You have mail…
The message said: “Carly, I read about you on a LinkedIn posting and based on your content, I thought you would be interested in hearing about our company…”
I am always interested in new ideas, so I looked up the company’s website – a Canadian start-up called Novamera – and what I read astounded me. I scheduled a call with president and CEO, Dustin Angelo to find out more and was not disappointed.
Novamera is developing a technique called Sustainable Mining by Drilling (SMD) which is essentially like keyhole surgery for mining. It uses intelligent sensing systems and precision excavation techniques to take only ore and leave waste rock in the ground. Where applicable, the technique ticks all the environmental, social and risk management boxes on stakeholder agendas, and then some.
Alas, I wasn’t planning to cover drilling or precision mining on The Intelligent Miner during 2020. Patience isn’t my strong point, but I added the topic to my 2021 editorial calendar and, a few months later, Angelo and I returned to Zoom for a more in-depth discussion…
SMD: how does it work?
First things first: how does the system work?
“We’re focusing on steeply dipping, narrow-vein mineral deposits, which we think SMD can mine more economically, sustainably and safely than conventional selective mining methods,” Angelo explained. “The technology incorporates sensors, machine-learning algorithms and drilling technology in a two-pass system.
“In the first pass, we drill down the dip of the orebody using a diamond drill to create a pilot hole halfway between the hanging wall and footwall of an ore vein and we guide the drill bit using our near borehole imaging tool (NBIT). Then, in the second pass, we use a large diameter drill to follow the pilot hole and excavate the ore.”
The ore comes to surface via reverse circulation, airlift assist technology; a low-energy way to do cuttings transport. The first-generation SMD system will use a pile-top drill rig like those used in the marine construction industry, equipped with a 1-2m diameter drill bit, to do the large diameter hole excavation.
Once the cuttings are at the surface they are then fed to a solid-solution separation system for dewatering before being transported to a local mill via truck or pipeline.
“That sequence, first and second pass, happens all the way down the strike length of the vein,” said Angelo. “We drill a series of primary holes and excavate every other hole. Then we backfill those using a combination of tailings (waste material) from ore processing and cement to create paste backfill. We expect to return about 50-60% of the material that we took out back into the ground. The holes basically become landform tailings storage.
“Then we go back and drill the secondary holes – there’ll be some overlap, you do take out some of the backfill in the second phase, but that can be returned again. After you’ve drilled the first and second pass, you should have mined the entire orebody.”
Where can it be used?
It’s a clever approach. The system layers best-of-breed technologies from the market with some of Novamera’s own patent-pending innovations to create a unique solution.
Are there any restrictions on how narrow a vein you can mine? I asked.
“Not really,” Angelo replied. “Right now, we’re working with 1-2m cutter heads, but production drills can go bigger and smaller. On the larger side, say greater than 3m, we’ll run into other bulk mining methods though and the technique will be less economically feasible in comparison.”
Given that the technique is designed to mine veins of ore, commodities like gold, platinum, silver and perhaps copper will be some of the primary targets.
“We’ve actually been looking at battery metals too like cobalt, especially in Canada, and rare earths,” Angelo added: “It’s really about the structure and geometry of the orebody as opposed to the actual commodity.
“The density contrast between the mineralised zone and the host rock is also important, because our primary sensing tool uses borehole radar to detect the interface between the country rock and the mineralised zone.”
From problem to solution
Prior to founding Novamera, Angelo was president and CEO of Canadian gold producer Anaconda Mining and, while looking to solve a challenge at one of their deposits, he and his team stumbled across a much larger opportunity…
“When I was at Anaconda… There was a deposit on our Pine Cove property in Newfoundland, called the Romeo and Juliet deposit,” he explained. “It was a steeply dipping, narrow-vein deposit that, based on our research, contained at least five to 10 times the gold grade of the open-pit operation we’d been running.
“We tried for many years to figure out a way to mine it economically using conventional methods and equipment, but we just couldn’t make it work.
“In 2017, my business partner Allan Cramm and I started talking to Memorial University [of Newfoundland] and one of the professors there, Dr Steve Butt, who runs the drilling technology lab. We decided to partner to look at some ideas.
