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50 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 4 & Improve WITH YOU EVERY STEP 38,000+ 40+ 160+ Mine Planning Mining & Mine Development Materials Handling Mineral Processing Tailings & Waste Management Hydrometallurgy Pyrometallurgy Environment & Approvals Transport to Market Non-Process Infrastructure Exploration & Evaluation Across the mining value chain. WorleyParsons adds value through our distinctive resources and energy approach. From studies to sustaining works, mining to market, we're with you every step of the way. www.worleyparsons.com/CSG/MineralsAndMetals from the start if the ore is amenable to cheap processing methods or not. A cautionary note on inexpensive heap leach operations that are supposed to process low-grade deposits - They can operate in cold climates; however, they are not recommended for wet climates where excessive rain can dilute the cya - nide solution to the point of having to stop processing ore for months in a row. If the mineral deposit is located some- where up on a hill which is dissected by deep valleys, it is likely that this type of setting not conducive to the preserva- tion of an oxidized cap for the deposit. Therefore, there is not enough material to be cheaply processed through heap leach- ing. Grades of the sulphide ore need to be higher in order to support a conven- tional crushing, grinding and flotation operation. The investor needs to study press releases and web sites to understand the type of ore that was discovered – oxidized or fresh sulphides. Metallurgical testwork has to be initiated as early as possible to help the company and potential investors understand the economic potential of the newly discovered mineralization. As commodities prices swing, there are cases when the junior miner changes the main commodity of interest to another one. Is this a good idea? The new mineral of interest also needs good metallurgy. An investor should pay attention to the geological description of the waste rock – the rock that is being drilled to get to the mineralization. The presence of sulphides in overburden would create conditions for the waste rock dump to perpetually gen - erate acid rock drainage (ARD); therefore, closure costs are higher – not to mention the environmental opposition and permit- ting difficulties. In conclusion, an investor should sell his position at the height of the enthusi- asm generated by the discovery and not wait for the mine to be permitted as that could be a long and thorny road. HISTORY While investors should look for projects in parts of the world that are being sub- jected to modern exploration methods for the first time, remember Fruta del Norte in Ecuador where Kinross walked away? Unfortunately, some parts of the world are subjected to high geopolitical risk. If you invest in risky countries, it's a good idea to exit early at the peak of the exploration or M&A enthusiasm. Projects with a long history of success - ful exploration but which were abandoned due to external causes (wars, law changes, lower metal prices) might also be inter- esting, but only if they make economic sense. Don't fall for companies that twin some high-grade historic holes to obtain high-grade results. These are usually not representative of the whole deposit. Wait for subsequent wide-spaced drill holes to tell if the deposit has upside potential or it is only a sub-economic project enjoying a few high-grade zones. There are many geological and mining factors to be evaluated by a savvy inves - tor, so learn as much as you can about this exciting sector. n