Ontario Mineral Exploration Review - Spring 2012 by DEL Communications Inc.

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Company leadership puts Detour Gold on track for Canadaâ&#x20AC;&#x2122;s largest open-pit gold mine Mineral exploration in the heart of the Boreal Forest Red Lake: a golden opportunity | Ontario Far North Act is opposed by First Nations

SCR Mines Technology Inc.

Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5 President and CEO: David Langstaff Publisher: Jason Stefanik

A personal message from the Premier of Ontario

Managing Editor: Katrina Senyk katrina@delcommunications.com

IDNR-TV delivers natural resource industries programming to Canadian viewers

Advertising Sales: Ross James, Dayna Oulion, Mic Paterson

Company leadership puts Detour Gold on track for Canada’s largest open-pit gold mine

Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director: Kathy Cable Layout/Design: Dana Jensen Advertising Art: Julie Weaver

©Copyright 2012. Ontario Mineral Exploration Review. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher. While every effort has been made to ensure the accuracy of the information contained herein and the reliability of the source, the publisher in no way guarantees nor warrants the information and is not responsible for errors, omissions or forwarding looking statements made by advertisers. Articles and advertisements in this publication are not solicitations to buy, hold or sell specific securities; they are for information purposes only. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers or employees. Investors should be aware that risk is associated with any security, strategy or investment and are advised to seek the counsel of a competent investment advisor before making any investment, or utilizing any information contained in this publication. Subscription, advertising and circulation information can be obtained from the publisher. Publications mail agreement #40934510 Return undeliverable Canadian addresses to: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba, Canada R3L 0G5 Email: david@delcommunications.com

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8 11 15 20

Red Lake: a golden opportunity The Constitution Act trumps the Mining Act Ontario Far North Act is opposed by First Nations GTA Resources looking for new discoveries in historic Ontario region

Mineral exploration in the heart of the Boreal Forest

21 22 25

Supplier relations: one supplier’s perspective from the other side of the fence

Rare Earth Metals aggressively searching for rare earth elements in northern Ontario

Undercover investigation

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31 32 34 36 38

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Index to Advertisers

Activation Laboratories Ltd......................................... 23 ALS Minerals............................................................... 11 Assaynet Canada Inc................................................... 34 Breaker Technology Inc............................................... 17 CIM............................................................................. 14 Detour Gold Corporation.........................................Cover Fladgate Exploration Consulting Corporation................ 6 Fordia.......................................................................... 24 Future Buildings............................................................ 4 Geometrics.................................................................. 36 Grandeur Housing Ltd................................................. 12 Hearst Air Service Ltd.................................................. 31 Hertz Equipment Rental.............................................. 23 Industrial Equipment Manufacturing Ltd.................... 10 Innov-X Canada........................................................... 39 Kirkland Lake Gold...................................................... 18 Laframboise Drilling Inc.............................................. 13 Landdrill International................................................ 16

Leisure Farms Construction Ltd................................... 13 Major Drilling Group International Inc........................ 33 Mullen Trucking L.P..................................................... 38 Norex Drilling.............................................................. 26 Norseman Structures.................................................. 19 Norske Drilling............................................................ 13 North Star Drilling Ltd................................................. 22 OBM Equipment Service.............................................. 21 Polymet Resources Inc................................................ 37 Queenston Mining Inc................................................. 38 Rubicon Minerals Corporation..................................... 12 SCR Mines Technology Inc...........................................IFC SGS Minerals Services................................................... 7 Terraquest Airborne Ltd.............................................. 30 Testmark Laboratories Ltd........................................... 29 Tetra Tech WEI Inc........................................................ 28 Wilson Mining Products.............................................. 37 Spring 2012

A PERSONAL MESSAGE FROM THE PREMIER On behalf of the Government of Ontario, I am delighted to extend warm greetings to readers of the Ontario Mineral Exploration Review. Our government is proud of our province’s long and successful mining history — and we remain confident of its promising future. Much of the talent and innovation that define the global mining industry worldwide reside right here in Ontario and the province’s natural abundance of mineral resources makes us an industry leader. This crucial sector employs tens of thousands of people, contributes millions to our economy and holds tremendous potential for our northern, rural and Aboriginal communities. That is why our government has invested significantly in mineral sector activities and has provided significant electricity price rebates for large northern industrial companies. Since 2003, Ontario has seen a 35 per cent increase in the value of mineral production and a 20 per cent increase in jobs. Our gov-

Ontario Mineral Exploration Review

ernment remains committed to ensuring that our mining industry continues to be developed in a sustainable way that benefits the province, respects surrounding communities and strengthens trade with growing international markets. My colleagues and I are confident that Ontario’s mineral industry will continue to be a leader — and we remain committed to working with all industry stakeholders to ensure that it continues to flourish. Please accept my sincere best wishes for much continued success.

Dalton McGuinty Premier

IDNR-TV

delivers natural resource industries programming to Canadian viewers By Lisa Fattori

Left to right: Honourable Victor M. Power, longest-serving mayor of Timmins and recipient of the Order of Canada in 2009; Eric Tetrault, communications officer for Arcelor Mittal; Fernand Trahan, Mayor of Val D'or, Quebec; and Jean Sylvain Lebel, deputy minister, Quebec Ministry of Natural Resources.

A Toronto-based cable television company offers a welcome reprieve from the banality of reality TV and other ho-hum mainstream programming. Established in 2003, In Depth Natural Resources Television (IDNR-TV) hit the airwaves in 2006 to provide viewers with comprehensive coverage of the country’s natural resource industries and the impact of these industries on Canadian society and the economy. The network takes a balanced, unbiased view as it profiles key players, examines issues and presents the reality of natural resources industries and the role that they play in the everyday lives of Canadians. IDNR-TV is the brainchild of Ivor Barr, the station’s producer, who has 35 years experience in the film industry and who saw an opportunity to shine a limelight on the importance of natural resource development. “We are all professional filmmakers and I had made some films about mining,” Barr says. “I realized that this is an industry that has no voice – yet it’s such an important part of the Canadian economy. As far as I know, this is the only specialty channel about natural resources in the world.”

IDNR-TV’s Mining Film Festival trophies.

Available only to viewers in northern Ontario and Quebec, IDNR-TV is currently focused on providing coverage of the mining industry in these provinces. As the station achieves wider carriage and grows, Barr plans to expand programming to include all natural resource industries in regions across the country, including mining, oil and gas, forestry and fisheries. Documentaries, programs about education, health and safety, info-tainment, news, business and current affairs is a sampling of Spring 2012

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Ontario Mineral Exploration Review

IDNR-TV’s extensive coverage, which is helping to break down barriers and dispel preconceived notions about mining companies and how they are impacting the communities where they operate. Interviews with CEOs, analysts, workers and community citizens offer unique perspectives which neither debase nor pay lip service to corporate interests, but rather, deliver a snapshot of modern mining practices and the social responsibility that underlies resource development today in Canada. “We are not a media that is just endorsing industry,” Barr says. “Credibility with viewers is the most important objective for a broadcaster, and we provide editorial that is independent of our sponsorships. “Mainstream television only reports on disasters or the handful of disgruntled people who don’t want a mine in their community. In Abitibi, for example, we’ll talk to the six or seven unhappy people, but we’ll also represent the position of the other 3,794 residents who are happy with the new arena, schools and hospital in their community, which are there as a result of the economic prosperity that the local mine has brought to the area.” Many Canadians give little thought to the raw materials that go into the consumer products that enhance their quality of life. People want their cars, electronics and gadgetry, but have a “not in my backyard” aversion to natural resource development. IDNR-TV bridges this gap with informative programs that encourage debate, discussion and understanding. “This programming works to show people that natural resources have to be harvested responsibly in order to make the consumer goods that are integral to people’s lifestyles,” says Peter McBride, manager of

IDNR-TV mobile truck at mining show in Quebec City.

communications, Ontario Mining Association. “IDNR-TV strives to correct this disconnect that many people have, particularly in urban areas.” IDNR-TV also hosts an annual Mining Film Festival at the Cinema du Parc in Montreal. The festival is a platform to raise an awareness of the importance of the industry, through the presentation of films. It is also an occasion to pay homage to the outstanding contributions made by community leaders and members of industry, who are presented with certificates of recognition and Coup de Coeur trophies. The theme for the November 2012 festival is “Women in Mining,” and will showcase women who have made an important contribution to the industry and mining communities. As an independent, specialized cable channel, it is difficult for IDNR-TV to expand its network and convince major carriers to give space to a television sta-

IDNR-TV’s first day of broadcasting.

tion that is dedicated to natural resources. “Natural resources are the most disliked of all sectors, so it’s a challenge to get on the dial,” Barr says. “We would like to include other natural resources in addition to mining. Other industries support their own dedicated TV stations, and we are looking

for the same interest by groups and associations in natural resources. I would encourage companies and organizations to contact their cable and satellite companies to request IDNR-TV. We have a very large following, but need this support in order to grow.”

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Spring 2012

Company leadership puts Detour Gold on track for Canada’s

largest open-pit gold mine

View of processing plant.

