Articles for May 2015

23. Project Economics – Simple 1D Model

mining desktop study
In a previous article I outlined my thoughts on the usefulness of early stage financial modelling (“Early Stage “What-if” Economic Analysis – How Useful Is It?”).     My observation was that it is useful to take a few days to build a simple cashflow model yourself to help you understand your project.

By “simple” I mean simple.

This blog describes one of the techniques that I use to take a quick look at any project; whether it is for a client wishing to understand his project at a high level; or whether it is a project that I have read about.  There is no study nor production schedule available yet.
It takes about 10 minutes to plug the numbers into my template to get quick results.  The image below is an example of the simple model that I use, which anyone can build for themselves in no time.

1D Cashflow Model

I term this a one dimensional (“1D”) model since it doesn’t require the typical X-Y matrix with years across the top and production data down the page.   The 1D model simply relies on life of mine (“LOM”) totals to estimate the total revenue, total operating cost, and total profit.  This determines how much capital expenditure the project can tolerate.  I do this analysis on a pre-tax basis to keep things simple.
Using estimated metal prices and recoveries, the first step is to calculate the incremental revenue generated by each tonne of ore (see a previous article “11. Rock Value Calculator – What’s My Rock Worth?”).   Next that revenue per tonne is multiplied by the total ore tonnage to arrive at the total revenue over the life of mine.
The second step is to determine the life of mine operating cost, and again this simple calculation is based on estimated unit operating costs multiplied by the total tonnages being handled.
The third step is to calculate the life of mine profit based on total revenue minus total operating cost.
The potential net cashflow would be calculated by deducting an assumed capital cost from the life-of-mine profit.  The average annual cashflow is estimated based on the net cashflow divided by the mine life.  An approximate NPV can be calculated by determining the Present Value of a series of annual payments at a certain discount rate.

You need to understand your project

One can easily evaluate the potential impact of changing metal prices, changing recoveries, ore tonnages, operating costs, etc. to show what the economic or operational drivers are for this project.  This can help you understand what you might need in order to make the project viable.
The bottom line is that a 1D economic calculation is very simplistic but still provides a conceptual vision for a project.  The next step in the economic modelling process would use a 2D model based on an annual production schedule, but the 1D approach is a first step in looking at a potential project.  It doesn’t take a lot of time.
Update:  Interestingly there is a Mining Intelligence website that provides an online calculator for evaluating mining project economics.   It is a black box approach, in that you simply input your parameters and it outputs the results.   I have not used it nor do I know what the cost is.  Unfortunately the website does not provide information on the qualifications or backgrounds of the people who have built the model but it seems to be affiliated with InfoMine.  If anyone has experience using the economic modelling service, please share your thoughts.
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22. Oil Sands vs Tar Sands – Something I’ve Been Wondering About

tar sand mining
Watching the television news in Canada these days, one sees the environmental opponents of the oil sands parading around with signs that say “Stop the Tar Sands”.  One way to distinguish whether someone is for or against the oil sands is to see what terminology they use.  Do they call them “oil sands” (i.e. pro groups) or “tar sands” (i.e.anti groups)?   Personally raw bitumen seems more tar-like than oil-like so the enviro’s seem to have it right.

Is it Oil Sands or Tar Sands

Going back many decades the oil sands were originally called the tar sands.  I’m not sure when the terminology shifted, but in the mid-1960’s the first large scale mining operation was called Great Canadian Oil Sands (GCOS).  I’m not sure why the terminology shift from tar to oil, but maybe it was related to the fact that “tar” was considered something of low perceived value while “oil” was considered something of high economic value.
Jed Clampett and familyLook at what oil did for the economic situation of Jed Clampett on the Beverly Hillbillies.  How about the show “Dallas”? There was also a lot of money and scotch drinking.
Back then we all wanted to discover an oil well in our backyard so perhaps the term “oil” implied some level of elegance and prosperity.
These days when one sees the term “oil” in the news, it tends to be associated with negatives.  We see oil references to rail explosions, pipeline ruptures, tanker spills, job layoffs, fracing, carbon emissions, Middle East wars, and protests.
These days I don’t know if there is any intangible benefit in using the term “oil” to describe your product anymore.  Maybe there is actually some intrinsic harm in doing so.
Tar sand bitumenTar (or bitumen) on the other hand, is a molasses-like substance generally viewed by the public as a material used to repair our streets and patch our roofs. A tar spill is not going to flow anywhere; it will barely flow out of the tank it is held in.  What is there not to like about tar?
So next time there is a protest with signs being held up to “Stop the Tar Sands”, the oil companies should shrug their shoulders, jump on the band wagon, and say “Yeah, tar, that’s us. So what are you worried about?”.
They should try to commandeer the word “tar” back from the protest groups since there really is nothing wrong with tar.  There seems to be a lot wrong with oil.

