ground conditions and by the equipment available to them. This is essential for a good working relationship and in this wayan active geological department can ensure the success of a mining operation. Failures have occurred in the past because miners have not accepted the need for close geological control or because the geologists have failed to establish a practical working relationship with them. (7) They must accept that there is much to learn from experienced miners and other members of the geology and engineering departments. In this way they will become invaluable members of the team. (8) The ability to develop a sense of self preservation in the work environment, not just in personal relationships, but also in awareness of personal safety and the safety of others. An awareness of the inherent dangers in the mine is essential and of the need to recognize the tell-tale signs of impending danger. It is important that they ensure that their assistants are working in a safe manner and in a safe working environment. (9) New geologists must realize that, at an early stage, they will have to prove their worth, as credibility is established with the mine management through experience. This will take time and they should not become disheartened if initially there is a reluctance to respond to suggestions. (10) The ability to write concise technical reports with the minimum of geological jargon. These should be tailored to be intelligible to the person(s) who will have to act on the information and thus they must be unambiguous. Those geologists who takes on board the above suggestions and who develop a working knowledge of the techniques described in this book will become an invaluable asset to their employers. Cardiff, Wales REFERENCES
Barnes, M. P. (1980) Computer-assisted Mineral Appraisal and Feasibility, Society of Mining Engineers of AIMM and Petroleum Engineers Inc., 167 pp. McKinstry, H. E. (1948) Mining Geology, PrenticeHall, New Jersey, 680 pp. Peters, W. C. (1978) Exploration and Mining Geology, John Wiley, New York, 696 pp. Reedman, J. H. (1979) Techniques in Mineral Exploration, Applied Science, London.

Alwyn E. Annels

X111

Acknowledgements

The author would like to acknowledge the help given by his colleagues in the mining industry who have willingly provided case history material or who have given practical advice and moral support during the writing of this book. In particular he would like to thank the following people and Companies. P.e. Atherley, Horseshoe Gold Mine Project, Barrack Mine Management Pty Ltd. J.H. Ashton, Tara Mines Ltd. J.e. Balla, ASARCO Incorporated, Northwest Exploration Division. W.L. Barrett, Tarmac Quarry Products Ltd. R.A . Birch, Hepworth Minerals and Chemicals Ltd. R Bird, Mole Engineering Pty Ltd. E .B . Boakye, Dunkwa Goldfields Ltd. D . Brame, Newmont Australia Ltd. P. Brewer, Tarmac Roadstone Ltd . R Corben, Surpac Mining Systems Pty Ltd. S. Czehura, Montana Resources Ltd. J. Davis, University of Wales, Cardiff. J. Forkes, RTZ Technical Services Ltd. F. Foster, Golden Sunlight Mines Inc. P. Fox, Fox Geological Consultants Ltd. RA. Fox, RMC Group Pic. R Haldane, ZCCM Ltd. T. S. Hayes, US Geological Survey .

E.G. Hellewell, University of Wales, Cardiff. R Holmes, Cleveland Potash Ltd. D. Hopkins, Tarmac Quarry Products Ltd. J. T. Hunt, Cleveland Potash Ltd. RH. Jones, Blue Circle Cement Technical Services Division. S.A. Lambert, Horseshoe Gold Mine Project, Barrack Mine Management Pty Ltd. L. T. Lynott, Scitec Corporation. J. Luchini, ASARCO Incorporated, Northwestern Mining Department. R. MacCallum, Opencast Executive, British Coal Corporation. J.F. McOuat, Watts, Griffis and McOuat Ltd. e.J. Morrissey, Riofinex North Ltd. P.W. Morse, Tarmac Roadstone Ltd. A.E. Mullan, Datamine International. R Naish, ZCCM Ltd. J.P. Odgers, The Charles Machine Works, Inc. (Ditch Witch) . A . Peacock, ICI Tracero, ICI Chemicals and Polymers Ltd. J.H. Reedman,J.H. Reedman and Associates Ltd . D.1. Roberts, ARC Ltd. A.G. Royle, University of Leeds. P.F. Saxton , Mascot Gold Mines Ltd. R.W. Seas or, Copper Range Company Ltd. S. Schenk, Pegasus Gold Corporation. G.J. Sharp , Riofinex North Ltd.

Acknowledgements
W.M. Snoddy, Montana Tunnels Mining Inc. G.M. Steed, University of Wales, Cardiff. J. Tweedie, GeoMEM Software. R. Whittle, Whittle Programming Pty Ltd. R.W. Vian, Stillwater Mining Company. The author gratefully acknowledges the help given by Liesbeth Diaz in the word-processing of this book. Some diagrams in Chapter 4 were also produced by Margaret Millen. Both are colleagues in the Geology Department at the University of Wales, Cardiff. In particular the author would like to apologize to his academic colleagues and to his wife for being overly preoccupied during the gestation period of this book. Material for this book was collected whilst on a study tour of North America which was partly financed by an award from the Institution of Mining and Metallurgy, London (G. Vernon Hobson Bequest).

xv