Canadian Mining Journal May 2020 by The Northern Miner Group

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MAKING THE MOST OF YOUR DATA

EXPLORATION AND AI RULES OF THUMB IN COSTING BEST PRACTICES FOR A PANDEMIC

MAY 2020 | www.canadianminingjournal.com | PM # 40069240

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CANADIANMINING

MAY 2020 VOL. 141, NO. 4

JOURNAL

DIGITAL TECHNOLOGY

14 How artificial intelligence is being used to speed up the exploration

process and improve the odds of success.

CMJ

19 Fortinet Canada’s Graham Bushkes shares four ways miners can reduce their cyber risks.

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22 CMJ speaks with Lorraine Howell, VP of innovation and continuous improvement for Illumiti, on how ERP systems can aid miners’ digital transformation processes and help them through the pandemic. CANADIAN MINING JOURNAL

FEATURES

28 CostMine investigates how well “rules of thumb” used in mining really work, focusing on conveyor costs.

32 Miners develop best practices for operating during a pandemic.

VENTILATION

37 ABB discusses the advantages of ventilation on demand.

DEPARTMENTS 4 EDITORIAL | Will the pandemic drive digital adoption?

6 LAW | Carole Gilbert of Norton Rose Fulbright discusses how miners can manage supply chain risks related to COVID-19.

8 CSR & MINING | Carolyn Burns of the Devonshire Initiative outlines the

different ways miners can be part of a collaborative response to the pandemic that will benefit communities.

10 IN MY MINE(D) | Andrea Lekushoff, president of Broach Reach Communications advises on the essentials of communications planning during the ongoing pandemic. 12 FAST NEWS | Updates from across the mining ecosystem.

43 ON THE MOVE | Tracking executive, management and board changes in Canada’s mining sector.

ABOUT THE COVER

45 UNEARTHING TRENDS | EY’s Jon Wojnicki on steps companies can take to succeed through the next stage of the pandemic and beyond.

Coming in June/July Canadian Mining Journal looks at reclamation and closure, and mining in the Prairies. Plus our semi-annual Equipment Maintenance & Repair supplement.

This month’s cover provided by Sandvik.

For More Information

www.canadianminingjournal.com MAY 2020

Please visit www.canadianminingjournal.com for regular updates on what’s happening with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com

CANADIAN MINING JOURNAL |

FROM THE EDITOR MAY 2020 Vol. 141 – No. 4

CANADIANMINING Will the pandemic drive digital adoption? Alisha Hiyate

very business that has been able to remain open through the COVID-19 pandemic has had to find new ways of working. For many of us, that’s meant working through technical challenges of remote access while also finding a way to manage family demands such as child care and/or home schooling. Remote work isn’t an option for most mine operations staff. Mining companies are used to adjusting on the fly to industry shocks – they have plans to deal with changes in commodity prices, sudden policy changes, and political crises in jurisdictions where they are active. But the pandemic has thrown the industry some curveballs. One of the things that miners hadn’t considered in their crisis management plans is the challenge of physical distancing at operations. Guided by advice from health authorities, the industry has collaborated widely to come up with best practices to protect their employees and the communities in which they work, including the use of PPE where physical distancing isn’t possible. (see page 32). In the absence of a vaccine, testing will also become an important tool, as underlined by an outbreak at Fortuna Silver Mines’ Caylloma mine in Peru in late April. The company reported six workers – all asympomatic – had tested positive for the virus. Meanwhile Barrick Gold has invested in 800,000 antibody tests, secured from multiple vendors, and Agnico Eagle Mines has started a pilot project for a virus test that can produce quick results to screen workers at its Nunavut operations. That brings us to the theme of this issue – digital technology. With the disruptions caused by the pandemic, mining suppliers and service providers have noticed that digital technologies are taking on an added shine. The pandemic is underlining the importance of the mining sector’s ongoing implementation of digital technologies, said Shannon Katary, marketing manager for Lively-Ont.-based Maestro Digital Mines in a recent interview with www.canadianminingjournal.com. “This crisis has forced companies to realize how important it is to make sure that they can get their data in real time – there is no room for delay now,” Katary says. And the importance of digital technology doesn’t just apply to mining operations. Companies providing exploration services and technology that incorporate artificial intelligence and automation, such as Kore GeoSystems, are having a lot of conversations around the ability to do remote work and Cloud-based software that enables people to collaborate from different locations (see page 14). “Because our software can work from anywhere, our phone’s been ringing off the hook,” says Vince Gerrie, CEO of Kore. “Major mining companies are calling us and saying, ‘Hey, our geologists are working from home and they’re not allowed to go in the core shack. Can we upload a bunch of images to your software so they can work remotely?” He adds: “That remote capability is much more important now than it was a month ago – the fact that you could possibly rethink the way you deploy your geologists.” Because of the disruption they bring, crises can bring long-term positive changes. Who knows what better ways of working miners could uncover during this one that CMJ will long outlive the pandemic.

4 | CANADIAN

MINING JOURNAL

225 Duncan Mill Rd. Suite 320, Toronto, Ontario M3B 3K9 JOURNAL Tel. (416) 510-6789 Fax (416) 510-5138 www.canadianminingjournal.com Editor-in-Chief Alisha Hiyate 416-510-6742 ahiyate@canadianminingjournal.com Twitter: @Cdn_Mining_Jrnl

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News Editor Magda Gardner CANADIAN MINING JOURNAL mgardner@canadianminingjournal.com Production Manager Jessica Jubb jjubb@glacierbizinfo.com Art Director Barbara Burrows Advisory Board David Brown (Golder Associates) Michael Fox (Indigenous Community Engagement) Scott Hayne (Redpath Canada) Anthony Moreau (Iamgold) Gary Poxleitner (SRK) Manager of Product Distribution Jackie Dupuis 403-209-3507 jdupuis@glacierrig.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Sales, Western Canada George Agelopoulos 416-510-5104 gagelopoulos@northernminer.com Toll Free Canada & U.S.A.: 1-888-502-3456 ext 2 or 43734 Circulation Toll Free Canada & U.S.A.: 1-800-387-2446 ext 3505 Group Publisher Anthony Vaccaro Established 1882

Canadian Mining Journal provides articles and information of practical use to those who work in the technical, administrative

and supervisory aspects of exploration, mining and processing in the Canadian mineral exploration and mining industry. Canadian Mining Journal (ISSN 0008-4492) is published 10 times a year by Glacier Resource Innovation Group (GRIG). GRIG is located at 225 Duncan Mill Rd., Ste. 320,Toronto, ON, M3B 3K9. Phone (416) 510-6891. Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved.The contents of this magazine are protected by copyright and may be used only for your personal non-commercial purposes. All other rights are reserved and commercial use is prohibited.To make use of any of this material you must ﬁrst obtain the permission of the owner of the copyright. For further information please contact Robert Seagraves at 416-510-6891. Subscriptions – Canada: $51.95 per year; $81.50 for two years. USA: US$64.95 per year. Foreign: US$77.95 per year. Single copies: Canada $10; USA and foreign: US$10. Canadian subscribers must add HST and Provincial tax where necessary. HST registration # 809744071RT001. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-387-2446 ext 3505; Fax: 403-245-8666 ; E-mail: jdupuis@jwnenergy.com Mail to: Jackie Dupuis, 2nd Flr. 816–55th Ave. N.E. Calgary, Alberta T2E 6Y4. We acknowledge the ﬁnancial support of the Government of Canada.

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LAW

Building sustainable mining supply chains: Lessons from the pandemic By Carole Gilbert

he COVID-19 pandemic is raising questions about risks in supply chains in all industries. For mining companies, where operations are not temporarily shut down to comply with government directives, or when restrictions relax, success for the remainder of the pandemic may very well depend in part on the ability to continue to source the fundamental equipment, materials and services required to continue the exploration, development or operation of their projects. As many have experienced over the course of the past few weeks, some suppliers are ﬁnding it challenging to deliver and, in extreme cases, are being forced to breach their contracts or declare force majeure. A robust supply chain is clearly a key contributor to business resiliency for mining companies when major unpredictable events such as the current COVID-19 pandemic arise. The pandemic has exposed the weaker links in the supply chain risk management practices of companies, with the reliability of both miners and their suppliers largely dependent on their ability to adapt to the circumstances and continue to deliver while protecting the safety and human rights of their employees and other stakeholders. Supply chains are at risk, and front and centre in all of this is the risk to the health and safety of workers and the communities in which mining companies and their suppliers operate. Long-term business resiliency requires good management of systemic sustainability risks The goal of good supply chain risk management is to make the unpredictable slightly more predictable and manageable. Good planning also can make the boundaries of any given crisis slightly easier to work within and reduce the overall impact on the business. The pandemic has shown that sustainable businesses are more resilient to crises, as they are better prepared to weather the effects and will also bounce back more quickly when the storm has passed. Whether the unexpected crisis is a recent headline topic, such as COVID-19, the “Me Too” movement or modern slavery, or one that has been on the radar much longer such as climate change, labour disputes, regulatory change or environmental liabilities, companies need to plan and be ready to withstand the next big challenge so they are not caught off guard. Also, investors are increasingly considering environmental, social and governance (ESG) systemic risks in making investment decisions and are demanding more disclosure to assess whether risks are being managed effectively by companies. 6 | CANADIAN

MINING JOURNAL

Fast forward to the next crisis, what can be done differently? Companies need to have the right tools at their disposal to assess the sustainability risks posed by their suppliers and the right governance framework in place to mitigate those risks. This means doing ESG due diligence before entering into a supply relationship to assess the risk and selecting suppliers on the basis of the sustainability risks they pose and in light of broader risk management strategies. It also means mapping the supply chain to improve visibility of the sustainability risks posed by current suppliers. Asking suppliers to complete questionnaires can serve as a good starting point and there are emerging technological platforms available to assist in integrating and analyzing the data collected. Implementing the right framework An effective governance framework should be driven by a carefully tailored Supplier Code of Conduct addressing the most salient risks identiﬁed in the supply chain. The way the code is drafted is important, as the adoption of voluntary codes or standards can affect legal liability for companies. It is important that the Supplier Code of Conduct be used as a tool in the overall risk management process and not just sit on a website. Companies should prepare contractual provisions implementing the code into formal contractual arrangements that not only allocate risk, but also provide the opportunity for ongoing tracking and monitoring of supplier performance. To mitigate legal risks, initial and ongoing due diligence efforts are best undertaken using legal privilege wherever possible. Successful crisis management and good governance go hand in hand. Allocating the resources to proactively work with suppliers and implement corrective action plans to ensure that any sustainability risks identiﬁed are appropriately managed is a worthwhile investment, as the costs of a crisis tend to vastly exceed those of its prevention. COVID-19 will accelerate the transition towards more sustainable supply chains and mining leaders need to move CMJ quickly to stay ahead of the curve. CAROLE GILBERT is an associate practicing corporate and commercial law at Norton Rose Fulbright’s Montreal office.

www.canadianminingjournal.com

APRIL 2020

CANADIAN MINING JOURNAL |

CSR & MINING

How miners can be part of a collaborative response to COVID-19 By Carolyn Burns

anaging the spread, treatment and long-term impacts of the novel coronavirus is a global issue. National, regional and local governments are at the forefront of the response. But NGOs and mining companies are uniquely positioned to work with governments and take a leadership role in addressing COVID-19 in the countries where they work. The Devonshire Initiative (DI) is a multi-stakeholder forum of non-proﬁt organizations and mining companies. We believe that cross-sector collaboration is an important part of driving positive development outcomes in the mining context. Following the outbreak of COVID-19, DI members shared their response plans through a survey and series of discussions. For most members the immediate response focused on the health and safety of employees and following government requirements and action. This included shutting operations, repatriating staff, encouraging physical distancing, or following quarantine requirements. Best practice with previous pandemics and emergency response clearly indicates that a collaborative approach is essential to limiting the spread of COVID-19 and to treating people who have become infected. A collaborative approach will also be required to rebuild social and economic systems when COVID19 has been brought under control globally. Following their initial response, both mining companies and NGOs are ﬁnding opportunities to collaborate to promote prevention, support treatment, and contribute to rebuilding social and economic systems impacted by COVID-19. Collaboration can take different forms and focus on concurrent activities such as data and information sharing, collaborative response planning, and formal partnerships and joint ventures to implement responses. Internal collaboration Internal collaboration includes all functions/departments in an organization’s COVID-19 response. Some examples include a multi-disciplinary task force where department heads are represented and daily communications flow down to employees and external stakeholders. Department heads are responsible for working within their department and across regions to feed back information and implement the response plan. Peer-to-peer collaboration Peer-to-peer collaboration is between organizations in a similar sector or industry. At this point, most examples of peer-to-peer 8 | CANADIAN

