Geostatistical Determination of Production Uncertainty: Application to Pogo Gold Project

CIM Edmonton 2004
Clayton V. Deutsch, Jack DiMarchi, Peter Rolley,
Abstract Geological uncertainty is an unavoidable characteristic of all mining projects since only limited information is available from sampling. Mine planning and development decisions are made with significant economic consequences even when the geological heterogeneity is inherently uncertain. Geostatistical simulation is becoming preferred over kriging because it provides alternative property realizations that can be combined into a model of uncertainty. Geological uncertainty can be transferred into production uncertainty, which aids development planning.

This paper presents a case study for the Pogo property, being prepared for development near Fairbanks, Alaska. The exact dimensions, grades and production predictions have been modified; however, the methodology is illustrative. The methodology consists of (1) establishing the target distribution, (2) creating a model of spatial correlation, (3) generating multiple realizations at a small scale, (4) linearly averaging all the realizations to the chosen mining support size and (5) calculating production uncertainty.
Keywords: Uncertainty, realization, Production, Gold, pogo, Simulation, confidence, Planning, Risk, Geostatistics
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