Love it right Eye money miners, you got questions about bloody
studies? We are delivering an absolute
spectacular. You might notice on the if you
see a good ASX announcement with the word Entech mining
consultant in it. We are delivering the people
that drive those announcements, the founder himself, Shane
Mcclay and the resident principal.
I won't say rock liquor, we'll say geologist.
We'll keep it tidy. Jill Urban, thank you very much
for walking 100 metres to come and see us for a bit of a
consultant. Spectacular maca.
Whoever said consultants were boring, you've always said that.
Exciting tonight. It should be boring.
Hey, we've tried to make this conversation happen, I reckon
for the best part of a year now. I think we were bumped back a
couple of. Times big ticket people, mate,
big ticket people. They take.
They take a bit of work sometimes, but it's going to be
worth it. Changes saw how how big the flow
and effect for Nathan's story was and was like I want some of
that money in mine effect you. Don't need to get on board,
you're already on the long town board rocks guard.
Look at him, just catapulted. He's actually can't believe I'm
so interested in metallurgy. He's so flattered.
No, that's good. Thanks for having us, guys.
So yeah, here with Jill from Entek and yeah, we've been
working together for nearly a decade and lovely to be here to
tell our story. Well, wait, I guess what's what
initially sparked the discussion was like talking about studies
and I think I was actually talking to you about between
scoping PFSDFS bankable lot. What's the actual differences in
and from like looking behind the hood from the consultant side of
actually what goes into the planning of it here?
What is different between the different levels of how you
actually get all this together and like what is a good study, a
bad study and from your obviously got the mining
engineering expertise Maka, but you're probably good expert at
everything now after having do it all.
And then from the mineral resource side of things, why
don't we tie it all in together so.
That's the way of saying we realised how much we didn't know
and we need you guys to come on and explain what we don't know.
So why don't we start with a good study and a bad study at
the set? Let's start the scoping study
level and then maybe we can sort of work through PFS, DFS, these
sorts of. Things well, I'll explain the
difference between the levels of study.
So really once you go from scoping to pre feasibility to
feasibility study, BFS and DFS, they don't really mean anything
other than it's a feasibility study.
So they're kind of at the same level.
I think Jorg's trying to get rid of those terms bankable and and
definitive. So it's just feasibility study,
but really it's the quality of the inputs to the study.
So you start with the scoping study, which is very high level,
well, not very high level, but a high level study that really
wants to answer the question is the project feasible?
And there will need to be lots of assumptions.
And and from there you go to a fee, a pre feasibility study and
that's where you look at the options analysis and then
through to the feasibility study and that's the one you take
through the financial decision. So if the quality, the inputs
are different as you go along and obviously the levels of
accuracy reduce as you get towards the financial decision
making, the feasibility study. And then the number we see
kicked around 35% ish for the scoping study.
Is that sort of? Right.
Yeah, Yep, 30 to 50 in that range depending on who you ask.
Yep. The PFS always comes out and the
CapEx is about twice as big and then yeah, DFS is twice as big
again. Yeah, yeah, there's a.
It's a big a lot of opposite. Studies.
So when you talk like, let's use some, oh, you could probably use
as a speaker to store, you could probably use rocks golden as
example. The the you and me when you're
talking about you've got potentially using a a lot of
different scenarios when you're talking like, OK, are we going
to mine it and create a concentrate to then sell?
Or are we going to put a processing plan in with high,
high pressure grinding and not go the concentrate route?
When you when you're evaluating those sort of many broad range
of options of how to like process something, is that done
in a scoping study level and then to evaluate all the
different options and then they're really refined in the
PFS when you nail down one idea when do those decisions?
Most of the works done in the PFS, so you may look at a couple
of options and there'll be some broad assumptions.
But the PFS is when a lot of work is done and, and quite
often the PFS will take longer than a feasibility study because
you've got to look at all the options and that's where you
have to do it at, at a certain level of accuracy.
Yeah. So, OK, So what what's the
what's the difference between you probably said it before, if
you that situation scoping to pay FS and is there stages when
you just do a pay FS straight up and not do a Skyping study?
Well, this one of my biggest bug bears actually.
And you know the question what? What is a bad study?
And really you've got to follow the, you know, there's 3 levels
of study for a reason. And I think that process is
really, really important. And quite often we'll have
clients come to us and say, yeah, we want to do a scoping
and then we're just going to do the feasibility study.
And yeah, it might work. But quite often you'll, you'll
leave stuff on the table and you might actually get to the end of
your feasibility study and go, Oh my God, this doesn't work.
So yeah, those three steps are really important.
And so when you say we just want to go straight to a feasibility,
so we just want to go scoping to DFS, is that right?
Yeah. Yep, Yep.
And people will quite often do that.
And simple projects, you'll get away with it where there's not a
lot of options, You know, small gold pit in the gold fields, you
know, digging up some oxide material, you know, really it's
just about tidying it all up. But you know, something like
rocks, gold, not that I know much about it, but yeah, you'll
need to obviously put the work in.
There's also like a level of information gathering as well
through each step as well. So you know from a drilling
point of view, the amount of information you have at a
scoping study is not would you be expecting a DFS?
So there's like several rounds of drilling and extra
information need to happen through the process as well.
So even if someone wants to make it quicker, there's, you know,
probably a good few resourcing fields they gotta do.
Yeah. So and probably talking about
the drilling specifically in the mineral resource estimate, wait
before you do your first study, you're scoping what's probably
the least amount of confidence that you need in the mineral
resource when you can commence that cause what you I guess
alluded to there is like that the resource needs to be
upgraded as the study. Usually progress, yeah, usually
it kind of goes like that, but you, I mean, you need some
drilling in it. You wouldn't be able to do it on
an expression target necessarily.
It'd be, you know, inferred level.
So you could sort of conceptually get an idea of of
what's happening, but you need to move to indicator quite
quickly through any anything moving from PFS onwards.
Yeah, 'cause we saw one recently where the they put out a study
with no NPV and no IRR because of the high, high percentage of
inferred material in it. And it's sort of like everyone's
like, well, why the hell are you putting this study out?
And we don't even have a, a number to see if it makes money
or not. But they obviously wanted to get
the study out for, you know, whether it was capital reasons
or share price reasons or whatever.
But is, is that a bit of a grey area to actually progress to a
study? But it's like, well, you haven't
got enough geological information actually to put a
the, the, the two numbers behind it that people want to see.
I guess. What's your view on it?
Sure answer is yes, it still is. Despite everything you have to
guide you, it still is up for debate in terms of what people
would like to do or what they do do.
Yeah. But generally speaking, yeah,
you're going to need, you know, for what we would do.
We would need a sentiment of drilling to to be able to wrap
a, you know, a joke resource around it.
And I assume that number of infer, that inferred percentage
number is very dependent on the ore body style.
If you can, like you could have a high inferred number.
But if it's something like a continuous, what you deem a
continuous ore body, you could be more confident.
But if there's shit going on everywhere, yeah, yeah, you'd
need a higher confidence. Yeah, it's a little bit
confidence, geological confidence before the, you know,
and the guys once it goes through the engineering, heaps
of other studies as well. But there is deposits that sort
of lend themselves to having a more, you know, better
continuity and others that are less commodities.
Some commodities are just generally a little bit more
simpler from a geological point of view and deposits can be.
So, yeah. And that's kind of, I guess
where some of the grey area comes in.
What are you? What are some examples of that
something? What's a simple a simple 1?
You could be pretty confident on inferred and the other end of
the spectrum. It's like you need to drill the
living shit out of this to really get an understanding.
