Canadian Mining Journal August 2015 by The Northern Miner Group

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www.canadianminingjournal.com

August 2015

CANADA’S

TOP 40 PRODUCERS

A LOOK AT OUR BEST MINERS AND THEIR ‘BLUE RIBBON’ PERFORMANCES

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CANADIAN Mining Journal

AUGUST 2015 VOL. 136, NO. 6

www.canadianminingjournal.com

FEATURES 13 TOP PERFORMERS REPEAT Canadian Mining Journal’s annual look at the top 40 miners shows a repeat performance by the country’s more outstanding companies.

24 COMPANY PROFILE First Quantum Minerals of Vancouver is featured this month.

29 NEW MINING TECHNOLOGY A special section devoted to trends in technology that are helping miners perform more productively and profitably.

39 PROSPECTS AND PROJECTS Canadian Mining Journal takes a look at Prospects and Projects from coast-to-coast in this detailed report that features more than two dozen sites under various stages of development.

48 MAPPING AND SURVEYING An article from McElhanney Consulting Services of Vancouver takes a look at choosing the best mapping and surveying technologies for individual projects.

DEPARTMENTS 5 EDITORIAL With the world’s economy in varying stages of uncertainty, countries around the globe are looking in all directions for financial support, and this month Editor Russell Noble asks: Is it time for Canada to become the 51st State? Would Canadians sell their citizenship to the United States for $1million per person and become an American?

6 FIRST NATIONS A regular column giving perspective to issues of concern.

8 LAW Dawn Whittaker and Alastair Dixon from Norton Rose Fulbright look at the steps required by Canadian mining companies to get a listing on the Johannesburg Stock Exchange.

10 CSR AND MINING A regular column on Corporate Social Responsibility by Michael Torrance, a lawyer in Norton Rose Fulbright’s Toronto office.

52 IN MY MINE(D) Sean Jones, an associate with Borden Ladner Gervais of Vancouver, talks about commitments related to obtaining social licence agreements.

54 UNEARTHING TRENDS This month’s regular column by EY talks about how mining companies can win back their innovative groove.

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CANADA’S

Image: Thinkstock

TOP 40 PRODUCERS

A LOOK AT OUR BEST MINERS

August 2015

ABOUT THE COVER A Blue Ribbon depicts ‘excellence’ and that’s why it’s been chosen to graphically illustrate “Canada’s Top 40” miners.

Coming in August

Canadian Mining Journal’s September issue will take a look at “Gold in Canada.”

AUGUST 2015

Contents.indd 3

For More Information Please visit www.canadianminingjournal.com for regular updates on what's happening with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com

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EDITORIAL

CANADIAN Mining Journal

Is it time for Canada to become the 51st State?

August 2015 Vol. 136 — No. 6 38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5 Tel. (416) 442-5600 Fax (416) 510-5138 www.canadianminingjournal.com

Editor Russell B. Noble 416-510-6742 rnoble@canadianminingjournal.com Field Editor Marilyn Scales 613-270-0213 mscales@canadianminingjournal.com Art Director Stephen Ferrie Production Manager Jessica Jubb Circulation Manager Cindi Holder 416-510-6789, ext. 43544 cholder@glacierbizinfo.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Sales Western Canada, Western U.S.A. and Quebec Joelle Glasroth 416-510-5104 jglasroth@canadianminingjournal.com Toll Free: 1-888-502-3456 ext 2 Group Publisher Anthony Vaccaro Established 1882 Canadian Mining Journal provides articles and information of practical

use to those who work in the technical, administrative and supervisory aspects of exploration, mining and processing in the Canadian mineral exploration and mining industry. Canadian Mining Journal (ISSN 0008-4492) is published 10 times a year by BIG L.P. Mining. BIG is located at 38 Lesmill Rd., Unit 2. Toronto, ON, M3B 2T5. Phone (416) 510-6891. Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved. The contents of this magazine are protected by copyright and may be used only for your personal non-commercial purposes. All other rights are reserved and commercial use is prohibited. To make use of any of this material you must first obtain the permission of the owner of the copyright. For further information please contact Russell Noble at 416-510-6742. Subscriptions — Canada: $47.95 per year; $76.95 for two years. USA: US$60.95 per year. Foreign: US$72.95 per year. Single copies: Canada $10; USA and foreign: US$10. Canadian subscribers must add HST and Provincial tax where necessary. HST registration # 809744071RT001. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-888-502-3456 ext 2; Fax: 416-447-7658; E-mail: cholder@glacierbizinfo.com Mail to: Cindi Holder, BIG Mining LP, 38 Lesmill Rd, Unit 2, Toronto. ON, M3B 2T5. We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund toward our editorial costs.

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By Russell Noble

’ve often wondered how many Canadians would sell their citizenship for $1 million and become an American if the United States ever makes an offer to buy the country and its contents (and that means its people too) for about $35 trillion? I know it’s an absurd and almost unpatriotic notion to even mention, but then again, given that most of Canada’s population are far from the “one per cent” status, I’m willing to bet that a surprising number would say: “Why not, we’re almost part of the United States anyway, and a million bucks is a million bucks.” For a million dollars, most people would do almost anything. Becoming an American citizen for that amount of money would probably be an easy decision to make, because most of us will never see that kind of money in our lifetimes. Furthermore, with the Canadian dollar heading for the 75-cent (U.S.) mark probably before the end of the year, the buyout in U.S. dollars would actually be worth about $1.25 million to each one of us. It’s getting more inviting the more I keep writing, isn’t it? In any event, I know there would be nationalists who would defiantly protest in outrageous and perhaps destructive ways because of their staunch belief in their country, but deep down, I think most Canadians would be tempted to take the money now and worry about the consequences later. And so far Donald Trump hasn’t said too many disparaging things about us, so there’s one less obstacle in our favour. It’s not like the United States is the most dangerous country in the world. So honestly, what’s wrong with becoming an American citizen? Aside from some civil unrest that has given the country a bad reputation lately, the positives far outweigh the negatives by a huge margin, and without going into too many details that make me sound like a spokesperson for the U.S. Chamber of Commerce, I still think that becoming the “51st State” isn’t that bad of an idea. As we all know, Canada (like too many countries today) needs a shot of something (anything) to keep the faith of its citizens (and industries) alive, and even our federal government’s Department of Natural Resources recently made a potentially precedentsetting decision to sell out by waiving its Non-resident Ownership Policy, (circa 1987) that restricts non-Canadian parties from owning more than a 49 per cent stake in certain assets. I’m referring to the feds granting special clearance for Paladin Energy of Australia to develop the six-deposit Michelin uranium project in Labrador’s Central Mineral Belt without a Canadian partner. In other words, the Aussies now hold the rights to mine 91,500 hectares of prime real estate in our backyard, and as Paladin’s Managing Director and CEO John Borshoff said in part: “I sincerely thank the Canadian government for this historic decision….” It’s ‘historic’ alright. First of all, it marks the reversal of a government policy that’s been in place for almost three decades, and secondly, it also marks one of the few times that a decision involving Canada’s natural resources has received approval from the Prime Minister. What’s even more interesting and in keeping with the theme of this editorial is that the government is accepting the fact that foreign ownership is good for Canada. So again I ask, if selling aggregate to Australia is good for Canada, what’s wrong with selling our greatest and most valuable natural resource (ourselves) to the United States? It’s a question that may never be asked beyond here, but it’s something to think about. CMJ

CANADIAN MINING JOURNAL

2015-07-24 8:28 AM

FIRST NATIONS

Mineral Extraction: A seven-generation decision By Ontario Regional Chief Isadore Day, Wiindawtegowinini

ost jurisdictions must consider Indigenous Peoples’ connection to the land when considering resource projects. While they may acknowledge our use and occupation of the land, they miss the deep connections our people have. Developers and regulatory decision makers must have a full understanding of sustainable development from the “natural law” perspective of First Nations in Canada. We also point out the importance of the evolving legal landscape and how that is increasingly recognizing Aboriginal and Treaty rights. It is the only way they can fully recognize and respect inherent and Treaty rights. Firstly, the determinants of “nationhood” anywhere on the planet begins with the basic tenant of “having or occupying” a land-base. Land tenure in Canada creates a legal and moral requirement to ensure that Indigenous communities are considered in all development. This is a reality that is not diminishing, rather getting more complex, with more formal requirements for obtaining consent or approvals. Case law and legal requirements are, and continue to increase in favour of First Nations across this country. It has been an interesting time since this country formally established Canada’s Constitution Act 1982 and entrenched Section 35 (1), which states: “The existing aboriginal and treaty rights of the Aboriginal Peoples of Canada are hereby recognized and affirmed.” Essentially, the Canadian legal framework stemming out of this country’s constitution is the formal basis for “righting” many misconceptions and wrongs that have been imposed on First Nations people where there has been contact and relations built around the concept of sharing the land, in the legal sense. Secondly, and I think the more important to the human concern, is the concept of “Natural Law.” The reality is if two parties are disputing ownership or interest to the land, and there is a forest fire or flood, the land status or usefulness to human interest might well be diminished. Land becomes a squabbling point in legal terms far too often – this is why many First Nations peoples in this country are shifting their attention to the United Nations Declaration on the Rights of Indigenous Peoples, 2007. The UNDRIP, which specifically sets out that states shall recognize the laws and land tenure systems of Indigenous Peoples within any process that pertains to lands, territories and resources. These international standards are in line with the principles of natural law, which serves to influence the development of common law by setting 6|

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out the standards of relations between all peoples, as it pertains to all peoples across the globe. Natural law and human rights are in integral connection toward ensuring that the highest degree of responsibility is considered when it comes to land rights described in the United Nations Declaration on the Rights of Indigenous Peoples; as stated in Article 25: “Indigenous Peoples have the right to maintain and strengthen their distinctive spiritual relationship with their traditionally owned or otherwise occupied and used lands, territories, waters and coastal seas and other resources, and to uphold their responsibilities to future generations in this regard.” This essentially describes that the concept of responsibilities to the “next generation” are rooted in the recognition of rights for those that are yet unborn, which essentially describes the greatest of protections and sustainable use of lands and resources not covered in the Canadian Constitution, 1982. This is just one reason why many First Nations today turn to the arena of international law to protect lands. Interestingly enough, one of the world’s most primitive livelihoods of extraction of the earth’s minerals for various uses and applications, has also been mired in conflict, struggle and loss of human life and destruction of the land. From this premise, one can say: “We’ve been here before, we will make it through this” Perhaps we should think about that in common-sense terms. The mass impact and scale of mining on this planet today is a going concern. Production, impact, remediation, land-use, and the next generation are all synonymous in the questions and concerns that Indigenous Peoples are faced with when reviewing a mining proposal. As I’ve stated in my last column, Chiefs in Ontario are exploring opportunities to implement models of shared jurisdiction in the province of Ontario. The current provincial government, which is mandated to oversee lands, realizes that there is great relevance in the constitutionality of Canada’s relationship with Indigenous Peoples, and that Aboriginal and Treaty rights are a legitimate reality that cannot be avoided. I also suspect that the Ontario government also realizes that there is a growing reality that “consent” is quickly becoming the reality that developers will have to secure in dealing with First Nations, where it concerns mining proposals that may impact their ancestral and treaty lands. We must protect the land, provide for the people and share in the earth’s bounty. That’s what the treaties were about – nothing more, nothing less. CMJ WWW.CANADIANMININGJOURNAL.COM

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LAW

Fast-track listing on JSE for Canadian mining companies By Dawn Whittaker and Alastair Dixon

he Johannesburg Stock Exchange (JSE) implemented a fast-track listing process in September 2014 to assist certain companies in obtaining a secondary listing on the Exchange. The JSE is currently the largest stock exchange on the African continent and one of the top 20 in the world in terms of market capitalization. The JSE promotes the new fast track process as: s An opportunity to access South Africa’s readily available institutional capital at a lower cost by eliminating a second round of administrative preparation for listing s Making it easier for multinational companies already operating in South Africa and the rest of the continent to list on the JSE, using the exchange as a springboard into other countries in Africa s A way for companies to gain a greater profile with international investors trading on the JSE Canadian mining companies have long been at the forefront of operations and investment in Africa. In March 2015, Canada and South Africa signed a Memorandum of Understanding on co-operation in mining and mineral development that aims to encourage increased reciprocal investment in exploration and prospecting activities, with a particular focus on the junior to mid-tier mining sector. In addition, across Africa, Canada has Foreign Investment Protection & Promotion Agreements (FIPAs) currently or soon to be in force with several countries in Africa. FIPAs are bilateral agreements aimed at protecting and promoting foreign investment through legally binding rights and obligations. The objective of each FIPA is to encourage reciprocal investment in each country that is a party to the FIPA.

Fast-track listing process Companies which have had shares admitted to listing for a period of at least 18 months on certain stock exchanges, including the Toronto Stock Exchange or the TSX Venture Exchange, may use the JSE fast-track listing process. Applicants who qualify for the JSE fast-track listing process do not need to produce a pre-listing statement and, instead, need only release a pre-listing announcement. The announcement must contain certain disclosure items that are read in conjunction with the applicant’s latest audited financial statements. Such financial

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statements may be prepared in accordance with the requirements of the applicant’s primary stock exchange listing. Other information, such as competent person’s reports and valuation reports, will also be required. Fast-track applicants will need to comply with the JSE Listings Requirements for secondary listings, including the need to comply with the normal Main Board or Alternative Exchange (known as AltX) listings criteria (unless otherwise agreed to by the JSE). The applicant must have the required spread on its South African share register or make arrangements, to the satisfaction of the JSE, to ensure that sufficient scrip is available on the South African share register. The applicant must also appoint and maintain a sponsor. It is a general requirement for secondary listing on the JSE that a company that is listed on the junior board of a foreign exchange may not apply for a secondary listing on the Main Board of the JSE. Such a company will only be eligible for a secondary listing on the JSE’s Alternative Exchange (AltX) being the JSE’s junior board.

Capital raising, or not Canadian mining companies can obtain a fast-track secondary listing on the JSE with or without a capital raising. For a secondary listing without a capital raising, applicants need to: s Submit a memorandum in support of the applicant’s compliance with the JSE Listings Requirements for a Main Board or AltX listing s Make a pre-listing announcement s Have a suitable sponsor For a secondary listing with a capital raising, companies need to comply with all of the above and consult with the JSE in connection with the raising and, if it is not already registered, register as an external company in South Africa. Africa continues to be a key international market for Canadian miners. Obtaining a fast-track secondary listing on the JSE may assist in making the most of opportunities in Africa. CMJ DAWN WHITTAKER is a Senior Partner, Norton Rose Fulbright, Toronto, and ALASTAIR DIXON is a Director, Norton Rose Fulbright, Johannesburg.

