Canadian Mining Journal May 2018 by The Northern Miner Group

C A N A D A

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F I R S T

MINING’S DIGITAL ERA

M I N I N G

P U B L I C A T I O N

PLUS

Cybersecurity IoT trends Innovation at Teck

Managing fatigue on the job

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

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CANADIANMINING

MAY 2018 VOL. 139, NO. 04

JOURNAL

FEATURES

39 Establishing positive community relations has never been more important for the viability of mining projects. Are juniors up to the task?

CMJ

43 Improving financial forecasting using Monte Carlo simulation.

• • MINING’S DIGITAL ERA

20 C A N ACMJ D I Alooks N M IatN the I N Glatest J O Utrends R N A L in how miners are approaching digital technologies.

26 How the mining sector is fighting back against hackers and beefing up cybersecurity.

34 CEO Don Lindsay describes Teck’s take on innovation. 50 MINE & MILL SAFETY 51 SIX Safety Systems outlines what mining employers can do about fatigue in the workplace.

55 Why Goldcorp employed Newtrax

Technologies’ personal safety devices at its Éléonore underground mine.

DEPARTMENTS 5 EDITORIAL | Smart technology, underrated humans. 6 UNEARTHING TRENDS | Peter Blahnik of EY describes why mining companies need to adopt a digital-first mindset – now. 8 CSR & MINING | Carolyn Burns and Jane Church describe how and why the mining sector’s commitment to social performance should be reflected in project valuations. 10 IN MY MINE(D) | Sander Grieve of Bennett Jones outlines a bright future for miners of battery minerals. 12 FAST NEWS | Updates from across the mining ecosystem.

55 ABOUT THE COVER

This month’s cover supplied by Sandvik..

Coming in June/July Canadian Mining Journal looks at mining in the Prairie provinces. Plus, our semi-annual Equipment Maintenance & Repair supplement.

58 NEW PRODUCT SHOWCASE For More Information

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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 May 2018 Vol. 139 – No. 4

38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5 Tel. (416) 510-6789 Fax (416) 510-5138 www.canadianminingjournal.com

JOURNAL

CMJ

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

•

Smart technology, underrated humans

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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.

MAY 2018

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Alisha Hiyate

n mid-April, production problems at Tesla’s factory in Fremont, Calif., prompted the company to suspend production of its Model 3 electric cars. The several-day suspension, planned to complete “a comprehensive set of upgrades,” comes as the company has struggled to meet production targets. As of last August, there was a backlog of 455,000 preorders for the car – and that’s after 63,000 people cancelled their orders. Tesla CEO Elon Musk has pegged production issues on an overreliance on robots in the factory assembly line. “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated,” Musk tweeted on Apr. 13. In contrast to that technology-first approach, the mining industry is proceeding with caution (too much caution, some say) in its adoption of new technologies. But the sector will have to adopt some Silicon Valley traits – while retaining a respect for the central role of humans – in order to thrive in the new digital era. Some companies are developing coding skills in-house, for example, and creating their own analytics programs to meet specific needs that off-the-shelf solutions can’t (Page 20). “To successfully develop things in-house, the best are adopting agile development methodologies, design thinking, and cutting-edge software development ability,” says Richard Sellschop, a partner with consultants McKinsey & Co. and global leader of its Metals and Mining Digital and Analytics Service Line. It all sounds rather foreign to the business of digging rock out of the ground and processing it into useful materials – pointing to the fact that the challenge is not just about technology. Indeed, while Sellschop says technical challenges are diminishing by the day, change management remains a stubborn issue that’s often underestimated. He says the scarcest skill in the mining industry is something he refers to as translator skills. “There’s plenty of very qualified, very smart data scientists in the world and many more on the way,” he told CMJ in early April. “But finding a data scientist who also understands the metallurgical process and how to drive change in a heavy industry environment with a certain culture and way of work – that is tricky. I think this translation capability will in some way become the unicorn skill of the next decade or two.” Moreover, the industry’s approach to digital technology is not about replacing humans, but increasing efficiency by using more of the data available, as well as taking people out of harm’s way. The end result will allow employees to make better use of their time, says David Willick, vice-president with Schneider Electric and Mining, Minerals and Metals Segment regional leader for North America. “With all of these (expected) efficiencies, it just moves the needle to having people focus on more value-added tasks,” he says. In an era of smart technology, let’s not count humans out. CMJ CANADIAN MINING JOURNAL |

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UNEARTHING TRENDS

The time for digital half-measures is over By Peter Blahnik

hose in the mining and metals sector who witnessed years of market underperformance and relentless cost-cutting are undoubtedly welcoming the recovery in commodity prices. As margins improve and companies generate more cash, the focus for mining companies is shifting to re-investing in long-term capital projects. Brexit Europe and a shift toward inward-looking policies in the U.S. and elsewhere means global markets will remain unpredictable for the foreseeable future. Despite this, the industry can’t afford to be overly conservative. The recovery is real and expected to continue. It’s a critical juncture point for mining and metals companies, and hard choices must be made around where to invest. The answer to this challenge starts by adopting a digital-first mindset. It’s no secret that the mining industry lags well behind others when it comes to the digital revolution. In fact, EY identified digital effectiveness as the number-one risk facing organizations in our Top 10 business risks facing mining and metals 2017–2018 report. The gap between the transformative potential of digital technologies and their actual adoption is still too large. It’s about more than just the adoption of technology. Digital holds the key to solving longstanding business and productivity issues in the mining and metals sector. One great place start is robotic process automation (RPA). Over the last few decades, we’ve seen various waves of technology leave a lasting impact on the world of business. RPA represents another such wave, with the potential to significantly reduce the requirement for employees to perform the many rules-based, high-volume (and often costly) activities needed to keep any business running. RPA is software designed to automate common processes such as transactions, simple day-to-day communications or data manipulation. Automating these tasks and middle- to back-office operations is a powerful and relatively easy way for mining and metals companies to find the cash optimization they seek in several important ways. Take contract management. Far too many mining companies spend significant time and resources manually tracking contracts, scanning for everything from compliance to ensuring figures are accurate and avoiding the need for follow-ups to correct errors. The technology exists to greatly reduce the amount of effort spent on contracts and other similar financial and transactions that, while important, siphon attention away

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The gap between the transformative potential of digital technologies and their actual adoption is still too large.

from more strategic and productivity enhancing activities. Imagine condensing complex contract management tasks into automated workflows, thus creating more time for project team members to manage and problem solve. In this way, small changes multiply over time and can fundamentally improve productivity. Cost reduction isn’t the only issue – so is accuracy. People are prone to missing errors when performing repetitive, time-sensitive tasks. Software, on the other hand, isn’t. With greater accuracy and fewer manual processes to hold things up, contract management tasks can be completed much faster than before. Imagine what achieving true end-to-end digital commercial automation could mean for a mining organization, its vendors, customers and investors. With growth back on the agenda, more capital projects will get underway. Along with them comes the usual flurry of contracts – and associated costs. It’s already clear that contract management robotics can help miners move with greater accuracy, speed and efficiency. But it also represents a very timely and sizable opportunity to make the traditional capital management process far less expensive – both by ensuring vendors get paid on time and by avoiding the costs of re-issuing or correcting invoices due to error. And all of this can happen without eating into the valuable time of skilled people. Committing to a digital-first mindset is a strategic imperative. Mining companies may have begun to pay back cash to shareholders, but their ability to continue doing so hinges on new projects being delivered on time and, especially, on budget. Given that the mining industry has been slow to move the needle on digital transformation in recent years, miners must focus on the opportunity to use technology to improve performance. Exploring the potential power of RPA, and digitizing contract management in particular, is fundamentally changing how projects are being executed. The benefits are there to be had. The time to act is now. CMJ PETER BLAHNIK is a senior manager in EY Canada’s Advisory Services practice. He is based in Vancouver. For more information, visit ey.com/digitalmine.

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CSR & MINING

Valuing social factors at the project level By Carolyn Burns and Jane Church

larity, certainty and transparency about how decisions are made not only improve a mining project’s productivity and efficiency, they also strengthen the social licence to operate and increase the likelihood that local communities will see sustained positive outcomes. To take a mining project from exploration through operations and closure requires multiple decision-making systems. While the mining sector is highly systematized from a technical perspective, the approach to social outcomes is often less so. Furthermore, mining’s existing technical and business systems can have an impact on social factors, even if social factors are not always consistently acknowledged or integrated into decision-making. The processes for valuing and investing in specific mining assets (as opposed to company valuations) are one such system that has an impact on social outcomes. Valuations are important because they influence overall investment decisions about a given project (for example, whether or not to invest; site planning) as well as specific program priorities (budgets and priorities for health and safety training; environmental programs; community relations activities). Valuations can affect social outcomes because they influence resource allocation, risk management, and ultimately reflect how integrated an approach an organization takes. Typically, the more social factors that are integrated into decision-making, the more proactively they are managed. Project valuation practice has evolved over the years to reflect changing values, expectations (financial, regulatory, and societal), and technologies. However, the extractive industry’s commitment to social performance is not consistently and clearly reflected in project valuation practice. Project valuations A wide variety of stakeholders, including investors, lenders, companies, auditors and local communities, use both formal and informal processes to determine the value and investment potential of specific mining assets. While the data and information are typically confidential, stakeholders use a common approach to determine the value of a mining asset. This approach involves both a quantitative assessment (usually using a discounted cash flow (DCF) or other financial model) and a qualitative assessment. It is increasingly clear that the valuation process has an impact on social outcomes, but there are several shortcomings to the current approach and opportunities for improvement. 8 | CANADIAN

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Valuations can affect social outcomes because they influence resource allocation, risk management, and ultimately reflect how integrated an approach an organization takes. Quantitative assessment The quantitative assessment is based on a model (most commonly a discounted cash flow) that makes assumptions about various inputs over a period of time to determine what an investment is worth today. This model includes ‘premiums’ or ‘discounts’ that take certain risks into account. There are various inputs into the model, some of which are known and within company control, such as capital and operating costs, reserves, annual production rates, process and recovery rates, and timeline (timeline has historically been seen as a given known cost, however, it can also be classiﬁed as ‘less known’ because of potential delays in permitting and obtaining a social licence.) Some inputs are outside of the company control or unknown (and therefore require assumptions to be made) such as commodity prices, foreign exchange rates, interest rates/cost of capital, and royalties and taxes. At present, there are material costs of social impact management included in the DCF or other models used. These are inputs that are known and within company control, such as the costs of closure obligations, resettlement, and community revenue sharing or impact beneﬁt agreements. These cost calculations are based on expert knowledge, assumptions, and legal requirements, and supplied by internal or external experts such as social performance practitioners and specialists. Qualitative assessment A more qualitative, often less formal assessment follows the valuation model. The qualitative assessment considers factors that are seen as harder to quantify, including social factors, risks and impacts. The qualitative assessment is important because it can make a project not viable, regardless of the economic value determined by the quantitative assessment. For example, a project in a highly uncertain regulatory jurisdiction or a project with a history of social conflict or protest by local www.canadianminingjournal.com

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communities, may be assessed as not viable because of those issues. Some organizations have more established methods for conducting these assessments, but often they are more of a ‘gut check’ to incorporate issues which are seen as important but unable to be integrated into the financial model. Like the quantitative assessment, qualitative assessments take into consideration inputs that are both within and outside of a company’s control. For example, inputs include company management capacity and management systems, jurisdictional or country risk, the capacity of key stakeholders to fulfill their roles and responsibilities (for example, capacity of local government, regulatory bodies), and an existing social licence to operate. Just as the ‘big ticket’ social costs are considered in the quantitative assessment, the ‘big ticket’ social risks are captured in the qualitative assessment. However, the practice for integrating social risks in this assessment is often more of a ‘gut check,’ reliant on intuition. Social factors The valuations process as a whole both impacts and is impacted by social factors. And while social factors are considered in both the quantitative and qualitative assessments to some extent, there is no consistent method for integrating social considerations into the project valuations process. Currently, systematic and thoughtful integration of social factors is dependent on the organization and the people involved. The various stakeholders involved in project valuations have identified the specific challenges this represents: w Social risks (to a company or community) are included in the qualitative assessment but rarely do they impact the financial value of a project. This continues, despite evidence that projects with high social risks and low social licence to operate can lead to cost overruns, shutdowns, long permitting timelines, and costly social impacts for local communities. w Material social costs are included in the quantitative assessment, but only as one input. The impact of social factors on other line items such as labour or procurement is rarely considered.

w Neither the quantitative nor qualitative assessments value the capacity of companies, governments and other stakeholders to manage the positive and negative social impacts of mining. Proven good management for ensuring good social performance – like an understanding of context, good engagement practice, and community support/consent – does not impact a project’s valuation. However, strong management capacity does affect social licence to operate and social outcomes, particularly for exploration companies which have smaller budgets but whose activities and approach set the tone for social impact management for a project’s life cycle. Where do we go from here? Investors, operators, civil society and impacted communities across the spectrum agree that there is an urgent need to improve the practice of integrating social factors into project valuations. Some of the ideas that have been suggested, and require much more discussion, include: w Improve the process and deﬁnitions for determining material social costs and including them in the quantitative assessment; w Include a social premium in quantitative assessments such as discounted cash flow; w Develop a curve that measures the impact that the social context and stakeholders’ ability to manage social factors have on timeline and costs; and w Apply more rigorous social screens in the qualitative assessment. For example, this could be based on a set of criteria predeﬁned by the business as critical factors. CMJ 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. JANE CHURCH is a co-founder and director of collaboration with NetPositive.

