Making the Most out of Downhole Geophysics. Travis Pastachak, P.Geo, PMP

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Making the Most out of Downhole Geophysics 25 06 2015 Travis Pastachak, P.Geo, PMP

Agenda 1. Who are we? 2. Who am I? 3. Introduction to Downhole Geophysical Tools 4. Primary Uses 5. Unconventional Uses 6. Controlling Risk 7. Quality Control 8. Final Remarks 2

Who are we? Listed on both London Stock Exchange New York Stock Exchange 40,000 people worldwide 150+ year history operating in over 50 countries Market Cap $6bn Principal office locations Environmental Mining & Geology Process development Project delivery Underground project delivery Material handling systems Mining and Metals 3

Who am I? Small Fish in a big pond DAVIDE_LORPESTI/ISTOCKPHOTO.COM Graduate of the University of Saskatchewan 2 years with Cameco Exploration Geologist at Grande Cache Coal 2009-2011 Exploration management Open pit and underground support Geological modelling and resource estimation Geologist at Amec Foster Wheeler (2012-present) Involvement with greenfields and brownfields coal projects throughout BC, AB, and Colombia NI 43-101 and JORC Technical Reports Advance 3D modelling, resource estimation, and exploration management Due Diligence, MRMR Audits, and Process Improvements Go Riders! 4

Introduction to Downhole Geophysical Tools 5

The Big 7 and Small 2 The Big 7 Used in grassroots and brownfield operations. Gamma Ray Resistivity Compensated Density Dipmetre Hole Deviation Caliper Neutron The Small 2 Commonly used in advanced projects Acoustic/Optical Televiewer Sonic Tool 6

The Big 7 GRDC log Dipmetre log Deviation log Density Resistivity Gamma Caliper Dip Dip Direction Correlation Coefficient Hole Azimuth Slant Angle 7

The Small 2 Acoustic Televiewer (ACT) log Sonic log Amplitude Sound wave travel time Borehole Deviation Gamma Primary and Secondary sound waves 8

Primary Uses of Geophysical Data 9

Lithology Determination GRDC log can be used for: Coal seam signatures and correlation Thickness and position downhole Lithology type Compensated density (g/cc) 2 3 Sandstone (>2.1 g/cc and <100 API) Siltstone (>2.1 g/cc and API 100-170) Shaley coal (carb shale) (1.75 2.1 g/cc and <170 API) Shale (>170 API) Automatic lithology determination 1 Coal (<1.75 g/cc and <170 API) 0 0 100 200 Gamma (API units) 300 10

Drillhole Deviation Determines borehole orientation Magnetic tools Cost effective but less accurate Open hole - magnetic declination Recommended for open-pit applications Gyro tools Costly but most accurate Thru-pipe Recommended for underground applications Grande Cache Coal LP 11

Dipmeter Provides downhole structural measurements Develop the geological model Interpreting data/tadpoles Bedding Anticline and synclinal structures Faults 12

Coal Quality Downhole geophysics and coal quality Reconcile sampled intervals and position downhole Calculate core recovery Calculate predicted ash content from regression formula to validate samples Grande Cache Coal LP 13

Coal Quality Calculating ash content using compensated density Regression formula derived from site coal quality samples Account for moisture Adversely affected by borehole caving y = 0.0001x 2 + 0.0045x + 1.3 R² = 0.89 14

Unconventional Uses of Geophysical Data 15

Unconventional Leading Edge Uses Coal Fines Case Study Increased fraction of coal delivered to the fines circuit Mining method Coal handling Coal properties Qualifying the issue Fast turnaround Use existing data Caliper measures borehole diameter, potential to use as a proxy 16

Leading Edge Uses Coal Fines Case Study Analyzed borehole over-gauge in geophysical logs Segregated data by pit Analyzed logs perpendicular and parallel to strike Limitations Core hole vs RC hole Depth and dip of coal seam Structurally controlled Faulting Flexural flow Grande Cache Coal LP 17

Leading Edge Uses Coal Fines Case Study Conclusion Could be quantified Interpolated into block model Adjust short/long term mine plan Plant upgrades to accommodate high % of coal fines Grande Cache Coal LP 18

Leading Edge Uses Geotechnical Considerations Case Study Augment geotechnical confidence in coal mine roof support design Roof bolt length and frequency Fill gaps between core samples Use downhole sonic measurements to calculate Uniaxial Compressive Strength (UCS) Sonic log is commonly used in Australia and in the Appalachian Mountains Correlation of Sonic Travel Time to the Uniaxial Compressive Strength of US Coal Measure Rocks, David Oyster et al. 19

Leading Edge Uses Geotechnical Considerations Case Study Modified regression formula using site samples Depth corrected sample intervals Primary wave from the sonic log UCS = 468,000 x e -0.053t y = 1.0318x - 185.41 R² = 0.83 20

Leading Edge Uses Geotechnical Considerations Case Study Conclusion Produced good correlation coefficient Improved confidence in roof bolt lengths (1.8 m and 2.4m) Incorporated formula within geophysical log prints Interpolated into block model Applicable for pit wall stability analysis Adversely affected by borehole caving Grande Cache Coal LP 21

Leading Edge Uses Resource Classification Assurance of existence categories are intended to reflect the level of certainty with which the quantities are known Downhole geophysical data is extensively used in reconciling sample intervals Should drillholes without geophysics be considered to have the same level of certainty? 22

Leading Edge Uses Other Uses Automatic lithology determination Blast Optimization Hydrogen Index Log Rock quality indices Density vs Sonic Coal Rank Borehole Temp Artesian zones Resistivity Static water depth Caliper Oxidation 23

Controlling Risk 24

Controlling Risk Importance of considering borehole over-gauge Recognized as reducing reliability of density readings Can we make a qualified decision? Compare calculated ash vs lab ash 25

Controlling Risk Importance of considering borehole over-gauge Could difference be Improved? 26

Controlling Risk Considerations in running downhole geophysics Proper sequencing of tools Risk and stratigraphy Special Considerations Density/Neutron thru drill rods Block bottom of drill string 27

Quality Control 28

Quality Control Dealing with large datasets Implementing appropriate drillhole database. Aligning to CIM Best Practice Guidelines Must be supported by laboratory testing Sufficient effort undertaken to ensure both the samples and the geophysical data are of high quality and free of errors Caution! 29

Quality Control Implementing strict quality control procedures Ensure proper geophysical tool calibration conducted prior to site mobilization Site calibrations for prolonged exploration programs Caution! 30

Final Remarks Downhole geophysics are an integral component in the geological model and resulting mine design Strive to obtain the highest quality of data Understanding the variables that affect the resource 31

Thank you Travis Pastachak, P.Geo, PMP 111 Dunsmuir, Suite 400 Vancouver, BC V6B 5W3 Amec Foster Wheeler T +1 (604) 664 3337 travis.pastachak@amecfw.com amecfw.com The opinions expressed in this presentation are solely those of the authors and are not the opinions of Amec Foster Wheeler. This material is intended for personal and non commercial use only. Any other use of this material requires the authors prior written consent. 32