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CSR & MINING

CSR and Transparency By Michael Torrance

t is no surprise that corporate social responsibility (CSR) necessitates a certain degree of openness and transparency with corporate stakeholders – be they local communities, civil society, employees, shareholders or even governments. Nowadays, these transparency obligations are driven by voluntary best practices, financing requirements and law – all of which tie CSR to corporate governance practices. Of importance from a legal perspective, on June 1, 2015, the Extractive Sector Transparency Measures Act (the “ESTMA”) of the Government of Canada came into force with the objective of deterring and detecting corruption relating to payments by extractive sector companies to government entities. This legislation, mirrored in other jurisdictions like the United Kingdom and United States, reflects a movement to legislate transparency that was once viewed as purely voluntary. Transparency best practices promoted by Transparency International or the Extractive Industry Transparency Initiative have informed these legal requirements to a great extent – showing how quickly “nonlaw” can become “law” in the world of CSR. The ESTMA applies to a range of companies involved in the exploration and extraction of oil, gas and minerals. Under the new legislation, annual public reports will be required on payments (such as royalties, taxes and other payments exceeding a threshold of $100,000) to domestic and foreign governments, or other entities tied to governments, including aboriginal governments in Canada in 2017. The legislation is explicit that reports under the ESTMA must be disclosed publicly (for a period of five years) to allow for their use by interested stakeholders. In other words, the transparency required by the ESTMA is not simply in relation to government, but rather to interested stakeholders more broadly. This would include civil society, shareholders and communities in which companies operate. Transparency has been a critical part of CSR well before governments got into the game with legislation. International standards such as the IFC Performance Standards on Environmental & Social Sustainability (endorsed by the Government of Canada in the Enhanced CSR Strategy for the Extractive Sector) have encouraged stakeholder engagement and grievance mechanisms to include transparency towards affected communities, including reporting to affected communities at the project level at least annually. Transparency topics include activities of grievance mechanisms, reporting on greenhouse gas emissions, reporting on environmental and social management issues, and actions taken by companies to resolve local concerns. This reporting is

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designed to initiate discussions with local communities and create a feedback mechanism for project proponents. In project financing contexts, the IFC performance standards are often applied alongside the Equator Principles (“EP”), a voluntary commitment of 80 of the world’s private sector financial institutions. The EP have specific transparency requirements for both financial institution signatories, as well as the companies whose projects they finance. These include a requirement that, for certain higher-risk projects, recipients of loans post summaries of environmental and social impact assessments on their websites, as well as regular monitoring and public reporting where greenhouse gas emissions of a financed project exceed certain thresholds. These transparency obligations will become legal obligations through conditions of financing included in contractual documentation. Transparency is also critical to implemenating guiding principles on business and human rights. Reporting is discussed in Principle 21, which encourages a measure of transparency and accountability by companies vis-à-vis individuals or groups who may be impacted by corporate operations, as well as to other relevant stakeholders, including investors. These expectations do not require an enterprise to publicly reveal all the issues identified in its ongoing assessments of human rights impacts, but where there are significant human rights risks, there is an impetus for disclosure. Clear exceptions are also provided, particularly where disclosure would create risks to affected stakeholders, personnel or impinge upon legitimate requirements of commercial confidentiality. Disclosure under the guiding principles can occur in a variety of forms, including in-person meetings, online dialogues, consultation with affected stakeholders and formal public reports. Similarly the Global Compact requires communication on progress (COP) reports regarding implementation, published annually on the Global Compact website. The COP must include a description of practical actions (i.e., disclosure of any relevant policies, procedures, activities) that the company has taken (or plans to undertake) to implement the Global Compact principles in each of the four issue areas (human rights, labour, environment and anti-corruption) and applying a “report or explain” methodology. As these laws and standards illustrate, transparency reporting is widely viewed as critical to embedding a CSR culture and building trust with stakeholders. CMJ MICHAEL TORRANCE is a lawyer in Northern Rose Fulbright’s Toronto office.

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CA N A D A ’ S

F I R S T

M I N I N G

P U B L I CAT I O N

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BUYERS’ GUIDE 2016

IONN! W I UCT NO OD PR

Don’t miss the opportunity to be listed in our 2016 Buyers’ Guide. You can list your company any time on the online version at: www.canadianminingjournal.com/miningonline

Our website, www.canadianminingjournal.com, averages 32,000 unique visitors per month (Google Analytics). Companies currently listed can also update their listing at:

Your listing will appear live within a couple of days of returning the forms. This information will also be picked-up for the print edition, which will be published in November, 2015. The basic company listing is a complimentary service. Enhancement options are available. Total print distribution is over 12,000, 10,200 to our AAM Audited subscribers and 2,000 at trade shows (Mineral Exploration Roundup, SME Annual Meeting, PDAC Convention and CIM Annual Meeting).

www.canadianminingjournal.com/miningonline They can view their current listing at:

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Deadline for revisions to appear in our November print edition is September 21, 2015.

FOR MORE INFORMATION PLEASE CONTACT: ROBERT SEAGRAVES • rseagraves@canadianminingjournal.com • 1-416-510-6891 JOELLE GLASROTH • jglasroth@canadianminingjournal.com • 1-416-510-5104 Toll Free Canada and USA: 1-888-502-3456 ext. 2 www.canadianminingjournal.com

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CANADA’S TOP 40 A Special Report by Field Editor Marilyn Scales takes an in-depth look at how Canada’s Top 40 mining companies are performing.

AUGUST 2015

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PRODUCTION

PAYS By Marilyn Scales

ast year was tough for the global mining industry. Commodity prices are sagging. Investments are down, especially in junior companies. Projects are being stalled and pushed back as activists are more outspoken. And the Canadian sector has not escaped these realities. Canadaâ&#x20AC;&#x2122;s miners felt the pinch, too. That the top six of our 2015 Top 40 are unchanged from a year earlier is testament to their skills. The top performers are seeing revenues in the billions, and with one exception, they posted net earnings. Only Barrick had a net loss, and that is attributable to the flat price of gold and the many write offs it took in 2014. (Nor was it the only gold producer posting a loss.)Again, potash and fertilizer producer Agrium, is the best of the best Canadian miners with gross revenues of $17.72 billion in 2014 ($19.03 billion in 2013). Not too far behind it is Barrick Gold that recorded sales of $11.26 billion ($13.78 billion). Close behind Barrick at No.3 is Suncor Energyâ&#x20AC;&#x2122;s oil sands operations, with revenues of $10.66 billion ($9.06 billion), a rise from 2013, despite the falling petroleum price in the last half of 2014. The other stalwart oil sands producer, Syncrude, was in fourth place at $9.31 billion ($9.73 billion). The No.5 miner was again Teck Resources, at $8.56 billion ($9.38 billion) for its primarily base metals and coal production. Continued on page 17 AUGUST 2015

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CANADA’S TOP 40 BY GROSS REVENUE (C$ MILLIONS)

2014 Rank Last 2014 year

Company

2013

Year End

Type

Revenue

Net Earnings (loss)

Assets

Revenue

Net Earnings (loss)

Assets

Potash, phosphate

17,718.4

795.2

17,108.0

19,029.7

1,169.3

17,574.7

37,266.9

13,779.7

(11,663.3)

41,192.8

9,063.0

2,040.0

Agrium

Dec. 31

Barrick Gold

Dec. 31

Gold

11,262.9

(2,959.0)

Suncor Energy

Dec. 31

Oil sands (only)

10,658.0

1,776.0

Syncrude Canada (est)

Dec. 31

Oil sands

9,310

1,253.1

27,256.4

9,730.3

2,268.6

27,735.4

Teck Resources

Dec. 31

Base metals, coal

8,599.0

382.0

36,839.0

9,382.0

1,010.0

36,183.0

Potash Corp. of Saskatchewan

Dec. 31

Potash, fertilizer

7,826.5

1,689.6

19,496.4

8,035.5

1,963.5

19,753.8

First Quantum Minerals

Dec. 31

Copper

4,285.8

1,092.6

19,606.7

3,908.2

529.7

15,471.2

—

Turquoise Hill Resources

Dec. 31

Copper

3,882.5

35.0

8,983.9

56.7

(123.2)

9,455.3

Kinross Gold

Dec. 31

Gold

3,812.9

(1,313.0)

9,846.5

4,157.5

(4,116.5)

11,315.37

Goldcorp

Dec. 31

Gold

3,779.6

(2,374.9)

33,717.9

3,969.9

(2,979.9)

32,520.4

Canadian Oil Sands Trust (est)

Dec. 31

Oil sands

3,419.0

460.4

10,014.0

3,565.0

833.5

10,190.0

Cameco Corp.

Dec. 31

Uranium

2,397.5

183.4

8,472.7

2,438.7

317.7

8,039.3

Agnico Eagle Mines

Dec. 31

Gold

2,095.0

91.7

7,555.3

1,809.6

(757.9)

1,752.5

Yamana Gold

Dec. 31

Gold

2,018.6

(1,521.4)

13,792.8

2,027.0

(521.8)

12,551.8

Walter Energy

Dec. 31

Coal

1,548.0

517.7

5,924.7

2,251.3

(394.9)

6,150.0

Eldorado Gold

Dec. 31

Gold

1,174.7

117.2

8,133.0

1,236.4

(649.6)

7,236.2

IamGold

Dec. 31

Gold

1,108.7

(218.8)

4,645.1

1,042.3

946.7

5,070.4

1,046.4

135.7

8,059.4

800.6

150.4

4,875.2

887.4

(136.6)

3,130.9

477.8

(236.5)

3,529.6

Lundin Mining

Dec. 31

Base metals, gold, iron ore

Thompson Creek Metals

Dec. 31

Molybdenum

Centerra Gold

Dec. 31

Gold

840.0

(48.5)

1,792.0

1,038.8

173.5

1,856.5

Dominion Diamond

Jan. 1

Diamonds

827.1

518.3

2,535.2

379.9

38.72

1,856.5

Pan American Silver

Dec. 31

Silver

827.1

(599.3)

2,219.7

907.0

(490.4)

1,881.6

New Gold

Dec. 31

Gold

798.6

(491.81)

4,697.0

857.0

(210.32)

3,044.2

Capstone Mining Corp

Dec. 31

Copper, gold

721.6

(24.6)

2,032.3

365.3

(13.1)

4,622.5

Silver Wheaton

Dec. 31

Silver, gold (streaming)

682.2

219.8

5,090.6

777.2

413.1

2,094.8

Endeavour Mining

Dec. 31

Gold

642.0

361.0

1,060.3

487.6

408.9

4,828.8

—

Nevsun Resources

Dec. 31

Copper, gold

610.5

183.3

1,085.4

183.4

32.2

1,401.4

—

Detour Gold Corporation

Dec. 31

Gold

589.4

(164.5)

3,045.1

169.3

(13.5)

957.9

Hudbay Minerals

Dec. 31

Base metals

560.0

71.9

6,527.5

516.8

(109.3)

2,728.3

B2Gold

Dec. 31

Gold

535.3

(733.0)

2,330.5

598.7

67.3

3,844.0

Franco-Nevada

Dec. 31

Gold, PGE (streaming)

486.6

117.4

3,791.6

441.0

12.9

2,309.7

Sherritt International

Dec. 31

Nickel

455.6

(290.0)

5,283.2

448.5

(660.3)

6,457.8

Taseko Mines

Dec. 31

Gold, copper

371.2

(53.9)

992.5

290.1

(34.8)

970.2

Golden Star Resources

Dec. 31

Gold

361.8

(91.7)

283.9

514.6

(328.4)

358.3

Dundee Precious Metals

Dec. 31

Gold

356.4

(68.0)

1,078.2

379.2

13.2

987.8

Silver Standard Resources

Dec. 31

Silver, gold

330.1

(139.0)

1,084.8

192.2

(253.0)

1,136.0

AuRico Gold

Dec. 31

Gold

320.3

(186.6)

2,510.0

250.4

(145.5)

2,462.4

Semafo

Dec. 31

Gold

318.2

19.5

680.1

249.3

(92.4)

624.3

Crocodile Gold

Dec. 31

Gold

311.0

22.0

281.7

330.9

(425.6)

284.1

China Gold Int'l Resources

Dec. 31

Gold

305.6

37.2

3,013.5

366.1

70.1

2,237.8

16 |

Top 40.indd 16

CANADIAN MINING JOURNAL

WWW.CANADIANMININGJOURNAL.COM

2015-08-14 11:46 AM

THE RUNNERS-UP (C$ MILLIONS) 2014 Rank Last 2014 year 41

Company

2013

Year End

Type

Revenue

Net Earnings (loss)

Assets

Revenue

Net Earnings (loss)

Assets

Gold, silver, base metals

302.06

(246.8)

1,103.1

220.3

(4.7)

880.9

Primero Mining

Dec. 31

Rio Alto Mining

Dec. 31

Gold

297.44

54.8

881.1

313.6

33.9

394.5

Lucara Diamond

Dec. 31

Diamonds

292.1

50.3

348.7

198.6

71.7

271.9

Aura Minerals

Dec. 31

Gold, copper

291.9

(157.2)

197.5

364.0

(74.2)

351.5

Teranga Gold

Dec. 31

Gold

286.7

24.5

798.9

327.7

65.7

691.5

First Majestic Silver

Dec. 31

Silver

270.1

(67.5)

848.4

276.4

28.8

940.5

—

Copper Mountain Mining

Dec. 31

Copper, gold

265.7

(22.5)

692.7

233.1

(3.4)

663.1

Lake Shore Gold

Dec. 31

Gold

256.1

23.6

619.7

192.6

(233.5)

597.9

Atlatsa Resources

Dec. 31

Platinum

237.4

(49.5)

720.8

195.6

99.9

773.6

Endeavour Silver

Dec. 31

Silver

216.6

(82.0)

321.6

304.5

(98.5)

403.6

—

Fortuna Silver Mines

Dec. 31

Silver, gold

191.4

17.2

396.3

151.1

(21.0)

332.4

189.9

12.5

467.0

157.9

(41.9)

485.1

—

Sierra Metals

Dec. 31

Base & precious metals

Alamos Gold Inc.

Dec. 31

Gold

186.9

(2.1)

967.5

310.4

42.7

987.8

—

Argonaut Gold Inc.

Dec. 31

Gold

182.9

(4.6)

997.3

181.6

5.1

1,036.3

Dec. 31

Gold, silver, base metals

174.7

99.9

963.2

nil

(72.2)

971.6

—

Tahoe Resources Inc.

And because it remained in sixth place, we note Potash Corp. of Saskatchewan, among the world leaders in potash and phosphates for fertilizer. It had 2014 revenues of $7.83 billion ($8.04 billion). A look at some of the numbers by commodity produced reveals a great deal about the markets. Let us start with gold. Gold started 2014 at US$1,225 per ounce, and it finished the year at US$1,164.25. There was a price spike in March to US$1,385, but it was pretty much downhill after that. The results of our gold producers reflect that reality. More gold producers than not saw revenues fall from 2013 to 2014. Some of those losses were substantial, such as Walter Energy (-31.2%) no thanks to the falling price of coal. Some were tiny, such as Yamana Gold (-0.4%), which benefitted from acquiring the

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Canadian Malartic gold mine in Quebec. Yamana’s partner, Agnico Eagle Mines, saw revenues rise by 15.8% thanks to its half of the same mine and excellent results from the Goldex mine, also in Quebec. The gold miner with the greatest year-over-year increase in revenues was Detour Gold (248.1%), thanks to the first full year of production at the Detour Lake open-pit mine in Ontario. Among Canadian miners that are primarily producers of base metals, all but one reported revenue gains, and it seems likely that Teck Resources fell -8.3% due largely to the coal component of its business. The greatest gainer was Turquoise Hill Resources at 6,747.4%, as its Oyu Tolgoi copper mine in Mongolia hit its stride. Other base metal gainers include Nevsun Resources (232.9%), having transitioned the Bisha mine in Eritrea from gold to cop-

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| 17

2015-08-14 11:46 AM

REVENUE AS % OF ASSETS (C$ MILLIONS) Rank

Company

Type

2014 Revenue

2014 Assets

Revenue as % of Assets

Golden Star Resources

Gold

361.8

283.9

127.4%

Crocodile Gold

Gold

311.0

281.7

110.4%

Agrium

Potash, phosphate

17,718.4

17,108.0

103.5%

Endeavour Mining

Gold

642.0

1,060.3

60.5%

27 20

Nevsun Resources Centerra Gold

Copper, gold Gold

610.5 840.0

1,085.4 1,792.0

56.2% 46.9%

Semafo

46.8%

Turquoise Hill Resources

Potash Corp. of Saskatchewan

Gold

318.2

680.1

Copper

3,882.5

8,983.9

43.2%

Potash, fertilizer

7,826.5

19,496.4

40.1%

Kinross Gold

Gold

3,812.9

9,846.5

38.7%

Taseko Mines

Gold, copper

371.2

992.5

37.4%

Pan American Silver

Silver

827.1

2,219.7

37.3%

Capstone Mining Corp

Copper, gold

721.6

2,032.3

35.5%

Syncrude Canada (est)

Oil sands

9,310

27,256.4

34.2%

Canadian Oil Sands Trust (est)

Oil sands

3,419.0

10,014.0

34.1%

Dundee Precious Metals

Gold

356.4

1,078.2

33.1%

Dominion Diamond

Diamonds

827.1

2,535.2

32.6%

Silver Standard Resources

Silver, gold

330.1

1,084.8

30.4%

Barrick Gold

Gold

11,262.9

37,266.9

30.2%

Cameco Corp.

Uranium

2,397.5

8,472.7

28.3%

Agnico Eagle Mines

Gold

2,095.0

7,555.3

27.7%

Walter Energy

Coal

1,548.0

5,924.7

26.1%

IamGold

Gold

1,108.7

4,645.1

23.9%

Teck Resources

Base metals, coal

8,599.0

36,839.0

23.3%

Thompson Creek Metals

Molybdenum

887.4

3,130.9

23.3%

B2Gold

Gold

535.3

2,330.5

23.0%

First Quantum Minerals

Copper

4,285.8

19,606.7

21.9%

Detour Gold Corporation

Gold

589.4

3,045.1

19.4%

per in late 2013; Capstone Mining (97.5%), with its purchase of Pinto Valley in Nevada, just as development ended. Lundin Mining (30.7%) that acquired an interest in the Candelaria iron-copper mine in 2014, and an interest in the Tenke Fungurume copper mine in late 2013; Taseko Mines (28.0%), with the Gibraltar copper mill expansion in British Columbia; First Quantum Minerals (9.7%) which will need considerable cash as it continues the Cobre Panama development; and Hudbay Minerals (8.4%), which opened its Lalor zinc-gold and Reed copper mine in Manitoba. The steep decline in the price of oil took a toll on the revenues of Canadian Oil Sands Trust and Syncrude, where revenues declined 4.1% and 4.3%, respectively. However, the oil sands operations of Suncor Energy bucked that trend, finishing 2014 with 17.6% higher revenues than 2013. The company focused heavily on improving maintenance and reliability in the oil sands, notably boosting Firebag in situ production over its 180,000 bbl/d nameplate capacity. Congratulations, also, to the 15 companies on our runners-up list. Five made the list for the first time â&#x20AC;&#x201C; Copper Mountain Mining, Fortuna Silver Mines, Sierra

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Top 40.indd 18

CANADIAN MINING JOURNAL

WWW.CANADIANMININGJOURNAL.COM

2015-08-14 11:46 AM

TOP EARNERS (C$ MILLIONS) Rank

Company

Dominion Diamond

Franco-Nevada

Nevsun Resources

First Quantum Minerals

Lundin Mining

Endeavour Mining

Type

2014 Net Earnings (Loss)

2013 Net Earnings (Loss)

Earnings Change 2014/2013

Diamonds

518.3

38.72

+1,338.6%

Gold, PGE (streaming)

117.4

12.9

+910.0

Copper, gold

183.3

32.2

+569.3

Copper

1,092.6

529.7

+206.3%

Base metals, gold, iron ore

135.7

150.4

-9.8%

Gold

361.0

408.9

-11.7%

Suncor Energy

Oil sands (only)

1,776.0

2,040.0

-12.9%

Potash Corp. of Saskatchewan

Potash, fertilizer

1,689.6

1,963.5

-13.9%

Agrium

Potash, phosphate

795.2

1,169.3

-32.0%

Cameco Corp.

Uranium

183.4

317.7

-42.3%

Syncrude Canada (est)

Oil sands

1,253.1

2,268.6

-44.8%

Silver Wheaton

Silver, gold (streaming)

219.8

413.1

-46.8%

China Gold Int'l Resources

Gold

37.2

70.1

-46.9%

Canadian Oil Sands Trust (est)

Oil sands

460.4

833.5

-55.3%

Teck Resources

Base metals, coal

382.0

1,010.0

-62.2%

Metals, Argonaut Gold and Tahoe Resources. They are producers of both precious and base metals. These companies either put a new property into production (Copper Mountain) or completed mining and milling expansions (Fortuna). Another measure of the successful Canadian mining company might be to plot earnings against revenues, in other words look at how much of the money coming in stays with the company and its shareholders. Dominion Diamonds leads that table with an earnings-to-revenue correlation of 62.7%. Readers are reminded that Dominionâ&#x20AC;&#x2122;s year-end was Jan. 1, 2014. The results reflect an uptick in rough diamond prices during 2013 as well as the fact that stones from the Ekati and Diavik mines command a hefty premium. Endeavour Mining (56.2%) and Agnico Eagle (43.8%) both retained a fair share of revenues. So did Walter Energy

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Top 40.indd 19

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| 19

2015-08-14 11:46 AM

TOP ASSET GAINERS (C$ MILLIONS) Rank

Company

Type

2014 Assets

2013 Assets

Asset change 2014/2013

Gold

7,555.3

1,752.5

+331.1%

Base metals

6,527.5

3,844.0

+69.8%

Base metals, gold, iron ore

8,059.4

4,875.2

+65.3%

Diamonds

2,535.2

1,881.6

+34.7%

Copper

19,606.7

15,471.2

+25.7%

Copper, gold

1,085.4

957.9

+13.3%

Agnico Eagle Mines

Hudbay Minerals

Lundin Mining

Dominion Diamond

First Quantum Minerals

Nevsun Resources

Franco-Nevada

Gold, PGE (streaming)

3,791.6

3,349.4

+13.2%

Eldorado Gold

Gold

8,133.0

7,236.2

+12.4%

Detour Gold Corporation

Gold

3,045.1

2,728.3

+11.6%

Yamana Gold

Gold

13,792.8

12,551.8

+9.2%

Dundee Precious Metals

Gold

1,078.2

987.8

+9.2%

Cameco Corp.

Uranium

8,472.7

8,039.3

+5.4%

(33.4%), Silver Wheaton (32.2%), Nevsun Resources (30.0%) and Franco-Nevada (25.5%). Interestingly, Silver Wheaton and Franco-Nevada are precious metals streaming companies. They lack the expenses associated with operating mines, mills and other facilities, often in difficult corners of the world. The successful asset growers deserve mention as well. They either bought into producing mines (Agnico Eagle +331.1% and Lundin Mining +69.8%), or their new mines reached production (Hudbay Minerals +68.9%). So now you have a snapshot of Canada’s Top 40 miners. They earned the designation by measurement of their gross revenues, but there are several other comparisons by which to define success. Please have a look at not only the Top 40, but the runners-up and rankings by earnings, assets and various comparisons. CMJ

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CANADIAN MINING JOURNAL

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2015-08-18 9:26 AM

TOP REVENUE GAINERS (C$ MILLIONS) Rank

Company

Type

2014 Revenue

2013 Revenue

Revenue Change 2014/2013

Turquoise Hill Resources

Copper

3,882.5

56.7

+6,747.4%

Detour Gold Corporation

Gold

589.4

169.3

+248.1%

Nevsun Resources

Copper, gold

610.5

183.4

+232.9%

Dominion Diamond

Diamonds

827.1

379.9

+117.7%

Capstone Mining Corp

Copper, gold

721.6

365.3

+97.5%

Thompson Creek Metals

Molybdenum

887.4

477.8

+85.7%

Silver Standard Resources

Silver, gold

330.1

192.2

+71.7%

Endeavour Mining

Gold

642.0

487.6

+31.7%

1,046.4

800.6

+30.7%

Lundin Mining

Base metals, gold, iron ore

Taseko Mines

Gold, copper

371.2

290.1

+28.0%

AuRico Gold

Gold

320.3

250.4

+27.9%

Semafo Inc.

Suncor Energy

Agnico Eagle Mines

Gold

318.2

249.3

+27.6%

Oil sands (only)

10,658.0

9,063.0

+17.6%

Gold

2,095.0

1,809.6

+15.8%

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| 21

2015-08-14 11:46 AM

EARNINGS AS % OF REVENUE (C$ MILLIONS) Rank

Company

Type

2014 Revenue

2014 Net Earnings (Loss)

Earnings as % of Revenue

Dominion Diamond

Diamonds

827.1

518.3

62.7%

Endeavour Mining

Gold

642.0

361.0

56.2%

Agnico Eagle Mines

Gold

2,095.0

91.7

43.8%

Walter Energy

Coal

1,548.0

517.7

33.4%

Silver Wheaton

Silver, gold (streaming)

682.2

219.8

32.2%

Nevsun Resources

Copper, gold

610.5

183.3

30.0%

Copper

4,285.8

1,092.6

25.5%

Gold, PGE (streaming)

486.6

117.4

24.1%

First Quantum Minerals

Franco-Nevada

Potash Corp. of Saskatchewan

Potash, fertilizer

7,826.5

1,689.6

21.6%

Suncor Energy

Oil sands (only)

10,658.0

1,776.0

16.7%

Oil sands

9,310.0

1,253.1

13.5%

Oil sands Base metals, gold, iron ore Base metals

3,419.0

460.4

13.5%

1,046.4

135.7

13.0%

560.0

71.9

12.8%

Syncrude Canada (est)

Canadian Oil Sands Trust (est)

Lundin Mining

Hudbay Minerals

China Gold Int'l Resources

Gold

305.6

37.2

12.2%

Eldorado Gold

Gold

1,174.7

117.2

10.0%

Cameco Corp.

Uranium

2,397.5

183.4

7.6%

Crocodile Gold

Gold

311.0

22.0

7.1%

Semafo

Gold

318.2

19.5

6.1%

Who is eligible for the Top 40? Determining a list of Canada’s Top 40 mining companies takes time and research. We examine financial statements, annual reports and other public information for almost 100 separate companies.

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Top 40.indd 22

CANADIAN MINING JOURNAL

We keep in mind that eligible companies must meet two of the following three criteria: s Companies that are traded on a Canadian stock exchange. s Companies that are domiciled in Canada. s Companies that own or have a significant equity interest in a producing mine in Canada. Companies with a project in the advanced development stage may also be considered. For example, a company with its head office in Toronto and its stock trading on the TSX or TSX-V would meet the above criteria even if all its producing mines are offshore. Companies with foreign head offices, and that do not trade on a Canadian exchange, will not make the Top 40 list even if they have substantial mining assets in this country. For the 2014 calendar year, the Bank of Canada reported that the average Canadian:U.S. dollar exchange rate was C$1.10:US$1.00. Results reported in greenbacks have been converted to loonies at that rate. We make every effort to include all eligible companies. If you believe your enterprise should be listed among the Top 40, please write to the author at MScales@CanadianMiningJournal.com.

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2015-08-14 11:46 AM

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In the last year Barrick Gold (ABX-T, ABX-N) has announced a multi-billion dollar overrun at its flagship development project in Chile, MEXIC taken aO $3.8-billion charge Commentary El Tigre Silver on a highly criticized acquisition, Rainforest reclamation Sees a bright future changed its chief executive officer done right in Brazil in old tailings share price sliced in 4 20 and seen its 11-15 $3.50 • april 29-may 5, 2013 • VOl. 99, NO. 11 • SiNCE 1915 half. So it was no great surprise that eight funds who are invested in the gold major formally protested the company’s decision to offer cochairman John Thornton an “unprecedented” signing bonus of $11.9 million. But Barrick founder and chairBy Gwen Preston in vancouver The group of seven Canadian man Peter Munk vigorously deand trish saywell in toronto pension funds and one internaIn the last year Barrick Gold fended Barrick’s decision at the (ABX-T, ABX-N) has announced a company’s annual general meeting tional investment fund say the multi-billion dollar overrun at its on April 24. “I convinced the board,” he told flagship development project in signing bonus, which would bring Chile, taken a $3.8-billion charge the standing-room-only crowd at Thornton’s total compensation on a highly criticized acquisition, the Metro Toronto Convention changed its chief executive officer Centre. “If you want to give anyfor 2012 to $17 million, is a Canaand seen its share price sliced in one hell, give it to me.” dian record. Munk argued that the new parhalf. So it was no great surprise that adigm of mounting resource na“This compensation is inconeight funds who are invested in the tionalism requires a brand-new gold major formally protested the approach to government consistent with the governance princompany’s decision to offer co- tacts. And he said that the chalciple of pay-for-performance chairman John Thornton an “un- lenges of protecting the compaprecedented” signing bonus of ny’s assets — “90% of which, to and is therefore disproportionthe tune of $40 billion, are in 23 $11.9 million. and sets a troubling preceThe group of seven Canadian different countries” — meant that the past-producing pit at Paramount Gold and Silver’s Sleeper gold-silver project in ate Nevada. pension funds and one interna- the company needed someone of dent in Canadian capital martional investment fund say the Thornton’s exceptional calibre signing bonus, which would bring and “unique credentials,” leverSleeper was one of the lowest-cost Sleeper lies within western kets,” thethegroup said in a Site ViSit Thornton’s total compensation age and access to some of the gold mines in the world, and Para- reaches of the northern Nevada statement. Asthea Slumgroup these funds for 2012 to $17 million, is a Cana- world’s most important power mount believes the old mine has a rift, specifically along By matthew keevil brokers. dian record. bering Hills, which consists of WINNEMUCCA, NEV. — For Nev- robust future. collectively manage over $900 “We believe that pay should be ada-based explorer Paramount “This compensation is inconSipping coffee inside Para- Mesozoic meta-sedimentary rocks sistent with the governance prin- tailored to achievements, that pay Gold and Silver (PZG-T, PZG-X), mount’s headquarters in the min- of billion the Auld Lang group and inSyne assets. TSX-V:RRI

Pages

Newstrike

Knowledge is Golden™ www.rivres.com

11-15

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Four muy silver stockcaliente picks Guerrero

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How Mexico mantle as a top reclaimed its mining nation April 29-May

BY ALISHA

To discern HIYATE the winners crowded Price target: field from holding of companiesa (Campbell) $3.55 (Doulis); mines projects and $4.25 Rating: in Mexico, development Miner The Northern SpeculativeOutperform asked (Doulis); lysts, Nicholastwo mining buy (Campbell) Recent price: naccord Campbell ana- ing $2.11; 52-week range: of CaDoulis Genuity and $1.55 to tradof $2.96 Christos for their Stonecap Securities, Both analysts country. best stock picked nior SilverCrest bets in resilient the SVLC-X) While juthe analysts’ Mines have all as one (SVL-V, price Mexico-focused of their because been lowered targets favourite The company stocks. recently metals of the drop heap-leach in precious prices, put the they believe picks will open-pit, Santa mine in northwest Elena gold-silver their companies.outperform state into their peer Mexico’s production Sonora This year, in July 2011. churn out SilverCrest expects 2.4 million silver (579,000 equivalent to oz. silver oz. gold) oz. and 33,500 per oz. at a cash cost silver, of US$8.50 with production creasing to 4.6 million inSee STOCK equivalent

5, 2013

NEWSTRIKE

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Mines Analysts: Christos cap Securities; Doulis, StoneNicholas Canaccord Campbell, Genuity

Endeavour Bradford Silver’s shares his Cooke recipe

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Barrick investors revolt against $11.9m bonus

Page 14

A drill site at MAG Silver’s flagship Juanicipio silver property BY in Zacatecas “There VIRGINIA HEFFERNAN is state, Mexico. BY GWEN litically, support for VANCOUVER PRESTON more exploration the geology mining poMAG SILVER the people CEO of — any other is excellent, Endeavour spending EndeavourAs founder are incredibly and the and T, EXK-N), president try in 2012,Latin American than is Silver food ton are friendly likely a big part Godfrey WalWith theseis delicious.” according a company Bradford Cooke(EDR- Earlier counbased to come. producers SNL Metals to Halifaxsuperlatives, sulting that At least leads this year, of the answer. small, Group, geologist Miner — Fortuna three defunct has turned Mines Economics The Northern capturing consums up sat down two mines Peter Mexican (FVI-T, total an idea into with Cooke Capstone FSM-N), Silver in Mexicowhy he is still Megaw metalsworldwideabout 6% of the silver of how erations large and profitable to a rural ton, working in just after per; and Mining (CS-T),silver; kid from get cades, explorationnon-ferrous op- izingAlta., became eight With the $21.5 billion. Hindespite almost four a leader cop(AEM-T, Agnico-Eagle budget Mexico’s purchase years. derelated derachieving in revitalAEM-N), of said violence frequent drugsilver sector. Mines Mining of a third protests. and companies gold — they are mine, unplans to pected Endeavour ‘I got hooked’ have Megaw, anti-mining repeat panding considering to invest were International potentially the process president Mexico their In 1976, $7.6 billion ex- ects in 2012, — and Exploration Development of what Cooke in Mexico.portfolio of exsilver majorattract the attention in was of a B.Sc. projthey spentmore than double and co-founderand The attraction with its MAG in geology in his final year of a versity. and high-potential ing to growing Silver in result output is an expert (MAG-T, of ber. the Mexican 2010, accordis partly The marketsat Queen’s Uniof So how land packages. ologists mining Recent the prices. strong precious on MexicanMVG-X), did Endeavour were hot. and has were in such success? chammergers Mexico tions been instrumental Genear-term metal such demand geology and acquisitop s achieve ( is the discovery Bradford il includedM & A ) a c t world’s job offers grads were flooded that Cooke of several cracked v e r p r o d u in the posits Primero i v i t y h a s and at Christmas. cer (P-T, PPP-N) the list there. with silver producing Mining’s of top-10, a n d de- Resources His colleagues See ENDEAVOUR, takeover goldfirst time countries of Cerro must agree in the (CJO-V) d’Alene Page 13 for the industry in 2011. prices and is worth that the security N) bestingMines (CDM-T,Coeur year, have fallen Although it. Mexico risk First CDEsilver hard (FR-T, attracted US$30 was tradingthis AG-N) Majestic Silver in Silver US$1,657per oz. and at (OK-V). its bid for Orko gold per oz. And more 2012, compared at the end at M&A of to US$17 See MEXICO, and

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Photo by MAtthew Keevil

ciple of pay-for-performance and is therefore disproportionate and sets a troubling precedent in Canadian capital markets,” the group said in a statement. As a group these funds collectively manage over $900 billion in assets.

should come after performance,” Munk said. “It was hard to have someone paid on performance if he would not have been able to join to perform. So we had a bit of a chicken and an egg situation . . . sometimes you have to do things See Barrick, Page 3

Edgewater uncovers gold at Corcoesto in Galicia

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By matthew keevil

LA CORUÑA, GALICIA, SPAIN — It has been three years since Vancouver-based Edgewater Exploration (EDW-V) bought the Corcoesto gold project from Lundin Mining (LUN-T) and embarked upon a journey in northwesternmost Spain’s La Coruna province, where mining history dates back more than 4,000 years. Now Edgewater stands poised on the development threshold, having pulled together a gold re-

source in excess of 1 million oz. and putting the finishing touches on a feasibility study slated for release in the fourth quarter. Corcoesto lies at the end of a leisurely drive on well-maintained roads, 36 km southwest of the port city of La Coruna. The route traces alongside the deep blue of the Atlantic Ocean, and through seasonal sandy beach communities marked by the colourful hulls of fishing crafts that sway on the tide. Edgewater’s project sits around 10 km inland from any local agricultural or tourist activities, amongst green hills bristling with thin-trunked eucalyptus trees. “We have excellent government and community support,” comments vice-president exploration Greg Smith during the drive, pointing out that a local mayoral candidate recently won with a platform

there’s a lot to be said for making something old new again. In mid2010 the company picked up the past-producing Sleeper gold-silver mine, which operated from 1986 to 1996, and produced roughly 1.65 million oz. gold and 2.3 million oz. silver during its mine life. At the time

ing town of Winnemucca, vicepresident of exploration Glen van Treek, who joined Paramount after a 10-year stint with Teck Resources, stands to present his geological model and outline Paramount’s exploration strategy going forward.

B2Gold hits new gold at developing Otjikoto mine By Gwen Preston

VANCOUVER — With its list of gold mines having just climbed from two to three following the takeover of CGA Mining and with a fourth mine under construction, B2Gold (BTO-T) expects to churn out more than half a million ounces of gold annually by 2015. It’s a feat that is earning the company growing praise from an industry happy to see an acquisition-based success story amidst so many overpriced and failed deals. And in its latest news B2Gold reports its drills are hitting highgrade gold at a satellite zone at Otjikoto — the mine under construction in Namibia — that could well add years and ounces to the operation. Otjikoto sits 300 km north of the Namibian capital of Windhoek. The project, which B2Gold holds a 92% stake in through a partnership with Namibian EVI Gold, is home

to 29.4 million probable tonnes of open-pit reserves grading 1.42 grams gold per tonne. Open-pit mine construction at Otjikoto kicked off in January, with initial gold production expected in late 2014. Otjikoto’s current reserves support 112,000 oz. gold production annually for 12 years. However, B2Gold believes there is much more gold to discover at the burgeoning mine. To that end, the company has already completed 47 drill holes at the project this year. Thirteen of those holes were collared within the planned Otjikoto open pit to better delineate certain ore shoots, while another six holes were drilled to inform civil engineering studies. The other 28 holes all probed Wolfshag, a known but little-explored gold zone, northeast of the planned pit. Using historic data and a few drill

Cretaceous granitic intrusions. Mineralization at Sleeper falls into four main categories, including: early quartz-pyrite-marcasite stockwork, intermediate silicapyrite-marcasite cemented breccias tied to zones of structural weakness, late-stage zones of highgrade banded quartz veins and post-alluvial, gold-silver deposits in Pliocene gravels. During previous operations all four types of mineralization were mined, with high-grade material passing through a milling circuit, while lower-grade ore was processed via heap leaching. What made Sleeper so strong initially

Edgewater uncovers gold at Corcoesto in Galicia Site ViSit

See ParaMount, Page 2 PM40069240 – PAP Registration #09263

By matthew keevil

THE WORLD’S FIRST SATELLITE MESSENGER. www.findmespot.com

El Tigre Silver 4

Sees a bright future in old tailings

Pages Newstrike

MEXICO

11-15

Capital’s

Ana Paula

gold project

in Mexico’s

Four muy silver stockcaliente picks Guerrero

PICKS,

TSX-V:RRI

How Mexico mantle as a top reclaimed its mining nation April 29-May

5, 2013

NEWSTRIKE

CAPITAL

11-15

SilverCrest

Mines Analysts: Christos cap Securities; Doulis, StoneNicholas Canaccord Campbell, Genuity

Endeavour Bradford Silver’s shares his Cooke recipe

Knowledge is Golden™ www.rivres.com

gold belt.

BY ALISHA

To discern HIYATE the winners crowded Price target: field from holding of companiesa (Campbell) $3.55 (Doulis); mines projects and $4.25 Rating: in Mexico, development Miner The Northern SpeculativeOutperform asked (Doulis); lysts, Nicholastwo mining buy (Campbell) Recent price: naccord Campbell ana- ing $2.11; 52-week range: of CaDoulis Genuity and $1.55 to tradof $2.96 Christos for their Stonecap Both analysts Securities, country. best stock picked nior SilverCrest bets in resilient the SVLC-X) While juthe analysts’ Mines have all as one (SVL-V, price Mexico-focused of their because been lowered targets favourite The company stocks. recently metals of the drop heap-leach in precious prices, put the picks will they believe open-pit, Santa mine in northwest Elena gold-silver their companies.outperform state into their peer Mexico’s production Sonora This year, in July SilverCrest 2011. churn out expects 2.4 million silver (579,000 equivalent to oz. silver oz. gold) oz. and 33,500 per oz. at a cash cost silver, of US$8.50 with production creasing to 4.6 million inSee STOCK equivalent

Page 14

A drill site at MAG Silver’s flagship Juanicipio silver property BY in Zacatecas “There VIRGINIA HEFFERNAN is state, Mexico. BY GWEN litically, support for VANCOUVER PRESTON more exploration the geology mining poMAG SILVER the people CEO of — any other is excellent, Endeavour spending EndeavourAs founder are incredibly and the and T, EXK-N), president try in 2012,Latin American than food Silver ton are friendly a big part Godfrey WalWith theseis delicious.” according a company Bradford Cooke(EDR- Earlier coun- is likely to based SNL Metals to Halifax- producers come. At least superlatives, sulting that leads this year, of the answer. small, Group, geologist Miner — Fortuna three defunct has turned Economics Mines The Northern concapturing sums up sat down two mines Peter Mexican (FVI-T, total an idea into with Cooke Capstone worldwideabout 6% of FSM-N), Silver in Mexicowhy he is still Megaw silver of erations large and profitable the metals to get ton, Alta., how a rural kid working in just after explorationnon-ferrous per; and Mining (CS-T),silver; cades, opfrom Hineight became With the $21.5 billion. despite almost four izing Mexico’s a leader cop(AEM-T, Agnico-Eagle budget purchase years. derelated derachieving in revitalof said AEM-N), violence frequent drugMining silver sector. of a third Mines protests. and companies gold — mine, un- ‘I plans to they are pected Endeavour Megaw, anti-mining have got hooked’ repeat panding considering to invest were International potentially the process president Mexico their In 1976, $7.6 billion ex- ects in 2012, — and Exploration Development of what Cooke in Mexico.portfolio of exsilver majorattract the attention more in was of a B.Sc. projwith its The attraction in geology in his final year MAG Silver and co-founderand ing they spent in than double of a versity. and high-potential growing to result output is an expert (MAG-T, of ber. the Mexican 2010, accordThe marketsat Queen’s is partly of So how land packages. Uniologists mining Recent the on MexicanMVG-X), prices. strong precious did Endeavour were hot. and has were in such success? chammergers Mexico tions been instrumental Genear-term metal such demand geology and acquisitop s achieve ( discovery is the Bradford ilver includedM & A ) a c t world’s job offers grads were flooded that posits Cooke of several in the and Primero i v i t y h a s cracked the p r o d u c e r at Christmas. (P-T, PPP-N) there. with silver producing list of top-10, a n d Mining’s deHis colleagues See ENDEAVOUR, Resources takeover goldfirst time countries must agree of Cerro in the (CJO-V) Page 13 for the industry d’Alene Mines in 2011. prices and is worth that the security Although have N) besting (CDM-T,Coeur it. Mexico risk First Majestic CDE- year, silver fallen hard attracted (FR-T, AG-N) this Silver US$30 per was trading in Silver oz. and (OK-V). its bid for Orko US$1,657 at gold And more per oz. 2012, M&A compared at the end at of to US$17 See MEXICO, and

paramount orchestrates a golden revival at Sleeper An Evolution

in High-Grade

Silver

ExcellonResources.com

Mexico’s

• Market Excellon

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29 2013

Issue.indd

Yet to be

Resources

Inc. 20 Victoria

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Valued

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Ag; 3.11%

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Ontario,

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5:28 PM

Commentary

Rainforest reclamation done right in Brazil $3.50 • april 29-may 5, 2013 • VOl. 99, NO. 11 • SiNCE 1915

and trish saywell in toronto

In the last year Barrick Gold (ABX-T, ABX-N) has announced a multi-billion dollar overrun at its flagship development project in Chile, taken a $3.8-billion charge on a highly criticized acquisition, changed its chief executive officer and seen its share price sliced in half. So it was no great surprise that eight funds who are invested in the gold major formally protested the company’s decision to offer cochairman John Thornton an “unprecedented” signing bonus of $11.9 million. The group of seven Canadian pension funds and one international investment fund say the signing bonus, which would bring Thornton’s total compensation for 2012 to $17 million, is a Canadian record. “This compensation is inconsistent with the governance principle of pay-for-performance and is therefore disproportionate and sets a troubling precedent in Canadian capital markets,” the group said in a statement. As a group these funds collectively manage over $900 billion in assets.

the past-producing pit at Paramount Gold and Silver’s Sleeper gold-silver project in Nevada.

By matthew keevil

Sleeper was one of the lowest-cost gold mines in the world, and Paramount believes the old mine has a robust future. Sipping coffee inside Paramount’s headquarters in the mining town of Winnemucca, vicepresident of exploration Glen van Treek, who joined Paramount after a 10-year stint with Teck Resources, stands to present his geological model and outline Paramount’s exploration strategy going forward.

B2Gold hits new gold at developing Otjikoto mine By Gwen Preston

Sees a bright future in old tailings

By matthew keevil

MEXICO

11-15

Capital’s

Ana Paula

gold project

in Mexico’s

Four muy silver stockcaliente picks Guerrero

Endeavour Bradford Silver’s shares his Cooke recipe

PICKS,

TSX-V:RRI

Knowledge is Golden™ www.rivres.com

gold belt.

How Mexico mantle as a top reclaimed its mining nation April 29-May

5, 2013

NEWSTRIKE

CAPITAL

11-15

SilverCrest

Mines Analysts: Christos cap Securities; Doulis, StoneNicholas Canaccord Campbell, Genuity

An Evolution

in High-Grade

Page 14

Silver

ExcellonResources.com

Mexico’s

• Market Excellon

TNM April

29 2013

Issue.indd

Yet to be

Resources

Inc. 20 Victoria

Street,

Valued

Suite 900,

Ag; 3.11%

Discovery

Toronto,

Ontario,

Highest

Page 12

La Platosa

Grade

Mine

Silver

Pb; 1.69%

in a Rising

Canada

Producer

Zn; 0.075 g/t Au Silver Market

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13-04-24

B2Gold hits new gold at developing

in Galicia Sleeper lies within the western Otjikoto mine reaches of the northern Nevada rift, specifically along the Slumbering Hills, which consists of Mesozoic meta-sedimentary rocks of the Auld Lang Syne group and Cretaceous granitic intrusions. Mineralization at Sleeper falls into four main categories, including: early quartz-pyrite-marcasite stockwork, intermediate silicapyrite-marcasite cemented breccias tied to zones of structural weakness, late-stage zones of highgrade banded quartz veins and post-alluvial, gold-silver deposits in Pliocene gravels. During previous operations all four types of mineralization were mined, with high-grade material passing through a milling circuit, while lower-grade ore was processed via heap leaching. What made Sleeper so strong initially Site ViSit

Pages Newstrike

BY ALISHA To discern HIYATE the winners crowded Price target: field from holding of companiesa (Campbell) $3.55 (Doulis); mines projects and development $4.25 Rating: Miner in Mexico, The SpeculativeOutperform asked Northern lysts, Nicholastwo mining (Doulis); buy (Campbell) Recent price: naccord Campbell ana- ing $2.11; 52-week range: of CaDoulis Genuity and $1.55 to tradof $2.96 Christos for their Stonecap Both analysts Securities, country. best stock picked nior SilverCrest bets in resilient the SVLC-X) While juthe analysts’ Mines have all as one price Mexico-focused of their (SVL-V, because been lowered targets favourite The company stocks. recently metals of the drop heap-leach in precious prices, put the picks will they believe open-pit, Santa mine in northwest Elena gold-silver their companies.outperform state into their peer Mexico’s production Sonora This year, in July 2011. churn out SilverCrest expects 2.4 million silver (579,000 equivalent to oz. silver oz. gold) oz. and 33,500 per oz. at a cash cost silver, of US$8.50 with production creasing to 4.6 million inequivalent See STOCK

paramount orchestrates a golden revival at Sleeper

5:28 PM

But Barrick founder and chairman Peter Munk vigorously defended Barrick’s decision at the company’s annual general meeting on April 24. “I convinced the board,” he told the standing-room-only crowd at the Metro Toronto Convention Centre. “If you want to give anyone hell, give it to me.” Munk argued that the new paradigm of mounting resource nationalism requires a brand-new approach to government contacts. And he said that the challenges of protecting the company’s assets — “90% of which, to the tune of $40 billion, are in 23 Photo by MAtthew Keevil different countries” — meant that the past-producing pit at Paramount Gold and Silver’s Sleeper gold-silver project in Nevada. the company needed someone of Thornton’s exceptional calibre and “unique credentials,” leverSleeper was one of the lowest-cost Sleeper lies within the western Site ViSit age and access to some of the gold mines in the world, and Para- reaches of the northern Nevada world’s most important power mount believes the old mine has a rift, specifically along the SlumBy matthew keevil brokers. bering Hills, which consists of WINNEMUCCA, NEV. — For Nev- robust future. “We believe that pay should be ada-based explorer Paramount Sipping coffee inside Para- Mesozoic meta-sedimentary rocks tailored to achievements, that pay Gold and Silver (PZG-T, PZG-X), mount’s headquarters in the min- of the Auld Lang Syne group and should come after performance,” there’s a lot to be said for making ing town of Winnemucca, vice- Cretaceous granitic intrusions. Munk said. “It was hard to have something old new again. In mid- president of exploration Glen van Mineralization at Sleeper falls into someone paid on performance if he 2010 the company picked up the Treek, who joined Paramount four main categories, including: would not have been able to join to past-producing Sleeper gold-silver after a 10-year stint with Teck Re- early quartz-pyrite-marcasite perform. So we had a bit of a mine, which operated from 1986 to sources, stands to present his geo- stockwork, intermediate silicachicken and an egg situation . . . 1996, and produced roughly 1.65 mil- logical model and outline Para- pyrite-marcasite cemented brecsometimes you to do things Keevil lion oz. gold and 2.3 million oz. silver mount’s exploration strategy cias tied to zones of structural Photo byhave MAtthew weakness, late-stage zones of highduring its mine life. At the time going forward. See Barrick, Page 3 grade banded quartz veins and post-alluvial, gold-silver deposits in Pliocene gravels. During previous operations all four types of mineralization were mined, with high-grade material passing through a milling circuit, while lower-grade ore was processed via heap leaching. What made Sleeper so strong initially See ParaMount, Page 2 to 29.4 million probable tonnes of source in excess of 1 million oz. and By Gwen Preston putting the finishing touches on a VANCOUVER — With its list of open-pit reserves grading 1.42 feasibility study slated for release gold mines having just climbed grams gold per tonne. Open-pit PM40069240 – PAP Registration #09263 in the fourth quarter. from two to three following the mine construction at Otjikoto Corcoesto lies at the end of a lei- takeover of CGA Mining and with kicked off in January, with initial surely drive on well-maintained a fourth mine under construction, gold production expected in late roads, 36 km southwest of the port B2Gold (BTO-T) expects to churn 2014. Otjikoto’s current reserves supcity of La Coruna. out more than half a million ounces The route traces alongside the of gold annually by 2015. It’s a feat port 112,000 oz. gold production deep blue of the Atlantic Ocean, that is earning the company grow- annually for 12 years. However, and through seasonal sandy beach ing praise from an industry happy B2Gold believes there is much communities marked by the to see an acquisition-based success more gold to discover at the burcolourful hulls of fishing crafts story amidst so many overpriced geoning mine. To that end, the company has already completed 47 that sway on the tide. and failed deals. Edgewater’s project sits around And in its latest news B2Gold drill holes at the project this year. Thirteen of those holes were col10 km inland from any local agri- reports its drills are hitting highcultural or tourist activities, grade gold at a satellite zone at lared within the planned Otjikoto amongst green hills bristling with Otjikoto — the mine under con- open pit to better delineate certain thin-trunked eucalyptus trees. struction in Namibia — that could ore shoots, while another six holes “We have excellent government well add years and ounces to the were drilled to inform civil engineering studies. The other 28 holes and community support,” com- operation. ments vice-president exploration Otjikoto sits 300 km north of the all probed Wolfshag, a known but Greg Smith during the drive, point- Namibian capital of Windhoek. little-explored gold zone, northing out that a local mayoral candi- The project, which B2Gold holds a east of the planned pit. Using historic data and a few drill date recently won with a platform 92% stake in through a partnership with Namibian EVI Gold, is home See EdGEwatEr, Page 18 See B2GoLd, Page 3

Edgewater uncovers gold at Corcoesto

Site ViSit WINNEMUCCA, NEV. — For Nevada-based explorer Paramount Gold and Silver (PZG-T, PZG-X), there’s a lot to be said for making something old new again. In mid2010 the company picked up the past-producing Sleeper gold-silver mine, which operated from 1986 to 1996, and produced roughly 1.65 million oz. gold and 2.3 million oz. silver during its mine life. At the time

THE WORLD’S FIRST SATELLITE MESSENGER. www.findmespot.com

El Tigre Silver 4

A drill site at MAG Silver’s flagship Juanicipio silver property BY in Zacatecas “There VIRGINIA HEFFERNAN is state, Mexico. BY GWEN litically, support for VANCOUVER PRESTON more the geology mining MAG SILVER the people po- any exploration CEO of — is excellent, Endeavour spending other EndeavourAs founder are incredibly and the and ton T, EXK-N), president try in 2012,Latin American than is food Silver friendly are a big Godfrey likely (EDRWith theseis delicious.” according a company Bradford counbased to come. Walpart Earlier Cooke producers SNL Metals to Halifaxsuperlatives, sulting that At least leads this year, of the answer. small, Group, geologist Miner — Fortuna three defunct has turned Mines Economics The Northern capturing consums up sat down two an mines Peter Mexican (FVI-T, total into with idea of Capstone FSM-N), Silver in Mexicowhy he is still Megaw metalsworldwideabout 6% of silver erations large and profitable how a rural Cooke to get the per; Mining ton, silver; working in after kid from explorationnon-ferrous cades, and (CS-T), op- izingAlta., became With the just eight years. $21.5 billion. Hindespite almost four a leader cop(AEM-T, Agnico-Eagle budget Mexico’s purchase dederachieving in revital- related violence frequent AEM-N), of said silver sector. Mining Mines of a third drugprotests. and companies gold — they are plans to mine, un- ‘I pected Endeavour Megaw, anti-mining have repeat got hooked’ panding considering to invest were International potentially the process president Mexico their In 1976, $7.6 billion ex- ects in 2012, — and Exploration Development of what Cooke in Mexico.portfolio of exsilver majorattract the attention in was of a B.Sc. projthey spentmore than double and co-founderand with its The attraction MAG in geology in his final year and high-potential of a versity. ing to Silver growing in result output is an expert (MAG-T, of ber. the Mexican 2010, accordThe marketsat Queen’s is partly of So how land packages. Uniologists mining Recent the prices. strong precious on MexicanMVG-X), did Endeavour were hot. and has were in such success? chammergers Mexico tions been instrumental Ge- discovery near-term metal such demand geology and acquisitop s achieve ( is the Bradford il includedM & A ) a c t world’s that job offers grads were Cooke of several cracked v e r p r o d u in the posits Primero i v i t y h a s and at Christmas.flooded with cer (P-T, PPP-N) the list there. silver producing Mining’s of top-10, a n d de- Resources His colleagues See ENDEAVOUR, takeover goldcountries first must agree of Cerro in the (CJO-V) time d’Alene Page 13 for the industry in 2011. prices and is worth that the security Although have N) bestingMines (CDM-T,Coeur it. Mexico fallen year, risk First CDEsilver hard (FR-T, attracted this US $3 0 was tr AG-N) Majestic Silver ading in Silver US$1,657per oz . and (OK-V). its bid for Orko at gold And more per oz. 2012, compared at the end a t M&A of to US$17 See MEXICO, and

Barrick investors revolt against $11.9m bonus By Gwen Preston in vancouver

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THE WORLD’S FIRST SATELLITE MESSENGER. www.findmespot.com

El Tigre Silver 4

Sees a bright future in old tailings

Pages Newstrike

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11-15

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Endeavour Bradford Silver’s shares his Cooke recipe

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BY ALISHA

To discern HIYATE the winners crowded Price field from target: holding of companiesa (Campbell) $3.55 (Doulis); mines projects and development $4.25 Rating: Miner in Mexico, The SpeculativeOutperform asked Northern lysts, Nicholastwo mining (Doulis); buy (Campbell) Recent price: naccord Campbell ana- ing $2.11; 52-week range: of CaDoulis Genuity and $1.55 to tradof $2.96 Christos for their Stonecap Both analysts Securities, country. best stock picked nior SilverCrest bets in resilient the SVLC-X) While juthe analysts’ Mines have all as one Mexico-focused price of their (SVL-V, because been lowered targets favourite The company stocks. recently metals of the drop heap-leach in precious prices, put the picks will they believe open-pit, Santa mine in their northwest Elena gold-silver companies.outperform state into their peer Mexico’s production Sonora This year, in July 2011. churn out SilverCrest expects 2.4 million silver (579,000 equivalent to oz. silver oz. gold) oz. and 33,500 per oz. at a cash cost silver, of US$8.50 with production creasing to 4.6 million inSee STOCK equivalent

Page 14

A drill site at MAG Silver’s flagship Juanicipio silver property BY in Zacatecas “There VIRGINIA HEFFERNAN is state, Mexico. BY GWEN litically, support for VANCOUVER PRESTON more the geology mining MAG SILVER the people po- any exploration CEO of — is excellent, Endeavour spending other EndeavourAs founder are incredibly and the and T, EXK-N), president try in 2012,Latin American than is Silver food ton are friendly likely (EDRWith theseis delicious.” a big part Godfrey Walaccording a company Bradford counbased to come. Earlier Cooke producers SNL Metals to Halifaxsuperlatives, sulting that leads At least this year, of the answer. small, Group, geologist Miner — Fortuna three defunct has turned Mines Economics The Northern capturing consums up sat down two mines Peter Mexican (FVI-T, total into an idea Capstone FSM-N), Silver in Mexicowhy he is still Megaw metalsworldwideabout 6% of silver of how with Cooke to erations large and profitable the per; a rural Mining ton, silver; working in just after explorationnon-ferrous kid from get cades, and (CS-T), eight op- izingAlta., became With the $21.5 billion. despite almost four Hina leader cop(AEM-T, Agnico-Eagle budget purchase years. Mexico’s related dederachieving in revitalAEM-N), of said violence frequent drugMining of a third silver sector. Mines protests. and companies gold — plans to mine, they are un- ‘I pected Endeavour Megaw, anti-mining have got hooked’ repeat panding considering to invest International were potentially the process president Mexico their In 1976, $7.6 billion ex- ects in Exploration Development of — and Cooke in Mexico.portfolio of exsilver majorattract the attention what they 2012, more in was of a B.Sc. projthan double and co-founderand with its The attraction MAG spent in geology in his final year and high-potential of a versity. ing to Silver growing in result is an expert (MAG-T, output of ber. the Mexican 2010, accordThe marketsat Queen’s is partly of So how land packages. Uniologists mining Recent the prices. strong precious on MexicanMVG-X), did Endeavour were hot. and has were in such success? mergers chamMexico tions been instrumental Ge- discovery near-term such demand metal geology and acquisitop s achieve ( is the Bradford il includedM & A ) a c world’s that job offers grads were Cooke of several cracked v e r p r o d u in the posits Primerot i v i t y h a s and at Christmas.flooded with cer (P-T, PPP-N) the list there. silver producing Mining’s of top-10, a n d de- Resources His colleagues See ENDEAVOUR, takeover goldcountries first must agree of Cerro in the (CJO-V) time d’Alene Page 13 for the industry in 2011. prices and is worth that the security Although have N) bestingMines (CDM-T,Coeur it. Mexico fallen yea r, risk First CDEsilver hard (FR-T, attracted US$ 30 wa s tradin this AG-N) Majestic Silver in Silver g US$1,657p er oz . an (OK-V). its bid for Orko d gold a t And more per oz. 2012, M&A compared at the end at of to US$17 See MEXICO, and

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But Barrick founder and chairman Peter Munk vigorously defended Barrick’s decision at the company’s annual general meeting on April 24. “I convinced the board,” he told the standi

the past-producing pit at Paramount Gold and Silver’s Sleeper gold-silver project in Nevada.

Site ViSit By matthew keevil

WINNEMUCCA, NEV. — For Nevada-based explorer Paramount Gold and Silver (PZG-T, PZG-X), there’s a lot to be said for making something old new again. In mid2010 the company picked up the past-producing Sleeper gold-silver mine, which operated from 1986 to 1996, and produced roughly 1.65 million oz. gold and 2.3 million oz. silver during its mine life. At the time

Edgewater uncovers gold at Corcoesto in Galicia source in excess of 1 million oz. and putting the finishing touches on a feasibility study slated for release in the fourth quarter. Corcoesto lies at the end of a leisurely drive on well-maintained roads, 36 km southwest of the port city of La Coruna. The route traces alongside the deep blue of the Atlantic Ocean, and through seasonal sandy beach communities marked by the colourful hulls of fishing crafts that sway on the tide. Edgewater’s project sits around 10 km inland from any local agricultural or tourist activities, amongst green hills bristling with thin-trunked eucalyptus trees. “We have excellent government and community support,” comments vice-president exploration Greg Smith during the drive, pointing out that a local mayoral candidate recently won with a platform See EdGEwatEr, Page 18

B2Gold hits new gold at developing Otjikoto mine By Gwen Preston

Photo by MAtthew Keevil

Sleeper lies within the western reaches of the northern Nevada rift, specifically along the Slumbering Hills, which consists of Mesozoic meta-sedimentary rocks of the Auld Lang Syne group and Cretaceous granitic intrusions. Mineralization at Sleeper falls into four main categories, including: early quartz-pyrite-marcasite stockwork, intermediate silicapyrite-marcasite cemented breccias tied to zones of structural weakness, late-stage zones of highgrade banded quartz veins and post-alluvial, gold-silver deposits in Pliocene gravels. During previous operations all four types of mineralization were mined, with high-grade material passing through a milling circuit, while lower-grade ore was processed via heap leaching. What made Sleeper so strong initially See ParaMount, Page 2 PM40069240 – PAP Registration #09263

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You can almost feel the heat from this smelter at First Quantum Mineralsâ&#x20AC;&#x2122; Guelb Moghrein copper-gold mine in Mauritania, Africa, where 1470 people work.

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CANADIAN MINING JOURNAL

First Quantum.indd 24

WWW.CANADIANMININGJOURNAL.COM

2015-07-23 1:18 PM

COMPANY PROFILE FIRST QUANTUM MINERALS

FOREIGN FED

First Quantum Minerals makes its fortunes by going global By Russell Noble

ead Office for First Quantum Minerals is 543 Granville Street, 14th Floor, Vancouver, but like many Canadian mining companies, that’s primarily for administrative purposes where the mail is sent, so to speak, because most of the company’s business is taking place thousands of kilometres away from the corners of Granville and Burrard Streets in downtown Vancouver. In fact, since July 18, 1996, to be exact, the company has spent almost three decades of its entire existence working far away from its head office and since its well-publicized takeover of Inmet Mining Corporation in 2013, the company now has a sizable representative office on Bay Street in Toronto too. It also gained three operating mines and the Cobre Panama copper project, one of the larger and more important private investments in Panama. With seven offshore mines producing mainly copper, gold, nickel, zinc and platinum, First Quantum Minerals is probably better known to the people of Africa, Europe and Australia than it is to its fellow Canadians.

AUGUST 2015

First Quantum.indd 25

But in Canadian mining circles, that’s not unusual because as we all know, many of Canada’s top mining companies are often more active and recognized offshore because of the personal and professional investments they offer to foreign countries. First Quantum Minerals falls into this category because the company’s mining skills that have helped create entire communities and bolster economies in places where neither existed before their arrival. On a world scale, First Quantum Minerals is not a massive international firm like empires like Barrick or BHP, but with more than 25,000 employees working in Canada and at its seven operating mines in Zambia, Mauritania, Spain, Finland (2), Turkey and Australia plus at major new development projects in Zambia, Panama, Peru and Argentina, the company is now one of the more geographically diversified companies on the globe. And it’s thanks to this global outlook that the company is now poised to become one of the top-five copper producers in the world, with a strategic plan to achieve 1.3-million tonnes per year of copper production capacity within five years. CANADIAN MINING JOURNAL

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2015-07-24 9:36 AM

COMPANY PROFILE FIRST QUANTUM MINERALS

It’s an ambitious goal, but when you look at what the company already has in place in terms of operating mines and production facilities, that 1.3-million tonnes number becomes more realistic. From its Kansanshi copper-gold mine in Zambia, Africa, for example, First Quantum Minerals proudly operates the largest copper mine in Africa, where it is capable of producing approximately 340,000 tonnes of copper and more than 120,000 ounces of gold per year. They’re impressive numbers, but not satisfying enough, because the company is now in the midst of a multi-stage expansion project aimed at increasing its copper output capacity to approximately 400,000 tonnes by the end of this year. Mining at Kansanshi is carried out in two pits using conventional open-pit methods by employing a fleet of hydraulic excavators and haul trucks. Ore treatment is flexible to allow for variation in ore type either through an oxide circuit, a sulphide circuit and a transitional ore “mixed float” circuit. The sulphide ore is treated through crushing, milling and flotation to produce copper in concentrate, while the oxide ore goes through a similar process, plus leaching to produce a sulphidic and gold-bearing flotation concentrate, as well as copper. Approximately 1,700 people work at Kansanshi, and the 26 |

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First Quantum.indd 26

current estimated mine life is 15 years. Farther north on the continent in Mauritania to where First Quantum Minerals’ second African property (the Guelb Moghrein copper-gold mine) is located, is where the company works a single open-pit using hydraulic excavators and haul trucks to mine the ore. Sulphide ore from the pit is treated on-site in a processing plant that produces copper-gold concentrate at a rate of approximately 15,000 tonnes per month at a grade of 22.5 per cent copper, with credit received for gold in the concentrate. The mine employs approximately 1,470 people and the current estimated mine life is seven years. Leaving Africa to take a look at First Quantum Minerals’ activities off of the continent and into Europe reinforces an earlier statement about the company’s scope for global recognition because that’s where four of its seven mines are located. In Spain, the Las Cruces mine is another open-pit and process plant facility the company operates in the Seville province. The mine uses leaching and electrowinning technology to produce copper cathode at a rate of approximately 72,000 tonnes per year. Again, the mine uses conventional open-pit mining methods WWW.CANADIANMININGJOURNAL.COM

2015-07-23 1:18 PM

Aerial view of the Kansanshi mine, the largest copper mine in Africa, where approximately 1700 people work to produce about 340,000 tonnes of copper and more than 120,000 ounces of gold a year. Note the harsh surroundings in the background.

using hydraulic shovels and haul trucks, with drilling and blasting in the lower ore zones. Processing at the metallurgical plant relies on an atmospheric leaching process to recover copper from the chalcocite ore. A unique feature at the Las Cruces’ plant is the use of eight reactors to dissolve the copper under conditions of high temperature and high acidity. The process involves adding oxygen into the reactors to complete the reaction. The feed to the leaching reactors is mine ore that has passed through three stages of crushing and a single stage of grinding. Once leached, the liquid is separated from the ground solids to become the feed for the solvent extraction area. It’s here the copper is passed to an organic solution and then to the electrolyte that feeds the electrowinning cells. The cells produce copper cathodes weighing approximately 50 kg each. An automated crane and stripping machine then harvests and packages the cathodes for shipment. About 250 employees and 650 contractors work at Las Cruces and will do so until the end of the estimated mine life in 2022. On the Black Sea coast of northeastern Turkey, First Quantum Minerals is once again proud to operate the largest underground copper and zinc operation in the country. The Cayeli mine produces copper concentrate, copper and zinc bulk concentrate, and zinc concentrate with a mill capacity of 1.2 million tonnes per year. Unlike the previously mentioned mines, Cayeli’s mine design is based on underground bulk mining methods using delayed backfill to extract ore in a sequential manner. The primary mining method is retreat transverse and longitudinal long hole stoping with paste fill and loose or consolidated waste rock backfill. The stopes are mined in primary, secondary and tertiary sequencing. Ore processing includes three stages of crushing primary and

The Cobre Panama project, one of the company’s larger investments in Panama, came to First Quantum Minerals with the takeover of Inmet Mining Corporation in 2013.

