CIM Magazine March/April 2012 by CIM-ICM Publications

CONTENTS|CONTENU CIM MAGAZINE | MARCH/APRIL 2012 | MARS/AVRIL 2012

TOOLS OF THE TRADE

Drill and blast Compiled by E. Moore

NEWS 14

$55M in federal cash for Port of Sept-Îles But local miners worry more infrastructure needed by K. Lagowski

Redefining “hot spot” in Afghanistan Prospects attract investment to troubled, mineral-rich country by A. Reitman

“Innovation is like beauty” Mining players pursue the elusive ideal at CMIC signature event by V. Heffernan

Desert springs Gold miners explore the Middle East for

Étude du projet de loi 14 L’AEMQ craint pour l’avenir

capital by N. Tourish and P. Braul de la prospection au Québec by A. Castonguay

Bill 14 shifts power to municipalities AEMQ fears for future of exploration in Quebec

COLUMNS 25 27 28

Supply Side Develop a strategy and move your projects forward by J. Baird HR Outlook Workplace diversity: growing the talent pool for the mining industry by R. Montpellier Eye on business Mining regulatory landscape changes in Peru: a state of emergency? by K. O’Callaghan and L. Plumridge

Standards Mineral disclosure in brine recovery

Guest column Developing mining projects in

projects by C. Waldie and J. Whyte Latin America through Canadian capital markets by J. Neher

34 40 UPFRONT 34 36 38

HR prospecting and developing Perspectives on finding, cultivating and keeping talent by A. Lopez-Pacheco Keep your options open How stochastic mine planning can make uncertainty attractive by A. Reitman Bullish on human capital Peter Kinver drives Barrick to efficient operations by G. Lanktree

CIM Conference & Exhibition Edmonton 2012

42 FEATURE | ARTICLE VEDETTE 42 48

Ecuador and Colombia A shared border, but worlds apart on policy by V. Heffernan Equateur et Colombie Une frontière commune, mais des politiques aux antipodes

CIM COMMUNITY 58 59

PROJECT PROFILE | PROJET EN VEDETTE 50

60 61

Growing CIM’s reach, one technical meeting at a time Saskatoon Branch winner of the Mel W. Bartley Award by C. Baldwin Hooked from the get-go Student maximizes his exposure to the world of mining by A. Lopez-Pacheco Fresh perspective CMP meeting provides operators chance to learn and grow by H.B. George

Transforming the way CIM does business New CIM portal more than a website by W.K. Chan

Deep roots and wide veins Tahoe Resources works to turn prospects into production in Guatemala by D. Zlotnikov

Des racines profondes et de larges veines Tahoe Resources cherche

HISTORIES

à transformer ses prospects du Guatemala en sites de production

Historical metallurgy A hundred years of fossil fuels research at CANMET. Part 2: the 1950s onwards by D. Reeve

TECHNICAL ABSTRACTS 69 70

CIM Journal Canadian Metallurgical Quarterly

IN EVERY ISSUE 6 8 64 71 72 74

Editor’s message President’s notes / Mot du président Calendar Innovation showcase Professional directory Mining Lore Silver boulders and circus acts: silver rush in the Slocan Valley by C. Baldwin

editor’s letter Given the issue’s Latin American theme and in light of his recent excursion to Chile on behalf of CIM Magazine, I have invited section editor Peter Braul to author the March/April editor’s letter. Angela Hamlyn, Editor-in-chief

Step out of your silo

Editor-in-chief Angela Hamlyn, editor@cim.org Managing editor Wah Keung Chan, wkchan@cim.org Senior editor Ryan Bergen, rbergen@cim.org Section editors Features: Ryan Bergen, rbergen@cim.org News and Upfront: Peter Braul, pbraul@cim.org Columns, CIM News, Histories and Technical Section:

When I began planning a three-week trip to Chile to visit mining operations, I got excited at the prospect of leaving my desk but also a bit anxious that I would not actually be able to accomplish a lot. After all, with multiple press deadlines looming, I knew I would be leaving the editorial department short-handed at a very critical time. Instead of editing my section of the magazine, I was touring sites, interviewing professors, meeting engineers and talking to NGOs and community figures. I also spent a lot of time riding in trucks of all shapes and sizes, on roads in varying states of repair. The amount of practical knowledge I accumulated – of an industry and of a culture – more than made up for my time away. Had I planned this trip by myself, it might have gone differently, but I was travelling with an independent journalist and a geographer. We had applied for a government grant together, and in our application we highlighted how much we had to gain from one another’s technical, linguistic and personal perspectives. We had no idea how important these would become. The diversity of our backgrounds influenced everything, from the places we stayed – often with the family of my colleague – to the interviews we sought out and the questions we asked. Alone, I could not have waded my way through discussions about leach pads in Spanish, would not have found interest in what turned out to be a fascinating wind power project, and would have come away with a much narrower vision of the way mining interacts with society. And just as I could not have guessed how much my social circumstances would affect my perspective, neither did I expect to notice much difference in corporate culture between companies that hosted me. From the vantage point of my desk in Montreal, mining companies tended to appear pretty much the same to me. But on the ground, there are major differences in the way companies are run – from the most obvious contrast between state-run Codelco and privately owned Teck – to the subtle divergence in corporate culture between companies like Kinross and Barrick. I have come back to my post at CIM Magazine enriched, exhausted and invigorated. It is a true joy to be part of a community here that fosters the kind of knowledge I gained, and that can see value in differences. The heart of progress lies in our collective ability to embrace opportunities like these, and I look forward to applying this experience to my work and my personal development. Finally, my thanks go out to everyone who made my trip possible. From CIM management (who had the vision to back their newest employee on a threeweek, independent recon mission) to the editorial staff with whom I work on a daily basis; I could not ask for a better group of people. Thanks also to all the people I met with while abroad, and who made time in their busy schedules to enlighten me.

Dinah Zeldin, dzeldin@cim.org Copy editor / Communications Coordinator

Zoë Koulouris, zkoulouris@cim.org Web editor Nathan Hall, nhall@cim.org Publisher CIM Contributors Jon Baird, Correy Baldwin, Alain Castonguay, Wah Keung Chan, Hartley Butler George, Virginia Heffernan, Graham Lanktree, Alexandra Lopez-Pacheco, Ryan Montpellier, Eavan Moore, Kevin O’Callaghan, Leah Plumridge, David Reeve, Anna Reitman, Natasha Tourish, Craig Waldie, James Whyte, Dan Zlotnikov Published 8 times a year by CIM 1250 – 3500 de Maisonneuve Blvd. West Westmount, QC, H3Z 3C1 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($170.00); Non-members (Canada), $220.00/yr (PE, MB, SK, AB, NT, NU, YT add $11.00 GST, BC add $26.40 HST, ON, NB, NL add $28.60 HST, QC add $32.95 GST + PST, NS add $33.00 HST) Non-Members USA and International: US$240.00/year Single copies, $25.00. Advertising Sales Dovetail Communications Inc. 30 East Beaver Creek Rd., Ste. 202 Richmond Hill, Ontario L4B 1J2 Tel.: 905.886.6640; Fax: 905.886.6615; www.dvtail.com National Account Executives 905.886.6641 Janet Jeffery, jjeffery@dvtail.com, ext. 329 Neal Young, nyoung@dvtail.com, ext. 325

This month’s cover A silver bar produced at Gran Colombia Gold’s Maria Dama plant in Antioquia, Colombia. Courtesy of Gran Colombia Gold

Layout and design by Clò Communications Inc. www.clocommunications.com Copyright©2012. All rights reserved. ISSN 1718-4177. Publications Mail No. 09786. Postage paid at CPA Saint-Laurent, QC. Dépôt légal: Bibliothèque nationale du Québec. The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.

Peter Braul, Section editor Printed in Canada 6 | CIM Magazine | Vol. 7, No. 2

letters The weakest link Dear Editor, I was delighted to see a comment I made on your LinkedIn page in the February CIM Magazine regarding ways to improve community relations on international mining projects. I had written: “The greatest untapped resources are the spouses of the employees, usually women. When expats and locals work together, they build bridges. In New Caledonia, our female expat community worked with a local shelter for young mothers, a rewarding experience for all.” Unfortunately, your magazine mistakenly replaced the word “expat” with “expert” — in two places — changing the meaning of my statement. It is my opinion that both locals and expats have “expertise.” When they share their skills and knowledge with each other, fantastic goals can be achieved. Jo-Ann Gagnon Entrepreneur, City In A Box www.cityinabox.ca Hello Ms. Gagnon, First of all, please accept my sincere apology on behalf of CIM Magazine for the mistake. Within the context of your commentary, I acknowledge that the word change drastically alters the meaning and intent of your comments, for which I am sorry. It was, quite simply, the result of human error. In the end, as editor-in-chief, the buck stops with me in ensuring that the editorial staff is well acquainted with the standard operating procedures and processes, so I take full responsibility for the error. This situation will help us improve our work going forward, though I regret that it comes at your expense. Thank you, on behalf of the team at CIM Magazine and its readers, for taking the time to help us make this right. We have reprinted your original comments in full, along with the comment on our LinkedIn page that initiated them. Sincerest regards, Angela Hamlyn, Editor-in-chief

What are the practical ways that mining companies can improve community relations? Doing it right the first time: November 2011, Vol. 6, No. 7, p. 68 The greatest untapped resources are the spouses of the employees – usually they are women. When expats and locals work together on a community project, they build bridges. In New Caledonia, our expat community worked with a local shelter for young mothers, a rewarding experience for all. Jo-Ann Gagnon

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March/April 2012 | 7

president’s notes Leadership development in action I am pleased to tell you the CIM Leadership Development Program was successfully launched in Toronto in February with a threeday workshop for our first nine mining industry professionals. Regular readers of this page will recall that I have written in the past about the new CIM LDP, a one-year program that brings professionals together for a series of intensive multi-day workshops and provides ongoing learning modules and dialogue with mentors and peers. The overall objective is to help ensure that our industry is defined by leadership excellence in addition to technical excellence. Executive development professional Rosie Steeves led the workshop. She explained the two main goals of the first session were to give the participants “some tools to help them reflect on their own leadership and start to develop an idea of where and how they needed to grow. Second, and perhaps more important, was to develop the relationships amongst the group. Ultimately, they will succeed through the work they do supporting and challenging each other.”

Group member Alana Kennedy reported the first session hit the mark. “I was empowered with tools to structure my leadership growth, an appreciation of different perspectives and a new way to evaluate my personal development goals.” Her peer, Josh Nelson, said the value of the program is clear: “I am looking forward to the coming year. This program is unique in that it provides a long-term support network of industry colleagues to offer support as we work to develop better leadership practices and to apply the theory we learn during the class sessions. I see this as an opportunity for meaningful personal and professional development.” Steeves said she was pleased with the dynamic created by the workshop: “The group members were able to share common experiences and clearly understood the environment each operated in, yet were unencumbered by the internal politics of their own organization.” For those interested in participating, registration is now open for the next group, set to convene in November. To find more details, visit www.cim.org/cim-leadership-development-program.cfm.

Chuck Edwards CIM President

Le perfectionnement du leadership en action J’ai le plaisir de vous annoncer que le Programme de perfectionnement du leadership organisé par l’ICM a débuté avec succès à Toronto en février par un atelier de trois jours à l’intention de nos neuf premiers professionnels de l’industrie minière. Ceux qui lisent régulièrement cette page se souviendront que j’y ai déjà parlé du nouveau Programme de perfectionnement du leadership de l’ICM. D’une durée d’un an, il réunit des professionnels de l’industrie qui participent à une série d’ateliers intensifs de plusieurs jours et fournit des modules d’apprentissage en cours d’emploi ainsi que des occasions d’échanges avec des mentors et des pairs. Son objectif général consiste à faire de l’excellence du leadership une caractéristique de notre industrie, au même titre que l’excellence sur le plan technique. Rosie Steeves, spécialiste du perfectionnement des cadres, a dirigé cet atelier. Elle a expliqué que les deux principaux buts de la première séance consistaient à donner aux participants « certains outils pour les aider à réfléchir sur leur propre leadership et pour commencer à se faire une idée des points qu’ils devaient améliorer et de quelle façon y parvenir. Ensuite, ce qui est peut-être plus important, il s’agissait de développer les relations entre les membres du groupe. Enfin, ils y réussiront par un travail de soutien et de motivation mutuel. » Alana Kennedy, membre du groupe, a déclaré que la première séance a atteint son objectif. « J’ai obtenu des outils pour structurer la croissance de mon leadership, une évaluation des différentes perspectives et une nouvelle façon d’évaluer mes objectifs de perfectionnement personnel. »

Son collègue Josh Nelson a déclaré que la valeur de ce programme est évidente. « J’attends l’année qui vient avec impatience. Ce programme est unique dans le sens où il nous permet de bénéficier d’un réseau de soutien à long terme parmi les collègues de l’industrie qui peuvent nous aider dans nos efforts de perfectionnement de nos pratiques de leadership et d’application des théories enseignées en classe. J’y vois une occasion de perfectionnement personnel et professionnel appréciable. » Rosie Steeves s’est dite satisfaite de la dynamique créée par l’atelier : « Les membres du groupe ont pu partager leurs expériences communes et bien comprendre l’environnement dans lequel chacun travaille, sans toutefois tenir compte des politiques internes de leurs organisations respectives. » Les personnes intéressées à faire partie du prochain groupe qui se réunira en novembre peuvent s’inscrire dès maintenant. Pour en savoir plus, consultez www.cim.org/cim-leadership-developmentprogram.cfm.

Chuck Edwards Président de l’ICM

8 | CIM Magazine | Vol. 7, No. 2

008-008 Pres Notes.indd 1

12-03-21 1:22 PM

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010-013 Tools of the Trade_Layout 1 12-03-21 1:21 PM Page 10

OF TOOLS THE TRADE

drill & blast

◢ A better button bit A new drill bit design from Rockmore International promises to boost productivity. The B6 button bit has six tungsten carbide inserts on the periphery row; their diameters are about one millimetre larger than previous models, effectively lengthening bit life. Additional changes in flushing design include flutes strategically placed between the button inserts to carry water and rock cuttings away from the bit face more efficiently, thus increasing penetration rates. “The previous B3 design was very much industry standard for all manufacturers of this class of bit,” says Pejman Eghdami, Rockmore’s executive vice-president. He says the new design, therefore, represents an industry-wide improvement. It comes in a 45-millimetre head diameter and is compatible with any R32 thread drill rod connection.

◢ Customized compressors make sourcing simple National Compressed Air specializes in customized high-pressure compressors. The powerful rotary screw compressors are available in single- and double-stage models, with a choice of engine types and mounts. NCA compressors use a fuel-saving combination of engine speed and air intake modulation. They can be tailored to customer requirements without much cost increase, says sales and marketing manager Pran Kirtani, and their volume and pressure specs are an industry standout. “If someone is looking for 200 PSI or higher in a single stage, it will be hard to find, whereas we can easily provide that product,” he says. “Our double-stage compressors can go up to 1,700 CFM in volume and 500 PSI in pressure, which is, perhaps, the highest in the industry.”

◢ Water at work The Wassara water-powered drilling system creates deeper, straighter holes than systems using compressed air. As water returns upward through the drill hole, it flows at much lower volume and velocity. This reduces damage to the casing and allows a smaller gap between the hammer and hole wall, making a typical drill deviation only 0.5 to 1.5 per cent. Water-powered in-the-hole (ITH) drills consume about 80 per cent less energy and contribute to a working environment free of dust and oil mist. Purpose-built rigs are available from Atlas Copco, Sandvik and Cubex, but Wassara also sells individual components to retrofit existing rigs. “In essence, all drill rigs can be adapted to Wassara,” says Pål Jensen, business area manager for mining at Wassara.

10 | CIM Magazine | Vol. 7, No. 2

010-013 Tools of the Trade_Layout 1 12-03-21 1:21 PM Page 11

OF TOOLS THE TRADE

drill & blast

◢ Easy, electronic detonation Accurate and individually programmable, electronic initiation systems offer a safe, flexible and reliable alternative to pyrotechnic detonators. DynoNobel’s SmartShot system boasts robust waterresistant connectors, quick training and ease of use, and a 20second detonator delay. “We offer the longest delay on the market,” says Campbell Robertson, conversion manager, electronic detonators at Dyno Nobel. “It allows some mines to shoot larger shots.” The system includes up to 250 electronic detonators on one string starter; a bench box that receives radio frequency, leaky feeder or wired signals; and a base station used to initiate the blast from a safe distance. A handheld tagger tests and assigns timing to detonators. Different versions are sold for underground and surface operations.

◢ When the going gets tough... Pacific Blasting and Demolition provides audit services and drill and blast work in North America and abroad. The company specializes in wall control, but mining manager Ron Woolf says it is multi-faceted and welcomes challenges: “As a specialty contractor, we’re able to go in and do almost everything for a client. We’ve proven that we can go into an area that has experienced a lot of difficulties in the past and come out with favourable results. We have a vast talent pool of some really good guys.” The company has handled access road construction in difficult terrain, portal development, rock slope stabilization and tunnel rehabilitation. Its capabilities include complete mine contracting services, and production drilling and blasting.

◢ Track-Mounted versatility This track-mounted in-the-hole (ITH) drill forms part of Cubex’s underground Constellation series. It can produce drill holes up to 330 feet deep and 3.5 to eight inches in diameter without additional tools. With a 12inch hammer, it can ream up to 17.5-inch diameter holes. The automated Accra Feed system provides optimal pressure to the bit, while the ERIS control panel

allows real-time monitoring from an expandable fourlegged platform. “We’ve designed it to be a heavy duty, lower maintenance and extremely versatile underground ITH drill,” says Cubex marketing manager Kerry Falk. “It can switch from 30-inch blind boring with a Machines Roger V30 to production drilling with a six- or eight-inch hammer.”

March/April 2012 | 11

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OF TOOLS THE TRADE

drill & blast

◢ The power to dominate Operating at air pressures of 100 to 435 PSI, the Halco Super Dominator 500 hammer is built for power. It has no liner, leaving space for a bigger, harder-hitting piston. A one-piece top adapter with no-return-valve makes inspection and service simple, and an integral finger eliminates shimming. “Halco has maintained a simple design in its hammers for ease of service without compromising performance,” says sales support engineer Chad LaRoche. “The Super Dominator line has achieved great results in blast hole applications, both in surface and underground mining.” Halco hammers come with API pin adapters but have been fitted with other thread types by customer request. Drilling diameters range from five to 6.5 inches.

◢ Continuous improvement by design The Drill and Blast Server (DBS) developed by Datavis centralizes and automates data collection using standard file formats. In the Designer module, users import or generate drill and mine planning data for use in blast design. The SQL-based Manager module handles data input, analysis and reporting; the Link module connects DBS to equipment and other databases. A tablet data logger is used to record drilling, dipping, charging and hook-up data. “The continuous improvement feedback loop is closed with this system,” says John Thompson, D&B consultant for Datavis’ Canadian distributor, Thunderbird Mining Systems. “It provides tools for the user to compare the results expected in the mining process to what actually occurred, based on the drill and blast process.”

◢ Safer and more efficient charging Normet’s most popular series of underground mine charging systems provides mechanized explosives handling for face and production drilling. Storage for explosives, primers and detonators, as well as an extendable platform and enclosed cabin make charging safer and more efficient. An optional mechanical hose feeding system accommodates 33.5-mm or 38-mm charging hoses for vertical bore holes. Two ANFO vessels holding 360 to 720 litres store enough material for several faces. Different models have either diesel hydraulic or electro-hydraulic drives. “The MC/LC series Charmec fits well even into a four-metre by four-metre tunnel,” says Jukka Pihlava, marketing manager at Normet, “and the boom reach from one set up is about eight metres by eight metres which covers most drift sizes used in underground mining.” 12 | CIM Magazine | Vol. 7, No. 2

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news

$55M in federal cash for Port of Sept-Îles But local miners worry more infrastructure needed

Courtesy of the Port of Sept-Îles

By Krystyna Lagowski

An illustration of the new multi-user dock at the Port of Sept-Îles.

Although mining organizations are pleased with the federal government’s February 13 announcement to contribute up to $55 million to expand the Port of Sept-Îles, they are left speculating about railways and roads. Currently, the port plans to build a multi-user deep water dock with two ship loaders and two conveyer lines. Construction of the new facility at Pointe-Noire should be complete by the end of March 2014. In 2011, the port handled 26.3 million tonnes of iron ore for miners, namely Cliffs Natural Resources, Consolidated Thompson Iron Mines Ltd., Labrador Iron Mines Holdings Limited, Tata Steel Limited, New Millenium Iron Corp., as well as the Iron Ore Company of Canada (IOC). Organizations with projects in development include Alderon Iron Ore Corporation, Century Iron Mines Corporation, Champion Iron Works, Inc. and Adriana Iron Resources Inc. 14 | CIM Magazine | Vol. 7, No. 2

According to Pierre Gagnon, president and CEO of the Port of Sept-Îles, the port will be handling almost 200 million tonnes of iron ore by 2018. “By the end of the decade, with the annual projected volume of activity, the Port of Sept-Îles will be the largest port by volume in North America,” he said. But Bob Leshchyshen, vice-president of corporate development and investor relations at Century, said the port expansion is only one part of the puzzle. “The other part is the train. There is an existing train line to the port which has an estimated capacity for 80 million tonnes, but as other companies begin to expand their facilities, the capacity of the railway could get used up fairly quickly over the next two or three years.” In addition, one of Century’s mines is located in Schefferville, Quebec, where the roads are not good enough to handle certain equipment, so helicopters are used instead.

“One of the issues is to create a potential multi-use railway, but all that stuff is up in the air,” he said. “There is discussion about trying to figure out the infrastructure and everybody’s in the game, including CN and CP – but nobody knows what’s going to happen next.” When a railway crosses a provincial boundary, it becomes a national railway or a common carrier. This means that the rail company is obligated to haul products at a commercial rate and must accept other commodities. For Alderon, this is good news, since the railroad it plans to use is currently owned by Rio Tinto. Its project in Labrador’s Kamistiatusset (Kami) is eight kilometres away from the rail, so it will build some rail to hook up with it. “The rail has capacity, and we’re confident we’ll have a rail agreement in the fall of this year,” said Simon Marcotte, the company’s vice-president of corporate development.

