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IN THIS ISSUE CIM MAGAZINE A UGUST/SEPTEMBER | AOÛT/SEPTEMBRE 2015

cover story Build muscle, burn fat Canada’s oil sands giants are under competitive pressure and must innovate in order to stay in the game By Graham Chandler

56 Neighbourhood watch

Porcupine Gold Mines’ Hollinger project sits next to Timmins and under the microscope By Christopher Pollon

61 Automated supervision

From vehicle queuing to cloud computing, the capabilities of fleet management systems have expanded significantly in the information age By Eavan Moore

August/September • Août/Septembre 2015 | 5

contenu francophone

46 8 10

Editor’s letter President’s notes

The best in new technology

tools of the trade news 14 15 18 24

Compiled by Michael Yang

Abitibi Royalties uses the Internet to connect with struggling juniors

40 44 46

by Michael Yang

Briefs Survey attempts to capture the effects of recent “comply or explain” legislation by Alexandra Lopez-Pacheco

New legislation requires public disclosure of payments to governments

columns

by Katelyn Spidle

open pit mining

Crafting the next generation of NSR agreements in Quebec

by Dimitri Maniatis and Patrick Naccache

by Paul Bankes

Implementation of 2014 CIM Definition Standards Forget high-tech, think right-tech by Douglas Morrison

BHP Billiton Iron Ore uses geochemistry to make its case for steeper slope design

by Eavan Moore

by Chris Balcom

by Antoine Dion-Ortega

Q&A with Greg Lilleyman, the head of Rio Tinto’s cutting edge research

travel

par Graham Chandler

66 66 67

by Eavan Moore

Elko, Nevada

mining lore 82

by Damon Hodge

An innovative processing technique at the Bitumount plant sets the stage for future oil sands operations

Technologie et innovation La force de l’industrie pétrolière Les géants du secteur des sables bitumineux sont soumis à une forte pression de la concurrence et doivent innover pour rester dans la partie

Barrick and Deloitte rethinking the approach to energy SNC-Lavalin and Societe des Mines d’Ity (SMI) working out the future of one of Cote d’Ivoire’s oldest mines

article de fond

68 75

Lettre de l’éditeur Mot du président Abitibi Royalties se sert de l’Internet pour établir le contact avec des petites sociétés minières en difficulté par Michael Yang

Les actualités en bref Surveillance de quartier

Le projet Hollinger de Porcupine Gold Mines, à proximité de Timmins, est surveillé de près par Christopher Pollon

by Correy Baldwin

La version française intégrale du CIM Magazine est disponible en ligne : magazine.CIM.org/fr-CA

6 | CIM Magazine | Vol. 10, No. 5

WE’RE THERE.

WHEREVER THERE’S MINING, THERE ARE CHA C LLE N G ES.

T E L L US YOUR MINING CHALLENGE: C AT AT.C O M / C H ALL E N GE S

© 2015 C aterpillar. A ll Rights Reser ved. C AT, C AT ERPIL L A R , BUILT F OR I T, their respective logos, “C aterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product i d e n t i t y u s e d h e r e i n , a r e t r a d e m a r k s o f C a te r p i l l a r a n d m a y n o t b e u s e d w i t h o u t p e r m i s s i o n .

Lowering costs. Keeping people safe. Working more ef ficiently. Mining is a challenging business, and whether you have one piece of Cat ® equipment or 10 0, we’re there to help you manage it. We’re a true business par tner who shares your goal of mining excellence—and we have the knowledge, produc ts, technologies and solutions to help you get there.

Editor-in-chief Ryan Bergen, rbergen@cim.org Executive editor Angela Hamlyn, ahamlyn@cim.org Managing editor Andrea Nichiporuk, anichiporuk@cim.org

editor’s letter

Translations Karen Rolland Published 8 times a year by: Canadian Institute of Mining, Metallurgy and Petroleum 1250 – 3500 de Maisonneuve Blvd. West Westmount, QC H3Z 3C1 Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; magazine@cim.org Advertising sales Dovetail Communications Inc. Tel.: 905.886.6640; Fax: 905.886.6615; www.dvtail.com Senior Account Executives Janet Jeffery, jjeffery@dvtail.com, 905.707.3529 Neal Young, nyoung@dvtail.com, 905.707.3525 Account Manager Mark Spasaro, mspasaro@dvtail.com, 905.707.3523 For Quebec: Info-Industriel Inc. Senior Account Executive Yvan Gauthier, ygauthier@cim.org, 514.576.5869

20 1

Subscriptions Included in CIM membership ($187); Non-members (Canada): $270/yr (AB, BC, MB, NT, NU, SK add $13.50 GST; NB, NL, ON add $35.10 HST; QC add $40.40 GST + PST; PE add $37.80 HST; NS add $40.50 HST); Non-members (USA & International): US$290/yr; Single copy: $25.

Finalist

Layout and design by Clò Communications Inc. www.clocommunications.com 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

Be st

Illustration by Katy Lemay

8 | CIM Magazine | Vol. 10, No. 5

eth R. Wilson enn Aw 5K

s ard

Ryan Bergen, Editor-in-chief editor@cim.org @Ryan_CIM_Mag

Editorial advisory board Alicia Ferdinand, Garth Kirkham, Vic Pakalnis, Steve Rusk, Nathan Stubina

ia ed

he mining and in-situ operations steaming bitumen out of the oil sands deposits are this country’s most impressive monuments to industrial innovation. The deposits themselves were easy enough to find. We have known about some of them for centuries. The most important discoveries came in the laboratories and field tests after years of hard work and valiant failures, as explored in this issue’s Mining Lore (pg. 82) on the development of hot water extraction. Oil sands researcher Karl Clark’s process unlocked the oil sands just below the muskeg in northern Alberta, but only after decades of work ironing out the details that would make mining those enormous deposits economically viable. The industry struck an even bigger billions-of-barrels bonanza when horizontal drilling technology unlocked the potential of steam-assisted gravity drainage (SAGD). Not long after the first SAGD wells at Cenovus’s Foster Creek began paying out, the magnitude of the country’s oil reserves shot through the roof. These advances mixed with bubbling oil prices made for a good run. That run is now over and the focus on growth has shifted to productivity. The CFOs of some of the largest oil producers in Alberta echoed that message at an energy executives conference in New York in June when we began research for our annual oil sands feature, which became “Build muscle, burn fat” by Graham Chandler (pg. 50). “We need to bring technology to the party, and so do contractors,” observed Paul Masschelin, Imperial Oil’s vice-president of finance and administration, at the event. More efficient labour, reduced water consumption and the use of solvent extraction techniques make up just some of the cocktail chatter about productivity. If the last few years have shown the impressive size of the energy industry, the next few will depend on its agility and ability to develop, apply and refine the ideas that can win back some of those lost margins and public confidence that it can be an environmental steward. History is on its side.

adian Busines sM Can in

Innovation by the barrel

Section editors Peter Braul, pbraul@cim.org Tom DiNardo, tdinardo@cim.org Junior section editor Kelsey Rolfe, krolfe@cim.org Copy editor/Communications coordinator Zoë Koulouris, zkoulouris@cim.org Web content editor Maria Olaguera, molaguera@cim.org Contributing editor Eavan Moore, emoore@cim.org Editorial intern Michael Yang, myang@cim.org Digitization technician Marie-Ève Lapierre, melapierre@cim.org Contributors Chris Balcom, Correy Baldwin, Paul Bankes, Graham Chandler, Antoine Dion-Ortega, Damon Hodge, Dimitri Maniatis, Douglas Morrison, Patrick Naccache, Alexandra Lopez-Pacheco, Christopher Pollon, Katelyn Spidle

president’s notes

Hang tough. My dad often said this when I was a kid. He never offered an explanation, although my impression was that he meant life always presents challenges, but, if you persevere, you will succeed. As I read the industry news and talk to my peers, my father’s words are top of mind. Today, we are at a low point of the market cycle and that low is dragging on, which means the skills and experience of many good people are not being put to good use. What can those of us, whose work has dried up, do with all of our extra time? As Theodore Roosevelt famously urged, “Get action, seize the moment.” Our situation presents us with the rare opportunity to rethink, re-engineer, reset and reload. Now is the time to restructure the way projects are financed with a sustainable model that ensures all stakeholders a higher likelihood for return-on-investment and addresses the structural finance and cost issues of the junior mining space. Now is the time to examine corporate social responsibility at earlier stages of projects and lay solid foundations for the future. Now is the time to mentor or train someone. While it is a difficult prospect to train your replacement when you are not ready to be replaced, there will inevitably be a significant scarcity and subsequent huge demand for qualified people. You will be doing your future self a favour. And now is the opportunity to commit your time to CIM, whether as a peer reviewer, an expert voice at a technical session or through the many events and projects the CIM community is developing. Once the dust settles, those who invested in themselves during this downturn will be the leaders when things pick up. Captains become Generals quickly in wartime, so do as much professional development as you can, take courses, publish and attend. Invest in skills and productivity to make you more marketable. Invest in yourself, friends, family and partnerships. Work out and get healthy. In short: hang tough.

Garth Kirkham CIM President @GarthCIMPrez

10 | CIM Magazine | Vol. 10, No. 5

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The machines that move and process ore, such as conveyor belts, crushers and pumps, are massive but rely on some of their smallest parts – gears – to function. Operations place incredible demands on these gears to produce the torque necessary to maintain output and ensure steady throughput. With that in mind, Santasalo recently released its new Quatro+ line of planetary gear units, which boosts the maximum torque output over the original Quatro series by 30 per cent without modifying the size and weight of the unit. “We managed to achieve this by optimizing the internal design space in combination with a new bearing concept and advanced planetary gear design,” said Andreas Enting, the group’s head of design and development. The new bearing lasts 200 per cent longer than the original and the unit’s modular construction means the unit is highly customizable and easy to maintain. The new line can directly replace both Quatro and competitor units in existing drives.

Compiled by Michael Yang 12 | CIM Magazine | Vol. 10, No. 5

Better core samples, smaller footprint Courtesy of Chevron

Fleet maintenance can cost a pretty penny and, many times, it is the engines that need the most attention. For haul trucks or load-haul-dump vehicles, which have frequent stop-and-go engine cycles and heavy payloads, operating hours put an incredible strain on the engine’s individual moving parts. According to Harold Hazen, a spokesperson for Chevron, the heat generated in these heavy-duty engines causes lesser lubricating oils to oxidize and break down faster, resulting in increased viscosity and damaging acids and deposits. Chevron’s new Delo 400 SD SAE 15W-30 engine oil is formulated using a patentpending combination of additive chemicals that provides a high resistance to oxidization at all operating temperatures. Using the oil to keep components such as the valve train, piston crown and engine rings clean and lubricated directly translates to better engine performance, lower downtime and decreased maintenance costs. Hazen also noted that the oil helps heavy duty vehicles achieve better fuel economy: “Companies that want to reduce idle time do not have to worry about damaging their engines with frequent shutdowns and restarts.”

Courtesy of Boart Longyear

Smooth operator

Exploratory drilling of remote and sensitive soft-ground target can be costly and troublesome, especially with bulky conventional rigs. To provide a compact solution for difficult terrain, Boart Longyear recently released its new LS250 MiniSonic drill rig. Boart Longyear spokesperson Amanda Nielsen said the rig is mounted on wide, 600-millimetre rubber tracks that apply low pressure to the ground, fits on small drill pads and trailers, and needs little to no supporting equipment. The sonic drill head is capable of drilling depths up to 78 metres faster and more accurately than conventional drilling rigs, while producing less waste, straighter holes and undisturbed core samples. The rig also features an airbag system mounted between the sonic head and carriage that redirects all excess vibration back down the hole, protecting the body from premature wear and tear and increasing drill productivity. “The LS250 combines proven technology, as the MiniSonic head has consistently performed in the field on some of the most technical and difficult projects, with the size to provide unmatched versatility and reliability,” said Nielsen.

Courtesy of Santasalo

Tenacious torque

Survey examines effects of recent “comply or explain” legislation

Restricted reopening at Mount Polley

Rio Tinto begins shipments from new Kitimat smelter

New legislation requires public disclosure of payments to governments

News

Online lifeline Abitibi Royalties uses the Internet to connect with struggling juniors

One fledgling mining royalty company is getting creative in its search for new investment opportunities. Abitibi Royalties launched “The Royalty Search” in early June, an online platform where mining companies in need of financing can easily submit geological data on their projects for consideration. Abitibi promises to review the submission and come to a decision within 48 hours on whether or not it will back the project, usually by covering the full cost of claim fees and taxes in return for a permanent net smelter royalty. According to company president Ian Ball, the online platform is the first of its kind in the mining royalty industry, and it allows Abitibi to connect with quality projects that have been overlooked in the junior exploration market for a low cost. Claim fees and other reoccurring overhead expenses can range from $10,000 to $50,000 every couple of years, which is often a challenge for cash-strapped junior explorers, said Ball. “And going out and finding quality projects that have expiring claims, and little capital to renew those claims, can be a really time-consuming task,” he explained. “That’s the beauty of this website – those quality projects are now coming to us.” Ivars Azis, president of privately held junior explorer Tamarack Gold 14 | CIM Magazine | Vol. 10, No. 5

Courtesy of Abitibi Royalties

By Michael Yang

Ian Ball, president of Abitibi Royalties

Resources, indicated that the quick and user-friendly application process helps the platform engage an untapped market that investors have traditionally steered well clear of. “It took me only half an hour to complete,” he said. “It’s a breath of fresh air in an industry that’s become rather stale.”

Smart plays Abitibi is one of the smallest players in the mining royalty playing field,

where giants like Franco-Nevada and Royal Gold often get first dibs on flagship investment opportunities. But with a $35-million bankroll to play with, Ball said he thinks that taking a chance on 20 to 30 projects with merit, while mitigating risks as much as possible, will be enough to make the portfolio a significant winner. To reduce the inherent risk of investing in early-stage exploration properties, Ball is only interested in those that are near existing, established mines and have proven evidence of mineralization through prior exploration. “We aren’t necessarily just looking for properties that will end up in producing mines,” he said. “We also take other aspects into account such as if a nearby mine might need to purchase an adjacent property for a new facility or to expand its current mine.” Case in point is Golden Valley Mines’ Smokehead prospect located just one kilometre southwest of the Canadian Malartic mine in northwestern Quebec. In return for paying the annual maintenance fees, amounting to $5,000 a year, Abitibi will receive a permanent two per cent net smelter royalty. The company also bought the rights to 15 per cent of the total sale proceeds, allowing it to recoup its full investment if the property is eventually sold.

news â&#x20AC;&#x153;We looked at the Smokehead prospect and realized that the nearby mine will need to expand their tailings facility, which is less than a kilometre away, in the near future,â&#x20AC;? said Ball. â&#x20AC;&#x153;While I canâ&#x20AC;&#x2122;t say for sure if they will purchase Golden Valleyâ&#x20AC;&#x2122;s property, itâ&#x20AC;&#x2122;s a lot easier to expand a tailings facility than build a whole new one, so thatâ&#x20AC;&#x2122;s an area where we are willing to take that chance.â&#x20AC;?

Golden idea The inspiration for the website came in part from the famous â&#x20AC;&#x153;Goldcorp Challengeâ&#x20AC;? in 2002, when the Vancouver-based gold miner released all of the geological data for its Red Lake project online and invited the public to provide advice on drilling targets. â&#x20AC;&#x153;It was really the first time the industry had seen a creative way of doing business like that, and it worked out beautifully,â&#x20AC;? said Ball. The challenge directly led to key discoveries that have brought in more than $6 billion to date following the participation of nearly 1,000 virtual prospectors. Ball also realized the importance of the website after targeting a promising, but bankrupt, gold project in Nevada. However, by the time he offered to pay the claim fees, the property had already been dropped and staked by someone else. â&#x20AC;&#x153;It just didnâ&#x20AC;&#x2122;t make sense for us to keep chasing situations like that,â&#x20AC;? he explained. For Tamarackâ&#x20AC;&#x2122;s Azis, who holds claims on two properties under Abitibiâ&#x20AC;&#x2122;s sponsorship, the platform is beneficial for all parties involved. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s great to have someone recognize that there is a lot of potential in junior exploration, and be willing to back that up,â&#x20AC;? he said. â&#x20AC;&#x153;Now is the time to capitalize on overlooked and undervalued projects, and the way Ian is doing business sets both sides up to do so.â&#x20AC;? As of mid-July, Abitibi Royalties had completed four transactions from around 50 submissions, with three more projects in various stages of binding agreements. Ball said the focus will be mainly on gold projects in North America. CIM

Sudbury to host safety conference in October The International Conference of Safety in Mines Research Institutes (ICSMRI) is coming to Canada this fall for the first time in its 84-year history. The 36th edition of the conference is set to take place in Sudbury from Oct. 25 to 27 and will feature extensive technical sessions and a plenary that covers a wide variety of topics in the mining safety world â&#x20AC;&#x201C; from research to new approaches and technologies. â&#x20AC;&#x153;This yearâ&#x20AC;&#x2122;s theme is challenges and opportunities,â&#x20AC;? said conference chair Vic Pakalnis, president and CEO of MIRARCO. â&#x20AC;&#x153;At the end of the day, the conference will really be about identifying areas where we are lacking, and finding ways to disseminate information we have globally and more effectively.â&#x20AC;? One of the sessions he highlighted will outline a potential program to build a global mining safety network, presented by those spearheading the initiative including University of Albertaâ&#x20AC;&#x2122;s Gord Winkel and Jim Joy from the International Council on Mining and Metals. The proposed network would focus on connecting miners that are interested in safety and research around the world, especially in countries that may lag behind in the field. â&#x20AC;&#x153;It was important for us that Canada gets its due turn to host the symposium,â&#x20AC;? said Pakalnis, pointing out that it is one of the safest jurisdictions for miners to work in and a world leader in the mining industry. To register for the event, visit icsmri.cim.org. â&#x20AC;&#x201C; Michael Yang

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European Union launches Real Time Mining project A project to develop a real-time monitoring framework for the mining process, led by a consortium of 13 European partners from five countries, began in mid-April. The venture is “a control platform for exploiting geologically difficult deposits,” according to Jörg Benndorf, an assistant professor at Delft University of Technology in the Netherlands and one of the project leads. The platform will use existing sensor technology to gather material characterization and georeference extraction data – such as machine performance, ore size distribution, geochemistry and mineralogy – using positioning systems. This data will be wirelessly transferred to a “central data integration and visualization platform,” Benndorf said. The €6.5-million (C$9.25 million) Real Time Mining project is funded

primarily by Horizon 2020, an EU program that finances research and innovation, and led by the Resource Engineering Section at Delft. One of the major aims is to give mining companies more knowledge to make better production control decisions and increase resource efficiency. “We’ll try to integrate [that] data or feed it back into the resource model to continuously update in real time,” Benndorf said, “and having a real time model available, we want to optimize the production control decisions.” The project is also expected to help companies eliminate waste material early in the logistical chain, which Benndorf said will reduce the environmental impact because “we won’t [need] so much material to get the same amount of product.” Real Time Mining will develop and integrate technologies that have until now only been lab-tested. “The big push is to close the gap between theory

and practice to offer smart solutions to the industry ready for full-scale application,” said Benndorf. These include automated sensor-based material characterization, online performance measurements of machines, underground navigation and positioning, underground mining system simulation, and state-of-the-art updating techniques for resource models. The consortium will be assisted by an international external expert advisory board, which is led by Roussos Dimitrakopoulos, a mining engineering professor at McGill University. A prototype of Real Time Mining is expected to be completed for 2019, and will go through a two-year phase of testing and preparation for market entry before it launches in 2021. The consortium will test the prototype at a Delft-owned lead-zinc mine in Freiberg, Germany, among several other mine sites throughout Europe. – Kelsey Rolfe

PROJECT PIPELINE Compiled by Katelyn Spidle and Michael Yang

Pretium Resources received a positive federal environmental assessment decision for its high-grade Brucejack gold project in northern British Columbia on July 31. The underground mine is expected to produce around 7.3 million ounces of gold over its 18year mine life. The company is still working to raise the US$747 million needed to construct the mine. The federal government handed Nemaska Lithium’s Whabouchi project a positive environmental assessment decision on July 30. The company expects to receive its provincial environmental permit from the Quebec government by the end of August, before moving to the construction phase. Nemaska intends to produce 3,250 tonnes of lithium carbonate per year over the project’s 26-year mine life. Whabouchi will consist of open pit and underground operations with Proven and Probable Reserves of 20 million tonnes and 7.3 million tonnes, respectively. Royal Nickel received a positive environmental assessment decision from the federal government for its Dumont project on July 30. The project has now been referred to Fisheries and Oceans Canada and Natural Resources Canada for the issuance of relevant permits. Royal Nickel expects construction to take place

16 | CIM Magazine | Vol. 10, No. 5

between early 2016 and late 2018, pending completion of financing. The company plans on raising nearly US$1 billion by the end of this year and anticipates initial capital costs will be US$1.2 billion. Once constructed, the open pit mine in Quebec’s Abitibi Region will be one of Canada’s largest nickel sulphide mines and the fifth largest in the world, milling about 105,000 tonnes per day at full production. Trevali started commissioning the mill at its Caribou polymetallic mine in northern New Brunswick on May 19. Using a phased commissioning plan, the mill began by processing zinc and has now turned its attention to the lead circuit. The Vancouver-based miner expects the mill to reach full capacity, processing 3,000 tonnes per day, by the end of the year. Goldcorp’s Éléonore mine, after producing its first gold last October, has reached commercial production, the company announced on April 1. The mine, located in the James Bay Region of Quebec, has a projected mine life of 15 to 20 years and its expected gold production for 2015 is between 290,000 and 330,000 ounces. Goldcorp hopes to ramp up Éléonore to full production by 2018, with annual output totalling 500,000 to 600,000 ounces.

news Oil sands pipeline ruptures

Courtesy of Nexen Energy

investigation into the breach is ongoing. The company has since shut Nexen Energy has traced down both the pipeline and its the time of a pipeline rupture Kinosis site, where the emulsion at one of its oil sands sites to a originated. Bitumen extracted at two-week period starting in Kinosis is piped to the Long late June, the company reLake plant for processing and vealed in July. upgrading. The spill at its Long Lake The pipeline was installed project, located 35 kilometres last year. Its computerized warnsouth of Fort McMurray, could ing system failed to detect the have occurred any time A rupture along Nexen Energy’s pipeline in northern Alberta spilled emulsion spill, which the company said it between June 29, when crews over an area of wetlands the size of two CFL football fields. is investigating. finished a cleaning, and July The incident occurred in an “They had equipment mobilized isolated area of Alberta; the nearest 15, the day a contractor discovered it. within the first few hours to start to town to the spill is 15 km away from the The rupture spilled five million build containment around the imlitres of emulsion – bitumen, sand and site. There is a small lake about 100 pacted area,” he said. produced water – over a 16,000metres from the site that is being moniThe regulator issued an environ- tored, although Nexen reported there is square-metre area of wetlands, the size mental protection order days after no visible sign of water contamination. of about two CFL football fields. Once aware of the spill, Nexen shut Nexen stopped the leak, directing About 130 workers are on site to Nexen to develop plans for water contain and vacuum the spill. It is in the line to stop any further leaking, body management, wildlife mitigation according to Riley Bender, a spokesperunclear how long the cleanup will take. son for the Alberta Energy Regulator. and site remediation. The regulator’s – K.R.

