In the modern world of consolidated mining operations, ultra-specialization, and environmental engagement, it is no surprise there is a limited amount of knowledge available in the public realm about modern mineral exploration and mining activities. Even within the various specializations of mining, there seems to be an overall lack of broad applicable knowledge and experience that holistically spans the life of a mining project from exploration through operations. Why is this broad knowledge important? We explore in this article how it can be beneficial to engage with a firm of expert mining consultants – even in the early stages of an exploration project.
Mining Consultants Leverage Experience
It would be difficult to overstate the number of considerations and potential pitfalls that face any extractive resources project. These considerations are numerous even with the most straightforward of projects, and they scale exponentially with more complex commodities – like the ones necessary to build our modern world of renewable energy and electric vehicles. A skilled group of mining consultants can leverage their experience to move a project along and enable quick and effective decision making throughout every phase of the project from greenfield to closure and reclamation. This experience carries an incredible amount of value, that can be virtually irreplaceable during sensitive and highly technical project stages.
The Phases of Exploration through Operations
There are several key project phases that take place prior to mining operations – some of these individual phases are comprised of many steps and can take several years. In the sections below, we break down some of the key segments and aspects of these phases that mining consultants typically plan, execute, and support.
Mineral prospecting is the process of identifying potential targets for future mineral exploration, and if you are lucky and skilled enough, eventually a mining project. This is generally the first step in the exploration process, although there are many exploration and mining companies that elect to purchase, option, or joint venture in projects that are already in more advanced stages of development.
GIS Analysis of Known Deposits
As the old saying goes “gold is where you find it.” The same applies for other mineral commodities as well. Knowing where these minerals have been found in the past is the best place to start searching for new deposits. Understanding mineral trends and systems along with mapping previous discoveries, prospects, and brownfield (historical) workings is one of the first steps to creating a mineral prospecting program.
Desktop research of historical reports and academic papers go hand in hand with GIS mapping and analysis for prospect target generation. There is a wealth of research and information available from the USGS, university libraries, State Geological Departments, and a myriad of other sources. Skilled mining consultants can leverage this historical research to identify areas of interest for conducting mineral exploration.
Soil and Chip Sampling
Once boots hit the ground, soil and rock chip sampling are one of the most approachable and cost-effective tools for initial prospecting and mineral exploration. Soil sampling is an excellent tool for discovering anomalies and discovering potential deposits under cover. Rock chip sampling of exposed outcrops and even historical underground workings can be a great tool for confirming potential and designing future phases of exploration – such as drilling, channel sampling, and conducting geophysical studies.
Geological Consulting Services
Even in the early stages of prospecting, understanding geological systems and trends is critical to building an exploration program, making key decisions for project spending, and allocating resources in the most effective manner to reduce risk and maximize odds of making a valuable discovery.
Once a prospect has been identified, or a decision has been made to purchase, lease, option, or joint venture in an existing exploration or mining project, the next phase is project acquisition. Like the other phases of exploration and mining, having a skilled group of mining consultants to work with is critical and offers many advantages.
Once an exploration or potential mining project has been identified, the next step is to investigate land status. This identifies the availability of acquiring mineral rights. This is a critical process. If done incorrectly, it can result in the future loss of the project and potential legal liabilities.
In the Western United States, new exploration projects are often acquired through staking mining claims on federal lands open to mineral entry. Some mines in the Western US are operated entirely on federal lands. Many others are made up of a patchwork of federal, private, and state lands.
Notices of Intent to Locate or NOITL’s are required prior to staking mining claims when the surface rights are privately owned and the underlying minerals are in the federal domain. These add yet another layer of complexity to the claim staking process.
When seeking to purchase, lease, option, or joint venture with an existing mineral exploration or mining project, due diligence is critical. Not only is it important to conduct thorough due diligence on every aspect of the project from geology through environmental impact considerations, but it is equally important to engage a mining consulting firm that has experience both in the type of project being considered, but also mining projects of all phases. These mining consultants should be able to identify potential problems, areas that require further consideration, and help to avoid common pitfalls. Not only is due diligence important for project acquisition, but also for investors that are considering backing a project or mining company.
Lease Negotiation and Review
The due diligence process leads naturally into a review of potential lease considerations and a review of the potential economics of royalty agreements and other fee arrangements. These play an important part in future project viability and attractiveness to future financial or operating partners.
