In Mexico, open-pit mines dominate the industry because they are simpler to develop and require lower initial investment than underground mines. But the balance is slowly shifting since most higher-grade surface ore bodies have already been discovered, leaving companies to search deeper for ore.

Instead of launching new greenfield exploration programs, operators are looking closer to home for their next discovery. “The best place to find a mine is close to where other miners already discovered one,” says Kenneth MacLeod, President and CEO of Sonoro Metals. But they do not need to look far. As IMPACT Silver proved with its San Ramon Deeps discovery, an operator’s next big find could be right under their nose.

DIGGING DEEPER

Underground mine construction is often questioned because the processes involved are more complex, expensive and dangerous than open-pit mining. But, as underground mining involves a lower social and environmental impact and access to higher grade deposits, it is starting to catch the attention of operators. In fact, Rio Tinto forecasted in a 2010 seminar that by 2025 underground operations will account for 40 percent of global copper production.

Those that have dared to take the plunge are already reaping benefits from their underground expansions. In Chihuahua, the Palmarejo mine transitioned into a completely underground operation at the end of 2016, focusing on the promising Guadalupe and Independencia deposits. “Production is expected to increase over 50 percent in 2017 and based on reserves, it now has a seven-year expected mine life,” says Mitchell Krebs, President and CEO of Coeur Mining. “Importantly, grade and recovery rates have also improved and overall costs continue to trend lower.”

Similarly, after 10 years of mining, IMPACT Silver’s San Ramon mine was experiencing a drop in its grade in early 2015. “We began condemnation drilling and discovered what we call San Ramon Deeps, a deposit that is substantially larger than San Ramon but has never been explored,” says Frederick Davidson, President and CEO of IMPACT Silver. San Ramon Deeps houses high-grade silver zones of over 200g/t and has been the main source of IMPACT’s increase in average overall mined silver grade ever since.

HIGHER GRADE, LOWER IMPACT

Underground mines can even go as far as saving environmental and social headaches for operators. In early 2017, Philippine Environment Minister Roy Cimatu placed a ban on open-pit mines as part of an anti-pollution crackdown and other countries could well follow suit. Open-pit mining is increasingly falling out of favor in Europe thanks to environmental considerations and the scarring of surface structures, according to Christopher Warwick, Mexico Country Manager of Pan American Silver. “Most open-pits lend themselves to going underground if feasible,” he says.

Yet, some operators are reluctant to turn to underground mining due to safety hazards such as collapses and floods. Not only are underground mines more prone to accidents but they are also vulnerable to operating issues that may be far more complex to repair as a result of limited access. In 2016, Endeavour Silver’s Guanaceví mine in Durango broke into an area of hot water and did not have sufficient pumping, ventilation and electrical capacity to handle the hot water. “We started a recovery plan last year to expand our pumping, ventilation and electrical capacities and it should be complete this year so that the mine can return to plan by year-end,” says Bradford Cooke, Endeavour’s CEO. Although Endeavour remains confident in the long-term potential at Guanaceví, the incident caused the project to fall significantly behind on production.

A NEW ERA

There is no denying the impacts of the drawbacks in terms of safety and access issues in underground mining. But mining new deposits under an existing mine is understandably attractive for operators. No new property has to be purchased, there is no need for new negotiations with landowners and the probability of striking a deposit is increased tenfold. Moreover, underground grades tend to be higher and operators can mine underground while simultaneously operating their open-pit, more than doubling profits and production levels.

 

 

 
404

Looking for something?

Use the form below to search the site:


Still not finding what you're looking for? Drop a comment on a post or contact us so we can take care of it!

Visit our friends!

A few highly recommended friends...