JOHANNESBURG (miningweekly.com) – The dynamics of the mining industry were changing, with big no longer necessarily being the best way on a go-forward basis, Auroch Minerals MD Dean Cunningham said on Tuesday.

The former mining analyst and investment banker said the trend going forward would be on turning small, flexible, cash-generating projects to account at a time of limited access to capital.

ASX-listed Auroch earlier this year raised $3-million to augment its cash of $5-million, to intensify exploration drilling at the Manica project on the 140 km Odzi-Mutare-Manica gold belt in central Mozambique, on the corridor that links Beira to Zimbabwe.

“It’s now all about free cash flow and flexibility, making smaller projects work and having a grouping of smaller-sized projects,” Cunningham told Mining Weekly Online (see also attached video).

Against the background of the number of big projects declining and becoming more challenging, mining companies needed to bring down operating costs in line with the project size and maximise returns.

Packaging high-returning small projects together could be the ideal.

“It’s all about making smaller projects work and putting these projects together,” he told Mining Weekly Online in the video interview.

The industry was moving into an era of big no longer always being beautiful, and a much stronger emphasis being placed on value rather than volume.

With the depletion of the large flat tabular orebodies, there was a new focus on the historical greenstone gold mineralisation.

“That’s where the industry’s going,” said the former TWP Finance CEO.

Given the patchiness of greenstones, the need for a high level of geological understanding was paramount.

Extensive drilling was thus being carried out at Manica, which Auroch acquired from the JSE-listed Pan African Resources, which continued to retain a significant shareholding in the project.

“We’ve drilled in the order of 7 400 m of diamond drilling since January,” Cunningham said, adding that the area’s historical grades were between 2 g/t and 7 g/t.

Auroch acquired three-million ounces of compliant resource from Pan African, an area in which, in its period of ownership, Pan African invested some $19-million, and into which Auroch had itself invested more than $2.5-million since January.