Julie Cusson, director of communications and external relations at the Iron Ore Company of Canada, which is 59 per cent owned by Rio Tinto, said Cliffs, Consolidated Thompson, Labrador Iron Mines and Tata Steel/ New Millenium have signed agreements to ship ore on the Rio Tinto railroad. IOC will need to invest in sidings and new engines to accommodate the increased load, she added. According to Erik Richer La Flèche, partner in law firm Stikeman Elliott, the rail projects could benefit from the Quebec government’s Plan Nord – the 25year, $80-billion development project for the north of Quebec. “The Quebec government can provide some assistance with respect to infrastructure,” he

remarked. “Mining is a fundamental part of the Plan Nord, and in order to provide ability to access minerals, the Quebec government is saying, ‘We will provide you with some assistance. But there may be some capital involved.’” However, Richer La Flèche noted that although the Quebec government would like to qualify the expansion of the Port of Sept-Îles as part of Plan Nord, the expansion pre-dates the Plan Nord – which is still in gestation. “The expansion consolidates the importance of Sept-Îles within the Plan Nord, since it will facilitate the Plan,” he said. “They complement each other.” Leshchyshen said the Plan Nord can positively affect the expansion of the Port, if in fact the Quebec government

EXPLORE THE

is actually able to implement it. “The government’s plan is to spend $80 billion over 25 years – it doesn’t mean they are going to spend it all themselves,” he said. “They’re going to facilitate companies like ours to make things easier – they’ll spend money on roads, infrastructure and electricity, which are very important to us. “The government takes its time in getting things done. You need permits. Without the government, you can’t build the railway,” Leshchyshen added. In the meantime, it is full steam ahead for the Port of Sept-Îles. “We are already working on the next expansion,” said Gagnon. “We are ready to expand at the pace of the mining projects that will occur.” CIM

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March/April 2012 | 15

news

Redefining “hot spot” in Afghanistan Abundant prospects attract investment to troubled, mineral-rich country

Kilo Goldmines is both the first Canadian and the first publicly listed company preparing to tap into Afghanistan’s rich mineral resources. At the end of November 2011, the Afghan Ministry of Mines (MoM) awarded the miner one of four concession blocks comprising the Hajigak iron ore deposit. It is located in the mountainous Bamiyan province, 130 kilometres west of Kabul, and is one of several iron ore deposits in the region and the largest located to date. U.K.-based financier David Buckle – majority owner of Kilo DRC Iron, an affiliate of Kilo Goldmines – is leading the project. The partnership, said Kilo Goldmines president and CEO Alex van Hoeken, was a “natural fit” because of David Buckle’s existing relationship with the company and knowledge of the region. The miner has been allocated the preferential right to negotiate on the northeast block, a sizeable resource estimated to contain 450 million tonnes with an average 62 per cent grade iron, while a government-backed Indian consortium clinched the bid for the remaining three blocks. Production is expected within several years. When news broke that Kilo had been given preferred status, van Hoeken reckoned he would be getting plenty of feedback with the word “crazy” sprinkled in the conversation. The reality was quite the opposite, however. “I have had offers of financing and I keep getting emails from Afghans looking for jobs, so I have been pleasantly surprised by the reaction,” van Hoeken said. “It was much more positive than what I was thinking and that shows there is a waiting list to look at these kinds of jurisdictions.” The company must begin by confirming the resource. Meanwhile, negotiations are ongoing with the ministry. Van Hoeken hesitated to divulge any details until negotiations are finalized, which he expects will be some time this 16 | CIM Magazine | Vol. 7, No. 2

Courtesy of USGS

By Anna Reitman

Fieldwork performed by the United States Geological Society including geophysical surveying, as well as institutional capacity building, have helped Afghanistan generate interest in its mineral resources.

year. However, such agreements generally focus on ensuring that contracts reflect international best practices and may include building infrastructures, such as roads, hospitals and schools, or guarantees to hire local workers or source from local suppliers, explained Atiq Sediqi, environmental advisor at MoM. In addition, royalty rates and/or bonus payments could be discussed at this stage. A great deal of international attention has been paid to the Afghan mineral sector. Foreign Affairs and International Trade Canada called the successful bid “a major step forward in Afghanistan’s extractive industry development [that] will help generate much-needed revenues and jobs, contributing to Afghan livelihoods and to the sustainability of the country’s economy.” That contribution could be some US$5 billion to GDP by 2016, according to Afghan government estimates, which peg total mineral wealth at US$3 trillion, making it possible for the government to fund development and avoid a possible economic crash after the withdrawal of international troops

in 2014. It is little wonder that MoM is pushing to change the perception of the country as a “hot spot” of conflict to one of mineral resource wealth. But there have been troubles right from the start. The first major concession, and largest ongoing infrastructure project, is the Aynak copper mine, which is secured by China Metallurgical Group (MCC). It is located in the relatively stable Logar province, 65 kilometres south of Kabul. According to global risk research firm Maplecroft, MCC was awarded the contract in 2008 after an auction process that sources close to MoM described as “lacking transparency and biased against other bidders.” And although Afghanistan has signed on to the Extractive Industries Transparencies Initiative, a source with knowledge of the situation explained that this global standard for transparency, in Afghanistan at least, is merely window dressing. MoM has denied these allegations and has published a comparison of several Aynak bids in response – MCC clearly had the most competitive offer in terms of maximum tax rates the com-

pany was willing to pay, additional bonus payments the company was willing to make to the government, and promises to develop infrastructure. But the project, originally planned to begin last year, has had a series of setbacks, and production is now expected in 2014. Demining the area took considerably longer than anticipated and the discovery of a fifth century Buddhist monastery has caused delays. Meanwhile, leaked diplomatic cables from Wikileaks show that there has been disappointment from both the U.S. and Afghan governments as to the degree to which MCC has complied with its contractual obligations. “So far, very few local people have been employed, and the surrounding villages have complained that they have seen no benefits,” Maplecroft reported. “MCC has also imported most of its supplies from China, rather than sourcing locally as had been agreed.” In addition, logistical challenges have plagued railroad construction, a contractual obligation on the part of MCC. The Asian Development Bank, however, has succeeded in expanding the country’s rail network. Last summer, a year after the first track was laid, Afghanistan ran its first test train from Mazar-e-Sharif, some 400 kilometres northwest of the capital Kabul, to the Uzbek border town of Hairatan. This 75kilometre stretch of railroad marks the first phase of a national rail system which, it is hoped, will transport the country’s mineral reserves. Still, the logistical challenges are anathema to Western investors at a time when more tenders are being announced amid fierce competition between India, China and Iran. Aside from Hajigak and Aynak, Afghan officials have also signed a US$700 million oil and gas deal with the China National Petroleum Corporation in the country’s northern Sari Pul and Faryab provinces. Local watchdog Integrity Watch Afghanistan

reported that public and private companies have signed more than 100 small, medium and large mine agreements so far. Current tenders are up for gold and copper deposits in Ghazni, Sari Pul, Balkh, Herat and Badakhshan provinces. Located in mountainous terrain in northern Afghanistan, Badakhshan has the advantage of access to markets in Tajikistan to its north and China to its east. Of the current tenders, a representative of an Afghan mining supply company said it was the most attractive for this reason. More iron ore and oil and gas concessions are set to be announced this spring. Some mineral deposits are in less secure provinces, which tend to be in the southern and southwest regions. With safety being a key issue, in 2008, MoM established a virtual army to protect mining operations in the form of the 7,000-strong Mines Protection Unit. However, Maplecroft reported concerns that after the NATO-led security mission withdrawal, conditions are likely to deteriorate and the country may strug-

gle to support an army and police force without foreign assistance. In other words, the risks faced by investors in Afghanistan’s mineral sector cannot be underestimated. But van Hoeken of Kilo Goldmines explained that globally and historically, mining has been a driving force for development – not just in direct employment, but also as a catalyst to boost local economies. “We have to be careful not to say that it is the be all and end all,” he said, “but it is fair to say that once you initiate a mine, others are likely to follow, and that will generate its own momentum. There will be others coming in our footsteps. In this day and age, and certainly for publicly listed companies, mining operations are expected to abide by international rules and regulations and environmental protocols.” Whether or not international firms will become less wary of investing in the Afghan mining sector remains to be seen, but the progress of the Hajigak deposit is sure to be watched closely as a test case. CIM

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“Innovation is like beauty” Mining players pursue the elusive ideal at CMIC signature event By Virginia Heffernan

18 | CIM Magazine | Vol. 7, No. 2

policy analysts speak such different languages. As for universities, they must be willing to invest in their own resources if they want to contribute to innovation, said Lynch. To do that, they need to tap into longterm funding from industry and alumni to selectively build undergraduate and graduate programs. For example, the University of Alberta expects to graduate 80 mining engineers by 2016, compared to just two in 1993, and its chemical engineering department is the largest in North America. The investment has paid off: 25 per cent of the engineers working in the oils sands industry hail from the U of A and the number of industry-university research projects in that sub-sector has skyrocketed. Lynch, who noted that university start-ups have had a dismal success rate, urged academia to stop protecting intellectual property rights “to the point where industry-university collaboration never happens.” Perhaps the most difficult challenge will be to change the culture of an industry that is greying, lacks diversity and tends to be risk averse. “There’s a substantial story here around culture,” observed Thompson, after a lengthy audience discussion that expressed envy over Australia’s “give it a go” attitude, disappointment in the conservative nature of the sector’s financiers, and frustration over an entrenched reluctance to share research and technology. But in the less than three years since it was officially incorporated, CMIC has become a sector leader in collaboration, making significant headway in exploration research, and progressing in the areas of deep mining, process efficiency and the environment. CIM

Courtesy of CMIC

The timing could not have been better: just as Prime Minister Stephen Harper lamented the sorry state of research and development in Canada and pledged to make innovation a key element of the upcoming budget, the mining community gathered to hammer out solutions to this age-old Canadian problem. At the end of January, representatives from industry, government and academia met in Toronto to discuss the need for innovations that could solve the nagging challenges of water shortages, deeply buried deposits, and energy availability and conservation. The event was sponsored by President Engin Özberk presents a medal to former director the Canada Mining Innovation CMIC Malcolm Scoble. Council (CMIC) and included speeches from many respected industry leaders, for example, François Most agreed that one of the key barRobert, vice-president of exploration at riers to exploration and mining innovaBarrick Gold, Dave Lynch, dean of tion is the lack of highly qualified engineering at the University of Alberta, people in a sector where half the workand Geoff Munro, chief scientist at Naters are 45 years of age or older, and ural Resources Canada. one third will be eligible for retirement Although everyone agreed on the by 2015. Mining Industry Human need for collaboration among these Resources Council’s director of research disparate groups, a consensus was not Martha Roberts urged mining compareached on the definition of innovation nies to “keep an eye on mid-career and what its most significant barriers folks.” They, especially women, have left are. “Innovation is like beauty, it’s in the industry in droves due to a lack of opportunity preceding the current the eye of the beholder,” said Munro. Survey results from a discussion boom, as well as dissatisfaction with moderated by John Thompson, Teck’s work-life balance. Still, Munro praised the mining vice-president of technology and development, indicated that 31 per industry for emerging as a leader in cent thought breakthrough change was collaborating to encourage innovation. “Our innovation system is badly the most pressing need, while 24 per fragmented, but you are moving at cent chose cultural change and 18 per cent wanted to see increased collabora- lightening speed,” he said. “This kind of transformation in a sector is very tion between industry and academia. Few chose incremental change as the powerful.” Munro sees the role of government best way forward. “We specialize in as trying to “defrag” the system by inteincremental innovation and yet the grating science with policy in a more breakthroughs rarely come from within effective way. He admitted that this will the major mining companies,” noted be a challenge because scientists and Thompson.

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Desert springs Gold miners explore the Middle East for capital By Natasha Tourish and Peter Braul Representatives of some UAE but also for the surof Canada’s largest mining rounding states like Saudi companies gathered in Arabia. Everybody in the mining industry is always Dubai in January to attend looking for capital; it’s a the Precious Metals Comrisky business and an modities Investment Sumexpensive one. Canada’s mit. It was a bid to attract got huge potential.” wealthy foreign investors to Walker went on to say Canadian ventures and to the jurisdiction is investor create partnerships to tap friendly. However, despite into new mining markets this potential for investors, in Africa. he was quick to point out The Canadian delegathat it is always about the tion included Goldcorp, timing in these markets. Iamgold and Osisko, as “Gold in the next five well as Canada-focused years is going to face some exploration companies Virtough challenges. It’s ginia Mines, Northern going to be crucial for the Shield Resources, Orbite Precious Metals Commodities Investment Summit included a presentation from Sheikh Aluminae Inc. and Altair Maktoum Hasher Al Maktoum, a member of Dubai’s ruling family and chairman of investment miners to access funding that will help them get Ventures. “We had a good firm Shuaa Capital. through if there is a cormix of large and small rection in the price.” operators, and it wasn’t strictly limited to such high-level events and its financial Speaking during the event, Gordon gold,” said Jean Vavrek, executive direcindustry is by far the most advanced in Stothart, COO of Iamgold, said his comtor of CIM, which sponsored the event. the Middle East,” said Alexandre pany was looking to expand its investor Sam Hamad, the Quebec minister of ecoTeodoresco, managing director of Midbase beyond North America and Europe nomic development, was in attendance dle East Trade Development Agency, to promote the province’s long-term which organized the summit. “It takes into the GCC and further east. He multi-billion dollar infrastructure develsavvy investors to be able to appreciate acknowledged that volatility was a risk, opment project Plan Nord. the complexity of investing in the pre- but that Iamgold remains focused on building well into the future. This was the first time that such a cious metals mining sector.” Stothart said it was the “obvious assosummit was hosted in the Middle East. Despite the presence of free-flowing ciation” between the Mideast and Africa “We saw the opportunity to work with capital in the Gulf Cooperation Council that brought his company to Dubai in (GCC) and the well-known appetite Minister Hamad, and there was interest search of investors to complement its from a large group of investors,” said amongst local businessmen for gold, very three existing mining operations in West Vavrek. “The first time is always difficult, few companies have invested in actual Africa. and we’ll be evaluating what worked precious metals mining companies. “On a fundamental basis we’re lookThe reason, explained Teodoresco, and what didn’t, but I think we proved ing for shareholder participation in our is that until now there has been no there is major potential for this event.” company,” he said. “At a higher level, platform to educate the market on the Close to 200 investors registered for we’re looking for partners to bring new the two-day summit. However the immense investment opportunities in mines into operation and/or partners this industry and no event has audience, made up mainly of fund that themselves might have gold assets managers and institutional investors, as brought together mining executives that they’re looking to get developed — from North America and investors well as some private investors and local we could help them with that.” from the GCC. family offices, was often much smaller, “Investors in this area have a more Paul Walker, global head of precious hovering between 35 and 50. “We’ve nuanced view of the risks of investing in metals for the research and consultancy got a lot more education to do,” Vavrek Africa,” said Stothart, “whereas this is firm Thomson Reuters GFMS, said, pointed out. sometimes a road block for investors in “Dubai is an obvious place to tap into for “We selected Dubai because it offers CIM North America.” capital, not just for the wealth of the the most developed infrastructure for March/April 2012 | 19

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INSTRUCTOR: Michel Bilodeau, McGill University, Canada • DATE: October 22-25, 2012 • CITY: Montreal, Quebec, Canada

Quantitative Mineral Resource Assessments: An Integrated Approach to Planning for Exploration Risk Reduction Learn about exploration risk analysis for strategic planning. Understand how to demonstrate how operational mineral deposit models can reduce uncertainties; make estimates of the number of undiscovered deposits; and integrate the information and examine the economic possibilities. INSTRUCTOR: Don Singer, USA; and David Menzie, U.S. Geological Survey, USA • DATE: September 24-26, 2012 • CITY: Montreal, Quebec,

Canada

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Étude du projet de loi 14 L’AEMQ craint pour l’avenir de la prospection au Québec Par Alain Castonguay Les porte-paroles de l’industrie minière québécoise déplorent les changements apportés par le gouvernement Charest à la Loi sur les mines. L’Association de l’exploration minière du Québec (AEMQ) affirme même que plusieurs dispositions du projet de loi 14 seront très nuisibles à la prospection minérale. Valérie Filion multiplie les sorties publiques depuis que le gouvernement du Québec a terminé les consultations particulières sur le projet de loi 14, à la fin du mois d’août 2011. Lors d’un entretien, la directrice générale de l’AEMQ se fait encore plus cinglante. « On sait que le Ministère n’a réalisé aucune étude d’impacts sur le projet de loi 14. » Pour le ministre délégué aux Mines, Serge Simard, il est normal que l’industrie exprime son inquiétude au vu des modifications proposées. « On observe une certaine résistance au changement, ce qui est tout à fait normal », déclare-t-il lors d’une entrevue réalisée le 7 février, juste avant de poursuivre les travaux en commission parlementaire. Valérie Filion évalue à au moins 8000 le nombre de titres miniers valides menacés par l’article 91 du projet de loi. Elle estime fort probable que des entrepreneurs décident d’engager des poursuites contre le gouvernement s’ils doivent abandonner leur claim faute de pouvoir l’exploiter. L’article 91 introduit le nouvel article 304.2 dans la Loi sur les mines. Les municipalités régionales de comté (MRC) peuvent désormais soustraire au jalonnement tout terrain compris à l’intérieur d’un périmètre d’urbanisation ou tout territoire affecté à la villégiature. Cette disposition est entrée en vigueur depuis le dépôt du projet de loi 14 en mai 2011. Après l’adoption du projet de loi ce printemps, les municipalités locales et les régions auront un an pour indiquer au Ministère des Ressources naturelles et de la Faune (MRNF) leur position à l’égard du développement minier, explique Serge Simard. Les discussions se poursuivent avec le ministère des Affaires municipales pour déterminer la mise en œuvre de cette modification au schéma d’aménagement. Le détenteur du titre minier situé à l’intérieur d’un territoire ainsi soustrait devra obtenir le consentement de la municipalité avant de réaliser des travaux. Aucune compensation ne sera offerte si les travaux ne peuvent être menés sans ce consentement, ce qui irrite l’AEMQ. « À défaut de s’entendre avec la municipalité, le titulaire aura droit à la compensation pour les travaux réalisés depuis 1988, dit Mme Filion. C’est comme si l’on achète une maison et qu’on la rénove. Un jour, on se fait exproprier et on nous rembourse seulement les rénovations, mais pas la valeur de la propriété. Il faut savoir que la valeur d’un projet d’exploration ne se limite pas aux travaux qui y ont été réalisés. » L’exclusion du territoire de villégiature apparaît à l’article 96.1 du projet de loi. Le gouvernement a discuté de cette limitation avec les associations de municipalités (UMQ et FQM). Selon l’AEMQ, la définition de la zone affectée à la villégiature est trop

large et rendra la vie impossible aux investisseurs et aux dirigeants de sociétés juniors d’exploration. « Les investisseurs qui utilisent le système de gestion des titres miniers (GESTIM) ne seront pas en mesure de savoir si leur claim est valide. La disposition sur les zones affectées à la villégiature est déjà en vigueur, mais GESTIM ne peut nous fournir d’informations correctes concernant les zones affectées à la villégiature. » Le siège social de l’AEMQ se trouve à Rouyn-Noranda, et la municipalité a créé un comité pour étudier l’impact de la nouvelle loi. « Le parc industriel, l’aéroport et même le projet Joanna de la société Aurizon se trouvent dans ces zones de villégiature théoriquement exclues », explique Valérie Filion. Entre la première mouture du nouveau régime minier soumise dans le projet de loi 79, mort au feuilleton en décembre 2010, et le projet de loi 14, nous avons assisté à la tourmente soulevée par l’exploitation du gaz de schiste dans la vallée du Saint-Laurent. Selon Mme Filion, les sociétés d’exploration sont victimes de la mauvaise presse faite à l’industrie gazière, mais elles subissent aussi les revers du problème des sites miniers orphelins révélé par le rapport du Vérificateur général du Québec en avril 2009. « Nos membres n’avaient rien à voir avec les problèmes soulevés dans ce rapport. Pour la majorité des gens, il n’y a pas de différence entre explorer et exploiter », précise-t-elle. Le ministre Simard reconnaît que le nouvel article 304.2 découle directement des préoccupations soulevées dans le débat sur le gaz de schiste. « Pour les projets qui sont en gestation, on exige désormais une audience du BAPE, avec une étude d’impacts sur l’environnement. Vous comprenez donc qu’à partir de là, faute d’acceptabilité sociale, le projet n’aura pas lieu d’être », affirme le ministre. Il ajoute que le meilleur encadrement des relations entre les promoteurs et les communautés permettra d’éviter que « des gens se couchent devant les foreuses ». Selon M. Simard, le projet de loi 14 permettra aux municipalités d’être véritablement « parties prenantes » aux projets auxquels elles donneront leur aval. « Tout le monde œuvrera à l’avancement du projet. Cela prendra peut-être un peu plus de temps, mais je n’en suis pas si certain. » « On ne cesse d’évoquer l’importance de l’acceptabilité sociale dans les communautés, rétorque Valérie Filion. Mais pour les projets les plus controversés qui ont fait la manchette, la nouvelle loi ne règlera rien. » En 2011, des débats féroces sur l’opportunité de projets d’exploitation minière sont apparus dans des municipalités de l’Estrie et des Laurentides. Dans la MRC Les Sources, Bowmore Exploration a pris bonne note de l’opposition à Saint-Camille et poursuivra ses recherches ailleurs en 2012. Dans la MRC de la Rivière-du-Nord, le projet de Pacific Arc Resources soulève l’opposition. Une pétition déposée à l’Assemblée nationale par le député de Bertrand a été signée par 4382 citoyens opposés aux projets miniers dans les zones de villégiature des Basses-Laurentides. ICM March/April 2012 | 21

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Bill 14 shifts power to municipalities AEMQ fears for future of exploration in Quebec Advocates for the Quebec mining industry are voicing objections to the Charest government’s proposed amendments to the Mining Act. According to the Association de l’exploration minière du Québec (AEMQ), many provisions of Bill 14 would be harmful to mineral exploration if the bill were adopted. Valérie Filion, executive director of AEMQ, has issued many public statements since the Quebec government completed special consultations on Bill 14 in late August 2011. In an interview with CIM Magazine, she was even more scathing: “We know that the Ministère conducted no impact study on Bill 14.” However Serge Simard, minister of mines for the province, believes industry concerns merely represent growing pains, and will pass. “There is some resistance to change, which is completely normal,” he remarked. Some sections of the bill, notably Article 91, are already in effect, and will only be overturned if the bill does not pass. Article 91 adds a new section, 304.2, to the Mining Act. Under this new legislation, Regional County Municipalities (RCMs) are able to withdraw staking in zones that lie within an “urbanized perimeter” or in any “area dedicated to vacationing.” This came into effect last May, and according to Simard, “local municipalities and regions will have a year to indicate their position on mining development to the Ministère des Ressources naturelles et de la Faune.” Discussions are continuing with the Ministère des affaires municipales to define how this should be implemented. Mining title holders located within affected areas would need to get the municipality’s consent before performing any work. No compensation is to be given if work cannot be performed because of lack of consent, which irritates the AEMQ. “If there’s no agreement with the municipality, the title holder will only be entitled to compensation 22 | CIM Magazine | Vol. 7, No. 2

for work performed since 1988,” said Filion. “It is as if you were to buy a house and renovate it, only to have it expropriated and to be reimbursed for the renovations, but not the property value. We think that the value of an exploration project isn’t limited to the work performed on it.” Filion estimates that at least 8,000 valid mining titles are threatened by Article 91. She believes it is likely contractors will take legal action against the government if they are forced to abandon their claims because of inability to mine them. The stipulations regarding vacation areas appear in Article 96.1 of the bill. According to the AEMQ, the definition of an “area dedicated to vacationing” is too broad and makes life impossible for investors and managers of junior exploration companies. “Investors that use the mining title management system (GESTIM) will not be able to find out if their claims are valid. The provisions on vacation areas are already in effect, but GESTIM can’t provide us with correct information on them,” Filion pointed out. The head office of the AEMQ is at Rouyn-Noranda, and the municipality has established a committee to examine the impact of the new bill. Filion noted that major parts of the town could be affected. “The industrial park, the airport, and even Aurizon’s Joanna project are located in these vacation zones, which are theoretically excluded,” she said. Between the first draft of the new mining plan submitted in Bill 79, which died in December 2010, and the introduction of Bill 14, there was turmoil created by shale gas exploration in the St. Lawrence Valley. According to Filion, exploration companies are victims of bad press in the gas industry, and are also plagued by the problem of orphaned mining sites revealed by the report from the auditor general of Québec in April 2009.

