Investment opportunities and exploration service providers attract a global following

By Steve Fiscor, Editor-in-Chief

The Prospectors & Developers Association of Canada (PDAC) held its annual meeting in early March in Toronto. It is the premier event to learn about new discoveries and tools and techniques explorers use to make those finds. One of the largest mining-related gatherings, organizers said that more than 30,000 people attended this year’s event with 25% coming from outside of Canada. That tops last year’s figures of 27,000 and 22,000 in 2010.

PDAC recognized several individuals and organizations for outstanding contributions to and excellence in the minerals industry. The recipients were honored at an evening event March 5, 2012, at the Fairmont Royal York Hotel.

The annual PDAC exhibition and conference can really be subdivided into four areas: the Investor’s Exchange, the Trade Show, the Technical Sessions and the Core Shack. Both halls and the technical sessions were shoulder-to-shoulder at times and the Core Shack was bustling with activity too. Nearly 600 mining companies exhibited in the Investor’s Exchange, promoting themselves to potential investors, while 400 companies showcased equipment and services in the Trade Show. At the Core Shack, 60 companies were on hand with core samples and investors were scrutinizing the specimens. At the same time, more than 150 experts gave presentations related to prospecting, exploration and project development.

Toronto is arguably the best place to host a mining investment conference and in many ways PDAC is an industry leader. The Toronto Stock Exchange provides most of the mining-related investment capital. In addition to mining financiers, many mining companies and consulting firms call Toronto home. All of this activity during a few days creates a very healthy dynamic.

PDAC Outstanding Achievement Awards

PDAC awarded Gerald Panneton, president and CEO of Detour Gold Corp., with the Bill Dennis Award for prospecting success for a Canadian mineral discovery. He led a team that advanced the Detour Lake property in northern Ontario into a world-class, low-grade, high tonnage gold deposit. According to the association, Panneton spearheaded the initial acquisition and subsequent evaluation of what is now considered Canada’s largest undeveloped gold deposit. Recognizing the potential of Detour Lake in 2006, Panneton commissioned a large-scale drilling and re-sampling program. By the end of 2010, the project had proven and probable open-pit reserves of 14.9 million oz of gold. Detour Gold Corp. is now moving ahead with the development of the project.

PDAC selected Osisko Mining Corp. for the Viola R. MacMillan Award after successfully developing and bringing into production the company’s Canadian Malartic gold property in Quebec’s Abitibi gold belt. In November 2004, Osisko acquired the property, which had produced some 5 million oz of gold from 1935 to 1983 from four mines. A detailed compilation of the extensive historical database was followed by the start of a major drilling program in March 2005. The mine began commercial production May 19, 2011, and currently has an estimated 10.71 million oz in proven and probable reserves. According to the association, the company has been exemplary in its attention to community concerns and involvement throughout the development of the open-pit mine, which included the resettlement of more than 150 homes and the construction of five institutional buildings. PDAC also acknowledged that the collaboration of residents and the town council had been crucial to the success of the project as ‘best in class.’

David Giles, director of exploration for Mexican-based Fresnillo plc, received the Thayer Lindsley Award for mineral discoveries outside Canada. He led the Peñoles and Fresnillo Plc exploration teams that have seen considerable success in the number of their new economic gold and silver deposit finds in Mexico and Latin America. Most notable of these was the discovery of a new vein system in the Fresnillo district, leading to the opening of the Saucito mine in 2011 and consolidating Fresnillo as the largest silver district in the world.

The 2012 Distinguished Service Award was presented to Deborah McCombe. A long time volunteer and supporter of PDAC, she served as the association’s director from 1996 to 2011. Currently, she is executive vice president, business development for Roscoe Postle & Associates.

The Mining Association of Canada received the Environmental and Social Responsibility Award for its flagship initiative, Towards Sustainable Mining (TSM).

The Skookum Jim Award for Aboriginal Achievement was presented to the NUNA Group of Companies.

