RISK ASSESSMENT IN RESERVE ESTIMATION AND OPEN-PIT PLANNING

Sensitivity analyses based on financial variables are now routinely applied to the forecast financial results of mining projects, especially during the feasibility stage. Risk analysis is gaining acceptance, but it is still almost universally confined to the effects of variations in financial variables. Although the single most sensitive factor in almost all mining projects is the ore reserve, it is either ignored or improperly used in sensitivity and risk analyses. Unlike financial variables, the components of the ore reserve (grades and tonnages of mining blocks) are a function of location within the orebody, and physical (mining) access to these components is therefore a function of time, which has a critical effect on forecast cash flows. It is essential that these fundamental concepts are included in risk analyses of mining projects. The effects of the uncertainty of the ore reserve on feasibility studies and open-pit mine design for a small gold-mining venture are explored. Geostatistical simulation is employed as a method of quantifying the risk associated with the use of grades and tonnages that have been estimated from sparse data.