Look, I'll just go by commodities.
Gold will always need more drilling generally than say some
base metals, but it is hard to just put them into a couple of
different boxes. So yeah, look, you can get
really complicated VMSS and simpler gold, but generally
speaking, gold having nugget does need a little bit more
drilling than some other commodities.
And like poor like what about like a porphyry system for gold?
Like a big A a bulky one? Would that need less confidence
or there is a nuggety factor within the porphyry that can?
Yeah, really. Influence it.
Yeah. So if you're giving bulk,
obviously the grade is usually a bit lower.
So, you know, in terms of having to get in the reminder and find
it in the right spot, there's a less risk around selectivity and
things like that. So yeah, look, you know,
generally speaking, the simpler it is, you could get away a bit
less drilling, but that's that's not a rule that's gonna hold
true everywhere. So that's giving it a nice vague
answer. Yeah, no, no, but it's like
that's geology way. That's why 'cause I try to
simplify things. But if if it was that simple,
you wouldn't need to exist. So you got to make sure you make
it sound as complicated as possible so everyone comes to
you for the studies. Jill, you, you mentioned
exploration targets. What do you think of them?
In general. In general, yeah.
I think there's a place for them.
I think perhaps the use of them is is still people aren't always
100% sure when they should or they shouldn't.
But there I think there is a place, particularly if you're in
the junior end, where you have enough information to be able to
give some sort of conceptual idea of what's out there.
But I think it's a big sort of elastic band in terms of what
everybody does. When did they come in?
When did exploration targets become a thing?
That's just a good point. Like it's probably something, I
mean, prior to 2018, nineteen, I wouldn't have done 1.
So I'm not actually sure if there's actually a moment
whether it was in. Yeah, maybe it was in 2012.
It's kind of like someone does one and then you I say it's all
good to do it. So they could do it.
Well, this. Is the thing right with the ASX,
there is a lot of like precedent stuff.
So obviously, you know, joke will tell you something.
But, and we'll have, I'll have conversations with some people
where they, you know, they'll say, can we do this?
And I, you know, say here's here's joke, this is what you
should do. And then they'll pull out like 3
precedents that have already gone out public that don't
really talk to that. And that's not necessarily means
you should set the bar like that, but it does make it hard
to, you know, sort of support and and push forward what you
need to happen when you're putting out a jerk when
something's already gone out. That's, you know, that's sort of
pull the rubber band hugely more than you would no.
As the as the study gurus, do you use, do you use deal with
the ISX at all or that's all on the companies that engage you?
The companies as I understand it, have like a representative,
so you know, chain jump in if you want as well, but they
usually have an ASICS representative.
So if we've got any questions or this clarifications required,
they'll go back to their representative.
That's my understanding. It's hard for us to get direct
access. Would that be?
Fair. Yeah, that's right.
Yeah. This this whole kind of process
from, you know, the, the, the resource infill all the way
through like all the study process, it's just it's it's de
risking, right. That's what's happening in this
process. You're you're building your
confidence in the ore body and its capability of being a an
economic thing to mine. And the highest degree of
confidence of that is that at the production of the, you know,
when the DFS is finalised and FID is announced, right?
But are they kind of like with your amalgamated history of
seeing it go wrong? Are they sometimes a bunch of
clues along the way of when like crappy work might have been done
that didn't actually have the highest degrees of confidence?
That's a good question. I think where where you've seen
projects go wrong, it's easy in hindsight, but quite often
there'll be one thing that goes wrong.
You know, it might be the resource and unfortunately, if
it is, if the resource does underperform everything from
that point on, the mining, you know, the economics, the
productivities, everything, the cut off grade, all based on that
resource. And if that resource is a bit
out ten, 2030% out, that could blow the project up very
quickly. So for me, the resource is
pretty much, you know, that's what you're starting with,
that's the ingredients of your project.
So that needs to be right and skimping on a resource or not
doing, you know, peer review and and that sort of thing is, is
fraught with danger. So, yeah.
And then obviously as you go along, all those inputs become
important at the right time. And then, you know, we've seen
projects that have, you know, the resource wrong mining
method, issues with paste, you know, issues with community, you
know, they can really blow a project up.
So there's so many inputs and all of them require that level
of diligence to get your final product.
And you know, you can't, you can't have one thing fail, you
know, or you know, obviously, because that can just buy a
project up. So yeah, it's important to get
everything right. And what about the the arsenal
that you're given? When do they do they ever put
constraints? I suppose when you're talking
about infrastructure and the design and everything, because
you could judge up a mine and make it the as easiest as
possible with the best infrastructure in place to make
it very efficient. But when you're as the person,
as the entity that's doing the study and given the options,
you've got constraints on the amount of capital that you can
spend, which affects the optimal mind design and everything.
Is that is the onus on you then to?
Is there a lot more pressure to deliver an optimum result
really? You know, any engineer worth
their weight will understand what an engineer's job is, and
it's to get the most out of the least resources.
So you need to go in with a mindset of fit for purpose.
And yeah, you do need to look at, you know, you got to look at
a project the last five years a bit differently, the one that's
going to last 25 years, you know, when it comes to the
quality of the buildings, you know, and you know, you know, do
you need to future proof the ventilation fan system or will
that be just fine? And later on down the track, if
the mine gets bigger, we'll put a bit better one on.
So I think, you know, growing up in WA and, and like most of our
people here, they're pretty tough minds to make dollars out
of. So we've, we've kind of got ADNA
and especially in Australia and WA of really doing things pretty
tight. So there's not too many gold
plated mines that you see over here.
You go to different parts of the world, you'll see more gold
plated mines than you see here. So yeah, I don't think there's
AI, don't think there's a lot of people out there gold plating
mines. I think people do the, you know,
the Holden Commodore rather than the Ferrari type mentality when
it comes to building a mine. Couple Are you Falcons out
there? Yeah, well, nothing wrong with
an IU. Still works.
So when we think of the scoping study stage and a company puts
up two potential scenarios, there's a few examples. 11 is
chalice, that's sort of a recent one that comes to mind.
Off the top of my head. It was a sort of 15 and a 30
million tonne per annum example. But more generally, are they
trying to see what the market kind of thinks of the two
scenarios or why isn't this decision sort of made in the
process by the management team and just one of them put forward
to the market? Yeah, well, we didn't get that
job so can't talk for experience.
What would you But no look, it's that is a really complicated
project compared to most mines. Yeah, you know, metallurgically
there's lots, lots of things going on and therefore there's
lots of options. So, you know, and poor bug is
the commodity price would have, you know, I think it was
Palladium half during their study time.
Like how do you run a study properly when you've got things
moving? You've got so many dials and
knobs, it's pretty tough. So I do sympathise with where
their, you know, their journey. And yeah, but I think to go back
to your original question, the study phase being scoping, you
would be looking at all different things at that point
in time. But unfortunately, when the more
work you do, sometimes the more options you find and you know,
you can study these things for the next decade.
But I mean, it's amazing orebody.
I think there will be a project there one day and they're
working through it now. So yeah, it's just a, it's just
a complicated mind, you know, compared to compared to most.
I've got another one just just quickly the appropriate amount
to to sort of spend on these different phases of projects.
I've had this number in my head for ages that the right amount
to spend on a DFS is. Might be quoting it wrong here.
Is 3% of the MPV just a random rule of thumb?
Does that stack up at all or is that completely wrong?
Have you heard that? One Well, I think people need to
spend more on this stuff. Goes with that I gave you the
layout I need to. Hold an extra, make a shit light
out of there. Yeah.
Now look, I don't know what that number is.
