MINING QUARTERLY SPRING 2012

Q

P U BL I S H E D BY T H E E L K O D A I LY F R E E P R E S S

UARTERLY

Sp ri ng

Boring down at Cortez Hills

201 2

Jesse Toepfer, left, project manager for Barrick Gold of North America's regional projects group, and Jim Allred, construction supervisor for the blind bore project at Cortez Hills, stand in front of a special drill rig operating in Nevada for the first time.

Ross Andreson/Mining Quarterly

— INSIDE — CORTEZ MINE Producing gold for Barrick — Page 2 NEWMONT MINES North Area busy place — Page 26

ROCHESTER MINE Full silver production — Page 37

MINING JOBS Lots of hiring, motel living — Page 45

ELKO MINING EXPO More booths this year — Page 52

Employment

Find the job you want — Pages 102-104

MINING QUARTERLY John Pfeifer. . . . . . . . . . . . . . . . . . . . . . . Publisher Adella Harding. . . . . . . . . . . . . . . . . . . . Editor To advertise, call 775-738-3118 Mining Quarterly is published in March,June, September and December by the Elko Daily Free Press (USPS No. 173-4320) at 3720 Idaho Street, Elko, Nevada 89801, by Lee Publications Inc., a subsidiary of Lee Enterprises.

Periodical postage paid at the Elko Post Office. For change of address write 3720 Idaho St., Elko NV 89801

Booming industry boosts area’s economy ELKO — Golden opportunities for mining on a draft study of expansion plans at that gold companies, miners, suppliers and communi- and silver mine. More on Hycroft is inside.

Great Basin Gold Ltd.is still awaiting release ties continue in Nevada, especially in northof the draft study on its plans for the Hollister eastern Nevada.

Gold projects are under development or in Mine in northwestern Nevada but is producing gold through test mining the planning stages, and there are so during the wait. More on Hollister is many exploration companies workinside. ing in Nevada that drillers are a hot Gold isn’t the only commodity commodity. spurring interest. General Moly is “It’s devilish tough now to get a hoping to start construction on the drilling rig of any shape or size. We Mt. Hope molybdenum project this have to plan four to six months year. The BLM’s draft study is out. ahead to get a drill rig,” said Steven More inside.

Koehler, chief geologist with EvolWith all the growth in the mining ving Gold. industry over the years has come All the activity is creating more Adella change and a greater focus on comjobs and a shortage of housing.

Harding munity sustainability and commuArticles inside this Mining Quarterly look at the jobs market and the motels nity relations.

“The roles of communications and comand hotels filling with workers in the mining industry. The quarterly comes back to jobs munity relations in the business have grown again this issue because jobs are a significant and evolved significantly over the last 10 to 20 years,” said Mary Korpi, director of external part of the golden opportunities.

A key point the two biggest gold producers relations for Newmont Mining Corp.

“It is the expectation of communities, in the world want to make, however, is that they are seeking skilled people for the most employees,investors,key stakeholders and the part but are willing to train for certain jobs. media that we are open and transparent with Those they are willing to train are honest our operations and activities. It is important people with good work records and good that we have the understanding and support of each of these groups to open new mines, safety records.

“It’s competitive, and you have to have continue to operate and expand existing your ducks in a row,” said Lou Schack, mining operations and to successfully close director of communications and community facilities,” she said.

“Communications and community relarelations for Barrick Gold of North America.

The projects under way in Nevada include tions are a role and responsibility of everyone Newmont’s Emigrant gold mine that will be in the mining industry and I have been fortuin production later this year, and more on nate enough to have been involved for the past 35 years to be part of this change in the Emigrant is inside.

Newmont also is developing the expansion business,” Korpi said.

An interview with Korpi also appears in project in the Genesis District north of Carlin for new gold production and is looking down this edition.

Another sign of the snappy mining the road at the Long Canyon Project. Details economy is the fact that this Mining Quarter is inside.

Also, Barrick’s Cortez Mine continues to the largest ever, with 104 pages. Advertisers be a major gold producer and now has high want to reach the mining market.

Please keep in mind that with a quarterly hopes for its latest gold discoveries, Red Hill and Goldrush. More on Cortez is inside this this big, there are interesting articles throughout the edition. For instance, an article on Boss edition.

The Turquoise Joint Venture that Barrick Tanks,a vendor that does business with mining operates, with Newmont as one-quarter companies, is on Page 99, and an update on owner, also has big plans and is growing American Vanadium is on Page 98. underground as well. More on the Turquoise —————— Ridge Mine is inside this quarterly.

Adella Harding is editor of the Mining Allied Nevada Gold Corp. continues its Quarterly and mining editor for the Elko growing efforts at the Hycroft Mine 55 miles Daily Free Press. Mining news is on the west of Winnemucca, and the U.S. Bureau of elkodaily.com website. Her email address Land Management is taking public comment is aharding@elkodaily.com.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 1

Cortez still a golden operation

By ADELLA HARDING Mining Quarterly Editor

CRESCENT VALLEY — Barrick Gold Corp.’s Cortez Mine is in a golden era of high gold production and new discoveries.

“There’s lots going on,” said Cortez General Manager Brian Grebenc.

“We’re definitely excited about the growth. It’s a fantastic property and has fantastic prospects, but what really caught my eye were the people at Cortez. They have a passion for what they do here.”

The company expects to produce in the range of 1.18 million and 1.25 million ounces of gold this year, he said. That’s a lot of gold but down from 2011 production.

Cortez produced 283,000 ounces of gold in the fourth quarter of last year and 1.42 million ounces for all of 2011, according to Barrick. That compares with 1.14 million ounces for the year 2010 and 205,000 ounces in the fourth quarter of 2010.

Barrick President and Chief Executive Officer Aaron Regent said in Barrick’s earnings teleconference in February that Cortez “is one of the most profitable gold mines in the world.”

Cortez has roughly 1,200 employees and roughly 400 contractors on the site, said Grebenc, who came to Cortez from Barrick’s Cowal Mine in Australia roughly six months ago.

The Cortez Mine includes the newer Cortez Hills operations and the older Pipeline complex of pits and the mill that processes ore from the two areas.

Grebenc said Cortez has something for every miner, with both open pit and underground mines and “three types of process streams.”

Cortez processes the better grades of ore in the mill, leaches the lower grades at both Cortez Hills and Pipeline and sends refractory ore by truck to Barrick’s Goldstrike Mine north of Carlin for processing.

Cortez currently is mining at Cortez Hills, where there are both underground and surface operations roughly 10 miles from the Pipeline operations.

“We’re talking right now about moving some resources over to Pipeline, but the main production is from the Cortez

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ABOVE: Henri Gonin, left, maintenance superintendent at the Cortez Hills operations, poses with mechanic Danny Jensen of Spring Creek in the truck shop. A 400-ton Liebherr haul truck is in the background.

LEFT: A 400-ton Liebherr haul truck carries a load of material out of the open pit in February at Barrick Gold Corp.’s Cortez Hills operations in Lander County.

Ross Anderson Mining Quarterly

Ross Andreson/Mining Quarterly

Brian Grebenc, general manager of Barrick Gold Corp.’s Cortez Mine, talks in February about the busy Cortez operations.

pit and underground,” Grebenc said.

At Cortez Hills, Barrick is now producing gold from the leach pad and has started stripping the Pediment deposit that will later join the Cortez Hills Pit to make one pit.

The Cortez Hills open pit is roughly half the planned depth, which will be 2,200 feet down, according to Doug Wilson, superintendent of open pit operations.

Red Hill and Goldrush Barrick’s Red Hill and Goldrush discoveries in the Horse Canyon area are excitement generators for Cortez for their future potential as mines that also would be part of the Cortez Mine.

“The growth phase of Cortez is not over,” Grebenc said.

Rob Krcmarov, senior vice president of global exploration, said in Barrick’s earnings teleconference Gold Hill and Goldrush are “now merged into one system,” and the resource has doubled since last September when Barrick announced the discovery.

“It’s a very significant deposit, which will continue to grow,” he said.

Barrick reported the gold resource at Red Hill is 1.27 million ounces in the indicated category and 3.3 million ounces in the inferred category, and the resource remains open in all directions.

A small portion of Goldrush had sufficient drilling intensity to bring in an initial inferred resource of 2.45 million ounces, according to the earnings report.

Ross Andreson/Mining Quarterly

Doug Wilson, mining operations superintendent for Barrick Gold Corp.’s Cortez Mine, stands in the new Pediment deposit mining area.

One of the current projects is development of a new ventilation shaft for the Cortez Hills underground that may help increase gold production. See related story on Page 10.

“At least it opens opportunities for us,” Grebenc said.

Even in the older Pipeline area, plans are to mine the Crossroads deposit that hasn’t yet been developed.

“It’s been a lot about systematizing what we do at Cortez. The center of See CORTEZ, 4

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Cortez ...

Continued from page 3 gravity will sort of move south, back to Pipeline again,” said Michael Protani, manager of open pit operations.

“I would estimate about a third will come from Cortez Hills in terms of the amount of tons moved.

Pipeline is part of the mine plan, but we will still be mining here,” he said at Cortez Hills.

“We’ll start picking up Gap, Pipeline and the new Crossroads,” Protani said.

Another current project is the expansion of the tailings facility at Pipeline. A new lift is going on now, but the expansion will follow.

New stretch of road Cortez also recently constructed a new road from the highway south of the town of Crescent Valley to the Cortez Hills site, opening it in January. The new road is county and joins with the county segment Barrick constructed earlier while developing Cortez Hills.

The county road had to be rerouted to bypass the active mining operations.

“Now it’s straight and flat and a safe and quick trip,” said Lou Schack, director of communications and community affairs for Barrick Gold of North America.

See CORTEZ, 6

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Driver Everett Pearson of Battle Mountain stands atop a 400ton Liebherr haul truck in the Cortez Hills shop for maintenance.

He cleaned out the driver’s area while mechanics worked on the truck.

Ross Andreson Mining Quarterly

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Cortez ...

Continued from page 4 He said the new road cuts time and distance for miners who drive or ride the bus from Elko and Spring Creek. It’s a two-hour drive from Spring Creek to Cortez Hills.

The new road was built because of the tailings dam project, but also provides the shorter route to Cortez Hills.

Earlier, Barrick completed an expansion of the assay laboratory at Cortez and upgraded the mill to reduce bottlenecks.

“The mill is working at 12,500 tons a day and was built for 10,000 so the debottling was a great success,” Grebenc said.

At the Cortez Hills operations, the surface mining rate is 350,000 tons a day of ore and waste rock, according to Protani. Ore going to the Pipeline mill for processing is crushed at Cortez Hill and then put on a 9.5-mile conveyor to the mill.

Vern Goglio, the underground manager, said the underground operation moves 1,400 tons of ore a day and is working at a one-to-one ratio with backfill.

Protani said Cortez Hills has been busy with development activity and is now to the point where the focus is on building a team.

“We want to get people to work together to be

Barrick Gold Corp.

See CORTEZ, 8

This map shows Barrick Gold Corp.’s new Red Hill and Goldrush gold discoveries in the Horse Canyon region of the Cortez Mine in the Crescent Valley area.

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Cortez ...

Continued from page 6 the best mine in the world,” he said.

Shoveling and blasting Wilson said there are two shovels operating in the Pediment deposit as the mining gradually progresses toward Pediment, which is lower grade than the Cortez Hills deposit “but is still a good deposit.”

Cortez blasts every day to loosen the earth for mining, and Wilson said Cortez has been using electronic blasting caps with computer chips for the past four or five years.

“We can control the blast down to the last millisecond,” said Wilson, who has been at Cortez Hills nearly seven years.

“I have seen it go from a teaspoon of dirt to now.”

The control of the blasting helps limit vibration.

Barrick uses its own crews to blast but Southwest Energy LLC provides the powder.

Protani said Barrick has purchased another P&H electric shovel that will be coming on site in October and be com-

“We want to get people to work together to be the best mine in the world.”

— Michael Protani, manager open pit operations missioned in January 2012, and the company has committed to a number of new haul trucks.

Barrick is buying 360-ton Caterpillar trucks that will be commissioned through 2013.

Barrick developed Cortez Hills while battling a lawsuit environmental and Western Shoshone groups filed against the U.S. Bureau of Land Management over the project.

Tribal leaders claimed Mt. Tenabo, where Cortez Hills is located, is home to several Western Shoshone creation stories, and the water running beneath it is sacred.

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U.S. District Judge Larry Hicks in early January denied claims from the TeMoak Tribe of Western Shoshone, Great Basin Resource Watch, the Western Shoshone Defense Project and the Timbisha Shoshone Tribe that the BLM violated environmental laws in a courtordered supplemental study.

Cortez Hills was under a partial injunction in 2010 and until March 2011.

The BLM had to complete a supplemental study, after a 9th Circuit Court of Appeals opinion kicked the project back to U.S. District Court in Reno for more analysis.

The injunction prevented dewatering in the new Cortez Hills area and blocked Barrick from sending trucks of refractory ore from the underground to Goldstrike.

Protani said the current dewatering rate at all of Cortez is 24,000 to 25,000 gallons per minute and most of that is at Pipeline. Cortez is permitted to dewater up to 34,500 gpm.

Grebenc said lawsuits create uncertainty, and it was hard on the people coming to work at Cortez.

“The way I look at it, we certainly didn’t put the ore reserve here, but we found it, and we’re doing the best we can,” he said.

Grebenc also said Barrick can’t control the gold price and battles inflation every year, which “creates the need to get smarter and better at what we do.”

High gold prices have certainly helped Barrick, but Schack said not all the money is “running off to the banks.”

Barrick is investing in projects like those at Cortez that are sizable investments, he said.

While Cortez is now the largest gold producer for Barrick, Grebenc said every Barrick operation is important to the company.

“That’s where we develop talent,” he said.

Barrick also shifts employees to the different operations worldwide when needed, such as those from Cortez who are helping Barrick complete the Pueblo Viejo Project in the Dominican Republic.

“It’s a great opportunity for people to get a real global sense — great exposure to global issues,” said Grebenc.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 9

Giant drilling rig bores shaft from surface

By ADELLA HARDING Mining Quarterly Editor

CRESCENT VALLEY — A bright blue drilling rig that looks like no other is hard to miss at Barrick Gold Corp.’s Cortez Hills operations in Lander County.

Frontier-Kemper Constructors Inc. is blind bore drilling at the site in the first such project in Nevada.

“It actually drills from the surface to underground to provide ventilation,” said Jim Allred, blind bore construction supervisor for Cortez.

The huge rig is drilling a shaft that is 14 feet in diameter and will then be lined with steel down 1,500 feet and grout behind the steel, he said.

“We’re now at about 620 feet down,” Allred said on Feb. 8.

The underground mining crews will mine to the new shaft, and they were about 400 feet away on Feb. 8.

“The whole shaft is full of water, on purpose, to provide pressure for the bit,” Allred said. “The cuttings go up through rods and to a settling pond.”

Actually, there are two ponds, one for the solids and one for water that is then reused in the drilling effort.

The shaft under way in February is strictly for ventilation for the expanding underground mine, and it is the first of two that FrontierKemper is doing on site.

The second one will be 16 feet in diameter and may be concrete lined, Allred said. This also will be a ventilation shaft.

Both shafts will make it possible for Barrick to expand under-

Ross Andreson/Mining Quarterly

See DRILLING, 12

Driller John Jenkins of Mt. Morris, Pa., watches the screens in the drill shack at Frontier-Kemper Constructors Inc.’s blind bore drill site at Barrick Gold Corp.’s Cortez Hills operations.

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Drilling ...

Continued from page 10 ground mining.

Jesse Toepfer, project manager for Barrick Gold of North America, said Frontier-Kemper has used the blind bore rig back East, but the concern in Nevada is the soil conditions.

The ground is hard rock that fractures, and the drill bit could get stuck in a fracture.

“Ground conditions make this project what it is — the challenge,” said Bob Schumm, drill superintendent. “So far, so good.”

Barrick benefits from the blind-bore drilling from the top down because the drilling can be done without interfering with the underground mining operations.

“They’re able to mine while we advance the shaft,” Schumm said.

Miners won’t have to haul away any muck from the shaft project since the waste is pulled back up to go to a pond, Toepfer said.

Setting up the giant rig was a big project in itself.

Toepfer said Frontier-Kemper has been on the site about six months, after bringing the rig in 1416 semi loads and putting the rig together at Cortez Hills.

“They just started drilling the third week of December. It took a few weeks to get it assembled

Ross Andreson/Mining Quarterly

Frontier-Kemper Constructors Inc.’s bright blue blind-bore drilling rig is digging a shaft from the top to the underground Cortez Hills operation at Barrick Gold Corp.’s Cortez Mine in Lander County. The rig brings the material and water used in drilling back to the surface for discharge into two ponds. The water is recycled.

12 MINING QUARTERLY, Elko, Nevada SPRING 2012

Ross Andreson/Mining Quarterly

Bob Schumm, drill superintendent for Frontier-Kemper Constructors Inc., talks about the company’s blind bore drilling project at Barrick Gold Corp.’s Cortez Hills operations in Lander County. and operating,” he said.

The plan is for the north hole to be completed by August, and the second, the south hole, will be done in March 2013, Toepfer said.

“When the fans kick out, it becomes operational,” he said of each shaft.

Site work is already under way for the second hole, which is near the Cortez Hills shop and the ready line for the haul trucks mining the open pit.

Frontier-Kemper will have to move the rig for the second hole, which means taking it apart and reassembling it. The second hole is roughly a mile from the first.

Greg Becken, the field safety coordinator for Frontier-Kemper, said there are 16 people on the blind-bore project,

working 24-7, and the crew comes from several states.

Driller John Jenkins of Mt. Morris, Pa., said he has been doing his job about seven years. He was watching the RPMs, drill depth and rotary table operations on screens in the drill shack.

Schumm, who lives in Florida, said the blind-hole drilling is safer than conventional shaft work, which is done from the bottom up.

The blind-bore rig uses a rotary table powered by hydraulics, and water is continually pumped back into the hole so it is a closed-loop system, he said.

“Nothing is forcing the cutting bit into the ground except the weight,” Toepfer said.

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Turquoise Ridge Following a pattern of growth

By ADELLA HARDING Mining Quarterly Editor

GOLCONDA — Gold production is going up at the Turquoise Ridge underground mine in Humboldt County, while plans continue for a super pit at the mine site.

“Looking at the future, we see a huge open pit on top of a bigger underground,” Turquoise Ridge Joint Venture General Manager Nigel Bain said.

Barrick Gold Corp. operates the Turquoise Ridge Mine and owns 75 percent, while Newmont Mining Corp. owns 25 percent and processes the gold ore from Turquoise Ridge at its nearby Twin Creeks Mine.

Turquoise Ridge expects to complete a prefeasibility study in the fourth quarter of this year for the open pit project. The study could be followed by permitting efforts, if the ecoRoss Andreson/Mining Quarterly nomics show the project would be worthwhile.

“It’s a giant pit, and we’re trying to work on running the Luis Zamaya, left, of Winnemucca assists Fermin Solis, also of Winnemucca, as he operates a jackleg drill in February in a underground and the open pit simultaneously,” said Bain, who 10-foot-by 10-foot cut at the Turquoise Ridge underground mine in Humboldt County.

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Ross Andreson/Mining Quarterly

Mariano Martinez is a cager at the Turquoise Ridge underground mine operated by Barrick Gold Corp. in Humboldt County. He is awaiting passengers to take down into the mine. started at Turquoise Ridge in Aug. 1, coming from Barrick’s Goldstrike Mine, where he was the underground manager.

“It’s early days,” he said of the plan for a surface mine.

The pit and underground mine will operate together at least for 10 to 12 years, but the pit could take out the current shafts, which would mean possibly a new shaft and possibly ramps from the pit wall.

“It will have to be phased and measured so we don’t impact the open pit and underground,” Bain said.

“If we do the project, it will be the largest mine in the state,” said Lou Schack, Nigel Bain director of communications and community affairs for Barrick Gold of North America.

Gold production Turquoise Ridge produced 179,400 ounces of gold in 2011, compared with 163,400 ounces in 2010 for the joint venture, according to Don Mitchell, administrative superintendent.

The prediction for 2012 production is 223,000 ounces.

Barrick reported in its earnings report that Turquoise Ridge produced 34,000 ounces of gold for Barrick’s 75 percent share in the fourth quarter, down from 36,000 ounces in the 2010 quarter.

The mine produced 135,000 ounces for

Barrick for 2011, up from 124,000 the prior year.

“Production doubles by 2016,” said Rory Howell, chief engineer, reporting that Barrick plans to increase the fleet of haul trucks starting in 2013.

The underground has a mine life now that extends to 2039.

“We’re open at depth and down dip to the northeast,” Chief Geologist Simon Pollard said, reporting that a fourth mining zone will be added this year in the North Zone.

If the pit project moves forward, Turquoise Ridge would add roughly 700 employees to the 364 now at the underground operation.

The mine also has roughly 150 contractors, including DMC and drillers, Mitchell said.

Turquoise Ridge has six drills operating underground and 11 on the surface, and the companies doing the drilling include Conner, Boart Longyear, Major, TonaTec and Fred Anderson.

“We’re ahead on ounces and safety, and we’re a flagship in waiting,” Bain said of the mine that is growing in underground production and would be huge if the open pit is developed.