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w The deﬁnition of ‘material’ for social costs is not consistent. There is no commonly understood dollar range or project impact that determines if a cost is material. Furthermore, a consistent understanding about who considers which social costs to be material, is lacking. As a result, it can be difﬁcult to decide which social costs to integrate into the valuation process. MAY 2018

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IN MY MINE(D)

EVs driving growing enthusiasm for battery metals mining By Sander Grieve

couple of weeks after the Prospectors and Developers Association of Canada’s annual meeting, the Auto Show came to the same building in Toronto. The excitement at both shows this year was all around the next generation technologies for electric vehicles (EVs). Automakers, and key markets like China, are heralding the age of EVs on a timeline that contemplates rapid change. Projections for electric vehicles to take to the world’s roads have soared, along with the prices of some of the metals used to make the vehicles’ lithium ion batteries. The United States Geological Survey (USGS) reported that in 2017, demand doubled average annual cobalt prices and the average price of lithium was up 61%. BMO Capital Markets took a deep-dive into The Lithium Ion Battery and the EV Market in a February 2018 report. It provides valuable insights on how the battery industry is preparing for massive growth, and how supply chains of cobalt, lithium and nickel are directly linked to the growth of the EV market. These metals are all key components in producing lithium ion batteries. Cobalt Almost two-thirds of current global cobalt output comes from the Democratic Republic of Congo (DRC) and production is rising. This exposes supply to a challenging, but mineral-rich, jurisdiction. China has taken on the challenges of the DRC through direct engagement and has established deep supply chains for cobalt from the DRC as a critical element to its EV aspirations. Not coincidentally, China leads the growth of the global EV market and is home to the largest EV company in the world. Adding to the complications, cobalt is nearly all mined as a byproduct of other, more abundant metals, such as nickel or copper. This makes production driven, at least in part, and frequently primarily, by the markets for the principal metals, which do not always link to EV enthusiasm. Current supply continues not to meet the anticipations of demand leading to interest in other markets, such as our own. According to Reuters: “Nervous Asian battery makers are turning to early-stage cobalt projects in Australia and Canada to lock in supplies of the critical battery ingredient ahead of expected shortages as demand for electric vehicles revs up.” Lithium The USGS reports that security of lithium supply has become

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a top priority for technology companies in the U.S. and Asia. Strategic alliances and joint ventures among technology companies and exploration companies continue to develop as a means to ensure a reliable, diversiﬁed supply for vehicle manufacturers. Sovereign risk, however, continues behind these arrangements. The global distribution of lithium is broad, with huge deposits in Latin America, Canada and Australia, and exploration continues. Resources need to be turned into reserves and reserves into operating mines in order for the market to meet the demands of battery producers as they come on stream. Canadian miners have the expertise to help lead this development around the world, but will face global competitors in this effort. Nickel The nickel-enriched lithium ion battery is anticipated as the dominant technology. But for now, nickel is expected to underperform base metal peers in 2018. Nickel remains a stainless steel driven market at present. But the long-term story for nickel must, if battery expectations are correct, be a good one. EV cathode chemistry must and will shift to higher nickel content over time. So looking ahead, battery demand will become signiﬁcantly more important for nickel, and overtake stainless steel as the main demand driver. Bright but not spotless The future for battery metals is bright, but not spotless. Canadian companies pursing these opportunities have great opportunities, but will have new competitors from an increasingly global looking Asia, led by Beijing. Many of the proponents of EVs at the grassroots level appear to have not confronted the reality that EV technology is not powered by butterflies and unicorns, but by mining. The same eco-sentimentality behind some of the EV movement may constrain the ability to achieve the technological changes desired, as accessing these raw materials faces increasing scrutiny. This leaves us with the other great risk to the sector comes from the unknown, unknowns. Is there a point at which costs, access and ingenuity drive unforeseen technological changes? The opportunity is huge, and growing dramatically; It isn’t without challenge, but what worth doing is? CMJ Mine on. SANDER GRIEVE is a partner, head of mining, and co-head of the corporate department at Bennett Jones in Toronto.

www.canadianminingjournal.com

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FAST NEWS • ENERGY |

Updates from across the mining ecosytem

Bruce Power, Laurentian and MIRARCO explore modular nuclear reactors

n April, Bruce Power, MIRARCO Mining Innovation and Laurentian University signed a memorandum of understanding that will enhance strategic research opportunities, including the long-term potential for Small Modular Reactors (SMRs) to generate clean, low-cost and reliable electricity in rural/remote regions. The five-year, $1-million research agreement will create an Industrial Chair position at MIRARCO Mining Innovation, which will further highlight opportunities in sustainable and clean energy solutions in Ontario’s north, bringing an enhanced perspective to the university’s current research. MIRARCO Mining Innovations is currently working with Laurentian on sustainable energy solutions in mining and remote communities. “The chair position will allow MIRARCO to further explore the application of SMRs to remote mining operations”, said Vic Pakalnis, president and CEO of MIRARCO and the Associate Vice-President of Laurentian Mining Innovation and Technology. “By welcoming Bruce Back row: Glenn Thibeault, Minister of Energy (Ontario) and Dr. Pierre Zundel, interim president and vice chancellor, Power into the fold, it will support Laurentian University. Front row: Dr. Rui Wang, vice president Research Laurentian University; James Scongack, increased research in mining safety vice president Corporate Affairs Bruce Power; and Vic Pakalnis, president and CEO MIRARCO. and align further research with CREDIT: LAURENTIAN UNIVERSITY Laurentian Mining Innovation and Technology, allowing for dedicated joining forces with the sustainable energy research community, time to foster research excellence. Northern Ontario will benefit we can help to guide and focus their efforts as SMRs become a from this strategic investment by the capacity to recruit a chair of viable option for these communities.” high calibre, who is internationally renowned in the field of susThis collaboration is a continuation of the work Bruce Power tainable energy solutions.” has already been doing in the area, when it committed $5 milMike Rencheck, Bruce Power’s president and CEO, said the lion in funding in 2016 to the Northern Ontario School of company has great interest in the developing field of SMRs and Medicine (NOSM) to conduct health research, specifically in is participating in efforts by Natural Resources Canada to create relation to radiation and the environment, Rencheck added. an ‘SMR roadmap’ for deployment of new, long-term, clean Glenn Thibeault, Minister of Energy and MPP for Sudbury, energy supply options. These clean, low-cost, innovative said this is a tremendous opportunity for MIRARCO Mining nuclear technologies could play a role in safely powering the Innovation, which is celebrating its 20th anniversary on April 6. most remote northern communities that don’t have adequate “Ontario has been and continues to be a leader when it electrical grid infrastructure, he added. comes to clean and sustainable energy,” said the Minister of “Right now, some of the most remote northern communities Energy and MPP for Sudbury. “Investing in research for susare serviced by diesel generators and other unsustainable methtainable and low-carbon energy sources right here in Sudbury, ods that could be replaced by Small Modular Reactors, or other is a key part of our commitment to securing a clean energy low-carbon energy sources,” Rencheck said. “Bruce Power future in remote Northern Ontario communities.” wants to be at the forefront of nuclear power’s future, and, by

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• SERVICE |

ABB’s Ability collaborative operations centre delivers digital performance

BB’s new Ability collaborative operations centre will connect systems, software and services used by customers with ABB personnel to leverage the industry and informational expertise of both customers and ABB for higher overall operational efficiency. This approach leverages ABB’s extensive operational technology expertise to provide data driven improvement areas for customers through remote connectivity, secure access, and technical support. The Västerås centre will support ABB’s mining customers, and will co-ordinate with other ABB collaborative operations centres around the world to provide expanded support and additional expertise. Each Ability centre is staffed with process experts and equipped with digital technology that serve specific customer needs. The centre will support the recently

MAY 2018

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announced ABB Ability performance improvement for hoists service. This remote-enabled, software-assisted service analyzes mine hoist data 24/7, continuously gathering and analyzing data to automatically identify, categorize and prioritize issues to address. It delivers this data via predictive notification to customer and ABB personnel, so that fast action can be taken to improve condition and performance. This service reduces unplanned hoist stoppage and increases system safety and reliability. Other ABB advanced digital services deliver proactive optimization to ABB control systems, PID control loops, cyber security, drives and rotating machines. Sensors and operation critical systems transmit data on the health, performance and location of plant equipment to the collaborative operations centre, where sophisticated software performs advanced

An ABB collaborative operations centre. PHOTO CREDIT: ABB

data analytics 24/7. Insights gained allow engineers to quickly diagnose potential issues, advise on preventive maintenance, and recommend measures to improve performance. ABB experts and customers work closely together, making data-driven decisions in real time that increase operational and business performance. ABB Ability collaborative operations is a true Internet-of-Things application, and is part of the company’s portfolio of ABB Ability with industry leading digital solutions. Collaborative operations provide performance management, remote monitoring and preventive analysis technologies to ensure security, and improve efficiency and productivity in various industries. FAST NEWS CONTINUED ON PAGE 16

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2018-04-19 1:25 PM

FAST NEWS • COMMUNICATIONS |

Updates from across the mining ecosytem

Ericsson and Ambra Solutions deliver deepest LTE network at LaRonde

ricsson and Ambra Solutions have worked together to deliver Canada’s deepest underground LTE network for Agnico Eagle’s LaRonde mine, in Quebec. Located 3 km below the surface, the LTE network will provide data and voice mobility services across the site and enable several Internet of Things (IoT) use cases to improve. LTE cellular networks can provide data and voice mobility services over low frequency bands that allow a better propagation than any other currently available technology, delivering faster, more advanced wireless technology. The network in LaRonde is utilizing band 5 at 850MHz. Ambra is the only Canadian operator deploying private LTE networks in underground mines. The solution is based on the latest Ericsson Radio System portfolio of basebands and radio units, software upgradable to provide Massive IoT capabilities for sensor-based applications and support 5G New Radio (NR) capability.

We’ve got it in the bag!

The underground ventilation cooling system at Agnico Eagle’s LaRonde mine, in Quebec. PHOTO CREDIT: Agnico Eagle

Eric L’Heureux, CEO, Ambra Solutions, says: “The LTE technology is the most cost effective and reliable solution to provide real-time coverage to several kilometres of underground tunnels. A single LTE radio can cover up to 6 km of tunnel, whereas it would take over 60 active Wi-Fi access points to cover the same area.” LTE networks open a new suite of capabilities and possibilities to cost effectively enable many smart mining related tasks for open pits or underground mines. Unlike other options, LTE networks allow the use of IoT sensors and devices to monitor, operate and collect data throughout the mine site, for example related to air quality monitoring. This includes remote control operation of mining machinery,

dispatch systems, emergency notification systems, access control systems, automated collection of data, ventilation fan monitoring and gas detection systems. Graham Osborne, Head of Ericsson Canada, says: “Our work with Ambra brings Ericsson technology to a specialized environment in a unique application. Deploying this underground LTE network will provide us many learning opportunities in a new and novel application and how it can lead to future technologies and ideas.” Completed in December 2017, the LTE network provides connection across the site. It is similar to the mining site of Boliden in Skellefteå Municipality, Västerbotten County, Sweden, which was also built using Ericsson equipment.

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• MATERIAL HANDLING |

Deep 1 ore at Goldex

Rail-Veyor system installed to haul

he Rail-Veyor material handling system, by Rail-Veyor Technologies Global, is now hauling all of the production material at Agnico Eagle Mines’ Goldex mine in Val-d’Or, Que. for the Deep 1 project. Installation of the energy efficient 3-km underground system began as part of Goldex’s new Deep 1 project which was started up in July 2017. The Rail-Veyor system was installed to haul material at lower operational costs than other alternatives, such as trucks or conveyors. As mine production has ramped up, a total of six Rail-Veyor trains are being used in a fully automated and synchronized operation. At the end of 2017, the Goldex mine had proven and probable reserves of 18.2 million tonnes averaging 1.57 g/t gold and containing 917,000 oz. of gold. The majority of the contained ounces – more than 800,000 – are found in the Deep 1 zone. www.canadianminingjournal.com

2018-04-19 1:25 PM

• TECH PARTNERSHIP |

RPM and MineWare deliver real-time decision making capabilities

PMGlobal Holdings and MineWare have released a comprehensive integration between RPM’s short term scheduling solutions and MineWare’s Argus shovel and excavator monitoring system that provides real-time payload and mine plan compliance. This integration enables mining companies to compare their planned production activities against what is actually happening in their mine in real-time. Rather than announcing a partnership and then building a product RPM and MineWare worked together for a year to develop a robust enterprise grade integration, which was released to the industry in March. “We used the new mining ISA95 enterprise integration standards, which means this integration is robust, open and flexible,” said RPM’s CEO and manag-

ing director, Richard Mathews. “This solution fills a void in the mine plan compliance and control space. As the mining industry moves closer towards autonomy and stricter Short Interval Control (SIC) processes there is a distinct need for data to be validated and then transferred between software applications using enterprise integration platforms and standards.” Matthews continued: “This integration sees RPM’s software products pass critical spatial planning data directly from the mine planning systems to the operator display located in the loading equipment. As the equipment progresses through the mining face, actual loading data (e.g. bucket positions, equipment locations, etc.) from MineWare’s Argus system is sent back to the planner and displayed in their planning products so

they can review, analyse and adjust their plan based on actual working information. For both the planners and equipment operators, this integrated solution amplifies their real time decision making capabilities.” RPM also visually overlays the longer term plan guidance polygons so that the planners can view where their machines are operating today and where they need to be mining tomorrow while ensuring they are adhering to where they need to be next week or month – giving a true plan compliance interface that delivers high plan predictability. MineWare CEO Andrew Jessett said full integration between mining operations systems, and planning and scheduling packages, is critical for optimizing the end-to-end mining process and value chain. CONTINUED ON PAGE 18

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CANADIAN MINING JOURNAL |

2018-04-19 1:25 PM

FAST NEWS Updates from across the mining ecosytem RPM AND MINEWARE DELIVER REAL-TIME DECISION MAKING CAPABILITIES, continued from page 17

“Through this partnership, we are enabling a new level of interoperability that creates a dynamic planning and scheduling environment,” he said. “This environment delivers greater integration and feedback between planning and operations for continual improvement. For the mine, this maximizes productivity through greater control, ﬂexibility and predictability of the mining and extraction processes. Having now finalized development of the integration, RPM and MineWare have entered into this Product Development Collaboration agreement to support this product’s entry into the global market.

