Hardrock Feasibility Project

Group 5
School of Mining Engineering

Aidan Blockley
Max Jones
Tyler Kaplan
Anthony Sara
Albert Young

Project Overview

Open Pit Truck and Shovel Operation

Sub-Level Stoping (Backfill) Mining

Open Pit

Underground

Total

Total CAPEX (AUD B)

1.5

0.46

1.59

NPV (AUD B)

2.7

1.4

4.1

IRR (%)

15.3

15.3

15.3

Reserve (Mt)

161

50.6

211.6

Life of Mine (years)

13

22

Average Grade (% Cu)

1.06

1.25

Ore Tonnage (Mt)

161

43.4

204.4

Regional Location and Services

50km North-East of Cloncurry

Primarily agricultural and mining industry in
the surrounding area
Greenfield Operation
Copper-gold deposit
Climate wet season
Water
North West Queensland
Water Pipeline
Power
Diamantina Power Station
Mica Creek Power Station

Map of deposits surrounding Cloncurry (Elementos Limited, 2012)

Regional Geology
30-50 SSE dipping
100-120MPa rock strength

Mining Method Selection

Open Cut
Cost effective method
Whittle optimised depth limit
Ultimate Pit limits

Underground
Sub level stoping versus sub
level caving comparison
Nicholas Algorithm analysis
Backfill

Transition
Open pit stability
In pit transition
Development scheduling
simultaneous with open pit
production

Grade-Tonnage Curves
Open Pit Grade-Tonne Curve
350000000
300000000
250000000
200000000
Tonnage (Mt) 150000000
100000000
50000000
0

0.2

0.4

0.6

Cutoff
Tonnage

cu

0.8

1.6
1.4
1.2
1
0.8 Grades
0.6
0.4
0.2
0
1.2

Surface Operations
Open Pit Summary
Capital Expenditure (CAPEX) ($AUD)
NPV ($AUD)
Life of Mine (years)
Operating Expenditure (OPEX) ($AUD/t)

CAPEX AND OPEX BREAKDOWN?

13

Surface Operations
Whittle Input Assumptions

Optimisation

Slope stability analysis (circular failure)

Distance from Ultimate Pit Limit (UPL)
Mining method constraints

Whittle 4X based optimisation

Appropriate production rates

Pushback Selection
Pit-by-Pit Graph

Pushback Optimisation

Pushback Graph whittle

Pit 23

Pit 16

Pit 13

Pit 9

Pit 6

Final Pit

From Whittle 4X optimisations

Pit shell 23 was found to be conducive to maximise the NPV of the project

Whittle Optimised Schedule

Summary

Drawbacks

Ideal V-shaped pit shells

Does not take into account roads and
switchbacks

Modified Schedule
Annual Open Pit Production
Open Pit Production Schedule
25

20

15

Waste
Ore
TOTAL

Tonnes (Mt)
10

0
1

Production Period (Years)

10

11

12

13

Equipment Selection
Equipment

Unit ID

Specifications

Number of
Units

Hitachi EX5600

34 m3

Hitachi EX1900

7.8m3 11.9m3

CAT Trucks

CAT793D

218t

28

CAT Grader

CAT14M

14m

CAT Track Dozer

CATD8T

300kW

CAT Drill

MD6240

<270mm

CAT Water Truck

CAT777G WTR

75, 000 L

Hitachi Excavator/s

Surface Infrastructure

Tailings Dam

Waste dump 1
Waste Dump 2
ROM Pad
Processing Plant
Workshop
Substation
Crib Room

Go Line
Open Pit

Administration
Concrete Plant

Design Parameters
Pit Design

Haul Road Design

Parameter

Value

Bench Height (m)

16

Berm Width (m)

7.5

Road Width (m)

35

OSA ()

46

ISA ()

43

BFA ()

50

Road gradient

10%

Underground Operations - MMS

Mining Method Selection techniques

yielded that Sub-Level Stoping was
the most applicable mining method
for this deposit, followed by Sub-Level
Caving
Used Nicholas Algorithm which
considers various features and
characteristics of the;
Ore Deposit
Rock Substance Strength
Fracture Frequency
Fracture Shear Strength
Other technical mining factors which
influenced this decision include:
Mining under an OC mine
Ore processing schedule
Development scheduling
Selective method
Safety
Economic Factors