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Moving ahead. August/September • Août/Septembre 2015 | 17

Full disclosure Survey attempts to capture the effects of recent “comply or explain” legislation By Alexandra Lopez-Pacheco For the first time, most companies listed on Canadian exchanges were compelled last spring to either outline a policy for improving the gender imbalance on their boards of directors or explain why they were not making the effort. The impacts of the change are already evident, according to a recent report from Torys LLP. Entitled Women in the C-Suite: Can Securities Law Advance Gender Equality?, the survey reviewed 179 issuers including 31 mining companies that released proxy circulars by early May. Researchers at the law firm found that on average women represented only 10 per cent of the directors of the mining

EARLY INDICATORS ON DIVERSITY REPORTING Number of mining issuers reviewed in this study

Average percentage of female directors on boards of mining issuers

Number of mining issuers with a board gender diversity policy

Number of mining issuers with targets for women on the board

Rationale for not considering gender in board nominations, not having a diversity policy and/or not adopting targets

companies’ boards, although larger companies had closer to 15 per cent. Out of all issuers surveyed, 56 per cent had adopted formal policies addressing the representation of women on the board. According to the

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18 | CIM Magazine | Vol. 10, No. 5

Merit-based appointments

survey, “The vast majority of issuers that have policies appear to have adopted them between the 2014 and 2015 meeting seasons.” Rima Ramchandani, one of the authors of the report and co-head of Torys Capital

news Markets Practice, explained that more than 90 per cent of the sample group did not publish a disclosure policy in 2014. While she admitted this is not definitive evidence, Ramchandani said their analysis interpreted silence as a strong indicator that the issuer did not have a policy in the prior year. Of the miners surveyed, 68 per cent (21 companies) had established board gender diversity policies, but just 10 per cent (three companies) had set specific targets for women on boards. Roughly half the mining companies surveyed cited merit-based selections as the most common reason for gender not being considered in board nominations. â&#x20AC;&#x153;I understand why people focus on merit because we all like to think [...] that we evaluate people on objective criteria of qualifications, but anybody who understands the issues realizes itâ&#x20AC;&#x2122;s much more nuanced than that,â&#x20AC;? said Ramchandani. â&#x20AC;&#x153;Despite most peopleâ&#x20AC;&#x2122;s best efforts, there is unconscious bias and opportunities are often based on who you know. When you have chronic under-representation of women, whatâ&#x20AC;&#x2122;s implicit when you say you hire on merit is that women are not as qualified.â&#x20AC;? â&#x20AC;&#x153;Research has shown boards perform best when they have diversity,â&#x20AC;? noted Carole Turcotte, a partner at legal firm Dentons Canada, who was appointed to the board of exploration company LamĂŞlĂŠe Iron Ore Ltd. earlier this year. â&#x20AC;&#x153;I think they have to look at what they are missing on their board and try to look at women who have the expertise they are lacking.â&#x20AC;? Apart from regulatory changes, other initiatives have recently been launched to try to increase the number of women on boards. The non-profit International Women in Mining (WIM) Community kicked off a set of webinars in May, sponsored by PearTree Securities Inc., to target women who are familiar with the industry. The nine-session Women on Boards series is designed for women who have 10 or more years of professional experience and hope to join a board. It covers everything from governance education to development of useful career tools such as a business action plan and a board-ready resumĂŠ. The

series will remain on WIMâ&#x20AC;&#x2122;s website after the last session is completed next January. The entire series costs $330, although the option of paying for individual sessions is also available. â&#x20AC;&#x153;We wanted to create a program that was affordable for women and companies in mining, which these days donâ&#x20AC;&#x2122;t always have a lot of money,â&#x20AC;? said Bar-

bara Dischinger, director of the International WIM Community. â&#x20AC;&#x153;Our next step is to develop a database of board-ready women.â&#x20AC;? WIM is also considering ways to help mining companies ensure that their recruiting and promotions processes will grow the number of women in the senior-executive-to-

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board-director pipeline. “The problem is the number of women in [senior executive roles] in the mining industry is still super small,” said Dischinger. While Turcotte said she could not speak on the impact of the new rules in statistical terms since few reports analyzing the data have yet to be released (Torys is continuing its review to

include all the issuers and plans to use its findings for a round table in October), she said she believes that “certainly the fact they have to include it in their proxy circulars makes [them] reflect on the matter, which they didn’t have to in the past. I think it will eventually make them change their ways, but it might take them a bit longer than

we would want. I believe it’s going to become an industry standard.” Ramchandani concurred, pointing out that it took some years for the Ontario Securities Commission’s corporate governance comply or explain rules for independent directors to become an industry standard: “It’s still early days. It hasn’t even been a year yet.” CIM

Changes coming to B.C. mining code The British Columbia government announced in late June a process to determine how to implement the seven recommendations made by an independent panel probing the Mount Polley tailings pond breach of August 2014. B.C.’s Energy and Mines Minister, Bill Bennett, revealed the creation of a Code Review Committee led by Al Hoffman, B.C.’s chief inspector of mines. The committee will focus on three of the panel’s recommendations: the need to implement the best available technology and practices (including the use of filtered “dry stack” tailings technology), the strengthening of safety and regulation during all life phases of a tailings storage facility (TSF), and the upgrading and improvement of existing dam safety guidelines. The committee consists of representatives nominated by various B.C. First Nations, mine labour unions and industry. Two subcommittees will support the overarching body, providing technical reviews for the work on TSFs and improvements to health and safety practices. The committee will begin meeting on a regular basis in September, said David Haslam, a spokesperson for the ministry of energy and mines. The technical TSF subcommittee’s sections of the review are expected to be completed in early 2016, with changes legally in force as early as mid2016. Revisions to the current rules concerning health and safety will likely be implemented as soon as spring – Christopher Pollon 2017. 20 | CIM Magazine | Vol. 10, No. 5

news

Imperial Metals restarted production at its Mount Polley mine in early August, one year after it experienced a tailings dam breach last summer. The copper and gold mine, located near Williams Lake in British Columbia, is initially operating at half capacity, with up to 220 workers on site, under the restrictions of a conditional permit issued in early July by the provincial government. According to B.C.’s Minister of Energy and Mines, Bill Bennett, the conditional permit is the first step owner Imperial Metals must take before the mine can return to full capacity. It allows the mine to operate for about a month before a second permit, dealing with short-term water treatment and discharge, is needed in September. In order to ramp up to full production, the mine must submit a long-term

Courtesy of Imperial Metals

Restricted reopening at Mount Polley

The main processing plant at Imperial Metals’ Mount Polley mine

water treatment and discharge plan by next June. “Our choice was: do we wait for them for a year to do absolutely everything that shows that they have a long-term plan, or do we let them operate for a few months and get people working again, given that there’s no

negative impact to the environment,” said Bennett in a released statement. The restrictions mandate that the existing tailings storage facility cannot be used, and liquid waste must be dumped into the unused Springer pit at the mine site. By mid-fall, the pit will

August/September • Août/Septembre 2015 | 21

Kitimat smelter upgraded and extra efficient Rio Tinto Alcan began shipping the first batches of aluminum from its newly reopened smelter in Kitimat, British Columbia, in early July, follow-

22 | CIM Magazine | Vol. 10, No. 5

Courtesy of Rio Tinto Alcan

likely be filled, and the second permit must be granted before water can be treated and discharged into Hazeltine Creek, which bore the brunt of last year’s breach. Imperial Metals must also pay an extra $6.1 million reclamation security to the government. Imperial Metals’ vice-president of corporate affairs, Steve Robertson, said the conditional permit fits with the company’s intention to have Mount Polley operating at permanent, full capacity by next summer. “We expect to be able to go back to the government in the fall with a proposal for a full-time restart of the – M.Y. mine,” he said.

The upgrades at Rio Tinto’s modernized aluminum smelter in Kitimat, B.C., will cut overall emissions in half and reduce power consumption by 36 per cent.

ing the completion of the facility’s extensive US$4.8-billion upgrade a month earlier. The modernization project, which began in December 2011, is expected to increase aluminum production to 420,000 per day from 282,000 tonnes,

when the facility ramps up to full production next year. The metal will mostly be shipped to customers within the Pacific Rim from Kitimat’s city port on the north coast of the province. According to the company, the upgrades will also cut overall emis-

sions in half and reduce power consumption at the 60-yearold smelter by 36 per cent, making it one of the most economical plants in the world. All of that is made possible by the company’s proprietary AP40 reduction cell technology, said company spokesperson Kevin Dobbin. As part of the expansion, Rio Tinto installed 384 of the improved electrolysis pots in six buildings along the potline, replacing 900 smaller pots. “Operating above 400,000 amps, the pots have the lowest energy consumption – below 12,500 kilowatt hours per tonne – and unequalled productivity at over three tonnes per pot per day,” said Dobbin. The smelter also uses a number of other solutions from Rio Tinto’s AP Technology throughout its extraction process such as the ALPSYS pot process control system and new – M.Y. anode baking systems.

MOVIN’ on up Compiled by Michael Yang

Harry “Red” Conger was appointed president and COO of the Americas and Africa Mining division at Freeport-McMoRan on July 14. Conger has held several positions with FreeportMcMoRan over the past two decades, most recently as president of its Americas division. Stephen Flewelling was designated senior vice-president of mining and projects at Noront Resources on June 19. Flewelling has more than 30 years of experience in exploration, feasibility planning, development and operations. Most recently, he served as senior vice-president of projects and exploration at Glencore, after holding a number of similar senior positions with Falconbridge. Rubicon Minerals appointed Bill Shand as vice-president of operations on June 1 following the completion of the construction phase at its Phoenix gold project near Red Lake, Ontario. Shand brings more than 25 years of mine operation and maintenance experience, most recently as vice-president of operations and maintenance strategy at Goldcorp. Prior to that, he oversaw Goldcorp’s Wharf mine, Red Lake gold mines and Dome mine. Martin Palacios was appointed chief transformation officer (CTO) at First Majestic Silver on April 6. As CTO, Palacios is overseeing the improvement of the SAP data flow system he helped implement, leading changes in materials and equipment management, and instituting a mass communication tool designed to connect staff across all operations. Before joining the company as the chief information officer in 2012, Palacios served as a regional director of information technology at Goldcorp for three years. August/September • Août/Septembre 2015 | 23

A more transparent industry New legislation requires public disclosure of payments to governments By Katelyn Spidle The federal government is making good on its commitment to help combat corruption in the extractive sector. Canada enacted the Extractive Sector Transparency Measures Act (ESTMA) on June 1, which requires companies operating in the mining and oil and gas industries to report payments of more than $100,000 made to all levels of government, both at home and abroad, each year. In 2012 the Mining Association of Canada (MAC), PDAC, the Natural Resource Governance Institute, Publish What You Pay-Canada and the Resource Revenue Transparency Working Group began designing a framework for legislative changes to increase transparency within the Canadian extractive sector.

24 | CIM Magazine | Vol. 10, No. 5

“The act itself contributes to global efforts to deter corruption in the extractive sector,” said Ron Lyen, director of the international affairs division at Natural Resources Canada (NRCan). In 2013 Prime Minister Stephen Harper pledged to develop legislation that would establish a standard for mandatory payment reporting within the extractive sector by 2015. The United States and the European Union have also vowed to implement similar payment reporting legislation in the near future, noted Lyen. The new act applies to corporations, unincorporated organizations, trusts or partnerships – as well as any entity that controls one of these – engaged in the commercial development of minerals

or oil and gas projects in either the local or international market. These companies will either be listed on a Canadian stock exchange, have a fixed Canadian address or engage in business activity in Canada. Furthermore, a company will be subject to the act if in the past two financial years it has met two of the following three conditions: the company has a minimum of $20 million in assets, generated at least $40 million in revenue or has a workforce of at least 250. Ben Chalmers, vice-president of sustainable development for MAC, said ESTMA goes hand in hand with the Corruption of Foreign Public Officials Act, enacted in 1999, which aims to prevent Canadian businesses from bribing

news foreign public officials. The difference, he noted, is that ESTMA is meant to include the reporting of legitimate payments. Under the new act, companies must report taxes (not including personal income or consumption); royalties, fees, regulatory charges, considerations for licences, concessions or permits; production entitlements; signature, discovery or production bonuses; dividends that do not include those paid to regular shareholders; and infrastructure improvement payments. Reports disclosing these payments must be submitted to the Department of Finance within 150 days of the end of a company’s fiscal year. Companies are also required to publish these payments publicly. Links to the reports will be available on a government website that has yet to be set up, Lyen said. However, he added, companies can decide whether to disclose these payments in their annual reports or in separate documents. Chalmers acknowledged that the act will increase the burden on employees who prepare year-end financial documents, but it is important to see the bigger picture. “Mining companies spend a lot of time reporting on a lot of things,” he said. “But the view was that it is

worth the effort to help ensure these flows of revenue from the companies to the governments are better used to better the communities.” Non-compliance with the act carries penalties. By failing to report payments, knowingly including misleading or false statements in a report, or structuring payments to avoid reporting, companies could be liable to pay fines up to $250,000 upon summary conviction. Each is considered a separate offence and fines may compound depending on the number of days a company is found to be in non-compliance. Companies may also be required to submit supplementary information or documents if the Department of Finance requests a verification of compliance with the act. John Gravel, director of natural resources for professional services company Turner & Townsend, said ESTMA will make it easier for governments and investors to understand the cash-flows of projects they are backing, as well as help communities comprehend the direct benefits they receive from mining. His biggest criticism, however, is the size of the penalty for failing to follow the new reporting requirements. “The maximum penalty […] is far too low to make the law effective,” Gravel said.

When asked how ESTMA will impact mining companies, Julie Taylor, director of corporate communications and investor relations at New Gold, said it was too early to tell. “New Gold has been monitoring this initiative since its announcement, and given the act has only recently come into force and is still in the process of broader assessment, it would be premature to comment at this time,” she said. Payments made to aboriginal governments are exempt from disclosure for the next two years. Only those payments made after June 2017 will be subject the following year to inclusion in the company’s reporting. The twoyear timeframe was recommended by both aboriginal and federal governments to discuss the implementation of the new legislation. “Our view was if [the act] were to include aboriginal governments, then it should do that with the consultation of aboriginal governments,” Chalmers said. “The two years is really intended to provide [the federal government] the time to work with the aboriginal communities around this issue.” Lyen said the government is currently developing a plan for how it will engage Aboriginal Peoples during the deferral period. CIM

August/September • Août/Septembre 2015 | 25

Teck temporarily closes coal mines

Cost going up for Alberta’s large emitters Alberta’s New Democratic Party government announced on June 25 a plan to update and raise the cost of greenhouse gas emissions for large industrial emitters. The changes will see Alberta renew the Specific Gas Emitters Regulation (SGER), which was set to expire at the end of June, and aim to reduce emission intensity to 15 per cent in 2016, and 20 per cent in 2017, against the current target of 12 per cent. At the same time, the cost of carbon for the province’s Climate Change and Emissions Management Fund (CCEMF) – a fund companies can pay into if they fail to achieve their targets – will rise to $20/tonne in 2016 and $30/tonne in 2017, up from the current $15/tonne. Under SGER, originally passed in 2007, facilities emitting at least 100,000 annual tonnes of greenhouse gases must reduce emissions by improving facility efficiency, purchasing Alberta-based carbon offset credits, contributing to CCEMF, or earning emission performance credits. Oil sands mining operations rate among the province’s heaviest emitters of carbon dioxide and other greenhouse gases. Chelsie Klassen, spokesperson at the Canadian Association of Petroleum Producers, said the organization remains committed to developing solutions for a “cleaner energy future,” but is urging caution on the part of government. “Policies to increase the price on carbon must spur direct investments into GHG-reducing technologies to address climate change,” she said, noting that the revised SGER and Alberta’s recently announced corporate tax increase have the potential to add almost $800 million to industry costs over the next two years. “It is critical that government provide a competitive fiscal environment in order to remain attractive for investment and develop policies that keep Alberta competitive in a global market.” The same day, the Alberta government also announced the creation of a review panel to examine the province’s existing climate change policy. The panel will be led by Andrew Leach, a professor at the University of Alberta School of Business, and report back to governThe largest emitters of carbon dioxide ment in the fall on its findings, equivalent (in millions) which will include next steps to reduce emissions Syncrude from all sectors. 12.5 Mildred Lake and Aurora North plant sites “Today we are taking two very meaningful TransAlta steps toward crafting a Sundance thermal 12.1 solution to deal with coal power plant climate change,” said Shannon Phillips, AlCapital Power 8.9 Genesee thermal berta’s environment coal power plant and parks minister. “For years, the previous govSuncor ernment failed to develop 8.4 Millenium a meaningful strategy to and Steepbank sites deal with the important issue of climate change, TransAlta 7.6 Keephills thermal and we are going to do coal power plant things differently.”

BIG

– C.P.

26 | CIM Magazine | Vol. 10, No. 5

carbon footprints

The most recent (2013) figures from Environment Canada

Teck Resources is suspending operations at its six Canadian coal mines over the summer, as the company continues to struggle with the slumping metallurgical coal market. Each mine is being temporarily shuttered for at least three weeks on a staggered schedule throughout July, August and September. The move will cut Teck’s third-quarter production by roughly 1.5 million tonnes, or 22 per cent of the originally forecasted total for the year, while leaving room for it to meet all of its contracted coal sales. “Rather than push incremental tonnes into an over-supplied market, we are taking a disciplined approach to managing our mine production in line with market conditions,” said Teck CEO Don Lindsay in a released statement. The Vancouver-based miner had already slashed its dividend by twothirds earlier this year, cut 600 jobs and shelved plans to restart its Quintette coal mine in northeast British Columbia in an attempt to offset weak commodity prices and a glut of supply. Metallurgical coal prices have dropped significantly in the past four years. In the first quarter of 2011, Teck valued it at about US$330 per tonne whereas the average coal price for the second quarter this year has about US$95 per tonne. The bleak market conditions have taken their toll on other coal miners, as well. Last year Walter Energy shut down its Wolverine and Brazion mines in northeastern B.C., and Anglo American froze work at its Tumbler Ridge operation in the same region. More recently, Grande Cache Coal announced it will be slashing jobs in Alberta over the rest – M.Y. of this year.

Barrick sells assets to clear debts Barrick Gold has taken several steps this summer to meet its debt-reduction target of US$3 billion for 2015.

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The company announced on July 30 that it would sell half its interest in the Zaldívar copper mine in Chile to Antofagasta for a total consideration of about US$1 billion. “The sale of 50 per cent of Zaldívar is consistent with our strategy to create long-term value for our shareholders,” said Barrick co-president Kelvin Dushnisky in a press release. “By selling a stake in this non-core asset, we strengthen our balance sheet while maintaining significant exposure to a strong cash-generating operation.” With the sale of Zaldívar, Barrick has reduced its debt by about US$1.85 billion so far in 2015, which represents close to two thirds of its target for this year.

Supporting the local economy Engineers Without Borders and Mining Shared Value released a report in May on trends in public reporting of local procurement in the mining industry for the period 2012-13. The report’s Canadian mining industry supplement looked at the top 50 Canadian mining companies’ public reports to determine their level of reporting on local procurement – a practice meant to improve the economic impact of mining operations on surrounding communities. The report could not confirm if local procurement is actually on the rise, but it did determine that the reporting of it is. Among its findings, the report indicated that the percentage of Canadian companies mentioning local procurement in their public reports increased to 72 per cent in 2013, up from 62 per cent in 2012. Here are some additional findings: – K.R.

Earlier in the year, Barrick announced the sale of two other noncore assets. The company announced May 24 it would sell its Cowal mine in Australia to Evolution Mining – an Australian mid-tier gold producer – for US$550 million in cash. The sale will also bring about the closure of Barrick’s office in Perth, Australia, reducing costs further. Two days later, the company also revealed the sale of 50 per cent of Barrick Niugini, a subsidiary that owns 95 per cent of the Porgera gold mine in Papua New Guinea, to Zijin Mining Group, one of the largest gold producers in China. The sale, finalized at US$298 million in cash, marks the first step in a long-term strategic coopera-

Reporting on prioritizing local procurement in 2013 28 out of 50 companies reported prioritizing local procurement in 2013

56% 42%

21 companies did not report One company was marked not applicable in this category

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Public reporting on procurement policies 2012-2013

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Percentage of companies with a local procurement policy Percentage of companies without a local procurement policy One company was marked not applicable in that category in 2013

28 | CIM Magazine | Vol. 10, No. 5

tion agreement recently established between the two companies. As of last December, Barrick was US$13 billion in debt. In February the company reported a net loss of US$2.91 billion (US$2.50 per share) – Katelyn Spidle for fiscal 2014.

LEGAL

Crafting the next generation of NSR agreements in Quebec BY DIMITRI MANIATIS AND PATRICK NACCACHE

t is not uncommon for mining property transactions to include the payment of a royalty as part of the vendor’s consideration, such as a Net Smelter Return (NSR), through which the holder typically receives a percentage of the value of production or net proceeds earned by the grantor from a smelter or refinery. The Quebec Court of Appeal’s Aug. 6, 2013 judgment in the matter of Anglo Pacific Group PLC vs. Ernst & Young Inc. provided important guidance to holders of NSRs in mining projects in Quebec. It also highlighted that customary NSR agreements registered in the Mining Register were not enforceable against third parties under the civil law of Quebec. Sellers in post-Anglo Pacific transactions of Quebec mining properties should pay close attention to the drafting of any NSR agreements and obtain professional advice to limit the risk of their royalty becoming only a hollow promise of income. There are often ways to structure mining property transactions involving NSRs that enhance their enforceability.

