The Northern Miner July 6 2015 Issue by The Northern Miner Group

One of The Largest Silver Discoveries of 2014 TSX.V: GRG www.goldenarrowresources.com

Integra Gold

Launches its ‘Gold Rush Challenge’ $3.99 • JULY 6-12, 2015 • VOL. 101, NO. 21 • SINCE 1915

Barrick Gold 3

BRUCE MADU

Environmental student Haj Bains signals to helicopter pilot Michael King after collecting a treetop sample in westcentral British Columbia.

BY LESLEY STOKES

ANAHIM LAKE, B.C. — A typical work day for this Geoscience BC’s biogeochemical survey crew in westcentral B.C. gets started with the smell of jet fuel and the high-pitched whir of a helicopter. The five-person team and pilot are collecting samples from trees spread out over 1,000 sq. km of northern boreal forest northeast of Anahim Lake.

The survey is part of a much larger, 20,000 sq. km project named TREK (an acronym for “Targeting Resources for Exploration and Knowledge”), which is delivering multidisciplinary baseline data to stimulate exploration from south of Vanderhoof to west of Quesnel. At the base camp, the crew is unpacking gear and busily strapping GoPro video cameras to the helicopter skid, while environmental student Haj Bains fash-

Royal Nickel receives main environmental permit for Dumont BY TRISH SAYWELL

Royal Nickel (TSX: RNX; USOTC: RNKLF) says it will build what will be one of the largest nickel sulphide mines in the world at its Dumont project early next year, after securing a key environmental permit from the Quebec government. The company started the permitting process for its 100%owned magmatic nickel sulphide project in December 2011, and announced June 25 that it had received the Certificate of Authorization — the most important permit for mining projects in Quebec — from the province’s Ministry of Sustainable Development, Environment and the Fight Against Climate Change. “Quebec is a good place to permit a mine,” Mark Selby, Royal Nickel’s president and CEO, says in an interview. “Three and a half years in the mining business from start to finish is excellent. In some jurisdictions, you’re looking at two or three times that long.”

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With the permit Royal Nickel can get on with raising money for the project, which could produce nickel for over 30 years. Based on a bankable feasibility study in 2013, total capital costs over the mine life will reach US$2.8 billion. Royal Nickel has appointed Norway’s Swedbank — one of the largest banks in Europe’s Nordic and Baltic region, with nearly 600,000 corporate clients — as its advisors for a contemplated senior bond financing of US$600 million. “Swedbank has done US$7 billion in bond financing in the last 24 months,” Selby says. “it has an investor base where they do construction bonds.” In addition to the US$600 million Royal Nickel’s management team expects to raise through Swedbank, the company plans to raise another US$300 million to US$400 million before year-end, and has been in discussions with a number of stainless steel companies, Asian trading houses, See ROYAL NICKEL, Page 8

Makes private bid for K+S

Molycorp strikes restructuring deal with creditors

Geoscience BC’s avant-garde treetop sampling

SITE VISIT

Focused on cutting debt

Potash Corp. of Saskatchewan

See GEOSCIENCE BC, Page 2

America, with the exIn the first quarter of ception of non-operat2015, Molycorp (NYSE: ing companies in LuxMCP) reported higher embourg and Barbados, production volumes are excluded from the from its Mountain Pass Chapter 11 filings. rare earth facility in CalPresident and director ifornia, and yet posted of Stormcrow Capital in negative cash flow from Toronto Jon Hykawy operating activities of US$73 million and a loss BY TRISH SAYWELL says the announcement isn’t a surprise, because attributable to common shareholders of US$102 million, Molycorp had long passed the point of no return regarding its or US42¢ per share. On June 25, the embattled com- debt payments. “Even if production magically pany announced that it had reached an agreement with credi- increased to 100% nameplate outtors to restructure US$1.7-billion put and the company were selling worth of debt on its balance sheet, everything it could make at Mounand filed voluntary petitions tain Pass at market rates, and their under Chapter 11. The creditors costs had also fallen to forecasted hold more than 70% of the com- values, they could not generate enough cash flow to make all the pany’s 10% senior secured notes. The restructuring support debt payments required in the agreement also provides financ- time allowed until those payments ing of up to US$225 million from were due,” Hykawy writes in an a group of Molycorp’s creditors, emailed response to questions. “Given they seem to have supled by JHL Capital Group, JMB Capital Partners and QVT Finan- port from a large fraction of their cial LP. The debtor-in-possession creditors to continue operations financing will support the com- with an appropriate capital strucpany’s operations during the ture, the easiest way to effect those Chapter 11 period. Molycorp’s sorts of changes is to do it through operations outside of North Chapter 11.” The real question, Hykawy says, is whether there is a long-term business in place for Molycorp or any other rare earth company outside of China. “Last year, I would have said that the answer was obviously

GoviEx pushes Madaouela on the permitting front BY SALMA TARIKH

GoviEx Uranium (CSE: GXU) is quietly advancing its large Madaouela uranium project, and expects to receive a mining permit by year-end, or early 2016. The junior’s flagship project sits in the prolific Arlit uranium mining district of northern Niger, 10 to 15 km from Areva’s operating Somair and Cominak uranium mines. The mines have operated for over 40 years and produce 7% of the world’s uranium supply, making Niger the fourth-largest uraniumproducing country. Since GoviEx started drilling Madaouela in 2008, it has completed more than 600,000 metres. “We have drilled the hell out of it,” GoviEx CEO Daniel Major said in a recent presentation in Toronto, adding there’s still a lot to explore. To conserve capital, the company turned the drills off in June 2013, a year before it listed on the Canadian Securities Exchange. “We basically said: ‘That’s enough. We have gone over a hundred mil-

lion pounds. We have infill drilled … until the mine is built, it’s big enough,’” Major said. In March 2015, the junior finished its environmental and social impact assessment, and expects approval soon. In April, it released an updated resource estimate for the Marianne and Marilyn deposits (the project’s other mining areas include Miriam, MSNE and Maryvonne). Marianne and Marilyn now make up half of Madaouela’s total resource of 108 million lb. uranium oxide (U3O8) in measured and indicated, and 28 million lb. U3O8 in inferred. The junior will apply for a mining permit soon. Meanwhile it’s optimizing the project’s 2013 integrated development plan, or prefeasibility study. Based on “probable reserves” of 54.9 million lb. from 25.3 million tonnes at 0.098% U 3O 8, Madaouela could produce 2.5 million lb. U3O8 annually over an 18-year mine life, with

See MOLYCORP, Page 11 PM40069240 – PAP Registration #09263

See GOVIEX, Page 13

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2 JULY 6-12, 2015 THE NORTHERN MINER

Geoscience BC’s treetop sampling

REGULAR DEPARTMENTS

COMPANY INDEX

Careers............................. 11 Editorial.............................. 4 Events............................... 14 Meetings.......................... 14 Mining Jobs................... 9-10 Metal Prices........................ 7 People................................ 5 Professional Directory.. 12-13 Stock Tables..................... 6-7

Agrium............................. 16 Areva.................................. 1 Barkerville Gold Mines........ 1 Barrick Gold...................... 15 Goldcorp............................ 3 GoviEx Uranium................. 1 Iamgold............................ 13 Imperial Metals................... 2 Integra Gold....................... 3

K+S Aktiengesellschaft...... 16 Mandalay Resources......... 14 Molycorp............................ 1 Mosaic.............................. 16 New Gold........................... 2 Potash Corp. of Saskatchewan.............. 16 Royal Nickel........................ 1 Seabridge Gold................... 2

STORIES WE’RE WORKING ON. . .

Check out our next special section: Technology Metals (July 20).

Since 1915

BRUCE MADU

Colin Dunn (third from right), geochemist and consultant with Geoscience BC, with visitors, consultants and crew involved with the TREK treetop-sampling program. GEOSCIENCE BC, From Page 1

ions a harness around his waist. Meanwhile, Colin Dunn, pioneer scientist of the avant-garde technique and retired geochemist with the Geological Survey of Canada (GSC), stands alongside as he, quite literally, shows the crew the ropes. “The helicopter will pull up alongside a tree, and this young man will be sitting outside on the skid, tied on by a rope and harness, of course,” Dunn explains while the team preps for the practice run. “Then he’ll collect a sample bag’s worth of branches off its top.”

gram gold per tonne in the Main zone, 272,000 tonnes at 8.58 grams gold in West zone and 589,000 tonnes at 6.86 grams gold in the Midwest zone. Dunn says he harbours high hopes for a similar anomalous result over the survey area, considering it’s located 30 km south of New Gold’s (TSX: NGD; NYSE-MKT: NGD) Blackwater deposit. This epithermal gold deposit has proven and probable reserves of 344.4 million tonnes at 0.74 gram gold for 8.17 million oz. gold. Interpreted to underlie the vast forest is a variably thick volcanic

‘If you can’t use the conventional sample mediums — try the trees.’ — Colin Dunn, biogeochemical pioneer and consultant, Geoscience BC Dunn — who’s had his fair share of being tethered to helicopters — was one of the first scientists to investigate biogeochemical markers in tree tissues, and spearheaded its inaugural survey with the GSC in 1988. He refers to those results — based on a collection of samples over the QR gold deposit, 73 km east of Quesnel, B.C. — as being “proof-of-concept.” “At the time QR was just a prospect with a couple of drill holes,” he says. “So we wanted to see if there were any values of gold in the trees, and turns out we found anomalously high levels over the deposit.” The since-depleted mine, currently owned by Barkerville Gold Mines (TSXV: BGM; US-OTC: BGMZF), is a porphyry gold deposit that contains both native and refractory ore within a historical reserve of 2.5 million tonnes at 0.34

cover sequence called the Chilcotin group. These rocks geographically manifest as a plateau across the region, but Geoscience BC says the older Stikine terrane — a favourable host for large porphyry and epithermal deposits — could crop near the surface. The Stikine terrane is a northwest-stretching magmatic arc that also hosts Imperial Metals’ (TSX: III; US-OTC: IPMLF) Red Chris and Seabridge Gold’s (TSX: SEA; NYSE: SA) KSM behemouth gold and copper deposits in northwest B.C. Wayne Jackaman, primary consultant for Geoscience BC — a nonprofit organization funded by the B.C. government — says that on top of the 2,300 historical stream-sediment samples for the area, Geoscience BC will take another 4,000 basal till samples across the TREK project — not to mention airborne geophysical lines that total two and

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a half times the circumference of the earth. “This is a huge amount of information,” Jackaman says. “There aren’t many projects of this size that have ever been done. It’s pretty unique in the world. The resulting database will probably be as good as you can get.” He points out that Geoscience BC will make the data public in “the most raw form as possible,” so B.C. explorers will have to piece together and interpret the datasets on their own. “These are regional surveys — they’re not meant to actually discover, they’re meant to stimulate discovery. So hopefully there’s enough information to pick out some sort of regional trend,” he says, recommending “ioGAS” as a standout software program suited for the task. Adding to Jackaman’s comment, Dunn explains that the biggest problem with biogeochemical datasets is that plants need certain elements for their metabolism, and thus will concentrate these elements and yield misleadingly high values for them. Zinc is one such element to be wary of in plants, but Dunn says that cadmium is a perfect pathfinder and better indicates a buried zinc deposit, rather than zinc itself. Dunn also recalls the last treetop survey — completed in 2005, as part of a federal government initiative called “TGI-3” — identified a strong thallium anomaly, 52 km south of the town of Lumby in southeastern B.C. “It was years after we published the data, and still nobody picked up on the anomaly and staked the ground,” he says. “I’ve seen the same anomaly over other basemetal deposits in Canada, and I knew it was a pathfinder for lead and zinc.” So after he retired from the GSC, he finally put his “money where his mouth is,” partnered with privately held RIT Minerals and got his boots out of the helicopter and onto the ground. “What we found is really proving to be quite a significant zinc prospect, with up to 19% zinc from grab samples at surface,” he says, adding the company is planning a modest exploration program mid-year. The all-to-familiar burst of the helicopter engine interrupts the conversation, and with the GoPro’s

bluetooth linked to their androids and iPhones, it’s clear to see that the bush-savvy samplers are ready for the much-anticipated test-run. Colin joins the flight crew and offers a few last-minute tips to the student Bains — an avid mountain climber comfortable with ropes and heights — who exudes confidence but admits it’s his first time flying in a helicopter. With the helicopter now hovering in position beside the tree, those on the ground are blasted by the rotor wash and deafened by the motor as they stand below with cameras pointed up. Bains exits the craft, motions onto the skid and proceeds to rip off small branches. Backed with a $150,000 budget

from Geoscience BC, the team should collect 400 tree samples over four days, with spruce species being preferred. Dunn says that although the survey appears expensive, the sample value is roughly the same as stream sediments, considering all the factors. “The biggest advantage with using this exploration tool is speed. You get to cover a lot of ground very quickly in areas that have really poor access,” he says. “Or sometimes you don’t have much of a choice. Either there’s a lack of outcrop or bogs, which can also prevent you from getting an adequate rock or soil sample. So if you can’t use the conventional sample mediums — try the trees.”

BRUCE MADU

Inside a helicopter used for treetop sampling, from left: Haj Bains, student; Colin Dunn, geochemist and consultant with Geoscience BC; and David Sacco, consulting Quaternary geologist with Geoscience BC.