Joint Venture Consulting
Along the same vein as lease negotiation and review, joint venture consulting Is an often overlooked. However, it’s a key aspect of evaluating the potential benefits, drawbacks, and other strategic consequences of joint venture arrangements. Occasionally even the largest mining companies in the world decide on large and difficult projects to share the risks, and potential rewards, by partnering on a specific mining project or even an entire region or segment of mining projects. These “mega-partnerships” undergo an intense review from many different perspectives. Some of this diligence is warranted even on small exploration projects to ensure that expectations and objectives are clear, fair, legal, and economically sound.
Exploration, or mineral exploration, is the process by which a prospect turns into a project that warrants further work – with the intention of eventually making a valid discovery.
Drilling Program Management
Drilling programs provide ground truth – one of the most important aspects of confirmation in the mineral exploration process. Skilled mining consultants have experience planning, executing, and managing drilling programs of all sizes. They know how to maximize results while overcoming common challenges. During the exploration phase, drilling programs are aimed primarily at identifying potential mineral resources.
Regulation is common throughout the mining industry. It also occurs throughout the exploration phases whenever heavy or mechanized equipment is used. Every country, state, and county has different regulations for exploration. Understanding these processes is key to getting permits approved in a timely manner.
Large Scale Sampling Programs
In addition to drilling programs, large-scale soil, trench, or other sampling programs may be required to advance a mineral exploration program forward. Mining consultants understand the sampling process and can design a program that provides answers.
As a relatively new technology to be applied to the mineral exploration industry, UAVs or drones can be a valuable tool. They can collect survey information, orthoimage, and building project models. They can also be used as a backdrop for evaluating sampling and exploration data, planning drilling programs, and monitoring pre-and-post reclamation and permitting activities.
Geologists are indispensable during any exploration program. Their knowledge of mineral deposits and exploration methods provides critical guidance during exploration phases. From the office to the field, geologists are some of the most valuable mining consultants to have on your team.
NI-43-101 and other Technical Report Writing
For a public exploration or mining company, technical report writing to the appropriate National Standards is a requirement for compliance. Even as a privately held company, following these standards is a best practice. It will smooth out potential future partnerships and development. Skilled mining consultants understand these standards and can ensure that a Qualified Person is used for each application. From JORC to NI-43-101 and the S-K 1300 – each is designed by their corresponding regulators to promote consistent, repeatable, and quality exploration and reporting work.
Discovery has been described by some as the sweet spot of the mining and exploration process. This is the phase in which enough exploration has been conducted to have made a discovery that warrants further evaluation. The discovery phase usually involves a lot of drilling, testing, and other studies.
Preliminary Economic Assessments, commonly abbreviated as PEA, are a study of the potential economics and viability of a project’s mineral resources. These are completed prior to pre-feasibility and feasibility studies. They represent an important step in ‘proving out’ and de-risking a project.
Prefeasibility or PFS studies represent the next step in determining the economic and technical feasibility of a potential mining project. These studies are multi-faceted and encompass a wide variety of practical, regulatory, pricing, and technical aspects of a mining project.
A key aspect of the discovery process is determining a mining project’s engineering. This is a large part of the PEA and PFS study phases. Along with geologists, mining engineers, are an important part of any team of mining consultants.
Drilling Program Management
In the discovery phase, drilling programs are used primarily to prove reserves, outline a mining plan, and determine project feasibility. During the discovery phase, it is not unusual to operate multiple drill rigs and collect many thousands of feet of rock core. These programs can be very complex and involve many moving parts – requiring a skilled and experienced team to manage.
UAVs can be utilized during the discovery phase of mineral exploration to provide a base layer for mine planning and permitting. They also provide a great surface model for resource modelling and drilling program management and interpretation.
The discovery phase provides an opportunity for exploration geologists to further prove their theories and exploration models. This is an important stage for them to pass on information to metallurgists and other technical experts. These experts are involved in flushing out project economics and feasibility.
Permitting (Plan of Operations – POO – Level)
Once an exploration program reaches discovery level, it is usually generating enough disturbance (greater than five acres), that it will require Plan of Operations, or POO, level permitting. Not only is a well-thought-out exploration plan needed at this point, but also a consideration for cultural, environmental, and community impact. Mining consultants who have navigated this process in the past can provide guidance to navigate this process. They can also set realistic expectations.
