ECONOMIC EVALUATION OF PORPHYRY COPPER DEPOSIT RESOURCE ASSESSMENT RESULTS FROM THE U.S. GEOLOGICAL SURVEY (USGS) GLOBAL MINERAL RESOURCE ASSESSMENT

Economic evaluation of undiscovered resource estimates is important for assessing the location, amount, adequacy, and availability of mineral supplies that might be economic to extract. Simplified engineering cost models, updated with a cost index, were used to estimate the economic fraction of resources contained in undiscovered porphyry copper deposits as predicted in the USGS assessment of global copper resources. The simplified engineering cost models can be applied to a variety of deposit types and mining methods, and require only limited design and setting parameters.

The USGS three-part form of assessment used for the global porphyry copper study relies on deposit-type-specific models of grades and tonnages and probabilistic estimates of numbers of undiscovered deposits. Distributions for grades, tonnages, and numbers of undiscovered deposits are combined using Monte Carlo simulation to estimate in-place undiscovered mineral resources. For each permissive area (tract), the assessment process provides estimates of undiscovered deposits at different confidence levels, their relative distribution by depth, a grade-tonnage model that is used to simulate the undiscovered resources contained in these deposits, and a mine cost setting parameter based on location and infrastructure features, all combined to estimate undiscovered economic resources. An economic filter for both open-pit and block caving mining methods was applied to the simulated undiscovered porphyry copper deposit resources.

Results of the Monte Carlo simulation and economic filter analysis provide an estimate of undiscovered resources, potential economic resources, Net-Present-Value (NPV), and the probability of failure (probability of no economic resource) for each tract. The mean NPV of undiscovered deposits can be discounted by the probability of failure and normalized by area to rank the relative economic potential of each tract.