Bemining issue10

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BIA: goldcorp mexico: perseus mining: ISSUE 10 | www.bus-ex.com/mining

argex titanium:

On the path to production The Canadian junior exploration company completes its transformation into a top quality supplier to the pigment industry

special report: greenland mining & exploration



business excellence

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

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BE Mining

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Be mining

8 mining

don’t stop believing

Mine: A Confidence Crisis looks at, among other issues, at cost control, commodity prices and whether return on capital can be improved.

14 executive insight

Randy Findlay

Randy Findlay, Sentinel Project Manager, discusses his involvement with the Trident project’s flagship Sentinel mine development, his proudest achievements and what others can learn from the success of Trident.

8

Event Focus:

18

18 Report

Exponor 2013

Playing host to more than 35,000 people and over 1,300 business meetings, the Exponor 2013 event truly exceeded all expectations and reaffirmed its importance to the mining community in Chile and beyond.

22 Dartel Electricidad The electrical experts

Commercial manager, Claudio Quiñones discusses the rich history of Dartel Electricidad, its support of the mining sector and its plans for the future.

4 | be mining


contents

28 special report: greenland

Mining & Exploration focus

services: 110 Argex Titanium

On the path to production

Discover how the Canadian junior exploration company completes its transformation into a top quality supplier to the pigment industry.

110 134

122 Devex

Introducing tomorrow’s smart mine Devex has rethought mine automation, taking it beyond the traditional fleet management mindset.

134 BIA

Architects of African growth

BIA’s operations in Africa and its contribution to the development of the continent.

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144

144 Grindex

THE ART OF STAYING DRY

One of the strongest brands in the world for dewatering pumps, Grindex is an important partner for mining, construction and infrastructure.

154 Filcon Filters An ambitious target

154

This South Africa-based company has set an ambitious target of 25 percent annual growth over the next three years.

Precious metals: 164 perseus mining

Born to seek gold

Perseus Mining continues to focus on under-explored gold assets in West Africa, a region it really understands.

164

6 | be mining


contents 194 Endeavour Mining

A gold producer delivering growth

Endeavour Mining has a growing portfolio of gold assets in West Africa, with three producing mines, a fourth nearing completion and promising development projects.

194

206 Goldcorp mexico

The precious heart of the Americas

Goldcorp’s Mexican operations provide an ever-growing pipeline of gold, silver and other metals.

metals: 218 Mwana Africa

Daring to discover the DRC

206

Mwana Africa hopes to establish its major zinc assets onto the global map.

mining Directory: 230 h logistics

THE POWER TO DELIVER ON TIME ANYWHERE IN THE WORLD

236

232 MINERP

ground breaking technology

234 muchina engineering supplying mines

236 spencer ogden MINING recruiting

be mining | 7


Don’t stop b

Mine: A Confidence Crisis looks at, commodity prices and whether re Words by

8 |

BE Mining

PwC

| Edited


Mining

believing

among other issues, at cost control, eturn on capital can be improved

d by

John O’Hanlon BE Mining

| 9


Mining

T

he latest in PwC’s Mine series of reports on the state of global mining paints a fascinating picture of an industry at a time of radical and rapid change, with plenty to cause sleepless nights to its executives and investors in the shorter term but with good prospects for those willing to stay the course. Mine has been looking at global trends for a decade – the current report, published in June and tellingly titled A Confidence Crisis is the tenth – and though it wields a broad brush one of the most arresting sections is the summary of figures from the top 40 mining companies by market capitalisation. This summarises revenues, assets, liabilities, expenditure and costs across the board, and shows how dramatically the industry has expanded over the period since 2003. There’s strong awareness at present of the shaky situation regarding mining stocks since the start of 2012, the long-term trend over the decade is more comforting. As the report puts it: “From January 2003 through April 2013, mining stocks are up 235%, while the Dow Jones is up 82% and the FTSE 100 is up 78%. While mining stocks have not fully kept up with commodity price increases, they have beaten the

“While mining stocks have not fully kept up with commodity price increases, they have beaten the broader markets” 10 |

BE Mining

broader markets. Although mining stocks have been more volatile than broader markets, falling harder during the global financial crisis and other dips, performance for the last decade is still good.” The industry has clearly outpaced the broader markets, it concludes. Break this down and the picture is mixed. Diversified miners did well in 2012: “From a market capitalisation perspective, the top 5 increases in 2012 had a combined gain of $61 billion. This included BHP Billiton, Rio Tinto, Xstrata, Grupo Mexico and Inner Mongolia Baotou Steel Rare Earth Hi Tech – three diversified, one copper, and one rare earths producer.” But gold miners found themselves at the bottom of that table – of the five companies whose market capitalisation shrank the most, four were gold producers. That was last year, though. By late April 2013, 37 of the top 40 had between them shrunk by more than $200 billion, or 17 percent of the 2012 year-end level. And the tough times for gold miners got worse: “The Top 40’s gold miners lost a further $58 billion, particularly due to a significant sell-off in April following the largest one day drop of gold prices ever.” That confidence in mining as a whole has been shaken by the recent performance of the industry is clear enough – the reasons less so. The report recognises that many issues are difficult to control – commodity price volatility for example, or the increased cost of labour and growing resource nationalism. This last factor represents one of the biggest risks the industry is facing as governments increase taxes and royalties or mandate greater local shareholding.



This is not limited to the emerging economies where so much new mining activity and investment is taking place – and incidentally where half the industry’s largest 40 players by market capitalisation now have the bulk of their operations. “The announcement of Australia’s Resource Super Tax, was a huge blow to mining companies,” it points out. “The global ripple effect has been to raise concern that if Australia, traditionally a mining friendly country, could do this, anyone could.” Elsewhere it points to Zimbabwe’s requirement that 51 percent of any mining project be held by indigenous Zimbabweans, similar provisions in Mongolia and Indonesia, and Russia’s restrictions on foreign investors seeking to acquire control of Russian mining companies or assets considered to be strategic. While recognising that China cannot continue to grow as fast over the next ten years as it did in the last, the report emphasises that its economy will continue to grow and that China will remain the biggest driver for demand across the board. “Domestic supply, particularly of coal, will continue to grow. Chinese companies will likely consolidate and with a few domestic mega-mergers and large overseas acquisitions, Chinese companies will likely be a large part of the future top 40, if not the top 10.” There are already seven Chinese companies in PwC’s list. So China is not only snapping up mining products by the shipload, but also fuelling growth in its own backyard. It is also becoming an important source of funding for the industry, Mine emphasises:

12 |

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Mining

“We have faith that the long term fundamentals will ensure mining is a great industry to be in for many years to come” “Chinese acquisitions make headlines and Chinese companies are some of the more active deal makers in the industry. In addition to direct equity acquisitions, Chinese companies are also investing in mine development and construction, and supporting infrastructure.” In the eight years since its 2005 edition Enter the Dragon which focused on China’s emerging impact on the industry, China has become a dominant force across the value chain. “While Chinese growth rates are slowing down, they are coming from a bigger base,” says Tim Goldsmith, Global Mining Leader for PwC in his executive summary. “This combined with the continued emergence of large developing economies such as Brazil, India and Indonesia, means future demand for commodities still looks healthy.” So despite poor results in 2012 all the news is not bad news. The top 40 increased dividends by nine percent to $38 billion – an average yield of 3.7 percent based on 30 April 2013 share prices, he says. “Shareholders have called for change and it’s started at the top. Since 2012 half of the Top 10’s CEOS have been replaced. But simply changing the captain doesn’t turn the ship,” he points out. “The future is about managing productivity and

improving efficiencies, both of which have suffered in recent years.” In addition to addressing leadership issues, mining companies have been taking steps to cut capital expenditure, the report finds: “Although 2012 was a record year for capital spending, the overall message from the Top 40 is that the capital expenditure tap is being tightened. Project hurdle rates have been increased, with some of the Top 40 stating that only projects with a return above 25% will be pursued.” Additionally, the industry has woken up to the fact that it needs to back away from peripheral projects and assets: “With the increased pressure from shareholders for investment returns and the shift in focus from growth to delivering profits, it has become a focus of the larger players to focus on getting the most out of their “tier 1” assets while divesting of their non-core assets.” Regaining investor confidence depends on how the industry responds to its rising costs, increasingly volatile commodity prices, and other challenges such as resource nationalism, concludes Goldsmith. “Now is the time to show that the industry can deliver in good times and bad. While currently there may be a confidence crisis, we have faith that the long term fundamentals will ensure mining is a great industry to be in for many years to come.”

Full report To download the full PwC mining report, Mine: A Confidence Crisis. Click here

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Executive Insight

Randy Findlay Randy Findlay, Sentinel Project Manager, discusses his involvement with the Trident project’s flagship Sentinel mine development, his proudest achievements and what others can learn from the success of Trident Words by

Will Daynes

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Career wise, how did you come to be a part of First Quantum Minerals? After ending a five year retention based contract with Fluor I had a keen desire to find a company that could offer a better place in which to achieve my long term goals. With three other offers on the table from Kazakmys, Newmont and Fluor, I was contacted by First Quantum Minerals Limited (FQML), upon which I began researching the FQM execution philosophy. What I found was that FQM was unique in that it managed the engineering, construction execution and commissioning phases, before then turning things over to its operations team. It was this that convinced me to join. These dynamics are extremely rare in this industry and what they do is allow me, as a Project Manager, to drive the entire process optimally. Who has been your inspiration professionally? There have been a number of people, each for different reasons, but the two that stand out to me are Bob Ellis, Capital Vice President of Duke Energy and Martin Lacey, who is Vice President of Camaco Mining.

What do you consider to be your major achievement (in life or business)? That would be the development of a target approach towards contracting methodolog y. This incentiv ised approach to contracts puts the mine owner and contractors on the same side of the field, with time and costs acting as the opponent. When did you first become involved with the Trident project and what were your first impressions of its scope and aims? I consider myself the initial developer of the Sentinel project construction team execution plan. The key to this plan was the development of a strong schedule, team mentoring and development, providing competent job descriptions and site management behaviours in order to reduce construction time and costs. The overall goal was to develop Sentinel to add revenue stream to the company much earlier than was originally envisaged. The entire package with town development, housing and commercial areas, schools, banking, shops and power reticulation, meanwhile, is a key

“I consider myself the initial developer of the Sentinel project construction team execution plan. The key to this plan was the development of a strong schedule, team mentoring and development� 16 |

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Executive Insight

“Aside from pulling the construction schedule for completion ahead by three months we are also incredibly proud of reaching seven million man-hours without a lost time accident� deliverable to retain labour long term with minimal cost to operations and, most importantly, create a positive effect on the development of Zambia’s Northwestern region. What do you consider to be some of the bigger milestones reached on the project? Aside from pulling the construction schedule for completion ahead by three months we are also incredibly proud of reaching seven million man-hours without a lost time accident and, of course, developing a team that has proven to be able to provide excellent bench strength for projects. What lessons do you think other mine operators can learn from the Trident project? That schedule and resource development, with frequent, positive and purposeful interaction, provides the best foundation for project execution.

their careers and were part of a team that consistently worked together to achieve excellence. Which one piece of wisdom would you pass on to your successor? Always think about what else you can do to gain progress and maintain quality, treat people fairly and spend the time needed to develop and support your team.

What do you personally hope will be the long-lasting legacy of the project? I hope that people on the team feel they have accomplished the best project of

Coming soon: An in-depth look at First Quantum Minerals - Trident project.

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EVENTS

Exponor 2013 Playing host to more than 35,000 people and over 1,300 business meetings, the Exponor 2013 event truly exceeded all expectations and reaffirmed its importance to the mining community in Chile and beyond

18 | Be mining


Report

I

n the days leading up and between 17 and 21 June 2013, thousands of mining professionals and businessmen and women descended upon Antofagasta, Chile for the bi-annual International Exhibition of the Mining Industry, Exponor 2013. Heading into the event hopes were high and with it now several weeks in the past the organizers can be hugely proud that it absolutely exceeded all expectations. Indeed, by the end Exponor 2013 a total of 1,383 business meeting had taken place, as well

as 96 technical talks and eight technology tours. What this means in numerical terms is that the events’ 1,120 exhibitors successfully managed between them to secure more than $750 million in projected business over the next twelve months. Such a large amount of capital reaffirms the hugely important contribution Exponor continues to make now only the mining industry, but the national and regional economy also. In addition to its economic impact, the event’s organisers have been

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The

differenceis in the

service

Dartel Electric, is an institution dedicated to the distribution and marketing of Electrical, the most famous and prestigious national and international brands, to meet the market needs in high, medium and low voltage. We seek to be strategic partners with our clients, providing a complete service and excellence. www.dartel.cl


EVENTS

keen to highlight the importance of Exponor as a setting for debate on the issues currently facing the mining industry and for bringing together the three most important executives in the field to discuss said topics. “It was extremely encouraging to see that the Executive President of Antofagasta Minerals and Exponor 2013, Diego Hernández, the President of Minera Escondida, Edgar Basto, and the Executive President of Codelco, Thomas Keller all shared their views on the principal challenges facing the mining industry today, which are related mainly to the issue of energy,” said Antofagasta Industrial Association President, Marko Razmilic. Razmilic also reiterated the message sent by the industry to national authorities that “the opportunities for our country’s development lay in Antofagasta. Antofagasta

Report

should be the first truly developed region of Chile, an example for the world that the mining industry is not a curse, and can be a sustainable support to communities.” Razmilic also stated that during the week of Exponor a total of 35,000 people visited the event. The event had a particular importance for international relations, forging new links with Asian companies in particular. With regards to the challenges for the next Exponor, the AIA General Manager explained that these will center on improving services at the event site more than increasing surface area or exhibitor numbers. For more information about Exponor 2013 visit: www.exponor.cl

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event focus:

The electrica experts Commercial manager, Claudio Qui単ones discusses the rich history of Dartel Electricidad, its support of the mining sector and its plans for the future

written by: Will Daynes research by: Louisa Adcock

22 | BE Mining


Dartel Electricidad

al

BE Mining | 23


Event focus:


Dartel Electricidad

W

ith a total of eleven possesses, thanks to the length of time that branches spanning the it has been around in Chile, is an unrivalled length and breadth degree of knowledge and experience that its of Chile, Dartel competitors can only dream of having. It is Electricidad is dedicated this expertise that has seen it take on the role to the distribution and marketing of some of of product distributor for all manner of vital the most famous and prestigious national and projects including industrial illumination, international electrical brands. These brands automation and power distribution. and solutions meet the high, medium and low “The mining and construction sectors are voltage needs of Dartel’s customers within the the two principle markets that we have grown industrial, fishing, construction, engineering, with most significantly in recent times and we telecommunications and mining sectors. have no doubt that this trend will continue,” “We have been present in the Chilean Quiñones explains. “In the last year alone market since 1970 and were the first company the mining industry experienced exponential of its kind to set itself up to growth here in Chile and this service the growing mining too we expect to remain the market in this country,” case. What this often results states commercial manager, in as well is the growth Claudio Quiñones. “Through on the construction sector the distribution of brands and both are intrinsically The year Dartel first like Legrand, Siemens, linked to the expansion of became established the country as a whole.” 3M, Lovato Electric, Parker in Chile With copper accounting for and Schneider we are more than 40 percent of all today involved throughout the entire mining process, specialising of Chile’s annually exported goods it stands in a number of specialised fields such as to reason that a company like Dartel would automation solutions.” continue to target the mining sector will all According to Quiñones, the principle its available resources and strengths, and strength that has served Dartel so well over as Quiñones highlights this is undoubtedly more than four decades of existence is the the plan. “All the signs point to the fact high quality service it delivers to its customers. that the mining market in the country will Dartel’s commitment to providing its customers continue to expand and will do so for at least with the required products and solutions the next five years or more.” That is not to say that the market is not quickly and expeditiously is one that exists throughout the company and is ingrained in without it challenges. “The unfortunate the minds of its almost 400 employees. reality,” Quiñones continues, “is that with In addition to a strong desire to meet the the cost of copper today being relatively low consumer needs of its clients what Dartel also we have had to begin looking towards other

1970

BE Mining | 25


Event focus:

potential fields of growth, for example the industrial markets that exist in the South of Chile. When we have low copper prices that result is usually that mine operators

scale back on certain high-cost projects and clearly this has an effect on us. Where we prosper is in the fact that our knowledge and experience allows us to be present in a mix

“The principle strength that has served Dartel so well over more than four decades of existence is the high quality service it delivers to its customers� 26 | BE Mining


Dartel Electricidad

of industry sectors all at one, meaning that we can weather any negative trends in one sector by focusing on others.” Being willing and able to develop the way it operates in Chile is clearly a hugely important trait for Dartel to possess. It is also one that will be of great use as the company looks to the next stage of its growth. “One of the things we are examining,” Quiñones concludes, “is the possibility of expanding our presence into another country at some point in the future. While we are a

national company, and are hugely proud of that, we are not blind to the opportunities that exist in sectors like mining in neighbouring countries such as Peru and Bolivia. While such talks are at a very, very early stage we are definitely laying down the groundwork for what is our long-term vision for Dartel.” For more information about Dartel Electricidad visit: www.dartel.cl

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airgreenland.com

We know the drill With decades of experience acquired from Arctic operations, Air Greenland is your reliable and dynamic partner for exploration. You will benefit from the fact that we are part of the Greenlandic society. We have the advantage of a broad network. We know the local requirements and we have an infrastructure in the form of hangars and aircraft all over the country. Every single job is specifically tailored to suit the customer’s requirements. You just have to ask.

Air Greenland Charter Tel. +299 34 34 34 Fax +299 32 08 98 e-mail: glcharter@airgreenland.gl www.airgreenland.com/charter


special report

greenland Mining & Exploration focus

produced by:

in association with:


special report: greenland 32 at a glance

the vital statistics

Some key facts and figures about mining operations in Greenland.

34

34 mining in greenland

A land of opportunity

From the near collapse of its mineral resources sector a decade ago Greenland has transformed itself into one of the world’s most exciting locations for major exploration and development.

42

42 BMP Greenland

Rich cake around the icing

Heavily endowed with minerals as well as commanding important offshore hydrocarbon reserves, it is going to be a busy place over the next decade or so.

52 Czech Geological Research Group (CGRG Ltd) Breaking new ground

The incredible progress CGRG has made when it comes to identifying regions rich in strategic and precious metals.

62 NunaMinerals A/S Exploring the mineral potential of Greenland

62 30 | special report

The only truly Greenlandic company among the many that have been attracted by the vast mineral potential of one of the world’s last remaining frontiers.


contents

72

72 Avannaa Resources Exploring a new frontier

Chief Executive Officer, Nicholas Rose, explains how Avannaa Resources’ role as a prospect generator is helping to lay the foundations for the future of Greenland’s mining sector.

82 21st North

The prospect of partnership

82

21st North develops mineral projects in Greenland, a territory that is today long on interest but short on experience – experience is exactly what this company brings to the party, along with some very advanced technology.

92 Platina Resources The world’s new platinum preserve

Platina Resources aims to be the first company to establish a platinum group metals mine in Greenland. CEO and Managing Director, Robert Mosig discusses the reasons why he is confident this can be achieved.

100 Tanbreez

The miner with the mostest

100

The Tanbreez project in Greenland has the potential to disrupt the world market in a group of minerals that’s making a political as well as a financial impact.

special report | 31


the vital statistics Area 2,166,086 km2 Population 56,370

currency Danish krone (DKK)

official language Greenlandic

Capital Nuuk 1

Did you know?

81%

Of Greenland is covered in ice

55%

Of the companies in Greenland are represented by Australia and Canada

32 | special report

2

Key Mine sites 3

1. Langø 2. Maarmorilik (‘Black Angel’) 3. Qullissat 4. Eqalussuit 5. Seqi 6. Ivittuut 7. Kobberminebugt (‘Josva’) 8. Amitsoq 9. Nalunaq 10. Malmbjerg 11. SMestersvig (‘Blyklippen’) 12. Clavering Ø

4

5

6 7 8

9


greenland at a glance

Exploration expenditure 2002 to 2010 600 500

DKK millions

400 300 200

100 0 2002

2003

2004

12

11

10

2005

2006

2007

2008

2009

2010

Year

minerals found in greenland Metals • Beryllium • Chromium • Copper • Iron • Lead • Molybdenum • Nickel • Niobium • Thorium • Tungsten • Uranium • Vanadium • Zinc • Zirconium

Precious Metals • Gold • Osmium • Palladium • Platinum • Silver • Titanium

Minerals • Barite • Celestite • Coal • Cryolite • Graphite • Olivine • Phosphorus

Semi-metallic • Antimony Gemstone • Diamond • Ruby

special report | 33


A land of op

From the near collapse of its mi ago Greenland has transforme most exciting locations for majo

written by:

34 | Special report


mining in greenland

pportunity

ineral resources sector a decade ed itself into one of the world’s or exploration and development

Will Daynes

Special report | 35


F

riday 21 June 2013 marked a very special day in the calendar of the people of Greenland, being as it was the country’s National Day, a day used to celebrate the country’s cultural value and national identity. The date is also significant in that it marks the fourth anniversary of the signing of the Act that ushered in Greenland’s self-governance. With the passing of this Act the government of Greenland also gained the right to take over a number of key responsibilities, including mineral-resource development. Following on from the country’s move to self-governance came the passing of the Inatsisartut Act No7 (of December 7, 2009) on mineral resources and activities on 1 January, 2010. This Act on Mineral Resources helped establish the foundation and framework for future control of mineral resources. The establishing of the Act on Mineral Resources was the result of a shared belief amongst political groups that Greenland needed to move

36 | Special report

towards the development of its mineral resources sector in order to create an industry that would contribute massively to the economic growth of the country and create employment opportunities for its people. The outlook for Greenland’s mineral resources sector today is certainly much brighter than that which the country’s Bureau of Minerals and Petroleum (BMP) faced in 1998 when it took over the responsibilities then held by the Danish authorities. It was at that time that the industry was suffering from a decline in the number of licences, and more importantly in general interest from companies in exploring Greenland. This trend would continue before reaching an all-time low in 2002. It was at this point that the BMP designed a marketing strateg y to promote Greenland’s vast mineral potential on a systematic, continuous basis. The focus was to be targeted particularly, but not exclusively, towards Australia and Canada, the two largest mining countries in the world. The results of this strategy began to bear

Tikiusaaq Carbonatite Complex, West Greenland (REE) – Drilling at the prospect in 2011, glacial tongue of the inland icecap in the background


photo: nuna minerals

mining in greenland


YOUR PROFESSIONAL PARTNER IN GREENLAND CONSULTING SERVICES • OIL & MINING • Environmental baseline studies and EIA’s • Social baseline studies and SIA’s • Stakeholder engagement • Liaison with local authorities • Building and construction in the Arctic • Civil works: Airports, roads, water supply, sewerage • Design documents, tender documents and contracts • Project management and approval procedures • Supervision, inspection and QA

Head office: ISSORTARFIMMUT 13, P.O. BOX 1024, DK 3900 NUUK • Phone: +299 34 37 00 • www.inuplan.gl


mining in greenland lns greenland LNS Greenland A/S (LNSG) was established in 1990 under the name R.C. Entreprenorservice A/S. Based in Qaqortoq, South Greenland, it was one of the first Greenlandic companies to provide services to the oil, gas and minerals industry in Greenland. Today LNSG is a part of the Norwegian LNS Group that consists of 15 subsidiaries, of which many possess heavy arctic experience gained from activities in Spitsbergen, Greenland and Antarctica. LNSG has offices in Qaqortoq and Nuuk, the capital of Greenland, and provide professional services within marine operations, diving, transportation, contracting, construction, tunnelling, camp solutions, catering, logistics and various other tasks tailored to specific Greenlandic industry practices. www.lns.no

“BMP designed a marketing strategy to promote Greenland’s vast mineral potential” fruit in rapid order with a growing number of mineral companies showing interest in exploring Greenland from deposits taking the number of granted mineral licences from 17 in 2002 to 94, including applications, in April 2011. In the same period the number of non-exclusive prospecting licences went from six in 2002 to 20 in April 2011. With the near collapse of the mineral resources

sector in 2002, the following year saw Greenland’s total approved licence area fall to an all-time low with only 5,714 square kilometres handed out to exploration companies. It was the promotion of Greenland’s potential at a number of major mineral conventions in Canada, combined with annual visits that BMP representatives made to Australia that triggered an

An Air Greenland chartered helicopter making a drop-off

Special report | 39


photo: 21st north

increase in applications from these countries. By 2005 the licence area in Greenland had more than doubled to 12,986 square kilometres, a figure that continued to grow as more applications were submitted. In the recent years Greenland has experienced a higher

growth in area applied for, than the area being reduced or relinquished as a result of exploration maturity. The result is a still growing area for exclusive exploration licences. In April 2011 the licence area passed 40,000 square kilometres, including pending applications.

