The Norther Miner June 22 2015 Issue by The Northern Miner Group

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B2Gold

JUNE 22-28,

Odds ‘n’ Sods

Breaks ground in Mali

$3.99 • JUNE 22-28, 2015 • VOL. 101, NO. 19 • SINCE 1915

Endeavour Mining rides strong performance at Agbaou

Remembering The Jolly Taxpayer

2015

THE NORT HERN

MINER

Sourcing Pe and the rsonnel for the Impend N ing War ext Upturn for Talent

end of the talent unemsuper cycle has ployed and left an abund But the ance of availa reality is in the minin there are ble, and that the qualified and skilled currently war g indus hundreds for talent is over. try across This is evidence of positi Canad over but ons unfille that this enough to sugge a! d low point fire” and st that the in the shoul war To under d be considered commodity cycle for talent is not is merel two-decade stand what indus as an oppor y a “cease tunity to “reload.” beginning pre-boom period try could do better, of the last leadin let’s g up to Canada’s commodity the year look at the upcycle. 1980, produ mining indus 2000 and try the and major cing a slash-and-b had been declin mines develdownsizing, not urn mentality ing in activity since that saw much fundi oped. thought ng for explo mines closin of long-t This impacted g ration all Enrollment erm workf orce plann areas of the sector and few ence progr s were down ing , and any in the minin was a pipe dream ams were schools remo g unive . closed. rsities, There wereved from the many were earth scicurric few lost to message other indus opportuniti ulum, and minin to es for g tries. It good choic society that all serve graduates, and e for a caree mining was d to send Worse a sunse a clear still, minin r. t indus mining try and g comp colleg not a anies The Canad Throughoutes and universities abandoned ian minin BY CHRIS STAFF their conne , and the 1990s we are industry g indus ORD ctions to , sustainabili students were a top 10 as try the is a pillar most producer forgot industry mental, of the nation social-licen important conce ty became the buzzw ten. employs of struggled important over 220,00 17 key metal rns ce, ord for the s and miner al economy: with concerns, political and commwere thought 0 worke nomic volati changing tion to rs. als, but be of workf environunity issues and the during demograph Yet the indus lity and . Yes by a lack try However, orce planning or this time there of skilled skills gaps, and ics, an aging workf has always was little, they were long-term balization one positive for decad talent. This article or no, menconsid that came es has been orce, ecowill review the availa portunitiesof the Canadian out of this eration for talent challenged how the bility of minin . overseas period was skills and commodity recruit and This was for highly g industry, which the glowhat the retain a cycle impac created of such high dema particularly attrac respected Canad industry ts upon a cyclically skilled workforce can ian minin job opthe benef nd in French-spe tive to French driven through do better to attrac The last Canadians g talent. it of their aking count metals upcyc industry. the peaks t, Latin ated an language who were and valley America le — also unpreceden skills. To ries and were in s known mining able ted dema One other as well. a lesser as the “Supe sector as degree this to realize notable one seriou nd for skilled r to develo restarting worked employees. Cycle” — cresly lackin p, build of the Univepositive durin in and g It g this depre in numb During So after exposed operate ers and two decad rsity of Toron tronomicalthis period, jobs mines. skills requirthe assume to minin ssing period was es were plenti g progr the ed about that the indus of an industry was fierce , signing bonus am. in ful, try declin to salarie was es happe , and were comm e, it anything s offere n aroun With those the recruiting d were but prepa is reasonable d 2000. on, comp asstrategy to boom years red for was “hire etition for what was behind us, the perce at any cost.” talent BOOM 200 0 ption today With the is that the improvemen growth in the minin t in metal prices Regional g indus in 2000 Mining try and Manager, Sales with it a came unpreceden Quebec demand Online for talent ted Reference & Ontario We are . looking No: 61678 for the manag Geop

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Oban Mining makes splash with plan for five-firm combo The Nor thern Miner’s new sec tion ded to recr icated uiting in min ing

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7 1:51 PM

SITE VISIT BY LESLEY STOKES

YAMOUSSOUKRO, CÔTE D’IVOIRE — It’s easy to stay awake while travelling during the early morning hours in Côte d’Ivoire’s remote political city, Yamoussoukro. Formerly a small agricultural village, the capital is intriguingly desolate, with empty six-lane highways that appear to lead to nowhere. But off the main road network, 80 km south, there’s activity breaking the stillness at Endeavour Mining’s (TSX: EDV; USOTC: EDVMF) Agbaou gold mine. The company has reported the operation is exceeding its expectations, and The Northern Miner has travelled the 12,000 km from Vancouver to investigate why. “There were a lot of moving parts last year,” Doug Reddy, senior vice-president of business development, says while our van navigates past a few rusty bicycles piloted by onlookers eager to catch a glance. “A lot of improvements have been made, so it’s been nice to see the numbers reflect this.” He distributes the company’s first-quarter results between the passengers as reading material

PHOTO BY LESLEY STOKES

Doug Reddy (pointing), vice-president of business development, and Kirk Woodman (far right), general manager of exploration, on a tour of Endeavour Mining’s Agbaou gold mine in Côte d’Ivoire. for the two-hour journey. The intermediate gold miner reported producing 123,744 oz. gold, up 17% compared with the 105,912 oz. gold in the first quarter of 2014. The gold came from its four operating mines across West Africa: Youda in Burkina Faso; Agbaou in

Great Panther defies low silver prices and eyes growth BY MATTHEW KEEVIL

VANCOUVER — Despite a rough three-year run in precious metal prices, Great Panther Silver (TSX: GPR; NYSE-MKT: GPL) is flying high on the back of a stellar first quarter and a pair of acquisitions that appear to cement a promising project pipeline. The company has ridden higher grades at its Mexican narrow-vein silver mines to record production levels, and hopes sustainable cash flow will help it internally fund its organic expansion plans. Great Panther operates several mines based around two main hubs, namely: the historic Guanajuato mine complex in Guanajuato state; and the Topia mine in Durango state. The company cranked out 987,900 equivalent oz. silver during the first quarter, which marks a 48% increase compared to the same period last year. Quarterly all-in sustaining costs dropped 39% year-on-year to US$14.47 per equivalent oz. silver. Not surprisingly, financial results

TNM Jun 22 2015 Issue.indd 1

followed suite, as revenues jumped 57% to US$20.3 million. The company reported adjusted earnings of US$3.7 million and US$4.8 million in operational cash flow. Much of the improvement is owed to the performance of the San Ignacio satellite operation at Guanajuato. Great Panther expedited development of the deposit after making an initial discovery in 2013, and hit commercial production at the site a year ago. San Ignacio accounted for 30% of the metal production at Guanajuato in the first quarter, which represents a 64% increase, compared to the fourth quarter of 2014. “Being able to make money at these commodity prices is something not many companies are doing right now. A lot of that success is thanks to San Ignacio, and how we were able to take it from discovery to production in three years,” president and CEO Robert Archer said in an interview. “One of the driving forces for us See GREAT PANTHER, Page 11

Côte d’Ivoire; Nzema in Ghana; and Tabakoto in Mali. Endeavour had an all-in sustaining cost (AISC) of US$946 per oz. gold, generated US$13million in after-tax net profit and raised its earnings before interSee ENDEAVOUR, Page 2

nomics on a bulk-tonSix years ago, John nage, low-grade target Burzynski, along with [like Malartic], for excolleagues Sean Roosen ample, if you don’t have and Robert Wares, won a large enough claim to The Northern Miner’s do it.” Mining Persons of the Consolidation is even Year award for their role more imperative in disin transforming Osisko mal capital markets, he Mining (TSX: OSK; USOTC: OSKFF) from a ju- BY TRISH SAYWELL says, with juniors trading at cents per share, nior — with seemingly and facing “massive dilumediocre assets, at 13¢ per share — into a multi-billion tion,” if they try to raise money. With this in mind, Burzynski, company on the brink of opening Canadian Malartic, a large, long- now chairman of Oban Mining (TSX: OBM), and president and life gold mine in Quebec. “The market didn’t start fol- CEO Jose Vizquerra, have put lowing Osisko until 2007, and we together a business deal that sees used that to our advantage, con- Oban teaming up with four other solidating our land positions and junior mining companies to credoing our work,” Burzynski says. ate a leading gold exploration “In 2003 and 2004, everyone was and development company with looking for high-grade under- assets in Ontario and Quebec, a ground mines, so when we went 6 million oz. gold global resource, back into the mining camps, $65 million in cash, a $122-million market capitalization and no there was no competition.” The mining executive is as much debt. The proposed transaction coma believer in consolidation today as he was a decade ago. “If every- bines Oban with Eagle Hill Exone is working on a land package ploration (TSXV: EAG), Temex the size of a postage stamp, noth- Resources (TSXV: TME), Ryan ing is going to get done,” he says. Gold (TSXV: RYG) and Corona “You can’t generate project eco- Gold (TSX: CRG). The deal is structured in a series of offers to each individual company, and Oban expects they will close by early August. The CEOs of all four companies support the takeover offers. “There was no doubt in our mind

West Kirkland CEO talks development plans at Hasbrouck BY MATTHEW KEEVIL

VANCOUVER — The path to production is coming into focus for West Kirkland Mining (TSXV: WKM; US-OTC: WKLDF) at its Hasbrouck gold project near the town of Tonopah, Nev. The company is hoping to use a two-stage development strategy that would see its smaller Three Hills deposit serve as a launching point, and a recent decision by the U.S. Bureau of Land Management (BLM) appears to set the stage for initial permitting later this year. West Kirkland picked up the Hasbrouck package — which consists of Three Hills and the larger Hasbrouck deposit — just over a year ago from now-bankrupt producer Allied Nevada Gold (TSX: ANV; US-OTC: ANVGQ). The company paid US$19.5 million for a 75% controlling interest in the asset, and has the option to acquire the remaining stake through October 2016 for another US$10 million. On June 3 West Kirkland re-

leased a prefeasibility study (PFS) on Hasbrouck that crystallizes a development model it believes can capitalize on recent regulatory adjustments that should allow Three Hills to be permitted by year-end. The company’s strategy hinged on the BLM allowing the smaller deposit to be reviewed under an environmental assessment (EA), which is quicker than the more burdensome environmental impact statement (EIS) process. The gamble paid off in early May when the BLM announced it would allow Three Hills to proceed with only an EA. “The key change for us was breaking the project down into two development stages. Back when Allied Nevada had been looking at the mine, it had been modelled as an integrated scenario, but in reality it is two separate land positions and the impacts are quite different,” president and CEO R. Michael

See OBAN, Page 3 PM40069240 – PAP Registration #09263

See WEST KIRKLAND, Page 13

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JUNE 22-28, 2015

THE NORTHERN MINER

Endeavour Mining REGULAR DEPARTMENTS Editorial ............................. 4 Events.............................. 13 Meetings ......................... 13 Mining Jobs .................. 8-10 Metal Prices ....................... 7 People ............................... 5 Professional Directory . 12-13 Stock Tables .................... 6-7

COMPANY INDEX Abitibi Royalties ............... 16 Agnico Eagle Mines ........... 3 Allied Nevada Gold ........... 1 AngloGold Ashanti ..... 14,15 B2Gold .............................. 3 Corona Gold ...................... 1 Eagle Hill Exploration ......... 1 Endeavour Mining ............. 1 Great Panther Silver ........... 1 Hochschild Mining ........... 15 Lara Exploration............... 14 Newmont Mining ............ 14 Nyrstar ............................ 11

Oban Mining ..................... 1 Osisko Gold Royalties ........ 3 Osisko Mining ................... 1 Reservoir Capital.............. 15 Reservoir Minerals ........... 15 Ryan Gold ......................... 1 Temex Resources ............... 1 Tessarema Resources ....... 15 Vista Gold........................ 17 West Kirkland Mining ........ 1 Yamana Gold ..................... 3 Zenyatta Ventures ........... 16

STORIES WE’RE WORKING ON. . .

Check out our next special section: Canadian Gold (June 29).

Since 1915

ENDEAVOUR MINING

Machines in the north pit at Endeavour Mining’s Agbaou gold mine Côte d’Ivoire. ENDEAVOUR, From Page 1

est, taxes, depreciation and amortization to US$44.9 million. Results from the previous comparable quarter include US$1,059 per oz. gold, US$5 million and US$36.1 million. Conversation about the project’s economics is suddenly interrupted as the van crests the hill and the sight of the world’s largest basilica, Our Lady of Peace, is seen towering 200 metres into the morning clouds. The US$300 million, St. Peter’s in Rome lookalike is a legacy of former president, Felix Houphouet-Boigny — a man who saw the rise of the cocoa industry as an opportunity to lavish much of the revenue on monuments, including a presidential palace surrounded by a crocodile-filled lake. “There’s definitely been an interesting history here,” Reddy says, pointing towards the window. “There was a whole period of time where the country focused solely on agriculture, but all that is changing now. The new government wants to diversify its interests and sees foreign investment as the way to go.” According to Reddy, Agbaou mine was the “testing ground” for the country’s new mining code, which was introduced in March last year.