“Our members had nothing to do with the problems raised in this report. For most people, there’s no difference between exploring and operating,” she said. Minister Simard acknowledges that section 304.2 stems directly from concerns raised in the shale gas debate. “For projects that are in the pipeline, but not yet established, we request a public hearing, with an environmental impact assessment. You must understand that from here on in, if there isn’t social acceptability, there will be no project,” asserted the minister. He added that better supervision of relations between developers and communities will prevent “people from lying in front of drills.” According to Simard, Bill 14 will allow municipalities to truly be “involved” in projects they endorse. “Everyone will work towards moving the project forward. Perhaps it’ll take a little longer, but I’m not quite sure.” “They’re always talking about the need for social acceptability in communities,” replied Filion. “But for controversial projects that have made headlines, the new bill will not solve anything.” In 2011, there were intense debates on mining development opportunities in the municipalities of Estrie and the Laurentians. Already, companies and citizens have started to react to the evolving political landscape in Quebec. Bowmore Exploration has taken note of the opposition in Saint-Camille, a township located in Les Sources RCM. The Montreal-based group plans to conduct its research elsewhere for 2012. In the Rivière-du-Nord RCM, the Pacific Arc Resources project is raising opposition as well. A petition submitted to the National Assembly by the Member for Bertrand was signed by 4382 citizens against mining projects in Basses-Laurentides vacation zones. CIM

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columns S U P P LY S I D E

Develop a strategy and move your projects forward BY JON BAIRD

ver the course of 2011, I completed strategic planning consultations with 15 mining supply firms. These ranged from small start-ups to companies with over 50 employees. Through my work, I observed an interesting commonality: with already healthy accounts in hand, all of these firms are choosing to focus on expanding and diversifying their businesses. While the key to expansion and diversification lies in a solid marketing plan, a company’s success is rooted in its ability to develop a strategic plan that takes into account all facets of its business, namely, finances, production, management and ownership or governance. Each of these 15 projects unveiled between three and eight issues that a firm must manage better in order to be more successful (only one of which is a marketing issue). Thus, given an abundance of potential initiatives, questions arise about how to prioritize issues, strategies and tactics. Even if your company has not experienced an overall strategic planning exercise, you no doubt have a list of initiatives that you want to move forward. As this is the time of year during which many firms do planning and budgeting, perhaps the following advice will be most valuable. Start by making a list of all your initiatives and organize it according to issues, strategies and tactics. An “issue” is a major concern, for example, marketing. There may be several strategies that will move an issue forward, and each may require a number of tactics. Generally, “tactics” will be the items that require resources to push strategies and issues forward. Second, determine the resources needed to implement each tactic. These may include funding, work absorbed by existing staff, additional staff requirements, consultants, etc. Third, determine any factors (dependencies) outside the given tactic on which successful implementation may depend. For example, one tactic may affect another, or a key scarce resource controlled by another department may be required to implement that tactic. Fourth, decide how you will measure the success of the areas you identified, for example, will you see an impact on the organization or a return on investment of time or money? This is easily done if revenues are expected to increase, or if costs are expected to decrease because of the tactic. At other times, the measures of success will be more qualitative, such as a tactic that will increase staff morale. Classify these impacts as high, medium or low. Fifth, based on the resources, dependencies and expected returns, prioritize the projects according to the following: • Low-hanging fruit – small projects with few or no dependencies that are expected to have an immediate impact and can be achieved with minimal additional resources. Given

that little is invested or risked, even a small return can be justified. • Intermediate tactics – small- to medium-sized projects that will make a measurable return but require new resources; they may have dependencies that have to be taken into account. • Major tactics – usually longer-term initiatives that are expected to have a significant impact, although they may require important resources and they may have appreciable dependencies outside the influence of the project team. Now you can put everything together. Begin with the lowhanging fruit. This will give you the satisfaction of getting projects off your list that may have been nagging you for a long time. Even if you are unable to justify the resources for intermediate and major initiatives, you will have begun to analyze them and will have placed them in the hopper of ideas for future implementation. Of course, you cannot escape the reality of your business and the environment in which it exists. Not every good idea bears fruit. However, having a realistic strategy developed through methodical planning will keep you moving steadily A page for and about the supply side of the Canadian mining industry towards your goals. CIM Jon Baird, managing director of CAMESE and the immediate past president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining.

GIVING BACK Helping Olympic heroes Suncor Energy announced it is extending its support to Canadian athletes, their coaches and their families, who are participating in the London 2012, the Sochi 2014 and the Rio 2016 Olympic Games. Suncor, through its Petro-Canada brand, has helped more than 2,800 athletes since the late 1980s. Its support comes through targeted programs funding Canadian sport, beginning at the grassroots level through contributing to initiatives such as the Fuelling Athlete and Coaching Excellence (FACE) program. “The real winners today are Canadian athletes,” said Marcel Aubut, president of the Canadian Olympic Committee. “Once again, Suncor is stepping up and leading by example to help ensure that Canada’s Olympic heroes have the tools to compete — and to win — against the best in the world.”

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CIM Corporate Members 48e Nord International • A & B Mylec Incorporated • Abresist Kalenborn Inc. • Accetis International • Acier St-Michel Inc. • Aciers SSAB Suédois Ltée • ACP Applied Products Ltd. • Adrok Ltd. • Aecon Mining • Agnico-Eagle Mines Limited • Akzo Nobel Chemicals Ltd. • Alberta Innovates Technology Futures • Alexander Proudfoot • Alexis Minerals Corporation • Axter Coletanche • AMEC E & C Services Ltd. • Axter Coletanche Inc. • Axxent Engineering Ltd. • Bank of Nova Scotia • Barrick Gold Corporation • BASF Construction Chemicals Ltd. • BAT Construction Ltd. • Bay6 Solutions Inc. • Biodisk Corporation • BlackRock Metals Inc. • Boreal Informations Stratégiques • Bradken • Brault Maxtech Inc. • Bucyrus • Caledonia Mining Corporation • Canadian Salt Co. Ltd. • Candente Copper Corporation • CattronTheimeg Canada Ltd. • CDC Information Center • CEMI - Centre for Excellence in Mining Innovation • CIT Financial Ltd. • CK Logistics • CMD Gears Canada Inc. • Colossus Minerals Inc. • Copper Development Association Inc. • Corporate Symphony International • CWA Engineers Inc. • Davidson Drilling Limited • De Beers Canada Corporation • Delsaer - Gestionnaires de Projets Inc. • Domik Exploration Ltd. • Harry Winston Diamond Downeredi Mining – Corporation • Hatch Ltd. Mineral Technologies • Duratray International • • Hewitt Equipment Ltd. Dyno Nobel Inc. • Eco • HLS Hard-Line Solutions Inc. • IBK Capital Corporation Waste Solutions • Esco JOIN OUR CIM CORPORATE MEMBERS • IDS North America • Corporation • FGI Supply IMAFS • Industries Atlantic Ltd. • FLSmidth • Fountain CIM can help your organization: Tire Mine Service Ltd. • Ltée • Intergraph Canada Build a stronger workforce Frontline Integrated Services • Iron Ore Company • Ltd. • Fusionex • Gemcom of Canada • Ironstone Forge valuable business partnerships • Software International Inc. Resources Ltd. • ITT Water Shape the evolution of the minerals industry • Genrep Ltd. • Geohart and Wastewater Canada • J.F. Comer Inc. • J.S. Consultants Pty Ltd. • With a CIM Corporate Membership, Global Inspections-NDT, Redpath Limited • JPi the possibilities are endless. Inc. • Goldcorp Inc. • Geo-Industry Engineering BECOME A LEADER AMONG LEADERS Golder Associates Ltd. • Consultants • Kal Tire • www.cim.org Graham Group Ltd. • Key Maintenance Gundlach Equipment Corp. • Technologies • Kinross Gold Corporation • Klohn Crippen Berger Ltd. • Knelson Gravity Solutions • Lafarge Canada Inc. • Laforest Nova Aqua • Laird Constructors • Levert Personnel Resources Inc. • Lubrifiants Saint-Laurent Inc. • Mabarex Inc. • Maptek • Metals Economics Group • Micromine Ltd. • Mine Cable Services Corporation • Mistras Group Inc. • Mullen Trucking LP • National Mine Service of Canada • Newalta Corporation • NL Department of Natural Resources • Norseman Structures Inc. • North Fringe Resources Inc. • Nuna Logistics Limited • Oboni Riskope Asociates Inc. • P&H MinePro Services Ltd. • P.R. Engineering Ltd. • Pacific Bit of Canada Inc. • Parkland Fuel Corporation • Paul F. Wilkinson & Associates Inc. • Polar Mobility Research Ltd. • Polar Star Mining Corp. • Potash Corporation of Saskatchewan • Praetorian Construction Management • PROVIX, Division of Winsted Group • Purves Redmond Limited • RAX Enterprises Inc. • Resource Engineering & Maintenance Magazine • Richwood • Rio Tinto Iron and Titanium Inc. • Rockhound Limited • Rockwell Automation • Rocking Horse Energy Services Inc. • RW Consulting and Training Services Ltd. • Schlumberger Water Services • Sentry Equipment Corp • SGF Mines Inc. • Sinergeo Lda. • SKF Canada Limited • SMS Equipment Inc. • Snowden Group • Stewart Craike Management Inc. • STM Associates • Stonewater Resources Ltd. • Suncor Energy Inc., Oil Sands • Surplec Inc. • Synthesarc Inc. • Talent Intelligence • Team Power Solutions • Teck Resources Limited • Tega Industries Canada • Texel Géosol • The Mosaic Company • Ultra Seat Corporation • Veyance Technologies Canada Inc. • Victaulic Company of Canada Ltd. • Wabush Mines • Waterous Power Systems • Watts, Griffis and McOuat Limited • WesTech Engineering, Inc. • Western Potash Corp. • Westfalia Separator Canada Inc. • Wire Rope Industries Ltd. • Women in Resource Development Corporation • Wugang Canada Resources Investment Ltd. • Xstrata Process Support • And many more…

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columns HR OUTLOOK

Workplace diversity: growing the talent pool for the mining industry BY RYAN MONTPELLIER

he pending retirement of the baby-boom generation, dif- ment of recruiting for either technical or soft skills. Because ficulties in attracting and engaging youth, and an under- attracting seasoned experts in each area was a priority, technirepresentation of diverse groups, paint a clear picture of cal skills prevailed. To fill in the soft skills gap, Baja’s HR team the challenges Canada’s mining industry will face in the com- designed and implemented an Intercultural Sensitivity Proing decade. gram to give employees the tools they needed to effectively While the industry has made tremendous strides in adapt to the new cultures they would be exposed to. “A lack of addressing these issues, finding experienced and skilled work- cultural awareness can lead to costly delays, misunderstanders is becoming more difficult, and comings and, often, personal frustration on petition across sectors of the economy is the part of the communicators,” Sinclair “A lack of cultural swelling, according to the Mining Industry points out. Human Resources (MiHR) Council’s latest Training in intercultural communicaawareness can lead report, Canadian Mining Industry Employtion assists businesses and individuals in to costly delays, ment and Hiring Forecasts 2011. achieving their goals in negotiation, deciThe most pessimistic forecast predicts sion-making, strategic planning and colmisunderstandings half of the mining workforce will be eligilaboration as successful teams. It and, often, personal ble to retire by 2021, creating a deficit of addresses perceptions, cultural profiles, 75,000 replacement workers. A period of contrasts and differences, and it provides frustration on the relative stability will see that number balinsight into how these can be better manpart of the loon to 112,000. aged to ensure positive results. communicators.” MiHR has developed a number of Baja’s intercultural training is faciliresources, such as Mining for Diversity, tated in two-day sessions. On the first day, M.-L. Sinclair Mastering Aboriginal Inclusion in Mining and participants are introduced to cross-culthe Take Action for Diversity Report, to help tural research and theory. The next day, mining companies attract and retain non-traditional sources of they receive a personalized report and are guided through its talent that have previously been under-represented in mining. contents to learn how they interact with individuals from difMiHR Innovate and the Take Action for Diversity Network are ferent cultures and how to modify their interactions to become both examples of communities of practice that foster knowl- more successful. edge sharing among mining HR professionals from across To date, Baja has delivered three workshops: two at its site Canada. The Network’s focus is on implementing inclusion and in Santa Rosalia, Baja California Sur, Mexico, and one at its diversity strategies, while MiHR Innovate concentrates on work Vancouver office. According to Sinclair, the response from environment and culture, learning and development compen- employees has been positive. “The program was wellsation, rewards, recognition and company reputation. received,” she says. “It generated quite a bit of exchange among The following is an example of an innovative approach to participants, as well as a willingness to learn. The majority of workplace diversity, as submitted to MiHR Innovate by Baja participants agreed that the session was of interest and relevant Mining Corp., for the benefit of other organizations facing to their work.” similar issues. Sinclair says Baja is confident that this initiative will provide Baja is a Vancouver-based mining company that is currently attendants with a better understanding of their own behaviours transforming into a producer. Baja and a consortium of Korean within different cultural settings. It will also show them how companies own the Boleo project, a large polymetallic prop- adapting behaviours can help them become better communicaerty with near-term production and a long mine life, located in tors and more efficient in their roles in foreign locations. CIM Baja California Sur, Mexico. In 2010, when Baja started recruitment activities, talent To view or contribute to the MiHR Innovate collection, visit requirement needs were identified, and profiles emphasizing www.mihrinnovate.ca. To technical and soft skills were created. Due to the international access MiHR’s publicalocation of the project, profiles included candidates with pre- tions, visit www.mihr.ca or vious international experience, exposure to Latin American email info@mihr.ca.

cultures and fluency in Spanish. When recruiting for these positions, says Baja’s human resources director, Maria-Luisa Sinclair, HR faced the predica-

Ryan Montpellier is the executive director of MiHR. Currently, he sits on a number of boards and provincial committees dealing with labour shortages in the mining sector.

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EYE ON BUSINESS

Mining regulatory landscape changes in Peru: a state of emergency? BY KEVIN O’CALLAGHAN AND LEAH PLUMRIDGE

ith the election of Ollanta Humala and recent legislative changes, Peru’s already scrutinized mining industry is facing significant challenges. To fund its anti-poverty infrastructure, Peru introduced a new mining tax and royalty regime last October. As Peru is a leading producer of silver, zinc, gold and copper, foreign investors will need to ensure compliance to the new regime. The new law – which increases the tax burden for mining operators to between 41 and 45 per cent of operational profit – was discussed with affected companies prior to being submitted to Congress, thus garnering support from investors. There is some concern, however, that because the new regime supersedes the previous “voluntary contribution” scheme, it may result in decreased corporate social responsibility expenditure in communities local to mining operators. Local and regional governments have recognized they have been unable to efficiently invest hundreds of millions of dollars available for anti-poverty infrastructure. The new mining tax will re-direct these funds centrally, so they can be used in areas throughout Peru that are in need. The law involves two structures, allowing for the preservation of stabilization agreements previously executed with the Peruvian government, and exempting the new tax for the

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term of these agreements. Mining companies and integrated entities without stabilization agreements will be subject to a special mining tax at a progressive marginal rate of two to 8.4 per cent of operating profits from the sale of metal and nonmetal mining resources, collected on a quarterly basis. Mining companies and integrated entities with stabilization agreements that sign a voluntary agreement will be subject to a special mining contribution at a progressive marginal rate of four to 13.12 per cent of operating profits on a quarterly basis. Changes to the royalty system include amendments to the rates, tax base and the events triggering the obligation to pay. The mining royalty is now to be paid on a quarterly basis, rather than monthly, and is calculated based on a progressive marginal rate of one to 12 per cent of operating profits with a floor of one per cent of net sales. Effective rates are in the range of one to 6.3 per cent. Previously, the marginal rate was one to three per cent of net sales. The Peruvian Congress unanimously passed the Law on the Right of Consultation of Indigenous Peoples in September 2011, two years after the clashes in Bagua saw 30 police officers and protestors killed. The law implements Peru’s obligations pursuant to the International Labour Convention 169, which was ratified in 1993.

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columns The law gives indigenous communities the right to apply to the government to open a consultation process with respect to any project that will affect their traditional lands. If the government rejects an application, the indigenous community has a right to challenge the decision to the Specialized Technical Entity on Indigenous Affairs, and further, to the courts. An agreement reached between the government and indigenous community is legally binding and enforceable. The government has the final say where agreement cannot be reached; however, it is still required to ensure that measures are in place to protect the rights of indigenous people. While the hope is that enacting new laws regarding indigenous consultation will bring comfort to the minds of foreign investors by diminishing the risk of local clashes around mining projects, conflict in the region continues. After protestors were injured last November, the Newmont Mining Corporation ceased work on its Conga project, a $4.8-billion extension of Peru’s largest gold mine in the northern region of the country. The company says its plans to move water from four lakes to reservoirs were drawn up in consultation with local communities and meet the highest environmental standards. Nonetheless, protests prompted Humala to introduce a state of emergency in many of the northern provinces.

Humala blamed the “intransigence of local and regional leaders” for the inability to reach even the most basic agreements that would ensure peace and re-establishment of local services. Thus, he instituted the security measure that was to remain in effect until early February 2012. Local elected leaders, including Cajamarca’s governor, led protesters who demanded a new environmental impact study be conducted. While it may be too soon to tell what impact the new laws will have on stability in the region, the current protests and the state of emergency in Peru suggest that even those projects that undertake careful consultation and environmental impact studies are not immune from the risk of work stoppages due to local conflict. Although the new laws give indigenous communities the right to initiate a consultation process, it would be prudent for mining companies to proactively initiate a process that includes input, not only from indigenous communities, but also from all regional stakeholders to ensure support for their proposed project. CIM

Kevin O’Callaghan is co-chair of Fasken Martineau’s CSR Law Practice group and gives strategic advice to the extractive industries on aboriginal (indigenous) law, environmental assessment, and other CSR issues. Leah Plumridge was an articled student with Fasken Martineau in Vancouver.

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S TA N D A R D S

Mineral disclosure in brine recovery projects BY CRAIG WALDIE AND JAMES WHYTE

everal years ago, with expectations of a high demand for lithium, exploration companies began to invest in lithium projects. Some were hard-rock pegmatites with lithium mineralization, but others were a geological type not foreseen by securities rules – the mineral-brine resources of sedimentary basins in arid areas, commonly called salars, which are often found in the “lithium triangle” region of South America that straddles the borders of Argentina, Bolivia and Chile. National Instrument 43-101 (NI 43-101), which stipulates standards of disclosure for mineral projects, and the CIM Definition Standards on Mineral Resources and Mineral Reserves were both originally drafted with hard-rock mineral deposits in mind. Nevertheless, NI 43-101 also provides a proper and rigorous disclosure framework for mineral projects hosted in brine, and it is the form of the mineral that is relevant to the analysis concerning the application of the instrument, not the

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type of host medium from which a mineral is extracted (e.g. hard rock or mineral brine). In addition, many market participants, including investors, see mineral brines as a mineral project and expect similar disclosure rules and definitions to apply. On July 22, 2011, the Ontario Securities Commission published Staff Notice 43-704 Mineral Brine Projects and National Instrument 43-101, which provides companies and their Qualified Persons guidance on our interpretation of both NI 43101 and CIM definitions, and how those rules and guidelines apply to mineral brine projects. It should be noted that the Notice reflects the views of OSC staff and does not necessarily reflect the views of OSC, other jurisdictions, or the Canadian Securities Administrators. OSC staff believe mineral brine projects fall within NI 43101’s definition of mineral projects, and that the public interest is served by having mineral brine projects subject to the

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columns Instrument. The Notice also expresses the view that companies and Qualified Persons should disclose their opinion on whether or not a mineral brine project falls within or outside of the CIM Definitions of Mineral Resource and Mineral Reserve. Should it fall outside, we believe that companies should disclose how they intend to comply with the requirements of NI 43-101 that rely on these definitions, including the technical report triggers. Therefore, regardless of a company’s position on the scope of the CIM definitions, compliance with the requirements under NI 43-101 is still expected. Disclosure of mineral-brine resources and reserves should still conform to Parts 2 and 3 of NI 43-101, including the requirement to express resource and reserve figures as a quantity and grade, and to disclose key assumptions and parameters that define the resource or reserve. Technical reports on mineral-brine projects need to discuss aspects of those projects that apply particularly to mineral brines. The Notice provides a non-exhaustive list of considerations, which companies and Qualified Persons should reflect upon when satisfying the technical report form requirements. These include hydrogeological information, such as porosity, permeability and the geometry of the aquifer; however, the report should also discuss matters like climate and surfacewater balance, and the kind of mineral tenure that can be

exerted on a brine resource. For advanced properties, the technical report’s section on mining methods is the place to detail proposed well field designs, expected pumping rates and predicted production over time. The evaluation of mineral brines is complex, and Qualified Persons should either be hydrogeologists or engineers with adequate experience in salar geology and brine processing. In many cases, a multidisciplinary team approach may be necessary when preparing technical reports. For an informative overview of some of the important challenges and technical issues on mineral brine projects, you may consider having a look at the paper by John Houston et al.: “The evaluation of brine prospects and the requirement for modifications to filing standards,” published in the November 2011 edition of Economic Geology. CIM To view the OSC Staff Notice 43-704, visit: http://www.osc.gov.on. ca/en/32631.htm. The views expressed in this article are those of the authors and do not necessarily represent the views of the Ontario Securities Commission. Craig Waldie (left) and Jim Whyte (right) are both senior geologists with the Ontario Securities Commission, and are responsible for NI 43-101 compliance reviews of prospectuses, technical reports and other regulatory filings of Ontario-based mining companies.

