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February 2017

INNOVATIVE

ONTARIO

HOW R&D WILL CHANGE MINING

Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240

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CANADIAN Mining Journal

FEBRUARY 2017 VOL. 138, NO. 02

www.canadianminingjournal.com

FEATURES TOP 10 MINE BUILDERS 28 A list of the top 10 most important mine builders in Canada’s history: men who have opened up remote regions to development, built corporate empires and enriched the nation all at the same time.

MINING IN ONTARIO 10 An aggressive exploration plan has transformed Richmont

Gold’s Island Gold mine and boosted production. Now the company’s planning for the next phase of growth.

28

16 Noront Resources has big plans for its Eagle’s Nest and other properties in the Ring of Fire. But first, it needs the province to deliver on a key piece of infrastructure: a road.

20 A look at current R&D work in Ontario that will make mining

safer, more productive and efficient, and lower its impact on the environment.

26 Ontario Mining Association President Chris Hodgson shares the findings of the OMA’s 2016 Economic Report.

BLASTING

20

40 Research from Allied Market Research outlines expected

growth in the industrial explosives market, which is dominated by mining.

42 Dyno Nobel marks 150 years since the invention of dynamite by Alfred Nobel.

DEPARTMENTS 5 EDITORIAL | Interim Editor Marilyn Scales highlights Canada’s mining history in honour of the nation’s 150th birthday.

6 FIRST NATIONS | AFN Ontario Chief Isadore Day calls for true partnership between industry, government and First Nations.

8 IN MY MINE(D) | Recent research by Engineers Without Borders

and the Canadian Council for Aboriginal Business bolsters the case for mining companies to step up procurement from aboriginal businesses.

43 UNEARTHING TRENDS | Michael Sabatino and Rabinder Sihota of EY’s tax services practice outline how the Extractive Sector Transparency Measures Act will affect miners.

44 LAW | Jennifer Nyland and Laura Duke of Lawson Lundell explain how a recent court decision clarifies when an environmental assessment is required for a B.C. resource project.

46 CSR & MINING | Michael Torrance of Norton Rose Fulbright

highlights best practices for procurement of goods and services from aboriginal businesses, as outlined in a recent report.

FEBRUARY 2017

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40 ABOUT THE COVER

This month’s cover provided by Hard-Line. Coming in April Canadian Mining Journal looks at the quarry and aggregates industry in Canada, plus a feature report on material handling.

For More Information

Please visit www.canadianminingjournal.com for regular updates on what’s happening with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com

CANADIAN MINING JOURNAL

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CANADIAN Mining Journal

FROM THE EDITOR

February 2017 Vol. 138 — No. 2 38 Lesmill Rd. Unit 2, Toronto, Ontario M3B 2T5 Tel. (416) 510-6789 Fax (416) 510-5138 www.canadianminingjournal.com

Interim Editor Marilyn Scales 613-270-0213 mscales@canadianminingjournal.com Production Manager Jessica Jubb jjubb@glacierbizinfo.com Circulation Manager Cindi Holder 416-510-6789, ext. 43544 cholder@glacierbizinfo.com Publisher & Sales Robert Seagraves 416-510-6891 rseagraves@canadianminingjournal.com Sales Western Canada, Western U.S.A. and Quebec Joelle Glasroth 416-510-5104 jglasroth@canadianminingjournal.com Toll Free Canada & U.S.A.: 1-888-502-3456 ext 2 or 43734 Group Publisher Anthony Vaccaro

Established 1882

Canadian Mining Journal provides articles and information of practical use to those who work in the technical, administrative

and supervisory aspects of exploration, mining and processing in the Canadian mineral exploration and mining industry. Canadian Mining Journal (ISSN 0008-4492) is published 10 times a year by BIG L.P. Mining. BIG is located at 38 Lesmill Rd., Unit 2. Toronto, ON, M3B 2T5. Phone (416) 510-6891. Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved. The contents of this magazine are protected by copyright and may be used only for your personal noncommercial purposes. All other rights are reserved and commercial use is prohibited. To make use of any of this material you must first obtain the permission of the owner of the copyright. For further information please contact Robert Seagraves at 416-510-6891. Subscriptions – Canada: $51.95 per year; $81.50 for two years. USA: US$64.95 per year. Foreign: US$77.95 per year. Single copies: Canada $10; USA and foreign: US$10. Canadian subscribers must add HST and Provincial tax where necessary. HST registration # 809744071RT001. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-888-502-3456 ext 2; Fax: 416-447-7658; E-mail: cholder@glacierbizinfo.com Mail to: Cindi Holder, BIG Mining LP, 38 Lesmill Rd, Unit 2, Toronto. ON, M3B 2T5. We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund toward our editorial costs.

FEBRUARY 2017

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Proud mining sector for a strong nation Marilyn Scales

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anada is celebrating the 150th anniversary of Confederation. In 1867 the founding fathers met in Charlottetown built the foundation of a nation truly “strong and free”. They did a very good job, too. We can savour their hard work as we join in various celebrations around the country. One of the reasons to be proud of Canada is its vast storehouse of natural resources and the men and enterprises that put us among the world’s premier mineral producers – gold, uranium, potash, base metals, diamonds, and the metals of the future. Our mineral legacy has also given rise to some of the world’s best technology for finding, mining and processing those riches. Let’s take a look at the first person to be caught up in our mineral wealth. While Martin Frobisher searched for the Northwest Passage, he ballasted his ships with shiny yellow rocks. What he thought would be his fortune was pyrite, not gold, and his mistake was not pointed out until he had made another voyage and collected even more rocks. The lesson is: Never send a ship captain to do a geologist’s job. French king Louis XIV granted what are probably the first mineral concessions on Cape Breton Island to Nicolas Denys who discovered coal there in 1672. For the next 200 years mining was small scale, done to meet local needs. The turning point came in the 1870s as mining began to see significant development. Not coincidentally the Geological Survey of Canada was created in 1877. That expertise gave the Canadian hunt for minerals the backbone of its success. The next 100 years saw an accelerated pace of discovery. Nickel and copper were uncovered in Sudbury, Ont. (1883). Lead and zinc were found leading to the Sullivan mine and town of Kimberley, B.C. (1893). Asbestos was found in the Eastern Townships of Quebec and first milled in 1888. The Klondike gold rush (1896) brought fortune hunters to the North. Gold was discovered at Porcupine (1909) and Kirkland Lake, Ont. (1911). The copper and zinc deposits at Flin Flon, Man. (1915) were found. Gold was discovered at Rouyn-Noranda and Val d’Or, Que., as was copper (1920s). The Sherritt-Gordon deposit was staked in Manitoba (1923). Gold was discovered in Red Lake, Ont. (1925). The first aluminum was produced in Arvida, Que. (1926). The merger of Mond and International Nickel (1928) created what was to become a true global powerhouse, Inco Ltd. (sadly now in foreign hands). The great Porcupine fire destroyed the Dome gold mine (1929). The decade also saw the first coal mine in southeastern British Columbia. The Great Depression of the 1930s did little to slow mine building in Canada. Radium was found at

Great Bear Lake and gold at Yellowknife, N.W.T. Silver-radium ore was discovered at Great Bear Lake. Both Falconbridge and Inco blew in new smelters near Sudbury (1930). Milling began at the Macassa gold mine in Kirkland Lake (1933). The first commercial shipment of lithium was made from the Pointe du Bois district of Manitoba. The mining industry, particularly gold, suffered from a severe shortage of labour during the Second World War. Then mining expanded as demand grew during peacetime, and the United States became the largest consumer of base metals and iron ore from Canada. Copper mining took hold at Murdochville, Que. Iron ore was discovered at Atikokan, Ont., and nickel in Thompson, Man. Thanks to the Cold War, Elliot Lake, Ont., became the Free World’s leading uranium producer. The 1960s saw another boom in mine discovery. Lead and zinc were found at Pine Point, N.W.T. Copper deposits were unearthed in the Highland Valley of B.C. The deposit that became the Brunswick No.12 mine at Bathurst, N.B., was discovered. Iron ore was found in the Labrador Trough. Syncrude began mining the first bitumen from the oil sands near Fort McMurray, Alta. (1967). The short-lived Rankin Inlet nickel mine became Canada’s first mine in the Arctic. The ’70s and ’80s saw mine start-ups across the country. The Polaris zinc-lead mine on Little Cornwallis Island. The Bullmoose and Quintette coal mines in northeast British Columbia. The potash mines of Sasktchewan plus new ones opened in New Brunswick made Canada in the 1990s the world’s No.1 producer. And let’s not forget the first diamond mine – Ekati in N.W.T. – that began production in 1998. The coming of the 21st century saw both highs and lows for our miners, as some of our most iconic companies were taken over by foreign interests. Then in 2008, the world’s financial markets collapsed taking with them commodity prices. It’s a situation from which the mining sector is now beginning to recuperate, although unevenly. So there you have a quick version of some highlights from Canadian mining history. Now turn to page 28 and read Stan Sudol’s list of the Top 10 Canadian Mining Men. Dissenting opinions are welcome. These are some of the people who grew not only an industry but a country into today’s prosperous, 150-year-old Canada. True North, forever! CMJ CANADIAN MINING JOURNAL

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FIRST NATIONS

The reciprocal benefits of sharing the lands and wealth with First Nations communities By Isadore Day, AFN Ontario Regional Chief

I

n a year when many Canadians are expected to celebrate the 150th anniversary of this country, far too many First Nations struggle to celebrate life. As chair of the AFN Chiefs Committee on Health and Regional Chief of Ontario, I remain ready and committed to do my part to support all of our First Nations across the country. The mental and physical health of First Nations people is linked to land. This is a well-established fact. Creating healthy and sustainable communities by sharing the land and wealth has benefits for both First Nations communities and those in the extraction industry. We already have a shining example of what results from resource revenue sharing being utilized as a key component in eliminating poverty, a main factor in the detriment of First Nations’ health.

