mineral economics its about the surface mine planning its also inform about the mineral inventory, mineral ore reserve, classification of ore reserve, basic difference cut of grade, market limiting cut of grade etc.

1. CONTENTS
Mineral inventory
Mineral ore reserve
Classification of the mineral reserve
The basic difference cut of grade
Market limiting cut of grad
Determination of optimal cut off grad policy to optimize NPV

2. Mineral inventory:
 A wide range of data evaluation procedure determining data
quality and sampling protocols three dimensional visualization
of complex geologic features and data distribution.
 Three-dimensional solid modeling of mineral deposit
preparation of plans and vertical section contoured plots of
grad and other variable variography (quantifying grad
continuity)
1.Block modeling of a deposit
2.Rapid calculation of reserves

3.  Evaluating effect of various mining methods the ready
determination of economic feasibility than made up by the
relative speed with which numerous application can be
implemented and update obtained.
 The ability to evaluate different decision scenarios rapidly.
Application include a wide range of topics such as those listed.
 That are routine part of modern mineral inventory practice but
that are too complicated to be done manually.

4. Some questions include the following :
 How are data selected for contouring or block estimation ?
 What interpolation procedure is used for contouring ?Are contour
intervals selected arbitrarily , or can they be designated ?
 Users must become more aware that an understanding of the
procedures and decision making rules implemented in software is
essential for its correct and effective use.
 As champing and grimly (1990) conclude Ore bodies are dynamic
entities prone to significant changes through time as metal prices
fluctuate and mining technology evolves .

5.  The magnitude of these changes can be efficiently examined through
use of computer based ore reserve approaches‘
 Available software can be classed as public domain and commercial .
In general, public domain.
 Software is free or extremely inexpensive and includes full source
code ;of course , it generally comes with no technical support.
 Such software is generally available from universities, government
organizations textbooks, the scientific and technical literature, and
various user groups accessible though the internet.
 Commercial software , although more costly, generally comes with
an up to date users manual and a technical support system from
vendor , and source code is generally proprietary.

6. Mineral ore reserves
 Mineral ore reserves:
 The total mass of mineral which can be economically exploited
under the local condition is called the mineral reserve.
 Classification of the mineral reserve:
1. Inferred Reserve:
 It is a quantitative estimate based on the geological character of
the bed.
 The measurement ore based on the assumed continuity and a
geological evidence more than 1000 to 2000m from out crop.

7.  This estimate may very with less than 4 percentage in grade and
less than 50 percentage in variation in quantity.
 This is first estimate of the grade and quantity of the ore
deposits.
2. Indicated Reserves :
 This Reserves is based on the prospective and work of the
exploration carried out on geological grounds and also tranches
drill holes etc.
 In this reserves the point of the observation my be of 1000 apart.
3. Measured/proved reserves :
 This reserves is based on the work of exploration mineral deposits
excavation opening trenches mine working and bore hole's

8. 4. Developed Reserve:
 It is a part of estimate of the portion of mining
 In this reserves of the tonnage and grade is estimate
5. Demonstrated Reserve:
 It is combined quantity of indicated reserves and measured
/proved reserves .
6. Quarriable Reserve:
 The total reserve which can be quarriable economically and
profitably are called quarriable reserve
 The quantity of this type reserve are
 - The market value of the mineral
 -Method and cost of the mining
 - Degree of mechanization etc.

9. 7. Mineral underground reserve:
 As the total “inset” reserve can not be worked and the loses of
extraction is provided .
 The extraction factor is computed and this factor is used to
compute the total mineral reserve.

10. The basis difference cut off grad:-
 A grade tonnage curve is express the proportion of the ore body
above the series of cut off grades and it is also depicts the average
grade of the material above cut off grade.
 This curve can be used to determine the influence of various
actions to increase to the recovery of the resource .
 The equipment is must be able to select and separate blocks of the
size is assumed by the grade tonnage curve.
 the grade tonnage curve is a helpful tool because it allows the
derivation of :-

11.  The grade tonnage curve is a helpful tool because it allows the
derivation of :-
1. Cut off grade .
2. The average mining grade of the resources above the cut off .
3. The tonnage available above the cut off .
 The grade tonnage relationship which is relates to the tonnage
and grade of the mineable ore.
 The curve are involved following graphs :
1.Cut off grade V/S cut off grade .
2.Cut off V/S cut off grade.
3.Metal V/S cut off grade.

13.  There are two separate tonnage curves are indicated:-
1. An optimistic estimate.
2. An Conservative estimate.
 The different criteria of the curves are interpolating and
extrapolating .
 In optimistic curves gape is interval and in conservative
curves the gape is several.

14. Market limiting cut off grade:
 For the average gold mine the market may be limited in the
short term by an exclusive salsas contract , or by imposing
constraining of refinery or smelter .
 This does not present any significant restriction on the sale of
the metal in the medium to long term , but concept is carried
forward by lane (1997) and is applied her because of potential
application in other commodity markets.
 Work undertaken in the field of cut off grade optimization
has not advanced much beyond the work undertaken by lane
in 1988.

15.  His definitive work is based on the calculus of the net present
value criterion , which is the most widely understood ,
consistent , and appropriate method by which sequential cash
flow arising from the extraction of material reserves from an
exhaustible resource can be represented.
 Although the mathematic s is not complex Lane's method is
not widely appreciated or applied approach to maximizing the
value of a mining operation through selection balancing of
operational cut off grade.
 Three stages in a mining operation, namely mining, processing
and marketing where defined by lane and the economics of
each stage are identified and isolated to provides an optimum
cut off each stage.
 Keywords : cut off grade, net present value , grade tonnage
curve, balancing cut off grade, mining, processing, marketing.

16. Determination of optimal cut off grade
policy to optimize NPV:-
 d is the discount rate , NPV is the future cash flows cash of the years
(i)to the end mine N , and the C is the total milling capacity in year
i.
 The cut off grade gm (i) depends on the NPVi and NPVi can not be
determined until the optimum cut off grade have been decided.
 Loosely speaking , the global optimum is the best all possible
values while a local optimum is only the best the neighborhood.
 One of the most powerful nonlinear optimization algorithms is the
generalized reduced gradient algorithm method.
 The GRG algorithm was first developed by Lesson (1978).

17.  The development of the procedure begins with the nonlinear
optimization problem written with equality constraints.
 The idea of generalized reduced gradient is to convert the
constrained one by using direct substitution.
 The procedures of constrained variation and Lagrange
multipliers in the classical theory of maxima and minima are
required.
 There are economic model and constraint equations were
expanded in a Taylor series , and only the first order terms
were retained .
 This led the Jacobean determinants of the method of
constrained variation and the definition of the Lagrange
multiplier being a ratio of partial derivatives .

18. THANK
YOU