CIM Magazine December '08/January '09 by CIM-ICM Publications

Publications Mail No. 40062547

Dec 2008/Jan 2009 • déc 2008/jan 2009 • www.cim.org

CONTENTS CIM MAGAZINE | DEC 2008/JAN 2009 • déc 2008/jan 2009

NEWS 10 12 13

Breaking new ground Caterpillar creates new

Four Billion Years and Counting Canadian geologists are publishing a definitive survey of the country’s geology

educational film on sustainable mining by A. Gordon United for a cause Shell Canada employees raise a princely sum for charity Lights, camera, mining! OMA launches a novel contest to get young people thinking about mining by M. Kerawala Mattering more than ever PDAC helps Canadian schools teach kids about the resources industry by L. Hymers An illuminating exhibit Dazzling gems make their Canadian debuts at the Royal Ontario Museum by P. Diekmeyer Speak up! MiHR launches a mining industry Speakers’ Bureau

by the FBY editorial board

A view from the hill Mining industry

leaders meet decision-makers on Parliament Hill by A. Gordon Tops in sustainability Raglan mine leads list of sustainable operations in Quebec by M. Kerawala

La meilleure cote en durabilité La

mine Raglan a obtenu la meilleure cote de durabilité des exploitations minières du Québec Teck talk A candid tête-à-tête with Teck president and CEO Don Lindsay by B. Sundararajan

COAST TO COAST 45

Coast to coast Mineral activity overviews from across Canada

46 48 50 52

54 56

Newfoundland and Labrador: Moving ahead in tough times by K. Bradbury Nova Scotia: An eventful year, an optimistic outlook by M. MacDonald New Brunswick: Record-setting developments by L. Fyffe Québec : Une période d’expansion sans précédent par A. Lavoie

Quebec: A period of unprecedented expansion Ontario: Leading Canada in exploration by the staff of the Ontario Ministry of Northern Development and Mines

by the staff of the Saskatchewan Ministry of Energy and Resources and R. Carey

Alberta: Driven by diamonds, propelled by by D.R. Eccles

Yukon: World-class potential awaiting further exploration

by the staff of the Government

of Yukon

potash giant

potash

4 | CIM Magazine | Vol. 3, No. 8

by D. Prouse and M. Lavergne

Saskatchewan: Not just a uranium and

British Columbia: Forging ahead in 2008 by J. deGrace, J. Fredericks, D. Grieve, B. Madu, B. Northcote and P. Wojdak

Manitoba: Boosting economies, generating knowledge

Northwest Territories: Northerly location, northerly growth graph by D. Williams Nunavut: Trailblazing in the tundra by the staff of the Department of Indian and Northern Affairs Canada

COLUMNS 82 83 84

A.E. Derksen

OUTLOOK 2009

APERÇUS POUR 2009 30

Turn, turn, turn Top industry experts

Une année 2009 plutôt tranquille

Bart Melek, BMO Marchés des capitaux, analyse la situation financière actuelle Supply side economics The latest products help mining companies keep an eye on their bottom lines by E. Moore

weigh in on what the future may hold for the sector by D. Zlotnikov 35

Une saison de changements pour 2009 Les experts de l’industrie analysent l’avenir du secteur

The Supply Side by J. Baird MAC Economic Commentary by P. Stothart Eye on Business by J.S. Turner and G.H. Yuen with

A much quieter 2009 BMO Capital

85 86 87 88 90 92 118

CIM NEWS 98

Markets’ Bart Melek analyzes the current financial situation by P. Diekmeyer

HR Outlook by R. Montpellier Standards by G. Gosson and L. Petryk First Nations by J.C. Reyes Innovation by M. McCubbing Student Life by R. Cunningham Parlons-en par R. Rodrigue et A. Prus Voices from Industry Jean Vavrek

101

101 102

CIM Conference and Exhiition / Congrès et salon commercial de l’ICM Un expert de cuivre à Québec La Section de Québec de l’ICM apprend l’histoire récente de la fusion du cuivre d’un vétéran de l’industrie par M. Fortin A copper expert in Quebec CIM Quebec City Branch learns the recent history of copper smelting from an industry veteran

De la bière, une pizza et devenir membre de l’ICM La Section de Québec de l’ICM se sert d’incitatifs pour attirer les étudiants par M. Fortin Beer, pizza and CIM membership CIM Quebec City Branch uses incentives to attract students An industry veteran speaks CIM Distinguished Lecturer Carlos Díaz surveys the copper smelting industry by M. Kerawala

103

110

MINE EN VEDETTE Under the wire The market has favoured Sherwood Copper Corp.’s Minto since 2007 by E. Moore

109

TECHNICAL SECTION

FEATURED MINE 93

108

2009 CIM Calendar of Events / Calendrier des événements de l’ICM 2009 CIM National Office / Bureau national de l’ICM CIM Council / Conseil de l’ICM

Où le cuivre est encore d’or Les marchés ont été bons pour la mine Minto de Sherwood Copper Corp. depuis 2007

103 CIM Calendar of Events

2009 Calendrier des évenements de l’ICM

This month’s contents

IN EVERY ISSUE 6 8 97 101 116

119

Editor’s Message President’s Notes / Mot du président Welcoming new members Obituaries Professional Directory

CIM MEMBERSHIP DIRECTORY/ RÉPERTOIRE DES MEMBRES DE L’ICM Available to CIM Members only / Disponible aux membres de l’ICM seulement

Editor-in-chief Heather Ednie hednie@cim.org Senior Editor Angie Gordon agordon@cim.org Section Editors News and Features: Angie Gordon agordon@cim.org Columns and CIM News: Joan Tomiuk jtomiuk@cim.org Histories and Technical Section: Minaz Kerawala mkerawala@cim.org Technical Editor Joan Tomiuk Publisher CIM Contributors Jon Baird, Louise Blais-Leroux, Keith Bradbury,

Strategy for a strong 2009 This issue of CIM Magazine is a clear reflection of the concerns and focus of today’s industry leaders. Across the board, people are looking at 2009 as a challenge — not the disaster some other industries are facing, but a time for heightened efficiency and a keen strategy to keep costs down. From the interview with Teck’s Don Lindsay on page 26 to a panel of experts from across the fields on page 30, the sentiments are stern, but encouraging — industry’s not defeated, but it will require effort to stay in the running. Next year promises to bring further change to the minerals industry we know today. Meanwhile, here at CIM, we have Council’s backing to maintain a cautious commitment to growth. We must keep an eye on our key indicators, but we have a number of development projects on the table that will be the drivers of our operations throughout 2009. The main target areas are our meetings business, development of increased web-based knowledge exchange, focusing on students and young leaders as the core of tomorrow’s industry, strengthening our relationship with CIM branches through the One Membership plan, and further work with other partners to meet the needs of a changing industry. It’s going to be exciting, and perhaps a bit harrowing if the markets continue to plunge, but CIM acknowledges the need to develop increased resources to serve our members.

Robert Carey, Ryan Cunningham, John deGrace, Peter Diekmeyer, Andrew E. Derksen, D. Roy Eccles, the FBY editorial board, Marie Fortin, Jay Fredericks, Les Fyffe, Greg Gosson, Dave Grieve, Lesley Hymers, Monique Lavergne, André Lavoie, Mike MacDonald, Bruce Madu, Mike McCubbing, Ryan Montpellier, Eavan Moore, Bruce Northcote, Laurel Petryk, André Pijet, Dave Prouse, André Prus, Juan Carlos Reyes, Richard Rodrique, Paul Stothart, Binod Sundararajan, John Turner, Jean Vavrek, Drew Williams, Paul Wojdak, Greg Ho Yuen, Dan Zlotnikov, and staff of the Department of Indian and Northern Affairs Canada, the Government of Yukon, the Ontario Ministry of Northern Development and Mines, and the Saskatchewan Ministry of Energy and Mines

Published 8 times a year by CIM 855 - 3400 de Maisonneuve Blvd. West Montreal, QC, H3Z 3B8 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: magazine@cim.org Subscriptions Included in CIM membership ($140.00); Non-members (Canada), $168.00/yr (GST included; Quebec residents add $12.60 PST; NB, NF and NS residents add $20.80 HST); U.S. and other countries, US$180.00/yr; 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 Joe Crofts jcrofts@dvtail.com ext. 310 Janet Jeffery jjeffery@dvtail.com ext. 329

Take the time to read this issue — you’ll see that the minerals industry is not going away, even if some of the plans will change. The CIM Magazine staff has outdone itself with this one. And as CIM moves forward, contact us with your ideas — we’re here to listen and want to work with our members. You’re the very backbone of what makes us a remarkable institute. Wishing everyone a great 2009, Heather Ednie Editor-in-chief

This month’s cover Designed by Clò Communications Layout and design by Clò Communications. Copyright©2008. 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.

Printed in Canada

6 | CIM Magazine | Vol. 3, No. 8

president’s notes Greetings Members, As the year 2008 comes to a close, what else can I say but “wow” — what a year it has been! Looking back, I am amazed by how dynamic and unpredictable a time it has been for our industry. The year started with exploration in Canada hitting record highs. Development in our oil sands was booming, mining projects were advancing in almost every province and territory, and many new mines came on-stream (including our two from De Beers Canada — Snap Lake and Victor). Although prices of our mined commodities had cooled off from record levels, in general, the demand was still pretty good. Then the financial meltdown in the United States occurred and the repercussions were quickly felt around the globe. As I write this note, mine and/or smelter production is being curtailed or shut down, capital and exploration expenditure is being slashed, projects are being suspended, and our industry is once again going into survival mode as the world heads into global recession. More than ever, CIM’s role as a facilitator and coordinator will be critical to our industry’s future. Through its network of members, branches and societies, CIM will enable us to share the knowledge to help one another survive this economic downturn.

Corporate members, I encourage you to support our organization and the CIM Foundation. Members, help make our branches and societies work for you, providing a platform for the exchange of ideas that can help find ways to manage this recession and power our industry into the future. Meanwhile, in 2009 CIM will be showcasing its global leadership in mining at our annual Conference and Exhibition to be held in Canada’s financial hub, Toronto, from May 10 to 13. I am confident that our Canadian mining industry will triumph. Yes, there will likely be some operations that will have to close for a period, but as a group we will come out stronger in the end. I want to wish all our members a Merry Christmas. May we all help one another take on this global challenge and succeed! Best wishes, Jim Gowans, CIM President

Un temps de partage Meilleures salutations à tous les membres de l’ICM ! Alors que l’année 2008 tire à sa fin, je ne puis dire autre chose que « wow » quelle année! En rétrospective, je suis étonné de la vitalité mais aussi de l’imprévisibilité auxquelles notre industrie a été soumise. L’année a débuté avec l’exploration qui a atteint des sommets inégalés au Canada. Le développement des sables bitumineux était dynamique, les projets miniers progressaient dans presque toutes les provinces et les territoires et plusieurs nouvelles mines sont entrées en production (dont nos deux de De Beers Canada — Snap Lake et Victor). Bien que les prix des produits extraits ne soient plus à des sommets records, la demande générale est restée passablement bonne. Vint ensuite la débandade financière aux États-Unis avec ses répercussions mondiales. Au moment d’écrire ce billet, des mines et (ou) des fonderies ont restreint leur production ou sont arrêtées, les dépenses en exploration et en investissements sont réduites, des projets sont suspendus et notre industrie doit encore une fois se placer en mode survie alors que le monde entier entre en récession. De plus en plus, le rôle de l’ICM en tant que facilitateur et coordonnateur sera critique pour l’avenir de notre industrie. Grâce

8 | CIM Magazine | Vol. 3, No. 8

à son réseau de membres, de sections et de sociétés, l’ICM nous permettra de partager des connaissances afin de nous aider les uns les autres à survivre à ce déclin économique. Aux membres corporatifs : je vous encourage à soutenir notre organisme et la Fondation de l’ICM. Aux membres : aidez-nous à faire en sorte que nos sections et nos sociétés travaillent pour vous, fournissant une plateforme pour échanger des idées qui peuvent aider à trouver des façons de traverser cette récession et de pousser notre industrie vers l’avenir. Entre-temps, en 2009, l’ICM démontrera son leadership mondial lors de son Congrès annuel et Salon commercial qui sera tenu à Toronto, le centre financier du Canada, du 10 au 13 mai. J’ai pleinement confiance que l’industrie minière canadienne vaincra. Oui, il y aura sans doute des exploitations qui devront fermer pour un certain temps, mais en tant que groupe, nous en ressortirons plus forts en bout de ligne. Je voudrais souhaiter un très Joyeux Noël à tous nos membres. Aidons-nous les uns les autres à relever ce défi global et à réussir ! Meilleurs voeux, Jim Gowans, Président, ICM

Photo taken by Gary Mulcahy

A time for sharing

news Breaking new ground New educational film on mining and sustainability from Caterpillar In response to requests from its mining customers, Caterpillar recently introduced the educational film Ground Rules: Mining Right for a Sustainable Future. The film was produced in collaboration with the award-winning documentary team at the by Angie Gordon Sudbury, Ontario-based science centre, Science North, and premiered at MINExpo 2008. Ground Rules follows in the tradition of Common Ground, a Cat® mining film that opened at MINExpo ’92 and has since been viewed by approximately 40 million people worldwide. “Our mining customers have told us it is time for a new film,” said Chris Curfman, vice president of Caterpillar

and president of Caterpillar Global Mining. “They appreciated the way Common Ground helped educate the public about mining and the industry’s sustainable efforts, and asked us to consider updating the message. The mining industry has made great strides since 1992 — environmentally, socially and economically. Caterpillar is pleased to showcase some of the great work being done by this new generation of mining professionals.” Ground Rules follows the development of new and existing mines as they strive to operate with sustainable business practices. The program illustrates the complex challenges associated with meeting worldwide demand

Mining and the Environment? Ask Golder. Focused on people. Passionate about our projects. For over 45 years, working on six continents, Golder has developed expertise in open-pit and underground mining, from pre-feasibility and permitting through closure and reclamation. We deliver sound solutions that maximize value and minimize risk, while meeting your obligations to communities, regulators and the environment. A World of Capabilities Delivered Locally.

Africa + 27 11 254 4800 Asia + 62 21 252 1975 Australasia + 61 7 3721 5400 Europe + 356 21 42 30 20 North America + 1 800 275 3281 South America + 55 21 3095 9500

www.golder.com 10 | CIM Magazine | Vol. 3, No. 8

for minerals and metals in a safe and sustainable manner. Filmed in Indonesia, Chile, Ghana, Australia, Canada and the United States, Ground Rules covers all aspects of mining from exploration to reclamation. “We explain how everyday life around the globe is dependent on the products of mining,” said Dan Hellige, manager of health, safety, environment and community for Caterpillar Global Mining. “We show real mining companies working in their communities to build capacity, honour local cultures, protect the environment and develop sustainable economies — all while meeting very aggressive production and cost objectives. There are a lot of inspiring stories out there. It has been our privilege to capture a few of them on film and share them with the world.” CIM To order a copy of the Ground Rules video go to http://tinyurl.com/62cj5b

Moving on up The Mining Association of Canada (MAC) appointed Julie Gelfand as vice president, sustainable development, and Maggie Papoulias as vice president, government affairs. Gelfand will lead the Towards Sustainable Mining initiative, a role in which her media experience will prove most useful. Papoulias will broaden MAC’s government affairs program, communicate the importance of mining to federal decision-makers, help seek balanced policies and dialogue with governments and other stakeholders.

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news

Photo courtesy of Shell Canada

United for a cause

Shell giving back to the order of $3.4 million

During difficult economic times it is sometimes easy to loose sight of the fact that there are many around us for whom every day represents a struggle. That’s why organizations such as the United Way play such an important role in our communities. Through the

projects it funds and the partnerships it develops, United Way seeks to understand and address the fundamental root causes of poverty through creative and sustainable programs, helping people in need gain greater independence, safety, confidence and dignity.

Shell Canada, its employees and retirees dished out a $3.4 million Halloween treat. The company matched dollar-for-dollar the money raised by its present and past employees for the United Way of Calgary and Area. Over 750 Shell personnel participated in the “Days of Caring” campaign in support of the charity. The United Way was also thankful for the generosity of the employees of another oil major as well. Syncrude Canada staff outdid themselves, raising $1.23 million for the charity, surpassing a self-set target with nearly a week to spare. Last year, Syncrude employees had raised $1 million for the same cause. This year’s growth in contributions is largely due the quadrupling of the number of people who donated $1,000 or more and the 33 per cent rise in average employee donation to about $400. CIM

Giving Back Eye on the Future The Imperial Oil Foundation (IOF) is contributing $400,000 to a major wetlands reclamation and project, Eyes on the Wetlands. The project — a collaboration between IOF, Parks Foundation Calgary, Spruce Meadows and Ducks Unlimited Canada (DUC) — will include a classroom, a shelter/viewing blind platform, a pond viewing platform, an interpretive marsh walk and a floating deep-water platform for viewing underwater life. IOF proposed the project to Spruce Meadows after learning of its efforts to protect and preserve the wetlands, which are located in the City of Calgary’s Radio Tower Creek environmental reserve. DUC will deliver lessons and activities for grade five students who visit the Eyes on the Wetlands as part of their science curriculum. 12 | CIM Magazine | Vol. 3, No. 8

news Lights, camera, mining! Canada’s youth are a media-savvy lot and skilled practitioners of newgeneration technologies like social networking and video by Minaz Kerawala sharing. Understanding this, the Ontario Mining Association (OMA) has sought to tap into this creativity and techno savoir faire as a way of getting our young people interested in and engaged with mining-related careers. In collaboration with REEL CANADA, OMA is running a high school video contest called “So You Think You Know Mining” (SYTYKM).

The concept is fairly straightforward — participants are asked to represent the benefits of mining through short, two- to three-minute films. In addition to piquing their curiosity and encouraging them to think of the mining industry as a socially and economically beneficial enterprise and a potential avenue of rewarding employment, the contest will also help them develop skills in scriptwriting, editing, direction and production. More than anything else, though, the contest promises to be great fun. Of course, the fame and fortune that will crown the winners are quite attractive too. A well-publicized and well-networked contest, SYTYKM will give participants the opportunity to have their work featured on both the OMA and REEL CANADA websites. The latter is a

national initiative by members of the film and television industry in Toronto, aimed at bringing Canadian films into Canadian classrooms. They take the form of a day-long travelling film festival that moves from one school to another. The overall best entry will win a $5,000 prize. Four others will win $2,500 prizes each for best directing, best writing, best music and best comedy. The crowning glory, for all five winners will be the airing of their films at the Mining in Society show, part of CIM Conference and Exhibition 2009 in Toronto, which takes place from May 10 to 13. The prizes will also be distributed at this event. CIM To know more about SYTYKM or to send in your masterpiece, visit www.oma.on.ca/contest

You have known us as “Dynatec” since 1980. It’s time for a change. We’re the same folks you have grown to trust with a new name, DMC Mining Services. As North America’s only ISO:9001-2000 and OHSAS: 18001 certified mining contractor you can rely on our history and experience to bring you results, safely. Things you need to know:

• Our website has changed to www.dmcmining.com. • All employees e-mail addresses have been changed to first initial, last name@dmcmining.com. For example: bsmith@dmcmining.com. How can we help you? Ask us how! 1-800-892-8293 (Canada) N 1-800-748-2375 (USA)

December 2008 / January 2009 | 13

news Mattering more than ever PDAC Mining Matters program expanding

Two happy partcipants at a 2008 PDAC student activity

The importance of educating Canadian youth about the mining industry has become a widely recognized imperative. PDAC Mining Matters — a non-profit charitable organization that serves as the official educational arm of the Prospectors and Developers Association of Canada — continues to make significant contributions to this effort. Through the development of curricuby Lesley Hymers lum kits, teacher workshops and various educational initiatives, Mining Matters helps give educators the tools required to enlighten tomorrow’s workforce about the mining and minerals industry. The past year has been one of expansion for Mining Matters. Most notable has been its involvement in the Mining Industry Human Resources Council’s (MiHR) Mining 14 | CIM Magazine | Vol. 3, No. 8

Industry Attraction, Recruitment and Retention Strategy (MARS), a three-year project initiated in 2007 aimed at addressing the people and skills shortages in the mining sector. Mining Matters helps cultivate interest in geosciences and mining careers through curriculum expansion and resource production. Other expansion activities that have taken place since 2007 have included: the correlation of Mining Matters’ senior resource, Discovering Diamonds, to meet curriculum expectations in many provinces across Canada; the updating of its grade four resource, Deeper and Deeper; and the delivery of Discovering Diamonds instructional development workshops across Canada, to an estimated 2,765 students. Recent activities have also included the broader cultivation of

partnerships and the expansion of Mining Matters resources across Canada. In British Columbia, a partnership was established with the Mineral Resources Education Program of British Columbia. A Train-the-Trainer model is preparing teachers to deliver in-service Discovering Diamonds workshops. In-service workshops were given in Alberta at the Canadian Aboriginal Science and Technology Society Conference and at CIM’s Mining in Society show. They were also offered in Saskatchewan, where Mining Matters representatives met with the province’s science consultant to discuss the provincial curriculum review. The consultant was also provided with all three PDAC Mining Matters curriculum resources for future adaptation assessment. In Ontario, the junior unit, Deeper and Deeper, was updated to reflect provincial curriculum revisions. In Manitoba, an intermediate resource was developed to address the specific needs of the province’s curriculum. John Murray of the Manitoba Department of Education, Citizenship and Youth, and Coleen McKellar, a secondary teacher from Brandon, were engaged to adapt the Mining Matters II – The Earth’s Crust resource to reflect the province’s geology, resource and extractive activities curriculum. Manitoba’s first PDAC Mining Matters teachers’ workshops were held in August at the province’s Education, Citizenship and Youth Summer Institute. Mining Matters has also expanded its aboriginal programming. In addition to preparing resources for aboriginal communities in Newfoundland and Labrador, program representatives also met with the province’s Board of Education science specialist. This led to an invitation to participate in a future teachers’ professional development program.

Mining Matters gives educators the tools to enlighten tomorrow's workforce about the mining and minerals industry.

Mining Matters participated in the 2008 First Nations Natural Resources Youth Employment Program, held in partnership with Outland Forestry and Confederation College. The seven-week live-in professional and personal development program is designed to facilitate future employment in the natural resource sector. Twenty-six youth, aged 15 to 19, travelled from 15 northern Ontario aboriginal communities to participate. Mining Matters provided five days of thematic educational programming that included geosciences, environmental science, careers education and mining, as well as a visit to North

American Palladium’s Lac des Iles mine operation. Future Mining Matters undertakings will include educational resource and workshop kit production, the dissemination of educational materials through Maclean’s magazine’s In-Class Program, continued expansion of provincial workshop delivery, increased student outreach and ongoing cultivation of education, industry and government partnerships. With this multi-focal approach, PDAC Mining Matters hopes to make great strides in its mandate of increasing student interest in geosciences and mining industry careers. CIM

Giving Back The right instruments Syncrude Canada announced a $1 million donation to the Northern Alberta Institute of Technology (NAIT) to support the expansion of its instrumentation technology program. Syncrude’s generosity will help build, expand and refurbish laboratories and classrooms in the NAIT Spartan Centre for Instrumentation Technology. In addition to contributing funds, Syncrude will also serve on program advisory committees to counsel NAIT on the development and delivery of technical and apprenticeship programs. Almost half of all apprentices in Alberta are trained through NAIT.

Nice Ice The Diavik Diamond Mine raised $11,000 for local charities through its Ninth Annual Charity Silent Auction, at which some 85 items donated by 44 companies were sold. The pièce de résistance was a 0.46-carat Diavik diamond that fetched $1,750. Proceeds from the auction will be shared by the Yellowknife Association for Community Living – Abe Miller Centre and the Yellowknife YWCA. December 2008 / January 2009 | 15

news Mining Matters would like to thank the following contributors for their generous contribution to our program. Major Contributors Diamond ($25,000 plus) James Gill IBK Capital Corp. Mega Uranium Ltd. Mining Industry Human Resources Council Natural Sciences and Engineering Research Council of Canada Noront Resources Limited Northfield Capital Corp. Ontario Ministry of Research and Innovation Prospectors and Developers Association of Canada Donald Ross Teck

Platinum ($10,000 to $24,999) Dale Corman Fairmont Royal York Hotel Ross Lawrence Robert Schafer

Gold ($2,000 to $9,999) Aber Diamond Corporation Atlas Copco Exploration Products Avalon Ventures Limited Boart Longyear Limited Canadian Geological Foundation Canadian Institute of Mining Metallurgy and Petroleum Canadian Mining and Metallurgical Foundation Caracle Creek International Consulting (CCIC Canada) Nicolas Carter CHF Investor Relations C.J. Stafford & Associates Cree Mineral Exploration Board De Beers Canada Inc. Detour Gold Corp. Equity Transfer & Trust Company Excellon Resources Inc. Exploration Link Ltd. FNX Mining Company Inc. Fogler Rubinoff LLP Gemcom Software International Inc. Hatch Ltd. HCN Publications Company Manicouagan Minerals Inc. Donald McInnes Ronald Netolitzky North American Palladium Ltd. Paradigm Capital Inc. P.J. Mars Investments Ltd. Queenston Mining Inc. Royal Nickel Corp. SGS Minerals Services The Northern Miner 16 | CIM Magazine | Vol. 3, No. 8

Thundermin Resources Inc. Treasury Metals Inc. Trelawney Resources Inc. Tri Origin Exploration Unor Inc. Vaaldian Resources Ltd. Vale Inco Volta Resources Inc. Wardrop Engineering Inc. Watts, Griffis and McOuat Limited William Pearson Family Fund

Silver ($500 to $1,999) Alexandria Minerals Corporation Anglo American Exploration Canada Inc. Augen Capital Corp. Coastal Hydraulics Ltd. Freewest Resources Canada Inc. GeoVector Management Inc. Hawk Uranium Inc. Hunter Dickenson Inc. IAMGOLD International Web Development Corp. King Bay Chaplaincy Kreative Ventures Limited Limited Market Dealers Association of Canada MacDonald Mines Exploration Ltd. McGovern, Hurley, Cunningham LLP McMillan Binch Mendelsohn LLP MinePros Personnel Inc. JP Morgan Securities Inc. Olympus Pacific Minerals Inc. Pinetree Capital Ltd. Probe Mines Limited Rainy River Resources Ltd. Renforth Resources Inc. Royal Gold Inc. Scott Wilson Roscoe Postle Associates Inc. Arthur Slade Spider Resources Inc. Temex Resources Corp. TSX Group

Copper (up to $499) Anatolia Minerals Development Ltd. Aurora Geosciences Ltd. Carman Construction Inc. Cowan Minerals Ltd. Cypress Development Corp. D.R.J. Geocan Ltd. Easy Realty Limited Envirodrill Ltd. N.W. Rayner & Associates Inc. PK Geologic Services Limited Ridgestake Resources Inc. Rocknest Corp. Silver Capital Corp. T. Pugsley Limited Trans Polar Geological Consultants Inc.

Walcer Geophysics Ltd. Womenâ&#x20AC;&#x2122;s Association of the Mining Industry of Canada

Individual Contributors Diamond ($500 plus) Stuart Averil W. E. Barnett Michael Bourassa Ronald Gagel John Harvey Scott Jobin-Bevans Gerhard Kirchner Mary Ann Mihychuk Gregory New Charles Oâ&#x20AC;&#x2122;Sullivan David Robertson Robert Whittall

Gold ($200 to $499) Rupert Allan Gordon Bogden John Carrington Nell Dragovan Michael Hoffman Allan MacTavish Amy Nishio Ian Pirie James Pirie Konrad Radacz Paul Severin Fern Turner Steve Vaughan Steven Wallace

Silver ($50 to $199) Nean Allman Anthony Andrews Diane Baldwin Ted Baumgartner Dave Beggs Donald Black Daniel Brisban Lorne Burden John King Burns Lloyd Clark Laura Clinton Bryan Coates Brent Cochrane Gerald Cooper Ed Debicki Ruth Debicki Christopher Dyakowsi Martin Eastwood Peter Ferderber Ian Forrest Jose Garcia Jack Garnett Richard Garnett John Gilliatt John Goode

Allan Goodwin Scott Grant Michael Gray John Hainey John Hansuld Donald Hattie Chris Hesse Brian Hester Len Homeniuk Robert Hornal Greg Hryniw John Jainey David Jamieson Maureen Jenson Frank Joagodits Dennis Jones FLouise Kennedy Leni Keough Ed Kimura Nickolas Kohlmann Frank Kurzich Robert Kusins Jim Laird Jean LeBlanc Marcelo Llerena Brenda MacMurray Roger Macqueen Ron Malashewski Michael Marchand Chris Marmont Michael McCombe Glen McDonald Andrew Mikitchook Nick Nicolaas Jim Patterson John Patterson Donald Phipps John Prochnau George Rayfield Cameron Rennie Robert Reukl Michelle Robinson Jean Roy Laura Scaife Terence Schorn Glenn Scott Patricia Sheahan Desh Sikka Charles Smith David Smith Otto Snel Hugh Snyder Harold Steacy Gritz Testo Rodney Thomas John Trenowesky Robert Valliant Canby Vertrees Christopher Wagg James Walker Tony Watts George Werniuk H. Vance White John Whitton

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news An illuminating exhibit

The 407.48-carat Incomparable Diamond. Photo: Asher Wilens

When the Royal Ontario Museum (ROM) opened its Nature of Diamonds show last month, it was almost certain that it would attract a lot of attention. The highlight of the by Peter Diekmeyer exhibit is a colossal 407.48 carat, flawless kite-shaped stone named the Incomparable Diamond, which is said to be the world’s third-largest. Naturally, the first question that comes to mind to anyone who sees it is: “How much could it possibly be worth?” The problem is that there are no ready answers. “Pieces like the Incomparable Diamond are extremely rare,” said 18 | CIM Magazine | Vol. 3, No. 8

Derek Teevan, a spokesman for De Beers Canada. “Most fall into categories of their own, as they are…well, incomparable. Because they have unique properties, they are exceedingly difficult to evaluate. All I can say is that we are very happy to have the piece as part of the exhibit.” The De Beers Canada-sponsored event, on display until March 22, 2009 at the ROM’s Garfield Weston Exhibition Hall, highlights the nature and uses of diamonds in Canada. The Incomparable Diamond is just one of a stunning array of jewels from around the world that comprise the museum’s walk-in “gem vault.” Other famous pieces include the Princess Mathilde Corsage — a 19th century floral design set with 250 carats of diamonds — as well as a spectacular array of brooches, tiaras and necklaces. The Historical Galleries section illuminates the cultural and historical significance of diamonds, including their role in adornment. Meanwhile, an authentic recreation of a kimberlite mine tunnel gives visitors a sense of the conditions diamond miners face around the world. “We wanted to give visitors a sense of the history of diamond activity,” said Teevan. “But we also wanted to demonstrate tangibly why diamonds have so piqued the imagination of our ancestors.” He also said that it is the company’s way of giving back to the community. “The opening of two new De Beers mines in Canada — Snap Lake in the Northwest Territories and Victor in northeastern Ontario — has

helped cement this country’s position as the third-largest global producer in value terms, behind Botswana and Russia,” explained Teevan. Sponsorship of such a prestigious event represents a sizable commitment for De Beers Canada, which is only just starting to generate revenues from the more than $2 billion it has invested in its Canadian mining operations. “This initiative is designed to help position De Beers as the premier diamond company locally and internationally,” said Teevan. “It is also an opportunity to reemphasize our commitment to Canada and to our ongoing program for further diamond discoveries.” Of course, the Nature of Diamonds show will almost surely generate significant additional benefits beyond the goals set out by De Beers. The irresistible allure of seeing these spectacular jewels up close and personal will almost surely stimulate additional demand for these sparkling gems and help boost Canada’s diamond industry. CIM

©Royal Ontario Museum, 2008

©Premier Gem Corp., 2008

Showcasing the Incomparable Diamond

Tip of the Iceberg ring features a natural, uncut 2,78-carat diamond from the Ekati mine.

news Other earthly treasures

More than 2,300 samples will be featured in ROM’s Teck Suite of Galleries

Cavansite

Diamonds aren’t the only minerals that will be on display at the Royal Ontario Museum. Starting in late December, the ROM will devote 6,700 square feet on level two of the Weston Family Wing to showcasing a massive collection of minerals, rocks and gem samples, hailed as one of the finest in North America. The displays, sponsored by Teck, will comprise three parts: the Vale Inco Gallery of Minerals, the Gallery of Gems and Gold and the Canadian Mining Hall of Fame Gallery. These exhibits will be enriched by the addition of key information on the Canadian mining industry, displayed on 40 interactive touch screens. Don Lindsay, Teck’s president and CEO, said that sponsorship of the event represents a clear demonstration of the company’s commitment to social responsibility. “As a proud Canadian mining company, we believe in the importance of understanding our natural resources,” said Lindsay. “Everything in our daily lives actually comes from only two sources: it is either grown and harvested, or it is mined from the earth. The Teck Suite of Galleries will help people learn more about the key minerals that support their lives.” According to Royal Ontario Museum sources, Teck’s contribution to the Renaissance ROM campaign was the largest corporate gift in the museum’s history. CIM

Speak up! MiHR launches mining industry Speakers’ Bureau To address the labour shortage in the mining industry, the Mining Industry Human Resources Council (MiHR) has launched the Explore for More attraction and recruitment campaign. An important component of this endeavour involves classroom and community outreach through speaker presentations. To this end, MiHR is hoping to entice representatives who are passionate about the mining industry to share their valuable insights and experiences with potential career-seekers. “MiHR receives requests for classroom presentations on a regular basis,” explained Ryan Montpellier, MiHR’s executive director. “In order to meet these demands, we need a team of enthusiastic volunteers from across Canada who can share information about the interesting and challenging opportunities in our sector. Providing

real insights and exposure to the modern mining industry ‘debunks’ old views and negative stereotypes. Changing these dated perceptions is an important step to building the next generation of workers for our sector.” By making presentations in the community — at schools, community and recreation centres, industry organizations, career fairs, etc. — speakers can play a vital role in raising awareness about the mining industry, promoting career opportunities and helping steer interested individuals to the appropriate resources. In turn, speakers, educators and members of the general public can use the resources available through the Speakers’ Bureau to develop a presentation that suits their needs. If you are interested in joining MiHR’s Speaker’s Bureau, visit www.acareerinmining.ca CIM

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news Four Billion Years and Counting

Photo by Rob Fensome, Geological Survey of Canada

Book to explore Canada’s geology

The FBY book will feature spectacular photographs such as this one of Rissers Beach, Nova Scotia.

Inspired by the success of several popular regional geology books, in 2004 a group of Canadian geoloby the FBY editorial board gists set out to produce a popular book on the geology of Canada. Crucial milestones in this effort

included a session at the GAC-MAC conference in 2005 and acceptance of the book in 2006 as a primary Canadian contribution to the International Year of Planet Earth (IYPE). The book, entitled Four Billion Years and Counting: Canada’s Geological

Heritage will be published in English and French by the Canadian Federation of Earth Sciences in association with private publishers. It will showcase this country’s fascinating geology and its impacts on the lives of all Canadians. Over 50 expert authors have contributed to the text and an editorial team is at work, crafting the manuscript into a cohesive story that will be accessible to an interested general audience, as well as to geologists seeking enlightenment outside their specialty. The text will be complemented by eyecatching photographs and drawings, all in full colour. The book is divided into three parts. The first part, Foundations, introduces readers to key topics such as plate tectonics, geological time and evolution. The second section, Evolution of Canada, unravels four billion years of the country’s geological history as a series of “time slices” with a broad, rather than a regional, perspective, and places Canada in an everchanging global context. This story is enriched by a set of over 20 new paleo-

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news geographic maps of North America from 750 to three million years ago. The third part, Wealth and Health, covers economic, social and environmental issues, including chapters on mining, energy, building stone, water, hazards, environment and climate. Producing two substantial, fullcolour books is an expensive undertaking. Fundraising, carried out mainly by the Canadian IYPE National Committee, has been challenging. Early on, the project benefited greatly from grants from the Canadian Geological Foundation for graphics and from Natural Resources Canada for travel and “in kind” assistance. The book has also received considerable sponsorship earmarked for its production phase. Nexen Inc. generously provided a large cash donation, only slightly exceeded by contributions from 13 individuals and small organizations who are sponsoring individual chapters. The French version has

received strong support from the Ministère des Ressources naturelles et de la Faune du Québec and Québec Exploration. Nevertheless, more financial support is required and thus fundraising continues. We are making major strides towards completing the book, all the more satisfying considering the complexity of the project. The editors greatly appreciate the input, enthusiasm, encouragement and patience of all contributors. Everybody is working hard to produce a book that highlights Canada’s geology and its intimate link to our national well-being and our heritage — a heritage that contributes fundamentally to making Canada such a strikingly beautiful and special place. CIM Contact Rob Fensome (rfensome@nr can.gc.ca) for further information and the latest project newsletter, or checkout the project website (http://cfesfcst .ca/fby/index.html).