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CANADIAN MINING JOURNAL

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2015-07-23 1:18 PM

COMPANY PROFILE FIRST QUANTUM MINERALS The Ravensthorpe nickel mine in Western Australia at night.

secondary ball mill grinding, conventional flotation using either standard or column cells, and water removal by thickening and pressure filtering to produce copper and zinc concentrates. The current estimated mine life is to 2019 with almost 500 employees. First Quantum Minerals’ most northerly European mines are both located in Finland; one in the central part of the country, and the second in the extreme north about 150km north-northeast of Rovaniemie, the capital of Finish Lapland. Starting in the centre of country with the company’s Pyhasalmi mine, it’s one the older and deeper underground mines in Europe. The mine features a 1450-m deep automatic hoisting shaft and produces copper, zinc and pyrite. The mine uses non-entry, bulk open-stope methods in a primary and secondary sequence. On average, stope size varies from 50,000 tonnes for narrow primary stopes to more than 100,000 tonnes for wider secondary stopes. Milling includes crushing, three-stage grinding, conventional flotation using three separate circuits, and water removal to produce the concentrates. The current estimated mine life is four years. The mine employs 210 people. And now for a look at First Quantum Minerals’ most northerly mine on the globe, its Kevista nickel-copper mine near the tip of Finland. Mining is carried out, and will be for an estimated mine life of another 27 years, in an open pit. Processing is traditional where mined ore is crushed in a primary crusher where product is screened and sent to an autogenous grinding mill media and stockpiled, with mid product to secondary crushing for pebble storage. Copper and nickel ore is recovered in separate flotation circuits and each product is thickened and filtered to produce 28 |

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concentrates stored separately for transport. Two concentrates are produced: a nickel-copper-gold concentrate and a copper-gold concentrate. The copper content in both concentrates produces approximately 17,000 tonnes of copper metal per year. Approximately 290 people work at Kevista. Far from Europe and Africa but clearly on First Quantum Minerals’ list of global achievements is its Ravensthorpe nickel mine in Western Australia, located 550km south-east of Perth. Acquired as a decommissioned nickel operation in 2010, the company has invested in significant modifications to the processing plant and the redesign of the crushing, conveying, storage, reclaim and rejects areas. Operations at the mine involve open-pit mining and beneficiation of nickel laterite ore, pressure acid leaching, atmospheric leaching, counter current decantation, precipitation and filtration to produce a mixed precipitate product containing approximately 40 per cent nickel. Sulphuric acid for the leaching process is produced on site in a 4,400-tonnes-per-day, sulphur-burning, double-absorption acid plant with waste heat being recovered to produce steam through three 18MW steam turbines for the generation of power and to provide heat for the leaching process. Innovation and a commitment to the future are two ingredients for the success of the Ravensthorpe mine and why that its current estimated mine life of 30 years gives hope to its 405 employees. But First Quantum Minerals’ business plan to innovate and commit to its Ravensthorpe mine goes beyond Australia because as we’ve already seen, the company is dedicated to all of its operating mines, and that’s why it has earned a spot on this year “Top 40” for an outstanding performance by a Canadian mining company. Congratulations! CMJ WWW.CANADIANMININGJOURNAL.COM

2015-07-23 1:18 PM

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7/9/2015 11:07:44 AM

2015-07-23 1:20 PM

NEW

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Canadian Mining Journal 38 Lesmill Rd., Unit 2, North York, ON M3B 2T5 Toll Free Canada or USA 1-888-502-3456 ext. 2 Fax (416) 447-7658 www.canadianminingjournal.com

CONTENTS

Editor

Russell Noble 416-510-6742 rnoble@CanadianMiningJournal.com

Art Director

Stephen Ferrie

Production Manager Jessica Jubb

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Cindi Holder 416-510-6789, ext. 43544 cholder@glacierbizinfo.com

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Robert Seagraves 416 510-6891 rseagraves@CanadianMiningJournal.com

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SPECIAL FEATURE: NEW MINING TECHNOLOGY

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NEW MINING TECHNOLOGY

2015-07-23 1:21 PM

from the top A look at how drones are coming into their own within the mining sector By Nicholas Greene

ntil recently, a mental image was like something out of a science fiction novel, but with the growing popularity of unmanned aerial vehicles (UAVs) that quietly fly over remote landscapes, far-removed from human civilization, those images have now become a reality. In fact, by using small, high-resolution cameras attached to the undersides of UAVs, it’s now possible to take snapshot after snapshot, slowly mapping the curves and contours of the terrain, regardless of where it is, and on command, they turn around and head back to base. The information gathered by the UAVs is reviewed, analyzed and often followed shortly thereafter by large rigs filled with mining equipment designed to take the search one step closer to exploration and development. Thanks to the presence of drone technology, more and more mining companies are also saving time and money by using UAVs for remote site inspections. One company that has witnessed this trend is The Sky Guys, Oakville, ON., and as its CEO Adam Sax explains, “We’ve been working with mining companies across the globe and currently we have two strategic partners helping us provide our services: Skycatch out of the U.S. provides us with proprietary data processing, while our Canadian partner Aerobotika offers in-house training, and acts as a partner on international mining projects.” According to Sax, his company has invested into both commercial and military UAVs, hand-picking only the most experienced UAV pilots and teams. Although they specialize in high-rise real estate, their mining-related services are expanding. He says they make a point of working closely with their clients

NEW MINING TECHNOLOGY

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SPECIAL FEATURE: NEW MINING TECHNOLOGY

during the mapping process, training in-house crews and consulting on equipment purchases and lobbying efforts. “Drones are beginning to take flight in the mining industry,” writes Mining Global’s Robert Spence. “The newly adopted technology, which has been utilized for a wide array of mining activities, is taking another step forward. Unmanned aerial vehicles, otherwise known as UAV, are turning the mining sector into an emerging frontier for new technology. In recent years, these miniature helicopters have helped the industry find cheaper and safer ways to map deposit sites and explore for minerals via remote control.” Physical site inspections are gruelling and expensive. You need pilots, you need people capable of recognizing what you’re looking for, and you need to navigate a sea of rules and regulations. With no guarantee that a company will find anything worth mining, it almost isn’t worth the effort. UAVs, on the other hand, enjoy a much less stringent regulatory environment which, in addition to the significant cost savings, make them a far superior alternative to helicopters where surveying and planning is concerned. And with the advent of advanced analysis platforms such as Switzerland’s Pix4D, even the smallest photos can be translated into data. “With our specialized drones, a two-man team can map a region anywhere in the world,” says Sax. “Our state-of-the-art camera equipment allows us to provide clients with ultra-high resolution 2D and 3D maps that they can work with. In addition, we’re able to attach different types of payloads such as infrared and thermal cameras – and all of this at a fraction of the cost of a helicopter flight.” “[UAVs] could be instrumental in mining safety,” notes Promine, citing the firm. “Their wide aerial view will allow them to monitor traffic and note staff infractions, much like a traffic camera on a city street. Quick interventions will improve safety and road conditions, and drones could also assist in rescue operations by delivering necessary supplies quickly and efficiently. Moreover, they could help keep track of a widely dispersed site that might otherwise require enormous time or resources to monitor.” Safety, surveying and planning are only the tip of the iceberg. Only a few short decades from now, we’re likely to see the first automated mines on Earth. Only a few short decades from then, we’ll see them move off Earth. “Technological advances in the development of drones and robots will help create mines of the future in remote locations such as Mongolia that can be directed from NASA-inspired control rooms Hovering over harsh and remote sites makes gathering information much faster and safer.

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A technical attaches a camera in preparation for launching a drone to record the conditions at a client’s property.

in first-world cities in the U.S. and Australia,” writes Bloomberg’s David Stringer. “While drones swarm overhead, the mines of 2030 may also see scuttling robots which map underground chambers to within a millimetre of detail with lasers or use automated drills to separate waste from valuable ore as they burrow into rock. At waste dumps, so-called molecular sponges created from crab shells will be used to extract every last metal particle.” There are challenges to overcome here, of course. The regulatory environment surrounding drone technology is still largely uncertain, and questions of safety at sites where drones and humans work side by side will undoubtedly surface. As with other regulatory challenges, however, these will be overcome with time – and once they are, the mining industry’s going to be catapulted into a new era. “Without a doubt, technology is going to continue to play a larger role over the next 20 years. Drones will become dominant in both the planning and extraction process, while more advanced cameras will allow us to see deeper into the earth’s surface, perhaps even from thousands of miles away,” says Sax. “Looking towards the future, our mission is to become the leading provider in drone services globally. We plan to continue investing in newer and more advanced technology, which will ultimately save time, money, lives and the environment – while at the same time helping move the mining industry forward.” Thanks to drone tech, it almost feels as though our society has entered into the realm of science fiction. But we haven’t. Drones and their valuable applications in mining are all too real. Today, we’re starting with mapping and surveying, but as we move forward into the future, automation is as inevitable as the tides. NMT Nicholas Greene is a Calgary-based writer. NEW MINING TECHNOLOGY

2015-07-24 8:35 AM

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HOORAY FOR DIRTY BOOTS Taking major steps toward production across Canada By Russell Noble

or most companies working claims across Canada, the chances of moving from exploration into production are slim and more likely none, thanks to investors cocooning into a wait and see position. In fact, the prospects for converting promising discoveries past the drilling and into the blasting stages are dismal right now, but like all mining stories, there are a handful of fortunate ones out there still making headlines by claiming “development status” beside their property’s name. And, as we all know, that’s a level of achievement in itself because getting that first shovel into the ground isn’t an overnight achievement; it’s the end result of a countless number of sleepless nights of worrying about being able to move forward. In any event, as mentioned in the headline, only a handful of companies experience the thrill of ‘getting dirty’ and here’s a look at a fortunate few who are getting one step closer to seeing their dreams come true. Starting on Canada’s west coast, Western Correspondent David Godkin provides a look at some of the projects that are active and moving forward.

ARCTOS ANTHRACITE PROJECT Once downward pressure on coal prices eases and global demand for coal rises, we can expect more attention to focus on the Arctos Anthracite Project in northwestern B.C.

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With 125 Mt of run-of-mine coal sitting below the 4000 ha mine site, it’s one of the larger undeveloped deposits of metallurgical coal in the world and driven by a joint ownership deal between Fortune Minerals (50%) and South Korea’s POSCO (50%). In May, the project partners announced they’d sold its interests in the Arctos coal licences to B.C. Rail, but maintain the exclusive right to repurchase the licences for a 10-year period. With $110 million of work completed, including test mining, pilot plant processing and trial cargos, Arctos will transport processed anthracite by rail to Ridley Terminals in Prince Rupert where it will be shipped to global markets. Remaining steps: prove to B.C. Environmental Assessment Office that mine development can be done sustainably. Next: build an additional 147km of rail line from the current terminus to the mine site, all part of an estimated $789 million, three-year capital investment. If everything falls into place by the projected start date in late 2016, the project would have an estimated mine life of twenty five years.

AVANTI KITSAULT MINE (AKM) Equally important to global steel manufacture is molybdenum to produce high-value, stainless and alloy steels ultimately destined for pipelines construction, bridges, storage tanks, etc. With federal and provincial environmental and construction approvals in the bag, Alloycorp Mining Inc. is set to begin annu-

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PROSPECTS & PROJECTS al production of approximately 11,600 tonnes of molybdenum in 2017 and more than 1 million ounces of silver at its Avanti Kitsault Mine (AKM) near British Columbia’s Nass Valley. To do that, the mine plan calls for a conventional truck-andshovel open-pit mining operation, running 365 days a year, underpinned at the outset by a one-billion-dollar investment. Most of the engineering - courtesy of engineering and procurement manager AMEC Foster Wheeler Inc. and Knight Piésold - is completed. So, too, is replacement of the Nass River Bridge and an access road to the mine site in 2014. Run-of-mine ore from the open pit crushed and conveyed to a stockpile will feed a 14 MW SAG mill and passed to a 14 MW ball mill to liberate mineral values from the host rock. Molybdenite will then be recovered by flotation processing into a molybdenum concentrate. Process design includes a concentrator with a nominal capacity of 40,000 tpd, but over designed for a capacity of 45,000 tpd.

DOME MOUNTAIN MINE Like Arctos Anthracite mine, the Dome Mountain Mine will depend upon access to deep water ocean ports in Prince Rupert as well as Kitimat and Stewart to get its product – gold and silver - to global markets. Located approximately 38km due east of the Town of Smithers in northwest British Columbia, the project consists of 42 contiguous mineral claims and one mining lease over a total area of more than 11,000 hectares. As of January 2013, 75 per cent of the underground development needed for full-scale production at Dome Mountain was completed. This included major earth works, water treatment plant, ore crushing and load-out facility, an extensive pipelines system for sediment control water recycling, installation of compressed air, water and ventilation services into the mine. Two more important requirements were announced in February 2014: equipment and infrastructure for on-site milling (e.g., a mill to produce up to 250 tonnes per day); and capital financing from private and institutional source pending permit application approval. Share purchase shareholders’ agreements with Dome Mountain Resources of Canada Inc. in January 2015 will see Metal Mountain Resources Inc. continue as the mine operator.

TULSEQUAH CHIEF PROJECT Legal troubles at the Tulsequah Chief Project on the Tulsequah

River in northwestern B.C. go back nearly two decades, including a trip in 2004 to the Supreme Court of Canada that ruled the owner, the B.C. government, had not consulted sufficiently with local First Nations over the zinc, copper and gold mine’s development. Despite continued legal and regulatory delays, Chieftain Metals won another argument in early 2015 when B.C.’s environment Ministry concluded enough work had taken place to warrant the project’s continued development. Seated atop the Taku River watershed at the B.C./Alaskan border, underground mining and the construction of on-site processing facilities and infrastructure underpin an affirmative feasibility report at the Tulsequah Chief property. With permits for a 2500 t/d operation also under its belt, the company has spent $50 million in purchase costs and absorbed pre-production capital costs of approximately $450 million. Because the mine is so remote, mining personnel from Whitehorse and more distant centres will be flown in or traversed up the Tulsequah River by barge. Grid electric power is unavailable and water only available from adjacent streams. Despite the challenges, Chieftain Metals considers the Tulsequah Chief mine “One of world’s lowest production cost metal projects.”

