Articles tagged with: Study Management

3D Model Printing – Who To Contact?

One of the technologies that is still getting a lot of press is 3D printing.  It seems new articles appear daily describing some fresh and novel use. Everything from home construction, food preparation, medical supplies, and industrial applications, 3D printing continues to find new applications in a wide range of disciplines.

Mining can take advantage of 3D printing

In a previous blog “3D Printing – A Simple Idea”, I discussed the helpfulness of printing 3D topographic models for the team members of a mining study. I was recently contacted by a consulting firm in Texas that specializes in printing 3D mining models. Here is their story and a few model images as provided to me by Matt Blattman of Blattman Brothers Consulting. (www.blattbros.com/3dprinting)

Blattman Brothers Consulting

Their 3D printed models are used in the same way geologists and mining engineers have employed models for decades. In the past we saw the physical models made of stacked mylar or plexi-glass maps, wood or foam core. We recognized that there is value in taking two dimensional sections or plan maps and making a 3D representation.  This provides more information than those viewed on a computer screen.
Physical models convey scale, interactions and scope in ways that no other method can. Technology like 3D printing improves the model-making process by allowing the addition of high def orthophotos, reducing the model cost, increasing its precision and delivery time.
Currently 3D models can be made in a variety of materials, but the primary three are extruded plastic, gypsum powder, or acrylics.
  • Plastic models (ABS or PLA) are cheap, fast and can created on relatively inexpensive, hobbyist printers. The downside to these models is that the number of colors available in a single model are limited, typically a single color.
  • Powder-based printers can typically print in 6.5M colors, allowing for vibrant, photo-realistic colors and infinite choices for title blocks, logos and artistic techniques. However, gypsum models can be as fragile as porcelain and require some care in handling.
  • Acrylic models allow for translucent printing (“looking into the ground to see the geological structure”) and are more durable than the gypsum. Nevertheless, acrylic models are significantly more expensive than the other two types and the color palettes are limited.
Here are some examples.
Leapfrog Model

Leapfrog Model

Geological Model in Acrylic

Acrylic Model

Powder Based 3D Model

Powder Based 3D Model

Powder Based 3D Model

Powder Based 3D Model

Besides having another toy on your desk beside your stress ball, why not print off your mine plan, or print the geology shapes and topography? It’s all about communicating highly technical data to a non-technical audience, whether that audience is a permitting authority, the general public, or maybe even company management.
The ability to grasp a map or technical drawing is a learned skill and not everyone has it. If you’ve just spent $20M on a feasibility study, why assume that the attendees in a public meeting will fully appreciate the scale and overall impact of your proposed project with 2D maps?
That message can be better conveyed with a model that is easily understood. One of Blattman’s clients, Luck Stone, recently described how they use their 3D printed models in this video.

Blattman’s models are created from the same 3D digital data already in use by most companies involved in geological modeling and mine design. Other than the units (meters versus millimeters), the triangulated surfaces created by the software are no different than those created by mechanical or artistic 3D modeling programs.
While many 3D printing services are available on the market, not all of them are able to speak “mining”. They may not be able to walk the skilled geologist or mining engineer through the process of creating the necessary digital formats and that’s where Blattman comes in. With more than 20 years of mining experience and having already gone through the 3D printing learning curve, they can assist any natural resource company through the process, either as a full-service/turn-key project or just to advise the client on how to prepare their own files.

Conclusion

The bottom line is that 3D printing is here to stay and its getting better each year.   Go ahead and check out the technology to see if it can advance your path forward .
We would be interested in hearing about any experiences your have had with 3D modelling, pro’s and con’s.
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Constraints: Use Them to Your Advantage

mining study management
I recently read a business book called “A Beautiful Constraint: How to Transform Your Limitations into Advantages, and Why It’s Everyone’s Business” by Adam Morgan and Mark Barden. It describes how to use constraints, like lack of time, or money, or resources and use them to help transform your company for the better.
Here’s an Amazon link to the book.  Beautiful Constraint Book Cover
The book discusses how to shift away from the typical “victim” role by understanding how our routines control things, ask the right questions, and focus on “how” and not “if”.

Focus on HOW and not IF

A good example: one of the recommendations in the book is in your team meetings no one on your team is allowed to utter the words “we can’t because…”.  They must replace those words with “we can if…”.   This forces the generation of ideas and promotes a positive attitude rather than a victim attitude.
The book describes how many innovative ideas are due to constraints and those innovations would never have come about without those constraints.
To force innovation in your organization you can create artificial constraints for your team.  This will foster innovative thinking and push for “outside the box” ideas.  The tougher the constraint, the greater the challenge for your team.  Possibly the greater the final outcome too.
The term Theory of Constraints may be common to some.  However that concept is different than what is being discussed in the book.  The TOC essentially relies on managing a constraint or eliminating it, and then addressing the next constraint in sequence.
The book authors instead propose to exploit the constraint or leverage it to create a new possibility.  Hence the title “beautiful constraint”.