You know, we, we are only a part of the study.
You know, there's obviously a part of a study that'll include
things like geotechnical drilling, include pace field
test work, you know, lots and lots of different things that we
don't directly do. So yeah, I'm not sure what that
number is, but I do know that there are lots of cost and time
pressures during study phases that we're always faced with.
And I think that is something that people need to be more
realistic about when it comes to study phases and spend money at
that point in time because, yeah, like I said before, you
know, you can make some assumptions early on that can
cost you a lot down the at the end of the day, you might find
you've made some capital decisions that are not quite
right because didn't look hard enough into it at the early
stages. So.
Yeah, I can't stress how important it is to do the study
system properly. You know, go through your
scoping and spend a lot of time on your pre feasibility and then
finalise it with your feasibility station.
I should. Cut you off.
Should we be sceptical of like the, the, the, the teams that
decide to manage their own kind of study work streams where they
don't necessarily rely on, I've got this kind of hypothesis that
a lot of times mines get built, they're kind of marginal and the
numbers that sort of come to the market, especially if they
manage their own studies, they might be kind of squeezing
things a little bit or, or taking a very optimistic view on
some of the capital or operating cost components.
And that's just to sort of paint a rosy enough picture for the
thing to actually get finance in the 1st place, and then things
go kind of tits up. Yeah, I think you need to be
sceptical, but there are some owner teams that are doing
really good work. Yeah, you know, so I think, I
think you kind of need, they need to prove that it's a
reasonable study and sometimes that's a some peer review or
they'll farm out parts of that study.
But yeah, look, it's in their best interest to get the project
going generally, but it's not in their best interest to fail
either, you know. So yeah, I think, I think most
teams that take it on themselves will get the right people to do
it. So they.
Also have, you know, there is that ownership thing as well,
you know, so I don't think you could sort of put it into the
bucket where it's just like they've done it themselves.
So they they have ulterior motives.
If it does go well, they have to deliver on it.
Yeah, If we go back, probably our first big job, if I go way
back when I worked with Sapphire Resources on Degrusa and they
did the study themselves. Martin Reed did that and he's,
he's done more studies than we've had hot dinners and he got
us in to do the mining component of it.
So we, we sat in there like an employee and did the mining
component, but the study come out as a sand fire study and it
was a good study and you know, it worked well and executed
well. So, so that's that's done, you
know, not often often, but it is done.
Probably is going to spend more time looking at, you know, the
inputs around what's gone into it as opposed to necessarily
he's done it. Help that great help there for
sure. Shout out Tristan Somerford.
How about how competitive is the consulting tendering process?
So, so there's a there's a big hotshot study that's coming up.
Entech want to get their hands on it and I'll assume everyone
else does. Is it a very competitive
landscape? Is it like Burn Cut and bar
Minko fighting over a contract? Yeah, a little bit.
And, and it's probably a good comparison when you look at the
underground contracting space because that's where I come from
as well. Elton, rest in peace.
So the answer is yes, it is competitive, but it also does
rely on relationships. And you know, there'll be people
that will come to us just because they've worked with us
before and there'll be no competition.
We just get the work. And some of our people that are
in our space, that'll be the same for them as well.
We won't even get a shoe in. We won't even be able to put a
tender in, so I would say probably only less than half of
the work we get we would be have to compete for and the rest
would just be return, return work.
So if you we go back to Degruta, your first one, one of your
first, well, is that probably what 14 years ago?
Yeah, it was 2010 and 2011. How does the the how do how do
studies evolved and probably yours particularly from from
that one to what what you do now?
Like does I assume there's just a bucket load of learnings from
studies And then give yourself the do you think you have a
better statistical chance now of executing a better study based
on what you learn? Or is it it's just a continually
evolving environment now the bloody lithium comes in and just
confuses the hell out of everyone.
But does the skills and expertise evolve over time and
the efficiency of it? Yeah, definitely.
I think the software has come a long way in that time.
And, and I think for, for us people that step out of
operations and go into study work, they've got to understand
that you that the work is different.
And, you know, you don't have to worry about, you know, levels
being one in 50 and, you know, making sure that the sumps one
in six and all of this, you just do a design that's got the right
amount of metres in it. So your levels will be flat.
You know, if you try and do the work at the same level of
diligence, you think someone's going to execute it, then it'll
take you too long. So you need to do it a lot
faster and obviously the tools have changed a lot in the world.
Back in the day it was more surpak and more data mining.
And as we know now Deswick have really got a lot of the market.
So we tend to use that a lot more now because a lot of our
clients use that. So yeah, so I think software has
changed a bit as well, made things a bit quicker.
What's the reality of working on a study?
Are you working with the client every day?
Are you touching base every couple days or what is actually
it's? Probably normal would be at
least once a week. Yeah, yeah.
But we've we've worked in people's offices as well.
Like even in recent times. Yeah, someone will spend few
days a week in someone's office or or we've had the client
working in our office as well and what's that's good?
What's the sort of standard period for for a scoping study?
How long is that contract? How long will you be?
Working on it. How long is a bit of string?
Yeah, it's a, it's a good question.
I know what I say will be half the amount of time that GM Dan
Donald will say. So I'll get in trouble for this.
But, you know, you're probably talking, you know, two or three
months for a scoping study. Yeah, Yeah.
Jill, you mentioned earlier as well looking at the studies and
maybe honing in on a couple numbers, if it's been an in
house one, look more broadly in house or done by another mob.
What are the sort of inputs you guys may be on a Geo side and on
a sort of mining engineering side.
What are the key inputs you'll look at first if it's a non
Ntech study? Yeah.
So I'll go first. Yeah.
So for if it's a non intex studies, yeah, all right.
So if we if we were to pick it up and just be looking through
it. Yeah, and see sort of where they
messed up. Red flag.
Well, everyone thinks they can look through something and see
what someone's like Shane said before hindsight, it's a
wonderful thing. But a couple of things that you
know, I would look at straight up is just what they use for a
reporting cut off grade and what their grade is.
So the reason being sort of talks to the grade tonnage
curve. You know, how many of the tonnes
sit right between where they've actually reported it and what
they've got a minor. And because the more the tonnage
that's in there, the harder they have to work to get the, you
know, select what's ore and waste, right?
So that's one of the kind of key things.
Get the GT curve out and have a look what everyone puts that in.
But in terms of a, you know, if I'm actually having a look from
a diligence point of view, you know, looking through the study,
there's also who's contributed to it.
Yeah. I think you've said that before.
The first thing I'd look at is who's.
Done it, yeah. Like the individuals, I think
experiences is worth a lot when it comes to study work.
You know, have they done similar type projects before?
How did those projects go? But on the mining side, you
know, the first thing we'll have a look at is the mining method
selection. Have a look at the core, make
sure it makes sense compared to the mining method selection.
So just that, you know, I'm talking about an hour's work,
you know, just the first thing I'd look at and and then cost
some productivity. How how productive do they think
the fleet's going to be? Are they being realistic?
Where is the project? So yeah, you just have a quick,
quick look over at a few key things and and then do a bit
more work from there. How do you know?
How do you know what an unrealistic, like unrealistic
expectations of productivity look like?
We've got a, we've got a pretty good database, Damien and he's,
that's his job, right? So cost and productivity.
Yeah, but he's underground. It's like how many?
How many metres development? Yeah, that's right.
So yeah, he's a wealth of knowledge.
So we will sit down and have a look at it, have a look at all
the key assumptions and to, to make sure they look realistic.
So yeah, we've, we've got that in here.
