Sampling the supergiant Olympic Dam iron- oxide Cu-U-Au-Ag deposit, South Australia Kathy Ehrig (BHP Billiton Olympic Dam) and Francis Pitard (Francis Pitard Sampling Consultants LLC.) 11 May 2017
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia Kathy Ehrig (BHP Billiton Olympic Dam) and Francis Pitard (Francis Pitard Sampling Consultants LLC.)
11 May 2017
Disclaimer Forward-looking statements
• This presentation contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of
management; closure or divestment of certain operations or facilities (including associated costs); anticipated production or construction commencement dates; capital costs and scheduling; operating costs and
shortages of materials and skilled employees; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities; tax and regulatory developments.
• Forward-looking statements can be identified by the use of terminology such as ‘intend’, ‘aim’, ‘project’, ‘anticipate’, ‘estimate’, ‘plan’, ‘believe’, ‘expect’, ‘may’, ‘should’, ‘will’, ‘continue’, ‘annualised’ or similar words. These
statements discuss future expectations concerning the results of operations or financial condition, or provide other forward-looking statements.
• These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may
cause actual results to differ materially from those expressed in the statements contained in this presentation. Readers are cautioned not to put undue reliance on forward-looking statements.
• For example, future revenues from our operations, projects or mines described in this presentation will be based, in part, upon the market price of the minerals, metals or petroleum produced, which may vary significantly
from current levels. These variations, if materially adverse, may affect the timing or the feasibility of the development of a particular project, the expansion of certain facilities or mines, or the continuation of existing
operations.
• Other factors that may affect the actual construction or production commencement dates, costs or production output and anticipated lives of operations, mines or facilities include our ability to profitably produce and
transport the minerals, petroleum and/or metals extracted to applicable markets; the impact of foreign currency exchange rates on the market prices of the minerals, petroleum or metals we produce; activities of
government authorities in some of the countries where we are exploring or developing these projects, facilities or mines, including increases in taxes, changes in environmental and other regulations and political
uncertainty; labour unrest; and other factors identified in the risk factors discussed in BHP Billiton’s filings with the US Securities and Exchange Commission (the “SEC”) (including in Annual Reports on Form 20-F) which
are available on the SEC’s website at www.sec.gov.
• Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update or review any forward-looking statements, whether as a result of new information or future events.
• Past performance cannot be relied on as a guide to future performance.
Non-IFRS financial information
BHP Billiton results are reported under International Financial Reporting Standards (IFRS) including Underlying EBIT and Underlying EBITDA which are used to measure segment performance. This release may also
include certain non-IFRS measures including Adjusted effective tax rate, Attributable profit excluding exceptional items, Free cash flow, Gearing Ratio, Net debt, Net operating assets, Underlying attributable profit,
Underlying basic earnings per share, Underlying EBIT margin, Underlying EBITDA margin, Underlying EBITDA interest coverage and Underlying return on capital. These measures are used internally by management to
assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review and should not be considered
as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
Presentation of data
• Unless specified otherwise, all data is presented on a continuing operations basis to exclude the contribution from assets that were demerged with South32 and references to Underlying EBITDA margin and Underlying
EBIT margin exclude third party trading activities.
No offer of securities
• Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction, or be treated or relied upon as a recommendation or advice by
BHP Billiton.
Reliance on third party information
• The views expressed in this presentation contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy,
completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by BHP Billiton.
2
Statement of Mineral Resources
Mineral Resources and Ore Reserves
The information in this presentation that relates to the FY2016 Mineral Resources (inclusive of Ore Reserves) was first reported by the Company in compliance with the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves, 2012’ (‘The JORC Code 2012 Edition’) in the 2016 BHP Billiton Annual Report of September 2016. All reports can be viewed at
www.bhpbilliton.com. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of
estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially
changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
Competent Person for Olympic Dam Mineral Resource is S O’Connell (MAusIMM) who is a full time employee of BHP Billiton. Competent Persons for Escondida, Pampa Escondida, Pinta Verde and
Chimborazo Mineral Resources are L Soto (MAusIMM), M Cortes (MAusIMM) who are employed by Minera Escondida Limitada.
Mineral Resource classification (100% basis) for each province, where relevant, are listed in Table 1.
