Enterprise Optimisation

Enterprise Optimisation
G Whittle1
ABSTRACT
Enterprise Optimisation is a methodology for increasing the value of mining and mineral processing
operations through better long-term planning decisions. It involves a combination of ten mechanisms
which deal with decisions at different stages of the value chain. A decision made at any point in the
chain potentially affects the decision for all other points in the chain. The key, therefore, is to optimise
them simultaneously. The Enterprise Optimisation approach can be shown to produce increases of
five per cent to 35 per cent or more in net present value (NPV), even when several optimisation
methods have already been applied. This paper steps through an example case study, illustrating the
effect of each mechanism and how they can work together to develop greatly improved results. This
example results in a series of counter-intuitive outcomes, which challenges conventional management
practices and typical organisational objectives based on organisational silos.
INTRODUCTION
Enterprise Optimisation is a methodology for increasing the economic value of mining and mineral
processing operations through better long-term planning decisions. It involves a combination of ten
mechanisms, which deal with decisions at different stages of the value chain. A decision made at any
point in the system potentially affects the optimal decision for all other points in the chain. The key,
therefore, is to optimise them simultaneously.
Enterprise Optimisation involves simultaneously optimising:
All steps in the value chain (see Figure 1). It is clear that a decision on one step in the value chain
can affect all the others, eg the plant constraint will affect the optimum cut-off grade, a change
in cut-off grade will affect the mining schedule, and a change in schedule affects which pit shells
should be selected as mine phases. A change in the metal price affects everything, right back to
the pit design.
FIG 1 - The steps in the value chain.
All assets in the enterprise portfolio. A decision affecting one component of an asset portfolio
(many mines, plants, products) can affect the optimal operation of the others.
All periods together. We are mining a depleting resource, so a decision for one period affects our
options for the other periods. What is mined determines the surface for the next period, what will
be available from stockpiles, etc. You cannot just optimise one period and then consider the next.
Apart from the analytical and computational challenges this raises, organisation barriers exist in
the form of departmental and divisional silos which compound the problem. Organisation-wide
participation in an Enterprise Optimisation study is essential to ensure that the analysis is correct,
and that the outcomes are accepted and understood by the individuals who must implement them.
1. MAusIMM, Managing Director, Whittle Consulting Pty Ltd, Suite 13, 333 Canterbury Road, Canterbury Vic 3126. Email: [email protected]
MINE PLANNING AND EQUIPMENT SELECTION (MPES) CONFERENCE / FREMANTLE, WA, 1 - 3 DECEMBER 2010
105
G WHITTLE
To simplify the planning process many decisions are fixed, when they should be dynamic (plant
configuration, head grade, product specification, production rate, etc) and many decisions are made
too early, before the options are analysed (size of the resource, product specification, capital, plant
size/type, mine life, etc). These simplifications prevent the full value of a project being realised.
Enterprise Optimisation overcomes the analytical challenge in dealing with these issues, but we
must all cooperate to overcome the organisational challenges for simultaneous optimisation to be
achieved effectively.
Money has a time value. Net present value has therefore been used as the basic measure of economic
value.
CASE MODEL
This is a fictitious but realistic case, developed so that we can clearly demonstrate the mechanisms
involved without client confidentiality issues. The settings have been made very simple to make the
case easier to follow. Do not interpret this as a limitation on the methodology which can account for
full details of real-life complications in a real case.
single copper/gold pit with four phases;
60 Mt/a mining, maximum eight benches pa vertical advancement (ie 160 m);
plant is 20 Mt/a crush/grind/float;
88 per cent copper recovery, 60 per cent gold recovery, fixed;
producing 28 per cent copper concentrate, with gold contained;
concentrate is transported 70 km by a 600 Kt/a pipeline to the port;
the concentrate is then shipped offshore to a smelter/refinery;
gold price US$900/oz;
copper price US$2.50/lb declining to US$1.50/lb in the first five years; and
ten per cent discount rate for NPV calculation.
CASE 0 MANUAL CASE