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THE NORTHERN MINER JULY 6-12, 2015 3

Integra turns to crowdsourcing to find more gold

INTEGRA GOLD

Integra Gold’s historic Sigma-Lamaque gold mill, near its Lamaque South gold project in Val-d’Or, Quebec. Integra Gold (TSXV: ICG; USOTC: ICGQF) is getting creative with the treasure trove of data it acquired last year when it bought the past-producing SigmaLamaque mine and mill, near its Lamaque South gold project in Val-d’Or, Que.

ing firm to help us find new targets using this huge database, we think tapping into the collective brainpower of thousands of people around the world is a far more effective way,” Salamis notes. The company will join forces with HeroX — a crowdsourcing

The firm plans to launch the Integra Gold Rush Challenge, allowing anyone to look at its data to help uncover a deposit for a $1 million prize. The company is compiling 75 years of historical mining and exploration data into one digital database. Once complete it will launch the Integra Gold Rush Challenge, so that anyone can access the trove to help the company uncover its next big gold deposit for a $1-million prize. Integra expects to have the database ready by the end of August, with the contest beginning in September. The open-source contest will save Integra time and millions of dollars in interpreting its wealth of information, Integra’s chairman George Salamis said on a conference call. “While we could hire a consult-

platform — to attract global participants, including those outside of the mining industry. The initiative is similar to the Goldcorp Challenge, where Goldcorp (TSX: G; NYSE: GG) put all of its Red Lake gold mine data online in 2000 to help find its next 6 million oz. deposit, in exchange for prizes. This is the first time one company is consolidating the six terabytes of data on the historic Sigma and Lamaque mines, as different owners previously operated them, Salamis says. He says earlier companies spent over $5 million and five years scanning the documents and digitizing them without ever finishing, due to budget con-

Integra Gold (TSXV:ICG)

said in a recent interview. The most obvious exploration target is Lamaque Deep, the down-dip extension below the previously mined Lamaque mine. The company estimates the target has a conceptual size of 8 million to 20 million tonnes grading between 5.5 and 6.5 grams per tonne gold. But instead of following up on the target, the company will reveal all of its recently acquired information to contestants to see if they can provide new exploration targets and ideas, while Integra drills 75,000 metres at its high-grade Lamaque South project this year. The company has spent the last six months compiling and verify-

ing the historic files, which date back to 1933 and include more than 30,000 drill holes, over 50,000 gold assays and hundreds of kilometres of mapped underground workings, mining statistics and photos. “It’s not exactly the most exciting work,” De Jong says of the compilation, “but the idea is that we want to have one really reliable database when we are done.” Integra will release more details on its Gold Rush Challenge in the coming months ,and says that it will raise the $1-million award through sponsorships. It will announce the winners of the contest next March at the annual Prospectors & Developers Association of Canada conference in Toronto.

Obituary With heavy hearts, we announce the passing of John A. (Jack) Green wonderful husband, father, grandad, brother and uncle. His legacy is remembered by Heather, his loving wife of 52 years, his daughter Judi (Barry) and sons John (Kristen) and Jason (Laura), his brother Howard (Ilma), and the sparks of his life- grandchildren Taylor, Kyson, Emma and James as well as his numerous nieces and nephews. Jack was predeceased by his mother Lerra, father George, brothers Bill and Bobby, and sisters Velma and Betty. Jack was born in Espanola, Ontario and moved to Red Lake in 1949 at the age of 12 years old. He worked in the family commercial fishing business alongside his father and brothers until attending the Halibury Schools of Mines graduating in 1960. Returning to Red Lake Jack worked in the Campbell Mine, eventually becoming a shift boss, until 1967 when he and Heather decided to move to Thunder Bay for Jack to complete his Geography Degree at Lakehead University. Jack’s desire at that time was to be a teacher. Upon completion of his degree in 1970 Jack returned to Red Lake to help his ailing father for one summer- that John A. (Jack) Green was 45 years ago. Jack worked with his younger brother Bobby transitioning the business March 31, 1937from their father taking an already successful commercial fishing and airways company and June 19, 2015 growing it to become an important Red Lake business. The business operates under the banner of the Family name- Green Airways and Green’s Fly-In Camps. Jack was active in the business to his last day- the only way he would have it. Jack’s love of family was evident from the time he met Heather in 1961 and they had their 3 children. The last 10 years Jack was blessed with 4 grandchildren whom he loved deeply and were an inspiration to help him through his many health issues. Jack lived life to the fullest and tackled everything with determination. He was certainly known by more than one person as the type of man who worked hard and played hard. His unwavering commitment to his family has instilled a love and dedication which has been passed down through his lineage to his grandchildren.

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In his younger years Jack was an avid athlete which fostered his support of local sports teams in the Red Lake area. Hunting and fishing was Jack’s business but also provided for some of his most enjoyable memories with family and friends. Jack’s sense of fairness, tremendous dedication, unwavering work ethic and deep respect for others will be missed. Respect was one of Jack’s highly held values. A fitting testament to his character being that he was and will always be, respected by many in his life and community. Jack will be sadly missed- especially by his loving, dedicated wife Heather- always standing by his side.

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straints. The mines sit within 500 metres of each other, and Integra’s exploration team treats them as one system. The Sigma mine, largely operated by Placer Dome, produced over 4.5 million oz. gold from 1,830 metres deep. The Lamaque mine, run by Teck Cominco, churned out more than 4.5 million oz. from 1,100 metres deep. For 30 years, Lamaque was Quebec’s largest gold mine from 1955 to when it closed in 1985, mainly due to a slump in gold prices and labour unrest. Initial findings indicate the Lamaque orebody likely reaches the same depth as the Sigma mine, Integra’s CEO Stephen de Jong

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May 2015

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A celebration of his life was held on Saturday, June 27th at 2 pm in the Red Lake Royal Canadian Legion with Pastor Keith Graber officiating. A private interment will follow at a later date. In lieu of flowers Jack has requested that donations be made to the Canadian Blood Services especially in the form of blood donation. Monetary donations can be made through Herold Funeral Home, Box 237, Red Lake, ON P0V 2M0. You can rest now Jack (Dad), you have earned it.

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JULY 6-12, 2015

THE NORTHERN MINER

EDITORIAL

EDITOR-IN-CHIEF:

JOHN CUMMING, MSc (Geol) jcumming@northernminer.com

EDITOR, SPECIAL PROJECTS:

ALISHA HIYATE, BA ahiyate@northernminer.com

SENIOR STAFF WRITER:

TRISH SAYWELL, BA, MA, MSc (Jour) tsaywell@northernminer.com

STAFF WRITER:

MATTHEW KEEVIL, BA (Econ and Poli Sci) mkeevil@northernminer.com STAFF WRITER:

LESLEY STOKES, BSc (Geol) lstokes@northernminer.com

STAFF WRITER:

PRODUCTION EDITOR:

SALMA TARIKH, BSc (Psych), MA (Jour) starikh@northernminer.com

DAVID PERRI, BA dperri@northernminer.com

COPY EDITOR:

WEB EDITOR:

ISA CUNANAN, BSc ADRIAN POCOBELLI, (Health Sci and Prof Writing) MA (Engl) icunanan@northernminer.com apocobelli@northernminer.com

EDITORIAL: TOP STORY OF WEEK 26

GROUP PUBLISHER/ PUBLISHER: ANTHONY VACCARO, CFA, MBA

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Lonmin condemned in Marikana commission findings The long-awaited report of the Judicial Commission of Inquiry into the Marikana mine massacre in Marikana, South Africa, has been released, and there’s plenty of finger pointing to go around. The commission investigated the killing of 44 people and the injuring of many more that shocked the country and the world during Aug. 11–16, 2012, outside Lonmin’s platinum mine in Marikana in North West Province. Most of the fatalities were striking miners who’d been shot by police, in the worst explosion of violence by South African security forces against civilians since 1960. South African President Jacob Zuma actually received the 646page report in March 2015, but it was released to the general public on June 25, because he said his government needed to time to study the report. The commission was headed by retired judge Ian Farlam and was tasked with examining the conduct of Lonmin, the South African Police Service, the Association of Mineworkers and Construction Union, the National Union of Mineworkers (NUM), the Department of Mineral Resources and other government departments, as well as individuals and groupings. Lonmin was singled out for several shortcomings: not using its best efforts to resolve the dispute between it and its striking workers, nor between the strikers and non-striking workers; failing to respond to the outbreak of violence and protect its workers; insisting that its non-striking workers come to work despite a lack of protection for those workers from attacks. The commission also condemned Lonmin at a much more fundamental level for operating its mine with a dehumanizing housing system that separated workers from their families for long periods, and indirectly encouraged as many as half its workers to pocket their living allowance and instead take up residence in informal shacks around the mine site that invariably coalesced into large, unruly and unregulated shanty towns. The two unions were blasted for failing to exercise effective control over their members, allowing them to sing provocative songs and make inflammatory remarks, and NUM in particular for not making its best effort to negotiate with Lonmin. The commission found that the police plan to deal with the unfolding threat of violence by strikers was defective in many respects, and should not have been implemented on the worst day of bloodshed on Aug. 16, when 34 miners were shot dead by police. Instead, the commission said the police should have waited till the next day to act, and resorted to its original plan to encircle the strikers with barbed wire and offer them an exit point through which they would surrender their weapons. What ensued instead was the police firing on the strikers in one scene, which spiralled later into a second scene of major killing — much of it execution-style — by police who were characterized by the commission as a exhibiting a “complete lack of command and control.” The commission recommends that Lonmin be held to account by South Africa’s Department of Mineral Resources for failing to comply with its housing obligations under the Social and Labour Plans, whereby it should have built 5,500 houses between 2005 and 2011. For the police, the commission recommends it study and adopt the world’s best practices for maintaining public order without firing automatic weapons, and that operational communications during such crises be improved, recorded and preserved. Police should also improve their first aid training, especially with respect to gunshot wounds. The commission noted the propensity in South Africa for strikers and protesters to carry sharp instruments and firearms, and urged strict enforcement of laws that prohibit such behaviour. On June 26, President Zuma said at the sixtieth commemoration of the Freedom Charter in Kliptown, Soweto, that “work would begin to implement the recommendations of the report, so that there can be closure. We urge political parties not to use this tragedy for political posturing. This should instead unite us in resolving all forms of violence in this country.” Send your Letters-to-the-Editor and op-ed submissions to the Editor-in-Chief at: tnm@northernminer.com or 38 Lesmill Road, Unit 2, Toronto, ON M3B 2T5.

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TNM July 06 Issue.indd 4

C O M M E N TA R Y

Safety first for a new generation of Cree miners

Témiscamingue region of north“Working underground for me is western Quebec. like working in your basement for Then, with mines under conyou.” That’s the first thing Marcestruction farther north on James lin Bruneau tells the 12 young Bay Cree land and job opportuniCrees sitting in front of him. That ties for Crees on the horizon, Brugets their interest. “When I started neau remembered an old friend mining in 1930,” he continues, and accepted a new challenge. “there were no rules about safety Back in 1990, Bruneau had underground.” A wry smile, some landed a job at the Kerr-Addison mental math and confused looks BY DANIEL BLAND gold mine near Virginiatown, just among the Crees prompts the adSPECIAL TO THE across the Ontario border from his mission: “Bon. Maybe not 1930. But NORTHERN MINER home in Rouyn-Noranda. One of a long, long time ago!” the men in his crew was a Cree Marcelin Bruneau has spent more than 40 years working as an under- named Dave, the first aboriginal Bruneau ground miner. He got what he calls his first had ever worked with, and a man he rememreal job as a teenager in the early 1970s when bered as a “big, strong guy who laughed a he was hired by Noranda Mines as an un- lot and worked hard.” “I’ll be honest,” he says now, “we had derground helper. That was the beginning of a mining career that would take him not some ideas about Indians in those days. But only across Canada — to Quebec, Ontario, I tell you, working with Dave really changed Manitoba and B.C. — but overseas to Aus- my mind about all that, that’s for sure!” For the past two and a half years, Bruneau tralia and Indonesia, and see him work with over 20 mining companies and contractors. has been delivering a 76-hour training

‘Before I knew it I was flat on my back with the big door on top of me, smoke everywhere ... That’s how you learned in those days.’ — Marcelin Bruneau, mining safety instructor In 2008, Bruneau was hired as an instructor by the Centre de Formation Professionnelle in the mining town of Val-d’Or, Que. His mining experience made him a natural, and he spent five years delivering a sixmonth training program in underground ore extraction to students from the Abitibi-

course in underground mining safety to Crees. All miners in Quebec need the training and safety card that comes with it to work underground. Some of Bruneau’s Cree students are already employed as heavy equipment operators or labourers, and need the See COMMENTARY, Page 5

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THE NORTHERN MINER JULY 6-12, 2015 5

