Over the past six months conditions in the mining industry have worsened, and companies are now more likely to close down operations rather than push expansions.
Even at the best of times companies rarely build new mines, and if a new project does get off the ground it usually belongs to one of the multinational giants.
But in this tightening market several bright spots still remain, and earlier this month junior KalNorth Gold Mines made its mark by officially opening the Lindsay gold mine near Kalgoorlie.
The project represents a boost for the Kalgoorlie community and demonstrates that while times may be getting tougher, there's still plenty on the horizon for our mining sector.
Australian Mining travelled to the Lindsay mine to witness the opening of the new project, and spoke with the company's team about how they managed to get the development into production.
Quick and easy
The Lindsay mine sits atop a relatively normal gold deposit on the outskirts of Kalgoorlie, but the way KalNorth went about mining the resource is a little out of the ordinary.
To keep costs to a minimum Lindsay is as bare bones as possible, with a tiny workforce, no major infrastructure, and no processing, crushing, or handling facilities.
As it stands the operation is essentially one pit with ore and a waste stockpiles, and a road connecting the project to the nearby Carosue Dam processing plant, owned by Saracen.
Under an agreement inked late last year KalNorth hauls ore to Carosue and pays Saracen a fee to use its processing plant.
KalNorth managing director John McKinstry told Australian Mining the deal meant Lindsay started production much faster than most other projects.
“We've chosen a different path to a lot of other little companies,” he said.
“A lot of the others will keep spending money to build up ore reserves. We've chosen to dive in and try to get a cash flow generated early so that we can grow by self-funding more exploration.”
McKinstry said the arrangement meant that while Lindsay sat atop a relatively small deposit, the company was still able to build a viable operation.
He also said the plan kept shareholders happy, as the company did not have to return to investors to ask for more money.
“There are a lot of good small deposits around the place that just never get mined because they're not near enough to infrastructure,” he said.
“The reason we're able to do this is because we're able to get this deal with Saracen.”
The fledgling open pit operation at Lindsay. Image: Andrew Duffy
Less is more
Chief mining engineer Rodney Drown told Australian Mining a relatively low number of workers were needed for the early stages of Lindsay, and the bare bones approach applied to the management team as well.
“We run a fairly small outfit in terms of management system,” he said.
“We don't need a lot of people here to run the actual mine we just need key people in key places.”
But while the project runs on a small crew, Drown said all of the work on site had been awarded to Kalgoorlie locals.
“We run contracts for everything,” he said.
“We have a mining contractor, Kalgoorlie based. We have a haulage contractor, Kalgoorlie based. We use Saracen for the processing, which is Kalgoorlie based.
“Our drill, blast and grade control are also Kalgoorlie based. We've tried to focus as much as possible on the local community.”
Drown said KalNorth had decided against using a fly-in fly-out workforce because of the mine's proximity to Kalgoorlie.
He also said building a camp would be a multimillion dollar commitment that did not fit with the company's strategy.
“If I went to a FIFO model I'd need a 100-200 man camp sitting on site that is only 45 minutes from a city, which doesn't make sense,” he said.
“We're close to a major city that has hospitals, schools, and major infrastructure, and was built around the mining industry anyway.”
The ore spotter
Because KalNorth has committed to mining a relatively high grade from its deposit, the company has taken the unusual step of employing an 'ore spotter' to accompany excavators in the pit.
The ore spotter is specially trained and stands alongside the excavator to make sure the operator only removes the highest quality ore.
Drown told Australian Mining skilled operators could use their knowledge and experience to remove the right sections of the orebody, but because the company's standards were so high the spotter needed to be present on every shift.
“The pit is marked up by a survey initially but the ore spotter can go along and change the paint so it's easier for the excavator driver to see,” he said.
Because of the company's commitment to grade control Drown said KalNorth only mined during the day, with other operations completed on night shift.
“We do not dig ore on night shift,” he said.
“It's far too hard to see the ore at night, particularly with our style of orebody. On this operation we mine during the day and do bulk waste at night.”
The ore spotter watches over the excavator's digging. Image: Andrew Duffy
The company is also dead serious about enforcing the no-mining rule at night.
“At the end of every day there will be a white tape that goes down, it's called no-dig tape,” Drown said.
“All the contractors know what the white tape means and they do not cross that tape. If they do they'll most likely be fired.”
The fine print
Along with managing the details of the mining operation, KalNorth has inked a deal with the region's landowners to secure the rights for Lindsay.
The landowners, who run an extensive cattle operation over an area that contains several mines, told Australian Mining while the industry “definitely left its mark” on the land, owners could usually come to an agreement with companies in the area.
Landowners told Australian Mining one of the biggest impacts miners had on the land was the creation of roads, which opened access to their property and sometimes resulted in livestock or property theft.
They also said there was no financial incentive in their move to give KalNorth access to the land.
KalNorth said it expected to get around 40-45,000 ounces of gold out of the entire operation, which is expected to run for around 18 to 24 months.
By the end of it the company will have moved around 400,000 tonnes of dirt along with 7.5 million tonnes of waste.
The ore is trucked 74km from Lindsay to Saracen, and a return trip takes around three hours, with the company aiming for around four trips a day.
And while only one pit is operational at the moment, the company has approval to run with four pits, and aims to get a licence amendment to put a further two pits in place.
“It's initially open pit operations here first but there is a lot of underground potential to come on board,” Drown said.
“Over the coming years we will continue to grow to become a mid-tier miner in our own right.”
The first truck leaves the Lindsay mine. Image: Andrew Duffy