By Michael Schwartz Canadian explorer and developer Detour Gold is bringing Canada’s largest pure gold play toward production by early 2013. To achieve this aim, Detour Gold has drawn on experience and leadership qualities well above those normally expected of a mining enterprise. The Detour Lake gold project in northeastern Ontario has open pit gold reserves of 15.6 million ounces. Average annual gold production is expected to be around 650,000 ounces at cash operating costs of C$543/oz over a mine life of over 20 years. Detour Gold’s founder and president/ CEO, Gerald Panneton, has nearly 30 years in mineral exploration and development and includes a 12-year spell with Barrick Gold, which naturally developed and shaped his technical and leadership skills. His key role in Barrick's acquisition of Pangea Goldfields greatly helped him when building first-class teams. “Two gold projects in Tanzania I was exposed to gave me a wide range of skill-sets, from exploration

Ontario Mineral Exploration Review

all the way to construction, each of which allowed me to learn the in-and-outs of how to build a mine – the most important aspect was to find the right people,” he says. Panneton is forthright: “I am proud of Detour Gold’s successes. I put my eyes on the project in 2006. From acquisition to now, we have been able to deliver time after time.” With the company fully financed and the mine half built, the company is now focusing on “operation readiness.” Gold production is scheduled to start in the first quarter of 2013 and Detour Gold’s senior team focus is to make it happen. The Right People Detour Gold’s senior vice-president capital projects is Pierre Beaudoin, who counts on 25 years of mineral processing experience. For Barrick, he led economic studies at both Cerro Casale copper-gold project and Donlin Creek gold project and boosted

process plant productivity worldwide, thus contributing to his leadership abilities. “I have a solid network, having worked on many mining operations worldwide,” Beaudoin says, explaining how he has assembled the expertise and experience for Detour Gold. “It helps you get the flavour of who’s out there. You need to know and recognize talented people.” The indication that Detour Gold has been attracting staff of the right calibre comes from director of operations Drew Anwyll. “My roles in the project are not hands-on but they are about operational readiness. Fourteen out of the 18 senior managers we need are now in place,” Anwyll says. Most of Anwyll’s career has been with two giants, Barrick and Placer Dome. His knowledge ranges through start-up, construction and project management – factors that intrigued Detour Gold. “The company pursued me for a year before I joined,” he smiles.

Anwyll welcomes the politics-free environment at Detour Gold, as well as the opportunity to apply the leadership qualities he built up with the majors, enhancing productivity and managing major projects. “Here, the executive team is ‘stand-out.’ This is the best company I’ve worked for,” he enthuses. Panneton is confident that his executives will continue to engage personnel attracted by the project. “We are growing fast – now at nearly 180 employees – and we are confident in our abilities to put together very good teams. We will have 500 employees during our operations,” Panneton declares. View of primary crusher and conveyor house.

Construction of permanent camp.

A Big Mine but a Different Mind-set? One key quality, among the many demanded of these senior executives, is how they have adapted from working for some of the largest players in global mining to a small company with a big project that will begin production in early next year. Beaudoin, who has been with Detour Gold for two years, explains how he has dealt with and benefited from his down-sizing. “Project work is tough but I have a great satisfaction with my team – a smaller team with a clear focus. There is much more ‘fun’ working with smaller companies; we are all very close.”

Overview of Detour’s entire complex: the processing plant is visible in the background; mine truck shop/truck wash facility in foreground.

Interior of Detour’s plant building.

Spring 2012

CAT795F with hydraulic shovel (removal of overburden in pit). It takes exceptional talent to build a mine this size. Left to right: senior vice-president of capital projects Pierre Beaudoin, Detour Gold’s founder and president/CEO Gerald Panneton, and director of operations Drew Anwyll discuss business in front of construction of the leach tanks.

Panneton, in turn, praises the team he has assembled. “Pierre came in within the last five months of the feasibility study and has added great value in the design of the mine. This has been a key element in successfully moving the project toward construction.” “You need to have a solid project to attract people,” Beaudoin states. “Our project is robust; we had it reviewed by worldwide experts when I joined. We definitely have a world-class asset being built by a junior company with top-notch senior executives.” Anwyll reinforces the message that a project must attract in its own right, and turns the focus to the project’s location. “Northern Ontario has a long mining history. Our focus is to hire talent in the region and include our Aboriginal partners. We have hit a sweet spot – people want Detour’s leach tanks (20 in total).

Ontario Mineral Exploration Review

to work for us,” he says. “It’s all about people and we do have the best! All of us at Detour Gold, we look forward to pouring our first gold bar,” Panneton concludes.

Red Lake:

a golden opportunity Motivated by the high value of gold, Red Lake’s mineral production and exploration firms are working feverishly towards the next “big” find. Goldcorp Red Lake Gold Mines, Rubicon Minerals Corporation, and Claude Resources Inc. are examples of such firms looking to leverage results gathered from advanced exploration projects and turn them into exciting and profitable production initiatives. Located in one of the world’s most prolific gold districts, Red Lake is a top producer for Goldcorp, yielding in excess of 650,000 ounces annually at low production costs. Recent investments in infrastructure have enabled Goldcorp Red Lake Gold Mines to maintain many years of sustainable longterm production. The rehabilitation of its Cochenour Willans mine site is a recent example of infrastructure investment. The Bruce Channel Discovery (BCD) near the Cochenour project secures control of eight kilometres of strike length in the heart of the Red Lake trend. Development of Goldcorp’s Cochenour project is rapidly advancing toward production now forecasted for mid-2014. Rubicon Minerals Corporation has escalated its advanced underground exploration program and shaft extension at the Phoenix Gold Project. Their aggressive program features over 250,000 metres of drilling to date, with another 69,000 metres planned for 2012. During 2010-11, significant milestones were achieved in the F2 Zone including: headframe extension of 50 feet; installation of a new hoist capable of reaching a depth of 1,500 metres; doubling the shaft depth to 300 metres, thus allowing development suitable for further underground exploration with a further doubling to 600 metres planned this year; completion of a second egress required for safety and future development; and completion and processing of bulk samples. Rubicon is targeting F2

Zone production in the fourth quarter of 2013. In the past, Madsen Mine was the thirdlargest gold producer in the Red Lake camp behind Campbell and Dickenson Mines. Madsen produced 2.45 million ounces of gold over its 38-year mine life. Claude Resources Inc. is continuing to proceed with exploration activities at its 100 per cent owned Madsen Project in Red Lake. Based

on encouraging results, the company has approved a 29,000-metre underground and surface-based drill program for 2012. The program will include two underground rigs and one surface rig targeting completion of 40 to 50 holes. All this activity is expected to result in a considerable population increase over the next 20 years. Red Lake is preparing for this unprecedented growth by proactively plan-

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Spring 2012

Red Lake District – Gold Production Data Notes: (1) Includes total production from the Red Lake complex from January 1, 2006, and production from the Campbell complex subsequent to May 12, 2006, the date of acquisition. (2) Includes production figures under Placer Dome (CLA) Ltd., to May 12, 2006. (3) For 1997, 1998 and 1999, no production due to strike by unionized employees. (4) From 1970, includes production from Robin Red Lake. (5) Includes clean up of ore and materials from the mine site. (6) Historic grade, actual grade for 1999 was 0.14 ounce per ton gold. (7) Includes production from Annco and Wilmar properties. (8) Continuous production 1930 to 1941; includes 268 ounces recovered from clean up in 1957. (9) The ore mined at Howey, before sorting, totalled 5,158,376 tons. The average production from runof-mine ore was therefore 0.0817 ounce per ton gold. (10) Not included in total production figure. N/A Data not available.

Mine

Year of Production

Red Lake Gold Mines Campbell Mine Goldcorp (Dickenson) Madsen Cochenour–Willans McKenzie Red Lake Howey Hasaga Starratt Olsen Berens River Uchi Jason (Argosy) H.G. Young Sachigo River McMarmac Gold Eagle Jackson Manion Red Lake Gold Shore Hudson Patricia Buffalo Abino Lake Rowan Mount Jamie Kostynuk Brothers Bobjo Bathurst Red Summit Sol d’Or McFinley

2006–present(1) 1949–2006(2) 1948–2006(3) 1938–1976, 1997(5)–1999 1939–1971 1935–1966 1930–1941, 1957(8) 1938–1952 1948–1956 1939–1948 1939–1943 1934–1952 1960–1963 1938–1941 1940–1948 1937–1941 1934–1940 1936–1938 1936–1937 1981–1982 1985–1986 1986–1988 1976 1963–1966 1929 1927–1937 1935–1936 1933–1936 1987 Total:

Ore Milled (Short Tons)

1 448 240 19 944 241 9 606 894 8 678 143 2 311 165 2 353 833 4 630 779 1 515 282 907 813 560 607 757 074 276 573 288 179 46 457 152 978 180 095 105 357 86 333 11 228 31 986 2733 13 023 972 577 N/A 562 591 458 N/A 53 912 173

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Gold Poduced Troy Ounces

1 293 490 11 216 443 5 962 948 2 452 388 1 244 279 651 156 421 592 218 213 163 990 157 341 114 467 101 875 55 244 52 560 45 246 40 204 27 142 21 100 1857 1656 1397 1298 377 1126 362(10) 307 277 258 N/A 24 248 231

Ounces per Ton

0.893 0.564 0.621(4) 0.283(6) 0.538(7) 0.277 0.091(9) 0.144 0.181 0.281 0.151 0.368 0.192 1.131 0.296 0.223 0.258 0.244 0.165 0.052 0.511 0.100 0.388 1.951 N/A 0.546 0.469 0.563 N/A 0.450

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Ontario Mineral Exploration Review

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ning residential, commercial and industrial developments. Red Lake’s new 20-acre, fully serviced highway commercial area has already generated tremendous interest from a wide variety of investors. Within this development, a new national coffee franchise opened for business in November 2011. As well, a new motel is currently under construction and is scheduled to open later in 2012. The Municipality has also prepared the Red Lake Airport for an increase in air-

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Spring 2012

New hotel under construction in Red Lake.

