Canada's Producers

c a n a d a ’ s f i r s t m i n i n g publication CanadianCanadian Mining JournalAugust 2014 Mwww.canadianminingjournal.comining Journal

Canada’s

Producers A look at our best miners

Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240

Departments CanadianCanadian 5 Editorial Mining Journal Publisher Robert Seagraves comments in this month’s Editorial about the recent decision by the Supreme Contents Court of Canada and the First Nations. Canada’s Top 40 Miners 6 Investing Columnist Ned Goodman Not much has changed talks about ‘stagflation,’ a Canadian Mining Journal’s annual look at the term used to describe a peri- top performers in mining in Canada. od of stagnant economic 11 growth and soaring rates of inflation. Development 22 8 Law 22 Waking the giant Norton Rose Fulbright TerraX Minerals works at bringing Yellowknife’s historic Canada’s Martin Valasek, a Giant mine back to life. Partner with the company, takes a look at investor-state 26 arbitration and the Canadian 26 On top of what’s below mining industry. TANCO Mine’s Bernic Lake mine in Manitoba poses many challenges. 60 In My Mine(d) 30 In for the long haul This month’s guest column is Copper Mountain Mining overcomes transportation written by Shane Troyer, a challenges to get equipment to B.C. mine. 30 principal with the firm of Grant Thornton LLP. He talks about why small and 34 Flying high mid-cap companies are Yukon prospector Shawn Ryan comes up with a great prime targets for regulatory way to make exploring less expensive and more reliable. headaches. 38 Stepping out in big, big way 38 Detour Gold’s Ontario mine thrives as the company 62 Unearthing Trends continues to step out for more gold in its own backyard. This month’s regular column by Ernst & Young LLP, Vancouver, talks about 46 Without limits Resource Nationalism and Nova Scotia’s Department of Natural Resources says ‘prospects’ are good. why it is a key business risk 46 for the mining sector. 50 Looking positive Newfoundland and Labrador continue to report a strong performance. 54 A busy season An AME-BC look at prospecting and development 56 activities in the province. c a n a d a ’ s f i r s t m i n i n g publication ABOUT THE COVER CANADIAN This month’s cover clearly Mining JournalAugust 2014 Mwww.canadianminingjournal.comining Journal shows robust activity at a CANADA’S 56 Site of all sites mine site while also serving to PRODUCERS CMJ’s Eastern Correspondent D’Arcy Jenish reports on A LOOK AT OUR convey the message of pro- BEST MINERS ductivity that is evident by the his recent tour of Sweden. financial rewards of this year’s Top 40 mining companies in

Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240 Canada. To see what we mean, see the Top 40 Report For More Information starting on page 11. Cover Please visit www.canadianminingjournal.com for regular updates on what's happening photo provided by Caterpillar. with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com Coming in September ‘Gold’ will be the main theme of the September issue. www.canadianminingjournal.com

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All marks used are trademarks and/or registered trademarks of Henkel and/or its affiliates in the U.S. and elsewhere. ® = registered in the U.S. Patent and Trademark Office. © Henkel Corporation, 2014. All rights reserved. AD-170-14. Editorial CanadianMining Journal August 2014 Vol. 135 — No. 6 80 Valleybrook Drive, Toronto, Ontario M3B 2S9 Tel. (416) 442-5600 Fax (416) 510-5138 www.canadianminingjournal.com “Rule of Law” Editor Russell B. Noble 416 510-6742 wins the day [email protected] Field Editor By Robert Seagraves, Publisher Marilyn Scales 613-270-0213 [email protected] Art Director anada had always prid- Mark Ryan ed itself on its adherence Production Manager Print Production Manager Steve Hofmann Phyllis Wright Cto the “rule of law.” As Circulation Manager such, the recent and seismic Cindi Holder 416 442-5600, ext. 3544 ruling by the Supreme Court [email protected] of Canada regarding the First Publisher & Sales Nations is a chance for the Robert Seagraves 416 510-6891 resource companies of [email protected] Canada to “walk the walk.” Sales This has been a ruling 40 Western Canada, Western U.S.A. and Quebec Joelle Glasroth years in the making with 416-510-5245 aboriginal groups winning [email protected] every land claim challenge Toll Free Canada: along the way. Now there is 1-800-268-7742 ext 6891 or 5245 Toll Free USA: no more need to challenge. 1-800-387-0273 ext 6891 or 5245 Clarity has come to the land claim wars between President Vice-president resource companies and the Historical treaties of Canada. Bruce Creighton Alex Papanou First Nations. If there is no Established 1882 Canadian Mining Journal provides articles and information of practical treaty signed, and the use to those who work in the technical, administrative and supervisory aspects aboriginals can prove title to the land, British Columbia has the most work to of exploration, mining and processing in the Canadian mineral exploration and mining industry. Canadian Mining Journal (ISSN 0008-4492) is published resource companies and governments do in terms of establishing who owns title 10 times a year by Business Information Group L.P. BIG is located at 80 Valleybrook Dr., Toronto, ON, M3B 2S9. Phone (416) 442-5600. must get consent. to the land as historically, very few treaties Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved. Now it is no longer good CSR policy to were signed. It will be in the interests of The contents of this magazine are protected by copyright and may be used only for your personal non-commercial purposes. All other rights are reserved and consult and get permission - it is the law. both parties to establish their claims of commercial use is prohibited. To make use of any of this material you must first obtain the permission of the owner of the copyright. For further information To quote the ruling from Chief Justice ownership but First Nations’ claims will please contact Russell Noble at 416-510-6742. supersede claims by the province. Subscriptions — Canada: $47.95 per year; $76.95 for two years. USA: US$60.95 Beverly McLachlin, title to the land means per year. Foreign: US$72.95 per year. Single copies: Canada $10; USA and foreign: the aboriginal group has “the exclusive Aboriginal groups are obviously ecstat- US$10. Canadian subscribers must add GST and Provincial tax where necessary. GST registration # 809744071RT001. right to decide how the land is used, and ic over the decision. If they can prove title From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not the right to benefit from those uses.” to the land, they must be taken as equal wish your contact information to be made available, please contact us via one But this is not an absolute right. There partners in the economic development of of the following methods: Phone: 1-800-668-2374; Fax: 416-442-2191; E-mail: privacy [email protected]; Mail to: Privacy Officer, are a few caveats, such as if the government natural resources. Business Information Group, 80 Valleybrook Dr., Toronto, ON, M3B 2S9. Publications Mail Agreement #40069240. PAP Registration No. 11000. We can show that the project has a “compelling In truth, this is all they have been ask- acknowledge the financial support of the Government of Canada through the and substantial public interest.” I am sure ing for, and as a country that prides itself Publication Assistance Program towards our mailing costs. Return undeliver- able Canadian addresses to: Circulation Dept., Canadian Mining Journal, 80 there will be a lot of arguments that the on rule of law, this is the least we can give Valleybrook Dr., Toronto, ON, M3B 2S9. E-mail: [email protected] Canada Post: Publications Mail Agreement PM40069240. Please forward financial well-being of the province is a them. Will there be drop in resource Forms 29B and 67B to 80,Valleybrook, Toronto, ON M3B 2S9. compelling reason to proceed with certain development in B.C.? Well, it certainly got Canadian Mining Journal, USPS 752-250. US office of publication: 2221 Niagara Falls Blvd., Niagara Falls, NY 14304-5709. Periodicals Postage Paid at Niagara Falls, projects, such as the Northern Gateway tougher to proceed with projects but NY. US postmaster: Send address changes to Canadian Mining Journal, PO Box 1118, Niagara Falls NY 14304. pipeline, or closer to home here in Ontario, provinces that have treaties may in turn We acknowledge the financial support of the Government of Canada through the Canada development of the Ring of Fire. see an increase in development, such as Magazine Fund toward our editorial costs. The Liberal government of Ontario Ontario and Saskatchewan. has so mismanaged the economy of When all is said and done, this was a Ontario that it now appears they are ruling that had to be made. Other than a banking on the Ring of Fire to help save few resource companies, the only ones the province from a potential bankruptcy. unhappy with the ruling will be the lawyers Thankfully, much of Canada is cov- but I’m sure they will be busy now working ered by treaties. out who has title to certain lands. CMJ Canadian Business Press Indexed by Canadian Business Periodicals Index

August 2014 • Canadian Mining Journal | 5 Investing

Who remembers Stagflation?

Ned Goodman is Chairman of Dundee Corporation.

By Ned Goodman

tephen Johnston wrote an interesting ings are what President Obama and Ben The consequence of all this is that the book about “Cantillon’s Curse.” Bernanke have been working with, “There U.S. and Euro have created an era of “com- SCantillon was an economist in the is no subtler, no surer means of overturn- petitive currency devaluation which has 1680s who, as part of his career, was able ing the existing basis of society than to lead and is leading to a global loss of pur- to study the collapse of the Mississippi debauch the currency. The process engag- chasing power (also known as global infla- Company and along with it the terrible es all the hidden forces of economic law tion) in all those currencies that play the effects brought on by the ‘unbridled” on the side of destruction, and does it in a Quantitative Easing, ZIRP, NIRP game. money printing by the French economy. manner which not one man in a million is Remember the 1970s? I built my The so-called curse is simplistic and able to diagnose...” investment career during those years. The we are living through it today. Its basic As we all know, the Federal Reserve in time was known as the “Me Decade” and idea is that inflation does not happen by the U.S. has not only been Quantitative a significant case of something that was accident. It is caused by excess money Easing printing of currency but they also labeled “Stagflation.” This was a period of printing much as the U.S. has been doing have kept interest rates for the banking stagnant economic growth both in the since 2009. community and the government at all U.S. and Canada, along with soaring rates The simplistic economics is that as time historic lows – ZIRP as low as zero. of inflation. Of course, all of this did not money is printed, its purchasing power is This was Cantillon’s Curse and his lead to full employment. In fact, unem- transferred to the first receptor from those view of currency devaluation. The U.S. ployment was also a serious problem. who receive it later, and it falls in value dollar has lost 97% of its purchasing Well, Stagflation is coming back again, over the longer term. power since the inception of the Federal both in Canada and the U.S.. The World We are now living in a wobbly world Reserve in 1913. And according to Bank just lowered its projected global with a global economic system that will Johnson, the Canadian dollar has had a growth rate for 2014 to 2.8% from its pre- soon catch the negativity related to similar 95% loss since the inception of vious 3.2% and the International Monetary Cantillon’s Curse, or a world where certain the Bank of Canada, our version of the Fund lowered its forecast for U.S. growth privileged groups are silently misappropri- Federal Reserve. from 2.8% to 2%. ating the wealth of the U.S. middle class. I was in the gold mining business in And even more recently, the U.S. gave My personal career in investment the 1970s when the Bank of Canada paid out its economic performances for the management was started during the stag- $68 per ounce of gold only to then sell the first quarter of 2014 which came in at a flationary days of the 1970s and from that same gold to the U.S. Federal Reserve for scary minus 2.9%. experience, it is clear to me that printing $35 per ounce. This is the continuation of the 2008 of currency by the many countries in the They thought they were saving jobs for recession which they have been trying to world that have done so, but especially the the gold miners. Today, according to tell us is over and that the U.S. economy is United States, with an economy that has Johnson, if gold were to be remonetized, in recovery. much too much debt and a continuing the Canadian dollar would face an almost Minus 2.9% growth is worse than the large deficit problem, both of which are 100% devaluation in purchase power. most pessimistic of pessimists was calling being funded by printing of paper dollars Europe’s version of a misled central for and large unemployment in the U.S. which should soon lead to stagflation. banker is Mario Draghi, and he has will continue for some time yet. The so-called Quantitative Easing of invented something new – NIRP – where Negative Quarters are rare, but Minus the U.S. is printing of U.S. dollars. he lends money at negative interest rates. 3 is Recession! To quote none other than John If anything is likely to destroy purchasing Are you prepared for a 2014 correc- Maynard Keynes whose Keynesian writ- power of a currency, NIRP is a no brainer. tion? CMJ

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Investor-state arbitration and Canadian mining

Martin J. Valasek is a Partner with Norton Rose Fulbright By Martin J. Valasek

n December 1, 2013, Canada became the 150th state to ratify (whether vis-à-vis nationals of the host state or nationals of oth- the Convention on the Settlement of Investment Disputes ers states). Several recent cases demonstrate the importance of Obetween States and Nationals of Other States (ICSID). It was these safeguards. For example, in 2012, the Canadian company a long time coming: the other members of the G7 all did so Rusoro filed an arbitration against Venezuela under the between 1966-71. This is a very important development for the CanadaVenezuela bilateral investment treaty (BIT) following the Canadian mining industry. During an era of renewed resource state’s nationalisation of the company’s gold mining concession. nationalism in many countries where mining activity takes place, More recently, and taking advantage of Canada’s ratification of ICSID reduces the risks of investing abroad by providing an effec- ICSID, the Canadian company Infinito Gold Ltd. filed an arbitra- tive mechanism for the resolution of investor-state disputes. tion against Costa Rica under the CanadaCosta Rica BIT and the ICSID Convention, alleging mistreatment by the state of the International Centre for the Settlement company’s mining project. While the outcome of these pending of Investment Disputes (ICSID) cases is unknown, all of the claiming companies are likely hap- ICSID is widely considered to be the leading international arbi- pier to be before an international arbitral tribunal applying inter- tration institution devoted to investor-state dispute settlement. It national investment-protection standards rather than before the is a unique mechanism in that it is insulated from national law national courts of the host state applying the local law. and courts: any challenge to an ICSID award goes before an “annulment committee” constituted by ICSID, not before a Protection under a Contract national court. Also, countries that have ratified ICSID have Mining companies can also provide for investment protection in committed to enforcing ICSID awards as if they were final judg- their contracts with foreign states. Such tailormade instruments ments of their own courts. Finally, states have an important are only effective, however, if they are insulated against changes incentive to comply with awards issued under the rules of ICSID in domestic law. This can be achieved by including a “legal stabil- (a branch of the World Bank), since noncompliance could ity” clause and selecting neutral law or international law to gov- adversely affect the country’s borrowing ability with the IMF and ern the contract. A valid and effective arbitration clause needs to the World Bank. Following Canada’s ratification of ICSID, be included as well. A recent example of an investor-state case Canadian mining companies now have access to this mecha- under a contract involves Canada’s Brilliant Resources’ claim nism, as long as their investment is protected by an instrument against Equatorial Guinea. The company alleges that the state in which they have agreed to ICSID arbitration, and the host failed to provide certain mining concessions that were due to its state has also ratified the ICSID Convention. subsidiary Ivory Resources in exchange for the exploration work Investments by Canadian mining companies in foreign coun- that it did in the country. By providing for international arbitra- tries may be protected by international investment agreements, tion in the contract, the company has avoided the local courts of such as Canada’s Foreign Investment Promotion and Protection the host state for the resolution of this dispute. Agreements (FIPA), or by investment chapters of bilateral free trade agreements or multilateral free trade agreements (such as Advice for Canadian Mining Companies Chapter Eleven of NAFTA). Protections may also be available The best way to mitigate the risk of resource nationalism is to under a contract with a host state or through the host state’s for- combine solid substantive protections with the procedural safe- eign investment legislation. guards of ICSID arbitration. At a minimum, Canadian mining companies should insist on arbitration clauses in their contracts Protection under Investment Treaties with foreign states. Where possible, they should incorporate Protection that is provided under investment treaties commonly ICSID arbitration rules, and also structure their investment so as includes protection against uncompensated expropriation, the to be protected by an investment treaty. Because the specifics guarantee of a minimum standard of treatment (either as spe- relating to these matters are complex, and beyond the scope of cifically defined in the treaty or as understood under customary this column, it is best to seek specialized legal advice in respect international law) and the guarantee of nondiscrimination of any particular transaction or dispute. CMJ

August 2014 • Canadian Mining Journal | 9 WE COULD HAVE USED THIS SPACE TO TALK ABOUT OUR SUCCESS,

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NYSE: GG | TSX: G 3 | Canada’s Top 40 Miners

CANADA’S TOP

Not much has changed But gold miners are scrambling By Field Editor Marilyn Scales

his is the time of year we at CMJ pause to examine how Canada’s mining companies performed during the previous year. We start by poring through year-end 2013 results from twice as many companies as will make the list in an effort not to miss a likely company. Their revenues, earnings or losses, and their assets are examined, thenT we use their gross revenues for the Top 40 ranking because it is obtain- able from public records. That’s easy enough. By gross revenues, once again Agrium made the most money ($16.2 billion). Not surprisingly, Barrick Gold ($12.9 billion), Suncor’s oil sands operations ($12.3 billion), and Syncrude’s estimated oil sands revenue ($11.4 billion) were not far behind. What’s a billion or two among friends? Sad to say some familiar names disappeared from the Top 40. Inmet Mining was taken over by First Quantum ($3.7 billion) and Aurizon Mines was acquired by Hecla Mining Co., an American company. High River Gold was absorbed by a Russian gold miner, Nord Gold. Harry Winston became Dominion Diamond Corp. ($356 million) and consolidated the performance of the Ekati and Diavik mines.

