ONTARIO MINING ONTARIO Economy | Gold | Ring of Fire | Base Minerals | Finance | Services | Equipment Economy | Gold | Ring of Fire

Ontario Mining 2015 Extract Dear Readers,

With 42 active mine sites generating over 200,000 jobs and $800 million annually for the province's coffers, Ontario is Canada's largest producer of commodities. The province’s mineral production is now valued at $9.2 billion with more than $4 billion More invested in exploration, R&D, equipment and construction. With your Equipment, People, and Process Despite volatility in prices of the province’s two main exports – gold and nickel – a number of new mines are set to open in the coming years, in addition to Vale’s fully automated Totten mine that opened in February 2014. We have also witnessed a shift Emerson will help increase uptime through new technologies, in the merger market in Ontario, where a number of major acquisitions have occurred multiple world class brands, and 80 years of industry expertise. in the gold sector since 2012, reinforcing the attractiveness of the province’s assets.

To find out how to extract more in mining contact us at: Nonetheless, social acceptability and constrained access to high-potential sites Tel: 905 948 3400 or Email: [email protected] remain hurdles for Ontario to overcome. In this context, the modernization of the Mining Act, as well as the further implementation of Northern Ontario’s Growth Plan agenda, will play a crucial role in advancing the Ring of Fire, which represents a potential $25 billion for the province.

As the alpha of the world’s mining sector, Ontario will set the pace for the mining industry in 2015. Through its unique and long-standing experience in financing, exploration, innovation, production and safety, both Toronto and Northern Ontario will help develop projects and optimize mining processes across the world.

Throughout our Industry Explorations, we will explore these issues in more detail by presenting you viewpoints of those on the ground, the movers and shakers of the industry with whom we met one-on-one in Toronto, Sudbury and Timmins. This book is the culmination of months of preparation, research and interviews with the sector’s top executives and policymakers, who generously donated their time and insights. Such a report would not be possible without their input, and we sincerely thank them for their support.

Gabrielle Morin Senior Director

Angela Harmantas Senior Journalist

Global Business Reports

Ad_GBR_Mining.indd 1 14-05-23 12:09 PM Extract Dear Readers,

Gabrielle Morin Senior Director

Angela Harmantas Senior Journalist

Global Business Reports

Ad_GBR_Mining.indd 1 14-05-23 12:09 PM CONTENTS Exclusive Interviews Leading figures in Ontario’s mining industry from the governmental, non-government and private sector discuss their business and organizational strategies as well as the OVERVIEW 64. Targeting the Youth: Recruitment in wider trends in the industry. A World Class Jurisdiction: Ontario and Ontario’s Mining Industry its Mining Industry 66. Expert Opinion by Collins Barrow Toronto Infrastructure Advisory (CBTIA) 8. Introducing Ontario: A Brief Political and 67. Interview with CJ Stafford & Associates 11, 16, 25, 38, Economic Overview 68. Interview with Resource Capital Funds 49, 57 11. Interview with Ministry of Northern 69. Interview with IBK Capital Development and Mines 70. Interview with Waterton Global 12. Forging a New Path: An Introduction to Resource Fund Mgmt. Editorial Mining in Ontario 71. Interview with Ormston List Frawley 14. Mapping Ontario's Mining Industry LLP Analysis 16. Interview with Ontario Mining There is no substitute for talking in person. Association SERVICE AND SUPPLY IN Global Business Reports’ on-the-ground 17. Expert Opinion by Davies, Ward, Phillips SUDBURY journalists spend months surveying the & Vineberg LLP industry and speaking to its leaders, Ontario's Home for Mining's Ancillary 18. Interview with KPMG gathering a deep and Services 19. Expert Opinion by XPS Consulting & objective view of Testwork Services Ontario’s mining sector. 74. Expanding Expertise: Haulage, Surveying, and Safety 12, 22, 34, 44, GOLDEN OPPORTUNITIES 76. Company Profile by Minewise 54, 62, 74, 80, Exploration and Production of Gold in 77. Interview with Becker Varis Ontario 78. Interview with Industrial Fabrication Inc. 88 79. Interview with Rematech Industries 22. New Gold Districts Offer Huge Potential 80. Meeting Growing Challenges: Heavy 25. Interview with Harte Gold Corp. Equipment, Drilling, and Shaft Sinking Maps and 26. Interview with Rubicon Minerals Corp. in Ontario Quantitative Data 30. Interview with SRK Consulting 82. Interview with Ausenco Maps and quantitative data highlight and 31. Interview with Northern Sun Mining 83. Interview with MacLean Engineering clarify the key trends and underlying 84. Interview with Orbit Garant Drilling economics of both the Ontario mining 85. Interview with B&D Manufacturing SLOW BURN industry as well as the wider economy. Ontario's Vaunted Ring of Fire 86. Interview with DMC Mining Services The Added Edge: Consulting and 34. Progress Despite Setbacks in the Ring 88. Technology in Ontario of Fire 90. Interview with Emerson Canada 8-9, 12-16, 23, 38. Interview with Hatch 91. Interview with XPS Consulting & 39. Interview with MacDonald Mines Testwork Services 35, 45, 54, 62 40. Interview with Noront Resources 92. Interview with Cowan Dynamics 41. Interview with Bold Ventures Inc. 93. Interview with Centric Mining Systems (NCS Technology Inc.) BEST OF THE REST Expert Opinion Ontario's Other Minerals APPENDIX Into the Future Company leaders write in-depth thought 44. Unlocking Value in Ontario’s Diverse pieces on specific topics in the industry, Commodities 96. Final Thoughts ranging from new reporting standards to 47. Interview with Black Widow Resources 98. Company Index improve transparency to the obstacles to Inc. 99. Credits increasing infrastructure 48. Interview with First Nickel Inc. investment. 49. Interview with Ontario Graphite 50. Interview with Northern Graphite Corp. 51. Interview with Transition Metals 17, 19, 66

GLOBAL REACH Exporting Mining Expertise and Finance

54. Broadening Horizons: Ontario’s Miners Final in South America, Europe, Asia, and the Thoughts United States This research has been conducted by Angela Harmantas, When the global mining industry rebounds, 57. Interview with Orvana Minerals Corp. Gabrielle Morin, and Irina Negoita. Ontario will be at the fore. Company Edited by John V. Bowlus 58. Interview with Dundee Precious Metals Graphic design by Gonzalo Da Cunha executives provide additional color about 60. Interview with Silver Bear Resources the trends and new ideas that will shape A Global Business Reports Publication 61. Interview with Stans Energy Corp. For updated industry news from our on-the-ground teams the future of mining 62. Interview with Black Iron Inc. around the world, please visit our website at gbreports.com, in Ontario. subscribe to our newsletter by signing up 63. Towering Toronto: Financial and Human to our VIP list through our website, Capital in Ontario Mining or follow us on Twitter: @GBReports. 96-97

ONTARIO MINING 2015 CONTENTS Exclusive Interviews Leading figures in Ontario’s mining industry from the governmental, non-government and private sector discuss their business and organizational strategies as well as the OVERVIEW 64. Targeting the Youth: Recruitment in wider trends in the industry. A World Class Jurisdiction: Ontario and Ontario’s Mining Industry its Mining Industry 66. Expert Opinion by Collins Barrow Toronto Infrastructure Advisory (CBTIA) 8. Introducing Ontario: A Brief Political and 67. Interview with CJ Stafford & Associates 11, 16, 25, 38, Economic Overview 68. Interview with Resource Capital Funds 49, 57 11. Interview with Ministry of Northern 69. Interview with IBK Capital Development and Mines 70. Interview with Waterton Global 12. Forging a New Path: An Introduction to Resource Fund Mgmt. Editorial Mining in Ontario 71. Interview with Ormston List Frawley 14. Mapping Ontario's Mining Industry LLP Analysis 16. Interview with Ontario Mining There is no substitute for talking in person. Association SERVICE AND SUPPLY IN Global Business Reports’ on-the-ground 17. Expert Opinion by Davies, Ward, Phillips SUDBURY journalists spend months surveying the & Vineberg LLP industry and speaking to its leaders, Ontario's Home for Mining's Ancillary 18. Interview with KPMG gathering a deep and Services 19. Expert Opinion by XPS Consulting & objective view of Testwork Services Ontario’s mining sector. 74. Expanding Expertise: Haulage, Surveying, and Safety 12, 22, 34, 44, GOLDEN OPPORTUNITIES 76. Company Profile by Minewise 54, 62, 74, 80, Exploration and Production of Gold in 77. Interview with Becker Varis Ontario 78. Interview with Industrial Fabrication Inc. 88 79. Interview with Rematech Industries 22. New Gold Districts Offer Huge Potential 80. Meeting Growing Challenges: Heavy 25. Interview with Harte Gold Corp. Equipment, Drilling, and Shaft Sinking Maps and 26. Interview with Rubicon Minerals Corp. in Ontario Quantitative Data 30. Interview with SRK Consulting 82. Interview with Ausenco Maps and quantitative data highlight and 31. Interview with Northern Sun Mining 83. Interview with MacLean Engineering clarify the key trends and underlying 84. Interview with Orbit Garant Drilling economics of both the Ontario mining 85. Interview with B&D Manufacturing SLOW BURN industry as well as the wider economy. Ontario's Vaunted Ring of Fire 86. Interview with DMC Mining Services The Added Edge: Consulting and 34. Progress Despite Setbacks in the Ring 88. Technology in Ontario of Fire 90. Interview with Emerson Canada 8-9, 12-16, 23, 38. Interview with Hatch 91. Interview with XPS Consulting & 39. Interview with MacDonald Mines Testwork Services 35, 45, 54, 62 40. Interview with Noront Resources 92. Interview with Cowan Dynamics 41. Interview with Bold Ventures Inc. 93. Interview with Centric Mining Systems (NCS Technology Inc.) BEST OF THE REST Expert Opinion Ontario's Other Minerals APPENDIX Into the Future Company leaders write in-depth thought 44. Unlocking Value in Ontario’s Diverse pieces on specific topics in the industry, Commodities 96. Final Thoughts ranging from new reporting standards to 47. Interview with Black Widow Resources 98. Company Index improve transparency to the obstacles to Inc. 99. Credits increasing infrastructure 48. Interview with First Nickel Inc. investment. 49. Interview with Ontario Graphite 50. Interview with Northern Graphite Corp. 51. Interview with Transition Metals 17, 19, 66

GLOBAL REACH Exporting Mining Expertise and Finance

ONTARIO MINING 2015 A World Class Jurdisction: Ontario and its Mining Industry

“Corporate social responsibility, community involvement, and transparency will grow as areas of importance going forward. No mining company can afford to ignore any of those obligations and it is important to Canada to be seen as being responsible in that area.”

- Dawn P Whittaker, Partner, Norton Rose Fulbright

Image: SRK Consulting A World Class Jurdisction: Ontario and its Mining Industry

- Dawn P Whittaker, Partner, Norton Rose Fulbright

Image: SRK Consulting Arctic Ocean

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Prince Dawson Fort Rupert Creek Chipewyan Inukjuak Churchill Fort McMurray Grande Prairie

A Brief Political and ONTARIO AT A GLANCE Prince George ALBERTA SASKATCHEWANS AN Source: Statistics Canada, BC Stats, Ontario Ministry of Finance Economic Overview BRITISH NEWFOUNDLANDNE U COCOLUMBIA Edmonton Flin Flon Thompson & LABRADOR Red Population: 13,678,1700 (2014) North Prince MANITOBA Kamloops Deer Labrador City Capital: Toronto Battleford Albert Chief of State: Premier, Kathleen Wynne, Ontario Vancouver Liberal Party Calgary St. John's GDP, Expenditure-Based: $695.705 billion (2013) Kelowna Saskatoon Corner GDP per Capita: $34,957 (2013) Trail Brook Economic Sector Breakdown: Services 77.5%, Goods Lethbridge Moosonee 22.5% Regina QUEBEC Exports to Other Countries: $ 353.289 billion (2013): Swift ONTARIO NEW PRINCE motor vehicles & parts, precious metals & stones, Current BRUNSWICKBRUNSWIC mechanical equipment, electrical machinery, plastic Winnipeg Brandon EDWARDRDSydney products ISLANDLA D Imports: $ 350,095 billion (2013): motor vehicles & Amos Charlottetown parts, mechanical equipment, electrical machinery, Timmins Thunder Bay Quebec Moncton precious metals & stones, plastic products NOOVA Atlantic Trois-rivieres Fredericton North SCOTIASC Ocean Sudbury Bay Montreal Bangor Halifax The Province of Ontario can rightly Another major advantage for Ontario is be called the heart of Canada and is Canada’s prodigious energy supplies, Ottawa home to the country’s political and fi- but the recent decline in oil prices Kingston nancial capitals in Ottawa and Toronto, since the summer of 2014 may miti- Toronto respectively. Geography has always gate it. Politicians initially brushed off been a major reason for Ontario’s concerns about the price decline but growth and prosperity. Not only is it have acknowledged that the revenues Canada’s largest province by popu- will be impacted and the budget con- lation but it is also its second largest strained. Delays in developing the Al- 500km by total land area, if the more northern berta oil sands add more dark news and remote Northwest Territories and to the energy picture, but price levels Nunavut are excluded. Proximity to the may make delays for the better. More- social-democratic Ontario New Demo- world economy and technological inno- VALUE OF CANADA'S MINERAL EXPLORATION BY PROVINCE, 2014 American market has generated trade over, the U.S. government looks set cratic Party (NDP). The Liberal Party vations for decades to come, but due Source: Natural Resources Canada and cross-pollination of technology to pass legislation for the Keystone has been in power since 2003 and to a lack of investment in roads, mines PROVINCE and industry. The economic motors XL pipeline – the new Republican-con- was reelected in both 2007 and 2011, remain remote and investors unwilling ALBERTA of neighboring Detroit and Cleveland trolled Congress has proclaimed that but its margin has been slipping. In to take the plunge. On the other hand, BRITISH COLUMBIA have stalled relative to their heydays it will be the first act of its majority the 2011 general election, in which it investments in infrastructure are diffi- in the twentieth century but remain ac- session – bode will for the Alberta’s won 53 seats, gave it a minority man- cult for the government to justify with- MANITOBA cessible trade markets. The system of long-term future. Despite the less than date, as the Progressive Conservative out bankable projects already in place. NEW BRUNSWICK canals through the United States to the hoped for prospects for hydrocarbons, Party won 37 and the NDP 17. In the Lobbying by the provincial government NEWFOUNDLAND AND LABRADOR Atlantic Ocean has long afforded On- Ontario is blessed with a wide range 2011 federal election, however, the to his federal counterpart for invest- tario routes to world markets. Ontario of rivers that have afforded it clean, re- Conservative Party of Canada won 73 ment will eventually yield results, but NORTHWEST TERRITORIES is renowned for its manufacturing and newable hydroelectric energy. Niagara ridings, the NDP 22, and the Liberals the question is how long will it wait. NOVA SCOTIA many of its exports head to the United Falls alone provides a massive amount 11 in Ontario. The Liberal Party of On- In the meantime, the mining industry NUNAVUT States and to Detroit’s automobile of hydropower. Finally, Ontario also tario shifted leadership in 2013 from continues to find value through greater industry. However, Ontario now sur- has the world’s largest nuclear power Dalton McGuinty, which had led the efficiency and technology. This report ONTARIO passes Detroit in car production and is plant, the Bruce Nuclear Generating party since 2003, to Kathleen Wynne in outlines how miners as well as service QUEBEC 2013 in a bid to rejuvenate the party’s and supply companies are using inno- strong in producing steel, iron, machin- Station. SASKATCHEWAN ery, and chemicals as a result of the The political landscape in Ontario is prospects. vation, technology, and data in Ontario province’s abundant natural resources. varied, much like across Canada, but Infrastructure is at the top of the and in jurisdictions across the globe. YUKON TERRITORY To the east, the province of Quebec of- there are three main parties: the On- agenda for the mining industry. On- The global mining industry may be in CANADA TOTAL: 2146.8 fers another dynamic trading partner, tario Liberal Party, the Progressive tario is home to world-class mineral a lull, but when it turns around, Ontario C$ 50 100150 200 250 300 350 400 450 500550 millions along with the rest of Canada. Conservative Party of Ontario, and the production that can help power the will surely lead its resurgence. •

ONTARIO MINING 2015 - 8 - Industry Explorations Industry Explorations - 9 - ONTARIO MINING 2015 Arctic Ocean

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YUKON TERRITORYY

Echo Bay Whitehorse NUNAVUT NORTHWEST TERRITORIES EDITORIAL Global Business Reports Baker Iqaluit FACTSHEET Yellowknife Lake

Rankin Inlet Introducing Pacic Ocean Bear Ontario Lake

Prince Dawson Fort Rupert Creek Chipewyan Inukjuak Churchill Fort McMurray Grande Prairie

ONTARIO MINING 2015 - 8 - Industry Explorations Industry Explorations - 9 - ONTARIO MINING 2015 Global Business Reports INTERVIEW

Environmental and Engineering Services for the Mining Industry a priority for the Ministry to extend the their own resources into it. The province The Honorable 15% federal tax credit. The extension on the other hand is fully committed of the credit is positive but it should be to move forward with the project, and Michael Gravelle made permanent. As with any industry, we recently announced that we would security and clarity of policy are two crit- invest $1 billion to fund infrastructure ical factors in making investment deci- development in the region. However, it sions. is clear that the federal government will still need to participate in this project. Minister Now that Cliffs Natural Resources has The ROF bears not just provincial but Ministry of Northern suspended its operations in the Ring also federal importance, as it will help Development and Mines, of Fire (ROF), how do you foresee the First Nations to improve the economic Ontario region developing? and social conditions in their communi- We were disappointed about Cliffs sus- ties. CH2M HILL serves our clients in the mining Whether the project is large or small, pending its operations, but the company industry with a broad set of services available CH2M HILL specializes in identifying strategic is still interested in the region and will- What is the significance behind the throughout the life cycle of a mine. These solutions to mining challenges that save time ing to work in conjunction with the ROF appointment of Bob Rae and Frank Ia- services range from permitting and compliance and money. With 17 offices in Canada and Development Corporation. While the de- cobucci to lead negotiations on behalf for new and expanded mines, to mineral 247 offices worldwide, we have the local cision from Cliffs has certainly affected of the provincial government and the processing and metallurgical engineering, knowledge and global reach to solve your the image around the ROF, we should Matawa First Nations? water and waste management and treatment, most pressing technical and regulatory issues. not ignore other companies which have The Ministry of Northern Development through reclamation and restoration services good deposits in the region, such as and Mines is very encouraged by the needed during mine closure. Noront and KWG. The ROF is a crucial way that discussions between First Na- region with serious infrastructure issues tions and the province are unfolding. At ch2mhill.com | twitter.com/ch2mhill | facebook.com/ch2mhill that need to be solved in cooperation PDAC 2013, Premier Kathleen Wynne, © 2013 CH2M HILL with both levels of government and in- Minister of Aboriginal Affairs, David ES101713203343TOR dustry. Zimmer, and myself met with the nine Matawa First Nation chiefs to discuss What is the concept behind the ROF the ROF, which was a significant step You previously held the position of Development Cooperation? forward in the engagement process. Sponsors & Exhibitors Minister of Northern Development and The formation of the Development Co- The interests of the province and the Mines between 2007 and 2011, when operation brings together partners who First Nations are quite similar in that Gold Sponsor crucial changes were introduced to the are interested and capable of improving we want to see appropriate benefits Mining Code. What was the impetus infrastructure and financing for the ROF. for First Nations communities and pre- behind these changes? The Ministry recently appointed Deloitte serve the environment as development When I was in the office between 2007 to act as a third party resource for key occurs. We were lucky enough to bring and 2011, one of the key priorities was stakeholders including the government, the former justice of the Supreme Court to modernize the Mining Act to reflect First Nations groups, and industry. The of Canada, Frank Iacobucci, on board as 25 – 27 May 2015 Silver Sponsors Suntec Convention Centre, Singapore current conditions in the industry. The Development Corporation is going to well, who has significant experience re- Mining Act was written a hundred years be the key in helping Ontario to make lated to First Nations.

EXPLORATION,EXPLORATION,EXPLORATION, DEVELOPMENT DEVELOPMENT DEVELOPMENT AND AND INVESTMENT INVESTMENT AND INVESTMENT FOR FOR MINERS, MINERS, FOR FINANCIERSMINERS, FINANCIERS FINANCIERS AND AND INVESTORS INVESTORS AND INVESTORS ago and had never been significantly the ROF more accessible, and we are updated. It was essential to strike the stressing the importance of the inclu- How important is it for Ontario to foster Conﬁ rmed speakers for 2015 include: right balance between protecting On- sion of First Nations in this cooperation. and support a healthy mining industry? Company Showcase Sponsors • Cynthia Carroll, Former CEO, Anglo American tario’s attractive investment image and Securing financing is crucial: we are es- The mining industry is very significant • Simon Murray, Executive Chairman, GEMS & Former Chairman, Glencore strengthening ties with the First Na- timating it will involve between $2 to $3 to Ontario’s economy. There are 42 • Frank Holmes, CEO and Chief Investment Ofﬁ cer, US Global Investors tions. Also, we were concerned about billion to put appropriate infrastructure in operating mines, and more people em- • Bert Koth, Managing Director, Denham Capital Management developing the economy, securing jobs place. ployed in the sector than ten years ago. • Tony Manini, Managing Director and CEO, Tiger Realms Minerals & Director, EMR Capital and ensuring continuous investments. The mining service and supply sector • Tuhin Mukherjee, Managing Director, Essel Mining & Industries & Sector Head – Mineral Resources, Aditya Birla Group Investment into Ontario’s mining sector The federal government has stated is worth nearly $6 billion and employs • Tato Miraza, CEO, PT Antam Associate Sponsors continues to be strong. Even though it that the ROF is a provincial matter, yet 50,000 people. Moreover, Ontario con- • Alberto Migliucci, CEO, Petra Commodities has dropped since the peak figure of $1 Ontario has stated that both levels of tinues to have the highest level of ex- • Erik Bethel, Managing Director, Darby Private Equity billion in 2012, there is still a significant government need to be involved. How ploration expenditure in Canada: nearly • Tim Sun, Chairman, HKIMA amount of money spent on exploration. can Ontario overcome this impasse? 25% of Canadian exploration is done • Mr Biao Chen, Managing Partner, Jinjiang Mining Fund The new federal budget did not include in Ontario. Regardless of the commod- • Mr Kevin McElligott, Director - Australia, Franco Nevada Corporation Are you pleased by the federal budget’s anything on the ROF, which was cer- ity price index, the industry will pick up extended the mineral exploration tax tainly disappointing. The federal govern- again in the future. • Speaking and sponsorship opportunities are now available credit for another year? ment frequently talks about the enor- Maricel Montilla | [email protected] | +65 6322 2331 The economic climate is much more mous economic potential of the ROF http://www.terrapinn.com/conference/asia-mining-congress challenging for juniors now, and it was and yet there is no willingness to put

Industry Explorations - 11 - ONTARIO MINING 2015 Global Business Reports INTERVIEW

Industry Explorations - 11 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Forging a New Path

An Introduction to Mining in Ontario

There is no other mining jurisdiction in The security that mining companies beneficial because they encourage and in projects and to have them trained so the world that is home to the level of thought that they enjoyed with Ontario’s require those active in mineral resource that they are qualified for higher skilled mining expertise that is found in Ontario. regulatory framework was seriously exploration and extraction to initiate dia- jobs in the mining industry. Partnerships EXPLORATION AND DEPOSIT APPRAISAL EXPENDITURES IN ONTARIO, That might seem like a grandiose state- questioned in 2012, when the Ministry of logue with communities that are directly with First Nations include setting up joint BY JUNIOR AND SENIOR COMPANIES, 2009-2014 ment, but there are numbers to support Northern Development and Mines intro- affected by mining and mineral resource ventures where they have decision mak- Source: Natural Resources Canada it: the province’s mineral production is duced a number of changes to Ontario’s exploration from the onset of a project,” ing power, where they can deploy their valued at $9.2 billion, with more than Mining Act. The new scheme requires said Frawley. “Hopefully, it will lead to members and exercise revenue sharing SENIORS JUNIORS $4 billion annually invested in R&D, ex- companies to file a plan with the govern- more cooperation,” he added. structures,” said David Morris, the com- % ploration, construction and equipment. ment of Ontario prior to undertaking ex- Developing mining jurisdictions around pany’s founder. 70 The Toronto Stock Exchange is the pre- ploration work, as well as to consult with the world look to Canada as a model In Ontario, aboriginal employment ac- eminent center for global mining finance, any potentially affected aboriginal com- of sustainable development, but even counted for 9.7% of total mining jobs in 60 accounting for the majority of the world’s munities in the area. While the changes a province with as rich a mining history 2011. Mining is also the largest private 50 mine financing. sought to provide clarity with regards to as Ontario it has its fair share of envi- sector employer of aboriginal peoples in

Hundreds of juniors exploring the globe a company’s duty to consult, they have ronmental and social challenges when Canada. 40 for metals and minerals call Toronto had the unintended effect of slowing the it comes to mining. The Ring of Fire is By mid-2014, the mining industry in On- home, and Ontario alone accommodates permitting process at a time when ex- a classic example of how development tario seems to have collectively weath- 30 more than 1,000 mining supply and ser- ploration expenditure in the province has in a mineral-rich region can be hampered ered the storm. Those who survived 20 vices companies. “It is important to un- dropped significantly. when it comes to obtaining the social li- 2013 relatively intact seem determined derstand the significance of the mining According to Denis Frawley, a partner cense to operate. to learn from the mistakes of their indus- 10 industry to Ontario’s economy,” said at Toronto-based law firm Ormston List The two biggest challenges to develop- try’s past. Growth above all is no longer Hon. Michael Gravelle, Minister of North- Frawley LLP, some of his clients were ing mines in northern Ontario are its re- the operating mantra, replaced instead 2009 2010 2011 2012 2013 2014 ern Development and Mines of Ontario. frustrated with the lack of clarity with moteness and engaging with aboriginal by a promise to make efficient use of “There are 42 operating mines right now, regards to the consultation process. groups. “Remoteness brings challenges shareholder funds. “There was certainly and more people employed in the min- “There was noticeable concern that the in how you move forward and design the a rush into the junior sector when the ing sector than there were 10 years ago. government did not have processes and project as well as access; for example, commodity boom happened, as the re- The mining supply and service sector staff in place to swiftly deal with consul- more helicopter work, which requires turns were high and the sector was very employs 50,000 people. Nearly 25% of tation-related filings. But companies are different procedures and planning,” said vibrant,” said Lee Hodgkinson, Natural ONTARIO EXPLORATION SPENDING BY LOCATION, 2013 all exploration in Canada is done in On- adjusting to the new system, and First David Brown, principal and environmen- Industry Leader at KPMG. “One could Source: Natural Resources Canada, MNDM tario.” Nations are becoming more proactive,” tal geochemist at environmental consult- argue that too many companies were Nevertheless, since 2012, exploration in he said. ing company Golder Associates. “The created without enough quality assets. the province has suffered. Ontario’s two Others are less fortunate. Northern Su- remoteness and the number of commu- There now needs to be some significant largest mineral exports – gold and nickel perior Resources Inc., a Sudbury-based nities in the Ring of Fire have made en- consolidation and reallocation of capital. – endured some of the most volatile company, filed a $110-million lawsuit gagement more complicated.” There has been a paradigm shift at the commodity prices in recent memory. The against the Ontario government after Companies that are able to engage with top of the market. The overarching mes- mineral-rich Ring of Fire was also dealt its talks with the Sachigo Lake First Na- First Nations groups early on are the sage now is value over volume and disci- a substantial blow as major companies tions communities broke down. North- ones that have a high probability of suc- plined capital allocation. The companies shelved projects because of a frustrating ern Superior claims that the Ontario cess. The Morris Group of Companies, a have learned their lessons, but the way Off Minesite C$ 510 million 85% On Minesite C$ 90 million 15% lack of infrastructure commitments from government failed to meet its own duty Sudbury-based diversified services com- the market itself reacts is what will drive industry or government. On the other to consult by not intervening in their dis- pany, set up the Niska Career Academy executive decisions,” he said. hand, a number of new mines set to cussions. in 2010, which was the first major abo- Ontario is forging its own path in the min- open in the next two years, not including The longer-term effect of the modernized riginal training college in Cochrane, On- ing industry. Having grown through many Vale’s fully automated Totten nickel mine Mining Act will take time to manifest. tario. The college has achieved an 80% different cycles, its industry stakeholders that opened in February 2014, will help to “We do think that the changes related job placement rate. “We are doing our understand that the key to survival is to bolster faith in Ontario’s mining potential. to consultations with First Nations are best to get the First Nations involved innovate and think differently. •

ONTARIO MINING 2015 - 12 - Industry Explorations Industry Explorations - 13 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Forging a New Path

An Introduction to Mining in Ontario

ONTARIO MINING 2015 - 12 - Industry Explorations Industry Explorations - 13 - ONTARIO MINING 2015 MAPPING ONTARIO'S MINING INDUSTRY

GOLD MINES

NAME COMPANY 1 Bell Creek Mine Lake Shor e Gold Corp. 2 Black Fo x Mine Brigus Gold Corp. 3 Detour Lake Gold Mine Detour Gold Corp. 4 Dome Mine Goldcorp Inc. - Porcupine Gold Mines 5 Eagle Ri ver Mine Wesdome Gold Mine s Ltd. 6 Hemlo Mine Barrick Gold Corp. 7 Hislop Mine St Andrew Goldﬁelds Ltd. 8 Holloway - Holt Mine St Andrew Goldﬁelds Ltd. 9 Hoyle Pond Mine Goldcorp Inc. – Porcupine Gold Mines 10 Island Gold Mine Richmont Mines Inc. 11 Macassa Mine Kirkland Lake Gold Inc. 12 Mishi Gold Mine Wesdome Gold Mines Ltd. 13 Mussel white Mine Goldcorp Inc. 14 Red Lake Gold Mines Goldcorp Inc. 15 Timmins West Mine Lake Shor e Gold Corp. 16 Young – Davidson Mine AuRico Go ld Inc.

