BE.Americas

ACHIEVING BUSINESS EXCELLENCE ONLINE

AMERICAS EDITION Issue No.52

INCLUDING

hydro-quĂŠbec: goldcorp cerro negro: trinity:

coastal gold:

grade is king How Coastal Gold is rapidly developing towards becoming a very significant gold producer

WHERE THE WORLD’S MINERAL INDUSTRY MEETS

ONLY GOING TO ONE MINING INVESTMENT SHOW THIS YEAR? MAKE IT PDAC. March 2 – 5, 2014 International Convention, Trade Show & Investors Exchange Metro Toronto Convention Centre Toronto, Canada convention.pdac.ca/pdac/conv/

Prospectors & Developers Association of Canada

business excellence

Business John O’Hanlon Editor johanlon@bus-ex.com Will Daynes Editor wdaynes@bus-ex.com Matt Johnson Art Director mjohnson@bus-ex.com Louise Culling Production Designer lculling@bus-ex.com Richard Turner Director of Sales rturner@bus-ex.com Vince Kielty Director of Editorial Research vkielty@bus-ex.com

Business Excellence brings you content from leading business influencers and strategic thinkers providing inspiration and guidance to help you and your business grow.

We showcase some of the best examples of successful organisations from around the world giving you a unique insight into how they operate.

Sharon Rooke Administration & Operations srooke@bus-ex.com Matt Day Head of Technology mday@bus-ex.com Andy Turner Chief Executive aturner@bus-ex.com

Contributors George F. Brown, Jr. Consultant & Author David Sawyer President of Safer Places, Inc.

HINT: For the best experience, click the fullscreen icon

Leon Prieto Assistant Professor of Management Simone Phipps Assistant Professor of Management Michelle Drolet Founder of Towerwall

Subscriptions & Enquires info@bus-ex.com

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The content of this magazine is copyright of Infinity Business Media Ltd. Redistribution or reproduction of any content is prohibited. Š Copyright 2013 Infinity Business Media Ltd.

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features

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14

10 mining

Growth in a time of scarcity The mining industry faces its most challenging set of problems for a decade: participating companies need to be a lot smarter and ready to take advice from the specialists, emphasizes a new guide from KPMG.

14 interview

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The M&A environment in Mining

Rama Ayman, has been enjoying his new role as Partner and Global Head of KPMG’s Metals & Mining Corporate Finance practice.

20 operations

What’s the First Thing that Comes to Your Mind?

Making the commitment to services a meaningful part of the company’s culture through measurement, review, and rewards.

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26 people

Creativity, Innovation and Survival

Organizations may be missing an opportunity to leverage HR Best Practices to build a culture of creativity and refine innovative ideas among individuals and groups.

30 technology

How to expose cyber-attacks and combat threats

The simplest threats still fool off-guard employees, and can go undetected for long periods of time.

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34 operations

Discover what is or isn’t hiding inside the closet

Why opting for comprehensive pre-employment screenings is a worthwhile investment.

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business showcases

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Mining & Minerals: 40 Coastal Gold Grade is king

The coast in question is that of Newfoundland, where Coastal Gold’s Hope Brook property is in rapid development towards becoming a very significant producer.

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50 Ontario Mining Association

A province of possibilities

The mining sector has always existed as a pillar at the centre of Ontario’s growth. Thanks to the efforts of the Ontario Mining Association (OMA) its role in defining the province’s future will only continue to gain importance.

58 bdo

Innovative thinking and insight

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With more than 100 offices from Vancouver to St. John’s, BDO is one of the leading accounting and advisory firms in Canada, and an invaluable service provider to the countless mining companies that call the country home.

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66 Potash Ridge Growing green

Potash Ridge’s Blawn Mountain deposit in Utah has got everything going for it, pulled forward by the market and pushed forward by an enthusiastic team in a supportive jurisdiction.

76 Finning South America

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Equipment and services which drive the economy

The most important partner in the distribution of Caterpillar equipment and services worldwide, with it’s focus on delivering an excellent service.

84 Goldcorp: Cerro Negro Cerro Negro ready to yield

Goldcorp is the fastest-growing, lowest-cost senior gold producer. Its Cerro Negro gold and silver mine in Argentina is on the cusp of producing its first gold.

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business showcases

100 Levon Resources

Rich in resources and resolve

In the last twelve months Levon Resources has worked hard to consolidate and progress its assets, gaining 100 percent ownership of the Cordero Project, one of the largest silver resources on the planet.

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108 codelco Chuquicamata Mine Bigger is better

The world’s largest open-pit mine has been known since prehispanic times. Today a massive underground expansion project is taking the asset into a new era of future prosperity.

122 SRK Consulting – SVS Ingenieros Prospering in Peru

Since merging with SRK Consulting in 2011, SVS Ingenieros has consolidated its Peruvian market share and diversified its range of technical services.

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128 Mariana Resources

Leading South American exploration

Mariana Resources’ highly experienced team is allowing it to transform its developing discoveries into robust projects.

oil & gas: 130 Trinity Exploration & Production

More than meets the eye

As CEO, Joel “Monty” Pemberton explains, Trinity Exploration and Production’s business has never been just about recovering oil and gas.

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contents

148

148 COTEEL

Hard work, faith and favour

Trinidad and Tobago has a well developed oil and gas industry which has enabled the emergence of COTEEL.

158 SOS Safety International Going beyond safety

For more than 20 years SOS Safety International has been committed to providing quality products and service to its ever-growing list of clients.

energy & utilities: 164 Hydro-Québec

164

Energy for the future

The largest energy supplier in the Province of Québec: it harnesses Canada’s fast-flowing rivers to satisfy the demands of both domestic and export markets in North America.

176 SPX – Marley Mexicana Mexico’s tower of strength

By combining over a century of experience with cutting-edge, environmentally friendly technology, Marley Mexicana has solidified itself as one of jewels in SPX Group’s crown.

manufacturing: 184 University of Kentucky – Lean Systems Program 2013 Lean Users Conference: Leaning in the right direction

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Glenn Uminger discusses the recent 2013 Lean Users Conference, shares some of its success stories and reveals his early hopes for next year’s event.

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Growth in a tim

The mining industry faces its most cha participating companies need to be a from the specialists, emphasi Words by

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John O’Hanlon

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Mining

me of scarcity

allenging set of problems for a decade: lot smarter and ready to take advice izes a new guide from KPMG

Research by

Richard Halfhide BE Americas

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f the title is a nod to Gabriel García Márquez examination of how love can adapt in a time of ‘cholera’ KPMG International’s July 2013 guide, subtitled Managing transactions in the mining sector if less literary, seeks to focus on some of the strategies companies could adopt in managing their relations with the global trading realities, the investor community and the stock market.

A combination of demand from the east, dwindling mineral resources and rising costs is reshaping the mining sector. As mining companies attempt to manage their asset life cycle in this new landscape, their three main strategic priorities are growth, performance and compliance. “Whether organically or (increasingly) through mergers and acquisitions, growth is a perennial objective in an industry where assets continually erode, however, in the current context of falling commodity prices and rising costs together with scarcity of available cash for acquisitions, mining companies are forced to consider portfolio management and cost optimization as their top priorities over their traditional growth objectives,” says KPMG’s Global Head of Metals and Mining Corporate Finance.

Few would disagree. The guide addresses issues frequently faced by readers of this magazine: geographic expansion, M& A and financing (written by Rama Ayman, KPMG’s

“Growth is a perennial objective in an industry where assets continually erode” 12 |

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Mining

“As mining companies seek targets in unfamiliar parts of the world, they will need strong local knowledge to form relationships and cope with foreign regulations and cultures” Global Head of Mining and Metals Corporate Finance, who expands his analysis in an exclusive interview for this issue) tax structuring, the key role of due diligence, and one frequently neglected area, the need for companies involved in M&A activities to manage integration – and indeed separation – issues in a planned and proactive way instead of tackling them post-event.

Authored by a picked group of KPMG’s country and sector leaders it demonstrates the global reach and depth of experience that the global professional service group can command. Underlying the practical advice it contains is the message that things are definitely not getting simpler in the way the world’s commodities markets work and interact.

It is getting increasingly difficult for the majors, with all their financial and IP clout, to navigate the international cross currents and local shoals they encounter: how much more perplexing is it, then, for junior companies to find their way?

The conclusion? They need someone with local knowledge, global reach, and real depth of understanding to support them in assessing financial risk and help them avoid expensive – and potentially fatal – mistakes. “As mining companies seek targets in unfamiliar parts of the world, they will need strong

local knowledge to form relationships and cope with foreign regulations and cultures,” KPMG warns. “A flexible financing package can help hedge against a volatile commodities market to achieve positive margins and improve shareholder value.”

Shareholders are increasingly asking mining companies to pursue a disciplined portfolio approach in line with their core competencies whether in exploration, mine development, or managing mature cash flow generating assets to enhance value for investors.

KPMG member firms often act as a long-term advisor to mining companies to help them optimize their acquisition and divestiture programs in order to leverage the client’s core competencies.

This guide is the first in a series that discusses how mining companies can best navigate the asset life cycle, and covers the five key elements of the transaction phase: geographic expansion, financing and mergers and acquisitions, tax structuring, due diligence and integration.

Full report To download the full report, Growth in a time of scarcity: Managing transactions in the mining sector.

Click here

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Interview

The environment in Mining Since his appointment as Partner and Global Head of KPMG’s Metals & Mining Corporate Finance practice Rama Ayman, a vastly experienced investment banker and M&A specialist has been enjoying his new role Words by John O’Hanlon Research by Richard Halfhide

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ver the past four years, KPMG firms have successfully emerged as a leading force in mid cap M&A, having built up a significant network of local M&A teams and investment banking professionals, hired from major investment banks around the world. Says Rama Ayman: “I joined KPMG because it has an extensive presence in metals and mining globally across many functional areas, with a strong commitment to build out its M&A advisory capabilities in this sector.”

Rama Ayman is the author of the section entitled M&A and financing: replenishing a diminishing asset base in KPMG’s recently published guide Growth in a time of scarcity, the first in a series that will discuss how mining companies can best navigate the asset life cycle. Over the last 20 years the common thread uniting his work has been mergers and acquisitions in the mining and metals sector, and he shared with us some of his personal insights into the market.

No reader of this article will be in much doubt as to the current state of affairs.

“Commodity prices have come down over the past few months – I can’t think of an exception. For a while gold bucked the trend but even that followed the others this year. Costs on the other hand have continued to rise. I am not just talking

“The squeeze in margins has made the credit markets nervous about the mining sector in general” 16 |

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about labor, energy and equipment costs: compliance to ever more stringent regulations on environmental and social performance and the rise of resource nationalism have not helped. The sector has faced soaring cash costs leading to significantly reduced cashflows and weakened balance sheets. Over the last year, five trends have emerged – trends I can see continuing in 2014.”

The first of these is that the junior mining companies are no longer finding it so easy to get cash to develop their projects. “The squeeze in margins has made the credit markets nervous about the mining sector in general, so credit is not easily available, and that has resulted in a change in ratios the lenders will accept. They want more equity, more potential cash flow, so the ratio of debt to cash flow has come down and the ratio of equity to debt has gone up.” Companies have to show more cash flow generation than before and put in more equity than before, he says, and at the same time the IPO market for mining companies is pretty much closed as investors have become much more cautious about participating in mining sector offerings.

Interview

With very few exceptions, junior mining companies are finding it a challenge to fund their projects. Their stock price is on the floor, credit is not available and any share issue has to be heavily discounted. So what can they do? “The only realistic solution most of them have is the M&A market. Basically, bringing in a strategic investor to help them develop their project.”

This, he says, touches on the second trend that he has identified: namely that the ‘usual suspects’ are not in the game as much as they were previously.

The large mining groups like Rio Tinto, Barrick, BHP, Vale, Glencore and others are themselves struggling with reduced margins. “They themselves made a lot of acquisitions in the good times, frequently through leverage, and they are having to focus on margins, cost optimization and the like; and on the other hand, to de-leverage they are selling non-core and high cost assets. They have focused on portfolio management and the cost issues and they are not putting management time and resources into making acquisitions.

“The well-tried model whereby a

Five trends in minerals and mining 1. A squeeze on access to development finance 2. The majors are divesting 3. Asset undervaluation attracts new entrants 4. Offtakers are thinking long 5. Megaprojects are becoming collaborative

“I think the private equity investment groups and captive funds are forming an important group of buyers” company would obtain a license, and develop it before selling it on to a larger company and so on until it came to the attention of an owner with the resources to take it into production is now in question, I think. I do not see many big mining companies going out and buying junior miners’ assets at a time when the big guys are thinking hard about what could be put into that non-core asset basket and basically making it as large as possible so they can de-leverage even more.”

The third big trend is where we depart from the depressingly familiar. New players are watching this scenario. “They are thinking this could be a good time to buy assets that are so much cheaper than they were before. So there has been a rise in the number of new entrants.

These are captive investment funds and private equity funds focused on mining - and the number of those is increasing.

On the other hand some of the more traditional large private equity funds are thinking opportunistically this might be a good time to come back to the metals and mining space and start making acquisitions. So I think the private equity investment groups and captive funds are forming an important group of buyers.”

Fourthly, the offtakers are changing their spots, observes Ayman. “The large trading companies from Japan, Korea,

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China, and Switzerland have developed a strategy over the last few years of going long on assets. Originally they were just traders and gradually they realized that the added value of just trading was diminishing. That trend is still continuing and I see them continuing to buy shareholding in the assets in order to get attractive long term offtake agreements.”

Finally, the very large projects – the kind that are vital to regional GDP – are being approached more cautiously.

“Because of the environment we find ourselves in there are a number of very attractive mega projects with capex well above US$1 billion. Previously a big mining company would do it by itself but now the costs are getting too high, the risks more significant. I think that going forward more of them are going to look for joint venture partners and other strategic partners or financial backers to develop the mine.” He expects to see the model that has worked well in the O&G sector becoming more common in mining.

All of these trends are driven by the tightening margins thanks to reduced commodity price and higher costs.

However Rama Ayman identifies another

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“The large trading companies have developed a strategy over the last few years of going long on assets” factor which has its own impact on M&A plans. That is the evident rise in many jurisdictions of resource nationalism.

“Many mining companies in several countries are witnessing backlash from governments and communities who want a greater share of perceived profits. Their demands are becoming louder around four things. One is insisting of tighter environmental standards. Two is that they are requiring adequate CSR. In some cases a big mining project will form 20 or 30 percent of the country’s GDP or exports and they are demanding proportionate levels of social engagement.

“Of course these things come at a cost.

Additionally they are demanding a higher level of shareholding in the operation either for the government directly or for local parastatal or private enterprises.

And fourthly they are looking to secure more of the downstream value chain but insisting on local beneficiation.”

These demands come at a difficult time for mining companies who are suffering from much lower margins and cash flows. Rama Ayman sees that during the coming one or two years we will see a marked increase in transparency for companies to show exactly how their money is being spent, and how much of their profits are being shared in various ways with the local governments in the form of taxes, royalties, dividends, CSR

Interview

expenditures and other investments in local infrastructure.

Rama Ayman also believes that there would be a far greater need for multistakeholder approach to developing large mining projects – this will require far greater consultations between companies, governments, communities, employees and shareholders.

The short term may be dire, the medium term uncertain, but in the long term Rama Ayman remains bullish about the industry he has been engaged with for so many years. “I think what is happening now is actually good for the mining industry in the longer run! It is having to get more cost efficient and better set the stage around local partnerships and their various stakeholders. Subsequently, they will be more successful in the upcoming cyclical recovery.

The long term supply-demand balance continues to point towards a bullish scenario for most mining commodities.

The raw materials for steel, iron ore, coking coal, and manganese are closely linked to construction and construction is at last beginning to recover in the USA and other economies. Copper is linked to

“I think what is happening now is actually good for the mining industry in the longer run!” infrastructure. China for example wants to be 70 percent urban by 2040. Achieving that goal will require an increase supply of copper!” China, he points out, has a long way to go to reach parity with the west, and then there is India, which may be on slower burn but is showing an upward trend.

Never in one place for long, Rama Ayman is clearly revelling in the access to clients across the world as they grapple simultaneously with falling commodity prices, higher cash costs, lack of easy access to traditional sources of funding and rising resource nationalism. “Developing successful major mining projects in most countries on a timely basis and on budget while adequately addressing the conflicting requirements of their various stakeholders has become much more complex. I think that is where advisers with a local presence in these mining jurisdictions like KPMG can add a tremendous amount of value.”

Rama Ayman Following 12 years investment banking experience including Bankers Trust [later acquired by Deutsche Bank] in New York, Barents Group in Central Asia and BNP Paribas in London where he was Director of Corporate Finance, Rama Ayman joined Arcelor in 2002, becoming Corporate Vice President of M&A, and playing an active role in many acquisitions, divestitures, and JVs including the merger of Arcelor and Mittal in 2006 to create the world’s largest steel company.

Over the past six years, Rama has been Managing Director of Hatch Corporate Finance and Senior Advisor to The National Investor, where he led numerous metals and mining M&A advisory mandates across most regions of the world before joining KPMG as Partner and Global Head of Metals and Mining in October 2012.

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What first thi Come Your M

Making the commi meaningful part of th through measurement Words by

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George

Operations

t’s the ing that mes to Mind?

itment to services a he company’s culture t, review, and rewards

e F. Brown, Jr.

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n various occasions, virtually all of us have thought about the associations that are linked to our companies and our brands. We’ve observed situations in which positive associations have helped companies grow and prosper, creating equity in the process. We’ve also observed situations in which negative associations proved to be too great a hurdle for some companies to overcome. And we’ve all spent time thinking about the associations to which we aspire. That is something that we do as individuals as well as business leaders.

Recently, at a conference sponsored by the Institute for the Study of Business Markets, the program included a panel of three manufacturing company CEOs who shared their perspectives as to the most significant challenges facing firms like theirs in the coming years. One of the questions posed to the panel focused on their goals as to how customers thought about their companies. The answers were quite interesting. One of the CEOs said that he wanted his customers to see his firm as “helpful” and a source of “positive surprises”. A second hoped that customers saw his firm as the “#1 call when there was a problem”. And the third hoped his customers saw a “relentless aim to please”.