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GUEST COLUMN

Developing mining projects in Latin America through Canadian capital markets BY JORGE NEHER

n recent years, Latin America has become a preferred destination for mining investment, especially for Canadian companies. Prospective regions, such as the Andean range, the Guyana greenstone belt and the Cuadrilatero Ferrifero in Brazil, coupled with several business-oriented jurisdictions, easy transportation links and western culture, make it a “no brainer” destination for international ventures. Greenfield projects for mineral exploration usually begin with acquiring mining properties from local owners or by applying for mining properties. In these early stages, exploration companies generally do not pay much attention to holding structures and regulatory matters; they simply secure the properties (sometimes just barely) and start exploring. But soon enough, when exploration has yielded some encouraging results, and the company is prepared to raise significant capital in the market to advance, joint venture or sell the project, such lack of attention to properly structure the project at the beginning may come back to haunt them. The value of projects, for purposes of financing, equity issues, joint venturing or sale, will be determined not only by their geological resources and potential, but also by additional factors, including tax base and transactional costs, registered value of the investment for capital repatriation and tax deductions in the host country, and the ability to assign or to effect changes of control of mineral properties, among others. Usually, assignment of, or security over, mining rights in Latin America is subject to approval from, or registration

GIVING BACK Driving the Fort McMurray Food Bank The 19th annual Syncrude Food Bank Drive, held last December, collected $265,000 in donations and more than 44,000 pounds of food for people in need in the Fort McMurray area. A $50,000 donation got the ball rolling, and a corporate challenge bumped that figure to $218,000 by the end of the day. Arianna Johnson, executive director of the Fort McMurray Food Bank, said she was grateful for the time and effort that Syncrude employees give each year. “We’re proud to be associated with this organization and I want to thank the people who volunteered,” said Syncrude president and CEO Scott Sullivan. Syncrude has supported this drive since 2005, contributing $360,000 to date.

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before, mining authorities. These processes may take some time and can be discretionary. If mineral properties were not previously placed within a vehicle that could form part of an acquisition, financing, or property package, such approval procedures could derail the transaction and affect its value. Also, if the exploration company has not properly structured and recorded its investments, some of these investments may not be deductible for income tax purposes, potentially impacting the value of the project as well as reducing the tax base for any dispositions. In some countries, the ability to repatriate dividends and capital is linked to registration of direct foreign investment (DFI), so it is imperative to do this properly and in a timely manner. Regulatory matters are often an issue: it is never too early to tackle zoning, permitting and technical matters. In addition, some Latin American countries still exhibit some degree of political risk; therefore, it is important to structure the ownership chain of the project through a jurisdiction with which the host country has an investment protection treaty. Last but not least, Canadian securities regulators have become increasingly inquisitive and require a broader amount of information when analyzing disclosure documents for reverse takeovers, initial public offerings or equity financings with an international asset component. They sometimes check the entire holding structure of any material assets and ask to see detailed information, such as acquisition documents, due diligence reports, local legal opinions and more. In brief, in order to turn exploration successes into economic successes, prospectors should follow these recommendations as early as possible in their projects: • Structure projects with an offshore component, allowing for tax-efficient divestments and quick and easy assignments of interests. • Structure investments in a way that most of them can be registered as DFIs and are tax deductible. • Tackle and resolve regulatory issues early on. • Document due diligence procedures, opinions and acquisitions as much as possible under North American standards. Then, take a look at Latin America, the most incredibly prospective and investor-friendly region on the planet for resource projects – and happy hunting! CIM Jorge Neher is a partner with Norton Rose Group, a leading international legal practice. He is based in Colombia and Venezuela, with a practice focused on mergers, acquisitions and finance of natural resources projects all over Latin America.

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upfront HUMAN RESOURCES by Alexandra Lopez-Pacheco

HR prospecting and developing Perspectives on finding, cultivating and keeping talent good, and voicing the message that the world needs metals, and if we can make mining even better, the whole world benefits.’”

Go long

Courtesy of MiHR

Have a long-term plan rather than just having HR policies based on short-term needs and economic cycles. “We do a lot of workforce planning and there have been times in tough economies when we’ve actually over-hired, putting in buffer positions, knowing we have a crunch coming,” says Tom Diment, Agrium Inc.’s vice-president of potash and phosphate operations in Saskatchewan, whose company recently hired 13 engineering grads. “Sometimes we get the people when they’re available even if we don’t need them at that moment. We only had nine positions availOpportunities for transfer of knowledge from the older generation to those entering the industry is one of the most attractive things a company can offer new recruits. able but we went to leadership and told them we want to hire four extra ones because they’re so ound solutions to human resource challenges are at the great, and it was a two-second conversation to get the approval.” core of all business successes – especially mining. A good strategy starts with focusing on developing the local There are many best practices out there being used by population, particularly Aboriginal peoples, says Richard the industry that have earned some of its members Long, professor and head of human resources and organizaprovince and countrywide recognition. So how can a company tional behaviour at the University of Saskatchewan. “If you distinguish itself? CIM Magazine sought insights from employ- start with training programs when they’re relatively young, ees and potential employees, as well as employers and HR you’re going to have better retention,” explains Long. “You’re experts, all of whom ultimately want the industry to be suc- hiring people who want to live in the community rather than renting employees and flying them in.” cessful. The following are some of those insights. Syncrude Canada Ltd., for example, invests heavily in programs geared to high school students. “We have an employee Speak up! on loan at Father Mercredi Community High School in Fort While mining companies are competing with each other McMurray, who teaches welding there,” says Cheryl Robb, for talent, they are also competing with other industries. “I spokesperson for Syncrude Canada Ltd. “We also donated $1 think there are a number of initiatives targeting youth, high school students, new Canadians and Aboriginal people, but million to the school to build new science and technology labs. as an industry, I don’t think mining has done a whole lot to We try to attract people and individuals as employees and communicate the value it brings to society and the career grow them so they have long careers with us.” opportunities it brings,” says Ryan Montpellier, executive The company also recently donated $5 million to Keyano director of the Mining Industry Human Resources Council. College, with $2 million of the donation going towards the He cites the recent Rio Tinto commercials, which promote Syncrude Aboriginal Trades Preparation Program there. the company’s CSR efforts and positive contributions, as an example of signs this is starting to change. “I think you’re Open up the workplace going to see more and more of this type of thing as the war A company that offers a cookie cutter career is going to be for talent grows,” he explains. left behind in attracting young talent. “You’re looking for a Ryan Cunningham, an engineer who recently left his PhD career that’s challenging but also offers diversity, so you can studies to work full time in the industry because the oppor- move around and learn what’s going on in the industry,” says tunities were too great to put off, says the mining sector Rory Grunerud, a fourth-year engineering student at Univerneeds to join the conversation. “There’s a lot of people who sity of British Columbia. go out there and really rip the industry, but we don’t have “I think the key is allowing people to be multi-faceted if the champions of counter-communication saying, ‘Yeah, they have different passions,” says Cunningham. “The current there are things that are wrong, but we’re doing a lot of generation is generally more into teamwork and collaboration;

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upfront HUMAN RESOURCES

whereas previous generations were more like ‘work in your cubicle by yourself.’” “We try to develop experts in many fields,” adds Diment. “There are people who work in a silo and stick to a particular field and role, and we love them, but at the same time there are people who, while they’re young and mobile, should get a broad experience so they become more effective leaders as they work through their careers and we ensure they have those opportunities.”

Bridge the generation gap “There’s a generation that’s about to leave the industry,” says Cunningham, “and they have an immense amount of knowledge. I don’t know a single person in my age group who wouldn’t love the opportunity to spend the time with the older group, learning from them, having them as mentors.” Grunerud concurs, citing the opportunity for transfer of knowledge from the older generation as one of the most attractive things a company can offer new recruits. In fact, he says it is a big plus when companies allow young engineers being interviewed to speak with chief or senior engineers. “One of our staff at the research facility started out as a coop student,” says Robb. “One of the reasons he was attracted to the company was the opportunity to work with some of our employees, who are seen as pioneers in the industry.” Mentoring programs are attractive to young recruits for another reason: the industry has a generation gap, with few in between the boomers approaching retirement and the younger generation coming into the industry. “We’re going to be left with these huge responsibilities and making huge decisions without anyone checking to see if we’re right,” points out Cunningham. “Without the transfer of knowledge, we’re going to be walking a tight rope and we’re going to be understaffed.”

hadn’t, I would have been viewed the same as a recent graduate with no work experience and offered a lower position in the company,” says Xie. Syncrude, which uses a third-party to evaluate foreign credentials, has also supported Xie in acquiring his professional engineering accreditation, paying for his exams and textbooks.

Raise your profile “People want to be part of a winning company,” says Diment, whose company’s recent awards include being named as one of Canada’s 10 Most Admired Corporate Cultures of 2011 and Canada’s Top 100 Employers for 2012. Syncrude was also recently named one of Alberta’s Top Employers. In fact, there are a number of mining sector companies, including Goldcorp and Rescan Environmental Services Inc., which have made it to the top employers in Canada lists this year. “Winning the awards certainly helps in the attraction of people when we’re going out there and trying to hire the best talent,” notes Diment. “It’s a great lever to be able to say ‘Many people who work for us agree we have a great culture and are a great employer, and we have some awards to back it up.’ But I’ll be honest, the people we interview, we expect them to look behind the veil and make sure it’s true and not 1 12-03-06 1:58 PM just a façade.” CIM

Diversify your human assets Having a diverse workforce is a competitive advantage in various ways. “We’ve been working for several years on our diversity program to ensure we’re tapping into all demographics,” says Diment. “We believe diversity also makes us a more competitive and efficient company because you’re getting many different perspectives. It also goes hand in hand with our growth strategy of being very global.” When attracting new Canadians, foreign credentials can be a hurdle. Take the case of Ben Xie, a process engineer who works for Syncrude. He had worked for years in the mining industry and held various degrees, including a PhD in chemistry, which he received in China in 2003. “My background was applied chemistry, which in the Chinese education system is like chemical engineering but in Canada, it’s treated as a pure science degree. It’s a sort of miscommunication between the education systems,” says Xie. “But for myself, I thought it was important to relearn it in English, so I went back to school for two years at the University of Alberta and that decision was very good for my career.” When Syncrude hired him in 2008, the company recognized his foreign work experience and credentials. “If they March/April 2012 | 35

upfront MINE SCIENCE by Anna Reitman

Keep your options open How stochastic mine planning can quantify and capitalize on uncertainty economic values along with more metal production expectations.” In brief, to incorporate stochastic theory into mine planning is to take into account that mines operate in uncertain, complex and high-risk global environments. The variables affecting a mine can combine in any number of ways, and their complex relationships can change dramatically over the life of a mine.

A history of the concept

MCpl Dany Veillette

When Paul Anderson took over BHP in the late 1990s, he would receive reports from oil divisions probabilistically, meaning that figures for estimated cash flows and other key indicators were accompanied by statistical reference points on how likely those targets were to be met. For the mining divisions, that range of probabilities came On February 27, Roussos Dimitrakopoulos was awarded the Leo Derikx Award, one of the annual Synergy Awards for down to just one number. Innovation presented by the Natural Sciences and Engineering Research Council (NSERC). “The mining industry doesn’t embrace statistical analysis the way hereas technology was once used to evaluate what the petroleum industry does,” says Anderson, who retired happened in the past, mathematical modelling and from BHP Billiton as managing director and CEO in 2002. computation power is increasingly being focused “For instance, the theory we were pursuing at BHP was: could on gaining foresight. In other words, miners are you have a mining company that had a sustainable dividend now driven to determine the smartest way to plan operations, rather than being subject to the cyclicality of most mining while taking into consideration all possible outcomes. companies? A lot of others in the industry said you couldn’t do The name for this is “stochastic” mine planning – a process it, that it is a cyclical industry and that stochastic techniques based on complicated mathematical models that challenge the are just a bunch of fluff to make it sound like you are sophisvery foundation of how operations have been conceived. ticated.” Along with BHP’s CFO at the time, Chip Goodyear, AnderThrough this new lens, instead of one answer to the question son undertook an enterprise-wide project to apply probabilis‘what is the most profitable way to mine?’ miners can see sevtic outcomes of mining projects, taking into account oil prices eral options. And, though all paths remain uncertain, the use and the various minerals and currencies they were dealing of quantified uncertainty is very profitable. with. By weighing out each of the projects, they came up with a cash flow at risk curve for the entire enterprise, allowing Be sure of uncertainty “Conventional mine scheduling wisdom is to mine the them to make decisions about whether to invest in, for examhighest economically valued parts of an ore body first, and to ple, a copper mine in Chile, an iron ore mine in Australia, or base your actions on the average of the possible places where an oil well in the Gulf of Mexico, while minimizing volatility that high economic value lies,” says Roussos Dimitrakopoulos, of earnings. Canada’s research chair in sustainable mineral resource develThe proof, says Anderson, is in the pudding. “BHP Billiton’s opment and optimization under uncertainty at McGill Univer- dividend has increased steadily since we started this and there sity. “Stochastic mine planning, in contrast, evaluates multiple have been reasonably steady earnings in good times and bad; possibilities to minimize deviation from production targets. it seems to have allowed the company to invest aggressively The financial implication is that you are led to higher and still maintain a healthy dividend string. I credit the

36 | CIM Magazine | Vol. 7, No. 2

upfront MINE SCIENCE

enterprise-wide approach. I think we made better business According to Dimitrakopoulos, “the upgrade creates bottledecisions on individual mines from the standpoint of having a necks. The first one is that academic groups do not have the simulation of the various potential outcomes as opposed to a capacity to provide commercial tools all the time. And even if point estimate.” the software was commercially available, it would require time It was during the infancy of these developments that Dim- and investment in training.” itrakopoulos, who was then a professor at Queensland UniverHe adds that BHP Billiton and Newmont are notable examsity in Australia, was approached by BHP’s team which was ples of companies that take a modular approach in implementseeking expertise. The resulting research helped the professor ing concepts that come out of McGill’s research centre, picking establish stochastic mine planning as a and choosing relevant innovations. new field of academic research, with him Future research objectives at the “There is always resistance squarely in the lead worldwide. COSMO lab include branching out past to changing the way we think uncertainty in mineral deposits to conAfter moving to Montreal, Dimiand do things… trakopoulos, with the support of a consider other factors, such as how market But that resistance is part sortium of six global mining companies: prices and dynamics of multiple sites BHP Billiton, AngloGold Ashanti, Barrick of how technologies, science impact schedule planning. DimiGold, De Beers, Newmont and Vale, trakopoulos, his industry partners and and engineering evolve. established the COSMO Stochastic Mine his team are well positioned to move – R. Dimitrakopoulos Planning Laboratory at McGill in 2006. forward, as they recently won the Leo “Ideally, I would like to see colleagues Derikx-Synergy Award for Innovation. trained in these new concepts,” says Dimitrakopoulos. “We Provided by the Natural Sciences and Engineering Research should have the tools so that any decision maker who works Council of Canada (NSERC), the award was presented by in a mining company or in long-term mine planning, and who the Governor General of Canada, David Johnston. This new wants probabilistic reporting and flexibility and advanced pro- award adds to a five-year, $2.7 million NSERC collaborative duction decisions, can come to us for training and informa- research and development grant given to Dimitrakopoulos tion. With the right concepts, understanding and tools, it’s and his partners in 2011 entitled Developing new global stopossible to answer questions such as, ‘How certain are you of chastic optimization and high-order stochastic models for optiwhat you are going to be mining?’ or ‘What group of projects mizing mining complexes with uncertainty. “Dr. and operations will shelter stability and growth?’ And it’s the Dimitrakopoulos is an outstanding researcher with same thing for market forecasts and their impact on schedules renowned expertise in the optimization of mining comor plans.” plexes,” says NSERC president Suzanne Fortier. “Given the importance of mining to the Canadian economy, his research The daunting task of change has the potential to generate significant economic and envi“There is always resistance to changing the way we think ronmental benefits for Canada, and to enhance our position and do things,” Dimitrakopoulos points out. “But that resist- as a world leader in this field.” CIM ance is part of how technologies, science and engineering evolve. Philosophers of science write books about the difficulty of change. We need to be investing more openly, and this is particularly true about the mining business. The largest companies invest, but, in general, research can be very nearsighted and very short-term, which threatens the healthy long-term existence of the industry.” Part of the problem, he explains, is that upgrading an operation with stochastic optimizers is a daunting task – not just in practical terms, such as changing every single computer system at a mine, the way processing is conducted at mills, the system for stockpiling and shipping of final products and waste dump placement, but also in terms of changing people’s habits, the way they are educated, and the way they think. March/April 2012 | 37

upfront Q&A by Graham Lanktree

Bullish on human capital

Courtesy of Barrick Gold

Peter Kinver drives Barrick to efficient operations

Peter Kinver speaking with employees at the Lagunas Norte mine in Peru

here are greater demands on mines and their owners from neighbouring communities today than ever before, says Peter Kinver, who has 38 years of experience working on nearly every facet of mine operation, from start-up to mine closure. That’s why, as COO at Barrick Gold, he has placed such an emphasis on human capital. Kinver attributes the productivity of Barrick’s South American operations to an approach that balances production and the importance of forging strong relations with employees and communities.

CIM: What element of your job do you get most passionate about? Kinver: One of the key elements of my job is coordinating the well-being of our 25,000 employees and as many contractors. True, I’m responsible for all our operations – the day-to-day activities and building of the mines – but what I’ve found in my 38 years in the industry is that if community, health, environment, safety and security issues are being taken care of and are going well, production follows. We’re not perfect, the industry isn’t perfect, but we’ve raised 38 | CIM Magazine | Vol. 7, No. 2

our game on these matters and we are focused on continually improving our performance. CIM: Under your watch, what are some main things you’re working on to improve Barrick’s operations? Kinver: I’ve invested a lot of time in our training programs. With the help and guidance of Don Ritz, senior vice-president of safety and leadership, we’ve introduced the Courageous Leadership program to focus on health and safety. Through it, our total incident rate has improved 67 per cent in the last five years. I also put a lot of emphasis on human capital and moving our employees between our operations around the globe. It’s a very good retention tool for key staff. Since the resource sector is booming, it’s essential to keep working on new strategies. CIM: Last fall at the International World Gold conference you placed some emphasis on South America. Why did you choose to focus on what Barrick is doing there? Kinver: Barrick is a very global company and each of our operating regions has different strengths and unique challenges.

upfront Q&A

I’m very proud of our South American operations. They’re the front-runners in areas of productivity and one of their key strengths is that they work really well with local communities. Our mines there are almost entirely staffed by locals. Very few expats work there. Barrick South America has also embraced the fact that new ideas coming directly from our employees on the ground are important. An idea that may seem small at first could potentially save millions of dollars, so recognizing employees who’ve come up with a better way of doing something is vital. CIM: What strategies are you using to maximize the value of Barrick’s South American mines? Kinver: The best way to add value is to discover more ounces as safely and cheaply as possible. So we’re pursuing more exploration projects to extend the lives of our mines. Success in that area is all about track records and results, but it’s also important that mines have good relations with their neighbours. I try to get to the mines as often as possible. It’s the highlight of the year for me. Before I visit, I look at all the metrics and my team will focus on a handful of issues that need to be improved, be it community relations or recovery, and we ask ourselves: ‘How is this mine going to make changes to get back to best practices?’

company. What I do is try to create an environment that fosters innovation. Right now, they’re working on how to improve the way we drill and blast. I’m also keen on looking at the potential of replacing diesel engines with liquid petroleum gas, which would burn cleaner in our big trucks. And we’re working on using sustainable energy, such as solar and wind energy, to power our operations. CIM: Of all the places you’ve travelled for work, which was the most interesting to you? Kinver: Certainly in South America, the mines we’re building there and at Pueblo Viejo in the Dominican Republic are feats of engineering. They’re very complex projects on a big, exciting, challenging scale. CIM: During your foreign postings, what were some important lessons of mine operation that you took away with you? Kinver: From the days when I started in mining, the way we treat people has really changed a lot. Production used to be important above all else. Now, treating people fairly and achieving a balanced approach to production has come to the fore. To me, how operations are affected by the combination of community, health, environment, safety and security has been an important lesson. CIM

CIM: Can local factors sometimes be enough to cut off a mine’s life? Kinver: We’ve seen mines that have been unable to start or that have closed because of local factors. There are greater demands from neighbouring communities today, so before an exploration team from Barrick sets out, we engage them to help them understand what we’re doing. Sometimes that can take a few years. CIM: Some of Barrick’s South American mines are at high altitudes. How are you meeting the challenges this environment poses? Kinver: From the human resources side, it impacts productivity. People are unable to operate at the same pace under those conditions. The same goes for machines. Diesel engines need to be modified to deal with thinner air. But we’ve been operating at high altitudes for the past 15 years and we now have lots of first-hand experience at diagnosing altitude sickness. We have medical stations at different altitudes where employees can take breaks. We keep small oxygen bottles in the cabs of our trucks, and we encourage workers to stop and have a breather if they’re feeling dizzy. CIM: How much knowledge of the technical details of mining technologies do you need to find operating efficiencies? Kinver: In my role it’s more important to understand the working environment. We have a top-notch research and technology team in Vancouver and our engineers there spend their days looking for technical solutions for our operations around the world. Say if we have a very low recovery rate of a certain type of ore, their work adds tremendous value to the

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Ecuador Colombia A shared border, but worlds apart on policy by Virginia Heffernan

Gold and silver producer Gran Colombia Gold aims to add the open pit Marmato project to its portfolio of operations, which includes five mines and the Maria Dama plant shown above. Courtesy of Gran Colombia Gold

42 | CIM Magazine | Vol. 7, No. 2

Once amalgamated as part of the republic of Gran Colombia (1819-1831), Ecuador and Colombia share similar history, geology and mineral potential. But their approach to mine development is rapidly diverging.

hile their Andean neighbours to the south, Peru and Chile, have long embraced foreign investment in mining, Ecuador and Colombia are emerging gold and copper producers that – depending on the how they play their cards – could either become global mining powers or regions where explorers and their financiers still fear to tread. Rising commodity prices, particularly for copper and gold, have fuelled the rush to these relatively high-risk South American jurisdictions. With metals trading at or near record levels, mining companies are willing to take on more political risk in order to secure land that is both prospective and underexplored. There is no question about the geological potential of Colombia or Ecuador. The northern Andes host significant gold and copper deposits and large deposits of coal and iron ore. Colombia has the largest coal reserves in South America and ranks seventh in the world in gold exploration spending. Ecuador is home to one of the biggest gold discoveries of the past decade, Fruta del Norte, in the jungles of the southeast.

Although current gold production in Colombia is mostly small scale from placer and vein-type deposits, there are several larger gold deposits, such as La Bodega and Marmato, some of them related to large porphyry copper systems. In Ecuador, epithermal, skarn-type gold and porphyry copper deposits are plentiful. In the 2011-12 Fraser Institute Survey of Mining Companies, Colombia rates well above Ecuador on the indexes that evaluate attractiveness for investment, policy clarity and mineral potential. The mining community, however, remains dubious about the security situation in Colombia. “Ecuador is a very prospective country with a longer history of established mining, but it has an anti-business

government, and that makes all the difference,” says Jorge Neher, an international partner for law firm Norton Rose (which recently merged with Macleod Dixon), based in Bogota. “It is not an attractive jurisdiction to pour money into. Colombia is the total opposite: a very prospective country that is underexplored but with pro-business regulations and government.”

