INTRODUCTION

  • It is common to select a optimal pit shell defining the mineral reserve without much further consideration
  • Other strategic opportunities are being ignored?
  • Small value compromise for significant strategic gain

PIT OPTIMISATION

The objective is to determine the maximum inventory of open pit minable reserves

▫ One of the methods, Lerchs and Grossmann algorithm utilised in many of the commercially available software packages

▫ Run various scenarios
▫ Typically Optimise Maximum Cash Flow

POST PIT OPTIMISATION – ALIGNING TO YOUR STRATEGY

Strategic issues that could be considered:

  • Annual cash flow
  • Life of mine
  • Operating risk
  • Technical, economic and political risks
  • Product requirements (Blending Strategies)

Where to focus post pit optimisation process?

  1. Selection of ‘Ultimate Pit’
  2. Optimisation within the ultimate pit

POST PIT OPTIMISATION PROCESS


PIT SELECTION


SELECTION OF THE ULTIMATE PIT


OPTIMISE WITHIN ULTIMATE PIT



SIGNIFICANCE OF DISCOUNT RATE



CONCLUSION

  • Pit optimisation is a iterative process further future analysis after the initial pit optimisations can add strategic gain
  • Changes to the optimisation input parameters, specifically the discount rate, without due process may have a significant impact on the pit selection
  • Understanding the sensitivities will reduce the risk of executing a sub-optimal life of mine plan