Tag Archives: Polyus Gold

Polyus connects Natalka to Ust-Omchug — Omchak power line

Environmental, Mine operation news, Mining services, Power supply for mines, Precious metals, , , , , ,

Polyus says the Ust-Omchug — Omchak power project in the Magadan region of Russia has been completed, with its Natalka gold mine now connected up to a new 220 kV power grid.

The total construction capital of this project (excluding VAT) amounted to around RUB10 billion (around $126 million), with some RUB6.5 billion attributable to state subsidies received by the company over the 2016-2019 period.

The new line provides additional energy transmission capacity, improving the reliability of low-cost renewable power supply in the region, the company said.

Earlier this year, Polyus signed a large-scale five-year electricity supply contract with regional hydropower company, PJSC Kolymaenergo, a subsidiary of PJSC RusHydro. As of today, Natalka covers 90% of its electricity demand from renewable sources.

Pavel Grachev, Chief Executive Officer of Polyus, said: “The Ust-Omchug — Omchak line is an important infrastructure project that facilitates continuity of operational processes at Natalka. It also contributes to our company’s development as a responsible operator, as Polyus is committed to creating a low-carbon and sustainable future.”

SMC Test comminution benchmark hits new milestone

Comminution of minerals, Environmental, Metallurgy, Mineral processing, Mining services, Sustainable mining, , , , , , , , , ,

This month, the Australia-invented SMC Test®, used by leading mining companies over the globe to improve concentrator performance, optimise throughput, and decrease energy use, reached its 50,000th test. This makes it, the company says, the most widely used comminution test in the world for AG & SAG mills, HPGRs and crushers.

The SMC Test database spans over 1,900 orebodies, 100 countries and 47 different commodities ranging from copper, gold, and iron to diamonds and rare earths. This makes it the largest database of its kind in the world, according to SMC Testing, giving unparalleled insight into the energy required to fully extract valuable minerals from ore.

A laboratory comminution test that provides a range of information on the breakage characteristics of rock samples for use in the mining/minerals processing industry, the SMC Test uses either crushed rock pieces that are very closely sized (‘crush and select’ method), or particles cut to similar size from drill core using a diamond saw (‘cut core’ method). The latter approach is used when a limited drill core sample is available, with almost any drill core size suitable, even core that has been quartered (slivered).

The chosen rock particles are broken using a closely controlled range of impact energies on a JK Tech Drop Weight Tester. The high degree of control imposed on both the size of particles and the energies used to break them means the test is largely free of the repeatability problems that plague tumbling mill rock characterisation tests, SMC Testing says. The results from the SMC Test are used to determine the drop-weight index – a measure of the strength of the rock as well as the comminution indices Mia, Mih, and Mic. In conjunction with the Bond ball mill work index, they can be used to accurately predict the overall specific energy requirements of circuits containing AG and SAG mills, ball mills, rod mills, crushers, and high pressure grinding rolls (HPGRs).

The SMC Test also generates the JK rock breakage parameters A, b, and ta as well as the JK crusher model’s t10-Ecs matrix, all of which are generated as part of the standard report output from the test. These values can be used to simulate crushing and grinding circuits using JKTech’s simulator – JKSimMet, according to SMC Testing.

The SMC Test’s broad-ranging uses include comminution plant design, circuit performance optimisation, throughput forecasting, geo-metallurgical modelling, as well as cutting energy costs and reducing CO2 emissions.

“The precision and accuracy of the SMC Test have been the main driving forces behind its success globally,” Dr Steve Morrell, SMC Testing CEO and inventor of the SMC Test, said. “These attributes of the test are hallmarks of reliability and quality that mining companies base important forecasting decisions and financial models upon.

“It has been proven through benchmarking against an unprecedented 120 processing plants around the world, covering just about every type of comminution circuit in operation, including the largest to the smallest equipment available on the market, and treating some of the softest to the hardest ores that have been discovered to date.”

Used by 18 out of 20 of the largest mining companies in the world, the SMC Test helped Barrick Gold achieve a 20% net energy improvement and a reduction in CO2 emissions by 43,000 t, a cost saving of $5 million/y in energy costs, SMC Testing says. The comminution circuit throughput also increased annual gold production by 60,000 oz.

The approach taken to benchmark and improve Barrick’s global operations was later developed into an international guideline by the Global Mining Guidelines Group, called ‘The Morrell Method’. Morrell, meanwhile, in 2018, was inducted into International Mining Technology’s Hall of Fame.

Further increased efficiencies and cost savings include Batu Hijau in Indonesia, where a throughput decline was reversed and annual revenue increased by an estimated $150 million, while optimisation initiatives at one of Polyus Gold’s sites led to an annual increase in revenue of over $30 million with the assistance of the SMC Test. Compañía Minera Doña Inés de Collahuasi, the Chile copper asset co-owned by Anglo American and Glencore, meanwhile, has developed a 99.85% accurate throughput forecast model using the SMC Test.

