(i) SOCIETY FOR (Uf/r)y ANO "C¢'

MINING, METALLURGY,

AND EXPLORATION, INC. P.O. BOX 625002 • LI'TI'TI12EFITON, ®0120RADO ·80162-5002

PREPRINT NUMBER

93-85

SIMPLIFIED COST MODELS FOR PREFEASIBILITY MINERAL EVALUATIONS

T. W. Camm

US Bureau of Mines Spokane, Washington

For presentation at the SME Annual Meeting Reno, Nevada - February 15-18, 1993

Permission is hereby given to publish with appropriate acknowledgments, excerpts or summaries not to exceed one-fourth of the entire text of the paper. Permission to print in more extended form subsequent to publication by the Society for Mining, Metallurgy, and Exploration (SME), Inc. must be obtained from the Executive Director of the Society.

If and when this paper is published by the SME, it may embody certain changes made by agreement between the 'TIechnical Publications ®ommittee and the author so that the form in which it appears is not necessarily that in which it may be published later.

®urrent year preprints are available for sale from the SME, Preprints, P.O. Box 625002, Littleton, ®O 80162-5002 (303-973-9550). Prior year preprints may be obtained from the Engineering Societies Library, 345 East 47th Street, New York, NY 10017 (212-705-7611).

PREPRIN'TI AVAI12ABILI'TIY LlS'TI IS PUBLISHED PERIODI®A1212 YIN MINING ENGINEERING

INTRODUcnON

The Bureau of Mines conducts studies of the economic impacts of regulations on federal lands. These studies are part of the Bureau Potential Supply Analysis (PSA) program. To meet the needs of these studies, a methodology was developed to estimate operating and capital costs for a mineral deposit given its tonnage, grade, and depth. The format for the cost models in this study was developed at the Bureau's Western Field Operations Center (WFOC), Spokane, W A, for studies of known and undiscovered resources on Federal lands. These cost models are described in a Bureau publication by Camm (1991).

DESCRIPTION

To provide engineering analysis for PSA studies, mine and mill cost models were produced to make estimates of the cost to develop mineral deposits in the desert region of the Southwest United States. Regression analysis was used to generate capital and operating cost equations for each model based on daily production capacity (see Camm, 1992, for a discussion of using regression analysis to develop cost models). These models are used for Potential Supply Analysis studies by the Bureau, which analyze the economic benefits of minerals in a region. A good example of using cost models for PSA studies is a recent report by the Bureau demonstrating the economic impacts of minerals in an area in Southern California by Wetzel, et aI, (1992).

Typically deposit models for regional studies provide tonnage, grade, and depth variables. A new approach to cost modeling was developed to provide useful input to the economic evaluation of study areas based on these parameters (Camm and Smith, 1991). The modeling approach used in this simplified methodology is particularly well suited for making quick cost estimates where specific design parameters are unavailable. Users in the Bureau's Resource Evaluation and Policy Analysis divisions, professionals outside the Bureau performing similar evaluations, and those who need a quick cost estimate for a mineral deposit will find the approach of this simplified method particularly useful. The key benefits of the method are: demands less engineering background of user, ease of applying escalation factors, versatility in applications to a variety of deposit types, will occupy significantly less space on a computer than alternative systems, and the limited design parameters necessary to conduct a cost estimate. The cost derived using these models should be considered a pre-feasibility type estimate.

Models were developed using a variety of sources, with the intent of providing the most accurate representation of costs available for each

1

model. Costs for several operations at varying tonnages were estimated. Wherever feasible, the capacity scenario was based on actual operations. Site information available included flowsheets, equipment lists, and manning charts. This information was augmented by data from cost handbooks and references, and by the Bureau Cost Estimating System (CES) (U.S. Bureau of Mines, 1987, two vols.). Additionally, cost models developed at WFOC for previous studies were adapted for certain cases where feasible. Cost models were developed for each of the mine and mineral processing types listed in table one. Cost models for access roads and powerlines were also included.

Following determination of representative daily capacities for each model and gathering of pertinent data, capital and operating costs were generated for each capacity. These costs were summarized in the following categories: labor, equipment, steel, lumber, fuel, lube, explosives, tires, construction materials, reagents, and electricity. In addition, a separate category for sales tax was included. A total cost equation was also included for each model, for users who do not require a cost breakdown into each of the individual categories, but only an overall cost estimate. Table 1 lists the models developed.