BASE METAL MINES 17 Kidd Creek Mine Glencore Xstrata Plc 18 Lockerby Mine First Nickel Inc. 19 Sudbury Operations: Levack Mine KGHM Inte rnational Ltd. McCreedy West Mine 20 Sudbury Operations: Copper Cliff North Mine Creighton Mine Ellen Mine Vale S.A. Garson Mine McCreedy East / Coleman Mine Stobie Mine Totten Mine 21 Sudbury Operations: Nickel Rim South Mine Glencore Xstrata Plc Fraser Mine

IRON MINE

22 Tomclid Iron Mine Ferromin Inc.

PLATINUM GROUP METAL MINE

23 Lac des Iles Mine North American Palladium Ltd. PHANAREZOIC

DIAMOND MINE Paleozoic and Mesozoic basin sequences 1 Victor Diamond Mine De Beers Canada Inc. PRECAMBRIAN MAJOR INDUSTRIAL MINERAL OPERATIONS PROTEROZOIC 1 Blue Mountain Operati ons (nepheline sy enite) Unimin Canada Ltd. Greenville Province (part of Greenville Orogen) 2 Goderich Brine Field (salt) Sifto Canada Inc. Southern Province (part of Penokean Orogen) 3 Goderich Mine (salt) Sifto Canada Inc. 4 Hagersville Mine (gypsum) CGC Inc. ARCHEAN 5 Mohawk Garnet Mine (garnet abrasive) Mohawk Garnet Inc. Superior Province 6 North Williams Mine (barite) Extender Minerals of Canada Ltd. 7 Ojibway Mine (salt) The Canadian Salt Company Ltd. MINE LOCATIONS 8 Penhor wood Mine (talc) Imerys Talc Metal Mines 9 Tatlock Quarry (calcium carbonate) OMYA Canada Inc. Industrial Mines/Quarries 10 Windsor Brine Field (salt) The Canadian Salt Company Ltd. Diamond Mine

ONTARIO MINING 2015 - 14 - Industry Explorations Industry Explorations - 15 - ONTARIO MINING 2015 MAPPING ONTARIO'S MINING INDUSTRY

GOLD MINES

IRON MINE

22 Tomclid Iron Mine Ferromin Inc.

PLATINUM GROUP METAL MINE

23 Lac des Iles Mine North American Palladium Ltd. PHANAREZOIC

ONTARIO MINING 2015 - 14 - Industry Explorations Industry Explorations - 15 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports EXPERT OPINION

In terms of challenges, what are some tive involves students telling the story Transparency in companies in the Proposed Framework may also be difficult to distinguish pay- Chris Hodgson of the frustrations you are hearing from of the benefits of mining as they see it is consistent with the approach taken in ments to Canadian Aboriginal entities that your members? in a 3-minute video. Another initiative is Canada's Extractive the EU Framework. The U.S. Framework, are "social payments" and are, thereby, We have no control over the commod- our mining tours, an increasingly popu- which is being implemented through the exempt from the reporting requirements. ity prices; one issue is naturally the cost lar one-week course in mining for dedi- Sector: A Changing United States Securities Exchange Com- This aspect may result in prejudice to sub- of production. Labor and energy rates cated teachers. mission, will apply only to publicly-listed ject companies operating in jurisdictions are particular areas of concern for our Landscape companies. other than Canada. members. The latter in particular is an What would you like our readers to The Proposed Framework requires re- The Proposed Framework does not pro- President area that requires our attention in con- take from our interview? Sarah Powell, Partner, and porting of payments made by extractive vide for any exemptions where a host Ontario Mining junction with the government to ensure Every jurisdiction may face challenges, Alexandria Pike, Partner, companies to all levels of government, country's laws prohibit disclosure. How- Association a competitive energy price. One thing but Ontario is blessed with good ge- Davies Ward Phillips & Vineberg LLP domestically and abroad. Consistent with ever, the U.S. Framework was recently we are trying to achieve is making sure ology and good people, a combination the EU and U.S. frameworks, categories vacated by the U.S. District Court for the programs like the Northern Industrial that makes the future look bright. With of reportable payments would include District of Columbia due in part to the lack Electricity Rate program applies to all a clear focus on the future, Ontario's taxes, royalties, fees, production entitle- of exemptions to allow for compliance mining companies in Ontario. We aim dynamic mining industry is continually In the face of global pressure for greater ments, bonuses, dividends and infrastruc- with law, and a revised rule has yet to be for predictability in the long-term price evolving to meet society's changing corporate transparency, the Govern- ture payments. Penalties and fines as put in place. of energy. Ontario is currently the most needs and expectations. • ment of Canada announced in 2013 that well as social payments for community With strong international support, Canada expensive jurisdiction in North America. it would establish mandatory reporting centres, schools and training would not is not alone in establishing a reporting standards for Canadian extractive compa- need to be reported. However, payments regime for extractive industries. Policies Looking at the Ring of Fire develop- nies (oil and gas and mining sectors) to made to Canadian Aboriginal entities, and regarding transparency of payments ment, whose responsibility do you improve transparency of the payments indigenous entities internationally, would are poised to change the relationship think it is for supervising as well as that they make to governments world- need to be disclosed, including payments between extractive industries and gov- financing this infrastructure? wide. Since that time, Natural Resources made under Aboriginal Impact Benefit ernments and confer benefits on local The only way that the Ring of Fire can Canada ("NRCan") has consulted with var- Agreements ("IBAs"). communities, lenders and investors. If move forward is to have the provincial ious stakeholders and followed closely The reporting will raise a number of is- implemented at an international scale to governments lead the development. the transparency reporting initiatives of sues. First and foremost, a new role is ensure a level playing field, Canadian min- Put simply, the Ring of Fire needs to the European Union (the "EU Framework") being proposed for provincial securities ing companies should also benefit from happen: the sheer amount of benefits and the United States (the "U.S. Frame- regulators as overseers of the reporting such reporting regimes. to the province is staggering, from work"). In March 2014, NRCan published system, and it is not clear how require- While NRCan is still consulting with vari- What are the key priorities on the economic growth to developing strong a draft mandatory reporting framework ments would be enforced against private ous stakeholders to refine the Proposed Ontario Mining Association’s agenda First Nations communities in the north. (the "Proposed Framework") that would companies. If provincial regulators accept Framework, it is also encouraging pro- for 2014? require Canadian extractive companies the mandate, it may mean significant vincial securities regulators to begin con- The Ontario Mining Association (OMA) What is the Ontario Mining Associa- to publish annual reports of payments of changes to securities regulation. While structing equivalent reporting standards. is one of the longest-standing trade tion’s relationship to First Nations in $100,000 and over, on a project-level ba- private companies must report under the If provincial regulators do not implement associations and its mandate has not the province? sis to government, both domestically and EU Framework, it is the decision of each the Proposed Framework, federal legis- changed significantly since its estab- Mining has helped to build Ontario and abroad. A "project" would be defined as an EU member state as to how they imple- lation would be introduced in fall 2014. lishment. Our objective is to keep min- OMA members take a proactive and operational activity performed by an ex- ment it, and rules are not yet in place to Given this timing, extractive companies, ing competitive in Ontario so that our partnership approach with their local tractive company. The scope of a project outline the mechanism for oversight. The whether publicly listed in Canada or falling members can be sustainable. This is communities. First Nation community would be based on the business context U.S. Framework requires disclosure by under the category of "large and medium" evident by the key policy items that we relationships come in many forms: and might consider licences or leases re- only publicly-listed companies. While the companies operating or headquartered in are currently pursuing, which include Benefit Agreements, local purchasing lated to the operational activity. public company requirement would likely Canada, should prepare to report annually ensuring that energy rates are compet- arrangements, infrastructure invest- Under the Proposed Framework, pub- cover most major mining companies in under the Proposed Framework. itive and maintaining a stable provincial ments and hiring - almost 9% of the licly-listed companies and medium and Canada, it may be necessary to include Davies Ward Phillips & Vineberg LLP is regulatory system. mining industry’s workforce is aborigi- large private extractive companies would private companies to capture the majority an integrated firm of approximately 240 nal, more than any other sector. be required to report. A private company of oil and gas companies and ensure fair- lawyers with offices in Toronto, Mon- What are some of the highlights of is considered "medium and large" if it ness across sectors. tréal and New York. The firm is focused Ontario’s mining sector on a provincial What are some of the goals and meets or exceeds two of the following Second, the Proposed Framework devi- on business law and is at the heart of the and global level? achievements of programs such as So thresholds: (i) C$20 million in assets; (ii) ates from both the EU and U.S. frame- largest and most complex commercial and On a provincial level, mining is a ma- You Think You Know Mining? C$40 million in net turnover; and (iii) 250 works by expressly requiring Canadian ex- financial matters on behalf of its clients, jor contributor to Ontario’s economic The most important factor in programs employees. Any domestic or foreign tractive companies to disclose payments regardless of borders. Davies has one of health. Last year the sector as a whole like So You Think You Know Mining is company headquartered or operating in to Canadian Aboriginal entities (including the leading environmental practices in contributed $9.2 billion to the prov- to enable and engage with the opinion Canada would be required to report if they payments under IBAs) and foreign indige- Canada. Our environmental practitioners ince’s economy; this has dropped by makers and workforce of tomorrow. have a controlling interest in any project in nous entities. This requirement raises sig- work closely with the firm’s mining group 20% since 2012, but considering the We want to correct the outdated image Canada or abroad. The Proposed Frame- nificant and complex issues. For instance, and transaction teams, evaluating and ad- downturn in the global mining industry, some people have of mining and en- work would adopt the definition of "con- there is no universally accepted definition dressing environmental liabilities at the this is not a significant decrease. Glob- courage students and teachers to learn trol", "joint venture" and "joint operation" of "indigenous". As well, most IBAs con- permitting stage of mine development as ally, Ontario’s expertise is in hard rock, about the industry as it is today. The used in the International Financial Report- tain confidentiality clauses that would well as during financings, public offerings, underground mining. So You Think You Know Mining initia- ing Standards. The inclusion of private prohibit disclosure of payment terms. It mergers and insolvencies. •

ONTARIO MINING 2015 - 16 - Industry Explorations Industry Explorations - 17 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports EXPERT OPINION

We are still strong believers in the in- so much opportunity with undervalued Geometallurgical while ensuring spatial representivity, to decisions on future process changes Lee Hodgkinson dustry and see this as an opportunity companies that it is surprising that we forms the basis from which the test- or blending strategies to maximize to build long-term relationships. We are have not seen more deals. As momen- Characterisation at work program is initiated. When ore is value. adapting in a number of ways, including tum builds we will likely see a rush of randomly sampled, blended and tested For over 15 years, XPS Consulting & hiring new talent that is being freed up private equity deals in the mining sec- XPS Consulting & as one composite too early in a project, Testwork Services based in Sudbury, from the mining industry. Our main area tor. the variability within an orebody can be Ontario has practiced geometallurgi- of experience is analyzing risk models Testwork Services muted and create inaccurate estimates cal unit definition, measurement with and putting control structures in place Estimates put the number of junior of concentrate grade and recovery over QEMSCAN, EPMA and XRD technolo- Canadian Mining Practice Leader to help mitigate those risks. Another companies listed on the TSX-V with Dominic Fragomeni, P.Eng. the life of mine. gies combined with metallurgical lab KPMG big area of focus is capital costs, and less than $200,000 in cash at around Director Once the geometallurgical units are and mini-flotation pilot testing in flow- whether companies have the right kind 850. With so many junior companies XPS Consulting & Testwork Services established, the samples undergo min- sheet development and optimization. of controls in place to help them grow on the verge of bankruptcy, is this part eralogical characterization and metallur- Come by the XPS Booth #615 on the their business when the turnaround oc- of a larger change in the way that the gical testing using concentration tech- tradeshow floor to discuss your project curs. junior mining market does business? niques such as lab scale and mini-pilot needs in ore characterization and flow- There was certainly a rush into the ju- Geometallurgical studies define the scale flotation testing and hardness/ sheet development. • Do you think the tide is turning in the nior sector when the commodity boom range of mineralogical characteristics grindability testing. In addition to test- M&A market? Can we expect to see happened, as the returns were high and and metallurgical performance that ul- ing each unit using a representative more creative bids in the future? the sector was very vibrant. One could timately increases the economic value composite, a variability program based There are many undervalued assets out argue that too many companies were of an orebody. Testing on this basis al- on smaller samples from throughout a there. This is why we are seeing an in- created without enough quality assets. lows the geoscientist and metallurgical geometallurgical unit is recommended crease in private equity, thinking they There now needs to be some significant team to create a robust flowsheet able to define the range of performance that can get 15-20% returns. Unfortunately consolidation and reallocation of capi- to treat the full range of variability in can be expected within the unit. the market has punished companies tal. There has been a paradigm shift at an orebody and to develop production Sampling on the basis of geometallur- for growth, so they have been focusing the top of the market. The overarching strategies to maximize financial perfor- gical units allow for mine design to be on repairing their own balance sheet. If message now is value over volume and mance. integrated into the economic model to companies can avoid putting their bal- disciplined capital allocation. The com- Geometallurgical units can be defined maximize ROI and cash flow early in the ance sheets under duress and take ad- panies have learned their lessons, but as an ore type or group of ore types project. This approach also provides ac- vantage of an undervalued market, we the way the market itself reacts is what that possess a unique set of minerals counting of variability, and establishes Can you give us a brief introduction to are likely to see more activity. will drive executive decisions. with textural and compositional proper- the grade/recovery profile and econom- KPMG’s presence in Ontario? ties from which it can be predicted to ics of future ores. It can ultimately lead Images: XPS Consulting & Testwork Services KPMG has a significant footprint here Ontario has been a big player in the Where would you like to see the mining have similar metallurgical performance. in Toronto on the auditing and tax side M&A market, particularly in gold. How- practice of KPMG through the next few The measurement of these textural and MASSIVE SULPHIDES NET TEXTURED SULPHIDES as well as more recently on the con- ever, there has not been a lot of foreign years? compositional properties can be per- sultancy side of our business, covering investment into the province as there KPMG is very excited about Ontario formed cost effectively with modern approximately 30% of the top mining has been in the neighbouring Labrador with the recent wave of activity, but we tools such as Quantitative Evaluation companies locally with a large focus on Trough. Why do you think this is the are also looking to strategically place of Materials by Scanning Electron Mi- gold. We have 12 partners who service case? people into Latin America and gain croscope (QEMSCAN), Electron Micro- a cross-section of mining companies Ontario is a safe jurisdiction, and peo- work experience there. Toronto is still probe Analysis (EPMA) and X-ray Dif- almost exclusively. More recently we ple are more confident operating in ju- the mining finance capital of the world fraction (XRD). have started hiring people with different risdictions where they know they can and a great place to do business. • At XPS, geometallurgical programs be- backgrounds, such as engineers. reduce their timeline to get the mine gin with a review of geological and min- into production. In other jurisdictions, eralogical data with project geologists Which segment of your business are mining companies face a high degree to determine the potential features of you seeing more demand for? of political risk that can override the ac- interest and their geospatial distribution Audit and tax are the more mature parts tual mineral potential of these regions. based upon the existing core logging REVERSE NET TEXTURED SULPHIDES DISSEMINATED SULPHIDES of our business, however looking ahead Ontario is a very gold-focused province, database and ore model. Such a review, there is more potential in the advisory and gold alone does not appeal to for- in conjunction with established metal- space. Recently a few companies have eign investors. Chromite in the Ring of lurgical principals, provides the foun- declared bankruptcy and even more are Fire could potentially change that trend dation to specifically select core to rep- struggling financially. Traditionally this is in the future. resent each potential geometallurgical a sector that is constantly refreshed by type. Representative sampling is a key new IPOs but this has dried up. Compa- Looking at other forms of financing, to ensuring that results of a geometal- nies feel that they would be underval- does KPMG play a part in helping ju- lurgical study will reflect future perfor- ued coming out in this climate. nior to mid-tier mining companies gain mance once production of the orebody access to private equity? is underway. Construction of a non-ran- How has KPMG adapted its strategies KPMG can play a key part in structur- dom sample(s) that contains all features to suit the needs of the cash-strapped ing those transactions. There has been of interest in the correct proportion, market in Ontario and globally? quite the hype about private equity and including grade and grade distribution,

ONTARIO MINING 2015 - 18 - Industry Explorations Industry Explorations - 19 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports EXPERT OPINION

ONTARIO MINING 2015 - 18 - Industry Explorations Industry Explorations - 19 - ONTARIO MINING 2015 Golden Opportunities: Exploration and Production of Gold in Ontario

“Now we have science to find the location of the fault and the technology to drill through it. We are able to view areas that no one has ever really looked at, and with modern science and geochemistry we can find these. On a broader scale, Ontario has a lot of prospective geology, and old mining camps are being reexamined to uncover deposits greater than what was mined previously. It is a blank slate that provides so much opportunity to companies who want to explore, develop and produce.”

- Duncan Middlemiss, President and CEO, St Andrews Goldfields Ltd.

Image: Goldcorp Inc. Golden Opportunities: Exploration and Production of Gold in Ontario

- Duncan Middlemiss, President and CEO, St Andrews Goldfields Ltd.

Image: Goldcorp Inc. EDITORIAL Global Business Reports Global Business Reports EDITORIAL

New Gold Districts Offer Huge Potential

Ontario has been producing gold for Just a few km north of the Red Lake ing Inc., Primero Mining Corp. acquired prove that the acquisitions market is over a century, since the first discovery mine is the Phoenix Gold project, which Brigus Gold Corp., and New Gold Inc. heating up after a lengthy period of in- in the Kirkland Lake area in 1903 led to junior company Rubicon Minerals Corp. acquired Rainy River Resources. activity. subsequent high-grade deposits found is planning to put into production in New Gold’s president, CEO and direc- in Timmins and Red Lake. Over the past 2015. The project was initially discov- tor, Robert Gallagher, explained why New gold districts in Ontario few years, new areas of gold mineraliza- ered in 2008. “The deposit was formed Rainy River represented a good platform tion have been identified in previously by the same series of geological events for the company’s first foray into On- It is significant that the Rainy River, overlooked areas, creating excitement responsible for the deposition of gold at tario. “Two years before we made the Trelawney and Queenston projects, the that there is yet more of the precious Goldcorp’s Red Lake mine. There are acquisition, the company was valued objects of these bids, are all outside of metal to be found in the province. two major folding structures in the Red at over three times the final purchase the traditional gold mining camps in On- The behemoth of Ontario’s gold pro- Lake district; one where the Goldcorp’s price. The fall in the gold price made it tario. New gold districts in the province ducers is Goldcorp’s Red Lake mine in Red Lake mines are located, and another very difficult for Rainy River to finance are emerging and Ontario companies northwestern Ontario, one of the most one 7 km to the northwest, along the the construction of the project, which with projects in underexplored areas are profitable gold mines in the world. axis of which the Phoenix Gold project they had estimated to cost around $800 demonstrating how much more gold In 2013, the mine produced 493,000 is located,” said Michael Lalonde, a for- million. When Rainy River’s market cap- ounces (oz) of over 20 grams per metric mer director of underground operations italization got to a price where our acqui- ton (g/mt) gold, yielding revenues north at Goldcorp who is now president and sition of it with a reasonable premium to ONTARIO EXPLORATION SPENDING of $684 million. Yet industry-wide cost CEO of Rubicon Minerals. the market was very positive on a per- BY MINERAL IN 2013, $ MILLION Source: Ontario Mining Association pressures forced Goldcorp to consider The Phoenix Gold project has a resource share basis, we did the transaction,” new ways to optimize production at the estimate of more than 3 million oz us- said Gallagher. historic site. George Burns, executive ing a 4 g/mt cut-off, and is expected to Yet there has been a seismic shift in the vice president and COO of Goldcorp produce more than 165,000 oz/y for 13 merger market since 2013, when New Inc., described the “cell mining” con- years. Rubicon has constructed an all- Gold acquired Rainy River Resources, cept that divides the underground mine weather road, brought line power to the according to Cameron Mingay, part- into different areas, with one team per site, built a tailings management facility, ner at Toronto-based law firm Cassels cell who are responsible for equipment, a 200-person camp, a new headframe, Brock and Blackwell LLP that acted for planning, scheduling and execution. and a modern hoisting plant. In addi- New Gold on the deal. “The fall in gold “Last year we increased our develop- tion, the company recently completed prices led to a decrease in the valua- ment vertically by 50% simply by em- shaft sinking at 730 meters below the tions of projects, and companies who powering our workforce to deliver better surface, and is now fully equipped and are in the position to make acquisitions results,” he said. commissioned. can offer lower premiums if they can At current reserve levels, Red Lake is manage to do so,” he said. expected to be operating for another M&A hones in on Ontario This point was driven home with the 12 years. Goldcorp’s future success in first major deal of 2014, when Goldcorp Ontario lies in its Cochenour project, Gold companies on the hunt for devel- offered a 15% premium to purchase which is scheduled to begin production oping assets are looking at projects in rival gold company Osisko. Compara- in 2015. Located just 5 kilometers (km) stable jurisdictions with known areas of tively, New Gold offered a 42% pre- west of Red Lake, Cochenour is forecast mineralization to increase their reserve mium to acquire Rainy River just over to produce between 225,000-250,000 base. six months prior. While Goldcorp even- Gold 423 ounces per year (oz/y) of gold. “We will Since 2012, there have been a number tually lost out on the Osisko deal to a Base Metals 72 be touching the ore body later in 2014. of major acquisitions in the gold sector in creatively structured joint bid by Agnico Chromit 45 The shaft is nearly complete and we Ontario: IAMGOLD acquired Trelawney Eagle and Yamana Gold Inc., who will Platinum Group Metals 33 Graphite 15 are currently working on connecting the Mining and Exploration Inc., Osisko jointly operate the company’s projects Other Minerals 7 shaft to the ore body,” said Burns. Mining Corp. acquired Queenston Min- in Quebec and Ontario, these actions Diamond 5

ONTARIO MINING 2015 - 22 - Image: Harte Gold Corp. Industry Explorations Industry Explorations - 23 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

New Gold Districts Offer Huge Potential

ONTARIO MINING 2015 - 22 - Image: Harte Gold Corp. Industry Explorations Industry Explorations - 23 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports INTERVIEW

there is yet to be found. The difficulty bring more risks than even Canadian in- The other major fault zone in the area, The next phase in the projects development is the “Advanced in these areas lies in the geology: while vestors are willing to handle in current Pipestone, runs parallel to the north of Stephen G. Exploration and Bulk Sampling” program. Over the next year we the Timmins and Kirkland Lake gold de- market conditions. Exploration compa- Porcupine-Destor. Compared to Por- will need capital to drive the ramp and access the target area posits were largely discovered near sur- nies with assets near known producing cupine-Destor, Pipestone is even less Roman underground. This will be done with a combination of equity and face, it is likely that many other deposits mines are at an advantage. explored. Greg Romain, president and debt. In addition, we are doing our regional exploration. We have are going to be discovered under glacial Harte Gold is an exploration company CEO of Gowest Gold, believes that the been accessing the flow-through market in the past year and cover and are therefore much harder with an asset located 60 km west of Porcupine zone represents a major area may again later this year. Capital markets have been unreceptive to find. “The Rainy River deposit was Barrick’s Hemlo mine, which produced for potential discovery in the Timmins to financing junior exploration in the last two years, but Harte discovered through integrating surficial more than 204,000 oz in 2013. The mining camp: “Our North Timmins Gold Chairman, President, Gold has been successful in attracting capital to our project. We geology and detailed till sampling and company is using its knowledge of the project covers a 109 square km land CEO and Director have been in the mining business for a long time. We have a drilling,” explained James Siddorn, vice area to find a similar deposit at its Sugar package and, beyond Gowest’s flagship Harte Gold proven management team and we know how to spot good op- president at SRK Consulting (Canada), Zone property. “The Sugar Zone deposit project, Bradshaw, we have intersected Corp. portunities. We like to develop these opportunities to production. part of a team that investigated the geo- is a sheer zone hosted quartz vein with gold on a number of other parts of the At the moment we will look to finance the development of the logical controls on gold mineralization at gold mineralization coming right to sur- project and identified numerous targets Sugar Zone property out of our own cash flow once the mine is Rainy River. “This sub-surface discov- face. At Hemlo, a similar environment that deserve further exploration.” operational and then look for opportunities to grow through fur- ery proves that, although deposits are existed,” said Stephen Roman, chair- With new gold mines set to open and ther exploration and acquisitions. undoubtedly harder to find these days, man, president and CEO of Harte Gold. new areas of exploration proving fruit- many more await discovery in Ontario. “On our property, regional prospecting ful for Ontario mining companies, the What is the importance of having a higher-grade deposit when To locate them, we must also apply our uncovered what we call the “Peacock sector has done everything it can to it comes to the viability of exploration-stage projects? geological knowledge combined with showing,” named after our prospec- weather the gold storm in 2013. Gold Grade is king! Today’s average grade of gold deposits in the the use of geophysical data sets to un- tor, Mr. Terry Peacock, which assayed companies may have experienced the Can you give us a brief background on Harte Gold’s world is just over a gram. The higher grade, “low hanging fruit,” derstand the distribution of structures 87 g/mt, in a similar sericitic schist as biggest drop in the price of the precious operations since GBR last met with you in 2011? has already been picked. The challenge in today’s market is the and their control on the distribution of Hemlo, where more than 20 million oz metal in recent memory, but there are The biggest development for Harte Gold was its acqui- huge investment that is required to tackle low-grade deposits. mineralization.” were found. We are currently focusing signs that the market is beginning a bull sition of Corona Gold’s 51% interest of the Sugar Zone Harte Gold’s deposit at 10 grams per mt is entirely different, with One such company with a known asset our work on starting the advanced ex- run. property. We then raised capital and proceeded with ex- smaller capital required and higher profit margins. More small, outside of traditional mining camps is ploration program and bulk sample on Both Rob McEwen and Eric Sprott have ploration both on the Sugar Zone deposit as well as re- high-grade deposits will make a resurgence. • Treasury Metals, whose Goliath Gold the Sugar Zone property.” staked their careers in the gold sector. gionally on our claim block. We have an entire greenstone project in northwestern Ontario is in Rob McEwen, the founder of Goldcorp belt staked and are looking for a Hemlo-style deposit. close proximity to the Rainy River and Timmins: the historic producer and now chairman and CEO of McEwen The Sugar Zone deposit is a sheer zone hosted quartz Côté Lake projects. The project, which Mining, believes that gold prices could vein with gold mineralization coming right to surface. At has a resource of 1.7 million oz and av- The Timmins gold camp in northern hit $5,000/oz over the next few years. Hemlo, 60 kilometers (km) to the west, a similar envi- erage grade of 2.87 g/mt, also hosts Ontario is one of the most productive “All of the reasons that gold was run- ronment existed. On our property, regional prospecting a significant upside potential. “The C gold mining camps in the world. With ning before have not changed: debt uncovered what we call the “Peacock showing,” named Zone is a new shoot that Treasury iden- mines in operation since 1910, the area levels are accumulating, and the cost after our prospector, Mr. Terry Peacock, which assayed tified in early 2013, and has great poten- has produced more than 70 million oz of servicing that debt will become oner- 87 grams per metric ton (mt), in a similar sericitic schist tial to contain another company-maker of gold, yet companies continue to find ous,” he explained. “Also, a number of as hosted the famous Hemlo deposit, where over 20 mil- hole,” said Martin Walter, president and new deposits in the Abitibi greenstone major gold projects expected to come lion ounces was found! We are currently focusing our CEO of Treasury Metals. belt. on-stream over the next few years have work on starting the advanced exploration program and Also exploring in the area is Tamaka St. Andrew Goldfields currently pro- been delayed, potentially constraining bulk sample on the Sugar Zone, as well as the hunt for Gold, a private exploration company duces nearly 100,000 oz/y of gold from supply.” another Hemlo style deposit. whose Goldlund property is situated its Holt, Holloway and Hislop mines just Eric Sprott, CEO and CIO of Sprott As- on the same greenstone belt as the outside of Timmins. While their Holt set Management and a self-confessed Your former company, Gold Eagle Mines, was sold to Rainy River project. “The property was mine, a former Barrick operation, has gold bug, is slightly more conservative Goldcorp in 2008 for $1.5 billion. Are there similarities an operating mine between 1982-1985, a good five years of reserves left, the in his estimate. “If we look at the gold between Harte Gold and Gold Eagle? producing around 18,000 oz/y. Tamaka company is also exploring its 120 km price trends since 2000, we can expect Gold Eagle was a different style of mineralization with controls an 18-km mineralization strike land base in one of the two major fault to see a $2,100/oz gold price by the end different size characteristics. It was a large, bulk mine- between the towns of Sioux Lookout zones in the area; the Porcupine-Destor of 2014,” he said. “There is huge de- able deposit, whereas the Sugar Zone is a vein with out- and Dryden,” said Tamaka’s president fault zone. “If you look at SAS’s land mand for gold in China and India, central crops on the surface. The Gold Eagle deposit was deep, and CEO, Howard Katz. The project con- package from Matheson east to the banks are buying gold again and mint required a shaft and much higher investment. A plus of tains grades of around 1.3 g/mt, which Quebec border, it is very underexplored sales are skyrocketing – yet there has Sugar Zone is that 85% of the gold can be recovered in is higher than most of the recently ac- due to the topography of the area: huge been no increase in production.” The a gravity circuit, which does not require cyanide. We can quired projects in the region. glacial deposits of overburden with sand funds Sprott runs that are invested in produce gold for $600 instead of $1000 per ounce, so our and alluvial sitting on top. No one has gold stocks were up 40% in the first planned output of 70,000 ounces a year, will mean that Exploring in the shadow of a ever really viewed the bedrock. Now seven weeks of 2014. • the Sugar Zone Mine will be very profitable. headframe we have science to find the location of the fault and the technology to drill What kind of capital is required to move to the next While new gold districts are always through it,” said the company’s presi- stage of exploration and how receptive have the mar- exciting, exploration in these areas can dent and CEO, Duncan Middlemiss. kets been?

ONTARIO MINING 2015 - 24 - Industry Explorations Industry Explorations - 25 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports INTERVIEW

ONTARIO MINING 2015 - 24 - Industry Explorations Industry Explorations - 25 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports INTERVIEW

Michael Lalonde

President and CEO The Phoenix Gold Project is a high- larly applicable to our project because it Wabauskang First Nation in late 2012, mines. Now that we have the neces- area. East Bay is a gold project where Rubicon Minerals Corp. grade, archean lode gold deposit has sufficient width (7.8 m average) to which is without merit and which we sary financing in place to complete the we have seen some positive results. in the Red Lake area of northwest allow the use of wider machinery. In the will vigorously defend. We have all the Project to potential production, we are The Adams Lake project is located on Ontario. What similarities are present narrower areas, we intend to use small permits that we require to the startup recruiting the broader workforce that the nose of one of the second-gener- between Phoenix and its neighbours, holes, 2 ½ inches in diameter and, in of projected production. The case is will be required in the development and ation folds. We see the potential for a and what is the timeline for the wider areas, holes that are 4 ½-inches ongoing and has had no impact on the operating stages of the Project. low-grade, bulk-tonnage copper gold project? in diameter, which we believe will pro- project. deposit at Slate Bay. We also hold The Phoenix Gold Project was initially vide good economies of scale. What is your longer-term vision for a very large land position in the Long discovered in 2008. The deposit was On the corporate level, the transition Rubicon? Canyon Trend in Nevada and Utah. formed by the same series of geolog- At a time when so few companies from development to production We have a high-grade project in a pro- We will look to develop some of these ical events responsible for the depo- are able to access financing, Rubi- can be difficult for junior companies. lific, high-grade gold mining district. We projects once we can secure a steady sition of gold at Goldcorp’s Red Lake con managed to raise approximately How are you handling this transition have significantly de-risked the Project cash flow from potential gold produc- Gold Mines. There are two, major fold- C$190 million. How were you able to internally? with the substantial construction that tion at the Phoenix Gold Project, or ing structures in the Red Lake District, achieve this? We have already transitioned from an we have accomplished on site to-date. earlier if the right opportunity presents one where the Red Lake Gold Mines We have a very attractive Project in a exploration company to an operating We also have the experienced team to itself. As we look to grow our company are located, and another one 7 kilome- prolific high-grade gold mining district. company. Rubicon has put together a take it into the production stage. Rubi- beyond 2015, we will focus on improv- ters (km) to the northwest, along the We were able to negotiate a $75-mil- strong management team to construct con has several other promising explo- ing profitability. We will not grow the axis of which the Phoenix Gold Project lion gold streaming deal with Royal the Phoenix Gold Project. Our senior ration targets in the Red Lake District. company solely in terms of number of is located. Rubicon has constructed an Gold on very good terms. Having the managers have had very significant Rubicon controls over one hundred ounces produced, but rather in terms all-weather road, brought line power to backing of a major gold streaming and experience building and operating gold square miles of land in the immediate of quality of the ounces. • the site, built a tailings management fa- royalty company like Royal Gold gave cility, a 200-person camp, a new head the market much more confidence frame, and a modern hoisting plant. In in the potential upside of the Phoenix addition, we recently completed shaft Gold deposit, and in our Project and sinking at 730 meters below surface, the project team. The streaming deal and is now fully equipped and com- was well received by the markets, and missioned. The remaining underground the share price appreciated. Rubicon development is off the shaft. Two lev- was then able to successfully launch a els are substantially developed already, C$115 million bought deal on the back with three more in progress. On the of the gold stream announcement. surface site, the mill building has been completed and enclosed. All remain- How would you characterize Rubi- ing mill construction will be completed con’s relationship with the aboriginal indoors in a heated environment so groups in the Red Lake area? that it will not be impacted by the ex- Rubicon has very good relationships tremely cold winter temperatures that with the Lac Seul First Nation and are prevalent in the area. We anticipate Métis Nation groups in the Red Lake potential production by mid-2015. area. We made it a priority to involve many aboriginal-owned companies The Phoenix Gold deposit will mainly in Phoenix Gold Project’s construc- be mined using longhole stoping. tion: the company that sank the shaft What is the significance of applying is owned by two Métis brothers from this process as opposed to more Sudbury. The road construction was traditional methods? done by a Lac Seul First Nations com- Longhole stoping is very productive pany, as well as some of the tailings and much less costly than traditional management facility construction. Lac labor-intensive mining methods, such Seul First Nation also provides cater- as cut-and-fill. We expect 90% of our ing services to the project. Rubicon did potential production to come from the have a lawsuit launched against the longhole stoping method. It is particu- province of Ontario and Rubicon by the

