When raising money for mining, size matters. The bigger a mineral deposit is, the easier it is to raise funds to extract it or to attract a suitor to buy the strike. So in this beauty contest, exploration companies try to enlarge their deposits as much as they can by using consultants who can find additional minerals in the ground at the potential mine sites.
That is just one of the many services provided by Fladgate Exploration Consulting Corp. Founded by a core group of three – Michael Thompson, Neil Pettigrew and Caitlin Jeffs, who met while at Placer Dome, which was taken over by Barrick and Goldcorp in 2006 – the company now numbers 34 full-time employees. When contract specialists in technical services are included, the total number of employees can swell to 50.
In a sense, the core samples taken by Fladgate’s employees and contractors at a potential mine site provide the “dots” of mineral deposits that sophisticated computer programs use to connect into a 3-D map of where the mineral deposits may lie. The more core samples that are taken, the more accurate the model. Some strikes undergo 100,000 meters or more of drilling.
“If you only drilled a couple holes, we can look at the rocks and tell whether you are in the right environment, or should you be over there and continue exploration, or should you pull out?” Vice President Neil Pettigrew declares. “We can do that based on a few holes, but whether or not you’re going to mine, that’s not in the cards – that requires significantly more drilling.”
Fladgate Exploration Consulting Corp. does its best to provide the hard data needed to reduce the risk in making a decision whether to spend millions or even billions extracting a mineral deposit. “You try your very best to quantify this risk so you don’t have any unpleasant surprises when you go underground.”
A huge amount of research has gone into understanding and modeling the types of deposits in which gold or other minerals like copper can occur, and these models will provide guidance on how to explore for different deposits.
“We can’t use those models to say how much gold is in a deposit – for that we need to drill,” General Manager Caitlin Jeffs says. “Every deposit is unique.”
That is why Fladgate’s expertise is so valuable. Fladgate can help with technical services; land management, including First Nations consultation and relations; exploration services; geomatics-database management; resource estimations and 3-D modeling; project evaluation and generation; and corporate management.
The company was founded because of a gap in offering those services in Thunder Bay, Ontario, that President Michael Thompson perceived. Thunder Bay is filled with new junior exploration companies that are finding mineral deposits throughout Canada and the world. In the past, juniors did not advance their strikes to the same level by doing extensive drilling, 3D modeling and resource estimations – the major mining companies that might buy or joint venture on extracting the mineral would do that. Now, some junior companies have up to 12 rigs drilling for core samples to demonstrate the size of their deposit before a major comes knocking.
“That’s where we saw the niche,” Thompson remarks. “The juniors have never been required to provide this level or expertise before, and we have built this company to fill that niche.” Fladgate invested much time in assembling a strong resource estimating team that understands how to deal with historic data in an area that has been explored heavily. “There are a lot of old historical camps that need to be looked at in light of $1,400-ounce gold, and we’ve put together a team that is very experienced and knowledgeable,” Jeffs says.
She stresses that Fladgate provides a one-stop shop for mining services from the bush to the boardroom. “When you have to bring in a variety of consultants, you lose a lot of information in their heads,” Jeffs says. “There is a certain amount in people’s gut instincts handling the rocks and databases. We provide continuity from beginning to end.”
Pettigrew provides a recent example of how Fladgate’s services helped a new mining company. In spring 2008, Kevin Keough approached Pettigrew about his exploration company named PC Gold. Keough was the only employee and needed a team to work on the old Pickle Crow mine, which had provided 1.5 million ounces of gold from its opening during the Great Depression in 1935 until it was closed in 1966 because the cost of extraction was exceeding the price of gold, then $35 a ounce.
Fladgate assembled a technical team for PC Gold. Pettigrew himself became the vice president of exploration for PC Gold in addition to his position with Fladgate. “We’ve handled all aspects of what they do down to managing closure plans to resource calculations,” Pettigrew declares.
He sees continued growth in Fladgate’s future. “We are starting to target some of the international business,” he reports, adding that the company now employs four native Spanish speakers and a diverse group of other nationalities, including those from Poland, the United Kingdom and South Africa. “So we’re looking at Latin America a lot and we’re drawing from a worldwide business,” Pettigrew says.
Thompson thinks the commodities market is in a supercycle being driven by industries and consumers in developing countries. “I anticipate the commodity boom will continue for years to come,” he predicts. “It will have its ups and down, but we are in a long-term bull market for commodities growth.”
He cites growth in China, India, Brazil and Southeast Asia as fueling demand. “We are coming into billions of people that need minerals, and I see only good things coming from northwest Ontario – creating jobs worldwide in the resource industry,” Thompson forecasts. “We’re going to take advantage of that.” EMI