The Mine Training Society (MTS) received a Special Achievement Award for its work with Aboriginal people in the Northwest Territories.

Using Spectroscopy to Address Declining Yields

Today’s copper and gold mining production requires robust new technologies to increase declining yields. More metallurgists are turning to near-infrared spectroscopy to identify new deposits as well as to rapidly characterize and quantify mineral assemblages, both providing a useful exploration vector and assisting in resource evaluation and reserve definition.

Dr. Brian Curtiss, chief technology officer and co-founder of ASD, a global leader in high-performance analytical instrumentation solutions, discussed some real-world analysis applications at PDAC 2012.

ASD’s TerraSpec 4 line of mineral analyzers offers a rapid rate of data analysis and the ability to process more data in a given time. The use of NIR in mining and in particular, the launch of the TerraSpec, is creating a buzz among mine operators.

“We have a line of instruments designed to not only analyze the elemental abundance of ore, but the mineral abundance,” Curtiss said. “We have foundation applications in exploration and production. In exploration, the alteration minerals are used to indicate potential deposits. Alteration minerals form halos patterns around the deposits. If you are using the alteration minerals, you can see that you are getting closer to a deposit from a much greater distance than if you were using an elemental anomaly.”

On the production side, the interest shifts away from alteration minerals and patterns to worrying about the cost and the ability to recover the metals from the ore. At a copper heap leach operation as an example, the abundance of clays, particularly swelling clays that can destabilize an agglomerate, or other acid consuming minerals influence the costs and the ability to extract the copper, Curtiss explained. “Having knowledge of these factors, you can adjust the processes to better deal with the properties of the ore,” Cutiss said. A number of companies are using this technology to look at cuttings from blastholes to analyze properties and measure acid consumption.

In copper ore concentration, some minerals, such as talc, float along with the sulphides. If the mill could manage the abundance of talc, it could keep it below a threshold where it could add chemicals to suppress the talc to keep the grade of the concentrate higher, Curtiss explained.

The technology has been around since the 1990s, but the TerraSpec 4 has much higher sensitivities. “The higher sensitivities allow users to look at dark rocks, which were problematic in the past,” Curtiss said. “The other major change was with the software. We now have software that can deal with thousands of spectra during a core logging program. It processes the spectra in bulk and it provides visualization tools, not just for a single hole, but for across a series of holes. On the production side, we have software that rapidly converts the measurements from the instrument into a quantitative number that can be used to manage the ore processing.”

Managing Advanced Earth Science Projects

On the trade show floor, Geosoft was demonstrating the latest enhancements within its Oasis montaj and mapping software. The software system allows users to work efficiently with one software platform. It provides a scalable environment for efficiently importing, viewing, modeling, analyzing and sharing large volume geophysical, geochemical and geological data, all within one integrated environment. “What we have in common as geologists, geophysicists, and geochemists working in the exploration industry is that we are all dealing with a lot of data sets,” said

Dima Amine, technical analyst, Geosoft. “Working with geochemistry data sets, assay results, drill hole information, airborne surveys, magnetic surveys, etc., we face a lot of challenges organizing the data sets.” One of the biggest challenges, she explained, is the volume of data. Another challenge is multi-disciplinary data sets.

In addition to Oasis montaj, Geosoft gave a preview of what’s exploration professional can expect to see in 2012 with a continued focus on enriched 3-D visualization and analysis of subsurface structures. Other demos included Geosoft’s VOXI Earth Modeling service, which enables geoscientists to create 3-D models of the earth by applying inversion techniques to 2-D magnetic or gravity data.

Equipment for Tough Drilling Conditions

Boart Longyear is the largest provider of equipment and services in the global exploration space. The company’s drilling services business is the largest as far as size, rig count and revenue, explained Kevin Tomaszewski, director of global product management at Boart Longyear. “In products, we share the same strength,” Tomaszewski said. “Product innovation is our top priority, focusing on safety and productivity. We take intellectual property and trademarks very seriously. In 2011, we filed 210 patents and were awarded 89.

