Small Mine Development is busy contract mining and developing underground mines in Nevada, and SMD’s general manager, Keith Jones, said the company’s focus is “to bring underground projects to fruition. We’ve been doing it a long time.”
SMD is now 38 years old, and Jones said this has been an interesting year, with the COVID-19 pandemic that in turn sent gold prices higher.
“Our business is tied to gold,” but while higher gold prices may lead to more projects, SMD’s contracts are “typically unit rates” rather than linked to gold prices or gold grades, Jones said. “We have done that in the past, but don’t have any of those in our portfolio right now.”
He said there are “certainly more exploration and new projects” in the current time of high gold prices, and companies are “finally advancing projects that were developed and mined in the 2011-2012 time frame and shelved” when the gold price fell. The price flirted with $1,900 an ounce in September 2011.
“I think there is an uptick for information and potential quotes,” Jones said.
The company bids for most jobs, but there also is word of mouth and return business.
Jones said SMD’s “focus has always been the horizontal development of portals and exploration drilling underground when sometimes there is better access from a drilling standpoint, and we sometimes do exploration drifting and development to get to the known ore bodies. We do a lot of production mining, as well.”
The company’s business is “pretty concentrated in northeastern Nevada, but we do pursue work elsewhere and will work anywhere in the United States. Northeastern Nevada is where the bulk of the underground mines are,” he said.
Outside Nevada, a unique project SMD is working on now is for the University of Arizona in Tucson, where the company is developing a portal and underground mine for teaching, research and demonstrations, Jones said.
The company also had a job in Colorado, but that finished in May. That work was a drainage tunnel for a tailings complex.
SMD currently has 500 employees, with nearly all of them working in Nevada. The company has an office and shop complex at Battle Mountain and a business office in Boise, and SMD owns “a huge number” of equipment, Jones said. There are roughly 300 pieces of mobile equipment currently deployed.
“We do the bulk of day-to-day maintenance on site, and at Battle Mountain we do specialized work, like major rebuilds,” he said.
The work includes rebuilding haul trucks and muckers.
Jones said SMD reached 600 employees at the mining peak in 2012, which was “a crazy time. We finally had to turn away work.” He said the surge retreated as the gold price fell, and there were “a bunch of operators who got caught in bankruptcy.”
One of SMD’s long-term contracts is at the Jerritt Canyon Mine north of Elko, where SMD crews have been mining at the Lee Smith Mine since 2010. They also have been mining at the SSX Mine there since 2014. Jerritt Canyon Gold owns the operations and operates the mill, while SMD provides the ore.
SMD also is mining at the underground El Nino Mine at South Arturo on the Carlin Trend, operated by Nevada Gold Mines in the joint venture with Newmont Corp. Barrick Gold Corp. operates NGM and had started El Nino before the JV was formed. Premier Gold Mines Ltd. owns 40% of South Arturo.
SMD works at NGM’s Leeville Mine, and is mining at NGM’s Vista underground operation at Twin Creeks in Humboldt County, as well. Twin Creeks is now considered part of the Turquoise Ridge Complex.
SMD starting contract mining in 2017 at Vista, but the company also built the Vista portals back in 2011-2013, according to the Elko Daily Free Press archives.
The company also is doing work on high capacity ground support at Turquoise Ridge around the shaft station, he said. A third shaft is under way at Turquoise Ridge, but SMD does not do shaft-sinking.
“This year we picked up some work at North Post,” Jones also reported in a phone interview.
North Post is part of the Meikle and Rodeo underground area at Goldstrike north of Carlin, and now that NGM has been created, this is where one of the advantages of the JV could pay. Barrick and Newmont shared a property line at Deep Post, which was closed in about 2009.
“They are truly seeing the benefit with removal of the property line,” Jones said.
One of SMD’s long-time contracts was the Chukar underground mine at the Gold Quarry Mine north of Carlin, now part of the Nevada Gold Mines joint venture, but SMD mined it out and shut it down in December 2019.
Jones said there was a five-month disruption after a pit wall collapse at Gold Quarry in 2018, but the company came back to finish mining. Final demolition of the site took place in March of this year.
SMD mined Chukar the first time from 2002 to 2009, when Newmont crews took over when Newmont closed Deep Post. SMD came back in 2011, when Newmont moved crews to the Exodus Mine.
SMD owned the facilities at Chukar that had to be torn down, but Jones said Newmont had built the shop, change room and other facilities at Vista, and the company leaves it up to the company contracting SMD services who owns the surface facilities.
The COVID-19 pandemic has been a challenge for the company as SMD has continued operating during the restrictions.
Jones said SMD jumped onto COVID-19 guidelines for hygiene, with question forms and temperature checks, and the company purchased “a bunch” of vans, so that workers being transported to and from job sites would be distanced. A 15-passenger van transports six people now and follows fresh air guidelines.
“In May, we implemented a mask requirement,” he said. “We also implemented a contact tracing card and quarantine. People have actually been good about that.”
Still, as of late October there had been 28 COVD-19 cases among SMD employees.
“We’ve had the full gamut, one in ICU and fairly critical and still not back to work, and we’ve had five or six extremely sick” and five or six with high fevers and sinus infections and others with mild cases or barely any symptoms, Jones said.
The pandemic costs SMD money, too, with the extra vehicles, supplies, temperature screening and loss of production when a small crew must stop working due to COVID-19.
Safety is emphasized at SMD, but Jones said even with every safety precaution, there are accidents.
“I think we are always vigilant. The incident rates continue to come down, as they have for the industry. It’s a daunting thing” to achieve zero accidents, and SMD has had medical incidents this year but no severe injuries, Jones said. “We try to make sure we’re doing the best we can be doing. It truly takes everybody. It’s a tough thing.”
Crews work 12-hour shifts, seven days on and seven days off, and SMD operates 24 hours a day.
SMD’s founder, Ronald Guill, retired in early 2011, after more than 28 years directing the company, selling the company to a group of senior leaders. Jones said the owner-operators are down to four now, but there were 13 in the beginning.
“It’s changed quite a bit over the past 10 years,” Jones said.
Guill started out in Spokane, moved the business to St. George, Utah, and later moved headquarters to Boise.
The SMD company history on its website states that SMD pioneered the use of 100% cemented backfill in underhand cut and fill mining in 1984, and this method has been proven in challenging ground conditions and is now widely used in Nevada.
SMD developed a portal into a pit highwall the first time in 1989 and has constructed more than 60 portals since then, according to the history, which also lists company advancements that included purchasing underground equipment with operator cabs for reduce noise and particulate matter exposure for workers when others still thought that wouldn’t work.