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transcript
Technical Meeting on
Uranium Production Cycle
Techno-Feasibility Studies & Project Planning
Henry SCHNELL
Vienna – October 7-11, 2013
HA SCHNELL Consulting Inc. hatschnell@xplornet.com
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Plan
Project Cycle
Study Definitions
Study Phases
Study Content
Rules of Thumb
The EIS
Project Planning
Techno-Feasibility Studies & Project Planning – Vienna, October 7-11, 2013
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Project Cycle
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Uranium Production Cycle
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Value Chain within a Mining Project
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Study Definitions
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Study?
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Mining Feasibility Study
From Hard Rock Miners Handbook* by Jack de la Vergne
A mining feasibility study is an evaluation of a proposed mining
project to determine whether the mineral resource can be mined
economically. There are three types of feasibility study used in
mining, order of magnitude, preliminary feasibility and detailed
feasibility.
1. Order of magnitude
2. Preliminary feasibility
3. Detailed feasibility
Techno-Feasibility Studies & Project Planning – Vienna, October 7-11, 2013
*The Hard Rock Miner’s Handbook, Edition 2
Copyright © 2000 McIntosh Redpath Engineering
Limited, 2000
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Study definitions
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Project Management
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Project Influence
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Study Phase Parameters
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Order of Magnitude
Order of magnitude feasibility studies (sometimes referred to as
"scoping studies") are an initial financial appraisal of an indicated
mineral resource. Depending on the size of the project an order of
magnitude study may be carried out by a single individual. It will
involve a preliminary mine plan, and are the basis for determining
whether to proceed forward with an exploration program, and
more detailed engineering work. Order of magnitude studies are
developed copying plans and factoring known costs from existing
projects completed elsewhere and are accurate to within 40-50%.
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Preliminary Feasibility
Preliminary feasibility studies or "pre-feasibility studies" are more
detailed than order of magnitude studies. A preliminary feasibility
study is used in due diligence work, determining whether to
proceed with a detailed feasibility study and as a "reality check" to
determine areas within the project that require more attention.
Preliminary feasibility studies are done by factoring known unit
costs and by estimating gross dimensions or quantities once
conceptual or preliminary engineering and mine design has been
completed. Preliminary feasibility studies are completed by a small
group of multi-disciplined technical individuals and have an
accuracy within 20-30%.[
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Detailed Feasibility
Detailed feasibility studies are the most detailed and will determine
definitively whether to proceed with the project. A detailed
feasibility study will be the basis for capital appropriation, and will
provide the budget figures for the project. Detailed feasibility
studies require a significant amount of formal engineering work,
are accurate to within 10-15% and can cost between ½-1½% of the
total estimated project cost.[
Often a more thorough study is required – Bankable Feasibility
Study
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Study Content
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Study Phases(1 of 2)
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Study Phases (2 of 2)
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Engineering Requirements
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ESTIMATE TYPE
Legend: R - minimum requirement, D - desirable 1 2 3 4
PROJECT PRODUCT CAPACITY LOCATION & SITE REQUIREMENTS R
SCOPE- UTILITY & SERVICE REQUIREMENTS: BUILDING & AUXILIARY R
STANDARD REQUIREMENTS: RAW MATERIALS & FINISHED PRODUCT R
PROCESSES HANDLING & STORAGE REQUIREMENTS R
PROCESS ROUGH SKETCHES D
FLOW PRELIMINARY R
SHEET ENGINEERED R R
PRELIMINARY SIZING & MATERIAL SPECIFICATIONS R
EQUIPMENT LIST
ENGINEERED SPECIFICATIONS MAJOR EQUIPMENT R
SPECS & DATASHEETS ALL EQUIPMENT D R
GENERAL ARRANGEMENT (A) PRELIMINARY R
(B) ENGINEERED R
LOCATION D R R R
GENERAL DESCRIPTION D R R
SITE SOIL BEARING D R R
LOCATION & DIMENSIONS R.R. ROADS IMPOUNDS FENCES D R R
WELL-DEVELOPED SITE PLOT PLANT & TOPOGRAPHICAL MAP R R
WELL-DEVELOPED SITE FACILITIES R
BUILDINGS APPROXIMATE SIZES & TYPE OF CONSTRUCTION R
& FOUNDATION SKETCHES R
STRUCTURES ARCHITECTURAL & CONSTRUCTION R R
PRELIMINARY STRUCTURAL DESIGN D R
GENERAL ARRANGEMENTS & ELEVATIONS R R
DETAILED DRAWINGS R
ROUGH QUANTITIES (STEAM WATER, ELECTRICITY, ETC.) D
UTILITY PRELIMINARY HEAT BALANCE D
REQUIREMENTS PRELIMINARY FLOW SHEETS D
ENGINEERED HEAT BALANCE R R
ENGINEERED FLOW SHEETS R R
WELL-DEVELOPED DRAWINGS R
PRELIMINARY FLOW SHEETS & SPECIFICATIONS R
PIPING ENGINEERED FLOW SHEETS AND P & ID's R R
PIPING LAYOUTS & SCHEDULES R
PRELIMINARY INSTRUMENT LIST D R
INSTRUMENTATION ENGINEERED LIST & AND P & ID's D R
WELL-DEVELOPED DRAWINGS D
PRELIMINARY MOTOR LIST - APPROXIMATE SIZES R
ENGINEERED LIST & SIZES R R
ELECTRICAL SUBSTATIONS, NUMBERS & SIZES, SPECIFICATIONS D R R
DISTRIBUTION SPECIFICATIONS R
PRELIMINARY LIGHTING SPECIFICATIONS D
PRELIM. INTERLOCK CONTROL & INSTRUMENT WIRING SPECS. R
ENGINEERED SINGLE-LINE DIAGRAMS WER & LIGHT) R R R
WELL DEVELOPED DRAWINGS R
INSULATION ROUGH SPECIFICATIONS D
& PRELIMINARY LIST OF EQUIPMENT & PIPING TO BE INSULATED R
PAINTING INSULATION & PAINTING SPECIFICATIONS & SCHEDULES D R
WELL-DEVELOPED DRAWINGS OR SPECIFICATIONS D
