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Project Optimisation | Nov 2012| 1

Project OptimisationSimon Michaux & Andrew Lewis | November 2012

Project Optimisation | Nov 2012| 2

• Economic risk mitigation

• More sophisticated prediction & scheduling

• Potential to integrate engineering design steps into a coherent outcome

• More sophistication in ore characterisation and deposit knowledge is required on a greater scale

• Ability to justify and manage projects on a much bigger scale with a high capital risk and a longer time period for the start of profit return

• Ability for more accurate decision making in a challenging business environment

The industry is changing, we must change with it

A systems approach in design across the mining process is now considered the next generation of engineering

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Multifactor Productivity: The efficiency in which capital, labour, materials, services, and energy are utilised to generate a unit of product

The industry business environment is now more challenging where profit margins are being squeezed

Australian Bureau of Statistics 2011, Experimental Estimates of Industry Multifactor Productivity, 2010-11, ABS, Cat no: 5625.0.55.002, Canberra.

5060708090

100110

Inde

xed

2000

-01

= 10

0

Topp et al. (2008) ABS (2011)

It now takes 40% more inputs to generate a single unit of

mineral product

Australian Bureau of Statistics 2011, Experimental Estimates of Industry Multifactor Productivity, 2010-11, ABS, Cat no: 5625.0.55.002, Canberra.

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Project optimisation can mean the difference between success and failure in this challenging environment

NPV makes the first few years critical to successful operation

Plant design capacity

Fast run up to full

capacity Slow run up to partial capacity

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GeM Model

Economic Models

LS

LC

ROM

Leach

Crushers ProcessMine

LS

LC

ROM

Leach

Crushers ProcessMineFamily of Solutions

Data Collection

Mining Sequences

Mine Plan

Feedback to improve model

Constraints Constraints

LS

LC

ROM

Leach

Crushers ProcessMine

LS

LC

ROM

Leach

Crushers ProcessMine

LS

LC

ROM

Leach

Crushers ProcessMine

LS

LC

ROM

Leach

Crushers ProcessMine

Slope Models

1 1.5 2 2.5 3 3.5 4

x 108

0

0.02

0.04

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0.08

0.1

0.12

0.14

0.16

X

Probability Distribut ion of Expected Cash Flow @ PP-1

2.6 2.7 2.8 2.9 3 3.1 3.2 3.3 3.4 3.5 3.6

x 109

0

0.1

0.2

0.3

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x

F(x)

Empirical CDF

Cash flow stream

Capit

alInv

estm

e nt

Curre

ntM

in eP r

oj ect

V alu e

Production Period

Milli

onof

$

V

I

0t 1t 2t 3t 4t

()711tiiitWACCCFR==+

7t5t 6t

1 1. 5 2 2.5

x 108

0

0.02

0.04

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0.12

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Probability Distribution of Expected Cash Flow @ Last PP

Simulation

Confidence Model

0 5 10 15 20 25 30-1

0

1

2

3

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5

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7x 10

8 Stochastic Expected Cash Flow

Production Period

Cas

f Flo

w

1 1.5 2 2.5 3 3.5 4

x 108

0

0.02

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X

Probability Distribution of Expected Cash Flow @ PP-1

1.5 2 2.5 3 3.5 4 4.5

x 108

0

0.02

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Probability Distribution of Expected Cash Flow @ PP-2

1 1.5 2 2.5

x 108

0

0.02

0.04

0.06

0.08

0.1

0.12

X

Probability Distribution of Expected Cash Flow @ Last PP

Probability of cash flow can be assessed for each year.

Project Optimisation – Intelligent Engineering

Data transfer technology now makes this possible early in the design process

• All aspects of the mining process can now be designed to a level of sophistication where the outputs can be used as inputs into other engineering operations

• All engineering operations can then be optimised together

• The key is to do this in an iterative loop several times to ensure overall operational efficiency

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Geological Assays Petrophysical Equotip Comminution

Multi-disciplinary data collection

Class Group

Copper Domain

Throughput Domain

Recovery Domain

Group C Group B

Group B Group C

Group A Group D

Group A Group D

Group C Group A

Group D Group A

Geometallurgical domains in block model

Sophisticated data collection is the key (Geometallurgy)

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Process Attribute Ore Domain 1 Ore Domain 2 Ore Domain 3 Ore Domain 4Ore ValueValuable metal 1 (Au) grade 0.6g/t - - 1.1g/tValuable metal 2 (Cu) grade 1.20% - - 0.50%Valuable metal 3 (Ag) grade - 2.2g/t 1.3g/t -Valuable metal 3 (Mo) grade - 0.99% 0.47% -Valuable metal x (?) gradePenalty elements Yes (High As content) No No Yes (Low As content )

Ore CharatersiationMineral liberation size 75 micron 30 mciron 160 micron 212 micronProperty deportment siganture Yes (Upgrade factor 2.1) No No Yes (Upgrade factor 1.6)Ore sorting feasible Yes No No NoEnergetic conditioning feasible No No No NoImpact breakage energy consumption High High Very High mediumLow energy abrasion energy consumption High High High LowBed breakage energy consumption Medium Medium Medium HighGrinding Energy consumption High Medium High LowFine grinding energy consumption - Medium High -

Separation ProcessFlotation recovery - High Medium -Flotation kinetics - Medium Medium -Leaching recovery Medium - - LowLeaching kinetics Medium - - LowGravity Au recovery Yes - - NoPressure oxidisation required for Au recovery No - - Yes

Engineering Design Request Floation circuit? - Yes Yes -Concetrate regrind circuit? - Yes No -Leach dump? No - - YesLeach heap? Yes - - NoLeach tank? No No No NoCiL carbon and leach circuit? Yes - - NoOre sorting technology? Yes - - NoEnergetic conditioning technology? No No No NoCrushing? Yes Yes Yes YesGrinding? No Yes Yes NoHPGR? No No Yes NoFine grinding? No Yes No No

Ore Domain 2 Ore Domain 4 Ore Domain 7

Engineering Recommendations for Project Optimisation

So what is the most cost effective option?

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Project optimisation for small and large studies

pit design, production plan & scheduledesign criteria, flowsheet, mass balance etc

block modelgeomet data (mill, float, leach, geomechanical test data)

option and scenarioanalysis

AMDAD/Ausenco LiteO Whittle/Ausenco EO

PFS

FS

best possible optimised outcome

Ausenco now has access to this expertise

Project Optimisation | Nov 2012| 8

Ausenco Project Optimisation

• When industry is in a growth cycleo How can we optimise design, construction and production to

help your business make more money most efficiently

• When industry is in a contraction cycleo How can we optimise design, construction and production to

help your business to survive in a challenging environment

• Flexible decisions can now be made in a defendable form, fit for purpose to the macro business environment

Engineering expertise merges with corporate decision making

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Thank you for your time

Dr Simon Michaux

 

Senior Process Engineer (Geometallurgy)

Technical Solutions

Minerals & Metals

[email protected]

Dr Andrew Lewis

 

Consultant (Optimisation)

Technical Solutions

Minerals & Metals

[email protected]