RGN | Vol 5 Iss 6 by Anderson Murray Media

RESOURCE Volume 5, Issue 6

GLOBAL NETWORK

Mining, renewable energy and oil & gas worldwide

A mining investor’s paradise

FEATURING

Teranga Gold McEwen Mining OceanaGold Osisko Metals ’S TSX ISSUE

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Gareth Penny Chairman Norilsk Nickel

Charl Malan Senior Analyst & Portfolio Manager VanEck

Cheryl Carolus Chairperson Gold Fields

Nicole Bieske Head of Program - Mining for Sustainable Development Transparency International

Hon. Winston Chitando Minister of Mines & Mining Development Zimbabwe

Amaka Anku Practice Head, Africa Eurasia Group

Julian Treger CEO Anglo Pacific Group

Peter Hambro Chairman, Peter Hambro Ltd & Former Executive Chairman, Petropavlovsk

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In 2017, 59% of all worldwide mining financings were undertaken on the Toronto Stock Exchange and over 53 billion mining shares were traded across the TSX and TSXV, amounting to a total value of C$206 billion. These are just a few statistics that emphatically confirm the view that Toronto is the undisputed home of the global mining sector, with over 1,200 mining companies from around the world listed on its two boards. In this issue, RGN pays homage to this mining investor’s paradise by attempting to provide a microcosm of the TSX’s mining index. We feature a diverse range of companies, large and junior alike, that are advancing exciting projects around the globe using capital raised from the TSX. We begin with Teranga Gold, who continue to be a shining light for sustainable development in West Africa’s gold industry. The TSX works closely with its mining companies to promote sustainable development and this is evident by the growing importance that TSXlisted miners place on CSR.

Executive Team Editor Jacob Ambrose Willson Content Manager Michelle Madureira Content Director (APAC and Americas) David Hunter Creative Director Hugo Currie ICT Director Stuart Clark Managing Director Simon Curran

Sustainability is a theme that runs through this issue, starting with RGN’s write up of the ICMM’s recent Social Progress in MiningDependent Countries report. We also welcome a guest post by Jeff Geipel from Mining Shared Value and revisit Alphamin Resources – who are healing scars left by years of mining-related conflict in the DRC. You can also get the inside track on TSX gold mining heavyweights such as McEwen Mining, OceanaGold and Dundee Precious Metals, along with some exciting stories from the effervescent critical metals space in the shape of profiles on Nemaska Lithium and Zenyatta Ventures. Lastly, RGN is proud to be partnered with the Investing in African Mining Indaba, which takes places over February 4-7th in Cape Town. Keep your eyes peeled for a special Indaba preview issue out next month. We hope you enjoy this issue and encourage you to connect with us on email, Facebook and Twitter. Thanks for reading!

Jacob Ambrose Willson Jacob Ambrose Willson, Editor

RGN is published by Anderson Murray Media: a diverse media and information services company focused on creating and distributing engaging content to business leaders across the globe. Anderson Murray Media Fulham Green, 69-79 Fulham High Street, Main Reception, Bedford House, London SW6 3JW Tel. +44 (0)207 148 5630

VISIT US ONLINE AT WWW.RESOURCEGLOBALNETWORK.COM

CONTENTS

TSX

NEWS 10 Global resources news Our selection of mining, oil & gas and renewable energy stories from the last month

ASSOCIATIONS 18 TSX The undisputed home of global mining financing 28 ICMM: Social Progress report Analysis through the lens of the UN sustainable development goals 40 Canadian Mining Hall of Fame RGN interviews Jon Baird of the Canadian Mining Hall of Fame

CONTRIBUTORS 50 Mining Shared Value A three-point plan for mining companies to enhance their social operating licences

TSX-LISTED MINING FIRMS 62 Teranga Gold The model for sustainable development in West Africaâ&#x20AC;&#x2122;s gold industry

CANADIAN MINING HALL OF FAME

TERANGA GOLD

CONTENTS MCEWEN MINING 76 McEwen Mining Asset rich leverage to gold, silver and copper 90 OceanaGold Operating high performing gold mines around the world 100 Osisko Metals Creating value in the base metals sector with two premier Canadian zinc deposits 110 Dundee Precious Metals Marrying record gold production with sustainable mining 122 Nemaska Lithium Fully funded and on track for major lithium salt production in the early 2020s 132 Alphamin Resources Facilitating a new era of responsible mining in DRC 144 Superior Gold Inc A business first, gold company second 160 Zenyatta Ventures Producing graphene from the only known igneous graphite deposit in the world 168 NuLegacy Gold Corporation Junior betting big in Nevada - the home of US gold production

CLASSIFIED ADVERTISING 178 Classifieds

APPOINTMENTS & EVENTS 180 Appointments Notable appointments in the resources industry from the past month 181 Events Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come

OCEANA GOLD

OSISKO METALS

NEMASKA LITHIUM

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NEWS | Brookfield Multiplex MINING

GLOBAL RESO

Our selection of mi renewable energy news

OURCES NEWS

Resource Global Network 11

ining, oil & gas and s from around the world

NEWS

BARRICK CHAIRMAN OUTLINES NEW COMPANY VISION AFTER RANDGOLD MEGA-MERGER Barrick Gold’s executive chairman John Thornton has laid out a streamlining plan for the gold mining major after its investors approved the US$6.1 billion merger deal with Randgold Resources. The world’s biggest gold producer confirmed that 99.8% of its shareholders were in favour of the no-premium transaction that was announced in October, with the all-stock deal now set to close on January 1st 2019. Outlining his vision for how the new $18 billion company will look, Thornton said: “Ideally, we will have sold certain assets that don’t fit … that’s number one. Number two, we will be demonstrably more efficient.”

Thornton added that he would like to replicate the deal-making pace set by Barrick when it made seven asset sales over 18 months. The firm’s staff compliment is also set for further streamlining under the new leadership of former Randgold CEO Mark Bristow. After the merger, Barrick will focus on lowcost mines producing 500,000 ounces of gold annually with at least 10 years of operations. It currently has five mines in its portfolio that fit this description. In other Barrick-related news, the company is reportedly in talks with Newmont Mining to combine their Nevada gold mining operations.

Resource Global Network 13

TWO MINING JUNIORS DEBUT ON THE TSX IN SEPTEMBER Toronto’s venture exchange the TSXV welcomed two mining companies to its ranks in October, in the shape of Ecuador-focused Luminex Resources and British Columbia gold explorer Vizsla Resources Corp. Luminex listed in early September after it was formed one month prior as a spin-out of Lumina Gold, a Vancouver-based gold and copper explorer that is also listed on the TSXV. Speaking after the strategic reorganisation of the business, Lumina’s president and CEO Marshall Koval said the move would help illuminate strategic regional concessions and partnerships and support the firm’s medium-

term goal of monetising its most advanced assets. Luminex has seen its share price range from C$0.51-1.05, last trading at $0.81 to capitalise at around $33 million. Vizsla started trading on September 21 after an $800,000 IPO and last traded at $0.15, valuing the company at over $1.6 million. Vizsla has started exploration it its core asset, the Kathleen Mountain copper-gold project located 50 km Northeast of the city of Princeton, British Columbia. The TSXV has seen an 80% increase in the number of new issuers so far this year, compared with 2017. The exchange said that cannabis, battery metals and blockchain technologies were emerging investor themes on the TSXV in the first half of the year.

NEWS

RNC MINERALS RECOVER 90KG GOLD SLAB FROM WA MINE RNC Minerals, the company made famous by its discovery of over 9,000 ounces of high grade gold from a single blast at its Beta Hunt mine in Western Australia in October, has recovered the first specimen. The TSX-listed miner said the slab was cut in the field, revealing impressive visible gold and quartz structures. It is estimated that the stone contains 1,000 ounces of gold, and will be divided up into a series of smaller pieces. RNC is now working on removing the second large specimen slab from the face of the Father’s Day Vein and will extract additional high grade coarse gold over the coming week. “We expect that these spectacular specimen slabs will be highly sought after by mineral

specimen collectors,” said RNC’s president and CEO Mark Selby. “With a minimum of 30-35,000 ounces expected from the Father’s Day Vein area, the company will be in a substantial net cash position to fully fund its upcoming activities.” The company displayed several of the gold specimens at the 2018 Mines and Money conference in London during the last week of November. This was the first time the slabs had left Australia.

Resource Global Network 15

CANADIAN MINING HALL OF FAME REVEALS FIVE NEW 2019 INDUCTEES The Canadian Mining Hall of Fame (CMHF) will welcome five new individuals in 2019 who have made outstanding contributions to Canada’s mining industry. Kate Carmack (joining the Klondike Discoverers), James Franklin, James Gill, Sandy Laird and Brian Meikle are the five who will be honoured for their achievements in the industry at the CMHF’s 31st Annual Dinner and Induction Ceremony on January 10th in Toronto. CMHF has recognised individual leadership in Canada’s mining sector for the past three decades, and said in a press release that the nation’s mining leaders set the standard for the global industry.

These individuals reflect the very best of mining excellence, determination and skill, the release added. In particular, the efforts of indigenous woman Kate Carmack are to be recognised after new information came out highlighting her importance in sparking the Klondike Gold Rush of 1896-99. “The Canadian Mining Hall of Fame is proud to recognise these five outstanding individuals for their lasting contributions to the mining industry, both here in Canada and across the globe,” said CMHF’s chair Jon Baird.

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“It was a pleasure working with the RGN team. The entire process - from the initial interview to the layout and finished piece - was seamless and professional. ” Orlee Wertheim Head of Business Development, Global Mining, Toronto Stock Exchange TSX Venture Exchange

MINING FINANCE | Toronto Stock Exchange

TORONTO STOCK EXCHANGE The undisputed home of global mining equity financing

Resource Global Network

MINING FINANCE | Toronto Stock Exchange

Canada is the undisputed home of global mining equity capital financing and the country’s two main equity exchanges - Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) provide the solid foundation from which this home has been fashioned over the last century and a half. The exchanges were built on the geological and financial strengths of Canada and it is for this reason that mining is still deep-rooted in the country’s economic development. “Canada is mining,” says Dean McPherson, head of business development, global mining for TSX and TSXV. “A large part of our economy is driven by the mining sector; so our markets are closely tied to the general economy and I think that level of importance gives us an advantage.” In 2017, 59% of all global mining financings were undertaken across Toronto’s two boards and over 53 billion mining shares were traded with a total value of C$206 billion. These are just two statistics that reinforce the dominance of TSX and TSXV as a listing and liquidity platform for the mining sector. In addition, McPherson estimates that TSX and TSXV towers over its nearest competitor

– the Australian Stock Exchange – with over 1,200 mining companies listed in Toronto, compared to around 600 miners on the Australian market. These impressive figures beg the question, why is Toronto such an attractive listing destination for so many companies from the mining sector? “For mining companies, access to capital is often the primary reason to consider going public,” explains McPherson. “That number one factor is certainly a recurring sell for us and a factor that is noted by our clients as to why they consider Toronto first. The other factor is the environment we have here; in terms of the broader ecosystem, knowledge base of investors and support through all stages of growth. “Both institutional and retail investors have so much experience in this space, there is a great appetite for risk and understanding of business drivers in different jurisdictions; as well as an appreciation of the growth cycle of a mining company and associated challenges. They are able to interpret these challenges and opportunities faced by mining companies in a broader and deeper way than you’ll find in other markets.”

A platform for juniors

The unique two-tiered ecosystem – the TSX main board and the TSXV junior board – has also provided a significant advantage in terms of attracting new issuers from the mining sector. In particular, TSXV is an appealing proposition for junior (and larger) mining firms as it poses lower listing costs and listing requirements compared to the main board; while also

Resource Global Network

MINING FINANCE | Toronto Stock Exchange

“Canada is mining. A large part of our economy is dependent and I think that gives us an advantage” - Dean McPherson, head

providing an incubatory environment for early stage exploration and prospecting companies with ambitions to one day progress to the main board. “We have over 650 companies that have

graduated from the junior to the main board. It’s a very active exchange in terms of growth with a very active graduation process too. Over 37% of companies on the S&P/TSX Capped Materials Index are graduates of the Venture Exchange.”

Resource Global Network

on mining, so our markets are closely tied to the general economy of global mining for Toronto Stock Exchange & TSX Venture Exchange

Canadaâ&#x20AC;&#x2122;s robust regulatory environment is another boon for miners with plans to list on TSX. Canada is one of the safest financial jurisdictions in the world with a banking system that has stood the test of time, notably surviving the 2008 global financial crisis. Canada has also been ranked in the

top two soundest banking systems in the world for nine consecutive years. Furthermore, the broader Canadian economy is stable and the regulatory system is not as litigious as what is found in the US nor

MINING FINANCE | Toronto Stock Exchange

Dean McPherson, head of global mining, TSX and TSXV as cumbersome as London for example, according to McPherson. On the TSX mining index, the regulatory environment is inherently associated with NI 43-101 – an all-encompassing mineral resource classification scheme which provides third-party verification of information relating to mineral properties. “I would say ensuring that we have a regulatory environment that protects investors helps to keep our market robust, because it gives our investors confidence in what is being reported publicly by mining companies on the exchange.” TSX’s close collaboration with the securities commissions across Canada is also vital in the preservation of transparency on

its markets. Both exchanges also have a robust compulsory screening process for management and boards of companies wishing to list in Toronto. “For international companies, we may enlist the services of a third-party security background check contractor. Ensuring that individuals who manage companies are upstanding to our personal information form is part of our qualifying process.”

Embracing sustainable mining Going back a decade or two ago, the global mining industry had developed a bad reputation amongst civil society and

ResourceGlobal GlobalNetwork Network 25 Resource the investor community; after several high-profile environmental mishaps and a general perceived lack of consideration for communities affected by mineral and metal extraction activities. However, the mining sector has worked hard to rectify this negative label attached to the industry over the last 20 years, recognising that it simply cannot proceed in the way it has done in the past. This has led to the rise of sustainability as an immutable basis for operating in the sector, and TSX has worked closely with mining companies to nurture this approach in recent years. The exchange produces guidelines for issuers that outline appropriate ways of engaging with various stakeholders in mining projects. “We provide services to assist our issuers after listing and these can include working with the investor relations groups of companies, coaching them on how to interact with the communities they operate in and how they impact those communities, trying to make that as positive as possible,” says McPherson. Overall, he believes the wider mining industry is taking a more committed approach to sustainability, and this is being led by the major global investors and lenders such as BlackRock, who will not invest in any company that does not have a form of CSR policy in place. The TSX listings team evaluates a company’s sustainability credentials from a financial and operational standpoint before recommending its suitability to the exchange.

“In my opinion, it’s only a matter of time before formal CSR requirements become standard for exchanges. Coming out of the last cycle, investors made the connection between social and/or environmental sustainability and sustainable cash flow. Mining companies are now doing so as well.”

