Production Forecasting

What is Production Optimization?

Production optimization is the application of geometallurgical data to predict and thus plan production throughput (tonnes per hour – tph and P80) and recovery quantitatively with a measured degree of accuracy and precision. It answers the questions:

• What recovery can be expected from the ore being processed?
• How should the ore be mined and processed to optimize recovery?
• When will production experience challenges?
• How can these challenges be addressed to minimize the effect on productivity and profitability?

On a longer term, the knowledge and experience gained from production optimization allows you to further optimize the mining and throughput relationship. Every production optimization contract consists of the same core steps:

• Sample
• Flotation and grinding tests to get geometallurgical parameters
• Merge geometallurgical parameters into the block model
• Forecast performance using simulation
• Value blocks, plan mining activities, reconcile forecast to production
• Refine and optimize

Why Use Production Optimization?

Benefits of production optimization with SGS include:

• Increased profitability and decreased expenditure through mine plan optimization, plant optimization, and reduction of inventory
• Ability to identify a decrease in production (due to the ore and not operational issues) and thus better manage shareholder expectation
• Decreased risk and increased bankability
• Access to the SGS global network of technical expertise

Components of Production Optimization

Testing: The Backbone of Production Optimization

The SPI (SAG Power Index) test for comminution and the MFT test for flotation are the backbone of SGS’ production optimization approach. In Year 1 SGS supplies, for installation on site, one SPI® Lite mill to enable you to perform your own SPI® Lite tests. The SPI® Lite test yields an SPI® value and a Bond Work index – from the same sample and the same short test. Use of the on-site SPI Lite mill enables you to do shorter term throughput planning and forecasting (monthly) to further increase the accuracy of longer-term forecasts (quarterly, annually).

The SPI® Lite test is always a supplement to, and not replacement for, full SPI® testing. Each year, a minimum of 50 samples would be sent to SGS for full SPI® testing. This core, high precision data is the foundation for the extension of the geometallurgical model while the SPI® Lite test provides the detailed in-fill data. The mill is regularly calibrated to the full SPI® test.

Technical features of production optimization with SGS include:

• Very high forecast precision because you can conduct unlimited SPI® Lite tests on site
• SPI® and Bond Work Index values from the same sample and the same test results in accurate reconciliations
• Optimization simulation training increases throughput and/or lowers costs
• Geometallurgical services address both forecast accuracy and precision

Geometallurgy

The first objective in production optimization, or planning is the creation of geometallurgy. The application of geometallurgical technology to production optimization results in a more rigorous and reliable forecast. Geometallurgical production forecasts consider geological, metallurgical, mineralogical and chemical influences on recovery, instead of simply relying on chemical assays.

Geometallurgy is created by populating the resource model with geometallurgical data derived from specific testing and then extracting the ore block information from the populated resource block model with the relevant information needed for simulation (forecasting or optimization).

SGS simulation packages such as CEET (Comminution Economic Evaluation Tool) and FLEET (Flotation Economic Evaluation Tool) are then used to generate production parameters such as tph and P80 and thus blocks can be valued and cash flow predicted. Once mined and milled, the actual production can be very accurately reconciled to the predicted models and the models tuned.

Production Optimization with SGS is Successful

A high degree of precision and accuracy is attainable with the SPI test and geometallurgy reconciliations. The graph below shows the reconciliation over a 1-year period for a SGS’ 5-year production optimization contract. In this case, the reconciliation of the grinding product size is expressed as absolute differences (in mm). These differences show an absolute variability range of ± 12 mm, which is outstanding and within the anticipated uncertainty.

The SGS Production Optimization Contract

Depending on your specific circumstances, a SGS Production Optimization contract can begin:

• At preproduction/prestart-up
• With the commencement of mining
• During any year of production

SGS provides production optimization services on a five year contract basis. Year 1 and Year 2 have fixed training and technical deliverables. Year 3 involves close supervision and in Years 4 and 5 we step back to provide review so that at the end of the contract you are self sufficient. Alternatively, SGS can provide the manpower to work with your team. How we envision these productions forecasting program is depicted below.