Although Turquoise Ridge production all comes from underground mining, See TURQUOISE, 16

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Ross Andreson/Mining Quarterly

Dusty Deputy of Winnemucca works on a jumbo drill that broke down at the Turquoise Ridge underground mine north of Golconda.

Turquoise ...

Continued from page 15 there is surface mining now. Contractor R.E. Monks continues to mine a quarry on site to produce about 40,000 tons a month of aggregate.

R.E. Monks has about 20 workers on site.

The aggregate is used for backfill used in the underground operations.

Backfill plant Work continues on an underground backfill plant in the North Zone, where the mining is now, and “that will greatly decrease the effort to haul backfill,” said Jon Baird, underground operations superintendent.

The $42 million plant is set for completion in 2013.

The project includes five bore holes from the surface, including two holes to transport the aggregate from the surface to underground, one for the fly ash, one for fuel and power and one for shotcrete, according to Howell. Boart Longyear is doing the bore holes.

Barrick had looked at building a conveyor to move ore because of growth, but Laird said the company dropped that plan in exchange for adding more trucks to the fleet.

The current drive underground from the main shaft to the mine workings is roughly two miles, and the workings are close to 3,000 feet down.

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“The deepest ore bodies go another 600 to 700 feet down from where we are now,” Pollard said.

Mining now involves pneumatic jackleg drills in 10-foot by 10-foot cuts, but Bain said the mine will be using narrow-vein jumbo drills and rock bolters to replace the jacklegs.

“We’re buying them for the narrow top cuts. It will improve safety and remove miners from the hazards of falling rock,” he said.

One narrow-vein jumbo is already on site from Sandvik.

“Sandvik is helping us with new designs for larger bolts for smaller drifts,” Bain said.

“We’re expanding the mine and getting new equipment and getting away from jacklegs to make the mine even safer,” he said.

Laird said one of the biggest challenges is with the bolter because of the boom size, so the boom is modified to take a piece of steel that then connects with another piece “so the boom has to be only 6 feet long, but we can still have 8-foot roof bolts.”

Safety record Turquoise Ridge’s safety record is at the best ever. The joint venture hit a milestone in February when employees See TURQUOISE, 18

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Turquoise ...

Continued from page 16 completed 872,675 hours worked without a lost-time injury in a full year of operations. A lost-time accident is one that causes an employee to miss the next scheduled work day.

“This is a testament to the dedication and leadership of the workforce at Turquoise Ridge,” said Jim Wieser, the outgoing health and safety superintendent who was moving over to Barrick’s Cortez Mine. “Safety is a focus for everyone from the manager to the latest new hire and that makes TR a great place to work.”

The mine also received Barrick’s award for most improved small mine in both 2011 and 2010, and a safety award from the Nevada Mining Association.

Turquoise Ridge and all Barrick operations also became certified with the International Standards Organization for the first time in 2011 and expect to continue to do so every year “from here on out,” said Turquoise Ridge Environmental Superintendent Mark Miller.

Barrick production Companywide, Barrick produced 1.81 million ounces of gold in the fourth quarter of 2011 at a cash cost of $505 an ounce, compared with 1.7 million ounces in the 2010 quarter.

For the year 2011, Barrick produced 7.68 million ounces of gold at a total cash cost of $460 per ounce, compared with 7.77 million ounces at a total cash cost of $409 per ounce.

North American production totaled 760,000 ounces in the fourth quarter, including strong performances from the Cortez and Goldstrike mines in Nevada.

Cortez in Lander County produced 283,000 ounces in the fourth quarter, up from 205,000 ounces in the 2010 quarter at a total cash cost of $331 per ounce, compared with $278 per ounce in the 2010 quarter.

The Goldstrike Mine north of Carlin produced 245,000 ounces in the 2011 quarter, compared with 288,000 ounces in the 2010 quarter. Total cash costs were at $570 per ounce, up from $435 per ounce in the 2010 quarter.

Barrick stated Goldstrike is expected to produce between 1.25 million and 1.3 million ounces of gold this year as the open pit moves back into a higher ore phase.

Barrick’s Ruby Hill Mine in Eureka

Ross Andreson/Mining Quarterly

Mechanic Inaki Hernandez of Winnemucca works on a 36-ton Atlas Copco haul truck in the underground shop at the Turquoise Ridge Mine in Humboldt County. He was a summer intern at the mine and trained at Great Basin College.

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Four workers chat next to a jumbo drill after it broke down at the Turquoise Ridge underground mine in Humboldt County. From left are: Jose Magana of Winnemucca, who has worked at the Turquoise Ridge Mine nearly nine years; Donovan Walker, who recently transferred from the Goldstrike Mine; Franciso Cervantes of Winnemucca, miner; and Joey Savoie of Winnemucca, utility crew.

Ross Andreson Mining Quarterly

County produced 29,000 ounces in the fourth quarter, down from 33,000 ounces in the 2010 quarter, and total cash costs were up at $500 per ounce, compared with $429 per ounce in the 2010 quarter.

According to Barrick’s earnings report, the Bald Mountain Mine in White Pine County produced 35,000 ounces in the 2011 quarter at a total cash cost of $695 per ounce, compared with 20,000 ounces in the fourth quarter of 2010 at a cost of $558 per ounce.

The Round Mountain Mine in Nye County produced 43,000 ounces for Barrick’s 50 percent ownership, the same as in the fourth quarter of 2010.

Total cash costs were $477 per ounce, down from $685 in the 2010 quarter.

The Marigold Mine in Humboldt County in which Barrick has one-third ownership, produced 14,000 ounces for Barrick in the fourth quarter of 2011 at a total cash cost of $835 per ounce.

That compares with 13,000 ounces at a cost of $720 per ounce in the 2010 quarter.

The Golden Sunlight Mine in Montana produced 19,000 ounces in the fourth quarter of 2011 at a total cash cost of $764 per ounce, with no comparison since the mine wasn’t in production in the 2010 quarter.

Barrick income Barrick reported net income for the fourth quarter of 2011 of $959 million, or 96 cents per share, which was similar to earnings in the 2010 quarter.

The fourth-quarter 2011 net income compared with $961 million, or 97 cents per share, in the 2010 quarter, while revenue rose to $3.79 billion, up from $3.01 billion in 2010, mainly because of a 22 percent higher realized gold price of $1,664 per ounce.

Higher costs affected net income, according to the Toronto-based company.

Adjusted net earnings were up 15 percent, excluding one-time items, to $1.17 billion, or $1.17 per share, compared with $1.02 billion, or $1.02 per share, in the 2010 quarter.

Barrick reported copper production rose to 143 million pounds in the fourth quarter of 2011 from 82 million pounds in the 2010 quarter.

Copper’s realized price was down, however, at $3.69 per pound from $3.99 per pound in the 2010 quarter.

Barrick’s proven and probable reserves at year end totaled 139.9 million ounces of gold and 12.7 billion pounds of copper, the company reported.

A B O V E : Mechanic Duane Schulze of Winnemucca works inside a haul truck in February in the underground shop at the Turquoise Ridge Mine that Barrick Gold Corp. operates north of Golconda.

LE FT: M e c h a n i c Ken Peterson does preventative maintenance on a haul truck in the underground shop at the Turquoise Ridge Mine.

Ross Andreson Mining Quarterly

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Barrick plans expansions under new managers

By ADELLA HARDING Mining Quarterly Editor

closed Casino/Winrock mines into one plan of operations, and Barrick plans to consolidate the Alligator Ridge and ELKO — Barrick Gold Corp.’s Bald Yankee mines into one plan of operaMountain Mine is planning its latest tions. expansion under a new general manager, Miller took over at Bald Mountain Tracy Miller. when Dave McClure retired after serving “It’s a great property. Because it is as the general manager there since 2006. geographically spread out and with so McClure oversaw the recently completed many pits, there are chalexpansion that included a lenges the larger and new new mining fleet. mines don’t have,” she Barrick’s Ruby Hill Mine said. on the outskirts of the Bald Mountain is a lowtown of Eureka also has a grade gold mine on 250 new general manager, square miles of property, Steve Yopps, who reported the largest acreage of plans are under way for a Barrick’s Nevada mine pit expansion. sites, but the operation is “I am excited to be small. working at Ruby Hill. The “The people have been site has a long history of really friendly, and that’s a safe, low cost production, good sign that the culture and I am looking forward Tracy Miller is good. There is more of a to becoming part of the family feel,” said Miller, great team that is here at who most recently was the mine,” Yopps said. manager of safety, health “During 2012, our team and security at Barrick’s will be focusing on Cortez Mine. growing business with a Bald Mountain has filed proposed pit expansion, plans of operation to which will secure Ruby expand mining, including Hill’s long-term future, going back to the Alligator and continuing presence Ridge Mine that has been in Eureka County,” he closed for some time. said.

Barrick is seeking permits Yopps joined Barrick in from the U.S. Bureau of 1994 after Barrick acLand Management for the quired Lac Minerals, and Steve Yopps project. he worked as chief metal“The BLM is tentatively lurgist at the Bullfrog scheduled in spring 2012 to seek public Mine near Beatty until transferring to input on two Barrick proposals to expand Goldstrike in 1996. the Bald Mountain Mine, located about He served in several superintendent 70 miles northwest of Ely and 30 miles positions before becoming manager of northeast of Eureka,” said Chris the process division in 2005.

Hanefeld, spokesman for the Ely BLM Miller joined Barrick in 1990, spending office. most of that time at Goldstrike, including Barrick is proposing to consolidate the several years as superintendent and manNorth Operations Area Project and ager of the open pit division.

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22 MINING QUARTERLY, Elko, Nevada SPRING 2012

COMMUNICATING WITH COMMUNITIES

Newmont’s Mary Korpi

By ADELLA HARDING Mining Quarterly Editor

ELKO — Mary Korpi arrived at Newmont Mining Corp.’s Carlin operations in 1987 in the midst of a mining boom, and she is now director of external relations for the company in the midst of another mining boom.

She has seen a lot of changes in those 25 years in Nevada, such as the company’s growing efforts to communicate with communities and work with cities and counties to prepare them for growth.

“We have a responsibility to let communities know,” Korpi said.

Most recently, Newmont representatives have been giving presentations to Elko County Commissioners and city councils in Elko, Wells and West Wendover to let them know the company’s plans for the Long Canyon Project.

Long Canyon will be a gold mine in the Pequop Mountains between Wells and West Wendover, the first major mining

operation in the east part of the county.

Newmont’s North American regional office in Elko is completing a social impact assessment for the Long Canyon Project so the company can better understand the impacts the new gold mine will have on the communities and whether there are impacts to mitigate.

“So we will look at what we need to do as part of the management plan,” Korpi said.

She said consultation with communities and Indian tribes is a company standard.

“I think there are multiple reasons. We need to understand what’s important to a community and what’s going on in communities, and they want to know what’s going on with Newmont,” she said.

Korpi said when she arrived in Nevada, Newmont was mining gold in what is now called the North Area, including at the original Carlin Pit, and were just completing an expansion project at Gold Quarry at what was then called Mill 5.

“It was a period of change and growth in the industry. There was a lot of activity

across northern Nevada. Housing was very tight,” she said.

The highest gold price in 1987 was $499.75 an ounce in 1987. Prices later plunged as low as $255 an ounce, but hit a high of more than $1,900 an ounce last year and were in the $1,700-$1,740 range in February.

Now, housing is tight again, and Newmont is working with several developers across northern Nevada to increase housing in Elko, Battle Mountain and Winnemucca.

“The direction we’re looking to pursue is a guarantee of occupancy for a set period of time,” Korpi said.

Developers can show that guarantee to obtain financing.

Although Korpi has been with Newmont in Nevada since 1987, she began working for Newmont in 1976 in Arizona when the company subsidiary Magma Copper owned the copper operations in San See KORPI, 24

Adella Harding/Mining Quarterly

Mary Korpi, director of external relations for Newmont Mining Corp.’s Nevada operations, has seen a lot of changes since coming to Nevada 25 years ago.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 23

Korpi ...

Manuel, which was a company town.

“When I started with Newmont, it was an international diversified mining company. Then it focused on becoming a gold company, and the hub was the Nevada operations,” Korpi said. “It was the T. Boone Pickens era.”

Pickens tried to acquire Newmont through a corporate takeover, but the company was able to fight the takeover.

“Now, over the many years, Newmont again is an international mining company, primarily in gold but copper too,” Korpi said.

Newmont spun off Magma Copper in 1987.

She said she is sometimes asked why she stayed with Newmont so long, and her answer is: “I was able to change jobs within the company versus changing companies to get a different job. The opportunities were terrific. Newmont still provides for people in the organization.”

Newmont also wants potential employees to want to work for Newmont and stay with Newmont.

“I wouldn’t have worked for this company for 35 years if I didn’t believe in what they do and how they do it,” Korpi said.

“When people enjoy what they are doing, they do it well and they do it safely.”

She came to Nevada as a senior metallurgist and continued in that position until she became director over the analytical and metallurgical services in 1988, a time when Newmont was designing and constructing an integrated laboratory and built the Rain Mine south of Carlin and Mill 4.

“Then I went over to loss control and was director of health and safety from 1990 to 1992,” said the native of Michigan’s Upper Peninsula.

Korpi’s next job was as mill and leach superintendent on the operations side for four or five years, when Newmont was mining along the Carlin Trend north of Carlin and at Rain south of Carlin “That was another brand new opportunity,” Korpi said.

She became manager of communications in 1996, and the job covered community relations as well.

Korpi said Newmont used to have only one person allowed to talk for the company but the world of communications has changed with the speed of technology.

“Now, we can get you to the experts, depending on the topic or issue,” she said.

Communication is important to explain the mining industry to the media and the public, but the industry didn’t do enough in the early days of modern

24 MINING QUARTERLY, Elko, Nevada SPRING 2012

mining, Korpi said.

“I think one of the battles of the mining industry is that many years ago, we didn’t tell our story. We still struggle,” she said, explaining this struggle is showing people how important mining is to individuals and to the nation and the world.

“Communications is not just with the media but with communities. We’re integrated,” Korpi said. “Our past reputation was boom and bust, and it’s not easy to change that opinion.”

The boom in social media also has meant Newmont has to keep up and be ready to respond.

Along with the extension of communication efforts, another change is Newmont’s focus even in a mining boom on the sustainability of communities once mining slows as ore runs out.

“With sustainability, we work to be sure communities are prepared for change,” Korpi said.

Newmont doesn’t want to wait until the end of mining is two years out but rather look 20 years into the future, Korpi said.

That’s also why Newmont started its Legacy Fund that includes an endowment fund that will build up over the years to help communities when mining slows.

“We want to build on it for 20 to 30 years,” she said.

Korpi also said a skilled workforce is

important for sustainability. Talents developed for mining can later be used for new jobs.

Her external relations department now has nine people, including her. There are representatives in Elko, Battle Mountain and Winnemucca, and another is assigned to the Wells and West Wendover communities.

“It’s so much about relationships. It takes time to build those,” Korpi said.

Each site has a committee to help the representatives make decisions on donation requests from nonprofit organizations.

The external relations department also handles mine tours for investors, analysts, media, lawmakers and staff, schools and special events. Newmont also provides summer tours to the general public.

The Newmont representatives work with the communities, but Korpi said the many Newmont employees who volunteer in their communities also have a role to play in community relations.

“This is home for them. It’s not unusual to see people with 20 to 25 years with the company and multi-generational too,” she said.

Korpi also said the mining industry is a small world, and those in the industry connect with friends, friends of friends and friends of family members throughout the business.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 25

Newmont miners busy north of Carlin

By ADELLA HARDING Mining Quarterly Editor

ELKO — Newmont Mining Corp. crews are mining north of Carlin at a new pit called Pay Raise, at Widge and at the original Carlin Pit — the oldest of Newmont’s mines on the Carlin Trend — and at the prolific Gold Quarry Mine.

Pay Raise is part of the expansion project in the Genesis District in Newmont’s North Area that will eventually produce 2.4 million ounces.

“We’re doing development work on it right now. There are some ounces up high we are putting on the leach pad,” said Nathan Bennett, senior mine engineer.

“Pay Raise will take us out to 2013.”

Widge is also producing ounces for the leach pad and is part of the original Blue Star Pit, and Bennett said reserves there were added last year. Mining started in 2011 on Widge.

“Widge will be done in April,” Bennett said.

The bigger Genesis Pit that is now called Silver Star isn’t being mined yet, however. He said mining there was delayed to do more work on waste rock characteristics — a provision of U.S. Bureau of Land Management approval of the expansion project.

The Blue Star Pit connected with Genesis back in the 1980s, Bennett said.

“Really, all these areas are part of the Genesis permitting. Originally, we had three phases, but now we’ve pulled out the small areas for quick placement of ore for the leach pads this year,” said Eric Bates, also a senior mine engineer for Newmont.

The original three phases were called Silver Star, Gold Star and Bob Star.

“Ore tons are still critical but are moved out into the 2013-2014 time frame,” Bennett said. “We will finish Gold Quarry phase 4 in 2013 so ore from Genesis will become critical then.”

“At the end of the day, we will still end up with the ultimate pit shapes. It all fits within the footprint of the original stars,” Bates said. “We will backfill pits as planned. Silver Star, Gold Star and Beast will be backfilled.”

In other words, once Gold Quarry in the South Area finishes phase 4 and is stripping phase 7, the emphasis will shift to the North Area to the Genesis area that is now referred to as the “stars” area.

Bates said the focus will be on Silver Star

26 MINING QUARTERLY, Elko, Nevada SPRING 2012

ABOVE: A 240-ton Caterpillar haul truck receives a load of material from a loader at Newmont Mining Corp.’s new Widge Pit that is part of the company’s expansion project in the Genesis District north of Carlin.

LEFT: Geologist Elizabeth Benge maps blast holes in February at Newmont Mining Corp.’s new Widge Pit in the Genesis District.

Adella Harding Mining Quarterly

and then on Gold Star.

“Gold Quarry comes back in the 20162017 time frame,” Bennett said.

Mining Carlin Pit Newmont also is back at the original Carlin Pit, and Bennett said the company is calling the new layback the East Carlin surface pit. This area is targeted for completion some time in 2013.

The mining there will take out the current Carlin East portal that leads to the Leeville underground mine, but there still will be a secondary Leeville access at Pete Bajo, which will go all the way to Leeville.

“We had to coordinate with the underground, Carlin East and Leeville, because Carlin East serves as an access and ventilation for Leeville,” Bates said. “Part of the project will be driving a new drift to move the access.”

The surface facilities at Carlin East underground also had to be relocated.

“It’s been a lot of work to this point to mine the layback,” Bates said.

There also is backfilling at one end of the Carlin Pit from the mining at the East Carlin layback. The current backfilling is on private land, but he said Newmont will submit a plan to the BLM for backfilling on the public land at the mine.

Newmont finished mining the Pete open pit in December 2009, and that area was then turned over to the underground mining people for the Pete-Bajo Mine, Bennett said. Reclamation is under way on the Pete waste dump.

The surface operations then turned Lantern 3 over to the underground late last year, but had been sharing the pit with the Exodus underground operations until that point. The Exodus portals are in Lantern 3 pit walls.

“Now, Exodus is working unhindered by us,” Bennett said. “It got pretty crowded.”

The surface mining took out an existing portal at Exodus that had to be relocated.

Lantern 3 and North Lantern, also mined out, could be joined in a later mining project, however.

Bates said Newmont is working on baseline studies and a plan of operations to later submit to the BLM for this potential project.

“One of the great things about the work here is we’re on a prolific gold trend. With the gold price rising, projects are coming out of the woodwork,” said Bates.

The portal for the Deep Star underground mine is in the Silver Star Pit, but

ABOVE: The Silver Star Pit, originally called the Genesis Pit, will be mined again as part of Newmont Mining Corp.’s expansion project in the Genesis District of the Carlin Trend.

LEFT: Eric Bates, left, and Nate Bennett, senior mine engineers for Newmont Mining Corp., check a blast pattern at the East Carlin expansion of the Carlin Pit in Newmont’s North Area.

Adella Harding Mining Quarterly

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Newmont ...

Continued from page 27 Small Mine Development finished mining there at the end of last year.

Bates said the biggest things for the surface operations north of Carlin in 2011 were completion of the remediation of the pit slide area at Gold Quarry, resumption of mining at Gold Quarry, mining in the North Area and “prep work for the bigger star projects.”

Later expansion at Gold Quarry for phases 8-10 will require an environmental impact study, Bates said, but no plan of operations has been filed with the BLM yet.

Gold production All of Newmont’s Nevada operations combined, surface and underground, produced 1.741 million ounces of gold in 2011 at a cost of $603 per ounce, according to Newmont’s production report.

The Nevada mines produced 1.735 million ounces in 2010.

Newmont forecasts that Nevada mines will produce between 1.725 million ounces and 1.8 million ounces of gold this

year at a cost of $575 to $625 per ounce.

Companywide, gold production totaled 5.2 million ounces in 2011, and the forecast for gold production this year is 5 million to 5.2 million ounces, stated Newmont.

Newmont stated it used a gold price of $1,500 an ounce and a copper price of $3.50 per pound, along with an oil price of $90 a barrel, for the 2012 forecasts.

