Digging deep: The mining industry in British Columbia 2013

Digging deepThe mining industry in British Columbia 2013

This is the 46th edition that outlines the financial results and major trends in BC’s mineral exploration, development and mining industry.

www.pwc.com/ca/mining

2 | The Mining Industry in British Columbia 2013

“ The BC mining sector had a tough year in 2013, but we’ve been through these cycles before. A focus for BC miners, government and communities is to ensure that BC remains a competitive region for a sustainable mining industry.”

Mark Platt, BC Region Mining Leader, PwC

The Mining Industry in British Columbia 2013 | 3

Preface

We are pleased to share the results of our annual PwC BC Mining Survey. This 46th edition outlines the financial results and major themes in BC’s mineral exploration, development and mining industry.

BC is one of the world’s most attractive mining regions given its rich resource base, pool of highly skilled workers, stable government and access to Asian markets. Still, the industry is constantly challenged to maintain this competitive edge. This report will highlight some of the opportunities and challenges in BC’s mining industry today when it comes to competitiveness.

BC’s mining industry contributes to the overall economic growth of the province, both directly and indirectly. The industry invests in exploring, developing and producing metals and minerals and creates jobs and other economic benefits. There are also the tax revenues BC mining companies generate, which help to support a wide range of government programs and services around the province and across Canada.

The mining industry is continuously working with government and stakeholders to improve and manage its environmental impact. In May 2011, the Mining Association of British Columbia (MABC) became the first provincial association to adopt the Mining Association of Canada’s Towards Sustainable Mining (TSM) Initiative. Today, a number of companies are working diligently to comply with TSM standards, demonstrating the industry’s commitment to protecting our natural habitat for future generations.

The results of this report are based on an in-depth survey independently prepared by PwC with the cooperation and assistance of mining companies with operations across the province. This year’s survey included 37 participants—21 operating metal and coal mines (including 1 smelter operation), 14 operations in the development stage and 2 in exploration.

We are extremely grateful for the continued support of the participants, as well as the industry associations including the MABC, the Association for Mineral Exploration BC (AME BC), the Mining Suppliers Association of BC (MSABC), and the Aboriginal Mentoring & Training Association (AMTA).

I hope you find this report informative and insightful.

Mark Platt BC Mining Leader and Partner at PwC

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Operating

Brule (Walter Energy Inc.)

Coal Mountain (Teck Resources Limited)

Copper Mountain (Copper Mountain Mining Corp.)

Elkview (Teck Resources Limited)

Endako (Thompson Creek Metals Company)

Fording River (Teck Resources Limited)

Gibraltar (Taseko Mines Limited)

Greenhills (Teck Resources Limited)

Highland Valley Copper (Teck Highland Valley Copper Partnership)

Huckleberry (Huckleberry Mines Ltd.)

Line Creek (Teck Resources Limited)

Mount Milligan (Thompson Creek Metals Company)

Mount Polley (Imperial Metals Corporation)

Myra Falls (Nyrstar NV)

New Afton (New Gold Inc.)

Perry Creek (Walter Energy Inc.)

QR Mine (Barkerville Gold Mines Ltd.)1

Quinsam Coal (Quinsam Coal Corporation)

Red Chris (Imperial Metals Corporation)

Trail Metal Smelter Operations (Teck Resources Limited)

Willow Creek (Walter Energy Inc.)

Development stage — permitted or active permitting

Ajax (KGHM Ajax International Ltd.)

Brucejack (Pretium Resources Inc.)1

Galore Creek (NovaGold Resources Inc.)

Harper Creek (Yellowhead Mining Inc.)

Kitsault (Avanti Mining Inc.)

Kutcho (Capstone Mining Corp.)1

Prosperity (Taseko Mines Limited)

Quintette (Teck Resources Limited)1

Schaft Creek (Copper Fox Metals Inc.)

Sukunka (Xstrata Plc)1

Suska (Xstrata Plc)1

Tulsequah Chief (Chieftan Metals Inc.)

Turnagain Nickel Project (Hard Creek Nickel Corp.)

Yellowjacket Gold (Eagle Plains Resources Ltd.)1

Exploration

Berg (Thompson Creek Metals Company)

Teck Resources Limited (Head Office)

Participants

Notes

1. New participant for 2013


Participant locations in 2013

Highland ValleyCopper

New Afton

Line Creek

Endako

Gibraltar

Prosperity

Elkview

Greenhills

Fording River

Coal Mountain

QuinsamCoal

Trail Metal SmelterOperations

Mount Polley

Willow Creek

PerryCreek

Galore Creek

Brucejack

Kitsault

Suska

Schaft Creek

CopperMountain

MountMilligan

Turnagain

Kutcho

Tulsequah Chief

Red Chris

Yellowjacket Gold

Berg

Huckleberry

Quintette

QR

Ajax

Brule

MyraFalls

Harper Creek

Sukunka

Teck (Head Office)

Operating

Permitted or active permitting

Highway 37

Exploration

Reclamation

Trailoperations


Executive summary

These are challenging times for BC’s mineral exploration, development and mining industry.

Volatile commodity markets, challenging financing conditions and rising energy and labour costs, pose a number of hurdles for companies across the province.

As a result, the net income and revenues generated by BC companies fell for the second straight year in 2013. Mining companies were forced to cut costs and some held back on development to try to maintain healthy balance sheets and sustain cash for long-term growth.

While it has been a difficult couple of years, mining companies have been through these types of ups and downs before. Mining is, after all, a cyclical business.

Investors and other stakeholders should take comfort that the industry has vast experience weathering these storms. Companies that survive often come out stronger and better prepared for the next stage of the cycle.

Looking ahead, mining companies are starting to gain confidence that the current downturn in the cycle will be short term event. The global economy is stabilizing as is growth in China, a key consumer of commodities produced in BC and around the world. These factors should alleviate an imbalance of supply and demand across certain commodities.

The ongoing challenge for mining companies – alongside their partners in government, First Nations and other communities – is to ensure BC remains a competitive place for mining investment despite these headwinds.

“The growth and sustainability of the mining industry is at a pivotal point in BC,” says Karina Briño, President & CEO of the Mining Association of BC (MABC).

“We have many advantages in BC to leverage going forward, including proximity to markets, a stable government and political system and expertise that is readily available; these advantages are integral components to positioning us as a competitive jurisdiction when it comes to the way we do business. Continued collaboration between industry, government and all stakeholders is necessary to maintain that competitiveness going forward.”

Karina Briño, President and CEO, MABC

“ We have many advantages in BC to leverage going forward, including proximity to markets, a stable government and political system and expertise that is readily available”


Financial overview

Gross mining revenues from survey participants were reported as $8.5 billion in 2013, down from $9.2 billion in 2012. That is a further drop from $9.9 billion reported in 2011, when commodity prices were at or near record highs. For example, the contribution from BC’s two largest revenue-generating commodities, metallurgical coal and copper, dipped as a result of the downward pressure on prices. (For more discussion on commodities, please see the Market shipments and market prices and Commodity performance and outlook sections of the report.)