 

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21. 3D Printing – A Simple Idea

3D models
We hear more and more about 3D printing and what it is able to do. 3D printers have come down in price and can be bought for under $500.   Here is an example of using a 3D printer from a recent project that I consulted on.
The open pit was going to be located in hilly terrain, and issues related to haul road access, waste dump sites, and leach pad location were all important.   The client used a 3D printer to create a small desktop model of the terrain, which was given to each of the consulting firms.
The photo below shows the scale of the model.
3D printed topographyMembers of the engineering team were each given their own 3D model to take back to their offices.  Putting one of these on your desk helps with familiarity of the overall site and allows you to better understand the siting and drainage issues.
Topographic maps may give data on actual elevations and distances, but even a small 3D model gives you a feel for the site.    The model shown above was for undisturbed topography but one could easily print off a similar model once the final pit and dump design is done.
With the current three-dimensional printing capabilities, creating simple 3D topographic models for the engineering team is feasible and I recommend doing so.
At the same time provide the Owner’s team with their own models, helping them understand the site issues that must be dealt with.
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20. Work Breakdown Structures – Don’t Forget About The WBS

mining project WBS
Normally at the start of a mining study, the team members receive a matrix of responsibilities.  This table shows which people or groups are responsible for different aspects of the study, i.e. who is responsible for geology, for mine design, for process design, infrastructure, etc.  This is great tool and a necessity in making sure that everyone knows what they are supposed to do.   However it doesn’t really tell them “how” they need to do it.  How are their deliverables to be structured?

Sometimes the WBS is forgotten

What often gets forgotten in early stage studies is providing the team members a Work Breakdown Structure (“WBS”).   I consider the WBS an equally important component as the responsibility matrix and both should always be provided.
The WBS is a hierarchical breakdown of the project into phases, deliverables, and work packages usually associated with cost estimation. It is a tree based structure, developed by starting with the final objective and then dividing that into manageable components based on size, duration, and responsibility.  Typically this is done for the capital cost estimate, breaking it down into individual cost areas and cost components.  A WBS can also be used for the operating cost estimate.
request for propoalsThe WBS can provide the following information to the team:
  • It assigns the costing responsibility to specific people or group so each know what must be delivered.
  • It provides a consistent format for developing and reporting the capital costs (and operating costs).
  • It helps ensure that no cost components get omitted and no costs get double counted.
  • It provides the cashflow modeler with a clean format to import the capital cost into the cashflow model.

Any study can benefit from a WBS

Typically a WBS is developed for pre-feasibility and feasibility studies but is often ignored at the PEA stage.  Some feel it is too detailed for that level of study.  I don’t feel this is the case.  The WBS is a communication tool to confirm responsibilities.  Thus even a simplified WBS is still useful at the PEA stage.
I ave seen some instances where a WBS has been created but does not get wide distribution to the entire team.  The WBS should be provided to everyone and ideally a team session be held to walk through the WBS structure.  The idea is not make everyone a costing expert, but rather to ensure all understand how the project cost estimate will be structured.

Conclusion

The bottom line is that regardless of the level of study, a WBS should always be created.
Some will say the WBS is not required for early stage studies but I have found benefits in having one, at least for the capital cost estimate.   Obviously the level of detail in the WBS should be appropriate to the level of the study.
A competent Study Manager can easily create an initial WBS, thereby mitigating some headaches when the final study is being assembled.
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19. Potash Ore Grades – Check the Units

KCl vs K2O
Having worked with the potash industry for many years, I have reviewed numerous geological reports for projects in Canada, Asia, Russia, and Africa.  One of the curious things that I have seen is the reporting of resource  grades in two different units; either as potassium oxide (K2O) or potassium chloride (KCl).

