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Net Smelter Return Models and Their Use in the Exploration, Evaluation and Exploitation of Polymetallic Deposits

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Net Smelter Return Models and Their Use in the Exploration, Evaluation and Exploitation of Polymetallic Deposits

Presented by: Dr. Raymond Goldie


Abstract (based on 1991 data)

As an aid in visualizing a mineral deposit, the three spatial dimensions are often reduced to two, by projection onto plans or sections.Similarly, the concentrations of different metals in the deposit can be represented in a single dimension through the use of a common denominator, the Net Smelter Return (NSR) per tonne. NSR is defined as the proceeds from the sale of mineral products after deducting off-site processing and distribution costs.

In sulphide deposits in which the economic metals are principally copper, nickel, molybdenum or platinum group metals, a mine's receipts (the NSR) usually correspond to about 56%-60% of the gross value of the metals contained in the ore. This figure drops to around 40% for ores with significant quantities of lead or zinc. The presence of gold or silver in the ore will generally increase these percentages.

An NSR model of a deposit is a representation which attempts to approximate the actual NSR which would be derived from exploitation of the mineralization being modelled. NSRs are calculated from estimates of grades, recoveries, concentrate treatment schedules and commodity prices.

With the advent of cheap, readily available computer processing, it is now practicable for geologists to routinely use NSR models. At the exploration stage, NSR models provide a useful basis for presentation and comparison of drill-hole assays. At the evaluation stage of a project, NSR models are helpful in the estimation of optimum grades, recoveries, and production rates. At the exploitation stage, NSR models provide a rigorous basis for grade control.

A widely used alternative to the NSR per tonne as a common denominator, the "equivalent grade" (e.g., "gold-equivalent" or "copper-equivalent"), is misleading and should be avoided.


This talk was recorded on April 19, 2017 at the University of Toronto, Earth Sciences Centre. It is part of Next Gen Geo's 1st Mineral Exploration Knowledge and Skills Seminar Series, sponsored by Bridge, PDAC, and SRK Consulting.