FIRST NATIONS INVOLVEMENT IN EXTRACTION PROJECTS PROVIDES THE BENEFITS TO INDUSTRY OF HISTORICAL AND CURRENT LOCAL KNOWLEDGE, LOCAL LABOUR FORCES, AND FORMAL PARTNERSHIP OPPORTUNITIES. The longest running resource revenue sharing agreement in Canada between the province of Quebec and the James Bay Cree, was first signed in 1975 and renegotiated in 2002 as the Paix des Braves Agreement. Between 1975 and 2025 it is estimated that the Quebec Cree will receive as much as $5 billion in revenue. As a result, the Cree enjoy a high level of prosperity through subsidiary companies such as CREECO and organizations like the Cree Mineral Exploration Board. First Nations involvement in extraction projects provides the benefits to industry of historical and current local knowledge, local labour forces, and formal partnership opportunities. This, in turn, creates certainty for shareholders, improves both the corporate and industry image, and mitigates the risk of legal 6|

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trouble or open confrontations for companies who do not actively engage local First Nations communities. In contrast, when First Nations communities are not seen as full partners, we end up with devastating situations such as that felt on the Ontario side of James Bay, as Attawapiskat continues to struggle with poverty and a persistent suicide crises, with limited economic partnership with De Beers. Historically, when the development of a geographic area has the ability to completely alter the landscape and this has been imposed on First Nations, such as with mining or deforestation, the measures of expropriation and impacts of exploitation have been devastating at the community level. The communities remain in and live off of these lands long after development has been completed by industry. Proponents of a resource development that is being proposed, implemented or remediated in First Nation territories in Canada must be aware of these realities. The cost of mitigating residential school realities as directly connected to land policies in Canada must be factored into the cost of doing business with the First Nation rights holders. This is a jurisdictional reality currently being voiced by the majority of First Nation leaders. Today is the day that we reframe the conversation from engagement with First Nations as ‘a tick off of the to-do list’ and consider the reciprocal benefits of engaging local First Nations as full partners, with more irons in the fire than industry. The clock is now ticking. Let’s make 2017 the year in which industry, government, and First Nations come to the table shoulder-to-shoulder, sharing in the reciprocal benefits of full CMJ partnership. ISADORE DAY, Wiindawtegowinini, is Assembly of First Nations Ontario Regional Chief. WWW.CANADIANMININGJOURNAL.COM

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IN MY MINE(D)

Partnerships in procurement – aboriginal businesses operating in Canada’s mining sector By Max Skudra and Jeff Geipel

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or aboriginal communities across Canada, procurement of local goods and services by mining companies is a central driver of business development creates local jobs and contributes to local prosperity. Today, companies across Canada are increasingly recognizing that developing partnerships with aboriginal communities is a business strategy that mitigates social risk and improves long-term operational security. The Mining Shared Value (MSV) venture of Engineers Without Borders Canada partnered with the Canadian Council for Aboriginal Business (CCAB) to conduct national research to investigate the economic and social impacts of procurement from aboriginal suppliers and to further develop the business case for mining companies to procure goods and services from aboriginal businesses. The Trudeau government has pledged to invest $8.4 billion over five years to improve the socio-economic conditions in indigenous communities. Of that, $96 million will support indigenous organizations to increase their capacity to effectively engage with the Canadian government. Unfortunately, Maclean’s magazine’s recent report card on the Trudeau government’s first year in power gave failing grades in its resource development engagement practices. Indigenous chiefs and communities have said the time for declarations and promises is over, and action must now be taken. Canadians know that natural resource development cannot continue to proceed along this fractious, antagonistic path. If the federal government is going to actually reconcile the relationship, indigenous peoples, industry and governments must align their efforts and pursue economic development opportunities together. The convergence of indigenous actions, public attention, legal rulings and political policy is spurring corporate leaders to improve practices in Canada’s mining industry. This new direction for the sector is helping to drive economic reconciliation with indigenous people in Canada. This study documents the current challenges the mining sector is facing as companies aim to improve engagement and offers several recommendations for government, industry and aboriginal community stakeholders to improve co-ordination, communication and partnerships. Where reconciliation can become reality is in the current and future potential of the indigenous economy, today estimated to be $30 billion. The number of aboriginal people under 25 years of age is more than 1.5 times the Canadian average and it is estimated that closing education and training gaps could contribute $400 billion to the GDP by 2026. If the Mining Industry Human Resource Council estimates are correct and the natural resources sector will have a labour force deficit of more than 125,000 peo8|

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ple, the mining industry is well positioned to be a leader in economic reconciliation, progressive indigenous business engagement and community development, if the conditions are right. The aim of this research was to investigate current and best practices for harnessing the potential of procurement contracts within large mining operations for aboriginal business people and aboriginal economic development corporations (AEDCs). The study recommends the creation of a national strategy aligning federal, provincial and industry training programs, as well as for industry to make public targets and report progress on aboriginal supplier engagement. As procurement contracts are often the first foothold in the door for aboriginal businesses, the study recommends that industry associations such as the Mining Association of Canada include aboriginal procurement content in their guidance for industry. Currently, there are an estimated 222 aboriginal businesses supplying the extractive industry in Canada. In the past year, 75% of all aboriginal businesses supplied goods to the private sector. For mining, aboriginal suppliers provide exploration, drilling, camp and environmental monitoring services. Our research shows that mining companies are designing their engagement with aboriginal suppliers in diverse ways. Eight of the 11 mining operations interviewed used frameworks or models to conceptualize their aboriginal engagement, and 64% said they had an active aboriginal supplier directory to guide contracting. Hard targets for procurement contracts were not common across the country. Companies generally prefer instead to have ‘set-asides’ or sole-sourcing agreements for aboriginal suppliers that are agreed upon in impact and benefit agreements (IBA) or other contractual arrangements. The business case for procuring goods and services from aboriginal suppliers can be framed in terms of both obtaining a social licence to operate and building a reliable, efficient supply chain for operations. Prioritizing supply contracts with aboriginal communities is a powerful tool to improve relationships and gain local support. Partnerships demonstrate a willingness to work together and compromise, which helps prevent conflict and creates a more productive operating environment. Positive relationships with local communities also demonstrate responsible corporate behaviour and can improve a company’s CMJ reputation. MAX SKUDRA is the director of research and government relations, Canadian Council for Aboriginal Business. JEFF GEIPEL is the venture Lead for the Mining Shared Value program, Engineers Without Borders. WWW.CANADIANMININGJOURNAL.COM

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ISLAND G

Photo: Richmont Mines

RICH WITH POTENTIAL

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WWW.CANADIANMININGJOURNAL.COM

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D GOLD Richmont turns steady producer into shining star

By D’Arcy Jenish

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or three decades, from 1981 till 2011, Richmont Mines of Rouyn-Noranda, Que., ticked along as a sleepy, conservatively managed operator of shallow, but short-lived underground gold mines – two in Newfoundland, four in Quebec and, most recently, the Island Gold mine in Dubreauville, Ont., 83 km northeast of Wawa. Richmont may well have continued on the same course but for the arrival in 2012 of new investors, a change in senior management and a major discovery at Island Gold that has the company poised for a growth spurt that could catapult it into the ranks of mid-tier producers. CONTINUED ON PAGE 12

The Island Gold mine, near Wawa, Ont., is finally giving up high grades and fuelling Richmont Mines’ growth

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Photos: Richmont Mines

Underground surveying at the Island Gold mine.

Above left: Grades between 20 and 30 g/t gold are often drilled at Island Gold. Right: Visible gold.

“Island Gold is a transformational asset,” says Renaud Adams, president and CEO. “It’s very exciting. Our objective is to grow the reserve base and at the same time we’re accelerating development and positioning the mine for growth.” Richmont was founded by Jean-Guy Rivard, an insurance broker turned real estate investor turned miner. He sur12 |

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rounded himself with highly qualified professionals, but maintained a tight rein, especially on the financial side of the operation. “His business model was based on strong expertise in underground mining, maintaining a tight capital structure and no debt,” says Adams. “They acquired small mines and tried to stretch the life of them.

They took a very disciplined approach, but that did not create growth.” In 2003, Richmont made its first foray into Ontario by investing $1 million to acquire a stake in the Island Gold property and the nearby but defunct Kremzar mine and mill from then owner Patricia Mining of Toronto. By 2005, Richmont had invested $12.6 million into Island Gold, WWW.CANADIANMININGJOURNAL.COM

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Initially, Island Gold was a low grade, underground mine and truly nobody had a clue that it would become what it is today. which raised its stake in the property to 55%, and it had taken over as operator. Two years later, in October 2007, the partners put the mine into production and the following November Richmont acquired the outstanding shares of Patricia Mining and became sole owner of Island Gold. At the time of the takeover, proven and probable reserves stood at 1.05 million tonnes, which would yield an estimated 286,000 oz. of gold, sufficient for a mine life about four years. The elder Rivard died in March 2009 and his son Martin succeeded him as president and chief executive officer. But three years later he announced his resignation, effective in August 2012, and the installation of new management led to significant changes for the company and Island Gold.

Under the previous management regime, mining was taking place from surface to a depth of 400 metres and, most years, the Island Gold operation was losing money or turning a small profit. The new team launched an aggressive exploration program and to date have completed nearly 42,000 metres of exploratory and delineation drilling. That led to the transformational discovery of deposits hosting as much as a million ounces of gold at depths of 400 to 1,000 metres – and the deposits are open at depth. “Initially, Island Gold was a low-grade, underground mine and truly nobody had a clue that it would become what it is today,” says Adams. The discovery of such a significant new resource has made it necessary to expand

Renaud Adams

the underground infrastructure in order to continue exploring and to increase production. The company has extended the ramp from 400 metres down to 860 metres and financed the work by issuing shares in 2015 and 2016 that led to a 25% dilution. Production from the mine has trended steadily upward – from 40,000 oz. in 2014 to 55,000 oz. in 2015 and 80,000 oz. last year. The company is currently only mining to a depth of 740 metres, but plans to begin extracting ore from depths of 850 metres this year. CONTINUED ON PAGE 14

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Photos: Richmont Mines

Longitudinal view of underground exploration at Island Gold.

Growing for gold Adams and his team have now set their sights on boosting production to 100,000 oz. per year and eventually as high as 150,000 oz. a year, but that means they need to increase their milling capacity. Since the mine was put into production in 2007, the company has been processing

Visible gold in the drill core.

ore at the Kremzar mine mill, which was built in the late 1980s and was designed to handle 850 tonnes of ore per day. Richmont has typically been processing 900 t/d and, on occasion, has put through 1,000 t/d. However, in order to boost production to 100,000 oz. per year the company need to expand the capacity of the

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mill to 1,100 t/d – an expansion that will cost an estimated $15 million. Richmont may have to raise that money publicly and management is currently preparing a preliminary economic assessment (PEA), which it plans to release it in the first half of this year. It will contain updated reserve and resource estimates and will outline plans to expand the mill and to extend the ramp to 1,000 metres below surface. All of this, Adams says, is merely phase one of an ambitious development and expansion plan that will see Richmont mining at 1,000 metres and processing up to 1,200 tonnes of ore per day while maintaining sufficient reserves to ensure a sevenyear life of mine. Phase two will involve further exploration to extend the resource to a depth of 1,500 metres, at which point the company may have to sink a shaft rather than extending the ramp. Furthermore, Adams sees the developments at Island Gold as first steps in the opening of a new Ontario gold camp that could be creating jobs and producing profits for years to come. Richmont alone holds the rights to 77 sq. km of land around the Island Gold Mine. “Quite frankly, we’ve been drilling within two square kilometres of the mine since 2011,” says Adams. “We have nine very specific targets identified just within a seven kilometer radius of the mine. With 77 kilometres, we can drill for years to come. “I really see this whole camp in years to come being more focused on exploration and better understanding of the geology,” he adds. “It’s pretty much virgin territory CMJ in terms of deep exploration.” WWW.CANADIANMININGJOURNAL.COM

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ROAD TO THE RING OF FIRE

Noront is eager to begin development at Eagle’s Nest, the first of many mines

By Marilyn Scales

S

pirits were high in March 2015 when the Ontario government announced at the PDAC it was moving forward with an allweather road into the Ring of Fire. Here we are almost two years later, and what do we have for the more than $750,000 in tax dollars that were spent? The answer: Not much. The province has consulted with various First Nations who would welcome a road. It has yet to announce a plan, route or schedule for construction. Seeing the politicians make a decision and actually build a road is the one thing Alan Coutts, president and CEO of Noront Resources, says is vital to get the Eagle’s Nest nickel-copper-platinum-palladium development under way. The company discovered 16 |

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the deposit in 2007 and sparked a staking rush that made the Ring of Fire the most written about new camp since Hemlo. The Ring of Fire lies about 500 km northeast of Thunder Bay, Ont. The area is centred on McFaulds Lake on the edge of the James Bay Lowlands. As many as nine First Nations may be impacted by mineral development, making consultation complex. Noront has taken care to engage the nearby communities in consultation and planning. Its programs are some of the best. The company meets regularly with First Nations chiefs and their councils. Town hall meetings and open houses are held frequently. All written communication is supplied in English, Ojicree, Cree and French. The company has established an aboriginal training alliance with the Matawa

First Nations’ Kiikenomaga Kikenjigewen Employment and Training Services and Confederation College of Applied Arts and Technology in Thunder Bay. The innovative Ring of Fire Aboriginal Training Alliance (RoFATA) provides skillsbased instruction and guidance. The effort is working. About 60% of the workforce at Eagle’s Nest is from the First Nations. In 2015, Noront received the PDAC’s national environmental and social responsibility award. The recognition was for RoFATA as well as Noront’s support of Mining Matters programs, DAREarts, and the Mining Movie Making Youth Camp. Noront has signed agreements with the Webequie and Marten Falls First Nations, and it is from these communities that many of its employees have been hired. Talks are continuing with other First WWW.CANADIANMININGJOURNAL.COM

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As ice roads become unreliable, the need for an all-weather road to Eagle’s Nest becomes even more important.