Table 1
3
Province Measured Resource
(Mt)
Indicated Resource
(Mt)
Inferred Resource
(Mt)
Total Resource
(Mt)
BHP Billiton
Interest (%)
Olympic Dam
1,390 @
0.95% Cu,
0.29kg/t U3O8,
0.40g/t Au,
2 g/t Ag
4,800 @
0.78% Cu,
0.24kg/t U3O8,
0.34g/t Au,
1 g/t Ag
4,220 @
0.70% Cu,
0.24kg/t U3O8,
0.27g/t Au,
1 g/t Ag
10,400 @
0.77% Cu,
0.25kg/t U3O8,
0.32g/t Au,
1 g/t Ag
100
Escondida district
Escondida 5,470 @ 0.64% Cu 3,280 @ 0.50% Cu 11,200 @ 0.50% Cu 57.5
Pampa Escondida 294 @ 0.53% Cu 1,150 @ 0.55% Cu 6,000 @ 0.43% Cu 57.5
Pinta Verde 109 @ 0.6% Cu 87 @ 0.52% Cu 52 @ 0.48% Cu 57.5
Chimborazo 139 @ 0.50% Cu 84 @ 0.60% Cu 57.5
Today’s Presentation
•Olympic Dam Operational Overview
•Background
•Minerals
•Ore Characterisation (a.k.a. Geomet)
•Predicting Process Performance
•Conclusions
4
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Cu Au U
bn-cp 1.5 3.5 2.5
cp-py 2.0 3.6 8.8
Sampling constant, K
Sampling – It has been a long journey
5
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
TOS
TOS
DARK-SIDE X
Olympic Dam Operations
History
• Discovered by WMC in July 1975
• First underground access in 1982
• Production commenced in 1988
• BHP Billiton acquired WMC in July 2005
Current operation
• Mechanised sublevel open stope mining
• Grinding and sulphide concentrator
• Hydrometallurgical circuit- U extraction
• Single stage flash smelter
• Acid plant production
• ER-EW Cu refineries
• Precious metals refinery (Au, Ag)
Mechanised sublevel longhole open stope mining
Grinding and concentrator Hydrometallurgical treatment
Smelting and acid production Cu refining and PM production
Fully integrated circuit
6
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Olympic Dam Final Products FY16*
Ag 917,000 ounces
Cu 202,800 tonnes
Au 117,700 ounces
UOC 4,363 tonnes
* BHP Billiton Production Report for the Year Ended 30 June 2016 http://www.bhpbilliton.com/home/investors/reports/Documents/2016/BHPBillitonAnnualReport2016.pdf
7
Cu and U are co-products
Cu ~70-75% of revenue1
UOC ~20-25% of revenue1
1based on historical averages
Au and Ag are by-products
~5% of revenue1
Copper cathode, UOC, and gold and silver bullion are produced at Olympic Dam
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Olympic Dam – a world class deposit (IOCG-U)
0
20
40
60
80
100
120
140
Esco
nd
ida
# A
nd
ina
# E
l T
enie
nte
# C
hu
qu
icam
ata
OL
YM
PIC
DA
M
Colla
hua
si
Gra
sbe
rg
Oyu
To
lgo
i
Can
an
ea
Pe
bb
le
0
500
1,000
1,500
2,000
2,500
OL
YM
PIC
DA
M
Alu
m S
ha
le (
Sw
ed
en)
Elk
on
Imo
ura
ren
Kvan
efje
ld (
RE
E)
Husa
b
McA
rth
ur
Riv
er
Inka
i
Letlh
aka
ne
Cig
ar
Lake
0
50
100
150
200
250
300
Witw
ate
rsra
nd C
am
p
Gra
sbe
rg (
Cop
per)
OL
YM
PIC
DA
M
Pe
bb
le (
Cop
per)
Ke
rr-S
ulp
hu
rets
Mu
run
tau
Su
kh
oi L
og
Nata
lka
Lih
ir
New
mon
t -
Nevad
a
Million tonnes Copper Thousand tonnes U3O8 Million oz Gold
Current Production
• Olympic Dam
• McArthur River
• Inkai
• Cigar Lake
Chart depicts contained metal. Sources: Company Annual Reports, press releases and International Atomic Energy Agency (BHPB f igures as at 30 June 2015, all other figures as at Sep 2014). Witwatersrand figure is BHP Billiton estimate and is approximate only. # Based on Codelco reported figures at 0.2% Cu cut-off grade. BHP Billiton Mineral Resources for Olympic Dam and Escondida district (includes Pampa, Pinta Verde and Chimborazo) are on a 100% basis. The FY2015 Mineral Resource information for Olympic Dam and Escondida district on this slide is extracted from the report entitled BHP Billiton Annual Report 2015. The report can be viewed at www.bhpbilliton.com. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. A complete breakdown by Resource classification is provided on slide 3, table 1.
8
~760
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Gigantic Base Metal-Bearing Deposits
9
Largest accumulations of base metals on the planet,
+100 year mine life, polymetallic
1. Norilsk Ni-Pd-Pt-Cu
2. Olympic Dam Cu-U-Au-Ag
How do we produce mining plans for the future of these deposits?