Is it K2O or KCl ?

Standard practice in the Saskatchewan industry is reporting ore grades using K2O units, with typical head grades in the range of 25% K2O.  Many of the international projects, but not all, have decided to use the KCl units. Therefore when comparing potash resource grades between deposits, one must be vigilant for the units used since there is a significant difference.
The conversion from K2O to KCl is based on the formula K2O = 0.6317 x KCl.   So a grade of 25% K20 is equal to 25/0.6317 = 39.6% KCl.  The KCl grade value is significantly higher.  The unit issue is relevant with low grade deposits, were an actual grade of 15% K2O may be reported as 23.7% KCl.  One might see the ore grade in KCl and assume it is comparable to Saskatchewan potash grades, when in reality they are quite different.

Concentration Ratio is the Key

When looking at different potash projects, particularly those involving underground mining, a key economic factor is the concentration ratio.  This ratio represents the tonnes of potash ore needed to produce a tonne of final saleable product.
Typically the final potash product has a grade of 60% K2O.  Therefore a potash ore with a grade of 25% K2O would have a concentration ratio of about 2.4:1 (60%/25%).  This means that 2.4 tonnes of potash must be processed to produce 1 tonne of product (ignoring the process recovery factor).   For a lower grade ore with a head grade of say 15% K2O, the concentration ratio is 4:1 (60%/15%).

potash mining

This gives a rough sense for the comparable operation size required to meet the same final product production levels.  This also gives a indication for the relative amounts of salt tailings requiring disposal.  Low grade ore can generate significant quantities of tailings, the disposal of which is becoming a larger permitting issue.
In the past gold grades have been reported as “oz/ton” or currently as “g/t”, but most geological reports today are consistent with “g/t”.  Sometimes US based gold projects may use “oz/ton” however the difference in reported grade are fairly obvious between grams and ounces.  That is not the case with potash grades.
The bottom line is that potash is one commodity that will use different units when reporting ore grades.  Investors and reviewer must be aware of which unit are being used.

 

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18. Importance of a Study Manager – That’s the Key

project manager
Over my career I have worked as an engineering team member on numerous projects and studies.  Some studies went better than others.  Unfortunately some dragged on, ran over budget, and ended up delivering a less than optimal product once all was said and done.
There are numerous factors that will have influence on the successful completion of a study.   They are related to the quality of the technical team, the allowable budget, the time window, and the direction from the Owner.  However the key factor that I observed is the competency of the Study Manager (or Project Manager).

Study Managers must wear many hats

They are responsible for being the main liaison with the Owner. They must herd a team of geologist and engineers in the same direction. They must ensure that technical quality and consistency is maintained by the entire team.  They are responsible for ensuring that budgets and timelines are being met.  The combination of all of these responsibilities can be an onerous mission,  more so depending on the quality of the Owner’s team.
Every technical team has those team members that will deliver quality within timelines consistently.  There are also team members that have difficulty meeting targets.  The Study Manager, early on, needs to figure out who fits into which category and then must be able to work with each.

Studies can quickly grind to a halt

An entire study can quickly grind to a halt simply because one key component becomes bogged down. A good Study Manager may occasionally ruffle some feathers but is always appreciated by the team knowing that everyone will be held to account.
The Study Manager also needs to understand the objectives of the Owner and ensure the team is working towards those objectives.
The Study Manager however must also be honest with the Owner, keeping him informed of the actual progress and warn if some target will not be met.
The Study Manager coordinates communication within the team and with the Owner.  Some managers are excellent at this while others fall into the trap of communicating on a “need-to-know” basis or “too late” basis.   Timely and thorough communication is important.  Don’t assume that one is hampering progress by involving the team in frequent communications.

Environmental Assessments need engineering input

Often the Environmental Impact Assessment is being conducted concurrently with an engineering study.  The level of internal and external communication now becomes even more critical due to the large number of technical disciplines involved.
It is not uncommon for EIA’s to make commitments  or agree to operating conditions that have not been signed off by the engineering team.

You should approve the Study Manager

When approving the consultant’s Study Manager, keep in mind that in some instances you may find that different managers within the same organization may have different internal authority.  For example, if technical people are needed on another project, some managers are able to keep their team together.  Other managers may lose team members to the other project if that manager has more authority.  Losing manpower doesn’t help a study progress,  so if possible try to get a sense for the position that Study Manager has in the organization.

