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Galantas Gold Gets permission to go underground in Ireland $3.99 • JUNE 29-JULY 5, 2015 • VOL. 101, NO. 20 • SINCE 1915
Antioquia to proceed with underground mine at Cisneros at Parcoy,” Jim Decker, For a penny stock, Antiothe company’s executive quia Gold (TSXV: AGD; vice-president, says in an US-OTC: AGDXF) sure interview from his office has a lot of firepower bein Calgary. “Cisneros and hind it. Parcoy are both highConsorcio Minero grade deposits that get Horizonte (CMH), a priricher at depth, and so vately held mining comthey recognized the type pany in Peru, learned about Antioquia’s Cisne- BY TRISH SAYWELL of deposit we had and got interested, and have inros project in Colomvested in us ever since.” bia about five years ago, Antioquia acquired the 56.2 sq. and since then has become the junior’s largest shareholder, with a km Cisneros property — where artisanal miners have been active 54% ownership stake. CMH will also pony up half of for decades — in two deals in the US$40 million Antioquia needs June 2007 and October 2008. It for an underground mine at Cisne- paid US$2 million for the land ros, freeing the junior from having package and committed to spend to raise money through a dilutive another US$2 million on exploration by 2010. equity financing. “When offered the deal, I made The rest of the funds will come from the cash expected by next a site visit and took five random year from the small, 500-tonne-per grab samples from three areas, and day mining operation. Antioquia all of them produced gold results, says the underground mine, 55 km the best being 45 grams gold per northeast of Medellin, will operate tonne,” Decker recalls. “The rest is history.” by mid-2016. Several years and 209 drill holes “CMH were looking for opportunities outside of Peru and were later, Antioquia reported a reparticularly attracted to us because source on two of the deposits on of the similarity of our high-grade the property — Guayabito and gold deposit to their existing mine See ANTIOQUIA, Page 8
Argonaut Gold 3
Benefits from land deal with Richmont Mines
VANCOUVER — It’s been over a decade of preparation for Avnel Gold Mining (TSX: AVK) at its Kalana Main deposit in southwestern Mali, but now the company is on a path towards turning the small, former Soviet-run underground gold mine into a largerscale open-pit operation. The company is infill-drilling 30,000 metres to bulk up the resource and define its definitive feasibility study, due early next year. So far, the results suggest the effort has been well worth it, as drilling has intercepted mineralization extensions within and around the resource pit shell. The latest intercepts include 100.3 grams gold per tonne over 10 metres, with orebody extensions in the north returning 6.7 grams gold over 3 metres and 2.1 grams gold over 13 metres. The resource at Kalana has climbed ever since Avnel’s former joint-venture partner Iamgold
TNM June 29 2015 Issue.indd 1
(TSX: IMG; NYSE: IAG) poured $32-million worth of work into the project between 2009 and 2011. But when a military coup destabilized the country in early 2012, Iamgold walked away before vesting its stake, and left Avnel with full ownership. Since then, the junior has operated a small, largely unprofitable 140-tonne-per-day underground mine as a gambit for the local community’s transition to the proposed open-pit operation it sees in Kalana. In preparation, Avnel put out the preliminary economic assessment (PEA) early last year based on a 1.25 million oz. gold resource in 8.5 million indicated tonnes grading 4.53 grams gold, and 250,000 oz. gold in 2.1 million inferred tonnes grading 3.76 grams gold, using a 0.9 gram gold cut-off. The PEA outlines a combined gravity and carbon-in-leach processing plant with a 138,000 oz. gold annual production in the first See AVNEL, Page 2
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Red Pine updates Exploration re Wawa prsource at oject
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Corvus CEO sees exploration upside at North Bullfrog Your
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CORVUS GOLD
Geologists inspect samples inside the core tent at Corvus Gold’s North Bullfrog gold-silver project in Nevada. BY MATTHEW KEEVIL
VANCOUVER — Corvus Gold (TSX: KOR) hit a milestone with the release of a preliminary economic assessment (PEA) on its 75 sq. km North Bullfrog gold-silver project 10 km north of Beatty, Nev. The study has intriguing economics, but CEO Jeff Pontius is more excited about an upcoming explo-
ration drill campaign on untested targets in the east. The company first approached North Bullfrog five years ago to target outcropping, low-grade mineralization for a heap-leach mining operation. The market was bolstered by higher gold prices at the time, and Corvus sat on a relatively greenfield land po-
Perseverance pays off Paladin Energy wins for Avnel at Kalana right to own Canadian in Mali uranium mine BY LESLEY STOKES
Canad
Pages 9-13
Skeena
BY TRISH SAYWELL
In a historic decision, the Canadian government has approved Australia’s Paladin Energy (TSX: PDN) as the majority owner of a uranium mine in Newfoundland and Labrador. Until now, the government’s Non-Resident Ownership Policy (NROP) has barred most nonCanadian companies from owning more than 49% of a producing uranium mine in the country. In 2011 Paladin acquired its 100%-owned Michelin uranium project, 140 km northeast of the town of Happy Valley-Goose Bay, and the company said receiving the waiver “became vital in forwarding progress” on the project. A key component of winning approval was showing that no Canadian company wanted to take the lead on the project. “There was no one else who was found that was ready, willing and able to jump in and take on the majority of the project,” Greg Taylor, the company’s Toronto-based spokesman,
tells The Northern Miner. “We received letters of support for our application from Cameco and Denison.” Taylor adds that there was nothing unusual about the decision’s timing, and that Paladin had worked with government officials, local communities and a number of associated parties for well over a year. Although there were informal discussions beforehand, president and chief executive John Borshoff sent the company’s first letter to Natural Resources Canada on Jan. 21, 2015. “This is going to be a billiondollar-plus capital project requiring extensive technical knowledge of uranium and uranium production and processing, and all of the other issues related to uranium,” Taylor says. “It’s not something that just any Canadian miner could do, because uranium is special. It’s different. One of the challenges that we at Paladin have been talking about for a decade is
sition, 8 km north of Barrick Gold’s (TSX: ABX; NYSE: ABX) past-producing Bullfrog mine. The goal posts shifted for the company, however, when it made the promising Yellowjacket discovery, which holds high-grade, structurally controlled fissure veins and associated stockwork zones. “We went about drilling and sort of serendipitously discovered Yellowjacket, which was a real game changer for us,” Pontius said. “We’ve since come up the structural orientation on the system and figured out we’re looking See CORVUS, Page 17 PM40069240 – PAP Registration #09263
See PALADIN, Page 18
15-06-26 11:17 AM
2 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
Perseverance pays off for Avnel
REGULAR DEPARTMENTS
COMPANY INDEX
Careers............................. 18 Editorial.............................. 4 Events................................. 5 Meetings............................ 5 Mining Jobs................. 14-15 Metal Prices........................ 7 Professional Directory.. 16-17 Stock Tables..................... 6-7
Alamos Gold..................... 10 AngloGold Ashanti........ 8,17 Antioquia Gold................... 1 Argonaut Gold.................. 19 Augustine Ventures............ 9 AuRico Gold....................... 9 Avnel Gold Mining............. 1 Barrick Gold........................ 1 Cameco............................ 18 Capstone Mining.............. 13 Carlisle Goldfields............... 9 Claude Resources............. 11 Copper North Mining....... 13 Corvus Gold....................... 1 Dalradian Resources........... 3 Denison Mines.................. 18 Galantas Gold..................... 3 Goldcorp.......................... 11
Iamgold.............................. 1 Imperial Metals................. 13 Independence Gold.......... 13 Kaminak Gold................... 13 Kinross Gold....................... 9 Northern Freegold Res...... 13 Paladin Energy.................... 1 Pretium Resources............ 13 Pure Gold Mining............. 11 Red Eagle Mining............... 8 Red Pine Exploration........... 9 Richmont Mines............ 9,19 Rockhaven Resources....... 13 Rubicon Minerals......... 11,20 Strategic Metals................ 13 Uranium Energy.................. 5 Wesdome Gold Mines........ 9 Western Copper and Gold.13
STORIES WE’RE WORKING ON. . .
Check out our next special section: Technology Metals (July 20).
Since 1915
Avnel Gold Mining (TSX:AVK)
$0.30
$0.28
Drillers at Avnel Gold Mining’s Kalana gold project in southwest Mali. AVNEL, From Page 1
four years, at a low all-in sustaining cost of US$577 per oz. gold. Indicated resources support a 14-year mine life, with annual production sliding to 98,000 oz. gold after year four. Using a US$1,110 per oz. gold price at a 10% discount rate, the project has a US$194million after-tax net present value
and 53% internal rate of return. But since the PEA, Avnel has increased indicated resources by 67% to 2.15 million oz. gold in 15.2 million tonnes grading 4.4 grams gold, and increased the inferred by 24% to 0.38 million oz. in 2.2 million tonnes of 5.33 grams, using a 0.9 gram gold cut-off. The upgrade largely owes to
Court Bailiff Sale of Mineral Tenures Located in Northern B.C. For Sale: Mineral Tenures formerly held by Teuton Resources Corp. (the “Mineral Tenures”) pursuant to a Supreme Court of British Columbia Writ of Seizure and Sale filed on June 3, 2015 in BC Supreme Court Action No. S107895. Approximately 242 Mineral Tenures, primarily in the Stewart – Premier – Sulpherets Eskay Creek - Red Chris region of Northwestern British Columbia, which is also known as the “Golden Triangle”. A complete list of Mineral Tenures, Terms and Bid Documents may be obtained from the Court Bailiff. Warning: This property is offered for mining purposes only and ownership of the title to it does not include ownership of the surface rights or the right to use the surface for residential or recreational purposes. Bidding Ends: Noon, PDT on July 24, 2015 Terms/Conditions: 1.
Bids may be received by the Court Bailiff up to Noon, PDT on Friday, July 24, 2015.
2.
Bids must be accompanied by proof of a free miner’s license held in the bidder’s name.
3.
Bids may be submitted for any or all of the Mineral Tenures, at the bidders’ discretion.
4.
Each bid must be accompanied by a bank draft payable to the Court Bailiff equal to 10% of the bid submitted (the “bid security deposit”).
5.
Only Teuton’s prior interest in the Mineral Tenures is offered for sale. Some or all of the Mineral Tenures may be subject to claims by third parties, or to an interest owned or claimed by third parties. Teuton and some third parties have provided some information in this respect, which may be obtained from the Court Bailiff, but the Court Bailiff has not verified the accuracy of any of the information. There are no warranties or representations as to title or the interest to be acquired by a successful bidder. It is the bidder’s responsibility to determine what interest would be acquired by acquiring Teuton’s interest in each of the Mineral Tenures.
6.
Successful bidders will be notified by the Court Bailiff and will be required to submit a payment to the Court Bailiff by way of bank draft which is equal to the balance of the amount of the bid (the “payment”). The payment must be received by the Court Bailiff within 96 hours of the Court Bailiff’s notice or the bid will be deemed to be withdrawn. Payments will be held by the Court Bailiff pending Court approval. Acceptance by the Court Bailiff of any bid is subject to Court approval.
7.
Successful bidders are responsible for all costs, taxes and/or fees associated with any purchase or transfer of Mineral Tenures.
8.
The highest bid will not necessarily be accepted. The Court Bailiff has complete discretion to accept whichever bids are necessary to recover the outstanding sum.
9.
If a bid is not accepted by the Court Bailiff, the bid security deposit and payment will be fully refunded without delay. However, the bid security deposit and payment are not refundable if a bidder defaults on closing of the purchase after the bidder’s bid has been accepted. In such an instance, the bid security deposit and payment would be forfeited to the Court Bailiff.
10. The Court Bailiff reserves the right to withdraw some or all of the Mineral Tenures from sale at any time. 11. Successful bids must be approved by Court Order before transfer of any Mineral Tenures can proceed. For further information about the Mineral Tenures and/or to obtain a bid form please contact the Court Bailiff: Phone: 604.526.2253 Email: support@aebailiffs.com
TNM June 29 2015 Issue.indd 2
AVNEL GOLD MINING
$0.26
better estimating dilution, along with extra drill-hole data in the western part of the deposit. And with the recent success of the drill program, Avenel chairman and CEO Howard Miller stated in a release that the company is confident the resource can grow after a “meaningful portion” of the inferred resource is converted into the measured and indicated categories, and in-pit resources are added from the extension drilling. Gold mineralization at Kalana consists of shallow-dipping, highgrade quartz veins overprinted by sub-vertical, lower-grade veins within north- to south-trending structural corridors. The overprint has led Avnel to explore the potential for lowercost bulk mining, rather than the selective mining approach outlined in the first PEA. Avnel says that adopting a larger operation than the 3,000 tonnes per day stipulated in the original study will “likely increase” annual production, and improve the economics. Further upside includes the company’s “exploration target” — a poorly constrained resource between 0.7 million and 1 million oz. gold within 5.3 and 6.6 million tonnes, grading between 3.9 and 4.7 grams gold — that sits below the main resource, but within a conceptual pit shell. The company says the target is not being drilled in the current program, but offers upside. Avnel is fully funded to deliver its definitive feasibility study after
$0.24
$0.22
Mar 2015
Apr 2015
closing a $12-million bought-deal financing in early May, but will need more financing before starting open-pit mine development next year. The initial capital cost of US$147
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million for operations could be within the junior’s reach, with its share price carving a route upwards after every milestone. Analysts at Cormark Securities forecast a 70¢-per-share target price, based on a US$1,200 per oz. gold price. Avnel has traded with a 52-week window of 11¢ to 31¢, and closed at 26¢ at press time. The company has 304.3 million shares outstanding for a $79-million market capitalization.
Claims for sale in N. Ont. (Timmins area) Deloro Twp (4) Robb Twp (1) Inquiries: 416-218-9091 or 905-294-5584 or brg47@outlook.com
15-06-24 5:22 PM
THE NORTHERN MINER JUNE 29-JULY 5, 2015 3
Galantas Gold receives permits to build underground mine
GALANTAS GOLD
Machines at Galantas Gold’s Omagh gold project in northern Ireland, 150 km west of Belfast.
