1. Pre-Feasibility Study Cost Estimation Resources ©2002 Dr. Bradley C. Paul

2. Pre-Feasibility Study n Order of Magnitude Estimates Determined which things would be considered n Pre-Feasibility Study Determines whether there is enough promise to justify the effort required to move forward n Feasibility Study (generally 10-30% +/-) n Next Moves to Project Approval (5-10%)

3. Pre-Feasibility Study n Pre-Feasibility Study – Requires that you have a concept for what going to build – Break project down into areas and tasks n Outby Haulage n Ventilation n Mine Workings n Costs of Components Done Separately – Need to include everything

4. Methods of Getting Pre- Feasibility Cost Data n Clear List of What is Included to make sure all components are included n Begin to Find Manuals Available – EPRI Coal Mine Cost Model (about 1981) – Bureau of Mines Cost Estimating System (1984) – SERPA Cost Program (current) – Western Mine Cost Service

5. Typical Cost Manual Approaches n Factored Cost Estimates – Use Curves that are a function of some over-all characteristic n Example US Bureau of Mines Cost Estimating System n Itemized Cost Estimates – Specify cubic yards of concrete – Apply a cost per cubic yard – Used by EPRI and Serpa

6. Strengths and Weaknesses n Factored Cost Estimation Approach – Requires a lesser degree of engineering detail be worked out to run n all costs linked to a specific generally known parameter – Lets get closer to answer with less work n Itemized Cost Estimates – Structure is same as Feasibility Estimate n allows more transparent transition to Feasibility study estimates

7. General Comments on Major Cost Estimation Resources n EPRI - Coal Mine Cost Model – Most cost model resources are for hard rock and industrial minerals - this one is coal – Model covers coal mining costs but is weak in ancillary facilities and some capital costs n Example - No capital cost capability for shaft or slope – Model linked to a computer program that has not been updated n 1981 software in the 21rst century looses a lot

8. More EPRI Comments n 1980 and 1981 cost base – needs significant inflation indexing n will see later that knowing how much to index with what is important n doesn’t show which indices to use on what n Productivity Sensitive – crews and advances done with simulations current in 1980 – coal mine productivity has increased about 250% n are some productivity indices from BLS but not a common updating procedure

9. SERPA n A Hardrock Package n A comprehensive mine cost package that has been maintained to fairly current status with costs – is private so seeing exactly what is in the package is not really possible – fairly current still means the driving routines run in DOS n cryptic key sequences and IO problems n suspect that costs are updated but engineering assumptions in code may not be

10. SERPA n Has a lot of defaults built in n Has relatively simple categories of mine needs n May almost be able to run at at the fairly precise order of magnitude estimate stage – most manuals really can’t help you till get to prefeasibility – Ability to add details and replace defaults gives system power that extends up into pre-feasibility n weaknesses in showing details of output probably make use in feasibility stage really questionable

11. Western Mine Cost Service n Collection of cost models and typical item prices – comes as articles over time n makes comprehensive approach at any one time questionable n may have to inflation index different parts of mine cost separately n very vulnerable to holes in needed costing n Hardrock manual that has some coal mining equipment items in it – can use on coal but comprehensive approach problem

12. Western Mine Cost Service n Place where manual shines – identify a critical cost area and you want to get down to itemizing equipment or features and need costs n great alternative to fishing for vendors that will give you prices before your really shopping for equipment – event is likely to occur as Pre-feasibility study moves into true feasibility study – Manual caters all the way from Order of Magnitude to Feasibility but is comprehensive nowhere

13. US Bureau of Mines Cost Estimating System n Prob the most comprehensive high precision pre-feasibility manual ever written – No holes - covers everything – Too much detail and work to function in Order of Magnitude Estimation – Factored cost estimate approach is not compatible with itemized detail needed in critical areas of Feasibility Study – Manual is clearly hardrock n not good for quarry’s either

14. Status of BM CES n Mid 90s Congress killed Bureau of Mines – manual has been without caretaker – lots spin off people went to Western Mine Cost and Serpa came from BofM n Had beautiful spreadsheet program that ran manuals rapidly n was designed for Lotus 123 n not updated to latest spreadsheets and some macros don’t work

15. Status of BM CES cont n Had automatic cost indexing but that’s not been maintained n fortunately same index structure was picked up by Western Mine Cost which has been maintained n getting recent indexing into spreadsheet model is an on your own – can do it manually as you will see