Discrete rate simulation for geostatistically informed economical evaluation of narrow vein Au-Ag ore processing

The use of conditional simulation to characterize mine plan uncertainty is gaining more use for assessment of risk in mining projects. While the development of grade uncertainty profiles is relatively straightforward and can be validated using standard geostatistical techniques, the addition of geological uncertainty to evaluate total risk remains problematic. Some of the problems associated with geological uncertainty methods include the clustering of data in favourable geologic units, difficulty in training image definition, and the inability to address change of support issues for categorical variables. Despite these obstacles the importance of geological uncertainty as a contributor to total uncertainty has prompted Newmont to explore and evaluate the use of various techniques (and combinations of techniques) on different deposit types. Two orogenic deposits of different geological complexity were selected for the study: Subika, a shear zone hosted deposit and Merian, a deposit containing gold mineralisation associated with quartz vein zones and stockwork within which are found higher-grade quartz breccia zones. Newmont trialed various categorical simulation approaches to determine the applicability of these methods for each deposit type and the effect of parameter choice on the width of the uncertainty interval. Some of the techniques that were trialed include Multiple Point Statistics (MPS) methods, Sequential Indicator Simulation using local probabilities (SIS-lvm) as well as variations of these methodologies. Goals of this study included: (1) an understanding of which techniques may work best in which deposit types, (2) an understanding of the intricacies of each method, (3) and an understanding of the effect each method used has on total uncertainty analysis. This paper presents a comparison of the various techniques and makes recommendations for their use in uncertainty analysis.

Indonesia is an agricultural country where the livelihood of the majority of the population is farming. Geographically, Indonesia is an archipelagic country that has enormous natural potential, both in the marine and agricultural fields. The agricultural sector is a sector that has an important role in improving the welfare of the entire population of Indonesia. Rice fields in Blang Beurandang Village still rely on irrigation from using rainwater to meet irrigation water needs. To increase rice yields, an irrigation network is needed that can flow water to the rice fields. It is necessary to conduct a feasibility study on the irrigation to be built so that it can be calculated from an economic point of view whether the project is feasible or not. This feasibility study is equipped with an analysis using the first method; Net Present Value (NPV), the second is the Benefit Cost Ratio (BCR) analysis, the third is the Internal Rate of Return (IRR), and the fourth is the Break Event Point (BEP). The results of this study are the value of the investment cost of the construction project or the initial capital of the irrigation canal which is IDR. 2,088,058,500, and the value of the operational and maintenance costs is IDR. 9,578,250 per year. The results obtained that NPV was IDR. 30,614,330, BCR was 1.01%, IRR was 5.88% > 5% and BEP occurred in the 22nd year and the 7th month. Based on the calculation results obtained from these four methods, it shows that the irrigation channel construction project has met the eligibility requirements and the project can be implemented or built. This means that the construction of irrigation networks in the village is feasible.

Objective: The purpose of the research is to show a specific process to perform the cost/benefit analysis in the social evaluation of public investment projects in the education sector, applying the net present value (NPV) and internal rate of return (IRR) profitability indicators, taking into account that the approach of the National System of Multiannual Programming and Investment Management (Invierte.pe) applies a different methodology as the cost/efficiency analysis, where it uses criteria such as the Present Value of Costs (PVC) and the Cost Efficiency Indicator (CEI). Theoretical framework: In order to present our proposal, we used as a theoretical framework, mainly the directives, instructions, procedures, and methodological guides proposed by the Ministry of Economy and Finance of Peru, which can be improved by considering the results of investment in education. Method: The research proposes a technique to evaluate investment projects in the education sector through the cost/benefit methodology instead of the cost/effectiveness methodology. Within the materials and methods, an education sector investment project approved by Invierte.pe was used, and we added cost/benefit analysis to estimate the profitability indicators NPV and IRR to carry out the social evaluation of the project. Results: The results show that the education project has a net present value of S/. 794,874.30 at social prices, and an internal rate of social return of 9.56%. Finishing the research, it can be concluded based on the results obtained that it is possible to incorporate the cost/benefit methodology in the formulation and evaluation of standard, simplified technical sheets and studies at the profile level of public investment projects in the education sector. Conclusions: It can be concluded that it is feasible the social evaluation of investment projects in the educational sector of the Peruvian state, through the cost/benefit methodology in the region and the country, by means of the profitability indicators NPV and IRR, obtaining a higher internal rate of return.

