Original Sixteen to One Mine, Inc. - Forum Topic: "How to Approach Thin Veins & Cost"



	July 19, 2019 Friday

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Topic:
How to Approach Thin Veins & Cost

By Hans Kummerow
02/06/2009 9:57PM

The Drill-Blast-Muck sequence is a well-proven but labour-intensive way of mining. The feast or famine experience in following a vein may yield a rewarding experience for true gold-bugs on a team of share-holders, managers and miners. It is not the type of investment that people will want to get into, who are weighing the odds of r.o.i. strictly on the basis of cost and yield expectations.

In my judgement, the best bet for Origsix to control the cost of future gold-production in the Allegheny Vein System would be to wait for significant improvements in technology - namely non-destructive gold detection technologies over larger distances and remote-control mining robots.

In the meantime focus on eliminating debt and interest payments through the sale of all assets exept the land and the production and processing equipment.

Go into hibernation status and stay on the maintainance only mode until a major technological break-through surfaces. It may be just around the corner.

By FranSix
02/03/2009 9:15AM

Part of the problem at present is viewing labour as a liability, imo. Certainly there are liabilities in operating machinery that breaks down chronically in a mine, mostly due to rock chemistry.

The primary driver of an anti-labour culture is the collapse in value of the currency. Labour is 'worth less' because the value of that productivity has declined, not because those performing the task at hand are inherently faulty, or a perceived 'workers conspiracy.' If anything managements are obdurate and work to rule by comparison.

An interesting macro economic is forming, though should currency firm under deflation along with gold prices. This favours a labour solution.

Thank you for the suggested reference, I will look it up.

By Mark Wolff
02/02/2009 3:45PM

Am surprised at your attention to labor vs. automation economics, Fransix, after your inquiry about robotics. Thin veins by nature challenge the economics of driving a stope big enough for people and heavy equipment to access profitably, so Rocmec is advancing a new standard for mine architecture in working DOWN on narrow-vein deposits, reducing gange rock removal costs by up to an order of magnitude. Please be sure to look at their website .pdf about how this approach lowers labor and other mine overheads.

Over it's useful life, capital equipment such as a conveyor belt vs. manned mucking can easily beat Paul Bunyan at the bottom line, also eliminating risk from unfortunate safety incidents which keep labor overheads high here in CA. As with mainframe computer makers during the advent of PC's, the larger players who have tested automated approaches seek to protect their R&D and price their equipment accordingly, so small hardrock operators can only await someone to integrate things underground on a PC platform, to function as do automated warehouses above-ground. Skilled workers will always be needed to service equipment and perform geologic evaluations, yet the advantage to 24/7 production scheduling around those constraints using remote operators remains compelling, many new job definitions to come about eventually.

Any perceived 'intensity' is merely a measure of the vacuum of awareness being filled suddenly: here's another clue...search 'microwave drill' to see promising test results in cutting rock via these means. Could an array of recycled oven magnetrons weighing but a few pounds come to substitute for jackhammers? The notion of cutting stopes just wide enough to accommodate metal detectors, leaving in place barren ores, has great appeal as a way to minimize the amount of material which must exit the portal for processing.

Thermal methods are touted within independent studies as capable of reducing overall industry energy consumption by as much as 50%, so the better mousetrap has arrived given multiple economic incentives. Mines like the 16-to-1 which languish in need of attention from capital markets may find newly curious investors if such cures are embraced, yet are Catch-22ed so far as raising funds for R&D along high-tech lines. Our tiny market niche has yet to garner attention from equipment vendors towards mineral resources invisible to balance-sheet recognition as things stand in conventional mining due to perceived risk, a hurdle which will continue to send capital towards open pit and offshore projects until, as in the halcyon days of mining innovation a century ago, someone simply builds and demonstrates the innovation.

These posts are meant to attract attention from parties wishing to conduct operational risk/reward audits to updated 'state of the art' technical assessments at individual mines (each is different), with a goal of bringing together all who share a vested interest in seeing high-tech products emerge soon to above-and-beyond safety and environmental standards. To your point on perhaps reassessing the role of labor relative to enhanced means, it's all about how you view the problems when thinking in terms of human resources. As an example, hearing problems are unavoidable in mines, and much grant money is available to come up with ways to prevent hearing loss underground beyond headphones, the 'state of the art', yet nowhere is such funding support available for integrated solutions to remove workers to quiet working environs outside the portal via networked remote-control means.

