Articles tagged with: Mining

Games People Play

Are you a board game player?  Personally I am not.  However I understand there is a huge board game community out there. These game enthusiasts meet in small coffee shops and attend large gaming conventions. I read that 35% of Americans say they play board games several times a month. Think about how many board games you may have laying around in your own place, even if you’re not a hard core gamer.
Recently an avid board game player sent me an email asking if I was aware that there several mining related games. That was a surprise to me. Who would create a board game about mining and for what demographic market?
Curiosity took over and I had to check out the links sent to me on the Board Game Geek website. Here’s a few of the games and what they do.   Now that Germany may be moving back into coal, the first three games may come back into fashion.  The 4th game listed is a bit of a head scratcher.

A few of the mining board games

Game 1: Haspelknecht: The Story of Early Coal Mining (2015)
This game is part of a coal-mining game trilogy created by Thomas Spitzer in Germany. The players take the role of farmers with opportunities to exploit the presence of coal in the Ruhr region of Germany. During the game, players acquire knowledge about coal, extend their farms, and dig deeper in the ground to extract more coal.
Players must select the correct tasks while being mindful of quickly accumulating pit water, for it can stall efforts and prevent extraction of coal.  The game info link is here.
Game 2: The Ruhr: A Story of Coal Trade (2017)
In the second game of Spitzer’s trilogy, you are still in the Ruhr region in the 18th century, at the beginning of the industrial revolution. The Ruhr river presented a transportation route from the coal mines. However, the Ruhr was filled with obstacles and large dams, making it incredibly difficult to navigate.
The players transport and sell coal to cities and factories along the Ruhr river in the 18th and 19th centuries. In the beginning, players have access only to low value coal but can gain access to high value coal. The players also build warehouses, locks, and export coal to neighboring countries in the pursuit of the most points.
The info link is here.
Game 3: Schichtwechsel: Die Förderung liegt in deiner Hand (2021)
This game may still be in German text only. Players are the administrator of a coal mine, and experience competition while living through a piece of Ruhr Valley history.
They bring coal and overburden from underground to the surface, let the miner go through a “shift at the colliery”, produce coke, or build the typical colliery settlements.
The info link is  here.
Game 4: The Cost (2020)
This game takes on a more negative view of the mining industry. It is described as “A bold take on the economics in the brutal industry that is asbestos.” The game players assume the role of a global asbestos company.
Players make their fortune in mining, refining, and shipping. Whoever ends the game with the most money wins. The last part of the description is the gem “When players mine or refine asbestos, they must choose to either maximize profits for short-term gains or sacrifice their hard-won money to minimize deaths, thus sustaining the industry.” That’s every mining executive’s dilemma; profits or deaths.   The info link is here.
Some of these game boards look more complicated than the actual industry. To find other games you can go to the Board Game Geek website and search for different themes. Most mining games listed there are not realistic but are more about dwarves mining gems or they just have an activity called “mining”.   Here’s one called Copper Country.

Free Excel Mining Game

In 1983 my brother, at the age of 10, got his Commodore 64 computer and was eagerly learning to program in BASIC. He was always looking for ideas on what he could write programs about. I had graduated from McGill in Mining Engineering a few years earlier, so I suggested he write a simple computer game about mining as his project.
I provided him with the logic and in no time he had it written and functioning. That game is long gone, likely at the bottom of a landfill stored inside the chips of his Commodore 64. Some 40 years later, my brother is still coding as a software development manager. I guess I managed to convince him the mining industry wasn’t a career path.
Over the last few months I decided to learn VBA (Visual Basic for Applications). VBA is a programming language the works with Microsoft Office products, mainly Excel.
I always enjoyed programming. In university we wrote FORTRAN programs using stacks of punch cards to feed the machine the code. I had also learned the BASIC language, from my brother’s VIC 20 and Commodore computers.
A good way to learn something is to watch a few pf the many tutorial videos on YouTube. An even better way to learn VBA is by taking on an actual coding project from scratch. So, what worked 40 years ago, would work again. Rather than write something useful, I decided to re-write the mining game from 1983, albeit enhanced with the Excel application capability and more years of personal mining experience.
This coding process would force me to learn how to write code, figure out logic, create loops, if-then statements, and handle debugging. Already knowing Excel makes the entire process easier.  Combining Excel functionality with VBA delivers capabilities that would have been difficult to do in BASIC alone.  Note: It appears that BASIC is no longer in use, having been replaced by Python as the preferred programming language.

Download it.. if curious

If you are curious about the capability of VBA, the Excel mining game can be downloaded. A descriptive overview of the game is included in the PDF file at this link.

Junior Mining CEO game screenshot

The very simple game is called Junior Mining CEO. The object is to find gold, raise the share price, and not go bankrupt given the pitfalls that often befall the mining industry. The input parameters have a lot of optionality, although I have protected the macro code itself for this edition. You can borrow money and issue equity to fund your mining activity.
The Excel file can be downloaded at this link. The was written using Excel 365 but it may also work on older versions of Excel.
You will first need to save the game to your computer to run the macros. Since there are macros, many computers will disable such Excel files because they can contain viruses. You may need to toggle the file Properties in File Explorer to unblock the file to allow the macros to run.
Is there a junior mining corporate sponsorship opportunity here? Sure. For a small fee, I will add your company logo to the game and pre-set all the input parameters so that everyone is a big winner all the time.

Conclusion

As mentioned in a blog from a few months ago, “ A Junior EIT Mining Story” some gamification of mining may help introduce and educated people on the industry. Augmented reality (AR) and Virtual reality (VR) are both technologies that can be used to help reach out to the younger generations (I’m not talking about investor outreach).
How about a new board game that does to mining what Monopoly did to real estate investing? Look at real estate prices today, no doubt being influenced by everything we learnt playing Monopoly as kids.
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Clays and Mining – Friends or Foes?

Overburden is a generalized termed used to describe unconsolidated material encountered at a mine.  It can consist of gravels, sands, silts, and clays and combinations of each. Usually overburden is not given much focus in many mining studies. Very often, the overburden as a unit, is not adequately characterized.
This blog will explain why proper characterization can be an important issue,  particularly the clay component.
I also want to share some personal mining experiences with clays, all types of clays.  There is more to them than meets the eye; a fact often not apparent to those involved only in hard rock mining.
Clays have unique geotechnical properties that can make for challenging situations and require special consideration in project design.   Many simply view clay as a sticky cohesive material – no big deal. So let’s examine this a bit further. I tried to avoid geotechnical lingo where possible, since this blog isn’t being written for geotechnical engineers.
There are several types of clays, or clay-like materials that can be encountered in mining. Here are the ones that I have been lucky (or unlucky) enough to have dealt with over the years.
  • Normally consolidated clays
  • Over-consolidated clays
  • Sensitive (or quick) clays
  • Swelling clays
  • Saprolite clays
  • Kimberlite clays (muds)

What are the challenges?

Each of the clays listed above can be found in different locations, have unique properties, will behave differently, and can create specific mining challenges.   Clays can also cause problems in process plant circuits, but that is a subject outside my area of expertise.