August 2014 • Canadian Mining Journal | 11 | Canada’s Top 40 Miners

CONTINUED FROM PAGE 11 Top 40 list shows that 2013 has been a terrible year for all of them. The 29% drop in Dominion Diamond was only one of the price of gold hit almost all of them Canada’s the new names welcomed to the Top 40 squarely in the revenues, typically for a list. Silver Wheaton ($728 million) and drop of 20%. There were two exceptions, Top 40 Franco-Nevada Corp. ($413 million) are Centerra and Crocodile Gold. Centerra included even though they are metals doubled its output to 600,000 oz and reg- by Gross streaming businesses. Their incomes and istered a 42% gain in revenues. Crocodile interests lie solidly in the mining sector. Gold boosted output by 26% and revenues Revenue Also new to the Top 40 this year are by 17.5%. (millions of B2Gold ($561 million) whose output As bad as the hit on the revenues of jumped 132% last year. Two other compa- gold miners was, their earnings turned Canadian dollars ) nies with large increases in gold produc- mostly to losses. Of the 25 gold focused tion are also first-timers: Crocodile Gold companies on our list, less than half ($310 million) and Rio Alto Mining ($294 recorded positive numbers in the earnings million). We also welcome Aura Minerals column. Barrick, despite revenues of $12.9 ($341 million) and Golden Star Resources billion recorded a net loss of $10.9 billion. 1| ($496 million). Other large gold producers – Kinross, A look at the PwC publication, Mine: Goldcorp, Yamana, IamGold, Eldorado Agrium Inc Realigning Expectations, reveals that Gold, New Gold and Osisko – all posted Agrium Inc. was founded as Cominco Fertil- Canadian companies are well represented negative results. izers, Limited (short for Consolidated Mining and Smelting Company Limited) in 1931 and on its list of top 40 global miners. Barrick The brightest light among gold miners changed its name to Agrium, Incorporated in is No.4, Cameco is No.6, First Quantum is is Agnico Eagle. That company posted net 1995. The company is headquartered in Calgary No.11, Goldcorp is No.15, PotashCorp is earnings of $418 million on revenues of and is a retail supplier of agricultural products and services in North and South America as well No.28, Silver Wheaton is No.32, Teck is $1.7 billion. Looked at differently, the as Australia. The company provides nitrogen- No.34, and Yamana Gold is No.38. We are company retained 24.8% of its revenues as based fertilizers, sulphur, and phosphate-based proud that Canada is so well represented. earnings. fertilizers from potash mines in Saskatchewan and in Kapuskasing, Ontario, and in Conda, Ida- As a point of interest, Glencore Xstrata Centerra, with its doubling produc- ho. Agrium heads this year’s list of Canada’s Top was No.14 and Vale SA was 37. Russian tion, also bucked the loosing trend. It had Performers with gross revenues of $16.2 billion. enterprise and largest diamond producer revenues of $973 million and net earnings in the world, Alrosa, topped PwC’s list. of $162 million. That is a respectable The list of the 10 largest gold producers 16.7% of gross sales turned into earnings. compiled by Gold Investing News puts The revenue-turned-into-earnings pic- 2| Barrick at the top (no surprise there). But ture has not been much better for base it also includes Goldcorp at No.4 and metals producers. Prices fell slightly or Barrick Gold Kinross at No.5. This ranking was made stagnated, leading to loses for half of the Barrick Gold Corporation is based in Toronto and is the largest gold mining company in the by the number of ounces produced. base metal miners in the Top 40. There world. The company evolved from a privately A review of the gold producers on our were exceptions – First Quantum (earnings held North American oil and gas company. Its first acquisition was the Renabie mine near Wawa, Ontario which produced around 16,000 troy ounces (0.50 t) of gold in 1984. Today, Bar- Who is eligible for the Top 40? rick Gold Corporation is an internationally recog- Determining a list of Canada’s Top 40 mining companies takes time and research. We examine nized powerhouse in the world of mining and financial statements, annual reports and other public information for almost 100 separate ranks second in this year’s Top 40 ranking with companies gross revenues of $12.9 billion. We keep in mind that eligible companies must meet two of the following four criteria: • Companies that are traded on a Canadian stock exchange. • Companies that are domiciled in Canada. • Companies that own or have a significant equity interest in a producing mine in Canada. 3| • Companies with a project in the advanced development stage may also be considered. For example, a company with its head office in Toronto and its stock trading on the TSX Suncor Energy or TSX-V would meet the above criteria even if all its producing mines are offshore. Compa- Suncor Energy is a Canadian integrated ener- nies with foreign head offices, and that do not trade on a Canadian exchange, will not make gy company based in Calgary that specializes the Top 40 list even if they have substantial mining assets in this country. in the production of synthetic crude from oil For the 2013 calendar year, the Bank of Canada reported that the average Canadian:U.S. sands. It was founded in 1919 in Montreal as dollar exchange rate was C$1.03:US$1.00. Results reported in greenbacks have been con- Sun Company of Canada, a subsidiary of Sun verted to loonies at that rate. Oil (now Sunoco). Suncor is the world’s largest We make every effort to include all eligible companies. If you believe your enterprise should producer of bitumen and owns and operates be listed among the Top 40, please write to the author at [email protected]. refineries in Alberta, Ontario and Quebec.

12 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com Canada’s Top 40 by Gross Revenue (C$ millions)

2013 2012 Rank Last Company Year End Type Revenue Net Earnings Assets Revenue Net Earnings Assets 2013 year (loss) (loss) 1 1 Agrium Inc. Dec 31 Potash/Fertilizer 16,198.8 1,094.9 16,456.3 16,456.3 1,542.9 16,279.2 2 2 Barrick Gold Dec 31 Gold 12,886.3 (10,921.1) 38,571.4 14,825.8 (565.5) 48,902.3

3 3 Suncor (oil sands only) Dec 31 Oil Sands 12,294.0 2,040.0 42,754.0 10,838 468.0 39,649.0

4 – Syncrude (est) Dec 31 Oil Sands 11,445.8 2,268.5 27,716.8 10,621.6 2,646.6 27,665.1

5 4 Teck Resources Dec 31 Base Metals & Coal 9,382.0 1,010.0 36,183.0 10,343.0 1,140.0 35,065.0

6 5 Potash Corp. of Saskatchewan Dec 31 Potash/Fertilizer 7,524.2 1,838.6 18,496.7 8,164.8 2,141.4 18,752.2

7 8 Canadian Oil Sands Ltd Dec 31 Oil Sands 4,208.0 834.0 10,190.0 3,905.0 973.0 10,171.0

8 7 Kinross Gold Dec 31 Gold 3,892.9 (3,103.0) 10,595.3 4,436.5 (2,622.6) 15,329.1

9 6 Goldcorp Dec 31 Gold 3,797.6 (2,790.3) 30,450.9 4,799.8 1,801.5 31,908.4

10 9 First Quantum Minerals Dec 31 Copper 3,659.5 545.6 15,935.3 3,038.9 1,926.0 7,762.5

11 10 Cameco Corporation Dec 31 Uranium 2,438.7 317.7 8,039.3 1,890.7 251.8 7,431.1 12 – Walter Energy Dec 31 Coal 1,916.1 (6.2) 5,758.6 2,471.8 (17.5) 5,941.5 13 11 Yamana Gold Dec 31 Gold 1,898.0 (488.4) 11,650.0 2,406.9 455.4 12,154.2

14 13 Agnico Eagle Mines Dec 31 Gold 1,687.6 418.7 5,108.2 1,975.2 320.2 5,413.9

15 14 IamGold Corporation Dec 31 Gold 1,181.5 (886.3) 4,316.1 1,497.0 382.3 5,295.6

16 18 Eldorado Gold Dec 31 Gold 1,157.7 (669.1) 7,452.3 1,181.9 327.6 8,165.9

17 16 KGHM International Dec 31 Copper 1,094.7 9.7 3,853.8 1,427.0 107.0 3,801.1

18 17 Centerra Gold Dec 31 Gold 972.7 162.4 1,738.3 680.5 (148.0) 1,642.2

19 21 Pan American Silver Dec 31 Silver 849.2 (459.2) 2,850.5 956.5 80.8 3,496.4

20 23 New Gold Dec 31 Gold 803.1 (196.9) 4,325.0 815.0 205.0 4,412.2

21 22 Lundin Mining Dec 31 Base Metals 749.6 140.8 4,565.0 742.7 126.9 4,110.2

22 – Silver Wheaton Corp. Dec 31 Silver 727.7 386.8 4,521.5 875.1 603.6 3,285.0

23 36 Osisko Mining Corp Dec 31 Gold 675.6 (455.1) 2,222.0 665.4 90.8 2,687.9

24 – B2Gold Dec 31 Gold 560.6 69.3 2,379.0 266.9 53.5 696.8

25 20 Hudbay Minerals Dec 31 Base Metals 516.8 (109.4) 3,844.0 702.6 (23.5) 3,476.5

26 – Golden Star Resources Dec 31 Gold 496.3 (307.5) 335.5 567.0 10.0 676.0

27 53 Endeavour Mining Dec 31 Gold 456.6 (382.9) 1,312.2 376.3 (8.9) 1,779.9

28 12 Sherritt International Dec 31 Nickel & Coal 448.5 (660.3) 6,457.8 475.3 33.7 6,587.8

29 24 Thompson Creek Metals Dec 31 Base Metals 447.4 (221.5) 3,178.1 413.4 562.7 3,512.5

30 – Franco-Nevada Corp Dec 31 Gold 412.9 12.1 3,136.2 439.8 105.7 3,243.9

31 29 Uranium One Dec 31 Uranium 398.0 (42.5) 2,576.1 364.0 (99.6) 2,807.0

32 33 Dundee Precious Metals Dec 31 Gold & Base Metals 366.4 13.6 1,017.4 406.3 30.7 1,001.4

33 – Dominion Diamond Corp Jan 31 Diamonds 355.8 36.3 1,761.8 298.8 26.2 1,655.5

34 30 AuRico Gold Dec 31 Gold 351.6 34.2 2,984.1 86.4 182.2 3,274.5

35 32 Capstone Mining Dec 31 Copper-Gold 342.1 (9.7) 1,964.7 314.7 59.6 1,554.6

36 – Aura Minerals Dec 31 Copper & Gold-Silver 340.8 (76.4) 362.1 316.6 (53.1) 438.5

37 34 China Gold Int'l Resources Dec 31 Gold 311.7 65.6 189.6 342.4 79.3 257.6

38 – Crocodile Gold Dec 31 Gold 309.8 95.6 241.8 263.6 (41.4) 493.0

39 44 Teranga Gold Dec 31 Gold 306.8 58.3 643.1 361.0 111.4 581.4

40 – Rio Alto Mining Dec 31 Gold 293.7 31.7 369.4 326.0 103.4 364.1

August 2014 • Canadian Mining Journal | 13 | Canada’s Top 40 Miners

The Runners-up (C$ millions) 2013 2012 Rank Last Company Year End Type Revenue Net Earnings Assets Revenue Net Earnings Assets 2013 year (loss) (loss) 41 – Areva Resources Dec 31 Uranium 292.5 298.7 42 – Alamos Gold Dec 31 Gold 290.7 40.0 924.9 338.3 121.5 776.5 43 42 Taseko Mines Dec 31 Base Metals 290.1 (34.8) 970.2 253.6 (9.1) 996.4 44 44 Endeavour Silver Dec 31 Silver 285.1 (92.2) 377.9 214.3 43.4 491.8 45 – First Majestic Silver Dec 31 Silver 258.8 (39.3) 880.7 245.6 91.6 837.4 46 31 Semafo Inc. Dec 31 Gold 233.6 86.5 584.5 295.8 (18.8) 712.5 47 38 Mercator Minerals Dec 31 Base Metals 221.8 (157.4) 278.8 270.5 (130.5) 492.3 48 45 Primero Mining Corp. Dec 31 Gold & Base Metals 206.3 (4.4) 806.4 198.7 51.1 690.6 49 – Veris Gold Dec 31 Gold 201.9 (68.7) 332.1 165.4 (20.6) 359.0 50 – Atlatsa Resources Dec 31 Platinum 195.6 100.0 773.6 117.6 (95.6) 814.1 51 – Lake Shore Gold Dec 31 Gold 192.6 (233.5) 597.9 133.0 (317.9) 823.0 52 – Silvercorp Metals Mar 31 Silver 187.0 43.3 593.5 245.1 104.2 592.6 53 – Lucara Diamond Corp Dec 31 Diamonds 185.9 67.2 254.6 43.1 (7.7) 242.5 54 – Silver Standard Resources Dec 31 Silver 179.9 (231.8) 1,226.9 248.3 57.0 1,357.3 55 47 Gran Colombia Gold Dec 31 Gold 173.2 (37.0) 788.8 141.8 (37.8) 647.4

CONTINUED FROM PAGE 12 A popular way to grow an asset base is of $545.6 million on revenues of $3.66 bil- the takeover as practiced by First lion), Lundin Mining ($140.8 million on Quantum with the acquisition of Inmet 4| revenues of $749.6 million), and Polish Mining and its Cobre Panama develop- Syncrude Canada owner of three mines in the Sudbury Basin ment project. The deal gave the combined Syncrude Canada Ltd. is one of the world’s larger producers of synthetic crude oil from oil sands KGHM International. The latter earned company a 105.4% boost in assets to and the largest single source producer in Canada. $9.7 million on revenues of $1.09 billion. $15.94 billion. Capstone Mining acquired It is located just outside Fort McMurray. Syncrude The best earnings in the base metal sec- the Pinto Valley copper mine in Arizona. was formed as a research consortium in 1964 and construction at the Syncrude site started in tor were generated by Teck Resources. This That move played a part in its 26.4% asset 1973 and officially opened in 1978. Expansions enterprise turned revenues of $9.38 billion growth to $1.96 billion. and upgrades have been ongoing ever since. into net earnings of $1.01 billion. But coal A slightly different business focus can also plays a big part in Teck’s income. Its also enlarge assets. Silver Wheaton, whose coal business earned revenues of $4.11 bil- assets grew 37.6% to $4.51 billion, is no lion, or 43.8% of the total, generating profit longer purely a silver streaming company. 5| before tax that totaled $927.0 million. It has added gold to its portfolio, notably The impact of commodity prices can purchasing half the gold stream from Teck Resources also be felt when looking at the change in Hudbay’s Costancia mine. Teck Resources Limited is a Canadian metals and mining company that’s widely known as one of assets of our Top 40 companies. Suncor, And Hudbay Minerals added to its Canada’s largest diversified resources companies. whose oil sands assets stood at $42.75 bil- asset base by starting both the Lalor gold- The company began as Teck-Hughes Gold Mines lion in 2013, registered only a 7.8% zinc and Reed copper mines. It reported Limited in 1913 to develop a gold discovery at Kirkland Lake, Ontario. In addition to its many increase despite rising oil prices. an asset base of $3.84 billion, up 10.6% historic mining achievements, the company is Companies that had significant gains from 2012. now also known for its many “best in class” envi- in assets made major changes to their There are many ways to look at the Top ronmental and social performance achievements. businesses. B2Gold started production at 40 Canadian mining companies – by rev- the Masbate mine, advanced the Otjikoto enue, assets, earnings, gains and losses. development project, and expanded Readers are invited to examine the tables 6| resources at two other properties. The accompanying this article and note what closer the new projects get to production, stands out for them. PotashCorp the more valuable they are, allowing By any measure, we at CMJ salute all The Potash Corporation of Saskatchewan Inc., also referred to as PotashCorp, is a Canadian cor- B2Gold to increase the value of its asset Canadian miners, especially those that have poration based in Saskatoon. The company was base 241% to $2.38 billion. prospered despite adversity last year. CMJ created by the government of Saskatchewan

14 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com in 1975. In 1989 it became a publicly traded company as the government sold off some of its shares, selling the remaining shares in Top Revenue Gainers 1990. The Saskatchewan potash industry began in the 1950s and 1960s. During the 1990s (C$ millions) PotashCorp expanded by buying up a number Revenue Change of American potash companies. Today it owns Rank Company Type 2013 Revenue 2012 Revenue 2013/2012 assets around the world. 34 AuRico Gold Gold 351.6 86.4 +306.9% 24 B2Gold Gold 560.6 266.9 +110.0% 18 Centerra Gold Gold 972.7 680.5 +42.9% 11 Cameco Corporation Uranium 2,438.7 1,890.7 +29.0% 7| 27 Endeavour Mining Gold 456.6 376.3 +21.3% 10 First Quantum Minerals Copper 3,659.5 3,038.9 +20.4% Canadian Oil Sands 33 Dominion Diamond Corp Diamonds 355.8 298.8 +19.1% Canadian Oil Sands Limited of Calgary is a Ca- nadian company that generates income from 38 Crocodile Gold Gold 309.8 263.6 +17.5% its oil sands’ investment in the Syncrude Joint 3 Suncor (oil sands only) Oil Sands 12,294.0 10,838 +13.4% Venture. PanCanadian Petroleum formed Ca- 31 Uranium One Uranium 398.0 364.0 +9.3% nadian Oil Sands Trust in 1995 with a 10% interest in Syncrude. The company also holds 35 Capstone Mining Copper-gold 342.1 314.7 +8.7% some arctic natural gas interests. 29 Thompson Creek Metals Base Metals 447.4 413.4 +8.2% 4 Syncrude (est) Oil Sands 11,445.8 10,621.6 +7.8% 7 Canadian Oil Sands Ltd Oil Sands 4,208.0 3,905.0 +7.8% Copper & 36 Aura Minerals 340.8 316.6 +7.6% 8| Gold-Silver 23 Osisko Mining Corp Gold 675.6 665.4 +1.5% 21 Lundin Mining Base Metals 749.6 742.7 +0.9% Kinross Gold Kinross Gold Corporation ranks among the 20 New Gold Gold 803.1 815.0 -1.5% Potash/ world’s largest gold companies with mines 1 Agrium Inc. 16,198.8 16,456.3 -1.6% and projects in the United States, Brazil, Fertilizer Chile, Russia, Ghana and Mauritania. The 16 Eldorado Gold Gold 1,157.7 1,181.9 -2.0% company was founded after a merger in 28 Sherritt International Nickel & Coal 448.5 475.3 -5.6% 1993 of three companies, initially owning a mine in British Columbia. In addition expand- 30 Franco-Nevada Corp Gold 412.9 439.8 -6.1% Potash Corp. of Saskatch- Potash/ ing on the worldwide mining market, Kinross 6 7,524.2 8,164.8 -7.8% Gold has also been recognized in Canada as ewan Fertilizer being among the country’s 50 most socially 37 China Gold Int'l Resources Gold 311.7 342.4 -9.0% responsible corporations. Base Metals Teck Resources 9,382.0 10,343.0 -9.3% 5 & Coal Gold & Base Dundee Precious Metals 366.4 406.3 -9.8% 32 Metals 40 Rio Alto Mining Gold 293.7 326.0 -9.9% 9| 19 Pan American Silver Silver 849.2 956.5 -11.2% 8 Kinross Gold Gold 3,892.9 4,436.5 -12.3% Goldcorp 26 Golden Star Resources Gold 496.3 567.0 -12.5% Goldcorp is a gold producer headquartered in Vancouver. The company is engaged in gold 2 Barrick Gold Gold 12,886.3 14,825.8 -13.1% mining and related activities including explo- 14 Agnico Eagle Mines Gold 1,687.6 1,975.2 -14.6% ration, extraction, processing and reclamation. In addition to mining activities in Can- 39 Teranga Gold Gold 306.8 361.0 -15.0% ada and around the world, the organization 22 Silver Wheaton Corp. Silver 727.7 875.1 -16.8% has also received international recognition for 9 Goldcorp Gold 3,797.6 4,799.8 -20.9% being a Socially Responsible Company by foreign governments. 13 Yamana Gold Gold 1,898.0 2,406.9 -21.1% 15 IamGold Corporation Gold 1,181.5 1,497.0 -21.1% 12 Walter Energy Coal 1,916.1 2,471.8 -22.5% 17 KGHM International Copper 1,094.7 1,427.0 -23.3% 10| 25 Hudbay Minerals Base Metals 516.8 702.6 -26.4%

First Quantum First Quantum Minerals Ltd. is a Vancouver- based mining and metals company whose Saskatoon, the company was the world’s third principal activities include mineral exploration, 11| largest uranium producer in 2012, account- development and mining. Known for its mining for 14% of world production. “Cameco” ing activity around the world, the company re- Cameco (Canadian Mining and Energy Corporation) cently received the best mining industry award Cameco Corporation is one of the world’s larg- was formed in 1988 and now operates several at the Zambia International Trade Fair. er publicly traded uranium companies. Based in uranium mines in North America.

