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JUNE 2022 I SMT007 MAGAZINE 27 Johnson: So that particular example runs about 23 to 24 years. Dykes: Yes, and that's for smaller mines. e smaller-scale gold mines that you see all over the place don't take as long. You can do them in four to six years, but not the larger main metal supply mines that supply your copper, silver, and alumi- num; even your nickel, cobalt, all these metals. Johnson: So, especially for copper or those sorts of metals, you're going to look for large scale mines because the demand is that high. It's huge and only makes sense to help feed the supply—a couple billion dollars over 20 years to get that up and running. How quickly can you get an ROI on that sort of investment? Dykes: Much of the high-grade deposits in the Western world, like here in the U.S. and Canada, have basically all been discovered and mined out; new deposits being found are lower grades. If you're looking in exotic places like Africa or Russia, there are higher grade deposits. You also have to try to get the mine financed, and I'd say you're looking for a two- to five-year return on payback of the ini- tial investment. Some of them go out as far as seven and 10 years, depending on the size. But a good one is usually two to five years return on the initial capital expenditure. Johnson: Of course, it varies as well from mine to mine. But what's the typical expectation for how long a mine will stay active? Dykes: It varies, but the minimum is 10 years, while most of them stay active anywhere from 15 to 25 years. Going back to the first exam- ple, we have spent about $50 million to get to where we are today and still have probably another $60 to $100 million to get to that pro- duction decision. Johnson: You've given us an idea of the math and timeline for developing a mine domesti- cally and the thresholds you need to be prof- itable and move forward. You just mentioned that a lot of the very high-grade deposits have been mined out, so how do you find a new site? Dykes: It's mostly done by going through the historic literature, which is tremendous. In fact, the mining industry gathers large amounts of data, probably more than any other indus- try, or you have prospectors that will bring you properties to examine. ere are several hun- dred thousand properties in the U.S. alone that are currently being looked at. I would say prob- ably 2–5% are lucky to become a mine. e best way to describe it is that you go through a lot of deadwood to find a gem. We've worked on many projects and keep in mind things like profitability, tons, and grade. You're trying to make it work. Quite oen, you'll drill holes, the expected results don't come back, and you walk away. Ten years later, somebody comes back, the prices have changed, and suddenly it becomes economic. You just never know. ere are a lot of low- grade deposits that are not economical even at today's metal prices. It's continually changing. ese days, when you go to a property, you're probably the third or fourth group working on that property as you develop the model of what it looks like. Of course, with geologists and engineers, no two can agree on the same thing, so it's contin- uously changing over time. We might go back to a property we looked at 25 years ago under new conditions. ere could be new technol- ogy or new recovery methods, metal prices, or the demand has changed. Right now, for exam- ple, copper is at $4.50 per pound. Deposits we looked at in the 1970s when copper was 60 cents or 65 cents that were not economical, are economical today. Johnson: Obviously, mining happens all around the globe. Can we compare what's going on globally vs. domestically when it comes to mining minerals?