The Anatomy of a Mine - Mining and the Environment: From Ore to Metal - page 187

accuracy for each objective are more stringent. The level of detail is typically also dictated
by whether the project is to be i nanced by the company or bank i nanced. Often the term
'bankable' is used to describe a feasibility study (bankable feasibility study or BFS). This
term simply dei nes that the level of detail of the study is sufi cient to secure i nancing,
provided that the results are positive. In a BFS, geological and mine engineering work has
been conducted in sufi cient detail to dei ne proven resources and reserves. Detailed test
work has been completed to develop all mining and processing parameters for pit slope
design, hydrology, geotechnical, l ow sheet development, equipment selection and sizing,
consumables and power consumption, material balance, general arrangement drawings,
production and development schedules, and capital and operating cost estimates. Capital
and operating cost estimates are derived from take-offs and vendor quotes. Economic
analysis with sensitivities is based on annual cash l ow calculations for the mine life.
Provided that the project is feasible, a proven and probable reserve statement can be made.
The feasibility study including the EIA documentation demonstrates the economic,
environmental, and technical viability of the proposed mine development. It is often also
a prerequisite of obtaining government approval for mining. The preparation of a BFS,
however, does not automatically lead to mine development. Farrell (1997) estimated that
only about one of ten mine proposals in Australia for which a feasibility study is prepared
will eventually progress to mining. This may be a premature observation. It may be that
most of these proposals will eventually become mining projects. In fact, the current boom
in most mineral commodities is leading to the development of many projects for which
previous feasibility studies were less than compelling.
In sum the feasibility study aims to determine and judge all aspects that are important
in assessing the worth of a potential mining project such as resource estimation, suitable
mining methods and benei ciation, mine waste management options, required mine infra-
structure, cost/benei t analyses, environmental and project risks, and i nancing.

The feasibility study including
the EIA documentation
demonstrates the economic,
environmental, and technical
viability of the proposed mine
development.

Resource Estimation
As discussed above, mining geologists differ between geological and mining resource esti-
mates. The geological resource estimate is based on modelling the size, shape, and grade
distribution of the ore deposit, and as such is based on the prediction of geometry and
continuity of ore body, distribution and variability of grades, and recoverability of metal
values based on bulk sampling and metallurgical testing. The mining resource estimate
predicts the part of the estimated geological resources that can be mined at a proi t. The
mining resource estimate is developed with an understanding of the most likely mining
method, and it considers mining factors such as the range of likely cutoff grades, selected
mining method and production rates, and characteristics of the ore deposit that may affect
the ability to mine and process the ore.

Mining Method
A preliminary screening of suitable mining methods provides estimates on mining
resources and production rates, and associated investment requirements. The simple aim
in selecting and implementing a particular mine plan is always to mine a mineral deposit so
that proi t is maximized given the unique characteristics of the deposit and its location, cur-
rent market prices for the mined mineral, and the limits imposed by safety, economy, and
environment. The EIA practitioner needs to be aware that ore production rates during the
mine operation may change for two main reasons ( Figure 4.10 ). Firstly, an increase in min-
eral prices may lead to an increase in ore production in existing mines rather than in the
opening of new mines: less money is involved in expanding than opening a mine; project
risks in an operating mine are well understood; and increases in production rates are

The EIA practitioner needs to be
aware that ore production rates
during the mine operation may
change.