In summer the Eskay camp is accessible only by air.

Middle left: Core from the Eagle’s Nest nickel-copper VMS deposit. Middle right: Alan Coutts, president and CEO of Noront Resources. Bottom: Longitudinal view of the chromite deposits found in the Ring of Fire.

Nations in the hope they all will benefit from resource development. Noront’s first find De Beers Canada made the first volcanogenic massive sulphide (VMS) discovery in the area in 2002. A year later six more deposits were found. The first major discovery in the area was made in 2007 by Richard Nemis, who was at that time the president of Noront Resources. He unearthed what is now the Eagle’s Nest deposit, a VMS occurrence enriched with platinum group metals. Eagle’s Nest was not the only deposit drilled in the Ring of Fire. High grade chromite mineralization – Blackbird, Black Thor, Big Daddy and Black Label – were also discovered. Their grades were among the best in the world. And now that the FEBRUARY 2017

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area had a catchy name, it rose to prominence in the collective mind. By the end of 2011, the Ring of Fire was touted as one of the largest potential mineral resources in Ontario, rivalling the Sudbury Basin and Kidd deposits in Timmins. Thirty-five junior companies were active in the area, as was American iron ore behemoth Cliffs Natural Resources. Cliffs abruptly slammed the brakes on its Ring of Fire properties in 2013, after it had already spent $550 million to acquire and explore a large number of claims. The company had a change of management that soon pulled it out of Canada, not only in the Ring of Fire but also its iron ore projects. For Noront, this was the opportunity to expand its holdings in the Ring of Fire. The spunky junior borrowed $20 mil-

lion to buy all of Cliff’s interests in early 2015. The deal included the Black Thor and Black Label chromite deposits, a 70% interest in the Big Daddy chromite deposit (with KWG Resources), and an 85% stake in the McFaulds Lake copper-zinc deposit. Last year Noront acquired 75% of MacDonald Mines Exploration’s interests in the Ring of Fire. The $750,000 all-share transaction includes the Butler VMS and Sanderson ferrogabbro intrusion. Thus bulked up, Noront became the largest landholder in the Ring of Fire. The company holds rights to 357 claims and one lease that total around 810 km2. Plans for Eagle’s Nest The Eagle’s Nest deposit contains proven and probable reserves of 11.1 million tonnes grading 1.68% Ni, 0.87% Cu, 0.87 g/t Pt, 3.09 g/t Pd and 0.18 g/t Au. The deposit also has 9 million inferred tonnes at 1.10% Ni, 1.14% Cu, 1.16 g/t Pt, 3.49 g/t Pd, and 0.3 g/t Au. First up is the underground development of Eagle’s Nest and a 3,000-t/d mill plus surface infrastructure. According to the 2012 feasibility study (that is being updated), the initial capital investment will be $609 million. Construction will take CONTINUED ON PAGE 18

CANADIAN MINING JOURNAL

All images courtesy of Noront Resources

Top: Core from the Blackbird chromite deposit.

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three years, the life of the mine is 11 years. The primary infrastructure need is an allweather road. Coutts is clear that a government decision on a road and its timely start of construction are imperative if Noront is to begin production in 2020. Beyond that, the company will build a storage, handing, and loadout facility at Nakina about 280 km to the south. The Eagle’s Nest deposit is near vertical and narrow, making it well suited to blast hole stoping with cemented backfill. Access will be gained through twin declines from a portal to underground processing facilities. The use of tele-remote equipment and electric trucks will enhance safety as well as reduce fuel and ventilation needs. One notable part of the design is the storage of all tailings underground, which reduces the surface footprint of the project. And by not building a tailings management facility on the surface, the prospect of a dam failure is eliminated. The aggregate for surface construction will be sourced underground from highly competent granodiorite host rock. In this way, there will be enough void spaces underground to store the cemented tails that always increases in volume compared to the ore extracted. The underground mill will be cut out of the same granodiorite rock. It is to be a conventional facility – crushing, grinding, flotation and dewatering – to produce a single concentrate containing nickel, copper and platinum group metals. The concentrate will typically contain 10.2% Ni, 5.7% Cu, 19.0 g/t Pd, 5.0 g/t Pt, 1.0 g/t Au and 13.0 g/t Ag. Crushed ore will feed two separate semi-autogenous grinding (SAG) mills: a 5-by-5-metre one for net-textured ore and a 3.5-by-3.5-metre one for massive ore. Pebbles (oversize) from both SAG will pass through a single cone crusher and return to the net-textured SAG mill. The flotation circuit includes roughers, cleaners, scavengers and recleaners. Fine material from the massive SAG line will be fed to the primary cleaner. The fine product from the net-textured SAG mill will go first to the roughers and then through three stages of scavenging. Underflow from both mills will pass through a regrind ball mill. The concentrate will be drawn from the net-textured scavenger underflow and the primary cleaner. It will be thickened and pumped to the surface for filtering, etc. Tailings will be thickened and filtered 18 |

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MAJOR FINDS IN RING OF FIRE Property

Type

Ownership

Status

Eagle’s Nest

Ni-Cu-PGM

Noront 100%

Feasibility

Blackbird

Chromite

Noront 100%

Defined Resource

Eagle Two (within & to adjacent Blackbird)

Ni-Cu-PGM

Noront 100%

Mineral Occurrence

Black Thor & Black Label

Chromite

Noront 100%

Defined Resource

Big Daddy

Chromite

Noront 70% KWG Resources 30%

Defined Resource

McFaulds 1 and 3

Cu-Zn

Noront 85% KWG Resources 15%

Defined Resource

Butler

Cu-Zn

Noront 75% MacDonald Mines 25%

Mineral Occurrence

5-01 Deposit

Cu-Zn

Metalex Ventures 100%

Mineral Occurrence

Black Horse (Koper Lake)

Chromite

Fancamp Exploration owned; Defined Resource optioned to a joint venture of KWG Resources (80%) and Bold Ventures (20%)

Black Creek

Chromite

Probe Metals 100%

Defined Resource

MacFadyen

Kimberlite

KWG Resources 70% Noront 30%

Mineral Occurrence

Kyle

Kimberlite

Noront 50% KWG Resources 50%

Blue Jay (AT12)

Ni-Cu-PGM

Noront 100%

Mineral Occurrence

Triple J

Gold

Noront 100%

Mineral Occurrence

Thunderbird

Fe-Ti-V

Noront 100%

Mineral Occurrence

underground before being pumped to the backfill plant. Part of the concentrate and tailings thickener overflows will feed the effluent treatment plant before being recycled as process water. No process water will be returned to the environment. Plans for Blackbird The next deposit on Noront’s to-do list is the Blackbird chromite deposit. Here, the aim is to start small by developing the mine and a 200,000 t/y ferrochrome plant. Only about 500,000 tonnes of ore annually will need to be mined from Blackbird, making the plan what Coutts called an “entry level project.” The Blackbird deposit is only about 1 km from Eagle’s Nest, and the two mines could share both underground and surface infrastructure. Blackbird contains measured and indicated resources of 20.5 million tonnes averaging 35.76% Cr2O3 with a chrome-toiron ratio of 1:1.97. The inferred resource may contain another 23.5 million tonnes grading 33.14%. The deposit is open both

along strike and at depth. Noront believes a high grade concentrate – in excess of 50% Cr2O3 – could be made. North American consumption of ferrochrome is about 400,000 t/y, and there are no producers on the continent. Noront’s 61% Cr product would probably sell for 25% or 30% less than imported material. Noront’s land position in the Ring of Fire means that Eagle’s Nest and Blackbird are only the beginning. Further in the future are the Black Thor, Black Label and Big Daddy chromite deposits. There is another nickelcopper-PGM deposit, AT-12, and two copper-zinc deposits, Butler and McFaulds. The company holds two properties, Kyle and MacFayden, that are prospective for diamonds. There is gold at the Triple J deposit (perhaps the first of many gold finds). And there is the Thunderbird titanium-vanadium deposit. Given the complex and very promising geology of the Ring of Fire, Noront is likely to become a very well known, and long lived enterprise. CMJ WWW.CANADIANMININGJOURNAL.COM

2017-02-03 11:42 AM


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1/26/2017 12:00:22 PM 2017-02-03 10:45 AM


PUSHING

BOUNDARIES

A snapshot of mining R&D activity in Ontario

A

s part of its “Innovation Agenda” the federal government announced last year that it would invest $800 million over four years to support research and innovation in five key sectors of Canada’s economy. The identity of those sectors is still uncertain, but with the funding expected to flow starting this year, we’ll soon find out if mining is one of them. What is certain is that Canada’s mining sector could use more investment: We only spend about $550 million annually on mining R&D and innovation compared with $2.8 billion in Australia. “Unless we have the proper level of investment in research and innovation 20 |

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we’re going to start losing our leadership role in the world in mining,” says Vic Pakalnis, associate vice-president of Laurentian Mining Innovation and Technology (LMIT) organization in Sudbury, Ont. “Whenever there’s a down cycle, it’s tough to get money invested from the industry and that’s where government has to look at its policies and also do some investing.” With the potential of new investment to come, CMJ decided to look at the mining R&D and innovation that’s happening in Ontario, the focus of our Feb/Mar issue. Here’s a look at just some of the activity and organizations doing the work.

