BRUSA/BRCA December 2015

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DECEMBER 2015

A Year in Review RANKING OUR TOP 10’s Special Report RAGS TO RICHES: A KLONDEX STORY

“TO LEAD, ONE MUST FOLLOW.” —

LAO TZU, 604-531 B.C. What does this quote mean?

Surely the best leaders are not blind followers, but visionaries with the skill and determination to effectively articulate and execute that vision and build the right team to help make that vision a reality.

This much is true. But perhaps Lao Tzu meant that true leaders must also learn from the past, taking the lessons of others before them to help shape their own paths. With this in mind, as 2015 comes to a close, our December issue is dedicated to some of our top stories from the year past. As you read and learn from the year’s highlights and top leaders, start planning your own leadership path for the new year ahead.

Sasha Orman Editor Sasha.Orman@wdmgroup.com

CONTENTS

FEATURES

14 Leadership 2015 Year in Review

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SPECIAL REPORT The Top profiles of 2015

COMPANY PROFILES MINING

MANUFACTURING

28 Klondex Mines

82 G.I. Sportz

CONSTRUCTION 52 Archer Western Lake Livingston Hydro Project 62 Toledo Public Utilities

SUPPLY CHAIN

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TOP 10 of 2015

62 Toledo

28 Klondex Mines 82 G.I. Sportz

72 Knichel Logistics 5

THE TOP PROFILES OF 2015 Business Review USA/Canada dives into its premier profiles Written by: Business Review North America Staff

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T

SPECIAL R

his year we have delved into the histories and future plans of many great companies in all sectors across North America. Here is a taste of what 2015’s profiles had to offer:

clinical trials to even the most remote treatment-naive geographies.

Marken is 100% dedicated to the clinical research industry and a specialist in the transportation of investigational medical products and medical devices. In addition to services such as the storage and Marken distribution of clinical trial materials Sector: Healthcare and drug products to investigators Marken is the leading global clinical or the patients directly, Marken supply chain solutions provider maintains a leading position for the dedicated to the pharmaceutical and shipment of biological samples and life sciences industries, supporting offers additional services such as over 49,000 clinical investigators in shipment lane qualifications as well more than 150 countries. Marken as GDP, regulatory and compliance integrates depot and logistics into consultancy. solutions that extend the reach of “We have the edge on technology,

REPORT Walsh Construction Downtown Crossing Project

the know-how, the service and have global and regional agreements with almost all of the key players on the clinical side,” said [Marken CEO Wes] Wheeler. “We don’t just speak logistics, we speak pharma; we are not just transportation people, we are pharma people. We are 100 percent dedicated to this industry.

We’ll continue to make a lot of progress over the next 12 months.”

Walsh Construction Downtown Crossing Project Sector: Construction

Louisville is a lively modern city with a challenging traffic problem.

Built against the banks of the Ohio River, with only limited options of the I-64 and the I-65 bridges to cross the river to and from neighboring Indiana, traffic congestion is a constant problem for residents and commuters on both sides. That congestion is complicated even further by the tangled Kennedy Interchange—known locally as “Spaghetti Junction”—where the I-64, I-65, and I-71 merge on the Louisville side of the John F. 9

C O M PA N Y N A M E

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Kennedy Memorial Bridge that currently carries the I-65 over the Ohio River to Jeffersonville, Indiana.

In an attempt to solve this traffic problem, Kentucky and Indiana launched the Ohio River Bridges Project to build new pathways across the river and refurbish existing bridges. Chicago-based Walsh Construction Co. was selected to take on the ambitious

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December 2015

$860 million Downtown Crossing project, which will add a new sixlane bridge to the I-65 crossing and streamline the Kennedy Interchange.

Construction began in July of 2013 with completion scheduled for December 2016.

“It’s really the mobility across the river—for a river town, Louisville has limited river crossings here,” [said Joel Halterman, Walsh Construction Project Manager for the Downtown Crossing project]. “This will improve cross-river mobility, and really it’s

REPORT

SECTOR

going to improve congestion and it’s in the world, the company isn’t going to be a safer system.” finished yet.

With a major acquisition under Joy Global its belt, Joy Global is forging ahead Sector: Mining to expand horizons and establish As a leading provider of world-class a clear presence in a new market service and equipment, Joy Global for the company: hard rock. The is one of the biggest names in the company’s vision for the endeavor mining equipment sector. includes a central focus on The company specializes in operational excellence coupled with high-productivity solutions for a refined approach to safety and surface and underground mining. environmental stewardship.

Its machinery is used extensively for the mining of coal, copper, iron ore, Petro Star oil sands, gold and other minerals.

Sector: Oil and Gas And while Joy Global has already Petro Star Inc. was formed in 1984 established itself among the most to fill a unique role in Alaska’s innovative equipment manufacturers petroleum market. While other

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SPECIAL REPORT

Alaskan refineries were processing a wide variety of petroleum products, Petro Star’s founders recognized the need for a refinery that would process mid-end distillates such as heating oil, diesel and aviation fuels for homes and businesses in Alaska. Today, with over 30 years of experience serving Alaska’s unique fuel needs, Petro Star has evolved into a successful team of integrated companies, and remains the only locally-owned refining company in the state.

While it’s clear that Petro Star serves a very niche market in the region, it might seem at face value that they have little room to expand in Alaska without a dramatic

increase in demand. That is far from the case, according to [Mark John, Vice President of Business Development and Marketing].

“Room to grow for us means expanding our current production of similar products and actually looking at some new products,” he said. “Those products would be made from utilizing different parts of the barrel besides the diesel part, whether that’s the heavier part of the barrel or possibly the lighter end of the barrel. Alaska is driven by the price of crude so the economy here is dependent on that price, but we are definitely more in a growth mode now than we have been for a while.”

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LEADERSHIP

2015

5

YEAR IN REVIEW WHERE DID THE PAST YEAR TAKE US? W R I T T E N B Y: B U S I N E S S R E V I E W N O RTH A M E R I CA STA F F

LEADERSHIP 2015 was a busy year. Let’s look back at a sampling of the biggest topics from across North America.

Google restructures and launches Alphabet For years Google has enjoyed status as one of the biggest and most well known businesses in the world, and in 2015 Google became a part of something even bigger. In August Google co-founders Larry Page and Sergey Brin announced the creation of a new head company Alphabet Inc., launched to serve as the parent company for several enterprises including Google, YouTube, Calico and more.

16 December 2015

“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes,” said Page in a blog post. “But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.”

This restructuring was far from arbitrary. This shift allows each company under the Alphabet Inc. umbrella to be run as a separate subsidiary with a distinct CEO and management team. In the long run, this benefits the companies by giving them more freedom to grow and make decisions independently; meanwhile, it benefits shareholders

by allowing them to see the progress and successes of each individual brand more clearly.

Blackberry makes a comeback For years the Blackberry brand was at the head of the pack as the smartphone of choice for the business world. But as consumers started to favor touch screens and apps over PDA-style manual keyboards, Blackberry took a back seat to iOS and Android. Though it has retained diehard fans like Kim Kardashian West, analysts in 2014 analysts predicted that 2015 could spell the end of Blackberry for good.

But on the contrary, this year Blackberry is fiercely vying for a

comeback, launching the Blackberry Leap early on and the Blackberry Priv in September. The Blackberry Priv in particular has been picking up press for its incorporation of an Android operating system and its bold return to the keyboard format after years of trying to keep pace with the touch screen market.

Blackberry’s careful investments in security acquisitions have also paid off, as the latest phone is being praised for its privacy features like encryption and frequent updates to ward off malware and vulnerabilities— meaning that your private life and your business secrets will stay safe.

Blackberry could be looking at a return to the top of the executive game.

Canada hits a tourism high and an exploration low It has been a rollercoaster year for Canada in terms of financial progress, with distinct peaks and valleys from sector to sector. The travel and tourism industry for instance has enjoyed success throughout 2015: this summer US tourism to Canada hit a seven-year high, while Air Canada and WestJet set all-time single day records for passenger numbers 17

Solar Energy

thanks to strong marketing and steady improvements in customer experience.

