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January 2017
gold RULES MINING IN BC AND THE NORTH
GAHCHO KUE OPENING IMMENSE KSM POTENTIAL Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240
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CANADIAN Mining Journal
JANUARY 2017 VOL. 138, NO. 01
www.canadianminingjournal.com
FEATURES MINING IN BC AND THE TERRITORIES 8 Seabridge Gold’s spectacular copper-gold exploration
success has turned the KSM project into one of the world’s largest resource for both metals. All that’s needed now is a major partner.
14 De Beers Canada and Mountain Province Diamonds celebrate the official opening of Canada’s newest diamond mine two months ahead of schedule with the recovery of a 50-ct gem.
14
21 Grassroots exploration at the Amaruq gold project is going to expand the life of Agnico Eagle’s Meadowbank operation by 3.7 million oz and growing.
25 Goldcorp has expanded into the Yukon with the acquisition
of Kaminak Gold, and the advanced Coffee project that came with it shows every indication of hosting close to 5 million oz of gold.
27 Golden Predator has been dealt a winning hand at the 3 Aces
project with two of the highest grade gold outcrops ever found in Yukon on the property, and success at hand.
25
MESSAGE FROM THE AME 29 News from the Association of Mineral Exploration as it
works for its members in British Columbia; plus a list of award recipients.
DEPARTMENTS 5 EDITORIAL | Interim editor Marilyn Scales spells out what respect means to indigenous partners..
6 UNEARTHING TRENDS | Jim MacLean of EY’s Canadian mining
and metals practice explains how the top 10 risks to mining are shifting.
7 FIRST NATIONS | How Nimke Mining Services, an aboriginal
company, incorporates traditional values with state-of-the-art training.
31 CSR & MINING | Michael Torrance of Norton, Rose, Fulbright shines a light on the new Global Reporting Initiative standard.
32 LAW | Sander Grieve and Linda Miestich Dann of Bennett Jones
ponder what the new Trump administration may mean for Canadian miners.
33 IN MY MINE(D) | Delayne Weeks explains how Angkor Gold is
delivering on its ambitious promises as it explores for gold in Cambodia.
JANUARY 2017
03_CMJ Jan2017_Contents.indd 3
27 ABOUT THE COVER
This month’s cover is from Seabridge Gold’s very successful exploration program at KSM. Photo by Kevin Burt Coming in February Canadian Mining Journal takes a look at mining in Ontario, the Ring of Fire, as well as drilling and blasting.
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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2016
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CANADIAN Mining Journal
FROM THE EDITOR
Indigenous community deserves our
January 2017 Vol. 138 — No. 1 38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5 Tel. (416) 510-6789 Fax (416) 510-5138 www.canadianminingjournal.com
Interim Editor Marilyn Scales 613-270-0213 mscales@canadianminingjournal.com Production Manager Jessica Jubb jjubb@glacierbizinfo.com Circulation Manager Cindi Holder 416-510-6789, ext. 43544 cholder@glacierbizinfo.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Sales Western Canada, Western U.S.A. and Quebec Joelle Glasroth 416-510-5104 jglasroth@canadianminingjournal.com Toll Free Canada & U.S.A.: 1-888-502-3456 ext 2 or 43734 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: 1-888-502-3456 ext 2; Fax: 416-447-7658; E-mail: cholder@glacierbizinfo.com Mail to: Cindi Holder, BIG Mining LP, 38 Lesmill Rd, Unit 2, Toronto. ON, M3B 2T5. We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund toward our editorial costs.
JANUARY 2017
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Marilyn Scales
R-E-S-P-E-C-T
T
he holidays have been enjoyed, resolutions made, and the time has come to get a fresh start with a new year. And there is no better place to start than with respect for the indigenous peoples of Canada. In November, the Canadian Aboriginal Minerals Association held its annual conference in Ottawa, and I was privileged to attend. The quality of the program was excellent. It addressed jurisdictional, environmental, legislative, and legal aspects of the industry from both the community and industry viewpoints. Most importantly it addressed the needs and desires of the aboriginal youth who will be tomorrow’s leaders. They will be involved and knowledgeable. Across all of the speakers a few key themes emerged. Indigenous people desire respect – be they First Nations, Metis, Inuit or others. They want our industry to treat them as an important part of the process. Learn about their cultures. Respect how they use their land. And treat them in the same way you would a federal or provincial entity. Start the consultation process as soon as a project is proposed. That means discussing what will happen before the trenches go in or the drills start turning. Waiting until the board allocates development money is far too late to foster understanding. Free prior and informed consent does not always lead to approval of a project. It leads first to discussion and compromise. Sometimes, even then the answer from the indigenous community may be “no” if the damage to the land is seen to be unreasonable or compromises cannot be agreed upon. But beware of the nation that uses its veto as a bargaining chip or scare tactic. There is no need for that if discussions are open and honest, held as equal parties. Then if the project is worthy of building, plan on sharing the profits with the local communities. This can take many forms such as a percentage of the mine’s cash flow, a net smelter royalty on steady or sliding scales. Make plans to invest a fixed amount in the community before the project officially goes ahead. This will help defray the costs of setting up small business or their buying equipment for potential work with the mine. The audience at the CAMA meeting was largely from the indigenous community, and there was a strong message for them, too. Each nation must decide what it wants to get out of a project before consultation begins. How much compensation is appropriate? What training/education will be made available so that members can hold jobs at the project? How much help from the proponent is expected so that communities can establish sustainable small businesses? What lands and waters are especially deserving of preservation? Only when all parties have a clear idea of their goals and needs can discussions between equals take place. As an industry and as project proponents, let us all practise respect for the indigenous peoples of this land. It is a simple noun, but when we use it as a verb, a word that requires CMJ action, respect becomes a powerful force that benefits all sides. CANADIAN MINING JOURNAL
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UNEARTHING TRENDS
Biggest risks for mining companies shift, yet challenges remain By Jim MacLean
A
t this time last year, many mining and metals companies were hunkered down and focused on trying to maintain strong balance sheets while waiting for a turnaround in the sector. Over the last year we saw a glimmer of hope. EY’s Canadian Mining Eye, which tracks mid-tier and junior companies, saw incredible gains in 2016 which was a significant turnaround from 2015. It proves that, after a slow sector for many years, there is movement and change underway. As the biggest risks in the sector shift, mining and metals executives must also shift their perspective on priorities. Cash optimization rocketed into first place on EY’s most recent Top 10 business risks facing mining and metals report. Last year, it wasn’t even on the list. While many are reluctant to say we’re on an upswing, last year’s biggest risk – switch to growth – is no longer the most pressing concern. Mining and metals companies need to walk the fine line of making cost reductions that don’t erode value while offering the biggest bang for the buck, but also preserve the cash they do have.
EY’s risk radar for mining and metals 2016-2017 TOP 10 BUSINESS RISKS
As mining companies look to hold on to cash, traditional models for raising capital are rapidly changing – and access to capital moved up one spot to the second biggest risk on our list. The number of streaming deals has nearly doubled in the past 6|
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THE ONE TOPIC THAT TOUCHES EVERY CORNER OF THE SECTOR, AND IS NOW ALMOST A CLICHÉ TERM, IS INNOVATION. WITHOUT A DOUBT THE MINING INDUSTRY IS IN NEED OF DISRUPTION – FROM THE WAY RESOURCES ARE TAKEN OUT OF THE GROUND, TO OPERATING MINE SITES MORE EFFICIENTLY, TO HOW TO FINANCE PROJECTS.
