The average grade from that set of results is a little over 3g/t which is over the current reserve grade of 2.7g/t, which means the mine just keeps giving at the same grade to depth of over 700m.
14 year LOM is just the start.
It's not just the automation either it is the mining method that makes the feed grade competitive as I've been trying to spell out for a long time. The sub-level cave method is used to mine bulk commodities like iron ore UG so is competitive with open cut mining methods or else mining iron ore UG just wouldn't be possible.
Read my previous post on the iron ore mines in Sweden where iron ore is being mined at depths of over 1km using the sub level cave mining method (the same method being adopted at Syama).
At Kiruna in Sweden the ore body is 80m wide and 4km long. The mine is a real beast with a 26Mt/year run of mine capacity which is about 10.8 times bigger than what is currently trying to be achieved for Syama UG and 6.5 times bigger than the potential maximum scaling (of 4Mt/annum) that the Syama UG mine might be able to achieve in the future. Kiruna is also highly automated. Below is a small extract explaining the workings of the UG mine at Kiruna.
"Ore is mined using sublevel caving, with sublevels spaced at 28.5m vertically. With a burden of 3.0-3.5m per ring, this yields around 8,500t for each blast. LKAB subsidiary Kimit AB supplies the explosives and prepares the holes for blasting.
The main haulage level at Kiruna lies at a depth of 1,045m, with the mine’s ore-handling systems capable of handling 26Mt/y of run-of-mine rock.
Seven 500t-capacity shuttle trains, controlled from the 775m level, collect ore from ten groups of ore passes and deliver it to one of four crushing stations. -100mm ore is then skip hoisted in two stages to the 775m level and then to surface.
Electric-powered, remote-controlled drilling and ore handling equipment supplied by Atlas Copco and Tamrock is widely used.
After blasting, load-haul-dump machines (some of which are fully automated) carry the run-of-mine ore to the nearest ore pass, from which it is loaded automatically on to one of the trains operating on the 1,045m level."
At Kiruna the "ore contains a very pure magnetite-apatite mix, containing more than 60% iron and an average of 0.9% phosphorus. Black ore contains less apatite than grey ore.
The original reserve at Kiruna was some 1,800Mt. As of the end of 2008, LKAB estimated that the current proven reserve at the mine is 602Mt grading 48.5% iron, with probable reserves of 82Mt at 46.7% iron."
At 48.5% iron one tonne of the rock from Kiruna (before it is mined and beneficiated) is worth US$59 based on the current iron ore spot price of US$85/t.
At the reserve grade at Syama of 2.7g/t, one tonne of ore in the ground (before it is mined and beneficiated) is worth US$111/t a little less than twice the value of the Kiruna ore. Clearly the large scale of the Kiruna UG mine allows ore worth only US$59/t in the ground to be mined.
So the point is, if you are still reading, is that you aren't wise to compare the ore grade at Syama to the UG gold mines you might be used to reading about in Australia that mine higher grade narrow vein deposits. You are better comparing the grades to those of your average open cut gold mines. If you are hauling 3g/t dirt to your mill from an open cut mine with an AISC of US$746/0z you are very competitive with most mines in your class, in fact you will be killing the pig. If you can haul this ore to your mill for over 14 years at a rate of betwen 2.4Mt to 4Mt per annum you will own the best gold mine on ASX amongst the mid-tier producers that trade there. Esh
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