科研成果详情

For mining companies, mineral exploration processes such as drilling holes are very costly, but are necessary to have more accurate assessment of the potential quality and quantity of certain minerals in a new field before mine development and extraction can start. Extended exploration periods can drastically reduce geological uncertainties but can be prohibitively expensive. By contrast, insufficient exploration process will leave substantial uncertainty in the assessment of ore grade and reserve in the field. For a mining company, choosing the optimal time to stop the exploration process and start mine extraction can significantly add value to a new mining project. Due to the large uncertainties present, adopting dynamic and reactive strategies in the decision-making process can mean the difference between a profitable and a loss-making mining project. In this paper, we present a mathematical approach for solving the exploration-to-extraction timing problem. More specifically, we model the decision-making process of a mining company which holds a lease to explore a selected land for a limited time, before exercising the option to start a mining operation or cease the lease. This exploration-to-extraction decision-making process is largely determined by two main sources of uncertainties: the current estimated mineral reserve and the future ore price. Mathematically, we formulate this problem as an optimal stopping problem. The decision to start mining or not is chosen so as to maximise the probability that the whole mining project, after deducting exploration costs, would meet a predefined minimum profit target. In order to solve this mathematical formulation of the exploration-to-extraction problem, we use the simulation-based Regression Monte Carlo method. We assume the mineral ore price follows a mean-reverting process with jumps and the estimated reserve follows a pure jump process with decreasing variance as long as exploration occurs, to account for the uncertainty reduction provided by exploration. We present the output results from the model in the form of intuitive graphical displays, in particular the optimal decisions over time as a function of the two uncertainties. The objective of this paper is to illustrate the feasibility and benefit of using such a mathematical approach for optimally timing the exploration process, and to contribute to the efficient management of mining projects by adopting such innovative decision support tools.