With this increase in licences being granted and licence area so to came a rapid increase in exploration expenditure in Greenland. This growth resulted in record years in 2005, 2007, 2008 and 2010, when more than 70 million euros was approved as exploration expenditure

“Greenland has actually experienced a higher growth rate than that of the mineral resource giants of Australia and Canada� 40 | Special report


mining in greenland

Morning fog lifting during field work in the Akuliaruseq region, West Greenland

for exploring the country’s mineral potential. Similarly the country has witnessed a dramatic increase in the amount companies have spent towards mine construction and in preparing to begin exploitation operations. Taken into context these figures and statistics highlight an incredible fact, and that is that in real terms during the last decade Greenland has actually experienced a higher growth rate than that of the aforementioned mineral resource giants of Australia and Canada.

It is clear for all to see that the general tendency since 2002 has been growth in all areas of the mineral industry in Greenland. In the time from 2002 up until April 2011 the number of mineral licences increased more than fivefold, and the licence area increased more than six fold. These factors shine the spotlight not only on the growth in the licence area and numbers but also in the maturity of the different exploration projects, as exploration expenses tend to rise as a project matures over time.

For the time being no decline has been seen in the number of exploration licences as a consequence of the economic recession, and applications are still coming in for new licences. The growing interest from new parts of the world indicates that Greenland is becoming present and visible as a viable mineral resource country. With the current tendenc ies Green la nd expects to see continuous growth in the mineral industry in the country for many years to come.

Special report | 41


Rich cake ar

Greenland is the world’ heavily endowed wi hydrocarbon reserves:

writt 42 | special report


BMP Greenland

round the icing

’s largest island, nearly a third the size of Australia and ith minerals as well as commanding important offshore it is going to be a busy place over the next decade or so

ten by: john o’hanlon | research by: richard halfHide special report | 43


Drilling activity at the Isua banded iron formation


BMP Greenland

T

he Bureau of Minerals and Petroleum is a Greenlandic government agency, working under the Ministry for Industry and Minerals and responsible for overseeing the growth of the nation’s resources. This is a burning issue in this volatile nation, which has just appointed its first female Prime Minister who is clearly keen to encourage the country’s emergent mining industry and has taken the initiative to lift the existing ban on the extraction of uranium. The island has the potential for very large deposits of uranium (and almost everything else it would appear) but as an independent state within the Kingdom of Denmark it has previously stuck to that country’s interdict on dealing in any way with radioactive materials. The next ten years will be interesting, and have the potential to change completely the political and social dynamics of Greenland. However the impression that Greenland’s appearance on the world minerals stage is an unexpected phenomenon needs to be dispelled says Jørn Skov Nielsen, Deputy Minister at the Ministry of Industry and Mineral Resources: “There has been a gradual build-up in the mineral sector over the last ten years. Over that time the number of licences has increased and a number of small companies are taking them up.” In 1998 when the BMP took over from the Danish authorities, he explains, the minerals industry in Greenland saw a decline in the numbers of licences, and also a decline in general interest in exploring Greenland and its mineral potential. It hit an all-time low in 2002. As a response, the BMP designed a

special report | 45


marketing strategy to promote Greenland’s mineral potential based on the experience of the two biggest mining countries in the world: Australia and Canada. In a few years the downward trend was reversed. From 17 exclusive licences in 2002 the number grew to more than 94 in 2011. Nevertheless, it has proved difficult to secure the necessary investment and commitment to turn prospective areas into producing mines. One of the only mines currently producing in Greenland is gold from the Nalunaq mine owned by the UK based Angel Mining (Gold), and that is reaching the end of its viable life. The largest, most imminent and most viable project in the country, and one having the scale to make a real difference to the economy, is London Mining’s iron ore project at Isua, 150 kilometres to the north of the capital Nuuk. “This is a very big project in Greenland terms, with a capex of around $2.3 billion,” says Nielsen. “If it goes ahead it will have the potential to create 800 jobs, and bring in considerable revenues for the government in terms of taxes, royalties and economic stimulation.” Environmental and social impact assessments have been completed as well as a bankable feasibility study for an operation of 15 million tonnes per annum. BMP is currently considering

an impact benefit agreement (IBA) that will outline the impacts of the project and how the community can participate, preparatory to issuing a mining licence. Though it only has a population of 57,000, Greenland suffers from unemployment like everywhere else. For millennia its chief industry has been fishing, which accounts for 90 percent of its exports. Whatever government is running the country,

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BMP Greenland

Nalunaq goldmine camp in South Greenland

diversifying the economy has Mineral Resources. “It will to be a priority, though at the have to be sustainable and same time it will be essential in harmony with fishing, to protect and preserve the tourism and our natural fishing industry and the environment and ecology. Exclusive licences communities that depend on That way society will be able granted in 2011 it. The current administration to move forward in pace with has no interest in facilitating development.� So the current a runaway bonanza on the state is that a number of back of rising commodity prices. Minerals, projects are on the starting blocks but the and possibly hydrocarbons will play their gun has not yet been fired – when it is, the part in the diversification process but it can race will be a marathon rather than a sprint. only be allowed to happen in a controlled The same thing applies to offshore way, says the deputy minister. hydrocarbons. There are currently 20 exclusive Mining development and the inward and 25 non-exclusive exploration licences, says investment it brings should be encouraged, Stendal, involving major players like Statoil, agrees Dr Henrik Stendal, Head of the Geology Exxon, Dong Energy, ConocoPhilips, Shell, Department in the Ministry of Industry and Cairn Energy and Maersk Oil as well as the

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national oil and gas company Nunaoil. “There northwest of Greenland was 31 billion barrels is also a licensing round off East Greenland and for the northeast 17 billion barrels. Both - but it is all exploration at this stage. It will estimates are for oil and gas combined, take a number of years at best before any measuring the latter in oil-equivalent units. production can start. It has been demonstrated Onshore, apart from the iron ore project that there is a viable hydrocarbon system in already mentioned, there are two potentially Greenlandic waters but we have not found significant mining projects that could be commercial quantities yet,” he adds. advanced in the near future. One is the Exploration drilling in 2010 and 2011 rare earth elements (REE) discovery of was followed by the acquisition of useful Kringlerne owned by the Australian Tanbreez quantities of seismic data. The in south Greenland, which also contains significant best estimate of the available resources comes from amounts of zirconium. geophysical data provided by “They are experimenting the United States Geological with how best to process Survey (USGS) the ‘mean’ the ore, but this is one of Population of Greenland the largest reserves of heavy estimate for the area to the

57,000

Activities at the former Seqi olivine mine, in operation from 2004 to 2009

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BMP Greenland

Processing of ore at the Seqi olivin mine

“We are a fishing nation and want to keep that industry protected” rare earths in the world, another world class resource.” With more than four billion tonnes of this ore in south Greenland, and China’s ability to supply it declining, Greenland’s potential to satisfy at least a quarter of global demand in the future means a lot to European and American industry. An application for a small gemstone project in the southwest Greenland is going through currently, Stendal adds, but attracting even more interest is an application expected later this year do develop a zinc deposit in the

north. “The company has completed a prefeasibility study on the deposit, and believes it can be mined commercially,” says Stendal. “It is in a really remote area, but this is a world class deposit. One of the biggest challenges up there is to get the ore out, because of the ice.” This is a difficult but not impossible task, he explains: there is a two month window in the summer when ships can get in to take off the concentrate, though icebreakers will probably have to be used. The further north you go the more

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Drilling at the Maarmorilik lead – zinc deposit


BMP Greenland

“We are determined that mineral exploitation will happen in a controlled and responsible way” ice there is, but it’s common knowledge that the ice cap on Greenland is receding. That’s alarming news for the world, but it is making exploration and mining easier. Henrik Stendal points to the Black Angel mine which yielded very high quality zinc ore till it was mothballed in 1990 because of low world prices and the fact that the ore was nearly exhausted. However, receding ice has revealed a larger surface deposit, So the mine might open again within a few years. There’s considerable upside in these projects, but don’t look for a bonanza, says the prudent Jørn Skov Nielsen. Mining companies will usually have to build their own roads and harbours and generate their own power to operate in these remote places. Greenland is as big as Western Australia but it is not as easy to get about. Infrastructure will increase their costs. Then they have to consider environmental protection and rehabilitation costs, he points out. “We are a fishing nation and want to keep that industry protected – our environment has been a priority whatever the colour of the government.” before mining starts enough money must be deposited to cover the cost of returning the site to its original state, he says, including the removal of roads and harbours.

One thing that Greenlanders have been worried about is that a quantity of foreign workers, particularly Chinese, would come in and take all the new jobs. “We do have a challenge to educate our people.” admits Nielsen. But the government has done its bit by setting up the Greenland Mining School in Sisimiut, and the mining companies will be expected to participate in competence building, he stresses. Making sure the population has a strong voice in the future development of the resource sector is assured by following the successful Canadian model where impact and benefit agreements are the norm, he says. Greenland is a huge land mass, undoubtedly rich in minerals and probably rich in offshore oil and gas. However for the time being it is neither a mining nor an oil economy. “We are getting close to mineral exploitation but oil production will not begin within the first decade, and we are determined that this will happen in a controlled and responsible way,” concludes Jørn Skov Nielsen. “The last thing we want is a free-for all!” For more information about BMP Greenland visit: www.bmp.gl

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Czech Geological Research Group (CGRG Ltd)

Breaking new ground The incredible progress CGRG has made when it comes to identifying regions rich in strategic and precious metals in what is one of the today’s most exciting parts of the world for mining

written by: Will Daynes research by: Richard Halfhide

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B

ased purely on its geological structure alone, Greenland has what the vast majority of industry experts consider to be highly favourable conditions for the development of its own mining sector. Indeed its geographical location between Europe and the United States, combined with the high prices attainable for most of the raw

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materials that are present there, partially offset its absence of infrastructure and of sources of energy, and the harsh climatic conditions of the country. Established by a team of Czech geologists and businessmen in 2011, the Czech Geological Research Group (CGRG) was created specifically to obtain exploration licences in Greenland as a junior exploration


CGRG Ltd

Traill Ø - Central part of Kap Simpson intrusive complex

company, using funding obtained from private sources. “The founding of the company,” states Managing Director, Petr Dvorský, “was preceded by approximately two years of careful exploration of the potential of this business to succeed. Upon establishing ourselves in 2011 we applied for our first licences in Greenland, which were

subsequently granted, before commencing with our first field studies that same year.” Today CGRG is tirelessly moving forward with its analysis of Greenland’s geological environment, with its team of geologists working intensively through a number of strategic tasks. These tasks include the re-processing of legacy Aeromag data from the west and south of Greenland that

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2011 The year that CGRG was established

Milne Land - shallow auger drilling in the area of Mudderbugt

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the company purchased using the latest processing techniques, as well as working alongside the Geological Survey of Denmark and Greenland (GEUS) in preparation for the 2014 season. “In addition to our existing Kap Perry, Traill and Milne Land licences,” explains Jan Štembera, Vice President of Exploration, “we also applied for two additional licences, Ameralik on the west coast and Igaliku in the south of the country, in early January. Moving forward we aim to begin conducting basic geological surveys on these two new licences during 2014.” In addition to the work it plans to carry out on Ameralik and Igaliku, the company has also submitted a request to extend its existing Milne Land licence. It is here that CGRG has already uncovered a series of promising geological anomalies that suggest a massive amount of future potential for new rare earth discoveries. “I think we managed to choose the locations of our licences very successfully,” Dvorský continues, “particularly in terms of their high potential for bearing the commodities that are in our viewfinder and that coincide in many respects with the strategic needs of the majority of European consumers. In this respect we find ourselves


CGRG Ltd

Milne Land - erosional remnants of Jurrasic sediments in the area of Charcotgletscher

continuing with the gradual sophisticated expansion of our purposefully established licences, which we see huge potential in.” Despite the obvious advances the company has made in a relatively short space of time, CGRG has not been immune from the many challenges and risks that Greenland possesses. One of the biggest risks faced by any company looking to operate in

what is essentially uncharted land is the underestimating of the need to have all the necessary logistical provisions in place. Whereas in populated countries a missing part or spare can typically be obtained in a matter of hours or day, in Greenland this becomes weeks. It is for this reason that CGRG works closely with partners like Polog, the Danish logistics company which

“The Czech Geological Research Group (CGRG) was created specifically to obtain exploration licences in Greenland as a junior exploration company” special report | 57


“Our greatest asset is undoubtedly the quality of our staff, who, as leading experts in their fields, establish the basis for our success�

Milne Land - radiometric survey of fossil beach sediments (fossil placers)

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CGRG Ltd is a recognised specialist when it comes to logistics in the high Arctic. Of course then there are the unique climate conditions that Greenland is known for. “In many of the areas in which we are working, particularly north-west Greenland,” Dvorský says, “it is of huge importance that we ensure the accurate timing of work, whilst at the same time remaining very flexible, because at the end of the day, no matter how perfect the plan, the weather can completely disrupt it. In order to try and combat this we rely on cooperation with Polog and local people, and it is this cooperation that we find the most valuable asset in the fight against inclement climate. We are presenting an elaborate concept and people knowledgeable about the local conditions are very effectively helping us to realise this concept.” In CGRG’s home country of the Czech Republic there is a well held understanding that all geological activities should be carried out in the most environmentally conscious fashion. CGRG has transported this philosophy over to Greenland where its geologists are adhering to all the environmental standards and regulations related to geological exploration in Greenland.

Milne Land - waterfall in the area of Vinkeldal

In Dvorský’s eyes this is yet another example of the invaluable efforts made by CGRG’s employees throughout the business. “Our greatest asset is undoubtedly the quality of our staff, who, as leading experts in their fields, establish the basis for our success. It is our steadfast belief that in this line of work nothing can be left to chance or circumvented. We are pleased with the fact that Czech geologists like ours have a worldwide reputation as being the best and we can rely on them completely.” With the additions of the Ameralik and Igaliku CGRG will hold a total of five

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Traill Ă˜ - alteration zone in the area of Dreibuchten


CGRG Ltd properties, a large number for any junior mining company. However, as Štembera goes on to highlight, the potential that these assets possess far outweigh the challenges that arise from having so many assets at one time. “If you look at the map you will see that around Ameralik there is literally nothing for hundreds of kilometres along the coast. That is green pasture, an unexplored area and we have high hopes for that area, as we do for Igaliku. At both we need to do the basic geological sampling, conduct basic field work and analyse samples and that is the plan for next year.” CGRG believes that it has a valid concept and sufficiently high-quality sources of information to be able to gradually build up a network of exploitable deposits of its raw materials of interest. “We are putting a lot of effort into the success of our programme, starting with the continuous work of our geologists and the obtaining of new data, and concluding by providing support for the development of new technologies applicable to geological surveying,” Dvorský concludes. “We believe that Greenland has the potential to provide our European industry with a certain degree of independence from the often very distant and uncertain suppliers and we are glad that we, as a Czech company, represent a part of this positive process.” For more information about CGRG Ltd visit: www.cgrg.cz

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Exploring the m potential of Gre

NunaMinerals A/S is the only truly Greenlandic compan among the many that have been attracted by the vast m potential of one of the world’s last remaining frontiers

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

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NunaMinerals

mineral eenland

ny mineral

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N

unaMinerals is at the forefront of gold exploration in Greenland – and it is a company with a proven record of success. Its CEO, Greenlandic geologist Ole Christiansen was responsible for the discovery and initial development of what remains today the country’s only producing mine, the Nalunaq Goldmine in South Greenland, as well as the Seqi olivine mine near Maniitsoq in West Greenland, currently on ‘care and maintenance’. NunaMinerals is currently working hard to develop the next generation of gold mining prospects. “Our primary focus and internal expertise has always been and will continue to be gold,” says NunaMinerals’ Chief Geologist, Joshua Hughes. In fact almost all his and the company’s efforts are currently going into fast tracking the company’s Vagar gold discovery, which he says, represents the most significant discovery ever made by NunaMinerals since its inception in 1998. Vagar is located only 25 kilometres from existing mining infrastructure at Nalunaq, and only eight kilometres from an ice-free deep water fjord allowing year round access. Vagar is an early stage project, which was tested by a limited drilling program at the Amphibolite Ridge target, for the first time in the summer of 2012. Despite the limited campaign, the results were enough to convince Hughes and Christiansen that the project has significant commercial potential (for example 57.4 metres with 1.33 grams per tonne (g/t) gold in the ‘discovery hole’). So this summer will see further drilling as NunaMinerals moves towards its next major

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Moving a drill rig at the Amphibolite Ridge target using an Air Greenland chartered helicopter


NunaMinerals


goal, a listing on the Toronto Stock Exchange (TSX), using Vagar as its ‘qualifying project’. The company is currently listed on the NASDAQ OMX Copenhagen Stock Exchange, with the Greenland Home Rule Government representing the single largest shareholder, controlling just over 33 percent of the shares. A listing in both Denmark and Canada would give the company exposure to a whole new source of capital. “We are pursuing a listing on the TSX to expose us to a wider base of investors who are more experienced with the mineral exploration industry, as we begin to progress Vagar through to resource definition over the next few years,” says Hughes. As a company focused on gold NunaMinerals believes it is sitting on a previously unsuspected asset where Vagar is concerned. The gold mineralisation at Vagar displays numerable geological similarities with the highly productive gold deposits of the Tintina Gold Province of Alaska and the Yukon. The company firmly believes Vagar has the potential to host bulk mineable gold deposits of significant proportions. “It is not a single deposit but a whole belt of gold mineralisation stretching over 150 kilometres – the Nanortalik Goldbelt,” explains Hughes. “What is significant is that earlier explorers in South

Greenland had never realised the potential for intrusive igneous rocks to contain gold – their focus has always been limited, targeting gold bearing quartz veins hosted within non-granitic, prominently mafic, packages. The fact we are now finding gold conforming to Intrusion Related Gold Systems (IRGS), a deposit type that has never been previously tested in the region,

“Our primary focus and internal expertise has always been and will continue to be gold” 66 | special report


NunaMinerals

Inspecting drill core from the ‘discovery hole’ at Amphibolite Ridge

opens up huge areas of NunaMinerals’ project of southern Greenland for gold potentially ‘company making’ exploration. In addition to proportions, it has a further the high-grade quartz veins very promising gold property (up to 1,013 g/t gold at the at their Storø project within Total licence area held ‘Amphibolite Ridge’ target), the Archaean Nuuk Fjord by the company the granitic host rocks Greenstone Belt, conveniently located only 40 kilometres themselves are also gold mineralised, offering significant tonnage from the capital. Over 15,000 metres of potential. This marks a paradigm shift in drilling has already been competed at Storø Greenlandic gold exploration and our new to date. Of the approximately 7,500 square approach is already yielding results. As a kilometres of exclusive exploration licences company we have a first mover advantage, NunaMinerals holds at present, nearly 6,500 with some of the best licences for gold, are primarily prospective for gold. NunaMinerals’ strategy is to concentrate covering nearly all of the known gold occurrences in southern Greenland.” on its core gold activities while still So while Vagar is expected to be participating in other mineral projects by

7,500 km2

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means of joint ventures. “Previously we have had partnerships with majors including Rio Tinto and Implats. We recently signed a Memorandum of Understanding with Korea Resources Corporation (KORES), a state owned exploration company, and are currently in active discussions with a number of other international parties, which we are confident will lead to the creation of joint venture partnerships on several of our projects within a one to two year window,” states Hughes. In addition to its gold assets NunaMinerals possesses a varied exploration portfolio incorporating base and specialist metals, as well as diamonds. One such project is Ymer Ø, East Greenland

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a high-grade rare earth elements (REE) deposit, with associated tantalum and niobium credits, at the Qeqertaasaq carbonatite complex of West Greenland. The simple carbonate mineralogy of the ore from Qeqertaasaq makes it amenable to low cost acid leaching, requiring no pre-concentration or grinding, entirely eliminating a substantial proportion of the projected processing costs. NunaMinerals is actively working alongside the US based company, ‘IntelliMet’ to develop a metallurgical flow sheet for the ore using their revolutionary selective solid phase extraction technology. The second is at Ymer Ø in East Greenland which hosts high concentrations of antimony,


NunaMinerals

“We are pursuing a listing on the TSX to expose us to a wider base of investors” tungsten and gold. “Ymer Ø has been subject to limited drilling historically, which was successful in revealing exceptionally highgrade tungsten (for example 14.07 percent over seven metres) and antimony (up to 20.89 percent over two metres) mineralisation. We now have several robust, drill-ready targets identified from a recent airborne

geophysical survey, which are supported by geochemistry,” says Hughes. Then at Inglefield Land, a vast terrain in the high arctic of northwest Greenland, NunaMinerals holds an extensive licence covering more than 5,000 square kilometres. Recently GEUS, the Geological Survey of Denmark and Greenland, has proclaimed

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View of the top of the Stendalen layered gabbro intrusion, within NunaMinerals Hugin Licence, South East Greenland