Moving on up Michael D. Winship was appointed president and COO at HudBay Minerals Inc. As COO at PT Inco in Indonesia, he was responsible for nickel laterite mining and processing operations. His experience spans all phases of mining activity including exploration, mining, mineral processing, smelting and refining. HudBay also announced the move of Alan Hair to the position of senior vice president, development, and of Tom Goodman to the role of senior vice president, operations, Hudson Bay Mining and Smelting Co. Ltd.

December 2008 / January 2009 | 21

news A view from the hill Economy on the top of the agenda at MAC’s Mining Day on the Hill

Photos courtesy of Jake Wright

Fisheries and Oceans, Indian and Northern Affairs Canada, Human Resources and Development Canada, Industry Canada, the Privy Council and the Prime Minister’s Office to discuss how the negative fallout could be mitigated and to explore ways to manage the current challenges. “A strong mining sector benefits Canadians in every riding across this country,” said Jim Gowans, president and CEO of De Beers Canada and chair of MAC. “We are all facing difficult economic times. Now it is more important than ever that we work with government to ensure that programs, regulations and legislation help to sustain mining jobs across Canada. This is more relevant in remote locations where economic development options are limited and The Honourable Lisa Raitt, the Minister of Natural Resources, and Jim Gowans, president and CEO of De Beers Canada and chair of MAC, speaking with a guest at the reception. operating costs are high.” Participants stressed the dangers of comOver 40 of Canada’s senior mining industry execu- placency, highlighting the mining sector’s contribution to tives met in Ottawa recently to take part in the Mining the economy, such as its $41.9 billion contribution to the Association of Canada / Mining Works GDP, $25 billion in capital expenditures and direct for Canada annual Mining Day on the employment of 363,000 individuals. They called upon the by Angie Gordon Hill. Not surprisingly, at the top of this government to: year’s agenda was the impact of recent worldwide eco• Stay the course to improve the investment climate; nomic events on the mining sector. To this end, indus• Maintain its commitment to regulatory review and impletry representatives met with senior federal officials mentation of the Northern Regulatory Improvement from Natural Resources Canada, the Department of Initiative;

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news • Implement regulations for air pollutants and greenhouse gas emissions that are efficient and effective, without duplication between jurisdictions, and set appropriate targets; • Implement a clear approach by governments on consultation with and accommodation of First Nations, efficient resolution of First Nation land claims and a strategy to encourage aboriginal participation in mining. During a luncheon, keynote speaker Don Drummond — senior vice president and chief economist, TD Bank Financial Group, and chair of the Advisory Panel, Labour Market Information — spoke about the global economy and its implications for mining. He also used the venue as an opportunity to gain an understanding of the mining industry’s concern over labour market information. Approximately 90 guests from the mining sector and federal officials participated in the interactive session. “The economic challenge we all face is daunting but working together will help us achieve appropriate outcomes to meet climate change commitments, secure a skilled workforce and set the stage

for a competitive and productive future for all Canadians,” stated Gordon Peeling, MAC’s president and CEO. The day concluded with a reception that included over 300 guests and several parliamentarians who were in Ottawa for the first day of the Parliamentary sessions. Many MPs

from key mining jurisdictions were present. In her opening remarks for the reception, the Honourable Lisa Raitt, the Minister of Natural Resources, signaled to delegates that she was interested in working with the mining sector, which was particularly welcome news in these uncertain economic times. CIM

Giving Back Funding vibrant communities The $200 million Rio Tinto Alcan Canada Fund was created in 2008 to support projects and organizations that contribute towards sustainable and vibrant communities. The first series of contributions, totalling over $15 million, will be allocated over the next seven years. Among the beneficiaries of the first round of contributions will be Université Laval’s cooperative programs in mining and mineral processing engineering and materials and metallurgical engineering.

December 2008 / January 2009 | 23

news Tops in sustainability Xstrata Nickel’s Raglan mine tops list of sustainable mining operations in Quebec

The Raglan mine is situated in an environment that is as cold and harsh as it is beautiful and fragile.

Mining companies now accord as much attention to the sustainability of their operations as was traditionally accorded to profitability and quality control. This has not escaped notice. Xstrata Nickel’s Raglan mine recently won top honours for its efforts by Minaz Kerawala in this direction. The November 2008 issue of the French language Vision Durable magazine featured a comprehensive sustainability assessment of 20 Quebec mines. The leading consultants Groupe Investissement Responsable examined the mines’ performance on the following four measures: Environmental performance (weighted 30 per cent), Social per-

formance (weighted 30 per cent), Socio-environmental governance (weighted 30 per cent), and Socioenvironmental transparency (weighted ten per cent). Publicly reported data was used without informing the companies being studied to ensure uninfluenced measurement. The Nunavik-based Raglan mine was ranked overall number one — a distinction that Xstrata is proud of, but not surprised by. The company’s rigorous sustainable development policy mandates Raglan to plan and conduct activities with robust governance, so that longterm success is ensured at minimal risk and costs. More importantly, the company sees the adoption and

integration of sustainable practices into its vision as an ethical and a pragmatic imperative. This is not the first time that Raglan and Xstrata have gained safety or sustainability-related recognition. In 2007, Raglan won the F.J. O’Connell safety award for the ninth time in ten years. This year, Xstrata plc was named the Global Super Sector Leader for Basic Resources by the Dow Jones Sustainability Index. Other mines assessed favourably included Inmet Mining’s Troilus mine and ArcelorMittal’s Mount Wright mine, which secured the overall second and third places, respectively. CIM

Achievements HudBay Minerals Inc. was dubbed Manitoba’s 2008 Outstanding Large Business by the Manitoba Chambers of Commerce. The honour is especially significant for HudBay as it comes during the company’s 80th anniversary year. The award is presented to companies with over 200 employees. This year, it was given in recognition of HudBay’s significant contribution to employment in Manitoba, its strong social commitment and its impressive growth record. 24 | CIM Magazine | Vol. 3, No. 8

Bucyrus International won the 2008 Baird Management Excellence Award. Created in 1981, the award, administered by the employee-owned, international wealth and asset management firm Baird, recognizes consistent superior performance by companies on behalf of their customers, employees, shareholders and communities. Baird selects winners in consultation with officers of the Executive MBA Alumni Association at the University of WisconsinMilwaukee Sheldon B. Lubar School of Business.

news La meilleure cote en durabilité La mine Raglan de Xstrata Nickel a obtenu la meilleure cote de durabilité des exploitations minières du Québec ment durable de la compagnie obligent Raglan à planifier et à effectuer ses activités dans le cadre d’une gouvernance sévère, afin que le succès à long terme soit assuré à un minimum de risques et de coûts. De manière plus importante, la compagnie voit l’adoption et l’intégration de pratiques durables dans sa vision comme un impératif éthique et pragmatique. Ce n’est pas la première fois que Raglan et Xstrata sont reconnus en sécurité ou en durabilité; en effet, en 2007, Raglan s’est mérité le prix F.J. O’Connell pour la sécurité pour la neuvième fois en dix ans. Cette année, Xstrata plc a obtenu la reconnaissance de l’indice de développement durable de Dow Jones à titre de chef de file mondial du secteur élargi des ressources de base. D’autres mines qui ont obtenu de bonnes cotes incluent la mine Troilus d’Inmet Mining et la mine Mont Wright d’ArcelorMittal, qui ont obtenu respectivement la deuxième et la troisième place. ICM

MineMaster Mine Utility Vehicles Torquematic T-100 Raglan a effectué un programme de suivi de l’ombre de l’Arctique en collaboration avec les communautés inuites voisines. Leurs connaissances traditionnelles de migration des poissons et des mammifères marins ont aidé à prendre la décision de raccourcir la saison de transport maritime et de ne pas casser la glace de mars à juin dans la baie Déception.

Les compagnies minières accordent maintenant autant d’attention à la durabilité de leurs exploitations qu’elles accordaient traditionnellement à la rentabilité et au contrôle de la qualité. Cela ne passe pas inaperçu. La mine Raglan de Xstrata Nickel a récemment été reconnue pour ses efforts en ce sens. Le numéro de novembre 2008 de la revue Vision Durable présentait une évaluation complète de la durabilité de 20 mines québécoises. Les consultants chevronnés du Groupe Investissement Responsable ont analysé la performance des mines selon quatre indicateurs : la performance environnementale (pondérée à 30 pour cent), la performance sociale (pondérée à 30 pour cent), la gouvernance socioenvironnementale des entreprises (pondérée à 30 pour cent) et la transparence socioenvironnementale (pondérée à 10 pour cent). Des données publiques ont été utilisées sans que les compagnies aient été avisées afin d’assurer des mesures non biaisées. La mine Raglan au Nunavik a obtenu la meilleure cote — une distinction dont Xstrata est fière, mais qui ne la surprend pas. Les politiques rigoureuses de développe-

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news Teck talk A timely discussion with Teck’s president and CEO, Don Lindsay much bigger. Ultimately, we decided to unify the brand under one name, which really wasn’t such a big change as we were generally referred to as Teck for short anyways.

With news of the recent rebranding of Teck Cominco to Teck, CIM Magazine spoke with Don Lindsay, the company’s president and CEO, about the reasoning behind the change, other company initiatives, as well as his views on the impact of recent world events on the minerals industry. CIM: Our readers would like to know a little bit about your background and your role at Teck. Lindsay: I’ve had a long-term interest and history with the mining industry. I visited my first mine while on a canoe trip when I was nine years old. It happened to be a Teck copper mine in Temagami that my current chairman’s father had discovered. That was over 40 years ago, but I have been a student of the industry ever since. After I graduated with a degree in mining engineering from Queen’s University, I worked underground in Uranium City, in the old El Dorado nuclear operations, and later at the Iron Ore Company of Canada in Labrador City in mining operations, engineering and as a general foreman for blasting. I then went back to get an MBA from Harvard University, after which I ended up on the investment side of the by Binod Sundararajan industry in what was then Wood Gundy Ltd., that later became CIBC World Markets. While there, I started the global mining group and got to know the industry quite well. I finished there as president of CIBC World Markets and came here four years ago as president and became CEO soon after I arrived. 26 | CIM Magazine | Vol. 3, No. 8

CIM: Can you tell us the reasoning behind the simplified brand and name? Lindsay: Teck and Cominco merged back in 2001. The name Cominco had a strong reputation around the world as the biggest and best in all things zinc and also had a larger company status, as it was associated with the Canadian Pacific group that it had been a part of. Meanwhile, Teck had the reputation of being a very entrepreneurial, diversified company that knew how to take advantage of opportunities — whatever the commodity might be — to make money for shareholders. After Teck took over Cominco, over time we grew into more of a diversified business. Although we have one of the strongest and best quality zinc businesses in the world, it became the third largest business for Teck Cominco because the copper business grew so substantially over the last four years and the coal business also became

CIM: Can you give us a broad outlook for the various sectors with respect to both the Canadian and the global situation? Lindsay: The outlook in the short term is quite severe and how low it will go is, frankly, anyone’s guess. We’ve had a lot of discussion with key business leaders and government officials in China, and they have certainly reaffirmed their commitment to a long-term urbanization trend. They want to take their level of urbanization from where it is currently, approximately 35 per cent, to about 65 per cent in order to have an economy that, in the long term, will be structurally competitive with the United States. For them to do that, it means transferring roughly 20 million people a year from rural to urban communities, and that would require a lot of commodities. So, we believe that the long-term trend is still there and it underpins longterm growth and demand for copper, coal, zinc and energy. However, this has always been and always will remain a cyclical industry and there will be downturns. In this case, what we’re facing is a combined downturn in all markets around the globe, including in China. But the world always tends to fix itself somehow and there have certainly been quite dramatic actions taken by governments around the world. We already know of over $5 trillion in stimulus packages that have been announced, and there will

news

be more. But the problem with those packages is that there is a lag time — four to six months or longer — before they really kick in. Eventually, those stimulus packages will kick in and the fear will subside. Meanwhile, the people in China, India and other emerging markets have had a taste of a better life and that won’t go away. That’s the fundamental driver of everything. A couple of years from now, if demand in these markets resumes, copper, zinc, nickel, coal and iron supplies will be very tight. We feel that copper and metallurgical coal will be the tightest of all. That’s why, over the last three or four years, we’ve been concentrating on building up those businesses. The zinc business is very good and our product is very high-quality, but China is the largest producer and consumer of zinc and we need to see how their industry shapes up. We see them taking the right steps. The Chinese government seems to be quite committed to a minimum long-term growth rate of eight per cent and the leaders tell us that commodity consumption will be one-and-a-half to two times GDP growth. If that occurs, it will be very good for us, because of the sheer volume that they consume. CIM: Other than the market crisis, will the industry be facing any other challenges in 2009? Lindsay: Another broader ongoing challenge is the education of the general public about the value of minerals in our day-to-day lives. To really catch people’s attention, I put it this way: everything that we use in our day-to-day lives comes from one of only two sources — if you can’t grow it, you have to mine it. And the more that we can get that message across to people and demonstrate that we are absolutely committed to providing those minerals in as sustainable a fashion as possible, the further we will go in supporting the viability of this industry.

CIM: Your 2006 Sustainability Report was entitled “This is our future.” We just witnessed the demise in importance of sustainability in the political sector in light of the current fiscal crisis. In tough times, is this an area that faces cuts? Lindsay: It would be very hard to live with something like that. We have a culture in this company. Every decision we make, small or large, no matter what community or country, the test is that we ask ourselves whether we are doing the right thing. At the end of the day, we all have to go home and live with ourselves. For all of the people that I hire and all the people that they in turn hire, the main thing we are looking for is that people really believe in those principles. Sure, we’re going to be making some cutbacks — we announced a bunch recently — but a number of things are sacrosanct, for example, safety. Any capital that was going to any project or any site that had any connection to safety was not cut. That’s just who we are. CIM: Teck has also certainly “walked the talk” on issues of social investment. Can you tell us about some of your company initiatives in this regard? Lindsay: In terms of community investment, in the last three or four years we’ve stepped that up enormously. To be fair, we were having good times, which enabled us to do that — starting with the lead donation on the campaign for the BC Children’s Hospital where we committed $25 million. I am the chair of the campaign and I commit a lot of my time to it. That hospital has a mandate to provide care to a million children all across the province. We have 5,500 employees in BC and there are so many examples of employees

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news and communities that have benefited from that hospital, so it’s an investment in our people as well. Globally, we could also turn to Peru where our Antamina operation has donated $43 million to aid in health services and child malnutrition education in rural areas, and to improve economic opportunities for the poorer

communities. Dave Parker, our vice president of sustainability, is consulted by people around the world, including members of the Clinton Sustainability Initiative, for his expertise on how to deploy resources to help different communities. I also chair the International Zinc Association, and a lot of peo-

ple don’t realize how important zinc is for the healthy growth and reproduction of plants. This past spring, an eight-member group called the Copenhagen Consensus — five of whom have won Nobel prizes — made a declaration that zinc and vitamin A can contribute to making the planet a better place. If we could get zinc and vitamin A to the children in sub-Saharan African countries and some Asian countries, that would have a major effect on brain development. Also, zinc is one of the four major nutrients critical for crop production. If we could get one per cent of zinc in the fertilizer, that could increase crop production enormously in some Asian countries, as it helps to counteract iron contamination in the soil. It could increase rice production by as much as 30 per cent in some areas. A lot of people don’t know this. They think of zinc purely as a metal, but it’s also an important nutrient. Throughout the company, we are striving to ensure that people know that corporate social responsibility starts with understanding the impact of all our activities at every stage. We need to have a very clear understanding of both the negatives and the positives. Our goals, for the communities we are in, are to advance their social and economic aspirations, health and wellness and to address any concerns that they may have. Minimizing our environmental footprint is also a key imperative. Ensuring a safe and healthy workplace and building constructive relationships with First Nations communities are all critical to our ability to operate here. We have to be conscious about it and that is how we hire people. If you wander through this company and talk to the employees about the kind of culture we are developing, you’ll discover that it starts with people’s core values. CIM To view the complete interview with Don Lindsay, visit CIM Magazine on the CIM website at www.cim.org

28 | CIM Magazine | Vol. 3, No. 8

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outlook 2009

Tim Sullivan President and CEO, Bucyrus

Charles Oliver Senior Portfollio Manager, Sprott Asset Management

Turn, turn, turn

Dr. R. Anthony Hodge President, International Council on Mining and Metals

A season of change ahead for 2009 by Dan Zlotnikov Illustrations by AndrĂŠ Pijet

30 | CIM Magazine | Vol. 3, No. 8

o everything, there is a season. This cyclical reality could possibly serve as a credo for the mining industry, which, over time, has certainly witnessed its fair share of climatic shifts. The last couple of years have seen sunny skies for mining companies across Canada and around the world. While both operators and junior firms had to face increasing capital and operating costs, record-high prices for many commodities brought with them an enormous amount of investor attention.With oil, and consequently diesel fuel, commanding record prices earlier this year, companies needed more money to complete every stage of the process, but that capital was relatively easy to come by.

outlook 2009

Vincent Borg Senior Vice President, Corporate Communications, Barrick Gold

Ramzi Fawaz Vice President, Oil Sands Projects, Shell Canada

Although change is inevitable, few were prepared for the unexpected jolt precipitated by the drastic about-face of the financial markets a few months back. Since that time, the mining industry has been in a tailspin as regular sources of financing are effectively disappearing.

Forecast for 2009: cloudy As we approach the end of the year, the multi-million-dollar question on many peoples’ minds is,“What will the future hold for 2009?” “Most of the news for the next six months — or however long this market crisis takes to resolve — is going to be bad,” said Charles Oliver, senior portfolio manager handling the precious metals and the all-cap investment funds at Sprott Asset Management. R. Anthony (Tony) Hodge, president of the International Council on Mining and Metals (ICMM) voiced similar but

less pessimistic views. “The economic crisis will have a dramatic effect on the mining industry,” he said. The impact, according to Hodge, will be felt in a number of ways.“First of all, every mining company I am aware of is trimming its budgets,” Hodge explained, adding that projects viewed as non-essential are likely to be scaled back or cancelled outright. “Secondly, you’re likely to see an immediate and quite dramatic decrease in exploration activity,” he continued. And finally, Hodge suggested that with so much panic selling going on in the stock markets, the weakened share price of so many well-established companies will lead to an increase in acquisition activity. “There are many companies out there right now that are valued according to their market share price, which is well below their book value,” he explained. “This makes them very attractive for acquisition activity.” Of course, mergers and takeovers are nothing new for the industry. “Consolidation has been occurring for some time and typically comes in waves,” said Vince Borg, senior vice president, corporate communications at Barrick Gold. “But now the juniors who, a couple of years ago, could tap the credit or equity markets to fund a project, or their share of a project, are going to be seeking alternative arrangements, whereas before they would not have considered it.” This creates an environment in which some companies are not merely undervalued, but are more willing to sell, as a way to fund continued operations. “Some of the juniors are priced at ridiculous levels and don’t have any access to capital, which is making things very hard for them,”agreed Oliver, adding that there are a rare few who have successfully formed joint ventures with the bigger firms.“There are some things going on, but it probably won’t be until the markets calm down a bit before you see things pick up,”he said. December 2008 / January 2009 | 31

outlook 2009 that a little easing off might not make much of a difference anyway,” he said. Sullivan also pointed out that brownfields projects, which focus on the expansion of existing operations, might have an easier time securing financing than the higher risk junior exploration firms.“It is more difficult when you walk into a bank and say ‘we have this property that we think is really good, and here is what our studies show,’ versus,‘look at this mine that we’ve been operating for 10 years and would like to expand by 20 percent,’” Sullivan explained.

Extended forecast

While Tim Sullivan, president and CEO of equipment designer/manufacturer Bucyrus, agreed with the expectation of a decrease in exploration activity, his view of the impact of such a decrease is less negative.“There has been such a huge increase in exploration spending in the last couple of years

Sullivan also emphasized that the longer term prospects for the industry were quite promising, though the current market situation does not reflect that.“We, like virtually every other supplier to the industry, are effectively sold out for next year,”Sullivan said.“The suppliers are selling for 2010 right now, so we’re talking about what 2010 and 2011 will look like.”With a dragline taking as much as 28 months to go from being ordered to being in place at the site, the suppliers — and their investors — have no choice but to take the longer view, which in this case may prove to be a boon. Looking beyond the immediate crisis, Sullivan pointed to the BRIC countries as the ones likely to drive the recovery.“We did have an increase in activity in Eastern Europe and Russia in the last 12 months, primarily in the coal sector,” he explained. “That was in direct correlation to the fact that the Russians have converted about 18 per cent of their power generation from gas to coal. They decided to export that natural gas to Western Europe and convert those power plants.”Sullivan also expects Brazil, where Bucyrus has recently shipped a number of machines, to become a more prominent player.“As we look to 2010 and 2011, we could see even more activity there than we are seeing in Russia right now,” he said.“President Lula has been a pleasant surprise. His political beliefs are socialistic, but he has taken a very even-handed, middle-of-the-road approach to the economy and the programs that he has put in place. It has been very, very good for that country.”

An upside to the downturn Ramzi Fawaz, Shell Canada’s vice president of oil sands projects, identified skilled labour shortages as the biggest challenge facing Shell Canada in 2009. The company’s two expansion projects are in the middle of construction and will reach a labour requirements peak next year. Currently employing about 4,000 workers each, Fawaz projected that the company will need to hire an additional 1,000 skilled labourers to meet its construction timelines. “There are may be 35,000 craft workers available for all the heavy industry in Alberta,” explained Fawaz.“We were seeing quite a number of shortages in certain skills in the last two to three years.” But Shell, which was prepared to look to temporary foreign workers from places like the Philippines and India, expects the current market crisis to relieve some of the pressure, to the point where the Albertan labour pool might fill the company’s needs. 32 | CIM Magazine | Vol. 3, No. 8

outlook 2009 Like Fawaz, Sullivan felt that the skills shortages of the recent years were still going to be a major issue for the coming year, and not just here in Canada. He pointed out that Brazil’s greater focus on mining activity has also introduced it to the same skilled labour shortages that the developed world has been facing for the past few years. “The only places where we’re not short of people are India and, to a lesser extent, Russia. But all the developed nations that have been historical mining centres are really struggling for people,” he said. Sulllivan also acknowledged that the shortage is not limited to mining operations, but also includes suppliers. “We need welders and pipefitters too and it’s the same skill pool,” he said.

basis. When there is a huge slump like this, they react on the basis of the previous quarter’s results. This typically leads to immediate spending cuts and belt-tightening.” Meanwhile, similar to the HR issue, if you stop support for the exploration industry, new discoveries won’t be made, and the price will have to be paid down the road, when demand returns. Still,Borg acknowledged that the short-term focus is driven by investors and the new realities that go with a depressed economic outlook. “They’re saying to the industry: ‘you’ve got this project that you said was going to be developed in a certain time-frame and you’re not moving ahead with it because project financing may be more stringent or unavailable. What are you going to do?’So then the company is forced to look at alternative options to realize the value and to maximize shareholder value.” The common option is to sell off some of the non-core assets and focus on the properties the company wants to maintain and develop. But as the markets continue to fluctuate, companies run the risk of having to sell off too much, just to maintain the necessary cash reserve levels. “You’ve seen hedge funds rushing to deleverage, selling at any price, regardless of valuation,” said Oliver. “In a lot of cases we’ve seen companies — even producing ones — trading at a discount to their cash on the balance sheet; their net cash. It just goes to show how illogical some of the selling is that is currently going on in the market.” This focus on the here-and-now is a serious problem for the long-term prospects of mining, agreed Hodge. “Unfortunately the way the system works, it is absolutely dominated by short-term thinking,” he said.“And I think what people are saying worldwide right now, is that this short-term perspective has to be supplemented with a longer-term vision, so that the knee-jerk reaction isn’t as dominant.”

Plan of action for the year ahead

Preparing for tomorrow’s workforce today Hodge emphasized the importance of longer-term views in regards to the labour supply issue. “Some companies are facing a 50 per cent retirement rate,” he said, adding his concern that taking a short-term view of skills requirements, as was done during the previous mining slump, would cause further damage.“If the mining industry does now what it did in the eighties and nineties, and if the government once again pulls back on education related to mining, then the industry will be penalized 10 years from now.” This is similar, Hodge explained, to the exploration slump that occurred ten to 15 years back. The shortage of new discoveries was, in part, what drove up the commodity prices during the last two years.“Mining companies are no different from other corporations in our market economy,” he explained. “They report to their shareholders on a quarterly

So what should be the focus of the industry’s attention in the coming year? Fawaz emphasized the need for some market stability, but acknowledged that it would likely come from external, rather than internal, forces. Internally, he spoke of the need for larger companies like Shell to be sure that their partners —contractors, vendors and suppliers — remained healthy and able to survive against all sorts of sensitivities. Borg highlighted the need to manage company risk, in all its forms. “People’s definition of risk and how they apply risk management practices will become all the more important in this new world,” he said.“That includes everything from financial to operational risk. It’s just how you run your business and what risk management practices you bring to bear.” Oliver, who spoke of extremely tough times for the mining industry in 2009, said that much depends on whether the Chinese economy will decouple, resuming growth despite difficulties in the developed countries. Nevertheless, China is unlikely to see things improve significantly in 2009, despite a series of economy-boosting initiatives.“Over the last couple of December 2008 / January 2009 | 33

outlook 2009 months, we’ve actually seen the Chinese authorities suddenly lowering rates,”he explained.“They’ve done it a few times now — lowering reserve requirements and talking about fiscal stimulus programs. Usually, when a government does change its monetary policy, it takes a few quarters — up to nine months or a year — to show up in the rate of growth in the economy.” But in the more immediate sense, Oliver said that the fiscal stimulus actions taken by the U.S. — chief among those the $700 billion bailout — might benefit the mining industry before other sectors. “As you expand the money supply aggressively, which the U.S. Federal Reserve is seen to be doing, ultimately that can lead to higher commodity prices everywhere as their currency is devalued,” he explained.

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34 | CIM Magazine | Vol. 3, No. 8

With that in mind, he offered some potentially good news for gold companies like Goldcorp. “I do continue to believe that at some point the U.S. dollar is going to decrease dramatically and gold will go up,” he said, “but my patience is being tested, as it is for many investors.”

Beyond the balance sheet Hodge laid the greatest stress on looking beyond the immediate difficulties. According to him, extending the focus outward, beyond the quarterly balance sheet, is a critical component of the industry’s continued sustainability. “The mining industry can be a very powerful bridge to the future, reflecting the needs, values and the concerns of the people who are touched by mining,” Hodge said. “This includes not only the shareholders of the company, but also the communities and the regions in which mining projects are located.” The critical economic dimension needs to span company, community and region. In his eyes, the current market conditions present both a problem and an opportunity. “Often a downturn like this can be used to an advantage,” said Hodge. “Some of the most creative things that occur come as a result of these downturns. In the ideal situation, I think we’re going to find that present necessities will be a source of innovations on a number of fronts in the industry.” CIM

aperçus pour 2009

De gauche à droite : Tim Sullivan, président-directeur général, Bucyrus; Charles Oliver, gestionnaire principal de fonds, Sprott Asset Management; Dr. R. Anthony Hodge, président du Conseil International des Mines et Métaux; Vincent Borg, vice-président principal, Communications corporatives, Barrick Gold; Ramzi Fawaz, vice-président, projets des sables bitumineux, Shell Canada

Une saison de changements pour 2009

l y a une saison pour tout et un temps pour toute affaire sous les cieux (Eccl. 3 : 1). Cette réalité pourrait être la devise de l’industrie minière. Les dernières années avaient été très bonnes pour les compagnies minières au Canada et dans le monde; malgré des coûts toujours croissants d’investissements et d’exploitation, les prix records pour de nombreuses matières premières avait grandement attiré l’attention des investisseurs. Cependant, peu de gens étaient préparés pour le brusque revirement récent des marchés financiers.Depuis ce temps,l’industrie minière est dans un état d’extrême nervosité alors que les sources régulières de financement disparaissent une à une. En cette fin d’année, tous se posent la question « Que nous réserve l’année 2009? » « La plupart des nouvelles pour les six prochains mois – ou le temps nécessaire pour résoudre cette crise – seront mauvaises », dit Charles Oliver, gestionnaire principal de fonds chez Sprott Asset Management. Tony Hodge, président du Conseil International des Mines et Métaux (ICMM) est d’accord : « La crise économique aura

un effet dramatique sur l’industrie minière. Tout d’abord, les compagnies minières couperont leurs projets d’exploration et leurs budgets; les projets non essentiels seront réduits ou tout simplement coupés. » Il stipule que les ventes paniques des marchés boursiers et les prix abaissés des actions de compagnies bien établies conduiront à des acquisitions. « Il s’effectue des consolidations depuis plusieurs années », dit Vince Borg, vice-président principal, Communications corporatives, Barrick Gold. « Les compagnies junior pouvaient se financer par crédit ou sur le marché des actions mais elles devront trouver d’autres options. Cela crée un environnement dans lequel des compagnies sont sous-évaluées et veulent vendre afin de continuer à financer leurs opérations. » « Certaines compagnies junior sont cotées à des prix ridicules et elles n’ont pas accès à des capitaux, ce qui leur rend les choses très difficiles », confirme M. Oliver. Tim Sullivan, président-directeur général de Bucyrus, concepteur et manufacturier d’équipements, entérine l’attente d’une diminution des activités d’exploration mais sa vision de December 2008 / January 2009 | 35

aperçus pour 2009 l’impact est moins négative. « Il y a eu une hausse tellement grande des dépenses en exploration au cours des dernières années qu’une légère diminution ne fera pas une grande différence. » Selon lui, les projets d’expansion auront probablement plus de facilité à trouver du financement que les compagnies d’exploration. M. Sullivan souligne aussi que les perspectives à long terme sont prometteuses pour l’industrie,même si la situation actuelle des marchés ne le reflète pas. « Notre carnet de commandes de l’année prochaine est complet et nous vendons maintenant pour 2010.Comme il peut s’écouler 28 mois entre la commande d’une pelle à benne traînante et sa livraison sur le site, les fournisseurs – et les investisseurs – doivent prévoir à long terme. » Selon M.Sullivan les pays BRIC seront les moteurs du redressement. « Les activités ont augmenté en Europe de l’Est et en Russie au cours des 12 derniers mois, surtout dans le secteur du charbon », explique-t-il. C’est en raison du fait que les Russes ont converti une partie de leur production d’électricité au charbon, exportant le gaz naturel vers l’Europe de l’Ouest. M. Sullivan s’attend aussi à ce que le Brésil devienne un joueur plus important. « En nous tournant vers 2010 et 2011,nous y voyons encore plus d’activité qu’en Russie. Les croyances politiques du président Lula sont socialistes mais il est plutôt impartial en ce qui concerne l’économie. » Ramzi Fawaz, vice-président des projets de sables bitumineux chez Shell Canada, identifie la pénurie de main-d’œuvre comme le plus grand défi pour Shell en 2009. Les deux projets d’expansion de la compagnie sont en construction et la demande pour la main-d’œuvre atteindra un sommet l’an prochain; la compagnie devra en embaucher 1000 travailleurs spécialisés de plus pour rencontrer ses échéanciers. Selon M. Sullivan la pénurie de main-d’œuvre des dernières années se fera encore ressentir et non pas seulement au Canada. L’emphase du Brésil sur l’exploitation minière a introduit les mêmes pénuries de main-d’œuvre spécialisée que ressentent les pays développés depuis des années. « Il n’y a que l’Inde et, à un degré moindre, la Russie qui ne manquent pas de main-d’œuvre. » M. Hodge souligne l’importance d’une vision à long terme alors que certaines compagnies font face à des taux de mise à la retraite de 50 pour cent. « Si les compagnies minières font ce qu’elles ont fait dans les années 1980 et 1990 et que les gouvernements coupent dans l’éducation 36 | CIM Magazine | Vol. 3, No. 8

reliée aux mines, alors l’industrie sera pénalisée dans une dizaine d’années. » « Les compagnies minières sont comme les autres corporations dans une économie de marché;elles doivent répondre aux actionnaires. Lors d’une baisse, les dépenses sont immédiatement coupées. » Si, entre temps, vous ne supportez plus l’exploration, il n’y aura pas de découvertes et il faudra en payer le prix plus tard lorsque la demande s’intensifiera. M. Borg stipule que ce sont les investisseurs qui décident des cibles à court terme; la compagnie doit alors examiner des options pour maximiser la valeur des actions. Une option courante est de vendre des actifs non essentiels et de cibler les propriétés à développer. Les compagnies risquent cependant de vendre trop, uniquement pour maintenir les niveaux de liquidités nécessaires. « Cette emphase sur ici et maintenant représente un sérieux problème pour les perspectives à long terme de l’exploitation minière », dit M. Hodge. Pour la prochaine année, M. Fawaz souligne l’importance d’une stabilité des marchés, mais il reconnaît qu’elle proviendra de forces externes plutôt qu’internes. Tout d’abord, les grosses compagnies devront s’assurer que leurs partenaires – entrepreneurs, vendeurs et fournisseurs – demeurent en bonne santé financière et capables de résister à toutes sortes de fluctuations. Selon M. Borg les compagnies doivent gérer le risque sous toutes ses formes, des risques financiers aux risques opérationnels. Par sa part, M. Oliver parle de temps très durs pour l’industrie minière en 2009. Selon lui, beaucoup dépend de l’économie de la Chine; elle devrait voir peu d’amélioration en 2009 malgré des initiatives de démarrage. « Au cours des derniers mois, les autorités chinoises ont abaissé les taux et les exigences de réserves en plus de parler de programmes de stimulation de l’économie. » Selon M. Oliver, les actions des États-Unis – dont le sauvetage de 700 milliards de dollars – pourraient profiter à l’industrie minière avant les autres secteurs. « Lorsque vous développez la masse monétaire, comme le fait actuellement la Réserve fédérale américaine, cela conduit à une hausse des prix des matières premières partout alors que les monnaies sont dévaluées. » Cela dit, il offre de bonnes nouvelles pour des compagnies aurifères telles que Barrick. « Je continue à croire que la valeur du dollar américain chutera et que le prix de l’or grimpera. » M. Hodge stipule qu’il faut regarder au-delà des difficultés immédiates, plus loin que le bilan trimestriel. « L’industrie minière peut constituer un pont vers l’avenir et refléter les besoins, les valeurs et les préoccupations des individus touchés par les mines. Cela comprend non seulement les actionnaires d’une compagnie, mais aussi les communautés et les régions accueillant les projets miniers. » Il croit que les conditions actuelles des marchés représentent à la fois un problème et une occasion. « Je crois que les problèmes

outlook 2009

A much quieter 2009 Sharp slowdown in economies worldwide will choke raw material demand next year by Peter Diekmeyer

t has been a seesaw year for mining, metals and energy players. Despite the fact that many experts were forecasting slower growth, 2008 started out promisingly enough. Raw materials prices hit record levels, in part due to the hope that growing demand from emerging economies such as India and China would be decoupled from sluggishness in the Western world. Of course, things did not turn out quite as expected. The massive collapse of the U.S. financial sector started a chain reaction that had global repercussions. To make sense of the current turmoil, we spoke with Bart Melek, vice president and global commodity strategist at BMO Capital Markets. Melek has been following global economic trends for close to a decade.

CIM: These turbulent times must be difficult for forecasters. That said, can you give us sense of the industry mood right now? Melek: Although developments are unfolding rapidly, as we are speaking [during the last week of November] things look grim. The global economy was already slowing when the near collapse of the global financial system hit in October. Ironically, given the fact that base metal prices are nearly 50 per cent below levels of a year ago and that prices are below the operating costs faced by many pro-

ducers, sentiment is not as bearish as you might expect for the long run. The vast majority of the clients, producers and associates we met during the London Metal Exchange Week seemed to accept that it will be rough going as the global recession runs its course during the better part of 2009. However, optimism remained quite high regarding the longer term. CIM: Raw materials demand is closely tied to global economic growth. What are some of the key trends and indicators that you have been watching? December 2008 / January 2009 | 37

outlook 2009 Melek: Right now, developments in the United States are crucial, because what happens there affects almost everything else. The seizure of short-term credit markets started a longterm unwinding and de-leveraging. As a result, many companies and individuals are having a harder time and investors are forced to shy away from risk. These trends will affect the entire economy. Industrial production will be down, unemployment will rise and construction will take a hit. The key indicators that we will be watching for, to get a sense of where things are headed, are U.S. employment and consumer confidence indexes. Inflation data are also important because they act as a major constraint on the manoeuvre room of central banks. Fortunately, inflation does not appear to be a threat right now. Quite contrarily in fact, during the next few months, we will be more concerned with the prospect of disinflation. In emerging markets, we will be following data regarding fixed asset investments and industrial production. CIM: Most raw materials and commodities are priced in U.S. dollars. What is your view of the greenback’s future? Melek: To ease current pressures, there will likely be further aggressive interest rate cuts by central banks around the world. However, there will only be modest easing by the Federal Reserve. This means that the U.S. dollar will likely remain firm, whichpage_Oct08_.pdf will serve 10/21/2008 as a considerable negative for cim_onethird 12:55:21 PM commodity prices.