Normally consolidated clays

These are the clays most people are familiar with, i.e. a sedimentary deposit of very fine particles that have settled in a calm body of water.   Normally consolidated clays are generally not a problem, other than having a high moisture content.  As such, they can be very sticky in loader buckets, truck boxes, and when feeding crushers.
When wet, they can become sloppy and difficult to handle efficiently.  They can creep and run when placed into waste dumps.  For these reasons, engineers must be aware if a large proportion of the overburden will consist of clays so they can avoid surprises.

Over-consolidated clays

These clays have undergone greater vertical compression in their history than in their current condition.  For example, perhaps they were once pre-loaded and compressed by a mile of glacial ice sheet during an ice age, which has subsequently melted.
Clays in general consist of very fine plate like particles, as shown in this sketch.   In over-consolidated clays, these particles have been flattened and tightly compressed as in the right image.   The result is that the clay may be dense, have a good cross bedding shear strength, but very low shear strength along the plates.  This characteristic is analogous to the lubricating properties of graphite, which is facilitated by sliding along graphite plates.
My experience in working with over-consolidated clays was at the Fort McMurray oil sands mining operations.  In that region the Clearwater clays formed part of the overburden sequence above the oil sands.  Stripping these clays with trucks and shovels was not exceptionally challenging.  They had low moisture content and were stiff.   The challenge really came when needing to build on top of them, for example building a waste dump or tailings dam.
The cross-bedding shear strength was good, with peak friction angles exceeding 25 degrees.  However after any creep or deformation, the peak shear strength was gone and the residual friction angle would now control stability.   The residual friction angles could drop as low as 6 degrees (very weak) and, upon surcharging the clay could maintain high internal pore pressures.   Due to these factors it was not uncommon to see tailings dams or waste dumps with 15:1 (H:V) downstream slopes.  This compares to the 3:1 slopes one may normally see at hard rock mine sites.
Building a 15:1 dam or dump is much less volume efficient than building a 3:1 embankment.  It also doesn’t take much instability to cause an embankment to creep along a foundation with only a 6-degree friction angle.  Hence the over-consolidated clays presented a unique engineering challenge when working in the oil sands.

Sensitive (quick) clays

Referring to the clay particle sketch shown above, quick clays represent a card house structure (on the left image).  These clays were often deposited in a quiet marine environment, where electrical charges prevented the clays from settling uniformly.  Instead, the clay particles tend to stack up like a house of cards.  The large void spaces are filled with water, whereby moisture contents can exceed 100% by weight.
When these clays are disturbed by vibration or movement, the house of cards structure collapses.  Combined with the excess void water, these clays will flow…. and flow a lot.   This video shows a slope failure in quick clays in Norway.  Try to stop that failure once it has initiated.
My experience with sensitive clays was at the former BHP bauxite mining operations along the northern coast of Suriname.   There were Demerara clay channels up to 20m thick over top of many of their open pits.   The bucketwheel excavators used for waste stripping would trigger the quick clay slope failures, sometimes resulting in the crawler tracks being buried and unfortunately also causing some worker fatalities.
I recall walking up towards a bucketwheel digging face as the machine quietly churned away.   About 70 metres from the machine, we would see cracks quietly opening all around us as the ground mass was starting to initiate its flow towards the machine.   Most times the bucketwheel could just sit there and dig.  Instead of the machine having to advance toward the face, the face would advance towards the machine.
To address the safety issue, eventually mine-wide grids of cone penetration tests were used to define the Demerara clay channels.  Dredges were then brought in to remove these channels before allowing the bucketwheels to strip the remaining sands and normally consolidated clays.

Swelling clays

In some locations, mines may contain swelling clays.  The issue with these clays is that they can absorb water rapidly, swell by 30%, and become extremely soft to operate on.  If they form part of the ore zone and find their way to the tailings pond, one may find they don’t want to settle out in the pond. Water clarification and clean water recycle to the plant can become an operational issue.   Mineralogy tests will indicate if one has swelling clays (smectites, montmorillonites, bentonite).  The swelling clays do have a functional use however, discussed later.

Kimberlite clays (muds)

The formation of the diamond deposits in northern Canada often involved the explosive eruption of kimberlite pipes under bodies of water. The lakebed muds and expelled kimberlite by the eruption would collapse back into the crater, resulting in a mix of mud and kimberlite (yellow zones in the image).   This muddy kimberlite could be soft, weak, and difficult to mine with underground methods.
Normally as one descends deeper into the kimberlite pipe,  the harder primary kimberlite dominates over the muddy material.   An upside is that the muddy kimberlite can be scrubbed fairly easily during processing, with the very fine clay particles being washed away.

Clays can’t be all bad?

Encountering clays at a mine site can’t be always negative?  There must be some benefits that clays can provide?   Well there are a few positive aspects.

Saprolite clays 

At many tropical mining operations (west African gold projects for example) the upper bedrock has undergone weathering, resulting in the fresh rock being decomposed into saprolite.  This clay-rich material can exceed 50 metres in thickness, can be fairly soft and diggable without blasting.   This is an obvious mining cost benefit.
As well, grinding circuits can easily deal with saprolite.  For example, if a 1000 tpd grind circuit is designed for the underlying deeper bedrock, it may be able to push through 1400 tpd of saprolite.   This would yield a 40% increase in mill throughput for little added cost.  This will boost early gold production.  However as the blend of saprolite to fresh rock declines over the years as the pit deepens, the plant throughput will decrease to the original design capacity.
One concern with saprolite sometimes is its sticky nature.   A truck load of saprolite ore dumped on a crusher grizzly may just sit there.  Possible some prodding or water flushing may be required to get it moving.  Nevertheless, this is normally an easily resolvable operating issue.

Clay core dams

One of the ways miners build water retention or tailings dams is to use mined waste rock.   The issue with this is that a dam built solely with waste rock will leak like a sieve, which can lead to piping failure.  One solution is to build an internal clay core in the center the dam to act as a seepage barrier.   Having on-site access to good quality clean clay fill is a benefit when such dams are required.   If the clay fill isn’t available at site, then more complex synthetic liners or internal seepage control measure must be instituted.
Compacted clay fill can also be used as a pond liner material for water retention ponds.
One can also purchase rolls of geosynthetic clay liners (GCL), whereby a thin layer of dried swelling clay is encapsulated between two sheets of geotextile.  Once the liner is laid out and re-hydrated with water, the clays swell and will act as an impervious liner.   The installation approach is somewhat simpler than for HDPE liners and such liners can be self-healing if punctured.  A downside is that the transport weight of these GCL liners can be significant.
See, there are some positives with having clay at site.