August 2014 • Canadian Mining Journal | 15 | Canada’s Top 40 Miners 12| Revenue as % of Assets Walter Energy (C$ millions) Walter Energy, Inc., of Vancouver is one of the Revenue as % world’s leading, publicly traded “pure play” met- Rank Company Type 2013 Revenue 2013 Assets of Assets allurgical coal producers for the global steel indus- 37 China Gold Int'l Resources Gold 311.7 189.6 164.4% try. The company also produces steam coal and industrial coal, anthracite, metallurgical coke, and 26 Golden Star Resources Gold 496.3 335.5 148.0% coal bed methane gas. Walter Energy’s Canadian 38 Crocodile Gold Gold 309.8 241.8 128.1% and European operations consist of mines in Brit- ish Columbia, and a project in Wales in the UK. 1 Agrium Inc. Potash/Fertilizer 16,198.8 16,456.3 98.4% 36 Aura Minerals Copper & Gold-Silver 340.8 362.1 94.1% 40 Rio Alto Mining Gold 293.7 369.4 79.5% 18 Centerra Gold Gold 972.7 1,738.3 56.0% 13| 39 Teranga Gold Gold 306.8 643.1 47.7% 4 Syncrude (est) Oil Sands 11,445.8 27,716.8 41.3% Yamana Gold 7 Canadian Oil Sands Ltd Oil Sands 4,208.0 10,190.0 41.3% Yamana Gold Inc. is a Canadian-based gold 6 Potash Corp. of Saskatchewan Potash/Fertilizer 7,524.2 18,496.7 40.7% producer that began operations in 2003 with gold production, gold development stage prop- 8 Kinross Gold Gold 3,892.9 10,595.3 36.7% erties, exploration properties, and land posi- 32 Dundee Precious Metals Gold & Base Metals 366.4 1,017.4 36.0% tions around the world. Yamana has added several mining properties since its inception with 27 Endeavour Mining Gold 456.6 1,312.2 34.8% the purchase of other gold companies in 2005, 2 Barrick Gold Gold 12,886.3 38,571.4 33.4% 2006 and 2007 and the company’s portfolio 12 Walter Energy Coal 1,916.1 5,758.6 33.3% now includes seven operating gold mines and various other advanced and near-development 14 Agnico Eagle Mines Gold 1,687.6 5,108.2 33.0% stage projects and exploration properties. 23 Osisko Mining Corp Gold 675.6 2,222.0 30.4% 11 Cameco Corporation Uranium 2,438.7 8,039.3 30.3% 19 Pan American Silver Silver 849.2 2,850.5 30.0% 3 Suncor (oil sands only) Oil Sands 12,294.0 42,754.0 28.8% 14| 17 KGHM International Copper 1,094.7 3,853.8 28.4% 15 IamGold Corporation Gold 1,181.5 4,316.1 27.4% Agnico Eagle Teck Resources Base Metals & Coal 9,382.0 36,183.0 25.9% Agnico Eagle Mines Limited is a Canadian-based 5 gold producer with operations in Canada, Fin- 24 B2Gold Gold 560.6 2,379.0 23.6% land, and Mexico and exploration and develop- 10 First Quantum Minerals Copper 3,659.5 15,935.3 23.0% ment activities extending to the United States. “Agnico” is derived from the periodic table of 33 Dominion Diamond Corp Diamonds 355.8 1,761.8 20.2% elements using the symbols for silver (Ag), nickel 20 New Gold Gold 803.1 4,325.0 18.6% (Ni) and cobalt (Co). In 1963, visionary Paul Penna Capstone Mining Copper-Gold 342.1 1,964.7 17.4% became the president of Agnico Mines, and he 35 eventually oversaw the merger of Agnico Mines 21 Lundin Mining Base Metals 749.6 4,565.0 16.4% with Eagle Mines Ltd, a successful gold explo- 13 Yamana Gold Gold 1,898.0 11,650.0 16.3% ration company, enabling the development of Eagle’s Joutel mining complex. The newly formed 22 Silver Wheaton Corp. Silver 727.7 4,521.5 16.1% company became Agnico Eagle Mines Limited. 16 Eldorado Gold Gold 1,157.7 7,452.3 15.5% 31 Uranium One Uranium 398.0 2,576.1 15.4% 29 Thompson Creek Metals Base Metals 447.4 3,178.1 14.1% 15| 25 Hudbay Minerals Base Metals 516.8 3,844.0 13.4% 30 Franco-Nevada Corp Gold 412.9 3,136.2 13.2% Iamgold 9 Goldcorp Gold 3,797.6 30,450.9 12.5% Iamgold Corporation is a Toronto-based in- 34 AuRico Gold Gold 351.6 2,984.1 11.8% ternational gold producer. The company is engaged in the exploration, development, 28 Sherritt International Nickel & Coal 448.5 6,457.8 7.0% and production of mineral resource properties throughout the world.

with projects around the world. Eldorado owns ver, Eldorado’s offices and operations employ 16| and operates a number of mines and is cur- thousands of people worldwide. The Company rently developing a number of other projects. operates as a decentralized business unit with Eldorado Gold The company has more than 20 years of in- the majority of employees and management be- Eldorado Gold Corporation is a Canadian- ternational experience in safely building and ing nationals of the country where offices are based, intermediate gold mining company operating mines. With headquarters in Vancou- located.

16 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com 5000280A AEL 2012 COAL Canadian Mining 207x277 FA.pdf 1 7/3/14 10:53 AM

Revenue as % of Assets (C$ millions) | Canada’s Top 40 Miners

17| 18| 19| Pan American Silver KGHM International Centerra Gold Pan American Silver Corporation is a Canadian- KGHM International is one of the larger produc- Centerra Gold Inc. is a gold mining company based based mining company with mining interests ers of copper and silver in the world. The mining in Toronto. The company was formed and went here and around the world. Pan American Silver is & metallurgy company is a subsidiary of KGHM public in 2004. Centerra owns and operates gold- the continuing corporation of Pan American En- Polska Mied of Poland. producing mines and it also has interests in gold ergy Corporation, which was incorporated under exploration properties. the Company Act (British Columbia) on March 7, 1979. The Company underwent two name changes: in September 1984 to Pan American Minerals Corp., and finally in April 1995 the Com- Top Earners (C$ millions) pany was renamed Pan American Silver Corp. Rank Company Type 2013 Net Earnings 2012 Net Earnings Earnings Change (Loss) (Loss) 2013/2012 4 Syncrude (est) Oil Sands 2,268.5 2,646.6 -14.3% 20| 3 Suncor (oil sands only) Oil Sands 2,040.0 468.0 +335.9% New Gold Potash Corp. 6 Potash/Fertilizer 1,838.6 2,141.4 -14.1% New Gold Inc. is a multinational mining company of Saskatchewan with gold, silver and copper- containing assets. It 1 Agrium Inc. Potash/Fertilizer 1,094.9 1,542.9 -29.0% engages in exploration, development and poly- metallic production activity around the world. 5 Teck Resources Base Metals & Coal 1,010.0 1,140.0 -11.4% The name New Gold Inc. goes back to 1980. 7 Canadian Oil Sands Ltd Oil Sands 834.0 973.0 -14.3% 10 First Quantum Minerals Copper 545.6 1,926.0 -71.7% 14 Agnico Eagle Mines Gold 418.7 320.2 +30.8% 21| 22 Silver Wheaton Corp. Silver 386.8 603.6 -35.9% Lundin Mining 11 Cameco Corporation Uranium 317.7 251.8 +26.2% Lundin Mining, headquartered in Toronto, is a multinational minerals company with operations 21 Lundin Mining Base Metals 140.8 126.9 +11.0% in Sweden, Ireland, Spain, Portugal, the Demo- 24 B2Gold Gold 69.3 53.5 +29.5% cratic Republic of Congo, and Russia. Lundin 37 China Gold Int'l Resources Gold 65.6 79.3 -17.3% Mining was founded in 1994. 39 Teranga Gold Gold 58.3 111.4 -47.7% 33 Dominion Diamond Corp 36.3 26.2 +39.5 22| 34 AuRico Gold Gold 34.2 182.2 -81.2% 40 Rio Alto Mining Gold 31.7 103.4 -69.4% Silver Wheaton Silver Wheaton Corp. is a pure play mining 32 Dundee Precious Metals Gold & Base Metals 13.6 30.7 -55.7% company and one of the larger in the business 30 Franco-Nevada Corp Gold 12.1 105.7 -88.6% of silver streaming. The company was established in 2004. 17 KGHM International Copper 9.7 107.0 -90.9%

18 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com 23| Top Asset Gainers Osisko (C$ millions) Osisko is a Canadian precious-metals mining company headquartered in Montreal. It oper- Rank Company Type 2013 Assets 2012 Assets Asset change 2013/2012 ates in Canada with a focus on gold mines. The company is named after Quebec’s Osisko Lake 3 Suncor (oil sands only) Oil Sands 42,754.0 39,649.0 +7.8% because of its historical significance. The lake, lo- 2 Barrick Gold Gold 38,571.4 48,902.3 -21.1% cated within Quebec’s portion of the Abitibi gold belt in the region of Rouyn-Noranda is where in 5 Teck Resources Base Metals & Coal 36,183.0 35,065.0 +3.2% 1920 Noranda founder Edmond Horne made his 9 Goldcorp Gold 30,450.9 31,908.4 -4.6% first major mineral discovery, a deposit that became known as the Horne Mine. 4 Syncrude (est) Oil Sands 27,716.8 27,665.1 -0.1% 6 Potash Corp. of Saskatchewan Potash/Fertilizer 18,496.7 18,752.2 +1.4% 1 Agrium Inc. Potash/Fertilizer 16,456.3 16,279.2 +1.0% 24| 10 First Quantum Minerals Copper 15,935.3 7,762.5 +105.3% 13 Yamana Gold Gold 11,650.0 12,154.2 -4.1% B2Gold B2Gold Corp. is a Vancouver-based gold pro- 8 Kinross Gold Gold 10,595.3 15,329.1 -30.9% ducer with operating mines and a strong port- 7 Canadian Oil Sands Ltd Oil Sands 10,190.0 10,171.0 -0.1% folio of development and exploration assets. The company’s corporate objective is to op- 11 Cameco Corporation Uranium 8,039.3 7,431.1 +8.2% timize production at existing mines and build 16 Eldorado Gold Gold 7,452.3 8,165.9 -8.7% further shareholder value through the exploration and development of existing projects 28 Sherritt International Nickel & Coal 6,457.8 6,587.8 -2.0% and additional accretive acquisitions. 12 Walter Energy Coal 5,758.6 5,941.5 -3.1% 14 Agnico Eagle Mines Gold 5,108.2 5,413.9 -5.6% 25| 21 Lundin Mining Base Metals 4,565.0 4,110.2 +11.1% 22 Silver Wheaton Corp. Silver 4,521.5 3,285.0 +37.6% HudBay Minerals 20 New Gold Gold 4,325.0 4,412.2 -2.0% HudBay Minerals Inc. is a Canadian mining IamGold Corporation Gold 4,316.1 5,295.6 -18.5% corporation. Founded as Hudson Bay Mining 15 & Smelting Co., Limited (HBMS), it has been 17 KGHM International Copper 3,853.8 3,801.1 +1.4% exploring and mining in Manitoba for more than 80 years. Much of its history has centred 25 Hudbay Minerals Base Metals 3,844.0 3,476.5 +10.6% around Flin Flon. The first claim was registered 29 Thompson Creek Metals Base Metals 3,178.1 3,512.5 -9.5% in 1915. It took more than a dozen years to bring the mine into production. 30 Franco-Nevada Corp Gold 3,136.2 3,243.9 -3.3% 34 AuRico Gold Gold 2,984.1 3,274.5 -8.9% 19 Pan American Silver Silver 2,850.5 3,496.4 -18.5% 26| 31 Uranium One Uranium 2,576.1 2,807.0 -8.2% 24 B2Gold Gold 2,379.0 696.8 +241% Golden Star Golden Star Resources Ltd is a mid-tier Canadian 23 Osisko Mining Corp Gold 2,222.0 2,687.9 -17.3% gold mining company based in Toronto. The 35 Capstone Mining Copper-Gold 1,964.7 1,554.6 +26.4% company was founded in 1983. 33 Dominion Diamond Corp Diamonds 1,761.8 1,655.5 +6.5% 18 Centerra Gold Gold 1,738.3 1,642.2 +5.9% 27| 27 Endeavour Mining Gold 1,312.2 1,779.9 -26.3% 32 Dundee Precious Metals Gold & Base Metals 1,017.4 1,001.4 +1.6% Endeavour Mining Endeavour Mining Corporation is a gold pro- 39 Teranga Gold Gold 643.1 581.4 +10.6% ducer based in Vancouver with mines located 40 Rio Alto Mining Gold 369.4 364.1 +1.5% around the world. The company is listed on the Toronto Stock Exchange as well as the Austra- 36 Aura Minerals Copper & Gold-Silver 362.1 438.5 -17.4% lian Securities Exchange. 26 Golden Star Resources Gold 335.5 676.0 -50.4% 38 Crocodile Gold Gold 241.8 493.0 -52.0% 28| 37 China Gold Int'l Resources Gold 189.6 257.6 -26.4%

Sherritt interests include mining, thermal coal production, tions. Sherritt licenses its proprietary technologies Sherritt International is a Canadian resource com- oil and gas exploration and production. Most of and provides metallurgical services to mining and pany based in Toronto. The company’s business the company’s profit comes from mining opera- refining operations worldwide.

August 2014 • Canadian Mining Journal | 19 | Canada’s Top 40 Miners

29| 30| 31| Uranium One Thompson Creek Metals Franco-Nevada Uranium One is a Canadian-based uranium mining Thompson Creek Metals Company is one of the Franco-Nevada Corporation is a Toronto-based company with operations in Canada and around world’s larger pure play base-metal mining com- company involved with gold mining and other the world. The company was founded in 1997. panies. The company was founded in 1993 and commodities and natural resources. is based in Toronto. 32| Dundee Precious Dundee Precious Metals is a Canadian-based, international mining company engaged in the acquisition, exploration, development and mining and The Great Lakes St. Lawrence Seaway System processing of precious metal properties. The company’s business objectives are to identify, acquire, finance, develop and operate low-cost, long-life mining properties. 33| Dominion Diamond Dominion Diamond Corporation is a Toronto- based diamond mining company. 34| AuRico Gold Just add water AuRico Gold is a Halifax-based gold mining and exploration company. It was founded in 1986. Shipping Bulk? Water way to go!

Highway H O - your gateway to the 2 35| agricultural and industrial heartland of North America. With plenty of capacity, Capstone Capstone Mining Corp. is a Canadian-based base- our System provides seamless flow of metal mining company, focused on copper. The goods that saves you time and money. company’s strategy is to continue to grow with The Great Lakes St. Lawrence Seaway mineral resource and reserve expansions and exploration, and through acquisitions in politically stable, System represents 300 years of history mining-friendly regions. and we think some traditions are worth keeping. 36| Highway H2O - continues to play a valuable role in the growth and prosperity Aura Minerals of the North American economy. Cost Aura Minerals Inc. is a Canadian mid-tier gold and effective, safe and dependable delivery copper production company focused on the development and operation of gold and base metal makes Highway H2O a competitive projects in the Americas. The company’s producing choice for your supply chain. A fresh assets include the copper, gold and silver. approach to your transportation needs. www.hwyH2O.com 37| China Gold China Gold International Resources Corp. Ltd. is a mining and exploration company based in Vancou- ver. The Company operates two producing mines and its corporate objective is to expand its resource base and grow production both at its current mining operations and through an acquisition and development strategy targeting international projects.

