Geology Resources of the Earth Assignment

Objectives -

• Conduct a simplified mine feasibility study.
• Learn the economic significance of producing one or two commodities from a single enterprise.
• Understand the broad economic aspects of extracting a metalliferous resource.

Assignment -

You are to provide a Feasibility report on the proposed Gopher Lake Mine, using the three commodity production scenarios given above. This Feasibility Report is worth 70% of the total lab mark.

Using the data provided in this handout your team of two will assesses the economic viability of the proposed mine for each scenario.

ALL initial exploration has been conducted and reported as G & G (geological & geophysical). Since this was part of the overall exploration cost it is not a factor in your calculations. It is given for your information.

You will prepare a PROFESSIONAL looking response consisting of a 1,000 word (max) feasibility summary with charts, graphs and        tables. Two web-based examples can be found at: http://www.mcewenmining.com/Operations/Gold-Bar-Development/Feasibility-Study/default.aspx and http://www.excelsiorgold.com.au/kalgoorlie-north-gold-project/pre-feasibility-study. NOTE that these are for guidance only: note that many of your parameters are also different.

Anyone handing in an Excel Spreadsheet with/ or as their answer will get a zero grade! However, you are expected to create relavant tables and charts, and you will need to create a spreadsheet to derive solutions.

The authorship and contribution of each Team Member MUST be clearly stated in the report.

Specific points to consider / answer:

Based upon your determined commodity values for gold and copper (e.g., Figs 2 & 3) and your own research, YOU must determine a reasonable commodity price for copper and gold and use those values in your estimations/calculations. Include a brief JUSTIFICATION for selecting the commodity values you use!

Your response should address and answer the following points for each scenario 

1. i. Recoverable tonnage and recoverable grade

ii. Total gross revenue AND annual gross revenue per year (at the smelter)

iii. Operating cost per tonne for: a) overburden removal, b) mining, and c) tailings maintenance

iv. Total annual operating costs, and total operating costs (i.e., duration of the mine).

v. Expected mine life

vi. Net revenue at the minesite (after all costs)

vii. Proportion of metal concentrate to waste rock (total), and total waste rock (tailings)

viii. What, if anything, restricts or caps the production of either commodity in this potential operation?

ix. Determine if the mine is profitable for each scenario and then COMPARE all three scenarios. Which is the optimum scenario and why?

x. What other factors, if any, could impact the profitability/viability of this mine?

2. For each scenario, if the commodity values were to change (e.g., ± 25%) would the mine remain profitable? This is known as 'sensitivity analysis'. Do it!

3. Within your report include a recommendation/overview aimed at a potential Mine Operator and Investors/ You will also include an Executive Summary which will include various economic aspects of the mine and consider the three scenarios in a brief 1 minute equivalent summary (i.e., 150 words or less). This paragraph is 52 words. From the introduction to this point is 1083 words.

4. Include in your report a simple cash-flow assessment (as a table and graph) that shows annual production, annual gross revenue, annual mine operating costs, capital depreciation, interest on capital, net before tax, tax due, net revenue/cash flow.

Attachment:- Assignment File.rar