Adjusting a Mine Cost

Service Model

A Note About MSOPIT Compatibility

Mine Cost Service Expressed Mining
Costs as Costs Per tonne of Ore
Mined
MSOPIT asks for Mining Costs per
tonne of what ever material you are
in the cell for
Can require some interesting twists
Example difference between 1:1 SR
mining a 2:1 SR mining is the cost of
waste mining

An Example Model

This is a 2001 edition for 20,000 tonnes per day of ore at a 1:1 stripping ratio

So Where Did it Come From?

This is their assumed salaried staff

This is their cost table with benefits

Multiply number of people by their salary and divide by tonnage and you have it.

So I Want to Adapt It How?

Start by working up your personn

table

Im going to assume the manager

And Superintendent are in Ruby
(1 of each)
Im going to assume my Engineers,
Geologists, their technicians and
Personnel managers,
And accountants can do a lot of
Work out of Fairbanks and fly in when
Foremen, Supervisors, Clerks, Secretaries I
Needed (Ill keep their staffing)
Assume will be 2 weeks on 2 weeks off so I
Need 2 sets.

Security this is a gold mine! I want at least 5

With 2 weeks off 2 weeks on 10.

Ill Go to My Handy Dandy

Spreadsheet

$1.12 per tonne (up a notch from MCS at $0.31)

Where Did You Get Those Salaries

and Benefits?
Mine
Manager
Superintendent
Foreman
Engineer
Geologist
Supervisor
Technician
Accountant
Clerk
Personnel Manager
Secretary
Purchasing Agent

Direct
Pay
Cost
$ 254,200.00
$ 137,700.00
$ 108,600.00
$ 129,200.00
$ 113,600.00
$
93,700.00
$
76,500.00
$ 100,800.00
$
54,700.00
$ 147,700.00
$
55,500.00
$
99,800.00

Total
Total
Total
Fringe
Burden
Annual
Cost
%
Cost
$73,798.53
29.03168 $ 327,998.53
$57,337.08
41.63913 $ 195,037.08
$52,642.45
48.47371 $ 161,242.45
$56,136.03
43.44894 $ 185,336.03
$53,658.95
47.23499 $ 167,258.95
$49,613.28
52.94907 $ 143,313.28
$46,116.52
60.28303 $ 122,616.52
$51,056.71
50.65149 $ 151,856.71
$41,684.58
76.2058 $
96,384.58
$58,750.08
39.77663 $ 206,450.08
$41,847.22
75.40039 $
97,347.22
$50,853.41
50.95532 $ 150,653.41

From my wages and benefits spreadsheet

Now What About MSOPIT

Compatibility
Notice that I charged all salaried costs to the ore.
That means waste mining would incur none of these
costs. REALLY!!!?

When a cost is not directly linked to something you

can get lots of accounting arguments
I could go the easy way and charge all tonnes equally
I could argue that I will likely be a lot more fussy with
geology and engineering around the ore grade control
You may have to decide
My rationale since I mine ore and waste at the same time
delineating differences and handling of one is vital to the other
Im going equal division
56 cents per tonne toward both ore and waste mining cost

You Can Well Imagine Im Going to

Do Similar to Get My Labor Cost
Rotary drills 5 operators
And 5 machines (obviously
One shift for drilling)

Shovel Operators 6
With 2 shovels obviously
They are doing 3 shifts

Trucks 8 with 21 drivers

(obviously assuming 1 dow
And 3 shifts)

12 equipment items and 16

Operators. Most on 1 shift bit
On 2nd

Sizing Up My Crew
Suppose I need 3 sets of 13 trucks
and 1 loader
2 shifts 26 drivers
But 2 weeks on 2 weeks off 52 drivers
12 Shovel operators by same logic

Suppose I need 6 drillers and 3

helpers on one shift
2 sets implies 12 drillers and 6 helpers.

