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Reducing risk and optimizing the mine
production schedule at the LabMag
magnetite deposit
CIM Convention - May 12, 2015
Michael Spleit
Senior Engineer, Mine Planning
Outline
2
• LabMag deposit
• Tailings management
• Truck fleet
• Geological and financial risk
• Mathematical optimization model
• Comparison of optimized schedule to conventional
• Conclusions and future Work
5
New Millennium Iron’s Projects
Determinstic (kriged) model
Mesabi Iron Range
Marquette Iron Range
Millennium Iron Range
Labrador Trough
NML Project Areas:
Northern Québec
& Labrador
6
LabMag Taconite Iron Ore Deposit
7
Previous LabMag Site Layout
6
Equipment Fleet
150m deep:
trucks drive slower on the incline
productivity is lower
Better:
• Directly consider truck hours during scheduling
• Mine blocks with higher truck productivity in earlier periods
• Delay equipment purchases
14
Equipment Fleet
0
5
10
15
20
25
30
35
40
45
#oftrucks
Year
HAUL TRUCKS Trucks
Smoothed trucks
6
Geological Risk
Structural Units:
7 lithologies
correlated thicknesses
Metallurgical Qualities:
4 correlated qualities
FeH (head iron)
DTWR (weight recovery)
FeC (concentrate iron)
SiC (concentrate silica)
Deposit is stochastically simulated 10 times
Risk Analysis with Stochastic Simulation
Early period
risk of shortfall
Cumulative DCF Comparison
23
-250%
-200%
-150%
-100%
-50%
0%
50%
100%
150%
Y-4 Y-2 1 3 5 7 9 11 13 15 17 19 21 23 25
CumulativeDCF($)
Year
80% confidence range (Conventional schedule)
Expected value (Conventional schedule)
Deterministic model (Conventional schedule)
14.9%
4
Considerations in this study:
1.Maximize mine profitability
2.Address geological (and thus financial) risk
3.Minimize equipment fleet
4.Provide space in-pit for replacing waste/tailings
New Optimized Production Schedule
Changes in Criteria
• No cut-offs
• Different silica targets (flowsheet changed)
• Avoid MS layer
• Tailings considered dry-stacked instead of wet
8
28
10 Year Optimization and Pit Designs
10 Year Optimization
Based on Block Model
Each colour is a different period
Manual Pit Designs
Based on Optimization
After 5 Years After 10 Years After 25 Years
Process
Plant
Truck productivity comparison
16
Ore Tonnes
17
Deterministic model
consistently over-estimates
Waste and Stockpile Tonnes
21
(Stochastic)
(Conventional)
(Conventional)
0
10
20
30
40
50
60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Millionsoftonnes
Period
Waste
Stockpile
Waste
22
Major Equipment Fleet
Cumulative DCF Comparison
23
-250%
-200%
-150%
-100%
-50%
0%
50%
100%
150%
Y-4 Y-2 1 3 5 7 9 11 13 15 17 19 21 23 25
CumulativeDCF($)
Year
80% confidence range (Conventional schedule)
Expected value (Conventional schedule)
Deterministic model (Conventional schedule)
14.9%
Cumulative DCF Comparison
23
-250%
-200%
-150%
-100%
-50%
0%
50%
100%
150%
Y-4 Y-2 1 3 5 7 9 11 13 15 17 19 21 23 25
CumulativeDCF($)
Year
80% confidence range (Optimized schedule)
80% confidence range (Conventional schedule)
Expected value (Optimized schedule)
Expected value (Conventional schedule)
Deterministic model (Conventional schedule)
16.9%
25
Conclusions
1. Optimized sequencing considers haul cycle times:
Reduced equipment CapEx, reduced OpEx
2. Strategy for creating in-pit space for waste
disposal
3. Reduced risk profile for concentrate tonnes (and
thus sales)
4. Blending control was incorporated
5. Stochastic scheduling has significant economic
benefit
26
Future Work
Global optimization
-Manage waste explicitly
-Semi-mobile crusher instead of fixed plant:
include crusher locations and moves as part of
the optimization
-Consider cost implications to DTWR variations
in the plant
27
Merci!
TSX: NML
OTCQX: NWLNF
www.NMLiron.com

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