MINE5002 MINE SYSTEMS ENGINEERING Part AMatlab

Java Python MINE5002 MINE SYSTEMS ENGINEERING

REPORT - Strategic Mine Planning Project

Group Submission

Weight towards final grade = 35%

Submissions: Friday, August 23, 2024 at 11:59PM

This report constitutes two parts (Part A and Part B). Both parts must be submitted together as per instructions given below:

Task and File/Folder Name	Submission Mode
Manual Procedure Tasks I-IV GroupLeaderLastName_Manual_Tasks I IV.xlsx	EXCEL Spreadsheet and WHITTLE software files through Blackboard. Please follow    the instructions given below.
Whittle Software Project Tasks I-IV (folder name: GroupLeaderLastName_Whittle_Tasks I IV)
Manual Procedure and Whittle Software Tasks V (GroupLeaderLastName_Report.PDF)	REPORT (PDF of Assessment Submission Declaration, Statement of Contribution, and Executive Summaries with appendices) through Blackboard.

Submission Instructions:

(1) Create a folder “GroupLeaderLastName” .

(2) Copy your Excel Spreadsheet (GroupLeaderLastName_Tasks_I_IV.xlsx) into the folder in (1).

(3) Copy Whittle folder (GroupLeaderLastName_Whittle_Tasks_I_IV) into the folder in (1).

(4) Create a ZIP (GroupLeaderLastName.zip) of the folder in (1).

(5) Submit this ZIP (GroupLeaderLastName.zip) of Excel and Whittle files through a link in BB.

(6) All members sign Assessment Submission Declaration and Statement of Contribution.

(7) Scan signed Assessment Submission Declaration and Statement of Contribution as a PDF.

(8) Save or Export your word document of "Executive Summaries with appendices” as PDF.

(9) Combine     the     PDFs     in      (7)     and     (8)     and      save     this     combined      PDF     as "GroupLeaderLastName_Report.PDF".

(10) Submit REPORT (GroupLeaderLastName_Report.PDF) through a linkin BB.

Statement of Contribution: Your  submission   must   include   a   separate   Statement   of Contribution  outlining  the  individual  contribution  from  each  member  of  the  group. All members must agree to and sign this statement of contribution. In addition, we may have a group  members  interview  for  allocation  of   individual  marks.  In  addition,  all   internally enrolled  students  must  actively  participate  and  engage  in  Whittle  software  Lab  sessions where they will complete the Whitle software tasks individually.

Learning objectives/outcomes:

1.   Outline mine planning processes, opportunities and constraints associated with a mining operation.

2.   Develop   mine  plans  through  manual  procedures,   mathematical  models,  and   mining software.

3.   Analyse and communicate mine plans for real-life scenarios.

Introduction:

This group project covers the following two aspects of the unit/course learning outomes:

1. Part A: Ultimate  pit  limit  design, production scheduling, and after-tax discounted cash flow  analysis  of  a  hypothetical  orebody  using  manual  procedures.  Note  that  this document provides information about Part A.

2. Part   B: Ultimate  pit  limit  design  and  production  scheduling  of  large-scale  realistic orebodies using GEOVIA Whittle®  software.

Part A - Manual procedure - hypothetical copper deposit (20%)

Problem Statement:

Given the following input parameters, you are  required to develop ultimate pit  limit and production plans of a small-scale (hypothetical) copper deposit.

Economic parameters:

Copper price (p) = $5000.00 per tonne of metal,

Selling/marketing and refining cost (r) = $1200.00 per tonne of metal,

Mining cost (m) = $1.65 per tonne of material, Mining cost adjustment factor (MCAF) = 1,

Processing cost (c) = $10.00 per tonne of ore,

Metallurgical recovery (y) = 88%, Discount rate = 12%.

Ore body model:

Mining block size = 10m×10m×10m, i.e. bench height = z = 10m Material density = 1.50 tonne/m3,

Number of mining blocks = 1536,

Model file = HypotheticalCopperDeposit.xlsx (download from Blackboard).

Operational parameters: Pit slope angle = 45°,

Mining capacity = 52,500 tonnes of material per year, Processing capacity = 15,000 tonnes of ore per year.

Tasks:

Please use Microsoft Excel to complete tasks I to IV.

I. [Marks MINE5002 MINE SYSTEMS ENGINEERING Part AMatlab = 10] Given the x, y, z coordinates, develop plan (bench-by-bench) and section (includeonly those sections that contain metal content greater than zero on different z- levels) maps. Use mining block economic value equations to convert the orebody model into the economic block model.

