Canadian Mining Journal February/March 2018 by The Northern Miner Group

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MINES MINISTER Q&A THE COBALT CRAZE TAHOE IN TIMMINS

MINING IN ONTARIO

Celebrating Sudbury innovation

FEBRUARY 2018 | www.canadianminingjournal.com | PM # 40069240

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CANADIANMINING

FEBRUARY/MARCH 2018 VOL. 139, NO. 02

JOURNAL

FEATURES 17 Technology trends from the Mining Suppliers Trade Association of Canada forum.

CMJ

ONTARIO 14 President of the Ontario Mining Association, Chris Hodgson,

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reports on advances in the province’s mining industry.

20 Ontario Mines Minister Michael Gravelle updates CMJ on the Ring of Fire and the modernization of the Mining Act. ANADIAN MINING JOURNAL A profile of Tahoe Resources’ Timmins operations. C26

34 The new crop of low-capex gold projects in Ontario. 56 Juniors fuel a cobalt rush in the province’s north.

SUDBURY INNOVATION CLUSTER 41 A report on Ontario’s mining innovation cluster, centred in Sudbury. 42 The Sudbury ‘recipe’. 45 SAMSSA’s executive director, Dick DeStefano, on the global reach of the Sudbury mining cluster.

46 A new conference hears about obstacles miners face in adopting new technology.

49 North Bay-based WipWare bridges the gap between innovation and commercialization. 52 MIRARCO CEO Vic Pakalnis reports on the China Canada Centre for Deep Mining Innovation.

DEPARTMENTS 4 EDITORIAL | Beyond the Big Nickel.

6 LAW | Vasilis Pappas and George Vlavianos of Bennett Jones explain the ins and outs of bilateral investment treaties. 8 CSR & MINING | Michael Torrance and Carolyn Burns on integrating social performance measures across all levels of business. 10 FIRST NATIONS | AFN Ontario Chief Isadore Day discusses how true reconciliation will be achieved. 11 FAST NEWS | Updates from across the mining ecosystem. 62 UNEARTHING TRENDS | Jay Bailey of EY Canada describes how Canada and the EU can co-operate on natural resources.

www.canadianminingjournal.com FEBRUARY/MARCH 2018

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42 ABOUT THE COVER

This month’s cover supplied by Hard-Line Solutions.

Coming in April Canadian Mining Journal looks at water management. Plus, a special report on mineral processing.

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

CANADIAN MINING JOURNAL |

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FROM THE EDITOR

CANADIANMINING February/March 2018 Vol. 139 – No. 2

Beyond the Big Nickel Alisha Hiyate

ining has dominated Sudbury’s economy for much of its history, starting with the discovery of nickel and copper in 1883, during the construction of the Canadian Paciﬁc Railway. In the past, the city was dominated by two miners, Inco and Falconbridge. Those companies have since been swallowed up by foreign companies, and are now part of Vale and Glencore, respectively, and direct mining jobs have declined. From about 26,000 people employed in mining in the early 1970s, only about 6,000 in the city work for mining companies in the city of 160,000 today. Despite that, and the fact that the price of nickel has wallowed at under US$7 per lb. for several years now, Sudbury – the home of the “Big Nickel” – is thriving. The city has done that, not by moving away from mining, but by leveraging its collective expertise in all aspects of mining – mining equipment and services, mining R&D, environmental and water management. In doing so, Sudbury has transformed itself from a mining town into a hub of mining innovation. The transformation over the last 20 years or so has been due to intentional and continual efforts by small and medium-sized service and equipment suppliers to join together and leverage their expertise to branch out globally. Leadership by Dick DeStefano of the Sudbury Area Mining Supply and Service Association, and others have been instrumental to those efforts, as has support and leadership from the city of Sudbury’s economic development arm. While there are fewer direct mining jobs in Sudbury, the city’s mining service sector now employs 10,000. The Centre for Excellence in Mining Innovation (CEMI), established in 2007, has provided a vital link between SMEs, mining companies and Laurentian University to ensure innovative new technologies bridge the “commercialization gap” and actually get into mining companies’ hands. With this support, the service sector has proven to be innovative solution providers – and in the process, have successfully widened their base of customers from essentially two local entities a few decades ago to a global base, says Ian Wood, director of economic development for the city of Greater Sudbury. “We’ve got some companies that are seeing the majority of their markets now outside the country,” Wood says. It must be said that, although centred in Sudbury, the mining innovation cluster extends across several northern Ontario cities – North Bay and Timmins in particular – that also host successful SMEs, in addition to numerous mines. Laurentian University has also become a leader in mining research. Starting with a push by former Laurentian president Dominic Giroux (now CEO of Sudbury’s Health Sciences North), along with academic leadership at the university, a strong relationship with industry has been forged. The university’s outreach to the mining sector has helped it build its reputation for research, attract new talent, and has resulted in tens of millions in donations from mining magnates and their families. As Sudbury continues to ﬁre on all cylinders, the entire industry will be watching CMJ to see how Sudbury can continue to turn nickel into gold. 4 | CANADIAN MINING JOURNAL

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JOURNAL

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Editor-in-Chief Alisha Hiyate 416-510-6742 ahiyate@canadianminingjournal.com CTwitter: A N A D I A N@Cdn_Mining_Jrnl MINING JOURNAL

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News Editor Marilyn Scales mscales@canadianminingjournal.com Production Manager Jessica Jubb jjubb@glacierbizinfo.com Art Director Barbara Burrows Manager of Product Distribution Jackie Dupuis 403-209-3507 jdupuis@jwnenergy.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Toll Free Canada & U.S.A.: 1-888-502-3456 ext 2 or 43734 Circulation Toll Free Canada & U.S.A.: 1-800-387-2446 ext 3505 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 Robert Seagraves at 416-510-6891. Subscriptions – Canada: $51.95 per year; $81.50 for two years. USA: US$64.95 per year. Foreign: US$77.95 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: 1-800-387-2446 ext 3505; Fax: 403-245-8666 ; E-mail: jdupuis@jwnenergy.com Mail to: Jackie Dupuis, 2nd Flr. 816–55th Ave. N.E. Calgary, Alberta T2E 6Y4. We acknowledge the ﬁnancial support of the Government of Canada.

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LAW

Protecting your foreign operations in the age of BITs By Vasilis F.L. Pappas, George Vlavianos

magine your company investing millions of dollars in a mining operation in a foreign country. You do all the right things. You acquire all the required permits, you comply with all local laws, and you undertake all your operations responsibly. Yet, one day, the foreign government abruptly nationalizes your assets, revokes your permits, or undertakes other illegal measures to deprive your company of the millions of dollars it has invested, all without any compensation. This is a risk that is familiar to all Canadian mining companies with operations in foreign countries. In recent years, there have been many examples of this happening to mining companies all around the world. So is there anything Canadian mining companies can do to protect themselves? Historically, there were few protections available. Assume, for example, that a Canadian mining company had an operation in Mongolia. What rights would that company have if the Mongolian government nationalized its assets? In the past, the only options were to sue the Mongolian government in Mongolian court, or to ask the Canadian government to diplomatically intervene. Neither option was particularly practical or attractive. Bilateral investment treaties This issue had a chilling effect on foreign investment internationally. Thus, in recent years, states sought to address this by entering into “bilateral investment treaties” (BITs). Under these BITs, signatory states agree to provide certain protections to foreign investors from other signatory states. Typically, this includes protections from nationalization and discrimination, and guarantees of fair and equitable treatment, among many other protections. Where a signatory state violates those protections, BITs provide foreign investors with a direct right of action against signatory states before an independent international tribunal in “investor-state arbitrations.” What is more, these investor-state arbitrations are effective, enforceable, and have real teeth. With few exceptions, states almost always comply. The number of BITs has exploded in recent years. In 1990, there were just a handful of BITs, and there are now over 2,500; Canada alone has some 50 BITs (or treaties with BIT protections), with more on the way. And it is estimated that more than 600 investor-state arbitrations have been brought to date, with the bulk of them commenced within the last decade. Thus, BITs provide mining companies with operations in for-

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eign countries with real, tangible, and effective protections from foreign states. So what of our Canadian mining company in Mongolia? In 2017, a BIT came into force between Canada and Mongolia. Therefore, if the Mongolian government were to illegally nationalize the Canadian company’s assets, it would have a direct and enforceable right of action against the Mongolian government in an investor-state arbitration to seek compensation. Structuring your investments However, it is important to understand that BITs do not protect all foreign investors. A BIT only protects the nationals of the states that are parties to the BIT. Thus, for example, the BIT between Canada and Mongolia only protects Canadians investing in Mongolia, and Mongolians investing in Canada. Therefore, whenever investing in a foreign country, a Canadian company needs to be certain that Canada has a BIT with the country in which it is investing. If Canada does not have a BIT with that country, the company needs to carefully structure its investment in such a way as to ensure that it is protected by a BIT with another country. For example, Canada does not have a BIT with Paraguay. Thus, if a Canadian mining company invests in Paraguay directly from Canada, it will not have any BIT protections. Paraguay, however, has a BIT with more than 20 other countries. Canadian mining companies investing in Paraguay can beneﬁt from the protections under one of those BITs by carefully structuring its investment in such a way where it can be said that the investment is coming from one of those countries rather than Canada. There is protection There are very real and effective protections available to Canadian mining companies with operations in foreign countries. However, careful consideration needs to be given to how those operations are structured in order to ensure that those protections are available to you, lest you be left to the mercy and whims of a foreign government with no legal remedies or protections. CMJ VASILIS PAPPAS is partner, Calgary, Bennett Jones LLP. GEORGE VLAVIANOS is managing partner, Doha office, Bennett Jones (Gulf) LLP.

www.canadianminingjournal.com

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CSR & MINING

Bringing social performance into the fold By Michael Torrance and Carolyn Burns

ver the past several decades, there has been increased effort to find a balance between the positive and negative social impacts of mining. While these efforts are significant, they continue to be the domain of the “social performance” team – operating in isolation from the broader organization. This siloed approach can only go so far in ensuring local communities see sustained positive outcomes from mining. A key challenge for the social performance team is to have responsibility for the outcomes of activities or decisions that they don’t have any direct control over, or lack the skills or knowledge to manage properly. For example, a social performance team cannot develop a local hiring program, build a road that has the least impact on community trading routes and manage resettlement issues without the co-operation of other departments. This is a very complex set of objectives that requires the input of a multi-functional team to be effective. There are number of ways that social performance teams can be integrated into the broader mining company to enhance effectiveness. Integrate systems Site and company-wide management systems should take into account social risks affecting both the site and the community. This will ensure that decisions are made based on comprehensive and reliable information. In practice, this could include the social performance team participating in site level management meetings and risk analyses or adding new metrics to site level reporting. Hold departments accountable While the social performance team is responsible for engaging with the community, other critical functions in the organization must be held accountable for the positive and negative impacts of mining. For example, local employment should be advanced by human resources. Water management should be partly the responsibility of the environment group. Fleet managers must be responsible for managing traffic impacts on the community. Each department must be held accountable for their various responsibilities. Managing impacts should be part of individual job descriptions, quarterly and annual targets and reporting as well as performance evaluations. This ensures that 8 | CANADIAN

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Social performance teams can add great value at the strategic and operational levels. But to be effective, they must be integrated into the broader organization.

the social impacts of mining are aligned with individual and departmental priorities.

Understand the various priorities and expectations Each department has their own priorities and expectations. These can appear to be directly (or indirectly) opposed to each other. For example, a procurement team may be expected to find the highest quality items for the lowest cost. This can lead to an increase in regional or international bundling. A local procurement program challenges this expectation and can require the procurement team to purchase a higher cost item, or alter the bundling program in order to purchase locally. Identifying these different priorities allows the site to map inconsistencies or resistance from other departments, and find ways to work around them. Ultimately, understanding the priorities of each department allows management and the social performance team to weigh the options, understand limitations and make informed decisions. Provide adequate training Integrating social performance into the organization can require changes to traditional roles and require new skills and knowledge. social performance personnel often come from non-profit or community development backgrounds and have a limited understanding of geology, mining processes, financing and the overarching decision-making systems that are critical to corporate performance. This can impede the department from providing site management with relevant information about social risks or communicating with other departments in a way that is meaningful to them. Social performance teams should be trained on these critical functions to overcome these limitations. A good example of this is the project evaluation process that is central to financial decision making. Without understanding the process and various inputs required to forecast the costs and risks of building www.canadianminingjournal.com

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a project, the social performance team may not adequately asses or collect critical information about the costs and risks of social impacts. Conversely, other departments should be provided training on the importance of managing social impacts. Without a full understanding of the likelihood and severity of losing a social licence to operate, other departments may fail to integrate such issues into their decision making. To properly manage impacts, personnel in other departments should get to know community members and receive training on cultural differences, social norms and etiquette when speaking with formal leaders. This will give them a more tangible sense of the social context in which the company operates. Build relationships with other departments It is critical for the social impact team to network and be known across the organization. This can be easier said than done. Working across departments to manage the complexities of social impacts is hard and requires group problem solving, communicating with new people in a new way and a lot of give and take. But, building personal relationships is essential for effective co-operation. This can be particularly challenging in light of the geographic distances between on-the-ground social performance personnel and corporate head offices. Despite the

challenges, it is very important that social performance teams make a concerted effort to get to know their colleagues across the organization. Properly Resourced Social performance is not a “nice to have” or an add-on to the mining business. It is a critical part of success. To reflect this, social performance teams and all departments touching that topic should have the time, budget and expertise to adequately manage engagement and the social impacts associated with the mining project. Social performance teams can add great value at the strategic and operational levels. But to be effective, they must be integrated into the broader organization. By doing so, companies can ensure that the social performance programs they are developing are tied closely to the business objective and that business goals are pursued in a way that promotes and enhances the attainment and maintenance of social licence. CMJ MICHAEL TORRANCE is the director of environmental, social and governance at BMO Financial Group. CAROLYN BURNS is director of operations at NetPositive, a non-profit that works with diverse stakeholders to help local communities see sustained positive outcomes from mining

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FIRST NATIONS

True reconciliation requires a fair share of resources By Isadore Day

n Jan. 19, Prime Minister Justin Trudeau visited Pikangikum First Nation as the fulfillment of a commitment he made shortly after the 2015 election, following a series of suicides by young people. In some respects, Pikangikum is ground zero in terms of poor health determinants – a lack of housing, clean water, and reliable electricity. In fact, the federal minister of Indigenous Relations and Northern Affairs, Carolyn Bennett stated at last July’s AFN annual general assembly that any new housing for Pikangikum would not happen until the community is connected to a power grid. The good news is that Wataynikaneyap Power is developing the 117-km Pikangikum Distribution Line Project to connect to the nearest provincial hydro grid at Red Lake. The anticipated completion is in November of this year. Until then, Pikangikum will continue to experience power outages when the diesel system breaks down. This energy crisis exacerbates the current deplorable and overcrowded living conditions. On March 29, 2016, nine people died in a tragic house fire – six adults and three children. Pikangikum Chief Dean Owen stated that efforts to put out the fire were complicated by the muddy roads and lack of running water in most of the community. These tragedies are far too frequent in First Nation communities across the country. In fact, First Nation people are 10 times more likely to die in house fires than mainstream Canadians. Ironically, two weeks before his visit, the prime minister released a statement marking the 20th anniversary of the Great Ice Storm that hit parts of eastern Canada. The statement said, in part: “Without electricity, heat, food, and water, people were forced out of their homes and businesses could not stay open. The freezing rain made all forms of transportation treacherous. Impassable roads hindered basic services and made it difficult for emergency vehicles to help those most in need. Thirty-five Canadians died as a result of the storm.” I would like to remind the prime minister that Pikangikum, and so many more First Nation communities, deal with icestorm like adversity on a daily basis. This visit should reinforce the prime minister’s commitment to improve the socioeconomic conditions of our Peoples. True reconciliation will not be achieved through apologies and funding lines in a budget to be released in 2020.