20 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com 38| Earnings as (C$ millions) Crocodile Gold % of Revenue Crocodile Gold is a Canadian mining company op- Rank Company Type 2013 2013 Net Earnings as erating in the Northern Territories and other parts Revenue Earnings (Loss) % of of the world. Revenue 22 Silver Wheaton Corp. Silver 727.7 386.8 53.2% 38 Crocodile Gold Gold 309.8 95.6 30.9% 39| 30 Franco-Nevada Corp Gold 412.9 12.1 29.3% 14 Agnico Eagle Mines Gold 1,687.6 418.7 24.8% Teranga 6 Potash Corp. of Saskatchewan Potash/Fertilizer 7,524.2 1,838.6 24.4% Teranga Gold Corp. is a Canadian-based gold 37 China Gold Int'l Resources Gold 311.7 65.6 21.0% company. 4 Syncrude (est) Oil Sands 11,445.8 2,268.5 19.8% 7 Canadian Oil Sands Ltd Oil Sands 4,208.0 834.0 19.8% 39 Teranga Gold Gold 306.8 58.3 19.0% 21 Lundin Mining Base Metals 749.6 140.8 18.8% 18 Centerra Gold Gold 972.7 162.4 16.7% 40| 3 Suncor (oil sands only) Oil Sands 12,294.0 2,040.0 16.6% Rio Alto 10 First Quantum Minerals Copper 3,659.5 545.6 14.9% Rio Alto Mining is a Vancouver-based international 11 Cameco Corporation Uranium 2,438.7 317.7 13.0% gold producer. The company is engaged in the ex- 24 B2Gold Gold 560.6 69.3 12.4% ploration, development and production of mineral 5 Teck Resources Base Metals & Coal 9,382.0 1,010.0 10.8% resource properties. 40 Rio Alto Mining Gold 293.7 31.7 10.8% 33 Dominion Diamond Corp Diamonds 355.8 36.3 10.2% 34 AuRico Gold Gold 351.6 34.2 9.7% Most Information for the company profiles 1 Agrium Inc. Potash/Fertilizer 16,198.8 1,094.9 6.7% provided by the Wikipedia Foundation. 32 Dundee Precious Metals Gold & Base Metals 366.4 13.6 3.7% 17 KGHM International Copper 1,094.7 9.7 0.8%

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August 2014 • Canadian Mining Journal | 21 | Development

TerraX geologist Clinton Davis glasses a core sample. All photos by Bill Braden.

Waking the

Historic site still holds promise GiantBy Northern Correspondent Bill Braden

22 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com The Giant Yellowknife Gold Mine yielded more than seven million wo hands wide and it goes on forever!” is what ounces over a 50-year life (courte- sy NWT Mining Heritage Society). prospector C.J. Johnny Baker is rumoured to have bragged of the gold-riddled quartz vein he “ and Herb Dixon found on the rocky north arm of Great Slave Lake in 1935. Twelve years later their find became the Giant TYellowknife gold mine, the largest of a string of historic producers that fostered a 60-year, 14 million-ounce legacy. Then, with Giant’s closing in 1998 and the neighbouring Con Mine’s in 2004, the prolific Yellowknife gold camp went into hibernation. Today, after a decade-long snooze, it may be waking up again. A spunky junior, TerraX Minerals Inc., is tickling the sleeping Archaen greenstone belt out of its slumber and could yet again prove up the old adage: your new mine is quite likely next to your old one. “We’re in the shadow of the headframe,” says TerraX President along the strike trend for both Con and Giant, and the region still Joe Campbell, as his trio of exploration programs is within sight had a lot of exploration potential. of the old, skeletal Giant headframe. “Once we made the purchase we started our research. We got “If you take any of the old gold camps in Canada - Timmins, great help from the NWT Government’s Geoscience Office in Val d’Or, Red Lake - they’re [geologically] almost identical to the Yellowknife, which was archiving all the Giant data as those Yellowknife camp,” says Campbell. “All of those camps have a offices were being prepared for teardown as part of the Giant history of multiple discoveries along the strike length. Yellowknife clean-up,” he relates. has had much less exploration along the trend in comparison.” “That information included Northbelt, and we were able to Campbell is chasing a serendipitous train of events, billed the copy hundreds of drill holes and logs and dozens of reports.” Yellowknife City Gold Project, uncovered in a quest that began The real treasure was rescuing 30 000m of historic core from in earnest only a year and a half ago. some 200 Northbelt holes, all neatly stacked on the Giant property - and awaiting the bulldozer. Bankruptcy bid yields big return “This is millions of dollars of exploration work that literally Campbell partnered with fellow geologist Thomas Setterfield fell into our laps. We were vibrating for a few days,” says in 2008 to form TerraX Minerals Inc., pooling over six decades Campbell. “It was a very quick change from what we thought of experience with companies including Noranda, Western would be an initial grassroots exploration program to one that Mining Corp., and Monster Copper Corp. TerraX’s first play looked like we’d been exploring for five years.” was a joint venture with Kaminak Gold Corp’s Needle Lake property in Nunavut. Three Targets However, it was the bankruptcy sale in early 2013 of Century TerraX is looking at three prospects, all of which have historic Mining Corp. (after its failed efforts at the Lamaque gold mine in drill data, over the 65,000 hectares it owns or options. Quebec) that launched TerraX’s Yellowknife program. Among its The main target is the 36.5km Northbelt group which con- portfolio was an idle claim bundle called Northbelt that included tains a shear, long recognized as an extension of the Yellowknife the long-abandoned Crestaurum mine just 15km north of Giant. gold belt (in the 1940s, it was dubbed the “Barney Shear” after a “Northbelt was by far the best property in their portfolio so local prospector’s dog). In 2013 the TerraX team located 250 we put a bid on it,” says Campbell. They didn’t have much to go historical drill hole collars and surveyed 156 of the holes associ- on; there was no public record of historical drilling results but ated with known deposits. their $211,000 gamble was driven by two certainties: it was right “If you’re a betting man on where to find a new deposit, this

TerraX has logged and sampled some 30,000m of historic drill core, advancing its gold project by years and millions of dollars.

Joe Campbell, TerraX President, at a public consultation session in Yellowknife, 2013.

August 2014 • Canadian Mining Journal | 23 | Development

Northtech driller John is obviously an area that you’d want to work on. It’s wide open - we Paquin pulls core at have 13 kilometres of strike length, and hundreds of metres of dip TerraX’s Northbelt drill to explore. It’s our favourite place to look.” program in July, 2014. Last year, TerraX re-assayed historic core and released results ranging from 1.9 to 3.79 grams per tonne over intersections of up to 28m. A second target is the old Crestaurum mine, started and soon stopped in the 1940s. Now just a headframe and few crumbling buildings; the 130-m shaft and one crosscut have watered up and the shaft was used as a metal dump. But 187 old drill collars have been traced, and a former road links it to the Ingraham Trail. Its historic high grades and free-milling ore make it a strong potential; one outstanding drill core yielded 62.90 g/t over five metres, less than 50m from surface. A third prospect is Homer Lake. It’s an unexpected silver/base metal anomaly in the group, showing intriguing returns from 2013 surface sampling. Drilling in 2014 confirmed 3.42m of 3.41 g/t gold, 69.3 g/t silver, 3.67 per cent lead and 3.17 per cent zinc. For now, says Campbell, it remains in the background of TerraX’s plans. Top of mind for Yellowknifers is whether a new development would mean a repeat of Giant’s dark legacy -- tonnes of toxic arse- nic trioxide (now under remediation by the federal government) the byproduct of the roasting process used to crack the refractory ore. Campbell says the Crestaurum ore is free-milling, but they have yet to determine the nature of the Barney geochemistry. “But even if we had Giant-type ore, we would never process it the way that Giant did,” he explains, as there are better methods of processing refractory gold, while free-milling is less expensive, gets better recoveries, and there are no toxic by-products.

Infrastructure advantage “There’s not another project in the Northwest Territories that has the advantages this project has,” says Campbell. “The access to grid power, highways, the airport, and being next to a mine service centre - the City of Yellowknife - are huge advantages.” He cites the ease of running an airborne geophysics program last year from the nearby Yellowknife airport, and in winter being to drive a mere 15km to drill sites, as major cost and time savers. Despite the financing drought that’s plaguing all juniors, TerraX’s story has attracted $3.6 million since early 2013, enough

Others Seek Gold In The Shadows New Discovery Mines Ltd. Other gold hunters are working the shadows of former producers in the rich gold belt arcing north of Great Slave Lake. “Absolutely, there is potential out there, in the north part of the belt that hasn’t been explored,” says geologist Edith Martel of the NWT Government’s Geoscience Office. “All of the same settings [as the Giant-Con trend] exist.” Tyhee Gold Corporation’s (V-TDC) Yellowknife Gold Project has bundled property around and including the historic Discovery Mine, 90km north of Yellowknife, a high-grade, one-million ounce producer from 1950 to 1969. Tyhee has been exploring and permitting the project for some two decades, projecting a 2016 start- up for a 4,000 tpd free-milling mine over 15 years, on measured and indicated resources estimated at 1,715,000 ounces, plus

24 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com to finance this year’s 5,000-m drill program and stay in the black through the winter. Next year, if the results and the market stay with him, Campbell is projecting a $5-million program to triple that amount of drilling, plus more geotech and environment baseline work. Campbell and his team have made extensive efforts to open the project up to the community and First Nations, a standard condition of getting permits. It also helps set up good relations with recreational users of the TerraX claim block. One good- will move was to provide funding for six user groups, including Scouts and snowmobilers, to clean up years of garbage along some of the trails. The City of Yellowknife helped too, waiving the tipping fees at the dump. Community response so far, says Campbell, has been very positive -- not unexpected in a town with decades of gold mining heritage. He also credits industry and the NWT Government with fostering a mining-friendly climate. “We’ve been the recipient of that hard work on their part and very appreciative of it.” But he’s also cautious that not everyone will be on side and he wants to keep communications open. “We’d be fools to believe that everybody wants to go down that path. All we can do is keep our door open, keep them informed and give them a place to help us do it right.” Campbell has a prudent eight- to 10-year work plan to balance a big vision for the future. “Things don’t happen tomorrow. Our vision is to carve a timeline of three to five years to do some relatively intensive exploration to prove up deposits. We feel that within that timeline we can accurately define something and get on to quantify- ing it.” He anticipates as many as five more years to develop, permit and finance a plan before production could start. Would Campbell and his TerraX team pour the first gold? Conventional thinking calls for juniors to advance deposits to attract a buy- out or a major partner, but Campbell may not stop there. “There certainly is the expertise in TerraX to bring a project to development, but we would need a lot of multi-disciplinary help to do it. It would be a more challenging path, but not one we’d be afraid to go ahead and do.” CMJ

inferred resources of 487,000 ounces. Tyhee has also consolidated several properties close to the Giant property. It has joint-ventured with Williams Creek Gold Ltd. (V-WCX) on the Big Sky parcel, announcing encouraging results from geotech and sampling programs in 2012. Halfway between Yellowknife and Tyhee’s property, New Discovery Mines Ltd. is a private venture lead by Dave Webb (for- merly President and CEO of Tyhee) focused on the Mon property. The very high-grade deposit has seen a diverse run of small scale, seasonal owners from the 1930s to the 1990s. New Discovery has recently secured permits that will enable it to launch a proposed $5-million exploration program on ground that Webb says has all the classic signatures of the region’s prolific gold geology.

August 2014 • Canadian Mining Journal | 25 | Development

tofop what’s below Miner keeps close watch underground By Correspondent David Godkin

esium is another one of those Bernic Lake in Manitoba, said the prob- elements that has found a mul- lem was that conventional, solids-based titude of uses since it was dis- drilling fluid affects well stability and con- covered in mineral water more trol but: “Cesium formate brines are natu- Cthan a 150 years ago in Durkheim, rally very heavy and with no solids in the Germany. Among them, it increases the fluids so the risk of losing well stability electrical conductivity of vacuum tubes, and control is much reduced. As a result, but it also helps us keep time because it’s there have been no well control safety used to help ensure the accuracy of the incidents in over 150 deep gas well opera- world’s atomic clocks. Plus, it’s used to tions using cesium formate brines.” regulate cell phone transmissions and the And Brits should know. His parent information flow on the Internet. company Cabot Corporation owns and But in a somewhat more unusual appli- operates TANCO mine. According to cation, cesium formate brine is also used to TANCO’s mill metallurgist Claude lubricate drilling equipment on North Sea Deveau, the mine shifted its attention to drilling rigs where prior to its use, an aver- cesium when a “boom and bust market” age of one accident occurred on almost reduced the demand for tantalum used in every gas well built in the North Sea. high quality electronic capacitors. Will Brits, Facility Manager for Meantime, demand for lithium used to TANCO Mine’s cesium operation at cast automobile engines also tanked along

26 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com with the auto industry in 2008/09. “That,” is critical to ensure that the person doing says Deveau, “really had an impact on the the bolting has scaled the area properly.” operations here.” The back of the mine is also carefully monitored using custom designed Giraffe Making the most of what you’ve got… aerial lifting devices; ventilation is down- Today, cesium ores are routinely shipped to cast through the original Jack Nutt shaft Russia for the generation of electricity and then upcast through the decline to employing electrically conducting fluids produce a fresh air volumes exceeding (magnetohydrodynamics). Getting to the 3,400 m3 per minute. ore required sinking a single shaft and two In any R and P mining project, pillars ventilation raises into the pegmatite 60m of material are left to support the roof below Bernic Lake. Actual mining is car- overburden while the open areas are ried out using the room and pillar method, extracted. The big question at TANCO: and interestingly enough, says Deveau, Could crews extract the pillars themselves? actually benefits from the mine’s hard rock The answer depends upon the original foundation. “This technique is best utilized selection of optimum pillar size. Generally, in flat lying ore bodies in an environment the size of the room and pillars should be where you don’t have a lot of stresses from about equal. Make them too small and the the surrounding rock,” he explains. mine will collapse; make them too large Deveau adds it’s because the ground is and you end up leaving large quantities of so competent that the rooms at TANCO valuable material behind. are so large. Originally the rooms at Over the years, “rock docs” have ana- TANCO were 16m square. Eventually rock lyzed the stresses the pillars at TANCO mechanics studies indicated the room size would need to withstand in order to sup- could be increased to more than 22m port the roof and allow partial pillar square by shaving the pillars. Ore extrac- extraction. Their conclusion: pillar extraction itself is done in three phases: first the tion could occur, but within limits. “This top level, followed by extraction at the is not a caving method,” says Deveau. lower level. Currently TANCO is mining “You have the lake on top of the mine so the sill in between the two levels. essentially you have to ensure the integrity In typical room-and-pillar mining, of those pillars and the back of the mine. material is extracted across a flat plane, Everything’s got to support itself.” creating horizontal arrays of rooms and pillars. How much material can be Meeting the human challenge… mined depends on the nature of the TANCO crews rely on a single MacLean material, height of the pillars and roof bolter to secure the integrity of the mine’s conditions. But the biggest factors, says roof, says Deveau. Mining is carried out Deveau, is safety. using two machines: an Atlas Copco “You have to consider the width to hydraulic jumbo for drifting, and a single height ratio of the pillars, back conditions boom Atlas Copco Simba long-hole rock and geological structures, stress and antic- drill for benching. Standard features on ipated movement after mining. All this is the Atlas Copco include an articulated critical to the stability of the mine.” carrier with four-wheel drive powered by The roof at TANCO averages 20m a Deutz diesel engine, front and rear above the current working levels and in mounted stingers and mechanized rod places reach 30m. Due to the nature of handling system. the ore and the R & P mining method, “We also use 30-tonne ore trucks to rock bolting is rarely required, but when transport ore to the transfer raise. From it is, says Deveau, TANCO is careful to the loading pocket it’s hoisted to surface get it right. with the use of a double skip system. “Rock types like spodumene are very Those two ore bins on surface have a stor- hard and very difficult to get supported as age capacity of 450 tonnes.” it has a very dominant cleavage zone. After Where crushers have changed over the blasting the bolters are sent to support the mine’s 60-year history, Deveau says the Production of Cesium at TANCO Mines Bernic Lake operation. back when blasting haulages and drifts. It processing side of the operations remained

August 2014 • Canadian Mining Journal | 27 | Development

pretty much the same: tantalum was pro- and Water Stewardship branch has resist- installed at strategic pillars within the mine cessed through gravity concentration and ed calls to mitigate potential environmen- are updated hourly. “In the event of a cata- spodumene primarily through flotation. tal problems by taking over the opera- strophic failure, changes in stress within By contrast, pollucite is ground down to tions. For its part, TANCO applied for the pillars will be noticed and the situation 75 microns and then subjected to acid environmental permits to dam and drain can be dealt with appropriately by evacuat- leaching and other chemical processing to the lake above the mine, in order to relieve ing the mine,” says Deveau. Extensometers produce cesium chemicals. pressure on the pillars so that mining installed at strategic places within the back Deveau says 80 people oversee the could continue. of the mine measure microscopic move- entire mining operation, from engineers to More immediately, stress meters ment within the bedrock. CMJ equipment operators to support staff. Fully equipped machine and diesel repair shops, and equipment repair bays, maintain the So far very little has happened to disrupt the production of cesium. mining and processing equipment at peak In a typical day TANCO produces 100 tonnes of cesium ore, which is transported to efficiency, and a large inventory of spare market as a liquid either in totes or in barrels by truck. The end of tantalum production parts is held in the company warehouse. last year has also simplified process controls at the mine. No longer concerned about Still, things haven’t always run smoothly providing density control in the heavy medium circuit, flow and density control in the for staff. The end of tantalum production at tantalum cleaner circuit, attention is now focussed on the integrated control systems the mine last year forced TANCO to cut its within the mill itself. $1.5 million payroll by laying off 28 union- As precise as the final products are – whether it’s drilling fluid to withstand gas- ized workers, including miners, hoistmen well pressures in the North Sea or atomic clocks in Bern, Switzerland or London, and mechanics. Meantime, environmental England, precision is equally critical back where it all begins at TANCO Mine in issues were also raised. A local wilderness Manitoba. committee complained to the Manitoba In particular, the highly complex and precise nature of cesium end-products government that TANCO’s decision to requires careful analysis on the assay side, says Deveau. reduce the pillar width at the mine from 15 X-ray fluorescene, atomic absorption spectrophotometry and metallurgical bal- m down to 7.5m significantly lowered their ances computed on an IBM microcomputer system all play a role in the assessment strength. This, they argued, risked collapse of the ore body at TANCO. of the entire mine and significant environ- “You have to constantly monitor cesium values inside the pollucite mineral,” says mental damage to the lake. Deveau. “That means you have to have your assay lab working at all times.” So far the government’s Conservation

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Lower Bowl Frame of secondary crusher in Kamloops BC awaiting to be transported to LONGIn for the Copper Mountain Mine site.