Endeavour Mining’s projects in West Africa

MALI BURKINA FASO Ouagadougou

Tabakoto Bamako

Houndé

COTE D’IVOIRE Legend Capital city Mine

★

Development project

Agbaou

drought that is drying up the country’s main hydroelectric reservoir. After pulling through the gates and entering onto the Agbaou mine site, it’s clear that it’s a first-class operation made sleek with Endeavour’s fine-tooth comb. The company has driven the production and recovery up for the open-pit gold mine ever since the first gold ounce was produced in

— Doug Reddy, senior VP of bus. dev., Endeavour Mining

TNM Jun 22 2015 Issue.indd 2

GHANA

Yamoussoukro

‘There’s good infrastructure, cheap power and plenty of water that really give Côte d’Ivoire a leg up.’ He says the legislation has made Côte d’Ivoire more competitive with Mali and Burkina Faso, despite already having advantages over its neighbours. “There’s good infrastructure, cheap power and plenty of water that really gives Côte d’Ivoire a leg up on the other countries,” he says, with mention of the rolling blackouts in Ghana due to a two-year

Youga

★

January last year. The operation was modelled in the feasibility study at 1.6 million tonnes per year, with recoveries of the precious metal floating around 93%. Instead, recoveries are at 97% and throughput sustained at 2.2 million tonnes per year, as Endeavour digs through the oxide part of the deposit. Agbaou produced

Nzema

Accra

45,323 oz. gold at an AISC of US$577 per oz. gold in the first quarter. Reddy expects that mining will transition over to fresh rock in years three to five of the production schedule — driving throughput down to 1.3 million tonnes, decreasing recoveries to 93% and adding to mining costs from drilling and blasting. He says the company is investigating ways to keep Agbaou’s performance during that period — including adding a US$13-million secondary crusher, and creating ore blends to boost recoveries. But much of the project’s timeline depends on whether Endeavour can offset what it mines with more resources from brownfield exploration. Mineralization is contained within a large, northeast-trending shear zone boasting measured and indicated resources of 15 million tonnes at 2.4 grams gold for 1.2 million oz gold, using a 0.5 gram gold cut-off. But during routine condemnation drilling in 2013, Endeavour stumbled upon a north- to northSee ENDEAVOUR, Page 15

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THE NORTHERN MINER

Oban Mining

B2Gold starts mine construction at Fekola in Mali BY SALMA TARIKH

OBAN MINING

Flags mark historic drill holes at Oban Mining’s Miller gold project, 18 km southeast of Kirkland Lake, Ontario. The outcrop shows an aphanitic syenite dyke (foreground), with intruding (darker) meta-basalts to the right. OBAN, From Page 1

that this is exactly the right thing to do and at the right time,” Ian Campbell, president and CEO of Temex, said on a conference call. “It provides liquidity and capital at a time when it’s extremely scarce. Our company has two really good exploration projects that aren’t there yet, and they need the cash injection.”

sets have to come together, with funding and capital and proper management, and then by going through this process, we can rewin the confidence of investors,” Burzynski says. Osisko Gold Royalties (TSX: OR; US-OTC: OKSKF) will provide cornerstone financing, with an investment of up to $20 million in Oban’s common shares for a

‘We’re not playing around here. We have real firepower behind us.’ — John Burzynski, chairman, Oban Mining The thinking behind the agreements picked up speed a little over a month ago. “There were some interesting conversations between Oban and one of the companies regarding merging cash balances,” Burzynski recalls in an interview after the conference call. “That kicked off the idea of looking to see whether there were other companies that had interesting assets but didn’t have cash, or had cash but no projects.” Oban had been thinking of ways to capitalize on the fact that it has been one of the few juniors with cash and assets. “It put us in an interesting strategic position because we had both, as well as a relatively good rapport with the street.” If the business combination goes ahead, Oban “probably will have more cash than 99.9% of all the juniors left in the space right now,” he says. “It’s a company that stands a chance of becoming a real mining company … what we’re trying to accomplish here is nothing less than the start of a new Canadian mining house.” Combining the five companies involves consolidating 1,140 sq. km of prospective ground in three major mining camps: East Timmins (Temex’s Whitney project); Urban Barry (Oban and Eagle Hill); and the Catharine Camp (Oban and Temex’s Juby project.) “There still needs to be quite a consolidation in the Canadian mining space where orphaned as-

TNM Jun 22 2015 Issue.indd 3

JUNE 22-28, 2015

19.9% stake. Since June 2014, Burzynski has served as senior vice-president of new business development at Osisko Gold Royalties, after selling Osisko Mining and its Malartic mine for $3.9 billion to Agnico Eagle Mines (TSX: AEM; NYSE: AEM) and Yamana Gold (TSX: YRI; NYSE: AUY).) The financing commitment with Osisko Gold Royalties includes giving the company first rights to participate in royalties and streams created by the larger company, and the right to nominate three directors to the board. In the first five years following the private placement, Osisko Gold Royalties will also have a one-time right to provide first financing to Oban for up to $5 million, in exchange for a 1% net smelter return royalty on postdeal properties. Dundee Corp. will own a 15% stake in the pro forma company and Ned Goodman, the founder of Dundee, will become co-chairman of Oban’s new board, along with Sean Roosen. As part of consolidating the Urban-Barry camp, Oban is also taking a 19.9% stake in BonTerra Resources (TSXV: BTR), which has a property contiguous to the Windfall property. “We’re not playing around here,” Burzynski says. “We have real firepower behind us ... there aren’t a lot of groups out there that have the capital, the manpower or the technical expertise that we have to do this.”

B2Gold (TSX: BTO; NYSE-MKT: BTG) has kicked off construction at the Fekola open-pit gold mine in southwestern Mali, after releasing an optimized feasibility study and closing a previously announced US$350-million revolving credit facility. Fekola — acquired through the US$570-million takeover of Papillon Resources in October 2014 — sits in Kayes province, 365 km west of the capital Bamako. The company owns 90% of the 74 sq. km mining licence, with the Malian government holding the rest, and looking to push its interest to 20%. Highlights of the optimized study, prepared by Lycopodium Minerals, indicate Fekola has a 12.5-year life based on a June 2015 reserve estimate. Using a US$1,300 per oz. gold price and an elevated cut-off grade of 0.8-gram gold per tonne, Fekola contains 3.72 million oz. gold in reserves, from 4.9 million tonnes at a diluted grade of 2.35 grams gold. Average annual production is set at 350,000 oz. over the first seven years and 276,000 oz. over the full mine life. This compares to an expected output of 306,000 oz. annually over an 8.6-year life, based on measured and indicated resources in B2Gold’s 2014 preliminary economic assessment (PEA), which built on Papillon’s 2013 prefeasibility study. The stripping ratio is 4.5 tonnes of waste for each tonne of ore, up 50% from the prefeasibility study. Despite this, costs have improved. During the first seven years, operating cash costs should average US$418 per oz. and US$533 per oz. over the mine’s life, compared to US$580 per oz. in the PEA. “The feasibility study confirms Fekola’s potential to deliver significant annual production at a lowest quartile cash-operating cost over a healthy 12.5-year mine life,” Raymond James’ analyst Chris Thompson writes. B2Gold’s first Malian gold mine has an initial US$395-million price tag, plus another US$67 million for mine fleet and power-generator costs. This is in line with the company’s capital guidance of between US$290 million and US$408 million. (The start-up costs exclude the US$30 million of early work slated for completion before July.) According to the latest study, B2Gold will develop Fekola as an open-pit mine in seven stages, where it will truck run-of-mine ore to the plant for crushing. The plant should process 4 million tonnes per year over the mine’s life, with gold recovery averaging 92.8%, resulting in life-of-mine production of 3.45 million oz. gold. Fekola should come online in late 2017. The miner did not release aftertax numbers in the optimized study, but it revealed that at US$1,300 gold and a 10% discount rate, the Fekola project has a US$615-million net present value (NPV) and a 35% internal rate of return (IRR), with a 27-month payback period. Using the same metrics, the PEA estimated a pretax NPV of US$850 million and a 67% IRR. B2Gold says its US$350-million four-year loan, coupled with the expected operating cash flow from its mines, provide ample

funds to build Fekola and sustain its other operations. The credit facility has an accordion feature, which allows the facility to increase by US$100 million before the loan matures.

pates company-wide production to grow from 380,000 oz. gold last year to over 900,000 oz. in 2018. Raymond James’ Thompson estimates Otjikoto and Fekola will contribute 60% of B2Gold’s total

‘The feasibility study confirms Fekola’s potential to deliver significant annual production at a lowest quartile cash operating cost over a healthy 12.5-year mine life.’ — Chris Thompson, analyst, Raymond James The producer operates four gold mines: La Libertad and Limon in Nicaragua, Masbate in the Philippines and the new Otjikoto mine in Namibia. Companywide 2015 production should range between 500,000 and 540,000 oz. gold, up 35% from last year’s output. With Otjikoto churning out low-cost ounces and Fekola expected to start contributing in late 2017, the firm antici-

production in 2018 and 60% of its operating cash flow. Fekola secures the company’s “potential future rank as a top-tier intermediate gold producer,” delivering gold at total cash costs of US$600 per oz., and all-in sustaining costs of US$920 per oz., Thompson says. The analyst increased his target to $3.15 from $3, while maintaining an “outperform 2” rating on the stock.

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.

Bids must be accompanied by proof of a free miner’s license held in the bidder’s name.

Bids may be submitted for any or all of the Mineral Tenures, at the bidders’ discretion.

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”).

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.

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.

Successful bidders are responsible for all costs, taxes and/or fees associated with any purchase or transfer of Mineral Tenures.

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.

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

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Your Technical Services Partner in Geochemistry and Metallurgy For more information, scan this QR code or visit www.alsglobal.com Phone: +1 604-984-0221 RIGHT SOLUTIONS RIGHT PARTNER

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JUNE 22-28, MONTH ??-??, 2015 2015THE THE NORTHERN NORTHERN MINER MINER

EDITORIAL

EDITOR-IN-CHIEF:

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

EDITORIAL: TOP STORIES OF WEEK 24

Cockpit capers GROUP PUBLISHER/ PUBLISHER: ANTHONY VACCARO, CFA, MBA

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A mining scandal touching the highest levels of government has erupted over the past couple of months in Jamaica, traditionally one of the world’s great centres for bauxite mining, with companies such as Alcan, Kaiser and Alpart active in the country over the decades. The latest brouhaha centres around a wide region of relatively pristine mountainous forest reserve in western Jamaica named “Cockpit Country” that supplies 40% of the water for western Jamaica. Underlying the forest are valuable limestone and bauxite resources. Local conservationists inadvertently found out in May that preparations for bauxite mining were quietly underway within the still-disputed reserve boundaries, without public consultation or awareness. Mining was allegedly carried out by NYSE-listed, former Xstrata and Falconbridge subsidiary Noranda Aluminum Holding Corp., which has a 4.5-million-ton-per-year bauxite mine at St. Ann, Jamaica, and downstream aluminum facilities across the southeastern U.S. The conservationist Windsor Research Centre, located 5 km inside Cockpit Country, reported seeing mining equipment and haul road extension works at the Madras/Caledonia crossroad near Bryan Castle in St. Ann, with the new haul road “outside the Special Mining Lease (SML) 165, which Noranda inherited from St. Ann Bauxite Ltd., and penetrating so-called Special Reserves, which are inside Cockpit Country.” According to SML 165, the centre said, “these reserves are to be used only if it turns out that there is less bauxite than predicted within the said SML.” Noranda countered that all its work in the country has had the requisite permitting, and that “Noranda Jamaica Bauxite Partners has not conducted mining operations outside of St. Ann or outside of areas authorized by the Jamaica Bauxite Institute and the Commissioner of Mines,” leaving observers to conclude that for some reason a coterie at the highest levels of the Jamaican government had given the permits to mine in a secluded area, without informing lower levels of government or local populations. According to the Jamaican Observer, the government’s own environmental watchdog, the National Environment and Planning Agency, was seeking to verify the complaints lodged with the office, with the agency’s CEO Peter Knight saying that “suffice it to say, if mining is taking place and if they have encroached on Cockpit Country, it will be stopped.” Meanwhile Noranda Bauxite and Jamaican government have reached an interim agreement relating to a dispute over production levies, pending arbitration. In return for receiving cash payments and irrevocable letters of credit, the government is withdrawing its May 28 application to restrain Noranda from exporting bauxite from the country. In terms of Caribbean bauxite intrigue, though, the Cockpit incident pales in comparison to the seizure in Guyana this January of a ship laden with bauxite, plus 192 kilograms of cocaine worth US$800 million on the street. The ship came from Suriname, was filled with bauxite in Linden, Guyana, and was on its way to Spain, Holland and finally Belgium. • SNL Metals & Mining has carried out some valuable number crunching on mine financing by regions from 2013 through the first quarter of 2015 that shows miners are off to a “poor start” in 2015, though Canadian companies and projects are still attracting investment dollars. SNL tabulated that miners and explorers had raised US$82.9 billion to fund their operations over that 27-month period, with Canadian projects attracting 14% of the total, behind Asia/Middle East (20%), Latin America (17%) and Australia (15%). Canadian companies raised the most money over that period at US$22.2 billion, but SNL found only a third was allocated domestically. Between 2013 and 2014, total global mine financing rose 4% to US$39.9 billion, with Canada as a destination seeing the biggest positive swing year-over-year, more than doubling to US$6.6 billion from US$3.2 billion. SNL found that Canadian companies raised US$8 billion in 2013 and planned to spend 19% of it domestically, but that rose to US$11.6 billion in 2014, of which 35% would be spent in Canada. As for what commodities have been financed the most, it’s no surprise that gold was in top spot, with base metals (especially copper) and silver sharing second place. Following these were coal, platinum group metals, diamonds, potash, phosphates and diamonds — with Canada attracting half the diamond-directed funds. SNL concluded by noting that January 2015 was an “abysmal” month for mine financing at less that US$500 million raised, but that February and March had seen “somewhat healthier” totals above US$1 billion each month, with Canada moving up to take a third of all funds raised in 2015 so far. SNL’s full report is available at www.snl.com. Send your Letters-to-the-Editor and op-ed submissions to the Editor-in-Chief at: tnm@northernminer.com or 38 Lesmill Road, Unit 2, Toronto, ON M3B 2T5.