MINING JOURNAL

collaboration in the mining sector are based on learning and sharing ideas. In some cases, this collaboration has been facilitated by industry associations and established peer networks, or spearheaded by individuals. For example, in March, the independent Synergy Global Consulting, the Wits Mining Institute and Global Compact South Africa began hosting regular webinars for social performance practitioners to share lessons learned and concerns. Industry associations have also helped with in-kind support to government health authorities. Companies in South Africa are also considering how they can co-ordinate in speciﬁc communities and provinces where they operate. Community-led collaboration Community-led collaboration is guided and directed by community leaders and priorities. Where relationships with communities are well-established, companies and NGOs should prioritize community-led responses, which are more likely to be effective as communities better understand their own needs and challenges. Many mining companies and NGOs have experience with community-led initiatives. Community-led collaboration is speciﬁcally important when designing relevant approaches for: w Social distancing requirements, sensitization and education; w Developing plans to ensure communities have food security, shelter and access to sanitation; w Sharing information, developing community databases to identify vulnerable groups and tracking experiences with the virus; w Managing treatment and access to care; and w Planning for appropriate and safe burial and funerary services. The collaborative effort from the three Tahltan Nations and Newcrest Mining in British Columbia is a good example of community-led collaboration. Together, the Indigenous governments and mining company made plans related to medical support for three communities, mining operations at the Red Chris joint venture and employee rosters, access to groceries and health supplies for the Tahltan communities, and a joint working group for future decisions. (Read more at Tahltan.org). Both mining companies and NGOs have established engagement practices with mining-impacted communities. However, most dialogue and discussion mechanisms rely on in-person connections. Both mining companies and NGOs are looking for innovative ways to engage with community stakeholders while www.canadianminingjournal.com

respecting physical distance and quarantine requirements. Where communities have access to social media, Facebook and WhatsApp have become central tools for both sharing information and driving dialogue with the community. Cross-sector collaboration Cross-sector collaboration is between organizations from different sectors. This can include collaboration between mining companies, NGOs, local governments and community organizations, regional and national governments and international organizations (for example, the World Health Organization or UN agencies). This can also include collaboration with other industries, including other natural resource development companies, as well as health providers (pharmaceutical companies, medical supplies etc.) and mineral end users. At the time of writing, most cross-sector collaboration related to COVID-19 is based on information sharing and ﬁnancial donations in order to support the local organizations that are best placed to drive the response. For example, Kinross Gold has donated approximately $1 million across all sites to facilitate improved testing, provide medical supplies, improve health infrastructure, support local businesses and help vulnerable groups. Kinross has partnered directly with government health authorities, with mining industry associations, community partners, local businesses, schools and individuals. The company is actively working on a longer-term strategy looking at continued response plus eventual recovery, with lines of action likely to focus on health and local economic reactivation.

However, many Canadian mining companies and NGOs are interested in methods to drive a more coordinated cross-sector collaborative approach in order to: 1 Follow a joint plan or road map that can inform an organization’s response. A regional plan would ideally be led by government bodies, including health authorities. It would clearly identify the resources needed and co-ordinate private and NGO responses. It would also establish hubs for organizations to share and receive information and data. 2 Leverage resources and limit overlap. Organizations are looking for direction and opportunities to utilize their supply chains, transportation networks, and warehouses to deliver health and medical supplies as well as other essential services; utilize under-used resources such as empty mine camps and spaces for hospital services; re-tool operations to develop health and medical supplies (sanitizer, PPE etc.); and share prototypes for required health and medical supplies. A co-ordinated and transparent response is required to prevent and treat COVID-19 and rebuild our social and economic systems once we have contained the virus. Both mining companies and NGOs have many resources and assets that can be used and should seek out collaborative methods for their COVID-19 responses in order to deploy those resources effectively and to be able to support both employees and communities. CMJ CAROLYN BURNS is the executive director of the Devonshire Initiative (www.devonshireinitiative.org), a multi-stakeholder forum of non-profit.

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MAY 2020

CANADIAN MINING JOURNAL |

IN MY MINE(D)

The next phase of COVID-19 communications: It’s time to listen By Andrea Lekushoff

s Canadian mining companies rushed to respond to the COVID-19 outbreak to protect their workers and operations, many dusted off their crisis communications plans and realized they hadn’t accounted for a possible pandemic. And yet mining leaders have done an incredible job of figuring this out as they went, striking a balance between decisiveness and empathy as they helped guide their employees through massive upheaval. In mining, of course, most people can’t just work from home. Many mines have scaled back production or transitioned to care-and-maintenance operations with a small number of staff. When we emerge from this crisis, demand is sure to surge, and mining companies that have maintained good relationships with their employees, as well as their customers, vendors and partners, will be in the best position to respond – so communication during this time is critical. COVID-19 crisis communications best-practices checklist Leaders play an important role in providing accurate information while also reassuring people and containing panic. Keeping employees, customers, vendors, and partners informed has to be a top priority as we all work to contain the virus. If you’re not already doing this, here are some best practices to consider:

somewhere that everyone can access. Update your company intranet with current information and FAQs, and advise your employees to consult it often. Communicate frequently: Consider communicating with 5updates, employees weekly, at a bare minimum, with the latest to reach those who might not regularly consult other

sources. If you have a lot to communicate, consider twice-aweek or daily communications. And mix up your media, using video whenever possible to make it more engaging and personal.

your people to stay connected and engaged: Use 6themEncourage technology to bring your people together, encouraging to connect with one another for support. Set the tone from the top that virtual happy hours, online events, conference call bingo, or video coffee meetings are actively supported.

Keep external stakeholders informed: Use your company 7becomes webpage to update stakeholders as often as new information available, and use email for updates that affect them directly. Address difficult topics sooner rather than later, approaching them from a position of transparency and care. This will help protect your relationships and even make them stronger as the crisis subsides.

Focus on empathy. Remember that your employees and 1families stakeholders are primarily worried about themselves, their Be proactive by preparing for various scenarios in advance: and their communities, and then their colleagues and 8 It’s hard to predict what’s going to happen in the next few companies. Let them know that you understand their priorities weeks and months. But you can imagine possible scenarios and that you’re making business decisions accordingly.

(such as additional layoffs or closures) and develop messaging in advance, so you’ll be prepared should they become reality.

a centralized crisis-communications team: Creating 2ant,Establish a group with clear ownership for communications is importLive your brand values, but study your competitors and othand it should include the most senior people in your com- 9 ers: Sticking to your company values is important; your pany. They should meet regularly to discuss what’s happening employees need to see that your actions and communications and adjust plans and tactics as needed. Make sure the organization knows that this group is the trusted source of information.

Assess your stakeholders: Every group has different interests 3at different and needs, and information is important to different people times. Figure out the best way to keep each group informed – so they can help you stay in business.

a Q&A list: Answer all of your employees’ ques4 Maintain tions honestly and openly and make those answers available 10 | CANADIAN

MINING JOURNAL

are consistent with those of the past. But you should also pay attention to what other companies are doing. As much as possible, aim to be an industry leader, but you can also learn a lot from other organizations. Now is the time to listen and get personal Now that we’re several weeks in, how do leadership communications need to evolve? An uncertain future still looms. What do you say to your employees when you can’t predict what will happen? www.canadianminingjournal.com

The answer is that after weeks of communicating to employees, now is the time for mining leaders to listen. Your employees have legitimate fears about their own safety and that of their families and colleagues; thinking of going back to work – in confined spaces, isolated communities, or shared facilities where social distancing is impossible – could be raising anxieties in ways you haven’t anticipated. I’ve been advising my clients to use the next couple of weeks to survey employees about how they’re feeling, what’s working and what’s not, and what help they need. Consider holding virtual coffee meetings with groups of ten to fifteen people, to let them see your concern and open yourself to theirs. Listen with compassion and put yourself in their shoes – and don’t be afraid to get personal. Ask them point-blank how they feel about venturing back into a regular work schedule. Find out what measures you can put in place to help them feel more comfortable and safe right now or when they are back at work. Inspire your team and highlight the good you are doing While you’re at it, find ways to inspire your teams. Your role may not have been to inspire people in the past, but these are different times. Particularly if this crisis goes on longer than hoped, your people will look to you for inspired leadership to help them get through it. Be sure to highlight the good you’re doing. Some companies, like mining contracting and engineering firm Redpath Canada, have donated personal protective equipment (PPE) to local

health authorities, while Vale Canada has launched a $1-million challenge to spur innovative COVID-19 solutions. If your company is doing something similar, share that information externally via the media, social media and your website, to demonstrate your community leadership. And share it internally, which will help employees feel good about where they work. Even better, solicit employees’ suggestions. People like to know their ideas are being heard and activated. The fact is, we’re not likely to get an instant “all-clear”; instead, there will be a gradual, uneven transition. Through our collective efforts, infection rates will likely slow, and our healthcare system will find improved ways of managing and treating patients, but the virus is not expected to disappear completely. Many employees will understandably be left with anxiety about venturing back into any kind of “normal” working life. Employers need to tread carefully, respecting their employees’ individual situations and, importantly, their individual fears. That’s why listening to your employees now is critical. As soon as this is over, you will need employees who are ready to jump back into their roles to support the economy’s and your business’s resurgence. It’s critical to seek their perspectives, to learn what they need to get through this, to inform your strategy and help to you pivot your approach as we all emerge into a new normal. CMJ ANDREA LEKUSHOFF is president of Broad Reach Communications, a Toronto-based PR agency specializing in crisis and reputation management, corporate communications, brand building and executive profiling. She can be reached at alekushoff@brpr.ca.

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CANADIAN MINING JOURNAL |

FAST NEWS • SAFETY |

Updates from across the mining ecosytem

IDS GeoRadar and Worldsensing launch mine monitoring system

orldsensing and IDS GeoRadar, both in the monitoring technology space, have cooperated to launch a comprehensive mine safety monitoring system. The integrated system will be the first in the world to offer surface, sub-surface and geospatial monitoring in a single package, simplifying contracting and deployment. The software will exploit Worldsensing’s Loadsensing internet-of-things (IoT) wireless monitoring system to reduce the costs and delays associated with traditional wired or manually read sensor networks. The joint solution will simplify data management through IDS GeoRadar’s HxGN GeoMonitoring Hub integrated visualization and analysis platform. For the first time, mining companies will have a single-interface monitoring system, which now includes wireless geotechnical and environmental sensors in addition to radar, total station and satellite inputs. “As leaders in the IoT remote monitoring space, Worldsensing invests in making Loadsensing technology compatible not only with various sensors but also with third-party software, such as HxGN GeoMonitoring Hub by IDS GeoRadar,” said Bernat Trias, Worldsensing’s director of products. “IDS GeoRadar is committed to help-

• NETWORKS |

IDS GeoRadar and Worldsensing have teamed up to offer a comprehensive mine safety monitoring system. CREDIT: IDS GEORADAR

ing customers put their data to work and we are delighted to present this software knowing that it will positively influence the mining world for years to come,” Alberto Bicci, president of IDS GeoRadar, added. The Loadsensing system allows mining operators to connect and wirelessly monitor tailings dams and excavations in over 80 mines across 20 countries. Worldsensing collaborates with a variety

Cisco to acquire Fluidmesh to expand industrial wireless offerings

echnology company Cisco has announced plans to acquire Fluidmesh Networks, a privately held company whose wireless backhaul systems allow reliable and consistent communication. Fluidmesh solutions are quick to deploy and configure, offering customers a cost-efficient, low-maintenance solution. The transaction is expected to expand Cisco’s presence in the industrial wireless space to include dynamic applications where reliable wireless communication is critical. Fluidmesh’s technology is designed to provide zero loss of data transfer when assets are moving at high speeds. Customers are currently using Fluidmesh’s wireless technologies in rail, mining, ports, and public transit applications.

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of technology partners in the monitoring and mining industry to offer a global solution for safety monitoring and risk management at mines. IDS GeoRadar, a Hexagon company, provides products and solutions, based on radar technology, for mining, civil engineering and monitoring applications. Hexagon is a global leader in sensors, software and autonomous solutions. CMJ

MINING JOURNAL

“With wireless technology playing a greater role in every organization’s multi-access internet-of-things (IoT) strategy, reliable wireless connectivity is paramount to organizations operating industrial IoT environments, whether that’s manufacturing, mining, rail, or ports, where wireless technology automates operations to improve safety and lower costs,” said Liz Centoni, Cisco’s senior VP and general manager for cloud, compute, and IoT businesses. “The acquisition of Fluidmesh strengthens Cisco’s offerings in this space with leading technology that’s designed to provide zero loss of data transfer at speeds in excess of 300 km per hour.” The acquisition is expected to close in the fourth quarter of Cisco’s fiscal year 2020. CMJ

www.canadianminingjournal.com

• AUTOMATION |

Sandvik launches AutoMine for Trucks

andvik has introduced AutoMine for Trucks, which allows autonomous haulage not only underground but now also on the surface. According to the company, this is a first for autonomous haulage in underground mining settings. Behind the new capability is a smart handover technology that allows trucks to switch from underground to surface navigation mode in real time, allowing vehicles to continue through the ramp portal seamlessly to surface to complete the dumping cycle. For years, mining operations have used Sandvik’s intelligent AutoMine systems for autonomous and unmanned truck haulage. They help to reduce equipment damage and allow for increased efficiency and fleet utilization, reducing unit costs. They are scalable for different mining applications and can be supervised remotely. “At Sandvik, we’ve pioneered and delivered autonomous trucks for many years. Continuously setting the industry

• COVID-19 |

Sandvik’s AutoMine for Trucks allows trucks to switch from underground to surface navigation mode in real time. CREDIT: SANDVIK

standard we have now developed the industry-first, fully autonomous underground trucks that can operate in mining levels and mine declines including both underground and surface sections,” said Riku Pulli, VP of the automation business unit at Sandvik Mining and Rock Technology. “These trucks are set to revolutionize the mining industry, bringing significant improvements in mine’s productivity and safety.” AutoMine connects directly to Sandvik