What makes those answers, all of which focused on the service relationship that

“The goal as a company is to have customer service that is not just the best but legendary” 22 |

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the firm has with its customers, even more remarkable is that all three of the firms have strong records of innovation, emphasize investments in new product development, and offer products that are used in highly demanding settings. Roberto Clemente, the great right fielder for the Pittsburgh Pirates, once said “I want to be remembered as a ballplayer who gave all I had to give.”

These CEOs said they want their firms to be remembered for their commitment to and excellence in customer service – they wanted their firms to give all they had to give in terms of service.

In many ways, it’s not surprising to hear executives tout the importance of services. Sam Walton said that “The goal as a company is to have customer service that is not just the best but legendary.”

Jeff Bezos similarly said that “It’s our job every day to make every important aspect of the customer experience a little bit better.” But for manufacturing companies like those represented on the panel mentioned above, building strong service competencies is a major challenge, one that requires active leadership involvement. Services are different from manufacturing, along multiple dimensions, and delivering legendary services is a rarely-reached accomplishment, regardless of the industry in which you operate.

Certainly compared to the everyday service demands on companies like WalMart and Amazon, many of the service demands on manufacturing companies are unpredictable and often unprecedented, with requests arising at unexpected times and usually involving a high degree of urgency. To respond to such requests

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often requires the manufacturing firm to draw upon company resources that probably have a “full-time day job” that isn’t centered on customer support.

Many service requests are ill-structured, with customers often unable to define their needs clearly, sometimes only able to communicate that they have a problem requiring attention. Responses to such requests frequently require 24x7 resources and processes. And the problems that spark such requests are frequently unbounded, with many service requests having little (and sometimes nothing) to do with the products made by the company.

Meeting these service-related challenges requires active leadership involvement, particularly in the manufacturing environment where the focus on services is a relatively new phenomenon. It was not too long ago when as many manufacturing executives viewed services as “the hole in the income statement out of which profits drain” as there were executives who saw services as a key basis of differentiation and competitive advantage.

The perspective on services has changed, but there is still a long way to go in terms of realizing the potential that exists for value creation and capture. There are several key steps that executives can take to help their firm ensure that services are among the positive associations in the minds of their customers.

The first challenge that a firm’s leaders must address often involves selling the importance of services throughout the organization. My research into the challenges of changing a firm’s business model, as reported in an article in

“Meeting these service-related challenges requires active leadership involvement” the September 2011 issue of Business Excellence, concluded that the two most frequent causes of failed attempts to introduce a new business model are “Internal resistance to the new business model” and “Implementation process was poorly managed”. Both of these situations can derail efforts to incorporate services into a firm’s offering.

Making services an important part of your firm’s offer typically implies a major change to most manufacturers’ business model, with its typical emphasis on the processes that are associated with the firm’s products. The concept that customers must think of services as a top-of-mind association with the firm has to be sold, over and over again, and the selling has to be lead from the top of the organization. Not everyone in the organization will see services as a good idea, and others will implicitly offer resistance through some combination of ignorance, errors, lack of skills, and conflicts between service delivery and their other goals and priorities.

Avoiding failures associated with a poorly managed implementation process starts with a commitment to avoid the “ridiculous resourcing decisions” that have been reported in far too many organizations. More than in any other business function, I’ve seen underresourcing of service delivery by such a

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substantial margin that failure should have been easily predicted.

If service delivery is to become one of the positive associations linked to your firm, you must give the service delivery team a chance to succeed by providing the right level of resources and the right competencies. This is especially true when existing business units that are being asked to add services to their roster of responsibilities. Most likely, those units are already stretched by their current responsibilities, and equally likely, the people in them don’t come from a background of service delivery. The challenge is not only ensuring that there are enough resources, but also that the right resources are in place.

Most manufacturing companies have strong quality programs, and know that “if it isn’t measured, it doesn’t matter”. Yet far too often, these same firms fail to establish clear performance metrics for services.

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“The challenge is not only ensuring that there are enough resources, but also that the right resources are in place” Successful service delivery requires the same thoughtful decisions as to standards as are given other business functions.

Achieving success requires setting goals, measuring results carefully and frequently, and giving leadership attention to the attainment of those goals. Meeting the service goals must be seen as being of consequence throughout the organization.

That not only means reviewing results against goals and taking actions to correct shortfalls, but it also requires that achieving goals makes a difference to the firm’s employees in terms of incentives, promotions, and business reviews.

I recently worked with a manufacturing client that was part of a relatively compact industry, including a few major players along with a few niche specialists. Most customers were extremely loyal to one of the major competitors, with only about one-fourth of the customers regularly considering more than one brand when making a purchase. The rest were regular, repeat customers, buying the products of their preferred manufacturer. As part of the work with this client, interviews were conducted with a substantial number of the customers in this market, including ones that preferred a specific manufacturer and ones that were in the “willing to switch” category.

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What was remarkable about what had created loyalty in the first group and what drove choices in the second group was that the messages from the market in both cases were centered on services.

When “product” came up, the typical message was that all of the major firms in the industry were “pretty comparable” and “had good products and a good product line”. When “price” came up, the common message was that “the industry was competitive, and you could count on getting a fair, competitive price”. But when “services” were discussed, the comments of the interviewees often became passionate.

Customer after customer underscored the importance that they gave to the services that surrounded the products that they were buying. Excellence in service delivery was for many customers the basis for their loyalty to a supplier, and, in other cases, it was the factor that separated the winner from the losers in competitive situations.

Services can become an important means by which manufacturing firms create value for customers and capture it for their shareholders. As the CEO comments that I summarized at the start of this article suggested, they are frequently so important to the customer that they create long-lasting memories that shape, for better or worse, the

“Customers underscored the importance that they gave to the services of the products they were buying” customer’s impression of the company and their willingness to do business with it.

Aspiring to have “great services” become the first thing that comes to customers’ minds is a quite worthy goal.

But knowing of the importance of services is only the first step in the process.

Service success stories don’t come easily, and usually only emerge in firms where there is active leadership attention to the task of creating a strong service culture within the firm. That reason alone, in addition to the significant difference between service delivery and traditional manufacturing-related activities, calls for active leadership involvement to communicate the importance of services throughout the firm, to resource and implement programs that have a realistic chance of succeeding, and to making the commitment to services a meaningful part of the company’s culture through measurement, review, and rewards.

About the author George F. Brown, Jr. consults with industrial firms on growth strategy. He is the coauthor of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs (Greenleaf Book Group Press of Austin, TX) and the cofounder of Blue Canyon Partners, Inc. George has published frequently on topics relating to strategy in business markets, including articles in Industry Week, Industrial Distribution, Chief Executive, Business Excellence, Employment Relations Today, iP Frontline, Industrial Engineer, Industry Today, and many others.

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Creativity, Innovation & Survival

Organizations may be missing an opportunity to leverage HR Best Practices to build a culture of creativity and refine innovative ideas among individuals and groups Words by

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Leon Prieto & Simone Phipps

People

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reativity and innovation, although similar and often used interchangeably, have a subtle, yet significant distinction.

Creativity is related to the development of ideas that are both novel and useful, while innovation is related to the application of those novel and useful ideas, thus making them a reality. Both are crucial for a successful organization.

Dr Warren Bennis, a leading management scholar, once said that the organizations of the future will increasingly depend on the creativity of their members to survive. Dr Michael Porter, professor, author, and a prominent expert regarding competitiveness and organizational strategy, affirmed that innovation is the central issue in economic prosperity. In this era of modernization, technological

advancements, and changing markets, the increased use of creativity and innovation is a necessity.

People are the building blocks of organizations, and thus, the success of organizations depends on the ability of individuals and groups to perform their tasks effectively, to conceive and refine creative ideas, and to implement innovative solutions to maximize organizational competitiveness. Therefore, it is important to determine the Human Resource (HR) best practices that promote creativity in individuals and groups, and to find ways to foster their creative vision, so that the organizations for which they work can reap the benefits of their originality and resourcefulness. Here are some of the ways HR can play a role in promoting creativity in the workplace: Hire creative people HR should consider utilizing selection tools that assess a person’s creativity and ability to innovate. It is necessary to hire the best creative minds for various positions within the organization whether it is for Marketing, Research and Development, and Manufacturing.

Creative individuals are an asset to any organization as it positively affects organizational performance.

Employees’ creativity often provides a starting point for successful organizational innovation.

Establish rewards for creativity Employees may experience a heightened level of excitement about creativity and innovation if HR implements policies that will create a sense of friendly

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People

“The success of organizations depends on the ability of individuals and groups to perform their tasks effectively, to conceive and refine creative ideas, and to implement innovative solutions to maximize organizational competitiveness” competition among employees and offers attractive rewards to those who innovate and create new, valuable products and services for their organization. HR needs to be progressive in offering attractive bonuses and other forms of compensation and rewards to those employees who come up with ideas for new revenue models, marketing strategies and product offerings.

Offer training Many may argue that you cannot train people to be creative. However, studies show that creativity can be learned, and some creativity training programs have proven to be successful. In fact, Georgia State University offers a Certified Professional Innovator program that is designed to help executives build their organization’s internal capacity for generating novel ideas and accelerating profitable growth. Other leading institutions such as UCLA and the University of Miami also offer creativity programs geared towards executives.

If the executive education programs are too costly, HR departments should consider creating their own tailor-made programs geared towards increasing their employees’ creative self-efficacy.

The employees should also be given an

opportunity to transfer what they learned in training, through liberty to innovate in the workplace.

Give employees a greater sense of freedom Companies such as Google and 3M give their employees time (20 percent and 15 percent respectively) to innovate.

These types of initiatives remove organizational barriers and constraints that tend to accompany traditional work. Considering that deviation from the status quo does not always lead to favorable results, it is also important to allow employees who create and innovate to fail without repercussion. In addition, HR should ensure that performance evaluations award extra points to employees who pursue ambitious, creative projects, irrespective of successful or unsuccessful implementation.

About the authors •L eon C. Prieto, MBA, PhD, SPHR Assistant Professor of Management at Clayton State University • Simone

T. A. Phipps, MBA, PhD, PHR Assistant Professor of Management at Middle Georgia State College

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Technology

How to expose cyber-attacks & combat threats The simplest threats still fool off-guard employees, and can go undetected for long periods, all the time draining company data: the only defense is constant vigilance Words by

Michelle Drolet

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ybercriminals are employing more sophisticated techniques all the time and far too many companies and organizations still don’t have the protection they really need to safeguard their systems.

The prevalence of targeted attacks and advanced persistent threats (APTs) is disturbing.

The risk is that security is breached, typically through manipulation of employees using a technique such as spear phishing, and existing security systems are unable to detect the attack. Data can be harvested for many months, or even years, before the breach is discovered.

According to a white paper from the Enterprise Strategy Group, 59% of enterprise security professionals believe their organization has been the target of an APT, and 40% of large organizations have invested in various new security technologies as a direct result of APTs. How do they get in?

Penetration may be achieved stealthily, typically with a targeted attack on an employee. The cybercriminal will gather data online, with social network accounts proving to be a particularly rich source. According to Trend Micro research spear phishing is the preferred

method, accounting for a staggering 91% of targeted attacks. The employee targeted will receive an email that appears to come from an organization like LinkedIn, and if they trust the content, they’ll follow the link within to a fake website where they may be tricked into allowing a cybercriminal to gain remote access to their computer.

Once the attacker has access to one employee’s computer they can use it to gain remote access to devices belonging to other employees in the organization.

The threat has spread dramatically and traditional security tools will be none the wiser. Provided the attacker is careful to keep the data theft slow and steady, with frequent small file transfers rather than a big data dump, there’s little chance that it will be picked up by existing security systems.

How do you catch them?

The idea is to analyze downloads and network payloads in order to expose potentially malicious communications.

It’s about detecting malware or human intrusions into your system by paying close attention to the addresses of any communication. Does the external location for a file transfer make sense?

Does the address have a bad reputation?

Are the SSL certificates legitimate?

“The risk is that security is breached, typically through manipulation of employees using a technique such as spear phishing, and existing security systems are unable to detect the attack” 32 |

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Technology

“Targeted attacks are still on the rise. As governments and large organizations begin to take action and get a handle on the threat, there’s a real risk that many cybercriminals will look for easier prey” It’s important to expose suspicious internal communications as well. Is there any reason that a specific employee’s computer should be the source of a remote desktop session on another employee’s device? A proper analysis will flag suspicious behavior and allow the IT department to assess the threat and take action to close it down.

Keep your guard up The nature of this threat dictates the need for constant vigilance to keep the cybercriminals out. Shut down one route and they will continue to explore other avenues of access, the more obscure the better. There are many potential penetration points to consider. Activity must be analyzed across the entire organization and you need real-time information on potential attacks and known malicious sources.

How about blocking suspicious URLs and web-based content to stop penetration from the outset? Do you have application firewalls or database security? It’s also wise to ensure that you have data encryption technology in place; far too many companies focus on a Maginot line defense, pouring resources into defending against external attacks and forgetting that if attackers do gain access they can circumvent this security

from within. Is your user authentication stringent enough?

How do you know you’ve caught them?

One of the most worrying aspects of APTs is that advanced attacks typically go unnoticed for over a year. You may be locking the stable door after the horse has bolted. That’s why an analysis of internal traffic is so vital. Suspicious behavior must be followed up and investigated.

In the longer term you want to reach beyond identifying and blocking attacks to unmask the criminals responsible so that you can share intelligence to nullify their threat.

Targeted attacks are still on the rise.

As governments and large organizations begin to take action and get a handle on the threat, there’s a real risk that many cybercriminals will look for easier prey. Don’t allow your company to be an easy target.

About the author Michelle Drolet is founder of Towerwall, a data security services provider in Framingham, MA with clients such as PerkinElmer, Smith & Wesson, Middlesex Savings Bank, Brown University and SMBs. You may reach her at: michelled@towerwall.com

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Discover what i inside th

Why opting for compreh screenings is a wort Words by

34 |

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David C

Operations

s or isn’t hiding he closet

hensive pre-employment thwhile investment

C. Sawyer, CPP

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I

n today’s world, where immediate access to information is literally at our fingertips, the need for speed can sometimes supersede due diligence, but in the absence of thorough background checks on potential employees, haste can result in waste – and sometimes worse.

Background screening is not a “one size fits all” situation; therefore it is imperative that employers consider the specific risks associated with each position when determining the searches and testing conducted in a pre-employment evaluation. Rule of thumb is the greater the risk involved in a particular position, the more comprehensive the background check.

Healthcare workers, for example, often have unsupervised contact with people in their vulnerable states; as such the risks associated with a “bad hire” could literally be a matter of life and death. And while drug tests have become standard for many posts – regardless of the industry – a typical 9 panel drug test may not be adequate for healthcare employees with access to a large variety of potentially addictive medications.

The financial industry is another where the more background screening done, the better. For someone whose past might involve “creative”

accounting, a position that provides access to revenue may prove to be a temptation hard to resist.

There is no such thing as being too careful when it comes to background screening and as such, at the top of the allowed list of screening sources for most employers is a search for criminal records. That said, there are a myriad of ways to search for criminal records and it is incumbent on an employer to be educated on these screening sources, regardless of whether or not they retain a firm to conduct background searches.

Significant differences exist between a national database search, a real-time county level search and a state repository investigation. Each has its advantages and disadvantages as well as considerable cost differences.

Private databases – even those that claim to be national in scope – have their limitations; in addition the prospective employer is responsible for verifying the information at the original source, which is typically the court.

The optimum place to search for a criminal record is the courthouse where the record originated. A county or federal district court search yields the most accurate and up-to-date criminal record information available and should always be used to verify results from quicker,

“Background screening is not a “one size fits all” situation; therefore it is imperative that employers consider the specific risks associated with each position when determining the searches and testing conducted in a pre-employment evaluation” 36 |

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Operations

“Having the correct identification information is vital to conducting a criminal search. People hiding a past they know might prevent them from acquiring employment can be adept at keeping a secret” but often less reliable database searches.

Hav ing the correct identification information is vital to conducting a criminal search. People hiding a past they know might prevent them from acquiring employment can be adept at keeping a secret. In fact, reporting a false date of birth may be enough to elicit a “no record found” on a report, despite the existence of a serious criminal conviction. The potential for harm is palpable if an employee becomes involved in a workplace act of violence, theft or other criminal offense because the employer didn’t have knowledge of past similar incidences.

Without question, the Internet has made the screening process inexpensive, but relying on this method could end in a costly catastrophe. Without knowing what to look for and where to find it, information can be confusing and misleading.

Obtaining a consumer report has become commonplace when conducting a background check on a prospective employee, but be advised that under the Fair Credit Reporting Act (FCRA),

employers must have the written consent of the potential employee before seeking the report.

If a decision is made against hiring the individual based on consumer report i n for mat ion, t he would-be employer is obligated to provide the applicant with a copy of the report and inform him/her of their right to challenge the document. Please note that some states incorporate more rigid rules limiting the use of consumer reports than does the federal FCRA. Legally obtaining accurate, up-todate information is only half the battle.

When a consumer report contains data about an arrest or criminal conviction you must keep in mind Equal Employment Opportunity Commission (EEOC) guidelines when making a hiring decision. A policy that states, in essence, that an arrest or conviction is an automatic disqualifier can quickly lead to trouble with the EEOC. Policies regarding hiring (or not) those with a criminal conviction must be relevant to the position and consistent with business necessity. Thus, a recent conviction for

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Operations

“The importance of conducting comprehensive background screening cannot be overstated. Equally important is the need to fully understand how to legally apply the information contained in a background check report in the hiring decision process” DUI will likely be relevant to a pizza delivery position while perhaps not so with a cashier or receptionist job.

The EEOC updated their longstanding guidance in 2012, strongly suggesting employers take it a step further before making that final hiring decision.

Individualized Assessments are designed to allow each applicant an opportunity to explain extenuating circumstances, underscore rehabilitation efforts or point out similar employment held, post-conviction, with no undesirable consequences. It’s arguably in society’s best interest when ex-offenders are gainfully employed. That doesn’t mean a convicted thief should be hired to work as a bank teller as soon as they are released from prison. The EEOC wants to make sure that a convicted thief can find an appropriate means to earn an honest living and not be automatically branded as unemployable for life. Individualized Assessments are one means suggested by EEOC to make sure your policies are applied evenly and consistently while allowing room for hiring otherwise qualified applicants who have made mistakes in the past.