BY TRISH SAYWELL
Up until two years ago, Galantas Gold (TSXV: GAL) was producing a flotation concentrate containing gold, silver and lead from its small open-pit gold mine in northern Ireland, 150 km west of Belfast and 32 km from Dalradian Resources’ (TSX: DNA) highgrade Curraghinalt gold deposit. The concentrate Galantas Gold produced was shipped under a life-of-mine offtake agreement to Glencore Xstrata’s Belle Dunne smelter in New Brunswick. The facility in eastern Canada is a lead smelter with a gold circuit. But Galantas Gold’s game plan has always been to build an underground mine after exhausting the open pit, and after a three-year permitting effort, it will do just that. “It will be the first underground gold mine in Ireland,” Roland Phelps, the company’s president and CEO, says in an interview from his office in Omagh. “Our strategy was to drill off enough resource to get cracking and build a small mill to generate a bit of cash, and then use that cash to build a larger mill, and do some more drilling,” Phelps explains. “The future of the mine has always been underground, with the deposit’s (70-degree) steeply dipping veins that are open at depth. That’s where most of the orebody is located.” Phelps estimates building an underground mine will take two years and cost US$16 million. The reason it is so inexpensive, he says, is because the company already owns the land, has a dry tailings facility and a plant that processes 18 to 20 tonnes per hour. The mining executive, who holds degrees in mining engineering and geology, says he is reviewing a number of financing proposals, and these could include lease financing. “We’ve had experience with lease finance and have been successful, and we paid those off
TNM June 29 2015 Issue.indd 3
to the letter,” he says. “So I’m hopeful lease finance will form a considerable part of the total debt burden.” The mine plan envisions mining the two main veins in the deposit — Joshua and Kearney — but Phelps says the company has identified 14 veins on the property that it intends to explore. The Joshua and Kearney veins have a measured and indicated resource of 730,824 tonnes, grading 7.16 grams gold per tonne for 168,284 contained oz. gold. Inferred resources add another 1.2 million tonnes averaging 7.61 grams gold for 293,918 contained oz. gold. Measured and indicated resources discovered so far on the property stand at 818,233 tonnes averaging 6.86 grams gold for 179,986 contained oz. gold, with inferred estimated at 1.4 million tonnes at 7.71 grams for 341,123 contained oz. gold. According to Phelps, at £750 per oz. gold (US$1,174 per oz.), the pretax operating surplus after capital expenditure generates a 72% pretax internal rate of return at an 8% discount rate, and a $26.6-million net present value, based on just 36% of the combined resources of the Joshua and Kearney veins. “It’s a small fish, but it’s a tasty one,” he says. Once the financing is in place, Phelps says it could take six months before Galantas reaches development ore. “That development ore will go
PAC Credits For Sale. [B.C. Portable Assessment Credits, ("PAC")]. PAC Credits are transferable and may be used to pay annual government maintenance payments for mineral claims in B.C. Reasonable pricing. Email: paccredits@gmail.com
straight into the existing mill, so that should give us early cash flow,” he says. “Midway through the second year, we should commercially produce 30,000 oz. gold annually over five years, but we’ve allowed for 15 years of tailings, so that tells you what we think of the potential for finding more resources.” He says Northern Ireland is a great place to do mining, with excel-
lent transportation and engineering infrastructure, an educated workforce and regulations on mineral ownership. “It has interesting mineral prospects, and once you have identified them, you have a clear route to getting your permits,” he says. “It’s like any other part of Western Europe — permitting can be tortuous and time-consuming, but if you do the right studies and
go through the right hoops, you can get your consent.” On that note, Phelps says Omagh will be Ireland’s first underground gold mine, but not its last. “Within the next five years there probably will be two or three other underground gold mines,” he says. “And there are lots of other opportunities in Northern Ireland for additional deposits.”
Amec Foster Wheeler expands capabilities with new hires Casey L. Kelly, PE, PMP, PPMC
Marc E. Orman, PE, GE
Principal Geotechnical Engineer Marc Orman joins Amec Foster Wheeler as one of our Geotechnical Engineering Senior Technical Experts. We look forward to his leadership on some of our most challenging slope stability, tailings and heap leach engineering projects. Marc has worked on mining projects located in some of the wettest, seismically active, steepest terrain, and most difficult soil and rock conditions in the world. Types of projects have included pit slopes, flat and valley fill heap leach pads, tailings impoundments, underground support, and waste dumps with services ranging from field investigations, testing management, analyses, design, permitting, closure, reclamation, CQC/CQA, construction support and expert witness. Marc has Bachelor’s degrees in geophysics and civil engineering and a Master’s degree in geotechnical engineering with a mining emphasis. Marc has a thorough understanding of rock and soil mechanics as related to slope stability and reliability, seepage and deformation. Marc has been adding value to mining projects for more than thirty years. Where some see only problems, Marc has consistently found innovative and creative solutions that resulted in savings for his customers. With his understanding of geology, civil engineering and construction, Marc has a keen understanding of the possibilities to optimize a project to save costs and provide efficient and safe designs, that are environmentally sound and meet project goals. His experience includes projects located throughout North, Central and South America, Asia, Bulgaria, Siberia and West Africa.
Amec Foster Wheeler is pleased to have Casey join our Nevada team. Casey is a leader in civil engineering and will manage our Elko office operations.
Casey has over 23 years’ of experience in the delivery of complex technical capital projects. He has been successful in leading multi-discipline, multi-site engineering teams and stakeholders in order to achieve successful project deliverables. Casey has a proven ability to build key stakeholder relationships and to deliver on customer expectations on schedule and on budget. Areas of expertise include portfolio and program management; project, engineering and construction management; cost control; project scheduling; stakeholder and risk management; Subject Matter Expert (SME) – civil and environmental; contract administration and finance.
Oil & Gas | Mining | Clean Energy | Environment & Infrastructure
connected excellence in all we do
amecfw.com/mining
Tel: 604-807-0102
15-06-24 5:22 PM
4
JUNE 29-JULY 5, 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. 7% P.S.T. to BC orders 13% H.S.T. to ON, NB, NF orders 15% H.S.T. to NS orders. 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.
TRISH SAYWELL, BA, MA, MSc (Jour) tsaywell@northernminer.com
Women remain an untapped resource in mining BY MATTHEW KEEVIL
We’ve been receiving feedback from readers and industry participants in recent weeks on the experiences of women in the Canadian mining industry. The discussion has ranged from letters warning women against entering the business to a commentary on Canadian Securities Administrators’ rules in the recent federal budget that require companies to disclose and explain gender-diversity policies, or lack thereof. It’s definitely been a hot-button topic, but perhaps getting lost in the shuffle is an overwhelmingly important point: the mining industry needs to make adjustments to attract a larger pool of talented female workers. It’s no secret that our business is facing a growing number of human resource challenges that need to be tackled in the coming years. A recent report from the Mining Industry Human Resources Council (MiHR) revealed that for every job vacancy in mining, there are less than three potential job seekers across Canada, compared to an average of six job seekers per vacancy for all other industries. Some of the largest labour gaps over the next decade are expected to be in trades and production positions, particularly underground miners, as well as machine operators and mine labourers. Canada also will be coping with a shortage of scientists, engineers and technicians. Women account for 48% of the Canadian workforce, but only 17% of the labour force in the mining industry. Trades and production occupations have the lowest levels of female participation — at 5% across all industries, and 4% in mining. I believe that’s called an “untapped resource.” The federal government took steps to acknowledge this fact on June 17, when it pledged nearly $500,000 to the MiHR for a threeyear project that will see a Gender Champions Task Force — comprised of mining executives — identify and address the barriers faced by female employees in natural resource companies. There also have been recent initiatives within the industry aimed at attracting more female talent. In March, Goldcorp launched a new phase in the Creating Choices program, which it branded as “the world’s first company-wide development and mentorship program for women in mining.” Meanwhile, Teck Resources partnered up with the College of the Rockies last year to complete the first-ever Women in Mining course in Fernie, B.C. Mining represents a common vein that flows through our Canadian identity, and it’s often labelled a sector that’s fundamentally opposed to change. Many of the old guard that defined and built this business is growing long in the tooth, however, and that provides an opportunity to move forward with a focus on inclusivity. And that doesn’t just include women, but also aboriginal groups and younger generations. The mining workforce is attracting more young workers, but retirement remains an issue. Nearly 50% of the industry’s hiring requirements will be driven by the need to replace workers who will retire by 2025. So while we commend the work of women pioneers, and those currently working in the industry, let’s also focus on attracting talent of all races and genders — so that our future matches the success of the past 100 years.
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STAFF WRITER:
MATTHEW KEEVIL, BA (Econ and Poli Sci) mkeevil@northernminer.com STAFF WRITER:
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FA C T S ‘ N ’ F I G U R E S
The socio-economic benefits of gold mining
The following is an edited summary from the World Gold Council’s report The Social and Economic Impacts of Gold Mining. To see the full report please visit www.gold.org. Gold-mining companies are a major source of income and economic growth, with an important role in sustainable socio-economic development. During 2013, goldmining companies contributed over US$171.6 billion to the global economy through their production activities and expenditure on goods and services. This is more than the combined gross domestic product of Ecuador, Ghana and Tanzania, or close to half of the gross domestic product of countries such as South Africa and Denmark. While negative social and environmental impacts from gold-mining activities is well known, the nature and distribution of the socio-economic impacts of gold mining at an industry level on host nations and communities is relatively poorly understood.
The value of gold mining is increasing
Responsibly undertaken, gold mining can make a positive impact on the economies of the countries in which gold mining takes place, and on the lives of the citizens of those countries. Amongst the top-30 gold producing countries, over 60% are low or lowermiddle income countries with substantial socio-economic development needs. In eight of the top-30, gold-producing countries, the production and procurement activities of gold-mining companies generate over 10% of each country’s gross domestic product. For two of these countries, this figure rises to over 25% of gross domestic product. Many of the countries that are significant gold producers are also impoverished countries and long-term recipients of development assistance from foreign government donors. Given that reliance on foreign aid is an inherently vulnerable position for any impoverished country, it is notable that the economic value directly and indirectly created by the gold-mining industry globally has exceeded the global total value of development assistance every year since 2010. Perhaps more importantly, given cuts to aid budgets in many donor countries, the longer-term trend for the economic value created by the gold-mining industry is that of significant growth. The direct economic contribution of the gold-mining industry to the global economy, or gross value added (GVA), has increased almost sevenfold from 2000 to 2013. The world regions that have benefitted most from the value created by gold mining are Asia and Africa, which account for the largest shares of gold-mining GVA. Amongst several of the lower-income, gold-producing countries — such as Ghana and Mali — growth of the gold-mining industry means that goldmining companies now create more value in the economy than is received from development-assistance programs. For Ghana and Mali this was not the case as recently as 2008.
Mining provides much more than royalties 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.
TNM June 29 2015 Issue.indd 4
ALISHA HIYATE, BA ahiyate@northernminer.com
SENIOR STAFF WRITER:
EDITORIAL: TOP STORY OF WEEK 25
GROUP PUBLISHER/ PUBLISHER:
EDITOR, SPECIAL PROJECTS:
Naturally, governments of gold-producing countries want to maximize the value that they receive from the mining companies that develop their resources. Much of the literature on this topic suggests that royalty rates on mineral extraction are the principal economic benefit for governments. However, analyzing gold-mining company expenditures reveals that far
more value is distributed to host governments and the wider economy through other means. By far the most significant means by which value flows from gold-mining companies to the economies of host countries is through payments to suppliers and contractors, and wages for employees. Together these two areas, usually taxed by governments, account for 70% of total expenditures by gold-mining companies. In terms of direct taxation, almost 60% of the payments that gold-mining companies make to host governments are for income and corporate taxes. Royalty rates, by contrast, account for an average 15% of direct taxation. Other taxes that can be almost as significant as royalty payments include import or fuel duties. For some mining companies fuel costs may account for up to 40% of total operating expenses, so such duties can be significant.
Creating jobs
Managing the expectations of host communities on the numbers of people that a mining operation will employ can be a challenge for companies, given the capital-intensive nature of gold mining. Globally, gold-mining companies directly employed over 1 million in 2013, with over 3 million more employed as a result of the industry’s procurement activities. Nonetheless, the gold-mining industry simply does not employ the same number of workers as other sectors, such as manufacturing. What it does do, however, is provide high-value employment. Gold mine employees consistently earn more than the local average, and in less developed economies, considerably more. This is an important trend because in less developed economies each worker will usually support a higher number of dependants than in more developed economies. In Mali, a study found that each gold mine worker supported six dependants. In addition to receiving relatively high salaries, employees also benefit from the investments that companies make in skills development and training of their workforces. Moreover, gold-mining companies are relatively successful at employing local people in their operations: in most regions over 90% of the employees at gold-mining operations are local workers. In comparison, 70% of the workforce in the oil and gas sector are local workers. Like other segments of the extractive industries, gender diversity remains a challenge in the gold-mining industry, with companies reporting an average 10% of their workforce at mining operations being women. But there is evidence that despite their low numbers, women employed at gold-mining operations earn more than men on average, as a result of occupying higherskilled positions.
Supporting local development
Securing the social licence to operate is a critical issue for the gold-mining industry. The value of a company’s assets below ground can only be realized if the social and political environment above ground enables production. In addition to being “the right thing to do,” the need to secure the social licence to operate means that gold-mining companies, in common with other extractives industries, often invest heavily in improving the socio-economic conditions of host communities. In many cases, gold-mining companies make targeted investments that focus on the same social or economic challenges that aid donors and national governments also seek to address.
15-06-24 5:22 PM
THE NORTHERN MINER
Uranium Energy drops on ‘unfounded allegations’
EVENTS Sep 24-25 Canadian Investor Conference Metro Toronto Convention Centre, ON. info@cambridgehouse.com (604) 6874151; 1-877-363-3356 www. cambridgehouse.com Oct 7-8 AEMQ XPLOR 2015 Place Bonaventure, QC info@aemq.org (819) 762-1599; 1-877-762-1599 http://aemq. org/EN/XPLOR Nov 18-20 Manitoba Mining & Minerals Convention Winnipeg, MA convention@ gov.mb.ca (204) 945-2691; 1-800-2235215 www.manitoba.ca/iem/convention
BY SALMA TARIKH
For more event information, please go to: www.northernminer.com/events/
MEETINGS
A historic headframe at Uranium Energy’s Slick Rock uranium project in southwest Colorado. ters” from its sole uranium mine, Palangana, in South Texas. However, curbing production in a sector with low spot prices and oversupply has been common
LETTER TO THE EDITOR
Women in mining a complex issue
Lesley Stokes’ commentary last week entitled “Gratitude for women pioneers” is a thoughtful insight and response to the letter published a week earlier, “Daughters: Avoid geology or mining as a career.” This is a complex issue. My personal experience as a woman in the mining industry has had both challenges and highlights. I’ve had the opportunity to travel, meet diverse and interesting people, earn a good salary (at times) and experience things that I may not have otherwise. I’ve also been laid off at least five times due to industry downturns, sometimes with no notice, and have had to move across continents and oceans to keep working. I’m not sure that any of these things are unique to being a female geologist, but what does give me concern right now is that most of the men working in the industry that I know are still employed, whereas my female geologist friends are unemployed or have taken jobs in peripheral industries to remain employed, as have I. I know of at least two women who were laid off immediately upon returning from maternity leave, and I have, on more than one occasion, been paid less than my male counterparts for doing the same job, the justification being, when I challenged this with my boss, that they had wives and families at home and had to be paid more as an incentive to take the job. Workplace culture, both in the field and in corporate settings, is still absurdly sexist, given that we are well into the 21st century. I do believe that the mining and exploration industries can offer wonderful opportunities to anyone who is willing to take them up,
TNM June 29 2015 Issue.indd 5
5
OP-ED
MATTERS OF GENERAL INTEREST
Uranium Energy (NYSE-MKT: UEC) shares have plunged more than 30% since a negative blog post about the company triggered an investigation by two New Yorkbased law firms of the Texas-based firm, leaving at least one analyst baffled. Cantor Fitzgerald analyst Rob Chang, who has covered Uranium Energy since December 2013, says he’s taken aback by how a previously unknown blog, TheStreetSweeper.org, is the source behind the investigations. “I am surprised at how much weight the biased opinions of anonymous writers can have. Legal actions based on one blog that also disclosed that it has a short position does not seem sufficient grounds to initiate an investigation,” Chang said in an emailed response to The Northern Miner. The article, published on June 18, opines Uranium Energy will see gloomy days ahead for several reasons, including that it has made “zero sales in the past seven quar-
JUNE 29-JULY 5, 2015
but there is a caveat — long-term job security depends partly on when you graduated and entered the workforce — during an upswing or a downturn — and sadly it is still a challenging industry for women for many reasons, although this can depend on who you work for, what you want to do in the mining industry and how willing you are to put up with some degree of inequality. Joanna Hodge, PhD, PGeo Professor of Geology, Fleming College Kirkfield, Ontario
among uranium miners since the Fukushima disaster in 2011. The article points out that Uranium Energy recently added US$3 million to its cash position by selling a large part of its inventory. It claims that the company has little means of generating more revenue and may have trouble staying afloat if the outlook for the uranium market doesn’t improve. This prompted New York-based legal firms Pomerantz LLP and Bronstein, Gewirtz & Grossman LLC to initiate separate investigations on June 19. Both firms have cited the blog post in their initial releases, calling for Uranium Energy investors to contact them. Uranium Energy says the investigations have “absolutely no merit” and rely on “unfounded allegations made by a third party whose motives are questionable.” The junior said it “will not comment further on the possibility of groundless, frivolous litigation.” Uranium Energy is looking at seeking “legal and equitable relief” for any damages it and its shareholders have suffered.
