Saturday, June 6, 2015

Mining the Tarkine Part 3

                                        Hope springs eternal within the human beast
                                        Don't mind much if it makes no sense
                                        If I grab some crumbs at least.
                                                                           Apologies to Alexander Pope
Anyone stupid enough to invest in mining the Tarkine or anywhere else in Tasmania is going to have their heads handed to them on a platter.  That is one of the laws of nature around here.  Basically there are three kinds of people in the industry.   There are working people who get their hands dirty making a basic living for a time.  There are the experts - geologists, mining engineers, consultants and  accountants who do the smarter tasks which are absolutely necessary to gather the body of information that will progressively de-risk a project so as to allow serious investments by sophisticated investors.  And if you are in the mining business and fit in neither of these, there is only one category left which is that you are a filthy little tout.  As I have previously explained 99% of these projects fall flat and people fail to realize the multitudinous ways they can and will take you down with them.  Shareholdings for yourself, the wife and kids, and your mum are only the most obvious and most likely to generate life-long family splits and recriminations.

Back in the late sixties I spent my summers working at mining exploration in northern Canada.  We were looking for base metals and our company was doing contract work for very big corporate names.  We went through the motions of minefinding, but what we were really doing was eliminating hundreds of small prospects over huge areas.  Copper stains were here or there on rocks, lumps of galena in glacial float, whatever and the first stage was to take sediment samples from lakes and streams throughout the watersheds which were first tested by colourimetric means then chemical analysis in Vancouver.  Anomalies were plotted on maps and if they were significant then gravitational, magnetic or electromagnetic surveys were done accordingly from the air or on the ground over lines which I and a couple others would have cut or at least marked; up hill and down dale over our staked claims.  And then we did the right thing which was to disappear because we had already spent large sums of money and the probability of doing better by tearing the place up was negligible.  Or at least Newmont Mining thought so.  All our efforts only generated one drill program in three years as far as I know.  They plopped a rig in by helicopter, we put the crew up in our camp, they drilled a few holes up in a cirque and we pulled out in the autumn never to return.  Especially the cook who went early; he was supposed to be a reformed drunk but he had taken it into his head to poison the drillers; none of whom were as punctual, clean or nice as us college boys.   Whatever demons had taken temporary or otherwise possession of the man, the drillers were unwilling to test his veracity and a plane was sent in especially for him.

Someone else found a mine nearby that we had walked over.  We had spent a couple of our days off  working an old placer deposit for gold with a sluice box we had banged together.  The mine-to-be was the Golden Bear, further up above the creek where the placer gold had originated and it was one of the first successful low-grade heap-leach operations in the world.  But Newmont or whoever hadn't been seriously looking for precious metals so neither did we.  And it was there I met the geophysics boffin who had found the huge lead- zinc deposit at Pine Point.  He was flying an EM survey for us and he had seen the numbers coming up as they flew over the thing and he put everything he could get his hands on into it on the share market and had made over a hundred thousand dollars.  After such an easy score he decided to snowball it into a million and put it all back and more into the share market.  By the time I met him he had nothing left.

At the end of my third summer up there I was finished with school for a time and of course I wanted a job in Vancouver with girls and a social life but there wasn't much employment around, and I found myself going FIFO for the winter with thousands of others to remote projects in the north.  The FO part of it didn't exist in those days and I spent 12 months mill operating in a brand -new copper mine.  It was quite well known; no-one else had yet attempted such an audacious project is so inhospitable a country.   The mill was situated between a couple glaciers a twenty mile bus ride up from the coast, the mine was another 10 kilometres away and accessed by an underground railway that went right through the mountain, underneath one or more glaciers.  It had been a very expensive proposition.  We were processing about 1500 tonnes per day of 1.5% copper on two grinding circuits and after a few months I was running the mill from a control room on my shift; earning $5 per hour plus one flight in and board and I knew the sound of every mill and pump and bearing and destination of every pipe and conveyor in the place which had cost 120 million dollars for the mill alone.  That would have to be over half a billion now; god knows how many died; me almost once or twice or what the whole shebang was worth and world copper demand was booming.    

So it was nothing like Tasmania.  Without the aforementioned de-risking and slow process of delineating reserves and expertly engineering the development it could never have happened.  If a government has some expertise or integrity they don't grant a mining lease, talk up some future financial disaster to squeeze money and indignation from the locals and let some dipshit in with little more than a Perth shopfront, a dog and a rented bulldozer.  Tasmania is so much older and worn down than the Canadian west.  Everything worthwhile has even bigger exposure and geochemical signatures and has been discovered a long time ago.
But yes I have (stupidly) put small amounts of money in mining investments here.  Western Metals was interesting; they wanted to reprocess the Hellyer Mine tailings which supposedly contains over a million ounces of gold..  But I had a job at a local engineering firm and we built the tanks and stairs for Intec, who were the brains behind the pilot plant that was going to make it all happen.  I was in there one day to install something and I noticed a row of pumps like nothing I had seen before - the workings were behind glass and they were beautiful peristaltic things like our own guts with rubber tubes that were compressed by moving rollers.  A light came on in that  instant - obviously they were using powerful reagents you wouldn't want touching the inside of a normal pump -they were cracking walnuts with a sledgehammer.  That meant the gold would stay in the tailings because it wasn't worth the cost of getting it out , just like millions of tonnes stays in the ocean where it will also stay forever.  A lot of people I know had money in it, but there is nothing you can say.

But up in northern Canada I just saved my pay and then I was gone but a lot of my workmates married a local or office girl and did things like buy a house or small supermarket on the coast like it was going to last forever or ten years according to the inventory of mineable ore.  Two years later the price of copper collapsed and the mine and mill were put on care and maintenance and everyone tried to get out.  But it was too late and many spent another three or four years up there with mortgages and milk bars or supermarkets or homes that couldn't be sold in a ghost town.  And then the price of copper went up again and it was all restarted but that didn't last and a year later it closed again and this time everything went for scrap.  And so it can all go wrong with the best of procedures and intentions: the only certainty is that nothing is certain and if you come in at the top of anything you are going to get burned; big time; Shree Minerals being a local case in point.  I wish I had bought one of those T-shirts.   Back in the sixties after the summer of love and its ugly aftermath you could get 'Free Manson' bumper stickers and T-shirts.  They would have to be worth a fortune now in the original packaging.


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