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TNM Jun 22 2015 Issue.indd 4

EDITOR, SPECIAL PROJECTS:

ALISHA HIYATE, BA ahiyate@northernminer.com

SENIOR STAFF WRITER:

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

STAFF WRITER:

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

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

STAFF WRITER:

PRODUCTION EDITOR:

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

DAVID PERRI, BA dperri@northernminer.com

COPY EDITOR:

WEB EDITOR:

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

Jackleggers square off

CANADIAN MINING EXPO

Timmins Deputy Mayor Joe Campbell delivers a winning performance in the Northern Mayor’s Challenge during the Canadian Mining Expo in Timmins in May. During the event Francois Langlois of Dumas Mine Contracting took home the top prize and was named this year’s Jackleg King.

ODDS ‘N’ SODS

Vancouver’s last ‘think tank’ remembers The Jolly Taxpayer BY LESLEY STOKES

VANCOUVER — If there’s one way to spark the interest of a geologist in downtown Vancouver, just mention “The Jolly Taxpayer,” and their eyes will light right up. For most people, the Taxpayer was just a seedy hotel and dive bar, painted a deep cherry red and wedged against the former B.C. and Yukon Chamber of Mines on Hastings Street. But for the hundreds of geologists working the downtown core, the Taxpayer was the heart of the industry — delivering its lifeblood in quaffs of beer, banter and Monday night meat draws. The Taxpayer and its connection to mining had deep roots, considering the business in the 1930s — originally a hotel called “Invermay” — was owned and operated by Merritt G. Gordon of the colourful Gordon family. The Gordon family, including Merritt’s brothers, ran The Commercial Hotel in the Harris district of Saskatchewan in 1910. The business hit its peak when one of the brothers sparked a ruby rush after a local prospector came into the hotel bar and showed him some red “pellets” taken from a rock 20 miles away. The brothers profited greatly from the thousands of people flocking to the region, and went so far to establish a saloon and restaurant in three large tents to accommodate the miners and their various appetites.

sought a weekly refuge at a local pub named “The Railway Club,” in an effort to keep industry camaraderie in the face of urbanization and iPhones. The Northern Miner met with the group, who jokingly refer to themselves as one of Vancouver’s last “think tanks,” and interviewed them on what life was like back in the jolly days of the Taxpayer. The Northern Miner: Why was the Taxpayer so important to the mining industry? The Think Tank: There wasn’t any Internet, so the only way you heard the news was by reading the newspaper or networking with your peers. For us in the industry that meant picking up a copy of The Northern Miner and the George Cross newsletter, then heading to the Taxpayer to talk shop and see what everyone else was up to. It wasn’t just socializing, that place was actually critical for us. TNM: Who used to go there? TT: At first it was just a place for miners, but then the brokers caught on, and came around listening to what the geologists fresh out of the bush were saying about their projects. At the other table were the government guys from next door, and floating around the groups were the prospectors pitching their projects. They usually rented the rooms upstairs, so were around all the

“There was a payphone in the corner with a sign hanging over it saying ‘no deals under $1 million.’” — The ‘Think Tank’ It took a while before it became known the rubies were just worthless garnets, and after the hotel burned down in 1923, the family split up and Merritt headed to Vancouver, where he started the Invermay. The midnight torch changed hands on occasion and continued burning until 2006, when the Taxpayer was demolished, leaving its patrons scattered and despondent in the neighbouring alleyways. A handful of geologists were able to regroup, and they have since

time. If you were lucky, you’d stake your claim of a table before the local bike couriers took the remaining seats. The place ran steady from 10 a.m. every day, except in the summers, when everyone was out in the field — it was no man’s land then. But in the fall, the crowd would slowly trickle in and resume their positions. TNM: What did the Taxpayer look like on the inside? See TAXPAYER, Page 5

15-06-17 5:12 PM

THE NORTHERN MINER

OP-ED

MATTERS OF GENERAL INTEREST Taxpayer TAXPAYER, From Page 4

TT: I remember shelves of books we called “the library,” but the books were actually cut in half and glued to the wall alongside a giant stuffed marlin. There was also a back door in case you didn’t want to be seen coming or going, and a pay phone in the corner, with a sign hanging over it saying “no deals under $1 million.” TNM: So were deals actually made there? TT: Absolutely. The phone was always tied up. One day a few brokers brought down their own phone, plugged it straight into the wall and made that corner their office. If you searched for the Taxpayer in historic press releases, it’ll come up a number of times stating the deals that went down there. The problem was getting out of there with business, and still managing to stumble home in one piece. TNM: Was a lot of non-public information leaked? TT: Without a doubt. It was different back then. Geologists would come back from the field all the time carrying rock and core samples into the bar saying: ‘Hey, look what we found!’ In a way, the Taxpayer was their first press release. TNM: What were the most memorable times at the Taxpayer? TT: Well, you’d be lucky if they were “memorable” in the morning, but the stories you can actually recall are hilarious. I still remember the time when International Curator had a project in the Baja California and their stock was going really good — up to $17, which you could never do nowadays. The guys in the company would all bet each other at the bar what the stock would close at on Friday. One week, the bet got up to over a thousand dollars. So on pay-up day, the loser arrives at the Taxpayer with bags and bags of loonies, and dumps it all on the table. The loonies just got dispersed into beer, and never went into a single pocket. Everyone won that night. And the Monday night meat draws were unforgettable. A lot of us were unemployed for a while during the downturn in the 1980s, so the draws gave us an opportunity to bring home groceries for the week. Or at least it gave us a great excuse to tell our wives, so we could go out on a Monday night. TNM: So what has changed now? TT: Vancouver has gone too upscale, and there aren’t many dive bars left where you can hang out all day. Everything became a Joey’s, and beer began to cost three times as much. The Railway Club was the only place we had left to turn, and we’re still quite concerned about our future here, too. The train that circles this bar doesn’t even run anymore, and we take that as a sign of things to come. The only other places left are the ones where we’d end up having to get tattoos to enter, but we’ll keep coming here until the taps run dry, and leave that as our last resort. — Editor-in-chief’s note: Readers are always invited to submit their firsthand, lighthearted or poignant remembrances of mining and exploration tales that can run as an ‘Odds ‘n’ Sods’ column. Please send them to the editor-in-chief at tnm@ northernminer.com.

TNM Jun 22 2015 Issue.indd 5

JUNE 22-28, 2015

C O M M E N TA R Y

Gratitude for women pioneers

BY LESLEY STOKES

Sometimes when I practice gratitude in my life, I think back to when I was a little girl and imagine telling this little girl of all the incredible adventures that lay ahead. I’d tell her the stories of how she would grow up and hike the tallest mountains, fly over the deepest valleys, travel to the far reaches of the world and sleep under the midnight sun. I’d sit beside her and marvel, knowing she would mature into an intelligent, strong and independent young woman who would gain the respect of her peers, and have access to a future full of opportunity and wealth. I’d warn her that sometimes it was going to be tough. But those experiences would teach her how to gain confidence, practice pa-

tience, master the art of forgiveness but most importantly, know how and when to stand up for herself. And I’d tell her she’d accomplish all of this simply by exploring a mystery that’s billions of years old: the Earth. Becoming a geologist was one of the best and most life-changing decisions I have ever made, though I can understand the disappointment expressed in last week’s Letter to the Editor, “Daughters: Avoid mining or geology as a career.” I consider the author of the letter as one of the true “pioneer” women geologists who likely beared the brunt of a hostile work environment geared favourably towards men. But for every hardship she has endured, there are others like myself who are marching behind and

standing to benefit. Although my experience hasn’t been perfect, the conditions for women in the industry have certainly improved, and they continue to evolve in a positive direction before my eyes. The future isn’t possible with-

out pioneers like her. So instead of waving a white flag, I’d like to sound a trumpet to all the daughters of the world: if you so desire, pursue geology as a career, dig your hands into mining and charge full steam ahead. You’ll be glad you did.

LETTER TO THE EDITOR

Backbone to speak up To the author of last week’s Letter to the Editor (“Daughters: Avoid mining or geology as a career”), I offer my congratulations. Someone has finally the backbone to speak up. I support your thinking. If I had any children, I most certainly would not

advise them to go into either geology or mining as a career. There are many other careers that provide much more stability than those affected by the up and down cycles of commodity prices. Paul Gann, PGeo Vancouver

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15-06-17 5:12 PM

JUNE 22-28, 2015

THE NORTHERN MINER

MARKET NEWS TORONTO STOCK EXCHANGE Renewed concerns over a potential Greek debt default and its effect on the euro pushed down Canada’s benchmark index. The S&P/TSX Composite Index fell 1.4% to 14,741.15. The S&P/TSX Global Gold Index dropped 3.2% to end at 154.27 and the S&P/ TSX Global Mining Index lost 1.8% to 63. The S&P/TSX Capped Diversified Metals and Mining Index lost 2.7% to finish a 730.42. Carpathian Gold shares soared 67% to close at 3¢ on 26.5 million shares traded. The miner received its third and last permit to operate its Riacho dos Machados gold project in Brazil, which previously operated under a provisional permit. A day later, Carpathian reported it extended the forbearance period and amended the project finance facility with Macquarie Bank Ltd. The agreement increases the funds under Tranche 3 of the facility by US$1.9 million for up to US$222.6 million, with US$220.7 million drawn. The forbearance period expires June 26, 2015. In the previous week, Carpathian said it applied for a voluntary delisting from the Toronto Stock Exchange, and intends to list on the Canadian Securities Exchange to lower costs. Oban Mining shares climbed 33% to 10¢ on the back of a proposed five-way merger. The company, chaired by former Osisko

J U N E 8 -12

Mining executive John Burzynski, has offered to combine with Eagle Hill Exploration, Temex Resources, Ryan Gold and Corona Gold to create a cash-rich, debt-free gold exploration and development firm, with assets in Ontario and Quebec. The deal is expected to close by early August. Oban has also agreed to complete a private placement with Osisko Gold Royalties, where Osisko will invest up to $20 million in Oban. The new Oban will be based in Montreal, with a corporate office in Toronto. Shares in Mawson Resources rose 26% to 27¢ after a favourable court ruling. The company announced that on May 21 the Northern Finland Administrative Court rejected an appeal a non-govern-

TSX most active issues Carpathian Gld Iamgold First Nickel Argex Titanium First Quantum Kinross Gold New Gold B2Gold Lundin Mng Yamana Gold

CPN IMG FNI RGX FM K NGD BTO LUN YRI

VOLUME (000s) HIGH

WEEK LOW CLOSE CHANGE

26539 0.03 20348 2.88 17098 0.01 11903 0.25 11523 18.56 11356 3.19 11059 4.05 10575 2.12 10382 5.87 8990 4.33

0.01 0.03 + 0.01 2.56 2.83 + 0.27 0.01 0.01 - 0.01 0.14 0.15 - 0.07 16.58 17.47 + 0.18 2.87 2.89 - 0.16 3.91 4.00 + 0.10 1.94 2.00 - 0.04 5.41 5.43 - 0.39 3.95 3.98 - 0.30

share. The miner announced an operational update at its flagship Detour Lake gold mine in Ontario. Mill throughput rates averaged 59,370 tonnes per day over the last three months, beating design capacity of 55,000 tonnes per day. Over the same period, mining rates averaged 271,000 tonnes per day, exceeding expectations. Estimated gold production for the second quarter is 110,000 to 120,000 oz.

mental organization made against the company’s exploration permit that allows it to drill deeper at its Palokas gold project in northern Finland. Mawson received the exploration permit last June. The company says the permit doesn’t come into “legal force” until the re-appeal period expires on June 22. Detour Gold was the top value gainer on no new news, jumping 96¢ to $14.78 per

TSX greatest percentage change VOLUME (000s) HIGH

Yellowhead Mng Carpathian Gld Macarthur Mnl Oban Mng Pinetree Cap Redhawk Res Mawson Res Stonegate Agri Geodrill Eco Oro Mnls First Nickel Argex Titanium Loncor Res Oracle Mng Stockport Expl Cardero Res MBAC Fertilizr Polaris Minls Luna Gold Coro Mining

YMI CPN MMS OBM PNP RDK MAW ST GEO EOM FNI RGX LN OMN SPT CDU MBC PLS LGC COP

169 26539 565 2416 4021 15 64 133 21 86 17098 11903 16 64 819 181 3854 313 310 48

0.18 0.03 0.04 0.13 0.11 0.07 0.30 0.03 0.79 0.81 0.01 0.25 0.07 0.02 0.03 0.02 0.08 2.64 0.12 0.03

TSX greatest value change

WEEK LOW CLOSE CHANGE

0.08 0.01 0.03 0.08 0.08 0.07 0.23 0.02 0.69 0.68 0.01 0.14 0.07 0.02 0.02 0.02 0.06 2.12 0.10 0.03

0.16 0.03 0.04 0.10 0.11 0.07 0.27 0.03 0.76 0.81 0.01 0.15 0.07 0.02 0.02 0.02 0.07 2.20 0.10 0.03

+ + + + + + + + + + -

82.3 66.6 40.0 33.3 31.2 27.2 26.1 25.0 20.6 17.3 50.0 31.8 26.3 25.0 20.0 20.0 18.7 17.9 16.6 16.6