ENGINEERING & DRAFTING D R R
MANHOURS PROJECT STAFF MANPOWER - HOME OFFICE & FIELD R R
LABOR BY CRAFT D R
SUPERVISION D R
Type Estimates: 1. Conceptual Level Estimate Accuracy . 25% to +40% 2. Preliminary Level Estimate Accuracy - 20% to +25% 3. Feasibility Level Estimate Accuracy- 10% to +15%
4. Detailed Level Estimate Accuracy - 5% to +7%
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Project Toll Gate Review - Example
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Project Leadership - example
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Typical Final Report Outline
Volume 1 Summary Report
Volume 2 Geology and Ore Reserves
Volume 3 Mine Planning
Volume 4 Mine Plant
Volume 5 Design Criteria, Mineral Processing and Metallurgy
Volume 6 Consultants’ Reports
Volume 7 Side Studies
Volume 8 Environmental and Socio-economic
Volume 9 Quotations and Proposals
Volume 10 Project Planning and Execution
Volume 11 Cost Estimates
Appendixes of all background information
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Test Work Requirements
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See second presentation of
this meeting
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Rules of Thumb
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Rules of Thumb - Cost
The cost of a detailed feasibility study will be in a range from ½%
to 1½% of the total estimated project cost. Source: Frohling and
Lewis
The cost of a detailed or “bankable” feasibility study is typically in
the range of 2% to 5% of the project, if the costs of additional (in-
fill) drilling, assaying, metallurgical testing, geotechnical
investigations, environmental scrutiny, etc. are added to the direct
and indirect costs of the study itself. Source: R. S. Frew
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Six-tenth Rule
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Rules of Thumb - Time
The definitive feasibility study for a small, simple mining project
may be completed in as little as 6-8 weeks. For a medium-sized
venture it may take 3-4 months, and a large mining project will take
6-9 months. A world-scale mining project may require more than
one year. Source: Bob Rappolt and Mike Gray
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Rules of Thumb - Accuracy
±15% accuracy of capital costs in a detailed feasibility study may
be obtained with 15% of the formal engineering completed; ±10%
accuracy with 50% completed and ±5% accuracy may be obtained
only after formal engineering is complete. Source: Frohling, Lewis
and others
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Study Accuracy
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Rules of Thumb – Production Rate
Production Rate
The production rate (scale of operations) proposed in a feasibility
study should be approximately equal to that given by applying
Taylor’s Law
Techno-Feasibility Studies & Project Planning – Vienna, October 7-11, 2013
Taylor’s Law (Taylor, H.K. Rates of Working of Mines - A Simple Rule of Thumb, IMM Transactions, Oct, 1986)
The optimum extraction rate = 5 × (expected reserves)3/4 / (days per year)
In which “Expected reserves” are generally interpreted to mean proven + probable reserves.
Example:
Facts: 1. Expected reserves = 3,500,000 short tons
2. Mine five days per week = 250 days/year
3. Mill seven days per week = 350 days/year
Solution: 1. Mining rate = 1,618 short tpd
2. Milling rate = 1,156 short tpd
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The EIS (Environmental Impact Study)
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The EIS
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The EIS
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Project Management
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Project Leadership - example
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Contingency
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Use of Monte Carlo simulation is today common practice.
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Change Management Procedure
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Risk Management
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Mining Risk
Techno-Feasibility Studies & Project Planning – Vienna, October 7-11, 2013
Corporate
Performance
Exploration
Performance
Development
Performance
Mining
Performance
Processing
Performance
Marketing
Performance
Location
Uncertainty
Mining
Complexity
Social &
Environmental
Uncertainty
Construction
Uncertainty
Mining
Uncertainty
Metallurgical
Uncertainty
Market &
Commodity
Pricing
Uncertainty
Financial &
Economic
Uncertainty
Geological
Uncertainty
Science &
Technology
Uncertainty
Mining is a risky business and each stage is impacted by uncertainties
Investor
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Political
Uncertainty
Political
Uncertainty
Investor
Uncertainty
Pervasive,
Largely
Uncontrollable
Risks
Poorly Defined
and somewhat
Controllable
Risks
Direct
Controllable
Risks
Global Financial &
Economic Risks
“Risk Categories”
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Conclusion
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Operational Timeline for Mine Life Cycle
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Reference
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IAEA Publication
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PMI – www.pmi.org
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NI 43-101 Standard
Techno-Feasibility Studies & Project Planning – Vienna, October 7-11, 2013
COMPANION POLICY 43-101CP
TO NATIONAL INSTRUMENT 43-101
STANDARDS OF DISCLOSURE FOR MINERAL
PROJECTS
TABLE OF CONTENTS
PART TITLE
PART 1 APPLICATION AND TERMINOLOGY
PART 2 DISCLOSURE
PART 3 AUTHOR OF THE TECHNICAL REPORT
PART 4 PREPARATION OF TECHNICAL REPORT
PART 5 USE OF INFORMATION
PART 6 PERSONAL INSPECTION
PART 7 REGULATORY REVIEW
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Questions?
Techno-Feasibility Studies & Project Planning – Vienna, October 7-11, 2013