The Colorado-based company’s forecast for copper production this year shows a downturn to between 150 million and 170 million pounds, compared with full-year production of 206 million pounds in 2011.

“Copper production is expected to decline in 2012 largely as a result of Batu Hijau entering the stripping campaign (removing waste layers) in order to access the next layer of ore,” said Newmont spokesman Omar Jabara. “This has always been part of the mine plan for Batu Hijau.

“Also, copper production was higher than expected in 2011 at Batu Hijau due to the delay in the onset of the rainy season, allowing us extended access to the ore in the bottom of the pit,” he said.

28 MINING QUARTERLY, Elko, Nevada SPRING 2012

Adella Harding/Mining Quarterly

A Pit Viper blast-hole drill rig operates at Newmont Mining Corp.’s Carlin Pit, where the East Carlin layback is under way.

Companywide, Newmont produced 1.3 million ounces of gold and 48 million pounds of copper in the fourth quarter of 2011, down from 1.4 million ounces of gold and 74 million pounds of copper in the 2010 quarter.

Companywide, costs applicable to sales for the fourth quarter averaged $606 per ounce of gold and $1.58 per pound of copper produced, with the 2011 costs at $592 per ounce for gold and $1.26 per pound of copper.

Costs will be up this year, however, according to Newmont, to between $625 and $675 per ounce of gold and $1.80 to $2.20 per pound for copper production.

Newmont’s average realized gold price for the fourth quarter of 2011 was $1,670 per ounce, compared with $1,368 per ounce in the 2010 quarter.

The average realized copper price was $3.41 per pound in the 2011 quarter, compared with $4.52 per pound in the 2010 quarter.

The company reported the average realized gold price for all of 2011 was $1,563 per ounce of gold and $3.54 per pound of copper, while the average realized price for gold in 2010 was $1,222 per ounce, and the realized copper price was $3.43 per pound.

The company also reported consolidated capital expenditures of $3 billion for last year and forecasts spending between $3 billion and $3.3 billion this year.

This year’s spending includes 40 percent for sustaining operations and 60 percent for growth projects, including further development of the Akyem Project in Ghana and potentially the Conga Project in Peru, Newmont stated.

The company suspended development of the Conga Project on Nov. 30, 2011, because of protests, and Newmont’s already approved environmental impact study of the project in the vicinity of Newmont’s Yanacocha Mine was under review as efforts continue to resolve the issues.

Buenaventura is a partner with Newmont in the Peru projects.

Newmont stated in footnotes to its production report that if it drops its Conga plans, the company may reallocate capital to development alternatives in Nevada, Australia, Ghana and Indonesia.

Adella Harding/Mining Quarterly

Derek Sikes, left, of Newmont Mining Corp.’s external relations department, looks out over the new Pay Raise mining area as Eric Bates, a senior mine engineer, describes the project.

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Mining to start soon at Emigrant

By ADELLA HARDING Mining Quarterly Editor

CARLIN — Newmont Mining Corp. plans to start mining at Emigrant south of Carlin in April, so the site is bustling with construction projects now.

Plans call for starting mining on Phase 1, and all the pits — eight planned — are named as phases at Emigrant, which will employ roughly 120 people, according to Rocky Pray, the project manager for Emigrant.

“We still have quite a few to hire,” he said. “We will start with 25 operators and 25 mechanics. Later we will go to 145 people.”

The current life of the mine for Emigrant is 10 years.

Employees are receiving their training at Newmont's Gold Quarry Mine north of Carlin, on the 150ton Caterpillar haul trucks rebuilt for Emigrant and to be moved to Emigrant soon.

Pray said there will be six or seven haul trucks at Emigrant, which will be a heap leach operation.

Emigrant is a low-grade ore deposit that will be mined in the pit phases, with the mined-out pits backfilled so that only the final pit won’t be covered again.

“We will start with a waste rock dump that will be reclaimed,” he said. “On the pits, we’re going from the

30 MINING QUARTERLY, Elko, Nevada SPRING 2012

Rocky Pray, project manager for Newmont Mining Corp.’s Emigrant Project south of Carlin, talks about construction progress. The new process plant is at left and new leach pad at right.

Adella Harding Mining Quarterly

southern area north. One of the last will be at the highest elevation.” The top of the Emigrant site is at 7,400 feet.

Emigrant is expected to produce roughly 80,000 ounces of gold a year, according to earlier reports from Newmont.

Contractors are completing the interior of the processing plant now that the steel structure is in place, the leach pad is nearing completion, a haul road is under construction at Emigrant, and construction work continues at the shop and administration facilities at the Rain Mine that is now called Emigrant.

Newmont’s construction manager, Rick Stewart, said the contractor workforce peaked at 120.

Development has moved right along.

“We started moving dirt last April and in 15 months from then will be pouring gold,” said Kyle Empey, the project administrator.

Pray said the carbon-in-leach plant will be commissioned in June.

“We expect to see the first ounces in July, and the first commercial operations will be in late August,” Pray said.

Development at Emigrant is a boon to Elko County too. Newmont’s Carlin oper-

A bulldozer works on a haul road in the foreground at the mining site at Newmont Mining Corp.’s Emigrant Project south of Carlin. A pit wall is starting in the sunlit area in the background.

Adella Harding Mining Quarterly

See EMIGRANT, 33

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32 MINING QUARTERLY, Elko, Nevada SPRING 2012

Emigrant ...

Continued from page 31 ations except for Rain, when it was open, and now Emigrant, are in Eureka County.

“We’ve been working extensively with Elko County on building permits,” Pray said.

At the former Rain site, contractors in midFebruary were increasing the door size on the shop for larger haul trucks and building a lubrication storage building. Continental Engineering is the overall contractor for the steel work.

From the shop, it is two miles to the Emigrant ready line for haul trucks and three miles to the new processing plant.

The steel processing plant is erected and work has started inside, and High Mark Construction had nearly completed the leach pad. Newmont’s crew is using bulldozers to clear grub where the mining will be.

“Phases I and II are cleared and grubbed, and we’ve established the first high wall,” Pray said.

“And we’re building a road from where the contractor left off for the north haul, for pit access.”

The outlet structure for the permanent diversion of a stream also is complete. The stream will be diverted as part of the mining project that the U.S. Bureau of Land Management Elko District

Work is under way in the interior of the new steel structure that will become the ore processing plant at Newmont Mining Corp.’s Emigrant gold mine project south of Carlin.

Adella Harding Mining Quarterly

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SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 33

Emigrant ...

Continued from page 33 approved after extensive study.

Run-of-mine ore will be placed on the leach pad, processed at the plant and the carbon transported to Gold Quarry for final processing and refining.

Ashley Chancellor, metallurgist for Emigrant, said there also is a small laboratory being built at Emigrant, but the main lab support for Emigrant will be at Gold Quarry.

“What we do here will be heap leaching solution samples,” she said.

Pray said the first equipment deliveries for the process plant were expected in the last part of February.

Stewart said in mid-February that the earthworks infrastructure was 95 percent complete at Emigrant, and Pray said the leach pad work was 95 to 98 percent complete and would be done by March 1. The pad will hold roughly 100 million tons.

A ready line is already completed for the haul trucks, and a rebuilt Hitachi hydraulic shovel is on site, with an 18-cubic-yard bucket as well as a new Atlas Copco blast-hole drill, and Pray said Emigrant also is getting a new Caterpillar loader with a 16-cubic-yard bucket.

Also at Emigrant, there is still exploration drilling but mainly definition drilling, and the Gold Shape mineral resource has potential, depending upon the gold price, Pray said.

Exploration on the other side of Rain is being done by Premier Gold, which has an agreement with Newmont and plans an underground operation from the mined-out Rain Pit or nearby.

“We’ll look at sharing the property,” Pray said regarding the former Rain facilities site.

Newmont also maintains the 13 miles of access road from the Carlin-Eureka Highway to the gate.

34 MINING QUARTERLY, Elko, Nevada SPRING 2012

Premier to go underground at Rain Mine CARLIN — Premier Gold Mines Ltd. plans to go underground to explore and then mine at Newmont Mining Corp.’s Rain Mine site south of Carlin under a joint venture agreement.

“This is exciting,” said Premier Chief Operating Officer Paul Huet. “It will be a big leap for us” to turn Premier into a mining company. “Our hope and intention is to build up to 800 to 1,000 tons a day.”

Ontario-based Premier will acquire a 55 percent interest and be the project operator, and Newmont will acquire a 45 percent interest in the joint venture, according to Premier.

The company also announced that Newmont agreed to process the ore at a prearranged milling rate. The processing facilities are within 20 miles of the property.

Huet said the planned underground operation also has the benefit of infrastructure

already in place.

Under the joint venture plan, Premier and Newmont will each contribute lands along the “Rain Trend” to consolidate the Rain Mine and Saddle and Tess gold deposits.

Newmont operated Rain from 1988 and 2000 as an open pit and underground operation, with more than 950,000 ounces of gold produced over the years.

There is no mining now, but Newmont is updating and expanding the Rain truck shop and offices for the nearby Emigrant Project.

Newmont is developing Emigrant into a surface mine.

Premier will acquire the 55 percent ownership by contributing one section of land, waiving its existing right of payment under the Rain and Emigrant royalties and contributing $20 million in development expenditures.

Newmont will acquire its 45 percent interest by contributing three land sections, full site access to the infrastructure and access to contractor and supplier relationships and discounts, according to Premier’s announcement.

Premier stated the Saddle-Tess gold deposit is along strike from the underground ramp of Rain, and there may be open pit resources available. The company said this deposit is one of the most prospective deposits not yet developed on the Carlin Trend.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 35

VIEWPOINT

Gold for oil?

By JOHN L. DOBRA

Gold markets have been relatively quiet since hitting a high at $1,895 in September (London PM fix). There has been a gradual slide into the low $1,700 range after the U.S. Congress raised the limit on the national debt at the end of 2011.

In my last contribution, I predicted that gold prices would fall back after that run up, but it was an easy call. Central banks were dumping dollar-denominated assets and buying gold. The only reason dollar denominated assets and the dollar did not sink more is that the Euro and other currencies were weaker thanks to the Greeks, and others.

But the story moves to the second verse, and the second verse is much like the first, but with a twist. The U.S. Congress will soon be taking up another measure to raise the debt limit. And, in case you haven’t

noticed, it’s an election year. This is likely to be another down-to-the-wire partisan battle that could very well spark another gold rally. But, like the last (the first verse), I wouldn’t get too excited about it. It will be short-lived because Congress will raise the debt limit or face significant short term consequences — downgrades of the U.S. credit ratings, dollar devaluations, etc.

The twist comes from the unusual mix of circumstances created by U.S. and European Union sanctions imposed on Iran because of its nuclear program and the growing demand for oil by developing countries without domestic oil resources like India and China. Because of the U.S. and E.U. sanctions, banks that do business with Iran will be barred from engaging in financial transactions with banks in the U.S. and E.U. Sanctions like this worked effectively

36 MINING QUARTERLY, Elko, Nevada SPRING 2012

against North Korea several years ago, but North Korea doesn’t have much to sell.

Iran, obviously, has oil, and India and China want it. India and China also want to trade with the U.S. and E.U., and this requires financial intermediaries, i.e., banks.

So what to do? Numerous websites (just Google “gold for oil” and you can see them) were reporting at the end of January that India and China are negotiating with Iran to buy oil with gold. The governments, of course, are denying it.

Some of the reports express doubts on the practicality of the scheme and, indeed, it would involve high transaction costs.

But, the scheme is simple. Iranians take the physical gold to Dubai (or somewhere else) and sell if for cash — dollars or euros, e.g. Then take the cash and deposit it in a bank in an Iran friendly country like Russia and use it to buy military supplies or other goods from Russia.

Alternatively, they could simply pay for their purchases with gold. Even a humble economics professor can figure out that there are no fingerprints left after this deal. Iran’s problem, however, is that there are a limited number of countries and banks that will deal with it on this basis.

But, the natural question is what will

this do to the price of gold? In the short run, not much. The annual oil trade between Iran and India would only require about 7.2 million ounces, according to one source. India easily has that much and can buy more. Twenty-two million ounces sell each month in the London Bullion Market, so the market is highly liquid.

The larger question for the long run is what this precedent would mean for the use of the U.S. dollar as a reserve currency and the use of gold in international financial transactions. If the practice gets more common in the long run, that could have implications for the price of gold.

It certainly “sends a thrill up the leg” Gof gold bugs, hard money advocates, etc., for perverse reasons. But then, John Maynard Keynes did say gold was a “barbarous relic.” That is the reason that one of the sites that turns up in a Google search is presidential candidate Ron Paul’s. He has long been an advocate of cutting back the authority or eliminating the Federal Reserve and returning to the gold standard. I don't think that will happen, but the gold for oil deal gives them hope.

——————— Dr. Dobra is director of the Natural Resources Industry Institute and associate professor of economics at the University of Nevada, Reno.

FULL STEAM AHEAD AT

Rochester

By ADELLA HARDING Mining Quarterly Editor

Ross Andreson/Mining Quarterly

LOVELOCK — Coeur d’Alene Mines Corp.’s Rochester Mine in Pershing County is back in full production after a year of construction and getting back in gear to mine and process silver.

“We’re looking great. In 2011, we ramped up from 30 people to now around the 225-226 range,” said Rochester General Manager Cindy Jones. “We’re in full production. We’re off and running and going strong.”

The employees range from experienced miners who came back to Rochester or came to the mine for the first time last year to those who had to be trained on site, including young people just out of high school, she said.

“We’ve done quite a bit of training. Sixty percent of the workforce is from Pershing County, and we have people who came out of the construction industry and still live in Sparks or Reno, and some come from Fernley and Fallon,” Jones said in February.

Rochester also was the first to pick up miners when the gypsum

Cindy Jones, general manager of Coeur d’Alene Mines Corp.’s Rochester Mine in Pershing County, explains in February where ore is being mined. Below is the new backfill area in the Rochester Pit.

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Rochester ...

Continued from page 37 plant at Gerlach went out of business last year, she said.

Rochester’s production is 98 to 99 percent silver, and the rest is gold, depending upon where in the pit the mining is occurring, Jones said. Some areas may be higher in gold ore.

“We’re a silver mine. We have been a silver mine over 25 years,” Jones said.

The mine marked its 25th anniversary last September.

Rochester was in residual leaching before receiving U.S. Bureau of Land Management permits to resume mining on site, after ending mining in August 2007 when Coeur ran out of leach pad space. Rochester received the main BLM permit in October 2010 and the final permits in February 2011.

High silver prices in the range of $30 an ounce and above, as well as high gold prices, “definitely helps” with Rochester’s new operations, Jones said, but she cautioned that costs have gone up for diesel, tires, supplies and labor.

Mining is in the Rochester Pit at the south, north and west ends. The east end is where the crusher is located.

The mining includes removing the end pit backfill to process again now that prices are higher.

“Where it wasn’t ore then, it is ore today at these prices,” said Jones, who has been with Coeur since May 2005.

Silver has been in the range of $30 to $34 an ounce in

38 MINING QUARTERLY, Elko, Nevada SPRING 2012

Ross Andreson/Mining Quarterly

A long conveyor system takes ore from the crushers to the load-out spot at the end for placement on the new Stage 3 leach pad at the Rochester Mine in Pershing County.

2012, while gold has been in the range of $1,700 to $1,750 per ounce.

Before full production began, a buttress had to be constructed at the south wall for the conveyor system, and miners are now building a new lift of waste ore in

the original area of the Rochester Pit. New ore is now going on the new leach pad, although there is still work to be completed on this stage 3 pad.

Peavine Construction out of Sparks is doing the leach pad construction. This is that company’s first mining

project, Jones said.

Comanco installed the liner, which mainly came from Fernley, where it is manufactured.

The ore goes to the refurbished Overland crusher system and then onto a conveyor that takes it to the leach pad area, where a haul truck loads the ore for the final trek to the pad.

Rochester’s eight new 100-ton Caterpillar haul trucks are all in action, and the mine has two new Caterpillar loaders with 18-yard buckets and two bulldozers, also Caterpillars from Cashman Equipment.

Jones said Rochester also has two new blast-hole drills from Cate Equipment.

“Cashman Equipment has six people on site for maintenance and repair,” she said. “They help us with the new fleet and we also have our own mobile maintenance crew.”

Purcell Tires has two representatives on site, Jones also said.

Rochester had two haul trucks that were on site before the resumption of mining, and they are used primarily to haul the ore to the leach pad from the conveyor.

The conveyor system is roughly one mile long and was constructed from new and old segments, and Rochester is installing new fabric covers over the conveyor belt.

“This helps with the weather and air quality,” Jones said.

Rochester also is planning for expansion. The current plan of operations takes Rochester into 2017, and the See ROCHESTER, 40

Ross Andreson/Mining Quarterly

A haul truck fills up at the end of the conveyor system with finely crushed ore to take to the leach pad at Coeur d’Alene Mines Corp.’s Rochester Mine in Pershing County.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 39

Ross Andreson/Mining Quarterly

Loaded haul trucks head out in February at Coeur d’Alene Mines Corp.’s Rochester silver mine near Lovelock.

Ross Andreson/Mining Quarterly

A haul truck dumps ore at the start of the crusher system at the Rochester silver mine near Lovelock. Once the ore is finely crushed, it goes on a leach pad.

Rochester ...

Continued from page 39 latest plan is for the next phase of mining.

Jones said Rochester completed the baseline studies for the expansion last year and is about to submit the plan of operations to the BLM’s Winnemucca office to start the permitting process.

The new plan would allow more leach pad space.

40 MINING QUARTERLY, Elko, Nevada SPRING 2012

The new stage 3 pad now can hold 50 million tons of ore, while the stage 2 pad is still in residual leaching, as is the stage 4 pad. Stage 1 is reclaimed. Stage 3 is a valley fill pad with an external draining system. In addition to the pregnant (with silver) and barren ponds, there is a contingency pond.

“We have realized we will get more tons than the new leach pad can hold as

we do more mining, and exploration only adds to the value,” Jones said.

“We’ve got a full-blown exploration program this year,” she said.

Rochester has three O’Keefe Drilling rigs on site.

Rye Patch Gold Corp. also is exploring in the area, after staking the claims around Rochester than Coeur didn’t renew by deadline. The two companies are in a court battle.

A district court decision prohibits Rye Patch from exploring near active mining operations at Rochester, but the company is exploring in the neighborhood on former Rochester claims.

“I feel at the end of the day, we will succeed,” Jones said of the court case.

Additionally, Rochester submitted its final closure plan, even though “we don’t plan to close for 15 plus years,” Jones said. The closure plan was part of BLM’s requirements when the agency permitted resumption of mining at Rochester under an environmental assessment.

Coeur’s expectation that Rochester will be operating for a long time also spurred the company to contract with consultant Elaine Barkdull Spencer to help the Lovelock Chamber of Commerce and the county’s economic development agency to “get back up and going again.”

Rochester’s layoffs when mining ended affected Lovelock, which is the nearest community to the mine.

“Coeur wants the area to sustain itself, whether mining is around,” Jones said.

On the safety front, Jones said Rochester has gone 1,740 days without a lost-time accident.

Coeur d’Alene Mines Corp.’s Rochester silver mine in a valley in Pershing County is now using the new Stage 3 leach pad.

Ross Andreson Mining Quarterly

At the corporate level, Coeur announced in January that Randy Buffington is the new senior vice president of operations overseeing the company’s silver and gold mining operations worldwide. Buffington was general manager at Barrick Gold Corp. operations, including the

Goldstrike Mine north of Carlin.

In addition to Rochester, Coeur owns the San Bartolomé Mine in Bolivia; the Palmarejo silver/gold mine in Mexico and the Kensington Gold Mine in Alaska.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 41

Coeur, Rye Patch go to trial in November

By ADELLA HARDING Mining Quarterly Editor

ELKO — Coeur d’Alene Mines Corp. and Rye Patch Gold Corp. expect the next district court action in Lovelock in November over their claims dispute.

“The trial is expected to run for approximately two weeks in early November,” said Stefany Bales, director of corporate communications for Coeur.

She said the discovery process is under way, during which both sides are gathering evidence.

Rye Patch filed claims in the Rochester vicinity late last year, after the company discovered Coeur hadn’t paid its claim fees, and the two companies ended up in court.

“We decided to stake the open ground,” said Rye Patch President and Chief Executive Officer Bill Howald.

They are now working under a ruling that prevents Rye Patch from exploring near Rochester operations but allows Rye Patch to explore outside the mining area.

“It is a high threshold to achieve an

injunction. We are pleased with the outcome of the hearing in December and are continuing to prepare for trial in November. In the meantime, operations continue at the Rochester Mine,” Bales said.

“The undisputed facts are they didn’t pay the claim fee on 541 claims, and they didn’t realize that for three months when I called and told them,” Howald said in an interview in February.

The court action was over 402 senior LH claims, according to earlier reports.

Rye Patch has two drill rigs operating on the Rochester claims, but can’t explore 1,828 acres of the claim area that covers 7,493 acres. The prohibited area includes the open pit, leach pads and waste dumps.

Howald said that by law the claims were open when Coeur failed to file.

As for a possible settlement with Coeur, Howald said “the ball is in their court.”