The Municipality of Red Lake will be exhibiting at the 2012 Prospectors & Developers Association of Canada International Convention from March 4th-7th in Toronto, Ontario. Please visit us at Booth 0752. craft, passenger and cargo traffic; increased airport use will be facilitated by the new larger Airport Terminal Building (ATB) completed in 2011. Concession, retail and airline counter lease/space opportunities exist within the ATB, while the associated Airport Business Park has room for aviationrelated businesses. Red Lake’s current brisk activity and bright future provide potential investors, businesses and industries “golden” opportunities! For more information, please contact Bill Greenway, economic development officer, by phone: (807) 735-2096 extension 238 or email: bgreenway@redlake.ca.

Ontario Mineral Exploration Review

The Constitution Act trumps the Mining Act

By J. Douglas Shanks, Cheadles LLP

The case of Wahgoshig First Nation v. Ontario [2012] O.J. No. 22 deals with restrictions in mining exploration by reason of failure to consult and accommodate aboriginal interests. In this case, the Wahgoshig First Nation (“Wahgoshig”) was successful in obtaining an interim injunction against Solid Gold Resources Corp. (“Solid Gold”). The decision of Justice Brown was released January 3, 2012 granting the injunction. Justice Brown granted a temporary injunction preventing Solid Gold from engaging in any activities relating to mineral exploration. The order is not a permanent injunction preventing any exploration. The main facts of this case are basically as follows. Wahgoshig asserted aboriginal and/or treaty rights throughout its traditional territory. The traditional territory also had reserve lands situated within that territory on the south shore of Lake Abitibi. Solid Gold staked its mining claims from November of 2007 through at least 2010. In July of 2009, the Crown advised Solid Gold that it should contact Wahgoshig to consult regarding its intended mineral exploration and offered to facilitate the process. No consultation occurred before Solid Gold starting drilling in the spring of 2011. Wahgoshig learned of the drilling activity in the spring of 2011 and attempted to contact Solid Gold to consult, but no meaningful consultation occurred. In early November of 2011, the Crown also advised Solid Gold in writing that consultation must occur, but to no avail. Justice Brown in her decision recognized the potential conflict between the Mining Act of Ontario and Section 35 of the Constitution Act, 1982. She referred to the fact

that the Ontario Government amended the Mining Act in the fall of 2009 and that amendment indicated the purpose of the Mining Act was to encourage development of mineral resources, but “in a manner consistent with the recognition and affirmation of existing aboriginal and treaty rights in Section 35 of the Constitution Act, 1982, including the duty to consult and to minimize the impact of these activities on public health and safety and the environment.” Justice Brown dealt with the duty to consult. She found that while the ultimate legal responsibility for fulfilment of the duty to consult resides in the Crown, “its operational aspects can be and often are delegated to those third parties directly involved in the day-to-day resource development projects, such as Solid Gold.” Justice Brown found that “the lost opportunity to be meaningfully consulted and obtain accommodation for impacts on treaty and aboriginal rights constitutes irreparable harm.” As well, the consultation to have any meaning must take place before any activity begins and not afterwards. This duty to consult arises when the Crown has knowledge of a potential aboriginal right that may be affected. This duty to consult also applies to surrendered land. In other words, the duty to consult does not just apply to reserve lands, but to traditional lands of the First Nation. With respect to the issue of whether or not Solid Gold had failed to consult with the First Nation, Justice Brown found on the evidence that there was an indication that Solid Gold had made a concerted willful effort not to consult, at least until after its flow through share monies for 2011 had been exhausted. It is interesting to note Justice Brown found that apparently Solid Gold failed to meet the “industry standards” for

responsible exploration as set forth by the Prospectors and Developers Association of Canada with respect to First Nations’ engagement. Exploration companies would be well advised to make sure that they have reviewed these industry standards so that at a minimum, they will be able to show compliance with those standards. In the end, Justice Brown was satisfied that without meaningful consultation and accommodation regarding the exploration activities of Solid Gold, which included good-faith dialogue and information sharing between the First Nation and Solid Gold, facilitated by the presence of the Crown, there is a significant possibility of harm to Wahgoshig’s aboriginal and treaty rights. In coming to its decision, the Court had to balance who would be suffering the greater harm. Was it going to be the First Nation that didn’t have any meaningful consultation and accommodation, or the inability of Solid Gold to proceed with its drilling that could place it in serious financial jeopardy, and which could put it out of business? The Court found that the balance of convenience favours the granting of an injunction in favour of the First Nation, with terms and conditions being imposed. The order of Justice Brown was as follows: 1. Solid Gold was prevented from carrying on further exploration on the mining claims for 120 days from the date of the decision. 2. During the 120 days, Solid Gold, Wahgoshig and the province were to enter into a process of good faith, meaningful consultation and accommodation regarding any future activity on the mining claims. Spring 2012

The Mining Act of Ontario and regulations … coming into effect are going to provide for a new system of exploration, planning and permitting that is targeted for taking place starting in April of 2012. This new system is intended to have a “graduated regulatory scheme” that defines exploration activities according to their potential impact.

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3. If a facilitator was needed, then an independent third-party was to be used with the cost being shared by Solid Gold and the Province. 4. If the consultation and accommodation process was not productive (and this was not really clarified as to what that term meant), then Wahgoshig was entitled to seek an extension of the injunction. While it can be seen that Justice Brown was trying to fashion a remedy with terms and conditions that would promote consultation and accommodation, whether or not there was anything “productive” that came out of the consultation and accommodation may be a difficult question. The Mining Act of Ontario was substantially amended in October of 2009. Some of the amendments came into effect right away, while other changes are being phased in over a period of time through sections of the Act that are not yet proclaimed in force and new or amended regulations and policies. The Mining Act and regulations that are going to be coming into effect are going to provide for a new system of exploration, planning and permitting that is targeted for taking place starting in April of 2012. This new system is intended to have a “graduated regulatory scheme” that defines exploration activities according to their potential impact. Exploration plans would be needed before undertaking certain activities and exploration permits would be needed for activities that have a larger impact on the environment. The Ministry has indicated that it is trying to build more aboriginal involvement in Ontario’s mineral exploration activities. The Ministry has indicated that new applicants and those renewing their prospector’s licenses in the future will be required to complete a Mining Act awareness program. This is proposed to come into effect in June of 2012. Sections 78 through 78.6 of the Mining Act are sections that are not yet proclaimed in force, but are intended to be proclaimed in the future. These sections deal with some of the following issues. The Minister may appoint directors of exploration. People who want to carry out

prescribed activities on a mining claim, for

munities that may be affected by the explo-

for greater certainty as to what is required

example, will be required to submit explo-

ration. The decision of a director of explora-

to constitute consultation and accommoda-

ration plans in accordance with prescribed

tion may be disputed and the director asked

tion of First Nation interests in their tradi-

requirements (i.e., see the regulations that

to reconsider their decision. If a decision is

tional lands. The Ministry of Northern De-

are going to be coming) including any ab-

being disputed, then no one may carry out

velopment and Mines is proceeding to take

original consultation that may be required

any activity that is the subject of a decision

steps to try and address some of these issues

by the regulations. Any activities that are

until there is a final determination of that

through the changes that have been made

then carried out must be in accordance with

under the Act. There are teeth to this sec-

to the Mining Act in 2009 and with the pro-

that exploration plan. If an exploration plan

tion, since if it is found that a prescribed

posed regulations and yet to be enforced

includes an exploration activity that is de-

activity is being carried out in contraven-

sections of the amended Mining Act. Hope-

scribed in the regulations, then there must

tion of the Act or the regulations relating

fully once the new sections of the Mining

also be an exploration permit obtained.

to exploration plans or exploration permits,

Act and the new regulations that are yet to

Once again, certain activities that will be

then there can be a cease and desist order

be determined are put into place, then is-

described in the regulations cannot take

issued by the director, the exploration per-

sues such as those raised by the Wahgoshig

place unless there is an issued exploration

mit can be cancelled and it is an offence to

and Solid Gold case will be a thing of the

permit.

continue an activity or cause an activity to

past. However, that is yet to be determined.

A director of exploration, in deciding

be continued in contravention of an order.