A strong start to 2018

TSX has performed well so far in 2018 in terms of attracting new issuers, having been boosted by the mining sector’s delayed response to the upswing in commodity prices, which began at the start of 2016. “At the end of last year, we saw a return to robust markets in terms of financing and listings and that has continued into this year. In 2017, we had 69 mining listings added to our exchange and this year we are aiming to do even better. At the middle of this year [June-end], we had 36 new issuers added to our exchange,” McPherson reveals. He is encouraged by the number of new issuers the exchange attracted in the first half of the year and hopes TSX can replicate this performance in the second half of 2018 but is wary of making any forward statements. However, McPherson does point out that historically H2 results on the exchange are generally more robust than those in H1. The S&P/TSX Capped Materials Index has also performed at a consistent level for the majority of the year to date despite an increasingly volatile global context marked by an escalating trade dispute between the US and China. “We are not in a downcycle,” McPherson assures. “What we are seeing is volatility two

MINING FINANCE | Toronto Stock Exchange

years into an upcycle, which is not unusual. Looking forward, global economic growth is still forecasted above 3%. â&#x20AC;&#x153;I think the general focus should be on the fundamentals. Do the fundamentals support a sector in upswing? The answer is yes because there is still a supply/demand imbalance for commodities such as copper

and battery minerals like lithium, cobalt, nickel, graphite and vanadium. Coupled with the positive global economic forecasts there is basis for a positive outlook.â&#x20AC;?

Leading the charge

The battery metals industry has been driving the recovery of the mining sector over the last 18 months and this is reflected in the

Resource Global Network Nonetheless, the bulk of the mining index on TSX is comprised of precious and base metals companies, with gold representing around 50% of all metals on the market, according to McPherson. “Gold and base metals continue to dominate our market and I think this will continue. Innovation relating to the battery storage and general shift to electrification of key industries like automobiles means you will continue to see those metals doing well, along with base metals. “Gold is always the king of the room. It’s always been that hedge, especially in relation to the US dollar strength and volatility.” Despite having been the undisputed home of global mining financing for some time, TSX is not resting on its laurels, with McPherson identifying two ways that it can maintain and increase its position as the centre of global mining. “We are not just a Canadian exchange, but a global stock exchange that provides a strong, deep and stable market for global mining companies and global investors. Our goal is to become even more aggressive in our expansion around the world.

increased issuer activity from this space on TSX, which incidentally speaks to how the exchange represents a microcosm of the wider industry.

“There is a lot of innovation taking place in the industry and our plan is to harness these trends to continuously improve our offering to participants in our markets.”

a j

MINING | Social progress in mining-dependent countries: An ICMM report

Social progress in minin An ICMM report

Resource Global Network

ng-dependent countries: Analysis through the lens of the UN sustainable development goals

MINING | Social progress in mining-dependent countries: An ICMM report

In July 2018, International Council on Mining and Metals (ICMM) published a report titled Social Progress in MiningDependent Countries: Analysis through the lens of the SDGs. The purpose of the research was to explore the relationship between social progress and mining activity in resourcedependent countries (RDCs) in the 20 years up to 2015. The launch of the report took place in London and coincided with the UN’s high level political forum on sustainable development in New York, with social progress in RDCs measured using the UN’s 2015 Sustainable Development Goals (SDGs). RGN was in attendance at the launch and brings you a key summary of the report’s major findings.

A new face for responsible mining

ICMM is an international organisation that has been dedicated to improving the reputation of the global mining and metals sector as a safe, fair and sustainable industry since its formation in 2001, after a series of high-profile incidents over the 1990s necessitated the creation of a new face for responsible mining. Founding members include industry giants such as Rio Tinto, BHP, Anglo American,

Resource Global Network

MINING | Social progress in mining-dependent countries: An ICMM report

Newmont and other influential mining companies, who each signed up to a set of 10 principles which form the basis of ICMM’s sustainable development framework. Today, the organisation is comprised of 27 mining and metals companies from around the world. Members are brought together twice a year to discuss progress made towards the sustainable development framework and this collaboration is supported by further dialogue with a broad range of stakeholders across the mining industry, including governments, associations, local communities and indigenous peoples, civil society and more. In 2018, ICMM decided that one of its focuses

would be on social progress in resource dependent countries (RDCs) - defined by ICMM as when resources account for more than 20% of a nation’s export earnings, or when resource rents are more than 10% of GDP. While there has been plenty of research and debate into the question of whether an abundance of mineral resources hinders or helps economic progress in RDCs, ICMM felt that these studies often overlook social indicators of progress in these same countries. Therefore, ICMM’s Social Progress report aims to close this research gap by utilising key social development indicators that are strongly linked to the UN’s 17 SDGs. The

Resource Global Network

MINING | Social progress in mining-dependent countries: An ICMM report

ResourceGlobal GlobalNetwork Network 35 Resource SDGs were published in 2015 as a universal call to end poverty, protect the planet and ensure peace and prosperity for all by 2030.

The findings

In its wide-ranging study, ICMM identified 25 mining-dependent countries (MDCs) from a larger bank of 53 RDCs, and evaluated the social progress made by each during the 20 years up to 2015. While 53 countries were defined as resourcedependent for the two decades prior to 2015, a total of 81 countries met the criteria in 2015, and these include many of the worldâ&#x20AC;&#x2122;s poorest nations and some 30% of the global population. Therefore, understanding the relationship between mining activity and social progress in these countries is profoundly important. The degree of social progress made by each country was assessed against a host of accepted social progress metrics that are closely linked to 11 of the SDGs, such as SDG1: No poverty, SDG2: Zero hunger, SDG3: Good health and well-being, SDG7: Affordable and clean energy, and more. The key finding of the report was that life for people in countries that are economically dependent on mining improved in the two decades up to 2015 and improved faster, on average, than those of people in other countries in the same time period. Social progress in MDCs improved across a number of SDG areas, with the greatest progress made in providing people with access to infrastructure (SDG9), more affordable and clean energy (SDG7) and in promoting good health and well-being (SDG3). For each of these areas, over 90% of all metrics improved across all countries.

MINING | Social progress in mining-dependent countries: An ICMM report

Overall, MDCs improved on 78% of all social metrics, compared to 74% in hydrocarbondependent countries and 71% in non-RDCs. This outperformance is notable once again in the SDG7 category, which saw 92% of the metrics in the area improved, compared to an average improvement of 65% of the same metrics in non-RDCs. Speaking at the release, ICMM’s chief operating officer Aidan Davy also highlighted how 21 of the 25 MDCs are closing the gap with some of the world’s best performing nations in terms of social progress.

The report used a ‘distance to frontier’ approach, which measured the socioeconomic performance of each MDC relative to the most socially advanced country globally. This index reveals that in 1995 56% of all MDCs had overall socio-economic performances below the global average, but 84% of them have been able to close the gap over the next two decades.

Challenging perceptions

“ICMM’s experience is that, when we mine with principles, our industry can be a major development driver in some of the world’s poorest countries,” said Davy.

Resource Global Network ICMM’s Social Progress report looks beyond economic performance to provide a fresh understanding on the relationship between mining activity and social progress. Most MDCs in the study improved across a number of UN-defined social progress indicators and more than 80% of MDCs were found to be closing the socio-economic gap with the world’s top performers. These encouraging results underline the important contribution the mining sector can make towards shaping social progress. However, the report cautions against attributing causality between the prevalence of mining alone and observed social progress, instead pointing to other factors at play such as government policies, quality of governance and the effectiveness of social programmes.

“This report challenges the widely-held perception that an abundance of mineral resources impedes economic and social progress. Instead the evidence suggests that social progress in mining-dependent countries over the past 20 years has been stronger than in other countries.

“While further research is required, governments need not await the outcomes to sharpen their policies relating to socioeconomic well-being,” Davy concluded. “A useful starting point may be to focus on areas where social progress has so far been weak. “These observed gaps in social performance could help companies and other stakeholders identify priorities for engaging in productive partnerships with host governments, communities, and civil society.”

“This report will help sharpen the debate about the potential contribution of mining within the international development community.”

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MINING | Canadian Mining Hall of Fame

Resource Global Network

Canadian Mining Hall of Fame interviews Jon Baird of the Canadian Mining Hall of Fame

MINING | Canadian Mining Hall of Fame

Every year, the Canadian Mining Hall of Fame convenes to celebrate the brightest sparks of Canada’s world-leading mining sector. Since its creation in 1989, the hall of fame has inducted more than 170 industry leaders from Canada’s rich mining history stretching back to the 19th century, as well as many successful contemporary figures. These individuals are explorers, company builders and community builders. They are geologists, engineers and philanthropists. Above all, they are proud champions of Canadian mining. In its TSXlisted mining issue, RGN’s editor Jacob Ambrose Willson interviews the organisation’s current chair Jon Baird. Jacob Ambrose Willson: Jon, please outline the history of the Canadian Mining Hall of Fame and explain why this organisation was set up in 1989. Jon Baird: The Canadian Mining Hall of Fame (CMHF) was established in 1989 to recognise outstanding individual achievement and leadership by professionals working in Canada’s mineral industry. It was founded by The Northern Miner, The Mining Association of Canada, the Prospectors and Developers Association of Canada (PDAC) and the Canadian Institute of Mining, Metallurgy and Petroleum. Maurice Brown, the editor and

Resource Global Network

JON BAIRD After graduating from the University of Toronto as a mineral exploration geophysicist, Jon Baird has worked for 50 years in Canadaâ&#x20AC;&#x2122;s mining industry. His career has taken him to 70 countries where Canadians have interests in mineral exploration and extraction. After 28 years with a prominent firm offering geophysical services and instruments to the global market, he spent 22 years as the managing director of the national export trade association for Canadaâ&#x20AC;&#x2122;s mining supply companies. During that time Baird served on the board of PDAC, which was capped by a term as the chair of the board of that organisation. Currently Baird represents PDAC on the Canadian Mining Hall of Fame board and that board has appointed him as their chair.

MINING | Canadian Mining Hall of Fame publisher at the Northern Miner at the time, was the driving force in bringing these groups together to found the CMHF. JAW: How important has the mining industry been to the development of Canada throughout its history and how important is it to recognise the achievements of outstanding individuals? JB: The high standard of living enjoyed by Canadians today stems in large part from the development of the natural resources that endow the Canadian landscape. In Canada, we are blessed with an abundance of natural resources and are fortunate to be the home of many people with the skill, drive and dedication to convert these resources into the products we need for everyday life. The mining industry is important not only to Canada but to the entire world. It is a global industry, Canada is its leader and the CMHF celebrates those individuals who contributed extraordinarily to our countryâ&#x20AC;&#x2122;s success in mining. JAW: Tell me about your own personal background in the mining industry and how you eventually got involved in the Hall of Fame. JB: Having graduated from the University of Toronto as a mineral exploration geophysicist, my 50 years in the workforce have all been spent in the mining industry. My career has taken me to 70 countries where Canadians have interests in mineral exploration and extraction. After 28 years with a prominent firm offering geophysical services and instruments to the global market, I spent 22 years as the managing director of the national export trade

association for Canadaâ&#x20AC;&#x2122;s mining supply companies. During that time I served on the board of PDAC, which was capped by a term as the chair of the board of that organisation. Currently I represent PDAC on the CMHF board and that board has appointed me as their chair. JAW: How does the Hall of Fame participate in the Canadian mining industry every year and what is the role of the board of directors? JB: The Canadian Mining Hall of Fame kicks off the industryâ&#x20AC;&#x2122;s networking every year when it hosts its Annual Dinner and Induction Ceremony in January. The board of directors sets the direction for the organisation. It annually calls for nominations from across the Canadian mining industry, reviews nominations for induction and ultimately selects the individuals who are inducted at the ceremony each year. JAW: Who are the main benefactors of the organisation and how important are sponsorship and donations to the ongoing activity undertaken by the Hall of Fame? JB: The Canadian Mining Hall of Fame is a not-for-profit corporation proud to receive support from a number of companies operating in different sectors of the industry. This financial support as well as the proceeds from the Annual Dinner and Induction Ceremony provide the resources to maintain its operations. JAW: What is the selection criteria for an individual to be admitted onto the Hall of Fame and how does the nomination process work?

Resource Global Network

MINING | Canadian Mining Hall of Fame JB: Anyone can nominate an individual for induction through the Canadian Mining Hall of Fame’s member and associate member organisations. These industry groups then select the top candidates of that year and put them forward to the CMHF Board of Directors who determine which of the nominees will be inducted. This is determined based on the CMHF’s Categories of Achievement, which are available on the CMHF website at: www. mininghalloffame.ca. Each candidate for nomination to the Canadian Mining Hall of Fame should have significant accomplishments throughout their career that fall within one or more of the Categories of Achievement: Exploration, building the corporation, technical contribution, supporting contribution and mining in society.

Ross Beaty, Robert Gannicott, Terrance MacGibbon and Edward Thompson. Ross J. Beaty Ross Beaty, a geologist with a passion for exploration and a discerning eye for projects with economic potential, is one of Canada’s most successful mining entrepreneurs. Thirteen of his companies, including Equinox Resources and Pan American Silver, have created an estimated $6 billion of shareholder value since 1994. He built his flagship, Pan American Silver, into one of the world’s largest silver producers with seven mines in Latin America. Beaty is also one of the most influential people in the global mining industry for his pragmatic support of environmental causes, ability to build bridges with civil society, and remarkable legacy of philanthropy. Beaty was recently appointed to The Order of Canada.

JAW: Take me through some of the most recent inductees into the Hall of Fame over Robert A. Gannicott Bob Gannicott, a pioneer of Arctic mineral the last year. exploration and a visionary entrepreneur who helped unlock the downstream value JB: The Canadian Mining Hall of Fame of Canada’s fledgling diamond industry, hosted its 30th Annual Dinner and Induction played a pivotal role in the discovery and Ceremony in January 2018. Four outstanding development of the Diavik mine in the individuals were inducted that evening:

ResourceGlobal GlobalNetwork Network 47 Resource

MINING | Canadian Mining Hall of Fame

Northwest Territories at the helm of Aber Resources, a 40% owner. Aber later acquired a diamond retailer and was renamed Harry Winston Diamond Corporation. After the sale of the retail business, the company was renamed Dominion Diamond Corporation and acquired an 80% interest in the Ekati mine, which combined with 40% of Diavik, became Canada’s largest independent diamond producer. As a strong advocate for the people and communities of the far North, Gannicott created a foundation to help the Indigenous people of the NWT. He passed away in 2016. A. Terrance MacGibbon Terry MacGibbon, a geologist turned company builder and mine developer, is known within the industry as a financially astute entrepreneur, innovator and role model. He applied the expertise and experience gained over a 30-year career with nickel giant Inco

– including as an early advocate of the Voisey’s Bay discovery in Labrador – to build four substantial mining companies: FNX Mining, Torex Gold Resources, TMAC Resources and INV Metals. MacGibbon applied his “three Ps of success” — perseverance, patience and passion — to raise billions of dollars of capital, build respectful relationships with stakeholders, and generate employment and economic benefits for local, regional and national economies. Edward Thompson Ed Thompson has contributed to the progress and prestige of the Canadian mining industry as an explorer, mine developer, company builder, and dedicated supporter of industry causes and associations. He contributed to the growth of Teck Resources and Lacana

Resource Global Network Mining (now part of Barrick Gold), and served on the boards of 50 junior companies. In recent years, he championed discoveries in Ontario’s “Ring of Fire” and developed an iron ore mine in Quebec that was acquired by Cliffs Canada for $4.9 billion in 2011. Thompson played a leadership role in the expansion of PDAC into a globally-respected institution, and was a founding member of the Canadian Mining Hall of Fame. JAW: The board is meeting this month to select new inductees for the 2018 honours list – How many nominations have you received this year and how difficult is it to pick a select few inductees from the nominations? JB: The principal member associations of the CMHF receive several nominations from the public each year. Each of these four organisations can each advance up to three nominations to the CMHF. In addition, associate member associations may advance a nomination. Thus, each year, the Board of the CMHF has a difficult decision to make in deciding on three to five individuals out of, say 12, to be inducted that year. The individuals who will be inducted into the Canadian Mining Hall of Fame in 2019 were announced on October 11th. JAW: Who will be in attendance at the 2019 Dinner and Induction Ceremony and how will the new inductees to the Hall of Fame be celebrated?