CopperH MountainAUL Mine sets up for the future By Russell Noble

hen it comes to a name, commenced production in the summer of a significant achievement” says O’Rourke. “Copper Mountain” says it 2011, on budget and on schedule. As O’Rourke just mentioned, the all. In fact, with more than As Jim O’Rourke, Copper Mountain’s Copper Mountain project is a complex five billion pounds of cop- Chief Executive Officer, says, “Deciding undertaking; not only because of the shear per under foot, what else on a name for the mine was easy… it’s size of the property, but also because of Wcould the owners of the Copper Mountain what came afterwards that has made life the scope of work that called for creating Mine have possibly called their flagship on the mountain more interesting.” a ‘super pit’ mine from three existing pits. property? Like all mines, O’Rourke says there Understandably, making the decision That decision to name the mine were, and still are many challenges to mak- to create a massive pit required proof of “Copper Mountain” was made more than ing things happen as planned so that at the continuity of mineralization and that’s seven years ago when the property was end of the day, everyone goes home safe. why O’Rourke says the company spent so acquired in 2006, which included an “It’s every miner’s desire to work safely much time in the early stages studying 18,000-acre land package located about in a safe environment and that’s some- and blending historic drill data from the 20km from Princeton. The mine has a thing we’ve strived for at Copper Mountain exiting pits with new exploration. strategic alliance with Mitsubishi since day one. Because of the mine’s size With such a massive resource at stake, Materials Corporation who own 25% of and complexity however, it’s sometimes the company helped confirm its future by the project and provides the off-take been a challenge to keep an eye on every- employing a three-pronged exploration agreement for 100% of the concentrate. thing that’s going on around the site but strategy involving initial targets, secondary Mitsubishi Materials also helped secure our team has done an outstanding job at targets, and finally deep porphyry targets. an attractive and favourable debt financ- making safety a top priority. To date, the Drilling initially started at the site in ing which was used to initiate construc- mine has gone 330 days and counting January 2007 and focused primarily on tion. The $438 million development with no LTI’s, (loss time injuries) which is providing additional verification of min-

30 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com 3D schematic of secondary crusher.

eral continuity. At the end of the year, Copper Mountain Mining reported on Overview of new the Titan 24 Deep Penetration Geological secondary crusher facility, new Survey on a 13km square area over the connecting conveyor three existing pits, and concluded conti- systems, and new nuity of mineralization between the pits drive and transfer. and at depth. The results showed that the deposit at the site is classified as an alkali porphyry copper deposit with a gold/silver admix- ture. As mentioned earlier, the site contains a massive resource and over a predicted 17-year mine life, it will produce 1.47 billion pounds of copper, 452,000 ounces of gold, and 4.5 million ounces of silver. The proven and probable mineral reserve aggregate is 217 million tonnes, been estimated at 582Mt grading at 0.21 pit’ was viable. In addition, the mine con- averaging 0.27 per cent Cu containing 1.3 per cent Cu for the combined total of 5.3 tinues to have significant exploration billion pounds of copper using a 0.12 per billion pounds of copper. potential that will need to be explored cent Cu cutoff. Measured and indicated O’Rourke says that a total of about 106 over the next few years to fully appreciate resources total 442Mt grades at 0.26 per 000m of drilling was required to help the property’s full development potential. cent Cu while inferred resources have determine that a new and merged ‘super The deposit remains open laterally and at

August 2014 • Canadian Mining Journal | 31 | Development The lower main The Lower Main frame being lifted frame is the largest into position using a component piece of specialized crane at the secondary the Copper crusher and weighs Mountain Mine site. a little over 100 tonnes. Cranes were used to load the Lower Main Frame from the rail car to the specialized transportation truck, which then transported the piece to the mine site over a 5 day period at night to avoid traffic on the roads.

depth and numerous exciting exploration and as mining activities continue to shift High Performance Raptor 2000 crusher is targets have been identified in and around around the pit, the machines are being the largest cone crusher on the market and the property. required to move more and more material because of its size, it also called for the con- From that point, O’Rourke said “it’s every day. Our mobile fleet maintains a struction of a proper facility to house it. been onward, outward and downward” as mechanical availability of approximately In fact, not just a pad for it to sit on but the company has steadily been working to 85% which is favourable for international a separate 10-storey-high building located make its Copper Mountain Mine the talk mining standards,” says O’Rourke. in front of the process plant, near the and envy of mining companies around During the second quarter of 2014, a mine’s coarse ore stockpile. Naturally the the world. total of 17.1 million tonnes of material building also features a very thick con- With such steady advancement in con- was mined, including 4.6 million tonnes crete foundation to support the 100-tonne- struction and now production, O’Rourke of ore and 11.5 million tonnes of waste. plus crusher. credits much of the company’s success in The projected life-of-mine strip ration is 2 Construction of the facility was a major these areas to the fleet of equipment it has to 1 but slightly higher in the earlier years. undertaking but Jim O’Rourke says it was and maintains on site. During the 2014 second quarter, the mine relatively easy when compared to the logis- In addition to utilizing a conventional moved an average of approximately tics of getting the crusher to the site. crushing, grinding, and flotation system 188,250 tonnes of material per day, which For starters, the unit was built in to produce copper concentrate with gold has increased with the addition of two Bucarest, Romania, and had to be shipped and silver as a bonus, the company also new haul trucks that were recently pur- from there to Princeton, a total of approx- has a mobile mining fleet worth over $100 chased and added to the fleet imately 9200km. Shipping anything that million, consisting of two Komatsu PC In keeping with the company’s goal to distance, let alone something weighing 8000 hydraulic shovels, an Ex 5500 Hitachi stay in touch with modern technology to more than 100 tonnes, is a monumental hydraulic shovel, fifteen 240-ton Komatsu maintain its high production expecta- task and here’s what Jim O’Rourke says 830E haul trucks, six 260–ton Euclid haul tions, Copper Mountain Mining has just was involved. trucks, one Komatsu WA 1200 loader, two completed the purchase and installation “Component pieces of the crushing unit PV271 Atlas Copco rotary drills, two of a secondary crusher to help ensure that are extremely large and heavy so they had PV351 Atlas Copco rotary drills, and a the mill would operate consistently at the to be scheduled to arrive on site separately fleet of other support equipment. designed throughput rate of 35,000 tonnes for assembly. The component parts of the As can be expected, building a ‘super per day or greater. Raptor 2000 are so heavy that they had to pit’ the size of the one at Copper Mountain O’Rourke explained the secondary be shipped from Bucarest to Italy, and to takes its toll on equipment, but Jim crusher will process all of the ore entering the Port of Halifax for offloading onto land O’Rourke credits the performance of his the mill to below 2.0 inches in size, there- and then transported via train to arrive in machines to the quality of the products in by allowing ore to flow faster and more Kamloops, where they were then offloaded the first place, but also to his fleet opera- easily through the front end of the process onto specialized “Over-sized load” trucks tors and the attention to routine service plant which would result in more copper for transport to the mine.” and maintenance. production. “Even all of the bridges they crossed “We’re moving a lot of material now At a cost of $40 million, the FLSmidth had to be reengineered to ensure that the

32 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com move was made safely and that the bridg- represents a 25% growth from 2013 pro- ment like this, it’s no wonder miners es could handle the weight.” duction levels. During the quarter, the around the world are keeping an envious The lower mainframe is the largest mill achieved 90.2 per cent availability eye on Copper Mountain. component piece of the secondary crush- and averaged a total of 30,450 tpd Looking to 2015, O’Rourke concludes er and due to its weight, special permits throughput of which approximately that Copper Mountain’s management will and a specialized transport truck was 12,500 tpd of the mill feed was crushed to be focused on strategic growth for its required to move the piece of equipment. minus two inches and represents a four shareholders through organic growth on Cranes were used to lower the unit per cent increase from the first quarter. the property and accretive opportunities from a rail car to the truck, which then With continued operational improve- in politically stable jurisdictions. CMJ transported the component to the mine site over a four-day period at night to help avoid traffic on the roads. The highway was partially blocked off in sections during its travel to the mine site, so an extensive traffic-management plan was also required. Total distance by truck from Kamloops to the mine site was approximately 200km at 10km/hour for five hours each night. It was a slow and tedious journey but now that it’s in its new home, the lower bowl assembly and the upper mainframe of the crusher have been installed and the existing one-kilometre overland conveyor that transfers ore from the primary crusher to the mill feed stockpile has been modified to accommodate the tie-in to the new secondary crusher. The Raptor 2000 crusher is the largest cone crusher installed in Western Canada and thanks to its ability to crush six-inch rock from the primary crusher down to minus two inch in size, Copper Mountain Mining expects nothing but high productivity for years to come. Management is confident that the new secondary crusher will improve mill throughput to nearly 40,000 tpd, which will improve mine prof- itability and provide a better margin for the company. Speaking of production, copper production for the second quarter of 2014 totalled 19.9 million pounds of copper, a four per cent increase as compared to the first quarter of 2014, setting another new production record for the mine. The concentrate also included 5000 ounces of gold and 113,300 ounces of silver. The 2014 second quarter represents the seventh consecutive quarter of continued improved copper production at Copper Mountain Mine. Year-to-date production results indicate that the operation is on track to meet its annual production target of 80-90 million pounds of copper, which

August 2014 • Canadian Mining Journal | 33 | Development

Shawn Ryan is a familiar face in Canadian exploration and development circles. Flying

Aerial system offers solution Higto costly ground explorationh By Gwen Preston*

ukon prospector and well-known adventurist Shawn Ryan could have Yretired. Ryan and his wife, Cathy Wood, are the Yukon prospecting team whose dedicated soil sampling led Underworld Resources to the million-ounce-plus White Gold deposit in 2009, a discovery that sparked a new Yukon gold rush. They also get credit for Kaminak Gold’s Coffee project, already at 3.2 million oz. and growing, and have at least another dozen soil anomalies on option to explorers across the White Gold district. After years of scraping by on government grants and prospecting contracts, Ryan and Wood made it to the big leagues when Kinross Gold acquired Underworld for $138 million. With that payday, plus a steady stream of option payments, the team could easily have stepped back from the grind and enjoyed their just rewards. Instead, Ryan and Wood spent the last 18 months figuring out how to make exploring for gold in the Yukon less expensive and more reliable. “I could see the crash coming and I could see there was so much money being wasted up here so we took a step back and thought, ‘If we’re going to keep this momentum alive, we need to add something new — we need to figure out

34 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com An Award-Winning Article |

GroundTruth’s some simple new tools that will increase geoprobe in drilling confidence without costing mil- action. lions,” said Ryan. And that is what he did. Ryan and Wood’s company, GroundTruth Exploration, now offers a suite of novel exploration technologies that can turn a soil anomaly into high-confidence drill targets (if the anomaly offers up the goods) in three weeks, and for $100,000. The process starts with GroundTruth’s unmanned drone. Bought from the Swiss military, the small, remote-controlled plane takes high-resolution orthophotos — geometrically corrected and scaled aerial photographs — of entire properties in short order. The time frame depends on the requested resolution. Taking pic- Aerial system offers solution tures with 4cm resolution the drone can cover 10 sq. km in a 45-minute flight. Higto costly ground explorationh Each photo comes with a black box file By Gwen Preston* that identifies the plane’s location on all three axis, which lets a mapping program stitch them together to create a scaled image of the property. The accurate pho- tographic overview helps geologists in many ways: in identifying structures that are impossible to see from the ground, in planning exploration programs, and in overlaying various mapped data. “For example, when we drape our induced-polarization (IP) sections on our orthophotos, they are pretty well bang expensive and environmentally impactful than done. In the White Gold district, on,” says Ryan. “Before we had to use so he figured out how to increase resolution rocks are rare because the soil is usually topographic data from the government, and limit line cutting with a new kind of IP. several metres thick. which is out by 20 to 30 metres, so you Powered by a lightweight battery To access bedrock requires trenching, were always draping in mid-air.” instead of a generator, GroundTruth’s IP often a complicated and costly endeavour The next step in GroundTruth’s pro- system includes 84 electrodes placed given the area’s limited access, rugged cess is high-resolution IP. IP is a well- every 5m along a line, connected by a light bush and steep hills, so Ryan did away established exploration tool, but for Ryan cable. When all electrodes are in place, the with trenching by developing Geoprobe, a it was problematic in two ways. First, system is turned on and data is collected. modest, track-mounted hydraulic drill conventional IP surveys offer perhaps Then the electrodes get pulled out, the that can push through deep soils to take 25-m resolution, but many gold-bearing cable gets rolled up and the system is car- soil and rock-chip samples from the soil- structures in the White Gold region are ried to the next line. bedrock interface. much smaller than that. The result is an IP map with a resolu- Geoprobe is small; it comes apart into At the Coffee property, for example, tion of 5m — tight enough to catch two pieces that can each be slung by an many key structures are less than 10m smaller geological structures that get lost A-Star helicopter. Once reassembled, the wide, and get lost in conventional IP data. in regular IP surveys — that requires Geoprobe can trample over most of the Second, conventional IP involves two minimal line cutting and takes much less Yukon’s buckbrush to get where it needs to electrodes connected by a long, heavy time. GroundTruth and the client then go. When it reaches a sampling location, cable, a system that has to be dragged from assess the orthophotos and high-res IP its two arms fold out to create stability and point to point. That requires line cutting, data alongside the prospecting intelli- the drill pops up to vertical and starts which means slashing a few metre-wide gence and soil geochemistry of a property. working. Within five minutes Geoprobe swaths through the bush for each IP line. If areas of interest appear, it’s time to pulls bedrock samples from beneath sev- Ryan found that time-consuming, test some rocks. But that is easier said eral metres of soil.

August 2014 • Canadian Mining Journal | 35 | Development

The bedrock samples and the deepest similar track system that will add another efit of using this system is enormous. And metre of soil are immediately tested with step to his low-cost, low-impact prospect- with the XRF, we get real-time numbers an X-ray fluorescence (XRF) gun which ing package: the ability to punch shallow for all the key pathfinder elements. It’s just provides rough assay information. If the drill holes into the best Geoprobe targets to incredibly useful.” XRF sees notable levels of gold or indica- see what the first 30 m of bedrock contains, The reasons for mining sector cycles are tor elements, the company is notified and before bringing a full-sized drill rig to site. complex and academic, but GroundTruth’s can adapt its exploration plans on the fly. “I want to be able to tell companies: response is simple and practical. Yukon And once it’s all done, Geoprobe leaves this is your drill target, and you will hit,” explorers are responding similarly, using behind little more than some trampled said Ryan. this season to map, prospect, analyze and bushes. Cash-strapped explorers are keen to reassess after a few whirlwind years. The goal, Ryan says, is to take a soil get their hands on that kind of certainty. Shawn Ryan is certain the excitement sampling, IP and trenching program that “That’s exactly what we need nowa- will return to the Yukon. He knows the would usually cost $750,000 and make it days,” said Julia Lane, senior project geolo- White Gold district perhaps better than available for $100,000, while also cutting gist at Atac Resources’ Rackla gold discov- anyone else, having walked many of its the time frame for the program back from ery. “We need higher confidence in our ridges and spent countless nights poring at least a year to just three weeks. drill targets in the least expensive way.” over soils data to identify targets. “In short, we’re trying to reinvent the Across the Yukon, geologists have said “We just need a couple more discover- wheel without costing a fortune,” said Ryan. similar things. ies,” he says. “And I’ve got a couple good Yukon explorers are beating a path to “When you do get to the drill stage you ones in the bag.” CMJ GroundTruth’s door. Ryan’s only Geoprobe want to make absolutely sure that you’re *Gwen Preston is a Senior Writer with The Northern — which was a back-of-the-napkin idea in putting your drill in the right place,” said Miner, a sister publication to Canadian Mining the winter — is booked up until the snow Mark Fekete, a director of Taku Gold. Journal. As a further note of interest is that Gwen’s “Flying High” article was recently chosen as the flies. He will make more this winter, along “Drilling costs up here are enormously “Best Industrial/Technical Article” in Canada by the with a rotary air-blast drill mounted on a high and hard to control so the cost ben- Canadian Business Press.