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Michael Lalonde

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for Osisko at much lower premiums gone sour over the last few years. Again, cause cutoff grades to go up and mine going into production by 2015. Hollinger Robert Gallagher than what New Gold paid for Rainy it comes back to the orebody: make sure George Burns plans to be adjusted, Goldcorp has emis a historic mine where we will extract River. What is your reaction to these that it can be extracted profitably when braced optimization initiatives and have value from the open pit and then reclaim bids? including all the costs. You never want become a stronger company as a result. the area. The issue is how we deal with The fact that Goldcorp and now Ya- to overpay for an acquisition. When you We have a huge focus on our Operating the reclamation and safety hazards that mana-Agnico Eagle have all demon- start to build, you have to have realistic for Excellence program. At Red Lake, are a remnant of historic mining. By do- strated appetites for bulk-tonnage, gold estimates of how long it will take and we are using a “cell mining” concept ing this open pit, we create value for our deposits in the Canadian shield really val- how much money is needed. Never that divides the underground mine into shareholders and put it in a nice reclama- President and CEO idates what New Gold stepped forward assume that the way you built the last Executive Vice President and different areas with one team per cell tion when the mine is closed. The plan is New Gold Inc. and did almost a year ago at Rainy River. mine will be built the same way you ap- Chief Operating Officer who are responsible for equipment, to create a lake and a park on the former proach the subsequent project; you need Goldcorp Inc. planning, scheduling and execution. The mine site that will be a win-win for the What is your proposed timeline at the to be flexible and dynamic. If you look at key component in underground mining environment and the community. Rainy River project, especially with New Gold’s track record, we built New is the ability to develop down rapidly. another project in development at Afton on the timeline we said we would Last year we increased our development Finally, Goldcorp has managed to Blackwater? and only moderately over budget in what vertically by 50% simply by empowering weather the storm faced by your gold New Gold announced in January 2014 was probably the most capital intensive our workforce to deliver better results. peers in recent months. How does the that we would build Rainy River first and period in our industry’s history. Before We are taking that success and applying company manage to remain success- likely defer our Blackwater project until that, our teams also successfully devel- it to the entire mine using this cell mining ful and even grow amidst challenging Rainy River was up and running. Rainy oped two open pit mines, Mesquite and concept. commodity markets? River’s capital cost is under $900 million Cerro San Pedro. This is a great time to Goldcorp has a very strong culture within whereas Blackwater is closer to $1.8 be building mines. People tend to build Goldcorp recently signed agreements the company. We are transparent: our billion. While the internal rate of return mines when the commodity price is high, with the Mishkeegogamang and Lac employees have access to us, manage- is similar in both projects, Rainy River and the competition for contractors and Seul First Nations in Ontario. In light of ment gets out to mines to engage the is more manageable given the current services is tough. We are building Rainy the struggles some companies have workforce, which fits with our desire market conditions. We can finance Rainy River at a time when most people in the had in Ontario in engaging with local to avoid being overly bureaucratic. We River with our existing cash flow. industry have stopped building, so we communities, how does Goldcorp ap- remain entrepreneurial and embrace can get the best rates and people. The proach stakeholder engagement? change. One of the fundamental things Does your approach to First Nations other problem with building when the Goldcorp aspires to build a win-win part- that helped us through the softer com- New Gold’s acquisition of the Rainy consultations differ from province to market is hot is that often you will finish Ontario has historically been the heart nership with local communities where modity prices of the last few years is River project represents the company’s province? building a mine and the price of the com- of Goldcorp’s operations with Red all stakeholders can benefit from mining avoiding debt and having a strong bal- first foray into Ontario. What attracted Whether we talk about First Nations in modity falls. Once we get Rainy River up Lake but the province has fallen in the operations. Each mine is a bit different, ance sheet. We have the ability to ma- you to the project? Canada or anywhere around the world, and running, we will be better positioned Fraser Institute rankings and exploration but in the case of the Mishkeegogamang neuver and are still executing our growth Rainy River was a great acquisition for there are many similarities in what their to see the upswing in the price cycle. spending has decreased. How impor- (“Mish”) agreement, we are looking to strategy: Eleonore and Cerro Negro will New Gold, particularly with the fall in de- needs are. The key for us at New Gold tant will the province be as a jurisdiction build a power line that will benefit mining begin production in 2014 and Cochenour velopment company values in 2013. Two is to talk to them directly and as early How confident are you that the upswing in the coming years? in the north as well as these communi- by 2015. We hit all of our targets last years before we made the acquisition, as possible. Instead of just telling them is coming? Ontario represents a significant portion ties. The Mish community has power, year and are still delivering growth. • the company was valued at over three what your company plans on achiev- We are very confident that we will see of our production profile now and into the but the communities near the mine do times the final purchase price and in that ing, we want to find out their concerns an increase in gold prices in the near future. Our first big investment project is not. We recently signed our first major two-year period they had significantly and aspirations in order to build a rela- term; however, Rainy River is a low-cost at Cochenour, where we will be touch- agreement at Red Lake and are in active advanced the project. The fall in the gold tionship. I personally speak with First mine in any case. We certainly see the ing the orebody later in 2014. The shaft agreements at Porcupine in Timmins price meant that it would be very difficult Nations leaders on an individual level, advantages of building now with the is nearly complete, and we are currently with four First Nations. Goldcorp’s ap- for Rainy River to finance the construc- rather than delegating the responsibility, costs of materials and the qualities of working on connecting the shaft to the proach is simply to engage with these tion of the project, which they had es- because it is important for both of us to services, and we are putting together a orebody. We are now in a position to do communities to pursue opportunities itmated to be around $800 million. The engage as leaders. A lot of times mining great team out in Ontario. • detailed drilling to develop the mine plan. where we can help one another. The project had been on New Gold’s radar for companies will send in consultants and In Timmins, we are working on putting in three mines that we have in Ontario are a while given its excellent strategic fit. the First Nations cannot even put a face a big winze that will enable us to move old, but our Eleonore project in Quebec In addition, Rainy River’s CEO, Raymond to a name, which foregoes the chance people and material more efficiently; this is an example of where the company Threlkeld, was a director of New Gold, to develop a relationship based on trust. allows us to improve our production. In has been engaging with First Nations for and our board was very confident in his terms of jurisdictions, Ontario is still a many years despite not being in produc- ability to identify great projects. When There has been very little M&A activity great place to mine. tion. Rainy River’s market capitalization got to in the mining sector of late as compa- a price where our acquisition of it with a nies face internal cost challenges. As As a gold company, Goldcorp has not What are some of the key strategic reasonable premium to the market was one of the few low-cost gold producers been immune to the drop in gold price. objectives for Goldcorp in Ontario? very positive on a per-share basis, we did who have made an acquisition, how are What optimizations and efficiency im- Goldcorp’s focus is on delivering growth the transaction. you able to grow a successful company provements has the company made in projects. At Hoyle Pond we are finishing in a fiscally challenged environment? order to increase profitability? shaft sinking this year to get into con- New Gold acquired Rainy River in June There have been a number of acquisi- With industry-wide cost pressures in- struction shortly and are developing our 2013. In 2014, there have been offers tions and construction projects that have creasing and softer gold prices that mine plan at Cochenour with the goal of

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deposit in the province’s northwest was BK: There has been a knee-jerk reaction current 60% equity position in Northern Sun. This then requires an James Siddorn & only discovered through thorough exam- in the industry to decreases in the gold David Rigg additional C$8 million investor financing to raise C$20 million for the inations of surficial geology and glacial price. Companies should reevaluate their mine purchase. Funding for the feasibility assessed mine restart will Bob Kusins trends, combined with detailed sampling plans and pursue high-grade areas, but be a combination of up to C$35 million debt financial and a further and drilling. This sub-surface discovery not every operation has the flexibility to C$20 million equity financing. Snow Lake is offering the opportunity proves that although deposits are un- do this. of using pre-existing infrastructure to develop a great mine from a doubtedly harder to find these days, JS: It comes down to geological effi- production target of 80,000 oz/year. many more await discovery in Ontario. ciency, understanding the deposit, and JS: Vice President To locate them, we must apply our ge- minimizing dilution or waste-to-ore ra- Former* President How receptive are companies in the Timmins area to a toll milling and CEO BK: Principal Geologist ological knowledge and use geophysical tios, whether for open pit or underground agreement? Northern SRK Consulting data sets to understand the distribution operations. This puts the emphasis on They are very receptive. Most advanced engineering studies put the Sun Mining (CANADA) of structures and their control on the dis- the practical geological tools that you can cost of a new mill at C$70 to C$90 million. Using a custom mill can tribution of mineralization. By integrating apply to understand your deposit. It also mean huge savings for a company with a deposit, which cannot this knowledge with surficial geological feeds into the resource-reserve estima- support huge capital costs. Custom milling should allow many pre- mapping and geochemical data (gained tion process, as well as mining method viously uneconomic deposits to be produced. The mill is permitted through till sampling), we will be able to and ground support selection. at 1,500 mt/d but has a design capacity of 2000 mt/d. The dual cir- define exploration targets. cuits allow the mill to separately process two different ores with no How does SRK respond to the Ontario mixing. Graphite is getting quite a bit of at- Securities Commission’s (OSC) June *James Xiang is the Interim President and CEO of Northern Sun Mining Corp. tention and Ontario companies have 2013 findings that a significant number Looking at Shaw Dome and rising nickel prices, how do those advanced projects. Is there anything of technical reports had major errors? Can you give us a brief introduction to Northern Sun Min- projects figure in your plans? that distinguishes these projects? BK: SRK has taken note of the OSC’s ing and its history as Liberty Mining? Metals do no rust in the ground and we can wait until long-term BK: There is potential for finding new de- findings, which cited errors due more to Liberty Mines was developed to advance various nickel prop- nickel prices are favorable. The nice thing about Timmins is the flexi- posits in Ontario, but graphite is a mar- omissions than to deficiencies in report erties located in the Shaw Dome, about 28 km southeast of bility and variety in metals, including nickel, iron ore, gold, and silver, keting play. Ontario’s mining companies content. Every report that we deliver to Timmins. Liberty built a 1,500-metric ton per day (mt/d) mill as well as industrial minerals. We will maximize the mill system, either have to generate a market or find clients has always gone through a rigor- at the Redstone Mine and processed nickel ores from the processing one or two types of ore at the same time, and reinvest JS their niche in the existing marketplace. ous review process by multiple people McWatters and Redstone Mines from 2005 to 2012. The profits into exploration. • JS: Graphite is not mined as a bulk com- familiar with the NI 43-101 requirements. Hart nickel deposit was also brought to feasibility during this What are some of the recent develop- modity, but is sold as such, which affects Because we understand that a report can period. Financial and operating difficulties hampered Liberty ments for SRK in Ontario? its value. There have been graphite plays influence our clients’ market value, we and its assets were reorganized in 2013 and debt put into JS: SRK in Ontario provides specialized in Ontario for some time, but they have make sure that it is the most accurate a subsidiary company in coordination with a reverse split services in structural geology, integrated only recently caught the market’s atten- and thorough document possible. Our and name change to Northern Sun Mining (NSC) in order with resource geology and underground tion. clients are confident that our technical to pursue custom milling opportunities in the region. NSC and open pit mine engineering, to the reports meet the highest standards. will use profits to target gold exploration in Timmins and mining and exploration industry. Over In the Ring of Fire, some people argue JS: A large number of qualified geolo- other Canadian jurisdictions. The Redstone Custom Mill was the last two years, we have worked on that the deposit is not “world-class” gists are preparing technical reports in engineered with flexibility in mind, and has two potentially a variety of projects, including assisting enough to justify the funding require- Ontario, which results in reports of vary- independent circuits, each of 750 mt/d. major mining companies with advanced ments. Is there validity to this argument ing quality. It is important that guidelines, projects such as due diligence reviews from a geological perspective? education, and regulation by bodies such What attracts you to gold in the Timmins area? and resource estimation. Although mostly JS: Chromite as a commodity is a niche as the OSC and APGO be improved in The Southern Abitibi belt of Quebec is a prolific area for gold involved in gold and silver projects, we market. Its profitability depends on a bal- order to reduce omissions and deficien- and base metals, hosting eight major gold camps, which have also worked on uranium and nickel ance being struck between the quality cies. have now produced over 280 million ounces (oz). The Tim- in a wide range of geographical settings. and quantity of the mineralization and mins camp stands out as the largest metal producing area Mining in Ontario remains fairly active; its location. In the case of the De Beers What are the upcoming milestones for gold, and also for copper, zinc and silver. It has produced even though some major mining com- Victor Mine, which is located close to or growth opportunities for SRK in over 66 million oz. As they say, the best place to find a de- panies have restricted budgets, many the Ring of Fire, the commodity—dia- Ontario? posit is in the shadow of a head frame. The key is navigat- smaller operators and junior explorers monds—can easily be transported by JS: This year, SRK is celebrating its 40th ing the complex geology and the many types of deposits are advancing their projects. plane. With chromite and nickel, on the anniversary as a company and last year to find the next one! Northern Sun also has an option to other hand, concentrates are produced was our 35th anniversary in North Amer- purchase the Snow Lake Mine in Northern Manitoba, which Having worked on gold projects in and bulk tonnage movement is needed. ica. We have seen significant growth in has already produced over 1.4 million ounces gold. Working northwestern Ontario, what can you tell The Ring of Fire’s geographical location our Ontario offices, especially in Sud- this property for QMX gold since 2010, we have increased us about the geology of the area as it is therefore a critical factor, as well as the bury, and have maintained a balance of resources to over 1 million oz. We expect the mine can be compares to other gold districts in the quality of the deposit. local and international projects. Going brought back into production in 18 months. province? forward, we are looking at ways of lever- JS: A key difference is that there is What are some ways that operating aging our geo-environmental and water What kind of financing will you need to advance your plans hardly any rock exposure. Whereas the companies can maximize their returns management expertise from Vancouver at Snow Lake? Timmins belt in Northeastern Ontario while dealing with lower-grade de- to tackle new initiatives in Ontario. • We are looking at a combination of equity and debt financ- was fairly easy to find, the Rainy River posits? ing. Jien International Investments (JIIN) will maintain its

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ONTARIO MINING 2015 - 30 - Industry Explorations Industry Explorations - 31 - ONTARIO MINING 2015 SPECIAL SECTION Slow Burn: Ontario's Vaunted Ring of Fire

“The completion in December 2013 of a Federal/Provincial Environmental Impact Statement and Environmental Assessment Report (""EIS/EA"") for Noront's Eagle's Nest Project marks an important milestone…We intend to be the first mine in the Ring of Fire. Through our novel approach, our reduced environmental impact and by being sensitive to the needs of the First Nations, we are at the forefront of development in the Ring of Fire.”

- Alan Coutts, President and CEO, Noront Resources

Image: Noront Resources SPECIAL SECTION Slow Burn: Ontario's Vaunted Ring of Fire

- Alan Coutts, President and CEO, Noront Resources

Image: Noront Resources EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Progress Despite Setbacks in the Ring of Fire

Development of the Ring of Fire has experienced its share of setbacks re- ECONOMIC IMPACT OF RING OF FIRE DEVELOPMENT ON ONTARIO cently. In November 2013, Cliffs Natural 32 YEAR PERIOD, ASSUMES 25% LEAKAGE Resources decided to halt its Big Daddy chromite project, citing risks associated Source: Ontario Chamber of Commerce

with developing infrastructure in the fron- 1. 32 YEAR CONSERVATIVE SCENARIO 2. 32 YEAR OPTIMISTIC SCENARIO tier area of northern Ontario. Companies 3. 10 YEAR CONSERVATIVE SCENARIO DIRECT IMPACT INDIRECT AND INDUCED IMPACT TOTAL IMPACT in the mineral-rich area are dependent 4. 10 YEAR OPTIMISTIC SCENARIO

upon getting federal and provincial sup- total GDP impact in $ billion

port to fund badly needed infrastructure 30 to the region. “Obviously, having an industry participant 25 leave the region is never a positive development but we are hoping that there is a 20

silver lining and this event will underline 15 the need for more timely-decision making regarding key issues such as environ- 10 mental permitting and infrastructure,” said Alan Coutts, president and CEO of 5 Noront Resources Ltd., whose Eagle’s Nest project is the most advanced in the 1. 2. 3. 4. Ring of Fire. A number of developments in early 2014 may be the starting point to solving the dilemmas that caused Cliffs to suspend new economic activity for the province. guarantee of supply: South Africa, one of cious metals; our focus is on extending its operations. First, the province of On- For stakeholders who are invested in the the largest global producers, has power the Ring westward between the sub- tario announced the formation of the Ring region, these announcements could not issues that can affect deliverability. The provinces,” he explained. of Fire Development Corp. to assess vari- come soon enough. industry would very much like to see MacDonald Mines Exploration Ltd. is us- ous possibilities to fund infrastructure de- Neil Novak, a former executive at Noront chromite produced in Ontario, a stable ing down-hole geophysics to explore their velopment and engage with First Nations Resources, spent years exploring in the jurisdiction where we have discovered a properties, which include the Butler VMS communities affected by development in Ring of Fire before it was known as 100-year plus supply.” project. According to Richard Schler, CEO the region. The Liberal government went such. His former company, Spider Re- Richard Nemis was the CEO of Noront of MacDonald Mines, the Butler project even further, announcing a C$1 billion sources, was sold to Cliffs in 2010 after at the time of the company’s discovery has a similar mineralization to Glencore investment to fund a transportation so- he uncovered mineralization that looked and gave the region its name as a trib- Xstrata’s world-class Kidd Creek base lution. to be chromite. “Even though there is a ute to his favorite singer, Johnny Cash. metals mine in Timmins. “We got Dr. Furthermore, the Matawa First Nations lot of chromite found around the world, His new company, Bold Ventures Inc., is Jim Franklin, a respected geoscientist, signed a framework deal in March 2014 we need geographical diversification of exploring at a number of sites in the Ring to take a look at it and he feels like the with the provincial government that al- chromite mines,” said Michael White, of Fire, most notably the Black Horse geology lends itself to a Kidd Creek-type lows the two sides to move forward in president and CEO of IBK Capital, that chromite deposit in conjunction with of deposit. We have gotten some good a community-based approach to resource has raised more than $140 million for KWG Resources Inc. Although he was a copper grades in the feeder zone, and we development in the region. companies active in the Ring of Fire. “At key player in the initial Noront discovery, hope the grade will improve. The size of These steps are critical to moving the moment, chromite production is con- Bold Ventures is more interested in what the heat engine to produce this alteration projects forward in the Ring of Fire, centrated in a few global clusters, and else there is to find in the Ring of Fire. zone is big, so the potential in this could which potentially represents $25 billion in some are not doing so well in terms of “We are more interested in base or pre- be anywhere from 50-100 million mt.”

Image: Hatch ONTARIO MINING 2015 - 34 - Industry Explorations Industry Explorations - 35 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Progress Despite Setbacks in the Ring of Fire

upon getting federal and provincial sup- total GDP impact in $ billion

port to fund badly needed infrastructure 30 to the region. “Obviously, having an industry participant 25 leave the region is never a positive development but we are hoping that there is a 20

Image: Hatch ONTARIO MINING 2015 - 34 - Industry Explorations Industry Explorations - 35 - ONTARIO MINING 2015 EDITORIAL Global Business Reports

Solving the Infrastructure Puzzle

The debate surrounding infrastructure development in the region is currently centered upon transportation solutions to access the area. However, there is the additional challenge of building once you get there: the Ring of Fire is essentially marshland, which means that traditional methods of building mines on solid ground would not work. Global engineering firm Hatch sees the Ring of Fire as one of the most exciting areas of opportunity for the company in Ontario. “There are many challenges presented by the geography, lack of infrastructure and social licensing which require new ways of thinking, and that makes it so exciting,” explained Jan Kwak, Hatch’s managing director of mining and minerals processing. “For instance, a construction strategy would probably require starting in the winter when the ground is frozen and it is easier to transport materials to the site. During the winter, we would need to create an island of solid ground where we can set up camp, store material and equipment and use as a base to expand from when the ground thaws in summer.” Complicating matters, many people in Ontario and across Canada wonder if the value of the chromite in the ground is enough to justify the level of infra-

Image: SRK Consulting structure spending in the region. According to James Siddorn, vice president at SRK Consulting (Canada), logistics and location are decisive factors for any project in Canada’s North. “When producing chromite and nickel, bulk tonnage movement is needed. There- fore, Ring of Fire’s geographical location, as well as the quality of the deposit are critical issues,” he said. Sudbury-based XPS Consulting and Testwork Ser- vices, a Glencore company, worked with KWG Re- sources on their Black Horse deposit to convert the chromite into a metalized chrome and iron alloy. “Pro- cessing facilities have used the conventional route, which is an electric-furnace approach where the raw ore is smelted at 1,700 °C with a high energy input of 60 to 80 MW of power,” said Dominic Fragomeni, director at XPS Consulting & Testwork Services. “In our work with KWG we were asked to think outside the box and consider alternatives to a conventional ferrochrome smelter, which is what drove us to look at direct reduction technologies. This technology is not new, however we have added a twist to take advantage of the lower cost natural gas available in Ontario. We are currently developing technologies to increase the rate of reaction and reduce the temperature of the direct reduction process, as well as considering downstream processing options.” Whether or not it is a road that runs east to west, as favored by Noront, or a railway, which KWG Re- sources advocates, infrastructure development in the Ring of Fire is critical to the success of these projects and the province of Ontario as a whole. •

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Solving the Infrastructure Puzzle

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Many newer mines in Ontario are bulk or federal government was able to fund running an effective and efficient drill program consisting of at Jan Kwak tonnage with lower-grade deposits. the construction of a road, it would re- Richard Schler least 20 to 25 holes would cost about $3 to $4 million. What sort of engineering challenges do duce the required capital for existing these types of projects present? projects and make other projects in the MacDonald Mines has historically been vocal about the strug- High-tonnage, low-grade, remote de- region much more attractive. Hatch has gles that the junior mining companies face. Why is this important posits put more pressure on companies done some internal analysis on each to the company? to find cheaper ways to build infrastruc- of the projects in the Ring of Fire and As an industry, we tend to get lax in good times and not maximize ture. These types of projects can be found that at least one third of them our exploration dollars. We have to work harder at being explor- Managing Director, economic if they can take advantage would be economic if a road and electri- CEO ers as opposed to chasing a story, and look for opportunities that Mining and Mineral Processing of common infrastructure like roads cal grid connection were in place. MacDonald have both the potential grade and size to be economic. We also Hatch and power. The next step is to devise Mines have to learn to walk away from properties that have little chance a smarter mining plan using more inno- There have been a number of projects of being economic. There are other ways to help juniors, such as vative methods. It comes down to the recently that have experienced cost improving tax incentives for investors who put money into high- machinery and the degree of automa- overruns and construction delays. How risk opportunities. The government also needs to take steps to tion present. Continuous mining ma- can expectations be aligned with the streamline the permitting process. chines are important, as is the ability to realities of building projects? do more processing in the pit or under- Mining companies are looking for more Where would you like to see MacDonald Mines in the future? ground to avoid moving so much rock predictability, and large divergences MacDonald Mines has excellent properties in the Ring of Fire and to the surface. There are even possibili- from original plans for cost and sched- its team of geo–scientists and consultants is some of the best ties for underground leaching or mineral ule are not acceptable. We provide in the world at sorting out VMS type deposits. MacDonald will processing. When working with the low more surety and predictability by plac- Can you give us a brief introduction to MacDonald Mine push ahead to raise exploration funds to begin drilling. We are grades, more innovative methods are ing more effort into project planning and the Butler property? working with the MNDM to resolve permitting issues and satisfy needed to extract extra value. and scoping to make sure that we Since 2003, MacDonald Mines has drilled in excess of our consultation obligations with identified First Nations. The But- understand precisely what we want 150 holes on the Butler property. We thought that we ler property has huge potential, and our drilling program will give What opportunities are presented by to build and how we will build it. On a had figured out the geology but Mother Nature decided to us enough information either to confirm our optimism or lead us development in the Ring of Fire, seeing project level, we look at the factors that throw a few more curve balls at us, so we contacted Dr. towards the next phase of discovery. • as the area is essentially greenfield? influence payback: capital costs, operat- Jim Franklin, a respected geoscientist to review our data The Ring of Fire is one of the most ex- ing costs, time to first production and and asserted that the geology lends itself to a Kidd Creek- Can you give us a brief introduction citing areas of opportunity, as there is ramp up. We focus on guaranteeing the type deposit. We have seen some good copper grades in to Hatch’s role within Ontario’s mining huge upside potential. There are many fastest path to full production, such as the feeder zones, and the grade will likely improve as we industry? challenges presented by the geography, excellent engineering, world-class tech- move towards the volcanogenic massive sulfide (VMS) The mining and mineral processing lack of infrastructure and a required so- nology, high quality construction and source. The size of the VMS alteration systems is larger group at Hatch is a global business unit. cial license to operate, which require a fast ramp up, all of which also drive than can be explained by the sulphides discovered to date. Many of our clients earn revenues from new and exciting ways of thinking. For down operating costs. The geological data indicates there is the potential for a selling ores and concentrates, so we un- instance, a construction strategy would much larger VMS deposit than has been identified to-date derstand that end of the business well, probably require starting in the win- Where would you like to see Hatch so the ”blue-sky” mineralization in this area could be any- from mining to logistics to marketing, in ter when the ground is frozen and it is positioned in the mining industry? where from 50 to 100 million metric tons (mt); in com- addition to the technical and project de- easier to transport materials to the site. Hatch is committed to projects in the parison, Kidd Creek is around 150 million mt. Geological livery expertise that is the cornerstone During the winter, we would need to Ring of Fire and is involved with every formations and identified mineral elements at the Butler of our company. create an island of solid ground where stakeholder group to generate ideas 3 Target are similar to those seen in the geology at the In Ontario, gold, nickel and base metal we can set up camp, store material and on how to help these projects. Outside Flin-Flon VMS deposits in Manitoba. The Butler 3 Target mines are the primary drivers of our equipment and use as a base to expand of the Ring of Fire, we look to provide alteration also has tin ("Sn") enhancements similar to Kidd business, but we work with many of from when the ground thaws in sum- leadership in underground mining in Creek pointing to a very large hot VMS system which is the Toronto-based mining clients who mer. There is a possibility to dig into Ontario, and specifically at the forefront certainly capable of forming such a deposit. have projects around the world. Since the ore body and use the overburden or of the technology required for safe and the downturn, we have done less major waste rock, but even this has its chal- efficient underground mining. Hatch How are you defining your 2014 drill program? project work and more operational im- lenges. There has never been a project will continue to work closely with First MacDonald has certainly had “technical” drilling success provement work. For example, Hatch quite like this attempted anywhere in Nations: we currently sponsor scholar- at Butler 3 and 4 in that it has intersected mineralization, has worked extensively on optimizing the world. ships at Lakehead University and Lau- but it is still in the feeder zones. It is quite difficult to as- Chilean copper mines where we have rier University to encourage more First sess the geology in the Ring of Fire because there is very been able to find zero-capital ways to The biggest barrier to development in Nations students to graduate from min- little outcrop and the James Bay Lowlands topography, improve throughput and reduce operat- the Ring of Fire is the lack of infra- ing programs. • so the targeting must be done utilizing geo-physical tech- ing costs by incorporating small yet sig- structure. Is it economically feasible to niques, which is expensive. Therefore, we are moving nificant changes in process. In Ontario, advance projects at this point? ahead carefully to maximize the information gained from Hatch continues to cover the major The capital necessary for projects in the each drill hole. Raising exploration dollars in the present mining companies in Sudbury, Thunder Ring of Fire for infrastructure is greater environment is challenging, especially if the share price Bay, and Northern Ontario, and globally than that required for mining equipment is less than $0.05, which is the minimum financing strike through our headquarters in Toronto. and processing plants. If the provincial price allowed under current TSX-V rules. For reference,

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for which we published a NI 43-101 in Sep- development opportunities for the First drilling. In the past, exploration com- structure funding is a positive sign? Alan Coutts tember 2012. We are looking at a mine Nations as well; it cannot be an exclusive Richard Nemis panies were doing a lot of costly pre- This ROF discovery is so important for life of 11 years at roughly 1 million metric resource-road that takes simply takes drilling work like trenching, sampling the province and country that it has to tons (mt) per year of throughput, which minerals to market. and line cutting. Through our partner- be developed. It is world-class but must would consequently produce 150,000 ship with Geotech, we stake only after be developed correctly, as it will be here mt per annum of high-grade nickel-plat- The year 2013 brought forth several flying the geophysics survey. for generations. For that reason, some- inum concentrate. We have proven and governmental initiatives for the ROF, one has to step up to the trough and probable reserves of 11 million mt but re- among which the appointment of Frank Bold Ventures has optioned the Black fund getting into the area. President and CEO sources below 1,000 meters would add Iacobucci as lead negotiator on behalf of President and CEO Horse project to KWG Resources from Noront Resources another 10 years of mine life at the same the Ontario government in discussions Bold Ventures Inc. the Quebec-based company Fancamp It has been questioned whether the rate. Overall, our operation will have a with the Matawa Tribe Council, and Exploration. What is the strategy nickel project’s value can justify a total mine life of somewhere between the creation of the ROF’s Development behind this plan and what are the next $3-billion to $5-billion infrastructure in- 11 and 20 years. In terms of economic Corporation. How do you assess these steps? vestment. Do you think this skepticism feasibility, typically, developments in re- developments? We optioned Black Horse from Fan- is justified? mote areas deal with gold and diamonds, We have seen progress since this new camp because we saw the project had a Time will tell how people will view which do not require heavy infrastructure negotiation framework was imple- lot of potential due to its proximity to the this high expenditure. The deposits in to be transported out of the mine site. mented, but, as always, we would like nickel-copper discovery of Noront and the ROF can provide the world with Eagle’s Nest is different. Its main advan- to see it happen more quickly. Nonethe- the Cliffs Natural Resources’ chromite chromite, without which we could not tages are its high-grade reserve and the less, there are nine communities spread deposits.. Bold took on the property produce stainless steel. The ore body of fact that it will have by-products. This across a wide region with distinct ideas with the right to earn up to 100%; how- Noront, which is very big and rich, will mine will produce within the first quartile on how things should progress. The best ever we are not overly interested in pay for a good portion of what has to of global nickel operations. solution is to have communities speak chromite, so we took the property to be spent up there. Over a short period with one unified voice: this will acceler- KWG. We concluded a deal with KWG of time we have found seven or eight How was Eagle’s Nest designed in a ate the negotiations and hopefully, there where they could earn up to 80% on the VMS deposits with copper-zinc poten- way to limit its environmental impact? will be a good distribution of the benefits project and we would retain a 20% in- tial. These small but rich deposits indi- We have designed an underground mine among them. The concept behind the terest in any of the chromite found. For cate there will be another blockbuster that has a small surface footprint. We will Development Corporation is good but it any other metal found on the property, deposit. The ROF is developing into a also recycle virtually all of the water so is unclear who is going to be represented this 80-20 split would be reversed. The mining camp for not only chromite, but What has changed for Noront Re- the only discharge will come from camp and how decisions will be made. Devel- You have been involved with the Ring agreement calls for expenditures up to also nickel, copper, platinum and zinc. sources since Cliffs Natural Resources’ activities. Our processing water will leave opment corporations have managed as- of Fire (ROF) since the very beginning, $8 million by KWG to earn its interest in announcement that it will suspend its the project in the form of concentrate or sets before, but this group has also been when you founded Noront Resources the project from Bold. It is ongoing and What can we expect to see from Bold Black Thor chromite project in the Ring will go down the hole as moisture for our tasked with the design of the infrastruc- and made the area’s first major nickel KWG is working on developing what is Ventures over the next year? of Fire (ROF)? paste. Most operations have a tailings ture plan, which is a more complex role. and chromite discoveries. Can you looking to be the biggest ore body in the Bold Ventures is planning to undertake From Noront Resources’ perspective, not pond on the surface but all of our tail- introduce us to the work that you are ROF area. It is a deeper deposit than significant drill programs in the ROF in much has changed since Cliffs Natural ings will go underground due to the extra What are the dynamics of nickel? doing today with Bold Ventures in the those of Cliffs, and potentially richer. 2014. We have Dundee Capital as a Resources’ announcement. Our Eagle’s volume of our underground aggregate Demand for nickel in the following years ROF? Depending on Noront, there could be a partner on some of our projects, which Nest project is fundamentally different producing quarry. These aspects have will stay at a CAGR of 4% to 5% but the Bold Ventures is a team of explorers. lot of synergies. we plan to expand on. They like our ap- from what Cliffs had envisaged for their helped Eagle’s Nest attract permitting problem is oversupply. Market discipline Our focus is to develop and outline proach to exploring areas that are hard open-pit, bulk-transportation model Black very quickly. is lacking, and there have not been as ore bodies and pass them on to min- Bold is interested in the Black Horse to develop. With Black Horse, we intend Thor Project: Noront is focusing on a many closures as we would have ex- ing companies. When we put together project only on the nickel-copper side. to proceed further for either a summer high-grade nickel-copper-platinum group Infrastructure development is key for the pected. If the price goes down to $6 per Bold Ventures, we brought over key tal- Does that focus go for most of your or winter program. Keep your eye on underground mine – from a logistics ROF. What are the advantages of the pound, the supply side of the market will ent from Noront to continue exploration properties in Northern Ontario? the Ring of Fire. It is a big, developing point of view, this means small volumes East-West corridor? be affected. There will likely be a deficit in the ROF. We are firmly convinced We are not interested in chromite, al- story that has a lot of depth to it and will of high-grade concentrate. Consequently, The North-South corridor is, without a starting in 2017, at which time we will be that this area is going to be one of the though we did make the original discov- be exciting for years to come. • our project economics and infrastructure doubt, the quickest way to markets but running at full capacity at Eagle’s Nest. biggest developments in mining in the ery in the area. We are more interested needs are completely different than those does not tie in a lot of the local commu- Again however, we have the tremendous coming years. We have many claims, in base or precious metals. Our focus of Cliffs. Furthermore, during our permit- nities to all season roads. Additionally, advantage of being shielded by our plat- have identified numerous drilling tar- is on extending the ROF westward by ting process, we developed our environ- it has three major river crosses that are inum/palladium by-products, which are gets, and continue to acquire ground. using geophysics, as there is very little mental assessment not only for the mine costly and somewhat sensitive from an independent of nickel dynamics. • Currently Bold is going to the market to outcrop in the area. We are getting a site itself, but also for our transportation environmental and First Nations’ point raise more funds for drilling. The chal- better handle on the area’s geology and corridor and we continue to believe that of view. The East-West corridor, on the lenge with the area is that it is remote developing relationships with the First an East-West route is more appropriate other hand, comes off an existing winter and has no infrastructure. The cost of Nations communities as we advance for our needs at this time. road infrastructure, north of Pickle Lake, drilling is $800/month to $1000/month, our projects. and ties in more communities. It does not making it very expensive to do pure ex- What is Noront Resources’ current focus have any river crossing so it is cheaper ploration work. Bold has a very unique Funding is another hurdle for ROF in the ROF? and more environmentally friendly. The philosophy that takes geophysics to its projects, given the area’s lack of infra- Noront Resources’ focus at the moment secret with the infrastructure situation is extreme. We fly an area and then take structure. Do you think the province’s is on advancing its Eagle’s Nest project, to meet the needs of many and provide a geophysical target and go directly to $1-billion commitment towards infra-

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“We can not rely on China for a long-term, high-quality supply of graphite. Therefore, savvy downstream companies are looking into other jurisdictions to secure, and Canada is an excellent choice to fill the supply gap. On demand side, we are seeing excellent indicators for growth. The demand for lithium ion batteries will be taking off with the expansion of electric vehicles. Another application is energy storage like fuel cells for solar and wind energy, which is receiving a lot of attention on the research and development side. Storage batteries cannot be made without graphite. Moreover, graphite can be used in nuclear reactors.”

