Mineral exploration is at the front end of the mining industry, and the discovery of new orebodies is vital to meeting the increasing demands of a growing world population.

However, finding new orebodies, particularly ones sufficiently enriched to become working mines, is hugely challenging.

Even after a discovery has been made, “defining the size, grade, and continuity of the mineralization, and then estimating its mineral resource or reserve can be extremely costly and time-consuming,” says Justin Smith, principal consultant at SRK Consulting.

“With exploration budgets continually being squeezed, geologists need to design and execute drill programs that maximize the value of exploration and resource drilling – usually as additional profitable resources or reserves.”

Although there are various methods for ranking and prioritizing drill targets based on depth, expected grade, volume, and general continuity of a potential orebody, the quantification of the potential value of each planned drill hole “is rarely performed by companies,” he says.

For many exploration companies, he adds, testing the effect of a drill hole “is simply considered unnecessary, as the most interesting geology can be seen on a cross section and then targeted.” However, he says this assumption can often “be risky and lead to wasted drilling dollars.”

Smith, who has over a decade of experience in mine planning and engineering, says that explorers should “view mining projects as a business” and, as such, should ensure that “expenditures maximize the potential profit.”

He says that once a resource estimation is incorporated into a geological model, modern modelling software can perform pit or stope optimization runs, allowing drilling campaigns to be designed and tested “much faster today than even ten years ago.”

“The impact a drill hole is likely to have on the value of a deposit can then be tested before any investment in actual drilling is made, potentially eliminating the cost of drilling a hole that adds no value to the deposit.”

Smith says the process doesn’t require expensive software packages supported by specialized consultants, with geological modelling software, like Seequent’s Leapfrog Geo, providing a quick and relatively inexpensive solution.

“Provided a company has sufficient existing model data and reasonable geologic and grade models, a basic geological modelling package and optimization software can allow them to plan more cost-efficient and effective resource drilling campaigns.”

To illustrate a real-world application of the process, he described its implementation at the Yandera copper project in Papua New Guinea, owned by Era Resources Inc. (In 2021, the Canadian junior exploration company Freeport Resources acquired Era.)

“Yandera is a large, low-grade porphyry copper deposit located in very steep mountains in the jungles of Papa New Guinea. The corporate focus was to bring more ore tonnes into the project’s resource to increase its value,” Smith explains. 

The terrain and scattered grade distribution, he says, led to numerous possible drill targets, with each target requiring drill pads cut into the side of mountains and helicopters to haul in equipment. In addition, he adds, the monsoon season was also approaching.

“The number of drill targets, expensive drilling costs, and short drilling season, meant that a more sophisticated approach to prioritize the drill targets was required,” he says.

Using planned hole data and expected intercepts and grades provided by Yandera’s geologists, Smith modelled “virtual ore zones” and then fed these into automated resource estimation programs.

“We then re-estimated the resource model, filling the newly defined virtual ore zones with grades, and a pit shell was generated,” he explains. “Each drill hole’s expected impact on the in-pit resource was then evaluated, and the drilling program prioritized accordingly.”

He noted that the entire process, which included over 100 planned holes, took less than two days.

As the drilling program progressed, Smith assessed sampling results in near real-time and the planned holes were adjusted to reflect the real-world drilling results. The model was then re-run, and target priorities adjusted. 

“In total, four modelling iterations were run, leading to changes to the planned drill program, with the subsequent investment in drilling increasing in areas that outperformed the virtual model and abandoned in underperforming areas.”

He says the new approach yielded a 20% increase in the mineral resource by increasing the drilled metres by less than 5%.

“Quantifying the possible value of a resource drilling campaign before drilling can reduce the risk associated with exploration and help to maximize the return on that investment,” Smith says.

The preceding Joint Venture Article is PROMOTED CONTENT sponsored by SRK CONSULTING and produced in co-operation with The Northern Miner. Visit www.srk.com for more information.

Foraco International (TSX: FAR), a leading global provider of mineral and water drilling services, has been awarded a contract is for exploration and evaluation drilling services near Olympic Dam mine complex in Australia. The deposit contains significant amounts of gold, copper and uranium.

The contract is signed for a three-year period plus two optional years as an extension. It will involve a total of five rigs, most of them being remotely operated, and has a total face value of approximately $76 million (US$60 million), excluding options. If the two-year options are exercised, the face value could reach $114 million (US$90 million).”We have been working hard to market our technical expertise in deep diamond directional drilling services around the world for nearly a decade now and are very excited to start a new relationship with BHP. This is a great reward for all our employees, field crews and support teams” said Daniel Simoncini, CEO of Foraco.