“Our vision is to continue to grow and continue to take market share,” Tomaszewski said. “We had a lot of success in 2011 and we believe we will see that again in 2012. We plan on launching up to eight new products this year.”

During PDAC 2012, Boart Longyear discussed three areas for growth: sonic drilling, diamond core bits and dewatering services. The company decided to use this year’s PDAC event to launch the LS600 sonic rig, support vehicle and sonic tooling. The system is ideal for drilling and sampling unconsolidated materials. It allows drillers to gather continuous and undisturbed core samples in varying and difficult ground formations. According to Boart Longyear, the LS600 rig delivers more accurate core sampling, less than 1% hole deviation, reduced waste, and faster penetration than conventional methods.

The company’s sonic program was developed over the last 20 years through the Boart Longyear Drilling Services division. “We have the largest sonic drilling fleet in the world and the most advanced technology,” Tomaszewski said. “We also have expert drillers. That’s one of the reasons we never released this as a product line and kept it close as core competency. Today, there are more entrants trying to get it right. We believe this is the right time to expand and commercialize the service.”

The technology incorporates sonic frequencies that match the resonant energy of the ground, allowing the core barrel to easily advance in unconsolidated and difficult overburden formations. During drilling, boreholes are cased continuously by first allowing the core barrel to advance into the substrate, followed by the outer casing. This technique allows for the accurate measurement of continuous in-situ (undisturbed) core samples, even in varying ground conditions.

The LS600 would work well for sampling tailings piles and heap leach pads. Drillers can gather accurate core samples twice as fast with Sonic technology and reduce waste by up to 80%, because no fluid, air or mud is needed. The LS600 can reach a drilling depth of up to 182 m (600 ft).

The system consists of a sonic head, the rig, and a support vehicle. The key component is the sonic head. Inside the sonic head, an oscillator (two large rotating weights) creates a resonant energy, which is transferred to a 150-Hz frequency. An innovative air spring system protects the rig from the extreme vibrations and redirects the energy down the drill string to the bit face. That combined with slow rotation of the drill string from the rig, allows excessive speed of core recovery. On top of that, the driller is managing the resonant energy for maximum penetration.

In traditional coring work, a drill rod is advanced with a core barrel. An overshot retrieves the core barrel. With the Sonic system, the core barrel is driven down and collects a sample, then a casing overrides it. No fluid is needed. The casing maintains hole integrity and prevents cross contamination. The drillers retrieve the sample (core barrel) and send it back down again. Samples can be gathered in three ways, it can be bagged (common), a carbonate liner can be used for more fluid samples, or a split barrel could be used for clays. The pullback is 7.5 tons and the maximum depth for a 6-inch head is 600 ft.

This process would be best compared with an auger or a probe. An auger, however, could deviate 10 ft on a 100-ft string, while a rotary drill could deviate as much as 60 ft over a 300-ft string. Augers can create a mess as it slings mud in sloppy conditions. The Sonic drilling process is well-contained, according Boart Longyear, and it keeps the job site clean and compliant.

The combination of the frequency with the rotation allows the Sonic drill to advance two times faster while recovering the samples. “The system provides superior information on unconsolidated, difficult ground conditions, such as sands, gravels and clays, bringing them up in their natural form,” Tomaszewski said. “You cannot drill these unconsolidated materials by conventional methods without mixing or destroying the sample. Reverse circulation would destroy it and an auger would mix it. Push probes are an option in this material, but probes can’t push through boulders.” The Sonic core samples range from 3 to 8 inches and boreholes sizes up to 12 inches.

Boart Longyear offers the Sonic Head Service Program, which provides a replacement head for the LS600 in the case that repair is required. The Sonic Head has advanced proprietary technology and Boart Longyear wants to assure it is working for their customers. “When the drilling crews encounter a problem, Boart Longyear will be prepared to quickly swap out the sonic heads,” Tomaszewki said.