Conclusion

All clays are not the same.  The mining of clays can create unique challenges for mining engineers and operating personnel.   Whenever I see study happily mention that their open pit mine waste consists of “free digging overburden”, I say to myself “Be careful what you wish for”.
One must ensure that the overburden is properly characterized, even though it may be viewed as an unimportant or uninteresting material.  Determine whether it consists of gravels, sands, silts, tills, or clays, or combinations thereof.   It can make a big difference in how it is mined, disposed of, and whether it can have any secondary uses on site.  In many studies that I have reviewed, the overburden tends to be forgotten and does not get the technical respect it deserves.
Please feel free to share any thoughts on your experience in working with clays.
We had to build mine haul roads across large swamps underlain by soft clays.   One option was to use geo-textiles or swamp vegetation to assist us.  Another option was to place the sand fill hydraulically.  You can read how we did this at the following blog post “Using Pumped Sand to Build Mine Roads“.
Note: You can sign up for the KJK mailing list to get notified when new blogs are posted.   Follow me on Twitter at @KJKLtd for updates and other mining posts.
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A Junior EIT Mining Story

We know the mining industry is having trouble attracting talent in all sorts of disciplines, including operations, technical, and supervision. Industry people have no shortage of ideas (right or wrong) on how this issue can be addressed in the future. Myself…I don’t really have any good suggestions.
Not long ago I was speaking with a 2020 graduate mining engineer (EIT = Engineer in Training). During our conversation, I was curious to know what attracted him to the industry and if he had any advice on how to reach out to others in his age group. I asked if he was willing to share his thoughts on my blog site. After all, who better to hear from than a recent graduate. He said “yes”, so for your interest, here is his story and his thoughts. (I decided to leave his name out of this article although he was not insisting on anonymity.)

So here’s the story (in his words)

Mining has been a part of my life for as long as I can remember. Being born in Sudbury, many of my family members have been, or are currently involved, in mining through a variety of occupations, including my father who I idolized. However, I never knew my true interest in the industry until my 11th-grade technology class. I had a teacher who was passionate about the mining industry, and he created a project that involved developing a very basic mine design.
Once I started the project, I realized that I enjoyed the design work, as it requires problem-solving which constantly stimulates the mind. After the conclusion of this project, I started doing my own research to expand my knowledge and realized that the financial side of mining had great interest to me as well. This led me at age 16 to start investing in the mining sector, which I continue to this day.
With this developed interest, and my family’s mining history, the decision to study Mining Engineering at Laurentian University was an easy decision. It allowed me to support my hometown and will allow me, given my career ambitions, to put this small school on the international map.
Before my first year of university, I had a summer job tramming at Macassa Mine in Kirkland Lake Ontario, which has been in production since 1933. My mentality was to get the boots on the ground and get the job done, whatever it took (with proper safety precautions of course). Using rail systems, dumping ore cars manually, jackleg drilling, etc. gave me the perspective that mining was archaic, mining was rough, and mining was only about the ounces.
Therefore, when I started the Mining Engineering program at Laurentian University in 2016, I already had a (somewhat negative) preconceived notion of the mining industry, but as my short career progressed, my opinions morphed into something different, something more positive.
Now that I have graduated and been employed for a couple of years, my perspective has changed. However, I feel that the perspective of the general population has not. People within mining have a (positive) bias and realize its importance in our everyday lives. This is showcased in the famous saying “if it is not grown, it is mined” and I believe that to get the industry to progress at an even faster rate, we need to get everyone on board.
It cannot be an industry that just takes from the Earth, it needs to be seen as one that values sustainability, supplies the world with required goods, and creates jobs with high employee satisfaction. Although this has started with companies taking more of an interest in stakeholder value and employee job satisfaction, based on my limited years in the industry, there is still lots of room for growth.
To change the negative view around mining, I believe the main focal point should be electric equipment and the ability for remote operation/work. With all this newly developed technology at our fingertips, I know that future operations will be safer and more sustainable, which should be better portrayed.
The battery-electric equipment will surely increase employee satisfaction since I know firsthand that one of the worst feelings as a worker is to have a scoop operating in a heading that is already 25+ degrees. It will also create more sustainability since the industry can transition from being reliant almost solely on fossil fuels.
In addition, I believe that remote equipment operation is not being used to its full capacity or explained to the younger generation. Right now, there has been equipment running in Canada that was operated in Australia. What is stopping mines from having equipment operators all over the world in urban office spaces or out of their own homes? I believe that for a company to visit a high school, or even a trades school, to sell the idea that you can operate a massive piece of equipment from the creature comforts of home, almost like a real-life video game, would be quite compelling to this audience.
Even creating a mining simulation video game where you can run through a story of being a manager, excavator/scoop operator, truck driver, etc. would get the thought of mining brought into the coming generations at a younger age. This would increase the talent pool from the more typical operator because more and more youth are getting skilled at remote operation through video games due to their increased screen time.
Not only equipment operators, but technical staff could be made fully, or partially, remote. When I describe my job to my (non-mining) peers, many are interested since mining is a fast-paced, stimulating, and rewarding industry.
But as soon as I describe the remote nature of the work, many young professionals, or high school students, get turned away. Therefore, showing teenagers, through school presentations or workshops, that a technical career in mining can lead you down so many avenues (scheduling, ventilation design, drill & blast, etc.) would pique their interest, but I believe adding the ability to work remote, with some occasional travel, would drive the point home.
InternPeople get comfortable and people are afraid to leave home, so selling a career that allows for boundless flexibility in job tasks and constant stimulation while living wherever you desire could allow a shrinkage in the current technical gap.
Overall, the mining awareness and outreach (approach) is still old school. Getting to youth and teenagers through various media streams could be the key to getting engagement from not only the current mining towns but larger urban centres as well.
I mentioned a mining simulation video game previously, but what is stopping us there. Many of my peers, and youth younger than myself, are entering the professions of doctors, lawyers, finance, or criminal investigators.
I might be wrong, but, intriguingly, these are industries are the base professions glorified on TV. Why not develop more TV shows based on mining? I know that there would be some population interest considering many people ask me if the gold we mine underground looks like what comes out of the pans in Yukon Gold Rush.
So do I think the mining industry is archaic…. not anymore.
Do I think the mining industry is rough… somewhat.
Do I think it is only about the ounces…., yes, since a mine will not run any other way.
However, I believe that there has been more importance placed on employee and stakeholder satisfaction. So, with more time, and more engagement from the public of all ages, I think this industry can have a bright future ahead.
END

Conclusion

Firstly, I would like to thank this engineer for taking time to write out his well formed thoughts, and for allowing me to share them.
Many of the mining people I meet are following along in family footsteps. No surprise there. However, the industry cannot rely on that farm system alone. It should be reaching out to broader society, although that may require some out-of-the-box thinking. People’s attitudes and personalities are different today than they were 20 years ago.  Many different doors are being held open as career options.
The discussion above has some interesting ideas from a person who would be the target of outreach efforts. It likely will take more effort than simply telling people “Hey, your iPhone uses metal, therefore mining is good, and you should work in mining”.
This guest blog post is an industry perspective from the view of a young engineer.  If you interested in the perspective from a seasoned engineer who has worked around the globe, check out the book that is described in this blog post “Life as an Engineer – Read All About It“.
Note: You can sign up for the KJK mailing list to get notified when new blogs are posted. Follow me on Twitter at @KJKLtd for updates and other mining posts.
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Resources, Resources, and Mineral Reserves

Every so often I like to comment on issues related to the way the mining industry does things. This is one of those posts.
Currently the mining industry reports their exploration results as either Mineral Resources or Mineral Reserves. In my opinion, these two categories do not adequately reflect the reality of the current mining environment. I would suggest using a three category approach, as will be described below.
The implementation of this approach would not result in any more technical effort. However, it would provide clarity for stakeholders and investors and compare companies on a more equitable basis.

