For the first time the domestic mining company participated in the main profile forum of the planet Prospectors & Developers Association of Canada (PDAC). Its participants are those who are ready to discuss and implement large-scale projects in the field of geological exploration. The Chairman of the Supervisory Board of Aurora Minerals Group LLP Mr. Said Sultanov shared his impressions about the results of the global meeting of geologists with our magazine.
Every year, the mining industry representatives gather in Toronto to show their achievements, to learn of the latest industry news and to exchange international experience. Aurora Minerals Group was the sole company at the PDAC 2018 representing Kazakhstan.
- We prepared a video of the Kazakhstan’s investment attractiveness and presented it at our stand. The video describes the latest developments in mining legislation and events that will have a positive effect on the investment climate in the country.
At the forum, there was obvious optimism toward the work in Kazakhstan. Foreign experts expressed deep interest in working in our country. This indicates the confidence-building in investing in the country. Participants approached our stand discussed potential deals, financial costs of exploring deposits, said the CEO of the company. - Foreign geologists are concerned of how our industry will change as soon as new Mining Code gets into effect, while last year everybody worried about political risks. Hence, the prospects for foreign direct investments in the country have become more real.
Soar to new markets
Visitors of the Kazakhstan stand Aurora Minerals Group were the representatives of mining companies, financial funds, engineering and service companies, government officials from different countries.
- We had meetings with BHP Billiton, Anglo-American PLC, Newmont Mining, Centerra Gold Inc, and with the companies from China and Turkey," says PDAC 2018 participant. – Currently the prices for mining minerals are going up again. The Toronto Stock Exchange is very busy, and investors intend to soar to new markets, to make deals and to finance geological exploration projects.
In Western countries, with comfortable jurisdiction, there are no projects with high grade, since everything has long been explored. Moreover, currently companies are open to invest in projects with low grade, even not in the best jurisdiction, but with a large potential for growth in reserves.
For example, Lumina Gold conducts geological exploration in Ecuador with a very low gold grade (in the category of indicated resource of 8 million ounces with a content of 0.55 g/t), and the company's capitalization at TSV-V is over 200 million dollars.
“And in our country finding a shallow deposit with a gold content of 1.5-2 g per ton, I think is easy.” There are lots of such spots in the country. However cheap financing is inaccessible for us. Therefore, we believe the development of the stock market in Kazakhstan as one of the key success features, and the projects such as the development of AIFC(Astana International Financial Centre) with the application of English law will be a significant impetus to attracting foreign direct investments.
Now Kazakhstan has intensified exploration, and if geologists look deep, they will find new deposits. I even doubt that the Soviet-era geologists explored everything at a depth of up to 300 meters, as they say. Rather, not everywhere and not everything. Now with new technologies available, it's high time to look deeper, see and assess the situation with the “eyes” of the 21st century. The whole world went deep in searching for metals. 600-800 meters of depth is not the limit for exploration. It is more important for the projects to be economically profitable,” said Said Sultanov.
Recent discoveries in Mongolia prove that a burst of geological exploration and discovery is expected in Central Asia in the next two decades. And the Asian countries are now working to attract investment from the international market and to introduce modern subsurface management. Many foreign companies are eager to be the first to enter this market. Given the tempo of exploration and the activity of geological exploration companies, this opportunity is increasing, as the opportunity to open new deposits.
- Here, watching the activity of Rio Tinto, everybody is interested in its success. We also are interested in that they succeed –the AMG says. - They are like an anchor project other companies will follow them in case of success.
State-of-the-art and future
Today, geological exploration in Kazakhstan is gaining pace. If in previous years it was at very low, only existing deposits opened in the Soviet era were developed, no funds were allocated, then in the last five years it has shifted. The programs for the development of mono-cities (one-factory towns), the state government program appeared as the existing deposits began to deplete. Large companies started to allocate more funds minerals exploration.
- The main issue is human capital. There are few good geologists, drillers, geophysicists, IT specialists who are skilled to work with new technologies in our industry. Graduates of universities are poorly prepared for real work. Our company is always looking for ambitious and talented employees. Proffessionals interested in working with us, please send a CV to career@aurora.kz.
The Mining Code has been adopted, we hope for liberalization of the market and streamlined process of granting mining rights. Currently, the sector has slightly more than 500 mining contracts. This is very low for such a large territory, like Kazakhstan. For example, Australia has about 26 thousand licenses, and Mongolia - 2 thousand licenses. So in our country we should have at least 2-3 thousand mining licenses must be issued, - the speaker tells.
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Hopes for juniors
It is expected that many junior companies will operate in Kazakhstan. They will conduct geological exploration more efficiently than large companies since they try to use their funds, technologies and limited manpower as efficiently as possible.
Such approach is beneficial to large license holders too, they have no fears towards depletion of the resource base. It is supplemented by juniors.