But while leisure has seen success, Canada’s exploration industry has faced a challenging year marked by declining oil prices that have not yet seen a turnaround. It’s a decline that has led multinationals like Shell to abandon once promising oil sand projects, which in turn creates less demand for labor and a loss of jobs. The situation has been 18

December 2015

exacerbated further by the United States administration’s decision to TransCanada’s Keystone XL pipeline project, leaving the industry to wonder how it will progress in the year ahead.

A changing energy market In the United States, the state of energy in 2015 has been defined in large part by its increasing interest in the renewable market. In August the Department of Energy announced

LEADERSHIP TRENDS FROM 2015

that wind energy prices in the U.S. had reached an all-time low, and what’s more, there is more meaningful wind energy investment than ever before—up to nearly one full GW between wind turbines in the United States, Puerto Rico, and the Virgin Islands. From government agencies to household name corporations like Microsoft, everyone wants a piece of wind power.

It’s not just wind power that’s having a moment: interest in

solar power is also on the rise. In September the U.S. Navy inked a deal with Sempra to expand its Mesquite solar farm and substantially increase its reliance on renewable energy sources, and another major business—Google once again— has expanded its varying interests into solar energy for homes and businesses through Project Sunroof.

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TOP 10

TOP TENS

Written by: Sas

S OF 2015

sha Orman 21

TOP 10

As 2015 comes to a close, it’s time to look back and give some extra appreciation to the top people, places, and things we’ve taken time out to appreciate over the year. We covered a lot of ground in 2015.

Who came out on top?

vastness of the country’s national parks as our top pick.

10

In October we paid homage to the entrepreneurs and innovators responsible for our industrychanging technology, from social media tools like Instagram and WhatsApp to real world projects like Open Bionics and tech incubator JLABS. At the top we highlighted king of modern social media and household name Mark Zuckerberg.

Our Favorite Destinations (January)

There’s nothing like the holiday season to reflect on a proper worklife balance, so we’re starting off with our 2015 look at the best places to get away. Whether it’s a family trip or alone time, the occasional getaway is crucial to recharge and avoid burning out. In January we looked at top US destinations from Palm Springs to Maui, arriving at the

09

The Best Tech Innovators (October)

Mark Zuckerberg

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December 2015

TOP TENS OF 2015

08

Places to do Business (August)

We can’t say no to more travel, so in August we departed again to find the best places in the United States to do business. With high average revenues and prestigious big business neighbors, cities like Green Bay and Dallas caught our eye. But ultimately San Jose, home of Silicon Valley and tech giants from Apple to Cisco, took the top spot.

06

San Jose

07

who make their brands not only well known but essential to those who use them. February highlighted the top brands that keep Canada running, from the best performing company (Bombardier) to the most sustainable (Husky Energy). But the top brand to represent Canada should come as no surprise—Tim Hortons.

Our Favorite Brands (February)

Business is brands, and the top businesses in the world are those

Top Franchise Trends (June)

Who doesn’t love to look ahead to new trends on the horizon? In June we examined some of the top trends poised to influence the franchising industry. From increased technology and crowdfunding tactics to a rise in fitness gyms and home health care services, the top trends are all there.

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TOP 10 But the biggest trend by far this year was the rise of higher quality fast casual cuisine.

05

Female Powerhouses (March)

During Women’s History Month, we turned to ten executives making waves as leaders in Canada’s business world including Leslie Galway (CEO, WHSCC), Margaret Franklin (CEO, Kinsale Private Wealth Inc.), Mary-Lou Donnelly (President, Canadian Teachers’ Federation), and Anne Doig (President, Canadian Medical Association). Topping our list was Nathalie Bernier, associate director for KPMG and chairman of the

Nathalie Bernier

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December 2015

company’s Montreal management committee.

04

Business Celebrities (September)

In September we highlighted some of the top celebrity businessmen and women who have through their brands become household names in their own rights. These entrepreneurs include Mark Zuckerberg, Oprah Winfrey, and Elon Musk. But the top iconoclast is billionaire philanthropist and Microsoft founder Bill Gates.

Bill Gates

TOP TENS OF 2015

03

Business Schools (July)

For many executives, the path to success starts with the right education—but where should you turn? In July, we looked at some of the best business schools in Canada and the US. In Canada, business-minded young people are turning to institutions like

University of Ottawa’s Telfer School of Management and McMaster University’s DeGroote School of Business. In the US, those with an interest in supply chain mastery are looking to schools like MIT’s Sloan School of Management and Michigan State University’s Eli Broad School of Business.

Beaumont Tower, Michigan State

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02 CEOs to Admire (April)

Executives at the top of their game are the executives we can learn from. In April we took a look at the CEOs we admire most, from Salesforce’s Mark Benioff to Howard Schultz of Starbucks.

We saved the top spot for Apple CEO and Steve Jobs successor Tim Cook.

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December 2015

TOP TENS OF 2015

01

Game Changers (November)

Ultimately business is all about what’s new and what’s next, and our most recent Top 10 was all about those businesses that not brought something new to the table, but completely changed

the face of their industries. Netflix, Amazon, Twitter, Facebook, Kickstarter—they’re all here, and they’re all making the world a more interesting and face-paced place.

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Rags to Riches: A Klondex Story With a whirlwind of challenges and milestones in recent months, including the extraordinary achievement of acquiring its Midas asset, Klondex President and CEO Paul Huet discusses how his team achieved the impossible.

Written by: Robert Spence Produced by: Andy Turner

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K L O N D E X M I N E S LT D .

H

eadquartered in Reno, Nevada, Klondex Mines Ltd. is a mining company wellpositioned to further its two worldclass producing mineral properties: the Fire Creek project and the Midas mine and milling facility.

The company, which was recently approved to be listed on the New York Stock Exchange (NYSE MKT), has recently overcome a whirlwind 30

December 2015

of challenges and milestones, including the extraordinary achievement of acquiring its Midas assets. The story resembles a modern day tale of David and Goliath.

A natural fit Previously owned by Newmont Mining, the Midas mine was hitting the tail end of its life cycle, from both

MINING

a human resources and a capital perspective, becoming what’s known as a “non-core asset.”

“The acquisition was a natural fit, because not only would it add another producing mine to our portfolio, but it would also cement a long-term milling solution at Firecreek,” said John Seaberg, Senior Vice President, Investor Relations at Klondex.

But with a single asset at the time, the Fire Creek project in Northern Nevada, with no production and a strained balance sheet, Klondex

“The acquisition was a natural fit, because not only would it add another producing mine to our portfolio, but it would also cement a long-term milling solution at Firecreek” – John Seaberg, Senior VP, Investor Relations at Klondex.

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Major Drilling is a public company traded on the Toronto Stock Exchange operating in over 15 countries around the world with 2,500 employees working more than 6 million hours safely each year. Through extensive research and development, Major Drilling has the proven resources, experience, and technical ability to safely and productively executea variety of underground drilling & dewatering services.

MAJOR DRILLING = MAJOR SUCCESS Our team unites to produce experienced & unparalleled services: • Specializing in safety, quality and productivity • Offering many cumulative years of drilling experience and resources • Possessing extensive technical resources • Including self-sufficient mechanical and fabrication facilities

INDUSTRY LEADER IN TECHNICAL UNDERGROUND DRILLING AND DEWATERING SERVICES 700+ RIGS DRILLING • Underground Percussive • Dewatering • Underground RC • Reverse Circulation

• Mud & Air Rotary • Oil, Gas, and Coal • Directional • Environmental

• Diamond/Core • Man-Portable • Heli-Portable • Sonic

For any questions or additional information feel free to contact: Pat Bamford pat.bamford@majordrilling.com

+1 801 560 2338 +1 801 974 0645

www.majordrilling.com

• Grade Control • Longhole • Water Well • Pilot Hole

SUPPLIER PROFILE

Major Drilling is one of the world’s largest drilling services companies primarily serving the mining industry.