two years. There were also a large number of royalty agreements, offtake and forward sales as well as divestments of non-core assets in order to free up capital. Investors will likely remain selective and look for low cost, de-risked projects in which to invest. Meanwhile, joint ventures is new to the list this year. We’re seeing a lot more companies entering into joint ventures to help use the cash, resources and technology that stakeholders have but also mitigate potential risk. The downside is if these ventures turn sour they can end up consuming more resources and money than intended. Any company considering one must also complete thorough due diligence. While the sectors biggest risks have changed, others stay the same. Productivity, social license to operate and cybersecurity are all included in our list – and they appear year after year. These issues need to be addressed at the boardroom level, and decisions need to be part of a strategic plan, where priorities build on each other to improve operational excellence. Cybersecurity, in particular, has seen budgets limited but, as we have noted in this column previously, the cost of doing nothing in this space could ultimately cost much, much more. The one topic that touches every corner of the sector, and is now almost a cliché term, is innovation. Without a doubt the mining industry is in need of disruption – from the way resources are taken out of the ground, to operating mine sites more efficiently, to how to finance projects. Innovation is happening, just in small doses. Going forward, the pace of innovation may be forced to speed up as the ‘old’ way of doing things becomes obsolete. As we’ve seen in 2016 with incredibly volatile prices, nothing is certain in the mining sector. By taking a snapshot of where things stand and understand where to focus their energy, companies will CMJ be better positioned to deal with the changing tides. JIM MACLEAN is EY’s Canadian Mining & Metals Leader WWW.CANADIANMININGJOURNAL.COM
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FIRST NATIONS
First Nation mining services business incorporates traditional values with state of the art training
A
boriginal communities are increasingly moving forward with economic development in many different sectors. Mining companies have also become more proactive in regards to environmental protection and First Nation consultation. Nimkie Mining Services Corp. has become an effective part of the process in bridging the gaps between culture and industry. Nimkie, based in Temagami, Ont., was incorporated in 2014, and is a 100% aboriginal owned company. The CEO of the company, Randall Becker, started working with heavy equipment as a summer student at the age of 14. The supervisor, Tom Friday, was a very talented and experienced mechanic, and vehicles and equipment were often repaired with ingenuity and limited resources, which was the case in most First Nation communities at the time. Becker attended Canadore College studying automotive mechanics and later went on to work for contractors in construction, mining exploration and mining companies throughout Northern Ontario. “Some of the people that one works with over a decade or two stand out as being leaders and teachers,” said Becker. One in particular who he had the opportunity to work with was a man named Charlie Berube, who was a master mechanic at the Sherman mine and later a successful contractor. Machinery and vehicles were repaired as required and in most cases everything from tires to engines and hydraulic pumps were rebuilt in the shop. “Education from people like this is the most valuable training a person can receive. There is a long list of supervisors and coworkers who took the time to help and lead by example in other occupations like underground mining, mine-mill operations, construction, and pipeline work. This is the experience that helped build the base of Nimkie Mining Services training programs,” said Becker. In order to make the training programs more effective, Nimkie uses accredited trainers and courses. The courses are delivered in the First Nation communities. This allows the students to remain at home with their families as well as giving the entire community the opportunity to benefit. Being an aboriginal owned company, they have come up with effective ways to encourage traditional beliefs and hunting seasons to take precedent during the heavy equipment and diamond driller training programs. Ed McVeigh, of Canadian Driller Traning from Sudbury and Asabanaka Drill Services in Kasabonika Lake, plays a big role in Nimkie Mining Services delivering the best possible programs anywhere in Canada. Becker believes that the importance of accredited training close JANUARY 2017
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Front Row, left to right: Shawn Batise (Ministry of Indigenous Relations and Reconciliation), Jason Batise (executive director, Wabun Tribal Council). Middle Row: Chief Murray Ray (Flying Post First Nation), Chief Alex (Sonny) Batisse (Matachewan First Nation), Ron Clayton (president and CEO of Tahoe Resources), Chief Walter Naveau (Mattagami First Nation), Sharon Plourde (Wahgoshig First Nation) Back Row: Ken Peterson (negotiator for Wahgoshig First Nation).
to home produces better results with more opportunities for the communities and the people. This also benefits the mining companies and contractors who employ the graduates by lowering the turnover rate and improving the productivity of new hires. “When a relationship between a First Nation community and a mining company is working to the benefit of both parties as well as protecting the environment for future generations, mining becomes an essential part of living and prospering in the north for everyone,” said Becker. Nimkie is currently in the process of opening a Class 11 aggregate pit near Temagami that will require drilling, blasting, crushing and quality control. The Township of Temagami has shown support for this project as did a lot of the residents who would prefer mining return to Temagami region. The project will hopefully go into production in June 2017. There is also plan to hold practical training for heavy equipment and surface diamond driller courses on the site for both urban aboriginal people and non-aboriginal people. The practical portion of the courses will be held in Temagami. Nimkie (www.NimkieMining.net) will continue to strive for improved training and better relationships between First Nations CMJ and the mining industry. CANADIAN MINING JOURNAL
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MINING IN BC
SHOVEL READY STRATEGY Photo: Seabridge Gold Inc.
Seabridge seeks base metal major for KSM development
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WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:24 PM
Photo: Seabridge Gold Inc.
Photo: Kevin Burt
Exploration is paying off in the wilderness of northwest British Columbia. Facing page: The KSM camp.
By Marilyn Scales
S
omething very interesting is happening in the scenic mountains of northwest British Columbia. That’s where Seabridge Gold is defining its KSM copper-gold project near Stewart. KSM stands for Kerr-Sulphurets-Mitchell, the three deposits originally outlined on the property. But given Seabridge’s success at drilling new mineralization, we might add Iron Cap and Deep Kerr to the alphabet. (No, that becomes unwieldy.) So we will stick with KSM, a project with the potential to be the largest mine in Canada if the option of a 170,000-t/d concentrator is built. “KSM is one of the few projects in the world that is shovel ready,” chairman and CEO Rudi Fronk told CMJ. All the necessary permits are in place to begin construction and build the tailings storage facility. The company has also negotiated a benefits agreement with the Nisga’a Nation, who have thrown their support behind the project. As have the mayors and councils of Smithers and Terrace, BC. Seabridge makes no secret of the fact that it is seeking a joint venture partner to develop the project with a price tag of JANUARY 2017
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The KSM project is a world beater: in terms of both copper and gold reserves it contains more metals than any other project on the globe. either $5.0 billion or $5.5 billion. “KSM needs a major base metal company as a JV partner. We’ve already signed confidentiality agreements with 10 of them,” said Fronk. “The big companies are willing to pay up from for a life-of-mine copper concentrate contract.” He added that Seabridge has turned down joint venture proposals in the past. The company is being picky about what its participation and share of the profits will be. “It might even come down to our taking a gold stream and the major company taking all the copper,” Fronk speculated. “One of the key metrics in any joint venture will be that the major only earns
its interest if it takes the project through to production by a certain date,” he insists. The KSM project is a world beater: in terms of both copper and gold reserves it contains more metals than any other project on the globe (and that includes Agua Rica, Galore Creek and Donlin). With 45 million oz of gold in reserves, Seabridge would be among the 10 largest gold companies (between AngloGold and Goldcorp). And the property contains more than 10 billion lb of copper. Getting the goods
Seabridge began assembling the KSM property in the late 1990s when it could acquire the assets for pennies on the dollar. The total outlay was only $15 million, and the company later sold off some of the assets for $50 million. The original property, consisting of the Kerr and Sulphurets deposits, was optioned to Noranda (later Falconbridge) in the early 2000s, but Seabridge regained 100% ownership in 2006 with a shares-and-warrants deal. With the release of the maiden Mitchell resource estimate the following year, all two million warrants were exercised putting CONTINUED ON PAGE 10
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MINING IN BC $27 million in the Seabridge treasury, and the company hasn’t looked back. With the discovery of the Iron Cap deposit and the North Mitchell and Deep Kerr zones, KSM now estimated to contain 49.8 million oz of gold and 13.6 billion lb of copper in its measured and indicated resources. There are also inferred resources containing an additional 30.8 million oz of gold and 19.2 billion lb of copper.
The property lies within an area known as Stikinia, which is a terrain consisting of Triassic and Jurassic volcanic arcs that were accreted onto the Paleozoic basement. Early Jurassic sub-volcanic intrusive complexes are scattered through the Stikinia terrain and are host to numerous preciousand base metal-rich hydrothermal systems. These include several well-known copper-gold porphyry systems such as Galore
KSM Mineral resources as of May 31, 2016 Tonnesa (millions)
Au (g/t)
Au (million oz)
Cu (%)
Cu (million lb)
Ag (g/t)
Ag (million oz)
Mo (ppm)
Mo (million lb)
Measured
750.1
0.63
15.1
0.17
2,844.0
3.2
77.4
58.0
96.0
Indicated
2,152.4
0.50
34.7
0.23
10,784.0
2.5
175.8
40.0
189.0
Inferred
2,719.2
0.35
30.8
0.32
19,208.0
2.0
178.4
20.0
173.0
Fronk estimates that Seabridge will have spent $240 million at KSM by the end of this year for exploration, permitting and engineering. The geological potential keeps the drills turning.
