Download 2023 05 GSSA Process Management with notes

Process Management for
Geologists:
Practical Examples
R ic h a r d Ho r n s ey
S AC N A S P / GS S A Me n to r i n g P r o g r a m m e
Ma y 2023
R I C H A R D
H O R N S E Y
C O N S U LT I N G
( P T Y )
LT D
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Introduction
My personal introduction to Process Management:
 1998-2001 AngloVaal Management Training Courses at UCT, GIBS PMD & EDP
 But… 1984 – 1990 unknowingly self-developed some skills working in the building trade
during school holidays
 This is probably true for most people, but maybe they do not realise it & apply it!
 It could be called “common sense”, some have it, some do not?
Why is Process Management important?
 Process Management enables us to break down simple or complex tasks into bite-size
individual actions; assess which are critical steps, which are time-consuming, & which are
not important or relevant to the end objective, & could be removed or deferred
 Most graduates leave Uni without any comprehension of this thought process, & suffer a
distressing entry into the mining or exploration profession, which are dominated by
process
 Thanks to Mary-Joy for asking me to share some examples with you all
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Good afternoon. This presentation is a result of discussions between myself and Mary-Joy as part of the GSSA
mentor programme. We have spoken about ways of becoming more proficient and value-adding as a means of
professional and personal advancement, and have regularly touched upon the more strategic aspects of our
profession. Process Management, from my perspective, is a critical skill for a professional geologist, so I will share
some of the theory and practical examples during the next hour or so.
Personally, I was first formally introduced to this when I was fortunate to be selected to attend a series of
management development courses at UCT and GIBS. These were mini-MBA programmes that were businessfocussed, and touched on topics that were never part of my University or school education. Importantly, the
mining industry participants generally aced these topics, I scored second in the GIBS EDP class, behind a
colleague, Dorrit de Nooy, who was Chief Mineralogist at Anglovaal. However, it immediately struck me that
many of these topics are actually self-learnt, in my case through working in the building trade as a young man, but
more generally, most of us have a natural ability to assess a problem, and find the optimal method of solving it.
Old-fashioned guys like myself would call it common sense, some have it, and others don’t.
Why is this important? Process Management is a discipline that teaches how to analyse a process and break it
down into bite-size actions, then we can assess which are critical, and which are time-consuming but not critical
to achieving the objective. This enables optimisation to deliver the product in a more time and cost-efficient
manner.
Although this sounds obvious, most geology graduates enter formal employment without any training or
comprehension of this thought process. This leads to an entry into a business sector that is dominated by process
without any practical skills to perform. We will look at a couple of examples that illustrate how project
management can be applied to most aspects of our function, relatively painlessly.
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Definition of Process Management
 Business Process Management involves using various methods to discover, model,
analyse, measure, improve, optimize, & automate business processes. Processes can be
structured & repeatable or unstructured & variable. In many businesses, enabling
technologies (SAP, Project Management Software etc.) are used for BPM
 Key distinctions between BPM & Project Management are repeatability & predictability.
If the structure & sequence of work is unique, then it is a Project
 In BPM, a sequence of work can vary from instance to instance: there are gateways,
conditions; business rules etc. The key is predictability: no matter how many forks in the
road, we anticipate or know all of them in advance, & we understand the conditions for
the process to take one route or another. If this condition is met, we are dealing with a
Process
 Many geologists are not aware of BPM principles, which are ingrained into engineering
disciplines, but many tasks that we routinely fulfill are in themselves processes (Drillhole
Core Logging), forming part of a larger integrated process (Mine Feasibility &
Development). We are going to examine both processes in this presentation
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The next couple of slides provide a very high-level overview of Business Process Management (BPM). It sounds
rather complicated, and can be, but I sourced this from Wikipedia, so lots of information is available for free that
will get you up to speed on the subject.
BPM uses various methods to investigate, analyse, optimise, and implement business processes of any scale,
subject, or frequency. We are all familiar with this, as most of us have to suffer SAP and other software designed
for this purpose. However, it is at the sharp end at which we, as individuals, can make the most difference.
In terms of definitions, the distinction between BPM and straightforward project management is whether the
process is unique, in which case it is a project. However, a project may include many processes that can be
optimised.
For BPM application, the work sequence may vary, therefore there may be multiple gateways, yes/no or
if/then/and questions. We should know most of these and their consequences to enable the process to reach the
required conclusion.
Many geologists do not use this thought process, whereas it is ingrained into engineering disciplines. However
many tasks that we routinely undertake are processes, such as drillhole core logging, which may form an integral
part of a larger more complex and integrated process, such as a mine feasibility study. We will examine both of
these processes.
