The Northern Miner July 13 2015 Issue

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Kaizen Discovery $3.99 • JULY 13-19, 2015 • VOL. 101, NO. 22 • SINCE 1915

Auryn to buy North Country Gold The Committee Bay If the past is any guide, project in the eastern Shawn Wallace has a Arctic includes 662 sq. knack for spotting good km along the Commitprojects. Last year, the tee Bay Greenstone mining executive sold a Belt, 180 km northeast of company that he coAgnico Eagle Mines’ founded called Cayden producing MeadowResources to Agnico bank gold mine, and 150 Eagle Mines ( T S X : AEM; NYSE: AEM) for a BY TRISH SAYWELL km north of Agnico’s Amaruq gold project. tidy $205 million. And “When we entered today, a second company he co-founded, called Asanko into the joint venture with them, Gold (TSX: AKG; NYSE: AKG), is we had done a bunch of due dilibusy building a gold mine in Ghana. gence to get to the point where we S o w h e n W a l l a c e s a y s wanted to commit to that extent,” that North Country Gold ’s Wallace says in a telephone inter(TSXV: NCG) Committee Bay view from Vancouver. “Since then project in Nunavut is probably the we’ve done a whole prospectivity most prospective land package he study ... and as we got more into has ever come across in his 25- the data, and brought in a whole year career in the business, inves- suite of experts, it was apparent to tors might want to sit up and take us that this belt was much more prolific than we had believed it notice.

In March, Wallace’s Auryn Re- was.”

“Most of us feel it’s probably the sources (TSXV: AUG; US-OTC: GGTCF) completed a joint-ven- most prospective opportunity to ture deal with North Country to find gold that most of us have had earn a 51% interest in Committee in our entire careers,” he continBay by spending $6 million by Sep- ues. “The rationale for doing this tember 2017. Auryn recently an- is that we’re going to find multiple nounced it has entered into a letter deposits here.”

North Country has defined a of agreement to acquire all of the North Country shares it does not resource on its Three Bluffs dealready own in an all-share deal posit at the Committee Bay projworth $20 million.

See AURYN, Page 2

Silver Standard management talks success at Marigold

BY MATTHEW KEEVIL

VANCOUVER — Silver Standard Resources (TSX: SSO; NASDAQ: SSRI) is off to a hot start at its Marigold gold mine in Humboldt County, Nev., along the northern reaches of the Battle Mountain–Eureka trend. The company has not only brought its all-in sustaining costs down, but also orchestrated drill success on Marigold’s greater property package that hints at more upside.

Silver Standard picked up the asset back in early 2014 from jointowners Goldcorp (TSX: G; NYSE: GG) and Barrick Gold (TSX: ABX; NYSE: ABX) for $275 million in cash. At the time Marigold had sustaining costs in excess of US$1,500 per oz. gold, though that number was heavily influenced by capital spending that had gone toward an upgraded mobile mine fleet and other improvements.

This set the stage for material cost savings, with Silver Standard boosting its “mining for margins” program. The company started by

TNM July 13 2015 Issue.indd 1

reconstituting Marigold’s reserves and resources in a bid to optimize its mine scheduling.

The project now hosts proven and probable reserves of 130 million tonnes grading 0.51 gram gold per tonne for 2.1 million contained oz. Indicated resources total 244 million tonnes of 0.51 gram gold for 4 million contained oz. All calculations assume a 0.065-gram gold cut-off grade.

“When we bought the asset we came into it with a view to change the mine plan and drive the lowest cost per tonne. I think what’s surprised me to the upside has been the prospectivity of the land position that we have there. Marigold has been running for twenty years and it’s always had a nine-year mine life, which is right where we are today,” president and CEO John Smith explained during an interview.

“We went through a full scenario optimization at different levels of production, which really focused See SILVER STANDARD, Page 11

Picking up Pinaya porphyry property in Peru 3

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

Odds ‘n’ sods

A rough ride on the road from Mayo to Whitehorse

Canarc Resource 4

Buying El Compas project in Mexico 16

Denison, Fission join forces in the Athabasca

Drillers on a barge at Fission Uranium’s Patterson Lake South uranium project in northern Saskatchewan.

BY MATTHEW KEEVIL

VANCOUVER — Lukas Lundin’s Denison Mines (TSX: DML; NYSE-MKT: DNN) and exploration powerhouse Fission Uranium (TSX: FCU; USOTC: FCUUF) have agreed on a deal that could create the second-largest pure uranium miner in the world, based on market

capitalization.

The companies have been major players amid a renewed exploration rush in Saskatchewan’s Athabasca basin, but downturns in nuclear markets had taken a toll on stock valuations. Amid struggling uranium prices the two management teams have labelled the move a protective measure that

Western Potash’s redesign attracts $80M Chinese investment

BY TRISH SAYWELL

China-based private equity firm Beijing Tairui Innovation Capital Management has decided to invest $80 million for a 51% stake in Western Potash (TSX: WPX) after the junior unveiled a less expensive mine plan for its Milestone potash project in southern Saskatchewan, about 30 km southeast of Regina.

Western Potash announced July 2 that it has completed a scoping study for selective mining at Milestone that would start on a smaller scale using horizontally drilled caverns and cost a mere $80 million to build instead of the $3 billion outlined in a December 2012 feasibility study.

Under the old mine plan envisioned in the feasibility study, Milestone was to be operated as a conventional potash solution mine like Mosaic’s (NYSE: MOS) Belle Plaine mine, about 80 km to the north and one of the world’s largest producing potash solution mines.

Under the new plan, selective mining would rely on horizontally drilled wells similar to the method used at Intrepid Potash’s (NYSE: IPI) Moab deposit in Utah. The process involves horizontally drilled wells through which the miner injects a sodium chloride (NaCl) saturated brine that is hotter than the in-situ rock formation. The potassium chloride (KCl) is then selectively dissolved within the potash formation, leaving a lattice of NaCl behind.

The potassium chloride-rich brines are then brought to the surface through each production well, and then sent to a crystallization facility at surface.

The plan is to start small with just three wells targeting Milestone’s Esterhazy zone, outlined in the most recent scoping study.

A big benefit of the method is that the NaCl is not brought to surface in any great quantities.

“You’re not bringing a pile of

FISSION URANIUM

will leave merged entity well positioned for a market recovery.

Under the deal, Fission shareholders will receive 1.26 shares in Denison, plus 1¢ in cash for each share held, which values Fission at $483 million, or $1.25 per share.

Denison and Fission shareholders would split ownership in the post-merger, rebranded Denison Energy , which would start life with a $900-million market value.

The transaction offers Fission investors an 18% premium, which is below earlier expectations of what the company’s landmark Patterson See DENISON, Page 8 PM40069240 – PAP Registration #09263

See WESTERN, Page 14

15-07-08 6:08 PM

2 JULY 13-19, 2015 THE NORTHERN MINER

Auryn to buy North Country

REGULAR DEPARTMENTS

COMPANY INDEX

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

Agnico Eagle Mines............ 1 AM Gold............................ 3 Asanko Gold....................... 1 Auryn Resources................. 1 Barrick Gold........................ 1 Beijing Tairui Innovation Capital Management..... 1 Cameco.............................. 8 Canarc Resource............... 16 Canpotex.......................... 13 Capstone Mining.............. 16 Cayden Resources.............. 1 Denison Energy.................. 1 Denison Mines.................... 1 Endeavour Silver............... 16 Fission Uranium.................. 1 Freeport-McMoRan............ 3 Galaxy Broadband............ 13 Goldcorp............................ 1 High Power Exploration...... 3

Intrepid Potash................... 1 Itochu................................. 3 JCU Exploration.................. 8 K+S Group........................ 13 Kaizen Discovery................ 3 Marlin Gold Mining.......... 16 Mosaic........................... 1,13 National Steel Car............. 13 National Steel Car............. 13 North Country Gold............ 1 Pacific Coast Terminals..... 13 Potash Corp. of Saskatchewan.............. 13 Rio Tinto............................. 8 Rokmaster Resources.......... 3 Silver Standard Resources... 1 Timetric............................ 13 Tower Resources................. 3 Western Potash.................. 1

STORIES WE’RE WORKING ON. . .

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

Since 1915

The Committee Bay gold project

AURYN RESOURCES

Cambridge Bay

An outcrop at the Hinge zone, in the Three Bluffs area at Auryn Resources’ Committee Bay gold project in Nunavut.

AURYN, From Page 1

ect with an indicated resource of 4.3 million tonnes grading 4.91 grams gold per tonne for 683,000 contained oz. gold, and an inferred resource of 5.5 million tonnes grading 5.43 grams gold for 965,000 contained oz. gold.

But Wallace says he’s more interested in exploring the four other targets on the property than adding incremental ounces at Three Bluffs.

the limitation of working as a joint venture. In addition to the extra layers of bureaucracy a joint venture typically brings, he says, there also would be constraints in terms of work windows in the Arctic and the compressed nature of how one explores in the north.

More importantly, he says, in today’s depressed capital markets where raising money can be difficult, a joint-venture format in-

‘We’re going to find multiple deposits here.’

— Shawn Wallace, president and CEO, Auryn Resources “Outside the Three Bluffs deposit, which is where the bulk of the capital has been spent, there are only sixty drill holes outside of that on a 300 km belt. And what drew us to it was that almost every time they stepped out, they made another discovery. We haven’t spent a whole bunch of time analyzing Three Bluffs ... our focus is going to be defining new deposits ... we think the most value will come from getting this districtscale.”

Wallace adds that Auryn is taking a “full belt approach,” and the mid-year exploration program will focus on the southern third of the Committee Bay land package.

“Our crews are mobilizing up there right now,” he says. “The other thing we’ve done is we’ve staked some additional ground and will continue to do so.”

Wallace notes that part of the reason for acquiring all of North Country, rather than continuing under the joint-venture structure announced in March, was

troduces specific risk.

“There would be execution risk in a joint venture where two sides have to finance and in challenging markets, who knows, maybe they wouldn’t be able to finance or we wouldn’t be able to finance, and we couldn’t have this systematic approach,” he explains.

In the end, however, it all boiled down to being confident the project is better than every other project Auryn has looked at.

“Our review team was way down the road in terms of evaluating other assets, but this one was superior,” he says. “For us to make an acquisition, it has to be a district-scale opportunity, it has to have grade and it has to be in a good jurisdiction, and those are three difficult boxes to check, but this one checked all of them.

“It’s head and shoulders superior to anything we’ve reviewed at Auryn, taking into consider the location, the type of mineralization, the tenure system, the grade — all those variables.”

Under the deal, North Country shareholders will receive one Auryn share for each 10 North Country shares they own. The pricel represents a 65.5% premium to the volume weighted average price of North Country’s shares for the 20 trading days before June 30, and a 48% premium to North Country’s June 29 closing price.

“It’s challenging for any junior to raise money in this market, so as a company, we had to look at what is best for our shareholders,” North Country’s president Brian Budd says. “Over the last 24 months we were looking for partners who could add value to our shareholders in this market, and we believe we delivered on that.”

Budd notes that North Country has grown the resource significantly since 2010. The current resource is open along strike and at depth.

“We have high grade from surface to about 500 metres of depth,” he says. “We’ve always

Commitee Bay ★

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QUEBEC

NUNAVUT HUDSON BAY MANITOBA

SASKATCHEWAN

thought grade is king, and that the ounces will come, so we keep driving forward.”

Budd is pleased with the strides Agnico has made in the Eastern Arctic at Meadowbank, one of Agnico’s top-producing assets, along with its new discovery Amaruq and pre-production Meliadine projects, also in the region. These assets have generated more enthu-

siasm for projects in the Arctic, and Budd notes Agnico is directing at least $20 million towards making discoveries there this year.

“Auryn saw an opportunity,” Budd says. “This is a world-class asset. And in this market we believe we have delivered good value to our shareholders, and the story goes on.”

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TNM July 13 2015 Issue.indd 2

A fleet of heavy equipment at Auryn Resources’ Committee Bay gold project in Nunavut.

AURYN RESOURCES

15-07-08 6:08 PM

THE NORTHERN MINER JULY 13-19, 2015 3

Kaizen to buy Pinaya in Peru

KAIZEN DISCOVERY

The project grounds at the Pinaya copper-gold property in southern Peru’s Andahuaylas-Yauri porphyry belt, which Kaizen Discovery is set to buy from AM Gold.