“The mining industry is important not only to Canada but to the entire world. It is a global industry, Canada is its leader and the CMHF celebrates those individuals who contributed extraordinarily to our country’s success in mining” Jon Baird, chair of the board of directors, Canadian Mining Hall of Fame JB: The Annual Dinner and Induction Ceremony is a premier event for the Canadian mining industry and, being in January each year, kicks off the year’s networking. Families and friends of living inductees are always present along with leaders from industry companies and associations. The capacity of the event is 1,200 and this number of tickets are sold shortly after they go on sale. JAW: Finally, what does the future hold for the Canadian Mining Hall of Fame? Are there any new developments or initiatives in the pipeline? JB: The Canadian Mining Hall of Fame will continue to recognise individual achievement and leadership each year at its Annual Dinner and Induction Ceremony. We are proud of our brand-new website at www. mininghalloffame.ca and invite all who are interested to visit it to learn about the mission, vision, values and mandate of the CMHF, as well as how to purchase tickets for the annual Induction Ceremony.

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COLUMNS | Jeff Geipel

SYSTEMS CHANGE IDEA

A threeby Jeff Geipel, founder and managing direct

Resource Global Network

AS TO â&#x20AC;&#x153;DO GOODâ&#x20AC;? AS A MINE

-point plan for mining companies to enhance their social licence to operate tor of Mining Shared Value (initiative of Engineers Without Borders Canada)

COLUMNS||Ian JeffThomson Geipel 52 COLUMNS

At the recent IMARC Convention in Melbourne, ICMM head Tom Butler stated: “Mining companies are now expected to do good, not just well.” He explained that while at one point companies could simply pay taxes and not commit serious harm, and gain their social licence to operate – those days are over. While arguments like this have long been made, it is now safe to say they are so ubiquitous that they are the new normal for the global mining industry. Some of this is due the threat of blocked projects and expansions, as well as increasing demands from investors to demonstrate responsible behaviour.

South Africa’s new Mining Charter, recently

Host country governments are also

done. Just ask the very organisations that are

increasingly monitoring mining companies

set up to do it.

gazetted in August, is an example in this vein, as it instituted a requirement that mining companies purchase 70% of all mining goods from Black Economic Empowerment (BEE) entities, and 80% of all services. Nearby Zambia announced in it’s 2019 budget speech that it too will institute some kind of local content regulations on its mining sector. This is not only a developing country phenomenon. In countries like Canada and Australia, indigenous communities are increasing their demands of what benefits mining should bring them, and formalising increasingly ambitious community development agreements (CDAs) that codify these aims. Recently the Qikiqtani Inuit Association in Nunavut doubled their employment targets for Inuit employment in their new Impact Benefit Agreement with Baffinland Iron Mines, with provisions for training as well. However, doing good is easier said than

through regulation, such as for local content (local procurement, direct employment and

Our initiative that focuses on increasing

other aspects of increased participation by a

local procurement, Mining Shared Value, is

host country in the mining value chain).

a non-profit initiative of Engineers Without Borders Canada. As a charitable international

As countries update mining legislation and

development organisation, we are part of a

regulations, in the vast majority of cases in

wider sector that has had a lot more failed

recent years, local content requirements have programmes than it likes to admit, and we been added or increased.

have seen many of these failures first-hand.

ResourceGlobal GlobalNetwork Network 53 Resource So, if international development organisations – whose very core competency is supposed to be doing good - often fail in their goals to “do good”, what chance do mining companies have? With this in mind, we lay out some tips that we think mining companies should consider in their efforts to do good. Above all, they represent thinking systemically about how to do good, rather than engaging in ad-hoc efforts that do not properly take into account and empower the host country system a mine operates in.

JEFF GEIPEL

Take stock of existing initiatives and do not re-create the wheel

Jeff Geipel is the founder and managing director for the Mining Shared Value initiative at Engineers Without Borders Canada.

Whether it be for the local procurement issue

This initiative works to improve the development impacts of mineral extraction in host countries through increasing local procurement by the global mining industry. Through this work Jeff is also the community moderator for the World Bank’s Extractives-led Local Economic Diversification Community of Practice (ELLED CoP).

where we work, or others, it is always striking how little mining companies tend to search for already existing initiatives as a first step. International development NGOs do this as well – often. It is far too common to see massive aid organisations and the bilateral and multilateral donors who fund them, dream up huge projects, allot millions of dollars in aid – without even taking stock of existing programmes in a recipient country. Thinking systemically means harnessing and empowering existing initiatives, resources, and talent – and focusing on the relationship between these components of a given mining host country’s economic and political systems.

Before Engineers Without Borders, Jeff was the founder and first executive director of Fair Trade Vancouver, which became a model for municipal-based fair trade organisations across Canada. Originally from Vancouver, Jeff holds a master’s degree in international development from the London School of Economics in the UK.

COLUMNS | Jeff Geipel

In most host countries, mining companies

be tapped into to help address particular â&#x20AC;&#x153;do

should start from the premise that there are

goodâ&#x20AC;? goals of a mining company.

already numerous actors trying to address whatever development problems they are

In most cases, mining companies will be far

to solve. Mining companies should also start

more successful in doing good if they focus

from the premise that these actors often

on properly linking their host communities

have poor communications capacity, and

with these existing programmes, than

it may take a fair deal of searching to find

starting entirely new initiatives.

them. On the local procurement issue for example The average developing country has literally

â&#x20AC;&#x201C; helping already existing NGO programmes

tens of millions of existing aid funding, social

supporting small businesses to better

enterprises, and impact investing that can

understand and target the mining sector, is

ResourceGlobal GlobalNetwork Network 55 Resource It is of course true that there may not always be an ideal partner of course in a given host jurisdiction â&#x20AC;&#x201C; but the worst thing mining companies can do is rush into efforts to do good without understanding the lay of the land. Days spent mapping out and finding potential partners and resources to tap in, can save hundreds of wasted days down the road. Measure twice, cut once, as they say.

Hold a workshop and a reception around your given topic Linked to the above, mining companies should recognise they have a massive convening power to crowd in potential partners, inspire new collaboration, and to facilitate the sharing of best practices. Bringing together actors can unleash resources and create new feedback loops between actors that can help lead to development. However, mining companies often a much more efficient use of scarce

tend to spend surprisingly minimal time in

resources than trying to start a supplier

the same rooms with their peers.

development programme from scratch. A mining company or mining industry Likewise, for efforts to increase direct

organisation holding a workshop around a

employment of host country citizens,

given topic though, can bring together a wide

between universities, vocational schools,

variety of talent, perspectives â&#x20AC;&#x201C; and money.

and existing aid programmes focused on

They can also find alignment with other

skills development, a given mining company

miners and pool resources.

should do its best to harness these resources long before it thinks about devoting major

As a practical example, in June we took part

resources of its own.

in a Private Enterprise Programme (PEP) Zambia workshop to bring together key

COLUMNS | Jeff Geipel

players focused on increasing mining local

This workshop has helped to accelerate the

procurement in Zambia. It was the first

efforts of the PEP Zambia and the mining

time the procurement staff and supplier

industry to align and execute on local

development representatives from such a

procurement goals, and another one is

large group of different companies had all

planned in December.

been in the same room together. Events like this also helps to prevent In this meeting we saw representatives

duplication â&#x20AC;&#x201C; an ubiquitous problem likely

of different companies eagerly jotting

as common in the mining sector as in the

down notes on learnings from others, and

international development one.

widespread recognition of similar goals. In addition, in the room were also several

Whether it be a supplier portal to register

finance institutions, capable of providing the

current and potential suppliers of the mining

investment in SMEs that is often so critical to

sector, or a skills training programme in

make local procurement a reality.

cooperation with a host country vocational school, pooling the time and resources of

Resource Global Network programme registers and pre-qualifies suppliers for a large number of sectors including mining (Newmont), petroleum (Tullow), and banking (Ecobank). As such, for any given attempt to do good, mapping out the relevant stakeholders and then bringing them together â&#x20AC;&#x201C; often for the first time â&#x20AC;&#x201C; is a very cost-effective way to make things happen. Do not forget to hold a reception after either. Workshops may share best practice and make introductions, but it is over the receptions that deals really start to take shape.

Communicate often, and then communicate some more It cannot be stressed enough how much communication matters in systems change. several mine sites can make a lot more sense

The creation and nurturing of feedback loops

than several actors making a multitude of

between different parts of a given system,

overlapping initiatives

help to create reinforcing processes that propel a given cause forward.

Pre-qualification of suppliers is a practical example of this. The more the process of

A tangible example is drawn from a Donella

registering suppliers for their adherence and

Meadows essay on systems change. In it,

certification for particular standards can be

she describes how in 1986, the United States

pooled into one place, the less time each

government required factories releasing

mine site has to spend going through the

hazardous air pollutants to report the figures

time-consuming process of verifying what

for those emissions publicly each year.

standards each business is adhering to. By 1990, emissions had fallen 40% despite This also means utilising the resources of

there being no actual punishment for levels

non-mining actors. For example in Ghana,

considered too high. Simply getting the

Invest in Africaâ&#x20AC;&#x2122;s African Partner Pool (APP)

information into the public and companies tracking it, inspired huge behavioural change.

COLUMNS | Jeff Geipel

We see a very similar dynamic with health

One of the key goals with the Mining Local

and safety in the mining industry, where

Procurement Reporting Mechanism (LPRM)

companies clearly see the value in putting

that we created in partnership in the German

these statistics front and centre internally

aid organisation GIZ, is for mine sites to

and externally.

create information that can help empower host country NGOs that support suppliers.

We know that information sharing helps to

Reporting is not so much a burden if it results

systemically improve outcomes. However,

in increased or better managed support for a

mining companies consistently complain

mine siteâ&#x20AC;&#x2122;s suppliers.

about the burden of sustainability reporting and lament the fact they believe no one reads Reporting should also be â&#x20AC;&#x153;mainstreamedâ&#x20AC;? as their annually produced documents.

much as possible. Yes, annual sustainability report PDFs in hard-to-find parent company

But if information actually gets to potential

website sections will obviously not be read

partners, it can help to bring in new

very often. However, if mine site community

resources that can create business value for

and government relations management

those same companies.

devote resources to set up systems that ensure the reporting gets to potential

Resource Global Network partners, then the return on investment in

a climate where as Milton Friedman said the

reporting begins to become clearer.

social responsibility is to maximise profits – there is really not much sense in dwelling

For the gold standard when it comes to

on this. Not only is this new era here to stay,

reporting on local procurement, mining

companies who do not get ahead of things

companies should research the Oyu Tolgoi

are only risking governments overreaching in

mine in Mongolia. This Rio Tinto-managed

their attempts to force the issue.

site has set the high-water mark for information sharing on local procurement

In addition, we know that with few

policies, programmes and results, and was a

exceptions, doing good is good for business.

major inspiration for what information is now

However, just like aid organisations, good

request as part of the Mining LPRM.

intentions are not enough to ensure actual good is created by mining companies seeking

Through a combination of detailed website

to create benefits for host countries.

content, frequent communications via social media and other channels, and

The “do-good” mine of the future needs to

in-person supplier events, Oyu Tolgoi is

move from ad-hoc to systemic in their efforts.

empowering their suppliers, and helping

They need to avoid stumbling in to bad

other stakeholders to understand how they

programmes that simply duplicate efforts

can take part in efforts to target supplying

of other private sector companies, and the

opportunities.

multitude of organisations and initiatives that exist in virtually all jurisdictions.

Communication like this helps to magnify the impacts of other actors of a given host

Through a better understanding of existing

country system that have similar goals.

host country initiatives, bringing these actors

Sharing information should not be portrayed

together, and ensuring all these people

as a “reporting burden” internally at mining

are fully aware of a mining company’s own

companies. Through a systems change lens,

contributions to the system, mine sites can

it can be a massive lever for value creation.

only strengthen their efforts to do good – and

Time to get on with it and be systemic

also prove the business value created.

While some in the mining industry may lament that they are no longer operating in

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MINING | Teranga Gold

TERANGA GOLD The model for sustainable development in West Africaâ&#x20AC;&#x2122;s gold industry

Resource Global Network

MINING | Teranga Gold

At the start of August, West Africa-focused Teranga Gold reported record Q2 and H1 gold production from its Sabodala Gold Mine in Senegal. Approximately 65,000 ounces (oz) of gold were produced at the site between April and June, building on similar output from the previous quarter to total 129,000 oz of gold produced in the first six months of the year. With a second mine – the Wahgnion Project in Burkina Faso – set to achieve first pour by the end of 2019 and the Golden Hill asset not too far behind, TSX-listed Teranga is within touching distance of evolving into a mid-tier West African gold producer. For president and CEO Richard Young, the key feature of Teranga’s impressive recent quarterly performances at Sabodala is that the company is consistently outperforming its reserve model. “We are getting more high grade ounces out of the mine than anticipated compared to our technical report and that is leading to better results,” he says. “This will be the third year that we have outperformed our original guidance.” The company’s management team is also highly focused on the development of

Resource Global Network

MINING | Teranga Gold the Wahgnion Project in Burkina Faso and

The company expects to release an updated

remains on track for first gold pour by the

mineral reserve estimate and related NI 43-

end of 2019. The company acquired the asset

101 technical report for Wahgnion during Q3.

through its all-share purchase of Gryphon Minerals in 2016.

A multi-asset company “Our entire senior management group come

In June, Teranga announced an updated

from large companies, so we are used to

mineral resource estimate for Wahgnion of

having to balance both operational and

50.5 million tonnes (Mt) at a grade of 1.51 g/t

development stage projects concurrently

for 2.4 million contained ounces of gold – a

- like we are doing with Sabodala and

33% increase on the resource estimated in

Wahgnion. We have a team with a lot of

the feasibility study released in September

experience in this area.

last year. ”Teranga’s most advanced exploration stage asset – Golden Hill in Burkina Faso – is also moving forward at a rapid pace after approximately two years of drilling and encouraging results.

