SGS Minerals Services mounts West Coast expansion

VANCOUVER — It has not been the brightest 12 months for the Vancouver mining sector, but a piece of good news may have flown under the radar to start the year. In late February world-leading technical provider SGS Minerals Services held its grand opening for a 68,000 sq. ft multi-lab facility in Burnaby, which offers miners, developers and explorers unprecedented access to an integrated suite of services that cover the entire industry chain, from discovery, to production, to closure.

SGS boasts a long history in the mining business — with its renowned Lakefield facility providing metallurgical testing as far back as the Second World War — and according to vice-president of global geochemistry Russ Calow, the company identified Vancouver as a strategic expansion target in 2003. SGS established a variety of service centres around Vancouver.

Following a tour of SGS’ facility, global director of marketing Jean Richardson says that  “three years ago, we decided to consolidate all of our sites in the area, which resulted in this new facility . . . for us, that consolidation was an obvious way to go forward. It helps us work with our clients in an integrated manner.”

“We needed to up our capacity and footprint in Vancouver due to the large number of exploration company head offices there,” Calow adds. “It was a bit of a blind spot for us business-wise, and we realized that we needed to increase our presence further in [that market] to be credible and to take advantage of the opportunities we felt were there and have proven to be there.”

And Vancouver’s exploration sector — often cited as the world’s largest — is a major target for SGS. The company has a wealth of experience with mine development, as Calow explains there are not a lot of projects that SGS hasn’t touched in the past 40 years, but the company is aiming to expand its profile with exploration-stage companies that may work with geochemistry and metallurgy on a smaller scale.

“[Our history] acts as a bridge to bring the greater service offerings to other clients who may not have known about us as much, which is particularly true on the exploration side of things, because up until 2010 we did not have an exploration analytical facility on the West Coast,” Calow says. “The past two years have been spent introducing our exploration services to clients in the Vancouver area.”

It’s evident why explorers in the region will likely take another look at the company moving forward. The Vancouver laboratory offers a central hub for traditional exploration services like geochemistry and metallurgy, and hosts SGS’ proprietary mobile metal ion (MMI) technology.

By locating a MMI lab in Vancouver, SGS has dropped the sample logistic costs for exploration companies, while improving turnaround time.

MMI provides a weak extraction of the mobile form of ions residing in near-surface soils.

The technology has proven effective for identifying buried mineral deposits, and provides more accurate results by decreasing false anomalies and minimizing the “nugget effect.”

With numerous recent discoveries involving deposits that sit under significant cover with limited outcrop, a technology like MMI can help explorers nail down soil anomalies and drill more efficiently.

SGS’ multi-lab also seems to have an organic design that mirrors the evolution of a mining project. Taking a walking tour of the facility, from fire-assay rooms to water-treatment areas, it is easy to imagine a discovery moving from production to closure within a single building.

And according to Calow, that is part of SGS’ unique approach to minerals testing, which he explains as a “pit-to-port” concept where the company helps the industry in all stages of project development.

“As you’re walking through our Vancouver facility you’ll see that service chain manifested,” he points out. “We have our exploration analytical capabilities and the MMI technology being applied. You have production drilling and ore reserve drilling analyses being done. You have bench-scale metallurgical testing, and you’ve got the environmental testing, which spans both pre-production and production. Finally at the end of it we have the sampling and testing of concentrates that are being sold to market from the Vancouver port.”

SGS invested in excess of $10 million on its Vancouver consolidation, and with mining markets struggling at the moment, it seems like timing may be less than ideal. Calow says SGS has seen a 20% drop in the industry year-on-year, and the company has been adjusting its human resources downward since October.

But SGS built its Vancouver facility with the cyclical nature of the mining industry in mind. The multi-lab can be adjusted for capacity based on demand, and SGS could double its operations at the site relatively quickly assuming markets rebound and service demand picks up.

Fortunately, SGS is a diversified company that can fall back on its agriculture, oil and gas, and chemical divisions, as it waits for the mining business to rebound.

“I guess if we’d seen the continued increase in business we saw from 2010 through 2012, the increased capacity you saw during the tour would have been readily welcomed by the industry,” Calow concludes. “Given the slowdown we’re in right now, we’re guessing that increased capacity could remain idle for a while. But it creates serviceability in the Vancouver area, and there is no question we’re seeing the fruits of that labour paying off with improved penetration into the market.”