Detour Gold Horizns G Bear Mag Silver Primero Mng Tahoe Res Asanko Gold Iamgold Altius Mnrls First Quantum Endeavr Silver Franco-Nevada Dominion Diam Potash Cp Sask Agrium Russell Metals Goldcorp Imperial Metal Silver Wheaton Eldorado Gold Polaris Minls

DGC HGD MAG P THO AKG IMG ALS FM EDR FNV DDC POT AGU RUS G III SLW ELD PLS

TSX VENTURE EXCHANGE The S&P/TSX Venture Composite Index fell for a second week during the trading period despite a slight uptick in commodity futures, as it lost 1.1%, or 7.71 points, before closing at 682.14 points. The International Monetary Fund announced that it would send its negotiators home from bailout talks with Greek officials, saying Greece was “unrealistic in its demands.” Meanwhile, strong U.S. retail sales data bolstered evidence of economic recovery for Canada’s largest trading partner. August contracts for gold bullion jumped 8.5 points before finishing at US$1,179.20 per oz. August contracts for West Texas Intermediate crude oil gained 2.8%, or US$1.68, en route to a US$60.40-per-barrel close, while July contracts for copper dropped US2.2¢ before finishing at US$2.68 per lb. Eagle Hill Exploration led the valueadded category after announcing it was part of a five-company merger. The company gained 166%, or 50¢, on 1.8 million shares traded before closing at 80¢ per share. Eagle Hill’s flagship asset is the Windfall Lake gold property in the Abitibi belt of northern Quebec. The company released a preliminary economic assess-

TNM Jun 22 2015 Issue.indd 6

WEEK CLOSE

7975370 1785654 402999 3879222 2694706 2823147 20348139 414760 11523195 415144 2204802 1203991 4683356 1307623 1568832 7098201 99649 2738105 7417490 312907

14.78 12.19 9.18 5.34 17.95 2.19 2.83 14.19 17.47 2.67 58.84 20.77 37.36 128.13 23.73 20.72 9.25 22.61 5.16 2.20

CHANGE

+ + + + + + + + + + -

0.96 0.72 0.43 0.41 0.32 0.29 0.27 0.21 0.18 0.18 3.09 2.55 0.96 0.87 0.76 0.71 0.70 0.62 0.51 0.48

J U N E 8 -12 ment on the project in early June modelling a US$241-million mine that would produce 106,200 oz. gold annually at total cash costs of $558 per oz. North Arrow Minerals topped the volume-lost column after releasing diamond valuation results from its Qilalugaq project, 9 km north of Repulse Bay, Nunavut. The company dropped 55¢ on 1.8 million shares traded, before finishing at 48¢ per share. On June 9 North Arrow reported results from a valuation exercise on a diamond parcel at Qilalugaq. The parcel of 383.55 carats of diamonds was valued at $13,795, or $36 per carat. The company said that the valuation was challenged by “the presence of two distinct

TSX-V most active issues VOLUME (000s) HIGH

Malbex Res West Kirkland CMC Metals Ryan Gold Temex Res Discovery Vent Belvedere Res Gresham Res Abcourt Mines Encanto Potash

MBG 22254 WKM 17862 CMB 14214 RYG 7633 TME 7433 DVN 6196 BEL 6173 GRC 4939 ABI 3063 EPO 3051

0.04 0.07 0.08 0.16 0.08 0.23 0.06 0.95 0.04 0.11

WEEK LOW CLOSE CHANGE

0.02 0.06 0.06 0.12 0.07 0.16 0.05 0.86 0.04 0.10

0.03 0.06 0.07 0.14 0.08 0.23 0.05 0.93 0.04 0.10

+ 0.02 0.00 + 0.01 + 0.02 0.00 + 0.04 + 0.01 + 0.05 0.00 0.00

company jumped 44¢ before closing at $5.19 per share. On June 10 Pacific Booker revealed that the B.C. Minister of Environment, Mary Polak, had lifted Morrison’s suspended environmental assessment, which should conclude in early July. Afterwards the company announced a non-brokered private placement of 100,000 shares at $5 each.

diamond populations, including a population of rare ‘Type Ib’ yellows diamonds.” it was apparently unheard of to have two diamond populations within a single deposit before the sampling program. Pacific Booker Minerals registered large gains after signs of permitting movement at its Morrison copper-gold project, 65 km northeast of Smithers, B.C. The

TSX-V greatest percentage change VOLUME (000s) HIGH

Wescan Goldfie Sniper Res Malbex Res Noram Vent Long Harbour E Eureka Res Eagle Hill Exp Arctic Hntr Ur Stelmine Can Cache Expl Plate Res North Arrow Mn Cougar Mnls New Nadina Plato Gold Golconda Res Golden Goliath Bandera Gold Canadn Plat Northern Abiti

WGF SIP MBG NRM LHC EUK EAG AHU STH CAY PLR NAR COU NNA PGC GA GNG BGL CPC NAI

155 430 22254 183 23 311 1841 1125 503 350 160 1821 13 1815 631 20 42 98 629 129

0.04 0.05 0.04 0.02 0.11 0.10 0.88 0.04 0.04 0.11 0.04 1.00 0.01 0.02 0.02 0.01 0.01 0.02 0.01 0.01

TSX-V greatest value change

WEEK LOW CLOSE CHANGE

0.01 0.02 0.02 0.01 0.10 0.04 0.30 0.02 0.02 0.07 0.03 0.38 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

0.04 0.05 0.03 0.02 0.11 0.10 0.80 0.04 0.04 0.11 0.03 0.48 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

+ 300.0 + 233.3 + 200.0 + 200.0 + 175.0 + 171.4 + 166.6 + 133.3 + 133.3 + 110.0 - 64.2 - 53.4 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0 - 50.0

VOLUME

Eagle Hill Exp Pac Booker Min Bacanora Mnls Titanium Corp Golden Hope Reservoir Mnls Zimtu Capital Red Mile Mnls EurOmax Res Probe Mines North Arrow Mn Kennady Diam Chesapeake Gld Gold Reserve Goldrock Mines West High Yld Lion One Mtls Largo Res Mason Graphite Arian Silver

EAG BKM BCN TIC GNH RMC ZC RDM EOX PRB NAR KDI CKG GRZ GRM WHY LIO LGO LLG AGQ

U.S. M ARKETS Concerns over a stalemate in Greece’s debt talks and improving economic data in the U.S. that could accelerate interest rates kept the lid on U.S. equities during the trading week. The Dow Jones Industrial Average advanced 0.3% to finish at 17,898.84, and the S&P 500 Index gained 0.6% to 2,094.11. The Philadelphia Gold & Silver Index slipped 1.7% to 66.55. Shares of Banro jumped 20% to US37¢ per share, after the company updated its resources and reserves at its wholly owned projects on the Twangiza-Namoya gold belt in the Democratic Republic of the Congo. Overall reserves for its core projects Twangiza, Namoya, Lugushwa and Kamituga increased by 23% to 2.91 million oz. (42.9 million tonnes grading 2.11 grams gold per tonne) at US$1,200 per oz. gold. Total measured and indicated resources for all of its properties stand at 7.73 million oz. gold (154.9 million tonnes grading 1.55 grams gold), while inferred resources measure 5.26 million oz. gold (97.8 million tonnes grading 1.67 grams gold per tonne). Peabody Energy was the most traded

VOLUME

1841007 12669 934051 747435 106633 87112 220507 109500 205699 610896 1821122 167070 20304 20766 51021 113465 128700 408980 448997 14274

WEEK CLOSE

0.80 5.19 1.80 1.39 0.38 4.40 0.34 0.21 0.44 0.50 0.48 5.25 2.04 4.59 0.27 0.31 0.46 0.73 0.50 0.49

CHANGE

+ + + + + + + + + + -

0.50 0.44 0.40 0.29 0.13 0.10 0.10 0.10 0.08 0.07 0.55 0.17 0.15 0.15 0.10 0.09 0.08 0.07 0.07 0.07

J U N E 8 -12 stock after announcing plans for a leaner corporate structure. The coal producer, with metallurgical and thermal coal customers in more than 25 countries, said it would reduce its corporate and regional headcount by 250 people by year-end, saving the company up to US$45 million. Peabody’s shares dropped US67¢ to US$2.53. The reductions represent 25% of Peabody’s corporate and regional support positions, and most of the cuts will be made before July. It is also reviewing shifts, scheduling and mine planning at operations in

U.S. most active issues VOLUME (000s) HIGH

Peabody Enrgy* BTU 104231 3.38 Alcoa* AA 78681 12.42 Newmont Mng* NEM 75266 25.97 Freeport McMo* FCX 64590 20.78 Barrick Gold* ABX 45044 11.82 Kinross Gold* KGC 41476 2.59 Cliffs Nat Rs* CLF 37073 5.55 Vale* VALE 32089 6.92 Alpha Nat Res* ANR 28650 0.51 Goldcorp* GG 27260 17.54

WEEK LOW CLOSE CHANGE

2.52 12.02 23.46 19.29 11.18 2.34 5.01 6.42 0.38 16.80

2.53 - 0.67 12.06 - 0.36 23.55 - 2.34 19.81 + 0.16 11.27 - 0.20 2.36 - 0.10 5.48 + 0.19 6.81 + 0.30 0.39 - 0.12 16.85 - 0.39

Australia “to determine optimal production levels.” Newmont Mining’s shares fell US$2.34 to US$23.55. The company is buying AngloGold Ashanti’s Cripple Creek & Victor gold mine in Colorado for US$820 million in

cash, plus a 2.5% net smelter return royalty for gold production from future underground ore. The deal will add 350,000 oz. and 400,000 oz. gold per year in 2016 and 2017, at all-in sustaining costs of between US$825 and US$875 per oz.

U.S. greatest percentage change VOLUME (000s) HIGH

Banro* Asanko Gold* Iamgold* Lake Shore Gd* Primero Mng* Endeavr Silve* Midway Gold* Atlatsa Res* Hi-Crush Part* Entree Gold* Walter Energy* Arch Coal* Alpha Nat Res* Peabody Enrgy* US Energy* Cloud Peak En* Silver Bull R* Molycorp* Solitario Ex&* Alliance Rs P*

BAA AKG IAG LSG PPP EXK MDW ATL HCLP EGI WLT ACI ANR BTU USEG CLD SVBL MCP XPL ARLP

U.S. greatest value change

WEEK LOW CLOSE CHANGE

8800 0.38 0.31 136 1.81 1.52 6338 2.35 2.06 1556 1.08 0.94 567 4.40 3.96 512 2.22 1.99 823 0.08 0.06 100 0.13 0.11 203 31.00 28.05 240 0.40 0.34 2367 0.38 0.26 27233 0.52 0.36 28650 0.51 0.38 104231 3.38 2.52 1217 0.98 0.75 1987 5.49 4.65 1143 0.11 0.08 27062 0.45 0.35 234 0.81 0.69 1970 29.91 26.25

0.37 1.79 2.31 1.04 4.33 2.17 0.08 0.12 30.88 0.40 0.27 0.39 0.39 2.53 0.81 4.66 0.09 0.36 0.69 26.44

+ + + + + + + + + + -

20.1 14.7 12.1 10.1 9.6 9.0 8.5 7.1 5.9 5.2 40.0 24.3 22.9 20.9 16.0 13.3 11.5 11.2 10.9 10.1

Hi-Crush Part* Randgold Res* BHP Billi-BBL* Rio Tinto* BHP Billi-BHP* Primero Mng* Tahoe Res* Mag Silver* AngloGold Ash* Vale* Alliance Rs P* Newmont Mng* Franco-Nevada* Dominion Diam* Consol Energy* US Silica Hld* CVR Partners* Mesabi Trust* SunCoke Engy* Stillwater Mg*

HCLP GOLD BBL RIO BHP PPP TAHO MVG AU VALE ARLP NEM FNV DDC CNX SLCA UAN MSB SXC SWC

VOLUME

WEEK CLOSE

CHANGE

202927 2424015 4611587 3091758 10213834 566892 621384 15601 15565321 32088681 1970022 75265777 3733145 518827 17284166 1431419 213285 187433 1132059 4932007

30.88 71.47 41.80 44.04 43.30 4.33 14.56 7.46 9.06 6.81 26.44 23.55 47.69 16.87 25.26 31.39 12.33 13.00 14.81 13.27

+ + + + + + + + + + -

1.72 1.58 1.00 0.41 0.39 0.38 0.36 0.36 0.34 0.30 2.97 2.34 2.07 1.86 1.84 1.29 1.24 1.15 1.03 0.86

15-06-17 5:12 PM

THE NORTHERN MINER

JUNE 22-28, 2015

METALS, MINING AND MONEY MARKETS SPOT PRICES

PRODUCER AND DEALER PRICES

COURTESY OF SCOTIABANK

Wednesday, June 17, 2015 Precious Metals Price (US$/oz.) Gold $1178.50 Silver $15.98 Platinum $1074.00 Palladium $730.00 Base Metals Nickel Copper Lead Zinc

Change -7.50 -0.15 -39.00 -17.00

Price (US$/tonne) $12820.00 $5739.50 $1798.50 $2077.50

Change +105.00 -10.00 +2.50 -14.00

LME WAREHOUSE LEVELS Metal stocks (in tonnes) held in London Metal Exchange warehouses at opening, June 8, 2015 (change from June 1, 2015 in brackets): Aluminium Alloy 17180 (-1260) Aluminium 3644360 (-27150) Copper 314400 (+2100) Lead 185225 (+29450) Nickel 464556 (-4524) Tin 7345 (+15) Zinc 469550 (+27025)

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$41.37; Aug. 2015: US$41.58 Cobalt: US$13.97/lb. Copper: US$2.61/lb. Copper: CME Group Futures July 2015: US$2.60/lb.; Aug. 2015: US$2.61/lb Ferro-Chrome: US$2.18/kg FerroTungsten: US$34.31/kg Ferrovanadium: US$19.39/kg Iridium: NY Dealer Mid-mkt US$580/tr oz. Iron Ore 62% Fe CFR China-S: US$62.10/tonne Iron Ore Fines: US$51.80/tonne Iron Ore Pellets: US$81.92/tonne Lead: US$0.81/lb. Magnesium: US$2.22/kg Manganese: US$2.03/kg Molybdenum Oxide: US$6.889/lb. Phosphate Rock: US$115/tonne Potash: US$307.00/tonne Rhodium: Mid-mkt US$990/tr. oz. Ruthenium: Mid-mkt US$50.00/tr. oz. Silver: Handy & Harman Base: US$15.98 per oz.; Handy & Harman Fabricated: US$19.49 per oz. Tantalite Ore: : US$177.08/kg Tin: US$6.59/lb. Uranium: U3O8, Trade Tech spot price: US$36.75/lb.; The UX Consulting Company spot price: US$36.50/lb. Zinc: US$0.94/lb. Prices current June 17, 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 15 14756.05 678.39 859.33 155.16 721.52 66.95 156.57

June 12 14741.15 682.14 857.66 154.27 730.42 66.55 155.84

June 11 14830.88 682.13 863.83 155.27 732.69 67.13 157.18

June 10 14889.04 682.30 866.62 157.70 752.75 68.47 160.67

June 9 14817.71 681.62 863.51 157.53 751.43 67.56 159.16

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 May 31/15 (with changes from May 15/15).

