Canadian Mining Journal August 2013

7/27/2019 Canadian Mining Journal August 2013

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c a n a d a s f i r s t m i n i n g p u b l i c a t i o n

www.canadianminingjournal.com August 2013

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Departments

Contents

For More InformationPlease visit www.canadianminingjournal.com for regular updateson what's happening with Canadian mining companies and theirpersonnel both here and abroad. A digital version of the magazineis also available at www.digital.canadianminingjournal.com

CanadianCanadianMiningJournal

www.canadianminingjournal.com

August 2013 Canadian Mining Journal | 3

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22 Still on TopAn in-depth proile articleon Agrium, once againCanadas top producer inCMJs Top 40 survey.

Niagara Tunnel Job28 A Mining Marvel

Underground specialists romaround the world marvel at thedesign and engineering o therecently completed NiagaraFalls Tunnel Boring Project.

Exploration andDevelopment32 Sites & Solutions

Junior E&D companies romcoast to coast are experiencinga challenging time as investorsare being cautious aboutspending money during theeconomic slowdown.

Canadas Top 40

ABOUT THE COVER

This months cover by Art Director

Mark Ryan clearly spells out the

ocus o Canadian Mining Journals

popular Top 40 August issue.

Coming in SeptemberGold in Canada

CanadaPostCanadianPublicationsMailSalesProductAgreementNo.40069240

c a n a d a s f i r s t m i n i n g p u b l i c a t i o n

www.canadianminingjournal.com August2013

CANADIANMiningJournalCANADIANMiningJournal

5 EditorialThis month Editor Russ Noble talksabout how The Great RecessionStill Lingers and why certain indi-

viduals, particularly those involvedwith Investor Relations, may indthemselves looking or new workthanks to the current state o mining

in Canada.

6 Mining MattersCanadian Mining Journals popularlook at whats making news acrossthe country.

9 InvestingNed Goodmans regular Investingcolumn talks about why its a goodtime to buy gold.

10 LawThis month Norton Roses AvrilCole addresses the issues related toNegotiating development agree-ments in tough times.

12 In My Mine(d)Current trends make it wise toinvest in community relations,according to Lisa Hardess, Principalo Hardess Planning Inc.

50 Company ProfileThis months eatured company isRDH Mining Equipment o Alban,Ontario.

60 CSR and MiningMarketa Evans, Extractive Sector,CSR Counsellor, Government oCanada, deines what CSR is worthto miners.

62 Unearthing TrendsJay Patel, a partner at Ernst &Young, Toronto, and the irmsCanadian mining and metals trans-actions leader, looks at Findingopportunities as headwinds continuein Canadian mining.

Cover StoryCanadian Mining Journalspopular Top 40 MiningCompanies in Canadaeature compares thecountrys top producers.


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Editorial

Canadian Business Press Indexed by Canadian Business Periodicals Index


CanadianCanadianMiningJournalAugust 2013 Vol. 134 No. 6

80 Valleybrook Drive, Toronto, Ontario M3B 2S9Tel. (416) 442-5600 Fax (416) 510-5138www.canadian mini ngjo urnal.c om

EditorRussell B. Noble

416 [email protected]

Field EditorMarilyn Scales613 832-9087

[email protected]

Art DirectorMark Ryan

Production Manager Print Production ManagerSteve Hofmann Phyllis Wright

Circulation ManagerCindi Holder

416 442-5600, ext. [email protected]

PublisherRobert Seagraves

416 [email protected]

SalesWestern Canada, Western U.S.A.

Bonnie Rondeau416-510-5245

[email protected] Free Canada:

1-800-268-7742 ext 6891 or 5245Toll Free USA:

1-800-387-0273 ext 6891 or 5245

Group PublisherDoug Donnelly

President Vice-presidentBruce Creighton Alex Papanou

Established1882

Canadian Mining Journal provides articles and information of practical

use to those who work in the technical, administrative and supervisory aspects

of exploration, mining and processing in the Canadian mineral exploration and

mining industry. Canadian Mining Journal(ISSN 0008-4492) is published

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.

Legal deposit: National Library, Ottawa. Printed in Canada. All r ights reserved.

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

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

please contact Russell Noble at 416-510-6742.

Subscriptions Canada: $47.95 per year; $76.95 for two years. USA: US$60.95

per year. Foreign: US$72.95 per year. Single copies: Canada $10; USA and foreign:

US$10. Canadian subscribers must add GST and Provincial tax where necessary.

GST registration # 809744071RT001.

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

wish your contact information to be made available, please contact us via one

of the following methods: Phone: 1-800-668-2374; Fax: 416-442-2191;

E-mail: privacy [email protected]; Mail to: Privacy Officer,

Business Information Group, 80 Valleybrook Dr., Toronto,ON,M3B 2S9.

Publications Mail Agreement #40069240. PAP Registration No. 11000. We

acknowledge the financial support of the Government of Canada through the

Publication Assistance Program towards our mailing costs. Return undeliver-able Canadian addresses to: Circulation Dept., Canadian Mining Journal, 80

Valleybrook Dr., Toronto,ON,M3B 2S9. E-mail: [email protected]

Canada Post: Publications Mail Agreement PM40069240. Please forward

Forms 29B and 67B to 80,Valleybro ok, Toronto, ON M3B 2S9.

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NY. US postmaster: Send address changes to Canadian Mining Journal,

PO Box 1118, Niagara Falls NY 14304.

We acknowledge the fnancial support o the Government o Canada through the Canada

Magazine Fund toward our editorial costs.

By Russell Noble

When IR means

Inventory Reduction

Well beore I started writing thiscolumn, I warned mysel thatwhat Im going to talk about is

probably going to stir up a ew emotionsrom a certain percentage o my readers.But, ater weighing the odds, I said, Whatthe heck, go or it, because in part, thatswhat Editorials are supposed to do. Stir upthoughts and emotions.

Ive done it beore, sometimes to thepoint that I get Letters to the Editor tell-ing me how ar o base I was and did Ireally think what I talked about actuallyhappens in the real world o mining?

Admittedly, sometimes I wonder i mycomments are totally air and accuratebecause theyre mostly based on observa-tions because I work in an editorialoice, not a mine, so what I say usuallycomes rom what I see and hear when

visiting a site and talking with the peoplewho actually work there.

Like I said, I work in the comort odust and dirt ree, air-conditioned orheated oice and its only when I do a sitetour that I actually talk with minersdirectly. For some reason, they never call,but they sure do talk when they meet me?

Anyway, what Im getting at comesrom a recent article entitled, The GreatRecession Still Lingers in which theauthor talks about the current state o

woes around the world and how somecountries have been economically savagedand have destroyed job prospects oruture generations.

The article went on to talk about theerosion o job security and the growingwage gap between those ortunate enoughto be near the top and everyone else. But,and what I liked most about the article,was that it also mentioned the growingtrend or those near the top having tolook over their shoulders too because

many o their high-paying jobs are alsounder the microscope.

In act, some I would guess, based onthe number o For Sale signs on two oCanadas most posh neighbourhoods(Torontos Lakeshore Drive near PortCredit, and the world-renowned BridalPath and Post Road district in the heart othe city) have already received their card-board box and walking papers.

In any event, its happening, and to getback to my original comment about thepercentile o readers Im probably going toupset, I think that almost every IR(Investor Relations) person in Canadashould have one o those cardboard boxesclose to their desk.

I know its a harsh thought but in real-ity, most IR jobs are probably in jeopardybecause try as they do, getting people toinvest in mining right now is close to anall-time low and rom what I hear and

read about going orward, the money justaint there.

Just look at the price o gold and thenumber o companies that are suspend-ing, or even walking away rom projects.And who can blame them? When proitmargins reach minimal to none, its timeto regroup and thats why I think manypeople near the top o their organiza-tions will now have more time to worry(about their own job) during this non-productive period.