Employers can find help from various sources to stay out of the crosshairs of the Consumer Financial Protection

Bureau or the Federal Trade Commission (primary enforcers of the FCRA) as well as the EEOC. Check with a labor law attorney to make sure your policies and procedures are compliant and legally defensible. Your background check company should also be able to offer advice about legally obtaining and interpreting the information you need to make sound hiring decisions.

The importance of conducting comprehensive background screening cannot be overstated. Equally important is the need to fully understand how to legally apply the information contained in a background check report in the hiring decision process. Take the time to become familiar with the fundamentals of these vital searches, particularly if the position to be filled is one of trust and high responsibility. It is an investment in time and resources that will prove to be worthwhile.

About the author David C. Sawyer is president of Safer Places, Inc., a full-service firm based in Middleboro, Mass., that specializes in pre-employment screening, security consulting, and tenant screening. www.saferplacesinc.com

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40 | BE Americas

Coastal Gold

Grade is king Coastal Gold’s Hope Brook property located in Newfoundland is rapidly developing towards becoming a very significant producer

written by: John O’Hanlon research by: Marcus Lewis

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Mine site looking north

coastal gold

T

he market has a lot to answer for, and so do investors in search of a quick buck. Where gold mining is concerned, it is a wellknown fact that as the price on the international metal exchanges fluctuates the viability of higher cost mines comes into question. There are properties all over the world that have been put into mothballs either because all the high grade material has been taken or because they can’t any longer sustain a decent margin.

In many cases this is not the whole story, however. The President and CEO of Coastal Gold Dr Bill Pearson is a geologist with a stellar track record in exploration, specialising in resurrecting mines that had been thought expired. He explains his apparent instinct for divination as merely a result of 40 years of learning and applying geological principles but what is not in question is that he has done it before. “Over the years I have developed a speciality in taking old and unloved mines and reassessing them giving them a new look and getting them back into production.�

As VP for Exploration at Desert Sun Pearson directed exploration programs that increased the overall resource base at the Jacobina mine in Brazil by 1.4 million ounces of gold and discovered a major new extension to the Canavieras deposit that is now being developed by Yamana - with a projected mine life of 30 years. And for Central Sun he and Peter Tagliamonte discovered new zones at the Santa Pancha mine and at Orosi (now Libertad) in Nicaragua as well as significantly expanding mineral resources in the region of Limon and laying the foundations of what is

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now a $1.6 billion company. Team building from top to bottom is one of Bill Pearson’s strong points. This summer he welcomed a new chairman to the board of Coastal Gold – Justin Reed is that rare animal, a banker trained as a geologist.

When his company Castillian Resources first looked at the Hope Brook deposit, discovered in 1983 by BP-Selco, and mined from 1987 to 1997 with total production reported to be 752,153 ounces of gold plus a copper

concentrate, he felt immediate recognition.

Others thought the prospects were too low grade and had no potential because everything significant had been found, but they were wrong. It was a familiar picture, he explains: “It was the technical work that was lacking. It needed proper geological work and engineering work. Once it got into production the geological work took a back seat, and of course this deposit was producing during a very low gold price era.” Any exploration was

“The people here are a pleasure to work with: they love working on ‘The Rock’”

New camp infrastructure

44 | BE Americas

coastal gold

Mine site looking south

limited to the immediate area economic assessment (PEA) round the mine, but Pearson on Hope Brook. The work is has since shown that it is now progressing well with remarkably wide open.

Newfoundland contractor Castillian changed its New Valley Drilling, and the support of local communities name to Coastal Gold in which make up the bulk of June this year following the workforce. Even Dave a merger with Ridgemont Drilling campaign under way Iron Ore and reflecting the Copeland the Chief Geologist company’s confidence that is a Newfoundlander, though with global experience. it can now focus all the energies of its experienced team on Hope Work is progressing well on all fronts. As Brook, properties outside of Canada have well as drilling, further attention is being paid been disposed of. The merger and the $2.7 to the old tailings. Preliminary work carried million funding it released, paved the way to out last year showed recoverable gold at about achieving its immediate milestones, a 4,250 one gram per tonne – in tailings produced metre resource definition diamond drilling when the old plant was running at maximum programme and competing a preliminary efficiency. Metallurgical, geotechnical,

4,250 metres

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“We have weathered the storm over the last 18 months and are ready to take Hope Brook forward” environmental and engineering work under technical manager Allan Polk is progressing apace and the results of this work will form a key part of the PEA. In every way, Newfoundland is a great jurisdiction to work in, and he clearly appreciates the lack of political and regulatory issues compared with many gold mining countries. Power is a case in point. Before he spent $14,000 on a line to link the camp

46 | BE Americas

with the grid he was spending $5,000 a week on diesel; now the camp, and eventually the production plant, can enjoy reliable supply for a quarter of that cost. “We have an airstrip, a wharf, existing tailing ponds, a ramp to 350 metres below surface, and we can bring all we need in by boat,” he enthuses.

“Newfoundland’s main shipping port, Port aux Basques, is just a 70 kilometre sea journey to the west and the town of Burgeo is only 30

coastal gold

kilometres to the east.” However the greatest advantage Newfoundland offers is its skilled workforce. “The people here are a pleasure to work with: they love working on ‘The Rock’ having worked on forestry, fishing and mining all their lives. They fix things before they are broken!”

The results of the drilling programme will be out by the end of this year and the PEA completed early in 2014. Drilling is currently taking place in two areas known as the Footwall and South West Pit Extension. Next year attention will move to the longer term potential of the property, a large area to the west of the historical mine called the 240 Connector Target. “We won’t be able to drill it in the current program but if we can establish the bridge from the South West Extension into that

target the potential expansion is tremendous.”

This is more than just a gut feeling. With significant past production, he feels that there is a lot of misunderstood geology going on.

“The key thing is that if you want to find a big mineral deposit you need to get into a big system and that is what I always liked about this project – it is a very big system, also very under explored.”

An important discovery he has made is that some of the old drill holes on which people were assessing the area were simply in the wrong place, or had failed to go deep enough. Drilling and geophysics have identified a major fold structure that closes below surface in the Connector Zone, he says, which explains why shallow historical drilling failed to intersect the gold bearing

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Core analysis program

coastal gold rock. Understanding these fold structures, he adds, are the key to unlocking the potential of Hope Brook. And Hope Brook is far from being the whole story. “It is part of something much bigger. It is not rocket science to realise that if we have some success here we are looking at a very substantial pit here, all of it open down dip and along strike!”

He also believes that the historical grade analyses are seriously flawed. “I believe historical drilling seriously underestimated the grades because of problems of grinding but also because they were only looking for higher grade material.” In the circumstances prevailing in the 1990s mid-grade and lowgrade samples never even got analysed, so they show up as zero in the database. “We are busy filling in gaps in the old drilling, eliminating historical holes we don’t think fit the picture. I am very confident we will see a big increase in grade in the next resource assessment. Naturally we want to expand ounces but right now getting the grade up is our prime focus.”

Coastal gold is a company to watch. It has strong investor support and will attract those investors who believe the gold price will recover going forward. Bill Pearson at any rate is optimistic. “I think now we have weathered the storm over the last 18 months and are ready to take Hope Brook forward – just watch what happens over the next half year!”

For more information about Coastal Gold visit: www.coastalgold.ca

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A provi possib

The mining sector has alwa centre of Ontario’s growth.

Ontario Mining Association ( province’s future will only c

written by: research by: Pe

50 | BE Americas

Ontario Mining Association (OMA)

ince of bilities

ays existed as a pillar at the Thanks to the efforts of the (OMA) its role in defining the continue to gain importance

Will Daynes eter Rowlston

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Ontario Mining Association (OMA)

M

ining has been a fundamental province and is one of the longest serving part of Ontario’s economic trade organisations in Canada. While a great fabric for centuries and is now deal has changed in the 90 plus years since seen as an integral component its founding, the fundamental mission of the of its future. Ontario’s native OMA remains the same and that is to improve population is widely credited with being the the competitiveness of the industry while first to tap into the province’s mineral wealth, consistently promoting safety and sustainability. while major discoveries and mine development By maintaining its core commitment to in the 20th century helped to underpin these ideals the OMA has helped create a Ontario’s rise to the status of Canada’s mining jurisdiction revered for being one of most populous and wealthiest province, the safest in the world. Indeed, over past 30 and supported Canada’s development as an years the sector’s lost time injury frequency industrialised and globally has improved by 90 percent competitive nation. and it is now at a level of 0.5 Today, mining in Ontario is per 200,000 employee hours.

The OMA puts its success a multi-million dollar industry with a total of 38 mine sites in advocating for industry operating throughout the advancement down to province, which collectively its ability to harness the are bringing to the surface a collective strength its highly range of metals and minerals engaged members. It is proud Average revenue including nickel, gold, copper, to serve as a focal point for produced from mining in Ontario per year zinc, platinum, salt, calcium discussions on the issues and opportunities facing the carbonate, gypsum, talc, and mining community and to since 2008 diamonds.

A key contributor to Ontario’s economy as well offer its members a unified voice on matters as being an engine for regional development, of public policy and opinion. mining in the province produces revenues A goal of the association is to overcome the of around $10 billion per year on average. challenges that impede the competiveness Furthermore, given that 90 percent of the inputs of responsible operations and to foster an to production are Canadian and 75 percent of environment that bolsters mining’s potential to mineral output is exported to markets in the be the cornerstone of Ontario’s new, innovationUnited States, Europe and Asia, the industry also oriented green economy. With this goal in contributes immensely to improving Ontario’s mind, the OMA offers its members support international balance of trade. in a number of areas such as navigating the Established in 1920, the Ontario Mining provincial policy network, gaining valuable Association (OMA) is the body tasked with insights and building important relationships representing the mining industry of the by joining OMA committees and developing

$10

Billion

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“...we work as strategic partners with our clients...�

Irwin Lowy LLP is a Toronto, Ontario law firm focused on corporate and securities law, including public and private debt and equity financings, stock exchange listing matters, continuous disclosure and mergers and acquisitions.

IRWIN LOWY LLP 365 Bay Street, Suite 400 Toronto, Ontario M5H 2V1 (416) 361-2515 www.irwinlowy.com

inspired Your weekly digest of business news and views www.bus-ex.com

Ontario Mining Association (OMA)

Pure wire gold in granite and quartz

industry positions, strategies and initiatives programs, and of course, championing and helping to shape legislation, policies, the long-term viability of the industry. guidelines and best practices.

One of the things the OMA has always Further OMA support comes in the form been keen to highlight is the fact that the of coordinating industry initiatives and impact of mining goes far beyond mineral offering opportunities for extraction and processing, expert practitioners to with it being linked to many collaborate on innovative other industries and sectors solutions, networking with in the economy, including industry colleagues, nontransportation, construction, governmental organisations, equipment manufacturing, communities of interest, civil environmental management, servants and elected officials, geological services, education Invested in mineral furthering public awareness and research. It also provides exploration and and support of the mining a major boost to the region’s deposit appraisal in financial sector, what with the industry and delivering Ontario in 2011 Toronto Stock Exchange (TSX) innovative communications

$1

Billion

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being the leading global mining exchange, listing more of the world’s public mining companies and raising more mining equity capital than any other.

A recent study by the University of Toronto, commissioned by the OMA, highlighted the fact that the benefits from opening a single new mine include millions of dollars of tax revenue for government and the creation of a number of highly skilled, high paying jobs.

These benefits are shown to be worth $277.8 million per annum in direct, indirect and induced benefits; 2,280 employment-years of direct, indirect and induced opportunities; and $83.8 million in taxes to all levels of government each year.

Meanwhile, the construction and building phase of one mine has the potential to increase GDP by $130 million and to offer as many as 2,000 employment opportunities. Further

“The OMA puts its success in advocating for industry advancement down to its ability to harness the collective strength of its highly engaged members�

Mine with railroad track - underground mining

56 | BE Americas

Ontario Mining Association (OMA)

economic gains can also be made through the construction of infrastructure to support the opening, operation, closing and rehabilitation of said mine.

In 2009 the value of mineral production in Ontario was recorded as $6.3 billion. This increased to $7.7 billion in 2010 and again to $10.7 billion in 2011, before coming in at $9.2 billion in 2012, despite global economic uncertainty and weakened demand for commodities. The financial year of 2011 also saw $1 billion invested in mineral exploration

and deposit appraisal, the highest level ever achieved. With a multitude of opportunities yet to be explored across the province and an increase in activity expected with the demand for commodities slowly increasing, expect this record level to be broken again in the not-too-distant future.

For more information about Ontario Mining Association (OMA) visit: www.oma.on.ca

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Innova think and insi

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ative king ight

BDO

With more than 100 offices from Vancouver to St. John’s, BDO is one of the leading accounting and advisory firms in Canada, and an invaluable service provider to the countless mining companies that call the country home

written by: Will Daynes research by: Peter Rowlston

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BDO

I

t was almost 350 years ago that the seeds of Canada’s mining sector were sown with the discovery of coal on Cape Breton Island, Nova Scotia. Three and a half centuries on and there are more than 800 mines across the country providing direct employment for more than 363,000 workers.

Today Canada ranks first in the world for the production of potash and uranium, and among the top five for the production of nickel and diamonds, with its mining industry contributing approximately five percent of its gross domestic product.

Present in Canada for more than 90 years, BDO has been a witness to much of the mining sector’s development during that time period, in the process becoming one of the country’s leading accounting and advisory firms in its own right. A member firm of the international BDO network, which boasts over 1,000 offices in 135 countries, the company has worked with thousands of clients in exploration, production and service companies, developing its services to address key industry issues such audit and assurance, domestic and international taxation, risk management, business valuations, technology solutions and transaction services.

“Recent years have certainly seen the firm focusing on industry expertise when it comes to our service offering,” states National Energy and Natural Resources Leader, Michael Madsen. “Historically the bulk of our work has been audit or tax related, however much of our growth is now stemming from speciality service areas such as valuations, risk advisory, transaction services and IT solutions, which are tied directly to the mining sector.”

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Historical services they may be, but audit and tax related offerings remain an allimportant speciality of BDO. “From an audit perspective,” explains Energy and Natural Resource Partner, Tammy Thompson, “our clients understand the benefits that come from our extensive understanding of the industry here in Canada. This experience helps us in identifying key issues and helping businesses of all sizes, from juniors to larger producers, navigate through them.”

As Madsen goes on to highlight, the firm has worked hard in recent times to emphasise the need for clients to demand more from their audits in times of economic uncertainty than they may have done so in the past. “What these clients should be demanding today is a service that provides input and advice of how to control costs, how they can better access global markets and how to do business in these unfamiliar environments. I think that is where we have been able to deliver a cohesive strategy around

“Going forward BDO plans to stay in tune and evolve with Canada’s mining sector as well as the players operating within it”

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BDO

what we offer to companies situation where the country is playing host to somewhat of a in the middle market that they maybe haven’t been able waiting game where there are to access in a cost efficient those who possess assets but manner before now.” no capital, and others with Years that BDO has been Prior to the economic crisis, capital who are looking for present within Canada at a time when metal prices good, long-term prospects. reached record highs and “Despite the changes that have occurred in recent years, rapid growth was a priority of virtually every major mining player in the significance of Canadian involvement on the market, Canada’s mining industry was the world mining scene should by no means be experiencing the same flurry of activity as downplayed,” Madsen continues, “what with most of the other leading regions in the world the country remaining home to a rich resource were seeing at the time. This unfortunately based economy and two of the world’s strongest meant that the country was not immune to mining exchanges in the form of the TSX and the subsequent effects of the global downturn TSX Venture exchanges.” which resulted in metal prices softening, One of the major areas expected to be the investor confidence worsening and activity focus of future Canadian mining investment decreasing at pace. What this created was a will be the Northern Ontario Ring of Fire, the

90+

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National Energy and Natural Resources Leader, Michael Madsen

“One of the major areas expected to be the focus of future Canadian mining investment will be the Northern Ontario Ring of Fire” name given to the massive planned chromite mining and smelting project in the James Bay Lowlands which has been described as one of the most promising mineral development opportunities in Ontario in more than a century.

“Attempts have been made to develop this area for some time now,” Thompson says.

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“On-going efforts of the Ontario Ministry of Northern Development and Mining will continue to position Ontario for future success and to highlight the long-term importance of the Ring of Fire. Meanwhile, BDO already has offices based in the northern areas meaning we are well positioned to help in creating the jobs

BDO

Energy and Natural Resource Partner, Tammy Thompson

and infrastructure that the region will require.

This presence has also allowed us to forge excellent relationships with local communities which we expect to serve us well in the future.”

“While the Ring of Fire represents a massive area of untapped potential, with that comes a host of challenges,” says Business Development Manager, Carlos Lobo. “Fortunately these are challenges that can be overcome with the use of new technologies and Canada is very much at the forefront of innovation.”

Becoming one of Canada’s most important service providers has been neither a quick or simple journey therefore it goes without saying that, in order for the firm to retain its standing

with the country, going forward BDO plans to stay in tune and evolve with Canada’s mining sector as well as the players operating within it. “In order to achieve this,” Madsen concludes, “we see ourselves not only continuing to offer the types of service that got us to where we are today, but continuing to strengthen our delivery of non-audit type services as we expand our suite of speciality service offerings to all sizes of mining companies.”

For more information about BDO visit: www.bdo.ca

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potash ridge

Growing green

Potash Ridge’s Blawn Mountain deposit in Utah has got everything going for it, pulled forward by the market and pushed forward by an enthusiastic team in a supportive jurisdiction

written by: John O’Hanlon research by: Richard Halfhide

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potash ridge Ross Phillips, COO and Jeff Hillis, CFO at the Blawn Mountain Project

T

here’s a sense of purpose at Canadian junior Potash Ridge – and the tone is set by its President and CEO Guy Bentinck a Chartered Accountant who has devoted the 20 years he has spent in the mining sector to finding smart ways of securing finance. He is not a man whose head can be turned by specious arguments: every step in the development of a project has to be considered, and realistic contingency planning built in.

Still, it’s impossible to miss the excitement and real passion behind his proposals for the company’s Blawn Mountain potash deposit. At first glance the pace seems to have been a breakneck one since he joined the company two years ago, at a point where Potash Ridge had done no more than acquire the rights to the property, in which it has a 100 percent interest.