“We believe long term relationships with leading global companies like BHP are an efficient way to increase our profitability resilience, while providing good quality professional life to our employees with who we can share a decent time horizon long enough to develop them, train them and make them safer and happier,” he added.

For more information about Foraco, visit www.foraco.com.

Often depicted in media by historical pictures of coal miners with a pickaxe or prospectors panning for gold, the mining industry has not modernized, thinks the average citizen. This is an unfair and inaccurate depiction of one of the most innovative industries on the planet. Today, we use complex extraction processes and machines that are created for a specific task – like sorting different sizes of ore for crushing and automated ventilation systems for underground mines.

Sometimes the sought-after mineral is so small that it’s nearly invisible to the naked eye. This means mineral processing is a huge component of the mining industry, but it isn’t always top of mind when an average person thinks about mining.

We will need more mined materials and increasingly esoteric metals as society decarbonizes. For example, compared to a conventional car, building an electric car uses approximately six times the amount of minerals.1

Trends we’re seeing and work we’re doing

Due in part to the increased demand for minerals and metals, there is also an increasing requirement for new mines and brownfield expansions. Investors and consumers are both demanding more sustainably sourced products. So, how can we be more sustainable in the mining industry? We can start by increasing efficiency and reducing waste during mining and mineral processing. When the opportunity allows, a mine site, including its processing plants, can utilize renewable energy.

1 | Increasing Efficiency

One way to operate in a more environmentally friendly way is to ensure processing systems are running with maximum efficiency. A process that’s been working well for years might be due for a checkup to see if there are ways to optimize both the energy use and material yield.

Over the last few years, we’ve seen a spike in demand for efficiency-related work – like energy audits and debottlenecking projects. If done right, sustainable designs and practices can save energy, drive costs down, and improve recovery rates. For example, a copper mine in Arizona completed a debottlenecking study and found they could save energy costs by modifying their grinding and crushing circuit. This also reduced their greenhouse gas emissions and increased their recovery.

How we handle materials before and during processing can also increase efficiency. Streamlining transportation or reconsidering what needs to be transported makes a big difference. For example, there is an underground gold mine in Turkey that has an underground crushing chamber. By beginning the minerals processing journey as close to the mined ore as possible, it maximizes materials handling efficiency.

2 | Reducing waste

We know that the natural resources on this earth are finite. The mining industry has a duty to operate within the concept of sustainable development. We must treat our resources responsibly. Resource scarcity can be lessened by reusing or recycling waste materials and tailings.

Many sites have deployed innovative ways to reuse water at mine sites. Roy Hill’s Pilbara operation in Western Australia built an aquifer recharge system. The mine site consists of a conventional open pit bulk mining operation with a 60 million tonnes per year processing plant. Managing groundwater is a consistent challenge for mine operators. Storing and recycling the water is the most sustainable option and mitigates any environmental risk to local flora and fauna. Our team managed the detailed design of a pipeline to transport dewatered saline water from the remote mine to an aquifer approximately 45 km away.

In the industry it is becoming more popular to re-process tailings or waste rock to extract other minerals (not the original sought after resource). A great example of this is a gold adsorption pilot plant, built to maximize gold recovery from tailings waste. The plant trialed back-end recovery of a new flotation tailings stream through the existing gold plant. The client wanted to know if the existing carbon-in-leach circuit, a part of the gold extraction process, had the additional capacity to accept flotation material and recover sufficient gold. The pilot plant was a success. Now the client will be able to replicate this tailings waste recovery solution, thus maximizing gold collection efficiency.

3 | Replace conventional energy sources

Energy is a key factor in processing plant operations. It is a major cost, often around a third of the total cost, and is becoming more critical as an environmental consideration. The plant can minimize energy consumption by using processes such as high-pressure grinding rolls and autogenous or semi-autogenous grinding or vertical milling.

Once a plant has reduced its energy consumption, the next step to becoming more sustainable is transitioning to a greener, cleaner energy source. Renewable energy in mining operations is becoming more common thanks to increasingly cost-effective energy storage. A great example is the rapidly maturing solar energy project from Alinta Energy. Stantec consulted on the design and construction of this solar energy project. When complete, it will provide up to 60 MW of generation capacity in the Pilbara region of Western Australia.

