Ranking Gold-Silver Projects

 

Ranking is a problem for gold mining companies exploring for or developing multiple gold-silver projects. Basically, ranking is necessary to prioritize limited time and budget the most attractive project. It is a problem based on the nature of complex gold-silver deposits. The grade of each precious metals and other elements may vary widely between deposits, metallurgical recovery and transportation to a smelter, to mention some few factors. Gold mines and recovery plants are not being operated in large numbers in all places because fewer professionals have been involved, the industry has a generation of sparse precious metals geologists, underground vein-mine engineers and metallurgists. Gold and silver prices and technical developments in the mining industry over the past 35 years have focused on development in several directions. These include various improvements related to heap leaching, larger open pit equipment, blasting agents, and SAG mills.

Many exploration departments of several gold mining companies have partially delineated gold and silver reserves sites. The manager must decide where to invest the available human and financial resources and which is the most attractive project. Normally, a truly intelligent decision cannot be taken until time and money have been spent to prepare a feasibility study. This involves a preliminary mine plan, basic metallurgical tests and mini closure studies. Each gold project has different mineralogical characteristics. Each will likely have one or more of the contained metals in higher, perhaps significantly higher, grade. At the same time, metal recovery and precious metal prices can be notable different. Location and easy access to the various sites is different, affecting the cost of shipping concentrates or a Dore bar to a smelter or refinery. At different plants, smelter schedules themselves can have variation in payment and deductions that will change the bottom line of the liquidation. The measured amount and potential quantity of gold ore as well as the spatial distribution of the orebodies can also be factors to consider.

All the variables noted previously make a ranking of the various projects under consideration difficult. The basic method or strategy to rank several gold-silver projects with no expenditure of funds and in a minimum time frame get an idea of the profitability of each project is to adopt a numerical value of each precious metal in the ore to give a total value per ton ore. Value = Assay x metal price x Factor. The factor is related to the recovery and any extras deduction, 80% and 70% for gold and silver, respectively. If an ore gives particularly good or poor recovery in the plant, or if transportation of the gold-silver concentrate is excessively high or low, the factor must be adjusted.

Many gold operations have a gravity circuit to recover free gold in the grinding circuit. This can be refined on-site and sold as Dore. Otherwise gold in a flotation concentrate tend to suffer varying amounts of deductions and are paid 78-92% range of the remaining content. Silver gravity circuits normally recover minor quantities of silver. Like gold, pay for silver in flotation concentrate varies with the same progression as with gold. Deducting may be in the range 0.4 to 5 oz/t, with the balance paid in the 70-95% range. In addition to the metal units deducted, there are penalties for the content of certain metals such as antimony, arsenic, mercury, among others. Excessive amounts of iron, alumina, moisture, and other deleterious components will be penalized. Elements and the amount of penalty will vary with smelters. The cost of shipping a concentrate to a smelter will vary with the remoteness of the gold recovery plant, the method of shipping and the prevailing or negotiated haulage rate. Next table shows an example of four gold-silver projects.