There’s a good explanation for this fast track development. In two years the project has come from virtually nothing to being a project with 40 years’ worth of reserves and a pre-feasibility study (PFS), completed November 7, that demonstrates its technical and economic viability. It has a lot to do with the fact that this is a well-understood resource, explains Bentinck: “This deposit was extensively evaluated in the 1970s, not for the potash but for alumina.” At the time, potash was of little interest compared to the alumina that the alunite ore also contains.

The equivalent of $100 million at today’s values was spent in proving the resource and getting it ‘shovel ready’, and a pilot plant based on well understood technology

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Potash Ridge has offices in Milford and Salt Lake City, UT and in Toronto, Ontario

ran satisfactorily for three years before the market for alumina collapsed, and with it the prospects for financing Blawn Mountain.

In April 2011, Potash Ridge gained ownership of all the historical data that had been amassed: “Boxes and boxes of drilling results, engineering reports, test work, permitting applications and the like fell into our lap and allowed us to develop the project very quickly,” he says. “And we expect to be able to continue to use the historical data from the remaining part of the resource,

which does not, however, form part of the basis for the PFS.” Development has been helped by other factors too. For one thing, all of the property is on land owned by the State of Utah. It is a lot harder to get a project permitted if it is on federal land and has to go through agencies like the Bureau of Land Management, the Corps of Engineers or the EPA, which are notoriously restrained where resource developments are concerned and very slow to take decisions. Utah, whose resources

“Drilling results, engineering reports, test work, permitting applications and the like fell into our lap and allowed us to develop the project very quickly” 70 | BE Americas

potash ridge

645,000 tons

Annual SOP production play a major part in the State economy, on the other hand takes a very ‘can do’ approach to mining.

It is not hard to see why the state would want to support Potash Ridge. The land that hosts the deposit is owned by the School and Institutional Trust Lands Administration (SITLA), whose land holdings are all designated for development in one form or another. “The basic business proposition is that the revenue derived is earmarked for education in Utah. We are going to be paying the School Fund around $30 million a year in royalties when we are up and running,” says Bentinck. Add to that more than a billion of capital investment in this remote part of the state, and the creation of around 500 full time jobs and the case for development is unassailable.

As long as it does not go the same way it went in 1980, that is. Well that is where Guy Bentinck shows his crusading side. He is looking for every opportunity to make understood the distinction between MOP and SOP. Let us get it straight from the start: Potash Ridge is focused on sulphate of potash (SOP), a premium potassium source that is used in crops that are sensitive to chloride

Guy Bentinck, CEO of Potash Ridge

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or fertiliser burn. Tobacco, pineapple, soft chloride in many cases will reduce yields. fruits, salad crops, apples oranges and If the chloride content isn’t managed, it can avocado are all examples and there are lead to low quality crops and inhibit plant plenty more. Growers of these crops have growth in dry soils and saline areas. two choices – SOP or nothing.

That SOP is a separate product, not a niche Muriate of potash (MOP) is the most subset of regular potash has been graphically common potassium source used in demonstrated over the course of 2013. MOP prices slumped from over agriculture, accounting $400 a ton to close to $300 for about 90 percent of following the collapse of a all potash fertilisers used Russia/Belarus cartel, but worldwide. A few plants like sugar beet actually like over the same period SOP chloride; many tolerate it prices in North America rose.

“The tenuous link between including leaf crops and Full time jobs created MOP and SOP in people’s soya, but the presence of

500

Drilling was completed in 2013 in support of Potash Ridge’s Prefeasibility Study, which was released in November

72 | BE Americas

potash ridge

“We are going to be paying the School Fund around $30 million a year in royalties when we are up and running” minds really does not seem to be there any more. The supply dynamics of regular potash don’t exist with SOP and the market impact on regular potash has not affected SOP one iota: that is the competitive advantage of our project as against many other regular potash development companies.”

2013

The PFS that is currently giving Potash Ridge a warm glow is in fact a very conservative document. It does not take into account any potential alumina by product credits, and the closer one looks at it the lower the risk appears. Contingency elements of around 15 percent have been built into capex and opex estimates; the jurisdiction is friendly, the infrastructure available and the deposit is a surface one, unlike so many potash resources.

The fundamentals of potash are sound, as the world strains to get more productivity from less agricultural land, and the product gets an additional fair wind from the growing recognition of sulphur as a plant nutrient.

“When legislation was enacted to require scrubbers to remove SO2 emissions, crop yields started declining!”

When the alunite ore is roasted as part of the SOP process, SO2 is driven off, captured, and converted into sulphuric acid. That will provide an additional revenue stream, as will the alumina, which was after all what the deposit set out to produce 40 years ago, so there’s quite a bit of it. The residue from the leaching process is alumina rich, and though it does not form part of the current business case for the mine this could yield significant tonnage of material suitable for sale as a substitute for bauxite in smelting

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“Too many projects today get stalled because management did not think through the financing arrangements early enough�

Areas 3 & 4 seen in the distance have had little exploration work to date

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potash ridge plants – there is a strong demand for this material, he says, especially from China.

Another potential market is to sell the material as an ingredient in manufacturing ceramic proppants used to keep hydraulic fractures open. With shale gas deposits taking a front seat in global energy markets, this is a growing procedure, and these proppants are an essential part of it because they perform much better than sand.

Potash Ridge is expecting to produce 645,000 tons of SOP each year, and 1.4 million tons of concentrated sulphuric acid. The company now plans to embark on a full feasibility study (FFS) early in 2014, permitting activities are already underway and offtake arrangements for sulphuric acid production are going well, with an agreement already signed with a purchaser to take 20 percent of acid production. “We are currently negotiating with third parties on build, own and operate contracts to provide gas, power and water assets at the site.”

He is confident he will be able to start construction in 2015, to start commissioning the process plant in 2017 and reach full production in 2019. “My primary focus here is on expediting the project. Too many projects today get stalled because management did not think through the

Core sample

financing arrangements early enough.” This is not a trap that Guy Bentinck will allow Potash Ridge to fall into: however he does have one big remaining challenge, and that is to bring on board a joint venture partner to take a good proportion of SOP production, to share the capital cost of development and maybe also smooth the way to borrowing such sums as may be required along the road to sustainability and profitability in the future. Discussions are already under way, and with the PFS out of the way, these will gain momentum in the new year.

For more information about Potash Ridge visit: www.potashridge.com

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Finning South America

Equipment and services which drive the economy Finning is the most important partner in the distribution of Caterpillar equipment and services worldwide. Today, its focus is on delivering an excellent service, which includes expert advice, and the constant innovation of products with the highest safety standards

Edited by: Will Daynes research by: Richard Halfhide 76 | BE Americas

Finning South America

P

roviding service for what we sell� is the formula which has endured for eight decades and managed to consolidate Finning as the most important partner in the distribution of Caterpillar equipment worldwide. This is stated by Marcello Marchese, CEO of Finning South America, who has led the company since June 2012, taking command of the Argentina, Bolivia, Chile and Uruguay branches, where the company is positioned as the major CAT equipment and services distributor for the mining, construction, energy, forestry and oil & gas industries.

With more than a decade promoting the growth of the locations in which it operates, Finning has committed to deliver value to its customers and their industries, as well as to the local economy by generating employment, creating more than 7,800 jobs and counting and more than 100 facilities spread throughout the region.

With the acquisition of the distribution of the former Bucyrus brand, Finning completed its range of solutions for the mining market, allowing it to provide the broadest line of solutions to the customers in this sector.

The product offering ranges from mining trucks, hydraulic and cable shovels, loaders and drilling rigs, as well as a portfolio of services including, condition monitoring, training of operators, technicians and skilled mechanics, consulting, and an effective range of available spare parts.

In the construction industry, this company offers a powerful line of Caterpillar equipment.

Among them it is worthwhile mentioning

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the wheeled and tracked tractors, loaders, excavators, graders, rollers, compactors, skid steer loaders, material handlers, pavers and other equipment for public works and infrastructure projects.

Regarding the power systems area, Finning is specialized in delivering solutions to those seeking power systems for the different industries, applications, mining projects and support equipment, thereby covering power requirements from 13 kVA to 3,000 kVA in one generation unit. For larger power, it also develops projects for generation plants with facilities and multiple interconnected equipment.

The forestry equipment Finning sells is designed for all types of forestry work, from thinning, harvesting, loading, field management and forest road construction.

For the oil & gas market, Finning has a wide range of drilling, gas compression, well maintenance, pumping and power generation products, for emergencies or continuous power generation for oil extraction fields.

Relying on a team of experts provides clients with a broad portfolio of solutions as well as the best technology and is part of the seal of this Canadian company. They differ from other competitors in the efficiency and support that as a dealer is provided for each one of the CAT

pieces of equipment that are sold in different industries where CAT is present.

For Finning, the sale of equipment is only the beginning of a high-level commitment and the beginning of a relationship of loyalty which is sustained by experts and by cuttingedge technology in comprehensive services.

In this context, a range of technological solutions which Finning has for equipment and fleet management is inserted.

“With more than a decade promoting the growth of the locations in which it operates, Finning has committed to deliver value to its customers�

80 | BE Americas

Finning South America

From its Technology has better availability Solutions center, which boasts of its fleet and therefore, better productivity. state of the art technology and is managed by high standard T his new system specialists, the company equally offers specific Jobs created by Finning conducts assessments, online plans for equipment in South America tracking and diagnosis of the control, productivity and condition of the equipment. support, according to the Thus, for example, a client needs of each individual can detect in real time the exact moment of customer, including the ability to know the possible failures, which contributes to prevent location, fuel consumption and operating incidents and maximize productivity. It also times, among other parameters. allows for the implementing of preventive Advisory services, technical support measures, because the system advises and diagnostics of customer value are also components replacement and maintenance. provided. This is cooperative and collaborative Marchese, the highest executive of the work, which allows access to this information company at a South American level, ensures from a computer or mobile device. This is that the customer saves time and money, one example of how the company is working

7,800+

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“Marchese believes that these tough times are an opportunity to adjust and allow the organization to be more efficient and innovate with its customers” to combine world class technology and the know-how of the Finning experts.

Another service which is most valued by customers is the “online specialists and technicians,” program, which is essentially a contact center assisted by experienced technicians and is available to address concerns and help customers to identify potential failures in their equipment, delivering step by step recommendations to solve any problem.

82 | BE Americas

They also provide technical advice to Finning technicians who are on site, by means of a video camera system which sends live images to online specialists, enabling timely and effective assistance.

Although Finning South America has not been indifferent to the slowdown in mining and the swings in construction, Marchese believes that these tough times are an opportunity to generate adjustments and

Finning South America

allows the organization to be more efficient and innovate with its customers.

The company has focused on training in order to have available professionals who are better prepared for the industry. This new value proposition, materialized with the Finning Technical Institute, FIT. A modern building located in the most important mining area of Chile, Antofagasta, it has been supported through an investment of $12 million, with high-tech equipment spread across more than 13,000 square meters, allowing for teaching and training under a system of learning, using competences for the Finning mechanics and technicians, maintainers and operators of its customer portfolio. The FIT also supports young people in the region who the company

also provides access to apply for available degrees, with the aim of giving them better future employability.

Finning continues to take an optimistic view when faced with an uncertain outlook for the mining and construction markets, betting on offering the most comprehensive portfolio of equipment and services of the sector. This will allow it to provide continuity to the different lines of training and specifically consolidate a history of loyalty to their customers which began over 80 years ago in the world of large industrial suppliers.

For more information about Finning South America visit: www.finning.com

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Cerro Negro ready to yield Goldcorp is the fastest-growing, lowest-cost senior gold producer, and its Cerro Negro gold and silver mine in Argentina is on the cusp of producing its first gold

written by: John O’Hanlon research by: Candice Nice

84 | BE Americas

Goldcorp Cerro Negro

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Inside the Eureka mine

Goldcorp Cerro Negro

T

he Canadian company Goldcorp Inc acquired the Cerro Negro project in late 2010 through the acquisition of Andean Resources.

Cerro Negro is a camp-scale compilation with at least 6 veins – Eureka, Mariana Central, Mariana Norte, San Marcos, Bajo Negro and Vein Zone - already identified and located near surface which allow for development of relatively shallow ramps which will reach depths of 300 metres, on average. Acquired as an advanced stage exploration and development project, Cerro Negro is quickly being transformed into one of the largest gold mines in Argentina. Located in the southern Province of Santa Cruz, Cerro Negro is currently one of the largest mining construction development projects in the country with over 3,000 workers developing 3 underground mines with ramp access and one centralised processing plant.

A year ago when we spoke to Project Director Alastair Still, work at the site was still focused on exploration. That exploration potential still exists, but today there’s a good deal of underground activity as well as the mine, or rather mines, get into initial production.

Underground ore production from the Eureka mine started on April 1 this year, and initial ore development commenced at the Mariana Norte and Mariana Central mines during June. “Ore is being stockpiled on the surface, while mine development continues with ramp access, vertical raises, and horizontal stope development,” he explains. He is pleased with the initial analysis of the first ore produced and stockpiled: “Estimated gold and silver grades are in-line with modelled reserves and

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Latin American Leader in IT Services SONDA. A history of technological solutions which make your business easier.

SONDA Argentina, SAP Gold Partner, technology partner of Goldcorp Cerro Negro.

Why SONDA? Capacity As an independent integrator with technological knowledge and experience.

Regional Vision Extensive network of world-class services.

Commitment Flexible business partner and customer needs orientated.

Strength Financial capacity. Proven track record in the Latin American market.

SONDA Argentina S. A. | 5411 4331-7500 | contacto.argentina@sonda.com | www.sonda.com

Goldcorp Cerro Negro resources at all three deposits currently being developed. The Eureka mine ramped up to approximately 500 tonnes per day of ore by mid-year and we expect that to increase to approximately 800 tonnes per day during the third quarter of 2013 and grow further as the mine increases to reach full production of 1,600 tonnes per day in 2014.”

As part of the overall project development, Goldcorp is building a processing plant that will treat 4,000 tonnes of ore per day.

Construction of access roads, a power line with connection to the national grid, camps for the workers and workshops is progressing

Plant construction – Vein Zone area

SONDA AS A KEY TECHNOLOGICAL PARTNER IN MINING INDUSTRY During 2010, GoldCorp selects SONDA as a strategic IT solutions provider to accompany the development of the Cerro Negro project. Due to its capabilities and many years of experience, SONDA is in a position to offer the full range of SAP products and integrated services in addition to a broad portfolio of Professional Services, Integration Field Services for IT, Infrastructure and Applications.

The relationship between SONDA and GoldCorp began during the feasibility study of the Cerro Negro mining project. GoldCorp needed a partner to implement the ERP system. SONDA provided their experience in the mining industry, and its proven experience in planning, executing and maintaining IT solutions customized to their clients’ needs. A business need was identified and a solution was suggested. SONDA and GoldCorp then launched the SAP ERP

implementation project, including Financials, Controlling, Asset Accounting, Materials Management and Project Systems. After the successful completion of this project, SONDA defined together with GoldCorp the best model to support the solution. The execution of this model has been underway for the past few years. The growing needs of the business for GoldCorp and the positive outcome of the SAP implementation project leverage a change of scope in the ERP landscape and different projects appeared. Thanks to the constant communication, continuous solution support and the proximity to the customer, SONDA was able to proactively understand the needs of the business and become a true strategic partner for IT solutions.

E. contacto.argentina@sonda.com www.sonda.com

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GOLDER ASSOCIATES Established in 1960, Golder is a global, employee-owned organisation driven by our purpose to engineer earth’s development while preserving earth’s integrity. We help our clients find sustainable solutions to the challenges society faces today including extraction of finite resources, energy and water supply and management, waste management, urbanisation, and climate change. With Golder, clients gain the advantage of working with highly skilled engineers, scientists, project managers, and other technical specialists who are committed to helping them succeed by embedding sustainable development principles and practices in their projects.

We serve our clients as a globally connected community that shares knowledge to

find the answers to technical issues requiring innovative approaches. Our skills at developing client relationships and understanding their business needs enable us to help clients achieve their short- and long-term financial, social, and environmental goals. We are recognised by our clients for our technical expertise and service excellence. The success of Golder’s culture can be seen through our steady growth. Our knowledge of local cultures, languages and regulatory requirements, combined with our global resources, makes it possible for us to help our clients achieve their business objectives around the world and at home.

E. ilopez@golder.com www.golder.com

www.golder.com Golder is a respected, employee-owned, global organisation providing a wide range of independent consulting, design and construction services in our specialist areas of earth, environment, and energy.

Golder office San Juan (Argentina): Iván Lopez E: ilopez@golder.com T: +54 264 4229050 ENGINEERING EARTH’S DEVELOPMENT, PRESERVING EARTH’S INTEGRIT Y

Goldcorp Cerro Negro

Eureka Camp

well. In the three years since the property was without a lost time injury. “This is a great acquired, gold reserves and resources have achievement by the team and it demonstrates nearly doubled. “New discoveries support our that we can continue to work with all of our expectation that Cerro Negro will be a long- personnel to ensure that they return safely lived, high quality asset with low production home to their families at the end of each shift. costs,” says Still. Based on a throughput of People and Safety are core values of Goldcorp 4,000 tonnes per day, annual gold production and this is expressed by our slogan: Safe in the first five years of full production should Enough for our Families!” With the workforce average over 500,000 ounces. now expanded to more than The plant will ramp up to 3,400 people, of whom full production during 2014, 640 are directly employed: that’s a lot of families! which is consistent with last Cerro Negro is a year’s stated expectations.

Safe production remains challenging location. In a fundamental pillar for all the 2012 Fraser Institute activities, and Cerro Negro Annual Survey of Mining successfully completed over Companies, the president 2014 production target 2.5 million hours of work of one producing mining

1,600 tdp

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For further information please visit bsigroup.com.mx, call +52 (55) 5241 1370 (MĂŠxico) or email informacion.msmexico@bsigroup.com

Goldcorp Cerro Negro company noted: “In the last three years Argentina has BSI is a global organization that equips businesses with the gone from being a place that necessary solutions to turn standards of best practice into welcomed mining investment habits of excellence. Formed in 1901, BSI was the world’s and protected it to one first National Standards Body and a founding member of where nothing is certain, ISO. Over a century later it continues to facilitate business other than the country’s improvement across the globe by helping its clients drive performance, reduce risk and grow sustainably through the and province’s desire to take adoption of international management systems standards, an ever-increasing amount many of which BSI originated. Famed for its marks of of the investment returns. excellence, BSI’s influence spans multiple sectors including Inflation, currency controls, aerospace, construction, energy, engineering, finance, union activism, changing healthcare, IT and retail. laws, corruption, and www.bsigroup.com.mx unwillingness to acknowledge the negative aspects of the changes has made Argentina one of the most difficult places to invest: the country has plummeted from ‘desirable’ to ‘not a chance at the moment’ even though the minerals are largely untapped and the economic benefits to the poorest regions of the country could be enormous.”

Though Chile remains the top-ranked mining jurisdiction in Latin America, Argentina’s attractiveness as a mining jurisdiction has improved, though in Santa Cruz concern over resource nationalism,

BSI

500,000 ounces

Estimated annual gold production over first five years Geologist inside the Eureka mine

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“New discoveries support our expectation that Cerro Negro will be a long-lived, high quality asset with low production costs� and mining opposition in some areas, has stunted investment in the region. The Cerro Negro property is 70 kilometres from the town of Perito Moreno, traditionally a

94 | BE Americas

ranching community. Unlike the northern part of Argentina, the people have not had a long history with mining or metals processing, but this is now changing with

Goldcorp Cerro Negro

Panoramic view of plant construction in Vein Zone area

the development of Cerro Negro and several other mining projects in the district as the town becomes an important source for the supply of goods and labour alike.

As we reported a year ago, Goldcorp’s social policy is something Alastair Still is passionate about and should go a long way to mollify the local nay-sayers. Much of the mine development is being built by a local JV which recruits its own staff. “The idea is that they carry on with the initial underground development work, and at the same time we

work with them to hire and train our own employees, who will become the miners for the extraction phase and continue with the long-term mine development once the main infrastructure is in place.” And as the community will be aware, technology transfer is a major focus for Goldcorp in this region where little in the way of mining skills existed previously. The courses the company has established at the Perito Moreno Trade School are an essential feed of trained people for both the extraction and processing

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TRONADOR is one of the leading companies providing project cargo services to the construction, oil and mining sectors with a strong presence in the Mercosur.

www.tronador1.com

Goldcorp Cerro Negro Modular Homes SRL

Operator at work inside the mine

functions and a boost to employment in Santa Cruz Province as a whole.

The company is also working with local institutions to identify socially sustainable areas of investment, with the emphasis on partnership. In a recent achievement, Goldcorp has been able to bring a recent Argentinian law graduate into its legal team. “That young lady happens to be from the local Town of Perito Moreno where she was able to obtain a scholarship from Goldcorp to complete her university degree. Now that she has graduated, she has been hired to work at Cerro Negro giving hope for the youth of Perito Moreno that they can obtain a higher education and still come back to work in their home town. She is a great role model for the local community,� explains Still.

This example of a woman entering into the mining profession, which has traditionally been dominated by men, is one area where

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We bring turnkey solutions to the most extreme places, with comfort as one of our main goals. We have design a wide variety of modular systems that covers all our customers needs - dormitories, recreation buildings, kitchen and dining, offices, etc along with all their service networks and engineering works.

Modular Homes SRL is the preferred source for temporary and permanent workforce housing for most of the big mining projects in South America. www.modularhomes.com.ar

TRONADOR

At TRONADOR we possess more than 66 years of experience within the transport industry.

To assist our clients with their projects we have incorporated new tractor units during the past year, while also extending our semitrailers and other types of trailers.

We have qualified staff who contribute their knowledge, experience and their outstanding service towards our success, and have a proven track record of being able to solve any problems which may arise, synchronising times and requirements in order to create an efficient service.

It is for this reason, and more, that we are proud to be part of this team. www.tronador1.com

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Equipment operating inside the mine

Goldcorp Cerro Negro

3,400 Expanded workforce of Cerro Negro Goldcorp is working to develop personally and professionally the under-utilised female segment of the workforce as an objective of a highly successfully program initiated by Goldcorp called, “Creating Choices”. The program has been delivered successfully throughout Goldcorp’s projects and operations by providing mentoring and coaching to women to empower them to grow and develop their full potential. “Another thing we have done in our search to generate sustainable value for the community”, says Still, “is to partner with the Development Agency of Perito Moreno, a local authority that will work together with leaders in the community continuing to evaluate projects, increasing our participation in developing sustainable development projects.”

But he never loses sight of the business objective: “Our challenge now is to finalise construction of the processing plant so we can begin producing gold as soon as possible. We want this to be a flagship mine for Goldcorp and a world-class mine for the people of Argentina!”

For more information about Goldcorp Cerro Negro visit: www.goldcorp.com

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Rich in resources and resolve

In the last twelve months Levon Resources has worked ha consolidate and progress its assets, gaining 100 percent o the Cordero Project, one of the largest silver resources on

written by: Will Daynes research by: James Boyle 100 | BE Americas

Levon Resources

ard to ownership of n the planet

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Drilling the porphyry zone at Cordero

Levon Resources

I

n an age where negative stories seem to supersede positive news the vast majority of the time, it is always refreshing to hear an optimistic voice or opinion. We have all been privy to the damaging effects that have come in the wake of the sharp fall in metal prices and economic activity in the mining sector, a prolonged event that has seen a lot of company’s share prices plunge as they fail to raise much needed capital, however if you search around you will find people that are much quicker to speak of the opportunities that do exist today.

One such individual is Ron Tremblay, president and chief executive officer of Levon Resources. “For us, the downturn in the metals industry presented an opportunity to channel our efforts on securing the last piece of the puzzle when it comes to the Cordero Project.”

The puzzle piece Tremblay speaks of is the Aida mining claim, located in a central part of the Cordero Project, itself found in northwest Mexico. “Prior to purchasing the Aida claim we had spent the better part of the last five years trying to strike a deal under extremely difficult circumstance,” he states. “As luck would have it, the market conditions allowed us, with a lot of effort and hard work on our team’s part, to finally come to an agreement to purchase the claim at a cost of $2 million.”

With a complete package now in place Levon Resources recently set about conducting a drilling program on Aida. Should drilling prove successful it will allow the company to re-evaluate its resource calculation.

These latest developments represent the next phase in the growth of what is one of the world’s largest silver resources. In less than four

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years Levon Resources has amassed a resource at Cordero containing 364 million ounces of silver indicated and a further 91 million ounces inferred. Additional indicated resources of 945,000 ounces of gold, 6.1 billion pounds of zinc and 3.3 billion pounds of lead have helped establish Cordero as one of Mexico’s premier polymetallic porphyry targets.

Having successfully cut back on expenses in the last 18 months or so, a process which the company intends to continue while metal prices remain low, Levon Resources also carries with it the knowledge that it retains considerable dollar value in the form of its underground assets. With Tremblay confident

View of Cordero dome

104 | BE Americas

that we will see a new high in terms of silver prices in the future, as well as increases in the value of gold and zinc, it stands to reason that the company’s aforementioned assets will only appreciate over time as the economics improve.

“I am one of those people who seek out opportunities before they happen, not after,” he says. “I am also a believer in the fact that one can’t fight against the tide of change and therefore one must deal with the things that can be dealt with during challenging times in order to be best equipped to take advantage when good market conditions return and deal from a

Levon Resources

“The market conditions allowed us to finally come to an agreement to purchase the Aida claim at a cost of $2 million” position of strength. This is precisely what we have done by continuing to advance the Cordero resource in a key area, in a responsible, cost effective way.”

With the company in an extended period of exploration and development it can also look forward to an IVA tax refund that could exceed

$4 million in total. Of course such a large sum of money does not simply get handed over in one go. The company has had to carry out a great deal of due diligence and complete a large volume of paperwork to ensure that everything is carried out in accordance with Mexican and international regulations.

“To date we have met all of the qualifications necessary to receive these funds, while a recent audit also indicated no issues therefore we expect to begin receiving our tax refund in the coming months,” Tremblay highlights.

“In line with our policy of reinvesting back into the company, a proportion of this will then most likely be used to cover the cost of our latest drilling program.”

The company’s operations schedule, as estimated at the time of writing, indicates that the drilling program on Aida should be complete by the end of January 2014. Once this has happened Levon Resources will be able to provide its Tucson, Arizona based engineers with the assay information and data that will be required to model and optimize the pit design for future recovery to take place.

This information will also help give the company a clearer picture of what Cordero has to offer in terms of its total resources.

“Early indications suggest that we could be looking at an asset containing somewhere

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Team Geology

“The company’s operations schedule, as estimated at the time of writing, indicates that the drilling program on Aida should be complete by the end of January 2014” north of 600 million ounces of silver,” Tremblay explains. “In terms of the pit itself we are potentially looking at a pit design of over three kilometres long, two and a half kilometres wide and up to one kilometre deep.

Based on the information we have to hand at present we could be looking at anywhere between a 60,000 to 125,000 tonnes per day operation with a 25-plus year lifespan.”

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While a great deal of Levon Resources’ efforts are understandably focused on Cordero, it has not prevented the company from evaluating the possibility of securing further growth outside of Mexico. “We continue to look at different opportunities all over South America, Central America and North America,” Tremblay enthuses. “What we are specifically looking for are highly

Levon Resources

Core drilling at Cordero

Commercial water well drilling rig for high velocity wells

prospective properties that have the potential to support a large scale mining operation in a good jurisdiction. It also needs to be an opportunity that we can earn into at a reasonable cost, much like Cordero.”

Despite the excellent progress made by the company in the last few years, Levon Resources, and the Cordero Project in particular, remains an extremely undervalued opportunity for investors.

Now, with 100 percent ownership of the Aida claim obtained and with signs of an upturn in the metals market beginning to appear, the time could not be better for interested parties to get on board.

“What Cordero represents is the perfect opportunity for investors to get involved,

basically on the ground floor, with a well advanced project backed by a company that has enough capital in place to carry out work for at least the next ten years without having to go back to the market to raise extra finance,” Tremblay concludes.

“There is no doubt in my mind that it is because of these factors that the big boys out there continue to watch us closely and that it is only a matter of time before one or more of them puts their cards on the table and gets involved.”

For more information about Levon Resources visit: www.levon.com

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Bigger is better The mineral wealth of Chuquicamata, now the world’s largest open-pit mine, has been known since prehispanic times. Today a massive underground expansion project is taking the asset into a new era of future prosperity

written by: Will Daynes research by: Candice Nice

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Codelco - Chuquicamata Mine

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Air extraction tunnel which is 11 meters in diameter

Codelco - Chuquicamata Mine

I

f you were to set out today from Chile’s capital city, Santiago, and head 1,650 kilometres north you would eventually come to what is the world’s largest open pit mine. Based 2,870 metres above sea level, the Chuquicamata Mine is without question one of the jewels in the crown of Codelco, the planet’s largest producer of copper.

In its possession Codelco holds approximately ten percent of the world’s total copper reserves, producing some 1.75 million tonnes of refined copper in 2012 alone. This massive amount of copper stems through the company’s seven mining divisions, one of which is Chuquicamata, which itself is responsible for producing around 366,000 tonnes of fine copper per annum.

Although mining at Chuquicamata commenced in 1910, its mining properties had been known for centuries by the prehispanic cultures present in the region.

Said properties continue to be exploited to this very day with Codelco currently embarking on a structural expansion of the site in order to mine the resources located under the last open pit at Chuquicamata.

This pit has successfully delivered wealth and prosperity to Chile for the better part of 100 years, and yet in its current state it will no longer be profitable by the end of this decade.

It is with that in mind that the company embarked on its plan to transform the world’s largest open-pit mine into an underground operation and one with a projected output rate of 140,000 tonnes per day.

“In recent years,” explains Sergio Bustamante, Project Director for Chuquicamata, “further explorations have

BE Americas | 111

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Codelco - Chuquicamata Mine been made which have siemens confirmed that beneath Direct drives equipped with synchronous motors are the pit exist 4,200 million a proven drive solution. These gearless drive systems tonnes of resources.” are often found in steel rolling mills, but also in mining This figure translates applications, such as hoists and mills. into around 1,700 million Direct drives are now being increasingly used for belt tonnes of copper ore conveyors requiring high power.

Conveyor drives must be reliable and efficient – that’s why reserves and molybdenum ThyssenKrupp and Siemens partnered up to develop a simple (512 p p m), which drive solution with few components. The drive train consists represents over 60 percent only of the pulley, two bearings, the rotor and stator. of all mined resources The availability of the drive increases as a result of the low in the last 100 years. It number of components installed. has subsequently been Direct drives are more efficient and represent the best decided by the company choice for power ratings of several Megawatts. www.siemens.com/mining that exploiting the reserves through the construction of an underground mine, which will be one of the largest and most modern and efficient in the world, is the most economical option going forward.

Such a large undertaking, especially one that is unprecedented anywhere in the industry, obviously throws out its own technical challenges, all of which have been taken into account by the mine operators. The material handling system for example will be unique in that it will run entirely through belts, with the main strap

“The material handling system is unique in that it will run entirely through belts”

The access tunnel is approximately 7.5km long

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The result of a joint venture Between ACCIONA Infrastructure, SA and Obras Subterrรกneas, SA. The Consortium ACCIONA-OSSA, SA is today a hugely important contributor to the Codelco Chuquicamata underground mine project PMCHS.

www.acciona-infraestructuras.es | www.ossaint.com

Codelco - Chuquicamata Mine

Entrance to tunnel number 12

ACCIONA-OSSA

ACCIONA-OSSA, SA brings over 100 years of experience in the construction industry with a philosophy of sustainable development and excellence in quality, technology and innovation, covering all aspects of our business, from engineering and design to implementation and maintenance.

The philosophy of global character ACCIONA-OSSA, SA considers the interests and needs of the customers and the company both locally and globally.

ACCIONA-OSSA, SA has all the necessary means to carry out innovative solutions to the most challenging projects, both small and large scale, located on any terrain and in any part of the world.

All operations are carried out according to environmental, social and economic ties with a global sustainability criteria and constant attention is paid towards improving construction processes, innovation and implementation of measures for environmental protection. www.acciona-infraestructuras.es www.ossaint.com

having two sections of approximately three kilometres of belt each.

Elsewhere, technical operations on the early stages of the mine’s structural design, which comprises of four levels of production, include the construction of a main access tunnel measuring 7.5 kilometres, a similar tunnel system that will be used to transport ore, five clean air injection ramps, two air extraction shafts and numerous other works.

Despite the obvious scale of the task at hand Bustamante and the company have a clear target in mind when it comes to the timescale for the expansion project. “Underground operations are due to commence from 2019.

360,000 Tonnes of fine copper produced by the mine per annum

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Codelco - Chuquicamata Mine After that will be a ramp Sandvik up period that will take Sandvik Mining is a business area within the Sandvik about seven years to reach a Group and a leading global supplier of equipment and tools, production level of 140,000 service and technical solutions for the mining industry. The tonnes of ore per day which offering covers rock drilling, rock cutting, rock crushing, converts into 366,000 tonnes loading and hauling and materials handling. of fine copper a year.”

Every product is preceded by extensive R&D and backed with application expertise and a worldwide service network offering As the home of both the on-site service, training and round-the-clock support. largest open pit mine and We have a tradition of localization and conviction that there the biggest producer of can be no substitute for direct service and contact with copper in the world, it really our customers. Our service-oriented, organization is wellgoes without saying that developed and we have technicians located strategically Chile is a hugely important around the world. location when it comes to the www.sandvik.com health and future growth of the mining sector, not only in South America but on a global scale. It therefore stands perfectly to reason that the State of Chile assigns a great deal of important to the industry.

By breaking down the figure it becomes clear very quickly indeed how important Codelco’s operations are to the country and the wider region. In 2012 the state-owned company generated more than $7,500 million in income and since it was created in 1971 it has generated wealth equivalent to more than $100 billion. A sizeable percentage of this is in turn assigned by the state to areas Work platform for air extraction such as health, education, public services and

“In recent years further explorations have been made which have confirmed that beneath the pit exists 4,200 million tonnes of resources” BE Americas | 117

Show the world what your company has to offer with our tailored packages

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Codelco - Chuquicamata Mine infrastructure projects, all for the benefit of the Chilean Astaldi is a leading Italian general contractor with people, particularly those over 90 years of global experience. Its expertise is in classed as being the most the construction of large infrastructure projects in deprived. This makes the fact transportation, water and energy and civil and industrial that the industry is continuing building as well as concessions. Listed on the Italian to grow rapidly and robustly Stock Exchange since 2002, today Astaldi operates in 18 countries with close to 10,000 employees. Over the a hugely positive one, years Astaldi completed and delivered numerous iconic with a least five structural works in Europe, Central and South America, Africa and projects in different stages Asia. In 2012, Astaldi ranked among the first ten top global of development presently contractor in transportation and hydro-electric projects by underway under the Codelco Engineering News Record. banner alone. www.astaldi.com As well as supporting Chileans on a national scale, Codelco’s Chuquicamata mine has long been a vital source of support for the local Calama community. “Here,” Bustamante states, “the company has led a very important program called Calama Plus. Together with the support of various private companies the program centred on a voluntary citizens’ consultation, in which more than 20,000 residents participated, with the aim being to create a master plan to improve the standard of life in the community.”

Looking at future of the mine and its underground expansion, the biggest challenges for Codelco when it comes to

ASTALDI GROUP

2019 When underground operations at the mine are due to commence Jumbo rig working in the transport tunnel

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Codelco - Chuquicamata Mine Building personnel separating different areas of construction

“The next five to ten years are arguably going to be this project’s most vital period of time” managing and constructing a mega-mining project valued at over $4,000 million will be to ensure that it continues to capture the enormous potential of the Chuquicamata site for many years to come, something that must be done within time and cost limits, and without serious accidents. This last point is critically important to the company as it has long placed emphasis on the fact that safety is its top priority and that it believes that there is no target it could reach that would ever justify placing its employees at risk.

“The next five to ten years are arguably going to be this project’s most vital period of time,” Bustamante concludes. “This is the period in which we are going to be building the project, and then it will be put into operation and subsequently we will advance with the productive scaling (ramp up). Our primary goal throughout will be to materialise a good project to benefit Chile and all the people of Chile.”

For more information about Codelco - Chuquicamata Mine visit: www.codelco.com

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Prospering in Peru

122 | BE Americas

SRK Consulting - SVS Ingenieros Since merging with SRK Consulting in 2011, SVS Ingenieros has consolidated its Peruvian market share and diversified its range of technical services

written by: Will Daynes research by: Jeff Abbott

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Underground mine decline rehabilitation

SRK Consulting - SVS Ingenieros

O

ver the last ten years, the value of Peru’s mineral production has increased dramatically.

During the five-year period from 2005 to 2010, mining exports increased from $9.8 billion to $21.7 billion, raising the country’s mining profile internationally and presenting significant consulting opportunities.

The Peruvian company SVS Ingenieros has served the mining, engineering, and civil construction sectors since 1985. SVS employs a team of professionals with extensive experience in surface and underground mining, geology, geotechnical and civil engineering, environmental control, and mining health and safety. In the late 1990s, following the approval of mining-related environmental legislation, SVS dramatically expanded its environmental services to include the design of mine tailings and waste facilities and the supervision of mine services and field construction.

SVS’s vision is to become the consultant of choice in its local market by providing exceptional service to its customers and meeting the highest international standards of quality, safety, and social responsibility.

This vision moved closer to reality in 2011 when SVS merged with SRK Consulting.

Formed in 1974, SRK is an independent, international consulting practice that provides focused advice and solutions to clients, mainly from earth and water resource industries. For mining projects, SRK offers services from exploration through feasibility, mine planning and production to mine closure. Today, SRK employs more than 1,600 professionals

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Mine tailings facility reclamation

“For mining projects, SRK offers services from exploration through feasibility, mine planning and production to mine closure” internationally in over 50 offices on six continents. Among SRK’s 1,500 clients are many of the world’s major and medium-sized metal and industrial mineral mining houses, exploration companies, banks, petroleum exploration companies, construction firms, and government departments.

In 2010, SRK was looking for opportunities to expand. Peru was an attractive option, given a forecast increase in mining activity

126 | BE Americas

of $4 billion per year for the next five years.

SRK had already worked on many projects in Peru and had enjoyed a strong working relationship with SVS for almost 20 years.

“In order to better serve our Peruvian clients, we decided in 2011 to merge with SVS,” said SRK Group CEO Andy Barrett.

“SVS already held a very strong position in the local market and from this well-established base we have gained a foothold in Peru. We

SRK Consulting - SVS Ingenieros

Biological field work

have brought new services to the marketplace by combining our mining and geology experience with SVS’s strong skills in rock mechanics, tailings, and the environment.

We have also augmented our international teams, particularly in Latin America.”

SVS General Manager Carlos Soldi was equally enthusiastic about the merger and the resultant synergies. “Prior to the merger, SVS could not offer professional services in areas such as due diligence and hydrogeology,” he said. “Since the merger, we have drawn upon the talent and technical abilities that SRK has cultivated across its global operations. We have expanded our service line to include due diligence and geotechnical services, resource and reserve calculations and certification, mine planning, and process design. We have

Underwater geotechnical drilling

also strengthened SRK’s and SVS’s strategic relationships with international firms, further broadening the fields in which we provide high quality services to our Peruvian clients.”

Soldi concluded, “Following the merger with SRK, SVS has been able to offer a wider range of services to its traditional clients and to enter fruitful, new relationships with other mining companies. While we continue to work predominantly in Peru, we have also been able to take on more projects in countries such as Mexico, Colombia and Argentina.”

For more information about SRK Consulting - SVS Ingenieros visit: www.srk.com

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Leading South American exploration The work of Mariana Resources’ highly experienced team is allowing it to transform its developing discoveries into robust projects

Mariana Resources

M

ariana Resources Ltd is an AIM quoted South American gold, copper and silver exploration and development company focussed on advancing mineral rich projects up the resource development curve. Mariana has an extensive project portfolio in southern Argentina poised to generate value uplift in the long-term; however it is the company’s transformational leap into Peru which has excited investors, and where the company believe that significant economic opportunities exist in the near-term.

Mariana’s Peruvian opportunities consist of two highly prospective and potentially company-making gold/copper/ silver projects optioned from TSX-V quoted Condor Resources Inc. The 102 sq km Condor de Oro prospect in Northern Peru, where Mariana can earn 51 percent , is situated along the Cordillera del Condor corridor, one of the most significant emerging gold and copper belts in the world.

Importantly, extensive geophysics and sampling work conducted at Condor de Oro points to the prospect containing a highly mineralised intrusive related porphyry system with the potential to host a multimillion ounce gold and base metal deposit.

With this in mind Mariana has commenced an initial 1500m drilling programme with assay results due Q4 2013. The company believes these results will confirm the

mineralisation, economic and companymaker potential of the project.

Mariana’s can earn a 70 percent interest in the second project in Peru being the advanced Soledad gold-copper-silver project located in the Cordillera Negra metallogenic province in Central Peru, 34 km south of the Pierina gold-silver mine operated by Barrick Gold Corporation. This project complements the company’s diversification strategy into Peru and offers excellent exploration upside which the company plans to drill in the first half of 2014.

In addition, Mariana has assembled an impressive 200,000 hectare portfolio of gold, copper and silver projects in the prolific epithermal gold-silver district of Santa Cruz province, Argentina. The area has seen considerable corporate activity as companies seek out these major discoveries. Mariana has proved its ability to advance projects from discovery to resource phase; the Las Calandrias project was taken by the team from an initial discovery to a maiden Gold Equivalent resource of 519,000 ounces. Due to the current political climate, Argentina forms a longer-term delivery strategy for the company from which to deliver value for shareholders for the future.

For more information about Mariana Resources visit: www.marianaresources.com

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Trinity Exploration & Production

More than meets the eye Trinity Exploration and Production’s business has never been just about recovering oil and gas.

As CEO, Joel “Monty” Pemberton explains, it is equally about behaviour, rigour, purpose and changing the landscape in Trinidad for the better

written by: Will Daynes research by: Vincent Kielty

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Trinity Exploration & Production

I

n much the same way that Trinity Exploration and Production operates under the motto that “it’s not just about oil”, Joel “Monty” Pemberton has lived most of his working life with the belief that it’s not just about how much money one can earn.

“I think this outlook was borne out by the way I was brought up to never really be focused on money alone,” explains Trinity’s Chief Executive Officer. “It was back in 2003, during my time working in London that I decided to take a step back and look at my own future. In doing so I realised that even though I was getting paid handsomely for my work at the time, it would only be when I followed my own aspirations for a better life that I would truly be happy and that I would begin to reap the rewards that only such efforts can bring.”

It was in Bruce Dingwall, Executive Chairman of Trinity, that Pemberton found a kindred spirit when it came to this way of thinking and this helped greatly in convincing Pemberton to join, what was then Ten Degrees North Energy, as Chief Financial Officer in 2005, before being promoted to his current position in 2009.

Since Pemberton assumed the role of CEO the company has rebranded itself as Trinity, becoming the full cycle independent oil and gas producer that it is today, with onshore and offshore assets in Trinidad and South Africa.

Headquartered in San Fernando, Trinity’s focus is Trinidad where it operates assets on both the West and East coasts. The company’s core values are behaviour,

BE Americas | 133

Trinity Exploration & Production rigour and purpose, while its staff of more than 270 individuals possess an excellent understanding of the local operating environment and business culture.

Trinity is seeking to build Trinidad’s first independent oil and gas company of scale. It hopes to achieve this by growing reserves and production for the benefit of all stakeholders, and to its credit it has to date shown it has considerable ability to do so by quadrupling its production levels in the years since Pemberton became CEO. “While Trinidad is one of the world’s major oil and gas producers, the marketplace

SCHLUMBERGER TRINIDAD INC. The LiftWatcher real-time surveillance service provides remote communication and control of all artificial lift systems and surface controllers through a web-based interface.

Schlumberger experienced surveillance engineers monitor alarms and alerts 24/7, 365 days a year. Based at one of many Artificial Lift Surveillance Centers (ALSCs), they analyze data from multiple wells across several fields simultaneously and in real time. Data are transferred via satellite to and from remote locations, hostile environments, and sites with limited or no data acquisition capabilities.

Where an existing SCADA system is in place, the LiftWatcher system can extract the data and process it with the same top-quality results. From motor temperature to continuous flow, ALSC engineers review alarm events for all measurements at the wellsite. An ALSC surveillance database contains more than 700 data signatures—conditions that cause

alarms to be sent, one third of which are considered critical to preventing ESP downtime, misuse, or failure. The engineers analyze data summaries and poll data on demand. Using Schlumberger best practices and systematic workflows, they identify probable causes and quickly report remediation options for rapid implementation. Recommendations are relayed directly to field personnel, who review them via text messages, e-mail, or a user-friendly Web application. Critical events requiring immediate action to prevent equipment failure are also communicated by phone. When engineers see an opportunity to optimize a well, they recommend the use of the LiftPro Well Optimization Service for improving underperforming artificially lifted wells.

LiftWatcher and LiftPro are marks of Schlumberger. www.slb.com/liftwatcher

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SSL

Southern Supplies Ltd.

THE DIFFERENCE IS

ALWAYS SOUTHERN

Southern Supplies Limited is dedicated to providing our customers with a diverse range of oilfield and industrial products that improve their performance and productivity.

We also introduce Kerui Group Holding Co. Ltd as an agency we represent in the oilfield. Kerui is a National Hi-tech enterprise and one of the leading enterprises in China petroleum equipment industry base.

40-44 Sutton Street, San Fernando, Trinidad W.I. Telephone: 868-657-5194 | 868-652-8816 | 868-653-2531 | info@ssltt.com | www.ssltt.com

Seen “The delivery of Total Fluids Management (TFM) product achieved through project management, design and distribution of drilling, workover and completion fluids to oil and gas industry customers within the framework of Wellbore Management and Surface Solutions�

Baroid Trinidad Services Limited Certified to ISO 9001:2008 since 2006 Certificate of Registration No. 10000121 QM08

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vincent@bus-ex.com

Trinity Exploration & Production is characterised by its Southern Supplies Limited (SSL) lac k of i ndependent Southern Supplies Limited (SSL) has come a long way companies operating in since its humble beginnings in 1982, and is now a major the region,” Pemberton player in the supply of industrial equipment, pipe, valves continues. “What we have and fittings, tools, and hardware in the region. instead is a large number Our strategic local and international partnerships with some of major conglomerates of the world’s leading brands, manufacturers and suppliers, together with a dynamic and responsive international with incredibly large asset supply chain, allow us to fulfill just about any demand portfolios. This creates an that a customer can bring us. ideal scenario for purposewww.ssltt.com built vehicles like Trinity to come in and partner with these companies in order to help them monetise every drop of oil or gas that they would otherwise miss.”

Such efforts create a win-win situation for both Trinity and the major oil and gas players in the region, particularly given that Trinidad is home to significant reserve pools and lots of acreage in which Trinity can apply its model to great effect.

Underpinning this however is Trinity’s own asset portfolio, which itself has seen an increase in production of some twelve percent since February of this year. “As this production continues to grow and cash continues to flow into the business it helps to reaffirm our own strong position in the marketplace,” Pemberton highlights.

“Furthermore, we will commence the

“Since Pemberton assumed the role of CEO the company has rebranded itself as Trinity” BE Americas | 137

WHEN PRECISION IS PARAMOUNT Specialising in Heavy Haulage & Equipment Rental since 1945 We are the best source for large-scale construction, engineered heavylifting, equipment rental and multi-modal transport throughout the Caribbean. We are keen to show clients how it is that we are best suited to serve their projects.

Container Transport • Project Warehousing Crane & Equipement Rental • Turnkey Project Cargo Handling Irregular & Oversized Load Transport Port Cargo & Material Handling • New Equipment Sales Heavy Lift & Haul Engineering • Heavy Haul Transport Rigging Engineering • Customs Brokerage Affiliated companies are as follows: Advance Readymix Limited – Concrete Suppliers Vega Minerals – Quarry Operators, Aggregate Suppliers

Tel: 868 653 3802 | Fax: 868 652 8030 E-mail: info@paramounttransport.com | www.paramounttransport.com

Trinity Exploration & Production drilling of two more exploration wells in the coming weeks, which lie within existing assets and could potentially double the size of Trinity by themselves.”

Back in 2009, when Pemberton assumed the role of CEO, the company was producing approximately 1,000 barrels of oil equivalent per day (boepd). As a result of its efforts to grow both internally and through the acquisition of new assets Trinity today produces some 3,830 boepd.

At the same time its labor force has also grown from 120 employees to more than 300 at press time.

THE PARAMOUNT TRANSPORT AND TRADING COMPANY With a passion for service, Paramount was solidly anchored from the roots of Joseph Lutchmansingh in 1945. The Paramount group, first secured their place in the energy sector in 1967 by assisting with the construction of a desulfurization plant for Texaco Trinidad, and have since maintained a frontline presence building on experience gained by the demands of the highest standards known worldwide.

The Paramount name is now reinforced with an employee base of over 500 committed individuals who can celebrate 3 generations of best practice, refinement and evolution.

Through the years our clients have pushed the boundaries and Paramount have stepped up each and every time to deliver with exceeded expectation – size and volume are part of our daily routine. Through heavy lift equipment rated in excess of 700 tonnes, heavy haul capabilities beyond 1 kiloton and loads over

200 ft in length we have been known to draw a crowd while executing an impressive array of well planned lifts, twists and turns. Paramount’s value is not defined by lifting / moving a load within the parameters of our equipment; it is our ability to execute without incident, safely and as planned. Paramount’s potential is enabled through the technical skill of our workforce, providing customised solutions to the dynamic business needs of our clients. The Paramount influence in the construction industry includes the successful partnering of our own ready mix concrete plants (Advance Readymix Ltd.) with our quarry under the name of Vega Minerals Ltd. Our passion for refinement brings with it new, cutting edge equipment, which has enabled us to offer our clients a truly superior product, resulting in an ever expanding market footprint. www.paramounttransport.com

BE Americas | 139

Petroleum Contracting Services Limited is a locally owned and operated service company established and registered in Trinidad and Tobago in 2004.

We have since grown to be one of the largest local on-land providers of swabbing services, crude oil transportation and drilling site preparation.

265 Goodman Road, Penal, Trinidad W.I. Phone/Fax: 1 (868) 647 6655 Email: petroleumtrinidad@gmail.com

Trinity Exploration & Production The first half of 2013 saw the company bring At Petroleum Contracting Services Limited, we pride a total of six onshore ourselves in providing integrated services ranging from development wells into turn-keysolutions to one-off oilfield services. We are production with an average committed to providing the highest level of service to our initial production rate of partners. Our philosophy, accountability and work ethic 150 barrels of oil per day have fostered long term relationships with many of the existing on-land lease operatorships. We have a reputation (bopd), ahead of a budget to uphold and it’s our mission to do so, while continuing of 50 bopd per well. The to deliver the highest quality of service that our clients two exploration wells that demand, in an honest and trusted environment.

Pember ton prev iously We have extensive in-house expertise which translates mentioned, and which into viable solutions that help improve our efficiency and the company has already reliability without compromising our primary commitment to secured two jack-up rigs to health and safety.

E. petroleumtrinidad@gmail.com drill with zero cost options for additional rig slots if required, will bring this figure to eight wells for the year.

The company’s work for the year doesn’t end there however. On the contrary, Trinity intends to continue with its onshore development campaign by drilling a minimum of five new wells by the end of 2013. In light of these plans the company has updated its production guidance to 4,200 - 4,500 boepd exit rate for 2013.

Trinity strongly believes that Trinidad, a prolific hydrocarbon presence, offers significant remaining potential for oil and gas producers and that it is

Petroleum Contracting Services Limited

3,830 boepd Currently produced by Trinity

BE Americas | 141

Quality Service BuildS laSting relationShipS At EDG, we combine world-class engineering, design and project management with complete project team support. Through EDG’s project experience and our extension of staff approach we have become a trusted consultant to Trinity Exploration and Production Company, LLC. Our quality service, cost-effective solutions, and the character of our staff allow us to be a dependable resource to our clients, worldwide. For more information about EDG and our portfolio of engineering services, please visit us on the web at www.edg.net.

Better people

“Trinity Exploration and Production LLC values the relationship we share with EDG a company which we consider to be knowledgeable, professional and thorough in all of its operations. As well, Trinity considers EDG to be a competent provider of brownfield engineering support for our business.”

Chief Operating Officer, Trinity Exploration and Production

Better BuSineSS

www.edg.net | 1.888 .EDG .9298

Trinity Exploration & Production uniquely positioned to capture upcoming opportunities. As such it makes perfect sense that its current focus is trained firmly on the island. However it is important to remember that as an independent company with significant international experience possessed by its upper management, Trinity understands that as it expands as a business so too will its geographic reach.

“Of course we don’t know exactly where things will take us in the long run,” Pemberton says, “but what we do know is that having a solid business,

EDG INC In December of 2010, EDG partnered with Trinity Exploration & Production, LLC (formally Bayfield Energy Galeota Limited) to provide engineering services for a Brownfield program located offshore of the East Coast of Trinidad.

Trinity called on EDG to provide an action plan for renovating four existing offshore platforms, interconnecting pipelines, and an onshore terminal they had recently acquired. These platforms were originally commissioned more than thirty years before and had seen little attention or upgrades over the years. EDG leveraged significant offshore, operations, design, construction and laser scanning experience to frame the opportunities and provide workable improvement alternatives without compromising the existing production.

Using laser scanning technology, EDG was able to create accurate as-built information to indicate all of the modifications that had occurred over the decades. This data

was leveraged by EDG’s multidisciplined team to successfully complete the project, which included engineering, design and drafting, procurement services, project and document control, construction management, inspection and laser-scanning. EDG’s project team of process, mechanical, electrical, instrument, and structural engineers quickly became an extension of Trinity’s staff, a team of reliable engineers that could be deployed when required. It was through quality execution and prompt responsiveness that EDG championed the project. From initial engagement to effective and innovated engineering solutions, EDG has earned Trinity’s confidence as their trusted advisor. EDG, Inc. is a multi-discipline, international, engineering, design and project management firm serving the Oil and Gas and Industrial Markets in eight offices worldwide for over 30 years. www.edg.net

BE Americas | 143

S O LU T I O N S TO D AY F O R A G R E E N E R TO M O R R O W

Envirospec was incorporated in 2005 to serve the needs of residential, commercial and industrial customers with air and water purification and filtration systems.

• Waste Management – this deals with the remediation and recycling of waste bi-products.

• Electrocoagulation process • Centrifugal process • Automated Tank Cleaning Services - which deals with the cleaning out of chlorides and other sediments present in water storage tanks.

• On-Site Analysis and Evaluation • Roof Cleaning • Bottle-less Water Dispensers – this comprises of the rental of our bottle-less water dispensers at a low monthly cost.

• Other Biodegradable Solutions for Industries

Tel: (868) 649-9208, (868) 376-9598, (868) 289-6388 | Email: envirospectt@yahoo.com

Southern Maintenance Services Co.Ltd

Southern Maintenance Services Co.Ltd Merging experience, technology, training and safety, to produce a level of service that surpasses our competitors, while focusing on our priorities, which are, our customers, employees and the environment.

Products and Services we provide: • Pipeline Construction • Sandblasting and Painting • Welding and Fabrication • Labour Supply - On land and Offshore • Procurement • Transportation • Civil and Marine Construction LP #55, Isthmus Road, Galeota, Guayaguayare, Trinidad, WI. Telephone – 1-868-630-3257 | 1-868-630-1970 | 1-868-630-6195 | E-mail – southmai@tstt.net.tt

Trinity Exploration & Production built upon solid assets, Envirospec can take you to the right Founded in 2005, a Company with humble beginnings, places. What we also know started when Mr. Marvin Wilson (CEO), saw the need to is that what we are doing provide air and water purification systems to customers today is helping to grow with the aim of improving the overall health and well being our business, increase of customers and the environment at large. Envirospec has our options and flexibility, since expanded to offer a range of products and services that are geared towards providing high quality, environmentally and ultimately create safe, cost effective solutions. We guarantee professionalism a sense of excitement while continually modifying our applications, with market that can be felt throughout research and development, to meet and exceed our the company.” customers expectations. Without Question our products and It is also Pemberton’s services are committed to ameliorating an environment that hope that Trinity becomes is rapidly deteriorating. something of a trendsetter E. envirospectt@yahoo.com in the region. “The basin today is dominated by major international oil and gas companies. What we feel we need is more companies like ours to come in and look at monetising every single piece of acreage and extract value from material that wouldn’t otherwise be subjected to work. We believe that more Trinity’s in the marketplace will create a greater scope for oil and gas opportunities and helps create a natural chain throughout the region of

“What we have here is one of the most sophisticated industries of its kind, anywhere in the world” BE Americas | 145

businesses that will each profit from the development of the sector.”

Pemberton also hopes that the work of Trinity, and others within the sector, goes some way to helping the vast majority of Trinidadians to begin to really appreciate the size of the industry that exists on their doorsteps and the economic benefits it brings to the island. “What we have here is one of the most sophisticated industries of its kind, anywhere in the world,” he enthuses. “What you find here is upstream oil, upstream natural gas, mid-stream processing, downstream energy, export infrastructure and all the service companies that go with it, all of which occurs in an area no larger than 51 square kilometres, on an island with a population of just over 1.3 million.”

With so many opportunities located in one area it is Pemberton’s belief that it is only a matter of time before Trinidad’s oil and gas sector opens up further still to national and international investors, and Trinity wants to be on-hand to help facilitate this. “We are unique in the sense that being an operator on the ground we understand how things operate, how to bring the right people on board, how to build the right relationships and so forth.

This places up is a strong position to help make things happen in a part of the world where a vast amount of potential is just waiting to be harvested.”

For more information about Trinity Exploration & Production visit: www.trinityexploration.com

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Trinity Exploration & Production

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COTEEL

Hard work, faith,

and favour Trinidad has a well developed oil and gas industry, a fact that has enabled the emergence of COTEEL, a small, agile service company that is determined to stay ahead of its larger competitors

written by: john o’hanlon research by: robert hodgson

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Supply, installation and commissioning of D3306 crane engine on an offshore platform

COTEEL

T

he story of COTEEL is a classic the O&G industry,” says Selvan regretfully. tale of entrepreneurship. “They suffer from big company syndrome. As Entrepreneurs are defined as the older people retire and younger people people who see an opportunity have come in they have lost touch with their and seize it: but to be realistic customers. That is the main reason why we they also need the skills and technical know- have been able to penetrate that market.” how to deliver to the customer base they have The requirements of the O&G market itself identified. It was in 2011 that it dawned on have not changed that much, he adds. It is husband and wife team Selvan and Tricia more a question of the service sector not Ramnarace Moonan, each of them a high keeping up, but the problem is a serious one flier in their different fields, that they could that manifests itself right across the sector, do a better job for the Caribbean oil and gas clients and service providers alike. COTEEL sector than the incumbent service providers. was set up to remedy this deficiency. And Less than three years later they are showing the timing was serendipitous: a time when the brakes were on the whole they were right. industry thanks to the global Selvan is a career engineer with 30 years’ engineering recession was an opportunity knowledge and experience in to get the documentation, reliability techniques behind the service proposal and the him: Tricia is a qualified technology right, then seek to Of local platform accountant and an expert in capture some key clients. operators are business intelligence systems.

As a new entrant, it was COTEEL clients “We were at a stage where we vital to get things right were essentially providing from the get-go, says Tricia consultancy services to the large organisations Moonan. Ok, the company was a start up, but we worked for.” Like true entrepreneurs they 400 percent turnover growth in the second sat down one day and wondered why they trading year and another 400 percent in the were working for someone else when they third year to date is a powerful indicator that could be doing it for themselves, bringing their COTEEL was on the right track. “Our current combined expertise to the local Trinidad & customer base is three times bigger than Tobago market, the Caribbean Region, and in when we started,” she adds. “All the customer feedback so far is that the service level from time perhaps to an international client base.

Above all they had direct knowledge of COTEEL is a breath of fresh air compared the local hydrocarbon sector, and were only with past experiences. The overriding too aware that the big players were getting comment of all new prospective clients is a less than ideal service from their existing that they are not pleased with their current supply, support, service and maintenance service providers in this sector and they are partners. “They no longer really understand looking for alternatives.” The company is

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growing a portfolio of strategic partnerships in the sector and among others holds the rights to distribute Adicomp Compressors, FCI watermakers (desalination being seen as tomorrow’s solution for offshore installations), Randolph and De’Ran gears and is a reseller of Weir Minerals’ pumps and valves.

Its strategy was to get an initial contract, not worrying too much about margins, in order to prove its mettle. One such opportunity was to overhaul nine engines: in the year that COTEEL was able to deliver this job to the complete satisfaction of the client, its regular partner was only able to partially overhaul one comparable engine. “That is what we do well,” says Selvan. “We do the complete package, not just the engine.”

By the whole package he means the engine itself, its cooling system, generator, instrumentation and controls. These may be supplied by different dealers. COTEEL can be described as a ‘one stop shop’ that is equipped to handle a complete package, onshore or offshore. This approach gives COTEEL a competitive edge in the industry – and it does the job quickly including recommissioning and testing so that downtime is cut drastically.

“Getting the first job is tough: getting subsequent jobs is a lot easier. Once we have our foot in the door, we have a client!”

One of the more interesting projects he recalls was to dismantle and relocate a fire water pump from one deck level of a platform to another. “We handled the entire

Refurbished CAT 3508 diesel engine transported back to offshore platform for re-commissioning

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COTEEL

“We are able to make quicker decisions and mobilise a team more rapidly than larger and more complex organisations” project including dismantling the existing pump structure, modifying the design and reinstalling and recommissioning the pump.

Another project of ours that sparked the interest of a new client involved installing and commissioning a new engine for a crane located on an unmanned platform. The engine required minor modifications and an ingenious approach to installing it due

to location restrictions.” All of this COTEEL was able to do, to the customers’ complete satisfaction, in just three short days.

COTEEL is a small company that acts like a large one, with robust Standardised Operating Procedures (SOPs) and Business Continuity Planning in place: time after time every work activity in COTEEL is done consistently and all data and documents are backed up at a secondary fireproof location. All data entry is standardised and centralised. When a report is generated, all data elements have a uniform look with no duplicate or obsolete information in the system. This produces more effective reporting and more efficient decision making.

This level of operation has gone down well with customers. Within the two and a half years in which COTEEL has been in operation it has built up excellent relationships within the energy sector - and specifically within the energy sector that operate offshore platforms.

It has established business relationships with almost half of the platform operating companies in Trinidad and Tobago, supplied mechanical services to 12.5 percent of them and supplied watermakers and parts to 25 percent of companies in this sector.

By identifying the long waiting times, indifferent service and costly downtime that was the bugbear of the local industry, COTEEL

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was shown an open door: it could contribute to de-risking the customers’ operations – as long as it could get the first job right the first time. “Because we are small we are able to make quicker decisions and mobilise a team more rapidly than larger and more complex organisations,” says Tricia.

Being able to quote, get a team together, and execute quickly helped clients make a quick decision. Their understanding of the post service-reporting regime in the industry was another advantage. As part of the company set-up process Selvan and Tricia standardised the reporting procedure and simplified the forms so they are more understandable for COTEEL’s and its client’s employees alike, while still satisfying regulatory requirements.

Long delays in providing post service reports, and in some cases altogether failing to provide them, was another common experience among clients’ existing service providers. The same thing happened at the other end of the process. It could take months to get a quote – another place where COTEEL could change the game by turning round quotation requests within days, and providing a full and professional report immediately the job has been completed.

STOW-TT certification is a prerequisite to working in the Trinidad O&G sector.

Overhauling and reinstalling a fire wat

Short for Safe To Work, STOW was initiated in 2004 by the Trinidad & Tobago Energy Chamber after hearing the complaints from its members in the energy service sector, who were experiencing challenges in meeting the range of health, safety and environmental (HSE) requirements among the major O&G operating companies.

This made it difficult for companies to prequalify for work and fully explore

“Because we are small we are able to make quicker decisions and mobilise a team more rapidly than larger and more complex organisations” 154 | BE Americas

COTEEL

ter pump on an offshore platform

Installation of new crankshaft in CAT 3508 diesel engine

business opportunities in Trinidad and Tobago’s leading industry.

This is a costly process as well as one that requires in-house expertise at a deep level and COTEEL has grasped it head-on; something that will differentiate it from other small companies that might compete. “We want to perform at the highest level,” says Selvan.

“Being small we have to make sure we have everything in place - our larger competitors still have a lot of clout and would cut us out unless we have all the boxes ticked!”

Environmental performance is increasingly important to clients. COTEEL has elected to pursue a procurement policy that favours chemical and other products that have a low impact on the environment, even if higher priced. Employees are encouraged to deposit

domestic recyclables in the office bins. “Change begins with individuals and this culture starts at home,” is the Moonans’ mantra.

While he could recruit experienced personnel, Selvan is keen not to import the laissez faire culture and poor working practices too often found in the incumbent providers.

“Our strategy is to hire qualified people and train them the way we want them to be trained.

It used to be the case that only one percent of the population had a university degree: nowadays there are many more opportunities for tertiary education. That means we have more choices in getting better qualified people who are willing to tackle the training that they need to function in this industry.”

Selvan Moonan believes that recognising good performance is one of the best ways to

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“We have implemented a process that aims specifically to reward employees for achieving or surpassing identified objectives�

Supply, installation & commissioning of FCI watermakers on NGC platforms

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COTEEL motivate employees. “We have implemented a process that aims specifically to reward employees for achieving or surpassing identified objectives both in Operations and Health and Safety – and also in achieving an extremely high level of customer satisfaction.”

This concern for people extends to the wider community. In support of promoting healthy sporting activities as an option for young adults in its local environment, COTEEL co-sponsored a local cricket team, Hillpiece Cricket Club.

The team, like COTEEL itself, turned out to have a winning strategy as it won the final match at the City Sports 30-Overs Sunday League, at Guaracara Park, Pointe-à-Pierre in June 2013. It also won the Independence Sports Club 20-20 Men’s Windball Cricket, at Scott Road Penal, in August 2013.

While the O&G sector is always going to be the central focus for COTEEL it has not shrunk from seizing other opportunities that present themselves. In a significant diversification of its portfolio the company obtained the exclusive distributorship in the Caribbean for a product line which Tricia and Selvan Moonan expect to be strategically important in the growth of the company. This is a wellknown brand of garden machinery, for which there is a lively and growing market among the many garden hobbyists in the Caribbean.

COTEEL will not only operate within its core energy market but offer premium products within the agricultural industry as well.

At this moment then, COTEEL is consolidating its position in the vibrant Trinidad & Tobago hydrocarbon market, led by local companies such as Petrotrin and its partners among the global majors, while

keeping a close eye on all opportunities that are a good ‘fit’ with its competencies and regional market knowledge. Looking further ahead Selvan hopes to expand into other regional English-speaking markets where the local O&G market is expanding – Suriname might be a case in point. There is a need for more reliable proactive maintenance solutions such as oil sampling and vibration testing – activities well within COTEEL’s expertise. “Optimising the maintenance cycle also increases the client’s environmental performance and the efficiency of the machines. It is a benefit to the customer if he can spend less and have the machine running longer,” he says.

COTEEL is already becoming a wellknown name in Trinidad & Tobago, where it is growing as much by attraction as by promotion. Its achievements over the short period since it was founded are solid, well resourced and repeatable. If its founders’ energy and entrepreneurship are anything to go by, this is a company that will be significantly penetrating the market in the sectors in which it operates. As Selvan Moonan says: “Hard work, faith and favour with God have brought the company this far - further than other companies less than three years old have gone! We intend to never let go of that winning combination, to the benefit of our customers, employees and to ourselves.”

For more information about COTEEL visit: www.coteel.com

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Going beyond safety For more than 20 years SOS Safety International has been committed to providing quality products and service to its ever-growing list of clients

written by: Will Daynes research by: Vincent Kielty

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SOS Safety International

d

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SOS Safety International

I

f you ask me what factors have contributed none of this would be possible without the most to our success,” says SOS Safety efforts of the company’s employees, whose International’s Managing Director, drive, passion and determination Nieves Carmen Nieves, “I would have to say it is credits as being SOS Safety International’s a healthy combination of hard work and greatest strength.

“As a team we have all contributed to effort, a lot of negotiating, a lot of sales and creating a business with more than 20 years ultimately a lot of satisfied customers.”

Since 1991, SOS Safety International of experience within our chosen fields of has been a premier distributor of industrial expertise,” Nieves highlights. “What this safety supplies and services. Committed to gives us today is a company that is a lot providing quality products and service for more than just a supplier of equipment. In the safety and protection of its customers, addition to this we have developed the ability their employees and facilities, and the to perform other critical services such as environment, the company supplies loading risk management, emergency response and equipment, fire fighting emergency pre-planning. equipment, remediation and It was our offering of these services that helped catapult oil spill equipment.

“From our initial work business even further forward with our sales increasing by of selling industrial hoses some 40 percent in the space to storage terminals we SOS Safety of two years.” gradually evolved into a International’s sales business capable of meeting In that time the reputation growth over the last all manner of needs across a of the company has increased two years range of core industry fields further still and this has led including fire fighting,” to SOS Safety International Nieves continues. “As we grew, so too did gaining a number of significant contracts in the level of positive word of mouth about the region. These include the Terminal Fire SOS Safety International and this further Assessment contract awarded by Statoil South assisted in our expansion from our original Riding Point in Grand Bahama, Bahamas. As base of Central America into Latin America part of this the company will be responsible for and the Caribbean.” fire protection engineering, risk management With each task it carries out, SOS Safety and emergency response consulting services International operates under the belief that as well as the procurement and installation quality service is key to ensuring customer of fire systems replacements. satisfaction, that establishing open and honest Meanwhile, the company has also been relationships with said customers is vital and awarded the Petrojam Newport Fire Systems that it must be prepared to think outside the project bid. In this particular project the box in order to meet their needs. Of course company provides the Petrojam Newport

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“With each task it carries out, SOS Safety International operates under the belief that quality service is key to ensuring customer satisfaction” terminal with a Fire Systems Assessment and was subsequently proud to announce that it had won the project bid for the supply of the bladder systems and all fire equipment as required per the bid.

As Nieves goes on to state, being a multiskilled business has also allowed SOS Safety International to overcome a number of the

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external challenges facing the industry, not least of all the volatile economic climate of today. “By being flexible and multi-faceted we are able to move quickly when the market shifts, moving into other geographic locations and adding in-demand services in order to avoid the negative impacts that arise from a slow economy.”

SOS Safety International

Taking into account the above, it comes as little surprise that the company’s immediate objectives include continuing to grow at a healthy pace. Part of its growth strategy currently sees SOS Safety International looking into moving to a larger facility, based in Fort Lauderdale, Florida, and measuring some 5,000 square feet. From here the company would look to act as a service centre for hydrostatic service and testing of SCBA gear, which caters to their region’s marine and municipal departments.

“By developing part of our business to deliver service centre style needs we are again going to be meeting a pretty significant demand from the marketplace,” Nieves concludes. “There really is no one else, not

in our sector of the market at least, providing this type of service, especially to parts of the region such as Honduras, Jamaica and other islands. It is for this reason that I can easily envision a scenario where five years from now we will have at least three of these centres up and running, providing yet another revenue stream into the company.”

Nieves finishes our conversation by simply saying that she is excited about the future, and who can blame her?

For more information about SOS Safety International visit: www.sos-safety.com

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Hydro-Québec

Energy for

the future Hydro-Québec is the largest energy supplier in the Province of Québec: it harnesses Canada’s fast-flowing rivers to satisfy the demands of both domestic and export markets in North America

written by: John O’Hanlon research by: David Brogan

BE Americas | 165

A view of the dam as the ground work begins to take shape

Hydro-Québec

H

ydro-Québec owns and operates 60 power-generating facilities across the province. It was created in 1944. “At that time it was essentially an electricity distribution operation, with some generation in the greater Montreal region,” explains President and CEO Thierry Vandal, who has led the company since 2005, having joined it in 1996. “That was the situation until 1963 when, through a number of acquisitions, the corporation grew to develop a footprint which covers all the territory of Québec. HydroQuébec became a regional player.”