Colombia becoming more secure, but risks remain Colombia can expect GDP growth of 4.3 per cent in 2012 and six per cent in 2013, largely as a result of further developments in hydrocarbons and mining’s emergence as a leading growth sector, according to Chile-based Celfin Capital Equity Research’s first quarter outlook for 2012. Until recently, security issues have discouraged foreign investors. Four decades of rebel insurgency, including attacks on oil and gas pipelines, transmission lines, and other crucial infrastructure, turned the country into a no-go zone. Land mines litter the country and continue to be planted by the Revolutionary Armed Forces of Colombia (FARC) and other illegal armed groups. But the situation is improving. Attacks against pipelines dropped to 31 in 2010 compared with hundreds annually in the early 2000s. And while the government estimates that land mines still lay buried in most of the country’s 62 provinces, there is a concerted effort to sweep suspected areas and destroy explosive devices. Over the past decade, more than 54,000 paramilitaries and guerrillas have demobilized, kidnappings have fallen 90 per cent, homicides 46 per cent, and terrorist attacks 71 per cent, according to the U.S. Department of State.

March/April 2012 | 43

Courtesy of Colombia Crest

From left to right: The Cauca River follows the prolific Middle Cauca belt south of Medellin; Gran Colombia recently updated the resource estimate for its Segovia operations in Antioquia, Colombia; Colombia Crest geologists study a mineralized outcrop.

Neher traces the improvements back to the 2002 election of president Alvaro Uribe, who campaigned on a platform of better security and economic reform. In 2010, Uribe passed the torch to Juan Manual Santos. “Before 2002, the government tried to negotiate with the rebel groups, but they were being taken for a ride because the guerrillas just continued to arm themselves and get stronger,” Neher says. “The threat is still there but it’s a fraction of what it used to be.” Regulatory changes have also helped encourage foreign investment, including longer lasting exploration licenses, lower royalty rates and fewer barriers to private sector investment. In the first half of 2011, foreign direct investment (FDI) jumped 91 per cent to $7 billion, compared to the first six months of 2010, according to the Economic Commission for Latin America and the Caribbean. Much of that money is pouring into the mining sector. But the lack of infrastructure represents a persistent bottleneck and barrier to continued growth in Colombia. While more of an issue for the coal and iron ore producers that ship large quantities of material, the problem touches all sectors. “You have 10 to 20 million additional tonnes of coal that could be coming out every year if we had more infrastructure,” says Neher. The government has responded by dismantling the corruptionriddled agency responsible for awarding tenders for infrastructure projects and replacing it with a new entity modelled on the successful National Hydrocarbons Agency that will control all highway, waterway, maritime, rail and air travel projects, according to Celfin. The government is expecting a US$52.3 44 | CIM Magazine | Vol. 7, No. 2

billion investment in these projects over the next 10 years, including more than 5,000 kilometres of double-track highways, 1,265 kilometres of railways and three new seaports. Santos has also aggressively pursued free trade agreements (FTAs) with several countries. After an FTA with Canada took effect in mid 2011, Colombia ratified an FTA with the United States, its largest trading partner. A similar deal with the European Union is expected to take effect later this year, despite opposition from European unions because of ongoing violence against trade unionists in Colombia. With growth happening so fast, there is a risk of a backlash from non-governmental organizations and communities if the government allows development at the expense of environmental and community concerns. Last May, the courts ruled that the mining code amendments approved by congress in 2010 were unconstitutional because indigenous communities had not been consulted. And in October, thousands marched in protest against the development of AngloGold Ashanti’s La Colosa gold project in central Colombia, which was suspended on environmental grounds in 2008 but later granted partial permitting. Meanwhile, the government has had to suspend requests for new mineral permits in order to process a growing backlog of applications.

Ecuador still riding wave of nationalism Ecuador’s challenges are different. Though the country has few security issues, the government has imposed some formidable obstacles to mineral development. The underlying message from President Rafael Correa is that resource revenues should flow to the state, not to foreign investors.

Chinese-owned Ecuacorriente recently signed an exploitation agreement with the Ecuadorian government for its Mirador project. Depending on the price of copper, the company will pay a royalty rate between five and eight per cent, and has agreed to pay royalties in advance. Other mining companies working in the country have been patiently awaiting their turn to negotiate. Dynasty Mining and Metals has continued development of its Zaruma gold project in the south while it awaits approval for commercial production. The mill is working at a third of capacity, processing 600 to 700 tonnes per day. The company is currently paying a 5 per cent royalty to the government on the metal it has begun selling. Torontobased Iamgold’s 2012-14 spending plans make no mention of Quimsacocha, a significant feasibility-ready gold deposit that is effectively on hold until Iamgold can strike a satisfactory deal. But while Quimsacocha lies dormant, Iamgold has taken minority stakes in three juniors with Colombian projects: Bellhaven Copper & Gold, Colombia Crest Gold and Tolima Gold. The companies are exploring gold and copper-gold properties in the gold districts of Antioquia and Tolima.

Courtesy of Colombia Crest

Courtesy of Gran Colombia Gold

In December, Toronto-based Kinross Gold came to an agreement in principle with the Ecuadorian government. The company, which paid US$1.2 billion for FDN in 2008, agreed to a 70 per cent windfall tax on profits over a US$1,650 per oz. gold price, will share 12 per cent of its pretax profits with the government and three per cent with employees, and pay royalties of five to eight per cent. The agreement is non-binding, and Kinross CEO Tye Burt told investors the company is back at the negotiating table with the government trying to improve those terms. “We won’t proceed there unless we have a better economic deal,” he said in a February conference call.

And Vancouver-based AndeanGold, whose original raison d’être was to pursue opportunities in Ecuador, has turned its focus to Peru. “Based on the mining prohibitions instituted by the Correa Administration since early 2008, AndeanGold has retained legal titles to only its three key projects, none of which have yet been granted permission by the government

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to renew exploration activities,â&#x20AC;? says president and CEO Tony Ciali. But some are cautiously optimistic that the Correa regime may be motivated to work with mining companies in order to encourage growth in the industry, as oil reserves dwindle. The oil sector accounts for about 50 per cent of the countryâ&#x20AC;&#x2122;s export earnings and up to 40 per cent of government revenues, but a recent move away from pro-

duction-sharing arrangement to service contracts has driven companies, such as Petrobras and Noble Energy, out of the country. â&#x20AC;&#x153;For political reasons, the government has found it difficult to be whole-hearted in its support of the mining industry, but I think now it has accepted that mining is the future of the country as oil and gas reserves are diminishing,â&#x20AC;? says Dennis Jones, co-chair of the PDACâ&#x20AC;&#x2122;s CSR committee, former vice-president of exploration for Iamgold and head of the team that found Quimsacocha.

Associate/Full Professor in Mining Engineering (Tenure Stream)

he University of Torontoâ&#x20AC;&#x2122;s Department of Civil Engineering and Lassonde Institute of Mining invite applications for the prestigious Claudette MacKay-Lassonde Chair in Mineral Engineering. The position will be associated with the Lassonde Institute of Mining and the Lassonde Mineral Engineering program. This appointment is a tenure stream position at the Associate or Full Professor level and will begin January 1, 2013 or as soon as possible thereafter. The Department of Civil Engineering at the University of Toronto is committed to excellence in teaching and interdisciplinary research. Candidates must have exceptional undergraduate and graduate teaching in any aspect of Mining Engineering and an international reputation for outstanding research. Areas of interest include (but are not limited to) sustainable mineral resource management; mineral economics and mineral asset valuation; mining automation; mine planning optimization; and, innovative surface and underground mining. The Lassonde Institute promotes and facilitates cross-disciplinary research related to challenges facing the mineral and energy sectors. Lassonde Mineral Engineering is an interfaculty and interdepartmental undergraduate program that crosses traditional XQLYHUVLW\ GLVFLSOLQHV WR SURYLGH D GLYHUVLĂ&#x20AC;HG HGXFDWLRQ LQ WKH DUHDV RI PLQLQJ JHRORJ\ and other relevant applied science and engineering. Graduates are highly sought by industry, consulting and research establishments. Candidates should hold a doctoral degree, be eligible for registration as a Professional Engineer in Ontario, and must have demonstrated leadership, administrative capabilities, communication skills and a strong vision to develop the potential synergies that are available at the University of Toronto. Salary will be commensurate with TXDOLĂ&#x20AC;FDWLRQV DQG H[SHULHQFH All interested parties are encouraged to apply on-line at http://www.jobs.utoronto.ca/ faculty.htm. If you are unable to apply online, please send your application to Professor Brenda McCabe, Chair, Department of Civil Engineering, University of Toronto, 35 St. George Street, Room GB107, Toronto, Ontario, M5S 1A4. Inquiries can be directed to chair.civil@utoronto.ca. Applications should include a detailed curriculum vitae (including publications and evidence of capacity and impact), a description of research, teaching and professional interests, and a list of at least four professional and character referees. The closing date for receipt of applications is April 30, 2012. The University of Toronto is strongly committed to diversity within its community. The University especially welcomes applications from visible minority group members, women, Aboriginal persons, persons with disabilities, members of sexual minority JURXSV DQG RWKHUV ZKR PD\ FRQWULEXWH WR IXUWKHU GLYHUVLĂ&#x20AC;FDWLRQ RI LGHDV $OO TXDOLĂ&#x20AC;HG candidates are encouraged to apply; however, Canadians and permanent residents will be given priority.

46 | CIM Magazine | Vol. 7, No. 2

Jones thinks that if the Ecuadorian government can remove some of the uncertainty from the negotiating process with foreign mining companies, Ecuador is ripe for more discoveries, such as FDN and Quimsacocha. Management at Toronto-based Lundin Mining appears to agree. Lundin recently purchased a 15.4 per cent stake in Salazar Resources, owner of the El Domo deposit, a volcanogenic massive sulphide deposit containing copper, zinc, lead and precious metals in central Ecuador. Salazarâ&#x20AC;&#x2122;s management team is based in Ecuador and the company has several other exploration concessions in the country. But Norton Roseâ&#x20AC;&#x2122;s Neher is wary of the new law that requires mining projects be negotiated on a case-by-case basis. â&#x20AC;&#x153;These contracts are less stable than the concessions that the companies had before,â&#x20AC;? he says. â&#x20AC;&#x153;The terms are negotiated with the titleholders, but itâ&#x20AC;&#x2122;s difficult to negotiate when the government has all the power.â&#x20AC;? And James Lockhart-Smith of Londonbased risk analysis firm Maplecroft sees the potential for community protest over development projects, saying activists may feel emboldened by success just across the border in northern Peru, where Newmont was forced to suspend its Conga project amid growing local dissent. In a blog post for The Financial Times, he suggests that escalating protests, in turn, could encourage the Ecuadorian government to take an even larger share of revenues as it attempts to appease locals.

Gran Colombia Gold, a model for development? In an ideal world, there would be a peaceful coexistence between government, community and mining companies in South America, but as Peru is discovering at Conga, even an established mining code cannot prevent the kind of conflict over water and other resources that happens when mining companies seek to develop large mines in remote areas. The best course for miners is to win over governments and their constituents with responsible development that benefits surrounding communities. Neher uses Toronto-based Gran Colombia Gold as an example of a company that is succeeding in this regard despite considerable challenges. Gran Colombia is the largest underground gold and silver producer in Colombia with five underground mines in operation. It is in the process of negotiating with several artisanal miners and discussing options with residents of moving an existing town to a new location in order to build a mine at Marmato

in the Middle Cauca gold belt. Though the resettlement is unpopular with some community members, the new town will include sewage, utilities and running water in a region where half the residents have none. Gran Colombia has already invested US$2 million in social programs, including about US$1 million for a new hospital and a school, and is budgeting to contribute to economic development initiatives in the future. Marmato contains about 12 million ounces of gold and continues to grow; recent deep intersections show that mineralization extends for a vertical interval of more than a thousand metres and is open at depth. The project is currently at the pre-feasibility stage and Gran Colombia expects production to begin in 2015 at an annual rate of 340,000 oz. gold and 1.3 million oz. silver for 21 years. Compare Marmato to Quimsacocha in Ecuador, which contains about four million ounces of gold and significant silver and copper. Iamgold, well recognized for its sound CSR programs and community engagement, completed a pre-feasibility study on the project three years ago that anticipated production this year. It is still waiting. CIM

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March/April 2012 | 47

Equateur Colombie Une frontière commune, mais des politiques aux antipodes Autrefois réunis au sein de la république de Grande Colombie, l’Équateur et la Colombie ont en partage une histoire, une géologie et un potentiel minier qui se ressemblent. Mais leur approche du développement minier prend rapidement des directions opposées. Les Andes du Nord de la Colombie et de l’Équateur renferment d’importants gisements d’or et de cuivre ainsi que de charbon et de minerai de fer. La Colombie possède les plus grosses réserves de charbon en Amérique du Sud et se situe au septième rang dans le monde pour ce qui est des dépenses en exploration aurifère. C’est en Équateur que se trouve l’une des plus importantes découvertes d’or de la dernière décennie, Fruta del Norte. Pourtant, dans le Survey of Mining Companies 2011-12 de l’Institut Fraser, la Colombie devance l’Équateur dans les indices qui évaluent l’attrait pour les investisseurs, la clarté des politiques et le potentiel minier. « L’Équateur est un pays où il se fait beaucoup de prospection et qui possède une longue histoire d’exploitation minière, mais son gouvernement a un parti pris contre l’entreprise privée », affirme Jorge Neher, partenaire international du cabinet d’avocats Norton Rose de Bogotá. « La Colombie est différente : un pays où il se fait aussi beaucoup de prospection et qui est sous-exploré, mais où la réglementation et le gouvernement sont favorables à l’entreprise privée. »

La Colombie devient plus sûre, mais des risques demeurent La Colombie peut s’attendre à une croissance de son PIB de 4,3 pour cent en 2012 et de 6,0 pour cent en 2013, grâce en bonne partie aux développements dans le secteur des hydrocarbures et à l’émergence de l’exploitation minière comme l’un de ses principaux secteurs de croissance, selon la firme chilienne Celfin Capital Equity Research.

54 000 paramilitaires et guérilléros ont été démobilisés, les enlèvements ont chuté de 90 pour cent, les homicides de 46 pour cent et les attaques terroristes de pour cent. D’après Jorge Neher, ces améliorations remontent à l’élection en 2002 du président Alvaro Uribe, qui a fait campagne en promettant une meilleure sécurité et des réformes économiques. En 2010, Uribe a passé le flambeau à Juan Manual Santos. Des changements de la réglementation ont également encouragé les investissements de l’étranger, entre autres des permis d’exploration de plus longue durée, une diminution des redevances et l’élimination de certaines barrières à l’investissement du secteur privé. Dans la première moitié de 2011, l’investissement direct étranger (IDE) a augmenté de 91 pour cent à 7 milliards $ comparativement aux six premiers mois de 2010, selon la Commission économique pour l’Amérique latine et les Caraïbes. Une bonne partie de ces investissements sont allés au secteur minier. Le manque d’infrastructures demeure par contre un obstacle à la croissance en Colombie. « Nous pourrions extraire de dix à vingt millions de tonnes additionnelles de charbon chaque année si nous avions de meilleures infrastructures », dit Neher. Selon Celfin, le gouvernement a réagi en créant une entité chargée de contrôler les projets de transport par route, voie navigable, voie maritime, voie ferrée et voie aérienne et prévoit des investissements de 52,3 milliards $US dans ces projets au cours des dix prochaines années. Le président Santos a aussi cherché à conclure des accords de libre-échange (ALE). Après l’entrée en vigueur d’un ALE avec le Canada au milieu de 2011, la Colombie a ratifié un ALE avec les États-Unis. Une entente semblable avec l’UE devrait être entérinée cette année, malgré l’opposition de certains syndicats européens qui condamnent la violence exercée contre les syndicalistes en Colombie.

Jusqu’à tout récemment, les questions de sécurité tendaient à éloigner les investisseurs étrangers. Quatre décennies de luttes insurrectionnelles, notamment des attaques lancées contre des infrastructures essentielles, avaient fait de la Colombie une zone à éviter.

La croissance étant aussi rapide, il existe un risque de contrecoup de la part d’ONG et des communautés si le gouvernement autorise un développement qui se fait au détriment de l’environnement et des préoccupations des communautés.

Or, la situation s’améliore. On a compté 31 attaques contre les pipelines en 2010, comparativement aux centaines d’attaques par année au début des années 2000. Au cours de la dernière décennie, selon le Département d’État des États-Unis, plus de

En mai 2011, un tribunal a jugé que les amendements au code minier approuvés par le Congrès en 2010 étaient inconstitutionnels parce que les communautés indigènes n’avaient pas été consultées. En octobre, des milliers de

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personnes ont protesté contre le développement du projet aurifère La Colosa d’AngloGold Ashanti, suspendu en 2008 pour des raisons environnementales, mais qui a par la suite obtenu un permis partiel. Entre-temps, le gouvernement a dû suspendre les demandes de nouveaux permis d’exploitation minière afin de traiter un arriéré croissant de demandes.

L’Équateur continue de suivre la voie du nationalisme Les défis en Équateur sont différents : le gouvernement a imposé des obstacles formidables au développement minier. Le message du président Rafael Correa est à peu près le suivant : les revenus des ressources doivent revenir à l’État, non aux investisseurs étrangers. En décembre, la société Kinross Gold de Toronto a conclu une entente de principe avec le gouvernement de l’Équateur. L’entreprise, qui a payé 1,2 milliard $US pour Fruta del Norte en 2008, a accepté de verser un impôt sur les bénéfices exceptionnels de 70 pour cent pour les profits dépassant un prix de l’once d’or de 1650 $US, partagera 12 pour cent de ses profits avant impôt avec le gouvernement et 3 pour cent avec les employées et versera des redevances de 5 à 8 pour cent. L’entente est non contraignante et le PDG de Kinross Tye Burt a déclaré aux investisseurs que l’entreprise cherche à bonifier ces conditions. « Nous n’irons pas de l’avant à moins d’obtenir une meilleure convention d’affaires », a-t-il déclaré. La société chinoise Ecuacorriente a récemment signé, en mars, une entente d’exploitation avec le gouvernement de l’Équateur pour son projet Mirador. Suivant le prix du cuivre, la société paiera des redevances se situant entre 5 et 8 pour cent et elle a consenti à payer ces redevances à l’avance. D’autres sociétés minières attendent leur tour pour négocier. Les plans d’investissement en 2012-14 de la torontoise Iamgold ne font aucune mention de Quimsacocha, un important gisement d’or prêt à être exploité, mais mis en attente jusqu’à ce qu’Iamgold puisse obtenir une entente satisfaisante. Entre-temps, Iamgold a acquis des participations minoritaires dans trois jeunes sociétés ayant des projets en Colombie : Bellhaven Copper & Gold, Colombia Crest Gold et Tolima Gold. Certains sont cependant prudemment optimistes, estimant que le régime Correa pourrait travailler avec les compagnies minières pour encourager la croissance de l’industrie alors que les réserves de pétrole diminuent. Le secteur pétrolier représente environ 50 pour cent des recettes d’exportation du pays et jusqu’à 40 pour cent des revenus du gouvernement, mais une récente décision privilégiant les contrats de services plutôt que les accords de partage de la production a amené des sociétés comme Petrobras et Noble Energy à quitter le pays.

« Pour des raisons politiques, le gouvernement a eu du mal à montrer son soutien entier à l’industrie minière, mais je crois qu’il reconnaît maintenant que ce secteur fera partie de l’avenir », affirme Dennis Jones, coprésident du comité RSE de l’ACPE, ancien vice-président de l’exploration à Iamgold et chef de l’équipe qui a découvert Quimsacocha. Jones estime que si le gouvernement de l’Équateur peut lever certaines incertitudes concernant le processus de négociation avec les sociétés minières étrangères, le pays pourrait connaître beaucoup d’autres découvertes. Neher se méfie cependant d’une nouvelle loi qui exige que les projets miniers soient négociés au cas par cas. « Ces contrats sont moins stables que les concessions que les entreprises avaient auparavant, dit-il. Les conditions sont négociées avec les détenteurs de titres, mais il est difficile de négocier lorsque le gouvernement a tous les pouvoirs. »

L’or de la Grande Colombie, un modèle de développement ? La meilleure voie de réussite des minières semble être le développement responsable. Neher cite en exemple la torontoise Gran Colombia Gold, le plus important producteur d’or et d’argent souterrains en Colombie. L’entreprise négocie avec des mineurs artisanaux et étudie les possibilités de déplacer un village existant pour établir une mine à Marmato, dans la ceinture aurifère habitée du MoyenCauca. Bien que ce déménagement soit mal reçu par certains membres de la communauté, la nouvelle ville serait dotée d’égouts, de services publics et d’eau courante dans une région où la moitié des habitants n’avaient rien de la sorte. Gran Colombia a investi 2 millions $US dans des programmes sociaux et budgète présentement sa contribution à de futures initiatives de développement économique. Marmato contient environ 12 millions d’onces d’or et continue de prendre de l’ampleur. Le projet en est au stade de préfaisabilité, la production devant commencer en 2015 à un rythme annuel de 340 000 onces d’or et 1,3 million d’onces d’argent pendant 21 ans. Comparez Marmato à Quimsacocha en Équateur, qui contient environ quatre millions d’onces d’or et d’importantes quantités d’argent et de cuivre. Iamgold, bien connue pour ses programmes de RSE et son engagement dans les communautés, a complété une étude de préfaisabilité il y a trois ans, laquelle prévoyait une entrée en production cette année. Elle attend toujours. ICM

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project profile | E S C O B A L The Escobal mine (background) is immediately east of the town of San Rafael.

All images courtesy of Tahoe Resources

Deep roots and wide veins Hints of gold led to the discovery of a rich silver deposit in southern Guatemala six years ago. Now, Tahoe Resources, stacked with a team of veterans experienced in the region, is hard at work turning that prospect into a producer – one that promises to boost the small country up among the world’s major silver jurisdictions. BY DAN ZLOTNIKOV

uatemala’s current silver production is not much to look at: The Silver Institute’s 2010 statistics rank the country’s 6.3 million ounces of output as the world’s 17th largest, below Sweden, Indonesia and India. But this is set to change in 2014, when the Escobal project is expected to enter commercial production. Escobal started out as a greenfields discovery by Glamis Gold, back in 2006. Brian Brodsky, Glamis’ then-exploration manager and now vice-president of exploration at Tahoe, was instrumental in the original discovery. “Our initial sampling program identified highly anomalous gold at the surface,” he says. “The project did not have a single drillhole or any advanced exploration to speak of.” Glamis’

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explorers soon realized that the surface gold anomalies found at the site were just that, but they kept running into silver veins as the drilling went on. “We really didn’t work our way into the silver-rich portion of the deposit until about the 15th hole, and we really didn’t accept the fact that silver would be the primary contributor to the project until around hole 40 or 50, when we started seeing remarkable continuity of veining and the dramatic width and grade of silver mineralization,” explains Brodsky. In late 2006, Glamis and all its properties were acquired by Goldcorp, with Brodsky retaining the same position and Glamis’ CEO Kevin McArthur becoming CEO of Goldcorp. He retired at the end of 2008, only to discover that taking

ESCOBAL

the CEO out of mining was easier than taking mining out of the CEO. “I found out that I wasn’t going to become a professional golfer, so I formed a private company and started looking for assets to develop,” McArthur says.

| project profile

and Caribbean coasts – another logistical advantage for Escobal once it begins shipping its final product: silver-rich concentrates of zinc and lead. There is also an electrical substation seven kilometres from the mine, which will both help operating costs and serve to lower the operation’s greenhouse gas footprint.

