Small Mining - A Perspective for Profitability

For small precious metals mining to show a comeback a different perspective must be taken than that of larger mining companies. This perspective must be much the same as that of past successful smaller mining enterprises such as when the US had a need for Uranium. Abandoned mines and environmental concerns in older mining districts have discouraged many from entering with the attitudes of why try there if so many unsuccessful mines exist. A small mining venture can be successful there but must have a "think smart'' attitude. There must be a thorough understanding of deposits, utilization of advanced technology and a properly managed mining operation. "THINK SMART" MINING The small mine operator is usually looking for small high grade deposits, consequently, long term success depends on a series of small successful mining operations. The small miner must succeed right-off or credibility and future project funding will suffer. No veteran of even a few years in the mining industry needs to be told that a dollar spent on production today fails to yield as much as it once did. More efficient equipment and techniques have helped soften the problem, but there is little likelihood that a mining company can do much to control inflation, wages, regulations, or grade. That leaves the small miner to "think smart" as one area where operating dollars can still be stretched to produce more than they presently do (Gardner. 1981). In the planning stage of a mining venture, when most options are still open, the main controllable elements are market timing, deposit selection, cutoff grade, mining method, mine design, mining sequence, rate of production build up, process design, project financing structure, project management, and project ownership structure. During planning, optimum criteria can be established for each of these. Once a mine is in production, these options are foreclosed or at least severely constrained. The more thought given to a mining program using all information available the less the risk of encountering disabling surprises. Thus the intent of this paper is to suggest the "think smart" attitude most small mine operations use for long term success. If one looks at a number of successful mining ventures, whether large or small, there is a general logic most have followed to be successful. They have used proven exploration, mining and processing techniques along with economic evaluation and experienced personnel to improve their odds. LOGIC IN DEVELOPING A FEASIBLE VENTURE Most successful small mine ventures achieve positive cash flow as quickly as possible by seeking out those deposits which require the least time and expense on activities leading up to production. To do this they look for deposits that are the most accessible, easily investigated, mined and processed with the cheapest fundamental methods. The general sequence of events starting with district selection are deposit selection, preliminary feasibility, exploration, detailed economic feasibility, mine planning, development and production. Each successive step becomes more costly requiring intermediate decisions along the way. District Selection Small operations should look for known deposits which favor the occurrence of the type deposit sought rather than efforts in unproductive areas. Known deposits in developed areas have some advantages over remote areas: 1. More alternative methods of transportation are available. 2. A larger stable work force is available. 3. The area is usually more pro-mining. 4. Power, water, housing, technical services, skilled services, schools, recreation and shopping are available.