And its not just the IR people I men-tioned earlier who are almost like inven-tory and in a disposable position, its allthe other top-wage earners who arebecoming a drain on the companys dwin-dling dollars. Sure, some have probablybeen so or many years, but now its timeto thin the herd, so to speak, and take careo the business by reducing costs.

And, like it or not, people (especiallythose in suits), are one cost that can becontrolled, and reduced. I know its a

sad reality but so too is the current stateo mining. CMJ


6/646 | Canadian Mining Journal August 2013 www.canadianminingjournal.com

MattersMiningDiavik mine rescue team

competes at northern eventCongratulations to the Diavik Mine rescueteam, winners o two events at the 56thAnnual Workers Saety and CompensationCommission mine rescue competitionheld in Yellowknie earlier in the summer.

Diaviks team won the undergroundobstacle and underground bench/ieldtest events. Teams rom Diavik, Ekati,Snap Lake, and Cantung mines partici-pated in the underground competitionwith Ekati winning the overall under-ground competition.

The underground competition includesire ighting, underground obstacle, rope res-cue, irst-aid, underground bench/ield test,underground smoke, and written exam tasks.

The mine rescue competition, whichincluded teams rom Canadas three terri-tories, was held in Yellowknie during

mining week. Day two o the competitionincluded the annual miners picnic hostedby the Northwest Territories and NunavutChamber o Mines.

Diaviks mine rescue team is comprisedo volunteers rom the mine sites overallemergency response team which includes60 individuals who train year round.

Nfld/Lab Geological Surveymakes historic data availableThe Geological Survey o Newoundland and

Labrador is pleased to provide its mineral ex-ploration clients with an update on a recentlycompleted technical review o its collection ohistoric exploration les. This collection includesnon-condential technical material (inormallyknown to current users as p-les) donated tothe Department o Natural Resources. Thesereports are currently housed at the GeologicalSurvey, in hard copy ormat only.

Following the review, a selection o these ar-chived les has been scanned, and is now avail-able as online Geoles. For user convenience, alinked list o these new geoles is available in thehttp://www.nr.gov.nl.ca/nr/mines/investments/

investments.html. Explore Newoundland andLabrador area o the website under Search ourIndustry Geodata Collection.

These new Geoles include inormationrom regional, grass-roots surveys, most owhich were completed in the period 1980-1990, and not previously reported upon insubmitted assessment reports. The inorma-tion is pertinent to exploration or a variety ocommodities, most notably gold.

F uh m h Gf

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Negotiating developmentagreements in tough times

By Avril Cole

Avril Cole is a lawyer with

Norton Rose Fulbright Canada.

Kinross Gold Corporations recentannouncement that it will not proceedwith urther development o the Fruta

del Norte project in Ecuador has reocusedattention on the perennial debate about theequitable allocation o natural resourcewealth among key stakeholders.

This debate is also the ocus o the2013 Arica Progress Report issued by theArica Progress Panel. The report identi-ies the obtaining o a air share o naturalresource wealth and equitable allocationo the proceeds by Arican governmentsas two o the most pressing governancechallenges in the extractive sector across

the Arican continent.These issues are a growing concern or

many o Canadas mining companies withmineral assets in developing countries.

Aligning ObjectivesThe details o the iscal regime to apply toa mining project are oten the subject olengthy negotiation between host govern-ments and mining companies. Suchnegotiations typically include many sepa-rate items such as corporation tax, with-

holding taxes, royalties, resource renttaxes, turnover tax, capital allowances,capital gains, GST or VAT related taxes,

valuation ees, import and export dutiesand the period o time or which they arestabilized (lie o the project or some othernegotiated period) as well as the host gov-ernments right to participate in the proj-ect. The mining companys investment ininrastructure, its community develop-ment obligations and similar costs are alsooten the subject o intense negotiation.

From a host governments perspective,the objective is to maximize revenues and

ancillary economic beneits, and providean investment climate which can attractuture revenue streams while protectingcommunities and the environment. Fromthe mining companys perspective, theobjective is to obtain a iscal regime andresulting internal rate o return which areattractive to outside investors and allow ora inanceable project. Not only are miningcompanies and their investors concernedwith the speciics o the iscal regime suchas the overall eective rate o tax, theyexpect reasonable assurance that theregime will not be undamentally alteredbeore they have had a chance to recoup

their investment. Investor perceptions orisk (uncertainty o the commodity price,operational risk, development risk, policyrisk and so orth) and the availability odeveloped inrastructure, cheap energyand skilled labour also have a bearing onthe appropriate level o taxation.

Aligning the disparate objectives o hostgovernments, communities and the miningcompanies can be technically challengingand changes in underlying market condi-tions oten add to the complexity. In some

cases, it may be that these objectives areirreconcilable and the development o themine must at a minimum be postponeduntil more avourable conditions exist.

Impact of Current Market ClimateHost governments in many resource richdeveloping countries have been slow toreact to the current crisis in the miningindustry relected in rising costs, com-modity price volatility, alling share pricesand decimated market capitalizations.

Notwithstanding the sensitivity o inter-nal rates o return to commodity prices,

many developing countries are paradoxi-cally demanding higher returns rom nat-ural resource development.

For mining companies seeking iscalconcessions rom governments duringthis period o rapidly declining marketconditions, it is important that the impacto sotening commodity prices on projecteconomics be conveyed to the host gov-ernment in as close to real time as practi-cable. In addition to providing marketinormation, this may also include adjust-ments to the inancial model such asrevising base case revenue projections.

When the negotiations occur at a time

when market conditions are unavourable,consideration may be given to wateringdown stabilization clauses in an eort toobtain greater up-ront concessions. Forexample, instead o having a stabilizationclause that extends or the lie o the proj-ect, the parties could agree to a review othe negotiated concessions in the event oa material change in project economics.As the mining company will want to limitthe possibility o a review being triggeredby a simple reconsideration o the deal by

the government, care will need to be takento ensure that the materiality thresholdthat would trigger a possible review isquite high.

The Arica Progress Report 2013 calls orgovernments to reorm tax regimes to bemore responsive to market conditions. Thereport calls or royalty rates or example tobe indexed to commodity prices to ensure amore equitable participation in revenues bygovernments especially during periods oeconomic boom. This would also allow or

governments to share the pain duringperiods o market decline. CMJ

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In My Mine(d)

12 | Canadian Mining Journal August 2013 www.canadianminingjournal.com

By Lisa Hardess

Current trends make it wise toinvest in community relations

Lisa Hardess, MCIP, RPP, is

Principal of Hardess Planning Inc.

[email protected]

Many mining companies ocused on exploration are reluctant toinvest in building community relations until they have goodassurances that a prospective ore body can be extracted proit-

ably. Yet current trends are such that i people in the local communitysee too many unamiliar pickups and aircrat, theyll start to get con-cerned and those concerns can ripen into hostility and oppositionthat can cause delays, higher costs and even a ull stop to development.

However, there are many ways that mining companies canbuild good relations right rom the beginning, and they donthave to cost the earth.

In the initial stages o exploration, when you dont yet know iyou will even be working in the area long-term, ind out whichaboriginal Nations traditional territory youre on. Send a letter, ol-

lowed by a phone call to say hello, who you are, what youre knownor (do you have a good environmental and social record?), whatnext steps could be (e.g. no-go or exploration permit) and thatyoull be in touch. It is important to respect protocol and have yourChie Executive Oicer reaching out to their Chie.

I there is an opportunity in their territory and you are mov-ing orward with exploration, nows the time or more involvedrelationship building. You may have the permit you need romthe respective government granting agency, but you still need asocial license to operate.

Create process and predictability where it doesnt ormallyexist, or youre at risk rom work stoppages that could dwarthose caused by environmental or licensing delays.

In most cases, this second stage will involve a trip to the com-munity. Make this trip count, both or you and or the commu-nity (theyre busy too, you know!).

Do a bit o homework about who they are, what language theyspeak, whats happening in the community. This will help you make

a better irst impression, demonstrate respect or First Nationsunique status in Canada, and ensure you dont show up in a remotecommunity dressed in a suit (and yes, they will notice and snickeri you do). Dress nicely but casually and or the weather!

