1. SCENARIO BASED ANALYSIS OF IPCC TRADE-OFFS I NEILSEN, N TYSON IPCC2013 CONFERENCE 14TH OCTOBER 2013 PRESENTER: NEIL TYSON, BUSINESS DEVELOPMENT MANAGER

2. Deswik Are Answering Industry Demands For IPCC Planning Software Multiple presentations in recent years called for mine planning software that is capable of effective IPCC planning Deswik commenced work in February 2013 on addressing this need Our approach includes forming a partnership with industry experts RWE to ensure the result is fit for purpose This presentation illustrates techniques that use the first results of this endeavor 3. Presentation SummaryMore scenarios with greater detail performed at the early stages of a study will add value Models must include all aspects of the mining system both IPCC and conventional Models must schedule dump construction and interactions between fleets and dumps Find the fatal flaws and value traps before detailed design & specification begins 4. Better Planning Will Help IPCC Succeed Turnbull & Cooper, 2010 IPCC needs more planning efforts in the equipment selection, the mine development and the waste dump planningBearman & Munro, 2010 It is believed that the ability to analyse IPCC to the same degree as the usual mining methods will provide a fuller picture of the total value proposition for IPCC and an improved idea of the true comparison against more traditional mining methods And many more Take-Aways 1. Mine Development & Waste Dump Planning 2. Total Value Proposition Is The Key 5. IPCC Study RoadmapMore Effort In Earlier Studies 6. Improving Outcomes By Learning From Iterations There is no big red button Too many degrees of freedom to reach an optimised solution in reasonable time using computational techniques Learnings from initial scenarios inform further scenarios Not a dartboard or drill pattern of scenarios learning and adapting based on results Act like a genetic algorithm for optimization: o Retain high performing components from scenarios o Test for variation across a range of starting conditions o Benchmark against a common metric when a line of enquiry doesnt perform, register the lesson and then move on 7. Increasing Detail Of Scenarios Is Valuable Find the critical point where high level assumptions meet the reality of: o Pit design o Mine sequencing o Resource scheduling o And waste dump progression Identify if and when the planned system fails o Operating sequences become unachievable o Spoil dump progression interrupts, preventing mining from progressing at full pace o Interactions cause unforeseen issues 8. Scenario ConstructionThe goal is always to construct full-mine scenarios, to compare apples with apples 9. Considerations & Goals Of Scenario Iterations Example global considerations o Finding fatal flaws o Eliminating fatal flaws o Optimising capital expenditure o Optimising life of mine operating costs o Capturing implications of all interactions between IPCC and conventional systems Commodity Specific Consideration Examples o Hard Rock inclusion of waste in pit-shell vs optimising conveyor cost and performance o Hard Rock bench advance rates, pushback sizes o Coal interaction between truck dump and conveyor dump 10. Considerations & Goals Of Scenario Iterations Qualitative and quantitative evaluation of the scenarios is an important goal: o How achievable is the scenario NPV? o Is the sequencing stable? o How responsive is the scenario to variation of input assumptions? 11. Summary So Far: Construct mine plan scenarios comprising both IPCC and conventional fleet in a single plan Calculate the Total Value Proposition Build in detail, but replicate across entire LoM Iterate scenarios o Learning from each new set of results o Discover how the planned systems interact micro and macro o Qualitatively judge scenario achievability o Zero in on value drivers, avoid value trapsIdentify which scenarios are worthy of detailed design & optimisation 12. Lets Look At An Example: This is a fictional dataset Large OC coal mine, thermal / coking products for export A recent acquisition, being reviewed for expansion