Pa. Dowd, RISK ASSESSMENT IN RESERVE ESTIMATION AND OPEN-PIT PLANNING, Transactions - Institution of Mining and Metallurgy. Section A. Mining industry, 103, 1994, pp. 10000148-10000154
Sensitivity analyses based on financial variables are now routinely ap
plied to the forecast financial results of mining projects, especially
during the feasibility stage. Risk analysis is gaining acceptance, bu
t 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 va
riables, the components of the ore reserve (grades and tonnages of min
ing blocks) are a function of location within the orebody, and physica
l (mining) access to these components is therefore a function of time,
which has a critical effect on forecast cash flows. It is essential t
hat these fundamental concepts are included in risk analyses of mining
projects. The effects of the uncertainty of the ore reserve on feasib
ility studies and open-pit mine design for a small gold-mining venture
are explored. Geostatistical simulation is employed as a method of qu
antifying the risk associated with the use of grades and tonnages that
have been estimated from sparse data.