Question

One method for developing a mine will result in a recovery of 62% of the available ore deposit and will cost 1,150.00 per ton of material removed. A second method of development will recover 50% of the ore deposit, but it will cost only 4750.00 per ton of material removed. Subsequent processing of the removed ore recovers 300 pounds of metal from each ton of processed ore and costs P2,000 per ton of ore processed. The ore contains 300 pounds of metal per ton, which can be sold for 240.00 per pound. Which method for developing the mine should be used?

Answer 1

Total Sale price of ore 300 Pounds of metal=300*40=12000

Total Ore contain 300 pound =300*62% of recovery=186*1/3(Total pound 300-186=114 pound lossed)

Total Ore contain 300 pound =300*50% of recovery=150*1/3(Total pound 300-150=150 pound lossed)

Method-1

Total recovery pound=62*1150=71300

Method-2

Total recovery pound=50*750=37500

Method-3

Total recovery pound=100*2000=200000(300*1/3=100)

*******Note 1/3 denote 3 method each method 1:1:1

In this we can prefer 2 method only total recovery cost is low