Strip Ratio

Strip ratio is very important in the mining world.

It is basically the volume of waste material you need to drill, blast, and move divided by the volume of ore material you need to drill, blast, and move.

Why is this important? It is integrated in the operating cost for 1 tonne of ore milled. This falls under the mining cost section.

In an open pit operation, the cost to move 1 tonne of ore versus 1 tonne of waste is basically the same. The material is just being moved to either the waste stockpile or the ore stockpile/crusher.

For final mining cost, they wrap up the cost to move 1 tonne of ore with the associated cost to move the waste material to make that 1 tonne of ore accessible.

An example would be a strip ratio of 6:1 and a pure open pit cost of $4/tonne.
The final cost for 1 tonne of ore would be $4 x 6 tonnes of waste plus $4 x 1 tonne of ore = $25.

So, in essence, the mining cost in this example would be $25 per tonne of ore milled.

Strip itself is easily understood in coal mining where you may have 20 metres of overburden before you expose a 2 metre coal seam. In this case, it is a simple to just divide the length of the overburden by the length of the coal seam (20/2 = 10:1 strip ratio)

That is coal mining or strip mining at its core. When you look at a traditional open pit, you have parameters like pit wall angle and ore footprint, etc. This is where you need to use the volume over volume calculation.

So, where does this fit in with Chidliak?

The upcoming PEA is going to have 2 open pits (CH6 and CH7) included in the mine plan. The CH6 pit will go down to 260 metres and the CH7 pit is still to be determined, but a value of 220 metres is probably a good estimate.  CH6 is about 0.9 hectares in area and CH7 is about 1.0 hectares in area. That footprint of CH6 makes the pit angle even more important.

Here is table showing the Strip ratios at various pit wall angles. It is assumed the pit is a cone and the ore body is a cylindrical shape (for ease of calculation).

The above chart shows how the strip ratio changes for both CH6 and CH7 between a pit wall angle of 45 degrees all the way up to 70 degrees.
It clearly shows the benefit of having a higher pit wall angle.
The lower strip ratio, the lower amount of waste material to move and this will result in a lower mining cost.
The opposite is quite true and you can see the graph accelerating in strip ratio as your pit wall angle reduces.

A pit wall angle is determined by geotechnical drilling and engineer analysis to create a nice safety of factor so you don't end up with a pit wall failure during production years. Being on the Canadian shield is a plus and even permafrost may have a positive effect. Most pit walls are designed to 55 to 65 degrees.

Here is the same chart with focus in on the 55 to 65 degrees:

We can clearly see CH6 has the most effect with strip ratio and pit wall angle. This is due to the fact that CH6 has a smaller footprint then CH7 and is therefore more affected by pit wall angle.

The other thing to keep in mind is the strip ratio is an average over the life of the mine. In reality, the strip ratio is much smaller then average in the beginning of the mine and much larger at the end of the mine life.
If you have a pit wall angle of 55 degrees for CH6 and a strip ratio of 10:1, when you are trying to expose that last 10 metres in the pit, the strip ratio is actually >> 10:1.  The value of the ore in CH6 is significantly greater then CH7 and it can actually handle moving more waste.

There does come a point in time when you are moving a lot of waste and it can cost money, not only in moving it...but in some cases, you have the cost to move it back into the pit when finished.

What are the alternatives when the strip ratio gets too high? The obvious is to go underground. Underground only moves waste for the development to get access to the ore. Once at the ore, there is no stripping of waste. The benefit of underground mining is that it can be very selective. So if you do have CAD$1000/tonne ore in one area of the kimberlite and CAD$600/tonne ore in another area...the plan can be to access the higher value ore first and the other ore second. This has significant impact on economics and NPV. Underground mining costs can be more expensive, but if your strip ratio gets out of hand, the cost can actually be less than open pit.

Here is an example historic kimberlite pit:

You can see how they had a shallow pit wall angle to begin and then had a very steep pit wall angle near the bottom of the pit to extract that pit bottom as cost effective as possible.

Here is one of the deepest pits in the world (Mir mine in Russia):

You can easily see how the material up the pit wall changes. That is a huge amount of waste that has been removed over the last couple of decades. The pipe itself must be very rich in value and wide in footprint.

This strip ratio discussion is going to be huge going forward for Chidliak has a lot of the pipes are not very big. CH44 is even smaller in footprint at 0.5 hectares. The whole CH7/CH44/45/46 might benefit for an extensive look at underground mining..that is a lot more selective..not only in grade, but in ore versus waste as well. Chidliak does have a couple larger pipes CH31/33 that will and may need to benefit from lower strip ratios.

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