Some may say this is due to reasons political, to protect skilled mining jobs, but in truth it's because networking tech is off-the-shelf now, grant money for that spent decades back at the dawn of the Internet. The underground will always carry avoidable risks, but how hard will labor with it's vested interests, or governments push to change the status quo? Is the future there really so difficult to imagine when hardrock 'tech' has remained essentially frozen for the last 50 years?

By FranSix
02/02/2009 8:50AM

Wow. Very intense, Mark!

From my own experience, I can attest to a niche labour market in the resource sector which can provide workers capable of doing the same work without resorting to using mechanized production methods where physical labour is warranted.

I have worked in the silviculture on contracts in B.C. and Alberta and I can vouch for this group of labourers who can produce far in excess of the light standards you would find in the larger society and urbanized areas. Of course, they make a lot more, but they produce more:

http://www.brinkmanforest.com/?p2=/customcode/brinkman/news.jsp&id=233

If the problem is labour, then a reassessment of the labour cost vs. productivity equation has to be assumed to make narrow vein mines work.

F6

By Mark Wolff
01/31/2009 1:19PM

This forum topic can achieve considerable depth, as FranSix seeks technological alternatives to conventional mining practice. As a new contributor with years working the conceptual side of how to eliminate environmental and labor risk concerns leveraging IT advances within narrow vein settings, it is possible to say there are solutions, many proprietary, that can be integrated now 'off the shelf' to achieve this end. Let's tackle the basic question first.

The ancient Egyptians used fire and water to heat and shatter ores, and recently a Canadian junior, Rocmec Mines, has been championing a variant of this thermal fragmentation approach in conventional mine settings. Good information at their website regarding this, yet they use diesel as fuel...not something that will fly in CA near water tables. Such means would tend to destroy specimen occurrences as at the 16 to 1, yet as an upside, ores removed by thermal methods are 'pre milled' to an extent in being shattered already, easier to liberate values from. As far back as the 1960's, Russian miners have employed microwaves to improve yields on certain refractory ores, and obviously lasers can make precise cuts in stone, too.

Heat is your answer, but where does the 'sweet spot' lie along the electromagnetic spectrum? What new safety concerns or regulatory exposures emerge from a given choice? One thing for certain...to install and manipulate remotely a gas torch or other lightweight heat emitter beats attempting to automate heavy equipment or drill assemblies, even as that approach has been demonstrated successfully in certain larger mining operations.

Remote 'green' mining is a holy grail to small, independent operators, yet anathema to those threatened by the notion of 'skilled' mining jobs being replaced by unskilled operators working a deposit from home or outside the portal. No where but in mining is the irony so readily apparent of advances in IT having failed to extend to production methods, as workers needlessly continue to die underground. New jobs need to be created now, and my business agenda is to offer up tangible solutions that circumnavigate regulatory concerns by design, TODAY.

My own demonstration project at mines in CA and CO with support from a major networking vendor and bank financing was derailed last summer as credit markets froze, still ready to go if any readers wish to pursue business discussions. Kudos to Mike and all at the 16-to-1 for the many arrows they have taken trying to keep alive our proud mining heritage; better to pioneer new methods elsewhere rather than attract additional regulatory scrutiny arrows within that production setting. Any effort to address and resolve safety/emissions concerns via innovation opens the door to investor attention a bit further, benefiting this moribund industry segment as it returns to visibility among financial players.

For further information, please contact mwolff@thegrid.net.

By bluejay
01/30/2009 8:44AM

The Seabee Mine 125 kilometers northeast of La Ronge has been successfully producing gold from its narrow veins since 1991. You may want to access clauderesources.com under mining for further information.

By FranSix
01/30/2009 6:57AM

Yes, they have been attempting to promote their mine plan for about two years with little response from the market. But the flip side of the coin is that no matter how good the drill results are, the market has not responded either. The technical reports available on the website are comprehensive, though there are few mining analysts making any statements about the company.