The issue

In today’s world, it is an onerous task to permit, finance, build, and operate a new mine. This is a significant achievement.
An operating company will be generating revenue and should be recognized for that big step. Hence does it make sense for an operating company to report Mineral Reserves while a junior company that has simply completed a pre-feasibility study to also report Mineral Reserves?
Both companies could report identical Reserves, but those reserves would not be the same thing. One company has built a mine while the other may have spent a few months doing a paper study. One company’s reserves will actually be mined in the foreseeable future while the other company’s project may never see the light of day. Yet both companies are allowed to present the same Mineral Reserves.
As a mine operates, the remaining ore reserves will deplete over time. However, a company can add to their reserves by finding satellite ore bodies or converting inferred material into a higher classification. The net of these adjustments will be reflected in the corporate Mineral Reserve Statement for all their operations.
A company can also increase the corporate Mineral Reserves simply by completing a pre-feasibility or feasibility study on a new project. However, is this a true reflection of the Reserves upon which the company should be evaluated?

Suggestion

I would suggest that the three reporting categories be used instead of two, described as follows:
1 – Mineral Resources (insitu): This category is the same as the current Mineral Resources being reported according to NI43-101. It is based on reasonable prospects for economic extraction. Hence open pit resources would be reported within an optimized shell and underground reserves within approximate stope shapes. No external dilution or mining criteria would be applied, as is the current approach.
2 – Economic Resources: This would be a new category that would simply be the outcome from a pre-feasibility or feasibility study, which is currently being labelled a “Mineral Reserve”. This Economic Resource would incorporate mining criteria, Measured & Indicated classes only, a mine plan, and an economic analysis. The differentiation from Reserves is because the mine is not built yet.
3 – Mineral Reserves: This highest-level category could be reported only once a mine has reached commercial production. The Economic Resources would automatically convert to Mineral Reserves once production is achieved. As the mine continues to operate, and as new ore sources are identified, the Mineral Reserves would increase / decrease. The Mineral Reserves would represent the remaining ore tonnage at operating mines and only that.
This three-category approach would help separate mine operators from junior development companies. The industry should recognize the difference between companies and projects at different life-cycle stages and that they are not all directly comparable. A junior explorer could be reporting huge reserves, but without a mine being there, should that company be compared to a mine operator that has similar reserves?
This approach would identify situations whereby a company suddenly reports a sizeable increase in Reserves. Is it because they found more ore at an existing operation (a great event) or because they did a paper study on a new project?
As a clarification, if a mine gets placed onto care & maintenance, likely due to poor economics, then the remaining tonnes at the mine would no longer be considered Mineral Reserves and may have to revert to Economic Resources, although even that would be questionable.

Examples

Out of curiosity I randomly selected three companies (Yamana Gold, Eldorado Gold, Alamos Gold) to compare their total Mineral Reserve tonnages based on their operations versus study stage development projects. The results are show in the images below. The percentage of Reserves provided by their producing (P) mines varied and ranged from 14% to 51%. A significant proportion of their Reserves (49% to 86%) are still at the development (D) stage. One or two large study-stage projects can boost the corporate reserves significantly. This is not immediately evident when looking at the total Mineral Reserves being reported.
For most junior miners 100% of their Reserves are still at the study-stage. They should not be able to declare Mineral Reserves and appear on an equal footing with mine operators. Their company should only be comparable to other companies with advanced study-stage projects.

Conclusion

The foregoing discussion is a suggestion as to how the mining industry can recognize the achievement and economic reality of building a mine, i.e. by being allowed to report Mineral Reserves. All others only get to report Resources. This would help clarify what long term tonnages are actually being mined versus simply being studied on paper.
The suggested approach does not create additional work for the mining companies. However, it provides a much fairer and transparent comparison between companies.
Interestingly, NI43-101 specifies that one cannot mathematically add together Indicated and Inferred resources because they are view as materially different. However, in a corporate Mineral Reserve Statement one is allowed to combine Reserves at an operating mine with Reserves from a study.  These two reserves, in my view, are even more materially different than Indicated and Inferred resources are.
Its great for a company to report Mineral Reserves from a pre-feasibility study.  However if for some reason that mine never gets built, then those Reserves are valueless. Maybe years ago it was foregone conclusion that a positive feasibility study would result in the construction of a mine, so the risk was less. That is no longer the case and this fact should be recognized when defining and reporting Mineral Reserves.
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Hard Rock Continuous Cutting – Reducing Drill & Blast

Several years ago I worked in the Saskatchewan potash industry where I grew my appreciation for continuous mining systems. Some of the key benefits were the high productivity per man-hour and the safe operating conditions.  On a 12 hour nightshift, with a crew of 16 people we could mine over 9,000 tonnes of ore.  Productivity is  likely even higher now with the larger machines.   Therefore, since that time, I have always kept an eye out for when similar technology can be applied in hard rock mining.
One of the research areas we are seeing these days is the development of continuous cutting technology for hard rock mine development.  The idea is to replace the conventional drill & blast approach with something more efficient and safer.  No need to deal with explosives, noxious gases, shatter the wall rock, or have personnel scale their way under loose conditions.
Recently I was contacted by someone associated with Robbins asking if I was aware of their MDM5000 mine development technology.  I wasn’t aware of it, but I wondered if there finally is a light at the end of the tunnel.

4-rotor miner

In Saskatchewan potash the entire mining operation relies on track-mounted continuous miner technology.   The miners are connected directly to the shaft area using a network of conveyors, up to 10 km worth of conveyor.
The potash miners are able to undertake both development work and production mining whilst connected to conveyor.
From time to time they will rely on shuttle cars, scooptrams, or grasshopper conveyors for small development tasks. A roadheader may also be available for localized ground stabilization.
All of this mechanical cutting is done in potash (sylvinite rock), considered a soft rock with a compressive strength of 20-40 MPa. For comparison, hard rock can have compressive strengths exceeding 250 MPa.

Two approaches in hard rock

Hard rock piloting trials are underway at a few operations, using different vendors with different equipment.  These trials include companies like Komatsu, Robbins, Sandvik, and Epiroc.  Each are testing their own equipment and cutting technologies.
The hard rock cutting approaches generally fall into two camps.

Roadheader style

There are the track mounted roadheader style cutters, typically with a movable arm used to shape the excavation.  Any excavation shape is possible.

Tunnel Borer Style

Then there are the tunnel borer styles, where the machine propels itself with hydraulic shoes and the opening shape is based on the machine configuration. Normally a circular shaped opening is the result.
The roadheader style cutter is normally restricted to softer rock (< 50 MPa) while the tunnel borer is capable of much harder rock (200-250 MPa).

Robbins MDM5000

One system that peaked my interest is the Robbins MDM5000 because it can both cut hard rock and create a rectangular opening. Speaking with the vendor, this unit uses shoes to propel itself while cutting a rectangular shaped opening about 5m x 4.5m in size (see image).  A rectangular shape is preferred to the circular opening whereby the floor invert must be backfilled to provide a level operating surface.