Creek, Red Chris, Kemess, Mt. Milligan, and Kerr-Sulphurets. The Kerr deposit is a strongly deformed copper-gold porphyry, where copper and gold grades have been upgraded due to remobilization of metals during later
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and/or possibly syn-intrusive deformation. Alteration is the result of a relatively shallow, long lived hydrothermal system generated by intrusion of monzonite. Subsequent deformation along the Sulphurets thrust fault was diverted into the Kerr area along pre-existing structures. The mineralized area forms a fairly continuous, north-south trending, west dipping irregular body measuring about 1,700 metres long and up to 200 metres thick. Deep drilling since 2012 has identified two sub-parallel, north-south trending, steep west dipping mineralized zones that appear to coalesce near the topographic surface. After significant deep drilling was completed at the Kerr deposit, an updated geological interpretation and subsequent updated mineral resource model were completed. That new model forms the basis for the 2016 mineral resources and mineral reserves. The Sulphurets deposit comprises two distinct zones referred to as the Raewyn copper-gold zone and the Breccia gold zone. The Raewyn zone hosts mostly porphyry style disseminated chalcopyrite and associated gold mineralization in moderately quartz stockworked, chlorite-biotite-sericite-magnetite altered volcanics. The Raewyn zone strikes north-easterly and dips about 45° to the northwest. The Breccia zone hosts mostly gold-bearing pyritic material mineralization with minor chalcopyrite and sulphosalts in a potassium-feldspar-siliceous hydrothermal breccia that apparently crosscuts the Raewyn zone. The Breccia zone strikes northerly and dips westerly. The Mitchell deposit is underlain by foliated, schistose, intrusive, volcanic, and clastic rocks that are exposed in an erosional window below the shallow north dipping Mitchell thrust fault. These rocks tend to be intensely altered and characterized by abundant sericite and pyrite with numerous quartz stockwork veins and sheeted quartz veins (phyllic alteration) that are often deformed and flattened. Towards the west end of the zone, the extent and intensity of phyllic alteration diminishes and chlorite-magnetite alteration becomes more dominant along with lower contained metal grades. In the core of the deposit, pyrite content ranges between 1% to 20%, averages 5%, and WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:25 PM
Photo: Seabridge Gold Inc. and Google Earth
Life-of-Mine Annual Metal Production Comparison Metal
Unit
PEA
PFS
Gold
Oz
592,000
540,000
Copper
Million lb
286
156
Silver
Million oz
2.8
2.2
Molybdenum
Million lb
nil
1.2
Base Case After Tax Economic Analysis
Flowsheet for a 130,000- t/d mill with molybdenum concentrate production.
PEA
PFS
Initial capital cost
$5.5 billion
$5.0 billion
Net cash flow
$16.7 billion
$10.0 billion
Net present value @ 5%
$3.4 billion
$1.5 billion
Internal rate of return
10.0%
8.0%
Payback period
6.4 years
6.8 years
Assuming gold at $1,230/oz, copper at $2.75/lb, silver at $17.75/oz, molybdenum at $8.49/lb, and an exchange rate of US$1:C$0.80.
typically occurs as fine disseminations. Gold and copper tends to be relatively low grade but is dispersed over a very large area and related to hydrothermal activity associated with early Jurassic hypabyssal porphyritic intrusions. In general, within the currently drilled limits of the Mitchell deposit, gold and copper grades are remarkably consistent between drill holes, which is common with large, stable and long lived hydrothermal systems. All of the KSM deposits are open at depth. JANUARY 2017
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Forward thinking
In October 2016, Seabridge filed a 43-101 report containing both a pre-feasibility study and a preliminary economic assessment for KSM. It’s not that the company can’t make up its mind. It’s just that the property has so much potential, every possibility needs to be considered. Both parts of the report rely on the same resource estimate; however only the PEA includes the inferred tonnage. Total measured and indicated resource for the four deposits is 2.9 billion tonnes grading 0.54
g/t Au, 0.21% Cu, 2.7 g/t Ag and 44 ppm Mo. The inferred portion is another 2.7 billion tonnes grading 0.35 g/t Au 0.32% Cu, 2.0 g/t Ag and 29 ppm Mo. Successful drilling carried out in the Deep Kerr and Iron Cap zones between 2013 and 2015 returned consistently higher grades. Additions to the resource number since 2013 total 14.5 million oz of gold and 12.7 billion lb of copper at grades 50% better than earlier drilling results. The Deep Kerr zone contains CONTINUED ON PAGE 12
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MINING IN BC 1.08 billion tonnes grading 0.35 g/t Au and 0.53% Cu. The initial resource at the Lower Iron Cap zone is 164 million tonnes at 0.50 g/t Au and 0.27 % Cu. The presence of the recently discovered higher grade mineralization put Seabridge engineers to thinking about more underground mining of these high grades and less about open pit mining. The PEA that was created has significant economic improvements over the PFS, with the exception of the upfront capital costs – $5.0 billion for the PFS and $5.5 billion for the PEA. The higher capex is due to a larger mill and earlier underground development. Other advantages to the PEA include a smaller surface footprint. In an area with a winter avalanche threat, being underground could enhance safety. Hence the extensive tunneling system as well for moving ore between the mines and the mill. The PEA also outlines how it is possible by including these higher grade zones to recover $6.0 billion more revenue from copper output than was planned in the PFS. The higher gold and copper recovery outlined in the PEA
is deserving of serious consideration despite the higher price tag. The PFS outlines three open pit mines – Mitchell, Sulphurets and Kerr – that would transition to block caving beginning in year 20 at the Mitchell deposit. The Iron Cap and Deep Kerr are also candidates for caving.
The PEA takes a different approach. While there will be starter pits, most of the mill feed will come from underground resources. Smaller pits have been designed for the Mitchell and Sulphurets deposits, and mining at Kerr will be entirely underground. The great advantage to this strategy is that the amount of waste rock from the pits is reduced as is the area needed to store it on the surface. Whichever design the development follows, expect Seabridge to choose its joint venture partner very carefully. Mineral processing
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The processing plant will consist of three separate facilities. Primary ore crushing and handling facilities will be established at the Mitchell ore processing centre (OPC) site near the mine. Crushed ore will be transported through a 23-km-long train tunnel to the process tailings and management area (PTMA). Additional ore crushing and the concentrator (Treaty OPC) will be built adjacent to the tailings management facility (TMF). Just as the mining sequence differs between the PFS and PEA, so do the plans for the concentrator. In the PFS, a conventional mill is planned with copper-gold-molybdenum bulk rougher flotation followed by pyrite flotation to recover gold. The bulk rougher concentrate will be reground and passed through three stages of cleaner flotation to produce a copper-gold-molybdenum bulk cleaner concentrate. Molybdenum will be separated from the bulk cleaner con to produce a moly con and a WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:25 PM
Drilling (left), core preparation (top right), and careful examination are outlining a worldclass resource.
Photos: Seabridge Gold Inc.
Successful drilling carried out in the Deep Kerr & Iron Cap zones between 2013 & 2015 returned consistently higher grades.
The Seabridge team has outlined reserves of 14.5 million oz Au and 10 billion lb Cu – so far.
copper-gold con with silver values. The gold-bearing pyrite concentrate and the scavenger cleaner tailings will undergo a cyanide-in-leach process. Ultimately, gold and silver will be recovered as dorĂŠ bars. Two main differences set the original and newer mill flowsheets apart. First, the PFS specifies a mill with a capacity of 130,000 t/d and the recovery of molybdenum. Second, the PEA version will be larger at 170,000 t/d and there will be no moly recovery circuit. JANUARY 2017
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Expect to find several tunnels at the KSM site. The Mitchell twinned tunnels (MTT) between the mine and concentrator is only the start. Three diversion tunnels totaling 22.4 km are planned to manage glacial melt water and clean surface water from the Mitchell and McTagg valleys near the mine site. The Mitchell and McTagg tunnels are sized in anticipation of a 200year storm. Twinning the tunnels allows maintenance to occur in one while the second continues to operate. The TMF will be built in three cells. The north and south cells will collect flotation tailings. Residues from the CIL circuit will be held in a lined central cell. The cells are designed to store the 30-day probable maximum flood with snowmelt behind four dams. In total the TMF will have a capacity of 2.3 billion tonnes.
Seabridge continues to expand the resources at KSM, but the initial size of the TMF may be a limiting factor as to how much ore can be mined. An expansion of the original facility or a new TMF may be necessary before the end of mine life. The way forward
Seabridge has had great success at KSM. Not many juniors can offer potential partners two viable paths to production. That makes the management extremely far sighted. They know they need a major base metal partner to develop KSM. But they are not willing to relinquish control. More than that, the people at Seabridge want to see this global scale project through to production. More power to them. Surely they will succeed. CMJ CANADIAN MINING JOURNAL
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EARLY DIAMONDS LAUNCH I GAHCHO KUE MINE Two months ahead of schedule, Canada’s sixth diamond mine yields 50-carat gem
By Bill Braden
f the logistics of building a $1 billion diamond mine 400 kilometres south of the Arctic Circle sound daunting, try organizing its opening ceremony. With a guest list of 150 investors, aboriginal chiefs, politicians, company officials and media from as far afield as Africa, the UK and Ireland, it took four aircraft from Calgary and Yellowknife to fly everyone in for the launch of the Gahcho Kue project on Sept. 20, 2016. The six-hour event was a reflection of the meticulous planning poured into the NWT’s fourth diamond producer
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Left: The Gahcho Kue pit is a conventional truck and shovel operation.