Table 1. List of Cost Models

Infrastructure: Access roads Powerlines

Open pit mine models: Small Large

Underground mine models: Depth factors Block caving Cut-and-fill Room-and-pillar Shrinkage stope Sublevel longhole Vertical crater retreat

Mill models: Tailings pond Autoclave-CIL-electrowinning CIL-electrowinning CIP -electrowinning CCD-Merrill Crowe Float-roast-leach Flotation, one product Flotation, two product Flotation, three product Gravity Heap leach Solvent extraction-electrowinning

Regression analysis was used to generate capital and operating cost equations for each model in the form shown in the table 2. Equations for

each category listed above that were appropriate for each model were calculated in this form. Adjustment factors were also developed for variations in haulage distance for the open pit models, and for variations in depth of mining for the underground models.

Each model includes a brief discussion and a summary table of cost equations as shown in table two. For each underground model, a schematic diagram is also provided to illustrate the mine method. Figure 1 shows a typical schematic. Also included are simplified f10wsheets for each mill model, as illustrated in figure 2.

Cost curves summarizing the total cost equations for capital and operating costs for each model were developed. These are illustrated in figures 3-5. The corresponding total cost equations are summarized in table 3. Table 4 provides the total cost equations for depth factors for underground mine models, access roads, power lines, and tailings ponds. Depth factor costs should be added to the cost equations for the underground mining model being evaluated.

EXAMPLE

To demonstrate the individual cost models, the CIP-electrowinning model provides an example of how each model is presented. The discussion describes the design used for the model, followed by sample calculations using the equations from table 2.

This model is designed for evaluating oxide gold deposits. The CIP-electrowinning process is most often used for processing oxide gold ores with little or no byproducts. The cost equations are valid for ore tonnage capacities of 1,000 to 20,000 st/d. For this model, a grade of 0.1 oz/st Au was assumed, with a recovery of 89% Au.

Mine-run ore is initially crushed with a jaw, then a cone crusher. Crushed ore is then ground in a rod mill and sent through cyclones. The oversize is sent to a ball mill, while the undersize is sent to a thickener. The overflow from the thickener is sent to a series of carbon adsorption columns, while the underflow goes through a series of agitated leach tanks.

After leaching, the slurry is fed to the CIP circuit, which consists of a series of tanks with high efficiency agitators. Carbon is moved countercurrent to the slurry, which moves by gravity from the first to the last tank. Barren slurry from the last tank of the CIP circuit is sent to the tailings pond. The loaded carbon from the CIP circuit and the carbon columns is sent to the stripping tanks. Pregnant strip solution is sent to the electrowinning circuit, where the electrowinning cells are used to plate gold onto steel wool cathodes. Loaded cathodes are removed, treated with dilute sulfuric acid, and sent to the refining furnace, where a dore is produced for shipment. Stripped carbon is regenerated in a

2

kiln and returned to the circuit. Figure 2 illustrates a simplified f10wsheet for a

CIP mill tlowsheet. Costs are summarized in table 2.

The following calculations use the equations from table 2 for a CIP mill, using a feed rate of X = 7,429 st/d.

Capital cost estimate: Labor = 114,800(7,429)°·527 = 12,586.999 Equipment = 145,600(7,429)°·550 = 19.596.255 Steel = 42,600(7,429)°·528 = 4,712.603 Construction material = 55,800(7,429)°·543 = 7.055.851 Sales tax = 14,600(7,429)°·545 = 1.879,360

Total from above categories = 45.831.068

If an evaluator does not require the cost breakdown provided using the above equations, the total cost can be calculated using the total cost equation: Total = 372,000(7,429)°·540 = 45,797,876 (Comparing totals using individual cost categories vs. total cost equation: 45,831,068/45,797,876 = 1.001,0.1% difference due to rounding in regression equations.)

Operating cost estimate: Labor = 484(7,429)~·641 = 1.60 Equipment = 21.6(7,429)~·463 = 0.35 Steel = 0.993(7,429)°·0 = 0.99 Lube = 11.4(7,429)~·463 = 0.18 Electricity = 26.8(7,429)~.365 = 1.04 Reagents = 2.75(7,429)°·0 = 2.75 Sales tax = 0.409(7,429)~·057 = 0.25

Total from above categories = $7.16/st ore (mill feed)

Using the total cost equation only: Total = 105(7,429)~.303 = $7.05/st ore (mill feed)

(7.16n.05 = 1.016, 1.6% difference due to rounding in regression equations.)

SUMMARY

Cost models have been developed for two open pit models, six underground mine models, and eleven mill models. Additional models are available for estimating costs of access roads, powerlines, and tailings ponds. This pre print provides an introduction to cost models developed for Bureau Potential Supply studies. An expanded discussion, and full set of models, is found in Bureau IC 9298 by Camm (1991).