What are some of the takeaways that

whether or not to issue a permit, must con-

In addition to any other penalties imposed

should be realized by both First Nations and

sider certain things. One of those is wheth-

under the Act, there can be a fine of up to

mining corporations as a result of this deci-

er aboriginal consultation has occurred as

$2,500.00 for each day the activity is contin-

sion by Justice Brown?

required by the regulations, and this may

ued in contravention of the order.

1. Failure to consult and accommodate in

include consideration of any arrangements

As can be seen by the Wahgoshig and

traditional aboriginal lands may end up

that have been made with aboriginal com-

Solid Gold case, there is a substantial need

in preventing the exploration from pro-

Spring 2012

ceeding until such time as the consulta-

any failure to consult.

tion (in good faith) has proceeded. The

3. Exploration may be prevented for 120

consent of the First Nation does not ap-

days. During that time period, a process

pear to be required, although this was

of good faith, meaningful consultation

something that was conceded by counsel

and accommodation regarding any fu-

in argument and not part of the decision

ture activity on the mining claims may

of Justice Brown. The Constitution Act

be required. If the consultation process

trumps the Mining Act of Ontario.

requires an independent third-party fa-

2. The Crown can delegate its duty to con-

cilitator, then the costs would be borne

sult to industry participants, although

equally by the Province and the explora-

the Crown is ultimately responsible for

tion company. If the consultation and ac-

commodation process is not productive, then there could be an extension of the injunction. 4. First Nations and mining companies will need to follow closely the changes in the “modernized Mining Act” that are proposed by the Province of Ontario. Section 78 of the Mining Act has not been proclaimed in force, but exploration plans and permits from a director of exploration and confirmation of aboriginal consultation are going to be required in the future for exploration to take place. There is to be a graduated regulatory scheme setting rules for early exploration activities which include consultation with First Nations and Métis communities. There will be measures protecting areas which meet the criteria as sites of aboriginal cultural significance from the impacts of mineral exploration. J. DOUGLAS SHANKS, CHEADLES LLP Barristers and Solicitors #2000-715 Hewitson Street P.O. Box 10429 Thunder Bay, ON P7B 6T9 Telephone: (807)622-6821 Facsimile: (807)623-3892 Email: shanksj@cheadles.com Website: www.cheadles.com About the Author: Douglas Shanks is engaged in corporate and commercial law and has been retained regularly in transactions involving the purchase and sale of businesses, incorporations, estates and succession planning. Doug assists start-up technology companies with corporate structures, intellectual property protection, venture capital and angel investor financing and technology licensing agreements. He advises on corporate governance issues including shareholders’ agreements and option agreements for directors, officers and employees, joint ventures, shareholder disputes, general business operations and other commercial transactions. Doug often represents financial institutions with respect to financing and secured loan transactions. He has been involved

Ontario Mineral Exploration Review

in purchase, sale and land development transactions. With his corporate practice, Doug provides advice in general corporate areas including amalgamations and incorporation of companies. He often prepares and advises commercial contracts, partnership agreements, joint ventures, co-ownership agreements, and share and asset purchase/ sale agreements. In aboriginal law, Doug’s work has focused on acting for First Nations clients in negotiations or in assisting non-aboriginal clients who want to develop positive, working relationships with aboriginal peoples. As part of his aboriginal and commercial practices, Doug has advised First Nations people and companies involved in lending to First Nations. In the area of real estate, Doug advises on the purchase, sale and development of properties and, all forms of lease agreements. He frequently represents financial institutions and businesses in connection with loan transactions secured against real property and other assets. He assists clients with all types of land development applications including official plan amendments, zoning changes, site plan approvals, subdivisions, severance consents and minor variances. Doug has appeared at Ontario Municipal Board hearings and before Committees of Adjustment. Doug’s intellectual property law practice includes advising clients on matters relating to patents, trademarks, copyright, and industrial designs. He counsels clients on invention patentability and trade mark

registrability, and assists clients in the com-

censing, franchising, and advising on pri-

mercialization of their intellectual property

vacy law compliance.

through joint ventures and licensing.

Doug advises clients in real estate and

Doug has assisted clients in acquiring,

condominium law, including developers,

protecting, exploiting and enforcing intel-

buyers, sellers and condominium corpo-

lectual property rights, including educa-

rations on issues of corporate governance

tional institutions, high-technology firms,

and operations. He is the president of

clients in the telecommunications industry,

the Canadian Condominium Institute -

as well as the charitable and not-for-profit

Northwestern Ontario Chapter, and has

sector.

done presentations at its seminars on con-

Doug’s practice includes trade-mark li-

dominium matters.

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Ontario Far North Act is opposed by First Nations

By Stan Sudol Ontario is the largest mineral producer in Canada, largely due to the geological riches of its vast northern territory above the French and Mattawa rivers that is equal in size to the United Kingdom, Germany, Greece and Ireland combined. However, one of the most contentious issues in this region is the much detested Far North Act legislated in September 2010 by Liberal Premier McGuinty. It is praised by the south’s many well-funded and powerful green NGOs, but cuts off half of the Far North to resource development. In a December 2011 public editorial, Stan Beardy, Grand Chief Nishnawbe Aski Nation (NAN) said, “The heart of First Nations’ ob-

America; or Abitibi Greenstone Belt, the source of Canada’s greatest gold mining districts; or another Ring of Fire, whose mineral treasures we have just begun to discover? This is economic madness – especially at a time of global economic uncertainty, massive provincial deficits and fears about significant cutbacks to unsustainable social programs and services. The vast majority of other Aboriginal communities in northern Ontario welcome the benefits and jobs from mining. In fact, there are almost 200 types of economic partnership agreements between First Nations and senior miners or junior explora-

The mining industry is the largest private-sector employer of Aboriginal people in the country, making up about 7.5 per cent of the workforce. jections to the [Far North] act is the unilateral imposition of an interconnected protected area of at least 225,000 square kilometres (about 21 per cent of Ontario). This infringes on First Nations’ aboriginal and treaty rights as protected in the Canada Constitution Act, 1982.” NAN is a political organization representing 49 First Nation communities across Treaty 9 and Treaty 5 areas of northern Ontario. The protected areas are roughly twice the size of southern Ontario and will significantly reduce the potential for mineral develolpment. Is the Far North Act’s parks agenda inherently “Anti-Aboriginal” ensuring communities stay impoverished? We have no idea of the total geological potential of the Far North and at the present time there are no plans or enough money to do a thorough geo-science assessment of that vast land. What if there is another Sudbury Basin, the richest mining district in North

Ontario Mineral Exploration Review

tion companies across Canada and about 90 of those accords are in the province’s North. The mining industry is the largest privatesector employer of Aboriginal people in the country, making up about 7.5 per cent of the workforce. Last summer, a visit by Prime Minister Harper to Agnico-Eagle’s Meadowbank gold mine near Baker Lake, Nunavut highlighted the enormous benefits of mining for the local Inuit. Approximately 38 per cent of the 1,100 employed are Inuit from the Kivalliq Region. Agnico-Eagle has implemented extensive internal training programs to help Inuit advance in the workforce by learning new skills. A February 2011 study on the north by the Conference Board of Canada reported that the gross domestic product of Nunavut increased almost 12 per cent, largely due to the economic impact of the Meadowbank mine.

Over the past 12 years, the social influence of the Northwest Territories’ three diamond mines have included almost $4 billion in aboriginal business revenues, increased First Nations secondary school enrolment – from 36 to 56 per cent – and a 50 per cent reduction of Aboriginal recipients on social assistance. About 54 per cent of the workforce at Vale’s Voisey's Bay, Newfoundland nickel mine is from surrounding First Nations communities and almost 80 per cent of the mine’s annual operating expenditures are with aboriginal businesses. The mining sector is working hard to consult and make agreements that ensure Aboriginal communities get maximum benefits in the form of jobs, business and royalties from the sustainable development of their traditional territories and adhearing to the UN Declaration on the Rights of Indigenous Peoples commitment to “prior and informed consent.” Conversely, the Liberal-left McGuinty government and their environmental allies force unwanted parks on First Nations communities with a “condescending” attitude that was practiced by most governments in this country well into the last century. If southern Ontario’s political and media elites as well as the general public are truly concerned about the impoverished living conditions, high teenage suicide rates, and hopelessness in the North’s Aboriginal communities, then the Far North Act must be significantly changed to allow mineral exploration and sustainable mine development to flourish. This is the only way to both alleviate native poverty and give hope to the growing numbers of Aboriginal youth. Stan Sudol is a Toronto-based communications consultant and columnist who blogs at www.republicofmining.com.