URANIUM ENERGY
Commenting on the firm’s move to sell much of its uranium inventory, Dundee Capital Markets analyst David Talbot says it was rational and that the company reported the sale. “UEC never said it wouldn’t sell uranium, but only wishes to remain 100% unhedged. The business model has not changed.” Talbot says he treats Uranium Energy as a developer with a solid project pipeline, and that the company is doing all it can during a uranium downturn, including shelving production, conserving cash and preparing projects “for better days,” among other activities. The stock, which is set to join the Russell 3000 and the Russell Global indexes, closed June 19 at US$1.80, falling US80¢ per share over two trading days. Talbot sees an opportunity in the share price drop, and has a “buy” and US$4.60-per-share target. Chang also has a “buy” recommendation on the stock, with a US$3.10 target. On June 23, the firm announced a US$10-million financing to strengthen its balance sheet.
Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 29 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jul 02 Jul 02 Jul 06 Jul 06 Jul 06 Jul 06 Jul 06 Jul 06 Jul 07 Jul 07
Entree Gold AG Galane Gold AS Candente Copper AG Freegold Ventures A Newbaska Gold & Copper Mns AG Orca Gold AG Mountain Lake Minerals AG Plate Resources AGS Wildcat Silver AGS Adamera Minerals AG Alba Minerals AGS Alliance Mining AG Gray Rock Resources AGS Amarillo Gold AGS Kaizen Discovery AGS Golden Hope Mines AS Int’l Millennium Mining AGS Jayden Resources AG Oramericas AGS KWG Resources AGS Montana Gold Mining A NSGold AG NSX Silver AGS Osisko Gold Royalties AS Sultan Minerals AG Xmet AS Cancana Resources AGS Cartier Iron AG Corazon Gold AG Global Copper Group AG God’s Lake Resources AG Goldstar Minerals AG Barkerville Gold Mines S Global Cobalt AGS Maudore Minerals A IC Potash AGS IDM Mining AGS Black Bull Resources AS Alder Resources AS Kerr Mines AS Alturas Minerals AGS United Coal Holdings AGS Lakeside Minerals AS Crocodile Gold S Newmarket Gold S Pinetree Capital A Peruvian Precious Metals A
MEETINGS LEGEND A – Annual E – Extraordinary G – General S – Special
OVE R
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15-06-24 5:22 PM
6 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
MARKET NEWS TORONTO STOCK EXCHANGE Canada’s benchmark index dropped 0.6% to finish at 14,653.12, amidst fears that Greece could default on its debt, and lower-thanexpected Canadian retail sales in April. The S&P/TSX Capped Diversified Metals & Mining Index fell 4% to 701.04, the S&P/TSX Global Gold Index lost 0.4% to finish at 154.84 and the S&P/TSX Global Mining Index slid 0.8% to 62.50. Signs that the U.S. Federal Reserve would wait until year-end before raising interest rates drove gold prices higher, with the spot price climbing 1.6% to US$1,200.30 per oz. Shares of Imperial Metals rose 49¢ to $9.74 on news of an amended permit for its Red Chris mine in B.C. The Ministry of the Environment granted an amended permit on June 12, which replaces the previously issued short-term authorization, and allows the mine to discharge tailings into the tailings storage facility (TSF), and discharge water from the TSF, subject to water-quality guidelines. Drill results from Continental Gold’s Buritica project in Antioquia, Colombia, drove the company’s shares 30¢ higher to $2.64. The junior drilled 20 diamond drillholes through the Veta Sur and Yaragua vein systems at the project, and is updating its mineral resource estimate. Highlights
J U N E 15 -19
included 5.6 metres grading 16.9 grams gold per tonne and 56 grams silver per tonne, including 1.2 metres averaging 45.3 grams gold and 96 grams silver; and 1.3 metres returning 178 grams gold and 109 grams silver. Shares of Prophecy Coal jumped 25% to 5¢ after the company reported a resource estimate for its Pulacayo project in Bolivia. The project has a 1.3-million-tonne indicated resource grading 530 grams silver per tonne, 3.6% zinc and 2.5% lead, and an inferred resource of 350,000 tonnes averaging 419 grams silver, 4.6% zinc and 2.5% lead. The resource was based on a silver-equivalent cut-off grade of 500 grams per tonne. Pulacayo is 107 km northeast of Sumitomo Corp.’s San Cristobal silver mine, 185 km
TSX most active issues
Capstone Mng B2Gold Barrick Gold Kinross Gold Goldcorp Yamana Gold First Quantum MBAC Fertilizr Teck Res B Lake Shore Gld
VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE
CS BTO ABX K G YRI FM MBC TCKB LSG
22190 1.28 1.16 1.28 + 0.02 18774 2.09 1.90 2.01 + 0.01 18277 14.63 13.63 14.08 + 0.22 16145 3.01 2.75 2.80 - 0.09 15962 20.84 19.99 20.12 - 0.54 15042 4.16 3.88 3.94 - 0.04 13752 17.73 16.76 16.81 - 0.66 13411 0.12 0.06 0.09 + 0.03 13302 13.92 13.25 13.37 - 0.60 12963 1.38 1.25 1.35 + 0.08
southwest of Coeur Mining’s San Bartolome silver mine and 139 km north of Pan American Silver’s San Vicente mine. Polymet Mining climbed 22.9% to $1.61. The company is almost done a decade-long environmental review led by the Minnesota Department of Natural Resources (MDNR) of its NorthMet copper-nickel-precious metals deposit in northeastern Minnesota. The department’s commissioner says the depos-
it’s preliminary environmental impact statement will be circulated “very soon.” Tahoe Resources dropped $1.26 to $16.67, after Goldcorp announced it was selling its 25.6% stake in the company in a secondary offering. The sale of Goldcorp’s 58.1 million shares in Tahoe at a price of $17.20 per common share is part of Goldcorp’s strategy of divesting non-core assets. Shares of Goldcorp fell 54¢ to $20.12.
TSX greatest percentage change
Candente Gold MBAC Fertilizr Stockport Expl Prophecy Coal PolyMet Mng Lithium Americ Freegold Vent Treasury Metal Marathon Gold Chalice Gold M Yellowhead Mng Ivernia Macarthur Mnl Redhawk Res Jayden Res Luna Gold Carpathian Gld Stonegate Agri North Am Pall Inspiration Mg
TSX greatest value change
VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE
CDG MBC SPT PCY POM LAC FVL TML MOZ CXN YMI IVW MMS RDK JDN LGC CPN ST PDL ISM
424 13411 489 2263 294 807 82 903 68 10 193 466 791 27 35 1008 12861 73 1964 36
0.05 0.12 0.04 0.05 1.61 0.43 0.14 0.47 0.32 0.15 0.15 0.02 0.03 0.07 0.12 0.11 0.03 0.02 0.05 0.05
0.03 0.06 0.03 0.03 1.32 0.32 0.12 0.37 0.27 0.13 0.09 0.01 0.03 0.05 0.07 0.08 0.02 0.02 0.04 0.04
0.05 0.09 0.03 0.05 1.61 0.39 0.14 0.46 0.32 0.15 0.09 0.01 0.03 0.05 0.07 0.08 0.02 0.02 0.04 0.04
+ 42.8 + 38.4 + 25.0 + 25.0 + 22.9 + 21.8 + 21.7 + 17.9 + 16.6 + 15.3 - 41.9 - 33.3 - 28.5 - 28.5 - 22.2 - 20.0 - 20.0 - 20.0 - 20.0 - 20.0
WEEK VOLUME CLOSE CHANGE
Franco-Nevada Mag Silver Altius Mnrls Silver Std Res Pan Am Silver First Majestic Imperial Metal Guyana Gldflds Contintl Gold Fortuna Silver Agrium Dominion Diam Tahoe Res Cameco Corp First Quantum Teck Res B Goldcorp Russell Metals HudBay Minls New Gold
FNV MAG ALS SSO PAA FR III GUY CNL FVI AGU DDC THO CCO FM TCKB G RUS HBM NGD
TSX VENTURE EXCHANGE The S&P/TSX Venture Composite Index gained slightly during the trading period, as it jumped 1.75 points before finishing at 683.89 points. Gold futures closed in the green, while base metal and energy markets failed to generate much momentum. In macroeconomic news, Canadian retail sales fell 0.1% in April after two months of gains, and the U.S. Federal Reserve kept current interest rates. Meanwhile, the European Council called an emergency summit of eurozone leaders to address the Greek debt crisis. August contracts for gold bullion closed up 1.9%, or US$22.70, at US$1,201.90 per oz. Copper futures fell for a second straight week, as July contracts for the red metal lost 2.9%, or US7.8¢, before finishing at US$2.57 per lb. August contracts for West Texas Intermediate crude oil dropped US43¢ en route to a US$59.97-per-barrel close. Gold Reserve was on the rise during the trading period after releasing an update on legal proceedings in the U.S. District Court for the District of Columbia on its collection efforts of a US$740-million arbitral award against the Republic of Venezuela. The company gained 28¢ before closing at $4.87 per share. On June 18 Gold Reserve
TNM June 29 2015 Issue.indd 6
+ 1.24 + 1.11 + 1.06 + 0.62 + 0.59 + 0.51 + 0.49 + 0.38 + 0.30 + 0.30 - 3.59 - 2.22 - 1.26 - 0.86 - 0.66 - 0.60 - 0.54 - 0.53 - 0.52 - 0.33
J U N E 15 -19
reported that it would request a hearing date as soon as “practicably possible.” Once the award is confirmed it can be enforced in the U.S. as a judgment of the court. The company expects the final filing from Venezuela by mid-July. The award, now amounting to US$755 million, is accruing interest at a London interbank offered rate, plus 2% annually. Abitibi Royalties topped the value-lost category after acquiring a net smelter return (NSR) royalty and updating its Internet “royalty search” for acquisition leads. The company lost 24¢ before closing at $3.15 per share. On June 16 Abitibi announced a 2% NSR on the Smokehead prospect from junior Golden Valley Mines. The project oc-
TSX-V most active issues
Integra Gold ICG Comstock Mtls CSL CMC Metals CMB Majestic Gold MJS Copper Fox Mtl CUU Garibaldi Res GGI Dolly Vard Sil DV Bear Creek Mng BCM Skyharbour Res SYH Gold Bulln Dev GBB
VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE
9680 7353 5412 4861 4557 4315 3950 3748 3273 3203
0.36 0.03 0.07 0.08 0.24 0.10 0.20 1.10 0.06 0.03
0.31 0.02 0.06 0.05 0.15 0.08 0.02 0.91 0.05 0.02
0.34 + 0.03 + 0.07 - 0.08 + 0.22 + 0.08 - 0.20 - 1.02 + 0.05 - 0.02
0.04 0.01 0.01 0.03 0.07 0.02 0.01 0.06 0.01 0.00
cupies nearly 10 sq. km about a kilometre southeast of the Canadian Malartic mine in Quebec. The company also reported it has received $46,000 in dividends from Agnico Eagle Mines and $18,000 in additional royalty payments from its 2% NSR on the eastern part of the Gouldie zone at Canadian Malartic. Explorer Integra Gold topped weekly trad-
ing after releasing a study on 75 years of mining at its Sigma-Lamaque gold project, east of Val-d’Or, Que. The company saw nearly 10 million of its shares change hands, as it gained 4¢ en route to a 34¢-per-share close. On June 18 Integra reported it had identified an exploration target at depth that could host up to 20 million tonnes of material grading up to 6.5 grams gold.
TSX-V greatest percentage change
Apogee Silver Kestrel Gold Bell Copper Canadn Plat Pac Wildcat Re Golden Goliath MacDonald Mns Frontline Gold Barker Mnrls Grande Portage Arcturus Res China Mnls Mng Rio Silver Honey Badger E Nevada Expl Pac North West Alder Res Stelmine Can Alliance Mng Noka Res
TSX-V greatest value change
VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE
APE KGC BCU CPC PAW GNG BMK FGC BML GPG AZN CMV RYO TUF NGE PFN ALR STH ALM NX
18 227 248 25 2547 414 422 50 154 67 17 87 76 54 236 1599 31 114 925 498
0.31 0.05 0.04 0.01 0.02 0.01 0.01 0.01 0.01 0.01 0.02 0.01 0.02 0.01 0.01 0.02 0.01 0.04 0.03 0.11
0.20 0.03 0.03 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.02 0.07
0.24 0.05 0.04 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.02 0.02 0.07
+ 4700.0 + 150.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 + 100.0 - 60.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 42.8 - 40.0 - 39.1
WEEK VOLUME CLOSE CHANGE
Ascot Res Gold Reserve Archon Mineral Apogee Silver Great Quest Me Kennady Diam Golden Hope Sierra Iron Or Avino Silver Copper Fox Mtl Abitibi Royalt Titanium Corp Bacanora Mnls Zenyatta Vent Chesapeake Gld Energold Drill Midland Expl Brazil Res Tasman Metals Blue Sky Uran
AOT GRZ ACS APE GQ KDI GNH NAA ASM CUU RZZ TIC BCN ZEN CKG EGD MD BRI TSM BSK
U.S. M ARKETS U.S. stocks eked out gains, despite concerns about whether Greece would reach a deal with its lenders to avoid a default. The Dow Jones Industrial Average climbed 0.6% to 18,014.28, while the S&P 500 Index added 0.7% to 2,109.99. The Nasdaq rose 1.3% to close at 5,117. The spot price for gold jumped 1.6%, or US$19 to US$1,200.30 per oz., while the Philadelphia Gold & Silver Index stayed relatively flat at 66.65. Molycorp shares rose 18% to US43¢. The rare earth oxide producer dipped in earlier weeks after the Wall Street Journal reported that the company plans to file for Chapter 11 bankruptcy protection to reduce its US$1.7-billion debt. While Molycorp hasn’t confirmed this, it has skipped two interest payments, including a US$32.5-million semi-annual interest payment due June 1 on its 10% senior secured notes and a US$3.36million semi-annual interest payment due June 15 on its 3.3% senior unsecured convertible notes. In both cases, this triggered a 30-day grace period. Molycorp intends to use this time to “evaluate different options related to such debt restructuring.”