potential Currently 8 Mtpa, infrastructure sized for CAT793 fleet Review 4 broad strategies o Shovel with fixed IPCC o Shovel with semi-mobile IPCC o Shovel with fully mobile IPCC o Ultra class T&S 13. Pit Section D OB avg 28m (range 0.5-100m) W OB avg 23m (range 0.5-65m) S OB avg 50m (range 0.5-90m) K OB avg 55m (range 14-85m)D SEAM S SEAM W SEAMK SEAM 14. Pit Layout Current pit is approximately 10km long, 8 pit areas serviced by 10 ramp sections HW ramp arrangement for D,S seams LW ramp with bridge installed for K seam to W seam level 15. Seam Sections D SEAM D average depth of 55m up to 100m Raw Ash averages 42% (Range 24-49%) Washed Ash averages 16% (Range 15-17%) Yield averages 42% (Range 27-74%) Thickness of 2.1m (max 2.7)S SEAM S average depth of 91m up to 200m Raw Ash averages 39% (Range 18-52%) Washed Ash averages 17% (Range 16-18%) Yield averages 56% (Range 26-92%) Thickness of 3.1m (max 3.7) 16. Seam Sections W SEAM W average depth of 110m up to 220m Raw Ash averages 34% (Range 25-42%) Washed Ash averages 12% (Range 9-15%) Yield averages 56% (Range 43-66%) Thickness of 2.9m (max 3.1)K SEAM D average depth of 170m up to 270m Raw Ash averages 35% (Range 27-42%) Washed Ash averages 12% (Range 9-15%) Yield averages 58% (Range 44-69%) Thickness of 4.0m (max 4.4) 17. Preliminary Scenario List First Pass Scenario NameDetails Fully Mobile IPCC on Conv Bench2&3. Ramps 2 shv per IPCC Fully Mobile 16Mtpa year until peak 8-9shv, 16Mpta. LHS run ramps closed, 9SHV MinRLMinDist MinRL Min Dist, no highwall ramp Fixed IPCC on Conv Bench2&3. Ramps 2 shv per year IPCC Fixed 16Mtpa 9SHV until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL MinRLMinDist Min Dist, no highwall ramp Semi Mobile IPCC on Conv Bench1,2&3. Ramps 2 shv per IPCC Semi Mobile 16Mtpa year until peak 8-9shv, 16Mpta. LHS run ramps closed, 9SHV MinRLMinDist MinRL Min Dist, no highwall ramp T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no TS 16Mtpa 9SHV MinRLMinDist highwall ramp, 20deg dump T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinDist Min Cycle Time, TS 16Mtpa 9SHV MinDistMinCT no highwall ram, 20 deg dump 18. Create T&S Scenario T&S case including landform & haulage model Includes full reserve set, aggregation, loss and dilution calculations, through to ROM and Product tonnages and revenues Detailed sequencing at the block level Full landform & haulage model determining detailed truck haulage requirements and costs over time Financial model to calculate NPV 19. Create T&S Scenario 20. IPCC and Conventional Fleet In 1 Model IPCC material allocation Eg FM IPCC: IPCC takes 2 x 45m horizons T&S removes all other coal and waste, above and below these horizons 21. Schedule Hybrid Scenarios Production and dump schedules includes full interaction between IPCC horizons and conventional T&S horizons 22. Schedule Hybrid Scenarios Production and dump schedules includes full interaction between IPCC horizons and conventional T&S horizons 23. Undertake Analysis Assess conveyor requirements Deswik Landform & Haulage models and reports every source, path (conveyor or haul) and destination, as well as different path detailed metrics 24. Undertake Analysis Assess conventional fleet requirements What are the effect of different dumping strategies on the T&S cases? Base Case Dump Strategy Comparison4000003500003500003000003000002500002500002000002000001500001500001000001000005000050000Total Coal Product TonnesMinDistMinCTMajor Truck Shovel Truck Hours1/01/20461/01/20451/01/20441/01/20431/01/20421/01/20411/01/20401/01/20391/01/20381/01/20371/01/20361/01/20351/01/20341/01/20331/01/20321/01/20311/01/20301/01/20291/01/20281/01/20271/01/20261/01/20251/01/20241/01/20231/01/20221/01/20211/01/20200 1/01/20190MinRLMinDistMajor Truck Shovel Truck HoursCoal Product Tonnes450000400000Truck Hours450000 25. Undertake Analysis Assess capital, operating cost and revenue differences between scenarios 26. Find Value Drivers & Value Traps Eg Value Trap: T&S dump build progression is deemed too steep for depth of pit extra layback will be required for access ramps and