As part of a new side business venture I have been working alongside a team of website and mobile app developers. It has been a good learning experience for me to see how the tech teams do things versus how the mining consulting industry conducts its business. We know there is a lot of private equity money flowing into tech and not mining, so they must be doing something right.
The tech start-up industry has developed its own set of jargon, like agile management, lean start-ups, disruption, minimum viable products, pings, and sprints. Some of their key methodologies would not make sense for the mining industry where one doesn’t have the luxury of trial-and-error and customer feedback to help complete your project. For software development, the attitude is get it out the door fast and your customers will then tell you what fixes they want to see. In mining you need to get it right the first time (hopefully). Having said that, some mining people will say they have seen 43-101 technical reports that follow the “wait for customer feedback” model.
Now where the tech industry can provide us with some useful advice is in the use of project management and collaboration tools. The software developers often work remotely and so make heavy use of the technology that exists or they develop new technology tools to meet their needs. Mining teams are starting to work from remote offices more often these days.
The following is a partial list (Part 1) of free software tools that I have used recently, mainly because I was forced to by the tech teams. Subsequently I have found the tools easy to use and most definitely some can be applied in our own industry, especially with diverse mining study teams. There are a lot more tech tools out there but my list includes the ones that I have personally come in contact with. Most of these are free to use with limited features and enhanced features are available if you subscribe to the full version at minimal cost. However even the free versions are useful and can be used to train your team. Most of them provide both web based and app based access so even when you’re on the road you can still use them and contribute to the team.
Trello: If you want to create a task list for your team, this is the app to use. Imagine a bunch of yellow post-it notes that you can put under various project categories, assign persons to each note, attached a file if you wish, and then have back and forth discussions within each note. Then once a task is done, just drag the note to another category (e.g. “In Progress”, “Completed”). Anyone or selected people can create a note or provide comment. See the image below for an example Trello screenshot.
Slack: If you want to have a running record of group discussions that all or only selected team members can follow and join in on, then Slack is for you. It can replace the long confusing back-and-forth emails that we commonly see, when people sometimes forget to “reply all” so now you’re out of the loop. See the image below for an example Slack screenshot. It’s great for discussions amongst the team and you can have private one-on-one discussions or wide open team discussions and can attached files too. It provides permanent record of discussions or decisions made.
Basecamp: is similar program that incorporates features from both the above and some people swear by this tool. I have not personally used it so cannot vouch for it, but some say it is very good. Watch the video on their website describing what it can do.
My bottom line is that there is a lot of good stuff out there, readily available, much of it free, and can facilitate the management of your project teams. Just because its tech industry related, don’t assume it wouldn’t have an application in the mining world. Next week in Part 2 of this blog, I will describe a few more of the tech tools that I have found useful.
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.
I have read numerous articles indicating that the mining industry is seeing a shortage of experienced people, on both the technical and management side of the business. Apparently the baby boomer generation is now nearing their retirement or early-retirement stage of life and there is a gap in the number of experienced people following behind. I also hear anecdotally that there is a lack of engineers interested in taking on remote or international assignments, which really does become more difficult when a senior level person has a family. I don’t work in the recruitment industry so I can only report what I have heard.
In a previous article (14. Miners – Why Have Your Own Independent Consultant?) I discussed why mining companies (or even consulting firms) should make use of the independent engineers as advisers or Board members. I understand from friends in the mining industry that many of the people nearing retirement are willing to take on consulting assignments or board or directors roles or other management roles. The work can be either full time or part time and working independently or as “associates” with engineering firms. So there likely is a significant network of experienced people out there; it’s just a matter of being able to tap into that network when someone needs specific expertise. So how can one do this?
LinkedIn (www.linkedin.com) currently seems to be the only global network for technical people and it is a great way to connect with engineers and geologists industry wide. LinkedIn members typically work everywhere, at mine operations, consulting firms, financial houses, or are independently employed. Almost every technical person I know is now registered on LinkedIn although with varying degrees of LinkedIn activity or biographic detail posted.
