Abstract
Discussion Forum (0)
The Chelopech Mine (owned and operated by Dundee Precious Metals Inc. (DPM)) is an active underground mine located in Bulgaria. The mine produces approximately 120,000 ounces of gold and 18,000 tonnes of copper per annum with an annual production rate of 2.2 Mtpa. The Chelopech Mine utilizes a sublevel longhole stoping mining method with paste backfill with ore transported from underground to surface by conveyor. The operation extracts ore from multiple horizons and zones throughout the mine. Ore is trucked from these zones to a load out at the conveyor dump point.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
The Chelopech Mine (owned and operated by Dundee Precious Metals Inc. (DPM)) is an active underground mine located in Bulgaria. The mine produces approximately 120,000 ounces of gold and 18,000 tonnes of copper per annum with an annual production rate of 2.2 Mtpa. The Chelopech Mine utilizes a sublevel longhole stoping mining method with paste backfill with ore transported from underground to surface by conveyor. The operation extracts ore from multiple horizons and zones throughout the mine. Ore is trucked from these zones to a load out at the conveyor dump point.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
Cut-off Grade Optimization at the Chelopech Mine
Mr. Gary Poxleitner
Abstract
Discussion Forum (0)
The Chelopech Mine (owned and operated by Dundee Precious Metals Inc. (DPM)) is an active underground mine located in Bulgaria. The mine produces approximately 120,000 ounces of gold and 18,000 tonnes of copper per annum with an annual production rate of 2.2 Mtpa. The Chelopech Mine utilizes a sublevel longhole stoping mining method with paste backfill with ore transported from underground to surface by conveyor. The operation extracts ore from multiple horizons and zones throughout the mine. Ore is trucked from these zones to a load out at the conveyor dump point.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
The Chelopech Mine (owned and operated by Dundee Precious Metals Inc. (DPM)) is an active underground mine located in Bulgaria. The mine produces approximately 120,000 ounces of gold and 18,000 tonnes of copper per annum with an annual production rate of 2.2 Mtpa. The Chelopech Mine utilizes a sublevel longhole stoping mining method with paste backfill with ore transported from underground to surface by conveyor. The operation extracts ore from multiple horizons and zones throughout the mine. Ore is trucked from these zones to a load out at the conveyor dump point.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
Chelopech Mine desires to extend their mine life while maintaining their current production of 2.2Mta and ensuring a robust Net Present Value (NPV). The production rate was assumed to be steady regardless of any changes in reserves. Therefore, a Cut off Value (CoV) needed to be selected that supports the two corporate objectives of extending mine life and still maximizes value. It was understood that zones further from the conveyor load-out would have a higher cost to mine (due to truck haulage distance) and therefore merit a higher CoV.
To complete this work, SRK and DPM worked closely and collaboratively, sharing experience, insight and ideas. The first step was to review the NSR calculation and then organize the process-based costs into an activity-based structure in consideration of a fixed and variable cost components. All costs were categorized by specific activity and sorted by individual zones. A CoV range was selected by flexing both the Au price ($/ounce) assumption and the profit margin ($/tonne). A production scenario was then generated based on each selected CoV utilizing a mine panning, stope optimization and scheduling tool. Each schedule was then fed into an economic model which produced a value (NPV) for each of the CoV scenarios.
Each scenario was then analyzed and compared to each other utilizing a weighted selection criterion to identify the preferred CoV that met the objective of balancing Value and LoM, which reflected best the corporate objective at Chelopech Mine.
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