The starting point is a manual pit and phase design, scheduled with five bench fixed-lead between phases.
All economic material is processed, and there is no stockpiling. It took three frustrating days to develop
the manual pit and phase shapes, and the designer had a guide as he had already seen the optimised pit.
Considering the waste stripping required to gain access and the contribution of other economic material
accessed on the way, it was a question of judgement of whether to include pockets of high-grade material.
The manual plan produced an NPV of US$1598 M. That is the sum of the discounted cash flows
after US$592 M in capital expenditure. This is a good result, but it can be improved.
Although Enterprise Optimisation is about simultaneous optimisation, in this example we will turn
on one mechanism at a time so that the effect of each can be discussed.
STEP 1 PIT
Pit designs can be optimised using Lerchs-Grossmann (1965). Lerchs-Grossmann is effective at
determining the economic three-dimensional shape of the pit considering block grades, pit slopes,
costs, recoveries, and metal prices. In this step, pit shells 4, 8, 10 and 16 with roughly equal tonnes
were arbitrarily selected as intermediate phases from the 16 nested pits produced by varying the
revenue factor. The optimised pit does not look significantly different from the manual pit but it does
vary in detail in certain parts. You cannot beat the computer. NPV is increased by 7.2 per cent.
The Lerchs-Grossmann optimisation is based on the valuation of each block in the model. The
cost modelling applied and the degree to which material can be characterised for its processing
throughput, cost and recovery can have a significant impact on the resulting pits and phases.
STEP 2 PHASES
Phases can be selected using Whittle auto-pushback chooser and skin analysis (choice of ultimate shell).
Selecting 4 phases from 16 nested shells generated by varying the revenue factor in Lerchs-Grossmann,
involves testing 1820 combinations. With simple scheduling assumptions this can be computed quite
quickly. This leads to a smaller ultimate pit with 18 per cent less rock but only nine per cent less ore.
Shells selected for phases are 2, 3, 8, and 12 giving better early access to ore, but reduced overall mined
resource. Only a small proportion of the NPV increase is due to reducing the size of the ultimate pit,
106
ENTERPRISE OPTIMISATION
but this change causes much discussion and controversy. In most pits, although the outer shells may
be cash positive (which is why Lerchs-Grossmann included them), NPV may be negative due to the
time delay between the waste mining near the surface and the eventual revenues derived from the
deeper ore the extra discounting of the later periods in the NPV calculation causing this effect. The
bulk of the value, however, is produced by designing the best first phase with early access to high grade
material with a low stripping ratio. NPV is increased by 6.4 per cent.
STEP 3 SCHEDULING
So far simple five bench fixed-lead scheduling has been applied. Applying the Whittle Milawa
algorithm produces a different bench lead for each phase for each period. The optimiser is able to
delay waste and bring forward high grade material within the phases presented. Mine scheduling is
mathematically challenging as the orebody is not linear. Conventional mathematics would indicate
the use of mixed integer programming for this purpose. Milawa applies a search algorithm (not
mixed integer) to solve the mine scheduling challenge. NPV is increased by 4.4 per cent.
STEP 4 CUT-OFF GRADE

Inspired by Ken Lane (1988), the Whittle cut-off grade optimiser raises early cut-off to increase early
metal production, even if positive margin material is discarded and the mine life shortened. This is not
high-grading but right-grading. The magnitude of the effect may be a surprise to many but not to
those familiar with this mechanism, which is sadly not universally practised. Extra mining capacity is
required to raise the cut-off grade if mining rate variations have already been flattened by applying
a limit before this step, then little or no gain will be observed which would be an opportunity missed.
Cut-off grade optimisation produces the best results in deposits with lots of grade variation, ie a
wide grade-tonnage curve. It is common for geologists and mining engineers to be uncomfortable
with the proposition of discarding economic material this is an arguably irrational reaction. NPV
is increased by 15.1 per cent in this case.
STEP 5 STOCKPILES
Stockpiles were limited to 60 Mt in this case. Rather than discard low value material, it may as well
be stockpiled and processed later in the life of the operation. Reclaiming low grade material later
recoups extra value and allows the early cut-off grade to be raised even further. Rehandling costs
and possibly different recoveries for the additional weathering of the material must be taken into
account. The mine life and overall resource recovery is almost returned which is comforting to many.
NPV is increased by 4.6 per cent.
Note: This is how far you can go with the widely used Gemcom Whittle software the shades on
individual steps 1 to 5 on the graph in Figure 2 are different as the mechanisms are sequential and
isolated, but nevertheless sum to a total increase in value of 37.7 per cent. In late 2010, Whittle
version 4.4 will integrate steps 3 to 5 (schedule, cut-off/blending, stockpile), which gives most of the
benefit of step 6.
STEP 6 SIMULTANEOUS OPTIMISATION

