Activity Based Costing (ABC)Cost modelling based on activities performed and their relevant cost drivers, plus a distinction between period/fixed and attributable/variable costs.
Artificial Intelligence (AI)Simulated intelligence in machines.
AttenuatorsZero sum of penalties and rewards to achieve a desired outcome
Attributable CostA more accurate term for Variable Costs. Costs that will change in proportion to the relevant driver of the activity they relate to. Using this term allows a broader palette of quite specific cost drivers than just tonnes of ounces of production and sales.
Base CaseThe existing or starting life-of-mine plan for a mining business, which may or may not have had optimisation techniques applied.
Best-Case MiningA plan to mine a pit in many incremental Pushbacks. This tends to defer waste mining activity in the Mine Schedule which is good for NPV, but may introduce impracticalities due to insufficient Minimum Mining Width.
Big DataBig Data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis.
BlendMixing different grades or types of mined materials to produce a regulated and predictable processing feed or product specification. The objective being to achieve a minimum, maximum or a specified range of a certain characteristic.
Blue Line MiningTechnical view. To operate a mine conventionally with a focus on maximising reserves, recoveries, efficiencies and LOM, whilst also minimising costs. Units are tonnes, grades, recoveries. (i.e. physical measures.)
BottleneckA point in a system that limits the throughput or performance of the system. (i.e. a constraint.)
Brownfield investmentAn expansion or development of, or alongside, an existing operation.
Business Improvement (BI)To undertake activities designed to increase business performance.
CapEx (Capital Expenditure)Capital costs that will be recorded in the Balance Sheet as an asset rather than in the Profit and Loss statement. Capital costs are often amortised or depreciated over the useful life of the asset, thereby trickling through to the Profit and Loss Statement.
CapitalThe funds required to enable the investment in plant, equipment, infrastructure and working cash balances.
CapitalismAn economic and political system in which trade and industry are controlled by private owners for profit. The focus is on creating economic value.
Change ManagementThe processes, tools and techniques required to manage the people side of change to achieve desired business outcomes. Involves behavioural science.
Corporate Social Responsibility (CSR)A corporate initiative to assess and take responsibility for the company’s effects on environmental and social wellbeing.
Cost AccountingA cost reporting system that groups costs by type or responsibility.
Cost ModellingA costing system which provides a view of cost behaviour and the profitability of products or services.
Cross-functional collaborationA group of people with different functional expertise coming together to work towards a common goal.
Cut-offThe criteria (grade, value or other) by which mined material is determined to be waste, stockpiled or processed.
Development CostIn an underground mine, the cost of establishing shafts, tunnels and underground infrastructure to access the stopes which contain the valuable ore.
Discount FactorA factor which, when multiplied by a predicted future cash flow, gives Discounted Cash Flow (CDF), i.e. its present value. Discount Factor = 1 / (1 + Discount Rate)^time
Discount RateThe annual rate used to discount future cash flows in the Net Present Value (NPV) calculation. Discount Rate = Opportunity Cost + Risk Premium
Discounted Cash Flow (DCF)A valuation method used to estimate the attractiveness of an investment opportunity.
DCF = future cash flow multiplied by the Discount Factor for the respective period.
Due Diligence (DD)An investigation or audit of a potential investment to confirm all facts, such as review of all financial records, plus anything else deemed material.
Enduring Licence to OperateOngoing positive support and motivation from all stakeholders for the existence of the operation.
Enterprise OptimisationA single integrated model that consolidates existing knowledge and data from disparate systems.
Feasibility Study (FS)A Feasibility Study is an indepth report on many of the same topics as a Pre-feasibility Study.
Financial AccountingA system for capturing costs, primarily by the type of goods or services being acquired.
Five Capitals FrameworkA framework capturing the effect of a project or operation on financial, manufactured, social, human and natural capital.
Fixed CostBusiness operating expenses, that will be incurred at the same level regardless of whether production or sales increase or decrease during a period.
Framework AgreementAn agreement with suppliers to establish terms governing contracts that may be awarded during the life of the agreement.
Green Line MiningStakeholder view. To operate a mine maximising the economics within the social/political/environmental context within which it operates. (i.e. multi-stakeholder measures.)
Greenfield investmentDevelopment of an operation where no previous operation exists.
Heap LeachA process of mineral extraction involving staking ore in piles and irrigating it with a solvent/reagent to extract the valuable minerals contained.
High Grade OreOre with the highest level of valuable material to be mined.
Initial Public Offering (IPO)The first sale of stock issued by a company to the public
Integrated Strategic PlanningA concept of long-term planning which considers all parts of the value chain, all periods and all stakeholders.
Internal Rate of Return (IRR)A metric used in capital budgeting measuring the economics of potential investments.
Jeff Whittle, AOThe Australian founder of Whittle Consulting and the developer of Whittle Optimisation software products.
JORCJoint Ore Reserve Committee. The Australian standard for mineral resource and reserve reporting.
Ken LaneAuthor of The Economic Definition of Ore: Cut-off Grades in Theory and Practice, 1988.
Key Performance Indicator (KPI)A set of quantifiable measures that a company or industry uses to gauge or compare performance over time.
Lerchs-GrossmannDevelopers of the Lerchs-Grossmann algorithm (LGA) to determine the optimised economically minable pit size and shape.
Life of Mine (LOM)The time in which, through the employment of available capital, geographical and technical analysis, it is planned that ore reserves will be extracted and processed for delivery to market.
