Understanding the Mine Cycle

Discover

Mineral exploration in BC is a quest for discovery open to all adult citizens. Aboriginal prospectors, geologists, engineers and skilled technicians are contributing their talents to help discover the next generation of mines in BC. You don’t need to be a geologist or have a high-school diploma to join or support this search for new mineral wealth. All you need is determination, an appreciation of BC’s vast untapped mineral potential and the willingness to learn about the discovery process and the many high-tech tools and techniques used to achieve exploration success.

Before a mine can be developed, a mineral deposit of economic importance must be found. The first stage of this process typically starts with grassroots prospecting and sampling programs known as early-stage exploration. Once a promising mineral prospect is found, it is usually mapped, surveyed and drilled to determine its size and grade (mineral content) in a second stage known as advanced exploration.

Finding a mineral deposit with potential to become a mine is not easy and as a general rule of thumb, only one in a thousand prospects ever becomes a mine. Prospectors, geologists and junior companies rely on advanced technologies, high-tech tools and new geological theories to improve their odds of success.

BC is uniquely positioned as the home of more than 800 junior companies known for their exploration expertise and ability to raise venture-capital financing for a “high-risk, high-reward” industry. Other advantages are a favorable investment climate and highly prospective mineral districts under-explored by modern methods.

Modern Exploration

The discovery process is much different than it was in the 1800s and early 1900s, when “boot-and-hammer” prospecting in remote wilderness was the main technique used to find mineral deposits at or near surface. These pioneering prospectors were usually grub-staked by local merchants or a syndicate of risk-taking investors.

Today, prospectors have the benefit of many intellectual and technological tools to aid the discovery process. The Geological Survey of Canada and the BC Geological Survey offer a strong head start by providing reports and maps based on their extensive regional-scale reconnaissance surveys, which now usually include remote sensing data collected over large areas through satellite or airborne systems. This carefully collected geological, geochemical and geophysical information allows prospectors to select the most favorable areas for early-stage exploration.

After a favorable area of interest is selected, prospectors explore for mineralized rocks or boulders. While it is very rare to find outcropping mineralization, some spectacular mineral deposits have been found in recent years using old-fashioned prospecting methods, sometimes in areas where they were never expected to occur.

If no surface mineralization is found, a prospector’s next step is to find anomalies, any noticeably different or irregular feature in the earth’s crust that may indicate the presence of hidden mineralization. The least expensive method to achieve this goal is to collect samples of rock, till, soil, stream or lake sediments on a wide-spaced grid in hopes that some of the analyzed samples may contain anomalous concentrations of metals or chemical elements associated with sought-after type of mineral deposit.

A licensed prospector can then file claims over his mineralized showings or anomalies and try to sell or option the project to a junior company willing to carry out more advanced exploration programs. Prospectors often retain a royalty in order to receive a small percentage of the profits if their prospect is developed into a mine.

Advanced Exploration

Junior exploration companies take the mineral project to the next stage by gathering together all relevant publicly available geological, geochemical and geophysical data in order to plan an exploration program. A multi-disciplinary team will be assembled to manage the project led by a “Qualified Person” with relevant geological expertise.

Before work begins, company executives will meet with the leaders of First Nations communities to seek their consent for any proposed work programs within their traditional territories. This entrenched practice respects the aspirations of Aboriginal communities to benefit from any resource development on their lands based on the principles of “free, prior and informed consent” and shared progress and prosperity.

Initial ground work typically includes mapping to determine the geological setting of the property, geochemical sampling to confirm the anomalies, and airborne and/or ground geophysical surveys to detect magnetic, electromagnetic or other types of anomalies and potential target zones. Once the anomalies or drill targets have been outlined by geophysics or geochemical sampling, the next step is to drill some holes and obtain core samples to determine if mineralization is present.

A drilling company is hired to conduct the program using diamond drills or reverse circulation rigs, or a combination of both, on a grid-like pattern. Underground deposits are usually drilled on narrower spacings than large, continuous open-pit deposits. The core samples or drill cuttings are then sent to a laboratory for assaying to determine their mineral content. If the assays show good grades for the desired metal or mineral, drilling continues as it takes many holes — up to several hundred thousand meters of drilling — to define the size and grade of a mineral deposit.

After a deposit has been extensively drilled, an independent consultant is retained to prepare an initial resource estimate compliant with National Instrument 43-101 reporting standards. Until this requirement is met, the company cannot report a resource or the size and grade of its deposit to the public or its shareholders.

The mineral project is advanced to the development stage once the company is satisfied that the deposit has excellent potential to become an economic mine.

Mineral exploration in BC is not confined to grassroots projects. Some companies prefer to conduct “brownfield” exploration programs near known mines as certain deposit types tend to occur in clusters within a specific geological environment.

Operating companies typically focus most of their exploration efforts on expanding resources at existing mines or exploring for similar deposits on nearby properties.