Major Drilling maintains field operations and offices in Canada, the United States, Mexico, South America, Asia and Africa. Major Drilling provides all types of drilling services including surface and underground coring, percussive long hole, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane and shallow gas.

Over the years, the Company has positioned itself as one of the largest specialized operators in the world by leveraging its main competitive advantages: specialized equipment, long-standing relationships with the world’s largest mining companies, access to capital, and skilled personnel. This positioning is strengthened by the Company’s senior management having experienced several economic and mining industry cycles.

We would like to thank Klondex for the opportunity to work at their work Class operations in Nevada. Utilizing our experience in engineering, research, and dedication, the team has been able to reduce dilution by more than 200% compared to previous methods utilized at Midas Operations. Through teamwork, we have successfully excavated longhole stopes as narrow as 18” by 50’ deep.

Paul Huet and his team’s willingness to try new things has allowed our groups to work together on creating a method of longhole that is cost effective, efficient and timely.

Management: Denis Larocque, President & Chief Executive Officer David Balser, Chief Financial Officer Denis Despres, Chief Operations Officer Kelly Johnson, Vice President Latin America & West Africa Larry Pisto, Vice President North America Website: www.majordrilling.com

K L O N D E X M I N E S LT D . was in a dire situation. In addition, they faced competition in the Midas transaction.

Newmont had signed a Letter of Intent (LOI) in September 2013 to sell the operation to another company.

As part of the deal, both parties agreed the LOI would be terminated

by October 14th, unless extended by mutual agreement.

But Klondex President, CEO and Director Paul Huet had a plan to tackle this uphill battle and never gave up. “When the LOI was signed

MINING

between Newmont and the other company, I never got discourage.

In fact, it fueled my motivation and forced me to work even harder,” he said.

Persistence conquers all things As a third generation miner, Huet’s upbringing in the mining industry has ingrained the CEO with a tremendous work ethic and matching attitude to work hard no matter what you do.

“I saw firsthand from my father the

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nationwide.

CONGRATULATIONS TO KLONDEX MINES. Business Insurance | Employee Benefits | Surety John Wayhart | jwayhart@assuranceagency.com | 847.463.7161

ASSURANCEAGENCY.COM

Minimizing risk and ilf maximizing health for our mining clients

K L O N D E X M I N E S LT D . work ethic needed to be successful in the mining industry,” said Huet.

“He just turned 70 years old and still wakes up every day at 4:30 a.m. to work at an underground mine. He doesn’t know how to fail and that’s our culture here at Klondex.”

Straight out of high school, Huet commenced his mining career as a mine site janitor for a local mine in Timmins, Canada, before eventually working his way through the ranks to earn supervisory mining positions with Kinross Gold in Timmins and Red Lake.

“I was very eager to learn and work hard, sometimes even drilling

SUPPLIER PROFILE

MINING

and operating after hours for free. It launched my path to being a miner and eventually earning the right and privilege to lead a company like Klondex,” he said.

While at Kinross, Huet was selected as part of a next generation leader program that granted him a scholarship to attend the Haileybury School of Mines in Ontario, Canada, while also paying his salary in the process.

“Mining helped paved my way through college, including helping me earn an MBA at Stanford.

I’m incredibly grateful for the opportunities the mining industry

ASSURANCE

Assurance is among the largest and most awarded independent insurance brokerages in the U.S. A “Top 50” broker and repeated national “Best Place to Work” winner, Assurance creates value by minimizing risk and maximizing health for 6,000 businesses and individuals across the country. The company is headquartered in Schaumburg, IL with centralized office locations in Chicago, IL and St. Louis, MO. Website: www.assuranceagency.com

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Superior Surface and Underground Exploration Drilling Diamond Core Drilling and Reverse Circulation Drilling Internationally Depth Capability Beyond 10,000ft

American Drilling Corporation is an industrial services company that provides superior surface and underground exploration drilling for both mining and geotechnical industries. An innovative privately owned company headquartered in the state of Washington, with additional offices in Mexico, Winnemucca and Elko, Nevada. Our mission is to provide safe, industry-leading drill performance an and expertise to our clients, through experienced drilling staff and strong management oversight. We pride ourselves with a fleet of world class, well maintained modern equipment regardless of the location or environment.

19208 E. Broadway Ave., Spokane Valley, WA 99016 Office: 509-279-2859 Fax: 509-769-0300

Email: adeeds@americandrillingcorp.com Web: www.AmericanDrillingCorp.com

OFFICES IN SPOKANE WA, ELKO NV, WINEMMUCCA NV AND MEXICO

American Mining and Tunneling LLC provides superior expertise and experienced services to the mining industry, from beginning stage exploration to end of mine life reclamation.

Our industry leading equipment and technical and operational management contributes greatly to our reputation for practical and innovative performance; resulting in the successful completion of complex, challenging mine development and construction projects.

www.AmericanMT.com

Our commitment to maintaining the highest safety standards and qualified personnel gives us the ability meet critical deadlines. Successfully completed projects are the reason why so many Mines have chosen AMT.

INDUSTRY LEADER IN MINING AND TUNNELING CONTRACT MINING MINE DEVELOPMENT SPECIALTY LABOR SHORT & LONG TERM RAISE MINING

American Mining & Tunneling 19208 E. Broadway Ave. Spokane Valley, WA 99016

ALIMAK INSTALLATION & SERVICE UNDERGROUND CONSTRUCTION SHAFT SINKING ENGINEERING & TECHNICAL SERVICES

Office 509-921-7836 Fax 509-769-0300 Email: info@americanmt.com

OFFICES IN SPOKANE WA, ELKO NV, WINEMMUCCA NV AND MEXICO

THE MINING INDUSTRY HAS OPENED A LOT OF DOORS ON THE EDUCATION SIDE FOR ME, BUT IT’S ALSO HELPED ME ESTABLISH A LOT OF CONTACTS -CEO Paul Huet

SUPPLIER PROFILE

AMERICAN DRILLING CORP, LLC

American Drilling Corp is a privately owned drilling services company headquartered in Spokane Valley, Washington. The Company provides specialty drilling services through its US divisions in Elko, Nevada and Spokane Valley, Washington. We have become the recognized performance leader by setting the highest standards in service, reliability, safety and cost containment in our industry. We believe that a “safety first” company culture combined with creative flexibility are the key elements to success in providing drilling services to companies such as Klondex Mines and other leading gold and silver producers.

It is our pursuit to always demonstrate our commitment to integrity in all aspects of our operations and business conduct.

American Drilling Corp combines modernized industry leading equipment with experienced technical and professional operational staff resulting in completion of complex challenging drilling projects.

American Drilling Corp, LLC, 19208 E. Broadway, Spokane Valley, Washington 99016 Further information about the Company can be found on the American Drilling Corp Website: www.Americandrillingcorp.com

MINING

has presented,” said Huet.

One of those opportunities consisted of working for Newmont Mining from 2000 to 2007, which saw Huet serve various senior capacities, including Mine Superintendent and Mine Manager, at their Midas mining operation.

“The mining industry has opened a lot of doors on the education side for me, but it’s also helped me establish a lot of contacts,” Huet explained.

“Many of these contacts have been critical to driving Klondex from a small exploration company to a significant junior mining company.”

To successfully acquire Midas against

SUPPLIER PROFILE

Paul Huet President, CEO and Director

AMERICAN MINING & TUNNELING, LLC

American Mining and Tunneling LLC is a privately owned mining services company headquartered in Spokane Valley, Washington. The Company provides mine development and construction services to the mining industry ranging from beginning stage exploration to the end of mine life reclamation.

We are a recognized performance leader, setting the highest standards in reliability, safety and cost containment in our industry, while providing services to companies such as Klondex Mines and other leading gold and silver producers. American Mining and Tunneling combines modernized industry leading equipment with experienced technical and professional operational staff resulting in completion of complex challenging mine development and construction projects.

International services are provided through our North American divisions in Elko and Winnemucca, Nevada, Spokane Valley, Washington and Hermisillo, Mexico. Emphasis at American is on maintaining the highest quality and experienced personnel supported by a “safety first” companywide culture.

