24-MMP-A4 Mine Valuation and Mineral Resource Estimation · May 2016
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
EGBC National Exam — Mining and Mineral Processing Engineering, 09-Mmp-A4 Mine Valuation and Mineral Resource Estimation, 2016-May. 3 hours duration; one handwritten 8.5×11 in reference sheet permitted (not an open-book exam); only approved Sharp or Casio calculators allowed. Question 1 is compulsory (40 marks, parts 1.1–1.6); candidates then select THREE of the six optional Questions 2–7 (20 marks each) to complete the paper.
Reference texts: Isaaks & Srivastava, An Introduction to Applied Geostatistics (variogram modelling, kriging estimators, volume–variance relations); Hustrulid, Kuchta & Martin, Open Pit Mine Planning and Design (mine valuation, NPV and cut-off grade methodology, mineable reserves); Gentry & O'Neil, Mine Investment Analysis (Canadian mining taxation, inflation and financing effects on DCF yield, smelter/refining contract terms, net smelter return); SME Mining Engineering Handbook, 3rd ed. (mineral exploration/evaluation stages, ore reserve classification, ore deposit models); CIM Best Practice Guidelines and NI 43-101 (Canadian Securities Administrators).
Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.
2.1.1 & 2.1.4 Simplified geology, formation and geological era. The Athabasca oil sands formed in the Early Cretaceous (Lower Cretaceous, Aptian–Albian, roughly 110–115 Ma), when a north-flowing river/estuarine system draining into the transgressing Boreal Sea deposited the McMurray Formation directly on an erosional unconformity cut into Devonian carbonate bedrock (itself Middle Devonian, ≈385 Ma – the unconformity therefore spans roughly 270 million years of missing record). Biodegraded, heavy hydrocarbons migrated updip from deeper Devonian/Paleozoic source rocks into these porous Cretaceous sands and were trapped beneath the overlying regional Clearwater Formation shale, which acts as an impermeable seal; near-surface biodegradation over geologic time converted the original oil to the current highly viscous bitumen.
2.1.2 Predominant economic oil-sand bands. Economic bitumen pay is concentrated in the McMurray Formation itself, subdivided informally into lower, middle and upper McMurray packages: the lower McMurray comprises braided/meandering fluvial channel sands directly on the unconformity (best reservoir quality, most laterally continuous pay); the middle McMurray records increasing estuarine influence with inclined heterolithic stratification (IHS) point-bar deposits (good but more heterogeneous pay, common source of mudstone "IHS" baffles); the upper McMurray and overlying Wabiskaw Member (base of the Clearwater Fm.) record the final marine transgression and carry thinner, more marginal-marine-influenced bitumen accumulations.
2.1.3 Typical bitumen grades. Economic ("pay") McMurray sand typically carries 8–12 wt% bitumen saturation, with the best lower-McMurray channel sand locally exceeding 12–14 wt%; below roughly 6–7 wt% the reservoir is generally considered sub-economic ("lean zone") for either mining or in-situ (SAGD) recovery.
2.1.5 Saline vs. fresh water in the fluvio-estuarine zone. Basal, most-marine-influenced parts of the McMurray section (near the unconformity, in the estuarine/lower reaches of the paleo-valley) retain saline, connate formation water reflecting the transgressing Boreal Sea; updip and stratigraphically higher, in the more purely fluvial channel facies, formation water grades progressively fresher, reflecting meteoric recharge along the fluvial system – both are shown schematically on the section above, with the saline zone toward the (more marine-influenced, generally north/east) estuarine end and fresher water toward the fluvial (south/west) end.