- Aubrey Eveleigh, President and CEO, Zenyatta Ventures Ltd.

Image: Ontario Graphite Best of the Rest: Ontario's Other Minerals

- Aubrey Eveleigh, President and CEO, Zenyatta Ventures Ltd.

Image: Ontario Graphite EDITORIAL Global Business Reports Global Business Reports EDITORIAL

ONTARIO'S EXPLORATION AND DEPOSIT Unlocking Value APPRAISAL EXPENDITURES BY COMMODITY in Ontario’s Source: Natural Resources Canada 2013 2014 $ Diverse millions 600

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Ontario’s gold sector and the potential Base Precious Iron Uranium Diamond Other, TOTAL metals metals coal, in the Ring of Fire, it is the overlooked nonmetals commodities in the province that hold the promise of high returns for investors. ket. A number of interesting geopolitical developments mining of Ontario Graphite. The Sudbury Basin hosts some of the have caused nickel prices to rise in 2014, such as Rus- Junior company Zenyatta Ventures was the top-performing min- most prolific nickel deposits in the sia’s political action in Ukraine and Indonesia’s ban on ing company on the TSX Venture Exchange in 2012 and 2013 world. Vale’s Creighton mine has been unprocessed ore. Last year’s worst performer on the after discovering the Albany deposit in northern Ontario. The in operation since 1901; while Glen- London Metal Exchange might be poised to enter a bull Albany project is a unique hydrothermal style deposit, currently core Xstrata’s Nickel Rim South mine market in 2014. one of the only vein-type graphite deposits in the world – one is currently Sudbury’s largest mining It is an exciting time for Ontario’s nickel industry, with of the most valuable forms of graphite. “We have an extremely operation. In February of 2014, Vale KGHM International also advancing work on their Victo- opened the long-awaited Totten mine, ria nickel project near Sudbury, and Noront Resources the company’s first new mine in the is just beginning to uncover new areas of nickel miner- Sudbury Basin in more than 40 years. alization in the Ring of Fire. There could be a potentially Totten was a former producing mine new nickel belt opening up in Ontario in the future. that laid dormant for decades until Vale spent $760 million to make Tot- The Great Graphite Race ten a fully state-of-the-art, automated mine. As the mine ramps up to full pro- Graphite is experiencing resurgence in the global mar- duction in 2016, it will add eventually ketplace as demand is expected to increase: Tesla, 2,200 metric tons (mt) per day of ore the high-end electric vehicle manufacturer, announced containing copper, nickel and precious plans to build a factory in North America that could re- metals to Vale’s production profile for quire up to 126,000 mt per year (mt/y) of flake graphite. 20 years. In Ontario, three companies are swiftly advancing Although Vale and Glencore Xstrata graphite projects in order to meet rising global demand. dominate nickel production in On- The most advanced project is Ontario Graphite Ltd.’s tario, there is room for smaller players. Kearney mine, a former graphite producer currently on Toronto-based First Nickel Inc. owns track to restart production in early 2015. “At its peak and operates the Lockerby nickel mine the Kearney mine was producing around 10,000 mt/y, in Sudbury. Like Totten, Lockerby was but shut down when the price of graphite dropped sig- a 30-year-old mine when First Nickel nificantly,” said Tom Burkett, CEO and member of the acquired the project in 2005. “It is board of directors of Ontario Graphite. The company one of the deeper mines in Sudbury at has invested about $50 million to bring the mine to a mile underground and has some of the point of production. Kearney has a very high qual- the higher-grade material in the region, ity of coarse flake graphite, whereas the other Ontario which makes it feasible to mine it at graphite plays are of a finer quality. “We also have the such depths,” said Thomas Boehlert, advantage of understanding the previous challenges president and CEO of First Nickel. faced by our predecessors. For example, we are de- In 2014, First Nickel plans to increase veloping an aggregate market to deal with non-graphite output by roughly 10% to 15%. This bearing rock we have at the mine with a view towards production increase comes at a good environmental sustainability and efficiency,” said Jerry time for nickel prices in the global mar- Janik, vice president of operations and general manager

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ONTARIO'S EXPLORATION AND DEPOSIT Unlocking Value APPRAISAL EXPENDITURES BY COMMODITY in Ontario’s Source: Natural Resources Canada 2013 2014 $ Diverse millions 600

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pany and doing contract work for many In August 2010 Cliffs Natural Re- Neil Novak junior companies, one of which was sources acquired Spider Resources, Condor Diamonds. After survey work, and I stayed on as president until the it was apparent after that its kimberlite/ end of that year. There was a legacy diamond anomaly was conductive and project at Spider that I was interested likely not a kimberlite but resembled in, which was the Gremlin project just the nearby massive sulphide of Spider north of the Ring of Fire. Through a pri- and KWG at McFaulds Lake. I was also vate company called Black Widow Re- President and CEO on the Board of Directors of Noront and sources (a more aggressive arachnid), Black Widow convinced Dick Nemis at Noront, who I acquired Spider’s (now Cliffs) interest Resources Inc. held property contiguous to the Condor in Gremlin project in exchange for eq- claim, to drill two holes in August 2007, uity in Black Widow, by issuing shares which became the Eagle’s Nest discov- to Cliffs. Now, most of my attention is ery. on the Shunsby project, a VMS-deposit in the Porcupine Mining District of On- At what point did you realize its signif- tario. Historically it was looked at for its icance? iron potential then eventually copper I knew as soon as I saw it: the first inter- potential: exploration work in the feeder section was cumulate net textured sul- zones returned results of 6% copper phides with large crystals of pentlandite over 10 m, but there were only little (an ore mineral of nickel) surrounded by (25,000 to 50,000 mt) pods of mineral- chalcopyrite (an ore mineral of copper). ization that seemed to have limited size We only had a couple m of net textured potential for a large company. We com- mineralization in the first hole so we did piled the historical data and realized that an undercut hole at 60 degrees that in- it was more of a zinc play. We are now tersected about 8 m of very similar rock putting together a small drilling program with bigger crystals, so we concluded to twin some of the holes and hopefully Image: First Nickel we were in for a big system. After the reproduce some earlier results. Other high-purity and high crystalline volcanic that graphite is a strategic mineral, we the Porcupine mining district of On- Prior to Black Widow Resources, you discovery in August 2007, I become companies in the vicinity are showing graphite deposit with low contami- have seen a significant number of in- tario. The property was historically helped make the Eagle’s Nest discov- vice president of exploration, and we exciting results, attesting to the validity nants as opposed to sedimentary flake vestors taking time to get to know the considered an iron or copper play, but ery that opened up the Ring of Fire. continued exploring for other Eagle like of this area as a zinc-rich VMS area. type graphite deposits,” explained graphite space,” he said. exploration work uncovered interest- Can you give us a bit of background to deposits. We drilled through a nearby Aubrey Eveleigh, CEO, president and ing zinc mineralization. “Black Widow that discovery? massive sulphide zone (Eagle 2) and What is your vision for the future of secretary of Zenyatta Ventures. More to Find compiled all of the historical data on Spider Resources had discovered the continued through to the surrounding Black Widow Resources? The ability to value-add is critical to the the property and soon realized it was original base metals discoveries at Mc- rock to get a better feel for the geol- One of the reasons for creating Black price of graphite in the marketplace. In 2008, De Beers Canada Inc. opened more of a zinc play, in that most of the Faulds Lake in a joint venture (JV) with ogy and encountered several tens of Widow was to be a consolidator of Northern Graphite Corp., whose large- the province’s first diamond mine, the 214 historical drill holes reported im- KWG Resources and DeBeers Canada. meters of massive chromite. Spider projects in the Ring of Fire area, and flake Bissett Creek project in Ontario Victor mine in the James Bay Low- pressive zinc mineralization,” said Neil In 2002, one of the JV drill holes re- along with KWG continued to explore in my dream is to go back into the Ring contains an overall resource of more lands, which highlighted the diversity Novak, president and CEO of Black turned results of eight meters (m) of joint venture with Freewest Resources. of Fire and find more viable mineral de- than 93 million mt of graphite, is of commodities to be found in Ontario. Widow. 4% copper and about 7% zinc but De- The discovery of massive chromite posits. There are so many areas that working on a purification technology The province also holds significant There is also a large potential to find Beers was not interested in base met- that Noront had encountered gave our are unexplored, and some really neat that yields over 99.9% purity levels. copper deposits outside of Timmins, new sources of platinum group metals als and withdrew. Spider arranged the JV encouragement to look once again anomalies. Once the infrastructure is “Our research was designed using a Ontario, where Glencore Xstrata oper- (PGM) in Ontario. Current PGM produc- staking of 25 square miles around the at the two layers of chromite that we in place, Black Widow will be poised to low-temperature thermal approach, ates the Kidd Creek copper zinc mine. tion is limited to KGHM’s McCreedy discovery and Noront, Freewest, Mac- had found in 2006. This delineated explore projects in the region. The Ring where we performed scaling testing The company recently announced that West mine in Sudbury, but that is set Donald Mines, Fancamp Exploration what became known as the Big Daddy of Fire is world-class. Being one of the in conjunction with a metallurgical it would extend operations at Kidd to change in 2014. Wallbridge Mining and Probe Mines staked claims as well. Chromite Deposit, which extends north founders, I look forward to being invited company to prove that it is scalable,” Creek into 2021. In addition to dia- Co. Ltd. is constructing its Broken Exploration commenced in 2003 and into the Freewest 100%-owned prop- to the first mine opening there. It is a said Gregory Bowes, CEO of Northern monds and copper, there is ongoing Hammer open pit project in Sudbury continued for several years. Spider was erty, where Freewest found Black Thor multi-generational project that will ben- Graphite.” exploration around the Red Lake min- that contains a significant amount of looking for massive sulphides and iden- and Black Label. Collectively, the three efit all of Northern Ontarians as well as According to Ellerton Castor, CFO of ing district of northwestern Ontario for highly valuable PGM resources. Transi- tified ten different occurrences, others deposits were in the order of 80 million the area’s First Nations. • Ontario Graphite, there is a degree of iron ore, where past-producing mines tion Metals Corp., a junior project gen- were not lucky and interest faded. In metric tons (mt) in various resource cat- opaqueness surrounding how graphite hold promise for junior companies. The erator in Sudbury, recently discovered early 2006, we drilled one of the anom- egories and attracted Cleveland-based is priced and the value-added nature province also produces industrial min- an exciting new area of PGMs through alies (in a JV with Freewest and KWG) Cliffs Natural Resources. of the mineral is critical to understand- erals such as salt, gypsum, talc and its partnership with Impala Platinum. and hit two chromite layers of about 1.5 ing the commodity. “There is a learn- calcium carbonate. Located 25 km from Thunder Bay in m thick. At the time, very few Cana- How are you leveraging your expe- ing curve associated with graphite, Black Widow Resources Inc. recently northwestern Ontario, Sunday Lake dian geologists knew anything about rience with Spider Resources and but given the declaration by both the hit zinc mineralization in its exploration represents an emerging new PGM dis- chromite. Concurrently, Norm Brewster Noront into your current work at Black United States and the European Union campaign on the Shunsby project in trict in the province. • and I were running a consulting com- Widow?

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output by roughly 10% to 15%. Our what opportunities do these dynamics TB: We are working on a low cost purification technology that will Thomas Boehlert success last year came from using all create for First Nickel and its peers in Tom Burkett, allow us to produce a high-quality product. We have also devel- of the options at our disposal. As prices Ontario? oped a micronization technology that will allow us to produce finer fell throughout the year, we hit our pro- Depending on how long this continues Ellerton Castor & crystalized graphite for battery applications in the LED industry. duction numbers significantly beat our and how comfortable people become cost guidance. We also renegotiated with the fact that there is a supply Jerry Janik How confident can investors be that graphite is not the same our offtake agreement with Glencore, component that needs to be filled, this story as rare earths a few years ago? which gave them more flexibility in how opens up many opportunities in Sud- TB: There are many emerging applications for graphite. LED light President and CEO and when they process our ore and bury. First Nickel has the potential to TB: CEO bulbs will soon become standard, and the only way they can First Nickel Inc. gave First Nickel more visibility into the make Lockerby larger and extend its EC: CFO & Chief Administrative Officer work is with a thermal heat sink that uses graphite. People carry JJ: General Manager graphite around every day in their smart phones. Graphite may be timing of cash receipts from Glencore, mine life, while also getting involved in Ontario Graphite while also increasing our proceeds. new opportunities. We see an oppor- an old material, but it is new to many of today’s applications. tunity to develop assets that would be EC: Ironically, the rare earths crash is helpful because it has demon- In contrast to last year, 2014 has non-core for majors, supplying incre- strated to customers the risks of relying on Chinese-sourced mate- generated more optimism in the nickel mental feedstock for their mills. rial. We are in the unique position of having clients eagerly await- market. How do you plan to turn higher ing a non-Chinese source of graphite. nickel prices into growth for not only The industry is attracting increasing the Lockerby mine, but also for your interest from private equity funds, but Have you encountered misunderstanding of graphite, which is exploration projects? few companies have benefited from TB EC JJ often not well understood, in your fundraising efforts? Higher nickel prices and controlling such investments thus far. How has EC: Graphite is a non-traded industrial mineral, so there is not the costs generate cash flow with which First Nickel, which has Resource Cap- The Kearney graphite mine is a past producer in Ontario. same level of understanding as with gold or copper. There is some we can invest in the mine life and in- ital Funds as a 33% shareholder of the How close is the mine to production? opaqueness about how graphite is priced and the value-added na- crease the value of the operation. We company, benefited from this long-term TB: The Kearney mine was previously in operation from ture of the mineral. However, after the declaration by both the are looking at developing several zones strategic investor to your portfolio? 1990 to 1994. At its peak it was producing around 10,000 United States and the European Union that graphite is a strategic at the Lockerby mine and going deeper. Resource Capital Funds (RCF) is differ- metric tons per year (mt/y), but shut down when the price mineral, many investors have learned about graphite and are now Our other development projects are on ent from other private equity firms in of graphite dropped significantly. It was on care and main- quite informed after its uses and pricing. • hold until we see how the market de- that it has long-term experience in the tenance until 2005, when Ontario Graphite’s current in- velops, while on the acquisition side we mining industry and has made good re- vestors took over. Since then, the company has invested First Nickel is Canada’s only publicly are whittling down a small group of po- turns for shareholders in up and down about $50 million to bring the mine to a point where we are listed, nickel-producing junior com- tential targets. Although the meltdown markets, which has enabled them to poised to restart production. The final step is to raise an- pany. Having taken over the CEO role in the junior space has made it possible continue to raise additional funds. Many other $36 million. Once we raise the capital, production will in September 2011, what was your to buy assets very cheaply, as it turns private equity firms see potential oppor- begin in eight months. Ontario Graphite is going through a mandate and what milestones have out there are not many quality opportu- tunity in the next cycle in metal prices; reverse takeover process in order to list the company on you achieved? nities available. however, the general private equity the TSX-V by Q3 2014. We have all of the regulatory per- Our mandate at First Nickel was to put model does not work for mining be- mits in place already. The market is excited to have another the Lockerby mine back into production What type of project profiles is First cause metal price volatility can easily graphite mine in production and we are the closest of our from care and maintenance and to grow Nickel considering for acquisitions? outstrip any operating efficiencies that competitors to reaching this milestone. the company through additional acqui- The size of transaction that we are are put in place. Also, the mining busi- sitions in the base metal space in the focused on is in the $50-million to ness does not lend itself to high levels With a few different graphite projects advancing in On- Americas. Having an operating mine is $250-million range, which for a com- of debt, which the private equity model tario, what is unique about Kearney? key to our second objective of acquir- pany with a $30 million market cap generally relies on. JJ: Kearney has a high quality of coarse flake graphite, ing additional assets. Lockerby demon- would be a sizeable step. First Nickel’s whereas the other Ontario graphite plays are of a finer strates to the market and our investors objective is to become a mid-tier mining What is your vision for First Nickel in quality. The new 43-101 resource indicates that we will that First Nickel can build and run a company, with somewhere in the range the coming three to four years? have a mine life of 100 years, but the deposit is still not mine, which is fairly rare in the junior of 100 million pounds of copper equiv- First Nickel will be well positioned to fully defined. We also have the advantage of understand- space. alent produced annually and 2.5 billion take advantage of the next cycle in ing the previous challenges faced by our predecessors. pounds of resource in the ground. Ide- metal prices with multiple operations For example, we are developing an aggregate market to Sudbury, where Lockerby is located, ally we are looking for operating assets in various metals in the Americas. The deal with the non-graphite bearing rock that we have at the The Kearney Mine: is host to world-class nickel deposits. and relatively late-stage projects. While crash in the junior sector and the disci- mine with a view towards environmental sustainability and One of the largest confirmed Where does Lockerby fit in among the a lot of what we look at is in Canada, pline imposed on the mid-tiers and ma- efficiency. We are also recycling 85 per cent of the water mineral resource graphite mines in the area? we are also considering projects in the jors will exacerbate the next cycle, so used in the milling stage, reducing the need for water from Lockerby was a 30-year-old mine when United States as well as mining jurisdic- we are getting positioned ahead of the surrounding lakes. projects in North America First Nickel took it over. It is one of the tions in South America, such as Peru, market with a mid-tier portfolio. • EC: Ontario Graphite is $36 million away from being in deeper mines in Sudbury at a mile un- Chile and Brazil. production. Every other publicly traded graphite play as of derground and has some of the high- May 2014 must raise anywhere from $100 million to $160 www.ontariographite.com er-grade material in the region, which Considering the geopolitical risks million. makes it feasible to mine at such depth. affecting the nickel market, such as 705.636.5344 In 2014, First Nickel plans to increase Indonesia’s ban on nickel exports, What is Ontario Graphite’s plan to add value at Kearney?

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ufacturers. Also, it appears that batter- meaning that we still have a good mar- constraints for platinum going forward Why are we not seeing more project Gregory Bowes ies made using our flakes have bigger gin even at the bottom of the market. Scott McLean and demand should increase, which will generators? capacity, and are easier to purify. We only improve platinum pricing and by ex- Project generators are dealing with ear- expect this to be our greatest competi- Given that graphite is relatively tension the value of platinum projects. ly-stage exploration that comes in and tive advantage. unknown among Toronto’s financial Having an alliance partner in Impala was out of favor with investors. In a soft community, what level of enthusiasm key in keeping the project moving at market like today, larger companies are What is the significance of Bissett do you see among potential investors a time when it has been difficult to fi- looking for projects that are more de- Creek being a large flake deposit? regarding Bissett Creek? nance projects. The partnership remains risked, and it becomes more difficult to CEO In precious and base metal markets ev- The investment community has a good CEO strong, as we look to further understand find partners for earlier stage projects. Northern Graphite Corp. erybody gets the same price for their idea about graphite, and the econom- Transition Metals the mineralization and geology that has However, as long as we maintain our metal. In industrial minerals the oppo- ics of the mineral are very attractive. been intersected. property positions we can put projects site is true and prices range according The commodity is less known amongst on hold until the market becomes better to their quality. The large flake market lenders, since there is no hedging and Transition recently spun out Sudbury and we can once again attract new part- has held the market prices better and spot price trading, so raising debt is Platinum. How does this fit within your ners. At this time, Transition is well posi- the extra large market has even better challenging. Lastly, we still do not have strategy? tioned with three joint venture partners, indicators. Extra large flake prices are an off-take agreement, which we are One of Transition’s projects is called which are spending money on projects around $2000/ton, whereas small and still working on acquiring, either with a Aer-Kidd, which is sandwiched between and generating funds for new projects medium flake are under $1000/ton. The manufacturer or with a lithium-ion bat- Vale’s Totten mine and KGHM’s Victoria in Nunavut. Project generators need to percentage of large flake has a big ef- tery manufacturer. development project. Transition is the assess how far to take a project and how fect on the economics of the project. only junior in that area which makes Sud- much money to spend to make it mar- The amorphous market for graphite is What is going to drive the demand for bury Platinum an attractive investment. ketable to a partner. lower-priced and is more difficult to graphite in the near future? Under the Transition Metals project gen- sell. Steel and automotive industries are still eration business model we were looking What interests you in greenfields explo- a big part of graphite demand in the fu- for partners to fund our exploration work ration in Ontario? Northern Graphite has tested a pro- ture. New uses for graphite are not big in order to minimize shareholder dilu- Transition is focused in three areas in On- prietary purification technology that enough yet to offset a decline in supply. tion. In the case of the Aer-Kidd project tario. The first is the emerging platinum achieved purity levels of over 99%. When economy turns around, and steel we were not able to find a partner. As a district near Thunder Bay, where we are Is the technology scalable to support production picks up again, the graphite result a decision was made to transfer focusing our exploration on targets simi- GBR last spoke to Northern Graphite anticipated levels of production at price will increase. Lithium-ion batter- What was the rationale behind the HTX the project outside of Transition Metals lar to Lundin’s Eagle deposit in Michigan, in 2011. Can you update us on the Bissett Creek? ies have gone from using almost no Minerals acquisition in 2013? into a private company in exchange for Rio Tinto’s Tamarack deposit in Minne- company’s progress at the Bissett Our research was designed using a graphite to 100 tons of graphite a year The merger of HTX Minerals and Tran- shares. By doing so we were able to sota and Panoramic’s Thunder Bay North Creek graphite project in the interim? low-temperature thermal approach, going into that market, and the market sition Metals resulted in a larger, more keep our shareholders exposed to the project. We might have tiger by the tail Northern Graphite is the only graphite where we performed scaling testing in is growing at a rate of 20% per year. diverse company of comparable size to project without diluting the principal in the area at Sunday Lake and are hope- company in Ontario with a bankable conjunction with a metallurgical com- We anticipate that lithium-ion batteries our peer set of project generators. Col- company. Sudbury Platinum recently ful that additional drill results will garnish feasibility study and an environmental pany to prove that it is scalable. We are and fuel cells will drive the graphite lectively the group now boasts a strong raised $1.5 million in private placements, attention in the market. We have always permit. Bissett Creek is a large flake looking at production of 20,000 tons a market over time. technical team of 8 geoscientists and and we will be drilling this summer. been bullish on Sudbury, where we have deposit; 90% of our production will year and do not intend on purifying all of more that 25 projects across the coun- set up our new subsidiary, Sudbury Plat- be large and extra large flake graphite, it but expanding as the market grows. What would you like our readers to try. Notably the transaction enabled How are you able to find and identify inum Corp to focus on discovery of high- while most other deposits are from The price of this purified graphite will know about graphite as an investment Transition shareholders access key greenfields targets when the market grade nickel, copper, PGM deposits. 30% to 50% range. The project’s loca- fetch over $3,000/ton, which gives us proposition? nickel, copper PGM asset and HTX’s is turning away from high-risk explo- The third area is the Abitibi, a district tion in Ontario is located very near to an additional profit margin. At the moment, the price of graphite strategic alliance with the Nunavut Re- ration? that produces around 80% of Canada’s existing infrastructure, and our initial is near the bottom, but there are good sources Corporation while the HTX Transition’s forte is concept generation. gold. Transition is focused on the Ride- capital expenditure and unit operating Graphite prices have suffered of late. companies out there and a very good shareholders gained exposure to Tran- We start with large data sets and build out structure, where we have a recent costs are among the lowest in the in- How to the wider economics of the supply-demand picture emerging. If sition’s Janice Lake base metals project custom compilations to identify districts discovery at our Haultain property. dustry. We are currently working on graphite market affect the investment you have the patience, there is a poten- in Saskatchewan and a cache of high that are prospective for discovery. Our acquiring a strategic partner and secur- proposition at Bissett Creek? tial to do very well in this market. • quality gold projects including its new area of expertise is nickel-copper-PGEs, Where would you like to see Transition ing financing. Our goal is to be in con- The current graphite price is near the Haultain discovery. base metals and gold exploration and we Metals in the future? struction by the end of 2014 in order to bottom, because Chinese flake produc- have a proven track record that demon- Transition will continue to grow as a begin production by the end of 2015. tion has gone down 20% to 30%, and What is the significance of the Sunday strates we can be successful. We draw project generator. Our business plan mines are closing due to depressed Lake platinum discovery? on our team’s knowledge of existing affords us to be involved with many What distinguishes Bissett Creek from prices. Our economics at the current Sunday Lake was the result of a five-year areas, as well as it world-class technical high-quality exploration projects that will other graphite deposits in Ontario? prices are very good. The average price partnership with Impala Platinum. We expertise. There are high risks in green- reward our shareholders, employees and We see growth in lithium-ion batteries, we receive on current market is $1800/ developed a solid exploration concept fields exploration, but they also produce partners with exposure to new mines. and we are the only company in the On- ton, while most of our competitors and through excellent science and per- some of the highest returns for share- We will continue to look for partners for tario graphite market that has produced will receive $1000/ton because of the sistence, we have been rewarded with holders. The project generator business our other projects and already have inter- spherical graphite from the concentrate lower flake content. We have a pre-tax a new platinum discovery in what might model mitigates some of the risk and est in Haultain and West Matachewan and tested it successfully in batteries; rate of return of 20% at current prices. be an emerging new PGM district. In retains exposure to the potential high in the Abitibi region and Janice Lake in we are now providing samples to man- Our cash operating cost is $750/ton, addition, there will be significant supply rewards. Saskatchwan. •

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“It is quite evident that projects take more time to move through the environmental review and permitting process in the United States than in Canada. Every jurisdiction, including Canada, is different, and the common objective in all jurisdictions in the world is to manage that process as efficiently as possible. Duluth has taken a comprehensive approach in Minnesota to involve ourselves with various levels of government, both at the political and the agency level, which is important when you get into the formal permitting process. You have to be far more detailed in your environmental baseline studies and the EIS than in Ontario.”

- Christopher Dundas, Director and Executive Chairman, Duluth Metals Ltd.

Image: Dundee Precious Metals Global Reach: Exporting Mining Expertise and Finance

- Christopher Dundas, Director and Executive Chairman, Duluth Metals Ltd.

Image: Dundee Precious Metals EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Aura Minerals Inc. operates the Aran- become more familiar with the process The exploration potential of Chile outweighs what you find in Canada… Broadening zazu mine in Mexico that produced 13.6 and its impact on the environment,” Recently, grassroots discoveries have been harder and more expensive to million lb/y of copper in 2013. The com- said Espaillat. “ find Canada due to the mature state of the Canadian exploration industry. In Horizons pany is looking to increase its produc- Chile, you still have the opportunity to find new deposits – Cerro Maricunga tion capacity at Aranzazu by over 70% Moving to the Eastern Hemisphere was a grassroots discovery outcropping on surface. by 2016. “In the current economic environment, this would more than dou- With so much success in South Amer- ble our profits,” said Jim Bannantine, ica, a number of Toronto-based compa- - Carl Hansen, President, Director and CEO, Ontario’s Miners in South America, president CEO of Aura Minerals. “Once nies are hoping to apply their expertise Atacama Pacific Gold Corp. Europe, Asia, and the United States we reach the 30 to 35 million pounds to less traditional mining jurisdictions. per year (lb/y) milestone in 2016, simple Dundee Precious Metals Inc. owns and economies of scale mean that the cash operates the Chelopech gold mine in cost will come down to approximately Bulgaria and the Kapan gold project in Foth is working on the Victory Nickel project in Manitoba, which owned by $1.35/lb.” Armenia, and is developing the Krumvo- Victory Nickel Inc….We are engaged with a number of clients with interests South America is the traditional backyard grad gold mine, also in Bulgaria. Since between Minnesota and Ontario, where there are similar geologies. for Toronto-based mining companies More Potential in Latin America acquiring the Chelopech mine in 2004, with operations overseas, but many ju- Dundee Precious Metals has quadru- niors are pushing new mining frontiers The majority of Canadian mining invest- pled its overall production to 130,000 - Steve Donohue, Director, in less-known destinations of Eastern ments into Latin America are dedicated oz/y of gold and 45 million lb/y of cop- Foth Infrastructure & Environment Europe and Asia. Of the nearly 9,000 to Mexico, Peru, Chile, Argentina and per. “Eastern Europe has a long history projects held by TSX- and TSX-V-listed Brazil. However, Toronto juniors are of mining,” explained Rick Howes, the companies, nearly 50% are outside of steadily advancing projects outside of company’s president and CEO. “Our Canada. the “Big 5.” model of building these businesses is Mexico is the best silver jurisdiction in the world… permitting is Canadian mining companies have a long In Guyana, Sandspring Resources Ltd. to avoid over-staffing with ex-patriots straightforward and transparent and, until recently, the country had a history of operations in South America. is looking to bring its 4.1 million oz and employ local nationals. After the in- favorable tax regime with a corporate rate of 30%, although new royalties Barrick Gold, Yamana Gold, Goldcorp, Toroparu gold project into production troduction and training of new methods and recent tax reforms have cast a shadow on tax competitiveness. Teck Resources and Kinross Gold Corp. in 2017. The project received a major and technology over an eight-year pe- are just a selection of major companies boost earlier this year when Sandspring riod at our producing Chelopech mine, that operate mines in the region, accru- signed a $150-million streaming deal a local management team is in full con- - Brendan Cahill, President and CEO, ing revenues of nearly $20 billion. with Silver Wheaton Corp. The inter- trol.” The company’s other producing Excellon Resources Inc. Unsurprisingly, a number of Toron- national mining community is watching asset is the Kapan gold mine in Arme- to-based juniors are hoping to replicate this first large project in Guyana accord- nia. “Kapan was a relatively small un- the success of these major companies ing to Rich Munson, Sandspring’s CEO. derground-mine that Dundee acquired in proven mining camps. Mexico has “Guyana Goldfield’s Aurora project will in 2008. Five years’ drilling culminated Paraguay is one of the easier countries in which to work in Latin America. always been a preferred mining juris- help to de-risk the perception of the in a new resource estimate of a large It has potential for gold, diamonds, titanium, uranium and rare earths and is diction, with world-class deposits of country. If the International Financial deposit, to be expanded underground under-explored... precious metals and strong community Corp., one of the main financing compa- rather than open-pit. The mine is pro- support for the industry. Recently, how- nies for Guyana Goldfields, is comfort- ducing 30,000 oz/y gold, and is a poly- ever, the Mexican government instituted able with the situation, it will also give metallic deposit of gold, copper, silver - Miles Rideout, President and CEO, a 7.5% mining tax as part of a series of the green light to the industry.” and zinc; 50% of the value is in the gold Latin American Minerals Inc. reforms to the country’s fiscal regime. Latin American Minerals is hoping to ad- and based on the inferred and indicated Excellon Resources has been active in vance its camp-scale Paso Yorbai gold resource there is the potential to double Mexico since 1996. Its project, the La project in Paraguay. current production,” said Howes. Platosa mine in Durango, is Mexico’s The advantage for juniors located in highest-grade silver mine, producing a historic mining jurisdiction such as DIRECT INVESTMENT STOCKS ” more than 1.4 million ounces per year Ontario is being able to export mining Source: Statistics Canada, CANSIM Table 376-0052.

(oz/y) at a grade of 718 grams per metric expertise to developing countries that CANADIAN DIRECT INVESTMENT ABROAD FOREIGN DIRECT INVETSMENT IN CANADA ton (g/mt) in 2013. The company’s focus are less familiar with mining. GoldQuest $ is to increase high-grade production in Mining Corp.’s president, CEO and di- million 2014. “We increased production from rector, Julio Espaillat, organized a del- 75000

5,000 mt in July 2013 to 7,000 mt in Sep- egation from the San Juan province in 60000 tember and October 2013; although we Dominican Republic to visit the under- may only produce 200 mt/day, each of ground mines in northern Ontario in 45000 our tons carries up to 30 oz of silver – our order for policymakers to understand 30000 average ton is worth $500 to $600 at cur- the impact of underground mining oper-

rent silver prices,” said Brendan Cahill, ations. “They are of course encouraged 15000 president, CEO and director of Excellon to form their own opinions about under- Resources. ground mining, but this way they will 1990 1995 2000 2005 2006 2007 2008 2009 2010 2012

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Image: Orvana Minerals Corp.