Camiro The Canadian Mining Industry Research Organization (Camiro) was established in the mid-1980s with a focus on safety following rockburst incidents in Sudbury-area mines. The collaborative research organization ran the Deep Mining Research Consortium (DMRC) for nine years until the program wrapped up last year. One DMRC project conducted with the University of Ottawa examined the physiological effects of heat stress in deep mining environments on the human body. A practical guide to identifying and mitigating the symptoms of heat stress was produced as a result. Another project investigated the use of an acrylic-

Photo: BsWei, iStockphoto.com

By Alisha Hiyate

WWW.CANADIANMININGJOURNAL.COM

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Harold Gibson

kind from 22 partners in academia, industry and government. Led by MERC director Harold Gibson, the project will aim to transform the understanding of how base and precious metals were formed during the Precambrian era. It will go beyond creating models of deposits or districts and instead look at systems, searching for geological, geochemical and geophysical differences between deposit rich areas and barren areas that appear geologically equivalent. Laurentian’s Vale Living with Lakes Centre has created a new industrial research chair position in biomining, bioremediation and science communication after receiving a $630,000 investment from the Northern Ontario Heritage Fund last spring. The five-year position was filled in July by Nadia Mykytczuk. Mykytczuk’s work will focus on commercializing biomining and bioremediation technologies, for example, using microbes to liberate metals from ore or mine waste, or to eliminate problematic mining waste CONTINUED ON PAGE 22

Laurentian Mining Innovation and Technology (LMIT) The Laurentian Mining Innovation and Technology umbrella organization is composed of four centres at Laurentian Univer-

Photo: Laurentian University

Photo: BsWei, iStockphoto.com

based plastic spray-on liner that could be used in ground support applications instead of screening and shotcrete. Camiro’s Diesel Emissions Research Initiative (DERR), which is at the end of its second phase after six years, looked at the effectiveness of technologies such as diesel particulate filters in reducing emissions into underground mines. DERR’s work showed the filters, which can be retroactively fitted onto large diesel mining equipment or smaller utility vehicles, could capture well over 95% of diesel particulates and harmful substances. Camiro is looking for funding to extend the program to assess the effectiveness and safety of fourth generation diesel engines, which were designed for surface use in the transport truck industry, in underground mining applications.

sity: the Mining Innovation, Rehabilitation and Applied Research Corp. (Mirarco), Mineral Exploration Research Centre (MERC), the Vale Living with Lakes Centre, and the Centre for Research in Occupational Safety and Health (CROSH). While Mirarco is a not-for-profit, incorporated research organization founded in 1998 whose focus is applied research to manage risks in the mining sector, the other centres are academic units of Laurentian. One recent Mirarco project is a “Baby” hydraulic air compressor (HAC), currently at the laboratory pilot scale, that could eventually offer an energy efficient way to cool deep mines. Another project, the Offshore Passive Photo-Voltaic (OPPV) solar power project, is being tested in the waters of the Mediterranean near Malta. Used in tailings ponds, the solar panels could provide a barrier between wildlife and the tailings while generating electricity for the mine. In September, MERC received $49 million from the federal government’s Canada First Research Excellence Fund (CFREF) for its seven-year, $104-million Metal Earth project. Metal Earth, which is aimed at lowering the risk of mineral exploration and increasing discovery rates, will receive the rest of its funding in cash and in

Laurentian University received $49 million in federal funding for its Metal Earth project last year.

FEBRUARY 2017

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CANADIAN MINING JOURNAL

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CEMI and Nordic Minesteel Technologies with the mine development canopy system.

EXPLORE. DISCOVER. LEARN. Join us: aemq.org/Xplor

OFFICIAL PRESENTER

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20-25_CMJ Feb2017_R&D.indd 22

such as arsenic in tailings. Of particular interest is the development of technologies that can work in colder environments, such as northern Canada. In 2015, CROSH announced a threeyear study on the mental health of miners. The $400,000 study, funded by Vale, will include a comprehensive survey including workers from all occupational groups at Vale’s operations in Ontario. A multidisciplinary team from CROSH will work closely with a Vale/United Steel Workers joint occupational health committee as the Mining Mental Health project proceeds. The study will shed light on an area that has so far received little attention and study – mental health in the mining industry and its links to productivity, absenteeism, injury and quality of life. CEMI Incorporated in 2007, Canada’s Centre for Excellence in Mining Innovation (CEMI) helps solve mining industry challenges from the R&D to implementation and commercialization from exploration to environmental sustainability. CEMI and its partners have developed a mine development canopy system focused on increasing advance rates and reducing costs in underground mine development. The robust, movable canopy protects personnel and equipment in the development heading from rock falls and rockbursts while allowing simultaneous activities in the heading. CEMI has partnered Nordic Minesteel Technology in North Bay, to

Maestro Mine Ventilation’s Vigilante AQS system. Photo: Maestro Mine Ventilation

PLACE BONAVENTURE, MONTREAL, QC

Photo: CEMI

OCTOBER 18-19 2017

build and commercialize the canopies. The second phase of the project will involve development of the equipment needed for material handling of the rock away from the face. Another technology that CEMI has supported through its Innovation & Prosperity Office (IPO) is ColdBlock Technologies’ ColdBlock Digestion. The technology offers an alternative to the conventional methods used in mining assay labs – acid digestion – with benefits in safety, turnaround times, cost and productivity, since it can be automated. ColdBlock has gone through research, demonstration and operational scale implementation phases, and is now being commercialized. The $35-million business-led NCE, Ultra Deep Mining Network (UDMN), managed by CEMI, funded by the federal government and mining industry, addresses challenges in ultra-deep mining conditions below 2.5 km. With 76 members, 25 projects with commercial viability in rock stress WWW.CANADIANMININGJOURNAL.COM

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MX Deposit mobile app on a tablet.

risk reduction, energy reduction, productivity, and improved human health. Recently, UDMN recognized its members for their innovative work: Jannatec Technlogies is working on a new helmet and communications system for underground miners so they can be alerted to major pieces of equipment that are nearby; Maestro has developed and commercialized a digital gas sensor that is easier to calibrate and more reliable in underground readings; and Mira Geoscience’s 4-D multi-disciplinary data management system monitors and assesses the risks of geotechnical changes taking place underground, such as rockbursting and seismicity. Norcat Founded in 1995 in Sudbury, the Northern Centre for Advanced Technology (Norcat) is a private, non-profit organization that provides training and development programs and facilities, and also

Photo: Minalytix

Photo: CEMI

Photo: Maestro Mine Ventilation

Geologists in Namibia using Minalytix’s

facilitates innovation and commercialization activities of small and medium size enterprises in northern Ontario. Several companies in the mining services space are developing interesting products with Norcat’s support. In September, Boart Longyear estab-

MURCHISON MINERALS LTD.

lished a Northern Ontario Technology Development Site at Norcat to develop and test surface and underground diamond drilling technology. The site was funded by a $1.37-million grant from the Northern Ontario Heritage Fund Corporation CONTINUED ON PAGE 24

CSE:MUR

VMS Zinc/Copper/Silver - Brabant-McKenzie, Central Saskatchewan Surface

1000 m

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1000 m EM Conductor A

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Current NI 43-101 Resource Indicated: 1.5 MT 9.2% Zn, 0.8% Cu Inferred: 3.0 MT 5.6% Zn, 0.6% Cu

FEBRUARY 2017

20-25_CMJ Feb2017_R&D.indd 23

Shares Outstanding: 25.3 million info@murchisonminerals.com www.murchisonminerals.com

CANADIAN MINING JOURNAL

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Photo: Boart Longyear

ONTARIO R&D

(NOHFC) and a matching corporate capital investment. At the site, the company has begun to test and develop proprietary technologies designed to increase drilling productivity, improve safety, increase efficiency and reduce drilling costs. Some of the testing will include next-generation Roller Latch and drilling rod technologies, as well as Boart Longyear’s TruCore core orientation system and TruShot magnetic survey tool. For the long term, there is a growing need for technologies that will help reduce the costs of mineral exploration and production related drilling and decrease the time it takes to define, sample, validate and mine mineral resources, and Boart Longyear is committed to developing new mineral exploration and production technologies to meet those needs. Boart Longyear has also operated the Pyrite Road Technology Development Site in Adelaide, South Australia, since 2015. Sudbury-based startup Minalytix offers core-logging software that simplifies the collection, management and sharing of drill data. The company’s MX Deposit software is a cloud-based, software-as-aservice (Saas) product, which means users pay on a monthly or annual subscription basis. With no initial software purchase, no on-premise IT requirement, and no need to maintain servers, install software, or check-out licenses, all that is required to 24 |

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access the system is an internet connection. The MX Deposit Android app – the first of its kind in the mining and exploration industry – is a supporting module to the web platform. This “true” mobile app is a native Android application, and allows for more efficient data collection in the field. Users can browse drill holes in their project and assign holes to themselves for offline data capture. The Android tablet can then be taken into the field or core shack where the user can enter drill hole and sampling data, which is automatically synchronized to the web when they get back to the office with an internet connection. The flexible software can be used for exploration or grade control by junior exploration companies or major mining companies and can be quickly configured to meet each project’s unique requirements using an intuitive set of administrative screens. Minalytix recently announced a partnership with Geosoft to release MX Deposit commercially. Dowling, Ont.-based Hard-Line has tested its Teleop and Teleop Auto teleremote operating systems at Norcat’s test mine. Teleop allows the control of heavy machinery from a distant and safe location. It does not require operator line of sight and can be used on any type, make, model, or year of machine. The technology allows for continued operation during shift changes and after blast cycles.

Photo: Hard-Line

The crew at Boart Longyear’s technology development site in Sudbury.

Hard-Line’s Teleop generic station.

Teleop Auto, an upgrade to the Teleop system, allows the teleoperation of one machine from one chair, with autonomous driving features. Teleop Auto will automatically drive the machine through a predetermined path. Once the operator has acquired a full load, they can use the automatic steer, speed, and braking functions to send the machine to dump at a specified location. In September, HardLine officially launched Teleop Auto at MINExpo in Las Vegas, demonstrating the technology by operating a load-haul-dump machine located at Norcat’s test mine near Sudbury from the trade show floor. Hard-Line’s most recent upgrade, Teleop Multi, allows the teleoperation of multiple machines from multiple operator’s stations, one at a time. The operator can select from a pool of machines that have been placed on their operator station. When operating one of these machines all other machines connected to the chair will shut down. Queen’s University The Mining Systems Laboratory at Queen’s University is a multi-disciplinary research group that focuses on field robotics and, WWW.CANADIANMININGJOURNAL.COM

2017-02-03 11:44 AM


Photo: University of Toronto

Photo: Boart Longyear

Photo: Hard-Line

University of Toronto mining drone.

