Quiz 2 University of Queensland Mine Planning

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1 
 
 
MINE PLANNING 
 
 
The University of Queensland 
Mine Planning (MINE3123), Semester 2, 2014 
12th September 2014 
 
 
QUIZ #2(a) 
 
STUDENT NAME_____________________________; ID___________________ 
 
TIME ALLOWED: 110 minutes 
 
INSTRUCTIONS: Answer ALL Questions on page 2. 
 
AIDS: Scientific Calculator 
 
COORDINATOR: Dr Micah Nehring 
 
TUTORS: Edward Hay, Mansheel Kumar & Timocles Copeland 
 
Instructions 
• Normal university examination conditions apply. 
• Closed book exam. 
• Time allowed: 110 minutes. 
• Answer all (20) questions. 
• The value of each question is equal (0.5 Marks). 
• Answers must be written on the Quiz Answer Page (Page 2). 
• All pages of the quiz paper must be returned at the end of the quiz. 
• Scientific calculators permitted, all other electronic devices must be switched off. 
• Answers must be written in pencil or ink. 
 
 
PLEASE TURN PAGE TO START THE QUIZ 
2 
 
Quiz Answer Page 
 
Place an X against the answer of your choice. Only one correct answer for each question. 
 
 
a 
 
b 
 
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d 
 
e 
 Q1. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
e 
 Q2. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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 Q3. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
e 
 Q4. 
 
 
 
 
 
 
 
 
 
 
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 Q5. 
 
 
 
 
 
 
 
 
 
 
 
 
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 Q6. 
 
 
 
 
 
 
 
 
 
 
 
 
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 Q7. 
 
 
 
 
 
 
 
 
 
 
 
 
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 Q8. 
 
 
 
 
 
 
 
 
 
 
a 
 
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 Q9. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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 Q10. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
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 Q11. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
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 Q12. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
e 
 Q13. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
e 
 Q14. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
e 
 Q15. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
b 
 
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d 
 
e 
 Q16. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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d 
 
e 
 Q17. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
b 
 
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 Q18. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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 Q19. 
 
 
 
 
 
 
 
 
 
 
 
 
a 
 
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 Q20. 
 
 
 
 
 
 
 
 
 
 
 
 
3 
 
Q1. Which of the follow represents the Zinc grade (% Zn) of a block containing an equivalent Lead 
(Pb) grade of 5.86% Pb, if a Lead grade of 3.70% Pb and a Silver grade of 7.8g/t Ag is also present 
within the block? Use Lead, Zinc and Silver prices of $2,208/t Pb, $2,354/t Zn and $0.68/g Ag 
respectively? 
 
a) 1.50% Zn 
b) 1.80% Zn 
c) 2.10% Zn 
d) 2.60% Zn 
e) 2.90% Zn 
 
 
Q2. Which of the following statements is true about pit limits in open pit mining? 
 
a) The scheduled final pit will generally be smaller than the unconstrained/undiscounted final pit 
b) The scheduled final pit will be exactly the same size as the unconstrained/undiscounted final pit 
c) The scheduled final pit will generally be larger than the unconstrained/undiscounted final pit 
d) All of the above 
e) None of the above 
 
 
Q3. Which of the following statements describes how breakeven cut-off grade differs from Lane’s 
optimal cut-off grade approach? 
 
a) Lane’s optimal approach provides a constant cut-off grade over the mine life while breakeven cut-off 
grades may change with mine life – usually reducing as the mine life matures 
b) Lane’s optimal approach considers the grade-tonnage curve of the deposit while breakeven cut-off 
grade does not 
c) Lane’s optimal approach seeks to maximise the undiscounted cash flows from a mining operation 
while breakeven cut-off grade seeks to maximise Net Present Value (NPV) 
d) Lane’s optimal approach ignores production capacities while breakeven cut-off grade does not 
e) There is no difference between the two 
 
 
Q4. An apparent change to the most viable sequence in which a deposit should be exploited (after a 
commodity price increase) should always be viewed cautiously because…. 
 
a) A mining sequence does not account for the time value associated with pre-production activities such 
as overburden removal 
b) A mining sequence already accounts for production capacities and the implications of having to 
adhere to these 
c) A mining sequence fully accounts for the time value of money and thus provides a reasonable path 
toward exploitation of the deposit 
d) Changing the sequence requires a whole new mine plan to be generated which is time consuming 
and expensive 
e) None of the above 
 
 
 
 
 
 
4 
 
Q5. Which of the following outlines (coloured red) represents the most economically viable ‘footprint’ 
for a block caving operation whose plan view (horizontal cross-section) shown in Figure 5.1 contains 
the average Copper grade (expressed in percent Copper (% Cu)) of material contained within each 
column, given the following parameters? 
 