Where the industry is headed – new standards

It’s exciting to see how quickly the mining industry is evolving. Ten years ago, discussions around renewable energy or reusing tailings were rare. Now, we’re seeing mining companies being proactive and making these things happen every day. Even though many renewable energy projects are still in initial concept, permitting, and design stages, it’s great to see how much progress has been made in the last decade.

It’s very likely we will see greater regulation and licensing around energy efficiency, waste management, and overall, renewably energy or greenhouse gas emissions. Process plants traditionally measured by demand, schedule, grade, recovery, and yield, will likely have optimization and sustainability-related targets to hit as well (if they don’t already!) So, it’s important for mine owners and operators to act now to develop energy efficient and effective mineral processes. This will help them be more prepared for both the greater demand for minerals and metals and increased regulation in the future. 

Stephen Beamond is Stantec’s regional leader for energy and resources in Queensland, Australia and internationally.

1. https://www.iea.org/data-and-statistics/charts/minerals-used-in-electric-cars-compared-to-conventional-cars

Sandvik has signed an agreement to acquire the mining related business of Schenck Process Group (SP Mining). SP Mining offers screening, feeding and screening media solutions. The company will be reported in Stationary Crushing and Screening, a division in Sandvik Rock Processing Solutions (SRP).

“I am pleased that we continue to execute on our shift to growth strategy by expanding our core offering in a profitable niche, as well as strengthening the aftermarket share within rock processing. This validates our strategy when forming the Sandvik Rock Processing business area, and it allows us to bring value to a larger part of our mining customers’ value chain,” Stefan Widing, president and CEO of Sandvik, stated.

SP Mining is a global provider of high-capacity screening solutions, complementary to Sandvik’s offering, and with a strong aftermarket business which includes application support, screen refurbishment, product engineering design and manufacturing and digital support services. SPMining’s R&D and production sites are located in Australia, with additional production units in South Africa, Brazil and China.

The transaction is expected to close during fourth quarter of 2022 and is subject to relevant regulatory approvals.

For more information, visit www.home.sandvik/en.

ABB has won a large order for its highest payload Koepe production hoist, associated infrastructure, and safety systems from Australian mining company OZ Minerals. The contract will help to ensure efficient processing performance and a long service life as part of an ongoing US$400 million shaft expansion at the Prominent Hill gold-silver-copper mine in South Australia.

The hoist, which will be designed and supplied by ABB, has a capacity of 39,400 kilograms and the strongest drivetrain that ABB has ever installed in Australia. ABB specialists will also supervise installation and commissioning.

The Prominent Hill mine began operations in 2009 as an open pit mine, but it is now an underground mine producing 4.5 million tonnes per annum, moving to between 4.5 and 5.0 million t/y from 2022 via a trucking operation. The hoisting shaft provides access to mineral resource outside the current trucking mine plan that would have been uneconomical via a trucking operation from around 2033.

The additional hoisting capacity will increase the annual underground mining rate, extend the mine life, reduce operating costs, lower emissions intensity, and reduce overall operational risk, according to OZ Minerals.

Once operational, the installation at Prominent Hill will have ABB Ability Safety Plus for hoists, a suite of mine hoist safety products that brings the highest level of personnel and equipment safety available to the mining industry. It is the first fully SIL 3 (Safety Integrity Level) certified suite of solutions for hoists, rigorously examined and certified by an independent global functional safety certifying body, and strictly developed in accordance with the International “Safety of Machinery” standard IEC62061.

The products include Safety Plus Hoist Monitor (SPHM), Safety Plus Hoist Protector (SPHP) and Safety Plus Brake System (SPBS) including Safety Brake Hydraulics (SBH).

For more information on the company’s hoist systems, visit www.ABB.com

Miner and commodities trader Glencore (LON: GLEN) has inked a multi-year agreement with General Motors to provide the automaker with cobalt from its Murrin Murrin operation in Australia.

The U.S. car producer has committed to making all-electric vehicles by the end of the decade, setting the goal of having 30 new EVs models, equivalent to 1 million electric cars, in the market by 2025.

“Climate change is real, and we want to be part of the solution by putting everyone in an electric vehicle,” chair and chief executive officer Mary Barra says.

GM will use Glencore’s cobalt in its Ultium battery cathodes, which currently powers the Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq vehicles, the companies said. 

The deal comes as automakers scramble to secure steady supply of battery metals, including cobalt, nickel, lithium and copper, to meet rising demand for EVs.

