The revival of an iconic Australian gold mining centre coinciding with the birth of an enterprise aiming to disrupt the world’s multi-billion-dollar gold assaying industry, was a story told in a low-key way at this year’s AusIMM International Mining Geology conference.
Damon Symons, Agnico Eagle Mines resource geologist at the Fosterville gold mine in Victoria, said at the event traditional screen fire assaying to measure gold concentrations in samples was arguably still the “gold standard assay technique on the market … [albeit] it is slow and expensive”.
However, he outlined the case made for transitioning at Fosterville to the PhotonAssay method, developed and commercialised in Australia, at the conference. The process took about five years – a period that saw new high-grade discoveries at Fosterville turn the mine owner into a US$764 million takeover target, in 2016, and then a $10.7 billion acquisition in 2021 when Agnico Eagle took out Canadian miner Kirkland Lake Gold.
Kirkland had other assets but Fosterville remained a jewel in its portfolio.
First mined back in 1894, Fosterville had a modern renaissance in the 1980s and then the 2000s but was thrust back on the world gold map by the rich Swan zone find in 2016.
Mine production ticked over four million ounces in March last year, most of that poured since 2017.
Circa-$34 billion gold miner Agnico Eagle has sights on production out to 2033 at Fosterville.
Swan’s quartz vein-hosted gold made a search for alternative site gold assaying more urgent, Symons said at the AusIMM conference in Perth, Western Australia.
“These high-grade orebody discoveries in 2015 and 2016 prompted concerns over the quality and accuracy of the fire assay technique at high grade,” he said.
“We knew from previous screen fire assay analysis that fire assays results weren’t correlating well with coarse gold at high grades.
“And our December 2016 reconciliation data also showed a 32% discrepancy between our mined model grade and mill actual, which also prompted concerns about our fire assay results at high grades.
“We knew the problem was potential bias of fire assays at high grades and that the root cause was our great VG [visible gold] discoveries.
“We wanted quality assays at high grades … that correlated well at all other grade ranges. We also needed comparable turnaround time.”
Chrysos Corporation was formed in 2016 to commercialise PhotonAssay technology.
Built on tech developed by Australia’s national science agency, CSIRO, in the early 2000s the PhotoAssay X-ray analyser only morphed into a prototype unit in 2016 and a commercial iteration a couple of years later. It used high-power X-rays to activate and measure gold atoms in mineral samples, with the energy level differentiating the tech from conventional X-ray fluorescence to enable “true bulk measurements of large samples”.
For coarse gold a 10-fold increase in sample size compared to standard fire-assay was seen as particularly advantageous.
“We considered several assay techniques but PhotonAssay was a clear standout with larger, more representative sample size and it did not require the use of chemicals,” Symons said.
“The PA method also had strong ESG considerations as it is non-destructive, given the samples aren’t destroyed, and it does not require waste disposal.”
Nonetheless the technology was new and the standard assaying method well and truly embedded at Fosterville and elsewhere.
New technology adoption in mining has always been measured. Today calls are growing for the industry to be a much faster adopter. Most small start-up firms will die waiting for a user to be first to be second and new tech is demonstrably making a difference in many areas.
Chrysos is one of a number of key test cases for an emergent investment class (mining tech).
“Early trials took place between 2017 and 2019 as Fosterville needed a large test dataset,” Symons said.
“This was followed by an inhouse QA/QC reviewed by SRK Consulting in March 2021.
“In November 2021 Fosterville conducted resource modelling of seven mineralisation areas using PA methods alongside existing fire assay and screen fire assay.
“The early trials did mean double assaying, both PA and fire assay, at double the cost, but the overall project was considered important enough.
“From 2020 to 2021 a further 45,000 samples were assayed using both methods and not only did this confirm the strong correlation between the two methods, but it also showed a fire assay bias above 250 grams.
“With promising results Fosterville conducted a change management process and risk assessment [early] in 2022 for the potential switch from fire assay to Photon.
“The risk assessment highlighted flaws in our onsite QA/QC review process for Photon, alongside a significant list of required changes for a successful transition. But by June 2022 and after completing all required risk assessments, Fosterville switched from fire assay to Photon.”
Symons said the change in Fosterville’s gold endowment in 2015 and 2016 – “a good problem to have” – was the real catalyst for a switch to “future-proofing technology” in the form of PhotonAssay.
“It’s important to identify the business case and problems to solve, and the root causes,” he said.
Corporate management had “a lot of concerns” about QA/QC around the introduction of non-traditional technology and how long it would take to introduce and adopt new site systems.
Ultimately, though, it was “important to adopt a business change and growth mindset … [and] think outside the box and challenge regular site practices”, Symons said.
PhotonAssay has been endorsed by some of the world’s largest gold miners, including Barrick Gold, and three of the largest suppliers of fire assay services.
Chrysos, which listed on the Australian Securities Exchange in 2022 and has a current market value of circa-A$650 million, expects to have 29 PhotonAssay units operating by the end of June this year and has 21 more to be delivered. It’s generating about A$45 million annual revenue and employs 150 people.
“Each year global miners are estimated to lose more than $2 billion worth of recoverable gold,” management said last month.
“PhotonAssay provides miners with access to real-time data, helping to improve decision making through the value chain [and] enabling the optimisation of processes to generate potential productivity gains.”
One of the country’s richest gold mines is a fan.