Net income before taxes fell to $1.4 billion in 2013, compared with $1.8 billion in 2012 and down from $3.7 billion in 2011. The steady drop is due to the combination of lower commodity

prices and higher costs, as well as companies cutting back some activities as a result of the downturn in the sector.

Cash flow from operations from survey participants was $2.6 billion in 2013, up from $2.2 billion in 2012 and significantly below the $4 billion in 2011. Mining companies were actively cutting costs in 2013, and continued the exercise into 2014, to conserve cash that will help stabilize their balance sheets and set them up for future growth opportunities.

Total assets among survey participants were $16 billion. That compares with $13.9 billion in 2012, which was up from $13.1 billion in 2011. (For more detailed data, please see the The financial picture section of the report.)

Labour overview

The number of people working in direct jobs in BC’s mining industry increased to 10,720 in 2013, up from 10,419 in 2012, based on the survey results. Some companies were forced to reduce their headcounts and cutback operations to help curb costs during the downturn. This number does not include the indirect jobs the industry creates throughout the province. The BC government says more than 30,000 people were employed in mining, mineral exploration, and related sectors in 2012.

The increase in the BC mining workforce was accompanied by a drop in average salary per employee, to $91,900 in 2013, compared to $98,200 in 2012 and $93,900 in 2011. The average salary and benefits was $114,600 in 2013 per employee, compared with $121,900 in 2012 and $115,700 in 2011.

Attracting and retaining talent in BC’s mining sector remains a challenge, particularly as the Baby Boom generation continues to reach retirement age. It is not just the number of people that need to eventually be replaced, but also the depth of experience. The industry is planning ahead through a variety of programs that include training programs for Aboriginal peoples, women and new immigrants.

Ken Roberts, chair of the Mining Suppliers Association of British Columbia (MSABC), says the industry can be more competitive by ensuring it is attracting and retaining the best talent not just for today, but for the long term. That means making opportunities available for the next generation of geologists and engineers.

“The industry as a whole needs to be more creative in how we hire,” Roberts says.

2013 2012 2011

Gross mining revenues $ 8,537 $ 9,157 $ 9,886

Net mining revenues 1 7,008 7,844 8,747

Net income (pre-tax) 2 1,387 1,784 3,690

Cash flow from operations 2,568 2,230 4,013

Payments to governments 3 511 504 674

Exploration and development expenditures 4 476 680 463

Capital expenditures 1,785 2,746 2,943

Pre-tax return on shareholders’ investment (%) 13 23 46

Direct employment (number of employees) 10,720 10,419 9,310

Shipments (000s tonnes) 29,407 27,327 26,014

New capital raised 5 221 94 3,268

Statistical summary ($CAD millions, except where otherwise noted)

Notes

1. Net mining revenues are reported after deduction of smelting and refining charges, freight costs, and

marketing.

2. Some of the earnings reported are generated by trusts and joint ventures and do not include income

taxes. Consequently, to provide consistency in results, net income has been collated and reported on

a pre-tax basis.

3. Includes direct taxes, other levies and payments related to employment.

4. Totals as reported by the Ministry of Energy, Mines and Petroleum Resources.

5. Does not include debt restructuring or capital raised by parent companies that is not directly related to

the property in BC.


The financial picture

BC’s mining industry continues to face significant headwinds. Investment in the sector remained depressed and prices of key BC commodities such as coal, copper and gold have fallen from record or near-record territory earlier this decade. Confidence in the sector is low, making it more difficult for mining companies to raise money for future growth initiatives. As a result, mining companies are being forced to cut costs and conserve cash to stabilize their balance sheets. The impact is being felt across the industry – from the larger producers to the smaller exploration and development companies.

“It has been a very challenging time for prospectors and explorers here in BC,” says Gavin Dirom, President & CEO of the Association for Mineral Exploration British Columbia (AME BC).

Dirom says the freeze in financing available to junior companies has been one of the biggest challenges facing the industry over the past year and that the investment climate for mineral exploration and development has steadily worsened over the past few years.

This funding crisis is particularly pronounced for prospectors and junior mineral exploration companies. Nearly 60% of the mineral exploration and mining companies listed on the TSX and TSX Venture exchanges, or 945 out of 1,616, are headquartered in BC, according to AME BC. These BC-based companies raised about $2.6 billion in 2013, down from about $5.3 billion a year earlier.2

AME BC came out with a survey of its members in the fall of 2013 in which the majority of industry respondents reported a decline in exploration spending for 2013, as well as intentions of continued reduced spending in 2014.

Still, Dirom is optimistic, as are many exploration and mining companies across the province. That is because, as companies around the world look to expand their operations in future, they are expected to turn to more mining friendly and lower-risk jurisdictions such as BC.

“While it is very challenging, there is still investment money out there,” says Dirom. “And what we are seeing so far in 2014 is some confidence coming back into the market. We are hopeful that with the resilience and global experience we are fortunate to have in the BC industry, that it will be a much better year ahead.”

On the positive side, with reported exploration expenditures of $476 million3 in 2013, Dirom says BC now attracts nearly 20% of exploration spending in Canada, compared to just 6% in 2001. Exploration spending in BC was a record $680 million in 2012.

About 98% of expenditures are occurring at advanced copper-gold and coal exploration and development projects and not in grassroots exploration projects in BC.

“This is an important issue because mineral exploration, especially work undertaken by junior companies, is the lifeblood of the mining industry,” Dirom says. “Sustained investment in grassroots or early stage exploration is required to discover new deposits that eventually lead to advanced projects, construction and ultimately new mines in production, where the major revenue to government is generated.”

Earnings summary($CAD millions) 2013 2012 2011

Gross mining revenues $ 8,537 $ 9,157 $ 9,886

Less: Deductions 1,529 1,313 1,139

Net mining revenues 7,008 7,844 8,747

Less: Operating costs and other expenses 5,643 6,081 5,085

Other income 22 21 45

Less: Writedown of mining assets 1 — — 17

Net income (pre-tax) 1,387 1,784 3,690

Notes

1. Writedowns of mining assets recorded in the consolidated financial statements but

not in the financial statements of the participating mine are not included.

2. AME BC

3. Totals as reported by the Ministry of Energy, Mines and Petroleum Resources.


Notes

1. Bennett promoting BC at international mining conference. Ministry of Energy and Mines. Accessed.

www.newsroom.gov.bc.ca/2014/03/bennett-promoting-bc-at-international-mining-conference.html

Recent mine developments, such as the reopening of the New Afton Mine in 2012 and the opening of Mount Milligan in the fall of 2013, are clear indicators of the eventual success that results from prospecting, exploration and development. Since 2011, three new mines have come into production, Copper Mountain, New Afton and Mount Milligan, creating 1,195 jobs in the province. A number of new mines are under construction across the province. The BC government says new mines will open this year including Red Chris and Roman creating another 815 jobs.

The BC government announced this spring that three more mines are permitted (Bonanza Ledge, Treasure Mountain, Quintette) and seven major expansions of existing mines have been completed, supporting 3,000 existing jobs and creating 300 new jobs. BC currently has more than 20 major mines and expansions moving through the environmental assessment and permitting process, according to Bill Bennett, Minister of Energy and Mines and Minister Responsible for Core Review.

