Geology and feasibility: 50/50 or 50% better?

When talking about feasibility studies and more particularly their failures, it is important to define what exactly a failure is. It is important for a number of reason but a particular one that comes to mind is that not knowing about, or not admitting, a problem or failure almost certainly leads to cost escalation later down the road. So how do you know when your feasibility study has failed? I am aware of the fact that in some circumstances it might be difficult to distinguish between feasibility study failure and project implementation failure but often the implementation and execution has its roots in feasibility problems.

The massive landslide at Kennecott Utah Copper's Bingham Canyon Mine occurred on April 11, 2013. Image courtesy of KSL

The massive landslide at Kennecott Utah Copper’s Bingham Canyon Mine occurred on April 11, 2013. Image courtesy of KSL

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How geologists destroy shareholder value

Geologists are responsible for developing the primary assets (resources and reserve) of mining and exploration companies. So, if the fundamental resource is not accurate or if the resource during mining stage is not adequately managed, asset value is damaged and therefore the value a shareholder has in the resource or mine. That value can often not be recovered without spending a whole lot of money, which essentially becomes cash down the toilet. Let me give a couple of brief anonymous examples from a study done by a BHP resource geologist, Chris De-Vitry. These examples illustrate how bad geological practice destroys shareholder value.

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Magmatic sulphides: why Cu, Ni & PGE get in!

There seems to be a lot of interest in magmatic sulphide deposits from readers, or should I rather say an interest to better understand these interesting deposits. My last post focused on the central role of sulphur in these magmatic systems, how the sulphide portion of the magma separates from the silicate portion and then how the sulphide melt deposits itself within the magma chamber. We also spoke about how Fe gets into the sulphide melt. But what about the important stuff, the nickel, copper and PGE?

ARM's nickel sulphide Nkomati mine in South Africa. It's Cu/Ni ratio ma suggest Bushveld lineage...

ARM’s nickel sulphide Nkomati mine in South Africa. It’s Cu/Ni ratio ma suggest Bushveld lineage…

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Magmatic sulphide deposits: “Only for the masters!”

A colleague and I visited a university geology department in the vicinity of a project we were working to do a presentation on the geology of the project. We had been invited by a professor who’s research interests were amongst other things, mafic-ultramafic rocks and he had invited us as our project was hosted by such. He relayed an interesting story to us that day: Final-year students in the department were required to complete a research project and a student had approached the professor and told him that he is interested in doing a project about ultramafic rocks. The professor immediately retorted: “No! Ultramafic are only for the masters!” The professor was of course not talking about Masters’ degree students but referring to the dedication and possible the intelligence required to understand these rock types and their associated deposits.

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Fire Assay Photo Essay

Most geologists, whether students, in academia or in industry have heard of, or have submitted samples to have precious metal content analysed by lead fire assay. The lead fire assay method is one of a host of metallurgical analysis methods and is also often referred to as the fusion and critical cupellation (high temperature oxidation) step. It always helps to understand the analysis techniques used on samples so you can understand results and data better. Whether you are a geologist or not, I hope this fire assay photo essay will give you at least a basic understanding of the technique used by most precious metal explorers and miners to eventually come to a resource.

Beautiful bone ash crucibles in the muffle furnace (cupellation).

Beautiful bone ash crucibles in the muffle furnace (cupellation).

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You can sink or swim by density alone

A commonly overlooked factor in the resource estimation and eventual mine planning phase during feasibility studies is rock density. Density is most critical in determining the tonnage and contained metal of a resource and therefore translates directly to the financial feasibility of a deposit. In common scientific terms density is defined as mass per unit volume and expressed as g/cc, g/cm3 or t/m3. Tonnage and contained metal are thus calculated by filling a resource model’s volume with density values, interpolated from each sample taken from drill core. Each cubic meter of the resource model will then have an assigned mass and the grade associated with it will give contained metal. From this we see that density estimation is as important as grade estimation. Assumptions regarding density can be as detrimental to a resource model as assumptions regarding grade…

A scale altered to perform the hydrostatic submersion method of density determination. From the Jarman (2011).

A scale altered to perform the hydrostatic submersion method of density determination. From Jarman (2011).

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Post from the field: Termite mound sampling?

Today I am writing from the field, connecting with the fastest, most rural internet connection I have every had the privilege of connecting to! And what a day it was! The site where I am currently working is one of the few near-equatorial, semi arid regions in the world and is far from anything and everything, they way I love it! Apart from a very short rainy season, the rest of the year is blistering hot and dry. From about 10 am the temperature starts flirting with 40C and then it only goes up. I made the mistake of mapping the largest mountain in the region over the heat of the day and at one point had a real fear that my heart was going to explode! Most of the way was through thorn thicket and wood land, looking for fresh outcrop, a rare commodity in these parts.