There are numerous methods while assessing efficiency of investment ventures that are based on discount technique and which take into consideration time value of money. All these methods have both good and bad sides. Hence the methods of net present value and internal rate of return represent basic methods in this group; we will focus our attention on those flaws which result in paradoxical situation in ranking projects and alternative decision-making while choosing specific investment variations. When it comes to independent projects there is a rule that if the project has positive net present value or in other words if the internal rate of return is higher than the rate of investment criterion, the project should be accepted; otherwise, if the net present value is negative or if the internal rate of return is lower than the rate of investment criterion, the project should be rejected; if the net present value is equal to zero or in other words if the internal rate of return is equal to the rate of investment criterion, one should behave indifferently towards such investment proposal. In case of choosing one among many projects that are available to a decision-maker while all of them are assessed with positive net present value and with internal rate of return higher than rate of investment criterion, should one give advantage to a project with higher net present value and less internal rate of return or to a project with less net present value and higher internal rate of return?.

Purpose of the study: This write up aims at exploring the causality between the timing of cash flows and contravention of Net Present Value and Internal Rate of Return as regards capital budgeting decision. Background of the study: It is neither too often found that Net Present Value and Internal Rate of Return are leading to neither contradiction nor have the topic been given much thrust. The endeavour is to bring this burning issue in light with the help of a practical case in an oil refinery factory. Methodology: Discounting technique has been used in the formulae to compute Net Present Value and Internal Rate of Return. Results: The study shows possibility of contravening results in case of mutually exclusive projects. Findings: It is found that due to severity of discounting factor, timing of cash flows of projects lead to contradicting results as depicted by Net Present Value and Internal Rate of Return.

Economic appraisal of shale gas plays in Continental Europe

Purpose – It is well known that internal rate of return (IRR) and net present value (NPV) rankings of mutually exclusive investments are sometimes inconsistent. This inconsistency, when it occurs, requires decision makers to choose between the two ranking methods. The purpose of this paper is to deduce sufficient conditions for consistent IRR and NPV investment rankings of mutually exclusive investments. Design/methodology/approach – Deductive reasoning is used to obtain the sufficient conditions required for consistent rankings of mutually exclusive investments. Findings – There are different sufficient conditions (methods) that can be used to resolve inconsistent IRR and NPV rankings. However, the different methods do not necessarily produce the same consistent rankings. In particular, different size adjustment methods and reinvestment rate assumptions can produce different IRR and NPV consistent rankings. This paper suggests the appropriate criteria for selecting a particular method for ranking mutually exclusive investments. Research limitations/implications – Like all deduced models, the results apply only to the set of assumptions and preconditions adopted in the model. Furthermore, the application is to ranking mutually exclusive investments. Practical implications – There is probably no other issue in the capital budgeting literature that has generated more attention and debate than the consistency (or lack thereof) between IRR and NPV rankings. This paper summarizes conditions that can be followed to resolve the conflict which should have near universal interest to those working in the capital budging area. This paper offers alternative methods for obtaining consistent IRR and NPV rankings which can be used to improve investment ranking decisions. The particular method used should depend on the decision environment. Guides for choosing the appropriate ranking method are described in the paper. Social implications – Significant decisions, projects, and investments are evaluated using either IRR or NPV methods. This paper shows that existing evaluation methods can lead to sub-optimal investment choices and provides an improved framework that facilitates better investment choices. Lacking an understanding of the sufficient conditions for IRR and NPV consistency – means that resource allocations have been made to investments and projects that are not optimal. Originality/value – To the best of the authors’ knowledge, the results are this paper have not been published nor are they available elsewhere. That said, this paper builds on important earlier work which is carefully cited and credited.

The traffic jam that occurred in the city of Bojonegoro on the Rajekwesi – MT road section. Haryono, the leading cause of problems in the area, is at intersections and meetings with railroad tracks. Building a flyover is one solution to congestion that occurs at railroad crossings. An economic feasibility study must be carried out to assess the characteristics of a development project. This study aims to determine how much profit and costs are obtained and the extent of its economic feasibility. The project that will be examined in this study is the construction of a flyover in Bojonegoro district. Then, the feasibility of the Flyover construction project is based on the calculation of Net Present Value (NPV), Benefit Cost Ratio (BCR), and Internal Rate of Return (IRR). The results of this economic feasibility analysis There are three alternative route selection that are associated with economic feasibility where the first alternative with NPV: 2,121,743,718,000, BCR: 12.7499 and IRR: 57 then the second alternative with NPV value: 1,733,795,057,000, BCR: 10.3771, IRR: 50% and the third alternative with an NPV value: 1,395,424,941,000, BCR: 6,978 and IRR: 37%. Based on the economic feasibility analysis using process hierarchy analysis, the first alternative was chosen with a score of 0.571. With the construction of the flyover, it is hoped that it can break up the flow of traffic on the Bojonegoro - Cepu - Nganjuk section to encourage economic growth, trade, and regional development in the Bojonegoro district.