We now switch to Whittle Consultings proprietary Prober software described by Whittle (2009).
This more recent development is capable of performing the previous steps 1 to 5 simultaneously from
a set of nested shells produced by Lerchs-Grossmann. Same settings, same problem, simply a better
optimisation by having the mechanisms work together. NPV is increased by a further 14.1 per cent
(Note: approximately two per cent of this was due to reselecting the phases to shells 3, 5, 9, and 13).
Components 1 to 6 cover what can be referred to as Mining Optimisation everything the mining
department is responsible for (see Figure 2). From step 6 onwards the graph covers all previous steps
as these are reassessed simultaneously. Now we must consider the rest of the value chain.
STEP 7 PROCESSING CALIBRATION

All the steps so far presumed that the plant will be run at its nameplate 20 Mt/a with fixed recoveries
of copper 88 per cent and gold 60 per cent.
The fact is that the plant could be run at a range of throughput rates, with consequences on
the recovery. Less grind time and residence can increase plant throughput but recoveries suffer
significantly, and conversely slightly higher recoveries can be achieved if the plant is slowed down.
107
G WHITTLE
Accumulated Value
$3,000
$2,800
NPV $Millions
$2,600
$2,400
$226
$2,200
$74
$241
$2,000
$2,426
$70
$1,800
$102
$115
$1,600
$1,598
7.2%
6.4%
4.4%
15.1%
4.6%
51.8%
14.1%
tal
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FIG 2 - The steps in mining optimisation.
Please note that we are not expanding the plant with capital in this step, just changing the residence
time and therefore altering the throughput and recovery.
Looking at Figure 3 in isolation is unlikely to result in a metallurgist or process manager selecting
the high throughput solution. If the plant is only to be run at one speed then 20 Mt is possibly the
right choice. However, if the optimiser is in control it uses the whole range during the life of the
operation a dynamic mechanism.
Given throughput flexibility, the optimiser often sacrifices recovery to increase throughput. It is a
complex trade-off between extra immediate cash flows, extra mining and processing cost, and the
value of the metal lost and the impact that it has on the longevity of the operation and future cash
flows. At the end of the mine life it enjoys the benefit of higher recovery, with less throughput (see
Figures 4 and 5).
Allowing the optimiser to use this approach adds a further 4.4 per cent to the NPV. This figure
would have been closer to eight per cent if not for the fact that we are now regularly hitting the
concentrate pipeline limit of 600 Ktpa a downstream bottleneck.
This mechanism has some similarities with cut-off optimisation in that it is trading off overall
resource recovery against more rapid delivery of metal to market early in the life of the operation to
increase early cash flows.
Reco very
Recovery vs Throughput
90.0%
85.0%
80.0%
75.0%
70.0%
65.0%
60.0%
55.0%
50.0%
18
20
22
Au Recovery
24
26
Cu Recovery
Throughput (Mill tpa)
FIG 3 - Recovery versus throughput.