MDM5000 opening shape

The MDM5000 configuration and advance rate allows the installation of ground support and utilities behind the advancing face.   Water sprays and dust collectors help to maintain visibility and air quality at the working face.
The Robbins unit is best suited for long straight drives although reportedly it can turn curves with 450-m radius.  Tighter turns may be feasibility in the future by tweaking the machine design.   Interestingly driving a drift uphill is easier than driving downhill due to the more efficient cuttings removal capability.
The MDM5000 unit can be linked to a Robbins conveyor system, which includes a head drive and an extensible belt storage unit that can feed out the conveyor belt as the machine advances forward.  This operation is similar to that used in the Saskatchewan potash industry.

Robbins MDM5000

A Robbins machine has been in operation at the Fresnillo mine for several years with favorable results (check out the link here).
One nice thing about disc cutters is that they can accommodate variable rock types (softer and harder) while road headers can be hindered by hard rock zones.  Roadheaders require a bit more consistency in rock quality.
Continuous cutting systems, such as the MDM5000, can be combined with vertical conveying technology, leading to safe and rapid development (>200m per month) in the right situation.

Conclusion

No doubt that we will eventually see more application of hard rock continuous cutting technology in the right situations.  The Stillwater Mine in Montana has been using a Robbins tunnel borer for years for development tasks.
No matter how well these new systems perform, there will still be some limitations.  This means the conventional drill and blast development will always be around.  However, keep your eyes on this mining technology sector as improvements in cutter head design and equipment mobility continue to evolve.
Coincidentally International Mining (Nov-Dec 2021) recently published an in-depth article on the various systems being looked at.  The link is here.

 

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Mining Financial Modeling – Make it Better!

In my view one thing lacking in the mining industry today is a consistent approach to quantifying and presenting the risks associated with mining projects. In a blog written in 2015 titled “Mining Cashflow Sensitivity Analyses – Be Careful” I discussed the limitations of the standard “spider graph” sensitivity analysis  often seen in Section 22 of 43-101 reports.
This blog post expands on that discussion by describing a better approach. A six-year time gap between the two articles – no need to rush I guess.
This blog summarizes excerpts from an article written by a colleague that specializes in probabilistic financial analysis. That article is a result of conversations we had about the current methods of addressing risk in mining. The full article can be found at this link, however selected excerpts and graphs have been reprinted here with permission from the author.
The author is Lachlan Hughson, the Founder of 4-D Resources Advisory LLC. He has a 30-year career in the mining/metals and oil gas industry as an investment banker and a corporate executive. His website is here 4-D Resources Advisory LLC.

Excerpts from the article

Mining can be risky

“The natural resources industry, especially the finance function, tends to use a static, or single data estimate, approach to its planning, valuation and M&A models. This often fails to capture the dynamic interrelationships between the strategic, operational and financial variables of the business, especially commodity price volatility, over time.”
“A comprehensive financial model should correctly reflect the dynamic interplay of these fundamental variables over the company life and commodity price cycles. This requires enhancing the quality of key input variables and quantitatively defining how they interrelate and change depending on the strategy, operational focus and capital structure utilized by the company.”
“Given these critical limitations, a static modeling approach fundamentally reduces the decision making power of the results generated leading to unbalanced views as to the actual probabilities associated with expected outcomes. Equally, it creates an over-confident belief as to outcomes and eliminates the potential optionality of different courses of action as real options cannot be fully evaluated.”

Monte Carlo can be risky

“Fortunately, there is another financial modeling method – using Monte Carlo simulation – which generates more meaningful output data to enhance the company’s decision making process.”
Monte Carlo simulation is not new.  For example  @RISK has been available as an easy to use Excel add-in for decades. Crystal Ball does much the same thing.
“Dynamic, or probabilistic, modeling allows for far greater flexibility of input variables and their correlation, so they better reflect the operating reality, while generating an output which provides more insight than single data estimates of the output variable.”
“The dynamic approach gives the user an understanding of the likely output range (presented as a normal distribution here) and the probabilities associated with a particular output value. The static approach is relatively “random” as it is based on input assumptions that are often subject to biases and a poor understanding of their potential range vs. reality (i.e. +/- 10%, 20% vs. historical or projected data range).”
“In the case of a dynamic model, there is less scope for the biases (compensation, optionality, historic perspective, desire for optimal transaction outcome) that often impact the static, single data estimates modeling process. Additionally, it imposes a fiscal discipline on management as there is less scope to manipulate input data for desired outcomes (i.e. strategic misrepresentation), especially where strong correlations to historical data exist.”
“It encourages management to consider the likely range of outcomes, and probabilities and options, rather than being bound to/driven by achieving a specific outcome with no known probability. Equally, it introduces an “option” mindset to recognize and value real options as a key way to maintain/enhance company momentum over time.”

Image from the 4-D Resources article

“In the simple example (to the right), the financial model was more real-world through using input variables and correlation assumptions that reflect historical and projected reality rather than single data estimates that tend towards the most expected value.”
“Additionally, the output data provide greater insight into the variability of outcomes than the static model Downside, Base and Upside cases’ single data estimates did.”
The tornado diagram, shown below the histogram, essentially is another representation of the spider diagram information. ie.e which factors have the biggest impact.
“The dynamic data also facilitated the real option value of the asset in a manner a static model cannot. And the model took less time to build, with less internal relationships to create to make the output trustworthy, given input variables and correlation were set using the @RISK software options. This dynamic modeling approach can be used for all types of financial models.”
To read the full article, follow this link.

Conclusion

image from 4-D Resources article

Improvements are needed in the way risks are evaluated and explained to mining stakeholders. Improvements are required given increasing complexity in the risks impacting on decision making.
The probabilistic risk evaluation approach described above isn’t new and isn’t that complicated. In fact, it can be very intuitive when undertaken properly.
Probabilistic risk analysis isn’t something that should only be done within the inner sanctums of large mining companies. The approach should filter down to all mining studies and 43-101 reports.
It should ultimately become a best practice or standard part of all mining project economic analyses. The more often the approach is applied, the sooner people will become familiar (and comfortable) with it.
Mining projects can be risky, as demonstrated by the numerous ventures that have derailed. Yet recognition of this risk never seems to be brought to light beforehand.
Essentially all mining projects look the same to outsiders from a risk perspective, when in reality they are not. The mining industry should try to get better in explaining this.
Management understandably have a difficult task in making go/no-go decisions. Financial institutions have similar dilemmas when deciding on whether or not to finance a project.   You can read that blog post at this link “Flawed Mining Projects – No Such Thing as Perfection
UPDATE:  For those interesting in this subject, there is a follow up article by the same author published in January 2022 titled “Using Dynamic Financial Modeling to Enhance Insights from Financial Reports!“.
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Gold Exploration Intercepts – Interesting or Not?

As a mining engineer, I am not usually called in to review a project that is still at the exploration stage. This is normally the domain of the geologist. However from time to time I have an interest in better understanding the potential of an early stage mining project. This could be on behalf of a client, for investing purposes, or just for personal curiosity.
At the exploration stage one only has drill interval data from news releases to examine. A resource estimate may still be unavailable.
The drill data can consist of long intervals of low grade or short intervals of high grade and everything in between. What does it all mean and what can it tell you?
The following describes an approach I use for examining early stage gold deposits. The logic can be expanded to other metals but would take more effort.
My focus is on gold because it has been the predominant deposit of interest over the last few years, and it is simpler to analyze quickly.