CIM: What effect will economic developments in the richer economies have on raw materials demand in emerging nations such as Brazil, India, Russia and China? Melek: As the U.S. economy slows, exports to the United States by these countries will take a big hit. These will have a direct effect on commodities demand, because investment in productive capacity will decline as will exports of products containing metals. China has already reacted in a big way with a four trillion yuan stimulus package that is equal to 15 per cent of the country’s GDP. However, beyond this recession, what is important is the long-term outlook, which we believe is as good as it has ever been. As urbanization projects continue, the middle classes in many of these countries will continue to grow and demand for new products and new cars, such as India’s famous Tata vehicles, will follow suit. CIM: What does all this mean for commodities? Melek: The near-term outlook is quite poor. The deepening recession and firm U.S. dollar have spurred the sharpest commodity crash in 36 years. The latest price correction in base metals has been the deepest and the swiftest in the postWorld War II era. Furthermore, mining equity valuations have also posted their fastest declines in the past five cycles. We expect base metals and bulk commodities to remain under considerable selling pressure well into next year, due to poor demand prospects, and a modest turnaround to occur only during the second half of 2009. CIM: What about oil? Melek: Oil prices have dropped significantly from their summer peaks of $147 per barrel to the $50 per barrel range as we speak, and will likely average around $70 per barrel during 2009. Over the longer term, limited spare capacity, sky-high marginal costs of production, modest oil infrastructure investment and the rising power of OPEC will push prices back to the $90 to $100 per barrel range. CIM: What does all this mean for gold? Melek: The U.S. dollar’s strength and the erosion of inflation pressures have caused us to change our view that gold would be the undisputed bright spot among the metals. That said, gold does have several things going for it. During times of uncertainty, gold is increasingly likely to be used as protection against financial market and geopolitical instability. In addition, the growing popularity of jewelry and bullion as stores of wealth in the developing and industrial world,

38 | CIM Magazine | Vol. 3, No. 8

outlook 2009

rising costs and primary supply side constraints also act as major supports. Although we are now somewhat less optimistic about gold’s prospects during the next six months, in relative terms, gold has outperformed virtually all the asset classes, a trend that is likely to stretch well into 2009. Over the long term, things look Bart Melek much better. Massive U.S. debt issues and big current account deficits will eventually take their toll on the greenback, a development that spells good news for gold prices. Possible monetization of the growing U.S. public debt obligations could provide further long-term support as investors turn to gold as a means to hedge against inflation.

CIM: What risks are attached to your forecasts? Melek: Plenty. We are currently in a very fluid environment and it is extremely hard to see how things will turn out. There are credible concerns that the current G-7 slump may deepen and that recent attempts to revitalize credit markets will do little to reverse the current trend. This could in turn lead to materially lower growth in China and an even grimmer demand outlook for everything ranging from copper to metallurgical coal to oil. CIM: How has the current turmoil affected the longer term outlook? Melek: The good news is that with the additional aggressive monetary and massive fiscal stimulus that is coming, the recent commodity bust is unlikely to linger for years. The longer term demand fundamentals for resources in the emerging markets and the developing world all suggest that the current trough will be relatively short lived. We currently expect that commodity markets may be reenergized soon after the G-7 economies start to emerge from their slump in the latter part of 2009. Furthermore, the end of consumption declines in the U.S. and Europe will no doubt start tightening supply/demand balances, which will likely have formed during the recession. CIM

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December 2008 / January 2009 | 39

aperçus pour 2009

Une année 2009 plutôt tranquille pour l’exploitation minière, les métaux et l’énergie Afin de comprendre la présente tourmente économique, nous avons rencontré Bart Melek, vice-président et analyste chez BMO Capital Markets. M. Melek suit les tendances économiques mondiales depuis près de dix ans.

ICM : Ces périodes de bouleversements doivent être difficiles pour les prévisionnistes; pouvez-vous nous donner une idée de l’actuel état d’esprit de l’industrie? M. Melek : L’avenir n’est pas rose. L’économie mondiale ralentissait déjà lorsque les systèmes financiers se sont presque effondrés en octobre dernier. Ironiquement, les prix des métaux de base sont presque 50 % inférieurs aux prix de l’an dernier et inférieurs aux prix d’exploitation de nombreux producteurs, mais la situation n’est pas tant à la baisse que l’on pourrait croire. La plupart des clients et des producteurs rencontrés à Londres durant la Semaine des métaux du London Metal Exchange semblaient accepter des temps difficiles pour la plus grande partie de l’année 2009 mais ils étaient optimistes quant aux prévisions à long terme. ICM : La demande pour des matériaux bruts est étroitement reliée à la croissance économique mondiale. Quelles tendances et quels indicateurs clés surveillez-vous? M. Melek : Ce qui se passe aux États-Unis affecte presque tout. Plusieurs compagnies et individus éprouvent des difficultés et les investisseurs craignent les risques. Les indicateurs clés à surveiller seront l’emploi aux États-Unis et les indices de confiance des consommateurs. Les données d’inflation sont aussi importantes car elles sont la principale contrainte sur la marge de manœuvre des banques centrales. ICM : Quel sera l’effet des développements économiques dans les économies riches sur la demande pour les matières brutes dans les pays BRIC? M. Melek : À mesure du ralentissement de l’économie américaine, les exportations de ces pays vers les États-Unis seront grandement touchées, diminuant la demande pour des matières premières. La Chine a déjà fortement réagit avec un programme de relance budgétaire équivalent à 15 % de son produit intérieur brut. Ce sont cependant les prévisions à long terme qui sont importantes et que nous croyons excellentes. Les classes moyennes de ces pays continueront à croître et la demande pour de nouveaux produits suivra. ICM : Quel sera l’effet sur les matières premières? M. Melek : L’aperçu à moyen terme est plutôt mauvais. Les métaux de base et les matières premières en vrac devraient 40 | CIM Magazine | Vol. 3, No. 8

continuer à subir des pressions de vente en raison de la faible demande; un redressement modeste pourrait avoir lieu dans la seconde moitié de 2009. ICM : Qu’arrivera-t-il au pétrole? M. Melek : Les prix du pétrole ont chuté depuis les sommets de 147 $/baril obtenus cet été; le prix moyen pour 2009 devrait être de l’ordre de 70 $/baril. À long terme,les coûts très élevés de production, les investissements modestes en infrastructures et la puissance de l’OPEP devraient faire remonter les prix à environ 90 à 100 $/baril. ICM : Quel serait l’impact sur l’or? M. Melek : Durant des temps d’incertitude, l’or devrait de plus en plus servir de protection contre l’instabilité géopolitique et celle des marchés financiers.De plus, la popularité croissant des bijoux et des lingots soutient cette vision. Nous sommes quelque peu moins optimistes quant aux perspectives de l’or pour les six prochains mois; cependant, en termes relatifs, l’or a obtenu la meilleure performance de toutes les classes d’actifs, une tendance qui devrait continuer en 2009. Les investisseurs pourraient aussi se tourner vers l’or en tant que valeur refuge. ICM : Quels risques sont reliés à vos prévisions? M. Melek : Ils sont nombreux car il est difficile de prédire comment tourneront les choses.Le marasme économique des pays du G-7 pourrait empirer et les efforts de revitalisation pourraient être inefficaces pour inverser la tendance. Cela pourrait conduire à une croissance moindre en Chine et une demande encore plus faible pour tout : le cuivre, le charbon métallurgique et le pétrole. ICM : Comment la crise financière actuelle affecte-t-elle les prévisions à long terme? M. Melek : Avec les mesures de relance budgétaire, le ralentissement récent dans les matières premières ne devrait pas durer des années. Les marchés des matières premières devraient reprendre de la vigueur peu après que les économies des pays du G-7 auront commencé à remonter, soit vers la fin de 2009. De plus, la fin du déclin de la consommation aux États-Unis et en Europe resserrera sans doute l’équilibre offre/demande. ICM

outlook 2009

Photo courtesy of Sandvik

Schedulled maintenance helps to minimize the impact of downtime and increases productivity.

Supply side economics A

The latest products help mining companies keep an eye on their bottom lines by Eavan Moore gainst the backdrop of worldwide financial uncertainty, mining companies will undoubtedly be scrutinizing their bottom lines with eagle-eyed diligence. But even in tough times, business must go on; worn-out machinery must be replaced and systems updated. Mining suppliers know that only those new and updated products that offer the best return on the dollar will be hot commodities. And if their offerings do not come with the assurance of reduced operating costs or enhanced productivity, they had better fly the flag of proven value.

Reducing operating costs Machinery has needs of its own, and foremost among them is fuel.“With the price of fuel today, if you can reduce consumption even by just a few percentage points, it can represent significant savings,” said Kirk Yoresen, marketing manager at ESCO Corp.“And that saving is ongoing, whenever the machine is being operated.”

According to Yoresen, ESCO’s EverSharp cast lip system, newly introduced for surface mining, is one such product. An increased nose angle reduces wear on the rear of the adapter, and an improved lip assembly profile allows more efficient bucket curl and filling.The lip and shroud bottoms have been moved up to reduce drag and improve penetration. Yoresen explained that by moving the back end of the bucket to reduce drag, penetration is more effective, reducing fuel consumption per load.“If you move that back end up out of the way without sacrificing the volume that is going into the bucket,it will pass through the material much more easily,”said Yoresen.“If the bucket loads in a pass and it does it in, say, 30 seconds versus another loading system that takes 35 seconds, that’s a difference of five seconds per pass. If the machine’s working 24 hours a day, which many of them are, you multiply that times a day’s operation — that’s a lot more passes in which they’re getting a full bucketload of ore.” Fuel economy is also a leading attribute of Komatsu’s PC88MR-8, a mid-sized (8.4-tonne) hydraulic excavator introDecember 2008 / January 2009 | 41

outlook 2009

ESCO`s EverSharp cast lip system allows for more efficient bucket curl and filling. Photo courtesy of ESCO

duced this past October.Featuring the exact same cab as larger models, its instrument package has an auto-idle feature, and an “eco”gauge signals whether or not the machine is operating at maximum fuel efficiency. The excavator’s fuel economy is said to be further enhanced by the ability to match hydraulic power to the job at hand, with five different working modes.

Minimizing downtime

Photo courtesy of Sandvik

When is equipment at its least productive? When it is in the shop for repairs. Because minimizing equipment downtime is a key goal for mine operators, reliability becomes essential.

The reliability of Sandvik’s DE740 drill means less downtime and more productivity. 42 | CIM Magazine | Vol. 3, No. 8

Sandvik’s new DE740 drill claims to offer this reliability within the context of established value. The DE740 represents the addition of a mid-size model to Sandvik’s range. Compact in size, especially given its 1,630-metre depth rating, the drill fits into a relatively small six-by-four or six-by-six truck, thanks to a hydraulically telescoping upper section. But according to John Slattery, Sandvik’s global technical services manager, surface exploration drills, it’s the drill’s brand that best represents its mark of quality. “The most important feature of the drill would be the proven reliability of our drills,” he said.“Less downtime equals more productivity for our customers.”The new drill still awaits its first Canadian customer, though Slattery said that the company has sold a number of them to operations in Australia, Chile and Africa. At some point, maintenance will inevitably bring a machine down, whether it is for ten minutes or ten days. However, a piece of equipment is equally unproductive if it has to be used to train new operators. A necessary expense? Not always. Immersive Technologies sells heavy equipment simulators that enable workers to be trained without using machinery that can be productively deployed in the field.The Advanced Equipment Simulator is designed to create an environment as close as possible to an actual machine at work on a mine site. It can be used for pre-employment and contract staff assessment, as well as to train future operators in the areas of machine operation, productivity and safety, or to provide refresher testing. One base simulator is fitted with individually purchased modules called Conversion Kits, modelled on specific pieces of equipment. The controls and display instruments are the same as those found in actual machines, and the motion base, sound system and side-view mirrors mimic the sensory output that would be experienced on site. A trainee is exposed to situations and events that would otherwise be too dangerous or difficult to orchestrate. The simulation software records the operator’s reactions and can play back the session or print out a detailed log. “By training staff in the simulators before they even step into the real equipment, or providing existing staff refresher training, there is a reduction in unschedulled maintenance, leading to increased productivity, profitability and an overall lower cost per tonne,” said Richard Calautti, marketing communications manager at Immersive Technologies. “Mines have slashed average monthly incidents of engine overspeed by 69 per cent and reduced haulage truck brake failures by 15 per cent. Haul truck safety-related incidents have fallen by 59 per cent. Tire costs have also been reduced.” The models available include simulations of products from Komatsu, Caterpillar, Liebherr, Hitachi and Bucyrus. Immersive Technologies’ exclusive alliances with these companies provide detailed proprietary technical information.

A student being trained in one of Immersive Technologies’ Advanced Equipment Simulators.

Making efficiency pay off In a well-run operation,pit optimization and production control are extraordinarily precise sciences.These days, they rely on computer software, which can run algorithms and compare schedules with far greater efficiency than can be achieved manually.This makes software choice critical — the simpler the interface and the more comprehensive the software integration, the less time personnel need to spend on routine planning. Matt Pesce, director of global marketing at Maptek, explained that the current economic situation makes operational efficiency more critical than ever.“Now people are saying they can’t afford as many people or equipment, or don’t have the same capital available, so they realize they have got to be more efficient.” Maptek’s software line includes Vulcan, a 3D geological modelling, surveying and mine planning program. Vulcan provides a logical process for driving efficiency through different mining processes. Referring to Vulcan’s comprehensiveness, Pesce said: “An example of Vulcan’s integrated capability is its power to optimize truck routes and then directly utilize that information when creating schedules. Updating schedules with real-world data ensures that they continue to be optimal. Maptek MineSuite can then be used to ensure the production schedules and targets are met.” Version 7.5, released in 2007, features a new module for oil sands operations. It also offers upgrades to the open pit, coal and underground design menu, as well as improvements in performance and usability. Software manufacturer Gemcom recently introduced updated versions of its five most popular products, among them Surpac 6.1, which is used for ore body evaluation, open pit and underground mine design, mine planning and production, and includes a new drafting mode that

enables greater design flexibility. It also has a new interface with Gemcom’s calculation software, Whittle. Canada-based Capstone Mining Corp. uses Surpac in its Cozamin silver mine in Mexico. Michelle Stone, senior geologist at Capstone, reported that one factor that influenced the company’s decision to use Surpac was its modular nature.“Being able to purchase the modules that are appropriate for our use at this time keeps our software budget under control,” she explained. Once designs are implemented, the follow-through also has to be as efficient as possible. To this end, Micromine offers Pitram, a mine production management system that records and controls mine site operations using automated GPS/telemetry or voice radio. According to Micromine, the system tracks and reports information in real time. It follows equipment around the site and records if it enters a restricted area. A production supervisor can set a target for a certain time period, monitor progress against the target, record why it was not met, and note actions taken to rectify the problem, thereby building up a methodology for improving progress. The Grade Control module helps to control tonnes and grades in storage sites throughout the operation, with shift-byshift snapshots. The latest version, Pitram 3, was launched in March 2008. According to Micromine’s technical business development manager, Nathan Jolly, the new features of Pitram 3 include a simplified user interface, functionality that allows multiple control room operators to use the software, and enhanced 3D visualization and advanced reporting capabilities. Few areas of the industry will be spared the intense scrutiny that economic instability inculcates. The emphasis on efficiency, productivity and cost-savings will likely intensify over the coming months as the markets perform their financial foxtrot. However, by responding to the needs of their customers, suppliers are endeavouring to help make the tough decisions a little easier. CIM

Photo courtesy of Maptek

Photo courtesy of Immersive Technologies

outlook 2009

Maptek Vulcan’s ability to integrate mine design and schedules drives optimum efficiency.

December 2008 / January 2009 | 43

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Moving ahead in tough times by Keith Bradbury, Department of Natural Resources, Government of Newfoundland and Labrador

Haul trucks await loading at IOC’s Lab West operation.

eck’s Duck Pond underground copper-zinc mine and associated processing mill officially opened on May 9, 2007. This central Newfoundland operation lies 30 kilometres south of the former Buchan’s mine. At startup, the deposit had proven reserves of 4.1 million tonnes at an average grade of 3.3% Cu, 5.7% Zn, 59 g/t Ag and 0.9 g/t Au. Production has been steadily increasing, nearing the projected capacity of 650,000 tonnes per annum. Annual employment at the mine is anticipated to average 192 people. Anaconda Mining Inc.’s Pine Cove open pit gold mine and mill commenced operations on May 5, 2008. The operation, located on the Baie Verte peninsula, is currently under option from New Island Resources, with Anaconda holding a 60 per cent interest. The deposit, discovered in 1988, has delineated 2,332,676 tonnes of indicated ore grading 2.76 g/t Au and 66,700 tonnes of inferred resources grading 2.43 g/t Au. Design capacity is 500 tonnes per day with a projected mine life of six years. The project is expected to employ approximately 44 people during operation. The total capital investment was $7 million, and operating costs are expected to be 46 | CIM Magazine | Vol. 3, No. 8

$26 per tonne of ore. With the first gold pour occurring on July 23, 2008, the operation is currently working towards commercial production. In 2008, Beaver Brook Antimony Mine Inc. reactivated its underground antimony mine and mill, located 43 kilometres southwest of Glenwood. Operations commenced after a tenyear low price-driven shutdown. Ore from the mine is fed to the 450 tonnes-per-day mill to produce a concentrate grading about 62%. Approximately 100 people are employed at the mine, which has an expected life of seven to ten years. In March 2008, the Iron Ore Company of Canada (IOC) approved a $500 million expansion program for the Labrador City iron ore operation. A further $300 million were approved in August. Phase one of the program, currently underway, will address operating bottlenecks and improve winter performance. The program includes the purchase of new mining equipment, the installation of a new crusher station, grinding mill and a six-kilometre overland conveyor. New locomotives and rail cars will also be purchased to increase railway capacity. This will expand capacity to 22 million tonnes. Phase two of the program will take production to more than 25 million tonnes. During the construction phase, IOC expects the construction workforce to peak at 250 workers over the next three years. Once completed, the expansion will create an additional 200 operational jobs in addition to the 1,550 people currently employed.

The future of mining in the province As part of the Voisey’s Bay Development Agreement, Vale Inco Newfoundland & Labrador Limited (VINL) is to construct a commercial nickel processing plant at Long Harbour. The first option for this plant is based on hydromet technology. Should this not prove feasible, VINL will build a traditional matte plant. The plant capacity will be 50,000 tonnes of finished nickel annually. Associated copper and cobalt products will also be processed.The project was released from environmental assessment on August 26, 2008. Construction will commence in 2009 and the operations are to begin in 2012. VINL will employ the Quadrum Global Supply Chain System for awarding supplier contracts for the new plant. Introduced

Vale’s Voisey’s Bay mill and services complex

to this system, local suppliers will be able to avail of opportunities not just at the new plant, but globally. New Millennium Capital Corporation’s LabMag iron ore project lies in northwestern Labrador and Quebec near the provincial border at Schefferville. The LabMag claims contain direct shipping iron ore resources (DSO) of about 50 to 55% Fe. The project has been registered with federal, Quebec and Newfoundland and Labrador authorities. The later authority has required an environmental impact statement. Phase one of the proposed two-phase project, expected to last three years, will produce about 5.4 million tonnes of DSO from NL deposits and about 2.6 million tonnes from Quebec deposits. Limited to crushing and washing of ore to produce lump and sinter fine ores, all processing will take place in Newfoundland and Labrador. Phase two will seek separate approval from federal and provincial government authorities. The project has a construction phase target date of mid-2009, with a required workforce of 150 people. The operational phase is expected to employ 150. Labrador Iron Mines Holdings Ltd.’s Labrador West is a direct shipping iron ore project near the QuebecNewfoundland border in western Labrador. Reserves are estimated at approximately 92 million tonnes at 50 to 55% Fe. However, these reserve statements are not compliant with NI 43-101 standards.The company anticipates starting the project in 2009 with about 150 people employed during construction and 75 during operations. The environmental registration document for the project outlines an initial four-year phase with possible extensions through the mining of other deposits. The capital cost estimate for the project is about $30 million.

Socioeconomic trends that impact mining Higher commodity prices have enabled existing operations to enjoy increased cash flows and have made new projects viable. This, combined with progressive planning, enabled smaller projects to move into production. A recent agreement between New Millennium Capital Corporation and Tata Steel Global Minerals Holdings Pte Ltd. of Singapore will fund a bankable feasibility study for New Millennium’s direct iron ore shipping project in western

Labrador. This exemplifies how, despite tough economic conditions, it is still possible to move projects forward through progressive agreements. In general,there is increased awareness of environmental and social issues. The province continues to implement the Mining Act,which requires that mining companies have adequate funds to finance the rehabilitation of mining operations. In September 2008,Newfoundland and Labrador and the Innu Nation signed a milestone agreement resolving issues relating to the Innu Rights Agreement, the Lower Churchill Impacts and Benefits Agreement and Innu redress for the Upper Churchill hydroelectric development. Companies operating, or planning to operate, in Innu and Inuit land claim areas continue to work towards establishing and meeting obligations in impacts and benefits agreements.VINL has exceeded the projected level of aboriginal employment at its Voisey’s Bay mine site.Labrador Iron Mines has signed an impacts and benefits agreement with the Innu with respect to their proposed western Labrador project.

Labour and human resources trends Trade and labour shortages are a concern for all operations, like VINL and IOC, which have planned major projects next year. At smaller operations such as Pine Cove, local qualified tradespeople have met the general demand in the construction and operational phases. This is a legacy of the mining and other heavy industries that have historically operated throughout the province. However, for a project such as the commercial nickel refinery that will generate 5,000 to 5,700 person-years of employment over a four-year construction phase, human resources may be a challenge. For the 12 months ended July 1, 2008, Newfoundland and Labrador’s population had increased by 1,436. This 0.3 per cent increase was a result of positive net migration and is the first annual population increase in 16 years for the province. New projects, such as the recently announced Hebron project, are anticipated to generate more employment, which will contribute to continued population growth. High-quality job opportunities in this province are now attracting people from abroad, including expatriate Newfoundland and Labradorians. CIM December 2008 / January 2009 | 47

An eventful year, an optimistic outlook by Mike MacDonald, director, Geological Services Division, Nova Scotia Department of Natural Resources

The Lafarge cement plant at Brookfield, NS

he mining industry in Nova Scotia has experienced a tumultuous year in 2008. The collapse of the housing market in the United States and the ensuing economic crisis, which began in August of 2008, has posed challenges for mineral producers and companies looking to start new mineral developments in the province.

The production story Nova Scotia continues to lead the country in gypsum production, with approximately 80 per cent of the total Canadian production. The growth of synthetic gypsum production from fluidized bed operations, coupled with the collapse of new house construction in the US, has had a negative impact on Nova Scotia gypsum production in 2008. The Federal Gypsum wallboard plant in Point Tupper ceased operation in 2008, due in part to a downturn in North American housing construction. Salt production from the underground mine in Pugwash and the brining operation in Nappan is used mostly for de-icing roads and in the food industry and has not been as adversely 48 | CIM Magazine | Vol. 3, No. 8

affected by the recent economic situation as some other mineral sectors. Coal production from three surface operations in Stellarton and Point Aconi (Pioneer Coal Company) and Florence (3061831 Nova Scotia Limited) was approximately 400,000 to 500,000 tonnes in 2008, with most of the production being used for thermal generation of electricity. Current consumption in Nova Scotia coal-fired generating stations is approximately two million tonnes per annum; therefore markets for locally mined coal remain strong. Substantial reduction in commodity prices for both lead and zinc in late 2008 resulted in numerous global mine closures and posed a significant challenge for the Scotia mine in Gays River. Markets for crushed stone aggregate remain strong in the US despite recent economic conditions. Martin Marietta operates Nova Scotiaâ&#x20AC;&#x2122;s main aggregate export operation at Auldâ&#x20AC;&#x2122;s Cove, with production of approximately four million tonnes in 2007, making it the sixth largest crushed stone quarry in Canada. A recent economic impact study by Gardner Pinfold Ltd. indicates that mining remains a very important economic sector, with direct and indirect employment of 6,340 people and a GDP contribution of $489 million to the provincial economy. In addition to the minerals mentioned above, Nova Scotia continues to produce commodities including limestone, marble, slate, sandstone, peat, silica sand, quartz, clay, shale, sand and gravel. Secondary processing of mineral products includes the manufacture of Portland cement products, ready-mix concrete, brick products, clay products, building stone products (marble, slate, sandstone and granite), de-icing salt and consumable salt products.

Optimism in exploration Mineral exploration levels are estimated to be the highest in 20 years with estimated reported expenditures for 2008 of $13 million. In November 2008, approximately two million acres were under exploration licence and an esti-

Martin Marietta’s Porcupine Mountain quarry at Auld’s Cove lies adjacent to the Canso Causeway (seen right), which was initially built from aggregate quarried here.

A 15-centimetre sample of cut and polished Jurassic age petrified wood from the Scots Bay formation of Nova Scotia. The amethyst core is rimmed by banded agate and jasper.

mated total of 36,000 metres of diamond drilling was conducted in 2008. Exploration continues to focus on gold and base-metal deposits. Development and advanced exploration-stage projects include: the Touquoy surface gold project at Moose River, Atlantic Gold NL; the Donkin undersea coal project, Donkin Coal Alliance; and the expansion of the Miller Creek Gypsum Mine, Fundy Gypsum Limited. Several companies continued to conduct deposit evaluation including: the Jubilee lead-zinc project, Merrex Gold; Acadian Mining’s gold projects including Tangier, Goldenville, Beaverdam, 15 Mile Stream and Forest Hills; Atlantic Gold’s gold project at Cochrane Hill; Silvore Fox P Minerals Corp.’s Coxheath copper-molybdenum project

near Sydney; and Orex Exploration’s Upper Seal Harbour gold project. Perhaps the largest grassroots exploration project is currently being conducted by Minotaur Exploration Ltd. in central Nova Scotia for iron oxide-copper-gold (IOCG) deposits associated with the Cobequid-Chedabucto Fault Zone. Other exploration projects include Avalon Ventures Ltd.’s East Kemptville base and rare metal project in southwestern Nova Scotia, several base metal projects throughout northern Nova Scotia by Capella Resources Ltd., and numerous projects by individual companies and prospectors. A version of this article,originally published by the Nova Scotia Department of Natural Resources, was included in the Mining Matters 2008 conference program. CIM

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Record-setting developments by Les Fyffe, director, New Brunswick Geological Surveys Branch

taken to allay public concerns without unduly restricting land access to the exploration industry.

Photo courtesy of New Brunswick Geological Surveys Branch

Mineral exploration

Bulk sample site in Zone III of the Sisson Brook deposit

xploration and development in the minerals sector continued to proceed at a record pace in New Brunswick in 2008. Exploration companies are expected to spend a total of about $46 million this year searching for minerals in the province, an increase of 37 per cent over last year. The number of claims in good standing peaked at 37,700 in 2008, up over three per cent from the year before. Mineral production reached a new high of $1.57 billion in 2007. As in other regions of Canada, increases in commodity prices over the past year led to a near-record number of mineral claims being staked in New Brunswick. Exploration for uranium in particular has been concentrated in populated areas in the southern part of the province. Addressing concerns raised by landowners over ground staking on private property, the provincial government has decided to introduce a system of map staking. New guidelines have also been prescribed to restrict drilling near watersheds, municipal well fields and residential wells in order to protect water supplies. These measures were 50 | CIM Magazine | Vol. 3, No. 8

Gold: Freewest Resources Canada Inc. and Rockport Mining Corp. reported an updated NI 43-101-compliant mineral resource estimate on the Clarence Stream deposit. Indicated mineral resources are 815,000 tonnes grading 6.85 g/t Au, inferred mineral resources are 660,000 tonnes grading 5.94 g/t Au, and an indicated mineral resource of 114,000 tonnes grading 2.9% Sb amounting to 7,300,000 pounds. Assay results from recent holes on the Central Zone include 5.0 metres of 4.22 g/t Au in hole CS08-271, 12.0 metres of 7.98 g/t Au in hole CS08-272, and 5.0 metres of 17.25 g/t Au in hole CS08-290. Stratabound Minerals Corp. reported a mineral resource estimate on the Elmtree gold property located 20 kilometres northwest of Bathurst. The Elmtree resource consists of 525,000 indicated tonnes grading 2.45 g/t Au (41,000 oz. Au) plus 4,624,000 inferred tonnes at an average grade of 1.37 g/t Au, and 41,000 inferred tonnes containing 201,000 ounces of silver, 7.0 million pounds zinc, and 2.4 million pounds lead. Rockport Mining Corp. is continuing exploration on its Devil Pike Brook gold property in southern New Brunswick. Since it acquired the property in May 2007, 45 diamond drill holes have been completed for a total of 11,571 metres. Assay results include 10.06 metres of 32.26 g/t Au in hole DP07-4, and 7.72 metres of 8.08 g/t Au in hole DP-08-15. Polymetallic minerals: Geodex Minerals Ltd. reported an updated NI 43-101-compliant mineral resource estimate based on 128 drill holes on its Sisson Brook deposit. Measured resources of 18.6 million tonnes grading 0.154% WO3 equivalent, inferred resources of 225.3 million tonnes grading 0.125% WO3 equivalent, and indicated resources of 154.4 million tonnes grading 0.116% WO3 equivalent based on a cutoff grade of 0.025%. Recent assay results include 84.0 metres

of 0.087% WO3 and 0.026% Mo in the Ellipse Zone and 249.0 metres of 0.118% WO3 and 0.038% Mo in the East Flank Zone. Cadillac Ventures Inc. drilled nine drill holes totalling 2,837 metres on the Burnt Hill tungsten deposit. A total of 2,669 samples have been submitted for analysis. Rockport Mining Corp. drilled 16 holes totalling 1,697 metres on its Bald Hill antimony and gold property. Assay results included 4.51 metres of 11.70% Sb in hole BH-08-3, and 5.0 metres of 1.12 g/t Au in hole BH-08-04. Base Metals: SLAM Exploration Ltd. has conducted beneficiation tests on core samples from the Nash Creek deposit in northern New Brunswick that indicate an overall recovery rate of 90.5% for zinc and 81.5% for lead. The test produced a zinc concentrate grading 54.5% Zn, 0.9% Pb and 115 g/t Ag, and a lead concentrate grading 48.51% Pb, 5.88% Zn, and 160 g/t Ag. Puma Exploration reported an NI 43-101-compliant indicated resource of 364,000 tonnes containing about one million ounces of silver,11 million pounds of zinc,five million pounds of lead,and 6,200 ounces of gold, at a cutoff grade of 1% Zn equivalent for the central part of the HachĂŠ Lens on its Nicholas-Denys property.The data for the estimate comprised 5,849 samples from 33 drill holes and 569 samples from 21 channel samples.Since early 2008, another 78 holes have been drilled near the HachĂŠ and Shaft lenses and 10,115 samples have been collected. First Narrows Resources Corp. has completed an NI 43-101 mineral resource estimate on the copper stringer zone of the Chester deposit located in the southwestern part of the Bathurst Mining Camp. Measured and indicated resources total 284,000 tonnes grading 2.78% Cu and 7.3 g/t Ag (2% Cu cutoff ) based on 179 drill holes. An inferred resource of 298,000 tonnes grading 2.51% Cu and 3.1 g/t Ag lies immediately down dip from the measured and indicated resource. Stratabound Minerals Corp. was awarded a $100,000 grant from New Brunswickâ&#x20AC;&#x2122;s new Deposit Evaluation Program to evaluate base metal reserves on the Captain base metal deposit in the Bathurst Mining Camp. Assay results on the first drilling program of 25 holes include 26 metres of 1.2% Cu and 0.05% Co in hole CP-7, and 20 metres of 1.02% Cu and 0.044% Co in hole CP-22. Blue Note Mining Inc. is into the second year of a threeyear advanced exploration program in the Bathurst Mining Camp. The objective is to identify new base metal reserves in the Caribou-Restigouche mines area. The Province of New Brunswick is contributing half of the funding, up to a maximum of $1 million per year.

Mine development At the Caribou-Restigouche mine, Blue Note Mining Inc. achieved commercial production effective January 1, 2008. In August 2008, milling operations averaged 3,005 tonnes per day with zinc recovery of 83.4% and lead recovery of 70.4%. Metal in concentrate production for the month was 5,298,539 pounds of lead, 10,535,766 pounds of zinc and 2,818 kilograms of silver. PotashCorp has begun construction on a new two million tonnes-per-year potash mine near Sussex. New Brunswick Premier Shawn Graham and Natural Resources Minister Donald Arseneault participated in the sod-turning ceremony for the new headframe on March 19, 2008. Adex Mining Inc. has completed 47 drill holes testing the North Zone (tin-indium-zinc-copper) and Fire Tower Zone (tungsten-molybdenum) at the former Mount Pleasant mine in southwestern New Brunswick. The drilling program is part of an independent review to produce an NI 43-101-compliant deposit model and resource estimate for the Mount Pleasant property. Assay results include 198 metres of 0.20% Sn, 154 g/t In, 2.10 wt. % Zn, 0.20 wt. % Cu, 0.08% WO3, and 0.09% MoS2 in hole AM083 from the North Zone; and 132 metres of 0.39% WO3, 0.23% MoS2, and 0.15% Bi in hole AM08-11 from the Fire Tower Zone. CIM

Uranium: Tripple Uranium Resources Inc. completed a tenhole diamond drill program totalling 2,880 metres on its Harvey property, 35 kilometres southwest of Fredericton. Assay results include an upper 2.3 metre intersection of 0.094% U3O8 and a deeper 1.2 metre intersection of 0.24% U3O8. Vale Inco Ltd. has completed geochemical and prospecting surveys in southeastern New Brunswick and is currently drilling some uranium targets. December 2008 / January 2009 | 51

Une période d’expansion sans précédent par André Lavoie, directeur, Communications et Affaires publiques, Association minière du Québec

Installations de la nouvelle mine Goldex (Mines Agnico-Eagle) près de Val-d’Or en Abitibi

a forte hausse des prix des métaux et un climat favorable ont permis à l’industrie minière du Québec de connaître en 2007-2008 sa plus importante période d’expansion depuis plus de vingt ans avec des expéditions de 5,5 milliards de dollars en 2007, des dépenses en exploration prévues de 460 millions de dollars pour 2008 et plusieurs projets de développement et de mise en valeur qui sont en progression. Quatre nouvelles mines ont été inaugurées récemment : la mine de cuivre Fabie de First Metals (mars 2008); la mine d’or Goldex d’Agnico-Eagle près de Val-d’Or (juin 2008); la mine Persévérance d’Xstrata Zinc à Matagami (octobre 2008) et la mine Lac Herbin de la Corporation minière Alexis, aussi près de Val-d’Or (octobre 2008). Plusieurs projets sont aussi en phase de développement avancé : on peut citer notamment le projet d’extension de la mine LaRonde d’Agnico-Eagle en Abitibi (360 M$, exploitation prévue 2011); la mine Lapa d’Agnico-Eagle en Abitibi (95 M$, 2009); le doublement de la production de la mine Raglan 52 | CIM Magazine | Vol. 3, No. 8

d’Xstrata Nickel au Nunavik (1 milliard de dollars, de 2008 à 2013); les Mines Opinaca de Goldcorp à la Baie James (50 M$ en 2008);le projet Osisko de la Corporation minière Osisko (760 M$, d’ici 2011); le projet diamantifère Renard à la Baie James de Stornoway - SOQUEM (plus de 200 M$, étude de pré faisabilité) et le projet de mine de fer du Lac Bloom de la Consolidated Thompson près de Fermont (410 M$, 2009). À ces exemples qui témoignent de l’effervescence de l’industrie minière au Québec peuvent encore s’ajouter les nombreux autres projets d’exploration en cours (comme ceux de Canadian Royalties, Westwood d’Iamgold; Matoush de Ressources Strateco; Coulon des Mines Virginia et Ressources Breakwater) et plusieurs autres ainsi que les 300 millions de dollars d’investissement de la minière IOC au Labrador qui profiteront grandement à ses installations portuaires à Sept-Îles sur la Côte-Nord.

Politiques gouvernementales Cette vitalité observée depuis quelques années est attribuable, certes, au prix des métaux et des minéraux qui a donné un bel essor à l’industrie. Toutefois, il faut mentionner également que les politiques du Gouvernement du Québec viennent aussi en soutien au développement des ressources minérales. Cette situation a été d’ailleurs reconnue par l’Institut Fraser qui a décerné au Québec la cote la plus élevée de son indice d’appréciation des politiques minières gouvernementales en 2008, en plus du 2e rang de l’indice de potentiel minier de son territoire. Pour sa part, l’Association minière du Québec (AMQ) a accueilli favorablement l’injection de nouveaux crédits totalisant 53 millions de dollars sur cinq ans annoncés au printemps 2008 lors de la lecture du Budget. Les mesures ont porté principalement sur la mise en place du Fonds du patrimoine minier, la reconduction du Plan cuivre, la création de l’Institut national des mines pour travailler avec des organi-

smes partenaires dans les régions et des mesures pour supporter le développement de la main-d’œuvre. Le Gouvernement du Québec a aussi indiqué son intention de mettre en place une nouvelle « Stratégie minérale ». Cette démarche est perçue favorablement par l’Association minière du Québec qui entend contribuer à sa mise en œuvre. Lors de la période de consultation publique à cet effet, l’AMQ a proposé plusieurs mesures pour soutenir le développement de cette industrie au Québec qui ont porté notamment sur le renouvellement des réserves; le soutien à l’exploration; l’accessibilité à la ressource; la sécurité des droits d’utilisation des terres; l’assurance d’un régime fiscal compétitif, stable et prévisible; la participation à la valorisation et à la formation de la main-d’œuvre dans le secteur minier; ainsi que la simplification et l’harmonisation du cadre réglementaire.