in particular, on mobile robotics and related applications in mining. This year Dr. Joshua Marshall, director of the MSL, and three other graduate student researchers from Queen’s are working on-site in Örebro, Sweden, with engineers from Atlas Copco Rock Drills AB and with Örebro University’s Centre for Applied Autonomous Sensor Systems (AASS). Their collaboration involves researching new and advanced algorithms for extremely fast autonomous underground tramming, as well as on the development of admittance-based control schemes for autonomous loading of LHD machines. University of Toronto At the University of Toronto’s Lassonde Institute of Mining, one area of research is on understanding the ice-content, heat-transfer and fracturing of frozen and thawing rock masses in high-latitude underground mines. In cases where a mineshaft must penetrate permafrost, heat generated from ore-extraction and equipment begins to melt the permafrost in the area isolated around the shaft. While frozen rock is considered stable, it must be stabilized as it thaws. Prof. John Harrison and PhD candidate Greg Gambino are taking a qualitative approach to understanding the thermodynamic and mechanical implications of thawing rock masses, with the goal of better predicting instabilities and implementing reinforcements in the rock face in an economical and timely way. Current research focuses on site-specific scenarios, but Harrison and Gambino have uncovered other possible uses for the research, most related to the impact of climate change on surface mines and hydrogeology. In partnership with the University of Toronto Institute for Aerospace Studies, Prof. Kamran Esmaeili and MASc Candidate Thomas Bamford are optimizing mining processes with the use of drones, acquiring real-time, high-quality data. Current data-collection practices are time consuming and can expose personnel to hazards. Drones allow for rapid, accurate data collection over large areas, frequently including real-time post-blast rock fragmentation analysis, inspection of excavations and earth works and hyperspectral mapping, etc. Using this information, researchers are able to develop strategies and systems that continuously reconcile mining models with real-time data, allowing for greater insights, reduced uncertainties and for engineers to target areas of concern. Drones are now being used in the mining sector for aerial surveying and volume calculations. Esmaeili and Bamford’s research CMJ will bring novel applications to the field. FEBRUARY 2017

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CANADIAN MINING JOURNAL

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Ontario Mining Association members envision the future By Chris Hodgson, Ontario Mining Association President

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CANADIAN MINING JOURNAL

more alternative energy sources, global use of mining products will only grow. As a place known around the world for its safety and environmental leadership, efficiency, productivity and corporate social responsibility, Ontario has every opportunity not just to be a model mining and smelting jurisdiction, but also an indispensable link in the world’s mineral supply chain. Though the number fluctuates with various commodity price changes, the value of Ontario’s mining production is the highest in Canada – $10.8 billion in 2015, despite the challenging market conditions – and the sector makes significant tax contributions to all levels of government, which pay for public priorities like healthcare, education and infrastructure, supporting Ontarians’ standard of living. Mining offers versatile and rewarding careers, particularly for young people. Wages in the mining industry have increased 40% over the last

decade, an amount that is twice the rate of inflation, and are 37% higher than the average for goods producing industries in Ontario. Worker health and safety is a top priority. In 2016, the province’s mining industry met its zero fatality objective. This is a significant achievement, marking yet another step toward achieving zero harm. As Ontario’s minister of labour recently pointed out, “Ontario’s mining sector has a strong culture of health, safety and collaboration, which continues to deliver positive results in the workplace for mining workers.” Recent data support this. According to Ontario’s Workplace Safety and Insurance Board, Ontario industry sectors are demonstrating continuous improvement and mining companies compare favourably with other workplaces. The 2015 lost time injury (LTI) average rate for 2015 Schedule 1 employers was 0.85, down from 0.92 in 2014. Of 16

Though the number fluctuates with various commodity price changes, the value of Ontario’s mining production is the highest in Canada – $10.8 billion in 2015, despite the challenging market conditions – and the sector makes significant tax contributions to all levels of government supporting Ontarians’ standard of living. WWW.CANADIANMININGJOURNAL.COM

Photo: akindo, iStockphoto.com

W

hile our business is digging up minerals and metals, the core focus of Ontario miners is unearthing people’s potential. OMA members have committed to devising an industry-wide innovation strategy to enable responsible and sustainable growth of Ontario’s mining industry, while delivering accelerated improvement in health, safety and environmental performance through collaborative action and innovation. Mining has been a part of Ontario’s fabric since the 1800s. The major discoveries and mine development of the 20th century underpinned Ontario’s rise to the status of Canada’s most populous and wealthiest province, and supported Canada’s development as an industrialized and globally competitive nation. As Ontario moves toward a low carbon, innovation and knowledge-based economy in the 21st century and beyond, mining will continue to play a crucial role. Minerals and metals extracted and processed through mining are essential, irreplaceable components of modern technology and the building blocks of innovation – from lifesaving medical devices to planet saving green devices like solar panels, wind turbines, hybrid cars and advanced energy solutions. With society shifting away from fossil fuel dependence and relying on


industry sectors, seven sectors were above this rate, nine were below. In 2015, mining was below the Schedule 1 LTI average, with a rate of 0.63 - down from 0.64 in 2014, and continuing the improving trend of the Ontario mining industry, which has reduced its LTI rate from 1.81 in 2002. While the safety of workers is paramount, Ontario miners are also working hard on improving their capacities as environmental stewards by adopting effectiv management strategies and technologies to reduce the environmental impact of mining operations. Much effort is being devoted to making Ontario’s mines energy efficien The industry has lower GHG emissions than most other industries in Ontario, and its carbon footprint is set to become smaller over time, allowing Ontario to produce some of the lowest carbon commodities in the world. With a clear focus on the future, Ontario’s dynamic mining industry is continually evolving to meet society’s changing needs and expectations, as well as our own exacting standards. From adopting lower emission and renewable energy technologies to developing the world’s firs fully electric mine, innovation is the key to ensuring our sector’s global competiveness and future success. Ontario’s mining companies understand the imperative to challenge the industry status quo – about half of Ontario mines introduced innovations in 2014. Having a strong, innovative mining sector has numerous positive secondary effects Mining has links to other industries and sectors in the economy, contributing to an economic multiplier effect. For example, the industry provides a major boost to our financial sector, with the Toronto Stock Exchange and TSX Venture Exchange currently raising more mining equity capital than any other exchange. Other sectors benefit as well, including manufacturing, engineering, education, legal services, transportation, construction, environmental management and geological surveying/ analysis, among others. In some parts of the province, especially in the Far North, mineral resource development is critical to creating high-value jobs and entrepreneurial opportunities. Over the last few decades, aboriginal-industry relationships and partnerships have evolved tremendously through the conclusion of various types of agreements (more than 122 in Ontario) related to mine development that FEBRUARY 2017

have proven to be successful in securing benefits for many aboriginal communities While previous investments have established Ontario’s position as the major producer of metals and minerals in Canada, and while it is clear that mining benefits all parts of the province, attracting the highest Canadian total investment in mines at $2.9 B, maintaining and expanding the benefits that responsible mining brings to our communities and to our economy requires that the costs of doing business remain competitive, while we develop our natural resources to their full potential. Mining companies function in a fiercel competitive and increasingly mobile global market, and Ontario mining companies’ profitability is challenged by the combination of falling or stagnant global commodities prices and rising input costs. We are still feeling the effects of the global downturn in commodity markets – the extended period of lower prices and volatile demand for many commodities has resulted in a significant impact on earnings, balance sheets and investor perceptions of the sector. Ontario has room to improve its com-

petitiveness. In particular, our jurisdiction is burdened with high labour and energy costs, which limit revenue potential and dampen investment, especially in difficu economic times. Notwithstanding, mining creates more economic value (as measured by GDP) for the energy it uses than most other industries, including chemicals, cement, pulp and paper, and iron and steel. Unlike in traditional manufacturing, however, extremely long timelines and large capital expenditures are needed to discover a viable ore deposit and bring it into production. A complex regulatory environment results in a particularly expensive and time-intensive process. To overcome the challenges, it is important to understand and benchmark our current contributions, strengths and failings, while identifying new opportunities and drivers to enhance Ontario’s competitiveness. We encourage CMJ readers to visit oma.on.ca, weigh the information and send us your thoughts. CMJ CHRIS HODGSON is the president of the OMA. He can be reached at chodgson@oma.on.ca.

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top 10

MOST important As MINING MEN in Canadian history

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By Stan Sudol

Canada celebrates the 150th anniversary of the signing of Confederation this year, it is a great time to remember the enormous contributions the mineral sector has made to our past and highlight the Top 10 Mining Men in Canadian history. The list is only focused on mine builders not mine finders. It highlights individuals who have built corporate empires and/or who have developed isolated regions of the country with the necessary infrastructure for mines to flourish and create multi-generational jobs, shareholder wealth and great economic impact. The list is primarily focused on gold and base metal miners though some companies did have coal mining divisions. It also includes Americans as there really was no border between the two countries when it came to mining expertise and investment. Before I start my list, I need to make an “honorary mention” of three Saskatchewan premiers. NDP Premier Allan Blakeney nationalized four key potash mines – roughly 40% of provincial production – in 1975 and formed a crown corporation called Potash Corporation of Saskatchewan. In addition, the Saskatchewan Mining Development Corporation was formed the year before to oversee the government’s interests in uranium, gold and diamond exploration and mining.

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Conservative Premier Grant Devine privatized both these crown corporation in 1988. The Saskatchewan Mining Development Corporation was combined with the privatized federal crown corporation Eldorado Nuclear to form Cameco Corporation. In 2005, conservative leaning Brad Wall shocked the business establishment by not allowing PotashCorp. to be taken over by BHP Billiton. Without a doubt, these three premiers have had more of an impact on the history of mineral development in Saskatchewan than any business individual.

t Jules Timmins

s James Murdock

s Noah Timmins

The Golden Boys – Noah Timmins (Hollinger) and Harry Oakes (Lake Shore) Sharing the tenth spot on the list are Noah Timmins and Harry Oakes, well-known mine builders in the Timmins and Kirkland Lake camps, respectively. Noah Timmins, along with his brother Henry, first struck it rich in the Cobalt silver boom. Prospectors Benny Hollinger and Alex Gillies claim staked some promising ground in the Porcupine Gold Rush in 1909. They sold out to Noah Timmins who oversaw the construction of and ran one of Canada’s legendary mines, the Hollinger. Harry Oakes The mine produced 19.3 million oz of gold over 58 years before it finally closed in 1968. Through the Hollinger, Noah Timmins invested in other mining interests including the Noranda Horne smelter and gold mines in Quebec, Manitoba, Kirkland Lake, Yellowknife and the Yukon. He was

10

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CANADA’S TOP 10 MINING MEN called “one of the great mining magnates of Canada” by the Toronto Star and known as “Grand Old Man of Canadian Mining” when he died in 1936. American born and well-known for his cantankerous personality, Harry Oakes played an instrumental role in transforming Kirkland Lake into one of the world’s most significant gold camps. Oakes came to Kirkland Lake in the summer of 1911. His ultimate goal was to establish a prospector-built and owned mine. In total, seven gold mines were built along a single fault or strike zone, but the richest one of all was Oakes’ Lake Shore. Francis Clergue and his Iron Ore Legacy at Algoma Steel American-born entrepreneur Francis Hector Clergue founded Sault Ste. Mariebased Algoma Steel in 1901 – now owned by Essar Steel – due to the development of iron ore deposits north of that city. Prospectors Ben Boyer and Jim Sayer unearthed hematite (iron) ore in the Michipicoten/Wawa area in 1898. Clergue bought the claims for $500 and built the Helen mine. He also constructed a power plant, pulp and paper mill, a steam ship line and a railroad which lead to the industrial development of the isolated Algoma district.