Resource Global Network “We started drilling in Q1 2017 and are

Meanwhile, the company’s target for 2018 is

targeting an initial resource 24 months

to meet its revised gold production guidance

later. The plan is to prepare a preliminary

of at least 230,000 oz, and Young is confident

economic assessment (PEA) by the end of

that this is well within the company’s grasp.

this year or early next,” Young explains. “If we continue at the same rate, this will be “If successful, the PEA will allow us to draw

the third year in a row we have outperformed

down on the $25 million financing facility

our guidance, and if we produce more than

that we put in place to allow us to move

233,000 oz, it will mark the third consecutive

Golden Hill through feasibility study.”

year of record production.

Golden Hill is an exciting prospect for

“Hopefully, shareholders and potential

Teranga given that if advanced into a

investors can see that we are a company that

producing mine, it would propel Teranga into

is delivering.”

that coveted mid-tier gold producer status – a key long-term aim of the company.

MINING | Teranga Gold

Sharing the benefits

This year, the company received further

Some mining firms would judge a year of

affirmation of its sustainable approach from

record gold output as a success in its own

Senegal’s Minister of Mines on a recent visit

right, but for Teranga success is not possible

to Sabodala.

without mining responsibly and sharing the benefits of responsible mining with its

“Senegal’s new Minister of Mines came on

stakeholders.

board at the beginning of the year and her first task was to visit Sabodala for a mine

The company’s approach to sustainable

tour and talk to the community,” says Young.

mining was honoured last year at the annual

“When I first met her, she said to me ‘you are

PDAC Convention in Toronto, when it was

the model. We are thrilled with the way you

awarded the 2017 Environmental & Social

operate Sabodala. This is the model for all

Responsibility Award for its work in the

the mining companies in our country’.”

communities surrounding the Sabodala project.

ResourceGlobal GlobalNetwork Network 69 Resource This high praise from the Senegalese

incident in Senegal. We have a great

government is indicative of Teranga’s original

relationship with our workforce and with

stance on the eve of its initial public offering

our local, regional, national stakeholders

eight years ago. Chairman Alan Hill was

and these relationships are paying huge

adamant that in order to grow the business

dividends,” believes Young. One of the

in West Africa, Teranga would have to lead with CSR and gain the trust of governments and communities in the region. “If you look at that eight-year period since our IPO, we’ve been able to operate without

MINING | Teranga Gold first things that Teranga did after taking

driven from the ground up. The communities

over the Sabodala mine was to hold an

determine the projects and our role is simply

18-month roundtable with its local, regional

to assist with the execution.”

and national stakeholders to identify their priorities. They fell into three baskets:

In youth and education, Teranga has

Agriculture and food security, youth and

supported a number of schools throughout

training and sustainable economic activities.

the district by offering a vital bursary for students to attend high schools, which are

“Our team continues to focus on those

often too expensive to attend without a form

three baskets. We spend over $1 million a

of grant.

year on local CSR activities and these are all

“This will be the third year in a row we have outperformed our guidance, and if we produce more than 233,000 oz, it will mark the third consecutive year of record production” Richard Young, president and CEO

Resource Global Network Meanwhile, the companyâ&#x20AC;&#x2122;s 12 market gardens have provided increased food security and economic assurance to nearly 1,000 women in the Sabodala region. Now that this operation has matured, Teranga is working with local entrepreneurs to find additional ways to create sustainable business activities for members of the local communities.

Building a reputation

Terangaâ&#x20AC;&#x2122;s sustainability initiatives throughout its time in Senegal also had a direct impact on the companyâ&#x20AC;&#x2122;s ability to make acquisitions and move into new jurisdictions. Young explains how, with respect to its acquisition of Gryphon Minerals, the government of Burkina Faso reached out to the Canadian and Senegalese governments to ascertain if Teranga was a responsible steward of the land it would be mining. Both

MINING | Teranga Gold governments had very positive things to say about Teranga because of the strong CSR work it had already done in Senegal. The company is currently focused on mitigating the impact that the Wahgnion development will have on the local communities and is negotiating the delicate matter of relocating up to 500 households over a period of five years. “It’s about working with the local communities to identify the types of home they want to live in and where they want to move. Being an agricultural region, we will provide replacement land and are working with farmers on methods that will allow them to increase their crop yield.” On the employment side, Teranga is also working with local government authorities who identify candidates with the correct skills to match available roles within the company. “We have about 300 people hired in Burkina Faso and that number is going to grow to about 1,000 as we move through construction,” reveals Young. The next order of business for Teranga’s CSR team is to commence various training programmes at Wahgnion for local staff, ahead of long-term employment in the company, while continuing to prioritise actions based on feedback from the communities. Teranga’s president and CEO believes that the world is looking more closely at sustainable development and the mining industry is elevating living standards in many developing countries.

“Mining projects hire local people well-paying, skilled jobs and teach them on the ground skills, which they can transport. Creating an educated workforce helps countries evolve over time.” With responsible mining at the core of its philosophy, Teranga is helping to drive sustainable socio-economic development across West Africa as it advances to mid-tier status in the gold production industry.

Resource Global Network

TSX:TGZ

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Building a Multi-Asset Mid-Tier West African Gold Producer

TSX: TGZ OTCQX: TGCDF

MINING | McEwen Mining

MCEWEN Asset rich leverage to gold, silver and copper

Resource Global Network

MINING

MINING | McEwen Mining

Rob McEwen is one of Canada’s most successful mine developers after taking Goldcorp’s market capitalisation from US$50 million to over $8 billion during his time at the helm of the company, which is now a giant in the gold mining space. Not resting on his laurels, McEwen sought about replicating the success he brought to Goldcorp and established a new company that would focus on multi-asset gold and silver production across the Americas. McEwen Mining’s principal goal is to qualify for inclusion in the S&P 500 – the US stock market index with a combined market capitalisation of $23.7 trillion. The US market is the largest in the world for gold shares, but only one gold stock currently qualifies for the S&P 500, and that is Newmont Mining. However, Newmont represents only a tiny fraction of the index’s total value – 7/100ths of 1% to be precise. “When the market decides to change its sentiment and embraces gold, there will be a wholesale movement into the indices and into the stocks that are in the largest markets,” says McEwen. “Therefore, McEwen aims to capitalise on the current under-valuation of the gold market to continue building its gold resources and production and drive to our goal of qualifying for the S&P 500.

Resource Global Network

MINING | McEwen Mining

“Since I am the largest shareholder in McEwen, we will not follow the path that most other mining companies have taken of diluting their shareholders to gain size. “The cost of my investment in McEwen is $161 million, my salary is $1 a year and I have asked for no bonus or options for doing deals that make us bigger. I will only make money the same way my fellow share owners will, that is with a higher share price.”

A multi-jurisdictional gold portfolio

McEwen has established a gold-based portfolio that stretches across four locations in the Americas, with mines producing in Canada, Mexico and Argentina and one under construction in the US, while exploration campaigns are afoot in all jurisdictions.

Resource Global Network

“When I was building Goldcorp we were only in Canada and the US, which meant we operated in one language and two sets of laws. Today we operate in two languages and four different legal systems,” explains McEwen. “Each jurisdiction has its own unique culture and government policies and objectives. We have to spend more time focusing on regional issues which at times can be more challenging.” McEwen attributes the company’s successful overseeing of the multi-jurisdictional portfolio to the structure of the management teams, which are divided into regional units along with key areas of business such as projects, exploration and innovation.

MINING | McEwen Mining

“In Nevada, we have benefited from hiring a number of senior personnel who are very experienced exploring and operating at some of the largest mines in the state. “We also bought in Timmins, Canada last October and made some changes in management, adding people who have very specific expertise in this part of the world. They’ve been successful at cutting costs there.”

The Black Fox Complex

McEwen marked its presence in the worldclass Timmins gold district in Ontario with the acquisition of the Black Fox Complex last year. The asset is comprised of a fully operational underground gold mine, the Black Fox-Stock mill and the Froome and Grey Fox deposits.

“I get paid $1 a year with no bonus fo I don’t have company options eithe build the s Rob McEwen, chief owner an The Black Fox deal was preceded by McEwen’s friendly acquisition of Ontariobased gold explorer Lexam VG Gold in February 2017. Lexam’s assets included a number of former producing properties in the Timmins district, but didn’t come with a mill to process ore. “Right away the Black Fox opportunity became obvious. It was in economic trucking distance and it had a mill with excess capacity. Secondly, Timmins is one

ResourceGlobal GlobalNetwork Network 83 Resource

or doing deals that make us bigger and er. My incentive is to see how we can share price” nd chairman, McEwen Mining

of the great gold districts in the world, and the Black Fox properties appeared to be underexplored. “Our purchase price for Black Fox was just $35 million. The price was attractive given the previous owner’s purchase price and investment in the property totalled $560 million. I should also highlight that the property came with $180 million in tax pools that will shelter future profits.”

Although the complex came with over 1.2 million ounces (Moz) of gold in the indicated resource category, the previous owner appeared to lack a good understanding of the mine geology and its potential, according to McEwen. The asset also came with a short mine life and annual production of 50,000 oz, but McEwen aims to extend Black Fox’s life with an aggressive exploration programme. “We believe there is excellent potential for the mineralisation to go much deeper because the average depth of the mines in the region is 1.5 km while the deepest working level at Black Fox is 800 metres. “Recently, we encountered some very encouraging grades 200 metres below our deepest workings. At a depth of 1,050 metres

MINING | McEwen Mining

our deepest drill assay returned 55 grams over 1.2 metres. This result supports our optimism that the Black Fox mine may have similar roots to other mines in the area,” reveals McEwen.

Gold Bar

McEwen’s next mining operation will be the Gold Bar project, located along the famous Cortez trend in the prolific gold producing state of Nevada in the US. The company completed a feasibility study for the project in 2015, which was based on a measured and indicated resource of 611,000 oz. However, that was three years ago and today, the M&I resource number has increased by 31% to 822,000 oz through the purchase of Gold Bar South, further exploration success and model optimisation. “By year end, we will be releasing a new life

of mine plan that should have the mine life extended by eight to nine years,” reveals McEwen. Construction of the Gold Bar project is expected to be completed by the end of the year, with first commercial gold production scheduled for the first quarter of 2019. McEwen aims to produce 55,000 oz of gold during its first year of operation and average 60,000 oz per year over the life of the mine with an all-in-sustaining cost of $850 per oz. The company is focusing on innovative ore processing techniques in Nevada and is trialling the use of sensors in its heap leach pad to measure moisture levels and compaction. The technology has been previously used in Mexico where it was proven to optimise the performance of the operation.

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“We’ve also partnered with a company that is creating a digital twin of our operations to further optimise what we are doing there. You can very quickly run various scenarios in order to decide how to best improve the operation,” says McEwen.

The unique aspect of the Fenix project design is the use of an in-pit tailings storage facility. “From an environmental and capital perspective, this is a very elegant solution much less environmental disturbance, less water usage and less capital,” McEwen claims.

The Fenix project

Perhaps one of McEwen’s most exciting assets is the massive Los Azules copper project in Argentina. A 2017 preliminary economic assessment (PEA) outlined a great deal of compelling financials and a globally significant production of 186,000 tonnes of copper per year.

In Mexico, McEwen’s already producing El Gallo mine is on track to deliver its 2018 production guidance of 32,000 oz of gold equivalent, with heap leaching of residual gold continuing into 2020. The Fenix project will source ore from four satellite deposits and rather than developing a new standalone mine site to process this ore, it will utilise the existing El Gallo site with certain capital additions that are projected to extend mining operations by 12 years.

“If you take the projected annual copper production rate and put it on a gold equivalent basis, you’d be looking at annual production of 1,000,000 ounces of gold at a cash cost of around $569 an ounce. In addition, the total indicated and inferred resource would be roughly equivalent to 74.15 Moz of gold.

MINING | McEwen Mining â&#x20AC;&#x153;Los Azules has a projected 36 years life and using $3 per lb copper the payback is 3.6 years. If it were in production today, it would be the 26th largest copper mine in the world and production costs per lb in the lowest cost quartile of the industry.â&#x20AC;? While working on negotiating a few access and power supply challenges, the company is also pushing to get a permit completed in order to begin developing the project in the first quarter of next year.

Glittering prospects for gold

Recently inducted into the Canadian Mining Hall of Fame for his achievements in the gold industry over the last four decades, Rob McEwen believes now is an excellent time to be investing in the gold market, and his company provides asset rich leverage. Judging by the depth of the most recent bear market in the gold industry and the bottomto-top gains made in the most recent bull markets, he postulates that when the next bull market emerges there is a strong chance of making a return up to three times the investment.

Resource Global Network “I think the gold market offers an unusually attractive risk-reward situation right now, where the upside is significant, and the downside is low. On top of that, gold stocks are very under-owned, as evidenced by Newmont’s market cap being a tiny fraction of the entire S&P 500.” For McEwen to qualify for inclusion in the S&P 500 and gain a strategic advantage of the industry ahead of an emerging bull market for gold, the company must continue to deliver outstanding exploration results across its Americas portfolio while also seeking accretive M&A deals.

TSX:MUX NYSE:MUX

“I think the gold market offers an unusually attractive risk-reward situation right now, where the upside is significant, and the downside is low” Rob McEwen, chief owner and chairman, McEwen Mining

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MINING | OceanaGold

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OCEANAGOLD Operating high performing gold mines around the world

MINING | OceanaGold

OceanaGold started life almost 30 years ago on the South Island of New Zealand with the Macraes Goldfield, which remains the largest gold producing operation in the country. The company was publicly floated in 2004 and has opened three further mines across the world since then, with the most recent being the Haile Gold Mine in the US. In between its oldest and newest mines, OceanaGold built the Didipio Gold and Copper Mine in Philippines and purchased the Waihi Gold Mine on the North Island of New Zealand from Newmont Mining. This consistent asset growth has allowed OceanaGold to develop into a mid-tier gold company producing in the order of 500550,000 ounces per year – a level that the company hopes to maintain in the medium term. Around 10 years ago, the company formed a vision to build a business in Australasia, Asia-Pacific (APAC) and the Americas. Thus far, OceanaGold’s president and CEO Mick Wilkes believes this strategy has been successfully executed. “We are now an international company and want to cement our position by adding another couple of operations to our portfolio to make ourselves more relevant in the industry,” he says.

Resource Global Network “We want to provide a more robust business, producing gold at relatively low costs and high margins and continue to provide a strong return on investor capital. “But for us it’s not just acquiring or discovering the asset, it’s also about the systems and processes that we employ, the management structure and the culture of the company.” OceanaGold runs a decentralised business with resources and accountability placed on the shoulders of general managers onsite across its four operations. In doing so Wilkes feels that the company has been able to conquer issues created by time zones and geographical distance. “In our business you have to be prepared to go where the gold is, and that means having the ability to operate in different jurisdictions and time zones. That’s our business model and so far it’s been very successful.”

Social performance

Sustainable development has been another key focus area for OceanaGold in recent years, with concerted efforts made to build the capability of the business around social performance and stakeholder relations. Last year, the company appointed Sharon Flynn to the executive team to take charge of social performance and sustainability. Flynn has over 20 years of experience designing and implementing sustainability strategies and has worked for the likes of Rio Tinto and Conservation International. “With her expertise in how to structure this part of the business, we have made some

MINING | OceanaGold great strides in institutionalising social performance, which has proven to be very beneficial for us.â&#x20AC;?

education, health, business development, infrastructure and environmental management and conservation.

