Articles for July 2015

32. Using Sand to Build Roads

Several years ago I did some geotechnical consulting work for various bauxite mining projects along the north coast of Suriname.  The mines were located in swampy areas and overlain by very soft clays.   The picture below shows the general terrain when crossing a swamp.  Such haulroads were needed to access the small satellite bauxite pits, which were spread several kilometres apart.
Sand road across swamp

Suriname swamp road for mine

Where haulroad construction was concerned, there were no hard rock or road aggregate supplies nearby but there were significant amounts of fine sand on the large “islands” within the swamp.  Road building mainly relied on end dumping truck loads of sand, allowing it to settle and sink into the swamp, and then continue adding more sand until the settling process stopped.  This resulted in high cost roads and very slow progress in construction.  Periodic rainfalls would also cause havoc with the trafficability on the fine sands.
Where there was significant swamp vegetation (like in the photo), it would be buried and help form a mat to support the road and minimize the sand losses into the sub-grade.  However in other parts of the swamp the vegetation was minimal and therefore sand settling losses could be high.
Geotextiles were applied in some areas using a geogrid and these were successful although large amounts of sand were still required.  Once a road was built, the next issue became the vehicle trafficability on the fine sand surface, especially when rains occurred.  The sand would rut and require constant grading and repair. Final road surfacing would consist of laterite when available, which is a high iron off-grade bauxite and could be compacted to form a hard surface but would degrade and get slippery in the rain. Had coarse aggregate been available locally, road performance would have been much better but one has to work with what is there.
Recently I saw a video about a geo-cell solution for building roads with sand only.   The website is The PRS-Neoweb™ Cellular Confinement System (www.prs-med.com).  I think there are other similar geotextile solutions available but this is one that is well described on their website.   Sand is placed into the geoweb and eventually forms a stiffer layer.  I presume that one could place the sand using mobile equipment or hydraulically by pumping coarse sand as a slurry.
Geocell

Geocell geotextile for road construction

In hindsight, I would have liked the opportunity to test this geoweb system in the swamps of Suriname.  Potentially it would have been a good solution to prevent both sand losses and create a more trafficable surface using sand only.   I’m not sure if the best placement of the geoweb would have been along the base of the road to support the sand load from sinking into the swamp or near the surface of the road to help create a more trafficable surface.    Building a road over a swamp is similar to building a road out onto a tailings pond, so there could be application there too.
Geotextiles have many applications in the mining industry and may have many cost savings related to initial construction and subsequent operation.  There can be significant up-front costs to purchasing geotextiles but don’t let that scare you away.    They are definitely worth a look.
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31. Meetups and Mining Millennials

