Tag Archives: directional drilling

Drilling innovation directs Alamos to golden goods at Island

John A McCluskey, President and CEO of Alamos Gold, tends to look forward, not back, when talking about strategic decisions the Toronto- and New York-listed miner has made during his 18 years heading up the company.

When discussing the acquisition of Richmont Mines, which included the flagship Island Gold Mine asset in Ontario, he allows himself a brief rumination on the market’s first impressions of the deal: “We acquired the asset for around $620 million in November of 2017. The consensus view in the market was we had overpaid for the asset.”

That consensus view considered 1.8 Moz of mineral reserves and resources and production around the 100,000 oz/y mark, among other factors.

“In less than three years, we had Island over the 4 Moz reserve and resource threshold – we’re now nearer to 5 Moz – and the consensus valuation for the asset from analysts covering us is around $1.4 billion.”

That new valuation factors in a production rise – the company is anticipating gold output of 130,000-145,000 oz this year – and long-term growth prospects for the asset. The latter is evidenced by an Island Phase Three Expansion study published last year that envisaged a 2,000 t/d operation (currently 1,200 t/d) able to produce 236,000 oz/y starting in 2025.

While McCluskey says the company was aware of these growth prospects back in November 2017, most market observers will be surprised they have been proven up so quickly after the Richmont Mines transaction.

They probably underestimated what the use of surface directional drilling could do at Island.

Originally leveraged by Richmont Mines’ Chief Geologist and now Island Gold Chief Geologist, Raynald Vincent, back in 2015, the exploration technique has allowed Alamos to successfully step out from and infill holes Richmont and predecessors previously drilled.

Scott R.G. Parsons, VP of Exploration for Alamos, says surface directional drilling, in combination with the exploration team’s understanding on the controls on gold mineralisation at Island and Alamos’ financial backing for exploration, has helped the company grow the asset rapidly.

“The significant resource and reserve growth at Island in the last three years – adding 3 Moz net of 500,000 of mining depletion – was largely driven by surface directional drilling,” he told IM. “We could not have moved the asset forward in such a significant way without it.”

The use of what Parsons says are “standard” surface drill rigs and Devico’s DeviDrill™ steerable wireline core barrels are allowing the company to hit mineralisation far below the mine’s existing underground infrastructure. The DeviDrill tool can make multiple branches from a pilot hole, dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods. At the same time, no time is lost on moving the drill rig between branch holes, as the core barrel can be steered from surface to complete the optimal drill patterns.

The DeviDrill tool can make multiple branches from a pilot hole, dramatically reducing both the time spent and the cost of drilling when compared with standard core drilling methods (photo: Devico)

The company has drilled 240 surface directional drill holes at Island for about 200,000 m of drilling using only 27 drill sites, Parsons explained.

“Using conventional surface drilling, the 240 holes would have required significantly more drill sites,” he said.

This would have involved moving the rig more frequently, making the process that much slower and expensive.

Instead, thanks to this directional drilling technique, the company is sitting on an additional 3 Moz of gold resources and reserves garnered in the last three years. This has come with a discovery cost of just $11/oz.

Accuracy, as Devico indicated, is another benefit of this technology.

“Surface directional drilling is not only more effective than standard drilling practices, but we can hit our targets with 1% accuracy,” Parsons added. “So, if we’re drilling a 1,500 m hole, we can typically intersect our target within 15 m from plan, 1,500 m downhole. This predictable drilling spacing is critical for defining a mineral resource with the appropriate confidence level.

“You’d never be able to do that with standard surface drilling.”

This technique is not a silver exploration bullet, though. According to Parsons, it does not work everywhere.

“It really all hinges around the quality of the orebody and our understanding of the deposit and the controls and the mineralisation,” he said. “Knowing we require a certain drill spacing to be able to define inferred mineral resources, we strategically target the down-plunge extensions of the ore shoots.”