Understand that people are looking or meaningul ways to bepart o the proposed project. In addition to trucking and labour

jobs, consider a track that would lead to community membersworking in management roles, learning skills they can use else-where. Be open to suggestions and look or win-win opportunities.

Bring a hostess-type git, since you are asking them to hostyou. Rereshments or the meeting, a big tin o coee or theBand oice, or i you can handle the aroma on the trip up, a

bucket o KFC! Ask your contact in the oice what people wouldlike and pack it along remember that in most cases you aretraveling to remote communities where grocery store ood andsupplies are expensive or them. On a recent trip I was asked tobring USB keys or sta to use and as door-prizes or the youth.

Find out i people in the community speak their local languageand i so, oer to pay or a translator (someone in the communitythey identiy and bring in) or the meeting. You would do well topay a respected local Elder to open and close the meeting.

In short, its a good idea to treat a trip to a remote FirstNations community in Canada much as you would an interna-tional visit. Inorm yoursel o the issues the community is ac-

ing, local culture and protocols, and present your ideas in light owhat youve learned. CMJ

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Canadas Top 40 Miners

Last year, 2012, almost all commod-ity prices softened, and that fact isreflected in the fortunes of CanadasTop 40 mining companies. Gross

revenues, the number on which we base

our ranking, grew little if at all.However, the most successful compa-

nies will weather the industrys cyclicaldownturns. Note the 10 companies thatlead our list. Nine of them remain amongthe top 10. The exception is Cameco thatfell from 10th to 11th, trading places withYamana Gold.

The other nine miners among this yearstop 10 were among the top 10 last year.With one exception they held the samepositions as last year Teck jumped up one

to 3rd, pushing Suncor down to 4th.The list is again headed by Agrium

($16.69 billion) that mines potash atVanscoy, Sask., and phosphate atKapuskasing, Ont. Mining is not the com-panys only business; it is a retail supplierof agricultural products and services

throughout the Americas and Australia.The world needs to eat, and its appetitefor fertilizer appears to be strong.

Again in second place is Barrick Gold($14.55 billion). Long the largest goldminer in the world in terms of marketcapitalization, Barrick has been underpressure from both the lackluster goldprice and skyrocketing developmentcosts. Nonetheless, the company increasedits 2012 revenues by 2% over 2011. Butthe company had a net loss of $677.0 mil-

lion in 2012, compared to a net profit of$4.54 million the year before.

Next year may be a different story.Barrick (as were other gold miners) was hitin the first half of 2013 by the lowest goldprice in three years. The yellow metal slidto US$1,192 on June 28, 2013. The com-

pany was hurt at the same time by newsthat the Chilean government ordered a haltto construction of the showpiece Pascua-Lama gold project, at least the portion thatlies within its jurisdiction. Barricks shareprice was hobbled by the decision despitecontinuing work on the Argentine portion.The resulting loss of market capitalizationwas enough to allow Goldcorp to becomethe worlds largest gold miner.

Teck Resources ($10.34 billion) rose oneposition in this years survey, filling the 3rd

slot despite a roughly billion-dollar-drop inrevenues. Part of its success must be

Little change among the top performersBy Field Editor Marilyn Scales



| Canadas Top 40 Miners

2012 2011

Company Year End Type Revenue Net Earnings(loss)

Assets Revenue Net Earnings(loss)

Assets

1 Agrium Dec 31 Potash 16,686,000 1,498,000 15,977,000 15,470,000 1,375,000 13,140,000

2 Barrick Gold Dec 31 Gold 14,547,000 (677,000) 47,282,000 14,236,000 4,537,000 48,884,000

3 Teck Resources Dec 31 Base metals & coal 10,343,000 870,000 34,617,000 11,514,000 2,768,000 34,219,000

4 Suncor Energy Dec 31 Oil sands 8,378,000 458,000 36,897,000 8,583,000 2,603,000 35,131,000

5 Potash Corp. o Saskatchewan Dec 31 Potash 7,927,000 3,081,000 18,206,000 8,715,000 1,775,000 16,257,000

6 Goldcorp Dec 31 Gold 5,435,000 1,749,000 31,212,000 5,362,000 1,881,000 20,374,000

7 Kinross Gold Dec 31 Gold 4,311,400 (2,509,700) 14,882,400 3,842,500 (2,013,000) 16,508,800

8 Canadian Oil Sands Trust Dec 31 Oil sands 3,905,000 981,000 10,171,000 3,875,000 1,144,000 8,620,000

9 First Quantum Minerals Dec 31 Base metals 2,950,400 1,869,400 7,536,400 2,683,500 654,800 5,298,000

10 Yamana Gold Dec 31 Gold 2,336,762 442,064 11,800,163 2,173,325 548,294 10,769,940

11 Cameco Dec 31 Uranium 2,321,471 264,583 8,215,020 2,385,404 449,844 7,616,350

12 Agnico Eagle Mines Dec 31 Gold 1,917,714 310,916 298,068 1,821,799 (568,055) 179,447

13 Sherritt International Dec 31 Nickel & coal 1,840,200 33,200 6,758,300 1,978,300 197,300 6,497,500

14 IamGold Dec 31 Gold 1,670,000 371,200 5,376,200 1,673,200 428,000 4,393,800

15 KGHM International Dec 31 Base metals 1,385,400 103,800 3,690,400 1,106,900 266,500 3,529,000

16 Eldorado Gold Dec 31 Gold 1,147,541 318,058 7,928,129 1,104,737 347,223 3,960,405

17 Inmet Mining Dec 31 Base metals 1,123,977 330,076 6,483,868 337,100 947,911 3,689,471

18 Pan American Silver Dec 31 Silver 928,594 87,513 3,387,979 855,275 354,146 1,951,796

19 New Gold Dec 31 Gold 791,300 199,000 4,283,700 315,200 179,000 3,368,700

20 Lundin Mining Dec 31 Base metals 721,106 123,180 3,990,451 783,786 183,765 3,864,325

21 Hudbay Minerals Dec 31 Base metals 702,550 (21,170) 3,487,824 890,817 (163,588) 2,455,004

22 Dominion Diamond Jan 31 Diamonds 702,043 24,443 1,630,936 623,963 47,530 1,603,575

23 Osisko Mining Dec 31 Gold 665,375 78,424 2,668,446 263,408 17,997 2,069,242

24 Centerra Gold Dec 31 Gold 660,737 (183,998) 1,554,131 1,020,344 370,878 1,688,618

25 Nevsun Resources Dec 31 Gold-Copper 566,039 246,696 873,696 547,770 250,034 775,226

26 Uranium One Dec 31 Uranium 562,900 (96,700) 3,237,500 530,400 88,400 3,303,300

27 Golden Star Resources Dec 31 Gold 550,540 (725) 725,876 471,007 (2,075) 727,678

28 Thompson Creek Metals Dec 31 Molybdenum 401,400 (546,300) 3,410,200 (546,300) 292,100 2,994,200

29 Semao Dec 31 Gold 388,500 77,800 n/a 395,900 111,800 n/a

30 Dundee Precious Metals Dec 31 Gold-Copper 384,685 29,831 972,185 338,480 72,129 927,941

31 Endeavour Mining Dec 31 Gold 346,097 ( 8,556) 1,755,813 147,227 (20,068) 962,215

32 Mirabela Nickel Dec 31 Nickel 343,398 (452,875) 118,689 303,642 (50,761) 525,510

33 China Gold Dec 31 Gold 332,387 77,004 1,806,264 311,312 86,823 1,744,544

34 Alamos Gold Dec 31 Gold 329,372 117,972 753,856 227,364 60,333 274,642

35 Capstone Mining Dec 31 Copper-Gold 305,515 59,592 1,512,710 327,765 60,426 1,419,535

36 Mercator Minerals Dec 31 Copper 262,621 (128,686) 477,979 262,981 91,691 612,944

37 B2Gold Dec 31 Gold 259,051 51,907 676,452 225,352 56,300 563,041

38 Imperial Metals Dec 31 Base metals 257,783 32,626 659,732 253,175 48,708 486,379

39 Crocodile Gold Dec 31 Gold 255,930 (40,207) 478,637 108,131 (33,569) 256,397

40 Taseko Mines Dec 31 Molybdenum 252 27 995 278 149 722

Canada T 40 y Gr Revenue(millions of Canadian dollars )