Mario mine in Bolivia. The company ex- other benefit is labor stability, due to a high level of unemploy- ceeded its production estimates from Michael Winship ment in Spain. Labor costs remain reasonable, which helps to EVBC in 2013 and has increased the run our operations smoothly. capacity of its milling facility to 2,200 mt/d. “In comparison with some of the One of your flagship projects is located in Bolivia. How would large gold deposits in Ontario, the grade you characterize operating there? at EVBC is lower. However, the advan- Orvana has been operating in Bolivia for a decade and feels tage we have is that there is copper relatively comfortable. Don Mario is located in Santa Cruz area, and silver as by-products,” said Michael President and CEO which is called the ‘breadbasket’ of the country. It is an eco- Winship, president and CEO of Orvana Orvana nomically driven region, and having our office there helps us Minerals. Minerals easily access contractors and qualified staff. There are some Corp. political challenges associated with working in Bolivia, and at Closer to Home: the United States the moment we are one of the four remaining mining companies in the region. We are aware of the nationalization risk, but Sometimes, the best areas to explore given our track record in the country, we are confident about are south of the border, where rule of its future and will continue to invest in the region and advance law is secure and the regulatory regime our project. is similar to that of Canada. Duluth Met- als Ltd. owns the massive Twin Metals What are your near-term objectives and where would you like deposit in Minnesota, which houses to lead the company? 27 billion lb copper, 8.9 billion lb nickel Could you provide us with an introduction to Orvana We will maintain a strong safety and environmental record, as and 35.6 million oz of palladium-plat- Minerals and its assets in Spain and Bolivia? well as continue improving our performance in that area. We Eastern Europe’s Communist history come as a byproduct of mining base inum-gold. “Compared to similar de- Orvana Minerals is a mining company with a strong in- intend to exceed our 2013 results and achieve production of meant that for a number of years, min- metals (lead and zinc) hence exploit- posits of this type, from a contained ternational focus. Our flagship projects are the El Valle- 100,000 ounces per year. Orvana Minerals is an exciting coming operations were taking place unbe- ing silver-based deposits was not war- metal point of view, this is probably Boinas/Carled (EVBC) underground, gold and copper pany that distinguishes itself through its international focus and knownst to the global industry. Once ranted.” the second-largest contained metal re- mine in Spain and the Don Mario mine in Bolivia. possibility to expand its production capacity. • the Iron Curtain fell, the mineral po- Stans Energy Corp. is working to ad- serves next to Norilsk,” said Christo- tential of former Soviet Bloc countries vance their Kutessay II rare earths pher Dundas, chairman, CEO and direc- In 2013 Orvana Minerals exceeded estimated pro- created excitement. Black Iron, a Toron- project in Kyrgyzstan. “Kutessay II was tor of Duluth Metals. duction targets at both EVBC and Don Mario. What to-based exploration company with the only hard rock, heavy rare earth Romarco Minerals Inc is working on de- measures are being implemented in 2014 to support 100% ownership of the Shymanivske deposit that was ever in production veloping the Haile gold project, a former higher production targets? iron project, thinks there is huge poten- outside China and supplied 80% of the producer that houses a measured and Orvana Minerals has exceeded expectations for produc- tial in Ukraine. “Historically, Ukraine has Soviet Union’s rare earths for 30 years indicated gold resource of 71.2 million tion in 2013 and consequently adjusted 2014 production produced about 140 million mt/y of iron until ceasing operations in the early mt at 1.77 g/mt for 4.0 million oz. “The guidelines for gold and copper. We implemented a num- ore, now production is down to 90 mil- nineties,” said David Vinokurov, vice Slate Belt of the East Coast was where ber of measures at our flagship projects. For example, lion mt/y. It is slightly more than Canada, president of corporate development at gold production in the United States at EVBC, we increased the capacity of our milling facility but minuscule compared to Australia’s Stans Energy. “The demand for rare started, long before the California Gold from the nominal amount of 2000 metric tons per day production,” said Black Iron’s president earths has only surged since, and they Rush. Today gold prices are materi- (mt/d) to 2200 mt/d and are targeting 2400 mt/d in the and CEO, Matthew Simpson. The cur- are now used in virtually every type of ally different and the technology has near future. These results are being achieved thanks in rent political situation involving Ukraine electronic application.” changed significantly,” said Romarco’s part to a new hoisting facility, which has been rebuilt and Russia is however weighing heavily While there are larger deposits world- president and CEO, Diane Garrett. after an accident in June 2013. We upgraded safety on the minds of the mining industry. wide, the challenge is finding a project The population density of the United standards and the increased capacity of the system al- Silver Bear Resources Inc. is developing with the right mix of the critical rare States has an impact on the permitting lowing us to deliver higher production already by the end a high-grade silver project in the east- earth elements, with a low amount process, which is the main challenge of Q12014. ern region of Russia. The Mangazeisky of capital expenditure required. With to mining operations in the country. As At Don Mario, we shut down the LPF oxide circuit - a project has a measured and indicated Kutessay II, Stans believes, they have Steve Donohue, director of mining sec- high-cost circuit with limited throughput and focused on resource of 17.9 million oz of silver at found that essential mix. “What makes tor services at Foth Infrastructure and optimizing sulphide floatation. Over the past few quar- 518 g/mt and inferred resources of 43.9 Kutessay II stand out is that it contains Environment, explained: “While there is ters, we got higher throughput and reduced operating million oz of silver at 282 g/mt. Despite nearly 50% heavy rare earths, and with significant local support from the min- costs. There is also an organic growth opportunity. We these grades, Silver Bear is one of very a projected output of 1,500 mt/y of ox- ing world, permits are more challeng- have included exploration expenditures for both Spain few foreign companies developing a sil- ides, the projected capex is in the right ing to obtain due to non-governmental and Bolivia. We will spend over $1 million in Bolivia. ver project in Russia. “Silver is consid- range,” said Vinokurov. organizations and other environmen- ered a non-strategic metal within Rus- Outside of the former Soviet bloc of tal groups, leading to a longer review How does EVBC gold mine compare to existing gold sia, meaning it did not receive a lot of countries, Europe holds significant po- process to obtain permits. In Canada, mines in Ontario in terms of grade and operational resources for development from Soviet tential for Canadian juniors. Orvana Min- because many of the mining projects capacity? authorities,” said Mark Trevisiol, Silver erals Corp. owns and operates the El are located in remote areas away from In comparison with some of the large gold deposits in Bear’s president and CEO. “A lot of the Valle-Boinas/Carled (EVBC) underground communities, the permitting process is Ontario, the grade at EVBC is lower. However, its advan- former Soviet Union’s silver production gold copper mine in Spain and the Don less intense.” • tage is that there are copper and silver by-products. The

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Image: Orvana Minerals Corp.

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Why did Dundee Precious Metals taining somewhere between 70,000 oz garian Socialist and ethnic Turkish party value is in the gold and based on the acid. The plant is also being expanded to Rick Howes decide to enter the Bulgarian and Ar- of gold and 80,000 oz of gold in addition with 50% of the seats making it difficult inferred and indicated resource there is take more material from Chelopech and menian mining jurisdictions? to the 130,000 oz of gold that is already to secure changes in legislation. Ar- the potential to double current produc- third party producers with the same kind Eastern Europe has a long history of being recovered. Over the next two to guably, there will be an election before tion. During its life-span the resource of concentrate. Tsumeb will be the sin- mining. Dundee Precious Metals has three years we have a contract with the any major changes are made on energy should produce 2 million gold equivalent gle largest smelter in the world treating been established since 1983, originally Chinese to sell mineral concentrate. A and mining. The minority government ounces. Investment requirements have unique complex concentrates. Similar formed as a closed-end investment feasibility study has been completed has not adversely affected Dundee at still to be calculated. plants in Peru, Mexico and Korea that fund, essentially a precious metal fund for another method to recover the gold Chelopech, but at Krumovgrad there have not invested in modernization have President and CEO investing in global mining projects. from the pyrite and build a facility on site has been a small issue i.e. the slowing To complete the overview of your as- closed due to environmental issues. Dundee Precious Metals Through the process of investing in at Chelopech. It is major capital invest- down of the permitting process by the sets, could we now look at your Namib- projects, Ned Goodman, our CEO at the ment but is on-hold due to current gold local municipal, a political supporter of ian concentrate processing facility? What are your main developments time, was familiar with assets in Bul- prices. the ethnic Turkish party. Dundee acquired the Tsumeb smelter planned for 2014? garia, and in 2003, he became aware facility in 2010. Our rationale was to en- Dundee's developments for 2014 will be that the company owning these assets Your other Bulgarian asset, Krumov- What is the relative importance of your sure the treatment of our Chelopech's to commence production at the Krumov- was going bankrupt. On acquiring the grad, has seen good development with Kapan project in Armenia and how high arsenic copper concentrate, as grad gold project in southern Bulgaria, Bulgarian assets, Ned Goodman closed the Environmental Impact Assessment much is the mine producing? there are few locations globally that can complete its Tsumeb smelter acid plant the fund and in 2004 launched Dundee (EIA) receiving positive feedback from Kapan was a relatively small, under- treat this type of material. The Tsumeb project (expand its smelter and increase Precious Metals as an operating mining the Bulgarian authorities. How did you ground mine that Dundee acquired in facility is unique; it had previously been production throughput), and begin to sell company. overcome the environmental concerns 2008; our buying strategy was based on treating material from the Tsumeb cop- acid to the uranium markets in Namibia. of the public? old Soviet drill-hole data, which showed per mine, 100% the type of material we Additionally, we are also looking for- What is the current position of your Krumovgrad commenced in 2005 with that the asset had the potential to be- have at Chelopech. The owner of the ward to completing our pyrite project. modernization process and ramp-up at Dundee submitting an EIA application come a large open-pit mine. Five years smelter was not willing to invest the Dundee Precious Metals is built on three the Chelopech mine? for an open-pit gold project. We went of drilling culminated in a new resource capex to modernize the plant to inter- streams: copper, gold and treatment of In 2009, a capital project for Chelopech through public hearings in a process estimate of a large deposit, to be ex- national standards, so Dundee bought it copper concentrate; from a pricing view- of $175 million was approved to mod- to secure environmental permits: pub- panded underground rather than open- and modernized it, one aspect being to point, all these streams are independent ernize and expand ore production from 1 lic concerns were expressed over the pit. The mine is producing 30,000 oz of reduce emissions from the smelter by of each other. Dundee Precious Metals million (metric tons) mt to 2 million mt; use of cyanide technology as part of gold annually, a polymetallic deposit of capturing the sulfur dioxide emissions is poised to progress by maintaining its this was achieved at the end of 2012, the process to recover the gold and the gold, copper, silver and zinc; 50% of the from the stack converting it to sulfuric low-cost high-return policy. • doubling the previous production to near-town location of the wet tailings fa- 130,000 ounces (oz) of gold and 45 mil- cility. In 2008, based on the feedback, lion pounds (lb) of copper. Since acquir- we decided not to proceed with the ing the mine in 2004, we have quadru- project. Dundee then re-packaged its pled its overall production. We run a proposal taking out the cyanide technol- very efficient operation, which is a com- ogy, which meant an economic trade- bination of technology and management off, but still producing a good metal practices. Our costs are based on using recovery making the project viable. The best-practice technologies for how ma- footprint of the project was reduced by terial is moved, processed, and distrib- 50%, the area for the wet tailings fa- uted. From a cost basis Chelopech is in cility was removed, and the method of the lower 10% of our producing assets. semi-dry tailings disposal adopted. The Krumovgrad proposal was resubmitted Could you provide us with an update and more readily accepted. Environ- on the Pyrite recovery project at the mental permits have been secured plus Chelopech mine? a concession agreement with the gov- Dundee has always had gold that it ernment; currently, the project is now has not recovered from the Chelopech at the stage of local municipal permits material, producing only a copper con- in readiness for construction. The local centrate. Copper contained about 55% community is now predominantly sup- of the total gold content, therefore the portive of the project. gold accompanied the recovered copper; the other 45% of gold was locked What has been the impact that the in the mineral com pyrite, essentially an 2013 Bulgarian elections have had on iron sulphide, not a valuable mineral per Dundee Precious Metals? se but one that does contain some gold. Currently, the political environment in A project to produce pyrite concentrate Bulgaria is not stable. The stability under containing gold is under construction to the previous government was unusual. be completed by year-end 2013. It will The May elections produced a very release 400,000 mt pyrite mineral con- weak minority government of the Bul-

ONTARIO MINING 2015 - 58 - Industry Explorations Industry Explorations - 59 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports INTERVIEW

million in capital outlay. Not included imum investment from Russian-based What makes you fight with such de- Mark Trevisol in these estimates are any by product shareholders. Russia generally follows David Vinokurov termination for Kutessay II? credits that we may receive from gold, an auction process for mineral proper- Kutessay II was the only hard rock, lead or zinc that exist on our property. ties. The regional government puts out heavy rare earth deposit that was ever tenders to potential companies, and in production outside of China and Despite the high-grade silver deposits there is access to bid via web-based supplied 80% of the Soviet Union’s found in Russia, Silver Bear is one systems. In Silver Bear’s case, three rare earths for 30 years, until ceas- of the few companies developing a Russian entrepreneurs were success- ing operations in the early nineties. Former* President and CEO project. Why is this? ful bidders on the Mangazeisky prop- Vice President Corporate Development The demand for rare earths has only Silver Bear Resources There is another significant deposit erty in 2004. The property had been Stans Energy Corp. surged since, and they are now used that has been developed called Dukat known in Russia for decades and to in virtually every type of electronic ap- that is operated by Polymetal, a Rus- those in the silver business outside of plication. In addition, since acquiring * Graham Hill is the new CEO sian-based company. Another re- Russia. Investors in Toronto formed our license in 2009, time, money, and of Silver Bear Resources. source to the east of Mangazeisky has Silver Bear Resources (as private com- effort have been invested, and it would upwards of 200 million oz at similar pany then) to place Mangazeisky into a be a shame to simply walk away. It is grades. The lack of silver development Canadian entity. Some prominent min- management’s responsibility to ensure has to do with Russia’s history: most ing executives were part of the original that our shareholders’ interests are production in the Soviet Union was for team, like Randall Oliphant and Steve protected and represented. internal consumption. Furthermore, sil- Shefsky. ver is considered a non-strategic metal How have you been advancing Kutes- in Russia and therefore did not receive Silver Bear has been successful at say II despite prosecution from the significant development resources attracting financing for Mangazeisky, government? from Soviet authorities. Finally, the for- having recently announced a private Stans Energy acquired the Kashka mer Soviet Union’s silver production placement for $11 million, but other Rare Earth Processing Plant, which can largely come as a byproduct of mining companies say that Russia is consid- process over 120 different rare earth base metals (lead and zinc); hence, ex- ered an unsafe destination for foreign oxides, metals, and alloys and since ploiting silver-based deposits was not capital. What has been your experi- then the Company has been working warranted. ence? on improving the historical produc- Silver Bear’s Mangazeisky project in The quality of the asset is the driver. Since GBR last spoke to Stans Energy tion processes. We have upgraded Russia has a measured and indicated You mentioned that Mangazeisky is There are risks associated with running in 2011, the company has been the electrical system and undergone resource of 17.9 million ounces (oz) of 400 km north of a major city. What are projects in other jurisdictions, each of involved in various lawsuits in Kyr- operational testing to make it almost silver at 518 grams per metric ton (g/ the infrastructure requirements? them having different challenges. To gyzstan regarding its mining license fully operational. We have developed mt) and inferred resources of 43.9 mil- Because our plant is small, the infra- succeed in Russia, you have to be pre- at its Kutessay II rare earth project. a cracking process to remove all the lion oz of silver at 282 g/mt. Can you structure demands are minimal and pared to put the time in with regional However, Stans received a favorable radioactive by-products in a more en- put these numbers into perspective? the requirement for logistical support and federal governments and to spend ruling in international arbitration. How vironmentally sustainable way. We The extraction value of the is significantly reduced. We are mining effort adhering to licensing processes will the company proceed? are also still working on the final re- Mangazeisky project is very high. In small volumes of ore (300 mt per day), and government mining regulations Within the next few months the Arbi- port on metal separation techniques. our latest preliminary economic as- which means that we will not need a lot and regulators. tration Court at the Moscow Chamber This forms the outline of our feasibility sessment we are targeting the near of consumables such as fuel, blasting of Commerce and Industry will respond study, and we are testing the econom- surface high-grade zones that have ore media and reagents and production of How do you approach the challenge to our claims point by point and issue ics of these processes to demonstrate values of up to $1000/mt. Grades are electrical energy. In fact, we are look- of working in a culturally different a judgment that will include a damage to the global investment community what make the project. We are 400 ing at renewable energy sources such environment? amount. The Company submitted a the case for Kutessay II. kilometers (km) north of a major city as wind and hydroelectric to decrease When I go to Yakutia I get the same claim for $117 million. As a Canadi- with winter road access. The mining further our dependency on outside feeling as I did working at a small an-based company we adhere to the Could you talk a bit about Kyrgyzstan plan focuses on our near surface high supplies. The plant itself can be built mining town in Canada. The people in highest ethical and legal standards in- as a mining jurisdiction? grade resources in the first five years using modular construction. We have Yakutia are very easy to get along with, ternationally and this ruling supports Kyrgyzstan is a relatively new democ- of mining, with a total mine life of 19 an access road for around 5 months of they welcome foreign investment and our established business practices. racy and there is still huge mistrust years. This provides a quick payback the year (during winter months). The we have had very strong relations with There is still much potential in Kutes- about what the government did prior on the project (less than two years) larger volumes of consumables will be the regional government. The presi- say II, and we will continue to nego- to 2010. The country is mineral rich, and generates cash to further explore taken to site while the winter road is dent of Yakutia (President Borisov) is tiate with the Kyrgyz government to but poor. The mining legislation is fair, other high-grade areas on the property. available. During summer months we very supportive of the project and has resolve our issues. The site contains but implementation is more problem- Over the next 12 to 18 months, we will can use either fixed or rotary wing air- written statements to the federal au- nearly 50% heavy rare earths, with a atic. There is also a large degree of move the project into full feasibility. craft to get people and supplies to site. thorities about the positive impact that projected output of 1500 metric tons uninformed skepticism among local The economics are very attractive us- Mangazeisky is having on the region. per year (mt/y) of oxides, and the pro- communities. Companies have been ing the current Preliminary Economic What are the requirements for Russian Local communities judge your commit- jected capex is in the right range. Fur- spending large amounts on sustainabil- Assessment (PEA), with a 63% in- ownership of assets? ment by your continued development thermore, our management team has ity initiatives, but must do more to earn ternal rate of return, $130 million net Silver is not a strategic metal, so it of the project and face-to-face discus- extensive experience in the former the respect of local communities. • present value (at 5% discount) and $39 was not required for us to have a min- sions with their key stakeholders. • Soviet Union.

ONTARIO MINING 2015 - 60 - Industry Explorations Industry Explorations - 61 - INTERVIEW Global Business Reports Global Business Reports INTERVIEW

ONTARIO MINING 2015 - 60 - Industry Explorations Industry Explorations - 61 - INTERVIEW Global Business Reports Global Business Reports EDITORIAL

ore mines before, and there is no need We approached Metinvest, as we were Matthew to invest millions in training programs. looking for a strong in-country partner. Towering As the largest employer in Ukraine and Simpson How does the Krivoy Rog basin and with profits of $12.8 billion in 2013, Met- Toronto particularly Black Iron’s deposit com- invest is also the ninth largest iron ore pare to the geology in British Colombia, producer in the world. For Black Iron, this Labrador trough or Western Australia? partnership is ideal because Metinvest In terms of resource size, Ukraine has brings considerable local experience and President and CEO the fourth largest resource base in the expertise about local service providers Financial and Human Capital Black Iron Inc. world, but only 1/10 is in production right and construction contractors. Also they in Ontario Mining now, so there is a great potential. Histor- will fund half of the equity needed to ically, Ukraine has produced about 140 construct the mine, without requiring million mt per year, now production is off-take as there steel mills are fully self down to 90 million mt. It is significantly sufficient with iron ore mines already more than Canada, but minuscule com- owned and operating by Metinvest. Met- Toronto may be the global epicenter expected the tax credit to be extended pared to Australia’s production. In terms invest owns 49% of this project and the of mining finance, but even Canadian due to the current financial situations, of the type of ore, it is mostly banded ore returns that it is going to generate are investors – long lauded for their knowl- and the pricing policy has not led to a formation, often found in Canada and in very lucrative. There has not been a new edge of the risks associated with the strong influx of capital on the TSX,” he the United States. iron ore mine constructed in Ukraine in mining industry – have grown wary of said. over 40 years, and Metinvest is inter- investing in the sector. Mining com- The lack of traditional forms of capi- Black Iron is on its way to production in ested in seeing world-class project man- panies have been amongst the worst tal has led mining companies to look 2017. What needs to happen to achieve agement and new technology coming performers on the Toronto Stock at other forms of financing for their this? into the country. Exchange and the Toronto Venture projects. Royalty deals have become First, we will finalize the off-take agree- Exchange. For the first time in many more attractive to near-production ment to sell our 9.9 million mt of iron You secured a private placement with years, the first quarter of 2013 did not companies looking to raise money ore a year in exchange for project con- Dundee Securities earlier this year, how feature a single mining IPO. to fund construction. Sandspring Re- struction financing; we are looking to challenging was this process given With fewer listings and less capital sources and Rubicon Minerals Corp. raise between $200 and $300 million. that you are a Toronto-based company raises, the TMX Group, owner of the both landed multi-million dollar deals Can you introduce us to Black Iron and The other step is to acquire additional operating in Ukraine? TSX and TSX-V, decided to utilize its with streaming companies Silver the Shymanivske project in Ukraine? land from Ukraine’s government, where The biggest challenge is getting people global reach to access investors out- Wheaton and Royal Gold Inc., respec- Black Iron was founded in 2010 after we our tailings, waste rock and concentrator to understand Ukraine; although it is a side of Toronto. The Group recently tively. acquired two properties in Ukraine from will be located. We are mostly looking at developing nation, it has a tremendous signed an agreement with the Santi- Rubicon Minerals evaluated several a company called EastOne Group who local markets in Europe, Turkey and Mid- potential due to the exceptional infra- ago Stock Exchange to create a new options, including equity and debt fi- in turn purchased them from Ukraine’s dle East because of our major shipping structure access, highly educated rela- venture exchange in Chile that allows nancing, for their Phoenix Gold project. government. We have access to the advantage. However, we cannot disre- tively low cost workforce and geograph- TSX-V listed companies to list on its When they were unable to find a suit- key components that make an iron ore gard the growth of India and China. By ical location close to many customers. Latin American counterpart and tap into able offer, the company turned to a project success - infrastructure and the end of the first quarter of 2014, we There are a lot of people who believe the investor base in South America. $75 million royalty deal with Royal skilled labour. Our property is located will have this agreement in place. Finally, in the economics of our project, but are “Our unique two-tier exchange sys- Gold. “Having the backing of a major within two kilometers of the govern- political stability in Ukraine is critical, concerned about the jurisdiction. Secur- tem is at the core of our value propo- royalty company like Royal Gold gives ment-owned railway, where we have and, with recent democratic presidential ing Metinvest as our partner, did help us sition and differentiates us from other us additional security. The streaming already secured 20 million metric tons elections, this is a major step forward to to attract Dundee Securities and other markets. In Santiago’s case, both the deal was well received by the markets, (mt) capacity. We can access five differ- peace. banks, but more work needs to be done government and the exchange really and the share price appreciated once ent ports with this rail with our preferred to educate investors. We are also looking liked the two-tier model. Many of our more investors became interested in port being Yuzhny about 400 kilometers What are the economics of this project to do a dual listing in London, as there Canadian issuers are doing business the company,” said Rubicon’s CEO, (km) south, and which also has con- and how do fluctuations in iron ore price is a better understanding of Ukraine as in Latin America and it seemed like a Michael Lalonde. firmed capacity for our project. There are affect it? a mining destination and investors are natural extension of our capabilities for The streaming deal subsequently led multiple options to access high voltage We believe that the long-term price for comfortable about investing there. • us to be involved,” explained Kevan to a $100 million bought deal financing. electricity, water, natural gas and sewer iron ore will be around $95 per mt. Our Cowan, president, TSX Markets and While royalty companies are in a good with letters of intent being signed with break-even for this project is $53 per mt. group head of equities. position to capitalize on the lack of tra- the various utility providers to secure ac- Unlevered return on our deposit is 48% Closer to home, the TSX eased its ditional forms of available capital, even cess. An industrial city with 750,000 res- IRR and pay back of 2.0 years. This is a rules to allow companies to raise capi- Franco-Nevada Corp.’s president and idents is located only 30 km away from very robust project and we are confident tal at less than $0.05 a share, while the CEO David Harquail acknowledges our property, where most of our employ- we will be able to deliver profit in the federal government extended mineral that mining companies would prefer to ees come from. Due to the close prox- long-term. exploration tax credit for another year. raise money in the traditional manner. imity, there is no need for a fly-in-fly-out However, according to Denis Frawley, “We represent the area of growth now roster. Further, because of the region’s How did you Black Iron attract Met- partner at Ormston List Frawley LLP, for the gold industry – there is no ques- substantial experience with mining, invest and what are some of the terms these measures are not enough to tion about that,” he said. “Companies most of the people have worked at iron of the deal? tackle the funding issue. “The industry such as Franco-Nevada are the go-to

ONTARIO MINING 2015 - 62 - Industry Explorations Industry Explorations Image: Shutterstock - 63 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports EDITORIAL

ONTARIO MINING 2015 - 62 - Industry Explorations Industry Explorations Image: Shutterstock - 63 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

space right now for gold miners; most tom end of a market. “Streaming and forms of financing available besides LISTING OF MINING COMPANIES ON DISTRIBUTION OF $184 BILLION IN probably, mining companies would royalties are permanent and an enor- royalties.” INTERNATIONAL EXCHANGE MINING EQUITY FINANCING, 2008-2012 prefer to raise money in the traditional mously expensive way of financing,” Source: Ontario Chamber of Commerce Source: Ontario Chamber of Commerce way, through equity-bought deals, but said Rob McEwen, CEO of McEwen Private Equity in a Canadian Mining 1700 “ it is a tough financing environment for Mining. Eric Sprott is even firmer in Context them out there at the moment.” his take on royalty deals. “The most 1600 Shares of metal streaming and royalty opportunistic deal a company can do A combination of undervalued assets The international mining community companies are up well above those of at the low end of the gold market is 1500 and the promise of high returns means is waiting for a large project to get producers, who have sold their profit a royalty deal. Sprott (the company) that private equity firms are taking a 1400 constructed and begin production in margins. However, there are strong offered a line of credit to a gold-pro- closer look at the mining industry. In Guyana. The first will likely be Guyana feelings in Toronto’s mining commu- ducing company who instead signed a 1300 2013, the estimated amount of private Goldfield’s Aurora project, which will nity against selling a royalty at the bot- royalty deal, so there are indeed other capital raised was over $10 billion to be 1200 help to de-risk the perception of the directed at the mining sector, yet few country. If the International Financial deals of significance occurred. 1100 Corporation, one of the main financing While private equity firms are slowly companies for Guyana Goldfields, 1000 Targeting the learning about the risks and rewards is comfortable with the situation, it of the mining industry, mining com- 900 will also give the green light to the Youth panies often perceive private equity industry…The majority of our investors 800 funds as debt providers, according to come from Canada and the United David Thomas, managing director of 700 States. Many shareholders are involved mining-focused private equity firm Re- in other mining projects in the country source Capital Funds (RCF). Another 600 as well. Recruitment in Ontario’s Mining Industry misconception is that private equity funds are vulture funds. “In reality, we 500 are looking for good assets managed 400 - Rich Munson, CEO, by talented teams that have the abil- Sandspring Resources Ltd. 300 TSX-TSXV 39% ity to shepherd projects through the LSE-AIM 24% various stages of development,” said ASX 13% 200 The mining industry is facing a major ly-hired, young consultants were the first Thomas. NYSE/NYSEMKT 7% BM&F Bovespa 6% skills shortage worldwide. In Canada, to be laid off at a time when prospects of 100 HKEx 4% however, there is talk of a lost generation new jobs were slim at best. Certainly, in Shanghai 1% of miners as young people turn to what this current job market, a graduate would TSX-TSXV Australian Stock London Stock Exchange Other 6% Exchange Alternative Investment they consider higher-skilled employment. be well advised to look for employment (ASX) Market (LSE-AIM) This is a huge problem for Canada’s min- in the north, as generally speaking oppor- ing industry: according to the Mining In- tunities are more likely the farther north ” “ RCF has made investments in Noront industry may expect to see a num- LLP. “While there are a number of dustry Human Resources Council, nearly you go, where often the pay is better and Mining companies were much less Resources and First Nickel in Ontario, ber of investments, but Isser Elishis significant assets, what is lacking are 146,000 workers will be needed over the responsibilities greater.” open to the idea of contract workers and David Thomas sits on Noront’s countered the idea that there are cur- the infrastructure solutions that enable next decade to replace retiring mining With the impending retirement of the in the past. They preferred permanent board of directors. This type of hands- rently a lot of quality assets available companies to leverage them economi- workers. boomers and anticipated shortage of up- professionals that they could hire and on involvement on a management at distressed prices. “When it comes cally. Once these problems are solved, The most in-demand role in the mining coming talent, those companies who bet- develop internally...In a down cycle, level is characteristic of private equity to booms and busts for commodity private equity participants will gain in- industry is that of a mine engineer. Chris ter understand the needs of millennials companies are not required to pay investments. Waterton Global Re- prices, many companies end up cutting terest in the market.” Stafford, president of Toronto-based will lead the industry in the war for the severances to workers if they have to source Management, a Toronto-based back on development and high grading Michael White, president of Toron- mining recruitment firm C.J. Stafford & best talent, according to Stafford. How- lay them off. There can also be a trial private equity firm, dedicates a signifi- their assets,” said Elishis. “When we to-based financial house IBK Capital, Associates, believes that young mining ever, it is not up to the mining industry period with contractors before going cant amount of time and capital to de- look at what has happened over the believes the province has allowed its engineers have suffered from the current itself to recruit new talent. Another chal- permanent, so the client can test their veloping a mining asset. last two years in the market, the valu- collective passion for producing metals market downturn. “Roughly five years lenge to recruiting young workers to the skills before deciding to extend the The company recently raised $1 bil- ation of a company relative to where it to wane over the last hundred years, ago, the mining industry was so busy that mining industry is overcoming their prej- contract period. Contract length can lion for a fund designed to invest in sits today is not distressed.” especially in Ontario. “The province engineering consulting companies were udices. “Most students, even in engi- vary anywhere from three months to a precious metals. “When we set out in Private equity may eventually become was a frontier for metals and mine overwhelmed with the demand for their neering, do not realize the potential of a few years. June 2013 to establish the fund, our an important element in financing development – we wrote the book on services. To overcome this, they hired mining career; it is not like it was in the target was $750 million; however we mining projects in Ontario, but there many different mining techniques and graduates fresh out of university with nineteenth century,” said Mary Murray, quickly saw that high quality investors are some improvements that need have built up service industries around little, or no, field experience. This went principal at Mine Staffing International. “A - Mauricio Montano, from around the world were coming to take place in the regulatory frame- that, all the way up to our capital mar- against all the norms that had governed lot of this stems from the fact that main- Senior Account Manager, to us as the mining space continued work and on the infrastructure side to kets, which were founded on mining,” the industry for decades as traditionally stream media does not like to cover min- Brunel to worsen, making the opportunity set unlock the true value of some of the he said. “Many Ontarians do not unit was expected that a ‘consultant role’ ing stories unless it is negative coverage. larger,” said Isser Elishis, managing deposits, according to Ben Gibbons, derstand the significance of this.” • would require 15-20 years of on-the- We are not reading stories in traditional partner and CIO of Waterton. vice president, corporate finance at ac- ground experience. Sadly, as mining media about the successes of mining and With a $1-billion fund in hand, the counting firm Collins Barrow Toronto activity continued to decline, these new- all of the progress that has occurred.” • ONTARIO MINING 2015 - 64 - Industry Explorations” Industry Explorations - 65 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