“We will continue to pursue our legal complaint against Rye Patch Gold, filed on Dec. 5, 2011, to protect our rights in

42 MINING QUARTERLY, Elko, Nevada SPRING 2012

Crushed ore moves along the lengthy conveyor on its way to be leached at the new Stage 3 pad at Coeur d’Alene Mines Corp.’s Rochester Mine near Lovelock.

Ross Andreson Mining Quarterly

the disputed unpatented claims at the mine. We assert valid possessory rights and superior title in the legal dispute.

Any potential discussions of settlement would be speculative at this point,” Bales said.

Coeur stated in a December announcement that the company filed a legal complaint in Pershing County,

asserting that its unpatented claims are valid and that it has a valid possessory interest in such claims.

The company is seeking damages and an injunction preventing Rye Patch Gold from interfering with its claims.

Rye Patch filed a suit in district court in Reno, but Howald said the two lawsuits have been consolidated.

Rye Patch Gold Corp.

This map shows the projects Rye Patch Gold Corp. has in northern Nevada, including on the Oreana Trend and on the Battle Mountain-Eureka Trend.

Rye Patch focuses on finding gold

By ADELLA HARDING Mining Quarterly Editor

ELKO — Rye Patch Gold Corp. currently is drilling on claims near Coeur d’Alene Mines Corp.’s Rochester Mine in Pershing County, but the company plans more drilling at other projects, including near Barrick Gold Corp.’s newest discoveries at the Cortez Mine.

“We’re looking for mineral resources,” said Rye Patch President and Chief Executive Officer William Howald. “We’re good at finding gold. It’s a good hand-inglove fit.”

The exploration company has 3 million ounces of gold and 40 million ounces of silver resources at its Wilco, Lincoln Hill

and Jessup projects in Pershing County, but hopes to expand the resources with continued exploration.

High prices for gold and silver are enticing, and Howald said there “really are supply and demand issues with gold. The price goes up when there is a strong dollar and when there is a weak dollar, when bonds are strong and with lower bonds.

“Gold miners can’t find it as fast as they can mine. Gold is hard to find, and it is getting harder to find,” he said.

When it comes to hunting for gold and silver, Howald is sold on Nevada.

“There is great infrastructure. There is rule of law here. It is certainly one of the See RYE PATCH, 44

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 43

Rye Patch ...

Continued from page 43 best places to mine in the world,” he said in a telephone interview in February.

The gold price was in the range of $1,700 to $1,750 an ounce in the first part of February.

Rye Patch’s resource total that includes 1.2 million gold equivalent ounces of measured and indicated resources and 2.7 million ounces of gold equivalent inferred resources doesn’t include the controversial claims near Rochester, however.

Rye Patch filed on 541 claims when Coeur d’Alene Mines failed to pay claim fees by deadline last year, according to Howald. Rye Patch also staked another 60 claims in the vicinity in January.

“They didn’t pay the claim fees, and they didn’t realize that for three months until I called and told them,” said Howald, who is locked into a lawsuit in district court in Lovelock over the claims.

A court ruling allows Rye Patch to explore on claims that are outside the Rochester operations area but not within the mine site because of safety issues while the lawsuit is pending further action. The prohibited area is 1,828 acres, including the pit, waste dumps and leach pads.

Rye Patch has two drill rigs operating near Rochester, one at the Mystic discovery and one on the Northwest Rochester target, but the company has been on the Oreana Trend since 2006, Howald said.

The company has claims from Interstate 80 south to the Rochester Mine.

Including the Rochester claims, the company has 1,100 claims in Pershing County, as well as 200 in Churchill County and 800 claims in Eureka County south of Barrick’s Goldrush and Red Hill discoveries.

Howald said Rye Patch is in a joint venture with Barrick and US Gold on the Patty Project, where Rye Patch is earning in for 60 percent of the project. Barrick will have 24 percent and McEwen Mining, formerly called US Gold, 12 percent.

Chapleau Resources would have 4 percent.

He said the Patty Project has potential.

When he worked for Placer Dome, later acquired by Barrick, there was more than 300 feet of 0.012 ounces per ton of gold found there in 2005.

“We had a little different idea of what’s important. Now, with Barrick’s announcements, we will follow up those ideas,” Howald said.

Rye Patch also has the Garden Gate Pass Project in the vicinity.

He said drilling found thick intercepts

of Carlin-style rock that wasn’t oregrade, “but we hit gold.”

Howald said Rye Patch plans to drill at Patty and Garden Gate this summer.

Barrick is on three sides of Garden Gate, which involves five square miles of land and is roughly five miles south of Patty and about a mile and a half away from Goldrush.

They are on the Cortez Trend that was always viewed as “the little sister to the Carlin Trend,” but is fast becoming a major gold producer with the Cortez Mine encompassing the newest Cortez Hills operations, the earlier Pipeline site and now the new Red Hill and Goldrush discoveries Barrick produced 1.4 million ounces of gold in 2011 at Cortez.

On the Oreana Trend, Rye Patch plans a resource update, and the company will be putting out a new resource for the Lincoln Hill Project, according to Howald.

“Wilco has over 3 million ounces of gold equivalent, and the majority is oxide.

It’s along the interstate and good infrastructure. The metallurgy is very positive,” he said. “We will drill more at Wilco.”

At Lincoln Hill, “we keep getting good surprises,” Howald said, adding that the company plans more drilling there.

The Gold Ridge Project also is in the area and a newer project, where drilling has found “potentially another deposit,” he said.

The Gold Ridge Project is west of Lincoln Hill.

“We’re really excited about Rochester,” he also said, pointing out that even Coeur stated that the claims Rye Patch now holds represent a portion of the company’s reserves and resources.

“We have new drill holes and new ideas,” Howald said.

The company announced in January that it planned 30,000 feet of drilling at Mystic and Northwest Rochester in the initial campaign but later planned more drilling at Limerick Basin, Independence Hill and Black Ridge Fault.

The Rochester area is mainly silver, but Wilco is more gold and Lincoln Hill is more gold but with good silver grades.

Howald also said the company has been fortunate to have good relations with drilling companies so it is able to book rig for its projects at a time when so much exploration is under way in the state.

In total, Rye Patch controls 25.5 square miles of land in Nevada. The company has an office in Reno and corporate office in Vancouver.

44 MINING QUARTERLY, Elko, Nevada SPRING 2012

Barrick, Newmont hiring continues

By ANDREA GLOVER Mining Quarterly

ELKO — Hiring growth in the mining industry is not expected to level off any time soon — providing trained workers a chance to work in the competitive industry.

Newmont Mining Corp. and Barrick Gold Corp. created large gains in hiring during 2011, and the trend is continuing.

Both companies have released the estimated number of new employees they expect to hire for their respective Nevada operations — and each expects large gains.

“I know the interest is on employment, investment, what does that future look like,” Mary Korpi, Newmont’s director of external relations, said in January.

In Newmont’s Nevada operations, 600 positions were filled throughout 2011, with 200 being for new jobs.

Barrick’s job growth was more than double Newmont’s in 2011 — with 1,450

“50/50 split” between Carlin positions filled. Of these, 871 were and Elko, and Battle Mountain new positions, and the turnover and Winnemucca. She anticiwithin Barrick was about 13 perpated about 150 of Newmont’s cent, including retirements. new employees for the This increase in hiring was due upcoming year would reside in part to the development of the within Elko.

Cortez Hills operations and the Barrick’s number of Nevada expansion at Bald Mountain, employees is slightly larger — at according to Lou Schack, director 3,900 — and creates more of an of communication and commuimpact on the area. nity affairs with Barrick.

Schack estimated about 75 Barrick’s numbers for the percent of their Nevada workupcoming year are lower than in force resides in Elko and Spring 2011, while Newmont’s are holdCreek — or approximately ing steady.

Korpi said Newmont anticiAdella Harding/Mining Quarterly 2,900 people.

With the new positions being pates hiring an additional 600 Mining projects are providing jobs and boosting the economy in employees this year, of which 200 northeastern Nevada. Haul trucks line up in February at Newmont created during the year, Schack to 300 of the openings will be due Mining Corp.’s Carlin Pit, where an East Carlin layback is under way. said he anticipated more than 200 of the individuals filling to new jobs. them would be living in the Elko Barrick’s turnover should be a number of mines, including Bald around 500 employees, with the addition Mountain with 30 new positions, 40 at and Spring Creek areas.

Both Schack and Korpi acknowledged of 300 new positions.

Cortez, 10 at Ruby Hill and 40 at Turtheir respective companies create both The largest gains will be at Goldstrike, quoise Ridge. with the addition of 120 new employees.

Of the 3,800 people Newmont emThe remainder are scattered throughout ploys, Korpi estimated they lived in a See HIRING, 47

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 45

Nevada mining industry fills hotel rooms

By ANDREA GLOVER Mining Quarterly

ELKO — Elko provides a stark dichotomy with the remainder of the state.

The area has the lowest unemployment rate across Nevada, due mainly to the high price of gold and a booming mining industry.

While Las Vegas can’t seem to keep people in houses, in Elko there simply aren’t enough houses or apartments to hold the people coming in — leading many individuals to call a hotel a home.

Within Elko city limits, there are 1,890 rooms available, split between 31 hotels and motels. As a regional hub, the city frequently is home to guest workers — about 400 workers stayed in Elko throughout 2010-2011 while working on the Ruby Pipeline. However, as growth in the mines continues, the number of individuals flocking to Elko for miningrelated industries grow in stride.

At the Thunderbird Motel, the majority of rooms now booked are by those who work in conjunction with the

Contractors and workers stay at Elko motels and hotels while working in the mining industry.

Ross Andreson Mining Quarterly

mining industry.

“Probably 90 percent of our rooms are taken by something to do with mining,” said Laura Call, manager of the Thunderbird Motel. The motel has 70 rooms available, most of which are frequently occupied.

46 MINING QUARTERLY, Elko, Nevada SPRING 2012

The majority of individuals stay anywhere from three days to seven days, and many are repeat customers who are either employed by a mining or drilling company.

“Most of them, they’re only here for a short period of time,” Call said, who

added that many are only on the job for a month or two and therefore are not interested in purchasing a house in the area.

Call said she can tell growth in the mining industry is strong.

“We’ve never been so busy,” she said.

The situation at the Thunderbird is no longer unique.

At American Inn, 12 of the 19 rooms are currently occupied by individuals who work in an industry related to mining.

According to manager Sam Bhakta, the motel generally ranges between 10 and 12 rooms occupied by these extended-stay guests. The amount of time these individuals tend to stay varies, Bhakta said. Some stay one week, some 10 days and others two weeks, “then they go home and come back” and repeat the process.

This process of repeat customers is also seen at Elko’s Economy Inn, according to manager Vikash Bhakta.

Of the 18 rooms available, about 10 are routinely occupied by those who work in

mining-related industries.

“We mostly have the Boart Longyear guys,” Bhakta said, who “come on and off.” He added most of these individuals stay for four days before leaving Elko, and return later.

Drilling workers are also prevalent guests at the Elko Motel.

“Most of them are (with) drilling companies, we have a few that work at the mines,” said manager Aida Mathews of the individuals staying at the Elko Motel.

“We have quite a few of them, but they are on and off,” she added.

Many of Elko Motel’s customers are repeat customers — staying for a week or two before going on break and leaving, only to return later.

Mathews estimated that 25 percent of the 32 rooms are taken by occupants working in a mining-related field.

For larger companies who plan on being in the area for an extended period — such as Ruby Pipeline did for its workers last year — they may contract out with a hotel to house their workers.

At the Best Western Elko Inn, 33 of the 108 rooms are currently occupied by workers with Connors Drilling. The company has had a long-standing contract with Best Western since the first few months of 2011. It is not set to expire

until Dec. 31, 2012.

Myron Pree, general manager of Best Western, said the hotel is willing to contract 50 to 60 rooms for extended-stay guests.

“Obviously you reach a point where you say you can’t do anymore extended stay beyond this point, to take care of our regular customers,” said Pree.

Stockmen’s Hotel & Casino is also used by those who are in the area due to mining.

Kim Olinik, general manager of Stockmen’s, said the number of people in extended-stay rooms is “pretty steady” — normally averaging between 30 and 35 in use during any given week, out of the 141 rooms.

General managers at each hotel witness first-hand the impact that the lack of affordable housing can have on willing workers, however, each said they still believe there will never be a time where extended-stay becomes nonexistent.

“In the last three months I have had more inquiries from the big businesses in town,” said Pree, who added that he believes they’re “anticipating growth in the mines, so they’re looking for any place and every place they can put people while they’re waiting for houses to be built.”

Hiring ...

Continued from page 45 social and economic impacts on Elko, and are well aware of them.

“We understand most of our operations are not located in Elko County, yet Elko feels the impact of the operations,” said Korpi.

While Elko receives many of the mines employees without receiving the tax benefits — as many operation mines are located in other counties — this year Newmont is working on two operations that are located within Elko County.

“That will bring people, but for the first time in awhile it will actually bring tax dollars from net proceeds tax,” said Korpi.

Construction on the Emigrant Project began last year, and production will begin this year. The construction workforce has averaged 100, Korpi said.

Rocky Pray, project manager at Newmont’s Emigrant, said the mine will employ roughly 120 people but later that number will grow to 145.

A second Elko County mine is also in the process of becoming operational,

with Newmont preparing to submit a plan of operations to the U.S. Bureau of Land Management.

Korpi said the current estimate is that construction at Long Canyon will begin in 2015, with the mine operating at capacity by 2017. The construction period should last approximately 18 months.

Long Canyon is expected to employ between 700 and 900 contractors during the period of construction. Once the project is completed, approximately 400 people will be permanently employed at the site.

Other projects and companies will create more jobs in the mining industry in the near future, including Allied Nevada Gold Corp. that operates the Hycroft Mine in Humboldt County, which expects to add more than 100 jobs.

General Moly’s Mt. Hope Project will employ 400 workers once construction is complete, but work won’t start until the BLM approves the project. General Moly hopes to have permits yet this year.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 47

48 MINING QUARTERLY, Elko, Nevada SPRING 2012

Tips for getting work at gold mines

By ADELLA HARDING Mining Quarterly Editor

ELKO — Barrick Gold of North America and Newmont Mining Corp. have jobs to fill, and they have tips for those hoping to be hired in light of the thousands of job applications they receive.

“It’s competitive and applicants have to have their ducks in a row,” said Lou Schack, director of communications and community affairs for Barrick Gold of North America.

Barrick’s North American office had 216 job openings one day in February. The company received roughly 30,000 applications last year and filled roughly 1,500 jobs in 2011.

Newmont received 34,000 applications in 2011, but some of them could be from individuals applying for more than one position, according to Nick Tompkins, manager of talent acquisition.

“So, we had 34,000 applications and 600 jobs to fill,” he said.

“The No. 1 complaint people have is with the application system,” he said,

Helen Magee, a recruiter for Barrick Gold of North America, stands with Max Mitchell of Pahrump, who was filling out a job application in mid-February at the Barrick office in Elko.

Adella Harding Mining Quarterly

explaining that Newmont needs a computerized system because of the huge volume of applications. “Candidates say they never hear anything from Newmont or Barrick, but they get a response thanking them for applying.”

Candidates who apply for particular

positions also will get a rejection email if they aren’t called for an interview, he said.

However, those who simply apply to the general interest category won’t hear anything after the first thank you.

“Typically, we interview two or three candidates for one position so there can

only be one winner,” Tompkins said.

Tompkins said another track for jobseekers is to work at a mine for a temporary job agency, because they then have a better chance of getting on full time.

“The point I’d like to make is we’re people too. We have a lot of empathy. All of us have had to apply for a job. We know how painful and slow it can be, but, simply, the volume of candidates can be overwhelming,” he said.

The Barrick job openings range from entry level positions that include haul truck drivers, warehouse technicians and lab technicians to skilled positions that include electricians, mechanics and those that require degrees, such as mining engineers and metallurgists.

“If we are looking for an entry level position, the first thing we look for is job stability — how long have you held a job. If you jump around to jobs, this doesn’t look stable,” said Barrick recruiter Helen Magee, adding that Barrick looks for at least two years on a job.

See ADVICE, 50

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 49

Advice ...

Continued from page 49 Dana Pray, recruiting manager for Barrick Gold of North America, said the company trains supervisors that “past performance predicts future performance.

If you are moving every few months, there is nothing worse on your resume.”

Barrick spends roughly $30,000 training workers, and that doesn’t count pay and benefits so stability is important, Schack said.

“We wonder why they are leaving a job.

We want to pick the best applicants so we tend to gravitate toward candidates with a steady job history,” Tompkins said.

Barrick also wants to know about applicants’ safety records and attitudes on safety.

Recruiter Amy Lewis said Barrick asks applicants about any safety violations and whether they have stepped up to the plate to stop potential unsafe acts on the job.

“It is your job to stand up and say something, to be a courageous leader,” she said.

Recruiters also want to know about the attendance record of applicants, such as whether they take a lot of days off, espe-

cially those last-minute calls, Pray said, explaining that workers on rotating shifts have a lot of days off in a month to catch up on their rest.

Magee said honesty also is important for applicants, commenting that a surprising number of people lie on their applications, not realizing they will be caught in that lie because of Barrick’s extensive background checks.

“So, don’t lie to us,” Pray said.

Tompkins said Newmont has a policy of not hiring felons or those convicted of certain high misdemeanors, and the background check will show convictions.

People who had arrests when they were juveniles also might be surprised to know those actions show up too.

Those with juvenile records may be hired, if they are honest about their convictions, he said.

Applicants should know that if they make it through the initial application and interview process and receive a job offer, they still face drug testing, background checks and calls to references. Offers are contingent on the results.

“We are a drug-free environment. We do hair testing that goes back three months.

We also do an alcohol test,” Pray said. “We are going to start testing for spice.”

Newmont follows similar procedures, Tompkins said.

50 MINING QUARTERLY, Elko, Nevada SPRING 2012

Barrick and Newmont only have so many openings for those who need training, however, and continues to recruit for skilled workers, including electricians, mechanics, underground miners and mining engineers and metallurgists.

Lewis said the goal is to hire locally, but recruiters go out of state when they can’t find the skill sets needed to fill openings.

They go to job fairs and to career fairs at colleges and universities.

Barrick also is heavily involved in educating people to develop the needed skills, including providing scholarships and contributions to Great Basin College, the recruiters said.

While applicants can fill out applications for any number of jobs, Pray said Barrick prefers they “take charge of their own job search” and apply only for jobs they know they might qualify to hold.

“We like to hire people with goals and objectives,” she said.

“Barrick strives to pick the candidates who are best for a position,” Lewis said.

Tompkins offered pointers that military candidates explain what they did in the military in layman’s terms, and that all applicants go into detail about the tasks they performed in prior jobs.

He also said applicants should show up for an interview on time and appropriately dressed, and they should bring copies of

their resumes.

Lewis recommended applicants be patient, and if they don’t get a job now, they can try again later because often there is more than one candidate for a particular job, and they can’t all be picked.

All job postings are on the Barrick website and updated at least twice a week, Pray said.

Barrick outlined its application process, and Tompkins said Newmont’s is similar: • Go online and create a user profile at www.barrick.com. Applicants can attach resumes, and those are helpful but not required. There are computers in the lobby at the Barrick office in Elko and people can help potential applicants get started. Newmont has a kiosk in its lobby.

• Apply for positions you are qualified to hold, then “sit back and wait for a call,” Lewis said. A recruiter will screen the top candidates and schedule interviews.

Anderson said it’s important candidates have email addresses and voicemail so they can be contacted.

• Give an interview, if called. Magee said a panel interviews candidates, and applicants will be contacted after the interview process is complete.

The hiring decision lies with the department supervisor, while the recruiters find the best candidates, “so the decision is not just made by one person,” Magee said.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 51

Elko Mining Expo has most booths ever

By ADELLA HARDING Mining Quarterly Editor

Ross Andreson/Mining Quarterly

Spectators look at Komatsu equipment during the 2011 Mining Expo at the Elko Convention Center.

52 MINING QUARTERLY, Elko, Nevada SPRING 2012

ELKO — The Elko Mining Expo June 7-8 will be buzzing this year as excitement grows about the Nevada mining industry’s growth and high gold prices.

“Gold and silver prices definitely help, as does the fact that there are so many projects starting or under way,” said Jennifer Knight, event coordinator for the Elko Convention and Visitors Authority that puts on the annual Expo.

Gold prices were in the range of $1,700 to $1,750 per ounce in February. Silver was in the range of $33-$34 an ounce.

Knight said she believes this is the best time for vendors to market their products, when there is major activity in Nevada but the economy is still down in many areas of the country.

Mining companies in Nevada are planning expansions and new mines, and exploration drilling is up in the state.

“No one can afford to miss the Elko Mining Expo,” Knight said.

They may not all get to exhibit, however. The ECVA is offering a record number of booths, 496, but they may all be sold out, although the staff at the Elko Convention Center will know more after March 12. That’s the deadline for last year’s exhibitors to decide whether they are returning to the Expo.

“I’ve got over 100 on the waiting list for the mining mall and the same thing with the exterior booth space,” Knight said.

The ECVA added 40 10-foot by 10-foot booths to the Elko Main City Park site, where booths were set up for the first time last year.

