In anticipation to meet increased production requirements, advise on the extent of additional fleet and capex requirements, identify kpi’s and propose solutions to optimize mining operation

The project was assigned by one of Africa’s largest open-pit gold mines. Following a move from contract to owner operator mining the Client acquired the contractor’s fleet consisting of more than fifty 90 ton rigid trucks with matching shovels and support equipment. Tacmin was assigned to advise on capital recommendations and the number of 240 ton truck fleet(s) required to supplement the existing fleet and meet the specified production requirements.

Tacmin acquired the geological model with medium term design strings, proposed mine plans and a production schedule. Once imported into Vulcan mining software, our experts generated haul route profiles for each rock type for the entire period and compiled a bill of quantities with corresponding activity and bench volumes that represent the material movement in accordance with the production schedules provided.

With fleet selection and production software , for each route our experts determined the number of trucks per shovel using the existing truck and shovel payload, weight and size configuration with one additional 240 ton truck fleet and computed the capable fleet productions per route using practical mine site and equipment input parameters.

Using construction management software, our experts applied Tacmin’s comprehensive Life Cycle Costing database for each piece of equipment, applied the aforesaid simulated production, and estimated the corresponding unit rate for each bill activity from first principles and determined the total project values for the one and two 240 ton truck fleet scenarios.

The aforementioned exercise provided two sets of mining cost estimates in the format of a detailed bill of quantities that represented the medium term mining designs and corresponding project values. Each estimate, which contained a detailed breakdown of capital and operating costs based upon Life Cycle Costs of each machine (i.e. maintenance and repairs, consumables, parts, labour, fuel, GET’s, tires, etc.) inclusive of drilling and blasting (i.e. drilling equipment as before and blasting broken down in explosives and accessories) with manpower broken down into salaries and wages. Aforesaid base data which was then applied to determine:

●  With construction management software the utilization of each resource unit / component and compared with the total working hours associated with the duration of the      
medium-term mine plan and designs provided. Carried out aforesaid exercise on both estimates and determined through benchmarking which option best meets with the total ore and waste production demand.

●  With construction management software, scheduled each activity in accordance with its corresponding capable production, determined the time for each activity and scheduled the ore activities to be mined once the corresponding waste was removed (i.e. build a detailed time schedule Gantt Chart with links and task dependencies). Once the aforesaid Gantt Chart was finalized, our experts allocated ore and waste fleets to each mining activity and reconciled the allocated fleet hours to match the working roster.

●  ​​​​​​​Enhanced the project estimate bill of quantities for both scenarios and incorporate ore sales and all other non-mining cost (i.e. processing, selling cost, royalty, transport, etc.) and scheduled the same in accordance with the ore mining requirement in anticipation to conduct a cash flow analysis. Carried out a quantity and value forecast (i.e. new
production schedule) followed by a cash flow exercise and determined the NPV’s for both options in anticipation to analyze which option best meets the ore production
 requirements.

The aforementioned exercise proved that the new production schedule met the ore requirements when the existing fleet was supplemented with one 240 ton truck fleet as opposed to two fleets as originally anticipated by the owner. A capital saving which equated to approximately US$20 million.

Evident from the study was that the selected option was tested, simulated and proved to be economically viable, practical and optimal. As such the Client acquired the additional 240 ton truck fleet with matching shovel and Tacmin’s proposed production schedule was implemented.