The provincial government’s BC Jobs Plan, released in 2011, targets eight new mines and nine upgrades and expansions to currently operating mines by 2015. The province says this will increase annual mine-operation revenue by $1.6 billion. It will also create 2,000 jobs during construction, and 2,000 new direct jobs and 3,000 indirect jobs during the operating life of the mine. It will also sustain 12,500 existing jobs (5,000 direct and 7,500 indirect) and provide more than $150 million annually in government revenue.

The BC government1 says the production value of mining has risen to $8.3 billion in 2012, up from $2.8 billion in 2001.

Another example of money being invested in the BC mining industry is the reopening of Taseko Mines Limited’s Gibraltar mine, after the company spent more than six years upgrading the facility. The upgrades are expected to allow the mine to be operational until 2039, whereas before the revamp, it was only expected to produce for three more years. The addition of the mill makes Gibraltar one of the largest employers in the Cariboo. (For more detail on some of the projects being advanced in BC today, please visit the Highlighted projects section of the report.)

On the positive side, with reported exploration expenditures of $476 million in 2013, Dirom says BC now attracts nearly 20% of exploration spending in Canada, compared to just 6% in 2001. Gavin Dirom, President & CEO of the Association for Mineral Exploration British Columbia


Financial results

Gross mining revenues totaled $8.5 billion in 2013, down significantly from $9.2 billion in 2012 and $9.9 billion in 2011. The decrease is due to the drop in price of a number of key commodities produced by BC mines, in particular metallurgical coal, copper, silver and gold, while the overall shipments of commodities from BC increased in 2013 compared to a year earlier.

Net income before taxes dropped to $1.4 billion, down from $1.8 billion in 2012. That compares to net income of $3.7 billion reported in the 2011 survey. Lower prices and, in turn, lower revenues resulted in decreased profits for mining companies in 2013.

Cash flow from operations came in at $2.6 billion, up from $2.2 billion in 2012 and significantly below the $4 billion in 2011. The increase comes as mining companies look for more efficiencies across their operations to cope with lower commodity prices and a tighter financing market.

Total assets among survey participants were $16 billion. That compares with $13.9 billion in 2012, which was up from $13.1 billion in 2011. The increase is the result of new mines going into development and production including Mount Milligan and Red Chris.

Total expenses were just under $5.6 billion in 2013, down from $6 billion in 2012 and compared to $5.1 billion in 2011. These costs include administration, depreciation, depletion and amortization, interest on long-term debt, stock-based compensation and other expenses. The drop is due to cost cuts across the industry as a result of lower commodity prices.

Capital expenditures fell to $1.8 billion, down from $2.7 billion in 2012 and $2.9 billion in 2011. Companies cut back on capital spending to conserve cash in the current downturn. Most of the spending in 2013 was on surface construction, as well as equipment.

Exploration and development expenditures among survey participants totaled $185 million, compared to $294 million in 2012 and $431 million in 2011. The decrease comes amid a pullback in exploration, as mining companies weather the current storm in the sector.

Total payments to government came in at $511 million in 2013. That is compared to $504 million in 2012, which is due to a decrease in net income and an increase in payments related to employment.

The amount of new capital raised by BC mining companies surveyed was $221 million, versus $94 million in 2012 and $3.3 billion in 2011. Companies are continuing to find it difficult to raise money given the nervousness among investors around the mining industry at this time, but the increase shows there is some confidence returning to the sector.

Return on shareholder investment fell to 13% in 2013, down from 22.8% in 2012 and 46% in 2011. Shareholders saw lower returns for invested capital as a result of the downturn, which negatively impacted stock valuations. This is an issue for BC’s competitiveness given that investors require returns to continue investing in the sector. It’s also an issue across the global mining industry.

Gross mining revenues

Gross Mining Revenues

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Net mining revenue was $7 billion in 2013, compared to $7.8 billion in 2012 and down from $8.7 billion in 2011. A continued slump in commodity prices caused the revenues in this category to once again fall below 2011 levels, despite an increase in overall product shipments. Below is a breakdown by commodity:

Metallurgical coal revenue fell to $3.1 billion in 2013, down from $3.5 billion in 2012 and $4.7 billion in 2011. The price of coal dropped to an average of US$160/tonne in 2013, down from US$193/tonne in 2012 and US$257/tonne in 2011. Shipments for metallurgical coal increased to 28.1 million tonnes in 2013, compared to 24.2 million tonnes in 2012 and 24.5 million in 2011.

Copper revenue increased slightly to $1.7 billion in 2013 from $1.5 billion in 2012 and $1.3 billion in 2011. Shipments of copper increased to 884,000 tonnes from 787,000 tonnes in 2012. Shipments totalled 668,000 tonnes in 2011, which is before new production came online in 2012 at the New Afton copper-gold mine. The price of copper fell in 2013 to an average of US$3.32/lb, down from US$3.61 in 2012 and well below US$4/lb in 2011. The price has continued to slip in 2014.

Zinc revenue totaled $628 million. That is slightly lower compared to $685 million in 2012 and $693 million in 2011. Shipments increased to 322,000 tonnes in 2013, up from 287,000 tonnes in 2012 and 289,000 tonnes in 2011. Zinc prices remained steady in 2013 at an average of US$0.87/lb compared to US$0.88/lb in 2012. Prices averaged US$0.99/lb in 2011.

Lead revenue totaled $189 million. That compares to $194 million in 2012 and $213 million in 2011. Lead shipments were consistent at 88,000 tonnes in 2013 and 2012, and 84,000 tonnes in 2011. The price of lead inched higher in 2013 to an average of US$0.97/lb compared to US$0.94/lb in 2012. Both are still below the average of US$1.09/lb in 2011.

Molybdenum revenue fell to $150 million in 2013, down from $248 million in 2012 and $256 million in 2011. The price of molybdenum fell to an average of US$10.42/lb in 2013, down from US$12.78/lb in 2012 and US$15.45 in 2011.

Gold revenues increased to $304 million in 2013, up from $275 million in 2012, both of which are higher than revenues of $152 million the year before. For BC mines, gold is mainly a byproduct derived from copper mining activities. The uptick over the past two years was due to the additional production from the New Afton mine, despite lower gold prices. The price of gold fell dramatically in 2013 to an average of US$1,411/oz, down from US$1,668/oz in 2012 and US$1,572/oz in 2011.

Silver revenue decreased to $626 million, down from $760 million in 2012 and $810 million in 2011. The lower revenue is directly related to the drop in silver prices in 2013. The average price of silver fell to US$23.79/oz in 2013, compared with US$31.16/oz in 2012 and US$35.31 in 2011. Silver is also a byproduct of metals such as copper, gold, lead and zinc.

Market shipments and market prices

Copper (LME Grade A)

Zinc (LME Cash)

Silver (London Spot)

Gold (London Final)

Lead (LME Cash)

Molybedenum (Dealer Oxide)

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Metallurgical Coal


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Gold (London Final)

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Lead (LME Cash)


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Gold (London Final)


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Zinc (LME Cash)


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Molybdenum (Dealer Oxide)


Commodity prices continued to disappoint in 2013.