We All Like Scatter Plots

My approach relies on a scatter plot to visual examine the distribution of interval thicknesses and gold grades. Where these data points cluster or how they are distributed can provide some prediction on the overall economic potential of a project. Its not a guarantee, but only an indicator.
I try to group the analysis into potential open pit intervals (0 to 200 metres from surface) and potential underground (deeper than 200m) intervals. This is because a 20m wide interval grading 2.0 g/t is of economic interest when near surface, however of less interest if occurring at a 300m depth.
Using information from a news release, I create a two column Excel table of highlighted intervals and assay grades. The nice thing about using intervals is that the company has provided their view of the mineable widths.
If one is provided with raw 1-metre assay data you would have to make that decision, which can be a significant task. The company has already helped make those decisions.
Normally I tend to use the highlighted sub-intervals and not the main intervals since issues with grade smoothing can occur.
A large interval containing multiple high grade sub-intervals may see some grade smoothing.This happens if the grade between sub-intervals is very low grade or even waste. It takes a fair bit of effort to assess this for each drill hole, hence it is easier to work with the sub-intervals.
I have an online calculator (Drill Intercept Calculator) that lets you assess if grade smoothing is occurring.
When inputting the interval thickness, I prefer to use the true thickness and not the interval length. If the assay information does not specify true thicknesses, then I simply multiple the interval length by 0.70 to try to accommodate some possible difference in width. Its all subjective.
The assays can consist of Au (g/t) or AuEq (g/t) if more metals are present. If very high grades are encountered (greater than 10 g/t) I simply input 9.9 g/t into the Excel table so they fit onto my scatter plot. Extremely high grades can be sporadic and localized anyhow.
Finally I need to decide whether the project is located in a region of high operating cost, low cost or about average costs. High costs could be with a fly in/ fly out, camp operation, with diesel power, and seasonal access.
A low cost operation could be in temperate climate, with good access to local infrastructure, water, labour, and grid power. An average operation would be somewhere in between the two. Its just a gut feel.

Results

The following charts describe how it works, using randomly generated dummy assay data in this example.
In the Average cost scenario (left chart) the points are equally scattered both above and below the Likely Economic line. As one moves to a high-cost situation (middle chart) the curve moves upwards and more drill intervals now fall below the economic line.
This would give me an unfavorable impression of the project. The third graph is the Low-Cost scenario and one can see that more assays are now above the line. Hence the same project located in a different region would yield a different economic impression.
The economic boundaries (dashed lines) presented in the plots are based on my personal experience and biases. Other people may have different criteria to define what they would view as economic and uneconomic intervals.

Conclusion

There is not much that a layperson person can do with the multitude of exploration data provided in corporate news releases. However, by aggregating the data one can get a sense of where a gold project positions itself economically. The more data points available, the more that one can gather from the plot.
One should prepare separate plots for shallow and deep mineralization or for different zones and deposits on a property rather than aggregate everything together.
It may be possible to undertake a similar analysis with different commodities if one can summarize the assays into a single equivalent value or NSR dollar value. Unfortunately, exploration news releases don’t often include the poly-metallic interval equivalent grade or NSR value. Calculating these manually would add an extra step in the process, however it can be done.
If you want to try out the concept, I have posted the online spreadsheet to my website at the link Drill Intercept Potential where you can input Au exploration data of interest. Unfortunately, you cannot save your input data so it’s a one time event.   Anyone can do this – its not rocket science.
Let me know your thoughts, suggestions, or other ways to play with news release data.
If your project contains metals other than gold, then the rock (or ore) value will be based on the revenue from a combination of metals.   How to approach this in discussed in another blog post titled Ore Value Calculator – What’s My Ore Worth?

Great Bear Resources Example

Interesting the Great Bear Resources website allows one to download a data file with all their exploration intervals.  I have not seen another company provide this level of transparency.   I download their data file of over 1300 intervals and sub-divided them into major intervals and sub-intervals (more ore less).   The two plots below show the outcome.
The graph on the left is the sub-intervals showing that many points are above the “economic” line.  There are numerous data points along the top axis, indicating many sub-intervals at >10 g/t at widths ranging from 1 to 15 metres.  The graph on the right shows the major intervals.  While there are still many along the top axis, there are now more along the 40m width but at grades ranging from 1 g.t to 6 g/t.
One would surmise from these plots that overall there are many intervals above the line in the economic zone, showing the potential of the project.  It also shows that GBR have encountered many intervals likely sub-economic, but that’s the exploration game.

Great Bear Resources data

Examining polymetallic drill results in a similar manner isn’t as simple as this.   The mutiple metals of interest make the calaculations a bit more complex.   Another blog post discusses the approach I use for polymetallic, at this this link Polymetallic Drill Results – Interesting or Not?
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Potash Stories from 3000 Feet Down – Part 2

This is Part 2 of my story about working at a potash mine in Saskatchewan. If you haven’t read Part 1, here is the link to it “Potash Stories from 3000 Feet Down – Part 1“.  It’s best to read it first.

Flooded Russian Potash Mine

As mentioned in Part 1, water seepage and potential leaks were always an operational concern. There were essentially two main fears; (i) that a borer would tunnel into an unforeseen collapse zone (i.e. an ancient sink hole) or (ii) that long term deformations in the mine would result in cracking of the overlying protective salt layer resulting in water inflow.
Any time wet spots were seen on the roof, the mining engineers or geologists were called out to take a look.
Sometimes the wet area was due to pockets of interstitial moisture. Other times it might have just been oil from a blown hydraulic hose on the borer. Wet spots all look the same when covered in dust.
Water ingress was such a concern in that an unmined pillar of 100 ft. would be left around all exploration core holes. These 3,000 ft. holes were supposedly plugged after drilling but you could never be certain of that. Furthermore, you couldn’t be certain of their location at potash depth. Hence, we didn’t want to mine anywhere close to them.
The process plant also had several water injection wells whereby excess water was injected into geological formations deep below the potash level. We left a 700 ft. pillar around these injection wells.
Carnallite is a magnesium salt that we encountered in some areas of the mine. It was weaker than the halite, resulting in more rapid room closure and deteriorating ground conditions. It was also hydroscopic and could absorb moisture out of the air. Sometimes we would water the underground travel ways to mitigate dust issues. With the resulting high humidity sometimes the carnallite areas might start to drip water. This resulted in another call to the engineers to come out and investigate.

Working on a production crew brings new learnings.

My period as a production foreman was great. When first assigned to this role, I was less than enthusiastic but when it was over 6 months later, I appreciated the opportunity. As a production foreman, we had a crew of 15 to 20 people responsible for mining 9,500 tons over a 12 hour shift. There was one foreman in the underground dispatch room and one face foreman travelling around supervising the borers and inspecting conveyors.
Ore grade control was a key responsibility of both the borer operator and mine foreman. The goal for the borer operator was to cut the roof even with the top of the high grade potash bed. The goal for the foreman was to ensure the operator was maintaining his goal. However, when looking at the potash face all the beds generally looked the same, especially when they are dusty.

