Part C

Malpais Mining, Inc.: Profit or Loss

A copper ore body has been discovered by Malpais Mining, Inc. in the Deadman Canyon area of the Mazatzal Mountains. Use the following information to determine the success of Malpais Mining, Inc.'s mining venture. I suggest writing the questions and any calculations on paper before answering.

DEADMAN CANYON ORE DEPOSIT

Mining Data

Market price for copper = $3.00/lb

Type of ore deposit = disseminated

Ore mineral = ?????

%Cu in the ore mineral = ????? (see Part B)

%ore mineral in the ore body = 5% (0.05)

 

Weight of Copper, Copper Ore, and Waste Rock

Weight of ore = 5 million tons

Weight of waste rock (open-pit method) = weight of ore x 10

Weight of waste rock (underground method) = weight of ore x 0.5

Weight of Cu in the ore body = weight of the ore x %ore mineral in the ore body x %Cu in the ore mineral

 

Mining Costs per ton

Open Pit mining costs = $10 per ton (for ore and waste rock)

Underground mining costs = $100 per ton (for ore and waste rock)

 

Total Mining Costs

Open Pit = (weight of waste rock (tons) + weight of ore (tons)) x Open Pit mining costs

Underground = (weight of waste rock (tons) + weight of ore (tons)) x Underground mining costs

 

Value of the Ore Body

Ore body value = weight of Cu in the ore body x 2000 lbs per ton x market price for copper

 

Profit

profit = ore body value - total mining costs

 

Table 13-1. Information for the Malpais Mining, Inc. Deadman Canyon copper ore operation in the Mazatzal Mountains.


Refer to Table 13-1 and your previous calculations to answer Quiz Me! questions C31 through C40.

Quiz Me! question icon

Quiz Me! / C31   

 

Quiz Me! question icon

Quiz Me! / C32   

 

Quiz Me! question icon

Quiz Me! / C33   

 

Quiz Me! question icon

Quiz Me! / C34  

 

Quiz Me! question icon

Quiz Me! / C35   

 

Quiz Me! question icon

Quiz Me! / C36   

 

Quiz Me! question icon

Quiz Me! / C37   

 

Quiz Me! question icon

Quiz Me! / C38   

 

Quiz Me! question icon

Quiz Me! / C39 

 

Quiz Me! question icon

Quiz Me! / C40