108
FIG 4 - Throughput optimised.
Recoveries
100%
90%
80%
Cubase
70%
Curecov
60%
Aubase
50%
Aurecov
40%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
FIG 5 - Recovery optimised.
STEP 8 PRODUCT SPECIFICATION

The base case presumes that a 28 per cent copper concentrate is produced, with recovered gold contained.
Figure 6 shows how a range of concentrates could be produced with significant impact on recovery,
with an effect on the transportation of a more or less bulky concentrate product and different
percentage of metal paid by the smelter to the mine for its concentrate.
With a spreadsheet to calculate net smelter return (NSR) it is easy to show that:
when the copper price is $2.50/lb, the best solution is a 24 per cent concentrate as the benefit of
extra recovery outweighs the extra transport cost of the bulky product; and
Cu Recovery
95.0%
Recovery
90.0%
85.0%
24%Con
26%Con
80.0%
28%Con
30%Con
75.0%
32%Con
70.0%
18
20
22
24
26
Throughput (Mill tpa)
FIG 6 - The effect of concentrate percentage on recovery.

109
G WHITTLE
when the copper price is $1.50/lb (as per long-term in this case), the best solution is the 28 per cent
concentrate as used in the base case.
This approach is pursuing margin.
It is more difficult, however, to calculate the benefit of throughput. The optimiser has used this
flexibility, at great expense in terms of metal recovery at certain times, to get more metal to market
through the restrictive pipeline, which at this point is the major constraint in the system.
A metallurgist would be unlikely to recommend producing a 32 per cent concentrate involving an
eight per cent lower recovery by looking at Figure 6 in isolation, yet the optimiser has shown this to
be the best decision for the business under many circumstances. In Figures 7, 8 and 9 it can be seen
that when the pipeline is active as a bottleneck, the optimiser moves to a higher grade concentrate to
get more metal to market, even at a significant cost in terms of lower recovery.
Allowing the optimiser to use this approach adds a further 5.5 per cent to the NPV.
Case 8 - Product: Copper Con Tonnes

700,000
600,000
Concentrate Tonnes
500,000
400,000
Truck
Pipe
300,000
Limit
200,000
100,000
10 11
Year
12
13
14
15
16
17
18
19
20
FIG 7 - The concentrate production reaches the pipeline limit.
ConCuGrade
33.0%
32.0%
31.0%
30.0%
29.0%
28.0%
27.0%
26.0%
25.0%
24.0%
Default
Optimized
9 10 11 12 13 14 15 16 17 18 19 20
Year
FIG 8 - Concentrate copper grade raised to increase metal production.
CuRecovery
90.0%
88.0%
86.0%
84.0%
82.0%
80.0%
78.0%
76.0%
74.0%
72.0%
70.0%
Default
Optimized
9 10 11 12 13 14 15 16 17 18 19 20
Year
FIG 9 - Copper recovery losses a consequence.

110
STEP 9 LOGISTICS
Additional trucking of concentrate is possible at a cost of $30/tonne. This cost is high because it
is a short-term strategy we will not make a long-term contract, nor invest in handling facilities
to make this process less costly, and because the road needs significant maintenance not having
been designed for this level of heavy traffic. The additional capacity allows the previous mechanism
(processing and product specification, supported by all the mining mechanisms) to pursue margin
again, not throughput. More costly logistics but better value overall.
Allowing the optimiser to use this flexibility adds a further 7.1 per cent to the NPV. See Figure 10.
Case 9 - Logistics: Copper Con Tonnes

