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TABLE OF CONTENTS Feb 18 - 24, 2013 Volume 99 Number 1 - 0 comments

Deeper insights into economic geology

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By: Anthony Vaccaro
2013-02-13

Ever get that lost feeling when geologists start talking about the rocks at your favourite mining project?

You are not alone. A host of industry insiders — from brokers and office staff at mining companies, to investors and even young geologists — may also get that sinking feeling whenever economic geology comes up.

Emeritus professor at the Centre for Exploration Targeting at the University of Western Australia and mining industry veteran David Groves feels your pain, and wants to help. To this end, he has teamed up with Market Motion Media and the Mineral Deposit Research Unit at the University of British Columbia to present a course called “The Geological Framework for the Business of Exploration and Mining” on March 1 and 2 in Toronto, just before the Prospectors and Developers Association of Canada convention. 

“I taught for thirty years at the University of Western Australia, and today there is far less practical training than there was, and there’s less geologic training within the companies themselves,” he says. “Companies used to take on a new recruit, and for years would train them and send them to locations around the world. All that seems to have disappeared.”

Groves — who advises Canaco Resources (CAN-V), Tigray Resources (TIG-V), Castle Peak Mining (CAP-V), Lago Dourado Minerals (LDM-V) and Ultra Lithium (ULI-V) about geological models and regional exploration — will delve into how investors can use geology to make better investment decisions.

The key, he says, is to grasp geology’s foundational ideas and learn how they apply to modern discoveries. And one of the best ways to get that understanding is to look at geology as a hierarchical process.

The process can be pictured as a pyramid, with a global-scale geological perspective forming the base. Next, an investor must consider the province-scale geology, followed by a district-scale perspective. After a project passes through all these screens, specific project issues can be addressed.

Speaking over the phone from Australia, Groves talked to The Northern Miner in greater depth about his ideas.

The Northern Miner: Can you define what economic geology means to you? 

David Groves: Economic geology is about understanding the evolution of mineral deposits. From an academic point of view, you are trying to understand how mineral deposits formed. From an exploration point of view, you are trying to select the critical components of a model and see how it plays out in an exploration sense.

TNM: What is the state of the industry today, in terms of its understanding of economic geology? 

DG: Within the industry, apart from professional geologists, there is generally a poor understanding of economic geology, which surprises me. A lot of support staff at mining companies and most investors and brokers have a very little sense of economic geology.

Brokers and investors certainly understand the company side. They generally will look at a board or a management team and invest based on their track record, but if you understand economic geology, you can really understand if the company is in prospective terrain or not.

You can start to understand if the project is in a country that has a record of the potential for ore deposits, and whether or not you are in a province with the right rock age and the right geochemistry to host a deposit. Often you see companies working in areas with the wrong type of rock. They are looking for gold in rocks with the wrong age, the wrong tectonic setting, or they are in the wrong part of a fault structure.

Understanding geology allows you to discriminate those companies with good geology, and the ones with the chance of making a significant discovery.

TNM: On the global level of the hierarchal pyramid, where do you see the best opportunities for new gold discoveries?

DG: It varies. I think it’s more common for companies to go back to a familiar place that is mature and has been explored, so the chance for a new discovery is low.

The best opportunity is to go to ground that is immature, in countries that are less developed and have the right geology.

TNM: What are some features that distinguish between the right and wrong geology?

DG: Just as there have been climatic cycles over the earth’s history, in the same way we have tectonic cycles — cycles of around 500 million years where the earth goes from a supercontinent to a dispersion of continents, and in certain time periods you get mineralization. If your rock is not in that time slot, your ground will likely not have mineralization.

If you are looking for gold, there’s a period called ‘the boring billion,’ which is from 700 million to 1.8 billion years ago, when there was virtually no gold. So, if you’re searching for lode gold in that age range, your chances of finding it are low.

The ‘golden times’ for gold are 500 million, 1.8 billion, 2 billion and 2.7 billion years ago, and then a whole series of time periods from 50 million to 500 million years ago. The gold-causing events become more common as we go forward.

But if you are looking for other metals you would look at different time slots, so the boring billion for gold is actually the golden age for lead and zinc, with most events occurring in the 1.5-billion to 1.6-billion range.

