Dilution

Delivering Smarter Solutions

ISSUE NO. 60 — November 2004

PAH NEWS PI
MECHEL STEEL LISTS SHARES IN U.S. ICSG EXPECTS COPPER MINING GROWTH GOLD DISCUSSED AT T EUROMONEY CONFERENCE

Dilution and Ore Recovery
This month’s topic for Pincock Perspectives was suggested by Ms. Evangelina Apparicio, Mine Planning Engineer, Companhia Vale do Rio Doce - CVRD Dilution is one of many challengesconfronting the professionals in mining, and is perhaps one of the oldest. It is a quiet thief, requiring the expenditure of money to mine or process material that has little or no value to the operation, and can convert valuable rock into waste. Dilution is defined most simply as waste material that is taken in the process of ore extraction, but there are multiple assumptions laying within thisdefinition. It assumes that the operator knows with fair precision the location, shape and grade of a given ore block, and that the equipment operators are capable of mining at a similar resolution. Historically, dilution and ore loss were little more than factors associated with the estimating methods of the time (polygonal, x-sectional, etc.). Now, with computers to help complicate matters,numerical methods are needed to describe and hopefully predict both losses and dilution. There are four broad categories of dilution that the miner encounters. The first is the “mine call” dilution, which is simply a correction factor applied to the mine-estimated production grade to arrive at the mill-reported feed grade. The second is contact dilution or “external dilution,” which is low-grade materialtaken unintentionally during mining. The third is internal dilution, which is waste material so ingrained within the ore that physical separation is impractical. The fourth form is “Murphy dilution,” which is caused by mining errors. Some would argue that there is a fifth form imposed by sampling errors, incurred at any number of stages throughout the mining process whenever a sample is taken. Theauthor does not consider this to be a dilution problem, although it is certainly a consideration when trying to diagnose dilution sources. Sampling theory is a topic for another “Perspectives.”

Mine Call Dilution
Some could argue that mine call dilution is not really dilution, but is actually a correction factor used to adjust for a combination of problems arising from other three forms ofdilution, with sampling errors tossed in for good measure. This is probably accurate, as correction factors do little to describe the source of a dilution problem, and may actually mask deeper problems. Mine-call dilution has the redeeming virtue that it is an obvious measure that comes from reconciliation, and it is a clear indicator that something is rotten in Denmark. If the discrepancy betweenthe mine and mill is small, or if the operation is woefully understaffed (a more typical problem these days), then other priorities may override dilution in management’s mind. From PAH’s experience though, dilution can be a significant drain on cash flow in an industry where margins are often razor-thin, and should be analyzed and eliminated where possible.

C A L E N D A R
Mines & Money London2004 November 30 – December 2, 2004 London West Hotel and Convention Centre London, United Kingdom email: jane.burman@miningjournal.com SME 2004 Arizona Conference December 5 – 6, 2004 Doubletree Hotel at Reid Park Tucson, Arizona email: sme@smenet.org Northwest Mining Association’s s 110th Annual Meeting December 6–10, 2004 Red Lion Hotel at the Park Spokane, Washington email: pheywood@nwma.orgMineral Exploration Roundup 2005 – Discovering Our Future January 24–27, 2005 Westin Bayshore Resort & Marina Vancouver, B.C., Canada email: roundup@chamborofmines.bc.ca

Contact Dilution (External Dilution)
Contact dilution is determined by resolution; specifically, the ability to accurately define and then mine along the limits of an ore zone, such that the mining equipment available can...