Conclusion

The bottom line is that when a project Owner has received proposals for a study and is in the process of awarding that job, the most important consideration is who will be the Study Manager.  If possible meet or chat about how they will manage the study and what their experience is.  Check references if possible.
The voluminous proposals provided by consulting firms contain a lot of information like Gantt charts, organizational charts, cost estimates, team resumes, safety plan, and corporate project experience.  Focus on the Study Manager. Don’t assume they are simply an administrator scheduling meetings and issuing monthly reports. They are the key to success.
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17. Directional Drilling Open Pit Dewatering Wells – Great Idea

open pit dewatering
I read an interesting article in the Mining Magazine May 2015 edition called “Top 10 Technologies”.  One of the new technologies that jumped out at me is the capability to directionally drill open pit dewatering wells.   This is an oil field technology from Schlumberger Water Services that was going to be applied to mining.
One of my past roles was engineering for the Diavik diamond mine in northern Canada.  The granitic rock mass was geotechnically very competent with a limited amount of jointing and fracturing.
Groundwater seepage from a partly permafrost pit wall could create a host of operational problems in winter. Most of the groundwater flows were predicted to be along a few main structures or along single open joints.
Generally these structures were near vertical, which created a problem when trying to intercept them with vertically drilled pumping wells.  Either you hit one or you didn’t.

The use of directional drilling of pumping wells is a great innovation

It gives the opportunity to bend the pumping well to a angled orientation, allowing the well bore to cut across vertical structures rather than paralleling them.   In addition, one could drill pumping wells near the pit crest targeting the ultimate pit bottom.  This may help improve drainage near the operating benches as the pit deepens and may eliminate the need to install inpit pumping wells.
Some open pits have constructed underground drainage galleries around the pit circumference to help intercept groundwater seepage.  Possibly directionally drilling aligned parallel to the pit wall can replace the need for these high cost drainage galleries.
The bottom line is that the directional drilling innovation makes a lot of sense and mine operators should take a look at it.  It might help improve their pit dewatering systems.
If anyone has experience with directionally drilled dewatering wells, please let us know.
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16. Request For Proposal (“RFP”) – Always Prepare One

Mining request for proposal
When it comes to time to gather costs for any type of engineering study, whether small or large, whether sole sourced or competitively bid, it is always a good idea to prepare a Request For Proposal (“RFP”) document.
An RFP is better than a verbal phone call to a consultant describing what you want.  Its better than a cursory email outlining what you want. In many cases the RFP doesn’t need to be a complex document; however RFP’s are appreciated by everyone involved.

The RFP doesn’t need to be complicated

executive meetingFrom an owner’s perspective, preparing an RFP gives the opportunity to collect the thoughts on the scope of study needed, on the deliverables required, and on the timing.   The RFP will outline this for the consultants and simultaneously help the owner’s team to get on the same page themselves.  The RFP is the opportunity for the owner to tell the consultants exactly what they are looking for in the study and specifically what they want to see in the proposal.
From a consultant’s perspective, receiving an RFP is preferred since having a detailed scope of work laid out means they don’t need to guess the scope when preparing their cost estimate.  It will be clear to the consultant what work is “in scope” and if ultimately extra services are required then “out-of-scope” work can be defended.   An RFP also gives the consultant some reassurance that the owner has put consideration into exactly what they want them to do.

What to include in the RFP

The RFP that is sent to bidding consultants should contain (at a minimum) the items listed below. A sole sourced study can have a scaled back RFP but some of these key items should be maintained.   Much of this RFP information can be a single template document that will be modified if different scopes of work will be sent to different consultants (e.g. tailings design, pit geotechnical, groundwater, feasibility study, etc.).
  • Project Introduction (a high level overview of the project and the Owner).
  • Table of Responsibilities for the Study (if other consultants are being involved in different areas).
  • Scope of Work (for this Proposal), and highlight any specific exclusions from the scope.
  • Additional Requirements (update meetings, monthly reports, timesheets, documentation, etc.)
  • Schedule (the timing for the proposal, job award date, study kickoff, and completion date).
  • Instructions to the Bidder (e.g. what information should be provided in each proposal and in what format).
  • Other (the legal rights of the Owner, confidentiality statement, how proposals will be evaluated, etc.).