1,000,000
900,000
Concentrate Tonnes
800,000
700,000
600,000
Truck
500,000
Pipe
Limit
400,000
300,000
200,000
100,000
1
10 11 12 13 14 15 16 17 18 19 20
Year
FIG 10 - Movement of the concentrate with additional trucking.
STEP 10 CAPITAL
Rather than taking such drastic measures to manage the bottlenecks in the system, why not size
the components of the system correctly in the first place. As long as this analysis is done during the
feasibility study and not after construction of the plant and infrastructure, then rescaling is feasible.
In the manual base case, there was ample mining fleet capacity and pipeline capacity; in fact the
finance manager may have taken steps to save some capital in these areas. However, now that we
have simultaneously optimised the pits, phases, schedule, cut-off, stockpiles, then raised the plant
throughput, we have both the mining fleet and the pipeline fully utilised. This raises the question
of whether they should be expanded. (Increasing the plant size should also be considered, but that
has been left out of the scope of this example). We can add extra mining capacity at $1.25 per tonne
per year and extra pipeline capacity at $20 per tonne per year these increases are only allowed in
period 0 for simplicity of this example.
Making a single capital decision can be done by design trial and error iterations say five, increasing
the capacity progressively and seeing if the NPV increases more than the capital cost of the expansion.
With two capital decisions that affect each other, that would be 5 5 = 25 iterations of a complete
life-of-mine plan with nine active mechanisms.
If we did not increase the pipeline capacity then we would not need so much mining capacity,
and if we did not increase the mining capacity then we would not need such a large pipeline. These
decisions must be made simultaneously, yet it is typical to delegate these decisions to the mining
manager and the logistics manager respectively, without any dialogue or cooperation between the
two. This would lead to a suboptimal outcome.
In practice, there are dozens of capital decisions that would require thousands of life-of-mine plan
iterations. This is not possible, so it does not get done.
The optimiser can determine how much capital is worth spending on each constraint
simultaneously, and rebalance the pit and phase selection, mine schedule, cut-off, stockpile,
processing, product, logistics at the same time (steps 1 to 9).
111
G WHITTLE
Mining capacity goes up to 83 Mt/a, the pipeline to 1 Mt/a. Trucking no longer required. The shells
used for phases are now 4, 7, 9, and 14. An extra $37 M of capital spend but NPV after the extra
capital increases by a further 4.9 per cent.
SUMMARY
Figure 11 summarises the impact of all ten components described above. The recent ones have
been focused on dealing with downstream bottlenecks and although each one introduced a new
mechanism, it was critical to assess the impact it had on the previous mechanisms to calibrate it
properly. The benefits of downstream modifications must be assessed with consideration of what
the mine can deliver due to its internal limits the head grade is likely to reduce as mining tonnage
increases. Simultaneous optimisation is essential to get the balance of these effects right.
Accumulated Value
$3,000
$2,800
$78
$113
NPV $Millions
$2,600
$88
$70
$2,400
$226
$2,200
$74
$2,775
$241
$2,000
$70
$1,800
$102
$115
$1,600
$1,598
7.2%
6.4%
4.4%
15.1%
4.6%
14.1%
4.4%
5.5%
7.1%
4.9%
73.7%
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FIG 11 - The ten components of Enterprise Optimisation combine to increase net present value by 73.7 per cent in this case.
OVERALL RESULT
NPV has been increased from US$1598 M in the base case, to US$2775 M in case 10 with all
mechanisms working together an increase in value of 73.7 per cent.
The optimised plan is undoubtedly more complicated than the manual plan as can be seen from
Figures 12 and 13, but the higher NPV justifies this. Mining has increased, significant amounts are
stockpiled, plant throughput is up for many of the early years, and most importantly the early feed
grades to the plant are approximately doubled. The combination of these significantly increases metal
production in early years when the time value of money is highest and the copper metal price is high.
Please consider what has been done in the various cases:
ultimate pit has been reduced, along with reserves;
mining, processing and logistics costs have been increased significantly;
plant recovery has been significantly decreased, due to higher throughput and higher concentrate
grade in some cases;
mining equipment has been made idle, two thirds of the fleet for several years;
capital expenditure has increased; and
life of the operation has reduced by several years.
All these outcomes are counter-intuitive and in a typical organisation would have been resisted
by the individual managers concerned, and by the Chief Executive Officer. However, together they
have transformed the economic performance of the business. If any of these changes were made
in isolation it would be disastrous, so a coordinated approach to the analysis and implementation
is essential. The value comes from looking at how the different steps in the value chain can affect
each other and can work together, rather than looking at them in isolation. Much of this new value
is hidden between the steps managed by the organisational silos, and so a different mindset is
required to identify it.
112
Case 0. Manual - Schedule