OP-ED

MATTERS OF GENERAL INTEREST Safety first for a new generation of Cree miners

Marcelin Bruneau teaching a mine safety course. COMMENTARY, From Page 4

training to work underground. Others want to improve their chances of finding work when mines now under construction begin to hire. Bruneau has travelled to six of the nine James Bay Cree reserves to deliver his training. He spends seven days covering his material with groups in the classroom. Then he takes them to Val-d’Or for two more days of underground practice. More than 200 Crees have received safety cards as a result of his work. Bruneau and his old friend were reunited by chance earlier this year in the northern Cree village of Chisasibi. One of Bruneau’s students had listened to his story about working with an Indian miner named Dave and made a call. After lunch, David Kitty walked into Bruneau’s class with a big smile on his face. The two hadn’t seen each other in 25 years. Last month, one of Dave’s daughters enrolled in Bruneau’s safety training. Bruneau connects easily with the Crees in his classes. During his lessons on underground safety procedures and provincial rules and regulations, he intersperses personal reminiscences from his days as a young miner. Most of his stories are funny or sad. Some are hard to believe. But all have a safety message to convey, and because they are experiences lived by Bruneau himself, that message hits home with his Cree students. Like the time 17-year-old Bruneau was asked by his boss to get rid of some old dynamite after his shift ended. “He pointed towards a couple of sticks. I’d never handled explosives before. But I’d just started that job and wasn’t going to tell him that,” Bruneau says. As he picked up the sticks, he noticed about 30 more lying in the darkness underneath an old workbench. So he bundled them all together. He remembers walking down the dark tunnel, fuse in hand, to a heavy wooden door. Closing it behind him, he thought he’d be protected. He lit the fuse. “Before I knew it I was flat on my back with the big door on top of me, smoke everywhere. I was maybe ten metres from where I’d been standing. It blew me that far. That’s how you learned in those days,” he says, shaking his head now at the memory. Bruneau is also an inventor. He has an international patent on a modular ladder for use in the vertical tunnels, or “raises,” that join a lower level in a mine to a higher

TNM July 06 Issue.indd 5

CREE HUMAN RESOURCES DEVELOPMENT

one. Drilling a raise in 1995, a sudden air blast dislodged some rocks above him. One of them sliced into his face — breaking his cheekbone — and another dislocated his knee. “We’d work on wooden lad-

ders,” Bruneau says, “hauling our equipment up on them to drill and blast the raise. But falling rocks after a blast can shake them and sometimes even dislodge them completely. That’s when accidents happened.” His patented ladder is portable and can be adjusted as the miner moves up a raise. It is made out of aluminum, with protective screens that hook onto the top of the ladder to deflect falling rocks away from the miner. Bruneau’s ladder kit is being used by half a dozen mining companies and contractors in Quebec and Ontario. Some of Bruneau’s old mining friends are gone now, and most of the others are retired. So why does he continue to make the long drive north, sometimes as much as 12 hours, to the small Cree villages to deliver his training? “You know, when I visit a mine now, I almost always hear someone, usually a Cree, call out my name,”

PEOPLE

he says. “I just smile and wave back. Maybe I am getting old. I can’t seem to remember their names.” But they all remember his — and what he taught them about safety, and how to work safely underground. “That makes it worthwhile,” he says, after thinking for a minute. “That’s reason enough to keep on doing what I’m doing.” — Daniel Bland is Lead Instructor with Cree Human Resources Development (CHRD) of the Cree Nation Government in Mistissini, Quebec, where he is involved in the design and delivery of essential skills and workplace readiness training for Crees hoping to find employment in the region’s mining sector. He can be reached at daniel.bland@chrd.ca. CHRD provides training and employment resources to Crees and acts as a liaison between employers and the Cree labour force. Please visit www.chrd.ca for more information.

Castle Mountain Mining — Martin (Marty) Tunney appointed VP of business development. Dalradian Resources — Jim Rutherford appointed a director. Equitas Resources — Raymond Goldie appointed a director. Mining Association of Canada — Robert (Bob) Stene appointed chair. Manitou Gold — Craig Stanley appointed a director. Minera Alamos — Darren Koningen appointed president; Bruce Durham appointed a director. Northern Empire Resources — Jim Paterson appointed president and CEO; Jeff Sundar appointed VP of corporate development; Bill Cronk appointed chief geologist. PearTree Securities — Trent Mell appointed president and head of mining group. Rubicon Minerals — Bill Shand appointed VP of operations. Viscount Mining — Grant Devine appointed a director.

MAKE SENSE OF THE MINING INDUSTRY Mining Explained is a 164-page reference manual (written in layman’s language) that includes the following chapters: Basic Geology • Ore Deposits • High-Tech Prospecting Sampling & Drilling • Mining Methods • Processing Ore • Mining & the Environment • The Mining Team • The Business of Mining • Feasibility: Does it Pay? • Metal Markets • Making Sense of the Numbers • Investing in Mining • Glossary of Mining Terms

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15-06-30 6:00 PM

6 JULY 6-12, 2015 THE NORTHERN MINER

MARKET NEWS TORONTO STOCK EXCHANGE Canada’s benchmark index added 1% to finish at 14,808.09, despite concerns rising over the Greek debt crisis. The S&P/TSX Capped Diversified Metals & Mining Index, however, slipped 0.8% to 695.56. The S&P/ TSX Global Gold Index fell 1.9% to 151.85, as the spot gold price tumbled 1.7%, or US$20 per oz., to US$1,180.30. Ivernia topped the percentage gainers’ list, soaring 50% to 2¢ per share after updating its special committee’s review of the business. The committee intends to complete a transaction, which may include a merger; selling Ivernia’s Paroo Station lead mine, which is currently on care and maintenance; and restructuring the company. While that review is ongoing, the committee has reached an agreement with the company’s primary lenders — Sprott Resource Lending partnership and Enirgi Group Corp. — to extend the five-month moratorium on interest and principal repayments that Ivernia received in February 2015. Royal Nickel shares jumped 46% to 40¢, after the firm received a major certificate of authorization for its Dumont nickel project in Quebec’s Abitibi mining camp. The firm has appointed Swedbank as its senior advisor on arranging a US$600-million senior

J U N E 22-26

bond financing with a five-year maturity for the Dumont project. On June 29, the company signed a letter of intent with Orion Mine Finance, a leading global mining investor. Orion will provide $12 million in exchange for a 0.8% net smelter return royalty in Dumont and 10 million Royal Nickel shares. The transaction should close around July 3. Royal Nickel will have a right to buy back half of the royalty for US$15 million after three years. Fertilizer producers Agrium and Potash Corp. of Saskatchewan were the biggest value gainers, jumping $4.98 to $128.44 per share and $1.44 to $38.61 per share. The boost came after PotashCorp confirmed that it made a private proposal

TSX most active issues

Carpathian Gld First Quantum Teck Res B Potash Cp Sask Goldcorp Barrick Gold Black Iron Yamana Gold Lundin Mng Lake Shore Gld

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

CPN 12855 0.03 0.02 0.02 0.00 FM 12336 18.51 16.65 17.10 + 0.29 TCKB 11336 14.24 12.78 13.00 - 0.37 POT 8084 39.82 36.99 38.61 + 1.44 G 8031 20.97 19.81 20.32 + 0.20 ABX 7709 13.93 13.40 13.43 - 0.65 BKI 7668 0.04 0.03 0.03 - 0.01 YRI 7488 4.00 3.72 3.73 - 0.19 LUN 7328 5.50 5.24 5.33 + 0.06 LSG 7282 1.35 1.27 1.31 - 0.04

to acquire German-based potash producer K+S Aktiengesellschaft. While the company hasn’t released details, Raymond James analyst Steve Hansen says the deal could help PotashCorp secure “uncontrolled greenfield supply” at the company’s Legacy project, noting it could delay the project to reduce supply and tighten the market. But Hansen notes the potential deal faces many “detractions,

risks, and political and regulatory hurdles” that would make it hard to close. Carpathian Gold was the most traded stock, finishing flat at 2¢ per share on 12.8 million shares traded. The troubled miner reported on June 24 that it would reduce operations at its RDM gold mine in Chile due to a water shortage. It predicts normal production will not resume until the next wet season in October.

TSX greatest percentage change

Ivernia Royal Nickel Silver Bear Rs Oracle Mng Champion Iron Inspiration Mg Silver Bull Re Coro Mining Redhawk Res Canarc Res Fortune Mnrls TVI Pacific Opta Minls Cardero Res Mawson Res Marathon Gold Black Iron Lexam VG Gold Meadow Bay Gd Freegold Vent

TSX greatest value change

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

IVW RNX SBR OMN CIA ISM SVB COP RDK CCM FT TVI OPM CDU MAW MOZ BKI LEX MAY FVL

252 6052 2373 35 821 42 209 739 66 186 3736 336 14 142 39 191 7668 55 686 40

0.02 0.59 0.08 0.02 0.10 0.05 0.17 0.03 0.06 0.07 0.09 0.02 1.25 0.03 0.25 0.30 0.04 0.08 0.23 0.13

0.01 0.27 0.05 0.02 0.08 0.05 0.10 0.03 0.06 0.05 0.04 0.01 0.85 0.02 0.21 0.24 0.03 0.08 0.20 0.12

0.02 0.40 0.08 0.02 0.10 0.05 0.13 0.03 0.06 0.06 0.05 0.01 0.89 0.02 0.21 0.26 0.03 0.08 0.20 0.12

+ 50.0 + 46.3 + 33.3 + 33.3 + 26.6 + 25.0 + 23.8 + 20.0 + 20.0 + 20.0 - 43.7 - 33.3 - 25.8 - 25.0 - 19.6 - 17.4 - 16.6 - 16.6 - 14.8 - 14.2

WEEK VOLUME CLOSE CHANGE

Agrium Potash Cp Sask Imperial Metal Energy Fuels Horizns G Bear Contintl Gold OceanaGold Major Drilling First Quantum Goldcorp Agnico-Eagle Labdr I-Ore Ro Royal Gold Tahoe Res Altius Mnrls Silver Std Res Barrick Gold Pan Am Silver Silver Wheaton Detour Gold

AGU POT III EFR HGD CNL OGC MDI FM G AEM LIF RGL THO ALS SSO ABX PAA SLW DGC

TSX VENTURE EXCHANGE The S&P/TSX Venture Composite Index closed in the red during the trading period, as the Greek debt crisis took a toll on markets and energy futures lost ground. In addition to falling oil prices, Canadian traders reacted to policy initiatives by Alberta’s recently elected New Democratic Party government to toughen standards on the province’s carbon emitters. Gold futures had another tough week after August contracts for bullion lost 2.4%, or US$28.70, before finishing at US$1,173.20 per oz. August contracts for West Texas Intermediate crude oil dropped nearly 2.7%, or US$1.60, en route to a $58.78-per-barrel close, while September contracts for copper jumped 2.3%, or US6¢, before closing at US$2.64 per lb. Unigold led the value-added category after announcing a strategic investment from Osisko Gold Royalties that should help it explore and develop gold assets in the Dominican Republic. The company gained 18¢, or 1,166%, before closing at 19¢ per share. On June 25 Unigold reported that Osisko has signed a subscription agreement wherein it would pick up 5.1 million shares in the company at 20¢ per share, for gross proceeds of $1 million. The Osisko subscription comprises the first tranche of a “potentially

TNM July 06 Issue.indd 6

+ 4.98 + 1.44 + 0.92 + 0.91 + 0.47 + 0.41 + 0.38 + 0.32 + 0.29 + 0.20 - 2.15 - 1.33 - 1.10 - 0.90 - 0.77 - 0.66 - 0.65 - 0.58 - 0.53 - 0.52

J U N E 22-26

larger” offering of up to 7.5 million shares, for gross proceeds of $1.5 million. Osisko also gains an option to buy a 2% net smelter return royalty on Unigold’s flagship Neita property for a $2-million consideration, which will be exercisable for 90 days after Unigold delivers a feasibility study. Explorer Kennady Diamonds topped the value-lost column after exploration and bulk sample results from its Kennady North project in the Northwest Territories. The company dropped 57¢ on 148,880 shares traded, before finishing at $4.81 per share. On June 22 Kennady released recovery results from 2.7 tonnes of kimberlite from the Kelvin North lobe that returned a 2.74-carat-per-tonne sample grade for com-

TSX-V most active issues

Xmet Metanor Res CMC Metals Malbex Res Northern Vertx Integra Gold Garibaldi Res Orefinders Res Ryan Gold Equitas Res

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

XME MTO CMB MBG NEE ICG GGI ORX RYG EQT

8101 7432 5736 5046 5041 4523 4371 3591 3554 3498

0.02 0.07 0.07 0.04 0.23 0.35 0.09 0.02 0.16 0.10

0.01 0.05 0.05 0.03 0.19 0.32 0.06 0.01 0.14 0.09

0.01 - 0.01 0.07 + 0.02 0.05 - 0.02 0.03 0.00 0.20 0.00 0.34 - 0.01 0.08 - 0.01 0.02 - 0.01 0.15 + 0.01 0.09 0.00

mercial-size diamonds. Kennady followed up on June 25 with the latest round of infill drill results from the project. Drill hole 15-14 cut 156.3 metres of kimberlite from 114 metres deep at Kelvin North, while hole 15-42a intersected 51.4 metres of kimberlite from 152 metres deep at the Faraday 2 target. Canada-focused explorer Xmet was the

most traded company after an update on its project portfolio across Ontario and Quebec. Xmet saw just over 8 million of its shares change hands, though its valuation stayed at 1¢ per share. The company is planning a mid-year ground reconnaissance program and geophysical survey at its new Win-Win gold project.