By gfxgold
01/30/2009 6:11AM

FranSix, I had a gut feeling that you were going to say Canada or Alaska. So far, all I have seen is company hype that is just being repeated by other news sources. Maybe some of the other readers of the Forum would like to chime in on any of their research into this company and holdings. Company website is:
http://www.goldenbandresources.com/

By FranSix
01/30/2009 4:07AM

I thank 16 to 1 associates for contributing to the discussion, its more than I could hope for. I wanted to sort out whether there was any credibility gap with the management of my gold mining company.

They recently took out a bulk sample on one of their deposits which grades far below their original very conservative estimate. Its a very legitimate effort, not a swindle, though it has had its problems. To my knowledge, the company does not engage in hedonic reporting.

The company does not exaggerate to my knowledge and used grade capping to reduce outliers from standard deviation.

There have been problems in the past with this area, and mines have gone out of business due to dilution of the ore. There was an addtional factor which I believe contributed, which was low recovery rates in the 90's. I am guessing that nobody has any experience dealing with narrow veins and do not appreciate the differences between bulk extraction methods and narrow vein methodology.

The stock market crash led me to be very concerned at the outlook for the foreseeable future, but I believe a higher gold price will impose an optimisation of methods.

The company I am invested in is Golden Band Resources (GBN.V), a Saskatchewan-based company which has been accumulating and consolidating property in the La Ronge gold belt, slowly inching its way towards production. This is one of the few gold junior explorers where the wheels did not come off the cart during the crash.

The deposits in this belt are gold porphyry intrusives where the low grade alterations are small,(5m. tonnes to 250m depth.) but the veins are comparatively wide when measured against other deposits of similar geology. Theoretically, I presume you could mine the veins alone without leaving open pits, there are also higher grade deposits with no alteration halo, so you would use underground mining.

There are also quartz carbonate intrusives as well, but I presume that this is some kind of formation very similar to the establishment of porphyritic intrusives, because the rock chemistry is similar. (no copper, low in sulphides, no mercury in the rock)

The mining history of the area is long, and shows the higher grade deposits run ~13 - 14 g/t. No long term mining effort has ever been established in the area, due to its remoteness and the swampy terrain, that and the fact that the last twenty years of cyclical gold prices led to the abandonment of mines which produced as many as 300k oz. (they have ~ 1m. measured & indicated compliant oz.)

Any effort to use IP surveys were thwarted in the past due to the proximity of iron formations, so they have to do it the hard way and drill relentlessly.

By gfxgold
01/29/2009 7:15PM

Over the years, I have run into a few "Promoters." They talk about assays and tonnage while you have a drink in your hand and then they hit you with a cocktail napkin presentation. "If you employ 10 men, and you move 20 tons a day at one half ounce per ton (of course, their hand picked assays will show a much higher oz. per ton ratio) and you deduct for supplies, explosives and rail, you might make a couple of bucks and do it all again tomorrow." "However, if you took those same ten men, gave them bigger, up-to-date equipment and could move 250 tons..." Then as he gives you the pencil. "You do the math."
All you will see is the half million dollars a week (or more) in gold. The thing that they don't tell you is that there is only so much drillable ore exposed at any one time. you're moving more tonnage but, you're moving more waste rock and that will slow down the recovery of the gold that you would have gotten anyway, using the correct mining methods. Going small to start with, saves money and allows a longer exploration time. FranSix, just out of curiosity, what mining area or mine are you invested in?

By Michael Miller
01/29/2009 4:11PM

When geologists or mining people get underground at the Sixteen to One, most are struck with admiration and interest because of the never ending changes in the vein and associated wall rock. Your mining intuitions have merit, at least your observations about how to mine. Here are a couple of my recollections.

In 1976-77, successful construction companies and individuals took an interest in gold. Why not? Mining resembles earth moving and these were some of the best at their trade. We would stand at a portal, a caved tunnel or venture down some of the exposed drifts. A common expression was about how they would develop the underground with modern large equipment. Speed up production. Move a lot of ground, etc. Gold filled their thoughts. Those who eventually gave it a try failed. The deposit determines how it should be exploited, not the other way around.