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Business Process Management Tools
Understand: the Business Requirement (Outcome)
Visualize: the functions & processes
Measure: determine appropriate success parameters (if
applicable)
Analyse: compare simulations to determine an optimal
improvement or meet a defined delivery objective
Improve: select & implement the improvement(s)
Control: implement & monitor in real time & feed the
performance results back into the simulation model to
identify additional improvement iterations
Re-engineer: if necessary, revamp processes from
scratch for better results
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The BPM toolkit is summarised in this slide. It is important to realise that most human adults have probably
innately developed these skills from childhood, yet for various reasons do not routinely apply them to the job in
hand. It is possibly fair to say that most professional geologists tend to lean towards the opposite tendency, in
that what could be relatively simple processes become over-complicated due to a desire to extract and record
every possible piece of information without understanding what is critical to the process or outcome. More on
this later.
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Process Mapping
Process mapping is used to visually map
workflows & processes by creating a process
workflow diagram:
 Communicates how a process works in a
concise & straightforward way
 Enables easy understanding of how to
complete a given process
 Provides a better understanding of the
entire process & identifies inefficiencies or
road-blocks
 Enables optimisation of workflow to make
improvements improving the delivery of the
process objective
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If necessary, particularly for complex processes, or to map at what stage of a process it is possible to derive
important outcomes, a process map should be constructed. These maps can be developed in a team
environment, where all members may have different perspectives of important steps, and outcomes. These
maps are an important visual aid to new team members to understand the workflow, and provide an insight why
certain steps or actions may be important contributors to an often far-removed outcome.
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Why Use a Process Map?
Process Maps allow you to test & solidify ideas, & streamline processes by visually listing the
steps needed to achieve the desired result
 Identifies inefficiencies: Helps you identify bottlenecks, gaps, & other issues in a process flow
 Simplifies Tasks: Breaks down complex tasks into smaller steps
 Increases Comprehension: Promotes thorough understanding of a process
 Plans for Contingencies: Identifies risks, allowing contingencies to be included
 Delegates Responsibilities: Coordinates responsibilities between various individuals or
entities
 Creates Documentation: Provides documentation of the process
 Clear Communication & Understanding: Simplified through a user-friendly, visual format
 Make Decisions Faster: Enables faster decision making due to faster communication
 Meet Standards: Helps businesses comply with applicable standards
 Financial Reward: Improves achievement of objectives on time & budget
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This list outlines several reasons why in many companies, process maps should be used as an important training
and understanding aid for both existing and new team members. In an established industry, processes tend to
become entrenched, and given today’s rapidly changing technology, parts of the process, or indeed the entire
process may become redundant.
A process map is a simple object that enables visualisation of the entire process, the interlinking tasks, and their
eventual outcome. In a complex, multi-chain process, this enables personnel who perform only a small part of
this process to understand their contribution to the end product, achieving “buy-in” and delivering a better
outcome.
The over-arching business objective is to deliver a better product, faster, and more cost-effectively.
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Process Mapping Techniques
Planning your Process Map:
 Establish process boundaries so that only necessary information is included
 Set clear objectives
 Only map processes that have a defined, objective output
Drafting your Process Map:




Work backward from output to input
Keep subprocesses simple
Include all necessary details, but no more & no less
Use standardized notation to facilitate communication & sharing
Reviewing your Process Map:
 Brainstorm with everyone involved in the process
 Detail & assess alternative routes to meeting a preferred process objective
 Map the process in its current state, not necessarily a perfect or idealized state,
& make improvements from there
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Some practical techniques for process mapping are illustrated. The most fundamental point is to understand the
objective, and boundaries, avoiding getting bogged down in extraneous details.
It is very important to be honest about the map, which needs to show the real situation, warts and all. Then the
team can pull this apart to its constituents, removing actions and steps that are non-relevant or value-adding. It
may be necessary to trial and assess different alternatives to derive the best outcome.
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Practical Examples
 The previous slides may seem far removed from Geology practice, in that
geologists often view the profession as a “non-engineering science”. But for
economic geologists, our work is dominated by, if not entirely based upon
process
 The two examples illustrate how process management can be applied
Drillhole Core Management
• Most geologists believe that core logging is a discrete activity
• We will examine the objectives, workflow, data outcomes, & demonstrate that
>90% of core logging is substandard, wasting millions of $$’s
• A practical workflow & solution are presented
Two Rivers Platinum Feasibility Study (from APCOM 2003 presentation)
• Application of BPM to optimise FS delivery showing direct & opportunity cost
savings to the project through geology programme workflow
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Reiterating the earlier comments, it is likely that the previous slides may seem removed from practical geology,
particularly as many practising economic geologists view their profession as a “pure science”. However, in reality,
our profession is dominated by process. We are going to consider two practical examples.
Firstly, drillhole core management. Any economic geologist, particularly those of us who review multiple projects
have seen many horror stories when it comes to core management. The reason for this is that most geologists
believe that core logging is a discrete activity. We will examine this concept, and demonstrate that possibly 90%
of drillhole core logging is undertaken according to a suboptimal process, wasting millions of dollars of investor
capital, and often producing a poor result. We will then examine the workflow and show how BPM can produce
90% of the information within less than two weeks following drilling. We will also see how new technology has
enabled this process improvement.