3072076 60.08 1471120 10.29 491721 15.25 2096661 8.39 1748381 11.62 1628158 6.35 124262 9.74 2166083 3.95 5055322 2.64 1215141 4.80 2106973 124.54 2381984 18.55 10625929 16.67 4448363 18.20 13752043 16.81 13301603 13.37 15961903 20.12 1127920 23.20 2750637 10.99 5008001 3.67
152068 98204 32766 18372 368494 218001 94866 169352 36836 4556532 20958 192026 43400 294417 13759 59371 29510 265310 152661 409055
1.90 4.87 2.00 0.24 0.59 5.38 0.50 0.50 1.46 0.22 3.15 1.22 1.65 1.54 1.94 0.75 0.66 0.63 0.68 0.11
+ + + + + + + + + + - - - - - - - - - -
0.50 0.28 0.26 0.24 0.14 0.13 0.12 0.11 0.08 0.07 0.24 0.17 0.15 0.10 0.10 0.09 0.07 0.07 0.06 0.06
J U N E 15 -19 Midway Gold shares plunged 54% to US4¢, as it struggled with its debt and operational issues at the Pan gold mine in Nevada. On June 19, the firm announced a workforce reduction at Pan, its sole producing asset. On June 22, it filed for Chapter 11 bankruptcy protection. Uranium Energy dropped 38% to US$1.80 per share after a negative blog post claimed Uranium Energy would collapse, as it hasn’t produced for the “past seven quarters” from its sole Palangana uranium mine in Texas, which caused two New York-based law firms to launch separate
U.S. most active issues
VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE
Peabody Enrgy* BTU 111815 2.65 2.21 2.63 + 0.10 Alcoa* AA 71937 12.11 11.85 11.93 - 0.13 Barrick Gold* ABX 68322 11.97 11.06 11.48 + 0.21 Freeport McMo* FCX 58484 20.35 19.31 19.77 - 0.04 Kinross Gold* KGC 54514 2.48 2.25 2.27 - 0.09 Goldcorp* GG 45836 17.09 16.20 16.47 - 0.33 Newmont Mng* NEM 42230 25.09 23.50 24.65 + 1.10 Cliffs Nat Rs* CLF 33354 5.59 4.96 5.02 - 0.46 Vale* VALE 33198 6.69 6.23 6.51 - 0.30 Gold Fields* GFI 32839 3.31 3.01 3.15 - 0.01
investigations into the company. The company responded that the investigations have “absolutely no merit.” Newmont Mining added US$1.10 to finish at US$24.65 per share, after issuing 29 million shares to Citigroup and J.P. Morgan
for net proceeds of US$674 million. The company intends to use the funds, supplemented with cash in its treasury, to acquire the Cripple Creek & Victor gold mine in Colorado for US$820 million from AngloGold Ashanti.
U.S. greatest percentage change
Arch Coal* ACI PolyMet Mng* PLM Molycorp* MCP Timberline Rs* TLR Mag Silver* MVG Coeur Mng* CDE Vista Gold* VGZ First Majesti* AG Silver Std Re* SSRI Harmony Gold* HMY Midway Gold* MDW Uranium Ener* UEC Great Panther* GPL Walter Energy* WLT Northern Dyn* NAK Soc Quim&M Ch* SQM Taseko Mines* TGB Dominion Diam* DDC Yanzhou Coal* YZC Cliffs Nat Rs* CLF
VOLUME WEEK (000s) HIGH LOW CLOSE CHANGE
32001 0.47 1929 1.33 26744 0.53 44 0.64 46 8.45 19491 6.35 557 0.36 5758 5.45 8009 6.99 16857 1.50 13497 0.13 5305 2.88 15158 0.55 1673 0.29 1589 0.42 5085 19.13 1442 0.66 758 16.78 405 8.88 33354 5.59
0.38 1.09 0.37 0.55 7.40 5.39 0.30 4.72 6.14 1.32 0.04 1.51 0.32 0.20 0.30 16.12 0.57 15.12 8.29 4.96
0.47 1.33 0.43 0.64 8.40 6.03 0.34 5.19 6.84 1.46 0.04 1.80 0.32 0.20 0.30 16.43 0.57 15.15 8.30 5.02
+ 21.7 + 19.8 + 18.1 + 13.8 + 12.6 + 11.0 + 10.9 + 9.0 + 8.2 + 8.1 - 53.9 - 37.7 - 31.9 - 27.0 - 23.0 - 13.5 - 11.4 - 10.2 - 8.7 - 8.3
U.S. greatest value change WEEK VOLUME CLOSE CHANGE
Franco-Nevada* FNV Newmont Mng* NEM Mag Silver* MVG Hi-Crush Part* HCLP MDU Res* MDU Mesabi Trust* MSB Coeur Mng* CDE Silver Std Re* SSRI BHP Billi-BHP* BHP First Majesti* AG Compass Mnls* CMP Soc Quim&M Ch* SQM Agrium* AGU Consol Energy* CNX Dominion Diam* DDC Alliance Rs P* ARLP US Silica Hld* SLCA Randgold Res* GOLD Uranium Ener* UEC Rio Tinto* RIO
3777883 48.95 42229880 24.65 45799 8.40 315352 31.66 5799776 20.55 144897 13.65 19490581 6.03 8008962 6.84 7132876 43.81 5758123 5.19 469858 83.34 5084821 16.43 496558 101.61 18534203 23.49 758306 15.15 1809641 25.06 1686725 30.05 2490970 70.32 5305182 1.80 2401896 43.16
+ 1.26 + 1.10 + 0.94 + 0.78 + 0.65 + 0.65 + 0.60 + 0.52 + 0.51 + 0.43 - 3.65 - 2.58 - 2.45 - 1.77 - 1.72 - 1.38 - 1.34 - 1.15 - 1.09 - 0.88
15-06-24 5:22 PM
THE NORTHERN MINER
7
JUNE 29-JULY 5, 2015
METALS, MINING AND MONEY MARKETS SPOT PRICES
PRODUCER AND DEALER PRICES
COURTESY OF SCOTIABANK
Tuesday, June 23, 2015 Precious Metals Gold Silver Platinum Palladium Base Metals Nickel Copper Lead Zinc
Price (US$/oz.) $1183.35 $15.96 $1073.00 $702.00
Change +1.25 -0.07 -15.00 -38.00
Price (US$/tonne) $12805.00 $5768.00 $1795.00 $2053.50
Change +400.00 +116.00 +31.50 +22.00
LME WAREHOUSE LEVELS Metal stocks (in tonnes) held in London Metal Exchange warehouses at opening, June 22, 2015 (change from June 15, 2015 in brackets): Aluminium Alloy 15040 (-2140) Aluminium 3626700 (-17650) Copper 315475 (+1075) Lead 172200 (-13025) Nickel 461436 (-3120) Tin 6675 (-670) Zinc 466475 (-3075)
Thermal Coal CAPP: US$41.92 per short ton Coal: Central Appalachia, 12,500 Btu, 1.2 S02-R,W: US$52.75 Coal: Powder River Basin, 8,800 Btu, 0.8 S02-R, W: US$9.90 Coal: CME Group Futures July 2015: US$40.88; Aug. 2015: US$40.75 Cobalt: US$13.90/lb. Copper: US$2.60/lb. Copper: CME Group Futures July 2015: US$2.62/lb.; Aug. 2015: US$2.63/lb Ferro-Chrome: US$2.18/kg FerroTungsten: US$34.31/kg Ferrovanadium: US$19.39/kg Iridium: NY Dealer Mid-mkt US$565/tr oz. Iron Ore 62% Fe CFR China-S: US$60.50/tonne Iron Ore Fines: US$51.80/tonne Iron Ore Pellets: US$81.92/tonne Lead: US$0.80/lb. Magnesium: US$2.22/kg Manganese: US$2.03/kg Molybdenum Oxide: US$6.51/lb. Phosphate Rock: US$115/tonne Potash: US$307.00/tonne Rhodium: Mid-mkt US$955/tr. oz. Ruthenium: Mid-mkt US$47.00/tr. oz. Silver: Handy & Harman Base: US$15.79 per oz.; Handy & Harman Fabricated: US$19.26 per oz. Tantalite Ore: : US$177.08/kg Tin: US$6.89/lb. Uranium: U3O8, Trade Tech spot price: US$36.50/lb.; The UX Consulting Company spot price: US$36.50/lb. Zinc: US$0.92/lb. Prices current June 24, 2015
NORTH AMERICAN STOCK EXCHANGE INDICES 52-week
Date TSX Composite S&P/TSX-Ven Comp S&P TSX 60 Global Gold TSX Metals & Mining Gold & Silver XAU Arca Gold Bugs
June 22 14790.48 682.34 860.85 152.78 700.95 65.60 153.98
June 19 14653.12 683.89 852.36 154.84 701.04 66.65 156.30
June 18 14770.64 682.62 859.52 157.92 715.53 68.37 159.83
June 17 14732.98 681.57 857.49 156.23 714.80 67.45 157.98
June 16 14753.05 678.75 859.13 152.88 714.25 65.99 154.29
High 15685.13 1038.00 905.09 209.26 954.68 104.22 251.83
Low 13635.53 637.06 787.83 128.54 513.00 62.48 146.01
TSX SHORT POSITIONS
TSX VENTURE SHORT POSITIONS
Short positions outstanding at June 15/15 (with changes from May 31/15).
Short positions outstanding at June 15/15 (with changes from May 31/15).
Largest short positions New Gold NGD 34689487 B2Gold BTO 29387761 PotashCorp POT 25538915 Lundin Mining LUN 22101962 Teck Resources TCK.B 17825874 Rubicon Minerals RMX 15179176 Kinross Gold K 14744965 Iamgold IMG 14305596 Detour Gold DGC 12291212 Thompson Creek Mtl TCM 11019513 Barrick Gold ABX 10598425 First Quantum FM 10485704 Yamana Gold YRI 8826146 Denison Mines DML 8320539 Argonaut Gold AR 7833911 Largest increase in short position Iamgold IMG 14305596 Capstone Mining CS 3149674 Detour Gold DGC 12291212 Yamana Gold YRI 8826146 Rubicon Minerals RMX 15179176 Largest decrease in short position New Gold NGD 34689487 Timmins Gold TMM 807158 Western Lithium WLC 72800 First Majestic Silver FR 5953306 First Quantum FM 10485704
Largest short positions Nexgen Energy NXE 1161000 Bear Creek Mining BCM 722613 Zenyatta Ventures ZEN 683295 Northern Graphite NGC 374634 Azincourt Uranium AAZ 308000 Kaminak Gold KAM 298511 CMC Metals CMB 292000 Integra Gold ICG 281400 Lakeland Res. LK 235600 Roxgold ROG 229781 Canasil Res. CLZ 200000 California Gold CGM 190500 Noka Resources NX 185000 Gold Standard Vent. GSV 146000 Precipitate Gold PRG 144000 Largest increase in short position Nexgen Energy NXE 1161000 Bear Creek Mining BCM 722613 Azincourt Uranium AAZ 308000 Northern Graphite NGC 374634 CMC Metals CMB 292000 Largest decrease in short position Strikepoint Gold SKP 0 Dajin Resources DJI 52000 Golden Valley Mines GZZ 4000 Lion One Metals LIO 900 Monument Mining MMY 6500
-6588494 -93284 161075 -810060 685228 801206 610677 5054758 1204100 -934708 247431 -1240388 806115 407705 -49887 5054758 1244373 1204100 806115 801206 -6588494 -3821274 -2338700 -1499798 -1240388
1160100 347600 125700 302000 308000 12000 292000 219300 225400 -43100 0 190000 112000 113900 143800 1160100 347600 308000 302000 292000 -4005000 -1482000 -255000 -199200 -184000
EXCHANGE RATES CANADIAN/U.S. EXCHANGE (Bank of Canada noon rate) Date June 22 June 19 US$ in C$ 1.2288 1.2279 C$ in US$ 0.8138 0.8144
June 18 1.2209 0.8191
June 17 1.2308 0.8125
June 16 1.2330 0.8110
EXCHANGE RATES (Bank of Canada, June 22, 2015) Currency Aus $ Euro In C$ 0.9539 1.3792 In US$ 0.7746 1.1380
Japan 0.00996 0.00811
Mex P 0.08006 0.06525
SA Rand 0.1010 0.08252
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 £ 1.9414 1.5823
STAFF INVESTMENT POLICY The Northern Miner does not permit any editorial employee to file stories about companies in which the writer owns shares. Editorial employees are also not permitted to take part in initial public offerings or to engage in short selling.