Further information about the Company can be found on the American Mining and Tunneling website Website: www.Americanmt.com w w w. k l o n d e x m i n e s . c o m

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Quality Transportation, Inc.

Our Name Says It All! Quality Transportation, Inc 1110 Muleshoe Road Battle Mountain, NV 89820 Office: 775-635-2443 Mobile: 775-635-9540 Email: jdavis@qtinv.net

www.qtinv.net

“Proud to be a partner with Klondex Gold & Silver Mining!”

K L O N D E X M I N E S LT D .

MINING

very stiff competition, Klondex needed to raise money – more money than the entire value of the company at the time. In the face of this nearly insurmountable task, Huet and his team set to work.

Huet’s relationship with senior members of Franco-Nevada, Pierre Lassonde and David Harquail, was the key in getting the deal done.

“I knew Pierre when I worked with him at Newmont, and I basically informed him of my intent to buy Midas and explained how acquiring it would be a perfect marriage of assets with our Fire Creek asset.”

While not easy, Paul and his team were able to raise three forms of funding: $42.6 million in equity, $25 million in debt, and a $36 million gold loan from Franco-Nevada.

Ore from the Fire Creek project in Northern Nevada

SUPPLIER PROFILE QUALITY TRANSPORTATION Quality Transportation was formed in 2012 by Shane Davis (president) and John W. Davis (secretary treasurer). With our operation manager Jerry Lanphear, we have a combined industry experience of over 60 years.

We cater to the mining industry in northern Nevada with Klondex being one of our biggest contracts, Ridge and Halliburton.

Website: www.qtinv.net

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TRUST THE NUMBERS SANDVIK 365. PARTS AND SERVICE YOU CAN COUNT ON. People tell you stories about quality, commitment and innovation. But for the real story, take a close look at the numbers. In an industry where an hour of downtime can cost thousands, a Sandvik 365 parts and service agreement can save you millions, with around-the-clock service, qualified engineers and original quality parts on demand.

Our new Sandvik RD500 series of rock drills can improve productivity by 55% and reduce operating costs by 30%. It’s efficiency you can count on.

Want to know what you can count on saving with Sandvik 365?

Find out more at mining.sandvik.com/sandvik365.

Test results are to be considered as results reached under certain and controlled test conditions.

These test results should not be treated as specifications and Sandvik does not guarantee, warrant or represent the outcome of test results in any or all circumstances.

MINING.SANDVIK.COM

K L O N D E X M I N E S LT D .

MINING

“We were able to raise more than $100 million, which is very uncommon of for a company our size, especially in this environment,” explained Huet. “We never gave up. We were able to get all the right people on board, and connect with all the right partners.”

As a result of that persistence, Klondex acquired the Midas Property in February 2014 from Newmont Mining, which included the underground gold and silver mine, the Merrill Crow processing facility, related support infrastructure and mining and milling equipment.

“The acquisition of Midas would not have been possible without Paul’s past experience and relationships in the mining sector,” said John Seaberg, Senior Vice President, Investor Relations for Klondex.

SUPPLIER PROFILE

The portal to the Fire Creek project in Northern Nevada

SANDVIK MINING

Employees: 12,000 Established: 1862 Industry: Sandvik Mining is a business area within the Sandvik Group and a leading global supplier. of equipment and tools, service and technical solutions for the mining industry.

Services: The offering covers rock drilling, rock cutting, rock crushing, loading and hauling and materials handling. In 2014 sales were about 27,000 million SEK. Management: Björn Rosengren - CEO Sandvik , Scot Smith, - President Sandvik Mining, Paul Painter- US Sales Area Manager Sandvik Mining Website: www.mining.sandvik.com

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Your Partner in Health.

We are dedicated to providing your employees with access to high quality doctors and hospitals.

Anthem Blue Cross and Blue Shield is the trade name of: In Colorado: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc. In Connecticut: Anthem Health Plans, Inc. In Georgia: Blue Cross and Blue Shield of Georgia, Inc. In Indiana: Anthem Insurance Companies, Inc. In Kentucky: Anthem Health Plans of Kentucky, Inc. In Maine: Anthem Health Plans of Maine, Inc. In Missouri (excluding 30 counties in the Kansas City area): RightCHOICE® Managed Care, Inc. (RIT), Healthy Alliance® Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain affiliates administer non-HMO benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc. RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits. In Nevada: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc., dba HMO Nevada. In New Hampshire: Anthem Health Plans of New Hampshire, Inc. Anthem Health Plans of New Hampshire, Inc. HMO plans are administered by Anthem Health Plans of New Hampshire, Inc. and underwritten by Matthew Thornton Health Plan, Inc. In Ohio: Community Insurance Company. In Virginia Anthem Health Plans of Virginia, Inc. trades as Anthem Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for the City of Fairfax, the Town of Vienna, and the area east of State Route 123. In Wisconsin: Blue Cross Blue Shield of Wisconsin (BCBSWi), which underwrites or administers the PPO and indemnity policies; Compcare Health Services Insurance Corporation (Compcare), which underwrites or administers the HMO policies; and Compcare and BCBSWi collectively, which underwrite or administer the POS policies. Independent licensees of the Blue Cross and Blue Shield Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.

CA15110024341497

KEEPING KLONDEX EQUIPMENT FUELED AND RUNNING SMOOTH

Get the same world-class service as Klondex with cardlock, bulk fuel, and lubricants from Flyers.

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K L O N D E X M I N E S LT D .

“No one knows this asset better than Paul. His relationship with Pierre was instrumental to getting this deal done,” Seaberg said.

“The acquisition was transformational for us, and it occurred during a pivotal point in our company’s development,” added Huet. “To this day, raising $100 million is one of the biggest highlights of my career. On my

MINING

deathbed I’ll be talking about it.”

Klondex moving forward Before Huet’s arrival, Klondex was in bad shape—owing more than six million dollars to vendors with only $400,000 in the treasury, the company had negative working capital. Today, Klondex possesses two of the highest grade gold mines in the world, with $60 million in cash,

w w w. k l o n d e x m i n e s . c o m

47

MINING AND DRILLING SUPPLIES. WHEN YOU NEED THEM, WHERE YOU NEED THEM!

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– Manufacturing high quality wire mesh since 1958 in accordance with specifications outlined in astm a185 for the mesh, and astm a82 for the wire.

Stocked in standard styles an sizes, and available in and custom spacing and wire diameters.

– Manufacturing oil & grease products since 1998 with several lubricating grease plants in the US. Producing mainstream products such as lithium complex greases and specialties products su as polyurea, calcium such sulfonate, and aluminum complex greases.

– Since 1985, Robit has been on the front line of the drilling business, providing high quality drilling tools for mines, quarries, and construction sites gl globally.

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Established in 2008, our company is built on the values of safety, professionalism, hard work, respect and teamwork.

We are specializing in Earthwork, Environmental Reclamation, Road Building, Piping, Transportation, Mill/Crusher Maintenance, Concrete Work and Small Commercial.

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www.remingtonconst.com

445 Fifth Street Elko, Nevada 89801 License #71192 A License #74810 B-2

K L O N D E X M I N E S LT D . a market cap of approximately $400 million and over 300 employees.

Under the leadership of Huet, the company continues to deliver on its promises.

“Our production guidance at the beginning of the year was 120125,000 gold equivalent ounces.

MINING

We raised that number in the second quarter and just recently raised it again to 130-135,000 gold equivalent ounces,” said Huet. “It just goes to show that hard work and surrounding yourself with a great team can help you achieve the impossible.”

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K L O N D E X M I N E S LT D .

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December 2015

MINING

Klondex continues to develop and understand its assets, especially with Midas. The company recently discovered additional reserves at the deposit, potentially extending the life of the mine.

“A lot of the market thinks Midas is over and that it’s reached its peak, but we’ve just begun,” said Huet. “I’ve never seen a mine like Midas.”

Fire Creek, the company’s other prized asset also continues to show significant upside potential. The company is currently operating an ongoing bulk sampling program, and shipping all mineralized material to its Midas Mill.

