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8/13/2019 Simulation and Risk Analysis
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Risk assessment using Minesight
software & Python scripting
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Presentation aim
To highlight the risks present in resource and
reserve estimation and give an insight into some
of the tools available in Minesight that can be used
to determine grade risk.
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Presentation Summary
Snowden overview
Risk factors in mining
Simulation for grade risk
Confidence limits and probability above cutoff
Case Study: Grade riskpython scripting.
Handy hints Questions
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Snowden overview
Downer EDI
Snowden (160+ people worldwide)
Resource Evaluation Group
Mining Engineering Group
Geotechnical Engineering Group
Corporate Services Group (Audits, Valuations) Business Improvement Group (Six Sigma)
Risk Management Group
Mentoring and Training
Technologies (Supervisor, Reconcilor)
Offices in Perth, Brisbane, Johannesburg, Vancouver and London.
For further details refer to www.snowdengroup.com
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Minesight experience / training
12+ years experience using Minesight in grade control, geological
modelling, stockpile modelling, resource estimation, resource
classification, statistical and spatial analysis, mine planning,
scheduling and pit optimisation
Snowden also deliver in depth training courses and detailed training
manuals are also available:
Snowden resource estimation guide using Minesight
software*
Statistical and spatial analysis using MSDA* Kriging and block model validation
Resource estimation and classification
Simulation and risk analysis
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Involvement in Minesight Software
Development
Boddington Gold Mine, Western Australia Inclined benches
Lihir Gold Mine, Papua New Guinea
Stockpile Modelling
Mt Isa Copper Mine and George Fisher Mine, Queensland Data Security System
Multirun tool
Drillhole design tool
Compositing weighting
Kriging engine
Easting offset (unfolding)
Geomap tool
Minesight Data Analyst (MSDA)
Block modelling & resource evaluation
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Risk?
Risk = Likelihood x Consequence
What is the likelihood that you will be injured?
How severe will be your injuries?
Is the risk acceptable?
If you understand the risks present then youcan mitigate the impact of these risks withgood management and decisions.
Poor Risk Management!
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Cultural
FeaturesHumanNatureRisk
Economic
Uncertainty
Dynamic
Constantly
Changing
Topography
Mineral Types
Mineralisation Limits
Lithology
Geotechnics
COMMODITY PRICES
LABOUR
COSTSINFLATIONINTEREST
RATES
PROCESS
CAPCOSTS
Risk factors in mining
MotherNatu
reRisk
GeologicalUncertainty
More difficult
to quantify
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Resource and Reserve risk
RISKis commonly not
quantifiedat any of the
technical stages
UNCERTAINTYinherent in each stage
Resource and Reserve estimates
Oredefinition
Geologicalinterpretation
Resourceestimate
Reserveestimate
Mineplanning
The greater theuncertainty thegreater the risk!
**Uncertainty associated with geological interpretation and grade estimation is usuallythe largest source of potential error in the resource and reserve estimate**
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What is grade risk?
Grade Risk: The risk of not meeting estimated grade
Grade risk is a function of the grade variability present within theselected mining unit (panel) and the probability that the grade
present within that panel exceeds the economic cutoff grade
High risk blocks would have a high probability that the grade minedfrom that block would be less than the economic cutoff grade
The greater the grade variability present
The greater the risk thatthe estimated grade is not achieved
Low risk blocks would be in areas of consistent grade and theprobability that the estimated grade of the block exceeding theeconomic cutoff grade would be high
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How to determine grade risk?
Simulation is the answer
Conditional Simulation gives the user numerous equi probable results for any panel. (Aminimum of 100 realisations is recommended)
Simulation is typically completed external to Minesight due to the current limitation of items in
the block model
Reality
Multiple realisationsConditional Simulation
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Confidence limits and probability
above cutoffs
0
1
2
3
4
5
6
7
8
9
1 2 5 10 15 19 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 99Mean Ranked Simulations
SiO2Grade(%)
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Distribution of simulated grades
The greater the spread ofsimulated grades for a panelThe greater the risk
Low confidence
large variance wide spread
large range of potential values
Potentially high risk region.
High confidence low variance narrow spread
small range of potential values
Potentially low grade risk regionCumulativeFrequency
Spread of grades0
1
Cu
mulativeFrequency
Spread of grades0
1
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Example of calculation of error by
confidence limit (c.l.)
95thpercentile
5thpercentile
c.l.90%aterror2
5th95th
Absolute error
Absolute error for a given 10m x 10m panel
is: 4.29% SiO2 1.73% S at 90% c.l.
Relative error for the same 10m x 10m
block is: 4.29% SiO2 40.0% at 90% c.l.
5.90 - 2.45 = 1.73
2
Simulation
Mean Rank SiO2 Grade (%)
1 1.75
5 2.45
10 2.71
25 3.53
50 4.13
75 5.10
90 5.60
95 5.90
100 7.70
Mean 4.29
Relative error
1.73 = 40%
4.29
Absolute Error x 100
Mean
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Simulation grade range map
(90% Confidence)
Blue regions show low grade variation and are potentially low risk areas Yellow regions show high grade variation and are potentially high risk areas
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Probability above cutoff maps
Probability map ofSiO2 grade beingabove 4.0%
High probability /high risk areas arered
Probability map ofSiO2grade beingabove 6.0%
High probability /High risk areas arered
Probability Calculation 90% c.l.