Resources (TSXV: RKR) to end its arbitration proceedings with AM Gold over a 2012 option agreement dispute for Pinaya, among other things. In turn, Kaizen will fork over 2 million shares and $300,000.

BY SALMA TARIKH

Kaizen Discovery (TSXV: KZD; US-OTC: CCNCF) is acquiring a 100% interest in the Pinaya copper-gold project from AM Gold (TSXV: AMG; US-OTC: ACERF) for $4.5 million.

This will be the junior’s second acquisition attempt this year, after it ended an all-share takeover of Tower Resources (TSXV: TWR) in March. (Tower’s main asset is the Rabbit North coppergold project, near Kaizen’s Aspen Grove project in B.C.) The junior’s CEO Matthew Hornor says the Pinaya acquisition moves the company closer to amassing a “diversified portfolio of high-quality mineral projects in the Americas and the Pacific Rim.” “We feel this is another excellent example of our stated mission to acquire high-value and very prospective assets at attractive valuations at this low point in the cycle,” Kimberly Lim, the company’s manager of investor relations, said in an emailed response to questions.

Kaizen’s current assets include the Aspen Grove and Tanzilla copper-gold projects in B.C., the Coppermine copper-silver deposit in Nunavut, the Fairholme coppergold asset in Australia and the Ebende nickel-copper and platinum group element deposit in the Dem-

Kaizen Discovery (TSXV:KZD)

Pinaya’s gold oxide skarn zone has 6.4 million measured and indicated tonnes at 0.80 gram gold and 0.1% copper, for 164,000 oz. gold and 13 million lb. copper. The zone has another 2.4 million inferred

$0.28

‘Our priorities for Pinaya are to close the deal, firm up plans for subsequent exploration work ... and secure additional funding through our Japanese partners.’

$0.26

$0.24

$0.22

— Kimberly Lim, manager of investor relations, Kaizen Discovery

$0.20

Apr 2015

May 2015

ocratic Republic of the Congo.

The junior also looks to expand in the Pacific Rim — and it has the financial support and connections to do so.

Kaizen’s largest shareholder at 67% is HPX TechCo, a subsidiary of High Power Exploration — a private exploration firm controlled indirectly by mining mogul Robert Friedland. Japanese trading house Itochu and leading copper producer Freeport-McMoRan (NYSE: FCX) are solely funding the

Jun 2015

Jul 2015

Aspen Grove and Tanzilla projects, respectively.

For the Pinaya acquisition, Kaizen will provide AM Gold with 15.4 million shares and $500,000. It will also reimburse AM for property and maintenance fees incurred between April and the transaction’s close, expected in early September.

(Once completed, AM Gold will hold an 8.8% undiluted interest in Kaizen.)

The junior also signed a concurrent agreement with Rokmaster

“Our priorities for Pinaya are to close the deal, firm up plans for subsequent exploration work — which could include HPX’s Typhoon exploration technology — and secure additional funding through our Japanese partners,” Lim notes.

The 192 sq. km Pinaya project sits in the prolific AndahuaylasYauri porphyry copper-gold belt in southern Peru. This belt hosts several large copper assets, including Las Bambas, Constancia and Haquira.

Pinaya’s existing resource lies within three zones that are contiguous over a 1.7 km strike. The Western and Northwestern porphyry zones contain 32.3 million measured and indicated tonnes at 0.4% copper and 0.44 gram gold per tonne for 280 million lb. copper and 452,000 oz. gold. These zones also have 35.4 million inferred tonnes grading 0.4% copper and 0.27 gram gold.

tonnes at 0.6 gram gold and 0.1% copper.

Previous drilling at Pinaya defined the current resource instead of conducting systematic regional exploration, Kaizen says, noting that regional soil geochemical and geophysical surveys have found several untested targets along strike and across strike of the current resource. The company says there could be other mineralized systems at Pinaya.

Given the exploration upside and the existing resource, Hornor says the company’s Japanese partners will likely support the project, and help Kaizen reach its goal of “delivering key minerals to Japan’s industrial sector.”

AM Gold shares doubled since the Pinaya acquisition to finish July 7 at 6¢. Kaizen finished at 24¢ per share, up 14% from its previous close. The junior exited the first quarter with $6.2 million in cash.

WEBCAST/ONSITE AUCTION TUESDAY, JULY 28TH

PREVIEW: THURSDAY-MONDAY, JULY 23RD- 27TH 8AM-5PM

DOZERS/LOADERS/EXCAVATORS/ROCK TRUCKS Caterpillar D10T Dozer (2010) John Deere D6T Dozer (2009) (2) Caterpillar 980H Wheel Loaders (2009) (4) John Deere Wheel Loaders (2009) (4) John Deere 850D Excavators (2006) (2) John Deere 400D Rock Trucks (2012) John Deere 326D Skid Steer Loader (2010) Caterpillar 225 Skid Steer Loader PROCESSING & STORAGE EQUIPMENT Bed Dryers, Double Deck, Single Deck & Dewatering Screens, Portable/Telescoping & Belt Conveyors to 125’, Storage Silos REMOTE SITE FACILITIES & SUPPORT

Dozers • Loaders Excavators • Rock Trucks Processing & Storage Equipment Used in the Production and Distribution of Premium Grade Frac Sand

Asset Locations: • 2121 Airport Dr. Saskatoon, Saskatchewan, Canada • Hanson Lake, Saskatchewan Canada

Sale Location: Saskatoon Inn and Conference Center 2002 Airport Drive, Saskatoon, Saskatchewan, Canada

For more info. please contact Jody Bacque +1 251-404-2367 jbacque@hilcoglobal.com

Visitors inspect samples inside the core shack at the Pinaya copper-gold project in Peru.

TNM July 13 2015 Issue.indd 3

KAIZEN DISCOVERY

Hilco

TM

In Cooperation with

Industrial

hilcoind.com/preferredsandscanada gordonbrothers.com/preferredsands A Buyers Premium is in Effect for this Sale

15-07-08 6:08 PM

4

JULY 13-19, 2015

THE NORTHERN MINER

EDITORIAL

EDITOR-IN-CHIEF:

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

ANTHONY VACCARO, CFA, MBA

avaccaro@ northernminer.com ADVERTISING: JOE CROFTS (416) 510-6816 jcrofts@ northernminer.com DAVE CHAUVIN (416) 510-6824 dchauvin@ northernminer.com MICHAEL WINTER (416) 510-6772 mwinter@ northernminer.com EDITORIAL: Toronto: 38 Lesmill Road, Unit 2, Toronto, ON, M3B 2T5 (416) 510-6768 tnm@ northernminer.com Reprints: (416) 510-6768 moliveira@ northernminer.com Western Bureau: 580 Hornby Street Suite 900 Vancouver, BC, V6C 3B6 (604) 688-9908 CIRCULATION: (416) 510-6789 (Toll free) 1-888-502-3456 northernminer2@ northernminer.com SUBSCRIPTION SALES: DAN BOND (416) 510-6741 (Toll free) 1-888-502-3456, ext. 43715 dbond@ northernminer.com SUBSCRIPTION RATES: Canada: C$114.00 one year; Please add $6.00 S/H 5% G.S.T. to CDN orders.

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14% H.S.T. to PEI orders U.S.A.: US$114.00 one year +$6.00 S/H Foreign: US$151.00 one year +$6.00 S/H GST Registration # 809744071RT001 ART DIRECTOR: SHARON MALBON PRODUCTION MANAGER: JESSICA JUBB (416) 510-5213 jjubb@ glacierbizinfo.com (ISSN 0029-3164) CANADA POST: Return undeliverable Canadian addresses to Circulation Dept. c/o The Northern Miner 38 Lesmill Road, Unit 2 Toronto, ON M3B 2T5 Publication Mail Agreement #40069240 PAP Registration #09263 We acknowledge the financial support of the Government of Canada, through the Canadian Periodical Fund (CPF), for our publishing activities.

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China stock market crash hits commodities While the year-long bubble in the Chinese stock market didn’t translate into higher commodity prices, the spectacular bursting of the bubble over the past month has slammed a wide swath of commodities — including iron ore, copper, zinc, nickel, precious metals and oil — as investors anticipate further slowing of the Chinese economy.

At press time China’s benchmark index, the Shanghai Composite, had dropped to a three-month low of 3,507.19 — a 5.9% plunge from the previous close, and down a remarkable 32% from the all-time high of 5,166.35 achieved less than a month earlier on June 12.

Some US$580 billion in market capitalization has been obliterated since the June peak, even as the popularity of stock trading has grown exponentially amongst individual Chinese investors, estimated to number 90 million.

The particularly sharp drop on July 7 — a day the index fell 8.2% in mid-session — could actually have been worse, as stocks traded on the Shanghai and Shenzhen exchanges are halted for the day after they drop 10% in one session. At the moment, trading has been halted for this reason on more than 50% of mainland China stocks, even as the rout has rippled across the world’s stock and bond markets.

Worse yet, chartists point to the ominous look of the longterm chart for the Shanghai Composite Index, with a massive head and shoulders formation appearing that strongly suggests a return to levels around 2,000 over the next year — i.e., back to where it was only a year ago.

The command-and-control reflex of the Chinese government has reappeared in response to the stock plunge, with the government instructing large domestic players — such as major state-owned enterprises — to buy Chinese stocks on the open market, even if they have borrow or sell bonds to get the money to do so. Indeed, large, favoured companies of the central government such as Bank of China and Agricultural Bank of China Ltd. were up by double-digit percentages in the past week due to such buying, leaving smaller, less connected companies to bear the brunt of the wider panic selling.

With commodities prices already showing weakness through the first half of the year owing to expectations of a slowing Chinese economy, this latest sharp decline in Chinese stock markets has battered commodities prices, but none more so than spot iron ore prices, which plummeted 10% on July 7 to US$44.59 per tonne (62%Fe). It was the biggest daily drop on record, and set prices under the lows seen in April 2015.

Since early June, iron ore prices have sharply retreated from US$65 per tonne, wiping out the gradual recovery that iron ore miners had enjoyed since mid-April.

It’s a depressing walk though the other base metals, with copper trading around US$2.50 per lb., after seeing US$2.90 two months ago; nickel at just $5 per lb., after trading at US$6.50 two months ago, and above US$8 a year ago; aluminum at US73¢ per lb., off from US84¢ two months ago; zinc at US90¢ per lb., after hitting US$1.08 two months earlier; and lead at US80¢ per lb., down from US93¢ two months ago.

Precious metals are similarly limping along at US$1,158.50 per oz. gold, US$15.09 per oz. silver, US$1,031 per oz. platinum and US$652 per oz. palladium, with prices for all these metals easing off over the past month.

Much to the dismay of gold bugs, gold and silver have not been much of a safe haven during the current Chinese stock rout and the ongoing meltdown of the Greek economy. Gold bugs are in the uncomfortable position of having been right on the macro story of Chinese stocks being in a bubble, and the inherent instability in the euro’s set-up, but wrong on the micro story of gold prices benefitting from these macroeconomic troubles.

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.

Since 1915 The Northern Miner is published by BIG Mining L.P., a division of Glacier Media Inc., a leading Canadian media company with interests in business-to-business information services. From time to time we make our subscription list available to select companies and organizations whose products or services may interest you. If you do not wish your contact information to be made available, please contact us by one of the following methods: Phone: 1-888-502-3456; Fax: (416) 447-7658; Mail to: Privacy Officer, The Northern Miner, 38 Lesmill Road, Unit 2, Toronto, ON M3B 2T5.

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TNM July 13 2015 Issue.indd 4

ALISHA HIYATE, BA ahiyate@northernminer.com

SENIOR STAFF WRITER:

EDITORIAL: TOP STORY OF WEEK 27

GROUP PUBLISHER/ PUBLISHER:

EDITOR, SPECIAL PROJECTS:

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

Bathurst geologist Baldwin celebrated

PHOTO BY RICHARD MANN

At the ceremonial unveiling in Bathurst, N.B., of a plaque honouring geologist Ben Baldwin (inset), from left: Baldwin’s wife Inka Milewski, daughter Carolyn Evans and son-in-law Beric Evans.