Specifying format makes it easier to compare proposals

If a company is competitively bidding the study, it can be easier to compare multiple proposals if certain parts are presented in the exact same format.  Usually different consulting firms have their own proposal format, which is fine, however certain sections of the proposal should be made easily comparable.
The RFP can request that each proposal should contain (at a minimum):
  • Confirmation of the scope of work based on the RFP, which may be more detailed than the RFP itself.
  • List of exclusions.
  • List of final deliverables.
  • Proposed Study Manager, resume and relevant study management experience.
  • Proposed team members, organizational structure by areas of responsibility, and resumes.
  • Cost estimate on a not-to-exceed basis for each area, subdivided by team member, hours and unit rates ,and possibly in a specific table format.
  • A fee table for the various job classifications that would be applied to out-of-scope additional man hours.
  • All indirect costs, administrative costs, indicating mark-ups (if any).
  • Miscellaneous disbursements (i.e., airfares, hotel, vehicles) and indicate if there are mark-ups.
  • Detailed study schedule to completion.
  • Payment schedule.
  • Specify if there are any potential conflicts of interest with other projects.

Conclusion

The bottom line is that an owner should always take the time to prepare some type of RFP for any study they want to undertake.  The owner should also request a consultant proposal based on that RFP, even if it is being sole sourced to one consultant.
Depending on the size and nature of the study, one can use judgement on how detailed the RFP or consultant’s proposal must be, but one should always have the proper documentation in place beforehand.
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15. Due Diligence Data Rooms – Help!

Mining reviews
The statement “Have a look in the data room, it’s all in there” can bring a cold sweat to many an engineer undertaking a due diligence review.  How many of you, during a due diligence, recall being given FTP access to a data room that is full of highly disorganized folders and sub-folders, files with cryptic names, different updates of the same file in different folders?

It can be like looking for a needle in a haystack.

It can be difficult to determine which files are actually important and still relevant and which files have been simply dumped into the room. There is nothing worse than spending a day reviewing an Excel model only to find out that it wasn’t the latest version and a different un-related folder has the correct version.
Data rooms are generally created for due diligence exercises or during advanced engineering. Regardless of the purpose, it is helpful for all involved  to have some type of a document control person who understands what is in the data room, what is important, and what is non-essential.
Large projects may often have an dedicated document control person to manage the data room.  However smaller companies in a due diligence phase may tend to dump all the electronic files they have into the data room, including email transcripts, and sort them into different folders hopefully.
It’s still up to the user to dig through the files to find what they need.  This can be a time consuming task, costing everyone money in wasted time.

Some type of organization to the data room is key

Comprehensive searchable document management systems such as Ansarada, Aconex, SharePoint, and others are available.  They can be pricey and will require a team mindset to organize and catalog the information put into them.  However a properly implemented system can make it easier to search for files, keywords, and the latest versions of files. “Properly implemented” means that the entire team takes time when putting information in to ensure it is properly tagged. However even such systems can become repositories for hundreds or thousands of files.
When using a cloud-based data room or FTP site, try to select one that allows bulk downloading of documents rather than only allowing one file at a time.
Some data rooms, for security and tracking purposes, require users to be online in order to open a document, even documents downloaded onto your computer.  This makes it difficult to work when one doesn’t have internet access.
Some data rooms limit the cut & pasting ability of the documents.  This can make it difficult to prepare your findings report and you wish to include copied images from the report.

Conclusion

The bottom line is that data room management is important although I don’t know if there is any single magic solution.
Small mining companies may have tight budgets and a limited management team so organizing data properly isn’t high on their priority list.   I suggest to anyone organizing a data room, please take the time to properly set up the folder structure, develop a single bibliography of what files are in there, and assign a person to be familiar with the general contents of the data room.
Unless its a legal case involving lawyers, don’t just dump in everything. Avoid unnecessary data or “work in progress” files that are not actually required by anyone.
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14. Miners – Why Have Your Own Independent Consultant?

PEA consultants
Over the years I have worked in different roles; as an independent consultant; as a member of a large consulting team; and as owner’s representative managing consultants.   I have learned that there is an industry role for both the independent consultant and larger consulting firms.