“There’s still 93 percent of the deposit untested,” Seaberg said. “We have only scratched the surface with Fire Creek.”

Along with furthering operations, Klondex remains steadfast on safety. The company recently achieved two significant safety milestones; three years of no loss time accidents at Fire Creek and one year of no loss time accidents at Midas.

“The correlation of safety and productivity go hand in hand,” said Huet. “If you get safety right, you get operations right.”

Along with being listed on the NYSE MKT in October, Klondex Mines continues to gain momentum and has the potential to become a real powerhouse in the mining industry for years to come.

“We’re not forced by the market or shareholders,” explained Huet. “We’re doing what we set out to do, and that’s make money while becoming a major player.”

Company Information INDUSTRY

mining HEADQUARTERS

360 Western Road, Suite 1 Reno, Nevada, United States, 89506 EMPLOYEES

Not Disclosed REVENUE

Not Disclosed PRODUCTS/ SERVICES

Exploration, mining

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Archer Wes Livingston H

Hydro Power com

How the Lake Livingston Hydro Plant projec to the Lone Written by: Sasha Orman

stern Lake Hydro Plant

mes to East Texas

ct is bringing innovation and energy diversity e Star State Produced by: Tom Venturo 53

ARCHER WESTERN LAKE LIVINGSTON HYDRO PLANT

Temporary intake structure at Cofferdam 2

W

hen it comes to power sources, Texas is well known as a land of oil and natural gas. But with a fluctuating market and complex consumer demands, diversification is more important now than ever before. To add range to Texas’s energy supply, the state brought in the expertise of Archer Western Construction, one of the biggest and most experienced hydro plant builders in the United States. Through a partnership with the Trinity River Authority and East Texas Electric Cooperative, Archer Western’s $100 million 24-megawatt (mW) Lake Livingston Hydro Plant project is on track toward providing 54

December 2015

east Texan homes with a greener source of power.

The perfect place to build Hydro plants are a relatively uncommon sight in Texas. But when the perfect location presented itself, the partners behind the Lake Livingston Hydro Plant project seized the opportunity to bring the state more green energy. That location is Lake Livingston, an eastern Texas reservoir along the Trinity River that provides around 71 percent of Houston’s water supply.

“The Trinity River runs right through the middle of Lake Livingston, and for every gallon of

CONSTRUCTION

Powerhouse, pre-excavation water that comes into the lake, they have to let a gallon out to go down to Houston,” says Andy Pettit, assistant project manager for Archer Western’s Livingston Hydro Plant project. As Pettit explains, this project will route water through the hydro plant instead of directly through the dam, taking advantage of the flowing water as a source of power generation.

“There’s always going to be energy being made,” he says. “If it’s low flows, there might just be one gate at the hydro plant open and the dam closed off; with high flows, all three gates at the hydro plant might be opened with some gates of the dam as well. But because this is Houston’s main source of water, it’s never going to stop.”

“We’re one of the biggest hydro plant builders in the country.

As a company as a whole, we have built hydro projects all over the country” – Andy Pettit, assistant project manager for Archer Western’s Livingston Hydro Plant

The Archer Western difference In a state like Texas where water resources are w w w. w a l s h g r o u p . c o m

55

Contact Us : 108 E. 82nd Street Lubbock, TX 79404 806-745-7720 5000 Martin Street Fort Worth, TX 76119 817-654-1618

Acme Electric Company, founded in 1958, works throughout Texas and Oklahoma. Projects include Water/Wastewater Treatment Plants, Medical Centers/ Hospitals, Educational Facilities, various projects with the US Corps of Engineers, Multistory Buildings, Retirement Centers, and State Correctional Facilities.

www.acmeelectriccompany.com

SMITH PUMP COMPANY, INC.

WWW.SMITHPUMP.COM Pump & Pumping Systems Specialists Since 1962

Quality Products Quality People FT. WORTH

AUSTIN

4624 M. L. K. Fwy

1900 West Howard Lane

817-589-2060

512-310-1480

Ft. Worth, TX 76119

Austin, TX 78728

WACO

Corporate Office

301 M & B Industrial Waco, TX 76712 254-776-0377

SAN ANTONIO

HOUSTON

13126A Lookout Ridge

5750 N. Sam Houston

210-656-0530

Houston, TX 77032

San Antonio, TX 78233

Pkwy E. Suite 1103 713-997-8647

CONSTRUCTION

limited, a hydroelectric plant must be built for maximum effectiveness and efficiency. This means bringing in the best in the hydroelectric plant construction business to ensure that the project is up to the highest standards. To achieve this, the East Texas Electric Cooperative and the Trinity River Authority turned to the expertise and experience of Archer Western.

“We’re one of the biggest hydro plant builders in the country,” says Pettit. “As a company as a whole, we have built hydro projects all over the country.”

While Archer Western’s Texas division has substantial experience in plant work, from concrete to mechanical work, the Lake Livingston Hydro plant project marks its first hydroelectric plant project. But the division is not navigating

Forming the barreled reinforced concrete penstocks

Forming the barreled reinforced concrete penstocks w w w. w a l s h g r o u p . c o m

57

www.mcknightconstruction.com

OUR GOAL Our goal is to help you design and build your structure with the best materials in a timely and professional manner.

Metal Homes & Cabins

Metal Buildings & Roofing

Hay Barns & Horse Barns

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CONTACT :

Robby McKnight – Owner Cell: 936-675-2642 Office: 936-867-4282 Fax: 936-867-4287 Email:mcknightconstruction1@yahoo.com

LOCATION:

3842 Cheeseland Road Pollok, TX 75969

MAILING ADDRESS: PO Box 757 Wells, TX 75976

CONSTRUCTION

uncharted waters alone—it is able to draw from the extensive knowledge of its divisions nationwide.

“Here in Texas we stay in close contact with people working on the other hydro plants. There’s one in Kentucky right now, and one in Pennsylvania as well,” says Pettit.

“We have them come down about once a year and we sit down for meetings to go over what they’ve learned from building their own hydro plants.” By pooling this information, Archer Western is able to bring clients the best and most cutting edge facilities in every frontier.

Opportunities for innovation The biggest benefit of the knowledge network that Archer Western brings to the Lake

Livingston Hydro Plant project is the ability to find new innovations for the hydro plant model. This has led to a project with unique features that combine added strength and efficiency. One key innovative feature in the Lake Livingston Hydro Plant project is its penstocks connecting the intake structure to the powerhouse.

“Typically they will be steel pipe with a lining on the inside. Originally we had 14 foot diameter steel pipes running 2,000 feet from the intake to the powerhouse,” says Pettit. “Through value engineering, that ended up being changed to reinforced concrete penstocks, a big 3-barreled box culvert. It’s my understanding that these are the first concrete penstocks ever.”

Changes to infrastructure are

Lake Livingston hydroelectric plant project in progress, July 2015 w w w. w a l s h g r o u p . c o m

59

ARCHER WESTERN LAKE LIVINGSTON HYDRO PLANT

Penstock monolithic wall deck pour required four walls and one deck via crane and bucket 60

December 2015

CONSTRUCTION

not done without good reason, and the concrete penstocks introduced with the Lake Livingston Hydro Plant project bring with them considerable benefits including significant cost savings to East Texas Electric Cooperative, given that steel pipes must be welded, coated, and placed in special bedding for protection from the elements.

The structure of the concrete penstocks adds increased longevity, so that East Texas Electric Cooperative consumers will be able to enjoy the benefits of the hydro plant for decades to come.

Company Information INDUSTRY

Hydro power plant HEADQUARTERS

929 West Adams Chicago, IL, USA, 60607 BUDGET

Working together on a brighter future With plans in design underway, there is still plenty of work left to do. Working with suppliers and subcontractors like Gracon LLC on plans to set turbines and generators in place, Archer Western is on track to complete its Lake Livingston Hydro Plant project by 2018. These partnerships are a vital part of the building process.

