REL Co. CEO’s 8 May 2013 Erik Westman Associate Professor Virginia Polytechnic Institute and State University 108A Holden Hall Blacksburg, VA 24060 Professor Westman, This report presents all the components needed for planning, starting, operating, and closing the Bass River Mine. This site will be an iron mine in south eastern New Jersey near the cities of Philadelphia and New York City. This report provides the basic information needed to start a mining project near Bass River New Jersey. The material is based off drill hole data provided to the company and this design has been underway for almost an entire year. There is information regarding the exploration of the site and the determination of its economic feasibility. The report also contains a mine site design, the equipment needed, and maps of surface/processing facilities needed. Included are all regulations presented by the state of New Jersey and the U.S. government. The report contains theoretical calculations for all the production needed to completely mine all ore economic at the site. Finally, the report contains the information for the closure and reclamation of the mine site. We are presenting the mine design with the hopes that all components are ready so the site can be purchased. Please contact us at your soonest convenience with all questions and comments so that we may continue toward our goal at the Bass River Mine site. Sincerely, REL Co. CEOs Lucas Carver, Evan Halleran, Annette Thomas, Ryan Ward Encl. 16 Chapter Reports, Appendixes, and Works Cited
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Senior Design Project for Mining Engineering at Virginia Tech
This is my completed senior design project for Mining Engineering Majors at Virginia Tech. This site is an iron mine located between New York City and Philadelphia.
Group members: Evan Halleran, Ryan Ward, Annette Thomas, Lucas Carver
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Transcript
REL Co. CEO’s
8 May 2013
Erik Westman Associate Professor Virginia Polytechnic Institute and State University 108A Holden Hall Blacksburg, VA 24060 Professor Westman, This report presents all the components needed for planning, starting, operating, and closing the Bass River Mine. This site will be an iron mine in south eastern New Jersey near the cities of Philadelphia and New York City. This report provides the basic information needed to start a mining project near Bass River New Jersey. The material is based off drill hole data provided to the company and this design has been underway for almost an entire year. There is information regarding the exploration of the site and the determination of its economic feasibility. The report also contains a mine site design, the equipment needed, and maps of surface/processing facilities needed. Included are all regulations presented by the state of New Jersey and the U.S. government. The report contains theoretical calculations for all the production needed to completely mine all ore economic at the site. Finally, the report contains the information for the closure and reclamation of the mine site. We are presenting the mine design with the hopes that all components are ready so the site can be purchased. Please contact us at your soonest convenience with all questions and comments so that we may continue toward our goal at the Bass River Mine site. Sincerely, REL Co. CEOs Lucas Carver, Evan Halleran, Annette Thomas, Ryan Ward Encl. 16 Chapter Reports, Appendixes, and Works Cited
Bass River Mine Site
Table of Contents i
TABLE OF CONTENTS
Table of Contents ......................................................................................................... i
List of Figures ...............................................................................................................
List of Tables ................................................................................................................
1. General Mining Plan ................................................................................................ 1
Every person hired to work at Bass River Mine will go through the REL Co. Standard of
Mining Safety Training program prior to working at the mine. The program will include a
classroom portion, a mine tour, a written test and an oral test. The training program will cover
all necessary areas in 30 CFR Part 46 (MSHA). Sections covered by the Standard of Mining
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Health and Safety 56
Safety Training program include new miner hire, experienced miner hire, task training, annual
refresher training and site hazard awareness training. All training will be recorded and certified
by MSHA and all records will be kept on site in the office. All training occurs during normal shift
hours and miners are paid for their time during training.
The Standard of Mining Safety Training program consists of 24 hours of training that
focus on helping miners understand rules and regulations as well as the importance of them.
Avoidance and prevention of hazards at the mine site will be covered to reduce incidents at the
mine. Health and Safety standards will be covered so miners understand their rights to a safe
work environment. The emergency response plan for Bass River Mine will be reviewed during
the training program. A review of miner’s rights and representatives will be given. Respiratory
device use will be covered to help prevent serious harm the miners in case of a serious incident.
Finally a first aid course will be given to all miners within four months of their employment.
Experienced miners will be given 10 hours of training covering all topics listed by MSHA
for newly hired experienced miners. Every 12 months each miner will go through an eight-hour
annual refresher course that will review miner health and safety issues as well as any new
hazards at the mine site. If a miner is assigned a new task he or she will go through new task
training by a qualified experienced miner or the mine foreman if he is capable of such training
(MSHA).
7.5 Inspections
The Mine Safety and Health Administration will be responsible for all inspections
conducted at the mine site. Since the mine is a surface mine, there will be a minimum of two
Bass River Mine Site
Health and Safety 57
unannounced inspections per year conducted by MSHA. Mine personnel may accompany the
MSHA officer during these inspections. The MSHA officer may also choose to attend any safety
meeting during the course of the inspection. The MSHA officer may also converse with mine
employees as part of the inspection. Complaints from the neighborhood surrounding the mine
property as well as internal complaints, warrants an inspection at any time in addition to the
two mandatory inspections per year.
The evaluation criteria during inspections are noise, dust control and electrical
compliance issues. Other than these issues, the mine is evaluated as a whole for any
compliance issues. Volume IV of the program policy manual at the MSHA website lists laws that
need to be followed for metal/nonmetal mines. A camera might be used during the inspection
to gather evidence in case of an accident. As part of the inspection, dust and mist surveys may
be conducted to evaluate control measures. The maximum values permissible for noise and
dust can be found in 30 CFR, Parts 56 and 57. In cases where dust or noise values exceed the
accepted limit, a citation may be issued. In extreme cases, especially when a violation results in
a serious hazard, citations may contain legal penalties, including jail time. Violations leading to
serious hazards are termed significant and substantial.
7.6 Emergency Response Plan (ERP)
MHSA issued a final rule implementing Section 2 of the Mine Improvement and New
Emergency Response (MINER) Act of 2006. It states that:
Mine operators to increase the availability of emergency breathing devices, provide
improved training on the use of the devices, improve emergency evacuation and drill
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Health and Safety 58
training, install lifelines for emergency evacuation, and require immediate notification
of MSHA in the event of an accident (Mine Safety and Health Administration (MSHA) -
Home Page).
This Act caused Bass River Mine to make a revised version of their Emergency Response
Plan. The devised emergency response plan was also a result of risk assessment of all the
potential dangers and emergency situations that might arise at the Bass River Mine. Mandatory
training will be provided to every employee at the mine.
In case of an emergency at Bass River Mine, a siren will be sounded throughout the
mine and the nature of the emergency will be broadcast on all radio frequencies. The first step
in any emergency is to evacuate from the location. The response plan must consulted during an
emergency to develop an appropriate response depending on the nature of the accident. The
foreman at the site determines the nature of the situation after consulting with the health and
safety director. MSHA must be contacted regardless of the nature of the emergency. An
adequate number of communications and tracking devices will be provided throughout the
mine to ensure speedy emergency response. All the equipment including communication
devices at the mine needs to be in compliance with the plan at all times. Audits will be
conducted on a yearly basis to include improvements to the ERP at Bass River Mine. A Mine
rescue team will be formed, consisting of some of well trained employees. Additional
information for all employees on the ERP is provided on the MSHA website. All employees at
Bass River Mine will also be encouraged to keep up with the incident and fatality reports on
Bass River Mine Site
Health and Safety 59
MSHA’s website to increase awareness of potentially dangerous situations that might arise at a
surface mine.
7.7 Hazard Identification and Controls
Maintaining a high standard of health and safety is important to REL Co. for many
different reasons. Determining different hazards and controlling these problems can help to
provide a safe worker area for our miners. Bass River mine is an open pit mine so some hazards
to consider are highwall failure, respirable dust, noise, electrical, and powered equipment.
The first hazard that can be identified is highwall failure, which occurs when the pit wall
becomes unstable because of poor design or bad blasting techniques. This failure can cause
large rocks to fall from the wall and injure employees and/or damage equipment. Two steps will
be taken to control highwall failure. The first and most important step is to design the highwall
in a way that prevents failure. By knowing the characteristics of the rock the highwall is made of
it will be possible to obtain the strength, stress and strain. With these values, a correct design
can be created. Another way to address the danger of highwall failure is employee education.
Education is important in order to of the unpredictable nature of a highwall, even if it is well
designed. Employees will be told to watch for cracks in the wall, new water springs appearing
and other signs of deterioration.
Respirable dust is a hazard that appears in above ground mining if a large amount of
dust is inhaled. To maintain low dust levels, a water truck will be used on haul roads to keep
dust down and equipment, such as crushers, will have built in sprayer systems. If employees
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Health and Safety 60
must work in areas where dust is a problem, they will be required to wear respirator masks and
to keep the area ventilated with a fan to circulate fresh air.
Electrical hazards are common in mines, predominantly including exposed wires and
hazards caused by working on equipment. If working areas are not maintained, wires can be
cut, exposing employees to high voltages that can be lethal. Working on equipment that has
not been properly locked out can be equally deadly. To help to control the hazards REL Co. will
maintain high standards among workers that will keep work areas safe and clean. If an exposed
wire is discovered, it will be fixed by covering the wire with electric tape or replacing the wire.
REL Co. will have a training course that explains the procedure of locking out equipment to
prevent injury and they will also have posters in areas and locks that will easily educate
employees to promote a safe environment.
A major concern for an above ground mine is noise pollution because the noise effects
the employees at the mine and the surrounding community. Noises can come from many
different pieces and can range from the noise a motor makes to the sound of material being
loaded into haul trucks. Equipment operators and plant workers are the most likely to suffer
from noise pollution and will be provided adequate hearing protection such as ear plugs or ear
muffs. The noise that travels outside the quarry should dissipate before it reaches the
surrounding community because of the location of Bass River mine.
The final consideration for REL Co. is the danger of powered equipment. This equipment
can cause a serious threat to the workers in the vehicles and the workers around the vehicles.
Drivers can lose control of their vehicles if haul roads are designed poorly causing crashes that
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Health and Safety 61
injure both the driver and the surrounding equipment. Workers around trucks are also at risk of
being hit by vehicles because a driver cannot see them. To help control these hazards, cameras
will be installed on large vehicles such as loaders and haul trucks. This will allow drivers to
observe the area behind their truck that is normally a blind spot. Haul roads will also be
designed to help prevent accidents. Berms will also be put into place along haul roads to
prevent trucks that veer off of the road.
Bass River Mine Site
Surface Facilities 62
REL Company
Chapter 8
Bass River Mine Project: Surface Facilities
Bass River Mine Site
Surface Facilities 63
8.1 Introduction
The chapter will cover all the surface facility requirements for the Bass River Mine. The
surface facility requirements include the layout, structure description and the cost associated
with the construction and maintenance of the facilities. The surface facilities constructed at
Bass River Mine will be responsible for meeting the electrical, mechanical, maintenance and
storage needs of the mine. The surface facility layout will also house the administrative
department for Bass River Mine.
8.2 Surface Construction
Bass River Mine will have all the essential operational facilities located at a centralized
location. These facilities will include the administrative office, a bathhouse, parking garages and
storage buildings among other building and access facilities. The warehouse will be placed in
the middle of the facility complex, attached to a light vehicle parking garage. The bathhouse
connected to the administrative office will be placed to the southeast of the warehouse. The
bathhouse and the warehouse are within close proximity to each other to allow ease of access.
The heavy vehicle garage, the maintenance/fabrication shop and the auxiliary storage building
will be built on the southeast side of the warehouse adjacent to the administrative office. The
main objective of placing the former facilities close to each other is to ensure speed and
efficient maintenance of equipment. The storage lot will be placed to the northeast of the
warehouse and the main parking lot and the fuel station will be to the north of the warehouse.
There will be a second, smaller parking lot behind the administrative building. The parking lot
will have enough capacity to service the vehicles of employees working at Bass River Mine
Bass River Mine Site
Surface Facilities 64
administrative office. There will be a building for storage of explosives at the southwest corner
of the smaller parking lot. The building will be built at the considerable distance from all the
other surface facilities to ensure safety of the mine and its employees.