Grade-Tonnage Curves
Underground Grade Tonnage Curve
45000000

2.5

40000000
2

35000000
30000000

1.5

25000000
Tonnage (Mt)

Grades

20000000

15000000
10000000

0.5

5000000
0
0.2

0.4

0.6

0.8

1.2

1.4

Cutoff
Tonnage

Cu

1.6

1.8

0
2.2

Development and Access

Decline

Utilising Drill and Blast to develop the

decline with a cost of 4000 $/m
Advance rate of 8 m/day
Total decline length of 8860 m from
entrance to pit bottom
Profile of 5m x 6 m

Shaft

Combination of shaft sinking and raise

boring
All shaft development will be contracted
Average cost of 28500 $/m
Advance rate of 4m/day
Sinking 2 shafts (Materials & Ore Pass)
Raising the Ventilation shafts

Developmen
t

Required
development
(m)

Profiles

Total Cost

Decline

8860

5m x 6m

$35.4 M

Stope Levels

45835

5m x 6m

$183.3 M

Materials
Shaft

716

7m
(diameter)

$21.5 M

Ventilation
Shaft 1

400

5m
(diameter)

$11.4 M

Ventilation
Shaft 2

460

5m
(diameter)

$13.1 M

Ore Passes

1960

3.2m
(diameter)

$39.2 M

Total Cost

$303.9 M

Stope Design

Height = 40m
Width = 15m
Length = 30m
10m Sill pillar
Tonnes per stope =
50400
Average grade =
1.25% Cu

Underground Operations
Geotechnical Considerations

FOS 1.48 at worst case

w/o backfill
De-stress program required
Pillars size range from 30 x
60 m to 30 x 30 m
Sill pillars of 10m
Crown Pillar of 66m
Pillars were designed based
on geotechnical and
financial factor

Underground Scheduling
Tonnes per Stope per Level

Number of Stopes

120

100

80

60

40

2 Tonnes per level (Mt)

20

Information for Scheduling

Number of Stopes per Level

Stopes Per Level

Tonnes Per Level (Mt)

120
100
80
60
40
20
0

9810494 79 78 75 91 71 59 50 46 16

Development Requirements (Km)

6
5
4
3
2
1
0

Stopes with a higher economic value will

be prioritised for extraction using mixed
integer programming to maximise

Vulcan was used to determine the

stopes with the highest average grade
NPV block model was generated for each
level
Highlights which Stopes are of greater
economic values

Underground Master Schedule

Ventilation

Intake drift and intake shaft

Exhaust exhaust shaft and
materials handling shaft
Studies indicate that required airflow
for pit is 560 / s
Total running cost per year = $2.1 M
p.a.

Stage

Power (kW)

Quantity
Required (

Decline

2640

148

Production

2100

151

Ore Bin Level

1868

134

Development

834

60

Total
(accountable)

9362

560

Total Cost

Equipment Fleet
Equipment

Total Units

Type
(where
applicable)

Specification
s

Crusher

Gyratory

1000
tonne/hour

Winder

Double Drum

800 tonne/hour

Conveyor

1150mm Belt
Width

800 tonne/hour

LHD

CAT 2900G

7.2m3

Truck Fleet

12

CAT AD45B

22.9m3

Integrated Tool
Carrier

IT14G2

71kW

Jumbo Drill

Boomer 282

Twin Boom

Long hole Drill

Simba 364

165mm

Backfill
Paste Backfill

Delayed backfilling stress shadow

Tailings + Additives
Confinement to ore pillars
Water absorbed through cement
hydration
Estimated cost $23/t
Paste fill rates of 100-200tph

Processing
Crushing
Grinding
Froth flotation
Chalcopyrite from coarse
grained sulphide ores
floats readily with xanthate
collectors
Particle size, aeration,
collector, pH

Product thickening
Tailings disposal to TSF

Copper-gold concentrate
34% Cu
15g/t Au

Processing
Capacity

Tailings

Year

Processing
Capacity (Mt)