Well-established resource, well-experienced team Throughout the search, McArthur kept coming back to Immediate economic impact the Escobal project. “I finally struck a deal with Goldcorp to “The mine has a village called San Rafael Las Flores only buy this asset from them. It was a silver asset, a little small at about 1.5 kilometres away,” says Gostin. The 3,500-resident the time, certainly non-core to village, he says, has historically them,” he explains. been a farming community but The initial mining crew at the mouth of the west portal Following the deal, Tahoe has seen a lot of development had a successful IPO, paying since the mining project got off off the cash portion of the the ground. acquisition. Goldcorp also “A bank has come to town, holds a 40 per cent stake in restaurants have opened, a Tahoe, ensuring that it gets a hotel is being built now. A lot cut of the anticipated success. of peripheral and economic The current mine plan, developments are going on according to Tahoe’s vicearound us,” says Gostin. president of investor relations A significant number of the Ira Gostin, is to produce 18 region’s residents are now million ounces per year, with training to become miners, he a projected mine lifespan of notes. Of the 450 people Tahoe 18 years. Escobal would more employs in Guatemala, 95 per than quintuple Guatemala’s cent are Guatemalans. Human silver output, displacing resource demands will peak at Canada as the world’s 11th about 1,000 and require 650 largest silver producer. people over the life of the Success in mining is never mine. McArthur also points guaranteed, but Tahoe has out that before Escobal, noncertainly stacked the deck in farming opportunities were its favour. “We’ve surrounded scarce in the area. Tahoe has ourselves with people who been funding a local start-up business and has been training not only know Guatemala Human resource demands very well, but who are also locals in silversmithing in an will peak at about 1,000 experienced in the silver effort to make the region industry,” says McArthur. attractive to tourism. and require 650 people In fact, he continues, most “This is part of our CSR program, to try and develop susof the country’s current silver over the life of the mine. production comes from the tainable businesses in the area. Marlin mine, built by Glamis The mines do have limitations and now owned by Goldcorp. Gostin adds that in addition to in terms of mine life; let’s call Escobal a 20-year mine life. We McArthur and Brodsky, Tahoe’s CFO Jaime Mondragon and want to leave the area better than before we came. And the Guatemala managing director Sergio Saenz are also Glamis community has been extremely responsive, we’ve had strong veterans, where Mondragon served as Guatemala controller support,” he says. and Saenz as the general manager for the Marlin mine. The silversmithing initiative has certainly helped build McArthur added COO Ron Clayton, a veteran under- goodwill toward the project, but a lot of the community’s ground silver miner who came to Tahoe from Hecla Mining, positive perception of Escobal is due to Tahoe’s communicaas well as mine manager Don Gray, who had spent time at tion efforts. This is especially important in a country as new to large-scale mining operations as Guatemala; Escobal will Orvana Minerals, Hecla and Coeur d’Alene Mines. Escobal also happens to occupy some prime real estate. be only the second in the country. McArthur points out the paved road access to Guatemala In addition to community consultations, “we’ve had City, just 70 kilometres away, and to ports on both the Pacific nearly 500 visitors to our project in 11 visits, but we’ve also March/April 2012 | 51

project profile | E S C O B A L 1

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ESCOBAL

| project profile

hosted 24 tours to other projects at various phases of development, in Honduras, Guatemala and El Salvador. We’ve had 363 local residents involved in those tours to make sure they understand what mining is all about,” explains McArthur.

Between the easily accessible infrastructure, and high-grade and eager workforce, the project already boasts impressive advantages, but Escobal presented Tahoe with another gift: the sheer size of the silver veins. “If you looked in the Coeur d’Alene district in Idaho, a big silver-producing region, you’d see five-foot-wide veins on average,” says McArthur. “In Mexico, the world’s biggest silver producer, they’re mining two-metre-wide veins, and that’s a big width for them. Sometimes three or four metres, but that’s rare. You go to the world’s biggest silver mine, Fresnillo, and they’re up to five metres,” he explains. So where does Escobal fall on this spectrum? Some of the veins Tahoe will be mining at Escobal, he says, are 50 metres wide, and the whole deposit has been averaging around 20 metres. The width of the veins means that Tahoe will use transverse – in addition to the more common longitudinal – longhole mining methods. McArthur explains that this “will make for very big, productive stopes, which lead to very low unit costs, so our cash costs of production will be very low.” The combined effects of the high mineral grades, the low production costs and the infrastructure are helping turn Escobal into what McArthur describes as “a pretty big cash flow machine.” The most recent preliminary assessment of the project dates back to November 2010, when resource estimates were based on 61,469 metres across 220 holes. By early November 2011, Tahoe added a further 51,705 metres in 128 holes. Since then the company has kept up exploration at the site, and even with construction ongoing, five core drills are operating at Escobal today. McArthur explains that the ongoing drilling is not to help decide whether Tahoe should build a mine but to ensure that the right size of mine will

Photos opposite page: 1. The east portal 2. A Cat AD45B underground articulated truck 3. Local miners at work in the west decline 4. The warehouse under construction 5. The initial round at the west portal

Transverse mining

Courtesy of Tahoe Resources

Deep and wide

Tahoe Resources’ Escobal project will use the transverse mining method. But what decides whether a project uses transverse or longitudinal techniques? Transverse and longitudinal mining are both variants of longhole mining, explains Hani Mitri, McGill University professor of mining engineering and director of the McGill mine design laboratory. In a longitudinal approach, the operator digs two parallel drifts: one directly above the stope and one directly beneath it. With explosive charges placed into blastholes drilled from the top drift, the fragmented ore produced by the explosion is mucked from the bottom drift. Transverse mining uses horizontal drifts, or crosscuts, to access the mining stope. “This method has the advantage of potentially providing multiple working areas, thus increasing productivity,” points out Mitri. Once the primary stopes have been mined out and backfilled, secondary stoping can be carried out. The crosscut employed by transverse stoping provides access to wide orebodies – generally six metres and up to 30 metres. Of course there is more to transverse stoping than mining a thick orebody. The proper technique must be decided on a case by case basis, says Mitri, because so many other variables come into play. “This is where consultants come in to look into mine stability, rock mechanics, and other technical aspects where design studies have to be done. Often the two methods are used in the same mine. While ore thickness is a primary factor, others, such as quality of the rock mass and mining depth and type of backfill can also play a role.” In Canada, Vale’s Garson, Creighton and Birchtree mines; AgnicoEagle’s Lapa and LaRonde mines; and Iamgold’s Mouska mine use both D. ZLOTNIKOV longitudinal and transverse methods.

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be built at Escobal. The company will be releasing an updated preliminary economic assessment and resource figures in May, which are expected to justify an increase from the original 3,500 tonnes per day throughput up to 5,000 tonnes per day. The project site, which McArthur quickly points out is both on time and on budget, is a hive of activity. Having received the government’s approval of its Environmental Impact Statement, Tahoe began construction in October of last year. “We’re pouring foundations, doing a lot of concrete work, a lot of excavation work, erecting buildings,” McArthur continues. The drills will soon be getting in the way, but there is plenty for them to do elsewhere; there are 12 other veins on the property that Tahoe has not really begun exploring. There has not been enough time. Schedules are already packed at Escobal, McArthur says, explaining that the company isn’t even considering ramping up to the 5,000-tonne mark for another five years. “We have to have enough underground development work done, we have to have the miners trained, we have to have enough working faces. All of those crucial things are

easy for the CEO to talk about, but the mining engineers and the geologists cringe to get them done in time.” There are, of course, many unknowns. Even with over a hundred kilometres’ worth of core samples, there are plenty of questions about the size of Escobal’s silver veins. As of November, the deposit was open both at depth and laterally to the east and west. McArthur does not dismiss the possibility of growing the mine further, but says that going beyond 5,000 tonnes per day would require building a new decline or sinking a shaft, a massive expense that would require an equally massive find to justify. In the meantime, Tahoe is thinking about the next mine. After a find of Escobal’s size, Guatemala is bound to attract more exploration interest, and Tahoe is staying ahead of the pack with an enormous 2,000-square-kilometre, exploration concession. No one knows for certain whether another Escobal lies at the bottom of the next drill hole, but Tahoe is willing to try and find out. Modern mining has come to Guatemala, and it has come to stay. CIM

Voluntary structure bridges regulatory gap The Guatemalan Ministry of Energy and Mines halted the permitting process for mineral exploration and mining in 2009. Before granting any more permits, the government wanted to re-examine its mining laws and its royalty structure. Mine operations, under the previous royalty scheme, were paying one per cent of gross revenues. The federal government and the municipalities that host mining operations split that revenue evenly. With a presidential campaign among the distractions, a revised law has been slow in coming. The inauguration of President Otto Pérez Molina, however, was soon followed by the announcement in late January of a new voluntary royalty agreement that raises the rate to four per cent for precious metal production and to three per cent for base metals.

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projet en vedette | E S C O B A L

Courtoisie de Tahoe Resources

L’équipe de construction a coulé le béton des fondations des installations de la propriété Escobal en début de février.

Des racines profondes et de larges veines a production d’argent actuelle du Guatemala n’attire pas vraiment l’attention : les statistiques du Silver Institute de 2010 classe ce pays, dont la production s’est établie à 6.3 millions d’onces, au dix-septième rang des plus grands producteurs, derrière la Suède, l’Indonésie et l’Inde. Mais cela devrait changer en 2014, l’année où est prévue l’entrée en production commerciale du projet Escobal. Le projet Escobal a été mis en route à titre de nouvelle découverte par la société Glamis Gold en 2006. Brian Brodsky, qui était alors responsable de l’exploration à Glamis et qui est maintenant vice-président, Exploration, à Tahoe, a joué un rôle actif dans la découverte originale. « Notre programme d’échantillonnage initial a décelé des teneurs aurifères hautement anomales à la surface. Le projet ne comptait pas un seul trou de sondage ni une activité d’exploration avancée qui vaille la peine d’être mentionnée », dit-il. Glamis a réalisé que les anomalies aurifères de surface découvertes sur le site se limitaient à cela – mais elle a trouvé des filons argentifères en poursuivant le forage. « Ce n’est qu’au bout du quinzième trou que nous sommes parvenus à la partie riche en argent du gisement et nous n’avons vraiment admis le fait que l’argent serait le principal composant du projet qu’une fois arrivés au 40e ou 50e trou, lorsque nous avons commencé à voir la remarquable continuité du filon, son impressionnante largeur et la teneur de la minéralisation argentifère », explique M. Brodsky.

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Fin 2006, Glamis et toutes ses propriétés ont été acquises par Goldcorp. Brian Brodsky a conservé le même poste et le chef de la direction de Glamis, Kevin McArthur, est devenu chef de la direction de Goldcorp. Il a pris sa retraite à la fin de 2008, pour découvrir qu’il était plus facile de « sortir le chef de la direction de la mine que de sortir la mine du chef de la direction ». « J’ai réalisé que je n’allais pas devenir un golfeur professionnel, aussi ai-je fondé une société privée et je me suis mis à la recherche d’actifs miniers à mettre en valeur », explique-t-il.

Une ressource bien établie et une équipe très expérimentée Tout en poursuivant sa recherche, Kevin McArthur revenait toujours au projet Escobal. « J’ai finalement conclu une entente avec Goldcorp portant sur l’achat de cet actif. C’était un actif minier argentifère, un peu petit à l’époque, qui n’était certainement pas essentiel pour eux », précise-t-il. Après l’entente, Tahoe a lancé avec succès un appel public à l’épargne, qui a payé la partie en espèces de l’acquisition. Goldcorp détient également une participation de 40 pour cent dans Tahoe, l’assurant d’avoir sa part du butin prévu. Selon la vice-présidente de Tahoe, Ira Gostin, chargée des relations avec les investisseurs, l’actuel plan de la mine prévoit la production de 18 millions d’onces par an et une durée de vie de la mine de 18 ans. Le projet Escobal multiplierait la production d’argent du Guatemala par cinq et plus, faisant passer le Canada au 11e rang mondial des plus grands producteurs d’argent.

ESCOBAL

Dans le secteur de l’exploitation minière, le succès n’est jamais garanti, mais la société Tahoe a certainement mis toutes les chances de son côté. « Nous nous sommes entourés de personnes qui, non seulement connaissent très bien le Guatemala, mais qui ont aussi de l’expérience dans le domaine de l’industrie minière argentifère », dit M. McArthur. En fait, la majeure partie de la production argentifère actuelle du pays provient de la mine Marlin, qui a été construite par Glamis et qui appartient aujourd’hui à Goldcorp. Mme Gostin ajoute qu’en plus de Kevin McArthur et Brian Brodsky, le chef des finances de Tahoe, Jaime Mondragon, et son directeur général au Guatemala, Sergio Saenz, sont aussi des anciens cadres de Glamis. M. Mondragon y travaillait comme contrôleur au Guatemala et M. Saenz, comme directeur général de la mine Marlin. Il se trouve en outre que le projet Escobal est extrêmement bien situé. Kevin McArthur souligne son accès par une route asphaltée à Guatemala, à une distance de seulement 70 km, et à des ports sur les côtes pacifique et atlantique, ce qui représente un autre avantage logistique pour Escobal une fois que commenceront les expéditions du produit final, des concentrés de zinc et de plomb riches en argent. Il existe aussi une sous-station électrique située à 7 km de la mine, ce qui contribuera à réduire les frais d’exploitation et l’empreinte des émissions de gaz à effet de serre découlant de l’exploitation.

Impact économique immédiat « Le village de San Rafael Las Flores se trouve à 1,5 km seulement de la mine », ajoute Mme Gostin. Les 3 500 habitants du village ont vécu de l’agriculture jusqu’à maintenant, mais depuis le démarrage du projet minier les choses changent beaucoup. Un nombre important de résidants de la région se préparent à devenir mineurs, dit-elle. Sur les 450 personnes employées par Tahoe au Guatemala, 95 pour cent sont des Guatémaltèques. La demande en ressources humaines culminera à environ 1 000 personnes et il faudra employer 650 personnes pendant la durée de vie de la mine. M. McArthur souligne qu’avant le projet Escobal, les possibilités d’emploi autres que dans l’agriculture étaient rares dans la région. Tahoe finance des activités de formation et de démarrage d’entreprises locales en orfèvrerie afin de rendre la région attrayante pour les touristes. « Cela s’inscrit dans le cadre de nos programmes de responsabilité sociale consistant à essayer de développer des entreprises durables dans la région. La durée de vie des mines est limitée, disons que la mine Escobar a une durée de vie de 20 ans. Nous voulons laisser la région dans de meilleures conditions que celles qu’elle connaissait avant notre arrivée. La communauté a réagi de façon extrêmement positive », dit-il. L’initiative en matière d’orfèvrerie a contribué à susciter de la sympathie pour le projet, mais la perception positive de la communauté résulte en grande partie des efforts de communication déployés par Tahoe. Ceci est particulièrement important dans un pays comme le Guatemala où l’exploitation minière à

| projet en vedette

grande échelle est une activité nouvelle : Escobal sera seulement le deuxième projet minier d’envergure de ce pays.

Des filons larges et profonds L’accès facile aux infrastructures, la teneur élevée du minerai et la disponibilité de la main-d’œuvre sont les avantages impressionnants que présente ce projet, mais Escobal a offert un cadeau de plus à Tahoe : la largeur considérable des filons d’argent. « Dans le district de Cœur d’Alene dans l’Idaho, importante région productrice d’argent, les filons ont une largeur moyenne de cinq pieds. Au Mexique, le plus grand producteur d’argent au monde, on exploite des filons d’une largeur de 2 m et on estime que c’est déjà une bonne largeur. On peut trouver des filons de trois ou quatre mètres, mais c’est rare. Dans la plus grande mine d’argent du monde, Fresnillo, on a trouvé des filons allant jusqu’à 5 m », explique-t-il. Alors, où se situe Escobal dans cette fourchette? Selon Kevin McArthur, certains des filons qui seront exploités par Tahoe à Escobal ont une largeur de 50 m et l’ensemble du gisement s’étend en moyenne sur une largeur d’environ 20 m. Compte tenu de la largeur des filons, Tahoe utilisera la méthode de forage transversal à longs trous plutôt que la méthode de forage longitudinal plus courante. M. McArthur explique que « cela permettra d’avoir des tailles très grandes et très productives et par conséquent des coûts unitaires très faibles, de telle sorte que nos coûts de production décaissés seront également très bas. » Les teneurs élevées du minerai, les faibles coûts de production et l’accès aux infrastructures sont des facteurs qui se conjuguent pour faire de la mine Escobal ce que Kevin McArthur appelle « une assez belle machine à générer des flux de trésorerie. » L’évaluation préliminaire du projet la plus récente remonte au mois de novembre 2010. On avait alors estimé les ressources sur la base de 220 trous totalisant 61 469 m de forage. Au début du mois de novembre 2011, Tahoe a ajouté 51 705 m de forage dans 128 trous. Depuis, la société a poursuivi ses activités d’exploration du site, en même temps qu’elle procédait à la construction, et cinq sondeuses à carottes sont actuellement en activité à Escobal. Kevin McArthur explique que les forages en cours n’ont pas pour but de décider si Tahoe devrait construire une mine, mais de s’assurer que l’on va construire une mine de la bonne taille. En mai, la société publiera une évaluation économique préliminaire mise à jour et des données sur les ressources qui devraient justifier une augmentation du débit de 3 500 t/j à 5 000 t/j. Entretemps, Tahoe pense déjà à la prochaine mine. Après une découverte de l’envergure d’Escobal, le Guatemala va susciter un intérêt accru pour l’exploration. Tahoe reste en bonne position avec une imposante concession d’exploration couvrant une superficie de 2 000 km2. Personne ne sait avec certitude si on trouvera un autre gisement comme Escobal au fond du prochain trou de forage, mais Tahoe va essayer de le savoir. Une ère d’exploitation minière moderne s’ouvre au Guatemala, et elle va se poursuivre. ICM March/April 2012 | 57

CIM community Award Winner

Growing CIM’s reach, one technical meeting at a time Saskatoon Branch winner of the Mel W. Bartley Award by Correy Baldwin

Courtesy of CEMI

Courtesy of Paul Labbé

The Saskatchewan minUniversity of Regina down ing industry is booming, the road.” bringing an influx of workThe branch’s connection ers and projects to the with the U of S goes back province. “These are very many years: a decade ago it busy times,” says Paul created a position on its Labbé, outgoing chair of executive for a faculty memCIM’s Saskatoon Branch, ber from the University of which is the 2011 recipient Saskatchewan College of of the CIM Mel W. Bartley Engineering to represent the Award. students and their needs. The branch won the As well as heading up award for its dedication the branch’s student scholto providing networking arship selection committee, opportunities and educathe staff member organizes tional support to students, CIM Saskatoon Branch: from left, Paul Labbé, John Caims, Dennis Lammess, Dean Gay, students and promotes their Sonny Wilson, Tarra Stratton, Doug Milner, Brad Hill, Mike Castleberry. as well as for disseminating attendance at CIM events, vital information to the local and identifies opportunities mining industry. As the industry grows, for CIM to support student events. mentoring and coaching opportunities to the branch is determined to maintain the “Networking and developing positive further assist them in education and high quality of its monthly technical relationships is key,” explains Labbé. training. meetings, whose discussions about new The branch maintains a program of “We offer our own scholarships and projects and technological advances conevents aimed specifically at students, we are expecting that this year we will sistently draw large crowds. and recently forged an even closer link be able to use some of our proceeds But at a time of extreme growth, with the university. “Last year, we supfrom MEMO to establish a permanent, explains Labbé, member companies ported the creation of the first CIM stuinvestment-based, interest-funded probecome busier, and recruiting and retaindent branch at the University of gram at our branch,” Labbé continues. ing CIM volunteers becomes more diffiSaskatchewan,” says Labbé. “The stu“We are also now looking to expand cult, as does keeping the Institute our student programming beyond the dents themselves are very keen on the interesting and relevant. “Our commuUniversity of Saskatchewan to include efforts made so far, and we definitely nity is stretched by the recent growth and SIAST [the provincial college technical wish to continue to encourage this development, and more projects and program] and exchanges with the student-industry mixing.” CIM growth are still to come,” he says. “To complicate matters, we see a very definite MOVING ON UP change in the workforce demographics with the baby boomers entering the Douglas Morrison leads CEMI retirement phase. More quality graduates The Centre for Excellence in Mining Innovation (CEMI) are required, and training by owners and appointed Douglas Morrison as president and CEO. Morriinstitutions is paramount to ease the son, a mining veteran, will lead CEMI in strengthening collabchange in workforce participants and the oration across Canada. His focus is to transfer knowledge into effectiveness of those participants.” practical solutions, and implement these solutions into minLabbé says that much of the work in ing operations. He has more than 15 years of experience in getting ahead of this trend can be indusinternational consulting, and extensive knowledge about the try-driven. The branch has long supissues the global mining industry faces. Douglas Morrison ported students through scholarships and other funding, as well as through 58 | CIM Magazine | Vol. 7, No. 2

CIM community Scholarship Winner

Hooked from the get-go Student maximizes his exposure to the world of mining By Alexandra Lopez-Pacheco

Alexandre Burelle

was my first experience with an underground mine, and I got the feel of what a mining engineer does as part of their daily routine,” says Burelle, who recently completed his final work term at Xstrata’s McArthur River Mine in Australia. This is not the first time Burelle has been honoured with a prestigious award: his numerous distinctions include receiving the Canadian Mining Industry Education Foundation Scholarship and the Xstrata Undergraduate Scholarship in 2010. Also known for his leadership skills, Burelle was the captain of McGill University’s Mine Design Team at the 2011 Canadian Mining Games. He also represented his university at the International Aeronautical Congress in Prague in 2010, with a presentation on mining on the moon. “I have always had a passion for space technology as well,” says Burelle, who sees developments in seafloor mining likely leading to research and technology that could be applied to lunar mining. CIM

Alexandre Burelle takes a break during his work term in Australia.