TSX-V greatest percentage change

Unigold Hunt Mng Kings Bay Gold Rio Silver Bitterroot Res NQ Expl Orex Expl Passprt Potash African Queen Vangold Res Sonora Gld & S Iron Tank Res Chimata Gold Mountain Boy M MacDonald Mns Castle Peak Mg Frontline Gold Grande Portage Kermode Res Barker Mnrls

TSX-V greatest value change

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

UGD HMX KBG RYO BTT NQE OX PPI AQ VAN SOC TNK CAT MTB BMK CAP FGC GPG KLM BML

77 22 103 196 261 479 662 1105 2069 60 225 61 465 49 335 40 171 84 410 124

0.20 0.10 0.01 0.03 0.01 0.01 0.02 0.02 0.03 0.01 0.01 0.04 0.08 0.01 0.01 0.01 0.01 0.01 0.01 0.01

0.16 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.03 0.01 0.01 0.01 0.01 0.01 0.01 0.01

0.19 0.06 0.01 0.02 0.01 0.01 0.02 0.02 0.02 0.01 0.01 0.02 0.04 0.01 0.01 0.01 0.01 0.01 0.01 0.01

+ 1166.6 + 450.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 - 66.6 - 60.0 - 56.2 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0

WEEK VOLUME CLOSE CHANGE

Unigold Abitibi Royalt Largo Res Almonty Ind Atico Mng Stina Res Excelsior Mng Bellhaven Cp&G Chesapeake Gld Altitude Res Kennady Diam Ascot Res Timberline Res Bear Creek Mng Diamcor Mng Wealth Minls Energold Drill Golden Hope North Arrow Mn Reservoir Capt

UGD RZZ LGO AII ATY SQA MIN BHV CKG ALI KDI AOT TBR BCM DMI WML EGD GNH NAR REO

U.S. M ARKETS U.S. stocks slumped as the Greek governmentmoved closer towards defaulting on debt payments to the International Monetary Fund. The Dow Jones Industrial Average fell 0.4% to 17,946.68, while the S&P 500 Index also dropped 0.4% to 2,101.49. The Nasdaq sank 0.7% to close at 5,080.51. The spot price for gold fell -2.4%, or US$29, to 1,171 per oz., while the Philadelphia Gold & Silver Index dropped 3% to 64.68. Freeport-McMoRan topped weekly trading and had the greatest value change after it signalled to the U.S. Securities and Exchange Commission its intention to raise capital through an initial public offering for its new oil and gas division. Freeport shares rose 0.9% to US$19.94. The filing was announced two years after the international producer spent US$9 billion to acquire sizeable assets in the U.S. oil and natural gas sector by buying Plains Exploration & Production Co. Freeport suggested in April it might spin out its oil and gas division, after slumping oil prices took its toll on the company’s debt load. The global conglomerate based in Phoenix

1455816 128.44 8084340 38.61 90964 10.66 451555 6.58 1735279 12.57 5031893 3.05 2751892 3.11 777993 6.53 12336289 17.10 8031195 20.32 2860735 35.93 1284838 15.26 11598 76.95 3602739 15.77 315800 14.48 984246 7.73 7709363 13.43 1063058 11.04 4017603 21.83 3481960 14.40

77090 10413 125960 46000 288990 269000 1478404 25543 36832 33902 148880 336082 10874 436354 26257 106296 38465 61814 143937 10295

0.19 3.27 0.81 0.68 0.61 0.25 0.37 0.38 2.01 0.20 4.81 1.75 0.60 0.92 1.28 0.32 0.68 0.43 0.42 0.40

+ 0.18 + 0.12 + 0.12 + 0.11 + 0.11 + 0.09 + 0.09 + 0.08 + 0.07 + 0.07 - 0.57 - 0.15 - 0.10 - 0.10 - 0.10 - 0.08 - 0.07 - 0.07 - 0.07 - 0.06

J U N E 22-26 didn’t provide any information about the number of shares or pricing in its regulatory filing, but plans to list the common stock on the New York Stock Exchange under “FMOG.” Central GoldTrust was marked as high-value, as shares rose 0.5% to US$41.12 following an enhanced cash-redemption feature whereby the company advised shareholders to reject a hostile takeover bid by Sprott Asset Management Gold. With the feature shareholders can redeem their shares for cash, in the amount of 95% of net asset value.

U.S. most active issues

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

Peabody Enrgy* BTU 119593 2.73 1.92 2.29 - 0.34 Alcoa* AA 90095 11.90 11.55 11.69 - 0.24 Freeport McMo* FCX 85779 21.17 19.38 19.94 + 0.17 Alpha Nat Res* ANR 57361 0.43 0.31 0.32 - 0.07 Barrick Gold* ABX 50489 11.35 10.87 10.90 - 0.58 Arch Coal* ACI 44008 0.49 0.37 0.40 - 0.07 Cliffs Nat Rs* CLF 40843 5.05 4.43 4.65 - 0.37 Potash C Sask* POT 32958 32.18 30.21 31.35 + 1.05 Goldcorp* GG 29342 16.95 16.18 16.51 + 0.04 Kinross Gold* KGC 29201 2.35 2.23 2.32 + 0.05

The gold bullion investment fund has also commenced a legal proceeding against Sprott seeking declaration from court that the takeover offer is an illegal proxy solicitation. Potash Corp. of Saskatchewan (Pot-

ashCorp) topped trading and generated the highest values, as shares rose 3.5% to US$31.35. The German competitor, K+S, owns the Legacy potash mine in Saskatchewan near one of PotashCorp.’s biggest operations.

U.S. greatest percentage change

Great Panther* Silver Bull R* Northern Dyn* Intrepid Pots* Goldfield* Eurasian Mnls* Mosaic* Cloud Peak En* NovaCopper* Nevsun Res* Solitario Ex&* Alpha Nat Res* Rare Elemt Re* Comstock Mng* US Energy* Molycorp* Timberline Rs* Atlatsa Res* Arch Coal* PolyMet Mng*

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

GPL SVBL NAK IPI GV EMXX MOS CLD NCQ NSU XPL ANR REE LODE USEG MCP TLR ATL ACI PLM

5298 0.44 0.41 0.42 + 31.2 2549 0.14 0.08 0.10 + 21.2 968 0.38 0.32 0.36 + 18.6 1468 12.23 10.85 12.03 + 10.0 328 1.75 1.55 1.75 + 10.0 423 0.55 0.46 0.54 + 5.8 27160 47.13 44.73 46.55 + 3.8 2502 4.82 4.44 4.82 + 3.8 439 0.55 0.48 0.54 + 3.6 632 4.10 3.80 3.97 + 3.6 319 0.66 0.52 0.52 - 21.2 57361 0.43 0.31 0.32 - 18.7 476 0.59 0.48 0.48 - 17.2 546 0.69 0.53 0.53 - 17.1 441 0.81 0.66 0.66 - 17.0 13147 0.45 0.34 0.36 - 16.5 41 0.61 0.44 0.54 - 16.4 126 0.13 0.11 0.11 - 14.6 44008 0.49 0.37 0.40 - 14.4 1994 1.33 1.15 1.15 - 13.5

U.S. greatest value change WEEK VOLUME CLOSE CHANGE

Agrium* Mosaic* Intrepid Pots* Potash C Sask* Compass Mnls* Central GoldT* Cloud Peak En* Freeport McMo* Goldfield* Nevsun Res* Agnico-Eagle* US Silica Hld* Randgold Res* BHP Billi-BHP* Consol Energy* Royal Gold* Tahoe Res* Stillwater Mg* Newmont Mng* Alliance Rs P*

AGU MOS IPI POT CMP GTU CLD FCX GV NSU AEM SLCA GOLD BHP CNX RGLD TAHO SWC NEM ARLP

552216 104.35 27160450 46.55 1467638 12.03 32957907 31.35 323895 83.99 666951 41.12 2502231 4.82 85779465 19.94 327997 1.75 631889 3.97 6534730 29.16 2021879 28.43 1832816 68.91 9120012 42.69 22894709 22.39 2021937 62.46 2090107 12.85 10047201 11.83 23351934 23.83 2007497 24.38

+ 3.62 + 1.71 + 1.10 + 1.05 + 0.65 + 0.20 + 0.18 + 0.17 + 0.16 + 0.14 - 1.79 - 1.62 - 1.41 - 1.12 - 1.10 - 1.06 - 0.94 - 0.89 - 0.82 - 0.68

15-06-30 6:00 PM

THE NORTHERN MINER

JULY 6-12, 2015

METALS, MINING AND MONEY MARKETS SPOT PRICES

PRODUCER AND DEALER PRICES

COURTESY OF SCOTIABANK

Tuesday, June 30, 2015 Precious Metals Gold Silver Platinum Palladium Base Metals Nickel Copper Lead Zinc

Price (US$/oz.) $1175.00 $15.70 $1083.00 $670.00

Change -8.35 -0.26 +10.00 -32.00

Price (US$/tonne) $11885.00 $5754.00 $1772.50 $2003.00

Change +55.00 -35.50 -11.00 -15.00

LME WAREHOUSE LEVELS Metal stocks (in tonnes) held in London Metal Exchange warehouses at opening, June 29, 2015 (change from June 22, 2015 in brackets): Aluminium Alloy 14340 (-700) Aluminium 3589825 (-36875) Copper 307650 (-7825) Lead 176300 (+4100) Nickel 459018 (-2418) Tin 7110 (+435) Zinc 464925 (-1550)

Thermal Coal CAPP: US$41.92 per short ton Coal: Central Appalachia, 12,500 Btu, 1.2 S02-R,W: US$52.75 Coal: Powder River Basin, 8,800 Btu, 0.8 S02-R, W: US$9.90 Coal: CME Group Futures July 2015: US$40.88; Aug. 2015: US$40.75 Cobalt: US$13.90/lb. Copper: US$2.60/lb. Copper: CME Group Futures July 2015: US$2.62/lb.; Aug. 2015: US$2.63/lb Ferro-Chrome: US$2.18/kg FerroTungsten: US$34.31/kg Ferrovanadium: US$19.39/kg Iridium: NY Dealer Mid-mkt US$565/tr oz. Iron Ore 62% Fe CFR China-S: US$60.50/tonne Iron Ore Fines: US$51.80/tonne Iron Ore Pellets: US$81.92/tonne Lead: US$0.80/lb. Magnesium: US$2.22/kg Manganese: US$2.03/kg Molybdenum Oxide: US$6.51/lb. Phosphate Rock: US$115/tonne Potash: US$307.00/tonne Rhodium: Mid-mkt US$955/tr. oz. Ruthenium: Mid-mkt US$47.00/tr. oz. Silver: Handy & Harman Base: US$15.79 per oz.; Handy & Harman Fabricated: US$19.26 per oz. Tantalite Ore: : US$177.08/kg Tin: US$6.89/lb. Uranium: U3O8, Trade Tech spot price: US$36.50/lb.; The UX Consulting Company spot price: US$36.50/lb. Zinc: US$0.92/lb. Prices current June 24, 2015

NORTH AMERICAN STOCK EXCHANGE INDICES 52-week

Date TSX Composite S&P/TSX-Ven Comp S&P TSX 60 Global Gold TSX Metals & Mining Gold & Silver XAU Arca Gold Bugs

June 29 14490.15 667.09 844.33 151.02 687.46 63.91 151.06

June 26 14808.09 679.38 863.45 151.85 695.56 64.68 152.24

June 25 14897.50 679.59 867.96 152.57 700.82 65.10 152.58

June 24 14947.51 680.48 870.95 154.54 727.93 65.85 153.76

June 23 14904.91 683.20 868.28 153.33 716.54 65.74 153.51

High 15685.13 1038.00 905.09 209.26 954.68 104.22 251.83

Low 13635.53 637.06 787.83 128.54 513.00 62.48 146.01

TSX SHORT POSITIONS

TSX VENTURE SHORT POSITIONS

Short positions outstanding at June 15/15 (with changes from May 31/15).

