NSR Factors Calculation Example

Author Updated George McIsaac, Ph.D., ing., P.Eng March 3, 2011

Spreadsheet describing the steps for the calculation of the Net Smelter Return and NSR factors for copper-zinc ore sent to a mi copper and a zinc flotation circuit

In this example, detailed calculations are done for estimating the NSR factors of each metal sold for each concentrate and smel overall NSR factors of each metal is then calculated and the value of the ore is estimated. The mill sells the copper concentrate to two smelters, 35% to Smelter A and 65% to Smelter B and all the zinc concentrate is sold to Smelter C

This spreadsheet is provided as an educational tool and is believed to be free of errors. It is intended to b used as an example of how to calculate a Net Smelter Return. The author will not be held responsible for improper use or abuse, or for errors resulting from its application. The user is encouraged to understand principles described here and to develop his or her own spreadsheet.
Worksheet
met bal individual smelters NSR factors NSR flowsheet

Description
metallurgical balance: estimation of quantities and quality of the concentrates produced from a given mill feed. estimation of the NSR factors for each metal sold to the smelters estimation of the overall NSR factors for each metal. Also, sensitivity of the NSR factors as a function of metal prices Estimation of the value of the ore. flowsheet of ore and concentrates

ctors for copper-zinc ore sent to a mill with a

sold for each concentrate and smelter. The

rB

ee of errors. It is intended to be will not be held responsible for its is encouraged to understand the

lity of the concentrates produced

e smelters

Also, sensitivity of the NSR

Tailings

Cu Zn Au

Copper Concentrate Smelter A Smelter B Zinc Concentrate

Smelter C

Metallurgical Balance

Tonnes

Cu (%) (tonnes) 2.32% 6,380

Au (g/t) (ounces) 2.55 22,546

Mill Feed Grades Metal Contained Copper Concentrate Mill Recovery Tonnes of ore per tonne of concentrate Grades Metal Contained Zinc Concentrate Mill Recovery Tonnes of ore per tonne of concentrate Grades Metal Contained 10.35 26,571 3.96 3,382 275,000

85% 10.65 25,824 21% 5,423

73%

19.93 16,549

15%

Zn (%) (tonnes) 5.69% 15,648

90%

53% 14,083

Copper concentrate sold to Smelter A Copper Gold Tonnes of Conc. 25,824 tonnes Metal in Conc. 5,423 tonnes Metal per Tonne of Conc. 0.21 tonnes 463 Lbs Metal Deduction Payable Metals Metal Price Value of Metal 24.26 439 1.50 658 Lbs Lbs $ / lb $ / t. conc.

Copper concentrate sold to Smelter B Copper Gold 25,824 5,423 0.21 463 24.26 439 1.50 658 tonnes tonnes tonnes Lbs Lbs Lbs $ / lb $ / t. conc.

Zinc Concentrate sold to Smelter C Zinc Gold 26,571 14,083 0.53 1169 0 1169 0.50 584 tonnes tonnes tonnes Lbs Lbs Lbs $ / lb $ / t. conc.

16,549 ounces 0.64 ounces 19.9 grams 2.5 17.4 $925 518 grams grams $ / oz $ / t. conc.

16,549 ounces 0.64 ounces 19.9 grams 2.5 17.4 $925 518 grams grams $ / oz $ / t. conc.

3,382 0.13 4.0 1 3.0 $925 88

ounces ounces grams grams grams $ / oz $ / t. conc.

Value of Metal Deduction and Charges Treatment Charge (T/C) Transport Loading & Representation Penalties (As, Sb, Bi, Hg) Price Participation Subtotal Deductions Refining Charges (R/C) Value After Deductions and Refining tonnes of ore per ton. conc. Value per tonne of Ore Grade of Ore NSR Factor

Copper concentrate sold to Smelter A Copper Gold 658 $ / t. conc. 518 $ / t. conc.

Copper concentrate sold to Smelter B Copper Gold 658 $ / t. conc. 518 $ / t. conc.

Zinc Concentrate sold to Smelter C Zinc Gold 584 $ / t. conc. 88

$ / t. conc.

75 34 5 0 0 114 0.075 33 511 10.65 48.01 2.32% 20.69

$ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / lb $ / t. conc. $ / t. conc. 6 3 515 10.65 $ / t. ore 48.37 2.55 $/% 18.97 $ / t. ore g/t $/g $ / oz $ / t. conc. $ / t. conc.

80 45 5 0 0 130 0.08 35 493 10.65 46.30 2.32% 19.96

$ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / lb $ / t. conc. $ / t. conc. 6 3 515 10.65 $ / t. ore 48.37 2.55 $/% 18.97 $ / t. ore g/t $/g $ / oz $ / t. conc. $ / t. conc.

135 26 3 0 0 164 0 0 420 10.35 40.61 5.69% 7.14

$ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / t. conc. $ / lb $ / t. conc. $ / t. conc. 6 3 85 10.35 $ / t. ore 8.18 2.55 $/% 3.21 $ / t. ore g/t $/g $ / oz $ / t. conc. $ / t. conc.

NSR Factors
Concentrate Copper Copper Copper Zinc Total NSR factors C Smelter A B Relative sales 35% 65% 100% 100% 20.22 Copper ($ / % Cu) 20.69 19.96 20.22 Gold ($/gram) 18.97 18.97 18.97 3.21 22.17 7.14 7.14 Zinc ($ / % Zn)

Sensitivity to metal prices

Copper base price Copper price ($/lb) $1.50 $/lb NSR factor ($/%) $20.22 $11.34 $15.78 $20.22 $24.66 $29.10 $33.54 $37.98
Copper NSR factor ($/%) $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 $1.00 $1.50 $2.00 $2.50

Copper

$1.00 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50

Copper Price ($/lb)

Gold base price Gold price ($/oz)

$925 NSR factor ($/%) $22.17 $16.72 $17.33 $17.93 $18.54

($/oz)

$30.00 $27.50 Gold NSR factor ($/gram) $25.00 $22.50 $20.00

700 725 750 775

Gold

Gold NSR factor ($/gram)

800 825 850 875 900 925 950 975 1,000 1,025 1,050

$19.14 $19.75 $20.36 $20.96 $21.57 $22.17 $22.78 $23.39 $23.99 $24.60 $25.20

$20.00 $17.50 $15.00 $12.50 $10.00 $700

$800

$900

$1,000

$1,100

Gold price ($/oz)

Zinc base price Gold price ($/oz)

$0.50 NSR factor ($/%) $7.14 $5.15 $7.14 $9.12 $11.11 $13.09 $15.08 $17.06

($/lb)
$18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 $0.40

$0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00

Zinc NSR factor ($/%)

Zinc

$0.60

$0.80

$1.00

Zinc price ($/lb)

Value of Ore
Copper Mill feed grade NSR Factors Value per tonne of ore 2.32% 20.22 46.90 $/% $ / t. Gold 2.55 22.17 56.54 g/t $/g $ / t. Zinc 5.69% 7.14 40.61 $/% $ / t.

Net Smelter Return

144.06 $ / tonne