So You Think You Can Generate Revenue (After You Have Found an Ore Deposit)?

Mining Life Cycle – Stage One, Exploration

Mining is a wealth generating activity that creates significant economic and social benefit through the extraction of valuable mineral resources. The mining life cycle begins at the exploration stage in finding mineral deposits. Assume that all the have stars aligned and you are successful in finding an ore deposit. You are then faced with the question, “Now what?”

Like it or not, as a general rule of thumb only 1 in 100 (or more!) deposits will become an economic mine. In terms of mineral processing, even if a processing plant was developed for a deposit, the evolution of a project from exploration, to performing metallurgical testwork, and eventually to mine production, commissioning, start-up, and processing plant ramp-up can take 10 to 20 years and requires a series of study stages (from conceptual study, prefeasibility study to detail design) before reaching investment approval and implementation.

Soon you will find that success in the mining industry is not measured simply in terms of the number of deposits found, but rather how quickly and successfully you can develop your processing plant and generate revenue. Yes, the time value of money!

Mining Life Cycle

Other Mining Value Chain Important Stages

So to be more effective in terms of delivering your mining project with minimal delay, the next stage after an ore deposit is found is to identify how big the deposit is. This will determine how much the orebody is worth as knowledge on the orebody is built (Resource Development Stage). Identifying the size and grade of the deposit can be done by collecting drill core samples of the ore body. Drilling the deposit in an dense grid pattern fashion will help initial resource tonnage and grade estimates at various cut-offs in achieving the Reserve Development Stage. These samples are assayed to determine the concentration of economic elements present – in essence, the grade of the orebody.

The key elements of a success transition from the exploration stage to the resource/reserve development stage while considering the time value of money are:

  • Know what to deliver and when it needs to be delivered.
  • Configure a smart and disciplined professional delivery team.
  • Improve your drilling performance.
  • Extensive and systematic geological and mineralogical studies of the drill samples (including assays)
  • Identify ore zones and ore types within the deposit.
  • Successful management of work, expenditures, and assets.
  • Benchmark against other deposits and implement lessons learned from the past.

The next stage is scoping studies / pre-feasibility studies that include investigation on Environmental Impact Assessment, initial assessment of required logistics and infrastructure, mining strategies and processing options, metallurgical testwork, options financial analysis (capital cost, operational cost, and revenue), and conceptual process flowsheets.

Mine design (mine layout, mining method, production and equipment requirements), tailings disposal, closure plans, reclamation plans, and mine development and construction lie parallel to process design and can be classified as the next step in the feasibility study stage.

In this stage marketing strategy as well as environmental, political, and social issues need to be investigated in detail and potential risks and mitigations should be identified.

Last but not least are considerations towards processing plant decommissioning, mine closure, and land restoration. After all the mineral has been extracted from the deposit, the land needs to be graded and revegetated to address sustainable mining and mineral processing practices.

In any stages of a mining life cycle, based on factors such as economy, technical (complexity of ore or processing method), social and political risks, or regulatory limitation you may decide to make a Joint Venture (JV) with another company, sell the mine or simply walk away and accept the loss. Sadly, being lucky and finding an ore deposit does not mean you successfully can reach the end of the mining cycle!

For more information on any stage of the mining life cycle, feel free to contact OreVenture Training and Technical Services consultants to provide you with the best engineering solution for your mining project.