17/64




Rank Company Type 2012 Revenue 2011 RevenueRevenue Change

2012/2011

17 Inmet Mining Base metals 1,123,977 337,100 +333.4%

23 Osisko Mining Gold 665,375 263,408 +252.6%

39 Crocodile Gold Gold 255,930 108,131 +236.7%

31 Endeavour Mining Gold 346,097 147,227 +235.0%

19 New Gold Gold 791,300 315,200 +150.0%

34 Alamos Gold Gold 329,372 227,364 +44.9%

27 Golden Star Resources Gold 550,540 471,007 +16.9%

37 B2Gold Gold 259,051 225,352 +15.0%

30 Dundee Precious Metals Gold-Copper 384,685 338,480 +13.7%

32 Mirabela Nickel Nickel 343,398 303,642 +13.1%

22 Dominion Diamond Diamonds 702,043 623,963 +12.5%

7 Kinross Gold Gold 4,311,400 3,842,500 +12.2%

5Potash Corp. oSaskatchewan

Potash 8,619 6,467 +33.3%

21 Pan American Silver Silver 846 640 +32.2%

7 Kinross Gold Gold-Copper 3,900 2,977 +31.0%

11 Cameco Uranium 2,321,471 2,385,404 +9.9%

18 Pan American Silver Silver 928,594 855,275 +8.6%

1 Agrium Potash 16,686,000 15,470,000 +7.8%

33 China Gold Gold 332,387 311,312 +6.8%

T Revenue Ganer(C$ millions)

T Earnng Ganer(C$ millions)

2011. Like Barrick and Goldcorp, Kinrosshas a portolio o projects that hopscotcharound the world. Kinross produced 2.6million attributable oz o gold in 2012.

Canadian Oil Sands Trust ($3.91 bil-

lion) is holding down 8th spot. Includedin the companys revenue is its 36.74%share o Syncrude production. I youextrapolate rom the COS number,Syncrude sales would appear to be$10.63 billion in 2012. Syncrude is a pri-

vate joint venture and not under thesame reporting rules as public compa-nies, including COS. As tempting as itmight be to put Syncrude into the Top 40(in 3rd position), the number is merelyan estimate since Syncrude has not pub-lished a igure o its own.

Another base metal producer, FirstQuantum Metals, sits in 9th place, butwatch or this company to rise in nextyears rankings. Earlier this year FirstQuantum acquired Inmet Mining and itshuge Cobre Panama project. Inmet is17th on this years Top 40 list, and thecombined revenues o the two companiestop $4 billion. I 2013 revenues are any-thing like last years, First Quantum willrise a couple slots a year rom now.

Rounding out the 10 top mining com-

panies is Yamana Gold with interests innine producing mines in South Americaand the Pilar gold development project inBrazil. Dont be mislead by the companysname. It is also a producer o copper,molybdenum, silver and zinc.

I a look at the largest Canadian min-ers is satisying, a peek at the runners-upis intriguing. The 10 companies that rank41st to 50th is usually where the mostmovement in rank occurs. Taseko Mines,Aurizon Mines and AuRico Gold ell out

o the Top 40. Perhaps they will bounceup the list next year?

Determining a list o Canadas Top 40 mining compa-nies takes time and research. We examine nancialstatements, annual reports and other public inorma-tion or almost 100 separate companies.

We keep in mind that eligible companiesmust meet two o the ollowing three criteria: Companies that are traded on a Canadian

stock exchange.

Companies that are domiciled in Canada. Companies that own or have a signicant equity

interest in a producing mine in Canada. Compa-nies with a project in the advanced developmentstage may also be considered.

For example, a company with its head oce inToronto and its stock trading on the TSX or TSX-Vwould meet the above criteria even i all its produc-ing mines are oshore. Companies with oreignhead oces, and that do not trade on a Canadian

exchange, will not make the Top 40 list even it theyhave substantial mining assets in this country.

For the 2012 calendar year, the Bank oCanada reported that the average Canadian:U.S.dollar exchange rate was C$1:US$0.99988 virtually at par. That made our job easier in thatresults reported in greenbacks did not have tobe converted to loonies.

We make every eort to include all eligiblecompanies. I you believe your enterprise should be

listed among the Top 40, please write to the authorat [email protected].

Who is EliGiblE foR ThE Top 40?

Rank Company Type2012 Net Earnings

(loss)2011 Net Earnings

(loss)Earnings Change

2012/2011

23 Osisko Mining Gold 78,424 17,997 +435.8%

9 First Quantum Minerals Base metals 1,869,400 654,800 +285.5%

34 Alamos Gold Gold 117,972 60,333 +95.5%

5Potash Corp. oSaskatchewan

Potash 3,081,000 1,775,000 +63.8%

19 New Gold Gold 199,000 179,000 +11.1%1 Agrium Potash 1,498,000 1,375,000 +8.9%


19/64




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T Aet Ganer(C$ millions)Rank Company Type 2012 Assets 2011 Assets Assets Change 2012/2011

34 Alamos Gold Gold 753,856 274,642 +304.4%

16 Eldorado Gold Gold 7,928,129 3,960,405 +100.2%

39 Crocodile Gold Gold 478,637 256,397 +86.7%

40 First Majestic Silver Silver 813,031 443,312 +83.4%31 Endeavour Mining Gold 1,755,813 962,215 +82.5%

17 Inmet Mining Base metals 6,483,868 3,689,471 +75.7%

18 Pan American Silver Silver 3,387,979 1,951,796 +73.6%

12 Agnico Eagle Mines Gold 298,068 179,447 +66.1%

6 Goldcorp Gold 31,212,000 20,374,000 +53.2%

9 First Quantum Minerals Base metals 7,536,400 5,298,000 +42.2%

21 Hudbay Minerals Base metals 3,487,824 2,455,004 +42.1%

38 Imperial Metals Base metals 659,732 486,379 +35.6%

23 Osisko Mining Gold 2,668,446 2,069,242 +29.0%

19 New Gold Gold 4,283,700 3,368,700 +28.2%

14 IamGold Gold 5,376,200 4,393,800 +22.4%

Rank Company Type 2012 Assets 2011 Assets

2 Barrick Gold Gold 47,282,000 48,884,000

4 Suncor Energy Oil sands 36,897,000 35,131,0003 Teck Resources Base metals & coal 34,617,000 34,219,000

6 Goldcorp Gold 31,212,000 20,374,000

5 Potash Corp. o Saskatchewan Potash 18,206,000 16,257,000

1 Agrium Potash 15,977,000 13,140,000

7 Kinross Gold Gold 14,882,400 16,508,800

10 Yamana Gold Gold 11,800,163 10,769,940

8 Canadian Oil Sands Trust Oil sands 10,171,000 8,620,000

56 Turquoise Hill Resources Copper 9,084,800 6,136,800

11 Cameco Uranium 8,215,020 7,616,350

16 Eldorado Gold Gold 7,928,129 3,960,405

9 First Quantum Minerals Base metals 7,536,400 5,298,000

17 Inmet Mining Base metals 6,483,868 3,689,471

14 IamGold Gold 5,376,200 4,393,800

T Aet hder(C$ millions)

o $31.21 billion. That works out to abouta actor o 5.6%, irmly in the middle.

The companies that had the greatestearnings to assets rating were Agrium(9.4%) and Canadian Oil Sands Trust

(9.6%).There are other ways to gauge the sizeor success o Canadian miners. It is alwaysinteresting to look at how much a com-panys revenues or earnings grew yearover year. The act that only six o the Top

40 companies had earnings gains can beseen as a measure o how the industry isrushing toward a cyclical low.