NunaMinerals Inglefield Land as one of the most promising areas in the whole of Greenland for finding new zinc deposits, based upon stream sediment anomalies. Significantly NunaMinerals’ licence contains a cluster of the highest stream sediment zinc anomalies in the whole of northern Greenland, which is already known to host major zinc deposits such as Ironbark Zinc’s advanced project at Citronen Fjord. “We are conducting grass roots exploration across Inglefield Land, targeting a number of commodities, including coppergold, nickel-cobalt-gold, and zinc,” explains Hughes. “Despite the very early stage that the project is at, the area has already yielded ore-grade samples of both copper-gold and nickel-cobalt-gold mineralisation.” As an indigenous company, NunaMinerals is deeply rooted and well respected within the national and local community. The company is also keen to promote Greenlandic technical staff. “I am very proud of our team. The majority are Greenlandic and are experts in Arctic logistics, which is essential when exploring in the most northerly country in the world. Mineral exploration is a continuous balance between risk and geological prospectivity – we are able to significantly reduce those risks through truly understanding the environments in which we operate and the logistical challenges we need to overcome to reach our goals,” concludes Hughes. For more information about NunaMinerals A/S visit: www.nunaminerals.com

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Exploring a

Chie Re

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Avannaa Resources

a new frontier

ef Executive Officer, Nicholas Rose, explains how Avannaa esources’ role as a prospect generator is helping to lay the foundations for the future of Greenland’s mining sector

written by: Will Daynes research by: Richard Halfhide

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Winter camp on Disko Island, West Greenland: Working in winter on frozen ground makes many types of geophysical survey easier


Avannaa Resources

T

here are a number of motivations for our company to be here in Greenland,” explains Nicholas Rose, Chief Executive Officer of Avannaa Resources, “the primary one being the geological map of the country that shows a large variety of geotectonic environments that have high potential for hosting giant ore deposits.” Hailed as one of the next great frontiers for exploration Greenland possesses a massive geological endowment, with virtually every part of it showing signs of being prospective for some form of mineral or metal. Boasting a stable democracy and well-defined legal and administrative systems, Greenland is also an attractive destination as it currently lacks the level of exploration that other parts of the world with similar geological potential experience at present. Founded by a group of British and Danish geologists in 2006, Avannaa Resources is focused exclusively on Greenland. Based in Copenhagen, Denmark, the company’s strategy is to act as a prospect generator, locating potential targets before conducting preliminary work to make the project attractive for potential joint venture partners. Avannaa’s exploration strategy is based on applying quite stringent minimum criteria to any projects that are being considered at the generative stage. Prospects under consideration must have the potential to develop into very large mining projects based on major industrial commodities that can survive dips in price-cycles. These criteria point to the major infrastructure metals such as copper, nickel and zinc, and eliminate

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600o KM

2

The area covered by the Washington Land zinc licence

minor and specialty metals. “There are definitely common threads that link our projects,” Rose continues, “the strongest being that we strive to identify targets that can yield big ore deposits with very robust economics.” Beginning its work with a strong geological model in place the company goes into the area in question with the aim of building up good targets that can subsequently be tested by drilling. On initiating a new project Avannaa spends one to three years of preliminary investigation where the objective is to pinpoint drill targets, well constrained by geophysical surveys, remote sensing and surface geology including geochemical sampling and geological mapping. “What also links the projects that we choose and generate,” Rose says, “is the way we approach each with a view to making them as interesting as possible to potential partners. What we do is examine the sort of targets these large companies want to explore and ask ourselves what sort of preliminary work do we need to do in order to make the project attractive and encourage partners to get down to the real business at hand, which is actually drilling targets.” Avannaa currently has four priority projects

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Avannaa Resources

Basic prospecting and mapping is an essential activity during the earlier phases of project development

with active work programmes where it is single-mindedly preparing to drill with the next couple of years. At present the company has option and joint venture agreements on two of its projects with Anglo American and Boliden. Avannaa’s partnership with Anglo American covers its Jameson Land assets, which have potential for sedimentary hosted

copper. The area contains many known copper and other base metal mineralisations found mainly in Permo-Triassic rocks. For its part Anglo American has the option to earn 55 percent interest in Avannaa’s existing exploration licence, as well as any additional properties that the parties choose to jointly explore within an Area of Interest comprising southern and central Jameson Land, and

“Hailed as one of the next great frontiers for exploration, Greenland possesses a massive geological endowment” special report | 77


“Avannaa currently has four priority projects with active work programmes where it is single-mindedly preparing to drill within the next couple of years�

Drilling charge holes for a seismic survey in West Greenland where Avannaa is using seismic work in combination with other geophysical methods to constrain buried copper-nickel-PGE targets

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Avannaa Resources wholly outside of the National Park area, by expenditure of $15 million over a five year period. To date the East Greenland rocks, comprising approximately 2,500 square kilometres within the Area of Interest, remain under-explored. Boliden on the other hand hold an option to earn 51 percent of the company’s Washington Land zinc licence. Prospective for carbonatehosted zinc deposits, the licence contains a number of potential targets in carbonate platform sediments of the Franklinian Basin that covers much of northern Greenland and Canada, and hosts the historical Polaris mine. The licence area covers more than 6,000 square kilometres and contains several known mineralised zones that form parts of a regional fault system that remains under-explored. In addition to the aforementioned assets, the company also owns two other projects where it is actively looking for partners and which illustrate its multi-pronged approach to drill targeting by applying several independent techniques. Both projects have an excellent geological basis and are situated close to tidal-water making them highly accessible in the happy outcome of developing to a large mining project. The first of these is the Disko-Nuussuaq nickel-copper-PGE project. This project

Field camps in the majestic but desolate landscapes of North Greenland

possesses all the elements necessary to provide a giant nickel-copper-PGE province of the Noril’sk type and its geological credentials have been well established by several decades of exploration that has included historical programs by Cominco and Falconbridge. The second is the company’s Kangerluarsuk zinc project, located in a classic geological setting for giant SEDEX type deposits close to a margin between a shallow carbonate dominated platform and a deeper oceanic basin; other examples include the Selwyn Basin in the Yukon and the famous Rammelsberg mine in Northern Germany. “The projects that we are engaged in,” Rose enthuses, “have the potential to help transform the economy of Greenland in ten to 15 years’ time. The role of mining companies

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The distances and nature of t

“There are a number of advanced projects at the feasibility stage and practically all of them have been known about for decades� in society is a much discussed point right now worldwide as well as in Greenland. There is a right time for everything and now it is the right time for us to focus on discovery and realise that distraction from that single aim is not beneficial for us or any of our stakeholders including the society within which we operate.�

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It goes without saying that everyone within the exploration industry would like to see at least one project in Greenland becoming established as a successful on-going mining operation. While this is a development that is destined to happen sooner rather than later, the critical thing to achieve in the short term is to get as much exploration investment into


Avannaa Resources

the terrain means that many projects are helicopter dependent, on the other hand rock exposure is often excellent

the country as possible, because, as Rose highlights, the real potential for Greenland is still in the ground waiting to be found. “There are a number of advanced projects that are at the feasibility stage now and practically all of them involve deposits that have been known about for decades,” Rose says. “What is needed now is a second and third wave of really strong projects, which are still at the early post-discovery stage or are still waiting to be found. That is what I believe will really help put Greenland on the map.” For Avannaa the immediate objective is for the company to consolidate the partnerships it already has in place, while at the same time work on securing an investor or partner for its

Disko-Nuussuaq and Kangerluarsuk projects. “Our aim is to get investment into these two strong projects within the next year so that we can drill them within the next two years,” Rose concludes. This model we have of prospect generation is quite sustainable in that we are always bringing new projects into the pipeline and we will continue to try to build our reputation and make ourselves attractive for future partnerships as Greenland itself develops in the years to come.” For more information about Avannaa Resources visit: www.avannaa.com

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21st North

The prospect of partnership 21st North develops mineral projects in Greenland, a territory that is today long on interest but short on experience – experience is exactly what this company brings to the party, along with some very advanced technology

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

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Channel sampling of Ni-Cu mineralisation on Ammassalik Island, Southeast Greenland


21st North

I

t was in 2009 that two senior geologists with the Greenlandic exploration company NunaMinerals decided that there was no question that Greenland was on the verge of transforming from a fisheries-based economy to a major player in key minerals. An exploration company, they reasoned, that really understood the regional geology as well as the most advanced technologies available would be urgently needed. So Claus Oestergaard and his partner Anders Lie, both based in the ‘mother country’ Denmark decided to set up 21st North to really optimise mineral exploration, whether on its own behalf or for clients. In between the two of them, Oestergaard and Lie had more than 30 years’ experience of working in all parts of Greenland, Oestergaard has also worked directly within GEUS, the Geological Survey of Denmark and Greenland, which has amassed almost all the available historical data on which more specific modern work has to rely. Lie and Oestergaard were among the first in the exploration business to realise and apply the potential of digital satellite imagery In Greenland, as well as remote sensing capabilities, hand held XRFs and hyperspectral technologies which use different wavelengths to identify alteration features and rock types even before you go into the field. “Remote sensing is helpful because it is something you can do at home from your desk!” says Oestergaard. Applying 21st century techniques to develop resources gave the company its name, and today it has a well-established partnership with the British remote sensing, image processing, GIS

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and digital mapping services company HME Partnership. Getting established was not that easy though, says Oestergaard: “We knew it was a tough place to start, which is why we included several extra legs to stand on, so we offer contract exploration services and consultancy to firms wanting to get involved in Greenland as well as developing our own licences.” However these properties, most of them owned through a subsidiary company Greenland Gold Resources, take up 75 percent of 21st North’s energies. “Our core business is the exploration and development of projects,” he explains. However it is quite a unique potential partner for anyone wanting to develop

new grassroots exploration projects in under-explored regions of Greenland and Scandinavia. The way forward for this company will be via joint ventures says Oestergaard. “Whether our key projects will be listed at some point or remain private is an open question – but at some point we would welcome partnerships that allow us to conduct exploration projects on a more regional scale, supported by investors, with a focus, probably, on east or south Greenland. There are some really interesting regions in Greenland which require grass roots exploration but further development requires financing.” 21st North’s most advanced project so far is its Akuliaruseq graphite deposit, between

Nickel prospecting in the Ammassalik region. Southeast Greenland

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21st North

“We would welcome partnerships that allow us to conduct exploration projects on a more regional scale, supported by investors” the towns of Sisimiut and Aasiaat on the west coast of Greenland and close to the airport at Kangerlussaq. Greenland has a long history of small scale graphite mining, he explains. Knowledge of the Akuliaruseq deposit goes back as far as 1912-1916 where sporadic mining took place. No further work was done until the 1980s, but by 1986 geological and geophysical exploration work

had outlined and test drilled four favourable blocks defining an open-ended indicated resource of 5.34Mt grading 9.5 percent C. Bulk sampling indicated that a significant volume of the deposit consists of large and giant size graphite flakes without impurities, the most important criteria for flake graphite deposits. The company has recently applied for extension of the property and will conduct a surface exploration programme this year to outline additional resources. In addition, a €1.85 million, 5,000 metre drilling campaign is proposed to establish the depth and extent of the Akuliaruseq deposit as well as further testing the flake size, leading to test mining in order to be certain that this is not just a large scale resource but also one that can be successfully exploited. “Though we are an exploration company and generally not interested in mine building or beneficiation as such, we always have an eye to these matters early on,” he says. Once it has done the preliminary work and taken the project up to feasibility or pre-feasibility stage, the company wants to attract partners who will buy in to the project and take it forward to production. At his point 21st North’s interest will start to dilute or may be sold outright. Less well known till 21st North came

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“Looking at reflections from different wavelengths over a wide spectrum gives you a great deal of geological information�

Lunch break . Sinarsuk Ti-V project, Southwest Greenland

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21st North on the scene was the Ikertoq Prospect, a 151 square kilometre nickelcopper licence in the same general area of Greenland, strategically located 60 kilometres from the international airport in Greenland and eight kilometres from a deep water fjord. In partnership with Northern Shield Resources, a Canadian junior, 21st North will drill up to 2,000 metres this summer at a cost of €1,000.000. It could be a very exciting project. Greenland and Canada were once joined together and Fly camp set-up within the Ikertoq region prospecting for Ni-Cu for years mining companies have been searching in Greenland for the also gold bearing rock in this region. continuation of Quebec’s Raglan Nickel Belt Titanium and vanadium are among and the structure that hosts the Voisey’s the many metals that are in increasing Bay Nickel Deposit. The Ikertoq property demand round the world. They are present could well be it. in a highly accessible surface deposit at Another nickel-copper deposit in the Sinarsuk near Fiskenæsset just 125 miles portfolio has already seen some test drilling, south of the capital Nuuk – there’s virtually and more is to be carried out. Though its no overburden at all so once 21st North has principal town Tasiilaq is easily accessible by completed its validation of the site it should sea and has daily flights to the west coast be very attractive to an investor. and Iceland, the island of Ammassalik off Though GEUS has done a huge amount of the south east coast of Greenland has seen work, and a sporadic amount of development limited exploration activities and early testing and exploration has taken place in recent up to 2005 missed the best deposits. Now years, there are still many parts of Greenland 21st North has exclusive mineral rights over that have only seen limited exploration activity an 84 square kilometre area that it considers but where there are a lot of interesting finds has great potential for copper, nickel and to be made, says Oestergaard. “We rely very platinum group elements (PGEs). There is much on that historic information to decide

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“We know how to operate in all parts of Greenland with a sure hand!” that any particular area might be interesting to go into and work on, in fact we have done that with most of our projects.” Remote sensing technologies give excellent results in Greenland.. “Looking at reflections from different wavelengths over a wide spectrum gives you a great deal of geological information. Another wonderful thing about Greenland is that there are no trees and excellent exposure due to the historic

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glaciation. You can see a lot of information you can’t in other parts of the world.” The centre of Greenland, 83 percent of its surface area, is inaccessible because of the ice cover, but its uncovered part is larger than France, he points out. He prefers to work in the southern and central part of the country. Though there are great deposits in the north, he feels that investors are less likely to be captivated by projects that are hard to access


21st North

Mobilising camp and fuel by barge in the fjords of West Greenland

from a logistical point of view, and more importantly whose production can only be shipped out for a few months of the year, Below the Arctic Circle, warmed by the Gulf Stream, pierced by numerous deep water fjords, the southern coasts are a miner’s dream compared with many parts of the world. And Greenland is one of the most secure and investment-friendly countries in the world, backed by Denmark though jealous of its independence and always vigilant on behalf of its population and its land and marine ecology. The biggest drawback is the lack of infrastructure, but this can be costed into any venture and may be offset by so many positive features that it becomes less

significant. It does require deposits with good grade and tonnage to be economic, though. “When new companies start to consider Greenland they get anxious, naturally enough. That is why most of them quickly realise they need a local partner,” says Claus Oestergaard. “That is where we see ourselves. We give the companies the confidence that their investment is in safe hands. We know how to operate in all parts of Greenland with a sure hand!” For more information about 21st North visit: www.21stnorth.com

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The world’s new p

Platina Resources aims to be the fir group metals mine in Greenland. C Mosig discusses the reasons why h

written by: research by: Ric

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Platina Resources

platinum preserve

rst company to establish a platinum CEO and Managing Director, Robert he is confident this can be achieved

Will Daynes chard Halfhide

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F

or many years South Africa has been the repository of the world’s platinum group metals (PGM’s), with some 80 percent of the globe’s total production of metals such as platinum, palladium, osmium, iridium, rhodium, and ruthenium originating from within the Bushveld intrusion, a large layered igneous intrusion within the Earth’s crust. While it remains a fundamentally

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important site for mining Bushveld, like all good things, is not quite as exciting as it once was. This is a result of several factors, from the recent labour issues that have affected vast swaths of the South African mining sector to the simple fact that it has become necessary to mine deeper, and at greater expense, here than ever before. With the site slowly becoming less attractive to companies their attention has turned to identifying other


Platina Resources

Rock formation showing mineralisation - Skaergaard Project, East Greenland

stable supplies of PGMs. It is here that the country of Greenland displays its significance. “Greenland is unquestionably Europe’s last frontier for mining exploration,” states CEO and Managing Director, Robert Mosig. “Geologists are becoming increasingly excited by the signs of mineralisation that the country is starting to display. Indeed, Greenland represents a veritable sweet shop of all manner of minerals, from PGMs to

diamond, silver, zinc and uranium.” Based in Queensland and listed on the Australia Stock Exchange since May 2006 (ASX:PGM), Platina Resources Limited is an international resource company focused on the exploration and development of a global portfolio of precious and specialty metal projects. Away from its home market, where its assets include the Owendale Platinum and Scandium Project and the Munni Munni

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Platinum Group Metal (PGM) Project, the company also owns 100 percent of the Skaergaard Gold and Platinum Group Metal (PGM) Project as well as the Miki Fjord exploration licence in Greenland. Located on the East Coast of the country and covering a total area of 141 square kilometres, the Skaergaard Gold & PGM

Project is Greenland’s largest gold resource. “Here,” Mosig continues, “we have an Inferred Resource of something in the order of 1.7 million ounces of gold and approximately half a million ounces of platinum and palladium.” Impressive as these figures are, Mosig is keen to highlight that this is just a snapshot of Skaergaard’s potential. “When we initially

“The vast majority of Platina’s work today is geared specifically towards building the first PGM mine in Greenland”

Drill Rig on site at Skaergaard Project, East Greenland

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Platina Resources

Drill Rig operating at Skaergaard Project, East Greenland

looked at the project it “Once this has been was estimated that the achieved,” Mosig explains, “we intend to work extremely Skaergaard intrusion could rapidly to develop the hold as much as 30 million ounces of palladium in total.” Skaergaard project up, very There are a large number much along the same lines as to how we have nurtured and of drill holes that Platina developed our operations has tested that are in fact Ounces of palladium estimated to be within in Australia. We are very excluded from the resource Skaergaard keen to be a component of at this time. These holes exploration and development have shown themselves to be in possession of significant in Greenland, and the growth quantities of platinum, palladium and gold. of this particular project will be vital in What the company is doing now is working achieving that goal.” diligently to carry out all the necessary It is the company’s hope that this QA/QC work to have these holes incorporated re-evaluation will go a long way to making into the resource, giving it massively what would probably be described by many re-evaluated statistics. as a modest resources a truly world-class

30

million

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Drill core from Skaergaard Project, East Greenland


Platina Resources

“Greenland is, and will continue to be, the focus of the next boom in mining and as such operations it will be a major focal point for the industry going forward” asset. What makes Skaergaard “even more deliciously exciting”, as Mosig puts it, is the fact that the project lies just 400 kilometres away from the geo-thermal power rich nation of Iceland. “We believe it is this association between an untapped set of resources and a repository of cheap power that make our Greenland projects so formidable.” Adjacent to Skaergaard one will find the Miki Fjord licence. Covering a 1,255 square kilometre area of the East Greenland Igneous province, the area is broken up into two significant regions, the Kangerlussuaq Complex and the Miki Fjord Dyke. The Kangerlussuaq Complex is a 1,000 square kilometre circular target, prospective for precious, base and rare earth metals. The Miki Fjord Dyke meanwhile is a steeply dipping linear dyke that begins only two kilometres from Skaergaard and extends for more than 55 kilometres varying in width from 20 to 600 metres, and is believed to be highly prospective for gold and base metals. The vast majority of Platina’s work today is geared specifically towards building the first PGM mine in Greenland. In working to reach this goal the company has been extremely grateful for the support it has received from the Bureau of Minerals of Petroleum (BMP). “From our perspective,” Mosig says, “it has

been very refreshing to experience BMP’s appropriate and tolerant view of supporting exploration, whilst at the same time maintain the pristine nature of Greenland’s environment. This is certainly an approach that we believe should be adopted in other parts of the world.” Mosig readily admits that in many ways he and his company have been blessed by being present in the midst of Australia’s mining boom. Indeed it is the experiences he has had during this time that makes him even more excited about Greenland’s immediate and long-term future. “Greenland is, and will continue to be, the focus of the next boom in mining,” Mosig concludes, “and as such operations it will be a major focal point for the industry going forward. Unquestionably there are going to be dramatic new discoveries here and that many exciting things are poised to happen in the coming months. We at Platina are delighted to be playing its part in this next era of mining and we are very keen to continue our work here for many years to come.” For more information about Platina Resources visit: www.platinaresources.com.au

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Tanbreez

The miner with the mostest The Tanbreez project in Greenland has the potential to disrupt the world market in a group of minerals that’s making a political as well as a financial impact

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

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Aerial view of plant site


Tanbreez

T

anbreez, though this does need explaining to the uninitiated, does just what it says on the tin. The name is a contraction of two close associates on the periodic table Tantalum (TA) and Niobium (Nb), their cousins the rare earth elements (REE), while the final Z stands for their elusive though incorruptible uncle Zirconium. All of these are sought after as new uses are found for them in, among other things, electronics, alloys, mobile devices, car exhausts and green power generation applications. Currently China holds a near-monopoly over world REE supplies and controls around 95 percent of mined production and refining. But these elements are vital in both civilian and military technologies. By restricting exports and driving up prices China can effectively force companies to manufacture devices that need to incorporate rare earths in its own factories. But Greenland has 58 percent of the world’s REE outside of China and 65 percent of the ‘heavy’ rare earths, which are in shorter supply. Tanbreez, a private company in the blessed position of being able to fund its project without recourse to stock markets, is sitting on what is probably the world’s largest resource of these minerals outside of China itself. It is a very exciting project, explains the company’s founder and CEO Greg Barnes. He is a geologist who has studied Greenland’s minerals for many years and has been involved with both London Mining, which is planning to exploit large iron ore deposits in southern Greenland, and Greenland Minerals which

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holds a licence to the north of the Tanbreez property containing a variety of minerals but principally uranium. Greg’s enthusiasm for Greenland is very infectious, if understandably partisan. He believes the country’s resources have been woefully and inexplicably overlooked over the years and he has little sympathy for the few Canadian exploration companies that

have started projects in the past and then let them fizzle out. It has taken the Australians to galvanise the scene, he says, including his own Perth based company Rimbal, which since 2001 has pioneered exploration on the current Kringlerne deposit. Three Australian companies, Tanbreez, Greenland Minerals and Ironbark, which has zinc interests in northern and eastern Greenland, own

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Tanbreez

The camp in June 2010 and an Air Greenland chartered helicopter

the projects most likely to MT Højgaard (MTH) is based come into early production, on the annual treatment of he points out. 500,000 tonnes of ore to Rimbal’s processing tests produce 100,000 tonnes of resulted in high values of eudialyte concentrate and zirconium, niobium, lithium, 200,000 tonnes of feldspar. Greenland’s share of REE resources outside China yttrium, rubidium, beryllium, MTH’s plant design allows strontium and a variety of rare for future treatment rates earth metals distributed over of up to 1.5 million tonnes several locations in the decade from 2001, per annum. The open pit mining project he says. Up to 2012, Tanbreez spent more will include roads, a processing plant, than $40 million on developing the asset and accommodation for the workforce, a tailings then submitted a definitive feasibility study deposit and a port facility, which will include to the Greenlandic government, which must a helipad. Though he can get to the project have been impressed to receive the 19-volume from his base in Perth Western Australia submission weighing in at 33 kilogrammes. within a day, the last part of the journey has The study carried out by Danish engineers to be accomplished by helicopter.