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Gilbert A. Labine – A Fateful Destiny With Uranium (Eldorado) The pitchblende that Gilbert Labine discovered in 1930 at Great Bear Lake in the Northwest Territories became the critical source of the material for the first atom bombs that were dropped on Hiroshima and Nagasaki. The resulting Eldorado uranium mine and refinery at Port Hope produced both radium and uranium, which had no market value during the depression era but which was wisely stockpiled. Labine’s operations had to close due to poor demand until the Second World War and the urgent need of uranium for the American Manhattan project. The Canadian government nationalized the Eldorado mine in 1944 for strategic reasons, making Labine president. He stayed

8

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s Gilbert Labine

until 1950, discovering another uranium mine – Eldorado Beaverlodge mine – for the corporation. On his own, Labine discovered two more mines, the larger being the very profitable Gunnar on the shores of Lake Athabasca in northern Saskatchewan. Thayer Lindsley – A Mining Genius (Falconbridge) Born in Japan to American parents, Thayer Lindsley is considered one of the great mine finders and company builders. A true inter-

7

Thayer Lindsley

national mine executive, he found or was involved with the development of many well-known companies, including Sherritt Gordon, Giant Yellowknife, Canadian Malartic, and United Keno Hill as well as developments in Africa and Australia. However, it was Falconbridge Ltd.,

Robert C. Stanley

which he built into an international powerhouse, that he was best known for. In 1928, Lindsley along with a group of investors founded Ventures Ltd. as a holding company for a variety of properties that included Falconbridge. The original owner of the Falconbridge claims was Thomas Edison. Lindsley bought the claims and developed the company’s first nickel mine in competition with the dominate International Nickel (later Inco). Robert C. Stanley – The Grandfather of the Nickel Industry (International Nickel Ltd.) American-born, president Robert C. Stanley’s 50-year career with International Nickel began in 1901. Until the end of the First World War, the primary use of nickel was for amourplated steel, which was made into a wide variety of military products. With the end of hostilities in 1918, the market crashed and it is widely said that Stanley basically saved the company by establishing a new engineering and technical department that pursued intensive research for new peacetime uses. Under Stanley’s leadership, sales of nickel increased from 13 million lb. in 1921 to 241 million in 1951, the year he passed away.

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SUN DOGS AND YELLOWCAKE: Gunnar Mines – A Canadian Story

A celebration of mining and its long-lost way of life, Sun Dogs is a thoughtful and often humorous account of a largely forgotten era. As the 1950s uranium frenzy swept the western world, Gilbert LaBine’s discovery of the Gunnar mine on Lake Athabasca attracted attention across North America. The town’s 800 residents found adventure, romance, tragedy, and a freedom never again to be equaled. By Patricia Sandberg, former Vancouver mining and securities lawyer. 258 pages. Available in softcover through Amazon, select book stores and www.PatriciaSandberg.com.

WWW.CANADIANMININGJOURNAL.COM

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International Nickel was created in 1901 with the merger of the Canadian Copper Company and its strategically located polymetallic nickel-copper deposits in Ontario’s Sudbury Basin – discovered in 1883 during the construction of the Canadian Pacific Railway. Norman Keevil Sr. and Norman B. Keevil Jr. – A Canadian Mining Dynasty (Teck Resources) Norman Keevil Sr. saw the enormous potential of airborne magnetic surveys for mining exploration which helped him find a high-grade copper deposit in Ontario’s Temagami district in 1954 marking the beginning of the company we now know as Teck. By 1963, with his son Norman B. Keevil working at the company and a merger with four other junior mining companies, Teck’s amazing growth trajectory was on its way. In 1981, Norman B. Keevil was appointed president and CEO and in 1989, Keevil Sr. passed away. A variety of coal, gold, and copper projects kept increasing the size and stature

Norman Keevil Jr., left, with Norman Keevil Sr.

5

of the company but it was the acquisition of 30% of the historic Canadian Pacific-owned Cominco Ltd. in 1986 and the subsequent takeover of the rest of the company in 2001 (Cominco was a significantly larger miner than Teck) that made headline news in the Canadian mining scene and highlighted the financing expertise of Keevil Jr. The Keevils have turned Teck into the country’s largest diversified base metal

miner, and with the company’s dual class share system, ensured it would safely stay in Canadian hands. James Murdoch – The Father of Quebec Mining (Noranda) Claim staked by prospector Edmond Horne and his partner Ed Miller in 1922,

4

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CANADA’S TOP 10 MINING MEN

Stephen B. Roman, wife Betty and Prime Minister Pearson

the very rich copper-gold deposits around Rouyn’s Osisko Lake became the basis of Noranda Inc., one of Canada’s legendary mining companies. James Murdock who would become the new company’s president, stayed on for an astonishing 30 years. The Noranda copper deposits were the richest in Canada up to that time. Rouyn exploded with activity and due to the gold by-product the region became known as Quebec’s Klondike. From the beginning Murdock saw Noranda as a company that not only mined and refined the copper but would also fabricate products. A refinery was built in Montreal in 1930 and a rolling mill for the Canada Wire and Cable Company soon followed – all during the 1930s depression! Noranda under Murdock became a huge complex of related metal industries. Three years before Murdoch stepped down as president in 1953, he started the development of a new copper deposit, mill and smelter in Quebec’s Gaspe. The resulting town, Murdochville, was named in his honour. He died in 1962 but is remembered as the Father of Quebec Mining and a committed Canadian nationalist who significantly helped build this country’s north. Jules Timmins – Quebec’s Northern King of Iron Ore (Iron Ore Company of Canada/Rio Tinto) The development of the vast iron ore deposits in the isolated wilderness of northern Quebec and Labrador by Jules Timmins is one of the great mining stories in Canadian history. Jules began his career as

3

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Peter Munk (middle) and his wife Melanie

a miner at the Hollinger gold mine, and became president of Hollinger Consolidated in 1936 after the death of his uncle. With Hollinger money, Jules purchased the mineral rights to the Ungava region in 1941, and established the Iron Ore Company at the end of the decade to start development. While the iron ore was of exceptional high quality and near the surface, allowing for low-cost open, pit mining, the infrastructure and financing challenges were great. With a financing consortium of six American companies, Timmins raised the necessary capital to build a 560km railroad, a shipping terminal at Sept-Îles on the St. Lawrence River, and the iron ore mine. The project was completed in 1954 and helped spur the construction of the St. Lawrence Seaway. The project created tens of thousands of jobs, more iron ore mines and the foundation of nearby communities of Schefferville and Labrador City. Stephen B. Roman – An Empire of Uranium, Coal, Oil and Potash that Crashed Stephen B. Roman, a Slovak immigrant who came to Canada in 1937, worked in a number of blue collar jobs before becoming a mine investor and seizing a great opportunity. In 1952, the U.S. military desperately needed uranium and a staking rush in the Algoma district north of Blind River indicated potential deposits. Roman wisely purchased 83 strategic

2

claims from prospector Arthur Stollery that would contain the largest uranium deposits in the world at the time and turning his Denison Mines into a major mining powerhouse. By the early 1960s, the American military cancelled most of its uranium contracts and left Denison and the boom town of Elliot Lake in dire straits. Roman diversified his company with potash mines in New Brunswick, oil and gas properties in western Canada and Europe, and the development of the Quintette coking coal project in northeastern British Columbia where a new town called Tumbler Ridge was built. By the late 1970s the uranium market rebounded and Denison secured a $5billion deal with Ontario Hydro to supply fuel for their nuclear reactors. In 1989, Ontario Hydro opted out of its uranium contracts with Denison, and a downturn in the commodity markets brought Denison to the verge of bankruptcy. A drastic restructuring sold many of the corporation’s properties, and by 1997 a much smaller Denison was a shadow of its former self. But at his corporate peak and due to the strategic value of uranium for both military and nuclear power generation, Stephen Roman was among the most powerful business leaders in the country. Peter Munk and Barrick – Canada’s Godfather of Gold In November 2005, Peter Munk launched a takeover bid of historic Canadian gold miner Placer Dome agreeing to sell certain assets to Goldcorp. By the following spring,

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the takeover was complete and in less than 25 years, this upstart junior miner with two small gold operations – an Alaskan placer mine and a half interest in a small northern Ontario gold operation called Renabie – had created the largest gold mining empire in the world. Unlike Teck or Goldcorp from its inception in 1994 to 2004, Barrick had no dualclass share system to prevent a takeover a sympathetic premier like Brad Wall in Saskatchewan who stopped the BHP Billiton buyout of PotashCorp. Barrick got no sympathy from Ontario Premier McGuinty who was absolutely silent when historic Ontario base metal producers were bought by foreigners. It was a prey or predator scenario and Peter Munk came out on top. For that reason alone, Munk deserves the top spot, as 2006 and 2007 witnessed the foreign takeovers of legendary base metal miners like Inco by Vale, Falconbridge/ Noranda by Xstrata (subsequently taken over by Glencore) and Alcan by Rio Tinto. Canada’s corporate elite – shell shocked at the frenzy of foreign takeovers in the middle of the last decade –could thank Munk for saving at least one globally significant Canadian mining corporation that is still based in Toronto. One of Munk’s most astute original moves was the takeover of the Camflo mine in Quebec in 1984. The mine came with a seasoned technical team led by mining engineer Robert Smith. This team would go on to discover the extraordinary Goldstrike deposit – one of the richest gold mines in North America – in Nevada’s Carlin Trend which really started the company’s climb to the globe’s number one gold miner. An offshoot of the Goldstrike discovery was the founding of a royalty company called Franco-Nevada headed by two of Canada’s best-known mining financiers, Pierre Lassonde and Seymour Schulich. It financially benefited from the royalty rights that they bought for $2 million from the property’s previous owner. This helped turned Franco-Nevada into the world’s largest mine royalty company. In addition, since 1992, Peter and Melanie Munk have donated more than $180 million to charities and public institutions in Canada and abroad including approximately $75 million to the Peter Munk Cardiac Centre at the University FEBRUARY 2017

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Health Network (Toronto) and about $51 million to the University of Toronto,

including the establishment of the Munk CMJ School of Global Affairs.

I consulted with many people during my research for this essay, however, the four that I absolutely must acknowledge are corporate director David Constable, news editor Marilyn Scales at the Canadian Mining Journal, consulting geologist George Werniuk, and Jane Werniuk, geologist at Agnico-Eagle and former editor of the Canadian Mining Journal. However, I take full responsibility for the final list!

AUTHOR’S NOTE:

STAN SUDOL is a Toronto-based communications consultant and owner/editor of a mining news Canadian-Mining-Journal_half.pdf 1 1/26/2017 4:09:01 PM aggregator website: www.RepublicOfMining.com

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2017-02-06 12:23 PM


Indigenous communities, Cementation benefit from strong

PARTNERSHIPS By Eric Kohtakangas

T Top: The Vale Totten mine reactivation project. Above: Kiikenomaga Kikenjigewen Employment and Training Services, Matawa First Nations.

FEBRUARY 2017

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oday, a successful project in the mining industry often relies on the support and active participation of an indigenous partner. Partnerships with indigenous communities not only exist with the mine owner but often involve any party performing work on the project. One such partner, Cementation Canada, has a long history of successful indigenous partnerships for many of its past and current projects. These stretch from Nunavut in the Far North, to Ontario and the James Bay territory in Quebec, and to the Labrador region in eastern Canada.