Mining has no shortage of constraints

We all know the mining industry has more than enough constraints placed upon it today. It may be lack of funding, lack of skilled talent, environmental pressures, supply-demand issues, social issues, or security issues.  Each mining project may have additional constraints, so one probably doesn’t need to create artificial constraints for the team.
The mining industry has no option but to try to use these constraints in a constructive manner.  Miners must not let them pull the industry down nor simply wait until they go away.  When people say “Mining is cyclical and it will all turn around soon.”, that’s an example of waiting for the constraint to go away.

How long do you wait before taking your own action?

The bottom line is that the book is an eye opener and enlightening.  It may be telling some of us what we already know deep inside but don’t acknowledge openly.  Don’t wait any longer, start innovating, and don’t be afraid of grand innovations.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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On-Line Technical Report Library

mining studies
Update: This blog was originally written in August 2015, but has been updated in June 2019.
A while ago (in 2015) on LinkedIn I noticed a discussion from a member of an Australian/New Zealand consulting group about developing an on-line community for undertaking free peer reviews of new resource estimates and technical reports.   The objective was to help the mining industry improve on their standards, consistency, and quality of resource estimates and the supporting technical reports.

Original RSC website

OPAXE (then called RSC) created a library of technical reports that can be accessed via a searchable map on their web site at this link.  The map functionality is quite unique and interesting.  Check it out – there are many global projects already listed on the map.
Originally they also proposed a peer review concept. The goal was to develop a team of pre-approved volunteer mineral consultants that would review the various technical reports for accuracy and compliance. The hope is that such on-going peer reviews would help improve the quality of technical work.
It appears that the peer review aspect has been discontinued.  However currently, when viewing an individual project there is an input box that asks “I would like to anonymously report a compliance or data error issue with this report.
The website also allows you to search for reports based on date, commodity, stock exchange, type of study, as well as other criteria.

Conclusion

If you are interested in the technical aspects of different mining projects in different jurisdictions, check out the OPAXE website.  You can also still retrieve documents from the SEDAR site if you know the company you are looking for.  Alternatively the company website itself usually includes links to all their technical reports.

Update

Digbee website screenshot

In June 2019, a new website has come to my attention.  It is called Digbee, at thedigbee.com.   Its a new data and research platform where they match experts with mining feasibility studies to create objective reviews.  The site is very similar to the OPAXE one.
In May 2019 Digbee launched with a free database of over 3,000 economic studies, displayed on an interactive map.  In addition, they intend to offer a paid on-demand and independent analysis of published feasibility studies.  Mining companies can contact Digbee to get their project added.
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Meetups and Mining Millennials

mining millenials
Over the last year I have had many encounters with the Toronto tech start-up community.  I have noticed some similarities with the junior mining industry but some differences also.
The tech start-up model is similar to the junior mining business model as it relates to early stage funding followed by additional financing rounds.  One obvious difference is that mining mainly uses the public financing route (IPO’s) while the tech industry relies on private equity venture capital (VC’s).
There are also some less obvious differences.
Generally the tech industry is young, vibrant, technology-savvy, and applies the latest in social technology to collaborate.  The mining industry seems to be lagging behind on many of these aspects.
The following article will describe a few of my observations. As you read through this, ask yourself “Should the mining industry be doing these things?”

Tech Meetups and Networking

My first experience with the tech industry was associated with the many after-hours networking meetings called “meetups”.  They are held weeknights from 6 to 9 pm  and consist of guest speakers, expert panels, and for general networking purposes.   Often guest speakers will describe their learnings in starting new companies and failures they had along the way.
The meetups may also provide “how-to” advice for techniques like Google Analytics, Facebook advertising, Google Adwords, email marketing, etc.).
Attending these meetups is usually free.  They are typically held after hours at different tech company offices and they often provide free beer and pizza. One can see the entire industry working together for the betterment of the industry.