So we've got, you know, we, we know what, what a jumbo's going
to get. That's, that's the start of, of
the productivity, right. So you got to get the metres.
So the jumbo's the first thing you look at most important thing
for the start of a mind. Do they think they're going to
get 200 metres a month in the decline or 150 or 120?
And that, and that'll change depending on which state you're
in or which country you're in as well.
So, so there's there are a couple of quick and dirty we'll,
we'll have a bit of a look at just to see what they think
they're going to get. Because you know, when it comes
to NPV, if you if you're a little bit out and you start
going to and you're going to start production six months
later, that's going to make a big difference to a project.
So. I think the, you know, around
resources, there's always, you know, in terms of feasibilities
and the resources side of things, a lot of the risks
haven't changed a lot. Talking back to that question
you had before about, you know, has it got better or have we got
better? There's there's still a lot of
risks that are similar as you know, geological complexity,
people classifying, you know, potentially where it's not
supported by dual spacing. Those sort of things are kind of
recurrent themes that they keep coming back.
So you know, in terms of feasibilities and have do you
get better with experience? When you're looking at things,
you might, you will probably look for flags quicker, but a
lot of the risks around feasibilities do come back to
similar things. Like one of the key things is,
you know, there's one resource that underpins hell of a lot of
other work and value. And, and that resource can is
one person's view on, on something.
And if it's a simple ore body, then the risk of them being too
far out, it's not too bad. But there's no such thing as
really a straightforward ore body.
So I think, you know, one of the things for feasibilities is good
if and we've had a few clients do this, they'll get more than
one resource done. They don't really pick it, pick
the best one, but they might run internally and have us do an
external and they'll sort of have a look at what the
difference is. And if there is a lot of
difference, we'll try and understand what that is.
So does one group did three and then that also gives feedback to
management and board in terms of look, you know, we're getting
these big variations before it goes into the study and the guys
do all their work on everything. So 3 different Geo teams using
the same data. What resource do you spit out?
Is that the analysis each would do?
So they would sort of act independently.
Yeah, and just come up. And so the idea being you get an
idea of exactly the variation in your raw body.
And it's not information that everybody wants to hear, but
it's probably good to get an idea of what that would be at
the start. And if there's a lot of
variation, might be an indication you should do some
more dense dual spacing in the first place.
As it comes down to just infilling more information.
Right. So how so how many?
Is there many cases where a company comes to you and said,
right, we've this is our resource.
Or like, even if you've got to do the resource and they want to
do a study and I think it's enough confidence that you're
like, and as you said, the the whole study is essentially
underpinned by that resource. You're Jill walks into the room
and says. And she looks like that.
Too bad lean forward with the head down.
You know when Jill's serious. Like we cannot do this study
unless there is a better drill density.
Full stop. Oh, it's an easy way to make
money. Just do more drilling.
But yeah, look, the, I think those that are happy to really
understand where they're going with their project, they'll ask
those questions. Yep.
And they'll seek outside information like help or, you
know, not say help, But, you know, systems are an opinion and
they're open to being able to talk about different inputs and
opinions as opposed to, you know, this is how I want it to
be and this is the path we're going on.
And any news that sort of disagrees with that gets
discarded along the way. So.
Yeah. And most companies are like the
most, most companies in this country anyway are usually
pretty amicable and work together and like it's, it's
there's a good relationship or is there sometimes some it's a
bit argy bargy with with like obviously what you think is a
the studier is the best going to be the best outcome versus the
capital that I want to outlay for all that work.
Yeah, I think they're just discussions to have.
So I I've. Been a few discussions over the
years, but not all clients they're, you know, happy with
what you say when you tell them it's not as good as what they
thought it was going to be. So yeah, it's not all plain
sailing, that's for sure. Yeah, Yeah.
No, there is. Yeah.
Jill's probably thinking what am I allowed to say?
But if you said it's all. Right, she's worried I'm going.
To say that's what it is, she said.
Too much. But sometimes Jill doesn't even
get involved, right, because the client will come to us and say
here's our resource, can you do a mining study on that?
So completely bypassed whatsoever and we take that and
we'll obviously make sure the metal adds up in the model and
do all our mining type cheques of the resource.
But whether that resource has been signed off by some other
competent person, you have to assume.
It works. Yeah, that's right.
So you and. She's bypassed and.
Then so then the the onus and the liability is on that
competent. Person.
So yeah, somebody else has signed off on it, whether that
could be internal or external or whatever.
And then I suppose broad liability for the for a study
you're if you're you're putting out a study who who does take
the onus you or the company like is there in terms of this isn't
an insurance ad by the way, probably could be, but how does
that work? Well, the, the study that we put
out is, is, is our work and we're accountable for that work
that, that we've signed off on. So if it's a, a reserve, you
know, we've, we've signed off a reserve that competent person
is, is liable for the work that's been included in that.
They don't have control over all the inputs because they'll get
experts that'll do the resource. I'm talking mining only now
though, you know, resource someone who's done the geotech
work might be done third party. So you know, and, and they're
the competent person, you know, or the, the expert, I should
say, for that sort of work. There's only so much a, you
know, a mining type person can look into to make sure things
add up. But somebody else's accountable
for the work that that feeds into it because you can't
control everything. Yeah, and.
What so if you want to talk like speaking geotechnically
specifically like say you put a study out in the record, there's
recommended all the proposed ground support patterns and
pillar spacings. And say when that mine gets into
production and there is an incident, geotechnical incident
and it could be a failure of ground support or a something to
do with pillars or something. Is there any liability on the
consultant that put that forward in the study or does the company
then take on that responsibility?
Well, I think, I think it's almost the studies pretty much
completed at that point in time. And then you have a geotechnical
team that is accountable from that point on.
So they're doing the design, they're doing the ground support
design, they're doing the reviews underground, they're
doing the checking. So the study's almost.
Old news about almost gone. Yeah.
Yeah, that's the thing. The study's like a moment in
time. The moment in time, Yeah.
And a mine is evolving. And our spreadsheets are so,
like, prescriptive and accurate. But the reality of a mine is so
different to a spreadsheet too. Yeah, that's why people, you
know, there was a question people sort of ask at what point
do feasibilities sort of go out of date?
Yeah, with with everything that was changing particularly on
costs and pricing, you know, in the last couple of years I
think. The view on that, are they out
of date? What, like a month after?
I think obviously anything pre COVID is out of date, right,
Because costs have increased so much Yeah, quantity prices has
changed a lot in that time, so. Yeah.
I think there's like there's a couple of conversations.
Nothing, nothing actually based on any real information, but
just just talk on the street, like people sort of.
Yeah. Like around that time, you know,
two years or so and you could two to three years you could be.
Well, you might not need a clean sheet of paper study.
You know, you just update all the assumptions and you know,
give it a, give it a revamp. On that sort of topic, are
there, are there other sort of trends more broadly, say since
you started Ntech 15 years ago, you know, things you have to do
in studies you didn't once have to do, other things that kind of
stand out or is it, you know, just a more simple evolution in
the study process? Yeah, I don't think there's been
any significant changes. I don't know, Jill on your side.
Yeah. Now look, it's pretty boring on
that front. You know, there's, there's
probably, I think moving forward there's going to be a lot more
emphasis on, you know, ESG than there has been in the past.
There's obviously a lot of whole different conversation and
podcasts on that. So from my point of view,
though, there's not a lot of a lot of changes.
I think some of the conversations around risk are a
lot more developed and in terms of what you can, you know, what
we're now putting out in our studies is a lot more defined
than perhaps it was. And making sure risk is
communicated downstream. It's a big part of the
conversation, probably, you know, all the way along.
