5
The Stope Grade Factor is applied to the total cost per
tonne (in this example $103 &$126.90) to determine the
COV to be applied to the Neat Line stope ($113.30 and
$139.59).
The break even COV does not reflect all costs associ-
ated with mining the stope. It does not include any cost to
develop access to the stope, costs for equipment replace-
ment, or any margin. This is truly “recreational mining”
and provides no advantage to the owner except to keep the
mill fed and the lights on.
The planning COV includes all operating and stope
specific sustaining capital costs, an allowance for other
costs, and a minimum margin for the owner. For mine
planning and estimating (study) purposes, we recommend
that the “Planning COV” be the starting point.
At the beginning of the planning cycle, the planning
model should be interrogated (tabulation and 3D image)
at each of these COV’s to allow the planners to have an
understanding of grade distribution, geometry of the eco-
nomic and marginal portions of the deposit and identify
zones of potential low grade and waste pillars that could
influence mine design.
As planning progresses, it may become desirable to
include material of lower grade than the planning COV
for a variety of reasons, but the starting point should always
be to cover all costs and show a reasonable margin for the
owner.
Optimization of the mine plan may indicate that a
higher, or variable COV will yield a more attractive net
present value or internal rate of return, but the base case
should always be the planning COV.
MINEABLE STOPE OPTIMIZER (MSO)
SOFTWARE
Current practice in most applications is to use MSO soft-
ware, in conjunction with 3D mine planning software to
develop stope designs and production plans. Effective use
of the MSO, as with any software, requires that the user
understand its limitations, provides valid input data, and
critically analyzes the results.
Simplistically, MSO will use input values for stope
variables including:
• COV of the neat line stope ($139.59 in the example
above).
• Stope dimensions.
• Minimum mining width.
• Stope orientation.
• Dilution parameters.
• Other detailed design parameters.
The MSO will interrogate the planning model, using
the input values, and generate finished stope solids that
satisfy the user-specified attributes, and report mineable
tonnes, grade, and other items that can be used in produc-
tion planning and scheduling.
The MSO report is for neat line stope tonnes, which
include internal dilution, but not external, or unplanned
dilution. Stope dilution and recovery factors must be
applied to obtain the final production forecast.
For the purposes of mine plan and production scenario
optimization, MSO allows the user to quickly consider a
range of COVs to support evaluation of alternate produc-
tion and scheduling scenarios.
CONCLUSION
Selection of the correct COV is critical to the ultimate
success of a mining project. During the life of a mining
project, economic and operational factors often change,
necessitating the revision of the COV used in planning for
future work.
It is critical that the engineer consider all appropri-
ate costs and operational factors when recommending the
COV for a proposed or existing mining project.
The methods presented in this paper are straight-
forward and allow the engineer to quickly and effectively
determine appropriate COV for the project.
REFERENCES
[1] Rendu, Jean-Michel (2008), “An Introduction to
Cut-Off Grade Estimation,” Englewood CO, Society
for Mining, Metallurgy, and Exploration.
[2] Lane, Kenneth (1988), “The Economic Definition of
Ore,” London, Mining Journal Books.
[3] Ganguli, R, Dagdelen, K, and Grygiel, E, (2011)
“SME Mining Engineering Handbook, Third
Edition,” Chapter 9.10, Society for Mining,
Metallurgy, and Exploration Darling, Peter, Editor.
[4] Poniewierski, J, and Hall, B (2016). “Break-even is
Broken,” AusIMM Bulletin, 6/17/2016.
The Stope Grade Factor is applied to the total cost per
tonne (in this example $103 &$126.90) to determine the
COV to be applied to the Neat Line stope ($113.30 and
$139.59).
The break even COV does not reflect all costs associ-
ated with mining the stope. It does not include any cost to
develop access to the stope, costs for equipment replace-
ment, or any margin. This is truly “recreational mining”
and provides no advantage to the owner except to keep the
mill fed and the lights on.
The planning COV includes all operating and stope
specific sustaining capital costs, an allowance for other
costs, and a minimum margin for the owner. For mine
planning and estimating (study) purposes, we recommend
that the “Planning COV” be the starting point.
At the beginning of the planning cycle, the planning
model should be interrogated (tabulation and 3D image)
at each of these COV’s to allow the planners to have an
understanding of grade distribution, geometry of the eco-
nomic and marginal portions of the deposit and identify
zones of potential low grade and waste pillars that could
influence mine design.
As planning progresses, it may become desirable to
include material of lower grade than the planning COV
for a variety of reasons, but the starting point should always
be to cover all costs and show a reasonable margin for the
owner.
Optimization of the mine plan may indicate that a
higher, or variable COV will yield a more attractive net
present value or internal rate of return, but the base case
should always be the planning COV.
MINEABLE STOPE OPTIMIZER (MSO)
SOFTWARE
Current practice in most applications is to use MSO soft-
ware, in conjunction with 3D mine planning software to
develop stope designs and production plans. Effective use
of the MSO, as with any software, requires that the user
understand its limitations, provides valid input data, and
critically analyzes the results.
Simplistically, MSO will use input values for stope
variables including:
• COV of the neat line stope ($139.59 in the example
above).
• Stope dimensions.
• Minimum mining width.
• Stope orientation.
• Dilution parameters.
• Other detailed design parameters.
The MSO will interrogate the planning model, using
the input values, and generate finished stope solids that
satisfy the user-specified attributes, and report mineable
tonnes, grade, and other items that can be used in produc-
tion planning and scheduling.
The MSO report is for neat line stope tonnes, which
include internal dilution, but not external, or unplanned
dilution. Stope dilution and recovery factors must be
applied to obtain the final production forecast.
For the purposes of mine plan and production scenario
optimization, MSO allows the user to quickly consider a
range of COVs to support evaluation of alternate produc-
tion and scheduling scenarios.
CONCLUSION
Selection of the correct COV is critical to the ultimate
success of a mining project. During the life of a mining
project, economic and operational factors often change,
necessitating the revision of the COV used in planning for
future work.
It is critical that the engineer consider all appropri-
ate costs and operational factors when recommending the
COV for a proposed or existing mining project.
The methods presented in this paper are straight-
forward and allow the engineer to quickly and effectively
determine appropriate COV for the project.
REFERENCES
[1] Rendu, Jean-Michel (2008), “An Introduction to
Cut-Off Grade Estimation,” Englewood CO, Society
for Mining, Metallurgy, and Exploration.
[2] Lane, Kenneth (1988), “The Economic Definition of
Ore,” London, Mining Journal Books.
[3] Ganguli, R, Dagdelen, K, and Grygiel, E, (2011)
“SME Mining Engineering Handbook, Third
Edition,” Chapter 9.10, Society for Mining,
Metallurgy, and Exploration Darling, Peter, Editor.
[4] Poniewierski, J, and Hall, B (2016). “Break-even is
Broken,” AusIMM Bulletin, 6/17/2016.