The question is how to find these people when you are looking for a specific independent expertise for a short term or over the longer term. Networking with people you already know seems to be the most common approach, however what if you need someone with particular knowledge and you don’t want to involve an entire engineering firm at this stage?
LinkedIn can be a great search mechanism for technical experts, and a keyword search can identify a lot of experts with very specific skill sets. The downside of this is that many of these experts highlighted by the LinkedIn search may be fully employed at mining operations or with large consulting firms and may not be the independent consultant that you are looking for.
To my knowledge, there is no searchable online registry solely intended for independent geologists and engineers (if anyone knows of the existence of such an online registry…please let us know). It is in the best interests of the entire mining industry to have some type of easily searchable independent consultant directory to be able to tap into the expertise that is out there.
Typically at the start of many mining studies, the team members receive a matrix of responsibilities. This table shows which people or groups are responsible for the different aspects of the study, i.e. who is responsible for geology, for mine design, for process design, infrastructure, etc. This is great tool and a necessity in making sure that everyone knows what they are supposed to do. However it doesn’t really tell them “how” they need to do it. How is their deliverable to be structured? How is it to be developed?
What often gets forgotten in the early stage studies is providing the team members a Work Breakdown Structure (“WBS”). I consider the WBS an equally important component as the responsibility matrix and the two should always be provided together.
The WBS is a hierarchical breakdown of the project into phases, deliverables, and work packages usually associated with cost estimation. It is a tree based structure, developed by starting with the final objective and then dividing that into manageable components based on size, duration, and responsibility. Typically this is done for the capital cost estimate, breaking it down into individual cost areas and cost components.
The WBS can provide the following information to the team:
It assigns the costing responsibility to specific people or group so they know what they must deliver.
It provides a consistent format for how to develop and report the capital costs (and operating costs).
It helps to ensure that no costs get omitted and that no costs get double counted.
It provides the cashflow modeller with a format to help import the total capital cost estimate into the cashflow model.
Typically a WBS is developed for pre-feasibility and feasibility studies but often ignored at the PEA stage, where some feel it is overly detailed for that level of study. I don’t feel this is the case and even a simplified WBS is valuable at the PEA stage.
In some cases where a WBS is created, it does not get wide distribution to the entire study team. The WBS should be provided to everyone and ideally a working session be held to walk through the WBS structure with the team. The idea is not make everyone a costing expert, but to ensure they understand how the project cost estimate will be structured and developed.
My bottom line is that regardless of the level of study, a WBS should always be created. Some will say the WBS is not required for early stage studies but I have found benefits in having one, at least for the capital cost estimate. Obviously the level of detail in the WBS should be appropriate to the level of study. It should not be difficult for your Study Manager to create an appropriate WBS early on and avoid headaches in the later stages when the final study is being assembled.
Over my career I have worked as an engineering team member on numerous projects and studies. Some studies went better than others. Unfortunately some dragged on, ran over budget, and ended up delivering a less than optimal product once all was said and done. There are numerous factors that will have influence on the successful completion of a study. Some of them are related to the quality of the technical team, the allowable budget and time window, and the type of direction provide by the Owner, however the key factor that I observed is the competency of the Study Manager (or Project Manager).
Study Managers must wear many hats. They will be responsible for being the main liaison with the Owner. They must herd a bunch of geologist and engineers in the same direction. They must ensure that technical quality and consistency is maintained by the entire study team. They are responsible for ensuring that budgets and timelines are being met. Depending on the quality of the Owner’s team and the consulting team, the combination of all of these responsibilities can be an onerous mission.
Every technical team has those team members that will deliver quality within timelines consistently. There will also be team members that have difficulty in meeting quality and deadline targets for various reasons. The Study Manager early on needs to figure out who fits into which category and must be able to work with them. An entire study can quickly grind to a halt simply because one key component has become bogged down. A good Study Manager, who may occasionally ruffle some feathers, is generally appreciated by the team since they know that the entire team will be held to account.