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On March 29, 2016, nine people died in a tragic house fire – six adults and three children. Pikangikum Chief Dean Owen stated that efforts to put out the fire were complicated by the muddy roads and lack of running water in most of the community. These tragedies are far too frequent in First Nation communities across the country. In fact, First Nation people are 10 times more likely to die in house fires than mainstream Canadians. True reconciliation and the recipe for a new relationship with Canada includes: a The importance and significance of our sovereign relationships; b Significant land base and resources to flourish; c Indigenous laws to regulate the lands, resources and relationships; d Adjusting Canadian federalism and constitutional level discussions; and e Observance and enforcement of treaties, and law and policy changes in adherence to the United Nations Declaration on the Rights of Indigenous Peoples. In closing, First Nations need Equalization PLUS funding applied to address the ongoing legacy of poverty and despair. Our inherent title of lands and treaties suggest we share equally. Now with the damage created by colonialism and the current impact to our communities – we demand our equal share of wealth derived from this land. For the sake of our children in Pikangikum, and in far too many other communities, we need to eliminate poverty and share the wealth now. This is true reconciliation in action. CMJ ISADORE DAY Wiindawtegowinini, is Assembly of First Nations Ontario Regional Chief.

www.canadianminingjournal.com

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FAST NEWS • Hackathon |

Updates from across the mining ecosytem

Komatsu invites startups to showcase their wares at Unearthed event

nearthed returns to Brisbane for the fourth time this year for a resources industry hackathon with a twist. Komatsu: Transform Mining will allow startups and entrepreneurs to showcase how their technology applies to four major mining challenges from one of the world’s largest equipment manufacturers, and prototype their engagement model with Komatsu. The Japanese multinational manufacturing giant speciﬁcally chose to hold the event in the city of Brisbane, Australia’s major hub for mining technology startups. Running over 54 hours from Feb. 23–25 at River City Labs, the event will create jobs and connections between industry and startups. Innovation Minister Kate Jones said the return of Unearthed to Queensland would create new opportunities for the mining sector. Komatsu: Transform Mining will provide entrepreneurs the opportunity to work closely with Komatsu mentors and personnel from across the business, who will offer deep insights into their current operations, technology gaps, implementation, integration, and future vision. “Innovation is created by a sense of crisis as a driving force. Mining sites are in a very harsh environment and both people and machinery have to keep ﬁghting against the severe environment 24/7. Through hackathons with outside mem-

• Research |

Barrick Gold’s Ed Humphries with BGC/Koan Designs, the winning team of an Unearthed Hackathon held in Toronto last March. PHOTO CREDIT: UNEARTHED

bers who are familiar with mining sites, customers and advanced technologies, we expect results that cannot be achieved by in-house development,” said Ryoichi Togashi, General Manager, Komatsu. Participants will also receive in-depth, honest feedback about how their product or technology might integrate with Komatsu’s current and future vision. Senior-level executives from Komatsu Japan, the U.S., and Australia will be at the event. Throughout the weekend, Komatsu will present four signiﬁcant problems they are facing in the realms of wireless communications and localization, health and safety

monitoring, real-time material characterization, and efﬁcient extraction of ore. Startups from all around the world were invited to participate and compete for the chance to advance their product with Komatsu, along with over $20,000 worth of prizes in cash and credits and an all-expenses paid trip to one of Komatsu’s global sites. Unearthed is an organization that brings the resource sector together with innovators and entrepreneurs through hackathons focused on industry problems. The organization held events in Vancouver and Toronto last year.

Metal Earth conducts seismic survey

etal Earth is conducting a seismic survey of around 1,070 km across the Superior Province in Ontario and Quebec to understand the processes that result in differential metal endowment. Ross Sherlock, the director of Laurentian University’s Mineral Exploration Research Centre (MERC), which is leading the collaborative Metal Earth research project, notes that mines tend to cluster in some areas even though the geology may look very similar in areas that don’t host any deposits. Part of Metal Earth’s purpose is to figure out why that is. To conduct the survey, several “vibroseis trucks,” each

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equipped with plates weighing more than 2 tonnes, stop at predetermined spots to shake the ground. Wireless geophones spread out every 25 km along the travel corridor record 12 seconds of signals, which gives seismic information to 40 km depth. Seismic is considered to be the most accurate geophysical prospecting method. The data can later be used by geologists to complement their understanding of the geology of the area. Metal Earth is a $104-million, seven-year applied R&D initiative funded by government and industry partners. CONTINUED ON PAGE 12

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FAST NEWS • Anniversary |

Updates from across the mining ecosytem

Laval University’s mining department celebrates 80 years

n March, the Department of Mining, Metallurgical and Materials Engineering at Laval University in Quebec City will celebrate its 80th anniversary. Here’s a look at its history. In 1937, there were 20 gold mines in operation in Quebec and asbestos mining. had developed into an important industry. Iron ores and large deposits of ilmenite were known and means for their exploitation were needed. As a result, a law was passed on March 18, 1938, in Quebec for the creation of a School of Mines, Geology, and Metallurgy, and Université Laval was assigned the responsibility of organizing it. Gérard Letendre (1906–1988) from Saint-Germain-de-Grantham, a small village near Drummondville, had graduated from McGill University in 1932 as a metallurgical engineer. He went on to study metallurgy at the Royal School of Mines in London, as well as economics at the University of London. In 1938, he was chosen to create the Department of Mining and Metallurgy at the newly founded School of Mines. The creation of the school was an effort by the then Union Nationale government led by Maurice Duplessis to graduate French Canadian mining and metallurgical engineers for the industry in Quebec. Duplessis himself was a Laval graduate. The School of Mines was under the jurisdiction of the Ministry of Mines of Quebec because the Ministry of Education had not yet been founded. Construction of a building to house

• Acid Runoff |

Above: In 1963, the Faculty of Science moved into its present buildings in Sainte-Foy; Below: School of Mines laboratory 1945-1955. CREDIT: LAVAL UNIVERSITY

the school immediately started on Boulevard de l’Entente next to the School of Chemistry. In 1941, the building was ofﬁcially inaugurated. In 1970, Laval University was granted a new charter, which allowed it to be detached from the Séminaire de Québec. Over the years, the name of the depart-

ment has changed to reflect its changing activities. It became the Department of Mining and Metallurgy in 1974, the Department of Mining and Metallurgical Engineering in 1980, and then the Department of Mining, Metallurgical, and Materials Engineering in 2000. – With ﬁles from Fathi Habashi.

Technical guidance for creating effective ground covers

he International Network for Acid Prevention has released a Global Tpractice Cover System Design report, a guidance document intended as a best summary to assist mine operators, designers and regulators to

address issues where cover systems can be employed. This document builds on previous technical guidance documents on cover system design, construction, and performance monitoring. It will be of interest to those are seeking more detailed information than what is outlined in Section 6.6.6 of the GARD Guide – Engineered Barriers (www.GardGuide.com). A holistic framework for management of reactive materials during

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operations and at closure is the pillar of the document. The framework for cover system design is presented at a high level, suitable for readers with a minimal technical background. It is presented at a conceptual level, using a hierarchy of climate, geology and materials, and topography, leading to an understanding of the patterns of water movement on a specific landscape. Ultimately, these elements will govern how cover systems perform, and it is up to designers to manipulate them to achieve desired performance. This document presents a conceptual model of how cover system www.canadianminingjournal.com

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• M&A |

SMT Scharf AG buys RDH Mining Equipment

erman equipment manufacturer SMT Scharf AG has acquired Alban, Ont.-based RDH Mining Equipment in an $8-million deal. The company says the merger will strengthen its market position as an integrated system provider in the underground logistics area. “With its portfolio of diesel and electric vehicles for noncoal and salt mining as well as tunnel construction sites, RDH possesses outstanding product expertise in this niche,” said SMT Scharf AG CEO Hans Joachim Theiss in a release. “The takeover forms an ideal augmentation of SMT Scharf ’s portfolio to include rubber-tire vehicles and gives us an even broader positioning in the market. By aggregating the international sales and after-sales expertise of SMT Scharf with the acquired product program, we can achieve far-reaching synergies in the international hard-rock and tunnel markets, and further boost capacity utilization across our group.” RDH has specialized in high-quality underground equipment for mining and tunnel construction for more than 30 years and has been especially active in the North American market to date with a revenue share averaging above 50%. Its varied product range extends from jumbo drilling equipment through to so-called load-haul-dump machines (LHDs), scissor lifts and low-loaders. Since 2011, the company has been one of the pioneers in battery-driven, non-coal underground mining equipment. With around 50 staff, RDH generated sales of $14.5 million (around EUR 9.6 million) in its fiscal year ending Apr. 30, 2017. SMT Schart is one of the world’s leading providers of transport solutions and underground logistics systems.

Providing full service mining solutions and innovation around the world for over 56 years.

EXPERIENCE

RDH Mining Equipment’s Liftmaster 800. CREDIT: RDH MINING EQUIPMENT

designs might affect contaminant and acidity loading. This model attempts to determine when the varying roles of the cover system design (e.g. control of net percolation or oxygen ingress), might influence loadings. Acknowledgment of these unique relationships provides an opportunity to optimize ML/ARID management in a cost effective manner. Other key concepts discussed within the document are the role cover systems play over the life of the mine from early conceptualization to long-term performance monitoring considerations. CMJ

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Consider it done.

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Ontario

CHANGING MINES: Ontario on the cusp of the future by Chris Hodgson

hings are looking up for the Ontario mining industry in 2018. After an extended period of declining or weaker than expected economic growth rates, many commodity prices are rebounding. Yes, there is persistent volatility, but there is no denying that a feeling of optimism is returning to the mining industry. In looking to the future, we are buoyed not just by the markets, but by the knowledge that the world needs sustainably-sourced minerals and metals to make modern life a reality. Demand will only grow as we transition to low carbon technologies. After all, none of them are possible without the products of mining. Rich in resources, Ontario mines them responsibly. We have a world-class safety record, clean processes and low carbon emissions when compared to other industries and jurisdictions. Furthermore, OMA members continually strive to operate according to the highest standards of excellence, balancing their economic, environmental and social responsibilities. This unwavering commitment to steady, continuous improvement creates an innovation momentum that is poised to produce some truly revolutionary results. There are many new developments – big and small – that are transforming the way we mine, reducing our environmental footprint, and thus contributing to decarbonizing our planet. Moving

There are many new developments – big and small – that are transforming the way we mine, reducing our environmental footprint, and thus contributing to decarbonizing our planet.

to battery-powered underground vehicles, which cut ventilation and cooling costs while creating a healthier environment for workers, is a growing trend in Ontario mines. Currently, Glencore, Goldcorp, and Kirkland Lake Gold are using electric fleet technology, while many others are engaged in pilot projects. For instance, Vale’s Coleman nickel mine is testing battery-powered loadhaul-dumps (LHDs) in its lowest orebody, striving to remain as carbon neutral as possible, notwithstanding the growing depth of the mine. Meanwhile, at Kirkland Lake Gold’s Macassa and South Mine Complex, more than 80% of gold production is linked to battery vehicles, with a track record underground of more than 200,000 hours of production. Sensing a growth opportunity, manufactures of industrial tools and equipment have accelerated research and development. For instance, Epiroc – part of the Atlas Copco Group, unveiled a

Goldcorp’s Borden gold project near Chapleau, Ont., will be the world’s first all-electric mine. CREDIT: GOLDCORP

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two-boom jumbo, equipped with a lithium-ion-phosphate battery, which is to be used at Glencore’s Sudbury Integrated Nickel Operations Nickel Rim Mine. Innovative onboard charging technology allows the unit to be charged while it is drilling, extending its operating time to a full shift. Increasingly, companies are designing their sites around battery equipment. Glencore is planning its Onaping Depth site with an all-electric mining vehicle fleet in mind to manage ventilation challenges, while Goldcorp is partnering with Sandvik Mining to roll out a BEV fleet to be used at Borden, where it building the world’s first all-electric underground mine. The investment in electric equipment at Borden will improve safety performance and eliminate upwards of 7,000 tonnes CO2e (carbon dioxide equivalent) of GHG emissions, or 3 million litres of diesel per year. Over a 10-year life of mine, this represents a reduction of 70,000 tonnes CO2e and a reduction of 330,000 MWh in electricity. Additional sustainability initiatives being implemented by OMA members include fuel switching, ventilation on demand, peak power reductions, using compressor excess heat to help heat buildings, geothermal heat recovery, truck payload optimization and lighting retrofits, to name a few. As mines go deeper, there is a pressing need to adopt innovative technologies. Companies are embracing automation, tele-remote operations and digitization to enable a safer and more productive future. Goldcorp’s Red Lake Gold Mines implemented tele-remote operation of scoops from the surface in 2015, adding an underground loci (locomotive engine used to transfer ore and waste rock material) in 2017. Barrick Gold partnered with Cisco to implement a digital transformation of their operations. Now, self-driving vehicles and sensors are making mines safer for employees, while data and analytics are helping refine processes. To inspire our members, enable information sharing, and keep the innovation processes moving, the Ontario Mining Association launched our Target Zero+ campaign in 2017. The focus of this collaborative campaign, initiated under the leadership of former OMA chair, Marc Lauzier and sustained by our current chair, Duncan Middlemiss, is to drive enhanced performance in health and safety (mining with zero harm); environmental protection and energy efficiency (mining with zero carbon and zero waste); and productivity (building global competitiveness). Our partners include governments, industry coalitions and academic research institutions. We are also seeking to harness inputs from some of the brightest young minds in Ontario though the MINED Open Innovation Challenge. #MINED2018 is open to undergraduates at the University of Toronto (Lassonde Institute of Mining), Queen’s University (Robert M. Buchan Department of Mining) and Laurentian University (Bharti School of Engineering). The students are asked to solve an industry challenge, drawn from OMA member companies’ real life mining operation scenarios, and submit a proposal by March 12, 2018. Finalists will pitch their ideas to a panel of industry leaders at a Dragons’ Den-like event on May 17, 2018. Last year, the impressive panel included Jennifer Maki, CEO of Vale, Tony Makuch, president and CEO of FEBRUARY/MARCH 2018

