"Don't Build Mines, Build teams That Build Mines": Know What to Look For Before you Invest

• Building strong internal teams; don't rely on contractors, with G Mining's "self-perform" approach & Champion Iron's focus on hiring A-team talent across multiple specialized engineering firms to cut costs and maintain quality control.
• Reject unproven innovations, preferring established, catalog-available equipment with demonstrated track records at other operations to minimize project risks and ensure reliable support and maintenance.
• Maintain simple but effective reporting systems, encourage immediate problem escalation without blame, and set realistic budgets upfront rather than optimistic targets that lead to inevitable cost overruns.
• Key decisions include contract mining versus owner-operated fleets, power generation solutions, tailings management approaches, and infrastructure sizing, with indirect costs typically representing 30% of total project capital expenditure.
• Delivered projects on time and budget through creative solutions and maintaining strong stakeholder relationships with patient capital providers.

The mining industry faces persistent challenges in project development, with cost overruns and schedule delays becoming increasingly common across the sector. A recent panel discussion featuring Louis-Pierre Gignac, CEO of G Mining Ventures, and David Cataford, CEO of Champion Iron, provides valuable insights into successful mine development strategies. Both companies have demonstrated exceptional track records in delivering projects on time and within budget, offering practical perspectives on the critical factors that differentiate successful mining developments from industry failures.

G Mining Ventures operates as an aspiring intermediate gold producer, having recently completed construction of the Tocantinzinho mine in Brazil and preparing to develop the Oko project in Guyana. Champion Iron operates one of the world's largest high-grade iron ore mines in Quebec and represents the largest publicly listed pure-play high-grade iron ore producer globally. Their combined experience spans multiple successful project deliveries during challenging market conditions, including the COVID-19 pandemic and subsequent supply chain disruptions.

Team Building & Human Capital Management

The foundation of successful mine development begins with assembling the right team, according to both executives. Gignac emphasizes G Mining's philosophy that 

"You don't build a mine, you build a team that builds a mine." 

This approach recognizes that mining projects typically involve thousands of people working in remote locations, requiring complex logistics for transportation, accommodation, and daily operations management.

G Mining has developed what Gignac describes as a "self-perform approach," maintaining internal teams for engineering, procurement, and on-ground execution rather than relying on external contractors. The strategy aims to eliminate intermediary profit margins while maintaining direct control over project execution. 

"We're looking to cut out the middlemen, the contractors, that are there to take profit off the table." 

This approach requires building substantial internal capabilities but allows the company to avoid managing contractor relationships rather than directly managing project activities.

Champion Iron takes a slightly different but complementary approach, working with multiple specialized engineering firms while maintaining rigorous selection criteria. Cataford describes requiring engineering firm personnel to pass psychometric tests to ensure compatibility and effective collaboration. 

"If there's no fights and there's no pointing fingers, if we can get everybody to work together, that's how we managed to hit schedules.”

The company has successfully delivered three projects on time and within budget using this methodology.

Both companies emphasize the importance of unified incentive structures. G Mining implements common performance metrics across all project participants, from janitors to the CEO, focusing on safety, capital expenditure control, and schedule adherence. This alignment ensures all team members work toward shared objectives rather than individual departmental goals that might conflict with overall project success.

Technology Selection & Risk Management

The executives demonstrate a conservative approach toward technology adoption, prioritizing proven solutions over innovative but unproven alternatives. Gignac explicitly states his preference for established equipment suppliers as reliable vendors with strong support capabilities. 

"It has to be proven somewhere else. I'm not going to be the guinea pig of anything." 

He believes that there are always high chances of problems arising when companies attempt to use unproven processing technologies.

This conservative stance extends to mining methods and operational approaches. Rather than experimenting with new technologies like road headers for underground operations, both companies prefer traditional drill-and-blast methods with proven track records. However, they distinguish between risky innovation and beneficial technology upgrades, supporting investments in proven systems like mine dispatch software and expert control systems for processing plants when these technologies offer clear operational benefits.

Cataford describes Champion Iron's systematic approach to evaluating new equipment, such as their recent assessment of vertical mills versus ball mills for their flotation plant expansion. When the engineering team proposed switching to vertical mills, Cataford required them to visit at least six operating sites using similar equipment and provide detailed reports on performance issues and design modifications needed for successful implementation.

Project Control & Financial Management

Effective project control systems form another cornerstone of successful development. Both companies maintain relatively simple but comprehensive reporting systems that provide real-time visibility into project status without overwhelming stakeholders with excessive detail. Gignac describes generating monthly reports detailing costs and schedule updates, with quarterly reforecasting to identify and manage variances proactively.

The executives emphasize the importance of realistic initial estimates rather than optimistic projections designed to attract investment. Gignac notes that many junior companies prefer artificially low capital expenditure estimates to generate impressive return calculations on paper, but these unrealistic budgets set projects up for failure during execution. 

"There's a lot of junior companies that prefer having this really low capex to generate this exceptional return on paper, but when it comes to execution, it's unfeasible to do that."

Champion Iron's approach involves detailed budgeting down to specific operational items, with Cataford recounting discussions about including coffee costs in operational expenditure estimates. This granular approach, while time-consuming, provides more accurate project forecasts and better cost control during execution. The company also ensures that estimating team members transition to execution roles, maintaining continuity and accountability between planning and implementation phases.