REFERENCES

Camm, T. W., 1992, ''The Development of Cost Models Using Regression Analysis," Preprint no. 92-48, SME Annual Meeting, 3 pp.

-' 1991, Simplified Cost Models for Prefeasibility Mineral Evaluations, BuMines IC 9298,35 pp.

Camm, T. W. and M. Smith, 1991, "A Review of Cost Estimating Methods for Prefeasibility Type Studies," Paper in Proceedings of the Second Canadian Conference on Computer Applications in the Mineral Indust!)', vol. 2, ed. by R. Poulin, R. C. T. Pakalnis, and A. L. Mular (Univ. British Columbia, Vancouver, BC), Sept. 15-18, pp. 563-

3

571.

U.S. Bureau of Mines, 1987, Bureau of Mines Cost Estimating System Handbook, (in two parts), 1. Surface and Underground Mining, BuMines IC 9142, 631 pp.

-' 1987, Bureau of Mines Cost Estimating System Handbook. (in two parts), 2. Mineral Processing, BuMines IC 9143, 565 pp.

Wetzel, N., D. Benjamin, L. Blackman, and R. Schantz, 1992, Economic Analysis of the Minerals Potential of the East Mojave National Scenic Area. California, BuMines OFR 56-92, Apr., 79 pp.

Table 2. CIP mill model (capacity range 1,000-20,000 st/d)

Category

Labor ............... . Equipment ............ . Steel ................ . Lube ................ . Construction material .... . Electricity ............ . Reagents ............. . Sales tax ............. .

Total ............. .

Capital cost, $

114,800(X)0.527 145,600(X)0.550

42,600(X)0.528 NAp

55,800(X)0.543 NAp NAp

14,600(X)0.545 3 n,000(X)0.540

Metric equivalent: st x 0.907 184 - metric ton (t). NAp Not applicable. X = Capacity of mill in short tons (st) per day mill feed.

Operating cost, $/st

484(X)-O·641 21.6(X)-O·463

0.993(X)0.0 11. 4( X) -0.463

NAp 26.8(X)-O·365 2.75(X)0.0

0.409(X) -0.057 105(X)-O·303

4

Table 3. Mine/mill total cost equations

Cost model

Open pit mine models: Small open pit Large open pit

Underground mine models: Block caving Cut-and-fill Room-and-pillar Shrinkage stope Sublevel longhole Vertical crater retreat

Mill models: Autoclave-CIL-EW CIL-EW CIP-EW CCD-MC Float-roast-Ieach Flotation, one product Flotation, two product Flotation, three product Gravity Heap leach Solvent extraction-EW

Metric equivalent: st x 0.907 184 = t. NAp Not applicable. X = Capacity in st per day.

Capital cost, $

160,000(X)O.515 2,670(X)O.917

64,800(Xr59

1,250,OOO(X)O.4{;1 97,600(X)O.644

179,000(X)o.62o 115,000(X)O.S52 45,200(X)O.747

96,500(X)O.770 50,000(X)O.74S

372,000(X)O.S40 414,000(X)0.584 481,000(X)o.SS2

92,600(X)O.667 82,500(X)O.702 83,600(X)O.708

135,300(X)0.529 296,500(X)0.512

14,600(X)o.s96

Operating cost, $/st

71.0(X)-Q.414 5. 14(X)-Q·148

48.4(X)-Q·217 279(X)-Q·294 35.5(X)-Q·l7l 74.9(X)-Q·160 41.9(X)-Q·181 51.0(X)-Q·206

78. 1 (X)-Q'!96 84.2(X) -Q.2Bl 105 (X)-Q·303 128(X)-Q·300 10 1 (X)-Q·24{; 121(X)-Q·33s 149(X)-Q·3s6 153(X)-Q·344

67.8(X)-Q·364 31.5(X)-Q·223 3.00(X)-Q·14S

Table 4. Depth factor, infmstructure, tailings equations

Cost model Cost equation

Underground mining depth factor: Capital cost, $ Operating cost, $/st

+ 371 + 180(D)(X)o.404 + 2,343/(X) + 0.440(D)/(X) + 0.OO163(D)

Access road capital cost, $/mi: 40 ft wide 60 ft wide 80 ft wide

Powerline capital cost, $/mi: 20 ft pole height 30 ft pole height 40 ft pole height

Tailings pond capital cost: Tailings pond, $ + $/acre Dam, $/linear ft Liner\ $/acre

Metric equivalents: acre x 4046.856 = m2; ft x 0.3048 = m; mi x 1.609 344 = km; st x 0.907 184 = metric ton (t).

