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  #11  
Old 08-06-2012, 05:00 PM
Lemmie Check Lemmie Check is offline
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The thing about % where mine opens is that, in some simulations, it's not good to open the mine, so this metric doesn't directly tell you anything about profitability. I didn't use it for that reason.
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  #12  
Old 08-06-2012, 05:12 PM
komorgan komorgan is offline
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Originally Posted by Lemmie Check View Post
The thing about % where mine opens is that, in some simulations, it's not good to open the mine, so this metric doesn't directly tell you anything about profitability. I didn't use it for that reason.
Just because the mine doesn't open in a particular simulation doesn't necessarily mean that the mine wouldn't have been profitable. Remember, the mine will not open if the estimated decay rate is less than minimum to mine. It's possible (especially if you don't conduct enough assays) that you end up with an estimated decay that's less than minimum to mine, but the real decay rate is greater than minimum to mine. In that case, the mine will close under potentially profitable circumstances.
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  #13  
Old 08-06-2012, 05:14 PM
komorgan komorgan is offline
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Just because the mine doesn't open in a particular simulation doesn't necessarily mean that the mine wouldn't have been profitable. Remember, the mine will not open if the estimated decay rate is less than minimum to mine. It's possible (especially if you don't conduct enough assays) that you end up with an estimated decay that's less than minimum to mine, but the real decay rate is greater than minimum to mine. In that case, the mine will close under potentially profitable circumstances.
Just to be clear, when I said "decay rate", I really meant 1.0 minus the decay rate.
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  #14  
Old 08-06-2012, 05:44 PM
irana irana is offline
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"%where mine opens"...how I interpret it is I guess different. I look at it the liklihood of conducting x assays based on that specific scenario and management not pursuing the project, because the result from conducting assays (yield of gold) was not favourable.

Am I wrong?
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  #15  
Old 08-06-2012, 10:36 PM
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"%where mine opens"...how I interpret it is I guess different. I look at it the liklihood of conducting x assays based on that specific scenario and management not pursuing the project, because the result from conducting assays (yield of gold) was not favourable.

Am I wrong?
You're on the right track - the % where mine opens means the percentage of scenarios where they conducted the stated number of assays and determined that there was enough gold (more than the minimum decay complement to mine) to justify opening the mine. Note that this is the decay rate determined by the assays, which may not be the true decay rate, and that this doesn't mean that the mine would make money even if it does open.
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  #16  
Old 08-06-2012, 10:58 PM
irana irana is offline
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makes more sense now! thanks.
So, now I wonder if anyone has NOT included %where mine opens in task 2/3.

I feel that I should not be including this in my paper, since it adds no significant value.
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  #17  
Old 08-06-2012, 11:03 PM
KevinR KevinR is offline
 
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I'll give a screenshot of what I faced to give you guys a clearer picture. I only gave a sample using 0.92 as the MTM, but the trend is similar for other MTMs. Based on my results is there any reason for me to go beyond 1 assay? I really can't think of any.

P/S: If my screenshot is in any way a violation of the rules, please say so and I'll remove it. I'm only posting it for discussion.
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  #18  
Old 08-06-2012, 11:16 PM
irana irana is offline
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Have you tried MTM of 0.94?
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  #19  
Old 08-06-2012, 11:24 PM
KevinR KevinR is offline
 
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Yes but the trend is identical for all risk measures: the less assays the better :/
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  #20  
Old 08-07-2012, 05:36 PM
Lemmie Check Lemmie Check is offline
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Quote:
Originally Posted by komorgan View Post
Just because the mine doesn't open in a particular simulation doesn't necessarily mean that the mine wouldn't have been profitable. Remember, the mine will not open if the estimated decay rate is less than minimum to mine. It's possible (especially if you don't conduct enough assays) that you end up with an estimated decay that's less than minimum to mine, but the real decay rate is greater than minimum to mine. In that case, the mine will close under potentially profitable circumstances.
Yes, but that works the other way too. The decay rate could be overestimated and you could open the mine when it's unprofitable. That's the whole point of doing multiple simulations.

KevinR--have you tried still higher MTMs? Try a bunch of values between 0.9 and 1.0. There's usually a sweet spot where more assays have a beneficial effect.
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