A power distribution building and a kVA substation responsible for providing power to
the surface facilities at Bass River Mine will be built. The building will be located behind the
auxiliary storage building and will have power lines running throughout all of the surface
facilities. The surface facilities will be fenced in at the southwest corner of the warehouse.
Apart from power lines and fencing, roadways will be built to simplify access. A basic design of
the surface facility layout is provided in the Appendix H as Figure H-I.
8.3 Surface Structures
A mine is comprised of different structures that all serve a distinct purposes. The
primary purpose of the buildings near the entrance will be employee and administrative
service. A warehouse and a shop to house different mechanical and electrical components will
be necessary. Building sheds will also be constructed to hold bulk items that will be used
frequently. Finally, structures such as extra storage buildings and a power distribution building
will be built.
A 5,000 square-foot building will contain the mine bath house and will be located next
to an identical building housing the administrative offices. The administrative building will
contain the computer and data equipment that mine personnel will use to conduct day to day
operations. The bath house will provide shower facilities and storage for employees personal
affects. Also located at the mine entry will be a security building of 2,200 square-feet. There will
Bass River Mine Site
Surface Facilities 65
be surveillance equipment to monitor the activities of the people who come in and out of the
mine. This building will also take care of the check-ins of vehicles and deliveries.
Assistance with mechanical needs and fabrication will be provided by a 5,625 square-
foot shop. It will contain all of the tools that are need for the repair of all equipment on the site
and have a full fabrication area to assist with random needs of the mine. A 1,750 square-foot
light vehicle garage and a 9,000 square-foot heavy vehicle garage will be used for everyday
upkeep of the vehicles and storage during non-working hours.
A 40,000 square-foot warehouse will be built with receiving docks on each side and
provide storage for all the extra parts for the processing plant and mine. The warehouse will
house all mining tools that are not stored in the employee storage in the bath house. A 5,625
square-foot auxiliary storage shed will be built to house extra equipment and material that is
not being kept in the garages or the warehouse. Things such as oil and lubrication for the non-
vehicular equipment will be stored in the auxiliary shed. There will be two specific reinforced
buildings that will be built to store all explosives on site. One will be 900 square-feet and the
other will be 2,500 square-feet.
There will be two onsite lots for parking and storing vehicles. The parking lot is 15,000
square-feet and will be used for employee and guest parking with a capacity of around 70
vehicles. The storage lot will be 90,000 square feet and used to store extra equipment that is
not being used and for spent mechanical items that will soon be removed from the site.
Finally, a power distribution building will be built to supply the rest of the mine with
power that is created at the substation. The distribution building will contain all of the switches
that are run to the equipment in the plant. It will have a lock out station with locks and tags for
Bass River Mine Site
Surface Facilities 66
safely shutting off equipment during maintenance. The building will be 1,200 square-feet and
will have rubber floor mats to protect employees that go inside to lock out equipment. There
will also be a small computer system in the building that will monitor the activity of the
different pieces of equipment in the mine. The computer will provide the ability to shut down
different components of the mine in case of an emergency.
8.4 Support Facilities
Bass River Mine is located next to multiple towns such as Tuckerton and Manahawkin,
which allows the mine to connect to the water and sewage systems of Tuckerton. There will be
lines of water for buildings for washing and also clean water lines for employees, which will be
connected to the administrative building. Workers will be given coated metal water bottles to
ensure the safety of the water. Secondary clean water lines will run to the light vehicle garage
and the maintenance/fabrication shop.
A KVA substation will be used to power all operations for the Bass River Mine, which will
be run by Atlantic City Electric. The substation will be inaccessible to miners at the site for
safety and a concrete slab will be below the substation and extend out with a fence
surrounding the area. Power lines will be connected from the substation to the guard post, the
bathhouse and the auxiliary storage. A series of power lines will run to the fabrication shop and
to the heavy and light vehicle garages from the auxiliary storage. Lamp posts will be located
next to the entrance and the guard post to make sure there are no trespassers. External lighting
will be located on the building to illuminate the roadway to keep miners safe from vehicles and
to give a safe walkway to the parking lot. The parking lot and storage lot will both have lamp
posts to provide vision for anyone trying to find their car or an item in the storage lot.
Bass River Mine Site
Surface Facilities 67
A weigh station will be located just before the entrance requiring the weight leaving to
be recorded allowing for better efficiency. A chain link fence ten feet high will run around the
entire property of the mine site to prevent civilian accidents and to prevent theft. A small
auxiliary storage building will be located near the front of the property next to the fabrication
shop.
8.5 Surface Facility Costs
Determining the cost of various surface facilities at Bass River Mine was done using
multiple sources. Most of the sources were websites pertaining to the specific building style
and type. Information was also back checked against the Mining Cost Service provided by
CostMine. From these sources, an estimated price for building construction was developed. The
building construction price is called the “capital cost” and includes the cost of material, delivery
and construction labor. The cost of replacement for certain facilities and areas was also
considered. Gravel lots need multiple replacement cycles in order to provide a smooth driving
and parking service. Other buildings may need replacement in the future, but it has yet to be
determined. Therefore, the replacement costs are set at zero. Operating and maintenance costs
for surface facilities were more difficult to calculate so a separate average cost per square foot
was determined for office areas, shops/garages and warehouses.
All the figures determined by cost analysis are estimates. This means that the actual
figures may vary at differing levels. Total cost for the project is estimated to be just shy of
$2,000,000. Unit capital cost for the expected 42 million ton extraction per year is $0.49 per
ton. Unit operating and maintenance cost for expected extraction is $0.05 per ton. The actual
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Surface Facilities 68
figures are shown in Table 8-I. The entire summary of costs for the surface facilities can be
found in table H-I in Appendix H.
Table 8-I: Surface Facility Total Cost Summary
Capital Cost $
1,929,264.88
Replacement Cost (annual)
$ 77,095.75
Operating Cost (annual)
$ 136,527.75
Maintenance Cost (annual)
$ 54,658.00
Unit Capital Cost ($/ton)
$ 0.49
Unit O&M Cost ($/ton)
$ 0.05
Bass River Mine Site
Detailed Mining Plan 69
REL Company
Chapter 9
Bass River Mine Project: Detailed Mine Design
Bass River Mine Site
Detailed Mining Plan 70
9.1 Overview
REL Co. will extract iron magnesium from the Cohansey Formation in Bass River, New
Jersey, and sell the product to steel manufacturers. Bass River Mine is an open pit mining
operation that will produce 7.1 million tons of iron magnesium ore per year, at close to 100%
iron. The exploration results show that the mine pit will be approximately 1400 acres, placed in
the middle of the mining property. The higher grade ore is found at very shallow depths
between five and 50 feet below the surface. The mining property extends to double the size of
the pit, leaving room for stockpiles, overburden and distance to nearby structures to lower
values of noise and dust. The processing plant and other surface facilities are located to the
north of the pit on level ground.
Preliminary excavation of the overburden is done by one CAT 3060-FS and one CAT
3018-FS. Haul trucks will transport the excavated overburden to the southern part of the mine
property and a muck pile will be created. After the overburden is removed, blasting will be used
to fracture the ore before excavation. Material will be hauled to the crusher using Caterpillar
haul trucks. Afterwards the material will be loaded into the crusher using a small Caterpillar
front shovel.
Pit design is based on the exploration program that has been conducted. The largest
depth for the pit will be 500 feet, below which the iron magnesium is unprofitable. The pit
angle is 60 degrees from horizontal; the benches will be 95 feet wide with a height of 42 feet.
The haul route will follow the benches for transportation of ore and personnel between the
surface facilities and the pit. The general layout for Bass River Mine is shown in Figure 9-1.
Bass River Mine Site
Detailed Mining Plan 71
Figure 9-1: Mining Operation Layout
Bass River Mine Site
Detailed Mining Plan 72
9.2 Development
After the exploration program is completed and studies are determined, the first step is
to obtain permits for mining and purchase the land. Local special use, environmental,
reclamation, industrial storm water, construction and general permits will be obtained to start
the mining process. A community gather will be held and the board will vote for the acceptance
of the permit. The reclamation permit is obtained by designing and submitting an appropriate
reclamation plan and paying a bond in case the REL Co is unable to fulfill the reclamation plan.
The industrial storm water and construction general permits are submitted to the New Jersey
Department of Environmental Protection (NJDEP). REL Co. will buy the land instead of leasing
the land and paying royalties. All permitting will be handled by the REL Co. legal team. The land
purchase and permitting is to be completed between February 2015 and July 2015 to keep to
the schedule.
After land purchase and permitting is completed, roads and surface facilities will be
constructed to support further activities. As the surface facilities are completed, utilities will be
connected from the surrounding areas. After the surface facilities are built the processing plant
will be constructed. Haul roads will be graded and constructed while the processing plant is
under construction. All construction before mining will be contracted to a local company.
General roads and parking lots are to be completed no later than October 2015. The storage lot
and auxiliary storage will be completed during October and November of 2015. The vehicle
garages, kVa substation and power distribution buildings will be constructed between
December 2015 and January 2016. The administrative buildings and warehouse will be
Bass River Mine Site
Detailed Mining Plan 73
constructed between February and April of 2016. Electricity connection as well as the
construction of the kVa substation and power distribution building is to be completed by
January 2016. The sewage and water systems as well as construction of surface facilities will be
completed by April 2016. Fencing will be constructed around the entire property between
October of 2015 and January 2016 to prevent people from entering the property as the first
surface facilities are finished. The processing plant will be constructed between April 2016 and
July 2016. Haul roads will be graded and paved during the processing plant construction to be
complete before July 2016.
The hiring of employees will begin as the processing plant and haul roads are finished.
Hiring will take place from July 2016 to September 2016. Some types of employees that will be
hired miners, mechanics, electricians, engineers, office staff and project managers. Hiring for
the Bass Rive Mine site will be advertised in local newspaper, billboards and other media
sources during the hiring process. The development steps are shown on a Gantt chart in Figure
9-2. The Gantt chart starts with the permitting process in February 2015 and ends with the
hiring process completed on September 2016.
Bass River Mine Site
Detailed Mining Plan 74
Figure 9-2: Development Schedule
9.3 Detailed Extraction Plan
In order to extract the overburden and ore, traditional blasting will be utilized. Separate
blasting techniques will not be needed at the mine because of the very small amounts of
overburden. Furthermore, the density of the waste rock and the ore only differ by 10 lb/ft3.
The type of blasting done at Bass River Mine caters well to dry blasting agents. For this reason,
ammonium nitrate fuel oil (ANFO) in its bulk form will be used. ANFO is the cheapest explosive
to produce and one of the safest. The components can be mixed on site, making transport of
the materials very safe. In situations that have a moisture problem for bulk ANFO, bagged ANFO
will be substituted.
Each blast is designed to effectively fracture and move rock. They are also designed to
contain the explosive energy and distribute it evenly. To obtain the proper set of blast
Bass River Mine Site
Detailed Mining Plan 75
characteristics, certain values have to be calculated. Ash’s ratios will be used as the
mathematical formula to produce the following values (TCMRC):
De = Diameter of the explosive in the borehole (in).
B = Burden, distance from the charge measured perpendicularly to the nearest free face and in the direction that displacement will most likely occur at the time of charge firing (ft).
S = Spacing, distance between two holes such that the spacing is all measured perpendicular to its corresponding burden (ft).
H = Hole length (ft).
J = Subdrilling length, depth hole is drilled below the established floor (ft).
T = Collar distance, the portion of the borehole not containing explosive (ft).
Ash ratios are shown as equations solving for the unknown:
B = KBDe/12; KB = Burden ratio
S = Ks B; Ks = Spacing ratio
H = KH B; KH = Hole length ratio
J = KJ B; KJ = Subdrilling ratio
T = KT B; KT = Collar distance ratio
In addition to the above values, other critical information is shown in Tables 9-I and 9-II.
The blast design will produce 80,000 tons per shot. This means that in order to meet the 8,000
tons per hour production, a blast will occur every shift.
Bass River Mine Site
Detailed Mining Plan 76
Table 9-I: Blast Design Characteristics
Parameter Ore Blast
Blast Length (ft) 240
Blast Width (ft) 95
Bench Height (ft) 42
Production Per Shot (tons)
80,000
Swell Factor 1.5
Loading Density (lb/ft) 6.8
Burden (ft) 9.5
Spacing (ft) 24.7
Subdrilling (ft) 2.37
Stemming (ft) 6.65
Hole Depth (ft) 24.22
Charge Length (ft) 19.95
Hole Diameter (in) 5
Charge Weight (lb/hole) 135.66
Powder Factor (t/lb) 7.28
Row Delay (ms) 74
Column Delay (ms) 66
Holes per Shot 81
Explosive per Shot (lbs) 10,988.46
Table 9-II: Ash Ratios
Burden Ratio 25
Spacing Ratio 2.6
Hole length Ratio 2.55
Subdrilling Ratio 0.25
Collar Distance Ratio 0.7
Detonation will occur by an electronic initiation system. Electronic blasting caps capable
of initiating the explosive will be connected to a power source and circuit wiring. The delay
between each row will be 74 milliseconds. The delay between each column will be 66
milliseconds. These values already incorporate the distance between the holes. These delays
Bass River Mine Site
Detailed Mining Plan 77
will ensure proper fragmentation and placement of extractable materials. The blast design
layout for Bass River Mine can be seen in Figure 9-3.
Figure 9-3: Blast design layout
The initial data that was collected from the Bass River Mine does not reveal any
significant data that show any issues with slope stability in the pit. Therefore, there is no reason
to warrant a detailed analysis on slope stability. Figure 9-4 shows a basic pit and bench design
for Bass River Mine.
Bass River Mine Site
Detailed Mining Plan 78
Figure 9-4: Pit and bench layout
The geologic composition of the highwall was examined so potential slope stability
issues could be analyzed. The highwall of Bass River Mine is an alluvium deposit that is a very
dense rock. This rock has a compressive strength of 120,000 pounds per square inch but a
tensile strength of only 1,000 pounds per square inch. Based on the geologic composition of the
rock at Bass River Mine three types of slope failure are examined. These different failures in
slope stability are wedge sliding, plane sliding, and toppling.
Bass River Mine Site
Detailed Mining Plan 79
The first type of failure is wedge sliding. Wedge sliding needs two intersecting planes of
weakness that break and slide down the highwall. The two planes connect in such a way as to
make a wedge. The second type of failure examined is called plane sliding, where a single plane
breaks and slides down the face. Simple visual diagrams of both wedge sliding and plane sliding
are shown in Figures 9-5 and 9-6.
.
Figure 9-5: Wedge Sliding (“Science Direct”)
Bass River Mine Site
Detailed Mining Plan 80
Figure 9-6: Plane Sliding (“Science Direct”)
The final type of failure is called toppling slope stability failure. Toppling happens when
columns move away from the highwall, especially when the base is over excavated. A basic
diagram of toppling failure is shown in Figure 9 -7 below.
Screen 11'X2' Single 1 $120,000 $120,000 $7.10 $29,650
Jaw Crusher 24"X36" 150 HP 4 $3,515,000 $14,060,000 $630 $10,523,520
Cone Crusher 7' 800 HP 4 $4,588,000 $18,352,000 $885 $14,783,040
Sum $32,957,000 $311 $25,472,765
Cost per Annual Ton $0.79 --- $0.61
The capital cost per annual ton is only during the first year, with the assumption that the
costs will be completely paid off by the end of that year. The reason of the low cost/ton ratio is
the high annual production and the custom built crushers which gives more flexibility in
Bass River Mine Site
Processing Facilities 91
dimension of equipment. The unit operation and maintenance cost were multiplied by the
number of hours the equipment would run during a year. The sum of the operation and
maintenance costs was divided by the total annual production of 48.8 million tons. The
resulting operation and maintenance cost is $.61 per ton of processes ore and capital cost is
$0.79/ton.
Bass River Mine Site
Materials Handling 92
REL Company
Chapter 11
Bass River Mine Project: Materials Handling
Bass River Mine Site
Materials Handling 93
11.1 Description
In order to have a successful operation, a detailed description of the materials handling
process and the store of all products after processing is required. Examples of such material
would be tailings, concentrate, ore and waste material. The cost for the design and the
construction of the different processing systems are also required for a mining operation. The
processing plant has the capacity for handling 42 million tons of material a year. Of the 42
million tons, 7.1 million tons of iron ore will be produced a year.
11.2 Layout
When working on a mine design, primary consideration is placed on how materials will
be handled during processing. The ore has to be monitored as it changes sizes; the different
equipment inside the plant has to be monitored to make sure it is preforming at peak
efficiency; and the equipment outside the plant has to be designed to meet production.
In the beginning of the process, ore is hauled from the pit to the processing plant on
trucks. Figure 11-1 shows that the plant is on the southeast side of pit number one. The pit will
be built in this spot so that as the pit is expanded, hauling distance for the trucks does not
dramatically increase. Once the material goes through the primary crusher it will be moved to
different stock piles and secondary crushers on conveyor belts. It will also be moved to the
separate stock piles and tailing piles via conveyor belts. Once the material has been completely
processed, a combination of front end loaders and conveyor belts will move the material. These
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Materials Handling 94
two different units will place the processed material on rail cars that will transport it to a point
of sale.
Figure 11-1: Mine Layout
11.3 Handling Systems
Bass River Mine will use two different types of materials handling systems. The railway
system will be used to haul finished products away from the plant to storage areas where it can
later be sold. The system will consist of thirty-two 100 ton rail cars coming through every two
hours. Figure 11-1 shows the railway system in yellow heading north. The second system that
will be used is a complex layout of conveyor belts that will span over the 17 acre processing
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Materials Handling 95
facility. The conveyor belt system layout can be seen in Figure K-1 of the appendix. Sizing of the
crushing and separating equipment are not to scale. Conveyor length and width are to scale and
positioned correctly.
11.4 Storage
For production demands to be met, multiple stockpiles will be needed. They include one
for primary crusher feed, two for secondary crusher feed, one for primary crusher product, four
for magnetic separator feed, one for separated iron and one for waste. The plant feed
stockpiles will be located close to the screen decks, while the magnetic separator feed
stockpiles will be located between the crushers and the magnetic separators. The waste
stockpile will be located at the back of the processing plant. The primary crusher feed stockpile
is designed to hold 80,000 tons of ore. This stockpile will be 40,000 square feet with an
ultimate height of 45 feet. The primary crusher product stockpile is to hold 50,000 tons and
have an area of 25,000 square feet. The magnetic separator feed stockpiles are designed to be
half the size of a primary crusher feed stockpile. The separated iron stockpile is designed to
hold 30,000 tons of product and be 15,000 square feet with a max height of 20 feet.
The secondary crusher feed piles are to hold 50,000 tons and have an area of 25,000
square feet. The waste stockpile is designed to hold 65,000 tons and have an area of 33,000
square feet with a max height of 38 feet. Figure K-1 shows the pile location and usage. All the
stockpiles were designed to hold enough ore to compensate for non-working days. Since there
are two shovels always working and one backup, the stockpiles are designed well above what is
needed. All stockpiles except the waste stockpiles will be located under roofed structures with
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Materials Handling 96
a small concrete wall around to keep water out. With the structures for the ore, there will be no
contamination of water. The waste stockpiles will have less iron than the ground the water
usually flows through, so these stockpiles don’t require any cover. The rock from the waste
stockpiles will be transported by conveyor to large dump piles. The dump piles will have a total
area of 200 acres with a max height of 50 feet, providing piles large enough for one year of
production before the backfill begins.
Product will be shipped from the property on a daily basis. Due to the large amount of
product and the proximity of the railway, railway cars was selected as the most cost efficient
method to transport the product. The Tuckerton Railway is located five miles away, so a
connecting rail line will need to be added. The main station of this railway, located in
Tuckerton, is only seven miles away, so the product can be sent anywhere desired. The rail line
construction will be contracted out at approximately $14,000 per miles for a total cost of
$70,000. Two 1,700 ton loadout bins will be used to fill thirty-two 100 ton freight cars every
two hours. The loadout bins will be fed from the product stockpiles at the rate of 850 tons per
hour. Each bin will cost approximately $800,000 each.
11.5 Equipment Specifications
A conveyor is one of the most effective ways to move dry material from point to point.
Conveyors also have economic benefits when it comes to distances less than one mile. Barring
the high initial capital costs of installation, operation and maintenance costs are relatively low.
A conveyor system will be constructed at Bass River Mine to transport run-of-mine to the
processing facility and transport waste rock and ore within the processing facility.
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Given the size of the operation, multiple conveyors will need to be employed. In order
to easily display the belt usage, Table 11-I shows the related information for belt design.
Table 11-I: Belt Placement and Usage
Belt Starting
Point Ending Point Brief Explanation
1 Primary Screens
Magnetic Separator Pile
Fine material passing through both decks of the primary screen is ready to be magnetically separated.
2 Primary Screens
Secondary Crusher Feed
Pile
Mid-grade material passes the first deck and is ready to be fractured by the cone crushers.
3 Primary Screens
Primary Crusher Feed
Pile
Large material passes over the first deck and is ready to be fractured by the jaw crushers.
4 Primary Crushers
Secondary Screen Feed
Pile
Crushed material from the jaw crushers is ready to be screened a second time.
5 Secondary
Screens
Secondary Crusher Feed
Pile
Mid-grade material passing over the secondary screen's deck is ready to be fractured by the cone
crushers.
6 Secondary
Screens Magnetic
Separator Pile Fine material passing through the secondary screen's
deck is ready to be magnetically separated.
7 Secondary Crushers
Magnetic Separator Pile
Fine material is ready to be magnetically separated.
8 Secondary Crushers
Magnetic Separator Pile
Fine material is ready to be magnetically separated.
9 Magnetic
Separators Separated Iron
Pile Separated iron is ready to be shipped.
10 Magnetic
Separators First Waste Pile Waste material is piled for future pit backfill.
11 Magnetic
Separators Second Waste
Pile Waste material is piled for future pit backfill.
Designing a belt system as complicated as the one at Bass River Mine requires computer
assistance to ensure consistency and accuracy. Microsoft Excel 2010 was used to compile all the
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Materials Handling 98
information and execute the calculations. On the spreadsheet, all the calculated values are
colored black, while the variable inputs are colored in red. Some notable variables include belt
width, belt speed, idler spacing, length of belt, ore density and friction coefficients. The excel
file also has the belts split into sections in order to correctly calculate the required power for
each run. Operation costs are available based on an electricity cost of $.07 per kW-hr. A
complete account of the belt calculations can be seen in Tables K-I through K-VI in the
appendix.
In addition to the original calculations and assumptions for the conveyor belt system,
another option was considered. The second option taken was to increase the speed of the belt
while decreasing the overall width. The only drawback is that the maximum belt speed is 800
feet per minute so there is not much room for increase. The belt sizes are also at the high end
of possible use. Based on the results, decreasing the belt size and increasing the belt speed has
a higher operating cost. This is because belt sizes come in certain intervals and the jumps
between these sizes cause an issue.
11.6 Material Handling Costs
The annual operating cost for the design belt systems were calculated using electricity
costs of .07 kW-hr and 4,176 hours of operation. Table 11-II details this cost for each belt. The
estimated capital costs for the conveyor belt are shown in Table 11-III. The table includes the
cost for the belt drive, the belt drive components and the head and tail assemblies.