“We always communicate with them and value their input on everything and work together,” says Pettit of working together with partners toward a common goal. “We work together to come up with the best solution.”

The results of that teamwork and effort upon completion will be 12,000 homes in East Texas powered by hydroelectric energy. In a world where diverse energy sources are needed, it’s an important step forward for hydro power and for Texas.

$100 million

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Toledo Department of Public Utilities Overcoming obstacles

Facing major infrastructure problems, including a nationall Director Ed Moore discusses how he and his team were ab quality of life for citizens moving forward.

Written by: Robert Spence Produced by: Tom Venturo

t

ly covered drinking water advisory, ble to right the ship to improve the

63

C O M PA N Y N A M E

Ottawa River storage facility

W

hat a difference a year makes: In August 2014, the Toledo DPU advised half a million people in the area to not drink their tap water due to a toxin detected in the water supply.

A state of emergency was declared and residents were without drinking water for nearly three days.

“The do-not-drink advisory is a big 64

December 2015

part of our story, because it became a catalyst for change,” said Toledo’s DPU Director Ed Moore.

While residents have since returned to normalcy, it’s been a different story for the utilities department. Over the past year, DPU has launched a slew of programs and initiatives to upgrade infrastructure in order to ensure the contamination

SECTOR

issue never occurs again.

Plan of attack According to Moore, the utilities department in Toledo had been falling on hard times in recent years, with decreased funding for capital projects and infrastructure. This resulted in a significant amount of deferred maintenance.

“In 2013, with the help of the Ohio Environmental Protection Agency, we went to the city council and received a water rate increase for capital improvements. We initiated $314 million in bonds through the rate increase, assigned $264 million for the drinking water plant, and the other $50 million to the water distribution system,� said Moore. w w w. t o l e d o . o h . g o v

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T O L E D O D E PA R T M E N T O F P U B L I C U T I L I T I E S

Large diameter pipeline “The original plan was to stretch all the improvements over a 20year period, but the Ohio EPA was seriously concerned about the condition of the drinking water plant and condensed the plan down to five years.”

Faced with this quick turnaround, DPU needed to be highly organized and efficient to meet its goals.

“That’s why we hired Warren Henry to lead the water treatment improvements program,” said Moore. “He basically quarterbacked this initiative and turned things around, including our relationship with the Ohio EPA.” “He called me after the drinking 66

December 2015

water advisory and offered to help.

When a guy like Warren calls, you get him started working right away.

Warren played a big part in what we did and I give him a lot of credit,” Moore said.

Implementing change While plans may have been in the works, the do-not-drink advisory threw into sharp relief how critically Toledo needed these vital upgrades to improve the quality of life for the community. The first step toward change for DPU was getting the donot-drink advisory lifted.

Since then, it has been a beehive of activity with almost as

CONSTRUCTION

Dearborn project many contractor personnel as city employees at the water treatment plant. The department immediately updated its treatment protocol using a combination of chemicals to treat Lake Erie water. “We quadrupled our powder active carbon, quadrupled the potassium intake and activated an early warning system with a buoy that serves as a floating weather system,” said Moore.

DPU also convened a Blue Ribbon Panel of nine national experts to review long-term plant improvements to remove algae toxins. The panel recommended a process that pushed the City of Toledo into the future of water treatment. “They

came in and validated everything we were planning to do. Additionally, the panel recommended we add ozone to our plant, which is the big gun for the microsystin toxin. It’s basically creating lightning in a bottle and electrifying our water. It’s been around but it’s very expensive.”

Taking it a step further, the department has invested approximately $12 million in a new chlorination facility at the treatment plant that will allow more chlorine to be stored on site and injected in more locations along the treatment process, which should prevent future undesired scenarios from happening again. w w w. t o l e d o . o h . g o v

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5177 Richmond Avenue Suite 530, Houston, TX 77056

Utegration strives to be the “Standard of Excellence” in delivering value, quality, and innovation with an unmatched level of accountability, collaboration, and integrity to our clients.

Utegration provides consulting and advisory services to Energy, Utilities, and Public Sector clients who are looking to harness the power of SAP solutions to operate as real time businesses and be data driven companies. We help them to identify opportunities for preventive, predictive, proactive, and innovative problem solving to increase their competitiveness and customer in satisfaction levels.

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Built to deliver a better world MAKING OUR WATERS CLEANER Since the Toledo Waterways Initiative began in 2002, much progress has been made to protect and preserve our local water bodies.

We’re proud to partner with the City of Toledo to deliver social, economic and environmental benefits to the community for years to come.

Ronald Simons, Program Manager +1 248.918.7571 www.aecom.com

CONSTRUCTION

In the end, the do-not-drink advisory was a major learning experience for all of the agencies involved. The silver lining of the ordeal is the department has an established protocol for procuring consistent sampling, which is now being used as a model statewide.

Toledo Waterways Initiative Upon citizen approval in 2002, and in compliance with the city’s consent decree, DPU is in the midst of the Toledo Waterways Initiative (TWI), a massive water pollution control project to upgrade sewer infrastructure and reduce overflows into area waterways that will cost in excess of $500 million.

Led by Julie Cousino, Program Administrator of TWI, the initiative is nearing completion after more than a decade since its inauguration.

TWI aims to reduce contaminants in local rivers, streams and Lake Erie by building several types of structures to hold, separate or divert storm and waste water during periods of heavy rain. This water is then funneled for treatment before being returned to the waterways.

Completed in 2006, phase one of

TWI consisted of improvements to the water reclamation plant with the addition of a wet weather facility with cutting-edge technology, including a 25 MG equalization basin that doubled the capacity of the plant.

Phase two was completed in 2014 and included the elimination of all known sanitary sewer overflows.

The third portion of the program, which is currently underway, involves the reduction of combined sewer overflows. The largest project for this portion of TWI includes a 36 MG underground storage basin.

“The Toledo Waterways Initiative is one of the most innovative initiatives I’ve been a part of,” said Moore.

“This program will allow us to have w w w. t o l e d o . o h . g o v

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T O L E D O D E PA R T M E N T O F P U B L I C U T I L I T I E S

Collins Park settling basin a platform to build upon and set the stage for continuous improvements down the road.”

With the completion of construction in 2020, Cousino said, “TWI will eliminate approximately 650 MG of untreated sewage from entering Toledo’s waterways annually. That’s an 80 percent reduction in overflow volume.”

“Julie Cousino has been paramount for us and has ensured that all portions of the project are completed on time and on budget,” Moore said.

Moving forward “Since the advisory, there have not only been massive capital 70

December 2015

upgrades and investments” said Henry, “but the City has improved communications with the public using social media and the City’s website.” To ensure transparency among residents, earlier this year DPU began implementing a realtime dashboard posted on the city’s website that closely monitors water conditions in the intake crib in Lake Erie.

“One of the biggest benefits of the water-quality dashboard is that it dispelled rumors about drinking water conditions on a daily basis,” said Moore.

The system records the current status of drinking water quality based on Ohio EPA guidelines. The

CONSTRUCTION

scale consist of: • CLEAR: not detected in the intake crib in Lake Erie and in tap water • WATCH: microsystin detected in the intake crib in Lake Erie but not detected in tap water • CAUTION: microcystin detected in tap water, but test results do not indicate the need to issue an advisory; additional testing and sampling underway and water treatment has been accelerated • PRE-SCHOOL ADVISORY: do not drink for children five and younger.

• DO NOT DRINK ADVISORY: do not drink for all citizens “We have an advanced warning system for early detection with buoys and sondes that allows us to implement operational changes, prior to the microcystin reaching the Collins Park Water Treatment Plant,” said Moore.

In addition, the drinking water advisory also revealed a lack of communication with interdepartmental agencies. Therefore, DPU has developed a text message and email system that links all regional community partners with instant communication.

DPU brought in industry experts, business community members and academia to brainstorm together. “All the ideas and recommendations came out of the stakeholder group. This group will continue to play a vital role in restoring the public’s confidence in our water system,” Moore concluded.