At Island, these ore shoots – which are the high-grade portions of the deposit – are laterally extensive in the lateral and vertical sense, Parsons explained.

“With the surface directional drilling, we are able to specifically target these down-plunge extensions,” he said. “With one or two pilot holes and branch patterns, we can evaluate a large area down-plunge and along strike of the existing mineral reserves and resources. In some cases, other gold deposits can have ore shoots that are less predictable, or are not as extensive, so it would be a challenge to apply surface directional drilling without having a strong understanding of the controls of these shoots for targeting.”

And, it should not be forgotten, it requires an investment in exploration that goes beyond simply reserve and resource replacement on an annual basis. Richmont, a much smaller company, was unable to bankroll such a strategy.

Alamos has made a commitment to do this, as evidenced in the 16-year mine life outlined in the Island Phase III study and the $25 million it intends to invest in exploration this year.

The use of surface directional drilling looks set to continue paying off beyond this study, with the company recently drilling its best-ever hole to date by leveraging the technique.

Drill hole MH25-08 – 71.21 g/t Au (39.24 g/t cut) over 21.33 m – in addition to MH25-04 (28.97 g/t Au (26.89 g/t cut) over 21.76 m) have true widths approximately four times greater than the average width of the large high-grade inferred resource block defined up-plunge of them (photo: Alamos Gold)

Drill hole MH25-08 – 71.21 g/t Au (39.24 g/t cut) over 21.33 m – is the hole in question. This hole, in addition to the previously reported MH25-04 (28.97 g/t Au (26.89 g/t cut) over 21.76 m), have true widths approximately four times greater than the average width of the large high-grade inferred resource block defined up-plunge of them. This, the company said, demonstrates the zone has widened in this area, providing even further potential beyond the company’s current growth plans.

“That one – MH25-08 – is the best drill hole ever drilled at Island,” Parsons said. “And that is after 1.3 million metres of drilling and over 7,000 drill holes dating back nearly 100-years.

“That speaks to the potential of this deposit to continue to grow through exploration, and also highlights the prospectivity of the Michipicoten Greenstone Belt.”

More to come

With 27,500 m of surface directional drilling scheduled for 2021 – and only 6,683 m carried out as of May 31 – more of these high-grade intercepts could soon come to the fore.

And Parsons says the company can continue to use surface directional drilling some 500 m below where it is currently drilling down to at Island.

On top of that, the company, having established the necessary underground exploration infrastructure, is equipping its underground drill rigs at Island for directional drilling, with 24,000 m of underground directional drilling planned this year (3,233 m completed as of the end of May).

“This is allowing us to reduce our cost per metre compared with surface directional drilling and allowing us to drill more targets in a shorter amount of time,” Parsons said. “We will continue applying directional drilling technology as long as the orebody is continuing at depth to drill off those ore shoots.”

At Young-Davidson, the company’s other core asset in Ontario, Canada, the company is also making plans to use underground directional drilling.

“One of our plans going into 2022 is to evaluate opportunities to utilise directional drilling from underground exploration drifts established in lower and mid mines at Young-Davidson to target mineralisation down-plunge at depth,” Parsons said.

More broadly, Parsons thinks the company’s exploration team can leverage their understanding of the technology at other assets.

“For us, it is a competitive advantage,” he said. “With a solid geological understanding of the deposit you are looking at and an understanding of the application and the benefits of directional drilling, we can recognise opportunities of what could be occurring at depth where others might not see potential until well into the future after underground infrastructure is established at depth.”

There are obvious cost, time and accuracy benefits to using directional drilling, yet there is another benefit that may get lost along the way.

Without the need to constantly move the surface drill rigs between drill pads, the footprint of these rigs is reduced.

McCluskey says the technology has brought another ESG advantage to Island too.

By being able to quickly drill off more targets and convert these into the resource base, Alamos has been able to think long term with its Island Gold Phase III Expansion and justify the expense of a shaft and paste backfill plant.