As Canada’s largest copper producer, its largest exporter of metallurgical coal and only producer of molybdenum, BC has been impacted by the lower value of these commodities, as well as the steep drop in both gold and silver prices.

While the decrease in prices for industrial metals such as coal and copper has not been as severe as during the 2008-09 global recession, it has caused some setbacks for companies operating in the province.

For example, Walter Energy Inc. said in April 2014 that it would temporarily lay off about 700 workers at its two BC coal mines, Wolverine and Brazion, citing difficult market conditions and lower prices. Metallurgical coal prices had fallen to about US$120 per tonne by the spring of 2014, down from a record of around US$300 in 2011, due to oversupply and a slowdown in China’s economic growth, which had long fuelled demand for the commodity used to make steel.

Teck Resources Limited (Teck) announced it is deferring the restart of its Quintette coal mine in BC “until market conditions for a restart are more favourable.”

The lower commodity prices are to blame for these moves.

Gold prices have been a big story over the past year. The price of the metal dropped to about US$1,300 per ounce in the spring of 2014, down from US$1,700 at the start of 2013.

The metal, considered a safe haven for investors in times of uncertainty, fell against a strengthening US dollar, buoyed by a steady recovery in the American economy. Mining companies around the world have been forced to slash costs, take writedowns on projects and curb development as a result of the drop in the price of gold.

Silver prices have also fallen sharply since early 2013. The metal, which is viewed as both a currency and an industrial play for investors, is trading around US$20 per ounce, down from US$32 per ounce in early 2013. The drop is being blamed in part on oversupply of the metal on global markets.

Copper is trading at about US$3.00 per pound, down from its record of US$4.60 in early 2011. That said, the price of copper is still economic for many mining companies that produce it. The metal, used in everything from plumbing to automobiles and computers, has decreased in price as a result of oversupply and a drop in demand, particularly as China’s economy gears down.

China is the world’s largest consumer of copper and other industrial metals and its slower growth is a concern. Still, many point out that its current growth around 7% – down from years in the double digits – is still strong. That’s why many mining companies continue to count on future demand from the resource-hungry country as it builds out its vast infrastructure base.

Other emerging markets, such as India and Brazil, are also expected to keep fuelling demand for metals. Add to that the gradual economic recovery in the US and parts of Europe, and it is clear why mining companies remain optimistic for the long term.

Commodity performance and outlook


Net revenue by product

These charts show that it was another difficult year for commodities in 2013. Prices for BC’s main commodities such as coal, copper, silver and gold all fell, some dramatically. Zinc and lead were the only metals that saw prices remain steady year over year. (For more information on each metal, please see the Market shipments and market prices section of the report.)

Metallurgical coal continued to dominate BC’s mining sector in 2013 representing 43% of revenues, followed by copper concentrates at 23%, silver at 9%, zinc and zinc concentrates at 9% and gold at 4%.

Outlook

Analysts are forecasting prices of most precious and non-precious metals produced in BC to rise over the next 12 months. According to consensus estimates, copper, silver, zinc and lead are expected to see moderate growth, recovering from early year losses. Gold is expected to decline slightly from Q1 2014 spot rates.

Coal prices continued their downward trend into Q1 2014 due to an over-supplied market. However, analysts predict a moderate recovery during the remainder of the year driven by continued momentum of Asian imports.

2013 2012Net Revenue by Product

Metallurgicalcoal43%


Thermal coal4%

Thermal coal8%

Copper23%

Copper19%

Zinc9%

Zinc9%

Molybdenum2%

Molybdenum3%

Silver9%

Gold4%

Lead3%

Silver10%

Gold4%

Lead2%

Misc.1%

Misc.3%

2013 2012Net Revenue by Product



Thermal coal4%

Thermal coal8%

Copper23%

Copper19%

Zinc9%

Zinc9%

Molybdenum2%

Molybdenum3%

Silver9%

Gold4%

Lead3%

Silver10%

Gold4%

Lead2%

Misc.1%

Misc.3%

Net revenue by product 2012Net revenue by product 2013

Gold ($/oz) 1,284.00 1,214.00

Silver ($/oz) 20.00 21.00

Zinc ($/lb) 0.90 0.92

Lead ($/lb) 0.94 1.00

Copper ($/lb) 3.01 3.21

Metal Spot price at March 31, 2014

2013 Analyst consensus estimate

at April 7, 2014


Notes

1. Mineral Titles Branch of the Ministry of Energy, Mines and Petroleum Resources

2. Totals as reported by the Ministry of Energy, Mines and Petroleum Resources

BC is considered one of the world’s most attractive mining jurisdictions given its rich resources, highly skilled workforce, political stability and access to customers in Asian markets.

The province is the country’s largest producer of copper, largest exporter of coal and its only producer of molybdenum. With 1,200 mining companies, BC is home to more than half of Canada’s mining exploration firms and has the largest concentration of mining exploration firms in the world. BC also has the world’s largest concentration of exploration companies and geoscience professionals. In Vancouver alone, there are more than 400 service suppliers to the mining industry.

BC’s tax regime remains among the most competitive in North America and the sector still benefits from incentives such as the Mining Exploration Tax Credit, the Mining Flow-Through Share Tax Credit and the New Mine Allowance.

As announced by BC Premier Christy Clark at AME BC’s 2014 Roundup, the BC Mining Flow-Through Share Tax Credit will be extended to December 31, 2014. The credit allows individuals who invest in flow-through shares to claim a non-refundable tax credit equal to 20% of their BC flow-through mining expenditures. The industry is encouraging government to make the tax credit permanent.

The BC government’s decision in 2013 to exempt some low-impact exploration activities from requiring a Mines Act permit amendment has also benefitted the industry. Efforts to improve the permitting process and the move to multi-year and multi-area based exploration

permits have been well received by the industry. The province’s recent investment of $9 million to bring more certainty to timelines for environmental assessments will help improve BC’s investment climate. However, the industry is concerned about the negative impact that will come from the possible introduction of additional permitting costs for exploration companies. The lengthy permitting process is a challenge for mining companies and can generate high costs for companies. Mining company executives are also calling for more transparency in the permitting process.

Overall, BC’s mining industry believes more can and needs to be done for the province to remain competitive.

Staying ahead of the game: How BC can better compete

Exploration and development expenditures in the province 2 ($CAD millions)

'06

100

200

300

400

500

600

700

800

2012 201320112010200920082007

Greenfield Exploration

Properties under Development

Development on Producing Properties

According to Ministry of Energy, Mines and Petroleum Resources2

Exploration and Development Expenditures in the Province

0

1

2

3

4

6

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2012 201320112010200920082007

Claims Staked in BC (millons of hectares)

Claims staked in BC 1 (millions of hectares)

'06

100

200

300

400

500

600

700

800

2012 201320112010200920082007

Greenfield Exploration

Properties under Development

Development on Producing Properties

According to Ministry of Energy, Mines and Petroleum Resources2

Exploration and Development Expenditures in the Province

0

1

2

3

4

6

5

2012 201320112010200920082007

Claims Staked in BC (millons of hectares)


Keeping pace

BC needs to remain competitive against other mining jurisdictions in order to secure critical investment dollars over the long term. This is important for the industry, but also for the province given the significant impact the mining sector has on the overall economy.

