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By A. R. Chambers

Malagash received its name from the Indians many years ago on acco.unt of its turbid (milky) waters, although,' the red men did not appreciate the significance of this turbidity, and were, of course, entirely ignorant of the crystal beds of pure salt that lay beneath their feet. The salt lake of the Mississippian, or Lower Carboniferous period, in which these beds occur, was apparently a large one, for there is evidence of its existence at intervals all the way from Sydney, Cape Breton, to St. John, New Brunswick, 300 miles as the crow flies, and there is no knowing what its other dimensions may have been, as much of this horizon is now buried on the one side beneath the waters of the Gulf of St. Lawrence, and on the other underneath the Atlantic ocean. About midway of the area and underlying the counties of Colchester and Cumberland, there occurs a synclinal basin of which the Malagash salt outcrop forms only a small portion of its northern limit. This basin has been described very fully by A. C. Hayes. (1) The operations carried on at Malagash since Hayes wrote his report have brought to light very little in the way of new geological data, except to confirm his pre-dictions as to the probable faulting of the salt strata, and the effect which these faults would have on mining operations.

Jan 1, 1924

By P. T. O'Kane

The PLATSOL® process, initially developed for the treatment of the NorthMet Cu/Ni/PGM concentrate, has seen over the recent years its applicability extended to include numerous other Cu/Ni concentrates of the same type, as well as other precious metals-containing feedstocks. However, several concentrates were found refractory to the typical PLATSOL® conditions, more particularly so the platinum. Attempts to extend those conditions, such as higher temperatures (250°C), longer retention time, increased oxidation conditions, higher chloride additions, were not successful. Detailed mineralogical investigation of those PLATSOL® leach residues indicated the main refractory mineral to be cooperite (PtS). Further metallurgical investigations showed that a thermal pre-treatment of the concentrate effectively unlocked the refractory platinum minerals for the subsequent leach. Temperatures between 400 and 750°C were tested, with the optimum being found around 650°C. The kinetics of the pre-treatment process were fast, and one hour at temperature proved sufficient. Under those conditions, PLATSOL® extractions were re-established around 95% for both platinum and palladium. From a mineralogical examination of the calcine, it was shown that the effect of the pre-treatment was to transform the cooperite and other refractory sulphides into metallic platinum and alloys, amenable to the PLATSOL®. The implications of the pre¬treatment step for the processing of PGM concentrates arc briefly discussed.

Jan 1, 2004

By S. Downing, T. Grammatikopoulos, N. Hoffmann, C. Gunning

"Most deposits display a high degree of geological and mineralogical complexity that can affect metallurgical processing. Therefore, the proper characterization of the ore and gangue minerals requires a multi disciplinary approach combining geology, mineralogy, geochemistry and processing. However, mineralogy to a large extent informs the metallurgical process. Automated methods can be used throughout the mining chain from advanced exploration through to production.In this presentation we discuss actual case studies where automated mineralogy has been applied in a geometallurgical framework at a pre-feasibility to feasibility level. These include examples from a strongly serpentinized magmatic Ni deposit (Dumont) and a magmatic Cu-Ni deposit (Maturi). Mineral speciation and ratios, e.g., chalcopyrite, cubanite, and pentlandite/pyrrhotite are critical to model the Cu-Ni magmatic deposit. In the serpentinized Ni ore, automated mineralogy is used to speciate the Ni minerals into sulphides, alloys and refractory Ni in the silicate matrix.The mineralogical results are linked to the metallurgical test work in order to model the geometallurgical domains. These case studies will illustrate how mineral quantification and improved understanding of inherent mineralogical parameters in relation to metallurgy reduce technical risk in both exploration and flowsheet development.INTRODUCTIONGeometallurgy is a cross-discipline approach combining geology, metallurgy and mine planning (e.g., Dunham et al., 2011). It is aimed to improve the understanding of geological, mineralogical and metallurgical parameters of an ore. Informational gaps among the different disciplines are often apparent. Automated mineralogy is shown in many studies (e.g., Eppinger et al., 2013, Philander and Rozendaal, 2013) to constitute the link between geology and metallurgy. The geometallurgical approach can provide specific data to geology, mining and mineral processing development and plant operations. The scope of the automated mineralogy is to illustrate how mineral quantification can improve the understanding of inherent mineralogical parameters in relation to metallurgy, and reduce the technical risk in both exploration and flowsheet development."

