People, Community and Tools to Maximize Operational Potential

You can watch the video of this panel here.

Closing Mexico Mining Forum’s second day, Jesus Romero, Senior Consultant at Golder, looked at how existing operations’ potential could be maximized. Experienced panelists outlined how expertise, tools and most of all people, play a significant role in improving operations.

“A company’s staff is always a crucial factor for mining companies that are looking to improve their operations. I can talk about my team all day. Without our people, all we have is a rock on the ground,” said Jody Kuzenko, CEO of Torex Gold Resources. Because mining is a complex business, people are crucial but they need to be aligned to the company’s vision. This vision, Kuzenko said, should be clear and informed in regards to culture and value. To this end, Torex utilizes the ‘systems leadership’ theory to foster commitment.

Arturo Bonillas, CEO of Magna Gold Corp, agreed with this notion. “Alignment is fundamental in any organization. In our case it is absolutely vital,” he said. To keep people aligned with the company’s vision, Bonillas said keeping clear KPIs and focusing on top-down and bottom-up communication and feedback are crucial elements. Furthermore, employees should know what they contribute to the company’s direct results.

Sharing a common culture is a particularly interesting challenge for companies that started out small, like Alamos Gold. Its CEO, John McCluskey, scrambled to get the project going with a team of only four people. Now, the company has grown to over 2,000 people and has a market value of US$4 billion. “We had to learn along the way,” explains McCluskey. To generate company values, Alamos had to talk to all its employees. But even more important is to adhere to these standards after they have been set, especially in an uncertain year marked by a global pandemic. Both staff and communities need to be kept safe. “If you do not see that mining has a purpose that goes far beyond the production of metals, you have missed the point,” said McCluskey.

Steve Holmes, COO of First Majestic Silver Corp, noted that the company was founded in the early 2000’s and expanded through M&As. During this time, sharing a vision was paramount. “But vision does not always easily translate to the people on the frontline,” Holmes remarked. Every worker has a different perspective, after all. Companies should focus on what makes their culture valuable and enforce that through strong and frequent communication, involving senior leadership when possible.

When developing their teams, the panelists highlight Mexico’s strong mining culture, which helps companies find the right talent for their operations. “Foreign companies brought in a lot of knowledge,” Bonillas said, adding that people in the areas of economic geology and experts in exploration are still somewhat lacking. However, Holmes said that most of his team are nationals. Kuzenko also explained that 99 percent of her company’s workforce comes from Mexico, 70 percent of them from Guerrero, where Torex operates. Its Media Luna project will go online around January 2024. “The expertise of our Mexican team made this all happen,” she said, stressing the importance of local experience. “The best thing we have done is to cultivate and to grow a construction team,” said McCluskey, adding that local people can help with unusual circumstances that pop up while operating.

Besides people, tools are equally valuable to maximize potential. “Our number one tool is cost control,” Bonillas said. Reacting fast to issues is key to optimize cash flow. Furthermore, the importance of geological models could not be understated: after all, you only get to mine a mineral once. Kuzenko highlighted the importance of tailings dams, as their failures cause tragic accidents. This is why the company built one of the largest filtered tailing storage solutions found in the world. Using both filters and dry stacking, the risk of a complete failure and subsequent runout is minimized.  While this costs more, the mine is located in a seismically active area riddled with water issues. The company’s tailing solution brings many benefits to the table, just like its innovative rope conveyor does.

At First Majestic’s Santa Elena mine, a high-intensity grinding mill provided a competitive advantage in the liberation of gold and silver, said Holmes. The mine uses a lot of energy as well, so Holmes is commissioning a large, on-site liquefied natural gas (LNG) powerplant, along with a third party so First Majestic did not need to invest heavily. The LNG plant cuts energy spending by 35 percent and decreases carbon emissions by 50 percent. But not everything needs to be cutting-edge technology, however. By incorporating ‘5S’ criteria: sort, set in order, shine, standardize and sustain, an efficient workspace can become a reality, he says.

McCluskey aimed his efforts at engineering design, metallurgy and exploration, taking safety and efficiency into account. “What Mexico needs more than anything else is long-range thinking,” he explained. Therefore, expanding reserves and reliable policies are of the essence for the mining industry. Nevertheless, a company should plan well from the get-go. “No matter how good your people are, they can head off in the wrong direction,” he said.

All panelists concurred on the essential role community relationships play in the mining sector. “Community relations need to be really strong and long-term if you are going to be successful in Mexico,” said Holmes. “Governments give permits, communities give permission,” agreed Kuzenko. Leaving a net-positive legacy after a mining project is finished should be part of all companies’ strategies.