The ADIA CEO's report

Peter Hall, CEO of the Australian Drilling Industry Association, gives his thoughts on the upcoming trends he encountered during his visit to this year’s annual PDAC event in Canada.
The ADIA CEO's report The ADIA CEO's report The ADIA CEO's report The ADIA CEO's report The ADIA CEO's report

Peter Hall got a glimpse of the future of mining during his visit to PDAC

I recently had the opportunity of attending the Prospectors and Developers Association of Canada (PDAC) Convention which was held in Toronto in early March. It is by far the largest exploration focused convention of its type in the world, with around 1,000 exhibitors and more than 20,000 people attending over the four days duration. The exhibitors comprise a large selection of service and supply providers, a ‘core shack' which allows exploration companies to promote their leases to potential partners, and an investors exchange which allows dialogue with potential investors. There is also a comprehensive program of technical forums and investor presentations.

PDAC runs annually so it is always a great opportunity to gauge attendee sentiment and what the outlook is for the global exploration industry. With so much networking going on, it does not take long to get up to up to speed with what the forecast consensus is.

What we are seeing in Australia with a levelling off in exploration activity is also a recognised global trend. A lot of the global funding for the juniors is raised on the Canadian TSX, and the feedback from several Canadian drillers is that the situation in North America has tightened considerably. This is being caused by the trade frictions around the world and the concerns on world growth rates which have been heading south as a result.

Regardless of this, the drilling industry is getting on with things as usual and there were some outstanding exhibits to see and a wealth of information from the people hosting them.

A couple of notable things around the equipment on display were the continuing advancements in electronics and automation on drill rigs, as well as the proliferation of mobile underground rigs on offer.

While the ability to automate a drill rig is not new, having been around for more than 20 years now, what is clearly evident is how much the electrical components used have improved. The robustness and ability to withstand contamination was always the weak link, but the componentry now available has advanced a long way to addressing this, which is encouraging to see as automation and a ‘hands off' approach is clearly the way of the future.

I also believe that Australia can take the credit for being the first to introduce mobile rigs for underground use and some of the early designs would also date back 20 years or more.

A need to innovate to increase productivity and safety and to become more competitive were the drivers behind the introduction of these rigs. To witness this configuration of drill rig now being built and sold within the North and South American markets is testament to their suitability for the job.

The other noticeable trend on display was the large number of firms providing software and data tools

It is, however, the norm for these designs to cost upwards to US$1m, which can be double the price paid for a comparative skid mounted rig. Drilling contractors need to factor this into their tendering as the increased investment needs to see higher rates bid on the job. Some productivity gains are likely when moving from site to site and setting up. However, actual time to drill the hole is going to be similar. Maintenance costs are also going to be higher due to the simple fact that there is a mobile carrier that also requires regular servicing and periodic repairs.

The other noticeable trend on display was the large number of firms providing software and data tools of various descriptions and uses but all aimed at making exploration more precise and defined.

"Data Mining" is a new phrase being used to describe the type of prospecting done before placing an exploration team on the ground. The ability now to process previously gained information from a lease, obtain new data from geophysical testing and crunch this to better identify drill ready targets seems to be the way of the future.

As exploration targets get deeper, this will likely lead to more discoveries which is good for all, but will it lead to more or less drilling is anyone's guess at this point in time. If the global outlook improves later in the year, hopefully, we will see more investment return to the juniors and they can turn that into more holes in the ground.

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