Largest short positions New Gold NGD 34689487 B2Gold BTO 29387761 PotashCorp POT 25538915 Lundin Mining LUN 22101962 Teck Resources TCK.B 17825874 Rubicon Minerals RMX 15179176 Kinross Gold K 14744965 Iamgold IMG 14305596 Detour Gold DGC 12291212 Thompson Creek Mtl TCM 11019513 Barrick Gold ABX 10598425 First Quantum FM 10485704 Yamana Gold YRI 8826146 Denison Mines DML 8320539 Argonaut Gold AR 7833911 Largest increase in short position Iamgold IMG 14305596 Capstone Mining CS 3149674 Detour Gold DGC 12291212 Yamana Gold YRI 8826146 Rubicon Minerals RMX 15179176 Largest decrease in short position New Gold NGD 34689487 Timmins Gold TMM 807158 Western Lithium WLC 72800 First Majestic Silver FR 5953306 First Quantum FM 10485704

Largest short positions Nexgen Energy NXE 1161000 Bear Creek Mining BCM 722613 Zenyatta Ventures ZEN 683295 Northern Graphite NGC 374634 Azincourt Uranium AAZ 308000 Kaminak Gold KAM 298511 CMC Metals CMB 292000 Integra Gold ICG 281400 Lakeland Res. LK 235600 Roxgold ROG 229781 Canasil Res. CLZ 200000 California Gold CGM 190500 Noka Resources NX 185000 Gold Standard Vent. GSV 146000 Precipitate Gold PRG 144000 Largest increase in short position Nexgen Energy NXE 1161000 Bear Creek Mining BCM 722613 Azincourt Uranium AAZ 308000 Northern Graphite NGC 374634 CMC Metals CMB 292000 Largest decrease in short position Strikepoint Gold SKP 0 Dajin Resources DJI 52000 Golden Valley Mines GZZ 4000 Lion One Metals LIO 900 Monument Mining MMY 6500

-6588494 -93284 161075 -810060 685228 801206 610677 5054758 1204100 -934708 247431 -1240388 806115 407705 -49887 5054758 1244373 1204100 806115 801206 -6588494 -3821274 -2338700 -1499798 -1240388

1160100 347600 125700 302000 308000 12000 292000 219300 225400 -43100 0 190000 112000 113900 143800 1160100 347600 308000 302000 292000 -4005000 -1482000 -255000 -199200 -184000

EXCHANGE RATES CANADIAN/U.S. EXCHANGE (Bank of Canada noon rate) Date June 22 June 19 US$ in C$ 1.2382 1.2359 C$ in US$ 0.8076 0.8091

June 18 1.2347 0.8099

June 17 1.2415 0.8055

June 16 1.2327 0.8112

EXCHANGE RATES (Bank of Canada, June 22, 2015) Currency Aus $ Euro In C$ 0.9505 1.3843 In US$ 0.7676 1.1180

Japan 0.01011 0.00817

Mex P 0.07908 0.06387

SA Rand 0.1009 0.08149

LEGEND A – Australian Stock Exchange C – CNSX Canadian National Stock Exchange J – Johannesburg Stock Exchange L – London Stock Exchange M – Mexico Stock Exchange N – New York Stock Exchange O – U.S. over-the-counter Q – NASDAQ or U.S. OTC T – Toronto Stock Exchange V – TSX Venture Exchange X – NYSE Alternext U.S. * – Denotes price in U.S.$

UK £ 1.9517 1.5762

STAFF INVESTMENT POLICY The Northern Miner does not permit any editorial employee to ﬁle stories about companies in which the writer owns shares. Editorial employees are also not permitted to take part in initial public offerings or to engage in short selling.

CONVERSIONS OF WEIGHTS & MEASURES 1 troy ounce = 31.1 grams 1 kilogram = 32.15 troy ounces 1 kilogram = 2.2046 pounds 1 (metric) tonne = 1,000 kilograms 1 (metric) tonne = 2,204.6 pounds 1 (short) ton = 2,000 pounds 1 (metric) tonne = 1.1023 (short) tons

1 gram per (metric) tonne = 0.02917 troy ounces per (short) ton = 0.03215 troy ounces per (metric) tonne 1 kilometre = 0.6214 miles 1 hectare = 2.47 acres

REPRINTS Reprints of any article published in The Northern Miner or on our website are available. We will provide them in a “PDF” format for $350. Contact: moliveira@northernminer.com or 416-510-6768

TNM July 06 Issue.indd 7

DAILY METAL PRICES Date June 29 June 26 June 25 June 24 BASE METALS (London Metal Exchange -- Midday official cash/3-month prices, US$ per tonne) Al Alloy 1770/1790 1770/1790 1770/1790 1795/1795 Aluminum 1641.50/1682 1667.50/1709.50 1670.50/1711 1690/1729 Copper 5766/5772 5730/5743.50 5715/5731 5764.50/5779 Lead 1741/1760 1770/1788 1775/1791 1786/1803 Nickel 11710/11745 12490/12525 12580/12600 12775/12825 Tin 14350/14375 14725/14750 14745/14750 15180/15240 Zinc 2010/2010 2020/2024 2030/2037 2050/2057

1780/1790 1680/1722 5723/5733 1767/1783 12660/12695 15175/15190 2027.50/2039

PRECIOUS METAL PRICES (London fix, LBMA silver price, US$ per troy oz.) Gold AM 1176.50 1174.40 1174.60 Gold PM 1176.00 1170.50 1172.65 Silver 15.83 15.83 15.77 Platinum 1081.00 1074.00 1075.00 Palladium 673.00 676.00 679.00

1183.35 1178.00 15.96 1061.00 693.00

1175.75 1173.75 15.96 1067.00 700.00

June 23

TSX WARRANTS Alamos Gold (AGI.WT) - Wt buys sh @ US$29.48 to Aug 30/18. Coeur Mining (CDM.WT) - Exercisable on a cashless basis. See TSX Bulletin 2013-0377 for calculation. To Apr 16/17. Crocodile Gold (CRK.WT) - Wt buys sh @ $2.25 to Mar 24/16. Dalradian Resources (DNA.WT) - Wt buys sh @ $1.50 to Jul 31/17. Dundee Precious Metals (DPM.WT.A) - Wt buys sh @ $3.25 to Nov. 20/15. Franco-Nevada (FNV.WT.A) - Wt buys sh @ $75 to Jun 16/17. Gran Colombia Gold (GCM.WT) - Wt buys sh @ $65.00 to Aug 24/15. (GCM.WT.A) - Wt buys sh @ $3.25 to Mar 18/19. Hudbay Minerals (HBM.WT) - Wt buys sh @ $15.00 to Jul 20/18. IMX Resources (IXR.WT) - Wt buys sh @ C$0.62 or A$0.60 to Sep 14/15. Ivanhoe Mines (IVN.WT) - Wt buys sh @ $1.80 to Dec 10/15. MBAC Fertilizer (MBC.WT) - Wt buys sh @$1.00 to Apr 17/19. New Gold A (NGD.WT.A) - Wt buys sh @ $15 to June 28/17. Osisko Gold Royalties (OR.WT) - Wt buys sh @ $36.50 to Feb 18/22 Primero Mining (P.WT) - Wt buys sh @ $8 to July 20/15 Quest Rare Minerals (QRM.WT) - Wt buys sh @ $.40 to Jul 17/17. Royal Nickel (RNX.WT) - Wt buys sh @ $.80 to Jul 11/16. RTG Mining (RTG.WT) - Wt buys sh @ $1.50 to Jun 4/17. Rubicon Minerals (RMX.WT) – Wt buys sh @$2 to Mar 12/15. Sandstorm Gold (SSI.WT.A) Wt buys 1/5 sh @ US$5 to Oct 19/15. (SSI.WT.B) Wt buys sh @ US$14 to Sep 7/17. (SSI.WT.C) Wt entitles holder to receive 0.145 of a sh to Oct 7/14.

Stonegate Agricom (ST.WT.A) - Wt buys sh @ $0.40 to Jul 24/15. Stornoway Diamond (SWY.WT.A) - Wt buys sh @ $0.90 to Jul 3/16. Vista Gold (VGZ.WT.U) - Wt buys sh @ US$5 to Oct 22/15. Supplied by TMX Group.

TSX VENTURE EXCHANGE WARRANTS Atlantic Gold (AGB.WT) - Wt buys sh @ $0.60 to Aug 20/18. Avala Resources (AVZ.WT) - Wt buys sh @ $4.80 to Mar 6/16. Brazil Resources (BRI.WT) - Wt buys sh @ $0.75 to Dec 31/18. Delta Gold (DLT.WT) - Wt buys sh @ $0.17 to Sep 14/17. Jet Metal (JET.WT) - Wt buys sh @ $0.25 to Sep 16/19. Kilo Goldmines (KGL.WT) - Wt buys sh @ $0.15 to Mar 30/16. Monarques Resources (MQR.WT) - Wt buys sh @ $0.20 to Dec 14/15. (MQR.WT.A) - Wt buys sh @ $0.18 to Dec 15/17. NexGen Energy (NXE.WT) – Wt buys sh @ $o.65 to Mar 26/16 Oceanic Iron Ore (FEO.WT.A) - Wt buys sh @ $0.65 to Nov 30/15. (FEO.WT.B) - Wt buys sh @ $1 to Nov 30/15. Sunridge Gold (SGC.WT) – Wt buys sh @ $0.35 to Oct 18/17. West African Resources (WAF.WT) - Wt buys sh @ $0.40 to Jan 17/17. West Kirkland Mining (WKM.WT) - Wt buys sh @ $0.30 to Apr 17/19. Supplied by TMX Group Inc.

NEW 52-WEEK HIGHS AND LOWS — JUNE 22-26, 2015 38 New Highs Allana Potash Alpha Gold Altiplano Mnls Antioquia Gold Asia Now Res Aureus Mng Bell Copper Canadn Plat Central Iron O Chalice Diam Cons Woodjam C Dajin Res Dynasty Gold EurOmax Res Excelsior Mng Georox Res Golden Hope Houston Lake I-Minerals Intl Bethl Mng Jazz Res Khan Res Klondex Mns Majestic Gold Metalcorp New Carolin Gd North Country Orex Expl Quaterra Res Ryan Gold Sierra Iron Or Softrock Mnrl Southern Arc Stina Res Stornoway Diam Swift Res Treasury Metal Ucore Rare Mtl

274 New Lows Abcourt Mines Aben Res Advance Gold Aftermath Silv Alcoa* Alder Res Alderon Iron O Aldershot Res Alliance Rs P* Alloycorp Alpha Nat Res* Alphamin Res Altima Res Alto Vent Alturas Minls Amador Gold Amex Expl Anconia Res Anglo-Can Mng Arcus Dev Grp Argus Metals Aroway Mnls Atlanta Gold Augen Gold AurCrest Gold Avala Res Azincourt Res Baja Mng Balmoral Res Bandera Gold Barker Mnrls Baroyeca Go&Si Bayswater Uran BCGold Beaufield Res Benton Cap Berkwood Res

Big North Grap Bison Gold Res Bitterroot Res Blue Rvr Res Bluestone Res Bravada Gold Cadillac Vent Canadn Arrow Canadn Int Mnl Canadn Orebods Canadn Plat Canamex Res Candente Coppr Cannon Pnt Res Canuc Res Canyon Copper Caracara Silvr Carlin Gold Carmax Mng Cassius Vent Castle Peak Mg Central Iron O Centurion Mnls China Mnls Mng Claim Post Res Clear Mtn Res Cliffmont Res Colibri Res Colorado Res Commander Res Commerce Res Compliance Eny Comstock Mng* Conquest Res Consol Energy* Copper North M Copper One Cornerstone Ca Crown Gold Curlew Lke Res Cypress Dev Darnley Bay Decade Res Denison Mines Denison Mines* Dorex Minls Duncan Park H Durango Res Dynasty Met&Mn Eagle Plains Ecuador G & C Edgewater Expl El Tigre Silvr Eldorado Gold* Eldorado Gold Ely Gold & Mnl Energizer Res Energold Drill Equitorial Exp Erin Ventures Europn Uran Rs Excellon Res Feronia Firestone Vent First Nickel Flinders Res Focus Graphite Foran Mng Fort St J Nick Fortune Mnrls Freeport Res Frontline Gold Garibaldi Res Geodex Mnrls Geologix Ex Gitennes Expl Glenmark Cap Global Hunter Gold Bulln Dev

Goldcliff Res Goldcorp* Golden Mnls Golden Mnls* Golden Queen Golden Share M Goldex Res Goldrea Res Grande Portage Great Panther Harmony Gold* Harvest Gold Heatherdale Rs Highland Res HiHo Silver Hunt Mng Intl Bethl Mng Intl Montoro R Intl Tower Hi* Intrepid Pots* Iron Tank Res Ivernia Jaxon Mnls Kermode Res Kettle River Kings Bay Gold Kiska Metals Kivalliq Enrgy Klondike Gold Lakeland Res Lara Expl Latin Am Mnls Laurion Mnl Ex Lomiko Mtls Luna Gold MacDonald Mns Makena Res Mammoth Res Manado Gold Marengo Mng Mason Graphite MDN Inc Medallion Res Metallis Res Metals Ck Res Midlands Minls Milner Con Slv Mindoro Res Mkango Res Mountain Boy M MPVC Mustang Minls Nebu Res Network Expl Nevada Expl Nevada Sunrise New Gold New Gold* New Millennium New Milln Iron New Nadina New Oroperu Rs NGEx Res Nighthawk Gold Nippon Dragon Noram Vent North Am En P* North Am En Pa North Am Pall North Am Tung Northcliff Res Northern Abiti Northern Freeg Northisle C&G Oceanic Iron O Olivut Res Opta Minls Oracle Mng Orbit Garant D