BC’s ranking in the annual Fraser Institute survey of mining jurisdictions has been improving in recent years. In the 2013 survey, BC ranked fifth out of 112 global mining jurisdictions when it comes to mineral potential, and it leads Canada in geological attractiveness. However, it ranked 32nd for policy potential, behind a handful of provinces such as Alberta, New Brunswick, Saskatchewan and Ontario.

BC mining companies are calling on policymakers to provide greater certainty and stability around policy—from permitting to taxation—to help lure investors and, in turn, to improve the province’s competitiveness.

A recent report released by the non-profit research organization Resource Works shows that a 10% increase in BC’s resource economy would add $3.7 billion to its GDP and create almost 30,000 new jobs in the province, more than half of them in the Metro Vancouver region.

“Resources clearly dominate growth in the goods-producing sector,” states the report titled The 7 Myths of the BC Resource Economy: Revealing the High Impact of a Vital Sector, written by Philip Cross, the former Statistics Canada chief economic analyst.

Industry calling for increased collaboration

Mining executives across the province are calling for better policy and tax measures from the government to help maintain BC’s competitiveness. Issues they say could threaten investment in the province include overlaps in the mine permitting processes, uncertainty around First Nations land claims, and environmental regulations. Higher taxes and an increase in costs such as electricity rates are also considered a drain on profits, and in turn future investment.

Below are some thoughts from BC’s mining industry on ways it can work with government and other stakeholders on solutions:

Permitting

A key area of regulatory overlap is in permitting mining projects, particularly surrounding environmental regulations. Until recently, BC mining projects could trigger not only a provincial environmental assessment under the British Columbia Processes for Reviewing Environmental Assessment Act (BCEAA), but also a federal review through the Canadian Environmental Assessment Act (CEAA).

There have been attempts to harmonize the federal and provincial regulations since their introduction, and in 2012 the federal budget introduced legislation that repealed the CEAA and replaced it with an updated Canadian Environmental Assessment Act, 2012 (CEAA 2012). A key change in CEAA 2012 was to introduce

substitution and equivalency provisions that require the Minister of Environment to allow a provincial process to be substituted for the federal environmental assessment process.

Commitments were made in the BC Jobs Plan to reduce the backlog of Notice of Work (NOW) permit applications and maintain a 60-day turnaround time going forward to encourage more investment in mineral exploration, especially grassroots projects. The BC government says this is part of its BC Jobs Plan commitment to having eight new mines in operation and nine more expanded or upgraded by 2015. This would result in well-paying jobs that support communities across the province.

The governments of BC and Canada have agreed to a Memorandum of Understanding that will eliminate duplication in the review process for environmental assessments – reducing costs for reviews, and making them timelier.

The backlog for mining permits has been reduced by 80% since August 2011 and turnaround times for these permits have been reduced from an average of 110 days to 60 days. The backlog for Water and Land Act permits has also been cut in half. Progress is being made.

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Ease the burden

Mining companies say the government needs to ease some of the burden put on them during the permitting process.

Bob Quartermain, president and CEO of Pretium Resources Inc. (Pretivm), said timely permitting is also a significant issue for advancement of the company’s Brucejack project and for BC’s competitiveness overall.

“BC has many things going for it, but to stay competitive we need to align the provincial process with the federal process to make permitting more efficient,” he said, adding that it costs mining companies more when there are delays and they have to deal with both government bodies.

He also thinks the permitting system needs to be more adaptive, including different processes for smaller projects versus larger ones that may require more effort due to their size and scale.

“Because Brucejack is a small project, parts of which were previously permitted it may not require the same scrutiny as a much larger greenfield project,” he said. “We would like to see more efficiencies such as this in the permitting process going forward.”

Land access

BC also faces unique challenges around land access, which have created uncertainty. These include disputed land claims, particularly surrounding relationships between various levels of government and First Nations.

A recent Fraser Institute survey on BC’s mining policy performance says uncertainty concerning disputed land claims was the “single greatest factor deterring mining investment in British Columbia over the past five years.” The 2012/2013 Survey of Mining Companies said 33% of respondents reported that they were “strongly deterred” due to this factor and another 30% were “mildly deterred” due to this type of uncertainty.

There has been progress with a number of new agreements that involve direct sharing of royalties between the province and First Nations, as well as providing more benefits from mining and resource development.

The BC government has a “One Land Manager” approach to natural resource decision making. The goal is to continue to work with all levels of government and First Nations to streamline permitting decisions to encourage economic development.

Taxes

A stable tax regime is also something BC needs to ensure long-term competitiveness. Clarity around future taxation is key for mining companies to invest in the province.

There is wide diversity across Canada’s three major mining provinces—BC, Ontario and Quebec—in their corporate income tax systems.

The BC government does offer some government royalty programs and tax incentives that help attract mining investment in the province. These include the Mining Exploration Tax Credit, which provides a 20% refundable tax credit for eligible mineral exploration in BC and an enhanced rate of 30% for qualified mineral exploration in areas impacted by the mountain pine beetle. There is also the BC Mining Flow-Through Share Tax Credit, which provides a non-refundable 20% tax credit. This credit was extended for an additional year to December 31, 2014 by the 2014 BC budget tabled on February 18, 2014.

That said, there have been some other recent tax and policy measures that are of concern to the industry and that it believes could threaten its competitiveness. These include a 1% increase in corporate tax, the return to the provincial sales tax (PST) system in 2013, higher electricity rates, new fees for environmental assessments and the carbon tax, to name a few.

“There is a cumulative effect of these measures on the industry at a time when the commodity markets are already volatile,” says MABC’s Karina Briño.

“In the big picture it is about competitiveness and our ability to be an attractive jurisdiction in which to invest. We need to embrace opportunities to bolster our competitiveness in order to continue being considered a mining jurisdiction of choice in the years ahead.”

Photo Daniel Henshaw, courtesy of Imperial Metals Corporation


Return to the PST

In the past year, the key commodity tax issue continues to be the reinstatement of the BC PST and the additional costs incurred by the mining industry. The February 2014 budget did not provide any additional relief for the industry by expanding or modifying the existing production machinery and equipment exemption (PME exemption) to include energy products (such as electricity and natural gas) consumed in the mining process.

The BC Ministry of Finance has stated that PST audits will commence after April 1, 2014 and it is likely the mining industry will be a key industry subject to audit. The areas of focus will include the application by the mining industry of the PME exemption and compliance on the use of exemption certificates. With the implementation of the Provincial Sales Tax Act in 2013, the Ministry took advantage of the opportunity to refine the PME exemption process to ensure vendors obtain sufficient documentation from the mining company to support the exemption. This requires additional administrative work to align the purchasing process with the exemption certificates to clearly identify the specific property or services eligible for the exemption. As a result, the mining industry will experience additional administrative costs.