Above: The diamond recovery plant.
Metriculous planning led to a smooth start-up at the Gahcho Kue mine where a 50-ct diamond was recovered during commissioning.
(Canada’s sixth) since the deposit was discovered some 21 years ago by Mountain Province Diamonds. It attracted De Beers to the find in 1997, and the two forged a 51:49 joint venture to bring it forward with De Beers holding 51% and acting as operator. There was ample cause for celebration: their combined $1.056 billion investment is expected to harvest 54 million carats and pump hundreds of jobs and hundreds of millions of dollars into the NWT’s flat lined economy over its 12-year life. “It’s a big deal for the NWT, for Canada, JANUARY 2017
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for De Beers and for Anglo American,” said Kim Truter, De Beers Canada CEO. “Our singular focus is to repay our shareholders and business partners,” said Patrick Evans, president and CEO of Mountain Province, “and to operate this diamond mine for the benefit of our employees and the communities they call home.” Among the other speakers was Bill Enge, president of the NWT North Slave Metis Alliance, one of six indigenous groups which will receive beneficiary payments over life of the mine. “It’s a very significant development in
the Northwest Territories,” Enge said. “De Beers and Mountain Province have forged ahead with the construction of this mine – a billion-dollar mine – in light of the terrible downturn in the mining industry across the world. “I think it will generate a lot of spin offs from this mine,” said Tlicho grand chief Eddie Erasmus. “for people up here in the north and Yellowknife, the Northwest Territories and Canada as a whole” De Beers claims the overall project will be a $6.7 billion boost to Canada’s econCONTINUED ON PAGE 16
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MINING IN NWT
Left: De Beers and Mountain Province rolled out the red carpet for visitors at the opening of the Gahcho Kue mine. Centre: Kim Truter, De Beers Canada CEO, and Patrick Evans, Mountain Province Diamonds president and CEO, huddle with a display of rough.Right: Aboriginal drummers offer a prayer during the Feed the Fire ceremony witnessed by almost 300 guests and staff.
omy. It comes at a critical time for both the NWT and De Beers. For the NWT, it could at least replace the job and revenue losses brought on
when De Beers shocked the territory by shuttering its problem-plagued Snap Lake mine in December 2015, at least a decade earlier than planned.
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For De Beers, it marks the opening of its first mine since 2008 and its largest outside of South Africa. It will bring new high quality production into a supply chain that is forecast to start shrinking by 2020, and when prices for rough and demand for finished jewelry are expected to firm up. Hatch, JDS score top award
Hatch Ltd., the global engineering firm, was brought into Gahcho Kue in 2010 by JDS Mining and Energy, to partner on the engineering, procurement and construction management (EPCM) challenge. Years of planning and co-ordination went into the two-year campaign to deliver and build the mine between 2014 and 2016. John Bryant of Hatch was assigned as project manager in 2012. Bryant says the big push was to source construction equipment and a 450-person camp and get it marshalled in Yellowknife for the January opening of the 2014 ice road season. While 2014 was a good winter road year, 2015 was a different story. Three bad storms cut into the season, but some 2,500 loads of critical machinery, materials and fuel did make it over the 400-km ice road. Over the 2016 season, the mine shipped in 47 million litres of fuel and 50,000 tonnes of explosives along with a year’s supplies. Regulatory issues also created headaches. A permit for a carefully planned laydown area was withdrawn just weeks before trucking started in 2015, requiring a major push WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:26 PM
Top right: The kimberlite processing plant has a capacity of 8,000 t/d. Centre right: Rough diamonds get a preliminary sort at the mine before being sent to Yellowknife for royalty evaluation. Bottom (sidebar): Patric Evans, president and CEO of Mountain Province Diamonds.
to build a new one in a hurry. Delays for accessing the mine’s permanent airstrip site meant a smaller, short term strip had to be built, capable only of Twin Otter aircraft. “That changed the construction cycle significantly,” says Bryant, who needed up to 10 flights a day to move people and groceries for over four months. Regardless, the EPCM team, lead by Allan Rodel (now mine general manager), brought Gahcho Kue on two months ahead of schedule and on budget. Bryant, along with the owners, lauded the team’s exemplary safety record: only three losttime incidents in 3.8 million hours logged by over 1,800 workers. The project has already garnered recognition. The Project Management Institute, Montréal Chapter, gave its top honour in the private industry category to Gahcho Kue in November. Earlier in 2016, the Yellowknife Chamber of Commerce singled it out for its workplace health and safety award. Smooth ramp-up
Three pipes will be mined at Gahcho Kue, a Chipewyan name meaning “the place of big rabbits.” Stripping began two years ago JANUARY 2017
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PATRICK EVANS: BANKERS AND BUREAUCRATS DON’T GET IT Behind the glow of satisfaction with the successful launch of Gahcho Kue, the CEO and president of Mountain Province Diamonds reflects somewhat ruefully on the two decades of hard slogging it took to get there. Soft spoken and cool headed, Patrick Evans started out as a career diplomat (South Africa’s consul general to Canada in the late 1990s) before jumping into the mining game with junior diamond hunter SouthernEra in 1999. He has since held executive positions and directorships with a number of companies. He joined Mountain Province in 2005. He’s rather an anomaly in Canadian mining circles, for the sole reason that he was able to raise more than a half-billion in cash in a skittish market that shunned resources. How did he do it? “It’s a combination of a few things,” he says. “The quality of the project, the quality of our operating partner [De Beers], and the market’s familiarity with the management of Mountain Province.” In other words, his backers know and trust him. Evans funded his 49% share in part through equity, much it sourced out of the United Kingdom, then from April of 2015 through a US$370 million debt plan, backed almost entirely by French, South African and Canada’s Scotia Bank. Scotia is the exception in Canada, he says, expressing disappointment with other banks when it comes to resource investment. “Ironically, even though Canada has one of the world leading mining industries, most chartered banks do not provide debt for Canadian mine development. It’s actually quit surprising, if not shocking … there’s a disconnect there.” Patrick Evans was interviewed in November 2016 for CMJ.
at 5034 pipe, with the first kimberlite fed into the 8,000-t/d mill in early June and the actual ramp-up started on Aug. 1. Tuning a diamond process plant is a lengthy and complex operation, explains
Tom Ormsby, De Beers head of public and corporate affairs. “Ramping up means slowly putting more into the system, with the right mix of CONTINUED ON PAGE 20
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ADVERTORIAL
What it takes to win
An interview with Hatch’s
Joe Lombard
T
he Montreal chapter of the Project Management Institute recently awarded Hatch, the Mississauga-based global engineering firm, top honours in the private industry category for its submission of the Gahcho Kué project. The $1-billion project in the Northwest Territories – the world’s largest new diamond mine in over a decade – moved into production this year, on budget and ahead of schedule. That kind of success is no accident. Producing work that gets the kind of recognition Hatch enjoys is a matter of careful planning, thorough, consistent processes, and scrupulous attention to detail. At Hatch, it’s a way of life. Joe Lombard, Global Director of Mining and Metals, knows better than anyone what it takes to deliver work that is consistently superior. Here, he shares insights about the successful strategies and philosophies that translate into award-winning projects all over the world. You’ve led and been involved with award-winning projects your whole career. What’s your secret? Answer | There’s no secret. It’s a matter of diligence and discipline. Engineers love process. At Hatch, we believe we have the magic formula for bringing the right people and pieces together, at the right time and in the right way. And making it work well, consistently and seamlessly. Where do you begin? Answer | Communication. You can’t accomplish anything without good, clear lines of communication that involve everyone connected to and affected by the project. You have to do your homework. Make sure there are clear goals. Look at all the options and fine-tune the scope, budget and schedule. Then stick to it. You don’t need to make changes when you do it right the first time. These projects often call for a team approach, either with client representatives, like at Gahcho Kué, or in joint ventures. How do you make this work? Answer | We’re committed to client satisfaction. We understand their businesses and what they’re trying to do. We know they don’t want projects; they want what projects give them – the facilities to produce products they can sell.