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he Canadian Mining Innovation Council (CMIC), along with partners from across Canada, submitted a proposal to the government of Canada’s Innovation Supercluster Initiative in 2017. The objective was to transform the mining sector’s productivity, performance, and competitiveness by tackling the shared global challenges of water, energy, and environmental footprint, with bold targets of a 50% reduction in each area by 2027. The CMIC was advised in February that the proposal was not selected for government funding. This initiative was a turning point for the mining sector. It sparked an enthusiastic response from members of the mining innovation community that witnessed an unprecedented level of collaboration among members. The CMIC, its supporters and members remain committed to transforming Canada’s mining industry by advancing the innovation dial forward and pivoting to a modernistic, mining company-led approach. Several mining companies that originally pledged significant funding to the Supercluster initiative have united and indicated they will retain portions of those commitments for projects that directly address significant reductions in energy, water and environmental footprints. In the coming few months, the CMIC will be working closely with our member mining companies to identify and then select a few key projects to be launched later this year. Matching external funding (potentially from a government of Canada program) will also be welcomed to help achieve these goals provided that industry criteria and timeless are met. CMIC is holding its annual general meeting in Toronto on June 6, 2018. Please visit www.CMIC-CCIM.org. CMJ www.canadianminingjournal.com

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2018-04-19 1:17 PM

DIGITAL MINING

Digital era offers miners endless options IoT and analytics driving new insights in mining

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www.canadianminingjournal.com

2018-04-19 1:26 PM

By Alisha Hiyate

y now, even if they havenâ&#x20AC;&#x2122;t acted on it, every mining company has given lots of thought to the potential for digital technologies to change their business. Some, like Barrick Gold, are making dramatic announcements about technology adoption aimed at a complete transformation of their business to capture the value that digital technologies can bring. A few have built integrated operations centres, aimed at breaking down silos. Others are experimenting or have taken bits and pieces that suit their needs. CONTINUED ON PAGE 22

A wind farm completed in 2012 at Rio Tintoâ&#x20AC;&#x2122;s 60%owned Diavik diamond mine, in the Northwest Territories. CREDIT: RIO TINTO

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CANADIAN MINING JOURNAL |

2018-04-19 1:26 PM

DIGITAL MINING

And, because of the many complexities and fast-evolving technology involved, a lot of mining companies are still on the sidelines, but doing their homework about both technologies and vendors, says David Willick, vice-president with Schneider Electric and Mining, Minerals and Metals Segment regional leader for North America. “This whole digital opportunity is both the biggest risk but the biggest reward,” he says. “One of the challenges is that companies are a little bit confused and afraid of making a mistake, so they don’t want to quickly jump to a platform or one particular vendor and then be trapped,” Willick explains. “So customers are doing their due diligence, they’re doing a lot of homework ensuring that the partner or partners that they choose are going to allow them the flexibility to be able to manage their business going forward.” Richard Sellschop, a partner and global leader of the Metals and Mining Digital and Analytics Service Line with consultants McKinsey & Co. says that while the current rate of adoption is uneven, some companies have shown a lot of progress in exploring the potential of digital technologies in mining. “A couple of years ago, for example, autonomous haulage or semi-autonomous haulage was really in the proof22 | CANADIAN

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of-concept phase whereas a number of companies have now moved to production scale adoption of some of these technologies,” Sellschop says. “That’s at the leading edge, but we also do see a number of companies that are intrigued and are trying things in pockets that have worked to crack the code in how they want to scale that use case up and drive impact at a faster pace.” Data integration A big part of the digital opportunity comes from the integration of data that has previously been siloed. Australian iron ore miner Roy Hill is one of the few miners to have a truly integrated operation. Schneider Electric partnered with the company on its remote operations centre, located in Perth, 1,300 km away from the mining operation. The control centre gives the company visibility from end to end of its operations – mining and processing to shipping and port operations. “Putting everybody in one room is an excellent idea to foster collaboration – there’s less hierarchy in this operations centre,” Willick says. “The collaboration that it drives is really quite interesting – you dissolve silos by opening communication and what the remote ops centre does is put people in one room across many different silos and business

areas and also gives the support to the operation that they typically don’t have because they’re so busy onsite operating equipment, they don’t have time for strategic planning.” Integration and availability of data on a smaller scale can also make a big impact. For example, it can make efficiencies more transparent. Consider an underground mining operation where costs are optimized separately by each department. This can actually end up costing the company more overall, Willick says. If the drilling and blasting budget is optimized by using slightly larger drill patterns to save on the cost of explosives and other raw materials, the larger ore sizes that would be generated would result in higher energy consumption and costs at the crushing and grinding stages. “Even though it looked cost-effective for that one particular department... the overall process would be less efficient,” Willick says. “With the availability of data, companies now are looking at this across the operation and spending a little bit more further upstream and then benefitting overall as a corporation.” Sellschop says several McKinsey clients have been able to increase throughput by making use of that data integration and increased transparency through digitally enabled front-line operations. www.canadianminingjournal.com

2018-04-19 1:26 PM

Left: Schneider Electric is a 135-year old company headquartered in France that serves multiple industries, including mining. Right: Mining control rooms. CREDIT: SCHNEIDER ELECTRIC

“We’ve got some underground mining clients that have been very successful in increasing throughput by deploying new generations of mobile solutions underground and aboveground to create better awareness of what the plan is for the day, how speciﬁc headings and pieces of equipment are performing against the plan and being able to make adjustments to the plan in close to real time,” Sellschop says. Renewable energy Advanced technologies in renewable energy, battery storage and distributed energy networks are helping companies respond to higher energy prices by integrating renewables into their existing energy mix. “It’s making sustainability sense, commercial sense and business sense as renewable integration becomes much more mainstream,” Willick says. Schneider Electric is getting more requests for consultation around energy consumption, he adds. “Scheider Electric has an amazing smart grid approach – we have microgrid controllers to optimize the overall use of energy using multiple different energy sources. These are things we actually use ourselves within our own facilities and you can see how much power you’re generating from the solar panels on the roof and how much energy you’re consuming,” he explains. “Once it’s visible, you start being able to control and monitor it a lot better, you become more aware when you make your energy consumption more visible. I think mines are starting to deﬁnitely take this into consideration.” MAY 2018

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Willick sees renewables integration as a sustained trend that will only be fed by carbon taxes that are starting to be implemented in Canada and elsewhere. Ventilation on demand Advances in sensor technology have allowed the development of very sophisticated ventilation on demand systems. The technology allows airflow in underground operations to be directed where

equipment and personnel are located, while airflow to empty locations can be minimized. “The VOD systems that Schneider Electric are critical partners on use sensors underground, variable frequency drives on many fans, and tagging and tracking on both equipment and personnel,” Willick says. “The interesting thing about this solution is it also works at the other end of the spectrum in that if you’re directing the air in a more strategic way and minimizing the wasted air, you can mine at more faces in the event of higher commodity prices, and you can actually boost production.” CONTINUED ON PAGE 24

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2018-04-19 1:26 PM

DIGITAL MINING He adds: “It’s a constant decision being made with data and using analytics.” In-house solutions Other companies have sought to improve efﬁciencies at their processing plants and have achieved between 2% to as much as 4% improvements in yield by applying advanced analytics to their concentration processes, says Sellschop. “(That improvement) comes through being able to model the process better, develop optimization algorithms that are both machine learning algorithms that are continually improving themselves through to validation algorithms to make sure that the intended impact is actually achieved and that the entire model is actually working.” In this case, Sellschop notes that the company actually developed the algorithms in house. “It’s becoming dramatically easier to develop software in the modern age,” he says.

That doesn’t mean that it’s always the right answer, but something created for a specific plant, for example, can be more successful than an off-the-shelf solution – because of specific technological requirements and because of a lower degree of front-line adoption. “Often the smallest issue which doesn’t even show up in a technical specification document can become the reason that a tool’s not adopted at the front line. The clients we’ve seen actually developing solutions themselves, are really taking a design thinking approach where user journeys are mapped out and pain points are understood – have a far greater chance of seeing solutions being adopted and used and impact being generated as a result.” Simulation software Simulation or digital twin software is a growing application for both training and for planning, says Willick. Schneider Electric’s simulation software has become

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so accurate in predicting what will happen in a given situation, it is very valuable for training for customers like Chilean copper miner Codelco. Willick says the software also allows companies to do “what-if” planning and run scenarios without risk. “By doing it offline in the simulator using the digital twin, we’re really able to optimize the process in an offline environment ﬁrst, and then bring the most optimal solution to online. This is all enabled with the digital era that we’re in now.” The cloud There are many examples of companies making use of data available from mobile equipment for predictive maintenance – to monitor the health of their assets, and to plan for failures before they happen. Some, including at least one McKinsey client Sellschop is aware of, are using the cloud, which offers scalability, cost, and security advantages, to do so. “There are no on-site servers, no hard-

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Integrated operations provide visibility across the value chain, from mining to shipping. CREDIT: SCHNEIDER ELECTRIC

ware on the ground, which enabled them to implement (their predictive maintenance solution) much more quickly, but also from an infrastructure perspective being able to maintain and thinking about taking this to other sites in a much simpler ways.” Advice for miners There will undoubtedly be many more ways to apply analytics to mining operations, and as the digital capabilities of process engineers, metallurgist, supervisors, etc. grow, so will the applications. “If you’re talking speciﬁcally about data and what value it can bring, it’s an intricate journey – it’s not a binary, to borrow a digital phrase. It’s iterative,” said Sellschop. The most important thing to start is that companies need to ensure that they know what is that they identify the business need that they want to target, says Willick. “Fundamentally, it has to get down to the business need and ensure that you’re looking to achieve a particular business need – so increasing your safety, increasing your reliability,” Willick says. “You MAY 2018

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have to start with the business need and then work backwards to having access to the data and using the tools that exist to achieve that outcome.” Miners should also keep in mind that the biggest challenges they will face in becoming digital creatures are not necessarily technological, says Sellschop. “The biggest consistent mistake that I see being made is the assumption that this is mostly a technological issue and challenge. For sure technology is part of the challenge, but it’s equally a leadership and capability and change management challenge.” That said, miners need to educate themselves on the latest technology for the particular application they’re looking for. “We are living through a time right now of incredible change in – for example, IoT (Internet of Things) devices, where the cost and ease to move data off of a mobile device is changing dramatically,” Sellschop says. “But equally, there are a lot of people out there selling yesterday’s technology. This is why it’s really critical for people to understand which way various trends

are going and do you want to lock into a certain generation of technology? Of course there never is a right or wrong answer and sometimes it requires a lot of consideration by management of various pros and cons.” Miners will have to adopt new skills – being able to use coding languages Python and R, for example, which Sellschop calls “the Microsoft Excel of the next two decades.” He says: “We do see at the advanced analytics end of the spectrum that this becomes a core skill for many clients.” And they will also need to embrace agile development, where a minimal viable product is developed and tested, based on a need, rather than a product that has every conceivable bell and whistle. “Putting together a comprehensive speciﬁcation document which is then sent out to numerous vendors – it becomes a long and often costly process where the analogy .... is like speccing out the most exhaustive pocket knife with every blade, every feature you could ever dream of before you even have tried out the single blade, smallest version to see is this pocket knife actually going to work.” CMJ CANADIAN MINING JOURNAL |

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CYBERSECURITY

MINERS BAND TOGETHER TO

Photo: gorodenkoff, iStockimages.com

fight cyber-c

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www.canadianminingjournal.com

2018-04-19 1:29 PM

r-criminals By Dâ&#x20AC;&#x2122;Arcy Jenish

hey called themselves Angels_of_Truth, but there was nothing angelic or truthful about them. On the contrary, they were driven by greed and their actions were malicious, not to mention criminal. These so-called Angels were blackmailers who hacked the computers systems of eight Canadian mining companies between 2013 and 2016 and stole their data. Then they demanded ransoms ranging from $124,000 to $620,000, payable in Bitcoins, or they would dump the information on publicly accessible websites. CONTINUED ON PAGE 28

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2018-04-19 1:29 PM

CYBERSECURITY

Two companies – Toronthe industry have since moved to improve their defences ISACs work on to-based Detour Gold and against cyber-attacks. a simple Vancouver-based Goldcorp – refused to meet the principle. If one member Sharing communities demands of the blackmail- company gets hacked, In March 2017, executives from six mining companies met ers and their information or detects suspicious and agreed to form the Global Mining and Metals Inforwas leaked. In the case of activity on its network, mation Sharing and Analysis Centre, MM-ISAC, for Detour, the leak included a short. ISACs are non-profit organizations formed across an that company relays corporate credit card used by industry to collaborate, pool resources, and share informathe CEO and a photocopy the information to the tion necessary to deal with threats to information systems. of his driver’s licence as well ISAC, which then shares In the U.S., for example, the aviation, retail, financial seras social insurance numbers, it with the rest of the vices, public transit and real estate sectors, among others, health card numbers, home membership. have all formed ISACs. addresses, banking informa“Cybersecurity is becoming more and more important tion and much else on 1,321 because we’re all based in the digital world,” says Cherie employees. Burgett, director of operations for the Vancouver-based Goldcorp got hit just as MM-ISAC. “Some mining companies that are more hard. The hackers dumped mature have analysts watching for anomalies on their syscontract agreements with tems or they have tools to detect them. Some of the compaother companies, budget nies that are less mature don’t have dedicated staff looking documents from 2012 to for this type of information.” 2016, payroll information, The five-member board of MM-ISAC includes senior email addresses and phone numbers of employees, as well as IT officers from Goldcorp, Newmont Mining, Barrick Gold, 2013 performance reviews and 2014 compensation rates. Eldorado Gold and Teck. Membership costs $25,000 annuThe hackers have never been caught and nor have investially, it is open to companies of all sizes, from junior explorers gators been able to determine how many people were involved to multinationals, and companies at either end of the spectrum or where they were based. However, they were tracked to a can benefit from information sharing. Russian IP address and they communicated in both English ISACs work on a simple principle. If one member comand Russian. pany gets hacked, or detects suspicious activity on its network, “It was clear that they weren’t Russian because it looked that company relays the information to the ISAC, which then like they’d used Google Translate to translate English into shares it with the rest of the membership. The MM-ISAC has Russian,” says Charles Carmakal, vice-president of Mandicontracted with a Florida-based company called Perch Security ant Consulting, the company that investigated the attacks on to handle the analysis and sharing of a threat. behalf of its parent firm, California-based FireEye. Perch founder and chief executive officer Aharon Chernin Carmakal speculates that the hackers, who also operated says that joining an ISAC is a cost-effective way to enhance as the Tesla Team, a label used by a notorious group of Sersecurity. bian hackers, may have attacked Canadian mining companies “One of the advantages of sharing communities is that to because they were seen as soft targets. However, those breaches create and consume the threat intelligence that ISACs disserved as a proverbial wake-up call and some companies in tribute requires you to purchase security tools that can cost 28 | CANADIAN

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www.canadianminingjournal.com

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Real security is when you know what threats you’re looking for. ISACs tell their members what to look and how to go get it. One company’s incident becomes everyone else’s defence.’ – AHARON CHERNIN, CEO OF PERCH SECURITY

companies hundreds of thousands, if not millions of dollars a year,” says Chernin. “Then they have to hire cyber threat intelligence analysts to run these tools.” Only the largest companies can afford to invest that much money to protect themselves. On the other hand, Chernin notes that companies with as few as 10 work stations can and do join ISACs. Sharing communities are not only cost effective, they also provide better protection than going it alone. “If you go out and buy the most expensive security products on the market, you’re only secure because the vendor says you’re secure,” Chernin argues. “Real security is when you know what threats you’re looking for. ISACs tell their members what to look and how to go get it. One company’s incident becomes everyone else’s defence.”