30 | CIM Magazine | Vol. 10, No. 5

To recap, the court ruled that an NSR is only enforceable against third parties if it creates a real right – as opposed to a personal right – over the mining property. A real right establishes a direct right for the grantee over a thing or property, and as such is enforceable against anyone once the formalities of publication have been satisfied. Real rights attach to and follow the property, conferring upon their holders a right to “pursue” the property despite any change in ownership. Personal rights, on the other hand, may only be enforced against the grantor of the royalty personally for the performance of an obligation. Therefore, if the underlying mining claim or lease is conveyed to a third party or if the grantor becomes insolvent, a “personal” royalty becomes unenforceable and therefore worthless as was the case for Anglo Pacific’s NSR. The Court of Appeal also clarified the applicable legal publicity regime: real mining rights, such as mining leases, registered in the Mining Register are enforceable against the state only. To be opposable to other third parties, real mining rights (unless exempted under the Mining Act) must be published in

columns the register of real rights of state resource development of the Quebec land register. Care must therefore be given to the registration of mining rights in the appropriate registries. We recently acted for a group of mining property owners in the context of a transaction that involved the sale of a mining property with an NSR as consideration. While the Court of Appeal held that it is possible to create a mining royalty that is a partial ownership right (technically a “dismemberment” of the right of ownership) and provided guidance on how to do so, the practical reality is that royalty agreements are seldom designed to grant the royalty holder with such direct rights in the mining claims, leases and/or extracted mineral substances. Our challenge was therefore to structure an agreement that granted sufficient real rights to the royalty holders (defined in the agreement as “right holders”) while allowing the new owner of the mining property to conduct its regular mining activities without being unreasonably encumbered. The resulting agreement addressed this issue by providing that the mining company benefits from unfettered access to the newly acquired property, notwithstanding the real property rights and the recourses of the “right holders,” in exchange for the timely payment of a royalty. The real rights are quantified as a percentage of the volume of minerals present on, or extracted from, the property; the right holders may at any time, and for any period, elect to receive payment of these rights “in kind” (by delivery of extracted minerals), in which case – and dur-

BELTS WITH THE

ing which period – the royalty ceases to be payable. In addition, the agreement provided for a reversionary interest allowing the right holders to reclaim portions of the property in certain cases, including the surrender, expiry or abandonment of the property by the mining company. Publishing the resulting document entitled “Real Rights and Royalty Agreement” in the Quebec land register also presented a challenge. The land register had never dealt with the publication of an “unnamed” real right resulting from the dismemberment of the right of ownership and had no preestablished category under which to publish the agreement. It was therefore published against the property as an “assignment” given that the agreement also included the initial transfer of the mining property from the right holders to the mining company. Since the lessons of Anglo Pacific remain largely theoretical and untested, there may be various ways to structure these “next generation” NSR agreements in Quebec. But from one case to the next, the objective will be to strike the right balance between the legal requirements set out by the Court of Appeal and the commercial realities with which the contracting parties must compose. CIM Dimitri Maniatis is a partner and Patrick Naccache is an associate at Langlois Kronström Desjardins, LLP in Montreal. Dimitri specializes in commercial litigation and arbitration in the mining industry, while Patrick focuses on mergers and acquisitions, financing and security, and various commercial matters relating to mining and exploration.

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S TA N D A R D S

Implementation of 2014 CIM Definition Standards BY PAUL BANKES

This column is the second in a two-part series on the updated CIM Definition Standards. The first part appeared in the May 2015 issue of CIM Magazine. he CIM Standing Committee on Mineral Reserve and Mineral Resource Definitions maintains the CIM definitions that are incorporated by reference into National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and represents CIM on the Committee for Mineral Reserve International Reporting Standards (CRIRSCO). In 2014 the Committee completed a three-year update of the definitions and guidance that form the CIM Definition Standards for Mineral Resources and Mineral Reserves. NI 43101 references these standards for mineral reserve and mineral resource definitions, definition guidance and classification scheme. The revised CIM Definition Standards harmonized definitions with CRIRSCO partners and addressed changes in NI 43-101 as well as requests for clarification and guidance from industry and Canadian Securities Administrator (CSA) staff. Following extensive consultation with industry, CIM members and CSA, the results were incor-

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porated in the final Definitions Standards and approved by CIM Council on May 10, 2014. The alignment of the 2014 Definition Standards with NI 43-101 for the permitted disclosure of Mineral Resource estimates and Preliminary Economic Assessments (PEAs) is an important aspect of the recent update. Upon its inception in 2001, NI 43-101 allowed a Preliminary Assessment (PA) to include Inferred Mineral Resources. On June 30, 2011, CSA changed the name of a PA to PEA, and allowed Inferred Mineral Resources to be included in a mine plan, production schedule and financial analysis. However, CSA maintained the prohibition against disclosing the results of a prefeasibility study, feasibility study or life of mine plan at a developed mine that included Inferred Mineral Resources in the mine plan, production schedule and financial analysis. While the CSA’s decision did not materially impact the previous CIM definition, it did contradict the 2005 and 2010 CIM definition guidance that minimized the confidence associated with an Inferred Mineral Resource and discouraged the use of Inferred Mineral Resources to “evaluate economic validity worthy of public disclosure.”

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To address this inconsistency, the above guidance was removed from the 2014 Definition Standard and the following phrase was inserted into the Inferred Mineral Resource definition to recognise the heightened importance and use of Inferred Mineral Resources in the preparation of a PEA: “It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.” For international practitioners reporting under multiple CRIRSCO codes and standards, the revised text has been included in the CRIRSCO International Reporting Template and seven of eight member codes. The South African reporting code is expected to incorporate CRIRSCO core definitions in 2016. In recognition of CSA’s continued prohibition against disclosing the results of a prefeasibility study, feasibility study, or life of mine plan at a developed mine that includes Inferred Mineral Resources in the mine plan, production schedule and financial analysis, the definition guidance for an Inferred Mineral Resource was modified to include the following guidance: “Inferred Mineral Resources can only be used in economic studies as provided under NI 43-101.” NI 43-101 only allows Inferred Mineral Resources to be included in a PEA that is independent of both prefeasibility and feasibility studies. Finally, further guidance was needed to clarify a Qualified Person’s obligation to clearly state the basis for determining that a Mineral Resource has reasonable “prospects for eventual economic extraction.” To address this concern, the following guidance was added to the Mineral Resource Definition: “The Qualified Person should consider and clearly state the basis for determining that the material has reasonable prospects for eventual economic extraction. Assumptions should include estimates of cutoff grade and geological continuity at the selected cutoff, metallurgical recovery, smelter payments, commodity price or product value, mining and processing method and mining, processing and general and administrative costs. The Qualified Person should state if the assessment is based on any direct evidence and testing.” At its core, the committee considers the determination of “reasonable prospects for eventual economic extraction” to be a judgment by the Qualified Person after evaluating the technical and economic factors likely to influence the prospect of economic extraction. Portions of a deposit that do not have potential for eventual economic extraction cannot be included in a Mineral Resource statement. Although many practitioners believe a Mineral Resource should be reported within a pit shell, or preliminary underground mining outline, the committee strongly believes flexibility is required to allow a Qualified Person to demonstrate mineability without the aid of advanced optimization software. In many cases, mineability and strip ratio can be demonstrated on a series of plans and sections. While this is particularly true for early-stage projects based on Inferred Mineral Resources, the Qualified Person is obligated to clearly state the basis for the determination of “reasonable prospects 34 | CIM Magazine | Vol. 10, No. 5

for eventual economic extraction.” This disclosure should state whether the assessment relies on any direct evidence and testing and should not be limited to the disclosure of assumptions listed in the guidance. In conclusion, the alignment of the 2014 Definition Standards with NI 43-101 for the permitted disclosure of Mineral Resource estimates and PEAs, as well as new guidance to clarify the Qualified Person’s obligation to clearly state the basis for determining “reasonable prospects for eventual economic extraction” represented a significant improvement to the CIM Definition Standards. CIM Paul Bankes is a geologist with more than 30 years of domestic and international experience in project development, mine operations, geostatistics, mine design and business development. Paul chairs the CIM Standing Committee on Mineral Reserve and Mineral Resource Definitions and represents CIM on CRIRSCO and the UN Experts Committee on Resource Classification.

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Forget high-tech, think right-tech BY DOUGLAS MORRISON

ince the last major innovation in underground mine production over 30 years ago – the introduction of bulk stoping methods and the large-scale, electric-hydraulic equipment that made it possible – innovation in mining has been regarded as something that mines can get to later. Mining is known to be a risk-averse industry, and it becomes even more so during turbulent times. When prices are high and things are going smoothly, mining companies are too busy to look to the long term. However, when prices fall and things are going poorly, mines are pressured to focus even more on the short term. There is no time to explore or innovate. For the last three decades, mines have relied upon the benefits that bulk stoping brought, like safer operations, larger volume production and reduced manpower. But the benefits of economies of scale are eroding as miners start to dig deeper underground and encounter increasing rock stresses and temperatures. Higher rock stresses lessen inherent stability so that larger drifts require proportionally more ground support to ensure acceptable levels of safety and stability. This increases the cycle time and reduces the rate of advance in capital devel-

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opment, thus expanding the time to first production. And the amount of capital development required has almost doubled over the last 30 years as the height of open stopes was reduced to optimize stress-induced dilution. In 1985 stope heights exceeding 60 metres were common. Nowadays, typical stope heights are around 35 metres and may well have to decline even further when drilling 2.5 kilometres below surface. Increasing rock temperature requires ever-greater volumes of ventilated air to remove heat – and so higher electricity bills – to ensure conditions that do not require dramatically unproductive work-rest regimes. It should be noted that no one believes complete automation is achievable or even desirable. The real “risk” has changed as mines have become deeper and hotter, productivity continues to decline, and the return on capital employed erodes. Today, the steady decline towards unprofitability by applying the same old approaches is the main threat mines face. In comparison, the risk involved in trying something new that will take some time, money and ingenuity to refine and implement, is trivial compared to the risk of becoming unprofitable while sticking to the status quo. Increas-

ing depth erodes productivity just like inflation erodes the value of cash, and the best continuous improvement can achieve is to keep pace with what we like to call “operational inflation,” or the rising costs associated with these operational realities – and only if it is continuous. Missing a few years of any improvement can never be recouped and is forever a lost opportunity. At the level of mine management, the effect of increasing rock stress and temperature appears gradual, increasing marginally as the mine extends deeper. Those responsible for long-term strategic risk assessment are failing in their duties if they opt to ignore the fact that conventional production methods have reached their limits. This becomes painfully evident when new, deeper mines or deeper ore bodies close to existing mine infrastructure are considered for capital investment but ultimately left undeveloped because current methods cannot provide the needed return to cover the additional capital cost of access development – and this at a time when the cost of capital could not be lower. This is betting the future on higher grades; it is hardly a long-term strategy likely to attract cautious investors. There are a few stalwart exceptions to this kind of strategic failure, most notably Rio Tinto in Australia for remote surface mining, and Vale in Canada for underground mining, both of which have funded a great deal of research and innovation over the years. But in most companies, year after year, executive management has effectively padded shareholder returns instead of investing in exploration and innovation. They are selling the seed corn of the future for short-term gain. People understand what exploration is, but there is much confusion about what mining innovation is. Although it uses technical developments, innovation is only successful if you can make more money with the new technology than with the old. Mining innovation aims to accomplish a step-change operational practice that achieves significantly better economic performance – say, half the cost, as a target. And changing routine operations through continuous improvement is indispensible for innovation because it creates the open minds required to adopt new approaches. For the Centre for Excellence in Mining Innovation (CEMI), right-tech – not high-tech – is the optimal solution. It allows miners to 1) be more productive; 2) decrease the capital demand for development; 3) be practical enough to integrate into operations and; 4) be supported by the training levels achievable by the local workforce. Our Ultra-deep Mining Network includes projects that use leading-edge materials for personal protection equipment and simple mechanical protection for drift crews, and that rejuvenate 100-year old ventilation technology. Today, the need for innovation is as urgent as the need for exploration. The days when highly educated technical experts were abundant are gone and an aging workforce of qualified engineers, geologists and metallurgists means time is running out. Change is neither cheap nor easy; it takes time, money and ingenuity. But in a world where the cost of capital is as low as it can be, the best investment you can make today is in the ingenuity needed to implement step-change innovation tomorrow. CIM Douglas Morrison is the president and CEO of CEMI. He spent 14 years in Sudbury mines and 16 years consulting in Australia, South America, and Southern Africa. Since 2012 he has been based in Sudbury at CEMI, focused on innovations that increase mine productivity, decrease capital demand and reduce technical risk.

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A path that paid off

By Eavan Moore

Courtesy of Pells Sullivan Meynink

BHP Billiton Iron Ore used geochemistry to make its case for slope redesign

Pit slope angles at BHP Billiton’s ore body 25 went from 20 degrees to 26 or 27 degrees.

he original slope design for the pit wall of BHP Billiton Iron Ore (BHPBIO)’s Ore body 25 in the Pilbara, Western Australia, used a relatively simple geological model. Created in 2009, it assumed that underlying shale-dominated bedrock was overlain by detrital rock and soil deposited by the gradual erosion of nearby areas. A similarly simple hydrogeological model added information about groundwater flow. But keeping the simple design would have been a costly error for the company. BHPBIO recently opted for a finer-grained understanding of both the hydrology and the geology, which bolstered the case for steepening the pit wall. BHPBIO’s geotechnical team conducted a site investigation between December 2012 and early 2013 to obtain new pit wall samples. This new drilling provided a unique opportunity to re-interpret the boundaries of soil horizons (or layers), understand the soil characteristics of these layers better, prove shear strength and measure hydrogeological properties of critical units like the clay using piezometers. The information was analyzed by BHPBIO’s geotechnical and hydrogeological engineers to create a consistent model, which was used to define slope stability. Concurrently, the engineering consultancy Pells Sullivan Meynink (PSM) undertook a review of core photographs for Ore body 25 and identified four geotechnical units overlying the bedrock. Each represented a depositional event, and was expected to have distinct engineering properties. PSM began interpreting the boundaries between the different geotechnical units in the pit wall of the ore body based on variations in the quantitative mineralogy. In particular, there was a focus on one potentially unfavourable clay unit in the core. Based on its unique geochemical signature, information from cored boreholes could be correlated to

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non-cored ones. In addition to traditional assays, spectroscopic geochemical data was assessed to provide supporting evidence of correlations in development of the geological model. An assessment of ratios of particular minerals in the assays allowed PSM to interpret the likely origin of the clay as the result of a millennia-old landslide, thereby providing inferences towards its strength and permeability characteristics. PSM also refined the geological interpretation of soil horizons based on chemical and spectral signatures that were captured from chips from the drilling campaign. The consultancy produced a new geological model using Maptek’s Vulcan software and delivered these lithological boundaries to BHPBIO in north-south geological sections with “strings” or “layers” representing the upper boundary of similar soil/rock horizons. PSM also delivered 3D surfaces for each soil/rock horizon. BHPBIO used the new lithological boundaries to refine the geotechnical and hydrogeological boundary conditions that were loaded in geotechnical software to optimize slope angles. The new geotechnical and hydrogeological model conducted by BHPBIO indicated lower pore pressure at a similar shear strength and capacity to hold a steeper angle.

Spectroscopic inquiry BHPBIO had used spectroscopy to gather quantitative mineralogical data since 2009, chiefly to validate estimates made during drill-hole logging. The new study was not started with the intent of reanalyzing data, said Helen Baxter, associate engineering geologist at PSM. But as her team looked at the geochemical data, they realized it might be more useful than originally thought. “So we did a bit more research to try to get as much as we could out of the data that we had,” she pointed out.

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The youngest three geotechnical units were a polymictic conglomerate, a monomictic conglomerate and a mix of breccia and kaolinitic clay. The fourth unit was a thick layer of clay, which was of particular importance in this study due to its thickness and that it had previously been shown to have poor strength conditions. PSM used geochemical data collected through traditional assays and infrared spectroscopy to interpret the likely origin of the clay and help calibrate the geological boundaries used in BHPBIO’s work. “If we have an understanding of what the origin is, it gives us a rough idea of how consolidated it is and what the possible permeability should be through it,” Baxter explained. “So then a hydrogeologist could calibrate the piezometric data that we have to see that it does actually represent what we’re thinking.” The mining company collected chip and core samples from the nine boreholes drilled for the study, undertook both standard assays, and scanned the chips with the HyLogger infrared system developed by Australia’s CSIRO, using algorithms that quantified iron minerals, clay minerals, and other markers and contaminants including gibbsite, white mica, carbonate, silica, chlorite, and amphibole. “Standard geotechnical modelling practice is to use cored data as the basis,” said Baxter. “Very few include reverse circulation holes – where chips are the resulting product.”

These marker minerals offer clues about the origin of the materials under study. For example, white mica is common in bedrock shale and less common in detrital material. For this project, there were three options for the origin of the clay unit that had been identified: it could be a very weathered (residual) part of the shale bedrock, it could be detrital in origin, or it could have arrived in its current location as failure debris from a landslide of bedrock shale that had then been overlaid by detrital deposition. PSM concluded through mineralogical comparative studies that the clays were likely failure debris. Baxter said this was the first time she was aware of that the origin of a clay body in the Pilbara had been interpreted. That meant there was no existing data from other sites for comparative purposes, so establishing the origin was a matter of ruling out possibilities by comparison to known bedrock and detrital clays from a different deposit. She explained: “Looking at those analogies and differences, we said, ‘OK, we’re seeing enough relationship with the bedrock here, but not enough to say that it’s a residual material.’”

A small part of a big picture “Overall, it may have been a project where we didn’t really need to know the origin of the clay,” Baxter added, “but it

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Courtesy of Pells Sullivan

An educated assessment would suggest that clay mobilized by landslide would be less consolidated, having been less compressed over the geological period, and that it might exhibit more voids, which would improve its ability to drain water. Ruling out an alluvial or colluvial detrital origin confirmed that strength and hydrological data from other BHP Billiton sites in a similar geological setting could not be used in any analysis. Baxter also observed that the dataset was broadened by using geochemical analysis on rock chips from existing exploration drilling and the Standard geotechnical modelling practice does not include data from chips from reverse circulation holes. holes drilled for this project. “If we had left the model to be developed gave us that extra bit of support for the other components of using only cored holes and no geochemistry, we would have the project that went into the overall stability assessment. By reduced the overall quantity of drilling data available for having that understanding that the clay was most likely to be inclusion in the model significantly,” she pointed out. landslide material, that gave us an idea of how, geometrically, The new geological model, based on geochemistry and it should be shaped within the basin.” spectral analysis, improved the interpretation of soil/rock boundaries and resulted in better representation of geotechnical and hydrogeological conditions, prompting a change in the angle of the slope to 26 or 27 degrees from 20 degrees, a lower stripping ratio and millions of dollars in savings once construction was underway in 2013 (it wrapped up early this year). “We left a significant amount of waste in the walls by stepping up the inter-ramp angle by about seven degrees,” noted Arturo Maldonado, principal geotechnical engineer at BHPBIO. He estimated that the cost of the study was completely paid off within the first few days of resuming mining operations.

A rare opportunity There are limited precedents for this type of work. PSM had done it only once before, at a silver mine where drilling did not reveal major structural boundaries, but geochemistry did. “PSM developed the idea of recognizing these soil horizons based on chemical signatures,” said Maldonado. “However, it was envisaged by BHPBIO that the geochemical model should be accompanied by geotechnical characterization of soils to really interpret the strength properties of these materials, particularly the clay unit.” For her part, Baxter said the most interesting aspect of this work was having a client who signed off on research. “They allowed us to really put some geological thinking into what was going on, and get the best outcome for the project,” she said. “Using the geochemistry is something we’ve been pioneering with BHPBIO, and [is] well and truly outside the scope of what is done normally in geotechnical fieldwork.” CIM 42 | CIM Magazine | Vol. 10, No. 5

Courtesy of Barrick Gold

Are trucks the right tool for the job? Barrick and Deloitte rethink the miner’s approach to energy By Chris Balcom

Barrick Gold’s operations consumed about $1.1 billion in energy in 2014.

or the past five years Barrick Gold and Deloitte have been examining Barrick’s energy use in the hopes of cutting operating costs and emissions. Any savings could make a big difference if magnified across the organization; last year Barrick spent roughly $1.1 billion on energy, accounting for more than a quarter of its total operating costs. The two companies are developing a new energy strategy, and they will be building a wide range of new business models and testing new operating techniques over the coming months and years. As Barrick’s senior energy manager, Russell Blades, pointed out, some of the changes will be relatively small and easily accomplished. But he also said he hopes Barrick’s initiatives will demonstrate that huge opportunities still exist for the mining industry with regard to better energy efficiency.

Changing energy environment Blades said Barrick, like most mining companies, only began paying more critical attention to energy around 2008. Oil prices were previously relatively low and stable, and companies treated them as a predictable expense. “When energy was cheap and when the gold prices and the energy prices sort of co-traded, over time people believed that the commodities were a natural hedge for the energy price,” explained Adriaan Davidse, a director at Deloitte who has been working closely with Barrick on this initiative. While oil prices have fallen dramatically in recent months, it is unlikely this is a long-term trend. “We’d like to get ahead of the curve,” Blades said. Since 2010 Barrick and Deloitte have been working together to meet these challenges head on, developing a comprehensive, system-wide strategy to address Barrick’s energy expenses. The two companies have identified 10 major opportunities for reduction including energy contracts, fuel management, renewable energy, waste heat recovery and fuel substitution, among others. Blades noted that four processes 44 | CIM Magazine | Vol. 10, No. 5

accounted for around 50 per cent of Barrick’s overall energy demand: hauling, grinding, crushing and autoclaves.

Rethinking ore movement The biggest opportunity in the open pit is a rethinking of ore movement, according to Blades. Barrick senior director Peter Kondos agrees: “In essence, we are movers of rocks. “There is no doubt in our minds, [rethinking] transportation will make mining so much more efficient. It’s the next evolution in mining.” Blades pointed out that Deloitte has been instrumental in helping his team uncover the “hidden costs” of operating haul truck fleets. “If you looked at a haul truck, and you didn’t know anything about mining,” he said, “it’s probably the last thing you would design.” To illustrate this, he indicated the obvious inefficiency of a diesel engine carrying the weight of an enormous haul truck along with tonnes of material. One loses a good deal of energy just moving the truck itself. Blades also drew attention to a host of other expenses and inefficiencies, including mechanical and maintenance costs, part replacement, transport of the trucks and parts to remote sites, and site designs that accommodate large vehicles. Meanwhile, other technologies have shown their value. Barrick and Deloitte have been developing simulators and studying the possibilities of using conveyors and a hybrid conveyor/rail system dubbed Rail Veyor to transport ore in and out of the pit, and even within it. These have become increasingly viable over the past five or so years, and have advantages over exclusive reliance on trucks, namely more efficient material movement, continuous electric power, and savings on simpler and cheaper infrastructure. According to Kondos, some potential new projects would not be financially feasible with conventional truck haulage. He said Barrick is currently evaluating Rail Veyor use at several locations in the Americas, and hopes to see the first implemented in early 2017.

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Davidse pointed out that while haul trucks have the great advantage of offering flexibility of movement, this flexibility is not always necessary. “That mobility costs a lot of money if you apply it with the wrong technology in areas where you don’t need flexibility,” he said. For instance, it might make sense to operate a haul truck inside the pit, but taking material out of the pit doesn’t necessarily need the same manoeuvrability. Kondos remarked that using truck alternatives presents a sort of “back to the future” scenario, given that past mining practices were far less energy-intensive than they are today, relying on pulleys, wagons and rail. But he explained that as the industry developed “we got away from those things [because] diesel was cheap.” Since then, haul trucks have become a ubiquitous feature of modern open pit mining. “It’s almost like the elephant in the room,” said Blades, “we’ve been taking haul trucks for granted for so long.”

