The Telgrafo copper - gold deposit is located in the Centinela district of the Antofagasta region in northern Chile. Telgrafo is a porphyry copper deposit of Eocene - Oligocene age which has a total mineral resource in measured, indicated and inferred categories equal to 2.6 billion tonnes with an average grade of 0.38 per cent copper.Currently the project is in the prefeasibility study phase, including an infill drilling campaign to improve the knowledge of the deposit that should result in an improvement of the mineral resource classification. In this context was decided to review the classification criteria in order to optimise the drill hole density necessary to support the project.This paper presents an application of conditional simulation to evaluate the risk related to drill hole spacing, using a geostatistical approach that mimics the process of evaluation of resources from the perspective of geological modelling and grade estimation. The first step of the approach is the generation of conditional simulations using the available samples to generate several plausible scenarios of the deposit in terms of copper grades and geological units. These scenarios are considered as the unknown reality of the deposit and sampled by synthetic drill holes in order to replicate the geological model process and copper resource estimation. In this way it is possible to establish differences between the possible scenarios and the generated resource estimation models for several simulated drill hole spacing alternatives. These differences or errors can then be quantified in terms of estimated mean, metal content and tonnage over different production volumes.The resulting errors were useful in assisting the decision making process related to the design of drill hole spacing for each category of mineral resource in the Telgrafo project, and to redistribute the budget associated to the drill campaigns for the next stage of the project._x000D_
FORMAL CITATION:Rojas, O and Cceres, A, 2011. The use of conditional simulation for drill hole spacing evaluation and decision-making in Telgrafo Project, Northern Chile, in Proceedings Eighth International Mining Geology Conference 2011, pp 443-452 (The Australasian Institute of Mining and Metallurgy: Melbourne).