Company Information INDUSTRY

Municipal Water and Sewer Utility HEADQUARTERS

420 Madison Avenue, Suite 100, Toledo, Ohio, United States, 43604 FOUNDED

1873 EMPLOYEES

Approximately 600 REVENUE

Approximately $150 million annually

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Knichel Logistics

A company culture where everyone is family Knichel Logistics has been rising quickly in the industry, led by CEO Kristy Knichel Written by: Eric Harding

Produced by: Jason Wright 73

KNICHEL LOGISTICS

OTR department

K

risty Knichel had a unique upbringing as the daughter of a successful CEO. In turn, she has come full circle to lead her own unique company that continues to solidify its spot in a very competitive and ever changing thirdparty logistics (3PL) environment.

Western Pennsylvania-based Knichel Logistics has positioned itself as a best-in-class 3PL company, with a strong focus on intermodal rail and a reputation of superior service for its customers.

Through this, Knichel has become one of the industry’s fastest-growing 3PLs by offering customized 74

December 2015

solutions, priding itself on excellent customer service and recognizing its employees are the backbone of the business.

A new era After the company was founded in 2003 by her father William Knichel, Kristy Knichel took over the family business as President and CEO following her father’s retirement in 2007.

Since then, Knichel has won the Business Woman First award from the Pittsburgh Business Times, the Distinguished Woman in Logistics award from the Transportation

S U P P LY C H A I N

Intermodal department Intermediaries Association, and also wrote an article about her experiences in the business featured in Forbes Magazine. The company was also recognized on the INC 5000 list in 2012 as one of America’s fastest-growing companies.

But Knichel hasn’t had the motivation to achieve this all on her own. There’s always been something else pushing her in the back of her mind.

“What drives me the most is proving to myself and to my father that I can do this,” said Knichel.

“It’s a male-dominated business that we’re in, so I have to push myself harder to be on the same playing field and earn the respect of others in the industry.

“I know that’s why my father was hard on me.

But I can’t complain.”

“Employees are the backbone of my business.

Without my people, we would not be here today. The number one reason I am successful is because of my people” – Kristy Knichel, Knichel Logistics CEO

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KNICHEL LOGISTICS

– Kristy Knichel, Knichel Logistics CEO

ATADEX

People first Knichel has taken a very specific path to achieve such great success. It begins with Knichel Logistic’s investment in people. Employees are a top priority and are taken care of like they are part of the family. It has become a near obsession of Kristy’s to create the best working environment possible for her employees. The fruits of her labor have been recognized in year after year Pittsburgh Business Times Best Places to Work awards.

“Employees are the backbone of my business,” said Knichel. “Without my people, we would not be here today. The number one reason I am successful is because of my people.

Atadex is a technology service provider for the transportation industry.

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Phone: 470-297-5022 Email: sales@atadex.com Website: www.Atadex.com

DISPATCH COVERAGE Intermodal pick ups & deliveries in Southern California Specializing in multiple stop pick ups & deliveries 50 power units available / EDI capable Warehouse services centrally located in City of Commerce Transloading & cross dock services available Over axle weight adjustments available

15454 E. Valley Blvd., City of Industry, CA 91746

Ph: 626-333-8202 Fax: 626-333-8212 Email: dispatch@socalcarriers.com

S U P P LY C H A I N

Knichel Logistics staff during customer service week “We have been able to retain our employees for a long period of time with low turnover. Our customers are talking to the same people and our employees keep learning, so they are able to provide a seamless and operationally effective experience to our customers.”

Knichel continued, “Customers in this business want to ship their freight and get it done right away.

If you don’t understand what you’re talking about, they can get aggravated and may want to use someone else. That’s definitely something we want to avoid.”

Some of the many ways in which Knichel shows a commitment to its employees is by bringing in massage

therapists multiple times each year, awarding employees extra time off, and taking the entire office staff out to Pirates games. They also offer a gym membership that is fully paid for by the company, and for those who use it, employees are awarded an extra 30 minutes during lunch.

“As the owner, I go around and talk to everyone and thank them for their hard work,” said Knichel. “We also share our numbers with employees so they know what’s going on within the company and that they are a part of that success.

“One of the big things is just listening to our people. We ask our employees for their opinions. We don’t act like we know everything, w w w. k n i c h e l l o g i s t i c s . c o m

77

Customer service week Pajama day because I certainly don’t know everything.”

Besides basing its priorities around the needs of its workforce, the company also pays special attention to the type of people it brings in. Knichel said one of the top traits Knichel Logistics looks for in potential employees is whether or not they fit into the company’s culture.

“Fitting into the company culture is non-negotiable. When looking at potential hires, it’s important that we feel like they could be somebody we can hang out and spend time with outside of work,” said Knichel. “Also, 78

December 2015

they must be trustworthy, loyal, dedicated, a forward thinker and have a positive attitude.”

Another aspect that is important to Knichel Logistics is contributing to the community and society through charity work.

One of the largest organizations the company works with is Positive Athlete Pittsburgh, an organization that works with local high schools to show students they should keep a positive attitude about life, no matter what obstacles they’re forced to overcome. Former Pittsburgh Steelers wide receiver Hines Ward is heavily involved in the program.

KNICHEL LOGISTICS

S U P P LY C H A I N

In addition to helping high school students, Knichel also awards college scholarships twice a year.

compromised as the company continues to grow. This includes automating specific operational activities and implementing best Staying ahead of the rest practices to ensure the customer Knichel has a clear vision of what stays in the forefront of everything the perfect logistics flexibility they do. looks like.

“What I’ve found works the best “It’s the ability to react to our is assigning a CSR to each account customers’ needs and offering by mode. They’re responsible for a solution no matter what,” said knowing what’s going on with each Knichel. “If it’s important to our shipment every step of the way,” customers, it’s important to us.” said Knichel. “Our staff understands Knichel Logistics offers customers the customer comes first, and they customized solutions, understanding work to satisfy the customer’s needs that one size doesn’t fit all. no matter how challenging it can be.

With the shipment mode of “Our job is to provide a solution intermodal transportation continuing with no excuses,” she said. to grow, as well as the continued growth of the third-party segment, Key partnerships Knichel Logistics is in a prime With an understanding that it position to take advantage behind has a social responsibility to the its existing wholesale contracts with environment, Knichel Logistics the class-one railroads and carrier has developed a partnership with relationships.

SmartWay to continue shipping Customer service is key to customers their product in the most Knichel Logistics’ success. The efficient ways possible. company continues to focus “This includes partnering on operational effectiveness to with underlying carriers that are ensure the element of personalized SmartWay partners and continuing customer service is never to focus on mode optimization for w w w. k n i c h e l l o g i s t i c s . c o m

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Finance Department members Rachael Shaffer, Tammy Miles, Nicole Papinchak customers,” said Knichel.

Knichel Logistics has wholesale rail contracts with the class 1 railroads, which include the Union Pacific as well as CSX, to ship its freight via railroad since 2003. The contracts provide Knichel with access to approximately 70,000 53’ intermodal containers, and it services shipments through its network of core drayage carriers in every major intermodal market.

One of the differentiating factors of Knichel’s intermodal program versus other products that are out in the marketplace is managing the pick-up and delivery in house 80

December 2015

through its own network of carriers, which results in better control and ultimately better and more consistent service.

To further expand its service offerings and increase its overall value proposition to its customers, Knichel Logistics created a separate company – Knichel Logistics LTL – by purchasing a BlueGrace Logistics franchise in May of 2015. This business opportunity has substantially raised Knichel’s ability to offer seamless LTL service to its existing customers while simultaneously attracting new business.

S U P P LY C H A I N

Evolving technology Two years ago, Knichel Logistics implemented a new operating system for its intermodal and freight brokerage divisions. This transportation management software created by Quantum Edge Technologies has allowed Knichel to continue to increase its operational effectiveness and overall service that it can provide its customers.

The company also purchased new analytical, business intelligence software called Domo last year, which syncs with its transportation and accounting software to give real-time data on how the business is operating.

“We can see everything from how operations are running to how the sales group is doing in real time,” said Knichel. “I even have an app on my phone so I can check when I’m away on a business trip.

