Only A Matter Of Time Before Mining Companies Embrace New Technology – Mining Executive

(Kitco News) - Lower gold prices and lower ore grades is going to force the mining industry to accept new technology and new practices according to one innovative Quebec-based mining company.

Nippon Dragon Resources (TSX.V NIP), continues to see growing success with its thermal fragmentation mining method. In basic terms, Jean-Yves Therien, vice-president of business development, explained, in a recent interview with Kitco News that intense focused heat is used to extract the ore from the rock. The heat causes a spalling effect, shattering the rock and making it easier to extra the ore. In a technical paper, hosted on the company’s website the process is similar to what happens when a cold glass is placed in hot water.

Therien said that the spalling create small rock flakes, which reduces the need for major rock crushing at a mill, but also means that companies can be extremely precise in where they drill. According to the company, they can follow gold seems as narrow as 30 centimeters, up to 110 centimeters.

Jean-Yves Therien, vice-president of business development at Nippon Dragon Resource shows rock flacks that are create as a result thermal fragmentation mining method.

“It’s precision mining; we just extract what we need to extract,” he said. “We extract the resource, faster easier and cheaper.”

The company is already seeing increased interest in their technology with projects in South Africa, Australia, Japan and Canada. However, Therien said that is has been a struggle to gain market attention as most companies are fixated right now on extracting as much gold as possible from their ongoing projects, focusing on high-grade deposits in an effort to reduce costs.

“Mining executives are not used to seeing big innovations. We are asking them to change the way they look at their deposits and that can be difficult to accept,” he said.

Therien explained that instead of focusing on grams per tonne, mining executives need to start focusing on the reserves in the identified seams and how to get them.

“It is about mining ounces not tonnes,” he said. “I would rather have a 100 small mines producing 10,000 ounces a year at $600 an ounce than a big mine producing 100,000 ounces at $1,200 an ounce.

However, at some point companies, from small to large producers are going to run out of high-grade reserves, said Therien. He added it prices fall below $900 an ounce, many companies will be forced to find new solutions.

Not only does Therien think Nippon Dragon can reduce costs for mining companies but the technology could also expand the life of mines. Some of the projects Nippon Dragon has worked on in Quebec, South Africa and Japan has been with previously established mined.

In Quebec alone, between 30 and 50 mines could be reopened using thermal fragmentation mining method to produce gold at $600 an ounce, he said. In Africa, Therien said the possibilities could be endless than more than 3,000 established and closed mines on the continent.

“With our process, you don’t need to find any new deposits in the world in the next 20 or 30 years,” he said.

“The remaining reserves in the ground doesn’t fit with the current mining method,” he added. “The industry needs to find a new method that fits with the current reserves. Lower prices will eventually motivate executives to change the way they think.”

While not talking about a specific company or technology, Bruce Sprague, Canadian mining industry leader for EY, in a recent interview with Kitco News agreed that if mining companies want to attract new investor capital, they have to continue to reduce costs and that means embracing new innovations and ideas.

“Companies need to do something to realize the benefits of innovation,” he said.

By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow Neils Christensen @neils_C