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.
Not entirely. Equal project lives and equal investment amounts remove the SCALE and TIMING-HORIZON differences that most often cause IRR and NPV to disagree on ranking, and indeed here both criteria agree (6B wins on both). But equal lives do NOT remove differences in cash-flow SHAPE (6A front-loaded, 6B level) — a genuine Fisher crossover rate still exists between these two streams (found near the high-20s%, above both alternatives' own IRR, where NPV6A would overtake NPV6B), so IRR still carries independent diagnostic information about how sensitive the ranking is to the assumed discount rate. In this specific case NPV alone would have been sufficient for the decision, but computing IRR is still worthwhile as a robustness check confirming the ranking holds across a range of rates, not just at exactly 15%.