CONVERSIONS OF WEIGHTS & MEASURES 1 troy ounce = 31.1 grams 1 kilogram = 32.15 troy ounces 1 kilogram = 2.2046 pounds 1 (metric) tonne = 1,000 kilograms 1 (metric) tonne = 2,204.6 pounds 1 (short) ton = 2,000 pounds 1 (metric) tonne = 1.1023 (short) tons
1 gram per (metric) tonne = 0.02917 troy ounces per (short) ton = 0.03215 troy ounces per (metric) tonne 1 kilometre = 0.6214 miles 1 hectare = 2.47 acres
REPRINTS Reprints of any article published in The Northern Miner or on our website are available. We will provide them in a “PDF” format for $350. Contact: moliveira@northernminer.com or 416-510-6768
TNM June 29 2015 Issue.indd 7
DAILY METAL PRICES Date June 22 June 19 June 18 June 17 BASE METALS (London Metal Exchange -- Midday official cash/3-month prices, US$ per tonne) Al Alloy 1770/1790 1760/1780 1770/1770 1770/1770 Aluminum 1650/1692 1650/1690 1680/1718 1675/1717 Copper 5645.50/5669.50 5662/5679 5760/5779 5748/5770 Lead 1764.50/1779 1783/1798 1810/1827 1784/1805 Nickel 12585/12620 12590/12620 12855/12850 12840/12875 Tin 15150/15175 15175/15200 15020/15000 14600/14625 Zinc 2027/2036 2039/2057.50 2084/2096 2079/2090
1730/1745 1660.50/1701 5751/5785 1790.50/1812.50 12770/12795 14525/14600 2081/2094
PRECIOUS METAL PRICES (London fix, LBMA silver price, US$ per troy oz.) Gold AM 1193.70 1198.15 1198.00 Gold PM 1185.50 1203.40 1201.85 Silver 16.19 16.12 16.24 Platinum 1068.00 1085.00 1088.00 Palladium 699.00 718.00 724.00
1182.10 1177.75 16.03 1084.00 739.00
1178.50 1178.00 15.98 1073.00 731.00
June 16
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 15-19, 2015 37 New Highs Allana Potash Altiplano Mnls Altius Mnrls AMI Res Antioquia Gold Archon Mineral Bell Copper Canadn Plat Chalice Gold M Challenger Dee Dajin Res Detour Gold Dynasty Gold Fission 3.0 Frontline Gold Golden Hope Gossan Res Guyana Gldflds Houston Lake I-Minerals Integra Gold Long Harbour E Majestic Gold Metalcorp Metalore Res North Country Olympic Res Orex Expl Otis Gold Pac Bay Mnrls Quaterra Res Secova Mtls Sierra Iron Or Stina Res Stornoway Diam Uravan Minls Wescan Goldfie
281 New Lows Abcourt Mines Aben Res Advance Gold Aftermath Silv Alcoa* Alder Res Alliance Rs P* Alloycorp Almonty Ind Alpha Gold Alpha Nat Res* Altan Nev Mnls Altima Res Alto Vent Alturas Minls Amex Expl Anfield Res Anglo-Can Mng Apogee Silver Arcturus Res Argex Titanium Aroway Mnls Asher Res Athabasca Mnls Atlanta Gold Augen Gold Auramex Res AurCrest Gold Avrupa Mnls Azincourt Res Baja Mng Balmoral Res Bandera Gold Barisan Gold Barker Mnrls Baroyeca Go&Si Bayswater Uran BCGold Beaufield Res Belvedere Res Benton Cap
Big North Grap Bison Gold Res Blackstone Ven Bravada Gold Cadillac Vent Canadn Int Mnl Canadn Plat Canadn Zinc Canamex Res CaNickel Mng Cannon Pnt Res Canoe Mng Vnt Canyon Copper Caracara Silvr Cardero Res Carlin Gold Carmax Mng Cassius Vent Castle Peak Mg Centurion Mnls China Mnls Mng Claim Post Res Cloud Peak En* Colorado Res Commerce Res Compliance Eny Conquest Res Consol Energy* Copper North M Copper One Cornerstone Ca Cougar Mnls Crown Gold Dalton Res Ltd Darnley Bay Decade Res Denison Mines Denison Mines* Dolly Vard Sil Duncan Park H Durango Res Eagle Plains Ecuador G & C Edgewater Expl El Tigre Silvr Eldorado Gold* Eldorado Gold Energizer Res Energold Drill Erin Ventures Europn Uran Rs Fancamp Expl Firebird Res First Nickel Flinders Res Focus Graphite Frontline Gold Gabriel Res Galore Res Garibaldi Res Geodex Mnrls Geologix Ex Gitennes Expl Giyani Gold Glen Eagle Res Glenmark Cap Global Hunter Global Met Cl Global Minls Golconda Res Gold Bulln Dev Gold Fields* Gold Finder Ex Goldcorp* Golden Goliath Golden Mnls* Golden Queen Golden Share M Goldrea Res Gran Colombia Granite Ck Gld
Great Panther* Great Panther Harmony Gold* Harvest Gold Highland Res HiHo Silver Homestake Res Honey Badger E Inform Res Inspiration Mg Intrepid Pots* Ivernia J.A.G. Mines Jaxon Mnls Katanga Mng Kermode Res Killdeer Mnls Kiska Metals Kivalliq Enrgy Klondike Gold Knick Expl Lakeland Res Lara Expl Largo Res Latin Am Mnls Legend Gold Lomiko Mtls Luna Gold MacDonald Mns Magellan Minls Majescor Res Makena Res Marengo Mng Marifil Mines Maudore Minls MDU Res* Medallion Res Metals Ck Res Midas Gold Midlands Minls Midway Gold* Millrock Res Milner Con Slv Mindoro Res Mkango Res Monster Mng Mountain Boy M MPVC Nebu Res Network Expl Nevada Expl Nevada Sunrise New Gold New Gold* New Millennium New Milln Iron NGEx Res Nighthawk Gold Nippon Dragon Noble Mnl Expl North Am En P* North Am En Pa North Am Nickl North Am Pall North Am Tung Northcliff Res Northern Abiti Northern Dyn* Northern Dyn M Northern Freeg Northern Gld M Northisle C&G NQ Expl NV Gold NWM Mng Oceanic Iron O Olivut Res Oracle Mng Orbit Garant D Pac North West Pac Potash
Pac Wildcat Re Paget Mnls Paladin Energy Pan Global Res Peabody Enrgy* Pilot Gold Plata Latina M Platinex Plato Gold Potash C Sask* Prophecy Coal Purepoint U QMC Quantum Ml Red Moon Potsh Reunion Gold Rhino Res* Rio Silver Riverside Res RJK Explor Rockcliff Res Rockwell Diam Rodinia Lithm Romarco Mnrls Romios Gold Rs Sable Res Salazar Res Santa Fe Metls Santacruz Silv Satori Res Scorpio Gold Serengeti Res SGX Res Silver Bull Re Silver Pursuit Silver Range R SnipGold Solitario Ex&* Stans Energy Starcore Int V Stellar Pac Vt Stikine Energy Stonegate Agri Sultan Mnrls SunCoke Engy* Taipan Res Tanz Roy Exp* Tanzania Mnls Taseko Mines* Taseko Mines Teck Res A Terraco Gold Tiller Res Torex Gold Trevali Mng TriMetals Mng Trio Gold Corp Tumi Res Typhoon Expl UEX Corp Ultra Lithium Uracan Res Uranium Res* US Energy* Valterra Res Vendome Res Venerable Vent Victory Nickel Walter Energy* War Eagle Mg West Af Iron O Westcore Energ Western Pac Rs Westminster Rs Xmet Xtierra Yamana Gold* Yamana Gold Zazu Metals
FOR DAILY MINING NEWS, VISIT WWW.NORTHERNMINER.COM
15-06-24 5:22 PM
8 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
Antioquia to proceed with underground mine at Cisneros ANTIOQUIA, From Page 1
Guaico. Based on 45,400 metres of drilling, the company outlined measured and indicated resources of 599,056 tonnes grading 5.04 grams gold per tonne for 97,092 contained oz. gold. Inferred resources add another 1.1 million tonnes grading 4.90 grams gold for 172,861 contained oz. gold. Antioquia’s board announced that it would proceed with plans for an underground mine at Cisneros, and management is confident that exploration from underground will easily find more ounces of the precious metal.
why our partners are keen to loan us the money, because they recognize that.” The mine plan envisions that ore from Guayabito and Guaico will be sent to a central processing plant. The two deposits are 2 km apart, and mine development will start at Guaico first. Civil works and infrastructure are slated for September 2015, with completion before year-end. Tunnel and mine development will also start in September and finish in July 2016, Decker says. Antioquia expects to receive its environmental and mining permit
‘The minute you mention cyanide and tailings ponds, regulators get very nervous.’ — Jim Decker, executive vice president, Antioquia Gold “We made a corporate decision that the 270,000 oz. gold was sufficient to get a mine of this size started, because to double that resource would have required spending another US$3–5 million on exploration, and it probably would have taken another two years to get to that level,” Decker says. “We determined that we had sufficient reserves for a five- to sevenyear mine life at 30,000 oz. gold annually, and we felt that would generate significant cash flow to fund the additional drilling required to increase the resource.” Decker estimates that Antioquia could pay back the US$20 million loan from CMH within 19 months. (The loan is unsecured, and bears a 7.1% interest rate.) “By the end of 2016 we should spin off US$3 million a month in revenue from producing 2,500 oz. a month using a price of US$1,200 per oz. gold,” the mining executive says. “So no matter how slow our start-up is, this thing pays off that loan in less than two years. That’s why it’s a good deal and
for Guayabito in December 2015, and start civil works and infrastructure development there in May 2016, with tunnel and mine development work to follow in July 2016. Final basic engineering and processing plant design will be completed in July 2015, with construction and commissioning finished by July 2016. Decker expects that the two deposits will be linked by a tunnel, so there will be just one delivery system to the central mill. Antioquia will spend a bit more money (Decker estimates between US$500,000 and US$1 million) to build a dry-stacked tailings disposal system, rather than a more conventional wet tailings pond. “The minute you mention cyanide and tailings ponds, regulators get nervous,” Decker says. “We knew that if we did dry tailings it would make the permitting process much less rigorous, so from day one, we decided that we would incorporate the additional capital expense and go with dry tailings.”
Decker notes that dry tailings will take up far less space than a wet tailings pond, and given that Cisneros is in a semi-agricultural area where the main crop is sugarcane and land costs are at a premium, it makes more economic sense in the longer term. “We’ll save at least US$10 million by doing it this way, and we’re doing it in an environmentally friendly manner.” In terms of permitting, Decker says it took two years for Guaico to get underground mine approval. But he is quick to say that this time frame does not indicate the process today, because it was “early days” for both the federal and departmental governments, and there was a lot of uncertainty at the time about which group had jurisdictional authority. “The mines ministry has significantly revamped the application process and has committed to swift action for those applications that have been prepared properly,” he says. “In the case of [permitting] Guayabito, we anticipate a period of four to six months, maximum.” As for exploration upside, the hills around Cisneros — situated within the late Cretaceous Antioquia batholith — contain gold, Decker says, noting that there are six other targets on the property that warrant follow-up. “Gold mining has been going on in this valley for more than 100 years,” he says, adding that AngloGold Ashanti (NYSE: AU) and B2Gold’s (TSX: BTO; NYSEMKT: BTG) Gramalote project is 15 km to the east, while Red Eagle Mining’s (TSXV: RD; US-OTC: RDEMF) San Ramon project sits 55 km northwest. “There are gold occurrences literally across our 5,000-plus hectare property,” he says. “Most of it is covered by 5 to 20 metres of overburden, but panning samples have been corroborated by geophysical and geochemical results as well.” Decker notes that Antioquia has
A core storage facility at Antioquia Gold’s Cisneros gold project, 55 km northeast of Medellin, Colombia.
TNM June 29 2015 Issue.indd 8
ANTIOQUIA GOLD
Julian Villarruel, Antioquia Gold president and COO, at Cisneros gold project in Colombia. a good relationship with the local community and that most of the company’s workforce will come from there. “They’re good miners and will be delighted to work with modern mining machinery, a far cry from their previous artisanal methods.” As for working in Colombia, Decker says the 2002 election of President Alvaro Uribe has increased security, and that the threat of kidnappings and extortion from narco-guerillas like the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army has abated in most of
ANTIOQUIA GOLD
the country. Decker should know. He spent three years in the late 1980s in Colombia working as a production manager for Exxon, which at the time owned half of the Cerrejon coal mine. Since then he has worked in the country as a consultant, and says that by 2006, security issues “had been resolved very well.” “In reality, Colombia is safer today than Mexico,” he says. “When Uribe came in, he openly solicited the help of the U.S. and drove the FARC into the jungles, and that’s where they are right now.” Uribe also negotiated to lay down their arms in exchange for pardons, which has gutted their organization from 23,000 members down to 9,000, Decker says. Many of those left would like to negotiate similar pardons from Uribe’s successor, President Juan Manuel Santos, who came to power in 2010, Decker says. But there are still parts of Colombia that Decker says should be off limits to exploration companies, such as areas within 100 km of its borders with Panama, Venezuela and Brazil, but the rest of the country is safe. “We’re only 55 km from Medellin, the second-largest city in Colombia,” he says. “We’re in a highly populated area, and FARC activity is absolutely minimal. Yes, we have security measures in place, but they’re really not overly dramatic or expensive.” He says the government proactively supports mining, and the economy is business-oriented. “It’s the only Latin American country that has never had its currency devalued,” he says. “It is self-sufficient in oil and gas, one of the most significant coffee producers, a rich country in its own right, the people are professional, the laws are modern and a lot of them are modelled after Canadian laws. “The simple reason we chose Colombia was because of its high potential, and because it was also a secure place.”
15-06-24 5:22 PM
Canadian Gold Pages 9-13
June 29-July 5, 2015
Skeena Resources’ Spectrum gold-copper project in northwest British Columbia. SKEENA RESOURCES
Carlisle CEO says Lynn Lake is a ‘project for our times’
MDRU sheds light on gold in the Yukon
in a cash influx and a muVANCOUVER — The tually beneficial jointexploration game is venture arrangement. afoot for Carlisle GoldThe partners announced fields (TSX: CGJ; USin January that expendiOTC: CGJCF) across its tures at Lynn Lake would expansive land package total $13 million this year, at the Lynn Lake gold with $4 million earcamp in Manitoba. The marked for growth-oricompany never lacked ented exploration prodrill targets or historic BY MATTHEW KEEVIL grams. data on the 350 sq. km In November AuRico subproperty, but had opted to play it conservatively due to its junior scribed for 70.6 million common stature and the unpredictable na- shares in Carlisle — or 19.9% of ture of capital markets over the the company for $5.6 million at 8¢ per share — and signed a jointpast few years. The scenario changed for Carl- venture agreement to earn a 25% isle in late 2014 when it signed a stake in Lynn Lake for an initial strategic agreement with mid-tier $5-million cash contribution. Auproducer AuRico Gold (TSX: Rico can also earn up to another AUQ; NYSE: AUQ) that brought See CARLISLE, Page 10
Red Pine Exploration updates resource at Wawa project BY TRISH SAYWELL
Like many other juniors in today’s depressed commodities market, Red Pine Exploration (TSXV: RPX; US-OTC: RDEXF) seems to have a lot more going for it than its 4¢ share price would suggest. The junior has an option to own 30% of the 1.1 million oz. Wawa gold project, 2 km southeast of the historic mining town of Wawa in northern Ontario. The eight pastproducing underground mines on the property, all within 5 km of each other, produced more than 120,000 oz. gold before most of them shut down in the 1930s. “The average of those past producers was just over 8 grams per tonne, and they were all shallow underground operations,” Quentin Yarie, Red Pine’s president and chief operating officer, explains in an interview. “The area around Wawa was Ontario’s first gold rush.” Red Pine is operator of the project, which sits 40 km from Richmont Mines’ (TSX: RIC; NYSEMKT: RIC) Island gold mine, and 100 km from Wesdome Gold Mines’ (TSX: WDO; US-OTC: WDOFF) Eagle River mine. In addition to Red Pine, Augustine Ventures (CNSX: WAW; USOTC: AUGUF) has an option to earn another 30% stake in the project from Citabar, a privately held company. On June 10, Red Pine reported an updated resource for the Surluga deposit, one of the past pro-
TNM June 29 2015 Issue.indd 9
ducing deposits on the property, outlining an inferred resource of 19.8 million tonnes grading 1.71 grams gold per tonne for 1.1 million contained oz. gold. Compared with the previous resource estimate, the new numSee RED PINE, Page 12
Workers in the field at Kaminak Gold’s Coffee gold project in west-central Yukon’s White Gold district. BY LESLEY STOKES
VANCOUVER — When Underworld Resources, now Kinross Gold (TSX: K; NYSE: KGC), found the White Gold deposit in 2008 — a gold-only system near the prolific Klondike placer gold fields, 95 km south of Dawson City — it swept the territory into its second gold rush. Exploration surged to $300 million from below $10 million in the early 2000’s, while over a hundred junior mining companies and countless prospectors staked
200,000 claims. But this time, the modern explorers brought augers and drills, rather than the gold pans their ancestors used at the turn of the 19th century. While most were on the hunt for the motherlode, there were others — like the Mineral Deposit Research Unit (MDRU) at the University of British Columbia — that went searching for answers. “This is a territory with many mineralizing belts that haven’t been classified or put into any context,”
KAMINAK GOLD
Craig Hart, director of MDRU, tells The Northern Miner. “In 2010 we collaborated with industry and government groups and started the Yukon Gold Project, so we can bring all that knowledge together.” Since 1898, placer mining in the Klondike has produced 20 million oz. gold southeast of Dawson City. The territory’s other placer districts — Dawson Range, White Gold, Fortymile and Sixtymile — produced up to 1.6 million oz. gold. But finding the bedrock source See MDRU, Page 13
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10 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
Canadian Gold
Carlisle CEO says Lynn Lake is a ‘project for our times’ CARLISLE, From Page 9
35% interest by spending $20 million over three years and delivering a feasibility study. The goal posts shifted in April when AuRico arranged a $1.5-billion merger with Alamos Gold (TSX: AGI; NYSE: AGI). But according to president and CEO Abraham Drost, Carlisle remains optimistic about Lynn Lake’s prospects despite the fluidity in the partnership dynamic. “The deal is scheduled to close [before July], but it looks like a fait accompli at this point. From our perspective we see business as usual. I’d note that the champions of Lynn Lake at AuRico are making the transition over to Alamos, including chief operating officer Peter MacPhail,” Drost added. “Since the project is in Canada we think it meets the jurisdictional criteria for Alamos, and it should be good for us, because the merger will result in a company with a stronger balance sheet. From our understanding the work programs will be moving ahead as planned,” he said. The companies are expected to put $9 million towards a Lynn Lake feasibility study this year. The plan will focus on the historic MacLellan and Farley Lake mine sites, which were the subject of a preliminary economic assessment (PEA) released in early 2014. The PEA is based on 9.1-million measured tonnes grading 2.09 grams gold equivalent for 547,000 contained oz., and 14.2 million indicated tonnes of 2.41 grams gold for 949,000 contained oz. The US$185-million development featured a sequenced openpit mining model between Farley Lake and MacLellan that would process material via a central mill facility that is expected to run at 7,500 tonnes per day. Lynn Lake would crank out 145,000 oz. gold annually over 12 years, with all-in sustaining costs of $644 per oz. Even at US$1,100 per oz. gold the PEA featured intriguing eco-
TNM June 29 2015 Issue.indd 10
CARLISLE GOLDFIELDS
The headframe at the historic MacLellan mine site, part of Carlisle Goldfields’ Lynn Lake gold project in northwest Manitoba.