So that's outlining to the client what the what you sort of
deemed to be the top three or top five big risks.
Yeah. Also, yeah, to make sure it's at
the front of everything, not buried at the back.
Everyone gets rated and then you know, feasibilities have their
own sensitivity inbuilt in it. We have some, you know, in terms
of software you have from a geology point of view, we have a
few different ways we can tackle that now, which is really quick
and efficient and, and sort of test like we're talking of, you
know, before about risk around resources.
We can test some of their sensitivities pretty quickly.
Shane, you mentioned the the NPV before as well, the discount
rate, is that just shove down your throat.
Do you have any say or any recommendation?
No say so. We will comment if we think
someone's been a bit unrealistic.
What is your rule of thumb? Thoughts on discount, right?
Well, if it's too far from 8%, you're asking questions, right?
Yeah, yeah. And when did it 8 become the
number instead of five? I think 8 was the number.
Should have been the number, yeah.
Yeah, I think obviously inflation dropped to, you know,
an interest rates dropped there at 1 stage.
So that's when people were pushing 5, but before that it
was 8. And So what cases shouldn't be
8? What's your big factors driving
that? I don't.
I'm no expert in that field. I just ask questions.
Why isn't that? I'd argue that eight's the wrong
number too. I think of project project
finance. You're never getting project
finance debt cheaper than 13%, right?
So if the debt's 13% yet you know the equities, the cost of
equities north of that. So your weighted average cost of
capital should be somewhere in between like you know those two
numbers right, the risk free rate like.
AUS government bond is about 5%. You wouldn't, there'd be no
mines with a mine life any longer than five years ever go.
And that's a point going that's. A point, too, yeah.
Yeah, what now when you do your first pass, look at a mine now
just in terms of and we could probably just talk.
Operating mine or study? No, just for a study something
comes to you what the grades for a gold mine compared to when you
first started 14 years ago. Do the numbers, Yeah.
Have you had to change your rule of thumbs of what is a
profitable gold mine? It's.
Probably half. Yeah, it's just everything,
because it used to be like 4 gramme for an underground, 2
gramme for an open pit. Now it's half of that, isn't it?
It'd be half, yeah. Yeah, roughly.
And was that been a gradual thing or is it just in the last
few years that we've seen these, I think?
It's speed up in the last few years.
I remember we did a study not that long ago and the reserve
was sub to grammes for an underground and everyone was
having a heart attack and it's like, well, but it works and Oh
no, we need to get it higher. Well, we can't just get it
higher. You know, it's it is what it is.
We we go to one significant figure or what do you want us to
do? But it worked, right.
And so I think people's mindsets have changed.
So that was about five years ago.
That mind's operating how? How many times have you ever
come across it like the, the, you, you see the ore body or you
look at the ore body and you're like, you smile, it's not going
to work. And then you actually crunch the
numbers and it works like what? Are there any examples where
you've been very surprised that like going through the whole
process of of of the starting now you could you always know
from the ore body intubation? I haven't been surprised.
Yet I suppose you wouldn't be good at your job, would you?
That's such an interesting takeaway access.
Basically you can. You can really tell from the ore
body. Oh, look, there's like, like
Shane was saying before, you know, you don't want, you could
probably maybe one thing moving against you, but if you're
starting off with, you know, the geology and resource side,
there's stuff already moving against you.
And then there's some other things.
I don't know, I think maybe when you've done a few of them, you
can, you can tell geological complexity is huge.
That's cost all the way along, particularly if you don't pick
it up at the study level and you experience it as you're trying
to ramp up. It's you know, it's, it's the
reason why you know, many struggle to, you know, in the
1st yes, year or two to actually get to where they need to be.
So I'll weave 2 questions into one question just to make it
hard for you, Jill. When, when?
So what are the cases when you see a ore body that has a high
grade on the surface that doesn't work, and then on the
opposite to that, an ore body where you see a lower grade but
you like this can work. What are the factors outside of
the grade that make it work and not work?
In terms of I guess and I'll let change or two how you're going
to mine it, but the higher grade stuff if we're like talking
generally speaking tend to be perhaps narrower vein stuff.
So then it goes down to width and you know you can have really
good grade, but the width doesn't really carry a start And
you know that's something that can be a problem.
And in terms of lower grade, well with pricing and everything
the way it is now there's you know those sort of things are
actually meaning you can, you can take a lot more bodies
underground than we could probably have done before so.
Is that, and that's a life thing.
Like it's like you can get so much more life out of it because
you can go underground at a lower grade now.
It is like it is, you know, I wouldn't, I wouldn't want to
sort of generalise too much on it, but it does change a few
things. Some of the grades we can can
take out now means sort of what was sort of previously
incremental can be considered in, you know, it's just it has
changed a lot and it's still changing in terms of what people
can operate at. What what about like uniformity
and continuity? I can't because there's probably
2 minds I can't mention here, but how much is that for,
especially for lower grade stuff?
How much does that that sounds like a big driver in making
lower grade things work. Just knowing we, I guess an
example we've probably seen unfortunately far was callous
and like whether that was either density or like just not
continuity of the ore body or body.
And it's just like you might be thinking you're getting
something, but you're just not for that period in time.
I assume that's a pretty big bloody driver as well.
Yeah, yeah. Look, you know, obviously
because I'm a GL bang on about complexity for the geology.
But yes, if you are going to like go lower grades, the more
simpler, simpler. If it's a tabular kind of ore
body, yeah, in sandstone, then that's a pretty simple thing to
tackle as opposed to say something hitting underground.
It's it's, you know, hard to find, hard to say.
You know, it's going to cost you more to get that out.
And so that kind of eats away your margin.
And what and what, and with open pits, because we, we, we tend to
focus on underground a bit in this corner over here.
But I'm like my, I've broadened my horizons with pits.
So when we talk about you might see these pits with these, as
you said, tabular, it looks, you know, it looks great on the
surface, but how the, the mine ability of those tabular pits,
like I assume you can't be scraping in great detail on a
pit like everything get blown up and spread everywhere.
Is there what what's involved in actually mining these
efficiently and like trying to maximise the the grade and not
diluting it with shit flying everywhere in a pit?
Yeah. Well, if it's, if it is, I mean,
I'm just trying to get your example.
If something's quite broad and tabular, then you're not
necessarily going to be selective within it.
So it comes down to selectivity. If you really want to be going
in and grabbing a bucket here and a bucket there, that's not
how you want to be mining it. So for pits, ideally those sort
of deposits where they're, you know, sort of tabular go across
spit floor similar grade, you're not having to pick the eyes out
of it. They will always, they will
always go better. And as most gold open pits, can
you easily distinguish the awe visually or are there somewhere
it all looks the bloody sign? This one I saw today all look
the bloody sign, but you know it's there is usually some sort
of redeeming feature. You're gonna go look a.
Green tinge. Just something.
Which is really good for colour blind mining.
Engineers, yeah, yeah. So look, obviously visual bodies
are good, you know, it's just ticks one of those boxes.
Less, less too. You have to worry about, you
know, but this people just need to be smarter if they can't see
it visually. You gotta do more work essay for
more background elements and try and get a bit of a
characterisation around what actually drives your whole body.
Then you can kind of rely on proxies to to sort of find your
way around. It usually means you've got to
spend more money on information. So as long as it comes into your
pockets, it's all good. But if the price stays where it
is, then yeah, everyone can drill more.
We spoke about a company a few weeks ago, Xanadu.
You don't have to speak specifically to the company, but
the thing we'd heard this was as the PFS study was coming out is,
you know, from an investor, ignore the CapEx.