The view from the top of the mountain.

The view from the top of the mountain.

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Friday Treat – Blast Sequence from Kolomela

Kolomela is one of Anglo American’s large iron ore producing mines. This open cast operation is situated near the town of Postmasburg in the Northern Cape province of South Africa. Today’s post is a stunning blast sequences as published on Anglo’s Flickr feed.

According to Anglo “exploration on this project dates back to the 1950s, although the first impact studies were only undertaken in 2001. Construction started in late 2008 following the receipt of relevant permits. At the end of December 2011 the mine was 98% complete. The mine will achieve full production in 2013. The Kolomela mine ore bodies comprise hard, high-grade, conglomeratic and laminated haematite orebodies. The ores have been preserved as three separate orebodies within basinal and graben structures up to 2km long, 400m wide and 300m deep. Kolomela’s lump ratio is expected to be 60:40. Kolomela mine’s Ore Reserves amounted to 203.4Mt at 31 December 2011, while Mineral Resources (excluding reserves) were 162.3Mt at 63.6% Fe. The current LOM is 28 years”.

You can get more info on this project and the source of this info here and here.

Enjoy!

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Logging in a Good Foundation

The corner stone of every feasibility study or mining project is a robust resource model/ estimation and in turn, the foundation of such an estimation is the quality of the primary data that was used as input for the model. As we have all heard, “rubbish in, rubbish out”. This primary data refers to the logs and analytical samples of drill core (or chips). The quality and perspective (oddly enough) with which core logging is completed can have a significant effect on the resource estimation of a deposit. Naturally the further from accurate the quality is, the increasingly devastating it can be. Something that can have a rather unexpected effect on mine planning and later on project execution, is the aforementioned perspective with which logging is done. I will elaborate in a moment.

Some juicy core!

Some juicy core!

Remember, logging and sampling of drill core is at the small end of the “error wedge” ie. a small error at this primary data collection point grows in magnitude further down the value chain of feasibility study. This is due to the incremental accumulation of error through the different activities including human error in logging and data input at any level, analytical error in sampling results,  and then inherent error in the final estimation process. Remember, “all models are wrong, but all are helpful”. So as geologists we cannot compromise on primary data quality and the interpretation of the geology at this level. In terms of geological interpretation and especially deposit scale understanding, by the time you are drilling, you should be relatively far down the line though. Drilling is usually a late activity in even fresh greenfields exploration. Strive to be accurate in your logging and allow it to be reviewed. Scrutinize assay results and chew on them. Don’t compromise on quality.

The archaic beast! Were the sampling "rubber hits the road"

The archaic beast! Were the sampling “rubber hits the road”

Many geologists are excellent when it comes to this primary technical execution. Few however have a perspective which constantly takes the whole mining value chain into consideration. How will the way your record your data now help the resource modeller, the mine planner or the metallurgist? Yes, you can get lost in the detail, even as a geologist, even in the geology and mineralogy. You can even sometimes be counter-intuitive in the pursuit of quality. This is a valuable skill that every industry geologist should pursue. It is a fine line and takes a little work and self-learning.

As a simple example, I worked on a ultramafic deposit which had been severely metamorphosed and altered resulting in tremolite, chlorite, actinolite, serpentinite, phlogopite schists of widely varying mineral proportions and at constantly varying intervals. This gave rise to over 20 different lithological units all originating from the same protolith dunite. Such accurate but unnecessary data would have kept a resource modeller busy for weeks, a waste of time and money. It must be added that the mineralization was not related to the level of alteration.

A piece of serpentinized dunite with large chromite crystals!

A piece of serpentinized dunite with large chromite crystals!

Stratigraphic allocation is another geological piece of information which can greatly assist or inhibit mine planning. If we think even further down the value chain to actual mining it often plays a critical role in grade control ore classification. “Stratigraphy” in this context does not only refer to what is found above or below, but more importantly from a mining perspective, how does lithology and mineralization correlate and how effectively can the former be used to guide mining. How practical can we as geologists make it for the loader operator, crew leader or blasting team?

Approach is key and your perspective determines your approach. As you log core approach it as if the deposit will definitely become a operating mine. Have this approach in the way you sample, how you allocate contacts, assign lithology, and mark out the stratigraphy. This kind of approach puts you in a position to add real, long term value to a project, regardless of the current stage it is in. Keep thinking where this thing is going, and in our industry, that is a mine!

Keep logging!