CARLISLE GOLDFIELDS
Abraham Drost, Carlisle Goldfields president and CEO, in a core shack at the Lynn Lake gold project in Manitoba. nomics, including a US$257-million after-tax net present value at a 5% discount rate, a 26% internal rate of return and a 2.8-year payback period. Now that Carlisle has a cashedup joint-venture partner, however, the strategy at Lynn Lake may change. Not only will the companies not be as sensitive toward development capital — which could result in developing Farley Lake and MacLellan at the same time — but the exploration upside on the greater property package can get the attention it needs to join the mine plan. “It’s one of the big upsides of working on a collection of historic,
brownfield sites ... many of these areas have been explored since the 1940s, but we put it all together in one cohesive package. The big game-changer for us is that we now have the funding to follow up on a real wealth of historic exploration data,” Drost said. “I’d say that based on past drilling, we conservatively have 30 solid gold occurrences along the belt that remain untested,” he added. MacLellan and Farley Lake are situated in the north belt of the Lynn Lake greenstone belt, within the Churchill structural province of the Canadian Shield. The north belt is a north-facing
homocline and consists of rhyolites, overlain by andesite and basalt, sedimentary rocks and an upper basaltic unit. Both deposits are located within a structural corridor called the “Rainbow trend.” MacLellan has been recognized as a synshearhosted, orogenic-related goldsilver deposit, while Farley Lake is considered an epigenetic, ironformation hosted gold deposit. Carlisle will be operating drill programs this year on “special exploration areas” under the agreement with AuRico, which refer to targets that lie outside the feasibility level areas around MacLellan and Farley Lake. The company has a historic exploration database, including 5,000 drill holes, which has been combined with modern inducedpolarization surveys to identify priority targets. The first area of interest lies near Maynard Lake, where Carlisle has identified “good gold values” in historic drill holes. The company released assays from
five holes punched at the target on June 10, with highlights including: 10.6 metres grading 1.64 grams gold per tonne from 36 metres deep in hole 15-04; and 4.5 metres of 5.04 grams gold from 107 metres deep in hole 15-05. “The main structure cutting through there is the Johnson shear zone, and we’ve already outlined significant inferred ounces along trend there. The grades tend to be lower down south, but I think once we have the mill built, the grade threshold will really come down,” Drost noted. “The real priority in our exploration is higher-grade shoots, and opportunities along the Johnson shear. Adding some higher-grade results in that area could see the entire belt moved into the upcoming feasibility study,” he said. Carlisle classifies the area as the southern belt, which hosts the Burnt Timber and Linkwood deposits. The drilling shows potential for high-grade shoots due west along trend of the inferred resources, related to splay structures along the Johnson shear. Burnt Timber hosts 23.4 million inferred tonnes grading 1.04 grams gold for 781,000 contained oz., while Linkwood’s resources total 21 million inferred tonnes of 1.16 grams gold for 783,000 contained oz. “We’re not restricted from putting some focus on the northern belt as well. We have a beautiful gold occurrence that hosts tens of metres of substantial grades, sitting all alone in an interesting structural and geological environment,” Drost added. “That’s an example of a historic showing we acquired by staking, and lo and behold, previous work appears to show it’s a dead ringer for Farley Lake.” Carlisle has traded within a 52-week window of 13¢ to 42¢, and closed at 26¢ per share at press time. In late January the company completed a 6.5-to-1 share consolidation, which results in 55 million shares outstanding for a $14.2-million market capitalization. Drost explained that the consolidation was meant to “clean up” some liquidity issues and generate a better share price to capitalize on investment opportunities. “Listen, we’re caught in a downdraft in the mining cycle, and the juniors tend to lag the mid-tiers and seniors on, let’s say, leverage to gold price. From my perspective Lynn Lake is a project for our times. We don’t need the gold price to go up since we have strong economics, even below current levels.”
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Canadian Gold
THE NORTHERN MINER JUNE 29-JULY 5, 2015 11
Pure Gold advances exploration at Madsen BY SALMA TARIKH
Pure Gold Mining (TSXV: PGM; US-OTC: LRTNF) has started a mid-year exploration program at its Madsen gold project in Ontario’s prolific Red Lake gold district, after encouraging results from its 5,000-metre drill program. The company’s wholly owned flagship project covers more than 50 sq. km, making it the third-largest land package in Red Lake. It hosts two past-producing mines; mine infrastructure, including a permitted mill and tailings facility; a 1,275-metre deep shaft; and a high-grade resource. The resource lies within four zones: Austin, South Austin, McVeigh and Zone 8. It contains 928,000 oz. gold in indicated resources based on 3.2 million tonnes grading 8.93 grams gold per tonne, plus 297,000 oz. in inferred from 790,000 tonnes at 11.74 grams gold. Rather than recondition the shaft and process the underground resource — which is what Madsen’s previous owner Claude Resources (TSX: CRJ; US-OTC: CLGRF) did, before it ran into financial problems — Pure Gold is focusing on exploration. “What Claude was doing with the Madsen mine was really trying to fast-track it back into production. And what we are trying to do is take a different approach and discover more high-grade at surface, and build a resource from there. And then you tap into the permitted mill and the permitted tailings facility that we have,” the company’s director of investor relations Patrick Reid says. Pure Gold is basing its exploration model on new geologic understanding of ultramafic contacts and structural controls at Red Lake that have led to large gold discoveries in recent years. Among them are Goldcorp’s (TSX: G; NYSE: GG) High Grade zone (HGZ) and HG Young at the Red Lake mine complex, and Rubicon Minerals’ (TSX: RMX; NYSE-MKT: RBY) F2 gold system at the Phoenix mine. What spearheaded these discoveries in the more than 80-yearold district was an initiative led by former Goldcorp CEO Rob McEwen in 2000. The executive, looking to revamp the then-underperforming Red Lake mine, made all of the asset’s geological data available online to anyone who wanted to help uncover the next 6 million oz. deposit, in exchange for cash prizes. The “Goldcorp Challenge” resulted in over 100 new targets and ideas. “That process really reinvigorated Red Lake in terms of new and modern exploration techniques,” Reid says. Pure Gold’s director Mark O’Dea placed second in the competition, while the junior’s chief geoscientist Christopher Lee was a semi-finalist. Now Pure Gold — led by CEO Darin Labrenz, a former geologist at Placer Dome’s Campbell mine in Red Lake — aims to uncover its own high-grade gold deposit, using a new geologic model and modern exploration techniques to test Madsen’s 10 km long ultramafic contact near surface. “No one has really looked at this property through an exploration eye lens, so to speak, in the last 30 years. So let’s take the Goldcorp challenge kind of aspect and the new exploration models that have been refined there over the last 10 years, and make another new discovery like what Rubicon did, or what Goldcorp is drilling off at HG Young,” Reid says.
While historic mining at Madsen focused on unconformity-related mineralization, the junior has shifted its focus to ultramaficrelated mineralization. Zone 8 — unearthed later in the mine life — sits in the footwall of the Madsen mine along the ultramafic contact, and hosts 50% higher grade than the historic run of mine, the company says. As part of its 2015 winter program, Pure Gold has tested prospective geologic structures in the Russet South and Fork zone, with an objective of finding new zones of near-surface, high-grade gold mineralization, Reid notes. It completed 4,000 metres at Russet South, which sits 1.4 km west of the Madsen shaft and 1.6 km up-dip from Zone 8. A recent highlight hole testing the Kappa target hit multiple, discrete highgrade zones, including 0.6 metre of 35.2 grams gold and 8 metres of 5.4 grams gold, with a 2.9-metre interval grading 12.3 grams gold. Pure Gold says the mineralization at Russet South is similar to the Madsen deposit and other recent discoveries at Red Lake, such as Goldcorp’s HG Young, Coche-
nour and HGZ. Drilling to date at Russet South has outlined “near-surface highgrade gold mineralization with a 600-by-350-metre target horizon,” and remains open to expansion, Pure Gold says.
MacKenzie cautions the company has hit “thin pockets of moderately high-grade mineralization peripheral to known zones of mineralization,” and that its exploration program “is set to lose some momentum,” given the mid-
‘Here you are trying to tag into these kind of narrow structures that could be three to five metres wide.’ — Patrick Reid, director of investor relations, Pure Gold Mining The firm also recently completed 1,000 metres at the Fork zone, 1.7 km southwest of the Madsen mine, which extended the strike length of the zone by 350 metres southwest. “Grades and thickness continues to be a challenge in this zone, but the exploration thesis for wider and higher grades at the intersection of an ultramafic unit remains,” Salman Partners’ analyst Kevin MacKenzie writes. While the firm has better exploration luck at Russet South,
year program contains little to no drilling. In response, Reid says it’s a tough market to raise funds for the extensive drilling needed to uncover large, high-grade gold deposits. “When you’re trying to target pretty narrow structures, your hit rate is not as high as if you were drilling off a porphyry, where you’ve got hundreds of metres of mineralized zone that you are drilling into. Here you are trying to tag into these kind of narrow structures that could be 3 to 5 me-
tres wide. So if you are 10 metres off, you may get a little halo of gold, but you didn’t hit the right zone.” Given the constrained market, the company is drilling the highest priority targets and waiting for the assays to come in before taking the next step, Reid says. The mid-year program will compile data, refine 3-D modelling and incorporate drill results. It will also include surface work and mapping for a late-2015 drill program, which will focus on Russet South and test continuity between the Alpha, Beta and Kappa targets. The junior recently closed at 15.5¢ per share with a $4.5-million cash position. Salman Partner’s MacKenzie has a 12-month target of 35¢ per share. “Although we feel that the Madsen gold project has lost some exploration momentum … the overall exploration and investment thesis has not changed. Pure Gold remains wellpositioned for discovery, and benefits from a permitted mill and tailings facility, a safe operating jurisdiction and a management team with a track record of exploration success,” he writes.
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Seiter&Miller 001223 Pub. The Northern Miner Size. 8 x 10 Issue April 2014 Art Director: sd/lg Copywriter: ms Account Executive: wt Date 03/05/14 TNM June 29 2015 Issue.indd 11
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JUNE 29-JULY 5, 2015
Canadian Gold
THE NORTHERN MINER
Red Pine Exploration updates resource at Wawa project
RED PINE EXPLORATION
Red Pine Exploration personnel in the core shack at the Wawa gold project in Ontario. RED PINE, From Page 9
bers mark a 14.7% improvement in grade and a 1.5% increase in gold content, all within less tonnes of ore. Surluga is also open at depth and along strike. Yarie says that while the shearhosted deposit is interesting, “we don’t think it’s the highest-grade
material on the property. There are high-grade zones ... but there’s more to be found.” The company started with Surluga because it has seen the most historic drilling and exploration. And he believes that some of the historic underground workings there could still be used. Surluga
A drill rig at Red Pine Exploration’s Wawa gold project.
was last mined in 1989. In terms of development, the mining executive envisions starting with small open pits, and moving to mining deeper ore shoots underground. “If you look at Probe Mines, that’s the model,” he says, “except we believe our shallow pits would
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be higher grade than Probe’s. We’ve got 650,000 oz. over 2 grams [of pit-constrained inferred resource], and for an open pit, that’s good grade. You probably would never take it that deep, but you could follow the ore shoots down. Once you expose them, you can map them better.” Surluga is open at depth, and the outside pit-constrained resource measures 298,000 oz. gold at 1.07 grams gold for all gold zones located between surface at a vertical depth of 300 metres. The highgrade underground constrained resource totals 114,000 oz. gold at 3.73 grams gold per tonne. According to a recently completed technical report by Ronacher McKenzie Geoscience, there is more gold mineralization in Surluga’s hangingwall and footwall secondary structures, but its geometry is poorly constrained. The updated resource was based on 2,007 historical core boreholes (126,067 metres) — drilled between the early 1900s and the 1990s, and core-drilled by Augustine Ventures in 2007 and 2011 — and another 26 core boreholes (5,594 metres) that Red Pine drilled in 2014, and between February and April of 2015. Over the next year, Red Pine will spend $1.5–2 million on drilling the higher-grade deposits to try to get a handle on how large they are. There are also a number of shallow, sub-cropping gold showings on the Wawa project’s 56.6 sq. km land package, he adds, and they vary in size. Yarie points out that with the depressed state of the markets, drill costs have come down, and that Red Pine can drill at least
RED PINE EXPLORATION
6,000 metres with that kind of an exploration budget. Red Pine will focus on the topthree targets based on historic data the company has been compiling, and Yarie says he is confident that the company will at least double the resource size without much trouble. “If you ask me, I think I see something between 2 million and 4 million oz. gold, with grades greater than 5 grams gold per tonne,” he says. “We’re over a million ounces now, so I don’t think it’s going to be hard to get to 2 million oz., to be honest.” Yarie also points to the property’s attributes, which include nearby road access, a rail line and a 230-kilovolt power line, which crosses the southern part of the property. A second power line intersects the western part of the property. Red Pine can work on the property year-round, and doesn’t need to build a camp because it is close to the town of Wawa, which also offers ample skilled labour. As a brownfield with an existing tailings pond, the government has monitored the site for the last two decades. “The fact that it has been monitored for so long means that it can go into production even faster, and makes it a better target for takeover,” he says. “The challenge is defining a resource there that is attractive to a major or a mid-stream gold producer, and I think we’re well on our way to doing that.” “It’s nice working on something that has a resource on it,” he adds. “We just need to expand the existing resource into a profitable one.”
