Australian Mineral Fields embraces technology

For Australian Mineral Fields (AMF), traditional exploration takes too long; that’s why the company is embracing new technology so it can find that big deposit sooner.

The technology AMF is touting uses geological and geophysical data to create 2-D and 3-D maps to pinpoint the most likely location of orebodies. The company then integrates these maps with geochemical data to determine whether there is any evidence of large-scale hydrothermal mineral systems at the predicted locations.

The advanced geochemical techniques involve lithogeochemistry, which looks at all elements in a rock sample to define the parent rock composition and the alteration of the rock, and hyperspectral mapping, done with a Portable Infrared Mineral Analyzer (PIMA), which analyzes mineral crystallinity and composition through short-wave infrared radiation. These technologies work together to more accurately find significant mineralization.

Next, the exploration team evaluates the most promising mineral systems with further geological mapping and aircore drilling to locate an economic intersection within the mineral system. A 3-D Common Earth model of the target can be developed for more complex or deeper targets. The model, made using 3-D and 4-D modelling techniques, is used to integrate all geological information into one 3-D diagram.

All of this increases the likelihood that the largest deposits are discovered first and the company is not distracted by smaller deposits.

AMF is using these techniques at projects in Australia, as well as in assessing a Carlin-type gold deposit in Nevada.

AMF director Greg Hall, a former chief geologist for Placer Dome, (now Barrick Gold [ABX-T, ABX-N]), has more than 30 years’ exploration experience and says it’s time to put more faith in the geophysics and geochemistry technology he first used at Placer Dome.

“In ten years’ time everyone will use this approach,” Hall says.

AMF is a private company based in West Perth, Australia, with an office in Vancouver. An initial public offering on the TSX Venture Exchange is planned for later this year. The company is currently trying to raise $5 million at 50 per share to bring the company’s market capitalization to $13 million. AMF already has two joint ventures with Barrick and two more with another major mining company.

Five of six people on the management team worked for Placer Dome. Chair and CEO of the company, Graham Taylor, heads Vancouver-based Magnus International Resources (MGNU-O), which has gold projects in China and Uganda.

Hall says that the technology has not become widespread because there are few geochemists in the mining industry.

“You go looking for a primary rock geochemist in any mining company and you’d be hard pressed to find one,” Hall says.

Secret weapon

AMF’s secret weapon is Scott Halley, the company’s embedded geochemical consultant who worked on developing new exploration techniques as a consultant for Placer Dome. The technology AMF uses is commercially available, but as Hall says, “the intellectual property is in Scott’s head.”

Because of the lack of geochemists in the industry, the uptake of the technology is limited, as few people can train exploration crews to use the data. Hall believes that once the exploration industry realizes that they can use geochemical data the way geophysical data is already used, there will be greater interest.

As mining companies look deeper and deeper for major ore deposits, there is awareness that new exploration methods are needed. A study by an Australian consulting group and Placer Dome that looked at 158 Placer Dome projects over a 15-year period found that only one in six made it to the drill test phase. The study, published in the Society of Economic Geologists newsletter in 2001, sparked an interest in developing new techniques that would allow for more effective filtering of early phase projects.

In 2002, Placer took over Aurion Gold, where Halley was working at the time, and from there, began to work on accelerating Aurion’s technology that distinguished large gold deposits from small without having to drill the deposit out.

Hall was involved in the discovery of the Granny Smith gold deposit in Western Australia, now operated by Barrick, which produced 371,000 oz. gold in 2005. He cringes at the 15 years and US$11.5 million spent on early stage exploration. He believes that with the right technology, the deposit could have been discovered much earlier and at a lower cost.

“I held onto the ground because I had this feeling something was there, but ultimately, I was frightened I’d walk away from something,” Hall says.

But Hall has seen firsthand that the technology works — lithogeochemistry applications were used around existing Placer Dome deposits, but it was never trusted for primary exploration.

“The mining industry is pretty conservative,” Hall says. “Embracing technology isn’t as simple as ‘I’ve got a good idea and this is why it works.'”

Hall also believes mining companies are reluctant to trust the technology out of a fear of missing out on something big.

The technology itself is well established, and although its application in mining is not, the company is already building faith in its method through ongoing studies and presentations.

“We can’t wait for people to catch up,” Hall says.

AMF’s focus is Western Australia. The company can earn up to 100% on the Mount Thirsty gold project — a joint venture with Barrick. Mount Thirsty is a high-grade vein target in which the first drill hole intersected 1 metre grading 5.41 grams gold at 28 metres depth. AMF can earn up to 80% on its second Barrick joint venture for the Gregory project, which has a 15-km coherent geochemical anomaly in an established 10 million-oz. geological trend. Gregory is near Newmont Mining’s (NMC-T, NEM-N) Jundee camp, which has produced more than 2 million oz. gold and is estimated to have 1.5 million oz. gold in proven and probable reserves.

The company also has a strategic alliance for two other properties in Albany-Fraser province with a major mining company whose name will not be released until the agreement is finalized.

Fraser North Range is near AngloGold Ashanti (AU-N) and Independence Group’s (IGO-A) Tropicana deposit. Tropicana is estimated to contain 3 million oz. gold grading 3 grams gold per tonne. Fraser Range North is along strike and adjacent to Tropicana’s Beachcomber 1 zone, where drilling has intersected 4 metres grading 43.5 grams gold per tonne. AMF is also exploring the Salmon Gums property, where BHP Billiton (BHP-N, BLT-L) data indicated gold-in-soil and hydrogeochemical anomalies, as well as uranium potential.