space right now for gold miners; most tom end of a market. “Streaming and forms of financing available besides LISTING OF MINING COMPANIES ON DISTRIBUTION OF $184 BILLION IN probably, mining companies would royalties are permanent and an enor- royalties.” INTERNATIONAL EXCHANGE MINING EQUITY FINANCING, 2008-2012 prefer to raise money in the traditional mously expensive way of financing,” Source: Ontario Chamber of Commerce Source: Ontario Chamber of Commerce way, through equity-bought deals, but said Rob McEwen, CEO of McEwen Private Equity in a Canadian Mining 1700 “ it is a tough financing environment for Mining. Eric Sprott is even firmer in Context them out there at the moment.” his take on royalty deals. “The most 1600 Shares of metal streaming and royalty opportunistic deal a company can do A combination of undervalued assets The international mining community companies are up well above those of at the low end of the gold market is 1500 and the promise of high returns means is waiting for a large project to get producers, who have sold their profit a royalty deal. Sprott (the company) that private equity firms are taking a 1400 constructed and begin production in margins. However, there are strong offered a line of credit to a gold-pro- closer look at the mining industry. In Guyana. The first will likely be Guyana feelings in Toronto’s mining commu- ducing company who instead signed a 1300 2013, the estimated amount of private Goldfield’s Aurora project, which will nity against selling a royalty at the bot- royalty deal, so there are indeed other capital raised was over $10 billion to be 1200 help to de-risk the perception of the directed at the mining sector, yet few country. If the International Financial deals of significance occurred. 1100 Corporation, one of the main financing While private equity firms are slowly companies for Guyana Goldfields, 1000 Targeting the learning about the risks and rewards is comfortable with the situation, it of the mining industry, mining com- 900 will also give the green light to the Youth panies often perceive private equity industry…The majority of our investors 800 funds as debt providers, according to come from Canada and the United David Thomas, managing director of 700 States. Many shareholders are involved mining-focused private equity firm Re- in other mining projects in the country source Capital Funds (RCF). Another 600 as well. Recruitment in Ontario’s Mining Industry misconception is that private equity funds are vulture funds. “In reality, we 500 are looking for good assets managed 400 - Rich Munson, CEO, by talented teams that have the abil- Sandspring Resources Ltd. 300 TSX-TSXV 39% ity to shepherd projects through the LSE-AIM 24% various stages of development,” said ASX 13% 200 The mining industry is facing a major ly-hired, young consultants were the first Thomas. NYSE/NYSEMKT 7% BM&F Bovespa 6% skills shortage worldwide. In Canada, to be laid off at a time when prospects of 100 HKEx 4% however, there is talk of a lost generation new jobs were slim at best. Certainly, in Shanghai 1% of miners as young people turn to what this current job market, a graduate would TSX-TSXV Australian Stock London Stock Exchange Other 6% Exchange Alternative Investment they consider higher-skilled employment. be well advised to look for employment (ASX) Market (LSE-AIM) This is a huge problem for Canada’s min- in the north, as generally speaking oppor- ing industry: according to the Mining In- tunities are more likely the farther north ” “ RCF has made investments in Noront industry may expect to see a num- LLP. “While there are a number of dustry Human Resources Council, nearly you go, where often the pay is better and Mining companies were much less Resources and First Nickel in Ontario, ber of investments, but Isser Elishis significant assets, what is lacking are 146,000 workers will be needed over the responsibilities greater.” open to the idea of contract workers and David Thomas sits on Noront’s countered the idea that there are cur- the infrastructure solutions that enable next decade to replace retiring mining With the impending retirement of the in the past. They preferred permanent board of directors. This type of hands- rently a lot of quality assets available companies to leverage them economi- workers. boomers and anticipated shortage of up- professionals that they could hire and on involvement on a management at distressed prices. “When it comes cally. Once these problems are solved, The most in-demand role in the mining coming talent, those companies who bet- develop internally...In a down cycle, level is characteristic of private equity to booms and busts for commodity private equity participants will gain in- industry is that of a mine engineer. Chris ter understand the needs of millennials companies are not required to pay investments. Waterton Global Re- prices, many companies end up cutting terest in the market.” Stafford, president of Toronto-based will lead the industry in the war for the severances to workers if they have to source Management, a Toronto-based back on development and high grading Michael White, president of Toron- mining recruitment firm C.J. Stafford & best talent, according to Stafford. How- lay them off. There can also be a trial private equity firm, dedicates a signifi- their assets,” said Elishis. “When we to-based financial house IBK Capital, Associates, believes that young mining ever, it is not up to the mining industry period with contractors before going cant amount of time and capital to de- look at what has happened over the believes the province has allowed its engineers have suffered from the current itself to recruit new talent. Another chal- permanent, so the client can test their veloping a mining asset. last two years in the market, the valu- collective passion for producing metals market downturn. “Roughly five years lenge to recruiting young workers to the skills before deciding to extend the The company recently raised $1 bil- ation of a company relative to where it to wane over the last hundred years, ago, the mining industry was so busy that mining industry is overcoming their prej- contract period. Contract length can lion for a fund designed to invest in sits today is not distressed.” especially in Ontario. “The province engineering consulting companies were udices. “Most students, even in engi- vary anywhere from three months to a precious metals. “When we set out in Private equity may eventually become was a frontier for metals and mine overwhelmed with the demand for their neering, do not realize the potential of a few years. June 2013 to establish the fund, our an important element in financing development – we wrote the book on services. To overcome this, they hired mining career; it is not like it was in the target was $750 million; however we mining projects in Ontario, but there many different mining techniques and graduates fresh out of university with nineteenth century,” said Mary Murray, quickly saw that high quality investors are some improvements that need have built up service industries around little, or no, field experience. This went principal at Mine Staffing International. “A - Mauricio Montano, from around the world were coming to take place in the regulatory frame- that, all the way up to our capital mar- against all the norms that had governed lot of this stems from the fact that main- Senior Account Manager, to us as the mining space continued work and on the infrastructure side to kets, which were founded on mining,” the industry for decades as traditionally stream media does not like to cover min- Brunel to worsen, making the opportunity set unlock the true value of some of the he said. “Many Ontarians do not unit was expected that a ‘consultant role’ ing stories unless it is negative coverage. larger,” said Isser Elishis, managing deposits, according to Ben Gibbons, derstand the significance of this.” • would require 15-20 years of on-the- We are not reading stories in traditional partner and CIO of Waterton. vice president, corporate finance at ac- ground experience. Sadly, as mining media about the successes of mining and With a $1-billion fund in hand, the counting firm Collins Barrow Toronto activity continued to decline, these new- all of the progress that has occurred.” • ONTARIO MINING 2015 - 64 - Industry Explorations” Industry Explorations - 65 - ONTARIO MINING 2015 EXPERT OPINION Global Business Reports Global Business Reports INTERVIEW

What First: funding and development through just existing rail network requiring significant Alberta and Saskatchewan have not number of women and the integration one of these channels. It is unlikely that upgrades; multiple infrastructure own- Chris Stafford been as affected and have functioning, of First Nations people. The industry has Infrastructure or government or a third party will solely ers and operators and an existing port large-scale projects. Ironically, despite a made a successful transition to where fund the development and assume all at full capacity. In addition, there was a much larger supply of labor on the mar- there are many women in the industry "Bankability"? the risk, or that users are going to be complex regulatory framework and the ket, finding the right talent is still proving holding prominent positions. The new able to provide all funding for a project. government decided not to provide any difficult because we need to find candi- focus should be on engaging more peo- It is likely that a consortium-based ap- funding support. dates who not only have the right skill ple, providing equality for all, no matter proach including developers, investors These challenges were overcome set, but also the right family situation their cultural background, gender, na- Ben Gibbons, and government is required, which in through the implementation of a mul- President that will allow them to move to a new tionality or sexuality: when the industry Vice President, Corporate Finance turn demands a high level of coopera- ti-user, open-access facility owned and C.J. Stafford & Associates mining locations like Fort McMurrray, recovers, it will need more talent and Collins Barrow Toronto Infrastructure tion among parties and may also involve funded by terminal users. This model Yellowknife or Saskatchewan. resources than will be available. Advisory (CBTIA) negotiation and agreement with existing facilitated efficient infrastructure devel- infrastructure owners and operators. opment as it was: industry-owned and Given the current oversupply of talent, What is your final message? So how is the melting pot of different largely privately funded; commercially what are the prospects for young peo- The Canadian mining industry should One of the significant challenges preva- projects, financial requirements and con- sound with an open, equitable and ple to get hired? strive to improve how it can do better lent in the majority of resource plays is flicting agendas best managed? From transparent access regime agreed with In the current job market, a graduate at attracting, training and developing its the absence of necessary offsite en- the outset what is required is an overall government, the port corporation and would be well advised to look for em- workforce. We should not be consider- abling infrastructure to support new de- strategy for the consortium that takes industry; and port charges were limited ployment in the “North,” as generally ing offshore applications for semi-skilled velopments. This infrastructure is often into consideration the technical, legal, to cost recovery only. WICET and the speaking opportunities are more likely and skilled jobs before we have fully in the form of rail or port infrastructure commercial and financial aspects of the associated WIRP project is now over the farther north you go, where often exploited the training and development and in certain cases the requirements of project. This includes identifying the 80% complete, and is one of the best the pay is better and responsibilities of unemployed Canadians. To do this, the project cover multiple infrastructure project’s participants and stakeholders examples of infrastructure development greater. industry, education and government types across multiple supply chains. The and establishing an initial project gover- in the ‘new world’ regime post mining must be more creative in engaging ap- cost of developing infrastructure can im- nance structure to serve as a roadmap boom and limitless financing options. • How would you characterize the recent plicants. With the impending retirement pede a mining project from being “bank- to guide all parties through the process. evolution of the role that women play in of the “boomers” and anticipated short- able.” It also includes the development of roles the mining industry? age of talent, those companies that best The challenge is the “Chicken & Egg” and responsibilities; identifying parame- Collins Barrow Toronto Infrastructure The Canadian mining industry has some understand the needs and wants of the nature of infrastructure: A mining ters for confidentiality and information Advisory (CBTIA) is a professional infra- fine examples showing “diversity” in millennials will lead the industry in the project is not “bankable” without eco- sharing; identification of project depen- structure advisory firm providing special- How has C.J. Stafford & Associates the work place, both with the growing war for the best talent! • nomic infrastructure, but how can fund- dencies; implementation of project con- ist support and leadership, primarily with evolved in the mining sector over the ing be secured for infrastructure before trols; financial and risk allocation; initial regard to infrastructure transactions for past two years? proving the project is “bankable”? There funding requirements; establishment the resources sector. CBTIA specializes Unprecedented growth within the min- is no single or easy answer, but collab- of legal relationship; development of in amalgamating strategic, commercial, ing sector during the past ten years oration and coordination for multi-user project timelines and the identification technical, operational and regulatory ad- made talent scarce, as mining compa- developments can be a starting point. and formation of required work groups vice to ensure clients make informed nies competed to recruit and retain the In most scenarios there are multiple from technical, financial, legal and com- infrastructure decisions throughout the best employees. This came to a halt 18 developers requiring access to key in- mercial streams. development of their respective projects. months ago, causing major cutbacks, frastructure. This provides developers This has been shown to be a success- CBTIA has played leading roles in shaping stalled projects and inevitable layoffs. the opportunity to share the costs of de- ful model in the development of recent rail and port decisions throughout several The “super cycle” was over and the im- veloping the infrastructure reducing the infrastructure projects to support re- bulk commodity supply chains – influenc- pact felt industry wide, particularly with cost burden and improving its attractive- source plays. One key example of this ing regulation and policy, introducing com- service providers, including the recruit- ness to potential investors. Additionally, is the Wiggins Island Coal Export Ter- petition for rail haulage services, guiding ing business. However, C.J. Stafford if developers align themselves at the minal (WICET) and associated Wiggins infrastructure expansion decisions, fa- & Associates has experienced these beginning, they can start afresh as op- Island Rail Project (WIRP) located in cilitating operational and commercial re- cycles during the past 30 years and re- posed to ‘patching’ legacy systems that the vicinity of Gladstone, Queensland forms and optimization and driving com- mains committed to the mining indus- are intrinsically faulty through leveraging off the east coast of Australia. WICET petitive infrastructure financing solutions. try. Our expectations are not what they collective experience in design, delivery is an industry-owned model servicing Members of the team have been directly were, but we remain active. and operation. eight coal producers. Once fully opera- responsible for developing and executing Collaboration is, however, not a solution tional, it will have a capacity of 27 metric strategies for securing in excess of 250 C.J. Stafford & Associates is active in in and of itself. The challenge is how to tons per annum (mtpa). It consists of mtpa of rail access arrangements, across mining across the globe. Which juris- fund these multi-billion dollar projects. AUD$2.5 billion of private funding with over 40 resource projects and for over dictions have been the most affected There are several funding models. a total $4 billion external funding enve- 30 producers - and similarly with bulk by the crisis? Specifically, this can include a govern- lope supported by an additional $1 billion product port arrangements. In addition, From an HR perspective, Australia has ment (provincial or federal level) funding rail upgrade. This project had multiple broad international reach and networks, probably been the worst hit jurisdiction: model, third-party/investor funding, and/ challenges including: a mix of existing including as a member firm of Baker Tilly its large, low-grade open-pit operations or a user based funding model. In all miners – some requiring expansion ton- International, giving access to resources made it vulnerable to commodity prices likelihood, the development of the infra- nage, numerous junior and mid-tier ex- through its 161 member firms in 137 and the swings caused by such a down- structure is not going to rely solely on plorers seeking capacity; a constrained countries worldwide. turn. On the other hand, operations in

ONTARIO MINING 2015 - 66 - Industry Explorations Industry Explorations - 67 - ONTARIO MINING 2015 EXPERT OPINION Global Business Reports Global Business Reports INTERVIEW

ONTARIO MINING 2015 - 66 - Industry Explorations Industry Explorations - 67 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports INTERVIEW

ploration focused. Ideally, we want our supported companies financially through David Thomas strategic investments to turn into core some challenging times. Secondly, RCF Michael White investments. We pay close attention can provide in-house technical expertise, to corporate and social responsibility, which often is only available to small ensuring that companies are managed mining companies through external con- ethically. sultants. Lastly, we have a large network of seasoned industry professionals who What is RCF’s exit strategy in this sce- have relevant skills and experience to Is Ontario positioned to meet global demand for chromite? Managing Director nario and what constitutes a success? move projects forward. President and CEO The vast majority of chromite production is for stainless steel. Resource Capital Funds Our investment exits are typically IBK Capital There is a lot of chromite in the world, but geographic diversifi- (RCF) achieved through trade sales or via Is there a level of resistance on the part cation of chromite mines is needed. Chromite production is con- trades in the public markets. For RCF, of mining companies with regards to centrated in a few global clusters, and some are not doing so well an investment success is one in which private equity? in terms of guaranteeing supply: for instance, South Africa, one an adequate return for our investors has Mining companies often perceive pri- of the largest global producers, has power issues that can affect been achieved over the life of the invest- vate equity funds as debt providers. In deliverability. The industry would like to see chromite produced ment, which is typically 3 to 5 years. fact, RCF can be creative and flexible in in Ontario, a stable jurisdiction where we have discovered a one We are driven more by absolute return, developing suitable financing solutions. hundred year-plus supply. This is a fantastic opportunity presented rather than internal rate of return. Another misconception is that private by the ROF. We would not be opening a mine that will produce equity funds are vulture funds. In reality, wealth and value just for ten or twenty years. This deposit will last Does RCF have any Canadian in- we are looking for good assets managed over a hundred years. Imagine the industry and communities that vestors? by talented teams that have the ability to IBK Capital has done a number of transactions for com- will build up around that, as more metal is found. It would be great Over the years we have spoken to sev- shepherd projects through the various panies with assets outside of Canada. Is this part of a to see a fully integrated stainless steel industry here in Ontario. If eral of the Canadian pension funds that stages of development. wider trend in the industry? that is a bit too ambitious for some stakeholders, there are numer- invest in private equity. However, none IBK Capital is opportunistic in its approach to investing. ous nickel deposits that can be mined. Ontario has produced nickel are currently investors. We have a strong Will private equity remain a viable We fund experienced management teams with attractive for decades. We have the technology just south of the Ring of Fire established base of U.S. institutional in- source of funding for miners, when the projects. Investors are interested in returns and are looking to monetize these nickel deposits. Perhaps it makes sense to start vestors, some of whom have been with market picks up again? for absolute transparency and clarity as to the plan going there and advance the chromite projects later. • us since our inception. I cannot speak for our competitors, but forward. This is just as important as the economics itself. Can you provide us with a brief intro- RCF has been investing in mining for duction to RCF? RCF has invested in Ontario projects more than 15 years, through good times Can you give us a brief summary of IBK’s role within RCF was founded in 1998 as one of the through Noront and First Nickel. What is and through bad. This is all that we do. Ontario’s mining finance industry? first mining-focused private equity funds. the nature of your involvement in these We are a group of mining professionals There are a number of issues in Ontario. Looking inwardly, Since 1998, we have raised six funds, companies? who are in this for the long run. While we have let our collective passion for producing metals with the current fund being a $2 billion The quality of the asset is the most putting capital to work is more challeng- wane over the last hundred years. The majority of the pop- fund. RCF has offices in Denver, Perth, important investment criteria for RCF. ing for us when the public markets are ulation is in the south, while metals mining and processing Toronto, and Long Island, New York. We Noront’s nickel-copper-PGM project in open for raising capital, the opportunity are in the north. Funding for many projects comes from also have a London-based representative the Ring of Fire (Eagle’s Nest) fits well set is broad and deep and there are al- Bay Street but money will not do it alone. This money and we are currently opening a Santiago with our criteria. We believed in the ways great projects to invest in, regard- needs firm, reasonable commitments from stakeholders office. success of the project and remained less of where we are in the cycle. in the province to be deployed. If it cannot have this, the open-minded about infrastructure chal- money will go elsewhere. On a company level, IBK likes What is RCF’s strategy with regards to lenges. Noront is a classic RCF develop- What does your presence in Toronto say to fund programs that put the emphasis back on mining choosing new projects? ment-stage project in a stable jurisdiction about RCF’s long term commitment to in Ontario. One such program is Mining Matters, which RCF does not limit itself to a particu- and we think that with the government Ontario’s mining industry? promotes mining to students in elementary and secondary lar mineral. We tend to be opportuni- support it is going to be a significant new RCF recognizes Toronto as a global fi- schools. ty-driven and consider projects with mine in Ontario’s north. RCF considered nancial hub for the mining industry and different commodities and jurisdictions. the First Nickel deposit as a springboard understands the importance of having a How would you characterize investor interest in the Ring Since 1998, we have invested in over to build a strong base metals company. physical presence here, especially given of Fire (ROF), especially now that Cliffs Natural Resources 35 different commodities, 140 different While low nickel prices have proven the number of mining companies in has suspended their operations? mining companies and in nearly 40 dif- challenging for the operation, the man- Toronto. RCF is here for the long haul, IBK Capital has raised about $140 million for companies ferent countries. agement team has done an excellent job and we will keep working with compa- active in the ROF. The government needs to clarify the in- Our portfolio is divided into core and under the circumstances and is capable nies that have great assets and strong frastructure issue and commit to building a road. Put it on a strategic investments. Most of the core of operating additional assets. management teams to maximize the map and commit to it. Be the clear leader. Cliffs pulled out investments do not include exploration value of those assets for all stakehold- because it could not get any type of commitment from any companies, because of the size of the in- What are the advantages for mining ers. • of the major stakeholders in the region. The market values vestment that they require. Our strategic companies who choose to work with a of companies in the Ring of Fire have been crushed, but investments can be much smaller, and private equity fund such as RCF? this is an opportunity for buyers to take large stakes at very do not demand as much of our time in First of all, RCF has patience to wait to low prices. There is interest, but we need leadership and terms of management and are often ex- receive a return and we historically have commitment from the government.

ONTARIO MINING 2015 - 68 - Industry Explorations Industry Explorations - 69 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports INTERVIEW

What is the significance of Waterton’s mization bucket targets investments in listed, which is less than half the rate have had to find alternative methods, Isser Elishis owner-operator model to a mining the $50 million range. The investment Denis Frawley for the same period in 2013 and one such as debt financings, shedding non- company in which you would be size for our last two buckets depends quarter the rate for 2012.) At the mo- core assets, selling interests in core as- investing? on projects’ risk profiles. ment, there are more than 50 CPCs sets and, particularly in recent months, The owner-operator model means that have not acquired projects to selling royalties. that we have infrastructure, human How have the recent market deval- complete their qualifying transactions resources, technology and offices uations of mining firms impacted and become active. A number of these What measures can be taken to where we need to be. Unlike other Waterton’s analysis of investment have little capital remaining. address the real funding of smaller Managing Partner, firms, we are not dependent on con- opportunities? Partner CPCs have been mainly developed for exploration companies? Chief Investment Officer sultants and third parties. We are There are not a lot of quality assets Ormston List Frawley LLP the mining industry and can continue Concrete steps in the areas of infra- Waterton Global forming joint ventures with public that you can buy at distressed prices. to play an important role. However, structure improvement and invest- Resource Mgmt. and private mining companies to add When it comes to booms and busts those that continue to have capital re- ment, especially in northern regions, material value, whether by providing for commodity prices, it is not easy to main skittish in selecting projects and could help to de-risk projects and im- technical expertise to small- and medi- change your mining plan so many com- completing qualifying transactions, be- prove the prospects of the industry. um-sized projects or by structuring panies end up cutting back on devel- cause of a fear of deploying their cash Long-term measures are needed to en- deals. We can also add value when it opment and high grading their assets. on projects that may not then garner sure that the fundamentals are in place is a secondary project for a company. These valuations are based on higher positive interest from financial markets. for mineral resource exploration and In this case, Waterton can advance the commodity prices. When we look at When the market recovers, the CPCs extraction to be conducted profitably. project while the company continues what has happened over the last two with capital remaining will quickly com- We need roads, low-cost electricity to focus on its main asset. years, the valuation of a company rel- mit to projects and complete qualifying and established frameworks with First ative to where it sits today is not dis- transactions. Nations so as to reduce the extent to When setting out to develop Water- tressed. which those issues translate into risks ton’s new $1 billion fund, what in- How has the global slowdown in or challenges to the success of explo- vestor profiles where you looking for? In spite of high projections of private financings affected the types of deals ration and mining activities. If we wait When we set out in June 2013 to es- equity deals in mining, why has deal that Ormston List Frawley LLP is for the markets to recover before re- tablish the fund, our target was $750 flow been lower than expected? doing? solving infrastructure and First Nations million; however, we quickly saw that The estimates of the capital raised We have seen a dramatic decrease in issues, we could miss the next funding high quality investors approached us in private equity are incorrect. A few the number of investments made by window because those issues will re- as the mining space worsened, making firms have large funds but are looking Can you introduce us to Ormston List retail investors. Exploration companies main. • Waterton Global Resource Manage- the opportunity set larger. We settled only to buy big assets with heavy cash Frawley LLP and the services that you ment, which announced in April the with a maximum capital of $1 billion. flow in good jurisdictions, which are offer to the mining industry? closing of its new $1 billion fund for Our investors are few and from large very rare assets. At the opposite ex- Ormston List Frawley LLP is a boutique precious metals investment, is one of endowments, public pensions and sov- treme, there are very small buckets of law firm with expertise in corporate the few private equity firms exclu- ereign wealth funds from North Amer- capital with only $100 to $300 million and securities law and litigation that sively dedicated to the mining sector. ica, Europe and Asia. We deemed it to be spent judiciously over time. Deal works closely with mineral exploration Can you introduce us to the firm? appropriate to have a geographically flow has been low because the vast and mining companies. The firm was Waterton is not only one of the few diversified spread given that the com- majority of the market does not have formed in 2006 by lawyers from larger mining-focused private equity firms modity business is global. any realistic sense of its value. firms with the idea to provide legal ser- but are also one of the largest firms vices at a cost appropriate for mid-sized that focus on late-stage production Which asset profiles are you targeting Waterton has been very successful and smaller companies. Many of our assets in politically stable jurisdictions, for investment with the new fund? in raising money in a down market. clients are junior resource companies with 85% of our investments situated We are focusing primarily on gold, cop- When the public markets pick up managed from Toronto. Some have ex- in North America. The global economy per and silver for our intended deals. At again, how will this affect private ploration projects in Ontario, while oth- is getting larger and natural resources Waterton we nominally divide our port- equity? ers have them elsewhere in Canada or are scarce, making the mining space folio into four buckets of capital. One Private equity is about adding technical internationally. One of our main areas a key opportunity. Because of the in- is our financing bucket for high quality expertise and building assets outside has been helping clients with financing, dustry’s complexity, a successful min- projects, while on the opposite end of of the purview of the public market. but now we devote a lot of time to fi- ing-focused private equity firm needs the spectrum we have our bread and We expect that generalist firms that nancing transactions that are more cre- a strong evaluation team with many butter, which is either assets that are switch among commodities will leave ative, or certainly more unusual. decades of experience in order to un- in production that we can make more the sector, and we will remain a small derstand a project’s risks. Our techni- efficient or assets we can put into pro- group of private equity firms aiming to What is the role of capital pool compa- cal expertise allows us to match the duction within 12 to 24 months. The develop assets to the point that the nies (CPCs) in helping juniors to raise term of the challenge with the term other two buckets are more challeng- public markets can take them on. We capital? of the capital, without the constraint ing. You are either starting from scratch want a strong public market so that we I am not aware of a deliberate policy by of the purview of public shareholders. or taking a project over to finish permit- can do our work and then give it to the the TSX-V to discourage the formation Our private equity approach can dedi- ting and continue development. Our public markets. • of CPCs, but we do not see many new cate the sufficient amount of time and financing bucket targets investments CPCs being established. (As of May 28, capital to developing a mining asset. of about $20 million, while our opti- 2014, only four new CPCs have been

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ONTARIO MINING 2015 - 70 - Industry Explorations Industry Explorations - 71 - ONTARIO MINING 2015 Service and Supply in Sudbury: Ontario's Home for Mining's Ancillary Services

“Regionally, South America is the largest export market for Canadian mining equipment. The United States is also a significant market. There is also a lot of potential in Africa, and Australia has been a historical market for Canadian suppliers. More difficult but noteworthy markets are China and Russia, which have stronger domestic services but rely on Canadian expertise.”

- Jon Baird, Outgoing Managing Director, Canadian Association of Mining Equipment and Services for Export (CAMESE)

Image: Cementation Canada Inc. Service and Supply in Sudbury: Ontario's Home for Mining's Ancillary Services

- Jon Baird, Outgoing Managing Director, Canadian Association of Mining Equipment and Services for Export (CAMESE)

Image: Cementation Canada Inc. EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Expanding Expertise “

There is a lot of interest coming from North America, South America, South Africa, and Australia...We want to Haulage, Surveying, and Safety Services continue to deploy our technology in material transport. There are surface applications in mining, aggregates, port terminals, agriculture and other sectors that can feed into or be fed by the larger If Toronto is considered the mining fi- uses power when the train is inside or scans every 8 cm and utilizes an inte- ing companies taking an increased in- companies in Timmins make a huge rail systems. nance capital of the world, the small in the vicinity of a drive station along grated fiber optic gyro to preserve the terest in their ventilation costs. “They difference to their revenue base – di- northern Ontario town of Sudbury is the route. “We believe Rail-Veyor is azimuth of the scanner at all times. The have started to realize that it is not just versification is the key to success,” he its service and supply counterpart. more than 50% more efficient than a data can be directly imported into the blowing the air, but the power around said. - Ronald Russ, Sudbury and its surrounds are home heavy haul truck system in terms of en- mine’s 3D coordinates. “This ‘scanning the fan, the cost of the fans, and the The lack of customer diversification is President, CEO, CFO and Treasurer, to more than 1,000 mining supply and ergy usage and maintenance and 20% during decent’ approach eliminates the cost of the ducting, especially with a significant barrier to the industry’s Rail-Veyor® Technologies Global Inc. service companies worth an estimated more efficient than a conveyor sys- shadowing of data typical of stationary the prices of energy increasing,” said growth. Organizations like the Sudbury $5.6 billion to Ontario’s economy. The tem,” said Ronald Russ, Rail-Veyor’s scanning technologies,” said Everett Croteau. Area Mining Supply and Service Asso- sector employs over 25,000 people. president, CEO, CFO and treasurer. Henderson, Minewise Technology’s In an underground setting, the ability ciation are making it a priority to help These numbers may be surprising While propulsion systems are present technical manager. Using a pan-tilt- to communicate between mine work- its members increase their global pres- given Sudbury’s relative insulation in most underground and open pit zoom high-resolution color camera, ers both below and above ground is ence. “SAMSSA’s role is to stick to its from the global stage. The service and operations, trucks are still needed to companies can inspect inaccessible essential to ensuring the health and mandate of helping business become supply sector has long benefitted from move people and materials. Under- bore holes, raises, ore passes or cage safety of employees. Becker Varis is intelligent: our job is to tell people that the presence of major nickel and base ground mining operations are closed compartments. a company that provides voice, video there are new opportunities available,” metal mines in the region, and most of environments with dark, wet and abra- A number of companies in northern On- and data communication systems to said Dick DeStefano, SAMSSA’s exec- ” their business is done with Vale and sive conditions that can impact the life tario are looking at ways to improve air underground mines using a mine’s utive director. Glencore Xstrata. Yet recent volatility span of a tire. “Over the years bias quality in underground mines through leaky feeder system. “A leaky feeder According to a recent report by Export in nickel prices has demonstrated the ply tires have dominated the market, systems that monitor dust loading, air- system acts as a communication Development Canada, Ontario’s export need to export their services and ex- because of their characteristics that flow temperature and relative humidity medium; we can put Ethernet points sector is expected to grow thanks to “ pertise. withstand the abrasive conditions un- for worker heat stress. Maestro Mine anywhere along the mine,” said Albert a weaker Canadian dollar and rising Sudbury-based Rematech Industries derground,” explained Gary Foley, Ventilation developed a system called Bower, managing director at Becker demand from the United States. The designs and maintains conveyor belts director, corporate sales at Fountain Vigilante AQS™ (or Air Quality System) Varis. “Leaky feeder systems became industrial machinery market is also The safety in the industry has improved for underground mines. The company Tire. “The downside with bias ply tires that measures different parameters the primary media of communication expected to see strong growth of 7% greatly over the years. At Nickel Rim worked on the Nickel Rim conveyor is heat generation, which is an enemy such as dust loading on haulage ramps when mining at large saw a boom and this year and 13% next year. Region- for example, Cementation completed system, where they helped to design to any tire whether it is open pit or un- and gas detection technology. Mine required reliable and cost effective ally, South America is the largest ex- two shafts with no lost time injuries. a 1,700-foot flex belt that lasted the derground.” managers are then able to access that communication underground.” port market for Canadian mining equip- In the shaft sinking industry, there was life of mine and was since adopted Penguin Automated Systems Inc. was data in real time. Sudbury’s equipment manufacturers ment, followed by the United States. a philosophy of “go fever” for many by Vale and Glencore Xstrata. “On a founded by Dr. Greg Baiden, who was “There has been a lot of attention are also innovating in the types of ma- “There is also a lot of potential in Africa, years that meant you needed to take cost per ton basis, there is nothing that formerly responsible for corporate recently on diesel particulate matter terials used in an underground setting. and Australia has been a historical mar- the first blast on the date you said you beats a conveyor belt,” said Remat- mining research at Inco, now Vale. (DPM), which has been deemed as a Rezplast Manufacturing Ltd., a manu- ket for Canadian suppliers,” said Baird. would. What we do now is a pre-sinking ech’s vice president, Ivo Beljo. “It can His work at Penguin ASI involves de- carcinogenic by the World Health Or- facturer of safety showers and toilets “More difficult but noteworthy mar- audit where both the owner and the move more than any other equipment veloping remote-controlled technology ganization, and silicosis that is preva- for underground mines, uses fire resis- kets are China and Russia, which have contractor will commit to starting only and it is a one time capital cost. Our to access areas that are unsafe for lent in coal mining and many drill and tant resin instead of plastic, which can stronger domestic services but rely on when we are sure it is safe. We look at customers are starting to look at new humans. Penguin recently received a blast mines,” said Michael Gribbons, be extremely flammable. Canadian expertise.” Rematech’s vice success as an injury-free project. types of conveyors, for instance more CAD$1 million grant from the federal vice president, sales and marketing at A significant portion of Sudbury ser- president Ivo Beljo agrees that the sec- vertical ones, so we are noticing evo- government to develop a new robotic Maestro Mine Ventilation. vice and supply companies still relies tor needs to start looking at exporting lution in the equipment and increased system that will be able to enter con- The tightening of ventilation regula- on Vale and Glencore Xstrata for their its products to diversify its revenue - Roy Slack, President, demand.” fined spaces to load explosives for re- tions is encouraging companies to revenue. A company in Sudbury only base. “Many companies here were Cementation Canada Inc. While conveyor belts are the standard mote detonation. make their underground systems more dealing with Sudbury clients is de- family run businesses and felt no need form of material haulage, Sudbury’s Minewise Technology Ltd. has devel- efficient. Schauenburg Industries Ltd. pendent on the price of nickel, as Jon to talk about their work or expand out- Rail-Veyor Technologies Global Inc. be- oped a progressive scanning technique is a North Bay-based manufacturer of Baird, managing director of the Cana- side of the local spectrum. Times are lieves it has developed a superior sys- that allows for detailed surveys of ver- ventilation ducting systems. Its manag- dian Association of Mining Equipment changing now, though, and many of us tem that runs 24/7 based on rail tech- tical raises or shafts up to 1,250 m. ing director, Don Croteau, has noticed and Services for Export stated. “Even are able to spread our wings beyond nology. The Rail-Veyor system only The device captures 360 degree radial a trend over the past few years of min- those companies that work with gold Sudbury’s borders,” he said. •

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Expanding Expertise “

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Albert Bower excessive information. The main challenge is to manage it so that Minewise customers can make the best decisions with it. What is the geographic reach of Becker Varis’ products? Technology Becker Varis systems are present in most mines in Ontario and internationally. We work with both Vale and GlencoreXstrata locally and internationally. We initially partnered with distributors, but with growth Ltd. our focus shifted to more direct relations with customers who want to Managing Director source products in the local marketplace. According to global trends, Becker Varis South America could grow threefold this year, while North America will remain stable.

