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705

KINROSS MINE PLANNING BEST PRACTICE

R. Henderson and C. Turek

Kinross Gold Corporation


25 York St, 17th Floor
Toronto, ON, Canada M5J 2V5

(rob.henderson@kinross.com)
(chris.turek@kinross.com)

ABSTRACT

Mine planning is the foundation of value for a mining company. Good mine planning requires
solid understanding of the ore body, rigorous standards and processes, robust and useful information
technology and skilled people. Life of mine planning is key to identifying strategic direction for any mine
and short range mine planning is key to delivering forecast and budget expectations. Mine planning at
Kinross has been identified as a critical success factor and initiatives are being prepared to improve the
quality of our plans and to build bench strength in our teams. The Kinross Way for Mine Planning
(KWMP) has been developed and implemented to establish the standards to ensure a strong business
foundation. This paper briefly describes the process used to develop the KWMP and presents a selection
of mine planning best practice initiatives at Kinross mines.

World Gold 2011


Proceedings of the
50th Annual Conference of Metallurgists of CIM
Montreal, QC, Canada
Edited by G. Deschênes, R. Dimitrakopoulos, J. Bouchard
706 WORLD GOLD 2011

INTRODUCTION

The Kinross Way is a strategic blueprint for


the company guided by four values: Putting People
First, Outstanding Corporate Citizenship, High
Performance Culture and Rigorous Financial
Discipline. In support of this strategic blueprint, The Mine
Kinross Way for Mine Planning (KWMP) has been Planning:
developed and implemented to establish mine The
Aligned
planning standards and processes. Figure 1 presents with our Foundation
the major components of the KWMP and this paper partners of Kinross Value
presents a selection of mine planning best practice
initiatives at Kinross mines. The five principles
providing the mine planning foundation of value are:
putting safety first, world class quality and accuracy,
executable and deliverable, aligned with strategy and
aligned with partners. These principles are detailed
next.
Figure 1 - The Kinross way for mine planning

PUTTING SAFETY FIRST

Safety has become the cornerstone of our industry, and it is our obligation to provide a safe
working environment for all of our employees. The operational safety culture and environment provided at
our mines is a reflection of the work done at the original design of the operation. Life of mine designs for
open pit or underground mines aim to provide an optimal excavation configuration in the context of
prioritizing safety, financial return and ore recovery. Safety has always been an integral part of the design
process, with aspects as geotechnical design criteria, regulations for ramp widths, berm heights, ventilation,
access and egress, adequate distribution of mine rescue stations and the list goes on. Failure to meet the
design criteria through the execution will require modifications to the design, which in turn will drive up
costs and impact the optimal design, potentially putting our employees at risk. The integration of safety
into mine planning has developed beyond the initial design stage and is now integral part of the planning
process which by itself is an execution of the design process.

Geotechnical design criteria are typically the primary drivers for the size and shape of all safe
excavations. Kinross requires all its operations to develop, maintain and implement an effective Ground
Control Management Plan (GCMP). A GCMP is a comprehensive and coherent document covering all
aspects of geotechnical practices relevant to a mining operation or project. It must be developed in
conformation to local applicable regulations and in alignment with Kinross safety and health standards by
application of sound geotechnical engineering principles and best practices. A GCMP is a component of
the mine risk management system and it should be updated or revised when there are major changes to
existing practices or in any case annually. Geotechnical performance reviews or auditing will be conducted
by internal and external specialists to identify areas for improvement or best practices for sharing with
other operations. It is imperative that a rigorous mine planning review process is implemented to ensure
the design criteria are met. This review is generally at the regional or corporate level to avoid any site bias
and introduces a level of independence.

