| Terms | Definition |
|---|---|
| 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. |
| Attenuators | Zero sum of penalties and rewards to achieve a desired outcome |
| Attributable Cost | A 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 Case | The existing or starting life-of-mine plan for a mining business, which may or may not have had optimisation techniques applied. |
| Best-Case Mining | A 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 Data | Big 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. |
| Blend | Mixing 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 Mining | Technical 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.) |
| Bottleneck | A point in a system that limits the throughput or performance of the system. (i.e. a constraint.) |
| Brownfield investment | An 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. |
| Capital | The funds required to enable the investment in plant, equipment, infrastructure and working cash balances. |
| Capitalism | An economic and political system in which trade and industry are controlled by private owners for profit. The focus is on creating economic value. |
| Change Management | The 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 Accounting | A cost reporting system that groups costs by type or responsibility. |
| Cost Modelling | A costing system which provides a view of cost behaviour and the profitability of products or services. |
| Cross-functional collaboration | A group of people with different functional expertise coming together to work towards a common goal. |
| Cut-off | The criteria (grade, value or other) by which mined material is determined to be waste, stockpiled or processed. |
| Development Cost | In an underground mine, the cost of establishing shafts, tunnels and underground infrastructure to access the stopes which contain the valuable ore. |
| Discount Factor | A 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 Rate | The 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 Operate | Ongoing positive support and motivation from all stakeholders for the existence of the operation. |
| Enterprise Optimisation | A 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 Accounting | A system for capturing costs, primarily by the type of goods or services being acquired. |
| Five Capitals Framework | A framework capturing the effect of a project or operation on financial, manufactured, social, human and natural capital. |
| Fixed Cost | Business operating expenses, that will be incurred at the same level regardless of whether production or sales increase or decrease during a period. |
| Framework Agreement | An agreement with suppliers to establish terms governing contracts that may be awarded during the life of the agreement. |
| Green Line Mining | Stakeholder view. To operate a mine maximising the economics within the social/political/environmental context within which it operates. (i.e. multi-stakeholder measures.) |
| Greenfield investment | Development of an operation where no previous operation exists. |
| Heap Leach | A process of mineral extraction involving staking ore in piles and irrigating it with a solvent/reagent to extract the valuable minerals contained. |
| High Grade Ore | Ore 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 Planning | A 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, AO | The Australian founder of Whittle Consulting and the developer of Whittle Optimisation software products. |
| JORC | Joint Ore Reserve Committee. The Australian standard for mineral resource and reserve reporting. |
| Ken Lane | Author 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-Grossmann | Developers 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. |
| Logistics | A 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 Ore | Ore with the lowest level of valuable material to be mined. |
| Management Accounting | A 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 Schedule | The planned sequence and rate at which the designed shapes of a mine (pit and/or underground) are to be extracted. |
| Minimum Mining Width | In 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 Approach | A 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 Flow | Revenues 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 43-101 | The Canadian standard for mineral resource and reserve reporting. |
| Non-Attributable Cost | Costs 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 Cost | A benefit, profit, or value of something that must be given up to acquire or achieve something else. |
| Optimised Case | The life-of-mine plan for a mining business that has been improved over an initial base case. |
| Period Cost | A 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 Pit | A 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-E | Whittle Consulting’s proprietary software for optimising mining businesses. |
| Processing | The separation of commercially valuable minerals from their ores. |
| Product Mix & Specification | The range, type and specification of material products produced by the mine/plant and delivered to the market. |
| Project Capital, Capital Cost, Capital Expenditure | Funds 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. |
| Pushback | A geographical area within a pit that can be mined in a single, continuous operation. Also called “Phase” or “Stage”. |
| Red Line Mining | Shareholder 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 Premium | The extra return an investor requires above the risk-free rate of return to compensate for the risk involved in an investment. |
| Scenarios Approach | A 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 Mining | A 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. |
| Stockpile | A 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). |
| Stope | A 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 Assessment | A 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. |
| Sustainability | Development 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 mining | A 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 Cost | Business 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 Mining | A 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. |