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24-MMP-A4 Mine Valuation and Mineral Resource Estimation · May 2018

Question 10 of 23: Non-Ferrous Deposit Types – Geologic Settings, Models and Resource Estimation

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Notes on this paper

EGBC National Exam — Mining and Mineral Processing Engineering, 09-MMP-A4 Mine Valuation and Mineral Resource Estimation, 2018-May. 3 hours duration; closed book, with one handwritten 8.5×11 in. reference sheet (both sides) permitted; only an approved Sharp or Casio calculator allowed. Question 1 is compulsory (40 marks, parts 1.1–1.9); 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 estimators); Hustrulid, Kuchta & Martin, Open Pit Mine Planning and Design (mine valuation, cut-off grade theory, incremental analysis); Gentry & O'Neil, Mine Investment Analysis (Canadian mining taxation, cash flow/risk, smelter contract terms, NSV/NSR); SME Mining Engineering Handbook, 3rd ed. (ore deposit models, mineral exploration/evaluation stages, equipment utilization); O'Hara, T.A., “Quick Guides to the Evaluation of Orebodies,” CIM Bulletin, Feb. 1980 (parametric capital-cost estimating); CIM Definition Standards for Mineral Resources and Mineral Reserves / National Instrument 43-101 (resource/reserve classification and reporting).

Question 2: Non-Ferrous Deposit Types – Geologic Settings, Models and Resource Estimation (20 marks)

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.

Three contrasting types are chosen to span the main genetic families relevant to Canadian production — porphyry (bulk, low-grade), VMS (stratiform, structurally-hosted), and kimberlite diamonds (pipe-hosted, a geometry unlike any sulphide deposit):

Porphyry (stockwork) disseminated Cu±Mo veinlets VMS (lens on horizon) massive-sulphide lens + feeder Kimberlite (carrot pipe) diamond-bearing diatreme
Schematic cross-sections: (left) porphyry stockwork zoned around a felsic stock; (centre) VMS massive-sulphide lens on a volcanic horizon with underlying feeder stringer zone; (right) kimberlite “carrot” pipe narrowing with depth.

Porphyry (e.g. Highland Valley Copper). A large (100s of Mt), low-grade (0.3–0.6% Cu ± Mo, Au) stockwork of quartz-sulphide veinlets centred on a felsic-intermediate porphyritic intrusion, with concentric potassic→phyllic→propylitic alteration zoning and gradational, not sharp, grade boundaries. Economic minerals: chalcopyrite ± molybdenite, minor bornite/gold. Mined almost exclusively by large-scale open pit (truck/shovel), with grade control by blast-hole sampling and kriged block models; low unit operating cost (bulk tonnage) but high absolute capital cost (mill, tailings, waste stripping).

Volcanic Massive Sulphide (e.g. Bathurst). Stratiform, lens-shaped Cu-Zn-Pb ± Ag-Au sulphide accumulations formed by seafloor hydrothermal venting onto or near submarine volcanic rocks, with a discordant stringer/feeder zone beneath a conformable massive lens; deposits are tabular, syngenetic and commonly cluster along a favourable stratigraphic horizon. Economic minerals: sphalerite, galena, chalcopyrite, pyrite (with Ag/Au credits). Higher grade and narrower than porphyry, typically mined underground (cut-and-fill or longhole open stoping), with resource estimation constrained tightly to the mapped stratigraphic horizon rather than a generic 3-D grid.

Kimberlite Diamonds (e.g. Ekati). A narrow, near-vertical “carrot-shaped” volcanic pipe (diatreme) of kimberlite intruded through Archean craton, carrying diamonds derived from the mantle rather than crustally formed in situ; the deposit is defined by pipe outline and internal facies (crater, diatreme, hypabyssal) rather than by an assay-grade gradient in the usual sense. Economic product: gem and near-gem diamonds, valued by size/quality distribution rather than a simple weight-percent grade. Mined by open pit while the pipe is near surface, transitioning to underground block/sublevel caving at depth as the pipe narrows; resource/grade estimation is unusual in requiring large-diameter bulk sampling (mini-bulk and large-diameter core) because diamonds are too sparse and too valuable to estimate reliably from ordinary diamond-drill assay grades.

Comparison. All three are genetically and geometrically distinct: porphyry is a large, gradational, bulk-tonnage target amenable to conventional grade-control drilling and open-pit bulk mining at low unit cost; VMS is a narrower, stratigraphically-controlled, higher-grade target requiring underground selective mining and horizon-honouring estimation; kimberlite is geometrically the most constrained (a narrow pipe) yet economically the hardest to grade-estimate conventionally, since diamond value depends on a size/quality distribution that ordinary assay-based variography cannot capture, forcing reliance on large-volume bulk sampling instead. The common thread for Canadian resource estimation practice is that method choice follows geometry and grade continuity in every case: bulk/statistical for porphyry, horizon-constrained/structural for VMS, and bulk-sample-based for kimberlite.