How Mining Works - Exploration/Feasibilty


Minerals exploration is the process of finding commercially viable quantities of minerals to mine. The methods used for exploration vary at different stages of the process depending on the size of the area being explored, as well as the density and type of information sought.


Early stages of exploration include the analysis of public geoscientific information, followed by private reconnaissance field work including prospecting, mapping, geophysical surveys, and geochemical sampling activities. All of this leads to the development of an exploration model to guide more detailed exploration activity.


Detailed exploration includes trenching, drilling (surface and/or underground), to delineate likely zones of mineralization. If a potentially viable deposit is discovered, more intensive sampling and geochemical analysis is conducted in order to fully map and define its size, grade and geometry. This may involve intensive drilling, trenching or underground sampling. An exploration shaft, decline or adit may be excavated to gain underground access to the deposit. To undertake this stage, a mining company must secure an exploration license and other relevant approvals. Exploration activities are supported by professional expertise in safety and risk management, community and environmental management, as well as project, information and financial management. [REF]





As the early stages of exploration result in the definition of a mineral deposit, exploration proceeds to the evaluation stage to determine whether it is economically viable to develop. This stage involves comprehensive technical and socio-economic analysis to determine whether or not mining is economically feasible. It includes detailed assessments of geoscientific and engineering operational factors including mine design infrastructure availability, assessments of environmental impacts and stakeholder issues influencing a project’s social license to operate and detailed financial analysis of costs and revenue projections and market assessment. The engineering studies are driven by economics to produce a more accurate cost estimation for capital and operational expenditures.


12 Steps for a Feasibility Study


1. Geology and Resource: This is the step where drilling and sampling works is performed. Various methods are available for drilling based on the soil and mineral properties. The drill samples are prepared for the assay in order to determine the minimum, maximum and average ore grade and these figures are used to make the reserves estimation. The drilling and sampling procedure are based on the certain guidelines developed by CIM (click here).


2. Mine design and Mineable Reserve: This is the step where most economic way of mining is developed. Mine planning, model development, operation models and cost analysis are performed and thus the mineable reserve is estimated based on the economy. The major steps for the mine development are mine access (surface/underground), conveying system (especially in UG mines), backfill requirement, ore haulage, ventilation, Material top size etc. Then the mining equipment selection is preformed and justified against the performance and economy. The next major stage in mine development is the disposal of overburden generated.


3. Metallurgy and process facility: This is the major backbone of the project development structure. Sampling must be carefully carried out to ensure that the samples used in the metallurgical testwork are real representative of the whole ore body. Some major characteristics of the ore body is determined prior to the development of the plant design which includes Grinding work indices, feed size, settling characteristics, filtration characteristics etc. Metallurgical testwork are performed in order to determine the amenability of the given ore to different concentration technologies.


The major processes that are looked at are:

  • Crushing and grinding,
  • Concentration (Sizing, Gravity or Flotation)
  • Dewatering (Mechanical or filtering)
  • Chemical extraction (especially for gold)


When these tests are completed, based on the test results the basic material flowsheet is developed. And then the equipment selection and plant layout figures are generated. These data are used to estimate the amount and grade of concentrate, middling and tailings that are used to search potential customers and revenue earned.


4. Tailings disposal: In the case when the tailings can't be sold, the tailing disposal system plays a crucial role in order to get the mine permit. Mostly the tailings didn't place any major challenges. But, if the tailings have hazardous or toxic materials like cyanide, mercury etc. in it, then the disposal system must be effective in order to reduce the harmful effect on the environment and society.


5. Infrastructure development: This section includes the civil and major earthworks required to start the production. The office, labs, storage units, plant buildings, mining equipment shelters etc. are included in the infrastructure.


6. Power supply: Determining the power source, power line distribution, total power required and the power cost are the major things to be looked into in this step.


7. Water: Most of the plant process are water based, so, the estimation of water requirement plays an important role in the feasibility studies. Then based on the water demand water source, and its cost are evaluated.


8. Environmental impacts: For a project to be permitted by any government, an environmental clearance is required. In order to get the clearance, the environmental impacts need to be studied. The important aspects are acid mine drainage, cyanide management, and other toxic material controls (Arsenic, mercury, sulfur etc.)


9. Other key parameters: Support facilities, maintenance, transport cost of man and material, labor cost, site access (road facility or construction, fly in fly out, marine etc.), social impacts are also need to be studied.


10. Cost estimation: Based on the entire above-mentioned steps, capital and operating cost for each unit is estimated. It included all the costs for mine equipment, process equipment, construction costs etc.


11. Financial Evaluation: This is the stage where the project is evaluated based on the economy. The total cost and expenses are looked against the expected revenue gained from the selling of final products and by-products. The key financial indicators examined to determine the viability of the project include Net Present Value (NPV) and the Internal Rate of Return (IRR). Annual cash flow need to be estimated over the entire life of the project, from construction to reclamation phase, based on upfront capital expenditures, mine and mill operating costs, employee wages and sales revenue.


12. Sensitivity Analysis: A sensitivity analysis is s then carried out to determine the impact of variation in metal price, operating cost, metal recovery, metal grade, and capital cost on the overall project NPV and IRR values. The viability of the mine project is established by all these stages and if based on these considerations if mine is feasible, then the next stage of actual development occurs. [REF}