GTA Resources

looking for new discoveries in historic Ontario region By Leonard Melman One of the oldest maxims in mining is to search for a new mine in the vicinity of an old mine site. Canadian junior miner GTA Resources and Mining Inc. (TSX-V; GTA), based in Burlington, is following that strategy, having recently acquired interests in two Ontario projects in geologic regions where past and present production has been extensive and where present prospecting work has produced encouraging results. GTA's two projects are the Northshore Property, located in the Hemlo-Schreiber Greenstone Belt of northwestern Ontario near the town of Schreiber and the Auden Property, located near Hearst in an area which regional government airborne magnetic surveys suggest is an extension of the famed Beardmore-Geraldton Greenstone Belt. Northshore, which includes five patented and two unpatented claims covering 3.3 square kilometres, is only 70 kilometres distant from the Hemlo Deposit, which has seen over 23 million ounces Au produced since the early 1980s. Northshore is also only 12 kilometres south of the formerly productive Winston Lake copper-zinc mine. The property's mining history dates back more than a century – to 1898, when it was first discovered by Peter McKellar. During the subsequent 37 years, thirteen veins were identified and there was active production from 1935 to 1937 when 2,411 ounces Au and 226 ounces Ag were produced from the Main Vein. Following years of inactivity at Northshore, Noranda resumed exploration and in 1992, they identified the "Afric Zone" and calculated a preliminary reserve estimate of 2,000,000 tonnes grading 2.2 g/t Au containing approximately 135,000 ounces. Exploration work at that time included four drill holes where results included 3.5 g/t Au over 42.4 metres, 2.4 g/t Au over 11.6 metres

and 1.3 g/t Au over 64.0 metres. (The term 'preliminary reserve' is not approved by CIM and the historic estimate is not compliant with present NI 43-101 requirements.) In June 2011, GTA entered into an option agreement with Balmoral Resources to acquire up to a 70 per cent interest at Northshore, and immediately carried out a chip sampling program at two veins, the Caly and Audney, which are part of the Afric Zone. A total of 55 chip samples were collected and sent for assay, and all samples returned significant results with values ranging from 1.10 g/t Au up to 798.82 g/t Au. Company geologists reported that over 78 per cent of samples returned values greater than 10.0 g/t Au and over half returned values greater than 25.0 g/t Au. Recent exploration has discovered a third vein system named "Caly North", also part of the historic Afric Zone. The company recently completed a 12hole drill program totalling 1,035 metres, which was designed to test the shallow, high-grade potential of the Audney and/or Caly veins. Visible gold mineralization was observed in nine of the twelve holes and assay results are pending, to be released as they become available.

Future plans for Northshore include further drilling at Audney and Caly, additional drilling to evaluate the broad Afric Zone and identification of significant gold occurrences to be evaluated. GTA owns a 100 per cent interest in the Auden Property, which consists of 1,596 claim units covering 63,000 contiguous acres running for over 80 kilometres, just 19 kilometres off the Trans-Canada Highway west of Hearst. The area is located in the Archaen Greenstone Belt, a poorly understood region (which is the eastern extension of the Geraldton/Beardmore Greenstone Belt) that has seen historic production of over four million ounces of gold. Airborne surveys show numerous anomalies and historic drilling, dating back to the 1970s, confirms gold mineralization at Auden. While GTA's primary focus is on Northshore, Auden appears to offer potential for future resource development. GTA's management team is led by CEO Peter Clausi, CFO Brian Crawford and VOP Exploration Robert Duess. Further information may be obtained by visiting the company's website at www.gtaresources.com.

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Undercover investigation By Dale Sutherland, Activation Laboratories Ltd.

Mineral exploration today involves the use of the latest technology to discover mineral targets under cover. In this industry success is a word associated with embracing new and proven methods. Soil Gas Hydrocarbons (SGH) is a leading technology with unique capabilities that can provide the critical edge, especially to those companies that have to deal with claims in difficult terrain. This geochemistry confronts the problem of terrain with Nano-scale forensic science. It is an accepted fact today that bacteria are ubiquitous and are feeding on deposits even at great depths. â&#x20AC;&#x153;You are what you eatâ&#x20AC;? applies to these biofilms that are in direct contact with mineralization. Independent laboratory experiments (Dr. Gordon

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Southam, University of Western Ontario, 2009) have shown that bacteria are able to feed on a wide variety of mineralization. Observations concluded that in the death phase, bacteria decompose and the hydrocarbons they have synthesized retain a signature of the specific food type or ore. These hydrocarbons subsequently migrate vertical through the overburden. The SGH geochemistry is a forensic method of identification able to detect 162 hydrocarbons in the C5 to C17 carbon range that define the signatures related to the type of mineralization consumed. The hydrocarbon signatures that have been defined provide both an identification and vectoring capability to locate copper, gold, nickel, uranium,

SEDEX, IOCG, Cu-Ni-PGE, VMS, Cu-AuPorphyry, lithium pegmatite, polymetallic and kimberlite that reside as shallow deposits to those at over 750 metres in depth. Petroleum-based signatures for coal, gas, conventional and unconventional oil plays have also been defined. SGH is able to detect these signatures from the analysis of surveys of near-surface sample media at a reporting limit of one nanogram per kilogram. Sampling crews often have to deal with both adverse field conditions (Figure 1) as well as previously trying to obtain the required sample media in terms of substrate and specific depth that is either time consuming, or not possible, which results in surveys with missing pieces

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www.northstardrilling.com 22

Ontario Mineral Exploration Review

of the puzzle. SGH is unique as it is user friendly and has a distinct advantage in the field over other geochemistries as a variety of convenient sample types can be taken that are coated with the hydrocarbons that migrate through the overburden from the target mineralization. Suitable sample media includes soil, till, sand, lake-bottom sediment, peat, humus, and snow. These samples provide a snap-shot of the occurrence of the hydrocarbon signatures and the state of the Redox conditions in the overburden. The detection of Redox conditions can often vector to reduced features that may represent mineralization. Redox cells or “reduced chimneys” over ore bodies and other reduced features can have very strong redox gradients both horizontally and vertically. These chemical processes occur throughout the

entire sequence of cover materials to the surface and results in the development of an electrochemical cell (Dr. Stewart Hamilton, OGS, 2009). The OGS has stated that SGH is an “excellent Redox Cell locator”. As a geochemical tool that locates and vectors to Redox conditions, it is also able to discriminate between mineralized or barren conductors and magnetic targets using the hydrocarbon signature detected. SGH has been independently tested in many research programs administered by CAMIRO, B.C. Geoscience, USGS, AMIRA and CSIRO and has been successful in each study. These studies and others have tested SGH with samples from extreme terrains that include arid soils such as found in Mali, West Africa (Figure 2), to the chilling permafrost regions in Nunavut (Figure 3). The benefits from using the SGH geochemistry are: • SGH is well known for its success in areas of difficult or disturbed terrain and/or

Figure 1: This long auger, to take deep samples, is not required in SGH surveys.

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complex overburden. It’s easy sampling requirements results in more rapid acquisition of samples directly reducing field sampling costs; • SGH is a Redox cell locator that is also able to discriminate between barren and ore bearing targets; • The unique hydrocarbon signatures are detected as clear symmetrical anomalies; • The occurrence of specific hydrocarbon classes defines a forensic signature that is able to identify the type of target mineralization or play at depth; • The ability to vector to mineralization, like the “bulls-eye” on a dartboard (Figure 4), provides more confident drill targets further reducing the drilling costs of exploration programs. Over 90 per cent of the mining companies that investigate SGH with orientation studies over known targets have subsequently submitted exploration surveys. Through the observations of nearly 1,000 SGH surveys in the 16 years since inception, the robustness of this geochemistry has enabled the discovery of new resources in greenfield applications and has also delineated mineralized extensions in brownfield surveys.

Figure 2: Gold target – Mali, West Africa.

Figure 3: Silver target – Nunavut, Canada.

Figure 4: Breccia pipe uranium target – Northern Arizona, U.S.A.

Dale Sutherland, Activation Laboratories Ltd. 1336 Sandhill Drive, Ancaster, Ontario, Canada L9G 4V5 dalesutherland@actlabsint.com

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Ontario Mineral Exploration Review

Mineral exploration in the heart of

the Boreal Forest

With over 50 active mining exploration projects in the Kenora Mining Division, the future outlook for Dryden, Ontario appears golden. The Dryden Development Corporation (DDC) is positioning itself to become Ontario’s northwest mining service centre. Located on the Trans Canada Highway #17 with easy access and north-south links to markets in the U.S.A. via Hwy #502, the Greater Dryden Area (Machin to Ignace) is located in the heart of Sunset Country. Our communities are situated approximately half-way between Thunder Bay, Ontario and Winnipeg, Manitoba and are connected by wireless Internet, highway, rail and air. The key role of the DDC is to facilitate investment and employment opportunities through a variety of methods which include affordable taxes, fees and well-established infrastructure and services. Building cooperative relationships with First Nations, neighbouring communities, local suppliers and attracting new businesses is a priority to meet exploration companies’ requirements for on-time delivery, quality materials, equipment and services. The DDC believes developing local capacity to support and sustain exploration companies is necessary to achieve long-term sustainable development.