“One day, Allan and Steve were standing in our open pit looking up the walls and they noticed that the drill and blast holes deviated – they curved along their length – and that’s when the lightbulb went off that maybe we could use directional drilling to mine Romeo and Juliet from the surface.”
The big ‘aha’ moment came when the team took their concept to the Disrupt Mining competition in 2019. The event was designed to bring ‘exponential disruptive technologies to the mining industry’ and, at the time, was run by Goldcorp.
“We were a finalist presenting on behalf of Anaconda and when the contest was over, folks that represented companies and operations all over the world came over and said they thought our technology could potentially help solve issues at their mine sites,” said Angelo.
“That spurred us to take the project in a new direction – spin it out of Anaconda, go raise venture capital funding, bring the technology to the mining industry and hopefully make a difference.”
Sustainable and economic
What are the benefits of this keyhole surgery approach? I asked.
“There are lots,” said Angelo. “We got into this thinking about the economics initially, but the sustainability aspect of SMD is becoming more and more important.
“Compared to conventional mining techniques, SMD has a smaller footprint, there’s no blasting, it’s a selective mining method so you’re not extracting waste material, a lot of the tailings that are generated go back into the drill holes as landform tailings… Your entire footprint is shrunken.
“We’ve also done preliminary work on greenhouse gas emissions and energy consumption. We looked at the Costerfield mine in Australia and compared their underground selective mining method, which was cut and fill, to using SMD.
“And we saw a 50% or more reduction in energy consumption, and CO2, NOx and SOx emissions. There’s still work that needs to be done on that, and certainly it’s going to vary on a case-by-case basis, but the numbers are very encouraging.
“From an economic standpoint, the time to ore is a lot shorter because there’s no mine development, your cashflow profile looks better than with a conventional mining method, and the upfront fixed cost is low because you’re not building ramps, shafts or portals [infrastructure].
“The upfront capital requirement is significantly reduced and that makes SMD very compelling, particularly for junior miners.
“There are operational savings too. Based on our modelling, SMD costs around US$80-100 per tonne, compared to US$125-200/t depending upon the situation for conventional selective mining methods. There are savings in tailings management, even in crushing and grinding because some of the cuttings are at a size that will allow them to bypass primary crushing.
“It’s a more consistent process too, especially versus underground mining which is start-stop with production and development.”
Less risk equals new opportunities
SMD is also less risky because mining is done from the surface and all equipment is mobile so can be easily redeployed; no investment is left in the ground.
“That aspect is pretty enticing,” Angelo said. “You can actually have a portfolio of small, diversified, low CAPEX projects to create the scale of production you may ultimately need. Doing it in a diversified way significantly lowers a company’s risk.
“The ability to develop and operate small-scale operations at the lower end of the cost curve is really a sea change in economics considering what’s been going on in the industry for many years now.”
Last, but certainly not least, is the safety aspect. People are never at the mine face. They are on the surface, in a cab and out of harm’s way.
“Ultimately, we would like to have a system that can be used underground too,” Angelo added. “But again, operated underground in existing infrastructure, not at the face.”
And of course, SMD doesn’t have to (although it could) be used as a primary mining method. It can be used to mine small areas of orebodies, satellite deposits or extensions that are uneconomic to extract using other methods.
“We’re not trying to replace mining methods and upset established operations,” Angelo was clear. “The goal is to use SMD to unlock mineral resources that are uneconomic to mine with conventional methods. The other application is at brownfield and greenfield sites where no existing mining method works, or it’s not compelling enough to attract investment.
“At those sites, SMD can be used as the primary method, or companies can use it as the initial method to bootstrap their way into a larger scale operation.
“The imaging tool could even be used standalone in exploration applications, although we’re not focusing on that just yet. The tool in the first-generation system can ‘see’ up to 5m in radius from the borehole. That structural information could be used to optimise drilling programmes as well.”
What’s next for SMD?
Which led to the obvious question: where are you going with this technology – are you going to commercialise it or offer mining-as-a-service?
“Right now, we’re looking to provide the NBIT as a service, and the drilling aspect will be outsourced,” explained Angelo. “We want to be the specialists that engineer and design the entire system and put together a mining plan for clients… kind of like the Schlumberger style of integrated services.
