Transcription
[Music] Happy folks, I'm Keith Bowen, and this is Hard Rock University. And tonight, I've got something that I think you're really going to enjoy. I have had a couple friends of mine help me on this, uh, Yoim and, uh, Deacon. They know a whole lot more about hurting electrons than I do. If you want a mountain turn into a hole, I can do it. If you want to move some electrons around, I'm not the best guy for the job.
So, anyhow, what this tool is, is it's what we call our mining project economics estimator. You have to fill in about 20 different variables, and then it does the calculations and gives you an idea whether that theoretical ore body and milling cycle are feasible. Does it look profitable or not? Um, the thing is, it's very, very simple, and as such, it doesn't figure out what milling cycle or what might or this that or the other. You simply have to tell it things like mining rate, how fast can you break and move rock, uh, what's your mining cost per day, things like that, and it will do the calculations for you.
However, big warning here, uh, this is a real simple tool, and it is not adequate for making big judgments on all by itself. This is a preliminary tool to help guide you in the right direction before you spend a lot of money or do anything, uh, that you don't want to turn out badly. You need to double check everything and go into it in a lot more detail. It uses numbers that are just way too broad, but it'll give you an idea what you need to look for, whether you've got something that might make it work, might make you a profit or not.
You start from the Hard Rock U homepage, click on the economics estimator. This gets you to the disclaimer page, or basically we tell you you were told not to use this for anything important. If you do, it's your fault. Click I agree. This takes you to the estimator. Inputs are on the left side, outputs are on the right. In this case, I've already started filling it in. The first input is ore body. You can select load, load, or placer. Load is at 2.25 tons per cubic yard, placer at 1.75. If yours is significantly different than this, it will introduce an error. Set the gold price at $1,000 an ounce, ore body 3 ft wide, 30 ft long, 30 ft deep with an ore grade of 1 oz per ton. As you can see on the right side, some of the fields have started to fill in, but not many. This program calculates everything, every keystroke as you change it, it automatically changes.
There's a lot of stuff not in, and let's go down to mining here. I've started to fill out the mining. We've got one ton an hour mining rate, 10 hours a day, 10 days a month, and a mining cost of about $500 a day. I'm assuming two guys with a jackhammer can probably accomplish this. Now, watch what happens when I get to the next line, the parts ore to parts waste. You can never mine just ore, and you wouldn't want to mine just waste. There's always some ratio you have to figure out. In this case, I'm figuring a 6 foot wide tunnel with a three foot wide vein will be about one part ore to one part waste. You can see that an error message has popped up. This is because other calculations are interrelated, and if you don't have the mining rate the same, well, the ore production the same as the milling rate, things get a little wacky. So, since we have no milling information in yet, it's not going to, uh, be balanced.
The last line is a percentage of ore in the ground recoverable. If you were to mine all the ore out of most ore bodies, the ceiling would fall on your head. Therefore, you have to leave some in for ground support. Depending upon how much ground support you're willing to pay for, that ratio can change a lot. I'm assuming that under normal conditions, you can get about 50% without too much ground support. Now, you'll notice a lot more fields are starting to fill in. However, total profits is way negative because we still have no milling. Let's fill that out now.
Okay, okay, I've started filling out the milling rates, and you'll see even though it's the same as the mining rate, we're getting a milling rate is higher than ore production error message. If you look at ore produced versus ore processed in the per month column, you can also see the mismatch. This is caused by the fact that your ore to waste ratio at 1:1 means that one ton mined means only a half of ton ore produced. The mining rate is all material, ore and waste combined. You have to keep that in mind.
Now, the easiest way to correct a mismatch like this is to change a rate or the hours worked. And what I'm going to do is simply change the days per month on the mill to 5 days per month. As you can see now, the mismatch has been fixed. The indirect costs per month are things like rentals, things like that, things that are done on the month, not per day, per hour, whatever. Your claim rental, equipment rental, things like that, you might want to put in this. I'm going to change that to $1,000 per month.
Now, the percent of total gold recoverable in mill has to do with how much you actually get out. No mill is 100% effective. A good mill is at least 75% effective, and preferably 85 or 90% plus. I'm going to put in 85 just to make this reasonable. So now we have all the inputs. Let's see what the outputs are. We've got 225 tons in the ground, of which only half is extractable. That makes sense. The total amount of gold in value that can bring out of the ground is $112,500. The total value per ton at $1,000 and the profit per ton $6.80 indicates you're getting a really good profit margin, so that's good. For every ton you mill, you process, you're getting over half the gold is pure profit. The total profits on the other hand are only $7,655. So, if your capital cost to get started are very high, you're going to burn up all that gold before you even start digging in.
Any of the interesting thing is the mine life of only 2.25 months. Now, that's a pretty short mine life, and if you had this amount of gold in the rock, you'd want to look for some more rock. Let's see what happens if we change the size of the ore body without changing anything else. Now I've changed the length and the depth to 300 ft instead of 30. This took our tons up to 22,500 and our total profits to $7.65 million. That's looking pretty good. But oops, forgot something. How are we going to mine this? 225 months, that's 20 years. You could die, regulations can change, governments can be overthrown, meteorites can destroy civilization in that time. So, let's speed things up a bit. I'm going to change the mining rate and the milling rate to 10 tons an hour from one, and we'll see how that works.
Now we're cooking. 22 and a half months, two years, that's a reasonable mine life. You'll also notice the profits have gone up to over $9 million. But wait a minute, I forgot something else. We're not going to have the same cost per day if we're going to be mining 10 times as much and processing 10 times as much. So, let me change the cost per day from $500 to $1,500 to include a little mechanization and increased mill size. Not a big issue, but it will definitely make a difference. Okay, you can see our profits drop just a little bit to just barely over $9 million. But with a mine life of 2 years and $9 million bucks, hey, I'll be willing to make $4.5 million a year. That's how you work this program. You play the what-if games and figure out what makes the most sense for the ore body you've got.
So, there we have it. It's a very, very nice tool to play what-if games. Um, you start with basically what you have or what you know you can do in terms of mining and milling and stuff like that. Uh, and to a certain extent, if you don't know, you have to figure that out. Sometimes you just got to plug in industry standard numbers and go from there. Like, unless you're an experienced underground miner, it's going to be awful hard for you to tell what your extraction ratio is going to be, how much percentage of that ore can you take out of there safely with how much ground support. Um, but you can get a rough estimate. In most rocks, you can take out about 50% without very much ground support. Doesn't apply to everything, so do your homework.
Okay, this does not tell you how to do stuff, just says what if. But you can play interesting what-if games. What if I have this size vein, but the ore grade's not enough? How high in ore grade do I have to take it? These sorts of things. So, the other thing I want to bring up is this is the beta version. This is the first one we've got on the internet. It may have some glitches in it that we haven't found. We've tried to do a thorough job of testing, but there's only so much you can do. It's all hand-coded. Misplacing a comma can cause a problem. So, if any of you folks see what appears to be a glitch, something that's not working right, please email me and let me know. I'll check it out, and if in fact it is a glitch, we'll fix it. If it's just confusion, if enough people have the same kind of confusion, I can add information, I can maybe change the way it's formatted or add notes or something like that so that people don't get confused.
So, that's it. This is a, this is a tool for everybody. Just go to our website, you can use it unlimited times, no charge. Uh, it's just to help people out and clarify certain things for some people. Uh, one of the big, big problems is people understanding what they're getting into, what the costs are going to be, whether or not it's going to be a benefit. This is to help clarify those issues and help guide them a little bit. So, happy prospecting and keep it safe out there.
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