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

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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

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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 of Congress 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. I. Title.

TN272.A56 1991 622' .1-dc20

90-2454 CIP

To my wife

Anita

For her patience and tolerance during the writing oj this book.

Contents

PREFACE page Xl

ACKNOWLEDGEMENTS XIV

1 REPRESENTATION OF MINE DATA 1

1.1 Introduction 1 1.2 Mine nomenclature 1 1.3 Subdivision of orebodies 4 1.4 Mine sections 6 1.5 Mine plans 9 1.6 Vertical longitudinal projections 14 1.7 Structure contour plans 17 1.8 Connolly diagrams 21 1.9 Dip contour maps 22 1.10 Structural unrolling - Palinspastic maps 24 1.11 2D and 3D block models 27 1.12 3D orebody projections 27 1.13 Histograms and cumulative frequency plots 28 1.14 Rose diagrams 28 1.15 Stereographic projections 29 1.16 Computer software 29

2 MINE SAMPLING 43

2.1 Introduction 43 2.2 Characterization of mineral deposits for sampling purposes 44 2.3 Grade elevation 47 2.4 Possible locations for underground sampling 47

2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16

Contents

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

3 ORE-RESERVES BY 'CLASSICAL METHODS'

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12

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

Appendix 3.1 USBM/USGS Classification of Resources and Reserves Appendix 3.2 APE a Classification of Reserves Appendix 3.3 AIMM/ AMIC Classification of Resources and Reserves Appendix 3.4 Coal Resources and Reserves Appendix 3.5 Ore reserve calculation - worked example Appendix 3.6 Program listing for SGORE

4 GEOSTATISTICAL ORE-RESERVE ESTIMATION

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

V111

52 54 56 57 58 70 72 75 81 82 85 93

96

96 96

103 118 125 134 140 141 144 144 151 158

160 163 164 165 168 171

175

175 175 178 182 184 187 193 196

4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16

Contents

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)

202 204 206 210 211 212 218 221

Appendix 4.1 Determination of confidence limits for log-transformed data 225 Appendix 4.2 Worked example - de Wijsian scheme 226 Appendix 4.3 Mathematical basis of point kriging 228 Appendix 4.4 Mathematical basis of block kriging 229 Appendix 4.5 Extension variance graphs and tables for the spherical scheme 232

5 DESIGN AND EVALUATION OF OPEN-PIT OPERATIONS

5.1 Introduction 5.2 Design of open-pit operations 5.3 Evaluation of open-pit operations 5.4 Economic optimization of pit designs

6 FINANCING AND FINANCIAL EVALUATION OF MINING PROJECTS E.G. Hellewell

6.1 Introduction 6.2 Financial aspects unique to mining projects 6.3 Capitalization of mining projects 6.4 Financial model of a mining project 6.5 Financial evaluation techniques

7 GRADE CONTROL

7.1 Introduction 7.2 Open-pit operations 7.3 Underground operations

8 ORE-EV ALUA TION CASE HISTORIES

246

246 246 277 292

306

306 307 308 311 314

323

323 323 342

351

8.1 Introduction 351 8.2 Case history - White Pine Copper Mine, Michigan, USA 351 8.3 Case history - Evaluation of the J-M Pt-Pd Reef, Stillwater, Montana 356 8.4 Case history - East Ore Zone, Teck-Corona Gold Mine, Hemlo

Canada 361

IX

Contents

8.5 Case history - opencast coal mining in South Wales (R. MacCallum-British Coal) 364

8.6 Case history - Boulby Potash Mine, Cleveland, UK 380 8.7 Case history - exploration and evaluation of a glacial sand and gravel

deposit (P. Brewer and P. Morse - Tarmac Roadstone, Northwest 394 Limited)

8.8 Case history - limestone aggregates - The Tytherington Limestone Quarries, ARC Ltd 399

8.9 Cement - Cement Quality Limestones at Los Cedros, Venezuela (Blue Circle Industries PLC) 412

8.10 Case history - Navan Zn-Pb Mine, Eire (Tara Mines Ltd) 420

INDEX 433

x

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

X111

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 Alwyn E. Annels

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.

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 col-

xv

leagues 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).