X = Capacity of mine in st per day. D = Depth of shaft to bottom of ore body in ft. R = Length of road to construct in miles (mi). P = Length of powerline to construct in mi. A = Area of tailings pond required in acres. L = Length of impoundment dam to construct around tailings pond in ft. 1Liners are only required in certain states.

76,000(R) l12,500(R) l48,900(R)

298,200(P) 304,400(P) 310,400(P)

146,000 + 1,783(A) l61(L)

5(L) + 35,79O(A)

5

Figure 1.-Cut-and-filllllchen1atic.

Ore

Dore'

TYPICAL CIP/ELECTROWINNING CIRCUIT

Figure 2.-CIP mill flowlllheel

1,000,000

1§ :s "E '" ~ 0 ;; ui l-(/)

0 U

~ ~ U

100,000

10,000

v

1,000 1,000

10

-------

------

o 1,000

----

6

~ V V ~ ).--

10,000

CAPACITY, sUd material

OPEN PIT CAPITAL COSTS

------r---........ r--

/V

r------r----t--..

10,000

CAPACITY, sUd malerial

OPEN PIT OPERATING COSTS

V /

/V

100,000 200,000

""-t-..

----

100,000 200,000

Figure 3.-Open pit captial and operating costs (average 1989 dollars).

7

1---I-----1,-+-++---+--I-+++---+---} Block -,,// caving

~ Cut and --- I I :g 100,000 -j---t--+-t-t-+--I--+ till -1--//.,,-"-+--,""', ~R-oo...j..m-a-l-n-jc 1 t----t-----l-+-++--+--I-/---1fY'<::::>1'/-+, /" "'---+-/7"''-1 pillar

~ / // // - . j------Shrlnkage " .< -:;: f<.::. VCR E 1_- / ~

/~ ...... :/ ... 8 I ../'"' ./ ..-/," ._. Sublevel ...J f-"" ~..-'~ / . ,.' Ionghole ~ L'/ /~/ - .,.-~ 10,000 --t---t--+--..-+""+-,+::/","-,«---+---::-'-I-+-+-+---t----I'-+--t-I

--- ~/ "./ ........

........

1,000 -j-__ '-_-'---L---'-+ __ L-_-'-----'--'-+ __ '-_-'----'---'-I

100

100

-----

i :g

~ 10

CJ z

~ UJ Il. o

1 100

1,000 10,000

CAPACrrv, sUd

UNDERGROUND MINING CAPITAL COSTS

~ I'--

r--. ~ ----- ~ --r-- --1--- r----- ......... Cut and

fill Shrinkage

~ I~

I --'::.-

~ ..... ~ - r-::::: Sublevel ~ .. ...... longhole

'- ..... ~~~ '" -'J-. -. Block --'" caving

1,000 10,000 CAPACITY, sUd

UNDERGROUND MINING OPERATING COSTS

100,000

Room and pillar

100,000

Figure 4.-Underground mining capital and operating costs (average 1989 dollars).

~ 0 "0 "0

m :l 0 :5 CIi tii 0 (.)

~ c.. c( (.)

~ iii

15 "0

CIi tii 8 <.!l Z

~ a: LU c.. 0

1,000,000

100,000

10,000

.... 1,000

100

100

, 10

100

8

h-/-

I>?'

~ ~. v:<;: j/. /;;-'/ CCO ..-

V V

FIoavroaS1l1iich - 3-product flo /' /~ 2-prOduct i1

tallon otallon otaUon /< ' v./~ .. I-product II

./ L-- " .~ ... - I -, r.-: . k~/;. - Heap leach

V .- ...-v;,J~ ~ ~/' ", .- -I .... · - // ...-,,-

...-Autoclavelc'il ..-

VCIP ~ ~~. V

.... ....

~ , ~~

I ." .. ' I :~ -::-bll/ .. Gravity .... v'"

1,000 10,000

CAPACITY, sVd mill feed

MILLING CAPITAL COSTS

...............

.'-... ,.~ ~

, ...... 'S; . ::-.........

t-:-: ~~ ...... > 1"--,' . r--. ~~ I:::--.. ,~ " .......

Autoclave/Cll

.

100,000

.~ r--.. . FIoaVroastlleach

~ ~ K ~ ~ lcIc-...... ...... . ". I'-.... CCO

...... Gravity .................. " ~~ CIP " . . t--. ........ .

.... ''0.. H~leach~~

r--. i"-r--...... SXIEW

1-............ 1,000 10,000

CAPACITY, sVd mill leed

MILLING OPERATING COSTS

3-prod uct II I-product fl 2-product II

t--

otation olallon olallon

100,000

Figure 5.-Milling capital and operating costa (average 1989 dollars).