TNM: Can you describe how this theory factored into Canaco’s Handeni discovery?

DG: Tanzania is a relatively immature country in terms of mine development, so the geology was poorly known. It was only when one of my students dated the rocks through sophisticated rock analysis that we realized the real age of the rocks at Handeni.

Previously, those rocks were thought to be 600 million to 650 million years old, which isn’t a good period for gold deposits.  But as it turned out the rocks are actually 2.7 billion years old, which is the sweet spot for discoveries. It’s just that those older rocks were in terrain with a lot of 600-million-year-old rocks.

TNM: Based on that thesis, where could the next big finds be?

DG: Africa is somewhere that is important. Liberia was just voted the best exploration destination at the Mines and Money convention in London, because it has greenstone belts that are similar to those in Canada and Australia. They have rocks that are two ages: 1.9 to 2 billion years old and 2.7 billion years old. All of the Canadian Archean from Yellowknife to Timmins are about that age, and we see the same thing in Australia, the same thing in Tanzania and the same thing in Brazil.

TNM: What does the rock age in North America tell us about the formation of gold deposits here?

DG: The age is telling you something about the tectonic process at the time, so when greenstone belts were forming there was a whole lot of terrain that was accreting. You can see this process with the belts down along the west coast of North America as well. They are forming like modern greenstone belts, and the reason it is so prospective is because it’s the same sort of rock types that were seen in the golden ages.

Now it is also different in many ways, but it is a similar tectonic process. The Motherlode in southern California was also formed by a similar process. And even today, underneath the San Andreas Fault, there are probably gold deposits forming. But they won’t be exposed for another 30 million years.

Every time the plates move they are pumping water through the fault zones, and they are carrying gold and depositing it at depth. It’s a similar process to what happened in the Timmins area.

TNM: You have said in the past that making a decision on the provincial level of the hierarchical pyramid is important in finding a deposit. Can you expand on that?

DG: The premise of this is that if a company is not in the right province, with a certain age and tectonic setting, they likely won’t be successful.

The opportunity in exploration is to find a province that hasn’t been over-explored, but has the characteristics of provinces that have been explored.

So to find another Abitibi or Ghanaian belt, the real secret is that the people involved in exploration need to have a broad understanding of geology. They have to think on a global scale and have global information.

Take press releases, for example. If I’m looking at two identical drill results, I would go back and look at the province that the two companies are in, and if one has the right geology, I would think the results are significant, whereas if the other didn’t, I’d be more inclined to think it’s an anomaly, and that the results won’t be sustained.

TNM: How do you define a geological province?

DG: The Abitibi belt would be on a province scale. Generally speaking, I think of ‘province-scale’ as being in the thousands of square kilometres: a tectonic unit. The California Motherlode, The Carlin Trend in Nevada, well that is halfway between province and district. They call it a ‘district,’ but it is a distinctive geological setting.

So generally speaking, provinces are in the thousands of square kilometres, districts are in the hundreds of square kilometres, camps are in the tens of square kilometres and deposits usually occupy less than a square kilometre.

TNM: What if there aren’t any big discoveries left to be found?

DG: I think there are big finds to be found.

There are two ways to look at things: there is a lot of poorly known terrain in the world still. A place like Mauritania wasn’t on anybody’s radar, and neither was Liberia. They both popped up over the last few years because the geology was poorly known previously, and then exploration determined they had the right age of rocks. I also think that a lot of what Americans call ‘The Stans’ are extremely prospective.

Then there are the opportunities that Canadian companies have been finding recently. Where they had always been looking for high grade in the Abitibi — because Canadians didn’t traditionally think in terms of open pit the way we Australians do, with our flat terrain and soft rock at surface — now Canadians are discovering large deposits of 1-gram material. Those mineralized bodies have been known for many years, but they hadn’t been thought of in the correct way economically.

So another alternative is not finding new deposits, but just understanding that you can mine something you know about in a different way.

— Register for “Geological Framework for the Business of Exploration and Mining,” a short course taught by David Groves, at: www.ubc.ca.



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Photos

An aerial view of Canaco Resources' Handeni gold project in northeastern Tanzania. Source: Canaco Resources
An aerial view of Canaco Resources' Handeni gold projec...
Geologist David Groves.
Geologist David Groves.


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