II. [Marks = 20] Given economic block model, use 1-5 block precedence pattern to develop ultimate  pit  limit  using  floating  cone  (manual)  procedure  ( however,  allow  for  mining block mutual support). Calculate:

a.   The undiscounted value ($) of the pit.

b.   The  quantity  of  ore,  average  grade  of  copper,  quantity  of  waste,  and  overall stripping ratio within the ultimate pit limit.

Note: For precedence or slope constraint in tasks II and III, use 1-5 mining block pattern (as given below):

III. [Marks = 40] Given the ultimate pit limit, operational (mining and processing) capacities and precedence constraint (1-5 pattern):

a. [Marks = 10] Develop a production schedule based on a simple bench-by-bench sequence (i.e. mine blocks on bench 1, thenon bench 2,and soon; no stockpiling of  ore;  do   not  mine  from   bench  below  until  bench  above/current   bench  is complete), and calculate:

i.   The discounted value ($) of the operation.

ii.   Period-by-period  quantity  of  ore,  average  grade  of  copper,  quantity  of waste,  and  stripping   ratio.  Present  these  figures   in  both  tabular  and graphical forms.

iii.   Present  a  phase-wise  (year-by-year)  expansion  of  the  pit  in  plan  and selected section maps.

b. [Marks  =  30] Develop  a  production  schedule  independent  of  bench-by-bench sequence, i.e., based on next best ore (or value) concept, and calculate items (i)- (iii) in III-(a).

IV. [Marks  =  20] Given  production  schedules  in  III-(a)  and  III-(b)  a  mining  company  has acquired the mineral rights of this small scale orebody, and now evaluates the economic potential of the deposit in terms of project after-tax cash flow analysis, NPV, and IRR.

For both production schedules, before performing after-tax cash flow analysis, multiply quantity of material mined per year and quantity of oreprocessed per year by 1000 [for example; if during year 1, material mined = 52,500 tonne and ore processed = 15,000 tonne; then, new values would be material mined = 52,500,000 tonne andore processed = 15,000,000 tonne].

a.   Assume:

i.   Mineral rights acquisition cost (or cost of purchasing the property) of AUD $100,000.00 is incurred now (in year 0).

ii.   The infrastructure development cost of AUD $500,000.00 is incurred now (in year 0).

iii.   The  company  plans  to  acquire  equipment  now  (year  0)  and  replace  in years 7. It is expected that the capital cost associated to initial purchase will be equal to AUD $25,000,000.00. The company expects a 2% per year escalation   in   the   capital   cost   associated   to   mining   and   processing equipment.  The  depreciation  deductions  must  begin  when  equipment goes into service in production years 1 and 8 using straight line method

over seven year depreciation life. iv.   Concentrate grade = 45%.

v.   Use current exchange rate at AUD $1 = US $0.70.

vi.   Smelter  deduction  and  charges:  copper  metal  deduction  =  0.5%  of  Cu value  in  $  per  tonne  of  concentrate,  smelter  charge  =  US  $10.00  per tonne   of   concentrate,   transport   charge   =    US   $5.00   per   tonne   of concentrate and refining cost = AUD $175.00 per tonne of Cu (out of the total of marketing and refining cost of $1200.00 per tonne Cu mentioned

in economic parameters at Page 2). vii.   Tax rate = 30%.

viii.   Losses must be carried forward to the next tax year. ix.   Mineral royalties = 5%.

x.   The company is expecting a mine closure and rehabilitation cost equal to AUD $200,000.00 in the final year of operation. These costs are estimated in dollars of the year in which they will be incurred. However, as a legal requirement,  the  company   must  invest   now  (year  0)  to  ensure  AUD $200,000.00 available in the final year of operation. The company expects a return on this mandatory investment @ 12% per year.

xi.   It  is  expected  that  the  company  requires  about  AUD  $2,500,000.00  of working capital to support production during initial years.

xii.   The  company  operates  on  a financial structure of 60% equity and 40% debt.  Therefore,  it  funds  AUD  $1,500,000.00  of  its  working  capital through sale of its shares, and borrows AUD $1,000,000.00 at an interest rate  of   10%.  The  AUD  $1,000,000.00  debt  will   be   repaid   in  equal payments during first four years of ore production. The company expects to recover part (AUD $1,000,000.00) of the working capital by salvaging equipment and other inventories in last year of operation. The company believes its cost of equity capital is 15.34% and use the weighted average cost of capital  (rounded  up to the  next  whole  number)  as the  rate for purpose of comparison.

V. [Marks =  10] Write an executive summary of the tasks  I-IV and present all calculations (worksheets, drawings/maps, etc.) as an appendix