OptiMine, enabling efficient production planning and automatic dispatch of tasks to AutoMine for execution. The production progress is reported back to OptiMine for real-time visibility of automated and manual operations. OptiMine also allows equipment and people location tracking, 3D mine visualization and predictive analytics to transform data into actionable insights. Integration with My Sandvik Productivity allows mines to know the real-time status of their fleet. CMJ

Provix releases thermal camera

rovix, a company focused on vision enhancement for better productivity and safety, has released a thermal camera, which measures body and face temperatures to provide companies with a proactive way to detect possible cases of COVID-19. The company’s camera systems are typically used to improve productivity in drilling, mucking, hauling, blasting, tramming, loading and rescue operations at mines. One of the main symptoms of a viral infection is an abnormal body temperature with a normal body temperature range of 36.5° C to 37° C. According to Provix, its non-contact temperature detector can rapidly screen preliminary temperatures of people passing through the thermo-visual device. The company has improved and upgraded the facial recognition technology and automatic infrared facial temperature measurement features for this new product, which will measure forehead temperatures and report any abnormal measurements with an alarm. The equipment will automatically save information such as a facial image, temperature record, time, name and ID card information record. Provix reports that the new thermal camera device can store up to 10,000 records, and provides an integrated video management platform that allows for video preview, playback, alarm management, electronic mapping and other functions. CMJ CONTINUED ON PAGE 41

MAY 2020

CANADIAN MINING JOURNAL |

ARTIFICIAL INTELLIGENCE

How AI is being used to speed up exploration and improve the odds of success

TO THE RESCUE A

s a young geoscientist in the 1990s, Vince Gerrie could never understand why it wasn’t a common practice to collect more data during mineral exploration drilling. “If you look at oil and gas, they don’t drill a hole without taking physical rock property measurements or sending instruments down the hole to collect in situ data. In the mining industry it’s done, but to a much less degree – many holes are drilled with minimal measurements,” said Gerrie, who went on to found DGI Geoscience, a service provider that collects and interprets data from drill holes, in 1997. “If you’re spending all this money swiss cheesing the ground, why are you not taking advantage of that opportunity to 14 | CANADIAN

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invest in collecting more information and using that information wisely?” There are differences between the mining and oil gas sectors that account for the difference in data collection and use, and investment in new technologies that aim to make better use of that data, says Sam Cantor, head of geology at Minerva Intelligence, a Vancouver-based cognitive AI company. “Even though you’ve got all this modern technology today, you can still walk out there with a rock hammer, a paper map and something as simple as a GPS and find a mineral deposit,” he says. “In oil and gas – without major technology and major initiatives, you can’t really find these deposits anymore.”

That said, why shouldn’t the mining sector leverage the same technology that’s proven successful in oil and gas? That’s where artificial intelligence comes in. Even with a slow start to embracing artificial intelligence – which encompasses machine learning, automation, and cognitive AI – AI is starting to make its way into mineral exploration, with more companies using machine learning and “explainable AI” to produce better exploration targets, speed up the exploration process, and even act as a virtual consultant.

Goldspot Discoveries

In a short period of time, Toronto-based GoldSpot Discoveries has emerged as a www.canadianminingjournal.com

Photo: SvetaZi, iStockimages.com

By Alisha Hiyate

Photo: SvetaZi, iStockimages.com

leader in applying machine learning to mineral exploration to generate, improve and prioritize exploration targets, and better understand the resource potential of a property. The company, which was a runner-up in the #DisruptMining Challenge in 2017, and went public in early 2019, counts Eric Sprott, Frank Holmes and US Global, as well as Hochschild Mining as some of its biggest shareholders. Its clients include Hochschild Mining, Vale and Yamana Gold. GoldSpot was started by a team of geologists, including chief operating officer Vincent Dubé-Bourgeois – all with an interest in applying big data to mineral exploration. “What we’ve seen is that exploration techniques have not evolved at the same rate as exploration tools in past years,” says Dubé-Bourgeois, who learned coding on nights and weekends while doing an MSc. in geology at the National Institute of Research and Science. “We now collect more geological information than ever before – either from portable XRF where you can take a geochemical analysis while you’re in the field and new geophysical surveys that collect more information. But with all this data, geologists can become overwhelmed with the sheer amount of it.” GoldSpot’s solution uses machine learning to process geological data to

discover patterns. Diverse training data, including mineral occurrences, geology and geochemistry data are used to train a machine learning algorithm that can then predict targets. While machine learning algorithms automatically learn on their own, without needing to be further programmed, GoldSpot hasn’t dispensed with geologists and geoscientists. “We try to solve geological problems using data science as well as geological skills,” DubéBourgeois explains. GoldSpot’s domain experts – geochemists, geophysicists, structural geologists, 3-D modellers – are a key part of the process, helping with quality control, interpretation, selecting data to be trained, and validating results. “We use all their skills and enhance that with data science,” Dubé-Bourgeois says. “An example would be an algorithm with image recognition, we use different deep learning algorithms to classify rocks or structures and data sets.” Initially, GoldSpot worked with larger companies with producing assets on brownfield targets. But in early 2019, the company started to work with juniors as well. Dubé-Bourgeois points to the company’s work with Yamana Gold and New Found Gold as its biggest successes. GoldSpot partnered with Yamana Gold in 2018 at its El Penon mine in Chile to find more new mineralization to

Top: A 3-D structural model predicting structural intensity using a machine learning algorithm. Below: Goldspot’s process. CREDIT: GOLDSPOT DISCOVERIES

extend the life of the mine. Using historical mine data such as drill data, geophysical data, geological and geochemistry data, a predictive lithological map was created of the property that helped speed up target definition. “We have had multiple successes with them in helping to find new zones and targets that they are currently exploring.” Yamana has credited GoldSpot’s technology with improving exploration targeting at El Penon, where it has recently added reserves and resources. Earlier this year, New Found Gold, of which GoldSpot president, CEO and cofounder Dennis Laviolette is also a founder and president, reported its maiden drill hole at its Queensway project in Newfoundland cut 19 metres of 92.86 g/t gold. The 10 hole drill program tested several targets generated from geochemical, geophysical and structural analysis, combined with machine learning. Starting with an outdated geological map, GoldSpot used additional magnetic and electromagnetic survey data, in combination with field validation, its team of experts, and machine learning to produce a deep learning bedrock map with geophysical targets. “For some of the juniors, our work can be doing geological mapping for them, where we’d send geologists in the field, validate the targets that we did in our interpretation, and try to collect as much new information as we can to help our model afterwards,” Dubé-Bourgeois says. GoldSpot has also started a portfolio of royalties and equity stakes from juniors who want to access GoldSpot technology. The company is also expanding into the Australian market through a partnership with RSC Mining. Dubé-Bourgeois says GoldSpot has many products in development, including a program that would help relog and reinterpret historical core from pictures. The company is also developing an “outcrop detector” that works with satellite imagery for very early stage exploration.

Minerva Intelligence

Vancouver-based Minerva Intelligence was founded in 2017 and went public last May. The company offers four products in CONTINUED ON PAGE 16

MAY 2020

CANADIAN MINING JOURNAL |

ARTIFICIAL INTELLIGENCE Jake McGregor, COO of Minerva Intelligence accepting first prize for the Helsinki Challenge in 2019. Minerva’s geohazard division designed an application identifying areas in Veneto, Italy, that are susceptible to landslides. CREDIT: MINERVA INTELLIGENCE

top world experts’ writings on its TERRA Mining AI suite what a copper deposit is, how for mining clients, including they’re zoned, what they look Target, a cognitive AI syslike, and then engineer that tem that manages exploration knowledge into a computer data and generates explorathat can then take in new data tion targets, and Driver, which Sam Cantor, head of and then compare it against analyzes drill data to extract geology for Minerva. this internal ‘copper expert’ intelligence from multiple elebrain you’ve built. Then you ments. Sam Cantor, head of geology for the don’t need these hundreds, thousands or company, distinguishes between what millions of training examples, you just need Minerva does – knowledge engineering or that knowledge.” Minerva’s approach takes different “explainable AI” – and machine learning. Cantor explains that it’s difficult to train layers of data and turns them into litan algorithm to identify copper deposits tle “chunks” of knowledge, which it calls through machine learning, which requires semantic networks, then compares those a large training set of data – thousands or against all the mineral deposit knowledge millions of examples to learn from. “There the company has in its database. The prearen’t millions of copper deposits for you dictions that are produced are explainable – to train an algorithm on and all these i.e., you can see the reasoning behind them, in contrast to the “black box” of deposits are so different,” he says. “Instead, you can read PhD theses and machine learning, where you can’t be sure

why a certain prediction was made. Because Minerva takes a different tack focusing on explainable or “cognitive AI,” also called knowledge engineering, the company’s offerings focus heavily on standardizing language, an essential step in preparing data for its AI applications. Cantor says that geologists and miners often use different terms to describe the same sort of rock or the same phenomenon in the rocks, which makes it hard for other people or computer systems to actually use this data. “A lot of our services and a lot of our focus is really on getting control on the language of the science. That comes down to standard terminology and one of the things our system allows for is to take a project, a collection of projects, or even a whole portfolio from a company and help harmonize all of the geoscience words that they use so that a description of a copper deposit in Project A is actually comparable to all the geology work in project B.” Minerva’s Solace data standardization application and its Leo document management and custom tagging systems both focus on language, with both avail-

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able as software as a service (SaaS). One of the big benefits of Minerva’s knowledge engineering approach is that it can help alleviate some of the knowledge loss that comes when experienced geologists leave the industry because of a downturn, and can help make up for a reduction in mentorship programs where there would be more knowledge transfer to younger geos. Both are key factors in why exploration programs have become less successful, Cantor says. “Our type of AI is specifically tuned to capture expert knowledge and retain it in a way that can be used for either a computer system or other geologists,” he says. “Like an actual expert on the topic, they can look at what you have and say, ‘Hmm, what you’re missing to make this a really good match for this model or that, is this specific piece of information, so you should go out and collect it.’ That’s the same type of advice, given the same way, that a copper deposit expert consultant would give you.” The Yukon Mineral Targets is a public example of Minerva’s Target product for exploration (yukonmineraltargets.com), and, along with a similar mapping project completed for Brazil, is one of the company’s biggest successes. The project is an updated version of something that the Yukon government commissioned Clinton Smyth, one of the founders of Minerva who has a background in both geology and computer science, to create 14 years ago. The company updated the program to give potential clients a better idea of Minerva’s capabilities. The project identified 2,374 exploration targets generated using data from 22,144 stream-sediment samples. The map also identifies terrane, geology and any available mineral data for each target site and compares the target with the deposit types that it best matches. “People’s reactions to the Yukon Mineral Targets has been really great: we have people come up to the booths at Roundup and PDAC who have properties in the Yukon and say, ‘Your system got my deposit type perfectly right’ – and we didn’t train it on anything, we just used our deposit knowledge. Those have been exciting successes.” Most recently, in April, the company landed a contract with White Gold, a MAY 2020

Yukon explorer headed by Shawn Ryan, who discovered the Coffee gold deposit in the Yukon. The companies will use Minerva’s technology to identify multi-element zones in White Gold’s data, associate those zones with relevant lithologies and structures, and then compare the results with deposits around the world to identify promising drill targets.

Kore Geosystems

Rather than exploration targeting, the concept behind Kore GeoSystems is about speeding up and automating drill core logging, and eliminating and streamlining the many tedious data entry tasks associated with it – allowing geologists more time for interpretation. Kore began as the data analytics diviCONTINUED ON PAGE 18

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CANADIAN MINING JOURNAL |

ARTIFICIAL INTELLIGENCE sion of DGI Geoscience and became its own entity in 2015. Like GoldSpot Discoveries, Kore really got started with the 2017 Disrupt Mining Challenge. After being crowned as one of the winners of the competition, Goldcorp invested $1 million in Kore, and in less than one year, the company went from a concept and a “crude drawing” on a napkin to a successful deployment of a commercial product, says CEO Vince Gerrie. Kore’s Spector system is comprised of Spector Optics image capturing system, a machine that core is fed into; Spector Geo visual core logging software, which has an intuitive touch screen interface for rapid data entry; and Spector AI, a machine learning suite of applications that assists with geotechnical logging and rock classification. In designing Kore’s Spector suite of

Kore GeoSystems’ Spector Optics unit. CREDIT: KORE GEOSYSTEMS

products, Gerrie visited core shacks of both majors and juniors and asked geologists to identify the most frustrating parts of their work flow. The biggest complaint was that they felt like “overpriced data entry clerks,” he says. “Our focus is to eliminate a lot of those repetitive mundane tasks and let the geologists spend more time on geology,” he says. “If you can reduce a geologist’s data

Simulations: See what you need to avoid operational bottlenecks. .com

entry workload by 50%, he or she would have way more time to spend on interpreting data. We want them to be using their brains interpreting and consuming data, not entering data which they barely have time to interpret.” Instead of taking core photos and manually entering data (core depth, rock type, etc.) separately into another database, both tasks are done at the same time with classifications superimposed directly on the images with Spector Geo. The program also automates depth referencing – another time-consuming task that geologists normally do manually. By integrating the images and data, and streamlining the process, Kore estimates its Spector suite of products reduces data entry time for geologists by 90%. “We can now present them with an image – they just click on the rock and click on the legend and it’s classified. They don’t have to type in depths – all the images are depth referenced so if you touch the rock image, it will tell you what depth it is downhole.” The data is uploaded to the Cloud and available in real time, anywhere in the world, facilitating collaboration and remote work – an attractive option during the current COVID-19 pandemic. The system also speeds and automates the process of RQD logging, where a geologist assesses the competence of the rock from a rock mechanics perspective, and references it to the core image. The Spector Geo system makes the RQD calculation over top of the image – so it’s possible to go back to the image later and see where all the interpretations and calculations were

