In 1985, ZC Mines (now Pasminco South) had been unprofitable for some years due to a combination of high operating costs, low metal prices, low head grade and an aging and inadequate mining infrastructure. However, the resource of metal in the ground was still of world class, even after some 80 years of mining. A major study, which was to be of two years duration, was therefore commenced to establish a practical and profitable long term mining strategy and to cost the infrastructure options needed for its support and thus form the justification for a capital expenditure program to take the mine profitably into the 21st century and its second century of operation.
This paper discusses the rationale behind the methodology adopted and the nature of the results achieved in one aspect of the study - the determination of the mineable resource and the relationship between the head grade/quantity of the economically mineable resource and the variables of cut-off grade, cost structure, annual production rate and metal prices/exchange rates. The basis of the study was the designing of some 5000 scopes to mine out the entire resource for a range of cut- off grades and the assembly of the detailed physical data thus obtained in a stope-by-stope data base for financial and other analysis. Those scopes which were shown to be economically mineable were then scheduled for two optimum annual production/cut-off grade/metal price combinations to provide life-of-mine cost and value of production cash flows.