A plaque honouring geologist Ben Baldwin was unveiled in May at the Promenade Waterfront in Bathurst, N.B. Baldwin discovered zinc-lead mineralization in rocks near Austin Brook as he prepared his thesis while studying at the University of New Brunswick from 1951 to 1952. The find sparked a staking rush in the Bathurst area, which eventually grew into an established mining camp that has been exploited for

60 years. In addition to his professional success as a geologist, Baldwin — who retired in 2005, and couldn’t attend the event due to illness — was hailed as the “Jean Beliveau of geologists” for his humble, patient and down-to-earth personality. A group of about 60 people attended the ceremony, including family, friends, colleagues, politicians and mining industry representatives.

ODDS ‘N’ SODS

No good deed goes unpunished at drill job in the Yukon

BY COR COE

SPECIAL TO THE NORTHERN MINER

Our company was completing a drill program out of Mayo, Yukon Territory, in February 1996. We had to build an ice bridge over the McQuesten River, plus 21 km of winter road to the top of Red Mountain (5,000 feet elevation) and complete 5,000 feet of RC drilling by April 1 to comply with our access permit.

We staged our camp at the headwaters of Ballard Creek and were operating 24 hours a day, seven days a week to get the job done. One day, the contractor ran short on fuel and needed someone to drive to the city of Mayo and bring some back before they ran out.

mechanics said the parts were only available in Whitehorse — 400 km away. I planned to head there for business regardless, so I limped on through the night and cleared the filter when necessary.

About halfway to Stewart Crossing the truck engine stopped completely, so I put my mitts on and stepped out into the frigid weather. Unfortunately, my mitt touched the electronic door-lock button, and I unwittingly locked myself out.

It was about 1 a.m. and I needed to get back into the vehicle, otherwise I was going to freeze out there. So I took a tire iron from the pickup box and bashed the window open. Since the filter was hooped and the truck wouldn’t start, I called the Northwes-

It was about 1 a.m. and I needed to get back into the vehicle, otherwise I was going to freeze out there.

One of the guys, Ray, had his own private, much-loved and brand new F350 Ford diesel truck at the camp, so he volunteered to make the run to town. As the project manager at the time, I said ‘go for it,’ and expected him back in a couple of hours.

It was -45°C, mostly dark, mid-winter days, so you can imagine my concern when Ray still hadn’t returned five hours later. I headed out to see what happened, and found him and his Ford barely crawling along just east of Mayo.

As it turned out, the truck’s new fuel filter was plugged with ice, so Ray had to stop every few minutes, shake it out, and restart the motor. I told him to take my truck, get the fuel, then return to camp. Meanwhile I’d bring his truck into town and get a new filter for him. He agreed, so off he went.

I limped my way to Mayo but alas, the

tel operator on my radio and told the operator I needed a tow truck.

She found a contact number and put me through to a guy in Stewart Crossing who agreed he’d be there in half an hour. When he showed up, it was clear his tow truck was just an old flatbed with a tripod and a comea-long winch on the back that he rigged himself.

But his contraption was the least of our worries. We were positioned on a hill, and when he winched the truck off the ground, the whole unit — including the tow truck — slid down the slope, picking up speed as it went.

It eventually jackknifed, and I choked up as I watched the whole side of Ray’s precious truck crunch against the flatbed.

See ODDS N SODS, Page 5

15-07-08 6:08 PM

THE NORTHERN MINER JULY 13-19, 2015 5

OP-ED

MATTERS OF GENERAL INTEREST Odds ‘n’ sods ODDS N SODS, From Page 4

To make matters worse, the service guy approached me from behind and said I was his first customer ever, and he had no insurance.

Long story short, I had him tow me all the way to Whitehorse and dropped the truck off at the Ford dealer, with an urgent request to repair all the damage and window ASAP, and load it up with fuel filters. Two days later I took the truck back to camp looking as good as new, after a hefty repair bill.

Ray got his truck back and thanked me for the filters, but I just couldn’t bring myself to tell him what happened.

A few years later, he was having some repair work done at the Ford dealer and was given service records that showed the truck had major repairs a few years back.

He argued with the dealership that it was a mistake, and when I met him later that day, he was in quite a huff over it. I knew at that moment I had to come clean, so I told him about what happened that night outside Stewart Crossing.

Although he laughs about it now, he might not have found it so funny back then!

— Cor Coe is a professional geologist in Vancouver.

(Editor-in-chief’s note: Readers are always invited to submit their firsthand, lighthearted or poignant mining and exploration tales to run as an ‘Odds ‘n’ Sods’ column. Please send them to tnm@ northernminer.com)

LETTER TO THE EDITOR

Being female never held me back

In response to the Letter to the Editor entitled “Daughters — Avoid mining or geology as a career” (T.N.M., June 15–21/15), I would like say that I am by no means a feminist, but this commentary irritated me enough to voice my opinion. The writer appears to be very bitter towards the industry as a whole, stereotyping an entire industry as misogynistic simply because it is male-dominated. I would like to offer my experiences as a female engineer working in the industry, not someone working in “consulting, sales, administration or investor relations.”

I grew up around the mining industry. My father is a geological engineer who has been work-

ing for various mining companies since the 1970s, so I am well aware of the cyclical ups and downs. I have a brother and a sister, and we were all given the same opportunities, encouraged to pursue subjects we enjoyed at school such as math and science, and placed on minor hockey teams at a time when my sister and I were two of the only female players. We all pursued careers in science-related fields (geology, engineering and computer science), so I guess you could say my parents’ egalitarian attitude paid off. I realize that my family is a bit of an anomaly, and while this may have contributed to my career choice, it certainly has not influenced the environment I

work in today.

I have never felt that the fact that I am a woman held me back, either in experiences or salary.

The men in my department doing the same job as me do not have a higher wage. I have been encouraged to continue my education and have obtained an M.Sc. in engineering as well. I have not had opportunities “pass me over” in favour of male colleagues. I have found my career to be both challenging and rewarding. I have taken maternity leave, and although I had some catch-up to do when I returned (which is natural, after being away for several months), I don’t feel as though I have been put on the back burner just because I de-

cided to have a family.

While I cannot speak for all females in the mining industry, I am certainly glad that I was not discouraged by my parents to avoid the industry as a whole (although as an aside, I was repeatedly warned not to marry a geologist, advice I failed to take).

Perhaps “A female geologist working in Canada” should realize that things are not the same as they were 25 years ago, and that times are changing in the mining industry. It is still a male-dominated work environment, but that won’t change if we counsel all our daughters to avoid it.

A female engineer working in Canada

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MEETINGS Jul 13 Jul 15 Jul 15 Jul 15 Jul 15 Jul 16 Jul 17 Jul 17 Jul 17 Jul 20 Jul 21 Jul 21 Jul 22 Jul 22 Jul 22 Jul 22 Jul 22 Jul 23 Jul 23 Jul 23 Jul 24 Jul 27 Jul 27 Jul 28 Jul 29 Jul 29 Jul 29 Jul 30 Jul 30 Jul 30 Jul 30 Jul 30 Jul 31

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TNM July 13 2015 Issue.indd 5

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6 JULY 13-19, 2015 THE NORTHERN MINER

MARKET NEWS TORONTO STOCK EXCHANGE Uncertainty over Greece and the euro ahead of the country’s July 5 referendum on austerity measures weighed on markets during the trading week, which was shortened due to the Canada Day holiday on July 1. The S&P/TSX Composite Index fell 0.9% to finish at 14,682.39, the S&P/TSX Capped Metals & Mining Index dropped 4% to 667.73, and the S&P/TSX Global Mining Index declined 1.9% to 60.59.

Shares of Potash Corp. of Saskatchewan continued to build after the company’s proposal to buy German potash producer K&S Aktiengesellschaft (K&S).

PotashCorp provided details of its offer on July 2, and said it is confident concerns “can be addressed through collaborative discussion.” PotashCorp said its proposal was “not predicated on closing mines, curtailing production, selling the salt business or cutting jobs” and that its cash offer of €41per share was a 57% premium to the volume-weighted average share price of K&S during the previous 12 months. K&S owns the Legacy potash mine in Saskatchewan near one of PotashCorp’s biggest operations. Shares of PotashCorp rose 27¢ to $38.88. Shares of fertilizer giant Agrium also rose, on no corporate news, climbing $5.52 to $133.96.

J U N E 2 9 - J U LY 3

A proposed merger between Western Lithium and Lithium Americas sent the latter’s shares up 19% to 48¢ per share.

Under an agreement announced June 30, Western Lithium will acquire all of the outstanding shares of Lithium Americas in an all-stock transaction valuing Lithium Americas at about $80 million. Lithium Americas owns the Cauchari-Olaroz lithium project in Argentina, which is permitted for construction, and Western Lithium is advancing its Valley of the Kings lithium deposit in Nevada. Western Lithium shareholders would own 50.5% of the combined company and Lithium Americas shareholders, 49.95%.

First Quantum Minerals’ shares were down 78¢ to $16.32. The company said in

TSX most active issues

MBAC Fertilizr Teck Res B Yamana Gold New Gold First Quantum Kinross Gold Tahoe Res Eldorado Gold Goldcorp Claude Res

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

MBC TCKB YRI NGD FM K THO ELD G CRJ

6541 0.13 0.09 0.09 - 0.01 6363 13.08 11.96 12.05 - 0.95 6177 3.80 3.61 3.70 - 0.03 5947 3.56 3.28 3.38 - 0.12 5749 17.19 15.89 16.32 - 0.78 5641 2.93 2.75 2.85 - 0.02 5461 16.00 15.07 15.20 - 0.57 4727 5.23 4.88 5.12 + 0.18 4618 20.58 19.97 20.28 - 0.04 4600 0.71 0.64 0.66 - 0.02

the last week of June that it is making progress ramping up its new copper smelter in Zambia. First Quantum noted the smelter’s daily copper concentrate throughput as of June 25 has averaged 3,000 tonnes, “with periods in excess of the 3,500 tonnes per day nameplate capacity.” Feed to the smelter is made up of a mixture of stockpiled and fresh concentrate from its Kansanshi mine, as well as

fresh concentrate from its new Sentinel mine. First Quantum also pointed out that the Kansanshi mine’s C1 cost of production has fallen from an average of US$1.77 per lb. in the first quarter of 2015, to between US$1.36 per lb. and US$1.25 per lb.

It also forecast that commercial production is expected in the third quarter — well ahead of its previous forecast of the first quarter of 2016.

TSX greatest percentage change

Stockport Expl TVI Pacific Canarc Res Prophecy Coal Migao Erdene Res Dev Lithium Americ Freegold Vent Champion Iron Levon Res Victory Nickel Ivernia Candente Gold Oracle Mng Carpathian Gld Stonegate Agri Inspiration Mg Oban Mng Energy Fuels Entree Gold

TSX greatest value change

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

SPT TVI CCM PCY MGO ERD LAC FVL CIA LVN NI IVW CDG OMN CPN ST ISM OBM EFR ETG

30 252 180 1070 126 329 3162 150 359 1446 707 117 190 51 1727 104 62 342 180 90

0.04 0.02 0.08 0.08 0.77 0.15 0.49 0.14 0.11 0.59 0.06 0.02 0.04 0.02 0.02 0.03 0.04 0.14 6.40 0.41

0.03 0.01 0.06 0.06 0.64 0.12 0.36 0.12 0.09 0.51 0.04 0.01 0.03 0.02 0.02 0.02 0.04 0.10 5.23 0.33

0.04 0.02 0.08 0.07 0.76 0.15 0.48 0.14 0.11 0.59 0.04 0.01 0.04 0.02 0.02 0.02 0.04 0.11 5.31 0.35

+ 60.0 + 50.0 + 33.3 + 27.2 + 20.6 + 20.0 + 18.7 + 16.6 + 15.7 + 13.4 - 41.6 - 33.3 - 30.0 - 25.0 - 25.0 - 25.0 - 20.0 - 19.2 - 19.3 - 18.6

TSX VENTURE EXCHANGE The S&P/TSX Venture Composite Index closed near a three-month low, as commodity futures struggled and markets remained volatile owing to the debt crisis in Greece.

Meanwhile, U.S. government data indicated the country’s economy added 220,000 jobs in June and the country’s unemployment rate dropped to 5.3%.