(82 / 90) x 100 91%
90
x 100
Number of
realisations above
cutoff grade within
90% CI
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Panel error investigation
Average relative error at different panel sizes and at
different confidence limits
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Com
posites
10m
x10m
20m
x20m
30m
x30m
40m
x40m
50m
x50m
100m
x100
m
200m
x200
m
300m
x300
m
400m
x400
m
500m
x500
m
Panel Size
A
verageRelative
Erro
r(%)
90% Confidence 80% Confidence 50% Confidence
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Analysis of first three years production
01
2
3
4
5
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
2,500,000 3,500,000 4,500,000 5,500,000 6,500,000 7,500,000 8,500,000
Tonnage
Grade
Maximum grade simulation
Minimum grade simulation
Median grade simulation
Range in tonnage at a given grade
Range in grade for a fixed tonnage
Probability and risk analysis
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Schedule risk
Grade Variation by Scheduled Year
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
0 2 4 6 8 10
Year
Grade
Sim maximum
Sim minimumSim median
Kriged estimate
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Case Study:
Risk calculation - python scripting
Python scripts areeasily developedby Mintecpersonnel and savesignificant time andeffort
Python scripts arecommonly storedunderc:\medexe\site\scripts
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Load simulations into Minesight
Load mean ranked simulations to the block model. Due to the limitation of the number
of items in the block model it is not possible to load all the simulations to a single
block model. Only load the minimum, 5th, 10th, 25th, 50th, 75th, 90th, 95thand maximum
ranked simulation values to the block model
In addition it is good practice to also load the mean, variance, standard deviation and
coefficient of variation of the simulations to the block model
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Load probability above specified
cutoffs into Minesight
Load probability values above specific cutoffs into the Minesight block model. The
example above shows probability values for SiO2exceeding 2.0%, 4.0%, 6.0%, 8.0%,
10.0%, 12.0% and 14.0% being loaded to block model items SIP02, SIP04, SIP06,
SIP08, SIP10, SIP12 and SIP14 respectively
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Calculate grade range at different
confidence limits for each panel
Using block modelUser Calcs the grade range between the 50% confidence limit(25thto 75thranked simulation), 80% confidence limit (10thto 90thranked simulation),90% confidence limit (5thto 95thranked simulation) and all simulations werecalculated for each panel and stored in the block model items S2575, S1090, S0595and S1100 respectively
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Calculate the relative error at different
confidence limits
For each panel the relative error for each of the confidence limits iscalculated and stored to the block model. The relative error iscalculated by dividing the simulation grade range for each confidencelimit by the simulation mean and multiplying by 100
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Calculation of grade risk
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Simulation grade risk matrix
1.00
0.95 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
0.90 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
0.85 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37
0.80 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
0.75 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
0.70 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
0.65 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
0.60 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
0.55 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
0.50 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
0.45 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
0.40 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
0.35 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
0.30 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
0.25 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
0.20 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
0.15 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
0.10 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
0.05 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200
Very Low Risk (1 to 5)
% Grade Variance from Mean (Risk 95 = Grade Variance of PCU05 to PCU95). Other Risk Options - Risk 90, Risk 75.
Probability
theBlockGradeisbelow
theRes
ourceCutoffGrade(90%
c.l.)
Moderate Risk (9 to 10) Very High Risk (16 to 20)Extreme Risk (>20)
Low Risk (5 to 8)
High Risk (11 to 15)
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Risk maps
Risk maps are a powerful design tool for engineers and geologists
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Handy hints
Use MSDA custom reports to report risk for multiple domains at
multiple confidence limits
Use MSDA custom reports to complete statistical comparisons of
simulation data against the original composite data
Import simulation and composite variograms into Minesight andcompare visually using ImportVariograms (ASCII) file
Block model statistical summaries by northing and easting can be
completed easily in MSDA via custom reports. Setup a filter tab
based on easting or northing and input bins based on appropriate
spacing. Use MSDART to manage large ASCII and CSV files.
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Minesight grade risk analysis
procedure summary
1. Define area(s) of interest.a. Area of interest should be larger than range of variogram
2. Extract data within domainsa. Code drillholes and block model to geological, structural, weathering and density domains
3. Statistics and variography per domain for each element.a. Complete statistical analysis of raw and declustered drillhole data using MSDA custom reports
b. Complete statistical analysis of composite data using MSDA custom reportsc. Complete statistical analysis of composite by easting, northing and RL using MSDA custom reports
4. Kriging Search Optimisation.a. Use kriging debug tool to evaluate kriging weights
b. Summarise regression slope values, simple kriging weights and kriging variance via MSDA customreports
5. Conditional Simulationa. Run sequential Gaussian simulation (Minimum of 100 simulations per node recommended)b. Select a node spacing which divides into panel / standard mining unit (SMU) evenly. (A minimum of
25 nodes per panel is recommended)
6. Simulation Validationa. Visual Checks
b. Statistical checks using MSDA.
c. QQ-plots
d. Simulation variogram checks against composite variogram model
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Minesight grade risk analysis
procedure summary
7. Reblock simulations to appropriate panel size or standard
mining unit (SMU).
8. Sort simulations per panel by grade and calculate grade range
and probabilities above cutoff at selected confidence limits.
9. Calculate grade risk using python scriptsa. Ensure simulation risk matrix is correct and within Minesight project
b. Complete statistical analysis of risk by domain and by northing, easting and RL using MSDA
10. Develop risk maps
11. Calculate risk per mining period, stope or region and evaluate
mine plan with respect to risk.
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Questions
Bring on the bulls!
Pamplona here I come!
Risk Management? Snowden can help.
For further details refer to www snowdengroup com