“We had 48 last year, and they did so well, we added the additional 40,” Knight said, adding that the ECVA also is adding the larger 20-foot by 20-foot booth space along College Avenue.

The Expo sold 445 booths at the 2011 Expo, which was the biggest to date.

Elko Mining Expo events begin with the golf tournament at Ruby View Golf Course on June 4-5, and she said the tournament is “filling up quickly.” Registration didn’t open until February.

An awards barbecue will begin at 5:30 p.m. on June 5, after the tournament ends.

The Expo kickoff banquet will be on June 6 at Stockmen’s Hotel & Casino, with cocktails at 6 p.m., to be followed by dinner.

Knight said plans are under way for a guest speaker, but she couldn’t disclose more details in February.

Then, the Expo itself will be from 9 a.m. to 5 p.m. June 7 and 9 a.m. to 3 p.m. June 8 at the Elko Convention Center.

Knight said a product showcase that was

started last year will be back, featuring demonstrations of 15 to 30 minutes each.

The showcase is free to exhibitors but they need to sign up at the convention center.

The Minor Miners games for children also will be back from 12:30 p.m. to 3 p.m. the two days of the Expo.

The ECVA board agreed in January to use a new vendor for the tents and canopies this year, Source One out of Las Vegas, which will put the mining mall up under one tent roof, rather than have adjoining tents. Source One also plans to be on site throughout the Expo to help exhibitors, Knight said.

Exhibitors for the outdoor booth spaces can rent canopies, tables and chairs from Source One. Knight said it is better to go through the chosen vendor because of fire codes. All canopies and tents have to be certified because a fire official will be doing inspections.

Source One will do the set up and tear down.

Those interested in exhibiting at the Elko Mining Expo or getting on a waiting list can contact the convention center at 775-738-4091 or go online to www.

ExploreElko.com for the links to registration packets and advertising opportunities. Source One also has a link.

“We’ve added advertising to the program book this year,” Knight said.

Adella Harding/Mining Quarterly

Barrick Gold Corp.’s booth at the 2011 Elko Mining Expo featured a miniature haul truck filled with candy. Elko High School woodshop students made the truck. Grabbing candy, from left, are Joey MacDiarmid, Chloe Patzer and Abby MacDiarmid.

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SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 53

54 MINING QUARTERLY, Elko, Nevada SPRING 2012

Starvation Canyon work may begin soon

By ADELLA HARDING Mining Quarterly Editor

ELKO — Yukon-Nevada Gold Corp. plans to begin its Starvation Canyon underground project in Elko County this spring as part of expansion at Jerritt Canyon.

“We would like to start development in April, depending on contractor availability, to do the portal and decline,” said Yukon-Nevada’s chief operating officer, Randy Reichert.

Starvation Canyon will be quick to go into production, with the current estimate for gold production in September. The ore is easy to reach.

“We only need to go 700 feet, and we’re already at ore, and at 1,500 feet, we will be in full production,” Reichert said.

The underground Starvation Canyon Mine will need a secondary access before it can be in full production, however, he said.

Starvation Canyon will be a new mine at Jerritt Canyon, where mining has been under way since the 1980s.

Current gold production is coming from the SSX-Steer underground mine that Yukon-Nevada put back into production late last year, and the Smith Mine that Small Mine Development has been operating for a couple of years.

“SMD is doing quite well, increasing production to 1,200 tons per day in another month or two months,” Reichert said.

Yukon-Nevada is still awaiting delivery of new haul trucks for SSX-Steer before the mine can reach full production, but Reichert said the company expected Sandvik to deliver one 30-ton truck in February, another in March and three more in April or May. All the ore going through the Jerritt Canyon mill is now from production and stockpiles on site, Reichert said.

Jerritt Canyon isn’t milling any ore from Newmont Mining Corp. operations at this point but was doing so last year.

The mill is back in full operation after a shutdown on Jan. 6 to complete refurbishment that included a new location for the dryer and a new dryer for more efficient winter operations, and a bag room and new scrubber.

“Then, we reconfigured the conveyors in the fine crushing between the secondary and tertiary crushers,” Reichert said in a February phone interview.

The mill was fully operational on Feb. 3.

“We’re optimistic at this point we will be able to really run hard, now,” he said.

The company reported the March mill production is expected to average 3,900 tons per day with gold production of approximately 12,500 ounces. This would translate to roughly 150,000 ounces of gold production in a year’s time.

With the growth, Yukon-Nevada has been actively recruiting for underground miners, engineers and “across-the-board, but underground miners are the primary target,” Reichert said.

Yukon-Nevada also is looking into housing because of the shortage in Elko, and he said there is potential for a small camp for the underground miners.

The company also continues exploration, with results from West Mahala drilling showing good grades and showing potential for access from SSX. “It’s really firing up to be a very sizable deposit,” Reichert said.

Results from one hole showed an intersection of over 150 feet at just under 0.2 ounces per ton of gold, and another showed 100 feet of 0.19 opt.

Yukon-Nevada has spent roughly $220 million to $240 million on Jerritt Canyon, Reichert said.

Yukon-Nevada recently announced a forward gold purchase agreement with Deutsche Bank AG, London branch, that includes a $20 million prepayment that can be used toward Jerritt Canyon projects.

The agreement is a forward contract structured to deliver 27,950 ounces of gold over a 43-month term in the amount of 650 ounces per month starting March 31.

Shaun Heinrichs, chief financial officer, said there still will be additional funds coming into the company from gold sales under the agreement.

The prepayment is for roughly $716 per ounce of gold, and the remainder of the purchase price will be paid upon completion of monthly gold deliveries and will be equal to the amount that the gold price exceeds $850 up to a maximum gold price of $1,750.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 55

Jipangu mining South Pit at Standard Mine

By ADELLA HARDING Mining Quarterly Editor

IMLAY — Jipangu International is developing the South and South-South pits that will combine to make one large pit at the Standard Mine.

“We will take out all of the original Standard Pit from the 1950s,” said Joel Murphy, general manager of the Standard and Florida Canyon operations in Pershing County and president of U.S. operations.

The latest mining at Standard started in the North and Intermediate pits, which have been mined out and backfilled so no pits are visible at those locations.

Jipangu just completed expansion of the Standard leach pad on Feb. 8, providing an additional 35 percent capacity.

All the ore at Standard is crushed, and the mine also just commissioned the second half of the crusher plant on Feb. 8, Murphy said. The crusher system is in the mined-out Cordex Pit. The current Standard mine life is about two years or more as now permitted, he said.

When mining was under way earlier at Standard for a three-year period, the ore was run-of-mine, which means it went straight to

56 MINING QUARTERLY, Elko, Nevada SPRING 2012

A Caterpillar loader fills a 150-ton Caterpillar haul truck in February in the new South Pit area at Jipangu International’s Standard Mine in Pershing County.

Ross Andreson Mining Quarterly

the leach pad without crushing.

Carbon from the leaching at Standard is processed at Florida Canyon five miles away.

The earlier mining at Standard ended in 2007, but residual leaching continued.

Meanwhile, residual leaching continues at the Florida Canyon Mine, and plans are under way to resume mining at Florida Canyon.

The company has turned in a plan of operations to the U.S. Bureau of Land Management in Winnemucca for a new leach pad and expanding existing pits, Murphy said.

“That will last us 10 years, and we have almost eight to 10 years of reserves beyond that, that is not in the plan,” he said. “As long as gold stays above $1,000 we could be here another 30 years.”

With the current prices, most of a waste dump on top of ore at Florida Canyon also will be processed as run-of-mine leach material.

“Gold at $1,700 pays for a lot of processing,” he said.

On the other hand, costs are up for diesel, tires, belts for the crusher and other supplies. Murphy said a B.F. Goodrich tire used to cost $8,000 for a 150-ton haul truck but now a Ukrainian bias-ply tire for the same size truck runs $17,500.

Jipangu has roughly 160 employees but is budgeted for 173. In the current shortage of workers in the mining industry, the company has its share of difficulty finding people.

Ross Andreson/Mining Quarterly

See JIPANGU, 59

The crusher system at Jipangu International’s Standard Mine near Imlay is in full operation after the second half was commissioned in February. The crusher is in the mined-out Cordex Pit.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 57

58 MINING QUARTERLY, Elko, Nevada SPRING 2012

Ross Andreson/Mining Quarterly

Joel Murphy, president of U.S. operations and general manager of Jipangu International’s Florida Canyon and Standard mines in Pershing County, talks about current operations.

Ross Andreson/Mining Quarterly

Josh Gratwohl works at the atomic absorption machine in the wet laboratory at the Florida Canyon Mine near Imlay. He was in training at the lab in February.

Jipangu ...

Continued from page 57 “There was a lot of turnover last year.

People go to different mines. They go for a lollipop or a pair of boots,” he joked.

Pay is competitive, and a smaller mine such as Jipangu’s has to compete with the bigger operations for workers.

“Newmont and Barrick have got a lot of money. It’s hard to compete in the pay

arena,” Murphy said.

The Florida Canyon-Standard operations produced 42,136 ounces of gold in 2011 and 49,179 ounces of silver.

Florida Canyon may be small but it has been in operation 25 years, and the company commissioned a gold and silver coin See JIPANGU, 60

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 59

Jipangu ...

Continued from page 59 for employees to mark the anniversary.

Murphy went to work for Pegasus Gold, which opened Florida Canyon, 25 years ago, and he worked at Montana Tunnels and the Mt. Todd operations in Australia, as well as Florida Canyon.

When Pegasus went bankrupt, Florida Canyon continued under bank ownership and then under Apollo Gold ownership before Japan-based Jipangu acquired the Florida Canyon and Standard mines.

“We had a three-to-five-year mine life back in 1986,” Murphy said.

“This mine has been a good operating, producing mine for 25 years,” he said.

Exploration also continues, with one rig operating at Florida Canyon but drilling done or planned for Barber Canyon and at Florida Canyon and Standard, according to Murphy.

Along another line, Jipangu agreed to pay a $105,000 fine to the U.S. Environmental Protection Agency late last fall over alleged violations in its Toxic Release Inventory reporting after negotiations, but Murphy said EPA didn’t have clear guidelines.

“We won on all the principle stuff,” he said.

The company issued a statement in November that the payment of the fine and corrected TRI reports were part of a consent agreement in which Jipangu didn’t admit liability for the alleged violations.

The Jipangu operations at Imlay also continue a good safety record, going more than 1 million manhours without a lost-time accident, Murphy said.

The corporate office in the United States is at Florida Canyon. The company closed an office it had in Denver. Jipangu is a private company but may go public in Japan in the middle of this year, Murphy said.

60 MINING QUARTERLY, Elko, Nevada SPRING 2012

Ross Andreson/Mining Quarterly

Jason Jahrig pours samples into a bucket in the wet laboratory in February at Jipangu International’s Florida Canyon Mine near Imlay.

Barite mill under construction at railport

By ADELLA HARDING Mining Quarterly Editor

OSINO — National Oilwell Varco expects to begin operating late this spring a new mill now under construction at the Northeastern Nevada Regional Railport.

“Construction is progressing pretty well. We anticipate we should be able to begin start-up operations in the May-June time frame. We’ll have phased development here as demand increases,” said Bill Smith, vice president of minerals procurement and logistics for the company.

“We’re excited. This has long been in planning for us,” he said.

NOV will be loading Union Pacific rail cars at the railport with bulk and bagged product from the company’s barite mine 60 miles north of Wells for use in drilling fluids for the oil and gas industry.

“We will probably have in the neighborhood of 20 to 25 people at the time we get started at this location and about that many reporting in from the mine operation,” Smith said.

The company has another mill in Evanston, Wyo., and Smith said the people working there also will report to the Osino office, when it is ready. The Wells office will be relocated to the railport.

The barite ore will be coming from the Big Ledge Mine, and

Dave Berrelet of Tri-State Electrical is working in mid-February on the new National Oilwell Varco barite mill at the Northeastern Nevada Regional Railport at Osino.

Adella Harding Mining Quarterly

See NOV, 62

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 61

NOV ...

Continued from page 61 the company has several resource properties in this area that would ultimately send ore to the railport facility, Smith said. Ore from Big Ledge also is transported by truck to the Evanston mill.

National Oilwell Varco was attracted to the railport site because of the easy access to the railroad for shipping the barite product, which helps keep costs down because “barite is very cost competitive,” Smith said.

Barite can make up 10 to 25 percent of the cost of drilling fluids at a well so price is critical, he said.

First, the ore is mined at the Big Ledge open pit and taken about 10 miles from the mine to the jig plant for crushing and benefication, according to Terral Young, who is retiring as the minerals manager.

Benefication is basically jigging, washing and separating the ore.

The ore is then stockpiled until it can be transported to Osino and Evanston.

The plant at the railport will be grinding the barite to a finish product that can be shipped in bulk or bags.

“It will be a fully automated plant,” said

62 MINING QUARTERLY, Elko, Nevada SPRING 2012

Bill Smith, left, vice president of minerals procurement and logistics for National Oilwell Varco, listens as retiring Minerals Manager Terral Young, center, talks with the new minerals manager, Gary Daane, in the company’s new facility under construction at Osino.

Adella Harding Mining Quarterly

Gary Daane, the new minerals manager who is replacing Young.

Young said two grinding mills will be installed initially, but there will be room for a third one later.

NOV uses a contract hauler to transport the ore to Evanston and to Osino when the plant is ready. Scott Anderson Trucking is the current contractor, according to Smith. The company also uses a contract miner, N.A. Degerstrom, at Big Ledge.

“We’ll start out at the run rate of 60,000 tons a year and ramp up to the neighborhood of 200,000 tons or greater finished product,” he said.

Barite from Osino will go by rail to warehouse locations all over the country.

“A lot of it is logistics, which warehouse is to be supplied. This area will supply Ohio and Pennsylvania,” said Smith, who is based in Houston,Texas.

Barite helps contain pressure from an oil or gas well by increasing the density of drilling fluids.

Although gold is big in northeastern Nevada, especially with current high prices, barite has been mined in Nevada for many years.

“Nevada used to be the barite capital of the world, and it could be again,” Young said.

The Big Ledge Mine on the Marys River

Adella Harding/Mining Quarterly

National Oilwell Varco’s new barite processing plant is under construction in February at Northeastern Nevada Regional Railport at Osino.

Ranch was originally mined in 1978, and Spirit Minerals started the mine back up again in 2007, according to Young.

NOV is getting into the barite mining and processing business to integrate barite into its product offerings.

“It’s a huge company. The fluids portion is small but growing,” Smith said.

Revenues reported for the full year 2011

were $14.66 billion, according to the company’s earnings report.

Smith said the company was making a significant investment in Nevada with the acquisition of Spirit Minerals, which owned the barite mine, and the $7 million to $8 million cost of the mill at the railport.

“The building is 98 percent complete,

and the rail spur is complete,” Young said, but the plant equipment has yet to be installed.

Smith said there is one spur now but room for three on the company’s 20-acre site.

Young said Savage Services at the railport will move the train cars from the Union Pacific tracks to the spur for loading.

Michael Clay Constructors is the general contractor for the project at the railport, and Ruby Dome did the earthwork.

Snyder Mechanical is doing the plumbing, and Tri-State Electric is doing the electrical work.

If all goes as planned, Smith said NOV may begin interviewing for the mill jobs at the railport in May and hopes to hire locally. He said there is competition with the gold mines, but the company is international and offers good benefits. Still, the local crews will be small.

“It becomes family,” he said.

“The barite business itself is a tightknit community,” said Daane, who joined International Oilwell after working for Tata Chemicals in Wyoming. Tata mines soda ash.

“It’s exciting getting involved here with the building of the plant, starting on the ground floor of this processing facility,” he said in February.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 63

Marigold adds seven years to mine life

By ADELLA HARDING Mining Quarterly Editor

ELKO — The Marigold Mine at Valmy is looking at more growth and a longer mine life.

“We’ve extended the mine life by about seven years to 2024,” said Marigold General Manager Duane Peck.

“Capital investments will allow us to do that.”

Marigold has a green light from operator and two-thirds owner Goldcorp Inc. and one-third owner Barrick Gold Corp. to spend “in the ballpark” of $80 million on new equipment to increase the mining rate in 2013, he said.

Exploration has added more gold ounces to mine with the extended fleet.

“We had a large increase in reserves,” Peck said, with the total reserves for both owners at roughly 3.5 million ounces of gold now, up about 1.2 million ounces from the end of 2010.

Goldcorp reported its share of Marigold reserves at 2.32 million ounces.

The reserves went up mainly in the

Duane Peck Red Dot area in the previously mined Section 19 that would be mined deeper the second time. They also went up because of high gold prices that makes deposits that weren’t economical to mine in the past now economical.

“I would say it was about 50-50 the gold price and drilling,” Peck said.

64 MINING QUARTERLY, Elko, Nevada SPRING 2012

Marigold produced 153,740 ounces of gold in 2011 for both owners, he said.

Goldcorp reported Marigold produced 27,800 ounces in the fourth quarter for its share, up from 27,000 ounces in the fourth quarter of 2010, and the total cash cost was $799 per ounce, compared with $787 per ounce in the 2010 quarter.

If Section 19 is mined, that area is owned by the University of Nevada, Reno, which would receive production royalties, Peck said.

Mining Red Dot will require U.S. Bureau of Land Management approval

and likely an environmental impact statement, he said.

Another expansion plan will require BLM analysis as well, but Peck said that could be an environmental assessment.

Marigold plans to change the permitted disturbance at the Target III area to allow for a pit and new space for a waste dump.

Marigold expects to file a plan of operations for Target III with the BLM in early March.

New Equipment The new equipment isn’t necessarily for new projects, however. Peck said with lower ore grades, more tons have to be moved for gold production.

Marigold is ordering a new electric shovel, six 320-ton Komatsu haul trucks, blast-hole drills, bulldozers and

graders to add to the current fleet. The orders are going in well in advance because of the long lead time for equipment in the current mining boom, Peck said.

Marigold is adding employees too. He said the mine has 296 employees and 28 full-time contractors on site now and has 40 employee positions open. Marigold plans to be at job fairs planned in Las Vegas and Reno for returning veterans from Iraq and Afghanistan.

Currently, Marigold crews are mining in the Target II Pit just north of the Basalt Pit, and they are finishing a small pushback at Basalt, Peck said in a telephone interview.

Marigold spent close to $10 million on exploration in 2011 and expects to spend about the same amount this year, he also said.

Goldcorp production Companywide, Goldcorp reported fourth-quarter gold production of 687,000 ounces at a total cash cost of $261 per ounce on a by-product basis, which provided record revenues of $1.5 billion. That compares with 689,600 ounces of gold in the 2010 quarter.

The company posted net earnings of $405 million for the quarter, compared

with $560 million in the fourth quarter of 2010, while adjusted net earnings totaled $531 million, or 66 cents per share, up from $431 million, or 59 cents per share, in the 2010 quarter.

Goldcorp stated that the adjusted net earnings excluded the effect of a foreign exchange loss, a non-cash provision for new estimates of reclamation and closure costs at closed mines, impairment charges on certain investments and unrealized gains on derivative instruments.

For the year, Goldcorp reported revenues increased 43 percent to $5.4 billion in 2011 on gold sales of 2.5 million ounces.

Net earnings for the year were $1.9 billion, or $2.34 per share, compared with $2 billion, or $2.79 per share, in 2010, while adjusted net earnings totaled a record $1.8 billion, or $2.22 per share, compared with $1 billion in 2010, according to the earnings report.

Gold reserves The Vancouver-based company also reported that proven and probable gold reserves increased 8 percent at the end of 2011 from 2010 to 64.7 million ounces.

In addition to Marigold, reserves in

Nevada include 930,000 ounces at the Dee Property in Elko County, where Goldcorp is 40 percent owner of the Arturo Project that Barrick plans to develop.

“Strong, low-cost gold production and another year of gold reserve growth provided a great finish to another solid year for Goldcorp,” said President and Chief Executive Officer Chuck Jeannes.

“Our record performance is the result of strength throughout the mine portfolio, as demonstrated by sustained operational excellence at Los Filos in Mexico, which led to a record year at this important operation.”

Los Filos produced a record 336,500 ounces of gold in 2011.

Jeannes also said the Martin Mine in Guatemala had a strong quarter and year as it completed the final, highergrade portions of the surface operation and moved solely into an underground mine.

The flagship Red Lake Mine in Ontario had a strong fourth quarter as well, producing 154,000 ounces at a cost of $374 per ounce. Production was down, however, from the fourth quarter of 2010, when it totaled 187,000 ounces of gold, produced at a cash cost of $313 per ounce.

Goldcorp’s Penasquito Mine in Mexico also was a growing operation as it continues final ramp-up, with gold production at 82,300 ounces, up from 53,900 ounces in the 2010 quarter, and silver production at nearly 5.87 ounces, compared with 4.6 million ounces in the 2010 quarter.

Penasquito also produced 46,100 pounds of lead, up from 34,400 pounds the prior year, and 97,900 pounds of zinc, up from 54,200 pounds in the fourth quarter of 2010.

Jeannes said the company’s forecast for gold production this year is 2.6 million ounces “at what we expect to be the lowest cash costs in the senior gold sector.”

The company also is looking at new gold production in 2012 and beyond, including from the Pueblo Viejo operation in the Dominican Republic.

Goldcorp is 40 percent owner, with Barrick the operator and 60 percent owner.

