(contined from last week – the second and final installment of a gripping story about one small scale miner’s journey into mining) .
That moment aroused my curiosity in mining. I reasoned that if one who had less qualifications than I had could make it, in the rough and tumble world of mining I was guaranteed to super profits.
Three years down the line I am still wondering why I did not take a moment to reflect and do a little more research as I have been taught in business school. My story reads like a novel but it is true.
First I met a friend who wanted to sell me a simple mining claim for US $100 000. The mistake I had made was to collect samples before signing an agreement with him. When he saw my interest and the ores his mines contained his tone changed from partnership to extortion.
Perhaps if I had the money I could have paid. The deal collapsed because I could not raise such money. He was also adamant that he wanted the entire sum upfront before deciding on how much I should invest in procuring equipment and of course his share.
Not one to be easily discouraged I sought a new partner. Now I wanted someone I felt could be more empathetic and agreeable to sharing benefits only when we had scored success.
Sure enough the new partner was all too willing. We went on a 50/ 50 joint venture. His part was simply the provision of the claim while my role was funding every aspect of the mine. The common term is sponsoring. Trouble was that the place had not been properly surveyed.
Again as funder I hired guys with rudimentary equipment and before I knew it US $2000 was gone for what I now know was a bogus geological report.
Unfortunately based on the wrong information we recruited a team of artisanal miners and hoped in a week’s time a gold infested reef would have revealed itself. The consultant we hired even told us, the metres at which we will hit the reef and how much the tonnes of gold it contained. We started enthusiastically knowing in just under 5 meters our reef would have been found.
Three weeks and twice the promised meters the team was still digging. Two months down the line and no progress I was advised to buy a compressor. Apparently we had hit a rock and needed to start blasting. The consultant advised that I was on the right course.
As an enthusiastic funder, I parted with US$ 3500 for the compressor. Sadly, another month later there was nothing to show for my investment. At this point, despondency began to creep in.
After further consultations with different people, I was advised to look for a place of my own. The second deal had fallen flat. I was now on to the third next project. Sure enough, I soon found a claim I would totally own.
I am still at the new place. I have invested every cent to buy hammer mills and build cyanide tanks. I have realised that at my new level I must hire the right people. I have learnt that without the right ore body you don’t have mining. For some reason, I just cannot quit. Something tells me mining is a long term project not the fly by night pursuit I had been told.
I am now trying to build a knowledge network around me. So far the three lessons I have drawn are that mining requires that you invest a little in understanding your mineral body. In small scale miners, this stage is skipped as we rush to make money. Sadly the result is more miss than hit. Without a good team, a lot of money is lost in endless trial and error and yes thefts.
It has also come to my realisation that mining is fairly capital intensive and that one needs meticulous budgeting before plunging in. Of course, the lack of angel investors and funders willing to take a risk means it is a constant struggle to raise capital required for a successful mining venture.
I am determined to ensure that my three years in the wilderness do not go to waste. Next time I write, I will share with you how it has gone.
The message I leave for those who want to venture into mining is that do your own homework.