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Stop by booth 2105 at the Oilsands Tradeshow & Conference September 9-10, 2014 or visit cgis.ca calgary • edmonton • fort mcmurray • prince george • saskatoon • vancouver • australia • chile • russia | Development

Aerial view of Detour Gold’s expansive facilities near its open-pit gold mine in Northern Ontario.

Stepping out in a big, big

waSteady hands whip y Detour Lake into shape By Trish Saywell*

hen you look at the careers around the globe. His work ranged from viously holding the CFO spot at New of Detour Gold’s Chief the commissioning of the Tambo gold Gold and Gabriel Resources. His back- Operating Officer Pierre processing plant in Chile to directing ground as a chartered accountant and his WBeaudoin and President prefeasibility and feasibility studies of the ability to negotiate project finance facili- and CEO Paul Martin, it’s almost as if Cerro Casale open pit copper–gold proj- ties made him a natural fit in the mining both men had been groomed for their ect in Chile, delivering a feasibility study world. Between 2010 and 2011 under task of bringing the company’s massive for the Donlin Creek open-pit project in Martin’s stewardship as CFO, Detour open-pit gold mine in northeastern Alaska and commissioning the Buzwagi raised about $2 billion in debt and equity Ontario to design capacity in under two gold mine in Tanzania. He also held to pay for construction, and he stepped years, all while hacking away at the com- senior management positions at the into the top job as interim CEO after the pany’s debt. Doyon processing plant in Quebec, the sudden resignation of Gerald Panneton Before joining Detour Gold in Holt-McDermott plant in Ontario and the in November 2013. Less than three February 2010, Beaudoin spent 16 years at Kargoorlie Super Pit in Australia. months later Martin was promoted per- Barrick Gold helping improve plant pro- Martin joined Detour as chief finan- manently to the corner office. ductivity at the gold major’s operations cial officer in September 2008 after pre- “I think I’ve been working my whole

38 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com Overall view of Detour Gold’s processing operation adjacent to open pit.

Truck and drill activity in the pit with main operations in background.

career in the industry to get ready for this Stock pile dome is a position,” Martin said following a recent dominant structure at tour of the world-class Detour Lake mine the mine site. attended by 30 analysts and investors earlier this summer. “I have the benefit of five years here and from a stability standpoint — internally and externally — to have an insider take on the position has some natural benefits to bringing in an external person.” One of those benefits is an intimate knowledge of the balance sheet and how best to manage debt payments over the next 24 months to take Detour’s US$110 million finance lease from Caterpillar

August 2014 • Canadian Mining Journal | 39 | Development

A close look inside the process plant.

down to a more palatable level and a “This company in the current gold US$30 million revolving credit facility environment has too much debt — that’s from a syndicate of five banks down to an obvious statement,” Martin offered zero. Factor in US$500 million in convert- during a series of presentations on the ible notes that come due in November 185-km bus trip from the airport in 2017 and the company’s total debt stretch- Cochrane to the mine site. es to US$640 million. “We’re starting to get into a position of strength but we’re not there yet. If there’s one thing we’ve learned it’s that this is a big mine — it’s bigger than I think a few of us gave it credit for — and therefore we need to have a financial safety net there in case we have an unexpected situation.” While Martin is busy meeting his ambi- tious target this year of maintaining a cash balance on the books of US$100 million and pruning up to US$80 million in debt, Beaudoin also has his hands full completing the ramp up and dealing with some of the challenges that have dogged the operation since it entered commercial production ahead of schedule on Aug. 12, 2013. These included falling behind the mine schedule, which resulted in lower mined grade, higher mining dilution (when waste material gets intermingled with ore) in the first few quarters, accessing higher grade ore in the pit only at year-end, and poor availability in the mill. In 2013 Detour made three separate downward revisions to its production guidance. Martin says the company expects to be cash flow positive within the second half of the year provided the mill ramp up continues to improve and the gold price cooperates. Detour took a little of the pressure off in March with a $173 million equity

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CONTaCT [email protected] August 2014 • Canadian Mining Journal | 41 | Development

Haul trucks are constantly on the move within the pit. Martin emphasizes that Detour has a fair amount of flexibility (it can repay the CAT lease ahead of time without penalty) and remains on solid terms with all of its lenders. “I would say we have good relation- ships with our banks and we have an even better relationship with CAT finance,” he said. “It’s a very simple equation: We’ve purchased US$300 million worth of equipment and they want to deliver the next seventeen trucks to take us up to our maximum mining fleet. So we have a really, really good working relationship with them.” financing, bringing cash and short-term debt reduction. It paid down US$40 mil- As for the US$500 million in convert- investments at the end of the first quarter lion of its credit facility in the first quarter ible notes, Martin says management is to US$145.2 million. The company also and received a waiver from Caterpillar on currently discussing how best to tackle has a safety net in the form of a US$45 its principal repayments in the first and that debt. One option is to refinance up to million undrawn credit facility with a second quarters of this year. If things work US$300 million of the notes, which would bank syndicate (BMO, CIBC, CBA, RBC out, Martin says, and the gold price coop- allow the company to invest more money and TD) that is secured by the Detour erates, meaning more cash in the treasury into the mine and continue to probe excit- Lake property. by the year-end, Detour can make those ing exploration opportunities elsewhere Detour is also making headway on principal payments sooner than later. on the property. “We think US$300 million is the right number looking at normalized debt to EBITDA in the current gold price environment so don’t be surprised if we would look to refinance up to US$300 million worth of those notes,” Martin says. “We find that a very manageable position. We know in our life of mine that in Portable Power 2017–2018 we’re up close to 700,000 oz. gold per year. We would have a very strong balance sheet, we could garner a very attractive facility, and we’re quite prepared to do that.” Under a limited hedging program Detour kicked off in January, the company is permitted to hedge up to 50 per cent of its production in 2014 and Martin says a final decision on whether to continue WE DO MORE THAN DESIGN EQUIPMENT. the program in 2015 will be made before the end of the third quarter. WE POWER YOUR SUCCESS. So far the hedging program — over- seen by Chief Financial Officer James Mavor, previously vice-president and At Doosan Portable Power, we’re known for engineering solutions that make customers more treasurer at Barrick from 2007–2012 — productive. Visit www.DoosanPortablePower.com to fi nd the dealer nearest you and fi nd out has averaged US$1,250 per oz. to US$1,260 how we can help you achieve: per oz. And despite its critics, Martin says, • Maximum fuel economy the program has been useful during the • Unparalleled productivity • Region-specifi c emissions solutions mine’s ramp-up stage. “Ninety-five percent of the people that we speak to are in favour of what we’ve DoosanPortablePower.com | 800.727.8457 ©2014 Doosan Infracore Portable Power done this year,” Martin says of the hedging

42 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com program. “They understand it is protec- to 230,000 tonnes per day, up from mining in the second half of the year. It is tion of the ramp-up year. Let’s see where 213,000 tonnes in the first quarter, and to also preparing to break through into the we are at the end of the year and we’ll boost the milling rate to more than 50,000 past-producing Campbell open pit, while make a further evaluation.” tonnes per day. staying focused on limiting internal and Where management wants to be at the Detour expects to complete the push- external dilution (which Detour says it end of the year on the operations side is back of the south wall and the south ramp can do as the pit opens up and the posi- producing at a rate of 55,000 tonnes per in the pit this summer, therein getting tioning of the shovels improve.) day, which is beginning to look well with- better exposure to higher grade ore for The game plan at the mill—a conven- in its grasp as the pit starts opening up, allowing more efficient use of the shovels and access to better grade areas in the south pit wall. Dilution is below budget and in-line with the life-of-mine plan and High Performance reconciliations (to the block model and Commercial Grade between the mine and mill) are perform- ing well. The mill continues to increase Enterprise Network both availability and recoveries. “Last year we had a challenging ramp up combined with a 30 per cent reduction in the gold price,” Martin comments after the site visit. “Any one of those two would be significant for any corporation and added some grey hair to the management team. But they also make you stronger by weathering them and moving forward and that’s where we are now. We remember 2013 but we’re focused on 2014.” In the first quarter, the plant averaged throughput rates of 45,282 tonnes per day (3 per cent below plan) and due to a slower start-up following a shutdown in December 2013 (for repairs to the pre- leach thickener system and the replace- ment of the bottom section of the torque cage), mill availability was running at 80 per cent (2 per cent below plan) but reached 86 per cent in March. Mill recoveries surpassed the 91 per cent design rate over the last eighty days about 67 per cent of the time. At the mine, 19.2 million tonnes were For 20 years, Galaxy has been providing mined in the first quarter versus the plan reliable, affordable and innovative of 20.9 million tonnes — a shortfall of 1.7 million tonnes due to in-pit handling, enterprise communications advancing the south wall pushback in the to companies with remote office and camp locations open pit and tying up three shovels with beyond the reach of fibre or cell coverage. the removal of overburden. Total cash costs per oz. sold in the first Innovative, Reliable and Managed Services and Best Integrated Rugged Fixed and quarter fell to US$976 per oz. from Affordable Network Network Solutions VoIP and Fax Auto-Deploy Systems US$1,174 per oz. in the fourth quarter of 2013, but the number of gold ounces sold Supported by Local Partners across North America also fell to 84,560 oz. versus 95,000 oz. in the previous quarter. 1.877.463.9728 The goal in the second quarter is to be mining waste and ore at a rate of 220,000 galaxybroadband.ca

August 2014 • Canadian Mining Journal | 43 | Development

tional gravity, cyanidation and carbon-in- veyor, installing an additional cyanide grow in size — reaching 2.8 million pulp facility — is to improve fragmenta- destruction tank (which will reduce tonnes at a grade of 0.78 gram gold per tion, optimize secondary crushers and downtime risk, trim opex [by reducing tonne at the end of the first quarter — up liner profiles, improve crusher availability residence time], increase stability and from 1.77 million tonnes averaging 0.72 and better manage stockpiles. allow higher tonnage) and a second oxy- gram gold per tonne at the start of com- In the second half of the year, Detour gen plant (which will improve recoveries mercial production. will continue its debottlenecking exercise and use less cyanide). By the end of the mine life the company by improving the primary crusher con- Meanwhile a stockpile continues to expects the low-grade stockpiled material will have swelled to about 107 million tonnes grading 0.45 gram gold per tonne for 1.5 million oz. gold, and is considering options to extract value from it. One option is heap leaching the material and the company has already started test work and expects to have results later this year. The other option is to recover just the fines. Under an updated life-of-mine plan unveiled in February, the open-pit mine and mill supports a 21.7-year operating life based on current reserves of 15.5 million oz. of gold, or 476 million tonnes grading 1.02 grams gold per tonne. Life-of-mine production will average 660,000 ounces of gold at total cash costs of C$723 per oz. sold, but during the next five years annual gold production will average 600,000 oz. at total cash costs of C$759 per oz. sold. For now Detour is sticking to its 2014 production guidance of 450,000 oz. gold to 500,000 oz. gold at cash costs of US$800-900 per oz. (It produced 107,000 oz. gold in the first quarter compared to 232,000 oz. in all of 2013.) Looking ahead, the company is considering removing the pebble circuit at the mill, which produces between 700 and 800 tonnes per hour of mainly barren pebbles. The pebbles don’t need to be recovered and if test work proves positive (that is, if the pebbles are confirmed barren), the circuit could be used instead to add 8,000 to 12,000 tonnes per day of additional milling capacity, which would translate into about 50,000 to 75,000 ounces of gold per year in additional production. On a final note, Pierre Beaudoin also touched on a prefeasibility study the company is working on for Block A; a deposit about 1km northwest of the Detour Lake open pit that contains a measured and indicated resource of 2 million oz. gold at an average grade of 1.15 grams gold per tonne. “We don’t think it’s a big challenge to bring this into reserve by the end of the

44 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com year,” Beaudoin says, adding that the core Having said that, he adds, the Osisko trolled by a major, which makes us a very of Block A is covered in the company’s acquisition has brought attention to large, unique situation and with the current gold environmental baselines and the assump- low-grade operations in safe jurisdictions, price environment we won’t see a large tion is that it would be brought into pro- which has been an overall positive in the pipeline of these types of deposits devel- duction at the end of the Detour Lake industry. oped likely until the next gold cycle.” CMJ mine life. “I’m aware of only one mine that is *Trish Saywell is a Senior Writer with “For better economics, however, the producing over 500,000 oz. a year, is locat- The Northern Miner, a sister publication key to Block A is finding a place for it in ed in a safe jurisdiction and is not con- to Canadian Mining Journal. the plant earlier,” he said. 11392ComatrixHydrometal_ad_1_mwd 5/21/14 12:15 PM Page 1 One of the more exciting aspects of Detour’s future, however, is the new high- grade discovery south of the current open pit along a major east-west structural break less than 6km south of the Sunday Lake deformation zone that hosts the Detour Lake mine and which Beaudoin describes as “one of the most important discoveries on the Detour Trend in forty years.” Earlier this summer Detour released assay results from its exploration program in the Lower Detour area with highlights from the 58N Zone including intercepts of 12.74 grams gold per tonne over 28 metres, 11.82 grams gold over 32.4 metres and 9.69 grams gold over 30.3 metres. Drilling in Zone 75, 20 to 50 metres south of the 58N Zone, returned assays of 4.31 grams gold over 7.3 metres, 10.82 grams gold over 7.0 metres and 7.41 grms gold over 5.1 metres. ® 3 Beaudoin is encouraged by the results CoMatrix, Escondida – 1880 m /hr. so far and says he hopes to find a lot more to potentially develop a higher grade feed source for the mine. “Within two seasons we’ve proven that SpinTek: The we have high-grade material close to the mine, right on our doorstep,” he says. HydroMetallurgy Experts.

“We’re all excited about this and if we could ® spike grades it would be a screamer.” At SpinTek, we specialize in Hydrometallurgy. We supply CoMatrix Of course with the recent take-out of filters, SX media filters, Coalescers and all the spare parts for mining Osisko Mining and its large Canadian filters. When it comes to solvent extraction, go with the experts: SpinTek. Malartic gold mine, which shares attri- butes with Detour Lake such as a long Ask the Experts Email us at [email protected], or call 714-236-9190 mine life and an excellent geopolitical jurisdiction, talk often comes down to for more information. Detour as the next takeover target once the operation is optimized. But Paul Martin says he doesn’t dwell on that fact. “Our job is to execute and not worry about what external forces could bring to bear on you,” he says. “People who dwell on potential takeovers can take their eye 10863 Portal Drive, Los Alamitos, CA 90720 USA off the ball and that’s certainly not some- Tel: (714) 236-9190 | Fax: (714) 236-9196 | www.spintek.com thing we are doing here.”

August 2014 • Canadian Mining Journal | 45 | Development

One of the more interesting projects in Nova Scotia is this open-pit operation near Port Hawkesbury where ore is mined at the top then gravity fed to loaders below. Without

Exploration and Mining Highlights in Nova Scotia LimitsBy Diane Webber* hen it comes to mineral ing companies doing business in the prov- line Mineral and Petroleum Rights Registry resources, Nova Scotia ince. This includes a streamlined environ- System. The modern registry provides offers tremendous oppor- mental assessment process and success global access to a secure, map-based system tunity. The province boasts with Aboriginal consultation. for acquiring mineral and petroleum rights competitive advantages The Government of Nova Scotia imple- in Nova Scotia. overW many jurisdictions, including diverse mented a Mineral Incentive Program in Prices for gold, base metals and rare geology and a strategic location along the 2012 to assist prospectors and exploration earth minerals resulted in renewed interest eastern seaboard of North America, with companies in the search for new discoveries by prospectors and exploration companies deep-water ice-free ports, well-established and to advance projects closer to produc- in Nova Scotia. Mineral claim staking lev- infrastructure, and an educated, skilled tion. To further support exploration and the els at the start of 2014 were up six per cent workforce. province’s commitment to the mineral compared to mid-2013 levels. Currently Its One Window regulatory process industry, the Nova Scotia Department of 7.7 per cent of Nova Scotia’s land mass is provides clarity and timely service to min- Natural Resources has implemented an on- held under mineral exploration license.