In addition, the DDC is working with government, educators and contractors to build the human resource skills required for available positions. In October 2011 the DDC, in partnership with Eagle Lake First Nation, successfully hosted a Mining Sector Expansion Symposium utilizing the services of gck Consulting. The goal of the project was to prepare the Dryden area to take full advantage of the current and future mining activities in the region. A survey and information sessions were designed to present all information necessary for local businesses, First Nations and residents to realize the employment and business opportunities associated with various stages of mine development. Presenters at the two information sessions included representatives from Treasury Metals, Laurentian Goldfields and Manitou Gold – all active mineral exploration companies in the Dryden area. Each company highlighted the gaps in local goods and services, which included drilling supplies and parts, expanded assay laboratory, exploration equipment and supplies, ATV repair, map printing, and after-hour availability of services. (For further details on survey results, presentations and other information like our ExSpring 2012

ploration Resource Guide Kenora District 2011 and our community profile, please visit our website at www.ExploreDryden.ca or contact us toll-free at 1-877-737-9336.) Following the December 2011 announcement of two new senior management appointments to “assist the ongoing advancement of the Goliath Gold Project…”, Treasury Metals announced in a January 25, 2012 press release its “20,000-metre core drilling program at its 100 per cent owned Goliath Gold Project, located approximately 20 kilometres east of Dryden, Ontario. The new exploration program has been designed to test a number of high-priority targets identified on the greater than 49-squarekilometre project outside of the current mineral resource area… Initial assay results should be available in approximately six to eight weeks.” “Laurentian’s Van Horne and Thundercloud gold properties are both located within a short distance of Dryden, Ontario, [thus] providing excellent year-round access to project exploration and development,”

Ontario Mineral Exploration Review

states Laurentian Goldfield president and CEO Darin Labrenz. “Both projects lie within the under-explored Kenora District in an emerging geological belt that includes the rapidly growing Hammond Reef and Rainy River deposits.” The Van Horne Property has one of the highest concentrations of gold showings in the Kenora District and visible gold is common on the property. Exploration by Laurentian Goldfields Ltd. has identified three distinct drill-ready zones on the property and a five-kilometre-long Gold Trend that appears to link a number of historic exploration shafts. In 2011, Laurentian Goldfields Ltd. completed exploration diamond drilling on both the Van Horne and Thundercloud projects, demonstrating the potential of each project to host bulk tonnage gold deposits. Exploration plans for 2012 are currently being finalized by the Laurentian team, and these plans will focus on advancing high-quality gold targets within this prospective region.” In a Feb 2, 2012 press release, Manitou Gold Inc. announced “the receipt of assay results from the 2011 diamond drilling program on the Merrill Patents located in Northwestern Ontario…” Todd Keast, president of Manitou Gold added, “Manitou Gold completed the first documented drill program on the historical patents and clearly demonstrated the presence of gold within the system.” Our economic base is comprised of retail, service, forest products, mineral exploration, tourism and transportation. Each of our communities offer a vast range of activities such as museums, hiking trails, arenas, beaches, golf courses, camping sites and libraries. A

Top-ten reasons to locate in the Greater Dryden Region: 1. Large pool of available multi-skilled workers. 2. A transportation hub located on the Trans-Canada Highway. 3. Proximity to goods and services. 4. Favourable taxes and low land costs, no development charges. 5. High concentrations of available natural resources. 6. Incentives and support services. 7. Full-service regional airport. 8. Fully modern regional hospital. 9. Vibrant and safe urban communities. 10. Forward-thinking and committed local governments. calendar of events and packages can be found on our tourism website at www.ExperienceDryden.ca or call toll-free at 1-800-667-0935. Join us and experience all that Ontario’s Northwest has to offer! For further information, please contact the economic development manager at Dryden Development Corporation (DDC) Email: edo@dryden.ca Tel: 807-223-4100 www.ExploreDryden.ca Spring 2012

Supplier relations:

one supplier’s perspective from the other side of the fence By Sylvia Rennie, Testmark Laboratories Ltd.

If your mining operation is like most Canadian-based mining operations right now, you are finding yourself knee-deep in production issues. The days of exploration and raising capital are distant memories (if they even were your responsibility at all). Now it is real and live and your senior team is racing to learn and become experts in practically every facet of the operation overnight. The seemingly simple concept of taking a mineral resource out of the ground and sliding it into the market for a profit has become a full-out education on optimizing equipment, process operations, financing, maintaining permits and licenses and certificates of approval, complying with multiple government regulations etc. All at once you find you are no longer just in the mining business; you are also in the waste management business, the human resourc-

Ontario Mineral Exploration Review

es business, the process design and engineering business, perhaps even the drinking water and power transmission business. At this point in the evolution of a mine, there seems to be two main trains of thought, with a sliding scale somewhere in between. One looks to build expertise in-house across all these operational silos; basically become experts in everything. Can this work? We’ve seen it done and yes, it can, but there is usually a huge cost involved. If you’re big enough then maybe that is the fit. Another successful strategy looks to outsource some key functions and build relationships with a network of suppliers that will make your operation a success. A View from the Opposite Side If your mining operation deals with suppliers at any level (and undoubtedly it does),

then please read on. The following is what we see as a leading provider of accredited environmental lab services and a key supplier to mining operations; it’s a view from the other side of the fence. After working with the mining industry for almost fifteen years, we’ve summarized five key things we’d like you to consider to ensure your list of approved suppliers is not just some administrative form that sits with your purchasing officer. Here’s what we’d like you to know: 1. Get to know your supplier – if you don’t know their name, can’t recognize some faces and aren’t sure about their full service offering, then something is drastically wrong. As a lab, we try to get to know each of our clients and their operation. But remember, this is a two-way street. Our greatest success stories come from clients who see us as a true extension to their business – as clichéd as it sounds, your supplier truly is in business to serve your business. Get to know them. 2. Share information – we can’t stress this enough. Sharing information often allows a supplier to offer a solution before it is even a problem. It allows a supplier to suggest services or capabilities that perhaps you weren’t even aware about. In some cases it’s allowed us to catch things like a mining client testing for metals under the Metal Mining Effluent Regulations but not asking for the digested form of the test. A good supplier knows their business and will catch this error provided the mining company shares details like what regulation under which they are testing. 3. Don’t go it alone: ask for help – this follows nicely from point no. 2. Don’t be shy

to discuss problems with your key suppliers. Our lab has been fortunate enough to work closely with many of our mining clients at this level, often providing things like custom method development to hone in on a chemical processing issue, or the ability to pick the brains of PhDlevel chemists as though they were part of your operation. We also see this particularly in the area of data management solutions – as a lab we have your data and can pretty much parse it any way you want, often at no cost, so by knowing that data management is an issue for many mining clients, we are often able to provide an easy fix. 4. Provide feedback – suppliers need to know from time to time how they are doing. In some ways, you know our competitors better than we do because you are being courted. No business relationship is static and feedback is the mechanism that often drives change. 5. Challenge the paradigm – what we mean here is don’t stop thinking at the level of company→supplier. Some of the best business ventures were collaborative efforts between a principal operation and a supplier that could nimbly support or enhance it. This might create a whole new revenue stream for your operation without the strain of full ownership. Often both parties benefit.

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Testmark Laboratories is a full-service environmental testing laboratory based out of Garson, Kirkland Lake (under the name Accuracy Environmental Labs), Sault Ste. Marie and Mississauga. Visit us at www.testmark.ca or call 1-888-282-0422. Spring 2012

Rare Earth Metals

aggressively searching for rare earth elements in northern Ontario By Leonard Melman

One of the mining industry's signal events of the past few years was the Chinese declaration that they would no longer provide adequate supplies of metals known as "rare earth elements" (REE) and, in fact, may soon become buyers on the world scene. That statement set off a frenzy of North American exploration. One company moving aggressively to take advantage of the new state of affairs is Rare Earth Metals Inc. (TSX-V; RA). The company has assembled a portfolio of projects including three within Ontario; their flagship Springer-Lavergne near Sturgeon Falls on Lake Nippissing; Clay-Howells in northern Ontario southwest of James Bay; and Coldwell, located just north of Lake Superior. In addition, the company also has properties located in NewfoundlandLabrador including the highly-prospective Red Wine Project. Rare earth elements themselves are vital for two important reasons, both underscoring the necessity for the development of future supplies on this side of the Pacific. First, they are essential elements in the manufacture of many advanced military weapons systems, particularly those of the United States, and second, they are also essential for many applications in the world of modern leading-edge industrial manufacturing. Technological applications of REE are generally divided into two categories; 'enablers' such as catalysts, glass polishing and battery alloys, as well as 'building blocks' including rare earth magnets, which have many uses in the expanding field of green energy applications. Agreements to acquire Springer-Lavergne were finalized in June 2011. The project was originally drilled in 1969 by Geophysical Engineering and Surveys Ltd., of North Bay â&#x20AC;&#x201C; a four-hole program which discovered 0.98 per cent Total Rare Earth Oxide (TREO) over 112.7