Largest short positions New Gold NGD 41277981 B2Gold BTO 29481045 PotashCorp POT 25377840 Lundin Mining LUN 22912022 Teck Resources TCK.B 17140646 Rubicon Minerals RMX 14377970 Kinross Gold K 14134288 Thompson Creek Mtl TCM 11954221 First Quantum FM 11726092 Detour Gold DGC 11087112 Barrick Gold ABX 10350994 Iamgold IMG 9250838 Yamana Gold YRI 8020031 Denison Mines DML 7912834 Argonaut Gold AR 7883798 Largest increase in short position New Gold NGD 41277981 Trevali Mining TV 6315328 Capstone Mining CS 1905301 Western Lithium WLC 2411500 Turquoise Hill Res. TRQ 3712824 Largest decrease in short position Kinross Gold K 14134288 Lundin Mining LUN 22912022 Avalon Rare Metals AVL 196000 Banro BAA 2117349 Endeavour Mining EDV 101821

Largest short positions Dajin Resources DJI 1534000 Zenyatta Ventures ZEN 557595 Bear Creek Mining BCM 375013 Kaminak Gold KAM 286511 Roxgold ROG 272881 Golden Valley Mines GZZ 259000 True Gold TGM 209228 Lion One Metals LIO 200100 Canasil Res. CLZ 200000 Monument Mining MMY 190500 Gold Canyon Res. GCU 182500 Saturn Minerals SMI 181000 Santacruz Silver SCZ 164900 Komet Resources KMT 138000 Largo Resources LGO 130000 Largest increase in short position Dajin Resources DJI 1534000 Bear Creek Mining BCM 375013 Golden Valley Mines GZZ 259000 Santacruz Silver SCZ 164900 True Gold TGM 209228 Largest decrease in short position Majestic Gold MJS 0 Xtierra XAG 0 Nexgen Energy NXE 900 Colt Resources GTP 0 Bonterra Res. BTR 50000

7280430 -455362 714452 -1804630 821336 135300 -4650503 115483 675042 -461964 325651 274197 -492062 535186 -478243 7280430 4642100 943116 877600 867437 -4650503 -1804630 -1318700 -1272500 -1196153

1533000 -19400 316200 -2900 2300 255000 163500 -58900 -400 152000 83400 -144400 164700 119500 109500 1533000 316200 255000 164700 163500 -1774000 -900000 -713300 -685500 -676000

CANADIAN/U.S. EXCHANGE (Bank of Canada noon rate) Date June 15 June 12 US$ in C$ 1.2323 1.2304 C$ in US$ 0.8115 0.8127

June 11 1.2314 0.8121

June 10 1.2267 0.8152

June 9 1.2317 0.8119

EXCHANGE RATES (Bank of Canada, June 15, 2015) Currency Aus $ Euro In C$ 0.9571 1.3883 In US$ 0.7767 1.1266

Japan 0.00999 0.00810

Mex P 0.07991 0.06485

SA Rand 0.09934 0.08061

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 £ 1.9188 1.5571

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

Date June 15 June 12 June 11 June 10 BASE METALS (London Metal Exchange -- Midday official cash/3-month prices, US$ per tonne) Al Alloy 1730/1745 1770/1790 1750/1770 1765/1785 Aluminum 1660/1703 1701/1741 1701/1737 1726/1762.50 Copper 5760/5785 5887.50/5903.50 5905/5919 6045/6049.50 Lead 1805/1818 1830.50/1845 1895/1908 1940.50/1952 Nickel 12730/12800 13060/13120 13460/13480 13570/13600 Tin 14425/14400 14895/14900 15095/15050 15345/15350 Zinc 2085/2095 2103/2113 2123/2132 2168/2181

1765/1785 1722.50/1760 5988.50/5991 1924.50/1935 13525/13570 15410/15400 2164.50/2172

PRECIOUS METAL PRICES (London fix, LBMA silver price, US$ per troy oz.) Gold AM 1178.25 1179.25 1180.50 Gold PM 1181.40 1182.80 1178.50 Silver 15.93 15.93 15.87 Platinum 1077.00 1095.00 1108.00 Palladium 734.00 739.00 746.00

1181.00 1177.40 16.13 1109.00 746.00

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

FOR DAILY MINING NEWS, VISIT WWW.NORTHERNMINER.COM

1186.00 1188.50 16.13 1117.00 749.00

June 9

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 8-12, 2015 28 New Highs Allana Potash Altiplano Mnls AMI Res Antioquia Gold Bacanora Mnls Buccaneer Gold Canadn Plat Challenger Dee CMC Metals Currie Rose Rs Dajin Res Diagnos Fission 3.0 Gresham Res Hornby Bay Mnl Indico Res Metalore Res Nevsun Res OM Group* Plato Gold Probe Mines Red Mile Mnls Ryan Gold Sierra Iron Or SNS Silver Stina Res Taranis Res Wealth Minls

255 New Lows

EXCHANGE RATES

LEGEND

DAILY METAL PRICES

Abcourt Mines Alcoa* Aldershot Res Alexandria Mnl Alliance Rs P* Almonty Ind Alpha Gold Alpha Nat Res* Altan Nev Mnls Altima Res Alto Vent Alturas Minls Amador Gold Amex Expl Anglo-Can Mng Apogee Silver Arch Coal* Argex Titanium Argus Metals Aroway Mnls Asher Res Astur Gold Athabasca Mnls Augen Gold Avrupa Mnls Azincourt Res Baja Mng Balmoral Res Bandera Gold Barisan Gold Barker Mnrls Baroyeca Go&Si Bear Creek Mng Beaufield Res Benton Cap Big North Grap Bison Gold Res Bitterroot Res Black Widow Rs Bravada Gold Buccaneer Gold Cadillac Vent Canadn Arrow Canadn Int Mnl

Canadn Orebods Canadn Plat Canadn Zinc Canamex Res CaNickel Mng Cantex Mn Dev Canyon Copper Caracara Silvr Cardero Res Castle Peak Mg Central Iron O Cliffmont Res Cloud Peak En* Colorado Res Commerce Res Compliance Eny Conquest Res Consol Energy* Coral Gold Corex Gold Cornerstone Ca Coronado Res Cougar Mnls Darnley Bay Decade Res Delrand Res Dolly Vard Sil Durango Res Eagle Plains Ecuador G & C Edgewater Expl El Tigre Silvr Eldorado Gold* Eldorado Gold Emgold Mng Energizer Res Energold Drill Erin Ventures Europn Uran Rs Fancamp Expl Ferrum Am Mng First Nickel Freeport Res Frontline Gold Galore Res Garibaldi Res Geologix Ex Giyani Gold Glen Eagle Res Global Hunter Global Minls Golconda Res Gold Bulln Dev Goldcorp* Golden Band Golden Goliath Golden Share M Grande Portage Granite Ck Gld Great Panther Green Swan Cap Harmony Gold* Heatherdale Rs Highbank Res Homestake Res Huntington Exp Inspiration Mg

Intl Northair Intl Vestr Res Intrepid Pots* Ivernia J.A.G. Mines Jaguar Mng Kermode Res Kestrel Gold Kincora Copper Kings Bay Gold 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 Mammoth Res Manado Gold Marengo Mng Marifil Mines Maudore Minls MDU Res* Medallion Res Metanor Res Midas Gold Midlands Minls Midway Gold Midway Gold* Migao Millrock Res Milner Con Slv Mindoro Res Mkango Res Monster Mng MPVC Natural Rs Pt* Network Expl Nevada Clean M New Millennium New Milln Iron NGEx Res Nighthawk Gold Nippon Dragon Noram Vent North Am En P* North Am En Pa North Am Pall North Am Pot D North Am Tung North Arrow Mn Northern Abiti Northern Freeg Northisle C&G Nubian Res NWM Mng Oceanic Iron O Olivut Res Oracle Mng Orbit Garant D Orbite Alumnae Orca Gold Orestone Mng Orex Minls Pac North West Pac Potash Pac Wildcat Re

Paladin Energy Palladon Vent Panoro Minls Peabody Enrgy* Philippine Mtl Platinex Platinum Gp M* Plato Gold Potash C Sask* Precipitate Gl Prophecy Coal Puma Expl Purepoint U Quadro Res Regal Res Reunion Gold Rhino Res* Riverside Res RJK Explor Rockcliff Res Rockwell Diam Rodinia Lithm Royal Nickel Running Fox Rs Sable Res Sage Gold Saint Jean Car Santa Barb Res Santa Fe Metls Santacruz Silv Satori Res Scorpio Gold Serengeti Res SGX Res Silver Bull R* Silver Bull Re SnipGold Sonora Gld & S Source Expl Stans Energy Stonegate Agri Sulliden Mng C Sunset Cove Mg TAD Mnl Expl Taipan Res Tanz Roy Exp Tanz Roy Exp* Tanzania Mnls Taseko Mines* Taseko Mines Teck Res A Terraco Gold Teryl Res Corp Tintina Res Trio Gold Corp Typhoon Expl Ultra Lithium Unigold Uracan Res US Energy* Valterra Res Vangold Res VMS Vent Walter Energy* West Af Iron O Western Pac Rs Xmet Yamana Gold* Zazu Metals

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

TNM Jun 22 2015 Issue.indd 7

416-510-6768

15-06-17 5:12 PM

JUNE 22-28, 2015

THE NORTHERN MINER

Sourcing Personnel for the Next Upturn and the Impending War for Talent

BY CHRIS STAFFORD

The Canadian mining industry is a pillar of the national economy: we are a top 10 producer of 17 key metals and minerals, and the industry employs over 220,000 workers. Yet the industry has always struggled with changing demographics, an aging workforce, economic volatility and skills gaps, and for decades has been challenged by a lack of skilled talent. This article will review how the commodity cycle impacts upon the availability of skills and what the industry can do better to attract, recruit and retain a skilled workforce through the peaks and valleys of such a cyclically driven industry. The last metals upcycle — also known as the “Super Cycle” — created an unprecedented demand for skilled employees. It exposed the mining sector as one seriously lacking in numbers and skills required to develop, build and operate mines. During this period, jobs were plentiful, salaries offered were astronomical, signing bonuses were common, competition for talent was fierce, and the recruiting strategy was “hire at any cost.” With those boom years behind us, the perception today is that the

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

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

end of the super cycle has left an abundance of qualified and skilled talent unemployed and available, and that the war for talent is over. But the reality is there are currently hundreds of positions unfilled in the mining industry across Canada! This is evidence enough to suggest that the war for talent is not over but that this low point in the commodity cycle is merely a “cease fire” and should be considered as an opportunity to “reload.” To understand what industry could do better, let’s look at the two-decade pre-boom period leading up to the year 2000 and the beginning of the last commodity upcycle. Canada’s mining industry had been declining in activity since 1980, producing a slash-and-burn mentality that saw mines closing and major downsizing, not much funding for exploration and few mines developed. This impacted all areas of the sector, and any thought of long-term workforce planning was a pipe dream. Enrollments were down in the mining universities, earth science programs were removed from the curriculum, and mining schools closed. There were few opportunities for graduates, and many were lost to other industries. It all served to send a clear message to society that mining was a sunset industry and not a good choice for a career. Worse still, mining companies abandoned their connections to mining colleges and universities, and students were forgotten. Throughout the 1990s, sustainability became the buzzword for the industry as the most important concerns were thought to be environmental, social-licence, political and community issues. Yes they were important concerns, but during this time there was little, or no, mention of workforce planning or long-term consideration for talent. However, one positive that came out of this period was the globalization of the Canadian mining industry, which created job opportunities overseas for highly respected Canadian mining talent. This was particularly attractive to French Canadians who were in high demand in French-speaking countries and were able to realize the benefit of their language skills. To a lesser degree this worked in Latin America as well. One other notable positive during this depressing period was the restarting of the University of Toronto mining program. So after two decades of an industry in decline, it is reasonable to assume that the industry was anything but prepared for what was about to happen around 2000.