A 2009 study from the CANMET Mining and Mineral Sciences Lab- oratories found that the industry is reluctant to adopt new technologies. Is this assessment still true? Senior mine personnel can be reluctant to adopt new technologies; however, as a younger generation of engineers and managers move into the industry, we will see more willingness to explore and implement innovation. Becker Varis’ strategic partners, for instance, test our products in real world conditions, so that we can evaluate them Can you give us a brief introduction to Becker Varis and its outside the lab. role in the mining industry? Becker Varis’ niche has always been reliability in communica- What is your vision for Becker Varis? tions. The Varis Company was founded in 1997 in Sudbury. Becker Varis’ focus is on customizing its products and integrating Minewise Technology Ltd. has devel- In 2006, Varis was bought by Becker Mining Systems out of them into its existing product line and to become a more open-ended oped a proven progressive scanning Germany and renamed Becker Varis. The company’s roots source provider of communications. We also aim to be a turnkey solu- technique that allows for detailed stem from the coal mining industry but most of our business tion provider and to take responsibility for solving problems on site. • surveys of vertical raises or shafts up is in hard rock mining. Its mandate is to acquire new technolo- to 1250 meters. The device captures Image: Minewise Technology Ltd. gies to complement its existing product line. For example, our surface collision avoidance products came from Australia. At 360-degree radial scans every 5 cen- ENERGY DISTRIBUTION timeters and utilizes an integrated fiber the moment, at least one Becker product can be found in ev- optic gyro (FOG) to preserve the az- ery mining sector in theAUTOMATION world, and Becker’s objective is to imuth of the scanner at all times. The have all its products foundCOMMUNICATION in every mine worldwide. data can be directly imported into the TRANPORTATION mines 3D co-ordinates. This “scanning What are some of the advantages of using a Leaky Feeder during decent” approach eliminates system in an underground setting? the shadowing of data typical of sta- At the moment, the possibilities of industrial Wi-Fi are still tionary scanning technologies. limited. A leaky feeder system acts as a communication A fully controlled pan/tilt/zoom video medium;becker we can put ethernetvaris… points anywhere we along speak the your language. image is relayed to the operator at the mine. The Becker Varis Leaky Feeder is unique because it top of the raise allowing for monitoring offers voice, data, and ethernet, as• well as SMARTCOM other complemen Leaky- Feeder System the survey process as well as providing tary technologies. • Voice, Data and Video ENERGY DISTRIBUTION a “depth overlaid” video recording of AUTOMATION the overall raise condition. Ample light- How is a Becker Varis communications system priced in COMMUNICATION • WLAN High Speed Data TRANPORTATIONSolutions ing is included to enhance the video relation to its competitors? The pricing range of a Becker Varis• system RFID is cheaperTagging on a and Tracking System quality and wall definition. The combi- becker varis… we speak your language. nation of the two datasets provide for a per-kilometer basis because it uses• fewer Collision active components. Avoidance System comprehensive analysis of raise/shaft We space our amplifiers 500 meters (m) apart, whereas our • SMARTCOM Leaky Feeder System condition etc. and provides a base line competitors do 350 m. • SMARTBLAST Remote Central• Voice, Blasting Data and Video System of “as built” or “as is” status never be- • WLAN High Speed Data Solutions fore achievable. What is the added value of Becker Varis’ products with • RFID Tagging and Tracking System regard to safety, productivity and efficiency? • Collision Avoidance System The skid mounted long-range winch • SMARTBLAST Remote Central Blasting System module is easily deployable to the site Becker Varis stands out with regards to safety, productivity and includes a precision speed con- and engineering principles. For instance, our system has the troller to facilitate smooth decent. The widest bandwidth, which results in less equipment required unit is completely self-contained and underground compared to competing systems. Fewer active SMART UNDERGROUNDSMART UNDERGROUNDCOMMUNICATION COMMUNICATION has ample battery power for trouble components on the ground reduce the likelihood of a problem 705-674-8111 | www.varismine.com 705-674-8111 | www.varismine.com free operation. • or damage. Customers need to receive information, but not

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DR: We used the Minecat MC100 as the had any layoffs. We have expanded our South during insulation? Daryl Rautiainen, basis for the NV100, which is suited for customer base and have sold a few fleet Ivo Beljo For Nickel Rim, we worked together with engineering companies and narrow-vein operations because it is 10 orders to new customers. used the same conveyor system at the Thayer-Lindsley Mine years Keith King & inches more narrow than the MC100. ago. Our recommended belt lasted the life of the mine and was ex- We also have a truck line called the What are some of the upcoming objec- ceptionally resilient. This was an obvious choice as everyone shared Marcel Demers UT99 that has gained traction over the tives for Industrial Fabrication? the history of the mine and the product. The 1,700-foot Nickel Rim years. The truck market is highly com- DR: The last 12 to 24 months has been belt was the first Usflex belt that we sold in the area, and Vale and petitive but our direction was to build a whirlwind for Industrial Fabrication: we GlencoreXstrata later adopted it. DR: Vice President a purpose-built truck designed specif- just moved into a new, larger facility in Vice President KK: General Manager ically for the mines with heavy-duty Sudbury. We are growing in new mar- Rematech How do conveyor belts compare to other forms of bulk material MD: Sales Manager Industries haulage? Industrial Fabrication components that were previously used kets, including the United States, and On a cost per ton basis, nothing beats a conveyor belt. It can move Inc. Resource Mgmt. in off-highway vehicles. We are also re- increasing our customer base globally. leasing a new line of Minecat forklifts in more than any other equipment and is a one-time capital cost. Our 2014. Can you give us details of Minecat’s customers are starting to look at new types of conveyors, for instance MD: In 2013 we delivered an MC100 new battery-powered utility vehicle? more vertical ones, so there is some evolution there. with a center mount aerial boom that DR: The Minecat UT150-eMV, Elec- had a protective canopy for the opera- tric Mining Vehicle is the safest under- In Sudbury two major mines dominate the industry, but the most tor, which means that whenever he is at ground utility vehicle in the industry. The successful service companies have diversified their business inter- the face, he is working under a protec- running gear is the same as its diesel nationally. How was Rematech able to achieve this? tive canopy. Today’s mining companies MInecat UT 99 counterpart: industrial The mining world is fairly small and our reputation has been spread are always looking at ways to make it as proven axles with enclosed fail safe wet Can you give us a brief introduction to Rematech and its primarily through word of mouth. The advantages of working with two safe as possible for the operators, so we disc brakes, suspension featuring gas history in northern Ontario? major clients is getting to know them well and receiving abundant work closely with our clients to design shocks and heavy duty springs, provid- Rematech was founded in 1964. We brought cold vulcaniz- direct feedback. Roughly 80% of local companies rely on Sudbury for units that fit their requirements. ing the operator and passengers with ing technology from Germany and expanded in this area by their client base, which can be a pitfall. Many felt no need to talk about a smooth ride in the roughest of condi- splicing and installing conveyor belts and the whole conveyor their work or expand internationally. Times are changing, though, and Sudbury mining suppliers have tradi- tions. The Minecat EDS (Electric Drive system. We also do rubber lining for engineering and mining thanks to organizations like the Sudbury Area Mining Supply and Ser- DR tionally grown through their work with System) consists of a PMAC brushless companies that we ship globally. Approximately 20 years ago, vice Association, many are moving beyond Sudbury. • two major mining companies. How traction motor for superior efficiency. we started working in compression molding. Our primary fo- have you been able to diversify your Motors and controller are sealed to an cus, however, is conveyor belt sales and service, and we pro- Can you give us a brief introduction to client base? IP67 rating allowing the UT150-eMV to vide solutions to any kind of challenges in the rubber-based Industrial Fabrication Inc. and its role in DR: In the beginning around 80% of our safely operate in the mines most severe domain. Our main clients are Vale, GlencoreXstrata, Goldcorp, Sudbury’s mining industry? sales came from Falconbridge and Inco, conditions. The battery pack uses envi- Barrick Gold, and most of the major Ontario-based mining and DR: Industrial Fabrication Inc. was but now they represent less than 25% ronmentally friendly Lithium Ion Phos- EPCM companies. Engineering firms often ship our products founded at the end of 1999 as a sin- of our business. Our top ten customers phate cells, which are 100% recyclable. globally. We recently completed a project in British Columbia gle-product company. We started with are around 65% of our business, and The battery assembly resides under that required about 20,000 feet of belt, which required a safe the Mine Mule, which was a small, cage- Vale and Glencore Xstrata are still in our the hood in place of the diesel engine plan to carefully splice and install. able utility vehicle. In 2002 we acquired top ten. We have worked very hard to and the onboard charger in place of the Northern Consolidated Equipment and set up our dealer network and additional fuel tank. The diesel UT 99 and electric What are your manufacturing capabilities? its Minecat product line. The Minecat sales get outside of Sudbury. UT150-eMV weigh the same and have We have approximately 50 full time employees and around started in the early 1980s as a modified MD: Our local customers really support the same available rear cargo space al- 30 part time employees who are highly specialized. We do tractor vehicle for use in mines. Indus- us so that when we do come up with lowing for many configurations of the our own in-house training, about 120 hours a year for each trial Fabrication decided to re-engineer new products, they are the first people vehicle. The main difference being the employee. Costs are higher than overseas, but clients who the product as a purpose-built vehicle who are interested. For us, that is very electric drivetrain produces ZERO emis- have tried cheaper alternatives have returned to us because for mining applications. Whereas the important: we want to prove it and test sions for a cleaner healthier workplace they prefer value quality and durability. frame used to be one component, now it in Ontario and then expand. in comparison to its diesel counterpart. Minecat has a purpose-designed frame Industrial Fabrication is working upon What are some of the advantages of rubber as opposed to where the components are modular that As the mining industry struggles with making available EMV solutions to all its alternative materials? can be removed easier for serviceabil- cost control, how can you as a manu- equipment line. • In certain situations rubber can outperform other materials, ity. We can also add components to the facturer help in this regard? but the key to every abrasion and corrosion resistant prod- front and back of the vehicle: there are KK: We offer exchange programs on uct is using the one best suited to the particular application. around 50 different configurations avail- our components, which means that our For example in flotation cells, urethane would completely able for the Minecat. The rolling chassis customers do not always have to pay dissolve the steel inside, whereas the rubber sticks perfectly of the machine is standard, but we add for new parts. Our service department onto the metal. Urethane is very strong on its own but when it components when the machine is sold will also audit machines to find poten- is adhered it becomes less tough. In some cases the rebound based on the customer’s unique order. tial problem and identify where we can of rubber is worth more than the cut and gauge resistance of help. Our orders were down last year urethane. How have you used that knowledge to about 10% but that is not unique to build your current product line? Industrial Fabrication, but we have not Can you talk to us about the work that you did on Nickel Rim

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this information to be able to inform our The technology has achieved more than Meeting customers how the machine is running 30% greater productivity compared to and when it might need maintenance.” conventional drilling and has reduced the Growing “Even though Ontario has high-qual- duration of some customers’ drilling pro- “ ity manufacturing, the industry needs grams by up to 50%, according to Alain Challenges to work on promoting our products to Laplante, CFO of Orbit Garant. “In turn, compete internationally,” said Ricky this increased efficiency means that far The difference is that other companies Lemieux, president of Sudbury-based fewer consumables are being used and integrate analogue components and Heavy Equipment, Drilling, and Rock-Tech Ltd., a manufacturer of rig components are lasting longer. An- PLC’s in conjunction with a software Shaft Sinking equipment for underground mining ap- other benefit is that our customers can package whereas Maestro is a plications. monitor our progress, view core sam- manufacturer of the complete air quality Few would disagree that the compa- ples, and access detailed performance station that can be integrated into any nies worst hit by the commodity price reports on demand, all via the internet.” system due to its open communications downturn are drilling contractors. With Shaft sinking is the most technically chal- protocols. We work with other Ontario manufacturers and distributors bury focuses on truck and shovel exploration having declined considerably lenging aspects of underground mine ventilation companies but 95% of of heavy equipment are facing major maintenance. “B&D Manufacturing in Ontario since 2012, very few rigs are development, and Ontario is home to our business is directly with mining challenges in the mining sector, not the was founded in 1980 by two young turning and the competition for new con- two of the deepest mines in the world: companies. In reality, ventilation-on- least of which is increased competition entrepreneurs who invented a porta- tracts is fierce. If and when drilling ac- Glencore Xstrata’s Kidd Creek and Vale’s demand is stalled, because the price of for customers. Manufacturing of any ble align boring machine,” said Andre tivity picks up, drilling contractors have Creighton. Building a shaft at such depths the package…has not caught up to the sort in Ontario comes with high costs Ruest, general manager of B&D Man- had to slash their prices so low that it which guaranties the safety of work- reality of the cost constraints facing the for labor and energy, putting pressure on ufacturing. “Before then, underground will be a long time before profits return ers requires a creative approach. DMC mining industry. internal profit margins. For companies to mining equipment had to be disassem- to healthy levels. Mining Services, a contractor based in prosper, they must figure out a way to bled, brought to surface and transported Drillers have to remain focused on what Toronto, has been tasked with sinking design equipment to suit the evolving to an outside machine shop for repairs. they can control. For Orbit Garant Drilling the shaft at KGHM’s Victoria nickel mine - Michael Gribbons, Vice President, trends of the mining industry. With our flagship Portable Align Boring Inc., this means investing in new com- in Sudbury. At its deepest point, the Vic- Sales and Marketing, Safety is the most integral component Machine, technicians do maintenance puterized drilling technology that could toria project ore body is located nearly Maestro Mine Ventilation in the design process of heavy mining work right on-site, reducing downtime save junior companies hundreds of thou- 2,600 m underground. The depth and equipment. In Ontario, where under- and associated costs, and eliminating sands of dollars once exploration activity nature of the rock stressing presents a ground mines run over 2 km deep, this safety concerns.” rebounds. significant challenge. “DMC will sink one is even more prevalent. MacLean Engi- Another trend that is appearing in equip- exploration shaft to 1,000 m to better un- neering’s Series 900 Scissor Bolter was ment manufacturing is energy effi- derstand the grades and concentration designed with this in mind. “Due to the ciency, specifically as a result of higher of minerals,” said Bill Shaver, president fact that the ore bodies in the Canadian fuel costs and the need to reduce emis- and CEO of DMC. “From there, the mine Shield are some of the deepest in the sions at site. will be developed at 1,200 mt/day. The ” world and are mined with bigger open- An Ontario-based manufacturer, Indus- “ long-term expectation is that the second ings headings at depth, safety was our trial Fabrication Inc., just released its shaft will be sunk relatively adjacent and primary concern when designing the Minecat UT150-eMV, the industry’s first Telematics, or the ability to track the it will go down to 2,200 m.” Challenges in Ontario are not always unit,” said Don MacLean, founder and purpose-built electric vehicle for hard equipment in real time, is the biggest Unsurprisingly, Ontario contractors have related to the depth of the ore body. In chairman of MacLean Engineering. In rock mining. “The Minecat EDS (Elec- trend in the heavy equipment sector. developed a number of innovative tech- reviving the former Totten Nickel mine, 2011, the company delivered its 300th tric Drive System) consists of a PMAC Every Volvo machine we buy now nologies that have been exported to Cementation Canada Inc. was faced unit to Goldcorp’s Musselwhite mine in brushless traction motor for superior comes with a CareTrack system that other parts of the world. “DMC is the with the task of dewatering the histori- Ontario. efficiency,” said Daryl Rautiainen, In- can feed maintenance and product first contractor to use our patented Long cal shaft. The company was contracted MacLean sees equipment becoming dustrial Fabrication’s vice president. information to us. Strongco can utilize Round Jumbo technology in shaft sink- to determine whether to build a new ac- bigger and more powerful as under- The battery pack uses environmentally this information to be able to inform our ing where we were blasting rounds up cess point or use the existing one. “Vale ground mines must become more pro- friendly Lithium Ion Phosphate cells that customers how the machine is running to 5 m long; it was employed at Falcon- chose to upgrade the existing access, ductive. “Whereas 15-ton trucks used are 100% recyclable. and when it might need maintenance. bridge’s Craig mine in the 1990s,” said which required less capital but was to be the norm, now we are seeing 60 For Strongco Corp., a Toronto-based The next step will be to combine SAP DMC’s Shaver. “Today, we are sinking more risky,” said Roy Slack, president of tonners as the norm,” he said. “At the distributor of surface mining equipment, with the CareTrack system to better two shafts in Saskatchewan for BHP Bil- Cementation Canada. “The original ap- same time, speed is of the essence as telematics, or the ability to track the manage this data. liton using shaft boring roadheader (SBR) proach was to look at dewatering pumps the distances from the shaft or surface equipment in real time, is the biggest for the first time anywhere in the world.” within the shaft, but we were able to use to the workplace are getting longer. We trend right now in the heavy equipment DMC is hoping that this SBR technology a vent raise to dewater it that allowed us adjust our product development based sector. The company is the largest Volvo - Robert Dryburgh, President and CEO, will be able to go nearly twice as fast as to do work in the shaft itself.” on the needs of our customers, who are equipment dealer in North America. “Ev- Strongco Corp. actual technology. “Shafts are usually Ultimately, safety is the key concern for now telling us that they want to increase ery Volvo machine we buy now comes sunk at the rate of 3 m/day. This would shaft sinkers. “The safety has improved the amount of mt moved per shift and in with a CareTrack system that can feed be a tremendous leap in shaft sinking, dramatically over the years, and we are doing so will need our utility vehicles to maintenance and product information because the speed of sinking has not now sinking shafts with barely any ac- service larger openings.” to us,” said Bob Dryburgh, Strongco’s changed significantly in the past thirty cidents and zero fatalities,” said DMC’s B&D Manufacturing Inc. out of Sud- president and CEO. “Strongco can utilize years,” said Shaver. Shaver. •

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was becoming a commodity in the bilizing year, rather than a time to ac- In 2011, MacLean delivered its 300th time, speed is of the essence, as the Andrew Boushy minds of many clients. Understandably, tively chase growth, which meant Don MacLean & production Series 900 Scissor Bolter distances from the shaft or surface to owners felt they could manage costs more study work as opposed to major to Goldcorp’s Musselwhite mine. What the workplace are getting longer. So, better by doing the project manage- projects. Instead of walking away from Alicia Woods is the significance of the Scissor Bolter we are developing our utility vehicles to ment themselves. Ausenco’s vision projects outside of our capabilities, to MacLean’s product line? service larger opening and increase the with the Ontario office was to reestab- we partner with other consultants and DM: The Series 900 Scissor Bolter is amount of tons moved per shift. lish the EPCM model as an engi- create project synergies within our celebrating its 30th anniversary and is AW: One trend is more customers neer-constructor, not an engineer con- offerings and for our clients. The “re- the best of MacLean’s paradigm chang- asking us to design products with er- Vice President and General Manager, sultant. As a company with Australian imbursable” business of consulting DM: Chairman ing products. The Scissor Bolter is the gonomics in mind. The increased focus Minerals & Metals roots, we tend to be less risk-averse lends itself to “an hour worked, an hour AW: Director of Sales, North America only product that offers semi-mecha- on worker health and safety extends to Ausenco than our North American peers. We are paid.” However, our clients’ view is MacLean Engineering nized ground support with the ability operator comfort, and MacLean is now focused on building solutions whereas that is a competing incentive because to change the type of rock bolt by the designing products with this in mind. many companies can be overly con- it does not tie anyone to the outcome. operator changing the dolly. The Bolter cerned with selling services. When We need to break that cycle so that en- was first developed for International What are the main strategic objectives major projects go over budget and suf- gineering work is not viewed as just a Nickel Company (Inco, now Vale) with for MacLean going forward? fer cost overruns, it affects the entire commodity. input from their management, ground AW: MacLean aims to expand its busi- industry. Everybody from investors to support department, mines research, ness in North America by opening engineers to operators needs to be What are the main opportunities that line supervision, mechanical and oper- branches in underserviced areas in committed to a successful mining oper- you envision for Ausenco in Ontario? ations people. Western Canada and the United States. ation rather than their specific expertise Ausenco has not yet been involved in We already have pieces of equipment within the process. a big mining project in Ontario. Most What trends are appearing in the operating and contractors using our of our major projects in Canada have industry that might affect MacLean’s equipment in the United States. For This sentiment is in line with the trend been in British Columbia or handled product development? example, in Alaska, MacLean partnered we are seeing on major projects with by our Vancouver office. We are the DM: Equipment is becoming bigger with CMI to work as our distributor. In capital cost overruns and delayed new kid on the block and are trying to and more powerful as underground certain areas, it makes sense to partner timelines. In this scenario, how do we leverage our global mining expertise in mines must become more produc- with a company that is local, who un- measure accountability? Eastern Canada in conjunction with our tive. Whereas fifteen-ton trucks used derstands the customers and are more Ausenco’s preference is to become Burlington and Montreal offices. There to be the norm, now we are seeing familiar with the market dynamics in involved and committed to the project are a few potential projects in Ontario, 60-tonners as the norm. At the same the region. • This is the first time GBR has met early in the study phase. This allows us but most of our business is driven from Can you give us a brief introduction to Ausenco in Ontario. Can you give us to best influence project costs as the Toronto-based mining companies. MacLean Engineering and its relation- a brief background on your strategy figures in the bankable feasibility study Most of our Ontario-based operational ship to the mining industry? within the province? are typically what the investors have work is technical support, but Toronto’s AW: MacLean Engineering is a fami- Ausenco has been present in Ontario locked on to for financial success. We primary value proposition is to cham- ly-owned company that has been in the for many years, but in 2010 we intro- also offer clients an EPCM-EPC con- pion our global capability and technical equipment business for over 40 years. duced our expertise in minerals and tract conversion option where we work expertise. The company provides equipment for metals to the Ontario based mining to establish the maximum number they a wide range of mining applications. market. During that time, we began can expect upfront – a worst-case sce- Where are you seeing the most growth We provide service and support equip- working with Royal Nickel Corporation nario – and then collectively work to es- for Ausenco’s services on a global ment to mining operations, such as on their Dumont Project and using that tablish a low cost fit for purpose design level? scissor lifts, boom trucks, anfo loaders, experience decided to set up a perma- during the subsequent design stages. There is a lot of work happening in emulsion loaders and water trucks. nent presence in Toronto at the end of When everyone is satisfied with the northern Africa, which is handled by On the support side, we manufac- 2011. Our presence in Ontario took an- final design and approach, we convert our Montreal, Perth and Johannesburg ture shotcrete sprayers, transmixers, other jump when we started to support the balance of project spend to a lump offices. We are actively engaged in Tur- and vehicles for ore flow facilitation. Hudbay’s Constancia project (in Peru) sum (EPC) number to provide the client key and Eastern European regions like MacLean’s equipment can be found in conjunction with Ausenco’s other of- cost, scope and schedule certainty. An Bulgaria and Serbia. We are also work- in operation across the globe. Sudbury fices in Vancouver, Brisbane and Lima. example of a successful implementa- ing to establish a regional presence in is the base for sales and support with For this project, we focused on process tion of this model is Ausenco’s work at Mexico. We are already well positioned primary engineering and assembly lo- plant design, which can be upward of Barrick’s Lumwana project in Zambia. in Chile, Peru and Brazil, which have cated in Collingwood and Owen Sound, 40% to 50% of the initial project capital. It is considered one of the lowest-cost tremendous potential for growth. ON. Recently an 84,000-square foot mines in the world. How would you like to position distribution facility was established Where did you feel you could add Ausenco’s Ontario office in the future? in Barrie dedicated to the aftermarket value to the Ontario marketplace? Given the downturn in mineral com- We strive to have open doors and be as support of our global customers. The The traditional EPCM-client model was modities, how has Ausenco’s exposure close to the initial plan as early as possi- company has branches located in re- starting to become fractured. There to the industry been affected? ble, in order to influence cost, schedule gions such as Peru, Mexico, Australia were no “one-stop shops” anymore Ausenco weathered the worst of 2013 and construction. Ausenco’s Toronto and South Africa, and sales and service including separation from the procure- due to its collaboration with its global office has a big role to play in our global dealers handling other strategic mining ment and construction. Engineering offices. Strategically, 2013 was a sta- operation. • areas.

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ufacture our own custom drill rigs to crease productivity, while less experi- tires within limited shop space. The Super Éric Alexandre & meet specific customer requirements, enced drillers can move up the learning Andre Ruest Jack impacted workplace safety by being which allows us to deploy quickly and curve faster compared to conventional capable of lifting and securely balancing Alain Laplante cost-effectively. We can control qual- rigs. We have achieved more than 30 haulage trucks. This is the only existing ity and manufacture a custom drill rig percent greater productivity compared certified two-point lift Jacking System for in three to four weeks at a fraction of to conventional drilling and reduced the 300 to 400 ton trucks. Our remote-con- the cost that the large manufacturers duration of some customers’ drilling trolled Wheeled Multi Handler with its charge. programs by up to 50 percent. In turn, several attachments is specially designed EA: President and CEO this increased efficiency means that General Manager and manufactured to improve safety and AL: Vice-President and CFO Can you give us an example of a far fewer consumables are being used B&D Manufacturing reduce turnaround time on haul truck Orbit Garant Drilling project where the competitive advan- and rig components are lasting longer. wheel motors and other component re- tage of your vertical integration paid Our customers can also monitor our pairs. And, our Swing Shaft Changer is an off? progress, view core samples, and ac- easy, fast and safe way to replace and ser- AL: We designed and built a number of cess detailed performance reports vice the swing shafts on P&H 2300, 2800 custom drill rigs for projects in Ontario’s on demand via the internet. Further, and 4100 shovels. These shovels can load Ring of Fire, where due to the lack of the new technology improves worker up a haulage truck every 90 seconds, de- roads, the rigs had to fit in a certain type safety. creasing downtime from 12 hours to one, of aircraft. We adapted the size of the and result in huge savings. rigs and their suitability for the terrain. What markets outside of Canada rep- Because everything was designed and resent the greatest growth opportunity What is B&D’s approach to developing built in-house, we had a very quick turn- for Orbit Garant? new products? around. Another example is a bid that AL: Over the past five years, more than B&D Manufacturing traditionally invests Orbit Garant participated in for a project 85% of our revenue was generated about $2 million annually on new product in Nunavut. According to the tender, from projects in Canada. We knew that development. Our R&D team has formed we had to build and ship eight drill rigs we would have to diversify geograph- strategic alliances with major industry from the port of Montreal to Nunavut ically to keep growing. While we have players. We design, test and manufacture AL within two months and we were able had international market exposure in “assembly tooling” for sale to Komatsu to meet this requirement. We needed Mexico, Guyana and the United States, mining distributors and customers. B&D How has Orbit Garant Drilling (Orbit to reduce the water consumption of our we have identified two new key inter- Can you give us a brief introduction to recently signed a licensing agreement Garant) been affected by the global drill rigs from 25 cubic meters per day national markets for our near term ex- B&D Manufacturing? with Komatsu America relative to certain slowdown in mining activity? down to eight, due to water-use regu- pansion – West Africa and Chile. B&D Manufacturing was founded in 1980 intellectual property for that specific pur- EA: Over the past five quarters, our fi- lations in the area. So, we designed a EA: We made a strategic acquisition by two young entrepreneurs who invented pose. nancial results have been negatively im- custom water recirculation and filtering of Lantech Drilling Services at the end a portable align boring machine. Before pacted by the slowdown. It has affected system that reduced our water con- of 2010 to establish ourselves in West then, underground mining equipment had How have you increased your focus on the entire drilling services industry. The sumption down to three cubic meters Africa and recently opened a new office to be disassembled and transported to an the safety and environmental aspects of amount of drilling activity has been sub- per day. Our custom system has the in Chile and shipped two drill rigs down outside machine shop for repairs. With our heavy equipment? stantially reduced, drill utilization rates added benefit of reducing energy con- there. We also decided to diversify in flagship Portable Align Boring Machine, Zero harm is our number one priority in are down and service providers are sumption, as the recirculated water terms of the minerals that we are ac- technicians do maintenance work right developing new equipment or in field experiencing pricing pressure. Though, does not have to be heated as much tive drilling for. Being based in Val-d’Or, on customer site, reducing downtime and services. We thoroughly test and engi- we have experienced weak market prior to being re-used in the drill hole, and with offices and facilities in Sud- associated costs, and eliminating safety neer-certify our products in response to conditions in the past and we know that following filtration. Thus, we were able bury, we have always been very active concerns. In 2001, the company acquired industry’s growing demand for improved conditions can change rapidly. We re- to recycle water and save more money in gold. Chile allows us to diversify into a fabrication shop, and our range of offer- safety, efficiencies and productivity. Our main focused on what we can control, for our client. base metals while the Lantech acqui- ings began to diversify and focus more on workshop recently achieved a milestone – including disciplined expense manage- sition provides expertise in iron ore surface mining equipment. By 2011, 80 one million man-hours worked with no lost ment, retaining skilled employees and What was the reason behind devel- drilling and in the Labrador Trough right percent of revenues were generated in time. Our facilities include solar walls, re- maintaining our focus on driller produc- oping your own computerized drilling here in Canada. Canada. Today, it is closer to 50-50 and cycling water and utilizing high-efficiency tivity, health and safety, innovation and technology? growing globally in South America, Africa, lighting. market opportunities. AL: In 2009 there was a lack of experi- Where would you like to see the com- and in our newest territory, Australia. Our enced drillers and we saw an opportu- pany positioned in the next 12 to 24 sales have doubled every five years. Will B&D be able to continue its aggres- How is Orbit Garant positioned to take nity to develop a technology that would months? sive grow? the advantage of increased demand enable us to train our junior drillers EA: We would like to see sustained Could you describe B&D’s key products Our sales model is a unique combination for drilling services when the market more rapidly, while maintaining our high demand for drilling services pick up in and services? of sales professionals and distributors, picks up again? productivity levels. We therefore devel- Canada and abroad. As market condi- We focus on truck and shovel mainte- who have a good handle on the pulse of AL: The mining industry is cyclical. We oped our own computerized control and tions improve both domestically and in- nance for surface mining applications but industry, and is conducive to growth. Next are managing inventory levels and cash monitoring technology. In utilizing this ternationally, we would like to move to- also support heavy equipment operating year, we anticipate an 18 to 20 percent in- expenses and preparing for the next new technology, we achieve improved wards a revenue mix of approximately underground. Much of what B&D devel- crease in global sales and will expand and upswing. Our vertically integrated man- accuracy and consistency of results, 75% from Canada and 25% from inter- ops is unique. The Tire Handler Station invest in additional human resources and ufacturing operations enable us to man- enabling our experienced drillers to in- national projects. • safely handles and manipulates haul truck R&D. •

ONTARIO MINING 2015 - 84 - Industry Explorations Industry Explorations - 85 - INTERVIEW Global Business Reports Global Business Reports INTERVIEW

William (Bill) Shaver

President and CEO Can you give us a brief introduction to in shaft sinking where we were blasting How challenging is it for DMC to owner-operator model? sitioned into a mining company as well DMC Mining Services DMC Mining Services? rounds up to 5 m long; it was employed recruit and retain a skilled workforce, In addition to the specialized expertise as a contractor, which is where our fu- DMC is a mining contracting business at Falconbridge’s Craig mine in Ontario especially with the highly technical and experience of contractors, one of ture lies. We want to move back to the that was founded in 1980 under its in the 1990s. Today, we are sinking two nature of your work? the advantages of having a contractor equity side of the business. In this type original name Dynatec Corporation. We shafts in Saskatchewan for BHP Billiton We look for young engineers and tech- as the operator is that they are bound of cooperation we would assume part provide services to the mining industry using Shaft Boring Roadheaders (SBR) nical graduates, involving them in our by the proposed budgets and sched- of the project risk. We had a significant primarily in the field of construction of for the first time anywhere in the world. daily operations and teaching them ule and can be held accountable if they share in a project in Madagascar and new or existing mines. DMC also acts There are no people at the bottom of the what we know. We have been doing fail to stick to the original plan. One of understand the risks associated with as an operator at various projects and shaft during excavation, which is signif- a better job in attracting young men the problems that mining companies building mines. • has been equity owners as well. Since icant because workers are not exposed and women over the past couple of encounter, especially if they have very 2012, DMC Mining Services has been to the risk of serious accidents from the years. Young people today are very rich bodies, is that they find opera- wholly owned by KGHM International. proximity of heavy equipment. We are well trained; we see a positive trend in tional costs increase from year to year, DMC is just starting KGHM’s Victoria using a combination of roadheader and hiring new talent. These young people whereas a contractor is obliged to stick nickel project in Sudbury, preparing to tunnel boring technology to do the work have the opportunity to learn from our to the price and the plan. sink an exploration shaft. in a totally different way. seasoned veterans. The main challenge is still to attract people to work in re- What are some of the main areas of DMC Mining Services has developed How will the implementation of SBR mote areas. growth for DMC over the near-term? expertise in shaft sinking. How has technology improve the efficiency of The focus for DMC over the years has the company cultivated this particular shaft sinking? What are the advantages of staying been in North America. Previously, we niche? One of the challenges of being an in- with contract miners as opposed to an were strictly a contractor, but we tran- DMC has a long history of sinking shafts novator is that we are still at the early that includes the Macassa mine, which stages of understanding the cost impact was the deepest single-lift mineshaft of our technology. We are hoping that in the Western Hemisphere when we this technology will be able to go nearly completed it in 1986. While the busi- twice as fast as the technology that has ness has been cyclical, it picked up been used up to now. Shafts are usu- significantly in the late 2000s. By 2013 ally sunk at the rate of three meters per we were working on nine shafts and in day. This would be a tremendous leap 2014 on six shafts. Shaft sinking is tech- in shaft sinking, because the speed of nically challenging and it takes a good sinking has not changed significantly in hard-working team to perform this task. the past thirty years. It can also be a hazardous job. Safety has improved dramatically over the What role is DMC playing at KGHM’s years, and we are now sinking shafts Victoria nickel project in Sudbury? with barely any accidents and zero fa- The Victoria project is an orebody with talities. Training and technology have about 15,000 million metric tons of ore, evolved dramatically and continues to and the top of the ore is located 3,000 do so drawing on employing new ad- feet underground with the deepest vancements and research. points at around 8,500 feet. The depth and nature of the rock stressing presents Given Ontario’s long history in hard rock a significant challenge. DMC will sink underground mining, what has been one exploration shaft to 1,000 meters your experience in the province and are (m) to better understand the grades and you able to use this experience in other concentration of minerals. From there, parts of the world? the mine will be developed at 1,200 mt There is a lot of technology that we have per day (mt/d). The long-term expecta- developed in Canada over the years and tion is that the second shaft will be sunk exported to other parts of the world. relatively adjacent and it will go down to DMC is the first contractor to use our 2,200 m, and the mine will be developed patented Long Round Jumbo technology to its full scale at 3,500 mt/d.