Over several decades the company mainly expanded hydroelectric power, with 98 percent of its output today coming from hydroelectricity, a clean and renewable energy. Hydro-Québec built the 15,000MW La Grande River complex at James Bay in northern Québec between 1971 and 1996.

The complex accounts for half the province’s installed capacity and is still today one the most important hydroelectric complex in the world. 1,000 kilometres north of Montreal, La Grande demonstrated the company’s ability to deliver huge capital projects, in challenging conditions with all the associated infrastructure of roads, campsites, transmission lines and airstrips.

The most recent project to be completed was the $5 billion Eastmain 1A-SarcelleRupert project, in the James Bay area. It was launched in 2007 with approval to build the Eastmain-1-A and Sarcelle powerhouses and divert part of the Rupert River’s flow. The diversion began in 2009, two of the three generating units at Eastmain-1-A powerhouse

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www.neilsonex.com

GIGANTIC IS WHAT WE DO BEST

NEILSON IS ONE OF THE LEADERS IN QUEBEC FOR MAJOR CIVIL ENGINEERING WORKS.

.. ..

Clients benefit from Neilson’s huge…

Know-how Fleet of leading-edge equipment Multidisciplinary first-rate technical team Ability to carry out large-scale projects

Wuskwatim Generating Station Intake Powerhouse under Construction, Wuskwatim, MB

Hydro-Quebec, Péribonka Generating Station, Péribonka, QC

St. Lawrence Pipeline, QC

Hydro-Québec were commissioned in 2011, Neilson the third in January 2012.

Neilson is a general contractor specialized in civil engineering The first generating unit at on a monumental scale. Since 1963 public and private sector Sarcelle powerhouse was partners in Quebec, and elsewhere in Canada, have counted commissioned in April 2013 on Neilson to break new ground, meeting the most extreme and the two other units have challenges while standing behind the quality of our work. now come on line. “From an Partnership with Hydro-Quebec on La Romaine project is an example of what we proudly realize. environmental and logistic www.neilsonex.com standpoint it was the most challenging project in the history of Hydro-Québec,” he says. “It covers an area the size of some European countries but we were able to bring it in on time and a little under budget so we are very proud of that result.”

Hydro-Québec is unusual in that it manages these large construction projects by itself instead of outsourcing the engineering, procurement and construction. “We are an organisation with a strong culture of growth and project execution,” says Vandal. “That expertise has developed over the years as we went from one project to another and it’s taken us to a level where we can undertake very sophisticated large capex projects involving challenging infrastructure and logistics. That is an area in which we very much excel.”

But it’s not all about delivery. Another Spillway construction significant factor has been the way the company has arrived EBC Inc. at a deeper understanding of EBC Inc., for over 30 years, has been a proud partner in the what he calls ‘the equilibrium success of Hydro Quebec projects. Besides hydro-electric of development’ – the works, EBC diversifies its achievements in sectors such as balance between finance, the building, civil engineering, earthworks, marine engineering, regional economy, and also, mining works (open pit and underground), wind farms and crucially, how to address pipelines, with its works being performed throughout Canada. environmental and social www.ebcinc.qc.ca aspects. “A very significant

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“A very significant key to our success over the last 15 years has been the renewed partnerships with aboriginal communities” key to our success over the last 15 years has been the renewed partnerships and understanding of the importance of our relationships with aboriginal communities.

We never tackle a new project without strong buy-in from local populations.”

You can’t put a multi billion-dollar megaproject into the environment without some impact, but Hydro-Québec’s goal is to fit in with the ecosystems in a way that

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guarantees that those ecosystems afterwards will be just as productive as they were before.

That applies to natural habitats and wildlife, the way of life and the cultural expectations of the trappers and tallymen among the First Nations and other long-term inhabitants. “We take our ideas to the aboriginal communities before they are fully formed, then work together to develop it so it becomes their project as much as ours.”

Hydro-Québec

Hydro-Québec’s goal is to fit in with the ecosystem

This gives space to traditional knowledge, which any incomer ignores at peril. “There is more than science to these things, there is a traditional understanding of ecosystems that has been carried over the centuries.” It takes humility to put aside your scientific assumptions and listen to what the locals say, he recognises.

The old ways of living and the associated wisdom do have to be preserved, but the First Nations live in the 21st century just as much as Montrealers. They want to see their share of the economic upside of development in their territory and Hydro-Québec always wants to make sure to maximise the business capacities in the communities. “We reserve a portion of contracts with these communities so at the end there remains a significant

business infrastructure and ecosystem that can go beyond and work in other areas whether it is mining or other infrastructure development,” Vandal observes. “We have been working in some of these communities for up to 40 years, and today they have very sophisticated capacities in terms of executing civil works and being present in the supply chains for things like catering, fuel supply, air transport, helicopters and the like.”

The Eastmain 1A-Sarcelle-Rupert project was completing just as Hydro-Québec entered what is undoubtedly it flagship project today.

The $8.5 billion Romaine Complex launched four years ago is one of the largest construction projects currently under way in Canada. It has two large components, Vandal explains: a $6.5 billion four-powerhouse complex on

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the Romaine River in eastern Québec and a $2 billion new high voltage transmission lines to carry the 1,550 MW it will generate to markets further to the south. “We are now almost half way through the project,” he says.

“The first power house, Romaine-2 will be commissioned by this time next year so it is very advanced and we are well under way

with RO-1, RO-3, and the fourth one, RO-4, which is way up north on the river, will be started in the coming year.” The entire project is scheduled to be delivered in 2020.

That the terrain is difficult was recognised as long ago as the 1630s when the first Jesuits to arrive described the locals as Montagnais – mountain dwellers. For this, construction

“The way the markets work in North America, the border does not really exist!”

Camp Murailles

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Hydro-Québec

Hydro-Québec works with local communities

camps for some 2,500 people had to be built, as well as 150 kilometres of road. “Before we went through the environmental review we made sure we had signed impact benefit agreements (IBAs) with both the aboriginal and non-aboriginal communities living within a perimeter of a couple of hundred kilometres from the river.” The Innu communities of Ekuanitshit, Nutashkuan, Unamen Shipu and Pakua Shipi participated in the environmental impact studies and will participate in the environmental follow-up monitoring until 2040. The estimated cost of the studies, mitigation measures and environmental monitoring is $320 million and covers fish habitats, wildlife and

archaeology which has shown evidence of settlements going back 2,000 years.

In terms of local benefits, employment and contracts, Hydro-Québec typically tries to works with existing community organisations who will hire themselves. This works better according to Thierry Vandal: “We find that when the project is completed we leave an organisation that can take on other work.”

The companies and institutions are made stronger and more sustainable.

The supply chain for a large scale project like the Romaine is a global one. For example turbines are supplied by Alstom and Voith, the transmission grid will involve global suppliers like Alstom, ABB, Siemens. The assembly

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A view of the dam as the ground work nears completion

Hydro-Québec

$8.5 Billion Cost of the Romaine Complex (generation and transmission) being made right on-site pulls in a lot of trades.

Contracts and purchases of goods and services are estimated at $3.5 billion for all of Québec, with about $1.3 billion for the Côte-Nord region alone. About 40 percent of the workforce consists of people from the Côte-Nord, including a significant number of the Innu people.

The Romaine Complex will secure Québec’s energy future and take advantage of opportunities to sell power outside the province. The USA’s demand for green Canadian hydropower is growing. In a project with Blackstone Group Hydro-Québec may take up 75 percent of the capacity of a new 333-mile transmission line being built by Blackstone Group from the Canadian border and running underground and under the Hudson River, into the heart of New York City.

“We are also very active in the development of high-voltage DC transmission, which allows the interconnection of import and transmission systems in a very efficient and cost effective way,” he says. “The way the markets work in North America, the border does not really exist!”

For more information about Hydro-Québec visit: www.hydroquebec.com

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Mexico’s tower of strength

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SPX - Marley Mexicana

By combining over a century of experience with cutting-edge, environmentally friendly technology, Marley Mexicana has solidified itself as one of jewels in SPX Group’s crown

written by: Will Daynes research by: Jeff Abbott

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Marley Sigma Cooling Tower

SPX - Marley Mexicana

W

hile the name, SPX Cooling Technologies, has only been in use since 2005, the company that bears this title actually possesses over a century of experience, during which time it has become amalgamated with some the best known names within the cooling industry including Marley, Ceramic, Recold and Hamon Dry Cooling. This has resulted in the company possessing more than 250 global patents in the power generation, industrial, refrigeration and HVAC markets.

Originally founded in Germany in 1894, Balcke & Co. as it was then known, quickly went about becoming a world leader in cooling towers during the early 1900s.

Marley, meanwhile, was founded in the US in 1922, first as the Power Plant Equipment Company before becoming The Marley Company in 1926. Marley would go on to invent and patent most of the industrial cooling tower innovations and technologies that remain so vital to this day. It is this legacy that means that Marley Mexicana remains the only entity left within the SPX Group to retain its original name, that and the fact that the brand has been known in Mexico now for more than 50 years.

Drawing its strength across its operations from the unmatched quality of its products, SPX Cooling Technologies today boasts more than 150 offices, subsidiaries and partners across the planet, providing it with both a global reach and local presence in core markets that allows in to deliver the solutions its customers require quickly.

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The company first opened its Mexico office, from which Marley Mexicana continues to operate, in 1960. Ever since it has been the leading regional force when it comes to cooling tower technology and sales, and has been responsible for installing towers into many of the country’s most important power plants on behalf of Comision Federal de Electricidad and Petroleos Mexicanos.

It is in Mexico that the company have noticed that in the last five years in particular there has been a considerable increase in interest from customers requesting access to material and equipment that doesn’t just exceed their expectations in terms of quality, but which also decreases pollution and toxic residues.

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There is certainly a growing culture within the country of companies looking to be more sustainable and environmentally conscious, one that has increased as the Mexican energy sector has expanded in value. Fortunately for those in possession of such ethics, Marley Mexicana has long been known as a reliable supplier of cooling towers and air cooled condensers specifically designed to lower pollution and increase efficiency.

Promoting sustainable energy production is a trait that the company has long striven to possess and is encapsulated in the fact that SPX Cooling Technologies is proud to be a member of the US Green Building Council and is an advocate of the LEED Program, a voluntary, consensus-based national

SPX - Marley Mexicana

Marley Series 600 Cooling Tower

“SPX Cooling Technologies is proud to be a member of the US Green Building Council and is an advocate of the LEED Program� standard for developing high-performance, sustainable buildings. Evaporative cooling is a central strategy for green building design due to its energy savings and low environmental impact. Also, water treatment strategies to minimise make-up and blowdown can offer the potential to gain water resource credits in LEED. The LEED Program in itself is linked

closely to the ASHRAE 90.1 Energy Standard for Buildings Except Low-Rise Residential Buildings, a US standard that provides minimum requirements for energy efficient designs for buildings. LEED sets the ASHRAE 90.1 efficiency as the threshold for compliance before a building can even be considered for receiving LEED credits. These credits are subsequently granted based on improvements

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in overall building energy efficiency that are better than ASHRAE 90.1.

Towers that are selected larger in physical size with energy efficiency in gallons per minute per horsepower above ASHRAE 90.1 can help a company to acquire LEED credits. The use of variable frequency drives (VFDs) can also enable significant annual energy savings in most climates, which also can help to enable LEED credits. Marley

Mexicana’s Tower Sizing and Selection tools are able to assist its clients by providing the ASHRAE efficiency calculation on the output of each selection.

As part of the Green Building Council the company can also supply its customers with the Green Building water calculator. This solution easily allows a company to determine water usage values such as evaporation, drift, blow down, and total water usage by

“Rather than being fearful of change, Marley Mexicana are embracing the prospect of serious reforms being made to the energy industry”

Marley Quadraflow Cooling Tower

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SPX - Marley Mexicana

Marley Series 400 Cooling Tower

simply adjusting operating conditions like total water flow, hot water temperature, cold water temperature, wet-bulb temperature, drift rate, and concentrations to match each individual scenario.

The energy sector in Mexico finds itself at a key point in its evolution. This is perhaps best emphasised in the moves that have been made this year by the country’s President, Enrique Peùa Nieto to reform the energy sector. This culminated in early September when a bill of amendments calling for the overhaul of the sector was submitted to Mexico’s Congress.

The bill itself is seen as the beginning of a series of changes to federal legislation governing the sector and sets out the basis for a new perspective on its operation.

Rather than being fearful of change,

Marley Mexicana are embracing the prospect of serious reforms being made to the energy industry, recognising that they present the possibility of more opportunities for companies like it that are part funded by foreign capital. With a renewed focus on the industry being driven by government it stands to reason that investment will be made in new power plants and infrastructure within the country, and coupled with the increase in demand for environmentally friendly solutions, this will directly benefit the likes of Marley Mexicana.

For more information about SPX - Marley Mexicana visit: www.spx.com

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University of Kentucky - Lean Systems Program

2013 Lean Users Conference:

Leaning in the right direction The University of Kentucky’s Lean Systems Program Director, Glenn Uminger discusses the recent 2013 Lean Users Conference, shares some of its success stories and reveals his early hopes for next year’s event

written by: Will Daynes research by: Vince Kielty

184 | BE Americas

W

hile the theme of the conference remains mostly the same, the finale of a year’s worth of hard work, what we do hope to do is mature the event and the presentations that take place each year,” states Lean Program Director, Glenn Uminger. The conference he is referring to is the University of Kentucky’s Lean Systems Program, 2013 Users Conference, held on 10-11 September, 2013.

“While this conference is still in its infancy, what with 2013 being only its third year, we are greatly encouraged by the increase in attendance that we have witnessed compared to previous years,” Uminger explains. “Even more importantly is that we continue to see a growing number of strong examples of Lean applications being adopted by businesses from a wide range of industries.”

This increase in examples led to this year’s conference being typified by the sheer volume of rich and meaningful presentations that took place, each of which highlighted the success individuals and businesses have had when it comes to the implementation of Lean processes, and the subsequent results of this.

“There were certainly a number of key themes that consistently appeared during the

Pete Gritton, retired Toyota Human Resources VP and Lean instructor leads a discussion at the 2013 Users Conference

conference,” Uminger highlights, “from the reinforcement of just how critical hands-on, decisive leadership is to Lean transformation to the importance of setting out a clear plan from the offset. Tying in to the latter point was the idea of enduring consistency, whereby companies must realise that adopting Lean is a test of endurance and one that requires flexibility and adaptability. Last, but by no means least, it is about people and aligning the behaviour and performance of people to your business’ plans.”

As one would expect, these themes helped make up the building blocks of some of the more impressive case studies showcased at

“We continue to see a growing number of strong examples of Lean applications being adopted by a wide range of industries” 186 | BE Americas

University of Kentucky - Lean Systems Program

“What Uminger has seen has clearly given him even greater optimism about the future adoption of Lean processes” this year’s conference. Two of the standout examples that immediately come to Uminger’s mind involve the healthcare sector, specifically the efforts of T.J. Samson Community Hospital and Dr William Thornbury.

In the case of T.J. Samson Community Hospital, what it has done is apply Lean thinking to the way in which it delivers patient care, both from a day clinic and overnight care perspective. Recognising the need to expand their operations, the hospital acquired an abandoned former Wal-Mart building and meticulously went about redesigning it into a dedicated clinic.

“What the hospital did,” Uminger says, “is compartmentalise the functions of the clinic to deliver a quick, fluid service to all who visit it, making the process of arriving, receiving treatment and leaving a streamlined one. The success of the clinic has also led to the main hospital itself being able to better clarify its own function, services and processes as well.”

As far as Dr Thornbury, whose brother Neil is in fact COO of T.J. Samson Community Hospital, is concerned, his presentation focused on how he has been using Lean thinking to deliver as much service to as many patients as possible. Dr Thornbury’s answer was to develop and implement a revolutionary e-visit service dubbed Me-Visit. Designed to

strengthen the relationship between patients and their physician, Me-Visit helps patients connect with their medical provider using mobile technology.

“This device that Dr Thornbury has implemented allows his patients to contact him via their mobile device, upon which he can utilise his knowledge of the patient, their history and various symptoms to diagnose and prescribe treatment quickly and efficiently,” Uminger enthuses. “Furthermore,

Brandon Spencer, Kentucky Chick fil A manager, discusses how they have incorporated lean principles to running the kitchen side of things in their stores

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Jenny Cerwinski, Lean Coordinator at T J Samson Community Hospital explaining how consideration of flow, positively affected their new clinic setup

Dr. Neil Thornbury, COO, des lean transition underway at

“Like Lean itself the very adoption of the process is about constant improvement” he can attach all the necessary documents and information about the diagnosis and treatment at the same time. What that essentially means is he is providing the patient with more information and support in a matter of minutes than would be achieved through a face-to-face visit. This is something that really encapsulates what Lean is all about and it is something that he is working

188 | BE Americas

to promote across the country.”

With the 2013 Users Conference only a matter of weeks behind us, thoughts have already turned to 2014’s event, occurring on 30 September and 1 October next year.

“Our early hopes for next year’s event are that we will hear examples from our client companies that show a deeper penetration of Lean thinking and the use of broader

University of Kentucky - Lean Systems Program

scribing the current status of the T J Samson Community Hospital

Ownie McBride, Lean Systems Program instructor answers an attendee’s question at the 2013 Conference

applications that create great success stories,” Uminger reveals. “On top of this of course we would love to see attendance levels continuing to rise and we think a 25 percent increase on this year would be a good target for us to aim for.”

Turning back to the present day and all that Uminger has witnessed in the past several weeks, what he has seen has clearly given him even greater optimism about the future adoption of Lean processes throughout different sectors and industries.

“Like Lean itself,” he concludes, “the very adoption of the process is about constant improvement. In order to help facilitate this we continue to work with both our established and newer client companies

tangibly, joining them out onsite or inviting them to our facility, and what we have seen gives us great encouragement. Long before we think about who will be presenting at next year’s conference we will be helping these companies to develop their implementation and practical application of the process.

That will ultimately mean that next year we can not only look forward to hearing more mature examples from our previous clients, but also about the next generation of Lean success stories.”

For more information about University of Kentucky - Lean Systems Program visit: www.lean.uky.edu

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in non-metallic minerals, including diamonds, was produced in Ontario in 2012

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