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Kirkland Lake Gold, and Steve Thomas, CFO of Goldcorp’s Canada Operations. The event was emceed by George Flumerfelt, president & CEO, J.S. Redpath Ltd., who is returning to oversee proceedings on May 17. The names of the ‘Dragons’ will be revealed soon. In addition to invaluable exposure, the three finalists walk away with substantial cash prizes: $15,000 for first place; $10,000 for second place; and $5,000 for third place, with the potential to win an additional $5,000 Audience Choice Award. This year, we are also inviting undergraduates from any Ontario university or college to submit a five-minute video that imagines how Ontario mining will reinvent the future. The winning video, which is intended to motivate visionary thinking and inspire action by industry leaders, will receive $10,000. When it comes to protecting the environment and fighting climate change, Ontario mining is part of the solution. With #MINED2018, we are putting this notion at the centre of our innovation strategy, involving forward-thinking Ontario university students in an initiative to ignite ideas and cause us (and them) to think differently. CMJ CHRIS HODGSON is president of the Ontario Mining Association.

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2018-02-15 2:52 PM

AWARD-WINNING FUEL TANK BECOMES MINING FAVORITE BY NANCY ARGYLE

ith so many mining operations located in remote areas with little infrastructure, understandably, fuel supply is a serious business and one of the many reasons why a Canadian invention has quickly become a mining favorite. The creation of the Bulk Aviation Transport Tank (BATT), winner of four technology awards, actually began as a persistent customer request. “We were asked to produce a collapsible tank that could fit inside an aircraft,” says Paul Reichard, remote site division manager for SEI Industries Ltd., a manufacturing company located in Delta, BC, Canada. “At first, we said no. Then, maybe. Finally, after brainstorming and consulting with our engineers, we said, yes, we can do it!”

SEI was already an expert manufacturer of collapsible fuel storage tanks that sat on the ground but this new tank would have to carry bulk fuel in an aircraft that could be subjected to strong G-forces. It had to be able to withstand any maneuver thrown at it and it would have to be custom-built for each aircraft type. After overcoming a number of engineering hurdles, SEI’s BATT was launched in 2011 with the first tanks being delivered to the very client who had initially suggested the product. From there, it wasn’t long before word of the new tank’s capabilities spread amongst air carriers in Canada’s north and, with Transport Canada approval, many quickly purchased the BATT, installed it and had it airborne all over the country. Thanks to the stunningly fast adoption by other carriers around the globe, today,

BATTs are in use across five continents including North and South America, Asia, Africa and Europe. From single Otter aircraft to the much larger Boeing 737, the BATT is now available in 20 different sizes with more being developed. Embraced by remote operators, the BATT offers the unique ability to carry bulk fuel in and, after being emptied, the collapsible tank can be rolled up so that other cargo can be hauled back out, allowing a substantial savings in fuel hauling costs. Recently, SEI unveiled its new Aviation Pump Cart as a teammate to the BATT. Designed for remote airport locations, the Aviation Pump Cart allows one person to easily move the pump and its hoses over rough terrain to refill an aircraft quickly from a portable fuel tank or directly from the BATT.

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Miners technology

TECHNOLOGY

RUSH TO EMBRACE NEW

MSTA Canada forum hears about mining innovation trends By Alisha Hiyate

iners have been talking seriously about innovation since the downturn of 2012, but it’s taken a while for that talk to translate into action. At the recent Mining Suppliers Trade Association (MSTA) of Canada forum, some of the leading purveyors of techFEBRUARY/MARCH 2018

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nology to the mining sector conﬁrmed that it’s ﬁnally starting to happen. “What I’m seeing now is a little bit of fear in the marketplace,” said Michael Gribbons, vice-president of sales and marketing at Maestro Digital Mine. “(Mining companies) are quite afraid that somebody’s going to leapfrog them with technology,” he explained, pointing to recent digitization announcements

from miners like Barrick Gold and Goldcorp. “But for the ﬁrst time, I’m also seeing a top-down approach that the CEOs of a lot of these companies are willing to stick their neck out and dive into technology.” Tomas Cabanillas a sector advisor at Export Development Canada who helps provide ﬁnancing to clients in Chile and CONTINUED ON PAGE 18

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Page 25: Trying out Microsoft’s HoloLens virtual reality technology at the MSTA Canada forum. CREDIT: MSTA CANADA ABOVE: Listening to a speaker at the luncheon. CREDIT: MSTA CANADA

One of the things I do when I go out and present to any of my mining clients now, I try to convince them: ‘When you go out to buy your next batch of machines, make sure you get the rights to the data that’s coming off that machine, because how do you do analytics if you can’t collect the data and you don’t own it? –WALTER SIGGELKOW, THE FOUNDER OF HARD-LINE SOLUTIONS

Peru who are using innovative solutions from Canadian suppliers, said the same applies internationally. “What we’re seeing is, after moving to reactivate or build or expand new mines, many of these companies now have the additional mandate from management or from champions within that management to start looking at the concept of innovation from leadership all the way down,” Cabanillas said. That new openness is reflected in the presence of Microsoft at the conference, held in November in Mississauga, Ont. “Microsoft would not have been like something like this ﬁve years ago,” conﬁrmed Mark Speaker, Industry Solutions executive with Microsoft. “The whole environment’s changing – there’s a lot of new players, a lot of very large players,” said Walter Siggelkow, 18 | CANADIAN

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the founder of Hard-Line Solutions. “Cisco is taking a huge role, upfront, at the mine sites and putting equipment in. Technology-wise, it is an absolute race right now.” Speaker noted that mining companies are approaching Microsoft looking for solutions from other industries. “A number of (companies) have asked us: help us innovate,” Speaker said. “The best ones have really thought about it and said, ‘Don’t try to understand mining better than we do, because you never will: Bring us the best that people are doing from other industries.’” As an example, Speaker said companies have been inquiring about “lights out” facilities – highly automated operations that work without the physical presence of people, and how the principle could be applied to mining.

MSTA rebranding To reflect the changes that are taking place in the industry, the conference organizer rebranded as MSTA Canada in September, after nearly four decades as CAMESE (Canadian Association of Mining Equipment and Services for Export). With the rebrand comes a new focus on providing its members networking opportunities with the mining industry and a more aggressive advocacy strategy on behalf of its more than 300 corporate members. Aside from future trends such as “lights out” mining, and the recent entry of new and big players into the mining space, MSTA delegates also heard about one of the basic stumbling blocks miners are coming up against in their quest for innovation – the ownership of data. Ryan McEachern, managing director of MSTA Canada, noted that he’s heard complaints from several large mining companies that they don’t have access to all the data generated on their equipment and systems – data which could be useful in all types of analytics. Hard-Line’s Siggelkow said that mining companies need to push back when OEMs are reluctant to give them access to the data generated in the course of operations. www.canadianminingjournal.com

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“One of the things I do when I go out and present to any of my mining clients now, I try to convince them: ‘When you go out to buy your next batch of machines, make sure you get the rights to the data that’s coming off that machine,” Siggelkow said. “Because how do you do analytics if you can’t collect the data and you don’t own it?” Companies who are refused data are in the position of having to hack their own machinery to get the data they need, said Microsoft’s Speaker. “We’re working with a mining company who wanted data from their large haul trucks and they’re not getting that so they’re… hacking into that gear to get it,” Speaker said. “It’s so valuable they’re saying we don’t care if we’re blowing the warranty on this stuff, we want that data because we’re running our predictive models, there’s so much efﬁciency gain to be had here.” Speaker continued: “Data is the new oil – and there were a lot of wars fought over oil.” Part of the problem, Siggelkow added is

Data is the new oil – and there were a lot of wars fought over oil. – MARK SPEAKER, INDUSTRY SOLUTIONS EXECUTIVE, MICROSOFT

the lack of interoperability between different OEMs systems and the lack of an open standard or common platform such as those that exist in the auto industry. “Different companies have different expertises; some of them do some things very well, but not everyone does everything perfectly, so you have to build APIs

(interfaces between two pieces of software) – you need that in between them so there’s a standard that says how do we play nicely together?” Siggelkow said. ‘You’re going to get failures’ While mining companies have warmed up to innovation, they may have to adjust their mind sets a little bit more to get to the “fail fast” model that has allowed software companies to be so successful at innovation. “The other thing I would say is, yes, you’re going to get failures – in fact you have to enable experimentation,” said Speaker. “The largest companies kind of realize this – they get a portfolio of projects and if there’s ten of them, they’re going to have three or four absolute all-out failures, and then you’re going to have some base hits and you’re going to have some home runs. You’re going to have to be ready to accept that if you’re going to innovate at the speed that other industries do.” CMJ

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Q&A

Mod

ith a provincial election coming up in June, we asked Michael Gravelle, Ontario’s minister of Northern Development and Mines to sit down with CMJ at the end of January.

Gravelle, a six-term Liberal MPP who has been a cabinet minister since 2007, and recently announced he’ll be running for re-election again, discussed resource revenue sharing with Aboriginal communities and his government’s eight-year effort to modernize Ontario’s Mining Act. He also provided an update on the government’s $1-billion commitment to bringing road access to the Ring of Fire – which was initially promised in 2014.

Ontario’s Minister of Northern Development and Mines Michael Gravelle.

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CREDIT: GOVERNMENT OF ONTARIO

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odernizing MINING Ontario’s Mines Minister updates CMJ on Ring of Fire, Mining Act

Canadian Mining Journal: Judging from the number of recent mining M&A deals involving projects

in Ontario, mining companies clearly see the province as a favourable jurisdiction for developing and operating mines. But the exploration side of the industry is still struggling to raise capital. What is the province doing to assist juniors to make more discoveries in Ontario?

While we’re very Michael Gravelle: proud of the fact that we have over 40 operating mines in Ontario and 25,000

people directly employed, 50,000 indirectly employed, it’s really the juniors that find the discoveries that lead to new mines in the future. So we do need to support them. They have gone through some challenging times. One program we put in place recently was a $5-million commitment towards the Junior Exploration Assistance Program ( JEAP) to provide financial support to junior companies with project-specific costs related to exploration carried out in Ontario. That program is funded by the Northern Ontario Heritage Fund Corp. and is administered by the Ontario Prospectors Association. To date, the NOHFC has committed more than $2.5 million to 43 exploration projects under this program. We know it’s made a big difference to the companies that have been supported in terms of keeping companies open and allowing them to move forward with exploration activities. We want to continue to support them through the next tranche of the JEAP funding, which closed on Dec. 15. JEAP is a one-time program, but it’s been a real success and I’m keen to see it be renewed. I’m meeting with the NOHFC to discuss that in the near future. We also market the provincial mining industry at the global industry trade and investment shows. That’s an opportunity for FEBRUARY/MARCH 2018

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our ministry staff to invite investors to meet with junior exploration companies and other industry stakeholders. Other support we provide them through the Ontario Geological Survey, which of course is an internationally recognized leader in the collection and dissemination of geoscience information. Thee OGS is also known for producing quality open data sets, a foundational geological information resource used by the industry to select mineral exploration targets. We’re optimistic about the future in terms of exploration. Junior mining companies appear to have been more active over the past year as the result of a greater availability of financing. Of course, the Toronto Stock Exchange Venture is a key source of financing for Ontario’s junior miners. In 2017, $3.2 billion was raised in new equity capital for junior mining on the exchange, which was up 27% from $2.6 billion raised in 2016. There have been a lot of mineral discoveries in the Ring CMJ: of Fire, but without infrastructure, new mines can’t be built in that area. Last year, the government announced it was moving ahead with two specific proposals for road access into that area. Can you update us on any progress that’s been made since then?

Yes, we certainly understand that the key to opening MG: up the Ring of Fire is infrastructure, which is why we are so pleased to be supporting three First Nations within the

Matawa First Nations, who are working within their communities to develop all-season access roads through their communities to the provincial highway network and into the Ring of Fire. Webequie and Nibiminik First Nation are working together on a potential east-west line through their communities, that work is CONTINUED ON PAGE 22

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Q&A

At Noront Resources’ Esker camp in the Ring of Fire. Noront’s Eagle’s Nest nickel-copper-PGM deposit is the most advanced development project in the Ring of Fire. CREDIT: NORONT RESOURCES

ongoing, they are in consultation with their communities. We also have a project with Marten Falls First Nation, they are very keen to move forward with their community road leading to the provincial highway network near Aaroland and Greenstone, which would lead to a potential north-south road leading to the Ring of Fire. This is a project we are strongly supporting, we’re working closely with all three communities as we are continuing to work with the Matawa First Nations on the Regional Framework Agreement which was put in place in March 2014 to focus on areas such as regional infrastructure development, socioeconomic supports, resource revenue sharing and enhanced environmental monitoring. It’s important to understand the Ring of Fire is a major resource development project in a part of the province that’s never seen development before, and we are keen to make sure that we get it right. That’s why working with the First Nations, as it’s on their traditional territories, is so vital. These are First Nation proponent driven projects and it’s important they bring forward the environmental assessment proposal and we hope that will be happening soon.

