24-MMP-A4 Mine Valuation and Mineral Resource Estimation · December 2018
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, 2018-Dec. 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 1.1–1.8); candidates then select THREE of the five optional Questions 2–6 (20 marks each) to complete the paper.
Reference texts: Isaaks & Srivastava, An Introduction to Applied Geostatistics (variogram modelling, kriging, anisotropy); Hustrulid, Kuchta & Martin, Open Pit Mine Planning and Design (mine valuation, NPV/IRR and cut-off grade methodology); Gentry & O'Neil, Mine Investment Analysis (smelter/refining contract terms, net smelter return, taxation and risk); Guilbert & Park, The Geology of Ore Deposits, and Evans, Ore Geology and Industrial Minerals (VMS/SEDEX and porphyry deposit models); SME Mining Engineering Handbook, 3rd ed. (mineral exploration/evaluation stages, ore reserve classification); 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.
Revenue from a metal is grade × price, not grade alone. Molybdenum's price per pound has historically run several times higher than copper's (often in the range of 3–8× copper's USD/lb, depending on the metal-price cycle), so even at roughly one-quarter of copper's grade, molybdenum's much higher unit value can generate REVENUE comparable to copper's — the higher price largely offsets the lower mass fraction. As an illustrative check: if copper trades near USD 2.75/lb and molybdenum trades near four times that (roughly USD 11/lb, well within Mo's typical historical range), then a quarter of the mass at four times the unit price contributes almost exactly the SAME dollar revenue per tonne of ore as the copper itself (0.25 × 4 = 1.0). This is why porphyry copper-molybdenum operators routinely install a dedicated molybdenum flotation circuit and separately-negotiated Mo concentrate contract, even though molybdenum is by far the minor tonnage constituent of the two metals recovered — the byproduct's revenue contribution justifies the extra metallurgical and marketing complexity.
