339
sequencing of mine development and stoping, and development of production scheduler
that maximizes the profitability over the life time of a mine. The PRIMO team developed an
integrated set of tools that assists with mine planning at all stages from preliminary assessment through operational planning, with the aim of maximizing the mining project value
generated by an underground mine.
• Optimization of stope design – covering strategic, tactical and operational planning
• Increase productivity – fast, effective and efficient engineering designs, relieve engineers
from time consuming manual designs and scheduling
• Multiple mine design options can be evaluated quickly for “What-If ” analysis
• Increase accuracy – consistent and repeatable design process
• Optimization – hill climbing with rigorous optimization algorithms, case studies since 2011
demonstrated that more ore tons, ounces and higher grade can be achieved with PRIMO
than manual designs.
2.4 Multiple dimensional strategic optimization – hill of value analysis
Strategic mine planning should be performed before any detailed tactic mine planning, such
as long-term or business planning. Strategic mine optimization should ‘consider everything’
[8]
.
Hill of Value allows complex relationships between variables to be explored concurrently, for
example; cutoff grade, production rate/mill capacity, stope size and gold price. This allows an
integrated approach to be taken as part of any options analyses. Simple break-even calculations are not able to capture the impact of the processing constraints.
A high level strategic analysis was conducted for the project using a technique called Hillof-Value (HoV) model. HoV evaluated a wide range of options and scenarios with high level
mine plan and cost assumptions, to study the relationship between cut-off grades, production
rate/mill size, life of mine and project NPV/FCF at a strategic level
[8]
. The goal of this analysis
is to provide a guideline or direction to determine some of most important project study outcomes such as cut-off grade and production rate by answering what-if questions and seeking
the optimal operation point.
One of the main objectives of this study is to maximize project NPV by evaluating a wide
range of options and scenarios. Stope reserve with different cut-off grade, process costs
with various mill size/production rate, mining and development costs are the key inputs for
the model. The HoV assessment for the project evaluated various production rates, cut-off
grades, stope heights and backfill options, as follows:
• Production rate scenarios ranging from 0.5 million tonnes per year (Mtpa) to 1.1 Mtpa, in
increments of 0.1 Mtpa, for a total of seven production rate scenarios.
• Cut-off grade scenarios ranging from 2.0 g/t to 7.0 g/t, in increments of 0.5 g/t, for a total
of 11 cut-off grade scenarios.
• Stope heights ranging from 20 m to 30 m, in increments of 5 m, for a total of three stope
height scenarios.
• Backfill options considered included rock fill, cemented rock fill and paste fill for a total
of three fill scenarios.
The varying economic conditions under which the scenarios were tested were as follows:
• Discount rate of 0%, 7%, 9% and 12%, for a total of four discount rate scenarios.
• Gold priced at $1000/oz. to $1600/oz., in increments of $100/oz., for a total of seven gold
price scenarios.
Combined, a total of 19,404 different scenarios were tested (in the background) during
the HoV assessment. The results from a Hill of Value analysis can be described graphically,
with the shape of the “hill” providing as much information as the relative “elevation”. A flatter hill demonstrates that the project is more “robust” and/or less “sensitive” to variation in
a particular variable whereas a steep peak demonstrates that there is a risk of “falling off ”
should parameters change. Additional background to the tool itself can be obtained from
Brian Hall’s book “Cut-off Grades and Optimizing the Strategic Mine Plan”
[8]
.
sequencing of mine development and stoping, and development of production scheduler
that maximizes the profitability over the life time of a mine. The PRIMO team developed an
integrated set of tools that assists with mine planning at all stages from preliminary assessment through operational planning, with the aim of maximizing the mining project value
generated by an underground mine.
• Optimization of stope design – covering strategic, tactical and operational planning
• Increase productivity – fast, effective and efficient engineering designs, relieve engineers
from time consuming manual designs and scheduling
• Multiple mine design options can be evaluated quickly for “What-If ” analysis
• Increase accuracy – consistent and repeatable design process
• Optimization – hill climbing with rigorous optimization algorithms, case studies since 2011
demonstrated that more ore tons, ounces and higher grade can be achieved with PRIMO
than manual designs.
2.4 Multiple dimensional strategic optimization – hill of value analysis
Strategic mine planning should be performed before any detailed tactic mine planning, such
as long-term or business planning. Strategic mine optimization should ‘consider everything’
[8]
.
Hill of Value allows complex relationships between variables to be explored concurrently, for
example; cutoff grade, production rate/mill capacity, stope size and gold price. This allows an
integrated approach to be taken as part of any options analyses. Simple break-even calculations are not able to capture the impact of the processing constraints.
A high level strategic analysis was conducted for the project using a technique called Hillof-Value (HoV) model. HoV evaluated a wide range of options and scenarios with high level
mine plan and cost assumptions, to study the relationship between cut-off grades, production
rate/mill size, life of mine and project NPV/FCF at a strategic level
[8]
. The goal of this analysis
is to provide a guideline or direction to determine some of most important project study outcomes such as cut-off grade and production rate by answering what-if questions and seeking
the optimal operation point.
One of the main objectives of this study is to maximize project NPV by evaluating a wide
range of options and scenarios. Stope reserve with different cut-off grade, process costs
with various mill size/production rate, mining and development costs are the key inputs for
the model. The HoV assessment for the project evaluated various production rates, cut-off
grades, stope heights and backfill options, as follows:
• Production rate scenarios ranging from 0.5 million tonnes per year (Mtpa) to 1.1 Mtpa, in
increments of 0.1 Mtpa, for a total of seven production rate scenarios.
• Cut-off grade scenarios ranging from 2.0 g/t to 7.0 g/t, in increments of 0.5 g/t, for a total
of 11 cut-off grade scenarios.
• Stope heights ranging from 20 m to 30 m, in increments of 5 m, for a total of three stope
height scenarios.
• Backfill options considered included rock fill, cemented rock fill and paste fill for a total
of three fill scenarios.
The varying economic conditions under which the scenarios were tested were as follows:
• Discount rate of 0%, 7%, 9% and 12%, for a total of four discount rate scenarios.
• Gold priced at $1000/oz. to $1600/oz., in increments of $100/oz., for a total of seven gold
price scenarios.
Combined, a total of 19,404 different scenarios were tested (in the background) during
the HoV assessment. The results from a Hill of Value analysis can be described graphically,
with the shape of the “hill” providing as much information as the relative “elevation”. A flatter hill demonstrates that the project is more “robust” and/or less “sensitive” to variation in
a particular variable whereas a steep peak demonstrates that there is a risk of “falling off ”
should parameters change. Additional background to the tool itself can be obtained from
Brian Hall’s book “Cut-off Grades and Optimizing the Strategic Mine Plan”
[8]
.