Develop

Developing a mineral deposit into a potential mine is a lengthy and challenging process that involves a team of geologists, engineers, technicians, support staff and multi-disciplinary consultants. Development means more than proving up reserves and producing a positive feasibility studies confirming that the deposit is robust enough to become a mine. Community consultation and environmental and socio-economic studies are essential to demonstrate that the project can be developed without harming the environment and the sustainability of local communities.

A New Path Forward

Most of Canada’s historic mines were developed without rigorous environmental or social safeguards, a legacy that causes some Aboriginal communities to view new mine proposals with suspicion despite their considerable potential economic benefits.

Mining companies today recognize that they must earn a social license to operate and toward that end, consult with a broad range of stakeholders in the development stage in order to identify and address potential concerns as early as possible. BC projects face particularly intense scrutiny if they’re near sensitive wilderness or require new roads, bridges and power-delivery systems for their development.

Mine development in BC can take up to ten years or more and cost many millions of dollars because of the detailed technical, environmental and socio-economic studies now required to support mine planning and the permitting and review process. The best way for companies to gain support for their proposals is through respectful consultation and a socially and environmentally progressive development plan.

Technical Studies

An essential first step is to ensure that the mineral deposit is robust enough to justify the cost of mine development and construction, which can easily exceed $1 billion in remote areas. Extensive drilling programs are conducted over several years to change the status of resources to reserves that can potentially be mined at a profit.

To satisfy bankers and regulators, companies retain independent engineers to review their drilling results and calculate reserve and resource estimates. At this stage, engineers recommend the best mining method for the deposit, usually either underground methods or open-pit techniques, but sometimes a combination of both. Sites for processing plants and machine and maintenance shops are identified at this stage, along with carefully chosen sites for storing mill tailings and waste rock.

Samples from the deposit are sent to metallurgical consulting firms that conduct a series to tests to ensure that the desired metals can be extracted from waste rock in a mill or processing plant. Metallurgical consultants also recommend the processing method most likely to achieve the highest recovery of the desired metals.

An independent consulting firm also oversees preliminary and bankable feasibility studies that examine the proposed mine and related infrastructure, including the environmental and social aspects of the project. The preliminary study is an interim step to justify a more expensive full bankable feasibility study with updated capital cost estimates and projected output and economic rates of return.

The Environmental Review and Permitting Process

Environmental studies are so important to mine development that most companies start collecting baseline data to establish the state of the environment surrounding their projects as early as possible in the exploration stage. Soils, water, wildlife and vegetation, air quality and climate and areas of historical or cultural significance are the main areas investigated and documented. Environmental baseline studies are so detailed that they can take several years to complete. The information is used to guide project design and support the environmental review and permitting process.

Federal and provincial governments require that comprehensive environmental assessments must be prepared for all major mine proposals, examining everything from potential impacts on local communities, fisheries, waterways and wildlife to reclamation plans after mine closure, to name but a few. These documents are then submitted to various government ministries for review. A series of public hearings are then scheduled to allow stakeholders to comment on the mine proposal.

It is also now common practice in BC for resource companies to negotiate Impact Benefit Agreements (IBAs) with Aboriginal communities for projects within their traditional territories. The goal of these agreements is to ensure that jobs and training opportunities flow to local communities along with other economic benefits.

The permitting process and public hearings can take another several years to complete before permits are finally issued to allow mine construction. In some cases, permits aren’t granted because the technical or environmental risks are deemed to be too great. The costs of the environmental review and permitting process in BC are significant and can account for up to 25% of a project’s total estimated capital costs.

Mine construction can only begin after government agencies issue all necessary permits and the company has raised sufficient capital to build the mine. This phase can take several years to complete, depending on the project complexity.

Operate

Operating mines in BC range from small gravel quarries to one of the world’s largest open-pit copper mines. Many of the province’s 20 coal and metal mines are large or medium-sized open-pit operations with sizable work forces. Smaller underground operations employ far fewer people. But no matter the size or deposit type, BC mines are safer and more technologically advanced than most people realize.

Operating a safe, productive and profitable mine is the most rewarding stage of the Mine Cycle. To achieve this goal, operating companies must develop a mine plan designed to realize the deposit’s full potential without compromising worker safety or the environment. Engineers choose the safest and most efficient mining method for the deposit, depending on its size, shape and depth. As a general rule, low grade deposits are mined using high-volume open-pit techniques whereas more selective methods are used to maximize the value of low-volume high-grade deposits.

Miners follow mine-plan schedules as they extract ore from the host rock and haul it to a mill or processing plant. Mine geologists ensure that the area being mined is mineralized, as deposits are often displaced by folding or faulting. Engineers are involved too, and pay particular attention to pit-slope stability or rock stresses. Trained personnel provide essential services that keep mines safe for all workers.

Extracting and Hauling Ore

While no two mines are alike, miners today still rely on traditional techniques of drilling and blasting to extract the ore from the host rock, followed by mucking or hauling the ore to a mill or processing plant. The first step in most hard-rock mines is drilling, which involves drilling a pattern of holes designed to break the rock. Highly mechanized electro-hydraulic drills have largely replaced old-style units powered by compressed air. Once the blast holes are drilled, a blasting crew loads explosives into them so that each is fired in a sequence designed to break the ore.

