Foreword

Sustainability & community involvement

as critical components of ESG

After spending several years travelling in and out of foreign mining camps in all parts of the world, I realised one thing – we have the power to create a skill-based community, not just a workforce. By Morgan Lekstrom*

This led me down a very interesting career path of not only taking part in building mines and leading teams, but always having the idea of the local community coming away with something more significant than just a mine site.

There are companies doing excellent work when it comes to involving local communities and local stakeholders, even in remote locations.

In the Canadian Arctic, for example, there is Sabina Gold & Silver, which I saw first-hand a few years ago as an engineering manager with the company, from the office to on-site at the Back River Marine Laydown Project. We put boots on the ground with our team and local contractors. Our focus was on-time, on-budget execution and early integration with the local workforce. I learned from my time at Sabina that engaging earlier in the process, even in the construction phases, will create a stronger foundation. Today, Sabina is advancing towards constructing the Goose gold mine at its Back River Gold Project in northern Canada’s Nunavut territory.

In Nunavut, the Inuit own the land, and the 1993 Nunavut Agreement governs environmental assessment and permitting. Sabina has a strong IIBA (Inuit Impact and Benefit Agreement) with the Inuit of the Kitikmeot Region, which provides financial and socio-economic opportunities for the local Inuit alongside benefits to other Sabina stakeholders. Environmental well-being is among the IIBA commitments, which includes an Inuit Environmental Advisory Committee. This successful partnership – led at Sabina by Bruce McLeod, president and CEO, and Matthew Pickard, VP: Environment and Sustainability – shows that experience, engagement and listening can create a collaborative path forward.

In a very different location and political environment in West Africa, former Canadian-owned Golden Star Resources has also done an excellent job with its community integration work in Ghana when it oversaw the Prestea underground gold mine. I was proud to lead teams on the ground while working with members of the executive team on implementing strategic initiatives to advance the development and revival of the mine and the local community. This involved working closely with community representatives and government officials to ensure that corporate and local objectives were aligned, documented, and achievable. The company’s sustainability activities, then led by Philipa Varris, the executive VP heading up sustainability at the time, brought industry awards as ESG (environmental, social and governance) producer of the year and for environmental and social responsibility.

While in Ghana, we developed world-class training programmes for various trades and engineering roles. Local workers were taught, coached and guided by not only ex-pats but also local trainers with whom we could work. We also established relationships with local training facilities, helping fund and train their trainers. This created a programme that would be sustainable for the long term with less ex-pat

Morgan has 14 years’ mining experience in progressively senior roles in project, operations and engineering management

FOREWORD

Morgan Lekstrom and locally trained field team in Ghana at Golden Star Resources’ Prestea gold mine – summer, 2016

involvement. As an ex-pat, my goal was to ‘work myself out of a job’ and have a local professional transition into the role. My goal was to help make the project, the Ghanaian communities and the company successful. This ‘train the trainer’ approach spread across all of Golden Star’s operations in Ghana. Ultimately, we created a strong and growing team of leaders with a heavy emphasis on departments that were managed locally. Eventually, after I had left for family reasons, the task was completed with mainly local integrated managed teams.

Essential aspects of ESG initiatives

There are fundamental aspects to these and other well-implemented ESG initiatives. This includes boots on the ground and listening to people living there. Both are critical to understanding a community’s needs and its people. This is what has made companies like Sabina and Golden Star successful, and the industry sees this industrychanging direction to more initiatives like these. Both mining corporations and junior explorers must first consider themselves as stakeholders in the communities where they operate. Being there in person and learning about concerns, needs and desires are paramount to developing an effective and implementable sustainability plan. There are times when you may have a great project, team and location, but it may not be feasible for many other reasons.

The thinking behind this is clear. In modern-day mining, environmental processes are rigorous. Community initiatives are integral to both permitting and a company’s international reputation, which forms the foundation for investor confidence. Creating successful, long-term collaborative partnerships addresses sustainability, supports permitting to conduct exploration, advances local skill-based training and utilises those skill sets not only in the operation but the construction.

When companies work with and in local communities, the people involved in their projects take ownership and develop a sense of duty. So too do executives who spend significant time locally. They forge community ties and a growing sense of

FOREWORD

responsibility, which is then reflected in the positive choices made by those leaders and the businesses they represent. These decisions translate directly to the environment, as it is an environment they care about and will spend time in over the long term.

Indeed, creating programmes from the office as a CEO is much different from spending time on the ground and understanding what programmes are needed. Large companies obviously function much differently than junior mining companies, but the basics are the same. Putting boots on the ground and gaining an understanding of needs is critical in either case. The CEO is not always best suited for this role, so companies must understand their strengths and weaknesses and accommodate.

And, of course, there are consequences when this is not adequately addressed, including potential issues with permitting, community buy-in and, ultimately, degradation of shareholder value.

High-standard ESG practices

It is heartening to see corporations realising the importance of engaging in high-standard ESG practices. There are many benefits for the world we live in and from an investment community stance too.

ESG considers corporations’ impact on all stakeholders, from the communities in which they operate and their workforce to the clients/ customers served. This tells mining executives that investors want to be more responsible, see positive change, and are backing companies with this type of holistic view.

My experiences in Ghana, Indonesia, Peru and Mongolia have given me a different perspective on what ESG means. Integrating strategies with input from community leaders at the outset of a project can support executive teams to make decisions that are more time- and cost-effective. At the same time, this helps to advance field work while creating greater harmony and goodwill with the people who live and work there.

I have had the pleasure of working with ESG experts, being in the field and leading the change in environmental and sustainability initiatives. From my experience, change starts at the base, just

COVER STORY

like a triangle. With local communities, it is about the longer-term benefit to both, through rapid upskilling in a methodical way that will benefit local populations while creating long-term growth potential. Building communities around projects that have a long-term outlook for growth can benefit everyone through infrastructure, school and business opportunities.

My experiences in Ghana and other developing resource districts have ingrained in me the importance of community relations and environmental stewardship as being fundamental to project success. I am thankful for the wisdom shared by local leaders and industry stalwarts in creating effective ESG programmes.

In my recent work as the CEO of Silver Hammer Mining, I applied these lessons to effectively groom our silver exploration projects in the US. In Idaho, we applied for permits from local agencies, making the submission based on best ESG practices. Though this process usually takes years, the permits were granted to Silver Hammer in a matter of months. I am proud to say this came about by working closely with local contractors, understanding regulations and adjusting the technology used to fit within these regulations.

As leaders, we can make mistakes, but we can also learn from them. In truth, we are only as good as the knowledge we have to make decisions. Sometimes we need to find more information or see for ourselves to understand. And small changes over time make a significant difference.

*Morgan Lekstrom previously served as the president and CEO of Silver Hammer Mining Corp.

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