CST MINERALS CASE STUDY: SELLING THE IMPORTANCE OF SAMPLING Promoting Departmental Responsibility and Accountability for Sampling QA/QC • DAVID WESLEY • BORAL AUSTRALIAN CONSTRUCTION MATERIALS • Geologist • COPPERCO • Production Geologist • CAPE LAMBERT EXPLORATION • Geologist • Environmental Technician • SARACEN GOLD MINES • Production Geologist • Project Geologist • Senior Mine Geologist • CST MINERALS • Senior Mine Geologist • Geological Mapping. Grade control. Reconciliation.
CST MINERALS CASE STUDY: SELLING THE IMPORTANCE OF SAMPLING Promoting Departmental Responsibility and Accountability for Sampling QA/QC • Promoting the Importance of sampling and grade control • Promoting the role of sampling and its critical role in mine site operations • Securing management and departmental buy into the necessary changes in the sampling process • Ensuring management commitment to and acceptance of sampling and avoiding neglect of duty. • Establishing processes that are simple to explain and implement
PROMOTING THE IMPORTANCE OF SAMPLING AND GRADE CONTROL • Why is sampling and grade control so important? • The ore-body is an investment that is expected to return a profit. • The biggest threat to a return on the investment is variability of grade. • This variability is measured using grade control drilling. • This information allows us to manage and control the variation. • CASE STUDY: CST MINERALS • Given task of ‘improving grade control program’ • STEP 1: Define what management actually wants (and what you can deliver) • Does ‘improvement’ mean representative ‘text book’ sampling, lower costs, higher grades…. • Management actually want consistent feed grades into mill inline with budget • STEP 2: GRADE CONTROL PROCESS FLOW • Management shown that grade control is a system comprising many individual processes each with their own input and outputs. • A grade control system is much more than “putting dirt in bags” • Feed grade is the end product or final output of the grade control system • Every input into the system has the potential to alter the final output • These individual alterations to input are the variances we are seeking to control
RESOURCE BLOCK MODEL EXTRACTION MINING SCHEDULE 1 MINING SCHEDULE 2 GRADE CONTROL DRILLING • PLANNING • Block model • Geological mapping input? • SAMPLING • Drilling • Collection • Quality • QAQC • Submission • DATA VALIDATION • Collar surveys • DH surveys • ID validation • LABORATORY • Chain of custody • Contamination • QAQC • Turnaround • DATA ANALYSIS • & DESIGN • Assays only? • Geological input? • Geostatistics • Analysis time
STEP 3: DEMONSTRATE HOW THIS VARIATION IN GRADE WILL AFFECT THE BOTTOM LINE • A simple calculation • 300kt mined per month at 1% metal and 85% recovery • 2550t of contained metal • $6700 per tonne • $ 17,085,000 revenue per month • How does variation in feed grade affect revenue? • A 0.05% drop, or variation in grade for only 1 month costs $854K in revenue. • Over 6 months $4.27M • Over 1 year $9.4M
0.05% VARIATION IN GRADE PER MONTH EQUATES TO A LOSS OF $854K PER MONTH OR $4.27M FOR 6 MONTHS OR $9.40M FOR 12 MONTHS
0.1% VARIATION IN GRADE PER MONTH EQUATES TO A LOSS OF $1.7M PER MONTH OR $8.5M FOR 6 MONTHS OR $18.7M FOR 12 MONTHS
WHAT ARE THE CAUSES OF GRADE VARIATION? • GEOLOGICAL • Geological variation is unique for every deposit. No deposit is homogenous. • Easily measured through mapping and sampling • Cant control or change this type of variation. It can only be managed. • May involve a change in operations and or methods to suit changes in the deposit • CASE STUDY • The deposit is a copper oxide blanket that is treated by sulfuric acid heap leach • Oxide blanket sits over a large high grade copper sulfide deposit that can not be heap leached. • This material was being processed but not returning any significant copper grades. • As a result monthly grade targets down, by up to .25% Cu. • ‘Something wrong with the grade control results’ and ‘reassay and redrill’ • Saved significant sums of time and money by simply looking at the geology as a whole. • The solution was to stockpile this material separately and process at end of mine life.
OPERATIONAL • Schedule dictates when, where and what gets mined. • Non conformance to schedule alters feed grade and volumes to ROMS. • Occasionally due to ‘Acts of God’ such as weather, breakdowns etc • Usually, due to tinkering and interference. Going for the ‘easy dirt’ or ‘high grading’ to make up for last months shortfall. • At its most damaging is mining at the expense of grade control. • CASE STUDY • Engineers produce schedule • General acceptance that small day to changes are acceptable to keep fleet running • However, no change management process in place to deal with large chances. Large changes generally focussed on tonnes rather than grade. • No reforecasting of schedule after changes made. • The solution was to instigate a change management process whereby significant changes to schedule had to reviewed and reforecast prior to any change.
