Increasing Net Present Value by a Third at an Operating Sublevel Cave Mine Using Draw Strategy Optimisation. Presented by Alex Campbell

Transcription

1 Increasing Net Present Value by a Third at an Operating Sublevel Cave Mine Using Draw Strategy Optimisation Presented by Alex Campbell

2 Presentation Overview Three year project to optimise the draw strategy at the Ernest Henry SLC Achieved a 32% increase in mine NPV and developed a new process for draw strategy optimisation This presentation provides an overview of the project including: Summary of the Ernest Henry Mine Draw strategy overview Cave flow and recovery modelling Optimisation process Results and grade reconciliation

3 Mine Location Located 38km North East of Cloncurry Copper and gold deposit Open pit from 1997 to 2011 First underground production in 2012 Mine life to 2026 SLC

4 Mine Overview Pit is 1.5km x 1.3km across and 530m deep Underground has a planned depth of 1km Ore body dips at 45 o Sublevel cave mining method Complex transition mining around the pit 3 Mt / pa when trucking during mine build 6 Mt / pa once hoisting % Cu eq. (2015 reserves) Open pit Transition zone Planned SLC Hoisting Shaft Shaft access Crusher precinct Conveyor incline Shaft load out

5 SLC Dilution and Recovery A potential disadvantage of sublevel caving is the relatively high dilution and ore loss Dilution of 15-30% Ore loss of 10% to 20% Dilution can be internal or external, planned or unplanned Many examples in the literature on the issue of dilution

6 Additional Challenges at the Ernest Henry SLC Ore body inclined at 45 degrees resulting in- A new source of hangingwall dilution on each level Draw constraints required along the hanging wall for air blast management A zone along the footwall without production rings below Ore has similar density to waste Ore is not (easily) visually distinguished from waste Sampling not always practical or timely with high turn over of production rings Therefore, the mine needed a tonnage based draw strategy determined by grade modelling techniques

7 Flow Model Overview Flow modelling conducted using PGCA software Cellular automata solver Capable of simulating different particle properties for different rock types and for fines Simulations are run to a prescribed tonnage or to a user specified shut-off grade Model output includes tonnes and grade information All flow modelling conducted by site personnel

8 Draw Strategy Optimisation What is the optimal draw strategy? Adheres to safety requirements Air blast, mud rush, cave propagation requirements Maximises economic return Optimum balance between ore recovery and dilution Exploits grade bearing external dilution where possible Ensures enough draw points are available so that production targets can be met

9 Draw Strategy Optimisation Process Select grade boundary and production layout Repeat for other grade boundaries until optimised Apply draw zone constraints Economic analysis Run models for various shut-off grades Smooth the ring tonnages to remove fluctuations and re-run flow model

10 Draw Strategy Zones Constraints and shut-off grades are applied by dividing the SLC into zones Zone 1 Hanging wall zone Low draw for air blast control Zone 2 - Central zone Apply optimum shutoff grade determined using iterative process of flow models Zone 3 Zone 2 Zone 1 Zone 3 - Footwall zone Mine to marginal break even grade as ore cannot be recovered below

11 Footwall Overdraw The angle of the ore body can result in ore loss along the footwall The footwall of each level is the last opportunity to recovery grade the draw column above Overdrawing to a break-even grade maximises ore recovery in this zone Remaining ore along the footwall without overdraw

12 Footwall Overdraw Strategy Different options assessed for the footwall recovery including ring layout and final ring position Economics govern the exact location of the final ring a balance between recovery and dilution Unrecovered ore Unrecovered ore Additional dilution Footwall option with standard SLC rings Additional dilution Footwall option with draw bells 12

13 Ore Blanket Principal Dilution is unavoidable in SLC mines, but can be managed using an ore blanket principle An ore blanket is formed by the low draw at the hangingwall for air blast control The blanket is made up of grade bearing material so that dilution is economic Any remaining ore is recovered at the footwall by overdrawing The optimum ore blanket thickness is determined via multiple flow model iterations Ore blanket during a LOM flow model simulation (facing North)

14 Ore Blanket Principal Bull and Page (2000) Lamperud (1973) 14

15 Draw Strategy Optimisation Process Select grade boundary and production layout Repeat for other grade boundaries until optimised Apply draw zone constraints Economic analysis Run models for various shut-off grades Smooth the ring tonnages to remove fluctuations and re-run flow model

16 Scenario Comparison 110,000, ,000,000 90,000,000 Mining strategy with the highest NPV Footprint A Recovered ore tonnes 80,000,000 Footprint B 70,000,000 60,000,000 Feasibility Study Footprint C 50,000,000 40,000, % 0.90% 0.95% 1.00% 1.05% 1.10% 1.15% Copper Grade

17 Economic Analysis and Cost Model Detailed cost model developed for economic assessment Accurate economic evaluation was critical to determining the optimum draw strategy All costs included in the model and scenario evaluation including- Mining Processing and transport Smelting, refining and sales Sales, smelting and refining 22% Transport [PERCENTAG E] Processing 18% Underground development 8% Administration, technical services, management and site support [PERCENTAG E] Underground production 14% Fixed Plant Maintenance 4% Mine Services 4% Mobile Maintenance 12%

18 Optimisation Results Over 200 draw strategy simulations were completed over three years NPV increased by 32% 10% increase in recovered grade compared to the feasibility study Increase in net smelter return (NSR) of almost 30% per tonne 6 month increase in mine life Cut-off grade reduced from 1.15% to 0.9% copper equivalent 101% metal recovery at 110% draw Significant improvements to the optimisation process: Flow modelling software updates and automated functions Draw strategy analysis and visualisation of results The same level of optimisation achieved in this project could now be completed in a matter of weeks, rather than years

19 Economic Assessment 32% NPV improvement Block model A Block model B Block model C Additional resource drilling Higher production rate NPV ($) NPV@7% $M Total copper sold (kt) Feasibility study Multiple optimisation iterations Current mine plan Under evaluation 19

20 Understanding flow model results - Recovered grade Pit Recovered copper grade (%) 0.9% Cu eq. cut-off grade 1500 sublevel (plan view) Lower half of the SLC not shown 20

21 Understanding flow model results - Net Smelter Return (NSR) Pit $ NSR per tonne High Low Lower half of the SLC not shown 21

22 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Modelled Copper Equivalent Tonnes Copper Equivalent Grade (%) Grade and Metal Reconciliation 10,000 8,000 6,000 4,000 Modelled vs Actual Metal y = 1.01x R² = Modelled vs Actual Grade 2, ,000 4,000 6,000 8,000 10,000 Actual Copper Equivalent Tonnes Actual Cu equiv grade Forecast Cu equiv grade

23 Recap - How the NPV improvements were achieved The optimisation process made significant economic improvements by: Modelling to determine the optimal draw for each ring. Applying a marginal break even grade along the footwall. Review of multiple footprint and cut-off grades. Increasing the draw percentage in high grade blocks to recovery metal earlier. Using an ore blanket to control dilution. Removing rings with a negative net smelter return (NSR) Reviewing the draw strategy quickly with changing economic factors and block model updates

24 Future Improvements Calibration using marker recovery data Further validation of grade forecasts Automation of the optimisation process Automated footprint finder and mine design Application of this process at other mines

25 Questions