How to Organize Meetups

Scheduling of meetups is done via the online software platforms Meetup or eventbrite.  Both of  these work well for announcing the meeting notice and tracking signups and attendees.
By the way, meetups are not only tech-related; they are also held for interest groups for hiking, theatre, writing, yoga, business marketing, etc.  The platforms provide a good way to manage communities.  Unfortunately here in Toronto there are no geology or mining related meetups so the mining industry may be missing out on a good way to build a more collaborative community.
The mining industry does have some local meetings, as far as I know there are mainly three after-hour mining events.  The CIM has a monthly luncheon with a cost of $50-$65 (not exactly inclusive to everybody).   There is a Toronto Geological Discussion Group that holds monthly meetings and seems to be comprised of the older geologist demographic.  The third event is Mining 4 Beer, which a small group that meets intermittently at a local bar.  These few events limit the amount of buzz for those working in the mining industry.  There are a lot of mining companies here with a lot of mining people but not a lot of vibrancy.

Where to hold an event

Most of the tech meetups are held in local tech offices.  These offices are great. They have an open concept, pool tables, ping pong, video games, fully stocked kitchen. Who wouldn’t want to work there?
The last time I was in the offices of a large engineering firm I felt like a lab rat in a cubical maze.   I’m not saying engineering offices can switch to a tech office layout, but more enjoyment of the office environment might help draw more people to the mining industry.
Perhaps it’s easier to have a positive work attitude when money is being thrown at you (as is happening in the tech world) rather than having to scratch and claw for funds like mining must do right now.   However I suggest if one wants more smart young people to come into the industry then one needs to adapt.  This means more than just buying the latest 3D geological software.  It means creating an environment that people want to work in.
In the late 1990’s I was working in the Diavik  engineering office in Calgary.  They provided a unique office layout whereby everyone had an “office” but no front wall on the office so you couldn’t shut yourself in.  There were numerous map layout tables scattered throughout the office to purposely foster discussion among the team.
A similar type philosophy is used by Apple in their office layout design where even the kitchen placement has a purpose.  People should mingle and run into one another to promote conversation.  Discussion is good. Camping out in an office is not good.

Keep it short and to the point

Another thing I noticed with the tech industry is that when start-up tech companies are given an opportunity to tell their story, typically they only have 5 to 10 minutes to pitch.  No long winded thirty page PowerPoint presentation to explain what they are doing.
The tech industry is also big on the “elevator pitch”, a one minute verbal summary of what they are doing.  The tech people are taught to be concise.  If you can’t explain it in plain language in one minute then it’s too complicated.
For comparison, many mining investor presentations can be long, highly technical, and tailored to other technical people and not the average person.   One must ask who is the real target audience for those presentations?

Communication methods

The tech industry relies a lot on remote workers.   They might be overseas or spread around Canada. For communication and collaboration, they use various online systems such as Slack, Google Hangout, Trello.  No more  long email threads with five people cc’d on each email.   Slack uses a chatting approach, similar to text messaging, which makes it easier to follow the conversation and share files.
Can the mining industry be taught to use something new like Slack?  I don’t see a problem with that as long as one honestly wants to learn it. It’s really not that complicated.
For interest, another blog provides some more discussion on online collaboration software “Online Collaboration and Management Tools“.

Conclusion

The bottom line is that I can see a great difference in the attitude and atmosphere in the tech industry compared to the mining industry.  The junior mining game was the precursor for the tech start-up industry but has not kept pace with evolving work techniques.
As senior personnel retire from mining, the loss of this mining experience will be felt.  However the new ideas that may follow could be a positive outcome.
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New Mining Software and 43-101 Legal Issues

43-101 issues
NI 43-101 puts a fair amount of legal liability on the Qualified Person preparing a resource or reserve estimate.  The QP is to stand behind the accuracy of their work and take legal responsibility for it.
Every so often some new mining software comes along and I often wonder what are the risks in using it? Some examples of new mining software that I have heard about (but not personally used) nor have seen mentioned in any 43-101 studies are SimSched, the ThreeDify’s software packages, and Bentley.

Is the software doing everything correctly?

Given that as a QP I am legally responsible for my work, I am  bit apprehensive about how I can be assured the new software will provide reliable and accurate results for which I accept legal liability.  The last thing I would want to do is issue a public technical report which is found to be in error due to a software bug.
Irrespective of 43-101, if you are working at a mining operation the last thing you want to do is present management with an incorrect reserve, pit design, or production plan.
If you are a consultant, how agreeable will your client be when you tell him that his study was done using a novel software package and not one of the industry standard packages?
I recall working with a major mining company and there was a reluctance to adopt any new software that was unproven and not an industry standard.  The company had no issue with buying the software nor paying the annual maintenance fees for the license. the concern was the risk in using it.

What if you have a limited budget?