Then we will examine the 2003 Two Rivers Platinum feasibility study, for which BPM was proactively applied to
the geology work programme, which was the precursor activity enabling all the other technical work to start.
Optimising the geology programme resulted in a significant time and direct cost saving to the project, and backexamining the metals price scenario indicates the more significant financial opportunity reward achieved by the
project.
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Drillhole Core Logging
 Drillhole Core is the most fundamental sources of geological information
 Increasing cost per metre ($200 - >$500/m dependent upon depth, location,
techniques employed)
Reality
 Often viewed as a “grudge” task, given to least experienced team members
 Little or no pre-training or ongoing mentoring
 Failure to acquire all information (RQD’s, density, p-XRF, physical properties)
 Complex, unachievable, irrelevant data capture templates
 General process is to complete all work then pass on for data modelling which
is post-receipt of assays or completion of the entire drill programme
 Use process management to make significant improvements to delivery time,
data usage, ability to change strategy during drilling, & cost
 Enables on-site team (closest to the coal face) to make real-time breakthrough
observations
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Drillhole core is one of the most fundamental sources of geological information, against a background of
increasing direct cost per metre drilled. In addition, various non-technical issues are making it more difficult to
drill the metres required to achieve a discovery such as government and environmental restrictions, reluctance of
junior companies to drill “wildcat” holes, major companies risk management and limited budgets, etc.
In reality, drillhole core logging is often viewed as a grudge task, dished out almost as punishment to the least
experienced team members with little or no training or mentoring, and drill logging systems that are poorly
thought out and structured.
For many exploration companies, lack of comprehension of the process means that many parameters are not
captured – the justification being that “this is exploration, that comes later”.
Drill templates and coding systems developed for early versions of database software are complex, often
ambiguous, and irrelevant in the modern era, with multiple logs requiring repeated workflow.
In the bigger picture, the general process is to drill the hole, log the core, then pass this information on into a
database, therefore interpretative modelling is only undertaken post receipt of assays, or the entire drill
programme.
BPM techniques can make significant improvements to delivery of critical information that enables data
interpretation, and provides the ability to make changes and optimise the programme in real time, saving cost,
and raising the potential to achieve discovery.
This also enables the site team, who are closest to the action, to achieve breakthrough observations in real time.
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Drillhole Core Logging Process
Drill Rig
Core Yard - Technician
Core Yard - Geology
Output - Other Users
Produce core
Orient core & mark base of hole
Pack into trays
Marker inserted at ends of runs
Check against drillers report
Transport to Core Yard
Cumulative Time
Days
Period
Months
0
1
Unpack core onto angle iron
Fit core together & check against drillers
markers
Draw orientation line on base of hole &
downhole direction arrows
Rotate core & draw reference line
Measure & mark metres
Measure core recovery per drillers run
Measure RQD per metre
Photograph the core
p-XRF lithology log
p-XRF sulphide event log
Magnetic Susceptibility & Conductivity log
Geology Log to capture visible features
Draw contacts & mark sulphide intervals
Integrate visual log with p-XRF lithology log
Detailed geotechnical log
Structure log for oriented core
3
Export RQD for geotechnical analysis
4
5
6
Export lithology, p-XRF, & structure logs
for 3d modelling & interpretation
Interpret p-XRF sulphide event log & define
sampling strategy
Mark intervals for cutting
Cut the core
Remark core (metre marks & sample
intervals)
Sample core using reference line &
downhole direction arrows to ensure the
same side of the core is sampled
Photograph the core
Bag the intervals to be sampled into premarked sample bags
Density measurements using Archimedes
bath
Compile samples into batches for shipment
Despatch to the laboratory
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Detailed log of sample intervals using a
defined template with QC samples to be
inserted
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Compile all data into the defined template
Laboratory analysis
After receipt of assays complete QC review &
insert into the drillhole template
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Export analytical log for geostatistical
modelling
Review drillhole in regional context &
update/calibrate the geological model
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This is a process map, using MSExcel, of the optimised drillhole core logging process. A fundamental recent
breakthrough for this process is the ability to utilise p-XRF for both lithological and metal endowment
characterisation as the hole is drilled.
The various steps undertaken at the drill rig and core yard, and by technicians and geologist are shown, together
with data outputs and the days required on the right. The most important steps are indicated to ensure that the
final product is to the desired quality. This includes drawing orientation and reference lines and indicating
downhole directions by the technician before the core is handed over to the geologist. Some activities can run in
parallel, such as p-XRF logging undertaken by the technician and geological logging undertaken by the geologist.
The logsheet format is an optimised combined geology, structural, alteration, mineralisation, other minerals of
significance (graphite and magnetite) and descriptive log. The only separate logs are oriented structure,
geotechnical, and sampling logs, therefore a single logging pass is required to achieve most of the information.