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Background
10
• Ore deposits are mining companies largest assets
• Realise the value, how?
– SAMPLE it
– measure the chemical-mineralogical-physical properties of ore AND waste
– produce 3-D spatial models of the measured properties
– mine plans/schedules, design process to extract the value, build and operate
the facilities, generate wealth.
• Basic stuff…right?
• Yet, as an industry, we fail on a regular basis because we didn’t properly do this
(McCarthy, 1999, 2003, 2004, 2011, 2014….)!
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Mining Industry Opportunity: Think Minerals, Not Elements
11
Minerals, minerals, minerals, minerals
• Elements occur as minerals.
• Ore deposits are variable mixtures of minerals.
• Extractive metallurgy extracts elements from minerals.
• Minerals are the fundamental drivers of metallurgical performance.
Elements are proxies for minerals
• Historically, assaying at the deposit scale was the only option.
• Mineral abundances can now be estimated/measured.
• No longer necessary to rely on assaying alone to characterise an
ore deposit.
upper image source:
www.spiriferminerals.com lower image source:
www.museumvictoria.com.au
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Two Simple Relationships
At Olympic Dam, we predict short-, medium-, long-term metallurgical performance:
12
mineral (wt%) = ƒ(sample composition)
‘Met Performance’ = ƒ(mineralogy, ore texture, process conditions)
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Olympic Dam Footprint and Geology - Summary
13
Simplified deposit geology at ~450m beneath the surface
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
680000E 682000E
6630000N
6632000N
Roxby
Downs
Granite
Olympic Dam Breccia Complex
biotite ‘out’
altered, weakly brecciated
RDG
Fe ~5%
N
0 1 2 km
resource outline
Fe 20%
2014 image RESOURCE OULINE
RD1, RD10
Olympic Dam
ODBC ~50 km2 and resource ~ 6 x 3 km x 800 m
Sampling of the Deposit
14
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
his
torical pro
duction a
reas
new
pro
duction a
reas
Surface Diamond
Drill Holes
UG Diamond
Drill Holes
+450 km of
UG development
~ 6
km
Volume sampled ~0.0001 %
Granite- to Hematite-Rich Breccias (dominant lithotypes)
15
~3% Fe
~60% Fe • Intense brecciation and texturally destructive hematite-alteration of RDG and other lithologies
• Complex textures, yet simple mineralogy
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Element - Physical Property Correlations
16
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Fe wt%
Co
ncen
trati
on
(w
t%)
Al, Be, Ca, Hf, K, Li, Mg, Mn, Na, Rb, Si, Th, Ti, and Zr
Ag, As, Au, Ba, Bi, Cd, Co, CO2, Cr, Cu, F, Fe, In, Mo,
Nb, Ni, P, Pb, S, Sb, Se, Sn, Sr, Te, U, V, W, Y, Zn, REE) mineral (wt%) = ƒ(sample composition)
Measured Modal Mineralogy (via MLA on >15,000 samples)
17
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RDG RDG-ser 2-4 4-6 6-8 8-10 10-15 15-20 20-25 25-30 30-35 35-40 40-45 45-50 50-55 55-60 >60
Mo
dal
Min
era
log
y
(wt
%)
Fe (wt%)
mafic+mag
Na-plag
orthoclase
quartz
sericite
chlorite
sulfides
fluorite
barite
siderite
hematitemineral (wt%) = ƒ(sample composition)
Olympic Dam Simplified Ore Processing Flow Diagram
Underground Mining ROM Stockpile Grinding Sulphide Flotation
Cu-Conc
Leach
Tailings Leach
Smelting Cu-anode
Electrolytic
Refining
Electrowinning
Slimes
Treatment
Cu-U SX
Counter Current
Decanation
EW
Cathode UOC
ER
Cathode
Au
Ag
bullion
U precip as ADU / calcination to UOC
Flo
tati
on
Tail
ing
s
18
Cu and U Cu and U
Cu (U)
U (Cu) U (Cu) U (Cu)
U
Cu
U (Cu)
Cu Cu (U) Cu
Cu and U
Dust leach
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Olympic Dam Mineralogy
Sub-Econ Minerals
(may be deleterious) Gangue Minerals Economic Minerals
Olympic Dam ‘Ores’
>100 minerals
(but 15 process critical minerals)
• Cu-Sulphides (py-cp-bn-cc)
– concentrate grade
• uranium minerals (uran-coff-bran-hem)
– uranium recovery
• Au-Ag (electrum, native Ag, tellurides)
• concentrate and cathode quality
– As-, Se-, Bi-, Te-, Sb-minerals
– Pb-, Co-, Zn-, Mo-, REY-minerals
• Hematite grinding
• Quartz grinding
• Sericite slimes
• K-feldspar
• Chlorite acid, gelling
• Siderite acid