58%

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Now Barnes and his team, which includes his right-hand man Hank Schønwandt a former Deputy Minister in the Greenlandic Ministry for Industry and Minerals, are ready to start construction of a mine on its licence lining the southern half of the Ilimaussaq peninsula in south-west Greenland. There are, at a conservative estimate, 4.3 billion tonnes of ore contained within the licence area, so the mine life can be calculated in

generations rather than the more usual decades. Little wonder then that last year he hosted a visit to the site by no fewer than three prime ministers. Work can begin as soon as the Bureau of Minerals and Petroleum (BMP) approves the application for an exploitation licence. The minerals of interest are principally contained in a red coloured ore called eudialyte, associated with white feldspar

“Greenland and Western Australia are approximately the same size and with very similar geology�

Prime Ministers visit the Tanbreez site 2012

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Tanbreez

Greg Barnes briefing the Prime Ministers on the site 2012

and black arfvedsonite, a mineral found in few other places on earth. Feldspar and arfvedsonite are commercial but low cost minerals, Eudialyte is another matter. The Greek prefix eu- always signals something nice – in this case the name means easy to dissolve. That’s a key attribute of the ore he is planning to mine, says Barnes: “If you have to use powerful acids to extract the chemicals you want, your capex goes through the roof. But we will need only weak acids which means we can process the ore very cheaply.” In fact, he says, the process is almost chemical-free, consisting of a crushing plant followed by a magnetic separator that works because the minerals have different levels of magnetic attraction. Thus the proposed

processing plant will produce concentrates of feldspar and eudialyte for shipment to destinations around the world. As is the case throughout Greenland, there is not much in the way of infrastructure at Ilimaussaq, though Tanbreez will not have to invest too much in the way of providing what it needs. “In fact it is much more accessible than a lot of the comparable projects in Canada,” he claims. “A hydro-electric line runs close to the ore body so we will be able to get all the power we need. All the labour we are likely to want is available locally and there is no lack of water.” Access by sea will be straightforward, as the fjord that runs beside the outcrop is steeply shelved and deep, and though the lack of roads may be a problem

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Main ore body looking from the west


Tanbreez the project is after all only 25 kilometres from Greenland’s major southern international airport at Narsarsuaq and about the same distance from the town of Qaqortoq. In general, mining companies are obliged to factor in the cost of roads, harbours and services to their projects in Greenland, so in many ways the south is the place to be. “We are on what they call the banana coast,” jokes Greg Barnes, “the warmest part of the country right in the south. We are on a natural harbour, and it is ice-free all the year round.” This, he says, is thanks to the effect of the Gulf Stream. Another big bonus, certainly over any Canadian operations – and Canada is only 150 miles from north western Greenland at its closest point – is the lack of mosquitoes in this part of the country. The exploitation licence should come through in the next few months. Once that happens, Tanbreez can move ahead to construction, which could be completed in 2014, with first production the following year. “Greenland and Western Australia are approximately the same size and with very similar geology,” Greg Barnes points out, “yet Western Australia’s mining industry earns in excess of $100 billion and Greenland’s mining industry earns virtually nothing at present.” Where Australia is placed to supply China, it could be argued Greenland is just as well placed to supply Europe and America, so watch this rather large space. For more information about Tanbreez visit: www.tanbreez.com

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Argex Titanium

On the path to production The Canadian junior exploration company completes its transformation into a top quality supplier to the pigment industry

written by: JOhn O’Hanlon research by: James Boyle

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J

unior mining companies are feeling the chill these days, and have been under pressure for over a year, so it is heartening to find one whose neat footwork has turned the situation to its advantage. Over the past year Argex has advanced its plan to convert its focus from mining to production of Titanium Dioxide (TiO2), a commodity that is sure to grow in demand as the world emerges from recession, because its sales in any particular market shadow GDP with uncanny accuracy. It is a key ingredient in paint, as well as in many pharmaceuticals, plastics and paper, having unique properties of opacity and whiteness. Wearing its mining hat, Argex accumulated a portfolio of properties in Quebec that provide it with a source of ilmenite, the ore from which TiO2 is derived. In 2009, it acquired La Blache together with an iron ore project called Mouchelange on the north shore of the St. Lawrence River, and in 2012 added another interesting property called Lac Br没l茅. These properties, it was thought, would provide feedstock for a process of beneficiation if a suitable technology could be found to produce high grade TiO2 from ore containing contaminants, or penalty metals as they are known, that are intractable in the traditional processes the industry is used to. The company accordingly worked in partnership with Process Research Ortech (PRO) to develop a proprietary mineral extraction process that allows for the production of 99.8 percent pure pigmentgrade TiO2, which can be sold to the end-users in the paint, plastic and coating industries. The CTL process has significant advantages

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Argex Titanium


over current processing methods: it has a very low environmental impact, operates at atmospheric pressure, does not require high temperatures and produces saleable by-products. “The comparative risk-profile for scale up with this technology is really very low,” says Roy Bonnell, Argex Titanium’s president and CEO. The last year has been a busy and a productive one for Argex. The raw material for the process, ilmenite, is readily available and Argex has been exploring the idea of treating commercially available ore bodies in addition to that from its own properties. One of the things that makes Argex different, and endears it to shareholders and analysts alike, is its approach to risk. “Commercial sourcing was attractive because it meant that in starting our plant we wouldn’t have to have two different capital projects going on at the same time. Here in Quebec, developing a mine can be a lengthy process so to be able to have cash flow earlier in the economic model creates a lot of present value for our shareholders.” The deposits treatable with Argex technology may contain penalty metals such as vanadium, or magnesium oxide that make them undesirable for other producers. With the CTL process all by-products are saleable,

and as many of the sources Argex has identified contain levels of ilmenite that can yield up to three times as much product per tonne than that from La Blache, taking this route made a lot of sense. “We have taken a risk mitigation approach to management. And as a result, in a difficult market for juniors, we performed relatively well last year.” Argex Titanium’s business model was given additional support in July 2013 when

“By this time in 2015 we expect to be reporting on the plant in production, shipping its high quality product into an expanding market” 114 | BE Mining


Argex Titanium

it announced a $10 million infrastructure, is crucial, Bonnell says. private placement with 2 Investissement Québec, and Valleyfield is an ideal a US-based investment fund location, an industrial site The size of the recently manager which already already occupied by major acquired Salaberry-deholds Argex shares. “The chemicals companies that Valleyfield plant Quebec government is proud can support Argex’s supply to support this strategic chain. It is well served by air, road and shipping links, investment project, which will have substantial economic spin-offs is close to gas and electricity supplies, and for the Montérégie region,” said Québec’s has a pool of experienced workers. “Even the Minister for Industrial Policy Élaine Zakaïb. community college is focused on producing The funds will go towards developing the chemical technicians,” he enthuses. “We feel 235,000 square foot plant it has acquired at we fit in there.” Getting Valleyfield up and Salaberry-de-Valleyfield that will be home running is now a priority. The first step is to to its first full-scale TiO2 plant. And it’s not move the pilot plant, which has tested the new just the money: government support for a process on a variety of differing ore bodies, project like this, which depends heavily on from Mississauga just outside Toronto to the

235,000 FT

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“In the coming year, you will see our further evolution to becoming an emerging producer of a speciality chemical and more an engineering company than a miner” Valleyfield site. This is important because it will mean this vital research facility will be on-site, able to train the people who will be working on the full size plant. At the same time, the company is working with its engineering partner Genivar on a bankable feasibility study (BFS) that will make the economic case for the plant, as well as outlining the engineering aspects including plant layout, equipment required

116 | BE Mining

and workflow. The results of the BFS should be available in September, demonstrating the potential game-changing nature of the CTL process, and placing Argex in a position to evaluate partnership opportunities, engage in detailed construction engineering work and start hiring suppliers. Bring it on, says Roy Bonnell, who wants to see first production in the first quarter of 2015. I am doing my best to hold the engineers’ feet to the fire!”


Argex Titanium

There will always be bumps in the road, but the scalability of the company’s process, compared to many other metallurgical processes, is not particularly difficult. Indeed this was why the company chose to occupy an existing building, already laid out as a chemical facility, rather than build from scratch. It is another risk-reducing factor, he says, not least because you don’t want to be waiting for concrete to set in Canada’s winter! The process itself is hardly action packed, consisting mainly of leach tanks and settlers: it can be described as – well, boring. But that gladdens his heart. Boring means low risk. “We tested around ten different feedstocks, and found we could use any one of them. One that we have been using and will probably start with is high in only

one penalty metal.” Yet another prudent approach – having to deal with just one rather than three or four limits the risk of problems in the startup phase, he says. By this time in 2015 we expect to be reporting on the plant in production, shipping its high quality product into an expanding market. The market fundamentals are promising, he points out, with the US economy rising out of recession and construction readying itself for activity following a period where projects were put on hold. It will be pigment’s day again and prices are predicted to rise with demand, which as we have noted tracks GDP. An interesting statistic is that annual per capita consumption of TiO2 in the USA is eight pounds: in China and India it is two. The global market for the higher

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Argex Titanium quality CTL product with its outstanding light reflection qualities, as opposed to the lower performance chemical resulting from the sulphate process, will inevitably grow alongside living standards. In that case, Valleyfield will come on stream just at the right moment. “In the coming year, you will see our further evolution to becoming an emerging producer of a speciality chemical and more an engineering company than a miner.” The R&D centre will be up and running at Valleyfield well ahead of the main plant, which will employ around 100-150 people. It will be a showcase facility, Bonnell says, and a model for other plants Argex might build in the future in locations that have lower energy costs. However for the time being, his policy of cutting risk to the bone is paying off. Appropriately, at the end of June 2013, the company signed a purchase agreement with the company it has collaborated with since 2011. PPG is the largest paint company in the world, and its confidence not only in the process but in Argex’s strategy and ability to deliver is as important as the deal itself. It establishes Argex in the market as a company that is doing real cutting edge work. “We will continue to align ourselves with blue chip companies like that. You are judged by the company you keep, and I think it is important as we establish ourselves that we are seen in alliance with people like PPG.” For more information about Argex Titanium visit: www.argex.ca

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company in brief Argex Titanium Inc., formerly Argex Mining Inc., is engaged in the acquisition, exploration and evaluation of mineral properties located in Canada. The Company has one segment in Canada and all of the assets are located in Canada. Its properties include The La Blache Property, The Mouchalagane Property, The Lac Brule Property. The La Blache Property consists of 73 contiguous claims and covers an area of 40.35 square kilometers. This property is located approximately 150 kilometers south of the Manicouagan Reservoir on the North Shore of Quebec. The titaniferous magnetite from the La Blache Property is hosted in three lenses: West Hervieux, East Hervieux and Schmoo Lake. The

Mouchalagane Property consists of 637 claim blocks covering 334.13 square kilometers located approximately 275 kilometers north of BaieComeau. On January 10, 2011, it incorporated Impact Iron Mines Inc. On March 21, 2012, it purchased from Quinto Mining Corporation the claims located on the Lac Brule Property.

MANAGEMENT AND DIRECTORS Robert Guilbault

Florian A. Rais

Independent Chairman of the Board

Director

Roy Bonnell

Normand Bergeron

President, Chief Executive Officer, Director

Independent Director

Mark A. Billings

Mazen Haddad

Chief Financial Officer, Director

Independent Director

Enrico Di Cesare Chief Operating Officer, Vice President

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argex titanium stock watch

Office Head Office Suite 410, 630 Sherbrooke St. W MONTREAL, QC H3A 1E4 Canada Tel: +1-514-8435959 Fax: +1-514-8439208 Email: info@argex.ca

Exchange CVE

Shares 119.86M

Symbol RGX

Market Cap. 121.06M

Currency CAD

Div/yield -

highlights • Game-changing, patented extraction process for high-purity titanium dioxide (TiO2) production • Process can uniquely convert low grade ilmenite into high purity TiO2 • TiO2 prices expected to rise with global economic growth. Currently averaging $3,650 US/tonne. • NDA’s are currently in place with major endusers and distributors. • Argex is developing collaborative partnerships in the major sectors (architectural paint and coatings, plastics, cosmetics/FDA) to accelerate and de-risk the learning curve. • Argex is currently negotiating purchase and sales agreements with endusers and distributors.

www.argex.ca

products • TiO2

operating territories • Canada

Key stats and ratios Q1 (Mar ‘13) 2012 Net profit margin -6166.92% -14194.42% Operating margin -6166.88% -14194.45% EBITD margin - -12910.97% Return on average assets -21.08% -21.50% Return on average equity -23.73% -24.74%

Financial information from Google Finance and Thomson Reuters

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Devex

Introducing tomorrow’s smart mine Devex has rethought mine automation, taking it beyond the traditional fleet management mindset: it has developed the products its clients need and is taking them to the world

written by: John O’Hanlon research by: Jeff Abbott

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Operating SmartMine|UG system - Map


Devex

A

t the moment, though Devex has opened a few offices in other countries where clients have adopted its systems, it is firmly a Brazilian company, with 85 percent of its $35 million annual revenue generated domestically. However there is no better seed-bed for new technology than Brazil, and forward thinking global mining groups are now taking notice of Brazil not just as a country with huge resources to extract but as a developer of smart ways of doing that. Devex was founnded in 1997 by Guilherme Bastos Alvarenga. Dr Alvarenga was employed by Brazil’s biggest integrated steel company Companhia Siderúrgica Nacional (CSN) with responsibility for introducing new technology at its Casa de Pedra mine. “It was while working at Casa de Pedra, at that time the third largest iron ore mine in Brazil, that I realised the extent of the need for far greater mine automation,” he says. At the same time he was completing his masters degree at the Universidade Federal de Minas Gerais (UFMG). At the university he had developed an in-house open pit solution for his employer, and on the award of his masters, with the agreement of CSN and in partnership with two other researchers from UFMG he took the IP into a spin-off company that is now Devex. His first clients were CSN itself, and Minerações Brasileiras Reunidas (MBR), another large iron ore producer now owned by Vale. Over the following nine years he combined academic work with growing the company, joining the Universidade Federal de Lavras (UFLA) as a professor, and serving as head of its computer science department for the

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System integration above and below ground! A large open pit mine in Minas Gerais counted on the aid of more than 30 systems in its operations, each with specific goals and almost all from different suppliers How to integrate dispatch and the other mining systems into one single platform capable of providing a complete view of operations in the mine? Though the mine in question has excellent automation specialists, the team had no experience in applying these concepts, so it looked to Devex as a partner to add value and knowledge to the mining processes. Extreme, which can monitor and manage all the fixed and mobile assets in the mine, including people, started to run full time at the location on 12 December 2012,

serving a 90–strong auxiliary fleet. The implementation of all the modules chosen will be finalised in August 2013. It is precisely this concept of having integrated production, maintenance, operation, operators and equipment information that Devex’s customer was looking for. In the opinion of Devex CEO Guilherme Bastos Alvarenga, the product reached the mine at just the right moment. “Extreme represents a major step in accessing information, with variables related to mobile and fixed assets all centralised in a single online environment for viewing on the screen of the operating control room or on an iPad,” he explained. “The gains should be much larger than projected.”

Complete control of open pit mine activity, in real time.

negativa

We will be with our partner Bailac at EXPONOR 2013. Come and get to know our products. Booth 30B June 17th to 21th - Antofagasta, Chile.

Integrate all mining system operations in one single platform. With Extreme, you can monitor and manage all mining systems, equipment - whether fixed or mobile, auxiliary or production, mining faces, and even people and their activities. Extreme, complete automation of the mining process.

www.devexmining.com


Devex

Central Room project

three years to 2008. However Devex has standalone, ring fenced solutions based on been on a growth track since 2002 when it modules within existing ERP platforms: abandoned its work as an IBM reseller and “Right from the outset we approached the focused 100 percent on developing its own market in a more flexible and integrated way, products, notably SmartMine, its solution and that appealed to the market. During the for mine operation control and optimisation last decade everybody was looking for a fleet in matters such as quality control, freight- management system that would integrate use optimisation, maintenance control and with their legacy systems. That was our telemetry. The many companies that have USP at that time and doing that gave us a very deep knowledge and SmartMine include Vale, expertise in understanding CSN, Kinross, Mineração the realities of mining in Rio do Norte, V&M and AngloGold Ashanti. remote environments.” There have been several However today the market has entered a different reasons for Devex’s success phase, he says. “You must since 2002, Alvarenga Mines in Brazil using understand that in mine sites explains. The mines had Devex solutions they have systems that control become used to adopting

80+

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processes such as flotation circuits, crushers, and the like. But these are linked to many very complex process in the pit, where we find high value capital assets like excavators, trucks, dozers, drillers, blasting equipment, and so on - and there is no automation system for this part of the pit. Fleet management is not the final solution!” Devex accordingly developed Extreme, which he describes as a more complete process solution where fleet management is just one building block among many. Extreme is a complete solution for mine automation that monitors and manages all the systems and equipment, fixed or mobile, auxiliary or core production, and even the activities of people. With Extreme, he says, it is at last possible to plan any type of activity in the mine, monitor it on a single system and follow it to its conclusion in a realistic 3D environment. “Extreme approaches the mine by trying to understand the whole process and control each task from start to finish. We really understand these processes: this is our approach to the market and where we score over the competition.” You can either migrate to Extreme across the board or bolt it on to the legacy system. Its open and extensible architecture represents a completely new approach to mine automation,

he confides – and it has a great future. Devex also has a mine process automation solution developed for underground mine, SmartMine|UG). SmartMine|UG, already installed in two underground mines and Extreme, installed in one open pit mine, are the most exciting things to have happened in mining for many years – this level of automation cuts costs, improves safety, makes the whole operation faster and more efficient

“It was while working at Casa de Pedra that I realised the extent of the need for far greater mine automation” 128 | BE Mining


Devex

SmartMine|UG system screen

and takes the guesswork out of mineral production. “I really feel we have brought into the 21st century by enabling these systems to work on iPads, tablet devices and iPhones if needed. There is no known form of technology from any other provider who can take it to this level, and few of our competitors have our ‘collaborative approach’. For us that is one of the many keys to helping our clients.” The HSE agenda is something companies are belatedly waking up to, and employee protection is an area that could be improved on in many mining jurisdictions. To keep people safe you need to know where they are. The lateral thinking that produced SmartMine and Extreme led Devex to question the effectiveness of current RFIDbased systems. “RFID signals do not work

reliably in underground mines,” Dr Alvarenga explains, “partly because of their low power output, partly because of competition from other equipment. We developed SafetYou which is a wireless system based on a small device on the operator’s belt and which is very reliable in tracking people and mapping their location individually or in groups At last you can be certain exactly where people are in the mine, in real time.” Among the other highly effective products Devex has developed for underground mines is eControl to manage the electric equipment in equipment such as fans, water pumps and substations. SmartMine and its family of satellite products meanwhile cater for those clients who are not ready to go for fully blown automation.

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The Exacta family is a high precision element within SmartMine that is installed on the onboard computer of individual key equipment like dozers and loaders and the like giving the operator total control. When any action does not go according to plan, alarms go off and the operator instantly receives all the information needed to fix the error. The company has grown in a fairly complex way, organically, by acquisition and by entering

strategic partnerships. Early in 2011 it bought MineInside, a software development and data integration company as well as SmartCargo, a program that optimises equipment utilisation. In 2010 Devex became the exclusive supplier in Brazil of SafeMine, a traffic management and specifically a collision avoidance system proved in the industry since 2003. Having cracked the Brazilian market, and to a large having expanded in South America

“Extreme approaches the mine by trying to understand the whole process and control each task from start to finish�

The Extreme system allows users to monitor all workplaces in a unique screen

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Devex

Extreme system screen

with considerable success in Chile, Devex is now ready to take on the world. It recently announced a strategic partnership with CAE Mining under which CAE will distribute Devex products in Canada, Russia, and a group of CIS countries including Kazakhstan. “Devex does not plan to do absolutely everything but Extreme is going to be the platform because it is an open architecture system that can work independently or integrate with third party products. We are here to sell our services but at the same time we want to bring in OEMs and large automation companies as collaborators in this system.” The company opened an office in Brisbane in 2011following Vale’s decision to develop a massive nickel complex in New Caledonia, is currently setting up a new office in Mexico.

Guilherme Alvarenga is as flexible in his approach to geographical expansion as to software development, and will do whatever it takes, opening up offices and hiring local experts, or going into partnership with like minded partners as seems most appropriate. His aspirations are realistic though they are nothing if not broad. “I don’t think our new approach leaves room for many competitors. We think Devex has a very big opportunity ahead. Today I have 85 percent of my revenue in Brazil – as we expand I am confident we’ll grow 20 times bigger than we are today.” For more information about Devex visit: www.devexmining.com

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company in brief Devex leads the Brazilian market in the segment of solutions for mine operation control intended for efficient performance. In order to reach this leadership, we work with unique competence, based on principles such as agility and quality, complete balance and integration. Allied to the strong presence of Technological Innovation, these values are the key for the success of products and services offered by Devex. We work with professionals who are acknowledged in the market for their experience. In addition, we maintain partnerships with learning and research institutions, which

guarantee that our products remain in the vanguard of technological development. With the arrival of a new group of stockholders, we have implemented serious and mature corporate governance practices, which were followed by the financial investments needed for the expansion plan.

DIRECTORS & Board members Guilherme Bastos Alvarenga

Sebastião Henrique Ubaldo Ribeiro

CEO

Chairman

Luiz Thomaz do Nascimento

Guilherme Bastos Alvarenga

Products and Innovation Director

Devex

Rodrigo G. Couto

Luiz Thomaz do Nascimento

Sales and Marketing Director

Devex

José Artur Oliveira Ribeiro

David Travesso Neto

Financial and Administrative Director

FIR Capital

Rodrigo Marinho Passos

Christiano M. Moysés

Operations Director

Storm Capital

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devex PRODUCTS AND SOLUTIONS OPEN PIT MINES • EXTREME Complete solution for mine automation. With Extreme, you monitor and manage the mine´s systems, equipments (whether fixed or mobile, auxiliary or productive), mining fronts and even people and their activities. In this complete management solution, you monitor security and conditions of operators, optimization of transport and load, the control of pumps and wells, readings of vibration and dust sensors, telemetry of equipment’s vital signs, cameras, remote sensoring and much more. With Extreme, no activity performed in the mine is without control and supervision, as everything is registered until its completion. • SMARTMINE With SmartMine, your mine has a complete solution for the management of all operations. All equipment in the mine is monitored and controlled by on board computers, global positioning systems (GPS) and a modern digital communication network. The obtained data is analyzed by modern algorithms of optimization and simulation.

