Return On Investment of XRF for Mining - Cost Benefit Analysis: A

Interview conducted by Alessandro PiroliniApr 22 2015

Could you provide a brief introduction to how XRF is used within the mining industry?

XRF is used extensively within the mining exploration industry in a variety of ways. Within exploration, it's mainly used for in situ testing on soils, drill core, rock chips, and so on. Within the mining area, it's used on grade control and in-pit analysis, and we're doing a lot of work now in the process area on geo-metallurgy and more metallurgical processes like, for example, looking at copper concentrates or copper cathodes, or concentrate analysis.

We're also doing work with some gold companies on gold assay. Traditionally, they use fire assay, which is very expensive, and it's not quite as accurate as they would like. So, it's actually saving a lot of downtime within fire assay labs now. Laboratories are also using our gear for a pre-check for their clients. So, as the samples come in and get pulped up, they're giving their clients a quick pre-screen. So, it is used in laboratories within the mining sector as well.

Could you explain the basic principles of how handheld XRF analysis works?

XRF analysis is a very old technology. What we do is we fire an x-ray beam into a sample to create instability within the atoms, electrons, and protons. When the electrons change their shell they fluoresce and fire off an energy.

Each element has a unique energy that we pick up. That energy is the fluorescence.  We collect energy versus counts per second to quantify the numbers. Basically, it's chemistry via physics.

What are the associated setup costs for handheld XRF analysis if it was to be used in mining applications?

We have a variety of types of equipment. Our least expensive piece of equipment is about $30,000 U.S. As you go up the scale, for a faster, more high-performing unit, you're looking at about $35-40,000 U.S.

It depends on the model. With the $30,000 unit, you could get away with doing grade control for more concentrated material, and explorers generally go for the more expensive models because we're able to get our lithogeochemical elements, magnesium, aluminium and silica at lower limits of detection at faster speeds.

Using an Olympus XRF Analyzer, what are the associated assay cost reductions a mining company can expect to make?

If we say a mining company has a 10,000-meter drill program on, which isn't a huge drill program by any means. If you say it costs $50 per assay at the lab, which is sort of a general roundabout figure, and most companies are assaying every meter, their total cost for that drill program will be about half a million dollars. Not all the material that comes out of the ground is good. Geologists in the field can't normally see the metals contained in the samples. They use the XRF to see if they're in a mineralized zone.

So, if we say that 50% of the material that's pulled out of the ground is waste, we can reduce their assay costs by half. Potentially, in a 10,000-meter drill program, this would save them $250,000 or even more. Half of the material being waste is a very conservative number. Obviously, we don't have the figures on what's waste and what's not, but most companies are assaying everything, thereby wasting money.

Return On Investment of XRF for Mining - Cost Benefit Analysis

The Powerful Handheld XRF that Can Be Taken Anywhere

Immediate Identification of Mineralized Trends and Anomalies

Increasing Sample Density in the Most Prospective Areas

How has the price of XRF analysis changed since its development?

It's my eighth year in the business. When I first started, these analyzers were in the order of $70-75,000 each. Now our top model is $40,000. So, there's been a $30,000 reduction in eight years. That's mainly because all these parts in the electronics are more readily available now, and they've been able to reduce the prices of the boards and everything else. So, that's a pretty big reduction over eight years.

With where we are now for the top-of-the-line instruments, I don't think we'll see much reduction in price. I think this is where the market has come to rest. Obviously, Olympus is comfortable at this number, so I think that $40,000 is probably going to be around the price it will stay for a while. Obviously, if there's a jump in technology, the price will come down. That change is yet to be seen.

Are costs for XRF analyzers lower than for alternative techniques?

Well, as I mentioned before with the laboratory analysis, the XRF data is potentially the cheapest data you can get. If you multiply the number of samples you get per day by the 33 or so elements, you can do the math for how far down you can get your assay cost reductions. As I mentioned before, metallurgy or geochemistry laboratories are in the order of $50 U.S. for each sample so it is cheap, and can be cheaper depending on how you use it.

Do handheld XRF devices require extensive training to be used? Are there any specific health and safety precautions or equipment that are associated with their use?