Tonnage contained within each column: 2,800,000t 
Copper price: $5,000/t 
Mining cost: $14.2/t 
Processing cost: $12.6/t 
Recovery: 89% 
 
0.00 0.41 0.45 0.66 0.33 0.00 0.00 
0.21 0.54 0.61 0.87 0.78 0.53 0.00 
0.16 0.63 0.93 0.67 0.69 0.26 0.00 
0.00 0.52 0.62 0.57 0.42 0.31 0.24 
0.00 0.00 0.46 0.42 0.31 0.22 0.19 
Figure 5.1. Column grade model (% Cu) for block caving operation (plan view - horizontal cross-section) 
 
a) 
0.00 0.41 0.45 0.66 0.33 0.00 0.00 
0.21 0.54 0.61 0.87 0.78 0.53 0.00 
0.16 0.63 0.93 0.67 0.69 0.26 0.00 
0.00 0.52 0.62 0.57 0.42 0.31 0.24 
0.00 0.00 0.46 0.42 0.31 0.22 0.19 
 
b) 
0.00 0.41 0.45 0.66 0.33 0.00 0.00 
0.21 0.54 0.61 0.87 0.78 0.53 0.00 
0.16 0.63 0.93 0.67 0.69 0.26 0.00 
0.00 0.52 0.62 0.57 0.42 0.31 0.24 
0.00 0.00 0.46 0.42 0.31 0.22 0.19 
 
 
 
5 
 
c) 
0.00 0.41 0.45 0.66 0.33 0.00 0.00 
0.21 0.54 0.61 0.87 0.78 0.53 0.00 
0.16 0.63 0.93 0.67 0.69 0.26 0.00 
0.00 0.52 0.62 0.57 0.42 0.31 0.24 
0.00 0.00 0.46 0.42 0.31 0.22 0.19 
 
d) 
0.00 0.41 0.45 0.66 0.33 0.00 0.00 
0.21 0.54 0.61 0.87 0.78 0.53 0.00 
0.16 0.63 0.93 0.67 0.69 0.26 0.00 
0.00 0.52 0.62 0.57 0.42 0.31 0.24 
0.00 0.00 0.46 0.42 0.31 0.22 0.19 
 
e) 
0.00 0.41 0.45 0.66 0.33 0.00 0.00 
0.21 0.54 0.61 0.87 0.78 0.53 0.00 
0.16 0.63 0.93 0.67 0.69 0.26 0.00 
0.00 0.52 0.62 0.57 0.42 0.31 0.24 
0.00 0.00 0.46 0.42 0.31 0.22 0.19 
 
 
Q6. The 5 key levers for value creation as part of the strategic mine planning process are…. 
 
a) Mining Method Selection,Process Route, Operations & Maintenance, Sequence & Scheduling, Cut-
off Grade Policy 
b) Mining Method Selection, Process Route, Scale of Operation, Sequence & Scheduling, Cut-off 
Grade Policy 
c) Mining Method Selection, Process Route, Operations & Maintenance, Sequence & Scheduling, 
Logistics 
d) Mining Method Selection, Exploration, Operations & Maintenance, Sequence & Scheduling, Logistics 
e) Mining Method Selection, Exploration, Operations & Maintenance, Sequence & Scheduling, Cut-off 
Grade Policy 
 
6 
 
Q7. The ‘saw graph’ contained in Figure 7.1 presents the optimal ore and waste production plan for 
an open pit operation consisting of 5 pushbacks. The operation is limited to mining a total of 8 blocks 
per year and processing one block per year. Which of the following ‘saw graph’ represents the 
rescheduled optimal production plan if the final pushback (pushback 5) is removed from open pit 
exploitation in favour of an underground operation if existing production limits are maintained? Each 
ore block must be uncovered in the year prior to extraction. 
 
 
 
 
 
 
 
Figure 7.1. ‘Saw Graph’ for open pit mining operation consisting of 5 pushbacks 
 
 
a) 
 
b) 
 
c) 
 
 
 
d) 
 
e) 
 
 
 
 
 
7 
 
 
 
Q8. Which of the following is the optimal process route and associated undiscounted open pit value 
(excluding CAPEX) for a silver mining operation, whose open pit economic block models (vertical 
cross-section) for Process Route X and Process Route Y is presented in Figures 8.1 and 8.2 
respectively? Values are expressed in $M. Assume that each block is square and a pit wall angle of 
45 degrees for any open pit operation applies. Only 1 process route may be selected. 
 