Proper equipment selection is also an important safety consideration in the design phase. In open
pits, ramp width is generally a function of truck width, while drill selection is a function of planned
productivity as well as geotechnical design utilizing buffer blasting and preshear requirements. Support
equipment such as graders, rubber tired dozers and water trucks all play a key role in ensuring safe
operations and must be considered into the design phase. Calculating the needs of this equipment is often
underestimated or omitted from the planning process. This equipment is required to maintain safe
WORLD GOLD 2011 707

operating conditions in varying climactic environments, and must be included in the initial planning
process continually re-assed throughout the operating life.

WORLD CLASS QUALITY AND ACCURACY

“World Class” is an expression or adjective commonly used within the mining industry to define
the best quality of our business processes and physical operations. Management often uses the term to
describe how they want to see the Company when compared to their peers within the industry. A simple
statement, however a monumental task! The first challenge is clearly defining what “World Class” is?
Secondly, once defined, how do you get there? Accuracy on the other hand is much easier to define, and if
you are “World Class” then accuracy becomes a condition of being “World Class”. The feasibility and
success of any mine plan is contingent upon the accuracy of input assumptions. The level of granularity
and accuracy should increase as mine plans progress from strategic to tactical to operational. See Figure 2
below.

Concepts

Strategy

Long Term Plan

Tactical
Implementation

Operational
Execution

Strategic Planning Long Term Planning Short Term Planning Operations

Figure 2 – Mine planning phases

Strategic mine planning sets the overall business objectives for the mine, such as earnings, cash
flow and return on investment. Strategic planning considers all potentially feasible alternatives, including
those that may not currently be employed. The strategic planning horizon is long, typically exceeding the
planned life of the mineral reserve estimate. Tactical mine plans focus on the detail necessary to implement
a strategic plan, with particular focus on costs and sequencing of activities. Compared to the strategic mine
plan, the tactical mine plan has a shorter planning horizon (3 months to 5 years) and it has a greater amount
of detail, including bottom up models to estimate operating costs. Operational plans focus on managing
short term activities and unforeseen disturbances to ensure the tactical plan is achieved. The monthly mine
plan focuses on details of implementing the monthly budget. The weekly mine plan focuses on achieving
the monthly plan objectives, taking into account any variation between month-to-date planned and actual
performance. The daily mine plan is a highly detailed schedule of activities that operations personnel must
carry out to ensure the weekly plan targets are achieved. Input assumptions to the tactical plans must be
supplied by all disciplines in the organization, including geology, maintenance, finance, supply chain,
environmental, human resources and corporate guidance. Once the ore has been mined and processed,
actual performance must be measured and compared against the tactical plan. Following review and
reconciliation, the objectives and input assumptions for subsequent mine plans should be updated in order
to improve accuracy.
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The Kinross Way for Mine Planning was initiated with the understanding that mine planning was
a core activity, improvement was needed and that accuracy was necessary to achieve world class status.
Recognizing the challenges and acceptance of Corporate Initiatives that are often seen as “make work
projects”, Kinross embarked on developing a process that would require the participation of all of our
operations, regional offices, projects, and an independent global mine planning partner. This group
became known as the Mining Advisory Team or MiAT for short.

The first task was to audit and understand the baseline from which an improved process would be
developed. A primary objective of the diagnostic was not only to understand where shortcomings existed,
it was to identify where processes were working well, identify these processes and develop them as
standards to be used going forward. In sharing the knowledge, and working with our peers within the
Company, our objective of building a bridge to becoming one organization was under construction. A
three day audit was subsequently completed at each operating site, and regional supporting departments
over a two month period. Upon completion of the audit and prior to leaving site, a close out meeting was
held where the results were openly discussed. A mine planning scorecard and final report was issued
within two weeks. The final step in the process involved developing an action plan, to address the
shortcomings identified in the audit. In conjunction with the action plan, several conference calls were
conducted with site representatives to share best practices indentified in the process. An example of a
Mine Planning Scorecard is presented below showing a simple three point scale with a rating of 3- meets
requirements, 2- needs improvement, 1- very little awareness, and 0- required but not performed.