Orestone Mng Orex Minls Pac Imp Mines Pac North West Pac Potash Pac Ridge Expl Paget Mnls Paladin Energy Pan Global Res Peabody Enrgy* Peat Res Philippine Mtl Phoenix Gold Pilot Gold Platinex Precipitate Gl Purepoint U Red Moon Potsh Remington Res Resolve Vent Reunion Gold Reva Res Rhino Res* Rhyolite Res Riverside Res RJK Explor Rodinia Lithm Romios Gold Rs Sable Res Saint Jean Car Santa Fe Metls Santacruz Silv Satori Res Scorpio Gold SGX Res Solitario Ex&R Solitario Ex&* Sonora Gld & S Stans Energy Stellar Pac Vt Stillwater Mg* Stonegate Agri Strike Graph Sultan Mnrls Superior Coppr Taipan Res Tanzania Mnls Taseko Mines* Taseko Mines Tearlach Res Teck Res A Teck Res B* Terraco Gold Teryl Res Corp Thompson Creek Timberline Rs* Trevali Mng TriMetals Mng Trio Gold Corp TVI Pacific Typhoon Expl UEX Corp Ultra Lithium Uracan Res Uranium Res* US Energy* Valterra Res Vangold Res Vatic Vent Venerable Vent Victory Nickel Walter Energy* War Eagle Mg Western Pac Rs Westminster Rs Xmet Yamana Gold* Yamana Gold Zazu Metals

FOR DAILY MINING NEWS, VISIT WWW.NORTHERNMINER.COM

15-06-30 6:00 PM

8 JULY 6-12, 2015 THE NORTHERN MINER

Royal Nickel gets main environmental permit for Dumont Royal Nickel’s Dumont project

QUEBEC

ONTARIO Dumont Timmins •

An outcrop at Royal Nickel’s Dumont nickel project in northwestern Quebec. ROYAL NICKEL, From Page 1

potential offtake partners and pension and equity funds. He says the company will kick off the process later this year, and be “in a position to take the best capital from those sources to complete financing by year-end, and start construction early next year.” Analysts at U.K.-based Investec Securities, however, say financing Dumont might be challenging while nickel sells for US$5.60 per lb. “We are skeptical that financing will get off the ground in light of the persistently weak nickel price, for which we see little near-term reason for improvement,” they write. “Furthermore, whilst clearly a large deposit, the grades are low.” Selby says that he would love to see a higher nickel price, but that Swedbank, for one, has an investor base with a longer-term view that “doesn’t necessarily look at today’s nickel price.” He adds that the metal has “always been cyclical, but it’s amazing how many people forget about that at the top of the cycle and how many people forget about that at the bottom of the cycle.” He notes that nickel was US$2 per lb. in 2001, before climbing to US$24 per lb. in 2007. Nickel has traded on the London

Metal Exchange since the late 1970s, he continues, and has gone through seven cycles since then. “From trough to peak in the last five cycles, the price of nickel has gone up by 150–300%, depending on the cycle,” he explains. “If the trough price is $5.60 per lb., you’re basically looking at a peak price in the range of US$15 to US$20 per lb.” Selby notes that Dumont has a lifespan of more than three decades and won’t be at the commissioning stage until early 2018, or in production until late 2018. He also points out that even at the current US$5.60 per lb. nickel price, Dumont would make a margin of US$2 per lb., based on the recent US$3.85 per lb. cash-cost estimate in Dumont’s feasibility study (which were flexed to US80¢ to the Canadian dollar and US$60 per barrel oil). An earlier US$4.31 per lb. estimate used US90¢ and US$90 oil. The mining executive points to news of Independence Group’s recent US$1.4-billion acquisition of Sirius Resources, which is building a vast nickel mine in Western Australia. Sirius discovered the Nova nickel and copper deposit in the Fraser Range in Western Australia’s Goldfields in

ROYAL NICKEL

2012. “Independence Group paid US$1.4 billion to acquire Sirius Resources,” Selby says. “It is highgrade, but in the middle of nowhere in Western Australia, so its cash cost is about the same as us.” He dismisses Investec Securities’ caution about Dumont’s low grades. “All we’re doing is taking the same scale as Osisko and Detour Gold did with their large, lowgrade deposits in the Abitibi to our low-grade nickel deposit in the Abitibi.

Sudbury •

nickel in the measured and indicated categories, and another 2.9 billion lb. nickel in the inferred category. Dumont has a measured resource of 372 million tonnes grading 0.3% nickel; an indicated resource of 1.3 billion tonnes averaging 0.3% nickel; and an inferred resource of 500 million

‘All we’re doing is taking the same scale as Osisko and Detour Gold did with their large, low-grade deposits in the Abitibi to our low-grade nickel deposit in the Abitibi.’ — Mark Selby, president and CEO, Royal Nickel “We’ll be the fifth-largest nickel sulphide mine in the world,” he says. “We’ll be one of the largest base metal mines in Canada, right up there with Highland Valley and Voisey’s Bay — so that’s pretty good company to be in.” Dumont is the largest nickel sulphide discovery since 1960, Selby says, with 9.8 billion contained lb.

tonnes of 0.3% nickel. Dumont’s ore will be processed into a high-grade nickel concentrate and shipped for refining elsewhere. The mine will not have acid-generating rock or tailings. A 2013 bankable feasibility study envisioned a 52,500-tonneper-day milling operation, growing to 105,000 tonnes per day in

★

• Rouyn-Noranda

Ottawa

year six to produce 113 million lb. nickel a year. The economic analysis forecast a $1.1-billion after-tax net present value at an 8% discount rate and a 15.2% after-tax internal rate of return. Payback is estimated in six years. Stefan Ioannou of Haywood Securities says Royal Nickel is a company “best suited for investors with a ‘stronger-for-longer’ nickel-price outlook,” and writes in a research note that “Royal Nickel/Dumont offers a compelling growth opportunity for a number of base metal majors seeking a large, [permitted] advanced-stage project to add to their portfolio. Hence, we look to corporate activity as a wildcard catalyst that could drive the company’s market valuation higher.” At press time Royal Nickel traded at 39¢ per share within a 52week range of 26¢ to 67¢ per share. The company has 120 million basic shares outstanding, for a $36-million market capitalization. Salman Partners has a 12-month target price on the stock of $1.30 per share.

ROYAL NICKEL

At the permit announcement in Launay, Quebec in late June, from left: Guy Bourgeois, parliamentary assistant to the Quebec Minister of Energy and Natural Resources; Mark Selby, Royal Nickel president and CEO; David Heurtel, Quebec Minister of Sustainable Development, Environment and the Fight against Climate Change; Pierre-Philippe Dupont, Royal Nickel manager of sustainability; and Luc Blanchette, Quebec Minister for Mines.

TNM July 06 Issue.indd 8

15-06-30 6:00 PM

THE NORTHERN MINER

JULY 6-12, 2015

Finding the Right Employer How Do You Know When Mission Accomplished? I normally write with employers in mind and how they can attract the best qualified people to their companies. However, when candidates are better informed about an employer or the interview process this will benefit both sides. The more informed a candidate is about selecting an employer the sooner he or she can start the job, and it is less likely that they will run into frustrating surprises three months into the role. No one wants a relationship to sour because something was overlooked, forgotten or thought too obvious to mention during the interview process. But before we get to interviews let’s consider whether you are a passive or an active job seeker. By Paul Pittman A passive job seeker is someone content in their current role but open to new opportunities if they should arise. An active seeker is someone who is a lot more eager to find a new role because they are unhappy in their current position or without work. The first step, which ever category you fall into, is to decide what perfect looks like; the role, the companies, the industry and the terms and conditions. Write this down and pin it to your notice board or fridge. Any offer you receive should be compared with it and the trade-offs considered - no offer will be perfect. How eager you are to find a new role, the more willing you will be to give up some of your goals ......but never too much. Active job seeking takes much more effort and should be considered a full time job. You have to network and do research with the objective of gaining introductions to the companies on your target list with the aim of side stepping the search process - once a search is in the hands of a recruiter it is further out of your control. Don’t be perturbed if you are asked to attend a number of interviews. You are being tested for how you will fit with the team. These are likely peers and you need to consider it a two way process - like a good conversation. Be yourself - you need to make sure that you feel you fit and will be happy. Make sure you ask a couple of the same questions at each interview. Compare the answers to see if colleagues look at their work place in the same way. Is there a consistent attitude and outlook? Nothing should be off your list but don’t begin by asking about salary.

The last thing you should want to be is a square peg in a round hole. Many companies will also ask you to complete a screening questionnaire, probably online. This is another useful tool that should serve you as much as the employer. It is designed to identify the values and competencies that you exhibit and to ensure that they align with those of the organization. The last thing you want to be is a square peg in a round hole. If you are curious ask to see where you will be working too. Ask about the on boarding process and what it will entail. An immediate, clear response will indicate an organization eager to get a new recruit off to a flying start.

Industrial Hygiene / Ventilation Specialist North Bay, Ontario Online Reference No: 62066 Utilizing your knowledge of industrial hygiene and mine ventilation systems, you will coordinate the activities of Mining Industry Technical Advisory Committees while working with other WSN staff in developing and delivering programs and products for the industry.

You will hear the term engagement a lot these days and simply put, it means a happy work team. Happy workers are more productive, more creative and are absent less. Better employers will strive to achieve this. An important item that can emerge once an employee is on board is that the new role may not contribute to his or her well being. In fact, such a risk can be so significant that it could potentially spill over into how that person works with their team and serve to undermine a whole department’s productivity. While we are on the subject of negotiation let’s talk pay. I can be happy I hear you say, just pay me more, lots more. But employment is not a game of what you can get away with in negotiation. In the pursuit of engagement many employers are moving away from negotiated pay because of the impact different pay levels have on internal equity and team spirit. This is not a bad thing. You should take comfort from the fact that everyone is paid fairly and based upon the same principles. You won’t want to find out that your close colleague is paid significantly more. Equally, if it is important to you that you fit in, being the standout in terms of compensation will not help that. Higher negotiated pay when starting a new role is pretty much an illusion anyway since over time that will erode through lower annual increases to bring the new hire in line with everyone else. When the offer is received make sure the terms agree with what has been discussed and that other terms are clear and unambiguous. In fact an offer in plain language rather than legalese suggests an open, transparent culture. Ask for clarification where necessary. Deciding whether to take a new role is a research project involving input from different sources that you need to compare. If the signals that you are getting suggest that a target company is not offering the culture that you want don’t hesitate to start again. Better take a little more time now than be unhappy for much longer. Equally, don’t dismiss opportunities, that arise in organizations that you haven’t considered - just undertake some more due diligence. Happy hunting. — Paul Pittman is the senior partner and founder of The Human Well (www. thehumanwell.com), a collaborative HR consulting practice located in Oakville, Ont., with clients globally. He previously held executive HR positions with Alcan, RJR Nabisco/Japan Tobacco, Laidlaw and Massey-Ferguson, and was the Canadian HR practice leader for Arthur Andersen. He has lived in the U.K., Canada and Switzerland, and managed pension, benefit and compensation plans globally.

Geophysicist Online Reference No: 62066

A unique opportunity exists to apply your knowledge and serve the Ontario mining industry by acting as a catalyst for positive change in industrial hygiene and mine ventilation practices. Our mission includes the delivery of underground ventilation and industrial hygiene programs and services that meet industry safety needs including providing auditing, consultation and training services to clients.

Regional Mining Sales Manager, Quebec & Ontario Online Reference No: 61678 We are looking for the right candidate to plan, coordinate and manage all mining sales and technical services for Quebec and Ontario, Canada. This role will focus on developing and expanding customer relationships, understanding individual customer requirements and ensuring we meet their needs.

For full job details visit MINING-JOBS.NET and enter the Online Reference No. in the search field

TNM July 06 Issue.indd 9

15-06-30 6:00 PM

JULY 6-12, 2015

THE NORTHERN MINER

Geophysicist GEM Systems Inc. Online Reference No: 61420 3 – 5 Years Experience wanted A.S.A.P. for sales/marketing. Excellent salary/benefits, internal sales commission and profit sharing. Send resumes to: Info@Gemsystems.ca

Metallurgist Key Lake Operation Online Reference No: 62075 You will assist operations personnel in process monitoring, reporting and testing as well as investigating process enhancements. You will be exposed to and gain experience in all areas of the milling process including ore blending, grinding, leaching, counter-current decantation, solvent extraction, impurity and uranium precipitation, drying, packaging and waste-water treatment.

Mechanized Raise (Alimak) Leaders ID, Papua, ID Online Reference No: 61992 The primary role of the Alimak Leader is to maintain and construct underground installations, performing various tasks such as erecting work platforms, scaling loose rock, drilling, loading and blasting rock and ensuring that the drilling patterns follow the mining plans.

Logistics Supervisor Ontario, CA Online Reference No: 62050 The Logistics Supervisor is responsible for managing logistics, warehousing and staging activities within the Supply Chain department. The position also is responsible for coordinating domestic and international trade, transportation, customs regulations and the Company’s project requirements.

RECRUIT SMARTER WITH MINING JOBS The Northern Miner’s new section dedicated to recruiting in mining

Join our multidiscipline engineering group and be part of a team delivering design-build solutions for technically challenging underground mine projects around the world. This leadership position provides direction, mentorship and supervision to engineers on our Civil/Structural team and requires a strong and effective communicator.

Planner, Maintenance (Electrical) Saskatchewan Online Reference No: 61986 You will be responsible for understanding, planning and coordinating the maintenance work requirements to ensure they are efficiently scheduled to deliver maximum equipment, manpower and facility availability to the production department.

Jumbo Operator ID, Papua, ID Online Reference No: 61982 P.T. Redpath Indonesia has an immediate opening for a Jumbo Operator to join their dynamic team at our project in Indonesia.

