Looking for answers in a Cracker Jack box
Barrick Gold Corp. announced the “Unlock the Value” program on September 19 to some fanfare. The Toronto-headquartered company is offering a US$10-million prize to anyone who can figure out how to recover silver from the ore at its Veladero mine.
The Veladero mine high in the Andes Mountains of Argentina is forecast to produce 550,000-575,000 oz of gold in 2007. Geologists estimate its ore contains 180 million ounces of silver. The problem, described by Barrick as a “scientific conundrum”, is that the silver particles are encapsulated in silica, and conventional recovery techniques leave behind 93% of the metal.
Interested researchers can register and submit preliminary proposals at www.UnlockTheValue.com by Jan. 21, 2008. The entries will be assessed by a team of experts and evaluated on their technical viability and ability to be safely implemented at Veladero.
Certain contestants will be invited to submit a detailed proposal, which, if judged to have merit, will be further developed, tested and commercially evaluated by Barrick. If a technology is successfully implemented at Veladero, the company will give the inventor a “performance bonus” of US$10 million.
This contest gives me pause.
The “Goldcorp Challenge” launched by Goldcorp Inc. in 2001 appeared to be a blatant admission that the company’s Red Lake mine geologists hadn’t a clue how to discover more gold ounces on the northwest Ontario property. (By the way, did we ever hear if the Challenge was successful in attracting winning ideas?) The Unlock the Value program sounds eerily similar, like an admission that Barrick has been unsuccessful in metallurgical innovation.
Metallurgy can be devilishly tricky, requiring long-term, stepwise research leading up to eureka moments. Is Barrick looking for the “eureka!”, without taking the necessary steps?
I remember the broad, innovative scientific research that was funded by Placer Dome’s Technology Group when CMJ covered the former Canadian gold giant for the December 1999 issue: “Placer Dome at the crossroads again”. I wonder if any of the group’s 66 research projects that were active then would have shed light on Veladero’s current conundrum. Barrick acquired Placer Dome in March 2006; I assume Placer Dome’s once-thriving research program ended at that time, if not before.
Only a handful of mining companies worldwide still support their own extensive research programs; two Canadian-based ones that come to mind are Teck Cominco and CVRD Inco, although there may be others. I wonder if scientists who can’t find steady work with mining companies will want to turn over their best ideas in a contest, hoping to be lucky and win a prize.
Barrick’s vision is to be the world’s best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. If the largest gold company in the world can’t afford to work out answers to its own problems, then who can? Unlocking Veladero’s value may take more than a contest.