Surveys, Drilling & Innovation: How Mining Companies Explore Assets

The mining world is filled with specialist terms — many are covered in ‘How to Assess a Junior Resource Asset’ — but this latest piece is not about assessing results, but understanding how companies get to the results that they do.

In particular, it highlights the vast array of exploration techniques out there, including modern methods that are starting to be used to make new discoveries all over the world, including at old brownfield sites.

Let's say your junior has just acquired an asset. How can they find out what it actually has?

Let’s dive in.

To get you started

Geological mapping is where almost all exploration programs start. This includes field mapping, where explorers record geological features like alteration zones and rock types, and structural mapping including Identifying and interpreting faults, folds, and other structural features that can create mineralisation. There’s also petrographic analysis where surface (and later subsurface) samples are examined under the microscope to identify mineralogy.

Once you’ve gone through historical data (if any) available for the project, it’s time for remote sensing and satellite imagery — high resolution aerial photography, multispectral and hyperspectral imaging are common enough — though LiDAR (Light Detection and Ranging) is becoming more widespread. This technique involves using laser pulses to create high-resolution topographic maps, which helps to identify structural features which may be covered by vegetation or other physical barriers.

Then there’s the surveys.

Geophysical Surveys 

Geophysical surveys detect the physical properties of rocks and minerals beneath the earth's surface. Where investors get confused is that geophysics is an umbrella term for different survey types — a good way of thinking about it is imagining geophysics is red wine, and the various surveys it entails are akin to a Barolo, Malbec or Syrah.

• Magnetic Surveys — measure variations in the Earth's magnetic field caused by the presence of magnetic minerals. Used to detect ore bodies containing magnetite or other magnetic minerals.
• Gravity Surveys — measure variations in the Earth's gravitational field caused by density differences in the subsurface. Useful for identifying ore bodies with significant density contrasts, such as massive sulphide deposits.
• Seismic Surveys — use the reflection or refraction of seismic waves to image subsurface structures. Useful in mapping geological formations and faults.
• Electromagnetic Surveys — measure the ground’s response to electromagnetic fields, identifying conductive minerals like sulphides.
• Resistivity and Induced Polarisation Surveys — measure the ground’s electrical resistance and the ability of rocks to temporarily hold an electrical charge. Useful for detecting disseminated sulphide minerals.

Geochemical Surveys

The white wine of exploration, geochemical surveys involve analysing the chemical composition of soils, rocks, and water to detect anomalies indicating the presence of mineral deposits. Techniques include:

• Soil Sampling — collecting and analysing soil samples to identify geochemical anomalies.
• Stream Sediment Sampling — analysing sediments from streams to trace mineralized areas upstream.
• Rock Chip Sampling — collecting rock samples from outcrops and analysing them for trace elements and mineral content.
• Biogeochemical Sampling — analysing plants or microbial activity to detect underlying mineralization.
• Gas Geochemistry — analysing rare gases like radon or mercury emitted from the ground to identify mineral deposits. 

Innovations in geochemical techniques continue to evolve, and recent tech advances include:

• Portable XRF — handheld devices that provide rapid geochemical analysis in the field.
• Laser Ablation Inductively Coupled Plasma Mass Spectrometry — high-precision technique for analysing trace elements in minerals.
• Pathfinder Element Analysis — identifying elements that are geochemically associated with the target mineral, even if the primary mineral is not directly detectable.

You also need to consider the distant cousins of both geophysical and geochemical surveys: geotechnical and hydrogeological surveys. Geotechnical surveys involve assessing the physical properties of rocks and soils — including core logging (analysis of drill core samples to determine rock type and fracture density, rather than grade) — and rock mechanics testing, where the lab tests rock samples to determine their mechanical properties, such as compressive strength and elasticity.

Hydrogeological surveys involve assessing groundwater conditions, which are crucial for mine planning, and especially getting environmental permissions. Generally these surveys centre on testing aquifers vias pumping to get an idea of their hydraulic properties, alongside sampling and analysing groundwater chemistry to detect geochemical anomalies and potential contamination.

From experience, companies do not always publish the results of geophysical and geochemical surveys — often because they are done to check there is nothing too complex about a deposit. No news is good news with these two, but if you are considering an investment and are unsure, most companies are happy to provide this information (as long as they’re not in an active negotiation or similar).