Site Services Operator Online Reference No: 61910

Associate Director, Global Mining Management Toronto, Ontario, Online Reference No: 61979 This position is responsible for making recommendations to further the development and teaching of the academic curriculum associated with the Global Mining Management MBA Program (“GMM”). In addition, the Associate Director will be responsible for making recommendations to develop and then execute both the GMM Communications and Outreach Strategies and Associated Policies.

Sr. Discipline Engineer – Civil/ Structural North Bay, Ontario Online Reference No: 62033

The Project Controller (senior) is responsible for the planning and performance monitoring of a group of assigned projects, including providing guidance to operational managers through the implementation of project controls processes, procedures and contracts.

One listing is all you need Print Edition.

Journeyperson Carpenter/Scaffolder Saskatchewan Online Reference No: 61914 Cameco is looking for a motivated and ambitious individual to join the operational services team at the world’s second largest high grade uranium deposit, located at the Cigar Lake operation in northern Saskatchewan

Instrumentation Technologist Cigar Lake Operation, Saskatchewan, Online Reference No: 61889 Cameco is looking for motivated and ambitious individuals to join our maintenance team at the world’s second largest high grade uranium deposit, located at the Cigar Lake operation in northern Saskatchewan.

Circulated to TNM 20K+ readership

4 INDUSTRY JOB BOARDS As a member of the major projects team in the project delivery office, you will be responsible for developing 3D Models and 2D CAD drawings for structural design on major projects executed within Cameco.

CANADIAN Mining Journal

EMAIL sales@mining-jobs.net or CALL 416-510-6772 AND START RECRUITING SMARTER TODAY.

Intermediate to senior level Civil/ Structural and Mechanical Engineers. Kamloops, BC Online Reference No: 61706 Nordmin Engineering Ltd. is currently seeking qualified candidates to fill the roles of Intermediate to senior level Civil/Structural and Mechanical Engineers based out of their recently opened office in Kamloops, B.C.

Senior Structural Technologist Saskatoon Online Reference No: 61884

Manager Langly, BC Online Reference No: 61628 Working within Cigar Lake’s environment department, you will be responsible for supervising the daily activities of the environment technicians by providing guidance, training and priority setting of their daily duties, as well as developing and delivering technical training to environment technicians and site employees as required.

Regional Director Ministry of Energy and Mines Victoria (Southwest Region) Online Reference No: 61675

The role of the Ministry of Energy and Mines’, Mines and Mineral Resources Division is to stimulate the growth of the mining industry by advancing globally competitive polices and geoscience and ensuring safe and environmentally responsible mineral exploration and mine development and production.

Chief Engineer Klondex Mines Winnemucca, Nevada, USA Online Reference No: 61407 Supervision of all technical personnel related to Mine Engineering, including contractors.

For full job details visit MINING-JOBS.NET and enter the Online Reference No. in the search field

TNM July 06 Issue.indd 10

15-06-30 6:00 PM

THE NORTHERN MINER JULY 6-12, 2015 11

Molycorp strikes restructuring deal with creditors

PHOTO BY TRISH SAYWELL

Molycorp’s Mountain Pass rare earth element mine, as seen in 2011. Mountain Pass is located on the south flank of the Clark Mountain Range in southeastern California. MOLYCORP, From Page 1

‘yes’ — prices were reasonable and getting slightly better, and exChina buyers remained adamant that they would prefer supply, albeit at market rates, from nonChinese producers,” he says. “Now, I am not so sure. Free-on-board China prices have dropped and are dropping further, because buyers seem wililng to take what they need from Chinese firms. If you ask the buyers whether they will take material from non-Chinese sources, the answer is that they absolutely will, providing those sources can get them material at a discount to the price they are currently paying to the Chinese.” That doesn’t leave much room for margins to justify building any new mines, Hykawy continues. “There are some end-users that would support the right new projects, but the number of such supporting entities is not large.”

this has been passed along to end users at this time.” As for Molycorp’s financial troubles, Hatch says he hopes the restructuring will lead to a more stable financial structure for the company so that Molycorp can better plan for the Mountain Pass rare earth mine. “Right or wrong, the psychology of the capital markets is such that the near-term success of the nonChinese rare-earth sector, at this moment in time, is very much tied to the fortunes of Molycorp.” Jim Sims, Molycorp’s vicepresident of operations, did not return an emailed request for comment by press time. In the three months ended March 31, Molycorp’s Mountain Pass facility produced 1,479 tonnes of rare earth oxide equivalent, an 11% increase over the fourth quarter of 2014. The company achieved an average selling price of

‘Right or wrong, the psychology of the capital markets is such that the near-term success of the non-Chinese rare-earth sector, at this moment in time, is very much tied to the fortunes of Molycorp.’

plant and dispose of mine tailings through a paste-tailings system. Geoff Bedford, Molycorp’s president and CEO, said in a press release June 25 that the company “expects to exit Chapter 11 with an appropriate financing framework to suppport our business going forward.” He also noted that the Chapter 11 filings did not include Molycorp’s operations in Europe and Asia, which he said are cash-

flow positive. He said that all of the company’s facilities in North America and around the world “will continue operating as usual.” Molycorp employees are working their usual schedules, and the company says that buying goods and services will continue, “with all purchases made after filings are granted a special administrative priority under the law.” Molycorp has issued a restruc-

turing plan term sheet that outlines the reorganization that management expects to pursue. The term sheet provides for the discharge of Molycorp’s more than US$700 million in unsecured notes, and calls for holders of the debtors’ US$650 million in 10% senior secured notes “to have their debt exchanged for a majority equity stake in reorganized Molycorp.”

Career Opportunities CAREERS ADVERTISING RATES $12.65 per agate line. Minimum size 2 columns x 1” $354.20. Closing date is 10 days prior to publication date. All Cdn. orders subject to applicable taxes. For further Careers advertising information contact: Joe Crofts (416) 510-6816 - jcrofts@northernminer.com, Dave Chauvin (416) 510-6824 - dchauvin@northernminer.com Toll free North America: 1-888-502-3456, (ext. 43729 / 43730) Fax: (416) 447-7658

— Gareth Hatch, founding principal, Technology Metals Research Latest Jobs

Hykawy notes that the biggest issue in the rare earths sector is how to make reasonable margins at present or lower prices. The analyst reasons that if the industry outside China can’t figure out how to drop its costs to levels that at least make it cost-competitive with the Chinese industry, there may never be a complete rare earths industry outside of China. For the time being, rare earth prices are the same as those used domestically in China, as a result of the removal of export tariffs in May, notes Gareth Hatch, founding principal of Technology Metals Research. “A new resource tax has been applied to upstream concentrates,” he tells The Northern Miner, “but there is little evidence that the cost for

TNM July 06 Issue.indd 11

Full Time

US$30.97 per kilogram, compared with US$36.91 in the fourth quarter of 2014, in a 16% decline. Net revenues for the quarter fell 8% to US$106 million. In April, Molycorp announced that it would supply rare earth materials to Shin-Etsu Chemical Co., which will produce the rare earth magnets that Siemens AG will use in its high-efficiency, direct-drive wind turbine generators. Molycorp reported that it was picked to supply rare earth materials partly because of the Mountain Pass facility’s environmental and process innovations. These include its ability to recycle water, regenerate the chemical reagents needed in rare earth production, get power from a high-efficiency, natural gas cogeneration power

15-07-02 8:30 AM

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GoviEx pushes GOVIEX, From Page 1

83% uranium recovery. Estimated cash costs are US$26.39 per lb., excluding royalties, or US$33.10 per lb., with royalties. While the firm would mine an average 0.1% U3O8 grade, Major says the leach feed grade will be higher, as the company would use a radiometric sorter, among other things, to separate the ore. “The trick is that we apply some technology ... our actual feed grade into our leach tanks is 0.5%. We basically go from a 4,000-tonne-a-day mine to 800 tonnes a day, which goes into our leach tanks, with 97% of the uranium still contained,” he said. Initial costs to get the project up and running is US$340 million, with total capital estimated at US$646 million. GoviEx is waiting to receive the mining permit before lining up a mix of debt and equity. Given the company’s strong shareholder base, financing shouldn’t be a problem. Its largest shareholders include: chairman Govind Friedland (Robert Friedland’s son) with 21.3%; Toshiba Corp., the owner of nuclear technology firm Westinghouse, at 19.4%; and Canada’s largest uranium producer Cameco (TSX: CCO; NYSE: CCJ) at 8.5%. However, the Madaouela project needs a higher uranium price than

the current spot price of US$36.50 per lb. U3O8 to work. Using a US$65 per lb. price and an 8% discount rate, the prefeasibility study estimates an after-tax net present value of US$184 million and an 18.5% internal rate of return. To break even, Madaouela would need a US$50.50 per lb. U3O8 price. While Major says he’s “not going to be a screaming bull” on nearterm prices — he predicts uranium will trade at US$45 per lb. in 2016 — he does foresee a major supply deficit in the market after 2020 that will significantly lift prices. Uranium demand could rise on the back of growing Chinese demand for reactors, the restart of Japanese reactors and India’s appetite to increase its nuclear capacity, Major argues. China intends to expand its reactor count from 21 in 2014 to 132 in 2030. While the restart of reactors in Japan has been slow, the country still targets 10% nuclear energy in its long-term power mix. If all goes to plan, GoviEx could start production at Madaouela in late 2018 or early 2019, just in time for the uranium price to recover and reach the long-term consensus of US$70 per lb. GoviEx closed at 13¢ per share. It ended the March quarter with US$2.2 million in cash.

GOVIEX URANIUM

Areva’s Somair uranium mine, 10 km from GoviEx Uranium’s Madaouela uranium project in Niger.

GOVIEX URANIUM

A drill site GoviEx Uranium’s Madaouela uranium project in Niger.

TNM July 06 Issue.indd 13

Iamgold cuts production outlook due to Westwood rock bursts

Iamgold’s Essakane gold mine in Burkina Faso. BY SALMA TARIKH

Toronto-based gold producer Iamgold (TSX: IMG; NYSE: IAG) has trimmed its 2015 companywide production forecast by 5% due to a “localized seismic event” at its Quebec-based Westwood gold mine. Westwood is on the Doyon property, near the past-producing Doyon mine, 40 km east of RouynNoranda and 80 km west of Vald’Or. It reached commercial production last July, and is ramping up to design capacity. But the relatively new underground mine has seen its fair share of problems. Iamgold has reported three rock bursts so far, with the latest occurring on May 26. The fallen rock trapped nine workers for up to 18 hours, but all were safely evacuated and unharmed. Iamgold suspended mining in the affected area until it fully reviewed the ground conditions, but says gold production in the mill was unaffected due to Westwood’s ample stockpiles, and many operating underground stopes. While the mid-tier producer is still assessing the impact on costs, on June 29 it nearly halved Westwood’s annual production to 60,000 to 75,000 oz. gold, down from 110,000 to 130,000 oz., explaining the incident will have a “more significant impact on 2015 production than originally indicated.” As a result, Iamgold lowered the midpoint of its company-wide 2015 forecast by 5% or 42,500 oz. It now expects to churn out between 780,000 and 815,000 oz. gold, down from 820,000 to 860,000 oz. The

new guidance includes an increase of 10,000 oz. gold, mainly from its joint-venture Sadiola mine in Mali, slightly offsetting the lost ounces at Westwood. National Bank Financial analyst Steve Parsons writes that “all reported rock bursts at Westwood to date (08/13, 01/15, 05/15) took place in the vicinity of levels 104-06 to -10, at a depth of around 900 metres,” adding that investors might question the mine’s stability. In a release, Iamgold’s president and CEO Stephen Letwin said that this area of the Abitibi was prone to seismic activity, and that the company intends to “invest further in the development of the mine to ensure a safe operation.” Letwin says he’s confident the mine could become Iamgold’s “lowest-cost” producer. Parsons, however, cautions that the “implications on near-term costs and mid-term production” may not look good for Iamgold. He models total cash costs at Westwood will increase to US$1,286 per oz., from US$847 per oz. This pushes up his previous company-wide total cash cost estimate by 4% to US$859 per oz. (Parsons’ model differs from Iamgold’s 2015 original cost guidance of US$825 to US$865 per oz. for its three owner-operated mines, and US$850 to US$900 per oz. for all of its mines.) The revised cost guidance should be out on Aug. 5, with the miner’s second-quarter results. Raymond James analyst Phil Russo writes that Iamgold remains his “most highly levered name to gold,” and that the reduced annual

IAMGOLD

production and anticipated change in costs could weaken the company’s robust cash position, given current low spot prices. Parsons anticipates Westwood’s importance as Iamgold’s sole Canadian producing asset is “partially tarnished” until the miner resumes access to level 104, or operates without incident into 2016. He has also trimmed Westwood’s estimated production in 2016 and 2017. Bob Tait, Iamgold’s vice-president of investor relations, says that while parts of level 104 are opening, the company does not expect a lot this year. “We could be pleasantly surprised and get access — obviously there is rehabilitation work going on, and ultimately it’s up to the CSST, the provincial safety authority. But the rest of the mine is functioning.” Tait says Iamgold will be cautious at Westwood, while keeping its mining methods. For example, the company has changed the spacing between sublevels to 36 metres from 18 metres previously to add stability. Despite the growth potential Westwood could offer with its projected 20-year life, Russo writes that the mine’s “early challenges” could provide the market a reason to discount the asset, “particularly given the market’s current aversion for assets unproven.” (Westwood represents 27% of Russo’s net asset value for Iamgold.) He rates the company as a “market perform.” Parsons has reduced his $3.25 target to $2.90 per share, but has a “sector perform” rating.

