Q&A from the experts: In conversation with Michael Thomsen

November 7, 2019
Michael Thomsen
Independent Consulting Geologist

Michael Thomsen graduated from the University of Wisconsin-Milwaukee in 1974 with a bachelor’s degree in Geology and in 1977 gained a master’s from the University of Wisconsin-Madison. As a mineral exploration geologist with world-class companies, including Newmont Mining Corp, Freeport-McMoRan Inc, and Gold Fields Mining Corp, Michael has visited and evaluated mineral resource opportunities in 48 countries, where he has directed exploration teams that made discoveries of multiple commodities (gold, silver, copper, molybdenum, oil and gas, and biogenic elemental sulphur) on four continents. He has directed exploration teams in world-class districts such as Yanacocha in Peru and Ertsberg-Grasberg in Indonesia. Currently, Michael is directing gold and copper exploration for two junior companies: Taiex Ltd in Taiwan and Caribbean Minerals Ltd, in addition to conducting exploration for unconventional Rare Earth Element (REE) deposits.

Timothy Strong: Were there any major influences on you when you first started out in geology?

Michael Thomsen:
Two huge influences helped shape my career. The first operated at a personal level; I was extremely lucky to be hired by, and work directly for, two of the most outstanding explorationists in the business. I listened to them carefully, studied them closely, and worked diligently for both of them. The second influence affected me at the professional corporate level. Working for a multi-faceted company such as Freeport directly out of college provided an opportunity to advance through its various subsidiaries, which was a tremendous experience. I eventually worked for three of its subsidiary companies: Freeport Exploration, Freeport Indonesia, and Freeport Sulphur.

TS: Which country has left the strongest impression on you?

MT: I have had the very good fortune to work in nearly 50 countries around the world, so picking out a single one is difficult. Strong impressions came from China, Brazil, Peru, Egypt, and Taiwan, but the most impactful was Indonesia. Freeport transferred me from the Tucson exploration office to the Ertsberg district in Indonesia in the late 1970s. That experience was the ultimate in extremes of geology, climate, culture, mineralization, and vegetation, which all coincided in the most remote part of Indonesia where equatorial glaciers dominated the nearby peaks. Copper-gold ore bodies were literally outcropping at the Dom skarn and the Grasberg porphyry, but the challenge was to define and drill the highest grade and most economic deposits. My team of Indonesian geologists did an amazing job and represented their country to the highest professional standards.

TS: You worked with Freeport-McMoRan for 10 years. What do you consider to be the most important discovery you made during that time?

MT: As with most world-class mineral districts, an initial district discovery is made followed by subsequent ‘head-frame’ discoveries. Additionally, exploration teams make discoveries, not individuals, and I was fortunate to lead a strong team. While drilling out the Ertsberg East discovery, my team core-drilled deep intercepts beneath that deposit, which eventually became the IOZ and DOZ Cu-Au skarn discoveries. The challenge was to discover the highest-grade ores we could find to feed the 9000 tons per day mill in a USD 0.65 / lb copper price environment. Imagine being told you can’t drill the Grasberg because our dictate was to find 3 % Cu ore and we projected that Grasberg would not carry that grade.

TS: Could you tell us more about being involved in the discovery of Yanacocha?

MT: The Yanacocha gold district in northern Peru consists of a dozen separate and distinct high sulphidation (‘HS’) gold deposits. When I became Director of International Exploration for Newmont, Yanacocha’s reserves stood at a million ounces in a single deposit but clearly the district had an immense upside. Historically, HS gold deposits were known to host high grades (El Indio in Chile, Chinkuashih in Taiwan, Pueblo Viejo in the Dominican Republic, etc.) but Yanacocha was different. Vast volumes of low-grade (1 g/t Au) ore in vuggy silica dominated the district, but it was economic due to its easy mining and leach characteristics. My exploration team at Yanacocha did a firstclass job of interpreting the complex volcanic systems, prioritizing the various targets, and discovering the multiple deposits that now define the district eventually found to be hosting a total gold resource of over 50 million ounces – the largest HS district in the world today.

TS: If Yanacocha was to be drilled in 2019, what would be done differently?

The various geologic teams at Yanacocha interpreted, defined, and published technical data that has become the definitive model for low-grade HS deposits across the world. What may be obvious now was not so clear 25 years ago. Today we have a much better understanding of alteration patterns and geophysical signatures as they relate to HS gold systems. The complete HS model is much better defined and applied in exploration programs today than it was 25 years ago.

TS: While working for Newmont, you opened one of the first exploration offices in Beijing. Can you tell us more about that?

MT: This was a most interesting initiative. In the 1990s China started to open its doors to international mining investment. Newmont and Barrick were the first two companies to enter that scene and explore opportunities. Our focus was to evaluate the southern provinces (Guizhou, Guangxi, Yunnan, etc.) for potential Carlin-type sediment-hosted gold systems. A number of small gold deposits hosted in carbonates and siltstones were present and we wanted to determine if potential existed for a worldclass Carlin-type gold district to be found. China was a wonderful experience and interactions with the various governmental provincial geologic teams were of the highest professional standards.

