With the global economy and population feeling the effects of the COVID-19 pandemic, most exploration teams will have been demobilised and exploration programmes suspended. As a result, many companies are in a situation where they need to preserve cash, and the flow of information to the market will dry up leaving management and investors wondering, “where to next?”.
While the drop in commodity prices and markets has been dramatic, the recovery is expected to be quick once the world recovers and gets used to a new normal. When this happens is anyone’s guess. Many of the fundamentals that underpin commodity forecasts will still apply post-COVID-19, but business practices are likely to be fundamentally changed. It is thus crucial for companies to be in a position to resume operations and exploration programmes as soon as travel bans are lifted and also differentiate themselves from their peers to attract the finance that has inevitably left the industry in the short term.
This period thus represents an excellent opportunity for companies to consolidate and re-assess their positions. Most people will also be working from home (some juggling work with babysitting/ entertaining their kids) and peoples paradigms changed and thus the opportunity for innovation and out-the-box thinking.
Data is any mining and exploration companies most valuable asset and should be treated as such.
For advanced exploration projects and mining companies, the frenetic pace of exploration and operational workflows and investors’ demands, of which may to a degree be lessened currently, allow for some breathing space to focus proactively on data management approaches in place, geological framework, targeting models, ore body characterization, resource development and operational improvements. Some of these themes are explored below.
Ivy Chen‘s recent interview with Rooster Talk also touches on these topics and the value of taking this time to develop new concepts and reporting them to the ASX is paramount.
Engaging commodity experts
Companies should consider taking this time to conduct a health assessment on their databases. Several companies rely on CSA Global to provide this essential but critical service to ensure there are no critical issues impacting data accuracy and precision, continual monitoring and proactive addressing of issues to ensure data is robust for downstream use. Audits done in conjunction with the technical teams to check the quality of the data collected are also essential; this is done by reviewing geological models and interpretations in conjunction with drillhole data, assay results and core photography.
Where appropriate commodity experts should be engaged in the interpretation process and drillholes flagged to relogging and the necessary changes made to the database. This allows for geological models and estimation methodologies to be tweaked and optimised or alternative interpretations and methodologies considered.
Often geometallurgical data is collected but never used and taking the time now to build geometallurgical models (Ore Characterisation Models) alongside geological models can add significantly to the bottom line and optimise the extraction and processing of the ore. Where appropriate, Standard Operating Procedures should also be reviewed, updated or in many cases compiled for the first time.
The same applies to companies in the pre-drilling stages of their exploration where geological mapping, remote sensing (structural, alteration and geological interpretations), geophysics, and geochemical data are collected but never properly interrogated or interpreted in isolation. Often the target generation phase is done at a very superficial level and integration of datasets never done. Periods such as this, where companies globally are enforcing WFH policies for the foreseeable future, should be an opportunity to revisit this data and targeting approaches used.
With most of the low-hanging fruit in terms of mineral deposits already discovered, geologists are forced to either target poorer quality but easy to find deposits or go back to first principles when interrogating their data. Significant value can be extracted from the data if the target generation is done using mineral systems approaches and commodity and deposit experts are used to develop conceptual and empirical geological models.
Mineral systems approach
CSA Global Principal Consultant, Rob Holm, recently undertook a structural interpretation of a number of exploration licenses around the Pilgrim’s Goldfield for Theta Gold in South Africa. He used a mineral systems approach which generated several targets follow-up exploration, which will likely commence once the COVID-19 pandemic is brought under control.
Recent work by Senior Consultant, Geology and Geochemistry, Barbara Duggan recently highlighted the value in interrogating historical geochemical data more rigorously and identified several additional anomalies for follow-up investigation.
CSA Global Partner-Americas, Dr Neal Reynolds (sediment-hosted and intrusive-related base metals and gold systems), Tony Donaghy (nickel, copper, cobalt and platinum group elements (PGEs), Mick Elias (nickel sulphide and laterite deposits), Grant Louw (Industrial Minerals), Dr Maxim Seredkin (Uranium, bauxite, REE and In Situ Recovery technology) are frequently engaged to provide expert inputs into the building of geological models for Mineral Resource estimates as well as exploration targeting using mineral systems approaches.
This work can be done remotely, is relatively inexpensive (when compared to field-based programmes) and low risk but can add significant value to companies’ portfolios, and for mining companies, to the bottom line. By taking the time to re-evaluate their data and assets, companies can differentiate themselves from their peers and hit the ground running and test their new targets when the time comes.
By taking the time to re-evaluate data and assets, companies can differentiate themselves from their peers and hit the ground running and test their new targets when the time comes.
While the focus of this article has been around the geological aspects, other aspects should also not be forgotten and include metallurgical aspects and optimisation of processing plants, geotechnical aspects, and optimising mine/pit designs.
An important aspect not to be overlooked is how ESG practices are likely to be affected and what a company’s social licence to operate (SLO) will look like post the COVID-19 crisis. Companies like CSA Global’s parent ERM are heavily involved in this and are currently engaged with many mining houses on this front.
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