Asset growth is interesting in that it isoten a relection o rising commodity

prices. Since commodity prices have beencontracting, perhaps the greatest assetgrowth is a consequence o turning a devel-opment project in to a producing mine.

Congratulations to all o the compa-nies included in the Top 40. CMJ


21/64



| Department Here| Canadas Top Miner

TopAgrm reeats as CaadasT Mer wth $16.7B saesBy Eastern Correspondent DArcy Jenish

on

STill

Agrium Ltd. is the king o the

Canadian mining industryjudgedby revenues and proitabilityandthe Calgary-based consortiums

position at the top o the heap is as solid asthe rock o the Canadian Shield.

For one thing, Agrium is a vertical cor-poration that mines, manuactures, whole-sales and retails, and it has operations inNorth and South America, Europe, Aricaand Australia. Furthermore, it is in the er-tilizer and plant-supplements business and,given that the world will always need ood,

the company is more or less shielded romthe boom and bust cycles that torment so

Thanks to the work of Agrium,mountains of stockpiled potash arelater used to help produce cashcrops for farmers around the world.


23/64


many other mining entities, large and small.Agrium reported sales o $16.7 billion in

2012, up rom $15.5 billion a year earlierand record proits o $1.5 billion, a slight

improvement on its previous proits recordo $1.4 billion established in 2011. Mining

represents only a small piece o the overallaction, but its mines in Kapuskasing, Ont.,Conda, Idaho and Vanscoy, Saskatchewan,32 kilometres southwest o Saskatoon, pro-

vide the essential raw materials that serve asthe irst link in a value chain that ends with

retailers selling ertilizer by the bag andsometimes they truckload directly to arm-ers in hundreds o locales around the world.

Phosphate rock rom the open pit mine

in Kapuskasing is shipped to a processingplant in Redwater Alta. The Rasmussen



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Ridge mine in Idaho is also an open pitphosphate operation, but the reserves areexpected to be depleted this year and thecompany has contracted to secure newsupplies rom a mine in Morocco.

The Vanscoy underground potashmine is Agriums longest-running and itis an enormous operation. It went intoproduction in 1969, it has since yieldedmore than 18 million tonnes o ore and,according to the 2012 annual report,proven and probable reserves indicate amine lie o 46 years.

The reserves are located about a kilo-metre below ground and the passageways and mining rooms now extend over77 square kilometres. As well, the round-ed, potash storage building is as long asthree city blocks but or all its currentsize, a major expansion o the Vanscoyoperation is nearly complete.

Surace works and undergroundinrastructure are expected to be com-plete by mid-2014 and the expansion willincrease the mines output by about

A crew of dedicated Agrium miners areresponsible for helping make the company

the top performer in Canada again this year.


25/64


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750,000 tonnes per year output, bringingit to nearly three million tonnes in total.

The mines are part o Agriumswholesale division, which operates doz-ens o production and distribution acil-

ities in North America, a smaller num-ber in South America, mainly in Brazil,and one in Egypt. The company alsodistributes in Europe through a pur-chase or resale business.

The wholesale divisions 15 productionacilities are capable o turning out some9.3 million tonnes o major crop nutrientsannually, including 5.4 million tonnes onitrogen, two million tonnes o potash, amillion tonnes o phosphate and 400,000tonnes o ammonium sulphate.

Slightly over 85 per cent o the divi-sions output is destined or agriculturalmarkets to improve the quality andincrease the yields o grains, oilseeds and

various other crops. The balance is soldor use in a broad range o industrialapplications, including the production oresins used in the construction industryand potash or recycling aluminum.

Agriums retail division ensures that itsreach extends rom mine gate to arm gate.The company operates 1,220 retail locationsin Canada, the U.S., Australia, Argentina,

Chile and Brazil and they sell crop protec-tion products, nutrients, seed and variousother products as well as services.

Agrium may well be nearly immune tothe ups and downs o commodity mar-kets, but that does not mean it is alwaysshielded rom shareholder discontent. Inlate May, 2012, one o the companysmajor shareholdersthe New York-basedhedge und JANA Partners LLCpro-posed that Agrium sell o its retail divi-sion in order to enhance shareholder

value. That triggered a year-long battlebetween senior management and JANA.

There were two meetings betweenAgrium executives and representatives oJANAone in mid-July, 2012 and anoth-er in Augustand on both occasionsAgrium rejected the proposal to break upthe company. JANA responded byannouncing that it would run its ownslate o independent candidates or theboard o directors and the battle heatedup in earnest.

The acts are straightorward, com-pany President and CEO Michael Wilson



declared in a public statement issued inOctober, 2012. Agrium remains com-

mitted to its highly successul integratedstrategy. JANA has been trying or oversix months to obtain support or its ideathat Agrium should spin o its retailoperations. Agriums shareholders haveoverwhelmingly rejected JANAs ideas.

That ailed to end the dispute. JANAissued a number o its own statements to

convince shareholders to support thebreak up and Agrium responded bymoving its annual general meeting aheadby a month to early April 2013 in orderto bring the matter to a close.

In March, Agrium Chairman Victor J.

Zaleschuk publicly waded into the ightwhen he issued a public statement to the

eect that: Our shareholders make deci-sions based on value and credible analy-sis, not rhetoric, and they are ully capa-ble o distinguishing act rom iction.JANA has resorted to attempts to deceiveour shareholders because its ever-chang-ing arguments have gained no traction.

The warring parties went beyond wordsto try to sway shareholders and win the

vote. Agriums board authorized paymentso $.25 per share to investment advisorswhose clients voted or the ull slate o com-

pany nominees to the board. Depending onhow many share their clients owned, someadvisors could have earned as much as$1,500 simply or urging a vote or the com-pany candidates. JANA, meantime, oeredits nominees a share o the proits rom thesale o its Agrium stock, which was valuedat over $1 billion.

At the end o the day, shareholdersvoted or the companys slate o nomi-nees and rejected JANAs candidates andAgrium will remain intact and at the top

o heap o Canadian miners or the ore-seeable uture. CMJ


From extraction (above) to processing(right), Agriums production has made

the company known worldwide as aleader in potash mining.


27/64

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Marvel

| Niagara Tunnel Project

A Mining

By deinition, mining means (inpart): Excavation in earth.and nowhere is that more accu-rate than when talking about

the recently completed Niagara Tunnel

Project in Niagara Falls, ON., where con-tractors tunneled or ive years under thecity to build a 12.7-m diameter pipedesigned to carry 500 m3/ second o water.

By any standards, mining or not, thatsa huge tunnel and to build it using a sin-gle 14.4-m-diameter tunnel boringmachine (TBM), along a twisting 10.2km route, is even more remarkable. Inact, over the *ive years it took to dig andbore the tunnel, the machine chewed itsway through more than 1.6 million m3 o

rock: enough to ill the Rogers Centre,home o the Toronto Blue Jays. (*Mining

started September 1, 2006, and inishedMarch 30, 2011. Completion o the con-crete lining, gates, then water-up, wascompleted March 9, 2013. Thereore, iveyears or mining and a total o seven

years construction).As excavations go, the Niagara Falls

Tunnel is huge and called or just aboutevery skill required to build any conven-tional underground mining project.

From initial soil sampling and rockdrilling along the route, to more detailedand in-depth geologic analysis o sedimen-tary ormations in the area, to dealing withthe potential impacts in the popular touristcity, contractors aced a number o monu-mental challenges that caught the attention

o mining contractors around the world.The concept o building a tunnel o

this size under one o the most populartourist attractions in the world withoutdisrupting the day-to-day operation o amajor city up to 140 m above was a logisti-cal challenge in itsel. And, using theworlds largest hard rock boring machineor the irst time, just compounded thatchallenge, said John Tait, Project Manageror Hatch Mott MacDonald.