BOOM 2000 With the improvement in metal prices in 2000 came unprecedented growth in the mining industry and with it a demand for talent.

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

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TNM Jun 22 2015 Issue.indd 8

2015-06-15 11:37 AM

15-06-17 5:12 PM

THE NORTHERN MINER

HR departments until this time had little to do other than simply firing, pensions and benefits etc. But then recruiting quickly became the number one focus and without realizing it, the “War for Talent” was on. HR departments’ responsibilities grew to include recruiting, retention, career planning, succession planning, performance, training and development, leadership, talent management, international and domestic talent mapping, etc. The demand for mining skills at all levels and disciplines was not just in Canada but global, and Canada was considered to be providing a talent pool to the global mining industry.

TODAY’S REALITY So here we are. After two decades of downsizing, followed by the rise and fall of the super cycle, we are wallowing in self-pity but with the opportunity to take corrective action to prepare for the next upturn. Today’s ceasefire in the War for Talent means planning long term and looking beyond the current status of the industry. It means using the information garnered from the numerous reports as guidance, and taking note of the many expert opinions that are projecting manpower trends expected in the sector over the next decade. If what these reports tell us is true and sustainability of the industry is important, then action must be taken now. The Mining Industry Human Resource Council’s (MiHR) 2014 10-year report forecasts that 120,000 new positions will be created in the Canadian mining sector between now and 2024. These numbers are supported by similar reports provided by other consultants who take a more global approach and confirm this trend to extend to all major mining regions including the United States, Australia, South Africa, Chile and Peru — all places hosting Canadian mining people and mining companies. The Ernst & Young 2014 report on productivity in mining and metals acknowledges that the number one business risk the mining sector faced during the boom years was a skills shortage. In their most recent report, the risk has been relegated to number nine. However, the report says there is now a more complex situation where the loss of focus on talent poses two risks to the sector: we will lose the wise, senior and most experienced people critical to delivering productivity, efficiency improvements essential in the downturn; and it will result in skills shortages necessary for its long-term sustainability, when the cyclical upturn inevitably begins. Knowing this, employers will need to master long-term workforce planning in a manner that connects HR strategy and practices to business strategy: ensuring a company has the right people in the right place at the right time. What we are learning from past events and in listening to the “marketplace”, company culture is most important in the quest to attract talent: What is your brand? What puts you apart from your competition and why would anyone want to work for you? Knowing your company culture will provide better insight into the type of personalities that thrive in it. This might be even more important now, when hiring talent with less experience than before. Ensure your HR strategies cover all the bases for a multi-generational workforce. This means being holistic and inclusive and not just focussing on the leaders but on all the players to win the talent war.

ing who the best are and, if you hire the best, most suitable grads will become your leaders. 3. Review traditional position specs. You may need to change the skill set required and responsibilities to suit the context of the talent market. Some positions where typically 15 to 30 years would have been the normal requirement, may have a new norm of 8 to 12 years! 4. Anticipate rather than react to demand. The hardest time to find talent is when you want it. 5. Engage senior management in the hiring process, such as representing your company at career fairs and on campus. Candidates need to know these people and how their own careers evolved. 6. Retain “been there, done that” senior employees with the wisdom to oversee less experienced engineers and on a part time basis to participate in mentoring programs. 7. Offer interesting and challenging career paths with growth potential, opportunity to upgrade skills, training and development programs and regular performance reviews. 8. Develop a flexible workforce capable of responding to demand changes. In downtimes consider moving people around instead of laying them off. 9. For remote locations that are always a challenge, consider being flexible and creative and maybe offer extended leave, more responsibility, better pay and more aggressive career path. Consider term contracts such as 2-year with a 1-year option that is rewarded with retention incentives. Now that we know what the mission is, we must now devise strategies to locate the target: 1. Mining companies must continue to remain visible on campus and provide summer jobs for students. Failing to do this would be the biggest mistake the industry could make. 2. Diversity and working with First Nations is ongoing and fully recognized by most companies as a given. More women are graduating in the earth science programs and this can only be seen as a positive.

JUNE 22-28, 2015

3. With proper training programs in place, why not tap into the 500,000 unemployed — many of them youth — and train them as miners? 4. If there are no openings for graduate engineers and geologists, offer them jobs as trainee miners. Get the best ones into your organization! 5. Cross-training existing employees. 6. Consider targeting military talent who are retiring. They are used to being mobilized, are trained in the various trades and leadership. This is an approach used by Freeport-McMoRan.

CONCLUSION Human capital is a cornerstone upon which a company’s future is built. In the mining sector, where companies often operate in harsh circumstances while focusing on reducing costs, improving efficiencies, improving safety records and much more, it is essential to attract the right talent. The challenge going forward is to stay ahead of the changing economic and demographic trends, understand the nature of those you are trying to recruit, be flexible and think longer term in your workforce planning. Competition for talent will once again become the norm and those companies best prepared to win the competition will be more successful in attracting the best talent. If, as many companies do profess, “People are our most valuable asset” then do them, and your business justice, by continuing to invest in them to optimize those assets. — Chris Stafford is president of Toronto-based executive search firm C.J. Stafford & Associates. Established in 1981, C.J. Stafford & Associates provides executive search recruitment and project staffing services for clients in the mining, metals and minerals industries. The firm offers clients unparalleled insight into the unique challenges associated with hiring in the mining industry and a first class understanding of how to attract the best talent. By dedicating itself to these industries the company has become recognized as a leader in executive search and recruitment for clients across Canada and internationally. Please visit www.cjstafford.com for more information.

CHECKLIST So, you have enticed talent to an interview, but let’s make a checklist of what you need to attract talent: 1. Understand what your company culture is, and what is your value proposition. Knowing this will let you identify the type of person that succeeds in your company. 2. Consider moving towards being candidate/applicant-centric. Spend time with those potential recruits, get to know them, ensure they know you and your company. Doing this will assist in discover-

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

Senior Financial Accountant Ontario Online Reference No: 61955 The Senior Financial Accountant is a key member of the Finance group. This position’s main purpose is in the assistance of planning, controlling, reporting, and measuring the financial information of J.S. Redpath Limited.

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

Project Controller Zacatecas, Mexico Online Reference No: 61938 The Project Controller (senior) is responsible for the planning and performance monitoring of a group of assigned projects, including providing guidance to operational managers through the implementation of project controls processes, procedures and contracts.

Jumbo Operator ID, Papua, ID Online Reference No: 6198 P.T. Redpath Indonesia has an immediate opening for a Jumbo Operator to join their dynamic team at our project in Indonesia.

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

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

TNM Jun 22 2015 Issue.indd 9

15-06-17 5:12 PM

JUNE 22-28, 2015

THE NORTHERN MINER

Hays Salary Guide: Reason for Optimism in Mining Sector

The following is a summary by recruiting consultancy Hays Canada of their newly released, fifth annual Hays Canada Salary Guide, conducted in November 2014.

this knowledge gap to support companies as they invest in staff recruitment and retention plans, along with the help they need to future-proof their company.”

According to our survey, more than half of Canadian mining and resource employers expect to grow their business in 2015 but only a third intend to boost permanent headcount. Although the mining industry has had to adjust hiring plans as a result of the global downturn, our survey found it too, along with all other industries, is very optimistic about growth. Employers also have to contend with a tug-of-war over skilled tradespeople who are in high demand, forcing many companies to rely on temporary workers. Overall, the Hays report suggests that mining and resource business targets in 2015 and beyond could be undermined if more permanent recruitment, training and retention solutions aren’t found. The survey found that 53% of Canadian mining and resource companies anticipate increasing business activity in the coming months. However, only 34% will add to permanent staff levels. A further 20% are actually planning to cut staff threatening productivity and increasing stress levels among existing staff. Forty percent of employers plan to address these issues by increasing temporary staff levels rather than focusing on permanent positions with long-term career growth potential.

POSITIVE SIGNS Despite unpredictable markets worldwide, responses from Canada’s mining and resource employers show that the majority (83%) of employers plan to offer some form of salary increase in 2015 and more than a quarter (33%) believe that the country’s economy will continue to strengthen throughout the next 6-12 months. “It appears Canadian employers are poised to capitalize on their positive outlook although I sincerely hope a focus on short-term gain doesn’t distract them from resolving the looming challenges ahead,” O’Grady said. Additional cross-industry highlights are: over 50% of

employers believe their company’s reputation and low profile are barriers to recruitment; 70% say recruiting for senior roles is the most difficult and can take anywhere from 2-6 months to fill; and 82% of employers say they made the wrong hire likely due to desperation and a lack of time. — Hays Specialist Recruitment Canada is a wholly owned subsidiary of Hays plc, which has been at the forefront of the global recruitment industry for over thirty-five years. With annual revenues of over £2.1 billion, Hays Specialist Recruitment is the largest specialist recruitment consultancy in the world. Hays’ corporate head offices are located in the U.K., and the firm has over 8,800 staff in 393 offices across 33 countries. Last year Hays placed 80,000 people in permanent jobs and approximately 300,000 contractors in temporary assignment for its clients. Please visit www.hays.ca and www.hays.com for more information.

SKILLS SHORTAGE Forty per cent of employers in the mining and resource industry say skill shortages affect business activity. However, many of the contributing factors are within their control. More than a quarter of respondents acknowledge that fewer people are entering the industry. This mirrors attitudes across all employment sectors as well as the general opinion that employers have a responsibility to boost volumes of qualified graduates by promoting themselves and their industries at the post-secondary level. A quarter of employers also say their lack of training and professional development contributes to their skills shortage issue. In an effort to attract top talent, 59% of mining and resource employers rely on competitive salary packages; however, forestry employers struggle to match salaries offered by mining companies. Forestry companies therefore need to establish competitive recruitment strategies to attract talent. “Mining and resource employers need to work extra hard to attract tradespeople since the work often requires a candidate to relocate,” added O’Grady. “Employers have to face this head-on but doing so falls outside their areas of expertise. We can bridge

Site Services Operator Online Reference No: 61910

Reporting to the services foreman, you will be responsible for operating a variety of cranes and heavy equipment as needed to maintain the site. You will assist in training and monitoring junior operators, and provide support to other trades on site.

Senior Structural Technologist Saskatoon Online Reference No: 61884

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

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

Underground Boom Truck Operator Musselwhite Site, Ontario Online Reference No: 61901 As a boom truck operator you will be required to perform lifts of varying nature in an approved manner consistent with current OH&S practices.

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

Regional Sales Manager – Eastern Canada Online Reference No: 61590 Position Summary: Provide business development, marketing, sales and technical support for customers in central and eastern Canada, in coordination with CiDRA corporate office in USA and regional independent sales representatives. A Canadian based position with preferred residence in Ontario or Quebec.

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

Regional Director Ministry of Energy and Mines Victoria (Southwest Region)

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

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

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

TNM Jun 22 2015 Issue.indd 10

15-06-17 5:12 PM

THE NORTHERN MINER

JUNE 22-28, 2015

Great Panther defies low silver prices and eyes growth GREAT PANTHER, From Page 1

was to get our plant running up to capacity. So essentially our costs are spread over more ounces. We also subsequently discovered zones at San Ignacio that are wider and higher grade. It’s a bit more gold rich, and that’s been a big driver in terms of getting our costs down, because higher gold grades make a bigger contribution to the by-product credits,” he explained. Great Panther’s drilling paved the way for an updated resource estimate at San Ignacio, released in mid-February. The deposit holds 180,300 tonnes grading 406 grams silver equivalent per tonne for 2.4 million contained oz. Inferred resources total 788,000 tonnes of 391 grams silver equivalent for nearly 10 million contained oz. Archer acknowledged that Great Panther will most likely look to adjust its annual guidance figures if the success continues into the second quarter. The company estimates it will produce between 3.5 million and 3.6 million equivalent oz. silver this year, with all-in sustaining costs ranging from US$18.50 to US$19.85 per oz. “Our sustaining costs to start the year are substantially lower than expected, though a single quarter doesn’t necessarily make a trend. We’re also on track to produce significantly more ounces, and so far the second quarter is holding together,” Archer added. With Guanajuato and Topia more established, Great Panther looks to expand its production portfolio, and its next endeavour will likely take it out of Mexico to a new jurisdiction: Peru. In May the company signed a two-year option agreement with Switzerland-based Nyrstar (USOTC: NYRSF) to acquire a 100% interest in the Coricancha mine complex, 90 km due east of Lima. Great Panther made initial cash payments of US$1.5 million, while a second option payment of US$1.5 million is due on the first anniversary of signing. Assuming the company exercises the option, it would then make another US$5-million payment, though there is a further contingent payment of US$4 million due “under certain conditions.” In addition to the cash payments, the option agreement calls for exploration expenditures of US$2 million in the first year and US$3 million in the second year. Nyrstar placed Coricancha on care and maintenance around two years ago. The complex features fully permitted, 600-tonne-perday flotation and bio-leach plants, along with supporting mining infrastructure. The property covers over 37 sq. km in Peru’s prolific central polymetallic belt, and production at the mine dates back to 1906. Gold-silver-lead-zinc-copper mineralization occurs as massive-sulphide veins, mined underground by cut-and fill-methods. “We’ve actually been looking for an opportunity to pick up an asset in Peru for around five years,” Archer said. “We’re familiar with the district and I’ve never been shy about advertising the fact we were looking for an acquisition, so when the Nyrstar guys approached us, we jumped on the opportunity. They approached me at the Prospectors & Developers Association of Canada conference last year and said: ‘We’re selling our non-core assets.’ I think they were motivated, and that worked in our favour.” Coricancha hosts historic