Some General Scaling

Equipment does things like maintain roads and
deliver supplies
I wont always need water trucks but probably snow
plows instead
Since my haul distances are over twice as big I need
twice the people
16 leads to 32 for my case 2 weeks off 2 on means 2 crews
64 operators

Utility Operators Ill need a big light network

because of all the dark hours
Double their crew 3 leads to 6
2 weeks on means 2 crews 12 people

More Scaling
My equipment fleet is about double
theirs
Double mechanics 17 leads to 34
2 crews leads to 68

I wont quite double the laborer

support
Go with 100

Spreadsheet My Manning
Table

Came out to a whopping $4.59/tonne

(quite a switch up from $0.88/tonne)

Now Im Back to
Compatibility
I just charged everything to ore.
If all costs for mining ore and waste
are the same I could divide by 2
just like I did with indirect costs.
But what if costs are different?

Suppose
My cost to haul to the gyratory crusher by the mill and
dump in is $2.45/tonne (and $0.31 to load) your FPC
truck study should be able to deliver numbers
My distance to the dump is greater and a trip costs
$2.95/tonne (and $0.31 to load)
Also at the dump I have to employ 2 dozers to level and
spread material (0.27/tonne)

Of course these costs involve both labor, equipment

operation and fuel
One approach is to pull out the part of the labor associated
with trucking and two dozers
Some may want to try to split road maintenance crews too
(since it is an indirect cost one could fight Ill split even)

Adjustments

Pull out my truck operators $4,170,000

Pull out $370,000 for 4 dozer operators
Pull out the Shovel Operators $1,191,000
Leaves $24,451,000 in wages and benefits
Divided by ore and waste tonnage $1.86/tonne

Warning The labor cost per hour for a truck driver in FPC
needs to be the same as the cost of the labor I removed.
Ie a driver cost $81,000 per year in the wage and benefit
spreadsheet and works 1,610 hours the cost per hour in FPC should
be $50.31/hr
You might be talking to Gage and Nick about this.

The Cable Shovel Costs used in FPC need to be right for the
operator and the cost of electricity

So Where Am I At So Far?
Ore
Salaried $0.56/tonne
Labor (part) $1.86/tonne
Trucking $2.45/tonne (there will be a cost to recover ore for
processing but that will be a processing charge)
$0.31/tonne loading
$5.18/tonne

Waste
Salaried $0.56/tonne
Labor (part) $1.86/tonne
Trucking $2.95/tonne
Loading $0.31/tonne
Leveling and Spreading $0.27/tonne
$5.95/tonne

Now for Supply

st of this stuff is right off of Kyles blasting supplies cost Kyle said his non-labor b
t was $2.23/tonne.

t leaves Diesel Fuel and Electricity

Obviously I wont do diesel fuel for trucks
Dylan knows the cost/kwh for electricity
I have electricity for my shops, warehouses and offices
I also have an extensive light system in my mine

I may need to do some

research
I could get the cable shovel electric from
the rule of thumb
0.6 kwh/cubic yard of loose material
Given I know my loose volume of rock that
will be easy

Pit Lights and Warehouses will require me

to do a side plan and estimate
Dont you hate it when extra work shows up
Ill probably want to add 10% to my electric
use for little things I missed

Diesel Fuel
Some rules of thumb a big road grader can
maintain about 4 to 6 miles of haul roads during
a 40 hour work week
You could try itemizing dozers, trucks etc or you
could take MCS numbers
For blasting agent trucks you could talk to Kyle
For water trucks you could probably assume that
water trucks and snow-plows are alternates and
needed in the same amount as the road graders
You can usually get fuel consumption from the
manufacturer

Sundries
I may want to just scale from the
$0.22/tonne in the MCS model
Suppose the ratio for everything else
was 3 times higher than the old cost
model
I just make the sundries $0.66/tonne

Observations
Some parts of the cost estimate are
clearly better than others
If there is an area where your
numbers are rather flakey
How big a percentage of the cost does it
appear to be? (1% maybe dont mess
with it)
30% maybe you need to inform the
instructor of the need to more closely
study something out.