Organizational Structure and Skills,


and Workplace Culture and Practices
5.1.1 Organizational Roles 1.6
5.1.2 Training and Skills 1.4
5.1.3 Professional Development 0.8
5.2.1 Quality of Work Life 3.3
5.2.2 Staff Involvement/Teamwork 1.0
5.2.3 Communication/Information Sharing 1.0
5.2.4 Rewards System and Recognition Program 2.3

Strategic Planning Business Planning Operational Mine Planning Operational Performance Reporting
2.1.1 Strategic Planning Process 0.8 2.2.1 Business Planning Process 2.3 3.1.1 Mine Planning and Scheduling Process 2.3 and Reconciliation
2.1.2 The Strategic Plan 2.4 2.2.2 Business/Long-Term (LT) Plan 1.0 3.1.2 Mine Planning and Scheduling Models 2.2 Operational Performance Reporting
2.1.3 Quality Assurance and Quality Control 2.5 2.2.3 Budget/Medium-Term (MT) Plan 2.2 3.1.3 Operating Plan Documents 1.3 4.1.1 Structure and Process 1.7
2.1.4 Communications 2.0 2.2.4 Quality Assurance and Quality Control 2.0 3.1.4 Operating Plan Communication 2.4 4.1.2 Planning and Scheduling 1.0
2.1.5 Performance Measurement 3.3 2.2.5 Communications 3.3 3.1.5 Shift Handover 2.5 4.1.3 Production 1.3
2.2.6 Performance Measurement 0.0 3.1.6 Execution 3.3 4.1.4 Maintenance 1.1
3.2.1 Change Management Procedure 0.0 4.1.5 Costs 2.3
Reconciliation
4.2.1 Structure and Process 0.8
4.2.2 Planning and Scheduling 0.8
4.2.3 Production 1.9
4.2.4 Maintenance 2.0
Continuous Improvement
4.3.1 Structure and Process 0.0

Figure 3 – Mine planning scorecard

In evaluating the collective audits, three major themes became apparent. Firstly, we recognized a
primary root cause of the poor scores was a result of insufficient manpower on site to meet the demands of
an operating mine, compounded by the relatively low experience base of many of our engineers and
responsibilities we had placed on these individuals.

A key component of the audits involved benchmarking staffing levels against operations of
similar size and geographic location. In most cases staffing levels were at or below the comparison data
sets. The shortfall was most critical at mines with rotational work schedules, leaving some sites without
adequate engineering support for as long as three days. In many cases as well, unfilled vacant technical
positions compounded the situation. The Company has recognized the need to increase staffing levels and
the experience base of or workforce and has embarked on a program to increase technical staffing
WORLD GOLD 2011 709

worldwide by more than one hundred positions. This increase manpower will allow for adequate coverage,
allow for attrition, and build a work force that will prepare the Company for our future growth.

The second major theme we identified was the varied understanding of time frames and accuracy
to define short range mine plans, mid range mine plans and long range mine plans, and the components of
each plan. Although most long range plans were defined as the Life of Mine, short range and mid range
plans were often a single plan, and often were not subsets of a larger plan. Collectively MiAT introduced a
standard set of time frames for each level of mine plans, with a key component that each plan is a subset of
the other.

The last major theme identified the financial modeling of the mine plans to develop operating
costs and budgets. The accuracy of models varied from site to site. These models were in all cases a
complex series of spreadsheets, built by individuals who no longer worked for the Company, were
inflexible, and from a version control viewpoint, very difficult to manage and impossible to audit. The
methodology used to develop operating costs was often written with coded values, making changes
difficult if not impossible.