Jan 1, 2016

Mineral resource development activities impact the health and well-being of many people, from workers, to families and surrounding communities. In the decade up to 2010, mining revenues increased from 6% to 14% of Australian GDP, and minerals contributed 55% of total exports, with a growth in mining employment from 1% to 1.7% of the national workforce (Connolly and Orsmund, 2011). The growth in Australia?s minerals operations is mostly located in remote areas, or in rural communities with a limited population. As a result, operations have increasingly implemented long distance commuting (LDC) programs, often called ?fly-in, fly-out? (FIFO) and ?drive-in, drive-out? (DIDO), as a staffing strategy to meet rapid industry growth in locations with limited local populations. The rapid expansion of the minerals industry has resulted in considerable public debate about the benefits and costs to all sectors of Australian society. In response to the concerns of constituencies from many parts of Australia, the Minister for Regional Australia, Regional Development and Local Government, The Hon Simon Crean MP, asked the House Standing Committee on Regional Australia on Tuesday 23 August 2011 to inquire into and report on the use of ?fly-in, fly-out? (FIFO) and ?drive-in, drive-out? (DIDO) workforce practices in Regional Australia. The recently published report highlights the national interest and the diverse opinions about this practice in Australia. Resource extraction companies have developed several options to meet the accommodation requirements of their long distance commuting workforce. In this paper, initial results are reported from an ongoing survey of FIFO (and other non-residential) resource industry workers (n = 286) in the Australian resource extraction industries. The purpose of this study was to better understand how accommodation arrangements may impact on the health, wellbeing and job satisfaction of non-resident workers; and to attempt to find a relationship between different accommodation variables and workforce wellbeing and retention. In doing this it investigates evidence for the linkage between accommodation factors, hours of work, health, well-being, job satisfaction and job retention in the LDC work force.

Aug 1, 2013

By N. Samman, S. N. Lau

"A series of new, grease-based, solvent free open gear lubricants were developed to meet the demanding service requirements of mining equipment. The use of these products has resulted in better performance under conditions of temperature extremes and in terms of longer component lives. They have gained widespread acceptance within the mining communities for such applications as the lubrication of mining shovels, draglines and ball mills.These products are WHMIS non-controlled and are environmentally acceptable. The benefits and advantages of using this type of product to lubricate mining equipment as well as the field evaluation and experience will be discussed."

Jan 1, 2002

By R. A. May, P. J. Brooks, W. M. Smith

"Neill and Gunter Limited (NGL) has prepared a preliminary design and a cost estimate for a ferric chloride leach plant to recover copper, lead, zinc, and silver from a typical complex sulphide ore. This plant design is specifically intended to treat unconcentrated ground ore (flotation feed), but can be readily adapted to treat bulk concentrates. Samples of ground ore and bulk concentrate were obtained from Heath Steele Mines, Miramichi, New Brunswick, laboratory testing, and preliminary process flow sheet preparation was carried out by the Research and Productivity Council in Fredericton, New Brunswick. Approximately thirty drawings have been produced, including process and equipment flowsheets, process piping and instrumentation drawings, and preliminary general arrangements. Preliminary capital and operating cost estimates were prepared for a plant that would treat 1000 t/d of crushed and ground ore to produce about 30 000 tpy of zinc. Capital and operating cost estimates were also projected for plants up to 4000 t/d of processed ore. Recoveries of 99% for zinc, 98% for lead, and 96% for copper were achieved in laboratory tests on unconcentrated ore. These recoveries were higher than the overall recoveries obtained from bulk concentrate, yielding approximately 10% more revenue.A 1000 tonne per day plant was determined to have a low return on investment, however, depending on the size and type of mining operations employed and the FCL plant throughput. DCF-ROI projections of 20% to over 30% were calculated for 100% equity financed “green field” mine, mill and FCL plant operations of 2000 t/d and higher"

