UNIVERSITY OF PRETORIA Department of Geology GLY 352 Assignment 2 Ore reserve estimation Due: 24 August 2020 30 Marks NB: Please show all calculations and remember to use suitable conversions when needed Question 1 (3) An ore deposit has a concentration of 2.3% Cu and 3.0 g/t Au (average grade). • • • Deposit dimensions: length (horizontal) = 640m, width (horizontal) = 300m, depth (vertical)= 100m. Specific Gravity (Density) = 2.1g/cm3 (or tonne/m3); Metal value: Cu= $2.86/lb and Au = $1944/ounce (as of 16 August 2020) Calculate: 1a) The tonnage of the mineral deposit. 1b) How many tonnes of Cu and Au are present in the ore deposit? Question 2 (8) AVERAGE GRADE ESTIMATION (along a borehole) A diamond drill hole has been sampled and assay values are in table below. Average Grade formula: 2a) Calculate the average grade of the drill hole at 2.8% Cu cut-off grade (do not calculate sections below cut-off) (4). AVERAGE GRADE ESTIMATION (along a borehole) Assay values on tin in a drill hole are in table below. 2b) Calculate the average grade of the intersection at 3.0 % Sn cut-off grade (do not calculate sections below cut-off) (4). Question 3 (3) The average grade in a drill hole is 2.7% Ni (per tonne, as average), and assuming a nickel price of $6.5 per pound, calculate the Ni value per tonne (for that specific drill). Question 4 (3) Estimation of the value of a deposit (for the conversion: 1 ton=2000 pounds; 1 tonne=2200 pounds, so 1 tonne = 1 ton x 1,102) Calculate the gross value of a deposit (in $/ton and $/tonne) in a copper orebody averaging 0.90% by weight Cu if the market price of Cu is $2.4/lb, assuming that the cost of mining and processing is $9,00/ton. Overall recovery, based on metallurgical testing, is expected to be 85% of the copper. Question 5 (13) In the feasibility study, the total value of the placer mine has to be determined. In the study these data have been estimated: • operational costs (OPEX) = 650 USD/tonne; • average Sn grade = 4.5%. • The commodity (Sn) value corresponds to 7.5 USD/lb. Planning to open the mine around the dimensions of the initial mine will approximately be: width = 500m, length = 800 m, depth = 200 m. Specific gravity of 2.5 g/cm3. Calculate 5a) Cut off. Also, report if mining is viable or not (Commodity value = 7.5 USD/lb) (2) 5b) Tonnage of the deposit (2) 5c) Total tons of Sn (2) 5d) Total value of the mine (2) 5e) Calculate the total monthly costs (3) based on: • Personnel costs (75 employees at average daily salary per worker = 120 USD) • Equipment costs (based on a n.1 forty- ton excavator and n.1 thirty-ton bucket; each machine works 24 hours/day, 7 days a week at a cost of 60 USD/hour) • Water and electricity expenses: 5000 USD/day 5f) If the total revenue from mining is estimated at around 10% of the total costs, calculate how many years will be needed to recover for the initial investment of 5 000 000 USD (2)