Strategic Design Decisions & Trade-offs

Mining project development requires numerous strategic decisions that significantly impact both capital and operating costs. Both executives highlight the complexity of sizing decisions, noting that certain equipment like gyratory crushers cannot be efficiently duplicated, requiring upfront commitments to appropriate scale rather than gradual expansion approaches.

The choice between contract mining and owner-operated fleets represents a critical decision point. G Mining opted for owner mining to maintain operational control and capture additional value, despite higher upfront capital requirements. This decision reflects their total cost optimization philosophy, considering long-term operational efficiency rather than minimizing initial capital expenditure.

Infrastructure decisions often represent significant cost components that receive insufficient attention during feasibility studies. Gignac notes that processing plants typically represent only about 30% of total project capital expenditure, with infrastructure and indirect costs accounting for substantial portions. Indirect costs alone often reach 30% of total project expenditure, including essential facilities like truck shops, administrative buildings, access roads, and power transmission infrastructure that remain relatively fixed regardless of production scale.

Tailings management represents another critical design decision, involving trade-offs between different management approaches and facility locations based on topography, distance from processing facilities, and regulatory requirements. Power generation solutions require similar analysis, particularly for remote projects requiring self-sufficient power systems.

Louis-Pierre Gignac, CEO of G Mining Ventures & David Cataford, CEO of Champion Iron

Crisis Management & Adaptability

Both companies demonstrated exceptional adaptability during the COVID-19 pandemic, which created unprecedented supply chain disruptions and operational restrictions. Champion Iron's response exemplifies creative problem-solving under pressure. When government lockdowns threatened to halt construction activities, the company established its own COVID-19 testing facility at the project site, enabling continuous operations throughout the pandemic.

This innovation emerged from empowering team members to contribute solutions, with a team member holding a doctorate in biophysics proposing the testing facility concept. The $2 million investment in testing capabilities enabled completion of a $700 million project on schedule and budget despite global disruptions. Cataford explains,

"Giving everybody the same goal, having everybody understand that they can raise up elements and bring internal small innovation and then being able to pick those up and deliver on them is really what set us apart." 

The pandemic also highlighted the importance of supplier relationships and supply chain management. Both companies emphasize developing long-term partnerships with suppliers and contractors, ensuring mutual benefit rather than attempting to minimize costs through aggressive contract terms that might compromise supplier performance or sustainability.

Financial Strategy & Stakeholder Management

Successful project development requires appropriate financing strategies that align with project characteristics and market conditions. G Mining's financing approach for the Tocantinzinho project involved streaming partnerships with Franco-Nevada, providing low-cost capital while preserving equity for future growth. The company maintained strategic relationships with long-term shareholders like Lundin Mining, providing stability during development phases.

Champion Iron's approach emphasizes management alignment with shareholder interests. Cataford describes investing his entire personal wealth in the company, creating strong incentives for project success beyond typical employment relationships. 

"I'm not managing other people's money. Obviously a large portion was other people's money, but I'm managing my own as well.”

Both companies address investor skepticism regarding development projects, acknowledging that institutional investors often apply additional risk discounts to development-stage companies due to industry-wide cost overrun experiences. This skepticism creates opportunities for companies that can consistently deliver projects on time and budget, as successful execution generates substantial value creation when projects transition from development to production phases.

Operational Philosophy & Culture

The executives emphasize creating transparent cultures that encourage immediate problem identification and resolution rather than blame assignment. Cataford stresses the importance of avoiding siloed approaches where departments protect individual budgets at the expense of overall project objectives. 

"You need to make sure that everybody understands the mission and the vision of the project and that nobody's scared of raising a flag and saying, 'I screwed this up.’”

This transparency extends to board and shareholder communications, with both companies maintaining honest reporting about project challenges and solutions rather than attempting to hide problems until they become critical. The approach builds stakeholder trust and enables earlier intervention when issues arise.

Both companies reject the "too much control" paradigm, instead empowering team members to make appropriate decisions within their expertise areas while maintaining necessary oversight systems. This balance requires hiring skilled personnel and providing clear guidance on decision-making authority while avoiding micromanagement that slows progress and reduces employee satisfaction.

Key Takeaways & Industry Implications

The discussion reveals that successful mine development depends primarily on fundamental management principles rather than technological innovations or financial engineering. Both companies demonstrate that consistent execution of proven methodologies, supported by appropriate team structures and transparent communication, enables successful project delivery even during challenging market conditions.

The emphasis on proven technologies over innovation reflects mature risk management approaches that prioritize operational reliability over potential optimization benefits. This conservative stance may limit theoretical performance improvements but significantly reduces execution risks that have plagued many recent mining projects.

Their success during the COVID-19 pandemic illustrates the value of adaptable organizational cultures that can respond creatively to unexpected challenges while maintaining focus on core project objectives. The ability to implement solutions like on-site testing facilities demonstrates how empowered teams can develop innovative approaches to operational problems without compromising overall project risk profiles.

For investors, these companies represent examples of development-stage mining companies that have successfully navigated the challenges that have caused significant value destruction elsewhere in the industry. Their track records provide confidence that systematic approaches to project development can generate substantial returns when executed properly, despite the inherent risks in mining project development.