In particular, the company has developed a range of social performance programmes in Philippines, where it is mandatory for mining companies to undertake such activities in order to continue operating.

As a result, the company has built significant expertise within this area of business and been able to apply the art of social performance in Philippines to its other operations around the world, including New Zealand and the US.

OceanaGold has partnered with the local government on the island of Luzon to support the needs of the local community and empower them through its six social investment pillars: Employment and training,

Resource Global Network 2017 was a record-breaking year for OceanaGold, with the company achieving record gold production of 574,606 ounces across all four operations, along with record cash flow and net profit of US$172 million, which allowed the company to declare its second dividend of the year. These achievements are made more remarkable by the fact that there were some

commissioning hiccups at the Haile Gold Mine in the US. “Despite this challenge we had record production and profitability. This demonstrates both the quality of our assets and the robustness of the business in having a diversified set of assets in different jurisdictions. “The gold industry is hard enough and there are a lot of factors out of your control. To be successful and sustainably profitable, you’ve got to have multiple assets. That is well recognised these days and we demonstrated that in spades last year,” says Wilkes.

MINING | OceanaGold

Building on its strong performance last year, OceanaGold set a target to increase the reserves around all four of its operations, particularly in New Zealand and at Haile in the US, which should lead to higher production rates and longer mine lives across the portfolio. “We’ve had a lot of success in New Zealand around the Waihi gold mine. The Martha project is going very well and we’ve logged terrific intercepts of gold intersections beneath the pit, which could extend the life at Waihi by 10 years from underground. The permits for that project are also going to plan.” The other piece of good news coming out of Waihi is the WKP prospect just to the North, which is showing strong potential for the development of an underground mine

operation. OceanaGold has a couple of drill rigs working at the prospect, which have already intersected significant high-grade gold mineralisation. In South Carolina, the company aims to increase production at Haile, which is part of a three-year plan to boost the capacity of the plant through the installation of a new fine grinding system and a pebble crusher. “The pebble crusher has been commissioned and is up and running and we expect to commission the fine grinding circuit in the first quarter of next year, which should lead to higher throughputs. “We’ve also planned some additional projects on the horizon to improve the performance of the process plant and increase throughput and production in 2020.”

ResourceGlobal GlobalNetwork Network 97 Resource

In parallel, OceanaGold has commenced the permitting process for the expanded open pit and underground mine at Haile and hopes to receive the permits by the end of 2019 or beginning of 2020.

there is very little impact on community and environment from those operations.

“The style of mineralisation is these low sulphidation epithermal type deposits which lend themselves to low capital costs, high Elsewhere, the firm has entered into two joint margin, quick payback investments. This fits ventures with Mirasol Resources in Argentina well with our strategy for entering a new to earn up to a 75% interest in two early country like Argentina.” stage exploration projects located in Santa Cruz Province. These greenfields targets have provided some encouraging early results and are part of the company’s exploration strategy across several prolific gold provinces in North and South America. “Geologically speaking, Santa Cruz is a significant gold province. There are some very good mines that operate there and

New Americas HQ

On a corporate level, OceanaGold recently decided to move its America’s headquarters from Vancouver to Denver as the company looks to firmly establish itself in the US market. “Vancouver was very helpful because it put us into traffic in North America and as a result

MINING | OceanaGold

Resource Global Network we made a number of acquisitions including the Haile Gold Mine. But we began looking for a hub in North America that would also provide an interlink to our business in Australasia and APAC.” Denver soon emerged as the location of priority, with the Colorado city already home to major gold producers Newmont and Barrick Gold, and the biggest gold producing state in the US – Nevada – is in close proximity. “Our Denver base can support our operations in South Carolina and hopefully future operations in North and South America. It’s part of a long-term strategy to build our business in the Americas” OceanaGold has enjoyed a strong first half of 2018, generating around $90 million in profit and remaining on track to hit its revised production target of 500-550,000 ounces of gold. “We are in good shape and I expect us to sustain this level of profitability for the medium term and into the long term if our exploration plans come to fruition. We have a vision and we will stick to the strategy and build a really robust business.”

TSX:OGC ASX:OGC

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MINING |Osisko Metals

OSISKO METALS INCORPORATED

Creating value in the base metals sector with two premier Canadian zinc mining camps

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MINING |Osisko Metals

Osisko Metals (TSXV:OM) is a leading junior explorer and developer that was established 16 months ago with a vision of creating value for shareholders in the base metal sector. Since then, the company has consolidated its position in Canada’s two premier historic zinc mining camps — Pine Point and Bathurst — raising $52 million for exploration and development for both of these assets. “Between both camps we launched a combined 100,000 metre drill campaign, which is likely the largest base metal exploration programme in the base metal sector,” says president and CEO Jeff Hussey. “We are on the cusp of our first major milestone at our flagship project, Pine Point, as we approach the release of a maiden NI43-101 Resource.” Osisko Metals shares synergies with the other Osisko companies that have created over $9 billion in shareholder value in 14 years. These include Osisko Mining (TSX:OSK), a household name in the Canadian gold industry, and a royalty streaming company in Osisko Gold Royalties (TSX:OR). Both OSK and OR have equity positions in Osisko Metals and two founding members of Osisko sit on the board of directors. “Bob

Wares is our executive chairman, and a major influence on the company’s vision, project generation, and financing,” Hussey reveals. “John Burzynski is a director who has helped us with his extensive network and knowledge on capital markets. John also brought the Pine Point project to our table and this has

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become the flagship project for the company. â&#x20AC;&#x153;We also have Luc Lessard, who sits on the board and who was the original Osisko COO in charge of construction of the Canadian Malartic mine, which was his 11th career mine build and who is looking forward to building his 12th.

â&#x20AC;&#x153;These individuals give us a lot of depth in project generation, exploration, development, construction, and commissioning - all the skills needed to find, develop, and finance mining projects. Weâ&#x20AC;&#x2122;re the first venture into the base metals sector with the Osisko brand

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MINING |Osisko Metals name and will do our upmost to keep up to the reputation of creating value.” When Osisko Metals was established, its leadership reviewed numerous assets and identified a set of key criteria to select a unique portfolio of projects. Hussey says that having worked for Noranda for twenty years at several base metal mines, it is clear that geology, metallurgy and infrastructure are instrumental to developing base metal assets. “You want to be able to extract the metals using conventional metallurgy and get your product to tidewater without building expensive infrastructure. We were also looking for upside and Pine Point has all three in spades, as there is significant brownfield exploration potential both at depth and along strike from known mineralisation. “Being former producers, both mining camps have all the necessary infrastructure to handle an operation of the size we are hoping to develop. The decades of historical production also provide us with a strong confidence in the excellent conventional flotation metallurgy at both Pine Point and Bathurst.”

this led to significant over-production and corresponding increases in global metal inventories. The resulting oversupply of zinc peaked on the London Metal Exchange (LME) in 2013 at 1.5 million tonnes (Mt), more than double previous peaks. Zinc prices dropped and remained low between 2010 and 2017, hitting a decade low of about 70 cents per pound in 2016. Prior to the CSC, the metal inventory varied for decades between 300-600,000 tonnes on the LME. However, from 2013-17, zinc metal inventories were depleted by 75% as mines shut down and production decreased, which brought global inventories back down to critical levels. Correspondingly zinc prices surged between 2016-18. Unlike the previous spike in zinc prices in 2006-07 when CSC demand was peaking, today current producers are simply unable to increase their production. This, combined with a relatively barren development project pipeline hindered by more than a decade of sparse exploration, leads Osisko Metals to believe that supply will remain tight and very supportive of zinc prices for several years. Currently metal inventories are at 155,000 tonnes, half of typical critical levels.

Before delving into the Pine Point and Bathurst camps, it is important to understand the context of the base metals market over the last five to 10 years, which has been vital in shaping the company’s strategy of developing both zinc assets.

“When we started the company we could see these supply and demand fundamentals developing and in response we initially positioned ourselves in Bathurst. We then searched the base metals space for stranded assets with which we could develop and create value.

Hussey explains that when the decadelong Chinese Super Cycle (CSC) hit in 2002, commodity prices tripled and in response,

“We purchased Pine Point and now we are doing just that, creating new value. We are

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â&#x20AC;&#x153;Pine Point is the only high grade open pit zinc project globallyâ&#x20AC;? Jeff Hussey, president and CEO

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MINING |Osisko Metals

currently converting historical resources in both camps through definition drilling to upgrade deposits to comply with NI43101 standards, then we can start economic studies and de-risk projects once the mineral resource base is solidly established. “In both camps the brownfield exploration potential is significant and we look forward to exploring the ‘blue sky’ upside following our historical resource conversion programmes.”

Pine Point Mining Camp

The Pine Point Mining Camp is located in the Northwest Territories of Canada and was purchased by Osisko Metals in February

2018 for approximately $35 million by way of Plan of Arrangement with Pine Point Mining. The project hosts a 50Mt unclassified, historical, near surface resource base that the company aims to convert into a NI43101 Mineral Resource Estimate as quickly as possible through an aggressive definition drill campaign. The historical resources grade on average 5% zinc + lead (Zn+Pb), potentially minable by open-pit methods. “If there is one group that knows how to create value at the drill bit it’s Osisko,” says an assured Hussey, before revealing that the 2018 campaign is going according to plan.

ResourceGlobal GlobalNetwork Network 107 Resource the only large tonnage, open pit, zinc-lead development project globally.” Giving an example, Hussey calculates that open pit grading of 5-6% Zn+Pb is roughly equivalent to a 2% copper head grade, or a 2.5 g/t gold head grade, and if this is converted into a net smelter return (NSR), the value is superior to 90% of zinc, copper and gold openpit development projects and mines globally. Therefore, it is not difficult to see how the open-pit nature of this zinc asset could contribute to a highly profitable operation. For now, Osisko Metals is prioritising the conversion of historical resources through its own definition drilling, that will give the company greater confidence to use the previous Cominco data in its own economic studies.

A key focus for Osisko Metals within the Pine Point camp is the East Mill Zone, which has returned a string of highly encouraging nearsurface intersections, including a 21.47% Zn+Pb over 9.98 metres, 20.48% Zn+Pb over 6.23 metres, 19.68% Zn+Pb over 6.30 metres and 16.61% Zn+Pb over 6.75 metres. It is the shallow nature of these high-grade intercepts across the property which is generating the most excitement, with the average depth of mineralisation above 100 metres. “The mineralisation can be accessed through very shallow open pits that will require little capital to develop relative to other zinc mines. Approximately 90% of zinc production globally is underground and Pine Point is

Aside from drilling, the company is advancing and updating environmental baseline studies as part of the de-risking process and, on the development side, Osisko Metals is evaluating pre-concentration techniques that may lower capital expenditures and contribute to a lower cost operation. “We also want to start brownfield exploration next year. The difficulty of Pine Point is that the style of mineralisation (known as MVT-type Zn+Pb mineralisation) is blind to conventional magnetic and electromagnetic geophysical techniques. “Today, airborne gravity gradiometry has a good chance of detecting Zn+Pb mineralisation below and along strike from the known deposits that will provide ‘blue sky’ opportunity for our shareholders. This could lead to new discoveries that will further add to our resource base.”

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MINING |Osisko Metals

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Bathurst Mining Camp

The Bathurst Mining Camp (BMC) was the third largest VMS camp in the world in its heyday and it includes the highly prolific ‘Brunswick Horizon’ that hosted the largest underground zinc mine in the world, the Brunswick No. 12, as well as the Brunswick No. 6 open pit mine. Combined, they produced 150Mt of zinc, lead and silver ore over a 49-year period, until closure in 2013. Osisko Metals first secured a position along the Brunswick Horizon in early 2017 and has since accumulated 63,000 hectares of land surrounding underexplored deposits in the BMC. Drilling began in September 2017 at Gilmour South and Mount Fronsac. Now the current focus is on the Key Anacon deposit, which was acquired in December last year. “Key Anacon was held in private hands for over 60 years and is now the most exciting brownfield project in the BMC. We initially targeted the Main Zone that hosts a 1.9Mt historical resource.

“In the early 1950s, Key Anacon Mines sunk a shaft and developed eight levels but it never went into production. It was however drilled in detail within the Main Zone but they left the deposit open along strike and at depth. We drilled one hole this year that went through the heart of the Main Zone, and it confirmed 12.1% combined Zn+Pb over a true thickness of 26 metres.” Since the spring, Osisko Metals has been drilling at both the Main Zone and the Titan Zone at Key Anacon. The Titan Zone is located 1.5 km to the Northeast and is open in all directions. It has returned exploration success with the best intersection to date grading 6.07% zinc, 2.19% lead and 0.92% copper over 22.2 metres. The Titan Zone resources were never definition-drilled nor estimated into the historical resources and the company

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currently has an additional zone that extends from surface to 800-1,000 metres depth. The copper credits are also noteworthy within the zinc and lead rich zone and a pure copper zone extends below the deposit to the East for at least 1,000 metres. It is considered to be the richest copper feeder zone in the BMC. This will also be a focus of upcoming drill campaigns. At the Main Zone and the Titan Zone, Osisko Metals is seeing mineralisation beyond the known boundaries of the historical resources, so the company plans to drill off both zones at Key Anacon and work toward a resource estimate in 2019.

During its first year and a half of operation, Osisko Metals has charged to the forefront of the junior global base metals industry, drawing on access to capital and the network of expertise gained through synergies with OR and OSK, in order to secure and develop its position in two formerly producing worldclass zinc mining camps in Canada. â&#x20AC;&#x153;We are one of the most exciting explorers and developers in the base metal space. I think we are going to get a lot of traction going forward as we have done very well in executing our vision in our first year. We have a lot of gas in the tank to go forward and reach our objectives for the near future.â&#x20AC;?

Osisko Metals is also looking at other targets in the BMC since acquiring a portfolio of untested combined gravity/EM anomalies.

TSXV:OM

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MINING | Dundee Precious Metals

DUNDEE PRE

Resource Global Network

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ECIOUS METALS Marrying record gold production with sustainable mining

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MINING | Dundee Precious Metals

Dundee Precious Metals started as a closed investment fund in 1983 focusing on gold and precious metals stocks in Canada. 20 years later, the business converted into an operating mining company after completing the acquisition of some assets in Bulgaria. Since then, Dundee has been on a solid growth path in terms of the number of assets under the company umbrella, with two operating assets - the Chelopech mine in Bulgaria and the Tsumeb smelter in Namibia and is close to adding a third asset in Bulgaria. The companyâ&#x20AC;&#x2122;s portfolio is also reinforced by a number of exploration stage projects in Bulgaria, Serbia and Canada. President and CEO Rick Howes joined Dundee in 2009 when he was appointed head of operations at the Chelopech mine, before quickly progressing to chief operating officer of the company in 2011 and CEO in 2015. Like the entire senior management team at Dundee, Howes holds a deep understanding in the technical, operational and management aspects of running a mining company, stemming from 34 years of experience across several major Canadian mining firms.