Successful partnerships with local communities must be founded and built on trust and respect. Cementation views these partnerships as long term relationships which align with its mission of being the contractor of choice through excellence in all aspects of any project we undertake and in doing so building long term relationships. Any partnership with an indigenous community should exist well after the project is completed. Cementation develops local community partnerships that are built on experience and lessons learned. And probably most important is the element where CONTINUED ON PAGE 38

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FIRST NATIONS PARTNERSHIP

these partnerships must be culture based and both partners have an understanding of each other’s culture that will help make the partnership and project successful. For most mining projects within the industry there is an existing form of partnership, either some form of IBA (impacts benefit agreement) or collaboration agreement with the local indigenous community and the mine owner. These agreements are usually in place before third parties are contracted. The aim of any partnership that Cementation develops with the community is one that will support aspects of the existing agreement between the community and the mine owner. It is often the company’s partnership with the community that allows the community and its members to gain benefits from the project work carried out. For example the mine owner may have an element of employment and training in their agreement with the community, but most often the training and employment opportunities are first realized through the partnership between Cementation and the local community. Twelve years of success

Cementation has 12 years of successful indigenous partnerships in Canada. The most significant and longest is Kitikmeot Cementation Mining & Development Ltd. (KCMD), an Inuit firm based out of Cambridge Bay, NT. KCMD was established in 2005 as a joint venture partner38 |

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Left: A trainee in the New Miner Training Program. Above and top of page 11:: More skills learned in the New Miner Training Program. Lower page 11: Trainees at the Diavik diamond mine in NWT.

ship between Cementation Canada and Kitikmeot Corporation for work that is carried out in the Kitikmeot region of Nunavut and the Northwest Territories. KCMD has been engaged at the Diavik diamond mine in the Northwest Territories, since 2005. KCMD also provides underground mine development and construction services to TMAC Resources at the Hope Bay gold project in Nunavut. Successful partnerships realize the most opportunities for the community and their members and businesses. Too often mining projects once approved are accelerated into the project execution phase and there are missed opportunities for the local community. Cementation bases its partnerships on some guiding objectives. For example, a successful and beneficial partnership must have an element of labor force training. To be successful, this training aspect must be a part of the overall project execution plan and discussed early before the project moves into execution. This ultimately provides benefit to the mine owner at the end of a project when the mine owner takes over the project as an operating mine. Labor force training provides career opportunities for the local indigenous community and its people. It also provides a source of labor for our projects through

the local and surrounding communities. Cementation has successfully implemented and delivered its New Miner Training Program to numerous community members across many of its mining projects over the last ten years. One such example of a successful New Miner Training Program with local community members is the recent Totten mine reactivation project that Cementation carried out for Vale in Worthington, ON. The project, located on the lands of the Sagamok Anishnawbek First Nation, commenced in 2007 and the mine officially re-opened in early 2014. Cementation established a working relationship agreement with the Sagamok community that focused on new miner training. During the different phases of the project, Cementation trained 38 community members through the New Miner Training Program. The program consists of both a classroom and underground awareness session followed by placement on the project into an entry level position where the trainees begin to develop their skill sets. Today, many of the new miners that were trained from the Sagamok community remain employed with Vale at their operating mines, including Totten. Perhaps one of the most significant changes Cementation carried out before WWW.CANADIANMININGJOURNAL.COM

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Cementation established a working relationship agreement with the Sagamok community that focused on new miner training. During the different phases of the project, Cementation trained 38 community members through the New Miner Training Program. commencing the training for local community members was to move the three to four week classroom training into the community. Cementation also worked with the community to jointly select the training applicants which helped make the program 100% successful. The program is based on a 12 module program delivered in the classroom followed by the underground awareness training that gives each trainee the minimum accreditation to commence work underground. After 12 months of skills training, many trainees moved from entry level or support positions to direct face mining crews. Several participants were even successful at enrollment and obtaining an industrial electrical trade through Cementation’s apprenticeship program. Three keys to success

For any partnership to be successful, it should have the following objectives: FEBRUARY 2017

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1

It needs to maximize employment opportunities for community members and incorporate other joint venture or partnering opportunities for goods and services from local indigenous community companies or providers. This gives opportunity for the general partner to “unbundle� some of the project scope to the local community businesses. Employment and training programs for local community people will increase capacity and provide career opportunities for its people.

2

The partnerships have to expand the knowledge, understanding and awareness of mining within the community and in doing so encourage young people to consider mining as a career option or pursue an education that will benefit them in the mining sector.

3

Any partnership has to be fair for both parties. Any revenue or profit sharing model through the partnership has to consider the partner who carries the risk. The framework for any partnering agreement should also be indicative of the contract style between the mine owner and the service provider partnering with the local community. The partnerships must be competitive and fully transparent to both partners. The partnership should align with the overall project goals in executing an injury free project on time and on budget. Cementation works closely with each local indigenous community to maximize their benefits and opportunities and the mine owner to deliver a successful project while maximizing local content. CMJ

ERIC KOHTAKANGAS is VP operations at Cementation Canada Inc. CANADIAN MINING JOURNAL

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BLASTING

Industrial

Explosives MARKET

T

he market for industrial explosives is on a continuous rise due to rapid increase in mining activities, especially in the developing economies globally. It is projected to reach $15.9 billion by 2022, growing at 6.7% from 2016 to 2022, according to a new report by published by Allied Market Research. The mining segment dominated this market, occupying more than four-fifths share of the market revenue in 2015. Moreover, increase in demand for earth minerals, such as bauxite, iron ore, coal, and rare earth metals, as well as gold and silver, is a key factor fuelling the market growth.

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In addition, growth in use of industrial explosives, especially in the construction industry for tunnelling and other applications, along with increase in inclination of construction professionals toward the use of industrial explosives to save time and labour costs drive the growth of the market. The prices for high explosives were stronger than other industrial explosives in 2015. However, the prices are expected to witness a significant drop by 2022 due to increase in innovations in the manufacturing of high explosives. Initiatives by governments of various economies to tap rich underground min-

eral resources to achieve pace and higher gross domestic product in the ever-growing competition are some of the factors that accelerate the market growth. However, fluctuating prices of ammonia along with stringent regulations on the storage and transportation of industrial explosives along with high initial costs required for their manufacture are some of the key factors that hamper the market growth. Moreover, maintenance and aging costs and compliance with quality, specifications, and testing are some major factors that hinder the growth of the market. In the year 2015, the mining segment

Photo: Falcor, iStockphoto.com

is expected to reach $196 billion globally by 2022

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the analysis period. • Asia-Pacific is estimated to continue to lead the market, growing at 5.7% in terms of volume. • China occupied more than one-third of the total share of the Asia-Pacific industrial explosives market in 2015. • India is estimated to grow at the highest rate: 8.1% in terms of revenue. • The non-metal mining end-use industry accounted for half of the mining segment in 2015. Asia-Pacific and Latin America collectively accounted for more than half of the

market in 2015, and are expected to maintain this trend throughout the forecast period. This is due to the increase in mining and mineral exploration activities due to abundance of rich mineral resources in these regions, especially in China, India, Chile, Peru, Brazil, and others. Key players in the global industrial explosives market focus on acquiring local players to strengthen their market reach as well as to expand their customer base. CMJ readers can access the detailed report at www.AlliedMarketResearch.com/ industrial-explosives-market. CMJ

COME SEE US AT BOOTH #604 For 37 years we have been the foremost provider of mining services and solutions to the North American mining industry.

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occupied around 80% of the overall industrial explosives market revenue and is expected to maintain its lead throughout the forecast period. This is due to increase in investments in mining activities to tap rich mineral resources to fulfil the rise in demand globally. Blasting agents dominated high explosives, as they are used in bulk quantities to detonate mines and mountains. Key findings

The Allied Market Research study made the following observations: • The blasting agents segment is anticipated to grow at the fastest rate during FEBRUARY 2017

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BLASTING

150

Years of Dynamite ANOTHER POWERFUL ANNIVERSARY TO CELEBRATE Dyno Nobel, a global leader in

commercial explosives headquartered in Salt Lake City, Utah, traces its roots back to Alfred Nobel and his pivotal invention of dynamite. The name dynamite is derived from the Greek word dýnamis, meaning power. This year marks 150 years of progress due to the power of dynamite. The last century and a half have seen not only the creation of the Canadian confederation, but many of the things we take for granted every day. We have the light bulb, automobile and jet engines, movie cameras and television, nuclear reactors and the moon landing, satellites and cell phones, transistor radios and DVDs, personal computers and cell phones, the electric guitar and air conditioners. The list is long. Before dynamite, the ability to break rock was limited to black powder explosives, which weren’t very strong and required a lot of material. This material was also dangerous to transport. The invention of nitroglycerin in 1846 allowed for stronger and larger explosions. However, it was extremely unstable and less safe than black powder. Safety was the original reason Alfred Nobel set forth to create dynamite. In 1867, Alfred Nobel discovered how to stabilize nitroglycerin by adding diatomaceous earth. This created the first stable

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explosive more powerful than black powder. The invention of dynamite marked a pivotal time and led to a step change in global industrialization. Dynamite made it easier to safely extract raw materials, allowing for more innovations to come to life. Today, Dyno Nobel continues this tradition by developing practical innovations in blasting. Although improvements have been made to the original formula of dynamite and blasting practices, dynamite is still in use today and is, at times, the most sustainable solution in blasting. In North America, Dyno Nobel is the only manufacturer of dynamite, producing millions of kilo-

grams each year. Its plant in Carthage, Mo. has been producing dynamite, packaged emulsion and cast boosters since 1902. Alfred Nobel once said, “If I have 300 ideas and just one turns out to work I am satisfied.” He went on to have 355 patent applications granted during his life. Of all his inventions, dynamite is considered the most influential, not only because it redefined mining, but also because it gave birth to the Nobel Prizes. Alfred Nobel’s entrepreneurial vision laid the ground work and became the inspiration for Dyno Nobel to deliver ground-breaking performance through practical innovation. CMJ WWW.CANADIANMININGJOURNAL.COM

2017-02-03 11:56 AM


UNEARTHING TRENDS

Counting down to the reporting deadline for ESTMA Michael Sabatino and Rabinder Sihota

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he Extractive Sector Transparency Measures Act (ESTMA), which came into force June 1, 2015, introduced new reporting and transparency requirements for Canadian companies involved in the mineral exploration and extractive field, contributing to global efforts against corruption in this sector. For most listed Canadian mining companies, May 30, 2017, will be the first reporting deadline where they have to report specific payments totalling $100,000 or more made to all levels of local or foreign government related to the commercial development of oil, gas or minerals. But, the requirement to report on payments made to indigenous governments in Canada was deferred until June 1, 2017. This means that payments made after this date will have to be tracked and picked up on any subsequent reports. To assist companies, Natural Resources Canada (NRCan) has published an information sheet on payments to indigenous governments on their website. When new rules take effect it can be intimidating to implement them correctly the first time, and to set up systems that will make future reporting easy. Fortunately, NRCan already has some public reports published that could be useful to review on its website. The department is also very open to discussions and helping extractive companies navigate any challenges. That said, companies should be aware of the commonly asked questions and issues that are already being raised.