Before I took over management of the Sixteen to One, I financed and operated several other small vein mines. One summer a fellow stopped by and asked if he could spend the summer in his camper, dredge a little and help with our project. Yes. As he became more familiar with mining and milling he said something that helped all of us. He said, “This is not much different than moving peas (something he had done in his past). It’s just a different material. Really all we want to do is move material and move it the fastest, cheapest and safest way.” He was right. When the intellectual challenge of where to set up your drill is over, the next step is moving material.

The Sixteen to One leased the mine to Lucky Chance Mining, a company that was reorganized in bankruptcy. Its management was comprised of experienced miners; however the company failed. My opinion for the primary reason of its failure was ignoring what I just wrote, “The deposit determines how it should be exploited, not the other way around.”

We have a bright future ahead of us in the small vein mining. Over the past thirty years we have made many changes, talked about many ways to become faster and cheaper operators. We have embraced the technology of detection and have moved the process of detecting gold targets beyond the theory stage. We have changed the process of milling.

Small vein mining is a challenge. One of the biggest challenge is overcoming the prejudices within the mining and investment industry against it as a means to mine gold at a sizable profit. It’s just like moving peas.

By FranSix
01/29/2009 5:58AM

Yes, exactly. I assumed that mining a narrow vein would be more labour intensive than bulk methods used in base metals, and that the machinery by comparison would be almost comically small compared to the larger effort. I was very surprised at the size of the locomotive in the video for example. (the video of the 16 to 1 mine can be found on video.google.com)

I would suppose a company developing a mine with little experience mining a relatively narrow vein gold deposit will employ larger bulk methods to extract tonnage, where the focus should be directly on the vein in question, rather than taking out as large an alteration as possible.

I am grateful for the response, as I have made an investment in a gold mining company and feel at odds with the development plan. A higher gold price overall could reasonably be expected to gloss over the bulk tonnage vs. labour intensive method.

Would anyone have direct knowledge of CNC (computer numerical control) robotic mining methods or the use of close range gravitometer instrumentation? Could an advance of technology in use in the auto sector be implemented in a mining scenario in a thin vein structure?

By Michael Miller
01/28/2009 2:47PM

For your question below:

“Small” is a relative term, so I must reply generally. Let’s start with the definition of ore and assume the mineral is gold. The ore must contain gold of economic value that can be extracted profitably. This is key and necessary language: extracted profitably. So gold’s price is a factor. In our case gold is an established gemstone that brings a price greater than spot.

A vein is surrounded with wall rock: footwall or hanging wall are terms we use in Alleghany. The wall rock has no economic value; therefore it is waste. While the Sixteen to One veins pinch almost to nothing, they swell to over thirty feet. The average range is three to six feet. Depending on the size, a small vein miner usually produces waste in a process called dilution. Dilution will bring the overall tenor of value down. Sometimes separation of waste and ore at the face is possible. This will raise the ore’s value and decrease dilution so the actual ore processed may have a higher assay or recovery.

Milling must be incorporated into the economic formula. The miner must consider all expenses of mining, milling, selling and reclamation into his formula to decide whether he has ore to mine from his small vein. It is a difficult task, especially in a high-grade gold deposit like ours.

Again generally speaking, small vein mining is more labor intensive than large vein or disseminated gold deposits. Labor is usually the largest expense. Other specific situations may significantly affect the economic value: access to the mine, distance from the portal, type of equipment (diesel, electric or muscle only), experience of crew. While the rewards are less predictable in small vein mining, if you are lucky enough to own a deposit like the Sixteen to One, your rewards justify the risk.

By FranSix
01/27/2009 7:15AM

I would like to have some feedback from the forum on a specific mining topic. That would be how to approach mining relatively thin high grade gold veins as opposed to drawing out greater bulks of development muck or open pit methods. How bad an idea is open pit mining when you clearly have high grade thin veins? Is it a colossal error to do so? Do you need special tools and methods rather than stoping and using heavy equipment?

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