Greg Rankin, on behalf of Element79 Gold Corp., discusses how a changing landscape and lessons learned can help gold and other resource mining companies capitalize on the impending boom.
Attention buyer! Mergers and acquisitions (M&A) are expected to increase in the mining sector in the coming months. This will lead many companies to face a new paradigm within the industry. Even when these assets are in traditionally safe jurisdictions, a sea change in the way mines must now operate is already increasing the risks for companies that are unprepared for the new challenges.
“There are a lot of things that weren’t really an issue five years ago, but today they can make or break your project,” says Antonio Maragakis, COO of Element79 Gold Corp., a small company mining with a growing list of global assets. .
Maragakis has a long history in mining and energy. His resume includes executive and director positions overseeing multi-billion dollar project portfolios internationally at organizations such as Barrick Gold Corporation, Freeport-McMoRan Inc. and Koch Industries.
“Everyone has a mine site that could be the next big thing,” adds Maragakis. “However, I think there’s a lot more at stake now than having a good property from a technical point of view. There’s ESG, new technologies, lack of talent, logistics. Today oday there is a long list of non-technical aspects that are just as important as geology and metallurgy.
At the forefront of these changes is the way miners operate in terms of their relationship to the environment, societies and governance. While there is a long list of environmental disasters that the industry has experienced over the past decades and is striving to improve, another aspect of ESG is becoming a growing concern.
“I can’t stress the company enough. Seven or eight years ago it was important, but today it is absolutely essential,” says Maragakis.
For example, in 2013, the Canadian company Eldorado Gold Corp. undertook a project in Greece. It was meant to be a test of the country’s ability to attract foreign investment, which was badly needed to boost the Greek economy.
“They had all the permits, all the funding, everything was fine,” says Maragakis. “It was supposed to be a two-year build, and it’s still half-built today.”
If the authorized project did not meet government, society and business expectations, the project was placed in care and maintenance.
“The good news is that the company appears to have resolved outstanding issues and has the option to restart the project.”
Another recent example where the needs of the local community have not been properly taken into account is that of Peru at MMG Ltd’s Las Bambas copper mine. This project, which was already producing, was completely stopped at the end of 2021.
According to reports, local residents pushed back against the project and argued that the mine’s mineral wealth was simply bypassing them. They in turn protested in an attempt to get more jobs and money for the area. At this point, mining companies would be wise to heed the warning of the growing list of societal shutdowns and begin to take a more joint approach with communities and local governments.
“The litmus test should be that the local company is proud to work with the mine and is the biggest partner and promoter, rather than its disgruntled neighbour,” says Maragakis. “It means making concrete plans that meet both their immediate and future needs.”
Moreover, ESG is not just about avoiding environmental disasters or working more closely with local communities – both are paramount. Maragakis, Ph.D. in Sustainability, also believes that valuable mining could help matters by advancing the reduction of the industry’s environmental footprint.
“If you can use the right energy and control the water usage, the mining part is very sustainable,” he says. “You only take about 10g/t out of the ground and then you can put everything else back in.”
In fact, he says Element79 is one of a handful of companies currently exploring new technologies and methodologies that will put them at the forefront of sustainability.
With inflation at its highest level in 40 years, the price of gold having been historically depressed for more than a decade, and a number of mining operations now carrying record debt should bode well for the sector. mineral resources. However, failure to mitigate risk and adapt to the rapidly changing mining landscape will only lead to more projects being eaten up by these inevitable pitfalls.
Read the article online at: https://www.globalminingreview.com/special-reports/21012022/element79-gold-is-resource-mining-prepared-for-change/