The size o the TBM (tunnel boring

machine) was a bit intimidating becausemany o the crew had never seen or workedwith such a monster o a machine. Anythingwith a cutting head that is more than 14metres in diameter and is capable o eatingthe rock the way it did is a marvel in itsel.

Tait said the crews quickly learned torespect the power o the boring machineand as the tunneling progressed below thecity, they encountered and successullyovercame a number o obstacles, includingextreme challenges posed by the host rock.

Groundwater, in the permeable upperlevels where crews tapped aquiers, was a

Miners power through difficult rock to

dig massive tunnel under Niagara FallsBy Russell Noble

Aerial view oftunnel alignment.

Photo

graphscourtesyofOntarioPowerGeneration


29/64



| Niagara Tunnel Project

concern but the biggest issue was the largeamount o crown Overbreak in weakerrock ormations.

But in the end, says Tait, great inge-

nuity was used to overcome all o theproblems encountered and its a credit toeveryone who ever set oot on the siteover the years that saety and awarenesso the potential dangers was a irst prior-ity that resulted in the project beingcompleted with a saety record that wastwice as good as the industry average,and with no lie-threatening injuries.

As mentioned earlier, the scope o the$1.6 Billion Niagara Tunnel Project wasmassive but moreover, courageous because

o the stresses to be overcome in the design.Feeding the Sir Adam Beck generating

stations with a 27 per cent increase inwater, resulting in a 13 per cent increase inaverage energy output by 1.5 billion kWhper year, involved connecting the NiagaraRiver upstream o the Falls with the SirAdam Beck stations downstream.

In addition to the many eats o engi-neering that will be mentioned later, the

job depended on **Big Becky, the namegiven to the TBM that worked to connect

the Rivers water with the Stations tur-bines. (**The name was given by a local

school class who won a competition toname it).

Rick Everdell, Project Director or theowner, Ontario Power Generation,

explained that Big Becky started arriv-ing on site in June, 2006, and ater threemonths o assembly, it started its ive-year

journey in September by punching its waytowards the intake in the Niagara River ata planned rate o 15 m a day.

As the machine progressed, Everdellexplained that the tunnel (depending onthe host rock conditions) was supportedwith wire mesh, rockbolts, steel ribs andshotcrete. An impermeable polyoleinmembrane to prevent swelling o the host

shales was also installed, ollowed by anunreinorced, 600-mm-thick, cast-in-placepre-stressed, permanent concrete liner.

For logistical purposes, all other tunnelwork was staged at various intervalsbehind the TBM. Installing the invertmembrane and concrete commenced3000 m behind the boring machine, whiletunnel re-proiling work (required torestore the Overbreak) was an additional1500 m back, ollowed by arch membraneand concreting 1500 m arther to the rear,

and liner grouting and prestressing yetanother 1000 m back.

A total o 300 000 m3 o concrete wasdelivered in to the tunnel using 15 m3agitator trucks to line the tunnel. Laserscanning was used to monitor delections

to +/-0.5 mm in the concrete lining whileprestressing took place by injecting groutbehind the concrete liner at pressures upto 20 bar. A convoy o utilities advancedbehind the TBM drive including the reshair duct, conveyor, power and communi-cation cables, lighting, and clean and dirtywater piping.

As the tunnel progressed, turning andparking platorms were also built or useby construction vehicles and saety/rescueequipment.

While much o the Niagara Tunnelstory ocuses on the underground work-ings o the project, surace work was alsoongoing over the seven-year constructionperiod; most notably the in-water work inthe Niagara River or the tunnel intake.

In 2006, demolition crews removed anold accelerating wall in the river and in thenext year built a new accelerating wall andapproach wall as well as drill and blast orthe excavation o a 100-m long by 20-mwide and 40-m deep intake channel.

Following the excavation, an 8-m by7-m, 300-m-long drill and blast grout tun-

Invert bridge and concreteformwork entering the tunnel.

Concrete drop shaftplatform inside tunnel.

Grout tunnel excavationbehind cofferdam in the river.


31/64


nel was built to install a grout curtain in thehighly permeable rock beds under the riverto prevent looding o the main tunnelwhen the TBM arrived at that location.

A total o 12 concrete pours totaling

6000 m

3

or the approximately 35-m highintake structure were required as well asmore than 570 tonnes o reinorced steelthat was placed within the structure.

When the TBM inally reached its goalater its ive-year journey and broke throughat the intake end o the project, much o theinal work involving the interior o the tunnelwas right behind it and on schedule.

Culminating the work and one o themore momentous events was the instal-lation o the intake sectional service gatewhich allowed the looding o the intakechannel and on March 3, 2013, the tun-nel was illed with water rom the outletcanal end.

At the end o the day, more than 2,700 othem to be exact, The Niagara Tunnel proj-ect was complete and it was time to move toanother project or the estimated 450 work-ers on the job knowing that their work willbe instrumental in helping produce anestimated 1.5 billion kilowatt hours o newclean electricity or Ontario annually orthe next 100 years or more. Thats enough

to power a city the size o Kingston, ON.With the project completed, Ontario

Power Generation aced one inal chal-lenge and that was to demobilize and getrid o the tools and other equipment usedduring the construction o the project.

Some was stockpiled or uture use,some was sold or scrap, while more than1,500 pieces went up or sale at an auctionconducted by Ritchie Bros. Auctioneers oBolton, ON.

Some o the equipment sold included

more than 40 mobile structures that wereused or oices, workshops, storage, lock-er rooms and shower houses.

About 80 trucks, mixers and a multi-tude o pumps and hoses were also on theblock during the two-day auction and notsurprisingly, many o the items went tobidders watching the auction rom aroundthe world on Ritchie Bros. EquipmentOneonline telecast.

And, as mentioned at the outset, TheNiagara Tunnel Project caught the

worlds attention and held its interest tothe very end. CMJ

Mobile groutingplatform inside tunnel.

Aerial view ofequipment auction.


32/64

| Exploration & Development

32 | Canadian Mining Journal August 2013 www.canadianminingjournal.com

As most of the world knows, theProspectors and DevelopersAssociation of Canada is recog-

nized as one of the more respected author-ities on whats happening within the explo-ration and development industry.

From its work with government agen-cies regarding standards, procedures andsecurities regulations, to Aboriginalaffairs and Corporate Social Responsibility

(CSR), to its widely popular annual con-ference and convention in Toronto, PDACis an organization well versed in almostevery aspect of what it takes to find andbuild a mine.

Representing more than 10,000 indi-vidual and corporate members acrossCanada, the Association has a directpulse on exploration and developmentfrom coast to coast to coast, and becauseof its contact with companies and indi-viduals on the front line of mining, it

knows whats happening within theindustry on a first-hand basis.

Today its no secret that whats hap-pening within the junior mining sectorin Canada, and around the world for thatmatter, is not too encouraging and by allaccounts, it wont be for months to come.

There is, in fact, a capital crisis and inDecember 2012, mining industry analystJohn Kaiser caused even more shockwavesto ripple throughout the industry when hisresearch suggested that up to 700 explora-

tion companies could be in danger of dis-appearing by the end of 2013, with lessthan $200,000 of working capital in theirbank accounts. Kaisers report cast a spot-light on the precarious financial health ofthe grassroots exploration industry; risk-tolerant money has been drying up, andwhat little is out there has been flowing tocompanies with flagship projects.

In response to those predictions, theBoard of the PDAC struck an ad-hocCapital Crisis Committee to investigate

the issue and generate ideas for actionsthat could be taken to shore up grassroots

exploration in 2013. The Committeegathered and analyzed data from a widerange of sources, confirming that compa-nies focused on grassroots explorationwere indeed facing serious financing chal-lenges, notwithstanding fairly robust met-als prices. The Capital Crisis Committeealso identified potential solutions in threeareas: facilitating access to capital; main-taining highly qualified people; and shor-

ing up the viability of companies.Tough issues facing the junior mining

fraternity have been clearly spelled out byPDAC, and in a report by EY (Ernst &Young) entitled the Canadian Mining Eyein which it says Canadian mining equitiescontinued to significantly underperformgiven concerns around global economicgrowth and as a result commodity prices.