“Many people assume that such large revenue benefits must mean that the SMC Test is expensive to conduct,” Morrell stated. “However, for what often works out as less than 1 cent per tonne of ore, there is a significant upside when resultant savings or revenue increases can be measured in tens-of- millions-of-dollars.”

SMC Tests can be done on as little as 5 kg of sample and ordered through a global network of approved laboratories licensed to conduct the test.

Gold price rise revealing exploration deficit, Wood Mackenzie says

Mineral exploration, Precious metals, , , , , , , , , , , , ,

Even though the resurgent gold price has garnered a renewed sense of optimism in the gold industry, a lack of exploration spend from miners means it is facing a potential period of secular decline over the long-term, according to Wood Mackenzie’s gold team.

Exploration budgets were slashed following the fall in the gold price from the highs that were reached in 2011/2012 and they have since failed to recover, according to Wood Mackenzie.

“The slight rebound in exploration spend we have seen over the past couple of years has largely been focused on brownfield projects and near-mine development,” the analysts said. “This has not been sufficient to replenish mined ounces and, as such, peak gold supply is now a very real possibility.”

Over the past couple of months, with gold breaking through $1,500/oz, it seems that exploration activity may be turning a bit of a corner.

The analysts provided evidence:

  • In late June, Agnico Eagle Mines started an exploration drilling program at its Amaruq site in an effort to convert underground indicated resources;
  • On September 4, Polyus announced the completion of an exploration drill program at its Sukhoi Log project (pictured) that totalled 203,647 m and is planning 30,000 m of infill drilling in 2020; and
  • On September 10, Newcrest reported that its exploration program on the Havieron project, located 45 km east of Telfer in Australia, has four operating drill rigs, which have cut 6,166 m and a fifth drill will begin in September.

It will be some time, however, before this activity translates into reserves and ultimately into production.

Proposed exploration budgets for the largest producers in 2019 remain fairly conservative compared with the levels reached in 2012, according to the analysts. It would therefore seem unlikely that the trend in declining reserves will be abated this year.

Producers have been very vocal in reaffirming their strategy of cost control, portfolio management and capital discipline, particularly since the run up in the gold price, ensuring they do not get criticised for the same type of costly M&A and marginal project spend they carried out in the previous gold price highs.

“How steadfast miners will be to this strategy into 2020 and beyond, if prices continue to remain well supported, remains to be seen,” the analysts said.

Due to insufficient exploration spend, gold reserves have depleted significantly with the global average mine life falling from 16 years in 2012, to an estimated 11 years in 2018, they said. However, the largest producers are not facing quite such an acute situation, with their collective average mine life still over 16 years. “It is perhaps therefore not so surprising that they can afford a more calculated approach to replenishing reserves.”

To secure their longevity as pillars of the gold industry, Wood Mackenzie said it has seen heightened M&A activity and miners focusing on their core assets. While this may help to bolster balance sheets through improved operational performance and realised ‘synergies’, it seemingly does little to address the problem the industry is facing with regards to how to sustain current production levels.

“We have, as of late, noticed an uptick in some majors opting to increase their footholds in a select few juniors with promising exploration opportunities,” the analysts said.

Agnico Eagle, AngloGold Ashanti, Kinross and Newcrest are actively investing in, or entering into joint-ventures with junior gold companies to create long-term value.

Agnico Eagle announced a proposal on June 24, 2019 for an all-share acquisition of Alexandria Minerals Corporation at a $0.05 per share premium to the Chantrell Ventures Corp offer; however, O3 Mining acquired Alexandria on August 1, 2019.

AngloGold Ashanti upped its stake in Pure Gold Mining to 14.3% on July 16, 2019, which owns the Madsen gold project in Red Lake, Ontario.

Kinross purchased the near-surface, early-stage Chulbatkan project in Russia from N-Mining Limited for a total consideration of $283 million on July 31, 2019.

And, Newcrest entered into a 70-30 joint venture with Imperial Metals on August 16, 2019, where Newcrest will be the operators of the Red Chris mine, a potential ‘Tier One’ asset in British Columbia, Canada, the gold miner has said.

The analysts said: “We expect to see this trend of increased M&A activity to continue, particularly amongst the more mid-tier gold producers as they look to solidify their own positions in the industry. This will likely encompass mergers with peers to unlock shareholder value and the acquisition of assets that majors have determined to be non-core.

“This may help to progress some later stage projects into production that have been sitting on the shelf for a number of years, but we are not anticipating a knee jerk reaction to current prices. Smaller projects which have a short payback period, in a low sovereign risk jurisdiction, are an attractive proposition and we could see a number of these projects being fast tracked into production.”

And, going forward, to address the predicament of declining reserves, if prices remain elevated miners may be inclined to review their reserve and resource price assumptions, the analysts said.