CMJ: So the EAs haven’t started yet. MG: No, no yet. Not all the First Nations communities in the Ring of CMJ: Fire are supportive of the road proposals – how are you working to resolve that? We’re working through the Regional Framework MG: Agreement. We want to make sure that there’s a strong recognition that in order for this project to move forward, 22 | CANADIAN

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we need to work with all the communities. Each of the communities is a different stage and the pace may be different in different communites, but we are working very happily with those communities that are prepared to work with us. Those that are more reluctant and are still pushing for other priority issues, we want to continue to work with them as well. It’s important to recognize that Ontario has contributed significant dollars – over $114 million, including $44 million directly from our ministry – to First Nations and to tribal councils to support areas such as community readiness, capacity building, planning activities and access to technical expertise that will help them prepare for Ring of Fire development opportunities. To date, over 3,100 First Nations clients have completed various training programs to support successful employment. We continue to maintain an open dialogue with those First Nations in the region to ensure those communites can also participate in the decision making progress, because this is their decision. When the funding announcement was made last summer, CMJ: road construction was expected to begin in 2019 – is that still the expectation? We’re moving forward as quickly as we can. Marten MG: Falls in particular are keen to move forward with their all-season road and are close to putting forward their environ-

mental assessment project proposal to both the federal and provincial governments. That project will be moving forward quickly. With Webequie and Nibiminik, they’re doing a bit more work but we’re trying to keep on schedule. We’re keen to see this moving forward. That’s why we committed $1 billion to the Ring of Fire infrastructure. We made a case for the fact that in order to open up the Ring of Fire we need to have all-season access, and the best way to do that is by working through the communities that are most directly impacted by development. www.canadianminingjournal.com

2018-02-15 2:57 PM

Since 2009, the government has been working to modCMJ: ernize the Ontario Mining Act. You’re now on Phase 3 – what are the latest changes coming for mining companies?

can be informed immediately, in real time. This is important for us to do, being consistent with the recognition and affirmation of existing Aboriginal and treaty rights, and also being respectful of private land owners. We’ve advanced the process of consultation for Indigenous communities, which is one of the first parts of the act that began in 2009 was to have in the preamble ackowledgement of Aboriginal land and treaty rights and that’s been an important barometer of our work ever since then. We are working on a new process to increase engagement and consultation for advanced exploration and mine production. This will involve ministry staff and community members participating in a joint review process with industry on large new or existing projects, and this process will begin when an applicable mine closure plan is received by the ministry for advance information.

We’re moving to an online mining claim registration MG: system and electronic minig lands administration system, which will provide 24-hour, seven-day-a-week, real-time, self-serve access to mining claim registration. Over the past four years we’ve been consulting with the mineral industry and it prepare for the transition. The new mineral land administration system will officially be launched on Apr. 10. But there’s no question, this is about us catching up to other jurisdictions that have moved to online claims staking.

The government provided some guidelines about the CMJ: expecations and requirements for Aboriginal consultaCapacity building for Aboriginal communities to engage tion in the first phase of the modernization. Do you have any indication CMJ: in consultation remains an issue. You talked a bit about that this has helped to reduce conflict and improve communication how you’re helping Ring of Fire communities build capacity; is there between the industry and communities?

anything you’re doing on a wider basis for Aboriginal communities?

I think it will increase communication between indusWe believe the path to reconciliation is through MG: try and communities. Through these changes to the MG: strengthening relationships with Indigenous peomining act, we have indeed introduced new rules and tools that ple, including socioeconomic development. These relationships provide clarity and certainty to industry to help build positive relationships with surface rights owners, and ensure consultation with affected Indigenous communites. Now, when a minHeavyDutyFeedersAd.qxp_Layout 1 2/8/18 10:45 AM Page 1 ing claim is put in place electronically, Indigenous communities

need to be built on meaningful partnerships, and the vision that Indigenous people themselves have for their futures. So we continue to work with Indigenous leaders on the broader benefits CONTINUED ON PAGE 24

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Q&A from resource development which may include capacity building measures. We have an Aboriginal Participation Fund (APF), which supports consultation capacity, education and relationship building as it relates to mineral exploration and development. Through the APF, the ministry is helping to foster new opportunities to build and strengthen relationships among Indigenous community organizations, and government and industry, so we are quite excited about the work we’ve been doing in that regard, and the funding we’ve been able to provide to prepare communities – not only for the Ring of Fire, but for other mining developments across the province. The mining industry is the largest private sector employer of Indigenous people across the country. We want to make sure that that is as much in partnership as possible, and that’s the work that we’re doing with both industry and Indigenous leadership.

approaches for future engagement in the forestry and the mining sector. So we are in the midst of a new phase of engagement with First Nations partners to discuss key parameters of potential resource revenue sharing frameworks and we’re very glad to be working with the Ministry of Natural Resources and Forestry and the Minister of Indigenous Relations to move this important file forward. The issue of resource revenue sharing has been someCMJ: thing that Aboriginal communities have been asking for for a long time. Is there a reason it wasn’t introduced as part of the modernization of the Ontario Mining Act?

We felt the issue was a larger piece of the relationship MG: between our government and the First Nations and we decided to bring it together by putting together the document The Journey Together. That’s the way that we worked with the First Nations and we will continue to do that.

CMJ: We are committed to working with Indigenous comThe modernization of the Mining Act is almost complete. MG: munities to ensure they can participate in and beneCMJ: Assuming that the Liberals are re-elected this summer, fit from economic opportunities in resource related sectors. In can we expect anything new from you on the mining file? What is your government’s take on resource revenue sharing with Aboriginal communities?

May 2016, the government released the document The Journey Together: Ontario’s Commitment to Reconciliation with Indigenous Peoples, which will see Ontario working with Indigenous partners to address the legacy of residential schools, close gaps and remove barriers, support Indigenous culture, and reconcile relationships with Indigenous people. And this includes a commitment to engage with Indigenous partners on approaches to enhance participation in the resource sector by improving the way resource benefits are shared. As part of that commitment in 2016, Ontario undertook exploratory discussions with First Nations organizations to discuss potential resource sharing principles, models and proposed

We’re going to continue to look for ways to improve MG: investment in the mining sector in the province, that’s something we think about every single day. The modernization of the Mining Act has been an important part of us making the mining industry in Ontario more attractive and we’ll coninue to work closely with the Ontario mining industry with our Indigenous partners on other opportunites. Of course, there’s a thing called an election in the middle of all this, so we’ll have to see how things go, but we’ve worked hard to engage in partnership with Indigenous communities and the mining sector itself. CMJ

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Ontario

TAHOE INVESTS IN

Timmins T

immins, Ont.-based junior Lake Shore Gold was acquired by Tahoe Resources in 2016 in a friendly, all-stock deal valued at close to $1 billion. For Tahoe, which already had mines in Guatemala and Peru, the merger brought new gold production, exposure to a low-risk jurisdiction in an established gold camp, and diversification. “The combination with Lake Shore Gold enhances Tahoe’s position as the new leader in precious metals by adding another low-cost operation in Timmins, one of the most prolific gold camps in the world,” said Tahoe CEO Kevin McArthur at the time. “We are impressed by the long-term presence and see tremendous regional opportunities going forward.” 26 | CANADIAN

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Issues at Tahoe’s biggest operation, the Escobal silver mine in Guatemala, which produced 21.2 million oz. silver in 2016, have underlined the benefits of diversification. Escobal has been shut down since July 2017, when the operation’s mining licence was suspended amid allegations that consultations did not take place with local Xinka Indigenous communities before the mining licence was granted. While the country’s Supreme Court has since ruled the licence should be reinstated (and that the Ministry of Energy and Mines must now consult with Xinka communities), the Constitutional Court heard an appeal of that judgment in October 2017, and has yet to make a ruling. www.canadianminingjournal.com

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Underground work on the Bell Creek shaft. CREDIT: TAHOE RESOURCES

Tahoe’s Ontario operations, which produced 167,000 oz. of gold last year, can’t make up for lost production from Escobal, but it does offer a low-risk base for future growth. Tom Laughren, director of corporate responsibility for Tahoe Canada, says Tahoe has invested heavily in the Timmins operation, which consist of the Timmins West and Bell Creek underground gold mines. “We are a Canadian company so I think our plan always was to strengthen our Canadian assets,” says Laughren, a former FEBRUARY/MARCH 2018

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two-term mayor of Timmins. “Timmins and Canada in general, they are great places to work,” he said, citing the mining experience of the local regulators and the wider community’s understanding of mining, including local First Nations. “Timmins has been mining since 1909 and is very supportive of mining; (The community) recognizes its importance to its economy and its future.” For Lake Shore – now doing business as Tahoe Canada – the merger also brought advantages, including access to capital the company needed to deepen the shaft and extend the mine life at its Bell Creek mine, 20 km northeast of Timmins. CONTINUED ON PAGE 28

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Ontario

Working on the Bell Creek shaft. CREDIT: TAHOE RESOURCES

“The opportunity was looked at for a number of years by Lake Shore, but it became an issue of how we were going to finance it,” said Peter Van Alphen, vice-president of operations at Tahoe Canada. “One of the benefits of us joining up with Tahoe was that we now had the ability to finance it and we could actually realize this dream.” Bell Creek shaft Commercial production at Bell Creek, the smaller of Tahoe Canada’s two Timmins operations, began in early 2012. The operation also contains a processing plant that handles ore from both Bell Creek and Timmins West. The shaft-deepening project is expected to double production at Bell Creek to around 80,000 oz. gold a year. Budgeted at US$80 million, the project will see the 300-metre existing shaft refurbished and extended to 1,000 metres depth. The shaft, which will have the ability to skip up to 4,000 tonnes per day of ore and waste, is on track to be in operation this fall. Productivity at the mine is set to get a big boost as the shaft will provide a much quicker route to the surface for ore and greatly reduced travel time for the workforce. For miners, it will shave off about 1.5 hours of travel time – they currently drive up to 8 km down a ramp to get to the lower areas of the mine, which takes about 45 minutes each way. The company’s production target is to mine 1,800 tonnes of ore per day via the new shaft. Bell Creek hosts proven and probable reserves of 1.8 million tonnes grading 4.35 g/t gold for 245,000 oz. The company believes the orebody is open at depth, so the shaft extension will set it up to exploit the mine at depth with a much shorter haul distance. The current life of mine plan goes down to about 1,200 28 | CANADIAN

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Crew underground at Bell Creek. CREDIT: TAHOE RESOURCES

metres, but inferred resources have been defined below that. The Tahoe merger brought more than access to capital for the shaft project to the Timmins team – it made the option of completing the project in-house a reality. Van Alphen and many of the other members of the operations team in Timmins have a background in mining contracting. For that reason, building the project using primarily internal resources seemed like the right thing to do. “For one, we believed we’d do it for a lower cost by doing this internally, and two, there’s wonderful ownership by our people,” Van Alphen explains. “From an employee point of view, there’s great value in us seeing this as being our project, not something that somebody else is doing.” Tahoe made the decision to move forward in mid-2016 and the shaft is expected to be commissioning in late summer, with ramp-up through the end of 2018. “It’s been a challenge, but it’s been our challenge – it’s been a stretch to us in how we set up teams and how we operate with each other,” Van Alphen says. “But I think, for everybody www.canadianminingjournal.com

2018-02-15 2:58 PM

Pouring the one-millionth oz. of gold at the Bell Creek mill. CREDIT: TAHOE RESOURCES

involved, it’s been an amazing process.” Van Alphen adds that it was an opportune time for the project. With the mining contracting industry a little slow at the time, there were skilled people available to complement the company’s in-house resources. “For the most part, the thought behind what we’re building there has come from in house – even most of the engineering was in house.” That extends to the overall approach of the company, Van Alphen says. “We tend to try and do things a bit more in house than probably most would.”

Timmins West mine. CREDIT: TAHOE RESOURCES

Timmins West mine The Timmins West mine, 18 km west of Timmins, consists of the Timmins, Thunder Creek, and most recently, 144 Gap deposits. Commercial production at the Timmins deposit began in early 2011 and at Thunder Creek a year later. The 144 Gap deposit was discovered in 2014 and began production in 2017. The Timmins West complex has proven and probable reserves of 7.2 million tonnes grading 3.21 g/t gold for 737,800 oz. Both the Timmins and Thunder Creek deposits have potential to be expanded at depth, but 144 Gap, which hosts the CONTINUED ON PAGE 30

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The big success of Tahoe Canada in Timmins is really the people.

majority of the resource at Timmins West with 5.2 million tonnes grading 3.12 g/t gold for 525,500 oz. gold, will keep the company busy for several years. The Gold River project, about 4 km south of Timmins West is one of the company’s near-term exploration properties. It hosts indicated resources of 117,400 oz. gold in 700,000 tonnes grading 5.29 g/t gold and 1 million inferred oz. in 5.3 million tonnes grading 6.06 g/t gold. While the deposit contains refractory gold, Van Alphen says that challenge may actually represent “an opportunity in the making” as other refractory ore exists in Timmins – the problem has been in getting it processed. “Right now we see Gold River as being high on the priority list in terms of the next step,” he says, adding permitting is still at an early stage. If Gold River is developed, a milling facility with a float circuit and possibly pressure oxidation would be required. One option being considered for the processing of this ore could be to add this capability to the Bell Creek mill, which would allow it to process both free and refractory gold through different feeds in the same facility. When Lake Shore acquired Bell Creek in 2007, it refurbished and upgraded the mill, designing the front end of the plant for 5,500 t/d. Overall, the nameplate capacity of the conventional CIL/CIP mill plant is 3,600 t/d, but it can handle up to around 4,500 t/d. Tahoe Canada also has several other exploration projects in the region, including the Whitney project near Bell Creek, which has the potential to developed as an open-pit/underground operation. Focus on productivity, safety Overall, cash costs at the Timmins operations in 2017 are expected to be US$650-700 per oz., with all-in-sustaining costs (AISC) at US$1,000-1,100 (precise figures were slated to

be released in late February, after press time). At its existing projects, Tahoe Canada is looking at improving – TOM LAUGHREN, DIRECTOR OF CORPORATE both productivity and RESPONSIBILITY FOR TAHOE CANADA safety. “Trucking right now is a huge part of our business and we can stumble and fall on our trucking very quickly,” Van Alphen says. “We’re looking into inexpensive ways to be able to monitor the movements of trucks so that we can get better productivity out of them and get information into the supervisors’ hands.” The division is also six months into an initiative that has seen front-line supervisors equipped with tablets loaded with health and safety software. The software aids in, amongst other things, the gathering of data related to reported hazards in the work place and tracks the timely correction of these hazards. “One of the issues I think every mine has is when there’s an adverse condition, ensuring that it gets rectified and fixed as fast as possible to take that risk out of the workplace. This is helping us to close the loop on that,” Van Alphen says. “We use technology now to accelerate that process of getting us to where we can identify what are some of the leading indicators that are causing people to get hurt and how do we get them fixed before they have an opportunity to hurt somebody.” He adds: “We’re already starting to see the benefits of that and we’ve had an incredibly good take-up in terms of the supervisors using the tool.” In the future, the Timmins operations will be looking at other technologies that can help improve efficiencies in the operations. But for now, technology is being adopted where it makes sense, and fits the budget. After all, technology is just a tool. “The big success of Tahoe Canada in Timmins is really the people,” said Laughren. “We CMJ have very, very good people that work for us.”

