Mining Economics: Grade, Tonnage, Cut-Off & Mine NPV

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Turn five geological zones of the Kestrel Ridge deposit into tonnes of ore, ounces of gold and pounds of copper, and find the tonnage-weighted average grade.
• Build the grade-tonnage curve of Kestrel Ridge from a binned block model: tonnes, average grade and contained ounces above ten cut-off grades, then chart it.
• Calculate the net value of one gram of gold in the ground and the break-even and marginal cut-off grades for three ways of mining and processing Kestrel Ridge.
• Calculate the strip ratio of five pit phases, turn the cost per tonne moved into a cost per tonne of ore, and test each phase against the break-even strip ratio.
• Follow copper and gold from the ore through the flotation plant to the smelter and calculate the net smelter return per tonne of four ore types.
• Schedule the Kestrel Ridge reserve through the mill year by year with a ramp-up, calculate the gold produced, count the mine life and chart the production profile.
• Turn the Kestrel Ridge schedule into an annual cash flow with revenue, royalty, operating cost and capex, and value the mine with NPV at 5 % and IRR.
• Build the cash cost and all-in sustaining cost (AISC) per ounce for four years, then test how AISC, margin and cash flow change with the gold price.