week 8

Question 1

what is a mineral deposit

Answer 1

• an accumulation of a potential ‘valuable’ mineral or metal
• poorly defined in terms of the quantity of metal/mineral, the tonnage of rock it is contained in etc.

Question 2

what is a mineral resource

Answer 2

• has demonstrated economic potential
• the essential parameters required for an economic assessment have been measured
• the costs to extract it have been determined

Question 3

what is a mineral reserve/ore reserve

Answer 3

• high level of geological knowledge and confidence
• full economic assessment conducted
• costs to extract less than value of resource
• deemed to be economically extractable

Question 4

key metrics for assessing revenue

Answer 4

• geology of the deposit
• density of the geological units (measured in g/cm^3 or t/m^3)
• metal/commodity grade
• metal/commodity value
• from this, we can calculate the in-situ ore value

Question 5

geology of the deposit

Answer 5

• total size - measured as a volume (m^3)
• sub-division of the volume into domains (geological units) that may have different grade or value characteristics

Question 6

density of the geological units

Answer 6

measured at sufficient frequency to properly represent all rock types to be mined, including the waste, overburden and ore types

Question 7

metal/commodity grade

Answer 7

expressed in the appropriate units e.g. grams/metric tonnes (gold, silver, PGE), percentage (iron ore, copper, zinc etc.), carats per tonne (diamonds)

Question 8

metal/commodity value

Answer 8

e.g. US$/ounce (gold), US$/pound or USc/dmtu (dry metric tonne unit) for iron ore etc.

Question 9

in-situ ore value

Answer 9

ore value (in US$) = VolumeDensityGrade*Value
however, while this is a useful number, it is not sufficient to determine the economic feasibility of the deposit

Question 10

how to calculate volume per lithological unit

Answer 10

• most deposits are buried so we need drilling to determine: how much, where?
• geological logging and interpretation - recognising different lithological units
• geological modelling: using specialist software to build a 3D model
• calculate volume per lithological unit

Question 11

how to calculate density and tonnage

Answer 11

bulk density:
- physical measurements
- geophysical techniques
tonnage calculation:
- tonnage = density*volume

Question 12

how is grade estimated

Answer 12

• grades of individual samples cannot be simply averaged to produce a resource estimate
• geostatistical modelling is used to estimate grade in blocks throughout the defined mineral resource
• each block has the same size but its grade varies

Question 13

describe spatial interpolation methods

Answer 13

• nearest neighbour - estimates the value of each data point by using the value of the nearest known data point
• inverse power of distance - estimates the value of each data point by taking a weighted average of known data points surrounding it
• ordinary kriging - the most common method. similar to IPD but more sophisticated and better for complex datasets
• local uniform conditioning - used when data spacing is too wide for linear regression techniques like kriging to be accurate