NEW PROSPERITY PROJECT Everything looked good in early 2014 when B.C.’s Minister of Energy and Mines Bill Bennett voiced support once again for developing the $1.5-billion gold and copper mine located 125km southwest of Williams Lake. With milling operations and facilities in place and designs in hand for an electricity transmission line, rail load-out facility and road access to the proposed open-pit operation, continued mine development seemed like a sure bet. Then, for a second time in 10 years, the axe fell once again wielded by the feds. Citing the potential loss to local First Nations of Little Fish Lake to a 12-square-kilometre, 115-metrehigh tailings pond and possible contamination of other nearby water bodies, Ottawa rejected the mine proposal on environmental grounds. Gone, Taseko said: were 550 direct jobs and $340 million in annual gross domestic product. Better news came June 26, 2014. That’s when the Supreme Court of Canada effectively ruled aboriginal rights and title, a complicating factor in Taseko’s application, did not exist in the area of the New Prosperity Mine. This has meant Taseko can

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re-enter talks with six Tsilhqot’in bands for development of the mine – considered the tenth-largest undeveloped gold-copper deposit in the world. All of this received more support in January of this year when the B.C. government granted a five-year extension to the Environmental Assessment Certificate for development of the mine.

equivalent ounces and an inferred resource of 3.4 million gold equivalent ounces were announced. The equivalent grade is 10 per cent higher than the nearby Kemess underground deposit. Even better, eastern deposit bellies up to existing infrastructure that boasts a 50,000 tonnes/day mill facility, permitted tailings storage and complete access to grid power.

KEMESS UNDERGROUND DEVELOPMENT

KUTCHO

Assuming you need them, make sure you pack your air sickness bags if you plan to travel to this mine. The Kemess Mine is located in North Central B.C., a site that features a 5000-foot airstrip and all weather gravel road. So why the continued interest for a mine closed in 2011? The biggest reason is an indicated resource estimate of more than 136 Mt containing 2.6 million ounces of gold and 860.6 million pounds of copper. In 2011, Northgate Minerals Corporation was also taken over by AuRico Gold, followed quickly by AuRico’s reclamation program to appease environmental interest. Its project proposal: to build an underground mine six kilometres north of Kemess South to produce 105,000 ounces of gold and 44 million pounds of copper annually over 12 years. Existing Infrastructure valued at more than $750 million including full grid power and mill means continued open pit operations (block caving) at the mine site. Earlier this year AuRico Gold Inc.’s attention turned to Kemess East, where an indicated resource of 2.1 million gold

A high-grade copper-zinc development project north of Smithers, B.C., in the Liard mining district, Kutcho had already changed hands several times before Capstone acquired it from Western Keltic in May 2008, and assessed development options there. The eventual objective: to re-scope and redesign a project focused on a smaller, less capital-intensive, high-grade open pit and/or underground projects that could be developed faster than that previously planned. Soon after, Capstone completed a positive preliminary economic assessment and outlined several opportunities for future enhancements. Even before the recommendations of the assessment were received, Capstone started revamping mineral resource estimates at the Esso and Sumac deposits, followed by a successful 10,000-metre diamond drill program. The program was so successful (81 new diamond drill holes and a much higher grade than all earlier models) that the company announced a more robust NI 43-101 compliant mineral resource for the Main deposit in February 2009.

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PROSPECTS & PROJECTS While Capstone is still evaluating its options for the Kutcho project, the proposed mining method includes an underground operation with a 12-year mine life for the property. The mine plan calls for an operating throughput of 2500 t/d, and an average annual production rate of 35 million pounds of copper and 55 million pounds of zinc. Leaving Canada’s west coast and moving next door to Alberta where most of the news in recent months has been on the oil sands, and the challenges companies working there are having, there’s also a better-news story coming from Coalspur Mines Ltd involving its flagship coal project in Alberta.

VISTA COAL PROJECT Coalspur’s main Vista Coal Project, which covers approximately 10,000 hectares and provides a large-scale, surface-mineable, thermal coal development , is located adjacent to CN Rail’s main line and connects directly to B.C.’s Ridley Terminals to provide Coalspur with an essential chain for exporting its coal to Asian Pacific markets. To meet the growing demand from these Asian markets, Coalspur is now preparing to develop the Vista project with first coal anticipated at the end of 2016 at an initial production rate of up to 6.5 mpta (Phase 1) and an eventual run-rate of 12 mpta (Phase 2) over a 30-year mine life. To help ensure a reliable source of coal for years to come, the company also has its Vista South Coal Project, located approxi-

mately 6 kilometres southwest of the main Vista Coal Project, covering about 23,000 hectares. Coalspur says that future drilling on Vista South will provide additional data to define the coal mineralization in the region. Moving now from Alberta and up north of the 60th Parallel into Yukon where mining activity has run the gamut in recent years, two projects: Victoria Gold’s Dublin Gulch Property and North American Tungsten’s Mactung Deposit, are worthy of note.

DUBLIN GULCH AND EAGLE GOLD To start with, the Dublin Gulch property is located approximately 85km by road north northeast of the Village of Mayo in central Yukon and about 500km north of Whitehorse. The property hosts Victoria Gold’s flagship Eagle Gold deposit and multiple other targets at various stages of development. The site hosts the 6.3-million ounce (indicated and inferred) gold deposit. It’s shovel-ready and is the most advanced project in the region, and is on track to be the largest gold mine in the territory. The proposed Eagle gold mine has year-round road access, with a commercial grid power approximately 45 kilometres away. Landing facilities for commercial air transport are located 80 kilometres to the south.

MACTUNG PROJECT Located near the border of Yukon and Northwest Territories in the Selwyn Mountain Range is North America Tungsten’s Mactung Deposit with an Indicated Resource estimate of 33 Mt of tungsten. The project is forecast to run at 2,000 tpd from an underground operation using conventional long-hole plus cut-and-fill mining methods. The ore will be processed into both premium gravity concentrate and a flotation concentrate. The company says the mine life is 11.2 years for the underground mine with the potential to expand by 17 years with an open pit, exploiting near-surface, lower-grade indicated and inferred mineral resources. One step farther east in the Northwest Territories where the potential for exploration and development is unequalled in many other parts of Canada, the following four companies and the projects they’re working on come to the front.

NECHALACHO PROJECT Avalon Rare Metals’ Nechalacho Rare Earth Elements Project, located at Thor Lake in the Mackenzie Mining District, approximately 100km southeast of Yellowknife, is a property comprised of five contiguous mining leases totalling 4,249 hectares and three mineral claims totalling 1,860 hectares. It’s Avalon’s flagship rare metal project, and since acquiring the property in 2005, the company has invested almost C$100 million in developing the property, including more than 42 |

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120,000 m of diamond drilling in 559 holes, resulting in large deposits enriched in heavy rare earths. The company says that mine and processing facilities have been designed to significantly minimize impacts on water, land and air and reduce the project’s carbon footprint. A 10-year binding toll-refining and strategic partnership agreement has been signed with Solvay, a global leader in rare-earth refining, to reduce any perceived risks associated with heavy rare-earth elements.

NICO PROJECT Fortune Minerals Limited is developing its NICO property, a gold-cobalt-bismuth-copper project that will include mining and concentrating ores in the Northwest Territories with further processing at a proposed Saskatchewan Metals Processing Plant. Through this project, NICO is now positioned to stand out as a North American asset dedicated to the process for manufacturing rechargeable batteries used in electric vehicles, and stationary power storage applications such as smart phones, tablets and laptops. The NICO deposit contains open-pit and underground Proven and Probable Mineral Reserves containing 1.1 million ounces of gold, 82 million pounds of cobalt and 102 million pounds of bismuth, at a planned mill throughput of 4,650 tpd. More than $110 million of work has already been conducted at the NICO project.

PRAIRIE CREEK MINE Canadian Zinc’s Prairie Creek Mine is located in the Mackenzie Mountains and is a silver and base metals property already in the advanced stages of development, with substantial resources of high-grade silver, zinc, and lead. Exposures of mineralization vein structures, which overlie thicker stratabound mineralization, both of which are included in the present resource, are known to occur over a distance of 16 km through the property.

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GAHCHO KUE PROJECT The last but possibly the most exciting project to come out of the Northwest Territories in quite some time is Mountain Province Diamonds/De Beers’ Gahcho Kue Project, the largest new diamond mine under development in Canada, if not globally. With the potential to become one of the country’s major highgrade and long-lived diamond properties, the mine is located on a 10,353-acre site located at Kennady Lake, approximately 300km northeast of Yellowknife and 90km from De Beer’s ‘Snap Lake’ diamond mine. The proposed project is expected to mine 3 million tonnes (3 million long tons and 3.3 million short tons) of kimberlite, and to produce 4.5 million carats (900kg) per year over an 11-year mine life. The project consists of a cluster of four diamondiferous kimberlites, three of which have a portable mineral reserve of 35.4 million tonnes grading 1.57 carats per tonne for a total of 55.5 million carats. The final stop on the “North of 60” tour of Canada is Nunavut, where Baffinland Iron Mines’ Mary River Project remains the key mining project in the territory. Here’s a brief look at what’s happening at the mine. AUGUST 2015

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DISCOVER

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PROSPECTS & PROJECTS

IN ACTION

MARY RIVER PROJECT The Mary River Project is on northern Baffin Island, an isolated location where working conditions range from -30 C in the winter and 24-hour darkness from November to January, to 24-hour daylight from May to August, but in continued cool to cold conditions. Aside from the harsh conditions, it’s also home to Baffinland Iron Mines’ property where the company has the potential to mine 3.5 million tonnes per year of iron ore The project has a 21-year mine life. Much farther south in Ontario, where the working conditions are less environmentally challenging, the four following projects are worthy of note.

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The Clavos gold project is a joint venture involving Sage Gold, St. Andrews Goldfields and Abbey Gold. It’s located about 45km northeast of Timmins and 10km by haul road, and consists of 50 contiguous leased and /or patented claims More than 513 surface drill holes totalling 113,434 metres have been punched into the property. Exploration of the property dates back to 1939, with the initial discovery in 1946. The project straddles the contact between the Porcupine Group sedimentary rocks to the south and older ultramafic volcanic rocks to the north.

COCHENOUR PROJECT Farther west in the province in the Red Lake Mining District is where Goldcorp Inc has been working on its Cochenour Project, located just five kilometres west of its flagship operations, Red Lake Gold Mines, and approximately 230km northwest of Dryden. The site is accessible by Highway 105, which heads north from the Trans-Canada Highway and by daily commercial air services that connect the local communities to both Thunder Bay and Winnipeg. The project is located in the core of the Canadian Shield and the company has been working on numerous studies, including geotechnical assessments, infrastructure rationalization and placement, and backfill and material handling; plus intensive exploration this year to upgrade the inferred resources.

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Ontario Graphite’s Kearney Mine, located just off Highway 11 about 20km north of Huntsville near the Town of Kearney, is the site of one the world’s better resources of natural flake graphite, and because of the mine’s proximity to one of the province’s better transportation routes, its location also helps make the mine one of the more accessible projects in Ontario. It’s estimated the Kearney Mine has the potential to process approximately one million tonnes of ore per year while producing about 20,000 tonnes of natural, large flake, high-carbon graphite concentrate. Leaving Ontario and moving east brings us to a host of other projects that are in varying stages of exploration and development, and few projects have received more national coverage than Quebec’s “first diamond mine,” otherwise known as The WWW.CANADIANMININGJOURNAL.COM

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Renard Diamond Project. Eastern Correspondent D’Arcy Jenish starts with a look at the Renard Diamond Project, but doesn’t stop there, as he moves east with a more in-depth look at activities on Canada’s east coast.

RENARD DIAMOND PROJECT Stornoway Diamond Corp’s Renard Project is an advanced project and, according to the company, is set to become Quebec’s first diamond mine. Stornoway began construction of a combined open-pit and underground operation after arranging a $946-million financing in July 2014. The first ore is expected at the plant by late 2016, and full production is slated for mid-2017. Diamond-bearing kimberlite pipes were first discovered in 2001 and Stornoway, of Longueuil, Que., acquired a 50 per cent interest in 2006. The company acquired the balance from a Quebec crown corporation five years later. The deposit is remotely located, some 800km northeast of Montreal and 243km from the town of Chibougamou, but the project fits nicely with the provincial government’s Plan Nord, an ambitious scheme to develop Quebec’s north. In fact, the province and the company combined to build a road from Chibougamou to the mine site, and Stornoway has reached an accord with the James Bay Cree that will ensure their participation. Renard is expected to produce for 11 years, although the company anticipates additional discoveries will extend the life of the mine. It will initially yield 1.6 million carats per year, representing approximately two per cent of global rough diamond supply by value.

CARIBOU MINE AND MILL Vancouver-based Trevali Mining Corp., a zinc-focused base-metal producer, acquired this fully developed polymetallic project in New Brunswick from a previous operator, who had invested approximately $100 million between 2006 and 2008 to overhaul and modernize the mine infrastructure and processing plant. Trevali Mining launched production and commissioned the 3000-tonne-per-day mill in May this year. Located 50km west of Bathurst, the Caribou Mine is a highgrade massive sulphite deposit containing zinc, copper, lead, silver and gold. The company expects to produce 93 million pounds of zinc annually, along with 32.5 million pounds of lead, 3.1 million pounds of copper, 730,000 of gold and 1,500 ounces of gold. Trevali Mining invested $36.3 million in pre-production capital expenditures and has fully refurbished a little more than half of the 13.3 kilometres of underground workings on 10 of 16 levels. Also, the company built a 75,000-tonne stockpile of ore before commissioning the mill and an additional 28,000 tonnes has been drilled and made ready for blasting. The project is staffed with 200 employees, contractors and consultants, and the company expects to employ 300 people full-time once mine and mill are operating at capacity. The mine life is projected at 6.3 years. AUGUST 2015

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PROSPECTS & PROJECTS DUMONT PROJECT Royal Nickel Corporation of Toronto contends that its Dumont resource is big enough to become the fifth-largest nickel sulphide operation in the world. To make that happen, however, the company is working to acquire all its permits and arrange financing before construction of a mine can commence. The deposit was discovered in 1956

and the potential for large-scale mineralization was confirmed in 1970, but it has since lay mostly dormant. Previous owners explored intermittently between 1982 and 1992, but lost interest. Royal Nickel acquired the property in 2006, and over the next three years, conducted 90,000 metres of exploratory drilling. The company estimates that Dumont holds 6.9 billion pounds of nickel in prov-

en and probable reserves and another 1.3 billion pounds inferred--enough to support a mining operation for 30 years. Royal Nickel completed a feasibility study in 2013, which calls for construction of a mill to process ore into a highgrade nickel concentrate that will be shipped elsewhere for processing. As well, the property has easy access to roads, railways and low-cost power. The company currently expects permitting and financing will be in place by year-end, in which case it would be in a position to commission mine and mill by 2017.

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Location, location, location is a familiar mantra in the real estate business and this project by Gold Bullion Development Corp. of Rouyn-Noranda is certainly in the right location – the heart of the Cadillac trend, where some 50 million ounces of gold have been produced over the past century. Gold was discovered on what became Granada in 1920. The property was staked in 1922 and production from a small mine began in 1930. Fire destroyed the surface infrastructure five years later and the property was neglected until the late 1980s, when new owners undertook exploration. The last gold was extracted in 2000, and Gold Bullion acquired the property in 2006. The company launched its exploration program three years later and in 2012, it estimated that the property contained 7.8 million tonnes of measured ore at a grade of 2.14 grams per tonne, which would yield 536,000 ounces of gold. In addition, drilling revealed another 5.3 million tonnes indicated at a grade of 2.32 grams per tonne, or 398,000 ounces. Gold Bullion completed a pre-feasibility study in June, 2014 and the following month entered a production agreement with Iamgold Corp. that would allow the company to ship its ore 40 kilometres to Iamgold’s Westwood mill for processing during the first three years of open-pit mining.