Production will come from Cerro Negro in Argentina in 2013, and from two new Canadian projects the following year — Cochenour at Red Lake and Eleonore in Quebec, according to comments from Jeannes in the earnings report.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 65

TS Power Plant runs Newmont mines

By ADELLA HARDING Mining Quarterly Editor

Adella Harding/Mining Quarterly

Control room operator Larry Allen keeps an eye on the monitors in February at Newmont Mining Corp.’s TS Power Plant at Dunphy.

66 MINING QUARTERLY, Elko, Nevada SPRING 2012

DUNPHY — The vast majority of electricity produced at Newmont Mining Corp.’s TS Power Plant is going to the company’s mining operations in Nevada rather than to NV Energy’s customers across the grid other than Newmont.

“The amount to NV Energy is decreasing. About all but 29 megawatts goes to the mines,” said Warren O’Shields, plant manager, mine operations.

The coal-fired power plant on Newmont’s TS Ranch sells 218 megawatts to NV Energy for distribution to the mines.

The 29 extra megawatts comes out of the 218 megawatts, according to O’Shields.

The plant’s gross megawatt production is roughly 243 megawatts, but Newmont uses 25 megawatts to power the power plant.

A year ago, the power plant was putting 203 megawatts on the NV Energy grid, and mines were using 136 of the 203 megawatts, but Newmont has increased gold production since that time.

The power plant saves Newmont money, although O’Shields wasn’t comfortable reporting the amount saved for 2011.

“I will say this. The power plant has a significant impact on the cost of gold per ounce,” he said.

Newmont saved $60 million with the power plant in 2009, according to figures reported in earlier Mining Quarterly editions.

Newmont took over operation of the power plant from contract operator DTE Energy in June 2010, and O’Shields credits teamwork for the efficient operation of the plant.

“I think it’s exciting. If you look at the Super Bowl championship team, each guy is very good at what they do, but every other team has good players. It’s how these individuals who are very good at what they do work together. That’s what wins the Super Bowl, and by the same token, that is what works for us,” he said.

“We all have our duties, and we all have the same goal,” O’Shields said. “Our

goal post is energy. We take in coal here and put out power.”

The power plant employs 63 people, and “turnover has dropped to almost nothing,” he said.

At a time when new mercury regulations are going into effect for coal-fired power plants, the TS Power Plant with its technology that was state of the art when the plant went into production in June 2008 isn’t likely to have the problems of older power plants.

“The new regulations on mercury came out before Christmas. We still looking at them,” said Dennis Laybourn, environmental manager at the plant.

O’Shields said the TS Power Plant already had mercury removal equipment in place because it is a newer plant, but the older coal-fired plants will have to spend millions of dollars in retrofitting projects.

The TS Power Plant also has low CO2 emissions, called greenhouse gases.

“We have some of the lowest emissions in the country,” Laybourn said, reporting that the plant began reporting CO2 and CO2-related gas emissions to the U.S. Environmental Protection Agency last year under new regulations.

The power plant also continues to

Matt Murray, left, senior external relations representative for Newmont Mining Corp., listens as Engineering Manager Kuda Mutama explains operations at Newmont’s coalfired TS Power Plant at Dunphy.

Adella Harding Mining Quarterly

See POWER, 68

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 67

Power ...

Continued from page 67 burn cleaner, low-sulfur, low-mercury coal from Thunder Basin Coal in Wyoming, burning an average of 70,000 tons a month.

The coal comes to Dunphy via Union Pacific rail cars. Engineering Manager Kuda Mutama said 130 rail cars arrive at the plant every five days. Newmont takes temporary possession of the cars at the spur to the plant, unloads the coal and returns the cars to UP. As part of the process of producing electricity, the TS Power Plant produces fly ash that Newmont uses at its underground operations for backfill, but the power plant also wants buyers from any company, whether a mining or construction company.

“It’s an advantage for us to get rid of it.

There is no measurable income from it.

We would welcome any users of fly ash,” O’Shields said. “We would be very negotiable on the price.”

Coal is burned to 2,200 degrees in the boiler as part of the production process, See POWER, 70

68 MINING QUARTERLY, Elko, Nevada SPRING 2012

Mike Boyle, left, operates a remote racking unit in the switch gear room with the help of Jake Plummer at Newmont Mining Corp.’s TS Power Plant.

The robotic unit prevents injury from an arc flash.

Adella Harding Mining Quarterly

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 69

Power ...

Continued from page 68 after the coal is pulverized to face-powder fine.

The electricity goes to the NV Energy grid, and NV Energy distributes the power to the Newmont operations.

Newmont’s operations from Carlin to Winnemucca use the power through NV Power, except the Gold Quarry operations, which gets electricity from Wells Rural Electric Co. The new Emigrant Mine now under development also gets power from WREC. O’Shields also said people seeing plumes from the plant visible from Interstate 80 may not realize that what they see is “pure water coming out from the water coolers,” not smoke.

Safety is a priority, and management reported one of the projects was an arc flash study that sets boundaries for work on electrical equipment and how much protective gear is need for each maintenance task.

In the switch gear room, there are placards on each cabinet door telling what equipment is needed at that location, and electricians use a robotic machine for the sites with the most danger of an arc flash of electricity.

A worker can operate the remote racking unit, as it is called, from a distance while also wearing protective gear.

“It takes that worker out of the boundary,” said Juston Freeman, electrical supervisor.

The power plant has gone 650,000 manhours without a lost-time accident since June 2008.

70 MINING QUARTERLY, Elko, Nevada SPRING 2012

Adella Harding/Mining Quarterly

Newmont Mining Corp.’s TS Power Plant on the TS Ranch at Dunphy is producing electricity to power the company’s mining operations in Nevada. Train cars that brought a load of coal are at left.

BLM to soon release impact statement on Hollister Project

By ADELLA HARDING Mining Quarterly Editor

WINNEMUCCA — The U.S. Bureau of Land Management expects to release the draft study on Great Basin Gold Ltd.’s Hollister Project in late March.

“Our goal is to have the draft environmental impact statement available for public comment by the end of March,” said Janice Stadelman, the project leader for Hollister for the Elko BLM District.

“The main purpose is to bring this property into full production,” said Teresa Conner, environmental manager for Great Basin Gold’s Nevada operations.

She said she is forecasting a record of decision in late summer or early fall, depending upon the number of comments the draft study attracts.

“We’re building a very robust life-ofmine plan as we speak,” said Joe Driscoll, vice president for Great Basin Gold’s Nevada Operations.

“I feel we have a good road map to get to the end point by the end of the year,” he said.

He said the hope is to “stabilize out at 500 tons per day for the underground operation so we roll up in the ounces outlook is it could be greater than 100,000 ounces of production.”

Hollister is a high-grade, narrow-vein gold and silver mine with test areas of 3 to 4 ounces per ton of gold.

“This is one of the richest grade systems in Nevada,” Driscoll said.

The plan yet to be released includes a new power line that will allow Hollister to replace the two generators now providing electricity for the underground operation now in test mining, Conner said.

The draft EIS also plans for a new office complex outside the mined-out pit where facilities are now, new dry facilities for miners and a new warehouse.

Conner said the study additionally looks at proposals for a new ramp or a shaft that

Joe Driscoll, Great Basin Gold Ltd.’s vice president for Nevada operations, stands outside the office building in Winnemucca that serves as Nevada headquarters.

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Continued from page 71 would provide secondary access as the mine expands, including to the Hatter deposit.

“Hopefully, we will be expanding in all directions,” she said.

Great Basin Gold’s plan is to keep potential new disturbance to a little more than 30 acres,” Conner said. “This area is highly sensitive.”

Hollister is in the area of the historic Tosawihi Quarry where the Western Shoshone mined for chert.

Driscoll said the company also is in discussion with the tribes to reach a conclusion about the Rock Creek lands Great Basin Gold purchased in 2009.

Great Basin Gold bought 3,629 acres along Rock Creek Canyon and just west of Rock Creek.

“The whole intention was to keep the land from being developed. That’s their goal too. It’s a spiritual gathering place,” Conner said at the company’s Nevada headquarters in Winnemucca.

Nevada operations Looking at current operations, Driscoll said Great Basin Gold has 250 employees in Nevada, including at Hollister, the Pinnacle assay laboratory in Lovelock and the Esmeralda Mill near Hawthorne.

The mill processes the ore from Hollister. John Davis See HOLLISTER, 74

Great Basin Gold Ltd.

A Sandvik loader enters the portal at the Hollister Mine in northwestern Elko County. Great Basin Gold Ltd. is awaiting U.S. Bureau of Land Management approval for Hollister to become a full-production mine but test mines now.

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Continued from page 73 Trucking transports the ore to the mill roughly 275 miles from Hollister, which is in northwestern Elko County.

The laboratory processes Hollister assays but also is open to all customers.

“It’s a fully equipped lab. There is essentially a 36-hour turnaround,” Driscoll said, reporting roughly 70 percent of the business is outside Great Basin Gold.

Production from test mining totaled 20,727 gold equivalent ounces in the fourth quarter of 2011, and the company also stated it produced 97,610 gold equivalent ounces for the full year, compared with 95,186 ounces in 2010.

Great Basin Gold also reported in a production announcement that it expects similar production this year, although the quarterly production will vary because of the high-grade nature of the Hollister ore body. The average gold grade in the fourth quarter was 0.81 ounces per ton.

“We’re seeing about six parts

silver to one part gold,” Driscoll said.

He said with the narrow veins at Hollister, traditional mining methods are necessary, including the use of timber raises and the use of slushers in place of small loaders to pull material to the mill hole.

Loaders muck it out at the bottom, Driscoll said.

“This is a timber mine, and we have specialized miners to work with timbers,” he said.

A number of the miners come from the Silver Valley in Idaho, and the timbers come from California.

At Esmeralda, the company has been refurbishing the mill with a new strip circuit, and Driscoll said the hope is to get it up to a 600-ton facility. It’s now at 350-tons.

Driscoll joined Great Basin Gold more than three months ago, coming from Newmont Mining Corp.’s operations on the Carlin Trend.

“It’s a good opportunity. I was underground manager, and this is a big boost to vice president of Nevada operations,” he said at the Winnemucca office.

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Great Basin Gold Ltd.

Roger Alford, a mechanic at Great Basin Gold Ltd.’s Emeralda Mill near Hawthorne, works on a project in the mill that processes ore from the Hollister underground operations in Elko County.

BLM taking comments on Hycroft

By ADELLA HARDING Mining Quarterly Editor

WINNEMUCCA — The U.S. Bureau of Land Management is taking public comment through March 12 on Allied Nevada Gold Corp.’s expansion plan for the Hycroft Mine as the company continues its growth spurt.

“It’s an exciting time for us as we continue to grow and expand, and it’s good for employees,” said Hycroft General Manager Warren Woods.

The growth will later include construction of a mill, tailings facility and deep mining, but first Allied Nevada is permitting the oxide expansion project covered in the BLM’s environmental impact statement released in February.

“This permit is heap leach expansion, and this has gone very fast,” said Debbie Lassiter, vice president of environmental affairs for Reno-based Allied Nevada.

“The next step will be to go immediately back with a plan of operations to the BLM for a permit for the tailings pond,” she said.

Lassiter said the plan for deeper mining that will require dewatering will be submitted in mid-2012 for a supplemental EIS. “We’re starting on pit lake studies and ground water studies

Warren Woods, general manager of Allied Nevada Gold Corp.’s Hycroft Mine, points out the planned expansion of the mine on the aerial photograph at a U.S. Bureau of Land Management open house in Winnemucca on the draft study of the project.

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Hycroft ...

Continued from page 75 so we will be ready for the plan submission,” she said.

Allied Nevada also is talking with Union Pacific Railroad about a rail spur from the nearby tracks so concentrate can be shipped from the mill, once it is constructed and commissioned.

The schedule on the displays at an open house the Winnemucca BLM District held in Winnemucca shows the record of decision for the heap leach expansion may be released in July approving the project.

“They have really chosen to make this a showcase. They have stuck with the deadlines. I have never seen this before,” Lassiter said of the BLM’s efforts.

The open house in Winnemucca in February drew only three people outside the BLM, Allied Nevada and Enviroscientists Inc. representatives, who prepared the EIS for the BLM. “So far, most of the responses have been positive,” said Kathleen Rehberg, the project leader for the Hycroft expansion for the BLM. “It’s an existing mine, just an expansion.”

She said the EIS was the first the Winnemucca office has done on a mine

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Kathleen Rehberg, left, of the U.S. Bureau of Land Management’s Winnemucca District and Debbie Lassiter, vice president of environmental affairs for Allied Nevada Gold Corp., talk about the company’s proposed expansion of the Hycroft Mine during a BLM open house in Winnemucca on the draft study of the project. The line on the map below Lassiter’s thumb is the Pershing County line.

Adella Harding Mining Quarterly

project in a while, although the office has permitted projects under environmental assessments.

The BLM also held open houses on the EIS in Lovelock and Gerlach, and Rehberg said Pershing County is excited about the expansion because it takes Hycroft into Pershing County. The mine now is all in Humboldt County 55 miles from Winnemucca.

Winnemucca BLM’s Black Rock Field Office manager, Rolando Mendez, said earlier in February that he has “full confidence in the process, content and analysis” for the Hycroft expansion, and he hadn’t had indications of any major concerns with the project.

Allied Nevada also isn’t expecting any major issues with the proposed expansion covered in the EIS. The project outlined in the draft study is for expansions above the water table, according to Mendez.

Allied Nevada’s plan to construct the mill and a tailings pond and mining below the water table for sulfide ores may move along fairly quickly, with the mill to be built on private land.

“There is some leeway on private land vs. BLM. We could put the crusher and mill on private ground to speed it up and take advance of gold prices,” Woods said.

“There is some leeway on private land vs.

BLM. We could put the crusher and mill on private ground to speed it up and take advance of gold prices.”

— Hycroft General Manager Warren Woods

Allied Nevada already is ordering equipment for the next expansion and mill because it takes so long for manufacturing.

“We have to assume the risk and order because of the long lead times,” Woods said.

The company reported it had spent or committed $354.9 million for mining and processing equipment, and the cost is covered through cash and $300 million in equipment lease financing.

The advance orders cover ball mills, grinding mills and crushing units.

Meanwhile, Hycroft is mining in the Brimstone Pit and Cut 5, “a new area

we’ve opened up,” said Woods at the open house in Winnemucca.

Construction under current permitting has included leach pad expansion and reclamation work on the older Crofoot pad.

“Last year, we had 1,500 contractors,” Woods said, talking about the number over the year’s time. The mine also has grown to 275 employees, and once the EIS is approved, there will be more construction.

“We’ll be constructing the new north pad, actually an extension of the current pad that’s primarily on private land now,” he said.

Two Merrill Crowe ore processing plants will be built, one at the south end, where a new pad will be constructed, so in the end there will be three plants on Hycroft.

“The EIS also allows us to expand the pit,” Woods said.

He said leach and waste-rock dump space are critical.

“We have over 10 years of material for the pads,” Woods said.

Allied Nevada also announced the Hycroft Mine produced 104,000 ounces of gold and 479,440 ounces of silver in 2011, compared with production of 103,700 ounces of gold and 234,000

ounces of silver in 2010.

“We are extremely pleased with the 2011 operating results at Hycroft, despite the equipment delivery challenges the mine encountered throughout the year,” Allied Nevada President and Chief Executive Officer Scott Caldwell said in the production announcement.

The company reported 2011 production met guidance for the year, but production will go up this year with the continued expansion.

The forecast is to produce between 180,000 and 220,000 ounces of gold and between 750,000 and 850,000 ounces of silver in 2012 as the mine continues to expand.

In the production report, the company also reported the silver to gold production ratio of 4.6:1 in 2011 was significantly above the expected 3:1 ratio, but the adjusted cash cost of roughly $490 per ounce for 2011 was in line with forecasts.

The adjusted cash cost for 2012 is expected to be in the range of $475 to $495 per ounce, with silver as a byproduct credit.

The mining fleet grew in 2011 and now includes seven 320-ton haul trucks, and “nine more of those are coming this year,” Woods said. Hycroft also has two new Hitachi hydraulic shovels.

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Development continues on Gold Hill gold mine

By ADELLA HARDING Mining Quarterly Editor

ELKO — Round Mountain Gold Corp. still expects to begin pouring gold in August at the new Gold Hill satellite mine in Nye County, where construction continues on the project.

Gold Hill is roughly five miles north of the Round Mountain open pit and facilities but is connected by a road.

“Gold Hill will essentially be a ‘stand alone’ operation with the significant exceptions of management and maintenance. To that end, construction is well under way on the leach pad and plant,” said Randy Burggraff, general manager of Round Mountain Mine operated by Kinross Gold Corp.

He said mining has started with removal of rock and dirt from the pit site for leach pad construction, but production mining hasn’t started.

“Leach pad construction takes advantage of materials from the mining footprint, so in that sense mining has also started,” Burggraff said on Feb. 21. “A slight delay in permitting combined with cold weather in mid-December and January slowed placement of compacted fills. However, we are still on schedule to pour some gold in August 2012.”

Meanwhile, mining continues at Round Mountain with gold production similar in the fourth quarter of 2011 to the fourth quarter of 2010, according to the Kinross earnings report.

Round Mountain produced 43,584 ounces of gold for the company, which owns 50 percent of Round Mountain.

Barrick Gold Corp. owns the remaining 50 percent.

The mine produced 43,521 ounces for Kinross in the fourth quarter 2010.

Kinross reported cost of sales were down in the 2011 quarter at Round Mountain to $597 per ounce, compared with $759 in the 2010 quarter.

For the year, Round Mountain produced 187,444 ounces for Kinross, compared with 184,554 ounces in the fourth quarter of 2010. Costs for the year were $697 per ounce, up from $625 per ounce in 2010.

North American production totaled 156,346 ounces in the fourth quarter, including production from Fort Knox in Alaska and Kettle River-Buckhorn in Washington, compared with 181,915

78 MINING QUARTERLY, Elko, Nevada SPRING 2012

ounces in the 2010 quarter.

Production from the North American operations was down for the year at 652,530, compared with 733,093 in the 2010 quarter, according to Kinross. Costs for the year were at $619 per ounce, up from $506 in 2010.

The Toronto-based company reported companywide production in the 2011 quarter was 643,288 gold equivalent ounces, down 5 percent from the 2010 quarter, mainly due to an expected reduction in grades at several mines.

Cost of sales companywide were at $636 per ounce in the quarter, compared with $549 per ounce in the 2010 quarter.

The average realized gold price was $1,601 per ounce in the fourth quarter, up from $1,333 per ounce in the 2010 quarter, Kinross reported.

The company’s gold equivalent production for the year was 2.61 million ounces, up 12 percent over the prior year, and revenue was up 31 percent to $3.94 million for the year.

Kinross announced a net loss of $2.78 billion, or $2.45 per share, in the fourth quarter of 2011 because of a goodwill writedown on the Tasiast Project in West Africa, but the company’s adjusted net earnings were up 24 percent.

Revenue was up 3 percent for the quarter to $949.3 million, and Kinross increased its semi-annual dividend to 8 cents per share from 6 cents.

The fourth-quarter loss compared with a loss of $72.9 million, or 6 cents per share in the 2010 quarter, while adjusted net earnings excluding the impairment charges totaled $196.6 million, or 17 cents per share, compared with adjusted net earnings of $158.5 million, or 14 cents per share, in the 2010 quarter.

Kinross acquired Tasiast from Red Back Mining for $7.1 billion in 2010, but the carrying value has been affected by cost pressures for labor and materials, according to the company.

Although Kinross took a charge on Tasiast, development of the mine is still a priority, according to Kinross President and Chief Executive Officer Tye Burt.

“Tasiast remains our first development priority in a measured and prudent plan for capital allocation and growth designed for long-term value and financial strength,” he said in the fourth-quarter earnings announcement.

High Mark family-oriented company

By DYLAN WOOLF HARRIS Mining Quarterly

ELKO — High Mark Construction rooted itself to the Elko area last September when it moved locations to company-owned land. But being rooted to Elko could also be a metaphor for the kind of company High Mark has been since its beginning.

“The one thing that we do ... we are very family oriented,” said Richard Katsma, owner and president of High Mark Construction. “We are not a union contractor. A lot of the people we have working for us have worked here for years and years and years. They got family, kids here, houses here.”

Katsma said he once was a contracted employee for a construction company where he saw workers stay for the length of the contract and then move on to another job in another city. He decided to make High Mark something more stable.

High Mark found success in the area and began to grow.

“We enjoy working in Elko, we enjoy

supporting Elko, we keep our business virtually in town,” he said.

And that business commitment seems to have paid off, but Katsma is quick to credit his crew to the success his company has seen.

“We got where we did from our employees and our supervision,” Katsma said. “I’m not the person who got us here — we got us here. Extremely good people.

We couldn’t do it without the core group of people, by far.”

It wasn’t long ago when Katsma began High Mark with only a pair of employees with zero pieces of owned equipment. In 1998, after spending time working construction in the area, associates suggested to Katsma that he open his own mine construction business. Katsma took the suggestion seriously and soon opened High Mark.

“There was only two of us at the time,” Katsma said.

High Mark tried to find its niche as a local business that provided top notch work.