The p-XRF logs for lithology and sulphide tenor provide direct lithogeochemical control on lithology, major
compositional breaks, and sulphide base metal tenor, and are integrated into the visual log.
The p-XRF sulphide log is used to define areas of most interest for analysis, enabling optimal sampling strategy
and placement of analytical sample intervals. Laboratory analysis of the core requires two to three months,
before final drillhole compilation can be completed.
However, the output column shows the timing of data delivery. The first milestone is delivery of geotechnical
data, which is achievable within 3 days of drillhole completion (RQD’s). The detailed lithology, p-XRF lithology and
sulphide tenor, and oriented structural logs are available 8 days following completion. The final log with
laboratory analyses is only available 81 days following drilling.
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Therefore, dependent upon the style and metal content of mineralisation, it is possible to update and modify the
project 3-d geological and mineralisation models with data provided less than two weeks following drilling. Very
few companies achieve this. Prior to the p-XRF, for reef-style deposits, the timeframe excluded analyses, but at
Two Rivers, 1 day was achieved, and the project geological model was complete 3 days after completion of
drilling.
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Drillhole Core Logging Process 1
Unpack Core
Produce Core
Fit Core
& Check
Orient Core
Mag Susc
Cond
p-XRF Lith
Pack Core
Ori & Ref
Marking
Insert
Markers
Check
Core
Repack or
Redrill
Metre
Marking
Transport to
Core Yard
Core
Recovery
Geotech
Output
RQD/metre
3 DAYS
Photograph
Core
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Integrate
Geology & pXRF Lith
Geology Log
Mark
Sulphides
p-XRF
Sulphide
Geotech Log
Structure
Log
Geology
p-XRF
Structure
Output
Sampling
Strategy
Mark for
Cutting
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The next two slides summarise this process in a more visual manner, showing workflow with stage-gate validation
steps, linear or parallel processes, and outputs with time from drilling.
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Drillhole Core Logging Process 2
Cut Core
Re-mark
Core
Detailed
Sample Log
& QC
insertion
Bag samples
Density
Determination
 This process shows that most DDH output data can be
provided 1 week after drilling is complete, including
analytical data at the overview level
 This enables most geological & resource design work
to be completed long before receipt of laboratory
assays as the sulphide spot data indicates metal
tenors & zonation
Shipment to
Laboratory
Compile all
Data
Laboratory
Analysis
Analysis QC
review &
compile to Drill
template
Sample Core
Analytical
Data for
Geostatistical
Modelling
Photograph
Core
Review Drillhole &
update geology
models
 This is the post-p-XRF
flowchart, for reef-style,
constrained deposits, the
timeframe was 1 day to data
output!!!
80 DAYS
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To reiterate, this optimised workflow enables most output to be provided just over a week following drilling,
enabling most of the downstream activities to be advanced.
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Drillhole Core Logging Templates
 Develop a template specific to the Target Mineralisation Style
 Include all logs, & derivatives in a single template (I personally use MSExcel)
 Understand what is important & avoid over-complicating
 Do not include “guesswork” fields – causes useless databases & demoralises the team
 Include quantitative over qualitative parameters as much as possible – as this requires
less editing to display visually in 3d software
 Never allow entries to run over more than one line – it also creates editing problems
down the track
 Do not include point &/or overlapping entries in the same log
 Include a free-field comments column, but avoid using punctuation
 Do not split logs into multiple tables that could be logged as a single entity – the more
times a hole is logged introduces more variability of data, the quality progressively
declines, & it consumes valuable time. Do it properly, once
 Paper vs PC, notepad or cellphone? Paper – does not run out of battery, you can make
notes, diagrams & use “ditto’s”, you do not get distracted every 30 seconds by your BFF,
wife, or your Boss, it is auditable, & demonstrably much faster!
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So, having considered the workflow, it is necessary to ensure that the templates that enable the workflow are
suitable. I personally use MSExcel, which, when managed properly, enables all logs and their derivative products
such as p-XRF downhole plots to be integrated into a single product. Use of a template with standardised
fieldnames, a bibliography, and standardised calculation pages enables consistency and reduces user variation.
It is important to standardise the template in a manner that is specific to the mineralisation style and important
parameters required. I have experienced super-complicated templates with mineralisation parameters that
include minerals that are not recognisable to the naked eye – for example “platinum”! This is useless clutter and
noise, and should be deleted.
It is important not to include fields that are non-achievable in practice. For ultramafic rocks, this includes the
mineralogy fields – for dark, often altered ultramafic rocks, or even norites and gabbros the minerals can be very
difficult to identify with any confidence, even for myself with over 30 years experience. This forces the team to
waste time and effort guessing, and the outcome is meaningless. The p-XRF lithogeochemical log provides real
information that can be used to define variation on a scale and level of detail not achievable by a visual log,
therefore remove these fields from the template! The lithology field inherently provides primary rock
mineralogy.