Jan 1, 1997

By F. R. Archibald

A STATEMENT on this subject by A. D. Turnbull, presented and discussed at the Annual Business Conference of the Metallurgy Division, C.I.M., held in Ottawa on April 22nd 1957, led to creation of a committee "too see if the Metallurgy Division of the C.I.M. can improve this situation". Without discounting the general problems of education and short-ages in other fields, the committee is primarily concerned with deficiencies related to metallurgy. The committee members are: F. R. Archibald, Chairman, A. D. Turnbull, L. E. Djingheuzian, J. U. Mac-Ewan, and L. M. Pidgeon. Following exchange of views among the committee members a general attitude of approach was established and a background of reference material assembled. It is the purpose of this review to acquaint those interested with the reference material, to offer an appraisal of the situation, and to suggest a programme for action by the Metallurgy Division of the C.I.M. Before proceeding with the ?presentation it is fitting to point out that, notwithstanding some rather important developments in public concern for educational matters, as well as changes in the level of activity in the metallurgical industry, the statement (April 1957) by Mr. Turnbull still stands as a sound article of reference.

Jan 1, 1958

By K. Muehlenbachs, J. U. Stemler

"Abstract - The Boston deposit is a recently discovered Archean lode-gold deposit located approximately 700 km northeast of Yellowknife, in the southern portion of the Hope Bay volcanic belt. Primary H2O-CO2-NaCl fluid inclusions associated with gold mineralization at Boston are of low salinity (4.6 ± 1.4 eq. wt.% NaCl, n = 182) and contain pure CO2. Homogenization temperatures of liquid-phase inclusions average 270° ± 33°C (n = 141), but some fluid inclusion assemblages contain coexisting liquid- and vapor-phase inclusions that homogenize near critical conditions, suggesting phase separation. In these groups, liquid-phase inclusions homogenized at 299° ± 25°C (n = 24), and vapor-phase inclusions homogenized at 338° ± 28°C (n = 18). These temperatures overlap within error, and a median temperature of ~320°C is taken as representative of trapping conditions within the veins. An approximate pressure of 2-3 kbar was estimated from fluid inclusion isochores at this temperature. Stable isotopic compositions of carbonate minerals from the mineralized zones range from -4.7‰ to -3.1‰ in d13C, and from 11.2‰ to 12.8‰ in d18O; quartz ranges from d18O = 12.8‰ to 14.9‰; and pyrite ranges from d34S = 2.1‰ to 3.5‰. The d18OH2O, d13CCO2, and d34SH2S values of the fluid calculated from these minerals at 320°C are 6‰-9‰, -2.4‰ ± 0.6‰, and 1.5‰ ± 0.5‰, respectively, and are intermediate between metamorphic and magmatic compositions. A unique source for the fluids cannot, therefore, be constrained from these data. Petrographic and geochemical data for the Boston deposit are consistent with data from other Archean lode-gold deposits worldwide, implying that the Boston deposit formed in a similar environment and from similar types of fluids. These results suggest that the Hope Bay volcanic belt may represent a major new mesothermal gold belt in this part of Nunavut. Sommaire - Le gîte Boston a été récemment découvert à environ 700 km au nord-est de Yellowknife dans la partie sud de la ceinture volcanique de Hope Bay, il s’agit d’un gîte d’or filonien d’âge Archéen. Les inclusions fluides primaires de H2O-CO2-NaCl associées à la minéralisation aurifère du gîte Boston présentent une faible salinité (4.6 ± 1.4 eq. pds.% NaCl, n = 182) et contiennent du CO2 pur. La température d’homogénéisation des inclusions à phase liquide est en moyenne de 270° ± 33°C (n = 141), mais certains assemblages d’inclusions contiennent des phases liquides et gazeuses coexistantes qui s’homogénéisent dans des conditions quasi critiques, suggérant qu’elles résultent d’une séparation de phase. Dans ces groupes, les inclusions de phase liquide s’homogénéisent à 299° ± 25°C (n = 24) et les inclusions de phase gazeuse s’homogénéisent à 338° ± 28°C (n = 18). Ces températures se recoupent à l’intérieur des limites de l'erreur de mesure, et nous considérons qu’une température médiane de ~320°C est représentative des conditions de piégeage dans ces veines. Les isochores permettent d’estimer une pression d’environ 2-3 kbar à cette température. La composition des isotopes stables des carbonates dans les zones minéralisées s’étend de -4.7‰ to -3.1‰ pour d13C et pour de 11.2‰ à 12.8‰ pour d18O; les valeurs de d18O pour le quartz varient de 12.8‰ à 14.9; et les valeurs de d34S dans la pyrite vont de 2.1‰ à 3.5‰. Les valeurs de d18OH2O, d13CCO2, et d34SH2S du fluide calculé à partir de ces minéraux à une température de 320°C est de 6-9‰, -2.4‰ ± 0.6‰, et 1.5‰ ± 0.5‰ respectivement, reflétant des conditions intermédiaires entre des compositions métamorphiques et magmatiques. Il n’est donc pas possible d’identifier une source unique pour ces fluides à partir de ces données. Les données pétrographiques et géochimiques du gîte Boston sont similaires à celles d’autres gîtes d’or filoniens ailleurs dans le monde, ce qui implique que le gîte Boston s’est formé dans un environnement similaire à partir des mêmes types de fluides. Ces résultats suggèrent que la ceinture volcanique de Hope"