Défis et enjeux en 2009 La ressource humaine, un défi de taille : la mise en place de nouvelles exploitations conjuguée à de nombreux départs à la retraite génèrent d’importants besoins en maind’œuvre qui constituent un premier défi de taille pour l’industrie. À ce sujet, les mines collaborent grandement avec leurs partenaires et les institutions d’enseignement pour trouver des solutions, comme le développement de chantiers miniers écoles pour permettre aux étudiants de se familiariser avec l’environnement réel de travail sur différents sites d’exploitations minières. Maintenir les objectifs en santé et sécurité : l’arrivée d’une nouvelle main-d’œuvre diversifiée (jeunes, femmes, Autochtones, immigrants, 45 ans et plus et provenant de d’autres secteurs industriels) représente un défi important pour les gestionnaires et les superviseurs qui doivent mobiliser leur personnel afin d’atteindre les objectifs fixés par leur entreprise, particulièrement en matière de santé et de sécurité au travail. À ce chapitre, l’industrie minière du Québec a enregistré une 7e année consécutive d’amélioration en prévention des accidents avec une baisse de 13,5 % du taux de fréquence pour l’ensemble des accidents pour les 7 premiers mois de 2008. Plus globalement, depuis 20 ans (1989-2007), le taux de fréquence pour l’ensemble des accidents dans les mines du Québec (avec indemnité et avec assignation de travail modifiée) a diminué de 62,3 % et se situe à sa valeur la plus faible depuis deux décennies. Environnement et développement durable : les dossiers se multiplient en environnement et développement durable : gaz à effet de serre, aires protégées, prélèvement d’eau, restauration des sites, protection des terres humides, nouvelles réglementations pour le secteur minier, etc. En ce domaine, l’impact de l’exploitation minière sur la vie des communautés et l’acceptabilité sociale des projets sont passés à l’avant-plan des préoccupations des sociétés minières. Par exemple, la Corporation minière Osisko a mis sur pied le Fonds Essor Malartic Osisko, avec le mandat d’investir dans des projets locaux, et qui permettra par exemple

cette année d’offrir de nouveaux ordinateurs à l’école secondaire de cette municipalité. Autre exemple, Xstrata Nickel à sa mine Raglan a distribué en 2007 plus de 32 M$ en redevances aux communautés inuites locales. De plus, une trentaine d’entreprises minières et d’organismes ont constitué le Fonds Restor-Action Nunavik qui a permis de recueillir plus de 6 millions de dollars pour restaurer près d’une vingtaine de sites miniers nordiques. Enfin, un autre exemple de développement durable dans le secteur minier mérite d`être souligné de façon particulière puisqu’il s’agit d’une première canadienne qui peut servir de modèle pour tout le secteur minier au pays. Depuis le mois d’août dernier, la nouvelle mine Goldex des Mines Agnico-Eagle achemine, à l’aide un pipeline de près de 25 kilomètres, les résidus de sa mine vers un ancien parc minier acide abandonné, le site Manitou. Les résidus de Goldex ne génèrent pas d’acide et possèdent un potentiel neutralisant qui aidera à la restauration de l’ancien parc. Ce développement de 48 M$, réalisé en partenariat avec le ministère des Ressources naturelles et de la Faune propriétaire du site, limite aussi de façon considérable la superficie exposée à l’activité minière en utilisant un ancien parc pour recevoir les résidus. L’évolution du marché des métaux demeure liée à la santé de l’économie mondiale : la vitalité de l’industrie minière que l’on observe depuis quelques années au Québec et au Canada demeure conjoncturelle et elle s’appuie grandement sur le prix des métaux et des minéraux. La crise financière américaine et l’onde de choc qu’elle suscite sur l’économie mondiale se reflètent déjà sur les prix des métaux : pendant que l’or retrouve sa position de valeur refuge dans ce contexte d’agitation des marchés, les prix des métaux de base reculent. Au moment d’écrire ces lignes, le premier ministre Jean Charest avait déjà annoncé sa volonté de mettre de l’avant son « Plan Nord », un projet de développement du Nord québécois qui veut accorder une place prépondérante au développement du potentiel des ressources naturelles de cette région au nord du 49e parallèle qui représente 70 % de tout le territoire québécois. L’industrie minière est déjà très active dans les régions de la Baie James et du Nunavik. De multiples projets d’exploration, de mise en valeur et des activités d’extraction ont cours sur ce territoire où l’industrie cherche aussi à entretenir des relations harmonieuses avec les communautés et les autochtones. Dans cet esprit, l ’entente de « La Paix des Braves », signée en 2002 entre le Gouvernement du Québec et le Grand Conseil des Cris, s’avère un avantage indéniable pour favoriser la participation des communautés autochtones aux activités de l’industrie minière dans cette région. L’AMQ, pour sa part, accueille de façon très positive les préoccupations du Gouvernement du Québec pour le développement du Nord québécois : cette région, en effet, présente un potentiel considérable de ressources minérales très diversifiées comme en témoignent les récentes découvertes et exploitations reliées à l’or, au zinc, au nickel et aux diamants. ICM December 2008 / January 2009 | 53

A period of unprecedented expansion Translated from the original in French by André Lavoie, director, communications and public affairs, Quebec Mining Association

Part of the 25-kilometre pipeline that carries Goldex mine’s tailings to an old tailings site.

ith sharp increases in metal prices and a favourable climate, the Quebec mining industry went through its most significant expansion period of the last 20 years, with shipments totalling $5.5 billion in 2007. Exploration expenditures for 2008 are estimated to reach $460 million and several deposit appraisal and mine complex development projects are underway. Four new mines started production recently: First Metals’ Fabie copper mine (March 2008), Agnico-Eagle’s Goldex gold mine near Val-d’Or (June 2008), Xstrata Zinc’s Perseverance mine in Matagami (October 2008) and Alexis Mineral Corporation’s Lac Herbin mine, also near Val-d’Or (October 2008). Notable projects in the advanced development stage include the $360 million expansion of the LaRonde mine (Agnico-Eagle) in the Abitibi region (mining planned for 2011); the $95 million development of Lapa mine (AgnicoEagle), also in the Abitibi region (scheduled for 2009); the 54 | CIM Magazine | Vol. 3, No. 8

$1 billion program to double production at the Raglan mine (Xstrata Nickel) in the Nunavik region (from 2008 to 2013); the $50 million development of the Opinaca mines (Goldcorp) in the James Bay area (2008); the three-year, $760 million Osisko project (Osisko Mining Corporation); the prefeasibility studystage, $200 million Renard diamond project (Stornoway-SOQUEM) in the James Bay area; and Consolidated Thompson’s $410 million Bloom Lake iron ore project near Fermont (2009). While these projects best exemplify Quebec’s mining industry boom, numerous other exploration projects are also significant. Notable are the Canadian Royalties’ projects, IAMGOLD’s Westwood project, Strateco Resources’ Matoush project, Virginia Mines’ and Breakwater Resources’ joint venture Coulon project and many others including the Iron Ore Company of Canada’s $300 million investment in Labrador that will greatly benefit its Sept-Îles port facilities on the North Shore.

Government policies The vitality of the last few years can easily be attributed to the high metal and mineral prices that caused the industry boom. However, it must also be noted that the policies of the Government of Quebec help sustain natural resources development. Recognizing this in 2008, the Fraser Institute awarded Quebec the highest score on its Policy Potential Index and the second rank for its Mineral Potential Index. The Quebec Mining Association (QMA) supported the spring 2008 budget announcement of an injection of $53 million in new credits over five years. The measures focused mainly on the implementation of a “Mining Heritage Fund,” the renewal of the Copper Plan, the creation of a National Mining Institute to work with partner organizations in the outlying regions, and measures to sustain vocational training. The Quebec government also intends to implement a new mineral strategy. The QMA views this very favourably

and intends to participate in its implementation. During public consultations, QMA proposed several measures to sustain the development of Quebec’s mining industry. These included: resource renewal; exploration support; access to resources; security of land use rights; a competitive, stable and predictable taxation regime; the training and development of mining sector workers; and the simplification and harmonization of the regulatory framework.

Challenges and issues for 2009 Human resources: The development of new mines and the retirement of older workers create significant manpower needs, posing a daunting challenge to the mining industry. In this regard, companies are actively collaborating with their partners and educational institutions to develop solutions that allow students to familiarize themselves with the actual work environment at various mines. Health and safety: The new and diversified labour force comprising young people, women, First Nations people, immigrants and middle-aged workers transitioning from other industrial sectors presents a challenge to managers and supervisors who are responsible for achieving targets, especially those concerning occupational heath and safety. In this domain, Quebec’s mining industry has attained a seventh consecutive year of improvement in accident prevention. There was a 13.5 per cent reduction in incident rates (all incidents considered together) in the first seven months of 2008. Globally, from 1989 to 2007, the combined incident rate in Quebec mines (for incidents necessitating compensation and work assignment modification) fell by 62.3 per cent and is now at the lowest level in two decades. Environment and sustainable development: Cases concerning the environment and sustainable development are quickly piling up. Greenhouse gases, protected areas, water use, site rehabilitation, wetland protection, new regulations for the mining sector, etc. are becoming focal points. The impact of mining activities on community life and the social acceptability of projects are now forefront issues for mining companies. Osisko Mining Corporation has set up the Fonds Essor Malartic Osisko, a sustainable development fund mandated to invest in local projects. This year, the fund will buy new computers for the local high school. At its Raglan mine, Xstrata Nickel distributed over $32 million in royalties to the local Inuit communities. About 30 mining companies and organizations have created the Fonds Restor-Action Nunavik, which raised more than $6 million to rehabilitate some 20 northern mine sites. One example of sustainable development in the mining sector deserves to be signalled out, as it constitutes a Canadian first that can become a model for the industry. Since last August, the new Goldex mine (Agnico-Eagle) has been piping its tailings over 25 kilometres to the abandoned Manitou acid-generating mine tailings site.The non-acid-generating Goldex tailings, with their neutralizing potential, will help rehabilitate the site. This $48 million development, car-

ried out in partnership with the ministère des Ressources naturelles et de la Faune who owns the site, also considerably limits Goldex’s footprint. Metal markets and the world economy: The vitality of the mining industry observed over the past few years in Quebec and across Canada is conjectural, in that it is based on the metals and mineral prices. Metal prices are already feeling the shockwaves of the American financial crisis. While gold once regains its position as a hedge against inflation in volatile markets, base metal prices decline. At the time of writing this article, Premier Jean Charest had announced his desire to push the “Plan Nord” to develop the natural resources potential of the region north of the 49th parallel, a vast area representing 70 per cent of Quebec’s territory. The mining industry is already quite active in the James Bay and Nunavik regions with many ongoing mining, exploration and development projects.The industry is also entering harmonious relationships with local communities and First Nations people. The 2002 “Paix des Braves” agreement between the Government of Quebec and the Grand Council of the Cree helps foster the participation of First Nations peoples in the region’s mining activities. The QMA is heartened by the government’s interest in the development of northern Quebec, a region whose considerable potential in diverse resources is evident from recent gold, zinc, nickel and diamond discoveries and mines. CIM

THIS COULD BE THE START OF

SOMETHING BIG

December 2008 / January 2009 | 55

Leading Canada in exploration by the staff of the Ontario Ministry of Northern Development and Mines

Core racks at the Rainy River property near Kenora, Ontario

ineral exploration and development did very well through the first half of 2008 in Ontario at all stages of the mining cycle. The recent decline of most metal prices has negatively impacted exploration and production at some of the base metal mines. However, claim-staking is still at record levels and work continues on most of the larger exploration programs. Ontario is among the top ten jurisdictions for exploration spending worldwide. Much of this is attributable to the high quality of infrastructure, the diverse and unexplored geology, accessible and reliable geoscience information, a stable regulatory environment and favourable taxation policies, including a permanent five per cent flow-through share program for exploration.

Healthy levels of spending Ontario is expected to lead all Canadian provinces and territories in exploration expenditures in 2008 with over $600 million in spending, up from $502 million in 2007. Most of the yearly increase is attributable to more spending at the advanced exploration phase as development continues on 56 | CIM Magazine | Vol. 3, No. 8

many of the larger nickel-copper projects and gold mines. Spending by junior companies now accounts for half of exploration expenditures. Gold remains the primary focus of exploration because of Ontario’s potential for new discoveries and gold prices remaining buoyant throughout the economic turmoil. Exploration for base metals increased dramatically in 2008 as a result of work at nickel-copper development projects in the Sudbury area, such as Xstrata’s Nickel Rim project and Vale Inco’s Totten project. Ontario reached a record 367,000 active claim units in October 2008, over double the number at the turn of the century. Claim staking was as active in new locales, such as the McFaulds Lake area, as it was in older areas such as the Sudbury mining camp.Thunder Bay led all mining divisions in 2007 with almost 84,000 active claim units, followed by Timmins at 69,000. The value of assessment work should exceed $100 million in 2008, up from $85 million in 2007. Ontario retained its national lead in the value of nonfuel mineral production, totting up a record $10.7 billion in 2007, with nickel alone accounting for $4.6 billion. Estimates for

2007 indicate that Ontario’s total of mineral production values were $8.2 billion for metals and $2.5 billion for nonmetals. The most significant mining event during 2008 was the commencement of production at De Beers Canada’s Victor mine in the James Bay Lowland area. This $1 billion mine continues to attract attention from the exploration community, and companies exploring in the area are taking advantage of the infrastructure developed during construction of the mine. The mine is expected to contribute $6.7 billion to the Ontario economy. Diamond exploration expenditures reached $29 million in 2007, up significantly from $5 million a decade ago.

Exploration highlights Gold: Gold is expected to remain the primary metal of interest. Exploration climbed from $161 million in 2006 to $300 million in 2007. Exploration continues in traditional mining camps and some new areas such as Rainy River’s Rainy River property near Kenora and Lake Shore Gold’s Timmins West property in northeastern Ontario. Past-producing gold mines in traditional camps such as Red Lake, Timmins and Kirkland Lake are attracting significant investment as companies explore and re-evaluate the potential of these areas. In the Red Lake area, Premier Gold Mines spent over $5 million during the first half of 2008 on their Bonanza-Rahill gold property. In the Kirkland Lake area, Northgate drilled 34,400 metres at their Young Davidson gold project.

Rainy River Resources Ltd. has raised over $40 million to fund an aggressive exploration program on its Rainy River property. Since this property was acquired three years ago, drilling has located six gold trends. Approximately 75 per cent of the drilling has been dedicated to delineating the 17/ODM gold zone, at 30-metre centres, for a strike length of 800 metres and down to a vertical depth of 350 metres. The indicated resource estimate for the 17/ODM zone, at 0.5 g/t (gold block cutoff ), is 1.39 million oz contained Au and 2.89 million oz contained Ag. An additional 2.23 million oz contained Au and 5.11 million oz contained Ag are inferred. Lake Shore Gold Corp. has confirmed the presence of a major gold deposit west of the Mattagami fault in Timmins. After five years of concerted diamond drilling, Lake Shore has defined a gold reserve estimate of 3.4 million tonnes of 7.59 g/t Au at their Timmins West project in Bristol Township. Shaft sinking is underway to extract a bulk sample. Lake Shore has acquired the mill from the Bell Creek mine (1,500 tonne per day capacity) to process the bulk sample. Kodiak Exploration Limited uncovered a large gold-bearing vein structure, the Golden Mile, on its Hercules property, northeast of Beardmore. Stripping has traced the zone along a northwest strike for over two kilometres where channel sampling cut 11.6 metres grading 32.96 g/t Au. Key intersections from the current drilling program returned 358.6 g/t Au over 3.6 metres and 20.8 g/t Au over 4.1 metres.

December 2008 / January 2009 | 57

More than 50,000 metres of drilling in 2008 extended the zone deeper and northward. St Andrew Goldfields Ltd., in an effort to re-open the Holloway-Holt complex, completed 2,273 metres of definition drilling and 841 metres of development at the Holloway mine, and 1,082 metres of definition drilling and 1,082 metres of development at the Holt mine in 2007. The mill processed 76,410 tonnes of development ore at a head grade of 3.9 g/t Au, to produce 7,953 ounces of gold. Northgate Minerals Corporation continues exploring at its Young-Davidson property near Matachewan. Diamond drilling has confirmed a near-continuous gold system of overlapping lenses as well as new mineralization. A recent preliminary assessment estimates average annual production of 158,000 ounces of gold at a net cash cost of $405 per ounce. Northgate projects that the property will be in production in late 2010, with a 12-year mine life. Apollo Gold Corp. completed 39 surface holes and 22 underground holes totalling 8,700 metres drilled in 2007 at its Black Fox property near Matheson. Apollo has drilled several deep exploration holes, which, as anticipated, hit the Destor-Porcupine vein structure. The assays include hole 07BF457, assaying at 34.01 g/t Au and indicate potential for additional mineralization at depth.

58 | CIM Magazine | Vol. 3, No. 8

Base metals: Driven largely by activity in the Sudbury area, exploration for base metals rose from $34 million in 2003 to $123 million in 2007. FNX Mining continues to conduct extensive exploration around their Sudbury area nickel-copper-platinum group metal properties, which include two producing mines. In early 2008, production commenced at the Podolsky mine in the northeastern part of the Sudbury Igneous Complex. All production to date at Podolsky is from the high-grade nickel-copper-platinum group metal-gold lower portions of the 2000 deposit. The planned production rate of 1,200 tonnes per day should be reached by the end of this year. Companhia Vale do Rio Doce, owners of Vale Inco, will spend an estimated $11 billion worldwide in 2008, making it the largest annual investment program ever undertaken by any mining company in the world. Sudbury area projects are playing an important role, as $68 million will be spent by Vale Inco next year on the Totten and other projects. The company also increased their spending on exploration and strategic studies in the Sudbury area during 2008. Xstrata Nickel recently announced its intention to close two mines in the Sudbury area and spend US$455 million over the next two years to develop the new Fraser Morgan

mine site. A 2.5-kilometre underground ramp will link the existing Fraser mine with the new Fraser Morgan mine. By the end of 2008, production at Fraser Morgan is expected to be 620,000 tonnes of ore annually.The Nickel Rim project is also an important part of the future, with an inferred resource of 13.4 million tonnes of ore of mostly nickel, copper, platinum and palladium. The $850 million project should begin annual production of 1.25 million tonnes of ore in 2010. Canadian Arrow Mines Ltd. initiated an aggressive exploration program on the Kenbridge nickel project in the Kenora area. Recent drilling has increased the measured and indicated resource by 87 per cent, to 97.7 million pounds of contained nickel. In preparation for mining, environmental and engineering studies have been initiated and consultations are underway. Anticipating underground operations, Canadian Arrow has purchased a headframe and hoisting equipment. At the Double Eagle project near McFaulds Lake, Noront Resources Inc. reported a diamond-drill intersection of 5.9% Ni, 3.1% Cu, 2.87 g/t Pt, 9.78 g/t Pd, 0.61 g/t Au and 8.5 g/t Ag over a drill core length of 68.3 metres. Massive sulphide mineralization is hosted by coarse-grained peridotite. The project is located about 500 kilometres northwest of Timmins. News of the discovery prompted staking of hundreds of new claims by many junior mining companies who are conducting airborne geophysical surveys and diamond-drilling programs in the area. Tribute Minerals Inc. is working towards obtaining an advanced exploration permit to perform underground bulk sampling and definition drilling on its Arrow Zone polymetallic deposit at the Confederation Lake property in the Red Lake area. NI 43-101-compliant estimated resources are 2.07 million tonnes of 5.92% Zn, 0.75% Cu, 0.58 g/t Au and 21.1 g/t Ag. Appreciable indium and gallium grades of the deposit may enhance the projectâ&#x20AC;&#x2122;s overall economics. Richview Resources Inc. conducted a summer work program on its Thierry mine copper-nickel-platinum group metal property, west of Pickle Lake. Drilling confirmed the presence of the main Thierry orebody below 3,000 feet and encountered the richest and most significant intercept to date. The mine site has been refurbished and new buildings have been constructed.

The project has a projected annual production rate of over 200,000 ounces of platinum group metals and gold with a 14-year mine life. Pele Mountain Resources will continue drilling on their Eco Ridge uranium project in the Elliot Lake area. However, lower uranium prices have forced the postponement of the prefeasibility study and permitting. The Eco Ridge property contains NI 43-101-compliant resources of 6.4 million pounds of indicated resource and a 36.1 million pound inferred resource. An earlier study indicated that a $195 million mine could produce 826,000 pounds of U3O8 per year over an 18-year mine life at a cost of US$55.51 per pound.

Looking forward Ontario is committed to sustaining global confidence in its well-earned reputation as a leading jurisdiction for exploration and is working to address challenges. The Ontario Geological Survey provides extensive and objective information on Ontarioâ&#x20AC;&#x2122;s geology and its world-class mineral resources. Mapping and data collection programs are being undertaken throughout the province to support the further expansion of an already thriving resources industry. CIM

Other metals: Marathon PGM Corporation completed their 2008 drill program at the Marathon platinum group element copper project, ten kilometres north of Marathon. A definitive feasibility study, currently underway, is scheduled for completion by the end of 2008. The current measured, indicated and inferred resources estimate is 3.41 million ounces of platinum group elements and gold, 5.39 million ounces of silver and 595 million pounds of copper.

December 2008 / January 2009 | 59

Boosting economies, generating knowledge by Dave Prouse and Monique Lavergne, Manitoba Science, Technology, Energy and Mines, Manitoba Geological Survey

Photo courtesy of VMS Ventures Inc.

Manitobaâ&#x20AC;&#x2122;s eight operating mines directly employ 3,500 people, mostly northerners. Another 14,000 people are employed indirectly in spinoff businesses. Last year, metal miners invested $543 million in capital expenditures. It is expected that mining could generate over 1,500 new jobs within the next five years in Manitoba. Numerous education and on-thejob training initiatives are currently being developed and delivered by colleges and mining companies.

Base metals

Drill operating at VMS Ventures Reed Lake property

he dip in metal prices in 2008 had no significant impact on exploration spending in Manitoba. Exploration and deposit appraisal spending intentions are estimated at $135.8 million, significantly higher than last yearâ&#x20AC;&#x2122;s figure of $102.6 million. By boosting local economies, generating geoscience knowledge and identifying new deposits with mineable potential, exploration drives forward an industry that makes significant contributions to Manitobaâ&#x20AC;&#x2122;s economy. In 2007, mineral production was valued at $2.5 billion for metals and industrials, nearly tripling since 2003. 60 | CIM Magazine | Vol. 3, No. 8

Crowflight Minerals continued surface and underground development at the Bucko Lake nickel mine near Wabowden. Having received its Environmental Act Licence, the company can commence production. Awaiting federal approval to use Bucko Lake for tailings disposal, Crowflight is installing interim land-based tailings storage facilities. Full production will be achieved in early 2009.The base-case scenario calls for production of 1,000 tonnes per day to produce 11.1 million pounds of nickel per year. Crowflight announced that drilling at the past-producing Manibridge mine located south of Wabowden resulted in the discovery of two nickel zones located within 400 metres of past production. One of the zones returned an intersection of 16.75 metres of 1.38% Ni.The project is a joint venture with Pure Nickel Inc. Vale Inco plans to invest about $120 million in automation at its nickel refinery in Thompson. Robotic technology incorporating automated cranes and electric transfer cars will replace the manual handling of heavy nickel cathode. The project is expected to be completed by 2011. Exploration at the Thompson mines has demonstrated significant open pit mining potential for two new deposits,

the Thompson 1-C and 1-D Surface zones. Drilling projects are also returning encouraging results at depth at both the Thompson and Birchtree mines. HudBay Minerals continues to advance the Lalor Lake zinc discovery near Snow Lake. As of August, NI 43-101compliant indicated resources were 3.4 million tonnes of 8.82% Zn, 0.71% Cu plus significant silver and gold values. Inferred resources stand at 13.2 million tonnes of 8.19% Zn and 0.70% Cu. Drilling continues and a feasibility study is expected to commence by the end of 2008. Independent Nickel Corp. continues drilling to upgrade the reserve base of the past-producing Lynn Lake nickel mine. A November 2007 prefeasibility study demonstrated positive economics with a cash cost nickel at $4.90 per pound of refined at a rate of 3,000 tonnes per day.The company has been drilling a new zone near a shared boundary line with Western Areas NL. In mid-August, Victory Nickel made an unsolicited takeover bid for Independent Nickel. Independent’s board recommended shareholders accept the offer. Western Areas NL is conducting nickel exploration on the EL property in Lynn Lake. Drilling at the Melville prospect (near a shared boundary with Independent Nickel) encountered a significant new nickel-copper zone that appears to lie within Independent’s claim boundary. Western Areas intends 4 to further test the zone to see if it extends onto their ground.

EXPANDING OPERATIONS.

In October 2007, VMS Ventures discovered a significant copper-zinc mineralization zone at their Reed Lake property. The company has since drilled over 60 holes, with many returning wide intervals of significant copper and zinc grades. Assays from drillhole RD-08-51 returned 97.21 metres of 2.08% Cu and 0.07% Zn, including a 10.7-metre intersection of 6.86% Cu and 0.23% Zn. Some intersections also contain significant gold and silver credits. Drilling is ongoing. A winter drill program by Victory Nickel at the Minago deposit north of Grand Rapids found continuity of nickel mineralization at depth beneath the open pit resource. Significant results included 47.8 metres of 1.30% Ni within a 623.5-metre intercept of 0.36% Ni. A feasibility study for the open pit portion is due for completion in the fourth quarter of 2008. Measured and indicated resources are 49.1 million tonnes of 0.516% Ni. Pure Nickel Inc. completed a versatile time-domain electromagnetic (VTEM) airborne survey and a 15-hole drill program at their William Lake property north of Grand Rapids. Drilling was completed on five zones and a significant mineralized zone was discovered. The most significant hole on the new zone intersected a sulphidic iron formation containing massive sulphide intervals, which averaged 0.91% Ni over 12.15 metres.

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December 2008 / January 2009 | 61

Photo courtesy of Hudbay Minerals Inc.

Photo courtesy of Crowflight Minerals Inc.

Murgor Resources drilled at their Hudvam and Wim copper-zinc projects, which are under option from HudBay Minerals. At the Wim deposit near Snow Lake, drilling upgraded the resource estimate by 1.0 to 2.5 million tonnes. In 2007, NI 43-101-compliant inferred resources at Wim were 2.06 million tonnes of 1.92% Cu and 1.65 g/t Au. At the Hudvam property near Flin Flon, a new NI 43-101 estimate increased gold resource by 40 per cent and boosted indicated resources to 854,076 tonnes (2.0% Cu equivalent cutoff ). Halo Resources has actively explored the Sherridon area property northeast of Flin Flon. The project contains a combination of mature and grassroots base-metal and gold prospects including four historic copper-zinc deposits — Cold Lake, Bob Lake, Lost Lake and Jungle Lake. Total NI 43-101-compliant indicated resources at all four deposits are 3.1 million tonnes of 1.00% Cu, 0.91% Zn plus precious-metal credits. This does not include results of recent drilling at Bob Lake. Rockcliff Resources completed geophysics and drill programs on several Snow Lake area properties. The portfolio contains some previously discovered deposits under option from Hudbay Minerals. Initial drilling at the Kof and Sylvia zones intersected multiple sulphide zones containing significant copper and zinc values. An initial 27-hole drill program at the Rail property identified the source of several untested geophysical targets and extended the strike and depth of copper-rich mineralization at the historic Rail Lake deposit. Phase two drilling commenced in July. At the McClarty Lake project southwest of Snow Lake, Troymet Exploration identified two laterally continuous zones of massive sulphides. A lower zone hole intersected 15.3 metres of 3.46% Zn and is locally enriched in silver and gold. Geophysical surveys sug-

Top: The Bucko Lake nickel mine near Wabowden is poised to reach full commercial production in early 2009; Middle: In-fill drilling at HudBay Minerals’ Lalor Lake project near Snow Lake; Bottom: San Gold Corporation’s Rice Lake mine and mill at Bissett. 62 | CIM Magazine | Vol. 3, No. 8

gest the presence of additional sulphide lenses associated with the alteration system that hosts known mineralized zones. Southeast of Flin Flon, Copper Reef Mining completed an airborne VTEM survey and drilling at their Mink Narrows property. Drilling was highlighted by a 10.21metre intersection of 3.66% Cu. Known mineralization has been extended and it has been confirmed that the upper east portion of the deposit is actually a separate lens that remains open at depth and to the east. Wildcat Exploration completed airborne geophysical and ground induced polarization (IP) surveys at Reed Lake. The property could host volcanogenic massive sulphide deposits and contains a layered mafic-ultramafic intrusive complex, which is prospective for platinum group metals. Geological mapping and ground truthing of geophysical targets were completed in the summer. Mustang Minerals Corp. released results of a positive prefeasibility study on the Maskwa nickel deposit east of Lac du Bonnet. The study incorporated proven and probable open pit reserves totalling 7.11 million tonnes grading 0.64% Ni and 0.13% Cu. The initial capital cost is estimated at $123 million. A full feasibility study is planned. Mustang has another nickel-copper open pit resource 35 kilometres away, at the M2 zone on the Mayville property. At the Ore Fault and Bird River properties east of Lac du Bonnet, Marathon PGM Corporation intersected multiple lenses of massive sulphide,including 15 metres grading 1.71% Ni at Ore Fault and 6.55 metres grading 1.65% Ni at Page. The Ore Fault North zone consists of an upper zone of nickel-copper mineralization and lower zinc-copper-silver zone.

Precious metals Carlisle Goldfields began second phase drilling of 20 to 25 holes at the past-producing MacLellan mine in Lynn Lake in February. In May, NI 43-101-compliant resource measured and indicated resources stood at 932,000 tonnes grading 6.81 g/t Au and 11.4 g/t Ag. If sufficient resources can be defined, Carlisle plans to de-water the mine and conduct a feasibility study. Garson Gold continued drilling to define additional resources at the New Britannia mine in Snow Lake. Efforts focused on the main mine and the No. 3 zone to its west. Garson is examining the feasibility of reopening the mine using additional ore from the No. 3 zone. Updated NI 43-101-compliant indicated resources are 394,000 tonnes of 6.72 g/t Au. A further 575,000 tonnes are inferred. Scoping is underway to determine capital costs of reopening the mine and mill. At the Reed Lake project southwest of Snow Lake, Tribune Uranium Corp.â&#x20AC;&#x2122;s

13-hole drill program identified multiple gold-bearing mineralization sections, with the best assay returning 5.79 metres of 12.84 g/t Au. In January 2008, Rolling Rock Resourcesâ&#x20AC;&#x2122; Monument Bay project reported inferred resource of 4.9 million tonnes of 6.01 g/t Au, an increase of 35 per cent in contained ounces.Ongoing scoping will help define mining economics and evaluate the potential of commencing production. Rolling Rock also reported encouraging drilling results at the Domain gold project near Oxford House. San Gold Corp. discovered multiple gold-bearing zones about 1.5 kilometres northeast of the Rice Lake mine. Here, in the Hinge zone,drilling has to date discovered at least four subparallel veins and numerous uncorrelated breccia zones within 100 to 300 metres of surface. A drillhole from Hinge #4 zone returned 6.3 metres of 85.1 g/t Au. Deep underground drilling below the working levels at Rice Lake also discovered a highgrade zone and extended the downdip extension of the highgrade â&#x20AC;&#x153;96â&#x20AC;?vein. An early hole returned 2.7 metres of 31.8 g/t Au. In the Rice Lake Belt, Wildcat Exploration drilled at the Poundmaker and Jeep properties and conducted airborne geophysical and ground IP surveys at Jeep to investigate potential mineralized shear zones. Summer sampling and geological mapping programs were also conducted at the Jeep, Mable and Garner Lake properties. Harvest Gold conducted a nine-hole drill program at the Lesavage North project east of Bissett. The company tested mineralized zones encountered in previous drill programs as well as new geochemical and geophysical anomalies. Assay results are awaited. CIM

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December 2008 / January 2009 | 63

Not just a uranium and potash giant by the staff of the Saskatchewan Ministry of Energy and Resources

Photo courtesy of Potash Corp.

potash, aggregate, silica sand, salt and sodium sulphate, and minor bentonite and structural clay. Mineral exploration spending in 2008 is estimated to be a record $360 million, which will be spent on over 250 projects distributed throughout the province (see map).

Uranium

The construction of a new raw ore storage bin at PotashCorp’s Cory operations.

askatchewan’s economic momentum is led by the exploration and development of its abundant natural resources. Non-renewable resources accounted for 14.9 per cent of the provincial GDP in 2007. Saskatchewan is Canada’s second largest oil producer and third largest gas and coal producer. Combined oil and gas sales exceeded $9.7 billion in fiscal year 2007-08, with industrial and metallic mineral sales accounting for about $4.5 billion. Saskatchewan is also Canada’s third largest mineral producer and the largest uranium and potash producer in the world. Metallic mineral production in 2007 included uranium and gold, while industrial mineral production included 64 | CIM Magazine | Vol. 3, No. 8

In 2007, uranium was produced from the McArthur River, Eagle Point and McClean Lake mines. Total production was 24.6 million pounds U3O8. In the Athabasca Basin, the world’s premier high-grade uranium exploration district, it is estimated that about $195.4 million will be spent on exploration in 2008, down slightly from 2007. Major programs include those of producers Cameco Corporation and AREVA Resources Canada Inc., and mid-sized junior companies UEX Corporation and Denison Mines Corp. The most significant discovery was that of the Roughrider zone at Hathor Exploration Ltd.’s Midwest Northeast project.

Gold Gold exploration spending is expected to reach almost $17 million in 2008. Exploration has focused almost exclusively on the Seabee mine area of the Glennie Domain, the La Ronge Domain, and the Goldfields area near Uranium City, all on the Precambrian Shield. GLR Resources have continued working towards production at the Box and Athona deposits in the

Goldfields, with further drilling and reserve/resource estimation in the past year. Golden Band Resources, on track for production by late 2009 at several of its La Ronge Domain properties, has undertaken underground exploration of the Bingo deposit. Claude Resources’ Seabee mining operation is Saskatchewan’s only gold producer, with 44,322 ounces produced in 2007 and 19,953 ounces in the first half of 2008. Claude continues exploring the Seabee area, including underground exploration at Seabee and surface drilling and resource definition at the satellite Santoy 8/8E deposit.

Base metals Despite weakening base metal prices during 2008, mineral exploration expenditures are expected to approach last year’s level of around $10 million. Most of the associated exploration targets volcanogenic massive sulphide deposits in the Flin Flon Domain, sediment-hosted sulphide occurrences in the Wollaston and Kisseynew domains, and intrusion-hosted nickel-copper-platinum group element occurrences near the historic Rottenstone mine. West of Flin Flon, Exploration Syndicate Inc. made a significant copper-zinc discovery, the Zang Zone, on its McKenzie Lake project in the Suggi Lake area. Mantis Mineral Corp. has entered an agreement with Uravan Minerals Inc. to acquire the right to obtain up to 60 per cent interest in eight Rottenstone Domain dispositions.

Diamonds Saskatchewan boasts the world’s largest kimberlite field in the Fort à la Corne area, with several kimberlites exceeding 200 hectares in surface area. Diamond exploration expenditures are forecast to exceed $95 million in 2008, up from $76.6 million last year. The bulk of the 2008 expenditures will be at Shore Gold Inc.’s Star diamond project and the Fort à la Corne Joint Venture’s Orion Cluster project, both in the Fort à la Corne area. Shore’s Star Kimberlite project has NI 43-101-compliant indicated resources of 122.7 million tonnes at 13.5 cpht and inferred resources of 30.3 million tonnes at 13.1 cpht. The Fort à la Corne joint venture is a 60:40 partnership between Kensington Resources Ltd., a wholly owned subsidiary of Shore, and Newmont Mining Corporation of Canada Ltd., respectively. It has budgeted $86.8 million for accelerated exploration and evaluation of the Orion kimberlite cluster.

Mineral resource map of Saskatchewan (Map compiled by Bill Slimmon)

tures do not include substantial coal exploration, which began after April 2008, when the Ministry of Energy and Resources completed its annual survey of exploration expenditures.

Industrial minerals It is estimated that over $40 million will be spent on exploring for industrial minerals in 2008. Although much of this will be potash-focused, there will also be some exploration for kaolin and rare earth elements. The estimated expendiDecember 2008 / January 2009 | 65

The potash capital of the world

Photo courtesy of Goldsource Mines Inc.

by Robert Carey, president and CEO, RJC Industrial Design Ltd.