UNDERGROUND MINES • SMARTMINE.UG The underground operation involves a complex set of equipments and devices that need to work adequately and synchronized. Thus, SmartMine.UG was developed to control, in an efficient and centralized way, all the assets of an underground mine, being a new solution that goes beyond fleet or dispatch management. • ECONTROL eControl allows you to manage the electric equipment in underground mines, such as fans, water pumps and substations. With eControl, it is possible to trigger the equipment from the control center, resulting in a better management of the mine´s energy. All information from the different electric equipment monitored by eControl is available in a single platform, facilitating access and standardization and minimizing costs. • SAFETYOU SafetYou® is a Devex solution for the tracking of people in underground mines through cutting edge technology, offering essential safety information automatically and reliably. With SafetYou, you visualize directly on the system, in real time, the number and location of all operators in each region.

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Architects of African growth Marketing Manager, Cedric Leturcq talks about BIA’s operations in Africa and its contribution to the development of the continent

written by: Will Daynes research by: Gareth Hardy 134 | BE Mining


BIA

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BIA

I

BIA technician on-site

was in 1902 that a mining engineer by the name of Georges Bia first opened up a sales office in Brussels. It is here that the routes of the BIA Group can be traced back to. Today, 113 years later, BIA exists as a leading international company in the field of machine distribution for the civil engineering and construction industries, with its head offices remaining in Belgium. “It was in 1948 that business for the company really began to take off when Georges Bia’s son, Jacques Bia, established three companies, two distribution companies based in Brussels and the Congo (the BIA Technical Office), and a mechanical repair company in the Congo,” explains Marketing Manager, Cedric Leturcq. BIA would continue to evolve and grow in the subsequent decades, however it was in 1998 that the company’s development began to accelerate dramatically with the company signing an exclusive distribution contract with Komatsu for six French-speaking African countries. By 2003 this figure had grown to 11 and today the company can be found holding exclusivity rights to Komatsu equipment in 15 different nations. It was in 2006 that BIA’s Export Department transformed into BIA, a subsidiary that is today responsible for all of BIA’s activities in Africa. In addition to its work on behalf of Komatsu, the company is equally proud to be distributors for a host of other premium brands including Sandvik, Bomag, Cummins, Tecnogen and Terex Cranes. With the continent continuing to prosper there has understandably been a continued influx of international companies arriving

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in Africa in recent years. One of the things that Leturcq and others have noticed about a number of these companies is the fact that they arrive with little knowledge of African culture or of the political and economic barriers that exist. This is where BIA becomes a partner of choice. “While we have been representing Komatsu since 1998, BIA has been present in Africa for more than a century,” Leturcq continues. “Therefore it is safe to say that we possess a strong knowledge of Africa culture and how best to conduct business here. Perhaps equally as important is the fact that we know firsthand how one should never underestimate the complexities that exist in this part of the world.” What the majority of the companies now entering the African market share in common is a desire to focus almost exclusively on their core business, in this case production. To this extent they are turning to companies to provide associated services. Where BIA looks to position itself ahead of its competition in this regard is by offering a complete a-to-z service whereby its project management teams can oversee all manner of tasks including logistics, the organisation of spare parts, assembly, repairs and overhauls. Of course offering this type of service also allows a client to have direct control of their

costs, something that is very much a feather in the cap for BIA. “Our approach to business has always been very customer support orientated,” Leturcq states, “to the extent where today 75 percent

“BIA exists as a leading international company in the field of machine distribution for the civil engineering and construction industries” 138 | BE Mining


BIA

On-site repair of dump truck

of our human resources fall into the after sales side of the business. It is this pool of technicians, engineers, engine specialists and mechanics that we are keen to continue developing. Our strategy has never been to simply lead the market by price or volume, rather we have strived to position ourselves as the supplier of choice when it comes to quality.” In more recent times BIA has found itself working on a number of large-scale greenfield projects including First Quantum’s Sentinel mine project in Zambia. These are large scale undertakings starting from zero and

in the case of the Sentinel project BIA was consulted directly about all manner of things from the definition of equipment to what infrastructure would be required in terms of workshops, re-build centres, warehouses and training facilities. A number of similar projects are on the horizon for BIA and symbolise the big ambitions that the company has. “As strange as it sounds,” Leturcq says, “perhaps one of the biggest challenges we have faced in the last decade is just how fast we have grown. To sustain this growth we have taken on an

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“Where BIA looks to position itself ahead of its competition is by offering a complete a-to-z service” increasingly large number of people, going from having around 400 Belgian and African people working for us across the continent in 2009 to more than 1,000 today. In response to this we have worked hard to restructure

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our organisation in such a way that we are now able to not only retain the talent that we have, but also provide the training needed to create the next generation of workers.” The key to BIA continued success, according


BIA

BIA personnel conducting cement industry operations

to Leturcq, is a dedication to continued investment, not only in its human resources but also its infrastructure. To this end the company is looking to build further upon the five additional branches that it opened across Africa in 2012, with a new branch set to open in Liberia imminently and plans to increase its presence in Cameroon expected to come into effect in early 2014. “Another important development to note,” Leturcq concludes, “is that we are now in the process of implementing an SAP IT system across the business. This is admittedly a massive

investment, however we believe that, given our size, without a strong IT system we lack the optimum level of efficiency that we desire. We recognise that as we continue to grow that this kind of investment becomes all the more necessary and we will not hesitate to seize the opportunity to better ourselves in the years ahead should the opportunity present itself.” For more information about BIA visit: www.biaoverseas.com

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company in brief BIA Overseas is a subsidiary of BIA, and is responsible for BIA’s activities in Africa, where it is present in 20 Central and West African countries. BIA has been working in Africa since 1948, but it was not until 2006 that its Export Department became BIA Overseas. BIA Overseas is proud to be the only distributor of premium brands (Komatsu, Sandvik, Bomag, Cummins, Tecnogen, Terex Cranes) able to provide its customers with a complete solution, to guarantee the best possible productivity at low operating cost. Because each customer is special, BIA offers its customers a tailor-made

approach. BIA’s experienced engineers are here to guide the customer, right from the initial stages of a project. By planning, organising, and controlling the specific resources, BIA gives its customers confidencet hat their projects will be successfully and efficiently completed.

Activities

Services

Thanks to its range of complementary products, BIA is proud to be the only distributor in West Africa and Central Africa able to provide customers with a complete solution for any activity:

In addition to being a distributor of premium brands, BIA is proud to offer its customers local services all over Central and West Africa:

• Mines • Quarries and aggregates • Building and Public Works • Logging and Farming • Industrial Handling • Recycling and Waste Disposal

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• Project Management • Finance • Logistics and installation • Parts supply • Technical support • Service Contracts • Technical training • Rebuilding of Engines and Components • QHSE • Second-Hand Machines


BIA Presence

partner brands

With direct presence in Benelux and in 20 countries in West and Central Africa, BIA advises and supports its clients in their mining, quarrying, forestry and public works projects. Each African country in which BIA is present has its own infrastructure. Consequently, BIA is able to offer its customers local and high-quality service.

• Komatsu • Sandvik • Bomag • Terex Cranes • TecnoGen • Cummins

• Benin • Burkina Faso • Burundi • Cameroon • Central African Republic • Chad • Congo • Dem. Rep. Congo • Gambia • Guinea • Guinea Bissau • Ivory Coast • Liberia • Mali • Mauritania • Mauritius • Niger • Nigeria • Rwanda • Senegal • Sierra Leone • Togo • Zambia

Offices BIA Overseas BIA Overseas s.a. Avenue Einstein, 6F B-1300 Wavre Belgium Phone : +32 10 23 45 11 Fax : +32 10 23 45 10 Equipements & Services BIA Level 2, Nexteracom Tower 1, Cybercity, Ebene Mauritius Phone : + 230 40 26 700 Fax : +230 46 48 733 www.biaoverseas.com

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grindex

THE ART OF STAYING DRY One of the strongest brands in the world for dewatering pumps, Grindex is an important partner for mining, construction and infrastructure: as part of the Xylem group it has a truly global reach

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

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G

rindex was founded in 1940 by two Swedish engineers. Among its earliest products was a rock grinding machine: this established the firm in the mining and construction markets; however when co-founder Bรถrje Kristensson was out selling the grinding machine, he came across a new product on the market, a submersible drainage pump. The problem with submersible pumps in the early 1960s was that they were heavy and could not run dry. Kristensson set

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about developing a lightweight pump that could run dry, thanks to a patented air valve. The rest, as they say, is history. Grindex retained its name, but by the 1980s sold the grinding machine business and positioned itself as a specialist in dewatering pumps for many applications. Today the company is a global leader in submersible pumps for demanding applications such as construction, mining and rental. Grindex products are exported all around the world through more than 50 regional distributors.


Grindex

In 1989 Grindex set up a USA subsidiary in Chicago. The company’s current Managing Director Per Rehn went out there in 2009, two years after he joined the company, to manage a strategic expansion into the Canadian market. Having overseen the growth of sales in North America in the course of two years, he returned to Sweden where he now heads the global activities of Grindex AB. The year 2008 saw a major restructuring of the company. “At that time it was decided to optimise the synergies between the

different specialist pump manufacturers in the ITT group and to develop a platform upon which to develop the Grindex range along with others within the corporation,” says Rehn. This reduced the amount of overlap within the group’s product ranges, as well as introducing the sound automotive industry principle of utilising common components wherever possible. The company closed its old office and moved to new premises in Stockholm. At the same time the manufacturing facilities

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$50 million Grindex 2012 turnover

were rationalised as well. Grindex closed its Stockholm factory and moved production to an extended manufacturing facility at Emmaboda in the Småland district of southern Sweden, with dedicated lines for the Grindex ranges. Divested of the need to run a manufacturing facility Grindex now concentrates on its sales, marketing and logistics functions and on extending its reach in overseas markets. The new set up has been very beneficial for Grindex’s sales, its top line growing from SEK 210 million, or around $33 million in 2009, to SEK 332 million in 2012 – a little over $50 million. It will be observed that the growth in business both in the USA and globally under Rehn’s watch was achieved in the face of a global recession. However he is quick to admit that it was helped by the fact that the mining sector, one of the principal applications for the range, has expanded as softer markets have contracted. The company, leaner after its reorganisation, retains the key advantages that established the brand. “Having been in the market since the 1960s we have a legacy of satisfaction from our customers, and of knowledgeable, experienced people working in the company.” This legacy has positioned Grindex as one of the very few truly global brands, its major competitors the

148 | BE Mining


Grindex

Japanese manufacturer Tsurumi and ABS pumps, recently acquired by Sulzer. In 2011 the water management businesses within the ITT group were combined and the new group was named Xylem – as every schoolchild should know, xylem are the waterraising filaments in trees and plants! To illustrate the power of Grindex pumps when faced with a really challenging problem, one of the best examples comes not from Africa or Asia, but on Grindex’s doorstep in Sweden, says Rehn. In 2011 the locks of the Trollhättan canal in central Sweden needed to be upgraded, and new gates installed. Each lock can accommodate ships up to

4,000 tonnes: they are 89 metres in length, 13 metres wide and 5.4 metres deep and hold more than 6,000 cubic metres of water. Four locks needed emptying, so powerful and reliable pumps that could operate around the clock were essential. Staff from Grindex’s technical department assisted the contractor Sjuntorps Industri Support AB with the sizing of the pumps. With 37 million litres of water to be drained before work could get started, three slurry pumps, 22 drainage pumps and a sludge pump were recommended. After 25 days the project was successfully completed and the canal re-opened to shipping: the pumps were

“we have a legacy of satisfaction from our customers, and of knowledgeable, experienced people working in the company” BE Mining | 149


“I think local knowledge is very important if you want to build a good relationship with the mine management� given a standard service and put back into storage awaiting the next rental project. Mining companies are now increasingly turning to Grindex to cope with harsh conditions underground. In the largest underground copper mine in the world in Chile, Grindex Inox pumps able to pump 50 litres per second paid for themselves within months when installed to replace conventional end-suction pumps that were

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pumping only 15 litres per second and had spare part availability problems. The mine needed to reclaim copper from the water rather than just send it to the treatment plant. Grindex’s exclusive distributor for the Chilean market, Santiago-based ACH, provides a maintenance contract where the pumps are pulled out for preventive maintenance every 2,000 hours and replaced by stand-in pumps. The preventive


Grindex

maintenance avoids unscheduled stops and more expensive repairs and the total maintenance cost is cut drastically. To keep up not just with the volume growth in mining but also its geographical expansion, Per Rehn wants to refocus his team and his resources onto emerging markets. This approach has paid off in Latin America through hiring people resident in Sweden but born and raised in Central and South America. “They are versed in the culture, know the local languages and understand the way business is done in these markets. I think local knowledge of this sort is very important if you want to build a good relationship with the mine management.” There are Australian, Russians and people from South Africa in Grindex working

alongside local distributors to penetrate these markets. “It is our strategy to make full use of distributors in most of our markets – we do not have our own sales teams in the field except in USA and even there we appoint regional distributors too.” Appointing a distributor is a long-term commitment, he adds. “We consider ourselves very entrepreneurial, and we like to encourage a similar spirit in our distributors. In response we try to listen to them and respond in a flexible way when they suggest improvements, something they appreciate.” For more information about Grindex visit: www.grindex.com

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company in brief Grindex is a world leader in electrical submersible pump technology for demanding applications such as construction, mining and heavy industry. The pumps are known for their high reliability, durability and dependability. Thanks to the built-in motor protection and the air valve, the pumps can run unsupervised for longer periods, and even run dry for a length of time. Grindex was founded in 1940, and has been located close to Stockholm, Sweden, from the start. Since 1960 we’ve been dedicated to develop absolutely the best quality electrical submersible pumps - designed without compromise for professional users the world over. We strive to

offer a pump for every need: drainage, sludge and slurry, in the most challenging environments imaginable. Grindex exports to nearly 100 countries around the world, and has subsidiaries in the USA (Grindex North America) and Australia (Grindex Asia-Pacific).

office locations • Argentina • Australia • Austria • Belgium • Bolivia • Brasil • Bulgaria • Canada • Chile • China • Colombia • Costa Rica • Croatia • Czech Republic

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•D enmark •E cuador •E gypt •E stonia •F inland •F rance ermany •G •G reece •H ong Kong •H ungary • I celand • I ndia • I ndonesia • I taly •K azakhstan

•K ingdom of Bahrain •K uwait aos •L •L atvia •L ithuania •M alaysia •M exico •M ongolia •M orocco •N icaragua •N orway •P anama •P araguay •P eru

• Philippines • Poland • Portugal • Qatar • Republic of Ireland • Romania • Russia • Saudi Arabia • Singapore • South Africa • Spain • Sultanate of Oman • S weden

• S witzerland • Thailand • The Netherlands • Turkey • Ukraine • United Arab Emirates • United Kingdom • Uruguay • USA • Venezuela • Ghana • Vietnam


grindex products 50Hz pumps • The Drainage range will take care of all kinds of dewatering jobs. • The Sludge range is there for you when things get really dirty. •P roblems with sediment? The Bravo pumps can dredge sedimentation sumps or in general any heavy slurry. • Is the water corrosive or maybe an agressive liquid spilled in your process plant? The Inox range, manufactured in AISI 316 Stainless Steel, will take care of your problems!

60Hz pumps • The Drainage range will take care of all kinds of dewatering jobs. • The Sludge range is there for you when things get really dirty. •P roblems with sediment? The Bravo pumps can dredge sedimentation sumps or in general any heavy slurry. • Is the water corrosive or maybe an agressive liquid spilled in your process plant? The Inox range, manufactured in AISI 316 Stainless Steel, will take care of your problems!

Accessories • Level regulators • Tandem connections • Low suction collars • Zinc anodes • Starters • Pump rafts • Couplings etc.

Grindex pumpselect We have a program called Grindex pumpselect that helps you find a Grindex pump that suits your needs.

Activities

Services

• Mines • Quarries and aggregates • Building and public works • Industrial handling • Recycling and waste disposal

• Parts supply • Technical support • Service contracts • Technical training

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An ambitious target South Africa-based Filcon Filters has set an ambitious target of 25 percent annual growth over the next three years. Directors Vernon Clarke, Tony Henfrey and George Canning talk about running a knowledge-based business

written by: Gay Sutton research by: Marcus Lewis

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Filcon Filters

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Trevor giving a piece of pipe the evil eye


Filcon Filters

M

anufacturing, water and waste water, oil and gas, food and beverage, petrochemical, paint—no matter what business you are in, continuity is essential. Downtime and quality issues cost money. So it’s small wonder that many companies prefer to stick with the brands and suppliers they know and trust. One company supplying top quality proprietary products, but also encouraging customers to break the cycle of inhibition when a custom-built product would be more effective, is Filcon Filters. Launched in 2000 by owners Tony Henfrey and Vernon Clarke, Filcon initially began trading as an importer and supplier of proprietary filtration products with a distribution licence for Hayward Filtration, now part of Eaton Filtration. From its base in Cape Town, the company quickly expanded and diversified, and today stocks a wide variety of products that include self-cleaning, back washing and centrifugal filters, market, basket and flushing strainers, filter cartridges and bags as well as filter media in the form of materials such as activated carbon. “We are still diversifying,” said sales director Vernon Clarke. “We’re always looking for new types of equipment and technology, and if a new product fits with us we will investigate it.” Vernon drives sales and Tony positions the Filcon brand through press releases and search engine optimisation. Filcon’s aim is to become South Africa’s leading filtration specialist. Over the past 13 years considerable progress has been made towards that goal. “Today, we provide not

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25% Annual growth target from 2012 to 2015

PS250 Auto with brush

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just products,” explained financial director Tony Henfrey, “but we also answer any questions our customers have on filtration, and we will even design filtration systems to solve specific application problems.” Through a combination of in-house technical expertise, reliability and integrity, the company has built a solid reputation for excellence. “Service levels are particularly important to us,” Clarke continued. “If we are able to service the customer to the level that meets with their satisfaction, price is not always the key. People will purchase from us because we have the stock levels, and we deliver on time.” As part of its strategy for growth, the company opened a second office in Johannesburg two years ago, close to South Africa’s industrial heartland. One of the key roles of the new technical centre is to diversify into a new gap in the market. “With the rand weakening against most currencies and imports therefore becoming far more expensive,” Henfrey said, “we realised that manufacturing our own range of products would give us an edge.” The manufacturing arm of Filcon is managed and run by design engineering director George Canning who brings some 30 years’ experience to the business.


Filcon Filters

200GTSSHP in duplex format

The economics of manufacturing custom products in South Africa are, he believes, very persuasive. “Because of the size of the market here and the sheer range of filters that are available on the global market, it’s impractical to hold stocks of them all. So if a customer requires a filter that is in any way non-standard, the freight costs of importing a one-off product are simply prohibitive,” he said. “In the past, plant engineers have had to modify their plant in order to accommodate a filter from the standard range. The service we’re offering means they don’t have to do

that. We will design non-standard filters from scratch to their specification. We then outsource the manufacture to one of three trusted fabricators here in Johannesburg.” With Filcon’s reputation for technical excellence, the service has proved very popular. It saves on freight costs, reduces the downtime, cost and risk associated with adapting production equipment. All Filcon filters are manufactured to ISO 9001:2008 quality standards, and the company retains control of the entire process by providing not only the detailed technical designs but also the raw materials and components.

“We’re always looking for new types of equipment and technology, and if a new product fits with us we will investigate it” BE Mining | 159


Since launching the new service, Canning has continuously been refining the design and manufacturing process to increase efficiency and reduce lead time, therefore making custom manufacture even more attractive. For example, where there are components and materials common to several products, the company always holds significant quantities in stock. Custom manufacturing has been very successful, and the unit has made a name for itself with some of its products. Among the more significant is the Dirt Gobbla, a centrifugal filter that is currently unique in South Africa. “We’re also known for our centrifugal strainer, our automatic purging strainer and back washing strainer,” Canning said. “And we’ve developed a popular line of locally manufactured in-line basket strainers.” As Filcon is a knowledge-based enterprise, ensuring business continuity has become a high priority. “This is something we’re very conscious of, and have been planning for,” Clarke said. There are currently two young graduates employed under Canning at the Johannesburg office, and one under Clarke at Cape Town. All three are undergoing a mixture of formal training and continuous in-house coaching where they are learning

skills and gaining experience of the industry, absorbing knowledge almost through a process of osmosis. “One is a young African lady who has a BSc in geology with a chemistry background which should be an aid in water treatment. It’s her first job out of graduation,” Henfrey explained. “She is showing tremendous potential and is probably one of the first black women to

“At this stage, we see mining as a real growth area, and we’re also looking at the oil and gas industry, particularly in Namibia, Mozambique and Tanzania” 160 | BE Mining


Filcon Filters

300GTSSLP Strainers

700mm Strainer 3

venture into the filtration industry, so we’re nurturing her.” Alongside this, the company has been working to improve its BEE (broadbased black economic empowerment) score, and has recently raised this to level 2, an achievement that delivers added benefits for the customer. With these achievements under its belt, Filcon has set a challenging target for growth. “We have set ourselves a target of increasing sales by 25 percent per annum from 2012 through to 2015, and we are on target to achieve that this year,” Henfrey continued. “Our next priority is to open an office in Durban as we believe there is a big market in South Africa that we have not yet tapped. But we are also looking into Africa as a whole.” The company has already begun to

make inroads into the wider African market through third party suppliers. “At this stage, we see mining as a real growth area, and we’re also looking at the oil and gas industry, particularly in Namibia, Mozambique and Tanzania. And of course with South Africa being the 20th most water deprived country in the world there is tremendous potential for recycling and reusing water.” With so many new opportunities in a rapidly expanding industry base, the target seems well within range. For more information about Filcon Filters visit: www.filconfilters.co.za

BE Mining | 161


company in brief Filcon Filters was established in June 2000 in Cape Town, South Africa and now there is also a branch in Johannesburg. Filcon Filters are distributors or agents of filtration products for the following manufacturers:Hayward Filters, LAKOS centrifugal separators, Hilliard Corp (Hilco filtration products), Filterteknik, Argonide Corp (Nanoceram), Fairey Ceramics (Doulton & British Berkefeld), Filtration Technology Corporation and Sun Central. Filcon Filters also manufactures its own range of centrifugal separators (Dirt Gobbla), filter bag housings (FCB range), purging strainers (type PS), in-line basket strainers (type GT) and back flushing strainers (BFS range). Any of these products can be made to customer specifications. But we do not just manufacture and distribute

162 | BE Mining

filtration products we solve filtration problems. Filcon is a specialist filtration problem solver with two of our technical staff having over 50 years of combined experience. Of particular interest to our customers is that Filcon Filters is an ISO 9001.2008 certified and audited quality managed company. And for South African procurers who desire to improve their company’s Preferential Procurement status for BBBEE, the good news is that Filcon has now achieved level 2 status, which is a procurement recognition level of 125%.


filcon filters PRODUCTS

office locations

• Amine Filtration • Bag Filter Housings • Catalyst Bed Protection • Centrifugal Separators • Coalescers • Compressed air/gas • Filter Bags • Filter Cartridges • Laboratory Filtration • Mechanically Cleaned Filter Systems • Oil & Fuel Filtration • Pressure Filters • Strainers • Waste Water Treatment Plants • Water Sterilization

Cape Town Westlake Business Park 4 Ibis Park, Bell Cresent Cape Town Western Cape 7945

Partner brands • Argonide • Eaton Filtration • Gaf Filter Systems • Fairey Industrial Ceramics Limited • Ftc Filtration Technology • Hilliard • Star Filters • Lakos • Micfil Gmbh • Microbac • Ronningen Petter • Sun-Central Filters • Ueberall Gmbh

Tel: +27 (021) 702 0979 Fax: +27 (021) 702 1989 Email: info@filconfilters.co.za Johannesburg The Old Tin House 29 High Street Modderfontein Gauteng 1645 Tel: +27 (011) 608 1734 www.filconfilters.co.za

BE Mining | 163


164 | BE Mining


Perseus Mining

Born to seek gold

Perseus was born to DanaĂŤ after Zeus came to her in the form of a golden shower: auspicious for Perseus Mining as it continues to focus on under-explored gold assets in West Africa

written by: John O’Hanlon research by: Robbie Hodgson

BE Mining | 165


Molten gold in crucibles following a gold pour at Perseus Mining’s Edikan Gold Mine


Perseus Mining

P

erseus Mining Limited is a company listed on the Australian Stock Exchange and based in Perth; however despite its Australian accent it is an African specialist, specifically focused on the gold producing countries of West Africa. Over the years it has forged a reputation as one of the world’s most successful gold explorers, with a quarter of a century of involvement in Ghana and its neighbours coming into fruition very recently, starting commercial production on 1 January 2012. : as one of its founders Mark Calderwood has described it, Perseus Mining is an overnight success that was 25 years in the making! Calderwood, the current chairman Reg Gillard and executive director Colin Carson have been taking an active interest in the under-explored mineral deposits of West Africa for that long, but it was not until 2004 that, having secured a couple of gold bearing deposits in Ghana, Côte d’Ivoire and the Kyrgyz Republic that they formed a company and floated it on the ASX. Despite a couple of years of quiescence while world markets were depressed progress has been steady since then. In 2006 Perseus acquired the tenements that today host its Edikan Gold Mine formerly known as the Central Ashanti Gold Project (CAGP) and Ayanfuri, though exploration and feasibility work could not really get under way till 2009. By 2010 though the company had successfully recapitalised, obtained a positive full feasibility study and started to build its flagship project, the Edikan mine in Ghana’s rich Ashanti gold belt.