The Study Manager also needs to understand the objectives of the Owner and ensure the study team is working towards those objectives. The Study Manager however must also be honest with the Owner, keeping him informed of the true progress and warn if their objectives are achievable or not.
The Study Manager is responsible for coordinating the communications amongst the team and with the Owner. Some managers are excellent at this while others fall into the trap of communicating on a “need-to-know” basis or “too late” basis. Timely and thorough communication is important; avoid thinking that one is hampering the progress of others by involving them in frequent communications.
If an Environmental Impact Assessment is being conducted concurrently with an engineering study, the level of internal and external communication becomes even more critical due to the large number of technical disciplines and people involved. Deadlines also become critical in such situations due to the size of the team.
When selecting a Study Manager, keep in mind that in some instances you may find that different managers in the same organization can have different amounts of internal authority. For example, if technical people are needed on another other project, some managers can keep their team together while other managers will lose team members to the other project. Losing manpower doesn’t help a study so, if possible, try to get a sense of the role that Study Manager has in their organization.
My bottom line is that when an Owner has received proposals for a study and is in the process of awarding that job, the most important consideration is who will be the Study Manager. Meet and chat about how they will manage the study and what their experience is. Check references if possible. The voluminous proposals provided by consulting firms can contain a lot of information like Gantt charts, organizational charts, cost estimates, team resumes, safety plan, and corporate project experience. Focus some time on the Study Manager; don’t assume he’s simply an administrative person that will be scheduling meetings and issuing monthly reports.
The statement “Have a look in the data room, it’s all in there” can bring a cold sweat to many an engineer undertaking a due diligence or updating a study from a previous consultant. How many of you, during a due diligence, recall being given FTP access to a data room that is full of highly disorganized folders and sub-folders, files with cryptic names, different updates of the same file in different folders? It can be like looking for a needle in a haystack. It can be difficult to determine which files are actually important and still relevant today and which files have been simply dumped into the room. There is nothing worse than spending a day reviewing an Excel model only to find out that wasn’t the latest version and a different un-related folder has the correct file.
Data rooms are generally created for due diligence exercises or during an advance engineering stage (i.e. detailed engineering). Regardless of the purpose, it is helpful for all involved in the study to have some type of a document control person who understands what is in the data room, what is important, and what is non-essential.
Large companies or large projects may often have an dedicated document control person to manage the data room. However smaller companies simply in a due diligence phase may tend to dump all the electronic files they have into the dataroom, sort them into different folders hopefully, but it’s still up to the reviewer to dig through the files to find what they need. This can be a time consuming task, costing the client money in wasted time. Therefore organization of the data room is key.
Comprehensive searchable document management systems such as Aconex, SharePoint, and others are available, but they can be pricey and do require a team mindset to organize and catalogue the information put into them. However a properly implemented system like these can make it easier to search for files, keywords, and the latest versions of files. “Properly implemented” means that the entire team takes the time to put the information in and ensure it is properly tagged. However even these systems can become repositories for hundreds or thousands of files.
As an aside; when using a cloud-based dataroom or FTP site, try to select one that allows bulk downloading of documents rather than only allowing one file at a time.
My bottom line is that data room management is important although I don’t know if there is any single magic solution. Small mining companies may have tight budgets and a small management team so organizing data properly isn’t high on their priority list. I suggest to anyone setting up a data room, please take the time to properly set up the folder structure, develop a single bibliography of what files are in there, and assign a person to be familiar with the general contents of the data room. Also don’t just dump in everything like unnecessary data or working files that may not actually be required by anyone.
Over the years I have worked in many situations; as an independent consultant, as a member of a consultant’s study team, and as the owner’s representative managing consultants. I have learned that there is a role for both the independent consultant and the consulting firms with mining companies.