Consider the end-usage and aim to provide quantitative, rather than qualitative parameters for sulphide,
magnetite, and graphite for example, to enable these to be incorporated into the 3d software as graphs.
Other practical pointers are indicated, but in terms of process optimisation, the main culprit is logging systems
that have multiple, individual logs for lithology, structure, alteration, etc. This requires multiple logging of a single
hole, possibly by different geologists, which introduces variability, the quality of work progressively declines, and
it consumes valuable time, therefore money.
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My personal preference for logging is paper, every time – paper does not run out of battery, it is robust,
auditable, and you can focus on the job in hand rather than multiple other distractions. I have also, on several
occasions had a tortoise versus hare race with non-believers, and won, every single time!
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Drillhole Core Logging Template
GEOLOGY LOG SHEET
PAGE ….. OF ……
DH Name
X
Hole start
Logged by
Date
Deflection number
Bearing
Y
Hole complete
Input by
Date
End of hole/deflection
Inclination
Z
Drilled by
Signed off
Date
Depth to
Rock Type
Top
Contact
Colour
Grain size
Macro
text
Meso
text
Struct
Weath
Alt 1
Alt 1 int
Alt 2
Alt 2 int Sulph 1
Sulph 1
style
Sulph 1
Sulph 2
int
Sulph 2
style
Sulph 2
Sulph 3
int
Sulph 3
style
Sulph 3
Sulph 4
int
Sulph 4
style
Sulph 4
Oxide 1 Oxide
Oxide 2 Oxide
Sec 1
Oxide 1
Oxide 2
Sec 1
int
style
1 int
style
2 int
style
Sec 1 int
Sec 2
Sec 2 Sec 2
style
int
Scratch
Mag Sus
Comments
 Lithology, Alteration, Mineralisation, Oxides, & Structure all in one template
 Update of template used for Nkomati & Two Rivers feasibility studies
 Time, cost saving, auditable, & directly suitable for efficient entry into 3d software
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This is my personal Ni-PGE-sulphide focussed drill log template, including most logs in a single template. The
original was the AngloVaal Nkomati template, updated for Two Rivers, then progressively optimised over the
years. If anyone would like the complete MSExcel template, just send me an e-mail afterwards.
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Practical Examples - Uganda
 Ni-sulphide exploration in rocks that are dark, altered, homogeneous & very difficult to log in
detail with any confidence in determining detailed lithology variation
 Team of 3 people, drilled to 1,050m, logging & p-XRF analysis completed <1 week after DDH
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A practical example from one of my recent projects in Uganda, working for a small private Canadian investment
company. We had a team of three, and drilled a deep hole through essentially visually homogeneous ultramafic
rocks. Our core yard was the hotel car park, and we deferred some work until we returned to the project office.
On the left, Jackie, the project geologist, is logging the drillhole core, and on the right, Damacen, the technician is
analysing the sulphide mineralisation using p-XRF. The third team member, Henry, was the driver and logistics
technician. I was there for a short period to assist.
Drillhole logging, oriented structural logging, p-XRF analysis, data entry, and Micromine interpretation were
completed by this team less than 1 week following drilling.
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Real-Time p-XRF Lithogeochemistry
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This slide shows the lithology intersected during drilling, essentially a serpentinised ultramafic, varying from
clinopyroxenite to wehrlite to dunite. The p-XRF log on the right is from the drillhole template showing the p-XRF
lithology data, indicating variation within the intrusion that is impossible to distinguish visually.
The 3d Micromine plot on the top left shows other holes into the intrusion, all of which have been p-XRF
analysed, showing the detailed lithological variation plotted as “bar-codes” to assess whether the holes
intersected the same stratigraphy or not. In this case, the drilling clearly intersected different stratigraphy.
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p-XRF Sulphide Lithogeochemistry
Pd Anomaly
Pd Anomaly
Pd Anomaly
???
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This Micromine section shows the p-XRF sulphide log with the soil Pd geochemistry showing Ni and Cu and the
interpreted correlation between the drillhole and surface. This plot was constructed less than 1 week following
drilling, and clearly indicates the difference between higher tenor sulphide mineralisation within the intrusion,
and low tenor semi-massive sulphide in the intrusion footwall.
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Two Rivers Platinum (APCOM 2003)
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The following slides are lifted and edited from a 2003 APCOM conference presentation by myself and Paul van der
Merwe who was group geostatistician, based upon the Two Rivers Platinum feasibility study.
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Two Rivers Platinum 2002 - 2004
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The top left image shows the Dwarsrivier valley in 2003, prior to the development of Two Rivers or any of the
other subsequent mining operations.
Top right is the technical team in front of the bulk sample shaft, including from left to right, myself, Louis Brown
(geology technician), Sally Bevington (Senior Geologist), Bongi Mabuza (Chief Geologist), Louise Bruwer (Senior
Geologist), Nick van Deventer (Bulk Sample Manager), and Nick Horswell (Mining Engineer).