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“We mostly have been focused on organic growth. We’ve been successful with exploration and that is where most of our growth has come from,” says Howes when explaining the group’s strategy. “We are mainly focused on gold as a mining company, but we do have copper as a byproduct from our Chelopech mine. Our primary focus is on metals like gold and silver in Europe and Africa, although we are looking globally as well. “As long as the jurisdictions feel stable and have a good regulatory framework, we will consider capitalising on them because we need to ensure our investments are not being put into jeopardy.”

Operating assets

The Chelopech mine, located in centralWestern Bulgaria approximately 70 km

East of capital city Sofia, was purchased by Dundee in 2003 through a bankruptcy proceeding. The large-scale copper-gold deposit was owned by an Irish company for around 10 years after it was privatised in 1993 following the end of Soviet rule in Bulgaria. According to Howes, for more than 60 years Chelopech was a poor performing asset having first produced ore in 1954, but Dundee has instigated a dramatic turnaround in fortunes at the mine during the last decade and a half. “We’ve transformed Chelopech into a modern efficient operation, we have quadrupled production, cut costs in half and it is now a flagship asset that generates profitably for the company. It has been a success story all the way round.

Resource Global Network 248 Dyson Road, Wadeville Ext 1 Germiston, South Africa T +27 11 323 3000, F +27 11 827 8414

Port of Walvis Bay, Rhikumbi Kandanga Road, Walvis Bay, Namibia T +264 64 221 540, F +264 64 221 541

It is with great pride that Protea Chemicals Namibia partners with industry to add value to the Namibian economy and communities. We are proud of our partnership with Dundee Precious Metals Tsumeb ensuring their Sulphuric Acid production of about 225 000 ton per annum is marketed and distributed safely by both road and rail. In addition to the supply of chemicals, our services oﬀered to customers include the following:           

Safe loading and ofﬂoading of product by well trained and experienced resources Logistics planning and management along with all related administrative functions SHEQ management and enforcement along the transportation route and on site Emergency response systems and equipment strategically located along the route IT document systems integration and management Tracking of shipments and enhanced business intelligence through innovative technology information systems Community hazardous chemicals awareness training Fire department and medical centre hazardous chemicals awareness training Marketing of customer products Contingency planning and risk mitigation Joint negotiations with all stakeholders including advice leveraged from extensive market knowledge

It is our vision to create customer wealth by leveraging the collective knowledge of our group and reduce risk through a total cost of ownership strategy that aims to ensure that our customers remain a proﬁtable, sustainable and relevant member of the Namibian community.

more than just a chemical supplier www.proteaminingchemicals.co.za www.omnia.co.za

“Today it is seen as one of the examples of an underground mine which is modern and uses latest technologies to operate the mine and for this reason it is well visited by most of the major global mining companies.” However, the growing success at Chelopech soon spawned a new problem for Dundee. As complex copper concentrate output rapidly increased from the mine, it became more difficult to find a market for the product, which contained high levels of arsenic – a toxic substance that requires capturing during the ore processing stage. So, in 2010 the company acquired the Tsumeb copper smelter in Namibia. “We invested in the smelter to make it modern and sustainable and to make it a global complex copper concentrate smelter, one that could not just treat our concentrates but complex concentrates from around the world,” says Howes.

In the time since then, Dundee has doubled throughput out of the smelter, cleaned up its environmental footprint and continues to treat global third party concentrates along with the company’s own concentrate from Chelopech. “We have eliminated the majority of gas emissions coming out of the smelter stack. We now produce an acid that captures the SO2 emissions and then sell that acid into the market to uranium producers and other producers that need acid for their process.”

Development and exploration assets

Along with the Chelopech mine, Dundee also took ownership of the Krumovgrad exploration asset in Bulgaria as part of the acquisition, and the company has been

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advancing the open pit gold-silver asset ever since. The earthworks contractor was mobilised to the site at the end of 2016, construction has been progressing for the last 18 months and is currently 70% complete, ahead of a commissioning target in September and first concentrate pour by Q4. “Everything is going well at Krumovgrad, construction is on track and under-budget,” says an assured Howes. With a total gold production of 685,549 ounces (oz) at 4.04 grams per tonne (g/t) and silver production of 309,915 oz at 2.22 g/t over an eight year mine life, Krumovgrad is set to significantly boost Dundee’s total ore output, along with the company coffers based on a net present value (at a discount rate of 5%, after-tax) of $187.6 million. With Krumovgrad inching closer towards

full operational status, Dundee’s senior management team is slowly shifting greater attention towards its other exploration stage assets in Bulgaria, Serbia and Canada. “In Bulgaria, we’ve been successful at replacing reserves we have mined at Chelopech through our in-mine exploration programmes that have been going on for the last seven or eight years now. “Then, two years ago we started a regional exploration programme around Chelopech and also one around Krumovgrad to extend the lives of those two assets. Those were very active programmes, exploring within about a 5 km radius from Chelopech and 20 km from Krumovgrad.” Both surrounding areas are being heavily explored and a number of targets have been

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identified which the company is currently drill testing and is hoping to receive positive results from in the near future.

Sustainable mining

A core pillar of Dundee’s company strategy is sustainable mine development. Howes reveals that the firm’s notion of successfully operating in a host country is dependent on how satisfied the local communities and government are with Dundee’s ongoing roles as a mine operator.

To achieve this end, the company has initiated a number of sustainability programmes within the regions which host its assets. An example of a successful programme comes from Chelopech, where Dundee has been reinvesting a percentage of its profits into the local communities since 2003.

“We operate our own high school which is one of the top schools in the country. The students are also the top students in the country and many of them go off to international institutions like Harvard and Dundee works closely with local communities others,” reveals Howes. and governments to ensure that its practises and operations have minimal negative Dundee has also invested in community impacts on the environment, and to make infrastructure, such as water projects and sure that the company’s presence makes a hospital builds, close to Chelopech following positive contribution to the wellbeing of the consultations with local citizens. The same regions it operates in.

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“We’ve transformed Chelopech into a modern efficient operation, we have quadrupled production, cut costs in half and it is now a flagship asset that generates profitably for the company” Rick Howes, president and CEO

Resource Global Network philosophy is evident in Namibia, where Dundee has created the Tsumeb Trust – a community-led group which allocates money to small and medium sized business enterprises. “We also built housing for employees in Tsumeb as part of a programme where employees can get access to low cost housing through loans that are provided to them,” says Howes. 2017 was a record year for Dundee in terms of gold production as the firm delivered close to 200,000 ounces and 35.8 million pounds of copper, while smelter throughput steadily improved in line with company guidance for the year. This year, Dundee is guiding between 165,000 and 185,000 oz of gold, and after publishing a strong gold output of 57,331 ounces during Q1, the company has little reason to believe it won’t hit or exceed this target. Similarly, Dundee is expecting to reach its annual smelter throughput guidance of between 220,000 and 250,000 tonnes of complex copper concentrates, especially after H2 results revealed a total year to date throughput of 100,500 tonnes. With Krumovgrad and a series of other exploration stage assets still to come, the medium-term future of Dundee Precious Metals looks safe and secure.

TSX:DPM

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WORKS HERE.

A range of gas-engine oils that has been developed to deliver optimum value to equipment operators through enhanced wear protection, long oil life and high system efficiency. www.shell.com/lubricants

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MINING | Nemaska Lithium

NEMASKA LITHIUM

Fully funded and on track for major lithium salt production in the early 2020s

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The last time RGN spoke to Nemaska Lithium, the TSXlisted miner had released an updated feasibility study for its Whabouchi project in Québec and was working hard to secure project financing for the globally significant source of lithium hydroxide and carbonate. Nemaska’s most notable achievements to date include the production of a large bulk sample of 1,100 tonnes of spodumene concentrate and the construction of a Phase 1 processing plant, which has been used to transform spodumene concentrate to high purity lithium hydroxide. The company has also produced over 50 tonnes of battery grade lithium hydroxide for one of its offtake partners in the battery chemicals space. By the end of May 2018, the company was pleased to announce the completion of a C$1.1 billion financing package – a huge achievement considering the size of the package and current financier sentiments towards the lithium market. The project financing is comprised of C$454 million in equity, which included a $280 million public offering through a bought deal, an $80 million private placement with Ressources Québec, and most notably, a $94 million private placement from world leading

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Japanese technology investor Softbank. “This is the first time that this very highprofile group has invested in a mining project,” says Nemaska president and CEO Guy Bourassa. “They realise that it’s very important to secure a good source of supply in the battery chemicals industry and for us it’s a good stamp of approval of our process and the quality of the asset we are developing.”

outset, particularly as conventional banks and natural resource banks – the company’s first choice for project financing – continue to be cautious of the lithium market, believing it to be opaque. “In the end we accepted a Nordic bond offering and had to go through about five different due diligence reviews by international third-party firms, which were all positive.

Nemaska also signed a US$150 million streaming facility agreement with Orion Resources Partners, under which both parties will share 14.5% of future production of all lithium products. The remaining $350 million of the project financing is a senior secured bond offering on a five-year term that bears an 11.25% interest rate per annum.

“Nevertheless, completing project financing was very challenging because you have to demonstrate to a lot of people that not only do you have a good natural resource and a good mine, but also that you can execute the project and sell the end product,” he says.

Bourassa admits that undertaking project financing was a huge challenge from the

On that front, Nemaska has been able to sign a number of offtake agreements

Offtake agreements

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which have secured the sales of 94% of its expected capacity. One of these recent deals is with next generation lithium-ion battery manufacturer Northvolt, who will take up to 5,000 metric tonnes per year of lithium hydroxide from Nemaska’s commercial plant over five years. “We were very impressed by Northvolt, who is building Europe’s largest Gigafactory. They were aware from the very start of their project of the need to have a solid supply of raw material to make the cathodes and batteries. They impressed us and likewise they were impressed with what we could offer.” Nemaska’s ability to secure a string of offtake agreements is a direct consequence of the company’s decision three years ago to build a Phase 1 demonstration plant in Shawinigan, according to Bourassa.

“That is the only reason we were able to convince third parties and engineers of our capacity to fulfil offtake agreements and produce at the costs that we are projecting and the quality we say. The only way we convinced them was by the fact that we were already producing lithium hydroxide from spodumene concentrate at the Phase 1 plant.”

Construction

With project financing and offtake agreements with five partners secured, Nemaska has been able to move swiftly into the construction phase of the spodumene mine and the full-scale plant at Whabouchi. The company had already raised over $125 million in equity between July 2016 and June 2017 to advance construction of the mine and detailed engineering of the project.

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“We slowed down [construction work] during the winter waiting for the close of project financing at the end of May, but about 10 days later our construction teams were back onsite. Most of the long-lead items for both sites are now ordered and we fully expect to meet the schedule.”

to have their name attached to us and the project and are all keen to make it a success.” The construction team is currently working at full speed and the mine is on track to begin producing spodumene concentrate in the second half of 2019 with lithium salts production set to commence in the last half of 2020.

Nemaska’s construction partners include ABB for electrical engineering services, DRA Met-Chem for engineering design of the mine and concentrator, tailings and waste advisors Nemaska’s ability to develop spodumene SNC-Lavalin and Hatch Engineering, who concentrate into lithium hydroxide and provide engineering design assistance for the carbonate in-house through its processing electrochemical plant. plant provides a major cost advantage over its competitors in the lithium salts industry, “We are very satisfied with our construction particularly the Chinese producers. partners, they are very dedicated,” says Bourassa. “It’s a major project in Québec A large majority of global spodumene and a very major project in the lithium space concentrate is produced in Australia before around the world, so they are all very excited

Vertically integrated

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being shipped to China for conversion into lithium chemicals, a trade which incurs escalating costs for the Chinese producers when you consider things such as export tax and shipping fees over such a long distance.

lithium hydroxide they must first make lithium chloride extracted from the brine, before making lithium carbonate only to then re-process the material into lithium hydroxide.

“Being vertically integrated in Canada means we are in the same taxation jurisdiction. There are no taxes between the mine and the conversion plant and our transportation costs are significantly lower, so our base cost for the raw material is much lower than the Chinese.”

“Our electrochemical process takes the product directly from lithium sulphate to lithium hydroxide. We save one step that for the brine producers costs between $1-2,000 a tonne.

Nemaska’s lithium hydroxide will also be cost-competitive with the major brine producers from the famous lithium triangle in Latin America. The likes of SQM and Albemarle have long been recognised as amongst the world’s lowest cost producers, however to make

“Our cost of producing carbonate is slightly higher than the cheapest brines, but our cost of hydroxide is roughly $500 to $1,000 cheaper than the cost of the brines. “The process helps us compete with the low cost brine producers and of course the fact that we are integrated gives us an enormous advantage on the spodumene convertors.”

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First Nation engagement

The Whabouchi project has been estimated to have an initial 33-year mine life by Nemaska, and as such the development is likely to have a lasting impact in the area where the mine is based. In fact, Whabouchi is the only mining project in the Eeyou Istchee James Bay region that is within driving distance from a Cree community. Therefore, Nemaska has had to think very carefully about the potential environmental and social impact its project might have on the local First Nation community. As a result, the Cree Nation Government and Cree Nation of Nemaska have been actively involved in project proposals since 2009. For example, after a public consultation Nemaska decided to relocate its tailing and waste rock pile facilities after the Crees expressed their concern about the effects of dust and noise on a nearby seasonal hunting and trapping camp. “We have also been working with the Crees to try and develop business opportunities, but also offering training ahead of potential employment at the mine.”

Constraining lithium supply

Turning to the current outlook in the lithium market, increasing demand for lithium hydroxide and carbonate from the OEM battery and electric vehicle (EV) industries

into the 2020s is not being matched with increasing supply, which is a cause for concern according to Bourassa. Lithium stocks and the equity market has endured a difficult six months, which is likely to have a knock-on effect in terms of project financing. “I think that several projects that were aligned to come online before 2025 are going to be delayed, and that leaves very few companies like us with full project financing trying to get to the finish line.” Considering these potential headwinds in the industry, the importance of Nemaska’s project becomes further elevated, particularly as there is a lack of new lithium hydroxide production coming online. With its fully funded Whabouchi project, Nemaska is set to provide some relief to a tightening lithium chemicals market in the early 2020s, nourishing the needs of a growing number of OEMs in the large-scale battery and EV industries. “We definitely are going to be a large player in the short term as far as lithium hydroxide of battery grade is concerned,” says a confident Bourassa. “We will be the single largest hydroxide facility in the world with 36,000 tonnes of capacity. That will give us about 10% of the market for hydroxide and we intend to get that and keep it there.”