CONTINUED ON PAGE 41

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www.canadianminingjournal.com

CYBERSECURITY

WAYS TO REDUCE YOUR RISK

IN A DANGEROUS CYBER WORLD By Graham Bushkes

Photo: scyther5, iStockimages.com

he cyber world was already becoming an increasingly dangerous place before the current epidemic, and we are now seeing the immense scalability of our cyber adversaries. They have ramped up their efforts to target sensitive data and critical infrastructure (mining included) to disrupt economies and steal intellectual property. And at the same time, cybercriminals – fuelled by a desire for proﬁt and bragging rights – have also launched ever-more sophisticated attacks on businesses and governments, many of which generate high-profile headlines while further lining the pockets of cybercriminal organizations. And the current pandemic has raised the stakes even further. Remote work has surged, putting pressure on IT teams as cybercriminals target an expanded attack surface and novice remote workers, increasing the risk that a COVID-19 related phishing email or unpatched solution on a home laptop could open the door to a serious data breach. But even when the COVID-19 cyber threat subsides, the attack surface for businesses will continue to expand. The rise of MAY 2020

Internet of Things (IoT), cloud applications and platforms, and the ongoing convergence of operational and information technology (OT/IT) are not only introducing new efficiencies and paving the way for digital innovation. They have also opened up a host of new attack vectors that cybercriminals will continue to be all too willing to exploit – in part because, unfortunately, far too many organizations are failing to adequately secure them. And these are just the “known knowns” – the risks that we are already aware of. By now, most companies are aware of most of the garden-variety cyberattacks that can affect their core networks. While some can be quite serious, many others are little more than a nuisance that can be stopped with the right effort and technology. But the potential havoc those same attacks can have on the newly extended network, including the growing web of interconnected devices running ever-faster networks, is much higher. In those circumstances, these threats can have far more serious implications for business uptime and the ability for organizations to adequately serve their customers. And if there CONTINUED ON PAGE 20

CANADIAN MINING JOURNAL |

CYBERSECURITY

For better or worse, the current situation is revealing to organizations where they stand from a cybersecurity perspective. Those who have failed to keep pace with cyber threats are well advised to act now. It was risky to wait this long. Delaying much further could have dire consequences.

is one thing we can count on in today’s rapidly evolving cyber environment – it is that as we continue to innovate, so too do our attackers. It should come as no surprise, then, that 84% of chief information security officers feel that the risk of cyberattacks will continue to escalate for the foreseeable future, according to research by Forbes Insights in association with Fortinet. More worrisome, 21% of them also believe that cybercriminals possess abilities that are outpacing their own organization’s ability to defend itself.

THE SIMPLE THINGS MATTER

To achieve the upper hand in this raging cyberwar, there are four essential steps every mining company should take to prepare for any cyberattack in order to protect their digital assets. The simple things matter now more than ever. In a world where remote work is now the norm, to maintain security it’s critical that employees understand and follow all existing policies and procedures. Remind them that things like virtual private networks (VPNs) and multifactor authentication (MFA), for example, are crucial to keeping the company safe and protecting their electronic devices. At the same time, a good patch management system combined with application control capabilities are critical, especially now as so many devices are roaming outside normal organization safeguards. It’s also worth remembering that email is far and away the biggest weak spot in any organization. The impact of a worker who opens a well-worded but malicious email attachment is hard to overestimate. Which is a reminder that if you haven’t already done so, make sure to fortify or upgrade your secure email gateway solution. But don’t leave cybersecurity in the hands of IT alone. Also train your people to be cautious. Everyone has a role to play – and cultivating a culture that practices good cyber hygiene is important. For that reason, get in the habit of sending communications to employees reminding them about basic cyber-hygiene best practices, and updating them on the latest threats or social engineering scams that may appear in their inboxes along with what to do if they see one. 20 | CANADIAN

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SEGMENT THE NETWORK

When it comes to security, “open concept seating” built around inherent trust and flat networks that enable free access to networked resources are not a good thing. Instead, critical assets should be divided into well-protected domains, or segmented to ensure that devices, assets, and data that are constantly moving into and out of the network are dynamically allocated to the appropriate segment and even very specific based on policy and a need-to-use basis. This helps lower the potential impact of an attack, ensuring that compromised systems will be automatically limited to a certain security zone. It can also help to better wall off sensitive customer and intellectual property data. This is especially critical in environments where OT and IT overlap. OT networks should implement segmentation and zero-trust network access to ensure that newly connected IoT devices and IT-enabled devices and services are automatically isolated from sensitive OT devices, and that management and communications protocols are isolated from device and user interfaces by default. Strict access controls, role-based access, and only providing the minimum amount of privilege and access required for a device or user to do their job, all combined with strict monitoring, ensure that rogue devices and malicious malware and users have no ability to disrupt the business or destroy or steal critical resources.

AIM FOR COMMUNICATION REDUNDANCY

Miners are very familiar with the risk and opportunity that comes with equipping and serving highly connected, remote teams. For this reason, the networks that support remote mining teams are at especially high risk in the event of an attack. Ensure that failover plans are in place to ensure smooth and consistent communications in the event of sudden failure. Also consider a modern Secure Software Defined WAN (SD-WAN) solution to make it possible for organizations to change communication paths on-the-fly based on a variety of factors, such as sudden bandwidth constraints or dropped packwww.canadianminingjournal.com

Photo: matejmo, iStockimages.com

Switching the odds Clearly, these threats aren’t going away anytime soon. That’s why it’s critical for organizations to step up their game when it comes to playing defense. Most organizations fail to realize that with the superior resources they have available, they can actually switch the odds in their favour. Cybercriminals are coin-operated, and if it simply becomes too expensive and time-consuming to take down a target, they will move on. It all comes down to three things: making sure your employees are trained and ready to do their part; structuring networks in a way that minimizes risk; and eliminating the holes that inevitably open up when rapidly building out new network environments while relying on a patchwork of aging security solutions that aren’t equipped to interoperate with today’s dynamic networks or meet today’s evolving threats.

ets. This way, the risk of losing the ability to transmit information, even in the wake of an attack, is low.

Photo: matejmo, iStockimages.com

SEEK AUTOMATION

At a time when we most need skilled cyber defenders, they’re in increasingly short supply. Canada is facing a critical cybersecurity skills shortage, with a best estimate of at least 8,000 jobs expected to be unfilled by the end of the year. Between this lack of security talent afflicting Canada and an aging mining workforce, skilled cybersecurity professionals are hard to find. Even those who are now on the job are finding themselves having to juggle the impact of COVID-19, leaving even less bandwidth to handle the unexpected or engage in higher order strategies to identify and close any existing security gaps created by the recent rapid transition to a remote workforce. One way to address this challenge is to take advantage of the artificial intelligence and machine learning being built into many security solutions. With it, companies can better defend against cyber threats, enabling them to analyze, spot, and address security issues and cyber events designed to evade detection far faster than traditional manual methods. Even better, AI can also study attacks and watch for patterns, which help users predict future attacks and enable their organizations to erect better defenses. For years, many organizations have continued to rely on the same failed strategies or outdated technologies to secure their networked environments, even in the midst of rapid and expansive digital innovation that is transforming every other element of their networks. The risks of continuing down this path of continued reliance on increasingly less effective security solutions and strategies are higher than ever. For better or worse, the current situation is revealing to organizations where they stand from a cybersecurity perspective. Those who have failed to keep pace with cyber threats are well advised to act now. It was risky to wait this long. Delaying much further could have dire consequences. CMJ

– Graham Bushkes is country manager for Fortinet Canada. MAY 2020

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Q&A

Is your ERP ready for the new normal? How the pandemic could accelerate mining’s digital transformation

Enterprise resource planning (ERP) systems are the central nervous systems of most businesses, helping companies with financial management, supply chain management, asset tracking, HR and more. One of the biggest ERP providers is SAP, and Illumiti, a consulting company and system integrator that mostly focuses on SAP software, has helped many majors and mid-tiers implement the platform.

Canadian Mining Journal: What are some of the issues that Illumiti has seen affecting mining customers so far during the pandemic? Different countries and Lorraine Howell: regions have handled the pandemic differently – some are trying to keep the lights on and to keep people at work; others are taking more drastic measures and have shut down mining activities.

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MINING JOURNAL

Most of our customers are trying to keep the lights on, but they have certain constraints around travel – for example, we have fly-in mine sites in remote places like Canada’s North. With travel now restricted, they’ve had to lengthen the time that people stay on site so as to minimize their interaction with other people, then have them offsite for a longer period of time so they can self-isolate. So, travel to and from mines has been restricted, even in places where it’s not remote. In those cases, they’ve had to reduce their crew sizes, so productivity has declined as well. www.canadianminingjournal.com

Photo: Pinkypills, iStockimages.com

Lorraine Howell, Illumiti’s vice-president of Innovation and Continuous Improvement spoke with CMJ in April about how miners can use their ERPs to cope with some of the challenges that have come with the COVID-19 pandemic, and over the longer-term, to facilitate their digital transformation plans. Howell also speaks about some of the advantages of S/4HANA, SAP’s new platform introduced in 2015.

Photo: Pinkypills, iStockimages.com

At corporate offices, people are finding working from home to be quite disruptive, so that has been an adjustment. On a broader level, there’s a lot of supply chain insecurity – not knowing whether they’re going to get all the spare parts they need in order to operate their mines because some of their suppliers may not be seen as essential services.

Lorraine Howell

CMJ: How are miners addressing some of these issues using their ERP platforms?

Companies are having specific people, process and LH: technology issues because of the pandemic. The people issues are people that aren’t coping well with managing home

and business in the same environment, or people that are actually getting sick. So, we’re trying to help our clients by just providing them bodies, or helping them with automation to address the fact that they may not have the same people capacity they had before. Before the pandemic, we found that a lot of organizations don’t really use all of the capabilities in their ERP systems. Now, it’s even more important for them to start leveraging those capabilities to cope with all the issues that are coming up around people and processes. For example, a lot of our clients are still issuing physical

MAY 2020

cheques to their vendors. That’s a problem because you’ve got to touch the paper and put them into envelopes and mail them out, and the recipient might have virus concerns. Because of this, we’re offering companies a quick and easy way to move to EFT using their current ERP. The other concern is the supply chain; people are concerned if their vendors are going to be able to continue supplying them. And what’s going to happen when suddenly everybody starts working again? Are we going to be oversupplied because we’ve let it slip for three, four, five weeks and suddenly we go back into business and we’ve got these minimum replenishment measurements on our inventory? We’re suggesting to have a look at your materials requirement planning parameters within your ERP before we get to the next phase of this pandemic and make sure that you’ve set your reorder points to the right level so you don’t get overwhelmed by supplies once things get back into place. Then there are short-term cost initiatives and ways of tracking expenses specifically related to COVID-19. Mines can also utilize the tools in SAP to better track the health of their employees and to record where they are in dealing with the virus. Probably the biggest thing is visibility to metrics (business measures and key performance indicators) that are essential to maintain their business continuity. These would be metrics they’ve been tracking over time. A lot of our customers download data into Excel and calculate those metrics in Excel spreadsheets instead of leveraging their ERP. But if they are running S/4HANA, they can see all their data in real time and build new metrics that will help them check if their vendors are in good shape and if they are supplying on time, and also look at the health of their own customers.

CMJ: So there are ways companies can make better use

of their ERP platforms during the pandemic. What sort of opportunities should they be looking at that will still be useful after the pandemic subsides?