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Table 11-II: Annual Operating and Maintenance Costs
Yearly O&M
Costs Belt
Number Section 1 Section 2
1 $12,300 $13,400
2 $22,300 $138,100
3 $29,700 $190,700
4 $29,600 $196,400
5 $25,100 $163,400
6 $17,800 $41,600
7 $43,600 $204,300
8 $35,700 $173,600
9 $10,600 $63,400
10 $20,200 $158,700
11 $20,200 $158,700
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Materials Handling 100
Table 11-III: Estimated Capital Cost for Conveyor
Belt Number Detailed Conveyor Costs
1 Belt Drive $192,300
Head & Tail Assemblies $123,500
Belt Drive Components $82,100
2 Belt Drive $407,100
Head & Tail Assemblies $210,440
Belt Drive Components $298,500
3 Belt Drive $445,300
Head & Tail Assemblies $222,900
Belt Drive Components $454,200
4 Belt Drive $407,100
Head & Tail Assemblies $210,440
Belt Drive Components $472,500
5 Belt Drive $212,200
Head & Tail Assemblies $148,310
Belt Drive Components $368,200
6 Belt Drive $596,300
Head & Tail Assemblies $210,440
Belt Drive Components $116,000
7 Belt Drive $596,300
Head & Tail Assemblies $210,440
Belt Drive Components $514,700
8 Belt Drive $473,600
Head & Tail Assemblies $198,000
Belt Drive Components $408,600
9 Belt Drive $251,900
Head & Tail Assemblies $160,800
Belt Drive Components $139,500
10 Belt Drive $407,100
Head & Tail Assemblies $210,440
Belt Drive Components $350,300
11 Belt Drive $407,100
Head & Tail Assemblies $210,440
Belt Drive Components $350,300
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Materials Handling 101
The cost summary for all the conveyor equipment can be seen in Table 11-IV.
Table 11-IV: Cost Summary
Cost Summary - Conveyor
Total Capital Cost $10,067,350
Unit Capital Cost $0.30/ton
Total O&M Cost (yearly) $1,769,400
Unit O&M cost $0.05/ton
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REL Company
Chapter 12
Bass River Mine Project: Personnel Requirements
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Personnel Requirements 103
12.1 Staffing Plan
Bass River Mine will be looking to hire individuals who are driven and innovative in the
field of mining. The company will not discriminate when hiring based on gender, age or
ethnicity. The company will not allow or support employees who are found to have a drug or
alcohol problem. For this reason the mine will be both an alcohol and drug free area with a zero
tolerance policy. All the personnel offices will be housed in the main office building near the
entrance to the mine. This will help all parts of the mine to communicate easily and if members
are away from the office we will use a radio communication system so that personnel will
always be in contact. The mine offices will be broken up into four major divisions which consist
of management, production, engineering and processing. Also, there will be a personal office
for the mine manager, the superintendent, the senior engineer, the human resources officer
and the health and safety officer.
12.2 Upper Management
It will be the job of the management to take care of all procedures that happen both on
and off the mine site. The mine manager will oversee everything pertaining to the mine
including the sale of the material off site. There will be a superintendent who will have the sole
job of taking care of the mining and processing that occurs on site. While the two positions will
have some overlaps, the mine manager will have the final say on what occurs at the mine.
The mine manager will be particularly concerned with the business aspect of the
company. He/she will work closely with the marketing department to help with the sale of ore.
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Personnel Requirements 104
Sale of ore will include developing relationships with buyers seeing as how the company will
most likely consistently sell to the same companies. In this sense, the mine manager will work
very much like a public relations officer to the community and to the buyers. The mine manager
will work closely with the health and safety department as well by relaying the regulations and
updates to workers as well as lower management. Finally, the mine manager will work in the
mining and processing department to make sure everything is being processed to state and
federal specifications.
The superintendent holds a significant position in the organization and operation of the
everyday mining. He will work very closely with the basic labor force that extracts and
processes the ore. The position of superintendent will help the health and safety department
and the mine manager to organize safety meetings. Other responsibilities include enforcing
rules and regulations laid down by the mine manager. The superintendent will cooperate with
the engineering department to develop the design and progression of the pit. Finally, the job
entails participating in the processing facilities to make sure that rules set by the mine manager
are flowed during the processing phase.
12.3 Mining Operations
Mining operations at Bass River Mine will always be overseen by a shift foreman. The
shift foreman will communicate with the mine superintendent to make sure the operation
continues on schedule. The shift foreman will organize the operations of all general workers
and coordinate with the sectional foremen. Sectional foremen will coordinate with all workers
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Personnel Requirements 105
for their section, along with all standard section workers including shovel operators, haul truck
operators, water truck operators, maintenance crew, mechanics and electricians.
Shift foreman:
Work will require great communication and leadership skills as well as good
organization and time management. Shift foreman responsibilities will include all sectional
foremen responsibilities, and the responsibilities stated below. The shift foreman will be
required to perform included duties but will not be limited to:
Have open communication lines between the mine superintendent and section foremen
Coordinate the tasks of all general workers, electricians, mechanics, maintenance crew and all workers not under the supervision of a sectional foreman
Sectional Foreman:
Work will require good communication, leadership, organizational and time
management skills. Sectional foreman will be required to perform included duties but will not
be limited to:
Direct workers in production and safety
Inspect all work areas and equipment pre-shift
Maintain and distribute records of production, safety and violations
Know and achieve all mining regulatory standards and laws
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Personnel Requirements 106
General Workers:
Work is physically challenging and will require team work to achieve production
standards. The general worker will be required to perform included duties but will not be
limited to:
Transport equipment from the surface facilities to the mining area
Maintain benches properly
Manage and handle supplies
Maintain all roadways
Inspect work areas and equipment pre-shift
Assist others including the foreman, electricians, shovel operators, mine operator and haul truck operators
Operate machinery including the front shovels, water trucks and haul trucks
Shovel Operator:
Work is physically challenging and will require team work to achieve production
standards. Shovel operator duties will include but not be limited to those of the general worker
and the responsibilities listed below:
Operation of a front shovel on benches
Operate the shovel in a safe and efficient manner at all times
Assist the mechanics and electricians with repairs made on the shovel and other equipment
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Personnel Requirements 107
Haul Truck Operator:
Work is physically challenging and will require team work to achieve production
standards. Haul truck operator duties will include but not be limited to those of the general
worker and the responsibilities listed below:
Operate a haul truck on benches
Operate a haul truck in a safe and efficient manner at all times
Assist the mechanics and electricians with repairs made on the haul truck and other equipment
Electrician:
Work is physically challenging and will require good communication and leadership
skills. Electrician duties will include but not be limited to the responsibilities listed below:
Have open lines of communication between the shift foreman, sectional foremen and any others with electrical work
Coordinate and manage all electrical work for the property
Know and achieve all mining regulatory standards and laws
Maintain and distribute records of performance, safety and violations
Select and obtain electrical equipment for the surface facilities
Mechanic:
Work is physically challenging and will require good communication and leadership
skills. Mechanic duties will include but not be limited to the responsibilities list below:
Have open lines of communication between the shift foreman, section foremen and any others with mechanic work
Coordinate and manage all electrical work for the property
Select and obtain mechanical equipment for the surface facilities
Maintain and distribute records of performance, safety and violations
Know and achieve all mining regulatory standards and laws
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Personnel Requirements 108
12.4 Processing Operations
Processing operations at Bass River Mine will be handled by the senior processing
engineer. The senior processing engineer will establish communication with the rest of the crew
working at the processing facility to ensure safe and efficient work conditions. Due to the huge
production capacity of Bass River Mine (10,000 tons/hour), junior processing engineers will be
hired. Apart from the engineers, a facility manager, plant electricians, maintenance personnel
and truck drivers will be hired. Shift foremen will be hired for the processing plant to supervise
the day to day activities. It is imperative that all the crew working at the processing facility is
properly trained to ensure safe conditions. The responsibilities of each of the processing
operation personnel are listed below:
Senior Processing Engineer:
Supervise all activities at the processing facility
Establish a good line of communication between the shift foreman and the production crew
Oversee all the production, maintenance, management and office positions
Coordinate with Junior Processing Engineer to ensure the daily production requirements for the processing facility are met
Junior Processing Engineer:
Report to the Senior Processing Engineer twice a day
Assume responsibilities of complete control of the processing facility when senior processing engineer is absent
Make sure shipping details are handled efficiently by the facility manager
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Personnel Requirements 109
Facility Manager:
Reports to the junior processing engineer daily about the activities at the processing facility
In charge of preparing a maintenance and electrical report once a week for all the equipment at the facility
Ensure production requirements for the processing facility are met daily
Communicates with the shift foreman daily to resolve any management issues
In charge of the shipping details at Bass River Mine.
Works towards resolving any issues with shipment and makes sure shipment is carried out in an orderly fashion
Plant Foreman:
Establishes a good line of communication with the facility manager
In charge of all the personnel requirements at the facility including hiring additional crew and resolving any day to day issues
In charge of calling maintenance in case of an issue with the equipment
Plant Electrician:
Establish a good line of communication with the shift foreman
Inspect electrical equipment at the facility once a day
Prepare a weekly report to be handed in to the facility manager about the electrical state of the equipment present at the facility
Work with the maintenance personnel to resolve any electrical issues at the facility
Maintenance Personnel:
Work with the foreman on any maintenance at the plant
Inspect the equipment once a week if not sooner for maintenance
Establish communication with the electrician to work on equipment as a team
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Personnel Requirements 110
12.5 Other Personnel
There are other personnel required at Bass River Mine. Personnel are required for the
administrative department and the security of the mine. Administrative personnel include the
mine engineer, environmental engineer, project engineer, surveyor, health and safety director,
human resource representative, accountant and secretary. The following are the other mine
personal for Bass River Mine along with their responsibilities.
Mine Engineer:
Administrative head of the mine after the president of the mine
Oversee all activities at the mine
Approve final reports for the operation and processing departments
Establish an establishment with all personnel at the mine and report to the president of the mine
Environmental Engineer:
In charge of permitting at the mine
Work with the environmental specialists to make sure all environmental activities are monitored regularly
In charge of all reclamation activities and sustainable development at the mine
Work with EPA and local environmental agencies to ensure all environmental laws are upheld
Hold sessions once every 3 months to update the mine personnel on current environmental laws and regulations.
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Personnel Requirements 111
Environmental specialist:
Report to the environmental engineer
Responsible for tasks to ensure “above and beyond compliance” for every facet of environmental issues are met at the mine site
Prepare a weekly report of the environmental activities to be submitted to the environmental engineer
Health and Safety Director:
Handle all issues with health and safety at the mine site
Inspect and monitor the operation and processing departments to ensure safe working conditions are met
Report to the Mine Engineer once a week on all health and safety issues at the mine
In the case of an incident at the mine, health and safety director assumes command until the emergency is over
Report all incidents to MHSA and work with the MHSA inspector to make sure safe working environment is maintained
Project Engineer:
Handle all the papers and design with operations
Work with mine engineer for scheduling twice a week
Work with environmental engineer and health and safety director and establish communication between them
Work with the Human Resources department to establish good rapport with the local community
Hold monthly sessions with the human resources department to provide a platform for the local community to express their issues
Monitor social license and work towards making sure the license is upheld at all times
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Personnel Requirements 112
Human Resource Representative:
In charge of all clearance, hiring and insurance information for all personnel hired
Work with the project engineer on upholding social license and maintaining a good relationship between the industry and general public
In charge of all payment information for all mine personnel
Any issues to the human resources will be redirected to REL Co.
In communication with REL Co HR department to handle issues at the mine site
Accountant:
Responsible for accounts at the mine site
Work with the HR department and the project engineer to make sure all accounts are up to date and monitored on a regular basis
Secretary:
Work with the mine engineer to prepare documents for all the departments, the president of the mine and REL Co.
Mine Surveyor:
Report to the mine engineer
Survey when needed
Security guard:
In charge of security at the gates
Will work 8 hour shifts
contracted from private security agency
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Personnel Requirements 113
12.6 Personnel Costs
Bass River Mine will be comprised of both an hourly and salaried workforce. This will be
true in all sectors of the operation including the production, processing and miscellaneous
units. Employees will be offered varying types of benefit packages in addition to the hourly or
salaried pay. Benefit packages include all the benefits provided to employees by the employer.
REL Co. will offer the benefits that are required by law such as unemployment, workman
compensation and disability insurance. In addition, benefits that are for the betterment of the
workforce will be offered. These benefits may include health insurance, prescription coverage,
dental insurance, vision care, life insurance, paid vacation leave, sick leave and a retirement
plan based on an individual’s position and desired expenditure. Each of the benefits will be
addressed and broken down for each package.