Bits Engineered for the Hardest Conditions

Last year, readers might recall that Boart Longyear introduced the UMX Diamond Coring Bits. It introduced three bits: the SSUMX, 07UMX and 09UMX. At PDAC 2012, they unveiled the 10UMX, which has the “freest-cutting matrix” available, enabling it to penetrate the hardest formations, according to the company. “The 10UMX diamond coring bit completes the product line, which provides a bit for any type of ground condition encountered,” said Matt Baird, global product manager for Boart Longyear. “We have tested these bits in all regions and take great pride in providing drillers the most advanced line of diamond bits in the industry to maximize their productivity.”

UMX bits use advanced metallurgical formulas to provide increased penetration capabilities. Optimized life translates into less tripping and increased productivity. The bits rely on the Stage waterway design. The geometry of these windows sustains the integrity of the bit through the entire life of the bit, allowing for a variety of crown heights. A Twin-Taper design dramatically improves surface flushing, forcing debris through the windows while keeping the bit face clear and reinforcing the inner diameter.

“The UMX bits have received a lot of recognition within the industry for their performance,” said Baird. “These bits were designed for extreme performance, based on the Boart Longyear patented ultra matrix technology, which uses large synthetic diamonds. The versatility allows them to operate in varying ground conditions. The 10UMX was specially designed for the toughest ground formations.”

All of the UMX bits are offered in three crown heights: 12 mm, 16 mm and 25 mm. All of these bits offer Twin Taper windows to flush cuttings from the hole. The protrusions on the face of the bit, which is the Razorcut face design, allow these bits to track in the hole and maintain balance.

Dewatering to Reach Deep Targets

Last fall, Boart Longyear announced an expansion of its Mine Water Services. Pits are getting deeper and more miners are heading underground. Mine dewatering is big business these days. North America, as an example, has expanded its underground operations in the last 10 years. “Often-times, water has to be removed to access those deeper targets,” said Dale Johnson, operations director for global drilling services, Boart Longyear. “Our Mine Water Services segment focuses on near mine water control, which includes a number of different types of wells.”

Dewatering is not new to Boart Longyear. The company entered the dewatering business more than 25 years ago as a decentralized service that was provided by Lang Exploratory Drilling, Johnson explained. “The business has now been centralized within Boart Longyear and, even though the industry no longer sees the name, the group and the expertise still exists and they are the core of the extension of this business globally,” Johnson said. “Typically the wells that we will install would be water table monitoring from the beginning of mine life through closure. Then we drill wells for production water for mining and processing. And as the underground operations advance, we can provide boreholes for underground utilities to supply bulk materials, such as gravel and concrete. All of this requires a larger diameter deep hole and the expertise to keep them on target.”

As far as dewatering, Boart Longyear honed its craft in the Carlin Trend “That’s where the expertise was developed and now we are expanding into Peru, West Africa, South Africa, and West Australia [Pilbara],” Johnson said.

Boart Longyear approaches dewatering projects in three phases: Phase 1 (28 inches), Phase 2 (48 inches), and Phase 3 (60 inches). For Phase I work, they would use the T130A rig. Phase 2 would require the LR140A. Phase 3 would start with LR300 then advance to LR500 and LR700 rigs.

“The T130 is a versatile rig,” Johnson said. “It can be used for RC exploration work, water wells, and up to 20-inch boreholes. We build wells up to 14- to15-inch completed diameters. We expect the next phase to be much larger, moving into the 48-inch range, completing the holes in the 20- to 24-inch range. The depth of holes we are seeing is in the 300-m range.”

The second phase drill is a Boart Longyear drill produced in Salt Lake City. “The 140A was the ‘utility’ drill used for the Carlin Trend. Next step is LR300. We are building an LR500.” The product designation is the pull-back capacity in tons.

Single pass drilling is important for this process. Drillers want to be in the hole for a minimum amount of time to maintain the integrity of the hole. The quality of wells, Johnson explained, depends on the ability to put large tooling in the holes and drill straight holes.