Can you provide highlights and milestones for 2023 and 2024?

In late 2022, we were at our peak. We faced challenges in 2023 due to the shutdown of Jerritt Canyon and Idaho Cobalt. However, we managed to stabilize our operations, focusing on major clients, particularly Nevada Gold Mines and I-80 Gold, and some copper projects. Despite challenges, we have had a stable year and remain focused on the underground mining space in the US.

How has automation advanced in the underground sector?

We employ autonomous mucking and computerized long-hole drilling, where machines execute engineered drill plans. Face drilling is becoming more automated with these systems although human input remains crucial due to varying geological conditions. 

To tackle workforce challenges, we established a training center equipped with ThoroughTec’s Cybermine simulators for underground haul truck operators and muckers. This simulator allows trainees to practice in a safe environment, experiencing real-world scenarios, including emergencies, without any risk. 

Our primary focus is on safety; we develop a safety culture through comprehensive onboarding and convergence training. Although we have only used the training center for about seven months, we are already noticing positive changes in the trainees.

How do rock characteristics change and the importance of understanding them?

The rock varies significantly from state to state and across different regions, such as the basin and range compared to the Rockies, affecting rock composition. We work with openings averaging 300 square feet. Our team drills holes for explosives and rock bolt installations, gaining insights into the rock's characteristics through the drilling process. They might encounter hidden features, like a clay seam just three feet away, which are not visible. Their expertise allows them to decide on the need for additional ground support or adjustments based on what they uncover while drilling. Understanding the dynamic nature of rock characteristics is crucial for our safety and success, and our miners’ adaptability. Geotechnical engineers, often referred to as "rock doctors," play a key role in our operations.

How does SMD approach sustainability and minimize its environmental impact?

We regularly conduct emissions-based exhaust testing as part of our preventative maintenance program. This involves measuring emissions parameters like carbon monoxide and nitrogen oxides using a tailpipe analyzer, which helps diagnose engine issues.

These tests have become essential for our routine maintenance and are complemented by other initiatives to minimize our environmental footprint. For example, we recycle used oil for road construction and use it for heating at operations, ensuring no oil is disposed of offsite. 

How has becoming 100% employee-owned shaped company culture?

In 2020, we transitioned to a 100% employee-owned company, which coincided with COVID-19. We initially anticipated this change would positively impact our long-term employees, but we faced increased turnover due to broader labor market trends. While our Employee Stock Ownership Plan (ESOP) aims to retain employees with five to 15 years of service as a long-term retirement benefit, heightened turnover post-COVID has diluted its impact, particularly among newer hires who may not engage with these long-term benefits.

Despite these challenges, we believe the ESOP has significant potential for employees committed to a long career with us. We have prioritized creating a work environment where employees feel valued. My management team, especially the superintendents, genuinely care for our staff, which helps foster a pleasant workplace. 

What are the company’s plans?

Our priority is excellent customer service and meeting client needs. Predicting future job opportunities is challenging due to market fluctuations. Recent discussions on cobalt indicate a potential shift towards a two-tiered pricing system, addressing environmental and ethical concerns, especially regarding practices in China and the DRC. Additionally, we have seen market shifts in palladium, with companies like Stillwater reducing operations due to price drops, which also impacted on our cobalt operations. This highlights the industry's uncertainty, so we aim to excel in our core business and remain aware of underground mining trends.

Our approach starts with understanding each client's goals and adapting our strategies accordingly. At times, we may focus on development to access ore bodies, while other times, we concentrate on production to meet annual goals in ounces. This focus can shift throughout the year based on changing circumstances. Our role is to collaborate closely with clients, adapt to their planning processes, and help them achieve their objectives.