The High Cost of Low-Tech: The Impact of Manual Operations on Drill Programs in Mining

If you’re in the exploration industry, you know that drill programs are key to finding mineral deposits that can make or break a project’s success.

But many exploration companies still use paper and spreadsheets and other old-fashioned ways to manage their drill programs.

Insane! right? — Well not really.

Most of the software that was available built by traditional mining software companies focused only on the Majors and Enterprise. Many mid tiers and juniors just couldn’t afford to use any of this software because of the cost.

So most people in mineral exploration had no choice but try and build their own or run a full manual workflow.

Even though these methods may have worked in the past, they can hurt drill program metrics, leading to higher costs, less productivity, problems with compliance, and missed opportunities. In this article, we’ll talk about how low-tech and manual operations affect drill program metrics and how much they cost.‍

Understanding Drill Program Metrics

Drill program metrics, also known as Key Performance Indicators (KPIs), are vital for measuring the effectiveness and efficiency of drilling operations. They help exploration managers and teams assess their drilling programs’ performance and identify areas for improvement. Below are some common drill program metrics and their definitions:

1. Rig Utilisation: The percentage of time a drill rig is actively drilling, indicating the efficiency of rig usage and scheduling.
2. Cost per Meter: The total drilling cost divided by the total meters drilled, reflecting the efficiency of drilling operations in terms of cost.
3. Penetration Rates: The speed at which a drill rig advances through the rock, affecting drilling time and overall project efficiency.
4. Core Loss: The loss or misplacement of core samples, impacting data quality and confidence in the final resource model.
5. Breakdown Time: The amount of time a drill rig is non-operational due to mechanical issues or maintenance, affecting overall project efficiency and rig utilization.
6. Sample Dispatch Turnaround: The time it takes for core samples to be collected, transported, analyzed, and reported back to the exploration team, impacting decision-making and project timelines.
7. Consumables Cost: The total cost of drilling consumables, such as drill bits, fluids, and other materials, divided by the total meters drilled, reflecting the efficiency of consumables usage in drilling operations.
8. Fuel Usage: The total fuel consumption by a drill rig during the drilling process, often measured in liters per meter drilled, which helps to assess the rig’s energy efficiency and environmental impact.

Having these metrics on hand allows you to set KPIs and analyze your operations effectively. Here’s a summary of the key aspects you can track:‍

1. Rig Performance: Assess the efficiency and effectiveness of drill rigs by tracking uptime, downtime, penetration rates, and productivity to identify optimization opportunities.
2. Driller Performance: Evaluate individual drillers’ efficiency and effectiveness by measuring metrics like meters drilled per shift or per day to uncover performance improvement possibilities.
3. Drill Contractor Performance: Monitor the effectiveness of drill contractors, including drilling efficiency, safety adherence, and work quality, ensuring projects meet time, budget, and quality requirements.
4. Lab Performance: Measure laboratory testing efficiency and effectiveness through metrics like sample analysis turnaround time, which can impact drilling program efficiency and decision-making.
5. Sample Dispatch Efficiency: Track the speed and accuracy of the sample dispatch process, from drill rig to laboratory, to optimize drilling program efficiency and obtain timely, accurate sample results.
6. Field Activity Optimisation: Examine the efficiency of field activities, such as drill rig setup and teardown or equipment mobilization, to identify potential improvements and cost reductions.
7. Tenant Expenditure: Assess the cost of maintaining tenant properties, like housing for personnel, to identify opportunities for cost reduction in drilling programs.
8. Government Compliance: Ensure adherence to local, state, and federal regulations by monitoring compliance metrics, avoiding costly fines and legal actions.
9. Drill Program Budget Maintenance: Measure the accuracy and completeness of drill program budgets by comparing budget usage to drilling program progress.‍

The Problems with Traditional Methods

Let’s face it, traditional methods of managing drill programs using paper-based systems and spreadsheets have their limitations. One of the main issues is that there’s just so much data to keep track of — progress, costs, and other important metrics can quickly become overwhelming. Plus, paper-based systems are prone to mistakes and inconsistencies, which can lead to incorrect reports and bad decision-making. And let’s not forget about the headache of storing and finding all those records!

While spreadsheets do offer some advantages over manual processes, they’re not without their flaws. They’re not designed to manage drill programs and keeping track of multiple variables across a large number of holes can be a real challenge. And let’s face it, manually entering data into spreadsheets is a tedious and error-prone task.