BE Mining | 167


Phone: (+233) 0303 310976 Email: info@skylimitsb.com www.skylimitsb.com

Need a lift? Call

SKY LIMIT Nothing too heavy, nothing too high!


Perseus Mining

SKY LIMIT STRUCTURE BUILDERS LTD Sky Structure Builders Ltd. and Equipment Rentals can be described ad “the specialist of the extraordinary’. We strive to make your experience using Sky Limit dependable, efficient and satisfying; making customer satisfaction our virtue. Our name says it all; we’re into Equipment Rentals and Commercial & Residential Construction. Equipment Our fleet consists of: Cranes (500Tons30tons), Forklifts (28Tons – 2.5Tons), Telescopic Forklifts (5Tons), Reach Stackers (45Tons), Trucks mounted with hydraulic cranes, Tower Cranes, Low Loaders, Low Beds, Back Hoe, Excavators, Bulldozers , Cherry Pickers, Generators, Water Pumps, Tower Lights, just to name a few. Construction Perfection, by definition, is unattainable but by its very nature, worth pursuing. Throughout Sky Limit’s history and preceding, we’ve had a strong background in Commercial & Residential construction. We have pursued perfection in our buildings, our relationships and our conduct across the countless communities in which we live and

work. Its is something we aspire to on a daily basis. How we reach for this lofty goal is what sets us apart, it’s what makes us different. It’s our unwavering commitment in our pursuit of building perfection. Sky Limit’s Success = Its’ Spirit Enterprise Our Mission Because of our permanent focus on the future, we have a highly skilled multilingual crew and very advanced & dependable equipment to satisfy the often “extra ordinary” needs of our customers. Availability, dependability, accessibility, rapid/ on-time delivery and response are just part of making our work unique and special. With the opening of borders, we expanded from Ghana into the West African market with a lot of self-confidence. It brought our company explosive growth, extending our services into neighboring countries. Prevention and security are priorities to Sky Limit, we’d better be safe than sorry when it comes to personnel injuries and damages to material or our environment. Sky Limit has set the example for its competitors and still takes the leading position in this field. Our vision and expertise are what make Sky Limit a successful fully indigenous company, evolving into an international company. We build our future on the foundation of a rich past. We are now an outstanding West African market player in construction and equipment rentals. E. info@skylimitsb.com www.skylimitsb.com

BE Mining | 169


WEIR MINERALS WEST AFRICA LIMITED Weir Minerals are specialists in delivering and supporting slurry equipment solutions including pumps, hydrocyclones, valves, screen machines and screen media, rubber and wear resistant linings for global mining and mineral processing, the power sector and general industry. Our products strength lies in the superiority of our hydraulic designs and wear and corrosion and abrasion resistant materials. In slurry pumping, processing and control applications where the cost of ownership often outweighs capital cost as a priority, we help our customers address such issues as longevity, capacity, efficiency of operation, and maintenance. We partner with our clients to understand their need for specific equipment, in order to supply the most efficient equipment for their operations. Weir Minerals has been committed to delivering market-leading services and products. Our whole product and process solutions are designed to meet both the commercial and technical challenges of customers operating within the global mining and minerals processing industry. Weir Minerals delivers end-to-end solutions for all transportation, waste management, processing and mining activities. With over 13 years’ experience in Ghana and across West Africa, we have been excellent partners in mineral processing across the West African sub-region. www.weirminerals.com

170 | BE Mining


Perseus Mining

A view of the Edikan plant and conveyor belt

It was just before the start of project development that Jeff Quartermaine joined the team as CFO. Up till then, he says, the company had been brought forward by a team whose main expertise lay in exploration and business development – and they were good at it, having grown the resource from about 130,000 ounces of gold at the time of

acquisition to almost eight million ounces today. But they were not blind to the fact that along the development curve different skills are needed. In 2011, shortly before Edikan went into commercial production, the team was joined by Jon Yelland as Chief Operating Officer and in February 2013 Quartermaine succeeded Mark Calderwood

“In three years we have come from being a junior to a fully integrated mid-tier gold producer” BE Mining | 171




Telephone: +233 24 410 2524; +233 20 126 5124; +233 20 811 7058 Email:admin@newgiftventures.com; ikofintiri@newgiftventures.com www.newgiftventures.com

TIMELY SOLUTIONS THROUGH MINING SUPPORT SERVICES BUSINESS SERVICES: • Supply Equipment for mining activities. • Construction and maintenance of Haul roads and mining site access roads. • Construction of Tailings Dam. • Construction and maintenance of Mining Site Offices, Workshops and Residential accommodation. • Security Fencing construction and maintenance. • Stabilization of clayey lateritic soil with Claycrete Stabilizer Solution. • Kleenoil Filtration for Fuels and Engine oils.


PERSEUS Mining MINING Perseus Mining feature tempor incididunt ut labore as Perseus Managing Director and et dolore magna aliqua. Ut CEO. years we have text “In to three go here... Lorem enim ad minim veniam, quis come being asit junior to a ipsumfrom dolor amet, fully integrated mid-tier gold nostrud exercitation ullamco consectetur adipisicing elit, laboris nisi ut aliquip ex producer,” he says. tempor sed do eiusmod incididunt ut labore et dolore The new boss certainly ea commodo consequat. magna aliqua. enim ad does not regretUt accepting Duis aute irure dolor in minim veniam, quis nostrud Gillard’s invitation to come on reprehenderit in voluptate exercitation ullamco board. “We have comelaboris a long velit esse cillum dolore nisi ut ea years, commodo way inaliquip the lastex few and eu fugiat nulla pariatur. consequat. Duis aute ofirure my initial assessment the Excepteur sint occaecat this is aManager, caption Michael cupidatat non sunt people Perseus turned dolor behind in reprehenderit in This is a caption Environment Sackey, onproident, the revegetated main embankment of the qui tailings storage facility out dead right it is acillum firstin culpa officia deserunt voluptate velit –esse rate team. thing Perseus dolore eu One fugiat nulla pariatur. Excepteur mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur produce 51,000 ounces ofadipisicing gold in Q4elit, at has without exception to alwayssunt try to sint done occaecat cupidatat nonisproident, in deliver culpa qui officia deserunt mollit anim id an sed all-in do esse epteur occaecat non site cost sint of $1,060 ancupidatat ounce, well to on its promises.” This despite some est laborum. ipsum dolor amet, below proident, in culpa qui officia deserunt thesunt industry average. The first three problems withLorem the processing plantsit towards consectetur elit, sed domanaged eiusmod months mollit anim id est laborum. the end of adipisicing 2012: the mine still of this year were a record quarter,

NEWGIFT VENTURES LIMITED Newgift Ventures Limited has since May 2011 been providing mining support services such as supply of heavy equipment for the construction of tailings dam, haul roads and access roads to Perseus Mining Limited and

other mining companies in Ghana. We also undertake the construction and maintenance of security fencing, site offices, workshops and site residential accommodation. With our desire to provide prompt and customer tailored mining support services, Newgift Ventures Limited has transformed from a sole proprietor enterprise, beating the stiff competition in the industry to become a major mining support service company. Newgift Ventures Limited has as an annual turnover of about USD 10 million. E. admin@newgiftventures.com www.newgiftventures.com

WEEKLY| 175 |2 BEBEMining


GRACO ENGINEERING LIMITED Complete Solutions for low voltage electrical systems

We provide electro-technical Services, Sales and Support for residential, commercial, telecommunication and manufacturing facilities. To ensure the adaptation of the highest standards in the execution of projects and supplies, at reasonable and affordable costs.

Telephone: +233 277406628, +233 243670778, +233 302935382 and +233 312098781 Email: ncommey@gracoengineering.com, info@gracoengineering.com www.gracoengineering.com


Perseus Mining continuing remediation work Graco Engineering Limited on the plant notwithstanding. Graco Engineering Limited has been operating in these The mine has continued to areas for the past years; produce well in the difficult • Panel building and supply of accessories. trading conditions that have • Installation and commissioning of capacitor banks and notoriously hit the gold other power electronic component for power management. market during the second • Customized control systems for Millers, Extruders, Compressors, Crushers, etc for the Mines and other. quarter of 2013, with the Industrial Facilities. plunge in gold prices since • Sales and Supply of Mennekes Industrial Plugs and our last report on Perseus in Sockets. March. •S ales of industrial control components i.e. Circuit With prices beginning to Breakers, Contactors, Relays, etc from leading European rise already and industry brands like Schneider Electric, Siemens, ABB, EATON, watchers predicting a ORTEA, etc. • Sales of Electrical fixtures and Installation Accessories. recovery to last year’s record www.gracoengineering.com levels and beyond when the mechanisms for gold price discovery are placed on a more realistic footing, prospects for the rest of the year are good. As it stands, Edikan managed to produce a total of 104,744 ounces in the six months ended 30 June 2013, which was in line with its target. “With the recent strengthening of our operating management ranks at Edikan and a very sharp focus on cost efficient production, we are well placed to undertake the task of restoring market confidence in our ability to consistently

“we are confident in our ability to produce profitable ounces of gold”

Molten gold being poured

BE Mining | 177


WE’LL NEVER LET YOU DOWN. Market leaders in heavy lifting equipment sales, rental and aftermarket care in West Africa.

T: +44 1273 625969 | sales@patersonsimons.com | www.patersonsimons.com


PERSEUS Perseus MINING Mining Perseus Miningounces feature consectetur adipisicing elit, produce profitable of text tosays goQuartermaine. here..... Lorem sed do eiusmod tempor gold,” incididunt ut labore et dolore ipsum sit Africa amet, Ghana,dolor and West magna aliqua. Ut enim ad consectetur adipisicing elit, generally, is not such a risky minim veniam, quis nostrud sed do eiusmod tempor place to do mining business incididunt labore imagine. et dolore exercitation ullamco laboris in as youutmight magna aliqua. Ut enim nisi ut aliquip ex ea commodo “We have worked hard ad to minim veniam, quis with nostrud consequat. Duis aute irure forge good relations the exercitation dolor in reprehenderit in government ullamco and ourlaboris host nisi ut aliquip exbut ea commodo voluptate velit esse cillum communities, I think it consequat. Duis autepeople irure dolore eu fugiat nulla pariatur. is interesting when sint occaecat dolor in the reprehenderit talk about political risk in of This is a caption this is a caption Excepteur View of the pit at Edikan Mine cupidatat non proident, sunt voluptate velit esse mining in Africa: I don’tcillum think qui officia id dolore fugiat nulla higher pariatur. Excepteur the riskseuare that much than in many in he culpa suggests, makes deserunt Perseus’smollit base anim country laborum. Lorem ipsum environment dolor sit amet, sint nonorproident, sunt est otheroccaecat regions.”cupidatat The MRRT super profits as challenging a business as in qui officia deseruntfrom mollit anim id consectetur adipisicing elit, sed do taxculpa introduced in Australia July 2012, any, and Ghana in particular haseiusmod a very est laborum. Lorem ipsum dolor sit amet, tempor incididunt ut labore et dolore magna

PATERSON SIMONS Paterson Simons are a UK based company with subsidiaries throughout West Africa. We are market leaders in the sale, rental and aftermarket care of heavy lifting equipment throughout the region. Our newly built parts warehouse in Accra provides original parts and advice, as well as swift sourcing at a moment’s notice. We also offer full service and maintenance contracts, which mean our customers can rely on their lifting equipment to work where and when it has to. We provide mining companies throughout the region with turn-key crane solutions across their mine’s operations. We begin by making sitespecific recommendations around a customer’s lifting requirements. Our on-site engineers will then issue a comprehensive assessment to mine management on their mobile cranes, overhead cranes, telehandlers, forklifts and container

handling equipment needs including the siteing of hard standing areas for critical maintenance lifts. We will also assess and recommend any refurbishment of existing lifting equipment. As West Africa’s Grove dealership we will then go on to supply the entire mine’s required mobile (Grove) and overhead cranes (Konecranes) and rigging gear. Our team of safety inspectors, trainers and engineers additionally provide: • Assessment, training and certification of operators • Maintenance and periodic inspections of equipment • Annual certification of lifting equipment • Assessment, training and certification of riggers and rigging gear • Assessment and training of supervisors and key managers. T. +44 1273 625969 www.patersonsimons.com

WEEKLY| 179 |2 BEBEMining


Technodraft & ENGINEERI N G Quality and safety are the hallmarks of Technodraft. Try us and we shall deliver.

Contact T: +233 246 220 874 E: techno.draft@yahoo.com

Seen When professional and safe logistics are required

Email: contact@stlsgh.com, ghass@stlsgh.com Tel: +233 208 206957 Cell: +233-244-310180 STLSGH is a Ghanaian transport company that is specialised in handling and disposing of hazardous & none hazardous chemicals

Contact us today and put your company in the spotlight!

vincent@bus-ex.com


Perseus Mining forward-looking regime when it comes to co-operation with Technodraft are specialists when it comes to steel works the mining companies. design and the detailing of steel structures used across In reciprocation Perseus various civil projects. Technodraft’s team of highly has been assiduous in doing experienced technicians are experts in constructing the right thing by the host minor turn key projects that meet and exceed a client’s country. Because Ghana technical specification standards. These technicians also work to ensure that the highest levels of quality and safety has a longer history of are maintained during all tasks that take place on-site. mining than many other Technodraft also supplies major construction firms with a countries, it suffered more number of other support services. when the mining boom On behalf of Perseus Mining, Technodraft is carrying out hit South Africa and other a range of vital tasks including steel works, civil works, countries on the continent painting and the erection of steel pre-fabricated buildings and all round the world. Its and laboratories. techno.draft@yahoo.com best brains were drained, tempted by the high salaries being offered. This created a shortage of experienced professionals back home, and Perseus is trying to redress this by actively trying to recruit Ghanaians from the diaspora into senior jobs. Of course it would be unrealistic to seek experienced personnel in the surrounding community, so it is remarkable to learn that approximately 50 per cent of the workforce at Edikan is drawn from the five villages nearest the mine. “We could have drawn staff from mining operations elsewhere in Ghana,”

Technodraft

170,000 ounces

Projected annual yield from Sissingué Water quality monitoring at Edikan Mine

BE Mining | 181


MULTI VENTURES LIMITED GENERAL MERCHANTS • CONSTRUCTION WORKS • HIRING OF HEAVY DUTY EQUIPMENTS & PLANTS • PROCUREMENT • PHARMACY • CONSULTANCY SERVICES

We engage in wide range of operations including Building and Road construction, Transport Haulage services, hiring of equipments, Catering Services, Car Rentals, Procurement and general civil engineering works. P O Box 100 - Bibiani, Box 1818 - Kumasi Telephone: 03221- 99949, 024-4624417 | E-mail: ffjk2010@hotmail.com

K. NYAME MULTI VENTURES

HIRING OF HEAVY DUTY TRUCKS & EQUIPMENTS • SAND • CAR RENTALS • PROCUREMENT GENERAL CONSTRUCTIONAL WORKS • CATERING SERVICES • CONSULTANCY SERVICE ETC

We engage in wide range of operations including Building and Road construction, Transport Haulage services, hiring of equipments, Catering Services, Car Rentals, Procurement and general civil engineering works. P O Box 100 - Bibiani, Box 1818 - Kumasi Telephone: 03221- 99949, 024-4624417 | E-mail: ffjk2010@hotmail.com


Perseus Mining

Staff onsite at the Edikan Gold Mine

“Exploration of both Kanadi and Bélé will be followed up as a matter of priority by our exploration team” says Quartermaine, “but we decided that while recruiting locally meant we’d have to spend more on training, it would put money into the local community and increase their engagement with the operation.” Training local people from scratch has the added advantage that they understand how Perseus operates, he adds. “We went out and did aptitude tests to identify who would be best suited to the challenge of working in

our operation. I was fortunate to be on site the day the first trainees arrived and had the honour of welcoming them to the site.” There were around a hundred young men and women, he says, all mightily enthused at the opportunity to become a part of a serious operation within their own community and at having the chance to learn new skills. Quartermaine believes the best way to generate sustainability is through education

BE Mining | 183


LEADING THE ADVANCEMENT OF CUTTING AND GAS CONTROL SOLUTIONS WA R R

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ADVANCED DESIGN | OUTSTANDING FLOW PERFORMANCE | UNSURPASSED SAFETY

CIGWELD WELDING, CUTTING AND SAFETY EQUIPMENT HIGH QUALITY FOR TOUGH CONDITIONS

AUTHORISED DISTRIBUTOR FOR GHANA TAKORADI GAS LTD • P.O. BOX 1050 • TAKORADI, GHANA

Website: www.takoradigas.com Email: tgl@tglgh.com

Tel: 031-202-1159/ 202-1167 • Hot Lines: 0244 330 594 / 0244 354 394 / 0240 777 575 / 0244 479 142


PERSEUS Perseus MINING Mining Perseus Miningpeople feature tempor incididunt ut labore because it equips to et dolore magna aliqua. Ut make ownhere....Lorem choices. Over text their to go enim ad minim veniam, quis the last dolor two years ipsum sit Perseus amet, has sponsored 90 students at nostrud exercitation ullamco consectetur adipisicing elit, laboris nisi ut aliquip ex Kumasi sed do Technical eiusmod Institute tempor incididunt ut labore et dolore (KTI), instituted a scholarship ea commodo consequat. magna Ut enim ad scheme aliqua. for students in the Duis aute irure dolor in minim quis nostrud Edikanveniam, communities to reprehenderit in voluptate exercitation laboris further theirullamco education in velit esse cillum dolore nisi ut aliquip commodo second and ex in ea the future, eu fugiat nulla pariatur. consequat. Duis auteinirure tertiary institutions the Excepteur sint occaecat dolor reprehenderit countryin and announced in a This is a caption this is a caption cupidatat non proident, sunt A view the Edikan plant in culpa qui of officia deserunt voluptate esse cillum six-month velit apprenticeship dolore eu fugiat nulla pariatur. Excepteur mollit anim id est laborum. Lorem ipsum dolor programme to train 120 amet, consectetur elit,process sed do young people incupidatat masonry, non carpentry, electrical promised, or at least adipisicing planned. The sint occaecat proident, sunt sit in culpa quiand officia deserunt mollit anim id eiusmod incididunt ut labore et dolore installation plumbing. plant willtempor be upgraded to increase throughput estMeanwhile laborum. Lorem ipsum dolor sit amet, Ut enim veniam, quis his objectives for this year magna from itsaliqua. present level ad of minim 5.5 million tonnes consectetur adipisicing dohas eiusmod exercitation ullamco laboris nisi ut remain firmly to deliverelit, on sed what been nostrud per annum to eight million tonnes per annum

TAKORADI GAS LTD Takoradi Gas Ltd (TGL) a company in the business of manufacture and distribution of high quality industrial gases. TGL was incorporated in 1994 and has been in operation since then as a successful, dependable quality conscious manufacturer of industrial gases with its manufacturing facility in Takoradi and distribution depots in major regions. TGL is one of the biggest industrial gas manufacturers in Ghana. TGL supplies industrial gases to a wide variety of industries providing vital support for Ghana’s industrial base and development. Our ONE STOP SHOP offers total solutions to all Welding & Cutting Industry needs. Under ONE STOP SHOP, we offer • Industrial Gases (Oxygen, Acetylene, Nitrogen,

Argon, Mix gases, Co2, Helium, LPG etc) • Quality imported Refrigerant Gases (Freon) European brands/ TGL brand • Welding Consumables (all types of Electrodes) from HILCO, Holland (Authorized distributor in Ghana) • Welding & Cutting Accessories from Cigweld Australia, Victor Technologies,US. TGL is the Authorized Distributor for Cigweld (Australia) and Victor Technologies (US) for all welding & cutting accessories. Perseus Mining is exclusively working with Takoradi Gas Ltd since the beginning of their operations in Ghana. We are proud to be associated with Perseus Mining Ltd. www.takoradigas.com

WEEKLY| 185 |2 BEBEMining


NEW PRECIOUS RESOURCE DISCOVERED

Click here to visit our dedicated homepage for the mining community www.bus-ex.com/mining BEST PRACTICE IN MINING


Perseus Mining

Edikan plant staff

by July 2013. From that point he expects Any spare energy is being diverted to the gold production to go forward at a rate of Sissingué Gold Project in north-east Côte some 250,000 ounces a year, with costs kept d’Ivoire. Only perhaps 300 miles apart, they low so that the company can generate a are very different. If Ghana is switched on substantial cash margin. Gold prices may to its resources, its neighbour has less of a be past their peak, but following this policy mining tradition though Quartermaine thinks will keep Perseus in business where high cost it could vastly benefit from development. producers crash out, benefiting proportionally Following a very difficult and unsettled era, when prices rally. the country is now working With the world class very hard to upgrade its Edikan mine at full throttle, mining code so it presents a the subsidiary property in more attractive investment than its neighbours. But late the Ashanti belt, Grumesa 20 kilometres to the east, is last year, when the Perseus Students sponsored at taking a back seat though board was preparing to give KTI in two years the green light to construction drilling continues there.