There have been minimal GST changes that significantly impact the mining industry; however, the Canada Revenue Agency (CRA) released an updated Memoranda Series Chapter 8.6 Input Tax Credits for Holding Corporations and Corporate Takeovers, in November 2011. The release of this publication corresponded with an increase in CRA audits of parent or holding corporations and resulted in the CRA applying a higher level of scrutiny to input tax credit recoveries.

Overall, the mining industry will continue to incur direct and administrative costs relating to the return of the BC PST and increased CRA audit activity relating to holding corporations.

Electricity prices soar

Another impact has been a hike in electricity rates across the province, which means a big increase in expenses for mining operations.

Pierre Lebel, Chairman of Imperial Metals Corporation, says about one-third of the company’s operating costs relate to powering its operations, which includes its Mount Polley and Huckleberry mines in BC and the Red Chris mine that is scheduled for commissioning in mid-2014.

“It is a big chunk of the costs and it is a big concern when it comes to competitiveness in the sector,” he says.

When mining companies have to incur higher costs, especially when metal prices are lower as they have been in recent years, it can lead to cutbacks across the operation, including potential job losses.

Photo Daniel Henshaw, courtesy of Imperial Metals Corporation


Labour

BC is known for its highly skilled workforce and growing participation of Aboriginal people, women and immigrants. Still, more can and needs to be done today to prevent labour shortages tomorrow that could impact mining operations across the province.

With more people leaving the workforce, as the Baby Boom generation continues to retire, the industry and government must continue to work to attract skilled labourers, and then retain them.

The BC mining industry will need to hire more than 15,000 new workers over the next decade to meet its labour requirements, according to a 2012 report by the Mining Industry Human Resources Council (MiHR). The report shows cumulative hiring requirements over the next 10 years are projected to be 16,770 workers under a baseline scenario, which includes the exploration, mining and stone, sand and gravel industries. Minus the stone, sand and gravel industry, that number is 15,340 workers. If the economy expands more than economists forecast, the overall number is expected to climb to a requirement of about 19,860 workers, or fall to 13,340 workers if growth slows.

There are already programs underway to address these challenges facing the mining industry, both formal and informal. These programs are also evolving to meet the changing needs of the workforce.

In early 2014, for example, the BC Aboriginal Mine Training Association changed its name to the Aboriginal Mentoring & Training Association (AMTA) in an attempt to open the door to increased Aboriginal workforce inclusion and contributions to Canada’s provincial and national economies.

“We remain committed to empowering First Nations to create economic health for themselves and their communities through skills training, education and career opportunities,” says AMTA CEO Laurie Sterritt. “What has changed is that we will be working with a broader group of resource-sector partners and companies, with more potential job opportunities for AMTA candidates.”

Since 2010, AMTA has placed more than 730 Aboriginal people into mining-related jobs and has registered almost 2,300 more in a variety of education, training and development initiatives. The results include the successful transition of 62% of candidates from unemployment to gainful employment, with an extraordinary 92% retention rate.

“We work with our community, industry and training partners to develop and customize education and training initiatives, as necessary,” says Sterritt. “Our goal is to deliver training solutions that meet company-specific needs, in ways that work for the First Nation communities and their members. We want to provide the right solution for the company and the communities in which they operate.”

According to a PwC report released last year, each AMTA candidate on average contributes approximately $137,000 to Canada’s GDP, $107,000 of which is realized in BC. This results in a total impact to the national economy of almost $98 million annually.

AMTA and New Gold Inc.’s New Afton mine received the 2013 BC Mining HR Diversity Award for their collaboration in recent years. The award recognizes that the BC AMTA-New Gold initiative has had a significant positive impact at the New Afton operation, on its employees, and for nearby communities. About 24% of the workforce at New Afton self-identified as Aboriginal.

“This partnership demonstrates that opportunities created by the mining industry can help bring communities together,” MABC’s Karina Briño said when the award was announced earlier this year.

The BC mining industry is the largest private sector employer of Aboriginal peoples, according to MiHR. In a 2012 report, MiHR says about 6% of Aboriginal peoples work in mining in the province, as compared to 4% in other sectors. Aboriginal participation in the sector is particularly important given the proximity of many projects to First Nation communities.

Direct employment (Number of employees)

Direct Employment(Number of employees)

Average salary and benefit cost per employee

5,000

6,000

7,000

8,000

9,000

10,000

11,000

‘12 ‘13‘11‘10‘09‘08‘07‘06‘05‘04

Average number of direct employeesAverage benefits per employeeAverage salary per employee

Aver

age

num

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f em

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(000

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$CA

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0204060

80

100

'12'11'10'09'08'07

20070

20

40

60

80

100 10

8

6

4

2

120

2008 2009 2010 2011 2012


Towards Sustainable Mining (TSM)

Part of the industry’s collaborative efforts include working with the government and all stakeholders to help the industry better understand the impact their operations have on the surrounding communities. BC’s mining industry has been diligent in ensuring it does its part to protect the environment, including mitigating and maintaining any impacts of its activities.

In May 2011, the MABC became the first provincial association to adopt the Mining Association of Canada’s Towards Sustainable Mining (TSM) Initiative. Today, a number of companies are working to comply with TSM standards to help improve the industry’s performance not just in BC, but also across Canada and around the world.

The goal of TSM is to improve the industry’s performance by finding common ground with communities to help build a better mining industry now and for future generations.

TSM is based on a set of guiding principles that include engaging with communities, implementing world-leading environmental practices, and ensuring the safety and health of employees and their communities.

TSM monitors how well companies meet the principles by reporting on indicators such as tailings management, energy use, Aboriginal and community outreach, crisis management planning, biodiversity conservation management and health and safety. It is also working on indicators to assess how companies handle mine closures.

In 2013, Teck’s Elkview mine in BC was the recipient of TSM’s special Leadership Award for three focus areas—environmental footprint, communities and people, and energy efficiency. This award is granted only when a facility meets or exceeds a level “A” ranking in its results across all of the four performance categories.

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Despite the tough times across the industry, BC mining companies continue to forge ahead. Companies are cutting back to cope with the current downturn, but many are also being selective about where to reduce expenditures and where to increase them, particularly on projects that have been in the works for many years and are ready to move forward.

In fact, a number of BC mining companies have made large capital expenditures since the start of 2013. They are doing so with the long-term view that the markets will eventually recover and demand for BC commodities will remain steady around the world.

The following are examples of four BC projects that have advanced significantly in 2013 across the development and production cycles. They include one in the permitting stage, a major mine expansion, a project about to start commissioning and another that achieved commercial production earlier this year. These examples are evidence that BC’s mining industry remains competitive and is putting its money to work for the future.

Brucejack

The project: Pretivm’s Brucejack gold project is located in northern BC.

The resource: The feasibility study was completed last year and is being updated with the mine plan and mining stopes to incorporate the revised economic parameters of US$1,100/oz gold, US$17/oz silver and $0.92 CAD:US exchange rate. Based on this work, the production rate of 2,700 tonnes per day has been confirmed. The feasibility study is on track.