Building and maintaining custom solutions can be expensive and time-consuming. Plus, technology is always changing, which means that custom solutions can quickly become outdated, leaving companies with expensive software that’s no longer useful. So, it’s clear that there’s a real need for modern, digital solutions that can help exploration companies streamline their drill programs and maximise their return on investment.‍

Examples of Common Mistakes and Errors that can occur due to Manual Workflows

When managing a drill program using manual methods, mistakes, and errors are bound to happen. Here are some common examples of these mistakes and errors:

• Data Entry Errors: With manual methods, data has to be entered multiple times, which increases the likelihood of errors. Transcription errors, misspellings, and data formatting issues can cause problems down the line.
• Incorrect Cost Tracking: With paper-based systems, tracking costs can be challenging, especially when dealing with multiple contractors and different rig types. There’s a high risk of errors in invoicing and cost tracking, which can lead to significant financial losses.
• Lost or Misplaced Data: Paper-based systems always run the risk of losing or misplacing data, which can be very bad for a drill program. When data gets lost, it can take longer and cost more to find, which can affect the schedule of the program.
• Delayed Reporting: When using manual processes, data consolidation, the preparation of reports, and the distribution of those reports all take a considerable amount of time. This can result in delays in decision-making and have a negative impact on the program’s efficiency as a whole.
• Inconsistent Data: Using spreadsheets raises the possibility of data inconsistencies due to differences in formatting and structure, which can disrupt efforts to combine information from multiple sources. Consequently, the program may not be able to make informed decisions.

These are just a few examples of the frequent mistakes and oversights that can occur when manually managing a drill program. And we have not even discussed how these translate to the database.‍

Industry research report impact of manual operations on drill program metrics:

According to a study by McKinsey & Company, mining productivity peaked in the 1990s and has declined by more than 30% since then. “Unfortunately, digital and analytics have not delivered their full potential for many, and additional value must be captured”. This is primarily because siloed data prevents any fundamental insights.

The Impact on Drill Program Metrics

When it comes to drill programs, using manual operations can actually do more harm than good. These old-fashioned methods can lead to decreased efficiency, higher costs, and lower-quality data. Unfortunately, most exploration managers and teams only realise this once it’s too late, often discovering these issues days, weeks, or even months after the fact. So, it’s important to find a way to manage drill programs that is more reliable, efficient, and up-to-date.

• Reduced Rig Utilisation: Inaccurate scheduling and poor communication can lead to rigs sitting idle, resulting in reduced rig utilisation. This, in turn, can increase costs and reduce the number of holes drilled per day.
• Increased Cost per Meter: Inaccurate invoicing and poor cost tracking can lead to increased costs per meter drilled. This can be caused by errors in data entry, delays in processing invoices, and discrepancies between actual drilling activity and invoiced amounts.
• Slower Penetration Rates: Inefficient communication and reporting processes can result in slower penetration rates. This can be caused by delays in reporting drill progress, poor communication between drillers and geologists, and errors in tracking data.
• Standby Time: Inefficient scheduling and poor communication can also lead to increased standby time. This can occur when drill rigs are not properly scheduled, resulting in delays and idle time.
• Increased Cost per Hole: Poor cost tracking and inaccurate invoicing can lead to increased costs per hole drilled. This can be caused by errors in data entry, delays in processing invoices, and discrepancies between actual drilling activity and invoiced amounts.
• Core Loss: Inaccurate or incomplete data can result in core loss, which occurs when core samples are lost or not properly accounted for. This can lead to lower-quality data and reduced confidence in the final resource model.
• Hole Deviation: Poor communication and inaccurate data tracking can result in hole deviation, which occurs when drill holes do not follow the planned trajectory. This can result in lower-quality data and reduced confidence in the final resource model.
• Sample Dispatch Turnaround: Inefficient sample dispatch processes can result in delays in sample analysis and reporting. This can lead to slower decision-making and reduced efficiency in the overall drill program.‍

The Impact on the Database

Inaccurate data can lead to errors in the geological interpretation of the drill data, which can then propagate throughout the entire database. This can lead to inaccurate resource estimates, mine planning, and ultimately, lower profitability for the project.

For example, if drill hole locations are not accurately recorded or are entered inconsistently, it can lead to errors in the spatial positioning of mineralisation. This can result in misplaced or incorrectly sized ore zones, leading to inaccurate estimates of tonnage and grade.

