Week 4

SME Weirdness

• There will be no class from the week of Feb. 16 to 20th

• Your report on this work load will be presented on Tuesday Feb. 24th

• This will give you a few extra days – but don’t put things off.

Processing Problems

• The flow sheet is mostly copied from reports of recoveries from unknown feeds – never adapted to your feed

• Crushing circuit is pretty detailed• Gravity circuit

– Why a Knelson Concentrator (were others considered)– It appears to make a single concentrate with both silver and

gold in the same concentrate• The purity appears to be identified (seems to be pyrite with 4339

g/tonne gold (139.5 oz/tonne) far lower grade than 25%• If this is right you would almost certainly roast and leach

– But that leaves uncertain what happens to the silver

The Oxide Circuit

• Looks like it’s a heap leach– Are you serious about spraying leach solutions at

negative 20 F?– Hydrometallurgy kinetics tend to be rather

temperature sensitive• In your case that may not be a problem because I don’t

think you can circulate the solution

– No recovery is given in the report• Potentially because you have none

The Sulfide Circuit

• Two stage flotation– Copper in first stage with 93% recovery (I’ll go for it)

• Silver in the copper is 12%

– Pyrite in 2nd stage with 90% recovery (I’ll take that too)• Your pyrite has 50% of the gold• Silver in gold is 12%

– I’m seeing no recovery of Silver sulfides at all– Gold recoveries were projected from another plant

with no regard to form of the gold in your plant

We Need Processing Fixed Before We Can Move On

Crush

____$/tonne

Minus 40Mesh feed

Gravity Pro

Tails

Con 1 Con 2 Con 3What are their compositions?What % Recovery did you get?

You have 7 ore types – results and costs canBe expected to be different for each (ie you have 7 flow sheets)

______$/tonne

What % solidsCan itGo toRegrindOr is aThickeningStep needed

More Flow SheetFor Sulfide

Float 1

Regrind

_______$/tonne

______$/tonne

93% Cu RecIn 30% con

Float 2 Float 3

Why will eitherHave or not haveA silver sulfideFloatation?

A Labor Cost Shock

• I took your reports and put them together in a spreadsheet

WorkerDownThis side

Itemized benefits costs across the top

I have a kindOf modelWritten report.

Things Considered

• Hours regular time/year• Hours overtime/year• Weeks of paid time off (mine closures and sick leave or

vacation)• Social Security at 6.2% up to $118,000 of pay• Medicare at 1.45% on all pay• Unemployment and Workmans comp as a % of pay• 401K match• Cost of Onsite Medical divided by # workers• Cost of health, dental, and vision insurance• A H.S.A. match since families will usually not live on site

Holy Crap!Direct Total Total TotalPay Fringe Burden Annual

Cost Cost % Cost

$ 64,983.36 $50,174.73 77.21166 $115,158.09

$ 64,983.36 $50,174.73 77.21166 $115,158.09

$ 62,739.55 $49,497.59 78.89377 $112,237.14

$ 62,739.55 $49,497.59 78.89377 $112,237.14

$ 62,739.55 $49,497.59 78.89377 $112,237.14

$ 62,739.55 $49,497.59 78.89377 $112,237.14

$ 60,887.86 $48,938.79 80.37529 $109,826.65

Hour Wage BaseColunas1 2011

Construction Leadman $ 29.83 UG Mine Leadman $ 29.83

Electrian I $ 28.80 Mechanic I $ 28.80

Miner I $ 28.80 Senior Water Treatment Plant

Op. $ 28.80 Mill Operator I $ 27.95

Burden is 78%Total cost about $110,000 for a laborer!

Whats doing thisA lot of it is the overtime with the 2 weeks on 2 off schedule

Health insurance is $17,000 per year – I’m going to need duplicate crews!

You Flip-Flopped on Bargeswill worker residence be next?

If the health service needed in Ruby anyway saved $6,000 more per year we couldBe dealing with $14,000 per year per worker?

I’m Going to have a group look at this

• Task 5 - Examine the cost of your two weeks on, two weeks off schedule. Work with tasks 1 and 2 to get best possible manning tables for a 40,000 tpd production rate – this will be early week estimates – not necessarily final results. Your 2 weeks on, 2 off mining camp only in Ruby schedule is expensive. Adjust any errors in the spreadsheet set up to correspond to your current schedule. (This may require you to look at the schedule of a model worker over an entire year). See if you can develop an alternate work schedule that puts families in Ruby. This may require more than one try to see what is best. When you have your best schedule (remember that the number of workers may change with the schedule) look at the yearly labor and salary cost of both schedules. Using a 25 year life and a 4.39% interest rate discount the annual cost difference back to determine the maximum additional capital cost your can justify to build up Ruby. Calculate the cost of the planes and airport improvements that will be needed for the two weeks off, two weeks on schedule and include the impact of this capital cost in your estimate.

• Ie – use the spreadsheet and try some alternate work schedules – see– How much you can save– Cost planes flying in and out of Ruby and the Airport upgrade

The Rest of the Group• Task 6 - Estimate the cost of the housing, stores, and other facilities needed

for a mining camp using the 40,000 tpd manning table developed early in task 1. Put together a plan and layout. There are some adjustments to the medical facilities outlined in week 2 task 8. Include these. Include heating costs and maintenance. What are the capital and operating costs of this alternative.

• Task 7 - Estimate the cost of housing, stores, and other facilities needed if the town of Ruby is built up using a manning table for 40,000 tpd. (One item of note – if you build housing in Ruby workers may pay for part and cover maintenance since they will not be maintaining and buying houses in Fairbanks. Depending on how much you subsidize housing you might be able to have a lower wage). You will need early crew estimates from task 5 since the manning table for a resident crew may differ noticeably from a non-resident crew. What are the capital and operating costs for this alternative.

• Task 8 – (Kyle) Develop the cost of a water and sewer system that serves your processing plants and the mining camp or build up Ruby scenarios.

Where Are We Going

• MSOPIT has been run with mining and processing costs from a generic Mine Cost Service Model– These costs are being replaced with case specific

mining costs (Task 1)– Case Specific Processing costs (Task 2)– Finalize Ultimate pit with variable slope, variable

mining costs and updated panels (Task 4)

What Next

• We will use upgraded cost numbers and the truck bench width and number of benches to do stage pits

• Notice we set up costs for 10,000 tpd, 20,000 tpd, 40,000 tpd, and 80,000 tpd– We are getting ready to use VALP to determine

what the mine and mill size should really be– (the 40,000 you have been working with was a

guess)