Systemic perspective Barrick and Deloitte stress their strategy places a great deal of emphasis on thinking about operational energy demand as a system, rather than as a collection of separate processes. In particular, Davidse and Blades cite a “big divide” between mining and processing activities. Without thinking about energy with a system-wide perspective, attempting to cut down on energy in different functional areas could easily increase overall costs. Likewise, expending energy in the right place can reduce overall energy expense, as is apparent in the “drill to mill” approach: spending more on energy-intensive blasting allows you to save on energy downstream when you do not need as much crushing power. Blades said this perspective has been largely missing from the industry: “We tend to think of things as very siloed areas and not really as a system.” The company is also making more use of solar power at its sites, and Davidse was quick to note the systemic implications in this case too, arguing that in some cases it may no longer make sense to run the mine 24/7 if you have access to cheaper solar energy during the day and have to rely on more expensive diesel at night. Kondos said Barrick has “several small solar panel installations throughout the Americas” and is studying how to scale up their use.

something, they help to validate that we’re actually saving what we thought we were going to save.” He also underlined the importance of having these measurements available so that the company can share clearly defined savings and rewards with potential partners that would help install energy-saving technology.

Where next? The team has set a target of obtaining at least a 10 per cent cut in energy expenses over the next five years. Kondos noted that there is some “low-hanging fruit” such as lighting and motor efficiency improvements, but meeting this broader goal will require some more intensive projects such as the implementation of Rail Veyors, waste heat recovery, and other processes. However, this goal is not the only one members of the energy team are shooting for. They hope to prompt an ongoing conversation about energy within Barrick and across the industry. “We really want to focus over the long term on having people appreciate the value that thinking about energy can bring to the company,” Davidse explained. “We’re challenging the system and saying, ‘You have to collaborate across the system, but you need the data to actually make these trade-off decisions, and it takes time to build that foundation,’” he said. “Once you have that, great things can start to happen from there.” CIM

Measuring energy Davidse emphasized that technology alone is not the answer to the industry’s energy woes: “You can’t just insert a technology into an existing flow-sheet and process and then just say the technology is going to save the day. You have to change the way you think about the design of the mine, the way the processes work together, and the way you measure things.” The first years of the collaboration were focused on putting data collection into place for energy expenditure at every level of a site, not just the mine as a whole. This means measuring any electricity or diesel use at any subsystem in the mine, perhaps even down to a single motor. “You need to have that infrastructure in place to understand what the baseline is,” Blades said. “The analytics help us identify where the opportunities are, they help us quantify and, when we implement August/September • Août/Septembre 2015 | 45

Courtesy of Société des Mines d’Ity

Complex project poses many questions How SNC-Lavalin and Société des Mines d’Ity are working out the future of one of Côte d’Ivoire’s oldest mines By Antoine Dion-Ortega

SMI’s project will eventually involve five open pits.

ince SNC-Lavalin won Société des Mines d’Ity’s (SMI’s) bid for a prefeasibility study on the Ity mine expansion and optimization in 2013, the project has developed into a real open pit engineering puzzle. The Montrealbased company, which is presently working on the feasibility study, has been juggling a number of challenges ranging from environmental management to dewatering, slope stability, varied geology of multiple pits and seasonal floods. Since its commissioning in 1991, the Ity mine has consisted of a single pit and a heap leach facility. The expansion project includes the opening of four new pits, two of which are on the other side of the Cavally River. “In 2018 we will operate the new CIL (carbon-in-leach) plant, and we would then have five pits to feed it with, in addition to the heap leach residue, which we want to reprocess too,” said Nicolas Verdier, project manager at La Mancha, a privately held gold producer that owns 55 per cent of SMI. One of the oldest operating large-scale gold mines in Côte d’Ivoire, the Ity mine, located near the border with Liberia on the western side of the Cavally River, has produced nearly a million ounces of gold in its two-decade history, but not much attention had been paid by former owner Areva to extending the life of the mine beyond 2017. Following La Mancha’s acquisition by Egyptian billionaire Naguib Sawiris for US$493 million in July 2012, an exploration and optimization strategy was put in place to give the Ity mine a second life. Results from the exploration campaign significantly increased Ity’s resources and encouraged SMI to launch a prefeasibility study in late 2013 to determine whether to replace the heap leach facility with a CIL plant. According to the study, completed last December, the updated reserves for the whole project amount to one million ounces.

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An intensive drilling campaign conducted by SMI in late 2014 and early 2015 is expected to bring significantly more resources to the project. SMI and La Mancha are now targeting around two million ounces in reserves by the end of this year, which would ensure an extended mine life of more than 10 years, starting in 2018. Construction work is planned to start in 2016 to ensure continuity between the old heap-leach operations and the new CIL plant. Verdier said the recent drilling campaign and the ongoing development of the engineering make SMI and La Mancha confident in the development of the project.

The river runs through it The project planners must contend with the Cavally River, which runs near two of the four newly planned pits: Walter and Daapleu. In addition to its proximity, the river is a challenge because it also tends to overflow its banks during the rainy season, requiring a wide floodplain. “We have no other choice than to build perimetre dykes to prevent the pits from being flooded,” said Luc-Bernard Denoncourt, project manager at SNC-Lavalin. “In the case of the Daapleu pit, we also need to build a diversion channel because the river runs exactly through it.” The building of the diversion channel must be handled carefully. “We are carrying out a hydrological study to get a modelling of the river and determine what impacts the channel could have,” said Denoncourt. The Cavally River has a fairly significant flow, with many different fish species present. Communities downstream depend on the river for fisheries, and construction work at Ity could affect spawning grounds and banks. “Technically and socially, it is a challenge and we will manage it carefully,” said Verdier.

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Another, related aspect is hydrogeology that could potentially put high water pressure on the pit slopes. “Since we are close to the river, the hydrogeological challenge is to reduce the water level to protect the slopes’ stability,” said Verdier. “We must pump enough water to reduce the water pressure on the slope. The challenge is to target the best location to optimize the dewatering cost.” To mitigate this risk, SNC-Lavalin has undertaken a hydrogeological campaign and drilled a series of holes, and is now carrying out pumping tests at the Daapleu pit. The third challenge related to water is the location of the tailings storage facility. The majority of the property is flat and, during the flood season, an average of two to three metres of water collects on the floodplain. “We can’t choose a floodprone area, yet we can’t put it too far for transport cost reasons, and we must stay within property limits,” said Verdier. In January 2014 a group of SNC-Lavalin geotechnical specialists went about selecting a location for the tailings facility. “We looked at the map, identified potential sites and proofwalked them to ensure we encountered no major physical obstacles,” Denoncourt explained. In the end, the tailings storage facility will be outside of the floodplain and surrounded by low hills, which minimize the cost of building a large dyke and mitigate potential environmental impacts. The selected area is located on the side of a hill, on the southwest side of SMI’s property.

and daaplites as hard as the Canadian Shield. These rocks will need much more intensive crushing and grinding. Both soft and hard materials will go through the same processing circuit though, in proportions that will change in time depending on the grades of their different zones. “This will require flexibility in the processing plant,” said Verdier. “Sometimes we will process more soft material, sometimes more hard material.” These mixes must be planned beforehand, since they are going to impact the plant’s design. And with five different outputs, mining optimization at Ity needs to be done properly. Finally, the project also entails displacing the village of Daapleu, which sits next to the future pit of the same name. Its 300 inhabitants, who depend on fisheries and agriculture, have outlined the conditions they expect to be met before they move including the location to which they would like to move. SMI’s relocation action plan for Daapleu is fully integrated into the ongoing environmental and social impact assessment studies.

Break it down to build it up “Not all mines have many pits with a completely different geology,” said Denoncourt, reflecting on the uniqueness of this project. “Optimizing the mining sequence depending on various satellites is not common to all mines. Add to that the completely different geologies, and you end up with a very interesting project where pit optimization and mine scheduling is crucial for the project’s success.” These challenges are not new to SNC-Lavalin when taken by themselves, however. “Each of these risks has being addressed individually,” said Denoncourt. “The challenge in every project is to identify risks and implement the optimal mitigation strategy. We managed to find low-cost alternatives to reduce each of them.” CIM

Things get harder SMI must also deal with two fundamentally different geological structures. Ity’s first pit was dug in soft laterites and oxidized, mineralized clays, extending from the surface to hundreds of metres deep. “This is a crumbly material, which we only need to crush a little, without grinding,” said Verdier. However, the new pits in the eastern side of the property consist of granodiorites, meta-volcanized sediments

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Courtesy of Rio Tinto

Q&A with Greg Lilleyman The head of Rio Tinto’s cutting-edge research speaks about his work By Eavan Moore

reg Lilleyman’s position as Rio Tinto Group executive of technology and innovation, gives him a leading role in shifting paradigms within the mining industry. The 25-year Rio Tinto veteran took questions from CIM Magazine at the CIM Convention in May, which he attended as a plenary speaker.

CIM: What do you like most about your job? Lilleyman: I’ve got a range of activities. Part of my role is to be accountable for global construction activity; all of that is very much here and now. At the other end of the spectrum, we are thinking up some of this new “Mine of the Future” work. At the end of the day, I’m motivated by building on the competitive advantage Rio Tinto holds over others in our sector through our focus on productivity and innovation. CIM: What makes you suited to the diverse work you do? Lilleyman: I like to be challenged. I don’t want to get up in the morning and know exactly what the day is going to bring. Knowing that one day I could be dealing with the start-up of a smelter in British Columbia and the next day I’m thinking about the use of technologies to address fatigue for truck drivers in our coal mines, having such a wide ranging role really appeals to me. I also think my engineering background gives me a broad interest in lots of areas. I’m a construction engineer by training, not a mining engineer, so it isn’t just the specific technical mining aspects that interest me about working with Rio Tinto. 48 | CIM Magazine | Vol. 10, No. 5

CIM: When did you first know that you wanted to devote your time to improving operations, as opposed to running them? Lilleyman: The more I started working on some of the automation programs, the more I could see that we were missing opportunities in the broader Rio Tinto sense. Over the last five or seven years, more and more of my work has been around finding new and better ways of running our operations. CIM: You have a data analytics centre in Pune, India – what do you hope to accomplish with this facility? Lilleyman: There are a lot of data points on our processing equipment, trucks and mobile equipment. But we haven’t used them all, historically. We’ve got in the order of 900 haul trucks across a range of operations around the world. Each of those haul trucks has 200 or so sensors. Most of the maintenance activities on those sorts of equipment are the same sorts of checks and inspections that we’ve done for 10, 30, 40 years. For us it’s about reducing the number of manual inspections, but, then equally, capturing what’s going on with a wheel strut or wheel motor or whatever the case might be. You can find out before it fails and make an intervention, especially if you can find out a few months ahead. Equally, you can extend the lives of equipment that don’t need to be changed yet. CIM: What is the first task of the data scientists working there? Lilleyman: We’ve got a couple of our asset management experts out of my group working in India with the data scientists and with equipment manufacturers like General Electric,

upfront OPEN PIT MINING

Komatsu and Cummins to start fine-tuning how can we go about doing this. They’re going back over the last few years’ data. Some of those trucks might have had an engine failure. They’re going back in time to see if there is a common thread of things that might have occurred one week, one month, three months out in advance. They can then test any patterns in real time to see if we can monitor those challenges. The data scientists don’t come with the skillset to know what to look for. You’ve got to have your maintenance professionals, your asset management team, who are the experts, who are asking the right questions and probing in the right area with the data scientists, who then bring the analytical skills and the data manipulation skillsets to find things that even a good smart engineer with a spreadsheet wouldn’t be able to see. CIM: Where do you expect the data-driven approach to predictive maintenance to have the most value? Lilleyman: Predictive analytics focuses on our iron ore operations in the Pilbara and the Kennecott Utah copper site. But in each case that just happens to be where we decided to start the pilot, rather than that there’s anything unique about those sites compared to others. It’s fair to say that our iron ore business is where we’ve put most of our early innovation focus, and it’s mainly because that’s where the greatest leverage is.

CIM: What are the most fundamental changes happening in the roles played by on-site operators? Lilleyman: Operators who are still sitting within an automated operation have become more supervisors of the process. If you look at the excavator operator, they are now the conductor of the orchestra, which is the trucks interacting with their digger, and they are now supervising what’s going on. The operator is positioning trucks where they want them; they are defining the way that the mining process happens a lot more. As a result, operators are able to sit back more objectively and look at efficiencies for the whole system. In the past they may have just focused on their own performance in driving a single truck. Now they can look at the movement of a group of trucks and the excavator to pick out opportunities they might not have been looking for before. Now they see a pattern that trucks aren’t getting back under the excavator as fast as they possibly could and maybe there’s a software change from the OEM that could fix this. CIM: One of the projects you shared in your plenary talk was the wind farm at the Diavik mine, which was conceived and implemented largely by local manager Liezl Van Wyk and other staff at the operation. How do you encourage independent thinking and leadership at operations? Lilleyman: We certainly expect that the local leadership at an operation will know their part of that business better than anyone else. So, of course they’re most likely to be coming up with the smartest ideas about what can improve their part of the business. This is why we encourage them to act and make decisions like they own the business themselves. By giving people that level of freedom and responsibility they come up with some wonderful ideas. CIM

CIM: At the plenary discussion, you and others made the point that employees at every level need to be informed and respected when change happens. How will employees at the level of the operation interact with this data centre? What decisions will they be making on the basis of the information that’s coming out of it? Lilleyman: We’ve got data scientists working with maintenance engineers and professionals who also then have to see the BOOKS CAN BE reality on the ground. They’re working PURCHASED THROUGH AMAZON.COM very much with the management and supervision and maintenance technicians LIST PRICE: $20.00 CDN on the site. They are asking, for example, “What can we monitor online that means this or that data point will give us the same information as the inspection that you do physically on the truck?” So, there are lots of interactions, whether it’s that or the operations centre that we deployed in Western Australia. We’ve got people a thousand miles away HOW TO connecting with operators remotely by BUILD two-way radios, giving them instructions. A PROJECT Things They Don’t Teach Those two groups have to both respect and understand each other’s role. I think Authored by Mr. Ted H Bassett, in all of those areas, you’re doomed if Authored with Mr. Jim R Cooke, Authored with Ms. Jennifer Parks you’re not engaging with your workforce on the way through. TED BASSETT,

HOW TO BUILD A PROJECT Things They Don’t Teach Ted Bassett has worked for more than forty years in the global mining and metals industry with projects ranging from an open-pit operation in post-communist Kyrgyzstan to the scandalracked Bre-X goldmine in Busang, Indonesia. He’s witnessed numerous instances of senseless risk-taking and reputation-ruining blunders from project managers who simply weren’t prepared enough for the job. Finally, prompted by his family and armed with dozens of case studies gleaned from his own personal experiences, Ted sat down with fellow engineer Jim Cooke and journalist Jennifer Parks to document these true stories—and provide a helpful resource that goes beyond a sterile textbook.

August/September • Août/Septembre 2015 | 49

Build Muscle, Burn Fat World crude prices show no signs of rebounding, so entrepreneurial and

creative minds are tackling the price challenge head on through innovation to preserve operating margins in the oil sands.

“If [innovation] made sense three years ago it makes more sense now,” said Dan Wicklum, chief executive of Canada’s Oil Sands Innovation Alliance (COSIA), as he ruminated on the slide in crude prices and profitability. Indeed, with few analysts predicting a healthy rebound any time soon, a powerful new form of energy is emerging in the oil sands: an accelerating drive to innovation and technology. Although the nature of bitumen extraction has always demanded innovation, the price plunge is bolstering efforts to new highs. At the RBC Capital Markets 2015 Global Energy and Power Executive Conference in New York in June, the industry’s leading players backed the momentum. “Our focus going forward will be on technology developments,” said Paul Masschelin, senior vice-president of finance and administration at Imperial Oil Ltd. “Going forward, we are going to need a lot of technological help,” added Doug Proll, executive vice-president at Canadian Natural Resources Ltd. The following month, Steve Williams, president and CEO of Suncor Energy, said at the company’s second-quarter results webcast, “We are looking at the next generation of technology.” Considerable energy is pouring into the cause, whether it is to boost labour efficiency, cut water consumption or solve the enigma of mature fine tailings. Many innovations were already well under way before the recent price downturn, but

By Graham Chandler Illustrations by Katy Lemay

the drastically reduced operating margins have put them under the microscope. “[The downturn] puts a stronger emphasis on the need to do [innovation],” said Michael Singleton, executive advisor at Kinetica, part of Innovate Calgary, the technology-transfer and business-incubation centre for the University of Calgary. How to turn that motivation into results can be tricky, however. Singleton, an old Suncor oil sands hand who has been in the business since 1978, said that much innovation comes through continuous improvement rather than a eureka moment. “The industry has constantly been innovating,” he said, citing two watershed breakthroughs as examples: the conversion of oil sands mining from bucket wheel to truck and shovel – key to making oil sands mining economical – and steam-assisted gravity drainage (SAGD), which unlocked billions of barrels of resources deeper beneath the surface. “Each of these examples is composed of smaller technologies that enabled them. In the case of truck and shovel it was the technology around tires and the steels they were using for the trucks and shovels.” SAGD is very similar, he said. “It began with the AOSTRA (Alberta Oil Sands Technology and Research Authority) test facility where they sank a shaft and ran an adit out under the limestone and drilled that into the tar sand. So it was recognized you could soften the bitumen August/September • Août/Septembre 2015 | 51

with steam and get it to flow out.” But the cost structure was not there yet. “Then along comes horizontal drilling,” he continued. “And it was horizontal drilling that enabled SAGD to become a cost-effective technique.” Kinetica helps accelerate the process of achieving breakthroughs. “You don’t just turn a switch on and off,” Singleton explained. “The majors and the medium-sized companies have a suite of technologies they have been working on for decades in some cases.” They define efficiencies they want to achieve but often lack access to the technology solutions they need. Conversely, smaller innovative companies may have the solutions but not the connections to implement them. That in part is where Kinetica comes in; finding some of these missing links to feed into that innovation chain, said Singleton. “Innovations could come from a single inventor in a garage, a service company or a major corporation.” Breakthroughs are often long-term developments, but Singleton said he has seen a trend over the past 12 months. “The emphasis is on energy efficiency, which also [addresses] carbon emissions.” One area he has seen gathering momentum is the movement away from using water in extraction facilities. “People are working on solvent extraction technologies, but again that’s not new,” he pointed out. “It has been looked at for 20 or 25 years. But with people making small advances day by day, we might be able to realize it.” Indeed, Suncor’s Williams said in the second-quarter webcast, “We’re very encouraged with what we see in solvent technology. Hopefully, we will be able to move to essentially water-free extraction. That’s why we are working so hard on this new technology.” Importantly, many new technologies need assistance for market acceptance. Kinetica tries to make sure the innovators are ready. The technology has to work, to be fundamentally sound. “We find that with a lot of the smaller companies they don’t have a good management structure or experience,” said Singleton. “They don’t have the normal requisites like financial strength or good governance. So we move them through various stage gates of selection, making sure that when they get to market with their technology that they are going to succeed.” Kinetica already has two or three small innovations 52 | CIM Magazine | Vol. 10, No. 5

ready for field trials, according to Singleton. Citing confidentiality considerations, he declined to release details but did say that “right now there are 12 or 13 technologies moving through our stage gate process.” Petroleum Technology Alliance Canada (PTAC), has also observed the downturn influencing the pace and direction of new innovation. “It has certainly put significant focus on reducing costs,” said Soheil Asgarpour, PTAC’s president. “Innovation plays a major role in being competitive with countries like Saudi Arabia and [those in] the Middle East. So the industry is putting more focus on cutting costs and finding technologies that would enable sustainable development while reducing the environmental footprint and negative social consequences, but at the same time increasing production efficiency and profitability.” To that end, PTAC has its Phoenix Network, a group of six oil sands companies focusing on cost reduction following the advent of low commodity prices. Originally known as the Oil Sands Leadership Initiative (OSLI), Phoenix is concerned with developing technologies related to non-environmental areas of SAGD. “It’s about reducing cost, increasing production rates, increasing reserves,” Asgarpour explained. Phoenix holds several workshops each year for articulating challenges and finding technologies for SAGD development and production. “At the workshops we clearly define what the challenges are and then conduct a search to find technology solutions,” said Asgarpour. “These searches could be done at an international level to see if any other organization or industry has technology that can help us.” A potential solution is initially identified and then a consortium is formed from the members of the Phoenix Network. The consortium takes solutions all the way from concept to commercialization including field tests and financing. PTAC provides funding for up to 15 per cent with no expectation of intellectual property (IP) ownership. “That puts us in a unique position to be a neutral broker to negotiate the IP ownership between the funder and the research provider,” said Asgarpour. Funding is from PTAC’s own sources, government grants or other sources such as the Natural Sciences and Engineering Research Council of Canada.

Making the connection There have recently been a slew of innovation-focused events in Calgary designed to connect small companies with the money they need. This year’s Innovation in Technologies Awards at Calgary’s Global Petroleum Show in June showcased some of the new innovations coming to market. One of the nominees, QS Energy Inc., specializes in a new viscosity-reduction technology. Harnessing the principles of electrorheology – the application of a high-strength, high-intensity electrical field to change the mechanical behavior of fluids – the system decreases the viscosity of crude oil by causing particulate matter to clump together. Hundreds of samples, ranging from bitumen to superlight condensates, have been lab tested. The company projected that a decrease of 20 per cent to 25 per cent in viscosity would lead to a gross benefit to the operator of $560,000 to $700,000 per month, or $6.7 million to $8.4 million annually. The most recent testing has been on dilbit, or diluted bitumen, which is typically the form oil sands products take as they flow through pipelines to market, said Gregg Bigger, chairman and CEO of QS Energy. In a major new innovation gathering just before the Global Petroleum Show, COSIA held its first Innovation Summit in Banff, Alberta. Delegates – many international – attended sessions on COSIA’s four environmental priority areas (EPAs): land, water, tailings and greenhouse gases (GHG). One presentation at t h e

summit featured an innovation by InLine Dewatering Ltd. Its principle is that dewatering total oil sands extraction tailings as they travel via pipeline from extraction to deposition – while retaining all the fines and sand – will allow for a reduced environmental footprint and would immediately recycle hot water back to the extraction process. The dewatered tailings would eliminate future fluid fine tailings formation and allow for early reclamation of these deposits – both a cost and an environmental advantage. One more recent and early-stage innovation, also driven by cost and environmental advantages, is Steam Environmentally Generated Drainage (SEGD), the brainchild of Bernard Chung, president and owner of Valence Energy and a longtime oil sands expert. His SEGD solution involves three horizontal wells and recently received Canadian patent approval. Produced water injected into an upper well is drained downward to a second well, where it is vaporized by the combustion gases of an in-situ gas burner. The steam and gases flow outward, heating and mobilizing the bitumen. Bitumen and water (primarily steam condensate) are collected in the lower production well; produced water is reinjected, and combustion carbon dioxide (CO2) is automatically sequestered. The concept is being proved using numerical reservoir simulation and laboratory physical modelling this year and into 2016, Chung said. Design and shop testing of the downhole burner are scheduled for completion in 2017, and field piloting to demonstrate commercial viability is expected between 2018 and 2020. Chung is currently seeking industry interest and participants for funding these latter phases. “SEGD can be retrofitted into existing SAGD and heavy oil projects as new SEGD wells and well pads,” he explained. Chung said he reckons savings from using SEGD over SAGD include reduction in initial capital costs of about $10,000 per bpd of oil due to significant reductions in plant and steam pipeline costs for water treatment, steam generation and pipelining. In other words, 1,000 bpd of oil production would save $10 million in upfront capital costs. And comparable or lower operating costs are realized due to decreased energy needs, no CO2 emissions tax, less water treatment, no surface steam generation and lower facility maintenance costs. The search for oil sands innovation is increasing worldwide. In July 2014 GE launched its GHG ecomagination Innovation Challenge: Energy Efficiency Solutions for Canada’s Oil Sands. Awards were offered in two categories: Higher Value Uses of Low Grade Heat and Improved Efficiency of Steam Generation. It is an indicator of the worldwide nature of oil sands innovation that in addition to entrants from Canada and the United States, among the eight winners were innovators from India, the Netherlands, the United Kingdom, France, and Italy. Awards totalled C$1 million in development grants and cash prizes. COSIA too is proactively identifying and tapping international sources for good ideas. For example, last fall, COSIA sent a team into Israel and scoured its innovation systems – private and public sectors, small and large organizations – and triaged its innovation capacity, said Wicklum. “They had a August/September • Août/Septembre 2015 | 53

series of scoping meetings with a whole suite of innovation organizations,” he noted. It is an example of what COSIA calls “innovation hubs,” which enlist associate members, already numbering almost 40. “It is a way we can really extend the reach of our oil sands companies very effectively and efficiently around the world,” he said. The drive for new innovative ideas has boomed in the past year, but there are still many barriers. Even when proven and funded, adopting new innovations can be fraught with risk. “You are making a targeted assessment as to what benefit you’ll get out of it,” said Allan Fogwill, president and CEO of the Canadian Energy Research Institute. “Any time you make a change to a process there is a risk of something going wrong. You don’t want to get in a position where you have an efficiency improvement – say 10 per cent reduction in energy use or 10 per cent increase in recovery rate – when putting that change in place could have you not producing for weeks or months.” And it is more critical with today’s thin margins; there is less room to recover. Fogwill said he thinks success often relates to company management experience: “If management has a history of

All-steel casing Cut resistant Deep tread High puncture resistant Stability SR S R 45 M

Traction

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implementing new projects well, then the risk of something going wrong is lower.” What is on the horizon for oil sands innovations? “Companies don’t make investments in this industry with just a three- or five-year vision,” said Singleton. “It is 10, 15, 20.” He said he reckons the present downturn will be longer than past ones, adding, “So we don’t just batten down the hatches for a short period. It is changing the way we do business.” CIM

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Courtesy of Porcupine Gold Mines

A rock and earthen berm is the centrepiece of the companyâ&#x20AC;&#x2122;s efforts to limit the impact of the mining operations on the residents of Timmins.