Similarly, if geological logging is not consistently applied or accurately recorded, it can lead to errors in the interpretation of the rock types and structures, which can result in the misidentification of mineralisation and an inaccurate resource model.

Keep in mind that errors in drill hole data can compound over time and can become increasingly difficult to correct as more data is collected. Inconsistent data management practices can also make it difficult to identify and correct errors, leading to a lack of confidence in the final resource model.

Manual workflows have significant impact on the final quality of your resource model. The traditional ways of doing things make it really difficult to implement accurate data management practises.‍

The Impact on the Overall Drill Program Workflow

Manual operations don’t just affect specific drill program metrics or just the database, they impact the entire workflow from planning to completion. Here are some specific examples of how manual processes can negatively impact different stages of the drill program:

• Planning: Manual processes can create delays in the planning stage due to a lack of real-time data and insights. This can lead to longer lead times for mobilising rigs, inefficient drill scheduling, and missed opportunities for cost savings.
• Execution: Inefficient communication and reporting processes can lead to delays in decision-making, resulting in longer drill times and increased costs. Without accurate data, teams may miss targets, drill in the wrong locations, or even overlook mineral deposits.
• Data management: Manual data entry, such as using spreadsheets and paper-based plods, can lead to errors and inconsistencies in data. This can negatively impact the accuracy and reliability of the data used for resource modelling, ultimately affecting the quality of the resource model.
• Reporting: Manual reporting processes can be time-consuming and prone to errors, leading to delays in accessing key information and insights needed to optimise drill programs. This can also result in missed opportunities to improve performance and reduce costs.‍

The Cost of Low-Tech Operations

Using old-fashioned and manual methods for drilling programs may seem like a cheaper option, but the cost of these low-tech operations can add up over time.‍

Direct Financial Costs: Costs can rise when decisions are delayed, mistakes are made, or additional work needs to be done when switching to a manual process. For instance, delays in reporting and data analysis can lead to missed opportunities and increased operational expenses, while inaccurate invoicing and billing can drive up costs per metre and per hole.‍

Opportunity Costs: Opportunity costs are the potential benefits or profits that are lost when choosing one option over another. In the case of manual operations, the opportunity cost is the potential benefits that are lost due to inefficient and error-prone processes. This can include missed opportunities for exploration and drilling, decreased productivity and efficiency, and increased risk of errors and mistakes.

‍For example, delays in data processing and analysis can lead to missed opportunities for exploration and drilling, while inaccurate data and resource models can lead to inefficient and ineffective decision-making. This can result in missed opportunities for new discoveries, decreased productivity and efficiency, and increased operational costs.‍

The Benefits of Digitising Drill Programs

In recent years, the mining industry has been increasingly accepting of digitising drill programs. With the help of modern software solutions, businesses can now replace outdated paper-based and manual workflows, leading to improved precision, efficiency, and collaboration. This, in turn, results in better drill program metrics and lower costs over time.

A report by EY found that the implementation of digital solutions in mining operations can lead to cost savings of up to 20%. A more integrated strategy across the value chain would increase ROI and help miners better tackle their most complex challenges, including ESG and productivity.

During a research, BCG worked with several metals and mining companies that moved to adopt technology— and, in turn, reaped significant rewards. See image below

Typical ranges of KPI improvement shown; actual realization will depend on the company’s starting point and context. by BCG

‍Improved Accuracy and Efficiency

Automating many mundane, repetitive tasks like data entry and reporting is made possible by digitising drill programs, which greatly reduces the potential for human error and subsequent cleanup. As an added bonus, when data collection and management are standardised and centralised, quality control over the data is enhanced, and the resources and time needed to process and analyse the data are drastically reduced. ‍

Enhanced Data Analysis Capabilities

Digital drill program management solutions offer advanced data analysis capabilities, such as real-time reporting and data visualisation, enabling more informed and effective decision-making. This allows geologists and other stakeholders to gain deeper insights into the data, identify trends and anomalies, and optimise exploration and drilling programs.

‍Streamlined Collaboration

Current software solutions offer a platform for collaborative data sharing and access in real time, making it possible for all parties involved in a project, including geologists, drill contractors, and exploration managers. This boosts overall project efficiency by reducing the chance of errors and delays, promoting improved communication and coordination among teams, and promoting greater general teamwork. ‍

Well — Is it Time to Digitise your Drill Programs?

It probably is. let’s talk more about the digital strategy for your operations. Connect with me on LinkedIn!