Breaking down the feasibility process: The Scoping Phase

The feasibility assessment process is important as it is the fundamental way in which project potential, and essentially, value is assessed and further more allows the quantification of risk associated with this value. Importantly, each step of the study process, from scoping and desk study phase through to final bankable feasibility, should incrementally and realistically add value to the project and so secure potential for return on investment. When the process is not well defined, adhered to, or critical decision gates held in low regard, value can either be destroyed or value can be misrepresented (inflated).

Continue reading

Advertisements

Photo Essay – A peculiar deposit… above the clouds, El Soldado

El Soldado ( The Soldier) is a peculiar copper deposit in the Chilean Andes with mineralization believed be associated to primary lithological factors (such as composition and porosity), structure, metamorphism, granitic intrusion, petroleum, yes, petroleum and bacteria. I will get into the details of the interesting and debatable geology in a next post but first let me show you what it looks like there. Chile and its Andes mountains are special, and it was a fantastic experience to visit such an interesting and historic mine above the clouds.

I have made mention of this mine in a previous post (here) before. It is an Anglo American operation situated 130 km north of Santiago and at 600 m above sea level. This operation produces around 50 000 t of copper per year and has around 175 Mt in reserves @ 0.8 % Cu.

I could log core here all day long!

A beautiful setting for the core yard and sampling facilities with the Andes canvassing the background.

Continue reading

Geological continuity vs. value continuity: Don’t mistake one for the other or assume the one equals the other

Geological continuity in the context of resource modeling and estimation usually refers to the lithological (sometimes structural) features that define the ore zone with a defined consistency. This might be defined, for example, by a particular sandstone unit which consistently hosts uranium mineralization over a certain area, a vein (ore shoot) hosting gold mineralization or even a contact area between to rock types (skarn deposit). Value continuity however, is defined as the degree of consistency with which the value of the mineralization itself is consistent within a particular deposit. This value speaks of grade, thickness and could even be extended to geo-metallurgical consistency (the continuity of similar mineralogy). But why do we need to differentiate between these two concepts as opposed to just pure continuity?

Image of the El Soldado pit from the viewing platform. This image from the mintecminesite blog

Continue reading

Friday treat: Sit down chat and advice from Anglo ex-CEO

Rick Menell gives an interview and chats about the birth and development Anglo Vaal Corporation, how he became a geologist, his stint as a Wall Street banker, outlook on South Africa and some advice to young geologist. The interview is shared here as a play list of short videos. He is a 35 year mining veteran that headed the Anglo Vaal Corp and Teal Exploration amongst other things. There is a brief biography included below. Enjoy the video and the weekend!

‘Rick Menell “trained as an exploration geologist and worked as an investment banker with JP Morgan in New York and Melbourne. He also worked as an executive director of Delta Gold in Australia. He worked with Anglovaal Mining from 1992 – 2006, becoming CEO in 1999 and executive chairman in 2002 before his current position at Teal Exploration & Mining, Inc. He is also deputy chairman of Harmony Gold Mining Company Limited, Chairman of the South African Tourism Board, a director of the Standard Bank Group and Mutual & Federal, and chairman of Village Main Reef Gold Mining Company (1934) Limited. He is a director of the Chamber of Mines where he was president from 1999 to 2001. Richard Menell was appointed a Weir Group “non-executive director in April 2009. Richard was previously an investment banker with JP Morgan in New York and Australia and an executive director of gold producer Delta Gold in Australia. He returned to South Africa in 1992 to join the Anglovaal Group and was appointed chief executive of Anglovaal Mining in 1996 and executive chairman in 2002. He was president and chief executive of TEAL Exploration & Mining Inc from 2005 until 2008. He was also formerly chairman of Avgold Ltd (1996-2004) and Bateman Engineering BV (2005-2009) and director of Mutual & Federal Insurance Company Ltd (1996 -2010) and Standard Bank Group Ltd (1997-2011). Richard is currently a director of Gold Fields Ltd in South Africa and a senior advisor to Credit Suisse. He is a fellow of the Geological Society (London), and both the Australasian and South African Institute of Mining and Metallurgy.’

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

Continue reading

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.

20131029-085450.jpg

Continue reading

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…

Continue reading

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.

Continue reading

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).

Continue reading