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We forge strong, long-term relationships with client representatives and others we work with. The engineering project-management practice in Canada is a small community. It makes sense to learn to work together. Sometimes we lead; sometimes our competitors do. Regardless, we know how to work as a team for the greater good of our clients. All projects have problems – unexpected or unanticipated issues. Have you developed a process for handling them? Answer | I always come back to first principles. Safety is always at the top of the list. That’s the cornerstone, the one thing that’s never compromised when tough decisions have to be made. Then, I recommit to the scope that we determined and agreed upon before the project began. How do you factor in community concerns on projects as large as the ones you manage? Answer | Social license is the commitment to leaving a location, an area, and the people – even the flora and fauna – in the same or better condition than you found it. We involve the community from the very beginning, when the project is just being proposed or conceptualized. We do all we can to create good, well-paying jobs for people who live in the area and these often remain after the project winds up and the facility is operational. The community is a key partner in the success of these projects. We never take that for granted. What is unique about Hatch? What sets you apart from your competitors and contributes to the recognition for excellence that so many Hatch projects receive? Answer | We’re a multi-skilled group. We’ve got experts in mining, metals and minerals, infrastructure, energy, and digitalization, as well as every aspect of project delivery. We pride ourselves on our culture of innovation and continuous improvement. It’s what excites us about the work we do. We really believe in partnering with our clients. We continue beyond mechanical completion, into commissioning and startup, maintaining or constantly improving the operation to make it more sustainable. We want our clients to be able to maintain their business for many, many years. The things we build are designed to last. And they do. n WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:56 PM
Making the complex seem simple. We combine technical expertise with the courage to challenge conventional thinking. We’re inspired to build positive change, always thinking about how to make the world a better place. Hatch. Building smarter solutions to ignite your vision. Contact us at hatch.com
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2016-12-21 12:16 PM
MINING IN NWT country rock, and learning to balance those levels. It’s also learning the orebody, the fine versus coarse material,” says Ormsby. “It was really a well-executed project, not just for De Beers Canada, but for us globally. It’s really held up as a good example for how a project should be done.” The proof is in the early impressive results: by the end of September, 198,000 carats had been recovered, grading 1.52 carats/tonne. It included a number of “specials”, stones bigger than 10.8 carats which command big premiums if they’re of very high quality or vivid color. The best so far weighs just over 50 carats. The annual process target is 4 million carats, with full commercial production underway by Q1 2017. Prices are forecast at US$185 per carat, with operating margins of over 80%. The partners will split production along their 51:49 ownership, with an internal auction to bid for parcels of the specials. Along with all other NWT mines, they are also
The annual process target is 4 million carats, with full commercial production underway by Q1 2017. Prices are forecast at US$185 per carat, with operating margins of over 80%. obliged to offer up to 10% of production to NWT-based polishers; only one company, Crossworks, is established at this time. From that point, Mountain Province will entrust its Antwerp-based broker, Bonas, with selling its parcels through conventional open tender to cutters and polishers every five weeks. De Beers has its own global marketing system under its trademarked Forever brand, carried by some 2,000 retailers. Evans says his company will focus exclusively on managing Gahcho Kue as its sole asset and is not pursuing any new projects or exploration. De Beers, on the other hand, has had active exploration in Canada since the 1960s, and will continue. “We do have a lot of activity across the country,” says Ormsby, “but the front
runner is a joint venture with CanAlaska Uranium on kimberlite targets in the Athabasca region of northern Saskatchewan.” De Beers’ exploration budget for 2017 is pegged at $10 million. De Beers is also pursuing expansion of its Victor mine near James Bay in Ontario, with plans for a bulk sample this winter at the Tango Extension, one of 16 kimberlites discovered by the company in 1987 – four years earlier than the find that set off the NWT rush, he points out. Tango could add five years to Victor’s production, which would otherwise be exhausted by 2019. CMJ Photos by Bill Braden, BillBradenPhotography@gmail.com.
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2016-12-21 12:27 PM
Agnico calulates there are 3.71 million oz of gold at Amaruq, of which 2.86 million oz are in the Whale Tail deposit.
AMARUQ ON THE HORIZON Agnico Eagle invests in the future of Canada’s North
PHOTO: AGNICO EAGLE MINES LTD.
CONTINUED ON PAGE 22
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By Jane Werniuk and Olivier Côté-Mantha
An
ambitious exploration program in a relatively unexplored area in the Kivalliq region of Nunavut, has resulted in an exciting discovery for Toronto-based gold producer Agnico Eagle Mines. In just over three years, the exploration team has advanced the Amaruq project from a new grassroots discovery to a major high grade gold deposit. Its growing gold resource, currently estimated at 3.7 million oz of gold (19.4 million tonnes grading 5.97 g/t), technical studies and permitting efforts place the project on a trajectory to potentially be ready to go into production by 2019 as a satellite deposit to the Meadowbank mine located 50 km to the south. The Meadowbank mine is Agnico Eagle’s largest gold producer and Nunavut’s first gold mine. Operations began in 2010, however, Meadowbank is expected to run out of ore by the end of 2018, leaving an 11,000-t/d mill
Amaruq (which means “wolf” in Inuktitut) was a geology driven discovery resulting from modern pioneering and a focused, aggressive exploration effort.
hungry for more. This looming deadline has helped to sharpen the focus of the company’s regional exploration team.
Agnico Eagle’s other Nunavut gold project, Meliadine, lies about 290 km southeast of the Meadowbank mine near Rankin Inlet. The Amaruq project is one of the most significant greenfield gold discoveries in Nunavut and recent large discoveries in Canada. This success will soon be formally recognized when Agnico Eagle’s exploration team receives the Prospectors & Developers Association of Canada’s Bill Dennis Award in March 2017. Amaruq (which means “wolf” in Inuktitut) was a geology driven discovery resulting from modern pioneering methods and a focused, aggressive exploration effort. After Agnico Eagle acquired Cumberland Resources and its Meadowbank gold project in July 2007, a new strategy to pursue grassroots exploration of the area led to a compilation of all the geological information available for the region around Meadowbank. Amaruq was one of many targets identified by this literature
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The Amaruq exploration camp is located beisde Whale Lake, about 55 km northwest of Agnico’s Meadowbank gold mine.
review, based on prospecting results from the late 1980s. In April 2013, Agnico signed a mineral exploration agreement with Nunavut Tunngavik Inc. covering an area approximately 93 km2. In that same year, the company initiated a small exploration program that included prospecting, mapping, a small ground geophysical survey (Mag-EM) and a four hole drill program targeting the best conductors. It was the fourth hole that intersected significant gold mineralization and became the Amaruq discovery hole. Exploration spending has increased each year to a total of US$83 million to the end of 2016, leveraging the facilities at the Meadowbank mine to minimize costs. The competent technical field team has advanced the understanding of the mineralization and increased the size of the known gold deposits using 272,000 metres (1,065 holes) of diamond drilling to date and other state-of-the-art tools (such as 3-D modelling, portable XRF analysis, targeted academic studies, etc.). The project has grown quickly. The IVR deposit was discovered in 2013; the large Whale Tail deposit was discovered JANUARY 2017
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the next year, and was the host of an initial resource estimate. The land package has increased to currently include 1,167 km2. The camp has been expanded to accommodate 125 people. Whale Tail is now seen to be a steeply dipping deposit at least 2.2 kilometres
Opposite: Senior geologist Jean Lafrance uses a portable XRF machine to identify specific geochemical markers in the core. Above: Geologists Roxanne Takpanie (L) and Robert Fraser examine core from the V zone. CONTINUED ON PAGE 24
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Agnico has spent US$83 million so far at Amaruq, logging almost 125,000 metres of core from 514 holes in 2016 alone.