In recognizing the need for a standard costing model, the Company adopted the use of Xeras®, an
activity-based cost modeling tool developed by Runge Software®. The solution ensures that all sites are
developing the costs from first principals by inputting key operating metrics, tied to a mine tonnage
schedule. A key component of the model is that the underlying structure of the model cannot be
overwritten; hence ensuring that all sites are developing costs in a consistent manner. Understanding that
there are site specific variances, it ensures that the process and basis for cost modeling is consistent
throughout the Company. The database structure ensures simple auditing and version control management.
Standard unit cost inputs such as fuel price, reagents, tires etc can be flexed to allow for quick, easy and
auditable financial evaluation of scenarios.

The Xeras model structure for each mine was customized by site engineers to ensure that the
appropriate cost driving activities were inputs for cost estimating. As an example, operating truck hours per
year are required for calculating operating costs, fuel consumption, operating labour, maintenance costs
and capital replacement. Ensuring the same base data is required, the process ensures all sites are being
compared on a level playing, but also ensures the planning process is providing the correct information for
the financial evaluation.

EXECUTABLE AND DELIVERABLE

A mine plan is no different from any other plan in that it is a road map to define and communicate
goals such as production volume, cost and revenue for a defined period of time. It is essential that the plan
mirrors reality as close as possible so that expectations can be delivered. The mine plan must be safe,
executable and deliverable. If it is not, then the plan needs to be adjusted and reconciliation provides a
mechanism to assist in the adjustment. Reconciliation is essentially the process of identifying, analysing
and managing variance between planned and actual results in such a way that it highlights opportunities.
These opportunities commonly include: methods to create better estimates; improved designs; tighter and
more accurate plans and schedules; improved mining techniques to minimise ore loss and dilution; and
identifying ways to increase metal recoveries during the extraction processes (Fouet et al [1]). Figure 4
presents some of the reconciliation KPIs reported by major mining companies.

Reconciliation is important because mines are designed and planned based on estimated values. If
predictions are difficult, then typically, reconciliation will be difficult. Complicating factors include the
presence of stockpiles, poor data from truck counts, dispatch etc. and inventory build-up in process plants
such as heap leaches and mills. Understanding the causes behind reported reconciliation deviations is vital
and it requires managerial intervention to take corrective action. Reconciliation has to be a simple and
useful tool and not just a governance reporting requirement. For this reason Kinross has elected to keep
reconciliation reporting simple but visible and KPIs are communicated up to senior management.
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Figure 4 - Reconciliation across the mining value chain (Morley [2])

Kinross uses four of the ratios presented in Figure 4. Mine plan to actual mined, resource model
to grade control, grade control to plant production and resource model to commodity produced. The first
KPI is essentially a temporal reconciliation: did we mine the blocks of ore in the sequence we planned?
The other three KPIs are more spatial in nature: was the actual grade and tonnage there as predicted? The
mine planning effectiveness KPI addresses the extent of adherence to a plan over monthly, quarterly and
annual time periods. M1 is the ratio of tonnes mined to tonnes planned i.e the productivity of the
operation. M2 is the ratio of tonnes mined within plan to tonnes mined, i.e how well did we stick to the
plan. The product of M1 and M2 provides a measure of the effectiveness of the mine plan. The value of
M3 cannot exceed 100% by definition and monthly values can be as low as 0-30% depending on the
magnitude of the adverse changes experienced over the time period. Figure 5 presents some typical
reconciliation data.
 

M1 = 3.243/4.73 = 68%

M2 = 2.63/3.243 = 81%

M3 = 0.68 x 0.81 = 55%

Figure 5 – “M” Reconciliation performance indicators


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Performance Indicators

Project Mine/Model Mill/Mine Mill/Model

Performance F1 Month YTD F2 Month YTD F3 Month YTD


Tonnage of "A" Ore b/a 103% 115% d/c 106% 103% F1 x F2 110% 118%
Au Grade of "A" Ore b/a 96% 99% d/c 113% 106% F1 x F2 108% 104%
Au Oz of "A" Ore b/a 99% 114% d/c 119% 108% F1 x F2 119% 123%