Bottom left shows the bulk sample drillhole, completed prior to excavation of the shaft.
Bottom right shows a recent picture of the Dwarsrivier Valley and the Two Rivers Platinum Mine.
19
Project Parameters 2001
 Joint Venture – 41% Avmin, 34% Implats, 25% Tiso Capital
 Focus on UG2 – highest grade, most consistent target
 Purchase (ZAR551 million) – required swift development
 PFS during purchase – used existing information, known BIC consistency
 Feasibility Study to 90% accuracy – bank finance required
 Proven Technology – reduce risk (included mechanisation if appropriate)
 Project Mandate – activities run in parallel for 2003 go-ahead
 Critical Path: Drill Programme the limiting factor for start of all major activities
(Resource Evaluation, Metallurgical Testwork, Mine Method Scoping,
Geotechnical Modelling, Detailed Mine Design, Financial Modelling)
Х Background Scenario – falling metals prices after large capital outlay
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
20
Two Rivers was a joint venture between Avmin, Impala Platinum and Tiso Capital. The project was purchased
following a competitive tender for ZAR 551 million from Assmang. A study undertaken as part of the purchase bid
was deemed to meet the standard of a pre-feasibility study, therefore there was immediate pressure to complete
a feasibility study to motivate raising of external capital.
The scope required focus on proven technology, but it was considered important to develop a modern
mechanised mining operation. It was further required that all activities should run in parallel, using the in-house
team that had recently completed development of the Nkomati Mine expansion feasibility study, a highly
experienced team.
Furthermore, my personal experience of the Bushveld complex, having spent a very intensive three years at
Western Platinum Mine prior to joining the Nkomati team, proved critical to optimising the geology aspect of the
feasibility study.
All of this was against a backdrop of falling metals prices, for a company that was financially strained by
development of the Nkomati Expansion, and having made a large capital outlay.
20
Geology Constraints
• Objectives defined from PFS stage
 Extend DDH coverage
 Confirm assay data
 Datamine geology/geostatistical
model
• Geology of UG2 at Dwarsrivier
 Variability due to internal silicate
layers
 Suitable for mechanization but the
variability created an unique 3D
planning requirement
 Geological model needed to include
all layers affecting the stope design
 Mine planning used Mine2-4D to
define stope width based upon
geology model
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
21
The Dwarsrivier geology also presented unique challenges due to the variability of the UG2-UG3 sequence. There
were only limited previous drill data over a small area, therefore a large drill programme with consistent sampling
and analysis were required. Datamine software was to be used to geologically and geostatistically model the
UG2.
The PFS indicated that despite the UG2 variability, the layer package was of sufficient width and grade to support
a mechanised mine. However, the variability created an unique 3-dimensional modelling requirement in that the
geological model needed to include all layers that could affect or influence the stope design.
It was intended to use Mine 2-4D software to define the mine plan based upon the layered geostatistical block
model derived from the geology model, derived from drilling. However, for both the Geostatistics and mine
design, macros and software updates would be required to cater for the complexity involved. Should all of this
work have been deferred to await the geology model, the project timeline would not have been achieved.
21
Process Optimisation
Normal process workflow
1.
2.
3.
4.
Complete drilling, logging, assay, & data capture
Geological interpretation & drafting
Datamine model
Geostatistical modelling
 Linear process
 Estimated time to complete: 16 - 18 months
•
Constraints to optimisation
 Drilling programme
 Geostatistical modelling
 Needed Geology & Geostatistical Block Model to enable
all further work to start
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
22
The solution to the problem was derived from BPM analysis of the process workflow.
The normal process would involve completion of the drill programme, requiring approximately a year, followed
by geological interpretation, construction of a Datamine model, then geostatistical analysis and completion of the
block model, a linear process requiring 16 – 18 months.
Following this process, no further work could start until provision of the model. The constraints were the drill
programme, and geostatistical model, therefore these were examined and optimised.
22
Feasibility Study Process
Geology
Geostatistics
Drill
Programme
Drill Core
Assay
Geology
Model
Reporting
Hand-over
to Team
Geotechnical
Metallurgical
Testwork
Drill Additional
Deflections
Geotechnical
Testwork
Mine Design
Metallurgy
Engineering
Financial
Period
Modelling (Months)
Baseline
Studies
9
10
Select Samples
for Testwork
Geostatistical
Modelling
Reporting
Environmental
Geotechnical
Modelling
Audit &
Signoff
Hand-over to
Team
Select Samples
for Testwork
12
Preliminary
Scoping
Bench-scale
Metallurgical
Testwork
Preliminary
Scoping
Preliminary
Scoping
15
16
Process
Mineralogy
Baseline
Monitoring
17
Bulk Sample
Reporting
19
Bulk Sample
Metallurgy
22
Detailed Mine
Design
Reporting
Reporting
Reporting
Detailed Plant
Design
Detailed
Design
Financial
Modelling
Reporting
Reporting
Reporting
26
30
34
36
 Traditional linear process, using semi-independent or external specialist resources
 Completion of the geology model & assays before geostatistical work & resource estimation
 Time to completion approximately 36 months
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
23
This workflow model shows the traditional linear process, split by discipline, requiring 36 months to delivery of
the feasibility study.