Canada 1-800-892-8293 USA 1-800-748-2375
www.dmcmining.com
TNM June 29 2015 Issue.indd 12
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Canadian Gold
THE NORTHERN MINER
JUNE 29-JULY 5, 2015
13
MDRU sheds light on gold in the Yukon
MDRU
The geologic characteristics and known deposits in and around the Yukon’s White Gold district. MDRU, From Page 9
has always been a challenge for explorers. Before White Gold was discovered, the main lode gold source near the Klondike was the Lone Star mine, which produced a mere 1,240 oz. gold between 1912 and 1914. Harts says the disparity between alluvial and bedrock ounces isn’t unusual, considering the west-central part of the Yukon has never been glaciated. Instead, the rocks have slowly rotted away for millions of years, and any hard surfaces are long since buried beneath the northern landscape. The rocks underlying west-central Yukon are referred to as the Yukon-Tanana terrane — a montage of northwest-trending volcanic arcs and sedimentary basins that collided to form the western margin of North America. During the late Triassic to early Jurassic (179 million to 220 million years ago), the land uplifted rapidly through thrust faulting, and erupted in volcanism. Around the same time, copperand gold-rich porphyry and epithermal deposits — such as Imperial Metals’ (TSX: III; US-OTC: IPMLF) Red Chris mine and Pretium Resources’ (TSX: PVG; NYSE: PVG) Brucejack gold deposit in northwestern B.C. — formed in a similar volcanic arc to the south called the Stikine. Meanwhile in the Yukon, the highlands were levelled by erosion and the deep roots of similar porphyry systems were exposed. Capstone Mining’s (TSX: CS; US-OTC: CSFFF) Minto mine is one such example. Located 240 km north of Whitehorse, the Minto copper-gold, intrusion-related system is the only active mine in the territory. It has total measured and indicated resources of 47.9 million tonnes of 1.1% copper and 0.4 gram gold. Carmacks Copper is another likely candidate. The deposit is located 192 km north of Whitehorse and operated by Copper North Mining (TSXV: COL). The company is working on a new
TNM June 29 2015 Issue.indd 13
prefeasibility study, and is expanding the oxide resource with drill programs. After the early Jurassic, very little was known about what happened next. So when White Gold was found near the Klondike, MDRU investigated the rocks to determine how and when it formed.
When the crust cooled, metalrich fluids circulated once again through networks of fractures and faults within the Dawson Range, and may have been responsible for Kaminak Gold’s (TSXV: KAM; US-OTC: KMKGF) Coffee deposit, 30 km south of White Gold. The half-oxidized deposit hosts 14 million indicated tonnes grading 1.56 grams gold per tonne for 719,000 oz. gold, plus 79 million inferred tonnes at 1.36 grams gold for 3.4 million oz. gold. Kaminak is on schedule to finish a $21-million feasibility study next year. Along a similar structural trend next to the Coffee property is Independence Gold’s (TSXV: IGO) Boulevard project, which boasts gold-in-soil anomalies for over a kilometre. Independence has begun a 3,150-metre drill program testing the Denali and Sunset zones. After the orogenic gold deposits were formed, a surge of plutonism emplaced highly prospective porphyry and epithermal
— to guide explorers into new parts of the district, and give them a better idea of where to look.” Other mineralization was much younger — ranging from the middle Cretaceous to the late Cretaceous (115 million to 72 million years ago). During this time, granitic batholiths — along with the Mt. Nansen
‘We guide explorers into new parts of the district, and give them a better idea of where to look.’ — Craig Hart, director, Mineral Deposit Research Unit “The age-dates from the district suggest there was a big fluid event around the time of White Gold,” Hart says. “And we also identified the structures that were key to its formation, which highlights where people should explore elsewhere in the district.” From the studies, Hart says that during the middle to late Jurassic (155 million to 163 million years ago), the crust was cooling after a long spell of magmatism, but uplifted into a mountainous belt — or “orogen” in geological terms. Metal-rich fluids were driven by bouncing geothermal gradients and migrated along east-trending structures, forming the orogenic White Gold deposit, which hosts an inferred resource of 9.8 million tonnes of 2.67 grams gold for 840,000 oz. gold. “The easterly trending structures that govern gold mineralization are difficult to see on largescale aeromagnetic geophysical surveys because they have such small displacements,” he says, mentioning that higher-resolution surveys have given explorers a better vector towards mineralization. MDRU also identified a link between the placer gold from the Klondike and Sixtymile districts, with the gold from the Jurassicaged orogenic deposits. “There was a lot of gold associated with this event,” he says. “And that’s part of our objective at MDRU
volcanics — were emplaced along a northwest-trending arc called the Dawson and Moosehorn Ranges, stretching from the town of Carmacks to north of the Yukon River. The magmatism led to Rockhaven Resources’ (TSXV: RK) Klaza vein-hosted deposit in the Dawson Range, and Sumitomo Metal Mining’s Pogo mine in Alaska.
deposits along the axis of the Dawson Range. The uplifting Yukon-Tanana terrane also slowed to a halt, and the shallow deposits were protected from erosion. One such example of a preserved porphyry system is Northern Freegold Resources’ (TSXV: NFR) Nucleus gold-silver-copper deposit, 200 km northwest of Whitehorse. The deposit is part of a larger, gold-rich system that extends east to the Revenue zone. Resources at Nucleus include 1.59 equivalent oz. gold in 74.7 million tonnes as indicated, and 1.02 equivalent oz. gold in 63.8 million tonnes as inferred. One of the most significant deposits that formed during this period was Western Copper and Gold’s (TSX: WRN; NYSE: WRN) Casino copper-gold-molybdenum-silver porphyry deposit, 200 km northwest of Whitehorse. The deposit has an oxide and sulphide reserve of 8.9 million oz. gold and 4.5 billion lb. copper, and inferred resources of 9 million oz. gold and 5.4 billion lb. copper. The proposed mine is in the environmental-assessment phase, and mine construction is scheduled for next year. Strategic Metals (TSXV: SMD) is also exploring for Casinostyle deposits at its Hopper project, 190 km northwest from Casino. The company has begun a 2,000-metre program chasing a soil geochemical anomaly that the company says is larger than the one at Casino. Geochemically sampling soil has found many blind ore deposits. “Because these rocks have never been glaciated, the soil is extremely faithful to the bedrock below,” Hart says. “And when you use an auger, you get the most representative geochemical anomaly.” He explains that arsenic is the pathfinder element of choice for explorers because gold-in-soil is often less consistent, and can lead to false anomalies. Although the Yukon Gold project wrapped up in 2012, Hart says there is a lot of interest in driving the project forward. “The project really provided the industry with exploration models and tools that help vector towards mineralization, and we want to apply it to eastern Alaska,” he says. “The geology there is similar and it hasn’t been glaciated, so it’ll be interesting to see how it all ties in.”
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14 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
How to Obtain Personal & Professional Balance A Journey of Separation In business today, leaders and organizations have to be more aware than ever of how their employees balance their work demands and their personal demands. Organizations are constantly focusing on how to improve production, profits and performance, while at the same time maintaining a high level of morale. The issue is the search for personal and professional balance. As there are no definitive parameters for measuring balance, the real goal should be personal and professional separation. In the search for this delicate balance, a leader must first understand why separation is key, and understand the consequences when personal and professional lives overlap.
the company that pays that employee deserves that employee’s very best, their families deserve their very best too.
Consequences In many organizations, leaders may not deal with a struggling employee appropriately, which may result in turnover. A strong leader must sit down with that employee—and with empathy—share with them the consequences of their behaviors if they don’t change. They can also explore options available to the employee, if there are any, but the key is to directly deal with the issue. Some people may find this behavior harsh, but in reality it is By Nathan Jamail the exact opposite. The leader needs to help the person up so they can get better or give them the personal time and space to go home and resolve their issues, but to allow a person to suffer and ultimately destroy their career is selfish. When people don’t have personal and professional separation then they feel overrun and ineffective in all things. This causes employee burnout and a difficult home life.
Why separation of is so important As technology has revolutionized the business landscape, many professionals no longer just leave their work at the office. This causes many people to feel that they spend all their time working or on call, regardless of location. At the same time, many parents are prioritizing attendance of their kids’ events and family lunch dates using the same technology within the same time frames of ‘normal business hours’. As a result, many people are doing two things at once–and doing neither one very well. How many times have you seen parents at lunch with their child and all of their attention is devoted to their smartphone? Or perhaps that is you? When your personal and professional lives overlap in this manner, both of them suffer.
In leadership today a leader must be clear in their expectations to their team. To be successful a leader must have employees that are able and willing to do what it takes to achieve success. This only happens when all of the employees are at their best. Separating personal life and work does not eliminate the personal side of business—it actually strengthens it. The greatest achievement is when a person is doing a job they love and have a family that loves them. The goal is not to sacrifice one for the other, rather is to be the best at both and the best way to do that is to separate them so neither is affected negatively by the other. Here are a few tips on ways to implement triggers for you to remember to be present:
When a person is at work they need to be at work, no matter their family dynamics or problems. Problems can make more problems: If an employee is experiencing personal issues, such as marital problems or the loss of a loved one, it can be extremely distracting to say the least. Personal issues can cause them to be withdrawn and less effective, costing the organization and also impacting other employees. When this happens no one wins. On the other side of the coin, if a leader is having a tough time at work and brings their pain, stress and frustration home they can potentially take it out on their family which negatively affects their home life. At the office: Jobs frequently require people to work late, to put in extra hours and spend days on the road away from the family. This is because the job needs to get done, and a true professional understands that they may have to miss a child’s event or be away from home at inopportune times. To be great in business a person must make sacrifices.
Tips: ∙ Never walk in the house on the phone. ∙ Change your clothes from work clothes to home clothes immediately upon arriving home so you feel the part. ∙ Make eye contact with those speaking with you, no matter if they are your co-worker, your boss, or your three year old. ∙ Share the expectations with your company team and your family. ∙ Be aware of your personal state of mind and change it if necessary.
At home: Most professionals today work to provide for their family and feel their family or personal life is the most important thing to them. Moms want to be moms, dads want to be dads, and people want to be who they are other than what their business card states.
Final thought: Be happy no matter where you are in your journey. Happiness is not a destination it is a mindset and a journey- ultimately it is a choice. Happy employees make great employees and happy people, make great people.
Question: So how do you do both?
Nathan Jamail, president of the Jamail Development Group, and author of the best-selling Playbook Series, is a motivational speaker, entrepreneur and corporate coach. As a former Executive Director, life insurance sales professional and business owner of several small businesses, Nathan travels the country helping individuals and organizations achieve maximum success. Nathan has worked with thousands of leaders in creating a coaching culture. Get your copy of Nathan Jamail’s most recent book released by Penguin Publishers, “The Leadership Playbook” at www.NathanJamail.com.
Be present at work: When a person is at work they need to be at work, no matter their family dynamics or problems—they must learn to leave them at home. The one thing that can make any family problem even more difficult is for that person to lose their job because their personal issues are affecting their performance. Be present at home: When a person is home with their family they need to be present. Leave your phone and your uniform or suit jacket at the door. Just like
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THE NORTHERN MINER
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Journeyperson Carpenter/Scaffolder Saskatchewan Online Reference No: 61914 Cameco is looking for a motivated and ambitious individual to join the operational services team at the world’s second largest high grade uranium deposit, located at the Cigar Lake operation in northern Saskatchewan
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The role of the Ministry of Energy and Mines’, Mines and Mineral Resources Division is to stimulate the growth of the mining industry by advancing globally competitive polices and geoscience and ensuring safe and environmentally responsible mineral exploration and mine development and production.
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TNM June 29 2015 Issue.indd 15
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THE NORTHERN MINER
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Corvus CEO sees exploration upside at North Bullfrog
CORVUS GOLD
A view of Corvus Gold’s North Bullfrog gold-silver project from the Sierra Blanca Ridge, 10 km north of Beatty, Nevada. CORVUS, From Page 1
at a stockwork vein system that was fairly broad with strong grades.” Not surprisingly, the highergrade areas play a big role in Corvus’ economic study. North Bullfrog would carry a reasonable US$175-million price tag and produce 149,000 oz. gold annually over a decade-long mine life, at cash costs of US$635 per oz. The project boasts a competitive 0.6to-1 strip ratio, which is where the lower-grade, disseminated material comes into play. “My history has made me really focused on metallurgy ... if we’re going to have low-grade, we want just the best oxides, and these lowsulphidation vein systems are typically good recovery targets. If you just look at the oxide material — which run over the top 150 metres in our deposit — it responds exceedingly well to heap-leaching,” Pontius says. “The key piece for the lowgrade component was when we determined there was no constant-tail effect, which means no base level of gold you don’t get out of the rock,” he added. “It created a product that doesn’t have a high margin, but supplies some financial upside to the project.” According to Corvus’ mine plan, the heap-leach material accounts for 23 million measured and indicated tonnes grading 0.3 gram gold per tonne and 0.46 gram silver per
TNM June 29 2015 Issue.indd 17
tonne at a 0.15 gram gold cut-off grade. Disseminated inferred resources tack on 176 million tonnes of 0.19 gram gold and 0.67 gram silver. Meanwhile, Yellowjacket’s measured and indicated resources total 5.7 million tonnes of 2.22 grams gold and 16.67 grams silver at a 0.52 gram gold cut-off grade. Measured and indicated in-situ metals in the PEA total 627,700 oz. gold and 3.4 million oz. silver, while inferred material hosts 1.13 million oz. gold and 4 million oz. silver.
US$1,200 per oz. gold price, North Bullfrog would have a US$246million after-tax net present value (NPV) at a 5% discount rate, 38% internal rate of return (IRR) and a 2.2-year payback period on initial capital. Assuming US$1,100 per oz. gold, North Bullfrog carries a US$175-million after-tax NPV and a 29.6% IRR. “In the market today there is a real sensitivity about gold price. People want to see a project that’s resilient at lower gold prices, and we were able to create a scenario that still provides a good eco-
‘People want to see a project that’s resilient at lower gold prices.’ — Jeff Pontius, CEO, Corvus Gold The heap-leach component designed for the project’s northern area would operate at an average 44,400 tonnes per day, while the higher-grade YellowJacket vein and stockwork mineralization would be crushed and milled at a rate of 3,000 tonnes per day. The proposed mill circuit involves cyanide leaching of a gravity concentrate and the final cyanide leaching of tail products. Corvus estimates it would average a 74% recovery via heap leaching and 87% at its carbonin-leach mill. At its current design and a
nomic performance at lower metal prices,” Pontius said. “I think that helps establish faith in the asset.” The real upside for Corvus would be finding high-grade ounces at Yellowjacket’s extensions, or at new priority targets in North Bullfrog’s eastern areas that carry similar geophysical and geochemical signatures. Pontius points out that two-thirds of the pre-tax cash flows in the PEA base case — which total US$479 million — would come from the highgrade ounces at Yellowjacket. “To some degree it is scalable.
Remember we only have mill ore for the first six years of our mine life. Our real goal right now in the exploration program we started two months ago is to define new high-grade zones,” Pontius explained. The eastern prospect covers 15 sq. km that hosts promising alteration. Corvus has determined that the rock ages in the area correspond to mineralization at the North Bullfrog deposits. The company has outlined a structure that looks analogous to Yellowjacket, and unearthed mineralization at the target. “We have confidence in the relationship between the deep structures and the ability to channel fluids, as they come up to form this big alteration zone we’ve exposed in the east. There’s potential for that area to host a really big gold deposit,” Pontius said, adding that after Corvus drills around Yellowjacket, it intends to turn its drill eastward. “We’re surveying soil right now to see if we can pop up any geochemical anomalies. Amazingly enough, we were out in the field and found a metre-wide vein with great boiling textures. It’s the exact kind of thing we want to see, and that vein system extends for a kilometre, where we’ve also found highly anomalous gold and silver values,” Pontius added. Corvus closed a $4.5-million non-brokered private placement
in February, wherein it issued 4.5 million shares priced at $1 per share. The financing was impressive considering it carried no warrants, and was completed at a 35% premium to the company’s spot share price. Pontius says this speaks to the confidence of Corvus’ two major shareholders: Tocqueville Asset Management and AngloGold Ashanti (NYSE: AU; ASX: AGG). Corvus has traded within a 52week window of 63¢ to $1.62, and closed at 75¢ per share at press time. The company reported cash and equivalents of nearly $7 million at the end of February, and has 80.2 million shares outstanding for a $60-million market capitalization. “We need to do what we do best. People always ask me: ‘How are you going to continue to create more value?’ The only way I know how to do it is with exploration and the drill bit. I’m a geologist, and you’re not going to hire me to build or run your mine. Trying to cobble together a mining team is honestly one of the worst things you can do,” Pontius said. “From my angle, we’ve seen more mergers and acquisitions in the gold space over the past five months. So this year has been one where a project like Bullfrog has gotten a lot more interest. I believe the best result for us would be a transaction with a quality mine builder and operator.”