140
1.40
1.30
1.20
120
1.10
100
1.00
0.70
60
0.60
0.50
40
Au g/t
0.80
Cu %
Tonnes Millions
0.90
80
0.40
0.30
20
0.20
0.10
0.00
1
10
11
12
13
14
15
16
17
18
19
20
Year
Stockpile Bal
Waste
Stockpiled
Processed from Mine
Cu grade Processed
Au Grade Processed
Processed from Stockpile
FIG 12 - Schedule for the manual design.
Case 10. Capital - Schedule

1.40
140
1.30
1.20
120
1.10
100
1.00
0.70
0.60
60
0.50
40
Au g/t
0.80
Cu %
Tonnes Millions
0.90
80
0.40
0.30
20
0.20
0.10
0.00
1
10
11
12
13
14
15
16
17
18
19
20
Year
Stockpile Bal
Waste
Stockpiled
Processed from Mine
Cu grade Processed
Au Grade Processed
Processed from Stockpile
FIG 13 - Schedule for full Enterprise Optimisation plan.
Figure 14 sums up the overall change in the cash flow profile due to the ten mechanisms applied.
Basically US$1.5 billion of cash flow has been moved from the last few years of the life of the operation
to the first three years. This provides business options and security for the project, and greatly
increases the likelihood that it will achieve financial support and approval. The possible negatives of
reducing reserves and reducing employment longevity can be compensated for by reinvesting some
of the early proceeds into exploration or other worthwhile projects.
See Tables 1 and 2 for details of the manual case and the fully optimised life of mine schedules.
Please note that some of the benefit in this case is derived from increasing copper production in
the early years when the copper price is high. Repeating the entire case study with flat copper price
at $1.50/lb still generates and overall increase in NPV of 53.9 per cent (rather than 73.7 per cent).
The amount of the improvement possible depends entirely on the configuration of the base case, and
the orebody itself. Applying the mechanisms in a different order would also affect the quantification
of the effect of each step.
113
G WHITTLE
Net Cash
$1,200
$1,000
$800
Manual
$400
Optimized
Millions
$600
$200
$0
1
10
11
12
13
14
15
16
17
18
19
20
-$200
-$400
-$600
-$800
Year
FIG 14 - Net cash flow before and after Enterprise Optimisation.
ACTUAL PROJECTS
The example above involves just one pit. The Enterprise Optimisation method has been applied to
situations involving a significant number of pits, underground stopes, elements, processing plants,
products, etc and all their attendant interactions.
Portfolio Enterprise Optimisation studies performed to date include:
86 mines, smelter and leach;
38 pit and underground mines, five concentrators, smelter, leach and refinery, blending
requirements, 15 product options;
18 deposits with 130 pits, pressure and heap leach and refinery;
40 underground mines, three pits, two product streams with shared infrastructure;
80 deposits country-wide, several wash plants, logistics options to central smelter; and
three pits with direct feed and flotation option, negotiable oxygen ratios with throughput and
recovery implications.
Actual Enterprise Optimisation studies completed this year have identified opportunities for NPV
increase of between 25 per cent and 85 per cent. In each of these cases conventional optimisation
approaches (including the use of Whittle software) had already been applied.
CONCLUSION
Management performance measurement involving key performance indicators like minimising
cost, maximising recoveries, maximising reserves and life of mine, may be leading us away from
significant value enhancing opportunities.
Any business plan which has the same setting for any decision (mining rate, stripping ratio, cut-off
grade, plant head grade, throughput, production, product specification) year after year cannot be
optimal. The orebody is not the same each year and even if it was, the time value of money would
lead us to different trade-off decisions in each period. It is therefore relatively easy to spot where
opportunity for improvement by this technique may exist.
Enterprise Optimisation unleashes value by dynamically harmonising the flexibility in all parts of
the operation. It relies on a combination of philosophy, methodology and sophisticated software to
achieve the result. We have shown that there are very considerable gains to be made by optimising
a number of mechanisms that are not usually considered by many organisations, and by optimising