Gold prices, the Canadian Mining Eyecontinues, witnessed a historic fall in Aprilwith concerns that the Cyprus Government

and a few other European countries mightsell their gold reserves to raise cash. With

Staff Report

SoluTionSA k at hw jrs make a dffereceby creatg ew rttes

Sites &


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close to two-thirds of the constituents ofthe Canadian Mining eye index owninggold and/or silver assets, the direction ofprecious metals remain important.

As far as the outlook for Canadianmining and metals companies is con-cerned, EY says the sharp decline inequity fundraising witnessed earlier in2013 is also likely to continue in the nearterm but opportunities will always exist

for those willing to take a long-term viewof the sector.

Its about balancing cost reductionand operational efficiency efforts withstrategic transactions.

EY concludes by saying that explora-tion companies exposed to current capi-tal restraints should be pursuing unique,creative financing arrangements andthinking about how they can advance tothe next stage in their growth agendaincluding consolidation between juniors

with cash and those with property, merg-ers of equals, and streaming deals that

sell off a royalty interest from a non-strategic asset for up-front financing.

Those are all constructive sugges-tions and the message is clear that cre-ative thinking and looking for new waysto control costs while at the same timemaintaining a growth agenda are criti-cal for all companies involved withexploration and development.

Jonathan Rudd, a geophysicist and

professional engineer with the Toronto-based geophysical services company ofQuantec Geoscience, says that securingcapital for exploration projects hasalways been a question of telling a con-vincing story of property quality, strongmanagement and recorded success. Butrecently, he says; Deeper targets andincreasing financial pressures haveproved fatal for mining explorationprojectswhile tough decisions con-tinue to blight budget management.

Youre already watching your bud-gets closely, but its not enough to make

you stand out. Instead, your competitiveadvantage rests in altering your explora-tion process. Now more than ever, yoursuccess hinges on the steps you takebefore you approach investors.

Embracing new technology willallow you to demonstrate to investorsyour ability to extract resources fasterand more cost-effectively, and the earlierin your plan that you add new technolo-

gy, the more you will be able to create arobust, efficient, and effective project sothat its easier to prove how youll spendless money, and increase returns morequickly, says Rudd.

Traditionally, Rudd explains, explora-tion companies get a simple, preliminarysurvey done that gives some reliability interms of what resources exist in the prop-erty, then they seek financing for the drillprogram but because the drill holes arenarrow (sampling only a small portion of

the earth) and geology can quicklychange, the lack of understanding

Century Iron Mines Iron Arm Camp,located about 3 km from the companysJoyce Lake project (more details about

the project on pages 38-39), is modernand well equipped to serve the needsof staff working in the area.



o the details between the boreholes makes this approachimprecise, unreliable and expensive.

You wouldnt be the irst company to believe youre sitting onthe proverbial gold mine only to eel the rustration o your drill

budget running out three eet rom the gold deposit.Throwing money at the problem doesnt help; you can get

more drilling inance and still not get the results you expected.You could go round, round, and round until inally there are nomore investors to approach. Thats how the mining industry getsin troubleand the credibility o a miners promise is ruined.

The mining industry has been here beore but its vitallyimportant to the uture o undraising, and the uture o the

junior mining industry, that exploration teams start using newtechnologies as a matter o best practice, says Rudd.

Technology has revolutionized industries beore. Surgeonsnow rely on MRI or CAT scans beore making an assessment,

rather than older X-RAY technology. Similarly, a reconnaissance orsparse-data geophysical survey provides only a partial picture when

youre trying to demonstrate the quality o a property to investors.By showing investors that you plan to use the latest technol-

ogy and explaining how the technology will help you avoidnotorious exploration problems, you can build a case strong

enough to attract multiple investors, concludes Rudd.The preceding comments and predictions are based largely

on observations and statistics but the ollowing comes straightrom the ield, so to speak, as John A. Roozendaal and JohnPattison, President and Director, VMS Ventures and Director oNorth American Nickel (NAN), and Chie Geologist, VMSVentures and North American Nickel respectively (both compa-nies are based in Vancouver) look at technology (particularlyaerial) and how its making exploration easier.

Heres what Roozendaal and Pattison have to say.Technology is evolving all the time in the mining industry

and progressive exploration and resource development compa-

nies are constantly on the lookout or technologies that canhelp them discover ore bodies aster and at less cost.


Helicopters used by VMS Ventures andNorth American Nickel have helped in

the discovery of new deposits thanksto air-borne geophysical technologythat enables geologists to evaluatelarge areas faster.


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It is a act that, in many o the worlds productive mineralbelts, most o the exposed or shallow deposits have already beendiscovered, but new technologies are now allowing geologists tosee deeper and evaluate large areas aster so that discoveries can

continue to be made.The use o helicopter-borne geophysical technology, or

example, is one o the modern tools that was recently used to helpdiscover a high-grade copper deposit in a mature mining campin record time.

The authors say the company has experienced excellent resultsby using aerial technology; namely its exploration program in theFlin Flon Greenstone Belt in northern Manitoba and the discoveryo the Reed Lake copper deposit. The discovery hole, collared just100 meters rom a paved Provincial highway connecting two long-established mining towns (Snow Lake and Flin Flon), coredthrough more than 43 meters o massive sulphide mineralization

averaging 4.38% Cu, 1.56% Zn, 0.85 g/t Au and 13.1 g/t Ag.The deposit now has a 43-101 inerred resource o 2.55 mil-



lion tonnes at 4.52% Cu, 0.91% Zn,0.64g/t Au and 7.68g/t Ag. The deposit isbeing developed under a joint ventureagreement between VMS Ventures(30%) and Hudbay Minerals (70%). As a

result, the developers are now in theposition o knowing that Reed Lake willbe a producing mine by the end o 2013.

Geologists selected the Flin FlonGreenstone Belt because it is one o themore proliic Volcanogenic MassiveSulphide Deposit greenstone belts in theworld in terms o dollar value o discov-ered mineralization per square kilometer.

The belt has produced more than 183million tonnes o ore averaging 2.5% Cuand 4.5% Zn rom 27 mines during morethan 80 years o continuous production.It is exposed over an area o approxi-mately 12,000 km2; however, an area o atleast equal size on the south side o thebelt is completely buried beneath muchyounger, un-mineralized sedimentaryrocks completely unrelated to the rockshosting the ore bodies.


Drilling at Century Iron MinesJoyce Lake project.


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Not surprisingly, says Roozendaal andPattison, the vast majority o the mines(present and past producing) are situated inthe exposed part o the belt while the buriedportion has seen little exploration and even

less mining activity. It was in this buriedportion o the belt that we saw an opportu-nity to use a new technology in the orm ohelicopter time domain electromagnetics(TEM) to see through the younger coverrocks and rapidly explore the prospectiveFlin Flon Greenstone rocks beneath. Atechnical team quickly assembled a largeland package and began looking or a heli-copter TEM system to explore it with.

Currently, VMSs sister company, NorthAmerican Nickel Inc., in which VMS has anapproximate 27.5% interest, is using evenmore advanced helicopter TEM technolo-gy to explore a large (4,983 km2) grassrootsnickel sulphide project called Maniitsoq onthe southwest coast o Greenland. While itis located in a relatively remote part o theworld, the Maniitsoq project has the advan-tage o being situated along a year-roundpack-ice ree coast line and having abun-dant rock exposure.

In the 1960s and 70s, Danish explorersidentiied a large (over 70 km long) belt ohigh-grade nickel sulphide occurrences at

Maniitsoq but had diiculty ollowing themineralization in the subsurace. Most othe occurrences are hosted in a rock callednorite and or this reason, the belt isreerred to as the Greenland Norite Belt(GNB). Two major mining companiesexplored the belt or nickel in the 1990sbut let without drilling.