- Earlier Aurora Minerals Group LLP was engaged only in prospecting geological exploration, now the projects have reached the stage of estimation and calculation of reserves. This year drilling works, detailed hydrogeological and technological studies ensuring calculation and protection of reserves are in prospect. We plan to do resource estimation by Autumn this year, - says Said Sultanov about the company's prospects. - The government should invest in Greenfield exploration from scratch, but not duplicate the previously achieved results. Each year various service companies receive 4 to 12 billion tenge ($1-330tenge) of state funds on a tender basis and conduct exploration. And where is the outcome? How pragmatic does the state choose the site areas for investing such funds?
As more mining companies enter the market, more private service providers emerge, there will be a competition and work efficiency will increase.
According to our speaker, a new period of geological exploration is coming. “A great number of licenses will be issued; the geologists will have more work to do. More people will be employed, more taxes will be paid, and new deposits will be more likely to open. If you sum up all that, this gives a very positive spillover effect on the economy and state as a whole. "
Trump card of the geologist
Geological exploration is primarily a science. Innovation both in the field of mineral exploration and in data processing greatly facilitates and accelerates the work of the geologist.
AMG straightway determined that, in addition to various consultancies, services and attraction of investments in mining sector of Kazakhstan it will focus on the transfer of new technologies. Its first partner was Danish SkyTEM, the leader of electromagnetic technologies.
At the end of last year Aurora Minerals Group signed a three-year contract with Airbus Defense and Space in the field of Earth remote sensing.
- Thanks to the Airbus satellite constellation our company conducts satellite monitoring, mapping of subsoil use sites, monitoring of rock fold and ground subsidence. After the specialists conduct spectral analysis and apply geological symbols (geochemical boundaries, the direction of faults, rock types, etc.) the space image becomes a digital map with meter accuracy, which is then superimposed with the results of geochemistry, airborne geophysical and ground geophysical data and, last, with the results of drilling. When different layers of data are analyzed all together, the geologist obtains an objective model of the ore body, - explains Said Sultanov. - This technique is used worldwide. It excludes blind drilling, as this is the most expensive and the most labor-intensive kind of work. Companies will spend 1-2 years for the analytics before they start drilling. When we start drilling, we must know 90% what we can expect in the core.
In other words, the whole technique is designed to reduce the risk associated with the exploration. At the PDAC forum, the participants noted the efficiency of this exploration technique: all auxiliary methods must be used in combination with basic one - drilling. More than this, it helps to see how the site can be turned into a deposit and put into production later.
- When we need to know the opinion of a third independent party, we use Intrepid Geophysics software solutions. What for? - Said Sultanov asks and immediately responses. - We collect, analyze and interpret geological and geophysical data, and in this case, two heads are better than one, but three are better than two.
Under geological franchising Aurora Minerals Group imported to Kazakhstan the Ground Probe radars to control the stability of the slopes, which enable remote monitoring the stability of the slopes of open quarries and forewarn of the fall of the edges. The radars were tested at large industrial facilities in Kazakhstan and will soon be installed to ensure the safety of production and workers.
The company has high hopes for the use of artificial intelligence technologies, and it conducted such research on the project in Australia, where Aurora Minerals Group is working with large industrial group from Kazakhstan.
More drilling, geophysics and geochemistry
- Over two and a half years we managed to work nearly throughout Kazakhstan. We started with airborne geophysical research in the Karaganda region and North-Kazakhstan region. In Almaty and Akmola regions, we conducted geochemical and airborne geophysical operations. In the East Kazakhstan region we are fulfilling a number of projects. In Aktobe region we conducted airborne geophysical and electromagnetic survey, 5 000 m of diamond drilling on four gold ore facilities. And we plan to open a gold ore deposit near Yubileiny,” said Said Sultanov.
But AMG expects much more success from exploration results on four thousand square kilometers in the North-Kazakhstan region, where airborne geophysical and 10.000 RC drilling for gold and polymetals were conducted. This is a rather interesting region: the entire area around the Vasilkovsk deposit within a 400 km radius is of great interest to our geologists.
“The Aktobe and North Kazakhstan regions are underdeveloped and very rich in minerals,” the speaker said. - Looking at the interactive map (https://gis.geology.gov.kz/geo/), I notice that more mining companies expressed interest in these regions. A couple of years ago, it had many unoccupied sites. Now all the blocks available in the west and north are contracted. Investors have an interest in exploration. As it seemed to us the last mining auction was successful. The prices for minerals have risen, the moratorium on granting the right to subsoil use has been lifted, and all measures taken by the government to liberalize the industry have led to that not just foreign investors were attracted, but Kazakh companies also began investing in geological exploration projects.
The new mining auction will be held on 22nd of June for 69 exploration and extraction licenses, and Aurora Minerals Group is ready to help its clients
The company's management believes that the last field season was very successful, and is carefully preparing for the upcoming season. The office is buzzing with activity - a work plan is drawn up, own resources are distributed; a working group is created for each project for a new surveying season. Geochemistry, airborne electromagnetic survey, ground geophysics using the induced polarization (IP) method to identify prospective anomalies, exploratory drilling by RC method in poorly studied sites and exploratory core drilling on ore bodies with subsequent calculation of reserves are expected to be conducted.
Sergey Ten
Translated from magazine "Mining and Metallurgical Industry" №3-2018