“There were real large contractors and

High Mark Construction President Richard Katsma sits at his office desk at 3755 Manzanita Lane.

Dylan Woolf Harris Mining Quarterly

real small ones, (when he began),” he said.

He was told the large contractors cost too much particularly for the medium to small jobs, and very the small contractors did not have high enough quality.

His goal was for High Mark to hit the best of both sides with affordable prices and quality work, despite starting small.

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Continued from page 79 and building business relationships, he said.

High Mark continued to hire people and buy its own equipment by winning bids for mine work.

Currently, High Mark has a steady employee base.

“We employ about 125 people on the average,” said Katsma. “We grew a lot last year, from company size probably 35 percent last year.” Katsma said his gut feeling was that “because of the quality of work we have done, and the service we have done, our clients have forced us to get larger.

“Now we can park all of our employees,” Katsma said of the benefits of the new location, adding the new building has more office space, a bigger shop, and enough room to store High Mark’s 60 pieces of heavy equipment and other supporting equipment.

Despite moving all the equipment, personnel, and the offices, Katsma said the move was “relatively painless,” and that the new location is a great fit.

High Mark buses its employees out to multiple Newmont Mining Corp. and Barrick Gold Corp. surface mines where High Mark has built leach pads, done site development and reclamation projects, road building, and other construction jobs.

“We come very close to performing all aspects of support for the mine,” Katsma said.

And High Mark is an appropriate moniker, though the origin story behind the name High Mark, Katsma said, is long and not particularly interesting — having something to do with snowmobiling — but he’s reappropriated it to fit the company. “How I like to put it now (it’s) our catch logo: Set your highest mark in quality, safety, and production,” he said.

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High Mark Construction works in mid-February on Newmont Mining Corp.’s new leach pad at the Emigrant Project south of Carlin.

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Evolving Gold drills on Carlin Trend

By ADELLA HARDING Mining Quarterly Editor

ELKO — Evolving Gold Corp. is optimistic about its flagship Carlin-Humboldt projects on the Carlin Trend.

“Three holes have intersected underground grades and thicknesses of gold,” Steven Koehler, chief geologist for Evolving, said about the Carlin Project.

“The stuff we are doing at CarlinHumboldt most likely will be an underground setting,” he said.

Currently, Evolving has one drill rig on the Carlin Trend.

“We’re going to keep one rig for probably all year,” Koehler said.

“It’s devilish tough now to get a drilling rig of any shape or size. We have to plan four to six months ahead to get a drill rig.

There is lots of competition out there,” Koehler said.

The best results from drilling at Carlin included: • Drill hole CAR-007 intersected 10 feet of 0.371 ounces per short ton of gold from 2,489 to 2,499 feet.

• Drill hole CAR-007 intersected 15 feet of 0.905 opt gold from 3,089 to 3,104 feet.

• Drill hole CAR-010 intersected 33.1 feet of 0.324 opt gold from 2,925.7 to 2,958.8 feet.

Koehler said the Carlin Project is in the area of Newmont Mining Corp.’s Emigrant deposit now being developed for mining, Newmont’s Rain deposit that was earlier mined and Premier Gold’s Saddle Project near Rain. These are all south of Carlin.

The Carlin and Humboldt projects are separate but referred to as one large land package, Koehler said. The package covers about 56 square miles.

He said Evolving Gold has the second largest land-holding package on the Carlin Trend after Newmont.

The land package south of Interstate 80 is made up of roughly two-thirds the Humboldt Project 100 percent controlled

by Evolving. One-third is the Carlin Project, which is subject to a Newmont agreement, according to the company’s website.

Along with the Carlin-Humboldt land package, Evolving Gold also has the Jake Creek Project roughly six miles east of Newmont’s Twin Creeks Mine in Humboldt County.

“We’re done drilling for the moment and waiting for assays,” Koehler said.

The best result from Jake is one hole that intersected 95 feet of 0.039 opt gold at 740 to 835 feet, according to Koehler.

The company also has the Rattlesnake Project in Natrona County, Wyo., that Agnico-Eagle is funding and exploring.

Koehler said that project “is definitely going in the right direction.”

Core drilling during 2011 at Rattlesnake identified high-grade gold mineralization at a new target at South Stock, identified a new porphyry target at Northeast Stock, expanded the North Stock mineralization, and confirmed the porphyry target between North Stock and Antelope Basin, according to an Evolving Gold announcement in January.

Looking at exploration in Nevada, Koehler said the number of junior exploration companies “has expanded dramatically. I think in terms of bringing more money and value to the state of Nevada, it’s been great.”

He said this is a great time to be exploring, when gold price are above $1,700 an ounce.

“It’s a career opportunity. That’s exactly why Evolving Gold is aggressive,” Koehler said. “It’s a fun time to be in the business.”

“Nevada continues to give up a lot of ounces, and we see quite a few new discoveries in the state,” he said.

Evolving, which has its headquarters in Vancouver, a U.S. office in Longmont, Colo., and an exploration office in Carlin, is focused on exploration and not on becoming a mining company, Koehler said.

“We’re an exploration company that doesn’t have any interest really in becoming a mining company,” Koehler said. “We try to reward shareholders through drilling and discovery. We know we’re not miners.”

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Royal Gold CEO optimistic on market

By ADELLA HARDING Mining Quarterly Editor

ELKO — “I’m quite excited about the opportunities ahead for us and excited about the broader gold market as well,” Royal Gold President and Chief Executive Officer Tony Jensen said.

He said he believes the macro-economics case for high gold prices is still in place and the Federal Reserve’s soft monetary policy “bodes well for gold.”

Jensen also said the World Gold Council reports gold demand is up, and that’s good for a company that has royalties on gold production, along with silver and copper.

Royal Gold’s revenue comes roughly 10 percent from copper and 5 percent from silver, but the majority is on gold.

The company provides financing for emerging mine projects “similar to what a bank might provide but we take a percentage of production,” Jensen said.

The Denver-based company has royalties in Nevada and would like to add to those, he said, but more recent projects

from Newmont Mining Corp.’s are in Mexico and Chile.

Leeville Mine north of Carlin, The Nevada royalties are at which provided $3.1 million in the Robinson, Leeville, Goldroyalty revenue on 102,946 strike, Cortez, Bald Mountain ounces of gold, compared and Marigold mines, and there with $2.59 million on 105,998 soon will be royalties from the ounces of gold the prior year.

Gold Hill Mine nearing comBarrick Gold Corp.’s Cortez pletion at Round Mountain, Mine provided $2.66 million Jensen said in a telephone in royalty revenue on 23,609 interview. ounces of gold, down from William Zisch, vice presi$7.64 million on 89,445 dent of operations for Royal ounces of gold in the 2010 Gold, said in the company’s quarter. earnings teleconference that Tony Jensen Cortez production in the 2011 quarter Gold Hill will provide a 2 percent sliding came mostly from the new Cortez Hills scale royalty.

“We anticipate production in the third operations, where Royal Gold doesn’t hold a royalty. Royal Gold’s royalty is on quarter of this year,” he said.

Kinross Gold Corp. operates Round the Pipeline mining complex.

Quadra FNX Mining Ltd.’s Robinson Mountain and is 50 percent owner.

Mine provided $1.95 million in royalty Barrick is the other owner.

“We also have a piece of ground at revenue on 7,193 ounces of gold and 21.1 Twin Creeks and at Pinson as well,” million pounds of copper production in the 2011 quarter, compared with $3.46 Jensen said.

According to the Royal Gold earnings million in revenue on 12,655 ounces of report for the quarter ending Dec. 31, gold and 24.7 million pounds of copper higher gold prices increased revenue in the 2010 quarter.

Royal Gold stated Quadra FNX attributed the downturn at Robinson to both planned and unplanned mill maintenance issues and a localized pit wall failure that resulted in delaying access to areas of high-grade ore at the bottom of the Ruth pit.

This was partially offset with production from stockpiled ore, however, and Quadra FNX is now mining the higher grade benches at the bottom of the Ruth Pit. Two acquisitions “We also had a very productive quarter furthering our growth projects within the portfolio with the acquisition of an additional interest at the Mt. Milligan Project and completing a transaction on the Tulsequah Chief Project, both located in British Columbia,” Jensen said in the earnings report.

The company acquired an additional 15 percent of the payable gold to be proSee ROYAL GOLD, 85

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84 MINING QUARTERLY, Elko, Nevada SPRING 2012

Royal Gold ...

Continued from page 83 duced from the Mt. Milligan copper and gold project for $270 million and cash payments of $435 for each payable gold ounce produced to bring the total to 40 percent ownership of the payable gold.

The total cost is $581.5 million, and Royal Gold stated it has paid $364.6 million of that amount so far, with quarterly payments ahead.

The company acquired 12.5 percent of the payable gold and 22.5 percent of the payable silver on the Tulsequah Chief Project in December for $60 million and $450 per-ounce payments on payable gold Net income Royal Gold announced record net income of $23.4 million, or 42 cents per basic share, on record royalty revenue of $68.8 million for the quarter ending Dec. 31.

The 28 percent increased income compares with net income for the quarter ending Dec. 31, 2010 — the second quarter of Royal Gold’s fiscal year — of $18.3 million, or 33 cents per

share, on royalty revenue of $56.3 million.

“We are pleased to have recorded another solid quarter of financial results. This marks the third consecutive quarter of record revenue and net income for Royal Gold as our growth profile continues to deliver financial results,” Jensen said in the earnings report.

Higher gold and silver prices helped boost revenue.

The average price of gold for the second fiscal quarter was $1,688 per ounce, up 23 percent from $1,367 per ounce for second fiscal quarter of 2010.

The company reported quarterly revenue increases were largely driven by increased production from Andacollo in Chile and Voisey’s Bay in Canada, new production from Holt in Canada and Canadian Malartic Mine and continued ramp up at Peñasquito in Mexico.

Top revenue generators Looking at the top 11 revenue generators, Royal Gold reported Teck’s An-

dacollo Mine provided $16.18 million in revenue on 13,070 ounces of gold, based on a 75 percent net smelter royalty, compared with $11.33 million on 11,087 ounces of gold in the 2010 quarter.

Vale’s Voisey’s Bay was the secondhighest royalty provider, generating $12.04 million for Royal Gold in the 2011 quarter on 27.4 million pounds of nickel and 78.6 million pounds of copper, compared with $8.6 million on 22.5 million pounds of nickel and 39.6 million pounds of copper in the 2010 quarter.

Goldcorp Inc.’s Penasquito Mine provided $6.31 million to Royal Gold on 67,827 ounces of gold, 5 million ounces of silver, 40.2 million pounds of lead and 78.4 million pounds of zinc.

That is up from the $5.85 million in the 2010 quarter on 54,775 ounces of gold, 5.1 million ounces of silver, 38.3 million pounds of lead and 58.1 million pounds of zinc.

St Andrew Goldfields paid $4.23 million to Royal Gold on its production from the Holt Mine of 11,461 ounces of gold. This is the first year for the royalty,

according to the earnings report.

Alamos Gold’s Mulatos Mine in Mexico provided $3.57 million in royalty revenue to Royal Gold on 43,223 ounces of gold, compared with $3.04 million on 47,834 ounces of gold in the 2010 quarter.

Revenue to Royal Gold from the Leeville, Cortez and Robinson operations were next on the list of 11 top producers.

They were followed by Minefinders Corp.’s Delores Mine in Mexico, which provided $1.67 million in royalty revenue on 20,663 ounces of gold and 900,000 ounces of silver, compared with $870,000 on 13,741 ounces of gold in the 2010 quarter and 500,000 ounces of silver.

Osisko’s Canadian Malartic Mine provided $1.53 million in revenue on 54,141 ounces of gold, according to the report.

There was no royalty the prior year.

Inmet Mining Corp.’s Las Cruces Mine in Spain provided $1.48 million on 28.1 million pounds of copper, compared with $990,000 on 16.7 million pounds the prior year.

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Mt. Hope study draws extensive comments

By ADELLA HARDING Mining Quarterly Editor

EUREKA — General Moly could receive approval late this year for its Mt. Hope molybdenum project in Eureka County, which drew a number of positive comments.

The U.S. Bureau of Land Management’s Battle Mountain District had already received 300 public comments on the draft environmental study by Feb. 21, according to Angelica Rose, the BLM’s project manager for Mt. Hope.

“There are a couple of different kinds of form letters so the majority falls into the form letter category. They are actually in support of the project,” she said.

Issuance of the final EIS and record of decision will follow, after the BLM addresses the comments.

“We’re hoping to issue the final environmental impact statement by the end of this year with the record of decision to follow,” Rose said. “It all depends on the comments received and if they need additional modeling or baseline monitoring.”

The BLM’s deadline for public comments on the draft environmental impact statement on Mt. Hope was March 1.

“We just want to thank everyone who has commented on the draft EIS and shown an interest in the project and supported it,” said General Moly’s manager of external communications, Zach Spencer.

The 300 comments include ones the BLM recorded at

86 MINING QUARTERLY, Elko, Nevada SPRING 2012

Bruce Hansen, left, chief executive officer of General Moly Inc., talks in January with Steve Drimmer, whose family has owned the Mt. Hope Project site for years, following a U.S. Bureau of Land Management hearing at the Eureka Opera House on the draft study of the project.

Adella Harding Mining Quarterly

public hearings in Eureka and Crescent Valley in January, Rose said.

General Moly plans a long-life molybdenum mine that would employ 400 workers once it goes into production.

The mine would be 21 miles north of the town of Eureka.

Those hearings drew large crowds. A number of speakers were in favor of the project, but there was opposition as well.

Businessman Scott Raines said at the Eureka hearing the project will have a “very positive impact” on Eureka.

“This mine will have minimal impacts in comparison to many other projects.

Ya, there will be a hole in the ground, but there will be sufficient mitigation,” he testified.

“I feel General Moly will be a very positive influence,” local businesswoman Maribeth Robinson testified, adding that the creation of jobs at this time is important. “It’s well past time for Eureka County Commissioners to stop hindering the project and work with General Moly.

It’s time for us to get behind this project and realize the benefits.”

Eureka County Commissioners still have concerns about the project’s impacts.

“We continue to support the Mt. Hope Project as any other mine done right,” Eureka County Natural Resources Man-

Adella Harding/Mining Quarterly

Bob Burnham, left, a Eureka County farmer and school board member, talks with Bob Pennington, chief operating officer of General Moly, at the Eureka Opera House following a hearing on the proposed Mt. Hope Project. ager Jake Tibbitts testified.

He said, however, there are places where the draft environmental impact statement conflicts with the county’s

policies, especially because of the large scale of the project, and the county doesn’t believe the mitigation of impacts in the EIS is enough.

“We need the issues properly fleshed out and mitigated up front,” Tibbitts said.

The county also is worried about the socio-economic impact from Mt. Hope to the historic town of Eureka, which has roughly 600 residents, Eureka County Commission Chairman Leonard Fiorenzi said after the hearing.

Fiorenzi said he expects only about 30 percent of the Mt. Hope employees to live in Eureka, “but 30 percent of employees will be a huge impact to Eureka.”

“The BLM was impressed with the turnout for these two meetings,” Jon Sherve, assistant field manager for minerals for the Battle Mountain office, said in a statement.

The BLM reported roughly 120 people signed in for the Eureka meeting and 75 were at the Crescent Valley meeting.

General Moly Chief Executive Officer Bruce Hansen stated he was pleased with the turnout at both open houses and hearings.

“I was very proud to hear community leaders from Eureka stand up in support of the Mt. Hope project. Their support is a testament to the hard work of our team in Nevada and our commitment to mining done right within the Eureka See MT. HOPE, 91

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 87

88 MINING QUARTERLY, Elko, Nevada SPRING 2012

Pilot Gold focuses on Kinsley

By ADELLA HARDING Mining Quarterly Editor

ELKO — Pilot Gold Inc. has a saying that its Kinsley Mountain exploration project is “in the shadow of Long Canyon.”

The company is exploring in southern Elko County at the long-closed former Alta Gold mine that President and Chief Executive Officer Matt Lennox-King said has started to look like another Long Canyon.

Many of those on the Pilot Gold team were in on the discovery of the Long Canyon deposit in the Pequop Mountains between Wells and West Wendover, and Pilot Gold was spun off when Newmont Mining Corp. acquired Pilot Gold Corp.

See PILOT GOLD, 90

Pilot Gold Inc. is exploring the Kinsley Mountain Project in southern Elko County 55 miles southeast of the Long Canyon Project.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 89

Pilot Gold ...

Continued from page 89 Fronteer for $2.3 billion.

Newmont plans to mine at Long Canyon, and the company is looking at starting construction in 2015.

“Kinsley hosts the same type of rocks as Long Canyon. If a trend is developing, we will be part of the trend,” LennoxKing said in February. “We really like northeastern Nevada. There is great potential for more discoveries at Kinsley.”

Vancouver-based Pilot Gold expects to start drilling again on March 15, starting with one drill and ramping up to three drill rigs for 3,600 feet of drilling, he said.

The company drilled six preliminary holes at Kinsley in the last season “to really get a good handle” on the potential, Lennox-King said.

The drilling found impressive intervals of gold mineralization at Kinsley Mountain, according to the company.

The best results were 0.2 opt gold over 60.37 feet, including 0.42 opt over 25.6 feet, on one hole; 0.23 opt over 24.6 feet, including 0.48 opt over 10.5 feet in another hole; and 0.22 opt over 28.54 feet, including 0.425 opt over a little less than 10 feet, on a third hole.

Lennox-King also said Pilot Gold plans to file a plan of operations with the U.S. Bureau of Land Management’s Elko office for extended drilling in the area and for future drilling needs.

Pilot Gold acquired Kinsley Mountain last September in a deal with Animas Resources, purchasing that company’s option agreement with Nevada Sunrise Gold Corp. for $350,000 and future shares to earn a 51 percent interest by spending $1.5 million.

“We expect to do that by April,” LennoxKing said, adding that the next step is to bring the option up to 65 percent by spending $3 million within five years.

Pilot Gold also recently acquired 9.9 percent of Nevada Sunrise by purchasing 6.25 million units of the company for 12 cents per unit in a private placement that followed an earlier 16.7 million units that consists of one share and one half of a share purchase warrant, according to Nevada Sunrise.

Kinsley still has gold resources from when Alta Gold mined the site before the company went bankrupt in the late 1990s and shut down the mine. The site has been reclaimed, but roads are still there, and there is exposure to the open pits, Lennox-King said.

“It’s great geology,” he said, reporting the company has 5,400 acres of property,

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“Kinsley hosts the same type of rocks as Long Canyon. If a trend is developing, we will be part of the trend.”

— CEO Matt Lennox-King

including 128 claims staked to the north.

“The main focus will be Kinsley this year,” Lennox-King said. “Our goal is to establish a resource by the end of the year for Kingsley Mountain contingent on sufficient drilling, of course.”

Moira Smith, the company’s chief geologist and formerly chief geologist for Fronteer in Nevada, is optimistic about Kinsley Mountain, according to a February announcement on the results from the six holes.

“Our technical team carries forward Fronteer Gold’s in-depth, working knowledge of Long Canyon and our strategy in Nevada was to identify a project with the same attributes and exploration potential as Long Canyon,” she said.

“I believe Kinsley Mountain has the framework for discovery and a clear path to building a significant, high-quality deposit in the near-term,” Smith said.

The company has a large number of exploration projects in Nevada that it may explore later or are available for joint venture or for sale.

“We’re open to anything that will create value for the company,” LennoxKing said.

Pilot Gold also continues to hold two exploration properties in Turkey that Teck Resources Ltd. is exploring.

Pilot Gold’s attachment to Nevada includes the office in Elko that Fronteer Gold occupied. Lennox-King said there are roughly 11 people based at the Elko office, and all but one had been with Fronteer. He was with Fronteer for 10 years. Companywide, Pilot Gold has about 25 people, and 17 of them are geologists or geoscientists.

Pilot Gold has $19 million in its treasury, and expects to spend more than $3.6 million in Nevada this year, the bulk of that at Kinsley, Lennox-King said in a telephone interview.

Mt. Hope ... and Newmont Mining Corp.’s Leeville and Gold Quarry mines, Fiorenzi said.

“It’s a totally consumptive use operation. That’s what raised eyebrows, I believe,” he said after the hearing in Eureka.

“We remain extremely confident that the state engineer’s ruling and processes will be affirmed in district court and are disappointed with the elected officials of Eureka County for going forward with the appeal of the state engineer’s ruling, as are a growing number of Eureka residents, especially in light of the overwhelming public support that the Mt. Hope Project has in Eureka and surrounding communities,” Hansen said in a statement.

General Moly also recently provided an update on financing for the Mt. Hope Project.

General Moly announced the Sichuan branch of the China Development Bank confirmed the basic terms underlying a proposed $665 million term loan.

Colorado-based General Moly stated that while there are no binding commitments, the loan facility will now progress through drafting and syndication and should be completed, approved and available for Adella Harding/Mining Quarterly drawdown when General Eureka County Natural Resources Manager Jake Tibbitts testi- Moly receives permits for fies during the U.S. Bureau of Land Management hearing in Mt. Hope.

Eureka on General Moly’s proposed molybdenum mine.