them simultaneously. Complexity and variation are opportunity embracing this with a structured
approach can realise significant economic benefits.
114
27 609
20 146
28 468
30 723
31 677
55 488
53 747
60 000
60 000
60 000
52 297
48 999
36 904
27 011
23 308
21 585
10 654
648 616
10
11
12
13
14
15
16
17
18
19
20
Total
Total
mined
Ktonne
Year
329 138
327
1 585
3 308
7 011
16 904
28 999
32 297
41 869
45 080
43 899
33 747
35 488
11 677
10 723
8 468
146
7609
Waste
Ktonne
To
Stkpl
Ktonne
319 479
10 327
20 000
20 000
20 000
20 000
20 000
20 000
18 131
14 920
16 101
20 000
20 000
20 000
20 000
20 000
20 000
20 000
To plant
Ktonne
From
Stkpl
Ktonne
319 479
10 327
20 000
20 000
20 000
20 000
20 000
20 000
18 131
14 920
16 101
20 000
20 000
20 000
20 000
20 000
20 000
20 000
Ore
proc
Ktonne
0.70
0.00
0.00
0.00
0.77
0.72
0.75
0.74
0.64
0.70
0.73
0.75
0.78
0.86
0.86
0.68
0.67
0.65
0.70
0.57
0.36
Cu
%
0.51
0.00
0.00
0.00
0.58
0.53
0.50
0.41
0.31
0.39
0.45
0.42
0.45
0.50
0.48
0.47
0.52
0.64
0.81
0.70
0.52
Au
g/t
6 991
250
453
471
465
402
440
459
427
366
435
541
427
421
409
440
358
226
Conc
Ktonne
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
Con Cu
%
Case 0: Manual Base Case
TABLE 1
Case 0: Manual base case.
14.0
14.3
14.2
12.6
10.5
9.4
10.6
11.7
10.8
10.9
11.0
10.7
13.2
14.8
18.9
22.1
23.3
27.5
Con Au
g/t
9814
335
604
611
572
483
544
583
527
454
542
668
556
570
665
827
742
531
Revenue
$M
$940
$-
$-
$-
$15
$31
$34
$39
$54
$71
$76
$87
$87
$87
$78
$80
$46
$45
$41
$29
$40
Min
cost
$M
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
$-
Reclaim
$M
$2187
$-
$-
$-
$70
$136
$136
$136
$136
$136
$136
$126
$108
$115
$136
$136
$136
$136
$136
$136
$136
Proc
cost
$M
$2525
$-
$-
$-
$90
$163
$171
$167
$146
$159
$166
$153
$131
$157
$194
$153
$152
$148
$160
$131
$83
Sell
cost
$M
$1598
$592
NPV
$2190
Less
capital
$-
$-
$-
$32
$60
$65
$60
$43
$57
$72
$62
$54
$86
$133
$105
$146
$230
$368
$369
$248
DCF 10%
$M
$4162
$-
$-
$-
$159
$274
$270
$229
$148
$178
$205
$161
$127
$184
$259
$187
$236
$336
$490
$446
$273
Net
cash
$M
115
Total
mined
Ktonne
83 259
77 809
68 257
83 259
26 974
23 470
21 120
83 259
73 363
28 154
4865
573 789
Year
10
11
12
13
14
15
16
17
18
19
20
Total
272 328
1189
608
36 163
81 689
146
244
3042
57 142
41 853
29 624
20 628
Waste
Ktonne
111 261
302
6839
16 191
1570
740
2167
6955
16 863
820
22 183
36 630
To
Stkpl
Ktonne
190 201
3375
20 707
21 009
20 234
21 060
16 976
9254
25 584
26 001
26 001
To plant
Ktonne
111 261
7 918
18 000
18 000
16 384
1175
22 425
1740
2167
6955
16 496
From
Stkpl
Ktonne
301 462
7918
18 000
18 000
19 759
20 707
22 184
22 425
21 974
23 227
23 931
25 750
25 584
26 001
26 001
Ore
proc
Ktonne
0.75
0.00
0.00
0.00
0.00
0.00
0.00
0.28
0.36
0.40
0.50
0.77
0.66
0.52
0.81
0.95
0.81
0.73
1.15
1.11
0.83
Cu
%
0.55
0.00
0.00
0.00
0.00
0.00
0.00
0.16
0.25
0.28
0.37
0.55
0.34
0.43
0.70
0.57
0.51
0.61
0.73
0.77
0.93
Au
g/t
7 387
70
203
226
312
501
460
362
559
689
601
638
999
968
799
Conc
Ktonne
26.9
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
28.0
26.0
26.0
26.0
24.0
Con Cu
%
Case 10: Fully Optimised
TABLE 2
Case 10: Fully optimised.
12.9
11.0
13.5
13.7
14.2
13.5
9.6
15.6
16.3
11.1
11.8
13.7
10.4
11.5
16.8
Con Au
g/t
10 539
87
267
299
417
659
553
500
780
859
762
892
1446
1570
1447
Revenue
$M
$832
$-
$-
$-
$-
$-
$-
$-
$-
$-
$7
$41
$106
$121
$31
$34
$39
$121
$99
$113
$121
Min
cost
$M
$33
$-
$-
$-
$-
$-
$-
$2
$5
$5
$5
$-
$0
$7
$1
$1
$2
$5
$-
$-
$-
Reclaim
$M
$2050
$-
$-
$-
$-
$-
$-
$54
$122
$122
$134
$141
$151
$152
$149
$158
$163
$175
$174
$177
$177
Proc
cost
$M
$2632
$-
$-
$-
$-
$-
$-
$25
$73
$82
$113
$181
$165
$131
$202
$248
$217
$225
$352
$341
$277
Sell
cost
$M
$3404
$629
$2775
Less
capital
NPV
$-
$-
$-
$-
$-
$-
$1
$19
$29
$55
$114
$55
$41
$204
$236
$212
$250
$617
$776
$793
DCF 10%
$M
$4992
$-
$-
$-
$-
$-
$-
$6
$66
$90
$158
$297
$130
$89
$398
$418
$341
$366
$821
$939
$873
Net
cash
$M
G WHITTLE
116
REFERENCES
Lane, K F, 1988. The Economic Definition of Ore (Mining Journal Books: London).
Lerchs, H and Grossmann, L, 1965. Optimum design of open-pit mines, Trans CIM, LXVII:17-24.
Whittle, J, 2009. The Global Optimizer works What next?, in Proceedings Orebody Modelling and Strategic
Mine Planning Conference, pp 3-6 (The Australasian Institute of Mining an Metallurgy: Melbourne).
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Enterprise Optimisation