Ontario Mineral Exploration Review

metres with mineralization occurring in an area hosted by large areas of syenite with carbonitized and brecciated granite gneiss. (Company geologists caution that the indicated geologic setting and the resource numbers are historic in nature and should not be relied upon.) Seven drill holes were completed at Springer-Lavergne during 2011 and early assay results include 0.94 per cent TREO over 359.8 metres including 1.50 per cent over 94.2 metres at hole DDH SL-01; 0.97 per cent TREO over 301.6 metres including 1.57 per cent over 40.7 metres at hole DDH SL-02; and 1.43 per cent TREO over 157.7 metres including 1.51 per cent over 124.7 metres at hole DDH SL-03, with further assay results expected in early 2012. A 2,500-metre drill program is now underway to further delineate resource potential and define a NI 43-101 compliant resource and metallurgical testing on a proposed bulk sample is also planned. Located between major mining centres North Bay and Sudbury, the project has an excellent infrastructure. Goals for 2012 include completing a resource estimate for the project, continuing metallurgical testing and completing a Preliminary Economic Assessment (PEA). The Clay-Howells iron-rare earth elements property was acquired by Rare Earth Metals in 2009 and is located north of the city of Kapuskasing, another major Ontario mining centre providing excellent infrastructure for this property as well. During 2011, Tetra Tech Wardrop of Toronto completed an NI 43101 compliant resource estimate for Clay-Howells, which was based on 5,436 metres of drilling in 18 holes and 1,825 assay samples covering 700 metres of strike length to an average depth of 280 metres. Highlights of the resource estimate include an inferred resource of 8.5 million tonnes, grading 0.73 per cent TREO; 0.13 per cent niobium oxide (Nb205) and 44.17 per cent iron oxide (Fe203) at a 0.6 per cent TREO cut-off grade. Rare Earth Metals is currently seeking a partner to carry out the next phase of metallurgy, economic evaluation and marketing and believes Clay-Howells is an excellent candidate to develop into a "Polymetallic Boutique" producer. The company's other Ontario property, the Coldwell Complex, is early stage and the company is looking for a joint venture partner to help advance the project.

Trust family-operated Hearst Air Service

for all your mining flight needs

Hearst Air Service Ltd., an air carrier situated in the real north of Ontario with 35 years of experience flying the Hudson Bay Lowlands, has valuable knowledge and understanding of what is needed for a successful project in Ontario’s remote locations. Hearst Air’s beginnings were in tourism, with the trusty old DeHavilland Beaver flying fishermen and hunters throughout the north for remote vacations. Owner/operator and pilot Georges Veilleux began working for government agencies surveying and studying the Lowlands during the winter months on skis. In the late ‘90s, prospectors and exploration companies utilized the air service more frequently and the potential for growth was apparent. Joined by his daughter Melanie Veilleux and son Michael Veilleux, an equally passionate bush pilot, Hearst Air rose to the challenge and made the changes necessary to meet the needs of exploration projects developing in their big backyard. The Hearst Air team is known for their customer service and dedication to the logistical support for all clients, from exploration companies and government agencies to executive charters and recreational vacationers. Hearst Air’s fleet includes a Turbine Otter, a Turbine Beaver, a Cessna Caravan and one legendary DeHavilland Beaver, aircraft which have proven to be the workhorses of the north. Hearst Air puts a lot of time and effort into recruiting skilled pilots with experience in these conditions, who share the passion for aviation and customer service needed to get the job done right. The Carey Lake air base also includes an on-site aircraft maintenance facility with a maintenance staff available full-time to service the fleet as needed. The high degree of quality service and safety Hearst Air offers its clients is recognized by all who have flown with Hearst Air. The town of Hearst is ideally located on the tip of Hwy 11, and as a community, offers expertise for the service and supply needed for affordable logistical support. Over the years, Hearst Air and local business owners have established a strong alliance to ensure prompt and efficient service to the mining industry. From bulk-food orders, hydraulics parts and repairs, heavy-equipment parts and repairs, labour force, shipping/receiving, accommodations, plumbing/heating supply and service, welding and fabrication, lumber and construc-

tion materials, and everything else; Hearst has it all, and does it well. No other community in the north offers the cost-efficiency of the town’s location and the services rendered and supplies available. This family enterprise has made its mark in both the tourism and mining industries and Hearst Air Service plans on continuing to meet the demands of all development in Ontario’s Far North with pride and dedication.

Air Charter and Logistics with Hearst Air Service Ltd. • 4 season air charter • inventory management • logistical support • bulk drum hauls • expediting services

call now toll free 1-866-844-5700 charter@hearstair.com www.hearstair.com

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Hearst Ontario HWY 11N ~ ideally located for Far North Programs Spring 2012

Norseman Structures provides alternative building solutions

Norseman Structures F-Series building under construction.

Norseman Structures provides alternative building solutions for mine-site operations. The clear-span interior of a Norseman building provides flexibility to maximize storage space and allows operators to maneuver equipment without difficulty. Translucent fabric covers reduce energy costs (lighting) and create a bright working atmosphere. The unique design of a Norseman Structures building can serve many functions on-site such as: • Raw material storage. • Equipment, mineral and bulk storage. • Workshops, garages and maintenance. • Protect employees, machinery and operations from extreme weather. • Permanent or temporary facilities. Norseman Structures is excited to introduce the new F-Series Commercial Building, a perfect fit for the mining industry. Created with innovative design, safety and uncompromised quality, Norseman Structures is proud to launch the new innovative building into the steel-framed, fabric-covered building marketplace. Outlined below are a few of the key F-Series building highlights. • The wide span premier engineered building solution for largescale mine-site operations. • Available in 70-foot to 130-foot widths; manufactured to any length. • I-beam leg provides flexibility in sidewall height, allowing for various overhead door and side entrance options. • Straight sidewall design allows users to utilize complete square footage and store oversized items and materials directly against walls. • The straight sidewall design permits various exterior finishes, such as metal cladding.

Ontario Mineral Exploration Review

• Some applications may include mineral storage, equipment housing, machinery repair garages, warehousing and production plants. • Available worldwide and designed in accordance with structural requirements of the International Building Code, CSA A660-10 and CSA S367. In addition to the F-Series building, the T-Series Commercial Building is also ideal for the mining industry. • Designed for strength and durability, making it a perfect fit for industrial applications. • Available in 40-foot to 80-foot widths; manufactured to any length. • High sidewall design allows for a significant use of floor space, giving customers exceptional storage capacity. • Modular design allows users to extend the building to meet changing needs. • Manufactured from the highest quality heavy-gauge, square, steeltube steel, the T-Series provides customers with a product unmatched in the industry. • Superior corrosion protection. • Available worldwide and designed in accordance with structural requirements of the International Building Code, CSA A660-10 and CSA S367. Norseman Structures is committed to becoming the leading and most respected supplier of innovative building solutions in the world. Below are some of the key benefits of utilizing a steel frame, fabric covered building for mine-site operations. Bright Environment and Functional Design The translucent fabric cover allows natural daylight to enter the

Completed Norseman Structures T-Series building.

Mine-site storage and maintenance shop.

buildings, creating an evenly lit, bright working environment. Doors, lighting, insulation, HVAC, flooring and optional liners can be added to most Norseman buildings. Clear-Span Work Area and Custom Design The clear-span interior of a Norseman building gives users the flexibility to design space in an unobstructed, column-free area for flexible storage options and large equipment maneuverability. Norseman Structures offers a full line of standard products, but if mine-site needs are unique, a customized structure can be designed.

Norseman Structures operates over 200,000 square feet of quality controlled manufacturing space and, combined with an extensive distribution network and corporate offices, is a world leader in the manufacturing and distribution of steel-framed, fabric-covered buildings. â&#x20AC;&#x153;Fiercely Reliableâ&#x20AC;? since 1921. To learn more about Norseman Structures and the buildings highlighted above, please visit www.norsemanstructures.com.

Building Strength Norseman Structures buildings are designed to meet building code requirements. All designs are researched, developed and tested to ensure they meet the requirements necessary to maintain the quality and structural integrity of every building. Norseman reviews each engineered building design with third-party engineering firms to ensure buildings exceed industry standards for strength and functionality, resulting in a safe structure built to last. Cost-effective Built for long-term durability, Norseman Structures buildings are easy to maintain and in most instances, more cost-effective than conventional construction for both the initial install and daily operation. Natural light shining through the translucent fabric cover can reduce or eliminate the need for artificial lighting and interior liners can be added to regulate air temperature in heated structures. Operational expenses for heating and lighting can be significantly reduced in comparison to a conventional building. Project Management and Quick Installation Depending upon building requirements, Norseman buildings can be installed in a fraction of the time necessary for traditional structures. Backed by a 10- or 15-year pro-rata warranty and a professional service team, Norseman Structures provides expert advice and experienced installation teams. We guarantee the best value for your building investment. Spring 2012

LIMS history 101

Once the exclusive domain of multi-million-dollar pharmaceutical and biotech laboratories, LIMS are increasingly deployed in smaller labs, serving industries such as minerals and mining. This change has been rapid, fueled by a range of factors such as new regulatory requirements; increased data output of modern, multi-channel analytical instruments; and also by companies’ desires to increase efficiencies and gain a competitive edge over their rivals.