2.5

7.5

10

Coarse tailings to be used in

paste backfill
Paste backfill requires a
minimum 15% of material to be
finer than 20m
Represents between 70-85%
of the weight of the paste mix
Tailings Dam

Financial Model
Assumptions

QLD Royalties ~ 4.18%

Inflation Rate ~ 1.7%
Higher than average inflation rate for salaries ~ 2.0%
Income tax ~ 30% company income tax
Contingency and Sustaining Capital ~ 5% of revenue
50% Debt / 50% Equity
Interest Rate ~ 10%
WACC ~ 7.16%
Depreciation ~ Surface 15%, Underground 10%
Exchange Rate (AUD/USD) ~ 0.77
Copper Price ~ US$5744/t peaking at US$6600/t in 2030, conservative US$6200/t from 2030
Gold Price ~ US$1194/oz dropping to US$1100/t in 2030, maintained for UG

Sensitivity Analysis
Sensitivity Open Pit
FTM Sensitivity Analysis by Percent Change in NPV
110.00
90.00
70.00
50.00
30.00Change (%)
NPV Percent
10.00
0.85
(10.00)

0.9

0.95

1.05

1.1

(30.00)
(50.00)
Ore Production
Processing Recovery Au
Au Price Forcast (1)
Debtors delay
Mining Cost per Tonne
Fixed Costs (admin and other costs)
Discount Rate

Sensitivity Multiplier

Head Grade Au
Processing Recovery Cu
Cu Price Forcast
Initial Capital Costs
Processing Cost per Tonne
State Royalties

Head Grade Cu
Gold in Circuit
Exchange Rate
Ongoing Capital Costs
Smelting Refining, Transport and sales per Tonne
Company Tax Income Rate

1.15

Sensitivity Analysis
Sensitivity Underground
FTM Sensitivity Analysis by Absolute NPV
5.5
5
4.5
4

f(x) = 10.35x^2 - 30.97x + 24.26

f(x)
= -- 0x^2
-- 3.05
f(x)
0x^2 +
+-6.68x
6.08x
2.45
f(x) =
= 2.78x^2
10.46x
+ 11.31

NPV of Cloncurry Proejct ($ B)

3.5

3
2.5
2
0.85

0.9
Ore Production
Head Grade Cu
Gold in Circuit
Cu Price Forcast
Debtors delay
Mining Cost per Tonne

0.95

Sensitivity Multiplier
Polynomial (Ore Production)
Processing Recovery Au
Au Price Forcast (1)
Exchange Rate
Initial Capital Costs
Processing Cost per Tonne

1.05

1.1

1.15

Head Grade Au
Processing Recovery Cu
Polynomial (Au Price Forcast (1))
Polynomial (Exchange Rate)
Ongoing Capital Costs
Smelting Refining, Transport and sales per Tonne

Logistics

(Aurizon, 2014)

Rail loop 60km

Mount Isa Rail Corridor 1032km track
Port of Townsville

Parameter

Rail

Road

$/ntkm

0.025

0.07

Cost ($/nt)

20.00

56.00

Implementation
(AU$M)

60,000,
000

18,000,
000

Net cost/tonne concentrate moved

(AUD)
Open Pit

29.83

58.95

Underground

36.43

60.93

Environment and Rehabilitation

Gulf Plains bioregion

Re-established vegetation
commensurate with surrounding
vegetation
$2,700/Ha
Rehab cost benchmarked
$0.30/t
Stockpile reclamation
$1/t
Long term safety
Non polluting
Sustainable Planning Act 2009
Leading practice guidelines

Key Project Risks

Financial

Commodity price fluctuation

Global economic conditions
Recovery rates
Project costing variations

Technical

Excessive unplanned dilution

Supply chain interruption
Geotechnical failure
Government legislation

Socio-Environmental

SLO (Social Licence to Operate)

Water and waste management
Rehabilitation

Recommendations
Moving Forward

Economic projection is positive

Most sensitive to commodity prices, which are uncertain.

Approved for detailed feasibility study

Further geotechnical investigations

In-depth cost estimates
Metallurgical test work to determine processing requirements
Development of Environmental Impact Statement (EIS)