Neighbourhood watch Timmins was born when Benny Hollinger scraped some moss from an outcrop at an abandoned excavation in the early 1900s and revealed a rich vein of gold. Today, as Goldcorp develops its Hollinger open pit next to the city, its challenge is to build on the cityâ&#x20AC;&#x2122;s great mining tradition as discreetly as possible. BY CHRISTOPHER POLLON

y the time Goldcorp Porcupine Gold Mines (PGM) took over the former site of the past-producing Hollinger mine (as part of a land package acquired by Goldcorp in 2007 from Kinross and Placer Dome), it had been fenced off and abandoned since the late 1980s. The 100-hectare area was pockmarked with surface micro pits and sink holes connected to 600 kilometres of abandoned shafts, drifts and cross-cuts, all the legacy of Hollinger mining operations that began in 1910 and eventually produced about 20 million ounces of gold.

56 | CIM Magazine | Vol. 10, No. 5

After years of technical studies, PGM (a joint venture between Goldcorp Canada Ltd. and Goldcorp Inc.) estimated that the old Hollinger site still holds reserves of about 528,000 ounces that could be accessed via open pit. There was just one problem: when the first Hollinger mine was built, it was at the epicentre of a black-fly infested patch of bush known as the Porcupine camp. Over the years, the city of Timmins, which grew up from its earliest days around this very stretch of Precambrian rock, had developed into a city of 45,000 people.

Image courtesy of Newmont Waihi Gold

Mining the site now would mean blasting and mining an open pit directly adjacent to the downtown core. The proximity of the mine to the downtown has shaped the new Hollinger project from the outset, said PGM’s open pit superintendant, Darren Fasciano, who likens the mine to a huge, urban rock quarry. “We are scaling down our drilling, blasting and a lot of other activities to accommodate being so close,” he said. On the day Fasciano spoke to CIM Magazine PGM had already completed 5.26 million tonnes of pre-stripping since construction commenced in February 2014. The company had released a best management plan long before the first blast occurred. The plan, published in the fall of 2012, outlined how the site would be mined and how impacts would be minimized. A centrepiece of the plan was to surround the mine with a rock berm to control the noise, dust, air overpressure and vibrations from operations in the pit. As of late June, more than four million tonnes of the total pre-strip material has been used to construct the berm. Over the last year a little less than 500,000 tonnes of ore has been trucked to a mill at PGM’s nearby Dome mine as well, allowing the company to commence limited gold production while still in the construction phase. Sections of the wall, ranging in height from 10 to 25 metres and a total of 3.6 kilometres in length, are completed, and the exterior slope is being topped with overburden to eventually be seeded with vegetation. “It will look like a green hill from the city side,” said Brendan Zuidema, general manager of the mine. Situated just blocks from the city library and directly behind a Comfort Inn, the mine’s location means the day-today operations of the project, especially blasting, have been well honed. In the preliminary planning stages, the company used modelling to determine the permissible size of blasts to limit both vibration and air pollution from dust and explosive emissions. Blasting can only happen during two “windows” each day in the late morning and mid-afternoon, so that Timmins residents and businesses can work around a predictable schedule. During each of these daily blasting windows, no

more than 30,000 tonnes of rock can be moved by blasting, with a limit of 9,000 kilograms of explosives. Mine construction currently takes place between 7 a.m. and 7 p.m. daily, while the berm is still in construction. Once the berm is complete and PGM’s “noise modelling” is validated this August, the production phase of the mine will begin on a continuous 24/7 schedule. Blasting will still be restricted to the day shift, however. All the ore will be crushed and milled at the nearby Dome processing facility. Compared to its past-producing Pamour open pit a few kilometres northwest of town, which would have used 6.5inch holes for blasting, here it is limited to drilling 4.0- to 4.5inch holes to set up smaller explosions. “That creates a lot of challenges,” said Zuidema, meaning the company has tripled the number of holes it drills with less room to manoeuvre, loading explosives in closer-than-traditional proximity. To control emissions and maximize safety, it has also adopted the cutting-edge gas explosive Titan SME 1000 – a site-mixed emulsion product from Dyno Nobel – which only becomes explosive when all the ingredients are combined in a hose at the site. Blasting during the construction phase has not been without incident. Last summer, fly rock escaped the site after an explosion and damaged a vehicle in the staff parking lot (no one was injured). A follow-up investigation resulted in changes to blast sign-off protocols and increased scrutiny of the blast matting process and of “pioneering blasts” – the first blasts to level the ground after the removal of overburden exposes the rock, which at this site occurs on uneven ground. The company maintains it is not taking any more chances. “We’re the biggest consumer of blast mats in probably all of Canada,” said Zuidema, noting that matting each blast adds to the complexity of the work. Two dedicated handlers place two to four layers of mats over every blast (there are 1,400 mats on site at this time), which must then be removed once the blast is completed. The entire process can take two to three days. Trucks and other heavy equipment are expected to be among the loudest aspects of the operation once 24/7

NEWMONT’S MARTHA OPEN PIT GOLD AND SILVER MINE WAIHI, NZ POPULATION: 4,500 MINE LIFE: 1987–2016 (OPERATIONS CURRENTLY SUSPENDED)

CANADIAN MALARTIC PARTNERSHIP MILL THROUGHPUT 55,000 TPD MALARTIC, QC POPULATION: 3,300 MINE LIFE: 2011–28

PGM HOLLINGER MINE MINE OUTPUT10,000 TPD TIMMINS, ON POPULATION: 45,000 MINE LIFE: 2015–23 Newmont’s communication efforts for its Waihi operations, now owned by OceanaGold, served as model for Goldcorp’s Hollinger project. August/September • Août/Septembre 2015 | 57

Photo courtesy of Porcupine Gold Mines

The Hollinger pit and the surrounding town of Timmins from above

2015 CIM STUDENT FUNDING OPPORTUNITIES Over $225,000 in scholarships, bursaries and awards are available through CIM, its societies and branches, as well as the CIM Foundation (CIMF). CIM empowers the next generation of industry leaders to achieve their academic goals. For more information on the types of scholarships and how to apply, visit www.cim.org/Students/Scholarships.

58 | CIM Magazine | Vol. 10, No. 5

operations begin. The Ontario government has mandated the company to limit noise outside of the berm to 50 decibels (db) during the day shift – equivalent to moderate rainfall, according to PGM’s best management plan – and 45 db at night, or a “refrigerator humming.” To help achieve this, haul trucks will use sound-dampening panels installed around engine compartments, corrugated aluminum, foam–filled “louvres” on the front of the trucks and quieter aftermarket mufflers. Water trucks will be a constant presence on the site to control dust, which will also be suppressed through the use of calcium chloride and an environmentally benign product called DusTreat, manufactured by GE. Perhaps the most novel feature of the project will be its live monitoring system, which measures noise, dust and vibration from 17 separate stations positioned around the berm periphery. The system was created to help the company measure impacts for internal use and ensure that levels remained below the regulatory limits, but it soon evolved into something more. “We realized that we could share the data being generated by the monitoring system with the general public,” said PGM’s communications coordinator, Patricia Buttineau. “We decided this would be a great way of ensuring our transparency with the community and we had buy-in from all levels of [PGM] and Goldcorp.” The requirements for the monitoring system were so particular that the company hired to provide it – Danish environmental engineering firm Brüel & Kjær – had to develop much of it from scratch. Monitoring systems to date are often designed to measure noise levels around airports, but the contractor was tasked with enabling the measurement of dust and vibration as well, all in a single system. “I don’t think there’s any other operation that has the three elements in the monitoring system,” said Fasciano.

Engineered Wear Solutions There is no underestimating the public relations challenge of building and operating an open pit in a city, even in a single-industry town like Timmins that has grown up around mining. To address concerns that the project will damage government and private property outside the berm over time, PGM has been proactive in getting baseline structure building data for some of the buildings close to the mine, and has established a protocol to address potential concerns. Anyone who feels that mine operations have damaged their property can file a claim with PGM’s community liaison coordinator. PGM employees will conduct an initial investigation and, if necessary, a third-party engineer, retained by PGM, will perform a separate inspection and ultimately rule on the cause of the damage and the potential recourse. Since March 2013 the company has received 29 claims of suspected property damage; nine of these claims have resulted in compensation to the property owner, and as of early July, two remained under investigation. In designing a lower-impact operation, PGM has looked to emulate other mines in the world. Newmont’s Martha mine in New Zealand, which has operated next to a town since 1987, inspired the creation of a Hollinger Community Advisory Committee, made up of local community members. “It’s a sounding board between the community and the company,” said Buttineau. “If someone is, for whatever reason, not comfortable coming to the company with a concern, they can approach any member on the committee.” PGM also examined the Canadian Malartic mine across the border in Quebec, where in July 2008 Osisko Mining relocated about 150 homes to a new neighbourhood to make way for the mine. Like at Hollinger, the company built a berm to separate the mine from the remaining built environment, uses extensive matting for blasts, and has hosted many public open house sessions to inform the public on developments. The Malartic experience has also guided how reclamation will proceed at the end of Hollinger’s eight-year mine life. “It’s one thing to mine it, it’s another to close the thing,” said Zuidema. “We’re doing a lot of work and drawing from their experiences.” The wider reclamation plan at Hollinger is to one day convert the 250-acre mine site into a city-owned, public-access amenity that could include hiking trails, campground facilities and a single, extremely deep lake. Buttineau said reclamation will be progressive, beginning with the seeding of the berm. A trail system built around the outside perimeter of the berm will follow. Upon closure of the mine, trails will eventually run up and down the sides of the berm, which will be re-sloped in places for better access. And finally, most of the pit footprint will be flooded to create a lake roughly 800 metres by 500 metres in size – reaching depths of 120 metres as water is allowed to slowly collect in the pit. The company’s proposed plan for the site is due at the end of this year. “Our hope is to return land to the city,” said Buttineau of their land use plan that is still being finalized. “It will become the crown jewel in the centre of the city of Timmins.” CIM

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August/September • Août/Septembre 2015 | 59

THE 36TH INTERNATIONAL CONFERENCE OF SAFETY IN MINES RESEARCH INSTITUTES THE FUTURE OF MINING SAFETY RESEARCH PLENARY SPEAKERS MARK CUTIFANI Honorary Chair Chief Executive Anglo American

LEO W. GERARD International President United Steel Workers

JIM JOY Founding Director Minerals Industry Safety and Health Centre (MISHC) University of Queensland

WORKSHOPS > CONTROL STRATEGIES AND TECHNOLOGIES FOR DIESEL AEROSOLS AND GASES

SATURDAY, OCTOBER 24, 2015 Instructors: Dr. Aleksandar Bugarski, Senior Scientist, NIOSH Dr. Josef Stachulak, Manager, Strategic Diesel Research, Mirarco Mining Innovation > WORKSHOP ON THE ISSA MINING STRATEGY SUNDAY, OCTOBER 25, 2015 Workshop Leader: Helmut Ehnes, Secretary General-ISSA Mining Section > WORKSHOP ON LEADING PRACTICES IN SAFETY RISK MANAGEMENT WEDNESDAY, OCTOBER 28, 2015 Instructors: Jim Joy, Jim Joy Associates Dr. Patrick Foster, University of Exeter Glen Lyle, Mirarco Mining Innovation

In Collaboration With

OCTOBER 25-27, 2015 SUDBURY, CANADA REGISTER AT

ICSMRI.CIM.ORG

Automated supervision

technology

FLEET MANAGEMENT

By Eavan Moore

Courtesty of Hexagon Mining

Fleet management systems are vital for the monitoring and deployment of the vehicles used on site to optimize open pits. The challenge now is how to integrate, analyze and store the vast amount of data collected in the process.

A dispatcher monitors a mine’s fleet using Hexagon Mining’s Jmineops.

“M

assive queuing at the shovels and loaders.” That is how Michael Lewis, vice-president of product innovation at Modular Mining Systems, described the first problem solved by a third-party fleet management system (FMS) in 1979. A modern-day FMS can address vehicle bunching, but these have expanded in scope to solve more than just that problem. Major vendors now deliver products that make real-time, smart decisions for mines, and encompass a much broader range of technologies, analytical tools and ways of accessing data. The Canadian market for open-pit systems is dominated by Modular Mining’s DISPATCH product, Caterpillar’s MineStar, Wenco’s Wencomine, and Hexagon Mining’s Jigsaw (formerly part of Leica Geosystems). Although three of these systems are owned by equipment manufacturers, they are all compatible with multiple equipment brands and share the same essential features. Relying on now-ubiquitous wireless and radio connectivity at mine sites, the software uses a combination of real-time conditions and the existing mine plan to assign personnel to equipment and to calculate the most cost-efficient routes and schedules for a vehicle fleet. Normally, a dispatcher monitors the system, approves any decisions not carried out automatically, and alters the decision-making algorithms as needed. However, there are small mines that choose a dispatcher-free set-up. Matthew Desmond, vice-president of global services at Hexagon Mining, sketched out Jigsaw’s capabilities. “It starts with simple things like crew line-up,” he said, “and then efficiently assigning the people to the resource.” Once machines are operating on site, the system makes decisions based on parameters like traffic on the road, fuel usage and tire temperature. “Whether the tires are getting warmer or cooler will determine which type of route we’ll send the vehicles on,” said Desmond. The type of material being excavated and loaded into the truck is also optimized. Mines that blend together different ore grades can time their excavation so that the blending takes place “live” at the crusher, rather than stockpiling ore first. August/September • Août/Septembre 2015 | 61

Smarter and more integrated

“I think the biggest thing that we’re seeing, within the last five years especially, are trends towards smarter systems with more direct automation,” said David Noble, product manager at Wenco, adding that this leads naturally towards integrating information from other suppliers’ technologies into a client’s FMS. Wenco’s product uses the Wenco Data Exchange Service – a web service using an application program interface – to hook into other systems. For example, a crusher can have a dispatch-specific programmable logic controller that monitors and reports the crusher’s bin levels or operational status, using the feed from manufacturer-provided sensors. Wenco’s system receives this information in real time and can redirect oreladen haul trucks as needed. Mines increasingly look for one-vendor technology suites where they might in the past have pieced together different suppliers’ products. The top four FMS vendors have a number of technologies either included directly in their fleet management product or sold separately, but that are readily integrated with the FMS. Examples include collision avoidance systems and global navigation satellite systems that can track shovel activity very closely, provide important updates on bench progress and help direct the machines.

Data analytics

Some of the integrated systems, especially equipment health monitoring, produce enormous amounts of data. The most frequent questions Wenco gets from prospective customers, according to Noble, are how the reporting works and what kind of access they have to the data. “I think in the end, 62 | CIM Magazine | Vol. 10, No. 5

Courtesy of Hexagon Mining

At Barrick Gold’s 34-truck Pueblo Viejo mine in the Dominican Republic, a production dispatcher and a maintenance dispatcher cover each shift, overseeing a collection of eight Jigsaw modules that manage drills, shovels, trucks and dozers. Ali Yaguas, FMS coordinator at Pueblo Viejo, noted that Jigsaw’s algorithms calculate routes to minimize the time trucks spend travelling empty by factoring in, among other things, the shovel’s digging rate to set the rhythm for truck loading. Yaguas has higher ambitions for his FMS: Barrick has embarked on a project to install sensors on vehicles to take advantage of Jigsaw’s condition-monitoring capabilities. Yaguas hopes to eventually gain the capacity to define and recognize specific events. More sensors will, for example, detect if the oil temperature in the loader rises too high, alerting the central FMS that a decision needs to be made about that digging area. In that way, Pueblo Viejo is typical. Many mining customers start off with a limited set of capabilities for their FMS, but a growing number of them are experienced technology consumers with high expectations. Major vendors are currently working to meet more comprehensive demands: automated systems with a diversity of technologies, deeper analysis of the data produced and access to that data via the cloud.

they know that the data really is one of the most important things a fleet management system provides with its full moniHexagon Mining’s toring of the mission,” he said. Jigsaw positioning Wenco and parent company system (Jps) combines GPS satellites and a Hitachi have been developing more ground-based network advanced analytics engines to help to track vehicles. customers recognize and predict trends. Pueblo Viejo is working on such a project with Hexagon Mining. Meanwhile, Caterpillar joined forces with the data analytics company Uptake in March to develop a predictive diagnostics platform intended to avoid failures. Modular Mining is also working on advanced analytics solutions to automate the analysis of the terabytes of data many of its customers generate each year.

The cloud

All this computing has to take place somewhere, and miners are increasingly interested in minimizing that activity on local servers by trying cloud-based data processing hosted in a central operations centre, on the FMS providers’ servers or via another service provided by the likes of Amazon or Microsoft. Yaguas said that while Pueblo Viejo’s system is hosted on site, he is very interested in future cloud possibilities. He went on to say he expects that accessing remotely hosted services would cost less than buying and maintaining servers on site. “That’ll be a great opportunity for mining companies during tough economic times,” he commented. In 2014 Wenco performed a proof-of-concept study with Teck and Hitachi to test the viability of a distributed version of the system using a live mine interface with remote cloud-based database servers. Noble said that to keep up with new trends, Wenco is also rewriting its software to be more web based. “We’re hoping to come out with a [sixth generation] in 2016 that will be all refreshed software,” he said. Modular Mining will soon roll out a cloud-based solution for its maintenance management offering. “Through its 175plus OEM interfaces, the system collects telemetry data from all of the different equipment manufacturers’ systems, like an engine monitoring system, drive system or payload, onboard the equipment,” said Lewis. “The data gets transferred into the cloud, where it’s stored and processed. This changes the business model by allowing mines to implement

Courtesy of Modular Mining

less capital-intensive solutions that are also scalable across corporations. The cloud-based software as a service model helps drive big-data analytics, which is a very exciting area.” That is not to say the essential scheduling, dispatching and real-time optimization functions of the FMS should always rely on the cloud, cautioned Lewis. “What happens if the Internet goes down for an hour or two at the site?” he asked. “And that still happens. Imagine if you had eight hours a week of downtime for your fleet management product. Not everything is cloud-suitable today.”

Updated software

In addition to developing these big-picture changes, vendors are also making smaller continuous updates. Modular’s updates are often driven by specific customer requests. For example, when a North American customer asked for ways to cut fuel consumption, Modular developed the Idle Monitor module for its DISPATCH system to detect when equipment should be shut off. Desmond said there have been many updates to Jigsaw in 2015 alone. By the end of the year, collision avoidance integration will be released. Another new feature, Jasset, allows the mine to track all mobile and semi-mobile assets, including water pumps and portable toilets, some of which can get misplaced between shift changes. Yet another offering, Jsuper, can now be configured to show the supervisor real-time messages when vehicles exceed speed limits. Wenco’s onboard haul truck navigation system, PitNav, will soon add peer-to-peer communications to its existing proximity detection offering on heavy machinery and light-duty vehicles so that operators can respond to potential hazards caused by other machines nearby. But with so much activity at a mine site, constant alarms could become annoying or altogether ignored by an operator, so Wenco plans to integrate FMS logic into proximity detection. An alarm will sound, for example, if a light-duty vehicle is following too closely behind a haul truck with a large load that could fall off the back, but there will not be an alarm for expected proximity events such as multiple trucks dumping at the crusher. Wenco has been redesigning its dashboards and web reports to simplify the interface and support mobile devices, making it accessible to more users. It has also introduced more operator-level customization: a reporting tool that tracks key performance indicators can now display differently on each vehicle to show the operator his or her progress versus targets or fleet averages. Caterpillar’s MineStar added proximity awareness with its Detect capability set in 2012. Cat’s system filters alarms by machine type and also allows truck drivers to report hazards like rocks in the road. In the last few years, Caterpillar has also created a function to schedule personnel, simplified reporting and improved data analysis in its machine health capability set, and introduced semi-autonomous dozing. Spokesman Mark Sprouls said Caterpillar is working on a platform for portable devices, which would be useful for field supervisors.

