Part D
Hot Rock Mining Company: Profit or Loss?
A copper ore body has been discovered by the Hot Rock Mining Company in the Hells Hole area of the Bradshaw Mountains. Use the following information to determine the success of the Hot Rock Mining Company's mining venture. I suggest writing the questions and any calculations on paper before answering.
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HELLS HOLE ORE DEPOSIT |
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Mining Data Market price for copper = $3.00/lb Type of ore deposit = vein Ore mineral = ????? %Cu in the ore mineral = ????? (see Part B) %ore mineral in the ore body = 25% (0.25) |
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Weight of Copper, Copper Ore, and Waste Rock Weight of ore = 1 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 body x %ore mineral in the ore body x %Cu in the ore mineral |
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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) |
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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 |
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Value of the Ore Body Ore body value = weight of Cu in the ore body x 2000 lbs/ton x market price for copper |
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Profit profit = ore body value - total mining costs |
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Table 13-2. Information for the Hot Rock Mining Company copper ore operation in the Bradshaw Mountains. |
Refer to Table 13-2 and your previous calculations to answer Quiz Me! questions D41 through D50.
After finishing this lesson, complete the form below: