Modelling geological variability in the LabMag iron ore deposit and effects on the long-term production schedule

Abstract

In this study, a set of geological simulations of the LabMag iron ore deposit in Labrador, Canada, is generated in order to quantify the geological risk in a pre-existing life of mine production schedule. The approach employs, firstly, min/max autocorrelation factors with missing data that allows for the joint geostatistical simulation of spatially correlated variables of interest for large-scale deposits such as LabMag. The seven structural layers of the deposit are simulated with the layer thicknesses acting as the set of correlated variables of interest. Secondly, four correlated geochemical properties within each domain (layer) are simulated. The simulated scenarios of LabMag represent the uncertainty of the deposit's attributes of interest and are subsequently utilised to quantify and assess the risk of an existing mine plan, in terms of meeting production targets and generating the cash flows expected. The LabMag mine plan assessed by quantifying risk in its production forecasts is based on a single conventional (deterministic) deposit model.