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The future of gold mining

The future of gold mining

13 July 2020

Interview with Vladimir Mikhailovich Shvetsov, Vice President, Geology, Chaarat Gold, an English gold mining company.

Investing in gold can bring both solid income and significant losses. To get the maximum effect in the absence of unnecessary costs, you need to know the features of this area very well.

Gold is one of the most common precious metals that is mined by mining ore. Gold deposits are rare all over the world. Most of these deposits are already being developed, and the remaining are located in remote places. Since gold mining is a technically complex and laborious process, this fact provides the metal with rare status.

To delve further into this direction in more detail, we talked with Shvetsov Vladimir Mikhailovich, vice president of geology of the English gold mining company Chaarat Gold. Vladimir Mikhailovich has more than 40 years of experience in the gold mining industry abroad and he is among the top 3 Geologists of the Russian Federation.

Which problems do you think are most relevant for mining companies?

If we talk about problems for mining companies, then this topic can be divided into what can be called “conditions” and really called problems. The first includes quite natural situations – today, as a rule, the bulk of newly discovered fields are located at a considerable distance from the transport and energy infrastructure, which is quite natural and understandable. I wouldn`t call it a problem – here the solution lies in the plane of technology, economics and investment in infrastructure. That is, under some conditions, the “project flies” at 0.8 g / t, and somewhere it needs at least 2 g / t.

Another thing that creates real problems:

The first thing, in my opinion, is our unfriendly legislation and, basically, the practice of its application. Bureaucracy, procrastination of the licensing system and years-long decision-making procedures.

The second thing is unprofessional management of mining enterprises. In the Soviet period, the leaders at the mining enterprises were professionals who went all the way in practice, and today in most cases the leadership consists of “not at all technical specialists”, but with an MBA and knowledge of English. Therefore, the mines are simply crumbling for the sake of games with momentary EBITDA and KPI. And there are a lot of examples.

How do you consider the situation with training of personnel for the industry?

I don’t know what is the situation in “universities”, but the result is deplorable – we have to carefully look for competent specialists? enthusiasts of their craft as they say “day with fire.” Young people prefer warm urban, preferably metropolitan offices, the concepts of “romance, enthusiasm and thirst for discovery” are a thing of the past. Although it should be noted that, although with difficulty, and in conditions of fierce competition among large companies, it is possible to create teams. And these are, as a rule, young people “not from the capitals” and who, according to their desire, started “in the field” and know their work “with their hands”.

Vladimir Mikhailovich, how do you think, it is possible to improve production productivity at the field?

So improve or increase? The question of “improve” is probably not entirely applicable to performance. If we speak of “increase”, that is, “disperse” the “mountain and factory”? For each field with specific reserves and identified development potential, a project is being developed with optimal volumes with an optimal mining complex and optimal productivity of the entire production chain. 

And the game of management companies in maximizing productivity at existing capacities and without technical solutions or without taking into account the specifics of the field leads to the collapse of enterprises or at least to destabilization and a drop in profitability. And if we talk about a technically increase in production based on increased productivity, then it is go on the way of introducing new technologies with a positive economic effect.

Which regions do you think have great potential for development in the gold mining industry?

Do you want me to give out our secrets – where will we go with the development of the company? I will say this – starting from the western slope of the Urals and till Kamchatka including. But seriously, our northern and Far Eastern territories have huge potential in relation to gold and not only.

How do you assess the current gold mining industry position in Russia today? What are the prospects?

If you look at the latest discoveries in the two thousandth, the prospects are normal. Considering today’s gold prices, large-volume units with low contents, which are not few in the eastern part of the Russian Federation, are becoming very attractive. But in the Russian Federation there are practically no juniors who “go ahead” and take the risk of exploration; and large companies conduct work of course, but in their own limited volume, covering only their needs.

Vladimir Mikhailovich, how do you assess the relevance of investments in the gold mining industry?

Theoretically, this is very relevant from the point of view that gold is a reliable and very convenient product, but we must not forget that not all gold mining companies are “gold” and sometimes it’s better to invest in a clear business than to invest in risky projects which attract your attention with a beautiful way painted booklets about “klondike”.
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13 July 2020
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