Drill core from Goldsource Mines Inc.’s sub-bitumous coal intercept at the Border property in the Hudson Bay area.

In 2007, Saskatchewan’s potash industry broke all production and sales records. The $3.06 billion in potash sales accounted for about 67 per cent of Saskatchewan’s mineral sales and one-third of global production. It is estimated that over $40 million will be spent on potash exploration in 2008. Saskatchewan’s potash producers will also invest $8.5 billion between 2005 and 2020 to increase production capacities by 87 per cent. For the full story, see inset story. Great Western Minerals Group Ltd. continued evaluating and developing its Hoidas Lake rare earth element deposit, 60 kilometres northeast of Uranium City.Their 2008 winter drilling program totalled 6,836 metres in 32 holes. Great Western also recently acquired Less Common Metals Ltd., a leading rare earth–based alloys manufacturer and supplier. One of Less Common’s key clients produces permanent magnet motors used in Toyota’s hybrid vehicles. About 20 kilograms of rare earth oxide ore will be required for each hybrid car, and Toyota forecasts producing 100 per cent hybrid vehicles by 2020. In August 2008,Whitemud Resources Inc. opened its newly constructed meta-kaolin (a new-generation cement substitute) plant and quarry at the Gollier Creek deposit near Wood Mountain.The company now has proven reserves of 52.9 million tonnes of ore and measured and indicated resources of 131.1 and 28.2 million tonnes, respectively. In April 2008, Goldsource Mines Inc. reported discovering coal while drilling for kimberlite on its Border property claim block in east central Saskatchewan. A 22-metre intersection of Cretaceous sub-bituminous grade coal touched off a staking rush in the Hudson Bay area, that quickly extended westward across the province. Since the initial discovery, the Ministry of Energy and Resources has received over 7,000 coal permit applications covering approximately 5.4 million hectares. CIM 66 | CIM Magazine | Vol. 3, No. 8

Saskatoon-based PotashCorp was ranked second on Saskatchewan Business Magazine’s list of the province’s top 100 companies. Canpotex, the world’s largest exporter of potash, ranked number five and Mosaic Potash ranked sixteenth. With an investment of almost $5 billion, PotashCorp is currently upgrading its existing Saskatchewan facilities, increasing annual capacity to 18 million tonnes of potassium chloride by the end of 2012. In 2008, 1.5 million tonne capacity was restored at Lanigan. Capacity is expected to further increase by 2.7 million tonnes through de-bottlenecking and expansion at the Allan, Cory and Rocanville operations. Meanwhile, work continues on projects at Rocanville, Cory and Patience Lake.The Cory expansion includes an underground upgrade, a new raw ore storage bin, a new wet and dry mill and new storage and loadout facilities. Potash rose to a record spot price of US $862.50 per tonne in September, up from $802.50 in August, and stabilized at $865 into mid-October. With rising prices, increasing demand and predicted global shortages, there has been a boom of new junior explorers. These include Athabasca Potash Inc., Anglo Potash (acquired by BHP Billiton), Potash One Inc., Raytech Metals,Western Potash Corp. and Potash North. Athabasca Potash is actively exploring its wholly-owned Burr project. With 2D and 3D seismic surveys completed, resource estimates were positive at 14 test holes.The company holds 23 exploration permits on about 1,700,000 acres in Saskatchewan. Purchasing Anglo Potash Ltd. for $284 million in July 2008, BHP Billiton placed a value of about $1.136 billion on a project, which may come into production in 2014. BHP is currently working on pre-feasibility studies on three properties east of Saskatoon: Jansen, Young and Boulder. Potash One’s wholly owned 97,240-acre Legacy permit, located in the world’s richest potash basin, makes it one of the very few public companies with current potash permits, NI 43-101-compliant resources and active work programs in the Saskatchewan Potash Basin. Potash One also controls three exploration permits contiguous to Legacy covering about 230,000 acres. Raytec Metals is a well-financed, diversified explorer with over 180,000 acres of potash permits in Saskatchewan. Its multiple exploration permit applications include the 145,000-acre Spar property in south-central Saskatchewan. Throughout November 2008, 2D seismic work will be ongoing at Spar, with results expected in early December. This will further lead to a phase one resource expansion drill program. Western Potash, a junior active in western Canada, has three potash exploration permits in southwest Manitoba, along the Saskatchewan border.The property covers 1,000 square kilometres and adjoins two deposits estimated to host over a billion tonnes of potash. In addition, the company also has 50,000 hectares of Saskatchewan exploration permits and has applied for 150,000 additional hectares in Manitoba. Potash North is focused exclusively on exploring, evaluating and developing the Potash North project comprising two subsurface potash permits totalling 185,000 acres in the Saskatchewan Potash Basin, 45 kilometres north of PotashCorp’s Rocanville facility. CIM

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Driven by diamonds, propelled by potash

Photo courtesy of Alberta Geological Survey

by D. Roy Eccles, geologist, Alberta Geological Survey

known district of significantly diamond-bearing kimberlites in Canada after Lac de Gras in the Northwest Territories and Fort Ă la Corne in Saskatchewan. New 2008 kimberlite discoveries bring the total number of known occurrences in the Buffalo Head Hills field to 41, of which 28 are diamondiferous. During two separate 2008 drilling programs, Grizzly Diamonds Ltd. drilled a total of 12 drill holes totalling 2,270 metres in the Buffalo Head Hills kimberlite field. The drilling discovered three previously unknown kimberlite bodies (BE-01, BE-02 and BE-03), which represent the first kimberlites discovered in Alberta since 2003. Positive caustic fusion diamond results from the 2008 winter drill program yielded 54 diamonds greater than 0.075 mm in size. From a 56.6-kilogram sample of the BE-02 ore body, 26 diamonds greater than 0.106 mm in size were recovered. This finding Aggregate bulk sampling from the K6 kimberlite, Buffalo Head Hills field in north-central Alberta. spurred a larger campaign by Grizzly Diamonds, and a fall 2008 etter known in the resources industry for its thriving oil drill program collected an additional 563 kilograms of sands, Alberta is also coming into its own as a province kimberlite material from BE-02. Grizzly Diamonds currently that attracts intrepid exploration companies. The num- holds about three million acres of diamond properties bers, over the past year, serve to bear this out. As of the end of throughout Alberta. August 2008, 9.9 million hectares had been staked for indusIn 2007, Diamondex Resources Ltd. and Shore Gold Inc. trial and metallic minerals within Alberta. Approximately 3.1 purchased the Buffalo Head Hills diamond project from million hectares of new 2008 staking occurred along the Stornoway Diamond Corporation (formerly Ashton Mining Alberta-Saskatchewan border in response to the accelerating of Canada Inc.), who had previously defined 38 kimberlite global potash market. In addition, a resurgence of diamond bodies between 1997 and 2007 by spending approxiactivity in the Buffalo Head Hills field has resulted in the dis- mately $30 million. From January to March 2008, covery of new diamondiferous kimberlites and the emer- Diamondex drill tested the K14, K252 and K6 kimberlite gence of new operators in the area. bodies with 41 drill holes totalling 6,818 metres, to allow for the identification of different kimberlite phases and Digging for diamonds micro diamond content. The Buffalo Head Hills kimberlite field, which is located The grid-based drill program represents a more thorabout 380 kilometres north of Edmonton, is the third-largest ough approach in comparison to the previous operators

68 | CIM Magazine | Vol. 3, No. 8

and it will be interesting to view the results, particularly because of Shore Goldâ&#x20AC;&#x2122;s knowledge of â&#x20AC;&#x153;Prairie-typeâ&#x20AC;? kimberlites, as they are the owners and operators of the Star diamond project and Fort Ă la Corne joint venture in Saskatchewan. Initial modelling has allowed the partners to identify six distinctive eruptive phases within the K14 Kimberlite and develop a preliminary three-dimensional model. Internal studies anticipate that each eruptive phase will have its own characteristic diamond grade. This modelling has already indicated that an additional east-west row of drill holes is required along the southern edge of the K14 grid to further delineate the kimberlite body. In addition to this Diamondex/Shore Gold drill program, an aggregate sample of 369 tonnes of kimberlite was recovered from surface trenches at K14 and K6. A total of 139 stones were recovered from three separate trench samples from K14, yielding estimated diamond grades of between 7.4 and 8.8 carats per hundred tonnes. A single trench at K6 returned 85 diamonds and an estimated diamond grade of 7.0 carats per hundred tonnes. The largest stone recovered is a 1.07 carat stone from K6. The results of the bulk sample program need to be viewed in the context of new geological modelling as the trench samples represent the near-surface phase of complex multi-phased kimberlite such that the results are not applicable to the entire kimberlite body. Further grid drilling is planned by Diamondex/Shore Gold for the winter 2008-2009 season

on the K91, BH225 and K5 kimberlites, as well as additional holes at the K6 and K14 bodies.

The potash push With the global potash market experiencing rapid growth in the last decade due to the demand for food, fibre and feed, a new mineral play is developing in southeastern Alberta. Several companies, including APEX Geoscience Ltd., Cloudbreak Resources Ltd., Dahrouge Geological Consulting, Grizzly Diamonds Ltd., Landis Energy Corporation, Rich Resource Investments Ltd., Shear Minerals Ltd., Solitaire Minerals Corp. and several numbered Alberta Ltd. companies have staked metallic and industrial mineral permits on the Alberta-Saskatchewan border south of latitude 55 degrees. The play is developing, in part, because of the results of a mid-1960s drill program completed by Bayfield Oil and Gas Ltd. and City Savings and Trust Co. that discovered potashbearing beds within the uppermost portion of the Prairie Evaporite Formation at a depth of approximately 1,061 metres in well VCO#15. The depth is likely to be sufficient for solution mining, which accounts for most of the potash produced in Saskatchewan. The geological strata and basinal effects in the Vermilion, Alberta, area are similar to those of the potash-rich areas of Esterhazy, Saskatoon and Unity, Saskatchewan. This could well signify the dawn of a new era in potash production in Alberta. CIM

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Forging ahead in 2008 by John deGrace, Jay Fredericks, Dave Grieve, Bruce Madu, Bruce Northcote and Paul Wojdak, BC Ministry of Energy, Mines and Petroleum Resources

sible to several mine development and exploration projects. Mining and exploration tax incentives remain in place and numerous initiatives are aimed at promoting the industry among First Nations peoples.The province is also actively promoting its mining industry in Asia, which has shown increasing interest in investing in BC mining.

Operating metal and coal mines

Releasing coal at Peace River Coal’s Trend mine

ineral production and exploration spending in BC have grown dramatically over the past five years. Exploration spending, reaching record levels in 2007, tapered off in 2008 as companies moved towards conserving cash over the year. The government and the mining industry have several initiatives to foster investment and economic development. Among these is one that recognizes the importance of the public geoscience information delivered by various agencies, especially Geoscience BC. They, along with the BC Geological Survey, provide new geoscience data and ideas that serve to attract the mineral industry. In 2008, the provincial government allocated a further $6 million for mineral exploration-related geoscience in the area between Vanderhoof and Terrace. In September 2008, the BC government announced that it will proceed with environmental assessment and First Nations consultation on the proposed Northwest Transmission line, which would make the power grid acces70 | CIM Magazine | Vol. 3, No. 8

Of the 10 metal mines and nine coal mines in BC, several are expanding operations or extending their mine lives. Notable ones include Brule, Endako, Highland Valley Copper, Gibraltar, Trend and Wolverine. Beginning a north to south review, Northgate Minerals’ Kemess South gold-copper-porphyry deposit in the Toodoggone region, a 52,000 tonneper-day operation, is expected to close in 2010. In the northeast coal fields, Western Canadian Coal Corp. plans to expand the capacity of the Wolverine/Perry Creek operation from 2.2 to three million tonnes annually and the Brule mine from one to two million tonnes a year. The company completed drilling in advance of reopening the Willow Creek mine. Peace River Coal Inc. plans on doubling production at the Trend mine, to two million tonnes per year. Thompson Creek Metals Inc. announced a $374 million upgrade and expansion at the Endako molybdenum mine to increase mill throughput to 50,000 tonnes per day by 2010. Reserves at the new rate would be sufficient to 2024. At the Huckleberry copper-molybdenum mine, co-owned by Imperial Metals Corporation and a Japanese consortium, exploration continued to increase reserves, currently expected to last to 2010. Cross Lake Minerals’ recently opened QR gold mine, with an orebody of about 900,000 tonnes of 6 g/t Au grade, transitioned to underground operation in 2008. Imperial Metals is actively exploring on-lease at its Mount Polley copper-gold-silver-porphyry deposit, which has

The Denak West pit at Endako molybdenum mine

reserves to 2015. Imperial focused on finding high-grade ore to replace that from the Wight pit, and is concentrating on developing the new Springer pit. Taseko Mines Ltd. announced a $350 million project to increase daily throughput from 55,000 to 85,000 tonnes per day at its Gibraltar copper-molybdenum mine. The company also completed a major drilling program aimed at extending reserves. Roca Mines’ new underground molybdenum mine, MAX, is permitted to produce 72,000 tonnes annually.The initial focus is a 280,000 tonne, 1.95% MoS2 resource within a larger resource. The five southeastern metallurgical coal mines are operated by Teck Coal Limited (formerly Elk Valley Coal Corporation), which planned to expand production to 25 million tonnes in 2008 and undertake further expansions over the next few years. The company continued to drill adjacent and outlying holdings to evaluate future expansion opportunities. These included Castle Mountain, Marten-Wheeler and Mount Michael, all potential open pit sites. Teck’s Highland Valley Copper, Canada’s largest base metal mine, is undergoing a $300 million extension that will permit mining until 2019. On Vancouver Island, the Myra Falls Operations of Breakwater Resources Ltd., an underground zinc-coppergold-silver mine in operation for more than 40 years, has reserves for several more years. Exploration, for which there is further potential, continued into 2008. In southern BC, Merit Mining Corp. followed a bulk sample from its Lexington-Grenoble copper-gold deposit with commercial production in June 2008. The mine has measured and indicated resources of 297,000 tonnes at 8.36 g/t Au and 1.35% Cu. The 200 tonne-per-day Greenwood mill could eventually process ore from other nearby deposits.

Development stage projects Redcorp Ventures Ltd. is constructing roads, an airstrip and barge landing facilities at Tulsequah Chief, a once-producing zinc-copper-lead-gold-silver mine in the Northwest. Reserves are estimated to suffice for eight years at 2,000 tonnes per day. Adanac Molybdenum Corporation has a provincial permit for a 20,000 tonnes-per-day open pit operation at Ruby Creek near Atlin. Exploration drilling adjacent to the proposed pit continued in 2008. Mine construction is on hold in light of difficult financial market conditions. Sherwood Copper Corp. undertook infill drilling to update their recent preliminary economic assessment of

the Kutcho Creek massive sulphide project. An environmental assessment project report is anticipated in 2009. Current indicated resources are 17.3 million tonnes grading at 1.56% Cu, 2.12% Zn, 26.1 g/t Ag and 0.29 g/t Au. At Imperial Metals’ Red Chris copper-gold porphyry deposit in the Northwest, an East Zone hole intersected 1,024 metres grading 1.01% Cu, 1.26 g/t Au and 3.92 g/t Ag. At Copper Fox Metals Inc.’s Schaft Creek project, a drilling program focused on collecting geotechnical information for mine design and an environmental assessment project plan. Measured and indicated resources are 1.393 billion tonnes and a positive preliminary feasibility was released in September 2008. To lower costs at the Galore Creek project, located in a topographically challenging area in northwestern BC, Teck and NovaGold continued engineering re-evaluation, including modifying the access route and the mine plan design. Access road construction continued in 2008. An announcement regarding the new plan is currently anticipated. Fortune Minerals Limited released an updated feasibility study on the Lost Fox deposit at its Mount Klappan anthracite coal project and is seeking partners to pursue development. Western Canadian Coal Corp.restarted environmental assessment at its Hermann project in August 2008. Peace River Coal delineated its Roman Mountain and Horizon deposits, and First Coal Corp. drilled its Goodrich Central South property and was considering a 100,000-tonne bulk sample. Terrane Metals Corp.’s environmental assessment application for the Mt. Milligan porphyry copper-gold project was accepted for review.The company received a positive feasibility study and plans to begin production by 2012. Last year, Taseko Mines started an environmental assessment review at its Prosperity gold-copper porphyry deposit, which has 487 million tonnes of proven and probable reserves. New Gold Inc.’s New Afton copper-gold underground mine commenced mine construction and is expected to begin production in late 2009. Probable reserves stand at 44.4 million tonnes of 0.98% Cu, 0.72 g/t Au and 2.27 g/t Ag. Copper Mountain Mining Corp. is conducting a 50,000metre drill program at Copper Mountain, a copper-gold porphyry deposit near Princeton. Production is planned to resume in 2011. Measured plus indicated resources stood at 163.1 million tonnes of 0.43% Cu in late 2007. In October, Mitsubishi Materials Corporation announced the purchase of December 2008 / January 2009 | 71

a 25 per cent stake in a Copper Mountain subsidiary and a approximately 12,000 metres of drilling. Bard Resources has contract to purchase the first 10 years’ entire output. reported impressive molybdenum intercepts at its Lone Pine project near Houston, including 753 metres at 0.1% Mo. Selected exploration projects In the central region, the Akie stratiform zinc-lead-silver In the northwest region,at the Cassiar Gold Camp,Hawthorne deposit of Mantle Resources Inc. was expected to reach Gold Corp.began drilling aimed at resource re-evaluation, explo- 10,000 metres of drilling. At Kwanika, Serengeti Resources Inc. ration and ultimately reopening the permitted Table Mountain continued to define a copper-gold porphyry deposit. To the mine. Near Atlin, Prize Mining poured 100-ounce and 220-ounce south, at the Chu, TTM Resources Inc. mounted a large drill gold bars from its pilot mill at Yellowjacket and, based on test program. Barker Minerals Ltd. defined the Frank Creek deposit project results, will apply for additional mining in 2009. as Kuroko- type polymetallic volcanogenic massive sulphide. At Seabridge Gold Inc.’s Kerr-Sulphurets-Mitchell porphyry- At Woodjam, Fjordland Exploration Inc. reported continuing related gold deposit,last year’s 15,000-metre drill program sought positive results at the new Southeast Zone and discovered a to define the Mitchell zone for a feasibility study.At 0.5 g/t Au cut- mineralized zone, the Deerhorn. Skygold Ventures Ltd. conoff,the indicated mineral resource across three mineralized zones ducted a major drill program at its Spanish Mountain sediexceeds one billion tonnes. At the neighbouring Snowfield proj- ment-hosted gold deposit. ect, Silver Standard Resources Inc. also conducted a major drill In the south-central region, Newmac Resources Inc. program on the eastern continuation of the Mitchell zone. drilled the Crazy Fox property north of Kamloops, encounAt Kitsault, Avanti Mining Inc. calculated a NI 43-101-com- tering long intersections of molybdenum mineralization. At pliant indicated resource of 158 million tonnes grading 0.1% the Ruddock Creek zinc-lead project north of Revelstoke, Mo from historical data and began an infill drilling program. Selkirk Metals Corp. reached the E-Zone with a decline and Terrane Metal’s Berg Project, with a significant resource of began underground drilling in mid-2008. The Harper Creek 372.5 million tonnes grading 0.3% Cu and 0.039% Mo, saw deposit, north of Barriere, is an extensive volcanogenic sulphide system with a bulk tonnage target. Yellowhead Mining Inc. has completed a preliminary economic assessment and the project has entered the pre-application phase of the BC environmental assessment process. In the Afton area, Abacus Mining and Exploration Corp. drilled the Ajax copper-gold porphyry deposit in a joint venture with New Gold Inc. to determine a preliminary economic assessment and global mineral resource. West of Merrit, in the Spences Bridge Gold Belt, Consolidated Spire Ventures Ltd. undertook a large drill program at the Prospect Valley project. To the southeast, Goldcliff Resource Corporation continued to drill and trench the Panorama Ridge property and characterize its large-tonnage, lowgrade gold potential. In the southeast region, at the Thor silver, lead, zinc, gold and copper property of Taranis Resources Inc., extensive diamond drilling and geophysics helped correlate the True Fissure and Great Northern past producers with other mineralized zones. Joint venture partners Astral Mining Corporation and Kootenay Gold Inc. continued to drill the Jumping Josephine property west of Castlegar. Stockwork-hosted gold related to Jurassic intrusions in the JJ Main zone was the major focus of their activities. Eagle Plains Resources Ltd. was active on its sedex leadzinc targets in the Purcell Supergroup at the Iron Range and Bohan properties, east of Creston. For further details, see Exploration and Mining in British Columbia 2008 and British Columbia Mines and Mineral Exploration Overview 2008 available online (www.em.gov.bc.ca/geology). CIM 72 | CIM Magazine | Vol. 3, No. 8

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World-class potential awaiting further exploration by the staff of the Government of Yukon

Today, more than 100 years after the discovery of gold in Yukon, placer mining remains an important sector of the economy. Royalty records, which represent the minimum amount of gold production, show that over 16.6 million crude ounces (518 tonnes) of placer gold have been produced to date in Yukon. At today’s prices that would be worth more than $9.8 billion. In 2008, about 100 active placer mining operations directly employed some 350 people. Total placer gold production for 2008 is estimated to be similar to 2007 totals of 63,929 crude ounces.

Mine development

Western Copper continued drilling to prepare for construction next year.

he past year has seen the continuation of strong mineral activity in Yukon, with exploration expenditures estimated at $100 million.The territory’s mineral potential is demonstrated by the significant results from the advanced exploration of known deposits, all of which have returned results that highlight their under-explored potential. Several new discoveries were also made, further demonstrating Yukon’s excellent mineral potential. This past summer, there were over 150 exploration projects in Yukon. Of these, 73 had expenditures of greater than $100,000, with 22 spending more than $1 million. The rest were regional or grassroots generative projects. 74 | CIM Magazine | Vol. 3, No. 8

Sherwood Copper Corporation’s Minto copper-gold-silver mine underwent phase 2 expansion, taking mill production to 2,400 tonnes per day. Phase 3 expansion subsequently boosted it to 3,200 tonnes per day. Additional capital expansion included the construction of a power line connecting the mine to the main Yukon power grid.This is expected to significantly reduce operating costs. In July, Yukon Zinc was acquired by Jinduicheng Molybdenum Group Ltd. and Northwest Nonferrous International Investment Company Ltd. and is now operated as a private company. Development continued at the company’s Wolverine zinc-silvercopper-lead-gold deposit. Final development will begin in 2009, with production targeted to commence in the third quarter of 2010. The company has a Type A water license and a quartz mining licence allowing construction and operation until 2027. Completion of the all-weather tote road link to the Robert Campbell highway has greatly enhanced access to the property. Civil work consisting of site preparation for the construction camp was also completed. Western Copper Corporation’s Carmacks copper deposit is in the final stages of permitting and the company is expected to make a production decision in 2009. Geotechnical drilling and additional engineering and environmental studies continued in 2008 to prepare for construction in 2009.

Sherwood Copper’s Minto mine

Alexco Resource Corporation is conducting a major program that includes a new 650-metre decline and approximately 2,300 metres of underground rehabilitation at the historic Bellekeno silver-zinc-lead mine. To upgrade resources, 10,000 metres of underground drilling is planned to provide data for a feasibility study. The company aims to reach a production decision for Bellekeno by early 2009. Alexco has also entered a purchase agreement under which Silver Wheaton Corporation will purchase 25 per cent of the life-of-mine silver produced by Alexco from the Keno Hill silver district. Numerous other Yukon mineral deposits were the subject of exploration, engineering and environmental studies designed to inform decision-making by companies on project developments in the next few years. These included Western Copper’s Casino copper-gold-molybdenum porphyry deposit, the Selwyn Resources’ Selwyn lead-zinc sedimentary exhalative deposit, Overland Resources’ Andrew lead-zinc deposit, Yukon Gold’s Marg copper-zinc-lead-silvergold volcanogenic massive sulphide deposit, Yukon-Nevada Gold Corporation’s Ketza River gold deposit, North American Tungsten’s MacTung tungsten deposit and Largo Resources’ Northern Dancer tungsten-molybdenum deposit.

Yukon’s mineral regime All 14 First Nations in Yukon have been involved in land claim negotiations. The majority, including those in Whitehorse, have settled their claims. The Yukon government is establishing government-to-government relationships with all First Nations to ensure their participation in territorial resource development. This constructive approach has ushered in a new era of economic partnerships and investment opportunity by creating certainty of land tenure for mineral explorers. The government encourages and facilitates partnerships with First Nations, industry and investors, for the benefit of all. The prime example of this relationship is the Minto mine, located on Selkirk First Nation settlement land. The Selkirk First Nation has a cooperation agreement with Sherwood Copper. In addition to the many opportunities provided in this agreement, they also receive a 0.5 per

cent net smelter royalty on production from the mine. All projects that have advanced to economic studies have engaged the First Nations whose traditional territory is affected. Several have signed memoranda of understanding or cooperation agreements. Examples include Alexco’s agreement with the Na-Cho Nyak Dun First Nation, the agreement between the Kaska First Nation and Yukon Zinc, Selwyn Resources and Yukon-Nevada Gold, and the Carcross Tagish First Nation’s agreement with True North Gems and Tagish Lake Gold. This spurt in exploration and development activity has brought about an employment boom.Yukon has been proactive in managing the additional demand for skilled labour.The Yukon Mine Training Association offers a variety of training opportunities to help Yukoners acquire the skills needed to find lasting employment in the minerals industry. YMTA also works to help companies find the skilled workers they need to keep their projects on track. In January 2008, the Yukon government began a review of the royalty regime and claim-staking section of the Quartz Mining Act which regulates mineral exploration in Yukon. Proposed amendments, drawn up after public and industry consultations conducted from January to May, 2008, offer a more modern approach to claim-staking and position Yukon’s royalty regime competitively with other mining jurisdictions. These amendments are expected to be debated at the Yukon Legislative Assembly this fall. Supporting regulations will be developed following their legislative approval. Recent changes in global markets make it difficult to speculate on what 2009 has in store for exploration in Yukon. Record-setting exploration in the last few years has given Yukon investors the ability to make sound development decisions regardless of prevalent economic conditions.Yukon has captured the attention of Asia with investments in several projects by Chinese companies. As the discoveries in 2008 have shown, exploration potential in Yukon is world class. These factors will help Yukon retain its position as a prime target for mineral exploration, mine development and production in future years. CIM December 2008 / January 2009 | 75

Northerly location, northerly growth graph

Photo courtesy?

by Drew Williams, manager, public affairs and communications, GNWT Industry, Tourism and Investment

Many of the Northwest Territories' operations have to truck supplies to and product from remote locations.

he Northwest Territories has had another busy year with exploration projects moving forward, advanced projects progressing through the regulatory process and mines continuing production. The mineral exploration industry is polishing off old projects and new diamondiferous kimberlites have emerged.

Strong performance in mining At the EKATI mine, BHP Billiton’s 80 per cent share of production for the year ended June 30, 2008 amounted to 3,349,000 carats. During the year, EKATI processed more and 76 | CIM Magazine | Vol. 3, No. 8

higher value carats from the Koala and Panda (now in full production) underground mines. In December 2007, production started at the Koala mine, which is expected to produce 10 million carats over the next decade. Exploration near the mine site is ongoing. Producing 4.322 million carats in the first half of 2008, the Diavik Diamond Mine is on track for this year’s target of 10 to 10.5 million carats. Production is currently from the open pit A154 South, the A154 North and the A418 pipes. Underground development work, expansion and upgrading remain on schedule. Underground mining, projected to begin in 2009, will replace open pit mining by 2012. By mid-2008, De Beers Canada Mining Corporation had spent $1.1 billion dollars ($775.8 with NWT-based businesses, including $520.8 million with aboriginal businesses) at the Snap Lake mine. Commissioned in summer, the main process plant recovered the first diamonds in August 2007.The mine is ramping up to full production at 3,150 tonnes per day. Employing up to 500 people, the mine will produce 1.5 million carats per year over its estimated 20-year life. North American Tungsten’s CanTung mine produced 206,850 metric tonne units with an average grade of 0.95% WO3 in the three quarters ending June 30, 2008. Reserves suffice to support production until mid-2009. However, exploration has indicated the potential to significantly increase mine life. The mine employs 191 people in a rotating twoweek schedule.

Promising explorations Diamonds: The De Beers and Mountain Province Diamonds joint venture Gahcho Kué project (GKP), with indicated resources of approximately 23.6 million carats, is currently under environmental review. De Beers is expected to release an impact statement in the fall of 2008. With a budget of $38 million, GKP underwent a bulk sampling program, a technical study update and advanced permitting. Initial bulk sampling results are positive. In August 2008, Patrician Diamonds Inc. recovered micro diamonds from small-core samples from the first test hole on the Hillside kimberlite on its Doctor Lake property in the Sahtu region. Peregrine Diamonds Ltd. reported NI 43-101-compliant indicated resources of 18.2 million carats (94 cpht) in 19.5 million tonnes of kimberlite for the DO-27 kimberlite. While its development is currently not considered viable, DO-27 could support a mining operation in the future.

In April 2008, a new kimberlite was intersected on the Greenhorn property by Sanatana Diamonds Incorporated at its 5.9 million-acre Mackenzie project in the Sahtu and Inuvialuit regions. The $2.2 million 2008 program includes delineation drilling and sample collection for micro-diamond analysis. A $1.7 million exploration drilling program was planned for the Colville Lake project. Sanatana will conduct additional geophysical surveys on the Simpson project while seeking land and water use permits. Till sampling and airborne geophysics programs were planned on the Yeltea, Horton and Eastbrook projects. The company has completed The harsh subarctic climate and terrain do not deter operations at the Diavik diamond mine. 40 magnetic surveys, 14 gravity surveys, four max-min surveys, and resource estimate as well as a preliminary assessment report nine core holes on seven targets on the property. Snowfield Development Corporation’s 40,000-acre Ticho and a new application for permits. In June 2008, Tyhee project on the north shore of Great Slave Lake includes the released updated measured and indicated resources of 1.3 diamondiferous Mud Lake kimberlite. Two macro diamonds million ounces of gold and inferred resources of 374,000 have been recovered from a 1,044-kilogram Mud Lake sam- ounces. A revised application was submitted to the ple. In May, Snowfield completed its delineation and sampling Mackenzie Valley Land and Water Board in July 2008 for comprogram. Summer activities included a detailed airborne bined underground and open pit operation. Avalon Ventures Ltd. is continuing work on its Thor Lake rare magnetic survey, till sampling and prospecting. Consolidated Goldwin Ventures Inc. (CGV) holds nine metals project, 100 kilometres southeast of Yellowknife.Work to claims 50 kilometres southeast of Yellowknife, near the mouth date includes 8,724 metres of diamond drilling in 45 holes and of Drybones Bay. CGV initiated airborne magnetometer and the collection of a 1,600-kilogram bulk sample. Results have been encouraging and the company is working to release a other geophysical surveys in early 2008. Olivut Resources Ltd. plans a $4.9 million program at its prefeasibility study in 2009. In April 2008, Viking Gold Exploration Inc. completed the HOAM project, stretching between Fort Simpson and Délîne. The program includes the drilling of 20 to 25 holes and air- winter drill program at its Morris Lake gold project, 70 kilometres north of Yellowknife. The 12-hole, 2,690-metre program borne magnetic, helimag and gravity geophysical surveys. Anglo Swiss Resources’ Fry Inlet property in the Lac de sought data for a three-dimensional view of the mineralized Gras area includes a diamondiferous kimberlite. In March zone. Ten of the 12 holes intersected a mineralized zone. 2008, caustic fusion tests yielded 17 diamonds from a 58-kilo- Geochemical lake sediment and untested geophysical anomgram sample, equating 293 diamonds per tonne. Detailed alies have been identified and a significant mineralization zone has been confirmed. No status report is available on a ground geophysics are now planned. New Nadina Explorations Ltd. and its partners Chris and planned summer program. Jeanne Jennings and Archon Minerals Ltd. hold the Monument property on the south shore of Lac de Gras.It com- Base metals: Canadian Zinc Corporation’s Prairie Creek prises three mineral leases covering 7,615 hectares. Detailed project in the Mackenzie Mountains includes a partially ground magnetic surveys and 38 diamond drill holes (3,465 developed underground mine with a 1,000 tonne-per-day meters) produced three new kimberlites. Results are pending mill. Preliminarily budgeted at $7.5 million, planned proon caustic fusion analysis and diamond recovery of more than grams include ongoing permitting, further engineering and rehabilitation of the access road and ongoing exploration. In 2,200 kilograms of kimberlite. 2007, NI 43-101-compliant estimates were measured and Precious metals: Drilling continued at Tyhee Development indicated resources of 5.8 million tonnes grading over 20% Corporation’s Yellowknife gold project, 90 kilometres north of Pb and Zn combined. A prefeasibility study reflecting Yellowknife. This year saw the production of an updated updated resources is to be completed in 2008. December 2008 / January 2009 | 77

Canadian Zinc, issued a five-year Class B water licence in March 2008, applied for the operation of the Prairie Creek mine in May. The application was referred to environmental assessment in August. The Mackenzie Valley Environmental Impact Review Board (MVEIRB) is currently working on a report of the scope of the development and the assessment. In 2007, Fortune Minerals Limited released a bankable feasibility study for its NICO cobalt-gold-bismuth project, 160 kilometres northwest of Yellowknife. Proven and probable reserves were 21.8 million tonnes. In July 2008, Fortune selected a contractor to dismantle buildings, salvage equipment and demolish surplus facilities at the Golden Giant mine, for relocation to NICO. The company has submitted land use and water license applications to the Wek’èezhi’Land and Water Board and is targeting 2011 to begin producing cobalt cathode, gold doré and bismuth over a 15-year mine life using both open pit and underground mining and hydrometallurgical processes. Selwyn Resources Ltd. continued work on the Howard’s Pass property, stretching 37 kilometres along the YukonNWT border. An updated NI 43-101-compliant estimate pegs the mineral resource at 154.35 million tonnes and the mineral reserve at 18.19 billion pounds of zinc and 6.31 bilWith over 40 years of engineering experience, IEM offers a complete range of Bulk Materials Handling Equipment for the Mining Industry Apron Feeders -- Belt Feeders -- Belt Conveyors -- Belt Trippers -- Ball Handling Systems -- High Angle Conveyors

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lion pounds of lead. The company received a Type A land use permit and water licence to reclaim and operate an existing road linking Howard’s Pass to the CanTung mine. A planned drill program will help formulate an underground development strategy for proposed test mining and focus on the identification of additional high-grade mineralization along the corridor between the XY Central and Anniv Central deposits. Work continues on Tamerlane Ventures Incorporated’s Pine Point property, 42 kilometres east of Hay River. A Type A land use permit,issued in July 2008,allowed the commencement of initial construction, which is to include grading and levelling, drilling and installing freeze holes,installation of a freeze plant,shaft-sinking and related shaft infrastructure and surface buildings. In September, the company released its bankable feasibility study and updated NI 43-101-compliant proven and probable reserves of 7.8 million tonnes (6.16% Zn, 3.01% Pb), and measured and indicated resources of 8.0 million tonnes (2.26% Zn, 1.13% Pb). Uranium: Alberta Star’s Contact Lake/Eldorado permits on the eastern shore of Great Bear Lake cover over 117,898 acres. In September, the company completed its 2008 program, the results from which are pending. Two amended five-year Class A land use permits for long-term diamond drilling at both Eldorado and Contact Lake have been granted. Despite a moratorium on uranium exploration on Deline lands, the company has been allowed to proceed with permitting and surface exploration at Eldorado South. On July 20, 2007, Bayswater Uranium Corp., with interests in over 4.5 million acres in the Thelon Basin, submitted land use permit applications for exploration on the EL Lake and Crab Lake properties. The proposed exploration programs were referred for environmental assessment. MVEIRB’s September 11, 2008 report identifies significant impacts from both projects and recommends the rejection of the EL Lake project. The Crab Lake project could proceed if specific measures were taken to prevent adverse impacts. However, the board has recommended that the project be rejected by the responsible minister. A decision is pending. At the Boomerang North Uranium project in the southwest Thelon Basin, Uravan Minerals Inc. and Cameco Corporation completed a 600 square-kilometre multifaceted sampling program, collecting 2,500 samples each of surface soil and vegetation. In 2007, Cameco budgeted $4.0 million on the property. In May 2007, Uravan applied to amend existing land use permits for exploration on the Boomerang Lake North and South properties, proposing a one-year, 30-hole drill program on each property. However, in September 2008, MVEIRB recommended the rejection of both projects by the responsible ministers. While a decision is pending, Uravan is prohibited from carrying out diamond drill programs on its property. CIM

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Trailblazing in the tundra

Photo courtesy of Comaplex Minerals Corp.

by the staff of the Department of Indian and Northern Affairs Canada

A drill waterline is laid at Comaplex's Meliadine operation.

earing its tenth anniversary in 2009, Nunavut remains of great interest to the exploration and mining industry. Natural Resources Canada’s (NRCan) expenditure surveys, including 2008 projections, indicate that industry has invested an estimated $1.56 billion (actual dollars) in Nunavut since 1999. In 2007, exploration and deposit appraisal expenditures rose 60 per cent over the previous year to $338 million. Estimates suggest that in 2008, although expenditure will not surpass the 2007 mark, it may still reach $300 million. According to NRCan’s 2007 industry survey, 15 of the 100 highest spending Canadian exploration projects were in Nunavut.These projects represent a wide range of commodities including iron, uranium, diamonds and base and precious metals.In 2008, there were 152 exploration properties (132 active) in Nunavut’s three regions: the Kitikmeot, Kivalliq, and Qikiqtani.