August contracts for gold bullion hit a four-week low after losing 1.5%, or US$17.60, and closing at US$1,167.80 per oz. Energy futures also took a beating, as August contracts for West Texas Intermediate crude oil dropped 5.5%, or US$3.26, en route to a US$55.52-per-barrel close. September contracts for copper declined US1.4¢ before finishing at US$2.62 per lb.

Metanor Resources led the volumetraded category after releasing assay results from its Bachelor gold mine, 225 km northeast of Val-d’Or, Que. The company saw nearly 8.5 million shares change hands, though its valuation stayed at 6.5¢ per share.

On June 30 Metanor announced it had cut 1.5 metres grading 18 grams gold per tonne from 110 metres deep in drill hole 12-168. The intersection is less than 80 metres south of the company’s level 12 infrastructure in an “unknown sector” that had

TNM July 13 2015 Issue.indd 6

Agrium Cameco Corp Potash Cp Sask Sandstorm Gold Eldorado Gold Horizns G Bear Migao Alamos Gold Central Fund Royal Cdn Mint Labdr I-Ore Ro Energy Fuels Teck Res B First Quantum Dominion Diam Tahoe Res Major Drilling Imperial Metal Pan Am Silver HudBay Minls

AGU CCO POT SSL ELD HGD MGO AGI CEFA MNT LIF EFR TCKB FM DDC THO MDI III PAA HBM

983184 133.96 2494031 18.22 4580597 38.88 541806 3.97 4726711 5.12 988333 12.74 125575 0.76 565188 7.14 244771 14.53 639185 15.54 755150 13.88 180494 5.31 6362527 12.05 5748676 16.32 994377 17.57 5460648 15.20 267723 6.02 45862 10.24 518669 10.63 1994867 10.24

+ 5.52 + 0.28 + 0.27 + 0.24 + 0.18 + 0.17 + 0.13 + 0.11 + 0.10 + 0.08 - 1.38 - 1.27 - 0.95 - 0.78 - 0.63 - 0.57 - 0.51 - 0.42 - 0.41 - 0.38

J U N E 2 9 - J U LY 3

not seen previous drilling. Metanor reported that three more holes will be drilled to verify continuity and orientation.

North Country Gold was the target of a takeover offer from Auryn Resources, gaining 1.5¢ on 6.6 million shares traded to close at 13¢, while Auryn was off 3¢ to $1.47 on 173,000 shares traded. On June 30 Auryn said it intended to acquire North Country for 13.8 million shares at $1.48 per share, or $20.4 million and a 66% premium. The main asset in the deal is the 100% interest in the Committee Bay project in Nunavut, which includes 662 sq. km along the Committee Bay greenstone belt, 180 km northeast of Agnico Eagle Mines’ Meadowbank gold mine.

TSX-V most active issues

Metanor Res North Country Laurion Mnl Ex Chalice Diam Rodinia Lithm Reunion Gold CMC Metals Malbex Res Rokmaster Res Redstar Gold

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

MTO NCG LME COD RM RGD CMB MBG RKR RGC

8489 6615 5398 4912 3774 3613 3417 2874 2757 2482

0.08 0.14 0.03 0.08 0.03 0.02 0.06 0.03 0.04 0.05

0.06 0.10 0.02 0.06 0.02 0.01 0.05 0.03 0.03 0.03

0.06 - 0.13 + 0.03 + 0.08 + 0.02 + 0.01 - 0.05 0.03 0.03 + 0.04 -

0.01 0.02 0.01 0.02 0.01 0.01 0.00 0.00 0.01 0.01

Laurion Mineral Exploration landed a $6-million investment from a Dallas-based oil and gas private equity group. Shares gained 1¢ on 5.4 million traded to close at 3¢. The private placement holds subscriptions in three tranches: a first tranche of $1 million for 20 million shares; a second of $2.5 million for 50 million shares; and a third of $2.5 million for 48.3 million shares. The

transactions would result in the group owning 51% of Laurion’s outstanding shares.

President and CEO Cynthia Le SueurAquin said the deal confirms that the bear market for precious metals is “coming to an end.” The partnership is reportedly the “first step” in fast-tracking Laurion’s Ishkoday polymetallic project — 220 km northeast of Thunder Bay, Ont. — to production.

TSX-V greatest percentage change

Frontline Gold Barker Mnrls MacDonald Mns Central Iron O Nevada Expl Pan Global Res Kermode Res SGX Res Ultra Lithium Atlanta Gold Compliance Eny Swift Res Golden Goliath ValGold Res Adex Mining Bitterroot Res Canadn Plat Xtierra Asia Now Res Emgold Mng

TSX-V greatest value change

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

FGC BML BMK CIO NGE PGZ KLM SXR ULI ATG CEC SWR GNG VAL ADE BTT CPC XAG NOW EMR

20 435 256 419 65 50 55 184 70 102 210 58 131 18 163 99 203 48 21 168

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.09 0.01 0.04 0.01 0.02 0.02 0.01 0.01 0.01 0.02 0.01

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.05 0.01 0.03 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.01

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.09 0.01 0.04 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.01

+ 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 70.0 - 66.6 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 40.0 - 33.3

U.S. M ARKETS U.S. equities fell ahead of the Independence Day weekend as Greece’s debt crisis continued. The Dow Jones Industrial Average and the S&P 500 Index both lost 1.2% to end at 17,730.11 and 2,076.78. The spot gold price slipped 0.6% to US$1,166.90 per oz.

Peabody Energy shares retreated 18% to US$1.87 after the coal miner lowered expectations for its second-quarter earnings due to weather-related shipment issues in the Powder River basin and weaker seaborne coal pricing.

Peabody had previously guided secondquarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of between US$135 million and US$175 million, and an adjusted loss per share of US59¢ to US49¢. It expects adjusted EBITDA will drop by $US60 million, widening the expected loss per share. It blamed the fall on lower production in June — resulting from heavy rains and flash floods in Wyoming’s southern Powder River basin — coupled with weaker prices for Australian metallurgical coal.

WEEK

VOLUME CLOSE CHANGE

WEEK

VOLUME CLOSE CHANGE

North Arrow Mn Alphamin Res GMV Minerals West High Yld RPT Uranium Nevada Sunrise Arianne Phosph Atlanta Gold Cannon Pnt Res Golden Hope Avino Silver Zenyatta Vent Eurasian Minls Great Quest Me Lowell Copper Athabasca Mnls Altitude Res Brazil Res Kootenay Gold Coronado Res

NAR AFM GMV WHY RPT NEV DAN ATG CNP GNH ASM ZEN EMX GQ JDL ABM ALI BRI KTN CRD

239486 35000 69867 13716 80840 26000 180668 102000 913700 21085 23535 343468 23300 21500 11000 34200 16510 233769 54800 30571

0.50 0.23 0.20 0.35 0.35 0.24 0.95 0.09 0.14 0.46 1.31 1.44 0.58 0.48 0.33 0.61 0.15 0.58 0.40 0.27

+ + + + + + + + + + - - - - - - - - - -

0.08 0.06 0.05 0.05 0.04 0.04 0.04 0.04 0.04 0.03 0.12 0.07 0.07 0.06 0.06 0.06 0.05 0.05 0.05 0.04

J U N E 2 9 - J U LY 3 In the coming months the miner is reducing 250 positions, or 25% of its corporate and regional staff, with expected annual savings of up to US$45 million. It looks to cut another 250 jobs at its Australian mines. Peabody expects to incur up to US$25 million in charges in the second quarter related to these activities. Its quarterly results should be out on July 28.

On July 1, Peabody named financial executive Amy Schwetz as its new executive vice-president and chief financial officer.

Solitario Exploration & Royalty jumped 25% to US65¢ per share no news.

U.S. most active issues

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

Peabody Enrgy* BTU 183518 2.63 1.43 1.87 Alcoa* AA 85194 11.61 10.94 11.10 Freeport McMo* FCX 62596 19.96 18.21 18.40 Arch Coal* ACI 58954 0.48 0.32 0.36 Cliffs Nat Rs* CLF 41289 4.89 3.71 3.86 Kinross Gold* KGC 39355 2.35 2.17 2.27 Barrick Gold* ABX 38252 10.99 10.40 10.57 Consol Energy* CNX 31702 23.52 20.28 21.79 Alpha Nat Res* ANR 29964 0.37 0.24 0.29 Vale* VALE 24044 6.19 5.70 5.85

- 0.42 - 0.59 - 1.54 - 0.05 - 0.79 - 0.05 - 0.33 - 0.60 - 0.04 - 0.38

In mid-June, the company and Ely Gold agreed to sell their combined 100% interest in the Mt. Hamilton gold project in Nevada to a subsidiary of Waterton Precious Metals Fund for US$30 million in cash, of which Solitario will receive

US$24 million. The transaction should close shortly. Waterton has also agreed to give Solitario a standby debt facility for the junior to repay its US$5-million loan with RMB Australia Holdings due in late August.

U.S. greatest percentage change

Solitario Ex&* Comstock Mng* Sandstorm Gld* Rhino Res* Banro* Almaden Mnls* General Moly* Tanz Roy Exp* Great Panther* McEwen Mng* US Energy* Peabody Enrgy* Entree Gold* Cliffs Nat Rs* Uranium Ener* Rare Elemt Re* Thompson Crk* Cloud Peak En* Avalon Rare M* Iamgold*

XPL LODE SAND RNO BAA AAU GMO TRX GPL MUX USEG BTU EGI CLF UEC REE TC CLD AVL IAG

U.S. greatest value change

VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE

WEEK

VOLUME CLOSE CHANGE

435 0.65 393 0.65 3278 3.20 50 1.41 5759 0.34 469 0.85 238 0.75 850 0.36 431 0.44 2743 0.98 1107 0.67 183518 2.63 182 0.35 41289 4.89 1135 1.69 610 0.50 1882 0.86 2323 5.22 861 0.22 4641 2.15

Agrium* Alliance Rs P* Sandstorm Gld* Solitario Ex&* Comstock Mng* Mosaic* Royal Gold* Eldorado Gold* Rhino Res* Almaden Mnls* Cabot Corp* Randgold Res* Hi-Crush Part* Rio Tinto* Freeport McMo* Compass Mnls* BHP Billi-BBL* BHP Billi-BHP* US Silica Hld* SunCoke Engy*

0.57 0.55 2.84 1.27 0.30 0.79 0.70 0.31 0.42 0.90 0.38 1.43 0.28 3.71 1.40 0.41 0.74 4.05 0.18 1.89

0.65 + 25.0 0.65 + 22.6 3.20 + 6.6 1.35 + 5.4 0.33 + 5.1 0.85 + 3.7 0.71 + 3.6 0.32 + 2.9 0.43 + 2.8 0.96 + 2.7 0.39 - 41.0 1.87 - 18.3 0.29 - 17.0 3.86 - 16.9 1.41 - 14.0 0.41 - 13.7 0.75 - 13.7 4.16 - 13.6 0.18 - 12.9 1.92 - 12.3

AGU ARLP SAND XPL LODE MOS RGLD EGO RNO AAU CBT GOLD HCLP RIO FCX CMP BBL BHP SLCA SXC

576111 106.84 1682614 24.85 3277856 3.20 435479 0.65 393065 0.65 17238572 46.65 2088296 62.32 3431661 4.09 50169 1.35 469048 0.85 3678772 37.81 1985276 66.55 158655 28.97 2887833 41.04 62596462 18.40 243769 82.51 3220122 39.87 9283797 41.29 2115575 27.21 806173 12.65

+ 2.49 + 0.47 + 0.20 + 0.13 + 0.12 + 0.10 + 0.08 + 0.08 + 0.07 + 0.03 - 2.88 - 2.36 - 2.03 - 1.80 - 1.54 - 1.48 - 1.46 - 1.40 - 1.22 - 1.15

15-07-08 6:08 PM

THE NORTHERN MINER

7

JULY 13-19, 2015

METALS, MINING AND MONEY MARKETS SPOT PRICES

PRODUCER AND DEALER PRICES

COURTESY OF SCOTIABANK

Tuesday, July 7, 2015 Precious Metals Gold Silver Platinum Palladium Base Metals Nickel Copper Lead Zinc

Price (US$/oz.) $1166.25 $15.61 $1064.00 $671.00

Change -8.75 -0.09 -11.00 0.00

Price (US$/tonne) $10730.00 $5325.50 $1722.50 $1940.00

Change -970.00 -264.00 -43.50 -74.00

LME WAREHOUSE LEVELS Metal stocks (in tonnes) held in London Metal Exchange warehouses at opening, July 6, 2015 (change from June 29, 2015 in brackets): Aluminium Alloy 13780 (-560) Aluminium 3567575 (-22250) Copper 321500 (+13850) Lead 171900 (-4400) Nickel 456450 (-2568) Tin 7590 (+480) Zinc 463375 (-1550

Thermal Coal CAPP: US$40.82 per short ton Coal: Central Appalachia, 12,500 Btu, 1.2 S02-R,W: US$53.75 Coal: Powder River Basin, 8,800 Btu, 0.8 S02-R, W: US$9.90 Coal: CME Group Futures Aug. 2015: US$40.87; Sept. 2015: US$41.15 Cobalt: US$14.56/lb.

