2011_2013 Petea B1 Hill Reconciliation

Ore ReconciliationMGOQCSep 2014Petea B1 Hill Reconciliation 2011-2013

ObjectiveTo address the root cause of the systematic bias of the underestimation of ore tonnage in the East Block To reconcile by hill basis even though the actual mine production grades are pro-rated by hill (blending at Screening Station). Note : Petea B1 still active until now

Contents:Technical Reconciliation ProcedureTonnage and Grades ReconciliationSummary

Technical ReconciliationProcedure

Concept technicalReconciliation : compare actual mine production (tonnages and grades) to block model completely (all mined out) whether using pit or notIf not completely mined out, than partial reconciliation can be done by compare actual mine production to mined block model and unmined block model at area that already mined out and release area (due to disposal or revegetation concern)Previous reconciliation method using surface method (topography week by week) with out adding unmined block model to calculation before compare to mine production (before 2014)

Volume Reconciliation Using same area at top & bottom ore survey measurement (with limited measurement) at Sorowako we have about 33% loss at bottom profile that not calculated at previous tonnage reconciliation method.

Sketch of Top & Bottom Ore (TOR & BOR)Original TopographyTOR BMBOR BMTOR ActualBOR ActualOver BurdenBlue ZoneROM (Ore Thickness Actual)ROMOBOBROMBZROMROMBZOur Survey

DataBlock model (1423pb1156s & 1129pb1156s)Topography SurveyActual Mine Production (2011-2013)Bottom Excavation (grid mesh 2011-2013)Mine Out (sample coordinates & boundary)Disposal boundaryRevegetation boundary

Bottom Excavation 2011-2013Due to limited mined out survey measurement area (only 33%), than the best way is to digitize every week topography (when active mining) to get bottom mine excavation, because most area become disposal after mine out. After get digitized bottom excavation, than replace points with mined out sampling at some areaWeakness : at release area (no mine out sampling) have opportunity to get bias data (lower elevation) due to quarry activity.

Bottom Excavation : some area that have mined out sampling replace original point to adjust real elevation of mined outOriginal Bottom excavationBottom excavation after join mined out sampling surveyQuarry activity

Original Petea B1 Early 2011

Mined Out (light blue), Disposal and Revegetation Area (dark blue)Bottom excavation

Tonnage and Grades Reconciliation

Raw Data of Comparison New Block Model 1423pb1156s and Old Block Model 1319ptb1156s (Left part without using pit and right side using pit)Note: Data still in volume+1% Ore Volume different between block models

Reserves comparison between using pit (p_pb1_1319) and without pit for old block model 1319ptb1156s Unmined Reserves about 3 MWMT (36% from total mined + unmined) Reserves different is small : pit optimized well

Reconciliation : Surface Method (Existing Procedure) versus Partial Mining Method using new block model 1319ptb1156sROM reconciliation change about -41% absolute (-56% relative) from previous method and chemistry is better. Note: production report from cost prod section from 2011-2013 (all production) and block model calculation using original topography and bottom excavation (not using week by week topography).

Reserves comparison between using pit (p_pb1_1319) and without pit for new block model 1423pb1156s Unmined Reserves about 3 MWMT (38% from total mined + unmined) Reserves different is small : pit optimized well

Reconciliation : Surface Method (Existing Procedure) versus Partial Mining Method using new block model 1423pb1156sROM reconciliation change about -44% absolute (-61% relative) from previous method and chemistry is better (except for Co). Note: production report from cost prod section from 2011-2013 (all production) and block model calculation using original topography and bottom excavation (not using week by week topography).

% Error at ROM Reconciliation (Using Pit)For Petea B1, major error at ROM reconciliation cause by : Technical procedure that must be using total block model about 41% (absolute) or 56% (relative)

Whereas for Ni grade new block model is better.

2005-2013 5 Big Hills Sorowako & Petea B1 Reconciliation

Summary

Summary Previous reconciliation method is showing apple to apple reconciliation (how much we mined versus block model that we mined) but not showing completely reconciliation there are unmined reserves due to shifting up at bottom ore (actual already mined out) and release area (disposal/ revegetation) since 2014 these unmined reserves added to reconciliation method.For Petea B1 using new block model 1423pb1156s with inpit: unmined reserves about 3 MWmt and ROM reconciliation value change from 117% at previous reconciliation (surface) method to 73% at partial method, whereas for OB & Grades value is not significant. This value will still change until all area completely mined out. An Adjustment for existing method reconciliation database could be done by adding unmined reserves from 2005-2013 (all hills) but need time to compile data especially bottom excavation points.For exact calculation of reconciliation, complete reconciliation method is very recommended. Watulabu S, Petea A and Petea BO are next priority to be calculated.