Case study The attacks on the eight Canadian mining companies represent a case study of sorts on what happens when organizations go it alone on security. The Angels_of_Truth stalked these companies one by one and used a variety of methods to hack their systems. In some cases, security tools employed by the companies were able to detect the breaches. In others, the companies were unaware of the attacks until they were contacted by the hackers. “A company’s first step is to figure out whether they can resolve the issue themselves or do they have to call somebody for help,” says Carmakal, whose firm has helped hundreds of companies deal with these attacks. “There’s a few fundamental things we do. We investigate what happened. How did the bad guys break into the network? What was the vulnerability they exploited? ” Carmakal, who is based in Washington, D.C., and his CONTINUED ON PAGE 30

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CYBERSECURITY Once the incident has been handled, a victim should Montreal-based colleague It’s one of the review and tighten access to its back up system. According Charles Prevost investigated most important to the FireEye report, primary and back up data are very the attacks on behalf of the issues facing the often part of the same system, which means hackers can mining companies and prepared a report that explained industry and it’s growing access both. Finally, a company that has been hacked should enhance its security since the hackers may return and cause how the breaches occurred. in importance. trouble all over again. In at least two cases, the – H E A T H E R E D N I E , G M S G ’ S In the long run, says Chernin, being part of an ISAC is hackers used “spear phish- M A N A G I N G D I R E C T O R the best way to defend against breaches. ing emails with malicious “It’s not like turning on a light switch,” he adds. “ISACs attachments.” One of the are communities. IT executives create relationships with emails referred to an updated each other. They become friends, which creates the level of holiday schedule while another cited an employee questiontrust needed to share threat information. Joining an ISAC is naire. The attackers also used “specifically crafted lures that taking security into your own hands as opposed to relying on enticed victims to click on a link” which directed them to servthe marketing material of some security product.” ers controlled by the hackers. The industry is tackling the issue on another front as well. The Global Mining Standards Group, a non-profit, MonHandling breaches treal-based organization that promotes collaboration in the The FireEye report on the attacks provided the victims with industry, supported the creation of MM-ISAC, but is also advice on how to handle future breaches. First, validate the launching a working group on cyber-security. breach and its scope. Make hard decisions on must-have verThe move comes at the request of its members. “It’s one of sus nice-to-have data. Victims should limit their interaction the most important issues facing the industry and it’s growing in with their attackers and should consider having legal counsel importance,” says Heather Ednie, GMSG’s managing director. involved in all communication with them. They should con“It’s hit the industry with full force in recent years.” sider all options before paying ransom and seek expert advice. CMJ

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Power generation equipment ‘energizes’ mine operations, productivity

urrent mining operations require access to considerable energy resources. For operations close to populated areas, the local power grid is capable of providing the power needed. Remote operators, on the other hand, have their own dedicated power generation facilities. These mining operations often have just enough power for their existing needs, with limited capacity to support expansion or the addition of new mining processes. Rental power generation provides a viable temporary solution for every stage of a mine lifecycle until the grid or onsite power facilities are expanded in an existing or new mining region. These rental solutions help an operator advance expansion plans and avoid unnecessary capital expenditures. Further, rental solutions are flexible, scalable and customized to meet specific customer needs, such as equipment winterization packaging for harsh weather demands like those of northern Canada. For example, a mine site located atop steep mountain terrain in Alberta was undergoing an expansion which

included a new underground coal mine. The mining company faced a couple of significant challenges that were prohibiting their production timeline: limited availability to power from the grid and the newly built transmission lines had not yet been energized. In addition, the project site had a small footprint from which to set-up additional operations and frigid working conditions of -49º Celsius/ -56º Fahrenheit. Six megawatts of cold-weather generators were transported and installed to run the customer’s electric mining equipment, drills, conveyor, offices and shops. The rental power enabled the mine to quickly go into production, allowing the company to meet previously-made customer commitments. Once the transmission lines were energized, the mine smoothly transitioned to utility grid power. This example showcases how rental power solutions resolve operational issues, thereby minimizing downtime and maximizing results across the various phases of mine development until a permanent solution is commissioned.

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CANADIAN MINING JOURNAL |

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ADVERTORIAL

EDITORIAL PROVIDED BY MINESTORIES.COM

A Quest for Electrification ONTARIO, CANADA. Goldcorp is developing the world’s first all-electric underground mine, an ambitious project the company hopes will help inspire an industry-wide shift to more sustainable mining.

oldcorp’s Borden Lake project lies just south of the Chapleau Crown Game Preserve, the world’s largest at 2 million acres (700,000 hectares). The portal is a stone’s throw from the pristine body of freshwater for which the mine is named, brimming with trophy fish each spring. Part of the orebody Goldcorp will ultimately mine sits beneath the lake, whose water is sacred for the area’s four First Nations communities. It’s no surprise, then, that Borden project manager Luc Joncas uses words like “invisible” and “silent” when he describes the development aims of the region’s first mine. “Mining is brand new in this area, so it’s essential to build a sustainable mine,” Joncas says. “We want to be accepted by the neighbours, whether it’s the First Nations that live next to us or even the cottagers around the mine. Goldcorp senior project engineer Maarten van Koppen produced Borden’s pre-feasibility study and all associated engineering leading up to it. “We knew that we had to create a mine in close collaboration and coexistence with our local stakeholders,” he says. “It was very important to us to minimize all sources of emission, whether it’s noise, dust or other pollutants. Going electric really helped in achieving those goals.” Goldcorp has designed Borden Lake to become the world’s first all-electric underground mine when it reaches commercial production next year, an undertaking the company expects to not only help minimize community and environmental impact but also improve health and safety for employees – all while boosting Goldcorp’s bottom line. John Mullally, Goldcorp’s director of government affairs and

energy, considers a shift to cleaner, more sustainable mining practices essential. “There’s so many societal expectations and changing views on things like climate change,” Mullally says. “For us to be a modern company, we have to be moving sort of at the same rate as changes in society, so I think that energy overall, and climate change specifically and mitigating our impacts to climate, that’s become a big focus in the last three to five years with Goldcorp. We’re changing the culture inside the company and we want to encourage a change in culture across the industry.” By the time Borden is in full production, there will be no diesel-powered equipment underground. A combination of tethered electric and quick-charge battery-powered equipment will comprise the entire fleet. “The battery technology advancements really enable us to go fully electric,” Joncas says. “Not only do we plan to prove to the industry it’s possible, we’re keen to prove that it will be cost effective and bring even more value to our shareholders than a conventional mine. We believe electrifying Borden makes sense economically, environmentally and socially.” By eliminating diesel underground and fully electrifying Borden, Goldcorp anticipates a 70 percent reduction in greenhouse gases and annual savings of 2 million litres of diesel fuel and 1 million litres of propane. The company also expects to save 35,000 megawatt hours of electricity yearly, due in large part to drastically reduced ventilation needs. “Electrification is the ultimate win-win, especially complemented by innovations like ventilation on demand and full connectivity,” van Koppen says. “The main benefits that we see

SANDVIK DD422IE Sandvik DD422iE is an electric development jumbo designed to drive down production costs while reducing the environmental impacts of drilling and tunnelling. By using electric energy from an onboard battery during tramming, Sandvik DD422iE produces zero emissions while manoeuvring between headings. This improves health and safety for miners working underground. Less diesel usage in a mine thanks to diesel-free drilling can ease ventilation requirements, while also reducing associated diesel logistics and maintenance expenses. Using a mine’s existing electric infrastructure, the Sandvik driveline technology enables the battery to recharge during the drilling cycle. The battery will even recharge while Sandvik DD422iE is tramming downhill, using energy generated by the braking system.

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Luc Joncas, Borden Lake Project Manager

with going electric are certainly the elimination of fuel, reduced maintenance, reduced greenhouse gases, reduced power consumption, and of course the biggest one is the elimination of diesel particulate matter in underground environments, which is hugely beneficial to the health of the workforce. “We were able to eliminate a return air raise and our intake raise, we could reduce the diameter from five metres to four metres, so there’s big cost savings to be had if you set it up right from the get-go.” Miner Randy Harrison appreciates the absence of underground emissions at Borden after working in conventional diesel mines across four continents since 1980. “This is like no other underground environment I’ve ever worked in,” Harrison says. “The air is so fresh.” He’s behind the controls of a Sandvik DD422iE, one of two identical units Goldcorp depends on to develop Borden’s access ramp. “The computer setup and the preciseness that you can get on the face, bar none, best jumbo they got around,” says Harrison, who’s operated development drills since 1989. “Sandvik has been on the cutting edge right from day one since I started operating them.” Joncas calls the jumbo “the star of the fleet. “It enables better accuracy, more control, consistency from crew to crew. For us it enables also a safer operating workplace. We start from a fresh face with virtually no bootlegs. We manage the profile better and have less overbreak. It allows us to optimize the drilling pattern. Our holes are higher quality.” Sandvik DD422iE is connected to the grid at Borden while drilling, during which the jumbo charges the battery it uses to manoeuvre between faces. “We thought charging-while-drilling was a great concept, something that could potentially be very valuable in other equipment in the future,” Joncas says. “I was impressed that the jumbo can handle multiple voltage standards. We had a training camp MAY 2018

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at a mine with a 600-volt standard, and the jumbo works equally well on the 1,000-volt network here.” The rig’s fully integrated battery technology means no changeouts, a safety and productivity benefit, Joncas says. He also cites the regenerative braking system as a plus and says the electric driveline in Sandvik DD422iE makes it much easier to maintain than conventional jumbos. “When we purchased the fleet, one thing we were extremely attracted by was the fact that a lot of the mechanical components are removed,” Joncas says. “No more diesel engines, no more oil changes to be done.” Goldcorp bought Borden from a junior explorer for 526 million US dollars in 2015. With current gold reserves of 950,000 ounces, the operation figures to produce more than 100,000 ounces per year over at least a seven-year mine life. “We are confident that our exploration will extend that,” Joncas says. “The longer our mine life, the more cost-effective our initial capital investment in an all-electric fleet.” Ore will be trucked 160 kilometres (100 miles) to Timmins for processing at the Dome mill at Goldcorp’s Porcupine Gold Mines. “Using an existing facility that operates extremely efficiently and not having to permit and build a new mill and tailing facility minimizes our cost and our environmental footprint,” Joncas says. Decline construction at Borden began in mid-2017 and a 30,000-ton bulk sample is expected to be extracted and analyzed by the end of this year with production expected to begin in 2019. “We believe Borden will be a great pilot to prove that there are tremendous financial and environmental benefits from the adoption of cleaner technology,” Mullally says. “It’s really exciting to be a part of. Once other companies see that the business case works, we hope to see large scale adoption at a meaningful rate across the mining industry.” CANADIAN MINING JOURNAL

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PROFILE

Teck by Alisha Hiyate

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looks to unleash culture shift in innovation

www.canadianminingjournal.com

2018-04-19 1:32 PM

ar from being a mining industry laggard in innovation over in mid-2008, metals and coking coal prices tumbled, forcing the past decade, Teck has, in many ways, been a leader. Teck to sell assets, suspend its dividend and slash spending. The more than 100-year-old company has been ahead “I think it’s true throughout the industry that when you’re of the curve in implementing a digital strategy starting about in such a severe downturn that a lot of things kind of get put 10 years ago; its Courageous Safety Leadership program has on hold while you focus on collecting as much cash as you can improved safety and productivity over the past 8 years, and it’s in a low (commodity) price environment and reducing debt. been on the forefront in climate change transparency, planning Fortunately, we’re well past that phase,” Lindsay says. and even advocacy. Teck has reduced its debt from US$7.2 billion in 2015 to Teck’s efforts on productivity have had tangible success. For US$4.8 billion, and it has no payments due this year or the example, over the past six years, it’s improved productivity in next two years, with only a small amount due in 2021. its coal division by 24%. But now, inspired by a visit “We’ve cleared the decks in advance of building to Silicon Valley several months ago, Teck’s presia big project in Chile (Quebrada Blanca phase 2) so dent and CEO Don Lindsay is aiming even higher. we’re not really focused in that direction now, we’re Lindsay said that it’s clear from observing what focused on just building the strongest company we tech leaders there are doing and from assessing the can from a productivity and technology and innovalandscape of business in generally, that technology tion point of view.” is having an extraordinary impact on productivity Teck recently reported record revenue and across sectors. cash flow for 2017, outdoing figures the company “In our industry for the last four or five years, we reached in 2011, when prices for metallurgical coal went through such a severe downturn we were all and copper were significantly higher. focused on cost, cost, cost and our proAt the same time, the company is in ductivity gains were in the 3-5% range. a good position now because of investWhereas with the use of some of the new ments it has made over the past 10 years technologies, people talk about 10x and on digital technology, led by chief inforcomplete step-change gains in producmation officer and vice-president Teck tivity,” Lindsay said. digital systems, Kalev Ruberg. The One “So what I’m trying to do is unleash Teck program consolidated the discrete Innovation is not just a cultural change, inject a whole new systems that existed at different sites technology, innovation is energy – similar to what we did in safety onto one consistent digital platform. really ideas and we know about eight years ago.” At the same time, Lindsay says he was that everybody in the whole upgrading Teck’s systems. The details of the strategy will have to wait until a new executive role is filled – company from the front lines “So we find ourselves in a pretty good the company was in final interviews for of the business on down has position relative to others that we don’t a new senior technology executive the an idea of some sort on how need to make sort of big announcements same day Lindsay spoke with CMJ in and investments to get to a certain place to do the job better, and April – but the technology shift at Teck we’re already there,” he added. what it would take whether because has been under way for some time. “That’s one of the contributing factors to it’s an operating practice or during the downturn we were able to take The idea is to effect a culture shift that a piece of equipment or a empowers Teck employees to share their out costs probably a bit faster than most ideas. and it’s because key to all that is having new technology. “Innovation is not just technology, the information -- the right information – DON LINDSAY, CEO innovation is really ideas and we know in the right place.” that everybody in the whole company Many of the innovative technologies from the front lines of the business on down has an idea of that Teck is using now rely on that digital connectivity. some sort on how to do the job better, and what it would take For example, the company is employing machine learning whether it’s an operating practice or a piece of equipment or by using a Google platform to analyze data streams from haul a new technology,” Lindsay said. “Not just Teck, but most of trucks to predict maintenance issues before they happen. industry is not very good at collecting those ideas and impleIt’s also using a remotely controlled dozer to access areas in menting them, and this is something that we want to unleash the pit at the Coal Mountain operation that are inaccessible our energy on and get good at.” with a conventional dozer. Digital strategy Teck has had some difficult moments over the past decade. After the $14-billion acquisition of Fording Canadian Coal

A shovel at Teck’s Elkview coal operation. CREDIT: TECK

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Ore sorting At its Highland Valley Copper operation, 50 km southwest of Kamloops, B.C., Teck has partnered with Vancouver-based CONTINUED ON PAGE 36

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PROFILE The heads-up display technology is being developed at the Elkview coal operation in southeast B.C., with the input of the shovel operators who will be using it.