The status: Permitting of a high-grade underground gold mine at Brucejack is underway, with commercial production targeted to commence in 2016. The company expects to file its Environmental Assessment Certificate application by mid-2014. Once the application has been accepted, the British Columbia Environmental Assessment office has a maximum of 180 days to complete its review and prepare an assessment report for a decision by the Minister of Environment and the Minister of Energy and Mines.

Highlighted projects

Despite the tough times across the industry, BC mining companies continue to forge ahead.

Brucejack • Courtesy of Pretivm


Red Chris

The project: Imperial Metals Corporation’s wholly owned Red Chris copper-gold property is located 80 km south of Dease Lake in the traditional territory of the Tahltan First Nation in northwest BC.

The resource: Reserves of over 300 million tonnes grading 0.359% copper and 0.274 g/t gold provide for a 28-year project life at a milling rate of 30,000 tonnes per day. Recovered metal in concentrate would total 2.08 billion lbs copper and 1.324 million oz gold.

The status: The provincial Environmental assessment process was completed and an Environmental Assessment Certificate obtained in August 2005. Federal approval for the Red Chris project under the CEAA was completed in May 2006. In May 2012, the company was issued its Mines Act permit, which allowed it to begin construction. The company is targeting to commence commissioning of the Red Chris mine in June 2014 and to achieve full operations in the fourth quarter of 2014.

Gibraltar

The project: Gibraltar, located in south- central BC, is a joint venture owned by Taseko Mines Limited (Taseko) (75%) and Cariboo Copper (25%).

The resource: Gibraltar is the second largest open pit copper mine in Canada and one of the largest employers in the Cariboo region. When Gibraltar was restarted in 2004, the proven and probable reserves were 149 million tonnes and the mine life was 12 years. Today, the mine life has more than doubled to 25 years following the most recent reserve update in December 2013. Total production at Gibraltar for 2013 was 121.4 million pounds of copper and 1.5 million pounds of molybdenum.

The status: Taseko has invested more than $700 million to expand and modernize the operation, which was originally scheduled for demolition when the company acquired it in 1999. The additional capacity has increased Gibraltar’s annual copper production by approximately 60 million pounds to 165 million pounds, at life of mine average grade.

Mount Milligan

The project: Mount Milligan is a copper and gold mine owned by Thompson Creek Metals Company and located approximately 90 miles northwest of Prince George in central BC. The phased start-up began in August 2013, followed by the first production of copper-gold concentrate in September 2013.

The resource: Mount Milligan has 2.1 billion pounds of copper in reserves, 6 million ounces of gold in reserves (second largest gold reserve in Canada) and a 22-year mine life.

The status: The mine achieved commercial production on February 18, 2014, defined by the company as operation of the mill for a period of 30 days at 60% or more of design capacity mill throughput, equivalent to 36,000 tonnes per day. The Mount Milligan mine is a conventional truck-shovel open pit mine with a 60,000 tonnes per day copper flotation concentrator.

Red Chris • Photo Daniel Henshaw, courtesy of Imperial Metals Corporation


Mining has always been a cyclical business. The past five years have proven that point. The industry bounced back strongly from one of its worst recessions in history, during the 2008-09 global financial crisis, thanks to soaring commodity prices in 2011. Since then, however, the metals and minerals markets have once again been under pressure.

While prices are still strong compared to the commodities crash five years ago, they have been depressed. No metals have been spared the drop, which has been largely driven by volatile global markets and fluctuations in supply and demand. The result has been a drop in mining company valuations around the world. Investors have since lost confidence in the sector, at least in the short term, until prices and valuations recover.

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Many believe the worst may be over in the current downward part of the cycle. Mining companies remain optimistic and ready to adapt to the challenges of the market. For some, that means cutting costs and spending now to better position themselves for the future. We have seen a number of companies taking these measures now to preserve their cash. For example, Vancouver-based Teck said recently it was increasing its efforts to reduce costs and capital spending.

“Our industry is facing very challenging market conditions and this requires us to reduce our costs across the board while ensuring we remain focused on safety and environmental performance. With a strong focus on reducing costs, we know we can emerge from this current cycle even stronger than before. On the bright side, the seeds are being sown for another strong up cycle as it becomes more and more difficult to bring on any new supply in most countries around the world yet demand continues to march upwards globally,” said Don Lindsay, President and CEO of Teck.

Currency tailwinds can help

One factor that is working in favour of mining companies in today’s market is the lower Canadian dollar as compared to the US currency. The dollar has dropped to around 90 cents US in the spring of 2014, compared to 98 cents a year earlier. That is good news for mining companies looking to curb costs.

“We sell our commodities in US dollars, which for operators makes a huge difference in their costs—which are in Canadian dollars,” notes MSABC’s Ken Roberts.

This is especially helpful given how much costs have increased in recent years across a number of commodities, including gold, copper and coal produced here in BC, Roberts says.

“The lower dollar makes a big difference to our competitiveness against other players in the international market.”

Conclusion and outlook

“ The lower dollar makes a big difference to our competitiveness against other players in the international market.” Ken Roberts, MSABC


Resiliency remains

While it has been a tough few years in the mining sector, including in BC where the industry plays a huge role in the economic fortunes of the province, mining companies have proven to be resilient.

The mass failure of junior companies that some predicted in today’s market has not happened. Instead, many mining companies have hunkered down, cut costs and found alternative ways to finance their operations.

The resolve is due to a widely held belief that demand for commodities used to build roads and bridges, and make the cars, computers and smartphones that society cannot do without, will continue. That demand will come from emerging economies such as China, India and Brazil. Although the growth in these countries has slowed in recent years, demand is still considered strong. There is also the increasing demand from developed nations such as the United States and parts of Europe.

While it could be some time before we see record metal prices once again, mining companies are expected to come out of this latest squeeze in the cycle leaner, and stronger, ready for the next upward swing.

BC mining companies in particular are poised to benefit with the recent opening of the Mount Milligan copper-gold mine in central BC and the Red Chris copper-gold mine set to open later this year in northwestern BC.

Other projects continue to advance through the permitting and environmental process, including Brucejack (Pretivm), KSM (Seabridge Gold Inc.) and Kemess (AuRico Gold Inc.).

Despite some recent difficulties, BC’s mining industry continues to dig deep and stay the course. The key now is for BC to keep its competitive advantage.

