Chapter 4 Mining Economics

Question 1

What drives all mining activities?

Answer 1

Economics drives all mining activities.

Question 2

What condition must be met for a mining operation to be economically viable?

Answer 2

The projected value of a mine’s diamonds must be higher than the cost of mining.

Question 3

Why is so much time, work, and expense required before making a mining commitment?

Answer 3

To analyze a deposit and ensure it is worth the investment.

Question 4

What adds to the costs of exploration and mining diamonds in Siberia?

Answer 4

Frigid conditions, subzero temperatures make it difficult to keep people and machines functioning.

Question 5

Why made Argyle mine economically viable?

Answer 5

High concentration of diamonds and it’s pink and red diamonds.

Question 6

What factors are evaluated to determine a mine’s potential?

Answer 6

Deposit size. Rough diamond concentration. Rough diamond size and quality.

Question 7

How is measured rough diamond concentration?

Answer 7

It’s measured by ore grade.

Question 8

What is compared to the projected cost of establishing and operating a mine?

Answer 8

The estimate of the average dollar-per-carat value of diamonds is compared.

Question 9

Why is the average dollar-per-carat value of diamonds estimated?

Answer 9

To determine whether it justifies the projected cost of establishing and operating the mine.

Question 10

What mining companies must to consider?

Answer 10

Geography, climate, environmental impact, and even the socioeconomic stability of a target area.

Question 11

What is common thing for all diamond mining operation?

Answer 11

Mining is complex, time and capital consuming, and high risky operation.

Question 12

Exploration part 1:

Answer 12

Decide where to look: exploration, licensing, exploration permits, lease area, research, on-the-ground prospecting

Question 13

Exploration part 2:

Answer 13

Narrowing search, locate deposits, Test deposits part 1: surveying, mapping, geochemical analysis, financing, research past finds, microdiamond testing, character sampling.

Question 14

Resource estimation part 1:

Answer 14

Test deposit viability part2: Bulk sampling, resource estimation and evaluation

Question 15

Resource estimation part 2:

Answer 15

Asses mining economics: feasibility studies, financing environmental studies, socioeconomic studies, final profitability assessment and evaluation

Question 16

Mining part 1:

Answer 16

Mining operation and production: construction, mining, ongoing resource assessment, mine maintenance

Question 17

Mining part 2:

Answer 17

Generate revenue