Ontario Mineral Exploration Review

The evolution of LIMS has paralleled, and been driven by, developments and advances in the computer systems on which they run. The first LIMS that appeared in the late ‘70s were designed to use the processing equipment and network infrastructures available at that time. They ran on mini- or mainframe computers, using dedicated terminals, proprietary network topologies and batch processing architectures. They were mostly simple storage devices, with little or

no real-time analytical capabilities. The next decade saw the introduction of microcomputers into laboratories. LIMS became more widespread, and began to be used for more than simple data storage. For the first time, it became practical to capture and process data streams from analytical instruments in real-time. Equipment manufacturers raced to incorporate I/O (input/ output) functionality into their products. LIMS vendors began making systems to manage the entire analytical life cycle, from data generation and processing to analysis and reporting. These systems were typically client/server, command-line based and used flat-file architectures for storage. From the mid-‘90s onward, as the cost of computer systems continued to drop and their power increased proportionally, LIMS systems underwent a radical transformation. The introduction of graphical user interfaces (GUIs), principally Microsoft’s Windows, meant that LIMS manufacturers could abandon the cryptic, command-line interfaces in favour of ones that were more intuitive and user-friendly. This shortened training times and at the same time, promoted greater user acceptance. LIMS were developed to integrate with other systems within the organization; firstly with datadriven, enterprise applications such as ERP systems, and later with “productivity software” such as MS Office. Two other changes occurred that had a profound impact on the way LIMS were built: around this time, relational databases were brought into the mainstream. Products from vendors such as Sybase and Oracle, and IBM’s DB2, revolutionized the way in which data was stored and accessed. Instead of the primitive, sequential architecture that characterized flat-file storage, indexed database tables allowed programs to extract discrete datasets from amongst millions and millions of records with unparalleled speed and pinpoint accuracy. As well as the performance gains, LIMS vendors no longer had to concern themselves with the mechanics

of data storage; they simply designed their systems to work with one or more of the enterprise database management systems on the market. The fact that a standardized language, called SQL or structured query language, was developed to interact with these systems made the job of the LIMS vendors even easier, and encouraged the widespread adoption of relational data storage. The second major event that occurred during this period was the rise of the Internet and the adoption of â&#x20AC;&#x153;distributedâ&#x20AC;? systems architecture. LIMS could be extended, cheaply and securely, beyond the lab, outside the organization and even around the world.

Spring 2012

As good as gold

PolyMet Resources Inc. Incorporated as PolyMet Resources Inc., PolyMet has been operating as a business since August, 2000. In 2004, the company formed a sub-division, called PolyMet Labs, to focus on the assaying and bulksampling business. The PolyMet facility is located in the former Temiskaming Testing Laboratory building in the Town of Cobalt, Ontario. The provincial government, which owned the Temiskaming Testing Laboratory, closed the lab’s doors in 1994 and relocated its operations to Sudbury, Ontario; the Ministry of Northern Development and Mines subsequently closed the town’s resident geologist office in 1997. The former Temiskaming Testing Laboratory was then surplused around 1998, and offered to the public for sale. It was at this time that Gino Chitaroni and his partners decided to pursue the opportunity to acquire the lab/plant. It took about a year of enquiries and negotiating for the premises before the company was able to finally acquire the lab in early 2000. The acquisition process was complicated by the

fact that the plant/lab was an older facility that had numerous environmental “brownsfield” issues that made acquisition and later rehabilitation challenging; rehabilitation work was ultimately completed in 2003-4. A further challenge to the start-up of the company was the condition of the building and equipment, which were in dire need of renovations, upgrading and repairs; while most of the office renovations work was completed by 2002, the lab and plant equipment required constant and ongoing upgrades, which have continued to the present day. The company acquired its ISO quality management status in 2004, alongside efforts to improve the facility in order to compete and meet the demands of the mining industry. The capital upgrades at the PolyMet facility were not funded by the provincial or federal governments but by the owners’ equity and loans through Temfund and Business Development Bank. Of particular interest, the major financing institutions viewed the mining sector as a “sunset industry” in 2000; they also viewed the location of

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the plant in Cobalt as an ‘economically depressed area’, too risky for financing, so financing was very difficult to achieve. The company was first conceived to process precious metals recyclables waste (mainly silver but also gold); however, low metal prices, particularly silver, in the early 2000s, coupled by the plant limitations, made the economics of recovery marginal. So the company changed its direction and management, and subsequently its focus, in 2003-4 to gold assaying analysis for the mining sector. Since the plant and lab was already set up for assaying and bulksampling, the company began targeting its efforts for business with the gold mining sector. PolyMet is still available for work with the metals recycling industry, but has seen a decline of potential feedstocks for processing since 2000 due in part to foreign competition from China/India and the overall reduction of available feedstocks. High metal prices facilitated more competition via cheaper labour and larger economies of scale, which has resulted in lesser amounts of appreciable valuable metal from recyclable supplies that are being made available as feedstocks for the recycling industry. “We see our involvement in the recycling business morphing over to the testing side, away from the actual processing side of the business,” says Gino Chitaroni, president of PolyMet Resources Inc./ PolyMet Labs. The company prides itself on excellent turnarounds on assaying work, reasonable prices and pick-up and delivery of samples and rejects.

“We are in constant contact with our clients, and love to give them the personalized service they deserve,” Chitaroni states. The company does offer a unique blend of micro-bulksampling capabilities and assaying, all underneath one roof. This is an area the company wishes to exploit more in the future. As such, PolyMet is working on fine-tuning its efforts to market the micro-bulksampling part of its business for the mining sector. All the while, the company is kept very busy with gold assaying work coming from, primarily, the Larder Lake/Kirkland Lake/Lake Matachewan-Gowganda areas. “We wish to extend our wholehearted thanks to those companies in those areas for sticking with us,” Chitaroni says, explaining that as a result of this business patronage, PolyMet is the largest employer in the Town of Cobalt. with 16 full- and four part-time staff. The company strongly believes in the future of the gold business in Northern Ontario, and has been positioning itself to handle more gold assaying work. Although there has been very little business in the silver industry in Northern Ontario, the company, being situated in the heart of Canada’s largest producing silver mining district “The Cobalt Mining Camp”, believes the recent rise and strength of silver prices will result in renewed interest in silver exploration. The company is well positioned to handle any silver assaying work, bulksampling and micro-smelting processing of silver ores. For further information, please visit http://www.polymetinc.com/.

ISO 9001

A Division of PolyMet Resources Inc.

Assaying and Bulk-Sampling Services 1 Presley St. P.O. Box 699 Cobalt, Ontario Canada P0J 1C0

Tel. (750) 679-5500 Fax (750) 679-5519 info@polymetinc.com www.polymetinc.com

Spring 2012

XRF in field exploration By Bob Komarechka In June 2010, Trueclaim Exploration Inc. became one of the first companies in Canada to acquire the new Innov-X Delta XRF. This hand-held X-ray fluorescence (XRF) device is used for multi-element analysis in the field and in real time. Now after 18 months of use, I provide a brief commentary of its performance. As this unit is an open beam of X-ray-emitting device, operators must be trained and certified by the Ministry of Natural Resources Canada. This process can take weeks but assists in the safe and competent use of the device. I attended XRF certification training with Innov-X Canada while attending the AME B.C. Round Up convention. The XRF has several analytical modes that can be time adjusted for various concentration levels. Since the unit’s area of investigation covers about the size of a pea and only penetrates a few millimetres in depth, it is important to select representative areas for sampling or preferentially use a uniform ground powder. Before operating the unit, it is recommended that the XRF be cali-

brated using known standards in a matrix similar to the samples being analyzed. This may not always be possible, especially in variable field rocks, but it does enable greater accuracy as the matrix material can affect the value of the reading as described below. On examining drill cuttings drilled prior to bulk sampling, a known standard was analyzed. The variation of the actual sample value was used as a correction factor for subsequent readings. At the end of the day, 400 samples were analyzed. The standard was then tested again and the correction ratio remained the same. Another project was a stripped outcrop of rusty gabbro on Trueclaim’s Scadding Gold Property northeast of Sudbury, with anomalous assay values of PGEs (3.6 g/t Pd & 0.567 g/t Pt) associated with disseminated nickel and copper. The use of the XRF, insensitive to detect weak PGE mineralization, did enable the recognition, distribution and orientation of the associated nickel and copper mineralization. In Arizona, on Trueclaim Exploration Inc.’s Richmond Basin Prop-

Please recycle this magazine when you are done.

Ontario Mineral Exploration Review

erty, a replacement vein of copper magnetite known as the Black Copper Vein was examined with the Delta unit. The copper mineralization, finely disseminated in a dark matrix, was difficult to discern. Values up to seven per cent Cu (confirmed by assays) were located within minutes in the field. Elsewhere, sulfosalt minerals were recognized by the elemental ratios and the combined presence of arsenic and sulphur. The Delta unit has the ability to use a realtime wireless Bluetooth connection to a Windowâ&#x20AC;&#x2122;s device such as the Trimble Yuma Unit. Using the Yumaâ&#x20AC;&#x2122;s GPS capabilities paired with ioGlobal geochemistry analysis software, we created colour-coded geo-referenced maps of the geochemical data. This type of reporting functionality made easy work for the review and interpretation of data. The significance of recent developments in portable XRF has great potential and is now the focus of a detailed study of CAMIRO Project 10E01. About the Author: Bob Komarechka is senior project geologist with Trueclaim Exploration Inc.

Spring 2012

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