User diversity

Modular Mining’s The most advanced work is takPTX in-cab mobile platform ing place in partnership between displays information gathered from its suppliers and large companies with DISPATCH fleet complex operations. Modular Minmanagement system. ing and its parent company, Komatsu, partnered with Rio Tinto in 2011 to run autonomous haulage at Rio Tinto’s Pilbara operations. Cat has autonomous truck fleets at Fortescue Metals Group and BHP Billiton mines in Australia, using the one component of MineStar only available for Cat equipment. But it is the basic features that consistently attract new users like Copper Mountain in British Columbia, a comparatively small operation that made the leap to an FMS in April 2014. CFO Rod Shier commented, “We initially struggled with the idea of an FMS, but are very glad we moved forward with this type of technology as the benefits are measurable almost immediately.” CEO Jim O’Rourke, for his part, explained that the dispatcher can now see into places that thinly stretched shift supervisors could not. Before installing the FMS, the mine had unsuccessfully combated a problem with its truck payload measurement, which was reading higher on first loading and then dropping after a few hundred metres as the load began to settle. Modular Mining’s DISPATCH system provides real-time payload information to the dispatcher, who can now quickly catch underloading and ask the operator to add another 10 or so tonnes. Achieving the same productivity gains by adding another truck to its fleet of 21 would have cost about $4 million to buy and $2 million a year to operate. Desmond said mines with as few as 10 trucks have been looking to FMS in the last few years, often seeking savings in the downturn. “Normally those sites aren’t as driven by technology as the bigger sites that have a hundred or two hundred trucks,” he added. “Technology itself is also evolving, so it’s becoming much more attainable for people now.” CIM

August/September • Août/Septembre 2015 | 63

DIMENSIONS MONDIALES DE L’EXPLOITATION MINIÈRE

2016

AMÉRIQUE DU NORD AMÉRIQUE DU SUD AUSTRALASIE AFRIQUE

Du 1 au 4 mai

L,excellence au premier plan

APPEL À CONTRIBUTIONS

MÉCANIQUE DES ROCHES, GÉOLOGIE ET EXPLORATION CARACTÉRISATION DE LA MASSE ROCHEUSE CONCEPTION DES MINES INSTRUMENTATION ET SURVEILLANCE MÉTHODES D’EXPLORATION

EMPREINTE ÉCOLOGIQUE DE L'EXPLOITATION MINIÈRE GESTION DE L'ÉNERGIE RÉCUPÉRATION D'ÉNERGIE ENVIRONNEMENT GESTION DES RÉSIDUS ET DES DÉCHETS MINIERS ET FERMETURE DES MINES

ORGANISATIONS DURABLES L'ÉTHIQUE DANS L'EXPLOITATION MINIÈRE COMMUNAUTÉS, DIVERSITÉ ET INCLUSION RESSOURCES HUMAINES PROFIT ET LA DURABILITÉ

INNOVATION ET NOUVELLES IDÉES L’AVENIR DE L’INDUSTRIE MINIÈRE APPLICATIONS DE GÉNOMIQUE ANALYTIQUE DES DONNÉES GNL ÉNERGIE ÉOLIENNE EXPLOITATION MINIÈRE EN MER EXPLOITATION MINIÈRE PROFONDE EXPLOITATION MINIÈRE SPATIALE

PRÉSIDENT DE LA CONFÉRENCE Tom Broddy, directeur des projets d’ingénierie, Taseko Mines Ltd.

PRÉSIDENT TECHNIQUE Scott Dunbar, directeur de département à l’institut de génie minier Norman B. Keevil (NBK), université de la Colombie-Britannique

EXCELLENCE OPÉRATIONNELLE

CONSEILLER TECHNIQUE Greg Rasmussen, directeur du développement des procédés et de l’entreprise, Glencore Technology Canada

DU TRAITEMENT À LA TRANSFORMATION AMÉNAGEMENT DES MINES EXPLOITATION DES PROCESSUS OPÉRATIONNELS ENTRETIEN EXPLOITATION SÉCURITÉ

INFORMATIONS IMPORTANTES À CONSULTER AVANT DE SOUMETTRE VOTRE RÉSUMÉ • La conférence permet une présentation de 20 minutes et une période de 5 minutes pour répondre aux questions du public. • Les résumés ne doivent pas dépasser 200 mots et doivent être soumis en ligne au plus tard le 30 octobre 2015. • Les auteur(e)s seront informé(e)s de l’acceptation de leur candidature au plus tard le 21 décembre 2015. • Les intervenant(e)s doivent s’inscrire et s’acquitter des frais d’inscription inhérents aux auteur(e)s au plus tard le 25 mars 2016 afin de réserver leur place dans le programme. La viabilité financière des conférences dépend des frais d’inscription de toutes les catégories de participants. Un tarif préférentiel d’inscription sera proposé aux intervenant(e)s en reconnaissance de leur contribution spéciale à la conférence. • Envoyez vos manuscrits sur papier ou vos présentations PowerPoint au plus tard le 26 avril 2016. Veuillez noter que les présentations PowerPoint téléchargées sur le site Internet ne seront pas utilisées pour la présentation sur le site de la conférence. Une sélection d’articles présentés lors du congrès de l’ICM 2016 sera disponible en ligne par le biais des archives virtuelles de documents techniques de l’ICM (cim.org).

ENVOYEZ VOTRE RÉSUMÉ AVANT LE 30 OCTOBRE 2015

CONVENTION.CIM.ORG L’institut canadien des mines, de la métallurgie et du pétrole (ICM) détient et gère le congrès de l’ICM.

SECTION francophone 71 Technologie et innovation -

La force de l’industrie pétrolière Les géants du secteur des sables bitumineux sont soumis à une forte pression de la concurrence et doivent innover pour rester dans la partie par Graham Chandler

66 Lettre de l’éditeur 66 Mot du président

La version française intégrale du CIM Magazine est disponible en ligne : magazine.CIM.org/fr-CA

67 Abitibi Royalties se sert de l’Internet pour

établir le contact avec des petites sociétés minières en difficulté par Michael Yang

68 Les actualités en bref 75 Surveillance de quartier

Le projet Hollinger de Porcupine Gold Mines, à proximité de Timmins, est surveillé de près par Christopher Pollon

lettre de l’éditeur

L’innovation mesurée en barils

es activités minières et in situ qui permettent l'extraction du bitume des gisements de sables bitumineux représentent le patrimoine le plus impressionnant du pays en termes d'innovation industrielle. Les gisements en eux-mêmes n'ont pas été les plus difficiles à trouver ; certains d'entre eux sont connus depuis plusieurs siècles. Les plus importantes découvertes se sont frayées un chemin jusqu'aux laboratoires et ont été soumises à des essais de terrain après des années de dur labeur et de valeureux échecs, comme le montre l'article de notre section Folklore minier (p. 82, uniquement disponible en anglais) consacré au développement de la technique d'extraction à l'eau chaude. Ce procédé, développé par Karl Clark, chercheur spécialisé dans les sables bitumineux, a permis d'extraire les sables bitumineux se trouvant juste en dessous de la fondrière dans le nord de l'Alberta, mais seulement après des décennies de travaux pour régler les détails qui pouvaient rendre l'exploitation de ces gisements gigantesques économiquement viables. Lorsque la technologie de forage horizontal a révélé le potentiel de la méthode de drainage par gravité au moyen de vapeur (DGMV), l'industrie s'est retrouvée face à une aubaine qui s'est traduite par la production de milliards de barils supplémentaires. Peu de temps après que les premiers puits de DGMV sur le site de Foster Creek de Cenovus aient commencé à prouver leur rentabilité, l'ampleur des réserves de pétrole du pays a explosé. Ces progrès, associés à l'effervescence des prix du pétrole, ont marqué une évolution remarquable ; cette évolution est maintenant terminée, et l'accent mis sur la croissance a laissé la place à la productivité. Les directeurs financiers de certains des plus gros producteurs de pétrole de l'Alberta ont répercuté ce message lors d'une conférence réunissant les principaux dirigeants du secteur de l'énergie à New York en juin dernier, lorsque nous avons commencé nos recherches pour notre article de fond consacré aux sables bitumineux rédigé par Graham Chandler et intitulé « Technologie et innovation - La force de l'industrie pétrolière » (p. 71). Si les dernières années ont montré l'ampleur impressionnante de l'industrie de l'énergie, les prochaines dépendront de son agilité et de sa capacité à se développer, à appliquer et à parfaire les idées qui permettront de récupérer les marges d'exploitation perdues ainsi que la confiance du public en lui montrant qu'il peut s'agir d'un secteur véritablement responsable en matière de gérance environnementale. L'histoire est à ses côtés.

Ryan Bergen, Rédacteur en chef editor@cim.org @Ryan_CIM_Mag 66 | CIM Magazine | Vol. 10, No. 5

mot du president

Tenez bon.

n lisant les nouvelles de l’industrie et en parlant à mon entourage, les mots de mon père me reviennent en tête. Le marché traverse depuis quelques temps un cycle baissier, cycle qui s’éternise et implique que les compétences et l’expérience de nombreuses personnes qualifiées ne sont pas mises à profit. Que peuvent faire les personnes qui se retrouvent sans travail de tout leur temps libre ? Comme le conseillait vivement Theodore Roosevelt, « saisissez les occasions qui se présentent pour agir. » La situation actuelle nous donne la possibilité très rare de repenser, reconcevoir, redémarrer et nous renouveler. L’heure est venue de procéder à une restructuration financière des projets à l’aide d’un modèle durable qui augmente la probabilité pour toutes les parties prenantes d’obtenir un rendement du capital investi afin de faire face aux problèmes structurels de financement et de coûts qui affectent les petites sociétés minières. Il est grand temps d’examiner la responsabilité sociale des entreprises dès les premières étapes des projets et de poser des bases solides pour l’avenir. Le temps est venu d’encadrer ou de former quelqu’un. Il peut paraître difficile d’anticiper son remplacement lorsqu’on ne se sent pas prêt(e) à être remplacé(e), mais la pénurie de personnes qualifiées deviendra inévitablement conséquente et une forte demande suivra. Ainsi, vous ne ferez que faciliter les choses pour l’avenir. Saisissez cette occasion pour consacrer un peu de votre temps à l’ICM, en tant qu’examinateur/-trice ou expert(e) dans le cadre d’une session technique ou encore dans les nombreux événements et projets que la communauté de l’ICM organise. Une fois que les choses se seront tassées et que la situation s’améliorera, les personnes qui se seront investies pendant cette période de ralentissement économique deviendront des chefs de file. Les capitaines deviennent rapidement des généraux pendant la guerre, aussi investissez autant que possible dans votre perfectionnement professionnel, suivez des formations, publiez et participez. Investissez dans de nouvelles compétences et renforcez votre productivité afin d’augmenter votre compétitivité. Investissez dans votre propre avenir, dans vos ami(e)s, votre famille et vos partenariats. Faites du sport et restez en bonne santé. En résumé, tenez bon.

Garth Kirkham Président de l’ICM @GarthCIMPrez

Les actualités Un réseau vital en ligne Abitibi Royalties se sert de l’Internet pour établir le contact avec des petites sociétés minières en difficulté

Une toute nouvelle société de redevances minières laisse place à la créativité dans la recherche de nouvelles possibilités de financement. Début juin, Abitibi Royalties a lancé une plateforme électronique baptisée The Royalties Search qui permet aux sociétés minières à la recherche d’un financement d’envoyer facilement des données géologiques sur leurs projets afin qu’ils soient pris en compte. L’équipe d’Abitibi s’engage à évaluer les dossiers et à décider dans les 48 heures si oui ou non, la société financera le projet, généralement en prenant à sa charge le coût intégral des taxes et des frais relatifs aux concessions en contrepartie d’une redevance nette calculée à la sortie de la fonderie. D’après Ian Ball, président de la société, cette plateforme électronique est la première en son genre dans le secteur des redevances minières et elle permet à Abitibi, pour un coût très raisonnable, d’établir une relation avec des projets de qualité laissés pour compte par le marché des petites sociétés d’exploration. Comme l’expliquait M. Ball, les frais liés aux concessions minières et autres coûts indirects récurrents peuvent aller de 10 000 $ à 50 000 $ tous les deux ans, ce qui constitue souvent une grande difficulté pour les petites sociétés d’exploration à court d’argent. « Trouver des projets de qualité dont les concessions arrivent à expiration et qui disposent de peu de capitaux pour les renouveler peut se révéler très long et laborieux », expliquait-il. « C’est là tout l’intérêt de ce site Internet ; ce sont maintenant les projets de qualité qui viennent à nous. » D’après Ivars Azis, président de la petite société minière privée Tamarack Gold Resources, ce processus rapide et

Gracieuseté d’Abitibi Royalties

Par Michael Yang

Ian Ball, président d’Abitibi Royalties

convivial de dépôt de candidature aide la plateforme à atteindre un marché inexploité que les investisseurs ont depuis toujours évité. « Il m’a fallu une demi-heure pour soumettre la candidature », indiquait-il. « C’est une bouffée d’air pur dans une industrie qui est dépassée. »

Jeux intelligents Abitibi est l’un des plus petits acteurs du secteur des redevances minières, domaine dans lequel des sociétés géantes telles que Franco Nevada et Royal Gold ont généralement l’apanage des possibilités d’investissement les plus intéressantes. Mais avec 35 millions $ de fonds disponibles, M. Ball était d’avis que, pour que ce portefeuille soit gagnant, il suffit de tenter sa chance auprès de 20 à 30 projets présentant une certaine valeur tout en atténuant autant que possible les risques afférents. Pour réduire les risques inhérents aux investissements dans des propriétés se

trouvant aux premières étapes d’exploration, M. Ball ne s’intéresse qu’à celles qui se trouvent à proximité de mines existantes et établies et dont une exploration antérieure apporte des preuves fondées d’une minéralisation. « Nous ne sommes pas nécessairement à la recherche de propriétés qui deviendront des mines productrices. Nous prenons également en compte d’autres aspects tels que la possibilité pour une mine à proximité d’acheter une propriété adjacente pour une nouvelle installation ou d’agrandir son site actuel. » La zone productive possible Smokehead de Golden Valley Mines, située à un kilomètre au sud-ouest de la mine Canadian Malartic au nord-ouest du Québec, illustre bien cette initiative. En contrepartie des frais d’entretien annuels qu’elle paiera, lesquels s’élèvent à 5 000 $ par an, Abitibi recevra une redevance nette permanente calculée à la sortie de la fonderie de 2 %. La société a également acquis des droits à 15 % des produits des ventes totaux, ce qui lui permet de récupérer l’intégralité de son investissement si la propriété est un jour vendue. « Nous nous sommes intéressés à la zone productive possible Smokehead et nous sommes rendus compte que la mine voisine est censée, dans un futur proche, développer son parc à résidus miniers qui se trouve à moins d’un kilomètre », expliquait M. Ball. « Il est difficile aujourd’hui de se prononcer quant au rachat possible de la propriété de Golden Valley, mais il est bien plus simple d’agrandir un parc à résidus miniers que d’en construire un nouveau, aussi c’est une perspective pour laquelle nous sommes prêts à tenter notre chance. » August/September • Août/Septembre 2015 | 67

Une idée en or L’inspiration pour le site Internet provient en partie du très réputé « Goldcorp Challenge » ; en 2002, la société aurifère de Vancouver a diffusé sur Internet l’intégralité des données géologiques relatives à son projet Red Lake et a invité le public à les consulter pour proposer leurs conseils sur les méthodes de forage. « Il s’agissait vraiment de la première tentative innovante de l’industrie de faire preuve de créativité dans ses activités, et le résultat en valait la chandelle », déclarait M. Ball. Cette initiative a directement mené à des découvertes importantes générant plus de 6 milliards $ à ce jour après que près de 1 000 prospecteurs virtuels aient participé. M. Ball s’est également rendu compte de l’importance du site Internet après avoir ciblé un projet aurifère prometteur, bien que déclaré en faillite, dans le Nevada. Cependant, au moment où Abitibi a proposé de payer les frais, la propriété avait déjà été abandonnée et quelqu’un d’autre se l’était approprié. « Ce n’était plus la peine de continuer à courir après ce genre de situations », expliquait-il. Pour M. Azis de Tamarack, qui détient des créances sur deux propriétés relevant du parrainage d’Abitibi, la plateforme profite à toutes les parties impliquées. « Il est toujours agréable de constater que quelqu’un reconnaît le fort potentiel des petites sociétés d’exploration et est prêt à les soutenir », déclarait-il. « Il est maintenant grand temps de tirer parti de ces projets négligés et sous-estimés, et la façon dont Ian agit encourage les deux parties à y prendre part. » Depuis mi-juillet, Abitibi Royalties a conclu quatre transactions sur environ 50 candidatures, et trois projets supplémentaires se trouvent à divers stades d’ententes exécutoires. Comme l’expliquait M. Ball, la société se concentrera sur les projets aurifères en Amérique du Nord. ICM

Barrick vend certains de ses actifs pour s’acquitter de ses dettes La société Barrick Gold a pris cet été une série de mesures pour réduire sa dette de 3 milliards $ US en 2015 comme prévu. La société a annoncé le 30 juillet qu’elle vendait la moitié de sa participation dans la mine de cuivre Zaldívar au Chili au groupe minier Antofagasta, pour une contrepartie totalisant environ 1 milliard $ US. « La vente de 50 % de Zaldívar s’inscrit dans la stratégie de la société visant à créer de la valeur sur le long terme pour nos actionnaires », expliquait Kelvin Dushnisky, co-président de Barrick, dans un communiqué de presse. « En vendant une part de cet actif non essentiel, nous renforçons notre bilan tout en restant exposés à cette exploitation générant une trésorerie conséquente. » La vente de la mine Zaldívar a jusqu’ici permis à Barrick de réduire sa dette d’environ 1,85 milliard $ US, ce qui représente près de deux tiers de l’objectif que la société s’est fixé pour l’année 2015. En début d’année, Barrick avait annoncé la vente de deux autres actifs non essentiels. La société a en effet signifié le 24 68 | CIM Magazine | Vol. 10, No. 5

mai dernier la vente de sa mine Cowal en Australie pour la somme de 550 millions $ US en espèces à Evolution Mining, un producteur d’or australien de niveau intermédiaire. La vente entraînera également la fermeture des bureaux de Barrick à Perth, ce qui contribuera à une réduction supplémentaire des coûts. Deux jours plus tard, la société avait également révélé la vente de 50 % de Barrick Niugini, une filiale qui détient 95 % de la mine d’or Porgera en Papouasie-Nouvelle-Guinée, au groupe Zijin Mining, l’un des plus grands producteurs aurifères de Chine. La vente, finalisée pour la somme de 298 millions $ US en espèces, marque la première étape d’un accord de coopération stratégique récemment établi entre les deux sociétés. En décembre l’année dernière, Barrick affichait une dette de 13 milliards $ US. En février, la société communiquait une perte nette de 2,91 milliards $ US (2,50 $ US l’action) pour l’exercice financier 2014. – Katelyn Spidle

Réouverture limitée de la mine Mount Polley Imperial Metals a recommencé la production à sa mine Mount Polley début août, une année après la brèche dans son bassin de décantation l’été dernier. Cette mine de cuivre et d’or, située près de Williams Lake en ColombieBritannique (C.-B.), reprendra ses activités à 50 % de sa capacité normale, avec jusqu’à 220 employé(e)s sur le site et dans des conditions strictes stipulées dans un permis conditionnel délivré début juillet par le gouvernement de la province. D’après Bill Bennett, ministre de l’énergie et des mines de la C.-B., ce permis conditionnel constitue la première mesure à laquelle Imperial Metals doit se conformer avant que la mine ne puisse fonctionner de nouveau à pleine capacité. Il permet à la mine de reprendre ses activités pendant environ un mois avant la délivrance d’un second permis en septembre, lequel

Gracieuseté d’Imperial Metals

les actualités

La principale usine de traitement à la mine Mount Polley d’Imperial Metals

portera sur le traitement et l’évacuation de l’eau à court terme. Pour que la mine puisse de nouveau fonctionner à plein rendement, Imperial Metals est tenue de soumettre un plan de traitement et d’évacuation de l’eau à long terme d’ici juin 2016. « Nous avions le choix entre attendre une année pour que la société nous présente un plan à long terme, ou lui laisser reprendre ses activités pendant quelques mois afin de redonner du travail aux employés, à condition qu’il n’y ait aucun impact négatif sur l’environnement », expliquait M. Bennett dans une déclaration. Les restrictions exigent de ne plus utiliser le bassin de décantation des résidus et de déverser les déchets liquides dans le puits Springer non utilisé du site minier. Le puits sera sans doute rempli d’ici l’automne, et le second permis devra être accordé avant que l’eau ne puisse être traitée et évacuée dans la rivière Hazeltine Creek, laquelle a déjà payé le lourd tribut de la brèche l’année dernière. Imperial Metals doit également verser 6,1 millions $ supplémentaires au gouvernement en guise de garantie de réhabilitation du terrain. Steve Robertson, vice-président des affaires générales d’Imperial Metals, expliquait que le permis conditionnel satisfait totalement la société qui souhaite recommencer à exploiter Mount

Polley de manière permanente et à plein rendement d’ici l’été prochain. « Dès cet automne, nous devrions pouvoir présenter au gouvernement une proposition concernant la reprise totale des activités à la mine », indiquait-il. – Michael Yang

Fermeture provisoire de certaines mines de charbon de Teck Alors que Teck Resources continue de se battre face à l’effondrement du marché du charbon métallurgique, la société décide de suspendre cet été les activités de six de ses mines de charbon canadiennes. Les mines seront temporairement fermées pendant au moins trois semaines chacune dans le cadre d’un programme échelonné au cours des mois de juillet, août et septembre. Cette mesure entraînera une baisse de la production de Teck au troisième trimestre d’environ 1,5 million de tonnes (soit 22 % du total initialement prévu pour l’année), sans pour autant entraver les ventes prévues de son charbon. « Plutôt que d’injecter un excédent de tonnes dans un marché déjà submergé, nous adoptons une approche disciplinée à la gestion de la production de nos mines en accord avec les conditions du marché », indiquait Don August/September • Août/Septembre 2015 | 69

Lindsay, président et directeur général de Teck dans une déclaration. La société minière, basée à Vancouver, avait déjà réduit son dividende de deux tiers en début d’année, licencié 600 personnes et abandonné ses projets de relancer la production à la mine de charbon Quintette dans le nord-est de la Colombie-Britannique (C.-B.) dans l’espoir de compenser les prix peu élevés des marchandises et l’offre excédentaire. Les prix du charbon métallurgique ont décliné de 70 % au cours des quatre dernières années pour atteindre 85 $ US la tonne cette année, alors qu’il se vendait à 300 $ US la tonne en 2011. À cette situation vient s’ajouter un surplus mondial de près de 20 millions de tonnes de charbon métallurgique qui sature le marché. La conjoncture économique morose a aussi touché d’autres sociétés d’exploitation du charbon. L’année der-

nière, Walter Energy a fermé ses mines Wolverine et Brazion dans le nord-est de la Colombie-Britannique, et Anglo American a suspendu les activités à son exploitation Tumbler Ridge dans la même région. Plus récemment, Grande Cache Coal annonçait des licenciements en Alberta d’ici la fin de l’année. – M.Y.

