The Curious Case of Metal Bias
This article looks at how many exploration and mining companies fail to fully maximize their deposits. They often do this in two ways: by focusing on a single commodity/product and not thinking outside the box in order to maximize potential revenue streams from an ore body.
An observation I’ve repeatedly noticed in mining and exploration is some companies have a cultural mindset and conscious bias that deposits can only host a single commodity. This mindset is most often present with junior companies where there is a particular focus, fascination, or obsession on a single metal or product which results in bias toward that metal and away from potential by-products or secondary sources of revenue. Often we hear the phrase “We are a (insert commodity here)-focused company” which can translate to mean that the company doesn’t care about making money as much as producing a single commodity or product. In some cases, it may be warranted as I can appreciate pure gold companies purposely focusing solely on gold due to the valuation multipliers applied to gold company stock. Pure gold companies are an exception but still may learn something from this article.
There is certainly something to be said for a company to have a focused strategy, dedicated management team, and grit to stick to the plan over the long run. The market is full of unsuccessful companies that change their focus resulting in misallocation of capital, misled shareholders, and general dysfunction. That stated, a mining company’s focus and primary mission is to maximize profit from their foundation assets. In other words, they need to squeeze as much cash out of their rocks while minimizing capital expenditure. Mining investors should demand that management teams explore all options to increase revenue through potential by-products and ensure they are not leaving money on the table by biasing efforts on particular metals or products. The capital required may be too high to recover some elements but that doesn’t mean it shouldn’t be investigated and understood as price fluctuations and advances in technology may change the viability of recovering a co-product in the future.
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9 reasons for moving to Sunshine Coast QLD - That's where the next 80 million ounces of gold is sitting.
6 年Morning Erik, if you have been keeping track of my 69 LinkedIn Article/posts, you would have noticed ever time I mention the Mining Licences, that I would like to see ordinary 'Folk' anywhere in the world, own 100% - I always say Gold &/or Mineral. The reason being our early, first gold rush 'Diggers' not only produced 80,000,000 Ounces of gold but 1000s of tons of Mineral as well, after Wilfley Tables become available, 1000s of tons of Mineral Concentrate was collected and sent to Germany, Belgium and the UK, freight free, as it was a prized ballast cargo for the trip back home, it was then picked up, the gold recovered and returned to Australia - all 'FREE OF CHARGE' - thank you very much for the MINERAL, makes you wonder what they were after at that time, Eric we have an Antimony Lode that is acting more like a 'RARE EARTH' deposit - perhaps that was what they were after for there 'Space Travel'!
Scientist. Independent Consultant. Concentration & Separation of Minerals. Minerals Processing. Mining & Metallurgy
6 年Erik Ronald wrote "The Curious Case of Metal Bias": "There are several current studies by the U.S. Department of Energy and several universities looking at recovery of rare earth elements (REE) from coal waste. Eastern U.S. (Appalachian) coal ash contains recoverable concentrations of neodymium, europium, terbium, dysprosium, yttrium, and erbium. Some Appalachian coal ash contains over 600 ppm of total REE." More... They have a REE deposit in the USA with a very high REE content. The content of REO in Mountain Paz is 8-12 %. Why do not they develop it and other deposits? REE fall into the list of strategic and critical metals. Instead, they finance projects with a content of 600 ppm REE to create a new technology. Where is the logic? Ph.D. Natalia Petrovskaya https://gladiolus1.blogspot.cl/2018/05/how-to-make-them-put-metal-on-list-of.html
Scientist. Independent Consultant. Concentration & Separation of Minerals. Minerals Processing. Mining & Metallurgy
6 年Erik Ronald wrote "The Curious Case of Metal Bias": "That said, I was in Chile recently looking at some IOCG deposits and was surprised to find a company operating several IOCG’s focused solely on copper. Nothing against copper of course; but when your deposit hosts an average Fe grade of 40 % and consistently runs between 0.25-0.4 g/t Au and 2 g/t Ag a company should likely aim to maximize what Mother Nature provided." First, they write that they have 20-25% iron in the ore. Consider an example. After magnetic separation, La Planta Magnetita has the obtained iron concentrate with an iron content of 70 %. It's good. The concentrate comprises 1.87 % of SiO2 and 0.52 % of Al2O3. This is very bad. These are harmful impurities. In fact, the content of silicates will be much greater than in laboratory experiments. China refused to buy this concentrate with a high content of silicates. In reality, the problem of removal of silicates and aluminosilicates from iron concentrate has not been solved so far. Who will buy this concentrate from you? They write that they can remove silicates by reverse flotation. It's half true. The flotation has a problem. When adding a starch to the the flotation, the content of SiO2 in of iron concentrate is 0.8-0.9 %. If carried out flotation without the starch then content of SiO2 in the iron concentrate is 0.8-0.9%. Obviously, there is no effect from the use of starch. What happened? Why in both cases the content of SiO2 in the iron concentrate equally high and much higher than the required? Will they be able to solve this problem? Ph.D. Natalia Petrovskaya
Mine Exploration Project Northern Idaho
6 年I have been lectured on this. When we first started our exploration work at NVH in Idaho, people kept asking, “ so what are you after?” My response was always, “We don’t know yet”. “You have to focus on one model....” they would say. When you have a very excellent selection, you have to think that that’s the kind of problem you want. For example, we have what many Companies would consider nicely above cut-off grade mineralization. We could Mine for Ag/Mo/W/Zn/Pb/Cu and let us also consider that we have nice samples of Au and even assays of Pt/Pd (which are distal/disseminated). So taking care and not just focusing on one element, it leaves the door wide open for multiple possibilities. Let us not forget that when Silver was king before 1893, people were throwing out the gold into the dumps. Thanks for sharing a great perspective...
Bringing technology and innovation to mining to reduce its carbon footprint and gain trust with its stakeholders. Reducing fuel consumption and promoting ISR as the next generation extraction method.
6 年Indeed, mining companies too often think of themselves as single commodity focused. How many companies do you know that call themselves gold companies or copper companies or silver companies? Its as if its more about selling themselves to the stock market than maximizing shareholder return in the long run. Total net value of metals (and other commodities) should be the focus and not just the metal that can be "promoted" to raise a stock value.