New Jersey statutes require that unemployment benefits, workers’ compensation and
disability insurance be available to employees working in the state. Each of these benefits is
offered at no cost to both full-time hourly and salaried employees. Unemployment payments
into a state fund are covered by REL Co. workers’ compensation coverage and disability
insurance are bought and paid for by REL Co. Table L-I in the appendix explains the short-term
and long-term disability insurance structure.
All other benefits are offered as extras to the employees working for REL Co. Health
benefits will be the most diverse and complex in the benefits packages. There will be three
offerings available to the employees. The Blue Cross Blue Shield (BCBS) options include the
Basic PPO 90/70 plan, the Comprehensive PPO Plan and the BCBS HMO Plan. The plan details
The total cost off all personnel can be seen in Table 12-III. The unit cost is the cost per ton
annually.
Table 12-III: Total Personnel Cost
Total Annual Cost Unit Cost ($/ton)
$ 8,751,388.88 $ 0.21
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Environmental Impacts and Sustainability 117
REL Company
Chapter 13
Bass River Mine Project: Environmental Impacts and Sustainability
Bass River Mine Site
Environmental Impacts and Sustainability 118
13.1 Land Surface Effects
The environmental footprint of Bass River Mine will be significantly larger than an
underground mining operation. All aspects of the operation will require a parcel of land for
development. The pit, buildings, roads, railways, stockpiles, processing facility and settling
ponds are included in the footprint of the REL Co. operation. The approximate area within the
property boundaries that will be utilized for mining activities is 1,000 acres. Considering the
area has little development, environmental impacts from erosion will occur.
The location of Bass River Mine is part of the Pine Barrens of South-Central New Jersey.
These Pine Barrens help shelter and solidify the ground material with their surface area and
root systems. In order to properly clear the land for pit and facility development, a large
amount of timbering will have to take place. When the timber and accompanying vegetation is
removed, the cleared area will be vulnerable to wind and rain driven erosion. In order to limit
the effects of erosion, vegetation of certain areas will take place. Berms around the pit and
sedimentation ponds will be reinforced with plant matter. Special attention will be given to
areas subjected to wind and drainage. In these areas, native plant materials with robust root
systems will be utilized. For permanent and semi-permanent surface facilities, shrubs and small
trees will be planted. This will help prevent soil erosion as well as protect the building from
strong weather effects. Stockpiles will be housed in simple structures to keep wind and rain
out. A concrete barrier will be constructed around the stockpiles to prevent direct erosion.
Finally, roadways and railways will have proper drainage and vegetation to prevent water
contamination. To effectively control erosion, constant monitoring will be carried out. If a
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Environmental Impacts and Sustainability 119
source of erosion becomes a concern, natural or artificial erosion controls will be utilized to
minimize the issue.
13.2 Biological Effects
Bass River Mine will inevitably disturb the natural state of the mine property. By taking
special precautions and implementing proper environmental programs, the effects will be
minimized and temporary. Before any clearing can take place, the area must be documented.
This includes taking photos, studying wildlife, studying plant life and measuring key levels of
environmental materials. When clearing does commence, local wildlife will be displaced.
Fortunately, the subjected wildlife is not endangered and permits can be obtained. If wildlife
becomes a problem, solutions will be evaluated and implemented on a case by case basis. Plant
life will also be destroyed. In order to preserve the ecological integrity of the property, native
seed and plants will be used for erosion control. The entire mine site will eventually go through
a complete reclamation process. The same principles used during operations will be applied to
the reclamation as well.
13.3 Hydrological Effects
The area surrounding the Bass River Mine property contains several small waterways.
Operations should have little effect on the direct water quality of these streams. The alluvium
deposit comprising the ground material has low permeability and ground water effects will be
minimal. Settling ponds will be utilized to reduce sediment discharge. Any water being pumped
from the pit or being collected will be diverted to these ponds. All ponds will be lined to
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Environmental Impacts and Sustainability 120
prevent any ground contamination if the water contains contaminants. Water quality levels will
be measured prior to development to ensure minimal deviation during operations. Monitoring
will take place throughout the entire mining process with particular emphasis on discharge
points. Clean Water Act regulations will dictate all appropriate water quality levels. Acid mine
drainage will be minimal at Bass River Mine because of the low water inflow. Water that must
be pumped out will be monitored for any extreme variations in pH levels and addressed with
remediation techniques when ranges are unacceptable. No chemical leaching processes are
used on site so this is also of little concern to hydrological integrity.
13.4 Air Quality Effects
The major concern with respect to air quality in an open pit mine is dust. Dust liberation
can result from a magnitude of surface activities. Drilling, blasting, loading, hauling, processing
and erosion all help move dust particles. The main dust suppression technique will be the use of
water trucks. Water or brine solutions will be sprayed on all active dirt haul roads to prevent
vehicles disturbing the roadway. Dust from blasting will be evaluated, and if necessary, the
blast parameters will be changed. Fugitive blast emissions are also of concern and will be
monitored. Diesel Particulate Matter (DPM) will also be released from the use of mining
equipment. The levels of DPM will not require attention because of the open nature of the
mine design.
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Environmental Impacts and Sustainability 121
13.5 Societal Effects
Bass River, New Jersey is located in an area that has little development. This being said,
the localities surrounding Bass River are advanced and have all the infrastructure to support a
the standard quality of life. Given the ample road access and short distance to any needs, the
negative societal impact on the township will be minimal. The creation of Bass River Mine will
provide a large amount of jobs to the area. REL Co. will put emphasis on hiring locals and
offering quality positions.
13.6 Miscellaneous Effects
Bass River Mine is located in a sparsely populated area of New Jersey. Most residents
are miles away from the property boundaries. The few inhabitants that are located near the site
will not experience much disturbance. The land being cleared will not spread beyond what is
necessary. This means that the Pine Barrens surrounding the mine will remain intact. The trees
and vegetation will act as an effective barrier to visual blemishes and noise propagation.
Blasting will take place once a shift and will be timed to limit inconvenience to the surrounding
population. The vibrations created from the blast should not interfere with any well use in the
area. If there are concerns, REL Co. will work diligently with the locals to correct the issue.
13.7 Mine Permits
Bass River Mine will primarily be regulated by the Environmental Protection Agency, or
EPA. The EPA delegates many responsibilities to agencies in the state of operation. The New
Jersey Department of Environmental Protection is responsible for enforcing EPA regulations in
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Environmental Impacts and Sustainability 122
the area around Bass River Mine. Department of Environmental Protection of New Jersey
regulates water quality and air monitoring as well as permitting for mining. Contact information
for the Department of Environmental Protection New Jersey may be found in Table 13-I.
Table 13-I: Contact Information for Department of Environmental Protection, New Jersey
New Jersey Department of Environmental Protection
401 East State Street
Trenton, NJ 08625
(724) 772-2334
(609) 777-3373
The permits required by the Department of Environmental Protection to begin mining
operation are listed in Table 13-II. Yearly permitting requires renewal permit for mining is 5G6
License Renewal Application (New Jersey Department of Environmental Protection).
Table 13-II: Initial Department of Environmental Protection Permits
13.8 Reclamation
Bass River Mine will follow all legislative laws and regulations to devise a practical and
sustainable plan for reclamation of the mine site after operations cease. The Environmental
NJG0141950 Mining and Quarrying
General Permit
NJ0107671 Industrial Stormwater
General Permits
RA13 Air Quality Permit
5G3 License Application
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Environmental Impacts and Sustainability 123
Impact Statement (EIS) will be submitted to Environmental Protection Agency (EPA) before
operations commence and will be rectified if need be. As per the reclamation plan, all
decommissioned equipment will be moved away from the mine site. After deconstruction of
the administrative offices, reclamation activities will begin.
All water resources will be cleaned of any point source discharge according to the 402
permit established by the Clean Water Act (CWA).
All water resources will be cleaned of fill materials according to the 404 permit
established by CWA.
Waste facilities will be contoured in order to prepare and stabilize the rocks for the
topsoil cover.
All waste material will be disposed of in preparation for overburden replacement.
The overburden will be replaced in all areas excluding the pit.
Remaining overburden will be used to fill the pit up.
The pit will then be converted into a pond. The water will be maintained in order to
cultivate a fish population.
Chemicals will be monitored in the pond to ensure safe growth of fish and other
organisms.
The mine site will be covered with topsoil and a vegetative growth will be established.
The first stage of plants that are planted helps stabilize the ground and provide a better
support for the trees that are planted in the second stage of reclamation.
The plant and animal life that is reestablished will be similar to the flora and fauna that
is found around Bass River, New Jersey.
Bass River Mine Site
Environmental Impacts and Sustainability 124
The long-term reclamation plan will continue for 10 years with the main responsibility of
monitoring the reclamation plan in effect. Monitoring will be done monthly the first two
years, bi-monthly the next two years, and then once every six months for the next six
years. If any discrepancies are found the responsible authorities will be notified.
In addition to the current reclamation plan, new activities will be added or rectified
according to the federal and state reclamation laws. The Corporate Social Responsibility
Committee (CSR) will play a huge part providing a medium for communication between the
locals and the Bass River Mine Environmental Specialist. This will provide a platform for the
community to voice their opinions about the reclamation plan and bring their concerns to the
table as well. In addition to the reclamation plan, sustainable development will also play a huge
role in the mine closure activities.
13.9 Sustainability Plan
After reclamation efforts commence, the community members will be notified in order
to bring Bass River Mine environmentalists any ideas or plans they have for optimum use of the
site. Therefore, the sustainability plan is subject to change depending on the concerns and
expressions of the community. The plan that is devised by REL Co. for Bass River Mine is for the
mine site to be converted into a recreational facility that will be open to the public at a minor
fee. The minor fee will go to the community welfare committee that can be used by the
community members for the betterment of the community as a whole. The pit that is
converted into a pond will be used strictly for fishing purposes. There will be a shop established
Bass River Mine Site
Environmental Impacts and Sustainability 125
close to the pond at the mine site where people can buy fishing supplies and small boats for
fishing. All profit from any activities at the mine site will go to the community.
13.10 Environmental Costs Summary
While the Bass River Mine will own 2,500 acres of property the permitting, reclamation,
and bonding will be the 1,000 acres of mined area. With this in mind, we expect to spend
around $1,132,000 for bonding and permitting. These values were calculated using the 1,000
acre mined area with the costs of each activity per acre. There was not an available cost
estimate for New Jersey, so for a reference we decided to use estimates provided by the
Virginia Department of Mines Minerals and Energy. The values used were $31per acre for
permits, $1,000 per acre for bonding, and we estimated a safe $100 per acre of reclamation.
There was also a $400 onetime charge for licensure (DMME). Shown in Table 13-III is the
breakdown of the different costs listed above.
Table 13-III: Costs per Acre of Permitting, Reclamation, and Bonding
Acres Cost per Acre Cost
Permitting 1,000 $31 $31,000
Bonding 1,000 $1,000 $1,000,000
Reclamation 1,000 $100 $100,000
Licensure - - $400
Total - - $1,131,400
Bass River Mine Site
Environmental Impacts and Sustainability 126
This permitting cost includes all permits needed to make the mine function on average.
The amount of reclamation will be combined with the bonding cost to get a total cost for the
project but it is planned that the bonding costs will be returned after the reclamation process is
complete. This total capital combined with the reclamation and the returned bonding cost
combined with the unit cost using Bass River Mine’s 8.8M tons of production is shown below in
Table 13-IV.
Table 13-IV: Environmental Unit and Total Costs
Total Cost Unit Cost
Permitting and Bonding $1,031,000 $0.117
Reclamation $1,100,000 $0.125
Total Cost $2,131,000 $0.242
After Reclamation $1,031,000 $0.117
Table 13-IV shows that the total environmental cost would be $2,131,000 for
permitting, bonding, and reclamation. There is $1,100,000 set aside for reclamation and the
company will get their money back from bonding when reclamation complete. This will mean
that a total of $1,031,000 will be spent on the reclamation process.
Bass River Mine Site
Contractual Agreements 127
REL Company
Chapter 14
Bass River Mine Project: Contractual Agreements
Bass River Mine Site
Contractual Agreements 128
14.1 Ownership
Bass River Mine will be located on land purchased by REL Co. from the state of New
Jersey. This piece of land is located in Bass River inside the boundaries of Burlington County.