Copper: US$2.47/lb.

Copper: CME Group Futures Aug. 2015: US$2.50/lb.; Sept.

2015: US$2.50/lb Ferro-Chrome: US$2.18/kg FerroTungsten: US$32.69/kg Ferrovanadium: US$22.23/kg Iridium: NY Dealer Mid-mkt US$525/tr oz.

Iron Ore 62% Fe CFR China-S: US$49.70/tonne Iron Ore Fines: US$51.80/tonne Iron Ore Pellets: US$81.92/tonne Lead: US$0.79/lb.

Magnesium: US$2.22/kg Manganese: US$1.93/kg Molybdenum Oxide: US$6.06/lb.

Phosphate Rock: US$115/tonne Potash: US$307.00/tonne Rhodium: Mid-mkt US$775.00/tr. oz.

Ruthenium: Mid-mkt US$45.00/tr. oz.

Silver: Handy & Harman Base: US$14.98 per oz.; Handy & Harman Fabricated: US$18.43 per oz.

Tantalite Ore: : US$177.08/kg Tin: US$6.45/lb.

Uranium: U3O8, Trade Tech spot price: US$36.50/lb.; The UX Consulting Company spot price: US$36.50/lb.

Zinc: US$0.91/lb.

Prices current July 8, 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

July 6 14593.57 663.33 851.82 154.66 652.79 63.50 151.41

July 3 14682.39 670.58 856.61 151.86 667.73 N/A N/A

July 2 14637.99 671.58 853.19 150.64 664.73 62.65 148.89

July 1 N/A N/A N/A N/A N/A 61.37 145.81

June 30 14553.33 671.49 547.78 150.77 671.64 63.14 149.74

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 59.94 144.74

TSX SHORT POSITIONS

TSX VENTURE SHORT POSITIONS

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

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 July 6 July 3 US$ in C$ 1.2626 1.2571 C$ in US$ 0.7920 0.7955

July 2 1.2566 0.7958

July 1 N/A N/A

June 30 1.2474 0.8017

EXCHANGE RATES (Bank of Canada, July 6, 2015) Currency Aus $ Euro In C$ 0.9495 1.3983 In US$ 0.7520 1.1075

Japan 0.0103 0.00816

Mex P 0.08019 0.06351

SA Rand 0.1018 0.08063

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 £ 1.9721 1.5619

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

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TNM July 13 2015 Issue.indd 7

DAILY METAL PRICES Date July 6 July 3 July 2 July 1 BASE METALS (London Metal Exchange -- Midday official cash/3-month prices, US$ per tonne) Al Alloy 1760/1775 1760/1775 1760/1775 1760/1775 Aluminum 1642/1684.50 1684.50/1722.50 1692/1730 1665/1706 Copper 5568/5589 5761/5778 5760.50/5781 5755/5763.50 Lead 1731.50/1742 1755/1770 1767/1785 1750.50/1768 Nickel 11535/11620 12045/12025 12050/12100 11900/11930 Tin 14300/14250 14150/14150 14540/14475 14250/14200 Zinc 1991.50/1996 2012/2020.50 2030/2035 2025/2030 PRECIOUS METAL PRICES (London fix, LBMA silver price, US$ per troy oz.)

Gold AM 1164.25 1168.25 1164.30 Gold PM 1166.00 1167.95 1165.25 Silver 15.59 15.64 15.61 Platinum 1047.00 1082.00 1083.00 Palladium 670.00 685.00 701.00

1171.70 1168.00 15.63 1082.00 699.00

June 30 1775/1780 1646/1688 5720/5733 1753/1763 11675/11710 13975/13950 1993/1993

1175.00 1171.00 15.70 1078.00 677.00

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 29-JULY 3, 2015 19 New Highs Canadn Plat Central Iron O Chalice Diam Excelsior Mng Frontline Gold Houston Lake I-Minerals Jazz Res Khan Res Laurion Mnl Ex Lithium Americ Metalcorp North Country Otis Gold Playfair Mng Radisson Mng Secova Mtls Stornoway Diam Treasury Metal

257 New Lows Abcourt Mines Aben Res Adex Mining Aftermath Silv Alcoa* Alder Res Alderon Irn O* Alderon Iron O Alexandria Mnl Alloycorp Alpha Nat Res* Altima Res Alto Vent Anglo-Can Mng Apogee Silver Arch Coal* Argentum Silvr Argus Metals Arian Silver Aroway Mnls ASA (Bermuda)* Atlanta Gold Atlatsa Res* Augen Gold Auramex Res Avala Res Avino Silver* Axmin Inc Baja Mng Balmoral Res Barisan Gold Barker Mnrls Bayswater Uran Bear Creek Mng Beaufield Res Benton Cap Berkwood Res BHP Billi-BHP* Big North Grap Bison Gold Res Bitterroot Res Cabot Corp* Cadillac Vent Canada Rare Ea Canadn Int Mnl Canadn Plat Canamex Res Candente Coppr

Cannon Pnt Res Caracara Silvr Central Iron O China Mnls Mng Cliffs Nat Rs* Cloud Peak En* Colombia Crest Colombian Mins Colorado Res Commander Res Compliance Eny Cons Richland Consol Energy* Copper North M Copper One Cornerstone Ca Coronado Res Corsa Coal Corvus Gold Cougar Mnls Cypress Dev Darnley Bay Decade Res Dejour Enterp* Denison Mines Denison Mines* Dorex Minls Durango Res Eagle Plains Eastfield Res Eldorado Gold* Eldorado Gold Emgold Mng Endurance Gold Erin Ventures Ethos Gold Europn Uran Rs Excalibur Res Excellon Res Firestone Vent First Nickel Foran Mng Fortune Mnrls Galore Res Geodex Mnrls Geologix Ex Gitennes Expl Glen Eagle Res Glenmark Cap Global Hunter Gold Bulln Dev Gold Fields* Gold Resource* Goldcorp* Golden Goliath Golden Mnls Golden Mnls* Golden Queen Golden Share M Goldrea Res Goldrock Mines Grande Portage Harmony Gold* Harvest Gold Heatherdale Rs Highbank Res Hunt Mng Huntington Exp Infinito Gold Inspiration Mg Intl Bethl Mng

Intl Tower Hi* Intl Vestr Res Ivernia Killdeer Mnls Kings Bay Gold Kiska Metals Kivalliq Enrgy Klondike Gold Knick Expl Lara Expl Latin Am Mnls Legend Gold Lomiko Mtls MacDonald Mns Marengo Mng Mason Graphite McEwen Mng* MDN Inc MDU Res* Medallion Res Metalcorp Midlands Minls Mindoro Res Mkango Res Monarques Res Montero Mg&Ex MPVC Natural Rs Pt* Network Expl Nevada Expl New Gold New Gold* New Nadina NGEx Res Nighthawk Gold Nippon Dragon Noka Res Nordex North Am En P* North Am En Pa North Am Pall North Am Pot D North Am Tung Northern Gld M Northern Graph Northisle C&G Nubian Res NWM Mng Oceanic Iron O Olivut Res Oracle Mng Orestone Mng Oroco Res Orocobre Pac North West Pac Potash Pac Ridge Expl Paget Mnls Paladin Energy Pan Am Silver* Panoro Minls Peabody Enrgy* Philippine Mtl Pilot Gold Pinecrest Res Platinum Gp M* Platinum Gp Mt Purepoint U QMC Quantum Ml Quartz Mtn Res

Range Engy Res Red Moon Potsh Redstar Gold Reliance Res Resolve Vent Reunion Gold Reva Res Rio Tinto* Riverside Res Romios Gold Rs Ross River Mnl Running Fox Rs Rupert Res Russell Metals Santa Barb Res Santacruz Silv Satori Res Selwyn Res Serengeti Res SGX Res Silver Predatr Silvercorp Mt* SilverCrest M* SilverCrest Mn SnipGold Source Expl Sprott Res Stans Energy Stellar Pac Vt Stikine Energy Stillwater Mg* Stonegate Agri SunCoke Engy* Superior Coppr Tanzania Mnls Taseko Mines* Taseko Mines Teck Res A Teck Res B* Teck Res B Terraco Gold Thompson Creek Thompson Crk* Timmins Gold* Timmins Gold TNR Gold Trevali Mng TriMetals Mng Trio Gold Corp TVI Pacific U3O8 Corp UEX Corp Uranium Res* US Energy* Vangold Res Vantex Res Vendome Res Victory Nickel Volcanic Mtls Wallbridge Mng Walter Energy* West Af Iron O Westminster Rs Xtierra Yamana Gold* Yamana Gold Zazu Metals Zimtu Capital

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15-07-08 6:08 PM

8 JULY 13-19, 2015 THE NORTHERN MINER

Denison, Fission combine forces in the Athabasca DENISON, From Page 1

Lake South (PLS) project and world-class Triple R discovery would fetch in a bidding war that never materialized.

“I think we’re fighting against a perception from Fission shareholders that we were waiting on this big offer from a major uranium producer, and so I’ve been talking all day about why exactly we did this deal,” Fission CEO Dev Randhawa commented during an interview. “I realize now that this is about two things: It’s a great defensive move right now, and I believe it will end up being a great offensive move in the future.

“We could have fallen to a predatory bid at a slightly higher premium, but we’d have lost PLS and all the great work our team has done,”Randhawa said. “What we’re doing here is protecting the asset and putting it into a vehicle with other quality assets under the oversight of an accomplished, joint exploration team. So no one can attack us and we also have a powerful shareholder in Lukas Lundin, who can defend against any hostile moves.”

The senior executive team of the new Denison will draw from both companies. Lundin will be nonexecutive chairman, while Randhawa will be CEO. Ross McElroy will retain the president and chief operating officer positions he holds with Fission.

Dev Randhawa, Fission Uranium CEO.

DENISON MINES

Project geologist Yongxing Liu at Denison Mines’ 60%-owned Wheeler River uranium project, along the eastern edge of the Athabasca basin in northern Saskatchewan. tained lb. Inferred resources include 901,000 tonnes grading 1.3% U3O8 for 26 million contained lb.

The result catapulted Triple R into the big leagues. The deposit now ranks third in the Athabasca in terms of in-situ uranium, behind only Cameco’s McArthur River and Cigar Lake mines.

And the company’s discovery

‘We were out there cranking out great holes and discovering new zones, and we’re at the same price as we were before our resource statement.’

— Dev Randhawa, CEO, Fission Uranium Randhawa expressed frustration over the state of equity markets in light of Fission’s stock performance to start the year. The company has been active at PLS, where it is in the midst of a US$15-million exploration program that includes over 20,000 metres of drilling.

Fission released an impressive maiden resource at on the newly minted Triple R in early January.

The deposit hosts 2.3 million indicated tonnes grading 1.6% uranium oxide (U3O8) for 80 million con-

rate hasn’t slowed down. In March, Fission announced land-based drill hole 15-352 located 500 metres west of Triple R, cutting 28.32% U3O8 over 12 metres. The discovery could be an expansion of the R600W zone.

“We were out there cranking out great holes and discovering new zones, and we’re at the same price as we were before our resource statement,” Randhawa lamented. “I came to the realization that the only thing that could really help us was

an improvement in the general uranium industry. Denison tends to do better than its peers when positive news emerges in the uranium business, and that told me that investors view it as the preferred stock. The question then became: ‘How can we make this happen?’ That’s when talks really got serious.”