Jan 1, 2006

By V. L. Gravitis

Radioisotope X -ray techniques of analysis for nickel have been tested in laboratory and plant trials. In the laboratory tests. a comparison was made of radioisotope and conventional analyses for nickel in solid s samples taken from streams of a nickel concentrator. Coefficients of variation of 1.7% for feed and concentrate samples , and equal to 10% for final tailing samples, were obtained. Continuous determination of nickel in final tailing slurries was demonstrated in a trial lasting 20 days at a nickel concentrator (Western Mining Corporation), nickel being determined with a standard error of 0.036% Ni in the slurry solids within the range of 0.24 to 0.68% Ni. This error, obtained by comparison of on-stream probe analyses with assays of samples taken from the stream, includes errors in sampling and assay by conventional techniques.

Jan 1, 1977

By Harry Perry

By 1980, the free world's need for economic sources of energy is expected to double. As a result, there will be a tremendous potential for all energy sources working together to supply the demand. For coal to continue its dominant role as a low-cost energy source, means must be found for it to meet the challenge of nuclear power and to overcome obstacles placed on its use by air and water pollution regulations. As the more limited reserves of gas and oil diminish, economic ways are also required for converting coal to synthetic liquid and gaseous fuels, and to chemicals, thus resulting in optimum utility of the most abundant low-cost fuel resource. The means for accomplishing these ends can only come about by a vigorous research and development program. Successful efforts by industry and government working together, both in America and abroad, will assure the continued use of coal to meet the world's energy demands. This paper discusses the emerging patterns of energy sources throughout the world and the role that research and development on coal will play in supplying future energy requirements.

Jan 1, 1967

By D. R. Derry

This paper up-dates an earlier paper by the author on the rate of new Canadian mineral discoveries and the exploration methods which were principally responsible for these finds. He concludes that the ratio of exploration expenditure to production value must be increased if we are to provide sufficient new reserves for the future.