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Pure Goldâ&#x20AC;&#x2122;s Madsen project, in Red Lake, Ont. CREDIT: PURE GOLD

SIX low-capex By Alisha Hiyate

GOLD

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Ontario When the price of gold was on the ascent about a decade ago, the growing costs of building a gold mine seemed – if not justified, then – forgivable. Now that the yellow metal has avoided the same degree of volatility for several years, and seems somewhat stable in the US$1,100-1,300 per oz. range, development plans have come back down to earth. To be sure, there are still some projects in the works in Ontario with $1 billion-plus price tags – but they are generally being advanced by a joint venture instead of by a single owner. For example, Iamgold’s $1-billion Cote gold project, which is at the feasibility stage, is now being advanced with 30% partner Sumitomo. And Premier Gold Mines has brought in Centerra Gold as a 50% partner at its $1.3-billion Greenstone project, now in permitting. But a new crop of gold projects is on the rise in Ontario. Lower capex and generally higher grade, these development projects sport refreshingly modest price tags. Here’s a look at six of them.

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Ontario

Pure Gold geologist Robert Scott mapping geology at Madsen. CREDIT: PURE GOLD

MADSEN – Pure Gold

Pure Gold, which began a feasibility study for its Madsen gold project in the Red Lake district in December, says what sets its project apart is grade. “Our view is there is a real scarcity of quality, high grade deposits and assets around the world,” says Pure Gold’s president and CEO, Darin Labrenz. “With a grade of ten grams per tonne, that puts Madsen into the top few percentile worldwide, so it truly is unique from a grade perspective.” A historic producer, with mining beginning in 1935, Madsen has already delivered 2.5 million oz. of gold at an

average grade of 9.9 g/t gold. A preliminary economic study released last September estimated the mine could churn out another 66,100 oz. of gold per year for 14 years at a price tag of only $50.9 million. And the economics? The PEA pegged the project’s post-tax internal rate of return (IRR) at a hefty 47%. Life of mine average cash costs were pegged at US$595 per oz. The study also projected an after-tax net present value (NPV) of $258 million, using a 5% discount rate, a gold price of US$1,275 per oz., and an exchange rate of US$0.80. Madsen holds indicated resources of

5.8 million tonnes grading 8.9 g/t gold for 1.6 million oz. Inferred resources add another 587,000 tonnes grading 9.4 g/t gold for 178,000 oz. The PEA looked at mining only 3 million tonnes of the resource with a life of mine diluted head grade of 10 g/t gold. Pure Gold acquired Madsen in 2014 from Claude Resources for $11.2 million after what Labrenz calls “a long pursuit.” Claude put it into production in the late 1990s, but had to suspend mining in 1999 after 18 months of mining because of the low gold price. Their work, however accounts for some of the newer infrastructure onsite, including a 600 t/d mill and tailings infrastructure. The operation is still permitted, having been put on care and maintenance when mining was suspended. An existing portal and ramp reach 150 metres depth; the PEA mine plan outlines development to 1,430 metres depth. The company is aiming to make a production decision by the fourth quarter of this year. As part of the feasibility work, Pure Gold is collecting a 7,200-tonne bulk sample in the second quarter. While high-grade gold deposits can boast impressive grades, they can be tricky to understand in practice. Deposits like Goldcorp’s Cochenour and Rubicon Minerals’ Phoenix mine – both in Red Lake – have run into problems when it was discovered that the geology was misinterpreted or poorly understood. At Cochenour, Goldcorp had to roll The mill building at Harte Gold’s Sugar Zone. CREDIT: HARTE GOLD

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When you look at the Madsen orebody, it extends for several kilometres in strike length and 1.2 km downplunge, so there is pretty fantastic continuity from the geologic perspective. – DARIN LABRENZ, PURE GOLD’S PRESIDENT AND CEO.

back resources by 37% to reflect a better understanding of the geology and orientation of the deposit. Rubicon’s indicated resources declined by 91% after trial mining revealed the geology of the deposit was more complex than thought. In the case of Madsen, however, there’s a long history of production and an incredible amount of closely spaced drilling that assures Labrenz that the mineralization is continuous. “Our fears are greatly reduced given you have 36 years of operating history,” he says. “When you look at the Madsen ore-

body, it extends for several kilometres in strike length and 1.2 km downplunge, so there is pretty fantastic continuity from the geologic perspective. The resource itself is defined by 1.1 million metres of drilling and the average spacing between drill holes is about 6.5 metres, so it’s a very well defined resource.” Pure Gold says the structurally controlled high grade gold mineralization is hosted near ultramafic and basalt contacts at Madsen. As it moves toward production, the company is also focused on expanding resources. It boosted indicated resources

at Madsen by 40% last August and at the end of the year, announced first resources for two satellite deposits – Russet South and Fork.

SUGAR ZONE – Harte Gold

After beginning construction last summer, Harte Gold is well under way toward beginning production at its Sugar zone, 80 km east of Hemlo gold camp, in the third quarter. While the company has proceeded without a feasibility study, at press time, it had just released an updated resource estimate with a PEA update expected to follow. Indicated resources now total 2.6 million tonnes grading 8.52 g/t gold for 714,200 oz. of gold, with inferred resources adding 3.6 million tonnes at 6.59 g/t gold for 760,800 oz. of gold. The new resource tripled contained ounces. Using the previous smaller resource, a 2012 PEA estimated preproduction capital costs at the Sugar zone at $119 million. The study outlined a 750 t/d CONTINUED ON PAGE 38

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Ontario

Argonaut Gold’s Magino project, near Wawa. CREDIT: ARGONAUT GOLD

underground operation producing 66,100 oz. gold annually over a six-year mine life. The study was based on potentially mineable resource after dilution and recovery of 1.6 million tonnes grading 8.1 g/t gold. Harte Gold has completed a 70,000tonne bulk sampling program at the narrow vein Sugar Zone to better define resources, the continuity of mineralization, mineralized widths and modelled grades. The bulk sample also confirmed that the project metallurgy is simple, recoveries are high, that longhole mining is an appropriate mining method, and the cost of contract mining. This year Harte Gold, which is led by Stephen G. Roman, plans to conduct 80,000 metres of regional and near-mine exploration drilling. The project is permitted for Phase 1 production at 540 t/d or roughly 50,000 oz. of gold per year.

MAGINO – Argonaut Gold

While it’s not a high grade project, Argonaut Gold has looked for ways to reduce capex at its Magino project, 40 km northeast of Wawa. In November, the company completed a feasibility study for the open pit project that sought to reduce capital costs compared to a 2016 prefeasibility, which pegged the initial capex at US$540 million. Looking at a smaller scope 10,000 t/d operation (down from 30,000 t/d), the feasibility pegged capital costs at US$293 million. With sustaining and closure costs, plus contingency funds, the total capex comes to US$405 million. The lower rate of mining extends the mine life to 17 years from 10, with annual production averaging 115,700 oz. of gold (down from 295,000 oz.) The economics of the project are

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somewhat reduced, but still profitable. The after-tax NPV is US$288 million and the IRR 19.5% (compared with US$415 million and 22.9%, respectively, in the previous study). Cash costs are projected to be US$669 per oz., up from US$582 per oz. The study used a gold price of US$1,250 per oz., an exchange rate of US$0.78 and a 5% discount rate. Proven and probable reserves at Magino total 59 million tonnes (diluted) with a diluted grade of 1.13 g/t gold for 2.1 million oz. Magino hosted a past producing underground mine from 1988-92, which was focused on higher grade gold contained in narrow, quartz veins and stockworks. Argonaut’s open pit operation would target disseminated, lower grade mineralization that occurs in a broad envelope around higher grade structures. While it hasn’t made a decision on development yet, Argonaut submitted its environmental impact statement (EIS) for the project in January 2017. The company plans to continue with the permitting process in 2018 then evaluate whether to move forward with a smaller scale operaMagino core. CREDIT: ARGONAUT GOLD

www.canadianminingjournal.com

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Ramp entrance at Gowest Gold’s Bradshaw project. CREDIT: GOWEST GOLD

tion or to bring in a joint venture partner to help fund the 30,000 t/d option.

est recently completed a 29-hole underground infill drill campaign. The drill holes reduced the spacing between holes

to between 12.5 and 20 metres in the area of the bulk sample. Gowest plans to use ore sorting technology that would double the grade up to 10 g/t, including with the bulk sample, reducing costs and tonnage to the mill. Ramp development began last May, and so far, the company has completed 1,600 metres of underground development down to the 60-metre level. The bulk sample is fully permitted, and expects to receive permits for full production this year. In February, the junior announced the discovery of two new, high grade zones CONTINUED ON PAGE 40

BRADSHAW – Gowest Gold

Gowest Gold is targeting commercial production at its Bradshaw project in the Timmins gold camp by 2019. The company’s first gold revenue will come sooner – in the second quarter. At press time, Gowest had signed an agreement with Shandong Humon Smelting for a US$3-million prepayment for gold concentrate it will produce via a 30,000tonne bulk sample at Bradshaw. About 14,000 tonnes of development material are already stockpiled for sorting, milling and sale as concentrate. A 2015 prefeasiblity study indicated that with an initial capex of US$21.5 million and sustaining capital of US$21.4 million, the underground mine would produce an average of 40,500 oz. per year over 8.5 years. Using a gold price of US$1,200 per oz. gold and a discount rate of 5% and an exchange rate of US$0.80, the study pegged Bradshaw’s after-tax NPV at US$29.2 million and its IRR at 27%. The study focused on mining the upper 500 metres of the orebody, but drilling has intersected mineralization to 1,350 metres, indicating potential for expansion. Bradshaw hosts indicated resources of 2.2 million tonnes grading 6.19 g/t gold for 422,000 oz., including probable reserves of 1.8 million tonnes grading 4.82 g/t gold for 277,000 oz. gold. Inferred resources add 3.6 million tonnes grading 6.47 g/t gold for 755,000 oz. To better define the deposit and in preparation for the bulk sample, Gow-

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WORLD CLASS JURISDICTION GROWING RESOURCE HIGH GRADE GOLD TSX:ER OTCQX:EANRF

Updated Eau Claire Mineral Resource Estimate* Category

Tonnes

Grade (g/t Au)

Contained Au (Oz)

M&I Inferred

4,170,000 2,227,000

6.16 6.49

826,000 465,000

Open pit and underground delineated. High Grade Open Pit (240k ozs @ 5.97 g/t) Conservative interpretation. Shallow Deposit (1MM ozs <400 metres depth) Advancing to Growth Preliminary Economic Focused DrillingAssessment Underway (H1 2018). Advancing to Preliminary Economic Assessment (H1 2018)

Eastmain Mine Project mineral resource conversion (Q4 2017). *For more information and footnotes related to the mineral resource update, *For more information and footnotes related to the mineral resource please see Eastmain press release dated, September 11, 2017.update, please see Eastmain press release dated, September 11, 2017.

Proven Management Focused Management High GradeExploration Resource Aggressive Aggressive The RightExploration Location World Jurisdiction in James Bay Quebec 3 Class Key Assets in James Bay, Quebec

www.eastmain.com www.eastmain.com CANADIAN MINING JOURNAL |

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Ontario

Ramp reconditioning at Pure Gold’s Madsen project. CREDIT: PURE GOLD

at Bradshaw, including Bradshaw North. In a drill hole about 25 metres north of existing reserves, Bradshaw North returned a 4.2 metre interval grading 20.91 g/t at 68 metres depth, including 1.9 metres of 42.15 g/t gold. Last year, Gowest entered a non-binding agreement with Northern Sun Mining to acquire a 50% interest in the nearby Redstone mill, which has a throughput capacity of 1,500 t/d.

GOLIATH – Treasury Metals

Treasury Metals has begun a feasibility study at its Goliath gold project, 20 km east of Dryden, in northwestern Ontario. And, despite the project’s name, development costs at Goliath are projected to be quite reasonable. An updated PEA released in March 2017 estimated that an open pit and underground mine at Goliath could produce 88,000 oz. of gold and 160,000 oz. of silver annually over 13 years with an initial investment of only $133.2 million. Another $132.5 million in sustaining capital would fund underground development. The study pegged the 2,500 t/d project’s after-tax NPV at $306 million and its IRR at 25%. Goliath holds open pit measured and indicated resource of 18.2 million tonnes at 1.26 g/t gold and 5.3 g/t silver for 737,800 oz. of gold and 3.1 million oz. of silver. Underground measured and indicated resources total 2.4 million tonnes grading 4.95 g/t gold and 14.7 g/t silver for

376,600 oz. gold and 1.1 million oz. silver. For 2018, Treasury Metals is planning 27,000 metres of drilling, a resource update and the completion of a feasibility study. The junior envisions first production in late 2020, after arranging financing and beginning construction in 2019. Mineralization at Goliath is contained in a 100-150-metre-wide central zone composed of intensely altered felsic metavolcanic rocks with minor metasedimentary rocks. The zones contain high grade shoots in regular intervals.

CLAVOS – Sage Gold

Sage Gold’s Clavos gold project, in the Timmins gold camp, is permitted to run up to 700 tonnes per day. A 2013 PEA forecast initial capex for Clavos at only $8 million to build an underground mine that would produce 145,448 oz. of gold over a seven-year mine life. Using an 8% discount rate, the

project’s post-tax NPV was calculated at $13 million and its IRR at 47%. Sage Gold is working on a resource update and prefeasibility study for Clavos, as well as conducting a bulk sample program. Having been mined briefly between 2005 and 2007, Clavos has infrastructure in place, and has seen development down to the 285-metre level. Sage Gold says dewatering work is about 90% complete. The company has a life-of-mine toll milling agreement in place with McEwen Mining’s Black Fox mill, 10 km away. A resource estimate calculated in 2012 puts indicated resources at Clavos at 1.3 million tonnes grading 4.81 g/t gold for 194,600 oz. Inferred resources add 796,000 tonnes grading 4.7 g/t gold for 120,000 oz. Gold mineralization at Clavos occurs in quartz and quartz-carbonate veins, occurring most often in mafic and ultramafic volcanic rocks in proximity to porphyry intrusives. CMJ

Coarse gold in drill core from Treasury Metals’ Goliath project. CREDIT: TREASURY METALS

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Northern Ontario is home to a dense ecosystem of suppliers, miners, R&D organizations and academic institutions that are propelling the mining sector forward. CMJ reports.

