Chersky Institute of Mining of the North, Siberian Branch. Russian Academy of Sciences, Yakutsk, Russia:

N. S. Batugina, Leading Researcher, Doctor of Economic Sciences, batuginan@mail.ru
V. L. Gavrilov, Leading Researcher, Candidate of Engineering Sciences
S. M. Tkach, Chief Researcher, Doctor of Engineering Sciences

Variation in the anticipated (calculated, target) profit Pr of mining in a deposit or a deposit area is caused by spatial or temporal variability in the base values such as output Q, average cut-off grade G_A, recovery factor J, mineral loss L, dilution D, mining system failure probability W, end product price P and aggregate cost C. The authors show that profit is a function of these random variables conditioned by random (and often systematic) error committed during mining. This article proposes the model to calculate relative error in anticipated profit of mining a deposit or a deposit area. The degree and nature of the effect exerted by random errors in source data on the accuracy and reliability of economic–geological evaluation are analyzed. One of the highest uncertainties is the estimate of the root-mean-square error in the price variance, σ_p. The price variance brings the highest uncertainty both in evaluation of efficiency of an investment project and a mine. The error in the estimate of the aggregate cost per unit end product, σ_с, large depends on the geological parameters. it is shown that under error of 10–20 % in any argument, the error in the anticipated profit will reach 30 % and, in some cases, even 200–300 %. Permissible error in the forecast of profit is always much higher than the errors in separate factors, which is connected with the inaccuracy of appraisal of mineral reserves. This results in the complication of mining operations in terms of amount of excavation and economic damage. A more precise profit evaluation requires greater information on a deposit by the beginning of mining and processing project planning or reconstruction, which is only possible in case of effective geologic survey of mineral deposits scheduled for mining or under development.

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