The transaction offers Fission safety and exposure to PLS’ inevitable growth, but it’s a major win for Denison, which saw its stock languish in the first half of 2014. The company has advanced a series of assets in the eastern Athabasca, whereas PLS sits on the basin’s southwestern margin.

In an ironic twist Denison had picked up a 60% interest in the Waterbury Lake project — next to Rio Tinto’s (NYSE: RIO; LSE: RIO) Roughrider uranium deposit — from Fission back in early 2013 for $70 million. At the time Randhawa negotiated a spin-out that included the PLS asset.

Denison’s most active asset is its 60% interest in the Wheeler River project in northern Saskatchewan. Cameco (TSX: CCO; NYSE: CCJ) holds a 30% stake in the project, while Japan-based JCU Exploration holds the rest.

Wheeler hosts the Phoenix and Gryphon zones, and boasts indi-

cated resources of 166,400 tonnes grading 19.1% U3O8 for 70.2 million contained lb.

In June Denison announced it would drill 24,000 metres at Wheeler to expand Phoenix and establish a maiden resource at Gryphon, while targeting more discoveries on the property. Denison also has interest in the Midwest, McClean Lake, Waterbury Lake, Mann Lake and Wolly projects, as well as a 22.5% ownership interest in the McClean Lake mill.

“We started looking at the market capitalization of the three or four entities in the Athabasca basin and determined we’re basically just fighting among ourselves,” commented Denison executive chairman Ron Hochstein.

“The market tends to just shift in between the different vehicles, and nobody was really seeing gains.

Now we have the second-largest uranium company in terms of market capitalization and that gives us a lot more flexibility, and so many more options in terms of development, cash flow and financing. I think it was the right time to do it because the market’s going to take off, and this will be the vehicle with the most torque,” he added.

The combined company will control 430 sq. km across the Atha-

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TNM July 13 2015 Issue.indd 8

basca basin and have enough flowthrough capital to fund its exploration campaigns through early 2016.

In May Denison closed a $15-million financing, wherein it issued 12 million flow-through shares priced at $1.25 each. Meanwhile, Fission completed a $17.4-million financing in early April that included 11.6 million flow-through shares priced at $1.50 each.

“From our side the shareholder feedback has been positive, and people tend to like the leverage Triple R provides. We do have to explain a little bit why we’re diversifying into the western Athabasca, since we were traditionally eastern focused. It’s a fantastic asset, and diversity is a great thing for us,” Hochstein said.

Denison has traded within a 52-week window of 83¢ to 86¢, and dropped 27% to start the year en route to an 86¢-per-share close at press time. The company has 506 million shares outstanding for a $436-million market capitalization.

Fission has moved within a 52week range of 65¢ to $1.38, and rose 13% over the past six months en route to a $1.02-per-share close at press time. The company has 386 million shares outstanding for a $394-million market capitalization.

After closing the arrangement, Denison Energy will complete a two-for-one share rollback.

“Retail investors tend took look at things in a portfolio-centric way, and ask us: ‘Why are you selling so low?’ Well, we’re not selling. We’re getting equity in a much stronger company, and we’re merging. Also look at uranium prices. You can’t expect a company with our market capitalization to be overly influenced by anything but the overall uranium market,” Randhawa said.

“It also prepares us on the offensive side when we do transition into a bull market. We’ve got better management, a better team, superior institutional shareholders, a superior group of assets and cash flow from our mill. This makes investing in us simpler, and it gives potential investors great uranium exposure in a higher-quality vehicle,” he added.

Scotia Capital analyst Ben Isaacson has a “sector outperform” rating on Denison, and a $1.75 oneyear price target.

“With two of the world’s best uranium projects now in the same portfolio [Patterson Lake South and Wheeler River], among other prospects, we believe [Denison Energy] should become the go-to name for those looking for uranium project torque on an eventual market recovery,” Isaacson wrote in early July.

15-07-08 6:08 PM

THE NORTHERN MINER JULY 13-19, 2015 9

Mining’s Lost Leaders In 2014, Stratum International released a research report called The Demographic Time Bomb in Mining based on a survey of more than 900 mining professionals.

Equally, some miners have been forced to shed entire leadership teams for reasons of economic necessity or performance.

How many of your top five site-based staff have left in the last 12 months?

That concerning statistic led us to run a follow up survey into staff turnover at leadership levels in mining. We focused on leaders and senior mining professionals, as those are the levels in which Stratum International specialises and because high turnover at the top tends to create a ripple effect throughout the whole organisation.

We called the resulting research report, The Lost Leaders.

More than 450 mining professionals participated in the survey which contained three simple questions: 1. ` Thinking about your current or most recent employer, how many people in the top five site-based management positions have left the organisation in the last 12 months?

2. Thinking about your current or most recent employer, how many people in the top five corporate or executive level strategic positions have left the organisation in the last 12 months?

3. Thinking about your own career intentions, at what point will you consider taking a role with another organisation?

We discovered that senior level staff turnover has reached a level that should cause concern throughout the sector. What’s more, if our respondents expressed intentions regarding their own careers are anything to go by, this is not a trend set to change.

Who’s leaving?

Respondents were most likely to have seen sitebased leaders leave their roles in the previous twelve months. 76% said at least one of the top five sitebased leaders had left in the same period.

As many as 16% had seen five departures. Of course that does not necessarily mean there had been a complete change in leadership in those site-based teams; it is not unheard of for the same role to be vacated more than once in the same 12 month period.

In an industry like mining, that is facing a leadership talent shortage in the near future, these figures should create concern and action.

While there are a number reasons for these itchy feet (poor job security, positive ambition) I believe many mining executives think the ‘psychological contract’ with their employers was broken in the worst of the downturn when so many execs lost their jobs.

One of our headline findings was that only 1% of the respondents thought the industry was sufficiently prepared to close the leadership gap as baby boomers retire.

By Jane Banks

move (72% and 70% respectively vs 65% across the overall sample).

Respondents had seen fewer corporate roles vacated in the preceding year. More than a third (37%) of respondents had seen no change in the leadership and a further quarter had only seen one departure from the HQ leadership team.

That said, a quarter of respondents said they had seen at least three departures from the offsite team in the last year. It’s clear this turnover trend is not restricted to the site.

How many of your top five corporate staff have left in the last 12 months?

Research from EY, quoted in our report, criticised the “hire rapidly in the upswing and shed excess resources in a downturn” approach taken by miners, arguing it results in seasoned pros being lost to the industry (taking early retirement or consultancy roles) and bright new talent being dissuaded from entering mining professions.

The authors of the EY report believe this will create a leadership vacuum that will intensify the war for talent when the market improves.

Some firms, of course, faced impossible financial and operational pressures, and genuinely had no choice but to let good people go. Elsewhere, there may have been more room for flexibility.

We believe any firm that is able should take a longer term perspective and retain top talent throughout a downturn. We also recommend that organisations begin to look now at their leadership pipeline and put a succession strategy in place that considers internal and external talent.

It sounds obvious, yet our previous research found that fewer than one in seven miners have such a strategy in place. If your organisation is one of the few, your foresight is to be congratulated.

The figures will naturally combine people who have chosen to leave and those who have been dismissed or made redundant. Even so, when leadership turnover hits this sort of level, whatever the reason, alarm bells should be ringing.

And from what our respondents told us, the situation shows little sign of improving.

Personal career intentions Two thirds of the survey respondents said they were either already looking for a new role or would consider an offer if they received one today. It’s important to note that the respondents were senior level professionals.

Only one in ten said they planned to stay in their current organisation for at least another 12 months.

Mining operations and project development professionals were most likely to say they wanted a

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If not, I respectfully suggest that creating a succession strategy should rise to the top of your priority list.

Readers can download a copy of the full report by visiting http://www.stratum-international. com/lost-leaders-staff-turnover/ JANE BANKS Principal Consultant, Stratum International T: +1 (0) 202 455 0982 Jane has a 18-year proven track record in International Executive Search, including more than 11 years’ mining industry experience across senior Corporate and Operations roles, having delivered more than 600 searches globally. Specialising in cross-cultural issues, she has been called upon to assist the start-up of numerous multi-billion dollar green-field projects across most emerging markets, including secondments and consulting in-house alongside client teams. Jane heads up Stratum’s North American presence.

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.

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

TNM July 13 2015 Issue.indd 9

15-07-08 6:08 PM

10

JULY 13-19, 2015

THE NORTHERN MINER

Procurement Specialist Saskatoon,Saskatchewan Online Reference No: 62097

Administrator, Contractor Management McArthur River,Saskatchewan Online Reference No: 62135 Your responsibilities will include providing confidential administrative support to the projects, maintenance engineering and maintenance planning groups at McArthur River. Your contributions and the support you provide to these groups will play a significant role in the success of the operation at large.

Underground Boom Truck Operator Musselwhite, Ontario Online Reference No: 62095 As a boom truck operator you will be required to perform lifts of varying nature in an approved manner consistent with current OH&S practices.

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.

In this role you will source a range of materials, equipment and services, conduct RFQ’s/RFP’s, and interact closely with internal and external stakeholders. In your work, you will be contributing to value creation from procurement activities, acting as a service provider to our partners in Saskatchewan operations, as well as participating in continuous improvement of processes and procedures.

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Maclean Bolter Musselwhite, Ontario Online Reference No: 62093 The primary role of Bolter is to inspect existing underground headings, scale loose rocks and install ground support to stabilize rock mass and ensure safety. The tasks may involve the operation of scaling bars, pneumatic hand-held drills, use of rubber-tired underground mobile equipment such as LHD (Load-Haul-Dump) units, mechanized bolters, scissor trucks, shotcrete sprayers and other support vehicles in a confined environment.

Regional Supervisor, Mineral Exploration and Development Timmins, Ontario Online Reference No: 62160

Are you looking for an opportunity to further develop your leadership skills while using your knowledge of the mining and exploration industry in leading the delivery of the Mineral Exploration and Development Program? If so, consider this opportunity to further advance mineral exploration and development in the North.

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.

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

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.

One listing is all you need

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.

Print Edition.

Associate Director, Global Mining Management Toronto, Ontario, Online Reference No: 61979

Circulated to TNM 20K+ readership

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4 INDUSTRY JOB BOARDS

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.

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.

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.

CANADIAN Mining Journal

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.

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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.

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TNM July 13 2015 Issue.indd 10

15-07-08 6:08 PM

THE NORTHERN MINER JULY 13-19, 2015 11

Silver Standard management talks success at Marigold

SILVER STANDARD RESOURCES

A shovel loads a haul truck at Silver Standard Resources Marigold gold mine in Humboldt County, Nevada.

SILVER STANDARD, From Page 1

on our margins. We ended up in a reduction in reserves compared to the previous owners, but we maintained the resource base. We found that the mining for margins strategy, along with our operational excellence program, really helped us find the sweet spot,” vice-president technical and project development Jonathan Gilligan added.

And the proof is in the operating metrics. The company has dropped its total cash costs for four consecutive quarters, down from US$1,135 per oz. in June 2014 to US$728 per oz. at the end of March. Silver Standard estimates that Marigold’s all-in sustaining costs should be around US$1,090 per oz. this year, and average US$986 per oz. over the mine’s life.

The mine cranked out 56,000 oz. gold during the first quarter, which equated to revenues of US$68 million and income from operations of US$27 million. Marigold is expected to produce between 160,000 and 175,000 oz. gold in 2015 at total cash costs ranging from US$725 to US$800 per oz.

Perhaps more exciting than the operational improvements, however, have been Silver Standard’s recent forays with the drill bit that have yielded new discoveries at Marigold’s brownfield pits. Gilligan said that the company put together a brainstorm program with the experienced geological team at the project and essentially gave them “free rein” to recommend targets. The result was a drill program at the historic 8 South pit area.

“When we spoke with the team on-site there were a lot of ideas and areas they had always wanted to test, but had never really had an opportunity. So when we joined up we sat down and said: ‘Where do you think we’ll make the next discovery, and how would it fit into the production schedule?’

The targets at 8 South really emerged from those discussions,” Gilligan elaborated.