Eight-year financial summary($CAD millions, except where otherwise noted)

2013 2012 2011 2010 2009 2008 2007 2006

Gross mining revenues $ 8,537 $ 9,157 $ 9,886 $ 7,905 $ 7,019 $ 8,355 $ 6,863 $ 8,076

Net mining revenues 1 7,008 7,844 8,747 6,574 5,733 6,779 5,555 6,590

Net income (pre-tax) 2 1,387 1,784 3,690 3,718 2,250 3,234 1,740 3,039

Cash flow from operations 2,568 2,230 4,013 2,855 2,170 3,423 1,974 2,885

Total assets 15,568 13,933 13,059 8,546 7,696 6,204 6,370 5,251

Pre-tax return on shareholders’ investment (%) 13.0 22.8 46.0 62.9 44.3 97.5 45.8 83.9

Direct employment (number of employees) 10,720 10,419 9,310 8,195 7,688 7,607 7,449 7,345

Payments to governments 3 511 504 674 515 413 545 463 799

Shipments (000s tonnes) 29,407 27,327 26,014 24,937 21,303 26,840 24,854 25,449

Exploration and development expenditures 4 476 680 463 322 154 367 416 265

Capital expenditures 1,785 2,746 2,943 1,252 568 853 964 513

Notes

1. Net mining revenues are reported after deduction of smelting and refining charges, freight costs, and marketing.

2. Some of the earnings reported are generated by trusts and joint ventures and do not include income taxes.

Consequently, to provide consistency in results, net earnings have been collated and reported on a pre-tax basis.

3. Includes direct taxes, other levies and payments related to employment.

4. According to Ministry of Energy, Mines and Petroleum Resources.


Mining Excellence at PwC

“ The positive story for miners is that the long-term growth fundamentals remain intact. But, mining companies are facing significant downward pressure. As an industry, we need to fully address the confidence crisis, before we are able to move on to the next phase of the cycle.”

John Gravelle, Global Mining Leader, PwC

Delivering local solutions to global challengesThe mining sector is facing a range of competing trends and a rapidly changing global business environment. Against the backdrop of commodity price fluctuations, miners need to balance shareholder dividend expectations while maintaining an investment pipeline in the midst of increasing operating costs. Safety, environmental and community principles also continue to shape the industry as miners look to achieve their licence to operate and deliver on corporate responsibilities.

Mining Excellence at PwC has been designed to mobilize and leverage PwC’s collective global knowledge and connections to deliver an exceptional and tailored client experience, helping our clients navigate the complex industry landscape and meet their growth aspirations. Our team of specialists is exclusively focused on the sector and brings an industry-based approach to deliver value for you and your organization.

Mining Excellence at PwC provides our clients:

Leading edge knowledge and global thought leadership

With significant investment in the research behind our mining publications and a comprehensive industry learning and development program, our professionals can share both industry and technical insight with our clients, such as:

• a library of industry publications designed to help challenge “conventional” thinking and delve into topical industry issues. This includes: - global thought leadership

publications including Mine and Mining Deals

- flagship territory publications focused on regional and industry-specific issues

• extensive industry development program for our people and clients, featuring our annual learning and development programs: - Americas School of Mines (North

America) - London School of Mines (United

Kingdom) - Asia School of Mines –– Hard Hat: The

Mining Experience (Australia)

Connections to our vast network of mining experts and global client portfolio

We have the widest network of industry experts who work out of strategic mining hubs across the globe to help better connect you to vital mining markets.

Our connections provide:• seamless client service delivered with

collaborative cross-border account management

• maximized deal potential through a well-connected global community of mining leaders

• a mobile workforce to ensure effective service delivery in even the most remote mining locations.

The delivery of an experience that meets our clients’ definition of ‘value’

With mining experts working around the globe, our award winning teams are helping clients deliver on specific projects and organizational growth aspirations. We offer advisory, tax and audit services to global corporations and locally listed companies.

Mining Excellence at PwC complements this with:• a suite of niche mining consulting

capabilities focused on optimizing value across mining operations and effectively managing risk to help our clients grow their business and deliver shareholder value

• a comprehensive client feedback program to ensure we are always improving and delivering on individual client needs.


Audit and Assurance Group and Tax Partners

Mark Platt [email protected] 604 806 7093

John DeLucchi [email protected] 604 806 7575

Lana Kirk [email protected] 604 806 7102

Dean Larocque [email protected] 604 806 7173

Craig McMillan [email protected] 604 806 7724

Mark Patterson [email protected] 604 806 7160

Ken Scott [email protected] 604 806 7175

Garry Eng (Tax) [email protected] 604 806 7037

Tim Johnston (Tax) [email protected] 604 806 7831

Sean Wilson (Tax) [email protected] 604 806 7187

Senior Managers

Mazin Khan [email protected] 604 806 7566

Elena Orlova [email protected] 604 806 7358

Alexander Shulga [email protected] 604 806 7762

Tiffany Spurling [email protected] 604 806 7190

Eric Talbot [email protected] 604 806 7077

Len Wadsworth [email protected] 604 806 7085

Brooke Ko (Tax) [email protected] 604 806 7798

Charmaine Neilsson (Tax) [email protected] 604 806 7573

Managers

Marianne Carroll [email protected] 604 806 7237

Amy Bonner [email protected] 604 806 7159

Kevin Cheung [email protected] 604 806 7131

Zhe Xuan Choo [email protected] 604 806 7645

Joshua Contant [email protected] 604 806 7108

Kamil Dziegielewski [email protected] 604 806 7720

James Paterson [email protected] 604 806 7022

Jamie Rule [email protected] 604 806 7553

Jeannette Vergara Canoles [email protected] 604 806 7327

Vangel Yang [email protected] 604 806 7301

Pamela Gao (Tax) [email protected] 604 806 7064

Shanawaz Islam (Tax) [email protected] 604 806 7786

Julia Loh (Tax) [email protected] 604 806 7279


110 years ago Britannia was transformed into a Mining TownNow, it is an award-winning Museum and National Historic Site

In recognition of the contribution of the Britannia Mine Museum

In 1904 the Britannia Mine was initiated after the area was discovered to be rich in copper. Even with no road or train access, the mine grew to be one of the largest copper mines in the British Empire and an economic backbone of BC.

In 2005 the EPCOR Water Treatment Plant came into operation to manage Britannia mine’s acid rock drainage and ensure clean water. This was the starting point for the Museum to expand and transform the site to an international tourist destination.

Revitalized in 2010 with a $ 14.7 million redevelopment, the Museum commemorates the accomplishments and ingenuity of Canada’s mining pioneers and showcases the evolution of the mining industry, its advances and achievements. It highlights Canadian innovation and leadership in sustainable mining and resource development and environmental stewardship.

This year the Museum celebrates “110 years of Discoveries” with engaging exhibits and events. 2014 marks a notable anniversary for a mine that produced more than 50 million tons of ore during its operation from 1904 to 1974.


Please direct any questions about this survey to:

Mark Platt, CA PwC | [email protected] 604 806 7093

or

Marianne Carroll, CA PwC | [email protected] 604 806 7237

For additional copies of this publication, please contact:

Diane Erdstein PwC | [email protected] 604 806 7890

Key contributors to the survey:

Mark PlattMarianne CarrollDiane Erdstein Jim Nelson David Chinn Patrick Gunn Jordan BaimelGrant BondCharmaine NeilssonBrenda BouwShawna HansenGarry Eng

This is a condensed version of results of the 2013 survey.

Complete survey results, including appendices, are available on the PwC website at www.pwc.com/ca/bcminingsurveyand on the MABC website at www.mining.bc.ca

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© 2014 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved. PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. 4019-02 0514 .

www.pwc.com/ca/mining

Documents

Digging deep: The mining industry in British Columbia 2013