When development of the mine commences, a permanent address of 1200 Chatsworth Road,
Bass River, New Jersey 08224 will be established. The sales contract between REL Co. and New
Jersey will state a transactional area of 2500 acres. Based on 2012 statistics, the average price
of wooded area in the region is approximately $2,100 per acre (USDA). REL Co. and the state of
New Jersey will agree to a purchase price based on average market value. At 2500 acres, the
total purchase price will be $5,250,000.
As seen in Figure 14-1, the only permanent, paved road on the mine site is Chatsworth
Road. The road was created and is maintained by Burlington County. Under the sale contract,
the road will continue to be maintained by the county. If any damage occurs due to mining
activity or equipment, REL Co. will have to pay for repair. All other roads traversing the property
are comprised of compressed dirt. In some sections, gravel is added to the dirt to shore up the
roadbed. During the development and operation of the mine, all dirt and gravel roads will be
under REL Co. control. Roads may be created or eliminated based on operational discretion.
When mining is completed and reclamation begins, comparable access to varying parts of the
property will have to be built. Before resale to the state, dirt roads will be built in the
approximate areas of previous access ways. Roads will ensure that state and local officials can
travel the property if any emergency situations arise. The public may also use the roadways
after New Jersey reclaims property rights.
Bass River Mine Site
Contractual Agreements 129
Figure 14-1: Google Map of Bass River Mine Property
REL Co. will retain all mineral rights on the property through the contract terms.
Although the land will be a previous state preserve, New Jersey officials will have no access
rights to the land. The property will be considered private commercial property and only be
subject to regulations relevant to a mining operation.
Special consideration will be taken in relation to the reclamation process. After initial
reclamation is completed, the resale will take place. Under the sales contract, REL Co. will still
monitor the site continue reclamation activities. A specific date will be negotiated when REL Co.
will relinquish monitoring activities in full. At that point, the state will resume the
responsibilities as before the mining purchase.
Bass River Mine Site
Contractual Agreements 130
14.2 Mining Lease
Bass River Mine will not need to set up a royalty agreement because REL Co. will be
purchasing the land. The land will be acquired from the state of New Jersey so there will be no
royalty payments. There will not be a payment structure for the purchase of the land as it will
be purchased directly with company funds, and included in the capital cost of the mine, so
there will be no terms regarding lease. The closing agreement will be to sell the reclaimed land
back to the state of New Jersey after mining is complete. This agreement will be drafted when
the land is purchased and will be effective after mine closure. The agreement will state that the
land will be appraised by a third party after mining is complete and an amount will be agreed
upon for the sale.
14.3 Market Evaluation
Since magnesium, the byproduct of Iron-magnesium ore, is too expensive to process at
Bass River Mine, only iron will be considered a profitable resource for evaluation purposes. The
iron ore derived from the mine site will be sold to steel manufacturers in New Jersey. The
market that Bass River Mine will compete in is the Ocean County which falls under New Jersey
Metropolitan Statistical Area. The Ocean County includes many townships of which Tuckerton
Township (Bass River Mine) is a part. Other major Townships within close range of Bass River
Mine are Beach Haven Borough, Eagleswood Township, Little Egg Harbor Township and
Tuckerton Borough. The iron ore sold will be used in Iron and steel mills as well as the
manufacturing of ferroalloy.
Bass River Mine Site
Contractual Agreements 131
The population for Ocean County, the largest county in the state of New Jersey, grew
17.9% from 1990-2000 and grew 12.8% from 2000-2010. In 2010, according to the US Census
Bureau, the population in Ocean County was 576,567 with a projected growth of 0.01% in the
year 2012. Table N-1 of the appendix shows the increase in population in Ocean County along
with a distribution of the population in Beach Haven Borough, Eagleswood, Little Egg Township,
Tuckerton Borough and the entire state of New Jersey from the year 2000-2010.
According to the US Census Bureau, New Jersey accounted for 0.72% of all value of iron
and steel mill manufacturing shipment in the US. New Jersey ranked 16 in the nation in the
production of iron and steel. In the appendix, Table N-2 shows the ranking of iron and steel in
New Jersey in comparison with other states.
14.4 Sales Contract
REL Co. will create a contract for sales to be used when entering a business relationship
with customers. The sales contract will include important information such as the name of the
customer, the agreed upon price per ton of iron, the iron grade and size agreed upon, the
amount of iron, and the dates during which the iron is being supplied to the customer. Other
requests of the customer will be written on the sales contract. To complete the contract,
signatures must be obtained from the customer and either a REL Co. executive or the mine
manager of the Bass River Mine, along with any witness.
All customers of REL Co. will receive any agreed upon amount of iron ore product at
specified grade for the specified amount of time according to any outstanding sales contracts.
Any REL Co. customers that cancel a sales contract will be charged a termination fee of twenty
Bass River Mine Site
Contractual Agreements 132
5% of any remaining unpaid balanced for the contract. If any REL Co. customer does not pay the
amount agreed upon each month then a fee of 5% will be added to the total unpaid amount. If
a customer fails to pay for three consecutive terms REL Co. is able to terminate any sales
contract and seek legal action to collect any unpaid dues. On the other hand, if REL Co. is
unable to supply the customer with the agreed upon iron ore in the specifications arranged,
then the customer is able to cancel the sales contract.
If the iron ore product supplied by REL Co. fails to meet agreed upon specifications, then
a fee of 2.5% per ton will be paid back to the customer. If the iron ore product supplied by REL
Co. fails to meet the tonnage agreed upon, then a fee of 2% per ton will be paid back to the
customer. Any discrepancies in product specifications or tonnage are to be determined by the
customer and relayed to REL Co. with fourteen days of received shipment. If an event occurs
that are unpredicted, REL Co. and the customer can meet to change the sales contract or
terminate it.
The pricing structure for iron ore products supplied by REL Co. is shown in Table 14-I.
Contract pricing is based on two categories of contracts, small and large. Large contracts consist
of a purchase of more than 400,000 tons per year. Large contracts give a 10% discount over
small contracts to encourage large purchases. High grade iron ore is 65% grade or higher,
medium grade iron ore is between 60% and 65% grade iron. Prices are negotiable between the
customer and the one presiding over the sales contract.
Bass River Mine Site
Contractual Agreements 133
Table 14-I: Pricing Structure
Product Grade Small Contract Price (per ton)
Large Contract Price (per ton)
High Grade $178.25 $160.43
Medium Grade $155 $139.50
Bass River Mine Site
Cost and Feasibility Analysis 134
REL Company
Chapter 15
Bass River Mine Project: Cost and Feasibility Analysis
Bass River Mine Site
Cost and Feasibility Analysis 135
15.1 Estimated Capital Cost
The total capital cost for Bass River Mine is approximately $88.56 million. The capital
investment includes costs for materials processing and handling, equipment, surface facilities,
permitting and bonding and reclamation. The capital costs are required throughout the
development phase of the mine and are considered to be an initial investment. Mining
equipment and processing turns are two of the most expensive items at $40.5 million and $33
million respectively. The mining equipment used during the operational phase of Bass River
Mine will include one large (CAT 6030FS) and one medium (CAT 6018FS) shovel. The equipment
will also consist of a fleet of five trucks (CAT 789C) complementary to the large shovel and a
fleet of four trucks (CAT 785D) complementary to the medium shovel. Miscellaneous
production equipment also contributes to the capital cost for mining equipment. A primary jaw
crusher and a secondary cone crusher make up almost the entire capital cost for processing at
Bass River Mine. The cost of the conveyor and it components illustrates the $10 million capital
investment for materials handling. Surface facilities, permitting, bonding and reclamation
activities yield approximately 6% of the capital cost. Table 15-I and Figure 15-1 gives the
distribution of all capital costs at Bass River Mine.
Table 15-1: Capital Costs for Bass River Mine
Item Cost (US dollars)
Materials Handling 10,067,350
Mining Equipment 40,451,000
Surface Facilities 1,929,625
Processing 32,957,000
Permitting and Bonding 1,031,000
Reclamation and After 2,131,000
Total Capital Costs 88,566,975
Bass River Mine Site
Cost and Feasibility Analysis 136
Figure 15-1: Capital cost for Bass River Mine
15.2 Estimated Operating Cost
The total annual operating cost for Bass River Mine is approximately $61.1 million. The
cost for mining equipment and processing operation is high. The operating cost for processing
the ore was calculated using $0.61/ton. For the mining equipment, operating costs were
determined from simulations conducted to maximize production using the best combination of
loaders and trucks available. The annual operating cost for materials handling and surface
facilities make up for 3% of the total operating cost. In addition to all these costs, personnel
cost with a zero capital investment makes up for 14% of the annual operating cost. Table 15-II
and Figure 15-2 show the distribution for annual operating cost at Bass River Mine.
11%
46%
2%
37%
1% 3%
Capital Cost
Materials Handling
Mining Equipment
Surface Facilities
Processing
Permitting and Bonding
Reclamation and After
Bass River Mine Site
Cost and Feasibility Analysis 137
Table 15-II: Annual Operating Cost for Bass River Mine
Item Cost (US dollars/year)
Materials Handling 1,769,400
Mining Equipment 25,238,872
Surface Facilities 136,528
Processing 25,272,765
Personnel Costs 8,751,389
Total Operational Costs 61,168,954
Figure 15-2: Annual Operating Cost for Bass River Mine
15.3 Accounting Information
Bass River Mine will have to pay taxes to both the federal government and the state of
New Jersey. These taxes will be based on the amount of total profit taken in by the company at
the mine. After looking at the federal income tax brackets for corporations, Bass River Mine will
fall in the last section of the bracket where revenue exceeds $18,333,333. The bracket states
that the company will pay not pay a base amount because of the large revenue generation.
3%
41%
0%
42%
14%
Annual Operating Cost
Materials Handling
Mining Equipment
Surface Facilities
Processing
Personnel Costs
Bass River Mine Site
Cost and Feasibility Analysis 138
However, instead of paying tax on a base amount the company will pay tax on 35% of the
taxable income taken in per year (marielandel.com). New Jersey has specific rules for
corporations based on the Corporation Business Tax Act. The Division of taxation in New
Jersey’s Department of the Treasury indicates Bass River Mine will pay a 9% flat tax on all
taxable income. No base payment is required (NJ.gov).
As discussed before, the company will not pay any royalty fees. Therefore, the
accounting department will not be concerned with any royalty contracts. The operational costs
of the mine have been calculated in previous reports by the company. The accounting
department of Bass River Mine will constantly be recalculating operation and maintenance
costs to make sure that the company is following the predicted track. If operational fees begin
to stray outside of predetermined values, the fees will be brought before the company to
evaluate what has changed and what improvements can be made to help the company’s
business model.
The depreciation of the facility and the equipment used by the Bass River Mine will be
filed as deductions for tax purposes. The rate of deprecation was determined by using the
straight line method. The depreciation value that was used after calculations for the Bass River
Mine was 15%. The buildings will not have to be replaced on site because the expected life is 75
years. However, we will be replacing some equipment on site after the first 30 years of mining.
The salvage rate will not be taken into account when selling old equipment and when mining is
complete because the value after 30 years is below 10%.
Bass River Mine Site
Cost and Feasibility Analysis 139
15.4 Feasibility Analysis
The production costs for the Bass River Mine were calculated per ton of mined rock to
simplify cost estimates when production differs during certain periods. The production cost per
ton of rock is calculated at $1.47 while production cost per ton iron is $8.66. The production
cost per ton of rock includes $.21 for personnel, $.04 for handling, $.61 for processing, and $.60
for equipment. Cost per ton of rock for permitting, reclamation, and facilities is negligible
compared to other costs.
With annual estimated sales of approximately seven million tons of iron at an average
sale price of $158.30 per ton, the annual sales revenue is estimated to be $1 billion. The taxable
income, after operating costs, depreciation, depletion, and developmental costs are deducted,
is estimated to be $900 million. The net income after deduction of federal and states taxes is
estimated to be $533 million. The net cash flow after adding in depreciation and depletion is
estimated to be $695 million.