#1 
-3.3 
#2 
-3.3 
#3 
-3.3 
#4 
-3.3 
#5 
-3.3 
#6 
-3.3 
#7 
-3.3 
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-3.3 
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-3.3 
#11 
-3.3 
Level 1 
#12 
-3.8 
#13 
-3.8 
#14 
-3.8 
#15 
7.6 
#16 
-3.8 
#17 
11.8 
#18 
9.3 
#19 
-3.8 
#20 
-3.8 
#21 
-3.8 
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-3.8 
Level 2 
#23 
-4.3 
#24 
-4.3 
#25 
-4.3 
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-4.3 
#27 
-4.3 
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-4.3 
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-4.3 
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-4.3 
#32 
-4.3 
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-4.3 
Level 3 
#34 
-4.8 
#35 
-4.8 
#36 
-4.8 
#37 
-4.8 
#38 
14.1 
#39 
18.3 
#40 
-4.8 
#41 
-4.8 
#42 
-4.8 
#43 
-4.8 
#44 
-4.8 
Level 4 
#45 
-5.3 
#46 
-5.3 
#47 
-5.3 
#48 
-5.3 
#49 
-5.3 
#50 
18.2 
#51 
9.7 
#52 
-5.3 
#53 
-5.3 
#54 
-5.3 
#55 
-5.3 
Level 5 
#56 
-5.8 
#57 
-5.8 
#58 
-5.8 
#59 
-5.8 
#60 
-5.8 
#61 
27.4 
#62 
-5.8 
#63 
-5.8 
#64 
-5.8 
#65 
-5.8 
#66 
-5.8 
Level 6 
Figure 8.1. Open pit mining economic block model for silver deposit using Process Route X 
 
#1 
-3.3 
#2 
-3.3 
#3 
-3.3 
#4 
-3.3 
#5 
-3.3 
#6 
-3.3 
#7 
-3.3 
#8 
-3.3 
#9 
-3.3 
#10 
-3.3 
#11 
-3.3 
Level 1 
#12 
-3.8 
#13 
-3.8 
#14 
-3.8 
#15 
9.8 
#16 
-3.8 
#17 
7.1 
#18 
6.3 
#19 
-3.8 
#20 
-3.8 
#21 
-3.8 
#22 
-3.8 
Level 2 
#23 
-4.3 
#24 
-4.3 
#25 
-4.3 
#26 
-4.3 
#27 
-4.3 
#28 
-4.3 
#29 
-4.3 
#30 
-4.3 
#31 
-4.3 
#32 
-4.3 
#33 
-4.3 
Level 3 
#34 
-4.8 
#35 
-4.8 
#36 
-4.8 
#37 
-4.8 
#38 
30.3 
#39 
10.3 
#40 
-4.8 
#41 
-4.8 
#42 
-4.8 
#43 
-4.8 
#44 
-4.8 
Level 4 
#45 
-5.3 
#46 
-5.3 
#47 
-5.3 
#48 
-5.3 
#49 
-5.3 
#50 
14.2 
#51 
9.7 
#52 
-5.3 
#53 
-5.3 
#54 
-5.3 
#55 
-5.3 
Level 5 
#56 
-5.8 
#57 
-5.8 
#58 
-5.8 
#59 
-5.8 
#60 
-5.8 
#61 
27.4 
#62 
-5.8 
#63 
-5.8 
#64 
-5.8 
#65 
-5.8 
#66 
-5.8 
Level 6 
Figure 8.2. Open pit mining economic block model for silver deposit using Process Route Y 
 
a) Process Route X with an associated undiscounted pit limit of $8.9M 
b) Process Route X with an associated undiscounted pit limit of $4.1M 
c) Process Route Y with an associated undiscounted pit limit of $7.8M 
d) Process Route Y with an associated undiscounted pit limit of $9.9M 
e) Process Route X or Y as both generate an associated undiscounted pit limit of $8.6M 
 
 
 
 
 
8 
 
Q9. Given the grade-tonnage data for a pushback within an open pit copper mining operation 
presented in Table 9.1, what is the average grade (% Cu) of material to be sent to the processing 
circuit at a cut-off grade of 0.2% Cu? Assume that the average grade of material within each grade 
interval is the middle value of the interval range. 
 