In underground mines, the broken ore is hauled to surface, usually by load-haul-dump (LHD) machines. In some cases, the mined-out area is backfilled with waste rock or other material to provide structural support. Open-pit mines rely on a fleet of large and powerful haulage trucks and electric shovels to haul away huge volumes of broken ore mixed with waste rock.

Supporting the miners are operations and maintenance personnel who provide essential services, such as electrical power, compressed air, ventilation, heating systems, etc., and maintain the equipment that keeps mines running safely.

Along with traditional techniques, mines today use the latest technology to boost productivity and safety and reduce costs and operating risk. Some equipment can now be operated remotely in unsafe areas and powerful computer systems now control and monitor underground ventilation and heating systems. Laser instruments are routinely used to determine the location and size of underground excavations.

Open-pit mining looks simpler than underground mining, but is not without risk. Stability of the pit walls is a primary concern. Robotic surveying instruments and infra-red and laser technology are used to monitor the movement of rock slopes as mining progresses. To improve efficiency, large open pit mines have installed computerized dispatch systems for their fleets of large haul trucks and shovels

Safety is the top priority during the mining process and all mines in BC have training and accident prevention programs that are considered the best in the world

Recovering Metals and Minerals from Ore

Extracting ore from a mineral deposit is only the first step of producing minerals and metals. Long before mining begins, metallurgical engineers will conduct a series of tests on ore samples to determine the best and most economic way to recover the valuable metals and minerals locked up in the ore. A milling process is then designed based on the metallurgical characteristics of the particular mineral deposit. In some deposits, the metals or minerals are easy to recover. Others are difficult and require special pre-treatment processes. In most cases, milling begins with a crushing and grinding step to free the minerals. In the next step, the valuable minerals are separated from the waste through various processes. The most simple of these is gravity, used in some mines to recover free gold or to wash coal before transport.

Flotation is most commonly used to separate and concentrate a mineral of interest from waste rock, as well as from each other if more than one valuable mineral is present. The concentrates produced from the flotation process are then shipped to smelters where the metals are recovered from the ore minerals. Some copper mines produce pure copper using more recently developed hydrometallurgical techniques. Chemical methods are also used to produce gold bars (dore) at certain mines. These and other recent advances in metallurgical processing have made mineral deposits economic that once had little chance of production.

The metals and minerals produced by BC mines are transported by rail, road or ship to customers around the world. BC is Canada’s largest producer of copper, its only producer of molybdenum (used to strengthen steel) and the largest exporter of coal.

Minding the Environment

Mining companies must pay rigorous attention to the environment during the operations phase as they are monitored and regulated by government agencies and scrutinized by Aboriginal and environmental groups, the media and the public.

Mines by necessity produce waste rock and/or mill tailings that must be safely stored during mining and after closure. These disposal sites must be chosen with great care and are continually monitored to protect the surrounding environment.

Protecting wildlife, water quality and fisheries is essential as many of BC’s mines are located in remote areas near First Nations communities with traditional lifestyles.

Most mining companies today don’t wait for closure before starting reclamation programs aimed at restoring the site to as close to its pre-mining state as possible. It is now common practice for mined or disturbed areas to be reclaimed in stages during the operations phase through reclamation and re-vegetation programs.

How Supply & Services opportunities fit in the Mine Cycle

The Mine Cycle starts with Exploration, the process of finding a mineral deposit and testing it to see if it’s good enough to become a mine. An exploration company starts the process by hiring a geophysical firm or technical consultants to help define the drill targets. A drilling contractor is then hired to carry out the drilling program. If the site is remote, the company may hire a general contractor to set up a camp and an expeditor to bring in the supplies and equipment. In some cases, roads and bridges must be built to the exploration site, usually involving outside contractors. While there are hundreds of exploration projects, many are short-lived or seasonal.

Supply and service companies are essential as a mineral project moves into the Development stage. It can take ten years or more for a development project to become a mine, so larger camps must be set up where drilling crews and the team of technical and environmental experts conducting advanced work programs and feasibility studies can live. Once a production decision is made, a lead engineering firm is selected to oversee mine construction as well as the work done by dozens of sub-contractors who provide more specialized products and services.

In the third stage, Operations, mining companies will usually enter into longer term contracts with supply and service companies to secure and maintain the equipment and services they need to keep the mine running safely and efficiently. Maintaining inventory is essential as missing parts of key equipment can lead to stops in production which translate into lost profits. Operating mines must meet high environmental and safety standards, which provides opportunities for firms specializing in related products and services.

Opportunities during the final stage of the Mine Cycle, Restoration, are generally limited to reclamation and re-vegetation programs and monitoring of waste rock and tailings disposals to ensure they do not pose risks to the surrounding environment.

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