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William (Bill) Shaver

ONTARIO MINING 2015 - 86 - Industry Explorations Industry Explorations - 87 - ONTARIO MINING 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

The Added Edge

Consulting and Technology

A hot topic at 2014’s Prospectors and Making mines more efficient: a Implementing IT in the quest for integration and management consulting Developers Association of Canada con- productivity analysis profitability company based in Toronto. The com- ference in Toronto was how difficult it pany has worked with Strongco and St had become to build a mine on time and Globally, mining companies are bring- In the midst of a commodities downturn, Andrew Goldfields to implement SAP on budget. Mining analyst Christopher ing new mines into production that are mining companies are looking to big data into their operations. “Their exposure Haubrich presented research showing low-grade and high-tonnage, putting in- to help them increase profitability. While to what is happening internally will keep that capital cost overruns in the sector creased strain on profitability. Ontario’s a recent Accenture survey of mining improving as they gain a better under- have averaged between 20% and 60% producers are also dealing with high en- executives showed that 25% of them standing of reporting and information since 1965. What is surprising, how- ergy costs in comparison to the rest of had at least doubled their overall digital analysis,” said Rory Friedman, vice-pres- ever, is that in his analysis of 50 mines Canada. There is a need for technologies investment, there is still a degree of ident operations. Software giant IBM is built between 2005-2013, only two of the that can assist with energy reduction uncertainty about what these software also investing in mining with a number commonly cited reasons for capital cost across the entire mining value chain. tools can do. of enterprise resource planning products overruns – commodity market “heat” Emerson, a diversified global manufac- Centric Mining Systems is a Sud- designed for the industry. • and project quality – were statistically turing and technology company, is de- bury-based company that developed significant. Most of the reasons cited by voting its resources to help Ontario’s software designed to collect metrics mining companies for cost overruns had miners tackle the challenge of energy related to the extraction, conveyance nothing to do with whether a mine would efficiency. Through its product umbrella and processing of ore. These metrics be built on time and on budget. of over 70 brands, the company offers are then transformed into Key Perfor- This leaves a grey area between EPCM products that control energy usage and mance Indicators (KPI’s) and delivered companies and their clients as to who is monitor equipment. “In the shaft of the to decision makers. “We see that there responsible for project delays and bud- mine, industrial LED lighting emits less are three kinds of KPIs: one you cannot “ get blowouts. “When major projects are heat than a conventional incandescent see because you are unable to compile Globalstar’s technology is called CDMA going over budget it affects the entire in- lighting system and is much more ener- the data efficiently and effectively, one technology, which was the original dustry,” said Andrew Boushy, vice pres- gy-efficient. On a SAG mill, companies that is incorrect but accepted because cell phone technology. We are also in ident and general manager, minerals and use Emerson Process Management’s we have nothing better, and one that the upgrade phase for our on-ground metals at Ausenco Engineering Canada CSI Technology – ‘machinery health you do trust and accept despite a lack systems, and within the next two years Inc. monitoring systems’ – as a predictive of accountability in the data,” said Chris we are putting in 3G cell phone style According to Jan Kwak, managing direc- diagnostic tool for machinery manage- Novak, Centric’s CEO. “This would be infrastructure that will allow us to bring tor, mining and mineral processing at ment,” said Thomas Cleland, manager, unacceptable in any other business. Our in new products such as touch display Hatch Ltd., mining companies are looking business development at Emerson approach brings opportunity with ac- phones and smaller devices that allow for more predictability in outcomes, and Canada. In Canada, Emerson’s turnover countability, and brings forth KPI’s that easy network access. We will also be large divergences from the original plan is close to $1 billion annually. Emerson as an industry; we could not produce in providing data speeds for our satellite for cost and schedule are not acceptable. also provides products for conveyor belts a timely enough manner to be useful.” network that are comparable to cell “We believe the best way to have more such as rollway bearings and sealmas- Part of the problem, according to Novak, phone networks. surety and predictability in a project is by ter bearings. “Our Control Techniques is that each part of the mining enterprise doing a better job in scoping the project. variable speed drives can be used in a sees itself as unique and isolated, and In the rush to get projects built during the re-generative configuration, such as a so they develop information manage- - Jim Mandala, boom years, many companies skipped dynamic brake for an inclined rock con- ment solutions independently. “For us Vice President and General Manager, these steps, which resulted in cost over- veyor. The braking drive can generate as the goal is tearing down the silo walls, Globalstar Canada Satellite Co. runs. Our approach is to place more effort much as 50% of the energy required to so that knowledge is shared and delivers into project planning and scoping to make run another same-sized drive connected the maximum ROI,” he said. sure we understand precisely what we on the same DC buss circuit,” he said. Another company bringing Enterprise want to build and how we will build it; it The company is also working on wire- Resource Planning solutions to the min- may be basic but it is profound,” he said. less control products. ing industry is Illumiti, an SAP systems

ONTARIO MINING 2015 - 88 - Image: Emerson Canada Industry Explorations Industry Explorations - 89 - ONTARIO MINING” 2015 EDITORIAL Global Business Reports Global Business Reports EDITORIAL

The Added Edge

Consulting and Technology

ONTARIO MINING 2015 - 88 - Image: Emerson Canada Industry Explorations Industry Explorations - 89 - ONTARIO MINING” 2015 INTERVIEW Global Business Reports Global Business Reports INTERVIEW

they work with, such as Appleton, it is We are already delivering modular motor What trends are driving innovation within the consulting and test- Thomas W. also important for them to understand control (MCC) and modular data cen- Dominic work space? that these brands are part of Emerson, a ters that are manufactured by Emerson In our process control group, we have been focusing on metallur- Cleland respected global company that provides offsite. Since many mines are located Fragomeni gical accounting, using technologies like the CiDRA SONARtrac® our businesses with financial stability and in remote areas, the ability to assem- meter to accomplish this. On the mining side, we have worked the strong management. One of the financ- ble the equipment in a populated area company Symboticware to put its technology on the mobile equip- ing challenges that mining companies in a controlled environment means that ment in the Nickel Rim South mine to assess motor and equipment face when designing their operations is skilled labor is easier to find and less ex- health. Manager, Business Development whether their supply chain for products, pensive, and the final on-site assembly is Director XPS also offers a product called XPS Float, which is installed in flota- Emerson Canada engineering services and customer sup- easy, quick, and of course cheaper. We XPS Consulting tion plants to measure the level of the cells. It has an ultrasonic head port will be secure for the life of mine. can also monitor the miners’ ventilation & Testwork that determines the height of the target and the interface between and milling equipment, including the data Services the froth and the slurry in the flotation tank. This measurement is Ontario is known for hard rock, under- center and MCC, remotely through our (A Glencore interfaced with a series of valves that control the inflow and outflow ground mines. What are some of Emer- telemetry monitoring services. Modular- Company) and maintain the level of the cell, which is critically important for son’s products in this context? ity also helps to lower the mine’s cost maintaining recovery and the grade of product. The float section is An example of a product for use in the and the time necessary for construction. used to determine the interface between the froth layer and the shaft of a mine is Appleton’s industrial In Canada, depending on the latitude, the slurry layer. LED lighting, which emits less heat than construction season can be short, and it In extractive metallurgy, modeling such as Metsim and Factsage a conventional incandescent lighting sys- can be difficult to work year-round. shorten our test programs, and we are using equipment such as the tem and is more energy-efficient. Apple- Another interesting trend is that en- thermo-gravimetric analyser as well as our new QEMSCANs. ton’s industrial LED light puts less heat ergy efficiency, automation, and uptime XPS Consulting & Testwork Services was founded as a part into the mine that has to be removed are becoming viewed as pathways to of Xstrata. How was Xstrata’s merger with Glencore last What is next for XPS? by energy-intensive air conditioning sys- greater job security for the miners. If year affected your business model? XPS plans to diversify further into gold, particularly in the refractory tems. On a SAG mill, companies use the mine operates more efficiently, and XPS’s model has remained the same. We are an autono- gold area. XPS’s multidiscipline team has the capability to offer the Emerson Process Management’s CSI stays in operation, the cost of operation mous business within Glencore that delivers value in metal- complete suite of services in this area. We also plan to get more into Technology – “machinery health mon- decreases and the drastic fluctuations lurgical engineering and testing to our internal and external lithium and rare earths and be the “go to” group for Ni, Cu, Pb, Zn itoring systems” – as a predictive diag- in commodity prices may not affect the clients. We get no corporate funding. To grow our internal and PGMs, which are our real strengths. • nostic tool for machinery management. profit margins as severely, forcing clo- business and keep our external market share, we have di- Emerson is a $25-billion, Fortune 500 Emerson also provides products for con- sures and layoffs. versified into gold and done quite a bit of work in rare earths, company. Can you give us a brief intro- veyor systems, such as belts, transmis- primarily on the mineralogy and mineral processing side. duction to its relationship to the mining sions and reducers from Browning, bear- In Ontario, Vale spent $760 million to XPS has five distinct and complementary business lines: industry? ings by Rollway and Sealmaster, and the automate its Totten mine. How do the process control, process mineralogy, extractive metallurgy, Emerson is a 124-year-old global com- large Kop-Flex motor couplings. economics of automation justify the materials technology and plant support. The plant support pany with diversified capabilities in man- Our Control Techniques variable speed expenditure? group is new, and the majority of our work has been in ufacturing and technology. We have drives can be used in a re-generative con- There are a number of ways to justify start-ups for gold projects in northern Ontario. We would been in the mining industry globally for figuration, such as a dynamic brake for an mine automation. For example, Emerson like to see a 50-50 mix between internal and external work. nearly 80 years but because of our dis- inclined rock conveyor. The braking drive technologies allow mining companies Through Glencore, we are doing more international work in tribution model, our name often goes can generate as much as 50 percent of to monitor the performance of brand- jurisdictions such as the Congo, Zambia, Kazakhstan and unrecognized in the sector. In Canada, the energy required to run a similarly new or existing machines. This baseline Mount Isa in Australia. South America and Africa are poten- Emerson’s turnover is close to $1 billion sized drive connected to the same direct of proper operation can then be used tial markets. annually, which puts us in the top 50 current buss circuit. In contrast to con- to monitor the machine and to predict, largest companies in Canada. We have ventional friction brakes that waste the with a reasonable degree of certainty, Through XPS’s test work for KWG Resources in the Ring five business platforms: Process Man- heat energy generated from friction, the whether a certain component or en- of Fire (ROF), you came to the conclusion that Black agement, Industrial Automation, Net- variable speed drive uses it to conserve tire machine will need to be repaired or Horse’s ore smelts readily produce a high-grade alloy with work Power, Climate Technologies, and energy and move product. changed before standard maintenance low chromium values. What is the significance of these Commercial & Residential Solutions, all We also have and are working on more procedures dictate. findings? of which contribute to our mining indus- wireless control and monitoring prod- The ROF is a boon, but it is somewhat isolated with no in- try capabilities with thousands of products. In an underground setting, wireless Where would you like to see Emerson in frastructure. The processing facilities initially used the con- ucts, technologies and services. is safer and more efficient, but technol- Canada? ventional route, which is an electric-furnace approach where In January 2014, Emerson acquired full ogy can be limited in a shaft by virtual One of Emerson’s objectives in Canada the raw ore is smelted at 1700 °C with a high-energy input. ownership of Appleton Electric, which line-of-sight communication. In the open is to continue to solidify our reputation KWG supported us to consider alternatives, and, together was part of a joint venture with another pit or the plant, it’s a no-brainer. in the mining industry. Customers are al- with KWG’s metallurgists, we looked at direct reduction company for several years. Appleton ready using many Emerson technologies, technologies. This technology is not new, but we have to- manufactures explosion-proof electrical What trends is Emerson following that and we would like to break down the bar- gether added a twist to take advantage of the lower cost enclosures and connectors, which are might influence its product development riers to using the additional technologies natural gas available in Ontario. We are currently developing particularly suited to the mining industry. initiatives? from our other business platforms. Inter- technologies to increase the rate of reaction and reduce the While it is important for our customers One of the trends that Emerson is follow- nally, we want to create additional syner- temperature of the direct reduction process, as well as con- to remain familiar with the brands that ing is modularity of equipment delivery. gies within our five business platforms. • sidering downstream processing options.

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Dominic which will help in the development of the ROF projects. What trends are driving innovation within the consulting and test- Fragomeni work space? In our process control group, we have been focusing on metallurgical accounting, using technologies like the CiDRA SONARtrac® meter to accomplish this. On the mining side, we have worked the company Symboticware to put its technology on the mobile equipment in the Director Nickel Rim South mine to assess motor and equipment health. XPS Consulting XPS also offers a product called XPS Float, which is installed in flotation & Testwork plants to measure the level of the cells. It has an ultrasonic head that Services determines the height of the target and the interface between the froth (A Glencore and the slurry in the flotation tank. This measurement is interfaced with Company) a series of valves that control the inflow and outflow and maintain the level of the cell, which is critically important for maintaining recovery and the grade of product. The float section is used to determine the interface between the froth layer and the slurry layer. In extractive metallurgy, modeling such as Metsim and Factsage shorten our test programs, and we are using equipment such as the thermo-gravimetric analyser as well as our new QEMSCANs. XPS Consulting & Testwork Services was founded as a part of Xstrata. How was Xstrata’s merger with Glencore last What is next for XPS? year affected your business model? XPS plans to diversify further into gold, particularly in the refractory XPS’s model has remained the same. We are an autonomous gold area. XPS’s multidiscipline team has the capability to offer the business within Glencore that delivers value in metallurgical complete suite of services in this area. We also plan to get more into engineering and testing to our internal and external clients. We lithium and rare earths and be the “go to” group for Ni, Cu, Pb, Zn get no corporate funding. To grow our internal business and and PGMs, which are our real strengths. • keep our external market share, we have diversified into gold and done quite a bit of work in rare earths, primarily on the mineralogy and mineral processing side. XPS has five distinct and complementary business lines: process control, process mineralogy, extractive metallurgy, materials technology and plant support. The plant support group is new, and the majority of our work has been in start-ups for gold projects in northern Ontario. We would like to see a 50-50 mix between internal and external work. Through Glencore, we are doing more international work in jurisdictions such as the Congo, Zambia, Kazakhstan and Mount Isa in Australia. South America and Africa are potential markets.

Through XPS’s test work for KWG Resources in the Ring of Fire (ROF), you came to the conclusion that Black Horse’s ore smelts readily and produces a high-grade alloy with low chromium in slag. What is the significance of these findings and what does it mean for the potential of the region? The ROF is a boon to the area, but it is somewhat isolated with no infrastructure. The processing facilities initially used the conventional route, which is an electric-furnace approach where the raw ore is smelted at 1700 °C with a high-energy input. KWG supported us to consider alternatives, and, together with KWG’s metallurgists, we looked at direct reduction technologies. This technology is not new, but we have together added a twist to take advantage of the lower cost natural gas available in Ontario. We are currently developing technologies to increase the rate of reaction and reduce the temperature of the direct reduction process, as well as considering downstream processing options. This is expected to reduce the cost of producing ferrochrome

Industry Explorations - 91 - ONTARIO MINING 2015 INTERVIEW Global Business Reports Global Business Reports INTERVIEW

million a year, which is a significant ing our existing product lines. One of not able to produce quickly enough to at its core, regardless of commodity, Jean Behara improvement. The product in question them is our booster series, which we Chris Novak be useful. location or mining method, the princi- was our AT series, was developed in- are revamping and updating to improve ples are the same. Our technology is house and is designed for modulating delivery and reduce cost. There are cer- NCS has a strong relationship with First adaptable and flexible to the procedural control applications. The previous prod- tain applications for which the AS is not Quantum Minerals, a Vancouver-based differences of each business while pro- uct that Rio Tinto was using was failing suitable because of the size and weight company. How does this reflect your viding the fundamentals of ore tracking every three months, while our AT series of spring return cylinders, in which case target customers? and KPI analysis. Our experience adds product has been in service for three we do air fail safe systems with inte- Sudbury is a hub for the Ontario mining value. When we sit in front of a CEO or Vice President, Business Development years now. grated booster. CEO industry and services, but our target mar- COO, we demonstrate knowledge of Cowan Dynamics Centric Mining ket has always been international. We their business requirements and pro- Can you tell us more about your new Ontario is known for hard rock under- Systems (formerly NCS export our technology either to small to pose direct solutions. We tell them what spring return pneumatic valve actu- ground mines. Is it necessary to adapt Technology Inc.) medium-size companies or large com- they need to hear, not what they want ators, which has been launched in Cowan’s products to fit the needs of panies with decentralized management to hear. October 2013 and the advantages it local customers? structures like FQ. It is easier to move a offers to the mining industry? Our products and systems are suitable disruptive technology into an arena with Why is the company is fundraising to In the past, when a mining company for a wide range of minerals and are fewer decision makers and to diversify build a school in Malawi? needed a spring return actuator, they primarily used in the processing phase. across a range of commodities to ensure Philanthropy is one of our company at- had to approach a manufacturer and re- We are known for providing solutions stability and growth. We have a broad tributes. NCS has been donating anony- quest a specific actuator, which would that are tailored to specific applications spectrum of clients such as Goldcorp in mously to local charities for many years then have to be built specifically for this and environments. Timmins and Detour Gold in Cochrane, and it has become part of our culture. company. This was a guessing game What are the concerns regarding up- as well as Toronto-based companies, However, we wanted to do something from the customer’s perspective and front costs related to automation? such as Alamos Gold and Teranga Gold, bigger and better in light of our recent very costly for us. We have been pro- The costs depend on the size of the and, finally, Australian companies such success, a large part of which was in ducing spring return actuators for the operation and the application we are as the large iron ore producer, Fortescue Africa. Education is the key to sustain- past 50 years and have developed an targeting. It is the change from having Metals (FMG). able success for Africa, and we want to extensive library of configurations somebody on-site physically turning part of that effort. • With the AS Series, Cowan Dynamics “handwheels” to investing thousands Is the mining industry receptive to what has developed a standardized, cata- dollars into automation. It is a significant is potentially a disruptive technology? logue-based spring return actuation investment but increases yields down The industry sees itself as unique, but Could you give us a brief description of solution. Customers can now simply re- the line and improves productivity lev- Can you give us an overview of NCS Cowan Dynamics’ presence in Ontario? fer to a dimension table and order their els. In a time when grades are decreas- Technology? The Ontario office was opened in 2004. product according to the required di- ing, it is essential to be able to extract as NCS Technology began in Sudbury in Cowan Dynamics had a small presence mensional size and thrust. This speeds much as possible from the rock. 2000 with the mandate to improve ac- ORE TRACKING in the market, but has grown. We now up the throughput for engineers. The cessibly to accountable operational have 45 employees in Montreal and four other advantage of the AS is that we What is the advantage for international knowledge in the mining industry. NCS in Ontario. We are a solutions provider have taken the spring out of the cylinder mining companies to choose a Canadi- was established initially as a consul- and provide actuators and controls for and put it in the factory-sealed canister. an-manufactured product? tancy with the goal of highlighting the OPERATIONAL REPORTING various processes. Cowan Dynamics’ The safety issues related to having the We have long-standing experience in fundamental wrongs in the industry and STOCKPILE MANAGEMENT core product is linear actuation. We spring inside the cylinder are resolved. mining and an understanding of our suggest solutions. One of the intrinsic RECONCILIATION provide specialty actuation both linear clients’ needs. We are aware of the issues was the “siloing” of data, making and quarter turn, specialty valves and Is this product similar to other products strenuous conditions in which actua- it inefficient to transfer knowledge from controls for the entire process. About we might see on the market? tors have to operate. Having access to the workplace to the boardroom. The 10% of our clients are based in Ontario There are other products that are simi- plants and being able to translate the industry was complacent and unable province. lar to ours, but they are not catalogued. information from the site into specific to mitigate the problem. We therefore A CLEAR VIEW OF YOUR DATA There is a complex process behind recommendations for the clients makes developed our own technology, Cen- FIND OUT HOW AT CENTRICMININGSYSTEMS.COM What type of growth did Cowan expe- reaching out and getting a quote from a us a unique supplier. tric, which came out seven years ago rience in recent years, with the global manufacturer. Our customers have ac- and was deployed to mining in Western mining industry going through such cess to an online portal, where they can What are Cowan’s strategic objectives Australia. serious cutbacks? instantaneously configure an actuator to for the coming two to three years in In the last five years, Cowan Dynamics suit their requirements. Our portal pro- terms of geographic expansion? What does Centric measure? GRADE CONTROL has tripled its sales, which was primarily vides an orderable part number, pricing, We are looking to expand further into Centric is designed to collect metrics re- EQUIPMENT UTILIZATION the result of the success stories in the and drawings with a few simple clicks. South America and Africa. We are ex- lated to the extraction, conveyance and MONITORING industry. We did a copper mine project ploring different alternatives to work processing of ore. These metrics are with Rio Tinto in the United States, What kind of new products or prod- with different partners. We have a num- then transformed into Key Performance where we developed and customized uct line is Cowan Dynamics currently ber of partners through OEM associa- Indicators (KPIs) and delivered to deci- a solution specifically for the client’s working on? tions and will be looking to expand this sion makers. Our approach brings op- needs. After implementation, Rio Tinto We are investing in research and devel- network further. • portunity with accountability and brings was able to increase its yield by $33 opment (R&D) and continuously refin- forth KPIs that as an industry we were

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“We worked for a number of juniors in the chromite and nickel-copper areas in the Ring of Fire. There is potential for many other minerals and metals to be found, but at the moment, companies and are waiting to see if the government will assist in developing this area. Aside from this project, there is still a lot of interest in the gold sector, but with the decrease in the metal price, this sector is also relatively quiet.”

- Richard Gowans, President, Micon International

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- Richard Gowans, President, Micon International

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“On a global basis, Ontario is regarded as one of the securest jurisdictions in the world as The one structural change that will come out of this downturn is the demand from investors we have relatively few issues with land tenure, providing confidence to our shareholders. for prudence. It does not make sense to do a $200 million capital expenditure program when Northeastern Ontario is is extremely rich in gold, with Timmins itself being Canada’s largest the company’s valuation is exponentially lower than that – where will the money come from? gold camp. Operating in this historic mining rich region is cost effective at all exploration and Investors are taking a big risk in the mining industry and the management teams of these mining stages resulting in shorter time frames for companies to achieve pre-production and companies have to understand that they need to be more realistic with their spending and development targets as compared to other jurisdictions. expectations.

- Ian Campbell, President and CEO, - Eric Sprott, CEO, Chief Investment Officer, Temex Resources Corp. Sprott Asset Management LP

Chinese investors are very interested in Canada’s mineral resources, especially the Ring Based on the recent M&A activity, it is safe to say that majors are more interested in of Fire; however, the lack of infrastructure in northern Ontario and elsewhere in Canada is investing in ‘safe’ jurisdictions. Companies are looking to de-risk their investments as much hindering their willingness to invest. They cannot justify a significant investment in remote as possible and operate within a ‘comfortable’ destination. Tamaka fits this model perfectly regions where there are no plans to build roads, rail or ports. and presents a very good target for majors to consider.

- Cameron A. Mingay, Partner, - Howard Katz, President & CEO, Cassels Brock & Blackwell LLP Tamaka Gold

From the safety side, the biggest concern when operating in extremely cold conditions is GoldQuest is planning to link our preliminary economic assessment (PEA) with the initiation of protecting employees in case of an emergency. Chemical spills can happen and they can our prefeasibility and fast-track the permitting process in the Dominican Republic. The support harm people, to minimize risks of chemical burns safety showers must be reliable and of the central and local government is essential for us because the government believes accessible at all times. We built a thicker insulated shell inside the shower booth, so that that mining will become a pillar of the economy in the country’s future. We are working very the water inside is kept warm at all times. We also added control systems to allow mine closely with the local communities to integrate them into Romero’s development; it is easier operators to know that everything is working properly, and installed larger capacity tanks to to do this with a smaller project, and our management is easily accessible to address any ensure availability of water at all times. questions the communities may have regarding its’ development.

- Sandro Spadafora, Vice President Operations, - Julio Espaillat, President and CEO, Rezplast Manufacturing Ltd. GoldQuest Mining Corp.

The main application of flexible ducting systems is to bring air from the main airway into the Investors are becoming more at ease with Argentina and recognizing the country’s exciting working headings underground. By attaching a fan at the corner, the air flows from the main prospects for uranium development…We have built up a strong pipeline of uranium targets travel ways and run it into smaller crosscuts or stopes. They hang a fan, put the ventilation that could add to the initial uranium resource defined at Laguna Salada. The new discovery at ducting under it, and it blows the air through vent ducting, close to the face where the people La Rosada is one such target where we have encountered the highest grades to date in the and the equipment are working. It is a PVC material, which we call Layflat. It folds, so when region. the fan blows, it will open up and the air goes through.

- Richard Spencer, President and CEO, - Don Croteau, Managing Director, U3O8 Corp. Schauenburg Industries Ltd.

ONTARIO MINING 2015 - 96 - Industry Explorations Industry Explorations - 97 - ONTARIO MINING” 2015 FINAL THOUGHTS Global Business Reports Global Business Reports FINAL THOUGHTS

- Ian Campbell, President and CEO, - Eric Sprott, CEO, Chief Investment Officer, Temex Resources Corp. Sprott Asset Management LP

- Cameron A. Mingay, Partner, - Howard Katz, President & CEO, Cassels Brock & Blackwell LLP Tamaka Gold

- Sandro Spadafora, Vice President Operations, - Julio Espaillat, President and CEO, Rezplast Manufacturing Ltd. GoldQuest Mining Corp.

- Richard Spencer, President and CEO, - Don Croteau, Managing Director, U3O8 Corp. Schauenburg Industries Ltd.

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GOVERNMENT AND ASSOCIATIONS Senior Journalist: Angela Harmantas ([email protected]) CANADIAN ASSOCIATION OF MINING EQUIPMENT AND SERVICES FOR EXPORT (CAMESE) 73, 75, 99 Senior Project Director: Gabrielle Morin ([email protected]) MINISTRY OF NORTHERN DEVELOPMENT AND MINES 11, 12, 99 ONTARIO MINING ASSOCIATION (OMA) 16, 23, 99 Project Director: Irina Negoita ([email protected]) CENTRE FOR EXCELLENCE IN MINING INNOVATION (CEMI) 99 Media Relations Coordinator: Ty Jeevaratnam ([email protected]) MINERAL EXPLORERS AND PRODUCERS ATACAMA PACIFIC GOLD CORP. 55 BLACK WIDOW RESOURCES INC. 46, 47 Regional Director, EMEA: Sharon Saylor ([email protected]) BLACK IRON INC. 56, 62 General Manager: Agostina Da Cunha ([email protected]) BOLD VENTURES INC. 35, 41 DULUTH METALS LTD. 53, 56 DUNDEE PRECIOUS METALS 55, 58, 59 Executive Editor: John V. Bowlus ([email protected]) EXCELLON RESOURCES 55 FIRST NICKEL INC. 14, 44, 48, 65, 68 Graphic Designer: Gonzalo Da Cunha ([email protected]) FOTH INFRASTRUCTURE & ENVIRONMENT 55 GOLDQUEST MINING CORP. 54, 97 HARTE GOLD CORP 22, 24, 25 HATCH 34, 36, 37, 38, 88 LATIN AMERICAN MINERALS INC. 55 MACDONALD MINES 35, 39 For updated industry news from our on-the-ground teams around the world, please visit our NORONT RESOURCES 11, 33, 34, 35, 36, 40, 41, 45, 47, 65, 68 NORTHERN GRAPHITE CORP. 46, 50 website at gbreports.com, subscribe to our newsletter by signing up to our VIP list through our NORTHERN SUN MINING 31 website, or follow us on Twitter: @GBReports. ONTARIO GRAPHITE 45, 46, 49 ORVANA MINERALS CORP. 56, 57 RUBICON MINERALS CORP. 23, 26, 27, 63 SANDSPRING RESOURCES LTD. 65 Additional copies of this book can be ordered through Elif Ozturk ([email protected]). SILVER BEAR RESOURCES 56, 60 ST. ANDREWS GOLDFIELDS LTD. 21 STANS ENERGY CORP. 56, 61 TAMAKA GOLD 24, 97 TEMEX RESOURCES CORP. 96 TRANSITION METALS 44, 46, 51 U308 CORP. 97 THANK YOU ZENYATTA VENTURES INC. 43, 45, 46

CONSULTING, ENGINEERING AND TECHNOLOGY GBR would like to thank AUSENCO 82, 88 CENTRIC MINING SYSTEMS (NCS TECHNOLOGY INC.) 89, 93 CH2M HILL 10 CANADIAN ASSOCIATION OF MINING EQUIPMENT AND SERVICES FOR EXPORT COWAN DYNAMICS 63, 92 (CAMESE) EMERSON CANADA 88, 89, 90 GLOBALSTAR CANADA SATELLITE CO. 89 www.camese.org KPMG 13, 18 MACLEAN ENGINEERING 80, 83 MICON INTERNATIONAL 95 CENTRE FOR EXCELLENCE IN MINING INNOVATION (CEMI) SRK CONSULTING 7, 24, 30, 36 XPS CONSULTING & TESTWORK SERVICES 19, 36, 91 www.miningexcellence.ca

DRILLING, EQUIPMENT AND SERVICES B&D MANUFACTURING 80, 85 MINISTRY OF NORTHERN DEVELOPMENT AND MINES BECKER VARIS 75, 77 www.mndm.gov.on.ca CEMENTATION CANADA INC. 75 DMC MINING SERVICES 81, 86, 87 INDUSTRIAL FABRICATION INC. 78, 80 MAESTRO MINE VENTILATION 81 NORTHERN CENTRE FOR ADVANCED TCHNOLOGY INC. (NORCAT) MINEWISE 74, 76 www.norcat.org ORBIT GARANT DRILLING 81, 84 RAIL-VEYOR© TECHNOLOGIES GLOBAL INC. 75 REMATECH INDUSTRIES 74, 75, 79 ONTARIO MINING ASSOCIATION (OMA) REZPLAST MANUFACTURING LTD. 75, 96 SCHAUENBURG INDUSTRIES LTD. 96 www.oma.on.ca STRONGCO CORP. 81

LEGAL, FINANCIAL, RECRUITING AND OTHER PROSPECTORS & DEVELOPERS ASSOCIATION OF CANADA (PDAC) ASIA MINING CONGRESS 10 BRUNEL 64 www.pdac.ca CASSELS BROCK & BLACKWELL LLP 96 CJ STAFFORD & ASSOCIATES 64, 67 COLLINS BARROW 65, 66 SUDBURY AREA MINING SUPPLY & SERVICE ASSOCIATION (SAMSSA) DAVIES WARD PHILLIPS & VINEBERG LLP 17 ww.samssa.ca HILTON HOTEL 36 IBK CAPITAL 65, 69 NORTON ROSE FULBRIGHT 7 ORMSTON LIST FRAWLEY LLP 12, 63, 71 TMX GROUP RESOURCE CAPITAL FUNDS 48, 64, 68 www.tmx.com SPROTT ASSET MANAGEMENT LP. 97 WATERTON GLOBAL RESOURCE FUND MGMT. 65, 70

We would also like to sincerely thank all the companies that took the time to give their insights into the market and share their experience and knowledge.

This list contains those companies interviewed during the course of research for this publication and as such represents only a limited selection of the companies operating in the mining industry of Ontario. It should not be considered a comprehensive guide. GBR holds an exclusive and extensive pharmaceutical database for Ontario and the wider region. For further information on database access Industry Explorations - 99 - ONTARIO MINING 2015 packages, please contact [email protected] or call +44 20 7812 4511. COMPANY INDEX Global Business Reports Global Business Reports CREDITS

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We would also like to sincerely thank all the companies that took the time to give their insights into the market and share their experience and knowledge.