SUDBURY SUDBURY INNOVATION CLUSTER

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The Sudbury How the city came to be a global centre of mining innovation The fundamental piece for us is the fact that we’re basically a fullservice regional capital sitting right in the mining camp.

expertise, their skills through udbury has a long history as an important mining innovation,” Wood says. “But centre in Canada, with the first of many nickelat that time they really only copper mines, Murray, built in the late 1880s. had two customers.” But over the past 15 years, the city has become The worry was the lack of known as a mining innovation hub, with a dense and sustainability for both busiextensive network of service and supply companies and nesses and the wider comresearch institutions whose influence stretches well munity whenever there was a beyond northern Ontario. downturn. The feat is all the more impressive considering the “It’s a cyclical industry so price of nickel – the commodity that was most responsome of those slowdowns, sible for Sudbury’s rise as a mining centre – is far from especially in the late ’90s, there booming. (It was US$6.21 per lb. at press time.) were some companies that Ian Wood, director of economic development at the basically said, ‘Well what do I city of Greater Sudbury, says that the reason for the –IAN WOOD, DIRECTOR OF ECONOMIC do – 80% of my production is strength of the city’s mining service and supply sector DEVELOPEMENT AT THE CITY OF going to Vale and if they have stems from the needs of thetwo dominant nickel giants GREATER SUDBURY an extended shutdown, I’m in the area – Glencore (formerly Falconbridge) and laying people off.’” Vale (formerly Inco). In response, the city’s economic development group, and As the two companies externalized things like maintenance and equipment supply over the years (a global trend), the people leaders at Laurentian University and at the service and supply who used to perform these functions as employees started their companies themselves started thinking about how they could own businesses to serve the miners, rather than moving away. shift from a local, two-customer base to reach regional, national, “In the 1990s, we identified the fact that we had this network and even international customers. On the supplier side, the Sudbury Area Mining Supply and of small and medium-sized enterprises that were doing an effective job supplying our two major companies and honing their Service Association (SAMSSA) was formed about 15 years

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Opposite: A drone photo of Dynamic Earth and Sudbury’s Big Nickel. CREDIT: GREATER SUDBURY DEVELOPMENT CORP. Above: (Clockwise starting top left) Science North building. CREDIT: GREATER SUDBURY DEVELOPMENT CORP.; A VelociCalc Multi-Function Ventilation Meter, which measures air velocity, temperature, humidity and differential pressure. CREDIT: NORCAT; The Vale Living with Lakes Centre. CREDIT: GREATER SUDBURY DEVELOPMENT CORP.; Participants and organizers of the Goodman Gold Challenge, presented by the Goodman School of Mines and Laurentian University. CREDIT: LAURENTIAN UNIVERSITY; Laurentian University campus. CREDIT: LAURENTIAN UNIVERSITY

ago and has been instrumental in helping local suppliers sell their cutting-edge technology internationally. Over the past 5-10 years, Laurentian University, has transformed itself into “a hotbed of mining research.” Its outreach to the wider mining industry has garnered $10 million plus donations from mining magnates David Harquail, Ned Goodman, Stan Bharti and Rob McEwen and their families. The Centre for Excellence in Mining Innovation (CEMI) works to address the commercialization gap to help bring new and innovative technologies to market, while the Norcat test mine allows companies to test new technology and to shorten the innovation cycle to get products from the R&D stage into miners’ hands more quickly. MIRARCO (Mining Innovation Rehabilitation and Applied Research Corp.), meanwhile, is all about pure research and development. And the provincially, federally and municipally funded Northern Ontario Exports program links suppliers across a network of five northern Ontario cities: Sudbury, Timmins, North Bay, Thunder Bay and Sault Ste. Marie. The program helps companies find mentors and put together export plans. “That’s been tremendously effective,” Wood said of the sixyear-old program. “We’ve got some companies that are seeing FEBRUARY/MARCH 2018

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the majority of their markets now are outside the country.” He adds: “The last large strike at Vale in ’09/’10 was instructive because it truly meant that many of the companies were able to weather the storm.” Lastly, Wood says a spirit of collaboration and sharing of information has been extremely important to growing the cluster. “We’ve moved from a situation of competition with the guy across the street to a true understanding that the competition is global, and that if we can learn from each other in the community, we can all be more competitive on a global basis.” Now, Wood says he gets several inquiries a year from other communities around the world looking to replicate the “Sudbury recipe.” However, the city is in a pretty unique situation thanks to its location in the Sudbury Basin. “The fundamental piece for us is the fact that we’re basically a full-service regional capital sitting right in the mining camp,” Wood says. “So the ability for companies to experiment and to make a deal with other companies to get something at the ore face and try it out, is much simpler because you’re not remote from where it’s happening.” CMJ

CANADIAN MINING JOURNAL |

2018-02-15 3:05 PM

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2018-02-15 2:39 PM

SUDBURY INNOVATION CLUSTER

Sudbury mining cluster grows its global position By Dick DeStefano

ichael Denham, the new CEO of the Business Development Bank of Canada, recently acknowledged the fact that small to medium-sized enterprises (SMEs) represent 99.8% of all Canadian companies, produce 66% of jobs in the country and represent more than 50% of Canada’s GDP. Denham noted that, in an era of globalization and increasing numbers of “free trade agreements,” we need more SMEs generating more growth to sustain our economy. While this applies across multiple sectors, it is especially valid in the most sophisticated underground technology centres in Canada. In northern Ontario, the 500-plus mining supply and service companies based there employ 23,000 people – double the number of direct mining occupations in northern Ontario – and are an important component of wealth creation and innovation. Free trade agreements, which are proliferating in the global market, will be advantageous to SMEs offering sophisticated technologies that will enhance productivity and efﬁciencies. These companies are very visible in our mining cluster in northern Ontario. The Sudbury Area Mining Supply and Service Association (SAMSSA) has seen a membership shift over the years from companies offering traditional services to much more emphasis on innovative products and services with exciting additions to their existing software and hardware. This speaks well for the future. The fact that companies have a long history of mining expertise and the capabilities to develop customized products based on customer needs is one of the unique features of the SAMSSA cluster. As an example, RDH Mining Equipment is leading the way in developing lithium batteries-based underground mining equipment, which reduces ventilation costs and reduced dependency on diesel fuel emissions. Six units were recently delivered to a Russian mine. RDH’s successes resulted in an $8-million takeover by SMT Scharf AG in February. Another example in North Bay is WipWare with its highly sophisticated Fragmentation process. There are multiple examples of innovation continually emerging from small startups in North Bay and Timmins. One of the biggest keys to maintaining a market share in the future is the commitment of governments at all levels to support regional initiatives and provide ﬁnancial packages and incentives that enhance investments and expanding operations. Agencies that support innovation and programs that add value to exporting companies is critical for success.

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Northern Ontario is blessed with a number of highly sophisticated agencies and educational institutions that are available to assist in the development of new products.

Research mining centres that focus on new ideas are also essential. Northern Ontario is blessed with a number of highly sophisticated agencies and educational institutions that are available to assist in the development of new products and ideas. In fact, both agencies and institutions focused on mining innovations are quite prevalent in SAMSSA’s membership and have been very forthright in providing funds, faculty and students to move ideas into first stages of commercialization. The Centre for Excellence in Mining Innovation (CEMI) in Sudbury was instrumental in developing a proposal for a pan-Canadian body of partners to expand and improve the mining industry that made it through the first round of the federal government’s new $950-million Super Cluster initiative. (Winners from the short list will be announced early this year.) Banking and financial centres have also developed a significant understanding of the needs and funding requirements required by mining supply and service companies and have added designated personnel to assist in accessing suitable programs. This development has grown significantly in northern Ontario with major banks leading the way. Sudbury, which has the largest number of mining supply and service companies in northern Ontario with 320 companies, recently received endorsements as a key sector from the Greater Sudbury Development Corporation 2015 study entitled “From the Ground Up.” The study emphasized the significant wealth and employment this sector plays and will continue to play in the region. “In many ways the success in mining and related supply services has shaped the way institutional and industry support structures that have developed in the city, which have in turn shaped other sectors of the economy. The mining supply and service sector will continue to be the primary driver of economic activity. In short, the community should continue to support the growth and development of an innovative mining CMJ supply and service sector,” reads the report. DICK DESTEFANO is the executive director of SAMSSA (www.samssa.ca). CANADIAN MINING JOURNAL |

2018-02-15 3:07 PM

SUDBURY INNOVATION CLUSTER

MINERS GRAPPLE WITH

digital disruption By Janice Leuschen

n Feb. 1, mining companies and mining suppliers gathered for the ﬁrst Beyond Digital Transformation conference in Sudbury, Ont., to discuss the changing technological needs of mines and to network. The conference was hosted by Partners in Achieving Change Excellence (PACE), a change management company. “We decided to do this conference because we’ve been working with quite a few mining companies and were privy to their up and coming innovations and technological roadways,” said Nėha Singh, president and CEO of PACE. “There is a huge inflection of how mining companies are adapting technology right now and we know our supply and services sector have very successful companies. We want to know what the mining companies want.” Representatives from four mining companies – Barrick Gold, Glencore, Vale and Dundee Precious Metals – gave

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The new differentiators of mining companies will be in their ability to leverage data and to successfully adopt to technological change. –RICK HOWES, PRESIDENT AND CEO OF DUNDEE PRECIOUS METALS

presentations to the 260 people in attendance at the one-day event. “I think it’s more about answering the question: Why should I need my organization transformed?” said Patrick Marshall, manager, automation projects, innovation, at Barrick Gold. He noted that half the Fortune 500

companies have gone out of business or merged since 2000, saying that their demise came because they didn’t make changes in technology. “What happened that they didn’t identify or respond to changes in technology?” Marshall asked. “We as an industry must be prepared to adapt, because whether we like it or not, disruption might be right around the corner.” A clean slate A new way of mining must be imagined. “If we were to wipe the slate clean and rethink how we build a mine and operate mines – erase all the assumptions, redesign the system – I think we can put together a very different system,” Marshall said. To make these changes, mining companies are looking for partners to work A panel of mining company representatives discuss technology and innovation at the inaugural Beyond Digital Transformation conference in February. CREDIT: REBECCA BOSE

www.canadianminingjournal.com

2018-02-15 3:08 PM

with in designing and implementing new technologies. “From the mining site’s prospective, we have problems we needed to solve,” said Sean McCarthy, engineering superintendent at Barrick. “If you have a gap between what’s actual and what’s desired, you have a problem.” They discovered part of the problem was inefﬁcient data handling. “Everything we had was in Excel,” McCarthy said. “As good as (Excel spreadsheets) are, they are terrible for handling data. But they are our favourite crutch.” The company recognized a shortfall in computer skills. “We realized we needed to move quickly towards the digital frontier, and understand how we were going to use digitization to improve our mine,” said McCarthy. Barrick tasked out equipment and jobs to people, until all of the people were busy and called it digital task assignment co-ordination. This system improved flexibility and reliability. “Automation has changed a lot in the last ten years,” McCarthy said. “Deploying an automated system is a lot easier now.” Samantha Espley, director of Vale Base Metals’ Technical Excellence Centre of Mining and Mineral Processing, addressed the business side of change. “If we can transform our business in the sense of transforming the bottom line, then we are going to have a longterm sustainable future,” Espley said. “It is something we are very much committed to.” Vale operates ﬁve mines in Sudbury: Coleman, Creighton, Garson, Totten and Copper Cliff. Totten mine is the model for Vale. “This is the template we want to use for all the other mines to come in behind.” But change isn’t always easy. As with Barrick Gold and Glencore, engaging the employees was critical, bringing together the IT department, operating department and capital projects team. “There is lots of unnecessary waste, and I think this is what we are trying to control,” Espley said. “Get rid of the waste FEBRUARY/MARCH 2018

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and the downtime and turn our mines around in terms of the rate we develop and mine.” To control the waste, Espley believes data collection and relatability is key. “We need to relate data much quicker than we do today and we need a tool to do that.” Espley said. “We need the

seamless integration of all data.” New technology must improve the production of a mine. “It has to be clear in everyone’s head that we are not talking about putting in technical innovation for the technical innovation’s sake, it has to address the CONTINUED ON PAGE 48

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CANADIAN MINING JOURNAL |

2018-02-15 3:08 PM

SUDBURY INNOVATION CLUSTER

Left: Rick Howes, CEO of Dundee Precious Metals; middle: Samantha Espley, director of Vale Base Metals’ Technical Excellence Centre, Mining and Mineral Processing. CREDIT: REBECCA BOSE

problem; it must provide a solution.” Espley added that women will be a big part of the change. “We have to improve to sustain the business, but we also see an opportunity to thrive, not just survive.” The future of mining The keynote speaker was Rick Howes, president and CEO of Dundee Precious Metals. “I don’t think anyone can fully predict what the future of mining is going to look like,” he said. “I think there are a few signs and clues, if you stop to think about it, of what’s possible.” He believes it’s up to the leadership within the mining industry to lead the way. “I’m not talking about the operational mining companies,” Howes said. “It’s the entire ecosystem of mining which includes all of our suppliers, universities, governments and all the stakeholders.” Technology, Howes said, is changing all businesses. He thinks the mining industry can use many of these new technologies: big data and advanced analytics, augmented and virtual reality, cloud computing and systems integration, advanced simulation, industrial internet of things, sensors, drones, machine learning and AI, advanced robotics, and chainblock technology. He believes these technologies will make the industry more flexible to market variations. “The threat is that If you don’t move 48 | CANADIAN

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An audience of 260 attended the one-day conference. CREDIT: REBECCA BOSE

We need to relate data much quicker than we do today and we need a tool to do that. We need the seamless integration of all data. –SAMANTHA ESPLEY, DIRECTOR OF VALE BASE METALS’ TECHNICAL EXCELLENCE CENTRE OF MINING AND MINERAL PROCESSING.

quickly enough to adapt, you risk becoming obsolete,” Howes said. “And the opportunity is that you transform the way you do things for better, safer, more efﬁcient, sustainable mining.