MineSense Technologies to commercialize ShovelSense technology. Pilot-scale testing of the technology occurred in 2016, followed by installation of a full-scale unit on one of the operation’s commercial shovels. The operation is the first worldwide to use ShovelSense in a production setting on this scale. The technology introduces a new upgrading step at the truck, after the grade control planning step, says Bryan Rairdan, manager of technical services at Highland Valley Copper Operations. “No deposit is pure ore, there’s of course a mix of ore and waste,” he says. “Historically, we’ve used very blunt tools to differentiate ore and waste and during the actual process of mining. It’s very easy to get some of the ore and waste misdirected, either because the variability is undefined or the material has moved from its initial position during blasting. The value around sensing at the shovel and making decisions on a shovel by shovel or truck by truckload basis really is about exploiting the inherent variability of the deposit.” ShovelSense sensors, which are mounted on the shovel, use 36 | CANADIAN

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At top: Teck’s Highland Valley Copper operation. CREDIT: TECK Below: The heads-up display technology being developed for Teck’s metallurgical coal operations. CREDIT: TECK

X-Ray fluorescent sensing technology to indicate grades of various metals. Rairdan says that the technology allows the company to be more selective and precise, and at Highland Valley, which is a low-grade, high-tonnage and mature operation, that could make a significant difference in operating margins. “We are currently using it to identify material that is flagged as waste, but it does actually have enough copper in it to be ore,” he explains. “We are redirecting material that would be destined for the waste piles to the mill, based on the readings from the one unit.” Not only does this allow the company to extract more ore and valuable metal from the deposit, it also has the ability to reduce the amount of waste rock that gets processed, consuming energy needlessly. Being a new technology, Rairdan says there have been some www.canadianminingjournal.com

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bugs to work out. Teck worked with MineSense to ensure the technology was as robust as it needed to be, given the “aggressive” environment on the operation’s shovels, which have a bucket capacity of 80 tonnes each. There was also a lot of work to do to ensure that the machine’s readings were accurate, and to calibrate the readings. “Any time you measure something you have to have a way to calibrate the measurement. In this case, we didn’t have the right data at the right scale to calibrate the system against, so we had to develop some unique methodologies in order to calibrate the readings that the shovel was giving. And a lot of those we had to develop in concert with MineSense proprietary technology and methodology.” Another priority was working with the provincial regulators to demonstrate the safety of the technology. “Ultimately, this is an X-ray system that does generate X-rays out in open space, but of course it’s on an operating shovel bucket so nobody’s in the area,” Rairdan says. He says that Teck ensured there wasn’t any X-ray exposure and communicated that to both the regulators and its employees. Teck is currently crunching figures to determine whether there’s an economic justification for rolling out ShovelSense to the rest of the shovels at Highland Valley. “In the course of March, we’ve diverted over 170 truckloads to the mill that were otherwise destined for the waste piles and each one of those trucks has around 240 tonnes of ore on it.” If the economic justification is there, ShovelSense could be rolled out to three additional shovels at Highland Valley this year. It could also be used at the company’s other sites. “We do have a number of people that interact on a regular basis to discuss both this technology and other ore-sorting based technologies. We are investigating its use at our Red Dog operation in Alaska, as well as some of our South American operations.” Heads-Up Display Teck is developing another technology for shovels, this time with its steelmaking coal operations in mind. Its heads-up display technology is aimed at displaying and integrating operational data that can currently be overwhelming for shovel operators, said Mohammad Babaei, digital mining innovation lead with Teck. “We have been bringing all these technologies into the cab of our equipment, including our shovels – we have payloads systems, tracking and fleet management systems, tooth detection system, fragmentation – you name it,” Babaei said. “For one single person as an operator to be able to grasp all those systems with different features and different interfaces is difficult.” The technology is similar to the heads-up display in some high-end cars – but goes further. “You have a lot of sensors on the machines that collect 3 to 5 gigabytes of data per machine every day, and from different systems. Bringing that into one location and presenting it in a way that operators can react to it and it can improve their performance – that’s the critical part.” Babaei says the project’s aim is to increase the efficiency of the shovels, as shovel and truck costs represent a sizeable porCONTINUED ON PAGE 38

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2018-04-19 1:32 PM

PROFILE

tion of Teck’s steelmaking coal mining costs. In addition, it will help modernize the shovel operator role with technology that’s commonly associated with gaming – something that will help attract a younger workforce. “This technology is going to transform the job at the same time as improving efficiency and productivity of the whole operation,” Babaei says. The company’s digital platform has been critical to the project’s development, as have being able to work with different data types, software development, change management with the operators, and creating a better user experience for them, says Babaei. “The last part is the science behind all the information – all the data I’m converting to information (or digested data),” Babaei adds. “So how we can show the diggability of materials to the operators, or can we show the payload, or damage to the machine, all the information that the operator needs – and that’s considered applied science.” The heads-up display technology is being developed at the Elkview steelmaking coal operation in southeast B.C., with the input of the shovel operators who will be using it. The prototype will be used for the piloting phase this spring, with the first production unit expected before June. Then, the technology may be rolled out for all the shovels at Elkview, and then to other steelmaking coal sites. Babaei says the technology could potentially save $5 million per year at each site where it’s adopted. The idea for the project originated with Teck, but the company is now working with a Port Coquitlam, B.C.-based tech company called Finger Food Technologies, to create a prototype of the technology. Babaei, who completed his PhD in mining engineering with Teck’s support, has already helped the company boost productivity by developing technology for assessing blast quality called 38 | CANADIAN

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A shovel loads a haul truck at Teck’s Highland Valley Copper mine. CREDIT: TECK

a diggability index. “My PhD project has been implemented at three of Teck’s sites and has helped Teck to save millions of dollars in blasting and improving shovel productivity,” Babaei says. Babaei’s research included a deep examination of the performance of the company’s shovels. “We are operationalizing some of the science that I did through my research and some of those are really novel – for example, building a training platform for shovel operators that can help them to find the optimal digging path and to help them fill the truck in optimum time with high efficiency.” Partnerships It may be surprising that Teck is working with smaller vendors on technology such as the heads-up display and ShovelSense. But Lindsay says the company has found such partners effective and easy to work with. “While we do have important, very strong relationships with some of the big names, some of the same names you’ve heard other companies talk about, we find that actually the smaller vendors, small shops, very entrepreneurial with key technology for this challenge or that challenge, seem to be a bit more practical, faster to implement with fewer meetings,” he said. “We’ve also made some seed investments in various things that could amount to step-change kind of gains elsewhere, but I think philosophically, smaller rather than bigger seems to be more effective.” On the other end of the scale, Teck is working with Caterpillar to bring six autonomous haul trucks to its Highland Valley Copper operation by the end of the year. It will be the first use of an autonomous fleet at a deep open-pit mine. Teck pegs the potential savings at $20 million annually at the operation, CMJ and $100 million across the company. www.canadianminingjournal.com

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CSR

LAYING THE FOUNDATION

Graduates of a joint underground mining training initiative by Colombia’s National Training Service and Continental Gold. Of the 53 graduates this year, 19 are women – the first in the country to be certified as underground mining technicians. CREDIT: CONTINENTAL GOLD

Juniors find themselves at the forefront of CSR By Alisha Hiyate

arry Fink, CEO of investment management firm BlackRock, recently made headlines when he said in an annual letter that “society is demanding that companies, both public and private, serve a social purpose.” Since its founding in December 2016, the Development Partner Institute for Mining (DPI) has been advocating a similar idea for the mining sector – that, in order to move their projects forward, mining companies need to work with stakeholders to define a shared purpose. “It’s about that very deep level of understanding – getting beyond the superficial and really seeing each other as humans who have a common interest and finding that common inter-

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est, that shared purpose,” said DPI executive director Wendy Tyrrell at a CSR session at this year’s Prospectors and Developers Association of Canada (PDAC) convention. If this is a tall order for miners that requires a shift in how they do business, it must sound like an insurmountable obstacle for under-resourced juniors. Since juniors are usually the first point of contact with any community, DPI organized a session at PDAC to bring together representatives from junior mining companies, mining impacted communities, governments and NGOs to discuss the role of juniors in this new vision of mining. CONTINUED ON PAGE 40

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CSR

‘Poisoned’ relationships Since major mining companies have outsourced exploration to juniors for at least the past 20 years, they have also left juniors with the critical task of establishing positive relationships with communities, said Gordon Bogden, chairman of Black Loon Metals. “The juniors remain the first movers – they’re the first ones into any new areas,” Bogden said. “So the junior has to be skilled at this initial engagement with communities, engagement with government.” The problem is that they often don’t have these skills, or realize the importance of transparency in building trust from the outset, said Mark Podlasly, a trustee with the Nlaka’pamux Legacy Trust and member of the Nlaka’pamux Nation in B.C. “The junior miners who come in, we’ve had situations at the beginning where they would be quite secretive and competitive (against other juniors), and it poisons the relationship right at the front,” Podlasly said. “You have Indigenous communities not trusting the juniors, concerned that if they sign any agreement it will be used against them in a court of law later.” That type of mistrust can be long-lasting – and can affect the value of a mineral project in the eyes of a major company looking for development prospects. “At another function, (Anglo American CEO) Mark Cutifani made a great comment as a senior operator of mines,” Podlasly continued. “He said that now the juniors are assuming the risks on exploration, they’re developing the projects that then get passed up to the seniors. The seniors are now in a position though that these projects that are poisoned right at the beginning can’t ever happen because of the actions of the juniors on the ground with the Indigenous people,” Podlasly said. “So from self-interest, if you’re a junior you want the value of an Indigenous partner; you want the value of a community that says, ‘this is something that we value,’ because you’ll get renumeration for that later as this thing moves up the chain.” Practical advice For juniors working in Canada, what’s most important is respect for the Indigenous communities they will have to work with. “If there’s one piece of advice I can give a junior coming into a territory, it’s don’t be a d—k,” said Podlasly, prompting laughter in the audience. “That’s what happens - people come in and they think, ‘Oh, you are uneducated, you’re backwater – we are 40 | CANADIAN

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From self interest, if you’re a junior, you want the value of an Indigenous partner; you want the value of a community that says, ‘this is something we value,’ because you’ll get renumeration for that as this thing moves up the chain. from the big city, we have the ability to do all these great things.’ We don’t care. Because we can get the skill sets we need that you have, we can find the same technology.” Juniors need to build positive relationships from the start to avoid mistrust. Especially since Indigenous communities don’t have the time constraints that exploration companies do. “We’ve been here thousands of years. We can outlast your credit. You’ll be gone and somebody else will be there five years later.” While there are a lot of examples of what not to do for juniors setting out to establish positive relationships with local stakeholders, there are also some that show the possibilities of what can be done. Alexandra Guaqueta shared her insights as international standards manager with Continental Gold, a junior that is building the first modern gold mine in Colombia. “A strong sustainability performance has been at the core of our so-far success story for different reasons. Conviction, survival, need to seek financing and the desire to be in the game for the long haul in Colombia and Latin America,” Guaqueta said. As a result of its focus on sustainability and listening to its stakeholders, Continental chose not to close down a small-scale mine that was operating on its property because of its role in the community as a provider of 100 jobs. The company faced a much bigger CSR challenge after it started making mineral discoveries, prompting an inflow of www.canadianminingjournal.com

2018-04-19 3:20 PM

A panel organized by the Development Partner Institute at PDAC, including Alexandra Guaqueta, Carolyn Burns, Mark Podlasly, David de Launay and Harry Kim. CREDIT: DEVELOPMENT PARTNER INSTITUTE

8,000 informal miners to the area, many of whom were connected with criminal organizations. Continental worked with the community and law enforcement to take part in a co-ordinated response. “We understood that we had to move quickly and that we had to have a multi-tiered strategy if we wanted the business to go forward. So we approached the national government, regional government, local government, and we were part of this multi-tiered strategy – on one hand law enforcement and security, but on the other hand also development,” Guaqueta explained. For their part, the government led with a zero violence police and military intervention to return illegal miners who had travelled to the area back to their points of origin. The company followed with a strategy to provide alternative livelihoods to the local community – who had economically benefitted from the illegal mining boom, despite the security issues it had caused. “Moving ahead quickly with alternative livelihood programs was key to demonstrate to communities that legal mining was going to be better for their development and progress going forward,” Guaqueta said.

Don’t go it alone The Continental Gold example is instructive in that the company reached out to local, regional and national authorities and built a network that shared common goals and purposes. It’s actually a good idea for juniors to seek out the NGOs that work in the local area of exploration, as well as the wider region, said Carolyn Burns, executive director of the Devonshire Initiative, an organization that aims to bring together mining companies and NGOs on common objectives around development. “Their perspective can help you understand the local context,” said Burns. While the two groups might not always agree on everything, they do have some common objectives that they can work on together. “NGOs can be really good development partners,” said Burns, adding that it is possible to work with even NGOs who are outwardly anti-mining. “Some NGOs might be anti-mining or less supportive of the mining industry and others will be open to the industry. And that is because of both perceived and actual historical impacts of mining and it’s important to remember that context,” Burns said. “Just because an NGO or civil society group presents itself as anti-mining, doesn’t necessarily mean that they can’t be a partner or that you can’t find a way to form a good relationship with them.” Informal collaboration between the sectors often starts by building individual relationships, she explained. “When you get to know the person on the other side – if it’s a tenser relationship – then it really goes a long way to breaking down a lot of your preconceptions or allowing you to talk and communicate in a way that’s more effective.” Lastly, for juniors who have early stage exploration programs and are not sure exactly where they will be exploring next, partnering with an NGO can help establish a regional presence as well as continuity and sustainability in their social investment CONTINUED ON PAGE 42 programs.