Drilling

Now we come to the champagne! I’ll stop with the alcoholic analogies now — but the reality stands that at some point you need to cease surface level exploration, and instead start getting core samples out of the ground for assaying. Remember that for all drilling, location, depth, rock type and accessibility can all hugely impact both costs and the method chosen. Deep drilling into harder rocks in some godforsaken jungle and perched atop a cliff is very different to a golf-course-like plain.

One of the big things to understand is that you get what you pay for. High quality core samples from a diamond drilling campaign are generally the gold standard, but for one diamond drilled hole you might get a handful of reverse circulation holes, or many more auger drilling holes. It’s also about depth; the more you pay, the deeper you can go.

This means there is always a trade-off between cost and accuracy/depth. Reverse Circulation drilling, in my view, tends to bring the largest benefits compared to the potential costs, but at some point, diamond drilling is usually needed at most hard rock deposits to establish economic viability and resource size with any certainty. That’s not to say that auger drilling is a bad idea initially if the deposit is suitable, because even with a limited depth, you get a huge amount of data compared to the expense.

The point is that investors tend to consider diamond drilling as the ‘best’ method — generally it is, but it’s often better to start with other methods before committing the capital.

Auger Drilling — using rotating helical screw blades to bring soil and rock to the surface. Primarily used for very shallow exploration. Very cheap and easy to set-up, but not suitable for hard rock operations, and only goes to circa 30 metres.

Percussion Drilling — involves repeated hammering action to break rock, with the debris flushed out by air or water. Can be used for various depths and rock types, is perhaps a bit slow, but cheaper than reverse circulation and much cheaper than diamond drilling, however less precise and can produce mixed samples. Suitable up to circa 200 metres and fairly simple to use.

Reverse Circulation Drilling — now it gets a bit more complex, as this involves a dual drill pipe. Compressed air drives a hammer which breaks the rock. Water or air is pumped down the outer pipe, and cuttings come back to the surface through the inner pipe. This creates a continuous flow of high quality and relatively uncontaminated material as it is brought to the surface very quickly. 

Further, you can go down to circa 500 metres with RC drilling and it’s comparatively fast meaning you can drill and sample fairly rapidly. The downside is the cost; while still much cheaper than diamond drilling, it’s much more expensive than either auger or percussion drills.  

Diamond Drilling — uses a diamond-tipped drill bit to extract cylindrical core samples usually from hard rock types. Provides detailed, intact and extremely high quality core samples, which are essential for geological and mineralogical studies. You can drill to circa 3,000 metres dependent on exact equipment being used, and as long as you can get whole cores out. However, typically fairly expensive and slow.

Rotary Drilling — more common in oil and gas exploration, but sometimes useful when exploring for metals. Uses a rotating drill bit to cut through rock. Drilling fluid is circulated down the drill pipe and back up the borehole to cool the bit and bring cuttings to the surface. In exceptional cases you can go as deep as 12,000 metres and allows for continuous drilling, but expensive and complex. You only want to employ rotary drilling where there are no alternatives, or you are fairly confident of success, because the expense is prohibitive.

Mineral Resource Estimation

Mineral Resource Estimation — assuming you get sufficient data, there’s some complex maths to calculate to figure out what you actually have:

3D Modelling — creating computerised 3D models of the deposit using specialised software to visualise the geometry and distribution of the orebody. You can also apply predictive software to your model (which includes all known deposit data) to predict where the asset or further assets may extend or exist. 

Many companies now use collaborative platforms and cloud-based technologies to share data and insights in real-time, facilitating more efficient and coordinated exploration efforts. This only really happens where there is a benefit for all involved but is becoming more popular as it saves money. And money finds a way.

Geostatistics — applying statistical methods to estimate the quantity and quality of the mineral resource. Beyond my pay grade, but hugely time consuming. Importantly, this includes setting a cut-off grade, where a data scientist will determine the lowest grade of ore that is economically viable to mine. This can change as mining technology improves, commodity pricing rises, or even as a company generates the cash to build further modules.

The bottom line

You now know the most common exploration methods employed by junior resource companies. As a final note, it's fairly common for investors to get frustrated by how long it takes to go from surface exploration to drilling.

But money and time spent refining drill targets is in hindsight almost always well spent.