The company stated that the basic framework The project would use roughly 7,000 of the loan is expected to include: • A debt facility of $665 million, of gallons of ground water per minute for which CDT will commit to lend $399 mining and processing.

Fiorenzi said the county is concerned million and arrange a consortium of because the planned open pit at Mt. Chinese and international banks to fund Hope “sits on the boundary where all the balance.

• Loan maturity of 12 years, including three water basins come together,” referring to the Kobeh, Diamond Valley a 30-month grace period to allow for the Mt. Hope project to be constructed. and Pine Valley water basins.

• Customary loan security terms, Mt. Hope would be using water for processing but not returning water to including a pledge of the company’s the ground table the way the mine assets and its 80 percent interest in the dewatering operations at the mines in Mt. Hope project.

• A Hanlong corporate guarantee far northern Eureka County do, such as Barrick Gold Corp.’s Goldstrike Mine throughout the loan term.

Continued from page 87 community,” he said in a statement.

Hansen said no new issues were raised, and General Moly continues “to believe that the BLM has a very robust and defensible DEIS.” Separately, a district court hearing is slated for April 3 on Eureka County’s protest against State Engineer Jason King’s granting of water rights for the project.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 91

Quadra FNX nears merger with KGHM

By ADELLA HARDING Mining Quarterly Editor

ELKO — Quadra FNX Mining Ltd. that operates the Robinson copper mine in White Pine County expects to sell to the Polish mining company KGHM in March.

Shareholders of the company approved the $2.9 million arrangement on Feb. 20, and Vancouver-based Quadra FNX stated the deal likely would close in March once it has approval under the Investment Canada Act. Kristina Howe, manager of media and investor relations for Quadra FNX, said the review period was extended.

“It’s hard to put a time right now on when the Investment Canada Act will come back,” she said.

Quadra FNX reported on Feb. 21 the Supreme Court of British Columbia issued a final order approving the proposed sale.

The company also reported that 78.6 percent of the votes cast favored the sale to KGHM, a global copper and silver producer headquartered in Lubin, Poland.

Along with the Robinson operations in Nevada, KGHM will be acquiring Quadra

FNX’s Carlota Mine in Arizona, the Franke Mine in Chile, and Levack in Sudbury, Ontario, which includes the Morrison Deposit, Podolsky and McCreedy West.

Additionally, KGHM will acquire the Sierra Gorda copper and molybdenum project in Chile and the Victoria Project in Sudbury.

Quadra FNX reported in February the company produced 59 million pounds of copper in the fourth quarter of 2011, up from 57 million pounds in 2010.

Copper production from the Robinson Mine near Ely totaled 27 million pounds, the same as the 27 million pounds in the 2010 quarter.

The company also produced 24,000 ounces of precious metals in the fourth quarter, including 8,000 ounces of gold from Robinson, compared with 39,000 ounces in the 2010 quarter, including 16,000 ounces from Robinson.

For all of 2011, Quadra FNX produced 220 million pounds of copper, compared with 224 million pounds in 2010, and 103,000 ounces of precious metals, compared with 148,000 ounces the prior year, according to the report.

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The 2011 nickel production totaled 10 million pounds, up from 7 million pounds in 2010.

Robinson alone produced 95 million pounds of copper last year, compared with 109 million pounds the prior year, according to the report.

Robinson’s gold production was down from 73,000 ounces for the year 2010 to 30,000 last year because of the transition from the Veteran Pit to Ruth Pit. Quadra FNX President and Chief Executive Officer Paul Blythe said in the announcement on production that it is business as usual at the company’s mines until the proposed sale of the company to a Polish company goes through.

Looking at Robinson, Blythe said “the key at Robinson continues to be increasing operating flexibility, through the various measures previously discussed, including bench widths, pit slopes, stockpile buffers and working faces.”

He also said mill maintenance and slope stability issues in the fourth quarter at Robinson precluded an increase in actual copper production from the third quarter but total tons mined increased from the

third and fourth quarter.

A localized pit wall failure resulted in delaying access to areas of high grade ore at the bottom of the Ruth Pit although this was offset somewhat by stockpile drawdown, according to the production announcement.

Blythe also commented on operations in Canada and on the Sierra Gorda Project.

“At Morrison, the previously announced lease agreement with Xstrata Nickel relating to the Craig shaft was completed during the quarter and transition work began immediately,” Blythe said.

The company expects the transition to the Craig Mine to be completed in the second quarter. Mining of nickel ore for delivery to Xstrata continued at McCreedy West.

Quadra reported all three operations in Sudbury continued to produce at or above expectations.

“Agreements were also reached that significantly increased our mineral rights footprint at Sierra Gorda and the project remains on schedule and budget,” Blythe said.

SPRING 2012 ELKO DAILY FREE PRESS, Elko, Nevada 93

Pumpkin Hollow breaks ground for shaft

By ADELLA HARDING Mining Quarterly Editor

ELKO — Nevada Copper expects shaft sinking at the Pumpkin Hollow Project on the outskirts of Yerington to begin in two to three months for underground exploration, now that ground was broken in a large ceremony.

Clark Construction was mobilizing in late February to begin the site preparation, install the collar, headframe and hoist before the actual sinking, said Tim Dyhr, vice president of environment and external relations.

“It’s exploration, not actual mining,” he said of the underground project with its 2,200-foot shaft.

Dyhr also said the company plans to submit a permit application to the Nevada Division of Environmental Protection “hopefully in March.”

Nevada Copper plans an underground and surface mining operation with one mill to process the copper, gold and silver, and the permitting time frame depends on whether a land arrangement with the U.S. Bureau of Land Manage-

94 MINING QUARTERLY, Elko, Nevada SPRING 2012

This map shows the land the city wants to obtain from the U.S. Bureau of Land Management, then annex and sell or lease a portion to Nevada Copper for the Pumpkin Hollow Project.

City of Yerington

ment goes through Congress.

A feasibility study estimated that in the first five years, the average annual production will be 274 million pounds of copper, 53,000 ounces of gold and 1.1 million ounces of silver.

U.S. Rep. Mark Amodei, R-Nev., along with original co-sponsors Rep. Shelley Berkley, D-Nev., and Rep. Joe Heck, RNev., announced in February that they introduced the “Yerington Land Conveyance and Sustainable Development Act” in the U.S. House.

The land deal would convey roughly 10,000 acres to the City of Yerington, which in turn would lease land to Nevada Copper for the planned mine.

If the land bill wins approval, Nevada Copper will be seeking permitting for the proposed mine through NDEP. Otherwise, the company will seek approval for the BLM. “Subject to the land transfer, we will start construction in 2013,” Dyhr said, adding that the BLM permitting might add two years to the construction startup, but the same plan will go to either agency.

The groundbreaking marking the start of the development drew roughly 700 people on Feb. 18, Dyhr said, including Nevada Gov. Brian Sandoval and Amodei.

Sandoval told the crowd to “believe it” that the employment of up to 800 people at Pumpkin Hollow is right in line with his jobs initiative to create 50,000 jobs in Nevada, according to a report from Nevada Copper.

“I know how much we’ve been struggling out here and for Nevada Copper to have this type of confidence and this type of investment in this community and this county means the absolute world to us,” the governor said.

Nevada Copper reported the initial shaft work will create roughly 40 jobs.

Sandoval said the ceremony and large turnout will go down in history of Lyon County as “one of those absolute bedrock moments and a game changer for a community.”

Amodei said rural Nevada communities depend on high-paying mining jobs to sustain their economies.

“We need to assure that these projects can be developed responsibly, incorporating the highest safety and environmental standards that have been developed by the industry under the guidance of our state and federal regulators. We also need to be able to permit these projects in a timely manner, especially considering the current economic conditions in Nevada, especially here in Lyon County,” he said at the ceremony.

Lyon County has a jobless rate of more than 16 percent, the highest in the nation, according to Amodei.

The groundbreaking on Feb. 18 drew roughly 700 people, including Nevada Gov. Brian Sandoval and U.S. Rep. Mark Amodei, R-Nev. The event featured the first ceremonial shovel of dirt by Sandoval, former Speaker of the Nevada State Assembly and lifelong resident of Yerington Joe Dini, and Nevada Copper President and Chief Executive Officer Giulio Bonifacio.

Four generations of the Dini family were at the event, including Yerington Mayor George Dini.

“This shaft will allow us to access the over 820 million pounds of high grade underground copper reserves in the East deposit defined in the feasibility study,” Bonifacio said.

“The shaft will also provide us with detailed information on the geotechnical, geochemical and hydrological conditions that exist underground and verify our mining and production assumptions.

It will give us access to further extend and define the East underground resource from subsurface drill stations, as well as a platform for further exploration of the nearby JK34 zone.

“Drilling from underground is much more cost effective and will allow us to define areas of high grade ore targeted for early mining,” he said.

Regarding the land deal, Nevada Copper stated the city seeks to annex the area that includes Pumpkin Hollow to allow it to share in property and net proceeds of mines tax revenues.

The bill directs the secretary of Interior to convey to the city for fair market value all right, title, and interest in the federal land.

“We are proceeding with planning and more definition for development of this property for the forthcoming congressional review and for review by our City Council, Planning Commission and Nevada Copper,” Mayor Dini said in a Feb. 16 statement.

In addition to mining, the land would be used for economic development and recreation, and the city stated that Nevada Copper would cover the land acquisition costs.

Dyhr said the land to be conveyed has no resource conflicts. In fact, “it’s so dry there isn’t any sagebrush,” he said, which means there isn’t habitat for the sage grouse that faces potential listing as an endangered species.

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Golden Sunlight production low in 2011, but heads up

By NICK GEVOCK Montana Standard

BUTTE, Mont. — Golden Sunlight Mine near Whitehall had a relatively low year when it comes to producing gold.

But that doesn’t mean it wasn’t profitable.

“We’re still here and gold prices are still high,” said Tim Dimock, Golden Sunlight manager.

The mine, which is owned by parent company Barrick Gold Corp., opened in 1982. It’s outlived its projected lifespan several times and is slated to close in 2015. Or maybe not.

Barrick invested $132 million into the mine in recent years to upgrade its mill, Dimock said. And the company has also stepped up its exploration in an effort to keep the mine going.

Last year, Golden Sunlight produced 64,000 ounces of gold. The mine was in its first full year of mill operation after a shutdown while the upgrades were made.

“That’s not a big year for us,” he said.

“We like it when we produce more than 100,000 ounces.”

But with gold prices remaining above $1,700 per ounce, 2011 was profitable.

And Golden Sunlight has kept its production costs per ton down, Dimock said.

Of the 64,000 ounces Golden Sunlight produced last year, 8,000 ounces came from 10 other, smaller mine sites that used the company’s mill for processing. Those smaller operations sell the ore to Golden Sunlight.

Dimock said while that’s not a large amount, it adds up. And it helped in the clean up of several old mine sites that the ore came from.

Golden Sunlight has high hopes for 2012. Dimock said they project production to double to 136,000 ounces this year.

The mine is getting into its main ore body, called the mineral hill deposit. At the same time, they’re continuing to

“It’s a good time to be a gold miner and it’s a good time for us to try to sustain this operation.”

— Tim Dimock, mine manager

explore areas just off the main pit called the “north” and “south” areas.

That hopefully won’t be the last deposit the mine is able to extract.

Dimock said the company is also looking at yet another ore body, which could again add to Golden Sunlight’s lifespan.

“We’re hoping that they’ll buy us a few years of life so that we can have time to finish exploring and permitting the area on Bull Mountain called the Bonnie deposit,” he said of the newest ore bodies. “It’s a good time to be a gold miner and it’s a good time for us to try to sustain this operation.”

Golden Sunlight employs 205 workers, as well as more than 90 subcontractors.

That’s been good for Whitehall and Jefferson County, said Tom Harrington, extension agent with the Jefferson Local Development Corp. He said the mine’s annual payroll of more than $13 million and the taxes it pays are crucial elements of the local economy.

A handful of the employees there started when the mine opened in 1982 and will be able to retire there, and Harrington said he’s hopeful it will remain open.

“We’re already in some second generation miners up there,” he said.

—————— The Montana Standard is a Lee Enterprises newspaper, as is the Elko Daily Free Press, which publishes the Mining Quarterly.

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American Vanadium pursuing Gibellini Project

By ADELLA HARDING Mining Quarterly Editor

ELKO — American Vanadium Corp. hopes to file a plan of operations with the U.S. Bureau of Land Management later this year for its proposed vanadium mine in Eureka County.

“We hope to be building this in 2015 and firing up in 2016, if everything goes well,” said Reno-based Michael Doyle, executive vice president of operations for the Canadian company that expects to develop the first vanadium mine in the United States.

The company earlier provided baseline data to the Battle Mountain BLM District for review, and the plan of operations will kick off the environmental impact statement process toward permitting the surface mine.

“It will be a bit before we see the first cut on the baseline data review. Then, we will send in the plan of operations, probably in the next few months,” Doyle said.

American Vanadium would develop the mine at its Gibellini property 27 miles south of the town of Eureka in the Fish

Creek Mining District.

Doyle said plans still call for employing between 90 and 100 people and the mine will be a fairly small operation, mining a little more than 3 million tons a year.

“But it would produce a significant amount of vanadium,” he said.

This vanadium mine will be a different from the big open pits where gold, copper and silver are mined in Nevada, however, because the ore is on and near the surface.

“You can stand on the ore zone,” Doyle said. “There is no strip ratio. You can stand on a hill and look down at it. It has the color of Fruit Loops, and you can actually smell it. That’s kind of neat to see.”

Vanadium is used to strengthen steel, and there is a market in the steel industry for vanadium, but the company is looking at the expected growth in demand for vanadium for redux batteries.

These are “really big batteries that take a lot of vanadium,” Doyle said. “A small one is the size of a sea container.”

In fact, American Vanadium is looking

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at the potential of using such a battery to power the planned mine, he said.

“The exciting part of the American Vanadium story is the fact that not only will we be the only mine in the U.S. producing vanadium for the steel industry but will also be the only producer of vanadium electrolyte necessary for vanadium flow batteries, which allow for the mass storage of renewable and conventional energy,” said Ron MacDonald, executive chairman of the company.

The feasibility study for the proposed mine looked at the steel market, however, and Doyle said the company may do offtake agreements with companies for vanadium.

The demand in the steel market grew when China changed its building codes to require vanadium in rebar for building construction, “but the battery market is more lucrative,” he said.

Doyle said the timing for the EIS process should be about right for the company as the market continues to build for the batteries.

“We should be geared up at the time it starts to take off in the U.S.,” he said.

Chris Berry, founder of House Mountain Partners LLC, house-mountain.com; publisher of Morning Notes and www.discoveryinvesting.com and researcher of junior mining and resource stocks, said North America is 95 percent reliant on vanadium from overseas sources.

“Vanadium is critical to infrastructure, and critical to the quality of life that we have become accustomed to in North America,” he said. “You don’t want to be 95 percent reliant on something from China, or anybody for that matter.”

American Vanadium has already met with Eureka County Commissioners to let them know what the company plans, and Commission Chairman Leonard Fiorenzi said in January that the county is including the Gibellini Project in its expectations for growth.

General Moly plans the Mt. Hope Project north of Eureka, and that project would employ roughly 400 people. There also are plans for mining at Gold Bar again, he said.

Doyle said the company also has met with the Western Shoshone about the project.

BOSS TANKS Company caters to mines

By DANIELLE SWITALSKI Mining Quarterly

ELKO — Boss Tanks is taking it solar.

As fuel and energy costs continue to climb, solar energy is becoming more and more commonplace for industry leaders. For Boss Tanks, a tank and equipment supply and service company based in Elko, moving to solar systems for water pumping and remote fuel stations is keeping up with the times.

“Construction in mining opportunities and ranching opportunities move away from power lines and fuel or generators get more expensive, this (solar technology) gets to be better and better for a lot of solutions, and it is,” said Justin French, one of the seven full-time employees at Boss Tanks.

Ross Andreson/Mining Quarterly

See BOSS TANKS, 100

Boss Tanks employees Matt Anderson, left, and Justin French stand next to a solar array mounted on a trailer in the yard of the company’s facility on east Idaho Street.

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Boss Tanks ...

Continued from page 99 Providing small, remote power systems to mining sites is one way Boss Tanks is delving into the new wave of energy, such as using solar systems for stock water pumping.

“We’ve done a lot of different things so far, and we’ve been really happy with the results,” French said.

He said Boss Tanks is working with mines in northeastern Nevada to begin production of several solar projects that are in the early stages of development.

For mining companies that have livestock operations, Boss Tanks supplies them with a solar mobile trailer. Operations that have a large number of cattle can have a solar trailer that moves with the herd.

“You’re basically moving your water pumping and water needs with your herd.

And we built that for one of the mines, and we plug it into the hole and charge their water system and when the cattle move, we move it with them to a new pasture,” French said.

Looking to the future of solar panels in relationship to water pumping, French

does not think that will change much.

However, he said pump controls are advancing, as well as inverter technology that continues to be more reliable.

“We’re trying to improve reliability and reduce costs and that’s where it’s going. ...

As the technology gets more trusted and reliable, interest is growing,” French said.

“The panels themselves won’t shift a lot.”

Boss Tanks was started in 1996 by Joe Cumming. It serves a cross section of government agencies, agriculture and the mining industry. The company sells and installs pipe, fencing material, water, septic and fuel tanks, troughs, culverts, float valves, head gates, liners, livestock equipment and sprayers.

According to Matt Anderson with Boss Tanks, supplying potable water used in case a well fails is a large part of what Boss Tanks provides to the mining industry.

The potable water service is an on-call service Boss Tanks brings to the mine sites.

For information on Elko-based Boss Tanks and its services and supplies, visit ww.bosstanks.com, email info@boss tanks.com or call 738-2677.

100 MINING QUARTERLY, Elko, Nevada SPRING 2012

Ross Andreson/Mining Quarterly

Boss Tanks employee Chase Ritchie moves fence posts in the facility yard on east Idaho Street.

Safe Haven Rescue Zoo BLM taking award nominations plans fundraiser in May IMLAY — The Safe Haven Rescue Zoo in Pershing County that receives donations of money and labor from mining companies plans a fundraiser on May 19 at the Winnemucca Convention Center.

“Quite a few of the mines attend,” said Lynda Sugasa, director of the zoo that provides homes for lions, tigers and other animals and continues to expand.

“We are currently working on several new enclosures,” she said.

“We have two African lions, three Siberian tigers, three cougars, one Canadian lynx, two bobcats, one African serval and two foxes.”

Sugasa said Mark Miller of the Turquoise Ridge Joint Venture operations in Humboldt County has been coordinating volunteer days and coming out to help on his days off.

“Also, we are in the process of organizing volunteer days with Coeur Rochester employees who were a huge help last year,” she said.

“We’re looking for a list of spring work,” said Rochester General Manager Cindy Jones.

She said both regular employees and interns may work at Safe Haven.

Last year, the Coeur Rochester workers dug a trench and helped install PVC to expand all of the water lines to the new enclosure areas. They also created a 100-foot fire break around the entire facility.

“Barrick Turquoise Ridge, Goldcorp, Newmont Mining Corp. and Coeur Rochester have all been generous contributors. All of us at Safe Haven greatly appreciate the continued support they provide and their commitment to the community,” Sugasa said.

“Our rapid growth and expansions are largely due to their responsive support,” she said, The fundraiser will feature live and silent auctions, with auction items to include vacation packages, dinners, golf packages, a wine tour and balloon rides.

The event will begin at 5 p.m. with a cocktail hour and include dinner and entertainment.

Tickets are $30 per person and $300 for table sponsorships that include gifts, a special raffle and name on media and signage publications.

The tickets may be purchased through Safe Haven at 775-538-7093 or by mail to Safe Haven, P.O. Box 184, Imlay, NV 89418. The chamber in the Winnemucca Convention Center also has tickets.

By Adella Harding

ELKO — The U.S. Bureau of Land Management has extended to March 30 the deadline for nominations for the 2012 Reclamation and Sustainable Mineral Development Awards.

These awards recognize solid mineral development operations that embody the principles of sustainable development or represent outstanding examples of reclamation or environmental stewardship, according to the BLM. “Sustainable development is the underpinning of this awards program,” said BLM Director Bob Abbey. “It meets the needs of the present generation without compromising the ability of future generations to meet their own needs.”

The awards fall under five categories — the Hardrock Mineral Environmental Award, the Hardrock Mineral Community Outreach and Economic Security Award, the Hardrock Mineral Small Operator Award, the Hardrock Mineral Director’s Award, and the “Fix A Shaft Today!” Award.

Nominations are to be submitted in the BLM State Office (Attention: Solid Minerals) that has jurisdiction in the state where the operation is located. The presentation of awards will take place in September 2012 at the MINExpo show in Las Vegas.

Mining companies, regulatory authorities, geologists and members of the public may nominate operators or organizations in solid minerals industries for an award. Nominations need not be limited to operations on land managed by the BLM.

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P U BL I S H E D BY T H E E L K O D A I LY F R E E P R E S S

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Sp ri ng

Boring down at Cortez Hills

201 2

Jesse Toeffer, left, project manager for Barrick Gold of North America's regional projects group, and Jim Allred, construction supervisor for the blind bore project at Cortez Hills, stand in front of a special drill rig operating in Nevada for the first time.

Ross Andreson/Mining Quarterly