managing the giant a mine geologist’s perspective - … · managing the giant – a mine...

Managing the Giant – A Mine Geologist’s Perspective

to the Mining of the Olympic Dam Deposit

Charles Nzama and Mathias Kapo

Superintendent Geology (Acting) and Geologist Mine Area

18 August 2014

Important Notices

Reliance on Third Party Information

The views expressed here contain information that have been derived from publicly available sources that have not been independently verified. No presentation of

warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by BHP

Billiton.

Forward Looking Statements

This presentation includes forward-looking statements within the meaning of the U.S. Securities Litigation Reform Act of 1995 regarding future events and the future

financial performance of BHP Billiton. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks,

uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements

contained in this presentation. For more details on those risks, you should refer to the sections of our annual report on Form 20-F for the year ended 30 June 2013

entitled “Risk factors”. “Forward looking statements” and “Operating and financial review and prospects” filed with the U.S. Securities and Exchange Commission.

No Offer of Securities

Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction.

Non-GAAP Financial Information

BHP Billiton results are reported under International Reporting Standards (IFRS). References to Underlying EBIT and EBITDA exclude net finance costs and taxation for

jointly controlled entities, and exceptional items. A reconciliation to statutory EBIT is contained within the profit announcement, available at our website

www.bhpbilliton.com

SC Nzama and MK Kapo, Mine Geology, Olympic Dam, 18 August 2014 Slide 2

Important Notices

Mineral Resources

The FY2013 Mineral Resource information in this presentation is extracted from the report entitled BHP Billiton Annual Report 2013 published on 25 September

2013 and can be viewed at www.bhpbilliton.com. The company confirms that it is not aware of any new information or data that materially affects the information

included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters

underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and

context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

Competent Person for Olympic Dam Mineral Resource is S O’Connell (MAusIMM) who is a full time employee of BHP Billiton. Competent Persons for Escondida

District Mineral Resources are L Soto (MAusIMM), M Cortes (MAusIMM) who are employed by BHP Billiton and R Turner (MAusIMM) who is employed by Golder

Associates.

Province Measured Resource (Mt) Indicated Resource (Mt) Inferred Resource (Mt) BHP Billiton interest

%

Olympic Dam

1,470 @ 1.02% Cu

0.3kg/t U3O8

0.35g/t Au

4,840 @ 0.84% Cu

0.27kg/t U3O8

0.34g/t Au

3,260 @ 0.70% Cu

0.23kg/t U3O8

0.25g/t Au

100

Escondida district 5,785 @ 0.67% Cu 3,542 @ 0.52% Cu 12,930 @ 0.47% Cu 57.5

Mineral Resource classification (100% basis) for each province, where relevant, are listed in Table 1.

Table 1


The Giant: Olympic Dam Deposit


Location

• 560km NNW of Adelaide, South Australia

• Middle Proterozoic: Gawler Craton, Stuart Shelf geological province

Occurrence

• Hosted within the Roxby Down Granite, Hiltaba Suite

• Iron Oxide Copper Gold deposit (IOCG):

– Key IOCG features

– OD Breccia Complex: Ore forming process

› Magmatic-hydrothermal brecciation,

› Fluid mixing and mineralisation

– Ore minerals and Cu species

2cm

2cm

The Giant: Olympic Dam Deposit

Why giant?

• 6km by 3.5km, exceeding 1km depth

• Resource1: 9.5 Bt @ 0.82% Cu,

0.26 kg/t U3O8, 0.31 g/t Au, 1 g/t Ag

• Largest underground mine in Australia

• FY13 Production2: 166kt Cu cathode,

4.1kt of U3O8, 113k oz Au and 880k

oz Ag

SC Nzama and MK Kapo, Mine Geology, Olympic Dam, 18 August 2014

Chart depicts contained metal. Sources: Company Annual Reports, press releases and International Atomic Energy Agency (as at September 2012). Witwatersrand figure is BHP Billiton estimate and is approximate only. # Based on Codelco reported figures at 0.2% Cu cut-off grade. BHP Billiton Mineral Resources for Olympic Dam and Escondida district (includes Pampa, Pinta Verde and Chimborazo) are on a 100% basis. The FY2013 Mineral Resource information for Olympic Dam and Escondida district on this slide is extracted from the report entitled BHP Billiton Annual Report 2013 published on 25 September 2013. The report can be viewed at www.bhpbilliton.com. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. A complete breakdown by Resource classification is provided on slide 3, table 1.