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Enterprise Optimisation

FIG 1 - The steps in the value chain.

CASE 0 MANUAL CASE

STEP 4 CUT-OFF GRADE

STEP 6 SIMULTANEOUS OPTIMISATION

STEP 7 PROCESSING CALIBRATION

FIG 2 - The steps in mining optimisation.

Throughput (Mill tpa)

FIG 3 - Recovery versus throughput.

FIG 4 - Throughput optimised.

FIG 5 - Recovery optimised.

STEP 8 PRODUCT SPECIFICATION

Throughput (Mill tpa)

FIG 6 - The effect of concentrate percentage on recovery.

Case 8 - Product: Copper Con Tonnes

FIG 7 - The concentrate production reaches the pipeline limit.

FIG 8 - Concentrate copper grade raised to increase metal production.

FIG 9 - Copper recovery losses a consequence.

Case 9 - Logistics: Copper Con Tonnes

FIG 10 - Movement of the concentrate with additional trucking.

Case 0. Manual - Schedule

Processed from Mine

Processed from Stockpile

FIG 12 - Schedule for the manual design.

Case 10. Capital - Schedule

Processed from Mine

Processed from Stockpile

FIG 13 - Schedule for full Enterprise Optimisation plan.

FIG 14 - Net cash flow before and after Enterprise Optimisation.

Case 0: Manual Base Case

Case 10: Fully Optimised

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