Jan 1, 1970

By H. Qi, J. L. Feng, D. J. Li

"In the present paper, the characteristics of the granite burst under loading/unloading conditions was studied by means of both laboratory experiment and finite-discrete element method (FDEM). After gaining the mechanical properties of the granite samples under uniaxial compression conditions, the parameters taken as input arguments in the FDEM modelling were then carefully calibrated so as to provide some basic data including Young’s modulus, Poisson’s ratio, uniaxial strength, Lame constants, cohesive strength, and frictional angle for further being used in simulating granite bursts. All the simulating results by the FDEM were basically in agreement with that obtained from the uniaxial compression test and triaxial granite bursts in laboratory, respectively. This study shows that that such computational mechanics of discontinua can be employed to gain powerful insight into the failure mechanism of granite burst, which could also be a useful tool to clarify the collapse mechanism of rock structures in rock engineering design and rock test scheme optimisation. INTRODUCTIONBased on discontinuum state a priori, discontinuous modeling techniques that are commonly referred to as discrete element methods (DEM) treat the material directly as an assembly of separate blocks or particles, which was originally proposed by Cundall (1971) and Cundall and Strack (1979) from the viewpoint of analogous molecular dynamics simulation to better account for and understand the interaction between the blocks. The distinct feature of these formulations is that a constantly changing problem of geometry and contact conditions can be addressed by solving the equations of motion using an explicit time marching scheme (most often in a ‘leap-frog’ format), while updating contact force histories as a consequence of contacts between different discrete elements and/or resulting from contacts with model boundaries (Bicanic 1998). The most notable implementations of DEMs are arguably represented by the universal distinct element code (UDEC) (Itasca Consulting Group Inc., 2013) and the particle flow code (PFC) (Itasca Consulting Group Inc., 2012). Another formulation is the discrete crack framework that is based upon some criteria for an advancement of crack front, which is coupled with extensive local and global re-meshing while simulating by numerical methods such as finite element technique, commonly using fracture theories. Certainly, it is relatively easy to trace the propagation of single crack front governed by some principles of energy release rates (Ingraffea 1997) but tracing of multiple cracks leads to topological and algorithmic complexities. Otherwise, there is no consideration of interacting cracks in these formulations of finite element or enhanced finite element techniques (e.g., in XFEM and ABAQUS)."

Jan 1, 2015

By P. Amelunxen

It is well-known that the particle breakage mode that occurs in a semi-autogenous mill is significantly different from that which occurs in a ball mill, enough so to warrant very different lab scale breakage tests and scale-up models. This phenomenon, at the plant scale, leads to changing process constraints depending on the particular properties of the ore. For example, hard or coarse ores might bottleneck the SAG/AG mill throughput, while the ball mills might constrain throughput when milling soft or fine ores. Because the power draw of a ball mill is fairly constant compared to that of a SAG/AG mill, periods of SAG/AG mill bottlenecks lead to increased ball mill circuit specific energy consumption and a finer grinding circuit product size, which together constitute a loss of efficiency of the overall process. Because HPGR circuit throughput is less sensitive to changes in ore hardness, this situation is less common or severe in those circuits. Furthermore, the ball mills are somewhat decoupled from the upstream crushing circuits through the use of surge bins, which also helps to mitigate this effect. As a result, ore hardness variability constitutes a significant cost penalty that should be applied to SAG mill/ball mill/pebble crusher SABC circuits when evaluating the relative economics of different grinding circuit configurations. Nevertheless, the issue is by-and-large ignored, because most current HPGR trade-off studies are based on averaged ore hardness parameters. This paper provides an estimate of the magnitude of this penalty for a typical operation by using Monte Carlo simulation methods and plant data from Freeport-McMoRan?s autogenous, semi-autogenous, and HPGR-based comminution circuits. A case study from an in-house 96K t/d sulphide project is presented to illustrate the concept. It was found that by including variability effects, the trade-off NPV of the HPGR circuit over that of the SAG mill circuit increases to $84 million from negative $33 million, effectively reversing the original decision of selecting a SAG mill circuit for the fixed hardness case.