15-06-30 6:01 PM

14 JULY 6-12, 2015 THE NORTHERN MINER

Strike freezes production at Mandalay’s Cerro Bayo mine Mandalay Resources (TSX: MND) has suspended operations at its Cerro Bayo silver-gold mine in southern Chile, after unionized workers went on strike. The union initiated the strike on June 23 to improve its negotiating position in reaching a new collective agreement. Workers have also blocked access to Cerro Bayo. The company says it’s too early to say how long the strike will last and what its impact would be on production. But analysts predict the strike will likely be short-lived. “In most cases, these types of strikes are generally resolved within one to two weeks, with little impact on guidance,” Raymond James’ analyst Chris Thompson writes in a note. Cerro Bayo has extra mill capacity of 200 tonnes per day that could help make up for any lost production later, he adds. Mandalay is mining a lowergrade vein at Cerro Bayo, which will slightly increase cash costs. Desjardins analyst Michael Par-

MANDALAY RESOURCES

Mandalay Resources’ Cerro Bayo silver-gold mine in southern Chile. kin estimates that lower output from the vein could actually lower the company-wide cash cost for 2015. Even if the strike were to last

a month, Parkin estimates goldequivalent production would fall by 4,000 oz. — hardly affecting his financial estimates for Mandalay.

However, BMO analyst Andrew Kaip cautions that a longer strike could put the company’s 2015 guidance at risk. For the year, Mandalay fore-

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casts saleable production of 23,000 to 27,000 oz. gold and 2.7 to 3.1 million oz. silver from Cerro Bayo. But it expects more gold ounces this year from its other two operations: the Bjorkdal gold mine in northern Sweden; and the Costerfield gold-antimony mine in Australia. Bjorkdal is set to produce 46,000 to 52,000 oz. gold and Costerfield should churn out 32,000 to 37,000 oz. gold, as well as 3,200 to 3,500 tonnes of antimony. Kaip previously expected Cerro Bayo to account for 36% of Mandalay’s estimated 2015 revenue and 38% of the total project net present value. He says each one-month delay could reduce the company’s net asset value by 0.4–0.5%. Mandalay shares were largely unaffected by the strike action, recently trading at 96¢. Kaip has a $1 target and a “market perform” rating on the stock. Parkin rates Mandalay as a “top pick,” with a $1.60 target.

EVENT Jul 8 Red Cloud’s summer Mining Showcase & Networking Reception Le Centre Sheraton Montreal, QC info@redcloudmining.com (416) 9084638 www.redcloudmining.com Sep 24-25 Canadian Investor Conference Metro Toronto Convention Centre, ON. info@cambridgehouse.com (604) 6874151; 1-877-363-3356 cambridgehouse. com Oct 7-8 AEMQ XPLOR 2015 Place Bonaventure, QC info@aemq.org (819) 762-1599; 1-877-762-1599 http://aemq. org/EN/XPLOR Nov 18-20 Manitoba Mining & Minerals Convention Winnipeg, MA Email: convention@gov.mb.ca (204) 945-2691; 1-800-223-5215 www.manitoba.ca/iem/ convention

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Jul 06 Jul 06 Jul 06 Jul 06 Jul 06 Jul 06 Jul 07 Jul 07 Jul 07 Jul 08 Jul 08 Jul 09 Jul 09 Jul 09 Jul 10 Jul 10 Jul 13 Jul 15 Jul 15 Jul 15 Jul 15 Jul 16 Jul 17 Jul 17 Jul 21 Jul 21 Jul 22 Jul 22 Jul 22 Jul 22 Jul 23 Jul 24 Jul 27 Jul 27 Jul 29 Jul 30 Jul 30 Jul 31 Aug 05 Aug 06 Aug 19 Sep 25

Kerr Mines Alturas Minerals United Coal Holdings Lakeside Minerals Crocodile Gold Newmarket Gold Pinetree Capital Peruvian Precious Metals Wolverine Minerals Copper Creek Gold Western Pacific Resources Augustine Ventures VMS Ventures Cortez Gold Desert Gold Ventures Goldbank Mining Happy Creek Minerals PolyMet Mining Corp. Dominion Diamond X-Terra Resources California Gold Mining American Vanadium Great Bear Resources Grenville Gold Golden Predator Mining Silver Predator Gold Standard Ventures Hi Ho Silver Resources New Oroperu Resources Zena Mining Megastar Development SouthGobi Resources Belmont Resources Brixton Metals Laurion Mineral Exploration Uranium Energy Regency Gold Sonora Gold & Silver Canaccord Genuity Group Golden Cariboo Resources West Melville Metals Wellgreen Platinum

AS AGS AGS AS S S A A AGS AGS AG AS AG S S AGS AG AS AS AGS S AGS AG AGS AS AGS AG AGS AG AGS AG AS A AGS AS A AGS AG AG AG AG AGS

MEETINGS LEGEND A – Annual E – Extraordinary G – General S – Special

15-06-30 6:01 PM

THE NORTHERN MINER JULY 6-12, 2015 15

Barrick moves towards leaner structure

BARRICK GOLD

Barrick Gold’s 47.5%-owned Porgera gold mine in Papua New Guinea. VANCOUVER — Earlier this year Barrick Gold (TSX: ABX; NYSE: ABX) outlined a “back to the future” strategy that would see it become a “leaner and more agile” operator, focused on a core portfolio of assets and development upside at a promising collection of greenfield sites. The company has committed to become more geographically focused in terms of its asset base and seems on track to streamline its balance sheet and bring value back to shareholders. Barrick aims to reduce its debt by US$3 billion this year. So far the company has raised US$848 million by selling its Cowal gold mine Australia and a 47.5% interest in the Porgera mine in Papua New Guinea. Barrick appears to be on strong financial footing, with US$2.3 billion in cash and US$4 billion in undrawn credit facilities. Most of the company’s debt is long-dated, with US$900 million due through the end of 2017. In mid-June BMO Capital Markets analyst Andrew Kaip initiated coverage on Barrick, with an “outperform” stock rating and a US$16-per-share price target. The company’s stock has jumped nearly 10% year-to-date en route to a $13.77-per-share close at press time. BMO Markets notes that recent reports indicate Barrick is in advanced bidding for a 50% stake in its Zaldivar copper mine in Chile, which Kaip says could fetch up to US$1 billion. The sale would help Barrick hit twothirds of its debt-reduction target. Barrick has 15 mines in nine countries, with its annual production forecast pegged at between 6.2 million and 6.6 million oz. gold at all-in sustaining costs ranging from US$860 to US$895 per oz. The company has earmarked a group of “cornerstone mines” that account for 60% of its attributable production, with all-in sustaining costs of US$725 to US$775 per oz. The group includes: the Cortez and Goldstrike mines in Nevada; the Lagunas Norte operation in Peru; the Veladero mine in Argentina; and the Pueblo Viejo mine in the Dominican Republic. “We see a larger opportunity for Barrick to divest non-core assets and partial divestitures of copper operations that could raise US$4.8 billion for debt repayment,” Kaip wrote on June 15. “Under this scenario, [the company] would retire close to half the US$13 billion in debt and become a leaner, more profitable miner, albeit with a production profile that would lie below Goldcorp (TSX: G; NYSE: GG) on a gold-equivalent basis.” During the first quarter Barrick

TNM July 06 Issue.indd 15

produced 1.39 million oz. gold at all-in sustaining costs of US$927 per oz., and generated US$316 million in operating cash flow. The company has already reduced capital expenses by US$200 million this year, and reports that “further reductions are expected, as it implements new capital allocation frameworks.” When it comes to growth, Bar-

rick is looking to return to its roots in Nevada. The company has four prefeasibility studies due this year on projects near its Cortez operation, 100 km southwest of Elko in Lander County. Two of those studies will expand current operations, including: developing another shaft at the Turquoise Ridge mine for US$225 million, which could double output to

500,000 oz. gold per year; and expand underground mining at Cortez below permitted levels. The company is also working towards a US$800-million development of a multi-million ounce gold resource at its Goldrush project and building a US$250-million heap-leach operation at its Spring Valley asset. “Excluding any further divesti-

ture, our analysis suggests that Barrick will maintain production levels above 6 million oz. gold through to the end of 2017,” Kaip added. “Consolidated production is forecast to drop below that level in 2018. Production levels above 6 million oz. could be realized in early 2020, with the development of the Goldrush deposit ... [all-in sustaining costs] are forecast to remain relatively flat.” But shareholders seem to be holding Barrick management to account. At the company’s annual general meeting in April, 75% of investors voted against its executive compensation plan. CEO John Thornton told attendees that management heard the message “loud and clear.” This marks the third straight year Barrick has faced such a vote. “The new ‘back to the future’ strategy appears to have resonated with investors, and increased confidence in management’s ability to deliver on the new targets,” Kaip concluded. Under BMO Research’s basecase scenario, Barrick could meet capital requirements and debt repayment obligations at US$1,250 per oz. gold.

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16 JULY 6-12, 2015 THE NORTHERN MINER

PotashCorp aims to regain market influence with K+S bid VANCOUVER — Canadian giant Potash Corp. of Saskatchewan (TSX: POT; NYSE: POT) is considering a mega deal for Germany’s K+S Aktiengesellschaft that could materially change the landscape in the fertilizer business. The world’s largest potash producer announced on June 25 that it had made a “private proposal” to K+S that sets the stage for higher-level negotiations. With the deal, PotashCorp could reassert some of its historic dominance over the fertilizer market, since two combined companies would account for 30% of global potash production. Also of intersest to PotashCorp is K+S’s ownership of the Legacy potash project in Saskatchewan, which it is developing for $4.1 billion. K+S reported in March that it had secured 75% of the development capital for the new mine. Legacy could produce up to 3 million tonnes of potash annually after it hits production next year. One issue for PotashCorp is that K+S is not a mem-

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Saskatchewan potash industry and exports an average 9 million tonnes annually. PotashCorp accounts for the largest part of that total, with the rest divided between the other two members Mosaic (NYSE: MOS) and Agrium (TSX: AGU; NYSE: AGU). The global potash market was pretty much a duopoly between Canpotex and the Belarusian Potash Co. (BPC), a second consortium that exported Belarusian (Belaruskali) and Russian potash (Uralkali), until the BPC marketing group fell apart two years ago. There has been speculation that Canpotex might be in danger of dissolving in the face of competing projects like Legacy and BHP Billiton’s (NYSE: BHP; LSE: BLT) large-scale Jansen mine, which is also in Saskatchewan. “I think the answer is yes,” PotashCorp president and CEO Jochen Tilk said during a presentation in late May, when asked if Canpotex could survive if K+S operated outside the cartel.

port facilities, storage facilities — so there is a benefit. So my view is that yes it can, and I think it will. And how it will come together at the end depends very much on K+S and how that plays out,” he elaborated. It appears that, in the end, PotashCorp doesn’t want to take the chance that such a large mine might operate outside its market influence and in its own back yard. According to analysts at Canaccord Genuity the deal could value K+S in excess of US$8.5 billion. PotashCorp could mine 9 million tonnes of potash this year, while K+S produces 3.2 million tonnes annually. BMO Capital Markets analyst Joel Jackson wrote in a research comment that gaining control of K+S’s German assets, along with Legacy, could “give [PotashCorp] back the influence it seems to have lost.” On June 29 BMO Research reiterated a “market perform” rating on PotashCorp, along with a $35-per-share price target. PotashCorp should be strategi-

The deal would allow PotashCorp to reassert some of its historic dominance over the fertilizer market.

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“The question is really whether Legacy could be in Canpotex, or whether it should be independent. I can’t answer that because I can’t speak for our colleagues at K+S. Canpotex is not just an arrangement among three players. It’s got infrastructure. It owns thousands of railcars. It’s got some of the best

cally positioned to fund an offer for K+S. The company recently invested $8.5 billion to expand nameplate capacity to 19 million tonnes by 2018. The company reported first-quarter earnings of $370 million, or 44¢ per share, which marks an improvement from the $340 million it registered during the same period in 2014.

K+S Aktiengesellschaft chairman and CEO Norbert Steiner. Higher prices and lower pertonne cost of goods sold in potash were the primary contributors, more than offsetting rises in Saskatchewan potash taxes and weaker nitrogen sales volumes. PotashCorp reported it saw price ranges from US$350 to US$400 per tonne potash during 2014. The company produces at US$96 per tonne. PotashCorp has an annual estimate for gross margins ranging from $1.5 billion to $1.8 billion, on the back of sales volumes between 9.2 million and 9.7 million tonnes of potash. Shares have traded within a 52-week window of $35.24 to $47.10, and closed at $38.73 at press time for a $32.3-billion market capitalization. Representatives from PotashCorp and K+S did not immediately respond to request for comment.

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TNM July 06 Issue.indd 16

K+S Aktiengesellschaft’s Legacy potash project under construction in Saskatchewan.

K+S AKTIENGESELLSCHAFT

15-06-30 6:01 PM