“That area had originally been a high-grade pit, but people sort of forgot about it after the mine transitioned from a concentrator to a heap-leach operation, and previous operators needed larger ore volumes,” he continued.

The 8 South area produced 530,000 oz. at a grade of 1.51 grams gold when it supported a milling operation between 1987 and 1994.

The gold distribution in the area is controlled by the Sear Fault, a north-striking, high-angle fault, which extends south of the historic mining zone.

In December Silver Standard released a resource estimate for the 8 South Extension that includes 2.1 million indicated tonnes grading 1.2 grams gold for 82,000 contained oz. Inferred resources total

TNM July 13 2015 Issue.indd 11

1.7 million tonnes of 1.41 grams gold for 75,000 contained oz.

The company continued its drilling at the target through the first half of the year, and the investment has paid off.

Silver Standard completed 113 drill holes over 26 km at the new 8 South Extension through the end of June. The intercepts highlight a weighted-average grade of 1.25 grams gold at an average 61 metres

thick. Silver Standard also found a new area called 8D — located northwest along trend of 8 South — that grades 1.2 gold over an average 73 metres.

“What we have with the 8D target is the northern extension of a north–south structure running through 8 South that’s slightly displaced to the west. Part of that is likely related to depth, but there’s probably another little structure

in there that supports the mineralization. We need a bit more drilling to really grasp what’s going on down there,” Gilligan explained.

“Given the great results we decided to go hard at it for another two or three months before compiling a resource update. We think that’s something that will be very worthwhile for the market,” he added.

Silver Standard announced it would boost its annual propertywide exploration expenditures at Marigold by US$2.4 million to US$4.2 million. Part of that capital will go towards another 13,000 metres of drilling at the 8 South Extension targets.

Silver Standard’s other tentpole operation is the Pirquitas mine in Argentina, where it could produce 10 million oz. silver this year at cash costs ranging from US$11.50 to US$12.50 per payable oz. sold. With two relatively steady operations, the company can resume its search for new acquisition opportunities.

“Initially when the market found out we were looking for acquisitions the stuff coming across the desk wasn’t of high quality. I think as you’ve seen the majors like Goldcorp and Barrick be rewarded

for focusing on ‘core portfolios’ and cash regeneration, it’s validated that strategy, and we’ve seen a willingness to maybe go further down that path and possibly vend more assets,” Smith said.

“We’re seeing more of that come to market, and that’s been beneficial. The second line is that some things have been on the market for a while now, and that’s been wearing down prices.”

BMO Capital Markets analyst Andrew Kaip has an “outperform” rating on Silver Standard, along with a $8-per-share price target.

BMO Research wrote on July 6 that the exploration funding allocated to Marigold is “warranted,” and noted that South 8 “delivers positive exploration results that underscore the potential for further discoveries at Marigold.”

Silver Standard has traded within a 52-week window of $4.47 to $11.05, and jumped nearly 31%, or $1.74 since early March, en route to a $7.45-per-share close at press time. The company has 81 million shares outstanding for a $605.4-million press-time market capitalization, and reported $358 million in working capital at the end of March.

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SUPPLIERS NEWS Canpotex has awarded National Steel Car a $70-million contract to manufacture 700 railcars that will haul potash to coastal ports in North America.

The two companies have done a lot of business together. Since 1999 Canpotex has spent more than $500 million on about 7,000 railcars from the Hamilton, Ontario manufacturer.

“The quality and innovative design of the railcars from National Steel Car will ensure we continue to reliably deliver the potash our global customers need, when they need it,” said Steve Dechka, Canpotex president and CEO. The railcars are custom designed in Canada to conform to the specific properties of potash, which allows Canpotex to optimize the amount of tonnes per railcar and maximize the number of railcars per train. Canpotex said the railcars have increased overall train efficiencies by 90%, cutting both costs and greenhouse gas emissions, while

Canpotex hires National Steel Car to build railcars

PHOTO BY M. NELSON

A Canpotex train hauling its custom-designed railcars west, near Taft, British Columbia. boosting the firm’s capacity.

Since 2000, the specialty railcars have allowed the shipper to double its annual rail shipments without adding a train.

“We are delighted Canpotex’s $70 million investment in railcar capacity will stay in Canada by working with National

Steel Car and their Hamilton employees,” Dechka said.

“This order alone will secure approximately seven months of employment for over 400 of our 2,400 employees, and will provide significant additional benefits to our province,” said Gregory J. Aziz, National Steel Car’s

chairman and CEO. Founded in 1972, Canpotex is the exclusive offshore marketing and export company owned by the three big Saskatchewan p o t a s h p r o d u c e r s : Agri um (TSX: AGU; NYSE: AGU), Mosaic (NYSE: MOS) and Potash Corp. of Saskatchewan (TSX:

POT; NYSE: POT). Canpotex ships more than 10 million tonnes of potash per year, which represents $3 billion in exports.

National Steel Car has been in business for more than a century, specializing in railroad freight and tank car manufacturing.

Galaxy Broadband locks up more capacity Satellite communications supplier Galaxy Broadband has signed a long term capacity agreement with Telesat to lock up “Kaband” capacity on its Anik F2 satellite.

With the added capacity, combined with previously contracted space on Telesat’s Anik F3 satellite, Galaxy has secured high performance Ka-band coverage for the long term to serve customers

in Canada’s north.

“This signing further confirms the commitment of Galaxy Broadband to supporting Canada’s remote regions including the Arctic with excellent enterprise highspeed satellite internet and VoIP services,” said Rick Hodgkinson, Galaxy president and CEO. “Our latest contract with Telesat enables Galaxy Broadband to provide long term assurance to our

current customers while offering potential clients a high performing solution they can count on for many years.”

“We are very pleased that Telesat’s advanced satellite services are enabling customers like Galaxy Broadband to excel in meeting the communications challenges of their commercial clients operating in Canada’s North,” said Michele Beck, Telesat vice-

president of North American sales.

Founded in 1992, Galaxy Broadband specializes in providing high quality, enterprise-grade communications to customers in the oil and gas, mining, construction and pipeline industries in North America. The firm’s head office is in Mississauga, Ontario, with regional offices in Alberta, B.C. and Texas.

Telesat is specializes in providing satellite-delivered communications solutions worldwide to broadcast, telecom, corporate and government customers. In 1972, the Ottawa-headquartered company launched into orbit the world’s first commercial domestic communications satellite. Today Telesat has a fleet of 14 satellites, plus one under construction.

Most procurement decisions made at mine sites in North America, survey says A recent survey of more than 100 mine managers found that a majority of North American miners make procurement decisions at the mine site.

The survey, which was conducted by Timetric, a U.K.-

based data, analysis and advisory services provider, asked mine managers to specify where decisions were made regarding the purchase of heavy mobile mining equipment.

Amongst North American mine

managers, 65% said procurement decisions were made at the mine site. A quarter of North American respondents said decisions came down from a centralized office within the country.

The survey found that the North

Americans are anomalous in their preference for decentralized decision making.

Just 40% of respondents from Africa, Asia and Latin America said buying decisions were made at the mine site.

Looking ahead, 28% of respondents expected more centralization in the years ahead, while 12% of respondents anticipate a decrease in centralization. The majority said they do not expect any change at all.

Pacific Coast Terminals upgrade underway Pacific Coast Terminals and K+S Group’s Canadian subsidiary K+S Potash Canada have begun modifying the existing bulk handling facility in Port Moody, B.C. The facility is being transformed so it can handle material from the Legacy potash operation which K+S is developing in Saskatchewan. Potash products from Legacy will be stored at the site and transported to vessels des-

TNM July 13 2015 Issue.indd 13

tined for international customers.

In 2014 the two firms signed an exclusive, long-term agreement that called for the upgrade at Port Moody.

This past spring Pacific Coast Terminals got the required permit to go ahead with the project, which includes building a railcarunloading building and potashstorage warehouse. In addition, upgrades are planned for the water treatment facilities and

ship loading equipment.

“We have a very important relationship with Pacific Coast Terminals,” said Ulrich Lamp, president and CEO of K+S Potash Canada.

“The expansion of our operations allows for a greater contribution to the City of Port Moody in terms of new jobs, additional municipal taxes, and increased support to local community organizations and events,” said Lorne

Friberg, president and CEO of Pacific Coast Terminals.

Completion of the new potash handling facility is planned for late 2016.

K+S Group has been in the mining and processing business for 125 years. The company main products are potash and salt, which are used for agriculture, food, road safety and industrial processes.

The Legacy potash solution mine and production facility is under

construction near Moose Jaw, Saskatchewan. Commissioning is expected in the summer of 2016.

Established in 1929, Pacific Coast Terminals owns and operates a bulk materials handling facility located in the inner harbour of Port Metro Vancouver, in Port Moody, B.C. The firm handles more than 5 million tonnes of cargo annually, including dry bulk solid sulphur and liquid glycol.

15-07-08 6:08 PM

14 JULY 13-19, 2015 THE NORTHERN MINER

Western Potash’s new design attracts Chinese investment

Patricio Varas, Western Potash president and CEO.

A truck on Western Potash’s Milestone potash property in southern Saskatchewan, 30 km southeast of Regina.

WESTERN, From Page 1

salt (NaCl) to surface where you need a huge industrial complex to get rid of the salt and process the potash so it simplifies the process,” says Patricio Varas, the company’s president and chief executive officer, adding that there are no markets for NaCl in Saskatchewan, which is why there are huge piles of it at most of the potash operations in the province.

“This process hasn’t been done here in Canada, but there is no reason why it wouldn’t work here, and it could even work better,” he says. Varas explains that at Intrepid Potash’s Moab mine,

for instance, which has been operating now for about a decade, the beds are thinner, more structurally complex, and the ore is faulted. In Saskatchewan, by contrast, the beds are generally flat and much thicker. Milestone’s beds are 5 to 6 metres thick, he says, and the deposit has good grade and “great temperatures.”

Western Potash’s pilot study, released earlier this month, envisions the simultaneous operation of three pilot production caverns and the project is estimated to produce 146,000 tonnes per year at an operating cost of $80 per tonne (excluding logistics and royalties).

The mine life is estimated at 12 years with an after-tax and after-royalties internal rate of return of 25.2% and an after-tax and royalties net present value of $56.7 million.

“We have to do what the market will bear,” Varas says in answer to a question about whether he would have preferred to stick with the initial operating plan.

“The market is just not interested in big capex projects, and it doesn’t matter whether you’re a big company or a smaller one.

Even the big companies like Rio Tinto and BHP are shying away from the big projects.”

As for the new Chinese inves-

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WESTERN POTASH

tor, Varas says it clearly saw Western Potash as a bargain.

“They’ve done a number of deals that are more in the electric power sector, but they saw us as a great opportunity and an undervalued opportunity and of course China is a big market for potash and the potash market is also growing in Southeast Asia.”

wood Holdings Corp., through a joint-venture company called CBC (Canada) Holding Corp., acquired 45 million newly issued common shares at a price of 71¢ per share for proceeds of $32 million, taking a 19.9% stake in the company.

Under Western Potash’s latest deal, Beijing Tairui is acquiring about 249 million shares at a price of 32¢ per share for its 51% stake.

“CBC Holdings has a right to maintain their interest,” Varas

‘The market is not interested in big capex projects, and it doesn’t matter whether you’re a big company or a smaller one.’

— Patricio Varas, president and CEO, Western Potash Varas adds that Beijing Tairui is seeking a dual listing in Hong Kong and in China, and that this deal will bring the firm a step closer to that goal by meeting some of the listing requirements of the Hong Kong Stock Exchange, which he says include having revenues and being in production within two years.

Beijing Tairui isn’t the first Chinese company to invest in Western Potash. In June 2013, China BlueChemical and Bene-

says. “They are aware of this transaction because one of their people is on our board, so now they have to let us know whether they want to participate or to what level they want to participate.

“In these markets, even for CBC Holdings, a $3-billion project is a big bite, so if we can get working and get this into construction I think they’ll be thrilled, and the off-take is really what they’re after.”

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

Latest Jobs

Full Time

Drillers working on the Milestone potash project in 2011.

