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I guess in many ways most of us must be pleased with the CEY SP considering the gold dollar price has dropped and has been predicted I guess by some BB pundits to be in the 60/70's.
Has the market, started to really change sentiment on progress/hitting targets and cost savings.
Anyway, I am looking forward to 2023/24 for a significantly higher price please
In terms of cost savings the market has little to choose from - the gold industry as a whole facing the highest production costs ever
For instance in Newcrest's Q3 results:
Telfer $1,895 AISC
Lihir $1,436 AISC
Red Chris $1,766 AISC
if not for Newcrest's integrated copper production averaging out the group's costs these mines' would be screaming 'crisis'
Hi Don,
Held Newcrest through many ups and downs and came out in 2018.2019 above water.
The AISC figures currently are rather alarming and as you say copper has held them up although declining now from its peak. One aspect which I find of interest is their exploitation of block caving . which they claim is exclusive to them . Can you offer an insight on this.
Regards
Bob
Bob
Block caving is defintely not exclusive to Newcrest. It has been around for a long while and is in operation by several other companies. It is the mining method of "future choice", but how well it works is someting to be very wary of.
Typically, cave mining operational costs are a tenth the cost of conventional underground mining methods. Despite the low operational cost, cave mining is highly capital intensive. This is because a large underground infrastructure platform needs to be established before production can proceed. For example, Codelco, Chile’s state-owned miner, will be investing $5.6 billion to convert the century-old Chuquicamata open pit mine into an underground project (Casey, 2019).
How well the block caving can be implimented is alrgely a function fo the ground weakness and natural break. For instance in one of the mines I worked in, it was very difficult to stop the ground from caving as it was too broken! which meant we got a lot of overbreak. In another, the bolck would not cave to design, which mean large slabs of ore could be dangerously suspeneded in the roof, requiring a lot of attention and slowness and danger.
To balance large upfront capital expenditure, the mine must have a high rate of production and tonnage per drawpoint once the mine is in operation. The Chuquicamata mine in Chile, the Resolution Copper project in Arizona, and the Grasberg caving complex in Indonesia are some of the biggest cave mining projects, targeting a production of more than 100,000 tonnes of ore per day.
While caving methods can be used with any type of commodity, the key considerations are grade distribution, geological and geotechnical characteristic of the ore body. It is the primary underground mining method used for extracting large copper or gold porphyry deposits. Considered as dense, less than 2 per cent of nearly 2 billion metric tons of ore within the Resolution Copper project is believed to be copper, making it the fourth-largest undeveloped copper deposit in the world (Philips, 2016).
Smaller orebodies can still be economically mined, if they have sufficient height and metal content to justify the capital expenditure. Northparkes in Australia, Palabora in South Africa or New Afton in Canada are successful operations with a smaller footprint and daily production.
What is often not mentioned is that the fracturing in a lot of mines, is subvertical, meaning it is undersampled by vertical drilling. This means the real fracture pattern in a block that one wants to cave is not well known, and this is a major reason of FU's and failures.
Newcrest is mining a low grade inhomogenous orebody at Cadia. Their head grades are declining, their recoveries are declining, and the mine is getting deeper. Good luck with that
https://miningdataonline.com/property/185/Cadia-Valley-Operation.aspx
https://www.ausimm.com/bulletin/bulletin-articles/what-every-mining-professional-needs-to-know-about-block-caving--t
Hi goldgnome
Many thanks for your concise and insightful explanation . I visited a hard rock mine in Germany defunct zinc with 7 levels but bottom 3 flooded. It was explained that miners died due to inverted rock formation which dropped from the roof without warning. I may be wrong but does cave blocking avoid this but on a much larger scale. Keep posting these educational posts for those interested .
Regards
Bob
Bob
Block caving, in theory... everything caves very well according to plan. The plans are built arond rock properties, AND 3D ROCK FABRIC. Both of these are in fact poorly known in reality, which means that in reality the block caves do not go accoring to plan. When this happens one better have a very good recovery plan. You can imagine that the roof does not falling in as a single unit. But you get hangers...some are 50 to 100 meters above you...
Cave mining methods have become viable and preferred mass underground mining options where the objectives are low cost and high production rates. However, the cave mining industry has already entered into a less certain period or environment where some of the current cave mining options are already showing not to be fully suitable to achieving the envisaged low cost and high productivity objectives. This environment includes deeper and sometimes blind deposits (up to 1,400 m from surface), lower average grade deposits, harder and heterogeneous rock masses, higher stress and, in some cases, higher temperature environments. This is requiring design of greater caving block heights, demand for increased safety and productivity, and escalating mining costs (capital and operating). In addition, there is increasing shortage of technical skills, capital becoming more difficult to access, and communities desiring higher environmental standards. In this new cave mining environment, several hazards are identified that can have critical impact on safety, productivity and profitability. It is necessary, therefore, that these major hazards be acknowledged,and the likelihood of their occurrence be evaluated and minimised during the deposit investigation, mine design and planning, and operational stages of the caving process. These are not trivial issues and can have the most serious of consequences. They demand serious managerial and technical attention (Brown 2012).
... https://papers.acg.uwa.edu.au/p/1905_0.3_Flores-Gonzalez/
https://www.srk.com/en/publications/cave-mining-risks-not-necessarily-greater-but-definitely-different
Very interesting area, the future of mining large low grade underground depsoits...well the alternatives are not that great, or profitable.
good luck
the gnome
Thanks goldgnome, very grateful for the time you have spent in your professional explanation of this aspect of the mining industry. Very good to have your insight and input to this board. I am sure others here will feel likewise.
Regrds
Bob
Thanks Cowichan
Nice to see other costs and all affected.
Got to say, cany really see why gold is so cheap ounce when there is such scarcity and it takes lots of resources to mine. Another story and Basel 100!
Basel - another load of waffle that used up days of comments and airspace and did zero for SP movements.
All complete *******s motivated by self interest - back to boring - where the devil is Tibbs, I want someone to exchange barbs with!
As an aside & more on the CEY price my two bobs worth is hold & accumulate if you are underweight, at the end of calendar year 2023 feel free to remind me of this :)