In the future, Knichel Logistics is looking to continue to build on the growth it has had as a company in recent years. This includes year over year double-digit revenue growth over the past 10 years as a whole, and regarding LTL specifically since opening its Blue Grace franchise in June, Knichel Logistics has already tripled its LTL business.

“We expect the LTL business to grow at a hyper-growth pace in addition to 10-15% year over year growth for the company as a whole.” said Knichel.

Company Information INDUSTRY

Logistics HEADQUARTERS

5347 William Flynn Hwy Gibsonia PA, USA, 15044 FOUNDED

2003 EMPLOYEES

40 REVENUE

$50 million PRODUCTS/ SERVICES

Logistics

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Hitting its mark G.I. Sportz has grown from a small startup to a global leader in the paintball manufacturing industry Written by: Eric Harding

Produced by: Mike Becker

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Courtesy of Erik Chateau — in Bitburg, Germany

W

hen a group of partners decided to create a Canadian paintball manufacturing company, they showed up at the Paintball Sports Promotions (PSP) World Cup in an attempt to introduce their brand.

Then they were laughed at, even by the people they knew in the industry.

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Years later, they’ve bought out all the naysayers and created a paintball manufacturing conglomerate called G.I. Sportz, Among the world’s leading manufacturers of the paintball industry, the company brings in about $140 million of sales annually.

SECTOR

From David to Goliath Originally started in 2010 by a group of paintball enthusiasts led by current majority owner Richmond Italia, G.I. Sportz has since teamed up with a variety of paintball product distributors from across the globe, catapulting itself to the top of the industry.

After its first 18 months operating in a small location outside of Montreal, the group purchased one of Italia’s former businesses, Procaps. The Procaps plant was built in 1999 by Italia with the

“Richmond Italia has been arguably the most successful entrepreneur in paintball.”

– Dave “Opie” Thomas, G.I. Sportz plant manager and director of U.S. operations

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GI SPORTZ goal of manufacturing paintballs in the most efficient way possible.

The repurchasing of Procaps propelled G.I. Sportz into the global market, giving it the resources, machine capacity and formulation to take over even more market share.

With the purchase, G.I. Sportz boost itself to second from the top as a global manufacturer and distributor of products within the paintball industry.

Soon after, G.I. Sportz identified a complimentary company that

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manufactured paintball markers, Tippmann Sports, as the next natural acquisition. Prior to this, G.I. Sportz and Procaps only manufactured paint balls and safety masks for the goggles.

G.I. Sportz finalized the purchase of Tippmann at the end of 2012, and the integration of the two companies boosted G.I. Sportz sales from $38 million to nearly $70 million by the end of 2013.

The tiny “David” company that got laughed at its brand launch has

M A N U FA C T U R I N G

become a manufacturing “Goliath.”

Even so, those at the top of the rising company won’t forget where it all began.

“We need to make sure that we don’t become too big in the way we treat our customers,” said Dave “Opie” Thomas, plant manager and director of U.S. operations at G.I. Sportz. “We’ve brought the player aspect, the business aspect and the niche business aspect back to the market.

“We took it out of the corporate hands who run everything by numbers and don’t really understand that the majority of our

customers are very ‘mom-and-pop shop.’ The customers don’t always know how to market and or how to run their business properly. We have to help them do that. We basically become business partners with our customers and help them with whatever issue comes up.”

The golden goose G.I. Sportz set itself up from a profitability and sales perspective to be a viable acquisition for a private equity firm. Earlier this year, a Toronto-based firm called Fulcrum Capital Partners purchased majority share of G.I. Sportz, which w w w. g i s p o r t z . c o m

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Caption for photo here

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essentially eliminated several of its prior partners.

Around the same time, G.I. Sportz’s management team identified its largest competitor, KEE Action Sports, as the next acquisition target in an attempt to source paintballs instead of manufacturing them. With the financial support from Fulcrum, G.I. Sportz was able to make the purchase of KEE in July of this year.

Today, G.I. Sportz, as a paintball company with the three acquisitions and the subsequent growth, will end the calendar year with around $140 million of sales. Thomas gives a lot of the credit to Italia, who Thomas praised for his business acumen.

“Richmond Italia has been arguably the most successful entrepreneur in paintball,” said Thomas. “He started out as a paintball player, as well as a paintball field and store owner. Basically, the customers that we sell to today? He was one of them.”

According to Thomas, Italia’s sharp business acumen rubs off on

G.I. Sportz’s suppliers as well “We’re very good at treating our suppliers like partners,” said Thomas. “We pay our bills on time and we see a lot of these guys on a daily basis. We’re not a company that just buys from them and then are on cruise control. We’re always trying to grow and do more things.”

“Italia is like the golden goose.

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GI SPORTZ

Anything he touches turns to gold.

He definitely has the right timing with everything he does. I think a lot of our suppliers see that and want to be a part of that.”

Protecting its employees In a constant effort to reduce costs and make a better product, G.I. Sportz has replaced a portion of its lower-paid packaging department workforce with an automated

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workforce. The employees that were once more susceptible to workman’s compensation injuries now have the strenuous portion of their jobs done by robots.

“These two robots have probably saved us $200,000 a year in labor cost, not to mention people who have hurt their backs from lifting cases of paint and workman’s compensation claims, as well as a better product for the customer,”

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said Thomas.

“They don’t take breaks. You don’t have to feed them. They just go.”

Although Thomas acknowledged the decision has a tremendous financial benefit for the G.I. Sportz, it doesn’t overshadow the importance of the company’s human employees.

The majority of employees at G.I. Sportz have been with the company for several years, and Thomas said protecting them from a health and safety aspect is among the company’s top priorities.

“We treat our people very well and the people are important to our business, especially on the skilled labor side,” said Thomas. “Adding robots was a no-brainer, not only because of the economic benefit,

but really because of the reduction of work injuries.

Thomas pointed out that even with the best safety procedures, the manual labor aspect of the job took its toll on employees. “Our cases of paint weigh 15 pounds apiece and we’re stacking those six feet high,” he said. “Over time, you’re going to have a sore back. It’s really just identifying these types of processes and saying, ‘Hey, can we automate that?’”

Ahead of the game G.I. Sportz is in the process of introducing new products to the shelves. Thomas said the company has 12 about major product launches planned for as early as October 2015

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GI SPORTZ

through the end of 2016.

Some of its new merchandise includes a new a goggles system with built-in communication, highend markers, and ways to make paintballs at a reduced cost.

In addition, G.I. Sportz has 92

December 2015

created a smaller 50-caliber ball that is not only cheaper to make than the 68-caliber ball, but also hurts less when it strikes its human targets.

Though pricing of 68-caliber paintballs has gone down, the commodity-driven price of raw

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materials has gone up, resulting in a decrease of profit margin for traditional manufacturers—and a smaller budget for research and development.

According to Thomas, G.I. Sportz has been able to reset pricing to a margin that makes sense to manufacturers, but still provides a price point to the field and dealer that is better than the current 68-caliber pricing.

“We provide a product that is easier to break — and by doing that, it hurts less to get shot,” he said. “The other thing it does is allow us to make a smaller marker, so we’ve increased our market opportunity by lowering our demographic to as low as 6-8 year old kids.”

Company Information INDUSTRY

Manufacturing HEADQUARTERS

6000 Kieran Saint-Laurent Quebec Canada H4S 2B5 FOUNDED

Improving the industry In the future, G.I. Sportz intends to consolidate to become more efficient, as well as execute new plans to help the company’s dealer base and customer base. In addition, the conglomerate G.I. Group’s Less than Lethal (or non-lethal) weapons platform has a high potential for growth in the company.

“We need to continue to develop products that customers will demand from our dealer base.

We’ll continue to make paintball better from an entertainment perspective. Outside of cost reduction and launching new products, there’s not much more we can do other than just help the industry become stronger and healthier.

“I think we’re at the top of the totem pole on the paintball side,” said Thomas.

2010 REVENUE

US $150 million

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