Economic Filters Applied to Quantitative Mineral Resource Simulations

Author: Duval J.S.

Source: Natural Resources Research, Volume 12, Number 2, June 2003 , pp. 121-126(6)

Publisher: Springer

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Abstract:

The U.S. Geological Survey has developed a technique that allows mineral resource experts to apply economic filters to estimates of undiscovered mineral resources. This technique builds on previous work that developed quantitative methods for mineral resource assessments. A Monte-Carlo calculation uses mineral deposit models to estimate commodity grades and tonnages of undiscovered deposits. The results then are analyzed using simple estimates of capital expenditures and daily operating costs for a mine and associated mill. The daily operating costs and the value of the ore are used to calculate the net present value of the deposit, which is compared to the capital expenditures to determine whether the deposit is economic. Repetition of these calculations for many deposits produces a table that can be interpreted in terms of the probability of there being deposits that have anet present value exceeding some specified amount. Sample calculations indicate that applying economic filters to simulated mineral resources might change the perception of the results compared to presenting the calculations in terms of the expected mean gross-in-place value of the minerals.

Keywords: Economic filter; mineral resource; simulation

Language: English

Document Type: Research article

Affiliations: 1: U.S. Geological Survey, Reston, VA, 20192; Jduval@usgs.gor

Publication date: 2003-06-01