Brèche dans un pipeline transportant des sables bitumineux D’après les déclarations de Nexen Energy en juillet, la brèche serait apparue fin juin dans un pipeline sur l’un des sites d’exploitation des sables bitumineux de la société et aurait duré deux semaines. La fuite, décelée sur le site de son projet Long Lake à environ 35 kilomètres au sud de Fort McMurray, pour-

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rait avoir eu lieu entre le 29 juin, lorsque les équipes finissaient de nettoyer le pipeline, et le 15 juillet, jour où un contractuel l’a découverte. Cinq millions de litres d’un mélange de bitume, de sable et d’eau extraite se sont déversés sur une surface de 16 000 mètres carrés de terrain marécageux, soit à peu près la taille de deux terrains de football de la LCF. Comme l’expliquait Riley Bender, porte-parole de l’Alberta Energy Regulator (AER, l’agence de réglementation de l’énergie de l’Alberta), Nexen a interrompu le flux du pipeline pour arrêter la fuite dès qu’elle s’en est rendue compte. « La société a mobilisé tout son équipement dès les premières heures pour commencer à construire une enceinte de confinement autour de la zone affectée », indiquait-il. L’agence de réglementation a émis un décret de protection de l’environnement quelques jours après que Nexen ait contenu la fuite, ordonnant à la société de mettre en œuvre des plans de gestion de la masse d’eau, d’atténuation des impacts sur la faune et la flore, et d’assainissement du site. L’enquête de l’agence de réglementation sur la fuite se poursuit. La société a depuis mis le pipeline hors service et suspendu les activités à son site Kinosis, d’où provient l’émulsion. Le bitume extrait à Kinosis est transporté par canalisation à l’usine de Long Lake pour traitement et valorisation. Le pipeline avait été installé l’année dernière ; son système d’alarme informatisé n’a pas détecté la fuite, défaillance sur laquelle la société enquête actuellement. Cet incident s’est produit dans une région isolée de l’Alberta, et la ville la plus proche du site de la fuite se trouve à 15 kilomètres. Un petit lac se trouvant à environ 100 mètres du site est sous surveillance, bien que Nexen ait confirmé qu’il n’y a aucun signe de contamination de l’eau. Environ 130 employé(e)s sont actuellement sur le site et aspirent les déversements. Personne ne sait aujourd’hui combien de temps prendront ces travaux d’assainissement. – Kelsey Rolfe

Technologie et innovation La force de l’industrie pétrolière Dans le monde entier, les prix du pétrole brut ne montrent aucun signe de redressement, aussi les esprits entrepreneuriaux et créatifs attaquent de front ces difficultés en se tournant vers l’innovation afin de préserver les marges d’exploitation dans le secteur des sables bitumineux.

Par Graham Chandler

Illustrations par Katy Lemay

« Si l’[innovation] paraissait logique il y a trois ans, c’est une approche encore plus naturelle aujourd’hui », expliquait Dan Wicklum, directeur général de la Canada’s Oil Sands Innovation Alliance (COSIA, l’alliance canadienne de l’innovation dans le secteur des sables bitumineux) alors qu’il évoquait la chute des prix du pétrole brut et de la profitabilité dans le secteur. En effet, peu d’analystes prévoient un redressement sain de l’industrie dans un avenir proche ; ainsi, on observe une montée du dynamisme envers l’innovation et la technologie, une nouvelle forme d’énergie puissante qui émerge du secteur des sables bitumineux. Bien que l’extraction du bitume ait, de par sa nature, toujours requis une certaine innovation, la chute des prix porte les efforts déployés dans ce domaine vers de nouveaux sommets. Lors de la conférence internationale 2015 sur l’énergie de RBC Marchés des capitaux, les principaux acteurs de l’industrie ont soutenu cet élan de dynamisme. « À partir de maintenant, nous nous concentrerons sur les développements technologiques », déclarait Paul Masschelin, vice-président directeur des finances et de l’administration chez Imperial Oil Ltd. « Nous aurons à l’avenir besoin de beaucoup d’aide sur le plan technologique », ajoutait Doug Proll, vice-président directeur de Canadian Natural Resources Ltd. Le mois suivant, Steve Williams, président et directeur général de Suncor Énergie, expliquait dans l’émission Web consacrée aux résultats du deuxième trimestre (T2) que « la société étudie la prochaine génération de technologies. »

Beaucoup d’énergie est consacrée à cette cause, qu’il s’agisse de renforcer l’efficacité de la main-d’œuvre, de réduire la consommation d’eau ou de résoudre l’énigme des résidus fins mûrs. De nombreuses innovations avaient commencé bien avant l’effondrement des prix, mais elles sont scrutées à la loupe depuis la chute drastique des marges d’exploitation. « [L’effondrement des prix] accentue le besoin d’innover », expliquait Michael Singleton, conseiller exécutif chez Kinetica, qui fait partie d’Innovate Calgary, le centre de transfert de technologies et d’incubation d’entreprises de l’université de Calgary. Cependant, il peut s’avérer complexe de transformer cette motivation en résultats. M. Singleton, qui travaille dans le secteur des sables bitumineux chez Suncor depuis 1978, expliquait qu’une grande partie des innovations sont le résultat d’une amélioration continue et non d’un moment de génie. « L’industrie n’a cessé d’innover », expliquait-il, citant deux moments historiques en exemple, à savoir l’évolution de l’exploitation des sables bitumineux avec des camions et des pelles géantes et non plus des roues pelleteuses (ce qui a rendu l’exploitation bien plus économique), et l’avènement de la méthode de drainage par gravité au moyen de vapeur (DGMV), qui a permis de libérer des milliards de barils de ressources profondément enfouies sous la surface. « Chacun de ces exemples ont été rendus possible grâce à de plus petites technologies. Dans le cas des camions et des pelles, c’est la August/September • Août/Septembre 2015 | 71

technologie des pneus et des aciers que l’on utilisait pour ses derniers. » Le DGMV est très similaire, indiquait-il. « Tout a commencé à l’installation d’essai de l’Alberta Oil Sands Technology and Research Authority (AOSTRA, le bureau de recherche et de technologie des sables bitumineux de l’Alberta), où un puits de mine a été foncé et une galerie d’accès creusée sous le calcaire, avant de forer dans les sables bitumineux. Ainsi, on a découvert que le bitume pouvait être liquéfié et s’écouler plus facilement. » Mais on ne disposait pas encore de la structure de coûts. « Puis le forage horizontal a fait son apparition. Et c’est cette technique qui a fait du DGMV un procédé rentable. » Kinetica aide à réaliser des découvertes capitales plus rapidement. « Rien n’est aussi simple qu’il y paraît », expliquait M. Singleton. « Les moyennes et grandes sociétés minières disposent d’une série de technologies qu’elles testent parfois depuis des décennies. » Elles définissent les efficacités qu’elles souhaitent atteindre mais n’ont souvent pas accès aux solutions technologiques dont elles ont besoin pour y parvenir. Il en va de même pour les plus petites sociétés innovantes qui disposent des solutions, mais pas des relations nécessaires pour les mettre en œuvre. C’est là que Kinetica entre en scène et trouve certains de ces chaînons manquants pour les intégrer à la chaîne de l’innovation, expliquait M. Singleton. « Les innovations peuvent être le fruit d’un seul inventeur dans son garage, d’une société de services ou d’une grande société. » Les grandes découvertes sont souvent des développements sur le long terme, mais M. Singleton a observé une tendance particulière ces 12 derniers mois. « On insiste beaucoup sur l’efficacité énergétique, qui [inclut] également la question des émissions de dioxyde de carbone. » L’un des domaines en pleine expansion consiste à s’éloigner de l’utilisation de l’eau dans les installations d’extraction. « Les technologies d’extraction par solvants font l’objet de nombreuses initiatives ; mais elles n’ont rien de nouveau. On les étudie depuis 20 ou 25 ans. Cependant, le fait que nous progressions jour après jour fait que nous pourrions être en mesure de parvenir au résultat escompté. » En effet, M. Williams de Suncor expliquait dans l’émission Web consacrée au T2 que « la société est très confortée par ce qu’offre la technologie des solvants. Nous espérons parvenir à une extraction essentiellement dépourvue d’eau. C’est la raison pour laquelle nous travaillons si dur sur cette nouvelle technologie. » Plus important encore, de nombreuses technologies ont besoin d’aide pour être acceptées par le marché. Kinetica 72 | CIM Magazine | Vol. 10, No. 5

essaie de s’assurer que les innovateurs sont prêts. La technologie doit fonctionner, être fondamentalement solide. « On constate que nombre des petites sociétés ne disposent pas d’une bonne structure de gestion ni de l’expérience requise », indiquait M. Singleton. « Il leur manque les conditions nécessaires généralement requises telles que la force financière ou une bonne gouvernance. Ainsi, on leur fait passer toute une série d’étapes de sélection de manière à assurer leur succès lorsqu’elles arrivent sur le marché avec leur technologie. » Kinetica a déjà en main deux ou trois petites innovations prêtes à subir des essais de terrain, déclarait M. Singleton. Pour des raisons de confidentialité, il a refusé de donner davantage de détails, mais il a tout de même déclaré qu’« actuellement, 12 ou 13 technologies sont soumises à notre processus en étapes. » La Petroleum Technology Alliance of Canada (PTAC, l’alliance des technologies pétrolières du Canada) a également observé l’influence de l’effondrement des prix sur le rythme auquel sont développées les innovations et la direction qu’elles prennent. « Il est indéniable que ce déclin a incité à réduire les coûts », déclarait Soheil Asgarpour, président de la PTAC. « L’innovation joue un rôle important dans la compétitivité avec des pays tels que l’Arabie Saoudite et [ceux] du Moyen-Orient. Ainsi, l’industrie accorde davantage d’attention à la réduction des coûts et à la découverte de technologies qui donneront lieu à un développement durable tout en réduisant l’empreinte environnementale et les conséquences sociales négatives, et ce, en augmentant parallèlement l’efficacité et la profitabilité de la production. » Pour ce faire, la PTAC dispose du Phoenix Network (le réseau Phoenix), un groupe de six sociétés d’exploitation des sables bitumineux qui se concentre sur la réduction des coûts depuis l’avènement de la chute des prix des marchandises. Initialement baptisé l’Oil Sands Leadership Initiative (OSLI, l’initiative de leadership en matière de sables bitumineux), le réseau Phoenix porte sur le développement de technologies liées à des domaines non environnementaux du DGMV. « L’objectif premier est de réduire les coûts tout en augmentant les taux de production et les réserves », expliquait M. Asgarpour. Chaque année, Phoenix organise plusieurs ateliers visant à énoncer les enjeux et à trouver des technologies pour le développement et la production du procédé de DGMV. « Nous définissons clairement les difficultés lors des ateliers puis menons nos recherches afin de trouver des solutions techno-

logiques », expliquait M. Asgarpour. « Ces recherches peuvent être menées à l’échelle internationale afin de déterminer si une autre organisation ou industrie dispose d’une technologie qui peut nous aider. » Une fois que l’on a identifié une solution potentielle, un consortium est formé par les membres du réseau Phoenix. Ce consortium façonne les solutions du concept jusqu’à la commercialisation, laquelle comprend des essais de terrain ainsi que le financement. La PTAC couvre le financement jusqu’à 15 % sans prétendre à des droits de propriété intellectuelle (PI). « Nous nous trouvons donc dans une position idéale en tant qu’intermédiaire neutre pour négocier les droits de PI entre le bailleur de fonds et le prestataire de recherche », expliquait M. Asgarpour. Le financement provient des propres fonds de la PTAC, de subventions du gouvernement ou d’autres sources telles que le conseil de recherches en sciences naturelles et en génie (CRSNG).

Établir le lien Un grand nombre d’événements portant sur l’innovation ont récemment été organisés à Calgary, lesquels visaient à mettre en relation les petites sociétés et les détenteurs des fonds dont elles avaient besoin. Cette année, à l’occasion du Global Petroleum Show (le salon commercial international sur le pétrole), les prix dédiés à l’innovation et aux technologies ont présenté certaines des nouvelles innovations atteignant le stade de la commercialisation. L’une des sociétés récompensées, QS Energy Inc., est spécialisée dans la nouvelle technologie de réduction de la viscosité. En exploitant les principes de l’électrorhéologie, à savoir l’application d’un champ électrique à haute résistance et haute intensité pour changer le comportement mécanique des fluides, le système réduit la viscosité du pétrole brut en provoquant l’agglomération des particules. Des centaines d’échantillons, allant du bitume aux condensés superlégers, ont été testés en laboratoire. D’après la société, une réduction de 20 à 25 % de la viscosité pourrait se traduire par un profit brut pour l’exploitant de 560 000 $ à 700 000 $, soit entre 6,7 millions $ et 8,4 millions $ annuellement. Comme l’expliquait Gregg Bigger, président et directeur général de QS Energy, les tests les plus récents ont été menés sur du dilbit (ou bitume dilué), qui est généralement la forme que prennent les produits issus des sables bitumineux alors qu’ils sont transportés dans les pipelines jusqu’au marché. À l’occasion d’une réunion dédiée aux grandes innovations récentes juste avant le Global Petroleum Show, COSIA a organisé son premier sommet sur l’innovation à Banff, en Alberta. Des délégué(e)s, dont beaucoup sont venu(e)s du monde entier, ont participé aux sessions consacrées aux quatre domaines de priorité environnementale de COSIA, à savoir la terre, l’eau, les résidus et les gaz à effet de serre (GES). L’une des présentations lors du sommet comprenait une innovation par InLine Dewatering Ltd. Le principe de cette innovation est que la déshydratation de tous les résidus de l’extraction des sables bitumineux lors de leur transfert dans un pipeline de l’extraction au dépôt (tout en retenant les fines et le sable)

permettra de réduire l’empreinte environnementale et d’immédiatement recycler l’eau chaude pour la réutiliser durant le procédé d’extraction. Les résidus déshydratés élimineront la formation de résidus fluides des fines et permettront la remise en état rapide des gisements, ce qui représente un grand avantage en termes d’environnement et de coûts. Le drainage au moyen de vapeur générée écologiquement (SEGD, de l’anglais Steam Environmentally Generated Drainage) est une invention personnelle de l’expert de longue date en sables bitumineux Bernard Chung, président et propriétaire de VALENCE Energy Corp. Il s’agit d’une innovation plus récente en phase initiale qui a vu le jour en raison des avantages importants qu’elle présente en termes de coûts et d’environnement. Cette solution par SEGD requiert la présence de trois puits horizontaux et vient de recevoir l’homologation de son brevet canadien. L’eau générée injectée dans le puits supérieur s’écoule vers le deuxième puits situé plus bas, où elle est vaporisée par les gaz de combustion d’un brûleur interne in situ. La chaleur et les gaz sont diffusés vers l’extérieur, chauffant et mobilisant ainsi le bitume. Le bitume et l’eau (principalement sous forme de condensat) sont récupérés dans le puits de production situé en aval ; l’eau générée est réinjectée, et le CO2 issu de la combustion est automatiquement isolé. Cette année et jusqu’en 2016, le concept est mis à l’épreuve à l’aide d’une simulation numérique du réservoir et d’une modélisation physique en laboratoire, expliquait M. Chung. La conception et le contrôle en usine du brûleur du fond sont prévus pour 2017, et l’essai pilote sur le terrain afin de déterminer son caractère commercial est prévu entre 2018 et 2020. M. Chung cherche actuellement à attirer l’attention de l’industrie et à trouver des partenaires pour le financement de ces dernières étapes. « La méthode du SEGD peut être adaptée aux projets existants de traitement du pétrole lourd et utilisant la méthode de DGMV sous forme de puits de SEGD et de plateformes d’exploitation », indiquait-il. D’après M. Chung, le procédé de SEGD permettra de réaliser des économies par rapport au DGMV car il donnera lieu à une réduction des coûts d’investissements initiaux de l’ordre de 10 000 $ par barils de pétrole par jour (bpj) en raison d’une baisse considérable des coûts de transformation à l’usine et de ceux liés aux conduites de vapeur pour le traitement de l’eau, la génération de vapeur et le traitement en pipeline. En d’autres termes, la production de 1 000 bpj de pétrole permettrait d’économiser jusqu’à 10 millions $ en coûts initiaux d’investissements. En outre, les coûts d’exploitation seront comparables, voire inférieurs, en raison de la baisse des besoins énergétiques, de l’absence de taxes liées aux émissions de dioxyde de carbone, du traitement de l’eau moins important, de l’élimination de la génération de vapeur en surface et des coûts d’entretien réduits. La recherche de sables bitumineux ne cesse de croître dans le monde entier. En juillet 2014, General Electric (GE) a lancé le défi GHG ecomagination Innovation Challenge: Energy Efficiency Solutions for Canada’s Oil Sands, un défi visant à trouver des innovations imaginatives et écologiques pour réduire les émissions de GES et à proposer des solutions écoénergétiques pour le secteur des sables bitumineux au Canada. Des prix ont été décernés dans deux catégories, à savoir les applications August/September • Août/Septembre 2015 | 73

à valeur ajoutée de la chaleur à basse température ; et l’amélioration de l’efficacité de la génération de vapeur. En plus des participants du Canada et des États-Unis, les huit vainqueurs étaient des innovateurs originaires d’Inde, des Pays-Bas, du Royaume-Uni, de France et d’Italie, ce qui montre bien la nature internationale de l’innovation dans le domaine des sables bitumineux. Les prix totalisaient un million $ CA en subventions pour le développement et en récompenses en espèces. COSIA fait également preuve d’initiative dans l’identification et l’exploitation des sources internationales à la recherche de bonnes idées. À l’automne 2014 par exemple, COSIA a envoyé une équipe en Israël afin d’examiner les systèmes d’innovation du pays dans les secteurs public et privé et au sein d’organisations (petites et grandes), et de déterminer leur capacité d’innovation, expliquait M. Wicklum. « L’équipe a organisé plusieurs réunions de cadrage avec toute une série d’organismes de soutien à l’innovation. » C’est un exemple de ce que COSIA appelle des « centres d’innovation », lesquels comptent déjà 40 membres associés. « C’est un moyen très efficace de développer la portée de nos sociétés spécialisées dans les sables bitumineux partout dans le monde », indiquait-il. Ainsi, la volonté de découvrir de nouvelles idées innovantes a explosé l’année dernière, mais elle est encore confrontée à de nombreux obstacles. Même lorsque les nouvelles innovations sont prouvées et financées, leur adoption peut

74 | CIM Magazine | Vol. 10, No. 5

présenter de grands risques. « On effectue une évaluation ciblée quant aux avantages que l’on obtiendra », déclarait Allan Fogwill, président et directeur général du Canadian Energy Research Institute (CERI, l’institut canadien dédié à la recherche sur l’énergie). « Chaque fois que l’on change un procédé, il y a un risque que l’opération tourne mal. Personne ne souhaite se retrouver dans une position où, pour améliorer l’efficacité, par exemple une baisse de 10 % de l’utilisation de l’énergie ou une hausse de 10 % du taux de récupération, la mise en œuvre de ce changement vous empêche de produire pendant des semaines, voire des mois. » Au vu des marges actuelles déjà très faibles, la situation est encore plus critique car la possibilité de récupérer est réduite. D’après M. Fogwill, le succès est souvent lié à l’expérience d’une société en matière de gestion. « Si la direction parvient à mettre en œuvre de nouveaux projets dans de bonnes conditions, le risque de voir apparaître un problème est moindre. » Que réserve donc l’avenir pour les innovations dans le secteur des sables bitumineux ? « Ce n’est pas un secteur dans lequel la vision des sociétés se cantonne à trois ou cinq années », expliquait M. Singleton. « Il faut envisager les 10, 15 ou 20 années à venir. » Selon lui, le ralentissement économique actuel sera plus long que les précédents. « On ne peut se permettre d’être indifférents à cette situation. C’est une véritable révolution dans nos méthodes de travail que nous devons envisager. » ICM

Avec l'aimable autorisation de Porcupine Gold Mines

Le talus de roches et de terre entourant la mine est au cœur des efforts de la société visant à limiter l'impact des activités minières sur les résidants de la ville. Durant la construction du talus, les activités avaient lieu entre 7h et 19h.

SURVEILLANCE DE QUARTIER PAR CHRISTOPHER POLLON

a ville de Timmins a vu le jour lorsque Benny Hollinger, grattant la mousse recouvrant un affleurement minéralisé sur le site d’une excavation abandonnée au début du XXe siècle, a exposé au grand jour un riche filon aurifère. Aujourd’hui, alors que Goldcorp développe sa mine à ciel ouvert Hollinger à proximité de la ville, la société doit s’appuyer sur la grande tradition minière de Timmins tout en faisant preuve d’une grande discrétion. Lorsque Porcupine Gold Mines (PGM), une filiale de Goldcorp, a racheté le site de l’ancienne mine Hollinger (dans le cadre d’une offre sur les terres acquises en 2007 par Goldcorp auprès de Kinross et Placer Dome), la mine avait été clôturée et abandonnée depuis la fin des années 1980. Ce site de 100 hectares était parsemé de petites fosses en surface et de dolines raccordées à 600 kilomètres de puits de mine abandonnés, de galeries d’accès et de travers-bancs ; c’est tout ce qu’il restait de la mine Hollinger, dont l’exploitation avait commencé en 1910 et qui avait produit quelque 20 millions d’onces d’or. Après des années d’études techniques, PGM (une entreprise commune entre Goldcorp Canada Ltd. et Goldcorp Inc.) a estimé que l’ancien site de Hollinger contient encore des

réserves d’environ 528 000 onces auxquelles on pourrait accéder par le biais d’un puits à ciel ouvert. Le seul problème est que la première mine Hollinger avait été construite à l’épicentre d’un fourré de broussailles infesté de mouches noires, le « camp de Porcupine. » La ville de Timmins qui, depuis ses origines, s’est développée autour de cette zone de roches précambriennes, est devenue au fil des ans une ville de 45 000 habitants. L’exploitation minière de ce site impliquerait d’abattre à l’explosif et de creuser un puits à ciel ouvert directement à côté du centre-ville. Comme l’expliquait Darren Fasciano, surveillant général de la mine à ciel ouvert de PGM qui la compare à une immense carrière à ballast urbaine, la proximité de la mine avec le cœur de la ville a, dès le début, défini l’orientation qu’allait prendre le nouveau projet Hollinger. « Nous essayons de réduire autant que possible le forage, l’abattage à l’explosif et les autres activités qui pourraient porter préjudice à la communauté aux alentours », indiquait-il. Au moment de l’entretien de M. Fasciano avec le CIM Magazine, PGM avait déjà procédé au pré-décapage de 5,26 millions de tonnes de matériaux depuis le commencement de la construction en février 2014. August/September • Août/Septembre 2015 | 75