Financial outlook will be different during the years that require large capital investment
and during the scale-up period. The cash flow for the first 20 years of the mine life is included in
Appendix O. Assumed variables for the discount cash flow analysis are listed below in Table 15-
III. The cash flow diagram for the first 20 years is also shown below in Figure 15-3. The cash flow
diagram shows that after year three the cash flow will be consistent unless unforeseen
expenditures arise.
Bass River Mine Site
Cost and Feasibility Analysis 140
Table 15-III: Assumed Variable
Assumption Value
Average Sale Price
$158.30
Depletion Rate 15%
NJ Tax Rate 6%
Federal Tax Rate 35%
Discount Rate 11%
Operating Cost $2.93
Salvage Value N/A
Figure 15-3: Cash Flow Diagram
Using the cash flow analysis for Bass River Mine, several indicators for economic
feasibility were determined. The net present value for Bass River Mine was determined using
an inflation rate of 3% and a discount rate of 11%. The cumulative net present value for the first
20 years of the mine life is shown below in Figure 15-4.
-$100,000,000.00
$0.00
$100,000,000.00
$200,000,000.00
$300,000,000.00
$400,000,000.00
$500,000,000.00
$600,000,000.00
$700,000,000.00
1 2 3 4 5 6 7 8 9 101112131415161718192021
Ne
t C
ash
Flo
w (
$)
Years
Cash Flow Diagram
Bass River Mine Site
Cost and Feasibility Analysis 141
Figure 15-4: Cumulative Net Present Value
Figure 15-4 shows information regarding the payback period and net present value for
Bass River Mine. Bass River Mine’s net present value is estimated at $5,360,000,000 with a
payback period of around two and a half years. The payback period for the large capital is short
and the net present value is high making Bass River Mine a safe and very profitable project.
Another indicator for economic feasibility for Bass River Mine is the rate of return on
the investment. The rate of return is the average annual yield gained by the investment during
the project. The rate of return was determined by calculating the discount rate when the net
present value is equal to zero. For a project to even be considered, it usually requires a rate of
return of greater than 15%. With such a large project as Bass River Mine, a rate of return of at
least 20% is desired. The calculated rate of return, for the first 20 years, for Bass River Mine is
280% while the initial capital investment is $86.5 million.
Sensitivity analyses were performed for both the net present value and the rate of
return to show fluctuation based off changes in sales price, operating cost and capital
investment. The sensitivity analyses are shown below in Figure 15-5 and Figure 15-6. For both
-$5,000,000,000.00
$0.00
$5,000,000,000.00
$10,000,000,000.00
$15,000,000,000.00
0 5 10 15 20 25Ru
nn
ing
NP
V (
$)
Year
Cumulative NPV
Bass River Mine Site
Cost and Feasibility Analysis 142
graphs, the change in operating cost has almost no effect on the net present value or the rate
of return. Change in capital cost for the net present value analysis shows almost no change
while change in sales price shows an almost $4 billion difference. Capital investment and sales
price both show large effect on rate of return. The sales price has slightly more effect on rate
of return when both sales price and capital cost increases but has less effect on rate of return
when both sales price and capital cost decrease.
Figure 15-5: Net Present Value Sensitivity Analysis
Figure 15-6: Rate of Return Sensitivity Analysis
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
30 20 10 0 -10 -20 -30
Ne
t P
rese
nt
Val
ue
(b
illio
ns)
Change (%)
Change in NPV
Sales Price
Operating Cost
Capital Investment
200.00
250.00
300.00
350.00
400.00
30 20 10 0 -10 -20 -30
Rat
e o
f R
etu
rn (
%)
Change (%)
Change in ROR
Sales Price
Operating Cost
Capital Investment
Bass River Mine Site
Cost and Feasibility Analysis 143
The economic feasibility of Bass River Mine is very favorable based on the indicators
calculated from the cash flow analysis. The expected rate of return of 280% is so large that even
with a 200% change in sales price the project would prove economic. The required capital is
large at $86.5 million, but with such great indicators, backing should be found easily. The
payback period of just two and a half years is short for such a large project, so most of the life is
large profit. The net present value of $5.3 billion is large especially since this analysis is done for
only 20 years. The economic indicators show that even with huge market fluctuations, Bass
River Mine will be very profitable.
Bass River Mine Site
Summary and Conclusions 144
REL Company
Chapter 16
Bass River Mine Project: Summary and Conclusions
Bass River Mine Site
Summary and Conclusions 145
16.1 Mine Description
Bass River Mine is a property owned by REL Co. in the Bass River area of eastern New
Jersey. The area contains large amounts of iron ore that will be mined using an open pit
technique and then processed into useable iron ore. The property covers around 2,500 acres of
land, and based on borehole data, the iron ore body at certain places is less than 20ft below the
surface. The seam then sinks to around 580 feet at some points, which means that the areas
can be mined with an extremely low stripping ratio. The low stripping ratio makes the proposed
open pit mine economical and efficient compared to other open pit iron ore mines.
Once the ore has been extracted from the pit it will be loaded onto haul truck that will
transport it to the primary crusher. The material will be crushed and transported through the
processing facility on conveyor belts, where it will go through secondary crushers until it
reaches correct specifications. The material will then be transported directly to rail cars, where
it will be hauled via railway off the site. The iron ore that leaves the site will be used in steel
production, afterwards the products will be used in the nearby cites of Philadelphia and New
York City. The total amount of production that the mine plans to achieve is seven million tons of
iron ore per year.
The company plans to have two years of pre-production and then the mine will stay in
production for over 50 years. The mine will last two years and begin when the mining is
complete. All materials that are still usable will be taken to other mine sites owned by REL Co.
and employees will be transferred to other sites if desired. The reclamation process will remain
under observation by the company indefinitely or until the land is sold.
Bass River Mine Site
Summary and Conclusions 146
16.2 Technical Issues and Concerns
One of the most important concerns at Bass River Mine is the health and safety of the
personnel, while the mine is being worked. Not addressing the safety and health of workers
effectively could lead to economic losses, injuries to personnel and even fatalities if not dealt
with in a timely manner. Bass River Mine will be in constant contact with the Mining Safety and
Health Administration (MSHA) to ensure the health and safety of all personnel at the mine.
There will be timely safety training conducted by MSHA inspectors and administrative certified
staff. An emergency response plan (ERP) will be written before development at the mine
commences, and all the workers will be provided access the ERP. A minimum of four
inspections will be conducted by MSHA throughout the course of a year to ensure all the health
and safety requirements at the mine site are met. Internal inspections will be conducted by REL
Co. to ensure Bass River Mine is going above and beyond MSHA regulations. Maintenance of
mobile and electrical equipment, regulating water quality, regulating air quality and regular
maintenance of haul roads are some of the issues that the risk management team at REL Co.
will address during the development phase of the mine.
Another issue that will be regularly addressed at Bass River Mine is the environmental
impact of surface mining. Mine administrative staff will remain in close contact with the
Environmental Protection Agency (EPA) from the permitting to the reclamation phase. The
Corporate Social Responsibility (CSR) team will ensure that compliance is met at all times with
any environmental issue. Sustainable development will be a huge part of reclamation after
operation at the mine ceases. All personnel will be trained to handle the CSR guidelines that are
Bass River Mine Site
Summary and Conclusions 147
devised for Bass River Mine. Just as for health and safety an ‘above and beyond’ approach will
be taken for all environmental impacts of mining.
16.3 Financial Feasibility
REL Co.’s Bass River operation has the potential to make strong profits throughout the
life of the mine. Cost assessments were completed and included expenses for equipment,
property, facilities, personnel, processing, handling, reclamation and permitting. Selling prices
will vary based on grade and contractual agreements, but on average, selling price for the iron
ore will be $158.30. Through a discounted cash flow-rate of return (DCF-ROR) analysis, the rate
of return was determined to be 280%. This rate of return surpasses the usual minimal attractive
rate of return (MARR) for industry by a large margin. At such a high rate, fluctuations in price
will have minimal effects on profit. Net present value for the operation is $5.35 billion with a
discount rate of 11%.
After initial development, annual production of approximately seven million tons will
yield sales revenues of $1.12 billion per year. Taxes, operating costs and other expenses will
reduce a significant amount of sales revenue. Cash flow, with all applicable deductions, will be
$694 million from year three until the closure process commences. Positive cash flow will begin
at the end of year three with enough profit to cover initial capital investment. Additional capital
investment will be necessary to replace equipment. An estimated equipment life of 30 years
indicates a single replacement cycle. The output of Bass River Mine will provide large profits for
REL Co. and shareholder for decades to come.
Bass River Mine Site
Summary and Conclusions 148
16.4 Conclusion and Recommendations
The feasibility study for Bass River Mine shows huge profit in rate of return and quick
return on investment. The financial analysis tools used indicate that Bass River Mine will be a
very attractive for investors. The capital investment is quite large so it will take some time to
acquire funds from investment bankers or other third parties. The local area may not be
equipped to handle such a large operation. During permitting, steps will be taken to advance
local industry and better ready Bass River and the surrounding areas. Permitting will take a long
time due to the extensive nature of the project so the permitting process should be started as
soon as possible. The Bass River Mine will prove to be one of the largest producers of iron ore
in the country once production begins in full.
Bass River Mine Site
References 149
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“Land Values-2012 Statistics.” National Agriculture Statistics Service-United States Department of Agriculture, USDA. Aug 2012. Web. 19 Mar. 2013. <http://www.nass.usda.gov/Publications/Todays_Reports/reports/land0812.pdf>
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Bass River Mine Site
Appendices 154
Appendices
Bass River Mine Site
Appendix B B-1
Appendix B
Figure B-1: Towns near West Tuckerton and the Bass River Mine.