90

BE Mining | 187


EDERICK LIMITED Ederick Limited is the manufacturer’s representative for Whirlpool home appliances and also sole agents for Taurus, Candy Hoover, EDK and also distributes some electronic appliances for Sony and Panasonic. Some of the appliances that we specialise in include air conditioning units, refrigerators, chest freezers, washing machines, tumble dryers, cookers, microwaves, ovens, hoods, extractors, dishwashers, home entertainment systems, LED & LCD TV’s, blenders, irons, kettles, toasters, rice cookers - to name but a few. Ederick Limited is proud to be associated with many of the mining companies in Ghana including Perseus Mining where we do substantial business. We offer all the solutions to the mining industry’s procurement and service challenges to enable them concentrate on their core business and to maximise their profits. Ederick Limited’s client base includes diplomatic missions, manufacturing companies,

hotels, restaurants & holiday resorts, government agencies, non- governmental organisations and individuals. Over 27 years of quality experience has made Ederick Limited one of the leading home appliance companies in Ghana. We pride ourselves in protecting our environment by ensuring that all our appliances are 100% compliant to energy efficient standards and also supply nothing short of top quality merchandise to our customers. Needless to say, we have the most competitive prices which make our appliances very attractive and affordable. Ederick Limited’s warehouses (including bonded) are dotted around Accra and Kumasi (Takoradi and Tamale coming up soon) to ensure that we always meet and exceed demand to supply our appliances. We offer free delivery of all purchased appliances within the Accra & Tema metropolis and also in Kumasi. All our appliances come with a 12 month warranty on manufacturer’s defects. Our showrooms have service centres attached to them which are equipped with diagnostic facilities and also stock spare parts for repair work to ensure that all parts needed for after sales services are readily available. Our on-site service centres at all our locations ensures that all our customers have the after-sales support they require in maintaining/servicing or repairing all appliances – we also offer service contracts with various institutions for the maintenance of all their office appliances. In an economy like what we have in Ghana, customers expect to have peace of mind with their purchases of home appliances and that is what Ederick Limited represents absolute peace of mind! www.ederickltd.com

188 | BE Mining


Perseus Mining

A bar of gold being weighed

of the fully permitted and funded Sissingué project, the Ivorian government started to talk about a super profits tax. While not denying their need to benefit from their resources, developing governments sometimes overlook the need of overseas investors to see a fair

return. So Perseus along with the rest of the world’s mining community is waiting to see what the awaited mining code will contain. However Sissingué is projected to yield 170,000 ounces of gold a year, at low cost. Adding this project to Edikan would firmly establish Perseus among the

“Adding thE Sissingué project to Edikan would firmly establish Perseus among the leading West African gold producers” BE Mining | 189


Gold Room Operator cleans slag residue from a bar of gold


Perseus Mining leading West African gold producers. And there has been positive news since we last looked at Sissingué. Quartermaine is keen to proceed with building the $160 million (fully funded) mine this year with a view to starting production in the second half of 2014, gold prices notwithstanding – he says the price would have to fall many hundreds of dollars below current levels to cause problems to Perseus. Meanwhile the company has been actively pressing forward with other drilling prospects that it hopes will sustain production in West Africa well beyond the 20 year mine life of Edikan. It has just announced encouraging results from recent exploration in Côte d’Ivoire. Its Mbengué tenement is close to the country’s largest known gold deposit and significant mineralisation has been discovered there. Additionally early drilling at Bélé has been highly encouraging, he says: “Exploration of both Kanadi [on the Mbengué permit] and Bélé will be followed up as a matter of priority by our exploration team, as both tenements are located within trucking distance of the proposed Sissingué Gold Mine plant site. While it is still early days at both Mbengué and Mahalé these drill results appear to be very material, and if the prospects can be advanced with further drilling, it could create significant value for our shareholders.” For more information about Perseus Mining visit: www.perseusmining.com

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company in brief Perseus Mining Limited (ASX/TSX Code: PRU) has forged a reputation as one of the world’s most successful gold explorers. Focused on under-explored gold belts in West Africa, we achieved our goal to become a producer during 2011 and started commercial production on 1 January 2012. Our Edikan Gold Mine (EGM), formerly referred to as the Central Ashanti Gold Project (CAGP) and Ayanfuri, has 5.6Moz of Measured and Indicated gold resources, including reserves of 3.4 million ounces of gold, and 1.7Moz Inferred gold resources. A further 1.4Moz of Indicated gold resources, including 0.66Moz of Reserves, and 0.52Moz of Inferred gold resources are held on our other

West African projects (Grumesa and Tengrela). We started production from the Edikan Gold Mine in Ghana in the 3rd Quarter of 2011. If proven economic by the current feasibility study, the Company is targeting production at the Sissingue Gold Project in Cote D’Ivoire in 2014.

MANAGEMENT AND DIRECTORS Jeffrey A. Quartermaine

Susmit Mohanlal Shah

Chief Executive Officer, Managing Director, Executive Director

Company Secretary

Jon Yelland Chief Operating Officer

Independent Non-Executive Chairman of the Board

Rhett Boudewyn Brans

Michael Andrew Bohm

Executive Director

Independent Non-Executive Director

Colin John Carson CPA

Neil Christian Fearis

Executive Director

Independent Non-Executive Director

Kevin Peter Thomson

Terence Sean Harvey

Exploration Manager

Independent Non-Executive Director

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Reginald Norman Gillard


perseus mining stock watch

Office Corporate Office Level 2, 437 Roberts Road Subiaco, Western Australia 6008 Australia Tel: +61 8 6144 1700 Fax: +61 8 6144 1799 Email: info@perseusmining.com

Exchange ASX

Shares 457.96M

Symbol PRU

Market Cap. 258.75M

Currency AUD

Div/yield -

Investment highlights • Available cash at 31 March 2013 was $38.4M plus bullion holdings on site and at refinery totalled 16,237oz valued at a further $25.1M – slight increase over previous Quarter •A further $9.1M cash on deposit for environmental commitments • Undrawn line of credit with a limit of US$100M with term to December 2015 •A ssociated hedge commitment reduced to 193,000oz at average of US$1,389/oz including 70,000oz for delivery in 2015 at US$1,600/oz

www.perseusmining.com

products • Gold

operating territories • Ghana • Ivory Coast

Key stats and ratios Q1 (Mar ‘13) Net profit margin -1.16% Operating margin 0.71% EBITD margin - Return on average assets -0.69% Return on average equity -1.08%

2012 33.60% 38.57% 46.89% 11.51% 16.28%

Financial information from Google Finance and Thomson Reuters

be mining | 193


A gold producer

delivering gro

A growing portfolio of gold assets in West Africa, with th mines, a fourth nearing completion and promising devel

written by: John O’Hanlon | research by: Adam Kalynu

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Endeavour Mining

owth

hree producing lopment projects

uk

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Underground mining at Endeavour’s Tabakoto Gold Mine


Endeavour Mining

E

very person involved in gold open pit operation that employs contractor mining or trading must have mining and is located 280 kilometres to been shaken when the gold price the south east of Ouagadougou in Burkina slumped in mid April, so it’s Faso. It is 90 percent owned by Endeavour, reassuring to hear that one well- with the remaining 10 percent held by respected investor, the Canadian financier, the Burkina Faso government. Grid power Frank Giustra, said recently that he has is delivered to site from Ghana via a 21 complete faith in the continuation of the bull kilometre transmission line. Earlier this run. When it comes to investment Giustra has year Endeavour completed a preliminary been so right for so long that it’s encouraging economic assessment on the Ouaré deposit to know he is on Endeavour Mining’s Strategic 40 kilometres to the north east to explore Advisory Board. the economics of trucking the Ouaré Endeavour Mining was founded in 2008 material to the Youga plant, in the process by Neil Woodyer, who until then had adding three years to the current six year been a partner with Frank projected life of the mine. In late 2011, following Giustra in the merchant a merger with Perth bank Endeavour Financial. When cold winds started to based Adamus Resources, blow through the financial Endeavour added the Nzema mine, an open pit project markets and the world’s great currency blocs all went located in south western into meltdown gold started Ghana, just a couple of Endeavour’s 2013 to look even more attractive hundred kilometres from capital programme to investors. Why not the capital Accra, which is actually build a gold mining where Endeavour has chosen company, Woodyer asked himself – so he to establish its operational headquarters. did just that, acquiring a series of highly The Accra office is the base for the productive or prospective assets in West company’s COO Attie Roux and all HR, Africa, all of them in financial difficulty. finance, exploration, purchasing and other The initial acquisition search in 2009 key management functions. The company brought in the Youga gold mine when holds a 90 percent interest at Nzema, with Endeavour took control of a financially the remainder being in the hands of the struggling Canadian company, Etruscan Ghana government. In 2012 Nzema yielded Resources, buying the remaining shares the nearly 110,000 ounces of gold from ore following year. By the end of 2011 Youga processed through a conventional gravity was producing over 87,000 ounces of gold a carbon-in-leach (CIL) gold plant with a year. In 2012 that figure rose to over 91,000 semi-autogenous grinding (SAG) mill, a ounces. Youga is a hard rock, drill and blast gravity circuit, and two counter current

$180

million

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decant thickeners for water and cyanide recovery. The mill has a design capacity of 2.1 million tonnes per annum. In October 2012, Woodyer spotted another opportunity, this time in Mali, and acquired the assets of another distressed gold mining company, Avion Gold, for $389 million. An observer might think it risky to engage in a country which has so recently been in the news for all the wrong reasons. It’s true that Avion had been hurt by the political uncertainty, in particular the contractor building an expansion of the Tabakoto mill withdrawing following a Canadian government advisory notice. However Tabakoto is only 18 kilometres from the border with Senegal and some 1,000 kilometres away from the problem area in Northern Mali, and thus the mine’s production was not affected by the coup or its aftermath. Tabakoto is 80 percent owned by Endeavour, 20 percent by the government of Mali, and its current open pit and single underground mine produced over 110,000 ounces of gold in 2012. A doubling of the mill capacity at Tabakoto from 2,000 tonnes per day (tpd) to 4,000 has just been achieved, in anticipation of the completion of a second underground mine at Segala, just five kilometres away. This part of Mali could

be very important for Endeavour over the coming decade – another nearby 470 square kilometre property at Kofi 40 kilometres to the north of Tabakoto contains resources estimated at 1.2 million ounces. So Endeavour is definitely a company

“Agbaou should, together with the recently completed Tabakoto mill expansion, raise our annual gold production to 450,000 in 2014” 198 | BE Mining


Endeavour Mining

Tabakoto Gold Mine mill expansion is ramping up

that has moved fast thus far. It has three producing mines in three different countries. “We are going though a phase of considerable growth,” says Woodyer. “We put together our three mines over the last three or four years by acquisition. We had to digest those acquisitions, sort them out financially because they were all troubled companies that we took over and then address some of their associated management problems.” As an example, he says Tabakoto was producing its gold alright, but at an unsustainably high cost – around $1,250 an ounce. It was

over-staffed with around 1,900 people. In six months headcount has come down by 450, and in the last quarter its cost of production was cut to $932 an ounce. The mill expansion has already been completed and production is being ramped up to around 150,000 ounces a year. And Endeavour’s impetus is far from spent. Next year will see the start of production at its most advanced development project, a fourth mine in a fourth West African country – Côte d’Ivoire. Agbaou is one of the largest undeveloped gold resources in that country and has significant upside

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potential that was targeted through a $6 million exploration programme in 2012. Construction of the mine started in 2012, using the same team that developed Nzema, including the Australian EPCM company Lycopodium. “Agbaou should produce just below 100,000 ounces next year at relatively low cost, so it should bring our average cost base down and at the same time, together with the recently completed Tabakoto mill expansion, raise our annual gold production from around 330,000 ounces currently to 450,000 in 2014, with very positive cash generation as well,” says Woodyer.

The distribution of the projects makes a lot of sense. If there are problems at one mine, the others are there to fall back on and thus Endeavour is protected from the troubles that affected the single-mine companies it took over. Neil Woodyer’s long and extensive involvement in the market means that financial risk is minimised. Endeavour’s experienced mine operators and mine builders ensure that operational risk is well-managed. As former CEO of Lloyds International Trading before running his own merchant bank he is uniquely qualified to steer a gold production company

Youga Gold Mine: primary crusher and crushed ore stockpile

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Endeavour Mining

“We are in a good position now to meet our target of 330,000 ounces this year and 450,000 next!” at a time when gold futures are anyone’s guess. “We have a $200 million credit facility that we have to start paying back in about 18 months. I am in the process of trying to increase that facility and extend it to give us more flexibility,” he explains.

“We may want to spend some capital on our existing operations and fine tune them to get better economic value out of them. I am making sure we have the financial flexibility to optimise the return without having to dilute the shareholding.” Until things get a bit more predictable, Endeavour has throttled back its exploration drilling while keeping the core drilling going that will extend existing operations. Operationally, synergies have been pursued and a raft of best practices, from common purchasing to pooling of resources introduced. For example excess inventory of chemicals like cyanide at Nzema will be sent to Côte d’Ivoire so that Agbaou will have less to buy when it starts up. Agbaou is a $160 million project and is progressing remarkably well, he says, though cautiously. The mine is already 75 percent complete, and long lead-time items are on their way in plenty of time for the projected start of gold production in the first quarter of 2014 thanks to Lycopodium as the EPCM contractor and the in-house team: “It is really impressive the speed and skill that this team has delivered – we are in a good position now to meet our target of 330,000 ounces this year and 450,000 next!” It was an inspiration to run the operations

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Tabakoto Gold Mine: Segala portal for second underground mine (under development)


Endeavour Mining

4,000 tpd Upgraded capacity of Tabakoto mill from Accra. Ghana is the most stable and settled mining country in West Africa, but that means that an individual incoming investor can’t have that much influence on government policy. Côte d’Ivoire is at the other extreme, he thinks, a country hungry for mining development and in which Endeavour is seen as a major investor whereas Burkina Faso is the ideal West Africa economy for a new mining project, with well developed mining laws and an economic framework that encourages foreign investment. There’s no denying these are anxious times for gold producers, unlike a year ago. Endeavour is committed to a large capital programme this year – something like $180 million – but he is convinced the entire gold sector is undervalued, and with it the market value of gold producers. If Neil Woodyer and Frank Giustra are right then Endeavour stands to reap great rewards. Meanwhile it can only do the next right thing: “If we can optimise our three mines and build and commission the Agbaou mine we can end the year with the financial stability we need - and I have a great team to help me do that.” For more information about Endeavour Mining visit: www.endeavourmining.com

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company in brief Endeavour Mining Corporation (Endeavour) is a junior gold producer. Endeavour owns the Youga Gold Mine in Burkina Faso and the Nzema Gold Mine in Ghana and a pipeline of development and exploration projects in West Africa. The Nzema Gold Mine is comprised of four mining licenses. Endeavour holds a 90% interest in Burkina Mining Company SA (BMC), which in turn holds the Youga Gold Mine mining permit. It owns the Agbaou feasibility stage project, an undeveloped gold deposit in Cote d’Ivoire, and has a 40% interest in the feasibility stage Finkolo Gold Joint

Venture in Mali (Finkolo). The Company also has a 38.5% interest in Namibia Rare Earths Inc. (NREI), which has the Lofdal Rare Earth Project. In April 2013, the Company sold its entire 38.5% shareholding in Namibia Rare Earths Inc.

MANAGEMENT AND DIRECTORS Michael Ernest Beckett

David Laing

Non-Executive Independent Chairman of the Board

Executive Vice President Technical Services

Neil Woodyer

Morgan Carrol

President, Chief Executive Officer, Executive Director

Senior Vice President - Corporate Finance, General Counsel, Secretary

Christian Milau CPA

Ian Henderson

Chief Financial Officer, Executive Vice President

Independent Director

Adriaan Roux

Non-Executive Independent Director

Chief Operating Officer

Douglas Bowlby Executive Vice President Corporate Development

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Jorge L. Gamarci Antony Harwood Ph.D. Non-Executive Independent Director


Endeavour Mining stock watch

Office Corporate Office Regatta Office Park Windward 3, Suite 240, PO Box 1793 West Bay Road, Grand Cayman KY1-1109 Cayman Islands Tel: +1 (345) 769 7250 Fax: +1 (345) 769 7256

Exchange TSE

Shares 412.49M

Symbol EDV

Market Cap. 263.99M

Currency CAD

Div/yield -

financial overview Endeavour is a growing and diversified, midtier West African gold producer. Endeavour is focusing on maximizing shareholder value from its diversified portfolio of assets with an emphasis on maximizing cash flows through operating efficiencies and cost savings. On October 18, 2012 Endeavour acquired Avion Gold Corporation (“Avion”), which owned the Tabakoto Gold Mine in Mali, (“Tabakoto” or the “Tabakoto Gold Mine”). As a result, Endeavour’s comparative financial results for the three months ended March 31, 2012 do not include the operating results from Tabakoto.

www.endeavourmining.com

products • Gold

GOLD OPERATIONS • Mali • Ghana

• Burkina Faso

Key stats and ratios Q1 (Mar ‘13) 2012 Net profit margin 15.08% -2.47% Operating margin 9.24% 14.26% EBITD margin - 39.37% Return on average assets 3.80% -0.63% Return on average equity 5.66% -1.82%

Financial information from Google Finance and Thomson Reuters

BE Mining | 205


The precious of the Americ Goldcorp has grown from a mid-sized gold company to the world’s number one gold producer by market capitalisation through a broad-based strategy: its Mexican operations provide an ever-growing pipeline of gold, silver and other metals to keep it there

written by: John O’Hanlon research by: Robert Hodgson

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Goldcorp Mexico

heart cas

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A

s one of the world’s fastest Goldcorp is a Canadian company grow ing senior gold headquartered in Vancouver, British Columbia. producers, with operations It employs more than 16,000 people globally, and development projects and in Mexico provides employment, directly located in some of the safest or indirectly, for well over 5,000 people. and most stable countries in the Americas Mexico is a natural fit for the company’s Goldcorp is riding on the crest of a wave. Its strategy of sticking to low risk jurisdictions. operating assets include five mines in Canada It has been the world’s major source of silver and the USA, three in Mexico, and three metal since its invasion by the Spanish in the across Central and South America, namely the 15th century, well ahead of its nearest rivals Marlin mine in Guatemala, Alumbrera in the China and Peru, so mining is an industry Argentine, and its newest and largest project that is well understood. It has plenty of gold too, ranking 11th in the world. And today’s Pueblo Viejo in the Dominican Republic. Goldcorp has the critical mass and enough Mexico is among the countries in the world reserves to cope with the with the lowest political current vagaries of the gold and social risk, despite its price. At a time when many well publicised drug wars, a other companies are feeling factor that makes Goldcorp the pinch it has been able to attractive to investors even at focus on financial discipline, a time of uncertainty in the Expected increase in gold to continue to fund growth metal markets. production this year projects while cutting back for Goldcorp first came into the time being on exploration, Mexico in 2005 when it to defer capital projects where necessary, and merged with Silver Wheaton and acquired El to reconfigure higher cost mines. Sauzal, a low cost mine located near the town This far sighted contingency planning has of Urique in Chihuahua state in the western enabled it to keep its position as the only part of Mexico’s Sierra Madre mountain North American senior to deliver year on range. El Sauzal has been producing since year growth and to deliver strong results 2003 since when it has yielded more than 1.5 in a challenging market: in 2012 Goldcorp million ounces, however it is now reaching the produced 2,396,200 ounces of gold, only end of its life and Goldcorp is preparing the a little down on the 2011 figure. However community there for life after mining. There’s this year it expects to at least equal its 2011 a chance that more gold can be extracted yet. production level of 2,514,700 ounces, with Exploration efforts are focused on identifying aggressive growth forecast in the five-year new gold reserves to extend the mine life period. By 2017, if it can stay on track it beyond 2014. The Trini pit is expected to should be producing in excess of four million provide more than 218,000 ounces of gold in two phases. The environmental permit for the ounces of gold annually.

10%

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Goldcorp Mexico


Thank you for your business Thank you for your business

Much has changed since 1873, but this has remained constant: Atlas Copco is committed to developing leading – edge technology and taking care of Much has changed since 1873, but this has remained constant: Atlas Copco customers. The best way to celebrate 140 years is to acknowledge the is committed to developing leading – edge technology and taking care of customers that made it possible. Thank you for your loyalty and trust. ¡Gracias! customers. The best way to celebrate 140 years is to acknowledge the customers that made it possible. Thank you for your loyalty and trust. ¡Gracias! www.atlascopco.com.mx www.atlascopco.com.mx

Gracias por sus negocios

Atlas Copco debe su historia de éxitos a todos nuestros clientes que, en más de 170 países, nos han desafiado e inspirado para que innovemos y mejoremos nuestros productos y servicios, año tras año. Nos gustaría agradecerles su lealtad y confianza, así como su cooperación. Ustedes pueden confiar en que su equipo local de Atlas Copco seguirá haciendo todo lo que podamos para asegurar su productividad sustentable. Durante los próximos 140 años, por lo menos. Es una promesa.