Each simulation algorithm, including Truncated Gaussian Simulation, Sequential Indicator Simulation and Indicator Kriging is characterized by different operating modes, which variably influence the facies proportion, distribution and association of digital outcrop models, as shown in clastic sediments. A detailed study of carbonate heterogeneity is then crucial to understanding these differences and providing rules for carbonate modelling. Through a continuous exposure of Bajocian carbonate strata, a study window (320 m long, 190 m wide and 30 m thick) was investigated and metre‐scale lithofacies heterogeneity was captured and modelled using closely‐spaced sections. Ten lithofacies, deposited in a shallow‐water carbonate‐dominated ramp, were recognized and their dimensions and associations were documented. Field data, including height sections, were georeferenced and input into the model. Four models were built in the present study. Model A used all sections and Truncated Gaussian Simulation during the stochastic simulation. For the three other models, Model B was generated using Truncated Gaussian Simulation as for Model A, Model C was generated using Sequential Indicator Simulation and Model D was generated using Indicator Kriging. These three additional models were built by removing two out of eight sections from data input. The removal of sections allows direct insights on geological uncertainties at inter‐well spacings by comparing modelled and described sections. Other quantitative and qualitative comparisons were carried out between models to understand the advantages/disadvantages of each algorithm. Model A is used as the base case. Indicator Kriging (Model D) simplifies the facies distribution by assigning continuous geological bodies of the most abundant lithofacies to each zone. Sequential Indicator Simulation (Model C) is confident to conserve facies proportion when geological heterogeneity is complex. The use of trend with Truncated Gaussian Simulation is a powerful tool for modelling well‐defined spatial facies relationships. However, in shallow‐water carbonate, facies can coexist and their association can change through time and space. The present study shows that the scale of modelling (depositional environment or lithofacies) involves specific simulation constraints on shallow‐water carbonate modelling methods.

Sequential indicator simulation is a commonly used method for discrete variable simulation in 3D geological modeling and a widely used stochastic simulation method, which can be used not only for continuous variable simulation but also for discrete variable simulation. In this paper, the X Oilfield in the western South China Sea is taken as an example to compare the sequential indicator simulation method and the Indicator Kriging interpolation method. The results of the final comparison show that the results of the lithofacies model established by the Indicator Kriging deterministic interpolation method are overly smooth, and its coincidence rate with the geological statistical results is not high, thus cannot well reflect the heterogeneity of the underground reservoir, while the simulation results of the lithofacies model established by the sequential indicator stochastic simulation method can fit well with the statistical law of the well, which has eliminated the smoothing effect of Kriging interpolation, thus can better reflect the heterogeneity of the underground reservoir. Therefore, the sequential indicator simulation is more suitable for the characterization of sand bodies and the study of reservoir heterogeneity.

The time value of money (TVM) equation is a key equation in finance. It takes the form of an nth order polynomial having n roots. In finance it is normal to calculate and use only one root (interest rate). The remaining (n-1) roots are mostly complex or negative and they are usually discarded. This fact prompts a research project into whether the discarded, unorthodox roots have financial meaning or utility. The motivation to study the unorthodox roots lies in the econometric dictum that data is valuable and should not be discarded lightly. The research shows that the unorthodox rates matter. This paper contains an example of why they matter. Two of the most important criteria for choosing among capital investment projects are net present value (NPV) and internal rate of return (IRR). Although the two criteria often give the same rank order, in certain circumstances they provide inconsistent rankings and therefore suggest different investment decisions. The inconsistency sparked a debate about which criterion is better. The debate has lasted more than 100 years. The novel approach described in this paper takes into account all n solutions for the IRR. The result is a new equation for NPV. The equation provides a different perspective to the debate and suggests its resolution. The analysis reinforces the traditional view maintained in the literature that NPV is a reliable criterion while the orthodox IRR is not. The reasoning, however, does not rely on the ‘IRR pitfalls’ described in the literature. The analysis shows that two of the pitfalls are not true. Multiple IRRs do not represent a pitfall. This is because they are useful. The excesses of all IRRs over the cost of capital are the components of NPV. It is this fact that resolves the second pitfall of inconsistent ranking. NPV and the orthodox IRR can yield inconsistent rankings but NPV and the multiple-IRR criterion never do because they are identical.