Table 9.1. Grade-tonnage data for pushback within open pit copper mining operation 
Grade Interval (% Cu) Tonnes (t) 
0.0 - 0.1 12,650 
0.1 - 0.2 8,070 
0.2 - 0.3 7,310 
0.3 - 0.4 6,890 
0.4 - 0.5 6,150 
0.5 - 0.6 5,430 
0.6 - 0.7 4,890 
0.7 - 0.8 3,920 
0.8 - 0.9 3,090 
0.9 - 1.0 2,240 
1.0 - 1.1 1,560 
1.1 - 1.2 780 
1.2 - 1.3 230 
 
a) 0.200% Cu 
b) 0.387% Cu 
c) 0.404% Cu 
d) 0.558% Cu 
e) None of the above 
 
 
Q10. What is the breakeven cut-off grade (expressed in % Ni) for a block of material contained within 
the ultimate pit limit of a surface nickel mining operation, given the following parameters? 
 
Block tonnage: 330,000t 
Nickel price: $17,580/t 
Mining cost: $5.9/t 
Processing cost: $12.3/t 
Recovery: 74% 
 
a) 0.140% Ni 
b) 0.128% Ni 
c) 0.111% Ni 
d) 0.103% Ni 
e) 0.095% Ni 
 
 
Q11. Why might one scale of operation be more technically/financially viable over another? 
 
a) Due to restricted water supply 
b) It delays cost incurred as a result of having to move large volumes of waste material upfront 
c) It achieves ore production a lot quicker 
d) All the above 
e) None of the above 
9 
 
 
Q12. Which of the following is the optimal production schedule for the open pit economic block 
model (vertical cross-section) of a gold deposit shown in Figure 12.1 (whose values are expressed in 
$M), given the following parameters? Assume that each block is square and a pit wall angle of 45 
degrees applies. 
 
Maximum annual mining rate (ore and waste): 4 blocks 
Maximum annual ore processing rate: 1 block 
Stockpiling option: None available 
Ore blocks must be fully uncovered in the year prior to extraction 
 
#1 
-8 
#2-8 
#3 
-8 
#4 
-8 
#5 
-8 
#6 
-8 
#7 
-8 
Level 1 
#8 
-10 
#9 
-10 
#10 
-10 
#11 
-10 
#12 
-10 
#13 
-10 
#14 
-10 
Level 2 
#15 
-12 
#16 
-12 
#17 
-12 
#18 
+120 
#19 
+72 
#20 
-12 
#21 
-12 
Level 3 
#22 
-14 
#23 
-14 
#24 
-14 
#25 
+262 
#26 
-14 
#27 
-14 
#28 
-14 
Level 4 
Figure 12.1. Open pit economic block model for gold deposit 
 
 
a) 
#1 
-8 
#2 
-8 
#3 
-8 
#4 
-8 
#5 
-8 
#6 
-8 
#7 
-8 
Level 1 
#8 
-10 
#9 
-10 
#10 
-10 
#11 
-10 
#12 
-10 
#13 
-10 
#14 
-10 
Level 2 
#15 
-12 
#16 
-12 
#17 
-12 
#18 
+120 
#19 
+72 
#20 
-12 
#21 
-12 
Level 3 
#22 
-14 
#23 
-14 
#24 
-14 
#25 
+262 
#26 
-14 
#27 
-14 
#28 
-14 
Level 4 
 
 
Year 1 
 
Year 2 
 
Year 3 
 
Year 4 
 
Year 5 
 
 
b) 
#1 
-8 
#2 
-8 
#3 
-8 
#4 
-8 
#5 
-8 
#6 
-8 
#7 
-8 
Level 1 
#8 
-10 
#9 
-10 
#10 
-10 
#11 
-10 
#12 
-10 
#13 
-10 
#14 
-10 
Level 2 
#15 
-12 
#16 
-12 
#17 
-12 
#18 
+120 
#19 
+72 
#20 
-12 
#21 
-12 
Level 3 
#22 
-14 
#23 
-14 
#24 
-14 
#25 
+262 
#26 
-14 
#27 
-14 
#28 
-14 
Level 4 
 