A previous article (“9. Large Consulting Firms or Small Firms – Any Difference?”) discusses where I feel the large and small consultants fit into the overall picture. Large or small technical teams are required where there are broader scopes of work, significant effort levels, and multiple technical skills are needed. Independent consultants are a different option again, best suited for assisting the owner directly on either an independent or not basis. Sometimes the independent engineer might be on the Board of Directors or he might be part of an owner’s advisory panel. Either way, management should have their own in-house advisory capability to bounce ideas off of and review the work being done.
Areas where the smaller independent consultants can differentiate themselves are as follows;
They don’t bring a lot of extra personnel onto the job. They keep the work only to those that are needed and can usually pull in other experts as needed for specific tasks.
They can provide frank and straightforward advice without worrying about larger firm constraints, both legal and business development related. The independent consultant generally does not have the objective of trying to win a big feasibility study or EPCM job.
One can develop a good working relationship with the consultant, and everyone gets familiar with each other’s objectives and goals.
They can work efficiently at a pace of their own choosing, possibly resulting in lower costs and better timelines. I know of independent consultants that work nights and weekends to meet deliverable schedules compared to those in larger firms who may tend to follow the Monday to Friday regime.
They can provide long term stability since they won’t have much turnover. I know of a personal case where I was technically involved from afar in an international operating mine for over 15 years. The technical staff at the mine site had significant turnover (partly due to promised corporate relocations), but I was a constant able to provide history (and backup reports) as to why and what was done previously, avoiding re-inventing the wheel with each new technical leader coming to site.
Stock Options: A point of discussion is whether the independent consultants should receive some type of stock option compensation. I have worked in both situations; where I have received stock options and where I haven’t. Awarding stock options would removed the “independent” nature of the relationship and hence negated the ability to sign off as an independent QP. In some circumstances, the company may not require the independent consultant to be an independent QP since they fulfill more of an advisory role for the company. One advantage of awarding stock options is the engineer may become more beholden to the project since he feels it is his project too, rather than simply being an advisor. Conversely the company may prefer the consultant doesn’t have any direct ownership so that their advice can be viewed as being more independent. I personally feel that awarding stock options is a good idea to help foster long term commitment from the consultant.
My bottom line is that the small independent consultants have a role to play and should be part of most owner’s teams, whether on the Board or on an Advisory Panel. The independent consultants can be selected based on their technical specialization (i.e. exploration, resource modelling, mining, metallurgy, environmental) and provide valuable part time guidance to the company. Please make sure that your consultant is capable; I have seen cases where a member of the advisory panel was actually giving the company bad advice and the others could see it but wouldn’t say anything since it’s not their area.
Let me say the obvious; the state of the junior mining market is not great these days. The number of financings is down and it seems there are a lot of companies out there trying to get their piece of the financing pie. People say there actually is a fair bit of private equity funding available but only for the right projects.
I have heard from geologist colleagues that financing grass-roots exploration is extremely difficult to acquire unless company management has had past successes and is well connected to the money scene. I’m told that 43-101 resource estimates alone don’t generate much excitement and for projects to be “on the radar” they need to be advanced to at least the PEA stage. Investors want some vision of what the project will look like.
In the recent past I have become familiar with some junior mining company that were always struggling for cash while others seemed to have no problem in getting at least some funding to continue their efforts. The biggest differences between these two situations were; (a) the top level management in place, (b) the type of project they had, and (c) if their path forward plan made logical sense.
Management is what it is, although companies generally do attempt to bring in experienced people with track records on either the executive level or the Board of Directors level. Experienced management can hopefully establish if their projects will have a high probability of success or if the project is going to be a hard sell. This will determine whether they should continue to spend money on the project.
In my experience, when in the financing mode, it is important that company management have the ability to present an orderly, practical, and realistic path forward for the project to demonstrate what they will do with the money. I have participated in due diligence meetings and listened to a management team tell us they will have a resource estimate this year and be in production in two years. Those around the table look at one another knowing that they will be lucky to have a feasibility study completed by that time and lucky to have their environmental permits in place.
Keep the plans realistic