2 QUESTIONS FOR MANAGERS • ARE YOU ASSUMING HOMOGENIETY WHERE THERE IS HETEROGENIETY • IS THE WAY YOU OPERATE CAUSING VARIATION IN GRADE • IF THE ANSWER IS ‘NO’ TO THESE TWO QUESTIONS THEN VARIATION IS PRIMARILY DUE TO GRADE CONTROL METHODS • This variation may be due to operational issues • Poor program design • Lack of support for program • Most commonly due to poor samples • Rarely due to not enough samples • Never the answer to collect less samples • Or it may be due to ‘human factors’ • The best grade control programs are ineffective if run by improperly trained and motivated personnel. • Personnel are low paid and low skilled, yet have one of the greatest responsibilities in the operation. • Human beings are at once the greatest asset and greatest hindrance to any system • If you want to improve your grade control program you need to improve your people.
PROMOTING THE ROLE OF SAMPLING AND ITS CRITICAL ROLE IN MINE SITE OPERATIONS • Variation in grade is the biggest threat to profitability. • It costs us revenue • Therefore we need the time, the people, the training and the systems to run effective • sampling programs • Sampling is the only way to measure and control variation in grade • Your sampling system is only as good as the people who run it. • Do sampling roles have set job descriptions? • What are the qualifications required (if any)? • Are there development programs in place for your sampling staff ? • Is there an path of employment progression ? • Competitive pay rates ? • Who do they answer to? • What are their KPI’s
CASE STUDY • 90% sampling staff have no previous experience • 50% had been internally trained. • Remaining 50% had no geologist on site and were trained by other samplers. • Internal training systems were both flawed and outdated. • 0% had undertaken any professional external training. • Only job progression was truck driving. Led to many operators getting friends jobs as samplers until a truck driver job came up. • Payed far less than any other job on site. • Much harsher job conditions. • Unsure who they answered to. Effectively shift bosses. • No KPI’s • SOLUTION • Any new staff must have previous experience. At the time, exploration field workers contracts were ending so were able to employ additional experienced staff. • Geologists and samplers revised procedures • Geologists required to spend more 1 on 1 time with samplers • Staff sent to external training then tasked with passing knowledge onto their coworkers • Cross departmental work with production, exploration and environmental departments to broaden experience base and employment prospects • Clear organisational charts displaying who samplers answer to • KPI’s based on sample quality and information recorded. Coincident with pay reviews • OUTCOME • Over a 3 month period, the variability in feed grade began to decrease from up to .25% (monthly) to .1% • Total cost: $5000 in training
SECURING MANAGEMENT AND DEPARTMENTAL BUY INTO THE NECESSARY CHANGES IN THE SAMPLING PROCESS • Take your managers through your sampling program • In the pit • At the rig • In the lab • Discuss, what can you improve today for no cost? • What can you improve tomorrow for a cost? • Implement the changes you can today. • Display that a small increase in outlay will return revenue at the end of the process. • Show that grade control is far more than getting dirt into bags. • QAQC QUALITY ASSURANCE AND QUALITY CONTROL • Means more than just blanks and standards • A commitment to best practice and continuous improvement • MAKING PEOPLE CARE • How is it done?
Everyone, apparently has different roles, responsibilities and KPI’s • But at the end of the day we are all there to make money • A common language is needed. • Fortunately there already is one and we all speak it…. • MONEY! We all know the value of it. We all care about it. • You need to be able to provide a simple and straight forward example • 0.05% grade variation costs/adds $800K • To measure and control this variation you need to a functional grade control program. What is the grade control budget versus the potential losses and gains from grade control. • An increase of .1% in Cu grade for 1 month covers the cost of a years grade control. • The need to invest in people, not just drilling and assaying. • Do your samplers, pit technicians, lab technicians etc have a training system and skills matrix in place? • The cost of placing low skilled and low paid workers into your grade control program • The cost of the high turnover of these workers • The cost of training and retention • The cost of employing professionals (Exploration Field Workers, Lab Technicians, Rig offsiders) • More expensive to employ but how much extra will you really need to pay? 50K, 100K? • How much money are you investing in sampling beyond the drilling and assaying costs? • How much is spent on wages. Consistently lowest paid and lowest skilled workers on site. • How much is spent on training and development? YOU GET OUT WHAT YOU PUT IN
ENSURING MANAGEMENT COMMITMENT TO AND ACCEPTANCE OF SAMPLING AND AVOIDING NEGLECT OF DUTY. • 1: RECONCILAITION • At its core, all reconciliation track variability. • Monthly and quarterly reconciliations lay everything bare. Nothing can be ignored or glossed over. • 2: SCHEDULING • All schedules need to account for grade control • Does the schedule allow for sample collection times, dispatch, lab turnaround and interpretation • 3: MONTHLY REPORTING • Focus on grade control. • Focus on the positives. • 4: REGULAR FACE TO FACE, HANDS ON TIME WITH MANAGERS • Keep the subject current • Focus on the positives • Communicate what you need to do a better job…and make more money.
ESTABLISHING PROCESSES THAT ARE SIMPLE TO EXPLAIN AND IMPLEMENT • Map out your system as a whole • Highlight every individual step • Each step requires a procedure • Processes and procedures need to be accessible, transparent and simple. • Where are they • Who can access them • Are they up to date and regularly reviewed • Procedures should be short and simple • Leave the details and theory in the appendices • 1 page non technical • The details should be explained • In short blocks • Verbally • One on one • In the field • When training employees or implementing changes • One thing at a time • Explain why the changes are occuring.