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MINING | Alphamin Resources

ALPHAMIN Facilitating a new era of responsible mining in DRC

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Exploitation is a word that is never too far away from recent descriptions of the mining industry in Democratic Republic of Congo. The Central African nation has been ravaged by a series of bloody civil wars that were often played out in the pits of rudimental mines controlled by rampaging militias. Not only did these armed criminals bring anguish and suffering to thousands of victims during the conflict and for many years after it, these low-tech minersâ&#x20AC;&#x2122; crude extraction methods also rendered huge swathes of valuable mineral deposits uneconomical for commercial exploitation. While peace and civility are finally surfacing across DRC, the scars left by years of artisanal conflict-driven mining run deep in many areas of the country. However, Alphamin Resources is a TSXVlisted company that is hoping to make a genuine difference in the DRC through a robust commitment to conflict-free, responsible mining. CEO Boris Kamstra hopes the globally significant Bisie Tin Project will also serve as a catalyst for economic development in the region.

The law of the jungle

Alphaminâ&#x20AC;&#x2122;s Bisie project is nestled deep in

the rainforest of North Kivu, an area which was effectively ruled by the law of the jungle between 2002 and 2011, when up to 16,000 artisanal miners toiled at Bisie surface deposits. Several groups of armed rebels controlled the sprawling network of artisanal miners, forcing them to extract the metal from hand-

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dug tunnels before imposing extortionate taxes on each individual minersâ&#x20AC;&#x2122; daily haul of tin. The extent of the problem soon manifested on a worldwide scale when it emerged that around 4% of global tin supply originated from the DRC with a large component of illicit production from Bisie up until 2012.

The implications were grave for corporations who discovered their supply chains had been poisoned at source and consumers who became the end recipients of conflict-tainted products. Action was urgently required to tackle the prevalence of illicit mining in the Bisie region and since 2010 a major international

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Resource Global Network legislative drive aimed at preventing these conflict minerals from entering global supply chains has been enacted. A number of initiatives were developed in tandem with US legislation under the Dodd-Frank Act, guidance from the OECD’s responsible supply chains in high risk areas documents and several local initiatives attempting to enhance traceability of several conflict minerals from the Great Lakes Region. “With regards to the notion of how one operates responsibly in an area, particularly in an area like North Kivu, an absolute minimum would be to comply with all international legislation,” says Kamstra. Alphamin’s compliance to Dodd-Frank regulations along with other conflictpreventing initiatives ensures that its tin product will only be sold through legitimate channels, thus making stolen or misappropriated tin worth much less across open markets. The tin concentrate produced at Bisie by Alphamin will also be certified as conflict-free tin. “Our tin will be for any potential buyer and is an absolute premium product,” says Kamstra. “Like the little sticker that says intel inside, I expect to see a little sticker that says Alphamin tin inside.” Overall, these initiatives have led to much more stringent supply chain monitoring by companies around the world and the opening up of certified conflict-free supply chains, which has driven out conflict mining in the Bisie region on a large scale. In fact, there are currently no artisanal miners working in any of the Alphamin

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license areas as of December 2017, which is an impressive feat given there were 16,000 small-scale miners working across Bisie just four years ago.

Adding value

companies to deliver vital equipment as it moves into the construction stages of the mine and plant. “People like TMK Congo and Tembo Logistics have moved heaven and earth through hell to get equipment to us when we needed it,” says Kamstra, citing a recent occasion when TMK trucks weathered extraordinary conditions to deliver components for the construction of the mine.

However, following regulations is the least that any company should do in its role as a responsible miner, according to Kamstra. “We are looking to be a catalyst for economic The CEO reveals that construction of the development in the wider region of North mine and the plant are on track with full Kivu. production expected to be reached at Mpama North – Phase 1 of the Bisie project “A basic example of responsible mining is by Q2 2019. to abide by the rules but in our instance,

it means we are going to bring in local contractors and suppliers wherever possible “What you have to understand is that the full team at Alphamin is in a category and a class and invest in the communities amongst whom we live and operate,” he says. Recently, of their own anywhere in the world. These Alphamin has relied on several local logistics

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The Bisie Tin Project â&#x20AC;&#x201C; Phase 1: Name: Mpama North Location: Walikale territory, North Kivu province, DRC Mining method: Underground mechanised mining Production: ~10,000 tonnes per annum tin concentrate LOM: 12.5 years NPV: US$402.2 million IRR: 49.1% Capital expenditure: $124.4 million

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are people that can do incredible things in a difficult environment. What they have achieved so far is magnificent,” proclaims Kamstra. “The people of the area have a capacity for work that I have yet to see anywhere else. Their willingness to work and resourcefulness reflects the environment in which they live and operate.” This remarkable aptitude for work amongst residents of the Bisie region provides clear justification of Alphamin’s policy to work with local contractors and suppliers, aside from the fact that it also a much more costeffective way of operating compared to importing labour from abroad. In addition, a significant portion of Alphamin’s local contractors view themselves as part owners of this project as many have actually invested into the company in recent capital raises.

“This gives me a great degree of satisfaction because I am effectively paying them with their own money. Where else in the world do you have this sort of scenario? There is a serious ownership model within our entire contractor base.” Alphamin is well-cashed up after a recent US$15 million equity financing raise, by way of a non-brokered private placement, which was preceded by a larger private placement at the start of the year, which generated approximately $43 million in equity. These recent fundraisers will support the final push of the construction stages of Mpama North, but this hasn’t stopped the company from exploring other sources of potential investment, which is reflected in the secondary listing of Alphamin on the JSE AltX Board in South Africa.

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“We think that the South African environment is one where investors understand the mining industry and understand how to invest in mining. We believe as we move forward, so we will see increased activity on the AltX.”

The tip of the iceberg

Alphamin’s immediate plan of action is focused on getting Phase 1 of the project into steady state production next year. However, Mpama North could potentially be just the tip of the iceberg for the company in the mineral-rich Bisie region.

“Once we get some cash flowing from Mpama North we will explore below where we stopped drilling on Mpama North and the rest of the ridge where we have some of the most extraordinary signatures from pre-geological exploration metrics, including gravity and soil sampling. “If someone were to look at the composite signature map from all of those surveys and reference them against Mpama North, they would likely say you’ve built the mine in the wrong place as there are far bigger signatures further South”, explains Kamstra. “Mpama North just happens to be the area we know most about and it’s a mining project that will produce an IRR of around 49%,

Resource Global Network

“We are looking to be a catalyst for economic development in the wider region of North Kivu” Boris Kamstra, CEO

study (see p140), but its importance has been further intensified by recent research that indicates there could be a global shortfall in tin supply in the coming years. Tin is not a new metal to mankind and has been mined by humans for centuries dating back to the Bronze age. Consequently, the easy and not so easy ore bodies have been found and mined out, hence a global supply shortfall has been on the horizon for quite some time and the only reason Bisie hasn’t already been depleted is because it was completely inaccessible until now. Therefore, with Mpama North set to supply 10,000 tonnes of tin a year over a 12.5 mine life and additional deposits in the nearby area also likely to produce the metal on a similar scale and on a long-term basis, Alphamin’s importance to the global tin industry is unquestionable.

which is very good for a starter project. “It will give us the springboard and capital to explore the rest of the region and position Alphamin to be a potential producer of 30,000 tonnes per annum of tin, giving the industry confidence that there will be a responsible and meticulous provider of tin on a global scale.” The global significance of the Bisie project has already been proven by the astounding metrics confirmed in the definitive feasibility

However, it is Alphamin’s commitment to establishing a new conflict-free era of mining in DRC and its pledge to add real socioeconomic value to the Bisie region that fills Kamstra with most pride. “It probably is the greatest honour in my life to be working on this project. To be working with the team we have and to see these guys in action really sets your measure of what can be done. We still have a long way to go, but I hope to be talking to you again in Q2 next year having made our first sale.”

TSXV: AFM JSE: AFM

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MINING | Superior Gold

superio

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or gold A business first, gold company second

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MINING | Superior Gold

Canada-based miner Superior gold classes itself as ‘a business first, gold company second’ and is solely focused on its 100% owned Plutonic Gold operations in the world class goldfields of Western Australia. The Plutonic Gold operations include the Plutonic underground gold mine (with central mill), the Hermes open pit gold mine and an interest in the Bryah Basin joint venture. In the view of CEO and president Chris Bradbrook, a lot of gold companies talk about how many ounces they produce and not necessarily about the cost of getting there. “We follow a mantra where we want to make money and so we focus on the bottom line. Gold production is almost a by-product of that approach,” he explains. “Everything has a cost per ounce including management, and that is why from day one, we have been very focused on minimising G&A (General & Administrative) expenses. “Our strategy is predicated on managing costs and optimising production, which means making as many ounces as you can at the biggest possible margin.” A brief glance at a comparison chart for G&A costs per ounce of gold production amongst Superior and its peers reveals that the strategy is paying off, with US$47 per ounce

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Gold operations from Australian gold spent on G&A in 2017, just under half the average of $97 per ounce spent by competing producer Northern Star. After acquiring the asset in October 2016 Bradbrook began gold firms. to build the management team with Paul Olmsted, previously of IAMGOLD, appointed Last year, the company exceeded guidance as CFO. in its first full year of production, producing over 80,000 ounces of gold solely from its Plutonic underground gold mine. The companyâ&#x20AC;&#x2122;s near-term objective is to increase production to a sustainable 100,000 ounces per annum (pa) with the expected contribution from its Hermes mine, which entered commercial production in March 2018. Superior was initially a numbered private company that was formed by Bradbrook specifically for the acquisition of the Plutonic

The company inherited its current general manager of the Plutonic Gold operations, Frederick Labuschagne, along with the asset and has since added a few extra members to complete a lean management team, which helps keep G&A expenses down. In February 2017, Superior went public via an IPO on the TSX Venture Exchange with a goal to raise C$15 million. The market float

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attracted around C$75 million subscriptions, from which the company took C$32.5 million – a result that Bradbrook deems a big success. “We were lucky with the timing as the start of 2017 was a good time for gold mining. Toronto is still the mining finance capital of the world and I think that Toronto is the best place to list any mining company, not just a gold miner.”

Plutonic

The Plutonic Gold mine has been in continuous operation since 1990, with open pit mining running until 2005 and underground production commencing in 1995. During this time, Plutonic has produced around 5.5 million ounces (Moz) of gold, making it the sixth largest historic producer in Western Australia. Superior’s CEO and president says that the

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sheer scale and further exploration potential of the asset was a major attraction during the acquisition hunt, as was its location in the mining-friendly, low sovereign risk state of Western Australia. “We’ve seen it lots of times when companies work in these big systems and focus on exploration. They drill holes and end up finding even more ore. That was the potential we saw in Plutonic and there is nothing that we have discovered since taking it over that has changed that view.” The Plutonic mine has eight active mining zones. However, exploration has been prevalent across the entire underground mine complex as the company continues to announce high grade drill results on a monthly basis.

On the operational side, Superior has significantly optimised the performance of the Plutonic Gold operations since taking control of the asset, with ore recoveries increasing over the last four consecutive quarters. In the most recent quarter (Q2 2018), recovery rates hit 90%, increasing from 76% in the corresponding quarter twelve months earlier. Further improvements are also expected throughout the rest of the year after Superior announced it had completed the construction of a gravity circuit at the Plutonic mill. For Bradbrook, these operational improvements are an outcome of the company’s meticulous focus on optimisation and managing expenses: “It’s all about cost management and focusing hard on what we are mining.”

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Resource Global Network “We took over an asset that was being mined too fast and had too many people working on site. I am proud that we were able to really right-size the scale of the workforce and the scale of production from underground.” However, he credits the former owner of Plutonic with taking the first steps to improving its operational performance. “Northern Star had been making these changes while we were negotiating the price and they actually gave us the management team for it, so this was another element that was attractive to us.”

Hermes

Superior also brought its Hermes mine, located 65 km Southwest of the Plutonic Gold mine, into full commercial production in March. This was a major milestone for the company as it was able to fully fund, construct and then ramp up production from the development stage in less than 18 months. “This is a significant achievement because it has changed the perception of the overall Plutonic project, as previously people looked at it as a dying asset. “As part of Superior, production at Plutonic has increased for the first time in a long time and the incremental production from the pit should allow us to achieve our nearterm objective with production of at least 100,000 ounces per year.” With increasing production from the Plutonic underground and Hermes open pit mines, Superior has been able to increase throughput at the mill from approximately

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800,000 tonnes pa to close to full capacity of 1.8 million tonnes (Mt) pa.

Hermes South, where the company hopes to establish a new gold frontier.

Next, Superior will aim to ‘fill the mill at the best possible grade’, which reinforces the company’s ultimate strategy of managing costs and optimising production. “For example, if we could get more underground feed from Plutonic at a better grade than some of the ore from Hermes, than we would displace that Hermes ore with the higher grade.

“Once Hermes is depleted, Hermes South will potentially be the next pit. We are also beginning to put together a detailed exploration programme around the Plutonic mine itself where we think there is a lot of high grade prospective targets.”

“This is because if you fill the mill with the best possible grade, you produce the maximum number of ounces at the lowest cost,” explains Bradbrook.

In April, the company announced an initial inferred mineral resource estimate for Hermes South of 1.29 Mt at 1.54 g Au/t for 64,000 ounces (100% basis) and later published a string of encouraging results from a reverse circulation drill programme that was completed in May.

Hermes is also providing fertile ground for exploration, with the potential to grow the resource through near-mine targets including

The highest grade intersections were found to be both outside and parallel to the existing resource 150 metres South, indicating the

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possibility of outlining additional parallel zones. The results from this campaign suggest the potential to increase the existing resource at Hermes South. Going into the next 12 months, Superior is highly focused on hitting its production target of 100,000 ounces of gold pa across the Plutonic Gold operations and could surpass this figure with the additional production coming from the commercially producing Hermes mine. Overall, Superior is well placed to achieve this short-term goal, and the long-term growth of the business looks secure with a host of open

exploration targets across the Plutonic Gold operations. Superiorâ&#x20AC;&#x2122;s achievements are even more impressive given that all endeavours thus far have been fully funded with no debt attached to the company. â&#x20AC;&#x153;We are extremely pleased with how we have run the company since taking it over. Often companies like ours that start out with a single asset have to raise money two or three times to get to where they want to be. We have been able to do it with our own money.â&#x20AC;?

TSXV: SGI

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Safety Monitoring and Training Solution

IRISâ&#x20AC;&#x2122;s strategically mounted cameras provide complete visibility of your work siteâ&#x20AC;&#x2122;s activity, day and night. It protects your employees in two ways - hard hat detection alerts and security tracking and warning systems keep your employees and your operations safer, while the real site-based footage can be used in training and inductions to demonstrate how to safely complete a task, before employees even step onto site. Visit our website www.iriscorp.net or email info@iriscorp.net for further information.

www.iriscorp.net | info@iriscorp.net

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MINING | Zenyatta Ventures Ltd.

ZENYATTA

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VENTURES Producing graphene from the only known igneous graphite deposit in the world

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MINING | Zenyatta Ventures Ltd.

Graphene is a carbon nanomaterial with extraordinary properties that give it an astonishing list of applications, which continues to increase with every piece of research on the wonder Material. First isolated from graphite in 2004 by professors at the University of Manchester, the unique single layer atomic structure of graphene makes it the thinnest, lightest and strongest material known to man. Today, there is a race on to develop new products with enhanced performance using this recently discovered disruptive material, and Zenyatta Ventures hopes to become a world leader in graphene production through its Albany Graphite Deposit in Ontario, Canada. Located near the communities of Constance Lake First Nation and Hearst in Northeast Ontario, the Albany deposit has a rare igneous origin, which lead Zenyatta and CEO Francis Dube to believe that it is the only known graphite deposit of its kind in the world.

