HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"
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Message: Explorers battle laboratory lags (Mining Weekly Online)
Explorers battle laboratory lags as hunt for new deposits heats up
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By: Liezel Hill
Published on 27th June 2008
Frustration over lengthy waits for drilling results to return from laboratories is becoming a familiar refrain of CEOs and exploration chiefs of companies hoping to build new mines in Canada and elsewhere.
It is common cause that the commodities boom has resulted in thinly stretched supplies of skilled miners, geologists, drillers and key equipment, but a lag between the surging demand and the response of laboratories in expanding facilities and hiring (and finding) trained staff has also meant that waiting times are now two or three times longer than they were about two years ago, says Aurizon Mines CEO David Hall.
The delays are particularly difficult for smaller companies, whose share prices and ability to raise capital can be linked to regular, positive exploration updates.
Vancouver-based Aurizon does not have this problem, as it is already producing gold from its Casa Berardi mine in Quebec, but has nonetheless begun to spread analyses across a number of labs, in an attempt to reduce processing times, Hall says.
Another chief executive, who asked not to be named, but whose company is still exploring its flagship project, told Mining Weekly Online that average turnaround times have more than doubled in the last couple of years, to as long as two and a half months.
The problem is a common one.
“My understanding from many of our members is that yes, drill results are taking longer to complete,” confirms Association for Mineral Exploration British Columbia communications director Cassandra Hall.
She adds that laboratories are clearly trying to meet demand by increasing capacity, “but this takes time”.
Her impression is that delays have made it difficult for some companies to file 43-101 reports and determine drill targets within the timeframes they are aiming for.
“The return of analyses is in many cases the biggest 'time bottleneck' for announcing exploration results, completion of 43-101 resource appraisals and even scoping studies,” agrees another CEO who asked that his name not be used.
However, although frustrating, Aurizon's Hall says he doesn't expect the longer waiting times will affect development timelines.
Ian Bliss, who heads platinum-group metals hopeful Northern Shield Resources, agrees.
“Whether you can get your assays in two weeks or two months...this has little impact on development timelines that are measured in months if not years,” he tells Mining Weekly Online.
That said, Northern Shield recently swapped labs for some of its sampling to a lab that only takes on a certain amount of clients.
“Because they restrict the number of clients, they don’t get backlogged and turnaround time is a guaranteed two weeks,” Bliss says.
'HARD PUSHED'
Thunder Bay, Ontario-based Accurassay Laboratories has committed more than a million dollars a year for the last three years in an attempt to stay ahead, “or at least on par” with demand growth, says GM Jason Moore.
“Last year was the first year where we were hard pushed to keep up with the industry as our expansion plans did not affect our capacity growth until late in the year and our turnaround bore the blunt of this delay,” he says.
In 2001, the company processed some 400 samples every 24 hours, while, at the moment, more than 3 000 samples are passing through its laboratories every day.
“In this industry turnaround is a major issue as most resources companies rely on these results for press releases,” adds Moore.
In light of this, the company still maintains a 10-days service on gold, platinum, palladium and some base metals for its main clients, and most clients have still not seen any primary analysis exceed 15 days this year, he tells Mining Weekly Online.
According to a report published earlier this year by Metals Economics Group, global spending on commercially-focused nonferrous exploration rose to some $10,5-billion in 2007, an increase of 40% over the 2006 estimated total.
For this year, the Halifax-based thinktank has forecast that exploration spending will increase by between 25% and 35% over 2007's figures.
Bliss believes problems with turnaround times has reached a peak, with many of the labs expanding their capabilities by building new facilities and hiring additional staff.
“But there was a time lag between the labs experiencing an increase in demand and their expansion, and to be fair this is understandable.”
In Canada, the bottlenecks are usually most severe during the summer months, when all the drill programmes are up and running.
At the end of the day,“exploration companies just have to live with the fact that turn-around times are a little longer than they have been in the past and shareholders just have to accept this too,” concludes Bliss.
It is common cause that the commodities boom has resulted in thinly stretched supplies of skilled miners, geologists, drillers and key equipment, but a lag between the surging demand and the response of laboratories in expanding facilities and hiring (and finding) trained staff has also meant that waiting times are now two or three times longer than they were about two years ago, says Aurizon Mines CEO David Hall.
The delays are particularly difficult for smaller companies, whose share prices and ability to raise capital can be linked to regular, positive exploration updates.
Vancouver-based Aurizon does not have this problem, as it is already producing gold from its Casa Berardi mine in Quebec, but has nonetheless begun to spread analyses across a number of labs, in an attempt to reduce processing times, Hall says.
Another chief executive, who asked not to be named, but whose company is still exploring its flagship project, told Mining Weekly Online that average turnaround times have more than doubled in the last couple of years, to as long as two and a half months.
The problem is a common one.
“My understanding from many of our members is that yes, drill results are taking longer to complete,” confirms Association for Mineral Exploration British Columbia communications director Cassandra Hall.
She adds that laboratories are clearly trying to meet demand by increasing capacity, “but this takes time”.
Her impression is that delays have made it difficult for some companies to file 43-101 reports and determine drill targets within the timeframes they are aiming for.
“The return of analyses is in many cases the biggest 'time bottleneck' for announcing exploration results, completion of 43-101 resource appraisals and even scoping studies,” agrees another CEO who asked that his name not be used.
However, although frustrating, Aurizon's Hall says he doesn't expect the longer waiting times will affect development timelines.
Ian Bliss, who heads platinum-group metals hopeful Northern Shield Resources, agrees.
“Whether you can get your assays in two weeks or two months...this has little impact on development timelines that are measured in months if not years,” he tells Mining Weekly Online.
That said, Northern Shield recently swapped labs for some of its sampling to a lab that only takes on a certain amount of clients.
“Because they restrict the number of clients, they don’t get backlogged and turnaround time is a guaranteed two weeks,” Bliss says.
'HARD PUSHED'
Thunder Bay, Ontario-based Accurassay Laboratories has committed more than a million dollars a year for the last three years in an attempt to stay ahead, “or at least on par” with demand growth, says GM Jason Moore.
“Last year was the first year where we were hard pushed to keep up with the industry as our expansion plans did not affect our capacity growth until late in the year and our turnaround bore the blunt of this delay,” he says.
In 2001, the company processed some 400 samples every 24 hours, while, at the moment, more than 3 000 samples are passing through its laboratories every day.
“In this industry turnaround is a major issue as most resources companies rely on these results for press releases,” adds Moore.
In light of this, the company still maintains a 10-days service on gold, platinum, palladium and some base metals for its main clients, and most clients have still not seen any primary analysis exceed 15 days this year, he tells Mining Weekly Online.
According to a report published earlier this year by Metals Economics Group, global spending on commercially-focused nonferrous exploration rose to some $10,5-billion in 2007, an increase of 40% over the 2006 estimated total.
For this year, the Halifax-based thinktank has forecast that exploration spending will increase by between 25% and 35% over 2007's figures.
Bliss believes problems with turnaround times has reached a peak, with many of the labs expanding their capabilities by building new facilities and hiring additional staff.
“But there was a time lag between the labs experiencing an increase in demand and their expansion, and to be fair this is understandable.”
In Canada, the bottlenecks are usually most severe during the summer months, when all the drill programmes are up and running.
At the end of the day,“exploration companies just have to live with the fact that turn-around times are a little longer than they have been in the past and shareholders just have to accept this too,” concludes Bliss.
Editor: Liezel Hill
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