10 million ounces of gold — two small highgrade (4.0 to 8.0 g/t cutoffs) lode deposits at Doris and Boston and the low-grade (average 4.0 g/t), high-tonnage Madrid deposit. Newmont’s comprehensive plan for Hope Bay follows the $34 million 2008 field program, which included exploration and geotechnical drilling of 70,000 to 80,000 metres. The Doris deposits were drilled to increase reserves locally, resource drilling was undertaken at the Boston and Madrid deposits and regional drilling was conducted elsewhere along the belt. Agnico-Eagle Mines Ltd. continued to advance its Meadowbank gold project, 100 kilometres north of Baker Lake. Probable gold reserves stand at 3.5 million ounces; 29.3 million tonnes at 3.7 g/t, with further potential along strike and at depth. The project is under construction and initial production is anticipated for January 2010. Agnico-Eagle’s Nunavut portfolio was expanded with the purchase of a 14.5 per cent interest in Comaplex Minerals. Comaplex’s main assets are 78 per cent and 50 per cent interests, respectively, in the Meliadine West and Meliadine East gold projects near Rankin Inlet in the Kivalliq. This year, Comaplex completed underground bulk sampling and infill drill programs on the Tiriganiaq deposit (Meliadine West). Dundee Precious Metals’ (DPM) Back River project, a 63,229hectare advanced exploration gold project, comprises the George and Goose lakes deposits.Indicated resources are 3.415 million tonnes at 10.9 g/t Au and inferred resources are 3.555 million tonnes at 10.2 g/t Au. Further land acquisition (the 81,895-hectare Wishbone property) covers favourable geological settings for gold, copper, silver, zinc and lead mineralization. DPM budgeted $12.8 million for gold and massive sulphide exploration in 2008. This included infill and exploratory drilling and bulk sampling at Back River and geological mapping, sampling and geophysical surveying at Wishbone.

Golden opportunities Early in 2008, Newmont Mining completed a $1.5 billion acquisition of the Hope Bay gold properties in eastern Kitikmeot, along the Coronation Gulf. Newmont’s land position covers the full 80-kilometre length of the Hope Bay greenstone belt. Three deposits contain indicated and inferred resources of more than 80 | CIM Magazine | Vol. 3, No. 8

The hunt for metals In 2008, the Australian zinc-gold company OZ Minerals acquired several properties in western Nunavut including two massive sulphide projects, High Lake (copper-zincgold-silver) and Izok Lake (copper-zinc-lead-silver). High

Iron-clad plans On northern Baffin Island (Qikqitani region), Baffinland Iron Mines Ltd. completed a $70 million bulk sample program at the Mary River iron ore project, which contains high-grade magnetite and hematite deposits.The next steps are environmental review, followed by proposed construction in 2010 and proposed production in 2014. The $4.1 billion proposal includes a full-season deep-water port at Steensby Inlet and a 140-kilometre rail link to the port.

Photo courtesy of Stornoway Diamond Corp.

Lake, located 50 kilometres inland of the Coronation Gulf, contains known resources of 17.3 million tonnes at average grades of 3.3% Zn and 2.2% Cu. Izok Lake, located along the Nunavut/NWT border, hosts 14.8 million tonnes of resource with averages of 2.6% Cu and 12.8% Zn. OZ intends to develop the zinc-rich Izok Lake deposit first, targeting production in 2014, followed by High Lake development in 2015. A proposed Izok Lake mine-mill development plan will potentially be submitted for environmental review in early 2009. Sabina Silver Corporation’s Hackett River silver-zinc project (western Kitikmeot) hosts at least eight known massive sulphide occurrences including East Cleaver Lake, Boot Lake and Main Zone.In the Jo Zone,results indicate excellent potential for additional resources. Reported values are 284.3 g/t Ag, 5.4% Zn and 2.6% Cu over 30 metres. A 13.6-year mine life is expected (milling rate of 10,000 tonnes per day) with anticipated average annual production of 12.4 million ounces of silver, 147,300 tonnes of zinc, 9,400 tonnes of copper, 16,800 tonnes of lead and 17,200 ounces of gold. Indicated and inferred resources are 40.1 million tonnes and 7 million tonnes, respectively. Advised by the Nunavut Impact Review Board, the Minister of Indian Affairs and Northern Development recommended that Hackett River’s project description undergo a Part 5 environmental impact review under article 12 of the Nunavut Land Claims Agreement. Uranium exploration continued at 44 properties, with concentrated work in Kivalliq’s Thelon Basin and Kitikmeot’s Hornby Bay Basin.In December 2007,positive results from a viability study prompted Areva Resources Canada Inc., and partners Dae Woo and JCU to announce the intended advancement of the Kiggavik uranium project (Kivalliq region) to the environmental impact assessment and feasibility phases. Kaminak Gold Corporation and Nunavut Tunngavik Incorporated (NTI) formalized an exploration agreement on the Angilak uranium property, 335 kilometres west of Rankin Inlet. Evaluation of the Angilak property’s many uraniumcopper-gold occurrences began in 2008. Encompassing over 520,000 hectares, Ferguson Lake project is the largest nickel-platinum group elements (PGE) project in Nunavut. Here, Starfield Resources Inc. continued its drill program to define the low-sulphide, high-grade PGE potential, and to upgrade inferred copper-nickel-cobalt-PGE resources in the West Zone to indicated resources. Additional geophysical targets were identified as prospects outside the main zone. Starfield plans a test plant for metallurgical studies on a bulk sample from Ferguson Lake beginning mid-2009.

A Stornoway employee in full polar gear at the Aviat camp

In 2008, Baffinland announced revised ore reserve figures of 365 million tonnes at Deposit 1, and 500 million tonnes at Deposits 2 and 3. The present plan calls for mining Deposit 1 at a rate of 18 million tonnes annually for the first 20 years.

Discovering diamonds Across Nunavut, potential new “diamond districts”continued to be discovered. At its Amaruk project in the Kitikmeot region, Diamonds North discovered seven new kimberlites, bringing the total number to 29, a majority of which are diamondiferous. Encouraged by drilling results on the Darby project (which it coowns with Indicator Minerals Inc.), Teck increased the 2008 exploration budget by 18 per cent. Additional kimberlite boulders were discovered in two new areas, which may represent new kimberlite clusters. Nine kimberlites have been discovered at Darby, five of which are diamondiferous. At the Aviat project, Stornoway Diamond Corporation concentrated on delineating the size and grade potential of the known sheets within the Eastern Sheet Complex. The lateral extent of the diamondiferous AV267 body was doubled to 250 hectares and a new kimberlite sheet was discovered. Delineation drilling continued on the AV9 kimberlite pipe, discovered in 2007. Dense media separation results from a 203-tonne sample from AV267 are awaited. Partners Shear Minerals Ltd. and Stornoway discovered nine kimberlites on the Churchill project, two of which (Killiq and the Kahuna breccia) were identified as being similar to other highly diamondiferous kimberlites on the property. Peregrine Diamonds Ltd. completed a field program on their Chidliak prospecting permits, 150 kilometres northeast of Iqaluit. Airborne magnetic/electromagnetic survey and indicator mineral sampling revealed three kimberlites. Followup work in 2009 will concentrate on 65 geophysical anomalies, many of which bear geophysical signatures similar to those associated with the three new kimberlites and are proximal to known kimberlite indicator mineral trains.In addition to its diamond potential, Chidliak also hosts platinum and base metal anomalies. In northern Kivalliq, Indicator Minerals announced the discovery of a new kimberlite at Nanuq North. Three kimberlites discovered on Nanuq in 2007(Kayuu, Natuarlik and Tudlik) returned encouraging results. Additional claims were staked in 2008, increasing the Nanuq land holdings from 201,000 to 314,000 hectares. CIM December 2008 / January 2009 | 81

the supply side The market maelstrom and mining suppliers Rarely has the business world been convulsed as it has over the last couple of months. The mining industry started feeling the effects of diminishing commodity prices and the credit crunch earlier in 2008. It is now virtually impossible for junior companies to raise financing. Companies supplying exploration equipment and services are feeling the pinch as exploration programs decelerate or cease. The TSX Venture Exchange, where many juniors are listed, is down more than 60 per cent since a year ago. Expecting risk capital shortages to last, juniors are striving to stay alive until better times return. In previous low periods in the mining cycle, many such companies hibernated, merged or went out of business, only to re-emerge when conditions improved, sometimes three to five years later. Also hit, at least for the moment, are companies that have found good deposits and want to develop them. Currently, neither equity nor debt financing is available. This may affect suppliers with contracts or those expecting business for new developments. On October 10, the Canadian Mining Journal reported that, in the previous week, five Canadian companies announced closures or suspensions at by Jon Baird copper, nickel, zinc and palladium projects because of “low metal prices and the challenging financial environment.” The low prices of mined commodities have affected the values of the currencies of commodityexporting countries like ours. This has a mixed effect on Canadian mining companies and mining supply exporters, depending on their 82 | CIM Magazine | Vol. 3, No. 8

cost bases. The Canadian dollar revenues of companies mining gold in Canada have not declined, even though US dollar gold prices have fallen. At a lower Canadian dollar, our exporters are more competitive in the US market. On the other hand, many of our clients’ home currencies have also declined against the US dollar. Suppliers fulfilling contracts made over the last year in US dollars are big winners, just as they were big losers when our dollar reached US$1.10 in November 2007. The big question is how long it will last. Those who confidently predicted that we were in a supercycle of sustained highs in commodity prices assumed that the Indian and Chinese economies would continue growing at over 10 per cent per annum. They have now been proven wrong, at least in the short term. Longer term industry observers discern a rather predictable decadal cycle. Commodity prices and activity, typically low in the early years of a decade, pick up about mid-decade and peak in the seventh or eighth year before falling again. The last cycle peaked in 1997 when world exploration expenditures reached US$5 billion. They dropped to US$2 billion by 2002 before rising to US$10 billion or so in 2007 and 2008, which, I suggest, represents the peak of the current cycle. This 10-year cycle has recurred each decade, back to the 1960s. Most industry forecasters focus on commodity prices. I do not think that this gives the whole story. One has to look at the major miners’ cash flows.

A page for and about the supply side of the Canadian mining industry Over the last three years or so, the costs of mining have risen substantially. If the prices of commodities like nickel drop much further, major operations will shut down, severely affecting global raw materials supply. Thus, I suspect that commodity prices will stay relatively high in historical terms. The recent rapid increase in costs, especially in energy, should now level off. My prediction is that the usual cycle is taking over, exacerbated by financial market volatility. In 1997, it was a problem with the Thai currency that started the “Asian crisis” just as the mining cycle was taking its usual dive. On top of this, the Bre-X fraud frightened off the few remaining risk investors. This time around, I expect the downturn to be severe and short. Much will depend on what happens in China, India, Brazil and the rest of the developing world. I believe that these economies’ internal demand will support the global mining industry. History repeats itself. Should we feel sorry for the high-rollers who bought Inco and Falconbridge at the top of the cycle? I prefer to feel good for the shareholders who sold out. I also feel good for mining suppliers who used this last boom to diversify their client base. They will be rewarded in the slow period that is starting now. CIM

About the author Jon Baird, managing director of CAMESE and president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining.

MAC economic commentary Mining as a core supplier to the global clean energy revolution Few subjects are receiving as much attention in the daily media as that of our societal need to move towards a clean energy economy. This theme was fundamental to the platforms of all the Canadian federal parties in the recent

Global investment in

in a gradual manner, requires major changes in our underlying financial, fiscal and technological practices. The market potential for new products and technologies associated with such a shift is staggering. As noted in a recent analysis by the UN Environment Program, a combination of climate change worries, growing support from world governments, rising oil prices and ongoing energy security concerns combined to generate a record-setting year of investment in the renewable energy and energy-efficiency industries in 2007. Over $148 billion in new funding entered the sustainable energy sector globally in 2007, up 60 per cent from 2006. Wind energy attracted the most investment ($50 billion in 2007), while solar power grew most rapidly — attracting $29 billion of new capital and growing at an average annual rate of 254 per cent since 2004. Regionally, most of the new money flowed into Europe, followed by the United States. However, China, India and Brazil are drawing growing investor interest, their share of new investment growing from 12 per cent in 2004 to 22 per cent in 2007, an increase in absolute terms of 14-fold, from $1.8 billion to $26 billion. These figures, impressive as they are, remain dwarfed by projected levels of future investment. Global investment in sustainable energy technologies and projects is expected to reach $450 billion per year by 2012, rising to $600 billion a year from 2020 onward.

sustainable energy technologies and projects is expected to reach

$450 billion

per year by 2012

election — each featuring an array of programs supporting this transition. In the United States, the platform of President-elect Obama talks extensively of hybrid vehicles, electricity from renewable sources, low carbon standards and the ultimate objective of eliminating oil imports from the Middle East and Venezuela within a decade. Republicans in Washington talk of nuclear power, carbon capture and sequestration and battery development, among other initiatives. Beyond the political and media coverage, it is evident that few subjects offer comparable transformative potential as changes to the world’s energy infrastructure. Developed economies by Paul Stothart have been driven for two centuries by the industrial combustion of fossil fuel — indeed there has long existed a direct macro-economic correlation of living standards with per-capita energy consumption. Societies that have been able to efficiently generate and transport energy from fossil sources have become far wealthier than those that cannot. To shift away from this dependency, even

The present demand for clean energy investments, and the substantial growth that lies ahead, cannot be met without the availability of the fundamental building blocks supplied by the mining and minerals industry. Hybrid vehicles, for example, draw upon nickel hydride batteries as well as cobalt and several rare earth minerals. Catalytic converters require cerium and platinum. Nuclear energy needs uranium as a fuel source, and beryllium, among other minerals, for the reactors. Solar energy cells use tellurium and germanium. Lightweight materials require lithium and niobium. Wind turbines use aluminum, lightweight composites, and steel (iron ore, metallurgical coal), among other minerals and metals. The electronic controls and generators of all these clean energy sources require significant amounts of copper. The transformative nature of the clean energy economy, and the core supply dependency on minerals and metals, serves to heighten the importance of the world finding and developing new mineral reserves. In the aim of consistency and logic, it is therefore incumbent upon governments, environmental groups, aboriginal groups and other stakeholders to work in support of the mining industry’s effort, in Canada and abroad, to find and develop new mineral reserves in a socially and environmentally responsible manner. CIM

About the author Paul Stothart is vice president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues.

December 2008 / January 2009 | 83

eye on business Merger and acquisition transactions — the basics A recent report by a Canadian investment banking firm predicted that current market conditions will foster an “unprecedented wave of merger and acquisition activity.” This is because junior miners and development companies trade at deep discounts compared to intermediate and senior companies that have cash in the bank and/or positive cash flow. The legal issues and concerns that a potential acquirer or acquiree should consider prior to and during a takeover or other M&A transaction follow.

Confidentiality agreements A confidentiality agreement (CA) can protect proprietary information and prevent premature public disclosure of negotiations. A CA will often contain a standstill clause and an exclusivity clause. A standstill clause prohibits the interested acquirer from purchasing securities or assets of the acquiree for a period of time (frequently a year or two), unless the target board agrees or another transaction intervenes. The standstill clause also provides an incentive to complete the deal. An exclusivity clause prohibits the acquiree from negotiating a transaction with other potential acquirers, subject to a fiduciary out.

Letter of intent A letter of intent (LOI) can be useful for solidifying intentions, setting out the terms of a proposed by John S.M. Turner deal and for and Gregory Ho Yuen, providing deal with the assistance of protection by Andrew E. Derksen way of no shop clauses and break fees. While an LOI is not usually binding, some of its clauses can be. An LOI can offer timing advantages if kept brief, but there may be disadvantages, such as 84 | CIM Magazine | Vol. 3, No. 8

potentially having to negotiate the deal twice.

careful to note that, depending on its specific terms, the execution of an LOI may be a disclosable event.

Fiduciary duties Directors must exercise their fiduciary duties towards the corporation and act in the best interests of its shareholders as a whole. Directors must avoid conflicts of interest and, when approached by an acquirer with an attractive deal, should examine the best options for the corporation. In some situations, this may involve appointing a special committee of independent directors. In Canada, unlike the United States, there is no outright obligation to trigger an auction. However, where the company is “in play,” directors are required to seek the best value reasonably available to shareholders in the circumstances.

Announcement Announcement timing is critical, both for the success of the deal and in order to comply with legal and regulatory requirements. Disclose too soon, and the deal could unravel, or the target share price may exceed the consideration to be offered. Disclose too late, and a breach of securities regulations could result. Reporting issuers have an obligation under the Ontario Securities Act to disclose any material change, including the entering into of a definitive arrangement or amalgamation agreement. In a recent decision, the OSC decided that a potential merger must be disclosed only when the board believes that the parties have committed to the transaction and that completion is substantially likely. Parties should be

Approvals Directors will have to consider the approvals needed to consummate any deal, including shareholder, regulatory (e.g. Competition Bureau, Investment Canada) and stock exchange approvals. In addition, there may be change of control provisions in material documents that require approvals or waivers from various stakeholders.

Time frame The time frame of a deal fluctuates, in part, depending on whether the proposed merger is unsolicited or an agreed deal. If unsolicited, the target may have or invoke a shareholder rights plan, which will frequently require the offeror to extend its offer past the 35-day bid period to approximately 60 days. From start to finish, M&A deals frequently take three to four months to complete. In addition, regulatory approvals and NI 43-101 technical reports are often on the critical path and may extend that period. CIM

About the authors John Turner, leader of Fasken Martineau’s Global Mining Group, has been described as “one of the best dirt lawyers in Canada, if not the world.” He has been involved in many of the leading corporate finance and M&A deals in the resources sector.

Greg Ho Yuen is a partner in Fasken Martineau’s Global Mining Group. He advises mining clients on equity financing and M&A transactions. Gregory is a regular speaker on capital markets transactions and NI 43-101 issues.

HR outlook Another step towards certification The Canadian mining industry moves to recognize the skills of its workforce As part of the mining industry’s strategy to secure the availability of a skilled, effective and mobile workforce, the Mining Industry Human Resources Council and its partners are developing the Mine Worker Certification Program. The program will verify and formally recognize mine workers’ qualifications and competencies against clear expertdefined National Occupational Standards (NOS) criteria. To date, three such standards have been developed for underground miners, surface miners and mineral processing technicians. The certification program seeks to: • Raise the profile and credibility of the industry and its occupations and increase work quality; • Enable intra- and inter-industry worker mobility; • Enhance workplace health and safety; • Facilitate career progression; • Help employers make informed hiring decisions and increase confidence in their employees; • Bring greater consistency to training resources. The mining certification model, developed by MiHR with the help of the Canadian Standards Association, was validated by the Canadian Mining Credentials Program (CMCP) Champions Network. The Network comby Ryan Montpellier prises approximately 50 mining industry stakeholders, including worker representatives, workplace trainers, mine managers, vice presidents of human resources, labour union officials, post-secondary educators, mining industry association representatives, and provincial/territorial and federal government representatives who, collectively, advocate for and pro-

mote CMCP within their networks and jurisdictions. The group also includes the Standing Committee of Mining Credentials, a body that advises and provides strategic direction to CMCP. Features of the Canadian certification model, based on provincial, territorial, national and international certification-related best practices, include: • Voluntary participation; • A correlation with related heavyindustry credentialing systems and the ability to assess equivalencies, where such systems exist; • The recognition and certification of related experience or credentials; • The requirement of demonstrated skills, competencies and experience; • A multi-stage approach including base and standard or proficient levels; • The existence of workplace assessors who oversee the demonstration of skills in the workplace. Allowing workers to prepare for acquiring credentials at the very start of their mining careers, the multi-level approach encourages career progression. The three possible entry points at which candidates may initiate their certification process are: • Level 1 Certification, which demonstrates that an individual possesses the basic occupation-specific knowledge, skills and experience required to gain the additional practical skills, work experience and theoretical knowledge needed for Level 2 Certification. Thus, this level is similar to an apprenticeship. • Level 2 Certification, which demonstrates that an individual pos-

sesses standard-level occupationspecific knowledge, skills, and experience required to successfully work unsupervised in the specified occupation. This level is similar to journeyperson status. A Level 2-certified person may mentor or participate in on-the-job training of Level 1 Certificate holders and can seek Workplace Assessor Certification. • Workplace Assessor Certification, which demonstrates that the individual possesses the non-occupationspecific, unique, assessor-level knowledge, skills and experience necessary to assess the competencies of other workers. The next steps for the Mine Worker Certification Program include: • Development of an NOS for work place assessors; • Development of assessment tools for the three existing NOS; • Development of program-related policies and procedures; • Piloting the system in various Canadian jurisdictions in 2009. Industry involvement is critical to the development of the system. MiHR encourages you to make your voice heard. CIM If you would like to be involved in or would like more information on the certification system, email info@mihr.ca or visit www.mihr.ca.

About the author Ryan Montpellier is the executive director of the MiHR Council. In 2007, he was recognized with a Gold Quill Award from the International Association of Business Communicators for his contributions in raising awareness of the HR challenges facing the Canadian mining sector. December 2008 / January 2009 | 85

standards Meaning of a current technical report under NI 43-101 Exploration and mining companies fortunate enough to have replenished their treasuries prior to the current credit crunch are likely to be expending a portion of their funds exploring and developing their mineral properties. The new information generated will eventually make technical reports prepared in connection with mineral properties no longer current.

Meaning of current technical report Guidance is provided in section 4.1 of the Companion Policy to National Instrument 43-101, which states: “Anytime an issuer is required to file a technical report, that report must be complete and current. If an issuer has a technical report previously filed, and is required to file another technical report because it triggered one of the circumstances listed under Part 4 of the Instrument, the issuer must update the outdated sections of the previously filed report and file a new, complete, current technical report if the contents of the previously filed technical report are no longer current.” So what is meant by a current technical report? According to Section 1.1 of NI 43-101: “Technical report” means a report prepared and filed in accordance with this Instrument and Form 43-101F1 Technical Report that does not omit any material scientific and technical information in respect of the subject property as of the date of the filing of the report.” A current technical by Greg Gosson report must also comply and Laurel Petryk with section 6.1 of NI 43-101 that states: “A technical report must be prepared on the basis of all available data relevant to the disclosure that it supports.” Section 6.2 of NI 43-101 requires at least one of the Qualified Persons preparing the report to have completed a current inspection of the mineral property. Section 6.1 of the 86 | CIM Magazine | Vol. 3, No. 8

Companion Policy 43-101CP provides guidance on the meaning of a current personal inspection: “there has been no material change to the scientific and technical information about the property since that personal inspection.”

Material change to information in a technical report Some examples of material changes in scientific and technical information on a property may be: new drill results, assay results or metallurgical test work. If a company discloses a time frame for developing a new mine, a current technical report must include information as per Item 25 of Form 43101F1. Changes in assumptions affecting the economic analysis may also be material. Other information on a property that may be relevant, and change materially, includes: mineral title, permits or obligations under the property agreements. Recommendations in the technical report may no longer be current if they are significantly different from what the company is presently telling investors. Section 2.4 of Companion Policy 43-101CP provides guidance on materiality and how it should be assessed in respect of the mining company as a whole. Material facts are those that would reasonably be expected to have a significant effect on the market price or value of the company’s securities. An assessment of materiality depends on the context. An item of information that is immaterial alone may be material if it is aggregated with other items. For example, when disclosing results of a drilling program the results from a single hole may not be material in itself. However, the

results of several holes, in aggregate, could be material to the company.

Certifying a technical report as current Although management may be in the best position to assess what is material to the company, the Qualified Persons that authored the technical report are required to certify statements that require an assessment of materiality. Section 8.1 (2) of NI 43-101 requires “that the Qualified Person has read this Instrument [NI 43-101] and the technical report has been prepared in compliance with this Instrument.” This means that the technical report must be complete and current as discussed in this article, and the Qualified Person must certify that the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading. If information has materially changed since the last personal inspection of the property, the technical report is not current, and the Qualified Person cannot sign the required certificate. It is up to the company and Qualified Person to communicate and work together to ensure that all material scientific and technical information is included in the technical report. CIM

About the authors Greg Gosson, technical director of AMEC’s Mining & Metals Consulting Group, is a frequent speaker at mining industry forums on scientific and technical disclosure standards. Laurel Petryk is a senior associate at the Vancouver office of Lang Michener LLP, specializing in corporate finance, mining and regulatory matters.

first nations Aboriginal communities and the mining industry Moving forward in 2009 What a difference a few months can make! If I had written this article six months ago and attempted to predict the outlook of the mineral resource industry, it probably would have been a much different picture. As we all know, the financials of the minerals industry are on a real rollercoaster ride, and currently it seems to be still coasting downward. This decline tends to make a big difference in the amount and quality of capital available to the start or continuation of new initiatives. This has particular significance for aboriginal groups as this is where we would typically see new negotiations taking place. On the other hand, not much has changed for aboriginal communities across Canada — poverty levels are still running high, government negligence is still a major concern and education about the industry throughout most communities is nearly nonexistent. Add to this the amount of new information now available regarding the need to consult and accommodate, and the impact of the recent jail terms served by the Chief and council from KI First Nation, and you have a recipe for tough negotiations ahead. In the past few years, the industry and its representative bodies and government have been doing a great deal to try to improve the flow of communication between aboriginal communities and other groups and organizations. Although well intended, the results by Juan Carlos Reyes have not been as productive as they would have wished. The reason for this is simple: aboriginal communities look at the industry as the wolf, and we all know the wolf is never trusted by the sheep, regardless of his cloak of good intentions. Nearly every aboriginal community has a negative view of both government and industry and, in most cases, very justi-

fiably so. In order to truly be effective in achieving an increased awareness of the industry and the positive things that it can bring to aboriginal communities, it is important that this message and the work it entails be done within the aboriginal world itself. So how do we move forward? Enhancing and increasing knowledge is the daunting task that the Learning Together initiative has undertaken. We are here to grow and share knowledge with the minerals industry about aboriginal heritage, history, rights and treaties, and, most importantly, to bring aboriginal communities from across Canada together in discussions led by peers — those who have “been there and done that.” We have just such an opportunity at our annual conferences. Not all the stories we share have happy endings, but every case study and workshop that we hold has a very important lesson to share. Our mandate is to “engage aboriginal communities and advocate on behalf of the Aboriginal Peoples while respect-

ing values, building trust and educating as an independent aboriginal organization.” Everyone involved in the world of Canadian mining and exploration needs to understand that working with aboriginal communities, either in current or future developments, is almost inevitable. Understanding aboriginal values, culture and heritage will be a tremendous asset in carrying out effective negotiations. Our next Learning Together conference is going to be held in Montreal on April 8–9, 2009, and once again we are expecting to have significant aboriginal participation: typically over 70 per cent. As always, this conference is a perfect opportunity for everyone in the industry to learn more about aboriginal communities and their decision-making processes regarding the industry. CIM

About the author Juan Carlos Reyes is an aboriginal consultant with efficiency.ca and the organizer of Learning Together. He is passionate about human rights and works tirelessly to help improve the lives of Canadian aboriginal people.

December 2008 / January 2009 | 87

innovation A marriage of micro and macro SRC’s high-security diamond laboratory

Kilns for caustic fusion in the micro diamond circuit

The Saskatchewan Research Council (SRC) has a long and distinguished record of supporting the mining and mineral processing industry with quality research and applied innovation. SRC’s focus areas have included slurry pipeline research, chemical/geochemical analysis and welding technology, to name a few. One current initiative has been to advance their capabiliby Mike McCubbing ties in establishing high-quality analysis for the diamond mining industry. The following article from an SRC publication descibes this effort. Ore quality analysis in the diamond industry is a high-technology business demanding exacting standards of accuracy and security. In 2007, the SRC opened a large highsecurity diamond laboratory in Saskatoon’s north industrial area, not 88 | CIM Magazine | Vol. 3, No. 8

far from SRC’s recently opened first dense media separation (DMS) plant. The laboratories conduct micro diamond analysis on core drilling samples, while the DMS plant looks for macro diamonds in bulk samples from large-diameter drilling. A great deal of experience and expertise went into the construction and commissioning of the new DMS plant. The plant exploits the high specific gravity of diamonds to separate them from lighter material. Ore is crushed, de-slimed and screened to remove fine material. It is then mixed with a dense medium and put through a cyclone to separate the heavier material. As well as meeting burgeoning demand in Saskatchewan, the operations also serve a growing list of international clients. SRC built on their capabilities in micro diamond analysis to spur the move into macro

diamonds, and industry development also demanded it. The divide between micro and macro diamonds is 0.50 millimetres. Recovered micro diamonds can be as small as 75 micrometres. This is reflected in the ore volume each operation handles. The micro lab processes samples ranging from a few kilograms to a few thousand kilograms, while the DMS plant can handle ore samples of up to 500 tonnes. Macro processing cannot recover as finely as micro analysis, but the odds of finding larger stones increase as more rock is processed. The micro diamond labs cover a working area of 1,375 square metres, with 80 kilns in operation, and are able to process two tonnes of samples per week, using a caustic fusion process. This makes it the world’s largest commercial lab that undertakes

innovation micro diamond extraction. SRC has developed a reputation as one of the best micro diamond labs in the world, and is now seeking to acquire similar repute on the macro diamond circuit too. The marriage of macro and micro diamond processing capabilities helps SRC provide all-in-one, one-stop shop services for exploration, from grassroots till sampling to micro and macro diamond extraction. This is significant because macro analysis is essential to proving a deposit and deciding whether costly mine development is justified. SRC’s high-security diamond services became even more secure with the addition of a strictly controlled, red-level process to the DMS plant. According to Bernard Gartner, SRC’s geo-analytical laboratories manager, “A red-level facility means absolutely no hands touch the diamond or have access to it. Everything is caged or handled in gloveboxes. There is no physical way of touching the diamond.” The laboratory and independent security personnel monitor sample processing and handling at all times. Macro diamond concentrate handling is verified and documented to ensure an audit trail for sample integrity. The lab follows ISO/IEC 17025:2005 international standard principles. As an internal quality control measure to validate accurate recovery, every sample is picked three times by three different randomly selected people. At each stage, the lab implements quality control measures to ensure the required recovery can be achieved and verified. On the micro diamond side, additional security measures are also in place. “We randomly spike the samples with synthetic diamond tracers,” explained Gartner. “The actual number of tracers added to the caustic fusion and the chemical treatment process is

Glove boxes ensure no hands touch the diamonds.

unknown to the final observers. Only the control technician and the quality controller know the original count of synthetic stones. As a result, we have secure quality assurance built right into our micro diamond recovery operation.” The SRC’s innovative efforts have also been recognized formally. The diamond facility was recently awarded the Exceptional Engineering and Geoscience Project Award by the Association of Professional Engineers and Geoscientists of Saskatchewan in recognition of the services it provides to diamond exploration companies in Canada and around the world. CIM

About the author Mike McCubbing, lab supervisor at SRC, has over eight years of experience in the diamond exploration industry with a focus on kimberlite processing. He regularly attends industry trade shows and short courses and has given presentations on quality control and quality assurance in diamond recovery. December 2008 / January 2009 | 89

student life Save the planet, be a miner! Tomorrow’s miners will change the face of the minerals industry

The new faces of the minerals industry, from left to right: Patrick Blonde, Frank Laroche, Paul Fournier, Pascale Sader, Ryan Cunningham, Nalini Singh, Professor James Finch and Kieran Harding.

The minerals industry is generally considered to be quite conservative. The techniques used to separate minerals have been recognizable over the ages, and technical progress, despite its acceleration in recent times, has remained incremental rather then revolutionary. So what can a student entering the minerals industry expect today? The current market uncertainty, aging workforce and greater focus on environmental responsibility mean it is not going to be “business as usual” for much longer. It is, therefore, an exciting time to enter the minerals industry. There are formidable problems that require novel solutions. The by Ryan Cunningham world needs more metal, and the metal has to be mined with less people, with less energy and from new frontiers. The minerals industry is operated, maintained and managed by an aging workforce. Within the next ten years, many experienced people will retire from the industry. This will open more positions than the incoming workforce can fill. 90 | CIM Magazine | Vol. 3, No. 8

This stress on the industry will have predictable results. Labour will not come from traditional sources. One challenge this will pose will be the need to communicate with people from different perspectives and backgrounds. Fortunately, new entrants to the minerals industry will come from the richly diverse milieu found in today’s universities. Their exposure to diversity is the very advantage that the industry will need. The next generation will transform the traditional white male-dominated culture with their new paradigms. It will be this outlook that will help the industry adapt to the labour shortage. Mining is an industry of new frontiers. This has been and will always be true. Rich deposits located close to the surface in locations near the market are now rare. The search for metal deposits has already led to mine development in challenging settings, from tropical jungles to arid deserts. New collaborations are being forged with companies and countries around the world.

Where are tomorrow’s frontiers? As traditional ore sources are becoming limited, non-traditional sources are being examined. Our definitions of where to explore are already changing. What is considered as viable ore will continue to shift with new technological improvements. Already, the harsh climate of the Far North is no deterrent to the building of mines. Mining the seabed is soon to move from the pages of sci-fi novels to reality. We will also be digging deeper and deeper into the earth. If nuclear fusion becomes a viable energy source, mining the moon for helium to fuel new-generation reactors will simply be a matter of who can get there first. The harsher the environment, the greater will be the need for automation. Combine this with the push to find improved ways to separate minerals and you will realize the urgent need for champions of innovation. The face of the minerals industry has to change. In today’s global community, being inline with both social and environmental needs is a must. The generation of students about to

student life need and desire for change in all quarters. Innovative laws and policies can deliver win-win solutions to everybody. When stresses on an environment increase, so does the need to adapt. The clear winners will be the ones who meet the challenges head-on, with heads held high, seeking the solutions we need. We who will soon be entering the industry need to know where the industry has been. Understanding historic blunders will be the key to avoiding them in our careers. At the same time, we should be mindful of the unique challenges that will mark our careers. Companies and individuals who see the opportunities in the problems and boldly take the initiative to solve them will be the winners of the minerals industry of tomorrow. CIM Photo courtesy of Claudio Calligaris for McGill University

enter the industry has been raised with the mission of “saving the planet.” The current perception is that mining is the career choice of those perusing personal wealth and turning their back to the needs of the world. There is nothing farther from the truth. The world needs metals. It is tiresome to be portrayed and perceived as “destroyers of the world” by those in “environmentally friendly” fields. Our detractors would do well to remember that riding a bike to work would be awfully difficult without the metals that to go into those bikes. Not only is the minerals industry necessary, it is also one that can make real differences to our planet. Reducing the energy needed to extract a unit of metal makes a massive global difference. Therefore, my mantra is, “Save the planet, be a miner!” It is not only on the environmental front that the students of today can shape the tomorrow of the minerals industry. Different disciplines, such as law, will be required to help shape the new minerals industry. Our laws governing land and exploration rights are in dire need of change. Today’s laws contribute to strained relations between native and host communities and mining companies. Changing the framework within which we develop new mines can help improve both society and the environment. There is a

About the author Ryan Cunningham is a secondyear master’s student in the Department of Mining, Metals and Materials Engineering at McGill University. He is part of the Steering Committee for MiHR’s Mining Industry Attraction, Recruitment and Retention Strategy (MARS) program.