46 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com Gold Canuc Resources (Mill Village) and volcanic rocks in the Coxheath Hills area Nova Scotia hosts more than 60 historical Acadian Mining (Fifteen Mile Stream and of Cape Breton Island. gold districts. Healthy gold prices bode Beaver Dam). Detailed mapping, airborne survey well for companies exploring in the prov- programs and drilling have confirmed a ince’s many gold camps. Rare Earth Elements (REE) 600m-long volcanic belt enriched in cop- In Nova Scotia there are 10 advanced Nova Scotia has exploration potential for per-molybdenum, surrounded by a cop- gold properties, nine of which have NI rare earth elements (REE) and rare metal per-gold zone, to a depth of 300m. The 43-101 compliant resources. The inven- deposits. The existence of anomalous property has potential for a low-grade tory of gold in Nova Scotia, from existing occurrences of REE in Devono- high-tonnage copper-gold deposit and a resource estimates, totals 1,808,200 ounc- Carboniferous, Th-rich, peralkaline gran- high-grade molybdenum porphyry es in the measured and indicated catego- ite intrusions, and in an overlying suite of deposit. ries, and 2,496,900 ounces in the inferred felsic and mafic volcanic rocks, was first Merrex Gold continues to pursue its category. discovered in northern Nova Scotia in the 100 per cent-owned Jubilee lead-zinc- Ressources Appalaches invested $10 1970s. More recent exploration focused barite deposit, also located in Cape Breton million to re-open the former producing on these rocks has revealed numerous Island. Jubilee hosts an independent NI underground Dufferin Gold Mine. new REE occurrences. 43-101 compliant resource estimated at In 2013 the company started dewater- To date, exploration has returned 3.1 million tonnes grading 4.71% zinc ing pre-existing underground workings in promising results, including several sur- (inferred). order to carry out detailed underground face exposures with REE concentrations The ScoZinc lead-zinc mine in Gays mapping and sampling. Phase II included >1 per cent total REE, and having enrich- River has Environmental Assessment and surface and underground drilling, test ment of heavy REE. In addition, a current Industrial` approvals for a mine expan- mining, metallurgical testing and refur- mapping project by the DNR has deter- sion. ScoZinc has undertaken approxi- bishment of the existing mill facility. mined that the potential for REE deposits mately $10 million of expenditures on the The company poured its first gold bar in this composite plutonic/volcanic property between 2011 and 2013 includ- last month. Phase III will include comple- sequence extends beyond the location of ing mine refurbishment, purchase of sur- tion of the NI 43-101 resource estimate, original discovery into other areas under- face rights, permitting and engineering an economic analysis and estimate of lain by these rocks in the Cobequid and exploration. mineral reserves. At full production Mountains. Southeast Cape Breton Island is home capacity the company expects to process to a cluster of granite-hosted Cu-Pb-Zn- 300 tonnes per day and produce between Rare Metals Ag-Au deposits. These deposits are 20,000 and 25,000 ounces of gold per year. Deposits of rare metals (Li, Ta, Nb, Be, F, known as the French Road or Oceanview Atlantic Gold NL continues to advance Rb, Cs), along with deposits of Sn, W, Zn, deposits; they have characteristics indica- mining plans for its project at Moose Cu, Ag and In, are associated with the tive of the intrusion-related gold deposit River Gold Mines. The Touquoy deposit Devono-Carboniferous peraluminous type, or more recently named, thermal is a low-grade bulk-tonnage gold deposit granitic rocks of southern and eastern aureole gold (TAG) deposits. with a National Instrument (NI) 43-101 mainland Nova Scotia. In addition to the There are examples of these interesting compliant resource of 534,000 ounces of 56Mt East Kemptville Sn-Zn-Cu-Ag deposits in the Oceanview area that have gold in the measured and indicated cate- deposit, which was mined by Rio Algom only ever undergone sporadic explora- gories, and 122,000 ounces of gold in the between 1985 and 1991, there are numer- tion. Never has there been a systematic, inferred category. ous other prospects and occurrences in modern exploration of this interesting The company continues exploration to the granites and contiguous metasedi- terrain in Nova Scotia. expand the resource at Touquoy, and to mentry rocks that have received varying work on its Cochrane Hill deposit, which degrees of exploration. IOCG Deposits holds a resource of 200,000 ounces of gold Currently, the East Kemptville deposit Several companies are working on joint (indicated) and 347,000 ounces of gold and several sites along its contact zone are ventures exploring the regional-scale (inferred). The project is fully permitted undergoing evaluation for rare metals by Cobequid-Chedabucto Fault Zone for and the company anticipates construction Avalon Rare Metals. Rare metals are also Iron Oxide-Copper-Gold (IOCG) depos- to start at the Touquoy project in 2014. being sought in the Brazil Lake/Deerfield its. Minotaur Exploration previously Advancement of exploration programs area of Yarmouth County. explored the area with an extensive on gold properties in Nova Scotia is con- ground-run gravity survey and verified tinuing by exploration companies includ- Base Metals that there is potential for this mineral ing NS Gold (Mooseland), Goldworx Golden Share Mining (recently merged deposit type in Nova Scotia. (Goldenville), Flex Mining (Tangier and with Silvore Fox Minerals Corp.) will con- The company has delineated more Forest Hills), Orex Exploration tinue to further evaluate the base- and than 10 drill-ready targets. In the fall of (Goldboro), Stay Gold (Harrigan Cove), precious-metal potential of Precambrian 2012, with funds from the Nova Scotia

August 2014 • Canadian Mining Journal | 47 | Development

Mineral Incentive Program, Minotaur Gypsum have been used to generate electricity and completed a detailed IP survey and a deep Gypsum mining was one of Nova Scotia’s make steel for more than 100 years. drillhole on one of their high-priority most consistent industries for more than Coal production levels dropped sig- targets and reported promising results. 100 years. The province produced approx- nificantly a decade ago following closure imately 80 per cent of the total Canadian of the federally owned Devco mines. Coal Mining gypsum production, and six per cent of generates approximately 60 per cent of The mineral industry in Nova Scotia is world gypsum production. Nova Scotia’s electricity and is expected to dominated by the production of industrial Nova Scotia is known for the quality be the primary fuel source for electrical minerals and structural materials. The prov- and size of its gypsum deposits, as well as power generation in the province for the ince produces gypsum, anhydrite, salt, coal, access to economical ocean cargo transport. foreseeable future. There is continued aggregate, limestone, silica sand, quartz, The recent crisis in the U.S. housing interest in developing future underground dimension stone (marble, slate, sandstone, market has had a direct impact on the resources in the province at Donkin, Cape granite) and peat. Nova Scotia gypsum industry, since the Breton County. Production of commodities such as majority of production is exported to the The Donkin coal project in Cape coal, salt, anhydrite, limestone and silica U.S. for wallboard manufacturing. Breton received an environmental assess- sand have remained relatively consistent Production levels have declined by 75 per ment by the federal and provincial regula- in recent years. Construction aggregates cent compared to 2006 levels. Many of the tors in 2013. Xstrata is actively seeking a produced from crushed rock and sand gypsum mines in Nova Scotia have either buyer for their 75 per cent ownership in and gravel deposits represent one-third of shut down or been placed on care and the project. the value of all minerals produced in the maintenance indefinitely. Recent coal production has occurred province, overtaking gypsum as the high- at several surface ‘reclamation mining’ est value commodity. Salt projects where previously mined deposits There are 10 active mining operations Salt production is thriving in Nova Scotia. are being ‘re-mined’ and the impacted in Nova Scotia. Salt is currently produced from an under- lands reclaimed to modern environmen- ground mine in Pugwash and a solution tal standards. This accounts for more than Aggregate mining operation at Nappan. Production 500,000 tonnes of current coal production Aggregates used in the construction indus- averages approximately 1.2 million tonnes in the province. Emerging clean-coal try are the leading mineral produced in per year of rock salt. Most of the salt is technologies, such as underground coal Nova Scotia. Provincial aggregate opera- used for de-icing, but 175,000 tonnes are gasification, may provide future opportu- tions produce approximately 9 million processed annually into food-grade prod- nities to generate electricity using Nova tonnes per year for domestic consumption ucts, including table salt. Scotia coal. CMJ and approximately 4 million tonnes per year for export. Building stone is produced Coal Diane Webber, P.Geo., is a Liaison Geologist with the from several locations in Nova Scotia. Nova Scotia has deposits of coal, which Nova Scotia Department of Natural Resources

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48 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com “ GET THE MAN OFF THE MUCKPILE.”

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Minerals sector reports widespread activity By Phil Saunders*

his year, Newfoundland and ments, helping to make the industry more VNL is completing the engineering design Labrador celebrates 150 years competitive and sustainable. and will begin construction of Phase II that of modern mining, going includes the remaining systems required to back to the opening of the Mining and Processing process Voisey’s Bay concentrate into fin- Tilt Cove copper mine in the In late 2013, Vale Newfoundland and ished nickel, copper and cobalt. historic, and still productive, Baie Verte Labrador Limited (VNL) announced Phase VNL has also committed to developing mining district. I construction mechanical completion at an underground mine at Voisey’s Bay. The Today, while facing the same challeng- its Long Harbour hydromet processing underground operation is projected to es as other players in the minerals sector, plant. This $4.6 billion project represents start producing ore in 2019. NL companies are making significant one of the larger recent investments in the Tata Steel Minerals Canada Ltd. progress on the mining, processing and Canadian minerals sector. (TSMC) is a joint venture formed between exploration fronts and meanwhile, gov- Commissioning is expected to be com- Tata Steel of India and New Millennium ernments at both the provincial and fed- pleted this year, with first nickel produc- Iron Corp. to produce high-grade, direct eral levels are investing in infrastructure tion from the initial, low-impurity nickel shipping iron ore (DSO) in the northern to support new and existing develop- matte feed expected in the third quarter. Labrador Trough.

50 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com One of Newfoundland/Labrador’s Artist’s rendering of Vale’s more well-known projects is Vale’s Long Harbour project. $4.6-billion Long Harbour nickel, copper and cobalt facility. It also represents one of he larger recent investments in Canada’s minerals sector.

Minerals sector reports widespread activity By Phil Saunders*

The first shipment of iron ore was ing district. Kami is owned 75% by made in late 2013 to Tata Steel plants in Alderon and 25% by Hebei Iron & Steel Europe, with production scheduled to Group Co. Ltd., China’s largest steelmaker. ramp up to 4.2 million tonnes per annum The Kami Project was recently released by 2015. from the environmental assessment pro- New Millennium and Tata Steel have cess and Alderon has obtained surface also reported positive results of their and mining leases, allowing it to proceed Taconite Project Feasibility Study on their with development at the project. Alderon LabMag and KeMag projects in the has also signed a Benefits Agreement with Labrador Trough. The study will lead to the Province of Newfoundland and an investment decision by Tata Steel. Labrador, outlining the long-term ben- The LabMag Project in western efits of the project. Labrador has total Proven and Probable The Kami deposits have 1,270 reserves of 3,410 million tonnes, with an million tonnes of Measured & estimated mine life of 39 years. Indicated resources at 29.6% Alderon Iron Ore Corp is ramping up iron. its development of the Kami Project, To help encourage located in the Labrador Trough iron min- growth in the iron

New Millenium’s secondary-sizer conveyor.

August 2014 • Canadian Mining Journal | 51 | Development

the private sector, are investing in expansion at the Port of Sept Iles. In February 2014, Cliffs announced that mining and concentrating activities at Wabush Mines, in western Labrador would be idled and the mine would be considered for sale or closure. Rambler Metals & Mining plc and Anaconda Mining Inc. are both in full production at their respective Ming (copper-gold-silver) and Pine Cove (gold) mines, on the Baie Verte Peninsula. Both companies are paying down debt, while aggressively pursuing opportunities to expand their resources beyond their property boundaries through property acquisitions and investments. Aerial view of New Anaconda has reported encouraging Millenium operation. results down dip of the Pine Cove deposit, and plans to conduct substantial addi- ore district, the Province has directed power for new developments such as tional drilling there, and on newly Newfoundland and Labrador Hydro to Kami, and improve reliability for all cus- acquired properties in the region. proceed with construction of a third tomers in the Labrador region. Teck Resources Limited recently com- transmission line between Churchill Falls Meanwhile the Federal Government, pleted a feasibility study on the Lower and Labrador West. This will help supply in partnership with the port authority and Duck deposit at their Duck Pond Operations in central Newfoundland, and announced that it will be uneconomic to mine. Current reserves will be exhausted by the first half of 2015, after which time the mine will be permanently closed.

Exploration Encouraging results at several advanced gold exploration projects in central Newfoundland illustrate the substantial, albeit little-recognized potential of this region. Marathon Gold Corp. announced the NEED GLOBAL MINING SOLUTIONS? discovery of new, high-grade, gold-bearing veins near its main Leprechaun JUST ASK GOLDER. Deposit at the Valentine Lake Project. Maritime Resources Corp. has reported excellent recoveries in metallurgical Remote sites, extreme weather and complex geology are some of the challenges in mining test work on core samples from the Orion projects. Add to that, the social, environmental, and regulatory processes faced by mining gold deposit, on the Springdale Peninsula, companies. Golder Associates’ integrated consulting, design, and construction solutions and is seeking a partner to help bring the provide project stakeholders with the information to tackle challenges at every stage of their property to production. mining projects, not just for today but for the future. Benton Resources Inc. has also com- Engineering Earth’s Development, Preserving Earth’s Integrity. pleted metallurgical testing, with favourable results, on samples from the 51 Zone on its Cape Ray Property, in southwest Canada + 800 414-8314 Newfoundland. An expanded exploration [email protected] program, including drilling, is in progress. www.golder.com Coastal Gold Corp. has published an updated resource estimate for the Hope

52 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com Brook gold deposit on the south coast of Little Deer copper project through a ore deposit in western Labrador. Newfoundland, and is focusing its atten- renewed drilling campaign with encour- Following a comprehensive evaluation tion on the higher-grade underground aging results. of proposals, the government selected the portion of the mineralized zone. In Labrador, Century Iron Mines Julienne Lake Alliance, a consortium led Base metals (copper, zinc, lead) with Corporation has announced an updated by Newfoundland and Labrador-based precious metal credits have been the resource for the Joyce Lake DSO deposit, Altius Minerals in partnership with two mainstay of the mining sector in central part of their Attikamagen Project. The major Chinese integrated iron ore mining Newfoundland for over a century. Recent deposit contains 24.3 million tonnes of and steel producing companies. consolidation of ownership has brought Measured and Indicated mineral resourc- The property contains total Measured new interest and new investment in this es at an average grade of 58.55% iron. and Indicated resources of 867 million historic district. Aurora Energy Ltd. has completed tonnes at 33.7% iron. The project could Canadian Zinc has reported high- infill drilling at the Michelin Deposit in operate for 25 years and produce up to 22 grade drill intersections from its central Labrador and plans to update its million tonnes of iron ore concentrate Lemarchant Deposit south of Duck Pond, resource, which currently stands at 103 per year. and announced plans for additional drill- million pounds of U3O8. This project Amongst new investments in the sec- ing there, and at other massive sulphide represents one of the world’s largest unde- tor, Petmin has increased its stake in deposits obtained in recent acquisitions. veloped uranium resources. North Atlantic Iron’s pig iron project near Meanwhile, Minco plc is evaluating In an interesting new development, Goose Bay, Labrador and Golden Gate properties in the historic Buchans camp, Altius Minerals Corporation has part- Capital completed the acquisition of including the large, near-surface Lundberg nered with Anglo American to explore for Canada Fluorspar Inc, which is develop- resource, which it is advancing toward the nickel and platinum group metals in ing fluorspar projects at St Lawrence, in prefeasibility stage. southern Labrador. southern Newfoundland. CMJ Elsewhere, Thundermin Resources The Provincial Government is in dis- Inc., with new partner Rambler Metals, cussions with a group of companies inter- *Phil Saunders P.Geo. is a Mineral Exploration Consultant, Department of Natural Resources, continues to expand its resource at the ested in developing the Julienne Lake iron Government of Newfoundland and Labrador.

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August 2014 • Canadian Mining Journal | 53 | Development BusyA Season Prospectors hit the ground running By David McLelland*

Photograph by Milada Pardovicova, winner of the 2013 AME BC photo contest.

AME BC Chairman says: ecent announcements have These famous lines open Charles We must address the challenges facing seen some major B.C. mineral Dickens’s A Tale of Two Cities and make our sector as they are serious and require producers scale back their me think of both the current opportuni- action. We may not like resistance, but, in workforces but at the same ties and challenges we face in the mineral all cases, resistance creates energy. While time, however, the demand for exploration sector. the anti-extractionists and other pressures coalR is expected to increase 50 per cent We look forward from a place of rich push against us, they have not succeeded globally over the coming 15 to 20 years. natural endowment with optimism, in slowing the ultimate miner – global This is, to me, analogous of our anticipating growing markets and global consumption. They have only restricted times, and very Dickensian: “It was the demands, while dealing with resistance the development of supply. best of times, it was the worst of times, from environmental non-government This resistance galvanizes our industry it was the age of wisdom, it was the age organizations, public opinion and gov- and raises the value of our members’ work of foolishness . . .” ernments. and products. This is our opportunity to

54 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com AME BC President says: By Gavin C. Dirom* Traditionally, summer is the most active exploration time; whether it involves drilling targets at advanced projects, taking rock samples, or flying airborne geophysics. Since AME BC’s Mineral Exploration Roundup in January, we have witnessed an emerging sense of cautious optimism at many industry events this spring, particularly at the PDAC convention in Toronto and the Kamloops Exploration Group conference. However, as has been true for our association’s 102-year history, we must remain alert to both the opportunities and challenges in the globally active B.C.-based mineral exploration and development sector. Sluggish coal prices have resulted in challenging times for many developing coal mines. Overall, however, in the first half of the year, Canadian mining equities showed modest signs of improvement, underpinned by improved commodity prices and continued cost management. According to many analysts, market activity shows ma- jors remain focused on rigorous cost-control measures and disciplined merger and acquisition activity, while junior companies continue to pursue fundraising opportunities. And depressed share and asset prices are creating opportunities for companies to acquire assets at lower prices. For many members, access to capital is an omnipresent challenge. Juniors continue to be creative in their approach to raising money, and those with good-quality assets, advanced projects, and strong management teams are best positioned. Uncertainty over metal prices persists and will continue to drive some members to opt for hedging their future production. In terms of recent and ongoing advocacy efforts, we continued to work on issues such as exploration tax credits for aboriginal engagement, proposed permit application fees, land access and use, and health and safety. We pursued the latter in part through our annual exploration safety workshops, which attracted more than 80 partici- pants in addition to 17 volunteer presenters and facilitators. AME BC will continue as advocates for mineral exploration and development through the summer so that our members can focus on raising financing and exploring on the ground – ultimately making discoveries that can lead to the development of new mines in B.C. or elsewhere.

