Direct Net Present Value Open Pit Optimisation with Probabilistic Models

Abstract

Traditional implementations of open pit optimisation algorithms are designed simply to find a set of nested open pit limits that maximise the undiscounted financial pay-off for a series of commodity prices using a single ‘estimated’ orebody model. Then, the maximum Net Present Value (NPV) open pit limit is derived by considering alternate (usually only best and worst-case) mining schedules for each open pit limit. Divorcing the open pit limit delineation from the NPV calculation in this two-step approach does not guarantee that an optimal NPV open pit solution will be found. A new open pit optimisation algorithm that considers the mining schedule is proposed. As a consequence, it can also account explicitly for commodity price cycles and uncertainty that can be modelled by stochastic simulation techniques. This state-of-the-art algorithm integrates Monte Carlo-based simulation and heuristic optimisation techniques into a global system that directly provides NPV optimal pit outlines. This new approach to open pit optimisation is demonstrated for a large copper deposit using multiple orebody models.