TNM Jun 22 2015 Issue.indd 11

proven and probable reserves of 640,000 tonnes grading 4.35 grams gold, 149 grams silver, 0.3% copper, 1.8% lead and 2.6% zinc. The project’s measured and indicated resources total 890,000 tonnes of 5.04 grams gold, 174.62 grams silver, 0.4% copper, 1.97% lead and 3.1% zinc; while inferred resources total 4.9 million tonnes of 4.91 grams gold, 224.54 grams silver, 0.5% copper, 1.6% lead and 2.98% zinc.

off veins in hopes of nailing down high-grade areas to kick-start operations, with a focus on the large inferred resource base. “There are actually a couple opportunities we’ll be exploring at Coricancha. Despite the fact the grades are good, it’s still a narrowvein type deposit, not unlike what we’re mining in Mexico,” Archer commented. “So we have experience in the type of operation, and we think we

Great Panther is looking to expand its production portfolio by moving into Peru. In terms of in-situ metals, Coricancha holds 13.5 million proven and probable equivalent oz. silver, 22 million measured and indicated oz. and 125 million inferred oz. Great Panther figures the project could be in production as early as 2017, and provide 2.5 million equivalent oz. silver annually to its production profile. The company will start out by drilling

can get the costs down from where they were before the closure. The other side is that, despite the resource grades being relatively strong, there are some veins that are higher grade than others. We’ll focus on that material, and see if we can start the operation on strong footing,” he added. Great Panther’s second deal to start the year could be called a con-

solidation manoeuvre. The company announced in April that it would absorb Cangold, which was a gold-focused sister vehicle. In exchange Cangold shareholders received 0.05 of a Great Panther share. The main asset in the deal is the 60 sq. km Guadalupe de los Reyes goldsilver project in the Sierra Madre range in Sinaloa, Mexico. Around 14 months ago, Cangold — which was also helmed by Archer — signed an option agreement with Vista Gold (TSX: VGZ; NYSE-MKT: VGZ) that allows it to acquire a 70% interest in Guadalupe by paying US$5 million over three years. The company can pick up the remaining 30% by making a production decision and paying Vista another US$3 million. Historic workings at Guadalupe occur in a low-sulphidation vein system that extends over 1 km in strike length and at least 400 metres down-dip, with open mineralization and higher gold and silver grades possible at depth. According to a resource estimate released in 2013, Guadalupe

hosts 6.8 million indicated tonnes grading 1.73 grams gold and 28.7 grams silver, and 3.2 million tonnes of 1.49 grams gold and 34.9 grams silver in the inferred category. “It’s definitely a gold asset — and we initially tried to keep that commodity split — but it’s simply easier to get capital for development at higher share prices, and with cash flow,” Archer said. “Guadalupe isn’t the first gold asset we’ve looked at, and I think you’ve seen other primary silver producers moving in that direction. Previous operators had looked at several open pits, but these vein deposits are similar to San Ignacio and Guanajuato. It’s definitely better suited to underground mining.” Great Panther has traded within a 52-week window of 52¢ to $1.60, and closed at 56¢ per share at press time. The company reported cash and equivalents of $19 million at the end of March, and has 140 million shares outstanding for a $78.2-million market capitalization.

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15-06-17 5:12 PM

THE NORTHERN MINER

JUNE 22-28, 2015

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TNM Jun 22 2015 Issue.indd 12

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15-06-17 5:12 PM

THE NORTHERN MINER

JUNE 22-28, 2015

PROFESSIONAL DIRECTORY Rentals and Sales Sales and Rentals: of instruments for:

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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://www. 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

West Kirkland CEO talks development plans

For more event information, please go to: www.northernminer.com/events/

MEETINGS Jun 22 Jun 22 Jun 22 Jun 22 Jun 22 Jun 22 Jun 22 Jun 22 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 23 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 24 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25 Jun 25

Jaguar Mining. AGS African Gold Group AS First Mining Finance AG Montero Mining & Exploration AS Nortec Minerals AG Orsu Metals AG MAG Silver AGS Dynacor Gold Mines A Canadian Zinc AG EPM Mining Ventures AS Fortune Bay AGS Fortune Minerals AG Marathon Gold A St. Augustine Gold & Copper AG True North Gems AGS Vena Resources A Argex Titanium AS Corsa Coal AG Dios Exploration AG Dynasty Metals & Mining AG Euromax Resources AGS Karnalyte Resources AS Lithium Americas AG Panoro Minerals AGS Peruvian Precious Metals A Selwyn Resources AGS Kapuskasing Gold AG Delta Gold AGS Corsa Coal AS CB Gold AGS Panoro Minerals AG Gitennes Exploration AGS Harte Gold AS Seabridge Gold AG U308 AS Zazu Metals AG Atlanta Gold AS Challenger Deep Resources AGS Duran Ventures AS Eagle Hill Exploration AG Marilfil Mines AG Pure Nickel AGS Rio Silver AG Pedro Resources AG Alamos Gold S AuRico Gold S Formation Metals AG Gold Mountain Mining AS Quaterra Resources AG Verde Potash AS Abitibi Royalties AGS Aura Silver Resources AG Aurion Resources AGS Castle Mountain Mining AGS Catalyst Mountain Mining AGS CaNickel Mining AG China Minerals Mining AG El Tigre Silver AG First Point Minerals AGS Galantas Gold AS Golden Valley Mines AGS North American Nicke AG Nunavik Nickel Mines AG OBAN Mining AG

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

TNM Jun 22 2015 Issue.indd 13

PHOTO BY MATTHEW KEEVIL

West Kirkland Mining’s Hasbrouck gold project in Esmeralda County, Nevada. WEST KIRKLAND, From Page 1

Jones said during an interview “We were able to achieve the permitting option we wanted at Three Hills since the footprint for the mine was below the threshold of one square mile, and all the heap-leach infrastructure can go on patented lands,” he added. The Three Hills mine should operate for two years, followed by six years at the Hasbrouck mine, with combined production estimated at 567,000 oz. gold. An adsorption-desorption-recovery (ADR) plant is planned at Three Hills for stripping loaded carbon from both sites. Three Hills would be a run-ofmine heap leach operation using conventional open-pit mining. The operation would process material via a leach pad at up to 13,600 tonnes per day. A large-scale metallurgical test on uncrushed material predicts 79% gold recoveries. Meanwhile, Hasbrouck is designed as a 15,900-tonne-per-day heap-leach operation. Crushing is designed to be by a primary jaw crusher, two secondary cone crushers and a tertiary high-pressure grinding roll (HPGR). Metallurgical tests predict that the tertiary crushing should result in 72.9% average gold recoveries and 11% silver recoveries. “The big difference in the new study is how we sequence in the Hasbrouck deposit, and the metallurgical process is a really important component of that, since using the HPGR really brings up the gold recoveries,” Jones continued. “A lot of the work we did involved designing the dovetail of the two operations and how they

work together. We always knew Hasbrouck would take quite a bit of crushing, but we needed to figure out the economic returns on how far we wanted to go.” Initial capital expenditures to build Three Hills and the ADR plant are estimated at US$54.3 million. Further project investment of US$83 million in the first two years of production will be needed to build Hasbrouck. West Kirkland estimates that it could generate US$43.5 million in free cash flow from Three Hills to help fund the expansion. Three Hills hosts proven and probable reserves of 8.7 million tonnes grading 0.51 gram gold per tonne for 175,000 contained oz. Hasbrouck’s reserves total 32.3 million tonnes of 0.48 gram gold and 8.42 grams silver for 588,000 oz. gold and 10.6 million oz. silver. The project has a 26% internal rate of return and an after-tax US$75.3-million net present value at a 5% discount rate, assuming US$1,225 per oz. gold and US$17.50 per oz. silver. Processing would average 5.5 million tonnes of ore per year to annually produce 71,000 oz. gold. All-in sustaining costs are pegged at US$779 per oz. over the mine’s life. The next steps for West Kirkland are twofold. The company will proceed with EA permitting at Three Hills and initiate its EIS process at Hasbrouck, while advancing talks on project financing. Securing the capital to develop the mine could be tricky due to volatile equity markets and sub-par terms on debt facilities, but Jones has made a habit out of securing cash for

mine development. “I think the market is really kind of bifurcated right now. The retail investment market has completely evaporated, and average investors are just not looking at the mining sector at all. That’s really effected valuations. Now on the flipside senior investors see the opportunity, and recognize the depressed price levels and the low valuation on equities,” Jones says. “I mean when you have a PFSlevel study on a gold asset and you’re trading at a thirty-percent discount to net asset value that just smells of opportunity. I think the smart money is still playing, and the good projects always get financed,” he adds. And West Kirkland certainly has a collection of notable shareholders that could step up to the plate. The company has 294 million

shares outstanding, with institutions holding 76% of that total. Major investors include: U.S.based fund Sun Valley Gold, with a 25% equity interest; Liberty Metals & Mining, with a 14.3% equity interest; and U.K.-based fund Ruffer Gold, with a 10.2% equity interest. West Kirkland has traded within a 52-week window of 5¢ to 15¢, and closed at 6¢ per share at press time for a $17.7-million market capitalization. The company reported cash of US$2 million. “The plan right now is to be conservative with our expenditures. It’s not a market that’s paying for exploration, so we’ll be watching our bottom line closely. That being said we do see exploration upside at Three Hills, and a single year of additional production there would make an enormous difference on how our peak funding evolves,” Jones says.

West Kirkland Mining (TSXV:WKM)

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15-06-17 5:12 PM

JUNE 22-28, 2015

THE NORTHERN MINER

Newmont bulks up US presence via Colorado acquisition

NEWMONT MINING

Mills at Newmont Mining’s newly acquired Cripple Creek & Victor gold mine, 60 km southwest of Denver, Colorado. VANCOUVER — Denver- based Newmont Mining (NYSE: NEM) has been on the lookout for low-cost gold mines in favourable jurisdictions, and there likely isn’t a friendlier place for the company than its home state of Colorado. On June 8 Newmont announced a deal with AngloGold Ashanti (NYSE: AU; ASX: AGG) that would see it pick up the long-standing Cripple Creek & Victor mine, located 160 km southwest of Denver.

Newmont will buy the producing operation for US$820 million in cash and a 2.5% net smelter return royalty for gold production from all future underground ore. The acquisition will be funded with proceeds of an equity issuance and supplemented with cash from the company’s balance sheet. The Cripple Creek gold district extends over 18 sq. km and has produced more than 25 million oz. gold

since mining began there in the early 1890s. Today, Cripple Creek & Victor is the only major gold mine operating in Colorado and employs a non-union workforce of 550 people. “We look at all investments through the same lens and pursue those that create value, improve mine life and costs, and represent technical and social risks that we’re well equipped to manage. Cripple Creek & Victor meets each of these criteria while adding

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TNM Jun 22 2015 Issue.indd 14

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meaningful free cash flow to [our] portfolio,” commented president and CEO Gary Goldberg during a conference call. “We also see additional cost and efficiency improvement potential — based on what we’ve achieved at other operations in the last two years — and [the operation] is similar to our existing open-pit and heap-leach operations and located in a historic Colorado mining district, so we understand how it works and we know the neighbourhood,” he added. The current operation includes a surface heap-leach mine, though AngloGold was in the process of a US$585-million expansion that is two-thirds complete. Newmont expects to fund the rest of the development capital with Cripple Creek & Victor’s operating cash flow. The expansion includes a carbon-in-pulp mill to expand production, improve recovery in higher-grade ore and add capacity for an underground operation. The mill is up and running and could hit full capacity later this year, and the investment could extend mine life through 2026. According to AngloGold’s yearend report, Cripple Creek & Victor have total proven and probable reserves of 166 million tonnes grading 0.74 gram gold per tonne for nearly 4 million contained oz. Measured, indicated and inferred resources total 429 million tonnes of 0.73 gram gold for 10 million contained oz. All calculations were done under Australasian Joint Ore Reserves Committee standards. Newmont says the acquisition could tack on between 350,000 and 400,000 oz. gold per year to its production profile in 2016 and 2017, with all-in sustaining costs ranging from US$825 to US$875 per oz. AngloGold reported that Cripple Creek & Victor cranked out 41,000 oz. gold during the first quarter at all-in sustaining costs of US$1,059 per oz. “Clearly, we see opportunities to improve elements of the mine plan that can reduce mining costs, and then just getting involved in the project, and what’s remaining to be done ... particularly the heap

leach and ramping up the mill, and leveraging our capabilities,” Goldberg said. He added that the company has implemented “full potential” at operations, and says that “this is process where we can come in with different ideas to help improve and deliver sustainable costs and efficiency improvements.” The deal contrasts with Newmont’s recent portfolio manoeuvres, as the company had focused on vending non-core assets to stabilize its balance sheet and lower all-in sustaining costs. Newmont has generated nearly US$1.5 billion through asset sales over the past two years to drop its net debt by US$1.4 billion in the first quarter. During the first quarter Newmont produced 1.2 million oz. gold and 37,000 tonnes copper at all-in sustaining costs of US$849 per oz. gold and US$1.73 per lb. copper. The company reported free cash flow of US$344 million and net income of US$175 million, or US35¢ per share. Newmont expects to produce between 4.6 million and 4.9 million oz. in 2015 at all-in sustaining costs ranging from US$960 to US$1,020 per oz. On June 10 the company announced an underwritten stock sale to fund the deal, wherein it will issue 29 million shares for gross proceeds of US$682 million. The company reported cash and equivalents of US$2.6 billion to end the first quarter, and had nearly 500 million shares outstanding at press time for a US$12.2-billion market capitalization. “As we look at issuing shares, we went with a little below what the total amount would be needed to acquire the asset, to give the message that we do believe in the asset. The issuing of shares is earnings and cash-flow accretive to shareholders, and I think that’s an important message to convey,” Goldberg said. Newmont has traded within a 52week window of US$17.60 to US$27.90 per share. The company has jumped 25%, or $4.78 since January, en route to a $23.68-pershare close at press time.