*Gavin C. Dirom is president and chief executive officer, Association for Mineral Exploration British Columbia (AME BC).

implement our strategic objectives, to views on and reactions to the proposed AME BC website. This was a valuable help us stay the course and to influence changes. These proposed changes have opportunity to educate our membership, positive change. united our industry in their opposition, industry and the public about the policy Recently, the provincial government with prospectors and explorers, metal and relating to permitting and its impact on proposed fees for issuing Mines Act per- coal producers, suppliers, placer miners exploration in B.C. mits, an issue that affects many compa- and their respective associations express- AME BC has been given clear objec- nies. It also has the potential to derail our ing their common concern. tives contained in our Strategic Plan, and slow but steady progress in encouraging As a result of the engagement of vol- these are being implemented. CMJ prospecting and exploring for new unteers, board members and staff, AME deposits in B.C. BC responded to the government’s pro- *David McLelland is chair of the AME BC board In an efficient and organized manner, posal with its own recommendations, of directors and operates Auracle Geospatial an ad-hoc committee solicited members’ which are available for viewing on the Science Inc.

August 2014 • Canadian Mining Journal | 55 | CMJ on Tour

site of all

sitesBy Eastern Correspondent D’Arcy Jenish

ormer Toronto Maple Leaf All- overnight flight to Copenhagen, followed is 80m thick, 4.5km-wide and extends to a Star Borje Salming made the trip by a sprint through the terminal to make depth of at least 2000m. from his hometown of Kiruna the connection to Stockholm, and finally According to company officials, that (pronounced ki-RU-na), Sweden, two hours aboard a packed and cramped makes it the largest continuous iron ore to Toronto many times during his commuter aircraft bound for town of deposit in the world and at grades of 65 to careerF but for me, travelling the same Kiruna, population 18,000, located 145km 70 iron, it is surely one of the richest. route recently to where he was born was a beyond the Arctic Circle at the northern Like I said, I had the privilege of tour- first and it made me appreciate just how tip of Sweden. ing the LKAB mine recently, including a far he was from home. Aside from Salming’s reputation, the stop at the visitor’s centre 540m below the In fact, Toronto to Kiruna is about a sole reason the town is still on the map is surface followed by a descent to 1000m to quarter of the way around the world and because of the state-owned Luossavaara witness mining operations. The tour came after too many hours on a plane to visit Kirunavaara Aktiebolag (LKAB) mine, at the start of a week-long trip organized Kiruna, also site of the world’s largest which has been turning out high-grade, by the Swedish Trade and Investment underground iron ore mine, I can under- magnetite iron ore since 1898, and is Council (recently re-named Business stand why Salming eventually took up expected to continue producing for Sweden) to promote the Scandinavian permanent residency in Toronto. another 50 years or more. nation as a mining destination. In any event, it’s a long haul from A century and a half is a long life for And I travelled in good company. Our Toronto to Sweden and the mine I recent- any mine and the foundation of the delegation included three representatives ly toured in Kiruna. It began with an Kiruna mine’s longevity is a deposit which of the South African coal gasification com-

56 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com The state-owned LKAB iron-ore mine is located adjacent to grade copper, lead, zinc clinker, gold and contract research for Swedish companies Kiruna, Sweden, home of former silver and manages to do it profitably and for clients in dozens of other coun- Toronto Maple Leaf hockey play- er Borje Salming because it one of most efficient smelting tries around the world, including Canada. operations in the world. Among other things, they conduct We made two stops in the City of metallurgical pilot tests in the world’s Lulea, north of Skalleftia on the shores of only, full-scale research blast furnace the Gulf of Bothnia, first at the Lulea which stands 14m high, has a hearth that University of Technology, an institution of is 1.2m in diameter and can produce 36 19,000 students and the self-described tonnes of metal a day. mining university of Europe, and then it Sweden may be famous for its exports was on to Swerea MEFOS, one of five of cars (think Volvo), retailers such as Swedish research institutes jointly funded IKEA, hockey players (too numerous to by government and private industry. name), and modern mining technology Our hosts impressed us throughout (see sidebar), but it is also a major with the level of sophistication, automation European mining nation. and efficiency of the Swedish mining For example, Sweden is the continent’s industry, as well as the industry’s commit- top producer of iron and lead, it is num- ment to improved performance in all areas. ber two in gold, zinc and silver and it is At the LKAB mine, we watched a miner fourth in copper. It also has a rich mining operating a boring machine remotely while tradition. seated in front of a computer terminal in an The Falu copper mine operated, ATCO-style trailer 1000m below surface. though not continuously, from the sev- The operator was drilling 10 holes, each enth century until 1993 and the country’s 53m in length, into the ceiling of a gallery first underground mines were developed to form a fan-shaped pattern. Once com- in the 11th or 12th century. plete, the holes were packed with three Today there are 16 producing mines in tonnes of dynamite and blasted to free Sweden, but the country has ambitions to hundreds of tonnes of ore that would be grow that number to as many as 47 by transported to surface. 2030 and it welcomes, indeed encourages, Ore from the mine is processed into foreign investment in its mineral sector. pellets approximately three-quarters of an Representatives of several government inch in diameter and each day 15 trains agencies pointed out the advantages of hauling 68 wagons laden with pellets leave investing in their country during a series Kiruna for the port of Narvik in northern of presentations at the head offices of Norway and from there they are shipped Business Sweden in downtown Stockholm. to steelmakers elsewhere in Europe. The country has a corporate tax rate of pany Sasol Mining (Pty) Ltd., three repre- Pertti Lamberg, a professor of geomet- 22 per cent, which is competitive with sentatives of Minmetals Mining Holdings allurgy in the mining and metals depart- other developed jurisdictions, there are no Ltd., a division of a Beijing-based, statement at the Lulea University of Technology, royalties on minerals, no regional or local owned conglomerate, and a dozen or so walked us through a joint government corporate taxes, and interest payments are Australians from a variety of government and industry initiative called Vision 2030 fully deductible for tax purposes. agencies and mine service companies. SMIFU, short for Sustainable Mining and The Geological Survey of Sweden As it happened, I was the lone Canadian Innovation for the Future. maintains a publicly accessible National and Canadian Mining Journal the only One goal is to ensure that by 2030 Drill Core Archive of approximately Canadian publication, though the Swedish there is no human presence in production 3000km of cores, however, only a portion embassy in Ottawa extended invitations areas and that all work processes are auto- of them have been analyzed and then only to a number of other companies and news mated and controlled remotely. for certain minerals, meaning that there organizations. Apart from that, the industry is striv- may be untapped deposits awaiting dis- Our group attended a trade show ing for 30 per cent reductions in losses of covery at the Survey’s Mineral Resources called Euro Mine Expo that occupied all ore, energy consumption, deposited Information office in Malå, about 120km three pads of an arena complex in the city waste, carbon dioxide emissions and lost west of Skellefteå. of Skalleftia, which is located on the Gulf time accidents per tonne of ore mined. Finally, Sweden ranked number one of Bothnia in central Sweden. We visited Swerea MEFOS serves the ferrous and out of 112 jurisdictions in the Fraser the Boliden Group’s 85-year-old Ronnskar nonferrous industries. Its 59 scientists and Institute’s 2013 survey of mining company smelter in Skalleftia, which refines low- 27 engineers and technicians perform executives.

August 2014 • Canadian Mining Journal | 57 | CMJ on Tour

A series of photos show the extent of mining in Sweden.

Sweden’s advantages have attracted a number of Canadian President and Chief Executive Officer Blair Way said his com- companies in recent years. pany has invested just under $5 million to rehabilitate the pro- In 2004, Toronto-based Lundin Mining Corp. acquired the cessing plant and put the mine back into operation and produc- Zinkgruvan zinc and copper mine from Rio Tinto. It is located tion was set to begin this summer. 250km southwest of Stockholm and has produced since 1857, “The big attraction with Sweden is you’re doing business in a making it the longest continuously operated mine in the country. developed country,” says Way, who has also worked in a number Several junior companies have also invested in Sweden, of less developed nations. including Vancouver-based Tasman Metals Ltd., which is devel- “There’s no crazy back door stuff. The environmental regula- oping two rare earth element properties, and Flinders Resources tions are very clear and easy to understand. There’s lots of skilled of Vancouver, which acquired an open pit graphite mine that was labour. There are very few issues with language. English and in production between 1997 and 2001 before being mothballed Swedish are used interchangeably. It’s very similar to doing a when prices fell sharply. project in Canada.” CMJ

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58 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com A country full of world-class equipment makers Sweden has long been better known for its mining equipment than its mining industry and its leading, world-scale manufacturers are poised to make a major impact on the future of global mineral extraction. They envision increased automation, less manpower and, at some point not far off, perhaps even unmanned mines. Representatives of a number of those manufacturers, including Atlas Copco, Volvo, Scania, SKF AB and ABB AB, shared their visions of the future with visiting Chinese, South African, Australian and Cana- dian delegates at the end of a week-long tour of Swedish mines and mine-related projects in early June. Several factors are forcing mining companies to invest in automated production and processing, according to Peter Bray, a product manager in Atlas Copco’s underground rock excavation division. Bray pointed out that existing mines are becoming deeper and deeper, shallow, easy to mine ore bodies are becoming increasingly rare, labour costs have risen and skilled labour is becoming scarce in highly urbanized countries around the world. Software-based communication systems and wireless local area networks will form “the central nervous system” of unmanned mining operations, Bray said, and will allow the transfer of data and com- mands from control rooms located on the surface. Repetitive tasks from fixed locations, or work that occurs on fixed paths can be fully automated and have been at some Swedish mines. For example, LKAB has operated long-hole drilling machines from central control rooms at its Kiruna and Malmberget mines since the mid-1990s. In 2012, Atlas Copco partnered with Codelco--the National Cop- per Corporation of Chile--on a proof of concept trial at Codelco’s giant Andina mine, 50km north east of Santiago. They demonstrated that operators with no mining experience, sitting in a control room in the town of Los Andes, 80km from the mine, could control the loading and tipping of scoop trams. Bray concluded his presentation with a question: “Is the un- A MINE manned mine achievable?” Not yet, he told an attentive audience of visiting delegates, but he made it clear that that day is coming. OF SOLUTIONS

Mining in Sweden, Technical, economic and feasibility studies like many parts of the NI 43-101 technical reports world, involves impressive under- Mine planning, design and simulation ground workings of massive proportions. Plant design and simulation EPCM projects Commissioning assistance Power generation and T&D Automation and industrial IT Telecommunications Optimization of drilling and blasting applications Process optimization and control In My Mine(d)

Small and mid-cap companies are prime targets

By Shane Troyer, Principal, Grant Thornton LLP By Shane Troyer,

ribery and corruption have contin- nies must carefully balance the need to tion, their overall significance as deter- ued to be in the headlines, and conserve financial resources against the mined by management, and the basis for Brecent research has shown that more need to invest in anti-corruption pro- risk-specific resource allocation decisions. than 1 in 4 people have paid a bribe in the grams and controls—all while weighing Many organizations find that conducting last 12 months when interacting with key the potential damage corruption and the risk assessment process in conjunc- public institutions and services. To curb compliance negligence can do to both tion with anti-corruption awareness train- such practices, the last five years have seen corporate and individual reputations. ing achieves two objectives at one time sweeping regulatory changes implement- Regulatory changes demand prompt and maximizes project efficiencies. ed in virtually every industry as countries action on specific issues—the regulatory Once corruption awareness is embed- and agencies around the world look to amendments to the CFPOA were indeed ded in corporate culture and employees stabilize the global economy. significant and wide-ranging and include have been trained on understanding and As one of the most geographically and a new “books and records” offence, the identifying corruption risks, it’s critical operationally diverse of all industries, phasing-out of the current exception that appropriate reporting channels be mining has been particularly affected. relating to routine payments to foreign identified and communicated to staff. With so much activity taking place in officials (facilitation payments), expanded Many organizations have protocols for developing regions, many countries, jurisdiction covering individuals or com- reporting suspected ethical breaches, including the United States and United panies outside of Canada, and the increase including varying degrees of escalation Kingdom, have instituted potent legisla- of maximum jail time from five to 14 depending on the incident’s severity and tion to stem bribery and corruption. As years (with no limit on fines). the suspected perpetrator’s identity. anticipated, Canada has caught up by Mitigation requires a pragmatic and Most Canadian publicly listed compa- issuing its own strengthened legislation, preventative approach. More than ever, nies are required to have an appropriate and all Canadian mining companies with regulators are interested in understanding reporting mechanism such as a whistle- foreign operations are affected. how companies are working to prevent blower hotline in place to address serious Not only have amendments to Canada’s bribery. Companies must document their allegations. When combined with strong Corruption of Foreign Public Officials approach to corruption risk management, employee awareness, clear guidance and Act (CFPOA) provided regulators with and where resources are limited, manage- well-communicated policies, a properly additional enforcement options, but the ment must clearly outline their resource designed whistle-blower program can be frequency and severity of enforcement deployment decisions. very effective. In fact, studies conducted activities are on the rise. This is a red flag For companies wanting to protect by the Association of Certified Fraud for Canadian mining companies of all themselves, the first step should be the Examiners estimate that more than 40% sizes. While it’s clear that demonstrating development of two key documents: a of ethics violations are identified through proper due diligence over corruption risk Code of Conduct and Ethics and an Anti- whistleblower programs. has never been more important, small- to corruption Policy. These document the Canadian anti-corruption regulations mid-cap mining companies have never ethical standards to which directors are have never been more stringently designed found it more challenging to fund compli- accountable and set expectations for the or enforced, and junior mining companies ance initiatives. Limited liquidity, imma- conduct of employees, contractors and have never been more vulnerable to anti- ture governance processes and scarce agents. The introduction of strong poli- corruption compliance risk. With a consis- internal staff resources can all be barriers. cies can also support a cultural change tent, well-designed approach, small- and Combined with the increased risk now within the organization. mid-cap mining companies can stay ahead posed by foreign operations, this makes A risk assessment should also be the of the regulatory curve, address corrup- small- to mid-cap miners prime candi- basis of a strong anti-corruption program. tion and compliance risks, and implement dates for a range of regulatory headaches. It provides a roadmap of the various cor- programs and policies tailored to compa- In this environment, mining compa- ruption-related risks facing the organiza- ny needs and resources. CMJ

60 | Canadian Mining Journal • August 2014 www.canadianminingjournal.com Professional Directory

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August 2014 • Canadian Mining Journal | 61 Unearthing Trends

Resource nationalism with a Canadian context Tom Stack is a Senior Advisor in EY’s Tax Services practice. He is based in Saskatoon.

By Tom Stack

esource Nationalism is a key business risk for the mining Saskatchewan where production occurs that are operating sector and was the number two risk in the 2013 Business costs . In addition certain other costs are enumerated which Rrisks in mining and metals report. While much of the are deductible and there are a number of other costs which focus on changes in tax rates and royalties is focused on emerg- are specifically identified as not deductible. Specifically ing countries, Canada is not without its own changes and chal- included as deductible expenses are; storage and transporta- lenges to the sector. Effective January 1, 2013, sales of uranium tion costs; certain taxes including property taxes but exclud- from Saskatchewan mines will be subject to a new royalty ing mineral rights taxes and income or capital taxes; mine regime which is based on both revenue and net income. With research and development costs; marketing costs; donations the increasing number of new uranium exploration companies to Saskatchewan charities; and a 10 year carry forward for in the province, these rules cannot be overlooked and may have losses incurred in the 2013 and subsequent taxation years. considerable implications for new projects in the province. Specifically excluded from production cost are items such as interest and financing costs; taxes on profits, income or Old rules capital; royalties; costs to purchase mineral rights; as well as Prior to January 1, 2013 sales of uranium from Saskatchewan other miscellaneous exclusions. mines were subject to a basic royalty equal to 5% of sales, less a 1% resource credit, as well as a multi-tiered royalty which was • Capi tal bank. The royalty payer may deduct up to 100% of also based on sales. The tiered royalty was based on the average the capital bank which is an accumulation of capital costs price per kilogram of U3O8 sold and varied from a low of 0% incurred in the 2013 and subsequent years. Only 50% of to a high of 15% of the average price. For purposes of calculat- capital costs incurred in the 2013, 2014, and 2015 years are ing the tiered royalty sales were reduced by the capital recovery added to the capital bank with the other 50% being added in bank deduction which was an allowance for having increased the 2016 year. In other words while a royalty payer may annual capacity in respect of mill construction and expansion deduct up to 100% of their capital bank in any given year, as well as mine development. These rules were generally they may only deduct a maximum of 50% of their capital unchanged for years and provided consistency for the primary additions for the first three years of the new regime. producers in the province. • Exploration Bank. The royalty payer may deduct explora- New rules tion expenses incurred in the year and, in certain circum- The new rules continue with the 5% basic royalty less the stances, exploration expenses incurred in the previous resource credit although, effective April 1, 2013, the resource 15-year period. Exploration expenses are defined to be costs credit was reduced from 1% to 0.75%. incurred to determine existence, grade, and quantity etc. of a The tiered royalty on gross revenue has been replaced with mineral deposit. Costs of purchasing mineral rights are a royalty system based on profit which has two rate brackets excluded. depending on the net profit per kilogram of U3O8 sold. The first $22.00 of net profit per kilogram of U3O8 sold is taxed at The Saskatchewan Ministry of Energy and Resources have a rate of 10% and any profit in excess of $22.00 per kilogram is stated that new information circulars will be released which taxed at a rate of 15%. will outline the various administrative interpretations of these Net profit is calculated in section 22 by subtracting from new regulations on the new royalties on uranium. CMJ gross revenue from sales of uranium the following deductions of the royalty payer: The new rules are contained in The Crown Mineral Royalty Regulations to The Crown Minerals Act (Saskatchewan). All sectional references are to The Crown Mineral Regulations unless otherwise noted. • p roduction cost. Production cost is defined in section The Mineral Disposition Regulations, 1986, which contained the old rules, were 26(1)(a) to include all costs and expenses incurred in repealed.

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