long from near-surface to locally as deep as 730 metres including multiple horizons of gold-bearing, vein-rich and silica-altered volcano-sedimentary rocks, with surface and underground potential. The V zone in the IVR deposit forms a series of parallel quartz vein structures immediately north of Whale Tail, dipping shallowly toward Whale Tail from surface to at least 540 metres depth. The discovery of additional lenses in the V zone has improved its potential as a second source of open pit ore. Construction of a 62-km Amaruq exploration access road from Meadow24 |
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bank began in early 2016 and is expected to be completed in late 2017. Permitting is progressing for the construction of an exploration ramp and portal and the potential collection of an underground bulk sample. An environmental impact statement was submitted in June 2016 in support of the Whale Tail satellite pit, and is under review. Commenting on the significance of the Amaruq discovery, Guy Gosselin, Agnico Eagle’s vice-president of exploration, stated, “It’s exciting to know we discovered it ourselves, in our own backyard, which allows
us to create a lot of value for the company. We believe very much in the potential of this region, but we also have a realistic understanding of what it will take to grow a business in this remote arctic environment. Fortunately, with our Meadowbank and Meliadine properties nearby, we have access to the right people and resources, which is a tremendous advantage.” CMJ Jane Werniuk, senior geologist, technical reporting, Agnico Eagle Mines Limited. Olivier Côté-Mantha, principal evaluation geologist, Agnico Eagle Mines Limited. WWW.CANADIANMININGJOURNAL.COM
2016-12-21 4:04 PM
Goldcorp
EXPANDS Yukon
into the
G
oldcorp came out of nowhere about a decade ago with an impressive growth story following a period of prolific merger and acquisition activity. Now amongst the world’s top gold producers, the company is anchored by a suite of young, high potential mines with significant upside. Last year, Goldcorp’s mining portfolio expanded north into the Yukon Territory, with the acquisition of Kaminak Gold Corp. The acquisition brought a new key asset into the fold, the 100%-owned Coffee gold project, located approximately 130 km south of Dawson City. JANUARY 2017
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Named after a coffee coloured tributary of the Yukon River, Coffee is a high grade, open pit mining project that provides Goldcorp with an opportunity to add high quality ounces to its development pipeline, at low all-in sustaining costs. The project’s land package comprises over 60,000 ha, and currently has total proven and probable gold mineral reserves of 2.16 million oz, measured and indicated gold mineral resources of 690,000 oz and inferred gold mineral resources of 2.21 million oz. With several mines in northern regions of Canada, Goldcorp is well practiced at operating in sub-zero climates. The site
will be accessible by road most of the year, but seasonal ice bridges will be used to cross the Stewart and Yukon Rivers during the coldest winter months. The company is also considering using an automated haul truck fleet that would allow employees to work from a heated remote control centre. Personnel and gold will be transported by air to the remote location, with supplies arriving via a 214 km access road originating in Dawson City. This frozen northern climate does present challenges when cataloguing and monitoring local aquatic ecosystems. Prior to the Goldcorp acquisition, biologists set fish CONTINUED ON PAGE 26
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The Coffee exploration camp and (inset) the drilling pattern.
traps and video cameras in sections of rivers where water continues to flow beneath the ice during winter to assess fish habitat. As this approach is not always effective, a new research method called environmental DNA was also used to better understand the habitat downstream of the mine site. This technique consists of collecting water samples at different locations along creeks and rivers, and filtering the sampled water to collect the DNA of organisms. These filters were then sent to labs to test for the presence of various species. This eDNA provides a clear indication of whether a specific species has been present in the area tested one month prior to the sample collection. On land, Goldcorp will use cameras to track wildlife movement, and will catalogue sightings during mine construction and operation, in accordance with its wildlife management plan. Kaminak’s strong relationships with stakeholders and focus on sustainability, in addition to sound economics and an impressive deposit, sparked Goldcorp’s interest in the acquisition. Kaminak spent a considerable amount of time and effort to develop partnerships at multiple levels of governing bodies – local, regional and First Nations. Goldcorp recognized the work Kaminak’s team had done beyond the basic parameters of consultation with all of its stakeholders, involving them in activities directly related to the project’s sustainabil26 |
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ity, something Goldcorp believes should always be done at an early stage to ensure long term success. “The acquisition of Kaminak and its Coffee project in the Yukon is consistent with our strategy of populating our asset pipeline with opportunities that not only add value for our shareholders, but that also create long term sustainable value for the communities we impact through our operations,” said Brent Bergeron, Goldcorp’s executive vice-president of corporate affairs and Sustainability. “Kaminak has done an excellent job engaging with First Nations throughout the initial exploration phases, which will serve as a solid foundation for us to build upon as the project enters the next phase of development.” Currently in the permit application stage, Goldcorp expects to hire approximately 400 people for the construction phase of the project and another 300 full time jobs once the mine is in operation, creating both direct and indirect benefits for the community. “Benefits go well beyond dollars and cents. It is also how the project and Goldcorp can be a catalyst to build capacity for future generations,” added Bergeron. “Having the economic, technical and social elements well-established in the fabric of the project makes us confident that
this investment is right for Goldcorp, and we will work to appropriately develop these opportunities.” In the near term, the project’s primary focus will be on consultation and the permitting process. Goldcorp is also ramping up exploration activities at the site. With a large, geologically prospective land package in a mining friendly jurisdiction, the Coffee project has the potential to grow into a camp that delivers long term significant sustainable value. Pending permits, road construction would begin in 2018 and site construction in 2019, with first gold expected in the fourth quarter of 2020. Operations are expected to span more than a decade. CMJ
Left: Brent Bergeron, EVP corporate affairs and sustainability (right) and Tim Smith, exploration manager, on the ground at the Coffee project. Right: Eric Buitenhuis, project geologist (left) and Brent Bergeron in the core shack.
WWW.CANADIANMININGJOURNAL.COM
2016-12-21 6:26 PM
Goldcorp
Yukon
into the A WINNING HAND DEALS
High grades routine at 3 Aces exploration project
Above: The Northern Lights over the 3 Aces camp. Right: Many good grade assays are reported from Golden Predator’s project.
JANUARY 2017
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Y
ou don’t have to be a card player to recognized a lucky hand. That’s what Golden Predator Mining Corp. has been drilling at its 225 km², 3 Aces gold property, located in southeast Yukon. Hosting the two highest grade surface outcrops discovered to date in the Yukon and zone names such as Clubs, Hearts and Spades, the property keeps returning high grade assays as exploration continues. The property is located along the all-season Nahanni Range Road, which accesses the Cantung mine located 40 km to the north and is located in the traditional territory of the Kaska Nation. The mineralization at 3 Aces has many characteristics consistent with an orogenic vein system including quartz veins with coarse visible gold and low (<1%) sulphide content. The property is hosted within the Selwyn Basin; rocks that were previously part of an ancient ocean basin and shelf that existed off the coast of North America over 500 million years ago. Plate tectonics have folded, faulted and contracted the Selwyn Basin starting about 150 million years ago and that process has led to the formation of many types of mineral deposits. Yukon is well known for intrusive related gold deposits such as the Brewery Creek Mine or Fort Knox in Alaska however the gold bear-
ing quartz veins at 3 Aces are hosted completely within sedimentary rocks and the property lacks significant intrusive rocks. Coarse gold in quartz veins at surface were initially discovered in 2009 by a local prospector Alex McMillan. Northern Tiger Resources initially held the property, but in 2014 it was taken over by Golden Predator. The project was advanced with extensive soil sampling by the previous operator. Significant gold-in-soil anomalies were outlined over a central core area of 10.5 km2 leading to limited helicopter supported core drilling. Golden Predator’s initial work commenced in 2015 with metallurgical studies, rotary air blast (RAB) drilling, reverse circulation (RC) drilling, and bulk sampling. All were focused on establishCONTINUED ON PAGE 28
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Above and left: Night drilling. Inset: Trevor Magun (facing camera) and Victor Kisoun, both Kaska citizens working at 3 Aces. Right: Outcropping sample from the Ace of Hearts deposit.