“The new differentiators of mining companies will be in their ability to leverage data and to successfully adopt to technological change. Those who can leverage the data best, those who can adopt to the technological changes the fastest, are going to be the most successful mining companies.” Kevin McAuley, manager of sustainable development and innovation at Glencore and Greg Sandblom, operations and business technology leader, Sudbury Integrated Nickel, Glencore also give a presentation. “If you make it simple, you can get started,” McAuley said. “You can make great progress with very simple changes.” Sandblom said one biggest problems and accomplishments was getting IT and operations to work together. The next PACE conference will be held in early February 2019 and extended to two days. CMJ www.canadianminingjournal.com

2018-02-15 3:08 PM

SUDBURY INNOVATION CLUSTER

WipWare closes the innovation gap by Janice Leuschen

etting new innovations and products into mines has been difﬁcult, because mining companies have been resistant to change. Called the commercialization gap, inventors have had difﬁculty convincing mines to use their new inventions. But that situation is changing. “It seems as though, and I’m going to be very critical here, we lack creativity,” said Tom Palangio, president and CEO of WipWare in North Bay, Ont. “We don’t have vision. The mining industry would still be using donkeys and picks and shovels if we weren’t forced to do something better.” After cutting production costs to the bone over the past decade, mining companies are now looking for new products and services that will make them more productive and more competitive. “It’s partly due to the economic environment we are working in,” Palangio said. “An ounce of gold is the same anywhere in the world and, if you can’t be the low-cost producer, you can’t be competitive.”

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Tom Palangio got his product, WipFrag software, into the mining industry by pairing it with his consulting services. In the mid-1990s, Palangio left his long-time employer, where he worked as an explosives expert, and set up his own explosives consulting business, tak-

Top: WipWare can provide granulometry data in the field. Bottom: WipWare enables data-based decision making in the control room. CREDIT: WIPWARE

CONTINUED ON PAGE 50

CANADIAN MINING JOURNAL |

2018-02-15 3:09 PM

SUDBURY INNOVATION CLUSTER ing with him some patents. Through an agreement with his former employer, Palangio was banned from selling his product in North America for several years. The WipFrag software diagnoses the quality of a blast and allows companies to change the explosives used to create the kind of blast they need. “For us to be able to measure it in real time, actually opened a whole bunch of doors to the automated process,” he said. Palangio worked in Panama, Peru, Chile and South Africa and Australia. “I’m there for explosives consulting, but also selling the WipFrag software that I have,” he said. “I’m wearing two hats. It’s a nice ﬁt, because you bring in an explosives consultant and he starts using a piece of equipment that can give you some tangible results and measure productivity increases.” At the end of the three years, Palangio had an international distribution network and international contacts for his product

but no North American contacts, because he wasn’t allowed to sell domestically. Palangio found that companies in developing countries were more open to new technologies, partly because the new products were developed in North America. Still, North American companies resisted change. “It’s as if we encourage uniformity,” he said. “We punish people who try something unusual and fail. ‘You didn’t do it the way you were supposed to and you failed.’ Failure seems to be a big deterrent for a lot of people.” Able to sell in North America since 1998, Palangio has continued to sell his product outside of North America with an eye to breaking into the domestic market – using his successes to sell domestically. “I would use those case histories as ammunition to convince or coerce the people here that they should try it too,” Palangio said.

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The mining industry would still be using donkey and picks and shovels if we weren’t forced to do something better. –TOM PALANGIO, PRESIDENT AND CEO OF WIPWARE

‘Now is the time’

Palangio worked with several organizations to help him grow his business – COREM in Quebec, the Centre for Excellence in Mining Innovation (CEMI) and CANMET. He said these organizations were helpful, but the process was slow. Palangio believes the market for new products and services for mines is opening. “Now is the time to do it,” Palangio said. “People are looking for better ways.” CEMI has identiﬁed the commercialization gap as a barrier to getting new innovations into mines. “We need to be able to change the mining industry to be open to new technologies,” said Bora Ugurgel, the managing director for the Ultra-Deep Mining Network (UDMN) hosted by CEMI. “And Tom is correct in that they might not be open to it, but I think it’s a question of packaging it and using the right language, so they really see how it’s going to beneﬁt them.” Ugurgel says new innovators typically need help marketing their products as solutions to mining companies’ problems. “What is currently happening is that people are coming up with a new idea on how to do something a little bit better and they will present that to a mining company,” Ugurgel said. “But the mining companies’ main interests are about increasing productivity and bringing more ore to surface. I think what has been missing with some of those inno-

www.canadianminingjournal.com

2018-02-15 3:09 PM

Real-time online data with WipWare’s Solo technology at an aggregates operation.

vators is that they, perhaps, never do the business case. If that tangible value isn’t created early on, it will be difﬁcult for anybody to buy.” CEMI will not take on a project that

doesn’t result in a commercial product. It offers commercialization support services to its innovators and network partners to ensure their innovations make it to the commercial market. CEMI does an assessment of each company they work with looking at the company’s capability on the technical and business side. They look at ﬁve main areas – marketing, human resources, sales, technical and outreach capabilities. A score is given and gaps are identiﬁed; they then work with the inventor to make a business plan. “Bottom line is that we want them to be able to minimize risk of the commercialization of the great idea,” Ugurgel said. “Lower its cost to the market – no second mortgage to afford this – get a faster return on investment and mitigate

CREDIT: WIPWARE

the possibility of a great idea never getting to market.” Ugurgel doesn’t think it’s necessary to seek out clients by a specific geographic area first. “If you have the chance to prove that this can be done in your backyard, it might give you a leg up on the international market you are looking for,” he said. “That doesn’t mean, as a business guy, you should be looking at international or national markets first.” He said most mining companies in Canada and North America are the same global mining giants and will buy a product or service for all their mines, regardless of their location. “It all comes back to being able to create the right solutions and make the right pitch, at the right level and let your business partners identify where best to demonstrate the value you bring to the CMJ table.”

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CANADIAN MINING JOURNAL |

2018-02-15 3:09 PM

SUDBURY INNOVATION CLUSTER Signing an agreement to create the China Canada Centre for Deep Mining Innovation. CREDIT: MIRARCO

Linking the world to Canadian mining By Vic Pakalnis

n Dec. 7th, 2017, a high level delegation from Northeastern University (NEU) in China came to Laurentian University in Sudbury, to sign an international agreement to establish the China Canada Centre for Deep Mining Innovation (CCCDMI). Madam Xiaomei Xiong (Secretary of the Party Committee, Northeastern University), along with four colleagues from the Northeastern University of China, signed the agreement in the presence of Laurentian’s Serge Demers, acting president and provost, Dr. Rui Wang, vice-president research and myself, president and CEO MIRARCO Mining Innovation. Two weeks later, Canadian delegates Ross Sherlock of Metal Earth, Caleb Leduc of CROSH, Dr. Ming Cai of Laurentian University/MIRARCO and myself, met with ofﬁcials at Northeastern University located in Shenyang, China. A two-day networking event includ-

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ing an industry workshop was held. The purpose of the China Canada Centre for Deep Mining Innovation is to establish leading global research built on a collaboration platform in deep mining and to stimulate innovation and co-operation between industry and academic institutions in China and Canada. In 2006, Northeastern University ranked sixth among universities in China. Laurentian University is among the largest mining schools in Canada.

Representatives from Northeastern University in China and Laurentian University in Sudbury. CREDIT: MIRARCO

Mutual interests Three areas of interest initially identiﬁed were rock mechanics, geology and safety. At the request of one of the industry partners, Shandong Gold, a fourth focus area was added; ecological mining, or as it is known in Canada, green mining. In earth sciences, Laurentian University’s Metal Earth is already breaking new ground in understanding metal deposit mechanisms. This fall, a long stream of seismic trucks were used in the Abitibi-

Temiskaming area to map a cross section of the earth, down through the mantle. Given that China’s Archean geology is similar to Canada’s Archean geologic province, discussions are under way in China to improve mapping of a Chinese gold-bearing region. Mine safety is of paramount importance in Canada. In 2016, Ontario, with 40 operating mines in the province, had zero mining fatalities. Research will be www.canadianminingjournal.com

2018-02-15 3:10 PM

INVESTORS WANTED

The purpose of the China Canada Centre for Deep Mining Innovation is to establish leading global research built on a collaboration platform in deep mining and to stimulate innovation and co-operation between industry and academic institutions in China and Canada. conducted on safety technology such as vehicle proximity detectors, safety culture and comparisons between regulatory approaches in Canada and China. In rock mechanics, the laboratory facilities of Northeastern University were indeed impressive. Prof. Xia-Ting Fung, the vice-president research at Northeastern University, is a former president of the International Society of Rock Mechanics and the lab has two true triaxial compression testing machines. Coincidentally, much as Canada’s SNOLAB has an association with Laurentian University and is located at Vale’s Creighton mine, the Chinese equivalent of that lab resides deep within a mountain in China where the rock mechanics work is being done by Northeastern University – perhaps another link between Sudbury and Shenyang. Northeastern University is “moving at the speed of trust,” which, as it turns out, is pretty fast! Four mining companies from Canada and four from China are being recruited to deﬁne problems to be solved and to provide in-ﬁeld laboratories to advance innovation and to advance safe, productive and sustainable mining in both of our countries to make a difference to mining globally. CMJ VIC PAKALNIS is president and CEO of MIRARCO Mining Innovation

FEBRUARY/MARCH 2018

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Novel Process for Gold, Precious Metals and Microdiamond Recovery and Deposit Evaluation (ET-SAP) and Very Effective Process for Neutralization of Any Biological and Some Chemical Contamination in Water, Soil and Air (ET-SOS) Envi-Tech Inc. (ET) has developed two advanced, unique, very economic and environmentally friendly processes. One process (ET-SAP) for the recovery and deposit evaluation of gold, platinum, other precious metals and microdiamonds; and a second process (ET-SOS) for the neutralization of any biological and some chemical (such as cyanide, hydrocarbons) contaminants in water, soils, slurries and air. Jerzy (George) Janiak, D.Sc., Ph.D. (chemistry technology), gemologist and the owner, president and research director founded Envi-Tech, Inc. in 1992 in Edmonton, Alberta. The company is currently headquartered in Calgary, Alberta. ET’s ET-SAP process works by adding a proprietary adsorber to a water-ore slurry which adsorbs free precious metals and microdiamonds until fully loaded (10-15kg of metals and 4 kg of microdiamonds per ton of adsorber). Once loaded it is quickly removed from the slurry and the metals and microdiamonds are easily unloaded from its surface. The main features of ET-SAP are: 1. Recovery yield of up to 99% for particles smaller than 800 microns; 2. Processing time from a few minutes up to half an hour, depending on type of reactor used; 3. Effective on any type of ore with a wide range of gold concentration of 0.05 to 20 oz per ton; 4. Capital and operating costs about 8 times lower than cyanide extraction; 5. Uses no toxic chemicals and recycles of all water. ET’s other process, ET-SOS, uses super-oxidation gases (SOG) and a unique method of applying these gases to polluted material. It can neutralize any biological (such as bacteria, fungi, viruses, etc.) and some chemical (such as cyanide, hydrocarbons) contaminants in water, soils, slurries and air. Its main features are: 1. Air and electricity are the only components needed; 2. Equipment for ET-SOS is fully hermetic, very efficient, easy to use and safe, no moving parts and needs little maintenance; 3. Does not require any chemical components delivered from the outside. Both technologies, ET-SAP and ET-SOS, were tested on hundreds of samples and used in the laboratory and mobile units, as well as on a semi-commercial scale in mines or field units. We are looking for investors, licensees, partners for joint ventures, or anyone interested in buying the full rights to one or both of these technologies, or all of Envi-Tech, Inc. If interested, please contact Jerzy Janiak at jerzy.janiak@shaw.ca or at tel/fax 403-208-4761 or cell 403-852-9909. We can provide you with 20-40 page portfolios containing detailed information on each process. Our website is www.envi-tech.ca

CANADIAN MINING JOURNAL |

2018-02-15 3:10 PM

THE GIANTS OF CANADIAN MINING ARE COMING TO LONDON, UK April 24 & 25, 2018 CANADA HOUSE, Trafalgar Square, London, UK

Ross Beaty

Kelvin Dushnisky

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Chairman Pan American Silver

President Barrick Gold Corporation

Chairman Franco Nevada Corporation

Canadian Mining Hall of Fame Inductee

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Co-hosted by The High Commission of Canada in the United Kingdom

For more information please visit: northernminer.com/canadian-mining-symposium

CMJ FebMar2017_Ad pages.indd 54

2018-02-15 2:39 PM

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CMJ FebMar2017_Ad pages.indd 55

2018-02-15 2:40 PM

Cobalt

gold

IS THE NEW

Juniors fuelling a new rush in Northern Ontario By Marilyn Scales

orthern Ontario has seen its share of staking rushes. Nickel at Sudbury toward the end of the Nineteenth Century 1883. There was silver at Cobalt, the cradle of Canadaâ&#x20AC;&#x2122;s mining industry, in the early Twentieth Century and uranium at Elliot Lake in mid-century. There was gold at Kirkland Lake and Timmins in the 1910s, at Red Lake in the 1920s and at Hemlo in the 1980s.