Over the last few weeks I have had several business exchanges with the Toronto tech start-up community and have noticed some similarities and differences with the junior mining industry.  The junior mining model was essentially a precursor to the tech start-up model as it relates to getting early stage funding which is then followed up with additional financing rounds.  One difference is that mining mainly used the public financing route (IPO’s) while the tech field mainly relies on private equity venture capital (VC’s).
There are a few more differences that are readily apparent to me.   In general, the tech industry is young, vibrant, tech-savvy, uses the latest in social technology to collaborate while the mining industry seems to be lagging behind on some of these aspects.  The following article will describe a few of my observations.
My initial experience with the tech industry was mainly related to the numerous after-hours meetings (called “meetups”) held from 6 to 9pm  and used for networking purposes, or to allow guest speakers to describe their experience in starting companies, or for “how-to” training with new techniques (e.g. Google Analytics, Facebook advertising, email marketing, etc.).   Attending these meetups is usually free; they are typically held at the offices of tech companies, and they often provide pizza and drinks. Networking is a primary driver for these meetings.
Scheduling of such meetings is done via the website www.meetup.com.  Meetup.com works well for distributing the meeting notice and then tracking the attendees.  Meetups are not only tech-related; they are also held for various subjects such as hiking groups, theatre groups, business marketing, and other topics of interest.  They are a good way to create a well connected community.  One thing I noticed is that here in Toronto there are no geology or mining meetups posted on the meetup website, so the mining industry may be missing out on a good way to create a close and collaborative community.
With regards to local mining meetings here in Toronto, as far as I know there are three regular mining events (PDAC is an annual event).  The CIM has a monthly luncheon with a cost of $50-$65 per lunch (not exactly tailored for the millenials).   There is a Toronto Geological Discussion Group that holds meetings intermittently and seems to consist of the 50-60 yr old geologists demographic.  The third event is Mining 4 Beer, which a small group that meets intermittently at a local bar.  These few events don’t create any real buzz for those working in the mining industry in Toronto.  There are a lot of mining companies here and a lot of mining people but not a lot of vibrancy.
Some of the tech meetups are held in local tech offices.  These offices are great; they have the open concept, pool tables, ping pong, video games, kitchen fully stocked….who wouldn’t want to work here?  The last time I was in the offices of a large engineering firm I felt like a lab rat in a cubical maze trying to find the cheese (i.e. conference room).   I’m not saying engineering offices can switch to the tech office style layout, but enjoying the office environment might help draw people to work in the mining industry.
Perhaps it’s easy to have a positive work attitude when money is being thrown at you (as is happening in the tech field) versus having to scratch and claw for funds like mining must do right now.   However I suggest if one wants more smart young people to come into the industry then one needs to think young.  This means more than just buying the latest 3D geological or mining software.  It means creating an attitudinal environment that people want to work in.    The current Integra Gold challenge (like the Goldcorp challenge from several years ago) may be type of novel thinking needed in the future.
In 1998 I was working on the Diavik Project at their engineering office in Calgary.  They provided a unique office layout whereby everyone on the owner’s team had an “office” but no front wall on the office so you couldn’t shut yourself in.  There were numerous map layout tables scattered throughout the office to purposely foster discussion amongst the geological and engineering team.  A similar type philosophy is used by Apple in their office layout design where even the kitchen placement has a purpose.   Discussion amongst your people is good; camping yourself in an office is not good.
Another interesting thing I noticed with the tech field is that when start-up tech companies are given an opportunity to tell their story, typically they only have 5 to 10 minute time limit to get their point across.  No long winded thirty page PowerPoint presentation to explain what they are doing.  The tech industry is also big on the “elevator pitch”, a one minute simple verbal summary of what they are doing.  The tech people are taught to be concise; if you can’t explain it in plain language in one minute then it’s too complicated.   Conversely in many mining investor presentations they can be highly technical and tailored towards other technical people and not the average person or average investor.   Who is the target audience for those presentations?
Even the contracting, billing, invoicing side of the tech business are interesting.   Using sites such as Freshbooks, the consulting services contract is signed electronically, invoices are sent electronically, and payment is made electronically.  It’s a very fast and efficient system.
For communication and collaboration, they use systems such as Slack.  No more of the long email threads with five people cc’d on each email, various people responding, with no one sure what is being agreed to.   Slack uses a chatting approach, similar to text messaging, which makes it easier to follow the conversation and share files.  Can older mining executives be taught to use Slack?  I don’t see a problem with that as long as one earnestly wants to learn it. It’s really not that complicated.
My bottom line is that I can see a great difference in the atmosphere and attitude in the tech field versus the mining industry.  The junior mining game has been the precursor for the tech start-up industry but has not kept up with the modernization of how people like to work.    Many older personnel are leaving the mining industry in the next few years and the loss of this mining experience is a big negative; however the fresh thinking that may follow behind could be a small positive.
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30. Mining Takeovers – Should Governments Be Heavily Involved?