That's a Western style CapEx. The project is in Mongolia.
If a Chinese company were to buy it, they'll slap on their own
CapEx and they'll be able to do it way cheaper.
What do you kind of think of this?
Like I'm curious to get your thoughts about the ability of
sort of companies in different countries to significantly mark
down the CapEx of a project? I think it's just got to be
realistic. You know, if that is what it is,
you would want to demonstrate that in the study.
So you, you how do you justify that cost and you'd want to see
that. But there's definitely,
definitely different costs in different countries for CapEx,
for operating equipment selection.
So yeah, countries do make massive differences in the
study. So if we're doing a study of the
same ore body in two different countries that are quite
different mining wise, those studies would look different.
But, but in this case, when the ore, you know, the ore bodies in
one country and you're talking about a potential miner from
Australia versus a potential miner from China, is it just
that they're buying different, maybe lower quality in some
cases, maybe higher quality in other cases, equipment,
machinery, these things. And and that's what ultimately
leads to the the massive change. It's a good question for them
without knowing much about the project, but I think it's bold
in saying that, you know, we, we, we try to put science and
facts behind the studies. So, you know, if there's no
science and facts behind some of those assumptions, then yeah,
you'd you'd definitely be asking questions.
It's what and there's probably a lot of stuff that goes on behind
the scenes that we don't even know about or appreciate and
one's probably like analysis owner mining versus contracting.
Do you? What goes into that?
It's a good question. And you know, I kind of tongue
in cheek always say when someone asks us they want to do that is
what do you want the answer to be?
Yeah, because it's again, there's there's one, one thing
that's very hard to measure, which is of key input to that
analysis. And that is what is the
productivity that you're going to get as an owner operator and
what is the productivity you're going to get with a contractor?
Are you going to assume, are you going to assume they're the
same? If so, how?
How are they going to be the same?
Because costs are costs. You know, you can go to Sandvik
by jumbo, you know how much it costs diesel, you know how much
it costs people, You pretty much know how much they're going to
cost. So the real differences are
contractor margin and and productivity.
And yeah, you know, there's big differences in productivities.
I'm not saying contractors are always better and and clients
are always worse, but they're going to be different and you
need to articulate that in some way.
And so based on your big database that Daimos
established, is there a trend that of productivity contractor,
verse owner, operator? Well, in this state we have a
lot of contractors, right. So and, and, and what we tend to
find is owner operators later on in the mine life and contractors
are early on in the mine life. So that's, that's probably more
so the case here in WA than anywhere else, hence why our
contractors are very good and why they're all over the world
now. So we are very good at
development. So I, I don't know if there's a
big difference because it's very, you know, the thing about
mining, we're not all just mining in concrete.
You know, every mine is different.
They're different depths, they're different hardness in
rock. So you can have the same people
in different areas going to get, you know, drastically different
results. So it's a.
It's not an easy answer for that one.
And what about the balance between development and
production? When your owner operator verse
contractor like notoriously the contractor, it's like they love
doing development because they did historically get paid more
for development or it keeps all the high maintenance jumbo
operators happy. But then it's trying to balance
that to get the order or out, which is the what the client
wants. But the you know whether the
contractor mightn't make as much money off it.
If the contractor was set up that way the would you think
owner miners are better more aligned to get ore out to get
the the metal rather than getting the higher cost
development done? Yeah, I think contractors get
paid on tonnes generally, which doesn't necessarily equal good
dilution and all control. So I think that's probably the
only one that's very difficult to align metres.
It's easy to align, everyone wins, but when it comes to
stopping, yeah, it is a bit difficult to both have the same
goal when it comes to that. How?
Does geotech impact mine design? It's apart from geology, it's
really the, well, it's the number two thing, right?
Because it's all about how big your voids can be.
Yeah. We never talk about geotech.
Yeah, well, we happen to have the best geotech going around.
Tom who? Told me that or that Tom told me
that, Yeah. But yeah, we're very, very
important. And you know, I am the world's
worst geologists have 0 interest.
But I go, I love going to a courtyard because I want to go
and see the core to see how structurally good or bad it is,
if it's together or not. Am I looking at sticks a coral
or trays, a road base? You know, because that's going
to really tell you the difference on how that mine's
going to perform and the void size and yeah, really, really
important. Gotcha, so bad geotech.
The void's got to be smaller. Yeah, background.
Yep, Yep, Yep, background. Yeah, definitely the voids and
some places you can't actually mine it underground, right,
right. But yeah, definitely the void
and it changes the ground support and Stopes whether you
need paste fill, you can leave pillars.
So it's it's one of the major inputs to mine design selection.
And for open pits is it? Angle all angle.
That's that's the main thing. So the ore, the ore might be
nice and solid, but then you look at the other side of the
core. Oh shit, there's an ultra mafic
hanging wall. So you know your dilution is
going to be shit loads. Yeah, you have a good look at
the hanging wall because that's generally what's, you know,
what's hanging in your Stopes. And then you have a good look in
the football because that's where your decline's going to
go. So go to the courtyard, have a
look at the ore, then go about have a look at the next 4 trays
that way, and have a look at the next 4 trays that way.
And then, you know, Oh yeah, this would be a good Peace of
Mind. Courtyard site visits Courtyard
is like the bit that I want to blow my brains out.
Get your get your mark and there's one, there's one,
there's one example, which I I don't have the full information
on, but I know it's like one of the, you know, one of a real big
up and coming open pit sensational.
But they're talking about, you know, the future underground of
it. But I'm pretty sure that it has
an ultra mafic hanging wall. That might be fine to open pit,
but then to take that, to take that then underground to control
the grade is like that's going to be a big, big challenge.
I don't know what you're talking about which one, but but ultra
mafic is there's ultramaphic and ultramaphic.
Some ultramaphic is very good and some is if you look at can
belder type ultramaphic that where I grew up it can be
horrible. So yeah, that might be good.
Ultramaphic. I don't know.
Yeah. Who knows, I'm just hearing that
geology is still key. Yeah, sorry, I'll pay attention
to call you. You are you are just the the the
the sponges of the sponge card. That's.
Right. Yeah.
There's one other component in these studies always look at and
I'm curious where they pluck the numbers out of the, the
contingency. So in in a DFS or PFS, it can be
a relatively, you know, decent, decent component, decent amount
of money. Who picks that number and how's
that number picked? Generally, client will look at
the contingency and it's generally around the CapEx,
right. So, yeah, so that's where it
comes from. Pretty much everywhere else in
the study, we just try to make realistic numbers, you know, and
kind of sit in the middle of the bell curve when it comes to
productivities and so forth. But CapEx will often have
contingency in there which is normally led by the client.
Yeah. But that that contingency
number, is there like a a rule of thumb in the in the CapEx for
the the quantum of it or? I'm not sure if there's a a
standard number, you know, some people use 5, some 10.
I think again, it comes to the confidence in the number.
The less confident you are, obviously you're going to make
it a bit higher. Yeah.
What it is? So what about these, these
tenders that we see contractors tending tendering for a, a mine
or a new portal or whatever, even if they're, you're pretty
sure it's going to one contractor, but then you've got
all these other ones tender. And what's the role in like, you
know, the numbers that get thrown around.
I know that contractors have to deal with consultants to figure
out what numbers to put in tenders.
Like what's what's the role you guys play with contractors?
Yeah, Damian runs that part for us.
