302ass7 - GY 302: Crystallography and Mineralogy Assignment...

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GY 302: Crystallography and Mineralogy Assignment 7: Assessing the Economic Potential of Ore Deposits Your Task : One of the important jobs that economic geologists do when employed with mining companies or government geological surveys like the USGS is to assess the economic potential of new ore deposits. Once the limits of the ore body have been delineated, it is up to the project geologists to determine if a profit can be made in establishing a mine at the site. Numerous factors need to be considered. How much ore is there? What is its grade? What rate of extraction/processing can be done? How long can the mine operate? What is the cost of processing? There are also startup costs. Last year, you could have easily borrowed money from a bank to get started. In today’s economy, even profitable mine sites are difficult to develop because of lack of funds (i.e., banks will not loan money). This exercise will introduce you the economic realities of mineralogy. Consider the diagram on the next page. It shows the extent of a copper ore deposit located in an isolated area of Papua New Guinea. You have been contacted by a local investment firm that is considering helping to fund the development of a small pit mine at the deposit. The junior mining company that found the deposit is a small Australian exploration firm (AusCo). They don’t normally produce the deposits they find (i.e., they are not a mining firm), but would like to work this one if it is
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302ass7 - GY 302: Crystallography and Mineralogy Assignment...

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