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Company service offering geared for juniors

JOHN PAUL HUNT 
Without junior mining companies understanding the uncertainty that the data might reflect, there is a risk of making suboptimum business decisions

JOHN PAUL HUNT Without junior mining companies understanding the uncertainty that the data might reflect, there is a risk of making suboptimum business decisions

12th July 2019

By: Mamaili Mamaila

Journalist

     

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While mining majors often have in-house exploration experience, juniors lack this experience and thus engineering consulting company SRK Exploration Services (ES) is increasingly providing advisory services, from strategic to operational guidance, to juniors, says SRK ES Johannesburg branch manager John Paul Hunt.

SRK ES was established in 2003 to provide services for early-stage junior and midtier miners. In close collaboration with its sister company SRK Consulting, the company provides full and innovative solutions for the exploration and mining industry to assist in adding value to projects quickly and efficiently and bringing projects into operation.

The company’s services include targeting and prioritisation, due diligence work, reconnaissance prospecting and exploration programme strategy and design, sampling and mapping, geophysical services, drilling management and programme reviews.

Target generation and mineral prospectivity modelling using modern digital processing technology is an exciting space where SRK ES is using differing and vast datasets to improve exploration success, Hunt explains.

Further, juniors often have a poor understanding of the lead time from exploration to mining and attempts to bypass this process often lead to challenges along the way or result in the need to redo work, he notes.

“Grassroots exploration can take between two to five years, or more. You have to factor in elements from area selection, mineral rights applications, and exploration and evaluation.”

To develop a project from the time of discovery to the opening of the mine can take up to ten years and, while some explorers “get lucky early on”, discoveries become increasingly deeper and under cover with the lead time to discovery often stretched even further, Hunt explains. Normally, the more marginal the grade is, the more the technical work required is.

As such, exploration strategies and budgets need to take this into account, and the need for better decision-making tools is even greater, he adds.

“The consequences of getting exploration wrong, from area selection to incorrect sampling and surveying, destroys the value of the ultimate discovery. In general, there is also a poor or insufficient understanding of the value and need for quality assurance and quality control throughout the exploration cycle, and this has bitten many companies before,” Hunt underscores.

Without junior mining companies understanding the uncertainty that the data might reflect, there is a risk of making suboptimum business decisions, he says, adding that there is an upfront cost to engaging exploration consulting services but this can improve exploration success and preserve economic value in the discovery.

SRK ES has several projects running concurrently, globally and across Africa. Some of its larger projects include a major drilling and evaluation programme for a hard rock ilmenite project and exploration for iron-ore – both in Egypt. The company has been involved with government-sponsored projects in Angola, Rwanda and Gabon, which are aimed at providing baseline work to promote junior investment.

In South Africa, it will also undertake the delineation, evaluation and, ultimately, feasibility of an unmined and at-surface phosphate deposit, in the Limpopo province.

Hunt states that this project is a great achievement, as it provides the possibility of development, poverty alleviation and growth in areas of the country where it is much needed.

Moreover, junior miners have a vital role to play in the future development of resources in Africa, in collaboration with the majors, venture capitalists and host governments, says Hunt.

“This model is well established and has played out successfully in many other jurisdictions. Not all juniors are able to make the successful transition from explorer to miner, and that is all right – there is value all along the value chain and companies should always be focused on their strengths,” he adds.

Juniors are in an exciting space, where they have the flexibility to take risks where a major could not, and have the potential to be at the forefront of some new discoveries across Africa, he asserts.

“While many consider mining to be a sunset industry, it will undoubtedly continue to be a major driver of the South African economy, with world-class deposits across a diverse array of commodities,” Hunt concludes.

Edited by Mia Breytenbach
Creamer Media Deputy Editor: Features

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