Opportunities for Partnerships in Contract Mining

The underground mining of a narrow vein hard rock orebody is a capital and labour intensive method of extraction. Due to the nature of underground mining it is difficult for higher level managers to physically see the efficiencies and inefficiencies of a particular method. Extraction methods and sequencing often need to be altered from the original planned methods as a result of mine developent, providing more in depth information as it progresses. As a result of these issues contract mining of these orebodies is common practice. There are several types of contract structures for the purpose of underground contract mining with many complex permutations of them that reflect the different needs of each individual company and orebody. The different contracts are arranged dependent on the mining companyÆs desire to transfer or, alternatively, embrace risk. This presentation gives a brief overview on these different methods and their various advantages and limitations with regard to small scale and narrow vein underground mining. With respect to these different contracting methods, the presenter reviews the mutual growth benefits of emerging partnering opportunities, specifically with regard to smaller explorers exploring and developing prospective mining tenements. The specific advantages to small explorers include the resource flexibility and speed of project development that private mining contractors can provide. Given the contracting methods that are available, there is potential for small private mining companies to gain minor stakes in major projects and major stakes in medium sized projects by employing innovative contracting solutions to provide mutual benefits to the parties. Some potential scenarios to this effect are suggested in the presentation. This paper is available as a PowerPoint presentation only.