Fourth-year mining engineering student Alexandre Burelle has an insatiable appetite for learning about the mining industry. His curiosity has led him to an education outside of the classroom: from experiences operating heavy equipment, to working in engineering offices at a mine halfway across the world, to investigating mining frontiers on the seafloor and on the moon. The 2011 recipient of the Caterpillar and its Canadian Dealers Scholarship did not initially want to work in mining. Instead, he wanted to pursue a career as a civil and mechanical engineer. That changed when he was shopping around for a university to attend and met professor Faramarz Hassani at an open house for McGill University’s Faculty of Mining and Materials Engineering. “I had a long chat with him and some mining engineering students,” says Burelle. “It made me realize that mining is an attractive option – a good mix of civil and mechanical engineering, and of office and fieldwork. It also gives you a lot of opportunities to travel and see many operations.” Burelle was hooked. Over the last four years, he has not only been recognized by his instructors as an outstanding student – particularly in the areas of industrial design and equipment automation – but he has also sought as much on-the-ground and varied mining experience as possible. In 2009, he did his first work term in the Athabasca oil sands with Syncrude Canada Ltd. “I was a heavy equipment operator, which is a good way to start,” says Burelle. “I was able to experience the mine from the operator’s point of view and get a feel for the kinds of logistics that drive a mine, as well as for working nightshifts. It was a big eye-opener.” Subsequent engineering internships included working for Xstrata’s zinc underground ore mine in Matagami, Quebec. “It

WANTED Mining Song Writers The Canadian Mining Hall of Fame (CMHF) is sponsoring a Mining Song Contest. The contest is open to mining people across Canada. The songs would deal with mining lore and we expect that most submissions would be in the form of a parody (i.e., words to the tune of a familiar melody). Of course, CMHF would not reject an original melody to rival the likes of Darling Clementine, Sixteen Tons or The Cobalt Song. Deadline for submission is October 15, 2012. Entries should be sent to: CMHF Song Contest c/o Don Worth 2679 Bayview Avenue Toronto, ON M2L 1C1 Fax: (416) 447-1701 dworth9@sympatico.ca Contest winners will be advised before year end and will be awarded their prizes at the Annual CMHF Dinner on Thursday, January 10, 2013.

CIM community

Fresh perspective CMP meeting provides operators chance to learn and grow By H.B. George

Courtesy of Al Kuiper

The 44th Annual Meeting of out there and how it can further the Canadian Mineral Procesimprove their operations,” he sors (CMP) Society, held Januunderlines. ary 17-19 at the Westin Hotel As part of the effort to in Ottawa, started the new year attract young people to the off with promise of continued industry, CMP invited stugrowth for members of the dents from all Canadian uniCMP. Both the range of topics versities and colleges that offer courses on mineral processing, covered and the number of and covered the students’ attendees were dramatically expenses. Leroux urged guests higher than in past years. to “welcome them into our “Canadian mining is boomcommunity.” ing because of increasing According to Leroux, the demand for commodities from From left: Donald Leroux, 2012 CMP chairman; Chuck Edwards, CIM president; highlight of the meeting was a China and other emerging Janice Zinck, CMP secretary and winner of CIM Fellowship Award; Domenic Fragomeni, past CMP chairman. speech delivered by Brett Knelcountries, so mineral processing operations are expanding son at the Awards Banquet, as and diversifying,” explains Donald ex-colleagues, exchange knowledge and he announced the creation of the Byron Leroux, 2012 CMP chairman, who develop professionally. There are always Knelson Memorial Scholarship in honopened the meeting in front of a record- many things to learn. For instance, this our of his father. The scholarship, breaking 560 attendees. year our technical program included intended for Canadian university stuKeynote speaker Jan Nesset, who is presentations on rare earth elements dents in mineral processing, was created a consultant in mineral processing with and lithium, which are areas that were to commemorate the inventor of the Nessetech and a key contributor to seldom discussed before,” says Leroux. Knelson concentrator. MetSoc’s 50th Anniversary volume, The Eight awards were given out at the The technical program, which covCanadian Metallurgical & Materials ered 37 papers, addressed a broad range Awards Banquet, including Mineral Landscape 1960 – 2011, agreed with of subjects, including innovative operatProcessor of the Year, which went to Leroux, referring to the past 50 years as ing practices, plant optimization projects John Folinsbee for his outstanding and the “golden age in Canadian mineral and potential solutions to challenging sustained technical contributions to the field of mineral processing, and the Lifeprocessing.” Nesset’s speech high- comminution, flotation and mineral protime Achievement Award, which went lighted Canadian technical advances, cessing circuits. such as the Knelson gravity concentraA short course program was also to Dr. Lucky Amaratunga, for his exceptor and McGill gas dispersion sensors offered, covering three themes: flotation tional contributions to the field of mine fundamentals, metal accounting and waste management and utilization. in flotation. The meeting also featured fun activiAccording to Leroux, the industry’s statistical benchmark surveying. It was ties to give delegates an opportunity to the first time the short course program growth means the need for members to relax and network with colleagues in a covered more than one topic – a change meet and exchange ideas is more pressfestive atmosphere. CMP’s Got Talent, a that caused attendance to rise by 140 ing than ever. With increased demand per cent, up to 90 people. friendly talent competition held on the for skilled labour, Canadian mining evening of January 17, drew 150 guests. This year’ s enhanced curriculum gave delving into new frontiers, such as rare Guitarists of all levels performed classics attendees the opportunity to develop proearths, and acceleration in technological like “American Pie.” A rendition of “Mill fessionally and to explore the technologiadvances, it is imperative for operators of Fire,” a spoof of Johnny Cash’s “Ring cal options available, according to Leroux. to connect with suppliers, academics, of Fire,” became an instant hit. At the “The meeting is instrumental in promotconsultants, other industry profession12th Annual CMP Kilborn Cup hockey ing the implementation of advanced techals and students to share ideas, discuss game, East and West fought it out for nology in operating plants,” says Leroux. best practices and network. the coveted trophy, with the West beat“Members need the opportunity to get “Coming to the meeting allows memCIM out of the daily grind to discover what is ing the East 6-4. bers to gain new ideas, catch up with 60 | CIM Magazine | Vol. 7, No. 2

CIM community

Transforming the way CIM does business

La transformation de l’ICM Le nouveau portail de l’ICM : plus qu’un site Web

New CIM portal more than a website By Wah Keung Chan When CIM’s new website goes live in time for the Lorsque l’ICM inaugurera son nouveau site Web, juste avant son CIM Edmonton 2012 congress, it will mark the end congrès 2012 à Edmonton, ce sera la fin d’une première phase de of the first phase of development and the beginning développement et le début d’une deuxième étape de son plan d’action of phase II in a three-phase action plan. What began triennal. Ce qui était au départ un projet d’informatique est devenu as an IT project will in fact change the way CIM une révolution dans le fonctionnement de l’ICM. « Il s’agit d’une transoperates. “It’s a total business formation radicale de nos façons de transformation – systems, faire », annonce Jean-Marc Demers, processes and how people directeur principal de l’ICM. work,” says Jean-Marc Demers, Ce qui a donné l’impulsion à cette deputy executive director of transformation, c’est la remarquable CIM. croissance de l’ICM, dont les effectifs At the heart of this change is ont dépassé les 13 000 membres depuis CIM’s remarkable growth to l’entrée en fonction de Jean Vavrek à more than 13,000 members titre de directeur exécutif. Avant son over the last eight years, since arrivée, il n’y avait plus que 5 à executive director Jean Vavrek 6 000 membres, et les logiciels et took the helm. At the time, processus internes de l’organisme membership had declined to étaient complètement dépassés. between 5,000 and 6,000, and L’ICM a entrepris d’élaborer des the organization’s system softprocédures et politiques plus standardware and internal processes isées. « Nous devions remanier nos were antiquated. façons de faire pour prendre de l’expanCIM set about developing sion, explique M. Vavrek. Nous avions more standard operating procetrop de bases de données et de listes, et dures and policies. “Business has il fallait toutes les mettre à jour en parto change to grow, and there The new CIM website homepage / La nouvelle page d’accueil du allèle. » Pour pouvoir traiter plus rapisite de l’ICM were too many databases and dement des volumes de données en lists, and everything had to be pleine croissance, M. Vavrek estimait updated in parallel,” Vavrek points out. In order to qu’il fallait intégrer et relier tous les systèmes de l’Institut. handle larger volumes and react faster, Vavrek felt M. Vavrek envisage que l’ICM pourrait devenir un chef de file monthat the organization’s systems had to be fully intedial en matière de connaissances techniques, de normalisation et de grated and connected. recherche d’efficacité, ainsi que dans le perfectionnement des Vavrek envisions CIM becoming a global leader dirigeants du secteur minier. « Pourquoi ne pas viser 25 000 membres in technical knowledge, industry standards and effid’ici cinq ans? », se demande-t-il, en ajoutant que les effectifs pourciencies, and in leadership development for the minraient bien quadrupler à un certain moment, compte tenu des plans ing industry. “There is no reason why we couldn’t d’expansion de l’Institut dans d’autres pays. have 25,000 members in five years,” he says, adding En attendant, de plus en plus de voix s’élevaient pour réclamer à that the number has the potential to quadruple in l’ICM un site Web plus agréable et facile à naviguer. « On aurait alors the future, given the Institute’s global expansion pu se contenter d’améliorer l’esthétique du site, explique M. Demers. plans. Mais nous avons compris qu’il nous fallait une approche entièrement Meanwhile, there were increasing calls to intégrée pour devenir plus efficaces. Jusque-là, le site était géré et improve the CIM website’s look and navigation. hébergé par une entreprise de l’extérieur, et nous voulions que des “That would just have been cosmetic changes,” says membres de notre personnel prennent le contenu en main et le Demers. “We realized that we needed to have a fully rafraîchissent en temps réel. » March/April 2012 | 61

CIM community

Après avoir mis au point la planification stratégique 2008-2009 integrated approach if we were to improve our efficiency. Up until now, the site has been managed and de l’ICM, le conseil a approuvé le budget du projet. La direction a hosted by a third party and we want to enable our demandé à des experts-conseils de l’aider à trouver les systèmes staff to take ownership of content and update the site les plus perfectionnés afin de créer une infrastructure à la fine in real time.” pointe de la technologie. « Nous Following CIM’s 2008-2009 strateavons fait l’acquisition des gic planning, Council approved the meilleurs systèmes et sommes en budget for the project. Management train de bâtir une véritable Ferconsulted outside experts to assist in rari », commente M. Demers. Au identifying the best systems to build a début du projet, on faisait affaire state-of-the-art infrastructure. “We à des consultants de l’extérieur, purchased the very best systems and mais à l’automne 2010, la direcare building our very own Ferrari,” tion a décidé de confier son says Demers. The system was initially développement à une équipe being implemented by outside interne de TI afin de conserver consultants, but in fall 2010, managele savoir et l’expérience au sein ment decided to continue developde l’organisation. ment with an in-house IT team, to Le système comprend le logikeep the knowledge and experience ciel de base de données Aptify, qui within the organization. gère les données des membres et The system consists of the dataautres, le système de gestion du base software Aptify to manage all New CIM website promotes industry by highlighting members’ contenu Sitecore pour publier online / Le nouveau site de l’ICM fait la membership and non-membership accomplishments rapidement un contenu multipromotion du secteur minier et met en valeur les réalisations de data, the content management system ses membres. lingue sur le Web, et le système de Sitecore to quickly publish multilingestion des documents Sharepoint gual content on the web, and the docafin de garder le contrôle sur les ument management system Sharepoint to keep milliers de documents détenus par l’ICM. « Il n’a pas été facile control of the thousands of documents within CIM. d’amener les systèmes à fonctionner ensemble », admet Gérard Hamel, “Getting the systems to work together has not been directeur des TI depuis l’automne 2010. Au siège social, une équipe easy,” says Gérard Hamel, director of information formée de quatre personnes s’occupe exclusivement de l’élaboration et technology since fall 2010. The national office now de la maintenance de cette nouvelle infrastructure. has a dedicated team of four focused on the developPour l’intégration du système, il a également fallu aménager une ment and maintenance of this new infrastructure. salle de serveurs au siège social afin de faire fonctionner tant le réseau Integrating the system also meant building a interne que le site Web. server room at the national office, which serves both L’expérience des utilisateurs the internal network and the website. Au cours de la phase I, les membres de l’ICM verront un site dans What will users experience? une palette de bleus, de jaunes et de gris, couleurs qui ont reçu la In phase I, CIM members will experience a new faveur des groupes de discussion au début de 2010. Par ailleurs, la blue, yellow and grey colour scheme, developed navigation en sera facilitée. Le nouveau système intégrera la plupart through focus groups in early 2010, as well as easier des fonctionnalités actuelles du site Web, et il sera entièrement navigation. The new system will port most of the bilingue à un moment donné. Ces améliorations concernent notamcurrent website’s features and will eventually be ment le calendrier des activités et les achats dans la bibliothèque techcompletely bilingual. Features include the events’ nique de l’ICM. Le nouveau site hébergera également une nouvelle calendar and the ability to purchase items from version électronique de CIM Magazine permettant aux lecteurs de réaCIM’s technical papers library. The new site will also gir en ligne aux articles publiés. En outre, tous les articles seront be home to a new online version of CIM Magazine, traduits en français. which will enable readers to comment on articles in Le site sera entièrement intégré avec la base de données, et un sysreal time, plus all of the articles will be translated tème de paiements donnera aux membres la possibilité de s’inscrire en into French. quelques clics, sans avoir à attendre 24 à 72 heures qu’un représentant The site will be fully integrated with the database de l’ICM leur envoie un courriel. Les membres pourront également and a payment system that will provide new memcréer un profil détaillé assorti d’une photo. Par ailleurs, ce profil perbers immediate access to enrollment – they will be mettra au système de savoir quels membres bénéficient de quels privup and running in just a few minutes rather than ilèges particuliers. 62 | CIM Magazine | Vol. 7, No. 2

CIM community

waiting 24-72 hours for a CIM representative to email them a membership login. Members will also be able to create a detailed profile and upload a picture with ease. At the same time, the profile will allow the system to keep track of members’ individual privileges.

Projets d’avenir

L’amélioration et la rationalisation du système afin de nettoyer les données sur les membres et les intégrer au site sont des tâches qui ont été confiées aux Services aux membres de l’ICM. Le nouveau système permettra d’assurer le suivi des achats en ligne de produits ICM par les membres, y compris les mémoires et comptes renFuture plans dus techniques de plus en CIM’s Membership Services Departplus nombreux qui sont ment is already refining and streamlinstockés dans la biblioing the system to clean up membership thèque. Des documents data, which will be integrated online. datant de plus de 20 ans The new system will keep track of seront eux aussi numérisés members’ purchases of CIM products, et mis en ligne. including items from the growing techPendant la phase II, nical paper library of proceedings and l’ICM mettra au point son papers; all papers older than 20 years propre système de gestion pour permettre aux gens de are being digitized and will be made s’inscrire à ses nombreuses available. conférences et aux In phase II, CIM will develop its own exposants d’acheter des event management system to allow regisespaces d’exposition. Le tration to our many conferences, and to processus de présentation et permit exhibitors to purchase booth d’évaluation des documents space online. The technical paper subtechniques sera également mission and evaluation process will also amélioré. Les utilisateurs de be improved. Smartphone users will find téléphones intelligents trouthe site easier to navigate. Also, an The new online version of CIM Magazine allows readers to comment on veront le site plus facile à enhanced job board is in the works. articles / La nouvelle version en ligne de CIM Magazine permettra aux naviguer. Il est également Having a Ferrari does not mean that lecteurs de laisser des commentaires. we can drive at full speed just yet, says prévu de créer un système Demers. Ongoing training of CIM staff on these new plus efficace d’offres d’emploi. systems is leading to further optimization of our Comme le dit M. Demers, le fait d’avoir une Ferrari ne veut pas dire business processes. Attaining the full capabilities of qu’on est prêt à se lancer sur les routes. La formation continue du perthese systems will be achieved through continuous sonnel de l’ICM sur ces nouveaux systèmes mène à une optimisation improvement. accrue des processus d’affaires. L’atteinte des pleines capacités de ces Integrated portals for CIM societies, branches systèmes ne sera possible qu’avec un perfectionnement constant. and affiliated groups are also planned with appropriOn envisage également de mettre sur pied des portails intégrés ate training on the system. “We want to make it easpour les sociétés, directions et groupes affiliés à l’ICM, à condition de ier for CIM volunteers to do their work,” says leur offrir une formation appropriée. « Nous voulons qu’il soit plus Vavrek. facile pour les bénévoles de l’ICM de s’acquitter de leurs tâches », Feedback from CIM members is essential to help explique M. Vavrek. shape future features. Whether the next step will be Les commentaires des membres de l’ICM aideront à déterminer les to have more news and content, to post videos of prochaines fonctionnalités. Qu’il décide d’offrir davantage de nouconferences, or to develop a tablet version of the velles et de contenu, de diffuser les vidéos des conférences ou de metmagazine, CIM will have the team and the technoltre au point une version tablette du magazine, l’ICM disposera de ogy to tackle it. While most of the current content is l’équipe et de la technologie nécessaires. Alors que la majeure partie du only available to CIM members, Vavrek would like contenu actuel est réservée aux membres, M. Vavrek aimerait pouvoir to see more free content available to the public. “We en offrir davantage gratuitement au public. « Nous voulons faire du want the website to be the portal for everything minsite Web un portail donnant accès à tout ce qui concerne les mines », ing,” he emphasizes. souligne-t-il. 2012 is a year of change for CIM: we are expandL’année 2012 est celle du changement pour l’ICM, alors qu’il élargit ing our mandate globally as the community for leadson mandat pour devenir une collectivité internationale d’experts dans ing industry expertise. CIM l’industrie minière. ICM

March/April 2012 | 63

CALENDAR

www.cim.org/calendar

CIM EVENTS Mines Opinaca April 25 Val-d’Or, QC Contact: Johanne Voyer, jvoyer@deloitte.ca CIM Conference & Exhibition: Edmonton 2012 May 3-9 Edmonton, AB www.cim.org/edmonton2012 RockEng 2012 21st Canadian Rock Mechanics Symposium May 5-9 | Edmonton, AB www.cim.org/rockeng2012 CIM Calgary Branch – Technical Luncheon May 16 | Calgary, AB Contact: James Faraday cimcalgary@gmail.com

INTERNATIONAL EVENTS

The 125th Anniversary of the Mining Society of Nova Scotia June 6-8 | Ingonish, NS www.miningsocietyns.ca

University of Alberta – Professional Development Workshops: Mine Planning & Design Workshop Series March 20-May 11 | Edmonton, AB www.ualberta.ca/MOL/Courses.htm

MASSMIN 2012 6th International Conference & Exhibition on Mass Mining June 11-14 | Sudbury, ON J 1 www.cim.org/massmin2012 15th Annual Lobster D&D June 15 | Sudbury, ON Contact: Christine Bertoli sudbury@cim.orgS O

Comminution ‘12 April 17-20, 2012 | Cape Town, South Africa www.min-eng.com/comminution12/ s mining

COM2012: 51st Conference of Metallurgists Sept. 30-Oct. 3 | Niagra Falls, ON www.metsoc.org

University of Alberta – Professional Development Workshops: Mine Planning & Design Workshop Series April 11-May 31 | Edmonton, AB www.ualberta.ca/MOL/Courses.htm

University of Alberta – David C. Sego Symposium April 26-27, 2012 | Edmonton, AB uofa-cee.gobigevent.com Inclusion ’12: Canada’s Biggest Indigenous Inclusion Event and Recruitment Fair May 1-3 | Edmonton, AB www.aboriginalhr.ca/en/inclusion12 Economic Evaluation & Investment Decision Methods May 14-18 | Golden, Colorado www.csmspace.com/events/econeval Iraq International Building and Construction Exhibition May 21-24 | Baghdad, Iraq www.iraqbuildex.com 21st International Conference on Metallurgy and Materials Metal 2012 May 23-25 | Brno, Czech Republic www.metal2012.com

64 | CIM Magazine | Vol. 7, No. 2

HISTORICAL

metallurgy

A hundred years of fossil fuels research at CANMET Part 2: the 1950s onwards By David Reeve, former director of CANMET Research Laboratories and director-general, Energy Research and Development, NRCan

Part 1 of this history of fossil fuels research at CANMET, formerly the Mines Branch, traced the development and impact of programs from the founding of the Branch in 1907 to the post-war period of the 50s.