other dump build considerations 27. Find Value Drivers & Value Traps Eg Value Trap: Conveyor Cases Dump design maximises dump room near conveyor bridge. This in turn requires a steep conveyor change in direction, which will greatly degrade system performance 28. Identify Fatal Flaws Eg Value Trap: FMIPCC Initial Scenario Dumping sequence fails towards the deeper parts of the deposit. o When the waste allocation changes proportion, the stripping sequence no longer releases enough dump room each strip o The IPCC spreaders catch the advancing dump face o 100Mbcm overflows. o The systems are mismatched, and adjustments are required 29. Identify Fatal Flaws 30. Summarise Learnings From Scenarios What did we learn from the first iterations? First Pass Scenario NameDetails Fully Mobile IPCC on Conv Bench2&3. Ramps 2 shv per IPCC Fully Mobile 16Mtpa year until peak 8-9shv, 16Mpta. LHS run ramps closed, 9SHV MinRLMinDist MinRL Min Dist, no highwall ramp Fixed IPCC on Conv Bench2&3. Ramps 2 shv per year IPCC Fixed 16Mtpa 9SHV until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL MinRLMinDist Min Dist, no highwall ramp Semi Mobile IPCC on Conv Bench1,2&3. Ramps 2 shv per IPCC Semi Mobile 16Mtpa year until peak 8-9shv, 16Mpta. LHS run ramps closed, 9SHV MinRLMinDist MinRL Min Dist, no highwall ramp T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no TS 16Mtpa 9SHV MinRLMinDist highwall ramp, 20deg dump T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinDist Min Cycle Time, TS 16Mtpa 9SHV MinDistMinCT no highwall ram, 20 deg dumpFatal Flaw?NPV (AU$M)Nn/a460607N604N793 31. Iterate Using Learnings As Basis First Pass Scenario NameSecond Pass Scenario NameIPCC Fully Mobile 16Mtpa 9SHV MinRLMinDist IPCC Fully Mobile 16Mtpa 9SHV MinRLMinDist Mod Dumps IPCC Fixed 16Mtpa 9SHV MinRLMinDist IPCC Semi Mobile 16Mtpa 9SHV MinRLMinDist IPCC Semi Mobile 16Mtpa 9SHV MinRLMinDist ModSchedTS 16Mtpa 9SHV MinRLMinDistTS 16Mtpa 9SHV MinDistMinCTTS 16Mtpa 9SHV MinRLMinDist TS 16Mtpa 9SHV MinDistMinCT Centre RampsDetails Fully Mobile IPCC on Conv Bench2&3. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no highwall ramp Fully Mobile IPCC on Conv Bench2&3. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no highwall ramp, modified dump design Fixed IPCC on Conv Bench2&3. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no highwall ramp Semi Mobile IPCC on Conv Bench1,2&3. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no highwall ramp Semi Mobile IPCC on Conv Bench1,2&3. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinDist Min CT, no highwall ramp, mod schedule T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinRL Min Dist, no highwall ramp, 20deg dump T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run ramps closed, MinDist Min Cycle Time, no highwall ram, 20 deg dump T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run centre ramps open, MinRL Min Dist, no highwall ramp, 17 deg dump T&S scenario. Ramps 2 shv per year until peak 8-9shv, 16Mpta. LHS run centre ramps open, MinDist Min Cycle time, no highwall ramp, 17 deg dumpFatal Flaw?NPV (AU$M)Nn/a598460607750N604N793651872 32. Map Value Across Scenarios Other Analysis Options Iterate modified pit design suited to IPCC strengths and deposit material balance e.g. change direction of mining, mine along strike Re-iterate Lerchs-Grossman or pit margin ranks o Write actual costs from schedule back onto reserve block solids o Re-calculate margin rank, &/ or re-run solids-based LG Examine sensitivity of scenarios to truck, conveyor, sequencing performance o How vulnerable is the scenario to changes in inputs? o Cost + overall scenario breakdown 33. Thank You Thanks to our partners RWE for advice and guidance Questions? 34. Our futureThough Deswik is a relatively young company, our heritage of 20+ years of delivering mine planning software solutions means that we have come a long way in a short period of time.And We Have Only Just Begun Our culture of high performance and innovation will ensure we remain a formidable force in the industry for a long time to come.