A Probabilistic Block Economic Value Calculation Method for Use in Stope Designs under Uncertainty

Abstract

Uncertainty is intrinsic to mine design and planning and introduces risk into the process. Nonetheless, most mine design and planning processes have historically been undertaken as deterministic processes, often resulting in unrealistic mine designs and plans which potentially lead to the destruction of shareholder value. This paper presents a probabilistic block economic value (BEV) calculation approach to minimise the shortcoming of using deterministic BEVs, and evaluates the impact of uncertainty on stope designs. The probabilistic BEV calculation approach was applied to a synthetic geological block model of a gold mineral deposit. The uncertainty associated with BEV input parameters was simulated using Monte Carlo simulation to create equally probable economic orebody models which were then used to create stope designs at different levels of risk. The probabilistic approach generated 20% to 53% higher net present values (NPVs) compared to the deterministic approach within 30% to 70% probability range. This indicates that, for the case study deposit, blocks with approximately 30% to 70% probability of having positive BEVs are the ones that should be used for mine design and planning. The results demonstrate that incorporating uncertainty early in underground mine design and planning potentially creates higher-value stopes.