“There’s a lot of expertise that goes into processing and interpreting the data. We’re using machine learning algorithms and, if we continually improve them using information and learnings from different sites to build a database, then we can improve the speed and accuracy of interpretation which will benefit all of our clients.”
In 2020, Novamera received some seed funding from Chrysalix Venture Capital, and the company is looking to raise a further C$5 million, mostly to support a test programme at Romeo and Juliet later this year.
“We’ve already done two rounds of testing for the NBIT at Romeo and Juliet,” Angelo told me. “The results are very promising. We’ve been able to identify the interface between the host rock and the mineralised zone, and the positioning of that within the hole.
“We’ve got a couple of mini-pilots that we’ll be doing over the next few months, but the goal is to have the entire system ready for a full-scale field trial at Romeo and Juliet by the end of June.
“We’ll test the two-pass process and backfilling as well – the entire mining and reclamation process. That’s probably going to take about a year considering seasonality.
“By the end of 2022, we would like to have our first-generation commercialised product ready to go.”
An alternative to the status quo
In mining, the challenge with new technologies is not just conceiving and developing them but getting them adopted; everyone likes to be first to be second.
We are, however, at an exceptional point in time – I would even go so far as to call it unprecedented in the industry’s history – where a great number of environmental and social pressures are converging.
These are forcing companies to consider new ways to mine, new processes, new equipment… The old ways will not remain socially or economically viable at scale for much longer, and companies that want to profit rather than just survive must move swiftly.
While it is still difficult for new techniques and business models to gain traction, the odds are tilting in the favour of companies like Novamera.
Angelo agreed: “Lots of mining CEOs talk about social licence to operate. Things like greenhouse gas emissions reduction targets are top of mind, and capital is getting harder to access if you don’t fall into the ESG [environmental, social governance] bucket.
“All these issues are converging and being magnified, and because of this, companies need to start looking at different ways to mine. Precision mining and, specifically, SMD is an out-of-the-box process but it’s worth taking a closer look at. Companies must start now to achieve change in any reasonable amount of time.”
At the IMARC event in 2020, Mark Cutifani from Anglo American, said something to the effect of ‘scale is not going to solve our problems’ in one of his presentations.
“I thought that was really interesting,” said Angelo. “Because for some time, mining has been all about ‘bigger is better’. Which I get from a theoretical standpoint, but after a while there are many practical issues like permitting, social licence, environmental impact, and the difficulty of continually finding very large deposits that start to weigh in and knock that theoretical calculation off its edge.
“Instead, what if you look at generating more profit from the assets you’ve already got? What if you apply a new mining technology to the abundant small-scale steeply dipping narrow-vein deposits around the world? Precision mining like SMD offers a way to do that.”
The future of precision mining
Where could we be in 10, 20, even 30 years’ time? I asked.
“I can envision a time, way down the road, where massive drills are used that are even more efficient than bulk mining methods today,” replied Angelo.
“But, in the near term, precision mining’s role and its entry will probably be in smaller deposits in the junior mining space where companies are looking for innovative ways to get into production, to generate cashflow, to not always have to rely on capital markets to fund their plans.
“I can also see mid-tier and large cap producers employing SMD to unlock steeply dipping narrow-vein mineral resources that are not in their current mine plans but can yield high margin ore with our technology. It’ll start with periphery orebodies or zones, which is key for us because they are low risk initiatives that should not disrupt miners’ core operations. This is just upside for them.
“No matter the level of mining – large cap, mid cap or juniors – you still have to find those who are willing to try new technologies. We’re trying to understand who those people and companies are, where they are in the world, and how many deployments are needed to gain mainstream acceptance for SMD. That’s our key challenge now.
“There are many things that are going to happen in the next 20 years that we don’t even know about yet, that will play a pivotal role in decision making in how we go about mining.
“What I’m certain of today is that precision mining can provide a solution to many of the mining industry’s current challenges.”
Loved the information in this article. Had no idea this had developed this far. Would love to know how to invest in this venture.
Thanks for an interesting read.
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