Jan 1, 2012

By G. B. Harris, C. W. White

Cyanide has been used for the recovery of gold since the mid 1800s, but several jurisdictions have already banned its use, and environmental pressures are increasing to finding an alternative. Gold also forms chloride complexes similar to those of cyanide, but the use of chloride has never achieved widespread acceptance. This paper describes a chloride-based flowsheet, wherein the key unit process is the recovery and recycle of chloride ion. It is shown that the chloride-based flowsheet is competitive economically with the conventional cyanide-based flowsheets, and that it has a number of other advantages, particularly environmentally.

Jan 1, 2011

By K. C. Corin, Z. G. Song, J. G. Wiese

In the present study the effect of using different grinding media, viz, ceramic balls, forged steel balls, 15% Cr steel balls, stainless steel and mixture of stainless steel and 15% Cr steel balls (50:50) on the flotation performance of a Platinum Group Mineral (PGM) UG2 ore was investigated. Test work was conducted using a laboratory scale horizontal tumbling mill and a batch flotation cell. Power draw to achieve a specific P80 was determined for each media type. Changes in flotation behaviour were evaluated in terms of particle size distribution, water recovery, solid recovery and valuable mineral recovery. pH, Eh and DO levels were also measured. Grinding products of five different media produced similar solids and water recovery, which is indicative of the froth characteristics, but the grades and recoveries of PGE and chromite were different. The product obtained when using ceramic media showed the best flotation performance, producing the highest PGE recovery and the lowest Cr2O3 recovery. The products obtained when using stainless steel balls (SS) produced the lowest PGE recovery and highest Cr2O3 grade and recovery. The paper proposes possible reasons to explain these observations which may have significant importance for the operation of a PGM concentrator.

Jan 1, 2015

By O. Peters, D. Lascelles, R. Caldwell

Ageing tests on a crushed Cu-porphyry ore were conducted to assess the impact of sample oxidation on flotation performance. The objective of the testwork was to simulate ageing of ore that would be blasted through block caving but not milled for possibly several months. Ageing was performed in specially designed columns, using site and deionised water to keep the samples moist over the entire ageing period. Samples from each ageing interval (0, 0.5, 1, 2, 4, and 8 months) were examined for physical and metallurgical changes resulting from the ageing process through chemical analyses, size analyses, and batch flotation tests.

Jan 1, 2009

By Olaf Kessler, Jan Kalich, Michael Reich, Julia Osten, Uwe Füssel

Modern automobile bodies consist of different materials, e.g. aluminium alloys and high strength steels. Mechanical joining, e.g. clinching, is very suitable for joining aluminium and steel sheet. But clinching needs a sufficient ductility, which is no longer supplied by high strength steels. Laser-assisted clinching has been shown, to be able to join aluminium and high strength steel sheet successfully. Thereby the steel sheets were heated locally for short times to increase their ductility. Due to the thermal contact between steel and aluminium sheet the aluminium alloys also achieve a local short-time heat treatment. This fact may cause a significant impact, as aluminium sheet in automobile bodies is often used in T4 (or similar) condition and later artificially aged during the paint bake cycle. Aluminium alloys 6016 and 6181 have been short-time heat treated with heating rates up to some 100 K/s. Precipitation and dissolution processes have been monitored in-situ by calorimetry. Mechanical properties have been investigated on as well as after short-time heat treatment by deformation dilatometry. The results show, that suitable short-time annealing parameters during laser-assisted clinching can increase ductility and at the same time act as retrogression for aluminium sheets, resulting in increased strength after aging.