FOR MOST LISTED CANADIAN MINING COMPANIES,

What do I need to do if I do not have any payments to report, or if all my payments fall below the reporting threshold? Reporting entities with nothing to report are asked to notify NRCan via email that no report is being filed.

w Globally, there is an emerging trend to provide a transparency report that not only addresses mandatory requirements for reporting payments made to governments but also addresses voluntary disclosures on areas such as tax. w Companies at the forefront of this trend see this as an opportunity to manage their message and context around payments and clearly communicate economic benefits to key stakeholders. w Companies need to pay special attention to the implications of disclosing information that was previously not in the public domain.

How do I deal with the issue of reporting in foreign currency? Reporting entities should disclose the primary reporting currency of their report as well as the foreign exchange rate and method of conversion when converting foreign currency amounts. How should we deal with refunds of amounts previously paid? ESTMA requires reporting all amounts paid and there is no requirement to report on refunds of amounts previously paid. Reporting entities are free to disclose refunds in the notes section of the report if they feel it is relevant. FEBRUARY 2017

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May 30, 2017,

WILL BE THE FIRST REPORTING DEADLINE WHERE THEY HAVE TO REPORT SPECIFIC PAYMENTS TOTALLING $100,000 OR MORE MADE TO ALL LEVELS OF LOCAL OR FOREIGN GOVERNMENT RELATED TO THE COMMERCIAL DEVELOPMENT OF OIL, GAS OR MINERALS.

How do I deal with reporting when a subsidiary is disposed of during the reporting period? Assuming the subsidiary is controlled by a reporting entity, it would likely be responsible for reporting payments. The ESTMA states that “a payment made by an entity that is controlled by another entity is deemed to have been made by the controlling entity.� As a result, the controlling parent would be responsible for reporting payments made by the controlled subsidiary for the period where the subsidiary was controlled. These transparency reporting measures are not unique to Canada. Here are some issues being experienced by the industry in implementing similar regimes:

The clock is ticking to get these reports submitted and non-compliance is not an option due to the potential of significant penalties, so we would urge companies to consult with their CMJ advisors or NRCan on any questions. MICHAEL SABATINO is Tax Services Associate Partner at EY. RABINDER SIHOTA is Tax Services Senior Manager at EY. CANADIAN MINING JOURNAL

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2017-02-03 12:39 PM


LAW

Court clarifies threshold requirement to trigger BC environmental assessment By Jennifer Nyland and Laura Duke

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recent decision of the B.C. Court of Appeal provides some reassurance to project proponents because it clarifies the threshold requirement to trigger a B.C. environmental assessment. The decision also provides the Crown and project proponents with certainty that the Environmental Assessment Office’s confirmation of the reviewability threshold of a project does not trigger a duty to consult First Nations. Fort Nelson First Nation v. British Columbia (Environmental Assessment Office), 2016 BCCA 500, overturned a B.C. Supreme Court ruling on whether a proposed frac sand mine near Fort Nelson, B.C., was subject to provincial environmental assessment. The proponent wrote to the EAO providing a description of the project and the applicable environmental assessment trigger, and asked for the EAO’s confirmation that the project was below the trigger threshold. The Reviewable Projects Regulation outlines thresholds for categories of projects that are “reviewable projects” and therefore must receive an environmental assessment certificate before development commences. The EAO wrote a letter confirming that the project as described would not exceed the trigger threshold. However, the EAO was clear that “[p]roject proponents are responsible for making their own determination as to whether or not their proposed project falls within the thresholds set out in the [Regulation].” The Fort Nelson First Nation disagreed – its position was that the project would exceed this threshold. It brought a petition for judicial review on the grounds that the EAO’s interpretation was unreasonable, arguing that all of the excavated material, including waste, should count towards the production capacity. The First Nation further argued that the EAO’s interpretation of the provision and consequent confirmation that the project did not exceed the trigger threshold was Crown conduct that attracted the duty to consult, and that consultation on these points had been inadequate. The Chambers judge agreed with the First Nation’s interpretation of the threshold criteria, finding that the Crown had a legal duty to consult on the subject matter of the letter, and declared that the Crown had failed to fulfill this duty to meaningfully consult with the First Nation in good faith and to seek to accommodate the First Nation’s Aboriginal rights under Treaty 8. The executive director of the EAO and the project proponent appealed the decision. Under the environmental assessment scheme in B.C., the onus is on the proponent to determine whether a project is reviewable based on the criteria set out in the Regulation. The legislation contains no mandated decision by the EAO regarding 44 |

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whether a project is reviewable under the Regulation. The Court of Appeal therefore concluded that the letter was not a decision by a statutory delegate about whether the project was a reviewable project under the Regulation. The Court characterized the letter as a “non-binding opinion” that was not subject to judicial review. The Court also considered the merits of the appeal and interpreted the threshold necessary to trigger an environmental assessment for a sand and gravel mine. The EAO’s interpretation and application of the Regulation was upheld as reasonable. Importantly, the Court concluded that the EAO’s articulation of the threshold did not undermine the statutory scheme and objectives. Although the object of the Act is environmental protection, the overall scheme balances the need for environmental protection against encouraging economic development. The thresholds in the Regulations are intended to be easily applied by proponents. Finally, the Court considered whether the Crown’s duty to consult had been triggered. One of the key issues was whether the EAO’s interpretation and application of the reviewability threshold constituted “Crown contemplated conduct.” Both the proponent and the EAO argued that statutory interpretation is not “Crown conduct” capable of attracting a duty to consult. The Fort Nelson First Nation argued that interpreting and applying the reviewability threshold was “Crown contemplated conduct” and, in this case, the adverse impact was that the project would be subject to reduced environmental oversight, and would therefore expose the First Nation to greater potential impacts to its aboriginal or Treaty rights. The Court dismissed the First Nation’s claim that a duty to consult was triggered by the EAO’s interpretation. The Court held that the Regulations are rules of general application intended to apply universally throughout British Columbia. Imposing a duty to consult over the interpretation of the Regulation may lead to different interpretations applying to different projects. The Court found that had the duty to consult been engaged, the EAO had fulfilled its duty. This decision confirms that the proponent, not the EAO, is responsible for determining whether a project meets the thresholds for triggering an environmental assessment, and clarifies how CMJ the thresholds are to be interpreted. JENNIFER NYLAND and LAURA DUKE are associates at Lawson Lundell LLP. Jennifer can be reached at jnyland@lawsonlundell.com; Laura can be reached at lduke@lawsonlundell.com. WWW.CANADIANMININGJOURNAL.COM

2017-02-03 12:37 PM


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Invest Barbados ............................33 ....................... investbarbados.org J.H. Fletcher & Co. .......................19 ..............................jhfletcher.com Metso Minerals ............................47 ............. metso.com/grindingwears Murchison Minerals .......................23 ................. murchisonminerals.com Nuna Logistics ..............................29 .........................nunalogistics.com Ontario Natural ............................15 ... ontarionaturalresourcesforum.com Resources Forum PolyDeck Screen Corp. ...................31 ...........polydeckscreen.com/mining Redpath Mining ............................25 .......................redpathmining.com Rosta Canada ...............................13 ................................ rostainc.con Sandvik Mining ..............................2 ......................mining.sandvik.com SMS Equipment ............................48 ............................. smsequip.com SRK Consulting .............................27 ......................................srk.com CANADIAN MINING JOURNAL

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2017-02-06 3:04 PM


CSR & MINING

Ground-breaking report on engaging with aboriginal businesses for local procurement released By Michael Torrance

POSITIVE RELATIONSHIPS WITH LOCAL COMMUNITIES DEMONSTRATE RESPONSIBLE CORPORATE BEHAVIOUR AND CAN IMPROVE A COMPANY’S REPUTATION, BOTH FOR STAKEHOLDERS AND THE PUBLIC.

The report outlines the business case for procurement relationships with aboriginal business. Positive relationships with local communities demonstrate responsible corporate behaviour and can improve a company’s reputation, both for stakeholders and the public. Aside from the benefits to companies, these relationships are important for aboriginal business. The report notes studies which show that nearly 40% of all aboriginal businesses in Canada are working in mining or extraction related industries. The report also outlines some of the characteristics that make 46 |

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procurement relationships with aboriginal business unique. Procurement from aboriginal contractors and communities involves relationship building and sustained partnership development in a manner unique from the typical request for proposal style of supply chain contracting and service procurement that mining operations typically followed in the past. As such, procurement agreements with aboriginal suppliers need to be approached and understood differently than other procurement relationships. Shared or joint governance, monitoring and mediation are among the suggested feedback that was received by the authors of the report. Participants spoke of the importance of having a real and enduring presence in each other’s communities. Among the recommended best practice noted by the authors is: w To focus on relationships through strong communication including regular town halls or other engagement activities; w Find ways to build aboriginal business capacity such as through partnerships to increase training opportunities and develop community capacity; w Include procurement in the implementation of impact benefit agreements (IBAs) and encourage engagement between aboriginal businesses and procurement teams; w Develop key performance indicators (KPIs) to collectively monitor and check progress on supply contracts; w Use senior management to encourage cultural shifts and set a tone from the top; w Incentivize the procurement of services from aboriginal companies in the formal bidding process both for prime and subcontractors further down the supply chain; w Offering mentoring and training to new aboriginal suppliers on business and management fundamentals; w Unbundle contracts whenever possible to increase opportunities for small businesses. The report offers a framework for further analysis of this topic by Canadian mining companies seeking to build relationships and benefit from their ongoing relationships with aboriginal communities. It offers a readily available example of shared value that can be captured by companies operating in the vicinity of aboriginal communities beyond simply IBAs. Those companies that do this well will identify opportunities to build trust and partnerships that advance both the business and CSR objectives of the company and CMJ its stakeholders. MICHAEL TORRANCE is a lawyer with Norton Rose Fulbright, Toronto.

Photo: EtiAmmos, iStockphoto.com

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ngineers Without Borders (EWB) has released a ground-breaking report entitled “Partnerships in Procurement: Understanding Aboriginal Business Engagement in the Canadian Mining Industry”. The report provides useful background, analysis and recommendations for Canadian mining companies on engagement with aboriginal communities in local procurement and supply chains. The report presents the findings from a research study carried out by EWB’s Mining Shared Value program and the Canadian Council for Aboriginal Business (CCAB). The goal of the research was to identify the working relationships between aboriginal businesses and mining companies operating across Canada, in an effort to increase aboriginal supplier involvement and engagement in the supply chain of Canadian mining companies. The research involved interviews with people across Canada, from mining personnel involved in procurement to aboriginal business owners.

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2017-02-03 12:44 PM


Optimized mill lining design results in up to 40% less wear parts related downtime That’s how we make the big difference, the Metso Way.

Every grinding mill is unique, but they all have one thing in common: the need for optimal operation. Liner changes need to happen quickly and safely. Experience gained from over 8,000 mills world-wide combined with the market’s widest range of grinding wear parts and services mean we can design and select exactly the right parts for your mill. Coupling this expertise with a Life Cycle Services shutdown and wear parts optimization package will enable you to change wear parts less often, minimize planned downtime, and optimize your production. Find out how Metso grinding wears and services can make the big difference for your mill at metso.com/GrindingWears #TheMetsoWay

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2017-02-03 10:48 AM


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2017-02-03 10:48 AM


Canadian Mining Journal February/March 2017