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18 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
Career Opportunities
Paladin Energy
Join us. Make a difference. At Workplace Safety North, we are dedicated to bringing every worker home safe and healthy. We are seeking people who share our passion for health and safety excellence for the following opportunities in Sudbury…
Industrial Hygiene/Ventilation Specialist A unique opportunity exists to apply your knowledge and serve the Ontario mining industry by acting as a catalyst for positive change in industrial hygiene and mine ventilation practices. Our mission includes the delivery of a full range of underground ventilation and industrial hygiene programs and services that meet industry safety needs including providing auditing, consultation, and training services to clients. Utilizing your knowledge of industrial hygiene and mine ventilation systems, you will coordinate the activities of Mining Industry Technical Advisory Committees while working with other WSN staff in developing and delivering programs and products for the industry. You possess the leadership skills and motivation to initiate client contact and identify problem areas, as well as the ability to develop work plans and schedules, set and meet goals, and work with minimal supervision. Your relevant undergraduate degree or comparable combination of experience and education as an engineering technician/technologist is complemented by expertise in industrial hygiene.
Culture, Learning, Development & Audit Specialist
PALADIN ENERGY
Field personnel approach a landing helicopter near Otter Lake at Paladin Energy’s Michelin uranium project, 140 km northeast of Happy Valley-Goose Bay, Newfoundland and Labrador. PALADIN, From Page 1
Reporting to the Director of Mining, you will support organizational culture change across the Ontario mining industry by proactively assisting our clients in achieving optimum health and safety performance. Utilizing your adult education and audit knowledge, you will provide assistance to field personnel, associate trainers, and clients in the delivery of training sessions and deliver the mining train-the-trainer program. Highly organized with strong engagement and assessment skills, you have related job experience and a post secondary degree, preferably with a focus in adult education. A Canadian Registered Safety Professional (CRSP) designation and Lead Auditor certification are both considered assets to your candidacy. The above positions require that the applicants possess a valid driver’s licence. As a condition of employment, post-offer testing applies as arranged by Workplace Safety North. If you feel you meet our needs and are interested in being a part of a rewarding career in occupational health and safety, please forward your written application, by July 12, 2015, to: Human Resources Workplace Safety North 690 McKeown Avenue North Bay, ON P1B 9P1 fax: (705) 482-0326 (confidential fax) e-mail: talent@workplacesafetynorth.ca
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TNM June 29 2015 Issue.indd 18
Full Time
that there is not a tremendous amount of active uranium experience out there, and certainly not the level that would be required.” In a brief research note, Raymond Goldie of Salman Partners in Toronto commented that while he does not know what the government needs for the company to show the absence of interested Canadian partners, he interprets the “historic precedent” as “an equivalent of the right of first refusal, which Canadian companies like Cameco (TSX: CCO) and Denison Mines (TSX: DML; NYSE-MKT: DNN) retain for building and operating Canadian uranium mines and mills.” Goldie, along with a number of other mining analysts, heralded the decision as a step forward in the uranium industry. “While the government has dropped hints of this move in the past, the announcement significantly lowers the perception of Canada’s risk profile for foreign suitors [e.g., Chinese nuclear utilities] and ramps up takeout potential for the few high-quality uranium projects in the country,” Raymond James analyst David Sadowski writes in a research note. “Canada is likely to continue to review major takeouts on a caseby-case basis, but this precedent should go a long way to eliminating the hurdle of geopolitical uncertainty by showing NROP is not a ‘hard and fast’ rule, when no other Canadian partners can be found to lead development.” David Talbot of Dundee Capital Markets agrees that the move “has positive implications for takeover potential in the Athabasca basin and elsewhere in Canada,” and will likely increase competition for projects and de-risk development. But he is skeptical that majority foreign ownership would be allowed for companies from some jurisdictions. “We believe that Areva is an acceptable 100% owner of the Kiggavik project in Nunavut,” Talbot writes, “but would not expect Chinese utilities or Russian nuclear entities to qualify for majority ownership of uranium projects in Canada.” Paladin’s Taylor confirms that Canadian authorities conducted rigorous due diligence on the Australian uranium miner to ensure that it was up to the task of developing Michelin. “We were ques-
tioned in detail and had a lot of meetings with senior government officials,” he says. “Not only were our credentials assessed, but also our environmental record, our record with local communities, our technical expertise, safety record — all of those things had to be taken into account.” The approval is timely, Taylor adds, given what he describes as a looming “uranium crunch.” Paladin estimates there will be a 35 million lb. shortfall in annual uranium production by 2020. “If you look around the world, there are not a lot of deposits that are likely to go into production in the next ten years,” he says. “There are lots of companies that have uranium, but there are questions of grade, questions of permitting, questions about the environment, water and power, and all of those things.” As for the Michelin project, Paladin doesn’t expect it will move into production any time soon, given that current spot prices hover around US$36.75 per lb. uranium oxide (U3O8). “We will not spend significant effort and money in that direction until we see US$70 per lb. uranium prices,” he says. “Once we’re comfortable that we’re going to see longer-term stability in the uranium market, based on those kinds of numbers, we look forward to developing Michelin in 2021.” Whether the federal government will authorize other nonCanadian companies to own majority stakes in uranium mines, Taylor says, is open for debate. “Canadian companies have gone to Australia and gained permission to take over uranium projects in Australia, so perhaps there was a little bit of tit for tat there,” he says. “But whether this is a signal that the Canadian government is going to change the law, or this is a oneoff or whether there will be more exemptions, I have no idea.” In the meantime, Paladin plans to start exploration in July, followed by a late-year drill program of 6,000 metres. Michelin has a measured resource of 15.6 million tonnes grading 0.1% U3O8 for 34.08 million lb. U3O8; an indicated resource of 21.9 million tonnes grading 0.1% U3O8 for 50.04 million lb. U3O8; and an inferred resource of 8.8 million tonnes grading 0.1% U3O8 for 22.87 million lb. U3O8. At press time, Paladin’s shares were trading at 27¢ per share, within a 52-week range of 26.5¢ to 45.5¢ per share.
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Land deal with Richmont brings Argonaut drill success
ARGONAUT GOLD
A drill site at Argonaut Gold’s Magino gold project, 40 km northeast of Wawa, Ontario. BY TRISH SAYWELL
About 2 km away from where Richmont Mines (TSX: RIC; NYSE-MKT: RIC) is producing gold from its Island gold mine, and exploring for more at its Island gold deep development project, Argonaut Gold (TSX: AR; US-OTC: ARNGF) is advancing its open-pit Magino gold project. The two properties, 40 km northeast of the town of Wawa, Ont., are so close together that the companies struck a mutually beneficial deal. Under an agreement from October 2013, Argonaut extended its Magino land holdings by 250 metres east of its property boundary with Richmont, and secure rights to surface mineable mineralization down to 400 metres deep. In exchange, Richmont was given the right to extend the boundary of its Island gold underground mining project, 585 metres west of its property boundary. This gives Richmont the right to mine any economic mineralization below 400 metres. The agreement was called a “win-win,” as Argonaut mines the open-pit Magino part of the mineral system and Richmont follows any extension of their vein system under Argonaut’s ground. “There are two geologic environments occurring along the same district-level mineral trend,” Argonaut’s vice-president of exploration Thomas Burkhart says. “Magino mineralization is hosted in a granodiorite stock, and much more disseminated, while Richmont’s high-grade ore is vein-hosted and mainly contained within metavolcanic rocks.” The benefits of the agreement are trickling in with the June 17 release of the first batch of drill results on Richmont ground. The 12-hole program confirmed that Magino mineralization extends 250 metres east, and is open to the east of Argonaut’s drilling. “Prior to this, the extension of the Magino mineralization was a good geologic possibility, but was never confirmed,” Burkhart says in a telephone interview from Reno, Nev. “Our drill program did intercept as good or better gold mineralization as we had been expecting, and confirmed the mineral system remains strong and continues east.” Drilling highlights include intercepts of 45 metres grading 1 gram gold per tonne, including 10 metres of 3.39 grams gold; 100 metres averaging 0.93 gram gold; 98.8 metres of 1.69 grams gold; 67 metres of 1.56 grams gold; and 42 metres of 0.99 gram gold. The drill results, along with 38
TNM June 29 2015 Issue.indd 19
infill drill holes Argonaut finished around the historic Magino underground mine workings that have yet to be released, will be incorporated into an updated resource and preliminary economic assessment later this year. The multi-million ounce Magino deposit already has an indicated resource of 127.7 million tonnes
grading 1.01 grams gold for 4.16 million contained oz. gold, and another 30.1 million tonnes grading 1.08 grams gold for 1.04 million contained oz. gold in the inferred category. The resource was calculated at a cut-off grade of 0.35 gram gold per tonne. “We had enough to go forward with the Magino project already,” Burkhart says. “But adding the Richmont ground clearly expands the potential of the project. We look forward to incorporating these new drill results into an updated resource, and expect to finish more drilling on the Richmont ground as we go forward.” According to a now outdated prefeasibility study from December 2013, the Magino open-pit operation will post an after-tax net present value (NPV) of US$199 million and an 18% after-tax internal rate of return (IRR), based on a 5% discount rate and a US$1,250 per oz. gold price. Curtis Turner, Argonaut’s corporate development officer, tells The Northern Miner that the company plans to update the prefeasibility study mid-year using current market prices for cyanide, fuel and exchange rates, and “expects the NPV and IRR to improve significantly.”
The prefeasibility study envisioned a conventional open-pit mine and gold-leaching processing circuit, with a 13.2-year mine life and a 2.6-to-1 strip ratio. Preproduction capital costs were pegged at US$356 million, with sustaining and closure costs adding US$58 million, bringing total capex to an estimated US$414 million.
being in the area,” he explains. Burkhart acknowledges, however, that the 12 drill holes were spaced 50 metres apart, and he prefers to drill at 25-metre spacing, as this generally “gets us into an indicated resource category.” In addition to its advanced-stage Magino project, Argonaut has two producing mines in Mexico — El
‘We had enough to go forward with the Magino project already, but adding the Richmont ground clearly expands the potential of the project.’ — Thomas Burkhart, vice-president of exploration, Argonaut Gold The company hasn’t decided whether it will do more drilling this year on the Richmont ground, Burkhart says, but notes that it’s a good time to drill. He says Argonaut spent just $1 million on its 50-hole drill program. “Drill costs have come down from just a few years ago, and one of the drilling companies that we used was drilling next door for Richmont, so there were cost reductions based on them already
Castillo in Durango and La Colorada in Sonora. It is also advancing its San Antonio project in Baja California Sur, and its San Agustin project in Durango, Mexico. As of March 31 — the company’s latest public filing — Argonaut had US$64 million in cash and equivalents on its balance sheet, and no debt. At press time Argonaut traded at $1.73 per share, within a 52-week range of $1.24 to $5.28.
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15-06-24 5:23 PM
20 JUNE 29-JULY 5, 2015 THE NORTHERN MINER
Rubicon Minerals advances Phoenix on two fronts
RUBICON MINERALS
An aerial view of Rubicon Minerals’ Phoenix gold mine in Red Lake, Ontario. Rubicon Minerals (TSX: RMX; NYSE-MKT: RBY) has poured the first gold at its Phoenix gold project in Red Lake, Ont., and expects to complete the commissioning phase of the mill in early July. At the same time, the company is demonstrating that there’s significant exploration upside north of the project’s main F2 deposit.
The exploration results underscore the exploration opportunities surrounding the Phoenix project, Andrew Kaip of BMO Nesbitt Burns says. The drilling “highlighted nearsurface (less than 100 metres) exploration potential at the previously discovered Carbonate zone,” the mining analyst writes in a research note. “The drilling
Phoenix is fully permitted for initial production of up to 1,250 tonnes per day. Assay results from a 9,553-metre surface drill program — 1 km north of Rubicon’s underground mine development — returned intercepts of 8.48 grams gold per tonne over 3.3 metres, including 11.1 grams gold over 2.3 metres in drill hole 15-16, 8.43 grams gold over 1.1 metres in drill hole 15-19 and 7.84 grams gold over 1.5 metres in drill hole 15-09.
results reported weighted average grade of 2.8 grams gold per tonne at an average thickness of 2.7 metres.” Drilling the gold system north of F2 is warranted, Rubicon says, but it won’t begin that until the underground mine generates positive cash flow. At that point, exploration programs will include infill drilling
high-grade gold intersections; testing the down-plunge continuity of the Carbonate zone, which remains open at depth; and testing high-interest areas within the F2 gold system regional trend. The F2 system is made up of a northeast-trending, west-dipping sequence of ultramafic to mafic volcanics, felsic intrusives and metasedimentary rock types, which include the McFinley gold deposit banded iron formation sequence within the East Bay deformation trend. Red Lake is known for deep, high-grade, long-life mines, and Rubicon controls over 259 sq. km of prime exploration ground in the prolific gold district. Phoenix is fully permitted for initial production of up to 1,250 tonnes per day. Once in production, the Phoenix mine could produce 2.19 million oz. gold over a 13.3-year mine life, or 165,300 oz. gold annually. Cash-operating costs
RUBICON MINERAL
The first gold doré bar produced at Rubicon Minerals’ Phoenix gold mine. are estimated at US$599 per oz., with all-in-sustaining costs of US$845 per oz. Average life-of-mine throughput rates will be 1,900 tonnes per day. Ninety percent of the mining will be done by long-hole stoping and 10% by cut-and-fill mining. The average mill feed grade will be 8.1 grams gold per tonne, and the
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TNM June 29 2015 Issue.indd 20
company expects 92.5% gold recoveries. According to a recent corporate presentation, Phoenix generates a 19.9% after-tax internal rate of return and a $423.1-million aftertax net present value at a 5% discount rate, and US$1,200 per oz. gold price. Phoenix has an indicated resource of 4.1 million tonnes grading 8.52 grams gold per tonne for 1.13 million contained oz. gold, and inferred resources of 7.5 million tonnes averaging 9.26 grams gold for 2.22 million contained oz. gold. The resource estimate was calculated using a 4-gram-goldper-tonne cut-off grade. In May, Rubicon was accepted into the Industrial Electricity Incentive Stream 3 program from the Independent Electricity System Operator. As part of its nine-year contract, Rubicon expects to save $4 million per year on its electricity bill. Rubicon also entered into a financing agreement with Canada Pension Plan Investment Board (CPPIB) subsidiary Credit Investments for a US$50-million secured loan facility that will help develop the Phoenix project. The loan, announced in May, has a five-year term that will mature on May 12, 2020. It bears a 7.5% annual cash interest rate, compounded quarterly. As part of the agreement, Rubicon issued 10 million warrants to CPPIB. Each warrant entitles CPPIB to one common share of Rubicon for five years at $1.72 per share. At press time Rubicon’s shares traded at $1.39, within a 52-week trading range of 90¢ to $1.83 per share.
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