I have seen some on-line discussions about whether governments should be tightly regulating corporate takeovers, some of which may be outside their borders. The fear from some groups is that mine assets may be acquired by less than desirable acquirers.  One specific example that I have seen is related to the disposition of foreign resource assets by both Barrick and Ivanhoe to Zijin, a Chinese company.  I don’t know much about Zijin other than having seen reports that Norway’s government had directed its $790 billion oil fund to sell holdings in several companies because of environmental issues and Zijin was one of these companies.  In light of the Norway decision, some groups are questioning whether Zijin should be allowed to acquire mining assets owned by Canadian or American companies.
It appears that some groups would like the government to step in and prevent an owner company from selling their mining assets to another company that may have a poor reputation or limited financial capacity. The fear is the new company would operate in a non-sustainable manner and ignore local environmental rules.   Government sanctioning gets tricky in that how do they define which companies have poor reputations.  Also how do they tell the public shareholders of the owner company, in some cases possibly nearing bankruptcy, that they cannot sell their assets to a certain interested party?   Governments have stepped in and blocked acquisitions in the past but these were mainly related to deals involving antitrust issues or companies with unique technologies of national interest.
It will be interesting to see whether the idea of governments sanctioning the acceptability of acquirers in the mining industry will gain traction.  It may be an overstep for the government in this country trying to block the acquisition of a foreign property when the current owner may not have the funds to develop the project while the acquirer does.  The foreign government may want to see their own mineral assets developed but a government in another country may be directly blocking it by blocking transfer of ownership.  The last thing we need is more country-to-country disputes. I presume the only option for each country is to revoke the mineral concessions and hand them over to someone willing to develop them.  That then creates a series of new issues related to compensation and the attractiveness of that country as a place to invest in.
In essence, does the government of one country have the veto rights to prevent development in another country?  Does the government of one country have the right to decide on the environmental standards in another country by enforcing their own standards upon them via prevention of an asset sale?  This will be an interesting issue to watch in the future.  Personally I think it will be difficult to advance further since each country wants to be masters of their own jurisdiction without being told what to do by outsiders.
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29. New Mining Software and 43-101 Legal Issues

NI 43-101 puts a fair amount of legal liability on the Qualified Person preparing a resource or reserve estimate.  The QP is to stand behind the accuracy of their work and take legal responsibility for it.
Every so often some new mining software comes along and I often wonder what are the risks in using it?  Some examples of new mining software that I have heard about but not personally used nor seen in any 43-101 studies are MiningMath SimSched, the ThreeDify’s software packages, and Bentley.
Given that I as a QP am legally responsible for my work, I am apprehensive about how one can be assured that the new software will deliver accurate results that I can rely on and thereby will accept legal liability.  The last thing I would want to do is prepare a public technical report which is subsequently found to be in error due to a software bug.   Irrespective of 43-101, if you are working at a mining operation the last thing you want to do is present management with an incorrect reserve, pit design, or production plan.  If you are a consultant, how agreeable will your client be when you tell him that his study was done using a novel software package and not one of the industry standard packages?
I recall when I was working as an employee of a major mining company that there was a reluctance to adopt any new software that was unproven and not an industry standard.  That large mining company had no issues with paying the high purchase price and annual maintenance fees for their software licenses.  However that many not be the same situation for the small junior mining company or small consultant.   The new software may be cheaper, may be great, and may be an improvement at a lower cost, but I’m not sure how one addresses the software risk.  There is no rule that says “all software output is correct simply because it comes from a computer”.
Sometimes I wonder when mines go through rigorous mine-to-mill field reconciliations on ore tonnage or head grade, the problems always seem to be either an operational issue or a geological modelling difficulty.  What about it being some type of a software bug or incorrect software toggle that the field reconciliation is trying to match to?
As a QP, I suggest the onus is on the new software developer to demonstrate that they can produce reliable and comparable results under all conditions.  They need to convince the users that their software is accurate.  Perhaps over time as new software gets wider industry adoption, we will see more public reports that use it and hence it will get more acceptance.
When developing a market for new software, it’s interesting to ask whether better long term traction will be derived from more consultant usage or more mining company usage.   Will mining companies use the software if their consultants are using it, or will consultants use it if more mining companies are using it?  It’s an interesting question that new software vendors must deal with in order to grow their market share.
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