Valuation of similar deposits

When looking at the grade-tonnage curves for a given type of orebody, can we infer its worth from that of similar deposits?

Not necessarily. The orebodies might occur at different depths, have different shapes, continuity, mineralogy, and ground conditions, and the location might be different. All these factors have an influence on the choice of the mining methods, the processing, and the concentrates for sale. This in turn has an impact on the cut-off grades, the size of the operations, the production rates, the capital costs, annual revenues, and operating costs.


Booklet review

I buy cheap 200-page spiral bound booklets for work. Between the monthly, weekly, and daily planning and review, I also take all project related notes in there. A booklet is good for 4 months. When I start a new booklet, I do a review of the previous one. I write down:
• Summary of activities: clients, jobs, results, upcoming work
• Summary of revenues
• Lessons learned: the most important ones. It reminds me of Ray Dalio’s Principles. They become my principles.
• Biggest wins
• Best quotes: the best this time is “in dog beers, I only had one”. Yes, I know, it’s corny.
• Great conversations I had, with whom, what about
• Progress on my 3-months projects
• And finally wrap up with business opportunities. Too many things can fall through the cracks.
Really worth the time.

Comparing revenues generated from copper sulphide ore – Flotation vs. Leaching

There is more and more news appearing on the internet about advances toward copper sulphide leaching, as this technique is deemed to be the next breakthrough for copper mining.  Related patents and technical papers propose many approaches to solve the problem, none of them currently capable of solving all operational constraints.

Given the variety of solutions, I can’t nail down the operating costs of such process.  However, I can compare the expected revenues between floating and smelting a copper concentrate versus leaching the ore and producing cathodes on-site.

General assumptions:

  • Copper price: $2.65 per pound
  • ore: chalcopyrite, no impurities, no secondary payable metals

Assumptions for flotation and smelting

  • Mill recovery: 88%.  I assume that the recovery is independant of the grade, a simplistic assumption, but one that can be revisited later.
  • Copper concentrate grade: 25%
  • Transport cost: $34 per wet tonne
  • Loading and representation: $5 per dry tonne
  • Metal deduction: 1.1 units
  • T/C, R/C: $70 per tonne, $0.07 per pound of copper

Assumptions for leaching

  • Process plant recovery: 75%, similar to oxide leaching
  • Cathode grade: 99.99%
  • Transport cost: $31 per tonne
  • Loading and representation: $5 per dry tonne
  • R/C: $0.07 per pound of copper.  I am not sure that this cost is applicable here.

The results are plotted below for copper feed grades from 0.3% to 1.3%.  I was surprised to see that the ore value is almost the same for both cases.

Cu value float leach vs grade

My observations are the following:

  • This revenue analysis is sensitive to copper recovery; any points up or down for either process can have a significant impact
  • Copper leaching can be economically advantageous if its operating cost is lower than that of flotation. It seems reasonable that it should be the case given that the grinding, flotation, concentrate thickening, and tailings disposal stages are eliminated.
  • Those two aspects are currently impeding the adoption of this technology in the industry.  Any company with the solution to improve either or both variables will certainly gain market value.