With our customers that have moved to S/4HANA, a LH: lot of them didn’t really embrace the new capabilities of the platform, such as embedded analytics and KPIs, they really just wanted to continue business as usual. But I think the pandemic has disrupted the apple cart – now it’s not good

CONTINUED ON PAGE 26

CANADIAN MINING JOURNAL |

ADVERTORIAL

ARTISAN

Z50 Bigger, and Fundamentally Better

attery electric vehicles (BEVs) in mining have come a long way in the past few years. Initially the industry thought battery powered trucks would have a maximum capacity of 20 tonnes, but late in 2019 Sandvik-owned Artisan Vehicles released the largest battery powered truck yet – the 50-tonne Z50. How was Artisan able to engineer a 50-tonne truck, completely battery powered with zero emissions, and productivity and utilization comparable to a diesel powered equivalent? When we think back to the early stages of engineering BEVs for mining, there is one thing that makes Artisan Vehicles stand out when compared to other manufacturers, and that is their fundamentally different approach to electric vehicle engineering. As Oren Harari, a professor at the University of San Francisco said, “the electric light did not come from continuous improvement of candles” and this is an applicable analogy to explain how Artisan was able to achieve this success. “Artisan products were designed to be battery powered from the ground up,” says Brian Huff. As VP of Technology at Artisan Vehicles, Huff is known throughout the industry as the go-to expert when it comes to battery technology in mining. He has dedicated his entire career to BEVs, starting with an MSc in Mechanical Engineering at the University of California, Davis. According to Huff, some BEV products on the market right now are reconfigured diesel machines so they are not able to take advantage of all that battery and electric-drive technology have to offer. But when designing their products, Artisan discards as much as they can about conventional diesel engineering. “When you convert a diesel machine to battery-power you are tied to the frame of the existing machine – the system is so interdependent you can’t change the driveline or significantly increase the torque without redesigning the frame, so you

can’t capitalize on the potential benefits and efficiencies of battery power and electric-drive” says Huff. “Artisan products are the only third-generation products on the market,” he explains further. “Which means that it’s not simply replacing the engine with a battery, inverter and motor (generation 1) or redesigning more of the drive train (generation 2) but rather the next iteration where we redesign the whole machine to be fully optimized for battery power and operation (generation 3).” “These are truly battery machines where we haven’t had to design the machine around certain mechanisms that are only required in diesel products,” Huff says. “They don’t look the same inside.” One of the key features of Artisan products that is included with the new Z50 50-tonne truck model is the self-swapping batteries, which a diesel conversion likely could not facilitate. “Self-swapping batteries are a core feature of Artisan products, and the ground-up machine design is essential for our vehicles to be able to do selfswapping,” says Huff. The Artisan design needed to be fundamentally different to incorporate this feature. According to Huff, Artisan had to rethink the entire machine to incorporate self-swapping of the battery and to increase the performance while keeping the same machine size. They added stronger frames, stronger drivelines, new boom structures and innovative packaging to take advantage of all the possible benefits associated with battery technology and ensure the machine was competitive versus its diesel equivalent. Despite the extensive research and engineering behind Artisan’s designs, there is still a misconception among mines that there is time wasted while self-swapping, especially during long hauls. But according to Huff this is not the case with Artisan trucks and loaders, and mines need to shift their perspective. Diesel

LEFT: Artisan Z50 50-tonne truck courtesy of Sandvik Mining and Rock Technology ABOVE: Artisan Z50 self-swapping battery in action courtesy of Sandvik Mining and Rock Technology

powered loading and hauling is so embedded into the industry’s understanding of the haul cycle that it is a challenge to consider the productivity and efficiencies gained by removing fueling stops and diesel costs. “We are adding these more frequent but quicker delays for battery swapping but removing the longer delays that we don’t even question anymore because they are built into our understanding of the diesel haul cycle” says Huff. “What we have found is that with such a short battery swap time, of 6 minutes, and faster haulage speeds, there is actually an increase in production.” According to Huff the Z50 is able to achieve higher speeds when traveling uphill loaded compared to the same size class diesel machine and the overall time spent swapping batteries per shift in many instances is about equivalent to the machine refueling time per shift. And the productivity benefits will only increase as the battery fleet expands from a single truck, to multiple trucks, to trucks and loaders. “[With the Z50] you can do a 13km haul with only 12 minutes spent on battery swapping and the productivity will be matched versus a diesel truck due to higher speeds,” explains Huff. And all of this is possible due to Artisan’s generation 3, ground-up approach to engineering. The benefits of the Z50 are not only seen during long haul cycles though. Huff emphasizes that the Z50 is applicable for all applications and purposes, an opinion that the industry has been slow to accept. “The Z50, and Artisan vehicles in general, are great for new mines because you save capital on vents and you can develop faster because you don’t need to wait for new vent raises. But it’s also applicable for direct fleet replacement at existing mines – you can turn down ventilation, reduce heating costs in the winter, and there will be direct TCO savings,” says Huff.

There are certainly mines that should be first in line for Artisan’s BEVs – those that need to reduce their diesel emissions right now. With very little change to current operations, mines can phase out their diesel trucks and phase in BEV trucks and loaders, allowing customers to stay ahead of tightening regulations around diesel exposure and emissions. For other customers it could open up new mining areas for them, allowing them to mine more tonnes. “There’s additional benefits for sure at mines that are deeper for example brownfield expansion projects with ore bodies open at depth can now be accessed without significant ventilation investment, but we are TCO positive even without considering the ventilation savings.” According to Huff, the upfront machine cost of a BEV can be higher than its diesel equivalent, but the perception that the TCO is higher for Artisan BEVs versus diesel is wrong. “We have been doing a lot of work in this area recently and collecting data from all our machines in the field,” says Huff. “We have found maintenance parts and consumable costs to be significantly lower than equivalent diesel machines, which is a real game changer.” Artisan looks at batteries as a comparison to fuel costs. Huff explains, “this is a new way of looking at fuel if you don’t go for something like a Battery as a Service agreement and rather purchase your batteries with the machine, it’s like buying your fuel all at once.” “Considering the analyses we have done, over the life of the machine, TCO is about 12% lower,” says Huff. “And this is only these direct costs, it excluded things like parts holding costs, fuel handling and disposal costs, ventilation reduction, any tax credits for GHG emissions, and the list goes on.” The best is yet to come from Artisan, with an 18-tonne loader on the way to match with the Z50 and further optimize the load-haul cycle. “This will be the first release of the joint efforts from Sandvik and Artisan and will highlight the strengths of both companies,” says Huff. “The exciting thing about this new machine is that it will be a solution for the customers requiring a smaller 8-yard (typically 14 tonne) machine as well as the larger 18-tonne machine.” With a matched loader, the productivity and utilization of a battery-powered load and haul fleet can improve dramatically as the engineering benefits in more potential applications. Huff says he can’t spill any more beans on the 18-tonne loader right now but hints, “let’s talk again at MINExpo.”

Q&A enough to just keep the lights on, in fact the lights are going to go off if you don’t do something. Getting visibility to your data, deriving value from your data, being able to measure the right KPIs or business measures to make decisions and to act on those decisions immediately, are going to become more important. Whether they’re on SAP ECC (an older, on-premise version of SAP) or SAP S/4HANA, one of the biggest opportunities to my mind would be automation. There are really cool robotic process automation tools out there that work with SAP and some of them are even provided through the SAP platform, that enable users to record activities and then have the system generate a script that can be repeated. Then, if you integrate the intelligent machine learning capabilities into that robotic process automation, you get what we call intelligent RPA, which can actually learn from the way you do something and suggest ways of doing it better. You don’t necessarily have to upgrade to S/4HANA to leverage these tools. Everybody’s afraid that machines and robots are going to take over our work, but that’s not the objective. The objective would be to automate manual and repetitive tasks that people are now doing, and to get people – specifically where they have limited capacity – to focus on more important things. So, the capacity of your business doesn’t necessarily have to deteriorate because your people capacity has. In fact, you can keep going and have your people focus on the critical parts of your business.

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CMJ: Is that a tough sell for an industry where you still have companies that are sending physical cheques out?

I think the pandemic is forcing people to adopt LH: technology where they would have been reluctant to before because they couldn’t create a business case for it. When

you’re in a situation like we’re in today where people are saying, ‘Don’t send us a cheque because we don’t want the risk of catching this virus,’ you are forced into an adoption process. And people are also realizing that their workforce is changing – the older generation is retiring, and the new generation (millennials and Gen Z) that are looking for work, are not going to want to do some manual, repetitive job. If your competitor is automating and you’re not, you’re going to be left behind. I think that miners are going to start adopting technology more and the pandemic is actually going to help them from that perspective because it’s going to be a necessity as opposed to a nice-to-have.

CMJ: You mentioned there are longer-term opportunities your ERP can help unlock, including automation. Are there other, similar opportunities companies should be looking at?

Yes, automation is the easiest one because it really LH: addresses capacity issues directly. But one of the obvious ones is embedded analytics. Companies that are running

ECC today still struggle with analytics. In a traditional SAP environment, you can run list reports pretty easily, but to measure your performance in a particular area, you would typically have to download to Excel and then do calculations in Excel, or get a programmer to build that calculation into a program that would then produce a metric that you could then use to measure your business and then act on. With new technology and with the SAP S/4HANA system, all of your transactional data is immediately available. Some of the essential KPIs that you need – for example, inventory turnover, actual cash flow, supplier evaluation, etc. – are provided out of the box, and can be made readily available on a launchpad or dashboard. But you can also leverage tools within S/4 to generate those KPIs that are not provided through a drag-and-drop kind of environment. Then those KPIs can be displayed on the launchpad so that I can see that my inventory turnover has deteriorated over the last day or two or my cash flow has become critical, and can immediately from that insight act within the system to remedy the situation. We call it “insight to action” – where as you drill into the problem, you can click on a transaction that will enable you to communicate with your inventory manager and share a screenshot of what you’re looking at. And from the inventory manager’s side, he or she could probably see the issue right away and then easily address it by resetting the order point, for example. So those embedded analytics and insight-to-action capabilities can address the pandemic KPIs you need today, www.canadianminingjournal.com

A coal operation in Indonesia.CREDIT: UNSPLASH/DOMINIK VANYI

ERP itself. These give people the ability to predict what goods receipts are going to come through by month’s end, which sales orders are going to be invoiced and paid by the end of month based on the historical trend, etc. There are so many things people wouldn’t have even thought of that are now available.

CMJ: SAP will end its maintenance of pre-HANA platforms in 2027 – what does that mean for miners?

You need to plan your migration to SAP S/4HANA LH: so you can get it done before then, although SAP may change the date (they already did from 2025). You don’t want to

and any kind of business measures that you need to keep your business efficient and competitive longer term.

CMJ: You spoke a little bit about the capabilities of ERP

systems in general and of SAP and S/4HANA. What are the differences with S/4HANA– how is it better, what’s new?

get into a position where you lose your maintenance relationship with SAP because once that happens there are penalties you’ll have to pay if you want to do the migration at a later stage. But you need to have a real reason for going to S/4 – it shouldn’t just be because you’re afraid of non-compliance. I strongly believe that every mining company, if they sat down and analyzed their business today and where they would like to see their business in five, 10 years, digital transformation would be part of their long-term goal. Your current ERP is not going to miraculously support digital transformation; S/4 is moving you from an old platform to a new platform that can enable you to use new technologies. CMJ

The most important thing I would highlight is embedded LH: analytics and the insight to action in S/4HANA that I described above – the ability to drill down and follow some process

to solve a problem directly from the data. S/4HANA sits on an in-memory database that gives you access in real time to your data instead of having to bring that data into a data warehouse and then have to report on the data on a lagged basis. This is the one fundamental difference in S/4HANA. The other thing that comes with that is the built-in KPIs. SAP has built in a whole bunch of KPIs – things like inventory turnover, days sales outstanding (DSOs), contract renewals – that in the past, you would have had to run six reports or download to Excel to get. Mining customers also need to think about what are the KPIs that are most valuable to them. Is SAP delivering them out of the box? Probably not always. But are they easy to create yourself? The second major benefit of S/4HANA is the user experience – having a launchpad that presents tiles that enable you to see these business measures and be able to drill down from those business measures. When you come into the office in the morning and log into SAP, you have a dashboard of all these tiles that give you exactly the information you need to know to be able to solve any problems in your business. This new user interface has these KPIs directly available and is a one-place environment where you can also link into commodity prices from a website, for example. You can integrate non-SAP systems into that user experience as well. Beyond that, in 2019, SAP released a number of machine learning and prediction algorithms and capabilities within the MAY 2020

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CANADIAN MINING JOURNAL |

MINE COSTING

Evaluating rules of thumb using conveyor costs

CostMine analysts investigate 4 ‘rules’

By Sam Blakely and Scott Stebbins

ules of thumb are often used in the mining industry as methods of providing approximate answers for different portions of mining activities. But do these “rules” work? Are they outdated? To answer these questions, we decided to focus on conveyor costs and the associated rules of thumb widely used in underground mining. We intend to show how Sherpa for Underground Mines, a software tool available from CostMine, can be used to bolster confidence in items like de la Vergne’s rules of thumb (or to make determinations in more project-specific

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mine production exceeds 5,000 tons. (Source: Al Fernie)

problems) in a way not possible without Sherpa’s speed and engineering capabilities. We chose de la Vergne’s compilation of conveyor cost rules of thumb to assess using Sherpa for Underground Mines. The majority of these rules are echoed below: 1 An underground mine is more economically served by a belt conveyor than railcars or trucks when the daily

2 As a rule, a belt conveyor operation is more economical than truck haulage if the conveying distance exceeds 1 km (3,280 ft.). (Source: Heinz Altoff) 3 The ton-mile cost of transport by belt conveyor may be as low as one-tenth the cost by haul truck. (Source: Robert Schmidt)

4 The installed capital cost of a long belt conveyor system to be put underground is approximately equal to the cost of driving the heading in which it is to be placed. (Source: Jack de la Vergne) www.canadianminingjournal.com

RULE OF THUMB #1: Production rate

To begin, typical deposits and matching mining projects which utilize cut and fill, sublevel longhole and room and pillar stoping methods were constructed in Sherpa for Underground Mines at various production rates. In accordance with rule of thumb No. 1, conveying distances were set to 1 km. The results of this analysis can be seen in Figure 1 and align with de la Vergne’s rule of thumb whereby a conveyor is economically advantageous as compared to rail or truck haulage when production rates exceed 5,000 t/d. The results of the sublevel longhole and room and pillar analyses showed similar overall trends. Though, relative to the cut and fill Sherpa models, the spread in costs above 5,000 t/d was greater in the sublevel stoping analysis and narrower in the room and pillar analysis.