Feel the glow

One key distinction was that the middle low grade bed had a higher percentage of insol clays. It was used as a marker bed. You would take your hardhat lamp and run it down against the wall. In the upper high grade potash bed, the cap lamp would have a halo, not unlike like the glowing salt rock lamps you see in stores. In the marker bed the halo would disappear, like putting a lamp against a rock wall.
Thus using the lamp you could identify the top of the marker bed, which was supposed to be kept 3.5 to 4 ft. off the floor. If borer operators were consistently more than 12 “ inches off optimal level, they could be written up (i.e. reprimanded). This was one of my tasks as foreman and I always hated doing it.
Lasers were used to guide the borer in a straight line but the marker bed was used for vertical control. Nowadays the use of machine mounted ore grade monitors is an option. By the way, if you’re looking at a potash project, be aware of the grade units being reported. A previous blog discusses this “Potash Ore Grades – Check the Units”.
The underground conveyor network consisted of 32” conveyors, feeding onto 42” conveyors, feeding on to 48”or 54” conveyors. Typically the length of the larger conveyors was in the range of a mile (5,000-6,000 ft.). The conveyors were all roof mounted, allowing for easy clean up underneath. Roof mounting was critical. Even some of the 600 hp conveyor drive stations were roof mounted, structure and all.

Conveyors were the reason for my one and only safety incident.

4-rotor side pass

4-rotor borer side pass

First a little background. The underground ore storage capacity at K1 was about 3,000 tons. If the underground bins were filled anytime during a shift, the entire conveyor system would automatically trip off; all 10 miles of it. If you happened to have a mile long conveyor shut off while it was loaded to the brim with ore, good luck starting it up again.
If this happened, there were two choices. You could bring in the operators from the borers to start shovelling off the conveyor until it was unloaded enough to re-start. This option went over like a lead balloon with the crew.
The other not so great option was to use a scooptram to lift the belt counterweight up to reduce the belt tension. This allows the drive pulleys to start spinning. Then by lowering the counterweight back down perhaps the drives can inch the belt along. The idea being that possibly the momentum of the moving mass of potash would keep it moving. The downside is that you could break the belt. There was nothing worse than having to tell the cross shift they have both a stalled conveyor and a broken belt. Have a good shift people.
At 4 a.m. working as night shift face foreman, I knew the underground bins were nearing full. Driving along I saw that the mainline conveyor was full and spilling over the sides. A worst case conveyor shutdown was imminent. I called the dispatch office to ask why he hasn’t been shutting down borers and conveyors but there was no answer.
After several unanswered calls I started to hustle back to dispatch. I remember driving alongside the conveyor thinking “don’t shut off, don’t shut off”. Just then a heavy duty service vehicle pulled out of a cross-cut and I plowed right into it. I wasn’t going very fast (~20 km), but when a Toyota Land Cruiser hits a steel plate truck, the Toyota is the loser. The front end crumpled, and I later was told that there was major frame damage.
I’m not sure why the other driver didn’t see my lights. I’m also certain his lights were not on. Nevertheless, I did get written up for this incident with a reprimand for my personnel file. The reprimander had become the reprimandee. I still insist that the incident wasn’t my fault.
The Land Cruiser laid around the shaft for a few days until it could be hoisted up to surface. Everyone coming on shift got to see it . Once it was hoisted up, it laid outside the headframe for a few more days for all the surface workers to see. Ultimately, this incident resulted in the underground miners giving me the nickname “Crash”.
This is where I’ll end the potash story.

Conclusion

Saskatchewan potash is a unique mining situation. It has its own history and mining method. The people are great and it’s a great place to learn the difference between engineering school and real life.

Mine Engineering Dream Team

By the way, I also learned that small town Saskatchewan loves their senior hockey league (20-30 year age range). The local towns compete all winter; sometimes combatively. It was Esterhazy vs. Langenburg vs. Whitewood vs. Rocanville vs. Stockholm vs. Moosomin.
One of the first questions asked in my job interview at Mosaic was if I played hockey. You see, the ideal candidate for the job would have been an ex-NHL player, preferably an enforcer, who is also a mining engineer. Gotta stack the local team.
If you enjoy reading these types of stories about working as an engineer, there is an entire book on the subject, written by a former colleague of mine.  You can learn a bit more about this civil engineer’s experiences working around the global at this link “Life as an Engineer – Read All About It”

 

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Two Mining Innovations – Load Scanning & Vehicle Tracking

The mining industry is always on the lookout for new innovations as it strives to keep up with other industries.  In that light, periodically I like to highlight new technologies that I become aware of.   I’m trying to help spread the word  about them, which in turn may assist them in their on-going growth and development.
In this article I want to briefly describe two hardware / software companies that are working on technologies related to mine equipment productivity.    In no particular order, the two companies are Loadscan and SedimentIQ.  SedimentIQ is more of a startup than Loadscan which has a longer operating track record.
These technology companies are both targeting the open pit and underground markets, looking to provide simpler and less costly productivity solutions. Their technologies may be well suited for small to mid tier mines that cannot afford or don’t require the comprehensive Minestar type fleet management systems.
For the record, I get no fee or commission for promoting these companies; I just like what they are doing.

Loadscan

Loadscan has been around for a few years, but I only became aware of it recently.  It is a technology that allows the rapid assessment of the load being carried in truck.  It does not rely on the use of load cells or weigh scales to measure the payload.
Instead Loadscan uses a laser scanner and proprietary software to three dimensionally map the surface of the truck payload and then calculate its volume.  The results will indicate how consistent and optimal truck loading is volumetrically.   One can then calculate the payload tonnage by applying a bulk density.
The Loadscan technology will assess whether trucks are being over or under loaded, whether the loads are off-centre, or whether there is excess carryback on the return trip.
Successive truck payloads can be tracked manually or with RFID tags.   A cloud based database and web based dashboard are used to store the data and summarize it. The output can include an image of each individual load.
What is interesting about this technology is that it is simple to install in an operation.  It does not require retrofitting of a truck.
Results are immediate.  Loadscan provided an example where a message readout board can let the shovel operator immediately know how well each truck was loaded, resulting in improved education and better performance efficiency.
One can also assess how much better shovel bucket factors are in well blasted rock versus in blocky rock.
The Loadscan system is already in use in several mines globally.  The vendors can provide more technical  data if you need it.
Their website is https://www.loadscan.com/