BUILDING

MINES OF

THE FUTURE WHAT WE DO • Shaft Sinking • Raise Boring and Raise Excavating • Mine Construction and Infrastructure • Mine Development and Rehabilitation • Mining Engineering Services and Design • Contract Mining

www.dmcmining.com

WORKPLACE SAFETY NORTH’S

PRESIDENT’S AWARD RECIPIENT

Photo courtesy of BHP incorporating Rio Tinto’s “Mine of the Future” ™ technology

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CANADIAN MINING JOURNAL |

2018-04-19 1:33 PM

CSR costs What are the best ways for resource constrained juniors to deliver CSR programs and stay focused on sustainability? Harry Kim, managing director for Hatch’s global environment services group, says it’s something that needs to be incorporated from the early stages of a project. “With respect to where CSR/sustainability sits in the project life cycle, Hatch’s perspective on projects is to look at it holistically and that includes the early stage engagement process through to prefeasibility and feasibility, right to closure – so a cradle to grave perception around projects and engaging with clients and communities to advance projects in a socially responsible manner,” Kim said. 42 | CANADIAN

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Kim says it’s a misperception that doing so is too expensive for juniors. “One thing I hear all the time from juniors is: “CSR/sustainability – I can’t afford it. There’s no room in the budget, capital is tough enough to get to advance our projects.’ I’m here to challenge that. Transparency, disclosure and inclusion are not big ticket items. We can incorporate that into your projects, the early stages including around Indigenous engagement, and actually add value to your projects in terms of the investment grade to the senior miners.” Communication is key to understand communities’ priorities and to set realistic expectations. Continental’s Guaqueta said that CSR takes time, but is not www.canadianminingjournal.com

2018-04-19 1:33 PM

Continental Gold’s Buriticá project, in northwest Colombia. The project, which hosts reserves of 3.7 million oz. gold, is expected to begin production in early 2020. CREDIT: CONTINENTAL GOLD

“For us, the way in which we do things – not just how much we do – and that focus on institutional and local capacity strengthening along the way has been key in building that common purpose.”

as costly as companies may think. “Our story has been possible because there’s been a shared vision and purpose among various actors – local communities, local authorities, regional and national authorities, the market, our investors – and a key to this is investing time in relationships,” she explained. “It’s not only about putting money for small infrastructure projects or that part of the more tangible, short term economic benefit – it’s just the time.” Guaqueta added that as Continental has advanced its business and kept an eye on the company’s short term needs, it has also paid attention to the long-term goal of helping to strengthen the capacity of the local community, as well as local authorities, to navigate economic, social and security challenges. MAY 2018

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Indigenous communities David de Launay, deputy minister of northern development and mines in Ontario, noted that one of the most important jobs of governments is to provide some certainty over land tenure to encourage mineral exploration and development. But Indigenous groups are challenging historical land tenure systems. “In colonial structures, it was governments that came in, took over the land, through treaties or just took it over, and through its own legal system we’ve created Crown land. We’re seeing more and more (examples) – and the Aboriginal title example in Canada is a very good one – where Indigenous groups are challenging that. They’re challenging that colonial history, challenging that whole history of land tenure,” de Launay said. “Government has a huge role then to work with local communities and to work with companies to develop this new approach that ensures that there’s more of a level playing field and that Indigenous communities and communities in general will benefit in a development model of mining and not just in an exploitation model of mining,” he added. The United Nations Declaration on the Rights of Indigenous People (UNDRIP), which contains the principle of free, prior and informed consent, is something else that’s changing the environment for Indigenous rights around the world, said Podlasly. “It’s coming into effect in Canada federally very soon. It’s already in effect in a lot of places around the world,” he noted. “What does that mean to you as a junior? It means that you are going to have to up your game in terms of understanding the Indigenous community but also to understand what levers are available to you in development.” Indigenous Peoples around the world are already very well versed on UNDRIP and their rights under it, Podlasly said. That said, while the relationship between mining sector and Indigenous Peoples is changing, that doesn’t mean that mining projects can’t move forward. “Aboriginal people around the world are starting to see the possibilities of development if it’s done in a respectful manner and in a way that is beneficial to the community,” Podlasly said. “And that means equal partnerships, transparency. It means having a longer-term relationship with a mining company that will allow the community to meet its goals – environmental, social, economic – and that means moving towards new relationships that haven’t happened before.” CMJ CANADIAN MINING JOURNAL |

2018-04-19 1:33 PM

FINANCIAL MODELLING

Using Monte Carlo simulation for financial forecasting

Photo: NicoElNino, iStock.com

By Chris Olmstead and Krzysztof Wolyniec

etals are some of the most widely used and mature commodities in the world. Despite their ubiquitous nature and sophisticated engineering methods, the financial modelling tools used by most miners remain simplistic. Deregulation of energy markets in the latter part of the 20th century brought with it a wave of new and innovative products designed to both better understand and increase the value of

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energy assets. Some of these techniques have been adopted by other industries, but less so by metals and mining companies. This appears to be partly because of the complexities of simultaneously modelling multiple revenue and cost items. One way to perform this type of analysis is by using Monte Carlo analysis, which can be used to solve problems when multiple variables may make calculating an answer difficult or impossible, www.canadianminingjournal.com

2018-04-19 1:35 PM

Discussing new concepts and ideas is a worthwhile exercise, but without real answers to real problems, concepts and ideas tend to remain just interesting topics of conversation.

cle will describe one way to set up a Monte Carlo analysis to be used by a mining company to answer two seemingly simple questions. Before describing the proposed solution, we will discuss some of the challenges of selecting model inputs, and take the reader through two examples which demonstrate the importance of correlation and volatility on mining companies. (In the online version of this story, we will provide instructions on how to set up a Monte Carlo simulation tool capable of answering the questions posed in the in the Case Study example.)

Case Study

and when the answer can be expressed in terms of probability of occurrence. While there is dedicated software available to perform this type of analysis, it has not been widely adopted, and is not necessary. Discussing new concepts and ideas is a worthwhile exercise, but without real answers to real problems, concepts and ideas tend to remain just interesting topics of conversation. This artiMAY 2018

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Hypothetical Mining Company (HMC) has monthly production of 176,000 oz. of silver, 2,300 oz. of gold, 1,000 MT of zinc, and 150 MT of copper, and consumes 7,000 bbl of diesel per month (that works out to 1 bbl per oz. of gold equivalent production). HMC has monthly revenue of US$10.3 million based on current market prices of US$16.30 per oz. silver, US$1,300 per oz. gold, US$3,475 per tonne zinc, and US$6,900 per tonne copper. At US$80/bbl diesel, HMC has a monthly diesel expense of US$560,000. Like a lot of mines, HMC has operated sporadically over the years, coming into production when prices were high and going on care-and-maintenance when prices were low. When operating, the mine has a stable production profile and, aside from diesel expense which varies monthly, the mine’s other costs are stable at US$9 million per month. After speaking to the mine manager, the CFO has asked, “We need to make some equipment investment decisions. What’s the chance the mine will be unprofitable one year from now?” Upon returning from a meeting with the head of investor relations, the CFO asks, “We have been telling investors we are a silver company. I am concerned the run-up in zinc prices is making us look like a zinc company. How certain can we be silver is going to contribute more than 25% of our monthly revenue in two years?” These questions are much more complex than they may sound. There is no formula we can just plug numbers in and get answers out. One way to answer these questions is by using Monte Carlo analysis. It’s worth taking a moment to consider what the answers might look like. This is a step that should probably be done more often. Conceptualizing the answer is important when CONTINUED ON PAGE 46

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FINANCIAL MODELLING building spreadsheets and other tools which can get overly complex. Questions that start with, “What’s the chance…” and “How certain can we be…” can be answered with distributions of possible outcomes. Both questions have an element of time to them and the solution needs to simultaneously display probability distributions at different time horizons. The answer to the first question is: There is a 35% chance the mine will be unprofitable in 12 months (based on our model inputs). The chart below (Fig. 1) is based on the results of Monte Carlo analysis. Read the chart as saying that with n probability the margin will be below the line corresponding to the month you are looking at. There is a 35% chance the margin will be below zero in 12 months, a 95% chance the margin will be less than $3.3 million, and a 5% chance the mine will lose $1.8 million. Margin Probability Lines $6

$5 $4 $ Millions

$3 $2 $1 $0 -$1 -$2 FIGURE 1

-$3

0.95

0.85

0.75

0.65

0.55 0.45 Probability

0.35

0.25

0.15

0.05

The answer to the second question is: There is approximately

a 28% chance silver will be contributing less than 25% of the total monthly revenue in two years. The chart below (Fig. 2) is another example of an output from Monte Carlo analysis. The x-axis is the number of simulations run. You can see that after only a thousand simulations the “answer” is still quite volatile, but as more data points are added the line becomes more stable at the estimated Cumulative Average of Simulated Results 0.60 0.50 0.40 0.30 0.20

FIGURE 2

0.10 -

301 601 901 1201 1501 1801 2101 2401 2701 3001 3301 3601 3901 # of Data Points

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Many companies rely on analyst forecasts, or the views of senior management for price forecasts. This approach has some flaws: analyst forecasts tend to change in response to what’s already happened in the markets; forecasts rarely offer a margin of error; and there’s a tendency to assign more credibility to bullish forecasts and discount the advice of bearish forecasts.

value. (This chart is included as an example for this problem. the number of runs (data points) should be explicitly evaluated prior to analysis. Some questions may require only a few hundred runs while other questions may require many many more than even the 4,000 we use here.) Importance of Model Inputs It’s important to understand the quality of output depends very strongly on the quality of inputs. If we want to project future revenues, our production forecast and projections of prices, volatilities and correlations are required and must be of high quality. Many companies rely on analyst forecasts, or the views of senior management for price forecasts. This approach has some flaws: analyst forecasts tend to change in response to what’s already happened in the markets; forecasts rarely offer a margin of error; and there’s a tendency to assign more credibility to bullish forecasts and discount the advice of bearish forecasts. Explaining prices which differ significantly from observable market forward prices may pose other challenges. One possible solution is to use market based forward/futures prices, although one needs to be aware that forward prices do not always reflect the most likely spot prices in the future, and that factors such as liquidity can influence their usefulness. Similar challenges exist in projections of volatilities. In the examples above, we relied on at-the money implied volatilities as inputs. It needs to be understood that these are only useful approximations that might be misleading at times. Finally, the biggest challenge in building reliable projections of future revenues is finding proper input correlations; this topic is quite complex. The simplest approximation would involve estimating either return correlations on historical forward prices, or correlation on historical spot prices. To achieve decent quality, the estimation would require significant analysis. For our purposes, just as we used observable prices and volatilities from the financial markets, we have used a recent 60-month correlation of monthly average prices as the correlation inputs to answer the two questions. We need to underscore that this general prescription is just www.canadianminingjournal.com

2018-04-19 1:35 PM

a starting point and projecting production volumes, prices, and especially volatilities and correlations, requires careful consideration. The impacts of correlation and volatilities on mining companies Most mining companies produce more than one metal which contributes to revenues, and most also have some variable costs such as energy and foreign exchange. The interaction between variable revenue and cost items can impact financial results. Understanding the potential financial impacts of these interactions is important. To put in perspective the importance of correlation on mining, let’s consider just the interaction of gold and diesel prices since 2000. Historical Gold (US$ per oz.) / Diesel (US$ per bbl) Ratio 25%

Now, let’s look at the impact an increase in diesel price as a percentage of the price of gold has on the margin of a producer with an AISC ex-oil of US$1,020/oz. If we think about diesel being US$80/bbl and gold being $1,300/oz, it might be easy to convince ourselves that US$80 is small, and the variability of that US$80 is even smaller, so it’s not worth worrying about. This is clearly not the case when considering the potential impact on margins, and you can see that in the Fig. 4. For the gold producer with an AISC ex-Oil of US$1,020 per oz., the impact of the interaction of oil and gold prices has the potential to wipe out margin. However, if the AISC-ex Oil was US$800 per oz. the impact of diesel prices in absolute terms would be the same, but the reduction in margins in percentage terms would be less, and arguably not worth worrying about. Fig. 5 is a chart of the percentage change in margin as a function of changes in diesel prices relative to gold prices for a producer with an AISC of US$800 per oz. and one with an AISC ex-Oil of US$1,020 per oz.

20%

Margin Impact of Change in Deisel Price as % of Au Price 15%

Diesel Price as a % of Gold 0%

% Change in Margin

10%

Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 18

-10%

10%

12%

14%

16%

18%

20%

-10% -20% -30% -40% -50%

Margin Impact on High-cost Producer Margin Impact on Low-cost Producer

-60%

A representative gold producer uses 1 bbl of diesel for every ounce of gold produced and has an average AISC of US$1,100 per oz. Today gold is selling for US$1,300 per oz. and diesel can be purchased for US$80/bbl (so AISC ex-Oil is US$1,100 US$80 = US$1,020 per oz.) and current margin is US$200 per oz. Diesel costs 6.2% of the price of gold (US$80 per bbl / US$1,300 per oz.). In percentage terms, since 2000, the price of diesel has been as much as 21% of the price of gold, and as little as 3% of the price of gold. Fig. 3 is a chart of diesel prices expressed as a % of the price of gold since 2000.