Goldcorp Mexico first stage of stripping has been issued, and exploration for In 2013 Atlas Copco, ranked as one of the most innovative, potential reserves continues sustainable and ethical companies in the world, celebrates in the surrounding areas. 140 years of profitable growth. At the beginning the Going forward, El Sauzal company made products for railways, but the core of Atlas will continue to work on a Copco’s business dates back to the early years of the 20th sustainable development century when the first compressors, tools and rock drills were manufactured. Today, the Atlas Copco Group has strategy that benefits world-leading positions in these areas and many others. surrounding communities, Atlas Copco supports customers in 180 countries with own such as hydroponic crops, operations in 90 countries. In México, with 60 years of which additionally will help history, Atlas Copco proudly contributes with Mexican the to reduce water consumption mining industry. in the arid climate of the www.atlascopco.com.mx region. A Train-for-the-Work strategy will help people to get free training in high-demand skills, such as welding and mechanics. The company’s second mine in Mexico is Los Filos, 1,700 metres up in the mountainous terrain of central Guerrero state near the town of Mezcala. It is one of the largest open pit mines in the country as well as an underground mine, with common heap leaching, wet plant and ancillary facilities. Commercial production for Los Filos open pit operation commenced on January 1, 2008, and since 2009, Los Filos has been Mexico’s largest gold producer. Operations started in 2007, after Goldcorp had developed the

atlas copco

400,000 Ounces of projected gold production at Peñasquito mine in 2013 Goldcorp in the community of Peñasquito

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project from the single Los Filos pit to a twopit mine when Goldcorp acquired the El Bermejal deposit in early 2005—well after having the design and development plans ready for the single Los Filos pit. 2012 gold production at Los Filos was a little up on the previous year, at 340,400 ounces, and new exploration continues to support the potential for significant new reserves in the current open-pit and

underground operations as well as in the new 4P project located on a ridge to the west of the Los Filos pit. The plan is to develop an open pit mine that will be integrated into existing operations as well as testing further potential underground. The underground mine in operation is a supplementary source of production at Los Filos, so there’s considerable upside potential at this site, with recent exploration

“Peñasquito is a great mine that is already generating outstanding financial returns and whose strongest years lie ahead”

Drilling at Peñasquito

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Goldcorp Mexico

Peñasquito worker and haul truck

showing that both Los Filos and El Bermejal pits could be extended. “Los Filos, remains a reliable producer, and we are testing the potential for further expansion of its production rate,” says Goldcorp’s President and CEO Chuck Jeannes. However the jewel in Goldcorp’s crown, at least as far as Mexico is concerned, is the Peñasquito mine, which achieved commercial production in 2010. This a true polymetallic resource, which in addition to producing up to 400,000 ounces of gold in 2013 is expected to yield between 208 and 305 million pounds of zinc, between 145 and 160 million pounds of lead and over 20 million ounces of silver. The Peñasquito mine is in fact the fifth largest silver mine in the world and the second largest in Mexico. Jeannes’

assessment: “Peñasquito is a great mine that is already generating outstanding financial returns and whose strongest years lie ahead.” His confidence is not surprising. Set in a flat valley high in the Central Plateau, in north-eastern corner of the State of Zacatecas Peñasquito promises to become Mexico’s largest open pit mine, consisting of two open pits, Peñasco and Chile Colorado. Additionally, exploration has already shown that later in the mine life, which is pegged currently at 22 years, there could be significant reserves below the current pits. Peñasquito provides jobs for nearly 2,700 people, and to serve the mine Goldcorp has helped to set up a technical college where the mechanical and electrical technicians of the future are trained. With the high degree of mechanisation

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Pe単asquito site overview


Goldcorp Mexico that mines have adopted the barriers to women working alongside men are rapidly disappearing and Goldcorp’s female employees receive exactly the same benefits as their male colleagues. The company’s responsible mining policies have not gone unnoticed in Mexico. Last year the Mexican Centre for Philanthropy and the Alliance for Corporate Responsibility (CEMEFI) recognised Goldcorp Mexico for the fifth consecutive year, noting it for excellence in Ethical Conduct, Environmental Stewardship & Community Engagement. Additionally, for the second consecutive year the Mexican Mining Chamber gave the Los Filos mine its annual safety award in recognition of its excellent safety record. “We enter 2013 with a spirit of excitement and optimism,” said Jeannes as he predicted a ten percent rise in gold production to between 2.5 and 2.8 million ounces this year, rising to more than four million ounces by 2017. To achieve its goals, he added, Goldcorp remains focused on five key attributes: growth; low cash costs; maintaining a strong balance sheet; operating in regions with low political risk; and conducting business in a responsible manner. Even if the recent hiccoughs in the gold market prove, as many believe, to be a temporary phenomenon the Canadian senior remains a dominating player in the market, with enough mineral diversification to see it through. For more information about Goldcorp Mexico visit: www.goldcorp.com

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company in brief Goldcorp Inc. (Goldcorp) is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico and Central and South America. As of December 31, 2011, its producing mining properties were consisted of the Red Lake, Porcupine and Musselwhite gold mines in Canada; the Penasquito gold/silver/lead/zinc mine, Los Filos and El Sauzal gold mines in Mexico; the Marlin gold/silver mine in Guatemala; the Alumbrera gold/copper mine (37.5% interest) in Argentina; the Marigold (66.7% interest) and Wharf gold

mines in the United States. As of December 31, 2011, its development projects included the Cerro Negro gold project in Argentina; the Eleonore and Cochenour gold projects in Canada; the Pueblo Viejo gold project (40% interest) in the Dominican Republic; the El Morro gold/copper project in Chile; the Noche Buena and Camino Rojo gold/silver projects in Mexico, and the Cerro Blanco gold/silver project in Guatemala.

MANAGEMENT AND DIRECTORS Ian W. Telfer

Charlene A. Ripley

Chairman of the Board

Executive Vice President, General Counsel

Charles A. Jeannes

Russell D. Ball

President, Chief Executive Officer, Director

Executive Vice President Capital Management

Douglas M. Holtby Independent Vice Chairman of the Board, Lead Director

Lindsay A. Hall Chief Financial Officer, Executive Vice President

George R. Burns Chief Operating Officer, Executive Vice President

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David L. Deisley Executive Vice President - Corporate Affairs

Timo S. Jauristo Executive Vice President Corporate Development

Colette Rustad Senior Vice President, Corporate Controller


goldcorp stock watch

Office Mexico City Office Paseo de las palmas 425-15 Lomas de Chapultepec 11000 Mexico, D. F. Tel: 52 (55) 5201 9600 Email: info@goldcorp.com

Exchange NYSE

Shares 812.09M

Symbol GG

Market Cap. 21,861.49M

Currency USD

Div/yield 0.05/2.23

financial highlights Gold production Production totaled 2,396,200 ounces for 2012, compared to 2,514,700 ounces in 2011. Shareholder earnings Net earnings attributable to shareholders of Goldcorp totaled $1,749 million ($2.16 per share) for 2012, compared to $1,881 million ($2.34 per share) in 2011. Adjusted net earnings amounted to $1,642 million ($2.03 per share) for 2012, compared to $1,786 million ($2.22 per share) in 2011.

www.goldcrop.com

products • Gold

operating territories • Canada • United States

• Mexico • South America

Key stats and ratios Q2 (Jun ‘13) 2012 Net profit margin -217.55% 32.18% Operating margin -274.13% 38.62% EBITD margin - 52.36% Return on average assets -24.76% 5.77% Return on average equity -35.49% 7.95%

Financial information from Google Finance and Thomson Reuters

BE Mining | 217



Mwana Africa

Daring to discover the DRC Mwana Africa is a diversified, AIM-listed mining company with an exciting and diverse portfolio of exploration and production projects spread across a number of African countries: in the coming year it hopes to establish its major zinc assets onto the global map

written by: John O’Hanlon research by: Jeff Abbott

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M

wana Africa was founded by Kalaa Mpinga, a citizen of the DRC, a former senior executive of Bechtel, and a director of Anglo American before launching Mwana Africa Holdings in 2003. Two years later he and a group of partners across Africa were in a position to float Mwana Africa PLC on the prestigious AIM market of the London Stock Exchange. The company brought together three major acquisitions that positioned it from the start as a diverse player on the African mining scene. These were the Bindura Nickel Corporation (BNC) in Zimbabwe, the Anmercosa base metal exploration project in DRC and the Freda Rebecca gold mine, again in Zimbabwe. Today its portfolio includes assets in Angola, Botswana and South Africa as well as the DRC and Zimbabwe It’s a very sound collection of assets, with massive potential in a number of key minerals over the coming decade. However the years that intervened between its establishment and the present have presented their fair share of challenges, Zimbabwe in particular has not been an easy place to work in, and the Bindura nickel complex had to be placed on ‘care and maintenance’ in 2009, thanks to a slump in world nickel prices, added to that country’s fiscal problems and hyperinflation. Having operated continuously for more than 17 years the Freda Rebecca Gold Mine (FRGM) went through a similar process in March 2007 and for similar reasons, though in this case it provided more of a planned opportunity to refurbish the mine and re-provide it with a better fleet of trucks and

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Mwana Africa

other equipment. Operations were restarted before the end of that year, in the wake of the ‘dollarisation’ of the economy, providing much needed cash flow to enable Mwana Africa to pursue its other plans: its first gold was poured on October 13 that year, and production ramped up to the Phase 1 output target of 30,000 ounces of gold per year. So during the financial year that ended on 31 March 2011 the mine produced

27,240 ounces of gold, with 3,574 ounces produced in March alone. The second phase included refurbishment of the second mill and expansion of the leach circuit. In June 2011, Mwana Africa announced that the Phase 2 construction programme was completed with Mill 2 being successfully commissioned on time and within budget. Production for the financial year to 31 March 2012 was 47,770 ounces of gold, within a

“It’s a very sound collection of assets, with massive potential in a number of key minerals over the coming decade” BE Mining | 221


NEW PRECIOUS RESOURCE DISCOVERED

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Mwana Africa whisper of the extended target of 50,000 ounces. Acol Chemical Holdings (Pvt) Ltd supplies liquid sodium The gold mine and the cyanide to the Gold Mines of Zimbabwe on behalf of Sasol nickel project are both located Polymers a division of Sasol Chemical Industries Limited. in the same part of Zimbabwe, Acol Chemical embarked on a project with Mwana Africa’s around 90 kilometres to the Freda Rebecca Mine in November 2010 to convert the mine north-east of Harare towards from using solid sodium cyanide 99% briquettes to liquid sodium cyanide. the Mozambique border. The Freda Rebecca’s first 30 000 liters of liquid sodium cyanide exploration, development was delivered on 6th April 2011. and production history for The mine experienced immediate operational benefits as a gold in the Bindura area goes direct result from changing to liquid sodium cyanide. back to 1912. The Freda and Acol Chemical now supplies liquid sodium cyanide to the Rebecca gold deposits were majority of the larger gold mines in the country who are all however not discovered until reporting general improvements in operations as a direct result of using liquid. 1987 by the legendary Algy acolhre@acolchem.co.zw Cluff, whose company Cluff Resources established two open pits, removing oxides at Freda and sulphides at Rebecca. The first gold pour took place in 1988. Ashanti Goldfields Zimbabwe acquired the mine in 1996 and underground operations commenced at the Rebecca section in the same year: by 1998, the Freda pit had been depleted and the Freda Rebecca Mine became a fully underground operation. Today Freda Rebecca is providing Mwana Africa with solid cash flow to cover its overheads as well as helping it develop new projects. “We remain confident that Freda Rebecca will continue to be a robust provider of cash flow and revenue,” Mpinga says, “and we are now focussed on expanding production further and introducing operating efficiencies. These will have the effect of further increasing production levels beyond 50,000 ounces per annum while simultaneously reducing operating costs.” However the biggest mining opportunities

Acol Chemical Holdings (Pvt) Ltd

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cannot be realised without the support of all stakeholders, including shareholders, government, the local community and offtakers. Just as Freda Rebecca is the largest gold mine in Zimbabwe and an important contributor to the country’s economy, so the Bindura nickel complex could put that country on the map as a nickel producer of. Mwana Africa’s majority owned subsidiary BNC owns and operates the Shangani and Trojan

nickel mines, which each has a hoisting and treatment capacity of around a million tonnes a year. “Bindura Nickel is a very unique asset in that it is the only fully integrated nickel complex in Africa,” says Kalaa Mpinga. It comprises a series of mines, a smelter and a refinery, holding among other assets the Bindura Smelter and Refinery complex which produces high quality nickel cathodes, copper sulphide and cobalt hydroxide.

“Bindura Nickel is a very unique asset in that it is the only fully integrated nickel complex in Africa”

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Mwana Africa

Alongside material from the Trojan and Shangani mines, the plant has in the past toll treated nickel concentrates and nickel matte from third parties to utilise spare capacity, however following promising results from drilling programmes completed last year it may have less spare capacity once the mines are reopened. In February Mwana Africa announced a massive 152 percent increase in the JORC compliant nickel resource at the Trojan mine. The total nickel resource within this deposit is now 114,952 tonnes compared to the 45,600 tonnes previously known about. There could be much more: drilling confirmed that the ore body is open at depth. Operating conditions have improved, and now that the Zimbabwe economy is starting to grow towards its true potential Mpinga

is very keen to restart the BNC assets in a phased manner. The first phase would be to restart the Trojan mine and to sell nickel in the form of concentrate. BNC announced in February 2011 that it had signed an offtake agreement with Glencore International who will purchase the concentrate produced, and when in September 2012 the company formed a strategic partnership with China International Mining Group Corporation (CIMGC), the principal goal was to restart operations at Bindura, using part of the $35 million raised. “We believe this will allow us to open up the rest of the assets,” says Mpinga, “in particular the Hunters Road project which is one of the biggest open cast nickel deposits today, with access to infrastructure.” He is equally excited about the prospects

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“Zani-Kodo is a large and highly prospective project situated in what is fast becoming a gold province of major world significance” for Mwana Africa in developing the group’s major exploration focus, the Zani-Kodo gold project in the Democratic Republic of Congo “Zani-Kodo is a large and highly prospective project situated in what is fast becoming a gold province of major world significance,” he says. A major drilling campaign last year totalling more than 18 kilometres increased the resource by 41 percent to 2.01 million ounces. “With a comprehensive ongoing

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work programme being progressed, we are confident that the project’s JORC resource can be further increased, thereby demonstrating its enormous potential.” Mwana Africa holds 80 percent in the Kilo Moto Joint Venture with Office des Mines d’Or de Kilomoto (Okimo), under the terms of an agreement signed in June 2005, and Mpinga is understandably upbeat about the potential of his native country. “Until last


Mwana Africa

year the DRC did not figure on the list of gold producers,” says Mpinga. “I think the Ituri district is going to be the next frontier.” Ituri, in the north east of DRC, has attracted the attentions of major companies such as AngloGold Ashanti and in the coming three years he expects to see around 800,000 ounces of gold coming from its mines. The infrastructure that will follow will make it less expensive and less risky to develop a mine there, and he would like to see Mwana Africa coming in with gold production in 2015, in the wake of two large projects hoping to start producing in the near future, namely AngloGold and Randgold’s Kibali project and the Mongbwalu mine, under construction by AngloGold on its own. With more promising base metals projects in

the DRC, Mwana Africa promises to soon reach an enviable position as a highly diversified producer underpinned by substantial gold assets. Diversified geographically as well as in terms of the minerals it sells. The DRC may well be considered a high risk area, racked by conflict but nobody knows it better than Kalaa Mpinga, who points out that mining in the Ituri region has gone ahead without incident since 1999 and the Zani-Kodo project is 400 kilometres from current trouble spots. “In that terrain, you may as well be in another continent!” he declares. For more information about Mwana Africa visit: www.mwanaafrica.com

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company in brief Mwana Africa PLC (Mwana Africa) is engaged in the exploration, development and production of nickel, gold, copper and diamonds. The Company operates in four segments: Gold, Nickel, Diamonds and Exploration. Gold segment is engaged in gold mining and prospecting activities. Nickel is engaged in nickel mining, smelting and refining activities on care and maintenance. Diamonds is engaged in diamond mining activities on care and maintenance. Exploration is engaged in gold and base metal exploration activities. The Company’s Bindura Nickel Corporation situated near the town of Bindura, 90 kilometers north-east of

Harare, BNC is Africa’s integrated nickel mine, smelter and refinery operation. The Company holds a 100% interest in SEMHKAT which has exploration concessions covering 4,845 square kilometers in the south-east of the Democratic Republic of Congo.

MANAGEMENT AND DIRECTORS Kalaa K. Mpinga

John A. Anderson

Chief Executive Officer, Executive Director

Non-Executive Director

Donald Alexander Robert McAlister

Johan Louis Botha

Finance Director, Executive Director

Non-Executive Director

B. P. Tuck

Etienne Denis Ph.D.

Company Secretary

Non-Executive Director

Oliver A. G. Baring

Yuan Ching Hu

Non-Executive Chairman of the Board

Non-Executive Director

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mwana africa stock watch

Office 3rd Floor, 43 Palace Street LONDON, ENG SW1E 5HL United Kingdom Tel: +44-20-76545580 Fax: +44-20-76545581 www.mwanaafrica.com

Exchange LON

Shares 1,117.06M

Symbol mwa

Market Cap. 13.40M

Currency gbx

Div/yield -

products • Gold • Nickel

• Diamonds

operating territories financial highlights •G roup revenues up 34% to $109.2m (2012: $81.3m) •G roup loss of $43.5m (2012: loss of $6.7m), after a $43.7m impairment charge on BNC •G roup profit before impairment of $0.5m (2012: loss of $6.4m) • Exploration spend of $15.3m (2012: $10.2m) •S hare placement in April 2012 raised approximately $32.4m net of expenses

• Zimbabwe • South Africa • Angola

• Democratic Republic of Congo • Bostwana

Key stats and ratios Q3 (Sep ‘12) 2012 Net profit margin 6.53% -8.25% Operating margin 18.10% 0.01% EBITD margin - 5.55% Return on average assets 4.41% -4.40% Return on average equity 15.94% -0.93%

Financial information from Google Finance and Thomson Reuters

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THE POWER TO DELIVER ON TIME ANYWHERE IN THE WORLD

Dedicated to customers worldwide, H-Logistics is a cutting edge global procurement company delivering a premium service supplying the mining, engineering and construction industries

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roviding procurement, order consolidation, government inspection and warehousing for air/ sea freights and urgent courier consignments, H-Logistics’ clients can access our trusted and growing network of quality suppliers

“ Integrity, efficiency and detail at the core of everything we do”

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and consultants worldwide. With partners including Caterpillar, Hitachi, Komatsu and Liebherr to name a few, H-Logistics offers an inexhaustible range of premium brands, including PPE, 4x4 Vehicles, Tyres & Mining Consumables which can stand up to the rigours of these


H Logistics

demanding industries often operating in remote locations. High volumes, low overheads and excellent trading terms with our partners keeps our pricing competitive. When machines are down every second counts, time is money,

H-Logistics minimise interruptions to our clients critical supply chain. Integrity and efficiency coupled with low overheads sets us apart from the crowd. Trust H-Logistics, we have the power to deliver on time anywhere in the world.

H Logistics Limited Caldwellside Industrial Estate, 5 Young Road, Lanark, Scotland ML11 7SR T +44(0)1555 665560 www.hlogistics.co.uk

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ground breaking technology MineRP has an international presence with nine offices on five continents around the world

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e take pride in the fact that we employ only the best people from both the mining as well as software industries. As such, we have grown a reputation for expertise in the development of ground breaking technology and being astute advisors and partners when it comes to professional mining consulting. MineRP was founded in 1997 as

“ Having good information is no use unless that information is available and accurate - anywhere, anytime.” 232 | be directory

Graphic Mining Solutions International (GMSI). Our can-do attitude and unique service approach has solidified our standing as the global mining technical solutions provider of choice to large internationals and junior mining companies alike. Expert and Enterprise Mining Solutions On the software front, MineRP has a stated objective to support our clients across the total mining value chain (MVC) – from discovery to rehabilitation. We do this through: • Expert solutions that deliver niche functionality to specific disciplines across the MVC (such as mine planning and design solutions, CAD solutions, survey solutions etc.), and • E nterprise solutions enabling seamless integration of our own


minerp

expert tools, as well as those of other vendors of mining technical solutions. This dual approach to expert and enterprise solutions allows us to focus on building top mining solutions for the miner, while still adhering to best practice when it comes to the integration and collaboration of these expert mining tools with one another.

MineRP South Africa Head Office: Centurion Ground Floor, 267 West Street, Centurion PO Box 9157, Centurion, 0046 T +27 87 980 3100 www.minerpsolutions.com

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supplying mines

Muchina Engineering started out as a supplier to two mines in Zambia mainly supplying pumps mechanical seals and gaskets

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ver the years we have learnt how the mines work and understand all their special needs. This has allowed us to branch out in to various projects. And we now supply 8 mines across Africa including Perseus mining in Ghana We are the official agents for Birmingham Pumps Supplies Limited UK, Beresford Pumps and Associated Pump Engineers UK.

“ In every aspect of our business, we are now able to respond even faster than ever before to changing client needs” 234 | be directory

Muchina Engineering (Pump manufactures and suppliers of Mechanical seals gaskets and gland packing) our ranges are as follows. • End Suctions • Horizontal Split Case Pumps • Vertical Turbine Pumps • Self-Priming Pumps • Vertical Multistage Pumps • Horizontal Multistage Pumps We have developed unique skills which are manifested in the design and manufacture of pumps specifically engineered to suit all conditions. We have the internationally recognised ISO 9000 accreditation which includes a complete calibration and various test facilities to cover all aspects of our manufacturing processes. In every aspect of our business, we are now able to respond even faster than ever before to changing client needs. This is true not only


Muchina Engineering

for our consulting expertise, orders processing and delivery levels, but also for after sales service including maintenance, repairs and spare parts supply. In addition, we have carved a niche for ourselves with customer orientated documentation and professional software. By offering service levels that are unprecedented in the marketplace, we have made a total commitment to remaining a top company in all areas of our operation. Muchina Engineering has the design technology, which was made available to us from certain

overseas suppliers. Engineering skills and capability, which has been developed over the years in design and manufacture of various pumps which, suit the local conditions.

Muchina Engineering CC 50 Tweed Crecent PRETORIA SOUTH AFRICA E sales@muchina.co.za PO BOX 10519, CENTURION, 0046 T +27 12 345 3335 www.muchinaengineering.co.za

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MINING Recruiting

Spencer Ogden is the Energy recruiter of choice. By providing end to end full life cycle services within the Energy sector we are able to offer a 360 degree service to our Clients

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ith a presence in all the major Energy hubs including the UK, Scotland, Middle East, Asia Pac and the United States we are strategically placed to accommodate our clients and candidates. With vast knowledge and experience within each sector of the energy market, we represent energy professionals at all levels and recruit for clients internationally within: Mining, Oil and Gas, Power

“ We strive to deliver the best quality service to both candidates and clients ” 236 | be directory

Generation, Nuclear, Renewable, Smart Energy, Finance and Trading. Energy recruiting is Spencer Ogden’s sole focus. We are able to provide a dedicated service, skills and expertise as one recruitment company we create opportunity for both clients and candidates. We strive to deliver the best quality service to both candidates and clients by having invested in the best people, infrastructure, services and training. Our mining solutions include: • Metallurgy and Processing • Mine Engineering (Production and Project) • Geosciences (Exploration, Production and Project) • Project Controls • HSEQ • HR


Spencer Ogden

• Civil & Structural • Design • Mechanical (Construction/ Commissioning) • Electrical (Instrumentation & Control/Construction/ Commissioning) • Maintenance (Fixed & Plant) • Management (Project and Mine Operation) • Local operator hire (specialist on site solutions) Our services: • Recruitment Process Outsourcing (RPO) • On-site recruitment management • Contract, payroll and on-boarding solutions

• Permanent technical hire • Executive level search • Talent and market mapping • In-house research team (Mining analysts) • Market salary survey, local and expat analysis • Marketing campaign management (MCM)

Spencer ogden London Head Office 33 Charlotte Street London, W1T 1RR T +44 (0)207 2689 358 E mining@spencer-ogden.com www.somining.com

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Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

Be seen throughout our portfolio of magazines: •BE Mining Directory •BE Mining •BE Weekly •BE Monthly •

To find out how to get involved contact: vincent@bus-ex.com