Underground Contractors
The men and women behind the push for more underground resources
Will underground mining become miners’ choice of necessity in the coming years? Faced with the inability to find economic open-pit deposits, moving towards brownfield underground operations is a trend that appears likely to be sustained in the coming years. Worldwide, the underground mining market is expected to reach US$25 billion by 2031. Declining ore grades in Nevada and worldwide have forced operators to dig deeper underground into the earth’s crust. In this context, the remoteness and harshness of the operating environment at Nevada’s underground mines highlights the necessity to pick the right contractor, which like mineral resources, Nevada is endowed with.
In February, Kinross opted to go underground rather than pursue open-pit expansions at Round Mountain. Leading to higher margins and higher returns, the combined underground operation could produce about 150,000 oz/y at an all-in-sustaining cost of US$1,000/oz to US$1,100/oz. Familiar with such operations is Practical Mining, who in 2021 headed the PEA for i-80’s McCoy-Cove mine, and in 2022 carried out mine-planning for an in-house study of the feasibility of the Round Mountain underground expansion.
Adding mine life and resources to existing operations is more important than ever for operators, and in that area, Small Mine Development (SMD) has been a reliable contractor for Nevada’s majors for decades. One of the most prevalent examples of Keith Jones and his team’s work is with NGM at Turquoise Ridge. Having had plans to establish a third shaft for almost five years, the major contracted SMD to rehabilitate and install high-capacity ground support in the older workings, ultimately enhancing the structure and ability to dig for more, and for longer. “It was originally thought that Turquoise Ridge would have a 10-to-15-year mine life, but some of these workings are now well beyond that, and resource expansion and operational improvements have added mine life requiring ground support upgrades”, explained SMD general manager Keith Jones.
The Nevada contracting space is one of collaboration, as experienced contractors have found that leveraging different sources of expertise yielded better results at underground mines. One example is at First Majestic’s Jerritt Canyon mine, which in recent years saw Practical Mining provide SMD with LIDAR scanning capabilities. About this asset, Dagny Odell, owner of Practical Mining, expanded: “We invested in a fully robotic LIDAR scanning system that can be deployed on a drone and flown underground and uses the light in form of a pulse laser to measure ranges beyond the line of sight and communications before return to the base point. We get a very detailed scan of an underground opening, which helps to get to areas one cannot safely access otherwise.”
"The future for underground mining looks bright as mining is essential for everyday life. As deposits become deeper and more difficult to find, underground mining will flourish."
Keith Jones, CEO, Small Mine Development (SMD)
Accessing the inaccessible
Using drones where humans cannot set foot is certainly appealing. Underground mines require extensive visual inspections to monitor ground conditions for safety and productivity reasons. After excavation, underground mine sites can be dangerous, meaning accessing information in the resulting open cavern – called an open stope – can be challenging. Despite some instances, in comparison with jurisdictions like Ontario, Nevada appears to be a late adopter of drones at major mine sites, with only a limited number of sites relying on airborne technology.
Key operators in the Nevada contracting space are facing similar pushback from majors in terms of investment in electric material underground. Despite boasting environmental, safety and productivity benefits, the application of electric technologies also comes with a share of uncertainty that – to date – has held back statewide adoption. Emphasizing the importance of electrification in underground mining, Jones observed the gap between Nevadan majors and their peers worldwide: “I believe Nevada companies will be late adopters of these technologies as they can be very expensive and major clients want quality contractors, but also demand fair pricing. There are still many unknowns with electrification technologies.”
Looking ahead, the surge in activity noted by contractors is unlikely to be only the result of high gold prices. As deposits become deeper and harder to find, underground mining will flourish, shared Jones. This boom in activity in Nevada will undoubtedly bring about further capex shares devoted to innovative approaches to underground mining, as decade-old mines gradually accept the need to rely on technology to answer the complex puzzle of finding more resources, more safely.
Image courtesy of Juan Jose Napuri via Unsplash