Industrial metals derived by mining are used in a wide variety of construction and manufacturing capacities, so it should come as no surprise that the mining industry is a key component of a strong economy overall. However, the intrinsic role of mining in construction and manufacturing also means that when global equity markets struggle, mining struggles as well.
In recent years, the mining industry has been fraught with a number of growing challenges, all of which have only been aggravated by weak economic growth. The slump in oil prices, the strengthening of the US Dollar and the slowing Chinese economy are all factors that have contributed to a weakening of the market for precious metals since the fourth quarter of 2014. Making matters worse, the cost of exploration and the permitting and building of large and small-scale mines alike continues to rise. Today, it takes five years on average from the moment a project is started until the mine is operation, and the price tag for a single project can run upwards of billions of dollars before a single mineral is extracted.
This economic climate can prove challenging for even the largest mining companies, but for smaller-scale mining operations, it can be devastating. While these are all daunting issues to be sure, they’re also part of what makes the innovative and cost-effective strategy of Equitorial Exploration Corp. ($EXX:CA) so valuable – particularly to modestly-scaled mining operations.
Equitorial Exploration’s ingenious business model involves seeking out advanced-stage mineral deposits on which the company can employ their portable processing technologies. Equitorial then partners with the existing owners and operators of various mines to efficiently advance deposits to profitable production. This allows for an accelerated production profile and enhanced profit potential, while also minimizing the many uncertainties that are inherent in typical mining sector production – uncertainties that can quickly sideline the future of smaller mining operations.
How Does Equitorial Exploration Reduce Costs?
From the outset, Equitorial Exploration has employed a cost-effective strategy while building their capital. They’re further able to reduce expenses through factors such as:
- Accelerated Permitting
- Reduced Infrastructure
- Reduced Environmental Footprint
- A Shorter Permitting Period
- Reduced Operating Costs
- A Lower Cut-Off Grade
- Accelerated Cash Flow
- Increased ROI on Projects
- Improved Metrics
For investors, this allows for reduced investment risk and a maximum return. They are also key parameters for the design of Equitorial subsidiary First Nevada Mining Corp.’s portable mineral processing plants.
Efficient Mining and Environmental Consciousness
While the financial considerations facing the mining industry are substantial, they still only constitute one of a number of recent challenges. For many industry professionals in the 21st Century, the environmental impact of their company practices is an equally pertinent imperative. Growing concern over eco-conscious practices has even put long-standing industry practices like cyanide leaching under scrutiny.
In industrial mining, leaching refers to a process in which precious metals, copper, uranium and other compounds from ore are extracted through the use of a series of chemical reactions that absorb specific minerals, then re-separates them after their division from other earth minerals. Through cyanide leaching, the chemical is used to dissolve and separate gold from ore in the form of a very dilute sodium solution.
Though cyanide leaching is widely considered to be a far safer extraction method than liquid mercury, which was the previous primary method of removing gold from ore, cyanide is still toxic in large doses, and can be fatal to both humans and animals. Thus, it should come as no surprise that cyanide leaching carries with it a number of significant environmental concerns.
Fortunately, Equitorial Exploration has made environmentally-friendly mine processing a truly viable option for even the most modest mining operations. In fact, together with First Nevada Mining Corp., Equitorial has invested over $3.5 million to develop their environmentally-conscious proprietary technologies. In the western United States, where drought has been a severe issue for a number of years, First Nevada Mining has significantly reduced water use by recycling most of the water they use on a closed loop system – a measure that protects fragile ecosystems while also reducing costs for the company.
Equitorial Exploration’s processing plants incorporate advanced, multi-stage, enhanced gravity-based concentration technologies with an aim to drastically reduce the ore mass that reports to intensive downstream processing. By reducing mineral-bearing particles into a much smaller volume, the company is able to substantially increase throughput grades and savings in both overall energy and operational expenses that are of great value to environmentally conscious investors. Thus far, the companies have already completed the design, engineering prototype and testing phases of a number of these eco-friendly, cutting-edge products.
Business Model Efficiency Leads Equitorial to Dominate the Industry
While the cost-effective and environmentally-conscious technologies of Equitorial have them well-placed in the mining industry today, the company’s full potential will likely continue to be unveiled over the coming years due to a number of patents they hold. Rival players in the mining industry will find their efforts to succeed on a competitive scale hindered by Equitorial’s two pending patents for technologies and processes, their proprietary flocculation and coagulant formulas, and even a patent for their one-of-a-kind business model.
In the very near future, First Nevada Mining is even setting up a new and promising operation at an undisclosed location in Arizona. President and CEO of First Nevada Mining Duane A. Nelson says they expect to have the crushing circuit operational as early as this month.
Mining has long been a vital component of economies across the globe, and while many smaller mining operations will find achieving success in the industry more challenging than ever in the years to come, forward-thinking companies like Equitorial Exploration should be well-equipped for success. By capitalizing on a number of attractive opportunities, Equitorial Exploration and its investors can expect to achieve industry-leading returns both in the short-term and for many years to come.
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