ELDER-TAGAMI MINE Abcourt Mines of Rouyn-Noranda owns three former producing mines and has begun rehabilitating and extracting gold 46 |

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from the Elder-Tagami Mine, but requires a financing package to put it fully into operation. This property is located 10 kilometres northwest of Rouyn-Noranda, and consists of 34 contiguous claims and concessions totalling 876 hectares. The surface infrastructure includes offices, service buildings, hoist rooms and a shaft building. Two shafts and several drifts on 16 levels are serviced to a depth of 794 metres. Previous owners operated the mine from 1985 to 1989, and closed it due to falling gold prices. Abcourt conducted several surface-drilling programs between 1995 and 2012, then retained independent consultants to conduct a preliminary economic assessment. It indicated that mining operations could yield cash flow of $138 million over 10.4 years. The company hasn’t obtained financing to put the mine into full production, but in April 2013 began rehabilitating old drifts and extracting ore, which has yield 12,400 ounces of gold. Recently, Abcourt signed a letter of intent with Richmont Mines for custom milling of 10,000 to 25,000 tonnes of ore per month between July and December 2015.

The company has developed alternative scenarios for putting the mine into production at projected costs ranging from $46 to $70 million. Open-pit mining would account for 85 per cent of production, which would be at least partly processed on-site in a mill with a capacity of 1,800 tonnes per day. But before the project advances, Abcourt must arrange financing, and

hopes to clear that hurdle in 2015. From what you’ve just read, it’s clear to see that Canada is living up to its reputation as being one of the more active and promising locations in the world for both new and existing mines and despite these troublesome times where investment is at a premium, it’s encouraging to see that exploration but moreover, development, is still happening from coast-to-coast. CMJ

can become

ABCOURT-BARVUE PROJECT The Abcourt-Barvue silver-zinc project by Abcourt Mines in Val d’Or, is the second of the company’s three former producers. It’s located 54km north of Val d’Or, Que. Zinc was discovered on the property in 1950, and a previous owner operated an open-pit mine from 1952 to 1957. For five years, beginning in 1985, Abcourt undertook development work at the site and extracted 632,319 tonnes of ore from an underground mine that yielded 131 grams of silver per tonne and 5.14 per cent by weight of zinc. A decade later, the company showed renewed interest and conducted an intensive drilling program between 2002 and 2007, and completed a number of technical and environmental studies. Abcourt also did a feasibility study. The measured and indicated resource now stands at 8.1 million tonnes, which would produce an average 55.45 grams per tonne of silver and 3.1 per cent by weight of zinc. AUGUST 2015

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www.hwyh2o.com CANADIAN MINING JOURNAL

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TECHNOLOGY MAPPING & SURVEYING

POINT MADE A look at choosing the best mapping and surveying technologies for your project By Andrew McIntosh

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roject managers involved in mining and mineral exploration are often responsible for organizing contracts for surveying and aerial mapping services. It may also be up to these project managers to recognize when these services are required and, in some cases, to select which technology to use. This process can appear daunting given the increasing number of technologies available and the rate at which they have evolved. Traditionally, when a project required mapping with a level of detail and accuracy not available in the public domain, imagery and elevation data were obtained from air-photos acquired from manned aircraft. When features required surveying, a tripod-mounted instrument was used to record the positions of point locations, one point at a time, as a surveyor looked through the instrument. Significant advancements were made in the 1990s with the proliferation of GPS use and robotic total stations, though surveying largely remained restricted to the capture of discrete points. High-resolution satellites with sub-metre resolution, aerial light detecting and ranging (LiDAR) units, and most recently, (unmanned aerial systems), equipped with digital cameras, have now become standard technologies used for topographic mapping. Where survey equipment was once limited to recording discrete points on features of interest, 3D laser scanners can now collect millions of points per second, capturing the detailed variability of features at centimetre point-spacing and with millimetre accuracy. With the exception of digital camera sensors vs. film, none of these advancements has rendered an older technology obsolete. Each of these technologies and methods has its niche today in the various phases of exploration and mining. Here’s a more detailed look at some of the more commonly used mapping and survey technologies used today, along with

comments and suggestions on a few basic but important criteria involved when selecting from them.

Aerial mapping: Trees versus no trees Data produced from aerial mapping technologies are determined either photogrametrically from overlapping digital images as in the case of satellites and drones, or with active-sensor technology such as LiDAR. Though many factors can influence the choice of technology, it often comes down to whether or not tree-cover is involved.

Satellites and drones: Photogrammetry With photogrammetry, ground coordinates are determined by software as equivalent features seen in overlapping images are brought together stereoscopically. This is done either manually by a technician or automatically by software with a process known as pixel-matching. Conditions affecting the accuracy of photogrammetry include: slope steepness, the ability of software or personnel to match equivalent features across overlapping images (ground homogeneity makes it difficult) and, most importantly, the degree of tree cover or vegetation thickness. As it is necessary for the ground to be visible in order to determine a coordinate on the ground, accuracy suffers greatly in forested areas.

LiDAR Aircraft-mounted 3D LiDAR units collect topographic data via the rapid firing of an infrared laser pulse, with modern units collecting up to one million 3D points per second. Depending on surface material, vertical accuracies from ± 10 to ± 20 centimetres are typical, with horizontal accuracies being only slightly less. In areas with forest cover, most pulses will strike leaves, but many pass through gaps in the vegetation to strike the ground.

Two dramatic views (here and on the adjacent page) show how aircraft-mounted LiDAR units can collect topographical data to give a clearer picture of what’s below.

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TECHNOLOGY MAPPING & SURVEYING

A technician sets up a traditional ‘point location’ centre to capture data.

Two views of a tunnel; one showing imagery and the second, actual.

Drones have gained in popularity to the point that they have become a standard technology used for topographical mapping.

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In a well-designed survey, the distance between points on the ground under forest canopy rarely exceeds a few metres, allowing technologists to create highly accurate topographic maps and bare-earth terrain models. Digital airphoto is often collected simultaneously, but unlike photogrammetry, the photos are not used in the derivation of elevation data.

When would you choose satellite imagery, a drone or LiDAR? Choosing which technology to use depends on the tolerance for positional error (accuracy requirements), project size, degree of tree cover and ease of access. Though budget is always a concern, if the tolerance for positional error cannot be relaxed, opting for a less-expensive method may result in unsuitable data and additional costs. Regardless of the method chosen, variable terrain and vegetation means that no single accuracy value can be expected to apply over an entire project area. Multiple technologies may be needed for some projects. Conditions favouring satellite imagery include a high tolerance for positional error (e.g., ±metres, depending on tree cover and slope), large project area, and remote location. Typical uses include exploration topographic maps with 2- to 5-m contours and digital elevation models (DEM) for 3D presentations, 3D modelling and drillhole planning. If not used for topographic mapping, satellite images are used as 2D GIS base-map layers for feature recognition, property overview, and quality control for assessing positional error in exploration data collected by field crews. Conditions favouring drones include low tolerance for error (e.g., ± 5 cm), small project area, no trees and nearby access by ground personnel. Typical uses include volume calculations, high-resolution orthophoto (e.g., 3 cm pixel) for site monitoring, time-series analyses for monitoring mass-movement or interim material removal from pits, etc. With drone mapping rates at only a few square kilometres per day, larger projects may be completed more economically using LiDAR. Safety, always a consideration, can be greatly improved where surveyors would otherwise be required on potentially hazardous sites such as stockpiles, unstable ground or areas with dangerous access. Conditions favouring LiDAR include low tolerance for error (e.g., ±20 cm), project size impractical for drone use, forest or

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thick vegetation cover and areas accessible by small aircraft (fixed-wing or helicopter).

Ground-based surveying: Discrete features vs high variability When selecting a ground-based surveying method, a main consideration is often whether it is more important to capture discrete point locations or the variability of a feature over a larger region.

Point locations: Traditional methods often suffice Long-established technologies such as the total station are perfectly suited to capturing discrete features, such as drillhole collars, the ends of a pipe or anything where data for either a single point or a small collection of points will suffice for accurately describing a feature’s location, size, orientation or movement over time. This is the familiar situation where a surveyor sets up an instrument on a tripod and looks through it towards a target, capturing data with millimetre accuracy.

Features of high variability: The domain of the scanners Ground-based 3D laser scanning is best used in mapping highly variable or complex features when accuracy requirements or other issues rule out aerial methods. Typical features mapped with laser scanners include underground workings, pit-walls, and pipe networks. Essentially ground-based LiDAR units, laser scanners capture vast amounts of closely spaced data points from tripods or vehi-

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cles. Thousands of points per square metre are possible. State-of-the-art units record up to one million points per second at accuracies of a few millimetres and at ranges exceeding ¼ km - multi-kilometre range is possible with long-range scanners, though accuracy decreases with distance. In geotechnical studies, e.g., tailings dam or pit-wall monitoring, millions of points allow the modelling of complex and subtle shape changes over time where historical methods would only allow for the detection of movement at widely spaced points (in real-time movement monitoring, fixed-position GPS or robotic total-stations are typically used). For underground workings, in addition to tunnel location and dimension mapping, void-space calculations allow highly accurate estimates of the amount of rock removed.

Final thoughts Though considering a few criteria can simplify the task of selecting the most appropriate technology, it is best practice to discuss the project with a consulting firm before issuing a request for proposals, Your best bet for an unbiased opinion on the most appropriate method will be with a multi-disciplinary firm that has experience using a variety of mapping and surveying technologies. CMJ ANDREW MCINTOSH is a project manager with McElhanney Consulting Services Ltd., Vancouver. Established in 1910, McElhanney is western Canada’s oldest combined engineering, surveying and mapping company. amcintosh@mcelhanney.com | www.mcelhanney.com

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IN MY MINE(D)

Planning for market cycles By Sean Jones

n under a generation, social licence commitments have moved from a nice-to-have community relations to a regulatory necessity. In fact, social licence commitments today aim to ensure communities and stakeholders affected by resource extraction projects support industrial projects and, like it or not, that support often comes at a cost, usually in the form of contracts, training, jobs and monetary payments. In a time of low or falling commodity prices, some may question the value and use of such commitments. This is a short-term view that overlooks the value of obtaining social licence for industrial projects, and this view may be a product of poor contractual commitments that didn’t plan for down-cycle risks. Commitments related to obtaining social licence come primarily in two forms: first, commitments required by regulators to monitor and address environmental and socio-economic impacts and, second, contractual commitments that companies make to First Nations, municipalities and other stakeholders. The regulatory regime and process will largely determine the regulatory commitments required, but contractual commitments to stakeholders can take any form that is agreeable to both the company and the parties affected by its project. When it comes to First Nations, these two parallel streams meet. In 2004, Haida confirmed that the Crown must consult First Nations regarding Crown decisions that could affect their asserted or proven rights. By ensuring that First Nations play a crucial role in the project approval process, Haida also ensured that First Nations had significant leverage when negotiating social licence agreements, sometimes called Impact Benefit Agreements with industry. First Nations’ opposition in the project approval process can create substantial uncertainty, delay and cost. Agreements with First Nations can create regulatory certainty, but also protect industry from potentially costly payments for interference with aboriginal rights and title. The Supreme Court of Canada’s 2014 Tsilhqot’in decision confirmed aboriginal title includes the right to benefit economically from the land. The Supreme Court also confirmed that if First Nations holds title consent must be obtained. While old case law suggests that industry should not bear the cost for infringement of aboriginal title, the courts have not ruled directly on this issue and that old case law may not insulate industry from liability. More recently, the B.C. Court of Appeal, in Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Alcan Inc. held

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that aboriginal groups could sue a company for nuisance and breach of aboriginal rights, even though the group’s aboriginal title had not yet been proven. While it is prudent for companies to pursue benefits agreements with First Nations to obtain regulatory certainty and protection from future liability, some terms of social licence agreements can be imprudent. The key is reaching an agreement that both parties can live with throughout all phases of the market cycle. The challenge in achieving this is that First Nations and industry often perceive, and plan for, risk differently. First Nations, as governments, want assured streams of payments so that they can make community program commitments. While some First Nations may see themselves as commercial partners in the project, few have an appetite for taking on the commercial risk a true commercial partner would have. Compounding this difficulty is the perception held by many First Nations that social licence agreements are to provide benefits for impacts caused by the project. From the First Nation’s point of view, most of those impacts materialize on construction and are not contingent on production. This doesn’t mean that the gap in expectations can’t be bridged but it takes time, and the results may vary from community to community. First Nations have become increasingly sophisticated in their commercial interests. Some may accept a stream of payments over the project’s lifespan that is tied to production in a manner akin to a royalty payment. This type of arrangement would usually be accompanied by substantial upfront payments tied to project construction. Where a First Nation insists on fixed annual payments over the project’s lifespan, the company should ensure that those payments will be economically viable for all phases of the market cycle, or can be suspended if production falls below a certain level, is suspended temporarily or terminated if the project is shut down. Social licence agreements, and agreements with First Nations in particular, are here to stay. They are now a reality in the resource sector. They ensure that the communities most affected by industrial development share in its economic benefits. For industry, they are now a cost of doing business that must be managed, planned for and very carefully negotiated. CMJ SEAN JONES is an associate in Borden Ladner Gervais’ Environmental Municipal, Expropriation and Regulatory Group and practices out of its Vancouver office.

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UNEARTHING TRENDS

How mining can win back its innovation groove By Theophile Yameogo

opular culture has it that mining is still in the stone ages, or that it has lost its innovative groove. For most of its history, mining has been on the cutting edge of innovation. From the canaries and pick-and-shovel to the mechanization era, to autonomous trucks and automated systems, mining companies have continuously enabled better health and safety practices, increased throughput and, ultimately, better returns. Canada, in fact, used to be a hub for innovation in mining, with companies like Noranda, Falconbridge and INCO all having major technology and innovation centres in Quebec and Ontario. Out of those centres came breakthrough innovations through major collaboration with sites and suppliers. Things like remote operation equipment, laser technology application and novel ground support systems all helped revolutionize the way mining operates. But, with a combination of a shift in focus, post-M&A redirections (Noranda, Falconbridge and INCO are now defunct) and new entrants with differing priorities, the “old innovation” era has faded. During the boom, a focus on volume – and its corollaries such as output, equipment, labour and materials – trumpeted productivity. And while technologies soared in other sectors like oil and gas, retail and telecommunications (all of which, incidentally, faced tough competition), mining companies somehow lost their innovation groove. The sector is now faced with an innovation deficit. It’s not too late to catch up, but it must start now. The menu of options to help miners boost innovation is long and wide. This time around, the context has changed and key elements include fast-paced and mobile technology, real-time capabilities, process automation, change management and robust project management frameworks. Some mining companies are already implementing solutions, demonstrating that the innovation groove can be reclaimed. Here are some of the essential ingredients and examples that will help revive and sustain the mining innovation spirit:

Innovation as a business imperative: To be successful and sustainable, innovation needs to be at the heart of the corporate objectives. A corporate framework for mining technology and innovation needs to be embedded and communicated. Having a clearly identified roadmap, supported by an innovation team with a mandate, structure, key performance indicators and a budget, can have a positive impact.

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Paradigm shifts as a foundational quest: Revisiting traditional practices in light of currently available technologies and practices can inspire an environment of innovation breakthroughs. We’ve seen this play out with fully integrated planning and execution, real-time data capture and analytics, virtual training, 3D printing, mobile technology and drones, for example. Meanwhile, an end-to-end view that breaks down silos and promotes integrated platforms has led some companies to implement remote operations centres to foster collaboration and operations excellence. When the foundation is there, opportunities abound.

THE SECTOR IS NOW FACED WITH AN INNOVATION DEFICIT. IT’S NOT TOO LATE TO CATCH UP, BUT IT MUST START NOW. Open innovation and learning from other sectors: Increasing collaboration within the industry and across the innovation clusters (associations, universities, research centres, suppliers, etc.), supported by governments, will boost the innovation agenda in mining. “Lifting and shifting” from other sectors can also help companies leapfrog. For example, some mining companies have recently been borrowing and adopting leading manufacturing practices for reliability of their operations, providing everything from practical tools for data analytics to value chain modelling operations de-bottlenecking and change management. It will certainly take time for the mining sector to be back on the cutting edge of innovation, but these examples are proof that there’s been significant and meaningful progress. As technologies continue to change our world, the mining sector must also embrace innovation to thrive. CMJ THEOPHILE YAMEOGO is EY’s Canadian Mining Advisory Leader. He is based in Toronto.

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