Ep 26. Junior Mining Companies – Exploration to Production

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June 7, 2019

Ep 26. Junior Mining Companies – Exploration to Production

Paul Stevenson is the CEO of Sego Resources Inc. and has lived and breathed exploration and mining since he was 15 years old when his uncle helped get him his first job. Sitting down with Paul was an opportunity to understand the exploration process step by step. The process of getting a mining claim from the exploration stage to a fully producing mine often takes years and hinges on so many factors including the economy, current markets, government, and local communities. Paul provided us with some common events and steps that are involved in making a junior mining company successful.

Getting into the exploration business as a geologist or prospector.

Young people coming in to the industry should understand that it is an extremely challenging job/career that includes long periods in the field away from family and is a boom or bust industry but it also offers a fulfilling and exciting way of life.

Prospector vs Geologist

Some prospectors have worked continuously in mineral exploration and do not have a geology degree but have been trained in the field in all practical aspects of exploration and are self-taught in the academic side. Exploration geologists are scientists who use their intricate knowledge of the earth’s surface to make decisions as to the probable location of mineral deposits for extraction purposes.

Exploration and Acquiring a Claim

Exploration is the search for and development of projects prior to mining and geologists. The starting point is to find a mineral prospect that is worth further study.  These prospects are either newly discovered by Prospectors or Prospector Geologists or older prospects that are worth reviewing utilizing today’s geoscience and in many cases are minerals that now have enough value to perhaps be mined.

Prospectors start looking in an area that is conducive, geologically, to the type of minerals and type of deposit that we would like to locate.  This is done by researching the latest geological maps and studies.

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Staked vs Unstaked Claims

There are many claims staked in the best known areas and the Prospector must locate unstaked areas or option or purchase already staked claims.  To locate the area of interests companies use testing of stream silts from their own testing or from government surveys, soil sampling, review of public geophysical maps and geological mapping.

Social Responsibilities for Junior Mining Companies

Once you have chosen an area to work there is a social side that should be started before you begin exploring the claims.  First you want to contact the surface rights owner if there is one and the local First Nations. Early contact can prevent future misunderstandings and enables the explorer to begin the process of earning a social licence to mine.  You may only have an idea or target but planning for the end game starts now. In the case of a company it is always best to develop a Memorandum of Understanding with the First Nations who live in the area. It is their Traditional and historical territory and anything you do to affect where they have always lived and will continue to live and must be cleared with them first.  

Mapping or Remapping out the Mining Claim,

The very first step in exploration is preparing a map that is on a workable scale that can be used for every step of exploration and also can provide locations where bedrock outcrops.  Companies like Sego Resources not only use an orthophoto prepared from publicly available air photos but also fly Lidar which gives accurate topography.

Soil Sampling

Once a map is produced soil sampling surveys can begin.  Soil samples are taken at approximately 50 metre spacing.  They are taken from about 6 inches in depth and placed in a kraft paper bag with their grid location marked, dried and analyzed at a laboratory.  A map is then produced for each element and the targets are overlapping elements. This gives targets to work within.

Geological Mapping

Following soil sampling the focus then turns to geological mapping of the property which entails searching for where the underlying rock out crops through the till and soil.  Sego as an example is looking for copper-gold porphyry which can be open pit mined. It is desirable to find copper or gold out cropping but usually the gold is tied in with the copper and the mineralized zones are usually not as hard as the surrounding rock and therefore covered with glacial till.  With this type of deposit alteration minerals help to vector in such as potassium feldspar and porphyry intrusives. At each phase updates are made to the geology map.

Microscopes and Acid Testing

Thin sections are taken from outcrops, trenches and from diamond drill holes.  These are rock samples cut so that they can be reviewed and photographed with a very powerful microscope.

Thin section work is done often as is a staining program where rocks are etched with very powerful acid and sodium cobaltinitrite is added which will turn the K-spar, or Potassium Feldspar yellow.  The K-spar is a very important alteration mineral in the search for copper-gold porphyry (open pittable, large tonnage, low grade copper deposits).

Percussion Drilling

An inexpensive drilling technique is percussion drilling.  Percussion drilling does not give core or solid rock samples like diamond drilling but rather chips that can be methodically sampled and mapped with a microscope.  They can be assayed to give us the content of copper, gold, and silver.

Percussion Drilling normally is done to a depth of 50 to 100 metres, this gives a look at the mineralization and alteration and targets to deeper drilling.

Diamond Drilling

All of the preliminary work leads to diamond drilling.  The bit of the drill uses diamonds as a cutting edge hence the name.  Diamond drilling provides core samples, solid sections of rock so that we can more easily map and identify the rock and minerals. The core is mapped (logged) and split with a saw with one-half of the core going to the assay lab and one-half returned to the box for later reference.

Reviewing Data

Constant review of data is very important so that new results can bring an overall new idea or ideas.  It is therefore very important to keep data in a digital format and well documented so that new data can be entered and recovered.  Drilling generates a huge amount of data and all of it is useful as long as you can find it and work with it.

Selling of a claim to a large mining company

The goal of most junior mining and exploration companies is to ultimately get a deal with a larger outfit that can take their mine to full production. These types of deals are done in many different ways. Some large mining companies will buy large amounts of shares in the junior company to fund further exploration. Some will purchase the entire claim and take full control. Others buy majority shares but the junior retains a percentage in the hopes the mine will one day produce high profits.

Summary

Mining is a notoriously boom and bust and industry. Many factors contribute to the cycles. Since 2008 exploration companies have been experiencing an abnormally long down period. However with electrification, the demand for metals and minerals will only increase. It would not be a surprise to see the long downturn followed by a historically long boom.

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