LogisticsA process within supply chain management that plans, implements and controls the efficient movement of goods and services. Can apply to inbound supplies or outbound products.
Low Grade OreOre with the lowest level of valuable material to be mined.
Management AccountingA system for reporting costs grouped by who in the organisation is responsible for managing them.
Mergers & Acquisitions (M&A)A merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. When one company takes over another and clearly establishes itself as the new owner the purchase is an acquisition.
Mine ScheduleThe planned sequence and rate at which the designed shapes of a mine (pit and/or underground) are to be extracted.
Minimum Mining WidthIn an Open Pit, the minimum width that is required for excavators and dump trucks to safely and efficiently operate. This affects the design of pits and Pushbacks.
Monte Carlo ApproachA strategic planning method involving testing a large sample (generated mathematically) of the population of possible settings and outcomes. Used to understand the impact of risk and uncertainty in financial, project management, cost and other forecasting models.
Net Cash FlowRevenues and other cash receipts, less operating costs and other cash outlays.
Net Present Value (NPV)The sum of discounted cash flows, using an appropriate discount rate which reflects opportunity cost and risk.
NPV = Sum of DCF’s.
NI 43-101The Canadian standard for mineral resource and reserve reporting.
Non-Attributable CostCosts which are not directly related to current operations. In mining this can include exploration, marketing, research and development. They are things we spend money on to improve the future of the business.
OpEx (Operating Expenditure)Cost and outlays, other than capital costs, that are incurred in the ongoing operation of a mining business. (i.e. that will be recorded in the profit and loss statement of a business.)
Opportunity CostA benefit, profit, or value of something that must be given up to acquire or achieve something else.
Optimised CaseThe life-of-mine plan for a mining business that has been improved over an initial base case.
Period CostA more accurate term for Fixed Costs. (i.e. Costs that are incurred as time passes, as long as the business is operating within a certain range, regardless of the actual level of production or sales in a period.
Pit or Open PitA large, usually deep opening in the ground used for the extraction of rock or minerals from the earth.
Pre-feasibility Study (PFS)A Pre-feasibility Study is an early stage analysis of a potential mining project.
Preliminary Economic Assessment (PEA)A PEA is a study, other than a Pre-feasibility Study or Feasibility Study, which includes an economic analysis of the potential viability of mineral resources.
Prober-EWhittle Consulting’s proprietary software for optimising mining businesses.
ProcessingThe separation of commercially valuable minerals from their ores.
Product Mix & SpecificationThe range, type and specification of material products produced by the mine/plant and delivered to the market.
Project Capital, Capital Cost, Capital ExpenditureFunds required for planning, permits, land plant, equipment, infrastructure and working capital, to create a system with capacity to mine, process and deliver material from the ore body to the market.
PushbackA geographical area within a pit that can be mined in a single, continuous operation. Also called “Phase” or “Stage”.
Red Line MiningShareholder view. To economically optimise a mine by simultaneous, integrated, cross-functional processes, thereby accelerating cash through bottlenecks. Units are “Net Value per Bottleneck Unit” NPV and IRR. (i.e. economic measures.)
Return on Investment (ROI)A metric used in capital budgeting measuring the economics of potential investments.
Risk PremiumThe extra return an investor requires above the risk-free rate of return to compensate for the risk involved in an investment.
Scenarios ApproachA strategic planning method involving the development of different business plans for different possible future conditions, by testing a range of likely assumptions.
SD (Sustainable Development) Balance.A summary analysis showing the positive and negative impacts across a Five Capitals Model of SUSOP outcomes, compared with a base case.
Specified-Case MiningA compromise between Best-case and Worst-case Mining, where Pushbacks are selected to get most of the benefit of Best-Case Mining, whilst still observing a practical Minimum Mining Width.
StockpileA pile or storage location for bulk, often lower-grade/value resource, mined in one period, but intended to be processed in a later period (maybe years later).
StopeA three dimensional shape planned to be excavated in an underground mine to remove the ore that has been rendered accessible by the shafts and drifts.
Strategic AssessmentA brief review to determine the potential outcome of a full Enterprise Optimisation study.
SUSOP™ (Sustainable Operations in Mineral Processing)A management technique for the implementation of sustainable development methodologies. Translating sustainability principles into operating practices, without compromising financial outcomes.
SustainabilityDevelopment that meets the needs of the present without compromising the ability of future generations to meet their own needs.
Tactical Theory of Constraints (TTOC)A methodology that employs the concepts of Theory of Constraints to optimise the performance of operational bottlenecks or constraints.
Theory of Constraints (TOC)A business approach that views any manageable system as being limited in achieving its goals by a very small number of constraints.
Time Value of Money (TVM)The concept that money available at the present time is worth more than the identical sum in the future.
Underground miningA mining technique involving shafts and tunnels, used for the extraction of rock or minerals from below the surface of the earth.
Value at Risk (VaR)A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio within a specific timeframe.
Variable CostBusiness operating expenses, that will change in proportion with production or sales volume during a period.
Weighted Average Cost of Capital (WACC)The rate that a company is expected to pay on average to all security holders to finance assets.
WACC = % debt x cost of debt + % equity x cost of equity.
Worst-Case MiningA plan to mine a pit bench by bench as one large Pushback. This tends to bring waste mining activity forward in the Mine Schedule, which is not good for NPV.