ing the grade and continuity of the Ace of Spades vein where several earlier core holes had intersected the vein but returned lower than expected grades. This work confirmed the high grades of the vein by utilizing a more rigorous sampling protocol and closer drill hole spacing. A greatly expanded and accelerated work program commenced in August 2016 including airborne geophysics, soil sampling, trenching, geological mapping and sampling, road construction and installation of a bridge over the Little Hyland River to allow heavier equipment, year round drilling and a cost savings by eliminating helicopter supported activities. The 3 Aces drill program is targeted to complete approximately 4,500 metres of 140-mm-diameter drilling and PQ core drilling in the fourth quarter of 2016. Drilling, which commenced in October, has through Dec. 13, 2016 completed 55 drill holes for more than 4,250 metres with all but three holes reaching their targeted depths. Currently the combination of core and reverse circulation drill program is 28 |
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designed to test high grade mineralization within a number of quartz veins exposed in trenches across the Spades, Hearts and Clubs areas. Drilling will resume in February 2017 with more than 25,000 metres planned. The 2017 program will continue to delineate and expand known mineralization in the numerous veins discovered to date across the expansive property. A seasoned team It takes a team of seasoned geologists to move a project forward at the fast pace now being set at Golden Predator. The exploration team is led by William Sheriff and includes a team of contractors and employees which bring a collective of 200+ years of experience to the project. Jeff Cary as project geologist, Mark Shutty who manages the resource modelling, and Mike Burke as chief geologist round out the team. This talented team brings an old fashioned model of exploration to the project using practical “boots on the ground” exploration through soil sampling to iden-
tify anomalies for trenching. Trenching results then put drill targets on the map with bulk sampling to follow to reconcile drill results with actual performance. To date over 25 mineralized veins have been discovered through sampling, trenching and roadwork. Metallurgical results from bulk sampling confirm independent lab testing by SGS Mineral Services indicating approximately 80% gravity recovery. In January 2013, Golden Predator signed an exploration agreement with the Kaska Nation, as represented by the Ross River Dena Council and the Liard First Nation. Working closely with the Kaska Nation is of paramount importance to Golden Predator to ensure that the community realizes the opportunity of training, employment, contracts and business development. First Nation relations is led by the chief executive officer, Janet Lee-Sheriff, and while the company has an memorandum of exploration for exploration, Golden Predator is working on ways to exceed the requirements of the agreement by identifying business opportunities and the opportunity to create wealth in the community outside the agreement. “Bringing the community along with us” is the foundation of Golden Predator’s activities. While in the early stages, Golden Predator sees nothing to limit blue sky potential, and is optimistic that the numerous high grade veins and large untested area of the 3 Aces property will lead to an emerging new district. CMJ WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:47 PM
Message from the Association for Mineral Exploration (AME)
E
arly in 2016, British Columbia’s mineral exploration and development industry began to show signs of emerging from the depths of a dark and sustained downturn. Although mineral explorers are optimists by nature, as an industry we had been severely challenged by four consecutive years of a bear market. According to Palisade Research, the turning point was on Jan. 20, 2016 when the TSX-V market achieved a gain after 1,200 days of continuous losses and there has been a growing trend of new money coming into the industry, including significant flow-through financing for Barkerville Gold Mines Ltd.’s properties in the historic Cariboo area and IDM Mining Ltd.’s Red Mountain gold project in northwest B.C., and private capital investments into Pretium Resources Inc.’s Brucejack gold project in the Province’s Golden Triangle and JDS Silver’s Silvertip silver-lead-zinc mine in northern British Columbia. Financings in support of earlier stage exploration projects have been harder to achieve although the likes of Serengeti Resources Inc., Dolly Varden Silver Corp. and Westhaven Ventures Inc. indicate that the opportunities are expanding beyond advanced stage projects. As we enter 2017, it is encouraging to see that some AME members are in a better position to conduct exploration work not just in B.C. but around the world. Though times remain challenging for many of our members, we remain optimistic that 2017 will see the continuation of steady year-to-year improvements in the prices of most precious and base metals, steel-making coal and mineral commodities that will rekindle and build investment throughout our sector. AME’s annual Roundup 2017 conference is appropriately themed “Gearing up for Discovery”. From Jan. 23 to 26, our 34th annual conference in Vancouver, B.C. will highlight the encouraging results of this past year’s uptick in mineral exploration activity. As of press time, 76 projects at all stages of mineral exploration and development from 13 different countries will be featured in technical presentations JANUARY 2017
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Left: Diane Nicholson, AME chair Right: Gavin Dirom, AME president and CEO
As we enter 2017, it is encouraging to see that some AME members are in a better position to conduct exploration work not just in B.C. but around the world. and displays in the Prospectors’ Tent and Core Shack. And in our new Passport to Explore exhibit at AME’s Roundup 2017, we will showcase the findings of research projects conducted by publicly funded geological surveys. Also, we are pleased to bring back AME’s Gathering Place, with its industry-leading talks about Aboriginal engagement and success stories of First Nations working together with the mineral exploration and development industry. AME’s Roundup program also features short courses, a trade show and sessions focused on topics such as public geoscience and commodity trends. Plus, the new lunchtime Invest in BC session will focus on building value for shareholders, presented in an interactive format hosted by Resource Maven’s Gwen Preston. British Columbians will head to the polls to elect a new provincial government and 87 members of the Legislative Assembly (MLAs) on May 9. CONTINUED ON PAGE 30
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AME’s Roundup conference is also a special occasion for industry leaders to be recognized for their important and worthy accomplishments. AME will salute our industry’s best and brightest at the Celebration of Excellence Awards Gala on January 25.
Accordingly, AME will provide an opportunity on Jan. 25 at our annual Government-Industry Session for Roundup delegates to ask candidates and MLAs from the Liberal, New Democrat and Green political parties how they will support mineral exploration and development activity in province. As well, we are excited to host political commentator and Vancouver Sun editorialist Vaughn Palmer as our keynote speaker at the Chair’s Welcome Dinner on Jan. 22. AME’s Roundup conference is also a special occasion for industry leaders to be recognized for their important and worthy accomplishments. AME will salute our industry’s best and brightest at the Celebration of Excellence Awards Gala on Jan. 25. This year, we have the honour of recognizing 17 individuals and two organizations for their achievements (see sidebar).
Along with the Prospectors & Developers Association of Canada (“PDAC”), AME will also use the opportunity provided by Roundup 2017 to recognize exceptional achievement in health and safety. We invite you to join us in congratulating Dominion Diamond Ekati Corporation and Cameco Corporation Exploration Department in receiving the Safe Day Everyday Gold Award at the Environment, Health and Safety Awards Breakfast on the morning of Jan. 25. So here’s to a more prosperous year ahead for the globally active mineral exploration and development industry based right here in BC! We look forward to seeing you all as we start the new year off at AME’s Roundup 2017 conference – it should not be missed! CMJ
2016 AME AWARD RECIPIENTS Chris Rockingham, Carl Edmunds and Wade Barnes, recipients of the H.H. “Spud” Huestis Award for Excellence in Prospecting and Mineral Exploration Don Parsons and Steve Parsons, recipients of the E.A. Scholz Award for Excellence in Mine Development Terry Salman, recipient of the Murray Pezim Award for Perseverance and Success in Financing Mineral Exploration William Lamb and Lukas Lundin, recipients of the Hugo Dummett Award for Excellence in Diamond Exploration and Development Dr. David Broughton and Sello Kekana, recipients of the Colin Spence Award for Excellence in Global Mineral Exploration Jim Cooney, recipient of the Robert R. Hedley Award for Excellence in Social and Environmental Responsibility The late Graham Ennis, recipient of the David Barr Award for Excellence in Leadership and Innovation in Mineral Exploration Health & Safety JoAnne Nelson, recipient of a Special Tribute in recognition of her distinguished career in geoscience work Susan Craig, recipient of the Gold Pan Award for Exceptional Meritorious Service to the Mineral Exploration Community through AME Barb Caelles, Alex Christopher and Diane Gregory, recipients of the Frank Woodside Past Presidents and Past Chairs Award for their distinguished service to the association and/or contribution to the mineral industry MineralsEd and Britannia Mine Museum, recipients of the AME Outreach Education Fund
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WWW.CANADIANMININGJOURNAL.COM
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CSR & MINING
New Global Reporting Initiative (GRI) Standard Released By Michael Torrance
I
n October 2016 the Global Reporting Initiative (GRI) released a new sustainability reporting standard that will have wide reaching effects on sustainability reporting the world over.
Sustainability Reporting and the GRI
The GRI is an organization which has provided guidance on sustainability reporting since 1997. The guidance of the GRI has become a key benchmark for good practices in sustainability reporting and is widely used across many industries. Sustainability reporting has become a widely adopted practice across all industries, but particularly the mining industry over the last decade. The GRI reports that 92% of the world’s 250 largest companies report on sustainability performance. Of these, 74% use the GRI, illustrating its reach as a global guideline for reporting. Adoption of sustainability reporting is driven by market demands – of investors and stakeholders – rather than strictly regulatory requirements. According to a report of the MIT Sloan Management Review, 75% of senior executives in investment firms believe that a company’s sustainability performance is important to consider when making investment decisions. This creates the market impetus for sustainability reporting, beyond obligatory disclosures under securities law. Reporting in the Shadow of Regulatory Requirements
Regulators are not absent however and securities regulators in Canada, the US and Europe have increasingly discussed the importance of sustainability issues in the context of material disclosures to the market. Specific obligations regarding disclosure on sustainability issues can be seen in regulatory developments from transparency reporting such as the Extractive Sector Transparency Measures Act, the UK Modern Slavery Act, California Supply Chain Transparency Act, and sustainability related disclosure obligations set by regulators in Europe, South Africa and elsewhere. In Canada, the 2015 Corporate Social Responsibility Strategy for the Extractive Sector encourages a voluntary approach, specifically endorsing the GRI as a CSR standard for the Canadian mining sector. This highlights the specific importance of the GRI in the Canadian mining context. New GRI Standards
The new GRI standard is designed to simplify the sustainability reporting process and make it more accessible for reporting entities. The new standard adopts a modular approach, which will allow future updates of the standard without the need for a full scale revision. JANUARY 2017
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The new standard has three core areas: w GRI 101 – Foundation – This sets the basic framework and language for reporting on economic, environmental and social impacts; w GRI 102 – General Disclosure – Which sets out reporting requirements on contextual information about an organization and its sustainability reporting practices. w GRI 103 – Management Approach – Establishing reporting requirements about the approach of an organization in managing a material topic. Beyond these core reporting frameworks, more detailed reporting standards are set for a variety of sustainability topics: w GRI 200 – Establishes standards on economic issue reporting such as economic impacts, procurement performance and anti-corruption; w GRI 300 – Setting reporting standards on a variety of environmental topics including environmental management, energy, water, waste, biodiversity and environmental compliance; w GRI 400 – Covering social sustainability issues such as employment practices, labour management, health and safety, privacy, freedom of association, diversity, indigenous rights, child labour, forced labour, human rights assessments and supply chains. The intention is for these 36 modules of the GRI to be used as appropriate for the organization, as determined through stakeholder engagement and analysis of what topics are material to the organization’s operations. The question of materiality, in the context of the GRI, is much different than that found in most securities regulation, focusing more on societal materiality than financial materiality. Implications for the Mining Industry
Sustainability reporting is here to stay and can serve as an excellent tool for mining companies to communicate with their stakeholders and stockholders on sustainability risks and opportunities affecting the organization. The GRI has, for some time, been a high water mark for good sustainability reporting practice. The introduction of a new global standard will allow adherents to increase consistency and develop industry norms, further facilitating this dialogue. This development will evolve alongside other trends in the world of sustainability reporting, including the emergence of integrated reporting including standards development of the Sustainability Accounting Standards Board (SASB). While the new GRI standards are not an endpoint, they are worth exploring and a useful guide to current best practice in sustainability reporting globally. CMJ MICHAEL TORRANCE is a lawyer with Norton Rose Fulbright, Toronto.