Stockpile "A" as % of
Production 27% 4%

Figure 6 – “F” Reconciliation performance indicators

For spatial or geological reconciliation, F1 is the ratio of short-range grade control or blast-hole
depletions to long-range model depletions, F2 is the ratio of mill production to short range depletions and
F3 is a product of F1 and F2. Figure 6 presents typical data from an open pit mine.   Understanding and
interpretation of the monthly reconciliation performance indicators is essential. From figure 6 we can
deduce that all appears well, however the long range model appears to be slightly under predicting the
tonnage of ore and the pit can temporarily expect more “A” ore than planned. Ideally, all the KPIs should
be a value of 1.0 over a year, however, for gold mines, the data can be volatile and monthly swings of up to
50 percent can be seen. If FI is consistently biased either up or down this indicates an error in the long
range model that requires a correction to the model, typically done at the year-end resource update. If
monthly F2 (tonnes) is higher than 1.0 and F2 (grade) is less than 1.0, this is a sure sign that overdigging is
occurring in the pit. If F2 (tonnes) is consistently less than 1.0, there is a good probability that the pit’s
accounting system is failing. If F2 (tonnes) and F2 (grade) are both less than 1.0, or both greater than 1.0,
there is a probable sampling problem in the mine or the mill. Very often short-term remedies are taken to
solve problems, such as mining today from a convenient high-grade area scheduled to be mined in the
future (Harry Parker [3]).

ALIGNED WITH KINROSS STRATEGY

Corporate strategy does affect mine planning decisions and the relationship between the two is
centered around selection of the cut off grade. High than optimal cut off grades may increase short-term
profitability and shorten the pay-back period and lower than optimal cut off grades may increase project
life and maximize the extraction of the mineral resource.

The “mine” or “internal” cut off grade is used to answer the question of should a block of material
remain in the ground or should it be mined and processed. The marginal cut off grade formula (Rendu [4])
is:

Xc = (Mo+ Po + Oo) / ((r * (V-R))

Where: Xc = marginal cutoff grade, r = process recovery, V = price of product, R = refining costs, Mo =
mining cost per tonne mined, Po = processing cost tonne per processed, Oo = overhead cost per tonne
processed.

The “mill” or “external” cutoff grade is used to answer the question of if a block of material has to
be mined, should it be processed? In this case, the marginal cut off grade formula is:

Xc = (Po + Oo) / ((r * (V-R))


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However, as we all know, the optimal cutoff grade in gold mining is usually higher than the
marginal cut off grade. Most gold mines require significant sustaining capital expenditure that is
traditionally is not included in marginal cost calculations. Also, because most gold mines are throughput
constrained, the opportunity cost should also be included in cut off grade analyses. Opportunity cost
captures the time value of money delayed by postponing higher grade ore. If we choose to add one tonne of
material to the process not previously planned to be mined, it will displace one of planned tonne of ore by
time t. The delay of adding one unit of ore will increase the time to mine the deposit and decrease the NPV
of future cash flows, discounted at a rate of i%. Therefore the opportunity cost, defined as t * i * NPV,
needs to be added to the numerator in the cutoff grade equation. The mathematical result is that the
optimal cutoff grade starts off high and then declines over time. Opportunity cost is a relatively complex
concept and is typically not applied in tactical and operating mine decision making.

The denominator in the cutoff grade equation includes metal price and this is a significant factor
affecting strategy. A high metal price will result in a low cutoff grade and vice versa. The gold mining
industry has enjoyed a ten-year upward trend in metal prices however no-one has a crystal ball to predict
future prices and average consensus estimates are always wrong. Most mining companies are conservative
and use reserve metal prices that are below spot prices. Figures 7 and 8 show the Kinross long term
planning gold prices compared to spot and consensus estimates.