December 2008 / January 2009 | 91

parlons-en Le CTMP au service de la recherche pour l’industrie Bien que tout dernièrement la valeur des métaux soit à la baisse à cause de la crise financière, il reste que globalement ces dernières années, nous avons assisté à de fortes montées des prix. Le nickel n’a pas échappé à la forte demande sur les marchés et sa valeur a même culminé au-delà de 40 000 $ la tonne ! Conséquemment, cette montée des prix a fortement stimulé l’exploration et la mise en valeur de nouveaux gisements de sulfures de nickel. Les gîtes où le nickel est la principale substance utile, sont associés à de fortes concentrations de sulfures (pyrrhotite, pentlandtite, chalcopyrite) et les corps hôtes sont classés d’après la nature des milieux magmatiques qui les renferment : impact météorique, basalte de rift et de plateaux continentaux, unités komatiitiques et autres corps mafiques intrusifs (troctolitegabbro-norite) ou ultramafiques (péridotite-pyroxénite-dunite) connexes. Nous soulevons ici le cas très intéressant des roches hôtes ultramafiques telles les péridotites et les dunites. En effet, ces massifs intrusifs qui renferment des sulfures de nickel, peuvent se serpentiniser. Dans ce processus, de la magnétite est produite et la serpentine peut être massive, sous forme d’antigorite, picrolite et lizardite, et fibreuse sous forme de chrysotile. Bien que la serpentinisation de la roche hôte soit un signe favorable de la présence de sulfures de nickel, elle présente une difficulté particulière à l’exploitapar Richard Rodrigue tion du gisement. et André Prus En effet, lors des étapes de concassage et de broyage, la serpentine libère le chrysotile et la brucite qui y est associée. Même en faible proportion, ces phases minérales seront très nuisibles et indésirables en milieu sec, elles seront tout aussi nuisibles en phases humides, puisqu’elles rendent le milieu épais et très visqueux. Si on essaie de procéder à la 92 | CIM Magazine | Vol. 3, No. 8

Appareils de thermogravimétrie et d’analyse thermique différentielle.

flottation des sulfures selon les méthodes conventionnelles, ce milieu dense et visqueux nécessitera une quantité phénoménale d’agents chimiques et de réactifs. Notons, que c’est exactement ce type de propriétés rhéologiques qui a donné dans le passé tant d’utilisations diverses à la fibre d’amiante chrysotile. Dans le cas présent, on doit absolument mettre en place plusieurs étapes successives de concassage/broyage et d’enlèvement des fibres, d’abord en phase sèche puis en phase humide jusqu’à obtenir un produit à la maille de libération visée pour la flottation des sulfures et qui soit exempt de fibres et de brucite. Même si la teneur en fibres peut exclure toute exploitation commerciale, la conception et la mise en place d’un circuit de traitement exige une expertise particulière qui s’est développée au cours des années dans le milieu de l’exploitation des fibres d’amiante chrysotile. Le Centre de technologie minérale et de plasturgie inc. (CTMP) de Thetford Mines réalise des travaux et des tests sur la fibre d’amiante depuis plus de vingt ans. Il dispose de l’ex-

pertise et des équipements de laboratoire permettant de faire la conception et les essais de développement sur les gisements de nickel qui se trouvent dans des roches ultramafiques. Notons que le CTMP est un centre de transfert de technologie, membre du Réseau Transtech et affilié au CEGEP de Thetford. Tout le monde est au fait des problèmes que connaît l’industrie de l’amiante chrysotile. Quoiqu’il arrive dans le futur, elle laisse en héritage des savoirfaire et des techniques qui servent à d’autres créneaux de l’industrie. ICM

Les auteurs Richard Rodrique est directeur développement des affaires du CTMP et André Prus est enseignant au département de technologie minérale au CEGEP de Thetford.

featured mine

Minto mine and camp

Under the wire by | Eavan Moore

Despite recent instability, the market has generally favoured Sherwood Copper Corp.’s Minto project since it opened in 2007.

The high copper prices on the world market over the past few years may have posed a headache for wire manufacturers, but were certainly a boon to Sherwood Copper Corp. The company’s high-grade copper-gold Minto operation, located in the centre of the Yukon Territory, commenced commercial production on October 1, 2007. And, despite the current market uncertainty, expansion is in the offing for the open pit operation, over and above the recent forecasts for the production of 50 to 60 million pounds of copper, 20,000 to 25,000 ounces of gold, and 250,000 to 300,000 ounces of silver per annum, and that level already an increase over the original forecast of 40 million pounds of copper annually. Although construction began in the mid-1990s as a joint venture between Minto Explorations and Asarco, the 1997 collapse in metal prices put the project on hold until

Sherwood acquired Minto Explorations and Asarco’s interests in 2005. “In hindsight, I think our timing was very good because copper prices had just started to move up,” said Stephen Quin, president and CEO of Sherwood. Still below US$1 per pound in 2003, the price of copper climbed to range between two and four dollars in 2006 and spent 2008 hovering around the three dollar mark. This spelled significant profits for the operation. “Simplistically, if you look at operating costs, we did the feasibility study based on two dollars a pound for copper and were forecasting costs of just under a dollar a pound,” explained Quin. “For much of the past year copper was trading around $3.10 or $3.15, and our costs were coming in at under a dollar a pound. So essentially, the margin was significantly higher than we predicted when we did the feasibility study. Now, obviously, that’s not exactly the sitDecember 2008 / January 2009 | 93

featured mine uation today, but who knows what the future holds. However, the timing was very good to catch a strong copper cycle.”

On time, on budget In earning its rewards, Sherwood had to surmount its biggest challenge: finishing on time and on budget. “Many other projects have come in late and/or over budget — sometimes substantially so,” observed Quin. “However, we were fortunate to have had a construction management group, JDS Energy & Mining, who, in cooperation with constructors Clark Builders and their subcontractors, did an outstanding job of delivering the project. We completed it almost six weeks early and were two per cent over budget.” Scheduled to have a capital cost of $98.6 million, the project came in at $100.2 million. To bring the operation online in just two years from the time of acquisition, Sherwood decided at the outset to find a mining contractor and get an early start. Pelly Construction was brought on board to commence waste stripping several months before completion of the feasibility study and bank financing. The company is contracted until 2010 to provide all the mining equipment; supervise the blasting, excavation, retrieval and trucking of the blasted rock; and supervise ore delivery to the crusher or stockpiles.

Unexpected reserves The site’s reserves proved more extensive than the original 2006 feasibility study predicted. Initially designed as a 1,560 tonne-per-day operation, the mine has expanded to 2,400 tonnes per day and is targeted to reach 3,200 tonnes per day by year end 2008. A 2007 prefeasibility study added 40 per cent to the reserves from a second deposit, called Area 2, based on 2006 drilling. Sherwood now plans an updated prefeasibility study that will incorporate additional resources defined in 2007 and 2008 and is considering expanding the mill to 4,000 or even 5,000 tonnes per day. “When we did our due diligence, we saw some exploration potential that I think others had overlooked or perhaps forgotten about,” said Quin. “But the results have definitely exceeded our expectations from when we bought the Minto property. We’ve increased the resource by 140 per cent in two years and we’ve got a third-year set of results in process. So, we would expect to see some gains even beyond that 140 per cent. The exploration results have been outstanding. But that was not known when we bought Minto.” Top: Loading concentrate at the Port of Skagway; Middle: Rock crusher at the Minto mine; Bottom: Mill circuit at Minto; Photos courtesy of Sherwood Copper Corp.

94 | CIM Magazine | Vol. 3, No. 8

featured mine A local workforce

Photo courtesy of Sherwood Copper Corp.

At present, the project employs approximately 200 people, with 120 personnel on site at a given time. About 55 are Pelly Construction employees and the rest include employees of Sherwood and other contractors: Domco for catering, Dyno Nobel for explosives manufacture and SGS Group for assays. Around 35 to 40 per cent of the workers on site are members of Selkirk and other First Nations. Upon acquiring Minto, Sherwood inherited a cooperation agreement originally signed in 1997. “When we arrived in 2005 nothing had been happening for several years, so there were some frustrations because of that,” said Quin. “However, when we got on board we got things going. We have made significant efforts to build up employment among the membership of the Selkirk First Nation, establishing training programs that enable people to gain experience operating in the mill and other areas of the mine and progress to jobs at higher levels. We have also established apprenticeship and scholarship programs.” Selkirk beneficiaries hold or participate in various contracts as well.

Low-maintenance mining Quin added that the cooperation agreement also addresses environmental monitoring and consultation. “Fortunately, Minto is a fairly simple project environmentally because the ore and waste are not acid generating,” he explained. “There is also no metal leachate coming out of the waste rock. So it’s a fairly benign deposit.” Reclamation should also be relatively simple at the end of the mine’s expected nine-year life. Although Sherwood uses conventional crushing, grinding and froth flotation techniques, it invested in a dry stack tailings system, relatively novel among Canadian mines. Pressure filters reduce the moisture content of waste materials to approximately 16 to18 per cent, resulting in a consistency similar to damp beach sand. Compacted and laid out in horizontal lifts, the tailings are kept out of the drainage channels. The upfront capital requirement of roughly $10 million is probably more than for that of a conventional tailings dam, but the risks of dam failure are bypassed and the cost of reclamation is significantly lowered. “Over the life of the mine, the cost, capital-wise, is probably comparable,” said Quin. “With conventional tailings dams, you have to keep building them up, adding to them as you increase capacity. Then you have the long-term issues of abandonment, where you’ll face continuous — even perpetual — monitoring and water treatment. In a dry stack, you just seal it over and walk away, with minimal long-term monitoring.”

Plans for growth Minto is Sherwood’s first, but not only project. In May 2008, the company acquired 100 per cent ownership of

Drilling blast holes at the Minto mine

Western Keltic Mines, proprietors of the Kutcho copper deposit in northwestern British Columbia, and began an infill drill program designed to upgrade the current resource. The company is now doing feasibility and permittingrelated work to develop a second open pit operation to recover copper as well as zinc, gold and silver credits. In September 2008, Sherwood announced its intention to merge with Capstone Mining, owner of the Cozamin copper-silver mine in Mexico. Together, the companies intend to offer a stable North American source of copper. The past few years served as a golden opportunity for the commencement of Sherwood’s Minto operation. Although the markets have been a little less kind as of late, the company is confident that its strong start and savvy business model will bode it well during the months and years to come. CIM December 2008 / January 2009 | 95

mine en vedette

La mine et le camp minier Minto de Sherwood Copper

Où le cuivre est encore d'or

Les récents prix élevés du cuivre ont pu causer bien des maux de tête à plusieurs manufacturiers, mais ils constituaient un avantage pour Sherwood Copper Corp. L’exploitation à teneur élevée en cuivre-or Minto, située au Yukon, a commencé sa production commerciale le 1er octobre 2007. Malgré l’incertitude des marchés, une expansion est déjà prévue pour cette mine qui devait initialement produire de 50 à 60 millions de livres de cuivre, de 20 000 à 25 000 onces d’or et de 250 000 à 300 000 onces d’argent par année. La construction avait débuté dans le milieu des années 1990 en tant que co-entreprise entre Minto Explorations et Asarco; cependant, la chute des prix des métaux en 1997 a mis le projet sur la glace jusqu’à ce que Sherwood achète Minto Explorations en 2005. « Je crois que notre choix du moment a été judicieux car les prix du cuivre commençait à remonter », dit Stephen Quin, président de Sherwood. « L’étude de faisabilité se basait sur un prix de 2 $US/lb pour le cuivre et des coûts d’exploitation inférieurs à 1 $US/lb », explique M. Quin. « Le prix du cuivre a été autour de 3,10 $US/lb pour presque toute la dernière année. Notre marge bénéficiaire était donc plus élevée que prévue, mais qui sait ce que nous réserve l’avenir. » Sherwood a cependant dû surmonter son plus grand défi : finir à temps en respectant le budget. « JDS Energy & Mining a géré la construction; avec Clark Builders et les entrepreneurs, un travail exceptionnel a été accompli et le projet a été livré six semaines à l’avance avec un dépassement des coûts de seulement 2 %, pour un coût final de 100,2 M$. » Afin de commencer rapidement la production, Sherwood a décidé d’embaucher un entrepreneur minier. Pelly Construction a commencé le décapage avant la fin de l’étude de faisabilité et l’obtention du financement bancaire. Cette compagnie fournira l’équipement minier, surveillera les 96 | CIM Magazine | Vol. 3, No. 87

sautages et effectuera l’excavation et le halage de la roche sautée vers les concasseurs ou les haldes. Une étude de préfaisabilité effectuée en 2007 a ajouté 40 % aux réserves à partir d’un second gisement. Sherwood planifie déjà d’agrandir l’usine à 4000, voire 5000 t/j. « Les résultats dépassent nettement nos attentes lors de l’achat », dit M. Quin. De 35 à 40 % des travailleurs sur le site sont membres de la communauté Selkirk et d’autres Premières nations. Lorsque Sherwood a acquis Minto, la compagnie a aussi hérité d’une entente de coopération signée en 1997. « Nous avons consacré d’importants efforts à l’emploi parmi la communauté Selkirk avec des programmes de formation pour permettre aux gens d’acquérir de l’expérience dans l’usine et les autres secteurs de la mine puis d’accéder à des postes de plus hauts niveaux », dit M. Quin. L’entente de coopération comprenait aussi des clauses de suivi environnemental et de consultation. « Du point de vue environnemental, Minto est un projet relativement simple car le minerai et les stériles ne génèrent aucun drainage minier acide », explique-t-il. La restauration sera aussi relativement simple à la fin de la vie de la mine. Bien que Sherwood utilise des méthodes conventionnelles de broyage et de flottation par mousse, les résidus sont empilés à sec. Des filtres sous pression réduisent la teneur en eau à 16 à 18 %. Les investissements d’environ 10 M$ sont plus élevés que ceux requis pour une digue conventionnelle, mais il n’y a aucun risque de rupture et les coûts de la restoration seront abaissés de manière significative. Minto n’est pas le seul projet de Sherwood; en mai 2008, la compagnie a acquis Western Keltic Mines, les propriétaires du gisement de cuivre Kutcho dans le nord-ouest de la Colombie-Britannique. La compagnie effectue actuellement les études de faisabilité et les demandes de permis. Aussi, en septembre 2008, Sherwood a annoncé son intention de se fusionner avec Capstone Mining, le propriétaire de la mine Cu-Ag Cozamin au Mexique. ICM

cim news CIM welcomes new members Achacoso, Mike, Alberta Adema, Dave, British Columbia Agharazi, Alireza, Alberta Agyemang-Badu, Collins, Alberta Aleksandrova, Aleksandra, Russia Apolinar, Simental, Mexico Badger-Haysom, Danita, Alberta Baker, Michael, British Columbia Battison, Brian, British Columbia Beaumont, John, British Columbia Bell, Robert, Alberta Bernadet, Mark, British Columbia Blackham, Lisa Catherine, British Columbia Borthwick, Kevin, British Columbia Borysuk, Warren, Alberta Bourque, Nicholas, Alberta Brecknell, Alan Francis, Australia Cameron, Laura, USA Canton, Anothony, Alberta Carlon, Chris, British Columbia Carr, Bill, Alberta Carroll, Anthony, USA Caswell, Alisa, Alberta Chen, Ke, British Columbia Cook, Norm, Alberta Coulombe, Eric, Alberta Deaderick, Alfred J. (Skip), Alberta Dean, Matthew D., Alberta Dobko, Bradley, Alberta Dolgaya, Yuliya, Alberta Eagle, Lana, British Columbia Ehsan, Abazari, Alberta Elsafadi, Amar, Alberta Facile, Dante, Germany Farrow, David, British Columbia Felderer, Markus, British Columbia Ferguson, Trevor, Alberta Fier, Eric, British Columbia Forst, Dwayne, British Columbia Fuller, Michael, British Columbia Furey, Thomas, Alberta Geier, Timothy, USA Giraud, Byng, British Columbia Goodman, John, Alberta Grainger, Michelle, British Columbia Grant, Jonathan, Alberta Gravel, Dan, Alberta Gu, Yong (Joe), Alberta Guan, Xi, British Columbia Hantelmann, Tysen, Alberta Hargreaves, Jamie, British Columbia Hashem, Dale, Alberta Head, David, Alberta Heaton, Andrew, British Columbia Holigroski, Bryan, Alberta Horvat, Steve, Alberta Howie, Rick, British Columbia Idris, Yonnlis, Alberta

Jacuta, James, British Columbia Jarman, Martin, British Columbia Kazibwe, Tonny, Uganda Khayrutdirov, Frad, Russia Konowalec, Bob, Alberta Kykhuizen, Ray, British Columbia Lam, Anthony, Alberta Lang, Bert, Alberta Lefebvre, Jean-Jacques, British Columbia Lovlin, Tathlina, British Columbia MacDonald, Garry, British Columbia Mah, Cedar, Alberta Marquez, Hector, USA Martens, Ken, Alberta Martin, Debbie, British Columbia McNalley, Shane, Alberta Miller, Robin, Alberta Mohammadi, Amanollah Malek, Iran Mulligan, Patrick, Alberta Munoz, Ricardo, Chile Naimi, Omar, Morocco Nankya, Halima, Uganda Nanyonjo, Teddy, Uganda Naseer, Muneer, Alberta Nauta, Craig, Alberta Nibourg, Katrina, Alberta Niesz, Ryan, USA Noble, Ross, Alberta Nordstrom, Ken, Alberta Oldengurg, Paul, Alberta Olver, Richard, Alberta Paolone, Daniel, Alberta Pareja, Guillermo, British Columbia Peavler, Kyle, USA Pelletier, John, British Columbia Postnikova, Elena, Russia

Poulin, Lee, British Columbia Seitz, Blaine, Alberta Semanda, Mike, Uganda Sharifi, Ashkan, Alberta Shrestha, Basanta K., Alberta Slade, Barry, British Columbia Smith, Peter, British Columbia Symbaluk, Marc, Alberta Taya, M. Benmlih, Morocco Torkornoo, Samuel, Ghana Torrance, Peter, Alberta Treacy, Duane, Alberta Turner, Robert, Alberta Vandengerghe, Jessica, Alberta Walugembe, Edward, Uganda Warr, Stephen, British Columbia Warrington, Faye, Alberta Watson, Mark, Alberta Watson, Peter D., Alberta Watson, Rosanna, USA Williams, George, Alberta Winnington, Allison, Alberta Wohlgemuth, Paul, Alberta Wong, Miranda, Alberta Yin, Zhimin, Alberta Zebedee, Peter, Alberta Zeller, Markus, British Columbia Zhuchenko, Evgenij, Russia Zhuchenko, Juliana, Russia Zumbilev, Llia, Bulgaria

Corporate Member Graham Group Ltd.

A look back in time 20 YEARS AGO… • President René Dufour struck a familiar note in his editorial, writing of the lag between the demand for and the supply of skilled labour in the resources industry. Like many of today’s industry leaders, he stressed the importance of summer employment for mining, metallurgy and geology students. • A deal was announced whereby CIM members would be entitled to special privileges at Holiday Inn hotels across Canada. Members’ perks included discounted tariffs, a complimentary newspaper, later checkout times and room upgrades. • K. Nickerson, Syncrude’s director of occupational health, tackled the thorny issue of substance abuse and drug testing at the workplace in a frank article in the CIM Forum section. • A historical metallurgy article on lead smelting in Canada traced the history of the base metal from its first smelting on the Black Sea shores in 3000 BC to the development of lead smelting in colonial North America. The above were taken from the December 1988 issue of CIM Bulletin. December 2008 / January 2009 | 97

Canada’s Global Impact | L’impact mondial du Canada

Mining Management Journée de finances and Finance Day et de gestion minières Canada leads the way This one-day event is intended to emphasize the interdependency of technical, operational and financial understandings in a way that characterizes the business opportunities for mining companies and mining investors. The issues of mergers and acquisitions, marketing and finance will all prevail as common and interrelated themes. Mining companies rely on key elements for success, including mineral deposits, technical skills and financial resources. A true understanding of how these business processes are linked is needed to fully realize optimal potential as companies strive to deliver value. The day is intended to expand on the knowledge of business processes and develop a better understanding of how companies can best deliver value by managing their assets and opportunities. Mentorship will be the theme throughout. The morning session will focus on the issue of "Filling the Experience Gap" and address the practical truths of project development, mergers and acquisitions, valuation, listing and fundraising in Canada, and the economic outlook. The afternoon session, "Canada Leads the Way," will address the country's role on the world mining stage, from the point of view of providing leadership and experience for emerging players from countries such as China, Russia and India. This will include discussions on capitalizing on the opportunities that are presented by the changing market dynamics. The vision is to establish a "no nonsense" delivery of experiences and insights for management and investors alike.

Le Canada mène le bal Cet événement d’une journée a été conçu pour souligner l’interdépendance de la compréhension des aspects techniques, opérationnels et financiers qui caractérise les occasions d’affaires pour les compagnies minières et les investisseurs miniers. Les questions de fusions et d’acquisitions, de marketing et de finances seront toutes abordées en tant que thèmes communs et interdépendants. Pour réussir, les compagnies minières se basent sur des éléments clés, incluant les gisements minéraux, les habiletés techniques et les ressources financières. Une bonne compréhension des interconnexions entre ces processus est nécessaire pour exploiter pleinement leur potentiel alors que les compagnies s’efforcent de produire des résultats. Le but de cette journée est d’élargir la compréhension des procédés opérationnels et de mieux saisir comment les compagnies peuvent produire des résultats en gérant leurs biens et les occasions qui se présentent. Le thème de mentorat dominera la journée. La session du matin ciblera la question de « Combler le manque d’expérience » et traitera de l’aspect pratique du développement de projets, des fusions et des acquisitions, de l’évaluation, des inscriptions et des levées de fonds ainsi que des perspectives économiques. La session d’après-midi, dont le thème est « Le Canada même le bal », traitera du rôle du Canada sur la scène minière mondiale à fournir un leadership et de l’expérience pour les nouveaux joueurs et ceux de pays tels que la Chine, la Russie et l’Inde. Des discussions auront aussi lieu sur la manière de profiter des occasions qui se présentent dans la dynamique des marchés changeants. Le but est de livrer, aux gestionnaires et aux investisseurs, des expériences et des points de vue réfléchis.

www.cim.org/toronto2009

cim news A copper expert in Quebec On October 6, the CIM Quebec Branch and the student chapter of the CIM Metallurgical Society were honoured to host Distinguished Lecturer Carlos Díaz, director of the Centre for Chemical Process Metallurgy, at the University of Toronto. His lecture entitled “The Evolution of Copper Smelting Practices in the Last Four Decades” drew 31 persons, including ten metallurgy students, to the Laval University venue. The lecture took a retrospective look at major changes that have taken place in copper smelting practices including the development of autogenous smelting processes, significant improvements in Peirce-Smith converting practices, the commercialization of Deux étudiants organisateurs et membres de l'exécutif du la section étudiante de la Société de la métal- alternative continuous converting methods, lurgie de l’ICM encadrent le conférencier Carlos Díaz; à gauche Keven Pelletier et à droite Geoffrey Barden and the consequent expansion and modernTwo student organizers and executive members of the student chapter of the CIM Metallurgical Society ization of smelters. The lecture concluded on either side of Distinguished Lecturer Carlos Díaz; left: Keven Pelletier, right: Geoffrey Barden. with a look at the trends in copper smelting R&D and future advances in copper smelting technology. Díaz also explained the influence on the development of technology of oil and copper prices, the 1971 U.S. regulations and the efforts in 1994 to Le 6 octobre dernier, la section de Québec de l’ICM et la reduce acid rain. The lecture was followed by a light bufsection étudiante de la Société de la métallurgie de l’ICM fet, sponsored by Agnico-Eagle Mines Ltd., the Quebec recevaient l’éminent conférencier Carlos Díaz, directeur du Mining Association, COREM, Fasken Martineau, Gestion Centre for Chemical Process Metallurgy à l’Université de SODEMEX Inc., Instrumentation GDD Inc., Virginia Toronto. Sa conférence intitulée L’évolution des pratiques Mines and Soutex Inc. CIM de fonte du cuivre au cours des quatre dernières décennies a attiré 31 personnes à l’Université Laval dont dix étudiants en métallurgie. Cette conférence était une rétrospective des changements majeurs qui sont survenus dans la fonte du cuivre : le développement de procédés de fusion autogènes, les améliorations considérables des pratiques de conversion Peirce-Smith avec la commercialisation d’autres méthodes de conversion en conpar Marie Fortin tinu, l’expansion et la modernisation conséquentes des fonderies. La présentation s’est terminée par un regard sur les tendances en recherche et développement dans la fonte du cuivre et les futurs progrès de la technologie de fonte du cuivre. Il nous a expliqué aussi l’influence du prix du pétrole, du prix du cuivre, et des règlements aux États-Unis en 1971, et de l’effort pour la réduction des pluies acides en 1994 dans l’évolution des techniques. La conférence était suivie d’un buffet léger, une commandite de Mines Agnico-Eagle Limitée, l’Association minière du Québec, COREM, Fasken L’Éminent conférencier M. Carlos Díaz (à gauche) et le président de la Section de Martineau, Gestion SODEMEX inc., Instrumentation GDD Québec, M. René del Villar. Distinguished Lecturer Carlos Díaz (left) with René del Villar, president of the CIM Quebec City Branch. inc., Mines Virginia et Soutex inc. ICM

Un expert du cuivre à Québec

December 2008 / January 2009 | 99

2009 PROFESSIONAL DEVELOPMENT SEMINAR SERIES

STRATEGIC RISK QUANTIFICATION AND MANAGEMENT FOR ORE RESERVES AND MINE PLANNING An Introduction to cutoff grade estimation: Theory and practice in open pit and underground mines To be determined , Montreal Jean-Michel Rendu, Consultant, USA

Cutoff grades are essential in determining the economic feasibility and mine life of a project. â&#x20AC;˘ Solve most cutoff grade estimation problems by developing techniques and graphical analytical methods. â&#x20AC;˘ Learn about the relationship between cutoff grades and the design of pushbacks in open pit mines, the development of new stopes in underground selective mining, and the optimization of block sizes in caving methods.

Ore reserve risk and mine planning optimization: Stochastic models and optimization for the mining industry To be determined, Montreal Roussos Dimitrakopoulos, McGill University, Canada

The latest regulations on public reporting of resources/reserves through state-of-the-art statistical and geostatistical techniques. â&#x20AC;˘ Learn how to quantify and deal with grade/tonnage/metal uncertainty and variability. â&#x20AC;˘ Learn geological risk management and how to integrate to mine planning and design.

Strategic risk management and applied optimization in mine design To be determined, Montreal Cindy Campbell, Gemcom, Australia; and Roussos Dimitrakopoulos, McGill University, Canada

.GCTP JQY [QW ECP JCXG C UKIPKĹżECPV RQUKVKXG KORCEV QP [QWT EQORCP[Ĺ?U DQVVQO NKPG D[ WVKNK\KPI UVTCVGIKE OKPG RNCPPKPI OGVJQFQNQIKGU CPF UQHVYCTG â&#x20AC;˘ Improve your understanding of strategic mine planning and life-of-mine optimization concepts. â&#x20AC;˘ Learn how to improve your understanding of the relationship of uncertainty and risk, and how to exploit uncertainty KP QTFGT VQ OCZKOK\G RTQĹżVCDKNKV[ 5VTCVGIKE OKPG RNCPPKPI UQHVYCTG 9JKVVNG 1RVKQPCN FC[ 9JKVVNG TGHTGUJGT UMKNNU YQTMUJQR CXCKNCDNG

COSMO Lab Mining Engineering

Mineral project evaluation techniques and applications: From conventional methods to real options To be determined,, Montreal Michel Bilodeau, McGill University, Canada

For registration and information please contact: Deborah Frankland Dept. of Mining and Materials Engineering McGill University Montreal, Quebec Email: admcrc.mining@mcgill.ca Phone: (514) 398-4755, ext. 089638 Fax: (514) 398-7099

Website: www.cim.org http://cosmo.mcgill.ca

6JG DCUKEU QH GEQPQOKE ĹżPCPEKCN GXCNWCVKQP VGEJPKSWGU CU YGNN CU VJG RTCEVKECN KORNGOGPVCVKQP QH VJGUG VGEJPKSWGU VQ OKPGTCN RTQLGEV CUUGUUOGPVU Learn how to: Ĺ&#x2013; )CKP C RTCEVKECN WPFGTUVCPFKPI QH GEQPQOKE ĹżPCPEKCN GXCNWCVKQP RTKPEKRNGU â&#x20AC;˘ Develop the skills necessary to apply these to support mineral project decisions.

Geostatistical mineral resource/ore reserve estimation and meeting the new regulatory environment: Step by step from sampling to grade control

To be determined , Montreal Michel Dagbert, Geostat Systems Int, Canada; Jean-Michel Rendu, Consultant, USA; and Roussos Dimitrakopoulos, McGill University, Canada

The latest regulations on public reporting of resources/reserves through state-of-the-art statistical and geostatistical techniques. â&#x20AC;˘ Applying geostatistics to predict dilution and adapt reserve estimates to that predicted dilution. Ĺ&#x2013; *QY IGQUVCVKUVKEU ECP JGNR [QW ECVGIQTK\G [QWT TGUQWTEGU KP CP QDLGEVKXG OCPPGT 7PFGTUVCPF RTKPEKRNGU QH 0+ CPF 5/' )WKFG

Theory and practice of sampling particulate materials 6Q DG FGVGTOKPGF 2CTV 2CTV 3# 3% OKPG CPF RTQLGEV CWFKVU /QPVTGCN Dominique FranĂ§ois-BongarĂ§on #)14#6'- 75#

Develop an understanding of the theory of sampling particulate materials, its practice, scope, limitations and appropriate applications. Ĺ&#x2013; '[G QRGPKPI HCEVU [QW OC[ JCXG QXGTNQQMGF QT KIPQTGF WPVKN PQY CDQWV VJG EQPUGSWGPEGU QH DCF UCORNKPI CPF VJG FKHĹżEWNVKGU QH IQQF UCORNKPI Ĺ&#x2013; 6JG WPUWURGEVGF CORNKVWFG QH GEQPQOKE TCOKĹżECVKQPU QH RQQT UCORNKPI

Quantitative mineral resource assessment an integrated approach: Exploration risk analysis for strategic planning To be determinedl,l, Montreal Don Singer, US Geological Survey, USA; David Menzie, US Geological Survey, USA

Learn how to provide decision-makers with unbiased information about the expected value and probabilities of other values of undiscovered mineral resources. â&#x20AC;˘ Identify the sources and magnitudes of risk and uncertainty in assessments of undiscovered mineral resources. â&#x20AC;˘ Demonstrate how operational mineral deposit models can reduce uncertainties.

cim news Obituaries CIM expresses its sincere condolences to the families and friends of the following members: S.R.P. Annet became a member of CIM in 1954 and a life member in 1987. He passed away in May 2008. William John Blackstock joined CIM in 1947 and became a life member in 1983. He passed away in January 2008. Chester MacRae Chinneck was a CIM member for many years, had received a CIM Fellowship becoming a life member in 1994. John S. Cooke became a member of CIM in 1975. He attained life member status in 2002. John J.L. Davies joined CIM as a junior member in 1956 and became a life member in 1996. He passed away in August 2008.

De la bière, une pizza et devenir membre de l’ICM Qu’est ce qu’un étudiant pourrait désirer de plus? Le 10 septembre avait lieu la réception Bière et Pizza pour les étudiants de l’Université Laval. La section de Québec de l’ICM tient cette activité d’information et de recrutement à chaque année. Elle offre aux membres étudiants de payer une partie de leur cotipar Marie Fortin sation s’ils s’inscrivent, ou renouvellent, lors de cette activité. Cette année soixante-dix étudiants étaient présents. Deux bons d’achat de 25$ à la Librairie Zone de l’Université Laval ont été tirés. Ces prix ont été gagnés par Messieurs Alexandre Jacques, étudiant en métallurgie, et Charles Lafrenière, étudiant en génie géologique. ICM

Robert W. Forbes joined CIM in 1963 as a junior member and achieved life member status in 1995. He passed away in June 2008. Adolf Helke, a member of CIM since 1972, achieved life member status in 1987. C.F.A. Hews joined CIM in 1967 and became a life member in 1997. Donald S. Kerby passed away in July 2008. He had been a member of CIM since 1956 and attained life member status in 1991. Douglas G. MacKay, a member of CIM since 1949, achieved life member status in 1983. He passed away in September 2008 Peter John McCabe joined CIM as a junior member in 1941 and became a life member in 1979. He passed away in June 2008. Bernie McDowell became a member of CIM in 1992. He passed away in November 2008. Thomas O’Keefe joined CIM in 1991. He passed away in April 2008. Addison G. Palmer passed away recently. He had been a member of CIM since 1964 and became a life member in 1993. W.M. Plumb joined CIM as a junior member in 1951 and became a life member in 1983. He passed away in February 2008. Arnie Struch, who joined CIM in 2006, recently passed away D. Weston had been a member of CIM since 1946. He became a life member in 1997.

De gauche à droite : M. Alexandre Jacques, le président de la Section de Québec de l'ICM, M. René del Villar et M. Charles Lafrenière. From left to right: Alexandre Jacques, René del Villar, president of the CIM Quebec City Branch, and Charles Lafrenière.

Beer, pizza and CIM membership What more could a student want? On September 10, the CIM Quebec City Branch held its annual information and recruitment activity with a Beer and Pizza reception for Laval University students. At this event, the branch offered to pay a part of the students’ registration or renewal fees. A draw was also held for two $25 gift cards redeemable at the university book shop, Librairie Zone. Metallurgy student Alexandre Jacques and geological engineering student Charles Lafrenière won the draw. CIM December 2008 / January 2009 | 101

cim news An industry veteran speaks CIM Distinguished Lecturer Carlos Díaz surveys the copper smelting industry Díaz has won several Canadian, Chilean and American awards.

The message

The 2008-2009 line-up of CIM Distinguished Lecturers includes Carlos Díaz, an erudite man who is among the rare few who are equally at home in a camp, a control-room or a campus.

The man Educated in Chile, the United States and England, Díaz headed the University of Chile’s mining engineering department and school of engineering. In 1975, he moved to Inco Ltd., leading the pyrometallurgy section, where his research spawned new copper and nickel processing techniques. Retiring from Inco in 1997, he went on to direct industry-academia cooperative research at the University of Toronto’s Centre for Chemical Process Metallurgy. Currently serving as adjunct professor at the university, he continues by Minaz Kerawala consulting with industry. Díaz was instrumental in the organization of Copper ‘87 and succeeding Copper-Cobre conferences. His publications include a book on copper smelting slag system thermodynamics, over 50 technical papers, 15 patents and innumerable conference proceedings. A past president of CIM’s Metallurgical Society, a CIM fellow and a member of the Chilean Institute of Mining Engineers, 102 | CIM Magazine | Vol. 3, No. 8

Díaz’s lecture, “The Evolution of Copper Smelting Practices in the Last Four Decades”, covers a period of profound, far-reaching changes, divided into two distinct sub-periods. In the first phase, Japanese and Western European companies, whose smelters were located in densely populated areas, faced mounting social pressure to adopt cleaner technologies that reduced sulphur dioxide emissions. Generally, companies in the Americas, whose smelters tended to be located in remote areas, faced little such pressure and lagged behind, until governments began imposing stringent regulations. Dramatic oil price hikes in the 1970s also pushed demand for less energyintensive smelting methods. The Inco flash smelting process, developed in Canada in 1954, remained unavailable to other companies. A small Finnish company stepped in, freely selling its Outokumpu process to eager Japanese and Western European operators in the 1960s. By the mid-1970s, starting with Noranda’s bath smelting process in Canada, several similar processes had been developed in Japan, Chile, Russia and other countries. By the mid-1980s, most energy-efficiency and emissions-related problems had been solved. Focus shifted to enhancing productivity through process intensification, a movement still underway. Outokumpu flash smelting and top-submerged lance injection (TSL) greatly increased smelter throughput capacities. This led to the emergence of a new industry standard — smelters with capacities exceeding a million tonnes of copper concentrate per year. Furnace integrity also improved rapidly, greatly lengthening furnace campaign lives.

As intensification progresses, the accent will shift to developing superior process modelling and online control. This will necessitate the development of more robust sensors, through evercloser collaborations between metallurgists; engineers specializing in instrumentation, materials and software; and even mathematicians and statisticians. Díaz believes that as sustainability concerns take centrestage, Canadian industry, with its global reach and esteem, can become the exemplar of efficient and environmentally sound smelting.

The motives Díaz has witnessed and initiated many evolutionary changes. Equally accomplished in pure and applied research, he considers his most important contribution to be to the development of people. At the University of Chile, he established several new disciplines, cultivating generations of industry professionals. At Inco, he encouraged his team members to undertake graduate studies, inspiring two of them earn doctorates. He continues to strengthen research groups at the University of Toronto and other Ontario campuses. Through CIM’s Metallurgical Society, Díaz has woven networks for the sharing and furthering of knowledge. He considers it a privilege to be able to help people acquire knowledge. CIM’s Distinguished Lecturer Program is yet another avenue through which he offers the benefit of his considerable experience and acumen to others. Díaz is sure to captivate and enlighten those who hear him speak. At 76, he has the zeal and drive of someone half his age. A doting father to five, grandfather to nine and great-grandfather to one, Carlos Díaz can also be regarded as a patriarch of the industry to which he has given so much. CIM

CIM Calendar of Events Calendrier des événements de l’ICM

Conferences Congrès 41st Annual Canadian Mineral Processors Operators’ Conference 41e Conférence annuelle des minéralurgistes du Canada January 20-22 Ottawa, Ontario Contact: Janice Zinck, CMP Secretariat Tel.: 613.995.4221 Email: jzinck@nrcan.gc.ca Website: www.c-m-p.on.ca

CIM Conference and Exhibition Congrès et Salon commercial de l’ICM May 10-13 Toronto, Ontario Contact: Chantal Murphy, CIM Meetings Coordinator Tel.: 514.939.2710, ext. 1309 Email: cmurphy@cim.org Website: www.cim.org/toronto2009

Rock Engineering 2009

Exchange ideas Échangez des idées

May 9-14 Toronto, Ontario Contact: Giovanni Grasselli, Conference Chair Tel.: 416.978.0125 Email: info@rockeng09.com Website: www.cim.org/rockeng09

Mining Society of Nova Scotia Conference

Make new contacts Établissez de nouveaux contacts

Stay connected Demeurez branché et en contact Read up and keep track of what’s going on in 2009! Must-attend CIM events are happening all the time across Canada and from as far away as Santiago, Chile, and Bishkek, Kyrgyzstan.