Some manufacturers such as Tesla and Volkswagen have even announced intentions of becoming “actively involved in raw materials business”. Tesla’s Elon Musk seems particularly inclined to do so with lithium, which prices have reached what he calls “insane levels”.

The EV giant has recently secured lithium mining rights in Nevada and has off-take agreements for the battery metal with Liontown Resources and Ganfeng Lithium, China’s no.1 producer of the commodity. For cobalt, Tesla locked down supply from Glencore in 2020. 

Detroit-based rival Ford Motor said on Monday it had signed a preliminary deal to buy lithium from a Lake Resources NL facility in Argentina, marking the first time Ford has publicly announced where it will procure the battery metal.

Glencore, the world’s largest cobalt producer thanks to its mines in the DRC, noted the metal makes up only 0.001% of the earth’s crust. Its appeal to EV makers comes from the fact that it provides batteries with energy density that increases the range of their vehicles and boosts their life.

GM has several other agreements in place for lithium and rare earths and other materials.

Shareholders in Canadian miner Turquoise Hill Resources (TSX, NYSE: TRQ), the majority owner of the vast Oyu Tolgoi copper-gold mine in Mongolia, are poised to cash in on Rio Tinto’s US$2.7 billion offer to buy the remaining 49% of the company it doesn’t already own, analysts say.

While the non-binding buyout proposal is considered “generous” — a 32% premium to Friday’s closing price — it also reflects Rio’s lack of strategic wiggle room under the current capital structure.

Rio Tinto currently controls and operates the Oyu Tolgoi mine, located is 550 km (342 miles) south of Mongolia’s capital Ulaanbaatar via Turquoise Hill’s 66% stake. The government of Mongolia owns 34%.

Market observers believe Turquoise’s investors could get a sweeter deal. Analysts at Scotiabank predict that the company’s shareholders will seek a materially higher offer from Rio Tinto than the $34/share offer price, perhaps greater than $50/share.

The world’s second largest miner has the financial resources to pay a higher premium. As of December Rio had US$1.6 billion of net cash, while high iron ore prices are adding to that pile. The company’s willingness pay up is not so clear, which makes a transaction highly uncertain.

Acquiring the Vancouver-based miner would boost Rio Tinto’s copper output by 10% over the next five years, and 17% on average over 10 years, according to Macquarie.

The bank noted that Rio’s offer might be a 32% premium to Turquoise closing price on Friday but is a narrower 12% premium to the bank’s target on the stock.

Analysts at Jefferies believe that Oyu Tolgoi would become a “crown jewel” in Rio Tinto’s portfolio. They also see the acquisition as an opportunity to straightened up the project’s messy capital structure, which has been one of the reasons why the underground copper mine has suffered delays.

“This transaction would increase Rio’s attributable copper production via an asset that it has developed, currently operates, and clearly knows well,” Jefferies’ note says.

UBS experts warn that while the Mongolian mine is a high-quality deposit, it is in a challenging jurisdiction, which could make it an “overall poor investment.”

They also noted the timing could be off given Turquoise Hill’s stock has risen 254%, to $34.04 from $9.6, since January 2021, and it fears cash returns will be dented this year, with Rio Tinto having now directed about US$3.5 billion to mergers and acquisitions.

Alexander Pearce and David Gagliano of BMO Capital Markets, noted that the company’s strategy over its stake in Turquoise Hill has been subject to discussion for many years, adding that the acquisition could “make sense.”

“In the past Rio Tinto has been happy to share the risk of its assets with minority shareholders, however, given the dearth of copper opportunities elsewhere, perhaps increasing its exposure to Oyu Tolgoi now makes sense and could simplify the remaining funding hurdles for the underground project,” they wrote in a note to clients. “From a Rio Tinto perspective, with a strong balance sheet (US$1.6 billion net debt at Dec. 2021) and expectations of US$12.6 billion FCF [free cash flow] this year, US$2.7 billion is easily affordable for the company.”

Biggest new copper mine

Rio Tinto has had a rocky relationship with the Vancouver-based miner, particularly over how to fund Oyu Tolgoi’s expansion. The top miner has also drawn criticism from some of Turquoise Hill’s minority shareholders about the control it exerts over the company.

“Given the dearth of copper opportunities elsewhere, combined with its recently lowered risk profile, perhaps increasing its Oyu Tolgoi exposure now makes sense,” Pearce and Gagliano wrote.