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Now interest is returning again to the western shores of Lake Temiskaming and the town of Cobalt â&#x20AC;&#x201C; not for silver but for cobalt metal. Cobalt has become one of the most sought after metals for its applications in energy storage (batteries) and electric vehicles. According to some analysts, by 2020 fully 75% of all lithium-ion batteries will contain cobalt in some chemical form. It also has applications in catalysts, superalloys, colouring, magnets and more. As demand soars, supply has not. The shortage led to the price more than dou-

bling last year to US$36 from US$15 per lb. BMO is predicting at least a US$40/ lb. price by the end of this year. About half the global supply of cobalt currently comes from the Democratic Republic of Congo, a fact that raises ethical concerns. Much of it is recovered by artisanal miners in unsafe conditions and by child labourers. Canadian cobalt would be the flag bearer for responsible production. And the recent introduction of new cobalt mining taxes in DRC will make that country less appealing to investors. www.canadianminingjournal.com

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Left: First Cobalt’s Drummond property. CREDIT: FIRST COBALT Right: Looking toward the Bellellen project from First Cobalt’s Frontier North property. CREDIT: FIRST COBALT; Core from Castle Silver Resources’ Castle project, a former producer; First Cobalt’s land package includes a permitted cobalt refinery. CREDIT: FIRST COBAL

China relies on DRC for as much as 90% of its cobalt needs, and China is the largest producer of cobalt chemicals so in demand in the clean energy sector. Canada has produced cobalt for well over 100 years as a byproduct of base metal mining. That is the situation for 90% of the world’s output. If the plucky juniors scouring Northern Ontario have their way, they will be this country’s first primary cobalt producers. The desire to monetize cobalt has lead Vale to create the first cobalt streaming opportunity. Sherritt International FEBRUARY/MARCH 2018

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recently placed an offering with share purchase warrants priced on the movement of the cobalt price. Readers might expect other innovative means to boost cobalt investment before long. Here is a look at a few of the explorers active in the Cobalt Camp. First Cobalt Corp. First Cobalt is the largest landholder in the Cobalt camp, thanks to its takeover of both Cobalt One and CobalTech last summer. The merger made First Cobalt the largest explorer in the world, accord-

ing to president and CEO Trent Mell. “Once you put these three companies together we would have about 45% of the prospective properties in the Cobalt, Ontario, camp,” he said. The company’s properties cover more than 100 sq. km in the camp and include 50 past producing mines and a mill. First Cobalt divides what it calls the Greater Cobalt project into three parts. In the north near the town of Cobalt, it holds the former Juno, Silverfields, Hamilton, Drummond, Conisil, Ophir CONTINUED ON PAGE 58

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and Silver Banner properties. In the central part to the south, it has the Caswell and Woods Extension properties. In the south near the former town of Silver Centre, it holds the Keeley-Frontier and Bellellen historic producers. The latter two properties are the subject of intense activity. The Keeley and Frontier mines were originally developed separately but combined in 1961. Their heydays were 1922 and 1931 as silver miners. Between their openings in 1908 and closure in 1965, together they produced 3.3 million lb. of cobalt and 19.1 million oz. of silver. Drilling results released in December 2017, highlighted 0.12% cobalt over 5.5 metres including 0.68% cobalt over 0.34 metre in the Woods vein system. The Woods and Watson veins accounted for 80% of the output in the southern area of the Cobalt camp, noted First Cobalt. Grades exceeding 1% cobalt over 0.42 metre were intersected in the KeeleyCo No. 1 vein and 0.6% over 0.38 metre in the KeeleyCo No. 2 vein; the two veins are two metres apart and interpreted as being

parallel structures to the Woods vein. First Cobalt also intersected zinc and lead as part of a hydrothermal halo around the vein systems, something the company said had not been reported before. Two drill programs are under way at the old Bellellen mine, which began operations in 1909. The ore contained a high proportion of cobalt relative to silver, and the lackluster silver production led to its closure in 1943. The 12.3 tonnes of ore recovered graded 9.25% cobalt and 11.55% nickel. One of the drill programs will target the north-south trending Bellellen vein system as well as the northeast trending Frontier No. 2 vein system. In January First Cobalt reported promising drill results from the Wood Extension target, just north of KeeleyFrontier. Highlights included 0.57% cobalt and 1.4% nickel over 0.4 metre from a new vein between Woods and Watson. Another hole returned 0.34% cobalt over 0.4 metre that may be an extension of the Watson vein system. First Cobalt’s 2018 drill program also includes at least 20,500 metres at

central and northern properties as well as the 3,000 metres for Bellellen and Keeley-Frontier. Besides the large portfolio of exploration properties and former silver mines, First Cobalt now owns the small cobalt refinery that formerly belonged to Cobalt

The Canadian Mining Journal is published 10x a year. We also provide a free Daily News service that is emailed four times a week. To subscribe to our magazine and/or receive the Daily News email, please visit canadianminingjournal.com and click on the big red “Newsletter” box on the upper right corner. The Buyers Guide is published every November and is also available online via our website. You can register your company at any time. There is no charge to be listed. Just follow the prompts once you click on “Buyers Guide” from our index at canadianminingjournal.com. For any questions about subscribing or having your company listed on our Buyers’ Guide, please contact us at 416-510-6891 or 1-888-502-3456, ext. 2 or 43734. You can email the Publisher, Robert Seagraves, directly at rseagraves@canadianminingjournal.com.

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Clockwise from left: Frank Basa, Castle Silver Resources’ president and CEO and Douglas Robinson. CREDIT: CASTLE SILVER RESOURCES;

A winch at Cobalt Power Group’s Smith property. CREDIT: COBALT POWER GROUP

Artisanal mining in the Democratic Republic of Congo. CREDIT: QUANTUM COBALT

One. The refinery is the only permitted cobalt refinery in North America capable of producing battery materials. It is located in Cobalt only 25 km from the Keeley-Frontier project. So confident is First Cobalt in the metal’s outlook that it is funding a district-scale study with the Mineral Exploration Research Centre (MERC) at Laurentian University in Sudbury, Ont. The program will examine the structural controls of mineralization in the Cobalt camp. The aim is to improve exploration targeting, create a regional map, and to create a 3-D model that includes field mapping and geochemical studies. Castle Silver Resources Castle Silver owns the historic Castle and Beaver mines at Gowanda, about 85 km north of Cobalt. It, too, is prioritizing the hunt for cobalt over silver with hopes of redeveloping both mines beginning with level one at Castle. Consideration is being given to building a 600 t/d mill at Castle. (Readers should note that the company proposed changing its name to Canada Cobalt Works in February.) The former Castle silver mine operated intermittently between 1917 and 1989. During that time it produced 9.4 million oz. of silver and a little more than 376,000 lb. of cobalt from the No. 3 shaft. The property contains two more shafts and an adit. A bulk sample from the first level at Castle tested 1.48% cobalt, 5.7 g/t gold, and 46.3 g/t silver. A 14.8% cobalt concentrate was produced FEBRUARY/MARCH 2018

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from it. Additional nearby bulk samples assayed up to 3.1% cobalt. More bulk sampling is planned. Phase one drilling at Castle returned 1.55% cobalt, 0.65% nickel, 0.61 g/t gold and 8.8 g/t silver over 0.65 metre less than 5 metres from surface. Chip samples from a quartz-carbonate vein on level one assayed 1.06% cobalt, 5.3% nickel and 17.5 g/t silver. The Beaver mine, close to the town of Cobalt, produced 7.1 million oz. of silver from 1907 and 1940. It is adjacent and connected at depth to the Temiskaming mine, which was a silver producer until 1989. Castle confirmed high grade mineralization in 2017 with selected hand-cobbled material at surface averaging 4.68% cobalt, 46.9 g/t silver, 3.09% nickel and 0.08 g/t gold. A 20-kg grab sample from the waste rock pile in 2013 tested 7.98% cobalt, 3.98% nickel and 1,246 g/t silver. Castle Silver has an advantage over other cobalt hunters because it has created the proprietary Re-2OX process to produce cobalt sulphate intended to be suitable for battery sector customers. The process is also being tested for the recovery of cobalt, lithium and other metals from used computer and phone batteries. Cobalt Power Group Forsaking its earlier forays into graphite and copper, the Cobalt Power Group jumped into the cobalt rush in 2016 with the acquisition of the Smith property. It has been successfully raising funds and

acquiring more properties ever since. The company now holds 87 sq. km and two active projects in the Cobalt camp and has set a 2018 exploration budget of $2.4 million. After acquiring the Smith property in September 2016, Cobalt Power set about staking several adjacent properties, and began line cutting by the end of the year. Muck pile sampling was undertaken with promising results and Cobalt Power mounted a drill program in 2017. The drill program intersected several high grade cobalt-silver zones with most holes showing multiple mineralized veins. The work also confirmed that The Smith property lies in the same stratigraphic and structural setting as the historic Deer Horn mine that reportedly produced 11 million oz. of silver and 100,000 lb. of cobalt until its closure in 1966. Cobalt Power released highlights of the phase one, nine-hole Smith drill program in November 2017. The best cobalt assay was 1.71% and 42.5 g/t silver over 0.1 metre in hole 17-03. The same hole returned 0.07% and 0.23% cobalt. The holes also had good silver, gold, zinc, lead, nickel, and copper values. South of the Smith property is the CONTINUED ON PAGE 60

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Canadian cobalt project near Silver Centre. The project includes the former Silver Eagle mine, which produced about 8,000 oz. of silver from a six-metre section around 1908. Several known cobalt occurrences have been identified on the Canadian claims and reported in the Ontario mineral deposit inventory files. In August 2017, Cobalt Power established a strategic alliance with Hochschild Mining Holdings. Hochschild has the option to joint venture one of Cobalt Power’s properties of its choice and will appoint one director to the Canadian company’s board. Cobalt Power hopes to share in Hochschild’s experience in mining steeply dipping, narrow epithermal veins and also to tap into the larger company’s access to capital. Quantum Cobalt Of its three properties in the Cobalt camp, Quantum Cobalt is eager to test the historic Nippissing Lorrain mine. The property is located south of the town, near Silver Centre. It consists of two claims that produced cobalt, silver and nickel sporadically during the last century. Grades have been reported as high

as 14.75% cobalt and 261 g/t silver. For $1 million and 5 million common shares, Quantum Cobalt was granted an option to acquire 100% of the property in November 2017. By December, the company had completed a first pass of exploration consisting of prospecting, mapping and sampling. The work was focused on the Staples vein, which had historical production of 5,525 lb. of cobalt, 3,520 lb. of nickel and about 42,640 oz. of silver. Also in Quantum Cobalt’s portfolio are the Kahuna and Rabbit cobalt-silver properties, near Silver Centre. Kahuna, located 37 km south of the town of Cobalt, was mined in the 1920s, and sampling in the 1960s produced 5 tonnes of material grading 22% cobalt. Quantum Cobalt sent a crew to prospect, map and sample the property late last year. Samples from a historic rock pile assayed 10.59% and 2.22% cobalt. The Rabbit property, 55 km south of Cobalt, is in the early stages of examination. Quantum Cobalt has taken rock and soil samples, the soil samples testing as high as 319.9 ppm cobalt and 0.31 g/t gold. Follow-up is planned.

Cruz Cobalt Cruz Cobalt has four cobalt prospects in Ontario – Bucke, Coleman, Johnson and the newly acquired Lorrain properties. The company also holds properties in British Columbia, Idaho and Montana. Cruz has been most active on the War Eagle property in B.C., but with the recent acquisition of more claims in Northern Ontario, the company may be signalling its desire to return to the town of Cobalt. Cruz recently completed an airborne survey of its Ontario properties and identified six targets. The companies mentioned here are only a few of those hoping to cash in on the cobalt rush. And then there are the byproduct producers such as Glencore and Vale. The outlook for future cobalt demand is certainly bright as society moves away from fossil fuel consumption toward cleaner forms of energy. With global supply tight, there is every reason to expect new producers to contribute greatly to Northern Ontario in the near future. CMJ

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UNEARTHING TRENDS

Canada and the EU – building a resource pipeline By Jay Bailey, EY

eliable and unhindered access to raw materials is vital to a strong European Union (EU) economy. The mining and metals sector is an important source of growth and jobs in its own right, including in remote areas, but its outputs are essential to several other European industries ranging from construction and infrastructure to manufacturing – and many high-tech sectors such as aerospace and renewable energy. Competition for raw materials continues to rise in the face of growing global demand. To ensure security of supply in the future, the EU created The Raw Materials Initiative (RMI). Adopted in 2008 and reinforced in 2011, the strategy has influenced a number of policy decisions, actions and events with the overarching objective of a securing raw materials. Now, the next phase involves a new opportunity for Canada. Canada already shares strong economic, political and cultural ties with the EU and, with the recent conclusion of the Comprehensive Economic and Trade Agreement (CETA), is one of the closest allies to the region. And, as one of the most resource-rich countries in the world and a global giant in mineral exploration and mining, it’s only natural that Canada be considered a partner to the EU in raw materials policies. In January 2017, under the frameworks of the RMI and the Partnership Instrument (a funding instrument for activities that carry EU agendas with partner countries forward), the EU commissioned a study by EY to design and assess the feasibility of a strategic platform to promote a more structured co-operation between Canada and the EU across the NonEnergy Extractive Industries (NEEI) value chain. The focus of the study is to identify areas of collaboration between the areas that would have the most inﬂuence on the investment framework, investments flows and business links. They include: 1 Exchange of good practices in view of an enhanced minerals policy framework and regulatory structure leading to a sound investment climate. 2 Improved public awareness and understanding of the importance of the sector to increase social acceptance at regional and national levels. 3 Accelerated collaboration between Canada and European countries in research and innovation in new mining technologies and sustainable mining practices. Each collaboration area reflects the Canadian and EU experience in the NEEI and has been informed by extensive 62 | CANADIAN MINING JOURNAL

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Canada and the EU stand to beneﬁt enormously from formal co-operation across the NEEI value chain. Both areas share common values and the goal of creating sustainable and responsible mining practices that enable fair economic growth.

research and consultation with stakeholders in the EU, the Member States and Canada, public institutions, mining and equipment associations, mining consulting and services companies, financial institutions, geological surveys and academia. The strategies are also aligned with recommendations in the Study on the Competitiveness of the EU Primary and Secondary Mineral Raw Materials Sectors, published in January 2015 and funded by the European Commission, and the relevant issues of mutual interest that are formally recognized in Article 25.4 on Bilateral Dialogue on Raw Materials of CETA. Canada and the EU stand to benefit enormously from formal co-operation across the NEEI value chain. Both areas share common values and the goal of creating sustainable and responsible mining practices that enable fair economic growth. For Canada, this means increased mining and exploration opportunities in the EU. The EU will benefit from increased domestic production of raw materials in line with RMI objectives. The proposed collaboration areas are currently being reviewed by policy makers in the EU and Canada. Final recommendations will be shared with stakeholders and interested participants at the EU Mining Day at the annual Prospectors and Developers Association of Canada convention held in March in Toronto. What comes after will hopefully be a leading partnership characterized by openness and transparency, co-operation and ideas exchange, and the united pursuit of a sustainable, responsible and healthy mining sector. CMJ JAY BAILEY is Senior Manager in EY Canada’s Advisory Services Practice. He is based in Vancouver. For more information on the EY study, join EU-Canada for two events at PDAC 2018: EU-Canada Mineral Investment Seminar on March 4 at 4:00 p.m. and EU-Canada Exploration & Mining Day on Mar 6. For more information, visit www.pdac.ca/convention.

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