 
Year 1 
 
Year 2 
 
Year 3 
 
Year 4 
 
Year 5 
 
 
10 
 
c) 
#1 
-8 
#2 
-8 
#3 
-8 
#4 
-8 
#5 
-8 
#6 
-8 
#7 
-8 
Level 1 
#8 
-10 
#9 
-10 
#10 
-10 
#11 
-10 
#12 
-10 
#13 
-10 
#14 
-10 
Level 2 
#15 
-12 
#16 
-12 
#17 
-12 
#18 
+120 
#19 
+72 
#20 
-12 
#21 
-12 
Level 3 
#22 
-14 
#23 
-14 
#24 
-14 
#25 
+262 
#26 
-14 
#27 
-14 
#28 
-14 
Level 4 
 
 
Year 1 
 
Year 2 
 
Year 3 
 
Year 4 
 
Year 5 
 
 
d) 
#1 
-8 
#2 
-8 
#3 
-8 
#4 
-8 
#5 
-8 
#6 
-8 
#7 
-8 
Level 1 
#8 
-10 
#9 
-10 
#10 
-10 
#11 
-10 
#12 
-10 
#13 
-10 
#14 
-10 
Level 2 
#15 
-12 
#16 
-12 
#17 
-12 
#18 
+120 
#19 
+72 
#20 
-12 
#21 
-12 
Level 3 
#22 
-14 
#23 
-14 
#24 
-14 
#25 
+262 
#26 
-14 
#27 
-14 
#28 
-14 
Level 4 
 
 
Year 1 
 
Year 2 
 
Year 3 
 
Year 4 
 
Year 5 
 
 
e) 
#1 
-8 
#2 
-8 
#3 
-8 
#4 
-8 
#5 
-8 
#6 
-8 
#7 
-8 
Level 1 
#8 
-10 
#9 
-10 
#10 
-10 
#11 
-10 
#12 
-10 
#13 
-10 
#14 
-10 
Level 2 
#15 
-12 
#16 
-12 
#17 
-12 
#18 
+120 
#19 
+72 
#20 
-12 
#21 
-12 
Level 3 
#22 
-14 
#23 
-14 
#24 
-14 
#25 
+262 
#26 
-14 
#27 
-14 
#28 
-14 
Level 4 
 
 
Year 1 
 
Year 2 
 
Year 3 
 
Year 4 
 
Year 5 
 
 
 
Q13. The open pit undiscounted/breakeven pit limit values for a zinc deposit have been determined to 
be $149.2M, $165.8M and $180.1M for a small, medium and large scale of operation respectively. 
Which of the following exploitation strategies appear most economically viable if a CAPEX of $91.7M, 
$102.6M and $127.4M applies to a small, medium and large scale of operation respectively? 
 
a) A small scale of operation with an undiscounted value of $57.5M 
b) A medium scale of operation with an undiscounted value of $63.2M 
c) A large scale of operation with an undiscounted value of $52.7M 
d) A large scale of operation with an undiscounted value of $67.7M 
e) None of the above 
11 
 
 
Q14. Using the grade-tonnage data for an open pit copper mining operation contained in Table 14.1, 
what is the life of an operation at a cut-off grade of 0.6% Cu, given mining, milling and refining 
capacities of 3,000,000tpa, 1,000,000tpa and 10,000tpa respectively? 
 
Table 14.1. Grade-tonnage data for open pit copper mining operation 
Cut-off (% Cu) Mine (t) Mill (t) Refine (t) 
0.0 36,000,000 39,000,000 170,000 
0.1 36,000,000 29,000,000 145,000 
0.2 36,000,000 24,000,000 125,000 
0.3 36,000,000 19,000,000 100,000 
0.4 36,000,000 16,000,000 90,000 
0.5 36,000,000 15,000,000 88,000 
0.6 36,000,000 13,000,000 85,000 
0.7 36,000,000 11,000,000 80,000 
0.8 36,000,000 10,000,000 75,000 
0.9 36,000,000 9,000,000 68,000 
1.0 36,000,000 8,000,000 63,000 
1.1 36,000,000 7,000,000 59,000 
1.2 36,000,000 6,000,000 49,000 
1.3 36,000,000 4500000 38,000 
1.4 36,000,000 3300000 27,000 
1.5 36,000,000 1800000 16,000 
1.6 36,000,000 1000000 10,000 
 
a) 9 years 
b) 10 years 
c) 11 years 
d) 12 years 
e) None of the above 
 
 
Q15. What is the optimal cut-off grade (g/t Au) for an open pit gold mining operation given the 
following information? 
 
