Geological Risks in Junior Mining Company

Geological conditions pose technical challenges for mine-operators as well. The huge copper/zinc orebody in Flin Flon, Man., for example was not developed until many years after it was discovered. It was delayed because in 1915, when the deposit was discovered, there was no economic way to extract the the zinc from the ore, which contains more than 15% talc.

Also many mineral deposits are oriented at awkward angles. This can cause difficulties in handling the ore underground and in supporting the ground while it is being mined.

Another risk is the quality of the work done to calculate minable reserves in any given deposit. This is particularly true of underground deposits, which may pinch and swell and be less continuous than indicated by surface drilling and initial deposit modelling. To mitigate this risk, mining companies often carry out an underground exploration program, which may include closely-spaced, infill drilling to upgrade resources into reserves and, possibly, a bulk sample to get a better handle on grade. Often the reserve calculation is audited by an independent engineer in order to reduce the risk for mine financing.

Some mines run into ground support problems when mining reaches a considerable depth. Those problems can increase the complexity and the cost of mining. While in the early years of a mine’s life, extraction may have been relatively expensive, but costs may escalate as mining progresses at depth, so this must be anticipated and accounted for in the feasibility study.