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LAW
What does a Trump Administration mean for Canada’s mining sector? By Sander Grieve and Linda Misetich Dann, Bennett Jones
O
nly a few weeks ago the results of the U.S. presidential election were a foregone conclusion, with a second President Clinton all but assured her place in history. To paraphrase … a funny thing happened on the way to the podium. In the time since, pundits and prognosticators have tried to understand what happened, what it says about America, and what we should expect in the years to come. The only certainty in the new world order appears to be continued uncertainty. We are years into a cycle of considerable market, currency and commodity price fluctuations, but now it feels like we are on the cusp of a new era, an era that will see America challenged for economic, political and global dominance, and with a president who, it seems, is keen to make policy and personal pronouncements via Twitter. A new world order indeed! Uncertainty on a new scale! On election night, President-elect Trump delivered a message that was quickly embraced by the financial markets and the resources sector – America would be building infrastructure. While a number of factors have driven trading enthusiasm since, it is, at least in part, a Trump bounce. The market has rushed to price in the need for copper, nickel and metallurgical coal in an infrastructure spending boom, but what the real demand will be for these metals and compounds remains to be seen. We are cautioned that the enthusiasm seen from Trump and the market still must pass the U.S. Congress. True. We are also warned that a Trump White House may not see eye to eye with deficit hawks in Congress when it comes to infrastructure spending. Also true. What is discounted is how Trump arrived where he is today. Congress would be wise to note that his ‘take no prisoners’ methods will surely be delivered upon them should they attempt to delay or impede the Trump Train. Business as usual is unlikely to be tolerated. Fluctuations in currency also play a huge role in our industry, as gains may be earned by producing in weakening currencies only to then sell product in strengthening U.S. dollars. If a President Trump can produce real growth, inflation and resulting interest rate hikes in the United States, the Canadian dollar may further weaken in the face of American growth. The counterweight to this is the historical tendency for Canada to be positively impacted, or dragged along, by growth in America. This may, over time, normalize any Canadian currency advantage in the commodities space. Other challenges may also be on the horizon. Firstly, Canadian business abroad has, for many years, been relatively safe thanks largely to a well maintained U.S. global order. With U.S. threats to retreat from trading relationships, global alliances, and perhaps 32 |
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the world order entirely, to focus on the homeland, Canada may be required to shoulder more of the burden of supporting Canadian industry abroad. Secondly, we have seen very little impact to date of the offloading of trillions of dollars globally from private balance sheets onto public ones through the dramatic increase in the money supply. The growth and inflation curve anticipated by resurgent growth in America could, it is thought, boomerang. Central banks are constantly warning of debt ratios and exposure to interest rates. The return of inflation to address the growth of the money supply, could challenge the current assumptions supporting future economic growth expectations.
CONGRESS WOULD BE WISE TO NOTE THAT TRUMP’S ‘TAKE NO PRISONERS’ METHODS WILL SURELY BE DELIVERED UPON THEM SHOULD THEY ATTEMPT TO DELAY OR IMPEDE THE TRUMP TRAIN. BUSINESS AS USUAL IS UNLIKELY TO BE TOLERATED. And what is the fate of our friend gold? Despite the dire predictions that a Trump presidency would bring, there has been an easing off of gold prices since election day. Inflation, uncertainty, shifts in global and economic policies and fluctuations in currency, may all be factors that lead to a resurgence in gold prices. The biggest challenge may be the very uncertainty that we began pondering at the start of this article. A black swan event may give rise to unconsidered alternatives, as interpreted by a Trump White House that may be volatile and unpredictable in the face of the unexpected, the response may be extraordinary. Described as a pragmatist rather than an ideologue, Trump lacks the experience in policy, diplomacy or bounds of party that his predecessors were confined by. All that has happened to date has confounded popular wisdom. It is more than possible that events CMJ will continue to do so. SANDER GRIEVE is a partner and head of the mining practice at Bennett Jones in Toronto. LINDA MISETICH DANN is a partner and co-head of capital markets and M&A at Bennett Jones in Toronto. WWW.CANADIANMININGJOURNAL.COM
2016-12-21 12:50 PM
IN MY MINE(D)
A Promise for Cambodia By Delayne Weeks
W
ith less than 20 years since the UN declared Cambodia is part of working with communities so they advance and share a safe zone in 1998, this bustling southeast Asian the value. Angkor’s associated bamboo related business, its small nation is rebuilding. Starting over since the genocide enterprise start-ups, and agriculture tests represent an entirely by the Khmer Rouge, this country of 15 million has turned a new different model in exploration. corner. As the only public Canadian company in the extractive sector However, Cambodia continues to play catch-up in the of Cambodia, we need to lead by example to strive for best pracextractives and value-added industries within the country. Social tices, in doing our part to mitigate climate change, reduce povlicense, sustainability, and long term vision, albeit rather unique erty, improve access to education and promote ethical business. in Cambodia, have implications for forward thinking resource Despite our efforts, distrust remains high among a non-profit companies and their opportunities. Initiation of a true, royalty sector here wedded to the stereotype that mining firms can do no generating mineral sector has emerged and is attracting more good – despite our clear evidence to the contrary. This reflects an global attention. attitude the world over when it comes to the mining business. Last month, I addressed the UN’s Intergovernmental Forum Indeed, the world needs energy and minerals, so we best advance on Mining, Minerals, Metals and Sustainable Development the most sustainable and ethical practices to secure both, if we (IGF) about how our Albertan mineral exploration firm, Angkor want any legacy for our future generations. Gold, helps implements the UN’s 17 Sustainable Development Goals (17SDGs) into local communities. Having fostered a very different approach to ethical mineral exploration, and persisted in local DESPITE OUR EFFORTS, DISTRUST economic development through a variety of initiaREMAINS HIGH AMONG A NON-PROFIT tives, this small company from northern Canada shared the possibilities with 300 delegates from 58 SECTOR HERE WEDDED TO THE STEREOTYPE nations in Geneva. A model of collaboration with local communities, THAT MINING FIRMS CAN DO NO GOOD – government, industry, and civil society sounds attracDESPITE OUR CLEAR EVIDENCE TO tive. However, emerging nations require time to evolve, and thousands of NGOs who specialize in not THE CONTRARY. THIS REFLECTS AN being profitable have impacts on sustainable developATTITUDE THE WORLD OVER WHEN IT ment. Members of civil society, many with competing, unclear agendas, struggle to work with private COMES TO THE MINING BUSINESS. sector industry especially the extractive sector, fostering confusion among many ordinary Cambodians. Angkor’s team arrived in Cambodia in 2009, saw great mineral prospects but came to understand the Therefore, for the third year running at the Palais de Nations challenges of aid giveaways and a lack of profitable social develoverlooking Lake Geneva, we delivered a message about sustainopment. Angkor Gold’s response strove to set small, sustainable, able goals and sharing the value of development with the people replicable examples that met community needs. Economic that need it most. People, planet, profits, and peace … necessary benefits for the small rural communities are vital for change, components of any good business, of social license, and of integespecially as Angkor, like many explorers, operates in a remote CMJ rity to investors, ourselves and, indeed, humanity. region where resources, infrastructure and meaningful economic opportunities are few and far between. DELAYNE WEEKS is the vice-president for social development at Angkor Strong companies think beyond their sector, into agriculture, Gold Corp. of Sexsmith, AB. energy solutions, natural resource management, simply because it JANUARY 2017
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