Generally, training takes a day. It is x-ray fluorescence so it does emit radiation. So, there are health and safety aspects but a lot of it is common sense. Generally, training will consist of a full day, the first part of which is radiation safety, and then we do instrument use, which is pressing the buttons. Then we go into more methodological use of the instrument because x-rays are limited by the small spot that it takes, and it's only surface technology.

So, even though anyone can use them, how they're applied in a mining or exploration field is very important. We spend most of the day covering that: how it should be used instead of just how to press the buttons. Pressing the buttons is one thing but it's like driving a car. You can teach people how to drive a car, but only a few of us are racing car drivers.

The health and safety part of it: every country and every state in every country has different requirements. They are restricted somewhat in some areas. For example, in Canada, you've got to do other exams before you use radiation devices, but if you sat through training, it's basically common sense because it does emit x-rays, and you've got to be careful.

So, how do you believe the field of handheld XRF analysis will develop in the future? You touched on not expecting the cost to dramatically change any time soon, but how do you believe the field itself will develop?

What we're seeing is the connectivity side of things because you are getting lots of data very quickly, and we are working with people within this field, to basically stream the data from the analyzer to a system that does some analytic work. It's more the downstream things that we're seeing going on.

In the last couple of years, we have seen another change in the electronics, so these analyzers are three times faster than they were two years ago. If you had a Delta analyzer three years ago, and you have the Delta analyzer, from the outside you wouldn't be able to tell the difference but if you put it on the sample, you'd see the acquisition of data a lot faster.

So, they are faster. I would assume in the future they will get faster again. As electronics get faster and smaller, I'd say that's going to happen. As far as price, as I mentioned, I think Olympus as a manufacturer is pretty comfortable where it is now. I think that's probably where it's going to stay for the top-of-the-line piece of equipment.

We have made an entry-level product, which is a lot cheaper, but this entry-level product doesn't suit the needs for mining exploration companies. It's more for scrap dealers and metals testing people. So, we've got a less expensive unit but I would never sell one of them to a mining exploration company because it doesn't suit their needs.

How do you believe Olympus, as a manufacturer, would be specifically involved in any progress within the sector?

We're the market leader in downstream connectivity to other sectors because we are the only manufacturer who has a mining team. There are four of us. One of my colleagues, Aaron Baensch, is heavily involved in the downstream automation of this.

We are one of the sponsors of the DET CRC, the Deep Exploration Technologies Cooperative Research Centre, which is a research project between mining companies, technology companies such as Olympus and the Australian government, which is looking at the future of automating deep drilling, and then, streaming it up to the cloud, etc. So, we are the XRF/XRD technology partner in this project along with providing other automatic sampling solutions.

About Marcus Lake

Marcus Lake is a Global Business Development Manager at Olympus is varied with his primary responsibility being the support of our global sales and distribution networks.

This includes technical training, the support of global conferences, visiting key customers and conducting road-trips to clients sites for demonstrations and calibration work.

The highlight of this role being responsible for the development of new business in emerging markets and the support of new business within identified growth areas.

Key Roles & Responsibilities

As a part of the International Mining Group (IMG), the key duty is to provide sales & technical support to our entire sales team and network of distributors globally. Especially, when they are dealing with accounts directly related to the Mineral Exploration including Prospecting), Mining, Environmental and Minerals Processing Industries.

This includes, but is not limited to:

• Key account management, sales and direct client support for other sales related matters (eg: Barrick, Newmont, BHP, Ivanhoe, Goldfields, MMG, Anglo…etc)
• Global training and advanced application support for the sales and global distribution network, particularly those with large exposures to the Mining Industry. This is focused on, but not limited to Australia, Asia, Canada, Africa, Europe, Central Asia, Sub-Continent & Latin America
• Client site visits, field & sample trials, application studies
• Assist in the coordination and attend key global conferences and strategic IMG meetings, including presenting at conferences and industry symposia (eg: PDAC, Mining Indaba, Round-Up, ExpoMin / ExpoNor, IAGS…etc)
• Direct arrangement of various Asian conferences – Hong Kong & Beijing Mines & Money, China Mining - Tianjin
• Global Instrument sales, delivery and training (+ advanced application training)
• Development of strategic sales & marketing collateral for the Mining Industry including:
  • Application specific photos & imagery
  • Application notes & briefs
  • Case studies