Large versus small teams

A previous blog (“9. Large Consulting Firms or Small Firms – Any Difference?”) discusses where I feel the large and small consultants fit into the overall picture.   Large technical teams are required where there are broader scopes of work, significant effort levels, and multiple skills sets are needed.
Independent consultants are a different option.  They are best suited for assisting the owner directly, either independently or as part of an advisory team.  On occasion the independent engineer might also be on the Board of Directors.  Either way, non-technical management should have easy access to in-house advisory capability for brainstorming or just to bounce ideas off of.
Where the small independent consultants can differentiate themselves are as follows;
  • They don’t bring a lot of extra personnel onto the job.  They keep focus only on what is needed and can usually pull in other experts for specific tasks.
  • They can provide unbiased advice, without larger firm issues related to both legal and  business development.  The independent consultant does not have the motive to win a feasibility study or EPCM contract.
  • One can develop a long term working relationship with the consultant.  Everyone gets familiar with each other’s objectives and goals.
  • They can work efficiently at a pace of their own choosing.  This possibly results in lower costs and faster timelines.  I know of independent consultants that work nights and weekends to meet deliverable schedules.
  • They can provide long term stability since they won’t have employee turnover.  Personally I was involved on and off with an international operating mine for over 15 years.  The staff at the mine site had significant turnover (partly due to promised corporate transfers).  I ended up being the only constant.  I knew the history and had copies of lost reports.  I knew what was done previously and why, thereby avoiding re-inventing the wheel each time there was a new technical lead at site.

Stocks options to consultants

A point of discussion is whether the independent consultants should receive stock option compensation.  I have been in both situations; i.e. where I have received stock options and where I haven’t.
Awarding stock options could eliminate the “independent” nature of the relationship and hence negated the ability to sign off as an independent QP.  In some circumstances, the company may not require the independent consultant to be an independent QP since they fulfill more of an advisory role for the company.
One advantage of awarding stock options is the consultant may become more beholden to the project.  They feel it is their project too, rather than simply acting as an adviser.
Conversely the company may prefer the consultant doesn’t have any direct ownership so that their advice can be viewed as being unbiased.
I personally feel that awarding stock options is a good way to foster long term commitment from the consultant.  Without any financial inducement, its a lot easier to walk away.

Conclusion

The bottom line is that independent consultants have a role to play and should be part of most owner’s teams, whether on the Board or on an Advisory Panel.   The independent consultants can be selected based on their technical specialization (i.e. exploration, resource modelling, mining, metallurgy, environmental) and provide valuable part time guidance to the company.
The caveat is to ensure that the consultant is technically capable.  I have seen instances where certain members of the advisory panel were giving poor advice.  Others on the panel would see it, but not say anything out of professional courtesy.
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13. Pit Wall Angles and Bench Width – How Do They Relate?

open pit slopes
The wall of an open pit wall will consist of a series of stacked benches.  Geotechnical engineers will normally provide the pit slope design criteria based on the inter-ramp angle (“IRA”) for various sectors around the pit.  The IRA represents the toe-to-toe slope angle, as shown in the diagram below.

Pit Slope Image for post

The inter-ramp angle can be created in many ways, depending on the bench height (“BH”), bench face angle, and the catch bench or berm width.  Different combinations of these can be used to develop the same inter-ramp angle.
Typically the bench face angle (“BFA”) will be dictated by the rock strength, the structural fabric, and whether controlled blasting is used (minimizing damage to the walls).   The BFA may vary around the pit or in different rock types, but it typically is in the range of 60° to 75°.

Open Pit Slope

The catch bench (“CB”) or berm is used to catch spalling rock and prevent it from rolling down the pit wall,  creating a safety hazard.  A rule of thumb is that the catch bench width should be according to the formula 4.5m + 0.2H, where H is the height of the bench.   This means the recommended catch bench width for a 5m high bench should be about 5.5m; for a 10m high bench it should be 6.5m; and for 15m high bench it should be 7.5 metres.
Double benching (or triple benching) is used where the inter-ramp slopes angles are steep enough that single benching would result in an overly flatten slope.   For example if the inter-ramp slope is 50° and the BFA is 70°, then the corresponding calculated catch bench width would be 2.4 metres to achieve the 50° IRA.  However such a small catch bench would be ineffective in catching ravelling rock.
If one double benched (i.e. left a catch bench every 10m instead of every 5m), then the calculated catch bench width would be 4.8 metres.  If one triple benched (i.e. left a catch bench every 15m), then the recommended width would be 7.1 metres.  Hence triple benching would be suggested in this case, assuming the rock mass is of sufficient strength to sustain a 15m high face.
A simple interactive calculator (Bench Slope Calculator) has been prepared to show the relationship between all of these factors.  A screenshot of the calculator is shown below.  It allows one either to calculate the IRA given a set of bench height, BFA, and catch bench criteria; or calculate the catch bench width given the height, BFA, and IRA criteria.  The yellow shaded cells represent input cells.