Avec l'aimable autorisation de Porcupine Gold Mines

La société avait divulgué son plan de pratiques exemplaires en matière de gestion bien avant le premier abattage. Ce plan, publié à l’automne 2012, présentait la façon dont le site serait exploité et dont les impacts seraient minimisés. Un élément central de ce plan consistait à entourer la mine d’un talus composé de roches afin de contrôler les nuisances sonores, la poussière, la surpression de l’air et les vibrations résultant des activités à la mine. À la fin du mois de juin, le talus a été construit à l’aide de plus de 4 millions de tonnes de ces matériaux ayant subi un pré-décapage. Une petite quantité a été transportée par camion vers un concentrateur à la mine Dome de PGM, située à proximité, ce qui a permis à la société de commencer une production limitée d’or alors qu’elle se trouvait encore en phase de construction. Certaines sections du talus (qui mesure entre 10 et 25 mètres de hauteur et totalise 3,6 kilomètres de long) sont terminées, et la paroi extérieure est recouverte de morts-terrains dans l’optique, à terme, d’ensemencer la terre pour que s’y développe de la végétation. « Le talus ressemblera ainsi à une colline verdoyante du côté de la ville », expliquait Brendan Zuidema, directeur général de la mine. La mine est située à quelques rues seulement de la bibliothèque de la ville et à l’arrière de l’hôtel Comfort Inn, aussi les activités quotidiennes du projet, particulièrement l’abattage à l’explosif, ont été longuement pensées. Durant les étapes préliminaires de planification, la société a utilisé la modélisation pour déterminer l’ampleur acceptable des coups de mine afin de limiter les vibrations et la pollution atmosphérique provenant de la poussière et des émissions des explosifs. L’abattage à l’explosif ne peut avoir lieu que pendant deux « battements » chaque jour, à savoir en fin de matinée et dans le milieu de l’après-midi, de manière à ce que les résidants et les commerces de Timmins puissent adapter leurs horaires en fonction d’un programme sans surprise. Chaque jour pendant ces intervalles, un maximum de 30 000 tonnes de roches peuvent être déplacées par abattage avec au plus 9 000 kilogrammes d’explosifs. La construction de la mine a actuellement lieu entre 7h et 19h quotidiennement, et la construction du talus se poursuit. 76 | CIM Magazine | Vol. 10, No. 5

Une fois qu’il sera terminé et que la « modélisation des nuisances sonores » de PGM sera validée au mois d’août, la phase de production de la mine pourra commencer suivant un calendrier de 24h/24, 7 jours sur 7. L’abattage à l’explosif n’aura cependant lieu qu’en journée. L’intégralité du minerai sera concassé et broyé à l’installation de traitement voisine de la mine Dome. Par rapport à son ancienne mine à ciel ouvert Pamour Le puits Hollinger et la ville située à seulement quelques voisine de Timmins kilomètres au nord-ouest de la ville, où il aurait fallu forer des trous de 16,5 centimètres pour l’abattage à l’explosif, la mine Hollinger se limitera à des trous de 10 à 11,5 centimètres pour que les explosions soient moins conséquentes. « Ceci crée de nombreuses difficultés », expliquait M. Zuidema ; en effet, la société a dû tripler le nombre de trous forés avec moins d’espace pour manœuvrer, et a dû charger les explosifs dans un espace plus restreint qu’à l’accoutumée. Afin de contrôler les émissions et d’assurer une sécurité optimale, la société a également adopté des explosifs dotés de la toute dernière technologie de gazéification Titan SME 1 000, un produit de type émulsion en vrac de la société Dyno Nobel, lesquels ne deviennent explosifs que lorsque tous les ingrédients sont mélangés dans un tuyau sur le site. L’abattage à l’explosif pendant la phase de construction a entraîné plusieurs incidents. L’été dernier, des roches ont été projetées hors du site après une explosion, endommageant un véhicule dans le parking du personnel (personne n’a cependant été blessé). Une enquête ultérieure a entraîné des changements au niveau des protocoles d’approbation des techniques d’abattage à l’explosif ainsi qu’un examen plus rigoureux du procédé consistant à éviter la projection de débris et des « premiers abattages », à savoir les premières explosions effectuées pour niveler le sol après que l’élimination des morts-terrains expose les roches, ce qui, sur ce site, a lieu sur un terrain accidenté. La société maintient qu’elle ne prendra plus de tels risques. « Nous sommes probablement le plus gros consommateur de pare-éclats au Canada », indiquait M. Zuidema, faisant remarquer que la protection de chaque éclat vient ajouter une certaine complexité aux travaux. Deux préposé(e)s dévoué(e)s placent entre deux et quatre couches de pare-éclats sur chaque explosif (à l’heure actuelle, le site compte 1 400 pare-éclats), qui doivent ensuite être retirées une fois l’explosion terminée. La procédure peut prendre jusqu’à deux ou trois jours. Les camions et autre équipement lourd feront partie des éléments les plus bruyants de l’exploitation une fois qu’elle tournera 24h sur 24 et 7 jours sur 7. Le gouvernement de l’Ontario a obligé la société à limiter ses nuisances sonores audelà du talus à 50 décibels (dB) pendant la journée (ce qui cor-

PROJET HOLLINGER

respond, selon le plan de pratiques exemplaires en matière de gestion de PGM, à une pluie modérée), et à 45 dB pendant la nuit, soit l’équivalent du « ronflement d’un réfrigérateur. » Pour ce faire, les camions de transport utiliseront des panneaux d’amortissement des ondes sonores installés autour des compartiments moteur, des « grilles d’aération » en aluminium ondulées remplies de mousse à l’avant des camions et des silencieux moins bruyants obtenus dans le marché des pièces de rechange. Les camions de transport d’eau se trouveront constamment sur place afin de contrôler la poussière, laquelle sera également éliminée à l’aide de chlorure de calcium et d’un produit sans danger pour l’environnement appelé DusTreat, fabriqué par GE. La caractéristique la plus innovante de ce projet sera indéniablement le système de surveillance en direct, qui mesure le bruit, la poussière et les vibrations à partir de 17 stations distinctes placées en bordure du talus. Ce système a initialement été créé en vue d’aider la société à mesurer les impacts pour un usage interne et pour s’assurer que les niveaux sonores restent en-deçà des limites réglementaires, mais il a rapidement évolué en un produit plus sophistiqué. « Nous nous sommes rendus compte que nous pouvions partager les données générées par le système de surveillance avec le grand public », déclarait Patricia Buttineau, coordinatrice des communications de PGM. « Nous avons donc pensé qu’il s’agirait là d’un excellent moyen d’assurer notre transparence auprès de la communauté et nous avons obtenu l’appui de tous les niveaux hiérarchiques de [PGM] et de Goldcorp. » Les exigences de ce système de surveillance étaient si spécifiques que la société qui devait le fournir (la société danoise de génie de l’environnement Brüel & Kjær) a dû entièrement reconcevoir la majeure partie du système. Jusqu’ici, les systèmes de surveillance servent souvent à mesurer les niveaux sonores autour des aéroports, mais l’entrepreneur embauché devait concevoir ce système de manière à ce qu’il puisse également mesurer les niveaux de poussière et de vibrations, le tout en un seul système. « Je ne pense pas qu’aucune autre exploitation dispose d’un système de surveillance doté de ces trois fonctionnalités », indiquait M. Fasciano. Même dans une ville comme Timmins dont l’économie repose sur une seule industrie et qui a évolué dans un environnement minier, on ne peut sous-estimer l’importance des relations avec le public dans le cadre de la construction et de l’exploitation d’une mine au cœur de la ville. Afin de répondre aux inquiétudes concernant les dommages possibles que pourrait causer le projet au fil des ans aux propriétés privées et aux biens de l’État au-delà du talus de protection, PGM a adopté une approche proactive en obtenant des données de référence sur la construction de la structure pour certains des bâtiments situés à proximité de la mine, et a établi un protocole pour répondre aux éventuelles préoccupations du public. Toute personne jugeant que l’exploitation de la mine a entraîné des dommages à sa propriété peut déposer une demande d’indemnisation auprès de la coordinatrice de la liaison communautaire de PGM. Les employé(e)s de PGM mèneront une enquête initiale et, si

| profil de projet

nécessaire, un(e) ingénieur(e) tiers sélectionné(e) par PGM effectuera une inspection distincte et finira par établir la cause du dommage et le recours possible. Depuis mars 2013, la société a reçu 29 demandes d’indemnisation quant à des dommages possibles à des propriétés ; neuf de ces réclamations ont abouti à une indemnisation au propriétaire du bien et, depuis le début du mois de juillet, deux font encore l’objet d’une enquête. En concevant une exploitation dont l’impact sera minimisé, PGM espère inspirer d’autres mines dans le monde. L’exemple de la mine Martha de Newmont en Nouvelle-Zélande, qui est exploitée depuis 1987 à côté d’une ville, a incité la société à créer un comité consultatif communautaire pour Hollinger composé de membres de la collectivité locale. « Il s’agit d’un comité de rétroaction entre la communauté et la société », expliquait Mme Buttineau. « Si, pour une raison ou pour une autre, quelqu’un hésite à s’entretenir directement avec la société concernant un problème, cette personne pourra prendre contact avec l’un des membres du comité. » PGM a également étudié le modèle de la mine Canadian Malartic au nord-ouest du Québec, dont l’exécution du projet avait entraîné en juillet 2008 le déplacement par Osisko Mining d’environ 150 foyers dans une nouvelle communauté afin de laisser la voie libre aux activités de la mine. Comme pour la mine Hollinger, la société avait construit un talus pour séparer la mine du reste de l’environnement bâti, utilise de nombreux pare-éclats pour les explosions et a organisé de nombreuses sessions ouvertes au public pour informer les résidants des développements à la mine. L’expérience de la mine Canadian Malartic a également aidé PGM à envisager la question de la réhabilitation du terrain lors de la fermeture de la mine Hollinger, dont la durée de vie est de huit ans. « Exploiter une mine est une chose ; la fermer en est une autre », indiquait M. Zuidema. « Nous basons nombre de nos travaux sur leurs expériences. » Le projet plus vaste de réhabilitation du terrain de la mine Hollinger consiste à convertir un jour le site minier de 250 acres en une infrastructure publique détenue par la ville qui pourrait inclure des sentiers de randonnée pédestre, un camping et un lac extrêmement profond. Comme l’expliquait Mme Buttineau, la réhabilitation du terrain se fera progressivement, en commençant par l’ensemencement du talus. Un réseau de sentiers sera ensuite développé autour du périmètre extérieur du talus. À la fermeture de la mine, les sentiers seront étendus de part et d’autre du talus, et les pentes seront rectifiées à certains endroits pour en améliorer l’accès. Enfin, la majeure partie de la mine à ciel ouvert sera inondée de manière à créer un lac d’environ 800 mètres par 500 et dont la profondeur atteindra 120 mètres à mesure que l’eau s’accumule doucement au fonds de la mine. Le plan proposé par la société pour le site est attendu pour la fin de l’année. « Notre souhait est de rendre les terres à la ville », expliquait Mme Buttineau en parlant du plan d’utilisation des terres qui est actuellement en cours de finalisation. « Ces terres deviendront les joyaux de la couronne au centre-ville de Timmins. » ICM August/September • Août/Septembre 2015 | 77

An Introduction to Cutoff Grade: Theory and Practice in Open Pit and Underground Mines (with a new section on blending optimization strategy) Cut-off grades are essential in determining the economic feasibility and mine life of a project. The fundamentals of cut-off grade calculation, first established by Ken Lane forty years ago, are revisited. In this course it is shown how direct and indirect costs, opportunity costs imposed by operational constraints, and other factors, such as political risk, legal, environmental and regulatory requirements, must be taken into account. Mathematical equations are developed and graphical analytical methods are displayed, which can be used to solve most cut-off grade estimation problems. It is shown how minimum cut-off grades are estimated and how they must be modified to take into account constraints imposed by mine or mill capacity, or by limits on sales volumes. Multiple practical examples are given, illustrating the role of cut-off grades in mine planning, in allocating material to different processes, in optimizing mill operating conditions, and in poly-metallic deposits.

INSTRUCTOR Jean-Michel Rendu, JMR Consultants, USA • DATE September 9-11, 2015 • LOCATION Montreal, Quebec, Canada

Geostatistical Mineral Resource Estimation and Meeting the New Regulatory Environment: Step by Step from Sampling to Grade Control This course is designed according to the latest regulations on public reporting of Mineral Resources. It aims at showing how state-of-the-art statistical and geostatistical techniques help answering the requirements of those regulations in an objective and reproducible manner. A particular emphasis is put on understanding sampling and estimation errors and how to assign levels estimation confidence through the application of resource classification fundamentals. In addition to a solid introduction to mining geostatistics this course provides a comprehensive overview of industry’s best practices in the broader field of Mineral Resource estimation.

INSTRUCTORS Marcelo Godoy, Newmont Mining Corp., Denver; Jean-Michel Rendu, JMR Consultants, USA; Roussos Dimitrakopoulos, McGill University, Canada; and Guy Desharnais, SGS Canada Inc., Canada • DATE September 14-18, 2015 • LOCATION Montreal, Quebec, Canada Optimization and Risk Management in Strategic Mine Planning: Unearthing material value in mining complexes Growing volatility and uncertainty in global metal markets highlight the need to focus on new technologies that can unveil significant value and reliability to the performance of mining operations. This three-day course explores the foundations of strategic mine planning and stresses the new generation of applied technologies related to: (a) simultaneous optimization of integrated mining and processing operations, and (b) orebody risk management with new stochastic mine planning optimization developments. INSTRUCTORS Roussos Dimitrakopoulos and Ryan Goodfellow, McGill University, Canada; and Brian Lambert, Minemax, USA • DATE September 21-23, 2015 • LOCATION Montreal, Quebec, Canada

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HOW ORE SORTING IS MAKING MINERAL PROCESSORS MORE MONEY • UNDERGROUND MINING Major challenges and surprising solutions

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• PROJECT PROFILE Palabora Mining Company’s ambitious expansion project is the proving ground for some of the latest advances in underground mine development

• TECHNOLOGY The power of process monitoring

August/September • Août/Septembre 2015 | 79

Lindsay Shaver

TRAVEL Elko, Nevada By Damon Hodge

t turns out Las Vegas wasn’t the only Nevada city the late Hunter S. Thompson held in low regard. Of the mining and ranching town of Elko, roughly 430 miles north of Sin City, the gonzo journalist famed for writing “Fear and Loathing in Las Vegas,” wrote: “The federal government owns 90 per cent of this land, and most of it is useless for anything except weapons testing and poison-gas experiments.” Curmudgeon! Thompson’s downbeat assessment aside, Elko has carved a distinct niche for itself over the past 147 years. Situated halfway between Reno, Nevada, and Salt Lake City, Utah, on the Interstate 80 corridor, Elko is a global gold-producing powerhouse and home to more than 18,000 residents. Local employers include Barrick Gold’s Goldstrike complex and Newmont’s Carlin Trend mines. Each year, the city draws in thousands of visitors to popular events like the National Cowboy Poetry Gathering and the Basque Festival.

Sarah Murray

HOME AWAY

Association oversees a regular slate of activities such as monthly wine walks, farmers’ markets and self-guided art tours. Elko has inexpensive accommodations, but

Officially incorporated in 1917, Elko’s first residents settled there in 1868, holdovers from the Central Pacific Railroad crews that built the California-to-Utah leg of the First Transcontinental Railroad. Tent encampments along the path of the tracks eventually gave way to sturdier, more permanent architecture. 80 | CIM Magazine | Vol. 10, No. 5

seeking a nongaming experience can book at the High Desert Inn (starting at US$49/night), which boasts an indoor pool and spa and various facilities for hosting meetings and banquets. Just off the Interstate 80 freeway, America’s Best Value Gold Star Inn & Casino (starting at US$68/night) features an RV park and piles on perks such

as free wireless network, free airport shuttle and free accommodations for kids 17 and under (accompanied by an adult). In addition to the typical hotelcasino accoutrements – business and fitness centres, pool, arcade, restaurant and coffee shop – The Red Lion Hotel & Casino (starting at US$119/ night) has a sports book where you can place a wager on your game of choice.

A geographic compass of sorts, the 482-kilometre-long Humboldt River flows through town. Named after German scientist/explorer Alexander von Humboldt, in early days it guided travellers heading westbound from Salt Lake City to central California. Fanmartin

Chris Yiu

With Salt Lake City providing its only regional airport connection, the majority of Elko’s visitors and tourists carpool into town. Similar to downtowns in other small mining towns, the city’s core is a vibrant and walkable hub of commerce and activity. Not far from the centre of town – near 5th and Idaho Streets – is a collection of retail, dining, drinking and entertainment venues. The Downtown Business

if you’re looking for fun and games, hotelcasinos are your best bet. Unlike their gaudy counterparts in Las Vegas and Reno, Elko hotel-casinos function less as money pits and more as community gathering places and entertainment hubs. The Stockman’s Hotel & Casino (starting at US$39/night) touts renovated rooms and live entertainment, hosting the likes of Chubby Checker, Freddy Fender and The Coasters over the decades. Those

If diner fare is thing, your Elko’s got you covered with a variety of dives and coffee holes. But that doesn’t mean there is nothing for more refined tastes. The adventurous eater might opt for Star Hotel, a 115year-old bastion of cuisine from the Basque region of northern Spain. Heavily influenced by French and Spanish culinary techniques, Basque cuisine typically features meats and fish grilled over hot coals and paired with txakoli, a slightly sparkling, dry white wine.

Why sweat off the calories in the hotel gym when you can get your exercise at the Igloo Recreation Centre? It’s a former cold storage facility repurposed into a 25,000-square-foot

ern Folklife Centre, with its trove of history about Elko and rural life in the American West. Leave some time for sightseeing: just a 19kilometre drive from Elko is Lamoille Canyon. The picturesque canyon snakes through the heart of the Ruby Mountains, which have been dubbed “Nevada’s Swiss Alps.” Its canyons and lakes are a big draw for outdoor enthusiasts.

SIGNATURE EVENTS Cowboy culture takes centre stage during the National Cowboy Poetry Gathering, an annual event held in January that attracts thousands. Folklorists and poets, artists and dancers, conservationists and ranchers, film lovers and foodies have been making the pilgrimage here since 1985. Tickets to the 2016 event (Jan. 25-30) go on sale this fall.

Sarah Murray

Got a hankering for something eclectic? Try the Duncan Littlecreek Gallery & The Gallery Bar, with its permanent artists’ exhibits and bar offering micro-brew, imported beer and more than 50 wines. The backyard area is a hotspot for parties and sophisticated socializing. Time your trip to Elko just right – the second Friday of each month to be exact, starting at 7:30 p.m. – and you can catch poetry, prose and musical performances.

complex that hosts hockey, gymnastics, archery, rollerblading as well as concerts, dances and other community events. After exercising your body, take your brain for a spin at the West-

Sarah Murray

GO EXPLORE

Jon Oropeza

EAT & DRINK

The annual Elko County Fair (Aug. 29-Sept. 7) is a 95-year-old event that jam-packs food, family fun, sports (horse racing) and entertainment into the popular Elko County Fairgrounds. New to this year’s event is the incorporation of Country Showdown, a nationwide country music talent search.

Las Vegas has lions, tigers, dolphins and sharks, but only Elko has the world’s largest dead white polar bear. Named White King, the 10-foot-4-inch mounted and stuffed bear has sat at the entrance of Commercial Casino since 1958.

Every Fourth of July weekend, the city hosts the National Elko Basque Festival to honour the South American Basque sheepherders who came to Elko during the gold rush of the mid-1800s. The festival dates back to 1964. Highlights include Basque food and culture, traditional Basque rural sports (wood chopping, tug-o-war, strong man competitions), a running of the bulls, morning mass, a sheepherder’s bread contest, picnic and much more. And every summer you can go hog wild and get your motor running at the annual Elko Motorcycle Jamboree, a.k.a., the “Rumble in the Rubies.”

August/September • Août/Septembre 2015 | 81

In hot water Robert Fitzsimmons pioneered fundamental oil sands technology at Bitumount By Correy Baldwin

82 | CIM Magazine | Vol. 10, No. 5

done by hand. Even the mining of the bitumen was done with little more than horses to clear away the brush and overburden, and workers to manually dig out the bitumen sand. They then loaded it into barrels that were transported by wagon and dumped into Bitumount’s storage tanks. Fitzsimmons set about trying to refine and expand his operation but ran into difficulties raising the necessary funds. With the Great Depression in full swing and American crude oil flooding the market, investors were leery of financing a fledgling oil sands operation. By 1937 Fitzsimmons had scrounged together enough money to construct a rudimentary refinery, but it was too little too late. He was soon broke, and Bitumount went up for sale. Lloyd Champion, an astute financier from Montreal, eventually bought the project in 1943. Champion entered into an agreement with the Alberta government to build a demonstration plant at Bitumount based on Clark’s hot-water extraction process. The province hoped to prove that large-scale oil sands production was not only feasible, but a good investment. The government granted Champion $250,000 to construct a new plant and refinery, which the financier agreed to pay back over 10 years, at which point the operation would be his. Construction began in 1945, but costs tripled, hitting $750,000. Despite the progress he had made, Champion was forced to default. The government took over, and the new industrial-scale plant went into production in 1948. They then hired Sidney Blair, an oil sands expert who began his career as Clark’s research assistant, to assess the operation. Blair published an enthusiastic report in December 1950, concluding that the oil sands were commercially viable. The government set about promoting the oil sands, organizing an international conference of scientists, engineers and members of the oil industry that included a tour of Bitumount. The oil sands industry officially had a bright future ahead of it, though the plant itself was nearing its end. Having proved its viability, the government decided to exit the oil business. It shut down Bitumount in 1958, abandoning the site. Nonetheless, Fitzsimmons’ efforts helped lay the groundwork for future oil sands producers. In 1964 Sun Oil began construction of its Great Canadian Oil Sands plant, using the hard lessons Fitzsimmons had learned. Now operated by Suncor, it would be the first commercial oil sands operation of many. CIM Provincial Archives of Alberta, A3358

he first attempts to exploit the oil sands deposits in northern Alberta presented a conundrum to scientists, engineers and oil tycoons alike: how to separate the bitumen from the sand and refine it to crude oil? In the early 1900s, however, one struggling operation in the muskeg of northern Alberta persisted through years of creative engineering and economic setbacks to become the foundation of an industrial powerhouse. Robert Fitzsimmons arrived in Alberta’s Athabasca Region in 1922, joining others who had come to the area to try to access the bitumen that sat just beneath the soil. Robert Fitzsimmons He was an unlikely figure in the area: a Prince Edward Island native with no experience in the oil industry. But before long he was drilling wells, like everyone else, in a vain attempt to tap into the poorly understood deposits. For years he struggled to produce a commercially viable product until he heard about a pilot plant testing a new extraction method and went to see it for himself. That test plant was run by Karl Clark, head of oil sands research at the publicly funded Scientific and Industrial Research Council of Alberta. The oil sands were originally seen as a source of tar for roofing and road paving, but Clark had become convinced that crude oil could be extracted from the bitumen for use as fuel. By 1928, after working for nearly a decade on oil sands separation, he had come up with a process worthy of patenting: a hot water extraction process that still serves as the basis for oil sands extraction today. Taking note of Clark’s process, Fitzsimmons used his limited resources and entrepreneurial spirit to build a crude version of his own at a site 89 kilometres north of Fort McMurray. His makeshift operation lacked the chemical additives and motorized equipment used at Clark’s plant, making it far more labour intensive and less efficient. The result was less than the finest quality crude, but it was crude nonetheless. Fitzsimmons made his first sale, took out his own patent and named his separation plant Bitumount. His version of the process was simple: it involved crushing the bitumen ore and mixing it into hot water, stirring the slurry and then leaving it to settle. The sand would sink to the bottom, and the thick oil would rise to the surface to be skimmed off. The collected oil was then run through coldwater troughs to wash out any remaining sediments, and finally heated to evaporate the water. The whole process was

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