Gerald Whittle

CEO, Whittle Consulting

Since 1999, Gerald has been the CEO of Whittle Consulting. In this role, Gerald undertakes optimisation studies and model design, business analysis, management reporting and client presentations. He conducts Strategic Assessments and Enterprise Optimisation studies for a range of major, midcap and junior mining companies. These studies have spanned almost all commodities, including pits and/or underground mining, complex minerals processing streams and marketing channels.

Presentation title

Commodity Prices Have Changed. How have you adapted?  

Headline: "Commodity prices have increased significantly in the last 12 months. Have you adjusted your mine plan yet? Have you adjusted it in the right way?"

Abstract

Commodity prices (especially gold) have increased dramatically in the last 12 - 18 months - beyond levels mining companies ever contemplated in their sensitivity analysis. e.g. If you are still operating to a mining and processing plan that was designed and hopefully optimised for a gold price of say USD1800/oz, and the current gold price is over USD4000/oz - not doubt you are making more money, but are you missing an opportunity to do even better? Probably.

Redoing your LOM plan for a project or operation once a year (if in fact you do that) will not suffice with such market volatility. You need to be more agile.

If you have updated your LOM plan for higher commodity prices, have you changed it in the right way? 

1. "Re-optimised" your plan using conventional methods i.e., larger pits/UG, lower break-even cut-off. Applying these changes will likely make your plan worse, reducing metal production whilst the metal prices are high!
2. "Re-optimised" your plan properly using Activity Based Costing, Theory of Constraints and reconsidering all operating strategies. What should happen to pit phasing, mining rates, cut-off to the plant, stockpiling, grind size, product spec, capital scaling of components of the system?

Complex questions with interesting answers. 

An example will be shown contrasting the difference between updating a LOM plan the wrong way versus the right way in the face of increasing commodity prices.