Demeurez au courant de ce qui se passera en 2009! Des événements ICM, tous plus intéressants les uns que les autres, se déroulent constamment à travers le Canada et aussi loin qu’à Santiago, au Chili et à Bichkek, au Kirghizistan * Details may change and cancellations may occur. For the latest events go to www.cim.org or contact your local branch. * Possibilités de changements et d’annulations. Pour les plus récents événements, visitez le www.cim.org ou contactez votre section locale

www.cim.org

June 4-5 Cape Breton Island, Nova Scotia Contact: Gordon Dickie Tel.: 902.758.4740 Email: gdickie@shawresources.ca

Conference of Metallurgists, COM 2009 Congrès des métallurgistes, COM 2009 August 23-26 Sudbury, Ontario Contact: Brigitte Farah, MetSoc, Manager, Meetings and Administration Tel.: 514.939.2710, ext. 1329 Email: bfarah@cim.org Website: www.metsoc.org

APCOM 2009 October 6-9 Vancouver, British Columbia Contact: Chantal Murphy, CIM Meetings Coordinator Tel.: 514.939.2710, ext. 1309 Email: cmurphy@cim.org Website: www.cim.org/apcom2009

World Gold 2009 October 26-30 Johannesburg, South Africa Contact: Jackie van der Westhuizen, World Gold Conference 2009, Conference Coordinator Tel.: + 27.11.834.1273/7 Email: jackie@saimm.co.za Website: www.worldgold2009.org.za

District 1 New Brunswick Contact: Paul Rennick (paul.rennick@gnb.ca) June September 10-12 November 8-10

NB Petroleum Cup Golf, St. Ignace Golf Club (Saint Ignace, New Brunswick) CIM New Brunswick Branch 34th Convention (Bathurst, New Brunswick) Annual Meeting in conjunction with NB Exploration, Mining & Petroleum Conference (Fredericton, New Brunswick)

Newfoundland Contact: Len Mandville (lenmandville@gov.nl.ca) City: St. John’s, Newfoundland May November 5–9

Joint GAC – NL Section and CIM NF Branch Lobster Dinner CIM Newfoundland Branch Conference and Trade Show Delta St. John’s Hotel and Conference Centre

33rd CIM New Brunswick Convention

District 2 Chapais-Chibougamau

Montréal

Contact : Patrick Houle (patrick.houle@mrnf.gouv.qc.ca) Ville : Chibougamau, Québec

Contact : Richard Simon (richard.simon@polymtl.ca) Ville : Montréal, Québec

Mars 27 avril au 2 mai

19 janvier 9 février 9 mars 6 avril

Septembre

Conférence minière Différentes activités pour souligner la Semaine minière du Québec Conférence minière

Souper conférence Souper conférence – Vale Inco Ltd. Midi conférence Souper conférence

Harricana

Québec

Contact : Francine Fontaine (franfontaine@cablevision.qc.ca) Ville : Val-d’Or, Québec

Contact : Marie Fortin (mariefortinicm@hotmail.com) Ville : Québec, Québec

21 janvier

26 janvier

18 février 20 mars 29 avril 31 mai

Section de Québec

Bertrand Brassard GeoConseil – Chrome PGE, présentation par Bertrand Brassard Strateco / Projet Matoush Vins et fromages – Hôtel Forestel Royal Nickel – Projet Dumont Nickel, présentation par Alger St-Jean Golf – Club de golf Belvédère

23 février

23 mars

28 août

Cent ans à faire des bulles pour le profit, présentation l’éminent conférencier de l’ICM Jan E. Nesset La Laurentienne, local 1337, 17h30 Assemblée générale annuelle et présentation : Évaluation du potentiel minéral, par Daniel Lamothe La Laurentienne, local 1334, 17h30 Évaluation et contrôle de la qualité en exploration minière et minérale : un procédurier moderne, présentation par l’éminent conférencier de l’ICM, Clifford R. Stanley GeoGolf, Club de golf Lac St-Joseph

Québec Nord-Est Contact : Ronald C. McClatchie (ronmcclatchie@msn.com) Ville : Sept-Îles, Québec 21 au 22 mai

Le Forum de la maintenance industrielle sous le thème F = MA (fiabilité = maintenance des actifs)

Rouyn-Noranda Contact : Jean Goutier (jean.goutier@mrnf.gouv.qc.ca) Ville : Rouyn-Noranda, Québec Activités à confirmer

District 3 Cobalt

Ottawa

Contact: Todd Steis (todd.steis@mti.ca) City: Haileybury, Ontario

Contact: Jean-François Fiset (jefiset@nrcan.gc.ca) City: Ottawa, Ontario

Seafood Night January 29 • September 24

January 21

General meeting with guest lecturer February 26 • March 26 • October 29 • November 26

June 25

Hamilton

Technical Meeting February 18 • March 18 • April 22 • May 20 September • October • November

Contact: Tracy MacPherson (tracy.macpherson@arcelormittal.com) City: Hamilton, Ontario February 4

General meeting with guest lecturer Peter Hall, Export Development Canada

Northern Gateway Contact: Roy Slack (roy.slack@cementation.ca) City: North Bay, Ontario May June September

Mining Week and Mine Scene Investigation CIM Blues Cruise, North Bay Waterfront Golf Tourney

General Membership Meeting February • April • October • December

Saguenay Contact : Damien Gaboury (damien_gaboury@uqac.ca) Ville : Chicoutimi, Québec Janvier 27 avril au 2 mai

Avril Mai Juin Septembre Octobre Novembre

Assemblée annuelle de la section Semaine minière du Québec · Visite du petit musée minéralogique, UQAC · Conférences · Capsules publicitaires et entrevues à la radio · Tirage de billets pour visite et souper sous terre, Mine Niobec Souper de crabes annuel de l’ICM Saguenay, Marina du Vieux-Port, 18h00 Visite et souper sous-terre, Mine Niobec Visite industrielle Visite industrielle Souper Okoberfest Party d’huîtres annuel de l’ICM Saguenay

December

CIM Distinguished Lecturer Jan E. Nessett, presenting 100 years of Blowing Bubbles Annual General Meeting and Technical Meeting Christmas Dinner and Technical Meeting

Sudbury Contact: Samantha Espley (samantha.espley@valeinco.com) City: Sudbury, Ontario February 13

Sweetheart Dinner & Dance, Caruso Club, 6:00 p.m. April 16 Distinguished Lecturer Evening, Inco Cavern, Science North, 5:30 p.m. June 5 Lobster Dinner & Dance, Caruso Club, 6:00 p.m. August 8 Rudolph Kneer Memorial Golf Tournament, Lively Golf & Country Club October 15 Student/Oyster Night, Inco Cavern, Science North, 5:30 p.m. November 19 Social Evening, Inco Cavern, Science North, 5:30 p.m. General Membership Meeting, Inco Cavern, Science North, 5:30 p.m. January 22 • March 25 • September 17

Sudbury Geological Discussion Group Contact: Ruth Debicki (ruth.debicki@ontario.ca) City: Sudbury, Ontario January 16

General Meeting

Toronto Contact: Nancy Macnab (cim_toronto@rogers.com) City: Toronto, Ontario

Thetford Mines

January 22 February 19 March 4 April 16 May 9 September 16 October 15

Contact : Pierre Laroche (lab.plar.cq@bellnet.ca) Ville : Thetford Mines, Québec

Luncheon Meeting September 17 • November 19 • December 10

23 et 24 janvier Février Mars 27 avril au 2 mai Octobre Novembre

Tournoi annuel de curling, Club de golf et curling de Thetford Mines Conférence par Roch Bégin, Graymont Conférence par Étiennes Jacques, Rio Tinto–Alcan Différentes activités pour souligner la Semaine minière du Québec Conférence Conférence

Luncheon and Annual General Meeting Student Luncheon PDAC – CIM Joint Luncheon Luncheon Meeting Royal York Networking Evening Frank Grieco Golf Day Grubstake Event

Student–Industry Luncheon – CIM Toronto Branch

District 4 Red Lake Contact: Carmen Storey (carmen.storey@ontario.ca) City: Red Lake, Ontario Technical Meeting January • February • March • April • May • June June, 1st week

Exploration Roundup

Saskatoon Contact: Lewis Cluett (lewis.cluett@potashcorp.com) City: Saskatoon, Saskatchewan November November

Mineral Processing Night Annual Ball

Saskatoon Geology Section Contact: Gary Yeo (gyeo@denisonmines.com) City: Saskatoon, Saskatchewan General Lunch Meeting January • February • March • April • May • September • October • November • December

Thompson Contact: Inge Robinson (irobinson@inco.com) City: Thompson, Manitoba Technical Meeting February • March • April August October

CIM Golf Tournament Seafood Night and Membership Drive

Thunder Bay Contact: Mark Smyk (mark.smyk@ontario.ca) City: Thunder Bay, Ontario January 21-22 February March April

Exploration Targeting Short Course with guest speaker Cam McCuaig, Masonic Lodge CIM Bowling Night Annual Curling Funspiel, Fort William Curling Club Student Paper Night, Travelodge Airlane Hotel

Guest Speaker Evenings January • February • March • April • May • September • October • November • December

District 5 Calgary Contact: Edwin Fraser (winf@resourceprof.com) City: Calgary, Alberta Luncheon Technical Speaker January • February • March • April • May • June • September • October • November • December

Edmonton Contact: Gordon King (gking@transwest.ca) City: Edmonton, Alberta Monthly Meeting, University of Alberta Faculty Club, 6:00 p.m. January 12 • February 9 • March 9 • April 6

Oil Sands Contact: Christian West (west.christian@syncrude.com) City: Fort McMurray, Alberta February 7 June Summer

Funspiel (Curling) Student Paintball CIM Golf Tournament

Technical Meeting February • April • May • September • October

Yellowknife

Winnipeg Contact: Cameron Rennie (renniec@mts.net) City : Winnipeg, Manitoba Luncheon Meeting January 15 • February 19 • March 19 • April 16 • May 21 • September 17 • October 15 • November 19 September

CIM Edmonton Branch

Golf Tournament

CIM Thunder Bay Branch Annual Curling Funspiel Champs

Contact: Diane Baldwin (diane_baldwin@gov.nt.ca) City: Yellowknife, Northwest Territories Events still in planning stage

International Bishkek – Central Asia Contact: Kenneth Arne (kenarne1@yahoo.com) City: Bishkek, Kyrghyzstan Events still in planning stage

Los Andes – Chili Contact: John Selters (jselters@vtr.net) City: Santiago, Chile March 17

April 14

La Seguridad, Une Misíon Valórica John T. Ryan, Mantoverde, presentation by Alvaro Soto Los Bronces Development Project, presentation by Julio Cortes

District 6 Crowsnest

Vancouver

Contact: Chris Ryan (Chris_Ryan@teck.com) February 7 March 14 April

Hockey Trip to Calgary (Flames vs. Ducks) Annual Curling Funspiel (Coleman, Alberta) Dinner with guest speakers Doug Stokes and Nic Milligan (Fernie, British Columbia) Annual Golf Tournament and CIM Scholarship Fundraiser (Fernie, British Columbia)

June 25

Contact: Alex Doll (cimvanc@agdconsulting.ca) Vancouver, British Columbia Luncheon with keynote speaker, Four Seasons Hotel February 26 • April 23 • May 28 • June 18 • September 24 Luncheon with keynote speaker, Hyatt Hotel March 26 • October 22 November 19

Student Night, Hyatt Hotel

Georgia Strait Contact: Cale Dubois (cale.dubois@quinsam.com) City: Campbell River, British Columbia Technical Meeting, Coast Discovery Inn & Marina March • August

North Central BC Contact: Greg Rasmussen (greglrasmussen@gmail.com) City: Prince George, British Columbia CIM North Central BC Branch Annual General Meeting

June 24-26

South Central BC Contact: Peter Witt (pwitt@hvcopper.com) City: Kamloops, British Columbia September 16-18

Annual Branch Meeting CIM South Central BC Branch

CIM Vancouver Branch Student Night

May 19

June 16 July 21 August 18 September 22 October 20 November 17 December 15

Generación de Energía en Punta Colorada: El Compromiso de Barrick con las Energías Renovables y las Comunidades, presentation by Rofrigo Rivas M. Avances en Automatizacion en la Industria Minera, presentation by Fernando Romero Algunos Paradigmas de la Cal, presentation by Guillermo Coloma Proyectos de Oro Yamana Gold Inc., presentation by Alejandro Gordon Dos and Don’ts of Mine Closure, presentation by Jim Cassie Quakes and Volcanoes from the Proyecto Multinacional Andino, presentation by Renati Wall Student Night Molymet, presentation by Gabriel Gutierrez

cim news

CIM National Office/Bureau national de l’ICM

Here to help you/À votre sevice

First row, from left to right: Chantal Murphy, Anne Brosseau, Alexandra Cyr, Brigitte Farah, Kim Couture, Laura Foley; second row: Andrea Nichiporuk, Minaz Kerawala, Angie Gordon, Anne Brunet, Robertina Pillo, Dawn Nelley, Jean Vavrek; third row: Elaine Kinsella, Heather Ednie, Joan Tomiuk, Lorraine Brown, Josée Dallaire, Ronona Saunders; back: Jean-Marc Demers, Serge Major; inset: Martin Bell; missing from photo: Jo-Anne Watier

Name | Nom

Title | Titre

Jean Vavrek Lorraine Brown

Executive Director/Directeur exécutif Executive Assistant/Adjointe éxécutive

Extension | Poste

Email | Courriel

1301 1302

jvavrek@cim.org lbrown@cim.org

Finance and Administration | Finances et administration Serge Major

Director, Finance and Administration/ Directeur, finances et administration

1318

smajor@cim.org

Anne Brosseau

Accounts Payable and Special Volumes/ Comptes payables et volumes spéciaux Customer Service/Service à la clientèle

1313

abrosseau@cim.org

1300 1328

kcouture@cim.org acyr@cim.org

1312

ekinsella@cim.org

Director, Media and Communications/ Directeur, medias et communications Senior Editor/Rédactrice sénior Assistant editor/Rédacteur adjoint

1308

hednie@cim.org

1303 1323

agordon@cim.org mkerawala@cim.org

Section Editor/Chef de rubrique Technical Editor and Interim Section Editor/ Rédactrice technique et chef de rubrique par intérim

1323 1310

anichiporuk@cim.org jtomiuk@cim.org

Coordinator, Communications, Awards and Branches/ Coordonnatrice, communications, prix d’excellences et sections locales

1316

rpillo@cim.org

Kim Couture Alexandra Cyr Elaine Kinsella

Cash receipts/Encaissements Accounts Receivable/Comptes à recevoir

Media and Communications | Médias et communications Heather Ednie Angie Gordon Minaz Kerawala Andrea Nichiporuk Joan Tomiuk Robertina Pillo

108 | CIM Magazine | Vol. 3, No. 8

cim news

Events and Supply Management | Événements et gestion des fournitures Jean-Marc Demers

Martin Bell Josée Dallaire Chantal Murphy

Senior Director, Business Management and Strategic Development/ Directeur principal, gestion des affaires et développement stratégique Sales Manager, Exhibitions/ Directeur des ventes, salons commerciaux Coordinator, Exhibits and Event Development/ Coordonnatrice, salons et développement événementiel

1314

jmdemers@cim.org

1311

mbell@cim.org

1320

jdallaire@cim.org

1309

cmurphy@cim.org

Membership Database Coordinator/ Coordonnatrice, base de données des membres Membership Assistant/Adjointe, services aux membres

1307 1307

lfoley@cim.org dnelley@cim.org

Membership Assistant/Adjointe, services aux membres

1322

jwatier@cim.org

1329

bfarah@cim.org

1317 1327

abrunet@cim.org rsaunders@cim.org

Meetings Coordinator/Coordonnatrice de congrès

Membership | Services aux membres Laura Foley Dawn Nelley Jo-Anne Watier

Metallurgical Society of CIM | Société de la métallurgie de l’ICM Brigitte Farah Anne Brunet Ronona Saunders

Manager, Administration and Meeting Planning/ Directrice, administration et planification de conferences Administrative Assistant/ Adjointe administrative Coordinator, Marketing and Publications/ Coordonnatrice, marketing et publications

CIM Council/Conseil de l’ICM CIM Council | Conseil de l’ICM 2008-2009 James Gowans Michael Allan Chris Twigge-Molecey Jim Popowich Michael Cinnamond

President/Président President-elect/Président élu Incoming President-elect/Président élu entrant Immediate Past President/Président sortant Finance Chair/Président des finances

Vice Presidents | Vice-présidents Ron Shaw Serge Perreault Dave Joyce Eric Hinton Zoltan Lukacs Sean Waller Peter Lahucik

District 1 District 2 District 3 District 4 District 5 District 6 Vice President International/Vice-président, International

Societies | Sociétés Ian Orford Tim Joseph David Bleiker Dan Brisbin Brad Kingston Keith Spence Mahesh Chaturvedi Martin Drennan Gordon Dickie Ken Chekerda Luc Beauchamp Tim Skinner

Canadian Mineral Processors Society/Société canadienne du traitement des minerais Coal and Industrial Minerals Society/Société du charbon et des minéraux industriels Environmental Society/Société de l’environnement Geological Society/Société de la géologie Maintenance and Engineering Society/Société de l’ingénierie et de l’entretien Management and Economics Society/Société de gestion et de l’économie minérale Metallurgical Society/Société de la métallurgie Metal Mining Society/Société de l’exploitation des mines et des métaux Mining Society of Nova Scotia/Société minière de la Nouvelle-Écosse Oil Sands Society/ Société des sables bitumineux Rock Engineering Society/Société de la mécanique des roches Society for Innovative Mining Technology/Société des technologies minières innovatrices December 2008 / January 2009 | 109

executive summaries

YOUR

GUIDE

TO INDUSTRY KNOWLEDGE Peer reviewed by leaders in their fields CIM Bulletin abstracts 111

Evaluating uncertainty in kimberlite pipe volume by simulating geometry in cylindrical coordinates J.B. Boisvert, P. Oshust and C.V. Deutsch

112

An agent-based framework for open pit mine planning H. Askari-Nasab and K. Awuah-Offei

113

Exploration and Mining Geology Journal Volume 17, Numbers 3 and 4

114

Canadian Metallurgy Quarterly Volume 47, Number 2

Complete CIM Bulletin papers are posted in the online Technical Paper Library

www.cim.org 110 | CIM Magazine | Vol. 3, No. 8

executive summaries Evaluating uncertainty in kimberlite pipe volume by simulating geometry in cylindrical coordinates

After transforming the available pierce point data (drill hole intersections through the kimberlite pipe) to cylindrical coordinates, traditional SGS can be employed to generate realizations of the kimberlite pipe geometry. The major contribution of this methodology is in the transformation to cylindrical coordinates and in wrapping of the θ direction. Once in cylindrical coordinates, it must be considered that 0º is equivalent to 360º. Using a modified search for conditioning data that wraps in the θ direction, realizations are generated. Specifically, the proposed methodology is to: • Remove trends in the data, such as a decreasing pipe radius with depth; • Establish statistical parameters for detailed modelling, including a representative histogram, uncertainty in that histogram and a variogram quantifying the irregularity of the pipe; • Simulate multiple realizations of the pipe geometry in cylindrical coordinates using SGS; • Calculate the volume of the pipe and associated uncertainty from the realizations.

G E O L O G Y

A significant source of uncertainty in diamond resources is the volume of kimberlite pipes. Often, all material within the pipe is mined as ore, leaving the actual geometry of the pipe as the largest source of uncertainty. It is desirable to use stochastic techniques, rather than deterministic methods, to assess the pipe geometry because stochastic techniques generate multiple realizations that are reproducible and can be used to quantify uncertainty in pipe geometry. The proposed methodology uses sequential Gaussian simulation (SGS) of pierce points interpreted from drill holes through a kimberlite pipe. Kimberlite pipes are approximately cylindrical in shape; therefore, the data are transformed to cylindrical coordinates to facilitate the simulation of pipe geometry. Rather than using xyz coordinates to define the pierce points, z, θ and the pipe radius are used. In cylindrical coordinates the radius variable can be simulated in z-θ space to generate multiple realizations of the pipe volume. Uncertainty in the volume of ore can then be evaluated. This methodology is demonstrated with a data set from a kimberlite pipe at BHP Billiton’s EKATI diamond mine.

Modelled kimberlite pipe with pierce point data shown as grey points.

By means of a case study, it was found that the major source of uncertainty in the deposit is in the input statistical parameters. SGS can effectively capture uncertainty in prediction at unsampled locations, but it does not consider that the actual input histogram (the data) also contains uncertainty. The spatial bootstrap is presented to consider the uncertainty in the input histogram. Multiple histograms are generated and used in SGS to capture this parameter uncertainty in the input histogram. Using the proposed methodology, the uncertainty in the geometry of a kimberlite pipe can be quantified. A number of areas of future work arise: (1) inherent secondary data could be used to better model the pipe geometry; (2) wrapping of the coordinates in the x and y directions has also been implemented with the intention of using a similar methodology to model a spherical-shaped deposit in spherical coordinates; and (3) this methodology could be used in 3-D (z-θ -r space) to generate a locally varying mean model for diamond grade, which could generate a trend in either the z, θ, or r directions. J.B. Boisvert, Center for Computational Geostatistics, Department of Civil and Environmental Engineering, University of Alberta, Edmonton, Alberta, P. Oshust, BHP Billiton Diamonds Inc., Kelowna, British Columbia, and C.V. Deutsch, Center for Computational Geostatistics, Department of Civil and Environmental Engineering, University of Alberta, Edmonton, Alberta December December2008 2008/ /January January2009 2009| | 111 111

executive summaries

I N N O V A T I V E

M I N I N G

T E C H N O L O G Y

An agent-based framework for open pit mine planning

Long-term production scheduling and sequencing are the critical factors in gaining the economic objectives in surface mining. Determination of optimal production schedules for open pit mines require complex modeling and computational tasks. A realistic model should incorporate mathematical rigors, technical, and economic constraints. In order to find out the sequence of extraction in a predetermined final pit, the models must be able to deal with the limitation of computing resources, time and space. The extensive search domain for production scheduling of a real size mine makes operations research methods virtually impossible to implement. The open pit long-term planning problem is a dynamic uncertain system with a number of underlying stochastic variables, which are not addressed in the current mine planning algorithms. This paper reviews the development of an agent-based framework for open pit mine planning. The study is a hybrid research work comprising development of an agent-based theoretical framework for large open pit operations, and implementation of the algorithms. The long-term mine planning problem is modelled as a dynamic decision network. The mine production scheduling is formalized as a reinforcement learning problem. The intelligent agent learns the optimal long-term plan by interaction with the block model. The interaction of the reinforcement learning entities: the agent and the block model are modelled by means of stochastic simulation. The simulator captures the open pit layout expansion dynamics over the mine life. The agent employs Qlearning algorithm to maximize the net present value of the mining operation. The developed algorithms of intelligent open pit production simulator, IOPS, are implemented in JavaÂŽ and MATLABÂŽ.

A case study of an iron ore deposit was carried out to verify and validate IOPS models. The optimized pit limits were designed using Lerchs-Grossmanâ&#x20AC;&#x2122;s algorithm. IOPS annual production schedule was compared to the Milawa production scheduler results, a program widely used in industry. The optimized final pit limits show a total amount of 391 million tonnes of material consisting of 209 million tonnes of ore and 182 million tonnes of waste. The Milawa scheduler yielded an NPV of $430 million over a 21-year mine life at a discount rate of 10% per annum. The IOPS scheduler yielded an NPV of $438 million under the same circumstances and over the same mine life after 3,000 iterations of simulation. The suggested mining starting point of the IOPS schedule was located inside the smallest pit generated by Milawa. The analyses and comparisons of the results demonstrate that the new planning framework has the potential to substantially improve the expected net present value of mining investments. The intelligent agent framework provides a powerful basis for addressing the real size open pit mine planning problem. Further focused research is required to develop and test the models based on intelligent agents to include more critical mine planning variables such as: optimized cut-off grades, constant annual mill feed, blending parameters, and stockpile constraints into the intelligent mine planning framework. Stochastic simulation as one of the major entities of the developed models has the ability to address the random field and dynamic processes involved in mine planning. The intelligent agent framework has the capability to be used for the optimal integration of mining and mineral processing systems, and development of a framework to quantify uncertainty relevant to mine planning and engineering design.

H. Askari-Nasab, School of Mining and Petroleum Engineering, Department of Civil and Environmental Engineering, University of Alberta, Edmonton, Alberta, and K. Awuah-Offei, Department of Mining and Nuclear Engineering, Missouri University of Science and Technology (formerly, University of Missouri-Rolla), Rolla, Missouri 112 | CIM Magazine | Vol. 3, No. 8

emg abstracts

Exploration and Mining Geology Journal Volume 17—Numbers 3 and 4 Quality Control of Assay Data: A Review of Procedures for Measuring and Monitoring Precision and Accuracy M. Abzalov, Rio Tinto Exploration, Belmont, Australia Control of analytical data quality is usually referred to in the mining industry as Quality Assurance and Quality Control (QAQC), and involves the monitoring of sample quality and the quantification of analytical accuracy and precision. QAQC procedures normally involve using sample duplicates and specially prepared standards whose grade is known. Numerous case studies indicate that reliable control of sample precision is achieved by using approximately 5% to 10% of field duplicates and 3% to 5% of pulp duplicates. These duplicate samples should be prepared and analyzed in the primary laboratory. Bias in the analytical results can be identified by inclusion of 3% to 5% of the standard in each sample batch. Several different standards are used, with values spanning the practical range of grades in the actual samples. A blank (a sample in which the concentration of metal of interest is below detection limit) should also be included. Standard samples alone cannot identify biases introduced during sample preparation, and, therefore, approximately 5% of the duplicate samples (coarse rejects and pulp) should be processed and assayed at another, external, reputable laboratory. This paper discusses techniques used for estimation of errors in precision and accuracy, and overviews diagnostic tools. It is shown that one of the most commonly used methods, the Thompson-Howarth technique, produces consistently lower results than other methods. These results reflect the nature of this method, which relies on the assumption of a normally distributed error, and thus produces biased results when errors have a skewed distribution. This study concurs with the suggestion of Stanley and Lawie (2007) to use the average coefficient of variation [CVAVR(1%)] as the universal measure of relative precision error in mine geology applications. Based on case studies, an acceptable level of sample precision is proposed for several different deposit types.

Geology and Mineralogy of the Hercynian Koudiat Aïcha Polymetallic (Zn-Pb-Cu) Massive Sulfide Deposit, Central Jebilet, Morocco F. Lotfi, Faculté des Sciences Semlalia, Université Cadi Ayyad de Marrakech, Marrakech, Morocco; A. Belkabir, Faculté des Sciences et Techniques, Laboratoire Géoressources, Université Cadi Ayyad de Marrakech, Marrakech, Morocco; A.C. Brown, Department of Civil, Geological and Mining Engineering, École Polytechnique de Montréal, Montreal, Quebec; E. Marcoux, Institut des Sciences de la Terre d’Orléans, Université d’Orléans, Orléans, France; S. Brunet and L. Maacha, Reminex-MANAGEM, Marrakech, Morocco Koudiat Aïcha is a small Zn-Pb-Cu deposit, enclosed in the Visean Sarhlef volcano-sedimentary series of the Moroccan Hercynian Jebilet massif. Base-metal mineralization is located between a basal unit consisting of black argillite with arenite intercalations, and an upper unit composed of black argillite with locally fossiliferous calcareous units towards the top. Paraconcordant gabbro sills are present in both the upper and basal units, and the enclosing strata. Three successive phases of deformation linked to regional deformation overprint the volcano-sedimentary rocks and gabbros, as well as the sulfide mineralization. The mineral deposit includes several lenses of massive to semi-massive pyrrhotite, 1 to 20 m thick, with a large halo of disseminated sulfide veinlets and sulfide nodules, within a zone of intense chlorite alteration in the footwall. The ore mineralogy consists of massive to semi-massive pyrrhotite with lesser amounts of sphalerite, chalcopyrite, arsenopyrite, galena, pyrite and stannite. Lead isotope results suggest that the metals of the Koudiat Aïcha deposit are derived from the volcanosedimentary host-rocks. Sulfur isotopes also indicate a volcano-sedimentary origin, with bacterial reduction of sulfate. The conditions for sulfide metamorphic equilibration range from 250° to 330°C. Based on these geological and minerExcerpts taken from abstracts in EMG, alogical features, a Besshi-type model seems appropriate for the Vol. 17, Numbers 3 and 4. genesis of the Koudiat Aïcha mineralization. Subscribe www.cim.org/geosoc/indexEMG.cfm

December 2008 / January 2008 | 113

cmq abstracts

Canadian Metallurgical Quarterly Volume 47—Number 2

Oxygen Potential Values to Produce Compacted Graphite Cast Iron O. Elmabrouk, A. Kalkanli, E. Selçuk and A. Çetin, Department of Metallurgical and Materials Engineering, Middle East Technical University, Ankara, Turkey Compacted graphite cast iron (CGI) is a potential alternative to lightweight alloys. It is accepted that CGI can effectively reduce the automobile total weight by virtue of its high strength and its high thermal conductivity giving an opportunity to designers to design components with thinner sections. However, the successful casting process to produce this material requires detailed information for the prediction of microstructure and accurate casting process knowledge. In this paper, compacted graphite with four different cooling rates and with different Mg/S ratios ranging from 2/3 to 7/1 has been produced by using a plunger technique. The oxygen potential of all ranges has been measured by using a special oxygen potential measuring device equipped with a vibrating oxygen measurement sensor. The relationship between the oxygen potential and the graphite shape was investigated and the oxygen potential range to produce compacted graphite iron was established. It has been demonstrated that the oxygen potential measurement is a valuable method to evaluate the potential of cast iron melts to produce compacted graphite iron. Effect of the Operating Conditions of Air-Mist Nozzles on the Thermal Evolution of Continuously Cast Thin Slabs J.J. Montes R., A.H. Castillejos E., F.A. Acosta G., Centro de Investigación y Estudios Avanzados del Instituto Politécnico Nacional, Unidad Saltillo, Coahuila, Mexico; E.P. Gutiérrez M., Rensselaer Polytechnic Institute, Hartford, Connecticut; and M.A. Herrera G., Ternium Mexico, San Nicolás de los Garza, Mexico Commonly, the secondary cooling provided by air-mist nozzles is regulated by varying the water flow rate while maintaining constant air nozzle pressure. However, these cooling elements are more flexible since, as demonstrated in laboratory experiments, an increase in the air pressure, particularly from a typical value of 200 kPa to 250-400 kPa, causes a considerable increase in the boiling heat flux for a given impact water flux. Based on this finding, previous empirical correlations for the heat flux generated by air-mist nozzles impinging on hot surfaces were extended to include the effect of the air pressure. The correlations were then implemented into a transient 2-D heat conduction model to investigate the influence of new cooling conditions on the surface temperature and metallurgical length of the strand and ultimately on the possibility of increasing the casting speed, i.e., productivity. The model highlighted the potential of the new conditions and this was confirmed by plant results. Additional support to the usefulness of the correlations emerged from the accurate predictions that the model can achieve regarding the temperature evolution of the strand during transient operating conditions, such as during changes in casting speed, slab width, casting temperature and/or steel grade. The fact that the correlations did not need calibration emphasizes the importance of the appropriate characterization of spray and airmist cooling to develop robust, flexible and accurate virtual casting machines for exploring and controlling the operation of real ones.

114 | CIM Magazine | Vol. 3, No. 8

cmq abstracts

Liquid Film Migration in a Cu-2.65 at% Cd Alloy C.K. Yadav and S.P. Gupta, Department of Materials and Metallurgical Engineering, Indian Institute of Technology, Kanpur, India Liquid film migration has been studied in a Cu-2.65 at% Cd alloy in the temperature range 516 to 627 °C. The microstructure developed during migration and the migration distance was recorded as a function of time and temperature. The rate of migration of the liquid film was determined at each transformation temperature during both down-quenching and up-quenching experiments. Experiments were also carried out to determine the composition of the leading and trailing crystals across the liquid film and were used to calculate the coherency strain energy. The total chemical free energy change was calculated at each transformation temperature using the regular solution model to represent rG for the liquid and solid solutions. The diffusion coefficients were calculated from a number of parameters such as composition of the solid and liquid solutions, rate of migration, thickness and radius of the liquid film, modulus of elasticity, misfit parameter and the activity coefficients of the liquid and solid solutions. A Study on the Microstructural Changes of Cr-Modified Aluminide Coatings on a Nickel-Based Superalloy during Hot Corrosion S. Rastegari, H. Arabi, M.R. Aboutalebi and A. Eslami, Advanced Materials Research Center, Department of Metallurgy and Materials Science, Iran University of Science and Technology, Tehran, Iran Microstructural changes of chromium-modified aluminide coating on IN-738LC superalloy under hot corrosion conditions were studied in this research. Samples were coated using two separate pack cementation processes, i.e. chromizing and aluminizing. Hot corrosion resistance of the coatings was evaluated using the furnace test method. For this purpose the specimens were coated with a thin layer of Na2SO4-5 wt% NaCl and then oxidized in air for a period of 1000 hours at 850°C. The results of the hot corrosion test indicated that lower chromium content in the chromizing pack powder (C10A coating) resulted in the formation of a uniform adhesive surface oxide scale, containing mainly Al2O3. However, the C20A coating with higher chromium content exhibited Cr2O3 as a major surface oxide. The maximum depth of sulphur penetration in the C10A coating was 60 µm, which was very low in comparison with that of the C20A coating (i.e. 350 µm). In addition, the distribution of elements and precipitates within the coatings and the substrate before and after the hot corrosion tests was analyzed. From this investigation, some suggestions were made for better hot corrosion resistance of the coatings.

Excerpts taken from abstracts in CMQ, Vol. 47, No. 2. Subscribe — www.cmq-online.ca

December 2008 / January 2009 | 115

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November 2008 | 117

voices from industry

As the world turns, let’s hang on to our greatest assets by Jean Vavrek, CIM Executive Director

eversing society’s perception that our industry is to be forever caught in a series of boom and bust cycles has been high on the industry’s list of priorities for the last few years now. Many have been working diligently to inform youth, teachers, parents and the media that our sector offers long and stable employment. Part of that message has also been that these careers are available not only for the current demographic of professionals in mining-specific occupations, but for all people — including women, new Canadians and First Nations — in all occupations, all trades and in all areas of the organization, including management. After all of these efforts, we now we find ourselves in the middle of one of the worst economic downturns ever, triggered by a financial crisis, the likes of which few can recall experiencing. And talk of closures and layoffs are everywhere. So, where does that leave us? Can we afford to let go of new hires? Are we going to leave future grads without jobs and students without summer employment or work terms? And just what effects will that have on the industry’s reputation and to the message of stability that we have all been working so hard to send? Yes, all sectors are being affected. However, we should keep in mind that it is widely believed that the demand for metals, minerals and energy will continue to grow, and that our industry is likely to be one of the first ones to rebound. Being among the most favoured jurisdictions for mining in the world, Canada is poised to be at the forefront of the recovery. That standing, along with the opportunity to strengthen the position of the TSX once financial faucets flow again, should give us strong incentives to find creative ways to weather the storm. It won’t be easy. It will require flexibility, solidarity, focus, discipline and close monitoring, perhaps to degrees we have never had to call upon before. It will also necessitate working

118 | CIM Magazine | Vol. 3, No. 8

together with HR managers, universities and provincial, territorial and federal partners across the country. But the rewards will be immense. Imagine, as the world turns, what better ace to have in our hand than this talented pool of current and future employees. If we stand by them today, they will become our best ambassadors for tomorrow. Theirs will be the most convincing testimonial, confirming our commitment to change our world from within. As the world of mining ramps up again, words of our actions in Canada can only help in further attracting talent to our universities, companies and our research and governmental institutions. Doing the right thing now will help us better position the sector around the world and secure Canada’s global leadership. At our recent November council meeting, CIM decided to do something to address the fears and concerns that are permeating the industry. As an important starting point, we will immediately begin looking to work with other industry partners to take the pulse of our sector’s labour situation and to identify areas of concern, as well as opportunities for action. Individuals at all organizational levels have deployed a great deal of energy, creativity, passion and determination to make solid headway in changing public perceptions about our sector across Canada. Such change takes decades to instill, but can be reversed very rapidly. We now have an opportunity to come together as an industry, muster new resources and resolve, look out for one another and discover new ways to face the challenge, even if it seems insurmountable. At this pivotal juncture, we can do something that will inspire our present employees, future workers and society in general. We can actually use this less than opportune time to improve the reputation of the sector. Once current realities right themselves, we can emerge much stronger and better armed to face the next global event that might blindside us. But maybe next time, with new lessons learned from today’s experiences and a committed pool of talented employees, we will be better equipped to see it coming and heed it off. CIM

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Dec 2008/Jan 2009 • déc 2008/jan 2009 • www.cim.org