Kinross Reserve Price History Gold Spot Price vs Analyst Consensus Estimates

1600
1600 1600

1500

1400
1400 1400

1300 Consensus July  2010


Resource Gold Price
1200
1200
1200 Reserve Gold Price
1100 Spot Gold Price
Gold Price, US$/oz

July  2009
1000
1000
Gold Price US$/oz

1000

900
800
800 Oct 2007
700 600
600

500 400

400

300 200

200
0
100
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014
0
2004

2005

2006

2007

2008

2009

2010

2011

2012

2004 2005 2006 2007 2008 2009 2010 2011

Figure 7 - Kinross reserve price history Figure 8 - Gold spot price versus consensus estimates

In practice, the optimal cut off grade strategy is not determined via a simple equation. The optimal
cutoff grade is typically defined at feasibility stage and is iteratively determined by varying mining rates
and cutoff grade scenarios and conducting multiple discounted cash flow analyses on numerous mine plans
to determine the maximum project NPV. The solution usually includes a low grade stockpile in order to
advance higher grade ore to the mill. The robustness of the selected cut off grade strategy is then tested by
evaluating the effect of metal price and operating cost.

Post feasibility and once the mine is in operation, conditions typically change: exploration drilling
will add additional ore, metal prices will change and operating costs will go up. Consequently, operating
cut off grade has to change to meet corporate strategy. For mature operating mines, Kinross bases mine
planning decisions on a marginal cut off grade calculation (including sustaining capital), using corporate
metal price guidance that is below spot price. This simplistic approach is effective and well illustrated in
figure 9 (Brian Hall [5]).
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Figure 9 - Risks and rewards of incorrect price predictions and suboptimal cutoffs

It can be seen that a suboptimal breakeven or marginal cutoff grade using a low metal price will
capture most of the upside gains realized from a rise in metal prices, compared to the significant downside
loss experienced when using a higher price cutoff in a low metal price environment. This is typical of
asymmetric risk experienced in the mining industry and drives behavior towards conservative planning. So
in order to minimize negative surprises, plan with a higher cutoff grade.

ALIGNED WITH PARTNERS

Mine planning is not an exercise done in isolation by mine engineers huddled over computer
screens. There are many stakeholders in a mine plan and extensive consultation is necessary to ensure that
stakeholder objectives are known and addressed, the plans are properly communicated and that the
stakeholders are committed to the plan. This concept applies for both short range mine planning and
longer range life of mine planning. Table 1 presents the typical stakeholders in a short term mine plan.
Life of mine planning or strategic business planning requires a more extensive list of stakeholders
including:

• Corporate Responsibility Social licence to operate in our community


• Exploration Future ore bodies requiring more definition
• Finance Capital efficiency and project evaluation
• Treasury Metal price forecasts and currency rates
• Human Resources Personnel needs and training requirements
• Supply Chain Commodity consumptions and prices
• Taxation Tax planning and royalty issues
• Environment Closure planning and asset retirement obligations

CONCLUSIONS

Mine planning is the foundation of value for a mining company. Good mine planning requires
solid understanding of the ore body, rigorous standards and processes, robust and useful information
technology and skilled people. In developing best practice guidelines, Kinross has focused on five
critical elements of mine planning: putting safety first, world class quality and accuracy, executable and
714 WORLD GOLD 2011

deliverable, aligned with strategy and aligned with partners. The mine plan must be safe, executable and
deliverable. If it is not, then the plan needs to be adjusted and reconciliation provides a mechanism to
assist in the adjustment. Reconciliation should not be overly complex and must be a useful tool to
identify opportunities. Kinross mine planning KPIs are simple but visible.

Corporate strategy does affect mine planning decisions and the relationship between the two is
centered around the selection of the cut off grade. High than optimal cut off grades may increase short-
term profitability and shorten the pay-back period and lower than optimal cut off grades may increase
project life and maximize the extraction of the mineral resource. To maximize net present value, optimal
cut off grades should be higher than the marginal cutoff grades. Typically, tactical and operational cut off
grades are estimated as a marginal cut off grade calculation (including sustaining capital), using corporate
metal price guidance that is below spot price.