Modelling Assumptions Our modelling technique, and that of Sherpa for Underground Mines, consists of a whole-project cost approach. Costs associated with several tasks and processes not directly related to purchasing, operating, and maintaining the machines must also be considered to properly evaluate economic decisions. In the case where primary transport options are compared it must be remembered that ventilation requirements differ for each approach, as are the cross-sectional areas of the faces of each of the respective openings through which the machines transport the ore. Shop facilities, and the nature of the service vehicles, are more extensive for truck transport than for the conveyors. Every such factor figures into the overall economics of each transport method and are incorpoMAY 2020

Billions

Life of Mine Capital and Operating Costs

Cut & Fill $5.00 $4.00 $3.00 $2.00 $1.00 $– –

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Daily Production Rate (ton per day)

rated into the values below. When a conveyor transports ore out of the mine, the mine-run is crushed before it’s loaded on the belt to minimize belt damage. The models used in this analysis replicate this procedure. Typically, mine-run ore is not crushed prior to truck transport, but is instead crushed after it is delivered to the mill. In both scenarios, the ore is crushed, but when a conveyor is specified for primary transport, the costs of this process are often attributed to the mine costs. For truck transport, they are included in the mineral processing costs. To effectively compare conveyor and truck transport, the costs of purchasing, installing, and operating an underground crusher have been subtracted from the conveyor transport scenario values below.

Conveyor

Trolley

Truck

Figure 1: Cut and Fill Haul Method, Production Rates and LOM Costs

RULE OF THUMB #2: Economic transport distance Evaluators, and the preceding analysis, have assumed that conveyor haulage is economically advantageous when compared to truck haulage when material is to be transported a distance of more than about 1 km (3,280 ft.). To verify this assumption, we’ve constructed a series of production scenarios which examine a room and pillar mine operating through a variety of production rates and primary haul distances. For our work, only the deposit thickness (as opposed to the CONTINUED ON PAGE 30

CANADIAN MINING JOURNAL |

MINE COSTING

$65.00 $60.00 $55.00 $50.00 1,650

2,200

4,200

6,300

8,300

11,400

Haul Distance (feet)

Operaing Cost (per ton ore)

$24.00 $22.00 $20.00 1,650

$38.00 $36.00 $34.00 $32.00 $30.00 $28.00 6,300

8,300

Haul Distance (feet) Conveyor

Figure 3: 2,500 t/d, Haul Distance, Method and Opex

8,300

6,300

11,400

Truck

11,400

10,000 t/d: Haul Distance vs. Operating Costs $25.00 $23.00 $21.00 $19.00 $17.00 $15.00 1,650

2,200

4,200

6,300

8,300

11,400

Haul Distance (feet) Conveyor

Truck

Figure 5: 10,000 t/d, Haul Distance, Method and Opex

CostMine offers several engineering-based mining cost estimating software tools and works continuously to improve these products. One such offering is Sherpa for Underground Mines, which is software that uses resource and mine production information to estimate labour, supplies and equipment requirements, which are in turn used to estimate the associated mine capital and operating costs. To do this, the application uses evaluator-supplied information to calculate over 800 engineering parameters. These parameters can be readily altered to more precisely reflect project conditions. In addition, help screens and a manual offer technical guidance for each parameter value. One value of the Sherpa suite of software, which includes Sherpa for Underground Mines, is its ability to complete engineering-based mining cost estimates in a timely manner. This allows you to assess a multitude of what-if scenarios as you make planning, development or production decisions, a task not easily accomplished when time is of the essence or without such tools.

HARD ROCK MINER’S HANDBOOK Another resource available to developers and professionals who must make such decisions are the precepts and rules of thumb found in literature, such as those in the well-known Hard Rock Miner’s Handbook, written by Jack de la Vergne (published by Stantec Consulting). These rules of thumb are the result of decades, if not centuries, of experience and are of great value to many. They give evaluators the opportunity to diligently draw upon the industry’s collective experience as they solve the problems of estimating costs.

MINING JOURNAL

4,200

Haul Distance (feet)

SHERPA FOR UNDERGROUND MINES

30 | CANADIAN

2,200

Figure 4: 5,000 t/d, Haul Distance, Method and Opex

2,500 t/d: Haul Distance vs. Operating Costs

4,200

$26.00

Conveyor

Figure 2: 1,000 t/d, Haul Distance, Method and Opex

2,200

$28.00

Truck

Conveyor

1,650

Operaing Cost (per ton ore)

$70.00

5,000 t/d: Haul Distance vs. Operating Costs

Operaing Cost (per ton ore)

1,000 t/d: Haul Distance vs. Operating Costs

deposit width or length) was varied to provide the different resource tonnages (and subsequent production rates). This minimized the impact of the haulage costs from the face to the crusher station on the overall project costs. The results of this evaluation (Figures 2-6) indicate that haul length is indeed a primary factor when truck haulage costs are compared to those of conveyor transport. Though, as indicated by rule of thumb No. 1 and Figures 2-6, production rates have an equally significant impact. As can be seen, above a certain production rate (somewhere near 5,000 t/d), overall project operating costs will be less when a conveyor transports the ore, once a specific haul distance is exceeded (in the scenarios which we examined). In each of the models with production rates greater than or equal to about 5,000 t/d, this distance was somewhere between 1,830 and 3,660 metres (6,000 and 12,000 ft.). It is critical to note the minor variations from one data point to the next. The curves are typically neither smooth nor uniform. These variations represent a condition that manifests because of the finite availability of www.canadianminingjournal.com

Operaing Cost (per ton ore)

prices used in our analyses are in terms of 2020 U.S. 15,000 t/d: Haul Distance vs. Operating Costs dollars. If ownership costs $25.00 are included, the total per$23.00 ton-mile operating costs $21.00 for conveyor haulage aver$19.00 aged 72% of those for truck transport. For these anal$17.00 yses, ownership costs are $15.00 simply the purchase price 1,650 2,200 4,200 6,300 8,300 11,400 divided by the expected Haul Distance (feet) life of the machine prior to Conveyor Truck overhaul or replacement. Figure 6: 15,000 t/d, Haul Distance, Method and Opex The lowest ratio of conveyor transport operating machine sizes. Put simply, in some instances costs to truck transport operating costs a (theoretical) 27.5-inch-wide conveyor (excluding ownership costs) was about may have provided maximum utilization 0.26:1 for a scenario in which 15,000 t/d at a specific production rate. But because are transported about 500 metres (1,650 such a conveyor belt width does not exist, a ft.). This ratio did not vary much with 30-inch-wide conveyor is selected instead, respect to distance. For a similar scenario which provides more than enough capacity. in which the material was transported 350 As a consequence, this machine will then metres (11,400 ft.), the ratio of conveyor be slightly underutilized (and subsequently transport operating costs to truck transmore expensive in terms of cost per ton), port operating costs (excluding ownership unless the production rate is changed. costs) was about 0.3:1. This ratio was as Modelling of this type points out high as 1.19:1 for a case where only 1,000 the benefits of more detailed analysis. t/d were transported 350 metres and ownThe suite of available sizes for any type ership costs were included. of machine is a series of finite options. The conveyor width that the application RULE OF THUMB #4: Adit development selected for the 1,000 t/d scenario may and installed conveyor costs provide more capacity than necessary, Rule of thumb No. 4 tells us that the cost of which is reflected in a higher overall cost. purchasing and installing a long conveyor is Alternately, it might have selected a truck roughly equal to the cost of developing the size in which an additional hauler would opening through which it will operate. But be necessary but not fully utilized, thereby the term “long” is not defined. For consisincreasing the overall project per-ton cost tency, the authors chose to investigate this associated with a truck transport scenario. rule of thumb using an adit length of 1 km (3,280 ft.). RULE OF THUMB #3: Cost per ton-mile The results of this analysis indicate that It is said that conveyor transport costs are this rule of thumb primarily applies to projtypically about 10% of those attributable ects near in scale to 5,000 t/d ore producto truck transport. This statement is vague tion. At this rate, conveyor purchase and in that it does not go on to define which installation costs are roughly equal to the costs are included, and if this relationship cost of driving an appropriately sized adit. is applicable to any specific distance. Our However, at production rates below 5,000 analyses tend to dispute this relationship. t/d, the cost of the conveyor is near half the On average, over all the scenarios we cost of driving the adit. Above 5,000 t/d, examined, total per-ton-mile operating the scenario is just the opposite and the costs for conveyor haulage were about cost of developing an appropriate open39% of those for truck transport. These ing tends to be about half the installed costs include the diesel (US$2.65 per gal- cost of the conveyor. Cost differences do lon) or electricity (US$0.087 per kWh) to begin to narrow as the transport distance is propel the truck or the belt, maintenance increased; however, the cross over in costs and repair parts and labour, tires and an (the point at which they are roughly equal) operator for the truck, and lubricants. All still seems to occur around 5,000 t/d. MAY 2020

Conclusion Rules of thumb continue to be a viable source of information when evaluators estimate costs of proposed operations at their earliest stage. They bring a level of practical experience to the estimate that provides a tangible boost in confidence of the results, which is difficult to replicate. However, there are drawbacks. Such rules fail to account for variations in wages and the prices of fuel and electricity attributable to the passage of time and circumstance of location. And with the availability of more and more reliable sources of current (and continually updated) cost information in formats that can provide very timely results, the risks of relying entirely on rules of thumb are increasingly unjustified. CMJ n

Sam Blakely is a cost analyst and geologist with CostMine (www.costmine.com), a division of Glacier Resource Innovation Group. He can be reached at sblakely@glacierrig.com. n Scott Stebbins, P.E., is president of Aventurine Mine Cost Engineering, and designed the Sherpa sotfware suite. He can be reached at aventsherp@aol.com.

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CANADIAN MINING JOURNAL |

HEALTH & SAFETY

Mining sector develops best practices for a COVID-19 world By Alisha Hiyate

n many jurisdictions around the world, mining has been classiﬁed as an essential service, allowing mines to continue to operate during the COVID19 pandemic. For a sector that takes safety extremely seriously, how are practices being amended to deal with this new reality and to protect employees and communities? From transport of personnel to site, maintenance tasks that require more than one person, and meal times, miners have had to rethink every aspect of operations to continue operating safely. Some of their solutions – including physical distancing reminders in the form of marking out what 2 metres distance looks like in areas where employees congregate – will be familiar to anyone who’s visited a grocery store lately. Even in jurisdictions where mines have

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been deemed “non-essential” businesses, operations must still maintain a minimum number of staff to maintain the site during care and maintenance. So physical distancing, new procedures around common areas, crew changes, etc., still need to be thought through and applied, with guidance from various health authorities. We asked miner Eldorado Gold and contractor Redpath Mining to share their experiences coping with the pandemic in the multiple jurisdictions they operate within. “We’ve utilized and followed guidance from Health Canada, the WHO, Centres for Disease Control and in some areas we’re relying on provincial and regional recommendations, and even in some cases local health units,” says Chris Betsill, manager of Health Safety and Environment with Redpath Mining.

Like others in the mining business, Redpath, a North Bay, Ont.headquartered mining contractor works at sites around the world. “I would say these sources of information reﬁned our strategies and many of our clients also responded quite well and provided their guidance and controls to prevent or reduce the number of cases on their property.” And that varies site by site and by client. “You’ve got remote sites where everyone’s in a camp; we’ve also got projects that are located in a city where people go home back to their families, so each scenario poses different challenges.” George Burns, president and CEO of Eldorado Gold, which has mines in Quebec, Turkey and Greece, says while the company has relied on guidance from multiple authorities, it’s been pretty www.canadianminingjournal.com

Far left: Disinfection at Eldorado Gold’s Efemcukuru gold mine in Turkey. Left: Physical distancing markers at Efemcukuru. Below: Practicing physical distancing during a meeting at Eldorado Gold’s Kisladag gold mine in Turkey CREDIT: ELDORADO GOLD

continued to evolve: As of Apr. 15, the Quebec government is allowing mines to reopen with strict sanitation and physical distancing measures in place, as well as longer rotations for crews in fly-in operations and a reduction of flights in and out of sites.

consistent on what measures need to be taken to stop the spread of the disease. “The high-level guidance is fairly consistent,” Burns says. I think what’s different is how fast the virus is spreading in each jurisdiction and then what the government determines is the appropriate action to be taken.” Eldorado’s mines have been affected differently by the crisis. While its mines in Turkey and Greece are still in full production, its Lamaque underground mine in Quebec had to be transitioned to care and maintenance after the Quebec government deemed mining a non-essential business in late March. That transtion was achieved within 24 hours, with the number of workers onsite reduced from hundreds to 35 required for care and maintenance. Remote monitoring technology allowed management to MAY 2020

There’s a great deal of collaboration happening within the sector, and not just within Canada but internationally – the industry is sharing best practices and then each mining association in a particular jurisdiction is sharing what the industry is doing to reduce risk and helping governments make informed decisions.” – GEORGE BURNS, PRESIDENT AND CEO OF ELDORADO GOLD.

provide support while working from home. Since CMJ spoke with Eldorado in early April, their operations situation has