�� = 0.4g/t Au 
�� = 0.5g/t Au 
�� = 0.6g/t Au 
�
�� ratio corresponds to a cut-off grade of 0.7g/t Au 
�
�� ratio corresponds to a cut-off grade of 0.8g/t Au 
�
�� ratio corresponds to a cut-off grade of 0.9g/t Au 
 
a) 0.6g/t Au 
b) 0.7g/t Au 
c) 0.8g/t Au 
d) 0.9g/t Au 
e) None of the above 
 
 
 
12 
 
Q16. Two projects have similar NPVs and IRRs, but one has a much greater total profit. Why? 
 
a) It has a longer life 
b) It has a higher discount rate 
c) 50/50 debt/equity ratio 
d) It has a higher cut-off grade 
e) It achieves a higher mining rate 
 
 
Q17. It may not always be optimal (from an NPV aspect) to initially chase the highest cash flow 
stopes within a stoping operation because…. 
 
a) The highest cash flow stopes should be saved for extraction when additional funds are required for 
infrastructure 
b) This may result in other high cash flow stopes not being available/accessible due to a number of 
sequencing constraints inherent to the stoping method 
c) Mining operations should endeavour to increase cash flows across the mine life – this means starting 
out with smaller cash flows and improving these as the mine life matures 
d) High cash flow stopes are generally located in unstable rock masses that make them more suitable 
for extraction at the end of the mine life 
e) None of the above 
 
 
Q18. Which of the following is the NPV of the optimal open pit mine plan for the open pit economic 
block model (vertical cross-section) of a platinum deposit shownin Figure 18.1 (whose values are 
expressed in $M), given the following parameters? Assume that each block is square and a pit wall 
angle of 45 degrees applies. 
 
Maximum annual mining rate (ore and waste): 3 blocks 
Maximum annual ore processing rate: 1 block 
Stockpiling option: None available 
Annual discount rate: 12%pa 
Ore blocks must be fully uncovered in the year prior to extraction 
 
#1 
-5 
#2 
-5 
#3 
-5 
#4 
-5 
#5 
-5 
#6 
-5 
#7 
-5 
Level 1 
#8 
-6 
#9 
-6 
#10 
-6 
#11 
+19 
#12 
-6 
#13 
-6 
#14 
-6 
Level 2 
#15 
-7 
#16 
-7 
#17 
-7 
#18 
+23 
#19 
-7 
#20 
-7 
#21 
-7 
Level 3 
#22 
-8 
#23 
-8 
#24 
-8 
#25 
+34 
#26 
-8 
#27 
-8 
#28 
-8 
Level 4 
Figure 18.1. Open pit economic block model for platinum deposit 
 
a) $1.02M 
b) $1.21M 
c) $1.53M 
d) $1.75M 
e) None of the above 
13 
 
 
 
Q19. An open pit copper mining operation is currently processing at a high throughput rate at a 
processing cost of $8.90/t of ore and achieving a recovery of 71.0%. What is the absolute highest 
processing cost ($/t) that would allow the operation to reduce the throughput rate and thus achieve a 
recovery of 92.0% without having to alter the current breakeven cut-off grade to the facility? Assume 
a copper price of $5,180/t Cu. 
 
a) $11.53/t 
b) $11.87/t 
c) $12.14/t 
d) $12.42/t 
e) None of the above 
 
 
Q20. What is the cut-off grade when the refinery imposes a limit on a copper mining, processing and 
refining operation, given the following parameters? 
 
Mine capacity: 7,200,000t/y 
Mill capacity: 3,600,000t/y 
Refining capacity: 35,000t/y 
Mine costs: $4.7/t material 
Mill costs: $13.6/t ore 
Refining costs: $7.8/t Cu 
Fixed costs: $9,700,000/y 
Net copper price: $2,850/t Cu 
Recovery: 100% 
Annual discount rate: 12% 
Present value of operation: $724,000,000 
 
a) 0.53% Cu 
b) 0.44% Cu 
c) 0.37% Cu 
d) 0.25% Cu 
e) 0.15% Cu 
 
 
 
 
14 
 
Relevant Formula 
 
 
	
 = 	
(1 + �)�
 
 
 =	
� +�
(1 + �)�
 
 
(1 + � × �) = � +� 
 
� = 
 −� = � − � × 
 × � 
 
� = 
(1 + �) − � 
	
BV	=	R	–	MC	–	PC	
	
R	=	P	x	r	x	g	x	T	
	
MC	=	mc	x	T	
	
PC	=	pc	x	T	
	
	
	
	
	
Equivalent	grade=	
	
	
	
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