Bass River Mine Site
Appendix B B-2
Table B-I: Demographic of Bass River Township, NJ
Population
Population by Sex/Age
Total Population 1443
Male 737
Female 706
Housing Status
Under 18 291
Total 587
18 and over 1152
Occupied 522
20-24 104
Owner-occupied 422
25-34 173
Population in owner-occupied
1170
35-49 327
Renter-occupied 100
50-64 320
Population in renter-occupied
273
65 and over 187
Households with individuals under 18
171
Vacant 65
Population by Ethnicity
Vacant: for rent 11
Hispanic or Latino 45
Vacant: for sale 13
Non-Hispanic or Latino 1398
Population by Race
White 1405
African American 4
Asian 11
American Indian 2
Native Hawaiian and
Pacific Islander 0
Other 5
Identified by two or
more 16
Bass River Mine Site
Appendix C C-1
Appendix C
*Red dots on all maps indicate Bass River Mine location
Figure C-1: Detailed Geologic Map of New Jersey (NJGWS)
Bass River Mine Site
Appendix C C-2
Figure C-2: New Jersey Geological Survey (NJGWS)
Bass River Mine Site
Appendix C C-3
Figure C-3: 7.5 Minute Quadrangle Map of Oswego Lake (NJGWS)
Bass River Mine Site
Appendix C C-4
Figure C-4: Topography Map of Southern Burlington County, New Jersey (NJGWS)
Bass River Mine Site
Appendix D D-1
Appendix D
Table D-I: Bass River Mine Drill Hole Location
Hole Northing (ft) Easting (ft) Elevation (ft)
BD1 2139422 362491 1641.3
BD2 2137045 361924 1570.4
BD3 2136258 361729 1511.5
BD4 2136814 361307 1580
BD5 2135180 362694 1433
BD6 2136415 361169 1551.3
BD7 2135619 361972 1461.6
BD8 2135826 361369 1490.7
BD9 2134996 362227 1435.9
BD10 2134979 362215 1436
BD11 2135241 361467 1465
BD12 2135048 361010 1470.9
BD13 2135745 359809 1552
BD14 2135261 360451 1502
BD15 2134625 360244 1478
BD16 2134066 360462 1486
BD17 2133931 359729 1492
BD18 2134511 359619 1497
BD19 2134257 358948 1487
BD20 2135494 358960 1562.5
BD21 2134331 358592 1493
BD22 2135512 358060 1573.9
BD23 2133480 358060 1465.4
BD24 2135032 357762 1560.3
BD25 2134056 357460 1462.2
BD26 2136530 357059 1616
BD27 2135039 357185 1563.3
BD28 2134173 356558 1517.2
BD29 2135621 355692 1591.4
BD30 2134918 355965 1557.2
BD31 2133211 356277 1430.2
BD32 2135036 355318 1496.6
BD33 2134284 355529 1523.3
BD34 2136449 354258 1532.9
BD35 2135057 355034 1391.5
Bass River Mine Site
Appendix D D-2
Table D-I: Bass River Mine Drill Hole Location
Hole Northing (ft) Easting (ft) Elevation (ft)
BD36 2136550 353912 1574.3
BD37 2135659 354122 1413.9
BD38 2135211 353561 1357.6
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Appendix D D-3
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD1 0 20 0
BD1 20 70 16.38
BD1 70 120 23.87
BD1 120 170 20.5
BD1 170 220 21.21
BD1 220 270 19.54
BD1 270 320 26.21
BD1 320 370 22.69
BD1 370 395 17.35
BD2 0 20 0
BD2 20 70 20.16
BD2 70 120 20.46
BD2 120 170 16.108
BD2 170 220 11.55
BD2 220 270 20.37
BD2 270 320 22.21
BD2 320 370 20.17
BD2 370 390 14.46
BD3 0 5 0
BD3 5 55 19.44
BD3 55 105 10.62
BD3 105 155 20.1
BD3 155 205 19.1
BD3 205 255 17.23
BD3 255 305 25.8
BD3 305 355 27.41
BD3 355 405 21.88
BD3 405 410 17.54
BD4 0 13 0
BD4 13 63 18.22
BD4 63 113 20.51
BD4 113 163 19.52
BD4 163 213 23.63
BD4 213 263 29.17
BD4 263 313 25.08
BD4 313 330 23.05
BD5 0 51 0
Bass River Mine Site
Appendix D D-4
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD5 51 101 15.26
BD5 101 151 19.39
BD5 151 201 23.9
BD5 201 251 20.68
BD5 251 301 19.31
BD5 301 351 25.44
BD5 351 401 18.68
BD5 401 451 18.2
BD5 451 501 23.39
BD5 501 551 22.2
BD5 551 580 19.77
BD6 0 20 0
BD6 20 70 10.42
BD6 70 120 21.21
BD6 120 170 11.23
BD6 170 220 15.57
BD6 220 270 27.46
BD6 270 320 26.31
BD6 320 370 16.79
BD6 370 372.5 9.58
BD7 0 20 0
BD7 20 70 26.65
BD7 70 120 15.34
BD7 120 170 10.2
BD7 170 220 20.28
BD7 220 270 16.31
BD7 270 320 14.85
BD7 320 370 26.74
BD7 370 420 29.37
BD7 420 470 21.55
BD7 470 494 17.14
BD8 0 16 0
BD8 16 66 13.21
BD8 66 116 11.28
BD8 116 166 15.9
BD8 166 216 13.2
BD8 216 266 9.76
Bass River Mine Site
Appendix D D-5
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD8 266 316 27.37
BD8 316 366 25.84
BD8 366 416 18.54
BD8 416 420 13.1
BD9 0 52 0
BD9 52 102 18.65
BD9 102 152 16.4
BD9 152 202 16.94
BD9 202 252 14.69
BD9 252 302 19.02
BD9 302 352 18.79
BD9 352 402 22.44
BD9 402 452 21.68
BD9 452 502 27.5
BD9 502 552 16.71
BD9 552 570 12.19
BD10 0 52 0
BD10 52 102 19.15
BD10 102 152 17.1
BD10 152 202 27.87
BD10 202 252 26.45
BD10 252 302 26.33
BD10 302 352 22.51
BD10 352 402 15.39
BD10 402 452 26.63
BD10 452 502 27.8
BD10 502 552 19.47
BD10 552 570 12.09
BD11 0 28 0
BD11 28 78 18.78
BD11 78 128 17.29
BD11 128 178 12.7
BD11 178 228 16.74
BD11 228 278 19.46
BD11 278 328 24.38
BD11 328 378 27.43
BD11 378 428 27.79
Bass River Mine Site
Appendix D D-6
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD11 428 475 16.13
BD12 0 20 0
BD12 20 70 21.04
BD12 70 120 15.4
BD12 120 170 17.66
BD12 170 220 22.96
BD12 220 270 18.37
BD12 270 320 17.98
BD12 320 370 26.1
BD12 370 420 25.41
BD12 420 470 18.45
BD12 470 480 9.47
BD13 0 9 0
BD13 9 59 21.03
BD13 59 109 21.57
BD13 109 159 20.57
BD13 159 209 23.06
BD13 209 259 26.35
BD13 259 309 22.97
BD13 309 332 16.98
BD14 0 6 0
BD14 6 56 14.41
BD14 56 106 16.79
BD14 106 156 19.16
BD14 156 206 14.88
BD14 206 256 17,12
BD14 256 306 24.31
BD14 306 356 25.17
BD14 356 406 18.21
BD14 406 420 10.65
BD15 0 15 0
BD15 15 65 25.13
BD15 65 115 23.49
BD15 115 165 26.21
BD15 165 215 13.18
BD15 215 265 16.57
BD15 265 315 19.69
Bass River Mine Site
Appendix D D-7
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD15 315 365 21.62
BD15 365 415 24.4
BD15 415 435 14.91
BD16 0 44 0
BD16 44 94 12.64
BD16 94 144 17.01
BD16 144 194 21.36
BD16 194 244 15.95
BD16 244 294 20.2
BD16 294 344 21.26
BD16 344 394 12.78
BD16 394 444 26.47
BD16 444 494 21.6
BD16 494 544 20.61
BD16 544 550 12.28
BD17 0 50 12.71
BD17 50 100 16.19
BD17 100 150 19.7
BD17 150 200 13.66
BD17 200 250 23.23
BD17 250 300 21.15
BD17 300 350 15.57
BD17 350 400 17.8
BD17 400 450 22.65
BD17 450 500 22.31
BD17 500 515 10.94
BD18 0 23 0
BD18 23 73 26.11
BD18 73 123 26.02
BD18 123 173 12.09
BD18 173 223 20.41
BD18 223 273 19.48
BD18 273 323 16.51
BD18 323 373 22.3
BD18 373 423 24.35
BD18 423 450 15.86
BD19 0 20 0
Bass River Mine Site
Appendix D D-8
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD19 20 70 25.72
BD19 70 120 17.07
BD19 120 170 20.61
BD19 170 220 23.05
BD19 220 270 22.57
BD19 270 320 21.07
BD19 320 370 22.11
BD19 370 420 19.37
BD20 0 25 5.09
BD20 25 75 14.63
BD20 75 125 19.18
BD20 125 175 8.57
BD20 175 225 22.69
BD20 225 275 23.28
BD20 275 325 21.29
BD20 325 345 15.84
BD21 0 31 0
BD21 31 81 21.99
BD21 81 131 13.92
BD21 131 181 23.11
BD21 181 231 18.15
BD21 231 281 16.58
BD21 281 331 21.12
BD21 331 381 25.84
BD21 381 431 14.71
BD21 431 439 9.43
BD22 0 23 0
BD22 23 73 17.84
BD22 73 123 16.08
BD22 123 173 20.9
BD22 173 223 20.57
BD22 223 273 21.16
BD22 273 323 26.63
BD22 323 373 21.13
BD22 373 391 16.5
BD23 0 53 0
BD23 53 103 16.15
Bass River Mine Site
Appendix D D-9
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD23 103 153 25.63
BD23 153 203 16.59
BD23 203 253 20.46
BD23 253 303 20.91
BD23 303 353 26.57
BD23 353 403 20.23
BD23 403 453 23.52
BD23 453 503 17.77
BD24 0 43 0
BD24 43 93 16.13
BD24 93 143 15.64
BD24 143 193 22.17
BD24 193 243 19.42
BD24 243 293 11.57
BD24 293 343 21.86
BD24 343 393 24.79
BD24 393 444 16.81
BD25 0 7 0
BD25 7 57 8.95
BD25 57 107 17.14
BD25 107 157 13.51
BD25 157 207 19.84
BD25 207 257 17.67
BD25 257 307 11.57
BD25 307 357 17.46
BD25 357 407 23.79
BD25 407 455 21.19
BD26 0 101 0
BD26 101 151 22.11
BD26 151 201 27.94
BD26 201 251 20.24
BD26 251 260 23.12
BD27 0 95 0
BD27 95 145 17.16
BD27 145 195 24.28
BD27 195 245 19.04
BD27 245 295 18.2
Bass River Mine Site
Appendix D D-10
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD27 295 345 21.69
BD27 345 395 26.05
BD27 395 429 13.81
BD28 0 31 0
BD28 31 81 14.54
BD28 81 131 11.88
BD28 131 181 13.31
BD28 181 231 21.07
BD28 231 281 15.52
BD28 281 331 14.42
BD28 331 381 15.48
BD28 381 431 22.7
BD28 431 481 14.01
BD28 481 484 15.1
BD29 0 43 0
BD29 43 93 23.42
BD29 93 143 19.12
BD29 143 193 23.28
BD29 193 243 21.76
BD29 243 293 18.33
BD29 293 314 19.18
BD30 0 89 0
BD30 89 139 17.72
BD30 139 189 20.57
BD30 189 239 16.12
BD30 239 289 15.81
BD30 289 339 12.63
BD30 339 389 15.46
BD30 389 410 19.96
BD31 0 64 13.62
BD31 64 114 21.8
BD31 114 164 16.3
BD31 164 214 22.53
BD31 214 264 23.2
BD31 264 314 16.64
BD31 314 364 16.45
BD31 364 414 17.79
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Appendix D D-11
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD31 414 464 18
BD31 464 508 13.8
BD32 0 20 8.43
BD32 20 70 25.15
BD32 70 120 10.42
BD32 120 170 26.93
BD32 170 220 20.61
BD32 220 270 24.16
BD32 270 309 18.3
BD33 0 30 12.72
BD33 30 80 14.26
BD33 80 130 13.87
BD33 130 180 18.33
BD33 180 230 16.01
BD33 230 280 19.21
BD33 280 330 17.12
BD33 330 380 21.08
BD33 380 430 16.94
BD33 430 441 14.19
BD34 0 8 0
BD34 8 58 22.73
BD34 58 108 24.74
BD34 108 157 11.59
BD35 0 6 3.77
BD35 6 56 11.96
BD35 56 106 21.54
BD35 106 156 17.82
BD35 156 179 16.46
BD36 0 20 0
BD36 20 70 21.26
BD36 70 120 28.06
BD36 120 170 19.93
BD36 170 180 16.25
BD37 0 40 8.96
BD37 40 90 26.62
BD37 90 140 15.85
BD37 140 142 13.89
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Appendix D D-12
Table D-II: Bass River Mine Drill Hole Assays
Hole From (ft) To (ft) MgFe (%)
BD38 0 23 2.43
BD38 23 73 25
BD38 73 123 10.73
BD38 123 135 13.6
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Appendix D D-13
Table D-III: Bass River Mine Drilling Costs per Hole
Hole Length (ft) Cost ($)
BD1 395 9875
BD2 390 9750
BD3 410 10250
BD4 330 8250
BD5 580 14500
BD6 372.5 9312.5
BD7 494 12350
BD8 420 10500
BD9 570 14250
BD10 570 14250
BD11 475 11875
BD12 480 12000
BD13 332 8300
BD14 420 10500
BD15 435 10875
BD16 550 13750
BD17 515 12875
BD18 450 11250
BD19 420 10500
BD20 345 8625
BD21 439 10975
BD22 391 9775
BD23 503 12575
BD24 444 11100
BD25 455 11375
BD26 260 6500
BD27 429 10725
BD28 484 12100
BD29 314 7850
BD30 410 10250
BD31 508 12700
BD32 309 7725
BD33 441 11025
BD34 157 3925
BD35 179 4475
BD36 180 4500
BD37 142 3550
Bass River Mine Site
Appendix D D-14
Table D-III: Bass River Mine Drilling Costs per Hole