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Going the distance in an exploration business
By Marcelle Villegas
During the Philippine Mining Exploration Association (PMEA) Monthly Membership Meeting last 2nd of April 2018, guest speaker Mr. Douglas Kirwin discussed the topic about “The Exploration Business.” He is a Consulting Geologist and has been involved in the mining industry since the 1970s.
With that, he shares valuable insights and wisdom about surviving the difficult road of running an exploration project for a mining company.
It all starts with a discovery on a new site where shareholders gain profit, and later, society benefits as well from the exploration project.
This seems like a simple workflow of the operation but, it the road is full of challenges and possibility of losses.
“Resource exploration is a very costly, high-risk, tough business,” says Mr Kirwin.
He further mentioned that to succeed in the exploration, the key factors include the right team, the right place, autonomy (where there is no bureaucracy and no micromanagement), the project must be well funded, and there should be management support and commitment for more than 5 years.
Additionally, Mr Kirwin noted that teamwork is essential for a successful exploration and mining operation.
Leaders and decision makers in the company should also see the value and importance of mentorship.
He also mentioned that the toughest time in the exploration business happened in 2013 to 2016.
Have you heard of “The Herd Mentality”? This was one of the factors that caused some companies to fail.
Herd Mentality vs Focus is synonymous to Wealth Destruction vs Wealth Creation.
Knowing the difference has an impact on a company’s success or failure in the long run.
For instance, the stock market frenzies where companies join to invest on the wrong stocks is an example of Herd Mentality.
In effect, $96 billion of share holders’ money went down the drain in one instance for a group of companies.
Another factor that causes companies to fail is having a CEO who is overpaid, not qualified and not accountable.
Aside from an incompetent leader in the company, having too many restrictions in some countries with regards to health and safety issues in the field can also hinder success in an exploration project.
For example, Yunnan China and West Mongolia had these hindrances in recon camping.
Some countries or localities have volumes of policy manuals when in fact, safety is just a matter of common sense.
Other factors that can make or break an operation include a harsh environment that puts people at risk, geo-political issues, and high capital expenditure (capex).
Availability of commodities in a site is one of the biggest challenges in the exploration business.
According to Jean-Sébastien Dominique Francois Jacques of Rio Tinto Group, “The Global copper industry needs a new Excondida mine every 15 months over the next 10 years in order to meet global demand…” Mark Bristow, CEO of Randgold Resources was quoted by a journalist in South Africa and he said, “To keep the gold industry supplied, we need to discover 90 million ounces a year.” However, in reality, we are only discovering 10-15 million ounces annually, according to Mr Kirwin.
Something is not right here.
The final part of his discussion covered technology as new frontiers in the industry.
As part of this, technology also opens the door for mining exploration in underwater and in outer space which has been the project of many private companies who have the technology for these endeavors.
More on the latest technology, drones have grown to be a reliable tool in exploration and risk assessment.
Robotic mining technologies are coined as “tomorrow’s solutions for today’s mining problems.”
They can provide reports on fragmentation statistics after a blast, guide in revising drill patterns to optimize rock size, autonomous vehicles and loading system, 3D mapping, miner location system and more functions.
Coiled Tubing Drilling (CTD) is one that is notable as a highly efficient piece of technology for mineral exploration.
Another high-tech tool called the TruProbe (for applications like downhole gamma geophysical surveys and downhole televiewers) was introduced by the company Boart Longyear as a “game-changing drilling technology.”
In 2017 in the Pilbara region of Western Australia, robotic technology was used in four iron mine sites with 736 driverless trucks and robotic rock drills.
In conclusion, with these advancements in technology and wisdom from past exploration experiences, the big question at hand is, are we becoming more successful explorers?