How do you feel about new software if you are a mining company or consultant with a limited budget?   The new software may be cheaper, may appear to be be great, and may be a technological improvement all at a lower cost.  However the software risk still remains.   There is no guarantee that all software output is correct simply because it comes from a computer.
As a QP, I suggest the onus is on the software developers to demonstrate that they can produce reliable and comparable results under all conditions.  They need to convince future users that their software is accurate.
Perhaps over time the new software will gain wider adoption.  We may see more 43-101 reports that use it and hence it will get more overall acceptance.
When developing a new market for new software is it a better to foster more consultant adoption or more mining company adoption?
Will mining companies use the software if their consultants are using it, or will consultants use it if more companies adopt it?  It’s an interesting discussion that new software vendors must deal with in trying to grow their market share.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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Independent Consultants Are Growing

I have read quite a few articles indicating that the mining industry is seeing a shortage of experienced people, on both the technical and management side of the business.  Apparently the baby boomer generation is now nearing their retirement or early-retirement stage and there is a gap in the number of experienced people following behind.
Many of these retirees enter the “independent consultant” stage of their careers.
I also hear from recruiters that there is a shortage of engineers willing to take remote or international assignments.  This is particularly difficult when a senior level candidate has a growing family.

Can the independent engineers help out?

In a previous article (14. Miners – Why Have Your Own Independent Consultant?) I discussed why mining companies (or even consulting firms) should make use of the independent engineers as advisers or Board members.
I understand from colleagues in the mining industry that many of the people nearing retirement are willing to take on consulting assignments or board or directors roles or other management roles.  They are often willing to work part time and independently.  Or they may work as “associates” with engineering firms.
So there likely is a significant network of experienced people out there.  It’s just a matter of being able to tap into that network when someone needs specific expertise.
So how can one do this?
LinkedIn currently seems to be the only global network for technical people.  It is a great way to connect with engineers and geologists industry wide.
LinkedIn members work everywhere, at mine operations, consulting firms, financial houses,  as independents, or even retired. Almost every technical person I know is registered on LinkedIn.
The question is how to find these people when you are looking for a specific independent expertise for a short term or over the longer term.

Networking

Networking with people you already know is the most common approach.  However what if you need someone with particular knowledge?
LinkedIn is a great search mechanism for technical experts.  With a keyword search one can identify a lot of experts with very specific skill sets.  The problem is that many of the experts highlighted by the LinkedIn search may be fully employed at mining operations or with large consulting firms and may not be the person you are looking for.
To my knowledge, there is no searchable online registry solely intended for independent geologists and engineers.  It would be in the interests of the mining industry to have some type of easily searchable independent consultant directory to be able to tap into the expertise that is out there.  I understand that MineLife.org  is attempting to build such an online service but it still appears to be early in the development stage.
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Cashflow Sensitivity Analyses – Be Careful

cashflow sensitivity
One of the requirements of NI 43-101 for Item 22 Economic Analysis is “sensitivity or other analysis using variants in commodity price, grade, capital and operating costs, or other significant parameters, as appropriate, and discuss the impact of the results.”
The result of this 43-101 requirement is typically the graph seen below, which is easily generated from a cashflow model.  Simply change a few numbers and then you get the new economics.  The standard conclusions derived from this chart are that metal price has the greatest impact on project economics followed by the operating cost.   Those are probably accurate conclusions, but is the chart itself telling the true story?
 DCF Sensitivity GraphI have created the same chart in several economic studies so I understand the limitations with it.   The main assumption is that sensitivity economics are based on the exact same mineral reserve and production schedule.
That assumption may be applicable when applying a variable capital cost but is not applicable when applying varying metal prices and operating costs.   Does anyone really think that in the example show, the NPV is $120M with a 20% decrease in metal price or 20% increase in operating cost?
Potentially a project could be uneconomic with such a significant decrease in metal price but that is not shown by the sensitivity analysis.  Reducing the metal price would result in a change to the cutoff grade.  This changes the waste-to-ore ratio within the same pit.  So assuming the same the  mineral reserve is not correct in this scenario.
These changes in economic parameters would impact the original pit optimization used to define the pit upon which everything is based.  A smaller pit size results in a smaller ore tonnage, which may justify a smaller fleet and smaller processing plant, which would have higher operating costs and lower capital costs.
A smaller mineral reserve would produce a different production schedule and shorter mine life.  It can  get quite complex to do it properly.
Hence the shortcut is to simply change inputs to the cashflow model and generate outputs that are questionable but meet the 43-101 requirements.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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Pit Optimization – How I View It