• Fluorite
• Barite
• Wide spectrum of mineral mixtures = many ‘ore types’
• Definitions of ore types are dependent on the subprocess
19
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
‘Met Performance’ = ƒ(mineralogy, ore texture, process conditions)
Geological and Mineralogical Documentation
Documentation consists of:
• Geological mapping of +450 km of underground development
• Geological logging of ~2.6 M metres of diamond drill core
• All diamond core is photographed
• All diamond core (ore and waste) is assayed for +26 elements
• Density and magnetic susceptibility on all assayed samples
• Abundances of 15 minerals predicted on every sample
• Quantitative mineralogy (MLA and QXRD) on >15,000 samples
• + 62 elements measured on all mineralogy and met test samples
• Extensive mineral composition database (LA-ICPMS and EPMA)
• Ongoing geological internal and external research projects
20
Olympic Dam Resource Model
• ~ 20 million blocks in the resource model
• 5x10x5m up to 30x30x15m block size
• ~11,000 diamond drill holes
• ~1.7 million assayed samples
• Spatial distribution and concentrations models for 15 minerals and density
• models for Cu, U, Au, Ag, Cu:S, plus 18 other elements
We do even more!
Geometallurgy-Enabled Resource Block Model
21
Geometallurgical testing (1,000x less samples)
• ~2,500 samples with full metallurgical testing
• Comminution, rougher-cleaner flotation, and leaching tests
• Ore characterisation tests
• Mineralogy/assaying on sized samples of all met testing products
• Mineral (wt%) = ƒ(sample composition)
• ‘Met Performance’ = ƒ(mineralogy, ore texture, process conditions).
Ore characterisation (~100x less samples)
• ~15,000 samples with assays for +62 elements
• Mineralogy (MLA and XRD)
• Mineral (wt%) = ƒ(sample composition)
Resource drill core assaying
• ~1.7 million assayed samples
• Density and geological/geotechnical logging
• 15 estimated minerals for every assayed sample
• Most extensive database available!
Met
Testing
Ore
Characterisation
Resource Drill Hole Samples
(assayed + estimated mineralogy)
Resource Block Model
(~ 10Bt resource)
~2,500
~15,000
~150,000
~1.7M
samples
~20M
blocks
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Quantitative Bornite-Chalcopyrite-Pyrite (-400mRL)
bornite chalcopyrite pyrite
wt% sulfide
Cu (wt%)
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017 22
Quantitative Hematite-Orthoclase-Sericite (-400mRL)
hematite orthoclase sericite
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017 23
Quantitative Siderite-Fluorite-Barite (-400mRL)
siderite fluorite barite
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017 24
Quantitative Mo-Pb-Zn (-400mRL)
Mo
proxy for molybdenite
Pb
proxy for galena
Zn
proxy for sphalerite
25
Geometallurgy – Predicting Process Performance
26
• 26 elements
• physical prop
• geology, etc
Drill Core
-
0.50%
1.00%
1.50%
2.00%
2.50%
80.0%
82.0%
84.0%
86.0%
88.0%
90.0%
92.0%
94.0%
96.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Flo
tati
on
Co
pp
er
He
ad
Gra
de
(%
)
Flo
tati
on
Co
pp
er
Re
co
ve
ry (
%)
Financial Year
Flotation Copper Recovery
Copper Recovery
Copper Grade
Optimal Mine Plans/Schedules
for any mine plan or plant configuration
$$$
$$$ $$$
Supported by:
• assays & mineralogy
• metallurgical testing
• TOS principles
• QAQC programs
Geomet Predictive Models mineral (wt%) = (assays)
‘recovery’ = (assays, minerals)
Maps
• + 26 elements
• density and magnetic susc
• + 50 metallurgical parameters
* Economic return on each block *
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Conclusions
27
• Sampling underpins all of our resource estimation and performance predictors.
• We use TOS principles when collecting and subsampling all geology and
geometallurgy samples.
• We have well established QAQC programs for diamond drill core assaying and
geometallurgical testing.
• We seek expertise on a regular basis.
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017
Don’t become disfunctional when things go wrong – FIX IT!
28
Hear no evil See no evil,
even though he is still looking
Speak no evil
Pitard Sampling Clan
Sampling the supergiant Olympic Dam iron-oxide Cu-U-Au-Ag deposit, South Australia
11 May 2017