23
Project Constraints & Solutions
Constraints
 Topographic impact on drillhole grid spacing
 Required to model all layers within the UG2 sequence
– UG2 average thickness 1.21m
– UG2A1 average thickness 0.15m
– UG2A2 average thickness 0.05m
 Need for manual input in defining reef facies boundaries
 Geological loss factors
– faults, dykes, pothole, replacement pegmatoid
Solutions
 Prioritise important areas based upon mining strategy
 Model individual layer surfaces using digital terrane models then
combine
 Ongoing geological interpretation to define facies variation & fault
blocks
 Use global factors & defined buffer zones for geological losses
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
24
The constraints were analysed and solutions found. These included the rugged, mountainous topography;
requirement to individually model all layers within the UG2 sequence, itself a challenge for that generation of
Datamine, which was designed for more massive base metal mineralisation, not reef-style deposits; requirement
for interpretation and manual input into defining reef facies boundaries; and requirement for definition of
geological loss factors for various parameters.
These problems were resolved by prioritising the drill programme to deliver early results on important areas
based upon the mining strategy; using digital terrane models to model layer surfaces, then combining them into
3d solids; progressively defining UG2 facies variation based upon drilling, and modelling discrete fault blocks
based initially upon existing airborne magnetics, then drilling; and applying a mixture of global parameters,
polygons of influence (IRUP) and fault buffers for geological losses.
24
Feasibility Strategic Planning
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
25
The final drillhole layout is illustrated on the left, showing the UG2 and Merensky outcrops, shallow area and
mountainous area drilled at a wider spacing.
The middle plan shows the feasibility structure map, indicating the fault blocks, and UG2 layer contours. These
fault blocks were used to split the geology model, enabling it to be delivered in increments as drilling progressed.
The plan on the right shows the UG2 facies plan for the feasibility study mine design indicating areas where
multiple chromitite layers are present. This plan directly influenced the mining schedule as the areas with the
least number of chromitite layers were prioritised.
25
Optimised Programme
Optimised sequence of events
1. Carry out drilling & geological modelling in parallel
2. Use structural blocks to constrain ongoing work as each block
is drilled
3. Perform up-front geostatistical work using modelled blocks
4. Complete the geostatistical modelling immediately following
receipt of final assay results
 Potential time saving: 4 - 6 months
Actual project schedule
 Drilling & geological model – 9 months
 Geostatistical modelling – 3 months
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
26
BPM outlined an optimised process. It was decided to carry out drilling and geological modelling in parallel, using
the structural blocks to enable delivery of discrete constrained entities to the geostatistican for preliminary
geostatistical analysis, semivariogram modelling, and macro development. The geological model would be
completed as soon as possible following drilling, then the final assays would be prioritised to enable optimal
completion of the block model.
This also enabled provision of preliminary block models to develop Mine 2-4D macros and test whether this
approach could work.
A potential time saving of 4 – 6 months, exclusive of the hidden time savings of earlier multi-disciplinary work was
envisaged.
In reality, the actual schedule delivered the geological model 3 days following completion of drilling, in nine
months, and the geostatistical model was completed in three months following drilling.
26
Feasibility Study Optimisation
Geology
Drill
Programme
Drill Core
Assay
Process
Mineralogy
Geology
Modelling
Geostatistics
Geotechnical
Metallurgical
Testwork
Drill
Additional
Deflections
Geology
Model
Preliminary
Geostatistical
Modelling
Geotechnical
Testwork
Reporting
Geostatistical
Modelling
Geotechnical
Modelling
Reporting,
Audit, Signoff
Reporting
Select
Samples for
Testwork
Bench-scale
Metallurgical
Testwork
Bulk Sample
Metallurgy
Environmental
Mine Design
Metallurgy
Engineering
Financial
Modelling
Period
Months
Baseline
Studies
Preliminary
Scoping
Preliminary
Scoping
Preliminary
Scoping
Preliminary
Scoping
1
Select Samples
for Testwork
Bulk Sample
9
10
Baseline
Monitoring
11
Reporting
12
Reporting
14
Detailed Mine
Design
Reporting
16
Detailed Plant
Design
Reporting
17
Detailed Design
Reporting
20
Financial
Modelling
23
Reporting
25
24
 Geology model completed by embedded team member as drilling progresses
 Provision of modelled blocks to enable local geostatistical modelling & macro optimisation
 Removes linearity, completion approximately 25 months
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
27
This shows the optimised process, with the geology model completed by the feasibility team. Removal of the
linearity and geology programme constraint optimised delivery of all aspects of the programme, enabling delivery
of the feasibility study in 24 months.