TS: Broadly speaking, what do you foresee for Rare Earth Element (REE) exploration, especially in the US?

MT: Historically, REE exploration in the US began with the discovery of Mountain Pass in 1949. Since then, many other REE occurrences have been defined in the US but none of these are deemed to be economic, hence the lack of development and production from them. Most of them are of the intrusive-hosted type and are refractory in nature, making them uneconomic. Other deposits are high in uranium or thorium, which negatively impact their development. The newest economic REE deposit type in the world is the ion-adsorption clay type deposit. The future of exploration for REE in the US may lie in exploring for this type of deposit in the eastern US and not intrusive-hosted systems in the west.

TS: Tell us about REE supply and demand.

MT: World demand will continue to increase beyond the ability of current producers to supply this complex suite of rare metals. Supply is dominated by China with the rest of the world racing to catch up. Modern technology depends on REEs. There are no substitutes and the world demands modern technology. It is an interesting dilemma.

TS: What are the main indicators of an REE deposit?

The answer depends on the specific REE deposit type under study. Many intrusive-hosted REE deposits (carbonatite, peralkaline, alkaline, pegmatite, greisen, etc.) will have a radiometric signature. The newly defined ion-adsorption clay type deposits are identified and located mainly by their primary metal geochem signatures.

TS: Which REEs are of most importance?

MT: Out of the suite of 17 defined REEs, there are four critical ones. Those are neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb). These are the most important rare metals and serve as the core of all modern technology today.

Michael Thomsen interviewed by the press during a mining conference in Medellín , Colombia

TS: What are the most important geochemical signatures?

MT: The most important geochemical signatures for Nd, Pr, Dy, and Tb enriched rare earth deposits depend on the genesis of thedeposit. The world’s largest concentrations of these four critical rare metals are found in the ion-adsorption clay type REE deposits in the southern China region. These are formed as surficial lateritic accumulations over nested intrusive complexes having only anomalous concentrations of rare earths in the primary host rocks. The geochemical signature of these laterites simply represents host rock Nd, Pr, Dy, Tb profile.

TS: Where do you think the next economic REE deposit will be found?

MT: I believe that it will be found in Brazil and be of the ion-adsorption clay type. Having said that, if new metallurgical breakthroughs can be made on intrusive-hosted REE deposits, then some of the old deposits may then be deemed economic.

TS: Do you think enough is being done to secure the international supply of REEs?

MT: It will be difficult for private companies to compete with the Chinese governmentsupported Rare Earth mines at Bayan Obo and the southern China ion-adsorption clay type REE mines. I believe that governments in the US, Canada, Australia, and elsewhere will need to offer significant incentives to create not only REE mining centers in those countries but also downstream REE processing facilities to compete with Chinese dominance in the industry.

TS: What changes have you observed over the past 20 years in the way drilling contractors work?

MT: Drilling efficiencies have increased significantly and so has the application of new technologies. Both domestic and international competition for drilling services have increased the effectiveness of drilling.

TS: What is your opinion on geologist– driller relationships? Is there room for improvement?

MT: It seems that this is an ever-present personal challenge and opportunity. Yes, while there is always room for improvement, interpersonal relationships are important in any aspect of business from CEO– CFO, to Plant Manager–Line Worker, to Geologist–Driller. As long as professionalism is applied by all sides, these relationships will be productive.

TS: Will digitized core-orientation usage continue to rise?
MT: Yes, I believe it will. Gone are the days where taking hand-held photos to assist with core-orientation studies were the norm. The gathering, collection, and interpretation of uniform, well-organized digitized coreorientation data sets will continue to rise in most exploration and drilling departments.

TS: Can you tell us about your worst experience with an exploration drilling company?

MT: Maybe I have been fortunate, but my worst experience really wasn’t that bad. I try to aggressively vet drilling contractors beforehand for every exploration project to alleviate potential problems from the start. The worst experience was in Ecuador where a man-portable rig was required to test a remote HS gold prospect. Mother Nature threw everything she had at the drill contractor and the rig seemed to break down at the most inopportune times. Sourcing spare parts became our biggest issue.

TS: In an ideal world, what would be the perfect core diameter for mineral exploration purposes?

MT: This is a toss up between B-size and N-size. Both have advantages and disadvantages. My preference has always been B-size unless the ground condition is so bad that acceptable recoveries cannot be attained using B-size, at which time I would switch to N-size in other holes. My old adage on any exploration project has always been: core drill early and core drill often.

TS: What advice would you give to young exploration geologists?

MT: My advice to young geologists is be passionate about exploration, be willing to take on the hard assignments that others don’t want, and work harder than others in your field. And my final piece of advice would be to read, read, read. The internet offers an unbelievable source of information on any aspect of exploration. Use it to the maximum extent. And lastly, be aware that economics and metallurgy can be just as important as an exploration discovery. These are the critical factors of which one must be aware from the very start of any program.

TS: What does the future hold for mineral exploration?

The future of mineral exploration offers significant challenges and exceptional rewards for those willing to play the game. Innovative thinking and integration of technology will always be required for successful exploration, but hard field work and the creative human factor will be the critical determinants for the successful future of mineral exploration.