Post-war prosperity to the 1970s In a period of increasing prosperity after the war years, Mines Branch programs shifted to an emphasis on science. Completion of the TransCanada pipeline and dieselization of the railways resulted in a loss of large coal markets in the transportation and residential sectors, and the countryâ&#x20AC;&#x2122;s energy dependence switched from mainly coal to natural gas and oil. Nevertheless, coal technology programs were continued, a decision that proved to be propitious after the energy crisis of the early 1970s. A program on coal preparation had two objectives: to encourage eastern Canadian coal producers to install wash plants that would reduce the sulphur content of their coals in order to make them more competitive with high-quality imported coals, and to reduce the ash content of western Canadian friable coals. With respect to the second objective, a compound water cyclone, in which coal and mineral matter (ash) particles were separated according to specific gravity, was developed at the Western Regional Laboratory in Edmonton. This hydrocyclone was installed in coal wash plants in several countries, and in 1972 a unit was installed at DEVCOâ&#x20AC;&#x2122;s Lingan Mine to reduce the sulphur content of Cape Breton coal. In 1958, a delegation of six western Canadian coal operators, a representative of the Dominion Coal Board, and a technical expert from the Mines Branch Fuels Division visited Japanese steel mills that were rebuilding after the war. Following carbonization tests in the Booth Street experimental coke oven that demonstrated the feasibility of using Canadian coals in blends with Japanese coals for the manufacture of blast-furnace coke, 100,000 tons of Canadian coking coals were shipped to Japan. A second technical mission was dispatched to Japan in 1960, to convince the Japanese steel companies of the quality of the Canadian coals. Many believe the success of this mission was the turning point in enabling western Canadian coal producers to gain a foothold in the Japanese market. This strong confidence in the carbonization work carried out at the Fuels Division led to the formation of the Canadian Carbonization Research Association (CCRA) in 1965, an industrygovernment cooperative venture with members from both coal-producing and consuming companies. While coking coal companies were able to develop markets for their coal in Japan, producers of non-coking coals, such as

Canmore Mines Ltd., which produced semi-anthracite, could not. A small-scale vertical shaft carbonizing unit was constructed on Booth Street to carbonize briquettes of Canmore coal, leading to the operation of an experimental two-ton per hour unit at the Canmore mine site. Finally, a 30,000-ton-peryear commercial unit was constructed with sale of the product to the phosphorus industry in the United States. At the outset of this period, Fuels Division combustion work was directed at encouraging coal use in Canada by means of new domestic and commercial stoker grate-fired boiler designs that incorporated operating protocols for smokeless operation. However, the availability of cheap offshore oil rapidly replaced coal use and the testing of coal in domestic heating appliances was soon discontinued. The Division also oversaw the development of pressurized pulverized fuel combustion that would help bring a coal-fired gas turbine for locomotive use to market. This was of particular interest to the coal producers and to the railroads that wished to stem the advance of oil in the transportation field. In 1950, an agreement was reached with McGill University to construct and operate a demonstration plant using a 500 hp aero engine. The unit was commissioned in 1953 but interest from the railway companies waned when it became evident that continued dieselization of the railways would take place. As a result, the project was shelved in 1958. Studies were conducted between 1957 and 1962 to improve the combustion of Cape Breton coal in stokers installed in the heating plants of government buildings. However, the view in the Division was that the future of thermal coals in Canada lay in their increased use for power generation and for large industrial applications. The focus of the development work then shifted to designing and using pilot-scale

Pushing hot coke from a moveable wall experimental coke oven, Bells Corners Laboratory

March/April 2012 | 65

HISTORICAL

metallurgy furnaces that closely simulated power station conditions. A From the energy crisis of the 1970s to the present day Starting in 1972, the division carried out sampling and chemcombustion research unit was designed and built to measure combustion reactions and the aerodynamics of burner design. ical analytical work for a joint program between the federal govThe unit was first used for assessment of the combustion prop- ernment and the province of Saskatchewan in support of a erties of eastern Canadian high-sulphur coals and drilling program to delineate the lignite resources of Southern Saskatchewan lignites. Because of increasing concern over air Saskatchewan. The objective of the program was to gather inforpollution, plume-rise equations were developed to predict how mation for planning new mines and stack-gas clean-up facilities stack gases would disperse from tall chimneys. Field particulate required for future expansion of thermal power generation in Saskatchewan with low environmental settling studies allowed relationships impact. between concentrations of sulphur Under the auspices of the CCRA, dioxide and distance from the stack to the coal carbonization program was be established. directed towards improving the With respect to oil sands technolstrength of blast-furnace coke, using ogy development during this period, blends containing weakly coking the division participated in an evalucoals. Methods used included blend ation of the technical and economic preheating and partial briquetting of feasibility of commercial oil producthe oven charge. Within the combustion from bitumen in Alberta. Howtion program, technical assistance was ever, industry interest remained low provided to Western-Canadian therbecause of the rapid development of mal coal producers to help them conventional oil production. With establish new markets in Asia to comregard to bitumen upgrading, the oil pete with lower cost Australian coals, industry favoured the cheaper cokas well as to Canadian manufacturers ing process but the Fuels Division of combustion equipment. However, considered that hydrocracking, the directions of the combustion which offered a higher product yield R&D program turned to meet the than coking, would ultimately be need to reduce oil use in power genneeded and that reactors operating at eration (fuel substitution), burn coal very high pressures would be more efficiently and reduce pollutant required. emissions, including acid rain preImmediately after World War II, a cursors (SO2 and NOx), particulates visit was made to plants in Germany that used the Bergius process, a Vertical combustor for CO2 capture and compression technol- and, more recently, carbon dioxide. ogy, Bells Corners Laboratory Clean energy technologies implemethod of direct conversion of coal to mented with industry partners liquid by hydrogenation. These facilities had been operated at extremely high pressures to manu- included fluidized-bed combustion (FBC) of low-grade coals facture fuel for the war effort. Using technical information with in-bed sulphur removal using limestone (leading to the from this visit, a pilot-scale hydrogenation reactor was 165 MWe circulating FBC unit at the Lingan Power Station, Cape Breton). Also, the performance was assessed on lowdesigned and commissioned on Booth Street in 1955. Cobalt molybdate fixed-bed catalysts on an alumina base NOx burners installed at the heating plant of the Canadian were initially used, but problems arose because of catalyst Forces Base Gagetown, New Brunswick. More recently, using a vertical combustor, and CO2 capture deactivation. These difficulties led to a new program initiative on the properties of catalysts and their performance in refinery and compression technology has been developed to separate processes. In addition, because the chemical structure of the CO2 generated by an oxy-fuel power plant. This carbon capcomplex hydrogen-deficient bitumen hydrocarbon molecule ture and storage technology is now available to industry for was not well known, a fundamental research program on bitu- field testing and pilot-scale demonstrations as a trailerminous substances was launched, particularly aimed at the mounted modular unit. In 2005, roadmaps on “Clean Coal Technology” and asphaltene component with the highest molecular weight and “CO2 Capture and Storage,” were published, contributing to the lowest content of hydrogen. The Booth Street high-pressure pilot plant was dismantled SaskPower’s decision to proceed with carbon capture and and reassembled at the new Bells Corners Laboratory in 1969- storage at its Boundary Dam coal-fired power plant. Coordi1970. It was subsequently dismantled again and shipped to nation was provided for Canadian participation in a multiAlberta for use by the provincial government, never to be national project, under the auspices of the International Energy Agency (IEA), to study the disposal of CO2 by using reassembled. 66 | CIM Magazine | Vol. 7, No. 2

HISTORICAL

metallurgy it for the enhanced recovery of heavy oil at Weyburn, Saskatchewan, with the CO2 being transported by pipeline from a coal gasification plant in North Dakota. In order to investigate the use of coal as a substitute for liquid fuels, a multi-year, contracted-out program on the liquefaction and gasification of coal was initiated. The Coal Conversion Program comprised techno-economic studies and required 50 per cent non-government funding. Information derived from this program laid the groundwork for gasification/combined cycle power generation schemes that formed a part of clean coal technology planning. Through a contracted-out program, mainly in partnership with oil-producing companies, new developments in oil sands and bitumen reserve assessment and recovery were promoted, for example, through 3-D seismic reservoir surveys, horizontal drilling technology, and steam-assisted gravity drainage (SAGD). Formal contacts in these subject areas were maintained with the U.S. Department of Energy through a Memorandum of Understanding on R&D on research on heavy oil and oil sands, also including the governments of Saskatchewan and Alberta through the Alberta Oil Sands Technology and Research Authority (AOSTRA). Joint projects were also conducted with the province of Saskatchewan under the Canada/Saskatchewan Cooperative Agreement for a Program of Enhanced Recovery of Heavy Oil in Saskatchewan. Following the difficulties experienced with the high-pressure bitumen upgrading pilot plant and because operating hydrocrackers at such high pressures was not practical for commercial facilities, an alternative strategy using thermal hydrocracking at lower pressures was introduced. A successful pilot-scale development program at the Bells Corners laboratory led to development of the CANMET Hydrocracking Process, which was demonstrated at a nominal scale of 5,000 barrels per day, at the then Montreal East PetroCanada refinery. Although this process did not become a contender for implementation in new oil sands plants at Fort McMurray, its development did have some influence on decisions regarding the choice of upgrading processes for the commercial treatment of bitumen from the oil sands. Recognizing that research should be located close to end-users, heavy oil and bitumen recovery and upgrading programs were moved from Bells Corners to the Devon research centre and were combined with activities of the Alberta Research Council and the Alberta Department of Energy to form the National Centre for Upgrading Technology in 1994. Also during this period, a pilot-scale program was carried out to investigate the co-processing of coal and bitumen (up to 30 per cent coal) in an effort to utilize coal and bitumen together. While this approach showed considerable technical and economic promise, the view of an industry advisory board was that with such large oil sands deposits, it was unlikely that this technology would be exploited in Canada. Another pilot-scale program at about the same scale was put in place to investigate the gasification characteristics of Canadian coals, either for use in advanced coal-to-liquid or coal-to-electricity processes.

Concluding remarks At the beginning of the 20th century, when coal was virtually the sole fossil fuel used in Canada, programs focused on resource assessment and on identifying new ways for using the fuel. Work then progressed to coal processing and conversion, as well as to oil sands treatment and upgrading, always trying to remain ahead of the curve with respect to industry needs. The program drivers shifted from a public-policy to a client-focused orientation; development of clean energy technologies has now become a major focus, with climate change mitigation rapidly increasing in importance. The following contributions stand out as having had a major impact on the development of fossil fuels in Canada over the past hundred years: • Demonstrating that high-quality iron-making blast furnace coke could be made from blends of Canadian and Japanese coals, thus establishing markets in Japan for the long-term sale of Canadian coking coals. • Pioneering techniques for bitumen/sand separation and tailings treatment, as well as developing the operating parameters and process chemistry for bitumen upgrading by hydrogenation. • Assessing the combustion properties of Canadian coals and using this knowledge to provide design criteria for power plant thermal boilers in the generation of electricity, and advancing technology development to burn coals more efficiently and cleanly, thus reducing acid rain, particulate matter and greenhouse gas emissions.

Acknowledgments This work was made possible by the support of John Marrone, director general, CanmetENERGY, and by contributions from many past members of the division, especially Dr. D.S. Montgomery, division chief, 1967-1975. CIM

Bibliography Botham, J. C., & Walsh, J. H. (1960). Report of the Technical Coal Mission to Japan, January 19 to February 10, 1960. Department of Mines and Technical Surveys, Mines Branch, Fuels and Mining Practice Division, Internal Report FMP-60/104-CG. Bowles, K. W. (1958). Summary of Work of the High Pressure Chemistry Section, 19291958. Department of Mines and Technical Surveys, Mines Branch, Fuels Division, Technical Memorandum 138/58-HPC. Burrough, E. J., & Botham, J. C. (1958). Development and Progress of the Carbonization Section. Department of Mines and Technical Surveys, Mines Branch, Fuels Division, Technical Memorandum 5/58-CG. Ignatieff, A. (1981). A Canadian Research Heritage: An Historical Account of 75 Years of Federal Government Research and Development in Minerals, Metals and Fuels at the Mines Branch. Minister of Supply and Services Canada, Catalogue No. M39-8/1981E. Swinnerton, A. A. (1957). Fifty Years of Fuel Testing and Research. Department of Mines and Technical Surveys, Mines Branch, Fuels Division, Memorandum Series No. 136. Swinnerton, A. A. (1958). Development of the Oil Shale Investigations Conducted by the Fuels Division, 1908-1942. Department of Mines and Technical Surveys, Mines Branch, Fuels Division, Technical Memorandum 35/58-POS. Udd, J. E. (2010). A Century of Service: The Hundred-Year History of the Canadian Mines Branch/CANMET, 1907-2007. Ottawa: The Tri-Co Group Inc.

March/April 2012 | 67

Courtesy of Xstrata

TECHNICAL ABSTRACTS

CIM Hauler body payload balance T. G. Joseph, University of Alberta, Edmonton, Alberta, A. Chamanara, University of Alberta, Edmonton, Alberta

journal

ABSTRACT The chicken and egg scenario, where adverse truck motions cause ground deterioration and poor ground profiles cause adverse truck motions, is a downward deterioration spiral dominating our industry. If we remove one action, the reaction stops. A simple truck to excavator load data analysis and wireless communication system is outlined, which will provide visual assistance to the excavator operator in achieving improved load placement and balance in a truck body. This will reduce subsequent hauler duty cycle adverse motions and g levels that contribute to structural fatigue, higher tkph, reduced tire life, and ongoing maintenance of haul roads. RÉSUMÉ Le scénario de la poule et de l’œuf – selon lequel de mauvais mouvements de camions détériorent le terrain et que des conditions de terrain défavorables causent de mauvais mouvements de camions – constitue un cercle vicieux de détérioration qui domine notre industrie. Si nous enlevons une des actions, la réaction s’arrête. Le présent article présente une simple analyse des données de la charge transmise entre une excavatrice et un camion ainsi qu’un système de communication sans fils; ces outils fourniront une aide visuelle à l’opérateur de l’excavatrice pour mieux positionner la charge dans la benne du camion et ainsi mieux équilibrer le châssis du camion. Cela réduira aussi les mauvais mouvements dans le cycle de transport et les niveaux de g qui contribuent à la fatigue structurale, à un t-kmh plus élevé, à une réduction de la vie des pneus et au besoin de continuellement entretenir les routes de transport.

Quality control improvements in Bessemer matte production at the Vale Copper Cliff Smelter M. Zanini and D. Wong, Vale Ltd., Copper Cliff Smelter, Copper Cliff, Ontario, and D. Cooke, Vale Technical Services Ltd., Mississauga, Ontario

ABSTRACT Metals market improvements in 2005 drove the desire to increase nickel throughput and the production of nickel oxide sinter at the Vale Ltd. Copper Cliff smelter. Significant difficulties were encountered due to the unreliable quality of Bessemer matte being produced. Concentrate feed changes and the loss of technical and operational expertise during the previous market downturn contributed to the challenge of making the required improvements. Significant progress has been made in the converter aisle by focusing on employee engagement and standardizing best operating practices for a new generation of skimmers. RÉSUMÉ Les améliorations des marchés des métaux en 2005 ont alimenté le désir d’augmenter le débit de traitement du nickel et de la production d’oxyde de nickel fritté à la fonderie Copper Cliff de Vale Ltd. D’importantes difficultés ont été rencontrées en raison de la qualité incertaine de la matte Bessemer produite. Des changements à l’alimentation en concentré et la perte d’expertise technique et opérationnelle au cours de la chute précédente des marchés ont contribué au défi d’effectuer les améliorations requises. De grands progrès ont été accomplis du côté du convertisseur en ciblant l’engagement des employés et en normalisant les meilleures pratiques pour une nouvelle génération d’écumeurs.

Viscosity of mixed clay suspensions Z. A. Zhou, Heavy Oil and Oil Sands, Alberta Innovates – Technology Futures, Edmonton, Alberta, O. Worku, Syncrude Canada Ltd., Fort McMurray, Alberta, L. X. Wang, Z. Xu, and J. H. Masliyah, Department of Chemical and Materials Engineering, University of Alberta, Edmonton, Alberta

ABSTRACT The viscosity of concentrated kaolinite or illite clay in aqueous suspensions was measured in the presence and absence of a small amount of montmorillonite. To avoid solids settling and to increase the sensitivity of the suspension viscosity measurements, solids concentrations higher than 38 wt per cent by weight were used. The pH of the suspensions and the concentration of calcium and bicarbonate ions were found to significantly impact the viscosity of the clay suspensions. The results showed a significant increase in the viscosity of kaolinite suspensions with the addition of as low as 0.25 wt per cent by weight of montmorillonite on a solids weight basis. Our study demonstrated that viscosity measurement could be a simple, yet a sensitive technique for determining the content of smectite clays, such as montmorillonite, in a complex mix of various types of clay.

RÉSUMÉ La viscosité de concentrés d’argiles de kaolinite ou d’illite dans des suspensions aqueuses a été mesurée en présence et en l’absence de petites quantités de montmorillonite. Afin d’éviter la sédimentation des solides et pour accroître la sensibilité des mesures de la viscosité de la suspension, des concentrations de solides supérieures à 38 pour cent par poids ont été utilisées. Le pH des suspensions ainsi que leur concentration en ions de calcium et de bicarbonate ont un impact significatif sur la viscosité des suspensions argileuses. Les résultats montrent une plus grande viscosité des suspensions de kaolinite avec des ajouts aussi faibles que 0,25 pour cent poids de montmorillonite, selon une base de poids des solides. Notre étude démontre que les mesures de viscosité peuvent constituer une technique simple, mais sensible, pour Excerpts taken from abstracts in CIM Journal, Vol. 3, No. 1. déterminer le contenu en argiles smectiques, telles To subscribe or submit a paper — www.cim.org que la montmorillonite, dans un mélange complexe de divers types d’argiles. March/April 2012 | 69

TECHNICAL ABSTRACTS

canadian metallurgical quarterly The effect of sulphide mixtures on self-heating R. A. Payant and J. A. Finch, McGill University, Department of Mining and Materials Engineering, Montreal, Quebec

ABSTRACT Under certain conditions of air and moisture, sulphide materials can spontaneously heat or self-heat. The current work investigates the self heating behaviour of sulphide mixtures composed of sulphides other than pyrrhotite. The four studied sulphides were pyrite, chalcopyrite, sphalerite and galena. The results demonstrate that when certain non self-heating sulphides are combined they can self-heat. A possible explanation based on galvanic interaction and formation of hydrogen sulphide as an intermediate product is discussed. RÉSUMÉ Sous certaines conditions d’air et d’humidité, les sulfures peuvent autoéchauffer et dans un cas extrême pourraient mener à l’auto-combustion. Les mécanismes de réaction de l’auto-échauffement ne sont pas bien compris. Le présent travail enquête sur l’auto-échauffement de sulfures autres que la pyrrhotite. Les quatre sulfures étudiés sont la pyrite, la chalcopyrite, le sulfure de zinc et la galène. Les résultats démontrent que lorsque certains mélanges de sulfures qui ne produisent pas d’auto-échauffement sur une base individuelle sont jumelés, ils peuvent y parvenir. Une explication possible basée sur un effet galvanique et la formation de sulfure d’hydrogène comme produit intermédiaire fait l’objet d’une discussion.

On-line estimation of frother concentration for flotation processes M. Maldonado, A. Desbiens, Department of Electrical and Computer Engineering, LOOP (Laboratoire d’observation et d’optimisation des procédés), Université Laval, Québec, Québec, R. del Villar, Department of Mining, Materials and Metallurgical Engineering, LOOP (Laboratoire d’observation et d’optimisation des procédés), Université Laval, Québec, Québec, and R. Aguilera, Department of Metallurgical Engineering, Universidad de Concepción, Concepción, Chile

ABSTRACT This work details the use of a multiple-model approach to estimate frother concentration in flotation processes. The methodology requires calibration achieved by identifying a set of linear dynamic models representing the effect of gas velocity on the collection zone gas hold-up at several known frother concentrations. This calibration was applied to Dowfroth 250 and MIBC. An adaptive law is then obtained by applying Bayes’ rule and a Kalman filter algorithm to evaluate the conditional probability of each model to represent the observed system behaviour. The frother concentration is calculated as a weighted sum of model probabilities and their associated frother concentrations. Results from air-water tests conducted using Dowfroth 250 demonstrated the ability of the model to successfully track frother concentration variations. RÉSUMÉ Ce travail détaille l’utilisation d’une approche à modèles multiples pour estimer la concentration de moussant dans les procédés de flottation. La méthodologie nécessite une calibration obtenue en identifiant un ensemble de modèles dynamiques linéaires représentant l’effet de la vélocité du gaz sur le volume mort de la zone de collection à plusieurs concentrations connues de moussant. On a appliqué cette calibration à Dowfroth 250 et à MIBC. On obtient ensuite une loi adaptative en appliquant la règle de Bayes et un algorithme à filtre de Kalman pour évaluer la probabilité conditionnelle de chaque modèle à représenter le comportement observé du système. On calcule la concentration du moussant en une somme pondérée des probabilités du modèle et leurs concentrations associées de moussant. Les résultats d’essais air-eau effectués à l’aide du Dowfroth 250 ont démontré l’habileté du modèle à suivre avec succès les variations de concentration du moussant.

Excerpts taken from abstracts in CMQ, Vol. 49, No. 4. Subscribe—www.cmq-online.ca

70 | CIM Magazine | Vol. 7, No. 2

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Silver boulders and circus acts: silver rush in the Slocan Valley By Correy Baldwin

Courtesy of Royal BC Museum, BC Archives

n the summer of 1892, a photograph of two prospectors prospecting. In 1891, he teamed up with Seaton, an Irishman standing expressionless, but proud, beside a huge 113- from Tennessee, and the two set out into the Slocan Valley. tonne silver boulder was printed in newspapers across They prospected the area all summer without luck, and by North America. The photograph convinced thousands of September had travelled far enough west to come within sight men that massive boulders of solid silver were lying through- of Slocan Lake. They agreed it was time to head back to Hot out British Columbiaâ&#x20AC;&#x2122;s SloSprings Camp (present-day can Valley, just ripe for the Ainsworth) on Kootenay picking. That small black Lake, although they sepaand white picture would rated after disagreeing end up triggering a huge about which route to take. stampede. In retracing their steps, it Although expectations was Seaton, who came were somewhat exaggeracross the silver outcrop on ated, the valley did hold Payne Mountain. Carpenter, a vast amount of wealth. meanwhile, had changed his The boulder belonged to a mind about the route back novice prospector named and caught up with Seaton J. W. Cockle, who discovas he was staking the claim. ered it accidentally after Together, they returned to dropping his axe while camp and had their specistanding atop of a large mens assayed. rock along a creek bed. J. W. Cockle and his partner next to their 113-tonne silver galena boulder At some point their When the axe sheared off a partnership fell apart. It is chunk of the rock, he saw a glitter of silver galena ore and thought that Carpenter may have attempted to switch samrealized what he was standing on. He and his partner struck ples to fool Seaton into thinking the ore was worthless, a claim, snapped the famous photo, and sold the boulder for although this has never been proven. Whatever transpired a cool $2,000. between them remains unknown but, when both men The boulder, however, turned out to be worth more than returned to Payne Mountain, they did so separately. It seems $20,000. Not only that, the boulder had rolled downhill from Carpenter tried to slip away unnoticed with a new partner; the actual silver vein much higher up the valley slope, and and Seaton set off soon after with his own team of approxitheir claim where the boulder had come to rest was otherwise mately 20 prospectors on a more direct route. worthless. The vein high above was soon claimed by John Seaton arrived at Payne Mountain first and his team staked Sandon and two others, and the resulting Slocan Star Mine a host of claims, including the Noble Five claims. These became one of the richest in the region. claims sparked the silver rush that brought in men like Cockle was part of the first wave of local prospectors Cockle, followed by thousands of others. The town of Sandon who ventured into the Sandon area after a discovery was sprang up and the region flourished. The original discoverers, made the previous summer by two other prospectors, Eli however, did not. Like Cockle, both Carpenter and Seaton Carpenter and Jack Seaton, who were drawn there follow- sold their claims early to speculators for much less than they ing reports of a small, but promising, find near Kaslo. Car- were worth. penter had previously worked as a tightrope walker in a Carpenter wowed the region one last time in May 1897, popular travelling circus after immigrating to New York during celebrations at Slocan City. He strung a tightrope from Paris. He quit the circus in the 1880s to try his hand across Main Street from two hotel windows and walked at mining, setting up a placer gold claim in the East Koote- across, returning backward, to the cheers of those below. He nays around 1885. then repeated the stunt, this time blindfolded, stopping Every year for six years, he sent $2,000 home to his French- halfway across to cook bacon and eggs on a stove. It was his Canadian wife, until a letter informed him of his wifeâ&#x20AC;&#x2122;s preg- final gift to the region. He left for the Klondike in September, nancy. He then abandoned his diggings and took to where he died a year later. CIM

74 | CIM Magazine | Vol. 7, No. 2

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UFA 4838 Richard Rd. S.W. Suite 700 Calgary AB T3E 6L1 Tel: (403) 570-4306

CHRIS PAGE & ASSOCIATES 14435-124 Ave. Edmonton AB T5L 3B2 Tel: (780) 451-4373

RED-L DISTRIBUTORS LTD 9727-47 Ave. Edmonton AB T6E 5M7 Tel: (780) 437-2630

THE UNITED SUPPLY GROUP OF COMPANIES 2031 Riverside Dr. Timmins ON P4R 0A3 Tel: (705) 360-4355

TRANSIT LUBRICANTS LTD 5 Hill St. Kitchener ON N2G 3X4 Tel: (519) 579-5330

R. P. OIL LTD 1111 Burns St. East, Unit 3 Whitby ON L1N 6A6 Tel: (905) 666-2313

LUBRIFIANTS SAINT-LAURENT 2320 Metropole Longueuil QC J4G 1G1 Tel: (450) 679-8866