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Oct 20, 2023

1a You are considering a soil sampling campaign in a remote area for a new deposit. You plan on sampling 100 soil location for this phase of your exploration strategy. The cost to assay the samples involves transportation rates of $0.10/mile for each box of 10 samples. There are two labs that can assay the samples. Lab A has a fee of $200 per assay and is 500 miles away. Lab B has a fee of $160 per assay and is located 3,000 miles away. 

  1. Which lab (Lab A or Lab B) should you use for your first phase of sampling? Why?

2. Which lab (Lab A or Lab B) should you use if you want to double your sampling (200 samples instead of 100)? Why?

1b) Your first 100 soil samples yielded some interesting results along with some unique challenges. It turns out you might need to lot more sampling! You have an industry contact that says he can build a lab on site for your company. He is asking only $60,000 for the lab shack (including solar panels that can power the equipment). The lab equipment costs $200,000. You have someone in your company that can do the lab assay work at no additional cost to the company and certify the results as part of his salaried role. 

  1. Considering your answer from question 1, how many samples would this new lab need to process in order to justify building it?
  2. Your geologist doesn`t anticipate a soil sampling campaign of more than 1,000 samples. Would the lab save any money on assay tests for 1,000 samples? What`s the bottom-line cost to build the lab on location? (Subtracting the budgeted amount to be spent on assaying 1,000 samples with the lab you selected from question 1)
  3. The on-site lab could also be used for assays of drill samples and metallurgical tests galore. If these tests cost double what the soil sample assay tests cost, but involve no additional cost to the on-site lab, how many of these tests would the on-location lab need to perform before it is saving money to the overall sampling costs of the exploration project? (Including the 1,000 soil sample campaign)

1C) You decided to build the sample shack and your soil sampling led to the discovery of a very homogenous outcrop that has how been uncovered and trenched. Atmospheric conditions of the shack are 110 °F and 1 atm (too bad you didn`t have the money for A/C!). You decide to make use of a drum for a bulk density measurement using the Archimedes method. You carefully weight 4.00 t of hard rock taken from your trench and add it to the drum. The mass displaces 1.70 m3 of water.

  1. What is the density of the hard rock ore in your trench?
  2. What is the SG of the hard rock ore in your trench?

1d Aerial photogrammetry from a commercial drone pilot calculates the volume of the exposed outcrop from your trenching to be 1 km in length, 50 m in width and 2 m in depth. The average grade of the ore is 32% Mn and 20% Fe.

  1. Assuming a SG of 2.2 for the exposed outcrop, how many tons of Mn and Fe are contained in your exposed outcrop?
  2. According to your geologist, there is a fault gouge zone measuring 3 m wide that runs along the width of the outcrop, perpendicular to the strike. This material is waste. How many tons will be lost as a result?
  3. According to your metallurgist, 93% of the ore will be recoverable and processed into shippable ore. Considering this and your answer to part b, how many tons of ore can be shipped from mining this exposed outcrop?
  4. What is the current market price for the ore in USD/T?
  5. What would be the total value for the final amount of shippable ore at current prices?
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