NAN geologists evaluated the GNB in2011 and decided there was potential todiscover economic deposits using heli-copter geophysics in combination with

diamond drilling and down-hole geo-physical surveys. In 2012, NAN surveyeda large portion o the GNB with theVTEM system, identiied numerous EManomalies and drilled nine holes. Three othe holes intersected high grade nickelsulphide mineralization.

The mineralization occurs beneath azone o much weaker, disseminated min-eralization that was discovered in the1960s. In May and June, NAN was able toraise over $7 million to inance a ollow-

up drilling at Maniitsoq this year. Themoney was raised in spite o very chal-

lenging market conditions or the mineralexploration and development sector.

Continuing on that positive note,Century Iron Mines Corporation oToronto is another Canadian exploration

and development company making newslately thanks to its interests in our ironore projects in Canada. The Duncan LakeProject is located in western Qubec, andthree others, Sunny Lake, Attikamagen,and the Altius Properties, all located inthe Labrador Trough region o Qubecand Newoundland & Labrador.

Century Irons current strategy is todevelop the DSO (Direct Shipping Ore)projects irst (Joyce Lake, Lac Le Fer andScheerville West), bring them into pro-duction starting rom 2015, and use theproceeds to develop the lower-grade andmore capital-intensive BIF (banded ironormation) projects, e.g., Rainy Lake.

The DSO targets have up to 7 Mt each at60%+ Fe and thus would be mined or threeto our years. The irst phase o operation

will involve crushing and screening. Thematerial produced will be lump and sinterines with iron and weight recovery o100%. Thus, no tailings will be generated.Lower-grade material would be stockpiled

at irst and processed aterwards.Century Iron plans to bring the JoyceLake DSO (Attikamagen) project intoproduction in 2015/2016. Ater that, theLac Le Fer (Sunny Lake) and ScheervilleWest (Altius properties) projects shouldstart producing.

The company plans to use cash lowsrom producing DSO projects, plus addi-tional unds, to build a 28-km road romthe Rail Loop to the Joyce Lake mine.Later, and in stages, the company intendsto build a railway rom the Rail Loop toJoyce Lake. There will also be other inra-structure or the BIF projects.

The ProjectThe Joyce Lake Direct-Shipping-Ore (DSO)project is part o Century Irons Attikamagen

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project, which is located 15 kilometresnortheast o Scheerville, Quebec, inNewoundland and Labrador. Attikamagenis a joint venture with WISCO andChampion Iron Mines Limited.

Century Irons NI 43-101-compliantestimate o March 2013 had shown 10million tonnes o Measured and Indicatedmineral resources at Joyce Lake, with anaverage grade o 59.45% total iron (TFe)

plus an additional 5.6 million tonnes oInerred mineral resources at a cut-ograde o 50% TFe.

This irst mineral resource estimateor Joyce Lake was a milestone in the

development o Century Irons LabradorTrough iron ore mining camp. The esti-mate covered only the northern part othe Joyce Lake property, and CenturyIron is continuing to advance explora-

The Net Present Value (NPV), using

an 8% discount actor, is $90.4 mil-

lion pre-tax; $51.8 million ater-tax;

The Internal Rate o Return is 37.0%

pre-tax, and 27.1% ater-tax;

The payback period is 2.5 years pre-

tax, and 2.6 years ater-tax;

The mine lie is expected to be 4

years, at 1 Mtpy in year 1 and 2 Mtpy

(million tonnes per year) in years 2-4

o iron ore lump and sinter nes;

Output is expected to be 65% sinter

nes and 35% lump iron ore;

The operating costs (loaded on ship

at Sept Iles) are estimated at $62.80

per tonne o iron ore; and

The initial required project capital is

$96.6 million o which $27.1 million

The resulTs of The 2013 PeAfor Joyce lAke were As follows:

Picturesque aerial view of Joyce Lake15 km northeast of Schefferville, Quebec,in Newfoundland and Labrador.


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will be or rail cars and trucks.

The Company plans to lease the rail

cars and trucks and is looking into ob-

taining hedge or o-tale debt nancing

or the remainder o the project capital.

Mining activities will be year-round,

with an ice bridge used in winter to

bring mineralized rock across IronArm Bay in Lake Attikamagen.

tion beyond the current resource bound-aries. The mineralization remains opento the south.

The company has two other DSO tar-gets with similar geophysical signatures,

about three kilometres south and south-west o Joyce Lake.

HighlightsCentury Iron added considerably to its

resource estimate in 2012 and urther in2013, and is now one o the larger iron orecompanies in Canada.

Century Iron has two strategic Chineseinvestors: (1) Wuhan Iron and Steel

(Group) Corp. with a 25% equity interest;and (2) China Minmetals Corporationwith a 5% equity interest.

The company has signed deinitivejoint-venture agreements with WISCO

or Attikamagen, and Sunny Lake. Theagreements will help ensure that CenturyIron will have the necessary unds todevelop these properties.

Inormation provided by the eatured

companies and PDAC indicate thatExploration and Development in Canadais alive and still active and despite sometroubled times, it will continue to be theenvy o the world. CMJ



| Exploration and Development

Rich in history, full of

Historic mine, modern technology

and future hedgesBy Western Correspondent Tanya Laing Gahr

In 1622, the Spanish ship NuestraSeora de Atocha sank in approxi-

mately 16 metres of water off the coastof the Florida Keys, taking with it an

almost priceless cache of copper, silver, goldand gems. For more than 350 years, diversand treasure hunters knew of the shipwreckand tried to recover the riches, but it wasntpossible until 1985, when diving technolo-gy advanced enough to allow Mel Fisherand a team of salvagers to locate and accessthe wreckand the sunken treasure.

I told you that story to tell you this one.Tim Termuende, president and CEO

of Omineca Mining and Metals Ltd. com-pares the Wingdam Mine and the centu-ry-plus quest for its gold to a sunken gal-leon with untold riches that everyone knows is there but has never been able to claim.That, in part, is what makes the project so exciting.

The Wingdam Mine is located about 40 kilometres from the mining town ofBarkerville in the historic Cariboo gold district in B.C. This was an area of significantexploration during the gold rush of 1861: over 73.7 million grams (2.6 million ounces)of gold have been reported by placer-miners in the district, with the actual totals likelymuch higher. Wingdams gold lies atop the bedrock in a deep channel 50 metresbeneath Lightning Creek, one of the most prolific placer mining creeks in the Cariboo.

The first company to try to access the buried treasure was the Lightning Creek Gold,

Gravels & Drainage Company that, in 1896, attempted to drive a drift about 2.4 kilome-tres downstream of the current Wingdam sitean initiative that was abandoned when,


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Len Sinclair (left), President andCEO of CVG Mining Ltd. and Steve

Kocsis, P. Geo., take a close lookat some of the results of their

hard work.



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in the early 1900s, looding and timbersupport ailure caused the collapse o thedrit irst and the companys inances sec-ond. Next up, Lightning Creek GoldMines Ltd. (later the Consolidated Goldand Alluvials o British Columbia) con-ducted extensive drilling to deine the

location o the channel and establishgrades. The goal was to use the Australiandeep-lead mining method in order to dritrom the bedrock into the pay gravels in

A look at some of the historicalevents that happened at the site.

Underground work at the site.


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| Company Profle RDH Mining Equipment

Simply

SolidSmall-town manufacturer takes on the

biggest projects thanks to confidence in

its equipmentBy Russell Noble

Machines manufactured by RDHMining Equipment of Alban, ON.

can be found on huge projectsaround the world.


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| Company Profle RDH Mining Equipment

RDH Mining Equipment is a small-town company with a world-class attitude and a global

vision. Its roots are planted on ahilltop in the Town o Alban, Ontario(Pop. 1,200) but its branches spread

across the country and its products canbe ound around the world.

Located just o Highway 69 about 40minutes south o Sudbury, the companyhas gr

Documents

Canadian Mining Journal August 2013