Once completed, the underground section of Oyu Tolgoi will lift production from 125,000-150,000 tonnes in 2019 to 560,000 tonnes at peak output, which is now expected by 2025 at the earliest. This would make it the biggest new copper mine to come on stream in several years.

KoBold Metals, a start-up backed by a coalition of billionaires including Bill Gates and Jeff Bezos, has raised $192.5 million in its latest financing round, which will allow it to speed up efforts to find new deposits of critical metals needed for batteries and clean energy.

Investors in the Series B funding round for the company included Sam Altman’s Apollo Projects and Mary Meeker’s Bond Capital as well as BHP (ASX: BHP) and the Canada Pension Plan Investment Board, Canada’s largest pension fund, two people familiar with the matter told the Wall Street Journal.

Previous backers include big names such as Venture capital firm Andreessen Horowitz and Breakthrough Energy Ventures. 

The Silicon Valley-based firm, founded in November 2018, plans to use artificial intelligence to create a “Google Maps” of the Earth’s crust, with a special focus on finding cobalt deposits. It collects and analyzes multiple streams of data — from old drilling results to satellite imagery — to better understand where new deposits might be found.

Algorithms applied to the data collected determine the geological patterns that indicate a potential deposit of lithium and cobalt, which occurs naturally alongside nickel and copper.

KoBold Metals estimates the world needs to mine more than $10 trillion of these key metals to meet the expected demand for electric vehicles (EVs), adding that traditional mining companies are likely to turn to artificial intelligence (AI) tools to help them along their quest.

Not a miner  

KoBold, as its chief executive officer Kurt House has stated multiple times, does not intend to be a mine operator “ever.”  

The company’s quest for battery metals began last year in Canada, after it acquired rights to an area of about 1,000 square km (386 sq. miles) in northern Quebec, just south of Glencore’s Raglan nickel mine. 

The firm, named after the German word for a goblin that controls the earth’s minerals, has already gathered publicly available data from company disclosures and government sources, as well as historical information from companies it partners with.

These include BHP, the world’s no. 1 miner, Norway’s state-backed energy company Equinor, and Greenland-focused junior Bluejay Mining (LON: JAY). 

KoBold’s algorithms then crunch the data obtained in search of geological patterns, which guides its activities and land acquisitions.

The technology can locate resources that may have eluded more traditionally minded geologists and can help miners decide where to acquire land and drill, the company has said.

It currently owns about a dozen exploration properties in places such as Zambia, Quebec, Saskatchewan, Ontario and Western Australia. 

Vista Gold Corp. (TSX: VGZ) announced on Wednesday the results of a feasibility study (FS) for its 100% owned Mt Todd gold project located in the Northern Territory, Australia.

With economics based on Q4 2021 costs, the project is expected to deliver compelling cashflows over a 16-year mine life, the study showed, totaling $2.1 billion for the first seven years of commercial operations (at a US$1,800/oz gold price).

Using the same gold price, the FS gave the project an after-tax net present value (NPV) of US$1.5 billion and an internal rate of return (IRR) of 26.7%.

The average cash costs over life of mine is estimated at US$817/oz, including average cash costs of US$752/oz during the first seven years of commercial operations. The average all-in sustaining cost (AISC) is US$928/oz, including average AISC of US$860/oz. during the first seven years.

According to Vista, Mt Todd’s economic returns benefit from an increase in the gold reserve estimate, favorable results of the power plant trade-off study and slightly lower energy costs in the Northern Territory.

Gold reserves increased 19% to 6.98 million oz., resulting in average annual gold production of 479,000 oz. during the first seven years and 395,000 oz. over the life of mine.

Initial capital requirements for the project are US$892 million, an 8% increase, which reflects the use of a third-party owner/operator of the power plant.

“The FS affirms the strength of Mt Todd’s gold production capacity and ability to deliver solid economic results at a time when inflationary pressures are having significant impacts on operating mines and development projects alike,” Vista’s president and CEO Frederick Earnest commented.

“Completion of the FS represents another major step in de-risking Mt Todd and readying the project for development. The scale, quality of work completed and location of Mt Todd, together with the completion of the FS and the fact that all major authorizations for development have been obtained, distinguish Mt Todd as a unique development opportunity,” he added.

Shares in Vista Gold jumped 11.2% by 12:30 p.m. New York time, giving the gold developer a market value of US$91.6 million.