Engineering & Mining Journal

FEB 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 29 of 75

EXPLORATION 28 E&MJ • FEBRUARY 2019 As digitization gathers speed throughout the mining industry, the exploration sec- tor's path forward seems likely to follow a route increasingly dictated by numbers. Recent industry announcements and re- ports from sources along the exploration spectrum — drilling service companies, junior companies and major diversified producers — point to a growing focus on achieving better metrics in practically ev- ery facet of exploration activity, at a lower cost and with greater accountability. That's because recent numbers aren't good. Over the past decade, major depos- it discovery rates in some major metal categories have dropped to zero, while the cost of exploration activities contin- ues to rise. Potential finds may be under deeper cover, located in more-remote re- gions, and as the recent abduction and killing of a Canadian geologist in Burkina Faso illustrates, rising occurrences of lo- cal conflict and political unrest heightens the risk level. Major producers are under pressure to replace reserves depleted by mining, but discovery rates and tonnag- es have dropped to levels that observers predict won't allow producers to maintain production levels in the not-too-distant future. Copper, for example, seems par- ticularly threatened by this trend. Kevin Murphy, senior research analyst at S&P Global Market Intelligence, noted in a recent report that "… increased cop- per exploration budgets have so far failed to identify more new discoveries, with only about 140 million metric tons (mt) of copper defined in 29 discoveries over the past 10 years, compared with 862.8 million mt in 191 discoveries in the pre- ceding 18 years." According to his report, current lead times for copper mines are about 20 years for an asset to advance from discovery to production: This time- line "implies that the reduced discovery rates of the past decade will limit the pool of projects that could come online in 15 to 20 years, and there could be a lack of quality assets available for development in the longer term." Needed: Data Diligence One of the traditional hindrances to ex- ploration success is that essential in- formation is almost always subject to interpretation, leading to subjectively based decisions and biases. "Important" numbers can range from stats as clear as grams-per-ton results from drill-core analysis to fuzzy estimates of project risk evaluations based on everything from a target's geological setting and miner- alization characteristics to commodity prices and country risk. Any significant item, or range of items, that is mistran- scribed, misinterpreted or simply missed can alter the overall picture available to an exploration team — and yet, the amount of data requiring analysis is growing at a remarkable rate. The latest technologies and instruments available for core logging, for example, can gen- erate as much as 122 gigabytes of data from a single, typical drill hole. Technological improvements in drill- ing and sampling tools, field data col- lection systems, global and local com- munications, computing power and data Strength in Numbers Exploration discovery rates are down, while budgets are up. Can technology, deeper research and new interdisciplinary alliances improve the numbers and reverse the trend? By Russell A. Carter, Contributing Editor As an example of the increasingly sophisticated software available for exploration project planning and design, Micromine's exploration module includes visualization, drillhole management, analytical and modelling tools, and statistical/geostatistical functionality. Shown here, the exploration module uses drill hole solid traces to visualize the location of high-grade ore within an orebody. The cylinders are colored and sized by grade. Source: Selected data from S&P Global Market Intelligence, 'Copper Discovery Rates Plummet.'

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