COVID-19 guidelines Where operations have been able to remain open, guidelines and controls specific to COVID-19 have had to be developed, both to protect employees, clients, and communities, and to reduce the impact of the pandemic on the business. This has been aided by guidance from authorities, guidance from internal crisis management plans, and miners sharing best practices with each other directly and through local mining associations. “There’s a great deal of collaboration happening within the sector, and not just within Canada but internationally – the industry is sharing best practices and then each mining association in a particular jurisdiction is sharing what the industry is doing to reduce risk and helping governments make informed decisions,” says Eldorado’s Burns. “I’ve been impressed with the amount of sharing – and it’s not new for our industry when it comes to safety and health, there is no competition between companies. That industry norm is just continuing through this pandemic.” For mining operations, the physical distancing guidelines of 2 metres separation between people that have been CONTINUED ON PAGE 34

CANADIAN MINING JOURNAL |

HEALTH & SAFETY central to health authorities’ recommendations has provided some challenges. At their offices, miners have been restricting non-essential travel and, since the pandemic started to spread more widely in March, employees who can work from home have been working remotely. Limiting the number of staff who come into the office, and in some cases, implementing one-way entrances and exits has also helped reduce risk where employees need to go in. Companies are making use of relatively new technologies that were implemented pre-COVID-19 and now proving essential to business – for example the use of video and teleconferencing capabilities, and remote monitoring. “We have, like many companies been investing in technology over the last couple of years, and in particular, our video teleconferencing capability has worked fabulously,” said Burns. “So we have all kinds of crisis teams that are managing safety, hygiene and business management, supply chains, customers – essentially where people can work remotely, we’re leveraging this technology and it’s working fabulously.” At mine sites, stepped up sanitation, education around COVID-19 and health screening measures – including health questionnaires, and temperature screening – have been put in place to reduce the risk of bringing the virus in. Whenever employees are normally gathered together, procedures have been implemented to allow distancing have been put in place. For example Eldorado Gold is managing transport of employees

Redpath Canada donated 19,000 pairs of medical gloves to the North Bay Regional Health Centre in late March. CREDIT: REDPATH CANADA

to its sites differently, says Joe Dick, the company’s chief operating officer. “We don’t run any camp jobs, so we have transport. We have dispersed people so that we have physical distancing within transport. And in some locations, we’re doing a screening before you get on transport and in other locations, as you get off transport. Then, we also have deployed some staggered starts so that we don’t have those crowded areas at the beginning and end of shift.” Dick says the company is also using personal protective equipment (PPE) – face shields – in transport. “Most of our congregation points are in transport or at the start or end of shifts and through staggering and monitoring and screening, we’re doing quite well there.” Dick says PPE is also being used for some maintenance tasks where two or more people are required to work closely. “Then there are a couple of things that we discontinued until we figure them out, so in an underground application where we may be sanding steel sets or something like that where there’s close involvement between 2-3 workers at a

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time,” he added. Entry into common eating areas at Eldorado’s locations in Greece and Turkey, is managed with a certain amount of people allowed in at a time, and staggered. And like grocery stores, the company has placed markers on the floor as a reminder for employees to keep 2 metres apart. Eldorado has also installed thermal scanners at its Lamaque mine in Quebec, to prevent workers with an elevated temperature from entering the facilities. As Eldorado has implemented its plans, its also tried to verify that the controls that have been put in place are working and are practical, through task observation. Dick says task observation, which also helps to improve controls, is a best practice that will survive the current crisis. “From my perspective, the concept of task observation to make sure that what you’re doing is effective, and seeing management in the field observing is really good for the morale of the teams that are doing the work,” Dick says. Underground considerations Redpath specializes in underground mine contracting (construction and mining), where workers are often in close quarters. The company has limited the number of workers in transport – whether it’s in cages, buckets or in light vehicles – and mandated the use of masks when physical distancing is not possible. “Some examples would be riding cages down the shaft, bringing personnel into the mines in light vehicles – those are some specific situations that we’ve had where we’ve had to assess the risk and institute some unique controls to eliminate or reduce potential transmission of the virus,” says Betsill. “As far as using mobile equipment www.canadianminingjournal.com

or transporting people, we’ve implemented certain sanitization procedures in between shifts, periodically throughout the shifts, and like a lot of others, we’re also relying on PPE – gloves and respirators and in some cases face shields.” While Redpath’s projects are international, much of its staff is not necessarily locally based. With projects in Canada, the U.S., South America, Indonesia, Mongolia, Africa and Australia, the company would normally have many employees moving back and forth on their regular rotations, or on scheduled site visits. That’s not happening now because of international travel restrictions – and that means that some Redpath employees may be away from home until these restrictions ease. “We’re quite grateful for all the loyal Redpath people who have decided to work extended rotations due to these travel restrictions and we also appreciate the sacrifice that their families are making during these uncertain times,” Betsill says. PPE concerns Betsill says Redpath has been able to

transfer some PPE between projects in cases where one project has a surplus of materials. Redpath’s operations were able to donate 19,000 pairs of disposable gloves to the local North Bay Regional Health Centre at the end of March. But sourcing PPE at a time when it’s in extremely high demand is a concern. “We’re working closely with our vendors and clients to source PPE to protect our workforce from the normal hazards inherent to our industry, as well as those related specifically to the COVID-19 crisis,” Betsill says. “As they should, frontline health care workers and emergency services are taking precedence for some specific equipment that we also require. In some cases, our suppliers of this equipment are focused strictly on health care and emergency services, which we support 100%. So it’s something we’re trying to navigate now and I think that will be an issue for the next couple of months.” While the company wouldn’t normally require the N95 masks that the health care sector might use, it is considering PPE similar to that because of the potential to bring COVID-19 into a site and

the need to protect workers. In addition to PPE, other supplies – consumables and machine parts – are also a concern in the medium term. Communication Throughout the crisis, the importance of communication has become apparent. “Communication – when you’re in a crisis – comes to a higher state of being,” said Eldorado’s Burns. “We’ve always been focused on safe behaviours and safety practices – not only at work but encouraging employees to take it (safety) home and have it become a habit at home. And I think with the virus, the same thing has happened.” Burns adds that Eldorado employees have appreciated the company’s approach during the pandemic to reduce risk and at the same time, try to preserve the business and preserve their jobs. “I think that’s highly appreciated by our workforce, and we’re trying hard to articulate that reality to governments so that as they make their tough decisions, they can make an informed decision.” CMJ

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MAY 2020

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VENTILATION

ABB DISCUSSES THE BENEFITS OF VENTILATION ON DEMAND VoD can result in energy savings of up to 50% By Jan Nyqvist and Michel Serres

perators of underground mines must ensure that the subterranean working environment is properly ventilated. Personnel should not be exposed to excessive levels of CO2, dust, humidity, temperature, toxic blasting and strata gases, and, chiefly, nitrogen dioxide (NO2) emissions from diesel vehicles. In addition to duty of care considerations, the cost of supplying fresh air to underground mines, taking spent or contaminated air out, and monitor-

ABB installation at state-owned Codelcoâ&#x20AC;&#x2122;s Chuquicamata underground copper mine, in Chile. CREDIT: ABB

MAY 2020

ing and regulating air temperature in extreme environments means that ventilation systems are currently the largest consumers of power in underground mines, accounting for as much as 50% of energy use. Diesel engines in vehicles and other equipment, for example, typically waste 60-70% of energy in the form of heat, and additional ventilation is required to clear continuous tail pipe emissions. To mitigate these costs, ensure workers receive clean air where and when they need it, and manage constraints in hybrid mines that combine diesel and electric machinery, companies are turning to digital technologies that enable the supply of ventilation to be brought in line with actual demand.

Ventilation on demand (VoD) Ventilation on demand (VoD) systems employ sensors around the mine that transmit real-time data on key parameters such as vehicle use, personnel, and information from gas, flow, and temperature sensors to a central control system, enabling mine-wide control of fans and air regulators. VoD systems learn and adapt over time with more data available, intelligently adjusting and optimizing air flow to maximize air quality and minimize consumption. In addition, potential problems are identified more quickly and blast gases are evacuated faster, decreasing downtime. By controlling mine ventilation in this way, annual energy savings CONTINUED ON PAGE 38

CANADIAN MINING JOURNAL |

VENTILATION of up to 50% are possible. ABB Ability Ventilation Optimizer operates equipment according to actual demands dynamically calculated from mine production schedules and events, including event equipment status and location. At ABB, we use a positional tracking system to identify where people and vehicles are in the mine, and their ventilation demands. Based on that, an algorithm calculates the optimal set points of the fans and these are then communicated to the fans, which are all connected to the central ABB Ability System 800xA. In addition, positional tracking, also known as location tracking, could be used with other technologies through the system. Flow sensors feed back on the air flow in certain areas of the mine to ensure we have calculated the correct demand. For example, a gallery may have three machines in operation so we know the area requires 50 cubic metres of air per second. If the flow isn’t sufficient, the VoD optimizer recalculates and sends back new set points. It does this every 15 seconds, 24/7, monitoring ventilation entirely automatically. ABB VoD solutions To ensure a ventilation solution that fits the operational and organizational demands of different clients, ABB Ability Ventilation Optimizer is configured in three implementation levels. The first involves centralized supervision and control from ABB Ability System 800xA Operator workplaces, meaning equipment can be remotely started and stopped from the control room, and scheduled, negating the need for personnel to venture hundreds of kilometers underground to start a fan. Level two makes use of more information that is available. For example, tracking on demand functionality allows us to assess the significant differences in ventilation demands from electric and traditional diesel vehicles – control is of major importance in a combined hybrid fleet. We use that information to ventilate where clean air is needed and in the correct quantities. Subsequently, we can adjust the mine-wide ventilation system 38 | CANADIAN

MINING JOURNAL

based on the current air flow levels. Level three utilizes sensor feedback and advanced multi-variable control technology to govern and optimize air flows and quality in the entire mine, while minimizing energy consumption in real time. Level three involves fully automatic, closed loop ventilation. Algorithms calculate the optimal set points of the fans and the regulators depending on demand. The flow sensors then tell us how well we did, and we can update the algorithm depending on that initial measurement. Boliden employed ABB Ability Ventilation Optimizer at its Garpenberg mine in Sweden; energy consumption by fans fell by approximately 900kW, which equates to a reduction of around 40%. At Garpenberg, they have VoD level two up and running, and level three. We are also working with LKAB on its SUM project. They are putting a lot of effort

into transitioning to an electric fleet, autonomous driving and increasing productivity by 50%. LKAB has 1,000 fans underground, and so VoD is a major part of that transition from an energy point of view. Managing constraints in hybrid mines Increased electrification in mines, particularly the transition to electric vehicles (EVs), will inevitably do away with many diesel machines, thus improving air quality and the operational environment. The next major ventilation challenge in underground mines will be around developing a hybrid solution to manage the existing diesel fleet and the additional electrical fleet, meaning you will not have the same constraints in terms of removing CO2 and fine particles from diesel. The air requirement in a mine is driven by the machinery and the personnel

Ventilation objects and functions – Minerals library General Trends, alarm, documents, duct building, and exercise

Object On/off, multispeed. VFD, damper, manual and sensor controlled, local intelligence

Control Manual, scheduled, local, gate, time, motion, sensor, vehicle, flow demand, parent-child and model

Fan

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Engineering Drag and drop, standardized, low life time cost, easy to expand

www.canadianminingjournal.com

VoD systems learn and adapt over time with more data available, intelligently adjusting and optimizing air flow to maximize air quality and minimize consumption. Left: Illustration of a ventilation on demand system. Below: A schematic of a VoD system. CREDIT: ABB

deployment, but also by local regulation. ABB works with regulators to ensure that the new requirements for people working underground will also be understood in terms of new digital and electric fleet technologies. With fully electric mines yet to become a reality, in the interim operators will still need to deal with the efficient removal of blast and strata gases. In addition, as mines go ever deeper, cooling and refrigeration become more of an issue, with some mines operating at temperatures of 35Â° Celsius. There will potentially be a lot fewer people working in underground mines in the next couple of years, but operators will still need people there to perform

CONTINUED ON PAGE 40

Combine any layout and control strategy

Mobility

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Model relation

Tracking control Local control

MAY 2020

Parent child relation

AT sensor control

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VENTILATION ABB installation at Codelco’s Chuquicamata underground copper mine, in Chile. CREDIT: ABB

maintenance – and to be able to do that, we will still need to deal with the ventilation requirements of both fixed and mobile assets in accordance with specifics local regulation. We install temperature sensors on the ground and supply either more air or we cool it, depending on the mine area and the machines and personnel. Even if we transition to EVs or autonomous vehicles in the future, you still need to ventilate the mine efficiently and manage costs. In this scenario, the control system for the fans becomes even more important because you will need to adjust the ventilation to supply more air to those areas of the mine with diesel machinery to ensure healthy working conditions for the operators.

Reducing capex Going electric can mean a premium of roughly 25-30% on mining equipment. Reducing ventilation costs therefore makes sound business sense as a way of offsetting these additional capex costs. Using non-diesel equipment means less capex on ventilation, thanks to the relatively low-level requirements of EV equipment and less cooling requirements

for fresh air in the mine. If you are looking to benchmark through a comparison between a diesel and electric mine, then the ventilation requirement could be reduced by as much as 60-70%. CMJ – Jan Nyqvist is ABB product group manager, Digital and Automation Underground Mining and Michel Serres, is VP Innovation and Digital North America at ABB.

