Can you give an overview of the last year for SMD?

SMD has experienced an exciting year. By the latter half of 2022, we had expanded significantly, growing our workforce and exceeding 600 employees, and securing over 10 contracts. However, as we entered Q1 2023, a sudden development occurred at Jerritt Canyon, where we were responsible for the SSX and Lee Smith mines. This entailed an abrupt shutdown, resulting in a substantial reduction of our workload. Such occurrences are often unpredictable, and although we may anticipate them, we cannot reduce our commitment. This setback translated to approximately one-third of our work vanishing. Moreover, within a month, Jervois’ Idaho Cobalt operation suspended its activities, including the work we were engaged in.

Is there a boom in critical minerals in the underground segment?

Even though there is indeed an increase in critical minerals activity within the underground sector, it has not sparked an overwhelming rush yet. 

What are the main challenges and trends affecting underground construction?

Cost pressures are always present. In the current inflationary climate of the last three years, we continuously seek ways to deliver value in the face of rising costs. Additionally, we are witnessing advancements in automation, particularly in autonomous mucking and other initiatives. Nevertheless, in underground mining, we are not as advanced in automation as our open-pit counterparts, who have achieved autonomous haulage and drilling. Consequently, the pressure to stay technologically competitive persists, driving us to explore autonomous solutions and enhance our technology in the underground sector.

What is SMD’s approach to safety?

Over the past couple of years, our industry has observed a rising incident rate. Notably, it is not predominantly new workers affected; it often stems from complacency among experienced personnel. Thus, safety remains a paramount concern, and we discuss it more frequently than we did years ago.

While we have embraced some measures like autonomous mucking and long-haul open stoping to keep workers at a safe distance from hazards, the reality is that people still need to be underground for various tasks. Automation in these areas remains limited. Hence, our primary focus has shifted towards safety culture and individual responsibility. We have initiated safety journey sessions where we gather the entire workforce for a full shift, emphasizing safety and engaging in open discussions about their experiences and the issues they encounter in their workplaces. Furthermore, we are on the cusp of opening a training center to provide new employees with exposure to the environment without them being physically present underground.

What opportunities does underground mining in the US offer for SMD?

There is an opportunity, especially when considering Nevada’s mining landscape. Looking back on my career, in the mid to late eighties, Nevada had just a couple of underground operations. At that time, the state produced approximately 6 to 7 million oz/y of gold, with only a small percentage coming from underground mines. This scenario has evolved, and now, more than 50% of the gold production in Nevada is likely derived from underground mines. The reason behind this transformation is the increasing scarcity of open-pit deposits. Many easily accessible resources have already been tapped, leaving larger pits with lower grades and higher strip ratios. In contrast, underground mining allows us to concentrate on higher-grade ore bodies. 

Being in the underground mining segment is advantageous because we anticipate that the trend toward increased underground mining will continue. 

How can underground contractors differentiate themselves?

The competition in the underground mining sector has intensified over the past decade. We all compete for the same workforce. 
Relationships and trust can be pivotal factors in contractor selection, where prior connections between personnel may lead to a sense of reliability and familiarity. Moreover, contractors may differentiate themselves through innovative offerings, such as new equipment or alternative methodologies, like using a road header instead of traditional drill and blast techniques. These distinctions, in addition to price, can influence a client's choice of contractor. Factors like a contractor's safety record and reputation also hold significant weight in the private sector, reflecting the broader considerations beyond cost that come into play during the selection process.

We place a strong emphasis on offering our existing clients value, outstanding performance, and top-notch customer service.