Comparative risk evaluation and sensitivity analysis of the Libyan EPSA IV and its modified model LEPSA I

Large platforms, long horizontal sections, small well spacings and dense cutting have become economical and effective development means for tight oil reservoirs. Well spacing and fracture design are critical parameters impacting production and Internal rate of return (IRR) of tight oil reservoirs. In order to maximize the total stimulated reservoir area and fracture-controlled reserves, the well spacing and fracture spacing should be small enough. However, in order to minimize the chance of fracture hits caused by offset wells and the overlapping drainage area of a nearby well to avoid Asset spillover, the spacing well should large enough. Based on minifrac data and microseismic fracture mapping results, a natural/hydraulic fracture network was generated and input into an unstructured-grid-based discrete fracture reservoir simulation model. Its accuracy was calibrated with the well production history. For each group of fracture design and well spacing, well interference was determined by estimating ultimate recovery (EUR) difference between a single well and a middle well among multiple wells. Based on actual information of tight oil developments, the pressure interference were examined by field trail data and well spacing simulations. The real scenarios were selected to study effects of well spacing on EUR and ultimate IRR. Effects of reservoir permeability and fracture half-length on optimal well spacing were also analyzed. It was found that the decrease in Long-term EURs for different well spacings is a good indicator for well spacing optimization. Based on the reservoir simulation and economic analysis, the maximum IRR of the tight oil reservoir with permeability of 0.23mD can achieved when the well spacing is 260m. Meanwhile, the detailed results were also illustrated to show the effects of fracture half-length, reservoir permeability as well as oil price variation on IRR. The paper demonstrates an effective method and a workflow to optimize well spacing and fracture treatments design through integrating advanced multi-stage fracture modeling with discrete fracture reservoir simulation in the area of unconventional resource developments. Such optimization studies contribute to minimize operation cost and improve the economy of resource development.

Developers in the planning and development is also limited by government policy, a policy based on the occupancy of the balance in the housing, a problem for developers on the feasibility of the investments made in order to get the maximum benefit compared to the cost of construction of suchhousing. Research on Griya Field Development Project aims to determine the feasibility of investment in the existing Housing Development Programme and to determine the maximum profit generated as compared to the cost of development of investment in Housing Development Program. For the condition of the plan, this residential project at a cost of Rp.15.345.000.000, while for the existing conditions cost as much as Rp.12.845.000.000. The feasibility study is based on the financial aspects of using parameter Net Present Value (NPV), Benefit Cost Ratio (BCR), Internal Rate of Return (IRR) After research it is known, for repayment periods of 10 years (NPV Rp.1.364. 728 246, BCR and IRR 1,046 3,698%), for a period of installment / credit 15 years (NPV Rp.4.300.736.040, BCR and IRR 1,130 6.239%), and future installment/ credit 20 years (NPV Rp.4.300.736.040, BCR 1.182 and 6.698% IRR). So based on the condition of the plan, the investment feasibility studies on the financial aspects with parameters NPV, BCR, IRR based on a long period of installment/credit (with the value obtained by this project is not less than the installments to 10 years and not more than the installments to 20 years) is profitabl feasible (feasible). Sensitivity analysis of the calculation results, for future installments/credit 10 years can be seen that the investment will be worth the financial aspects if revenue fell 10%, fixed costs and revenues and expenses fell by 10%. While the sensitivity analysis for future installments/credit 15 years, a period installment/credit 20 years to remain profitable/feasible (feasible). Keyw ords : Feasibility Investments, NPV, BCR, IRR, Sensitivity Analysis

Empirical methods play an important role in the field of geomechanics due to the recognized complexity of the nature of rock mass. This study aims to analyze the applicability of empirical design methods in vein-shaped hydrothermal mining deposits (narrow vein) using Bieniawski and Barton classification systems, Mathews stability graphs, Potvin and Mawdesley geomechanics classification systems, and mining pit dilution based on the equivalent linear overbreak/slough (ELOS). In most cases, these methods are applied without understanding the underlying assumptions and limits of the database in relation to the inherent hidden risks. Herein, the dilutions obtained using the empirical methods oscillate between 8% and 11% (according to the frontal dimension), which are inferior to the operative dilution of the mine at 15%. The proposed model can be used as a practical tool to predict and reduce dilution in narrow veins.