Mining feasibility study
One of the first steps in open pit mine design is the pit optimization analysis.  Pit optimization is used to define the most profitable pit shell (or nested pit shells) for a given set of economic parameters.  The economic parameters  include the metal prices, process recoveries, and operating costs. Normally when optimization is done, a range of metal prices or revenue factors is used to develop a series of nested shells to understand how the mine will expand or shrink with increasing or decreasing metal prices.
Once optimization is complete, mine engineers will design the pit with benches and ramps.  The design should mimic the optimized shell as closely as possible.
The pit design may or may not  resemble the original shell depending on the slope angles used in the original optimization and where the haul ramps are located. Hence the ore and waste tonnages mined may be different that the tonnages defined by the optimizer.
Various experts in pit optimization will use approaches of differing complexity.  Some may apply variable mining costs with pit depth; apply variable recoveries link to head grade; apply variable pit slopes; etc.   One can make the pit optimization step as simple or detailed as one wants it.
The question is whether detailed pit optimization is warranted.  My view is that overly detailed pit optimization is  not required, other than if someone wants to test the impacts of parameter sensitivity.

Pit Optimization Has Many Uncertainties

Some of the many uncertainties involved in the optimization process are listed below:
  • Pit optimization can generate large pits that would have a long mine life.  However one doesn’t know the metal prices far into the future.  Therefore think about the need for precision in the initial optimizations.
  • Pit optimization is done at the start of a study, so one doesn’t have the detailed operating costs yet.  Therefore one has to use rough estimates for future costs and possibly even assume preliminary process recoveries.
  • Operating costs will change in the future, and the optimization is just a snapshot using current information.
  • The smaller pits, if developed, would consist of smaller operations and may have different operating costs than assumed in the optimization.   Similarly larger pits may have different throughput rates and  operating costs than assumed in the optimization.
  • The ore and waste split reported within the pit will be based on a specific life-of-mine cutoff grade.  This is based on the fixed metal price and operating cost assumptions.
  • Overall pit wall slopes may differ for shallow pits versus deep pits.  Slopes may vary above the groundwater table and below it.  In many instances during pit optimization the wall angles are maintained at the same angle irrespective of the pit depths.
  • Dilution may be applied globally during pit optimization (unless one is working with a diluted block model).  In reality, dilution may differ in different parts of the ore body, and that may not be considered in the optimization stage. For more discussion on dilution in general, read the blog “Ore Dilution Prediction – Its Always an Issue“.

Conclusion

The bottom line is that pit optimization should be viewed as a guide to the pit design, but not as a highly precise life-of-mine calculation.   Having said that, one should still understand how future changes in metal prices can impact on the pit size, and then assess whether practical pushbacks are possible.
Update: A follow-up article pertaining to pit optimization has been posted, at this link “https://kuchling.com/pit-optimization-more-than-just-a-npv-vs-rf-graph/
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.   Follow us on Twitter at @KJKLtd for updates and insights.
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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 really 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, but anyone can build one for themselves.

Screenshot of Simple Economic 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.
The only caveat is that you need to have some sense for operating and capital costs for similar projects. The analysis can be on both a pre-tax and simple after-tax basis.
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.
The reasonableness of the 1D model will be examined via benchmarking and this will be summarized once completed.  I will include a link to that future blog here.

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.
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.

Conclusion

The bottom line is that a 1D economic calculation is very simplistic but still provides a vision for the project.  The next step in the economic modelling process would be a 2D model based on an annual production schedule.  The 1D approach is just a quick first step in looking at a potential project.  You can do it even when you just know the head grades and some generalized orebody information.
The two ways you can apply the simple 1-D model are:
  1. evaluate the potential of early stage projects using cost inputs from other studies,
  2. examine a project’s sensitives (units costs, recoveries, prices) by calibrating your simple model to the published study (i.e. use the same parameters and make changes as needed.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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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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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.
Next we generate a project schedule based on some work plan.  In realty this isn’t the correct sequence.

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.
  • The WBS should be developed before the project schedule, not after it.

Any study will 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.
Once the WBS is in place, then go ahead and build your project schedule.
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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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 influence the successful completion of a study.   They can be related to the quality of the technical team, the budget, the time window, and 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

Study managers are responsible for being the main liaison with the Owner. They must herd a team of geologists and engineers in the same direction. They must ensure that technical quality and consistency is maintained by the entire group.  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 experience of the Owner’s team.
Every technical team has those 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. They serve a purpose.

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 new technical disciplines involved.
It is not uncommon for EIA’s to make regulatory commitments  that have not been signed off by the engineering side.

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 authority that the Study Manager has within 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.
A good Study Manager can make a poor engineering team perform, while a poor Study Manager can bog down a great technical team.
One thing to be aware of is that with some firms, the Study Manager is not the same as the Project Manager.  The SM may undertake more clerical duties, such as weekly or monthly reports, manhour tracking, distributing documents, and coordinating the logistics of the study rather than the technical aspects.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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