This comes with a 35% reduction in emissions compared with using the mine’s existing ramp and diesel-powered truck haulage, he said, explaining that much of the Ontario grid is powered by renewable hydroelectricity.

“This technology has given us the exploration success that has been converted into scale and allowed us to think longer term and afford the infrastructure to make it a ‘greener’ operation,” he said.

With such a long list of benefits, more companies will be looking at directional drilling to prolong the life of their assets and make long-term decisions that make economic and sustainable sense.

Avoiding hit and miss drilling programs

As mining companies go further afield and explore under cover to replace diminished reserves, deep directional drilling on existing sites is increasingly becoming part of their campaigns, according to IMDEX.

There is plenty to consider before embarking on a drilling program, including traps in chasing the cheapest price if it fails to deliver, by not hitting the target.

IMDEX Global Lead, Directional Drilling, Kelvin Brown, and General Manager, Product Development, Dr Michelle Carey, discussed the issues in a recent webinar, ‘Directional Drilling: Strategies and technologies to stay on target and not blow your budget’.

Dr Carey said statistics revealed that directional drilling was increasing and is estimated to grow to around 20% of a drilling program.

“As we all know, it’s getting harder and harder to make discoveries,” Dr Carey said. “A lot of the reason for that is that increasingly we’re having to go under cover.

“What that means, in reality, is that instead of going into a greenfield site, people are going to their existing deposit to start drilling plans. Rapidly you find yourself in a situation where you are drilling quite deep holes, and you’re drilling quite deep holes where you have a target in mind.

“The other thing is the cost of drilling is going up, so we’re actually getting less bang for our buck.

“So really what we need are technologies and approaches that allow us to control cost as we drill deeper, and really balance out cost versus risk. It is not just about low cost – if it means you do not hit your target. It becomes increasingly important that we all know how to do it well.”

Dr Carey and Brown discussed a range of technologies and products designed to increase drilling productivity and efficiencies, including drilling fluids.

“There is an amazing amount of technology available now to help you in your cause of optimising your drilling program. It’s drilling with data,” Dr Carey said. “This is all technology that people have available to them now.

“In directional drilling, we offer downhole motors, one of a number of different technologies for directional drilling which has the combined advantage of flexibility and driller operability. You have got the fluids, which can be critical to how successfully your program runs and IMDEX MUD AID™, which allows you to monitor that.

“And, complementing the fluids, you’ve got a solids removal unit which, again, is optimising your fluid system, removing cuttings, things like that contribute heavily to how successful your drilling program is.”

The other critical technology in directional drilling is the survey tool. Brown said selecting the right survey instruments that could quickly provide the best data, faster, translated into a lower cost.

“The sooner you have it, the sooner you can make a better decision,” he said.

And, for Dr Carey, that means using the data to alter the drilling plan, if required, rather than “blindly going forward” with the initial plan.

“It’s incredibly important that you know when to pause when certain things happen and say, ‘here was our plan, but now we have some data and our plan has changed; let’s step back, plan again and go forward’,” she said.

Brown added: “You need to pay attention to the data. If the hole goes on and it is not going where it needs to go, it won’t fix itself.”

A good relationship with the drilling contractor is also essential, with Brown saying some contracts appear to have “punishment clauses” for failing to hit the target.

That approach has unintended consequences, according to Dr Carey.

“It actually causes people to cheat,” she said. To start manufacturing survey data to ensure they stay within the target zone and that is not the outcome you want.

“Another thing we do see sometimes is that people might have contracts put in front of them with what looks like an attractive rate for doing deep drilling and directional drilling; in fact it looks so attractive that you know they are not going to be able to get the job done for those price tags. Although it seems tempting to sign up to those contracts, you are not doing yourself any favours.”

Brown said: “Things look simple when everything is bundled into a cost per metre, but when it comes to directional drilling everyone needs to understand that there is a time component and you have to be conscious of that.

“If it is about hitting the target, it’s about hitting the target. There is no point having a cheap hole that misses the target.”