-70%

FIGURE 5

FIGURE 3

Experience shows us high-cost miners run their businesses very similarly to low-cost miners despite the fact that decreasing margin increases sensitivity to correlation and volatility. Remember, margins can decrease because of a reduction in selling prices, but increased costs such as labour contracts and royalty agreements can decrease margin and result in increased sensitivity to correlation and volatility. These effects should be carefully considered during the evaluation process. Factors CONTINUED ON PAGE 48

Margin for a producer with AISC ex-Oil of US$1,020/oz. And consuming 1 bbl diesel per oz. produced Diesel at 3% of Gold

8% of Gold

FIGURE 4

AISC ex-Oil Oil Expense Margin

AISC ex-Oil

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AISC ex-Oil Oil Expense Margin

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n Oil Expense n Margin

16% of Gold

The interaction between variable revenue and cost items can impact financial results. Understanding the potential financial impacts of these interactions is important. CANADIAN MINING JOURNAL |

2018-04-19 1:35 PM

FINANCIAL MODELLING such as correlation and volatility are more important to high-cost mines than low-cost mines. Let’s look at an example using HMC (Hypothetical Mining Company) with monthly production of 176,000 oz. of silver, 2,300 oz of gold, 1,000 MT of zinc, and 150 MT of copper. Currently, HMC has revenue of $10.3 million per month split 30% each from silver, gold and zinc and 10% copper. If we assume the production profile has been constant and look at just the impact of prices on revenues for the past 10 years, we see the mine has had monthly revenues of as little as US$5.05 million (October 2008) and as much as US$15.7 million (April 2011). In that same time, silver contributed from 25% to 54% of revenue, gold 16% to 36%, zinc 15% to 48% and copper 7% to 15%. Sometimes HMC has been a silver company, sometimes a gold company, and sometimes a zinc company. One thing has been constant, correlation (or lack of correlation) and volatility of prices has been as important to HMC’s story as it has been to the company’s financial health and forecast. The two examples above highlight important challenges for mining companies. In the first example, the variability of oil

Revenue by Metal Cu Revenue Au Revenue

$16

Zn Revenue Ag Revenue

$14 $12 $ Millions

$10 $8 $6 $4

FIGURE 6

$2 $0 Dec-07

Dec-09

Dec-11

% Revenue by Metal 60%

Dec-13

Dec-15

Dec-17

% Rev Ag

% Rev Au

% Rev Zn

% Rev Cu

40% 30% 20%

FIGURE 7

10%

48 | CANADIAN

with respect to gold prices had the potential to wipe out margins, and this will show up in AISC. In the second example, the mine’s monthly revenue has been in a range of US$5 to US$15 million and the dominant source of revenue has shifted and forced the company to “pick and choose” which one is the primary metal and which are accounted for as byproducts. Perhaps even more important are the challenges these interactions create when compiling financial forecasts. Conclusion Price interactions such as the ones described above are complex, but well suited for Monte Carlo analysis. Model inputs require careful consideration beyond what we have discussed. Remember, what matters today may not matter tomorrow and what doesn’t matter today may be important tomorrow. A lack of understanding of correlation and volatility, along with outdated financial modelling techniques, has the potential to erode investor confidence in management’s descriptions of the past and predictions for the future. For a detailed demonstration on how to build a Monte Carlo simulation in Excel, see the online article at www.canadian miningjournal.com. The article takes readers step-by-step through the set-up of a spreadsheet for modelling up to five random correlated variables and provides a viable framework for the answering the questions posed in the Case Study. CMJ CHRIS OLMSTEAD has 10 years of experience in investment banking and has also worked for Sempra Energy Trading, Alcoa, AK Steel, and UPS in a variety of structuring, risk management and procurement roles spanning metals and energy. Chris has a B.S. from Georgia Institute of Technology, an MBA from Ohio State University and is currently pursuing a Masters in Mining Engineering through South Dakota School of Mines and Technology.

50%

0% Dec-07

Remember, what matters today may not matter tomorrow and what doesn’t matter today may be important tomorrow. A lack of understanding of correlation and volatility, along with outdated financial modelling techniques, has the potential to erode investor confidence in management’s descriptions of the past and predictions for the future.

Dec-09

Dec-11

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Dec-13

Dec-15

Dec-17

KRZYSZTOF WOLYNIEC is managing partner of Millwright Capital, a quantitative commodity fund. Previously, he was managing director of Commodity Quantitative Strategies at Sempra Energy Trading and Royal Bank of Scotland. He started his career at Mirant Corp., where he served as director of research. He has published widely on quantitative techniques in commodities and he is coauthor of “Energy and Power Risk Management” published by Wiley.

www.canadianminingjournal.com

2018-04-19 1:35 PM

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2018-04-19 1:17 PM

Mine & Mill

SIX Safety Systems 51 on how miners can manage fatigue-related risks.

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Newtrax technology 55 enhances safety at Éléonore.

Photos: Talaj, kyoshino, herreid – iStock.com

SAFETY

www.canadianminingjournal.com

2018-04-19 1:36 PM

MINE & MILL SAFETY

By Mike Harnett

Imagine this…

ne of your top haul operators, John, is rubbing his eyes, yawning and moving slowly. You know that John still has 4 more hours on shift. You ask him how he is and he responds, “I’m fine, just a little tired”. What do you do? Do you get him a cup of coffee? Do you make him take a break? Or, do you tell John to “just be safe out there”? What actual written procedures do you have in place? I’ve posed this question to senior managers, supervisors, and safety personnel hundreds of times, and more often than not, I’m met with stony silence. You may think, well, it depends on his job. A valid point, but only if you’ve assessed the job to determine how fatigue can impair work performance. Fatigue is not simply being tired. It is not about being lazy, and it is certainly not about just keeping your eyes open. At some point, we have to start looking at the flaws in the system, and not just the flaws in behaviour. Safety professionals recognize that the most important question in their arsenal is to simply ask, “why”? Why are they tired? Didn’t get enough sleep? Why? Put in overtime? Why? Because the crew was shorthanded? Why? You get my point.

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Being

awake is not enough

SIX Safety Systems outlines how mining companies can manage fatigue-related risks.

CONTINUED ON PAGE 52

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MINE & MILL SAFETY Workplace fatigue factors The science is clear. Workplaces need to understand their role in the promotion and mitigation of fatigue. While there will always be personal reasons as to why an individual may be struggling to stay awake, there are three primary fatigue influences that organizations have some control over. Wakefulness Simply put, the longer it’s been since your last sleep period, the more sleep pressure builds due to the accumulation of adenosine in the brain, a depressant. After being awake for 14 hours, sleepiness starts to set in. At 17 hours, you are the equivalent of .05 blood alcohol impairment (BAC). At 18 hours, you will be struggling to stay awake. At 20 hours, you are equivalent to .08 BAC, and your cognitive abilities drop by up to 40%. What level of risk is tolerable for your organization? How does your schedule stand up?

Task demands The more demanding our work tasks, the more fatigue accumulates. From a cognitive perspective, it has been demonstrated that mental tasks longer than 30 minutes deteriorate if tasks are monotonous or tedious. This means sustained vigilance tasks such as operating machinery or more commonly, the commute home after work, is when we are often in jeopardy for something to go wrong. Fatigue impairs our ability to perform. How do these impairments affect the safety of your mining operations? • Loss of situational awareness • More time on task • Under-estimation of risk and more of a “it’s good enough” attitude • Flawed logic • Hindered visual perceptions • Slowed information processing • Reduced reaction time 52 | CANADIAN

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Fatigue incident trajectory The mining sector has been a world leader in the utilization of fatigue detection and monitoring technology, and in many cases, with much success at identifying fatigue before it hits a critical point. But such technology is not a solution in and of itself. In essence, technology does not ask why fatigue is occurring in the first place. Fortunately, a lot of smart people have been asking why, and it has led to an understanding of how a fatigue related incident develops. Fatigue-Related Incident Trajectory

5 4 3

Risk

Circadian rhythms Every body function and organ has its own body clock based on the 24-hour rotation of the planet. These clocks tell us when to be awake, when to sleep, when certain hormones should be released, when our body can best digest food, etc. The maestro controlling everything is our “master clock” in the brain. It’s controlled by the amount of light entering our eyes, even when they are shut. This master clock is what all the other clocks try to synchronize with. Based on our circadian rhythms, humans are a day-oriented (diurnal) species. This means we will always perform better and be more alert and safe when working during daylight hours and get our best sleep during dark night time hours. We are at our worst between midnight and 6 a.m. when we are programmed for sleep. There is also a dip in our rhythms in the early afternoon (the siesta period), which can also affect alertness and performance.

2 Sleep Obtained

Fatiguerelated Behaviors

Fatiguerelated Errors

Fatigue-related Incidents

Sleep Opportunity

Time

www.canadianminingjournal.com

2018-04-19 1:36 PM

How many of your supervisors have been trained in how to identify an at-risk worker?

Photos: ArtMarie – iStock.com

How do you want them to react?

Level 1 Assessment – Sleep opportunity It doesn’t matter what John does if the schedule he works does not allow him enough time for recuperative sleep in addition to his commuting and meal times. Science has recognized that all adults require between somewhere between 7 and 9 hours of sleep to physically and mentally recuperate every 24 hours. What can you do? • Review work hours including extra-work, on-call, and overtime assignments; • Perform a workload analysis; and • Review commuting and travel management factors. Score Plot Summary

Details Name Work schedule

Many industries and regulators have viewed fatigue as a linear function based on a result of total hours of work/rest within a schedule and ignoring how complex it really is. One of the tools SIX Safety uses is FAID biomathematical modelling software to evaluate work schedules for fatigue related risk. Initially developed specifically for the mining sector, it allows us to evaluate the start and end of work assignments, duration of work and breaks, previous work history, and of course, circadian factors. While it can be used to declare whether a schedule complies or not with prescriptive hours or recommended standards, a better approach is to use it to identify at what point in the schedule risks for errors or incidents climb to intolerable levels. Then, we can work with the company to determine the best ways to mitigate that risk within the schedule. Level 2 Assessment – Sleep obtained The next step in the incident trajectory is to evaluate whether or not the employees are capable of getting the sleep they require. This can be achieved in a variety of ways. • Worker survey • Physiological monitoring (actigraphy) • Sleep disorder screening • Evaluation of task lighting Light exposure needs to be optimized to both increase alertness while not eliminating the production of melatonin, out body’s natural sleep hormone which helps fall asleep and stay asleep. There are a variety of lighting strategies that exist.

Score Plot Results Compliance % Peak Score

AA 1

KSS 67.7% 7.6

FAID 82.5% 102

FAID Score Sleep Day Sleep Night

120

Fatigue Tolerance Level 100

FAID Score

80 60 40 20 0 9Oct17

11Oct17

13Oct17

15Oct17

17Oct17

19Oct17

21Oct17

Level 3 Assessment – Fatigue related behaviours Remember tired John? How many of your supervisors have been trained in how to identify an at-risk worker? How do you want them to react? Consider the following. • Training workers in sleep hygiene and shift work lifestyles; • Training Supervisors in identifying and intervening with fatigue; • Onsite rest/recovery options; and • Detection/monitoring technologies. CONTINUED ON PAGE 54

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CANADIAN MINING JOURNAL |

2018-04-19 1:36 PM

MINE & MILL SAFETY

14 hours 12 hours

18 hours

One of the tools SIX Safety uses is FAID biomathematical modelling software to evaluate work schedules for fatigue related risk.

Here at SIX Safety Systems, we utilize our LUCI Eye Gaze technology designed to provide feedback first to the worker if they cross a threshold so they can take action. If their risk level continues to increase, then notice is given to a supervisor or dispatcher so they may intervene. The aggregate data can then provide guidance to ensure informed decision-making. Level 4 Assessment – Fatigue related errors If you have weaknesses in the first three levels, errors will result. Now what? It’s time to evaluate what procedures you have in place both when an error occurs, and before it occurs. • Completion of cognitive analysis of work tasks; • Review of shift handover protocols and communication structures; and • Implementation of an error analysis system that includes fatigue. Level 5 Assessment – Fatigue related incidents Not all incidents are the result of fatigue, but it could be a con-

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SIX Safety Systems’ LUCI Eye Gaze technology can help detect fatigue. CREDIT: SIX SAFETY SYSTEMS

tributing factor. Now is the time to redesign your investigation protocols by incorporating: • Fatigue Investigation Checklists (post incident); and • Performance Impairment Checklists. In the end, it’s about understanding where your fatiguerelated risks are, and not relying on workers to simply show up with their eyes open. Being awake is not enough! CMJ MIKE HARNETT is the vice-president of human factors for SIX Safety Systems, a consulting firm that specializes in fatigue management solutions. He can be reached at mharnett@ sixsafetysystems.com.

www.canadianminingjournal.com

2018-04-19 1:36 PM

SAFETY

Innovating for safety at

Éléonore

Underground at Goldcorp’s Éléonore gold mine in Quebec. CREDIT: GOLDCORP

Goldcorp turns to Newtrax to tackle visibility underground

n the spring of 2017, Goldcorp’s Éléonore mine was recognized for its outstanding safety record in the 2016 calendar year with the John T. Ryan National Safety Trophy for Metal Mines. The award recognizes the mine’s achievement of 2,592,938 hours worked with a

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reportable injury rate of 0.15 – the best rate of any metal mine in Canada that year. The operation also earned regional mining safety awards in 2015 and 2014. The awards were sponsored by MSA Canada, a global leader in the development, manufacture and supply of safety

products, and the John T. Ryan National Safety Trophy Committee. Despite the high accomplishment, management of the Éléonore mine set out to do even better in 2017 in regards to safety. In fact, the safety benchmarks CONTINUED ON PAGE 56

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SAFETY

An illustration of how Newtrax Technologies’ personal safety devices work in an underground mining scenario. CREDIT: NEWTRAX TECHNOLOGIES

established by the operations leadership were seen as aggressive and hard to achieve. How do you take one of the safest mines in the world and make it even safer? With the assistance of Éléonore’s technical service manager, Gertjan Bekkers, Goldcorp looked to Newtrax Proximity Detection Solutions for their underground workforce and mobile fleet. “Because Éléonore was so set up for innovation, particularly because of the connectivity in the underground, there were a lot more opportunities to implement technology,” Bekkers says. “We wanted proximity detection because we know that the interaction between the large equipment underground and the 56 | CANADIAN

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We wanted proximity detection because we know that the interaction between the large equipment underground and the humans is a significant risk factor for these operations. – GERTJAN BEKKERS, TECHNICAL SERVICE MANAGER AT ÉLÉONORE.

humans is a significant risk factor for these operations.” A major safety issue in underground

mining is the threat of vehicular accidents – with other vehicles and with pedestrian miners. In recent years, it’s been reported that a large proportion of mining accidents are caused by a lack of visibility. Newtrax Proximity Detection solutions utilize sub-GHz RF technology to create a peer-to-peer network of vehicles and miners. Not only does it give out proximity warnings, the system can also be used to alert scoop operators that a truck is on its way even before it appears in its line of sight, enabling operators to prepare for the truck and improve mine production. Through a thorough product search with a number of vendors, Goldcorp and the leadership of the Éléonore mine www.canadianminingjournal.com

2018-04-19 1:37 PM

Newtrax Technologies’ personal safety device. CREDIT: NEWTRAX TECHNOLOGIES

Proximity detection technology warns vehicle operators when pedestrians are nearby. CREDIT: NEWTRAX TECHNOLOGIES

The project consisted of a mine-wide implementation of 660 new fully integrated Newtrax-enabled personal safety devices to be worn by the mine’s workers, which can reach up to 150 people underground at any given time.

decided to partner with Newtrax Technologies for this project. The project consisted of a mine-wide implementation of 660 new fully integrated Newtrax-enabled personal safety devices to be worn by the mine’s workers, which can reach up to 150 people underground at any given time. The Newtrax-enabled personal safety devices are equipped with state-of-theart technology that enables: • Location monitoring; • Nuisance filtering; • “Man-Down” alerts, which are sent to the surface if the worker is inert for more than 60 seconds; and • Emergency evacuation notification. In addition, proximity detection technology was also installed into the mine’s mobile equipment. With both systems installed, operators of large equipment are constantly notified when people and smaller equipment are in their proximity. The Éléonore safety system works directly between the workers’ cap lamps and the equipment that is set up with the proximity detection system. The system works independently from the underground communication network, assurMAY 2018

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ing its functionality in all areas of the mine. Goldcorp workers in the mine can be comfortable knowing that no matter where they are in the mine, there will be connectivity between them, their cap lamp and any machine in the surrounding area. In 2017, Éléonore improved its safety performance and in doing so, raised the standard once again. Bekkers admits that a wide range of efforts went into achieving those numbers and establishing a strong safety culture amongst the workforce, but the Newtrax proximity detection system certainly played a part. Continuing the innovation journey The Newtrax Proximity Detection System implemented at Éléonore mine is only one example of Goldcorp’s innovation strategy that is disrupting all areas of its business. Now their mines are built on digital platforms supported by fiber optic backbones and Wi-Fi. They have large volumes of data flowing in, and getting that data digitized and working for them is a big effort but significantly improves health and safety performance and can increase productivity.