He, he often runs tenders. So he'll help the client, you
know, get the physicals, the schedule rates together and then
get the formal contract and the contract document and then and
then go to tender. So we're involved in, in that
process. Probably the key, one of the key
conversations we have with the clients is what sort of contract
do you want? Like because there's everything
from fully variable, which is if you do nothing, you get paid 0
and you take a cut, you get paid X amount.
So there's no fixed component. So that's kind of one extreme.
And then the other extreme is your cost plus essentially an
alliance type contract. And then in between, which is a
bit more normal is where there's some fixed like you might pay
for the site manager and the admin and maybe some of the
equipment and so forth. And then there'll be a variable.
So and that varies generally between about 30 to 70% fixed.
So, so we have that conversation and, and really you try to line
up the contractor and, and the client to have the same goal
and, and that can vary and you know, depending on the contract
type and where the contract is at that that can change.
And then the market as well. If the market's really hot, then
the the risk will move from one side to the other.
And so that's why you need someone like Mr Damian, just I
assume that is so variable in terms of like, as you said,
timing in the market, the size of the mine, the mine life, the
whole body life. It's just, Yep, there's a lot of
a lot of ingredients that go into that cake, a lot of cake
references today. Yeah, no, that's right.
You know, there's probably 10 contractors out there and some
are Tier 1-2 and three. And depending on the project,
you might need a Tier 2 because they're right sized for this
project. Or you know, if you've got a, if
you've got a line down, for example that or a Bellevue
that's going to require multiple jumbos, like 4 plus, then you'll
need, you won't be able to talk to the smaller guys.
You'll have to go to the big end of town.
Yeah. And so that's dealing with the
client that's going out to tender to the contractors.
Do you ever deal with the contractors?
Yeah, yeah, all the time. So what?
Do you do for them? Well, we have actually done work
for some of the contractors like helping them with mine design
and so forth. Like in Australia it's, it's
pretty much the client does the mine design and gives it to the
contractor and you give me a price.
But if you go overseas, a lot of the time they'll, the contractor
does the schedule. So we've we've helped out
contractors, you know, do do the actual mining schedule and then
present that to the client. Yeah.
So we've done that sort of work as well.
Oh, there you go. It's like MMS mate.
Oh, it's just very fully integrated.
Jill, I've got another one. There's a number that always
comes out and I'm always kind of suspicious about it.
I just think it's kind of open to being gamified and that's
metal equivalents. When companies report these for
true results or maybe on a on a resource basis, what do you kind
of think of them more broadly, I guess?
And is this something just by default you go and interrogate?
Is that just the way to kind of go about it?
Yeah. I, you know, in terms of how I
feel about them, I think they they are helpful and there is a
place for them. I think there is a lot of, you
know, there's payables, there's pricing, there's recovery,
there's things that go into getting the equivalent.
That means, you know, if you're going to use them, it would
generally be on a pretty advanced project.
Or a project which has the, the company already has an operating
mine using that equivalent. So, you know, in terms of using
them, I, you know, I know there is debate around it, but I think
if you have a good amount of information behind it, there's
no problem. You think as long as you're not
like, you know, you've got to use the gold equivalent in a
zinc deposit. There is, there is, there is
opportunities for people to misuse them.
So exploration companies, they Chuck one up, you know, on one
of their first sorts of campaigns, take them with a
pinch of salt. That's what I'm sort of hearing.
Yeah, I'm probably not going to, I'm probably going to be more
diplomatic. But I would say that in my
experience and how I would use them, I have I've advised
companies that are probably early stage to not go with
equivalent at that point and to do it once they have some, you
know, some information signs and solid numbers behind a couple of
those other things. I mean, the trick thing about
equivalents is that you it kind of depends how you're going to
get it through the plant in terms of what the recovery is
going to be, right. So if you're talking about base
metals, there's different cons that come out the back end.
You might have a metal in there, but you're not might not be able
to get a con out or at the recovery that you think you
might be able to get. So like I said, I think if you
stick to using them and this is just my experience using a more
advanced projects, that's where I'm comfortable and we I often
sort of push towards NSRS now. So Ultra returns.
Yeah, that's a clean way. Yeah, yeah.
Because you don't have that conversation around, you know,
if you've got four or five medals which equivalent because
sometimes they're, you know, especially, you know, especially
with the pricing, they're all very similar.
Which one do you put it on? So NSRS are are a good way
Totally. That's kind of my go to.
Again, it's usually they're at feasibility level.
Yeah. But yeah, it can be exciting to
put a metal equivalent out if you got a draw.
What? I've got 2 questions and after I
asked the first one, you're gonna know what the second one
is. What's the best study you've
ever done? What?
What do you put the N Tech hat
on as the greatest study ever that you were most proud of?
They have to be 1. Well, I don't know.
I mean, there's studies we're doing now, but.
They could be. You won't know until they
actually get get going whether it's the best ever, really.
So you. Discount them.
I think what you really want at the end of the day is you want
the study to be executed. I think that's that's really
important because at the end of the day, we're here to build
stuff and to to my medals. So I think some of the proudest
ones would be de Grusa. You know, that was that was one
of our early ones and. Start at the top.
We started. Like it was really, really good
for five years or even longer. So, so that was really good.
We also did the study for Nova, another cracking deposit and you
know, that's, that's in this later years now.
But, but pretty much what we said in the study happened,
which was which was really good, really wanted to convey there to
put a conveyor in an underground crusher, but we couldn't get
that one across the line. Unfortunately, the previous
owners didn't want to spend that little bit extra, but that was
that, that was quite good. So yeah, at the end of the day,
I think look, we we like doing the work we do, but we really
like it when the mines happen. I think that's that's what it's
all about. I won't.
I was going to ask you. Sure.
What the next? One is, but I'll rephrase it.
What's been one of the? Is there any that stand out that
were the most not difficult, but you like really had to unpack a
lot of new learnings to get the study done something very new
and they're probably. Ones you haven't heard about.
I think. Or are they sometimes commodity
specific? Look, I think we're doing some
work at the moment and, and we're doing something that's a
bit new, which is, which is doing some discrete event
simulation. And that's, you know, we all
know that a truck can do 90,000 to 120,000 TKMS a month, get 450
to 500 hours. We, we kind of know these
things. We know a decline can get
2,000,000 tonne a year out. You know, so we use a lot of
rules of thumb in mining and but what that doesn't allow you to
do is really push the envelope and get that extra 5 or 10% and
say, OK, how many tonnes can we really get out of a decline?
Or if we're loading a crusher underground, will one 2900 do?
Or if we put two in there, do we get double?
So we're starting to do simulation around those events,
you know, on a real time basis where you can, you can do some
calibration and then you can, you can run that and actually
see what you can do, you know, congestion.
So it really deals really well with congestion.
You put in crib times, you put in normal distributions, you do
all this kind of work. So, so that's exciting.
That's something that we're doing a bit new at the moment.
Chap Chap GPN Tech. Pretty nobody wants to pay for.
It but it's till now give a special discount card for that
yeah. What what about the the and it's
I wouldn't say it's going quiet, but there was the push not long
ago with the electrification of Australian mines, which is with
one in seven declines is very challenging.
And so not, not practical sometimes.
But with the new stuff coming out with I know there's the
battery electric trucks, but then the potential hybrid
versions for trucks and loaders. What is your first take on all
of this and is it all possible for a one in seven decline in
Australia? Yeah, Well, this is the actual
reason why we started doing the discrete event simulation,
because we wanted to understand how to compare diesel and
electric trucks. You know, when do you, how do
you charge a truck? How do you know do your battery
swap? Where does the charger go?
And really we wanted to model that.
I think we're definitely going to well, we're definitely
heading in that route. I think it's going to take
longer than what people think and I and every mine will be
different. Some mines will will have
battery electric trucks not a problem.
