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CST MINERALS CASE STUDY: SELLING THE IMPORTANCE OF SAMPLING Promoting Departmental Responsibility and Accountability for Sampling QA/QC DAVID WESLEY BORAL.

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Presentation on theme: "CST MINERALS CASE STUDY: SELLING THE IMPORTANCE OF SAMPLING Promoting Departmental Responsibility and Accountability for Sampling QA/QC DAVID WESLEY BORAL."— Presentation transcript:

1 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.

2 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 CST MINERALS CASE STUDY: SELLING THE IMPORTANCE OF SAMPLING Promoting Departmental Responsibility and Accountability for Sampling QA/QC

3 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

4 RESOURCE BLOCK MODEL MINING SCHEDULE 1 GRADE CONTROL DRILLING MINING SCHEDULE 2 EXTRACTION DATA VALIDATION Collar surveys DH surveys ID validation PLANNING Block model Geological mapping input? SAMPLING Drilling Collection Quality QAQC Submission LABORATORY Chain of custody Contamination QAQC Turnaround DATA ANALYSIS & DESIGN Assays only? Geological input? Geostatistics Analysis time

5 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

6 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

7 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

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9 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.

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11 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.

12 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.

13 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

14 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

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16 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?

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20 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

21 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.

22 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.

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