27
Project Delivery
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
28
This slide illustrates some of the components of the geology and geostatistical work. From top left, the strategy
was influenced by the geology, shown by the schematic north-south section of Dwarsrivier. This was reflected by
the Datamine geology model (top right), and the final structural model, shown with its individual modelled blocks
and an example of the block model (bottom right). The geostatistical block model is bottom left, showing the
individual coding of the layers influencing the mine design.
28
Direct/Indirect Cost Benefits
1.
Opportunity cost of purchase price
•
R5 million/month
2. Project personnel/equipment cost
•
R250, 000/month
 Total (excluding NPV cost) = R20 – 30 million direct saving
Indirect Cost Saving - NPV cost of project delay
• Difficult to quantify – delays in project implementation have a
compounding impact on total project profitability
• Shortening the project delivery time enabled development production
to start immediately post-feasibility building a 1 Mt ore stockpile
• Exploited period of high metals price at project start
• Significantly shortened payback period of capital invested
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
29
The direct and indirect cost benefits of the optimised feasibility programme were assessed.
The direct costs include the interest cost of the ZAR551 million purchase price, estimated at ZAR5 million per
month; and the project personnel and equipment cost of approximately ZAR 250,000 per month. This totals
between ZAR 20 – 30 million in direct cost saving to the project.
The indirect costs are much harder to quantify, as this includes parameters related to the compounding impact of
delays on total project profitability. In addition, decisions taken during the project pre-development phase such
as implementing a trial mining and pre-development study also enabled a 1 million tonne ore stockpile to be
established, which enabled the process plant to operate using high grade, non-weathered ore at full capacity
during the mining ramp-up phase.
This enabled exploitation of a period of high metals prices at the start of the project that in turn significantly
shortened the payback period of capital invested.
29
Metals Price Impact on Revenue
2001 ASSMANG
SAL PT RIGHTS
ZAR551 m
2003 FINISH BFS;
TRIAL MINING
R I C H A R D
H O R N S E Y
2005 PROJECT
DEVELOPMENT
2008 OPERATIONAL
2007 CONCENTRATOR
COMMISIONED
C O N S U L T I N G
( P T Y )
L T D
30
This slide graphically illustrates the points made in the previous slides. The project was sold by Assmang at the
top of a high metals price cycle, and the feasibility study was undertaken during a period of steadily declining
prices with completion during early 2003. The project was deferred during which trial mining was undertaken,
then metals prices entered an upswing during which period the project was released, allowing the process plant
to be constructed while underground development continued to build the surface ore stockpile. The process
plant was commissioned and enjoyed a period of very high metals prices, together with a surface stockpile of high
quality ore before the mine was declared fully operational during mid 2008.
Despite the ensuing sharp drop in metals prices, they still remained at historic median levels, therefore Two
Rivers was able to operate at a healthy margin throughout this period, having enjoyed early high revenues.
Had the geology programme not been optimised, the mine would have been developed during the down-cycle,
and the profitability would have been significantly impacted.
30
Conclusions
 Most technical degrees, apart from Geology, include some aspect of project
management skill training & development. Process management is a key
component of project management
 Process Management is a “common sense” – based discipline, it is not about
“how to do it faster”, but “how to do it smarter”
 Process Management is outcome or objective based
 For Economic Geologists, most of our routine tasks are processes, therefore
may be investigated, and optimised to deliver the best outcome
1. Drillcore logging is a routine task undertaken by most professionals & is
one of the most direct means of acquiring geological data, yet is rarely
optimal – BPM can enable delivery of 90% of data in 8 days
2. Optimising geology delivery to the TRP feasibility study shows BPM
enabled outstanding financial benefits to the project
 Every geologist should develop this analytical skill, aiming to identify
opportunities to apply BPM skills to their own projects & career
R I C H A R D
H O R N S E Y
C O N S U L T I N G
( P T Y )
L T D
31
In concluding, my opening argument was that most technical degrees apart from Geology include project and
process management skill training.
Process management is a common sense discipline, involving analysis of workflow that is not specifically about
how to do it faster, but more importantly, how to do it smarter. Therefore the discipline is outcome based.
For economic geologists, most of our routine tasks are processes, therefore should be investigated and optimised
to produce the best outcome.
Drillhole core logging is a routine undertaken by most professionals, and is arguably the most direct means of
capturing geological data, yet is very rarely optimal. Applying BPM can optimise delivery of >90% of the outcome
data to 8 days post drillhole completion.
For the Two Rivers Platinum project, application of BPM to the geology programme of the feasibility study
generated outstanding financial returns to the project.
It is therefore concluded that every geologist working in the economic geology profession should aim to develop
this analytical skillset, and constantly aim to seek opportunities to apply BPM skills in their own projects and
career.
31