Others will have hybrids because you just cannot have a battery
big enough. So I think it's going to be
horses for courses. I I like electric loaders.
I think they will be a good thing.
My personal opinion is we won't be swapping batteries, We'll be
charging batteries. I think that is a a cleaner
more. I think the mines are more
amenable to integrating that than actually battery swapping
it. I think it sounds a lot easier
than it is. Charging is in hot like a hybrid
like. Charger.
No, I think you'll have a battery loader and you'll pull
up and you'll sit there for 2025 minutes and charge it up and
then you'll go again. Yeah.
The problem with battery swapping is each of those
batteries is probably worth $1,000,000 each.
So have you got three? You got $3,000,000 sitting there
charging or $2,000,000? That's another loader, yeah.
You might as well just have a loader and charge it up.
So, and they're probably some of the things we want to model
because you sound like, oh, you know, 22 minutes or 25 minutes
to charge up. Yeah, but you can go and have
crib, you can service it, you can do other things.
But really trying to understand what that means in the day to
day life of a mind, I don't think we really understand yet.
But the OEMs have still got some catching up to do.
They're not there yet. You know, there's not a whole
fleet of them sitting on Grayson Highway ready to go to work at
the moment. So yeah, it's going to take
time, but we will get there. Do you, do you think there's
going to be any change in how the clients and companies invest
like outlay the capital for Greenfield projects if there's
not like there's shit loads of them coming online in terms of
electrifying it with shafts instead of.
We're already working on a project.
We've been pushing conveyors. So we, we think because
conveyors is you know and it will depend on the depth and the
tonnage and, and all of that and we can model that.
So I think that is the easiest way to electrify a mine and and
haul decent amounts of dirt to you know, 2 to 3,000,000 plus
tonnes per annum because it kind of gets above where trucks
really work that well. So shafts I think we will see
shafts but they are big and expensive.
So I think there's got to be, and now all bodies don't really
suit it. I think the Super Pit will be a
classic. I reckon there'll be a few
shafts out there and they're running, I don't know, half a
dozen jumbos and half a dozen portals and they're going
bananas there. So there'll be. 24 million tonne
mines coming up, it's unbelievable.
They'll have a cave it. Possibly, yeah, yeah, sub level.
Good way to deal with all the voids.
Yeah, I'm OK myself. Yeah, what's the and so with the
conveyors is it, is it still you pretty much have to, it has to
be straight and then something going over the top of it and it
has to be a striped exact cannot be curved.
No, no, just impractical cost wise.
I think there is curved conveyors, but I don't think
anyone's doing that. Yeah, I think they're very old
simple technology, very easy way to electrify a mine.
I think the other thing that we've looked into and mines, you
know, we're seeing a lot more solar farms and, and you know,
wind farms on mine sites now so that even, you know, will will
bring us closer to having fully electric mines because there's
no point. A lot of the mines at the moment
are burning diesel on the surface.
So why electrify, electrify your mine only to add another 3
diesel gensets onto the surface. You know what, what are you
really doing it waste? It's it's not really much of A
benefit, but if we can tap into green power and in some of these
mines, you know, Lion Town just put in a massive hybrid power
station there, you have lots of green energy.
Same with Bellevue. Jandy are putting in some just
put in some wind turbines. I think so, yeah.
I think the future is electric for those mines.
And with those conveyor setups, is there like you, you might you
might be able to leave a hook for people to come through your
door here, but is there is there being evolved how to actually
develop the mine, install conveyor systems, maintain
egress without having to Chuck in multiple different declines
like can you drive utes under a conveyor belt?
The well Nifty had that so nifty had a conveyor belt in the top
part of the mine and you drive under it.
That was the main in and out of the mine.
The mines department don't really like it because if that
catches on fire, which conveyor belts can, and that's your fresh
air intake, then it's a problem. So, so really they they need to
be in an exhaust airway. So you will have they will have
service availability and you know you will be able to drive
white vehicles most likely beside them small vehicles to
clean up and whatever and service.
But more than likely they'll be in an exhaust airway.
But you'll be able to run HV down there and air water
pumping. Yeah and yeah.
So that will be used for other. And so you'll still have to
always maintain a conveyor free declines for main traffic, fresh
air intake. So does that will that likely
change how ventilation systems are designed in underground
mines? Because you've got to have,
you're going to have a dedicated return airway system that is in
a decline, not in necessarily. You'll probably still need both.
You will still need both because really at the bottom of the, the
bottom of the conveyor is a crusher which will produce dust.
So you want to be taking its own own dust out of the mine and
that's generally the way to do it.
So, but don't forget now you don't have 10 trucks running
1214 trucks or you know, so there's big benefits on
ventilation in that side of it. And then so I assume you're a
big part of what you guys will be doing is determining, right,
how deep can we put and all body dependent, how deep can we put
this conveyor and the crusher system and getting you the
earliest amount of cash flow because obviously the deeper it
goes, the longer it takes to get the most optimum production
going. Yeah, you normally start off
with trucks. Yeah.
So it's a. Ramp, you're always gonna.
Have to, yeah, You're gonna have to start off with trucks.
Yeah, yeah. Yes.
Well, it's too late. We digress.
We digress into talking mining. No, that was that was
fascinating. Just one last one on that.
Do you think sort of as a basic rule electrifying open pits will
be much easier before underground or you think equally
just very challenging? No, I think open pits definitely
electrifiable, especially the bigger ones that will use the
containeries. You know, they've been around
for a long time and and I, you know, they're just getting
better at modularizing these things so you can get them in
relatively easy and you can still have battery.
I know there's a few people working on battery triple sevens
and you know, aftermarket units and so forth.
So I think, you know, it's, it's a thing, it'll happen as well.
Awesome, Joe, I'm all out of questions.
Guys, do you know that you're recruiting for JI's or anything
at the moment, Jimmy, you can Chuck it for a job advert up at
the bar. Just put one on actually.
There you go very much. Oh right, thank you very much
for that. On on short.
You can't say it was short notice.
We've been trying for a year, but now I appreciate that.
Learnt an absolute shit load. Thanks a lot.
That's. The secrets of consulting.
Thanks very much. No, I haven't.
Yeah. Thanks guys.
Cheers. Awesome.
Sensational mate, tell you what special place in my heart in
tech Maca was one of the I think he was like my first ever
sponsor on life of mine back in the day.
What a champion. With me some cash each month and
I'll just I actually felt bad taking it.
He was, he was, yeah. He was one of the great the out
of that journey, one of the, there's a couple of people that
really influenced this whole thing and where we are today and
he was one of them. So fucking a lot of thanks to
him. Yeah, I don't think we'd be
doing money in mind if it wasn't fair.
Well, no, I'll tell you the story about why, and I think
I've told this before when I was just interviewing drunk
underground miners all the time. I'm I want to do a battery
metals spectacular of like I want to start talking about
these battery metals and start talking about the share Mark and
I went to macro said who do you know anyone who I could talk to
him about lithium, copper and nickel and he's like, I've got
the guy forwards me on to Andy Clayton from precision funds
management, who are next door. And that was how talking about
share market started start doing and then you 2.
Channel. One news channel 9 news and then
you 2 are like fuck this guy needs some help and his money
might so pretty much cheers Shane McLeod and cheers mineral
mining services, our floody partners, along with who else we
grounded. We've got grounded, we've got
cross boundary energy, we've got Sambic ground support, CR
insurance, Kaydrill Dash Sat. And thank you very much for the
intent for coming on. Have a great weekend, cheers.
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