Bench Slope Calculator Pic

Single Bench Height (BH):  this is the input height of a single operating bench.
No. of Benches between catch benches:   this is the input for single, double, or triple benching.
Total Height (TH):  this is the calculated total height (# of benches X single bench height)
Bench Face Angle (BFA):  this is the input bench face angle, in degrees
Catch bench (CB):  this is the width of the catch bench, either as an input or a calculated value.
Inter-Ramp Angle (IRA): this is the slope angle in degrees, either as a calculated value or an input.
When double or triple benching, sometimes a small 1-2m berm may be left between benches due to the inability of the blasthole drill to get right against the pit wall when drllling off the next bench.  The width of the drill berm can possibly be eliminated by drilling the entire double bench or using smaller drills.
Sometimes one may see the term “geotechnical berm”.   In some pit designs a large bench is introduced periodically, e.g. every 120m-180m in height, which acts as another means with which to catch ravelling rock.

Conclusion

The bottom line is that the inter-ramp angle can be achieved in different ways depending on various components of the slope profile.  Safety is of the utmost importance and therefore the adequate sizing of the catch bench is important, as is the ability to access the benches and clean up the rubble buildup.  Double and triple benching maybe required in some circumstances to achieve the design wall angles yet maintain safety catch bench widths.
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12. Financings – It Helps to Have a Credible Path Forward

mine economics
Update: This blog was initially written in May 2015, however not much as changed to the end of 2018.
Let me say the obvious; the state of the junior mining market is not great these days.  The number of financings is down and it seems there are a lot of companies struggling to get their piece of the financing pie.   People mention to me that there actually is a fair bit of private equity funding available but only for the right projects.
I have heard from geologist colleagues that financing grass-roots exploration is still extremely difficult.  That is unless company management has had past successes or is well connected to the money scene.
I’m told that 43-101 resource estimates alone no longer generate much excitement.  For projects to be “on the radar” they need to be advanced to at least the PEA stage.  It seems that investors want some vision of what the project might eventually look like.
I have be made aware of more junior mining companies that are struggling for cash while others seemed to have no problem in getting at least some funding to continue their operations.  To me, the biggest differences between these two situations are;
  • If there is top notch management in place,
  • The type of project they had,
  • If their path forward and development plan made sense.

You don’t want to always change management

Management is what it is.  Companies attempt to bring on experienced people to the executive level or to the Board level.   Experienced management can hopefully establish if their project will have a high probability of success or if the project is going to be a hard sell.  This will provide guidance on whether to continue spending money on the project or look for a new project.
From my experience in undertaking due diligence, when a company is looking for financing it is important that  management have the capability to present an orderly, practical, and realistic path forward.  It is important to demonstrate where they will spend the money.
I have participated in due diligence meetings listening to management teams explain that they will have a resource estimate this year and be in production in two years.  Those around the table glance at one another, knowing that they will be lucky to have a feasibility study completed by that time and even more lucky to have their environmental permits in place.   This makes investors nervous.

Keep plans realistic and achievable

It does not help the perception of a management team (or the project itself) if the path forward is unrealistic and unattainable.  The exception being if the management team have done it before.   Similarly low-balling cost estimates and presenting great NPV’s will usually fool no one that has experience. It ultimately may do more harm to credibility than good.
The bottom line is that in order for a project (and the management team) to get serious attention from potential investors is to make sure there is a realistic view of the project itself and have a realistic path forward.
Even a good property can be tarnished by making the technical aspects look over-promotional rather than real.  Make sure the right technical people are involved in the entire process and that company management are listening to them.
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