TNM July 13 2015 Issue.indd 14

WESTERN POTASH

15-07-08 6:08 PM

THE NORTHERN MINER JULY 13-19, 2015 15

C O M M E N TA R Y

Finding the hidden silver: Asset tracing and recovery in mining disputes

Post-judgment, compa- or she learns funds in their New structures involved only make corporate intelligence, asset tracing The eponymous hero of nies are finding that sig- York and Swiss bank accounts this work more challenging. and enforcement business. Having Joseph Conrad’s novel nificant investment is have been frozen on the same day.

Returning to our friend Nos- graduated from Oxford University Nostromo is an “incoroften required to enforce with a degree in law, he is a U.K.ruptible” Italian enan award. For example, qualified solicitor who practised in trusted by the English Canadian miner Khan Reboth London and Hong Kong for owner of a silver mine sources recently raised $2 Stephenson Harwood. After leaving with safeguarding its million through a private the law, he enjoyed a number of riches. The setting is the issue of shares to enforce years in the investigative sector, latfictional South American terly as a partner at a leading global country of Costaguana, its $104-million award

BY DANIEL HALL risk-management consultancy. He where all is not well. A against Mongolia.

SPECIAL TO THE spent 10 years investigating fraud revolutionary power has For mining companies, NORTHERN MINER and financial crime before founding seized control of the caprecovery work against Other major challenges stem tromo, whose treachery goes un- Focus, and has particular experiital and is keen, for good measure, sovereign states poses unique to secure the silver as well. To pre- challenges. The hurdles facing from issues of sovereign immu- noticed and unpunished for many ence in sovereign disputes.

With offices in the U.S. and the vent this, Nostromo is instructed Western mining companies that nity, as well as the inconvenient years, his story offers a sobering to smuggle the silver out of coun- have secured judgments in inves- fact that major assets linked to a lesson: asset recovery work is dif- U.K. — including New York and try, to be sold abroad. All does not tor-state disputes include the grad- state (mines, licences, infrastruc- ficult and there are no quick fixes, London — Burford Capital works go to plan, however, when Nos- ual realization that a judgment is ture) tend be owned by state- all the more so in the context of with businesses to finance their legal fees and expenses, monetize tromo’s ship is sunk. Fortunately, not always “as good as gold,” as owned companies, which have a mining disputes.

It is, nonetheless, worth the fight claims, transfer risk, provide operNostromo and the silver make it some states feel no pressure to separate corporate personality.

The ability to pursue the assets of given the right tools. Although ating expenses or acquire judgonto a lifeboat, and our not-so-in- settle a debt. corruptible hero proceeds to hide Strategies to overcome such in- state-owned companies as part of (spoiler alert) perhaps not the ments. Burford also serves as an the ingots offshore (literally) on a transigence include seizing state- the enforcement of a judgment shotgun that ultimately ends Nos- investment banker to law firms to deserted island for himself. owned assets in jurisdictions ame- against a state depends on the tromo’s winning streak at the end fund case expenses, offer risk sharing solutions, and provide working Conrad might as well have been nable to enforcement. The attitude strength of the connection you are of the novel. describing the world of contempo- of a foreign government official able to make between state and — Daniel Hall is a director and co- capital. Please visit www.burfordrary international mining dis- can change very quickly after he company. The murky company head of Burford Capital’s global capital.com for more information. putes, which share a number of the same essential ingredients as his novel: the lure of riches in faraway places; political instability; unsa100 Years voury characters; stolen assets; and offshore havens. This is a world that is all too familiar to a number of players in the Canadian mining industry.

Just recently, subsidiaries of B.C.-based Pacific Wildcat Resources filed a claim with the International Centre for Settlement of Investment Disputes (ICSID) against Kenya, after the state allegedly revoked their licences to extract rare earth minerals at a location near Mombasa. The timing was conspicuous — news of the revocation came several days after Pacific Wildcat announced the presence of large deposits at the site.

In August 2014, Vancouverbased Bear Creek Mining filed an ICSID claim against Peru over the alleged revocation of its rights to a silver mine (silver mining ventures go wrong in real South American countries, too). The case is pending while the list of analogous disputes around the world — from Kyrgyzstan to Venezuela — grows.

We track these kinds of disputes very closely at my firm. As co-head of Burford Capital’s global intelligence, asset tracing and enforcement business, I find there are two types of mining disputes that generally cross my desk: pre- and postjudgment.

It’s well known that companies COMPLETE UP-TO-DATE TRUSTWORTHY involved in ICSID claims often require outside financing given the cost and complexity of pursuing such matters.

There is also a growing need for advisory services during the preThe industry doesn’t take a break Reporting with integrity since 1915, The Northern Miner takes a 360 judgment phase of disputes. The and neither does The Northern The Northern Miner writers travel degree look at the industry and Miner. New articles are published to mining projects world-wide and goal is to develop intelligence in delivers prioritized, reliable news every day and delivered to our deliver authoritative, first-hand support of ongoing legal proceedand analysis to our readers. No readers’ inboxes with a daily email insight. angle is left uncovered. ings and, crucially, clarify any connewsletter. cerns about the recoverability of an award once it is handed down.

Often, the first enforcement strategy in a standard commercial dispute is to freeze any interest in assets at the core of the dispute Register your 4-week free trial at: itself, such as real estate, ships, northernminer.com/subscribe/freetrial.aspx liquid funds, etc.

When mining assets have been For more information about The Northern Miner, or for help on registering expropriated that is usually not a to your free one month trial, please contact Customer Service at: realistic option, and a miner is info@northernminer.com or call 1-888-502-3456 thrown straight into the more challenging requirements of crossborder asset tracing and recovery.

The attitude of a foreign government official can change very quickly after he or she learns funds in their New York and Swiss bank accounts have been frozen.

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16 JULY 13-19, 2015 THE NORTHERN MINER

Canarc to acquire fully permitted project in Mexico

CANARC RESOURCES

Canarc Resources project manager Louis Garcia (left) and CEO Catalin Chilosflischi at the El Compas gold-silver project in Zacatecas, Mexico.

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TNM July 13 2015 Issue.indd 16

BY TRISH SAYWELL

Catalin Chiloflischi joined Canarc Resource (TSX: CCM; USOTC: CRCUF) as its CEO in January 2014, partly because he felt confident the junior could mirror the success in Mexico that its founder and chairman, Bradford Cooke, had achieved at another company he created called Endeavour Silver (TSX: EDR; NYSE: EXK).

Chiloflischi describes how Cooke built up Endeavour into a strong mid-tier silver-gold mining company through strategic acquisitions. He targeted distressed mines in historic districts that held the potential for operational turnarounds, and discoveries that could be fasttracked to production to drive organic growth. Endeavour acquired its Guanacevi mine in Durango state in May 2004. After this acquisition came Cooke’s second mine in Mexico — Bolanitos in Guanajuato state — in May 2007, and a third mine — El Cubo, also in Guanajuato state — in July 2012.

“Brad has built three of his mines by looking for assets that have potential and can be turned around and grown,” Chiloflischi says in a telephone interview from Mexico. “Their first asset, Guanacevi, just had a mill. When they built that asset ten years ago there were no resources and they were mining within six months of closing the deal, and they are still mining there today. They increased the resources there two or three times.”

Canarc Resource has an nounced that it plans to purchase 100% of Oro Silver Resources, which owns the fully permitted El Compas gold-silver property in Mexico’s Zacatecas state. Oro Silver Resources is wholly-owned by Marlin Gold Mining (TSXV: MLN; US-OTC: MLNGF).

Under the proposed transaction on July 6, Canarc would issue Marlin 19 million Canarc shares in exchange for its 100%owned stake in the company, making Marlin Canarc’s largest shareholder, with a 10% stake.

The agreement grants Canarc until Sept. 30 to complete its due diligence on the 29 sq. km

property.

If the deal goes ahead, Marlin will get one seat on Canarc’s board and keep the Altiplano royalty buyback option, where it can repurchase a 1.5% net smelter return royalty (NSR) on certain mining claims for US$1.5 million.

It will also receive a 1.5% NSR on all non-Altiplano claims that are not associated with the royalty.

Akiba Leisman, Marlin’s executive chairman and interim CEO, said that by partnering with Canarc, Marlin could leverage the company’s expertise in advancing projects like El Compas in Mexico, and that his management team looked forward to receiving valuable royalty streams. Leisman could not be reached for comment before press time.

“Immediately after Wexford Capital became the controlling shareholder of Marlin in August 2012, it became clear that El Compas was going to be a lower priority for the company,” Leisman said in a statement. “Of the $10.6 million in capital spent on the project by Marlin’s predecessors, less than $500,000 was spent by Marlin since this time. We believe that El Compas could be a significant precious metal producer ... but our focus on the company’s La Trinidad mine and the Commonwealth project will not allow us to give this project the attention it deserves.”

cyanide plants that could be available for purchase,” he says.

First, however, Canarc will complete two to three months of engineering work and update the project’s 2014 preliminary economic assessment. Based on the previous work at El Compas, Canarc estimates it would cost US$15 million to build a 400-tonne-per-day operation.

In the meantime, Canarc is looking for more projects in Mexico to add to its portfolio.

“We want to turn Canarc into a producing company, and our New Polaris project in B.C. is still about three and a half years away from production, and this project is 18 months away, so we’re looking for more,” he says. “One of the reasons why we’re excited about this acquisition is because we can leverage into our contacts and be successful here, and avoid the pitfalls that others might make when they’re first starting out in Mexico.”

Chiloflischi also notes that it’s a good time to be on the acquisition trail, because the junior gold mining sector is undervalued and ripe for consolidation. “Mining is going through difficult times, and there are still some good projects around that we feel we can purchase on favourable terms, and which present significant potential for a turnaround.”

The El Compas project is host to a number of gold-bearing veins

‘It’s not a big operation, and the benefit we have is that through our contacts in Mexico we have already identified a number of cyanide plants that could be available for purchase.’

— Catalin Chiloflischi, CEO, Canarc Resource Chiloflischi notes that acquiring a fully permitted project in one of the world’s most prolific gold-silver districts would help Canarc become a producing gold-silver company. He says that when he joined the company, Canarc had a dual focus.

One was to advance its New Polaris gold project in northern B.C., and the other to leverage management’s experience in operating gold and silver mines in Mexico.

“We believe this project is a good fit for us,” he says. “It comes with a big land package and has potential along the trend to make it into a significant mine over the coming years.” Chiloflischi points out that Zacatecas is a promining jurisdiction and home to major mines, and that Marlin Gold had no difficulty permitting the proposed cyanide plant at El Compas. “This is an underground mine with a cyanide circuit, which is a big thing in Mexico. In some states it’s hard, if not impossible, to permit a cyanide plant ...

Marlin got the permit recently and as far as we know, without too much hassle.”

The mining executive says that if a production decision is made after the transaction closes at the end of September, it would take 12–18 months to build an underground mine and processing facilities, with construction underway as early as January 2016.

“It’s not a big operation, and the benefit we have is that through our contacts in Mexico we have already identified a number of

identified at surface. These veins were mined via underground mining by a private Mexican company. Historic production records are unavailable, but Marlin has confirmed that high-grade gold and silver mineralization exists within at least two of the vein structures — the El Compas vein and the El Orito vein.

El Compas has an indicated resource of 524,000 tonnes grading 4.38 grams gold per tonne and 65.53 grams silver per tonne.

Inferred resources measure 419,100 tonnes averaging 3.98 grams gold and 47.57 grams silver. The resource estimate was based on a cut-off grade of 2 grams gold per tonne and 86 drill holes completed between 2005 and 2010.

“The resource of 150,000 goldequivalent ounces allows us to contemplate production of 30,000 oz. a year — giving us a five-year mine life — but we’re confident that with additional drilling this resource could increase significantly,” Chiloflischi says.

Nearby mines in the region include Capstone Mining’s (TSX: CS; US-OTC: CSFFF) Cozamin copper-gold mine, 10 km north of El Compas; Fresnillo’s Fresnillo silver mine, 55 km northwest; and Penoles’ Francisco Madero zinc-gold-silver mine, 17 km northwest.

At press time Canarc’s shares traded at 5.5¢ per share within a 52-week price range of 2.5¢ to 7.5¢.

Marlin’s shares traded at 48¢ within a 52-week price range of 38¢ to $1.50.

15-07-08 6:09 PM