15-06-17 5:12 PM

THE NORTHERN MINER

Endeavour ENDEAVOUR, From Page 2

east-trending structure containing up to 20,000 oz. gold near surface. After feeding the resource to the mill, it upped its exploration budget from US$2.6 million to US$4.6 million for 2015, in search for other opportunities. Reddy points towards the exploration targets, while standing above a vantage point overlooking the three main operating pits. From that angle it’s easy to appreciate the contrast between the red and orange weathered rocks below and the vibrant green forests along its flanks. The benches of the pit offers a perfect cross section of the deposit’s main shear zone — the product of a compressive event that occurred 2.1 billion years ago, when volcanoes and the adjacent sedimentary ocean basins were deformed, uplifted and sutured onto the West African craton. As the crust thickened, granitic intrusives were emplaced while large-scale brittle and ductile fault zones — such as the one at Agbaou — developed. Gold-rich fluids later migrated through the structures, leaving behind the prolific West African deposits in its wake. After the supercontinent Pangea broke up around 200 million years ago, the metal-rich terrain was split between South America and West Africa, with a large chunk staying in Côte d’Ivoire, and lesser parts divided among the rest. Despite this, most of the exploration activity has focused on neighbouring Ghana — now one of the world’s top-10 gold producers, generating 3.2 million oz. gold in 2013. “I certainly would expect there to be a lot more discoveries to be made in Côte d’Ivoire,” he says. “It’s one of the many reasons that make this place so attractive. There’s a lot of opportunity, and we’re building our experience by operating here.” Back in the boardroom at site, there’s discussion about Endeavour’s Hounde gold deposit, located 250 km southwest of Ouagadougou, Burkina Faso. The permitted project is ready for a production decision that Reddy says will be reached late this year. Endeavour estimates Hounde could produce 190,000 oz. gold per year over a 10-year mine life, with an AISC of US$714 per oz. gold. But the company’s main agenda is to tidy its debt load. After finishing the quarter with US$56.4 million in cash, Endeavour seized the opportunity to knock US$20 million off its US$300-million revolving credit facility. He says taking on the debt was a necessary move for Endeavour, allowing the company to ramp up production and drive down costs. “To us, our debt meant that we could finish building Agbaou, double the plant size at Tabakoto, develop its underground and do it all with one aim — to bring down our AISC,” he says. “So we’re on that avenue where we keep knocking our debt back, and we’re not shy about whether we can, it’s a no-brainer that we will.” He explains that Hounde can be funded internally, but wouldn’t be “logical” if gold prices hit below US$1,100 per oz. gold. “Once we’re at the end of the year, we’ll see if it makes sense whether we should move forward on Hounde or wait a little bit,” he adds. “Or perhaps there’s something else more worthwhile, or productionready, that we can go after.”

TNM Jun 22 2015 Issue.indd 15

JUNE 22-28, 2015

Lara drills good copper grades in Brazil Prospect-generator Lara Exploration (TSXV: LRA; US-OTC: LRAXF) has a portfolio of mineral properties across South America with some heavyweight partners, but its Curionopolis copper project in Brazil’s Para state seems to be the one generating the most buzz. On June 1, the company’s jointventure partner, Tessarema Resources, announced the results of a 14-hole, 2,157-metre diamond drill program at the project’s Osmar target. The intercepts were eye-catching, with highlights of 56 metres of 16.5% copper, 12 metres of 8.9% copper, 18 metres of 5.5% copper and 8 metres of 6.8% copper, at a 0.3% cutoff grade. Lara recently reported the results of four more drill holes, this time from the Galpao target, 500 metres southeast of the highgrade Osmar target. The results were also impressive, with one hole intersecting 27 metres averaging 4.4% copper and another hole returning 19 metres of 1.1% copper. Curionopolis has three exploration licences covering 155.4 sq. km within the Carajas district. Artisanal copper-gold workings and

drilling on the project in 2011 identified high-grade iron oxide copper gold (IOCG)-type copper- and gold-bearing breccias that the company says could be amenable to open-pit mining. Earlier work by Codelco before the project switched hands drilled 53.8 metres grading 9.6% copper and 29.1 metres of 4.6% copper. In 2013, Lara executed an option agreement with Tessarema. The latter can earn full interest in the project by funding exploration, developing mining operations, making US$2 million in cash payments and granting royalties to Lara of between 2% and 5%. Tessarema plans to release a resource estimate before year-end. Lara has a large multi-commodity portfolio of 12 projects and active exploration programs, funded by partners, in copper, gold, tin, coal, phosphates, potash, nickel, graphite and iron. At Liberdade, a copper project in Brazil, Lara is in partnership with Codelco and is intercepting near-surface copper-gold mineralization. The project is potentially a large, open-pittable Carajas-type IOCG system, and has a 1,200-by-350-metre footprint.

Mampon-Aboronye in Ghana; and Tongon in the Ivory Coast. Bennell has worked on a number of deposits in West Africa, including the gold deposits of Morila and Syama in Mali, Fayalala in Guinea and the Syola laterite nickel deposit in the Ivory Coast. Miles Thompson, executive chairman, president and CEO, also has a good track record. Before founding Lara Exploration, Thompson managed business development for South African gold miner Gold Fields, where he worked on joint ventures and acquisitions in the Americas, Africa and Eurasia. He also cofounded Reservoir Capital (TSXV: REO), a renewable energy developer, and Reservoir Minerals (TSXV: RMC), an exploration company, both based in southeastern Europe. Management could not be reached for comment before press time. Over the last year, the junior has traded within a range of 26¢ to 84¢ per share. At press time its shares were trading at 26¢. The company has 31 million shares outstanding. At the end of March, insiders held 10% of the company’s shares.

Codelco is funding drilling to earn 51%, and must deliver a minimum 500,000-tonne contained copper compliant resource to raise its stake in the project to 75%. Lara also holds a 2% net smelter return royalty (NSR). Lara has optioned its Corina gold project in Peru to Hochschild Mining for $4.15 million in cash and a 2% NSR. The companies say Corina is a highly prospective, low-sulphidation epithermal vein system. The property is close to Hochschildowned mines in the area. The management team at Lara has credibility in the industry. Vice-president of exploration Michael Bennell was AngloGold Ashanti’s (NYSE: AU) exploration manager at the Crixas gold mine in Gois state until June 2006. He also has a number of discoveries to his name. In Brazil, Lara credits him with finding the Boa Vista nickel deposit. The company also notes that while working for BHP between 1988 and 1999, Bennell was directly involved in discovering five gold deposits: Belahouro and Essakan in Burkina Faso; Kubi and

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15-06-17 5:12 PM

JUNE 22-28, 2015

THE NORTHERN MINER

Abitibi Royalties harnesses Internet for royalty searches BY TRISH SAYWELL

Two months ago, Ian Ball, the president of Abitibi Royalties (TSXV: RZZ; US-OTC: ATBYF), called up the CEO of a junior exploration company, who had staked ground with interesting mineralization, 1.6 km away from Barrick Gold’s Cortez gold mine in Nevada. Ball hoped to strike a royalty deal, but it turned out that his call was one week too late. With just $3,000 on the junior’s balance sheet, the CEO couldn’t pay the claim fees and had to relinquish the property. That phone call sparked an idea. “I realized that if he had to drop projects like that, there must be others out there,” Ball says, “and I wondered how I could get access to them.” The young mining executive decided that the Internet offered the best and fastest route to dig up new royalty deals, and hatched a plan — backed by his board of directors — to create an online platform where junior mining companies and prospectors could pitch their properties to Abitibi Royalties. In return for paying claim fees

Ian Ball, president of Abitibi Royalties. on existing mineral properties, or paying staking fees on new mineral properties, Abitibi Royalties would receive a net smelter return royalty (NSR). “Rather than having to sell out to a major, or drop the property or do a joint-venture on unfavourable terms, there is now an alternative,” Ball says. “A lot of juniors have valuable property but don’t have the money to keep them in good standing, and this gives them

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the luxury of time.” Ball notes that the large royalty companies typically don’t service this end of the market. “They look at development projects at a feasibility stage or that are already in production,” he says. “But no one is willing to go down to the junior miners and prospectors. No one was focusing on this niche.” Ball says he has a soft spot for prospectors. “They have some of the best ideas out there, but no one is willing to grubstake them.” Moreover, for a small royalty company like Abitibi, Ball says, it’s virtually impossible to compete against the bigger and more powerful royalty companies. “You can’t go into an auction process and expect to beat FrancoNevada,” he says. “And if you did win, it’s probably because you overpaid.” Ball credits part of the idea to the success 15 years ago of Rob McEwen’s innovative Goldcorp Challenge, which used the Internet

and the lure of $575,000 in prize money to find more gold at the company’s Red Lake gold mine in Ontario. “The Goldcorp challenge was the first time anyone in mining had done that, and nobody has picked up the mantle since then,” Ball says. “As an industry, we need to embrace the Internet for collaborative efforts, and we haven’t done as good a job of that as other industries.” Abitibi guarantees a response to a pitch within 48 hours. Ball emphasizes, however, that the company is looking for early stage properties that have good geology with known mineralization, and that are near an existing mine and have good access to infrastructure. Ball estimates that if Abitibi could acquire 20 or 30 such royalty deals via the Internet in this way, “maybe a handful of them could become successful” — and he says he’s comfortable with those odds. “Five years ago everybody had money, today nobody does,” he

adds. “When you’ve got $20,000 on your balance sheet, you’re trying to make every cent work.” And while there are many people in the industry who would prefer to see a lot of the marginal mining companies “disappear,” Ball says he isn’t one of them. “A lot of them are run by entrepreneurs who put their own money in them to try to keep them afloat … you have a lot of people working hard and working for no pay right now, and I think we should be helping people with good projects.” Ball says Abitibi will focus 80% of its deals in North America (and the rest in Central and South America), and 80% in gold. The online platform has gone live, and can be accessed via www. abitibiroyalties.com. Abitibi Royalties holds a 3% NSR on the Odyssey North discovery, Jeffrey zone and eastern part of the Barnat Extension, and a 2% NSR on parts of the Gouldie and Charlie zone at the Canadian Malartic mine in Malartic, Que.

Zenyatta hits PEA milestone at Albany

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An aerial view of the core shack at Zenyatta Ventures’ Albany graphite project in northern Ontario.

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TNM Jun 22 2015 Issue.indd 16

A positive preliminary economic assessment (PEA) on Zenyatta Ventures’ (TSXV: ZEN; US-OTC: ZENYF) Albany hydrothermal graphite project in northern Ontario shows the deposit could be a viable long-life, low-cost graphite producer. Given graphite’s ability to resist chemical corrosion and stay intact under temperatures of above 3,000°C, its uses include making components of energy storage devices for electric vehicles, computers and smart phones. The study shows Albany can produce 30,000 tonnes of highpurity (99.9%) graphite annually for 22 years, based on less than half of the deposit’s indicated and inferred resources. The project, envisaged as an open-pit operation, has 977,000 indicated tonnes of graphite from 25.1 million tonnes grading 3.9% graphitic carbon, and 441,000 inferred tonnes of graphite from 20.1 million tonnes at 2.2% graphitic carbon. Initial costs to build the proposed mine are US$412 million, a

hefty sum for any junior to raise. But, what stands out about the Albany project is its potentially large returns. Assuming a long-term price for purified graphite of US$7,500 per tonne, Zenyatta estimates operating costs at the Albany project of US$2,046 per tonne, giving it a 73% margin, or US$5,454 per tonne. The study shows the project generating strong gross revenues of US$4.8 billion over the mine’s life, and an after-tax cash flow of US$110 million a year. Albany’s economics are appealing. Using a 10% discount rate, it has an after-tax net present value of US$438 million and a 24% aftertax internal rate of return. Payback would occur within four years. Given the robust PEA results, Zenyatta’s CEO Aubrey Eveleigh says the junior will push Albany to a prefeasibility stage, where it will define and optimize the project, and update the resources to show economic viability. He says the firm will use the PEA to support its discussions with po-

ZENYATTA VENTURES

tential partners and financiers. The outlook for the high-purity graphite market “is very promising, with demand growing rapidly from new applications,” the company says. It projects that highpurity graphite demand in 2017 will total 426,000 tonnes. If Albany comes online and produces 30,000 tonnes a year, it could satisfy 7% of that demand. Zenyatta anticipates the graphite produced from Albany will go towards different market application segments, including 25–30% for lithium-ion batteries, 25-30% for high-purity graphite in powder metallurgy, 20–25% for fuel cell products and the rest in other applications. The Albany project is 30 km north of the Trans-Canada Highway and near the communities of Constance Lake and Hearst. Along with being near a major highway, it is 20 km from an all-season logging road and 70 km from a rail line. Despite the robust PEA released on June 1, the company’s shares have fallen 33%, or 76¢, to close June 3 at $1.54.

15-06-17 5:12 PM