A unique geological event

“Most graphite deposits are flake or sedimentary style mineralisation, which took millions of years to form through the heating

and compression of organic matter,” explains Dube. “However, the Albany graphite was formed from a fluid in a flash event. This event was likely related to volcanic activity that produced a significant volume of carbon-rich fluids, including carbon dioxide and methane. It was this unique geological event that took place around a billion years ago that makes the deposit so unique, and is the reason why Albany graphite grains are nearly 1,000 times smaller than conventional flake graphite. According to research undertaken by Tokyo Institute of Technology (Tokyo Tech) last year, it is precisely the smaller grain size of the Albany graphite that determines the superior yield and quality of graphene produced, compared to graphene production from other natural graphite. This is just one example of a growing body of research on Zenyatta’s graphite and its strong suitability for graphene production. The company has been working with Dr Aicheng Chen from the University of Guelph over the last four years to produce graphene oxide from sample batches of Albany graphite. “He has had really good success making graphene oxide using our purified graphite product and attributes it to the grain size as well,” says Dube. “Dr Fanchini from Western University in Ontario has also had great success making graphene from Albany graphite,” he adds. “We are in the process of scaling up our sample batch processing so that we can include both graphene and graphene oxide in our upcoming updated preliminary economic assessment [PEA].”

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The company’s initial PEA for the Albany Graphite Deposit was published in 2015 and included an after-tax net present value (NPV) of US$590 million at an 8% discount rate selling graphite in the high-purity market at an average price of US$7,500. This study also included a mineral resource estimate based on a potential combined open pit and underground mining scenario. The deposit, which is hosted within two well-defined breccia pipes, was estimated to contain 968,000 tonnes of graphitic carbon in the indicated category and 445,000 tonnes in the inferred category. Therefore, the abundance and high-quality nature of the deposit gives the Albany project ‘enormous potential’ in the eyes of Dube. However, it is the style of mineralisation at the deposit that is generating the most excitement rather than the scale of mineralisation, as proven by Tokyo Tech’s recent comparative research. Even when other natural graphite was milled down to a similar size to the Albany graphite, it didn’t perform as well, with problems such as agglomeration emerging from the testing. This research goes a long way to supporting Zenyatta’s claim that its graphite is the best in the world for processing into graphene.

Research on graphene applications

As of last year, there were over 25,000 graphene patent applications across myriad industries, from energy storage to electronics, composites, infrastructure, aerospace, biomedical and more.

In total, Zenyatta is currently working with eight Canadian universities on multiple research projects for graphene applications, and this academic inquiry has been heavily supported by the Canadian government. “The Government of Canada, through the National Research Council, has identified graphene as a key nanomaterial for the

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future of Canada. As a result, they have poured significant funding to help us conduct this research through the universities. We are very happy that the government has the foresight of knowing the value that graphene can bring to our economy down the road,â&#x20AC;? says Dube.

Zenyatta also recently attended the Global Graphene Expo in Austin, Texas and Dube came away from the exhibition amazed by the many novel potential uses of graphene. For instance, Ford Motors will introduce two 2019 models that have incorporated graphene as a sound barrier to reduce noise. â&#x20AC;&#x153;Based on what I saw at the Expo, the

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amount of innovation that is taking place using graphene material and the fact that companies like Ford are moving forward with products are great signs for industry growth. “We also recently announced a new research partnership with DLR - the German Aerospace Centre. They are looking at multiple applications in the graphene market.

“Now you are starting to witness multinationals and highly capitalised companies realising the potential applications of graphene and starting to put money into this research. It’s just a question of time from our perspective, before some of these applications begin to take hold across global markets.”

ResourceGlobal GlobalNetwork Network 167 Resource in the graphene market after a new businessfocused board was elected in May 2018. These boardroom changes will be reflected in an imminent company name change to ZEN Graphene Solutions. “We have a new direction and our new name reflects where we want to go,” declares Dube. Zenyatta will soon start an environmental baseline study for its Albany Graphite Deposit, a mandatory part of any mining project in Canada. This environmental assessment will pave the way towards the commencing of mining operations, making now a very exciting time for all involved at Zenyatta. At the start of next year, the company will also begin a significant bulk sample programme that will collect up to 990 tonnes of mineralised material from the property. These high-quality graphite samples will then be prepared for processing into graphene material. “We’ve got a very large resource. We could supply 25,000 tonnes of graphene for the next 30 years or more.

A new name for a new direction

“But, as a leading graphene solutions company, it’s not just about the quality of our resource. We are also focusing on graphene applications and strengthening the intellectual property that we are codeveloping with our university collaborators and end user partners.”

The company is now better placed to capitalise on these commercial opportunities

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MINING | NuLegacy Gold

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NULEGACY GOLD CORPORATION

Junior betting big in Nevada - the home of US gold production

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The last decade has not been an easy period for junior gold explorers listed across global capital markets. The global financial crisis of 2008-09 rattled investor confidence across all industries not just mining, but the resources sector was knocked down once again by an intense bear market that began in 2012, hitting precious metals stocks particularly hard. While many junior explorers saw their stocks collapse in the years after this, often to the point of no return, NuLegacy Gold Corp came into a brief countertrend rally in 2016 and took this opportunity to raise funds on three occasions for exploration at its Red Hill property in Nevada. Looking back, CEO James Anderson thinks that decision looks like wisdom now. Anderson pinpoints 2016 as the end of the bear market in the commodities sector and also highlights the year as a crucial turning point in the development of NuLegacy. In February 2016, he and the company’s chairman (and astute negotiator) Albert Matter secured a 100% working interest in the 98 km² Red Hill Project, located the Cortez Trend – a ‘cousin’ of Nevada’s legendary Carlin Trend, home to the second largest known gold resources in the world.

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MINING | NuLegacy Gold “There is no other junior company that can boast our land package in the Cortez area of Nevada,” says Anderson. NuLegacy’s corporate leadership duo have been business partners in the mining industry for several years, and in 2016 they were able to capitalise on the bear market with a strategy that Matter affectionately calls ‘rummaging around in the trash can of the majors’. One such major with a commanding position in the Cortez Trend is Barrick Gold Corp, the world’s largest gold mining company. Barrick owns three mega deposits in the trend including Goldrush, an enormous 10 million ounces (Moz) resource that Anderson believes is the world’s best gold discovery made in the last decade. However, Barrick had its own financial problems during the commodity price downturn which led to the miner making the decision not to pursue exploration at the Red Hill deposit. This allowed NuLegacy’s corporate leadership the opportunity to broker a deal for 100% ownership of the project. “You always have to look at the good parts of a downturn in the market, and the good part is that we’ve managed to secure a 100% interest in this project that I don’t think that could’ve been done in a good market.”

Gold standard shareholders

The other important development for NuLegacy in 2016 was the arrival of OceanaGold as a strategic partner and major shareholder in the company. “OceanaGold

have been extremely important shareholders from the get-go. “They take a very active interest in what we are doing and offer suggestions about where we might want to spend our money.” NuLegacy’s other major shareholder is Barrick, who along with OceanaGold, comprise a world-class ownership base with unrivalled expertise in the gold sector. Following the successful corporate manoeuvring of 2016, the company has since been able to focus on exploring its land position in the highly mineralised Cortez Trend. The Red Hill Project is located just 8 km from the Goldrush development and on strike with two other Barrick deposits in the 10-20 Moz range. Therefore, NuLegacy’s strategy has always been to try and unearth a Carlin-type elephant deposit in its large land position in the Cortez Trend, which is entirely feasible at Red Hill given its proximity to existing major deposits in the region. “We are not just close to the Goldrush deposit, we are now drilling holes and finding gold in an area that has the same stratigraphic units, and the same controls of mineralisation,” Anderson reveals. “Quite frankly, we also have a lot of people embedded in our company that previously worked at the Goldrush deposit with Barrick, either at the directorial level or on a day-today exploration basis.” Three of NuLegacy’s current directors are senior ex-Barrick people including Alex Davidson, who was head of global exploration for many years and is now

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chairman of American Silver Corp. Davidson is joined by Alan Hill, another well-known former Barrick man who built many of the company’s mines around the world and is currently chairman of West Africa-focused Teranga Gold.

Charles Weakly is another ‘terrific geologist’ who made his name with Barrick at the Goldrush deposit. “Having folks like Charles and Derek working for us is really excellent,” declares Anderson.

With top quality teams in place from corporate level down to the geotechnical “Edward Cope is a name that market observers might know less than the other two staff, NuLegacy commenced a major exploration campaign in 2016 at the Red Hill gentlemen. Ed was head of North American Project, initially spending time on the central exploration for Barrick for many years and and North zones of the Iceberg deposit. joined our board around 18 months ago. He is now also taking a more active managerial role, after we gave him the title of director of evaluations & acquisitions.” Initial drilling from Iceberg provided solid results - if not spectacular - in the honest The exploration team is also stacked with words of Anderson. However, the company’s geologists possessing unrivalled experience more recent activity at the newly discovered in the Cortez Trend. Chief geologist Derek Serena deposit has provided much more Unger is responsible for directing all phases exciting returns. of exploration at Red Hill, having worked in

An Iceberg in Nevada

the region with Newmont Mining for many years.

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“The very first drill hole at Serena was 50 metres of 1 g/t, oxidised and fairly near surface. It was about 375 metres out from known mineralisation at the time, so it was a pretty daring step out. We spent most of last year filling in the gaps between the Serena Zone and the North Iceberg Zone. Since that discovery hole was drilled in 2017, the results from subsequent campaigns have continued to improve, culminating in two outstanding holes that were drilled earlier this year called Serena 18-01 and 18-02. Serena 18-01 returned 51 metres of 1.5 g/t, but within that was a high grade area of 15 metres at 3.25 g/t. Meanwhile, Serena 1802 found 22 metres of 6.6 g/t, including an incredibly mineralised zone of 8.7 metres at nearly 17 g/t of gold. “When you see these results in those Carlintype systems, its very important. There are many Carlin systems that are big envelopes

of low grade mineralisation that never exhibit that kind of grade. “When you do find this type of grade you know you are in a very powerful, robust system. It also helps us to have confidence that we do have a realistic chance of drilling into another Goldrush deposit, which is the analogy for what we are drilling into here.” Recent results from the Serena deposit have served to whip up growing excitement amongst the ranks at NuLegacy, particularly when they are likened to exploration results from the nearby Goldrush deposit by a man who played a key role in Barrick’s discovery of the 10Moz resource. “Ed Cope was part of the team that was given the Thayer Lindsley award at the PDAC convention in 2014 for the discovery of Goldrush. He is an expert in this type of deposit and points out all the time that when

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“There is no other junior company that can boast our land package in the Cortez trend of Nevada” James Anderson, CEO and director, NuLegacy Gold Corp you are getting up to 17 g/t of gold over these broader widths, it is very important.” However, Anderson does point out that this type of geological system is highly complex, and striking mineralisation is by no means assured with every hole. “We just have to keep on going to try and figure out where there is going to be more of those higher grades.

“Through a series of normal and thrust faulting, the stratigraphy is chopped up, so put simply we will get misses in very close proximity to some of the ore.” One of the challenges of working with Carlin-type systems is simply finding the capital that is necessary to fully scope out these vast deposits. This explains why gold production in Nevada – where 80% of gold in the US is produced – is dominated by highly capitalised majors such as Barrick and Newmont. It also makes NuLegacy’s work at the Red Hill Project all the more impressive. Throughout the drilling campaigns of the last two years, the company has called on four reliable drilling contractors. Boart Longyear and Envirotech have been the designated RC drillers, while TonaTec and

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Fred Anderson Drilling have conducted core drilling. Anderson describes the ongoing work of all four companies as ‘excellent’.

Attracting a major

NuLegacy will continue to explore around the Iceberg and Serena zones of the Red Hill Project, with the end goal to attract a major mining company to take it through to production. This potential buyer could well be one of its two major shareholders OceanaGold and Barrick, or a third party that is interested in staking a claim in one of the best gold mining regions in the world.

show them that NuLegacy has done enough exploration to justify them taking these various deposits into production.” After delivering some of the best drill results that the Red Hill project has ever seen during this year, the NuLegacy team is very excited about the company’s prospects heading into 2019. But, before the year is out, it is hoped that 10 additional drill holes will further build on the feeling that NuLegacy is sitting on another +10Moz gold deposit in the Cortez Trend of Nevada.

“As the gold equity market accelerates, we will see more M&A activity. So, there will be triggers for interested companies if we can

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APPOINTMENTS & EVENTS

APPOINTMENTS Armand Lumens to join Neptune Energy as CFO

Independent oil and gas producer Neptune Energy has appointed Armand Lumens as its new chief financial officer, replacing current CFO Peter Thomas in December. Lumens recently stepped down from the head of finance role at agricultural goods giant Louis Dreyfus, and has previously worked at Royal Dutch Shell. “I’m delighted that Armand is joining the Neptune management team. His deep knowledge and experience of energy and capital markets further strengthens the team,” said executive chairman Sam Laidlaw.

Petra Diamonds hires two new non-executive directors UK-based Petra Diamonds has appointed Bernard Pryor and Varda Shine as non-executive directors, effective on January 1st 2019. Pryor has been chairman of MC Mining since 2014 and Shine has been a non-executive director at platinum group metals producer Lonmin for the last three years. Petra said the appointments were made in line with its three-year succession plan, which aims to focus the company on steady-state operations after a period of increased capital expenditure and expansion.

Guy Madgwick to head up Red Rock Power

Red Rock Power, the Edinburgh subsidiary and European headquarters of Chinese firm SDIC Power, has chosen Guy Madgwick as its new chief executive. Madgwick has over 30 years of experience working within the European energy industry and will be responsible for steering the developer’s growth following a successful 2018. He was a geologist within the oil and gas industry before moving into the power sector and has championed renewables and sustainability for the last 15 years.

Silver Bear Resources appoints Vadim Ilchuk as president and CEO TSX-listed junior miner Silver Bear Resources has handed the reigns of the company to experienced international mining executive Vadim Ilchuk. Ilchuck has been promoted to the role of president and CEO after the resignation of Graham Hill, after previously serving as CFO for Silver Bear. He will lead the company through its next phase as a silver producer following the successful development of the Mangazeisky mine in Russia. Departing on August 31, Dushnisky will be replaced by one of the firm’s non-executive directors, Rachel English, on an interim basis.

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EVENTS

Our pick of the top mining, oil & gas and renewable energy events happening around the world in the months to come

Mines and Money November 26-29 London UK Advanced Nano and Energy Metals (ANEM) December 12-14 Perth Australia LNG Bunkering Summit January 29-31 Amsterdam Netherlands Investing in African Mining Indaba February 4-7 2019 Cape Town South Africa AWEA Wind Power May 20-23 Houston US

Want to promote your resources event? Email the editor at editorial@resourceglobalnetwork.com

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