When discussing innovation in the industry, Bekkers says “I think the industry is open to innovation. The industry wants it. It’s largely spurred by the fact that the world around us is changing and the world underground is not changing half as fast.” CMJ For more information, go to www.newtrax.com.

Level Sensors with Super Powers 3D Level Scanner Volume accuracy with 3D visualization

New software to detect Center of Gravity to prevent silo collapse and measure covered storage bunkers by section

www.binmaster.com 800-278-4241

Your Sensor Superhero

CANADIAN MINING JOURNAL |

2018-04-19 1:37 PM

NEW PRODUCT SHOWCASE

Wi-Fi Transponder

Hydraulic Breaker

The latest addition to Becker Varis’ smartcom Wi-Fi product line is the WT-300 WiFi transponder. It is an RFID transponder designed to work outdoor or indoor and can be configured to connect to a local wireless network and Becker MineView server. The device scans the local area for Wi-Fi access points and connects to the strongest signal. It then relays its connection information and status (battery charge and temperature readings, alarms for low battery, and high or low temperatures, and free-fall, inactivity and panic alarms) to a server on the connected network. Panic signals can be received by the tag from the server, as well as sent out to the server in emergency situations.

Epiroc, part of the Atlas Copco Group, introduces another first in hydraulic breaker technology. Many of the company’s heavy hydraulic breaker attachments now feature the patented Intelligent Protection System (IPS). Seamlessly combining Epiroc’s AutoControl and StartSelect functions, the fully automated system provides simpler, more efficient, and more economical breaker operation.

The WT-300 integrates a microcontroller, Wi-Fi module, RF transceiver with power amplifier, buzzer, vibration motor and wireless charging for the mounted battery, to make a fully self-contained 802.11b/g/n Wi-Fi solution for a variety of applications.

AutoControl and StartSelect have been popular features on Epiroc hydraulic breakers for years. AutoControl optimizes breaker performance by automatically adjusting the piston stroke length. The StartSelect system offers manual switching between two modes. AutoStart mode enables easy positioning at the beginning of the breaking cycle, while in AutoStop mode, the breaker stops automatically to avoid blank firing at the end of the breaking cycle. Epiroc has taken these features to a higher level by combining them in the IPS.

www.varismine.com

www.epiroc.com

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www.canadianminingjournal.com

2018-04-19 1:38 PM

Motor Grader

Articulated Trucks Three new 2018 Cat articulated trucks â&#x20AC;&#x201C; 730, 730 EJ (Ejector), and 735 â&#x20AC;&#x201C; replace their C Series predecessors and offer new operator stations, transmission-protection features, a new hoistassist system, an advanced traction control system, new stability-assist system, and a fuelsaving ECO operating mode. The 730 and 730 EJ have 28 tonnes payload capacity and the 735 has 32 tonnes. The new 730 and 730 EJ are also enhanced with automatic retarder control and a hill-start feature. The 735 retains these features from the C Series model and further incorporates a new Cat C13 ACERT engine, Cat CX31 transmission and structural and dimensional modifications that reduce empty weight by 22%. These features combine for a fuel efficiency gain of as much as 18% while retaining the productivity of the previous model. The C13 engine used in all the new trucks is available in configurations to meet emissions standards in all regions of the world. www.cat.com/en_US/

Building on the strong heritage of the M Series Motor Graders, the new Cat 24 Motor Grader delivers high performance construction and maintenance of mine roads to improve mining truck efficiency. The 24 Motor 4Grader is equipped with a 7.3-metre (24-ft.) wide moldboard and is application matched for medium to large mines running trucks over 180 tonnes (200 tons) payload. An innovative, modular design means components can be removed and installed quicker and easier, in some cases, up to 70% faster. Standard Cat GRADE with Cross Slope improves operator productivity and haul-road quality, which lowers truck tire wear, decreases rolling resistance and reduces premature tire failure. The grader includes the latest technologies to protect the machine from potential operating or maintenance issues, including engine underspeed/overspeed, transmission slip detect, articulation eStop, implements lockout and fluid monitoring. Prior to starting, the machine performs a diagnostic of the coolant, engine and hydraulic oil levels and gives the Ok-to-start. While operating, the machine automatically monitors and alerts the operator of critically low fluid levels. The Cat 24 is MineStar ready, and comes standard with Cat VIMS and Product Link Elite, which delivers advanced machine operation reporting through VisionLink.

Standardized Carrier Marcotte Mining Machinery Services has introduced its new generation RAM40 carrier. The RAM40 carrier is Marcotteâ&#x20AC;&#x2122;s new standardized carrier that is able to accommodate its entire fleet of vehicles, integrating either low horsepower, high horsepower, Tier 4 or its new Siemens battery drive package. With a focus on operator safety, standardization and ease of maintenance, the RAM40 is designed with better sightlines and increased visibility around the machine, making it safer for the operator and everyone working around the vehicle. In addition, all maintenance activities can be performed from ground level, making it easier and safer for those maintaining the equipment. Having a standard carrier means common parts for better service, support and quicker build-times for new capital orders. RAM stands for Raymond Arthur Marcotte, the founder of Marcotte Mining. www.marcottemining.com

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2018-04-19 1:39 PM

NEW PRODUCT SHOWCASE Personal Safety Device Hexagon has introduced HxGN Mine Personal Alert, an accident-avoidance device worn by field personnel that ensures 360-degree visibility around heavy equipment. It’s integrated with the company’s Collision Avoidance System, (CAS) which is used in more than 25,000 mine vehicles worldwide. It offers an additional layer of safety to operators and pedestrians who deal with the daily dangers of blind spots, noise, heavy traffic and poor visibility. Personal Alert uses Time-of-Flight technology in the Ultra-Wide Band (UWB) range. It protects pedestrians within 50 metres of a vehicle via an ergonomic tag that communicates with strategically mounted proximity anchors integrated with CAS. CAS calculates a vehicle’s position, heading, and path while Personal Alert determines a pedestrian’s distance and position within five centimetres. Based on highly configurable detection and alarm zones, it provides real-time visual alerts or audible alarms to vehicle operators, depending on the risk level. The tags offer pedestrians real-time visual, audible, and vibratory alarms, empowering them to act. www.hexagonmining.com

Level Monitoring Operations challenged with managing inventory in covered storage bunkers have a new option from BinMaster that combines leading-edge software and the 3DLevelScanner acoustic sensor to measure the level of materials piled under structures. Multiple sensors measure and map levels across the material surface, while MultiVision software separates the piled material into virtual sections. Minimum, maximum, and average levels are reported for up to 99 unique sections. The data is aggregated to output a visual showing the topography of the entire storage bunker. This solution is used to estimate inventory and improve production efficiency. Identifying high and low sections allows for automating process control and managing the filling or extraction of materials through hoppers in the bottom of the bunker. In proven installations, up to 20 3DLevelScanners have been mounted in the upper structure of the bunker roof. The bunker is virtually divided into sections as small as 1.5 by 1.5 meters with 3D sensors continuously measuring changes across the surface and reporting inventory in the massive structure. www.binmaster.com

Mine Scheduling Maptek continues to stamp its ownership on the mine scheduling market through an intelligent optimization approach. The latest Maptek milestone, Evolution 5, delivers an updated interface for scheduling with attributed solids. This upgrade enables short or medium-term scheduling with block models or solids, and seamless handling of stratigraphic reserves. It represents a more intuitive way to see the source information for scheduling. Enhanced road network tools save time setting up schedules, leaving engineers more time for analysis. Users can now assign dependencies to solids and employ their preferred approach to better control schedules. They also gain more control over processes and the accumulation of parcels. Better validation of user data before submitting a scheduling job saves time later in the process and improves confidence. With Evolution Strategy users can define residual capital categories that would apply towards the end of mine life when stockpiles are being depleted, allowing for dynamic adjustment of fixed administration costs. www.maptek.com

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2018-04-19 1:39 PM

Training Simulator Immersive Technologies has announced the latest addition to its medium fidelity simulator range. The LX6 is a brand new medium fidelity simulator platform which offers value for early stage training and is ideal for machine and site familiarization, emergency response training and compliance training. The wide horizontal field of view on the LX6 allows truck trainees to safely transition through intersections and become familiar with a site. It also allows shovel and excavator operators to have a clear view when spotting trucks. The large vertical field of view offers great ground visibility when digging, dozing or grading. Compatible with a wide range of equipment modules or Conversion Kits from Immersive Technologies, the deployment of simulators such as the LX3 and now the LX6, has become a complement to high fidelity simulators. This combination allows mining operations to free up their high fidelity simulators for later stage and business improvement focused training, while utilizing medium fidelity platforms for early stage and compliance focused training. www.immersivetechnologies.com

EMPLOYMENT OPPORTUNITY TITLE: OTR Specialist LOCATION: Either the Abitibi region of Quebec or

in the Labrador region Responsible for the development and implementation of effective strategies, programs, services, and information with the objective to secure new and maintain existing business from major regional, national and local OTR fleet accounts. Includes the ability to secure profitability with new national/ regional OTR business requiring products and services at location in the incumbents assigned area of responsibility. In addition, leading the overall operations and compliance of mining store locations within assigned market. This individual oversees the organization of their assigned territory in order to create a customer centric culture within assigned market segment. Establish relationships at Headquarters of the largest, multi-province, multi-country end users of OTR tires. Represent GCR in a knowledgeable and professional manner at OTR industry functions, trade shows, etc. Requires 70-80% travel within assigned territory in Canada and internationally (USA) Due to space restrictions, the above statement covers a brief overview of this job. A full job description can be obtained by contacting pwesterik@gcrcanada.ca. MINIMUM QUALIFICATIONS AND REQUIREMENTS: Education and experience: A Bachelorâ&#x20AC;&#x2122;s degree in business is preferred or equivalent experience along with verifiable industry accomplishments. Minimum 3-5 yearsâ&#x20AC;&#x2122; experience to include strong operations, sales and financial capabilities. Ideal candidate will have had previous store management/ multi-unit supervisory experience. Background in trucking, tire or transportation industries would be a distinct asset, as would experience in new/retread sales. Technical Knowledge: Must possess selling skills and have

Dump Truck Komatsu has started sales of the HD1500-8 mechanical mining dump truck, after having fully remodelled its predecessor. The new full model change version is powered by a 50-litre engine, compared to a 45-litre one in the preceding model, offering powerful running, supported by ample net power of 1,175 kW. It is also equipped with a retarder with the largest volume in its class. When used together with the automatic retarder, the truck achieves safe and high speed downhill traveling. As a result of shortening the cycle time, it offers high productivity. It is also equipped with Komatsu traction control system (KTCS) designed to optimize performance when travelling on slippery and/or soft surfaces. The model also features the on-demand control of reducing horsepower loss in the hydraulic system and the ECO guidance which advises energy saving procedures for the operator, improving fuel economy. The HD1500-8 truck, which incorporates cutting-edge technologies, achieves high productivity, reliability and safety. https://home.komatsu/en

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a clear understanding of the accounting principles. Ability to administer company policy and regulations in a positive manner. Thorough knowledge of OTR tire application and performance principles. Understand the vehicle maintenance process. Good understanding of all aspects of the dealer organization, including fleets, retread, new tire and service. Working knowledge of computer software utilized in the store operations, service departments and a thorough understanding and knowledge of PC software such as Excel, Word, etc. Interpersonal Skills: Must possess high principles

of honesty and trustworthy. Demonstrates effective organizational, reasoning, problem solving, conflict management abilities and time management skills. Must possess leadership and team building experience. Demonstrates a high ability to coach, influence and motivate people. Possess evidence of the ability to effectively communicate both orally and written with store personnel, administrative office personnel, and customers. Must possess good listening skills. Must be innovative and capable of change management. Must be able to organize multiple projects in fast-paced environment and possess the ability to work calmly and effectively under pressure. Must be able to handle continuous stressful situations in effective manner. Must enjoy working with a diverse workforce. Please forward your cover letter and resume to Patricia Westerik (pwesterik@gcrcanada.ca) Bridgestone Canada Inc. and its various divisions are committed to ensuring that people with disabilities have the same opportunity of access to employment opportunities and related services as do all prospective teammates. In addition, we encourage women, Aboriginal people and visible minorities to apply for employment. We thank all interested applicants, however only candidates that meet the essential requirements will be contacted for an interview.

CANADIAN MINING JOURNAL |

2018-04-19 1:39 PM

PROFESSIONAL DIRECTORY

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CANADIAN MINING JOURNAL |

2018-04-19 1:40 PM

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