1. A complete breakdown by Resource classification is provided on slide 3, table 1

2. Information extracted from the report entitled BHP Billiton Annual Report 2013 published

on 25 September 2013. The report can be viewed at www.bhpbilliton.com

Slide 5

The Olympic Dam Mine

Mining method

• Mechanised sublevel open stoping with an

integrated metallurgical processing plant

Mine decision processes; from rock to cathode

• Data collection

• Interpretation and modelling

• Mine design and evaluation

• Production planning and scheduling

• Metallurgical processing, monitoring and

reconciliation

Mine geology objectives

• Defining ore body characteristics

• Optimise mine production design processes

• Supply quality ore to the processing plant


MINING PLANNING

SMELTING REFINING FINAL PRODUCT

PROCESSING

MINE GEOLOGY

Slide 6

Mine Area Management

Mine Area Divisions

• 12 Mine Areas, actively mining in 8

– Size varies, up to 5km2

• Division based on geological and operational factors

– Mineralisation and structural trends

– Ventilation districts

• Mine Geologists are custodians of mine areas


1km 1km

Mine Area Management

Mine Area Geologist

• Technical expert in a mine area

• Accountable for quality of geological data

• Coordinates the geological functions

– Data collection and presentation

– Drill program design and management

(>65km per year)

– Interpretations and models validation

• Primary contact for facilitating area specific technical

queries

– Stope design processes


Infill drilling for resource model update Final resource model for mine design

Drill program planning and design

Slide 8

50m

50m

Nmpg

E

Nmpg

~ 50m

Mine Geology Interpretations

Resource Modelling

• Critical in stope design and metallurgical processes

• 26 elements assayed, models generated for:

– Metal grades, Cu:S and 15 process critical minerals

• Domain drivers – deterministic Cu species models

based on geological interpretations

• Importance of the Cu species models

– Relate to Cu:S ratio

– Ore grade distribution

– Relationship with other ore minerals

– Reliable local estimates:

› Mine design parameters

› Metallurgical processing and smelting

parameters


K. Ehrig, 2013

Models:

Slide 9


Copper Sulphide interpretations

• Copper distribution has a broad spatial correlation with

hematite alteration

• Provide the behaviour of the Cu sulphide species across the

deposit

• Targeting tool for resource extension testing and resource

category conversion drilling


Rock Types

Copper-sulphides interpretations

Combined Mine Area interpretations

Slide 10

50m

~1km


Geological Structures

• Preliminary geotechnical models are based on orientated

surface drill core

• Models refined with underground drillcore, and ground-

truthed via underground mapping (>20km per year).

• Underground mapping provides input data for mine area

structural trends

– RQD data, faults, joints and veins

– Local and regional variations: mine area vs in-stope

• Structural data used in stability and performance

assessments

– Ground support and blast packets designs

– Stope performance: over-break and under-break


Mine regional structures

Local structures interpretations

N(mpg)

Slide 11

5 m 10 m

~ 1km

Grade Control

• Long Term Planning: 5 YP for volume and grade

• Grab samples are used for development headings

and as a spot check for stope performance

• Managing of ore characteristics:

– Optimise ore quality management

› Blending during extraction

– Minimise impact on metallurgical performance

› Fe:SiO2, Chlorite, Carbonates, Cu:S


Exaggerated scale

Flotation Leaching Comminution

low density (quartz, sericite) easily slimed (sericite, chlorite)

Refining Smelting

low Cu:S ratio (py and cp); F-, Cl-,

K-, Mg-, Zn-, Mo- minerals

As-, Se-, Bi-, Te-, Sb- Pb-

minerals acid soluble (sid, chl, flu); ‘gelling’

minerals (chlorite) ‘slow settling’

(sericite)

Reconciliation

• Reserve model performance monitoring through the

production value chain

– Blast packet grade assessments

– Daily production grade assessments

– Over-break/under-break assessments

– Reconciliation: effective sampling density (1:2500 tons)

› Process Plant to Ore Reserve (contained tonnes &

grade)

› Final Product to Ore Reserve (recovered metal)

› Mineral Resource to Ore Reserve


Conclusion

• Olympic Dam is a giant deposit in both size and contained

metals

• Effective management of the deposit has been achieved

through its division into smaller manageable units

• Mine geologists are key to the collection, interpretation and

dissemination of the data, and its application to the mining

and metallurgical processes

• Planning decisions are based on key deposit-wide geological

data

• At Olympic Dam, the decisions made by mine geologists

have far-reaching consequences to the final outcome as they

are carried through the whole mine value chain


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