Jan 1, 2015

By Marcin Ziemski

This paper reports on an energy efficiency analysis completed as part of a research project looking at energy reduction opportunities in minerals processing operations. The plant discussed is a gold production facility owned by Newmont Gold in the Tanami region of central Australia. Due to its remote location, lack of nearby gas pipeline or power grid, the operation has been completely dependent on diesel fuel for its electricity generation and transport needs. The mine and processing plant use electrical power at a rate of 12MW to 18MW, resulting in a monthly electricity cost of over US$1.5M. The high cost of diesel combined with an impending power generation capacity shortage drove Newmont to undertake the energy efficiency study. An energy audit of the plant showed opportunities for significant energy savings through the strategic use of waste heat, fuel replacement alternatives and renewable energy sources.

May 1, 2007

By C. G. McLachlan

Abstract This paper deals with the application of the cyanide process to recover gold from a pyrite concentrate produced by means of differential flotation. This concentrate before cyanidation contains from 0.09 oz. to 0.14 oz. gold per ton, of which only about 60 per cent is recoverable. The rest is so fine that it remains interlocked in the pyrite and therefore is not acted on by the cyanide. The concentrate also contains about 15 per cent pyrrhotite and 0.4 per cent chalcopyrite, both of which are cyanicides. The cyanicidal effect of the pyrrhotite is inhibited by preacracing the pulp with lime, and maintaining a high lime alkalinity during cyanidation. The effect of the chalcopyrice is reduced as far as possible by removing those particles which are free by means of a further flotation step immediately prior to cyanidation. This involves the flotation of some very fine material. After nullifying as far as possible these two cyanicides, the concentrate is cyanided directly, i.e., without being roasted. This leaves the pyrite available for subsequent sale as a source of sulphur dioxide and sulphuric acid, and the entire residue of the cyamde plant, amounting to about 500 tons per day, 1s now being disposed of in this way. Prior to deciding on direct cyanidation, a number of laboratory roasting tests were made. These showed chat, 1f proper control were exercised, a better recovery of gold could be effected from the roasted product than by the direct method of treatment. The tests also showed that the capital cost o the plant would be much higher than that needed for the procedure adopted. The possibility of subsequently selling the pyrite for its sulphur content would also have been eliminated. Introduction A previous paper has described in considerable detail the application of the flotation process to improve gold recovery from Noranda's milling ore, and in so doing has covered the production of an auriferous pyrite concentrate. The present paper deals with the recovery of gold by cyanidation from that concentrate. This gold, though intimately associated with the pyrite, can, for metallurgical purposes, be considered as all occuring in the native state.

Jan 1, 1946

By H. O. Seigel, J. C. Gingerich, E. O. Köstlin

"To satisfy their continuing need to replenish or expand their ore reserves, mining companies are faced with the dilemma of arriving at a proper balance between the dual avenues of discovery through in-house exploration and of acquisition of properties that are relatively proven or are even in production. The returns from exploration activities may be spectacular, but are unpredictable. The allure of an acquisition lies in its promise of quick and risk-reduced addition to reserves. However, it is historically clear that quantum increments in shareholders’ values have arisen primarily through major exploration discoveries, rather than through major late-stage acquisitions. Late-stage acquisitions can prove highly profitable, sometimes based upon the planned use of superior mining or metallurgical technology, but more often occur as the result of unexpected windfalls. At the other extreme, they can become expensive failures through inadequate due diligence, or unforeseeable factors.Citing numerous case histories and industry statistics, it is concluded that a judicious combination of both exploration activity and the acquisition of prospects is the most advantageous strategy for adding new ore reserves. A skilled exploration staff is essential for success, be it through exploration discoveries or through opportunistic acquisitions, preferably at their early stages. In the future, it is anticipated that there will be fewer opportunities for acquisition because of reduced funding for junior exploration companies, leading to increased competition and higher costs for fewer properties, both in the advanced exploration and mining stages."

Jan 1, 2002