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FAST NEWS • SOFTWARE |

Updates from across the mining ecosytem

CONTINUED FROM PAGE 13

RPMGlobal leads information exchange standard

PMGlobal continues to play a role in the development of the International Society of Automation (ISA-95) committee’s latest Information Exchange Profile, which will pave the way for industry-specific integration scenarios for the mining sector. The most recent ISA-95 committee meeting led to “Part 8 – Information Exchange Profiles” being officially accepted as part of the global ISA95 standard. This follows 18 months of meetings to finalize the documentation and over three years of work to move the document from a conceptual phase to an approved extension of a standard; RPMGlobal played a prominent role in this process. According to Paul Beesley, RPMGlobal’s chief technology officer and member of the ISA-95 committee, this result “cemented the company’s position as a respected contributor and leader in mining enterprise integration.” “Having the extension to the standard accepted creates significant value to min-

RPMGlobal software. CREDIT: RPMGLOBAL

ing companies as it provides a blueprint for mining software vendors to work together to enable information to seamlessly move between systems,” he added. “This part of the standard will enable joint development of industry-specific integration scenarios which is especially useful when building off-the-shelf integration between mining technology vendors.” The ISA is a professional body responsible for developing standards for

the instrumentation and automation of systems across industries with the ISA95 standard adopted by key technology providers. “The ISA-95 standard has helped unlock a standardized communication language for mining technology providers and RPMGlobal is proud to contribute to the progression of the standard for the benefit of everyone in the industry,” Beesley concluded. CMJ

AI TO THE RESCUE, CONTINUED FROM PAGE 18 made, providing an auditable trail. Like DGI GeoScience, Kore is focused on extracting more value from data. The AI aspect of the Kore technology, Spector AI further improves speed of logging, but also helps automate rock classification. As every project does rock classification differently, a model has to be trained specifically for each project. “At a new project as they start scanning the images of the rock, the geologists use the software to tag the images with rock types – that creates a training set for AI,” Gerrie says. “Over time, when there are enough statistics, enough images to train an algoMAY 2020

rithm, then it can start predicting and further save the geologist data entry time.” The geologist reviews and accepts and/or edits the AI predictions, thus remaining in control. Kore has deployed Spector systems in Canada, the U.S., Chile and Australia, and successfully trained AI models to predict a variety of rock type classifications and geotechnical attributes. As for the speed of logging, a single geologist working with the system at one project was able to log up to 1,500 metres of core in a single day. While that was under ideal conditions, Gerrie says the system can routinely handle 800 to 1,000 metres of core per day.

The system is well suited to high volume drill projects such as production mining or infill drilling. “To train a model for predicting rock type, you need a certain amount of metres,” Gerrie says. While about 70% of Kore’s clients so far have been majors, some junior miners have also signed up. “It’s still quite valuable for small scale exploration – you have a permanent digital record that can be accessed from anywhere, you can enter data faster, you can collaborate remotely – and there’s still the ability to speed things up on the geotechnical logging and to train for rock classifiCMJ cation.” CANADIAN MINING JOURNAL |

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M AY 2 0 2 0 | V O L U M E 1 | I S S U E 4

ON THE MOVE

Executive, Management and Board Changes in Canada’s Mining Sector n

TOP MOVES

MANAGEMENT CHANGES –pg 1 –

–pg 1 –

BOARD ANNOUNCEMENTS –pg 2 –

TOP MOVES IN THIS ISSUE

MANAGEMENT CHANGES Michael Holmes

Andrew Cormier

Elaine Dorward-King

Michael Holmes has been appointed OceanaGold’s permanent president and CEO and a director of the company following Mick Wilkes’ resignation. Holmes is a mining engineer with over 30 years of experience and joined the company in 2012 as its COO. He was previously the general manager of Glencore’s Alumbrera mine in Argentina, where he was responsible for mining and processing operations as well as for management of the feasibility study for the Agua Rica project.

Andrew Cormier has been appointed to the COO role with Orla Mining, succeeding Hans Smit, who retired in December. Cormier is a metallurgical engineer with 27 years of experience and was most recently with Alamos Gold as VP of development and construction. Prior to that, he served as project manager at AuRico Gold, where he played a part in the development of the YoungDavidson mine.

Elaine DorwardKing has been appointed an independent director of Sibanye Stillwater. Dorward-King has over 30 years of leadership experience in the areas of sustainable development, safety, health and environmental strategy. She was most recently with Newmont as the company’s executive VP of sustainability and external relations and executive VP of ESG strategy.

MAY 2020

David Guerrero has been selected as the Argentine country manager for Alpha Lithium; Brad Nichol is now the company’s CEO and president. Darryl Jones has resigned as president and CEO but will remain on the company’s board. J. Robert Logan has been appointed as an advisor to the board of Athabasca Minerals. Ryan Smith has been appointed CFO of Bearing Lithium with Ray Baterina also named corporate secretary. Robert Cinits has been appointed president, CEO and director of Blue Thunder Mining. Chad Williams, the company’s former CEO, is now executive chairman. Orin Baranowsky has also joined as CFO and corporate secretary, replacing Ryan Webster. Arv Gupta resigned as a director of the company.

Coal. Oosthuizen has served as the company’s interim CEO for over a year. Tim Thiessen is now the CFO and corporate secretary of Colorado Resources. David Cross is now the CFO of Crystal Lake Mining with Brian Moore resigning as CFO and director. Esteban Rivero Gonzalez has been appointed president, CEO and director of GFM Resources, following Jose Antonio Rivero Gonzalez’s resignation. Gold X Mining has named Paul Matysek its CEO and chairman, succeeding Rich Munson who has been appointed president. Scott Davis has joined Golden Predator as the company’s CFO, replacing Greg Hayes.

Emma Oosthuizen has been named CEO of Buffalo

CANADIAN MINING JOURNAL |

BOARD ANNOUNCEMENTS Karim Nasr is now a nonexecutive director of Altus Strategies. Nasr is the CEO of La Mancha Group, a private gold mining investment company with a portfolio of assets in West Africa.

Mary-Lynn Oke has joined the board of Anaconda Mining with Maruf Raza resigning as a director. Peter Fairfield has joined the board of Aurcana.

David Laing has been appointed to the board of Blackrock Gold as an independent director with Alan Carter stepping down from the board.

Pascal Germain has been appointed a director of Fieldex Exploration with M. Donald Lacasse resigning from the board; Lacasse will remain the company’s CFO.

Brian Fowler has resigned from the board of Blind Creek Resources.

Peter Hemstead is now on the board of Fireweed Zinc following Richard Hajdukiewicz’s resignation.

MANAGEMENT CHANGES, continued from page 1

Nick Demare is now on the board of Blue Sky Uranium.

Elif Lévesque has joined Guerrero Ventures as the company’s CFO.

Peter Mah has been appointed COO of McEwen Mining.

Jeffrey Reeder has been appointed to IMC International Mining’s technical advisory board.

Rebecca Moriarty is now CFO of Metallic Minerals.

Richard Williams has joined the board of Bunker Hill Mining as executive chairman; Williams is a director of Trevali Mining.

Michael Andrews has resigned from his post as president and COO with Japan Gold; John Carlile has also stepped down as a VP with the company. Andrews and Carlile will remain on the company’s board. John Proust, the chairman of the board, has assumed president and COO responsibilities. Rafaela Vartuli has also been appointed corporate communications manager. Lori Price has been named CFO of Kaizen Discovery, replacing Greg Shenton. David Lewis has been appointed exploration manager for Laurion Mineral Exploration’s Ishkoday project in Ontario. Yari Nieken has been named CEO and chairman of Le Mare Gold; Nieken has been a director of the company since 2017. Bryson Goodwin has resigned as CEO but will remain president and a director of Le Mare. Paul Carmel, chairman of Mason Graphite, has been appointed interim president and CEO.

44 | CANADIAN

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Melinda Hsu has taken on the CFO role with Minco Capital, following Larry Tsang’s retirement. Paul Dumas has stepped down from his position as executive VP finance and director with Osisko Metals; he will remain a consultant to the company. Gunmin Park is now VP of corporate strategies with Pan Andean Minerals; Ted Dai has resigned as VP of corporate ﬁnance. Martin Bajic has been appointed CFO and a director of Pinnacle North Gold following Emily Davis’ resignation. Ian Russell stepped down from his post as VP of exploration with Solstice Gold but will continue as a consultant to the company. Ken Ralfs has been appointed president and a director of True North Gems with Andrew Lee Smith stepping down as interim CEO and director. James Fairbairn is now the CFO of Xander Resources.

Diane Mann has joined the board of CAT Strategic Metals. Joseph Ovsenek has joined the board of Central Timmins Exploration with Charles Gryba resigning as a director, president and CEO of the company. Gryba will continue as a technical consultant. Matthew Carr has been named a director of Core Gold; Carr is currently an executive director of Titan Minerals and chairman of Andina Resources. Leonard Clough and Keith Piggott have resigned from the board. Terence Ortslan has joined the board of Crystal Lake Mining as an independent director.

Andrew Waller has joined the board of Glen Eagle Resources. Christopher Ecclestone has resigned from the board of Global Energy Metals but will continue as an advisor to the company. Rich Munson, Greg Barnes, Gordon Keep and David Laing have resigned from the board of Gold X Mining. Brian O’Neill has been appointed a director of the company; O’Neill is currently the VP of merchant banking at SAF Group, a structured credit and merchant banking firm. Eric Zaunscherb is now on the board of GR Silver Mining with Darren Bahrey stepping down as a director. Jim Greig has been appointed a director of Grizzly Discoveries.

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UNEARTHING TRENDS

Assessing the next move to succeed beyond COVID-19 By Jon Wojnicki

eteran executives of Canadian mining and metals companies have seen many adversities through their careers, including extreme market volatility and long cyclical troughs. Together with global peers, they have also witnessed many healthcare (Ebola, H1N1), political (wars, organized crime) and weather crises. The industry started off 2020 on a high note. Base metals visible inventories were trending down while prices were trending up. The electric vehicle revolution was accelerating, driving macro factors supportive for battery metals. Even capital markets were starting to show renewed interest in the sector. But the COVID19 pandemic has radically changed the once promising outlook. Despite the resiliency of this group, COVID-19 is causing a whole new playbook of operating and cashflow challenges – especially at a time when many balance sheets were already under strain. After the initial burst of energy focused on compliance, employee health and safety, and stakeholder communication, mining companies are starting to shift to the “next” phase. Logical next steps for the executive team are outlined in the EY Rapid Value Assessment framework (exhibit one) to assess the current state, stress test the impact of several scenarios on various operations, adapt value levers to make necessary moves on the core business and reposition to emerge as a strong business. Given the multitude of metal exposures and operating jurisdictions, there’s no single prescription for all Canadian executives to follow. However, several actions have emerged through our discussions with mining and metals executives: 1. Leverage government incentives: Understand what is available and worth taking. Get involved in discussions that are shaping programs directly affecting your business. 2. Take proactive actions on liquidity and debt: Develop clear

scenarios for the duration of operational shutdown, metal prices, currencies and input costs to forecast cash levels and covenant compliance week-by-week to better determine the level of: a. Management actions to take to reduce cash outflow (exploration, growth capex, working capital inventory levels, dividends and discretionary expenses). b. Engagement of lenders in dialogue on covenant relief or reﬁnancing and increasing working capital lines and consider creating or increasing stream ﬁnancing.

MAY 2020

c. Hedging

actions to lock in low energy costs, currency rates and in some cases collars or another form of hedging metal prices if required to avoid distress. d. Proactively put themselves in play or file Companies’ Creditors Arrangement Act (CCAA) to be prudent and keep control of what could rapidly become a downward spiralling situation. 3. Review portfolios: Identify assets that consume cash and management attention yet have limited long-term strategic value, and either sell or find the right partners to take them on. These could be exploration assets, but this also applies to prefeasibility or feasibility projects that no longer fit the owner’s profile or infrastructure that could be sold with a lower cost of capital. 4. Align on how to deploy excess capital: For some fortunate miners – such as select gold producers – the combination of record high gold prices in most local currencies, all-time low oil costs and cheap borrowing costs may create debate between stakeholders on how to deploy excess capital or balance sheet capacity. Companies need to proactively establish a set of priorities and criteria for capital deployment that balances capital required, potential return and risk. Having a strong alignment across the business and stakeholders can reduce angst and lead to more strategic long-term decisions. While these considerations may not be applied directly by every business, they’re a good touchstone to maintain perspective when regrouping or prioritizing activities. A sharp eye and an agile mindset will be essential to working through these and coming out on top on the other side of COVID-19. CMJ JON WOJNICKI is a partner and Canadian co-leader of the EY-Parthenon practice of Ernst & Young LLP. He’s based in Toronto. For more insights, visit ey.com/en_ca/covid-19. CANADIAN MINING JOURNAL |

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Sandvik Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24/25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . artisanvehicles.com/z50 Smithco Side Dump Trailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . sidedump.com/cmj SMS Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . smsequipment.com SRK Consulting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . srk.com T.D. Micronic.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . tdmicronic.com Titian Environmental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . titanenviro.com TopVu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . topvu.ca Westpro Machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . westpromachinery.com

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Canadian Mining Journal May 2020

Articles inside

CMJ speaks with Lorraine Howell, VP of innovation and continuous

CostMine investigates how well “rules of thumb” used in mining really work, focusing on conveyor costs

How artificial intelligence is being used to speed up the exploration process and improve the odds of success

Fortinet Canada’s Graham Bushkes shares four ways miners can reduce their cyber risks

Miners develop best practices for operating during a pandemic