Table 1 - Short term mine plan stakeholders

Who are the


What do they need from a weekly mine plan?
Stakeholders?

For all (general Review of previous week Actual vs. Plan


requirements) Presentation of plan for week to come
Material-flow-driven and Equipment-driven (Good plans have both.)
Operations Safety and training needs.
Priorities of personnel, areas or headings
Alternatives and contingencies
Mine Manager Ounces to be produced
Risks and opportunities
How we’re doing vs. budget and forecast for the month
Strategic changes we need to make
Drill and Blast Equipment locations, performance and priorities
Blast schedule
Drilled and broken inventory
Sequence in drilling (i.e. synching with grade control)
Geo-tech Risks and hazards (e.g. any movement, etc.) and limitations
Blast locations (to understand possible blast damage): Some blasts are limited
Blast activity: Sometimes geo-tech will want to inspect pre-splitting
Heading dimensions and ground support types (U/G specific)

Geology Provide: Grade control plan for the week


Reconciliation mine vs. model (F2 vs F1)
Maintenance Whether maintenance plans have been considered
Finalize hand-over times and logistics
Flexibility (e.g. for opportunistic maintenance, contingencies, etc.)
Site Management (GM, Ounces expected to be delivered
Ops Manager) Performance KPIs and look-ahead
Mill Manager Tonnes and grade (input and output day by day, highly interactive)
Geo-met characteristics of the ore - recovery, hardness etc.
Heap Leach / Ore When cells will be available for piping
processing Cell loading design and plan
Engineering (Medium- Reconciliation vs. medium-range plan (should be checked every two weeks)
range planner) Plans to address any gaps
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Table 1 - Short term mine plan stakeholders

Who are the


What do they need from a weekly mine plan?
Stakeholders?

Infrastructure (e.g. What I need to be aware of: Infrastructure, special projects, development, etc.
Electrical, Ventilation) By when things need to be moved
De-watering plans
Community When we’re blasting, how far away we’ll be
Routes that may cause dust
Survey Where and when planning to undertake mining activities
Environmental groups NAG and PAG destinations
Water management
Stripping
Contractors Tasks, timing, and expected performance
Dispatch KPIs (tonnage and performance) for the week for monitoring

The feasibility and success of any mine plan is contingent upon the accuracy of input assumptions
and these assumptions must be supplied by all disciplines in the organization. For economic modeling, the
use of spreadsheets is discouraged and the use of activity-based cost modeling software provides a solid
and auditable platform. Mine planning is not an exercise done in isolation by mine engineers huddled over
computer screens. There are many stakeholders in a mine plan and extensive consultation is necessary to
ensure that stakeholder objectives are known and addressed, the plans are properly communicated and that
the stakeholders are committed to the plan.

REFERENCES

1. T. Fouet, R. Riske, C. Morley, A. Cook, D. Conti and J. Centofanti, 2009. “Standardising the
Reconciliation Factors Required in Governance Reporting”: Seventh International Mining
Geology Conference Perth, WA, 17 - 19 August 2009

2. C. Morley, 2008. “Reconciliation white paper for Boddington Gold Mine”, unpublished paper
prepared for Newmont Mining Limited by Snowden, Perth.

3. H. Parker, 2002. ”Resource and Reserve Reconciliation Procedures (open pit mine)” Unpublished
internal MRDI memo.

4. J-M. Rendu. 2008. “An Introduction to Cut-Off Grade Estimation”. Society for Mining,
Metallurgy and Exploration Inc. (SME). Published 2008.

5. B.Hall, 2003. “How Mining Companies Improve Share Price by Destroying Shareholder Value Or
How the Junior Geologist and Engineer Determine the CEO’s Bonus”, Canadian Institute of
Mining and Metallurgy (CIM) Conference and Exhibition, Montreal 2003.

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