Feasibility and De-Risking
Feasibility and de-risking is the phase where economics has been fairly well established. The project has reached a stage at which it is seriously being considered for mining and operations. This is the phase where the pre-feasibility report is upgraded to a full feasibility report. Reserves are further proven and expanded, and permitting is well underway.
Feasibility studies represent the highest level of certainty in a mining project’s economics, technical soundness, and geological certainty. Getting a project to this stage requires a significant amount of exploration work and technical expertise. These studies provide stakeholders, financial backers, and regulators with the certainty they need to feel that a project has been de-risked to an appropriate level. This allows them to be confident in investing further capital and resources in opening the mine.
Financial modeling is a key component of feasibility studies and is used to flush out potential mining project economics. There are mining consultants who specialize in mining finance. They can leverage sophisticated models to flush out risk, model costs, and commodity pricing, and determine the net present value of a project at PEA, PFS, of feasibility levels.
Risk analysis is the process of identifying risk throughout all the various components of a mining operation. Once risks have been identified, their potential impacts can be measured, and ideally, they can be reduced. Skilled risk analysis is one of the most important functions that mining consultants can provide.
In the feasibility phases of exploration, geologists are tasked with assisting with advanced modeling, metallurgical and other testing. It assists mining engineers with mine planning, permitting, process engineering, and much more. During this phase of exploration, it is not uncommon to have an entire team of geologists assigned full-time to a project.
Resource modelling is one of the primary functions of the geologist during this phase of exploration. This process is used in mine planning. It’s used to plan further drilling and exploration, and used to determine project feasibility and economics.
Mining engineers will be tasked with mine planning all through the PEA, PFS, and feasibility study stages. With increasing knowledge and planning, the mine plan will become more complex and uncertainties will be reduced. This is an ongoing process that begins during or before PEA and will continue throughout operations and reclamation.
Aerial data collected during the exploration and discovery phases of mineral exploration can continue to be updated and refined. It finds new use in providing high-resolution surface models for accurate mining engineering. More advanced drilling programs, permitting, and resource modeling will also benefit from continuing aerial data collection.
Mining operations are underway, and the product is being produced and sold. Early mining operations are a time for testing pre-production and training. Later stage or mature operations may be due to business improvement, upgrades, and resource expansion.
Mining Consultants can provide insight into active mining operations, seeking ways to improve operations, increase profitability, reduce risk, and avoid potential problems. In addition, this improvement can take many forms, from market to metallurgical analysis and much more.
Financial modeling during mining operations goes hand in hand with operations improvement. Thorough financial analysis can uncover hidden value, unlock additional business opportunities, and identify ways to reduce costs and boost the profitability of mining operations. Along with financial modeling, ongoing risk analysis can provide insight into potential problems and prevent downtime.
Aerial data collection during mining operations can be used in many applications from safety compliance to stockpile measurements. Drone use during active mining operations has become widely adopted in the industry. It will likely find many more uses in the future.
The ability to expand the life of a mine relies on the ability of the exploration team to continue to identify, map, and model new resources. This is the process in which new reserves can be added to a mine. They are added while existing resources are mined out, processed, and sold.
Closure and Reclamation
At the end of the life of the mine, reclamation, closure, and monitoring take place to return the mine site to a natural and stable condition.
Reclamation planning, in the modern world, is conducted prior to any actual mining taking place. This is the process by which the land is returned to a natural state following mining operations. With the scale at which mining projects can operate, it is not uncommon for a mine to advance from the commencement of mining operations to the start of reclamation in five years or less.
Following reclamation, mining consultants design plans in which ongoing monitoring of reclaimed mines can be conducted. It ensures that the site remains in a natural state and does not cause any unintended environmental degradation.
Regardless of what phase of mineral exploration or mining you are in, mining consultants can deliver value to any project. This value is delivered through leveraging experience, utilizing specialized tools and models, and connecting with a network of specialists that know how to succeed in a variety of situations. Our mining consultants are here to help you. Our team has a range of expertise from land management, mining engineering, and geology to GIS development and mining economics. Contact us today for a free quote and to see how we can leverage our capabilities for your success!