SedimentIQ

SedimentIQ is a new smartphone vehicle tracking platform that is trying to establish itself.  Their proposed technology makes use of a phone’s built-in GPS, Bluetooth, and accelerometer to track vehicle operation.  The phone’s sensor can measure vibrations produced by an operating truck or loader.
Vibration is a fingerprint of a vehicle’s activity.  Therefore using machine learning, the SedimentIQ app can produce an “activity score” that decides whether a machine is parked, idling, or performing productive work.  The phone is not connected to the machine diagnostics system, so its very easy to install, only needing a power source.
The system will be able to be used on any vehicle, including trucks, drills, loaders, graders, dozers, etc. The system has the capability to monitor equipment location and speed.
In an open pit environment it uses the phone’s GPS to monitor vehicle location. In an underground setting the phone reads inexpensive Bluetooth beacons mounted along the side walls to track location.
The app will identify delay and downtime based on equipment vibration levels.  The system currently requires no interaction with the operator, working in the background.  Hence it will not identify the cause of delay (i.e. blasting delay, breakdown, inter-equipment delay, etc).  I would expect that in the future they could add a feature for the operator to tag delay types on the touch screen.
The SedimentIQ software will aggregate the cycle time and delay information and upload it in real time to a cloud based database.  A web-based dashboard allows anyone with access to view the real time production data graphically or export it to Excel.
The SedimentIQ platform is less expensive than high end fleet management software.  Although it may not provide all the bells and whistles of the high end software, it may deliver just what you need to monitor productivity in your mining operation.  It relies on relatively inexpensive smart phones that are locked to the application.
I recall as a mining student doing time studies.  I rode the shift crew bus with pencil in hand, timing the travel  from the mine dry to the various shovels to measure start up times.  I recall sitting with a stopwatch timing shovel buckets and truck loading times.  Both of these tasks can be done for every shift, every truck by equipping the crew bus and mine trucks with the SedimentIQ tech.
The platform is currently being tested at a couple of trials mines and the founders are looking for more mines willing to adopt and further refine their technology.  Lets hope they can make a successful go of it.
The website is https://sedimentiq.com/.

Conclusion

Both of these innovative technologies can provide useful information to open pit and underground mine operations.  They are in the growth stage, looking for wider adoption.   Input from users, whether positive or negative, will assist them with on-going development and enhancements. Their websites obviously have more on what their technology offers, including presentations, white papers, and case studies.
It would be nice to meld these two technologies in some way to allow the SedimentIQ cycle times to also track payloads.
Check them out.  Try them out.

 

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Are Engineers Too Pessimistic

Geological colleagues have often joked that engineers are a pessimistic lot; they are never technically satisfied. The engineers will fire back that geologists are an overly optimistic lot; every speck of mineralization makes them ecstatic. Together they make a great team since each cancels the other out.
In my opinion engineers are often pessimistic. This is mainly because they have been trained to be that way. Throughout my own engineering career I have been called upon many times to focus on the downsides, i.e. what can happen that we don’t want to happen.

It starts early and continues on

This pessimism training started early in my career while working as a geotechnical engineer. Geotechnical engineers were always looking at failure modes and the potential causes of failure when assessing factors of safety.
Slope failure could be due to the water table, excess pore pressures, seismic or blast vibrations, liquefaction, unknown weak layers, overly steepen slopes, or operating error. As part of our job we had to come up with our list of negatives and consider them all. The more pessimistic view you had, the better job you did.
This training continued through the other stages of a career. The focus on negatives continues in mine planning and costing.
For example, there are 8,760 hours in a year, but how many productive hours will each piece of equipment provide? There will delays due to weather conditions, planned maintenance, unplanned breakdowns, inter-equipment delays, operator efficiency, and other unforeseen events. The more pessimistic a view of equipment productivity, the larger the required fleet. Geotechnical engineers would call this the factor of safety.
In the more recent past, I have been involved in numerous due diligences. Some of these were done for major mining companies looking at acquisitions. Others were on behalf of JV partners, project financiers, and juniors looking at acquisitions.
When undertaking a due diligence, particularly for a major company or financier, we are not hired to tell them how great the project is. We are hired to look for fatal flaws, identify poorly based design assumptions or errors and omissions in the technical work. We are mainly looking for negatives or red flags.
Often we get asked to participate in a Risk Analysis or SWOT analysis (Strengths-Weaknesses-Opportunities-Threats) where we are tasked with identifying strengths and weaknesses in a project.
Typically at the end of these SWOT exercises, one will see many pages of project risks with few pages of opportunities.
The opportunities will usually consist of the following cliches (feel free to use them in your own risk session); metal prices may be higher than predicted; operating costs will be lower than estimated; dilution will be better than estimated; and grind size optimization will improve process recoveries.
The project’s risk list will be long and have a broad range. The longer the list of risks, the smarter the review team appears to be.

Investing isn’t easy

After decades of the training described above, it becomes a challenge for me to invest in junior miners. My skewed view of projects carries over into my investing approach, whereby I tend to see the negatives in a project fairly quickly. These may consist of overly optimistic design assumptions or key technical aspects not understood in sufficient depth.
Most 43-101 technical reports provide a lot of technical detail; however some of them will still leave me wanting more. Most times some red flags will appear when first reviewing these reports. Some of the red flags may be relatively inconsequential or can be mitigated. However the fact that they exist can create concern. I don’t know if management knows they exists or knows how they can mitigate them.
It has been my experience that digging in a data room or speaking with the engineering consultants can reveal issues not identifiable in a 43-101 report. Possibly some of these issues were mentioned or glossed over in the report, but you won’t understand the full extent of the issues until digging deeper.
43-101 reports generally tell you what was done, but not why it was done. The fact I cannot dig into the data room or speak with the technical experts is what has me on the fence. What facts might I be missing?
Statistics show that few deposits or advanced projects become real mines. However every advanced study will say that this will be an operating mine. Many projects have positive feasibility studies but these studies are still sitting on the shelf. Is the project owner a tough bargainer or do potential acquirers / financiers see something from their due diligence review that we are not aware of?   You don’t get to see these third party reviews unless you have access to the data room.
My hesitance in investing in some companies unfortunately can be penalizing. I may end up sitting on the sidelines while watching the rising stock price. Junior mining investors tend to be a positive bunch, when combined with good promotion can result in investors piling into a stock.
Possibly I would benefit by putting my negatives aside and instead ask whether anyone else sees these negatives. If they don’t, then it might be worth taking a chance, albeit making sure to bail out at the right time.
Often newsletter writers will recommend that you “Do your own due diligence”. Undertaking a deep dive in a company takes time. In addition I’m not sure one can even do a proper due diligence without accessing a data room or the consulting team. In my opinion speaking with the engineering consultants that did the study is the best way to figure things out. That’s one reason why “hostile” due diligences can be difficult, while “friendly” DD’s allow access to a lot more information.

Conclusion

Sometimes studies that I have been involved with have undergone third party due diligence. Most times one can predict ahead of time which issues will be raised in the review. One knows how their engineers are going to think and what they are going to highlight as concerns.
Most times the issue is something we couldn’t fully address given the level of study. We might have been forced to make best guess assumptions to move forward. The review engineers will have their opinions about what assumptions they would have used. Typically the common comment is that our assumption is too optimistic and their assumption would have been more conservative or realistic (in their view).
Ultimately if the roles were reversed and I were reviewing the project I may have had the same comments. After all, the third party reviewers aren’t being hired to say everything is perfect with a project.
The odd time one hears that our assumption was too pessimistic. You usually hear this comment when the reviewing consultant wants to do the next study for the client. They would be a much more optimistic and accommodating team.
To close off this rambling blog, the next time you feel that your engineers are too negative just remember that they are trained to be that way.  If you want more positivity, hang out with a geologist (or hire a new grad).

 

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